. good morning. data in focus. three key economic reports dominate the agenda and could move the markets. lacker stepping down. richmond fed president resigning over his involvement over the leak of market-sensitive information. and the xi/trump summit. a live report from beijing ahead of this week's crucial meeting. it's april 5, 2017. "worldwide exchange" begins right now. ♪ good morning. welcome to "worldwide exchange." i'm sara eisen. >> i'm wilfred frost.

good morning to you from me as well. >> good to be back. >> great to have you back. >> a little wedding weekend in san diego. checking in on markets after a mini rally yesterday sent the dow higher by 39 points. oil firmed up. >> a rally is jen roycgenerous. >> mini rally i said. >> a fractional day. >> we have mixed signals on the futures market. dow futures up less than 8 points. s&p down 1. nasdaq futures down 1 as well. as for the ten-year treasury note yield, hovering around the 2.35 level this morning. inching up to 2.36 on the ten-year. do have some potentially market moving information today including adp read on private sector jobs. ahead of the big jobs report on friday and the fed minutes. more on the markets in a moment.

>> rex tillerson will a terse response to north korea launching a mittal. north korea launched yet another intermediate range ballistic missile. the u.s. has spoken enough about north korea. we have no further comment. >> the question is can anything be achieved on that topic between xi and trump. much harder to make ground because of nationalistic issues back home for each person than on trade and things like that. >> i was going to say it has to become front and center in terms

of the priorities over trade and currency. you have to think it's a more ur ye urgent situation now. >> it's more urgent but not pressing in terms of what either party hopes to achieve. it's their first meeting. are they really going to try to tackle the most complicated thing that can't be solved overnight? i'm not saying reducing a tariff is likely to be done on the spot, but it could be. solving the question of north korea will take longer. they could have early discussions but it will take many more summits to reach conclusion. economic data out overnight. japanese services pmi hitting a 19-month high. asian markets higher off the back of that. shanghai and hong kong particularly strong. they were closed the last couple of days for international holiday. shanghai up 1.5%. we got some fresh data out of europe. uk march services pmi coming in at 55. nicely above consensus. it comes off the back of

disappointing manufacturing and construction pmi the last two days. as we know, services pmi the most important one for the uk. 68% of the ik econouk economy. eurozone pmi at 56. expected at 56.5. the composite pmi, factoring in that manufacturing number for the week, 56.4, slightly below the flash reading. european markets, just to see, essentially flat today. germany a bit soft. comes off decent gains yesterday. that was thanks in part to oil prices which are back on the rise. going back to early march levels for oil. strong again this morning. wti crude, 51.57, up a percent. it's wednesday. we get that government inventory data later this morning. brent hovering just below $55 a barrel. up more than 1%. as for the u.s. dollar, sort of on the back burner lately. let's show you where we stand this morning.

it's unchanged against the euro, 1.0671. the pound is stronger against the dollar. the dollar stronger against the yen. looking for direction there at 110.79. we also put in the chinese currency. china strong in terms of the equity market overnight. gold has been stronger over the last three sessions on the back of dollar weakness. a bit weaker this morning. fractionally down. to today's agenda on wall street a trio of economic reports. the adp payrolls report out at 8:15 a.m. eastern. followed by the march ism services index at 10:00, and the fed minutes at 2:00 president. dallas fed president is speaking this evening. as for the earnings, monsanto and walgreens report before the opening. bed bath & beyond and yum china out after the close.

in washington right now, democratic senator jeff merkley is holding the floor staging an all-night protest against judge gorsuch's supreme court nomination. he began speaking around 7:00 p.m. last night and says he will continue as long as he is able to. the full senate will debate gorsuch's nomination today and it appear there's will be a filibuster showdown tomorrow. republican leader mitch mcconnell is threatening to use the nuclear option to force an up or down vote without the traditional 60 votes needed to end the debate. a lot of posturing here. it is expected to go that route. >> a lot of posturing. there is a route for them to get through. i was saying earlier in the week this doesn't have as much impact on markets as some other issues that may or may not pass through congress, but it's another reminder of the difficulty that the president is having getting his agenda through. >> everything is a battle. >> despite not celebrating the gains we saw yesterday and

softening the praise of them, we still have seen resilience despite this political pressure. that less excitement about what trump can get through congress was priced back when we had the healthcare bill. i think this has less focus for markets at least given that it doesn't have direct impact itself. >> you had another white house meeting of ceos where the president spoke and talked to them. vice president pence saying that this president has made business their best friend talking about things like tax cuts, infrastructure spending, things that business leaders wanted to continue to hear. >> absolutely. we also got jamie dimon's annual shareholder letter, comments from him and brian moynihan yesterday. the overall takeaway going into the detailed weeds of it all was positive, more friendly business environment to come. in terms of deregulation comments, specifically in jamie dimon's letter, in washington there was a couple of specific points that he made. both of those he seemed to

suggest didn't need laws to go through congress to be achieved. that's something you have to keep -- >> they could all come through the administration? executive branch? >> in appointments and regulation tone from the top of the regulators as opposed to needing a bill to roll back dodd-frank which is never what these ceos are arguing for. moving on to an abrupt resignation at the federal reserve. jeffrey lacker stepping down over an involvement of a leak of information. landon has that story. >> that's right. richmond fed president jeffrey lacker announcing his resignation yesterday effective immediately saying he broke fed rules by discussing sensitive information with an analyst regarding the central bank's plans for economic stimulus in his letter of resignation he admitted to speaking to an analyst at medley global advisers on october 2, 2012 regarding the fed's september meting. the next day the medley analyst wrote a story including the

confidential information. lacker was interviewed by the fed's general counsel late their year and then by the fbi in 2015. on january 10th of this year lacker announced he would be retiring in october. in a statement he said due to the highly confidential and sensitive nature of this information i should have declined to comment and perhaps have ended the phone call. instead i did not refuse or express my inability to comment and the interview continued. he also says i regret in this instance i crossed the line to confirming information that should have remained confidential. in a separate statement last night, the fed says it is committed to maintaining the security of confidential fomc information. earlier this morning, dennis lockhart who served with lacker told cnbc the incident was regrettable.

it could very well be inadvertent. a mind lapse where you're not thinking about the timing. this was a few days before the minutes were to come out. so the leak, as i recall the details, involved disclosing information in advance of the minutes which, of course, is a no-no. you know, jeff has been a -- for me, a valued colleague for many years. i just think this is a regrettable set of circumstances. >> the richmond fed says it is looking for a replacement in the interim the first vice president will serve as acting president. guys, back over to you. >> strange story. that was a wow headline yesterday. landon, thank you. >> thanks. no real move in markets on the back of this, but a sign that this fed will change a lot in its shape. >> a lot of appointments. >> this is a regional fed president, it's not appointed by the president, but he has some picks, he was a noted hawk,

lacker of richmond. so in a year or two this fed will be very different. speaking of departures of the fed, today is federal reserve governor dan tarullo's last day in office. he called the volcker rule too complicat complicated. he also suggested annual bank stress tests may not need a qualitative review. he was the main guy for bank regulation on the federal reserve board. a programming note, steve liesman will talk to him exclusive exclusively, "squawk box" 8:15 a.m. eastern. >> i don't think we should underplay this. this is significant. the banks, even though tarullo is outgoing, the banks will be pleased to hear this from someone who had been traditionally been their critic, seen as the enforcer of these rules. the volcker rule such a political one. they all argued, the banks, that they don't want to bring back prop trading but it's stopping their ability to market make to

act with those security positions. if ever they have to take those positions on the balance sheet for the short-term, it's made it so much more prohibitively expensive and complicated to do that, to make markets for other clients because of the way the volcker rule is worded to prevent them trading off their own books. the volcker rule, because of its politicalization is always seen as something hard to repeal. for someone like dan tarullo to say that is big. >> because he's been pro regulation. >> overall the tone of that speech was not backing the banks. he said clear from the levels of profits that the banks have made in the last couple of years, the pace of loan growth, that overall this regulation has not tornadoed the banks. >> as the trump administration has suggested. >> isn't it seen as, sort of, a protest of the trump administration's policies to deregulate the banking sect their he's stepping down?

the baby that he helped to create? >> we need steve liesman to push him on that, which i have no doubt he will do. absolutely that's seen as one of the reasons why he decided to step down. that interview at 8:15 a.m. on "squawk box." >> shares of panera skyrocketing on news of a possible sale. reports are saying that jab holdings, the owner of caribou coffee, also who bought kee green mountain are in talks to acquire panera. the stock up 11% pre-market. >> you like panera, don't you? >> in high school i used to have the nickname panera sara because i would eat bread bowls with broccoli cheddar soup. mcdonald's says the u.s. marketer is leaving the company as part of the management shakeup. two other ek txecutives will al be leaving.

proxy adviser glass lewis is recommending that wells fargo share holders vote against six directors in protest of improper sales practices. investors will vote on the elections at an annual meeting later this month vrnlgts that's on t . >> that's on the 24th of april. we expect the separate board review into the sales scandal to come out before the 24th of april. a lot of focus on them. other issues in the last couple of weeks. some related to sales practice scandals, some not. so far the focus has been on the executive team. whether that was the former co, john stumpfer or executives underneath them. the board have significant questions to answer to as well. this latest bit of news highlights that a lot of them will come under pressure on the 24th of april. still to come, the trump/xi summit. we'll have a live report from beijing.

good morning. welcome back to "worldwide exchange." let's get you up to speed with the market action. yesterday we had slight gains. the dow up about 0.2%. the s&p and nasdaq up even less than that. today, essentially flat in the premarket. a bit of red. a bit of green. in terms of sector performance, real estate the worst performing sector. energy the best. oil gained around about 2%. oil is up again this morning if we have a look at it. up about 1 %. it's coming. there it is. 1.25% for wti. 51.6.

brent just shy of $55. sara? >> as we mentioned earlier, trade, north korea, jobs all key topics we expect president trump and xi jinping to touch when they come face-to-face tomorrow. eunice yoon is live from beijing on what to watch. good morning. >> good morning. ahead of the meeting, beijing is sending a message to washington through its media that the u.s./china relationship is a win-win. the peoples daily on its social media account said xi jinping and trump will shake hands. cooperation is the right choice. the china daily ran a headline saying xi and trump, their meeting can chart a course for constructive ties. now, the white house has been critical of china as well as trade practices. so this is seen as a way for the chinese to stress the positive aspects of the relationship. and it's actually seen as quite a big significant change. if you remember when trump won

the election, since then there's been several editorials in the chinese press which have been critical of the idea of a trade war with the united states. we're seeing this as a way that potentially the chinese are a bit concerned going into this meeting that it could be much more hostile. guys? >> in terms of the various topics on the agenda, north korea will be up there, one-china policy. we know those nationalistic chinese issues are hard to get president xi to move on. in terms of trade itself, the terms of trade, whether it's unfair on the u.s., is that something that the chinese have started to change their position on? is it something that is possible president trump can exit this meeting with a sort of victory on and announce that to the domestic u.s. media? >> well, the chinese have long said that they would be willing to negotiate on economic issues.

they have been bringing up north korea as well as a potential issue they could negotiate on. what we will see at this meeting is chinese officials trying to get a sense of what trump is all about. chinese officials here are concerned about having a destabilization this year. they want to make sure this year everything goes smoothly. because their main concern is a political party congress at the end of the year, when we will see the leadership change and the next leaders installed for the next five years. so president xi's main concern now is to make sure that nothing destablizes china. so he will to the want to see a trade war with the united states. in that case there could be some wiggle room, but at the same time president trump needs to be cautious, it's a tricky game when dealing with president xi because president xi will not want to be seen as being bullied by america because that could potentially influence the way he

is viewed within this country. >> i was going to ask you sort of a sentiment question back home. you started with how the government and the editorials and the state-run media is framing this. what about people? how do they see president trump? >> well, what's interesting is on social media there's almost not a peep because the chinese government doesn't want there to be dissenting voices about this positive image and positive illustration of the u.s./china relationship. however if you talk to people, most people are wondering what will happen. they're concerned. i talked to some people in the government, they're concerned that president trump could potentially embarrass president xi andifications could have in china because president xi has fashioned himself as a man who is defending china against western influences and western interests. so, in order to maintain that

image he has to be seen going into the talks as being just as strong if not stronger than president trump. >> eunice, thank you very much for that. eunice yoon for us live from beijing. looking forward to the photo-op and the handshakes. >> very important. >> president xi, of course, always appears to be very, very tall in photo-opes e photo-ops asia. he's 5'115'11", and president t will love that posturing over him. >> everybody watching this. when we come back, a round up of the top news out of washington. and terms of a multimillion dollar deal between amazon and the nfl.

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welcome back. to washington news, there's a twist in the investigation of whether trump officials worked with russia to influence the election. a former obama official is being accused of leaking names. tracie potts joins us live from washington. >> reporter: this is all about what's called unmasking, when a government official asks the intelligence community to name, identify someone in a classified report so they can get a better sense of what the report was really all about. that is what susan rice is accused of doing. she says she did nothing wrong. >> i leaked nothing to nobody. and never have.

never would. >> reporter: former obama national security adviser susan rice admits it's common to request names of americans caught up in surveillance, but she denied she leaked or requested names of any trump transition officials for political purposes. she rejects president trump's claim that his phones were wiretapped. >> that's absolutely false. >> reporter: rice now swept up in the investigation of russia's influence in the election. >> i believe susan rice abused this system and she did it for political purposes. >> it's something that warrants oversight and warrants her coming in and testifying. >> reporter: the president retweeted an article about it. democrats insist the new focus on susan rice is a distraction. >> this is another wild goose chase that the republicans are sending us on and the president in particular. >> reporter: the latest development as two congressional investigations continue. and, of course, the fbi, they're doing their own investigation.

and we've learned from the financial times reporting that the fbi is actually setting up a completely separate unit just to deal with these questions about russia. >> tracie potts live for us in washington. still to come, the top stories and a round up of the global market picture. plus recycle while you run. reebok's plans to go green. stay tuned, "worldwide exchange" is back in a couple minutes. ready to help if you need it. it's like having the power of a trading floor, wherever you are. it's your trade. e*trade

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mixed markets. stocks search for direction ahead of three key economic reports. panera shares jumping on news that jab holdings is in advance to buy the chain. and the top trending stories including why a protest against a pepsi ad is sparking major backlash. it's wednesday, april 5, 2017, you're watching "worldwide exchange" on cnbc. ♪ great song. good morning. welcome to "worldwide exchange" on cnbc. i'm sara eisen. >> i'm wilfred frost. good morning to you from me as well. let's get straight to the global market action this morning. coming off the back of a day of fractional gains. 0.2% for the dow, less than that for the s&p and nasdaq. slight gains this morning. we gained a fraction in the last half hour or so. all three indices expected to open in positive territory. the dow opening ahead by 24

points. oil prices gained yesterday 2%. oil prices up again this morning. asia, a strong session. some decent japanese pmi data. but for the most part shanghai playing a bit of catch up over the last couple of days. up a percent and a half this morning. >> announcement of a new economic zone outside of beijing seems to be fuming excie i fuel over there. european trade is mixed it was a decent session yesterday. better than the u.s. session, up about 0.3%. the ftse 100 up more than that. some decent services pmi for the uk today offsetting disappointing construction and manufacturing pmi data the prior two days. either way, not a blowout session across europe. for the most part positive. we also have the french presidential television debate where the left-wing candidate

mr. melenchon did the best. either way nothing really changing in the odds from various bookmakers for who is likely to win. >> euro not moving on that he's seen as a populist as well. >> yes. very far-left. this one included more of the candidates. so it was harder to get a clear leader. very long as well. about four hours. >> he also lives off a diet of quinoa. >> i did not know that. good knowledge. >> very important fact. as for the broader markets, oil prices are stronger. that could be fueling some early gains in futures again this morning. wti crude, 51.62. at a one-month high on oil prices. brent just below $55 a barrel. nat das jugas just ticking posi. the ten-year treasury note yield, a little bit higher ahead of the minutes from last month's fed meeting.

ten-year yield, 2.36. dollar not moving a whole lot. the euro little changed after the french presidential debate. the euro flat at 1.0664. the dollar is stronger against the pound and yen. gold prices quickly, let's give you a check. three straight days of gains for gold. today it is weaker by 0.3%. >> on the agenda, a trio of economic reports. adp private payrolls report out at 8:15 a.m. eastern followed by the march ism services index at 10:00 a. the minutes from the fed meeting at 2:00 p.m. dallas fed president rob kaplan is speaking this evening. and don't miss steve liesman's interview with dan tarullo at 8:15 a.m. joining us to talk about the wall street day ahead is michael

purvis. good morning to you. >> good to be here. >> next catalyst, are we looking to economic data or continually focused on the odds of fiscal policy action out of washington? >> i think it's -- i think the markets are more resigned that fiscal policy will be just a very slow motion poll pro social security here. that's one reason why you are seeing such low realized and volatility on the screen. we're talking about market movements a few basis points a day. >> but holding the gains. >> that gets to the core premise. as you search for a bear case on u.s. equities, we expanded some after the trump election. if a bear were to take the view that every trump measure will get pushed back indefinitely, that does not spell a recipe for higher volatility in the

markets. this process may be one that unfolds in a slow way. of course, if the economic data is decent enough, getting jobs on friday. if that's decent enough to support that, it may well mean the s&p continues to consolidate, and the real excitement is other equity markets and asset classes. >> like which other equity markets? >> emrnerging market equities, you're seeing the same velocity of flows into emerging market equities that you saw into the u.s. best house on the block back after the election there. simply based, if you take the view that global synchronized growth is not just a blip but something that may have legs, there's no question that on a relative value basis that's where you need to be, assuming the dollar and the macro stories for the various markets hold. >> when president trump first won the election last fall, there was a consensus view that it would be bad for emerging

markets. that some trade tensions including most notably with china would hurt the region and slow growth. has that completely disappeared ahead of this big meeting tomorrow with president xi? >> it's in the backgrounds of everyone's minds, is there another foot to fall here, will trade barriers be erektded. so far you have not seen that. the market takes some comfort that the goldman sachs wing of the white house will be solving for some sort of harmonious situation on trade. let's call it. so for the moment i thinks that one of those political risk factors that is not going to be -- doesn't seem to be looming there. not all emerging markets are created equal. different countries will react differently if that were to come in. >> thoughts on the dollar? for the first quarter and for the month of march we saw the dollar slip. it kind of decoupled from the rest of the trump reflation

trade. has that started to pick back up now? >> i continue to be in the camp that the dollar is at the best going to be nonstrong. in other words, sort of contained where it is. there's increasingly likely case where it will be lower. that case happens if you take the condition that nominal interest rates in the u.s. will be contained, perhaps in part by foreign qe, which is still on. so we're not going to see much higher nominal interest rates. but the inflation, whether it's actual or expected inflation still creeps higher. that depresses real rates on the long-term. that keeps the dxy or a lot of dollar pairs in check, and quite possibly lower. >> so we keep hearing this argument that stocks are expensive, above historical valuations, what about versus bonds? >> right. >> i wonder if that's keeping stocks supported here. while they may be above average

valued, they're still cheaper than bonds. >> you go back to the last few years, that's a key pillar of the equity market valuation, which is that you have to view it in the context of where risk-free interest rates are. the interesting question i'm grappling with, the markets are going to increasingly grapple with in the coming quarter, how arthritic is the bond market? in other words, if we get an economic slowdown, if we get a risk-off shock, can the bond market rally aggressively, get the yields back to the point where you are almost forced into buying equities because the dividend yield on the equity is so much higher than the bond market. if the bond market is not capable of doing that, as it has in the past because inflation is higher, people are not as interested in buying ten-year treasury yields at 1.5% yields like they were last summer, that's going to be where you get

more stagflationary dynamic. >> arthritic bond market. >> nice word there. michael purves thanks for joining us. the 11 candidates in france another presidential race faced off in a tv debate last night, less than three weeks before the first round of voting begins. centrist candidate emmanuel macron clashed with his far-right rival marine le pen over plans to scrap the euro accusing her of seeking an economic war with france's neighbors. he will pen and francois fillon came under fire for corruption investigations against them. the french head to the polls on april 20th with a runoff on may 7th. the far-left candidate, jean-luc melenchon was reported as the person who won it. you were mentioning the man who lives on a quinoa diet, that's mr. macron, not mr. melenchon.

>> excuse me. >> he is the thinner candidate. >> what is interesting here, this is widely seen as a barometer for populist voting, that was the story of 2016. both far-left and far-right gaining steam and challenging the center. that's going to be the key. >> yes. i think the key is -- it's so divided for the first round. no one will get 50% for that. the key is to see in the second round how much, say, some of the far-left candidates wo may get, say, 15% of the first round, how much those supporters are willing to then vote for a centrist keycandidate or abstain the second round. that's the swing factor that may allow marine le pen to win. if she has high turnout in the second round from her own supporters, will that offset a broader support for the centrist candidate who may have a lower turnout. much like brexit and president

trump's candidacy, it's about turning out high levels of key support. >> the reason the market is paying close attention to this, she campaigned against the you're rov euro. let's move on to stocks to watch. shares of panera skyrocketing on news of a possible sales. reports say jab holdings, the owner of caribou coffee is in talks to acquire the bakery chain. mcdonald's top u.s. marketer is leaving the company as part of a management shakeup two other executives are also leaving. the head of the u.s. menu and the head of u.s. digital. proxy adviser glass lewis is recommending wells fargo shareholders vote against six directors. investors will vote on the election of dreshgts irectors o 24th in florida.

chemchina is winning u.s. anti-trurstrust approval to buy syngenta. lockheed martin scoring pentagon approval for a $27 billion helicopter program. the company will begin production of 200 new heavy cargo helicopters for u.s. marines with an average cost of $87 million each. brinker international announcing the resignation of its cfo, tom edwards. time for our top trending stories. amazon will replace twitter for the home of the nfl thursday night gamesgames. this is a notable difference from twitter which broadcast them for free last season. amazon beat out twitter, facebook and youtube and paid 0 $50 million. the "wall street journal" reported that am sop had explored creating a premium

sports package as an add-on option for prime members. big story. an ongoing trend. >> streaming sports. >> for these giant internet companies to take on the broadcasters, just bid up the prices for what is essentially the most quality content that you can have. >> yeah. changing viewer habits as well. this one went viral. kendall swren kendall jenner's new pepsi ad sparking backlash. she's seen in a photo shoot, then seeing protesters, joining the protest and offering a pepsi to a police officer, who then takes it. pepsi responding with the statement saying the creative showcases a moment of unity and a point where multiple story lines converge in the final advert. it depicts various groups of people embracing a spontaneous

moment and showcasing pepsi's brand rallying cry to live for now in an exploration of what that truly means, to live life unbounded, unfiltered and uninhibit by the uninhibited. they got blasted for suggesting that pepsi solves these big society problems. and the model inside -- >> tedious press release that we just read out, it sort of is yawning. >> doesn't get at it. >> i saw this trending last night. i clicked on a copy of the ad to watch on youtube. i literally made it 40 seconds through. i couldn't watch it. >> very long. >> how tedious. >> there's a 30-second spot running somewhere. >> not going down well. reebok introducing plant-based sustainable shoes. the cotton and corn initiative focus on shoes made from growing material that can be used as

compost after they have been worn out. the ultimate goal is to use the come post as the soil to grow the next range of shoes. >> sort of a growing trend. >> making shoes out of compost? >> not compost, but recyclable goods. they want to speak to the new generation of millennials who are more concerned about what goes into the shoes, how sustainable their companies are. reebok is behind. >> inventive idea given that stinky shoes are not things that can be recycled favorably. >> i don't think they stink. >> otherwise no one wants to use someone else's shoes at the end. this is some way to attempt to recycle it. >> you guys say compost. >> compost. >> compost. >> there we go. >> do they compost in the uk? >> they have composts. i'm not a gardener myself by trade. >> you just have garbage. >> i know that's how people pronounce it. compost. >> compost. >> should be the new one rather

than tomato and tomato. moving on, coming up, the must-reads read in various different accents. as we head to break, a look at where the european markets are trading. a little bit of red for germany. green for the uk and france. thanks for loading, sweetie. ...oh, burnt-on gravy? ...gotta rinse that. nope. no way. nada. really? dish issues? throw it all in. new cascade platinum powers through... even burnt-on gravy.

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exchange." time for our must reads. my pick is in "the financial times." domestic concerns matter for both trump and xi in the florida pleating. kevin rudd, the former prime minister of australia, knows both countries well. in terms of how it will be reading on both sides of the world in terms of -- both sides of the pacific. the former prime minister writing it may be possible for example for both parties to reach an agreement on the principle of quequivalence on chinese and american tariff and non-tariff barriers and investment access assuming the u.s. is interested in a bilater bilateral investment treaty by another name. a mechanism for managing down tensions on that south china sea is not impossible either.

mr. xi will lose so much face back home if he gives in, where trades and tariffs, that may be something they can achieve. >> north korea goes to the front addre as the issue now. >> no time for mine, but it's defending congress's actions on isp's and privacy. still to come, adp, jobs report and minutes from the fed meeting top the market agenda. we'll get you ready for the trading day ahead. bill stone is here, pnc asset management. stay tuned, you're watching "worldwide exchange" on cnbc. mom gets breakfast in bed... you get to do the dishes.

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welcome back to "worldwide exchange." futures at this hour. slightly higher. 21 points higher for the dow. coming off the back of slight gapes yesterday as well. with us now, bill stone, chief investment strategist at pnc

asset management group. good morning to you. >> good morning. >> i suppose again we're seeing quite a lot of resilience in the markets. despite that fluctuation we saw in march, march was rezil yept resilient as well. >> we always talk about the hard versus soft data, we have not seen the hard data come through strong. pmis this morning, though they were down a bit from the earlier reading, still very good in europe. it's a global in the u.s. and that's been good. that's held it up saying we feel like we'll get the hard data eventually. >> that was the story of the first quarter. does that continue into the second quarter? is the data good enough to keep globally things going at multi-year highs? >> i think we'll get the data finally in terms of the hard data. you will see that the u.s. will be probably weak here when we

finally get the first quarter numbers. something around 1%. we think the u.s. ends up at 2.3% for the year in terms of growth. that's just one good example. >> international summits, international meetings between leaders go, is this week's meeting between the chinese president and president trump one of the most important for markets? can it have a swing factor? i think the markets are assuming it goes fairly well. that they don't, i guess, come to blows or something. he doesn't come out and declare them a currency manipulator right away. that won't happen. it is important in the sense that it helps reduce the tension in the market, those worries that we came into his presidency with about emerging markets, about all the particularly china in terms of trade. that will be important. >> what's the sector strategy right now after we've had such strong run ups in groups that have been cyclical, like banks, industrials on the trump rally. but have slowed down recently.

do you load back up on those? >> we like those. we like the financials. we do think interest rates will move up. we think a good defensive play against yields moving up again. we like the small caps and just added to our position in mid caps. story is acceleration somewhat in the u.s. economy. and we think we get at least a corporate tax cut. maybe get tax reform s, but at least a corporate tax cut. >> within the financials, is that more broad preference you have for the smaller caps and mid caps applying in terms of the smaller banks versus the bigger banks? >> most of that was really large caps in terms of the financials any way. the small and mid was just a general look at small and mid overall. you mentioned corporate tax cuts is the expectation. is that good enough for this market that rallied so far after the election largely on hopes of tax reform?

>> i think most of it came on fundamentals. i use the pmi data. we had one of the biggest moves up in pmi in a short period since the election. it's not a statement on the election but statement on time. that was also echoed in a lot of international markets. as long as we get some of the actual hard data coming through and you're likely to see earnings look good this year if not very good. we have at least for the first time in a while, an upside possibility to earnings for the year. >> finally, just a quick question on gold. positive on gold? >> i'm like the worst person to ask about gold in the sense that i usually say i prefer other assets just because i'd rather they have growing earnings. for gold, it depends on your view of the dollar. it's the anti-dollar. with the dollar strong, usually gold is not so good lately. >> fair enough, bill, thank you very much for joining us.

that's it for "worldwide exchange." thanks for joining us. "squawk box" is up next. mom gets breakfast in bed... you get to do the dishes. bring 'em on. dawn ultra has 3 times more grease-cleaning power. a drop of dawn and grease is gone.

good morning. jobs in focus. we'll get hiring reports. you know we do linkedin now. it's like the battle of linkedin and adp. should give us an idea about the friday big government number. a lot of ways we could have said this. the lacker leak. lacker the leaker. the richmond fed president, this was a bombshell yesterday. stepping down after revealing that he shared market sensitive information. more details on that story. and stocks to watch, panera shares skyrocketing on takeover

talk. seems like a lot of carbs. it's wednesday, april 5, 2017. "squawk box" begins ri s right . ♪ live from new york where business never sleeps, this is "squawk box." >> got another brand. 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. yesterday markets actually pulled off a rebound. and ended three days of declines with an up day. this morning looks like things are right now a little bit mixed. dow futures up by 17 points. nasdaq slightly positive. the s&p is slightly weaker. overnight in asia, the nikkei was up by a quarter percent. the hang seng was up by a half percent. the shanghai was up by 1.5%. already this morning in europe you are seeing some