. good morning. markets now, futuring pointing to a lower open on wall street after stocks see their biggest day in a month. bank of america, goldman sachs, j & j, ibm out with quarterly results today. and donald trump says buying american is a snap. more on the president's big jobs push today. it's tuesday, april 18, 2017, "worldwide exchange" begins right now. ♪ good morning. welcome to "worldwide exchange" on cnbc. i'm sara eisen. >> i'm wilfred frost. good morning to you from me as

well. >> happy tax day. >> there we go. >> april 18th. make sure to file your taxes or get the extension. >> an efficient person already helped me out. part of my move here. one-year of tax help. >> you have to do that. >> next year i don't have a clue. >> checking in on global markets this morning. after a strong rally yesterday in some soft action overnight, it looks like we're under a little pressure this morning. dow futures down about 31 points. s&p down about 4. nasdaq down 7. low volumes during the trading day yesterday, but broad-based rally led by groups like the financials and the industrials. as for the ten-year treasury note yield, it's been the center of the action lately. we've seen lower yields. they ticked up a bit yesterday but down this morning. 2.23 is the yield on the ten-year. so there continues to be demand for u.s. government debt. whether that is driving the demand for stocks, i did hear

yesterday that as yields lower, it makes stocks as an alternative a must buy. >> we'll talk about mr. mnuchin's comments in a minute. on the yeed poiield point, yest 2.19 was the low we hid. banks led the charge yesterday. banks up shy of 2%. in light of yields moving lower that was a surprise. in part a reaction to the eps beats we saw on friday. it was against the move in yields, which was interesting. comes down to what mr. mnuchin was saying, but also something to keep an eye on ahead of bank of america and goldman sachs reporting today. asian equities for the most part soft today. you have japan a bit higher. hong kong coming back from a two-day holiday friday and monday lower. as was australia who also had friday and monday off. similar story for europe, which was closed for the easter

weekend for two days as well. coming back from the weekend markedly red across the screen. not too significant the red across the screen in europe. not as much as hong kong which will be up in a moment. red across the screen in europe in part down more than 1 % for most of those indices. around 1% for most of those indices. in part relating to the french election. the latest polls, mr. macron, the center-left candidate. he will pen, 23%, fillon and melenchon just behind them at 20%. on the french election, here's the spread between the french and the german ten-year bond yield, it's around 70 basis points. that's the longer-term chart over five years. it is at igts highest level sine 2012, when mario draghi gave his comments, but significantly

lower than the 2012 level, which got to about -- >> this is risky france versus safe haven germany. >> that's right. >> that spread has widened significantly throughout the course of the start of this year. at the high effort level since 2012 but lower than the eurozone crisis moments. >> the confusing thing for investors is the polls have stayed remarkably stable. everyone with the 20%, 23% level, it's hard to read how accurate the polls will be with turnout and this added complication that there will be two rounds of voting with a potential runoff. >> definite runoff. nobody will get hit 50%. the surprise is that very fact. the fact that there are four candidates that could win this. >> two on opposite ends of the spectrum idealically. >> traditionally two with an occasional populist third, the fact that there's four, it makes it hard to call. >> the broader market picture, let's show you what's happening with oil.

the biggest commodity on the move is iron ore, that's pressuring some mining stocks overnight in asia. oil under pressure as well, down 0.4%. 52.45 is wti crude. brent is down 0.3% at 55.19. natural gas down another half percent. as for the currency market right now, did see some dollar moves off of treasury secretary mnuchin's comments playing down president trump's desire for a weaker u.s. dollar. that helped the dollar come off the lows of the session. it's stronger against the yen barely at 108.90. it's weaker against the euro at 106.54. a bit stronger against the pound at 125.49. nothing major in terms of the moves in 4x this morning. gold has been one of the favorite safe havens in the last few sessions, along with treasuries and the japanese yen. coming off $5.40 an ounce. >> the s&p coming off the best

day since march thanks to comments from steven mnuchin made about tax reform. he said it is highly aggressive to not realistic for a new tax bill to reach the president's desk by august. mnuchin putting part of the blame on the healthcare debate. still he expects tax reform to happen sometime this year. mr. mnuchin also said the administration has not ruled out a border adjustment tax, but said there may be other ways to raise $1 trillion without one. we'll hear more from the treasury secretary later today when he speaks at the imf world bank meetings in washington. very interesting interview with some key comments. clearly they gave a big spark to the market, we got gains off the back of it. he confirmed we won't have tax reform by august. the market already got there. that wasn't a surprise. he also said essentially, if you summarize the article, he doesn't care about the deficit effects of a tax cut. that's what the market really

rallied off. they'll deliver some form of tax cut either way. i see that as a negative. it was kind of an admission they don't have a magic policy to spur structural growth, all they can do is a cyclical boost traditional, simple tax cut. nothing special in that. >> also the alternative to the border border adjustment tax to raise trillions of dollars that sort of lit a fire under stocks. this idea that you don't have to get the border adjustment tax. it did feel like trump was leaning towards it. nothing concrete on this. we have no idea which way the white house is leaning on this. but that would be considered one of those taxes for the middle class, the consumer and a lot of the nation's retailers. >> albeit his source of funds outside the border adjustment tax was higher growth. he said economic growth creates revenues when you calculate it. he said lots of different calculations, i'm pointing out the magnitude of what economic growth does.

that's not new. whereas it was taken by the market as a short-term boost because it says we will deliver tax cuts, whether deficit neutral or not, it is a worrying longer term trend, because it suggests no new policies that this administration will be able to deliver. >> and that we might see higher deficits. president trump is headed to wisconsin today to push his buy american hire american theme. the president will be visiting the headquarters of snap-on. according to white house officials, president trump will sign an executive order calling for a crackdown on guest worker visas. specifically the order is expected to target the h1b visa program which allows 80,000 foreign workers in the u.s. each year to take high skilled jobs with big firms. the technology industry has been lobbying to expand this program to get the best talent from overseas, and others say it

increases outsourcing. so this puts immigration and jobs together in one executive order. we need to understand what's in there. tracie potts will join us in a bit. in earnings, united continental reporting a beat. the company addressed the passenger who was forcibly removed from one of its flights last week. that did not impact the financials. landon dowdy joins us with more. >> good morning. shares of united up more than 1% in early trading today following the better than expected results. the airline posting earnings of 41 cents a share compared to the 38 cents analysts were expecting on revenue of 8.$8.42 billion. despite beating first quarter expectations, united did not take any time for a victory lap. the airline operator has been at the center of apassenger, dr. dd dao, being dragged off an overbooked united plane last week. and munoz issuing another

apology saying we need to do a much better job serving our customers. this incident la behas been a humbling experience and i take full responsibility. this will be a watershed moment for our company. traffic and capacity for the first quarter up 2%. united says they expect passenger revenue to be up between 1 % and 3% for the second quarter. investors will be listening for more comments regarding last week's incident and any impact it may have on bookings when the firm holds its earnings call at 10:30 a.m. eastern today. >> amazing to see the resilience in the stock price, nearly wiping out all of the losses from last week. >> that's right. down about 3%, now up about 1%. we'll see what happens today on the call. shares of netflix rising following the company's earnings report. the company beat on the bottom line as content costs were lower than expected. revenue matched consensus.

subscriber growth slowed in the first quarter, missing consensus. shares briefly dipped after hours when the company offered weak earnings guidance for the current quarter. the netflix ceo addressed the growth concerns on the earnings call. >> i don't see any fixed wall. of course every incremental 10 million is harder than the last 10 million. but our content keeps getting better. when you look at the last five years, everyone is worried every quarter about saturation in the u.s. you know, we just continue to grow. >> let's talk more about netf x netflix's quarter. let's have porter bibb join us. thank you very much for joining us. initially the shares fell, and then ended up about a percent or so. one takeaway is the ongoing seasonality of their subscriber growth. albeit closing in on 100 million. do you see that as a net positive or as a concern? >> netflix continues to defy

gravity. and it's all based on content right now. they did not get the subscriber growth they were expected to generate in the first quarter. they probably will in the second quarter because they have two of their biggest all-time hits, "house "house of cards" and ora the new black returning for new seasons. but the fact is that reed hastings will spend almost $7 billion this year, this calendar year on content. another billion on marketing that content. he's trying to alleviate the fact that they are hitting the ceiling in terms of growth in the u.s. right now. actually amazon prime has more subscribers than netflix does. and zero return because you sign up for amazon on a yearly basis. there's a significant turn fact their is bothering the management at netflix.

>> it seems investors are willing to give them carte blanche to spend that money, as long as they can bring the subscriber growth. international numbers for this quarter lower, 3.53 million. that's the big disappointment. that's the growth driver, right? >> absolutely. they slowed down internationally. the big untouched market is china. and the irony is that netflix content, all of their big hit shows are being streamed for free on pirate sites and they do license screening networks, but they get no revenue from it. the censorship is so heavy, it's unlikely they will establish a legitimate franchise. >> that's one of the biggest questions going forward. for now shares not doing a whole lot of anything, which is unusual for a post-earnings release. >> they dropped right after the market closed. the earnings report came out.

but i suspect that the lift was the short-term covers. everybody was expecting a slow or soft first quarter. and they delivered that. the key is free cash flow, hastings did say he will have to go into the debt market and raise several billion dollars to keep the whole thing afloat. my perspective is netflix is the pioneer, but they don't have a sustainability business model. the real question long-term is where can they go? they at a 340 plus pe, a market cap in excess of 21st century fox. the off-balance sheet is getting larger and larger and could be $10 billion at the end of this calendar year. >> not sure investors agree with you this morning with the stock flat to up, porter. >> they'll have a nice second quarter. they have these two big shows

coming back, and that will give them a lift. but they can't keep it up. one of the things hastings has always said he will never do but it would alleviate the free cash flow problem if they ever introduced advertising to the content. >> as a new revenue stream. we have to leave it there. thank you for your valuable insight on netflix. porter bibb there. it's a big day for earnings. bank of america, goldman sachs, johnson & johnson, united health, sharls somewhere and harley davidson before the open. after, yahoo!. housing start are out at 8:30. industrial production at 9:30. and kansas city fet president esther george is speaking this morning about the fed and monetary policy. want to show you the sterling intraday chart, which we have coming up for you. earlier today we did see a bit

of dollar weakness, but that has turned around. now sterling weakness rather than dollar weakness. down a third of a percent, on news that theresa may said she will make a statement on downing street at 11:50 a.m. eastern. downing street announcements ve reserved for the most serious stories. this could possibly be the calling of a snap election. but no confirmation of that. that is purely twitter speculation, but twitter speculation from political editors of various news sources. we don't know what the talk will be about. it's a surprise announcement. >> uncertainty there this morning. we'll keep tabs on that for you. still ahead, the french election countdown. jpmorgan releasing a forecast for who will be the country's next president and how that impacts global markets. we'll have those details straight ahead.

don't miss former microsoft ceo steve ballmer on "squawk box" this morning. stay tuned, "worldwide exchange" will be right back.

good morning. let's get an update of trade around the world. it's pretty negative. two main reasons for that. one, it's the first day of trade for european markets after the two-day break friday and monday. a bit of catch up to friday's declines as opposed to monday's

gains on wall street. in particular on the london stock exchange, material sector the laggard down about 2% in light of iron ore prices, which are soft this morning. also, of course, france down the most of these three indexes, down 1.16%. ongoing fears around the french election just five days away before the first round when voters go to the polls. jpmorgan strategists out with a new note saying they expect emanuel macron to win even after the race has tightened after a surge for jean-luc melenchon. let's get an update from fournier on the ground in paris. >> we're five days before the election, and the whole country is holding its breath. never before have we had four candidates so close in the polls, which means we are in the margin of error, and it means

any two contenders out of the four could make it possibly to the second round. and never before did we have two candidates from extreme parties, the extreme-right and extreme-left being able potentially to qualify for the second round. never before lastly did we have an abstention rate that is credited at 30%. that could help the extreme parties, because they will go to the polling station, where as another part of the population doesn't know who to vote for. all the candidates this week will campaign hard for the last final days. they'll do meetings all over the country to try and convince the last bits of voters. they are important numbers that still don't know who to choose. it's a desissive campaign now in the last five days. and everything is still possible

in this very, very unpredictable presidential campaign. back to you. >> claire, thank you very much for that. claire fournier for us in paris. still ahead, more details on the president's big buy american jobs push today. we're live in washington when "worldwide exchange" returns. and look at the british pound, the labig mover in the lt five mens or so. down a third of a percent on this news that the prime minister is going to make an announcement. that's pretty much all we know. >> pretty much all we know, on downing street which is reserved for significant announcements, usually people are given a heads-up about it. that's the surprise. it has been announced there will be an announcement in 45 minutes time. 6:15 local time eastern time. the pound down a third of a percent. ♪

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welcome back to "worldwide exchange." we're waiting for president trump to sign a key executive order today that will aim to hire american and buy american. tracie potts joins us with the details. >> reporter: the president is headed to wisconsin today to a factory where he will likely talk about manufacturing jobs. but he's signing an executive order to encourage not only americans but the government to buy american. here's the twist. it's going to include one portion that will affect immigration policy, guest worker

visas. as part of this executive order, they're shaking up the lottery employers use to get those visas so they can get foreign workers into the united states legally. interestingly, it doesn't affect seasonal guest worker visas, the kind used in his florida estate mar-a-lago . he will also sign part of this order that will make it hard for government not to buy american. especially when it comes to steel. lf. and her paw won't al on it we're all worki forward to somhi. synchry financial canhelp ys t happen sner.

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good morning. the british pound slipping as we await an announcement from prime minister theresa may. a round up of last night's two major reports, netflix and united airlines. we'll tell you how the stocks are reacting. today's top trending stories. that highly anticipated baby giraffe that needs a name. it's tuesday, april 18, 2017. good morning. welcome back to "worldwide exchange" on cnbc. happy tax day. i'm sara eisen. >> i'm wilfred frost. good morning to you from me as well. let's check in on the global markets.

the pound is the big mover on this surprise mystery announcement from prime minister may coming in less than an hour. u.s. futures have been under pressure pretty much for the last half hour or so. dow futures down 39. s&p futures down 5. nasdaq down 9. that little rally we got yesterday throughout the day and super charged by treasury secretary mnuchin's comments on tax reform saying august was a little too aggressive and that there are alternative ways to raise money besides the border adjustment tax and they're thinking around revenue neutral in terms of adding u.s. economic growth. playing down the prospects of that. all helping the market late in the session. a broad-based rally on low volumes. as for the overnight action in asia, mostly negative. saw some mining companies got hit especially hard. iron ore prices entering a bear market and have been slammed. the shanghai comp down 0.8%. hong kong lower by 1.4%. nikkei higher by a third of a

percent. as for the european action, also in the red. saw declines of 1% in france. and in the uk. those losses have accelerated especially in france this morning. down 1.3% ahead of the first round of voting in the french election on sunday. french bond yields, that spread widening between the french bond yields and german bond yields as the uncertainty factor increases in a tight race between four major candidates heading into the election. oil prices were down about 1% yesterday. down another half percent today. 52.36. the ten-year treasury note, which dipped below 2.2% yesterday, hitting 2.198%. extra surprise that not only did markets rally but banks led the charge. banks up about 2% in light of lower yields. back above 2.2% today. the likes of bank of america, goldman sachs reporting earnings in a few hours.

dollar board for you. yesterday slipped about a quarter of a percent. today, as you can see, it was weaker for the most part. down against the euro and the yen. it was also weaker against the pound. that reversed in the last 30 minutes or so the pound down a third of a percent since we heard prime minister may will be making a surprise announcement in 45 minutes time. gold prices are down 0.4% today. down a bit today at 1,287. >> good thing we have a currency strategist on set to talk about the move in the pound. bof ga wolfgang, we will ask you about the impact of earnings, but on the breaking news this morning, the sharp reversal in the pound and now it's lower by 0.3. what does this say about the uncertainty factor now in british politics and economics

and around this currency? >> at the end of the day it's another surprise this is what we try to negotiate through. you get this announcement that in 45 minutes we'll talk about this. who knows where this will go, but for corporates this is difficult if you don't manage this properly. sometimes they say sell on the rumor, buy on the news or vice versa, that's what we're seeing here. people are nervous here. hard to believe that may is going to talk the sterling down here. but you're seeing the sale on there. >> she won't specifically talk the sterling down. we'll have to see what announcement is. let's talk more broadly about the election impact on currencies at the moment. is it the biggest factor moving the euro at the moment? the potential political results going either way? >> that's one of them. i think people don't know where it's going, they're surprised about it. you obvious i will have what

wi you have what's happening in the u.s., france and germany coming in later. these are anticipations that people are been talking about. no surprise that we keep having surprises. if we see more volatility and euro weakness, how much will that hurt u.s. corporations? how many of them do business in euros? >> they're significant. the numbers are significant. if you think about the s&p 500, the average company does 50% of their business abroad. when you can translate that into this trend now that we've had of a stronger dollar, that's not good for u.s. corporates. it seems -- >> that's why president trump was complaining about it. >> exactly right. it's counter intuitive, too. >> what kind of damage are we seeing? >> new numbers. we had $10 billion hit just last quarter, which is pretty significant. though if you look at q4 2015, volatility was slightly lower in 2016 than '15.

you have $36 billion done. what you're seeing this time surprisingly is that some of these corporations, like apple, who in q4 2015 reported a $2 billion hit, didn't report one at all this quarter. >> a currency hit. >> yeah. you look at the hits, but none reported concrete numbers for q420q q4 2016. which currency pairs are the most volatile against the dollar? >> euro and sterling, but also yen. china, surprisingly people underestimated. they think it's pegged. we all know it's not. that gets to the concision about currency manipulation. >> which is causing the most pain right now? >> i think the euro. then surprises out of the

sterling. surprisingly, if we think of gnp versus the world, the uk is roughly only 3.5% of global gnp. shouldn't be as big of a deal. i think there's a bit of thinking about it versus actual numbers. >> so, that exposure is fairly minimal. >> yes. exactly right. >> how much havoc has brexit and the sharp decline of the pound wreaked on corporate america? >> a lot more than people think. not just because of gdp but the elections and surprises coming in. if you look at this year alone, you probably had 50 billion, $60 billion worth of losses coming in, that's 500,000 jobs companies are not managing to the level they could. >> wolfgang, thank you very much for joining us. >> pleasure. let's good back to the main moving asset in markets. the pound off a third of a

percent. willem marx is with us. willem, that move in the pound based on this announcement that theresa may will make. we don't know about what yet. >> a bit of a mystery. she will be making an announcement outside number so downing street. you can see the impact this is having on sterling. off 0.5% against the dollar, half a percent against the swiss franc. dramatic moves for the currency. there are some options for what she may be talking about. over the weekend we saw positive news about her party, the conservatives, their lead over the opposition party, labour, up 20 points at least against that opposition party. it's the most commanding lead her party has held since the 1980s, the era of margaret thatcher. many people say she's inherited her mantle. so theresa may calling this announcement, she could, in theory, call a snap general election. it would require a two-thirds vote from the commons to approve that without her having to change legislation around the

elections. it would also require her to vote against her own government which seems like a slightly p a paradoxical situation to be in. she's had a cabinet meeting this morning. she's been meeting with senior ministers over the last couple hours. this announcement will come shortly on the heels of that. >> willem, thank you very much for that. that announcement is due in just over a half hour's time. 6:15 a.m. >> why would she call a snap election right now? >> as willem said, the latest polls suggest she has what is described as lead. a poll taken yesterday over the 12th to 13th of april put the conservatives at 44%. >> so more presence in parliament. >> a 20% poll lead is enormous in uk circumstances. yeah, so the idea would be in

order to call an election to increase her majority, which is slim at the moment. and make the most of these latest polls. the question mark would be would it become more of an in/out referendum again because the conservatives are now seen as the party carrying out brexit. would that create a space for somebody else to fill to offset that. that would be her risk. current polls, she has a massive lead. that would be the reasoning for doing this. again, we must stress we do not know what this announcement is about. 11:is 1 11:15 a.m. local time. we'll continue to round up some of last night's big earnings movers for you. shares of netflix are rising following the earnings report. company beat on the bottom line as content costs were lower than expected. revenue matched consensus. u.s. and international subscriber growth slowed in the first quarter that seems to be the initial disappointment,

those sub numbers missing. share prices dipped after hours when they offered those numbers. though the guidance for the current quarter suggested that subscriber growth will increase. porter bibb telling us earlier that outlook on q2 is why the stock is turning around. shares of united with better than expected results. we will get more in the earnings call. but in a statement following the release, oscar munoz offering an apology for the recent event that it is obvious we need to do a better job serving our customers. calling it a watershed moment for united. the stock brushed off the news. will social media and the general public? that's the question. housing data and earnings are in focus. march housing starts and building permits at 8:30 a.m. eastern, followed by industrial production at 9:15 a.m. esther george is speaking in new

york this morning about the fed and monetary policy. bank of america, goldman sachs, johnson & johnson, unite the health, charles schwab and harley davidson before the open. after the close, ibm and yahoo!. massive day for corporate earnings. animal adventure park launching a campaign to name april the giraffe's calf this after the viral sensation finally gave birth over the weekend. well over 1 million people watched in real time. the owner of animal adventure park appearing on "good morning america" to ask for the public's help to name the giraffe. fans can vote on a name for $1 per vote. the money will be used for giraffe conservation efforts. i did not see the birth, did you? >> no, nor am i sad about that fact. sweet to see it shortly afterwards. mcdonald's latest ad never actually mentions the company's name. the ad featuring mindy caling

does not appear on the youtube channel. it is part of the chain's first unbranded marketing campaign in which it asks people to search google for that place where coke tastes so good. >> they have the mcdonald's colors, i guess. >> not really, though. it's pretty confusing. >> i think it is, too. >> at least it's not creating social media uproar, which we've seen recently. >> from pepsi. >> a bit of confusion. still to come, the must-read stories. as we head to break a look at where european equities are trading. france leading the charge lower. down 1.3%. that's in part election related.

welcome back to "worldwide exchange." time for our must-read stories. my pick is entitled the coming french revolution. if le pen comes out on top, french politics and the european union will be turned upside down. even the moderate macron represents in his own way a truly radical stance with both candidates likely to make it to the second round. france is on the verge of a political revolution, regardless of who wins. for the last 40 years, someone from the main two political parties have ruled if it was a

runoff runoff, it would be an outsider par party. the author framing this whatever way it goes as a revolution. >> hard to game out the market scenarios for the euro, for the european markets, does it impact stock markets outside of france. france is unlike the uk, part of the eurozone and euro. >> absolutely right. the single currency aspect makes it a bigger impact. we showed the spread of french bond yields over german. the other one that has gapped up is italy. >> next domino. >> who has an election coming up in 12 months. >> my pick is in the "wall street journal." complexity is the root of all evil, at least in the tax code. it comes from nina olson, from inside the irs. this is one piece of advice she gives in this technical piece. consolidate and simplify the

six-family status provisions is one example of what you can do these include filing dependency exemptions, the earned income tax credit, the kild and dependent care credit and the separated pospouse rule. she said i proposed a family credit and worker credit to replace them which would have the added benefit of reducing improper earned income tax payments. it shows how implicated this is. >> i was going to say. >> just one way of simplifying it and reducing, for instance, five options to two. there's a lot of other advice in here for politicians. >> geeky stuff on a morning on "worldwide exchange." >> always. >> we're approaching the top of the hour. that means it's almost time for "squawk box." becky joins us for a look at what's coming up. >> i love that, you're calling

sara a geek? >> i mean, in the grand scheme of things, i think all of us at cnbc are geeks. >> it's a compliment for me. >> sara, i love you talked about this. we'll talk about all of these issues, the complexity of the tax code, the complexity of trying to figure out numbers in the government. a new group, usa facts, it's entire goal is to try to figure out the truth in numbers. this is backed by steve ballmer. steve ballmer will be here with us for an hour today talking about this. this is a venture he undertook because of his own acts in philanthropy, wanting to know what's going on, how many people work for the government, trying to figure out if crime is going up or down. when he tried to figure out some of these answers, he was stumped. he is putting a team of people together to try to find a better way of knowing what's going on. they're using all kinds of things like the census bureau,

bureau of economic analysis, all the numbers nerds like us like. he'll talk to us about that. he'll also talk about microsoft, what he sees going on with cloud computing, and the l.a. clippers as well. i know it's a busy morning for earnings. we have the prime minister speaking. we'll be monitoring that. we don't know what she'll be talking about. we'll bring that to you when it comes up in about a half hour's time. with earnings, talking about netflix from last night. today getting some financials. we'll check in with goldman sachs, bank of america, see what happens with those big financial names. earth day is coming up. i think it's saturday. when you start thinking about the earth, you think about water. if you had one guest that you would want to talk to, an expert on water, who might that be? >> matt damon. >> good guess. that's a good guess, but that's not who we're talking to. >> michael phelps. >> there we go. >> also an expert when it comes to water. >> that's really awesome. not to play matt damon down, but

michael phelps is much cooler. >> i'm not taking sides on this. since mr. phelps is here today, we'll take his side. >> how do you weigh up acting awards to olympic medals. >> i don't know. matt damon is cool. >> they're both pretty cool. we look forward to that. >> thanks, nerds. that 6:15 a.m. announcement from theresa may something to watch. coming up, we'll set you up for the trading day ahead with michael farr. as we head out, another look at the pound here. nice to get breaking news at 5:00 a.m. eastern. british prime minister theresa may expected to make a statement in less than 30 minutes from now. that uncertainty factor has moved the pound lower. down 0.3% now. "worldwide exchange" will be right back.

welcome back to "worldwide exchange." futures at this pour poihour po

lower. joining us is michael farr, cnbc contributor. what did you make of those comments from treasury secretary steve mnuchin yesterday? >> you know, i think that we're seeing from the government that things may take longer than we thought. we're still getting strong and positive messages out of the government and treasury. but perhaps taxes will take longer. this is a market relying on that tax happening or not happening. though we've been good at ignoring all sorts of bad news, embracing good news and believing that everything will be fine. it's a market still running on optimism and running well. >> so, i know you've been saying that for a while now. what changes the tide of that? >> i was talking about a friend, joe caso yesterday, doing this

about as long as i have, we were saying that markets are just fine until they're not. when you think that we've been through a bombing of syria, that we've dropped the mother of all bombs in afghanistan, that we have the vice president warning and troops over in korea and off of north korea, what actually turns things? healthcare didn't get passed. we're having trouble getting legislation through? what is the tipping point? and in the markets they come from out of nowhere. everything is fine until they're not. the trends are still in place. valuations are high, and now the british prime minister coming out, will that be another trigger? who knows, but you have to be cautious in markets like this, particularly investors with retirement plans and money that matters, you have to make sure you know what you own and why you own it. this is not a time you should be taking on high risk. >> alternative theory here.

all of these uncertainty factors on geopolitics, the washington policy agenda, politics from the uk to france weighing on bond yields. the ten-year yield is now back below 2.22. i wonder if the equity rally is being sustained now by this idea that lower bond yields make equities more attractive in terms of payment. >> that's an excellent point. they do by historical measures. i think the fed is moving to the sidelines. if you look at a two-year treasury in the 120 range, a ten-year in the 220 range, we have one of the flattest yield curves ever. when you look at that 120-something on the two-year and fed funds at 1%. the fed funds won't move higher

than the two-year treasury on purpose. so they move to the sidelines and this cheap money could support stock prices for quite awhile. this trend feels like it's s stubbornly in place and valuations are high, but stocks that are expensive continue to be expensive. we learned that in the '90s. >> thank you very much, michael farr. a lot to watch today. >> coming into today, all i was focusing on were the u.s. banks, bank of america, goldman sachs, now added to that on my list in just under 20 minutes time, theresa may's announcement from downing street. the pound down off the back of the news this announcement is coming. >> some other earnings reports, housing starts as well in the u.s. it's tax day. there's going to be a lot of things going on. >> you love that it's tax day. you love it. >> it's one of the foremost issues for investors now coming out of washington, in light of those remarks from treasury secretary steven mnuchin.

you will hear more of that this week. a lot of official commentary. that's it for "worldwide exchange." lots to come on "squawk box" which comes up next.

stocks are falling in europe and the u.s. we're awaiting a statement from the british prime minister, theresa may, in about 15 minutes. there's speculation it could be a major announcement. reports from united health, bank of america and johnson & johnson expected this hour. we'll bring you the numbers and reaction. plus president trump set to sign a new executive order to buy american and hire american. details straight ahead. it's tuesday, april 18, 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're live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. prem will be making a statement at 6:15 eastern time outside of downing street. it's unusual that the subject of the statement has not been released yet. the outdoor location is usually reserved for major announcements. there is speculation that may could cause a snap general election. it's been effecting the markets. the pound just reversing course. it's lower against the dollar. been watching what's happening in the european equities this morning as well. as you look right now, you'll see first the u.s. futures are indicated lower after strong day yesterday. the dow futures down about 55 points. in europe, you do see some weaknere