good morning. a developing story. the white house denying a bombshell report that the president revealed classified information to russia. live report from washington straight ahead. historic highs. u.s. equity futures are flat after a rally in tech and oil sent the nasdaq to new records. and disney held hostage. the details of that on its way. it's tuesday, may 16, 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. >> let's check in on the markets after another record close for the s&p and nasdaq. got a half percent gain for stocks yesterday. breaking out of that dreade dreaded 0.2% move. let's show you where we are this morning. dow futures down a point. s&p futures down 1.5. nasdaq futures remain strong as the nasdaq continues its outperformance. it's coming off of four straight weeks in gains. the s&p and dow broke their winning streak last week. the dollar is the mover last night. this is where we saw reaction to the report from the "washington post" and the "new york times" that the president shared some highly sensitive intelligence data with the russians. you saw the dollar weaken sharply. the biggest move was against the euro. it soared to 110.41.

the dollar wiped out all of its post election gains. the dollar shot up on this idea of all of his pro growth policies and confidence, it wiped all of that out this morning. the dollar weaker against the yen and the pound. but the big move is the euro. >> indeed. big move, 1.10. asian equities, let's look at them. we have seen some gains in china mainly, propping up most of the region. hong kong lower. china up 0.75%. we did have further confirmation the capital outflows is less of an issue once again. we saw the smallest sale of the fx reserves since june 2015. they sold around $6 billion worth in april. that was down from 60 billion or 50 billion the month before improving signs out of china. let's look at european markets. quite a lot of data hitting the tape out of europe this morning.

the result being mixed performance. the ftse at another record high. france and germany just lower. uk cpi, 2.7% year on year, better than expected. it was expected to be 2.6%. does that raise the pressure on the bank of england to have to tighten from a weak position as opposed to a strong position? ppi slightly stronger. house price growth in the uk softer. as for the eurozone, gdp is bang in line with forecasts. 1.7% year-on-year. that was in line with forecasts. experts in the eurozone did hit a record high. the trade surplus also hit a record high at 30.9 billion euros. for the most part positivity in european trade. france down 0.4%. >> let's show you the ten-year treasury note yield. the data in the u.s. has been a little bit soft. that's kept yields low. 2.34, ticking higher this morning. we'll see what we get out of

industrial production. very disappointing new york area manufacturing survey yesterday. dipping into negative territory. as for oil, continuing to strength be. 3% move up last week, 2% move higher yesterday. strong again this morning, 4 the.22 for wti. after those comments from key opec members, like saudi arabia, they want to extend the cuts. brent crude, 52.19. up three quarts over a percent again this morning. gold prices are firmer for the fourth day in a row. that dollar weakness that we mentioned earlier giving a boost to the precious metal up 0.3%. the bank of japan governor said he is sure the boj can withdraw stimulus when the time is right but also added the central bank has room to expand monetary stimulus to achieve the 2% target. the comments could suggest that the boj is in no rush to move in

either direction. housing, manufacturing and retail are in focus. april housing starts and building permits at 8:30 a.m. eastern. at can the 15 a.m., we get april enindustrial production. we have home depot, that's before the bell, also look for numbers from tjx, the parent of tj maxx, marshals and home goods. >> can these retailers bridge back the retail trade after disappointing retailer numbers last week. tj maxx has bucked the trend. off-price has been a big area. both revealing that they may be amazon proof. president trump reportedly revealing highly classified intelligence information to russian officials during a

meeting at the white house last week. this according to the "washington post" and the "new york times." the information is said to have come from a country that's a partner with the u.s. on anti-terrorist efforts and has not been shared with allies because of the sensitive nature. h.r. mcmaster coming out last night in front of the white house to reporters denying that. >> there's nothing that the president takes more seriously than the security of the american people. the story that came out tonight as reported is false. at no time were intelligence sources or methods discussed. and the president did not disclose any military operations that were not already publicly known. >> we have a lot more from washington on this one in just a few moments. as for market reaction, you saw the weakness in the dollar, that's the one place you're seeing it. clearly this brings up more questions, controversy to controversy. the white house still reeling from the firing of fbi director james comey and now this.

the legislative agenda is only so crowded and only so much time and they're dealing with all of these issues, including republicans. we'll watch and see if they splinter away from president trump on these reports. >> we did see a soft dollar yesterday, but no real move in bond yields, so not shaking the equity markets. disney is reportedly the latest victim of a high profile ransomware attack. landon dowdy has the details of that. >> disney's ceo bob iger telling employees that hackers claim to have stolen an upcoming disney movie. he says the hackers are threatening to release the film in segments online unless a ransom is paid in bitcoin. iger did not name the film but disney says it has refused to pay and is working with federal investigators. it is reportedly pirates of the caribbean, dead man tell no

tales. this is the latest demand for ransom. last month, orange is the new black was released before the premiere. look at stock, shares of disney trading flat. back over to you. ford is reportedly aiming to cut about 10% of its global work force amid efforts by mark fields to boost profits and the stock price. reports say that the cuts be ou come from workers in asia. ford says it won't comment on speculation. ford is targeting ining p bill$ stock cuts this year. a u.s. federal judge has

ordered uber to stop using waymo. it showed evidence that the former employee downloaded the technology. the co-founder and ceo of solarcity is leaving the company next month, less than a year after the firm was bought by his cousin, elon musk. lyndon rive says he wants to start up a new company and spend more time with his family. they founded the company in 2006 with help from musk. peter reeve will stay with the company to focus on solar roof panels, and lyndon's duties will be split among other executives. we're getting a peek into what the most powerful investors

are buying. paulson & coholding steady in the gold exchange fund. also trimming in allergan. carl icahn took a new stake in conduent and increased its position in navista and herbalife and sold out of allergan. warren buffett doubled its investments in apple. george soros took a stake in snap ink, also sold amazon, abbott. green light cut its stake in apple, rite-aid and time warner. they also hiked stake in gm and xwra hu yahoo! dropped position in yelp and took a new position to micron. jeffrey immelt is pouring more money into his own company. he bought another 100,000 shares of the dow component yesterday for roughly $28 per share each. immelt now owns more than 2.5

million ge shares. ge has had a difficult start to 2017. the top story out of washington, the white house denying reports that president trump shared highly classified intelligence information with russian officials. tracie potts has more. >> good morning. the report says that the president shared information that perhaps russia already knew, but the intelligence ability lie wally who gave us that information did not give permission for it to be shared. now there's concern that we will not get information if allies cannot be assured that information will be kept classified. this reportedly happened last wednesday when russia's ambassador and foreign minister were in the oval office. we saw the pictures, only because of russian media, because u.s. cameras were not allowed in. it was during that meeting that the post alleges that the president talked about specific information about isis using laptops or trying to use laptops

to smuggle explosives on to planes. some of that had been reported. but the level of spes fiss i s but the level of spes fiss peciy have allowed the sources to be revealed to people who were not initially involved in that. that seems to be the big concern here. here's more about what that threat or concern might be. >> there's nothing that the president takes more seriously than the security of the american people. the story that came out tonight as reported is false. at no time were intelligence sources or methods discussed. and the president did not disclose any military operations that were not already publicly known. >> that is h.r. mcmaster, the national security adviser for the white house. he was scrambled out to give that statement, hoe it did not specifically address what was in

the "washington post" report, which never said the president revealed those sources specifically, but revealed information that could lead to those sources being uncovered. this comes as the white house tries to deal with the fallout from the president firing the fbi director who was investigating his campaign's ties with russia. that's the big picture here, as this white house continues to be in crisis mode daily almost it seems now over new revelations about the president and russia. >> what's next, which republicans do we watch for reaction? who is demanding answers? >> watch lindsey graham, richard burr, a number of people who had been cautious about completely criticizing the president. but we heard from graham last night saying if this is true, it's disturbing. they're calling for more of an explanation than you just heard from the national security adviser. >> thank you very much for that. tracie potts in washington. just to reiterate, didn't really

move bond markets or equity markets. we can see a soft dollar yesterday. >> that's been the credibility factor. the dollar litmus test. not a crazy move, but the you're r euro did shoot above 1.10. coming up, why shares of snap got a big boost this week. stay tuned, you're watching "worldwide exchange" on cnbc. hey. pass please. i'm here to fix the elevator. nothing's wrong with the elevator. right. but you want to fix it.

right. so who sent you? new guy. what new guy? watson. my analysis of sensor and maintenance data indicates elevator 3 will malfunction in 2 days. there you go. you still need a pass.

but we've got the get tdigital tools to help. now with xfinity's my account, you can figure things out easily, so you won't even have to call us. change your wifi password to something you can actually remember, instantly. add that premium channel, and watch the show everyone's talking about, tonight. and the bill you need to pay? do it in seconds. because we should fit into your life, not the other way around. go to xfinity.com/myaccount

chinese fx reserves climbed for the smallest amount in some time, only $6 billion worth were used, compared to 55 billion the month before. they're stemming that tide of capital outflows. european trade, gdp came in in line, 0.5% quarter on quarter. 1.7% year on year. in the uk, slightly stronger than expected inflation data. the ftse 1 00 up to near another record all time high. france declining 0.4%. germany roughfully flay. all in all we're flat in the premarket. the s&p is slightly lower. the other two indices higher. stocks to watch today, vodafone reporting a 6$6.7

billion loss doubled by its troubled indian unit spinoff. the mobile operator said it is rise raising its dividend. easyjet reporting losses due to weakness of the british pound. singapore's gic cutting its stake in ubs because of changes in the lender's strategy and business. gic saying it had reduced its stake to 2.7% from 5.1%. that stock not reacting well. down almost 2%. sears ceo, eddie lampart, vowing to fight back against suppliers trying to take advantage of his retailer. shares up 1.2%. elliott management upping pressures for changes at bhp and calling for an independent review of the mining giant's

petroleum business. snap having its second strongest day since going public showinginstitutional investors bought shares. it's up 0.1% today. when we come back, spacex successfully launching a rocket. details ahead. here's the national forecast from nbc's bill karins. good morning. we are watching severe weather today. possibility of tornadoes. that could mean travel delays. already a lot of storms from minnesota through north dakota and into areas of nebraska. as we go throughout the severe threat today, 13 million people at risk. we have a chance for a tornado, maybe even a strong tornado today. western kansas, western oklahoma, and that northern sliver of texas. the severe threat from techs to minneapolis. the other story is that the heat

wave is coming for the east coast. the warmth spreading up the eastern seaboard. look at wednesday, 95 in the nation's capital. new york up to 91. test out those air conditioners, it will get at and summer-like in the next several days. more "worldwide exchange" when we come back. i love you, couch.

you give us comfort. and we give you bare feet... ...backsweat and gordo's everything. i love you, but sometimes you stink. ♪ new febreze fabric refresher with odorclear technology... ...cleans away odors like never before. because the things you love the most can stink. and plug in febreze to keep your whole room fresh for up... ...to 45 days. breathe happy with new febreze. welcome back. let's get you up to speed on the market action after the zs&p an

nasdaq closed at record highs yesterday. dow futures are down about 4 points. s&p down 2. nasdaq down 1. as for the early action in europe, also sort of an unchanged picture, but some of these markets -- >> quite a lot of data. >> a lot hovering at record highs. >> dax touched one yesterday. >> one source of strength has been the price of oil, surged 2% on top of a 3% gain last week. it continues to rally this morning. there's wti, hovering back towards that $50 level. brent crude, 52.13, up 0.6%. you have that supportive commentary from energy ministers from saudi and russia. and goldman sachs put out a note saying that just increases the chances that other members will follow suit when it comes to cutting production. >> i think the slightly bullish

tone of the eia report saying despite the fact we have seen high levels of inventory, we are seeing that rebalancing. that's another factor why we are getting 0.7% of gains for oil prices today. coming off 2% of gains yesterday. 3.5% of gains last week. there a developing story, federal investigators will be at the site of yesterday's jet crash near a small airport outside of new york city. police say two crew members were killed when the learjet crashed among a group of warehouses and industrial buildings about a quarter mile away from the runway in teterboro airport in new jersey. there were no passengers and no one on the ground was hurt. the cause of the crash is still under investigation. the flanational weather service warned of strong wind gusts before the plane went down. spacex launched a rocket from cape canaveral last night carrying the company's largest pay load yesterday.

the falcon 9 rocket deployed a communications satellite weighing more than 13,000 pounds. it is intended to deliver high speed broadband and communications for ships, airplanes and government agencies. this is the sixth rocket launch for spacex this year. roger federer will not be at ro roland garos. he will skip to focus on the grass court tennis season. it's the second straight year federer missed the french. last year he pulled out because of injury. federer has only won the french open once while thicken hoic ta whim whim tigimbledon title sev times. >> why is he skipping? >> he holds wimbledon as an

important major. >> will we be there? >> we should make reasons for why we need to be. >> do you know who goes to ten nice? former lord king and mark carney. basically we should be there to watch tennis and interview them. sir andy murray's birthday yesterday as well. i hope the final is between you and roger. i do want roger to triumph. >> coming up, the top corporate stories, a round up of global markets, plus the white house denying reports that president trump revealed classified information to russian officials. we're live to washington with the fallout. stay tuned, "worldwide exchange" will be right back. it comes to , looking from a fresh perspective can make all the difference. it can provide what we call an unlock: a realization that often reveals a better path forward. at wells fargo, it's our expertise in finding this kind of insight that has lead us to become one of the largest

investment and wealth management firms in the country. discover how we can help find your unlock.

the white house denying a bombshell report that the president revealed classified information to russia. a live report from washington straight ahead. today's market test. housing will be in focus on wall street with french economic data and earnings from home depot. we'll get you ready for the trading day ahead. and the secret to success. the must-see trending tweets from billionaire bill gates. it's tuesday, may 16, 2017, you're watching "worldwide exchange" on cnbc. ♪ good morning. welcome back to "worldwide exchange" on cnbc. i'm sara eisen. >> i'm wilfred frost. good morning to you from me as

well. i like this song. >> it's been a while. >> i'm not sure i agree fully with it. >> wanted to be a billionaire? >> millionaire would be nice. >> you don't want to be a billionaire? >> i wouldn't decline the offer if it presented itself. >> kind of slow for 5:30 a.m. >> you know i like the slow songs. let's check in the global markets, basically flat at this hour. the s&p just lower with the other two higher, now all three just lower. it comes off a day of gains, around 0.4% of gains yesterday. the negative political headlines out of washington relating to possible leaks to russia did not hurt equity markets. did not hurt the bond market. we did see a soft dollar yesterday. let's look at trade around the world. mixed. asian trade we got shanghai nicely higher. some good data coming out of china today in terms of fx reserves. the fact that much less is having to be used to keep the

currency supported. declines in hong kong. stronger uk cpi inflation data. we have the ftse 100, another record all-time high. gdp data out of europe coming in line with expectations. that was 0.5% quarter on quarter. the trade numbers were pretty good for the eurozone as well. >> as for the broader markets, oil prices have been strong over the last day, over the last week. and they're up again about a half percent for wti. 49.12. brent crude is at 52.10. up half a percent. nat gaz highs higher as well. as for the ten-year treasury note yield, yields ticking higher. the big economic data to watch today, industrial production. 2.34 is the yield. they've remained stuck in the lower range. we'll see if the economic data starts to rebound.

the dollar has really been the place where you have seen reaction to that story last night from the "washington post" and the "new york times" that president trump shared highly sensitive classified information with the russians. dollar seems to be the battleground for that credibility trade. that or the compromise of the trump growth agenda the dollar is weakening against the euro 1.1035. you did see a reaction. dollar weak against the yen and the pound as well is weaker. 1.287 0. as for gold prices, they are higher for the fourth session in a row. that weaker dollar helps gold prices up a little more than 0.3%. housing, manufacturing and retail are in focus. april housing starts and building permits at 8:30 a.m. eastern. at can the 15 a.m., we get april industrial production. we have home depot, that's

before the bell, also look for numbers from tjx, the parent of tj maxx, marshals and home goods. those come out over the course of the morning. to the top story out of washington, the white house denying reports that president trump shared highly classified intelligence information with russian officials. eamon javers joins us now with more. this will dominate the news cycle this morning. >> caught the attention of everybody at the white house. this is the jaw dropper of a story. about 20 reporters were camped outside sean spicer's story in the seconds after this story broke yesterday. it was about two hours before we had any overwhelm fficial respo the white house. let me give you a summary of what it was that the "washington post" reported yesterday that got everybody's attention. they're saying that president trump revealed highly classified information to the russian foreign minister and ambassador in his meeting in the oval office last week. they're also saying that officials say trump's disclosures jeopardized a

critical source of intelligence on the islamic state and that the intelligence was provided by a u.s. partner, and considered so sensitive that details have been withheld from allies. the "washington post" noted it was even withholding some information itself so as to not jeopardize that intelligence relationship. according to the "washington post," the president said to the russians in the oval office, i get great intel. i have people brief me on great intel every day. the gist there is that the president was boasting about how good his intelligence was and may have revealed something intentionally or unintentionally that he should not have revealed and that could damage relationships with a u.s. partner. mcmaster came out last night to the driveway and issued a statement on behalf of the president. >> the president and the foreign minister reviewed a range of common threats to our two

countries including threats to civil aviation. at no time -- at no time were intelligence sources or methods discussed. and the president did not disclose any military operations that were not already publicly known. >> note there that what h.r. mcmaster is denying is that the president did not reveal sources or methods to the russians. that's not what the "washington post" story says, the post story says he revealed specific intelligence to the russians that could lead them to reverse engineer and figure out what the source and methods were. the white house saying he did not reveal the sources and methods themselves. democrats immediately pounced on this. here's the statement from chuck schumer saying if the report is true, it's disturbing. revealing classified information at this level is extremely dangerous and puts at risk the lives of americans and those who gather intelligence for our country. i talked to a former u.s.

intelligence official last fight in the moments after this story broke who said there are two possibilities here. one, that this was unintentional, just a disclosure where donald trump blurted out the intelligence to the russians. that, he said, would be extremely dangerous and reckless. the other possibility is that this was an intentional shifting of u.s. intelligence sharing alliances. that would be a dramatic sweeping and remaking of how the u.s. conducts intelligence and who it conducts intelligence with around the world. the president has the right to do that and has the legal authority to disclose classified information to anyone he wants to. >> is it your information that the white house denied the story? >> they said the president denied revealing methods. >> it's a nondenial denial. >> the post story says he revealed the intelligence itself, not how it was gathered.

and the intelligence itself could lead russians to figure out how it was gathered. >> the thing for markets is whether republicans start ded deserting the president. have we heard anything? >> paul ryan said he wants to hear a more fuller explanation from the president. one thing during the campaign is that hillary clinton was reckless and endangered classified information because of how she handled eher e-mails. now those same republicans will have to defend this. they'll want to know more about it. >> one final thing in terms of how this story is sourced in the first place, that boastful quotation from the president that you read out, as if someone

was in the meeting. i thought one of the issues last week is that so few people were given access. who was actually in the room other than the president, ambassador and sergey lavrov? >> we don't know exactly. we've seen the pictures. the white house did not allow american media in. they did allow russia media in. the russians have taken pictures. we've seen those pictures released. they don't show any of the american officials other than the president. h.r. mcmaster said yesterday he was in the room. it is possible there were other high-level officials in the room at the time, but we don't have a full accounting yet. there may have also been official transcripts made. the white house story discusses transcripts of the story being circulated among a limited group in washington. there may have been an official recording and transcript made, and maybe intelligence officials had access to those transcripts, and that's how it was leaked, or

even from the russians. >> what's on the agenda today? does this derail anything? >> the president of turkey is here. that's a key meeting for the president of the united states. it's a key relationship. turkey is a country that's had political convulsions of its own. the president will want to focus on that today ahead of his trip where he's going to the middle east and europe next week. this will be a big day for the president. but this story will dominate the next coming hours in washington, d.c. >> eamon javers for us in washington. want to get a few top trending stories in. bill gates giving graduates some advice on twitter. he delivered a 14-part tweet storm reflecting on the ways he's grown since becoming a young adult. and calling steven pinker's the better angels of our nature. as of yesterday it rose in sales

rankings by 6,000% in 24 hours. this is a tough one for you. the bachelor's ben higgins and lauren bushnell call it quits. they say it is with heavy hearts that we announce or decisions to go separate ways. the couple got engaged during ben's season of the bachelor. why you express surprise, the show is the fakest thing in the world. >> they were really in love. >> 40 of the most recent seasons. how many are still married? >> 20. >> 5 this has got to be expected. >> that happens in real life. >> 5 out of 40? please tell me. >> they only dated for six weeks. you can't expect them -- >> so don't propose. >> that's the point of the show. >> you can't put a -- then it's fake is my argument. i'm very sorry for these two people. >> there's still leplenty.

>> i wish them happy futures, but it's a complete load of bs. delta air lines will begin testing facial recognition technology this summer it will start at a bag drop station at the minneapolis st. paul airport. the 600,000 initiative will make it the first airline to try a biometric self service bag drop. i don't get this. >> you have people to carry your bags for you. >> you can carry my bags when we travel. facial recognition for bag check? i feel like there are other ways they can make the process more streamlined and faster. bag check is not one of them. maybe. >> everyone just takes hand luggage these days. >> exactly. that's what takes so long to board. pepsi will be running out of new limited edition beverage called pepsi fire. it's built as a cola with a cinnamon flavor. >> i'm into it. >> pepsi is leading on snap's filter feature, some pepsi brand

packaging will feature a code that will unlock a unique snapchat feature. it will be sold across the u.s. for an eight-week run. >> i like everything with cinnamon. >> do you? i'm not sure if i like that. i wonder if warren buffett would? >> he is loyal to coca-cola. >> maybe put it in a glass, presend its a coke. coming up, the must-read stories. as we head out, a check on the early european action. mixed picture. ftse 100 in the uk at a record. germany and france hovering near record highs but softer this morning. their experience is coveted. their leadership is instinctive. they're experts in things you haven't heard of. researchers of technologies that one day you will. some call them the best of the best.

some call them veterans. we call them our team. rumor confirmed. they're playing. -what? -we gotta go. -where? -san francisco. -when? -friday. we gotta go. [ tires screech ] any airline. any hotel. any time. go where you want, when you want with no blackout dates. [ muffled music coming from club. "blue monday" by new order. cheers. ] [ music and cheers get louder ] the travel rewards credit card from bank of america. it's travel, better connected.

welcome back to "worldwide exchange." time for must-read stories chasming our attechasm i catching our attentions. my pick in the "wall street journa journal", the wannacry cyberwarning. the editorial board writing, the episode underscores the folly of the u.s. law enforcement demand that tech companies install back doors into their services and devices james comey ran a public pressure campaign against apple in 2015 and 2016 when his agents

couldn't break the increpe shun of the iphone of the san bernardino killers, and asked congress to mandate a dead kalted build in description key. brad smith, chief legal council writing in a blog post over the weekend was that it was on the nsa for making these v vulnerabili vulnerabilities. >> this was across the board yesterday, a big story front and center. one argument is that the punishments are not big enough to be preventive and have people not try do it this could cause huge damage to societies moving forward. maybe it already has. the punishment needs to be in line with that. >> this was just trying to collect money and ransom. can you imagine disruption -- >> the issue the authorities have, rewind a couple years, if they try to legislate against hard punishment against it, it

looks like the legislation is doing it to cover its own tracks. it's a tough area. certainly -- >> a wake-up call. my pick is in the "washington post." trump has sucked the lifeblood out of sean spicer. talking about spicer and his appearance yesterday was studiously dourenj enjoying himself. he was punchy, pinched and pale. a little wonder, trump has sucked the lifeblood out of him. overall she says it is not the man that he once knew. by taking the job and carrying this through for so long, it's his own doing. >> it's a tough position. >> she also mentions in the article that speculation is rife as to how much longer he has in it. particularly the issue of james comey's firing, trump

disappointed about how the message was portrayed. >> also the melissa mccarthy impression which is hard to get around right now. >> that, in part, sparked this article, she mentions that as well. still to come, housing in mow cuss to focus today. david rosenberg will join us. we're back in a couple minutes.

welcome back to "worldwide exchange." dow futures are now indicated higher. they've done a turn around in the last half hour. up six points. s&p down one. building on a record close for the nasdaq and s&p. let's discuss with david rosenberg frrose rosenbe rosenberg. some of the economic data has come in soft. inflation last week. retail sales. new york manufacturing yesterday. can you square that with this record high stock market?

>> well, you know, the record high stock market has its own particular dichotomy. in the past three months, what's kept the glue together has been basically six high-priced and high-market cap growth companies. outside of that, the rest of the market has moved sideways. you know, there's a bit of a bifurcation between the flashy growth companies and the rest of the market which has been flattish. >> what sort of signals are you getting from data? do you expect the rebound that everybody is looking for in q2? industrial production later today. what will you be watching to confirm it's there? >> right. i think the bar has been set pretty low. if we're talking about an improvement in the second quarter, we have to do better than 0.7% from what we saw in the first quarter. if the consensus say is 3%, 4%, which is where i see it, i think we'll see something closer to

2%. the handoff momentum wise for a lot of indicators is soft. i was never a big believe their all the first quarter slowdown, you could just pin down to the weather. the bottom line is that the trend for this whole cycle, even with the weak first quarter and the improvement you see in future quarters, the average growth rate is 2%. the question i would have to ask people, that would cause anyone right now, based on what they're seeing -- stock market aside -- we've had a bull market and coincided with the weakest economic recovery of all time. with the wealth effect and the things you're talking about, why would anyone think we'll break above this trend weighted growth of 2% at least now or over the next few quarters. you mentioned the new york fed survey. came in at minus 1. it's contracting now for the first time since before the electi election. and i'm not hearing people talk about animal spirits, and about

the survey data. i was saying for a while that the risk is that the survey data is going to follow the hard data to the down side as opposed to the hard data following the survey data to the upside. the facts at hand suggest that's happening. >> on the issue of the harder data, yesterday charles evans said that for an inflation targeting central bank they should at some point in the cycle try to hit their inflation target. does that speak to you to suggest that these expectations, whether 80% slipping now to 70% for a june rate hike look too optimistic? >> i would say if you look at historical record, even if we're at 7 %. the market is still priced 70% by the time of the meeting, the fed will go. that is enough of a probability that they would raise rates, then it's a question as to, you know, what's the forward guidance for anything else for

the balance of the year. i think that we won't find out until the transcripts come out why the fed is raising interest rates now. they may have their own reasons to do it. it can't be core inflation. strip out tobacco prices, core was flat again for the second month in a row. that usually happens when you're in a recession or coming out of one. i would tend to agree with what charlie evans had to say. i go back to what janet yellen said at jackson hole last august where she almost intimated that the fed wanted to start collecting some bullets in the chamber to have conventional policy armor to fight the next recession. the fed is already thinking about the next cycle. there's other reasons beyond where core inflation is now that has the fed moving more aggressively than what anybody would have thought 6, 12 months ago. >> how do you read the market resilience to the headlines,

controversies, the noise out of washington? this morning clearly the white house is on the defensive, refuting that "washington post" and "new york times" story. is it that tax reform was never priced into the market or that the market doesn't believe this derails it? >> i think that you still have a -- a wide swath of market players and pundits who belief that these distractions are not going to derail tax reform or tax relief this year. i still think that's embedded in valuations. so i think that there's a lot of people that are just viewing what's happening in the white house as distractions, but basically just noise. you know, on top of that, you know, you've got the credit markets extremely calm. i think eerily calm. generally the credit markets lead the equity markets. you have not seen spread widening coming out of high

yields. right now, when you look at the vix, you look at the high yield market, credit in general, you know the equity markets are taking their risk cues from these other markets. but if you can me about the economy, of course we can talk about earnings as well. people talk about the year over year growth on earnings, but we're coming off the lowest base in first quarter in four years. i think estimate also come down for the rest of the year. but the market has been extremely resilient and resilient in the face of the weak the recovery in all time. a lot of it comes down to the low level of interest rates and this ongoing view in the public with interest rates as low as they are across the yield curve where do you put your money. there's a lot of that that played into how the markets hung in so well. >> david rosenberg, we have to leave it there. >> thank you. >> i will be watching industrial production today. >> i will keep an eye on the dollar. a bit of weakness last couple of trading sessions.

the euro back above 110. >> home depot earnings will be interesting. >> that's it for "worldwide exchange." "squawk box" comes up next. looking from a fresh perspective can make all the difference. it can provide what we call an unlock: a realization that often reveals a better path forward. at wells fargo, it's our expertise in finding this kind of insight that has lead us to become one of the largest investment and wealth management firms in the country. discover how we can help find your unlock.

good morning. the white house denying a report that president trump revealed sensitive intelligence to russian officials. we have the latest from washington. the euro surging overnight as the dollar fell to a six-month low. a full market rundown. and disney held hostage. hackers reportedly holding an upcoming film for ransom. disney says it's not going to pay up. it's tuesday, may 16, 2017. "squawk box" begins now. ♪ live from new york where

business never sleeps, this is "squawk box." good morning. welcome to "squawk box" on cnbc. live from the nasdaq market site in times square. i'm melissa lee along with joe kernen. becky and andrew are off today. let's see how we're setting up for the u.s. session today. the dow looking to add about 4 points at the open. the s&p looking to give back in the early going here. a look at the currency markets. of note, the surge in the euro topping 1.10 in early trade. traders citing concerns over the reports that the president disclosed highly classified information to russia's foreign minister. more on that in a moment. also traders are saying risk sentiment in the markets have improved. also the yen versus the dollar for the month of may is down 1.7%. look at dollar index here falling to a six-month low against the basket of currencies.