>> president trump will welcome the leader to the white house today. taking home song rb record, and album of the year. it's monday, february 13, 2017. "worldwide exchange" starts right now. ♪ good morning.

and welcome to "worldwide exchange." i'm sara eisen in with mike santoli. >> you saw the whole grammys. >> no, you saw them. i didn't stay up. we're playing adele and all the winners from last night's grammy awards. which was the best performance? >> probably bruno mars. >> over beyonce? wow. >> i'm not going to try -- make trouble this early in the morning. >> i'll check it on youtube. let's get a check on global markets this morning. as sara said, we did have some fall through after the strong levels close at the u.s. overseas. we have a bit of an effort on some gains. s&p 500 marginally up. the dow up almost 40 points. in terms of dow futures this morning. the nasdaq as well as all three closed friday at record highs. the russell 2000 just short of a

high. take a look at the note. and once again, up 2.43%. it's been hovering there. but we have a bit of upside. we'll take you around the globe and show you more on markets in a minute. but first we have to update you on a situation in northern california where at least 188,000 people have been told to evacuate because of damage to a dam. the spill at the dam is in danger of failing and could enleash flad waters on the town below. thoes evacuations are underway and we'll keep an eye on the story for you. now back to the markets. economic data out of japan overnight. gdp rose 1%. roughly in line for estimates. weaker yen boosted exports

although that was offset by tepid growth. the major asian markets today definitely had some fall through like i said. the u.s. and europe also saw a biased to the upside modestly so. france up almost 0.6%. ftse just above the flatline. and italy up. >> as for the broader markets here, let's show you what's happening with the price of oil. it is not positive this morning. it's down about 0.8%. $53.45 after a strong rally at the end of last week especially on word from the international energy agency that most of opec was following through. brent sitting at $56.26. as for the u.s. dollar, last week was interesting actually breaking six down weeks for the

u.s. dollar. the dollar finishing higher. word of a phenomenal tax plan coming from president trump's administration really helping give the markets another lift higher. stocks and the u.s. dollar. dollar a bit stronger this morning against the euro. it is stronger against the yen. this has been the big mover. whether it was the hugs or the prolonged hand shakes or the talks between prime minister abe and president trump, they didn't get into trade deficits. that's all the markets needed. it was a successful meeting where that strong dollar/weak yen goes along with that whole positive trade we've seen since the election. by the way, since the election the yen has weakened. that's since the u.s. election. as for the pound, stronger this morning. up 0.25%. so three weeks of gains for u.s. stocks. here we are about to open at record highs.

continuing higher. you've been mentioning how frustrating it is the bears. but it feels there's hope of policies especially if gary cohn was in charge. >> i think over the weekend that's going to be welcome news if he is steering things in terms of the economic agenda. i think that was kind of what wall street was hoping and assuming. i do think, though, we're at this point where tactically we should have a little bit of happiness. but not because the economy has changed that much. but because of the internal dynamics. >> is there a narrative? better profits but that's always the case. revenues sort of happen. >> i think the revenue is good enough for now and it kept intact we'll have a double digit rebound. take a look at the week ahead calendar today.

sara mentioned as well as a capitol hill appearance by janet yellen. yellen also goes before the senate banking committee to deliver her report on monetary policy at 10:00 a.m. eastern time. on wednesday she will give the same testimony to the house financial services committee. and also january retail sales, cpi, and industrial production. thursday, look for jobless claims, housing starts, and the philly fed survey. and more than 50 companies will report earnings this week. the list includes kraft heinz marriott an camp bell's soup. >> couple of consumer names in there especially pepsi will be watching on wednesday after kind of a mixed report from coca-cola. i'll also be watching janet yellen. this is going to be tough for her. her trick is to stay out of politics, keep herself with a wait and see attitude on interest rates in march. the dollar bulls are watching for any hint of march.

we got that philly fed president saying it's on the table. it's not priced into the market right now. whether she leads it open or hints that they're moving towards that direction. also how does she handle questions about the fiscal policy outlook changing. no policy enacted. but we've seen that boost in confidence. >> they don't want to build anything. i wonder if last year's lesson about -- if you remember around this time last year, the fed seemed to try to raise the perceived odds of a rate hike earlier and then not give one. that seemed to be a misstep in terms of drags the expectations where it didn't belong. >> for now the fed is not driving the bus. she probably is happy to keep it that way. >> you would think so. >> in geopolitical news, north korea confirming it tested a ballistic missile. the test is seen as a provocation to the u.s. and its allies just coming as president

trump and prime minister abe were together in florida. in a joint statement, president trump said the united states would support japan 100%. prime minister abe called the launch, quote, intolerable. that north korea must comply with all u.n. security resolutions. listen. >> i just want everybody to understand and fully know that the united states of america stands behind japan, its great ally, 100%. >> unusual 10:30 p.m. saturday night news conference around the two leaders in mar-a-lago which by all accounts went swimmingly well. >> it did. i think that's what the markets are taking away from it. there were no real -- no gaffes, no real efforts at trying to raise any tensions. >> and also interesting that they're leaving the trade talks to their deputies. perhaps in a way to sort of

leave that contentious negotiation away from the two main leaders. pretty smart i would say. >> both sides really did have an incentive to do that, it seems like. today in washington president trump will meet with canadian prime minister justin trudeau. the two leaders are to discuss jobs, economic growth, and trade. but also to discuss things they disagree on including trade, immigration, and refugee policies. >> also this weekend some fed speak to talk about. stanley fisher saying there's significant uncertainty about fiscal policy under the trump administration. but he says they will be strict in meeting the targets of creating employment and getting inflation to 2%. fischer suggested he doesn't think dodd/frank will be repe repealed as a whole.

fire department again daniel tarullo is stepping down. tarullo said he had a fairly strong presumption even before the election he would resign early this year and that the trump administration did not ask him to leave. >> i think this is a big deal. not only is he going to -- president trump going to get an opportunity to prove to now nominate a head of banking supervision on the fed. one very different likely than tarullo who pushed for higher capital requirements. but there are three open seats on the fed board out of seven. all have deciding votes to make monetary policy. >> i believe citi today has a cheat sheet on candidates. >> anyone stand out? >> john taylor, kevin warsh, and a couple others. >> so yes economists. we're learning the trump administration likes economists. >> that's what they're saying now. it's interesting on friday afternoon when the news of

tarullo's resignation broke. >> stepping down in april so we'll wait on word for that. meantime, imf head christine lagarde said trump likely good for the economy in the short-term. but she did caution that it will challenge global trade. lagarde making those comments at an event at the world government summit in dubai. voters in switzerland rejected a proposal and referendum yesterday to overhaul the company's corporate tax system. the government is trying to get rid of ultra low tax rates without sparking a corporate exodus. under the special tax status in the foreign company. paying virtually no tax. new polls suggest german chancellor angela merkel's reign is under serious threat.

now just one percentage point behind the coalition. the social democratic party has gained significant ground in recent weeks led by martin shultz. the weekend poll finds shultz would beat merkel in a direct vote. it is early yet. that election i think is in september. we've got the dutch election first, then the french in april, then germany. >> it's about seven months. switching gears to corporate news, switching to stocks. in touch with deutsch postbank on plans. wanda had its eyes on banks in europe as part of the idea to diversify its core business. hyundai hiring to oversee the intelligence safety technologies center. which is a combined research body. heineken agreeing to buy kirin holding.

the deal makes heineken the second largest company in brazil now. >> macy's could see shares jump 50% in event of a possible sale. downsizing the physical store operations and reinvesting in its online presence. world bank of scotland set to unveil an 800 million euro cost plan. reports saying that the bank will make the announcement later this month. investors certainly like that idea. and barron's also saying that abbott may see a boost from st. jude medical. the company has a, quote, good shot at continuing its double digit earnings growth adding that a 20% return is still a possibility. all right. coming up, this morning's top news in technology. why verizon is bringing back an unlimited data plan for the

first time in five years. stay tuned. so we have extra sets of eyes on our wells every day. because safety is never being satisfied. and always working to be better. what powers the digital world? nevecommunication.ied. like centurylink's broadband network that gives 35,000 fans a cutting edge game experience. or the network that keeps a leading hotel chain's guests connected at work, and at play. or the it platform that powers millions of ecards every day for one of the largest greeting card companies. businesses count on communication, and communication counts on centurylink.

ways wins. especially in my business. with slow internet from the phone company, you can't keep up. you're stuck, watching spinning wheels and progress bars until someone else scoops your story. switch to comcast business. with high-speed internet up to 10 gigabits per second. you wouldn't pick a slow race car. then why settle for slow internet? comcast business. built for speed. built for business. welcome back to "worldwide exchange." let's get you up to speed with the market action this morning. looks like the dow, s&p, and the nasdaq are looking to tack onto those record levels that we achieved on friday. modestly above fair value across the board. take a look also at oil prices this morning. that was a big mover last week. you actually see a little bit of

a backing off. that actually happened in the last hour or so, that pullback. and you see gas down 1% as well. in corporate news, verizon is bringing back an unlimited data plan today, first in more than five years. the news comes amid rising competition between wireless carriers. it costs $80 a month for data, talk, and text for the first line, $45 for additional lines. just last month they said they weren't looking at unlimited plans when asked by analysts when it asked if it should move more aggressively in the market. saying it's so much more expensive than his and some of the others. >> and verizon playing his game to some degree. we'll see how that shakes out. seems like a mature, zero sum market for wireless stocks. >> they're just all competing over, i guess, who is there and

t-moblie is doing well. >> exactly. meantime, sound cloud has lost two senior executives as the music streaming service is seeking to raise new funding. music streaming company says its cfo and finance director have left to pursue other opportunities. soundcloud is denying a report it's running low on cash. a spokesperson says it's currently fund raising which is typical of most start-ups of its size. the head of samsung is being questioned again as part of a corruption probe that could topple south korea's president. the company's vice chairman arrived at the special prosecutor's office in seoul earlier today. he told roerss he would faithfully tell all the truth. prosecutors have focused on samsung for pledging money to companies backed by a friend of south korea's president in exchange for government support of a merger of two samsung units. this goes back to 2015. disney is raising ticket prices for its u.s. theme parks

by as much as $5 for one-day passes. an adult ticket in orlando will cost between $107 and $124. in anaheim, prices range from $97 to $124. last year disney started using a three tier structure charging more during peak periods. it's been incredibly strong. in other entertainment news this morning, a miniature superhero movie came out on top at the box office this weekend. "lego batman" debuted with $55.6 million in the u.s. and canada. it's the follow-up to "the lego movie." "fifty shades darker" and "john wick chapter 2" opened to more than $30 million. we had bad weather in new york,

maybe that had something to do with it. interesting that the "lego batman" movie, checktive producer steven mnuchin. >> had a good weekend. he is expected to be confirmed today for treasury secretary. >> of course he stars in that warren beatty movie. it's a cameo. a non-speaking role. he plays a banker. >> a banker, shocking. coming up, a key confirmation vote in washington today. those details are coming up next.

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 welcome back to worldwide exchange. in washington news today the white house will meet with justin trudeau. mean while the president is dealing with a fallout from the immigration roundup. edward lawrence joins us live from washington with more. morning, edward. >> good morning, mike. the canadian prime minister says he will try and focus on the areas he agrees with president donald trump. there are many areas where the two countries have very different stances. canadian prime minister justin trudeau visits the white house for the first time since president donald trump took office. the canadian prime minister highlighted the differences with president trump. >> whether it's understanding that immigration is a source of strength for us and canadians

are a successful part of today. >> reporter: he vowed to take in refugees that the u.s. turns away. as the two world leaders talk out their differences -- >> stand up, fight back! >> reporter: -- more protests over a travel ban. >> there's no such thing as judicial supremacy. >> reporter: top administration aides lashed out at the courts for halting it. >> we are contemplating new actions to ensure our immigration system does not become a vehicle for admitting people into this country who are hostile to the country and its values. >> with donald trump being president, i see now hope for us. >> our communities are being terrorized. >> reporter: the president standing by his immigration plans. he also says he stands 100% with japan while condemning north korea missile tests. and the administration left the door open for a new executive order reworking that temporary

travel ban as early as today. >> edward lawrence, thank you. obviously the trade relationship here is key and one thing that prime minister trudeau can point to is that the export/import balance between the u.s. and canada is relatively close. that's an example of something that president trump wants. a more balanced relationship. still what's unbalanced is that canada depends on the u.s. far more for a percentage of its gdp than the u.s. depends on canada. but they are two of the closest trading partners. hundreds of billions of dollars in trade, more than $500 billion a year. and according to the canadian government, millions of jobs in this country. >> it's not so much like the other nafta partner mexico where from the date of nafta passing, mexico's trade imbalance we the u.s. has grown so much. so with canada, very integrated in auto supply chain and everything else.

>> part of that is canada ships a lot of oil and energy products to the u.s. and that could be one of the goals. if there is going to be a renegotiation or opening back up of nafta, don't punish canada. >> already green lighting some pipelines which will help canada. >> absolutely. also in washington today, the vote on steven macnu the vote on steven macnchimnuch. 18 automakers calling on president trump to revisit a decision by the obama administration to lock in rules by 2025. they want the president to reverse the obama decision saying thousands of jobs could be at risk. president trump pledging to anticipate the cost of the wall. quote, i have not got involved in the designs or negotiations yet. when i do, just like the air force one program, price will come way down.

report by a homeland security department estimated that the wall would cost $21.6 billion and take three and a half years to build. over to sports and golf, jordan spieth conquered the field at the pro am tournament this weekend. he had 19 under, four strokes better than kelly craft. he tied a record for the pro am portion of the tournament. carson daly took home the prize obviously in the am portion. a roundup of global markets and highlights from last night's grammy awards. and then our top trending stories including "snl's" take on sean spicer again. reaction this time to nordstrom pulling ivanka trump's line. you're watching "worldwide exchange" on cnbc.

good morning. setting wall street's agenda, earnings, economic data, and janet yellen. we'll get you ready. washington watch. the stakes coming up. plus adele dominates the grammy awards. the business winners and losers for you and the moments that everyone's talking about this morning. straight ahead.

you're watching "worldwide exchange" on cnbc. ♪ welcome back to "worldwide exchange" on cnbc. i'm sara eisen along with mike santoli. we're playing music from some of the winners at last night's grammy awards. mike stayed up all night. >> i stayed up for more than half of it. >> while beyonce gets the front page in most papers, you give it to bruno mars. >> for the night's performance. yes, i thought he had a much more energizing feeling. >> some political hints in the music. >> definitely there. let's check on the global markets this morning. we are seeing strength around the world for stocks. u.s. equity futures are included. we're coming up after the record highs on friday. here we go again. dow futures up 44 points.

nasdaq futures are up nearly six points. more earnings, lots of data. janet yellen, two days of testimony this week. following wall street's rally on friday. the german dax is up a little more than 0.5%. france is on fire up 0.75%. ftse up 0.1%. and italy up 0.6%. italian yields, by the way, have been ticking higher. political uncertainty in that party as well. they don't have an election but they have political elections. >> greek yields ticking up. and the french/german spread was widening. >> on the increases of christine lagarde winning. asia overnight was also pretty strong. let's show you what happened across the continent there.

the nikkei closed higher by 0.4%. loving the weaker yen and all the warmth between president trump and prime minister abe. hong kong's hang seng index up 0.5%. and shanghai comp closing higher by 0.6% as well. take a look at the broader markets outside of equities. oil on the defensive today. wti and brent down almost about the same amount. natural gas another pullback there. 2% lower on the morning. you definitely had a little bit of a -- you had a firmness. see if it stays in that range. take a look at the bond market. treasury note is above 2.4%. that's been a level that a lot of folks have been watching. we're still below those december highs but we've come off the lows as well. we're kind of range bound there and it seems the equity market is okay with them in this range. take a look at the dollar.

sara mentioned it was stronger against the yen. and you do see that unchanged against the you're row. there was talk maybe the ecb would talk of easing the program. >> we've got a bonus in the currency at the bottom. the canadian dollar in honor of prime minister trudeau's visit to the united states today. canadian dollar tracks oil prices. and it's been stronger lately on the back of oil. also tracks the u.s. economic data. what's good for the u.s. is good for canada which is key in this meeting today. second biggest trading partner for us. our fortunes are closely linked. >> sure. it's a -- what is it? about 10% of u.s. population? so basically they are a little bit dependent on what's happening. >> over here in this economy. on the flip side to the stronger dollar that we've been seeing in trade on the back burner. down about 0.4%. new agenda full of economic

reports as well as a pair of capitol hill appearances by janet yellen. tomorrow we'll get january ppi, wholesale inflation. yellen will deliver they are monetary policy. on wednesday she gives the same testimony to the house financial services committee. we'll also get january retail sales, cpi, and industrial production. on thursday look out for jobless claims, housing starts, and the philly fed survey. also more than 50 companies in the s&p 500 will be reporting this week. the list includes cisco, pepsico, kraft heinz, t-moblie, marriott, and campbell's soup. >> 10% of the s&p 500. today in washington president trump will meet with canadian prime minister justin trudeau. they are expected to discuss jobs, economic growth, and trade. but also to discuss things they disagree on including global trade, immigration, and refugee

policies. in entertainment news, adele and the late david bowie were winners at the grammy awards. landon joins us with more. >> adele and bowie taking the home five awards while chance the rapper got three for a record that was only available online and for free. beyonce one won grammy. sony resigned adele and beyonce last year. adele saying hello to the top winners of the night for album of the year and song and record of the year beating out beyonce. the brit was dedicated to beyonce. she even broke her grammy in half to give it to bey. blue ivy joined in corden's car

owe key. of course it wouldn't be an awards show without someone getting a little political. katy perry performing her new single called "chained to the rhythm" as the u.s. constitution was projected on the zreen. joy villa hitting a high note on the red carpet with this make america great again dress with trump on the back. she said the message is about love and positivity. talk about a fashion statement. >> a political one. thank you. time for more top trending stories. grammys aren't the only award shows making waves on the media. the british academy film awards with "la-la land" winning." i know if wilfred were here, he'd be all over the baftas.

>> would he? and also cheering the "la-la land" sweep of the awards? >> probably. >> is it because of that? >> it's a unique thing to just get made actual music present day musical. >> about hollywood. >> probably says something about where we are in the culture. meanwhile, melissa mccarthy as sean spicer stealing the show on "saturday night live" again. >> and then there's some light terrorism this week when nordstroms decided to stop selling ivanka trump's line of clothing and accessories. okay? and that's nordstrom's loss. because these are high, high-quality products.

in fact, i'm wearing one of her bangles right now. it's beautiful, shimmery, and elegant. and at $39.99 it is unbelievably affordable. okay? and don't even get me started on her shoes. >> i mean, they've got a lot of material these days. >> and they're basically going all out. >> after melissa mccarthy did that last week, debuted the sean spicer, you know they were going to do more of that. us weekly calling out sean spicer after he tweeted getting government updates from washingtonian is like getting stock tips from us weekly. they said thanks spicey. stick with a broad mix of low cost index funds which isn't too bad of a strategy. >> i think they probably workshoped that a bit internally. but us weekly trying to get in

on this. did you see trump tweeted at mark cuban he's not smart enough to vote for president. he retweeted it, lol. >> and also a letter he had written to the now-president giving advice. coming up, today's must reads. first we head to break. stay tuned. you're watching cnbc. my dad gave me those shares, you know? he ran that company. i get it. but you know i think you own too much. gotta manage your risk. an honest opinion is how edward jones makes sense of investing.

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welcome back to "worldwide exchange." we're following a developing story this morning in northern california. at least 188,000 people have been told to evacuate because of damage to an emergency spillway at the nation's largest dam. state officials warn the spillway at the orville dam is in danger of failing due to erosion and could release flood waters on the town below. it's located about 150 miles from san francisco. let's get you up to speed on the market reaction this morning. after stocks closed for a third week higher last week at record highs, the gains continue this morning. dow futures are up about 40 points. s&p up 2.5%. off the highs in part in europe and in asia where stocks rallied following wall street. the currency market is a part of the story this morning. especially that strength in the dollar versus the japanese yen.

a weak yen, strong dollar. it's a two-week high here. continues to gain about 0.5%. the judgment there is that the several-day meeting between president trump and prime minister abe went well. there were hugs, hand shakes, golf playing, joint statements. not a lot of talk of currency and trade. so the markets are buying that dollar versus the japanese yen. like to see the weak yen for this whole reflation trump rally trade we've been seeing. the pound is stronger. i also put in the canadian dollar because today the third world leader comes to meet president trump and that would be prime minister trudeau. the canadian dollar has been rattled since the election. it is the second largest trade partner and part of nafta. if president trump makes good on to regoerkt nafta, that could be a head wind to the canadian economy. canada depends more on the u.s. >> certainly trade is a bigger

portion of canada's overall. if you're opening up nafta, it raises uncertainty. >> yeah. and part of that is the price of poil. so where oil goes, usually the canadian dollar goes. and oil's weaker this morning down almost a full percent against -- that's actually cut its losses. down more than 0.5% of wti. brent $56.37. nat gas down 2%. i went to the canadian globe and mail. it's titled with trump sunny way is trudeau's best play. he's getting advice from the columnists across canada. what he spopds well to and this is president trump from the editorial is validation of his hugeness. mr. trudeau must humor him if he has to. by all means, he must not publicly criticize him or

contradict him in the joint news conference after the meeting. even if reporters try to provoke him and his anti-trump base back home wants him to stand up to the british yankee leader. as one veteran of canada u.s. diplomacy explained, they need to forget about the base because it's going to disappear if they lose 5 million canadian jobs. yes there are disagreements for trudeau and trump. trudeau is welcoming a lot of the syrian refugees and tweeted out after the immigration order that they're welcome in canada. but the key here is the economic relationship. millions of canadian jobs depend on it. the columnist urging trudeau not to go there when it comes to the controversy. >> reminded of the jount news conference of president obama and prime minister trudeau. >> the bromance. >> yes. where there was emphasis on look of the relationship of who's

there. there's a lot of scene setting for something like this where it's going to be friendship in the foreground. >> so we watch the body language at the joint newser. well, my pick today from "the wall street journal" opinion piece called stock options for the little guy. allowing all employees to stock options would dilute earnings per share but this is a cost companies and executives should be willing to pay in order for employees to have a stake in the company's earnings. this is from former fdic chair and former ceo of wells fargo. what they're doing is saying undo this accounting rule from a decade ago that forced companies to account for stock option compensation as an expense. saying this is another way to broaden out the economic gains. i don't know if it's really in the forefront and obviously we're looking at all corporate accounting and tax measures right now. i don't think anyone thinks that the inequality gap was widened out by this rule. but it's interesting that this

is another front that's being opened up. >> we also saw the acting s.e.c. chair was looking at the rule for companies to break down the ceo to break down pay ratios. >> a lot of the reforms that were brought in. we are approaching the top of the hour as the gang gets ready for "squawk box." >> good morning. we are convening the squawk council on foreign relations. we're going to talk about the issues you've been mentioning. you talked about trudeau's visit here to the united states. we're going to be covering that as well. we'll be joined by the former u.s. ambassador to canada. he'll be talking to us about our relationship to the north and what we should be looking into with two leaders with very different opinions on things. but they are going to find common ground. we'll also be talking trade this morning with michael froman who

is the former u.s. trade representative. he's now with the council on foreign relations. he's a fellow there. he was the guy responsible for helping bring together tpp. so we'll get his take on trade in the world after tpp looks like it is going to get blown apart. see what else he's looking to. and we'll be joined this morning by gary kasgrove. he is now with the human rights foundation. he's the chairman there. we'll be talking with him looking to russia and where we can stand right now. get his thoughts on putin and beyond. so we'll be convening our squawk relations council starting in a few minutes. we'll send it back to you guys. >> it strikes me there's another similarity between trudeau and trump. they're both great at social media. >> you're right. >> they're both great on twitter. >> you're right. massive followings. maybe they can learn a bit from each other. >> thank you. >> thanks, guys.

when we come back, we'll get you ready for the trading week ahead. we have earnings, economic data, and janet yellen. the most important things to watch when we come right back. bp engineers use underwater robots, so they can keep watch over operations below the sea, even from thousands of feet above. because safety is never being satisfied. and always working to be better.

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welcome back to "worldwide exchange." futures pointing to a higher start for wall street after three strong weeks for stocks that sent all three of the major averages to highs. dow futures up 36 points. good morning to you. are you surprised at the strength and resilience in the u.s. stock market? lack of policy option but a lot of hopes of it. >> it's not all that surprising because even though there'll likely be delays and from our understanding from our own belief it will probably take until at least august or beyond before there's any major legislation that is enacted. but it's highly likely that legislation will be enacted is the point. and investors are forward looking. so seven months, ten months is not a long time to wait for a

changed economic landscape. for example, there are likely to be tax cuts. but the likelihood of tax cuts are high. tax rates will come down. and so for 2018 the outlook for the economy is good. which is something the stock market can hang its hat on. it will power earnings forward for some time. >> it's obvious the market is hinging on the hints from policy. whether that's because that's all that matters -- clearly that shouldn't be the case but it's what traders are keying off of. what's the broader context though? we obviously had this pretty good move and kind of global economic indicators earnings kind of coming back as well. and the fed, seems like the markets are kind of at a manageable place. >> we should be looking at the economy of the world in and of itself in and outside of policy. one of the rules for trade. because the economy is fairing well in and out of itself with

imbalances that can tip. usually high inflation that pushes the fed to raise rates enough to squash the economy. that cause companies to cut back. or imbalances on balance sheets. none of that exists. in that sense, it's very good news for investors that the landscape looks good. call it 20% close to the 15% or so normal level for recession. and it is a long expang now. >> day of news. today he meets with trudeau. wednesday netanyahu. these are some of our closest allies economically. how's he doing from an investor perspective? >> well, in the end, it looks like he's -- mr. trump is listening to his advisers more and getting good advice about how to talk diplomatically with the great leaders. with japan, for example, the japanese yen had been rallying. it seems like the japanese were

trying to prevent it from weakening substantially more. in deference to the president you see it weakening this morning though as abe has left the united states. >> we saw that warm hug on friday and dollar/yen leapt to the highs of the day. >> and now it's okay. the weaker yen of course would be good for japan. not so great for the u.s. handled it well. >> and does this -- can we really infer much other than this was a good meeting about the trump administration's approach to trade relations? of course it seems like it's going to be country by country. >> country by country and even item by item. it doesn't look like trade deals when they're ripped up will be ripped up entirely. just pieces of the trade deals will be ripped up and perhaps renegotiated. mr. trump will look to make better deals. there won't be a trade war more than likely. just idiosyncratically little pieces of change that will be noticeable. >> unlike the stock market

though, though, the bond market is not breaking out to new highs in terms of yields. still a lot of caution reflected there. where's the mismatch? >> well, remember before the election, the u.s. 10-year was at 1.87%. this morning it's still at 2.42%. it's substantially higher. it has stopped because this feeling that perhaps there will be a trump bump in the economy but will it last? so the u.s. stock market can rally on the idea that it will last for a little while. but where the fed policy rate will be several years from now. just a 2% policy rate and a normal peak could be around 5% or so. bond market not too worried about the long-term story of the economy. >> and we get how many this year? >> two to three. janet yellen wednesday probably signals. >> tony, thank you. tony crescenzi. that does it here for us on "worldwide exchange." what are you watching today?

>> the policy hints. whatever comes out. and also the markets to pack on. >> and the trudeau/trump relationship after the bromance that was trudeau/obama. "squawk box" next.

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good morning. here we go again. the markets right now green arrows across asia and europe overnight. that puts u.s. equity futures pointing to a higher open here at home after a series of highs last week. washington watch. after a weekend with prime minister shinzo abe, president trump will welcome canada's hunky leader today to the white house. and it will cost you a little more to visit the happiest place on earth. details of the new price hikes at disney theme parks. maybe that will help offset espn. that's straight ahead. it's monday, february 13th, and "squawk box" begins right now. ♪

where business never sleeps, this is "squawk box." >> good morning, everybody. welcome to "squawk box" everybo welcome to "squawk box" here on cnbc live from times square. i'm becky quick along with andrew serkin. research of bank of america merrill lynch. >> we have a theme song for him. >> you were expecting this, david. >> ever since you got the ph.d. you've heard this, have you not? >> joe is going to serenade you with it. >> we don't call many ph.d.s doctor. >> in this case we'll make an excepti exception. >> unless you can remove a gallbladder, we're not calling you doctor. in your case we're making an exception. >> welcome, david. great to see you.