good morning. welcome to "street signs." i'm nancy hungerford. >> i'm carolin roth. these are your headlines. >> new years and new highs. european equities creep stronger at home and in china. and lch clear net is sold to eurone

euronext, for 510 million euros. helping to clear the way for a merger with deutsche boerse. an upgrade for intercontinental group after barclays gives the hotel chain an overweight rating, sending the shares to a record high. good morning. welcome to "street signs." if you're trading here in the uk, happy new year to you. the ftse 100 is out of the gate today hittinging fresh record highs. joining the broader eurozone, which did see some of its highest levels of more than a year yesterday for the first day of trade of the new year. today we're looking at more strengths with the stoxx 600 going into bull market territory. let's give you a shot of the individual bourses. the ftse 100, higher by 0.8%. just below the record we saw

earlier in the session. xetra dax higher, but basically flat for the main market which did enjoy sharp gains yesterday in the neighborhood of 1%. clinging in positive territory. the french main market higher by a half percent. the ftse mib higher by 0.13%. yes, the gains are holding but just barely positive at this stage. let's look at some individual sectors on the move. oil prices got a bit of a bounce in their first trade of the new year. opec cuts officially coming into action on sunday. overall weakness just in real estate, retail and chemicals. banks continue to outperform, higher by 1.1%. autos on the move higher. basic resources also leading the way higher by more than 1%. >> let's see whether our next guest shares some of the optimism that we're seeing in the markets. that guest is ian barnard from capital generation partners.

thank you very much for joining us. happy new year to you. very different tone from what we saw in the markets a year ago. that's when we saw the china selloff led by china. and that lasted well until february. how do you feel about equities starting off the year 2017? >> good morning. happy new year. what a positive start. the dilemma for lots of investors, will the trump reflation trade of 2016 carry over. from what we've seen the last couple of days it looks positive. the question is how also do you take advantage of that? how do you play it? is it going to last? is it not? how do you trade it? a couple themes at the moment are u.s. equity valuation levels are quite elevated. they may well go up further. there's a risk of them coming back. using call options to express that view is effective. the rotation out of yield stocks

or stable dividend bond proxy stocks into value stocks will continue. >> okay. so unless the u.s. economy accelerates further, you would say u.s. equities are overvalued? >> i think that's right. markets are saying they're expecting a whole lot of economic growth coming, based on their belief that trump will engage in fiscal reflation expansion. we need that economic growth to justify the valuation levels. if it comes, fantastic if it doesn't, investors have to think again. i wonder if that will come through. we're seeing the labor market is already tight. seeing that productivity is extremely high. how can trump change that? >> what he can do and what he said he will do is undertake tax reform, reduce tax rates, and also do something about the off shore cash holdings of u.s. corporations. so there are two steps he can take. but you're right, there has been quite a lot of monetary

tightening. will the fiscal expansion come in time, will he be able to get it done? >> how does this play out into your view of european equities this year? kicking off the year here we're getting a good start. people still think that perhaps european equities are cheap relative to the u.s., but there are quite a few risks going into the new year. what's your view? >> we hold that view. relatively speaking european equities look better than the u.s. ones. if you separate europe in political news and economic news. we have a whole run of events in 2017 that could cause problems. but also economically quietly there are positive things going on. >> any sector specifics you would prefer in europe? >> one of your earlier speakers talked about value financials. we think those are a good value stock, both in the u.s. and europe. >> another area people look at when the new year hits are the other parts that were really unloved towards the end of the year. one of emerging markets on the

back of the trump rally. what is your view in the space? >> look, i think if donald trump does all that he says he's going to do. it looks pretty gloomy for emerging markets, because the strong dollar is not good for them. certainly if he imposes import tariffs that would be harmful. i think they're in the face of bad news. we have a neutral view on them at the moment. >> i wonder what's happening with the vix right now. in december we saw the vix plummet by 15%, it's at the lowest level since july 2014. on the other hand we're seeing plenty of trading in the vix contracts. does that show you that there is some complacency but only smart money knows what's going on? what's your view? >> i think what we think we've seen with this is you've seen moderated levels with tremendous spikes. when you look at the averages

they're quite elevated. is there smart money out there making money? definitely. the supply of cash into volatility strategies is causing it to be lower than historically. then the spike the other way are greater. >> ian, thank you very much for that. that was a pretty good opening salvo for 2017 from ian barnhart. let's bring you up to speed on stock movers this morning. euronext made a 510 million euro all cash offer for lch clearnet. euronext says it expects pretax synergies of 13 million euros with potential for additional revenue gains. the completion is subject to the closing of the merger between deutsche bourse and the lsc. we will speak to stephan stephane boujnan in about 30 minutes time. shares of bank co bmp are

merging higher after italy's third largest bank was created last year with 170 billion worth of assets. for the first time in over 50 years. the best selling car in sweden is not a volvo. according to the country's carmakers association, the volkswagen golf drove to the top spot in 2016 with 5.9% of sales. volkswagen also stole the swedish crown. the last time volvo shifted to second place the beatle was number 1 in 1962. >> do you think that irks the swedish? do you think now they'll make a big push for the volvo once again? >> it's the number one model we're talking about. overall volvo is still the most loved brand, best selling brand when you look at models across the board. a lot has to do with pricing, that volvo is targeting a more

market higher price, an suv crossover now. if you're volvo you're not so worried about the top seller, you want higher margins. this other idea that volvo is a more global economy now. they are more concerned about itself sales growth which has been extremely strong. >> up 20%. >> yes. >> i'm so glad i have an auto correspondent next so me. you can come back to me with the stats. shares in intercontinental hotels hit ra record high after barclays upgraded the stock to overweight and raised the stock price. the bank also said it sees ihg as the best sector play due to a potential rebound in u.s. growth. we want to hear from you. get in touch. just about 50 minutes to go. get your questions in nice and early. the show address is streetsignseurope@cn streetsignseurope@cnbc.com. you can reach us directly on twitter. you can find me @nancycnbc and --

>> @carolincnbc. the manhunt continues for a gunman who killed 39 people in a nightclub attack in istanbul on new year's eve. we'll get the latest from turkey after this.

welcome back to the show. chinese stocks closed higher after factory activity hit the highest level in four years. expectations were outpaced with output rising at the fastest pace since 2011. let's go out to singapore. exactly one year a go it was th poor pmi numbers that spooked the markets. very different tone this year. >> it is what a great way to

start 2017. we are seeing real evidence of macro economic stability. beijing seems to be drawing a fairly solid line under slow growth expectations. the question moving forward now, question for the future quarters is sustainability. and the future months as well. in the next month or two, this month and february, we really are running into an area of seasonal distortions with the chinese lunar new-year. that will muddy the waters. but in the here and now, the markets like this figure. the aussie markets and the aussie dollar hard wired into the china economic story. solid momentum today for the sydney market and the australian dollar as well. the problem i have, as i said, is really sustainability. and the other factor here is the currency. and stronger dollar, high u.s. rates is really at the center of the negative feedback, not just

for china and its currency but for em more broadly. we've seen depreciation pressure on the dollar yuan, tantalizingly close to the $7 handle. the market likes a big round number, but it is a pace of defreshiation. right now it's not particularly disorderly. beijing seems to be a good job of finessing that. watch currently, watch outflows. remember, ladies, beijing also has been pulling out all the stops to try to restrict the outflows. that will be a big problem moving forward. if we continue to see a stronger dollar and high u.s. rates, continues to be quite painful adjustment for em more broadly and for us in asia. we're watching this one closely. back to you. >> thank you for that update. elsewhere, turkish authorities have released photos of the gunman they believe is responsible forever

an istanbul nightclub raid that led to 39 people being killed. hadley joins us on the phone from dubai. hadley, as more time passes, as this manhunt goes on without a resolution, what is the feeling amid the frustration towards the government when it comes to perhaps a lack of security preparedness, failings within the intelligence services? >> i think it certainly speaks to the fact that so many people in turkey today are feeling incredibly uncertain. they're uncertain about the security of the country, uncertain about the future of the country, of course i'm referencing the fact that the country's periresident has deci to extend state of emergency powe powers, he wants to increase his presidential powers, have a stronger hand when it comes to the security of the country, nobody seems to be feeling that except those basically chased out of government positions, out

of positions within the school system in turkey. the government today claims those responsible for the coup attempt last summer. questions about the regular turkish citizen today about what the government can do and questions about the economy as well. we've seen the economy take a hit. foreign currency reserves lessening, and billions of dollars lost due to this lack of tourism in the country. so, a lot of worries for the average turk today. at the same time, this was a country that had extraordinary economic growth, they're wondering what happens to that. they're wondering about the geopolitics of the region, because we've seen so much activity when it comes from turkey when it comes to fighting the islamic state in syria. and questions relating to what happens next with that u.s. relationship because turkey is a nato member. what this means for president-elect trump coming into office in a couple weeks,

how that relationship will develop. this speaks to a broader uncertainty for the average turk, but not just for turks but for international investors. >> hadley, thank you very much for that. thank you for outlying the issues for turkey. syrian rebel groups are threatening to boycott peace talks aimed at ending a brutal conflict with the government which claims the lives of hundreds of thousands of people. in a statement the rebels said they were freezing talks about participating in the russian planned peace summit because of many and large violations by the syrian government of a cease-fire brokered last week. the cease-fire which was thrashed out by russia and turkey, had mostly held since it came into effect last friday. protesters blocked a number of roads and petrol stations in mexico after fuel prices rose by more than 20% over the weekend. this follows a decision by the government to deregulate the gas prices. fuel robberies from pipelines

have also spiked since december. 2016 saw wti's best year since 2009, and gold snapped a three-year losing streak. jackie deangelis takes us through what to expect from commodities this year. >> reporter: volatility was the name of the game in commodities. gold, oil, copper all saw massive swings. it looks liking that will continue because there's so many unknowns. gold prices will move lower. gold prices will continue to move on fed action. a dovish fed has been supportive of gold. a hawkish fed is not. the fed's actions impact the collar which impacts gold. so, with fed change coming, the expectation is that gold prices will not fare well. crude prices will move higher. crude oil saw massive swings this year. it's expected to slowly climb higher and stabilize next year. the range is expected to be between 60 and 70 but that hinges on supply decreasing and

demand rising. a number of caveats could throw that equation off. crude has shocked the market the last two years. it's not impossible for it to strike again. copper prices seesaw. copper is an indicator of global growth. specifically in places like china. copper will continue to be in focus, expect prices to bounce around. data, headlines, the fed, these will all influence this hot commodity. oil prices kicked off 2017 on the rise with investors hopeful that an opec deal to cut production will tackle the global supply glut. the agreement officially took effect on sunday with kuwait reportedly kicking off the cuts by trimming output by 130 barrels per day. joining us now is anish kapadia.

good morning. papi new year. thank you for joining us. finally investors in oil can breathe a sigh of relief that opec cuts that were agreed are taking effect. they took effect on sunday, in fact. as we get a better idea of compliance, how the cuts take shape, what is your outlook? a lot of people are wondering where oil goes from here after a stellar year. >> yeah. great year in 2016, eventually for oil after touching some pretty low points. we are pretty bullish. oil continues to improve through this year and beyond. the opec cuts are part of that. you'll see a significant amount of oil being taken off the market. you have the nonopec tagging along with the rest of opec, a lot of that is the declines kicking in from producers. that will happen after a few years of low oil prices.

if demand stays robust, you are going to see inventories draw down significantly through the first half of this year. >> what does that mean for price for the end of 2017 and then 2018. >> from a price perspective, we expect prices to get to around $75 per barrel mark by next year. we think it could reach that mark by the end of this year. th that -- those numbers sounded way high, i suppose, only a few months ago. following the opec agreement, well within sights. >> want to talk more about compliance to this opec deal. in the initial stage i would think every country will adhere to the deal, except for libya, for example, which is not part of the deal. we had a guest on this morning who said iraq will not comply at all. when do you think we'll be able to measure its effectiveness? after how many months do we see

the real thrust coming through? >> it's going to be a couple months before you can really see it in the data. there's a lag effect in terms of getting the data through. you can see is earlier through loadings, that kind of data. it's going to be a couple months before you can see the impacts coming through. the biggest component of the cuts is going to be saudi. i think saudi are firmly behind this. you will see them taking the lead, as a result other countries will follow. i mentioned non-opec earlier. you have countries like mexico that continue to underperform expectations. the most recent production data showing production down 9% year over year. you'll see those cuts coming through from non-opec as well. >> if we look at oil prices, wti crude trading at 54%, brent at 57. some u.s. producers, they must be rubbing their hands.

whenever they see oil prices going back above 50, they add capacity. we see that in the baker hughes numbers every week that smokes out the effect of the opec deal, doesn't it? >> on a longer term basis that's true what we're expecting this year from the u.s. is a few hundred thousand barrels a day of production growth. when you look at 2017 on average versus 2016. from an -- from an exit to exit basis you could see a million barrels a day of growth given the increase in rig count, the increase in efficiency. you have to -- once you start to see higher prices coming through, rigs being added back, you will see cost enflags come through. t inflation come through. >> is this the year we see the oil majors pick up capex, pick up spend on oil discovery? that's been a big part of the bear market story when we saw oil companies pulling back.

>> it is interesting. if you looking at where capex is expected to go at the moment in 2017 for the majors, probably further down. and i think you will see some recovery in spend. but what you'll probably see more of are acquisitions. you will see the m&a side of things picking up. we think that the majors are able to cover their dividends now. it's around $50 per barrel. that's with the script dividends in place, ie payinging ina portf dividends in shares. the excess cash flow they get in an ole price environment above $50 will go above acquisitions. at the end of last year you've seen bp announce a number of deals. some other producers as well, they'll have to go out and acquire in order to grow towards the end of this decade. >> anish, thank you very much.

as we were speak, wti hitting an 18-month high there. thank you so much. stay with us. we have to take a quick break. you can check out our world markets live blog which runs throughout the european trading day. we'll be right back with breaking manufacturing data out of the uk.

welcome back to the show. you're still watching "street signs." i'm carol care. >> i'm nancy hungerford. new year, new highs. european equities creep higher on strong manufacturing data at home and in china. the london stock exchange agrees to sell its french clearing business lch clearnet to you're ror next for 510 million euros, helping to clear the way for a merger with deutsche boerse. wti hitting an 18-month high as the output deal takes effect. and donald trump takes aim at beijing saying the chinese government has taken economic advantage of the united states while not helping with north korea. good morning. welcome back to "street signs." we want to bring you breaking

data coming on uk manufacturing for the month of dress. looking at a print of 56.1 for the pmi figure, well above the forecast for 53.5. also an increase from the print in november of 53.6. sterling is on the rise after this uk data. as you can see, a bit of a delayed picture there, sterling slightly lower against the gr n greenback. we've seen a round of pmi data not just from the eurozone, chinese pmi outperforminging. similar story in the uk with that december pmi figure at 56.1. >> obviously once again better than expected soft data. hard data also has been pretty good. do you expect more short squeezes in pound sterling on this? >> we have already seen shorts going back to july.

we may see more of that particularly if this trend extends through into the services number later this week. probably we need to look away against the u.s. dollar, more against the euro where you may see more of a sterling gain in the short term, that might encourage the sub 84 level. >> currently at 85. what's the target for the next three months? >> i think we will see it move back lower. that 83 area coming back into view. there are uncertainties in europe as we go through into the political season. that's one reason why euro will be a moderate underperformer the first half of the year. >> pound sterling has been the investors favorite short position in 2016 will it stay that way in 2017 or will be the euro? >> i think for steriling there are inherit insertities as we go through the first quarter. awaiting that supreme court judgment, the triggering of article 50. we don't know how the relationship or negotiations will go. so i think sterling shorts will

remain sizable but it may well be the case that come the end of the year, if we don't see a messy divorce process undergoing, we may find that sterling is stronger by the end of the year. >> stick around. we'll talk about euronext. euronext made a 510 million all cash officer for lch clearnet. euronext expects pretax operating cost synergies of 13 million euros with the potential for additional revenue gains. the completion is subject to the closing of the merger between deutsche boerse and lse. that's why lse had to sell to make concessions to the competition authority. we are joined by the ceo of e o euronext who joins us from paris. what's the rational from this deal. do you think you would have bought this business if it weren't for the lse and the deutsche boerse dear? >> it's a natural transition for

us. clearnet used to be an acetoned and controlled by euronext in 2003. clearnet makes 50% of its flows from euronext clients. it was a natural step for us to look at the opportunity when it came to buy back this asset. in addition to clearing assets or clearing flows, this is providing the top line with significant incremental revenues in fixed income. it's a good deal for the shareholders, and the clients of euronext. we're happy with the situation. obviously, as you pointed out, this deal is conditional upon the completion of the merger of db with lse.

so, we are just trying to maximize the opportunities for shareholders and clients. if the merger is completed, euronext will be strengthened at the core of the eurozone markets, if it's not completed, this is a different world. >> your shares are down some 15% last year. rbc, the analyst house, said you have to make a big deal or actually increase top line organically. you are seeing from the organic side that volumes are strong, that the ipo business is strong? >> yes. we have seen recovery on volumes in november and december. we are also starting to deploy the agility for growth initiatives that we initiated in

may last year. we believe organically the company can grow and we are committed to delivering 17 million of incremental revenues by 2019. in addition to that, as you rightly point out, we have a stronging balance sheet with low level of debt, almost no level of debt. we are committed to deploy capital to maximize return for shareholders in the coming months. so this transaction, the clearnet acquisition, if completed, will be the first step. but we are analyzing several other situations that would allow us to deploy the capital we have. you mentioned this deal is contingent on the deutsche boerse and lse merger going through. if that merger goes through, many believe they can be a formidable competitor to you. you are looking at more

consolidation for yourself? >> well, on the first part of your question, the time frame is well known. the european commission will approve or not approve, that decision is expected at the end of q1. in addition to that, other regulators will have to form their view, particularly in germany. in any event, there is a nonstop date for the merger which is public, which is the end of june. so within the comes months we will know whether this deal is approved or not. as far as euronext is concerned, we're trying to maximize opportunities for the company. one option we're trying to maximize is the one announced today, securing access to the

clearing of flowing and everything by clients and diversification of the top line. this is one option. as i said earlier, looking at all sorts of options to make sure that euronext captures the opportunities arising for the current consolidation process in europe. and the reason why we are confident we can capture those opportunities is because we have significant firing power because of our extremely low level of debt. >> thank you so much for your time. appreciate it. >> a quick look at u.s. futures. we are a couple hours away from the first trading session of the u.s. in 2017. futures indicating slightly higher open. the s&p 500 seen up by 16 points. the dow jones looking to add 134 and the nasdaq after 32 points.

european markets are quite buoyant this morning except the xetra dax which maybe after a strong start yesterday is taking profit off by 0.2%. the ftse 100, which was closed yesterday, is off to the races with a bang. some financials and the banks are leading us higher as well as the commodity space. in terms of the currency markets, we saw a fairly positive reaction in pound sterlinging to the manufacturinging pmi, 122.68, down on the day. euro/dollar under a bit of pressure at 104.7. at one point last friday it was back at the 107 level. this was in holiday thin trade. the aussie dollar is getting a nice boost from the chinese pmi numbers. the dollar strength a continuing story here kicking off the new year by making its biggest one-day gain in two

weeks that continues the 2016 momentum that saw the dollar post a fourth year rise in a row for the first time in over 30 years. let's get back to germany stretch from cibc. you think the dollar bull run is coming to an end. but when? >> i think we're pretty fully valued. i think markets have become excited about the prospect of additional fed tightening after that fed decision in december. we have the fiscal expansion that's expected in the trump presidency as well. there may well be a case of fiscal expansion not quite as robust or dynamic as people hope or expect and maybe the fed being more circumspect than markets are hoping. it's a case of probably in the first half of this year we'll see dollars up and the trend running out of momentum. >> when you trade the dollar, what are you looking out for in terms of donald trump's stimulus plan. there's the tax side and the infrastructure boost which he

pledged. which do you think will have more of an impact on the dollar trade? >> infrastructure, it's easy to pledge changes, but to see definitive elements in terms of boots on the ground, spades in the earth, that takes some time. so i think it's going to be a question as to how quickly that comes through. if we see tax cuts, that's fine. but the question is what's the multiplier effect in terms of the consumer. i suspect that's relatively low. it will be the case that even if we do get top line tax cuts, it will not see the boost to the consumer and growth that many analysts hope or expect. >> if you say the dollar rally will fizzle out what doshg what mean for the euro? >> the euro has problems, of course. in the first half of this year we'll see those play out dramatically. assuminging we don't see the rise of the far right or

alternative european parties doing well, that might be a bit of a catalyst. also if we start to see signs of eurozone growth continuingi in hold up well that provides a slightly more constructive bang for the euro in the second half of the year. i don't think we see a rush to parody, and back into the low teens. >> backing into the low teens. you're in the minority there. most people expect parity for the dollar. >> if we don't see the worst case scenarios playing out, if we do see some inflationary influences starting to have impact on the central bank, because i think that will be a notable influence, then it is going to be the case that the euro trajectory will look better. fair value for euro sill in the

120s, so a euro which will provide a competitive boost to europe. >> can i ask you about the yuan? last year in 2016, it lost 7% against the u.s. dollar. today is the first trading day and we're seeing more depr depreciati depreciation, it seems, now there's a basket of currencies against which the yuan trades at, probably to mask the real weakness of the yuan against the u.s. dollar. are they getting more anxious about the level of the yuan? . i don't think more ananxious, b there are concerns, and the changes and tightening of the rules in terms of capital outflows are requisite in that complex. we are talking about the chinese currency being weak against the u.s. dollar, you could flip that around and say the u.s. dollar

is strong because of the strength. if we move away from that china story being in doubt or under threat, you are talking more about dollar strength than chinese weakness. if you look at the basket you're getting a different perception. >> very true. jeremy, thank you very much for that. >> thank you much. still coming up on the show, china fires back after president-elect trump accuses the superpower of taking economic advantage of the united states while not helping with north korea. details after the break.

italy's anti-establishment five star movement has unveiled a 6 point ethics code, but the

party has already faced criticism. this because it said it wouldn't automatically require politicians to step down from office if they came under legal investigation. on his blog, pepe grillo said all must be reproachable a. house republicans voted monday to weaken the nonpartcy office of congressional ethics but placing it under the house ethics committee. the full house will vote tuesday on part of a larger rules package. if the change is passed the oce could no longer take anonymous complaints and any investigations would be overseen by lawmakers in the house. and president-elect trump will assume office in an historically weak position, this according to a haven't poll from gallup. less than half of americans are confident in his ability to

handle international crises, use military force wisely and omit major scandals in his administration. 70% of americans were confident in the ability of barack obama, george w. bush and bill clinton in these areas. president-elect trump has attacked north korea's renewed nuclear threat on twitter after kim jong-un signaled their ballistic missile development was reaching its final stage in his annual new year's day speech. trump said north korea just stated that it is in the final stages of developing a nuclear weapon capable of reaching the united states. it won't happen. then he went on to tweet that china has been taking out massive amounts of money and wealth from the u.s. in totally one sided trade but won't help

with north korea. the chinese foreign ministry responded that they are clear on china's position against taiwan. >> the president-elect said he would share about new revelations about cyberattacks that others don't know. kristen welker has more. >> reporter: tonight, new fallout after that cryptic new year's eve statement by president-elect donald trump that he might have more information to reveal about those hacking allegations against russia. >> i also know things that other people don't know. and so they cannot be sure of the situation. and i want them to be sure. >> reporter: today the president-elect's team pressed for details about what mr. trump knows and whether he'll make it public before his midweek meeting with intelligence officials. >> what does he know, sean? >> well, you know, we'll wait till tuesday or wednesday. what we're trying to figure out is how certain are they of the intelligence, number one. number two, how proportional is

the response to what happened? >> reporter: sunday a plane carrying 35 expelled russian diplomats left the united states, part of president obama's retaliation against russia after he says the country hacked the e-mails of some top democrats. all of it setting up a potential showdown between mr. trump, who has cast doubt on russia's involvement, and congress, including some members of his own party. >> it is clear that russia has attacked the united states of america. all of our intelligence agencies will affirm that that being the case. >> president-elect trump wishes the russia issue would go away. but republican hawks on capitol hill, like senator john mccain, they're going to make sure it doesn't. >> reporter: the president-elect is also drawing battle lines in other areas, making his intentions clear at a new year's eve party at his florida resort over the weekend. >> we're going to do a good job, okay? taxes are coming down. regulations are coming off. we're going to get rid of obamacare. >> let's get out to the economic

policy analyst from the american enterprise institute. happy new year to you. hopefully second time lucky. thank you so much for getting up early for us once again. let's talk about some tweets that mr. trump sent out in the new year. many of them about north korea and china and i was reading a strategist notes about the biggest risks of 2017, that strategist said the biggest risk this year is not china, it's random trump tweets. do you think this twitter diplomacy is working? >> i don't know if it's working. it's unnerving people who are wondering how much thought is going into these tweets. is this donald trump picking up his iphone and tweeting something, or is there crafting a consultation with his foreign policy advisers or economic policy advisers before he tweets.

that's the concern. if it's merely another way of getting a message, that's one thing. if it's impulsive tweets that creates uncertainty. >> james what does it say about divisions within the gop? we were listening to mccain there talking about his views on the russia hacking situation. part of the reason investors have been so optimistic on this reflation trade, they think the republican congress will give the president an easy pace on all so pass on all sorts of things what do you think? >> i don't think it's true. if they think they're going to roll through big tax cuts, big infrastructure spending, it's going to be a slog. the portion of the tax plan that will pay for some of it, there's a border adjustable tax, that's uncertain. as we've seen, wall street has forgotten about the

protectionist part of the trump agenda and he's moved ahead vigorously on that. you have wilbur ross, navarro, and lightheiser skeptical about trait and the trade organization. that's the other part of the trump agenda, if you're bullish because of the tax cuts and infrastructure, what he gives with one hand he may take away with protectionism. >> what does that mean in real policies? we know donald trump has been outspoken towards china thus far. do we get to a stage where this has serious trade ramifications then? >> they have already talked about putting up some sort of 5% or 10% tariff. wilbur ross said tariffs are a last resort. they'll be far more aggressive. we talked about uncertainty earlier. i'm not sure what the one, two, three agenda will be on trade.

certainly far more active, far more hostile. we've seen it with twitter as you mentioned earlier. i don't know what it looks like. if we end up with broad tariffs and a trade war. but i think directionally that's where we're going. >> james, i saw a report over the weekend that senate democrats will try to stall some confirmation hearings for aide members or aide-nominated cabinet members under trump. it's an unusual move, but not entirely unexpected. how much will that muddy the waters further when it comes to policy clarity from donald trump? >> look. democrats have to show their people they have a pulse. they just lost a stunning election. they lost at all levels of government. they have to show they're doing something to fight. going after some of these cabinet nominees is the way they can. i think they're all going to get approv approved. it may hold it up for a while.

i guess the trump administration would like that team in there as fast as possible. but i think there's still some big questions. and if we get certainty on the cabinet nominations, that would be helpful. there's also big differences between the white house and congress. congress thinks they'll roll over the trump white house, maybe the trump white house thinks the same. we'll see. >> james, thank you very much for that. >> you bet. nancy, how are the futures looking? >> the first day of trade, back into the new year, looking at green arrows. similar story to what we've been seeing in europe. dow jones called higher by 140 points. i'm nancy hungerford. >> i'm carolin roth. "worldwide exchange" is up next.

good morning. green for 2017. global stocks rally on this first trading day of the new year. trump tweets. the president-elect taking aim at china on the same day we're expecting his big trade nomination. and ready for takeoff. spac spacex pilots its first launch since its september explosion. it's january 3, 2017, and "worldwide exchange" begins now. ♪ good morning. very warm welcome to "worldwide exchange" on cnbc. i'm wilfred frost