good morning. earnings central. walmart, home depot and macy's are ready to roll out quarterly results. focus on financials. hsbc profits drop 62%. the market reaction coming up. plus no deal. kraft withdraws its offer for unilever. it's tuesday, february 21, 201. "worldwide exchange" begins right now. ♪ very good tuesday morning. welcome to "worldwide exchange" on cnbc. i'm wilfred frost along with seema mody in for sara today. good morning.

>> thank you for reminding us it is tuesday. >> i nearly said monday. just about caught it. >> let's check on global markets this tuesday morning. a muted session overseas as we'll look at u.s. futures right now. they are indicating a higher open, which would technically mean a new high for the s&p 500, which right now is up about 4 points in premarket trade. dow jones seeing a gain of 40 points. nasdaq up just about 12 points here in premarket trade. >> i think the story from last week was the trump reflation trade was back. we got between 1.5% to 2% of gains. the bond proxies underperformed, and banks led the way. the one part of the trump trade that did not take part was the dollar, which we can come into more detail later. let's look at the ten-year treasury note. yields spiked in the middle of last week. they did settle by the end of

the week. for the week as a whole yields were up. they did rise late friday and over the weekend, 2.45% the yield there. patrick harker the latest fed member to add his voice to suggested that march is a possible for a rate hike. over the course of the last week or so, we've seen certainly fed rate hike expectations for march or may rise. 2.45% yield on the ten-year. economic data out of japan, flash manufacturing pmi rose to 53.5 in february from 52.7 in january. the fastest expansion in three years. asian equities were higher, but hong kong weighed down by hsbc which we will come to later. that's listed in hong kong and london. japan up about 0.7%. hong kong down about 0.7%. in europe, we've had some flash pmi data. the overall number, 56.0.

a seven-month high. it was at 54.4 in january. manufacturing and the services both ahead of expectation. manufacturing 55.5, ahead of consensus at 55.0. services at 55.6, versus consensus of 53.7. whether you're looking at asia or europe, we are starting to see the data. we are continuing to see the data that backs up a positive outlook for growth there as well as in the u.s. not just in the u.s. where growth expectations have picked up. trade relatively lackluster in europe. a bit of gains for germany and france. ftse 100 weighed down by hsbc's decline. >> the french equity market holding on to the flat line despite new polls showing marine le pen gaining momentum ahead of the upcoming french presidential election. we are seeing movement in the bond market between the french ten-year and german ten-year, widest spread since august of 2012. that spread is now at 78 basis

points. that's really gapped up as you rightly say in the last couple weeks. a bit more over the weekend. we should point out that we are seeing le pen confirmed in the lead in the latest polls over the weekend. >> first round. >> that lead at 27%. she's likely to make it to the second round, but 27% highlights the level you still need to gain when you get into the second round between two people. and all the polls firmly suggest she would lose the crucial second round. so the bond market move a bit. gap up in terms of yields, 78 basis point spread between the german and the french. >> politics still a big focus in europe. if we look at some other broader markets, specifically oil, which was on the rise last week, it continues its run to the upside. wti crude at $53.95. up just about 1%. ice brent crude at $56.73.

higher by nearly 1% as well. nat gas continuing its move to the down side, down by around 2%. if we look at the u.s. dollar, this will be in focus throughout the week, especially ahead of tomorrow's fomc meeting minutes released where the conversation will likely be around the impact of the stronger dollar on monetary policy. right now we're seeing u.s. dollar holding on to 113 against the yen a bit higher. >> it's worth pointing out over the last couple of weeks, when we have had that trump reflation trade in play or comments like more recently from various fed members that suggested a rate hike could be coming sooner, we've seen the dollar respond but only really in the major currency pairs. so, last week was a good indication of this the broader dollar index only gained 0.2%. decent gains today, 0.6%. a bill move for the dollar against the euro and yen higher,

but not seeing that against emerging markets. the ruble is flat today in asia. the korean yuan, all marginally higher. >> perhaps not expected in the e emerging markets, a lot of that in the currency market. >> so two weeks in a row of broader dollar index gains, but slight ones, it followed four weeks of declines. that's worth pointing out, the dollar correlation with the rest of this trump reflation trade just softened over the last couple of weeks. emerging markets are outperforming somewhat in the short-term. >> gold helping out some of these latin american countries that are producers of these commodities. gold at $1,230. slightly lower today by around $8. flat for the last year.

now to today's agenda. the consumer is front and center. before the bell, we'll get results from home depot, walmart and macy's. as for the rest of the holiday-shortened week, tomorrow look for january existing home sales and the minutes from last month's fed meeting. on thursday, weekly jobless claims. on friday, january new home sales and february consumer sentiment. beyond today's three big retailers, other companies reporting including tjx, tesla, phl brands, barclays, coles, gap and jcpenney. kraft heinz is withdrawing its proposal forever a merger with unilever. kraft worried that it would be too hard to negotiate after the public disclosure of its bid so quickly. a kraft spokesman said the company intended to proceed on a friendly basis but found unilever did not wanted to

pursue a transaction. seeing a bit of move. here. unilever basically flat this following a surge in shares on friday for unilever me. >> i was back in the uk over the weekend. a lot of talk about this deal. everything is politicized at the moment. i think that's a factor in kraft heinz's decision. they realize it's difficult to take a corporate takeover when people in the uk have experienced this before with kraft, when they took over cadbury, made a political promise that they would keep the factory in bristol open. that shut soon after. i think they realized there would be a lot of political wrangling. a lot of focus on this cross border pound has fallen type transactions and decided there's not enough cost savings to make if there's going to be a long drawn out acrimonious takeover to proceed it. again, they can easily come back in a few months time. at the moment that's the

thinking behind this. >> the question is whether kraft heinz will pursue other opportunities to grow inorganically. that's part of 3g's style of investing. but the british government was quick to respond to this deal highlighting not only cadbury but the acquisition of nestle in 2010 and the cost cutting that followed. >> unilever price, the reason it's up today is it was open in london trade yesterday. it saw most of the gains from friday eroded there. but the fresh move this morning it the kraft stock price down 3%. burger king owned restaurant brands is in advanced talks to buy popeye's. the deal will probably be valuing popeye's at $1.7 billion. an announcement could come this week. not much movement in the share price. wanda's proposed 1 billion

acquisition of dick clark productions is under pressure. wanda is run by china's richest man. it already owns amc entertainment. reuters reports wanda's deal for dick clark is shaky but not yet dead. snap is hitting the road pitching its ipo to investors. today snapchat executives will have a luncheon in new york. they're targeting a evaluation between 19.5 billion to $22.3 billion. the ipo scheduled to price next wednesday on march 1st. >> saudi arabia favors new york as a site for the ipo of its state-run oil giant, saudi aramco. the kingdom is also considering toronto and london and talked to exchanges in singapore, hong

kong, tokyo and shanghai. saudi officials expect the ipo to value aramco at a minimum of $2 trillion, which will be the big effort ipo ever. a lot of anticipation around this one. >> significant ipo value coming back to the market with snap and other ones. if you talk to investment bankers, yes, they're optimistic about m&a picking up, but super optimistic about ipos and debt markets picking up. there was much more of a hoed back of that type of activity over the last 18 months. we are seeing that in q1. that's a boone for investment banks. >> not just in the u.s. but in europe as well. we have 70 offerings in europe. that's double of last year. so it's a global story that we're seeing in the ipo market. in earnings news, hsbc reporting 2016 pretax profit fell 62%, far short of analyst

estimates as the bank took writedowns as part of restructuring. this includes a charge for its global private banking business in europe and the impact of sale of operations in brazil. hsbc launching a $1 billion buy back program in europe. the hair is down 6%, also disappointing performance in the core markets of the uk and hong kong. sometimes we forget how much exposure it has to hong kong. a bit of a slowdown there in thin things has hurt it. disappointing, down 6%. the share buyback trying to stem that fall. that's one reason that the hong kong and uk stock market are in the red today. bhp billiton returning to profit in its fiscal first half reflecteding higher commodity prices and cost cutting.

the move prompteding the mining giant to more than double its dividend. shares down fractionally on the day. intercontinental hotels reporting better than expected full-year earnings. the company saying it would return $400 million to investors via a special dividend and share consolidation. wells fargo naming two new directors to its board. the bank appointing karen petes to the finance economy and ronald sgergeant to the nominating committee. anglo gold said it will continue to pay dividends throughout the year. and anglo american says it no longer needs to sells s asse to cure its debt.

sohu.com posting a smaller than expected loss for the first quarter. revenue fell 12% year over year but that beat estimates. shares fractional e aally highe trade in china. uber is launching an independent investigation into allegations by a former employee of sexual harassment and gender bias in the workplace. she published a blog post this weekend claiming a manager made unwanted advances, she says uber's hr department ignored her allegations and threatened her job as a result. uber said this type of behavior is unacceptable and anyone who thinks it is will be fired. he named eric holder to lead the review along with board member arianna huffington. still to come on "worldwide exchange," the top global stories including a live report from the eu finance minister's meeting in brussels. don't miss sara at the

consumer analyst group of new york conference. it's not in new york, it's in boca raton, florida. she'll be sitting down with the ceos of mondelez, tyson and conagra later this morning. a great lineup this morning. particularly on the back of the kraft unilever stories. ♪ [dramatic ♪ ic begins] ready! charge! charge! (in chinese) charge! let your reign begin. evony, the mobile game. download now.

eu finance ministers are meeting in brussels today.

nancy hungerford joins us from there with the headlines. >> this morning the finance ministers are taking up the conversation around growth, this after the finance ministers from the eurozone last night agreed to send the mission back to athens and work towards continued bailout talks with the government there. there was some home they would come to an agreement to release the additional bailout funds that greece needs in order to make a $7 billion euro debt payment. given the busy election season that is about to kick off in the spring, many want to get past the distraction because key elections in the netherlands kicking off march 15th and the big contest in france kicking off on april 23rd are largely being fought on an anti-eu populist platform that wants to take control back from brussels. we've been watching investor concern around the french elections itself, if you look at the widening french ten-year spreads with the german bund.

a clear sign that investors are not quite convinced that marine le pen's chances are a forgone conclusion here. i had the chance to speak to the french finance minister and asked him what his message would be to investors who were still worried about a marine le pen victory. here's what he had to say. >> translator: people in markets making bets against france thinking marine le pen will be elected are mistaken. they will lose a lot of money. it's pointless to speculated on ma lean le pen seizing power in france. >> there's a united message from brussels, not just from the french finance minister but other finance ministers across the region not to worry about the elections. they're optimistic a pro european stance will prevail. but as pierre moscovici told me yesterday, we must be careful. he sees the polls much too close for comfort. he told me if marine le pen were

to surprise the region and win the presidency that could mean the end of the eu as we know it. back to you. >> thank you very much. a bit of complacency there. thank you very much. still to come on "worldwide exchange," the top political stories including the trump administration's plans to release a new executive order on the travel ban. first, as we head to break, here's today's national forecast from the weather channel's jack jackie geras. >> good morning. a soggy day along the gulf coast from new orleans towards birmingham. haven eventually into atlanta late this afternoon. dry conditions into the northeast. record high temperatures likely again today across the central plains states. more active wet weather across parts of the west. we do think things will quiet down a bit heading towards the middle of the week. look at the forecast high temperatures. 65 degrees today in chicago.

it's february, my friends. dallas getting up to 76. 72 degrees in atlanta. we will likely see dozens of records tumble once again today. minneapolis could be going from a record high today in the upper 50s to near 60 to snow by the end of the week. hope everybody has a great day. we'll be right back after this break. ♪ ♪

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new nominee and an expected new travel ban to be announced. >> this week the president is set to introduce stronger border security measures and also a measure that would track down thousands of illegal immigrants. as protests echoed across the country. >> this is the new norm for the trump country. >> reporter: inside his mar-a-lago estate president trump announced his new national security adviser. >> general h.r. mcmaster will become the national security adviser. he's a man of tremendous talent and tremendous experience. >> reporter: the 54-year-old served in both iraq wars and afghanistan. a senior white house official tells nbc news he was tapped by the president because he's a warrior an defense intellectual.

mcmaster traveled back to washington on air force one last night with the president. and now will turn to new border measures. immigration advocates are concerned after a homeland security draft indicated deportation hearings could be accelerated and thousands of additional agents could be part of the new initiative. >> we're likely to see raids and the types of round-ups that you did not see during the last eight years of the obama administration. >> reporter: the president is also expected to announce a revised travel ban this week replacing his original executive order blocked by a federal judge after sparking outrage and protests as travelers were detained at airports across the country. the new order will target the same seven predominantly muslim countries but it will not affect travelers who already have their green card or visa. that's the latest live in washington, wilfred, seema, back to you. >> thank you very much. good to see you. the trump administration is considering changes to how the u.s. trade deficit is calculated

to help bolster the case to renegotiate trade deals. the "wall street journal" reports officials are discussing whether to exclude re-exports from export stats, these refer to goods importeded to the u.s. and transferred to another country. if the government adopted this method, the deficit with mexico would be nearly twice as high. >> it's a really good write-up, both the reporting of the story and the comment piece -- opinion piece in the "wall street journal." i nearly picked it as my must read. well worth a look. it is pretty much fiddling the numbers of this kind of thing. even more to the point, this is completely ignored and not mentioned in either article, the way the administration focuses outright on the idea of a trade deficit being a bad thing. clearly you can't have a trade deficit with everyone. but free trade globally and compared to advantage that simple laws of international economics means you will imported from some, export to

others net-net overall. there's too much rhetoric that a trade deficit is a bad thing. that's not even brought up in this. clearly the trump administration will try to accentuate that, if what the "wall street journal" is reporting today is true. >> perhaps those criticizing that number will maybe take a different approach or this will appease them for now. we'll see what this calculation does. still to come on "worldwide exchange," the top stories and a round up of the global market action plus all of today's top trending stories including why jeopardy host alex trebek is going viral.

good morning. walmart, home depot and macy's ready to roll out quarterly results. >> uber launches an investigation into allegations by a former employee over sexual harassment and gender bias. and an ipo pitch. snap tries to put its best foot forward for investors as it rolls out its road show. it's tuesday, february 21, 2017, you're watching "worldwide exchange" on cnbc. ♪ good morning. very warm welcome to "worldwide exchange" on cnbc. i'm wilfred frost along with seema mody. good morning. >> good morning. >> let's get straight to the global market action. u.s. futures now higher here in

premarket trade, which would mean a new high for the s&p 500 calling for a higher open by 5 points. the dow jones up 44 points. nasdaq in premarket up about 14 points. keep in mind the dow did see its best weekly performance of 2017 last week, the nasdaq and s&p both saw their fourth straight positive week if a row. a lot of that having to do with trump's policies. >> just more broadly reflation trade, we saw some hawkish comments from various fed members that increased rate hike expectations, that pushed yields higher for the week and allowed banks to rally hard leading the charge last week and saw the bond proxies underperform. >> a subdued mood across global markets if you look at europe. last week the european stoxx 600

hit the highest level since december of 2015. here a bit of a mixed trade. the ftse 100 lower by about 0.2%. we're seeing germany, france and italy slightly higher on the day. eurozone pmi number came in higher than expected, hitting 56. the highest level since 2011. th economic data out of europe continues to improve prompting that discussion on whether the european central bank will scale back its qe program sometime this summer. so far mario draghi said that's not the case. of course if this data continues to improve, just last year we were talking about deflation, now the increase in inflation we're seeing in many markets, that's got to be a positive. >> absolutely. that data on the services side very strong. manufacturing also beat. a 17-month high for the composite figure. the reason the uk was down in part because hsbc results weighing on the index. hsbc down some 6%.

hsbc also weighing on the hong kong index. hong kong ending in the red by 0.75%. japan offsetting that with gains of 0.7%. pmi data approving. around the rest of the world, that fund mamental data outlooks pretty good. oil prices did see a slight loss last week. down about 1%. breaking what has been a four-week winning streak. 54.1 the price of wti. the ten-year treasury note. u.s. equities only rally meaningfully when yields have been rising. they did rise last week, they spiked in the middle of the week and pared some of those gains. we are seeing yields higher at the moment. 2 pntd 45. we are seeing a lot of hawkish

tones from fed members, that's pushing yields higher again. 2.452%. the dollar is seeing a decent move higher today. last week it was up by 0.2% for the week as a whole. the move today is significant against the euro and yen. slight gains against the pound. it's much less significant against various emerging market currencies. the ruble is flat. the yuan, taiwanese dollar, all marginally stronger against the dollar today. that's been true broadly speaking over the last couple of weeks, when we have seen reflation trade, u.s. yields moving higher, the dollar strengthened but only against the main currency pairs. emerging market currencies have been resilient. gold prices to round things off. gold had slight gains last week. up seven weeks out of eight. the last two weeks have been more of a plateauing of gold prices following the sharp gains we had seen in the first few weeks and months of this year.

the price this morning, 1,229. the consumer is front and center. before the bell, we will get results from home depot, walmart, macy's. as for the rest of the holiday-shortened week, tomorrow look for january existing home sales and the minutes from last month's fed meeting. on thursday, weekly jobless claims. on friday, january new home sales and february consumer sentiment. beyond today's three big retailers, other companies reporting including tjx, tesla, hphl brands, barclays, coles, gap, nordstrom and jcpenney. big focus on retail. interesting to see if any of these companies machine shun trade, a border tax and the impact on their bottom line. the cleveland fed president said she is comfortable raising rates if the u.s. economy keeps performing. yesterday mester said the u.s. is on sound footing and cautions

against asking the fed to solve problems beyond its control such as low productivity growth. mester is not a voting member of the fomc this year. big news in the deal corner. kraft heinz is withdrawing its proposal for a $143 billion merger with rival unilever. kraft reportedly worried it would be too hard to negotiate following a public disclosure of its bid so quickly after its approach. in a statement a kraft spokesman said the company intended to proceed on a friendly basis but found unilever did not want to pursue a transaction. daniel wanda's proposed $1 billion acquisition of dick clark productions is under pressure. wanda is run by china's richest man. it already owns amc entertainment. reuters reports wanda's deal for dick clark is shaky but not yet

dead. in earnings news, hsbc reporting a 2016 pretax profit that fell 62%, way short of analyst estimates as the bank took massive write downs as part of its broader restructuring efforts this includes a charge for a global banking business in europe and a share of operations in brazil. hsbc is launching a $1 billion buyback program but the company warns that possible u.s. protectionist measures from the trump administration could impact global trade and harm its business. what i fine interesting about this, we heard some retailers and consumer companies about the impacted of a border tax on their bottom line, but we have not heard much from the financials, the banks about this specific topic. interesting comments from hsbc. >> it was also just core

weakness in two core markets, uk and hong kong. interesting to see barclays results. they come out in a couple days time. they have looked good, because they bounced back significantly from the brexit vote and their exposure in the u.s. has benefited post the trump election. we'll have barclays numbers later in the week. snap is hitting the road pitching its ipo to investors. today snapchat executives will attend a luncheon in new york. the company is targeting a valuation of between 19.5 billion to $22.3 billion. down from the initial target of 20 billion to 25 billion. the ipo scheduled to price next wednesday on march 1st. a controversy for uber a former employee publishing an essay this weekend alleging sexual harassment and gender bias in the workplace. landon dowdy joins us with the latest. >> that's right. a lengthy blog post susan fowler

rigetti wrote soon after starting at the company she received messages from a manager stat stating he was in an open relationship and made advances towards her. she claims managers threatened her job as a result. uber's ceo responded ordering an independent investigation that will be led by former u.s. attorney general eric holder. kalanick says board member arianna huffington and leann horney will be part of the probe, and kalanick said in a tweet that anyone who behaves in a way described in fowler's blog and thinks it's okay will be fired. he also said if you look across our engineering, product management and scientist roles, 15.1% of employees are women. this has not changed substantially in the last year. he points out that facebook is at 17%. google at 19%. and twitter at 15%.

this is the latest incident coming after kalanick abruptly quit president trump's advisory council earlier this month. uber was also criticized for lowering prices during a strike by new york city taxi drivers. this story did bring back that #deleteuber once again. thank you very much. viral video alert, jeopardy host alex trebek taking the internet by storm with his rap skills. the host reading off lyrics from the likes of drake, kendrick lamar and kanye west. >> started from the bottom, now we're here. started from the bottom, now the whole team here. by a chopper, have a doctor on speed dial. i guess, m.a.a.d. city. six foot, seven foot, eight foot bunch, young money militia, and i'm the commissioner. panda, panda, panda, panda,

panda. >> they made, they ain't famous. they mad they still name also. we still hood famous. we still hood famous. i was just getting into this rap thing. i'm not too good at it, i was into it. >> having read about this on the way in this morning, i'm disappointed. >> why? i thought he did a great job. >> he did a solid job, better than i would have done. it wasn't really rapping it. it was reading it. i thought this would be full-on, no holds barred proper rapping. >> no, that fine medium of being a host but also trying to embrace the song lyrics. he had a bit of a -- >> a bit of rhythm there. >> the write-up gave it more of an oomph behind it. definitely trending. back to snapchat. this time not about its ipo but the spectacles now on sale online. the sunglasses will run you $130. they can only be shipped in the u.s. each household is limited to six pairs.

the glasses were previously only available at physical snap locations. the one semi location in new york city closing down on sunday. only six pairs per household? >> if you want your product to sell, allow it to sell everywhere. >> my point is which household wants more than six pairs. >> you never know. dozens of chinese businesses applying to use ivanka as their trademark. the national trademark office receiving 65 applications from companies looking to trademark items from wallpaper to alcohol. one weight loss product has ten applications to use ivanka. her daughter is learning mandarin. >> didn't know that. >> there was a daughter of her wishing the chinese happy new year. very impressive. just from the daughter herself, but also a useful little

diplomacy tool. coming up on the show, our must reads, and don't miss sara eisen at the top consumer conference florida today. she will be sitting down with the ceos of mondelez, tyson and conagra. first, a look at how european equities are trading at this hour. a mixed set of trade. german dax up just about 0.4%. upbeat pmi data. we'll get to that after the break.

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welcome back. time for our top stories. my pick is from the "financial times." it says unilever was a deal too far from kraft heinz. it's a good additional perspective from a uk paper, one of the main reasons why this deal potentially broke down. the editorial board writes pragmatically companies must recognize as berkshire and 3g have done the world has changed. the brexit vote and the donald trump election both indicate popular unhappiness with global capitalisms hard edges. it goes with what kraft has gone through with the acquisition of cadburys and heinz, and the effective way of cutting costs, boosting the margin that way. since the likelihood of doing it

with this deal across the atlantic is slightly harder, and the political pressure so much tougher. perhaps that's being slightly underplayed over here as one of the reasons following that acrimonious take over that craft did of cadburys. >> and nestle did in 2010 as well. >> i just think that that's a big factor, it's a good break down of those deals that unilever -- that crakraft has d. >> at the end of the day, if a company wants to acquire another company in the approach they like, should the british government push back and even have a seat at the table? >> you don't want to do it in all the deals. >> the logic of trump's foreign policy from the "wall street journal." mr. trump rejects the wildly held belief that globalization always benefits american interests. this may be his most lasting challenge to the post-war

international order. still the trump administration appears willing to live up to commitments and responsibilities that do not impose costs at home. people have been trying to dissect the president's foreign policy thus far. this is one way of looking at it. if you're trying to understand what the next move from the white house may be, look at what it means for america. if it comes to trade deals from mexico and canada, what's in the best interest of the u.s.? why would trump pursue these bilateral deals with japan and britain after withdrawing from tpp. perhaps that would have been foreshadowed if one would have kept into account what it would mean for american jobs. >> right. those are the must-reads. approaching the top of the tour, the team is getting ready for "squawk box." melissa lee has more on what's coming up. >> we have a busy show. a lot to on trumponomics. you were just talking about trump's policies. we have the president of the

afl-cio to talk about labor. also the former indiana governor, mitch daniels, he will talk about tax reform and the national dealt. then we have you set up for the markets straight ahead. we'll talk housing with josh z rozner, break down macuwn macy' terry lundgren. we look forward to seeing you then. >> looking forward to it. still to come, jurrie jurrien timmer will join us. stay tuned.

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retirement journey takes you, we can help you reach your goals. call us or your advisor t. rowe price. invest with confidence. we're drowning in information. where, in all of this, is the stuff that matters? the stakes are so high, your finances, your future. how do you solve this? you don't. you partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. morgan stanley. futures are higher this morning, by about 40 points on the dow. the trump reflation trade took hold last week. about 1.5 to 1.8% of gains for those three. record highs throughout the week. banks led the charge.

utilities and other bond proxies trailed. joining us now is jurrien timmer from fidelity investments. thanks for joining us. >> good morning. >> what's the key thing to focus on this week? last week there was plenty of economic data, fed speak which allowed the market to increase expectati expectations. this year is it more corporate focus and earnings focus? >> earnings season is wrapping up. it's been a good one. earnings are on track for the fourth quarter to be growing at 7% year over year pace. remember, just three quarters ago that was minus 7%. so we had a dramatic inflection point on corporate earnings. over the near-term, there is momentum, but there's a larger narrative that has unfolded that people have missed because we're so inundated of headlines about politics in washington. really some global synchronicity

going on in terms of the global economy and earnings are infl t inflecting higher across the world. this is a solid underpinning for the u.s. market. so it's not all about whether this plan gets enacted or that plan gets enacted, it's a larger story and a bullish one. if earnings momentum continues to offset the political uncertainty out of washington, how much higher can stocks go? >> the way i look at it, earnings in the u.s. are growing at about trend growth, about 6%, 7%. but the valuation is steep. a look at the rest of the world, the world is trading at a 14 multiple for about equal earnings growth. i think there's more room to run globally just because the u.s. has led the market really since 2011. just to give you an example.

since the end of the financial crisis, the s&p is up 266%. total return, ex-u.s., the market is up about 125%. ask there's a fair amount of pent up momentum globally, that will be a tailwind for the u.s., but especially for non-u.s. equities. >> that the data started to deliver significantly for that to build more momentum in places like europe and asia? it has. one thing that's happened, about a year ago, it was actually a year ago when oil prices bottomed at $26. the fed started backing off from its more hawkish guidance of four hikes in '16, four hikes in '17. most importantly the chinese economy got reflated again. at that point in the first quarter, about a trillion dollars worth of new credit was unleashed. the chinese economy started

being an engine for global growth once again. there's a fair amount of momentum. earnings are inflekting up everywhere. but earnings are coming off a deeper trough, so there is a fair amount of momentum. you mentioned it there, the chinese growth being somewhat credit-led, also european markets are still benefiting from loose policy which could tighten soon. to what extent is this growth pick up this momentum, this reflation around the world fragile and only short-term and led by policy? i think in china there's staying power. many people have gone bankrupt trying to predict the collapse of the chinese financial system. there are issues. it's not sustainable when you keep throwing more money on to a problem. it's a command economy. they can keep this thing together for as long as they need to. in europe it's really the same

thing as in the urs.s. the end of easy money policy is only bad if the u.s. can't sustain it but the u.s. has gotten stronger allowing the fed to back off. interest rates have risen quite a bit since last summer. the stock market seems to be just fine. that's because there's more growth to withstand a rise in rates. in europe, my guess is they're not going to let rates rise or end quantitative easing until the economy is able to withstand it if it does, it becomes a luxury problem. i'm sure the central bankers would love to get out of this unconventional monetary policy. >> jurrien timmer, thank you very much. main things to watch today. retail earnings coming out. >> a lot of retail earnings. the commentary, the views around protectionist trade policies what it means for their bottom line will be interesting. that could potentially be hurt

by those policies. >> lackluster day around europe at the moment. hsbc weighing on london earnings, but futures pointing higher. that's it for "worldwide exchange." that's why i have the spark cash card from capital one. with it, i earn unlimited 2% cash back on all of my purchasing. and that unlimited 2% cash back from spark means thousands of dollars each year going back into my business... which adds fuel to my bottom line. what's in your wallet?

good morning. quarterly earnings alert. quarterly results coming up from home depot, walmart, macy's all due this morning. also no deal, kraft heinz withdrawing that 1$143 billion offer for unilever. and a big washington watch. president trump's new security adviser on the job this morning, lieutenant general mcmaster is known for speaking truth to power. it's tuesday, february 21, 2017, "squawk box" begins right now.

>> live from new york where business never sleeps, this is "squawk box." good morning. welcome to "squawk box" on cnbc. i'm michelle caruso-cabrera along with andrew ross sorkin and melissa lee. joe and becky are off today. u.s. equity futures are suggesting a positive open. dow would open higher by 43 points. the nasdaq by 14 nap, and the s&p by 4.5. we're doing asia first. sorry. the nikkei higher by 0.68. hang seng lower. now on to european equities. germany higher bay half percent. france, marginally positive. some news over there is that the greeks are once again back at the negotiating table when it comes to their most recent bailout money.