good morning. breaking overnight, deutsche bank says it reached a $7.2 billion deal with the u.s. department of justice. and new this morning, italy sets up a backstop fund to shore up troubled banks. and a call for competition. president-elect trump takes to twitter urging boeing to undercut lockheed martin in its price. it's friday december 23, 2016, "worldwide exchange" begins right now. ♪ good morning. welcome to "worldwide exchange" on cnbc. happy friday.

i'm sara eisen along with dom chu. >> great to be here. happy friday to you guys. >> happy early holiday weekend. let's check in on the global markets. we say our first back-to-back losses for the dow since the election after another close lower yesterday. dow futures turning around this morning. up 9. it would take 80 points now to get to dow 20,000? we've moved further away. but good little santa claus rally could do the trick. s&p 500 futures are up 2.5. nasdaq futures are up less than 1 point in early trade. as for the ten-year treasury note yield, sort of hovering around unchanged for the last week or so. >> the last four, five days. >> 2.54 on the ten-year note yield. some buying this morning. yields backing off that 2.55 level. still close to their highs recently. >> absolutely. if you look at that picture, we'll go from there to the other

side of the atlantic, european equities still in focus now given what's happened with the banking sector specifically in italy and other big bank settlements. if you look at the german dax, up by 0.1%. the cac in france up by that much as well. ftse 100 in the uk off >> you were up all night i by 0.1%. in italy, up by almost a full percent. spain's ibex 35 up bay half percent. in asia, japan was closed today for a public holiday. you can see there that no trading. the emperor's birthday. japan, if you look at the hang seng and hong kong, off by a quarter of a percent. the shanghai composite off bay full percent. >> european banks are the story. as for the broader markets, we are seeing oil prices, they rose yesterday. they turned around after that surprise build in crude inventories after comments on the wires in iraq saying they'll go through with the planned cut in production. that's backing off this morning.

wti down a half percent. 52.64. brent, international benchmark for oil prices, 54.76, down a half percent as well. as for the action in the currency markets, the dollar back stronger yesterday. near its highest level. now we're talking back to 2003 against the euro. euro firm their morning. dollar/yen little changed, 117.32. the pound under pressure. so we've had this this morning and yesterday where the dollar was weakening and turned around after better economic data. durable goods, gdp, mixed picture. personal income and spending didn't do much. overall a story of a strong dollar this week, this year, fourth year in a row we have seen the dollar strengthen. talking about the dollar index. as a result gold has been on the back foot lately. a bit stronger this morning. up 2 bucks.

look at the decline of gold. >> strong dollar plays into that story. risk aversion coming off the table, and gold emerging markets, all of these strong dollar opposite type plays. >> yes. getting hurt. bitcoin, not so much. shooting up. developing story now to update you on overseas. reuters reporting a man believed to be the suspect in the berlin christmas market truck attack was killed in a shootout in a suburb of milan, italy today. that's been conflicting reports on the whereabouts of the 24-year-old tunisian man. we will update you as we learn more information. wanted to bring you that key headline. to the top corporate stories, deutsche bank agreeing to a $7.2 billion settlement with the justice department over its sale of toxic mortgages in the run up to the financial crisis. the tentative deal offers some relief to the bank. its stock was hit hard in september after it acknowledged the doj was seeking a $14 billion penalty.

deutsche bank will pay a civil fine of $3.1 billion and provide $4 billion in terms of consumer relief. the pa deutsche bank notes there is no assurance of a final agreement. >> a lot less than the $14 billion originally reported in the settlement, that's half at 7.2, but higher than what was rumored. >> 5 or 4 maybe? >> deutsche bank was in crisis mode and all sorts of rumors they would get it down to 4 or 5. i guess the upshot is they don't have to raise capital as a result of this fine? >> yes, and if you don't have to go about more of this pain process of not knowing what will happen in the future, for many of these big european banks it puts a big chapter behind them. >> deutsche bank shares have come back very far from where they were when they were tanking when this was originally

released. only down by 20% this year. names like credit suisse are down. also settling a probe for $5.3 billion. that bank says the deal includes a $2.5 billion penalty from the justice department and $2.8 billion payment in consumer relief to be paid over the next five years. credit suisse says it will take a $2 billion charge in the fourth quarter. shares not reacting as positively there. down a percent versus deutsche bank which is getting nice relief. >> historic lows for both of those stocks during the depths of this. >> another bank, barclays is responding to the justice department suing the company and two former executives for fraud over the sale of toxic mortgages before the financial crisis. the bank says the u.s. government's claims are not consistent with the facts and it will defend itself against the unreasonable allegations and

demands. barclays won't say why settlement talks with the doj broke down but reports say the bank believes continuing negotiations under a new u.s. administration may be more beneficial. certainly a theme for corporations, talking about this idea that they could look to get favorable or more favorable environments in a possible trump administration. >> a justice department under jeff session also have to take up this 200-page lawsuit from the u.s. suing barclays. i wonder, though, yes, it is considered a much more favorable environment for banks, the trump administration. but this is still a european bank having to settle with the u.s. trump has talked about u.s. first. >> and these were americans adversely affected to a large degree by some of the alleged misdeeds from some of these mortgage situations. >> that's a to be continued on

barclays. more news on italian banks and european banks. italy will be bailing out monte dei paschi after the country's third largest bank failed to raise enough capital on its own to stay afloat. the government passing a degree earlier this morning approving a 20 billion euro fund to prop up the banking sector with bmps the most vulnerable. monte dei paschi says it will apply to tap the fund. this is the bank's third bailout since 2011. shares suspended now on the milan stock exchange. the latest saga for the italian bank. it has come to represent the problems in italian banks. it's not a complete bailout. there will be losses taken by junior bondholders because of european rules. they can't put it all on the taxpayer. >> in the u.s. we had our own moral issues, the divide about whether we should have bailed

out our own banks. kn in italy it's a bigger deal. we'll watch that for sure. turning to politics, donald trump once again tweeting about lockheed martin and boeing. the president-elect says what he calls the tremendous cost and cost overruns of lockheed martin's f-35 joint strike fighter program led him to ask boeing to "price out a comparable f18 super hornet jet." lockheed martin shares dropping in the afterhours trading session on that news, off by 2%. boeing shares did edge slightly higher in the afterhours statement. up by 0.2%. boeing says it has committed to working with the president-elect and his administration to provide the best capability, deliverability and affordability across all boeing products and

services to meet our national security needs. >> this is the next chapter of negotiation from lockheed from president-elect trump. i don't know much about these programs, but i have read and according to defense expert the cited in the papers, the boeing f15 would need significant upgrades to match what is happening with the lockheed program. >> yeah. that f-18 has been a staple of our armed forces for a number of years now. the f-35 is viewed as the next generation with a lot of capabilities that the f-18 doesn't have. >> you wonder how realistic that threat is to go back to boeing and the f-18. i don't know this is a new strategy for traders. do you buy the trump tweet dip. >> it's worked so far. >> or be glued to it. in other political news,

president-elect trump stunning nuclear experts yesterday calling for more u.s. nuclear weapons. tweeting yesterday afternoon the u.s. must greatly strengthen and expand nuclear capability until such time as the world comes to its senses regarding nukes. the tweet came hours after russian president vladimir putin called on his country to boost nuclear power. trump spent part of yesterday meeting with top pentagon officials and defense contractors. everyone is trying to make sense of thee comments what it means, whether it should make them nervous or what. >> the reaction on social media in the immediate wake of that tweet was very, very passionate, i would say, on both sides of the equation. again, with trump, we -- in the news media, we've come to this realization that perhaps everything is a negotiation. >> we'll have to tear up the egypt every single day. we don't know what we'll get. >> you don't know what kind of

position he's jockeying for in this kind of tweet. the day ahead on wall street a pair economic reports today. the final trading session before the holiday weekend. november new home sales and december consumer sentiment out at 10:00 a.m. eastern time. sales are expected to have rebounded last month for new homes after dropping nearly 2% in october. stocks to watch today. alden global discloses a 25% stake in fred's, making it the largest shareholder in that discount retailer. alden said the stock is undervalued. cinsat second quarter profit rising. revenue in line. the uniformmaker expects full-year results to come in around estimates. cal-maine posts second quarter losses. results reflected challenging market in the egg industry and

it saw lower demand in the second quarter as prices spiked. more stocks to watch. business insider reports a bug in a recent version of twitter's android app inflated video advertising metrics by as much as 35%. the company let customers know about the issue this week and issued refunds. synergy pharmaceuticals reports positive results from a phase three trial for irritable bowel syndrome. they will prevent further data next year and the drug is under review by the fda. pfizer completed its purchase of astrazeneca's late stage antibiotics business. pfizer will pay $1.4 billion over the next few years for the development and marketing rights to those drugs and royalties. both shares edging up higher. coming up, a snapshot of the

american consumer. was we should expect from shoppers and the company who provide them staple products. my 2017 predict sluns when we come back. stay tuned, you're watching "worldwide exchange." ions when e back. stay tuned, you're watching "worldwide exchange." your path to retirement may not always be clear.

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year. >> 2016 was another big year for dealmaking and cost cutting in the consumer staples industry as the quest for growth remains elusive. 2017 will be a year that distinguishes the winners and losers in this industry. hopes of lower corporate taxes from a new trump administration and republican congress are fueling expectations of big profit boosts. it's a smaller consumer names with sales coming from the united states who pay the highest tax rates, think hershey, pinnacle food, reynolds american. they'll get the biggest benefit if reform does pass. big food beverage and household productsmakers have struggled for years to connect with the younger generation missing key trends like greek yogurt and energy drinks, and buying food and staples online. add it up, you have an industry that's behind the curve with little to no top-line growth

forcing companies to beef up margins, cutting costs, raising prices. lack of growth means you'll see more mergers and acquisitions. also words that 3 g and warren buffett are gearing up for their next tie-up. mondelez seen as a leading contender. food and beveragemakers look for brands that are resonating with younger consumers. if you look at performance of some consumer staples companies, it was on a roll in early 2016. >> absolutely. >> considered -- >> everybody wanted campbells soup. everybody wanted all these consumer products companies, because they were things we used all the time and paid these hefty dividend yields. >> we had super low interest rates that kept getting lower. they were defensive. it was a risk-off environment. look what's happened since. they have sold off, since the

election have not participated in the post election rally as much as other sectors. why? interest rates have risen. we've seen not only the fed raise interest rates, but treasury yields go up. that makes these dividend pairs less attractive. they're not growing. >> right. >> that's the problem. that lack of top line growth set to continue into next year, which is why i predict more m&a, more cost cuts, and more strategies to try to tap into what's actually working and what millenniums are going for. >> for many of these consumer products companies, if you reach that size and scale you are at the mature phase of your growth cycle, which means your dividend payouts, your payout ratio will always be big. growth is always going to be a troubling spot for these big guys. >> absolutely. well, coming up, the top political stories including two potentially market moving tweets from donald trump. and exclusive access, cnbc cameras taking you inside the

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welcome back to "worldwide exchange." good morning. let's get you up to speed on the market action. green arrows on the screen for u.s. futures. dow futures up 9 points, a bit of strength here. s&p futures up 2.

nasdaq futures up flat. we did come off of two back-to-back losses for the dow. have not seen that since november 4th. putting us about 80 points away from 20,000. that much heralded number we have not yet reached. as for early action there is confidence coming out of european banks after deutsche bank finally announces a settlement, 7.2 billion with the u.s. justice department. that's about half of what was originally reported and what spooked the markets several months ago, 14 billion. as you can see, italy strong this morning, up a percent after another step closer to the world's oldest bank. bmps troubled bank getting an italian bailout. german dax flat right now. the ftse 100 in the uk is the underperformer. as for the currency market, the dollar's march higher has continued this week. it's pulling back a bit this morning. euro 104.51. dollar/yen 117.55. fractional moves in currencies

looking for direction with the pound also unchanged at 122.75. home sales today, and a read on u.s. consumer confidence. no earnings report of note. >> absolutely. let's turn from the markets now to a different side of the politics side of things, this morning most of us associate president-elect trump with extreme wealth. but today we're taking a sneak peek at his childhood home which shows that he actually came from more humble beginnings. here's robert frank. ♪ >> reporter: just 13 miles from president-elect donald trump's lavish 5th avenue apartment is this queens, new york home where he lived until he was 4 years old. >> this is the address listed on donald trump's birth certificate. >> reporter: the modest tutor on a quiet street hits the auction block and is expected to bring in millions. >> the home originally went on the market for 1.6 million in july. some speculated the house is

worth 3 to 10 times worth the original price now that he's president-elect. >> the 2500 square foot home was built by trump's father in 1940. it still includes many of its original features. >> the hardwood floors, we expect those are original. panelled library, wood trims, wood fireplace, those are expensive trims not commonly added to homes of this nature after they were built. >> reporter: there are five bedrooms and 4 1/2 bathrooms. >> we're on the second floor of the home this could be the room the president-elect slept in when he was a child. >> reporter: a piece of history that can be yours for the right price. jamaica estates in queens. >> i know that neighborhood. my parents are from queens as well. it is not the golden elevators of trump tower that we're used to seeing. >> that house, if you get that valuation for that home in that neighborhood, doesn't it increase everybody's home? >> i think you have a special

premium for that one. i don't think there's correlation between -- good timing by the sellers. good bet for them that trump got elected. among the other headlines in the trump family, ivanka's flight fryesterday got disrupte. a man says he and his husband were removed from the jetblue flight in new york before it took off. jetblue saying the decision was made to remove the men from the flight because of the risk of escalation during the flight. getting a lot of buzz and on social media. now to sports and thursday night football. a match-up of long-time division rivals, the giants and philadelphia eagles. you know that jim cramer was watching this game. >> did you see him on twitter? did you see his outfit? out of control. >> that's jim for you.

>> he had an eagles blazer and tie. he's not watching because he's probably sleeping in because he was partying. >> he was. he has reason to be. the giants wanted to nail down that playoff spot. but eli manning threw three picks. three interceptions including one returned for a touchdown. philadelphia beat new york 24-19. with the giants loss the cowboys have won the nfc east division and clinched home field advantage throughout the postseason. the cowboys very happy about eli manning's three interceptions. >> congratulations. when we come back, the top stories including deutsche bank reaching a $7.2 billion deal with the u.s. department of justice. stay tuned. you're watching "worldwide exchange." l? what's critical thinking like? a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom?

what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter. morgan stanley

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and we promise we'll be there when you need us. ♪ deutsche bank says it reached a $7.2 billion deal with the u.s. department of justice. italy looks to backstop its troubled lender. the march to 20,000. will santa claus come to wall street. amazon counting on a final flurry this holiday season. it's friday, december 23, 2016. you're watching "worldwide exchange" on cnbc. ♪ good morning. welcome back to "worldwide

exchange" on cnbc, i'm sara eisen with dom chu in for wilfred frost. >> happy holidays. this is the procrastinator's time to go shopping. it will be because i will be doing some. >> the national retail federation found that most people wait until december 23rd to buy their last gift. >> the whole super saturday thing, that was last weekend, i did a lot of shopping then. >> we get an extra day because christmas is on a sunday. the top stories, european banks, deutsche bank agreeing to ingi2 settlement. this tentative deal offers some relief to the bank. its stock was hit hard in september after it acknowledged the doj had been seeking a $14 billion penalty. deutsche bank will pay a civil fine of 3.1 billion and provide $4 billion in consumer relief. they expect to have a pretax charge of 1.2 billion in the fourth quarter. deutsche bank note there's is no

assurance of a final agreement. investors are breathing a sigh of relief here just on the news. it's out. it seems to be somewhat finalized. >> puts a cap on something. they can move forward. >> half of wloo what was announ previously. >> half of the 14 billion. >> the fear there is they would have to recapitalize and raise money. this putting those fears to rest. credit suisse also settling a u.s. probe into the sale of mortgage backed securities before the financial crisis. they settled that for $5.3 billion. the bank says the deal includes a $2.5 billion penalty from the justice department and $2.8 billion in consumer relief to be paid over the next five years. credit suisse says they will take a $2 billion charge in the fourth quarter. two banks, deutsche bank and credit suisse agreeing to multibillion dollar settlements. >> no accident.

the obama administration wants to close the books on this and get it done. barclays responding to the justice department suing the company and two former executives for fraud over the sale of toxic mortgages before the financial crisis. the bank says the u.s. government's claims are not consistent with facts and they will defend themselves against the unreasonable allegations and demands. they continue say why talks with the doj broke down but believe negotiations under a new administration may be more beneficial. >> a theme we've seen develop among corporations. >> punt it to the new administration, they'll be nicer to us. staying on banks, italy will bail out monte dei paschi after the country's third largest fails to raise enough capital to stay afloat. the government passing a decree this morning passing a $20 billion euro fund to prop up the banking sector. monte dei paschi says it will

apply to tap the find. this is the bank's third bailout since 2011. shares are suspended today on the milan stock exchange. it's been a volatile trade. still down significantly just over the past three months. >> those are the big headlines overnight that you need to know. let's check in on the global markets. sentiment is okay. >> it's stable. futures are up. the dow futures are up 8 points. still in thin holiday trade. volumes about 30% less than normal yesterday. today, the day before a long weekend. it is a full day of trading, which we're not used to the day before christmas because it's -- because we still have another day tomorrow. >> in the past, with these lighter -- it speaks to the color in the market. if you have lighter trading volumes, typically you could see more volatile swings, because it doesn't take as much to move the market around. this time around, over the last few days, we've been noting on the show and throughout the course of our programming, the dow is pretty much stuck in a tight trading range.

>> stuck, holding gains and coming off a spectacular rally. >> still near record highs. >> since the election. as for the early trade in europe, strength in italy in particular after word that italy will move sooner to bail out the troubled banks including banco monte dei paschi. italian stock market up a percent. the dax flat to higher. france as well. these are near the highs of the year for european stocks as well which have joined with the u.s. rally. as for asia overnight, the japanese market was closed because of holiday. we show you hong kong and shanghai, both lower. shanghai comp closing down a half percent. in hong kong, down 0.3%. underperformance in emerging markets, especially in asia. epfr, which tracks fund flows showed continue flows out of emerging market equity funds this past week. this is on trade fears, trade

tensions heating up with the u.s. in the next administration. also on the federal vef rairese raising interest rates. >> we talked about this last night, the emerging markets on the fx side, the big etf that tracks the large cap chinese stocks have been on a losing streak. >> because the money is flowing here. coming into the u.s. as for the broader markets, if you look at the oil trade, oil is weaker so far this morning. wti crude $52.63. that's down by a half percent in early trading. ice brent crude, $54.72. that's off by a similar percentage point as well. as for the ten-year u.s. government note yield, fairly stable. just like the markets over the past few days, 2.546%. just around that 2.55 level. keeping an eye on ten-year treasury note yields. as for the dollar, we still have euros hovering near the

multi-year lows at this point. 1.0451 is what it will cost to buy a euro in today's market. dollar/yen, 117.35. weaker dollar there as well. the pound, 1.2263 is what it will cost for a pound. as for gold, a little bit of gains so far. 0.1% to the upside. futures, 1,132 so far. >> i will get them to add bitcoin to this market check, we passed $900. >> remember those days it would swing $300, $400 a day? >> yes. investors pulled more than $21 billion from u.s. based stock funds in the past week according to the latest lipper data. analysts say the level of outflows may be overstated

because of end of year payouts by funds which are typically reinvested quickly and show up in future weeks as inflows. they show up as bonus payments. >> capital gains distributions. the day ahead on wall street, there is a pair of economic reports out today that are worth noting. the final trading session of course before the christmas holiday weekend. november new home sales and december consumer sentiment out at 10:00 a.m. eastern time. sales are expected to have rebounded for new homes last month after dropping 2% in october. a developing story overseas to update you on here. a suspect in the berlin christmas market truck attack has been killed in a shootout in the suburb and northern italian city of milan. the italian interior minister confirming the news to reporters within the last hour or so. there had been conflicting reports on the whereabouts of the 24-year-old tunisian man. now he can with confirm according to the italian

government he has been shot. to politics, trump once again tweet being lockheed martin and boeing and moving the stocks. the president-elect says what he calls the tremendous cost and cost overruns of lockheed martin's f-35 program have led him to ask boeing to price out a comparable f-18 super hornet. lockheed martin shares dropping about 2% on the news. boeing shares moving higher. in a statement boeing says it has committed to working with the president-elect and his administration to provide the best capability, deliverability and affordability across all boeing products and services to meet our national security needs a spokesperson for lockheed mart be declined to comment to cnbc. president-elect trump melt with the ceos of both companies at mar-a-lago during his vacation on wednesday. >> working overtime.

>> pr teams, traders, you name it. as we discussed earlier, you know a bit about this. the f 18 from boeing, not considered up to technological speed as the f-35. that might be a challenge. >> when i was growing up, the blue angels were still flying those. i think they still are. it gives you an idea of the age of the jets. >> i'm wondering, it boeing a valid competitor here for this? is this going to be an issue that affects lockheed martin's business? >> it's all a negotiation. turning to wall street, bridgewater associates looking to change the management game itself. the "wall street journal" reports the hedge fund firm wants day-to-day management including hiring and firing possibly to be guided by software. the system would give users gps directions for house staffers should be spending their days down to whether an employee

should be making a particular employee should be making a phone call or not. machine learning is a huge deal, especially when you talk about the world's biggest hedge fund. this may be a surprise because it's a hedge fund and high profile. maybe not a surprise. john rubenstein was hired, the ex-apple executive by bridgewater to be the co-ceo. a guy who does a lot of work in technology is helping to run the firm there for them. >> the whole issue of ai taking over. you have to think hedge fund also adopt it in some way, shape or form at some point. this idea that he -- that it's related to his successor, in terms of strategies, advice. >> it tells you with hedge funds like bridge water that do algorithm or rules based investing, if you make something complicated enough you can maybe account for all the variables. time for some top trending stories.

calling all procrastinators. amazon looking to change the game for last-minute shopping. the company pushing its prime now rush delivery which is part of the $99 per year prime offering. guaranteeing delivery within two hours. >> this is amazing. >> amazon now extending this offer to allow customers in select cities to place orders as late as 9:45 p.m. on saturday and still receive their packages by midnight. that's amazing. >> you know, i have to wonder whether the economics of something like that are and how you actually ramp up in scale. >> they are fighting retail. you think that the brick-and-mortar stores have the edge in the last-minute shopping because people don't trust it will arrive on time. amazon is changing the game. >> as they always have. >> getting a lot of love. "usa today," amazon has your back procrastinators. how about this, a golden cased president-elect trump collectible iphone hitting the market. it's a whopping $151,000. this limited edition iphone 7

featuring diamonds, gold along with president-elect trump's face on it. the extravagant phone be created and sold by gold genie, a store in the united arab emirates. >> they like gold there. uber partnering with snapchat for its own custom filter. they're rolling out a snapchat integration to allow customers to unlock custom filter while riding. they could select a snap card and choose from a slew of uber branded filters, including a filter showcasing your estimated time of arrival. i don't get it. >> you're a snap person, if you don't get it -- >> i can't imagine doing both at the same time. it is interesting that they're partnering up. also check this out. green bay packers fans will do anything for their team. we know this. even showing up on a random weekday to, yes, help shovel snow from the stadium. the packers put out a call for

volunteers to clear out the stands yesterday after a recent snowstorm dumped several inches in the area. some people waited in line for three hours for the opportunity to shovel snow from the herald field at lambeau. >> committed. >> i've done it once. i would do it just to say i've done it once. before we head to break, european trading at this hour. the banks are higher. and so is germany. but just barely. the real strength it coming in italy. the uk is underperforming. stay tuned. you're watching "worldwide exchange."

. welcome back to "worldwide exchange." now our morning must-reads. my pick in the "washington post" is penned by john mccain and is titled we have a stake in syria yet we have done nothing. we must acknowledge we have a stake in what happens in syria. it's not just about the suffering of others as moving as that is, it's about the national security of the united states, the resurgence of al qaeda in syria affects the u.s. the rise of the world's most advanced terrorist organization affects us as well as we saw in paris and san bernardino, california. a refugee crisis that

destabilizes allies and threatens the foundation of western democracies affects us as well. he's not the only person that feels this way. the question becomes how committed are you to fighting this? it may involve in more boots on the ground. there's just perhaps not an appetite for that kind of movement among many of the population in america. >> just add it to one of the many difficult challenges that will be facing the incoming administration. but the current administration getting some heat for this as we get these devastating reports out of aleppo and sear yo. my must-read today is in "usa today." the business of ugly sweaters. >> yes, it is christmastime. >> retailers turn it into a big business. forget the holiday traffic trends being down and the deep promotions, they have a gem here with holiday sweaters. whether it's a sweater depicting a knit darth vader wearing a

neck scarf or a cheerily chillin' with my snowmies pullover, the more outrageous the better. this is something cnbc has been all over. >> my first year at cnbc, i didn't realize we had an ugly sweater contest here. the night before i went shopping all over west chester county, new york. >> you couldn't find an ugly one? >> they were all sold outful i had to go to a small store. >> i need to get one, actually. >> we'll get you one. >> if we can find one. maybe they'll go on sale after the holiday. approaching the top of the hour, the team is getting ready for "squawk box." melissa lee has a look at what's coming up. good morning. >> i think all ugly sweaters need to have a battery in them. >> with the lights? >> dom, don't bother buying her

an ugly sweater unless it has an ugly lighting feature or something moves on it. >> i will find one that has l.e.d.s. >> blinking lights. >> exactly. best kind. we have a big show coming up. what are people doing today? shopping and traveling. that's what we're focused on. we have the ceo and founder of wheels up, he'll be our guest here. the ceo of flight aware, and talking shopping with some of the top retail analysts in the space, some advice for you procrastinates who still haven't done your shopping. we might be able to save you. >> she's talking to me. i know she's talking to me. >> i know, dom. >> you have all afternoon. i do. >> good coordination here. good color coordination. thank you very much. we'll see you in a bit. coming up on our show, the dow coming off back-to-back losses for the first time since before the election. we'll get you 2017 market

predictions from s predictions.

welcome back. u.s. equity futures indicating a higher start for the dow and s&p. nasdaq futures are down just a little less than two points. joining us no to talk about this trade is chad morganlander. good morning. >> good morning. >> kafcarl icahn on the half ti report yesterday told scott wapner that he was bullish after election night, but did say he is getting cautious now adding to some of his hedging because of this tremendous rally we're seeing. is that becoming a prevailing view? >> absolutely. you have not seen a post-election rally like this ever. valuations are somewhat topee, sitting at a forward looking multiple. mind you, it's an optimistic forecast on earnings and revenue

growth for next year. roughly 17 times. we are slightly overweight equity exposure but looking at a long-term forecasted return in the range of 6%. >> as we talk about, there's tactical, the carl icahn reportedly buying futures when they dipped 800 points on election night. >> saying he wishes he bought more. the tactical trading stuff and the strategic long-term view. as a portfolio manager now, are you blending the two of them a bit more? are you more short-term focused now? do you kind of feel like you can stick to your guns with your long-term strategy and be okay? >> good question. we have a strategic allegation and tilted on a tactical basis by 5%. our balanced portfolio is 5% above its benchmark when it comes to equity exposure.

we still have fixed income exposure in there, some moderate exposure to gold. >> you have gold and fixed income, even though both have been big losers after the election. why? >> our duration risk within our portfolio is somewhat lower than the benchmark. we do believe that fixed income over the course of the next 18 months has positive return. our forecast on the ten-year right now is roughly about 2%, 2.25% for 2017. so we're not looking for rates to go that much higher. we believe the federal reserve will move roughly about two to three times. three times if financial conditions are some what smooth for next year. >> we have spoken so much this show about what's happening internationally. we talked about the emerging markets coming under pressure the last few weeks, months, what's happening with european banks. are there places outside the u.s. borders that might seem attractive to you from an allocation standpoint?

>> let me talk about the risk first. you have, i think, a pressure that's starting to happen within china. china was a critical supplier of credit on a global scale over the last ten years. that has pushed through a lot of investment, a lot of global growth. we believe that's going to continue to perhaps unhinge itself over the course of the next 18, 24 months. that's going to apply pressure to global growth. so we're very concerned about that aspect of not only global growth but what that will do to the financial system. with that said, we would have an underweig underweighting within the peripheral of europe around that area. >> chad, thank you. >> thank you. >> good to get your take into the holiday weekend. what are you watching today? >> for me, dow 20,000 watch seems like a broken record. i will say it again. we may get there. >> 80 points away. wouldn't take that much. >> i would say i would watch

those trading volumes. >> watch new home sales and consumer confidence, that might add fuel. >> 10:00 a.m. eastern. >> that does it for us on "worldwide exchange." happy holidays. "squawk box" is next. is the stuff that matters? the stakes are so high, your finances, your future. how do you solve this? you don't. you partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. morgan stanley.

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good morning. deutsche bank says it has reached a $7.2 billion deal with the u.s. department of justice over the sale of toxic mortgages. new this morning, italy says the suspect in the german truck attack was killed in a shootout in milan. he was already in milan, because you can basically go wherever you want over there. and the tweeter in chief, defense stocks moving again following a tweet by president-elect trump. it is friday december 23, 2016. "squawk box" begins right now. ♪

live from new york where business never sleeps, it's "squawk box." good morning. welcome to "squawk box." i'm melissa lee. our guest host this hour, kenny dichter from wheels up. we'll check on equity futures at this hour after the first back-to-back losses yesterday in the markets in six weeks. looks like we will have a higher open. the last trading day before christmas, the average return is ten points. looks like we're in line there with 8 points at the open. s&p has indicated to add 2.5 points. nasdaq opening slightly lower. a look at the picture overnight in asia. japan's nikkei was closed for a public holiday. we did see losses in shanghai as well as the hang seng. as for europe, the big news there, deutsche bank settling over the mbs investigation. that is giving