north korea threatens to test launch a hydrogen bom while iran promises to step up its missile capabilities the latest on both stories straight ahead. geopolitical risks intensify. the impact on the global markets coming up. and brexit front and center today as theresa may is set to deliver a major speech it's friday september 22, 2017, "worldwide exchange" begins now. good morning a warm welcome to "worldwide

exchange" on cnbc. i'm wilfred frost. >> i'm courtney reagan in for sara eisen glad to be with you on this happy friday >> let's get to that breaking news north korea's foreign minister threatening to detonate a hydrogen bomb over the pacific ocean, this hours after the u.s. imposed the toughest sanctions yet on north korea iran's president said his country will strengthen missile capabilities without seeking permission from the community. the country has already unveiled a new ballistic missile capable of carrying several warheads a live report from iran coming up let's start with this new threat from north korea chery kang joins us with the latest good morning good morning so let's put that comment coming out of north korea's foreign minister who is in new york attending the u.n. general assembly into context here because he was first asked by

reporters about what its leader, kim jong-un meant by "the hi highest level of hard line measure" in his statement in reaction to the trump speech at the u.n. assembly earlier this week the one where he talked about "totally destroying north korea if the u.s. and allies feel threatened." the top diplomat also added he would not know kim jong-un's exact thoughts, but i think when asked about that, that's what he came up with, testing a hydrogen bomb in the pacific ocean in an unprecedented scale. north korea so far has conducted six nuclear tests so far all have been done in underground tunnels. if it goes ahead with something like this, it's something never

done before. we don't know whether he has the capabilities or facilities necessary to do so this is the first statement that any north korean leader came out with his own name, has never been done before by any north korean founder now, let's pull up one part coming out of that speech here i pulled up one part he said "trump is unfit to hold the prerogative of supreme command of a country, and he is surely a rogue and a gangster fond of playing with fire, rather than a politician." he's certainly got personal there. >> thank you very much for that. >> china is reportedly stepping up sanctions against north korea. the white house says the peoples bank of china ordered all chinese banks to stop doing business with the nation eunice yoon is live in beijing

with more on that. good morning >> reporter: good morning. well, sources are telling reuters that the central bank has instructed the banks here to abide strictly by the u.n. sanctions against north korea. reportedly we're hearing that the banks are being told not to take on new north korean customers and to wind down existing ones. they've also been told and warned about the economic losses, as well as the reputational risks that they could take on if they defy the order. there's been a document that has apparently been circulating among the banks which said that north korea related business has become an issue of national level politics, and national security however today the foreign ministry dismissed that report at a regular press briefing in beijing. the ministry said what you mentioned now is not consistent with the facts

china always implemented the u.n. security council resolutions in their entirety. they also weighed in on trump's executive order to expand the ability for the u.s. treasury to impose new sanctions saying china is always opposed to unilateral sanctions outside the framework of the u.n. security council. the ministry was not only critical of the u.s. but had sharp words for north korea, saying that it opposed any other types of tests, such as the one that's been suggested by north korea, the h-bomb in the pacific. >> eunice, thank you very much for that report. we should point out the markets in asia are a little soft this morning. but not too pronounced the keyi yakorean index don'wn in other china news, the ft reports that steve bannon flew to beijing last week for secret meetings with the second most

powerful communist party official just about a month ago, bannon declared the united states is at an economic war with china interesting that he took this meeting. the man leading the anti-corruption charge thought to be second most powerful after president xi jinping mr. bannon was in hong kong to speak at the csla conference went on to beijing to take this meeting. it comes ahead of president trump's trip to china. wonder if that's related or not. back to the market picture futures at this hour after the dow ended its nine-day winning streak yesterday the nasdaq down about a half percent. the s&p and dow down about a quarter percent. apple was a big decliner, down almost 2%. the iphone 8 out today less than positive reviews over that also some potent sham conneial y issues coming out for the watch.

week to date, the dow is up.4% the nasdaq down about 0.4% as we come into today's trade, the s&p is flat. we are expected to open slightly negative nasdaq down 10 points. that's the laggard at the open if things stand. the s&p and dow down fractionally we talk about how yields did not rise that much after the fed meeting. but for the week as a whole they have 2.26 percent as we stand here. started the week at 2. -- or ended last week at 2.20. we had a tick up in yields over the last two, three weeks. asian equities wilfred mentioned, we did see those mostly lower across the board overnight on the growing tensions with north korea, with the u.s., and the sanctions that were mentioned out of china that eunice brought to us the nikkei down a quarter percent. the hang seng down a percent the kospi down three quarters of percent. we want to check the picture in europe, which is mixed this

morning. this is actually -- we have a number of different factors at play here. still watching the global picture for what we're talking about for north korea, but also better than expected numbers out of france for the gdp and the services and manufacturing activity that's why the french index is higher >> overall, the eurozone composite pmi at 56.7, prior reading 55.7 that's one of the reasons the euro is a bit higher oil prices, they were slightly negative yesterday, also lightly negative today it's been a decent week, up 1.3% for the week well above 50. 50.50 for wti. not well above, but holding above 50 dollar board for you, eurozone pmi numbers, giving a bit of impetus back to the euro this week, up about 0.4%. elsewhere we have a similar move higher for the yen against the

dollar the pound is flat ahead of theresa may's speech gold prices had a tough week down about 1.6% yesterday. down about 2% for the week as a whole including today's gain, 1,298. facebook says it will begin sharing information with congress on some 3,000 ads it sold to russia-linked accounts during last year's presidentinal election mark zuckerberg vowed to make political advertising on its platform more transparent. >> going forward, maybe the most important step we're taking, we will make political advertising more transparent when someone buys political ads on tvo other media they're required by law to disclose who paid for them, but you still don't know if you're seeing the same messages as everyone else so we're bring facebook to an even higher standard of transparency not only will you have to disclose which page paid for an

ad, but we will make it so you can visit an advertiser's page and see the ads they're running to any audience on facebook. >> zuckerberg said facebook is exploring ways to share more information about election interference saying it's something we must do they got caught in the cross hairs of a lot of the allegations about fake news spreading. interesting moves. >> he loves using his own platform to give updates >> he does >> kind of weird that video, i thought. >> you think >> he just put out a statement >> he wants people to watch video. that's part of their push. >> any way, slightly odd in my opinion. in other corporate news, hewlett-packard enterprise is set to announce job cuts landon dowdy has the details >> hewlett-packard enterprise is preparing to cut 5,000 jobs or 10% of its work force according to reports the move comes as the broader effort to rein in expenses amid

mounting competition from other cloud providers such as amazon and alphabet the reductions are likely to impact workers in the u.s. and abroad and are expected to start before the end of the year hp is the spinoff of hp and offers cybersecurity, cloud services, servers, and other corporate technology under the leadership of ceo meg whitman who has been looking to shed cost on an analyst call earlier this month, hp executives said the company has an opportunity to create an internal structure and operating modeler that is simpler, nimbler and faster and that the firm is tar getting 5 $1.5 billion in savings over a three-year period. back over to you >> thank you very much for that. still ahead on "worldwide exchange," a brexit reboot theresa may about to make a big speech in italy. we'll tell you what you can expect and later, walmart upped the ante in the delivery wars.

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performance in european trade. basically flat today. germany heads to the polls on sunday for a nationwide election where they'll decide whether angela merkel has another four years in power. right now merkel is leading in the polls. we're expected to get the first results on sunday. i think the key thing on that, she's well ahead in the polls. still a large portion of undecideds the key thing for markets is the second place, which is the spd, also very pro europe so not a wildcard chance of le pen or wilders like in the dutch elections. the focus coming out is likely who will be the coalition partner, and how long it takes the government to form it. you might get a void of power for a month or so or longer. it's not a big factor for u.s. markets. to italy where british prime minister theresa may will deliver a major brexit speech later this morning

germana has a look at what to expect good morning good morning. >> >> it's a beautiful day in florence will theresa may deliver a glorious speech later this morning? we'll see. this is the second speech of the year back in january theresa may said one line that did not go down well with her eu counterparts, and that no deal was better than a bad deal since then the tone has softened a bit. we're expecting her to strike more of a conciliatory tone, and perhaps that's the reason she chose to deliver the speech in florence in the heart place of italy, the heart place of europe maybe she wants to send the message that the uk is leaving the eu but not necessarily europe she'll be hopefully giving a little bit more detail about what type of trading arrangement

the uk does see with the eu once the full brexit has happened give it more detail on the rights of eu citizens living in the uk and another matter of the transitional framework this is something the chancellor, philip hammond referred to over the summer. one way to avoid a cliff edge brexit come march 19th would be to remain access to the single market and customs union by continuing to pay to access those markets. the number touted is $20 billio euros. whether or not she makes a reference to that number at the speech, we don't know. we'll find out in a few hours. joumanna, thank you very much for that update. the other reason to make the sfree speech from florence is a chance to be in the beautiful city. >> i was going to say. >> the other point, clearly she's in europe to give the speech, the audience is waiting for negotiators on the european

side, also watching this closely is the conservative party itself, the annual conference is coming up. she also has to make clear her authority ahead of that, continue to sort of hold on to power. that's the other takeaway over the last two weeks she's got to this point and the conference which is coming up without any real successful threats to her leadership. many focused on boris johnson making a bit of a move over the last couple of weeks it hasn't worked she's in power and likely to see through this brexit process. >> so many more details still have to be worked out. we'll be excited to hear her speech. as brexit talks ramp up, round three of nafta negotiations get underway in canada we'll hear more about the talks coming up on "squawk box" with commerce secretary wilbur ross. still ahead, the countdown to christmas is on i'm not joking just ten fridays left until black friday which retailers are best positioned heading into the most wonderful time of the year >> we've got a countdown clock >> why not >> i can't believe it.

>> you can't believe it? >> that's got to be the big effort countdown clock 135 days >> dmroglorious "worldwide exchange" will be right back these birds once affected by oil

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welcome back jamie dimon knocking down speculation that gary cohn could succeed him at the bank. listen to what he said at the delivering alpha >> the success of jpmorgan is

inside jpmorgan. >> let me ask you a question -- >> i have enormous respect for gary don't confuse the two. our company is large, global consumer businesses, cash management businesses, we have several people who are unbelievably talented. >> you will want to hear the full jamny diie dimon interview those delivering alpha.com that speech and interview just posting. the delivery wars just took a twist in news about how lazy americans have gotten, walmart is testing a service that will deliver not just to your door but inside your home so customers can have products delivered to their fridge or freezer. walmart is teaming up with august home so users can watch the process on their smartphone using the home security cameras. get excited. we're ten fridays away from one of the most yushl day crucial dr retail black friday

look at that countdown lock. joining us with a pulse tech on the sector is stacy witlet thank you very much for joining us i wanted to start with walmart this newest test is one piece of all of the innovations that the retailer is experimenting with i guess overall, what is your take on the world's largest retailer and how much this may or may not move the dial for them >> yeah, thank noos for that countdown clock. thanks for the added stress early. walmart has been doing a terrific job in terms of cleaning up stores, paying people, and doing all the right 101 retail things. you're talking about restocking peoples fridges when they're not home this is, you know, not going move the needle here i'm not sure i would want somebody messing around in your home what they are doing is certainly working on a replenishment program. so is target

they're trying to take on amazon prime. almost 60% of consumers out there are on amazon prime. everybody is going after this, trying to get a piece of the pie. grocery is half the business they're doing better in the space. that's the key to winning. you look at toys toys strugg"r"s struggles what a great opportunity for walmart to lead the category this christmas. >> i believe walmart hat bs the biggest share of toys overall. let's talk a bit about the holiday season we have gotten a lot of holiday forecasts coming out this week looking ahead. most of them are pretty bullish. retail investors have been burned in the past what do you take -- or what's your take on the sentiment going into the holiday season this year so the official forecast that you have seen out there are sort of in the 3 to 4 range if you look at investor sentiment, it's terrible

almost 40% of retailers out there have double digit short positions. any huge contrast to this time last year when inventories got alined for the first time and everybody was optimistic this year it's like investors have been burned. the continued transition to online that is crushing operating margins, retail investors are sitting back saying i will not get burned this year again as promotions, all the retail verse said they're not easing back this year if anything, they will be heavier. >> you touched on it who are the biggest winners from toys "r" ss is it not a factor for other toy retailer >> the biggest deal is that it's the vendors. so the vernd vendors get nervoue want to get paid in cash, up

front. that's the real pressure here, the trust factor it helps, it benefits walmart and target who of the big toy suppliers out there. expect to see really early layaway programs from both as they try to grab share from toys "r" us >> that's right. i think walmart's layaway program has begun to make changes more attractive for consumers. here we go sta stacy, thank you so much for joining us appreciate it we'll talk more over the next several weeks. still to come -- >> over the next 135 days, 18 hours, 41 seconds. coming up, everything you need to know for the trading day ahead and battle of the beverages. gatorade just got caught bad mouthing its main competitor we will tell you more about atth we will tell you more about atth when we come back.cloud. . we will tell you more about atth when we come back.cloud.

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north korea threatens to test a hydrogen bomb while iran promises to step up its missile capabilities global market alerts stocks back off recent highs as geopolitical tensions rise. and jamie dimon just made some fresh comments on the north korea threat we'll tell you what he said straight ahe it's friday september 22, 2017, you're watching "worldwide exchange" on cnbc.

good morning welcome back to "worldwide exchange" on cnbc. i'm wilfred frost. >> i'm courtney reagan thanks for joining us this friday morning >> let's get to the markets in a moment first, north korea's foreign minister threatening to detonate a hydrogen bomb over the pacific ocean this comes hours after the u.s. imposed the toughest sanctions yet on north korea iran's president said his country will strengthen nuclear capabilities without seeking permission from the u.n. authority. joining us from tehran is al ali arudzi with the latest clearly sanctions and things were lifted from iran. part of that deal was no more nuclear develop. what's the difference between missile development and nuclear

development? >> according to the iranians a big difference iran says they have no intention of building a nuclear weapon, they never have had, and their missile capabilities are purely for defensive purposes they say they have a right to do this they always reference the war with iraq saying they were badly atacked daught attacks during the iran/iraq war, and because of that iran needs a defense program. as you mentioned this morning, at a massive military parade, president rouhani said they will start a missile program, they will not seek u.n. permission, and a new ballistic missile was unveiled at the parade it has a range of 1,200 miles and is capable of carrying multiple warheads rouhani reinforced his support for yemen, syria and palestine and said iran will always

support the downtrodden countries, despite criticism from the united states there's a lot of tension building between america and iraq wounds are opening up again. we have to see what kind of position europe will take on this europeans are not keen to exit the nuclear program. i don't think they want to make enemies with the united states as well. we are going into uncertain territory again between america and iran and iran has made it clear that they're in no mood to renegotiate any aspect of the nuclear deal i think we can look forward to more tensions between iran and america. >> what could those tensions involve if we did see some kind of collapse of the nuclear agreement that was reached under the obama administration would it be as severe as what we're seeing at the moment with north korea? >> well, it's hard to say. if the deal did break down, if

america did pull out, if america did insist on renegotiating certain aspects of the deal, iran would not stand by that and iran has threatened one of their options is to return to nuclear activities which means enriching at high levels, opening up centrifuges that will ruffle feathers in america and in europe. that would be cause for more sanctions and we would have a lot of isolation with iran they would -- they would get more sanctions placed on them. it will be a more difficult situation than before the jpoa -- >> ali arouzi for us in tehran, thank you. let's get a check on the market reaction. futures are slightly lower despite that sabre rat ming

going on rattling going on around the world. we pulled back up a touch. if markets were to open up now, we would still technically be in the red. if we can look at the ten-year this is something we're watching closely as always. especially after the fed meeting this week. we're sitting back down from where we were prior with the fed meeting reaction so 2.257%. >> asian equities are soft today in light of the ongoing rhetoric not too soft down about 0.8% for hong kong, but the affected markets, korea, and japan, down a little bit less than that european trade is mixed. we had good pmi data across the eurozone this morning. that has led to a strengthening of the euro. we have not had much of a positive reaction to equities.

>> let's check in on oil prices. we hit a four-month high yesterday in the session, but pulled back to close slightly lower, also a little lower this morning but hanging in at $50 per barrel range for wti if we can look at what's going on with the dollar we see the euro a bit stronger against the greenback. as far as the pound, we're pretty flat here the dollar weaker against the yen. if we can move on and check out gold prices. it has been down several days. 1.6%, hitting a four-week low yesterday. we recovered just a bit and up 0.4% just a touch above 1300. perhaps this is some of that protect shup buying against what's going on in the rest of the world politically. let's get back to the big news out of north korea. that nation's foreign minister threatening to detonat

hydrogen bomb over the pacific ocean. a eamon javers joins us from washington with the latest. >> reporter: the president and treasury secretary yesterday speaking at the u.n. seemed to signal new cooperation with china in terms of cracking down on north korean financial transactions with chinese banks. they said that was an encouraging sign they also unveiled new sanctions via an executive order by the president of the united states here's has we know about what the sanctions will do, and their intentions the president saying that they target the sources of funding to north korea. they expand sanctions to individuals and companies who finance or trade significantly with north korea and identify new industries that treasury can target with sanctions. they go sector by sector and list which industries can be affected they said the chinese central bank had sent a message to chinese banks telling them they need to comply with the new u.n.

sanctions blocking north korean final transactions if that's held up that could be a significant piece of cooperation between washington and beijing that we have not really seen before in this north korean puzzle so u.s. officials suggesting that was a positive development. over in north korea, not greeted warmly kim jong-un releasing a statement last night blasting president trump. here's what the north korean leader had to say. he said on behalf ochf the dignt and honor of my state and people and on my own, i will make the man holding the prerogative of the supreme command of the united states pay dearly for his peach calling for totally destroying the dprk, i will surely and definitely tame the mentally deranged u.s. dotard

with fire. so what steps will north korea take will there be another nuclear test the way we've seen over the past couple of months. let's talk about facebook. they say they will begin sharing information now with congress on some 3,000 ads sold to russia what do we know about this >> facebook has been under so much pressure over the past couple of weeks since the announcement in which they said that russian agents had anonymously purchased ads on facebook during the presidential campaign designed to help donald trump and hurt hillary clinton using divisive and inflammatory rhetoric they said all that, but didn't release the content of the ads yesterday mark zuckerberg took to facebook live to say that facebook will be turning over 3,000 of the ads what they found so far they'll turn those over to congress, they say, which is the appropriate venue for this

of course mark zuckerberg knows that once they turn those over, it's likely that those will leak and get into the public domain and the rest of us will be able to see what the russians were saying anonymously on facebook during the course of the campaign here is mark zuckerberg yesterday. >> going forward and maybe the most important step we're talking is we're going to make political advertising more transparent. when someone buys political ads on tv or other media, they'r required by law to disclose who paid for them, but you still don't know if you're seeing the same messages as everyone else so we're bring facebook to an even higher standard of transparency not only will you have to disclose which page paid for an ad, but we will make it so you can visit an advertiser's page and see the ads they're running to any audience on facebook. >> as you can see, that goes further than just the idea of the russian ads, what facebook

is saying there that they'll broaden the disclosure in terms of political advertising generally on the surface they also said they've been in contact with election commissions in countries around the world. >> i agree, it does go further, but i take slight issue with his tone of saying we'll go even further on the transparency issue, because it's sort of about time, all sorts of issues of data intrusiveness. >> they realize that they were in untenable positions you can't say the russians meddled in the u.s. election using our service, in a sophisticated effort that ran 3,000 ads and then hide the ball and not show what ads were you owe that to the american people is what facebook decided. there more broadly they're f trying to get on the side of democracy and transparency we're so far behind regulations on the internet versus television ads where the candidate comes on and

says i'm candidate joe, i approve this message we don't have those regulations forcing that disclosure on facebook, twitter and social media services this is a step in that direction. >> thank you very much have a great weekend speaking of facebook, time for our top trending stories facebook will also start serving ads based on your location including the stores you visit users have the ability to opt out by not allowing the app to track your location. i don't know if folks know, but a lot of apps actually track your location and send you push notifications while in stores. because you opted in without realizing it >> i don't think it's enough of a back out to say you can on the out of it. almost all of these apps hardly work unless you allow location services >> you don't know what you're opting into. >> even if you say yes to location services, if you don't, some are like we don't know where you are, we can't allow you access at all to the app >> exactly >> i think it's all

extraordinarily intrusive. bring on that extra regulation that evens the playing field. gatorade is in hot water the company reached a $300,000 settlement with california for bashing water in the mobile-game bolt players guide track star usain bolt around while he collects coins and bottles of gatorade, but he must avoid water because it slows him down. the california attorney general said gatorade portrayed its product positively and said water had negative effects >> when i ran the marathon, i had a little too much gatorade, last five miles, i got a little sick then i couldn't have water

i should have just had water trix is back to its old ways they are reviving artificial flaifrs a flavors and colors after going all natural. trix says customers have been complaining after debuting a natural version of the breakfast fo food now classic trix will be back on shelves in october alongside natural. >> i don't think any cereal available in the united states of america is natural. the amount of sugar on everything is unbelievable i had raisin bran this morning, nothing but sugar. >> the sugar makes it tasty, did you taste it >> like every cereal here is covered. now i'm used to it if i go home, i'm like what is this bird food you're feeding me we will switch focus, moving

on to sports the rams beating the 49ers 41-39 last night making it the highest scoring thursday night nfl game ever the loss deals another blow to the 49ers. they' they're 0-3 as they hit the road for a three-game stretch >> was there anybody in the crowd? that's been a problem. no one is sitting there for that stadium. kind of a shame. the rams moving to l.a >> yeah. the 49ers, and -- both teams have had low attendance. >> should have been there last night. 41-39, good game. germans head to the polls on sunday to determine the next chancellor what you need to know and how the markets could react straight ahead. fiber-enabled broadband to more than 65,000 fans.

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welcome back to "worldwide exchange." i'm wilfred frost along with courtney reagan. time for our must-read stories my pick is from the times, it's titled the bluffer's guide to sunday's election in germany penned by matthew elliott. it is exactly what title says, it's a bluffer's guide to the german election. i enjoyed reading it it has the latest on this election and a look back on the last three elections that angela merkel has been involved in, and how they play out and how this one is slightly different. well worth the read if you're not yet in the know of sunday's vote >> you said you don't think this

will ab market mobe a market mot >> we don't have candidates like le pen or wilders. we have the afp in germany, but they're polling in the low teens. not likely to be involved in coalition discussion so it's merkel followed by the spd, also pro europe it's certainly interesting to keep an eye on probably not going to affect u.s. markets my pick is in the "washington post." it's penned by wilbur ross these nafta rules are killing our jobs he's in favor of renegotiating nafta, the rules of origin which he says were intended to restrict non-nafta content in the final manufactured goods that we buy. he says our nation's ballooning trade deficit gutted american manufacturing, killed jobs and zapped our wealth that will change under president trump and

rules of origin are just the beginning. of course it's a complicated issue, nafta i spoke with the best buy ceo earlier this week, it is an international company because they operated both mexico and canada he said the rules do need to be modernized certain things didn't exist then that exist now it's a complicated piece of trade. wilbur ross will be on "squawk box" to talk about it. >> that's right. stay tuned throughout the morning because he is the headline guest coming up on "squawk box" today commerce secretary wilbur ross, first on cnbc interview. he'll talk about nafta, also trade with china off the back of this u.n. week, lots of news to discuss there. also bob moritz, he's back from beijing. he'll share his take on everything from trade to u.s. tax reform "squawk box" continues straight after "worldwide exchange. we still have more to come

on "worldwide exchange." stick with us. the latest threats from north korea and iran keeping investors on edge. a deep drive into the global market reaction when we return futures slightly lower you're watching "worldwide exchange" on cnbc. for the holidays,

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last i checked, stores don't take "words." some do. not everyone can be the poetic voice of a generation. i know, right? such a burden. the bank of america mobile banking app. the fast, secure and simple way to send money. welcome back to "worldwide exchange." jamie dimon weighed in on the risk of nuclear war from north korea. here's some comments he made overnight to cnbc. >> i think it would be a mistake to allow a person he who's like that to have a nuclear weapon. that nuclear weapon can reach tokyo, beijing, shanghai, manila, seoul, korea i think it's a scary concept most peoplethat have nuclear weapons today responsible. he doesn't seem to be responsible. so, no, i think that would be a mistake. >> jamie dimon speaking in new delhi, india this morning. let's talk more about the geopolitical risks out there

joining us is stevie inine iniin whiting. jamie dimon also said it's not an eventuality he expects to happen, to knit ahit any of thoe cities he listed is that why markets are relaxed this morning? selling in asia, but not too pronounced >> we have to remember this is a seven decade long cold war how long it continues as a cold war is unclear the technology is ever more deadly, dangerous. we can't tell there's some sort of nuclear conflict. i just remember, too, if we look at since world war ii, there's been 20 cases that we can come up with, six involving the koreas, you know, where there's been some serious security threat, and our financial markets have been higher, global equities, u.s. equities higher one month later on average

we want to be careful. something that ends a business cycle, a downturn that lasts a year and a half is different from that. using this in a market context is not the right way to look at the severity of the event. >> let's bring it back to markets. the big event of the week was the fed. we saw a big reaction in yields afterwards, but that already changed direction. it was a quick one-day reaction, the dollar of tsofter yesterdayd today. >> it's fortunate that the reaction was rather small initially. i don't think in the grand scheme of things the federal reserve is anything other than going very, very modestly slowly in terms of tightening what they plan to deliver is half historic tightening cycle markets have been priced for a more dovish fed than that. we had powerful rallies and markets that we overweight in emerging markets

we've seen a significant speculative repositioning now short the u.s. dollar, long u.s. treasuries so that can create bumps in the marketplace. we want to be careful that the u.s. dollar rallied for six years heading into 2017. there was expectation for massive interest rate outperformance in the united states that's not going to happen we're sticking with our comfortable overweights. >> let's talk about your picks fof inve for investors. you're neutral for the united states, despite the fact we had that rally that's been strong for quite some time. the dow has been up 600 points or something in the last nine sessions why are you not so excited about the u.s. what if we get tax reform or see 3% gdp >> tax reform means we'll have a refocusing on u.s. assets for a while. tax reform would affect growth

for a year and change things meanwhile if you look at international equities, we have a 40% discount in emerging markets valuations below their long-term average valuation. places like brazil are just coming out of an economic slump. the u.s. is in an eight-year expansion. if you look, we've been overweight u.s. assets, telling investors to overweight the u.s. dollar for most of the last several years, but that played out in the marketplace already the opportunities are international assets and equities side. fixed income the u.s. ranks more competitively with higher yields >> steven, thank you very much as always. about 20, 30 seconds left. chart of the week? >> i look at retail, with the rlx, or the xrt, because if you can see here the xrt is down, but we have bullish holiday forecasts. the sentiment is not following along. >> i went for the banks etf.

a steady and pronounced rise over the course of the week. yields have risen following fed tightening that is it for "worldwide exchange." have a lovely weekend. "squawk box" is next

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iran promises to step up its missile capabilities the latest straight ahead. traders are on high alert. geopolitical risks intensify a full rundown of the reaction in the global markets. facebook is handing over 3,000 political ads to congress that were likely purchased by russians during the presidential campaign if you believe in numerology or that tomorrow may be a problem,

get your trades set up the 23rd is supposed by theend of the world "squawk box" begins now good morning welcome to "squawk box" on cnbc. we're live at the nasdaq market site in times square i'm andrew ross sorkin, along with joe kernen and melissa lee. north korea's foreign minister threatening to detonate a hyd hydrogen bomb over the pacific ocean. this hours after the u.s. imposed the toughest sanctions yet on north korea china also stepping up sanctions against north korea. the white house saying the peoples bank of china has now ordered all chinese banks to stop doing business with that nation a lot more on the north korea threat in just a couple of minutes. separately, news breaking a few hours ago that iran's president said his country will strengthen