good morning. markets point to another major rally with another set of record highs. follow the money, buffet, sorrow, paulsen revealing what they bought and sold. the details straight ahead. plus, washington watch. some of the world's most powerful retailers will head to the nation's capitol to give their two cents on a potential u.s. border tax. it's wednesday, february 15th, 2017. "worldwide exchange" begins right now. ♪ ♪

good morning, a very warm welcome to "worldwide exchange" on cnbc. i'm will fred frost along with courtney reagan who's in for sara. let's get straight to the global action for record highs. all three of the major indices plus the russell as well. we had about 0.4% of gains for the s&p. the nasdaq a little behind that. the dow a little ahead of that. and a record in today share price not market cap high for apple, but the rally was really clearly led by financials. we had the bank of america up around 3%. the broader financials index up 1.25. the spark was janet yellen being a little more hawkish than expected and that pushed yields higher which benefitted banks. futures expected to open higher once again to new records. the dow higher by shy of 50 points. the ten-year treasury note, as i said, that move in yields that

fed chair janet yellen sparked did help the bank stocks in particular. we crossed 2.5% as march seemed to be back on the table with some of the comments, albeit investors really moving the expectations of may more than they did with march but yields certainly moved higher as did the dollar. 2.475 on the ten year. a little below the highs of yesterday. >> spike was so, so clear right at 10:00 a.m. fed chair janet yellen returns to capitol hill this time to testify before the house financial services committee. yesterday she told a senate panel waiting too long to raise interest rates would be unwise. >> we have eight meetings a year and it means that at some meetings we would -- if things remain on course, increase our target for the federal funds rate and not act at others and precisely when we would take an action, whether it's march or

may or june i think -- i know people are focused on that. i can't tell you exactly. >> they are. they are. just so you know, they are. which meeting it would be. i would say that every meeting is live. >> the s&p hitting its 15th record close since the u.s. election yesterday. as will fred mentioned, financials leading the way. we saw a nice rise higher. we saw the group gain more than a percent yesterday. we'll see if that continues today with yellen's second day of testimony. >> yeah. yesterday's rally clearly significant across all three indices, including the russell. four indices. it wasn't quite as broad as we've seen recently. yes, eight out of the 11 s&p sectors were positive. four of them only just so. it was really that strong from financials that flattered the rest of the market and the bond were quite sharply down. >> that's right. >> yes, another record day. closes for the sixth day in a row for the s&p and the fifth day in a row for the dow. it was pretty much financials

that flattened the performance. let's have a look at performers overnight in asia. some declines in shanghai. the nikkei and hong kong both over 1%. china's performance a little soft when it comes as lending data once again showed a very fast expansion of credit. yes, we've been seeing ongoing better fundamental data in china, but always a reminder that that is largely fueled by credit growth. a little talk of possibility they may need to tighten a little bit more. we're back to growth if that does come through. now to data coming out of europe. employment declining. the number of jobless fell 7,000 in the fourth quarter. that puts unemployment at 4.8% which is continuing to hold at the level it was, which is the lowest in a decade. the important thing to note in terms of that data was that wage growth was a little soft. it came in at 2.6%. it was meant to be at 2.7% so

that's not as high as the cpi and ppi. sterling has dipped a little bit off the back of that. meantime euro's trade surface coming in at 28.1 billion euros. that's up and ahead of consensus. what does this mean for european markets. they are higher today. yesterday the broad stock 600 was just in positive territory. essentially european markets were flat or slightly down. they didn't enjoy the yellen bounce which started to come late in the day's trade in europe and, thus, they're playing a little bit of catchup this morning, the european markets. >> despite some concern about the continued political uncertainty. >> yeah, absolutely. i think that manifested a little bit more in the bond markets. it has equity markets over the last five or six days similar to u.s. markets. we've seen more risk on. decent rally in the last week. quick check on the broader markets and let's start first with oil. you're seeing oil prices pressured a little for wti and

brent crude. there are some concerns about whether or not opec's production cuts will hold up going forward. iraq a little bit behind and that is the world's second largest producer when it comes to that agreement. so the other countries are going to have to play some catch up to get to the goals, but more than a million barrels per day of crude has been cut. so we have seen those oil prices stay within a range around between 50 and 55 or now more than a couple months here. so under a little bit of pressure today but still within that range. natural gas higher by about 2%. if we can move on and take a look at currencies. the dollar continues its strong hold against the other major currencies. the euro is a little bit weaker than against the dollar. the dollar is stronger against the yen. and the pound is weaker against the u.s. dollar. >> yeah. the dollar kind of rallying yesterday with yields going up. interesting to note though that despite yesterday's commentary from janet yellen being dollar friendly, it didn't do enough to

deter what has otherwise been a risk on sentiment for the last week or so. yes, we did see equities rally in light of that. also, quite a lot of bm currencies are the strongest currencies. the dollar was strongest but the best performers for the week as a whole are the likes of a ruble and the rand and turkish lyra. janet yellen struck that tone and brought back the idea that march or may could be on the table for rate hike. she didn't derail the positive risk on sentiment that we've seen on markets. let's wrap things up with gold prices which were pretty much flat yesterday. pretty much flat again at 12.27. today is the busiest day of economic data. retail sales and cpi out and followed by nahb survey.

as for earnings, results reported before the opening bell. after the close look for numbers from cisco, cbs, kraft, heinz and marriott. japan's softbank is buying fortress for $3.3 billion in cash. fortress which manages about $70 billion in assets will operate within softbank as an independent business headquartered in new york. in december president trump met with softbank's ceo who said he plans to invest $50 billion in the u.s. economy. it's not clear whether that was part of the discussion. >> i think the take away is we're talking about how the environment's improving around the world. the outlook in japan, softbank is a great story. they go on a massive acquisition spree to buy growth.

that's a great example of this and sort of a reminder to me that, yeah, perhaps things are picking up in a relative since to whe -- sense, but a company like softbank -- >> buys their growth. >> very different types of assets as well in places like the surprise position here. a slew of filings were released late yesterday offering insight into what they bought last december. buffet's firm made it raised its stake in appleby 42 million shares now reporting owning 57.7 million shares. also reported a 9.3 billionaire line stake with investments in american, delta, southwest and united continental. they reported new stakes in sirius xm and monsanto. meanwhile george soros's notable

moves, new stake in goldman sachs and cut its stake in bank of america. >> other filings including david tepper increased his bets in the pharma state. bought new stakes in pfizer and mylan and upped allergen and cut apple. nelson peltz's fund has taken stake in procter & gamble. it's roughly $3.5 billion. the move is a sign that they're taking aim at the consumer product giant's increase in sales and gets rid of the unprofitable brands. trian makes it another month to trying to invest. p&g reacted well to the news

yesterday, up 2.7%. >> that's right. csx wants shareholders to vote on the demands an activist investor is making there as it tries to install the former ceo of canadian pacific of the head of the railroads. csx will call a meeting. they say they hold a nearly 5% stake in csx and wants to introduce the model harrison hunter used. they want excessive compensation and enough board seats to effectively control the company. that's an interesting fight that's going on at that company. meantime, president trump will meet with the ceos of eight large u.s. retailers this morning. they're expected to discuss tax reform and making improvements to infrastructure. the group will include target ceo and gap ceo and jcpenney ceo. the retailers oppose the border

adjustment tax and cut corporate tax reform from 35% to 20%. >> a lot of focus on this meeting. a lot of the retail ceos say we're all in favor of tax reform, but this border adjustment tax could really derail our profits, move us in fact from profits to losses and cause us have to have increase the prices on the consumer by 20%. that's the point i imagine that they would hit home with the lawmakers and president trump. look forward to that meeting starting today. american airlines pilots are blasting the ceo doug parker. they say he's failed to implement the contract. the vote against parker follows his decision last week to skip an industry meeting with president trump. american flight attendants picketed outside the company's headquarters in fort worth, texas, yesterday which marked

the four-year anniversary of its merger. apple cfos are rejecting the idea of a u.s. border tax. they said the tax could have a potentially detrimental income tax to u.s. competitiveness and jobs. >> it's not good for the u.s. economy. it is going to end up burdening the end consumer and because the fact that the dollar would go up significantly which it did today. >> apple's cfo says apple will return more capital to shareholders if u.s. tax rules are relaxed but he's discounting apple will use the cash to create new jobs. of course, apple yesterday hitting an interday share price high, albeit not a market cap

high based on the various stock splits. >> hoping to lift all of the averaging. coming up, twitter ceo jack dorsey getting into the valentine's day spirit. we'll tell you what he did and why it's giving the company a lift. stay tuned, you're watching cnbc.

welcome back to "worldwide exchange." good morning to you. yesterday three record highs for

the major indices and a fourth one if you include the russell. markets are driven higher by financials which moved higher because we saw yields go up after a slightly more hawkish and expectant janet yellen put it on the table. investors moving it to a may hike. the ten year note went above 2.5% when janet yellen was speaking. we slipped a little bit. yields falling today a bit to 2.47%. that move in yields spurred banks higher up 1 1/4%. seven year note for you there as well. 2.29%. don't usually look at that one. futures this morning are expected to continue that positive. as you can see, more slightly we're looking at the s&p, the dow slightly in positive territory. all three turning green. the dow higher by 29 points, courtney. number of individual

corporate stories. aig reporting a bigger than expected loss for its fourth quarter in part due to a $5.6 billion reserve charge to cover possible future claims. the insurer also raising its share buy back program by up to $3.5 billion. peter hancock on "closing bell" last night. >> ten years ago we were doing about 15 billion in revenue in this business. today that's down to about 3 billion. so we've been reducing it and quite dramatically over the last 18 months as we really realized that these trends were going the wrong way. put in the context of a more balanced set of lines of business with multi-line clients. we think the quality of earnings going forward will be a lot more stable. take a look at shares of aig this morning, they are down by more than 4 point be point 5% as investors digest the loss. express scripts seeing a

fall. shares down by about a percent pre-market. lending club issuing a weaker than expected outlook for the current quarter and upcoming fiscal year. they're looking to bounce back from a scandal. they fell sharply lower by almost 7%. more stocks to watch. humana watching it will pull out of obamacare in 2018. the news comes after the insurer and rival aetna says they will walk away from the planned $34 billion merger. humana shares up 1% this morning. fossil reporting disappointing results citing a stronger dollar and declines in the traditional watch category. the company's ceo says the accessories maker will look to, quote, build upon the early success to combat sales. shares down 17%. merck halting a study. it was a data monitoring

committee said there was virtually no chance of finding a positive clinical effect for the drug. merck shares down nearly 2% this morning. in other corporate news jack dorsey giving twitter shares a bit of a bump. he's upg his stake in the company buying nearly $7 million worth of shares. purchasing 426,000 shares priced from between $15.84 to $16.60. dorsey treating it adding #lovetwitter. isn't that cute? >> very cute. still coming up, top stories out of washington including new details emerging overnight about the departure of president trump's national security adviser. first, as we head to break, here's today's national forecast from the weather channel's reynolds wolf. let's take a look at the forecast. a chance of showers or a few storms across parts of the deep south. places that need rain will get it. higher elevations will be a bit

of a story. one of the spots, we make our way down to dallas, 61 degrees. mild conditions in denver. mile high city at 64. 44 in bismarck with a mix of sun and clouds. showers in seattle. some high elevations may get some snow fall but it will be rainstorms going into parts of northern california. los angeles, 79 degrees. relatively mild conditions for you in chicago. temperatures mainly into the mid 30s. could see some lake-effect snowfall across the u.p. and northern michigan. a question, it has been an easy winter in that part of the world. we have more coming up after this commercial break. back to more "worldwide exchange." ♪

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ng art♪uha ur reiin. te mdoow.. ng art♪uha welcome back to "worldwide exchange." now to politics. the fallout of the president's national security adviser. edward lawrence joins us. >> reporter: good morning, will fred. this was an erosion of trust that led to the resignation while others just don't buy it. who knew what when? familiar questions now being asked of the trump administration following the resignation of national security adviser michael flynn. congressional investigations are pending. >> i think it's likely that general anybody will be at some point asked to come and talk to the committee about both post election activities and any other activities that he would be aware of. >> there needs to be an

independent and transparent investigation because the white house knew for weeks that general flynn misled the vice president. >> reporter: the official explanation from white house spokesman sean spicer is their legal counsel went through a deliberate review process to determine if flynn broke the law. spicer says he didn't. 2 1/2 weeks after learning flynn misled the administration including vice president mike pence about the nature of his phone call with the russian ambassador, the president decided he couldn't trust flynn. >> whether or not he actually misled the vice president was the issue. that was what ultimately led to the president asking for and accepting the resignation. >> president trump and i see eye to eye on the dangers emanating from the region. >> reporter: as the president meets benjamin netanyahu.

and the vice president only learned 11 days after others knew. now on to sports and high tech in the nba. starting february 23rd you can stream live games and virtual reality ala cart. they're working with next vr. previously you would have to pay for season long subscription but now you can watch individual match-ups for just $7 a game. they're offering free on demand highlights from the nba all-star game including the three point and slam dunk contest. >> i've not seen that. i like this idea of, you know, choice vr games. >> much less expensive and you're right in the action. >> much less expensive and it could be a big extra money earner for sports teams. i think they're all hoping. >> i agree. this morning's top stories and roundup of the global market action. plus today's top stories and

mattel's toy maker shaking it up. what they're doing with the american girl doll tapping a demographic.

good morning. a yellen bounce. stocks bouncing after a fed chair. asset manager softbank is buying fortress. >> too quickly there. my bad.

plus, today's top trending stories including rumor has it. the german shepherd pulls off a shocking comeback to win the best in show. the details of that straight ahead. it is wednesday, february 15th, 2017. you're watching "worldwide exchange" on cnbc. ♪ ♪ good morning. very warm welcome to world wide exchange here on cnbc. court, great to have you with us. >> good to be here. team is on point with the music. "rumor has it." >> they always are. >> good team. let's check on global markets this morning. it is 5:30 a.m. here on the east coast. let's take a look at futures. we were trending higher all morning to continue yesterday's rally. it looks to be the same way here in the midpoint of the show. the dow jones industrial average if it were to open it would be called higher. s&p up by 2 and nasdaq up by 4

as janet yellen heads back to capitol hill for more testimony. we have a slew of economic data reports and retail ceos heading to washington. let's take a look at how things are going in europe. early in trade things have been higher across the board here by about .4 of a percent give or take in either direction. it does look at this point in the day that the footsie mib is the leader there. we've seen global stocks coming in at 21-month highs at this point in the game. take a look at what's going on at asia. a bit more of a mixed picture here. we saw mixed picture in china, japan's nikkei was higher despite some toshiba trouble. interesting news there. shares dropped more than 9% in tokyo from toshiba on the company taking or reports that it would take more than a $6 billion hit because of its newest nuclear unit. >> indeed. shanghai slightly lower of those and of course that lending data, credit data that i said earlier. >> china.

>> significant credit growth and something to keep in mind as to what has actually been driving the otherwise slightly stronger fundamental data we've seen recently. meantime, fed chairman janet yellen heads to capitol hill. yesterday she told a senate panel waiting too long to raise interest rates would be unwise. >> at our upcoming meetings the committee will evaluate whether employment and inflation are continuing to evolve in line with these expectations, in which case a further adjustment of the federal funds ratd woue likely be appropriate. the committee's view that gradual increases will likely be appropriate -- >> the s&p hitting its 15th record close since the u.s. election yesterday. financials leading the way up more than 21% since the election. and up around 1.24% yesterday. the likes of bank of america are up nearly 3%.

the likes of goldman sachs, the best performer on the dow and hitting a ten year high. highs not seen before the financial crisis. so banks really leading the charge yesterday. it's worth noting without that gain you probably wouldn't have seen those record highs. it was sort of flattering the broader market. banks the best performers. we did have four out of the 11 s&p sectors. now why were banks higher? it was the comments from janet yellen and what it did for the yield curve. yields moving up higher. if we look at the ten year treasury note, it did cross above 2.5% yesterday. yields are softer today at 2.48 as things stand. certainly yields have moved up since about a week ago. we hit 2 point 34% so we have moved noticeably higher. rick santelli maintains that the key range is 2.3 to 2.6. even though we went above 2.5 we're not breaking out but we

are higher than a week ago. oil prices, let's check in on those. they were higher a little bit yesterday albeit energy managing to turn a negative performance in the s&p sector wise. oil prices were up by half a percent. they're soft by half a percent. $53 in wti. dollar board we saw yields move higher following the slightly hawkish term. it wasn't too high to derail what was otherwise a risk on sentiment day. the dollar gained about 1/4 of a percent. it's on pace for its fourth positive session in a row and what would be its second positive week in a row. it broke a four week losing streak. today higher by 1/3 of 1% against the euro, the yen and the pound. finally gold prices were basically flat yesterday and today. the gold price standing at 1226, up .1 of a percent. >> just by a dollar. today is the busiest day of the week for the economic data.

retail sales and cpi out followed by industrial production out at 9:15 and at 10:00 a.m. yellen will be talking to the financial services committee. look for numbers from cisco, cbs, kraft, heinz and marriott. landon dowdy joins us with three things to watch in pepsico's report. >> they're looking for them post earnings of 1.15. beyond those numbers, here are the three things that you want to watch. first, nutritious snacks. the company has fallen behind its stated goal to triple revenue from nutritious products to $30 billion this decade. pepsico has seen an increase rather than a decrease. this as many countries work to tax or curb sugar consumption. they'll want to see an update on sales growth. second, beverages.

pepsico's combined retail sales sliding recently as modest results and salt at this snacks fail to offset declines in the beverage category. looking for details on the company's beverage strategy going forward. the third thing to watch, rival coca-cola reported a 1% drop in global volumes last week due to declines in latin america. watch to see how pepsico is fairing. shares are up 5% in the past three months. back over to you. >> landon, thank you very much for that. among today's other top corporate headlines, softbank is buying fortress for $3.3 billion in cash. fortress manages about $70 billion in assets will operate as an independent business. they plan to invest $50 billion in the u.s. economy. it's not clear if this purchase is part of that total investment plan. other stocks to watch this morning, heineken reported solid

results on strong beer sales in asia and mexico. they're up in 2017 expecting margin growth of 40 basis points. danone has unveiled a $1 billion cost cut over the next three years. the european dairy business growth is taking longer and tough conditions in china will remain this year. credit agricole fourth quarter profit fell 50% at the french retail unit. the drop was less than expected. revenue rose 7%. shares are called higher by almost 5%. abn amr owes fourth quarter product rose 23%. thabeet forecasts. the dutch bank said the net interest income and capital ratios improved. shares up by more than 3%.

chuck e. cheese is moving a step closer to going public. they're preparing for an ipo or sale of the restaurant and arcade chain. a decision on either option is several months away. chuck e. cheese was founded in 1977 by one of the founders of atari. it was taken private in 2013 for 1.3 billion. i should probably not reveal this. i always assumed that it was chucky with a y, not chuck e. cheese. >> never been. >> never. >> never had a party at chuck e. cheese. >> never been. maybe i -- >> it's a big part of american -- >> only founded in 1977. again, i would have assumed given how much it was mentioned that it was a longer standing restaurant chain. what does the e. stand for, do you know? >> i don't know. edgar. >> do you know? >> there we go. making headlines teenagers have been tarnished with being bad drivers.

a new report says millennials may be more reckless. aged 19 to 24 are more likely to exceed the speed limit by 10 to 15 miles per hour, run a red light, speed in a school zone or read or send a text. very dangerous. don't do that. the study asks drivers of all ages whether they thought they were more careful than other people on the road. not surprisingly most people said they are. >> that doesn't surprise me at all. younger people are definitely more reckless. >> not me. i was always cautious courtney. very careful driver. >> i was reckless wilford. a german shepherd named rumor takes top spot. he was favored to win it all last year but was upset by a german short haired pointer named c.j. the owner says she's going to be relaxing for a while and finding an appropriate husband. there will be puppies in the future. there we go. >> have you ever seen that movie

"best in show". >> no. >> put it on your list for this weekend. it's really funny. >> i'm not going to lie and promise you. >> all right. don't make promises you can't keep. >> not my kind of thing. mattel's american girl debuting a new doll and it's a boy. the toy maker releasing two new characters this week. a nashville singer named tiny and her drummer friend logan. this is the brand's first ever boy doll in its 31 year history. >> about time, too. >> i know. i may be mispronouncing the boy's name but i like the fact that it's a nashville singer. this is interesting for this brand. when i was a kid they were sort of using pioneer dolls. now they're much more modern and this is the most modern twist i would say. >> i'm afraid to say i don't have that much to add on this topic but good for logan. welcome. jag u war teaming up with shell to make fueling up easier. launching a payment feature that lets you use apple pay or paypal to pay at the pump from your

dashboard assuming you own a jaguar. the feature coming to the u.k. first but will roll out around the world shortly after. i like that. nice and easy. makes it simple. >> very interesting. facebook launching an app for smart tv. the new app focuses on allowing people to watch the videos on a larger tv. if you can keep track of all of these apps and all the ways you can use facebook, probably more ad money. still to come, today's must reads. as we head to break, a look at european equities. they didn't enjoy the rally that wall street enjoyed. janet yellen's bump coming a little bit late. they're playing catch up. we're back on "worldwide exchange." see see your numbers go up, despite your best efforts. but what if you could turn things around? what if you could love your numbers?

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exchange." now to our must read stories, those catching our attention. my picks in the wall street journal it's titled "make big banks put down 20% just like home buyers do." it's from neil kashkari. the u.s. fed has been calling for higher regulation as opposed to easier regulation. here's one of his reasons why. borrowing costs for homeowners and businesses on their record loans. if loans were scarce borrowers would be competing for them driving up costs.

nor do other indicators suggest a lack of loans. bank credit has grown 23%, twice as much as nominal business credit. they are not having their credit needs met. so that's a valid point. loan growth hasn't been strong and a reasonable reason to suggest that bank regulation doesn't need to ease but it is wishful thinking on his part to hope that credit requirements are going to go upwards, certainly upwards to a level like 20% which he suggests. the other criticism i have is he makes out during this that banks and regulators are set as if they're going to cut regulations -- capital requirements significantly. i don't think that's what banks are after. they're looking for some of the smaller rules to be removed as opposed to outright cuts. this is a decent case for why it should go up. it's wishful thinking. >> he tells it with an

interesting story about trying to get a loan himself. the odds of a bailout are still near 70% that he writes. >> this is based on his report that he released late last year. >> right. >> which that particular statistic was the one that jumped out at me to discredit the whole thing. he was basing this on data which is just as unpredictable as anything, frankly, to try and put an arbitrary number of 70%. they also suggested that he was really and truly planning for the last crisis and of course the whole point is whatever the next crisis is going to be, we don't know. so to put that arbitrary percentage on this is somewhat ridiculo ridiculous. >> my pick is titled the michael flynn fallout. it reads yet the same voices that call edward snowden a hero don't seem concerned about the leaks of these transcripts about mr. flynn. they from the time about mr. trump's authoritarian menace but don't want to ask if the tactics were used against mr. flynn. it's an interesting argument and that's why i point this out. it's something we haven't heard. this is a different side.

i'm not saying that i agree with it or not but that they were troubled, these transcripts are released at the time he was a private citizen. why are folks sort of not o outraged about that. >> president trump tweeting making it clear that he's upset that the story that people are focusing on isn't the fact that there's been leaks from washington to allow this in the first place. certainly an argument worth airing. approaching the top of the hour. that means the team is getting ready for "squawk box." becky quick joins us from the nasdaq. good morning. >> good morning, will. good morning, courtney. we'll talk about the key ss. stock, swamps and swimsuits. stocks, we know we've been watching the new highs just about every single day. today we have two important guests who are going to be joining us. ron baron of baron capitol will be sitting down with us for a half an hour from 8 to 8:30. we don't get to talk to ron about what he sees. he has something he wants to get across. be sure to tune in to hear what his message is in terms of the

market. kate moore who is the chief equity strategist at black bear will be sitting down to talk about all of these issues. she'll join us from 6 to 7. that's the first s. then we'll talk to swamp. judd greg will join us to talk about all of the washington issues you have been talking about. we want to talk to him about tax reform and where that stands at the moment. plus you know that netanyahu is coming to meet with trump today. we're going to be talk to go daniel kertzer, the former u.s. ambassador to israel. we'll talk about how the two leaders will navigate that. finally, we get to the third s, swimsuits. the "sports illustrated" swimsuit edition is coming out. we have the editor of that edition and one of the swimsuit models robin lawley will be joining us. can't wait to get in the toolbox with that. >> i trust as well that joe and andrew will be modeling some of

the swimsuits themselves? >> yes, i think they're wearing their banana hammocks right now. >> it seems only fair. >> it does. there's the edition. >> wow. >> make sure you tune in. the three ss. we'll be all over it. >> i'll certainly be watching becky. >> for the stocks, right? >> particularly for the stocks. >> for the stocks, exactly. >> there we go. i might be able to make it down for the final segment of the show. >> will fred will be having his face plastered behind us. >> is that possible? do you guys need a hit from me around then? >> i think we could use your expertise, will. >> great. i'll see if i can come down and make that possible to talk stocks. thank you very much. >> thank you. >> we look forward to the most important s, "squawk box." still coming, mark zandi, chief analyst at moody's. we'll talk about prospects of growth under the trump administration. stay tuned, you're watching "worldwide exchange" on cnbc.

welcome back to "worldwide exchange." here we have mark zandi, chief economist at moody's. good morning to you. was your take away that march is on the table? and if it is, is that the right position for the fed to be in? >> yeah, i think march is on the table. probability of a rate hike in march is still pretty low. you know, markets are discounting a 25, 30% probability. that sounds about right to me. you know, if i were king for the day i think i would raise rates in march. i think, you know, the u.s. economy is very strong. we're very close to full employment. inflation close to target. global economy stable. all of the factors that go into making a decision about rate hikes seem to be suggesting a rate hike. i would go in march. i think the consensus of the fomc would be not to move in march. we'll see. >> mark, do you get the feeling data aside, fundamental data aside, the way the fed and janet

yellen thinks about things is changing a little bit and they're becoming less data dependent and willing to be more proactive moving forward? >> no, i think they're sticking to their frame. they have the criteria. they have stability in the financial markets, global conditions. that's what's in their so-called reaction function. you know, i don't think that's changed. i think what's complicating things for them and creating more uncertainty for them is fiscal policy. you know, what is the trump administration going to do and what is it going to be able to accomplish? are we going to get fiscal stimulus, deficit cuts, that really matters for the future of the monetary policy. they don't know. nobody knows. there's a boat load of uncertainty. that's complicating things. i don't think the framework they have has changed here. >> so then is it possible, mark, for the fed to look at normalizing monetary policy when you have such an atypical

administration? >> well, depends on what they actually execute on. if they can execute on anything. so, you know, if we do get tax reform, if they're able to lower marginal rates for businesses, individuals, but if that's not paid for, you know, if it's deficit financed, that's raw fiscal stimulus. you layer that on that means higher inflation. that means they're going to have to raise rates more quickly. you know, it really does depend on what they can get done and execute on. maybe in a sense it's not data dependent. it's dependent on what policy makers can accomplish. >> mark, how important is it in your eyes that any tax plans or fiscal plans are fully funded as opposed to seeing the deficit balloon? >> i think it's pretty low that they're going to be able to finance tax cuts. you know, just take the corporate tax reform, if you lower the corporate tax rate 35% top rate today to 25% or 20%,

which is what house republicans want or 15% which is what president trump said before the election, you know, that costs a lot of money. the only way you pay for it, you can't even pay for it fully is the border adjustment tax. that's a pretty complicated thing, i think the bar for getting that passed in congress is very high. my sense if we get tax reform meaning lower rates for individuals and corporations it's probably going to add to the budget deficit. >> mark, if we look at the picture around the world and focus on europe first, some of the data is improving. that's offset by political risks and situations in greece. how do you look at the outlook for europe at the moment? >> i think you summarized it nicely. the european economy has found some footing here. you know, given some monetary easing by the ecb and also less fiscal austerity, a little bit of fiscal stimulus all good. so, you know, i think the

economy is repairing. as you say, the key threat here, at least in the near term are these elections and how they go. you know, everything kind of sticks to script and the establishment holds, i think europe's economic prospects are pretty good for the foreseeable future. you know, obviously these elections go in directions that certainly i can't anticipate. if they do, then that will be an issue. >> mark, there have been so many things that president trump has spoken about, not the least of which is this immigration order and, of course, there's been a lot of back and forth. just very quickly, i mean, how could that possibly derail our economic growth? >> that could be a big problem. depends on precisely what he does and executes on and how significant an effect it has on immigration. just to give you a sense of ge basically go flat if you cut it off. so we need immigrants, high skilled immigrants. a lot depends on what he does

here for our growth prospects. >> mark, thank you very much for joining us. we have to leave it there. mark zandi of moody's analytics. that is it for "worldwide exchange." up next, "squawk box." then yl love thi incredibrotectioin a p th thin. i dn'think it wowork, buits. 's called ways disee tch this this super absbentortus quid to l, for incredible proction th's surpring thin. this super absbentortus quid to l, sow i'm ing it, but no onel wil. alwa diseet

good morning. riding the rally. stocks again closing at record highs. don't chase this rally. futures point to more gains on wall street. elsewhere, whale watching. the world's biggest investors including warren buffet revealing new positions in the latest round of filings. details straight ahead. tax battle in washington. it's wednesday, february 15th, 2017. "squawk box" begins right now. ♪ ♪

live from new york where business never sleeps, this is "squawk box." good morning, everybody. welcome to "squawk box" here on cnbc. we are live from the nasdaq market site in times square. i'm becky quick with andrew ross sorkin and joe kernen. and we have judd gregg. >> new hampshire, please. >> i'm sorry. new hampshire. >> oh, my goodness. >> it's early in the morning. i should have caught that. i know it. >> vermont's the upside down state. >> they're the ones with the maple syrup that doesn't quite live up to new hampshire? >> that's right. >> who is the guy that went -- was that you? >> might have been the governor of vermont. >> that wasn't you. >> but he has the better maple syrup? >> no, no, no. >> you have the -- >> we just did that. >> new hampshire has the better snow, the better