♪ the winning streak continues on the street as the dow posts its ninth straight record close. washington watch, manufacturing ceos head to the nation's capital to meet with the president. on the agenda, tax, trade and jobs. >> plus tesla trades higher december p despite a wide loss. we will break down the results. it's thursday, february 23, 2017, "worldwide exchange" begins right now. ♪ >> good morning, welcome to

"worldwide exchange" on cnbc. i'm sara eisen in washington today. >> i'm wilfred frost back at cnbc headquarters. good morning to you all from me as well. particularly to you, sara. >> and to you. we'll be back together in no time. >> let's check in on the global market action. split results yesterday. a slight gain for the dow, very slight losses for the s&p and the nasdaq. it was a reversal of some of the more recent trends. we saw the bond proxies underperform. utilities the best sector. they outperformed having underperformed recently. energy which had fallen a couple sessions in the row -- sorry, had risen. energy was the worst performing sector, down 1.6%. this morning we are expected to bounce back. the dow called higher by 25 points, s&p by a couple points, nasdaq by 1.5 points.

bond markets slipped in terms of yield yesterday. we saw the treasury minutes which did seem to suggest a hike was coming fairly soon. investors took that as meaning may as opposed to march. at 2.40. >> as for the overnight action in asia, south korea's central bank kept rates unchanged. that was expected. hang seng and shanghai saw markets sell off about a third of a percent. pulling back from recent highs which have been global. let's look at europe, both data and markets. german gdp had come out overnight, 0.4%. so a little bit higher than what we expected. suggesting on a quarterly basis things are looking good on a yearly basis, behind other

nation like the u.s. and the uk. markets, as you can see, higher, a little bit higher, not significantly. france leading the pack, 0.3%. a bit of political relief at the margin overnight. an agreement to an alliance with mr. macron easing the pressure for mr. macron from the left. all things considered, still pretty evenly pared, the chances between mr. macron, mr. fillon and madam le pen. let's look at broader markets. >> a plus for pronunciation of the french politicians. oil is rising sharply. wti up about 1.5%. so is brent. brent below $57 a barrel. wti above 54. maybe we'll see relief for the energy shares after they got slammed yesterday. the dollar index, after the

federal reserve was out with minutes from the last fed meeting, they're thinking of raising interest rates gradually and soon, though that didn't increase the march rate hike, but increased the probability of a may hike. political risk out of france has weighed on the euro lately. dollar is down to 113.16 against the yen. a lot of that is the yield story. we have yet to see yields rise in a meaningful way in the last few sessions. that's leading the dollar to languish here a bit. the pound a bit firmer here, 1.247. let's show you what's happening with gold, dollar sold off yesterday, helpful for gold, up $5.20 an ounce. moving on to the agenda weekly jobless claims out at 8:30 a.m. eastern. claims have been below 300,000 for 102 straight weeks, the

longest stretch since 1970. a pair of fed officials are speaking today. dennis lockhart and dallas fed president, robert kaplan. hormel foods and kohl's report before the open, after the close, hewlett-packard enterprise and nordstrom. president trump will meet with executives of manufacturing companies to discuss efforts to jump start the american economy. the focus is set to be on deregulation, work force training, infrastructure, taxes and trade. this is his second meeting with his manufacturing council, a council led by the ceo of dow. calling them to the white house less than 30 days since they last came to discuss some of these issues. a signal perhaps that they had their homework, they will present it, talking about the issues. the question is will that translate into actual policy? >> absolutely right. it's interesting you use that word homework. we heard that from other ceos.

some finance ceos mentioned they were given homework and to report back. the first meeting grabs the headline, but in the second and third meeting do we see action from it. >> especially now because he has more cabinet secretaries in place. this one in particular reports to commerce secretary wilbur ross who has yet to be confirmed. clearly it's coming together. the question is, "a," is congress going to get on board. all we've seen is actions from the president himself in the form of executive orders and advisory committees. >> speaking of various cabinet members, treasury secretary steve mnuchin says the trump administration is targeting a goal of economic growth at 3% or higher. in an interview with the "wall street journal," he suggested low growth since the financial crisis was an anomaly, and the result of obama administration policies that can now be reversed. the newly confirmed cabinet secretary says the trump team is working with congressional republicans on tax policy and

has an ambitious goal of passing a tax code overhaul by august. don't miss the first on cnbc interview later this morning on "squawk box," 7:00 a.m. eastern time. one not to miss. reading that interview in the "wall street journal," he did seem to say that a strong dollar was all right. it was something that was the result of a strong u.s. economy. and that the two go hand in hand. clearly you want a strong u.s. economy. there was a converse point, he did say about the border adjustment tax that it could have an impact about -- where is the quote, about what the impact that might be on the dollar. so confused messaging, particularly on the dollar front from various different individuals within the cabinet and various individuals themselves. they seem to have mixed messages. >> though i would say that it probably sent a lot of relief to former treasury secretaries who have always said that a strong dollar is in the best interest

of the united states and to institutions who track these things. this is a typical imf answer, saying the strong dollar reflects the strength, relative strength of the u.s. economy, in the long-term that's not such a bad thing. he also couched it by saying in the short-term some of these moves can be adverse. i think if he's speaking to a foreign exchange market, you look at the action today, very little of it. din do anything to disrupt it maybe he'll clarify policies further. i would suggest he toed the common line here on previous treasury secretaries and other institutions and economists when it comes to talking about the dollar in the context of what the administration wants. we'll see more of that from the interview on "squawk box." rex tillerson and homeland security secretary john kelly are in mexico to meet with its president and other leaders. this after a crackdown on

undocumented immigrants was announced this week. new rules could let u.s. immigration officers send non-mexican migrants back to mexico they came through that way on their way to the united states. it was a chilly reception these deputies got in mexico. sean spicer called our relationship with mexico yesterday phenomenal. >> we'll have to see how that meeting goes later today. you didn't mention the mexican peso? >> israeliingsraeliing -- it's back to the level it was before the election. if you look at the decline after the peak, that's coming off -- that peak at the high, that's the record low for the mexican peso. it has been recovering slowly and steadily as potentially

president trump has softened his rhetoric on mexico. >> i shouldn't have given you the chance to started on the mexican peso. we could keep going now. there we go. we will watch that meeting throughout the day. on to corporate earnings, tesla posted a wider than expected loss, and the model 3 is on track for volume production in september. elon musk saying tesla will likely seek more capital because of that new model. >> we're considering a number of options. but i think it probably makes sense to raise capital to reduce risk. >> and tesla's cfo has decided to leave the firm. he will be replaced by deepak ahuja, tesla's first ceo. >> the first question on the analyst call was a question about whether the administration will speed up the efforts to go

to mars and whether that would be a distraction to him. adam jonas said this is a relevant question for tesla, because you are splitting your time between tesla and spacex. >> a lot to of space related revelations yesterday. >> i think that's why. >> very exciting. barclays swinging to a full year net profit in 2016, total income falling 3% below analyst estimates, as the bank continued to exit businesses. the bottom line was helped by a drop in legal costs and strong revenue from investment banking, in particular bond trading. barclays also reporting a surprise increase in its core capital ratio as the company says it is months away from finishing its restructuring program. cnbc spoke with jes staley earlier today about all of it. >> in the u.s., if you look at core investment banking revenues which is m&a fees, debt capital market underwriting fees,

barclays was up year over year, even on a dollar basis. all the u.s. banks were down year over year. so this notion that only the americans were gaining market share was not true in the u.s. market for barclays. we think the morale in our investment bank is strong. we're committed to being a global investment bank. i think we had a good year in 2016. >> barclay shares are being rewarded. up 3.3%. >> i picked that particular segment from jes staley, it's interesting to see the difference within performance across the investment banks in europe. barclays has been a beneficiary of the actions stateside in a way that maybe deutsche bank hasn't. u.s. bank s are gaining, and

european banks may be losing, and he was saying they have been gaining. >> you were talking about european banks losing share to the u.s. banks. the question is is it barclays or potentially the rest of the european banks being underestimated. >> we'll have to wait and see on that. more stocks to watch, hewlett-packard saying revenues rose 4% from a year earlier. shares up 2.5%. shares of l brands taking a hit after first quarter and 2017 guidance that fell short of expectations. the parent company of victoria secret saying comparative sales are likely to fall 20% this month. down 13%. jack in the box reporting a first quarter profit and revenue miss. the results due in part to lower than expected sales and margins of the qudoba franchise. did i say that right? >> qudoba. you got it. a chipotle competitor.

square posting better than expected fourth quarter results. the company's strong results thanks to strong sales growth in all of its products and efforts to offer new services. here is square's cfo, susan fryar on the call last night. >> we always had muscle in how to deal with regulated ors in ay that's good, and i feel it's a competitive advantage for us. >> not on the call, but in our studio. square shares are surging, up about 9.5% in the premarket. boston beer projecting disappointing results for 2017. the brewer of sad adams and angry orchard says this is due to a more challenging retail environment with more options for drinkers that stock down %. big earnings after hours moves. cheesecake factory

continuing a seven-year positive sales streak for this company. sales increasing 1.1%. when we come back, what wall street wants to know from washington. president trump's ceo meetings, we have the manufacturing council at the white house today. what does it mean for your investments and the economy? we have chuck gabriel joining us next in studio with me to discuss. stay tuned, you're watching "worldwide exchange" on cnbc from cnbc world headquarters and here in washington, d.c.

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release his tax plan soon, and white house press secretary sean spicer says it is expected in "the next couple of weeks." joining us to discuss what this could mean for investors who are hopeful of tax reform, we have president of capital alpha partners, chuck gabriel. welcome. >> thank you, sara. >> nice to see you in person in washington. treasury secretary mnuchin talking to the "journal" says we could see tax reform by august. is that realistic? >> you have to have goals. as my daughter says, good luck with that. >> not so much. >> not so much. part of the problem is to channel pink floyd, they have to eat their spinach before they can have any pudding, and they have to deal with obama care. while waiting for president trump to come in with details on

his phenomenal tax plan, we won't have too many details because he doesn't have too much staff at this stage. members are back in their districts, and they're having their town halls invaded by folks reading about obamacare, reading about it falling apart and the lack of plans to replace it. and there's a full scale insurrection. >> what is the status of that? >> so far -- >> they've been waiting for so long to repeal it. >> right. they're waiting to do all these things, including tax reform. the great thing is they vehaven wasted time the last two, three years, they have a good one from congressman brady and ryan all set to go. it will be tough enough. now they have the green light to repeal and replace obamacare and obamacare happens to be falling apart. they'll own it. it will become trump care. proce

proprocedurally because they decided to do obamacare first and then tax reform, you can't skip over it. you have to eat that spinach first, so it will be reflex. >> what time frame you are looking for the repeal and replacement of obamacare and then tax reform. >> we think they might not finish obamacare until july, they have the august recess. we are doing a lot of -- equivalent of price discovery with regard to the border adjustment tax that really is the long pole in the tent on tax reform. it's not as though they're idle, they just can't get formally started. we don't think they will get through with obamacare until july. they make progress over the summer. the house will move beforehand. so we'll have action on the house floor, then the senate takes probably into september or

october to pass its version. we go to conference committee. it may take until february. >> it's confusing because the gop has a tax plan. they have their way forward, the paul ryan tax plan. and we're waiting on the administration's own version. do we know how far apart they are, and whether the administration's tax plan includes a border adjustment tax which will would pay for this? >> no, and that's why it's an easy sell getting people looking towards next tuesday and the president's address. he doesn't have a lot of staff. he's not going to really put forward his so-called -- >> isn't gary cohn doing all of that? >> he is, but to have a real budget, it takes a great deal of detail. i think the three real questions are will he support the border adjustability tax, will he really support the concept of revenue neutrality or gloss over that, and then frankly beyond

that, the issue is is he going to draw a line on a men minimum reduction in the top corporate rate. does he have to get to 20 and draw that line in the sand? the real surprise could be that he glosses over the revenue neutrality issue by throwing a budget that proposes to cut spending, outside of entitlements by several billion dollars with a root canal type budget. a heritage type budget that we've seen in the past. that will really roil washington in a new way. odds are they serve up a savory repast in the end, but the sausage making will take all year. trump may be threatening to fire chefs all along the way. it's not clear that they'll be able to keep mouths watering as these index move beyond year-end

price targets, as they already have begun. >> it is amazing to see. wilfred, did you have a question? >> i did picking up on something that sara hinted at, in terms of who has the most power on economic matters, at least, within the trump white house. all focused on what mr. mnuchin might say today and the days ahead. is gary cohn the real power player there? he had a lot of influence in the early weeks, or is it someone else altogether like mr. bannon? >> that's what we assume looking from the outside. they're both talented. it's interested, though, in the way we have this dialectect down here, normally you have an army of economists. so much of the dialogue and narrative is driven by economic arguments. here's a president who has not yesterday decided whether he wants to refill the council of economic advisers. we are getting off to a bit of a

late start. there's been loyalty tests for the levels below, the cabinet secretary. it's a bit of a slow start. democrats are trying to slow things down. i think it is mnuchin and certainly is gary cohn, they're very competent. you have a republican congress that has done so much of the work. they're on to 2.0. it's a credible tax plan, but base broadening tax reform, if you have to stay revenue neutral, it's a very, very tough hurdle. we went through that in 1986. very, very difficult. that's on top of obamacare. i'm not an expert on that, but that looks like, you know, the germans rushing in -- beginning to get bogged down in the russian winter in 1945. that could be the real surprise that we get -- we gag on the spinach is what i'm saying. >> it's an ambitious agenda. chuck, thank you for joining us. thank you. >> chuck gabriel ahead of our

interview with steve mnuchin. wilfred? still to come, a round up of the overseas movers. stay tuned. we're back in a couple minutes. ♪ why do so many businesses rely on the u.s. postal service? because when they ship with us, their business becomes our business. ♪ that's why we make more e-commerce deliveries to homes than anyone else in the country. ♪ here, there, everywhere. united states postal service priority : you

and a round up of global markets. and the small business behind hollywood's biggest night. an inside look at how those statues that mean so much to the stars are actually made. "worldwide exchange" will be right back from washington and headquarters.

good morning. markets now, futures pointing to a slightly higher open as the dow looks to continue its winning streak. we're on washington watch. treasury secretary steven mnuchin sees a tax overhaul by august. and the oscar goes to -- the words hollywood is waiting for. but what goes into the big night and how does small business play a part? that story coming up.

it's thursday, february 23, 2017, you're watching "worldwide exchange" on cnbc. ♪ good morning. welcome back to "worldwide exchange" on cnbc. i'm sara eisen in washington. >> i'm wilfred frost at cnbc headquarters. it's throwback thursday, ahead of the oscars throwing it back with some of the top songs from movie soundtracks. i like this one very much. >> i knew you would. >> i hope we have a sneaky bit of whitney houston "bodyguard" before we go. >> that's one thing we can go with. a whole hour with no elton john. >> elton john, sara, great movie soundtrack from "the lion king." that also should be included. >> "can you feel the love tonight." >> and "circle of life."

>> dow futures up 19 points building on another record close yesterday. s&p ticking up 2 points. the dow about outperform other averages yesterday thanks to dupont. nasdaq futures are flat to down, half a point. in asia overnight, softer action. stocks around the globe at multi-year highs. they took a pause. the nikkei ended flat. hong kong and shanghai closed lower. the early action in europe right now. stocks there, sort of flattish to pulling back. in france, seeing some positivity. the political risk there front and center. the ftse 100, little changed. so is the german dax. >> barclays higher after reporting results. i'll prices slipped, they're down about 1.3%. energy was the worst performing sector on the s&p because of that. oil is bouncing back today.

up almost the same amount it was down yesterday, $54.3 per barrel. ten-year treasury note slipped below 2.4% yesterday. despite what could have been interpreted as hawkish comments within the fed minutes. less hawkish than the tones we get from janet yellen and other fed members. they did say they might hike fairly soon, but that was interpreted by the markets as meaning may rather than march. march hike odds slipped fractionally. the ten-year fell below 2.4 to 2.39%. back above 2.4 this morning. dollar off the back of that did slip. down around 0.15%. this morning, as you can see, a bit higher, very little movement at all. the euro is a bit softer, down ten basis points, 105.40. it did slip below 105 briefly yesterday on political risks, this morning easing of those political risks. back above the 105 level.

gold prices, fell about a half percent yesterday. third negative session in a row yesterday. higher today. those three negative sessions not doing much to dent the 2017 rally gold has enjoyed. >> treasury secretary steve mnuchin says the trump administration is targeting a gel of economic growth at 3% or higher. in an interview with the "wall street journal," he said the trump team is working on tax policy and working on passing tax code overhaul by august. joining us is -- this is the biggest overhaul in 30 years. border adjustment is one piece of this program, but not the thing that makes things so important for businesses.

drug companies wanted a new system that puts an end to inversions. pfizer, lilly and merck are backing this plan. if pharmaceutical companies are subject to the same taxes as u.s. companies, that removes the incentive to move companies overseas. they are also jazzed about being able to fully expense. t looking forward to getting rid of the estate tax that official rate is 0% 40% over 5.5 million. in a typical year, getting any of these on the table would be a big win for businesses, now this fight over border adjustment could derail other goals. >> i think it's interesting that you highlighted some of the

winners, because there are clearly losers in this. we hear a lot about the retailers, but there are other industries watching this border adjustment tax. we were talking about whether the trump administration tax plan, which is separate from the gop tax plan is going to include that as a key pillar. >> this is a big question, john harwood reported that house republicans are not waiting on a tax plan from the white house, they're not waiting on a path forward on obamacare from the white house, there's a thinking that the white house might let lawmakers duke this out on their own, see which way the wind is shifting and come out and support which ever plan may be the most politically feasible. the question is without strong guidance from the white house, will lawmakers be able to reach a consensus, reach a conclusion on their own? >> i have not heard a lot about the inversion point. is that something that is included? >> we're so interested to see drug companies were supporting this plan, joining exporters. i thought is this because drug companies are exporting more

pharmaceuticals? no, they say they're more concerned about the foreign competitors and making sure any import of drugs into the country are actually being faced with the same types of taxes they have to pay in the u.s. >> we have someone here who heard the word imports and lit up. joining us to discuss trade and tax issues is alan tunnelson from reality check. he has been a supporter of trump's idea that trade deaf kits are bad for growth. we have to go after them. respond to some of ylan's points, especially talking about the exporters getting a benefit from the tax plans. >> the emerging politics of this border adjustment tax fight, especially among big multinational companies are jaw dropping to anybody who has paid attention to trade policy for the last 25 years. typically when congress is considering a new trade

agreement, you have the big multinational manufacturers and retailers on the same side. they always want that trade agreement to go through. the reason the retailers want it is obvious, they feel they'll get cheaper imported goods to sell to customers, and manufacturers have loved this because they have made off-shoring production easier. this time in this border adjustment tax, you have the two groups slit down the middle. what strikes me did this is that though you hear that if we do pass something like this border adjustment tax or a v.a.t. or whatever version people have been thinking b manufacturers might have to pay more for their imported imports, companies like ge and like boeing, which clearly source worldwide, they seem to feel that the boost they'll get from essentially

subsidized exports greatly offsets that more expensive impo imported input effect. fascinating. jaw dropping. >> alan, what do you see in terms of the currency effects of border adjustment? we saw the comments from steven mnuchin in the "wall street journal" saying the stronger dollar is a sign of america's strength. do you think border adjustment helps that or do you think the currency flows won't make up for the higher costs? frnlg>> one reason is that so m other factors affect trade policy aside from exchange rates, and even aside from tariff rates. you have various predatory trade practices, conducted by every major american trade party you can think of. subsidization, intellectual

property theft, et cetera. all of this affects trade flows. border adjustment tax, i would imagine, would offset to some extent that currency effect. but so many other considerations happen to be in that mix. it's really so hard to tell with any precision. >> this is really the message i'm hearing from senate republicans, they're unsure of how border adjustment would work in practice. that's why they're hesitant to come out in support of it. you can say the senate will always go in its own way, it will never adopt anything the house sends it wholesale, but there are questions about how this will work once it's implemented. >> exchange rates, the whole notion of wto. >> that's a whole separate issue. >> i wanted to bring up manufacturers, they will be meeting with president trump today. the council comes back. trade is one of the policies within the framework of discussion for manufacturers. can you make manufacturing great

again in this country? have a renaissance of jobs, without compromising long-term relationships of our trading partners when you talk about fair trade deals? >> that's one of the $64,000 questions that we face. since the beginning of the cold war, decades ago, trade and foreign policy and national security considerations have been very closely intertwined. now, historically foreign policy considerations have always come out on top. president trump during the campaign said this time it's going to be different. but i've actually seen some signs that especially concerning american relations with big trade partners like japan and south korea, that may not be the case. they may be veering back or leaning back to a more traditional approach. >> well, you know, i think one thing that is also important to remember is that manufacturers are not united on this front either. the national association of manufacturers has called for

comprehensive tax reform, but have been really careful not to come out on one side or the other in terms of border adjustment. so the question is with businesses so divided over this, you're looking at big wins such as lowering the headline wage, getting rid of inversions, how much is that division in the business community going to disrupt the potential for all these other things they have fought so long and so hard in order to achieve? >> what are you waiting for to hear today? >> i hate to cop out, but it's so uncertain because, again, concerning trade politics and u.s. business, totally unchartered waters. >> alan, thank you. >> thank you very much. >> follow him on twitter. a must-follow. alan tonalson. thank you, ylan mui. >> thank you. >> wilfred, left out of the party. >> ylan, you have to have another debut in studio. don't think that's it. we want you back on "worldwide exchange." >> she'll be back. switching gears to a lighter

topic, the oscars, hollywood's biggest night is days away. while it attracts the world's elite small businesses also have a part to play. kate rogers joins us with that story. good morning. >> reporter: good morning. rock tavern new york couldn't be further from hollywood, but for the past 3 1/2 months a company has been working on the statues. they may be known for making the oscars, but the factory has been around for 47 years working with famed sculptors. the oscars account for 1% of their annual business. >> it's a big project for us. it's fun. it's exciting. it gets us press and attention. typically our role in projects, when we're working for sculptors, we're sort of behind the scenes. >> the oscars are made in 12 steps including being shipped to brooklyn to be plated in gold before being sent back to pollich tallix for assembly.

>> each one of these bronze castings has to be mirror polished. we started with contemporary technology, move into modern processes, ultimately a very sort of old world hand craft. there's not a lot of places you can go, eastern in the art community where you can get all of that in one roof. >> now the name tags put on them, they are done in a 24-step process, each nominee's name is engraved on to a tag in advance of the oscars. they have more than 230 of them. demchak will be at the awards on sund sunday. >> this is awesome. did you get to hold one of them? are they weighty? >> i held it. as everybody always says, it's so much heavier than it looks. it's almost 10 pounds. 9 1/2 with the base. >> interesting to hear that. i never held an oscar, but i

have heft a bafta, they are incredibly weighty. surprisingly so. . more so than the emmy awards. i think the bafta and the oscars win on that front. thank you very much for that. still to come, the big global market movers, and then later this morning, don't miss that first on cnbc interview with treasury secretary steven mnuchin, 7:00 a.m. eastern time on "squawk box." a must-watch. you're watching "worldwide exchange." back in a couple minutes.

coming up on "worldwide exchange," paul donovan from ubs well management. stay tuned, you're watching "worldwide exchange." future ticking higher. of businw york state is already in motion. companies across the state are growing the economy, with the help of the lowest taxes in decades,s ticking . a talented workforce, and world-class innovations. like in plattsburgh, where the most advanced transportation is already en route. and in corning, where the future is materializing. let us help grow your company's tomorrow - today at esd.ny.gov

welcome back. we're approaching the top of the hour, so the team is getting ready for "squawk box." joe kernen has a look at what's coming up. you have a big interview we've been talking about all morning. >> yeah. enough said, right? convenient that the "journal" already smoke to mr. mnuchin, nice to be ability to flesh out the details on what we know the message is going to be in advance. once you know the message -- it's kind of like knowing what the interview questions are in

advance. you can prepare now we know a lot of what treasury secretary mnuchin will say. he will say by august, he will say we want 3% plus growth. but we don't know many details. we don't know whether the trump administration is completely on board with the border adjustment tax. we don't nknow a lot of differet things. how do they feel about the strength of the dollar? sets up the interview, if you read the front page of the "journal" with the kind of questions that will be asked. it will be interesting and important. with the markets called higher -- so the markets are moving higher on something. can august -- can it really happen by august? can you do obamacare to do that tax? you have to do that first. will that be finished? all of this with the back drop of the deportations, the immigration moves that are coming next week. all of the apocalyptic language

that we have coming from primarily from one side. speaking of that, howard dean will be on. god knows what we could hear. i'm just glad we have governor jim gilmore to talk to him about it. i will sit back and just watch that it's gotten surreal, the rhetoric -- okay, let's say both sides, certainly on one side. >> both sides, and the market continues to go higher. >> yes. >> thank you. looking forward to the interview and the show. >> to wrap up "worldwide exchange," let's talk a little bit more about the day ahead and markets more generally. joining us is paul donovan from ubs wealth management. we have the treasury secretary joining us in a little over an hour. lots of focus in terms of what we expect from the trump administration on tax plans.

if there was a border adjustment tax, would it be a good or bad idea? what would it do for the dollar? >> well, i think one of the issues with any kind of trade protection, doesn't matter if it's a tariff, border tax, this is a tax on consumers. that's plain and simple what you're doing. this is a tax on the american consumer one of the interesting issues that comes out of a border tax is that this is a tax which will hurt low-income consumers more than it will hurt high-income consumers as a general rule. particularly if you exclude autos. if you look at things people buy on an every-day basis, low-income people are more exposed to this. you have to say this is redistributive, you are taking money from lower income people to finance tax cuts for companies, is that good or bad? that's a matter of political analysis, but it will certainly be significant for the economy if it's something that transpires. >> is it simply redistributive

or is the net effect detrimental to the u.s. economy? >> well, what you're doing is creating a less efficient economy over the medium term. you know, anything which interferes in free markets will create less efficiency overtime. and that comes at a cost in terms of economic growth. now, there may be reasons why you wanted to do that. there are, on occasion, reasons why people say, actually a little less efficiency is beneficial to the economy in a social sense or in a political sense, but economically, no. trade protection is a pretty unam big cows negative for an economy. >> if we factor in comments from various fed comments last week and the minutes yesterday, what's your latest outlook in terms of what to expect from the fed this year? >> well, fairly soon means tighten in june. that's clear, i think.

we're looking for two rate hikes from the fed this year what struck me about the minutes and the range of comments we've had from fed officials is that there is clearly now quite an active discussion about tightening quantitative policy. central banks don't just operate through rates. there is monetary policy, quantitative policy, and regulatory policy. clearly quantitative policy tightening is on the agenda. that's one of the more interesting debates of the fed over the remainder of 2017. >> paul, let's talk a bit about the political situation over there in europe. we've seen the french bond market and the euro react to headlines coming out about the french election. we dipped about 1.05 on the euro briefly yesterday. do you think the election can take the euro down to parity? >> no, i think that's relatively unlikely. what you have to remember is whereas the dollar is dependent on foreigners, the price depends on foreign flows, the price of

the euro is driven by european investors. domestic investors are less likely to panic over political risk. domestic investors generally understand political risk better than foreigners do. so i think it's quite unlikely we get a dramatic overreaction to the ebb and flow of political fortunes in france, the netherlands, germany or italy. i'm not looking for a move like that. in fact, i think from a market perspective, i stress from a market point of view, political risk is probably higher in the states than it is in europe. >> paul, thank you very much for joining us. paul donovan of ubs wealth management. sara, about 20 seconds left. apart from the mnuchin interview, what are you watching? >> i'll be watching that manufacturing council ceo meeting at the white house. we're heading over there after this. we'll be there later. main event of the morning. last time we heard from ceos,

they came up to the microphone and talked about what policies were being discussed. that's what i'm watching. that's it for us. i have access to the oil markets and gold markets. okay. i'm plugged into equities- trade confirmed- and i have global access 24/7. meaning i can do what i need to do, then i can focus on what i want to do. visit learnfuturestoday.com to see what adding futures can do for you.

good morning. treasury secretary steven mnuchin talks to "squawk box" in his first tv interview since taking the job. we'll tell you what wall street wants to hear on tax reform, trade policy, and the dollar. plus manufacturing ceos head to the nation's capital to meet with the president. we'll tell you what's on the agenda. and tesla shares rising. they posted a wider than expected loss, but revenues are rising. it's thursday, february 23, 2017, and "squawk box" begins

right now. ♪ live from new york where business never sleeps, this is "squawk box." >> good morning. welcome to "squawk box" here on cnbc. we're live from the nasdaq market site in times square. i'm andrew ross sorkin along with joe kernen, melissa lee is hang out with us. becky quick will join us live in washington one hour from now, she will be talking to steve mnuchin who will be joining us. first, a quick check of the markets. dow will open up higher, 14.5 points higher. we'll see where that all goes. >> up again. >> seeing what mr. mnuchin has to say. lots of questions about the tax policy, we talked about whether the markets have moved on a perspective tax policy or not. the s&p 500 up about a point and a half. nasdaq looking to open slightly down