good morning. u.s. stocks suffer their biggest one-day losses since the election. bank stocks leading the declines on heavy volume. and earnings central. shares of nike hit hard after the dow component posted lower than expected revenues. it's wednesday, march 22, 2017. "worldwide exchange" begins r s right now. ♪ good morning. warm welcome to "worldwide exchange" on cnbc. i'm wilfred frost. >> i'm contessa brewer there in

for sara today. >> syou're wearing the appropriate color. >> i thought i would jump right nfrmt. > in. >> let's see what happened yesterday. down day for all of the indices. 10 out of 11 sectors were down. financials down 2.89%, within that banks down more sharply, the best part of 5%. very sharp moves to the down side yesterday for banks in particular. there was one positive sector, utilities, it wasn't just positive it was significantly positive up 1.4%. that was the only sector higher. some significant profit taking across the board yesterday. there is the s&p financial sector suffering the biggest

daily decline since the brexit fallout day, down 2.9%. ten-year treasury note has a lot to do with this. yields slipped significantly yesterday. now down 2.4%. a couple weeks ago near 2.6%. we had seen a flattening of the yield curve over the prior two weeks, the moves this week have been across the board. yield s now at 2.40. >> we have mick dahave economic ja japan. exports rising 11%. imports up 1.2%. both figures topped forecasts. looking at the sea of red continuing in asia overnight, we saw japanese stocks in selloff mode. there was some news out of that particular region where north korea with the failed missile test. that may have prompted some of this the nikkei down more than

2%. hang seng off by more than 1%. shanghai is off by a half percentage point. in europe, the european markets are following through as well slipping here across the board. the cac down almost a full percentage point as well. >> you're seeing sharper declines in asia than europe, because asia missed out on the decline yesterday or the extent of it europe we saw about three quarters of 1% decline yesterday, adding to that today. if europe is anything to go by, it looks like we're set for further declines today stateside. api data showing u.s. crude inventoryieies up, and prices d 0.75. they fell 1.8% yesterday. 47.9 the price of wti this

morning. dollar board a big factor to talk about. that dar we have got a bit of dollar weakness today against both the yen but not against the pound and the euro. euro and pound strong yesterday. so a bit of a bounce back in the dollar against the euro and the pound, but against the yen the dollar is weaker. the net effect is a slightly weaker dollar index today. gold prices, having, of course, having a selloff more eventually leading into the rate hike have bounced back since. up again a little bit today. up 1% yesterday. 1,247. you can see the tick up at the end of the curve after we saw the fed rate hike, buy the rumor, sell the fact moment for the dollar. the dollar softened, gold prices

rebounded. >> we want to touch on fed speak of note. robert kaplan says the central bank should hike rates two more times this year and continue gradually to trim back the huge balance sheet. cleveland fed president loretta mester says she favors the central bank takes steps to reduce its 4$4.5 trillion balane sheet. eric rosengren warned the run up in u.s. real estate prices could intensify future economic downturn. he's urging regulators to consider tools beyond interest rates to help that sector. >> let's discuss the market more. joining us are art oegen frhor . thank you for joining us. nice to see a smile on your face

despite the declines. a lot being talked about, financials at the bottom of the pact, utilities at the top, i wonder if it's more interest rates than anything else. >> i think it's more than that. one thing we forget -- you and i talked over the last several months, we have never talked about the market correcting, or a pull back. in large part you're due for some normal correction. if you stack things up, the easiest thing to say is if the new administration is going to get bogged down with repeal and replace that pushes out tax reform if that's the case, the markets priced that in to 2017 and '18's business, that's part of it. we saw some cracks in the armor. russell 2000 underperformed for the entirety of this year. the yield on the ten-year moving back from 2.6 to 2.4, that's had an adverse effect on financials. one of the largest overhangs was

border adjustment tax seems to be consensus now. whether or not that can pass senate, it is consensus ain everyone we hear coming out of the house. that's the death nail to consumer related stocks. >> let's focus on the banks a bit. 4% to 5% moves to the down side. yes, we saw yields slip, some political factors, but we have not seen yields slip to preelection levels. so 5% suggests this is sell jauf t selloff territory. >> the bank index, the bank sector from 340 to 400 is at 390. to the extent the banks were the classic trump play, they benefited from repatriation of cash going into banks, higher interest rates, deregulation. they have been the largest participant in this trump rally. so obviously they'll have the most beta on the way back down.

>> when you look at where we are and what we can be in for, people are saying we are due for this correction. we've gotten used to the optimism, and vim and vigor of investing. yet merrill lynch surveyed fund managers and more of them said equities are overvalued now. is that message trickling down through the traders? >> i think it is. what you have to think about is stocks are fairly valued. at 2400 in the s&p, about 18 times this year's earnings. the assumption we're making is with a combination of corporate tax reform and deregulation, you could probably add $10 to the s&p 500 estimate. if you did that math and looked out to 2018, stocks look attractivity ve itly valued at . you have to believe some of that gets done. if it doesn't and that's pushed out to the back end of '18, stocks are too expensive now. >> how much is the push and pull

over healthcare reform factoring into this? now you're seeing the fact that gridlock in washington is a matter of course, it's a daily occurrence. so then moving on past healthcare reform to tax reform, deregulation, maybe that's all going to be tougher than people were hoping post election. >> yeah. that's just it. you elect a new administration and you know you got republican domination in congress. you think you have an easy path, we should be able to get this done. it makes sense, it's popular. then you find out how the sausage is made. it's not that easy. things take time. healthcare is complicated. to the extent that people are look at this and reality meets euphor euphoria, okay, repeal and replace will take some time if that takes a while and is not done by easter, tax reform is not done by the august break.

everything gets pushed up. it doesn't mean it's going away, it will happen, but did we price this in for this year? >> is this a buying opportunity for banks and financials? >> i think both. the sector is up 20 odd percent since november, it was probably duet for a pull back. to your point, it's an overreaction to the magnitude of the move on the ten-year. i think the market has a couple more days of down side. we were down 1.5% yesterday. if this were last year this would be another garden variety selloff day. we're just not used to it. >> it's like rain in phoenix. >> exactly. we had a one handle on the percentage read. nothing too worrying. thank you very much for joining us. art hogan. >> stocks to watch today, fedex's third quarter earnings

and revenue rising during the peak holiday season but profit missed forecasts hurt by higher fuel costs. the stock dropped initially on the news but shares recovered on the conference call when ceo fred smith said the economy is optimistic about higher margin growth. >> we believe strongly that our strategic investments to expand our global scope and our portfolio of services will significantly increase long-term profits. >> and nike reporting higher third quarter profits but revenue missed forecasts. among the reasons, increasing u.s. competition from rivals adidas and under armour and currency headwinds. futures orders a key industry metric also disappointed analysts. on the conference call, ceo mark parker said nike will adjust operations to meet customers changing demands. >> in product we're doubling our cadence and scale of innovation through performance and sports

style. throughout our supply chain we're doubling our speed from product insight to delivery to the consumer. and in the marketplace, we're doubling our direct connections with consumers through digital, membership and personalization. >> sears holdings warning it faces substantial doubts about its ability to stay in business. earlier this year the parent of sears and kmart announced plans to close 150 stores and just last month said it would cut costs here by a billion dollars. >> turning to today's agenda, the housing sector is in focus. february economisti iexisting he due out. beforenebagowinnebago, after the close, pbh and tommy hilfiger. president trump was speaking

at a fund-raiser last night and called the healthcare vote crucial. >> the house bill ends the obama care nightmare and gives healthcare decisions back to the states and back to the american people. these are the conservative solutions we campaigned on, and these are the conservative solutions the american people asked us as a group to deliver. we are keeping our promises. >> in meetings on capitol hill yesterday, trump warned republicans they could lose re-election in the midterms if they vote against this healthcare bill. you know, it's interesting because it may be the republicans who responsible for this not passing, the freedom caucus came out strongly saying they want changes in the language. that's a tightrope walk for these republicans to make sure they're not expanding

entitlements, which is something that their constituents despise. at the same time it's true the president campaigned on this, a lot of these republicans in congress campaigned on it. >> absolutely right and it's crucial for markets. this particular upcoming vote is something people are focused on because of all of this promise of unleashing business behavior in the trump agenda. most importantly, whether it's materializing this week or not, so many republicans across the board campaigned on rolling back obamacare. there's midterms next year. if they don't have things done, they'll be in a tricky situation. that makes people think that reaction yesterday, significant selloff yesterday, a bit overdone, even if the short-term news is going against the administration. in other washington news, neil gorsuch will return to capitol hill today for another round of confirmation hearings. yesterday he answered questions from the senate judiciary committee saying he's a fair judge whorespects the law and

gives everyone a chance. >> i have participated in 2,700 opinions over the years. if you want cases where i ruled for the little guy as well as the big guy there are plenty of them, senator. >> gorsuch would not weigh in on the legal merit of cases that could come before the court including the temporary travel ban. >> coming up, banks were slammed yesterday, but should investors be worried? dueling opinions are next. stay tuned, this is "worldwide exchange" on cnbc. ♪ what we do every night is like something out of a strange dream except that the next morning it all makes sense. to power global e-commerce fedex networks are massive far-reaching

and, yes a little magical. ♪

welcome back. let's get you up to speed on the market action after a rocky day on wall street, yesterday the worst day in more than five months, we're heading into another day of corrections. the dow jones futures down 28 points on the day. as for oil, oil following suit. crude having an awful day right now, down 0.75%. brent down as well. the banks slipping significantly as well yesterday. financials having their worst day since brexit with kbw banks index down 4%. >> let's dive into this banks decline. the main reason for it was the ongoing fall in interest rates. yields falling across the curve

yesterday. but worth neating befooting bef week's yield move it was flattening already. it figures that bank of america was the biggest faller since it is the most interest rate sensitive bank. another reason cited for the decline is lessening hopes of trump's agenda being delivered. for banks we're talking in terms of tax reform and deregulation. those fears elevated ahead of thursday's crucial healthcare vote, but are they overdone. while jamie dimon was optimistic last week about the impact of tax reform on the economy, describing a repatriation tax reform as similar to qe 4, the immediate impact on banks is lower. dimon himself stating in the past that tax reform feeds through to wages in the long-term. the short-term reaction in terms of investors becoming less hopeful of final deregulation, speaking yesterday, the morgan

stanley president said wheel we're unlikely to see a legislative roll back, much can be done by appointments. he concluded so i don't expect any big change quickly but the very fact that the tone is being signaled is constructive to the markets. either way, as we know, banks significant selloff yesterday and leading the market lower. >> stocks to watch, akzo nobel resecting a second bid by ppg. they say the latest offer did not address concerns, including valuation and regulatory risks, the leverage of the merged company and job losses. kohl's's ceo thinks the department store needs to change faster to be a strong competitor to online and brick-and-mortar

retails. he expects stores will actually become smaller overtime. more stocks to watch, ing disclosing it is under a criminal investigation for money laundering and criminal practices. the dutch bank warns it could face significant penalties. auto zone with 7$750 million stock repurchase, off about a third of a percent. snap clinching its second buy rating from a wall street firm. snap has been slipping since its initial bounce after the ipo fell below 20 bucks last week. back above that. 20.6. up 1.3% in the premarket today. >> maybe people are saying good time to get back into snap. >> potentially. big first two-day bounce they had. coming up, pepsi is pulling some soda products from stores in philadelphia. here's today's national weather forecast from reynolds

wolf. >> good morning. let's look at that forecast. beginning in the northeast a lovely day. 37 degrees and breezy conditions can be expected. relatively dry across the south. atlanta seeing 69 degrees. the west coast, wide open. moisture coming in. shower activity in the valleys. in the mountains, more of a snow story. denver with 75 degrees. dallas, mild conditions. the southern tier of states will be on a warming trend, well above normal for this time of year. chicago, 36 degrees. bismarck with 47. 52 in seattle, 36 in chicago. a commercial break and then more "worldwide exchange."

good morning. welcome back to "worldwide exchange." yesterday, significant declines across the board. more than 1% for each of these indices. first time that happened in a long time. called lower today by 0.2%, 0.3%. dow lower by 56 points. the big mover yesterday that dragged the whole of the market down was banks. this was yesterday's performance, down 5% for the kbw's bank index. the big reason was the moves in the yield curve. the yield curve over the past couple of weeks has been one of a flattening of the yield curve. yesterday the move in yields was across the board.

yields sli s slipped. the ten-year yield paints the picture nicely. sitting just bang on 2.4%. a couple weeks ago around 2.6. that slipped significantly over the last couple of weeks. yields falling, hurting the dollar, hurting the banks, hurting the trump reflation trade. making headlines this morning, pepsico pulling 2 liter bottles and 12-pack products from grocery stores in philadelphia over the new tax on soda and sweetened drinks. the tax of 1.5 cents per ounce is imposed at the distributor level. if fully passed on to the consumers it would amount to 1.44 on a six-pack of 16 ounce bottles. pepsi says it wants to offer products and pack saj sizage si working families can afford.

still to come, the top stories and a round up of global markets. plus making canada cool again. how banking on prime minister justin trudeau's good looks has backfired for our neighbors to the north. stay tuned, you're watching "worldwide exchange" on cnbc. ...we've helped our investors stay confident for over 75 years. call us or your advisor. t. rowe price. invest with confidence. experience exciting offers on sales event is here. our most thrilling models ever. get up to $2,500 customer cash on select 2017 models for these terms. experience amazing at your lexus dealer.

good morning. futures pointing to another selloff on the street. one day after stocks post their worst losses of the year. the president rallies to his

party's healthcare plan ahead of a vote. and a life-sized justin trudeau. why diplomats are ordered to stop using cardboard cutouts of the prime minister. it's wednesday, march 22, 2017, you're watching "worldwide exchange" on cnbc. ♪ good morning. warm welcome to "worldwide exchange" on cnbc. i'm wilfred frost. >> i'm contest is a brewer in for sara eisen today. >> good morning to you. let's check in on the global market action. lower again, albeit not to the same size of the down side move we saw yesterday. yesterday over 1% of declines for all three indices you're looking at at the moment. 10 out of 11 s&p sectors were lower. banks were the laggard. financials more broadly. banks down close to 5%.

utilities was the only positive sector, up over 1%. the only sector to move to the upside. 10 out of 11 sectors otherwise negative. today we are indicated to open lower today, but much more muted down side. 31 points for the dow. 1 point for the s&p. nasdaq called lower by 4.5 points. asia lower more meaningfully than europe today because it's playing catch up to the down side. had not taken part in wall street's declines early. the japanese nikkei down 2%. hong kong down 1%. european trade is negative. albeit we saw three quarters of a percent of declines yesterday. the ftse down 1% 6. germany and france down 0.8%. >> as for the broader markets, wti saw its lows settle since november. that's even though opec is talking about cutting its output

beyond june. down 1.5% this morning. brent is off by a percent and a half. nat gas is down, which reverses its trend over the last few days. looking at treasuries. seeing the treasuries receding. the two-year, ten-year, 30-year dropping off to levels we saw pre-fed hike at end of february, beginning of march. the ten-year t note at 2.401%. as for the dollar now, we're seeing the currencies down more than half a percent yesterday. up against the euro today, as the euro falls, down against the yen and up against the pound this morning. as for gold, gold seeing the fourth positive session in a row now. this morning at 1,247. turning to today's agenda, the house sector is fing sector

existing home sales out at 10:00 a.m. eastern. as for earnings, winnebago reports before the open. after the close, pbh, and tommy hilfiger clothing. the top stocks to watch, fedex's third quarter earnings and revenue rising during the peak holiday season but profit missed forecasts hurt by higher fuel costs. the stock initially dropped on the news but shares recovered after the conference call when ceo fred smith said the company is optimistic about higher margin growth. flik reponike missed foreca increasing competition from adidas and under armour and currency headwinds. futures orders, a key industry metric, also disappointed analysts. on the conference call ceo mike parker said nike will adjust operations to meet demand. sears holdings warns it faces substantial doubt about its ability to stay in business.

earlier this year the parent of sears and kmart announced plans to close 150 stores, and just last month said it would cut costs by $1 billion. airbnb is making a big push in china. the short-term rental company plans to triple the staff in the country this year as it targets millennium consumers. the company's ceo calls china a key market for the firm to achieve global ambitions. airbnb held an event in shanghai today to launch the brand's chinese name which means welcome each other with love. so much more hospitable than airbnb. >> you also pronounced that expertly. are you a secret mandarin speaker. >> i downloaded an app. i'm working on some chinese. >> i like that. >> not just to speak it but to write it. >> the translation does have real heart-felt meaning. >> i think it should be on everybody's placard when they're an airbnb renter. >> uber can deal with

translation as well. travis kalanick in a call with reporters yesterday, arianna huffington said the possibility of him resigning has not come up but that he needs to change from a scrappy entrepreneur to more of a leader of a profitable company. they are still seeking a chief operating officer. twitter is stepping up efforts to get posts from users who advocate religious or political violence. the company says it is increasingly using software to find them instead on relying on reports from users or governments. social media companies have been under pressure to fight against online radicalization. twitter says it suspended some 377,000 accounts in the second half of last year for violations "related to the promotion of

terrorism." meal kit delivery service sun basket has hired banks for an ipo. the company is said to be working with bank of america and jeffries. an offering could value the company between $500 million and $1 billion. president trump is making a pitch for the republican sponsored healthcare bill. a house vote is set for tomorrow. the president was at a fund-raiser last night and he was really twisting some arms. he calls this vote crucial. >> the house bill ends the ob a obamacare nightmare and gives healthcare decisions back to the states and back to the american people. these are the conservative solutions we campaigned on. and these are the conservative solutions the american people asked us as a group to deliver. we are keeping our promises. >> you might think he's preaching to the choir, but in

fact he's not. there's some push back from republicans on capitol hill. but yesterday trump was in meetings in congress warning republicans they could actually lose re-election in the mid termt terms if they vote against the healthcare bill. some of these republicans, especially those in the freedom caucus are weighing out expanded entitlements like medicaid. are they going to be paying more for these entitlements? they want the language changed. could it be it is a threat to get the language changed and get what they want or are they willing to follow through, and as the president says risk voters turning against them. >> an amazing change in tone and the markets reaction to what is going on in washington over the last two days. two trading days in particular. of course when we had the james comey hearing, you saw republicans in general sticking to the republican trump related script. they didn't go at mr. combny ey terms of accusations, they were

focusing on the leaks as opposed to possible investigations against russia. the markets came away pretty relaxed. yesterday the focus on the healthcare bill, the possibility that republicans won't get behind the administration and what that means for the rest of the agenda. that really spooked markets. amazing turnaround in the space of 48 hours in terms of what the market thinks is going on. >> i was talking to a managing director yesterday who said at some point the optimism has to fall back on real facts and real data. that's going to start informing more of these opinions. >> we have to watch that. time for our top trending stories. george clooney giving a super fan the surprise of a lifetime. the actor visited pack adams, a resident in a nursing home in the uk for her 87th birthday. adams took part in the home's wish upon a star program which attempts to make residents wishes come true.

her's was to meet george clooney and it did come true. wonderful to see. >> i'm going to start a campaign for my birthday. >> look at that. >> i would also like to meet george clooney for my birthday. if we could all get on an effort. >> mr. clooney, if you're watching, another valid and deserving person of a visit. >> canadian diplomats are being ordered in the united states to stop using cardboard cutouts of justin drtrudeau to promote the country's images. the poster boards of the prime minister previously appeared at canadian events in the united states. of course they get attention. you can just imagine the attendees want to take the selfies. but cbc news s is is reporting the canadian embassy ordered a trudeau cutout last june for nearly $150. the government in canada saying we don't love this idea. yet i went on ebay this morning

because whoever thought of a ca cardboard cutout of the prime minister, not only can you at home buy the cutout of the attractive world leader but you can get it in mini version. if you live in manhattan in a small apartment, there's room for a cutout for you. >> it's not surprising that these exists, but it's surprising that the government ever wished to use them. it's clearly embarrassing and demeaning towards him to suggest that's why he's a good world leader. >> do you think that was the implication or that we are so proud of our country's leader, here, you might like to take your picture with him, and since he's not here in person -- >> the answer will be have they done it with past prime ministers. hollywood studios are pushing to offer movies in homes soon after their theatrical debuts. warner brothers asking to debut films on demand for $50 a rental 17 days after opening.

other studios found this price to be too steep and are trying to get exhibiters to make the films availability after 30 to 45 days with a $30 rental. >> it all sounds steep to me. >> if the movie theaters are willing to do that -- >> especially if they get a cut of it. which may be part of the deal. >> i like that. still want to go to the theater for the big blockbusters, but if it's just -- >> you're going to pay $50 to see a movie two months before you could see it on demand? >> maybe not 50, maybe 35. i could be lazy on a hangover on sunday. just want to watch tv. still to come, the must reads. first a look again at what markets are doing at this hour. european equities are markedly lower. a percent of declines almost. major bourses down the better part of 1%.

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hello, my name is watson. i am helping 8 million taxpayers get the largest refund they deserve. one million people can benefit from precision cancer care. 197 million passengers can fly with less turbulence. i am on my way to working with one billion people. i look forward to working with you. welcome back to "worldwide exchange." let's give you a market update. this with a picture of financials over the last week. the big sell jauf we saw off we yesterday, down the best part of 3%. over the course of the week, 4.5%. yesterday the bank's part of

this equation down almost 5%. that was the big spark for yesterday's selloff across the three major indices, more than 1% of declines for all three. why were banks selling off so much? the story of political expectation, but in particular what we've been seeing in yields, not just yesterday but over the course of the last week as well. yesterday yields slipped across the board, highlighted nicely for us by the ten-year treasury note. yields at 2.4%. a few weeks ago nearing 2.6%. the yield curve flattening as well which is not good for banks. let's touch on the dollar. the dollar slipped about 0.7% yesterday. seeing it bounce back a bit today against the euro and pound, but the gain is small. the dollar weak against the yen

today by half a percent. the net effect for the dollar today is softer. what does this mean for futures? it means they're lower but not as much as yesterday. so don't about 0.2% this morning. the dow down about 46 points in the premarket. time for our must-read stories catching the attention. my pick is in the "new york times." it's theit's the opinion page t republican healthcare bill in search of a problem. the republicans have no coherent idea or shared vision of what they want to achieve and what problem they want to solve. this is in clear contrast with president obama who led democrats and some republicans to passing a cohesive bill. by the way, covering that in depth in the process it was a messy process to try and get everybody into consensus. it didn't mean there was a perfect bill that got passed. there were a lot of problems with it. but in order to get everybody on

board, you had to make these compromises. part of the republicans going in without a cohesive vision other than just get rid of obama care, is that it's dividing now the republican coalition that it needs to pass this. >> absolutely. it will be a key factor again for markets. significant declines off the back of that yesterday. my pick is in the "wall street journal." a president's credibility. i picked this because it's getting coverage in the uk, across europe in terms of the news out of president trump's administration. the editorial board writing for the second of backing up any evidence to back up his original tweet, and the sin of pride in not admitting error, mr. trump had his spokesman repeat an unchecked tv claim that ally.

there's a credibility question around the world on what president trump claims and particularly in the uk on this uproar that they would insult british intelligence services with what we learned from the james comey hearing, very little evidence that existed. it's worth noting that in terms of how things go down as well as his tweets following the meeting with angela merkel over the weekend. approaching the top of the hour, the team is getting ready for "squawk box." becky has a look at what's coming up. good morning. >> good morning. you know, the big issue on wall street is what is happening this week. will this billing get passed in congress? that's the big issue that suddenly this idea that we don't have the vote count on the republican side to go ahead and get that healthcare reform bill passed. that's the big concern because if the healthcare reform bill goes down, we don't know what that means for tax reform and other issues down the road. you saw that yesterday with the market selloff. we will be talking about the markets today and what to expect from the capital with more.

we will talk about what they see with healthcare reform and beyond what might be happening. what might not be happening. clearly the market also take its keys from that. we have billionaire steve case who will be joining us this morning along with j.d. vance who is the youis an author. he's a new partner at revolution, mr. case's company. we will talk to them about what they see happening not only in washington but what they see happening with small businesses. how that he will reverberate throughout the xweconomy. our guest host is mark lasrey, he will talk about what he sees happening in the markets and what queues he takes from the market. and andrew is out today, we have a special guest right here. stay tuned to find out. >> is it lady gaga? >> it is not lady gaga, but

close. a fabulous, fabulous woman. i'll tell you that. >> becky, we look forward to that coming up in 11 minutes time. still to come, stocks are posting their worst day of the year yesterday. we're setting you up for the trading day ahead. chris rupkey from mufg union bank joins us to set up the trading day. stay tuned, this is "worldwide exchange" on cnbc.wh 's critical? a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter. morgan stanley

welcome back to "worldwide exchange." futures at this hour improving over the last 20 minutes a bit of green on the screen. s&p and nasdaq slightly higher. the dow expected to open slightly lower coming off the back of significant declines yesterday. what to watch today, joining us is chris rupkey from mfg union bank. good morning to you. thank you very much for joining us. clearly significant declines yesterday in the market. >> that was a shock. >> was a shock. it was a surprise.

was the yield curve the most significant factor? >> i don't know. i was raching it. it lo watching it. s&p future s and the dow opened at 9:30, as the day progressed, it sounded more like it was about obamacare. we put a reason on it later. i looked at it as the markets have been moving sideways, then it broke, went through important levels futures related and dragged it down. i don't think there's that much spillover. i have all my money on the stock market, i don't want to lose more money. >> so in terms of that, it sounds like there wasn't necessarily a real underlying data-driven reason for this selloff. in that sense this was hopefully a one-day event? >> it wasn't really mick daecon data. the economy seems fine. president trump wants to double

gdp from 2% to 4%. economists all say you can't do it. so that will just put a red flag before the bull. he will try and do it. i don't think it's the economy. i don't think -- not yet. it does call into question, i think, if you can't get through the changes in obamacare, what will happen with the cross border tax, other corporate tax cuts. they have a lot on their plate coming forward to try and push through. >> it's odd that it took president trump going to capitol hill to twist some arms on healthcare that might have been a turning point for what's happening on wall street. we all know that washington is a messy business. that there's a lot of gridlock, perhaps historic gridlock in washington. so why this? or is it just that people are starting to listen to the drum bells, fund managers surveyed by bank of america, merrill lynch saying 30% of them saying that

they think equities are overvalued. >> wow. i don't want to hear that. i was looking at the s&p 500 pe ratios back in the '90s, during the internet bubble s&p 500 pe ratio was 25. we're not there. we're not really overvalued yet. maybe in terms of expectations for what trump can do with the economy, creating 25 million jobs the next ten years, doubling gdp growth. for me as an economist, the economy looks fine in terms of everyone has a job. unemployment is very low. >> chris what does this mean for the fed? it has been a factor for the yield curve slipping over the past week or so, picked up pace yesterday. people didn't expect as many hikes that they had previously thought about. where are you now in terms of expecting for the rest of the year? >> i keep fighting for let's go four per year instead of three per year.

in a way it's not going to happen. i think -- i have three rate hikes. three to four rate hikes this year is fair. the most important thing is who will replace janet yellen february 3rd, her last day next year? that's extremely important to know what is the path of rates next year 2018? we can't get a handle on that. we don't know. will they put in someone who wants to return to the gold standard? we want to make america great again like ronald reagan in the '80s. do we want to go back to a gold standard? i don't want to throw that out seriously. we don't know who the next head of the central bank will be. >> just briefly what you are looking for for the day ahead? >> we get existing home sales. a bit interested in that. housing is key right now, especially tomorrow, new home sales. janet yellen has said she wants to see more investment which is housing starts. >> chris, thank you very much for joining us. chris rupkey of mufg union bank.

that's it for "worldwide exchange." futures recovering a bit in the last half hour. they're basically plat. "squawk box" is next.

market alert. stocks coming off the biggest one-day loss since the election. weighed down by financials. the nikkei plummeting overnight. nike shares under pressure. that will pressure the dow, since it is a dow component, which i was just remainded of. and just one day away possibly from that vote that could change or start to change the country's healthcare system. the latest on the vote count. it is wednesday, march 22, 2017. "squawk box" begins right now. ♪

>> live from new york where business never sleeps, this is "squawk box." >> good morning, everybody. welcome to "squawk box" on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and melissa lee. stocks coming off their worst one day drop since the eelection. the dow and s&p 500 had their first 1% loss since the the election. things are mixed now. the dow is down by 11. in asia, the nikkei fell by 2%. reports of a failed north korea missile test for the drop. the hang seng fell by 1%. and the shanghai down by a half