bouncing back. the dow looking to open higher after four straight losing sessions. there could be one blue chip that drags the whole index down. nike posting its slowest quarterly sales growth in years. a deep dive into results coming up. and uber saying good-bye to quebec why they lost another battle it's wednesday, september 27, 2017, "worldwide exchange" begins right now good morning a warm welcome to "worldwide

exchange" on cnbc. i'm wilfred frost. >> i'm courtney reagan in for sara eisen nice to be here with you >> great to have you with us we did lose impetus in the final half hour or so, so much so that the dow about close lower for the fourth straight session in a row. albeit only fractionally that loss meant the bounce back in the nasdaq and the bounce back within the tech sector of the s&p was also less impressive than expected. the nasdaq up 0.15%. the tech sector up 0.4%. the s&p overall was flat expected to open higher today by 34 points on the dow and the s&p and the nasdaq expected to open higher as well ten-year treasury note for you, we didn't see much reaction yesterday to janet yellen's speech on the ten-year we did see the two-year lift a bit. but today it's getting a more pronounced hawkish reaction with the dollar strengthening.

the yield up to 2.29% >> look at what's going on in asia this market pays attention to what's going in the united states when it comes to the fed and janet yellen after the fed chair's comments about looking to continue those rate hikes even without the inflation that the fed would like to see, we saw asian markets react mixed in china things moved higher. the hang seng higher bay half pby a half percent in south korea and japan the markets closed lower weaker yen action on the back of a stronger dollar, but also weakness in autos and financials in japan as well if we look at what's going on in europe as we open this morning, opening higher nearly across the board. we have the spanish index hoping the strongest up by more than a percent. germany up by a half percent

some merger news with ail strom and siemens confirming the merger of the rail operations. we mentioned it yesterday. oil prices are down 0.6% yesterday. flat today but holding on to that $52 a barrel level on wti. dollar board for you the dollar was higher by 0.4% yesterday. most of those gains came before janet yellen's speech. after it there wasn't much further reaction to the upside in the dollar. today there is around 0.5%. the dollar is moving higher against all of those currency pairs. the euro, yen and the british pound. being cited as that relatively hawkish line or two in janet yellen's speech. because slightly delayed reaction for currency pairs. euro has been on a slide eventually the most pronounced of those dollar strength across the board. gold prices for you, down three

quarters of a percent yesterday. now to the wall street agenda, a pair of economic reports, durable goods out at 8:30 a.m. eastern, followed by pending home sales at 10:00. several fed officials are speaking today, including neel kashkari, james bullard, lael brainard and eric rosen grin as for earnings, one notable earning, thor industries shares of nike are low their morning despite better than expected results the company reporting its slowest quarterly sales growth in seven years north american sales are a weak spot joining us is stacey widlitz, a cnbc contributor thank you very much for being with ius results better for nike, but still weak it seems like nike lost its cool. what happened? why did this happen? >> hey, good morning i mean, i think you just

characterized it well. the beat was very low quality. it was, you know, spending was supposed to be up, it kuz dowasn the big question is how does nike get its mojo back, and they're spending very much on innovation and beat, but if you look at the numbers, particularly in north america, we have gone from up 4% to down 3% certainly if you look at assumptions for revenues for the second half of the year, the question is how do you get there with current trend that's what investors are focusing on. >> nike wants to focus on the direct to consumer sales whether through its own stores or the online channel. as opposed to wholesale, even though that's 70%, 71% of sales. is this a smart strategy in your opinion? is this the fastest way to recover what they're looking for and what they've been losing the last several quarters?

>> i think for many brands this is the only strategy as you talked about quite a bit, if you look at finish line or foot locker, it's all about promotions all of these middle men resellers have said they'll be incredibly promotional during this q4. so the brands are trying to pull out or say hey, behave but the problem is for nike only 30% of their business, as you said, is direct. so while they want us to focus on the direct business and the performance, you have the majority of the business really, you know, at the hands of wholesale. i would also point out that direct to consumer has been decelerating >> what about china? that was a bright spot can it pick up the slack of the declines in north america? >> china's been on fire. also europe has been performing well i would argue -- i'm seeing promotional cadence creep in to european markets

watch out for that china has been growing you know, it's not going to make the difference for north america. we need to see that turn around. that's what will make the stock work >> stacey, your thoughts on the impact possibly from the ncaa briarry scann r briar rr rry bribery scandal ane fallout to adidas because of one of the official there's being involveed. what do you see happening with the stock? >> we've seen scandals before. this is a negative pr headline for the brand. i think it's very much when the consumer, particularly the footwear consumer is thinking about purchasing decisions, nike said it, it's all about innovation and who has the hot, cool product who has the best celebrities or sports figures associated with them so i think it will be very short-term blip and probably a

distant memory. >> thank you very much, stacey widlitz thanks for joining us. the commerce department is considering slapping a 220 pr% tariff on bombard areierbombard. bombard area calls the ruling absurd wilbur ross addressed the issue overnight on cnbc asia this is unrelated to nafta there have been trade complaints back and forth since nafta was started. bombardier is specific now there's a couple more procedural steps it will be some months before a final determination is made. but this, with or without nafta, this kind of action would have been brought >> shares of the planemakers today are flat in the premarket.

getting a lot of attention in the uk a lot of jobs they have in northern ireland where the wings of the planes are made >> 220% is no small tariff we may have to do more readingon to twitter. the company will experiment with doubling the tweet limit from 140 to 228 characters. only certain numbers of users will be able to take advantage of the room. they talked about this before the idea of potentially lengthening the characters i guess it's not taken off before today they'll try it again >> i don't know. it's not the change everyone was waiting for. everyone thought they would get an edit button so you can't -- the issue of the edit button, people want it so when they have done a slight mistake. >> like spelling >> without deleting the tweet, losing the retweets.

the risk people doesn't want to do that for, because you have politicians and people we watch editing what they said in the past we'll see. the justice department wants to undo parker hannifin acquisition of clark core. the dodge filed a suit saying it limited the only competitor in the market for products that filtered fuel for airplanes. sonic says it was notified earlier this week of unusual activity on credit cards used at its drive-in restaurants the chain says the activity could have affected an unknown number of payment systems. it's down about a percent. invesco is close to a deal to buy goinge ee ee een guggenh

business shares of cintas are trading higher they beat forecasts by 15 cents a share and are raising the full-year outlook. micron reporting better than expected results on higher prices for memory chips. the company forecast current quarter revenue above analyst estimates. ford is teaming up with lyft to test self-driving cars. they will work together with software allowing ford vehicles to communicate with lyft's app eventually they plan to make self-driving cars to lyft. ford shares are down more than a percent in the early going not convinced we need self-driving cars. that's another story >> maybe not need them, but a question of why not if taxi companies can do it automatically. we'll see. uber is saying good-bye to

quebec the company will stop operating in the canadian province next month to avoid new regulations quebec transportation drivers to undergo 35 hours of trading and have criminal background checks validated by police instead of third parties. the company says it will cease all operations in quebec starting october 14th. interesting difference to what's happening in london. the company is the proactive one to say this is too big of a restriction. in london, the transporter authorities have said you're not already complying with certain requirements, therefore we won't renew your license either way, another major city that they're not going to be able to operate in unless they make some changes. >> follow the rules. >> on the surface of this, i can back uber much more. quebec is adding a stringent new regulation, which they're now saying they're not going to comply to. in london, there was a set of

regulations that the transport authority is saying they aren't complying with and should have been >> 35 hours of training and having a background check by police doesn't seem stringent to me >> the 35 hours of training is a big difference to their business model. if you have a driver's license and a background check, most consumers would be content with that, rather than specific tranlitran i training to be a taxi driver that's yushl crucial to uber's business. coming up, a candidate backed by president trump defeated the implications for the party and the president coming up.

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great. so what are we gonna watch? oh! show me fall tv. check out the best of the best hand-picked fall shows on xfinity x1, online, and the xfinity stream app. thirsty? following a developing story out of afghanistan there was an attack at the kabul airport hours after james mattis touched down there for an unannounced visit. isis is claiming responsibility. nbc news has not been able to confirm that claim mattis is in afghanistan today meeting with the commander of u.s. forces there. this is his first trip to afghanistan since president trump announced a new strategy for that country late last month. ray moore ousting incumbent senator luther strange in the republican runoff.

the results hand a defeat to president trump. he had endorsed and campaigned for strange. john harwood joins us from d.c. with the latest on the results and what they mean >> this is a big setback for republican leaders in washington and for the white house. what it did was show that the conservative base in a state like alabama, the populist working class base simply overwhelmed all of the money that the republican establishment and the business community threw at this race they wanted to keep luther strange in mitch mcconnell wanted him as a member of the caucus he would be a team player. roy moore is a religious zealot. someone twice booted out of office for refusing to follow federal court orders on same-sex marriage, on church state separation he's somebody who said homosexual conduct about a decade ago, said homosexual conduct should be made illegal this is not what republicans

wanted as the face of their caucus, but that's what they're getting in the state of alabama. roy moore's favored to defeat the democrat, doug jones in the general election but it's not impossible that even in a state as conservative as alabama is, that jones, former u.s. attorney under bill clinton, would have a chance to win that seat. so the republican party has a civil war on its hands steve bannon, the president's former chief strategist who went down and campaigned against president trump's choice and for roy moore has vowed to create other primary challenges to other incumbent republican senators and that makes it more difficult for republicans to keep their party together we just saw yesterday that bob corker, a veteran from tennessee, he chairs the foreign relations committee, he announced he will not run for reelection this is a negative development for the business community and republican party leaders in

washington >> address you's you're framing defeat and blow to the republican establishment than it is the president the president was quick to congratulate mr. moore even though he campaigned for mr. strange. >> it's a blow for the president in this sense, that his word is not enough to get voters within his base to do what he wants them to do as you suggested, the people who supported roy moore are people who support donald trump so he went the other way in deference to mitch mcconnell, the senate republican leader it's not all that significant in terms of the president's own people turning out when he went down for a rally last weekend to campaign for luther strange, a large number of people at the rally listening to donald trump praise luther strange were actually for roy moore. but they were there to hear donald trump let's focus on tax and tax reform there's not going to be a vote on healthcare.

is there optimism that tax reform can succeed where healthcare reform hasn't >> not a lot of it there's some republicans are hoping that tax reform is going to be a more unifying issue within the party than health reform think of the difference. democrats are for government programs, higher tacks, more government services. so healthcare is sort of their natural territory for discussion reducing taxes, reducing government is the natural territory for republicans. they hope that will pull their party together they still have big disagreements on does tax reform expand the deficit how deep are you able to cut corporate rates and whose taxes are going to go up to offset which loopholes will be closed to allow that rate to come down and finally what is the effect going to be on middle class taxpayers? the president's talked about tax

reform as something to reward middle class taxpayers the plan he will announce today would have a top rate moving down from 39.6 to 35%. it's likely when we get an analysis, the effect on different income groups, people on the top of the scale will do best under this plan that will be hard for them to defend as it was for them to defend a healthcare plan to the middle class that took away the healthcare of millions of people >> john, thank you very much john harwood for us in washington moving on to the ongoing crisis in puerto rico, the "wall street journal" reports that the federal board overseeing puerto rico's bankruptcy is likely to revisit the island's financial plan this week the board is expected to meet friday and could discuss changes to the fiscal plan it approved in march this could impact the severity of puerto rico's debt investors have been selling

puerto rico bonds since hurricane maria hit. up next, should we all be bracing for a big drop three ways to protect your portfolio with stocks near record highs stay tedun you're watching "worldwide exchange" on cnbc.

welcome back let's get you up to speed on the market action. futures are pointing higher.

we'll see if the dow can turn around the fractional losses posted yesterday. stocks sitting near record highs, some investors are bracing for a pullback if a major downturn is coming what should do you to prepare dominic chu is with us >> as we talk about this idea of markets near record highs, it's not like anybody is calling for this massive correction imminently it's hard to time the markets. there are investment strategists, economists, trying to figure out what to do i spoke to a number of them. one of them is chris harvey who runs quant equity strategies he says with markets at record highs you still have stocks and bonds looking like they're overvalued in those situations look for quality factors in stocks things that will hold up better in times of downturns. so things in terms of the quality of stocks in there that have strong balance sheets, low leverage, things like that better return on equity.

profit margins increasing. there's an etf that tracks this. it's the ishares msci quality driven etf this is a factor-based etf that invests in large and mid cap stocks in the u.s. that have those quality factors. it's identical the performance so far in times of downturn this year, that high quality stock held up better also look at the overall picture for when these things could be a risk scott clemens says look for the corporate profit picture if those things start to turn that could be a bad sign also check out what's happening with investment sentiment. because those investor sentiment numbers could be contrary indicators, when people get too bullish it may be a signal things are going down further and check out leading economic indicators those are always things to watch out for. >> gold has had a good run already. one surprise for being late

cycle is that volatility is still relatively low which means options, puts and calls, not as expensive as they might be >> they're not as expensive. one thing traders are look at is cash secured put without getting too wonky, it's selling options that don't carry as much risk so you can generate some kind of income in the case of selling put options t gives you an opportunity to buy stock at a pre-determined price down below. >> all right dom, great to see you. dom chu for us. still to come, a round up of the top headlines, including a big win for boeing later, one market pro has three hot investment ideas as the weather turns cold he's breaking out fahis ll playbook when "worldwide exchange" returns.

markets now. the big three themes markets need to wash. the commerce department considering a 220% tariff on bombardier jets. and coca-cola debuting a limited edition flavor that will give you a jolt. it's wednesday, september 27, 2017, you're watching "worldwide exchange" on cnbc. ♪ good morning a warm welcome to "worldwide exchange" on cnbc i'm wilfred

frost. >> i'm court court ney reagan i sara eisen futures pointing to a slightly higher open. that was the case yesterday, then towards the end of the session we gave back sol game gs that we had. the s&p ended marginally higher. we take a look at the ten-year not a lot of movement out of the ten-year yield yesterday after janet yellen's comments about remaining with those rate hikes without the inflation that the fed would like to see. right now the ten-year up slightly on the yield to 2.298%. markets around the rest of the world, asian trade is somewhat mixed today japan is lower, and india are lower, but we have got gains for hong kong and shanghai flat. european trade which was broadly flat yesterday, positive today it's up about 0.6% in germany.

we have a weaker euro that's helping some of the exporters there. >> let's look at the broader market action. starting with the price of oil yesterday we saw both crude and brent settle down at the end of the session. this morning wti up, but only marginally at this point, giving up some early gains. we have some api data showing a drop in crude stock inventory and a rise in gasoline inventories as refiners kick up the action turkey threatening to cut off supplies we're watching that eia data today. brent slightly lower, 0.4% look at the dollar yesterday getting some support after janet yellen's comments. we spoke about that momentarily. keeping -- sticking with those rate hikes without the inflation that they would like to see. and the euro here trading at 1.17 that's down 0.4% the dollar stronger against the yen, but weaker against the

pound. look at gold, just to round things off this reacted a bit yesterday, down three quarters of a percent. we are lower today, about 0.7% below the $1300 level at 1292. the top corporate story, nike posting a nearly 24% drop in quarterly profit despite strong sales in china. that was still above forecast. nike's outlook was disappointing. the company expects north american sales to continue to decline. north american sales down. so are all the shares this morning, down 2.76%. in other corporate news, the commerce department is considering slapping a 220% tariff on canadian airplanemaker bombardi bombardier this after boeing complained that bombardier was receiving unfair subsidies for its c series planes.

wilbur ross addressed the issue overnight on cnbc asia >> this is unrelated to nafta. there have been trade complaints back and forth since nafta was started. bombardier is specific now there's a couple more procedural steps it will be some months before a final determination is made. but this, with or without nafta, this kind of action would have been brought >> looking at the shares of the planemakers, fairly unreactive boeing down marginally bombardier unchanged turning to politics. the big focus today is on taxes. the big six will unveil their framework for tax reform sources say the proposal will focus on cutting corporate tax rates to 20% from 35%. president trump is expected to publicly endorse the new framework at a rally this afternoon in indiana turning to the wall street agenda

durable goods out at 8:30 a.m. eastern, followed by pending home sales at 10:00. several fed officials are speaking today, including neel kashkari, james bullard, lael brainard and eric rosengrin. as for earnings, one notable name reporting after the close, rv maker thor industries our next guest sees three big things happening to your money as we head into the fall hea art hogue season joan is joinins >> think about yields being higher, you want to think about getting out of the dividends the utilities for sure, tapals telecom is not playing in that pool this year so there will be an unwind of staples. that's a big thing included in that, they are trading at multiples that are

unsustain ply hiably high. so you should see that monroe tate into the cyclicals. i think we exit this year, closer to 2.5 than 2.25. next year a 3 handle >> almost touching 2.23% this morning. there's been a move up in yields, delayed reaction to janet yellen's speech yesterday. >> she's not the only central banker who wants to normalize rates. the body language of the ecb, bank of canada, normalization is in the works so over the next 12, 18 months i think interest rates will be higher you need to line yourself up with that. yew tutilities are a crowded tr. >> so we speak about planning ahead. tax reform is something we'll talk about a lot today with some possible announceannouncements you don't think it's priced into the markets. if we get it, does that cause us a nice bump up >> especially if we can get something done in the 25%

corporate tax rate, which i think we can bargain around and make things retroactive for 2017 none of that is priced in. any success out of washington being able to lenl lagislate ha been priced in repeal and replace is dead, or at least put off until eternity. infrastructure spend is a dream that's way down the road, too far on the horizon so i think tax reform is the one thing that republicans desperately need heading into 2018 they have had very few victories. this is something that they can accomplish through budget reconciliation, we get something out of the house before thanksgiving, on the president's desk before the end of the year. it's doable this year. i don't think it's in the market i think if you think about the tax rate, if we have a 25% tax rate, we settle on that, the notional tax rate that the s&p 500 pays, 27%. for every percentage point,

that's about $2 in earnings to the s&p 500. would have to add that on for what you're assuming for 2018. think about the russell 2000, they're close to a 33% notional tax rate take them down by 8 percentage points on their tax rate, i think the russell 2000 looks attractive >> geopolitical tensions will remain what's the way to play that? >> the only way to play it really is to understand that the world has not gotten to be a safer place. whether it's iran or other areas. the key is to look at aerospace and defense. otherwise you try to figure out what happens at the end, you can't. there's no economic model for that i think defense spending will be a big part of the bridgette, udt just for us, for everybody aerospace and defense is the big winner all of this. >> thanks very much for that art hogan there. coke launching a new limited

edition coffee-flavored soda the company says it's coca-cola plus coffee no sugar combine traditional taste of coke with real coffee from brazil and carmel undertones. the drink has less caffeine than a latte but more than a classic coke only available in australia now. i don't know if the mix would work >> i love both separate. together, i'm not convinced. >> it's an odd thing to mix with coffee given the base drink already has a caffeinated alternative. we'll see if it works. >> i'll ask mandy if she can try it for us. >> amc is making a bet on virtual reality. the chain announcing a $20 million investment in dreamscape immersive, a vr studio with room scape moogs.

amc is planning on putting six stations in north america and the uk over the next year and a half >> we'll see still think you will prefer a normal sin marexperience. goggle pulled all of its youtube videos from amazon's echo show device if users ask alexa to play a youtube video, it fails. >> battle of the titans there. directv is letting some customers cancel their sunday ticket subscriptions due to the nfl's national anthem protests the satellite operator is also offering some refunds. directv doesn't normally allow users to cancel the sunday ticket package once the nfl season gets underway, but the company is making exceptions this season. a spokesman for at&t declined official comment

>> wow this is based on people, therefore, being offended that people are taking the knee or they're not taking the knee? >> that's a good question. maybe both sides typically once you're in, you're in your sunday ticket is something that's a contract-based subscription model they don't let you cancel. this is a big deal >> i'm wondering to allow people to break their contract, they taking a side? or are they just trying to sit on the fence and people offended either way can do it >> it seems like it's more sit on the fence they didn't officially comment so we don't really know. coming up, we're rubbing out of ti running out of time for tax reform today's must-reads are ahead. here's the national weather forecast from bill karins. one week ago today we saw maria making the devastating landfall in puerto rico. yesterday the heat index was 108. just think how many millions of

people are still without power it felt like 108 in the shade. today the heat index near 100 in many areas it's still very warm no signs of relief from the heat highs will be near 90 through san juan through the rest of this weekend to the weekend. maria affecting still the outer banks. winds have not been too bad. no wind damage of significance has been reported. we have a problem with storm surge on the outer banks and the next couple high tide cycles we cooled off in the great lakes. the east coast continues to be very warm for one more day at yy your last hurrah th'sour business travel forecast more "worldwide exchange" when we come back

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good morning welcome back to "worldwide exchange." let's get you up to speed on the market action. yesterday we saw the impetus seep out of markets towards the end of the day's trade that meant we had four straight sessions of declines for the dow. the dow fractionally lower the nasdaq was up 0.2% that was a small bounce back following a big decline for the tech sector on monday. this morning bouncing back we have gains around the word, particularly in europe we do have a nice bit of gains about 30 points or 40 points for the dow. the yield curve is a big mover this morning didn't really respond much after janet yellen spoke yesterday today people waking up, focusing on the rest of the world, more on a few hawkish undertones and the yield curve has risen across

the board. the yield of the ten-year just shy of 2.3%. 2.29 that's given the dollar impetus this morning as well up about a half percent against the euro, yen and pound. it's time for our must-reads my pick is in the "washington post." it's titled we're running out of time on tax reform the point is seen through the eyes of roy blunt who believes the republicans and trump need a victory soon he says tax reform needs to be done before the december break so the party has something to show for the luxury of the one party rule and the market is counting on it he says the wind beneath the markets wings is the promise of tax reform. americans believe the comparatively high corporate tax rate is a drag on economic growth and they trust congress and the president to deliver an

invehicle ra invigorating cut, but time is running out. art hogan told us he doesn't believe it's priced into the market and if we get it, it's a tailwind >> this is a rare view that people say it's priced in already. most people think it's not because of the failures of healthcare everyone agrees it's a fact their will be good for markets if it arrives. the question is how good >> he points out the center tends to have a good track record for counting votes and looking back knowing how things will turn out. he's a good forecaster my pick is in the final times. titled dyson suckers rally this is more than sir james dyson, a great british end pra n entrepreneur, says his company will deliver an electric car by

2020 they bought a battery company a couple years ago for 900 million. this was a loud and clear statement by a british tech firm, a tech entrepreneur, that he will enter the electric car market within three years time he expects it to go well the column this morning says it sounds incredibly optimistic, but no more so than when elon musk came out and said tesla would do the same thing. interesting take on it something not talked about much yesterday here stateside >> are electric cars a big deal in europe and the uk is the need a big deal >> i think the same thing as here everyone is waiting for the infrastructure to be good enough i would say the push is bigger because there's probably a slightly louder environmental voice and fuel search more expensive. it's a big theme globally.

we're approaching the top of the hour steve is g i it's time to to gget ready fo "squawk box. andrew has more. we have a huge show, we will talk about what happened in alabama yesterday. senator pat toomey will join us. house budget committee ranking member john yarmuth, kevin hassett will try to break down some math issues and for those of who know how much i enjoy eating on television and eating doughnuts on television, nigel travis of dunkin' donuts will be with us i'll have multiple glazed doughnuts. >> i'm jealous i've been lucky to be on "squawk" with you guys when he's been on before >> yeah. i don't know if he's bringing doughnuts. >> he always does. >> i might be disappointed i'm not sure

>> who doesn't like doughnuts? >> andrew, with jealousy i look forward to "squawk box" coming up in 11 minutes time. investors waiting to hear the details of the president's tax proposal our next guest says there are specific sectors that will benefit. we'll go through those in a couple minutes for your heart... your joints... or your digestion... so why wouldn't you take something

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this is a skyscraper whose elevators use iot data and ai to help thousands get to work safely and efficiently. this is not the cloud you know. this is the ibm cloud. the ibm cloud is the cloud for enterprise. yours. welcome back to "worldwide exchange." futures are pointing higher after what was a bit of a slippage in markets late yesterday. we were flat by the end of the day's trade. let's bring in tom lee, founder and head of research from fundstrat global advisors. thanks for joining us. wanted to talk about this increase in yields and the dollar we're seeing early this morning. we didn't really see a reaction to janet yellen's speech yesterday afternoon. are we seeing that reaction now? are the markets taking it as hawkish? >> i think that's a pretty good

description of it. i think at the end of the day the trend has been for this year dollar has been really weak, now as a lot of technicians would know, the dollar is at a level where it may start to rally. with interest rates, i think it's a recognition that in a way globally we've reached the threshold where lower rates is tough to expect given how much accommodation is out there european high yield trading below u.s. equivalent treasuries are telling us rates are extremely low. >> we have about a 70% expectation of a december fed rate hike following the recent fed meeting and the speech yesterday. is that where you stand? what do you expect for next year >> i think that makes sense. i think the fed still has pretty good justification to raise rates. i also think global central banks are starting to think accommodative strategies in general it makes sense that the slelevel of excessive rates

coming to an end >> dom chu said he thinks some stocks are overbought and some overvalued you think it's all appropriate >> i think the market reaction is appropriate if someone is saying there's risks out there we've been cautious and overly cautious because the market has done great this year. if you look at where evaluations are verse the last 90 years, we're at 97% for yields, which means yields are too low we're 96% on pe. so the markets are expensive they're priced for positive surprise or we need to have a correction >> we expect more details today on tax reform. are you optimistic that gets delivered in what kind of factors are you looking out for to decide whether it's positive or negative? or how positive it will be >> i think the probability of

tax reform is really high. of course there's a lot at stake for the republicans here as for the impact on markets, i would speak more to how clients feel our clients think it's unequivocally positive they think this may be a reason to see growth accelerate i think it's -- the history would be tough to know whether or not it's ultimately good for markets. let's say client expectations are what matters, i think it's going trigger them to make more pro inflation bets, pro growth bets that's a big rotation into value. >> so what would your picks be or recommendations to clients be if they follow that thinking and you want to guide them down the road this year value has been a bust strategy it's all been about growth what's interesting is if tightening is taking place and tax reform this could be an escape velocity for the value trade. the poster child is energy stocks they're about to hit their 200

day. oil credits are doing well maybe a big energy trade from here >> let's quickly touch on international markets. many people have talked about a valuation gap and why they have been attractiveyear to date. are you a believer in that still or preferring domestic stocks? >> international stocks make a lot of sense that's where the growth has been as you point out, that's where valuation that been. what's stretched now, is that u.s. value has massively underperformed global value. that's pretty unusual to see u.s. value underperform u.s. growth and global value. so the trade may be u.s. value against global value >> great stuff thank you very much for joining us >> thank you quick look in on the ten-year before we leave close to 2.3%. that's the big mover of the morning. seeing a reaction to janet yellen's speech yesterday,

interpreted as hawkish yields are up close to 2.3 the dollar is up as well about a half percent against the euro, yen and pound. "squawk box" is next what did we do before phones?

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good morning market rebound the dow looking to bounce back after four straight losing sessions but one blue chip will be a drag on the dow likely this morning nike posting its slowest quarterly sales growth in years. details straight ahead it's tax blueprint day what to expect when the gop announces the framework for its tax overhaul it's wednesday, september 27, 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 we're live at the nasdaq market site in times square i'm andrew ross sorkin along with joe kernen and melissa lee. our guest host for the hour, joe ter noranova a cnbc contributor. we are calling it blueprint tax day? >> i saw it, i was -- >> that's what today is. >> any tax day makes me have a sick feeling >> you should not be having a--this is tax reform day. you should get excited this should be a great day for you. >> good for me, but bad for you. on high income earners, your taxes are going up i'll probably be okay. >> we'll see >> new york and new jersey, look out. >> sorkin, that thing you did, >>at stupid web thing.