. good morning, president trump delivering his first address to congress. >> i am asking all citizens to embrace this renewal of the american spirit. i am asking all members of congress to join me in dreaming big and bold and daring things for our country. i am asking everyone watching tonight to seize this moment, believe in yourselves. believe in your future. from washington to wall street, infrastructure, healthcare and trade. the global market reaction to last night's presidential address straight ahead. and google targets cable.

the search giant is getting in on the streaming game with a competitor to the traditional bundle. it's wednesday, march 1st, 2017. "worldwide exchange" begins right now. good morning. welcome to "worldwide exchange" on cnbc. i'm sara eisen. >> i'm wilfred frost. let's get to the markets. the dow closed down yesterday. a massive 0.1%. are you all right? >> are you all right? you weren't impressed any way. >> i wasn't impressed any way. but the end of this record streak must be heart break. >> after 12 record closes, it took a pause. futures show us back up. >> but alas, that record long streak is broken. the markets have had a great

run. they had a great run for the month of march. the dow finishing just shy of 5% higher. nasdaq and s&p up about 4%. despite those slight declines yesterday, we are called higher to start march by 84 points on the dow. the zap by 11, and the nasdaq by 4 points. the bigger market story than that trump speech was the change in fed rate hike expectations. over the last day or two they soared. we're around the 70% level depending which measure you look at. yetted yeed on the t ethe yield 2.41%. it's hardly moved. either way, big expectations of a rate hike. big rise in expectations of a rate hike.

>> let's show you the dollar. first place i looked this morning when i woke up. overnight action in the currency, this was the market that was open and reacting first to president trump's speech. the dollar is surging now. if you look at last night and what happened during the president's speech it was on the back burner. it was weaker. not moving a whole lot. a lot to of the strategists saying there was a lack of specific policy. nothing to really upset the markets. he talked about all of his agenda, pro growth, infrastructure, healthcare, tax cuts. we'll get to details in a moment. what you need to see now, is that dollar strengthening on the idea that the fed looks set to hike rates in march. that's a change in sentiment and rhetoric from the fed. let's get to that top story, president trump addressing congress for the first time last night outlining the agenda. also addressing recent market rallies and his plan for taxes.

>> my economic team is developing historic tax reform that will reduce the tax rate on our companies so they can compete and thrive anywhere and with anyone. it will be a big, big cut. at the same time we will provide massive tax relief for the middle class. we must create a level playing field for american companies and our workers. the stock market has gained almost $3 trillion in value since the election on november 8th. a record. we've saved taxpayers hundreds of millions of dollars by bringing down the price of fantastic -- and it is a fantastic new f 35 jet fighter, and we'll be saving billions more on contracts all across our government. >> we will have much more on the president's address in a moment and go out to washington. >> a lot more to talk about on

that. as you said at the top, we were hopeful on more on timing of policy and detail on policy. we weren't necessarily expecting it realistically, because that's the reason for not market action. >> it's the lack of specifics. healthcare, did get into some policy outlines about what that will look like and the president has told people that healthcare needs to come from. they need to figure out how they can pay for obama care before they do tax cuts. you were at the jpmorgan investor day yesterday, and dimon talked about the sequencing of this and why it's important. >> he did. he put tax top of the agenda in terms of infrastructure spend, deregulation and tax. tax change he said would deliver a change in wages, most notably, that would help the economy as opposed to helping jpmorgan specifically. with obamacare on the docket, he said tax reform could take 12 months to come. that was an interesting noted to

what jamie dimon was saying. trump mentioned tax 12 times, but he didn't talk about the deficit. for someone like paul ryan, who was sitting behind him. his applause was united throughout the speech. you wonder how some of these policies which we did hear, we'll do this, spend on that wasn't addressed how he will pay for it even though he lacks policy specifics, slightly bearish takeaway is that there's still talk of all these ideas, all these things we'll fix and spend on. how will it be financed? >> that's a good point. paul ryan was asked about that yesterday, talking to reporters during the day. one of them asked have you given up the dream of entitlement reform? he had a good answer. with this rewrite of obamacare, we are knocking off two, medicare and medicaid. that's the big deal.

this will all cost a lot of money. how will it get paid for? didn't mention russia and the accusation by u.s. authorities that they intervened in the u.s. election. overall, you know, it appears to be a reassuring speech. we're getting that many the market notes. >> the tone coming back to the acceptance speech. >> more optimistic. reaching out. >> the only other thing, political divide. you mentioned obama care, clear standing ovation, unison from republicans, stone faced silence from the democrats. moving on, data out of asia overnight, china's manufacturing sector expanded faster than expected last month. 51.6 is the number coming in for china it had been expected to be 51.1. better than expected. japan's manufacturing pmi at 53.3. that was just below the earlier reading.

asian trade is higher. 1.5% for the nikkei. slight gains for hong kong and for shanghai. out of europe, eurozone final manufacturing pmi for february coming in, 55.4. just shy of forecast, but significantly still in expansionary position. european trade up a bit yesterday. and closed for the month over 2% higher for most of the main markets. decent month for europe. as you can see, we have europe moving nicely higher, over a percent of gains for germany and france. >> looks like the banks and miners are leading the charge higher in europe. oil prices starting off the month strong. wti crude above $54. 54.20. brent up to 56.75. nat gas down a percent. i think it will be 70 degrees again in new york city again. >> so warm.

>> love this february weather. don't get used to it. it's never like this in february. as for the u.s. dollar. mild, calm, weakness on the president's speech but took off in the overnight session as the fed funds futures or the indication of whether the fed will raise rates in march, which is bullish for the dollar and bearish for treasuries, really took off. you see that especially in the dollar/yen, up 0.7%. 113.54. the dollar is stronger against the euro. the dollar is also stronger against the pound. we will watch the dollar strengthen along with treasury yields rise. see if we catch up to the story to the march rate hike. >> wanted to come back to that march rate hike story. that's the bigger market story. now expecting a rate hike, the market is, in march. coming back to jamie dimon's comments, stepping away from policy, how he sees the economy and the outlook, would have to

frame his tone as upbeat. in terms of interest rates, he was asked does he see interest rates going up as a risk. this is what he had to say. >> not for jpmorgan but someone will get hurt. i think the ten-year bond is subject to a bounce of volatility that will surprise people when the time comes. you will see the volatility when people get scared, not when they're feeling great. when they get scared and realize there may be an inflationary environment they won't rush into ten-year anymore. will someone get hurt? yeah. will it be systemic? no. someone will get hurt. >> it's important to bring that up on a day when we see rate hikes front and center again. we continue to be focused on these record market highs. i do think it's worth remembering that, of course, interest rates going up can't be good across the board. yes, stronger gdp, if it comes, will be good. but we have not seen the policy to deliver that yet. we might start seeing interest rates going up ahead of that.

he says it won't be bad for jpmorgan, rising rates is good for them, but not all equities can scoar when rates are going p and the policy to deliver that is not here yet. >> this new fresh record high has been driven by some more defensive interest rate sensitive stock sectors, that would be the staples, utilities, telecoms, they didn't do well after the election but came back to life recently after yields are under pressure. now is it a shift back into the financials, the industrials, the trump rally? that so-called trump rally taking center stage? the more we churn and have this rotation, the more stocks can continue to notch these record highs. >> just. but not yesterday. back to the political story dominating the news.

the president's first congressional address. tracie potts brings us the highlights. >> the president of the united states. >> reporter: president opened his first address to congress promising to bring americans together. we are a country that stands united in condemning hate and evil in all of its very ugly forms. >> reporter: that got a standing ovation from both sides, but key parts of his agenda show a congress and nation still sharply divided. he urged lawmakers to replace obamacare by getting rid of struggling exchanges and letting americans choose their own health plans. >> but it must be the plan they want. not the plan forced on them by our government. >> reporter: the president vowed to secure america's borders. he's pushing for something congress has failed to do for years, immigration reform. >> why not join forces and

finally get the job done and get it done right. >> reporter: to create jobs, the president promised a trillion dollar infrastructure program. >> this effort will be guided by two core principles -- buy american and hire american. >> reporter: the longest applause for the widow of navy s.e.a.l. ryan owens killed during a raid in yemen. his father refused to meet with president trump. the president promising to strengthen the military called the mission successful. that's been questioned. tonight's speech laying out new priorities with little detail on how to pay for any of it. >> 5:13 a.m. here's what we're seeing on the front pages of the newspapers this morning. no real obvious, i would say, headline that is continuous throughout all of them. the "new york post," which has been supportive to president trump, dream bigly.

there was a lot about dreaming. stealing his phrase, which i think is big league, not bigly. >> is that right? that's much better than bigly. >> i'm not an authority, but i have a feeling. >> trump redefines republicans on "usa today." we have a whole stack here. >> they just arrived. >> president rips up the script and then sticks to the teleprompter. >> which is a big development as well. we saw in that byte, clearly he said the driving factor is going to be hire american and buy american. it was still a very much american-first in terms of content, but the tone was so much more upbeat, less down beat than we saw for example on inauguration day. >> perhaps for the setting this was his first address to congress. the bloomberg.com article on the home page says that the upbeat

speech actually masks some of the division that we'll see from congress on getting some of these policies done from both sides. >> absolutely right. we will be discussing that more at 5:30 with a couple of experts. snap inc. is expected to post his ipo after the close today. they're targeting a 17 to $18 per share price range valuing the company at $25 billion. separately the company is developing a drone. the drone would be used to take pictures and videos, but not clear yet if it will be made available to consumers. i tried to get some extra information from various jpmorgan bankers on this but they're tight-lipped on pricing. >> also on today's agenda economic data. february personal income and spending out at 8:30 a.m. eastern. that will be followed by the ism

manufacturing index and construction spending at 10:00 a.m. the fed also releases its monthly beige book report which tracks regional conditions at 2:00 a.m. automakers reporting february sales numbers throughout the day and more fed speak to look forward to dallas fed president, rob kaplan and fed governor lael brainard. lowe's, best buy, mylan labs before the bell. after the close, broadcom, box and shake shack. and janet yellen will speak later this week in chicago on friday. she already sent out the big guns. it's hard to tell if they coordinate this communication policy, whether she sends out bill dudley and says use the word compelling to make sure march is on the table. either way, compelling is a serious word in fed speak and dudley did use it in talking about march. >> i don't know if it is that

coordinated, but this past week there's an awful lot. compelling is a good word, so is speeching, a word you just used. >> speeching? instead of speaking. >> you do this tease. over to you. when we come back, the top stories including google taking on cable. the search giant unveiling new, interesting products that could be a game changer. details coming up. first, as we go to break, here's what president trump said last night in his congressional address about corporate tax reform. >> american companies are taxed at one of the highest rates anywhere in the world. my economic team is developing historic tax reform that will reduce the tax rate on our companies so that he can compete and thrive anywhere and with anyone.

welcome back to "worldwide exchange." let's get you up to speed on the market action. futures called higher by 83 points. yesterday all three indices did decline. the nasdaq down 0.6%. the dow down 0.1% ending its 12-day record close winning streak. in tech news, tube plyoutube pl launch a live streaming service. called youtube tv it will debut

in the coming months and cost $35 a month for six accounts. subscribers will be able to watch original movies and shows from youtube red channel, which features content from top youtube stars. also they can record shows to a cloud dvr and watch them for up to nine months. >> unlimited storage. >> getting aggressive here. >> i think this is huge. it's cheap, relative to -- relative to what i have to pay for my other package here. compared to uk prices. unlimited storage in the cloud. i bet it will be easy to use. in terms of online for things like the main cable companies, they don't have a great interface, and i bet youtube will be just as easy to use whether you do it on tv or the computer. and it is cheap. >> they've been ramping up advertising on youtube. wonder if this will command

higher prices. it's all about getting part of that tv ad budget. everybody is trying to do it. snap trying to do it with the ipo. >> they just need the subscription service. and think of the cash power that going hall to buy ad content. this is a clear threat to the margins of traditional broadcasters and netflix. >> which is why they are under pressure to do more original shows. >> google red is an interesting name. >> like the red zone, nfl. moving on, amazon says its cloud computing service is up and running yesterday following an outage yesterday. the issue which began around 1:00 p.m. eastern stems from a failure at data centers in virginia. the outage disabled and slowed apps and websites dependent on cloud storage. widespread failures are not common on the amazon service.

some stocks to watch today. sales force.com earnings and revenues topping expectations. the company raising its revenue forecast for the year but did lower its profit view for next quarter. perhaps something that investors were focused on. the stock lower in the premarket. last night sales force marc benioff did speak with jim cramer on "mad money." >> you can see huge wins this quarter with gap, levis, yeti, a lot of amazing companies. and a lot of amazing companies that commerce cloud far exceeded expectations and of course, our marketing cloud. here is a billion dollars business when we acquired it was a few hundred million. that cloud has 450 million users on it. our commerce cloud has 300 million users on it. this is the information that lets us provide more intelligence to our customers to help them be more successful with their customers. >> he also emphasized how

they're using artificial intelligence to help businesses, but as i mentioned. shares were wavering after the close. better quarter, down 3%. also a tremendous run up for salesforce. still to come a famed new york city landmark is shutting its doors today. details of that when we come back home on "worldwide exchange." ing 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.

welcome back.

the waldorf acstoria is shuttin its doors today. when it reopens, hundreds of rooms will be converted into private condos. it was bought for nearly $2 billion by ang bang insurance in 2015. when we come back, a round up of the global markets. the dollar is rising along with fox institu stock futures. before we go to break, here is how the averages closed for february. the dow up almost 5%. s&p 500 and nasdaq almost up 4%. we're back in a couple minutes.

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. good morning. president trump delivers his first address to congress laying out his vision for america, t h taxes, infrastructure, healthcare and trade. >> we'll bring you the global reaction to the speech. it's wednesday, march 1, 2017, you're watching "worldwide exchange." ♪ >> good morning. welcome back to "worldwide exchange" on cnbc. i'm sara eisen. >> i'm wilfred frost. good morning to you from me as well. let's get to the global market

action. yesterday we saw declines across all three indices. not huge declines. >> i would say they were bigger for the russell. that was down 1.5%. >> the nasdaq down about 0.6. zap about a quarter percent. either way those record 12 closes in a row for the dow came to an end. albeit looks like we'll gain today. dow called higher by 90 points. let's look at the picture around the rest of the world. asian trade was better. chinese pmi came in ahead of expectations, 51.6. january was 51.3. that's manufacturing pmi. japan is higher in the market. 1.5% because of the dollar strength and yen weakness. european trade, which was positive for february, 2% of gains, positive for again today.

germany an france up 1.4%ment we did see european pmis coming in in line with expectation. they weren't ahead of expectations, but a nice reading around the 54 or 55 level. >> oil starts the month in the green. coming off a month where it gained about 2.3% for february. wti, 54.19. we get over that 54 level. brent, 56.78. higher by a half percent. nat gas continues to fall, down nearly 1%. ten-year treasury note yield, a lot to of action in fx and fixed income. that probability of a march interest rate hike has gone up dramatically in the last 24 hours thanks to a number of fed speakers on cnbc and elsewhere hinting that march is firmly on the table for a rate hike. treasury yields higher, let's see if they spike more. they've been on the back burner.

as for the u.s. dollar, seeing a rise. up a half percent this morning. 113.56. up about 0.4% against the euro. 105.35. up just a bit against the british pound. gold prices, the opposite of the u.s. dollar. gold gained almost 4% last month during the month of february. second positive month in a row. it is down this morning by a half percent. to the top story. president trump addressing congress for the first time last night. eamon javers joins us from washington with the highlights. >> we saw a more restrained president trump last night in his speech to the joint session of congress. it's like a state of the union speech but without the official title. a different tone from him than we've seen in the presidency, and a demarcation point from the

carnage speech that president trump gave. the question this morning is whether investors saw enough details and specifics around some of his plans to be confident those will be enacted at some point this year. the president once again promised a massive tax cut. here's what he had to say on that point. >> my economic team is developing historic tax reform that will reduce the tax rate on our companies so they can compete and thrive anywhere and with anyone. it will be a big, big cut. at the same time we will provide massive tax relief for the middle class. we must create a level playing field for american companies and our workers. >> reporter: the president also did something that you rarely see presidents do, take credit for the recent spike in the stock market. here's what he said on that point. >> the stock market has gained almost $3 trillion in value

since the election on november 8th. a record. we've saved taxpayers hundreds of millions of dollars by bringing down the price of fantastic -- and it is a fantastic new f 35 jet fighter, and we'll be saving billions more on contracts all across our government. >> you often don't hear presidents talking about the stock market. they usually say things like markets go up and down, because they don't want to take the political blame if there's a rout while in office. this administration doesn't feel that way. they very much see this stock market as evidence that their ideas are taking hold and creating optimism throughout the country. there are people in this white house this morning who will feel that this was the best moment the president has had so far in his presidency and it will create some political space for the white house to move on all the different legislative fronts. it will give the president some breathing room.

we'll see how the tone shifts throughout the week. this will be seen by folks in the white house as a high point. >> we'll also see how they react when the stock market does inef t inevitably pull back at some point. >> that's right. the point from the treasury secretary, where you don't get the strong dollar, strong dollar, strong dollar comments from this administration that you normally get from administrations when talking about the dollar specifically -- >> i would say they did. i think they ultimately did. they could have gone more for a weaker dollar, he said it reflects the strength of america. they don't want to be manipulating their currency if they're calling out other countries on currency manipulation. >> you heard the president say when the dollar is rising t could be awful for companies like caterpillar. that's not something you usually

hear presidents say. they usually stay away from criticizing the dollar, because that's where they want to be. >> i'm glad it didn't make it to the speech yesterday. >> overall, you said this could be seen as a high point so far for his presidency. we didn't get specifics on timing in terms of what to expect for policy and content of that policy and a clear political divide between the two parties in terms of who was applauding and who wasn't. are we more confident we'll see a delivery on policy sooner rather than later after the speech or less confident? >> what the president last night did was ratchet down the heat around all of these things. we saw that seesaw effect in terms of applause that we often see in state of the union addresses. presidents get massive cheers from their own party and nothing but crickets from the other side. that was in play last night. the president didn't complain

about media coverage. he didn't insult anybody. those things sort of changed the temperature a bit around this. we'll see where they go on specifics. another thing they introduced last night that they vent been talking about much is the possibility of an immigration bill. that adds to this massive legislative logjam if they want to roll that out. there's a lot to do and not a lot of time do it. >> joining us now is an investor and his name is jeff causnik. good morning to you. >> good morning. >> we've been through some of the political points on this in terms of investment do you look at this and feel the reflation trade is correct? that it can continue from here? >> i think so. there's a bit of a challenge here. there's an assumption embedded in the fed's outlook as well as the administration's outlook that we'll stimulate the economy and higher wages will bring more

workers into the work force, raise labor force participation. we think that's a challenge and more likely that it will translate directly into inflation rather than accelerate real growth. >> so the market reaction to last night's speech was fairly muted. then it felt like what caught on was this idea that the fed will raise interest rates in march. is that what is overshadowing some anticipation around the president's speech last night? >> i think fed officials are out there, trying to set the stage. markets gained on the president's remark because he appeared presidential. it will empower or it's perceived as empowering the president in being able to advance his agenda. >> terms of the u.s. dollar, the reaction higher. but in general, even though fed rate expectations have soared over the last week or so we have not seen much reaction in the dollar or bond yields. do you think that will change as we approach the fed meeting in march? i think the fact that the fed

will be on a faster path towards higher interest rates than the rest of the world has been baked in for a long time. we started getting that baked in the end of 2015. with regard to bond yields, we have come a long what bonds typically have a counter trend move to them. we have seen that counter trend move, we believe at fifth third they're poised to move lhigher. >> so market moving speech, talked about infrastructure, healthcare, taxes who is the biggest winner in terms of sector specifics? >> we think energy and financials. both are beneficiaries to the president and the president moved towards deregulation. both will benefit from some pick up in nominal growth, real growth, and then the financials tend to dbenefit from higher interest rates. >> and financials?

>> we're keeping an eye on global considerations. in our view, the global is strengthening as well. which would lean us more towards the monster banks. >> bigger banks, thank you very much. we have a busy agenda today. february personal income and spending out at 8:30 eastern. that will be followed by the ism manufacturing index and construction spending at 10:00 a.m. the fed also releases its monthly beige book report which tracks regional conditions at 2:00 p.m. automakers reporting february sales. and on the fed docket, dallas fed president, rob kaplan and fed governor lael brainard. lowe's, best buy, mylan labs before the bell. after the close, broadcom, box and shake shack. also, big event today. snap, the company expected to price its ipo after the close. sources say the company is targeting $17 to $18 per share

price range. we will watch that. one of the most highly anticipated tech ipos since alibaba? will it be a facebook or twitter? neither of those? the company calls its a camera company. >> thursday will be more excited than the close today. focusing in on the earnings reports and best buy in particular, landon dowdy has three things to watch in best buy's numbers. good morning. >> good morning. the street is looking for best buy to post earnings of $1.67 on revenue of $13.6 billion. watch for q4 sales. same-store sales expected to increase for a third quarter. while target yesterday struggled due to a rise in online shopping, best buy has thrived in that environment. at the same time consumers are willing to spend a larger part

of their budget to consumer electronics online. the second thing to watch for is online capabilities. and the third thing to watch, president trump's tax plan. many retailers like best buy rely heavily on imports. best buy imports about two-thirds of its products. you wanted to listen for commentary from management, rbc capital estimates a border tax would push best buy's tax bill from 3600 million to 3 billion. coming up, alan zentner on set with a reaction to last night's presidential address and the fedex peck trump administrations moving this morning. first, a look at the top performing sectors in february. healthcare is leading the charge, up 6%. back on "worldwide exchange" in just a couple minutes.

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first day of the trading month for march. it looks to be a positive one. dow futures in celebration mode, up 92 points after the president's big speech after interest rate expectations for a rate hike in march ratchet up higher. this comes off a strong month. the month of february the best for the s&p 500 since last march. coming up, we'll get some thoughts on the president's

speech, specific implications for the market and the economy. morgan stanley's ellen zentner joins us next.

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around the world. call us or your advisor... t. rowe price. invest with confidence. we're approaching the top of the tour. the team is getting ready for "squawk box." andrew ross sorkin joins us from new york. >> what do you think we'll talking about? >> i don't know. i think the biggest story for markets is the fed rate hike changes. shouldn't just be one thing. >> surely you'll hit the mexican peso declining 1%. >> we have a lot of things on the list. we will be breaking down what took place last night. trying to make sense of what it all means, especially when it comes to the markets. senator rob portman joins us. we have a who's who of folks from washington spending time with us. congressman kevin brady will be with us. evan bayh will be with us. jason fuhrman, i know you like

jason. he will join us to talk about the economics of this. we'll have that conversation, break down some lowe's earnings. so we have a whole lot on tap. as you said, the peso, which is top of the list. >> thank you. >> that's what we have going on. >> the politics is packed into five or six minutes of the show. >> just a modicum of the conversation. all peso all the time. >> we look forward to "squawk box" in ten minutes time. >> president trump laying out his vision for reworking the tax code in the u.s. listen. >> my economic team is developing historic tax reform that will reduce the tax rate on our companies so they can compete and thrive anywhere and with anyone. it will be a big, big cut. at the same time we will provide massive tax relief for the middle class. we must create a level playing field for american companies and

our workers. >> ellen zentner joins us. what was your takeaway from last night's speech? >> one of the biggest comments from trump that matters for markets is acknowledging that the stock market has gone up a lot since he was elected. essentially investors assuming that better days are ahead. that matters for the fed and we saw dudley mention that yesterday. that feeds into financial conditions, and gives the fed scope for more hikes without slowing the economy too much. essentially all of this worked together. all of that anticipation of fiscal policy makes the med have to move ahead of knowing what will really unfold. >> you said he acknowledged the stock market rise. i think he celebrated it, con

grad lated himself abo congratulated it and praised himself for it. is there much more here for the markets and the dollar than any particular policy? >> i think the dollar is interesting. it saw another meteoric rise on the back of a presidential election, then kind of stalled out. it adjust the to initial reaction and said we need another positive catalyst. it feels like these days the positive catalyst has to be proof that the fiscal markets will bear out in the way we expect. the fed cannot wait and sit on its hands and wait for fiscal policy. when stock markets are moving, financial conditions are easing, you are affecting the economy before we even get to that fiscal policy. inflation na inflationary pressures are building. the fed has to react to that. >> where are the economists on

this? businesses, investors, now the fed all ramping up expectations for an economy to do better. economists still seeing what? 2% growth? >> i can tell you that -- well, 2% growth, what we see it as is that right now we have gdp tracking sub 1% in the first quarter. that won't matter for the march meeting, they don't have that data in hand. if i were a policymaker, that would not necessarily make me back off of my 2% growth forecast, because i know fission c fiscal policy will be delivered lately. i think this emboldens how they feel about the outlook, an outlook that if we expect this to come true, we would expect a rate hike three times this year. nothing tells them they can't achieve that outlook. i don't think it puts more hikes on the table than what the fed is already showing us.

they're showing us three are likely. >> just gives them room to do it. >> when does the level of interest rates and hikes start to hurt the economy? at the moment we're pretty relaxed about that and think fiscal policy will offset monetary policy. at what stage does it hurt the economy? >> here is an ambiguous answer to that it starts to hurt the economy when it tightens financial conditions more than what is warranted by the underlying pace of growth and inflation in your economy. right now when you look at financial conditions, they're well easy compared with the underlying pace of growth and inflation in the economy. that would tell policymakers i can hike rates and not tighten financial conditions too much. i need to keep that proper balance. if they go too far and markets have too much of a negative reaction, when would that happen? if communication failed and the fed did something that the markets did not fully expect. that's when you can get into damage. or if they hiked rates ahead of

fiscal policy and policy doesn't deliver. >> do you think the market or stock investors are too excited about the pro growth measures from president trump that he talked about again last night in terms of their stimulus to the economy or do you agree with it? >> it's difficult to pinpoint what's in the price. a lot of sectors are moving here just based on comments that he makes about trade. we don't know the face of tax reform yet. we have broad strokes, he delivered broad strokes again last night with a directive for congress to act. that keeps markets on a positive bend. until fiscal policy takes shape, i can't say which areas where we have overreached. >> so just a buy on stocks until we get details? >> as long as we get some kind of sense that there's action in congress and things are moving, then that might be enough to keep the sparkle alive. >> what about around the rest of

the world and what it means for the u.s. growth picking up around the rest of the world. is that an extra boom for the u.s. market? >> i'm an exist, i'm paid to be the dismal scientist. so i think we have to be nervous that markets could be getting ahead of themselves when we don't know the face of fiscal policy yet. i'm encouraged that trade activity is already picking up. those are numbers that are so lag. that was already entrained before the presidential election. it does seem all of this global central bank easing is starting to bear some fruit. that is irrespective of the election. that's encouraging that the economy in its own right globally has been moving in the right direction. >> ellen, thank you. we'll see what the data shows today. we will get a lot of data. the fed beige book at 2:00 p.m. on top of earnings. we'll keep an eye on markets,

with the dow snapped back into gains after a brief reprieve from the records. "squawk box" is up next.

good morning. president trump striking an optimistic tone in his first address to congress. from washington to wall street, taxes, infrastructure, healthcare, also trade. the global market reaction to last night's speech is straight ahead. snapchat expected to ip or after the closing bell today. and google makes a play for cord cutters with a new youtube streaming bundle. we'll tell you how it stacks up to cable plans. it's wednesday, march 1, 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. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. u.s. equity futures, almost triple digit gapes for the dow futures. dow futures indicated up by 97 points. this comes after one slight day of delclindeclines. we did not make the record of 13 highs in a row for the dow. but we are looking sharply higher. s&p futures indicated up by 12 1/2 points. the nasdaq up by 35 1/2. overnight in asia. you will see that the nikkei was up by almost 1.5%. the hang seng and shanghai were slightly higher. in europe,