the bulls take a breather. stocks point to a lower open on wall street following six straight days of gains for the dow. don't try us that's president trump's latest warning from north korea as he continues a trip through asia. and snap plunging as results disappoint again we have the full details for you. it's wednesday, november 8, 2017 "worldwide exchange" begins right now. ♪ >> good morning. welcome to "worldwide exchange" on cnbc. i'm sara eisen >> i'm mike santoli in for

wilfred frost today. >> good to have you here one year later we will take your temperature on this market >> feels like a long time in some ways, real quick on others. >> that night, election night, wilfred and i were here at this time, i think we started anchoring 2:00 a.m., futures were down 800 points then they came right back up >> even if you thought that it was going to be fine it was going to come back, you didn't think it would be within hours >> you didn't think you would see -- maybe you did, 20% climb since. >> one of the most profitable years in memory. we'll talk about one-year later since the trump election victory. futures now indicating a mixed start. dow futures down three s&p down one nasdaq up two points this after yesterday stocks came off record intraday highs to close lower. the dow did manage to keek out a gain the ten-year treasury note yield, lower yields, just when

you thought they would go straight up, we go back down at a three-week low on the ten-year yield, hovering around the 2.30 level there's been demand for treasuries >> trapped in this range people are concerned, beginning to get concerned about the narrowing yield curve. 2.46 was the ten-year yield less than two weeks ago >> the question is what happened we didn't get weak economic data got tempered optimism about the tax cuts which we'll talk about. it is worth watching >> certainly is. look at equity markets around the world. asian stocks are pretty well mixed. not too big in terms of movement mixed trade data out of china. exports rising less than expected imports did top expectations china's trade surplus with the u.s. narrowed in october to over 26$26.5 billion. shanghai market just barely above the flat line. nikkei flattish, and south korea with the president right there up a little more than a quarter

of a percent look over in europe. also relatively modest moves steady markets slightly to the down side. notable mover there is france. some of the french banks are weighing on the indexes there. the ftse just below the flat line italy down a half of a percent spain down slightly left than that. oil prices shot up in recent days they have been under pressure today and yesterday. wti down 0.2, but still above $57 per barrel you can see the climb there. we will talk about that and the saudi situation later. brent crude, 63.73, flat this morning. nat gas is down a percent. as for the u.s. dollar, the dollar was hovering near multi-month highs there. going the other way this morning. the dollar weaker against the yen, slipping below that 114 level. we were firmly above it yesterday. the dollar is weakening a bit against the euro, just below

that key 116 level the pound weakened against the dollar gold prices on the flip side, usually higher off the back of the weaker dollar, and they are. your top corporate story, shares of snap are deep in the red after the company reported a huge revenue miss after the close yesterday. landon dowdy joins us with more on that mover. >> good morning. that's right shares of snap sinking after weaker than expected third quarter results due to a miss on revenue and user base. the disappearing video app posting a loss of 14 cents per share, slightly better than the loss of 15 cents the street expected revenue coming in lower at 207.9 million compared to 236.9 million. the daily active users, a key metric for the firm making a disappearing act with 172 million. the firm saying the weaker

quarter is due to a change in how snap sells ads, add to that snap is losing market share to instagram. co evan spiegel saying the firm is working on responding to user feedback take a listen. >> one thing we heard over the years is that snapchat is difficult to understand or hard to use our team has been working on responding to the feedback as a result we're redesigning our application to make it easier to use. >> snap shares are on the decline. down about 18% in early trading. back over to you >> this -- it's one thing to miss all the numbers, but this conference call was disappointing. yes, this is the third quarter since snap has gone public we've seen about a 20% move lower the previous two times as well, but that conference call where evan spiegel said what we're doing is not working we have to fix the features, it's too complicated we have no idea how the teens

will react to this i think that got push back from analysts, like you're a public company, you're just discovering this now >> and that was not new. the story when it came public was facebook and instagram copying snap nap is the one playing catch up when itcomes to a business model. it's a work in progress in terms of how they're selling ads, how they feel like they can get user engagement and all the rest of it so the stock down near lows basically. looks like where it will open up, under $13. that's basically where the lows were recently. clawed back up to 15 huge questions on whether it's ready for public company >> ready for prime time and how they'll fix this and turn it around that stock a big mover in the premarket. president trump issuing a stern new warning to north korea. >> today i hope i speak not only for our countries, but for all

civilized nations when i say to the north do not underestimate us do not try us. >> the president dlelivering those comments before departing for china. the trumps arrived in beijing a short time ago kayla tausche is traveling with the president and joins us with more live from beijing good to see you. >> good to see you, good morning. that speech by the president was the sharpest rebuke yet so far on this asia tour. the press secretary says he will decide by the end of this trip whether to name north korea a state sponsor of terrorism in that speech he implored the two countries with the most leverage over north korea to exert it >> we call on every nation including china and russia t fully implement u.n. security council resolutions, downgrade

diplomatic relations with the regime and sever all ties of trade and technology it is our duty to confront this danger together. >> those remarks coming after a surprise attempted visit to the demilitarized zone between north korea and south korea that was aborted because of fog and low visibility just about five minutes away from the dmz it was a surprise trip, though sarah huckabee sanders said they were considering it and talking about it weeks before the trip began. then the president headed to beijing where he met with president xi and officials throughout the afternoon in a more casual setting, just visiting the forbidden city here a few moments ago. a white house official says trump trump will ask china to cut financial links were north korea. the treasury department issued various sanctions, this is expected to be a stern warning to china even as the u.s.

pursues financial corporate deals with the country that happened across town tonight with commerce secretary wilbur ross in a signing ceremony, officially issuing various deals. among them a deal for 50 helicopters by bell helicopters and a 1$1.2 billion deal to sel american beef and pork on jd.com in china they're relatively small numbers on the grand scheme of things, but the president said he will do anything to chip away at that 3$347 billion trade deficit >> the trip to china was painted as consequential from an economic point of view and from a military point of view with north korea. this is different than visiting south korea and japan where you see more outward december plays of friendship with the trump administration what can we expect between xi and trump? what is the reception like for him in china

>> the reception at face value is friendly. but japan and china are allies and military partners with the united states. that's why you heard the president talking about military cooperation. china has long been an adversary of the united states it's a tenuous relationship at best the president has been voekly kr vocally critical of their economic positions, that's a position he's not likely to walk back from and that he will likely hold over president xi in getting them to tighten the screws over north korea. we'll see how that strategy place out on the ground. >> kayla tausche, thank you very much in other political headlines, it was a big night for the democrats. ralph northam defeating ed gillespie to win the virginia

governor's race. murphy is new jersey's next governor beating kim guadagno. it wasn't a full sweep in a congressional election in utah, john curtis was voted into offi office >> "new york times" leads today with democrats score two big victories in trump rebuke, which i think is going to be up for debate today >> will be up for debate the exit polling in virginia hinted at that not necessarily enough information to come up with that >> already on twitter the finger pointing begun president trump tweeting from his asia tour that gillespie was never on board with him. if you look at some of his policy positions and stances the last few months, he did embrace the nationalist agenda that will be something to talk about for sure investors are paying attentions to the midterm, i think, right >> yes i think that will start to come

into view. the "washington post" is reporting the senate could delay corporate tax cuts until 2019. that's a full year later than the house proposed in their version of the tax reform bill the delay would save 1$100 billion. the "washington post" also reporting that senate republicans are planning to eliminate the state and local tax deduction entirely when they roll out their version of the tax bill chi don't thi which i don't think will be popular with the 0 60 or so republicans in the blue states >> and this delay won't be popular in the markets either. i think you'll have a lot of back and forth in this process >> watch the dollar. the dollar is weakening today and has moved on tax reform headlines a bit. >> yesterday small caps down more than 1% >> yes i saw that. turning to today's agenda earnings will be the big forekes. wendy's reports before the bell.

after the bell, 20th century fox, monster beverage, square and hostess brands, maker of twinkies, snowballs. still ahead, we're drilling down on oil's big move crude oil is up 15% over the past month. and it's been one year since donald trump was elected president. in that time the market has seen some bigley gains. what is the next move of the trump trade? stick around easy to analyze and take action? how about some of the lowest options fees? are you raising your hand? good then it's time for power e*trade the platform, price and service that gives you the edge you need. alright one quick game of rock, paper, scissors. 1, 2, 3, go.

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call, visit, or go to xfinitymobile.com. >> welcome back to "worldwide exchange." let's get you up to speed on the market action. a cautious but steady open at least indicated by the futures s&p 500 looking like a 2 point loss at the open the dow, which is the only index which finished in the green yesterday, backing off from a record high at this point down 8 points nasdaq down 2 points that just missed an all-time high yesterday look at small caps, that's where the action was yesterday the average stock down a quarter percent in the market. the russell 2000 down more than 1% part of this story is financials, very high weighting in the financials. and then perhaps you had this caution about trying to not tries in tax reform too quickly because small caps seem like

they're levered to that market that might be where the action goes today look at oil. crude has been on quite a run. it seems like it's settling out a bit with too much going on $57 a barrel still, wti crude. >> the context on small caps, i didn't realize, they are up more than the s&p 500 since election day last year. >> almost all of it in the first five weeks after election day. year-to-date, they lagged. >> they moved more with the dollar, which spiked up after the election >> they are a reflation trade as well. crude has been on a tear over the past month, up 15%. the global head of commodity strategy at rbc capital markets joins us now the big news is saudi arabia is still rippling through the market, at first causing oil to rise there's a lot going on there >> i was in saudi arabia a week before we had this major

political purge. 11 princes detained. >> did you have any idea something like that was going on >> no. we had two crown princes dismissed in 24 months he's announced an ambitious reform program so he moves extremely quickly. this time of massive arrest is unprecedented in saudi arabia. no one knows quite how it will end. >> no one knows how it will end in saudi arabia, but i wondered about the kind of chain of logic there from what's going on to higher oil prices. does it mean more supply discipline or we don't know what will happen? >> it comes against a back drop of a tightening market demand has been good for oil the opec cuts are likely to be extended so improving fundamentals is the back drop. we don't know will there be

instable ility in saudi arabia? i think this means they will stick their plans with oil continue the opec cut. continue the policies like selling part of saudi aramco that necessitates a higher oil price, but you also had a near missile strike near riyadh rising rhetoric towards iran, towards the lebanese government. there's a concern about the broader regional concept >> one of my must-reads talking about a more aggressive salmon >> you think about what happened on saturday, you had this ballistic missile fired at riyadh from yemen. at the same time they're rounding up these ministers. you had mohammed bin salman say this was a declaration of war by the iranians you have a foreign policy issue and a domestic issue

>> what does your forecast say >> we will have to watch developments it comes against the backdrop of the venezuelan debt crisis there's a situation now where they have to restructure the debt, it's hard because of the sanctions the u.s. put in place. if we get a sovereign national default with an oil company default that could be disastrous for venezuelan oil production. >> that's mostly what matters to the market production collapses. >> everyone is watching have we seen the return of the geopolitical risk premium and will barrels have to come off the market in a place like venezuela. >> not enough time today with everything going on. still ahead, social media makeovers. snap is not the only app getting a facelift we'll tell you about the big changes coming to twitter and insta gravm whha instagram when we come back. what's the value of a walk in the woods?

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exchange." i'm sara eisen here with mike santoli. time for some top trending stories. sean diddy combs is setting the record straight on his name. he said he was only joking about changing his name to love or brother love you may recall earlier this week diddy posted a video about his new moniker and it went viral. he said he has come to the conclusion that you can't play with the internet. >> maybe the lesson is you can't

play around when you already changed your name a hundred times already. >> i was at charity event with him recently, i didn't know how to address him mr. diddy, mr. combs >> mr. combs seems safe. >> twitter is officially doubling its character limit for all users. most tweets will fit 280 washers, wash e e characters, up from 140. two users found a loophole in the feature and took it too far. tim rassit with the help of a hacker account sent out a tweet that was 35,000 characters long. both users were briefly suspe suspended and the tweet was deleted. >> there's a lot of pushback against this, including from loyal blankfein who is new to twitter. he has an opinion. new at this but like the

discipline of 140. makes you commit no room for on the other hand. 280 characters is practically an essay. >> there's something about the constraint creating more -- >> it's always frustrating, but, yes, it's concise. i wonder what 280 will do to the whole -- what about president trump? >> yeah. >> will he speak in more full sentences? >> maybe not as many creative abbreviations. instagram is helping users up their flashback friday game the social media app is adding a feature that allows users to add pictures or videos more than 24 hours old. when users add a past image, instagram will add a sticker to the post with the date that it was taken. i like that. throwback. vintage. >> isn't it amazing the last two stories, these arbitrary protocols of these social media things dictate how we engage

with the world it's amazing >> i agree uk retailer browns with a new take on a dry cleaner bag. the $700 dress is a plastic slip-on design with the words free pick up and delivery on it, and a paper collar that says we heart our customers. >> and probably not dry clean friendly i love that. >> obviously a stunt >> i don't know. >> a bit of poking fun >> you can put anything on a dress. tonight on cnbc, catch the series premier of "the job interview" an inside look at the world where the words you say, the clothes you wear, the expression on your face can mean the difference between success and failure. that premieres tonight at 10:00 p.m. right here on cnbc. still ahead, a round up of today's top headlines and a check on the global markets when we come back. and we're live in asia as

president trump gets set to meet president xi jinping stick around, "worldwide exchange" will be right back

stocks are in a holding pattern as investors take a breather fromthe rally. snap drops and taking a beating after disappointing results. and the trump trade turns one. a look at the big market moves on this first anniversary of

president trump's election wednesday november 8, 2017 you're watching "worldwide exchange" on cnbc. good morning welcome back to "worldwide exchange" on cnbc. i'm sara eisen >> i'm mike santoli in for wilfred frost. we are watching beijing, washington, virginia futures now looking like a slightly down open kind of in a defensive tone the last couple of weeks as the headline index has made new highs. the s&p 500 looking at less than a two-point decline. dow jones average down 4 at this hour it did close at a slight record high yesterday the nasdaq pulling back a bit. looking at the bond market ten-year treasury note under pressure seeing that tightening and

narrowing of the threreasury yi curve, maybe a range-bound global yield 2.31% on the ten-year note it is firmer at the moment it's down from 2.45. >> do we know what's behind the drop >> you know, it seems as if the global demand for safe assets is strong enough when you have the german ten-year yield below 0.4 or so. >> global story. >> anchors all yields. and inflation, for all the talk, has not been able to get kicking. it may be about a structural lower inflation environment. >> and the narrative that central banks are ready to normalize or take the punch bowl away it's slow moving >> very. >> even the bank of england, which raised rates, it's considered a one and done to get their economy past the bout of inflation for brexit as for asia overnight, mixed picture. it's been strong the nikkei still hovering at multi decade highs we're talking highest levels since 1992 pulling back overnight a tenth

of a percent hong kong closing lower by a third of a percent we saw gains in the shanghai comp in china and the south korean kospi most of these markets in the last year since the trump election have outperformed the s&p 500. we'll get to that in a moment. in europe, under some pressure watching the bank stocks some weakness in france and the banks. the dax, which was up 30% in the last year, is plflat this morni. >> all the non-u.s. markets are up more than ours here oil has been on quite a un had a good supply-demand story wti crude backing off a bit, about a tenth of a percent

57.12. brent at 63.80 natural gas had a good pop yesterday, it's down just under 1% looking at foreign exchange, the dollar firmed up lately, but now it's a bit -- you would call it mixed now. it is slightly weaker against the yen, the euro and just slightly up against the pound. gold has been -- it's been range bound, but a bit stronger today. you can see it up $6 an ounce, a half percent to 1,28 2. shares of snap getting clobbered after user and revenue growth were below wall street expectation. revenues at 2$208 million $29 million short of expectations snap reported 178 million daily active users, that was below the 182 wall street was expecting. average revenue per user coming in at $1.17, 13 cents shy of

estimates. the social media company said it is simplifying its snapchat app to reach a broader audience. that had to be worrying investors on the call. evan spiegel not taking the arrogant tone, but saying we're trying to figure it out. it's too complicated we need to revamp it we don't know how the revamp will affect or core teen users >> is this just a niche platform or is it going to be something broader? do we care about user growth one number that did not come through was average revenue per user, it was expected to be 1.30, it's 1.17. still up, but the case has been facebook is above $4 per user. they're not closing the gap fast >> and they have this detrovote

group of teen users, but whether advertisers have bought into that without seeing sharp user growth on that front is an open question >> president trump continuing his trip through asia. he arrived in china a short time ago. he's having a dinner with xi jinping after touring the forbidden city eunice yoon is in beijing with more good morning >> the dinner is one way that the chinese hope the american president, donald trump, will feel more special compared to previous presidents. donald trump had spent the day today at the forbidden city. the first families shared some afternoon tea, watched an opera show together, and this visit was described by the u.s. ambassador to china as a personal one now, the whole idea is that the chinese media and the chinese press have been playing up this

intimate relationship between these two men. despite the important agenda items such as north korea and trade. they were focused on how the president trump showed president xi a video of his grand daughter singing chinese songs, also reciting chinese poems, according to the chinese state media, president xi had given her an "a" plus. again, the whole tone in the media has been very upbeat they have been stressing the commonalties between the two countries, including the focus on reducing the trade deficit. at a signing sermceremony today wilbur ross said both presidents were focused on reducing the trade deficit and, in fact, they announced there would be about 9 $9 billion worth of deals already signed, including $2

billion by swrshgsjd.com promis import that many american goods into china, especially american beef one other point is that on social media, president trump is a top trending topic most people are saying that he's very entertaining, and they're also excited about the blue skies calling it trump blue. and they're hoping to see what his first tweet is going to be all about, especially because twitter is blocked here. >> i was going to say, is it possible for him to tweet from china? >> yeah, it is because most likely he'll have an international roaming phone so if you have an international roaming phone, you do often have access to twitter or facebook. so, he'll be able to tweet and we can read them >> eunice, another question, the

obama/xi relationship was complicated, it always is when it comes to u.s./china relations. any sense of a difference between trump-xi and obama-xi and the approach taken towards him? >> there's not a whole lot of clarity in trump's approach. on the one hand you see him taking a hard line on china, on certain issues but on the other hand, then there is this intimacy or this bromance that appears to be forming between president trump and president xi right now that relationship issing befoi is being built, and the chinese are trying to figure out where this relationship will go, and especially with president xi being such a powerful man now in the world as well as in china, but especially here and in the world that they're trying to figure out how much influence president xi would have with

president trump and where they'll take this relationship >> eunice yoon, thank you very much for the context from beijing this morning just reading the china daily opinion piece saying after initial concerns that trump might impose high tariffs on imports, reason seems to have prevailed. >> seemingly no direct reaction to his stern words towards north korea and calling on china seems like the focus is elsewhere. >> also his tweets are different than his diplomacy we have not heard rocket man come up yet. >> one year ago today trump was elected as president since then investor have been betting big that he will enact policies to cut taxes and regulations and boost corporate profits. the white house and lawmakers are still working to deliver on those promises in the past year the dow is up 28%. the s&p 500 is up 21%. that ranks third in

post-election market for a president's first term since 1952 trailing only jfk and george h.w. bush. for more on the year that was and the tough battle ahead, let's bring in stan colander from georgetown university good morning >> good morning. >> if part of the rally has been built on hopes of tax reform, infrastructure spending, deregulation, how would you say the chances are for system ome f those policies to come to fruition >> infrastructure is going nowhere fast it's ban year. nothi it's been a year, nothing happened on that, there's not even a plan. the healthcare plan has gone down the tubes now there's increasing questions about the tax plan i i hthink investors may be encouraged by the fact there's

nothing to hurt them as opposed to something new happening if you look at the election results from last night, you have to ask questions about whether or not much of the trump agenda is possible given the politics >> given those results yesterday and pick ups by the democrats in virginia and elsewhere, how does that, do you think, play into the current tax reform debate? on the one hand you could say this was not necessarily in keeping with a big vote of support for the trump republican agenda in washington on the other hand it could mean republicans say we have to do something here and sort of check off the box of tax cuts, corporate tax reform on some level. then if nothing else go to the midterms saying we did this. we have a strong economy >> i think you're right. this plays in two ways on the one hand, you're correct that the republican members of the house in particular are saying now after last night's

election that we have to do something. that tax reform is what will make or break us in terms of keeping our majority for next year so there will be increased im impetus to put individual district needs aside and vote for the common good of the party. on the other hand, given the results in the downmarket races, a lot of individual members of congress, particularly from states like new york and new jersey, illinois, where there are high local taxes, they will say i've got to protect myself and my district. i have to do what my district wants, otherwise i'm particular toast. so my guess is that bottom line, the results last night complicated tax reform and i think you'll see some of that more in the next 24, 48 hours as it is expressed in washington by individual members. >> what's realistic to expect on tax reform we have this "washington post" article that the senate is looking at delaying it for a year, getting rid of all state

and local tax deductions is that more where investors and people should be in terms of expectation versus what we heard from the house >> it was always going to be -- take longer to do than the president was promising or demanding. originally he wanted it in august it wasn't going to happen in august they wanted it by thanksgiving now they want it by christmas. the differences in tax reform won't be too great you would expect the debate would go into 2018 bottom line, you'll see a bill much smaller that won't be as big a cut in taxes as a lot of people are assuminassuming, andu hear they may have to delay some tax cuts because of the numbers in the budget and requirements, otherwise we may be looking at an annual deficit of a trillion dollars or more. what surprised you more, that trump won the election on it's one of the best post election rallies ever >> not the market rally. that was on its way, trump enhanced that along with the

republican majorities in both houses i think the trump victory was a shock to anybody who lives inside the beltway it didn't seem like what we would expected based on the politics of the last couple of decades. >> stan collender, thank you very much for weighing in. coming up, we're talking taxes and the shakeup in saudi arabia in our must-read op-eds next. as we head to break, another check on the action in europe. mostly red there, but minimal moves. "worldwide exchange" wilbel right back building a website in under an hour is easy with gocentral...

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welcome back to "worldwide exchange." some stocks to watch today lending club reporting a narrower third quarter loss. revenue missed forecasts the online lender expects to report another loss in the fourth quarter match posting better than expected fourth quarter revenues user growth at its tinder app is picking up it has more features including wh letting others see who liked them. marriott raised its forecast thanks to strong demand. nissan reporting a surprise drop in second quarter profit. the company hurt by higher expenses in north america. the automaker cutting its annual

forecasts. last month nissan halted production in japan. you can see the stock up a bit take two interaction posting a second quarter loss but revenue beat forecast with continued success of the grand theft auto franchise and nba 2k 18 that's a strong chart. i looked over the past five years, take-two up almost 900% it's been a winner in a strong group. shares of mall owner ggp soared 17% late in the regular session on reports that rival brookfield asset management held preliminary talks to buy the rest of ggp that brookfield does not own. time for our must-read stories. my pick is in the "new york times," attention saudi prince in a hurry comes from columnist tom freedman as we try to figure out this move, the crackdown on

corruption and the arrests of several prominent elite saudi princes. it is interesting to go to pieces like this freedman says he knows the king or i guess the future king, and he's trying to interpret his actions writing mbs vowed to give birth to a more moderate saudi islam starting by cushing religious police and permitting women to drive he's daring people to judge his government not on piety but on performance, not or koran but kpis, key performance indicato indicators friedman applauds this but then notes the aggressive stance towards iran, lebanon, yemen and ends with i'm worried that's the direction he's moving in along with some of these reforms and that he's moving fast. >> very fast, and the divergence of interpretation of the actions is amazing

you did hear within saudi arabia, it's not necessarily entirely free to express what you think, but this was considered a corruption crackdown, it was not extra judicial arrests and a power grab but then the polarization with the iran blockage in the middle east >> and inviting investors a week or two ago what this says to bankers and investors, that they're trying to open up the kingdom. they might get caught up in that sckfact there is still an air roto arostocracy with the leadership. don't go away. there's more "worldwide exchange."

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does this market need to see tax reforms or tax cuts to keep rallying >> no. if we get a meaningful tax package done, that will be one more reason to buy the market. there's a good chance it doesn't get done if you look at various ratios, the small caps relative to the s&p, those are not telling you they're expecting a big tax deal so i think the market, this goes back to the core question, what has been driving the market higher, it's a wonderful global goldilocks condition with synchronized growth, low bond yields and a dollar. if that's still on, that is not only constructive for strong markets but pe expansion >> the character of the market is striking. we talking about how calm it is.

how in a way orderly this upward grind has been do youthink that could change with the new fed chair or a reason for that to be disturbed? >> i've been out there talking about a vix getting to 8 if you go back, the vix started in 1990, but if you go back and measure realized volatility which is what the vix is based off of -- >> the actual movement >> the actual movements, not the expected movements, if you go back to 1964, you can see realized volatility is like where it is this year. back in 1963 and 1964 you had a history of political risk being deflected by the market. when kennedy was assassinated, the market went down 2.8% that day. the next day the market rallied 3% had you had a vix back then, would have seen a vix of 7 or 8 going up to 16 when kennedy was assassinated and then right back down there's historical precedent for

the vix to get lower longer. in my mind it's really inflation which will change this volatility surface higher. if inflation continues to grind higher, that will really start finally supporting higher bond yields once that happens, you will get into a different market framework. >> so inflation is your big tell is there anything in the policy realm that could spike volatility or create nervousness? the papers this morning lead with democrats scoring in two big victories in trump rebuke as we look ahead towards the midterm elections. is that a focal point? >> i think there's a sort of scenario where the forces that supported trump 12 months ago may be rechannelled into the far left you saw a version of that in play in the uk with corbyn hanging by a thread six, nine months ago and coming back with strength in may. >> that should have market implications >> absolutely. that scenario is underpriced by

the markets. if you got a big shift in the house next year to the democrats, that could obvious i will have big implications, particularly if they don't get tax reform done in the coming weeks and months having said that, i think that's a -- what i would call a tail scenario, but something to be monitored. i don't think it's something you can trade off yet. >> have excesses been building up as we had this market that's been calm and basically no pollity or gpolicy or geopolitical threat has worried it >> many factors, if you look at the s&p stretched pe multiples and so forth but when you get back to inflation, one thing that's been constructive for the markets is real earnings yields have actually been pretty decent, because you that justifying the higher pes if inflation changes, that paradigm goes out the window it will be much trickierment.

it will be much trickierment. >> michael purr ves, ths,nve tho joining us that does it for us on "worldwide exchange. "squawk box" is nexts alone, ambitions live everywhere. synchrony financial helps make them happen with data, insights, financing and technologies. ♪ ♪ synchrony financial. what are you working forward to?

good morning the trump rally now a year old it's ban yeeen a year since the election we'll look at the bull run in the market and perhaps how you prepare your portfolio for the next year. the president sending a warning to north korea don't try us don't try us, he said. we'll bring you a live report from beijing. and oh snap. shares of the snapchat parent plummeting as results are disappointing and the ceo promises a redesign of its app it's november 8, 2017. "squawk box" begins right now.

♪ live from new york where business never sleeps, this is "squawk box. good morning, everybody. welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. futures are just weaker this morning. dow futures down by 7 points s&p off by 2 the nasdaq down by close to 2. this comes after the dow managed to eke out a gain yesterday but the s&p 500 and nasdaq fell just short of the break even line we will keep an eye on things as we get closer to the opening bell what's happening with tax reform and the potential for that bill being passed is something the market is watching closely >> i didn't understand that music at the top of the show >> i didn't understand what they were saying. >> the band is phoenix like -- >> like