good morning. today's market test, after a stunning rally attention turns to washington and a busy earnings calendar. new this morning, with a government shutdown looming, president trump suggests he's open to waiting on funding. his u.s./mexico wall. and a showdown at the wells fargo executive meeting today. it's tuesday, april 25, 2017, "worldwide exchange" begins right now. good morning. a warm welcome to "worldwide

exchange" on cnbc. i'm wilfred frost. >> i'm seema mody in for sara eisen today. welcome back from paris. >> thank you very much. great to be back. great to have you alongside. >> amazing to see how that french election is still impacting marketing. >> let's get straight to the market action. >> u.s. futures, yesterday a big rally on wall street. gains of 1% or more across the board for the s&p 500. dow jones aup 1.2%. a relatively positive session in trade. dow jones up about 40 points, nasdaq and s&p also up. >> financials up 3%. and it was that election result sunday night in france that led markets higher. european stocks clearly rallied more than the u.s. 4% of gains in france. 2% in london.

they are holding firm today. slight gains for the main indices. nothing too massive compared to yesterday. the important thing is they are cementing the big gains we saw yesterday. it was also banks in europe that led the charge higher as it was in the u.s. big moves. socgen, deutsche bank up nearly 10%. let's sum up how the market reacted overall in terms of the risks of a frexit. best highlighted by the spread of the ten-year french bond over german ten-year safe haven. as you can see, that spread massively retracting. it had hit a high of 75 basis points in the middle of last week. now down 40 basis points. the yield between the two tightening. the interesting thing, not just the yield on the french bond coming down, but, in fact, the yield on the german bond going up as well. that just points to the fact that yesterday wasn't just a single individual country risk factor -- sunday night wasn't an

individual single risk factor changing, it reignited the global inflation trade. the german yield picked up. that was one of the factors, we saw that positive infection around the world. the same is true in asia. hong kong leading the charge there. 1.3%. the us a trail understa us aust markets are closed today. >> as for broader markets, we're looking at the u.s. treasury yield. some upward pressure. one note being passed around from deutsche bank's group chief economist who says despite the latest political developments that have been positive and solid global growth momentum, do not dismiss the inflation risks. inflation a big topics economists. right now the ten-year treasury

note just at about 2.3%. interestingly enough, if we look at oil. a bit of volatility in the oil market as of late. its biggest weekly drop since the first week of march that we saw last week. international gauge. brent crude trading at $51.78. the reason we saw that drop in oil prices was due to concerns over an inventory build up. now all eyes on that opec meeting coming up in vienna. nat gas seeing a bit of green. in the dollar market, the euro coming off five-month highs after the wake of the first round of the presidential election but still holding on to gains, 1.08 against the u.s. dollar. the u.s. dollar higher against the yen at 110.48. the pound showing green. >> gas prices down about a half percent yesterday. down about 0.9%. risk-on was bad for gold

yesterday and bad for gold today. the trump administration plans to impose a new tariff on canada wilbur ross announcing a 20% tax on imports of canada soft wood lumber. ross said the decades old trade dispute has been allegedly allowing loggers to cut down trees at subsidized costs and sell them at lower prices. the ka ncanadian dollar reactin. the u.s. dollar in the green against it. on a programming note, wilbur ross will be on "squawk box" 7:00 a.m. eastern time today. in other headlines, new details emerging on president trump's tax plan. reports say he asked aides to draft a proposal that cuts the corporate rate to 15% from 35%. this could set up a fight with some republicans on the hill because the lower rate could mean a loss of revenue and that

could drive up deficits. political leaders face a midnight friday deadline to reach a spending deal or face a government shutdown. with the clock ticking, president trump indicated he's willing to back away from his demand that the government funding bill include money to build the wall on the u.s./mexico border. the administration officials say trump is open to obtaining funding for the wall later this year. the $1 mil1 request for a down on the wall has been a major sticking point in the negotiations to avoid a shutdown. in geopolitical news, we continue to track rising tensions with north korea. top trump administration officials will hold a rare intelligence briefing tomorrow at the white house for the entire u.s. senate on the situation with north korea. today north korea reportedly conducted a big live-fire exercise to mark the anniversary of its military. this comes as a u.s. submarine docks in south korea. we'll have a live report from

the border of north korea later in the show. looking forward to that. yesterday i spoke to the south korean finance minister about north korea and he seemed less concerned. >> i listen to all these people worrying about the geopolitical risks, the north korean factor, yes, there is some. but as far as the impact on economy is concerned, i believe that these so-called geopolitical risks have some limited impact. >> of course for south korea the concern is not just geopolitical when it pertains to north korea but economic as well. as the finance minister was saying the risks are limited. it's very apparent when you look at the south korean credit default swap, the premium to buy south korean credit default

swaps at a nine-month high suggesting more investors are betting on a default. >> on the flip side, the kospi, the korean index is up in positive territory on one-months, three-month and six-month snapshots. to today's wall street agenda housing data and a slew of earnings reports are in focus. the monthly s&p case-shiller home price index out at 9:00 a.m. followed by march new home sales and april consumer confidence at 10:00 a.m. five dow components report before the bell, 3m, caterpillar, coke and miklaszewsmic mcdonald's, we'll also hear from eli lilly and chipotle. james quincy will be on "squawk alley" for an interview at 11:00 a.m. wells fargo will hold its annual shareholder meeting today. the board of directors will face

re-election. some major pension funds are planning to vote against most of the 15 board members saying they failed in duties to oversee the company. today's meetings follow the fake account scandal at the bank. a lot of focus on this. institutional share holders voted to vote against 12 board members. mr. buffett is expected to vote in favor of them, but others like calpers are voting against. all eyes on this. at least some will lose and be voted against by shareholders. that will be big news. >> absolutely. >> a big wake-up call for the board because so far criticism and punishment has focused on executives, not the board. >> we'll be watching that story closely. in earnings news, shares of express scripts sharply lower despite a report that the prescription drug manager is losing its biggest customer.

landon dowdy has that story. >> good morning. shares of express scripts, one of the largest pharmacy benefit managers is taking about 14% in early trading. the firm announced yesterday that anthem, its biggest customer, would not renew its contracts when it expires in 2019. anthem account ford about 18% of express script's q1 revenue. here's what the ceo had to say on "closing bell" yesterday. >> our model allows us to create competition, not only amongst retailers, and the supply chain, the manufacturers, the generic companies, all of those are things we'll have tremendous scale to do. we don't need to be associated necessarily with any particular part of the supply chain. i like the fact that we're independent. that we can drive down costs for our plans and our patience by creating competition. we'll be plenty big enough to be able to do that. >> anthem sued express scripts

last year for about 15 billion claiming the chaompany was overcharged by them and not passing along savings. more stocks to watch. humana reporting better than expected profits. the health insurer is raising its full-year forecast helped bay strong performance in the retail business. whirlpool cutting profit guidance over temporary integration challenges. this comes as a result of the company's 2014 purchase of an italian appliancemaker. whirlpool off 1.8%. alcoa posting upbeat earnings for the first quarter saying its expected aluminum demand to rise this year. the company reporting weaker than expected revenue growth. alcoa up 3%. >> you're getting good at this correcting yourself. >> i yield a bit on aluminum. you guys spell it completely different. it's just a different word altogether. not just a pronunciation thing.

it did say aluminum. i should have said that. >> you got it right. few more stocks to watch. barrick gold reporting weaker than expected quarterly results and slashing mine output forecasts and lowering the view for the 2017 group gold production. shares down 3%. t-mobile subscriber growth topping estimates. the company saying it's open to merger talks after a federal ban expires this week. here's the ceo on "mad money" last night. >> we certainly can drive shareholder value and growth as a stand-alone company, however it will be something that we will look at the opportunities to even further accelerate that growth or create much more shareholder value. we're coming at this exactly the way i dreamt we would at this period. from a position of strength and willing to talk but not needing to. which is really a difference. >> that was john legere of

t-mobile. shares now just off fractionally by 0.3%. novartis earnings topping estimates. investors cheers stronger than expected sales of its heart failure drug. >> up 2% in swiss trade. activist investor mark carter says buffalo wild wings made an astronomical error in proxy filings late last week. he says the chain falsely stated shares outperformed the s&p 600 restaurant index over a five-year period. last week, marcato called for ceo sally smith to resign. the relative share price performance there for you. up next on "worldwide exchange," a half trillion reasons why the world's biggest oil company could hit a big hitch ahead of its highly anticipated ipo. and later a steel trap. inside of one of china's zombie

steel towns as washington cracks down on cheap chinese exports. "worldwide exchange" will be right back. thanks for doing this, dad. so i thought it might be time to talk about a financial strategy. you mean pay him back? so let's start talking about your long-term goals. knowing your future is about more than just you.

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welcome back to "worldwide exchange." paris, france, the spark of the market rally we saw yesterday. holding on to gains for the most part across europe. if we look into the individual markets, the key here is we're not seeing red. not seeing pullbacks from that

big rally yesterday. we saw 4% in france, 3% in germany, 2% in the uk. led by banks, socgen and deutsche bank up almost 10%. that carried over to the u.s., but not quite such strong leads. the financial index was up about 3%. futures for you now, pointing higher. again, taking a similar-sized lead from europe. we're up about 0.2% for the dow, 44 points. s&p and nasdaq higher as well. let's finish off with the euro/dollar, a one-week snapshot tells the picture. we hit a five-month high of middle 1.09 region. we pulled back a bit during the trade which is why we're allowing more room to gain today 0.2%. up a percent and a half over the course of the last week. just shy of the 1.09 handle this morning. >> making headlines this

morning, saudi arabia has touted the value of its state-owned oil company, saudi aramco at $2 trillion. reports say officials are questioning that valuation. the "wall street journal" says they believe aramco is worth around 500 billion less, even after factoring in a recent tax cut and other tools the government has to make it more attractive to investors. the "journal" also says banks vying for an underwriting rule have been given minimal information on the company's financials. president trump has been criticizing china for dumping cheap steel in the u.s. market. and vowed to put a stop to it. even though chinese officials have promised to scale back operating capacity, so far it hasn't happened. eunice yoon visited a steel town in the northeastern part of china to find out why the country won't act. eunice, over to you. >> thank you very much, seema.

whatever the trump administration decides to do on steel, getting china to cut back on capacity is going to be a challenge as we found out this week. >> reporter: china's excess steel is raising tensions overseas and sensitivities back home. we came to the town two hours from beijing in the northern province which makes more steel than the entire united states. washington has accused china of flooding global markets with cheap steel. beijing has repeatedly issued plans to reduce production but those efforts have not gone far enough. analysts estimate operating capacity in china actually increased last year as local officials, investors and banks keep mills open so workers can stay employed. behind me is the local steel mill. the townspeople say authorities here have repeatedly over the years instructed the steel mill to scale back capacity, but last year officials found they expanded capacity, and that's a

problem here in china. and quickly became a problem for us, too. we have only been at a steel mill for a couple minutes. the police already stopped us from filming. they blocked us and aren't letting us leave. i think it goes to show how sensitive the issue of steel and excess capacity has become in china. factories producing steel or steel-related products here are struggling to find new places to sell, both in china and abroad. "we've put greater effort in our sales to much the production this businessman says." the government has closed some factories, but production levels have not dropped off. washington is losing patience. u.s. president donald trump has vowed to take tougher action against cheap imported steel which means china's. businessmen here doubt trump can force beijing's hand. "reducing capacity is a gradual process, he says. the government has its own proper and reasonable agenda to

cut capacity at its own pace." but it doesn't want the cameras to show how slow that pace is. >> and just this week the chinese government issued yet another directive to punish steel mills that are overproducing by revoking their licenses. we have seen these types of efforts before. i was on the phone with the head of the eu chamber of commerce, and he said that in china there is an excess capacity of plans by beijing to reduce excess capacity. i think that that line just tells you how xexasperated china's trade members are. >> on the flip side, the thing the u.s. also wants to achieve is easier access for u.s. firms to set up shop in china. particularly things like autos, without having partner with a local company or financials doing the same thing. is that on the agenda high up for the chinese authorities as

well? >> i think it's definitely high up on the agenda for the u.s. side. i'm not so sure about the beijing side. that's been a perennial sticking point and conflict point for both the u.s. and china. because american companies have been wanting to get market access. even in the festeel industry, ts is a well-protected market. there are some private players, but it is definitely state-owned. that actually plays a part in why it's seen as a bit of a well fair program fo wellfare program for a lot of these people. still to come, political leaders racing to strike a spending deal to stop a government shutdown. and now it appears president trump is willing to drop a funding wall demand. the latest from washington straight ahead. ild itself. and her paw won't heal on its own. we're all working forward to something. synchrony financial can help your customers

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as president trump prepares to mark his 100th day in office this weekend, the deadline looms for a new government spending bill. tracie potts has the latest from capitol hill. good morning. the thing that's been holding this up is the president's ge ma demand for money for a border wall. >> reporter: a white house official tells nbc president trump will drop his demand for 1 $1 billion now to build a border wall with mexico and deal with that during the regular budget process this fall. to prevent a government shutdown

friday. >> we feel confident the government will shot shut down. >> reporter: democrats oppose the wall and key republicans are skeptical. >> i'm for a wall where it makes sense. but a 2200 mile wall doesn't make sense. >> reporter: with no down payment on the wall, president trump approaches his 100th day without a big win. the white house is turning to plan "b," healthcare, though final action is not expected this week. plus there's a major announcement on tax reform tomorrow. analysts say president trump is treating the presidency like a reality tv show. >> it's like ratings week, right? so let's throw everything at them and give them the razzle dazzle, a great show, maybe that will move the poll numbers. >> reporter: his approval rating, 40%. a record low this early in the presidency. that is from our nbc/"wall street journal" poll which also shows the president has a strong base of support. >> thank you very much for that. tracie potts in washington. coming up on today's show,

the top stories and a round up of global markets. the rally continues, especially when you look at europe. and it's the busiest week of the earnings season. five dow components set to roll out quarterly results this morning alone. we'll talk expectations when "worldwide exchange" comes right back. out there out there and adapting them to work for you. the ultrasound that can see inside patients, can also detect early signs of corrosion at our refineries. high-tech military cameras that see through walls, can inspect our pipelines to prevent leaks. remote-controlled aircraft, can help us identify potential problems and stop them in their tracks. at bp, safety is never being satisfied. and always working to be better. you give us comfort. and we give you bare feet... i love you, couch. ...backsweat and gordo's everything. i love you, but sometimes you stink. ♪

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getscreenednow.org it only takes a minute to take care of yourself, and nothing rhymes with "org"... if you want to stay on top of your health, one simple thing to do -- is take the pledge to go and get screened for the cancers that might affect you. so stand up to cancer and take the pledge at getscreenednow.org it only takes a minute to take care of yourself, and nothing rhymes with "org"... good morning. stocks around the world march higher as euphoria from the french election continues to bolster elections. the latest straight ahead.

big earnings on deck. five dow components reporting results before the bell. what you can expect from the mega names coming up. and trump takes on timber. details of the brewing trade battle between the white house and our neighbors to the north. it's tuesday, april 25, 2017, you're watching "worldwide exchange" on cnbc. ♪ good morning. welcome to "worldwide exchange" on cnbc. i'm wilfred frost. >> i'm seema mody in for sara eisen. i have to say, you didn't get much sleep last night. you are back with a lot of energy. >> so much to talk about. lots of euphoria to bring back from europe. lots of interesting stories to talk about stateside. just a quick nod to our producers, great song choice there. let's check in on the global picture. the gains of yesterday are holding. holding here stateside. futures called higher by 45 points on the dow.

3 points for the s&p. the nasdaq up about 7 points. this off the back of more than 1% of gains yesterday for each of the three indices led higher by banks which are up about 3%. the financials index within the s&p up 3%. let's look around the rest of the world. hong kong, the out-performer in asian trade, up 1.3%. decent gains for japan as well. australia and new zealand closed today. europe the most important one to look at in terms of whether those big gains yesterday of 4% for france, 3% for germany, 2% for the uk are holding. indeed they are. they are holding by 0.2%. european trade -- you can take my word for it. there we go actually germany slipped in the last half an hour or so. but the bottom line is those big gains of yesterday not being eradicated today. >> the result of the french presidential election not just confined to the equity market in terms of the rally. look at bonds.

we've decision seeing a wave of relief sweeping through markets. bond yields now, ten-year treasury note at 2.3%. boosting sentiment. not just in the equity market but in the bond market as well. looking at oil prices, recovering after six straight sessions of losses. some notable gains with ice brent crude back above $50 a barrel. 51.77. wti crude not just yet, $49.37. nat gas also higher, up by 3 cents on the day. let's look at the dollar against the euro. as you can see, the euro holding on to gains, 1.08 against the dollar. the yen lower against the greenback at 110.49. gold has been under pressure as of late. interesting enough there's been a note from goldman sachs that just came out about an hour ago. goldman sachs traders now expecting the gold selloff to continue despite the rise in

geopolitical events which, wilfred, has been a big talker. whether the safe haven assets like gold and yen will be favored among investors with the rise in geopolitical tensions. for now goldman sees gold dropping from here. >> i think two things gently to say on the market off the back of the french election. the first is the surprise size of the move to the upside, not just, of course, resigned to french and european assets, but we saw the global reflation trade allowed to spark up again. german yields rose, u.s. yields rose. then because of that we saw big performance in the u.s. banks. it showed that people had actually been more concerned about the french election than we thought. the other point just to say on the flip side, clearly people suggesting the polls are split about 60/40, 65/35 in favor of macron in the second round. in terms of what's priced in in terms of mac tud gnitude of mar moves, he will pen with ju we s

7% slight possibility of a surprise, but almost everyone says macron should be victorious. >> still about a week away from the second round of the french presidential election. we're not sure what will happen. the final outcome is still due. until then markets are liking what they say. >> may 7th that vote will take place. the trump administration is planning to impose a 20% tax on soft wood lumber imports from canada the move comes as the u.s. says canada is providing unfair subsidies to bum ly s tb producers. canada exported roughly 5$5.6 billion of soft wood lumber into the u.s. last year.

news of the new tariff sending the u.s. dollar higher. we are expecting to hear more about this from commerce secretary wilbur ross on "squawk box" at 7:00 a.m. eastern time. we were just talking about geopolitics a developing story out of north korea. that nation holding a massive artillery drill as u.s. submarines arrive in the region. let's get to chery kang who is live on the border with north korea with the latest. >> reporter: good morning. yes, north korea decided to go with live fire drills and harsh war of rhetoric. these are the traditional ways of show of force on the part of north korea. but we did not see an llistic missile testing or a nuclear test as widely speculated for days now in terms of marking this day of military foundation

day. i think the risk and costs of doing something too provocative in the face of the trump administration in washington have become a little too much for north korea to handle. the trump administration's message has been clear so far, don't test us. we won't be patient anymore. here is u.s. president donald trump talking about the need to sanction north korea further in case of more provocations, calling north korea a real threat to the world. take a listen. >> the status quo in north korea is also unacceptable. the council must be prepared to impose additional and stronger sanctions on north korean nuclear and ballistic missile programs. this is a real threat to the world. >> reporter: and, of course, we saw china taking a little bit of a different stance, coming harsh or pressing north korea a little more than usual.

so i wonder if north korea is pacing itself in terms of provoking the trump administration for now. guys? >> chery, quick question. today is the anniversary of the korean military founding. you're at the border, on the ssh south korean border of south korea and north korea. are you seeing any military build up or presence right now? >> that's not exactly the case from where i'm standing. actually this is a peace park built in the name of the inter-korean unifications or better relations between the two koreas. not necessarily so. south korea's government has been saying they do not see much of a special move in the lead-up to this anniversary of the military foundation day. certainly diplomatically a lot of eyes on north korea and do note that the nuclear

negotiators from south korea have been actually busy meeting with officials from washington as well as tokyo in order to come up with some kind of solution in dealing with all this. guys? >> chery, thank you very much for that. chery kang for us. back in the u.s., the busiest week for the earnings season. five dow components will report before the opening bell. 3m, caterpillar, coke and mcdonalds, also eli lilly and lockheed martin. let's talk more about this week. joining us is lindsay bell. good morning to you. >> good morning. >> thank you very much for joining us. before we get to what's to come, looking backwards so far, earnings season pretty strong? >> pretty good earnings season, as you well know. the financials have done well. the industrials also have good numbers. some of them are raising their outlook for the full-year. last week ge and honeywell, huge

bellwethers, they did well. honeywell raised the low end of their guidance. yesterday an illinois tool works reported they raised guidance. you're seeing strength in the construction business which we will look forward to caterpillar, which will worth today. we get a lot of industrial companies industrials, construc financials, all positive. is it cyclicals only we expect to do well? >> the sectors that are going to lead, we have energy. they financially become a tail-wind this quarter as opposed to a headwind as it has been the last several quarters. it will be a good quarter for energy. then you have the financials leading with 17.9% growth. technology, 17.2% growth. we'll get those later in the week on thursday. microsoft, intel, google, those will be huge. amazon also, which is really consumer discretionary. that is those two, and cyclical

sectors, as always every quarter it's more about the outlook than the current -- or the quarter that reported in the past. >> we have always been trying to understand the impact politics could have on bermie i earnings fundmentingfun fundfun fundament fundamentals. which industries or sectors will be benefited the most from this? >> the domestic sectors will be the most beneficial receivers of any sort of reform like that. but i think what you're seeing that's important this earnings season is the sector -- the stocks that are beating on top and bottom line, they're doing well but the stocks are not getting a huge pop off of that, because of the macro talks, the political and geopolitical concerns that are out there. that's taking over the rhetoric rite now a

right now and the markets. it's a good earnings season, but you're not seeing that reflected so much in the stocks. >> just quickly, what sector do you expect the biggest delines in? >> the biggest decline is expected to come from the telecom sector. we saw verizon this week. we'll get at&t. a lot of competition there. >> watch the numbers on that one. thank you very much for joining us. lindsay bell from cfra. moving on, time for our top trending stories. another airline video going viral, but it's not what you think. passengers on a delta flight were treated to a menny concert by kenny g. the legendary musician offering to play the saxophone if his fellow passengers donated $1,000 for a relay for life fund-raiser. >> this is delta taking advantage of the united airlines controversy and situation, trying to boost customer satisfaction. >> certainly helps delta.

not sure if they organized it. certainly a relative difference to united a couple weeks ago. apple hitting the brakes on its version of carpool karaoke. the series based on the segment on the late late show is being pushed back to late their year. apple was expected to release its version of carpool karaoke sometimes this month. apple and cbs confirming the delay but didn't explain why it was postponed. kind of disappointment. >> i think the apple version will not have james corden, right? >> not sure about that. >> which i think it's a great idea in itself, clearly. but i think it relies heavily on mr. corden. >> he does a great job with those celebrities. he's also a great singer. >> him and jimmy fallon, a new trend now. >> james corden is better. >> agree to disagree. all right. coming up on the show, how marine le pen could pull a big

upset and win the french presidential runoff. more on politics and the impact on the markets. plus our reads ahead. look at european equities trading higher for the second day. german dax slightly lower. hugging on to the flat line. "worldwide exchange" will be right back. does nobody like the future? c'mon, the future. he obviously doesn't know intel is helping power autonomous cars and the 5g network they connect to. with this, won't happen in the future. thanks, jim. there's some napkins in the glovebox. okay, but why would i need a napkin? you could have just told me a bump was coming. we know the future. because we're building it.

>> good morning. welcome back to "worldwide exchange." time for our must-reads. my pick is in the "the financial times" titled how marine le pen can steer a narrow path to

victory in france. quoting a deutsche bank analyst, it reads the probability of a le pen victory has decreased but still not yet null. possible new scandals, strong debate performances or complacency from the electorate could still cause an upset. i just think this is worth the read. it's a good outline of that possible route to victory for marine le pen, albeit a small win. we've seen lots of headlines over the last couple of days, things along the line of france rejects nationalism. we haven't had the final result yet. absolutely legitimate that markets are rallying off the back of this, because polls got one round right, but it's not a definite in round two. >> other people point out

timing, this happened at the end, still a lot of time before we get the final vote. my pick is titled trump's border wall fantasy is crumbling. this comes after a tweet from president trump that the manufacturing of the border wall will be delayed. that's brought some controversy. the border wall was a big part of president trump's campaign promise. similar to what we had around trade, this departure from isolationist strategy. he will lose his core base? that's something we're watching closely. again, this border wall, the delay in the payment and the actual construction of this brings up the same point. >> yeah. but in the short-term markets like it because it reduces the chance of a government shutdown. so that's -- >> for now. >> that's a small reason why we rallied over the past couple of days. up next on the show, we're setting you up for the dading d trading day ahead with darrell

kro cronk. you're watching cnbc. we'll be back after this short break.

welcome back to "worldwide exchange." approaching the top of the hour. the team is getting ready for "squawk box." and dru andrew joins us with a look. coming up, we have wilbur ross joining us. he will talk about this big story, trade battle with canada. we're also going to be speaking with jason furman who will talk more about this tax plan that weather hearing about, and this 15% rate. we have mike jackson with us. we'll talk autos and how the economy is faring. and ian bremer will spend some time with us in a couple minutes and talk trade, europe and a lot more. that's what's on tap. plus, have you read your new york times this morning, wilf? >> i haven't.

my bad. >> ben bernanke. >> i will read it straight afterwards. i will buy a bagel, coffee, sit down, put my feet up and read my favorite column. >> thank you. welcome back. >> thank you very much. i have a question for wilbur ross. >> you have a question for wilbur ross? that is? >> who is top of the list for a next free trade deal? europe, eu or the uk. a lot of debate back home about whether that promise will slip or not. we will ask the question and properly credit you. >> ankthanks, andrew. futures at this hour pointing higher. holding on to yesterday's rally. the same across europe. slight gains after a massive rally. joining us to discuss is darrell cronk. darrell, good morning to you. >> good morning. >> were you surprised by the level of rally we got off the back of that french election

result and the global nature? >> i don't know that we were surprised. what you're doing is extracting some risk premium. when you looked at activity yesterday, there was unwinding of the hedges domestically here on concerns that the french election could go the opposite way. when you look at some european gains which were obviously strong yesterday, a big chunk of that was taken away by the strength in the euro as well. so, if you're a domestic investor in u.s. dollar based investments, you have some of that basically taken away through the currency effect. >> the french election jitters calming down, we have better economic data. i can see those two points helping equities move higher what about the rise in geopolitical tensions, why are investors willing to overlook north korea anderecent provocations. >> i think through the summer months geopolitical

conversations will be at the top of conversation. we advise investors to take profit right now almost harvesting some of your gains in the spring instead of the traditional harvest in the fall. you're moving into a seasonally weak period of time in the markets. we just think there's an opportunity here, given some of the economic data has been soft, we'll see q1 data later this week, the first quarter of the year and the winter months were soft for the economy. >> which sector is most right for profit taking? >> i would certainly say technology. up 13% year to date right now. and then we would still fade a lot of the defensive names. so we think the utilities, the telecom, and in particular energy. we still think oil prices have a ways to go down. we've seen them weaken over the last couple of weeks. they're at a four-week low basically. even off of yesterday's gains.

we think the energy sector as a whole looks rich to us. >> can you believe the extent of the rally in the european banks over the last couple of days? deutsche bank and socgen up some 10%. we've been comparing the evaluativa valuati valuations of u.s. banks and european banks. what is your preference? >> we still like u.s. banks. they are in a better capital position. we think the yield curve does steepen, but not as much as people think. we think you have a relief valley on european banks. there was a concern that if certainly le pen goes to the -- has a good chance of winning in the second round, you could have capital controls on european banks. certainly the risk of france leaving the eu, all pose a significant risk to the european banking system. therefore you're seeing them have a sigh of relief this morning or yesterday. >> darrell, washington still in the spotlight. this tax rate reduction expected

sometime this week. we have a delay in the border wall. now the countdown to a potential government shutdown. how are you digesting all of these recent factors and putting money to use here? >> well, as i mentioned before, we think the geopolitical risk is with us for some time. it will be interesting to watch the tax package released to tomorrow. i would watch less about what is released and said and more about what we realistically think can get done and over what time frame. 15% is a stretch in how you would pay for it on the corporate tax rates and let's see what the proposal is on the individual tax rates. any reduction in taxes will be received some what welly the markets. but there is a risk that it could be underwhelming to the markets as well. we don't think the government shutdown probably happens. we think they find an opportunity to get common ground and move through with another continuing resolution. >> darrell, we hear from the likes of coca-cola, mcdonald's

today, various other consumer names to come. we spoke about some hard data being overr undunderwhelming, s still good. what do you expect from some of the consumer names? >> the consumer names probably have a decent quarter. when you look at consumer discretionary, year over year is expected to be 2%, 3% negative earnings growth. so still a bit weak. we still like them. we think the evaluation is still attractive. we think they're able to grow revenues. probably the most underdiscussed item of this particular earnings quarter as a whole is that you're finally starting to see revenue growth come back through. you can see 5% to 6% overall s&p revenue growth year over year in this quarter. that is a positive sign and something we have not seen in many, many quarters. >> darrell, thank you very much for joining us today. darrell cronk of wells fargo. about 20 seconds left. will the rally continue? that's on the agenda also wells

fargo's agm and whether those directors get re-elected going forward. >> gold also under a bit of pressure. that note from goldman sachs, keep an eye on the metal. and her paw won't heal on its own. we're all working forward to something. synchrony financial can help your customers make it happen sooner. so she can plug into her dreams... and they'll have a new addition for their new addition. whatever you're working forward to, even if it's chasing squirrels, synchrony financial can help you get there.

good mornings. earnings alert. we'll hear from five dow components. and trade tensions, the trump administration slapping new tariffs on canadian lumber. commerce secretary wilbur ross will join us to explain. and an escalation in north korea. the country holding a large-scale military drill. president trump calling the entire senate to the white house for a briefing. it's tuesday, april 25, 2017. "squawk box" begins right now.

live from new york, where business never sleeps, this is "squawk box." good morning. welcome to "squawk box" here on cnbc. live from the nasdaq market site in times square. i'm becky quick along with andrew ross sorkin and brian sullivan. joe is off today. let's look at the u.s. equity futures a strong day yesterday for the markets. major averages saw their best day in about seven weeks. you saw the nasdaq closing at another record high. this morning equity futures are indicated up once again. yesterday the good news was the french election, as far as the markets were concerned. they looked at that as a good early indicator of the polls being right for the first time in a long time. this morning building on those gains with the dow futures indicated up 43 points. s&p futures indicated up 3 points, the nasdaq up six. let's look at what happened overnight in asia. you're going to see at least when it comes to the nikkei that -- first we'll