wall street looks to kick off the new week in the red with earnings and tax reform front and center. >> breaking overnight, general electric reportedly set to announce big changes to the core business details ahead. and a big deal for uber. the company reaches a deal with soft bank. it's monday, november 13th, 2017 and "worldwide exchange" begins right now. good morning welcome to "worldwide exchange" on cnbc i'm contessa brewer.

>> i'm mike santoli. good to take over the show for you. >> this is a first for us. >> absolutely. >> we've never been on anchor desk together. i'm enjoying it already. >> a lot going on over the weekend. >> we have a lot to talk about. >> we sure do. >> let's get a quick check on the future the u.s. markets you see not a lot of movement in the s&p 500 indicated to open down just slightly, less than 2 points the u.s. markets did have the first down week out of nine last week though not by much. we've recouped most of it. you see the nasdaq slightly in the green. we will have more on these markets in just a moment. >> first, some big breaking news overnight. they're set to announce a major restructuring today. ge will focus on three core units, aviation, power and health care while looking to exit the rest of its operations.

one source tells the journal ge also plans to shed its majority stake in oil and gas operator baker hughes ge ceo john flannery is going to announce plans with investors. he'll sit down with cnbc at 9:30 a.m. eastern but there's a lot of focus on not only whether it's going to cut its dividend as a lot of analysts are looking for but also how it looks to refocus its energy in these three core areas when, of course, so much of ge was focused on building these diesel locomotives and light. >> really exiting the energy business is a big deal that was very expensive. keeping the baker hughes deal on track. so looking to back out of that just a general slim down and as you say, dividends will be a big question going through that

meeting. let's get back to the markets. looking overseas, starting in asia overnight a little bit of weakness most notably in the nikkei. japan down 1.3%. it seems as if it's mostly continued pull back. the nikkei, remember, was up more than 20% in two months. it was on a tremendous run vertical seems like it's backing off there. more broadly in asia, it's a mixed picture where you see the hang seng up 2%. shanghai up almost 1%. kospi down half a percent. over in europe take a look there. i think it was also generally mixed market yes, you do see that mostly to the down side. german dax down slightly just about 1/7 of 1% the outlier is the ftse, but that's really getting benefit of a weaker british pound this morning. that's really the reason for the standout move in the u.k. >> let's look at the broader

markets. oil, of course, on a big move upward this morning down slightly wti crude off 2% it's up 6% year to date. it looks like we have a similar move with brent and nat gas. as for the dollar this morning, we are seeing as you mentioned the sterling off and the dollar up against the euro, down against the yen just slightly and up against the pound this morning. as for gold, it looks like we're moving .4% last week moving higher this morning. up just slightly, .2, almost .3% here taking a look there it stands at 1,277. >> wall street has a busy agenda this week with economic and earnings report. october consumer producer price index out tomorrow the consumer price index in retail sales thursday, we'll get import prices and industrial production

started by housing starts on friday as for earnings, retailers are going to dominate as they usually do late. we'll hear from home depot, target, l brand, best buy and gap and also reporting this week outside of retail jerseys could he system and viacom. >> stocks to watch today, gi joe is making a takeover offer for barbie sounds weird, doesn't it >> yes. >> "the wall street journal" says hasbro recently approached mattel qualcomm is reportedly set to reject broadcom's $103 billion takeover as early as this week qualcomm feels the $70 a share under values the company it doesn't factor in the uncertainty of getting the deal valued american power is buying ideal cellular for 1.2 billion

it gives them an additional 20,000 cell phone towers worldwide. that -- and it expects the assets to invest more than 300 million in property revenue in just the first year. >> more stocks to watch this morning. brookfield property partners has reportedly made $15 billion deal to buy ggp brookfield has offered to buy $23 a share for the remaining 66% of ggp it doesn't already own. ggp has 125 high end retail malls around the country you see ggp trading just below this meanwhile, boeing signed a $15.1 billion deal to sell 40 planes to emirates. we'll have more from dubai walmart charging more to buy some products online than in stores "the wall street journal"

reports they've been raising prices for food and household items. it's part of the company's efforts to drive more store traffic and compete with amazon. if you have those necessities, they want to get you in the store. >> i'm curious how it competes with amazon if you are raising the prices online and if amazon gives you the better deal, why would you order online >> i'm wondering if they're thinking their one advantage is the store base if it's price wars, they're not going to win that. get them back in stores and shop for other stuff. >> what consumer notices do you compare the in store price? are you visiting the store and looking on your phone? >> how much do you value convenience? >> in corporate news, uber reaching a big deal. hi, landon dowdy >> an uber deal for you today.

the ride hailing app has said it will allow tech firm soft bank to invest $10 billion. it's struggling to maintain licenses in key markets. details of the offer are still to come but reports say it paves the way for softbank to try to gain up to a 14% stake in uber this comes as former ceo travis kalanick and benchmark reached an agreement over board seats and also the lawsuit against kalanick on hold once the deal is completed it would add six directors and change voting rights effectively limiting kalanick's power on the board. the investment follows a turbulent year it still faces hurdles, it would be a big win for softbank. the benchmark believes could be $100 billion guys, stock is up very sharply

back over to you. >> softbank, of course, unfortunately we have no ability to know about uber stock. >> thank you very much, landon dowdy. alibaba smashing its single day record once again the ecommerce giant selling $25 billion on china's biggest shopping day eunice eun is joining us hi, unit. >> reporter: hi, mike. i think what we learned is how big singles day is they racked up $25 billion j.d., alley baba's rifle, another $19 billion. those are huge numbers we saw some interesting trends starting to emerge based on what we saw alibaba said that 60,000 were bought these are by categories.

apple was the top of its category nike also at the top of its category with new balance following close behind sketchers, estee lauder, american tourister were in the top five in their category sold on alibaba sites similar pattern on j.d. sites as well people were buying apparel, electronics and also cosmetics apple again topped the list on j.d. they did well with sports apparel. columbia as well north face saw a jump of 400%. columbia saw sales up by 80000%. olay which is a p&g product saw it up 2% bose sold the same amount last year in the first ten minutes this year.

j.d. said they saw interesting patterns chinese people are starting to buy more and more higher quality goods. specialty items did really, really well. they have fresh food 20,000 tons of fresh food which includes 2 million crabs luxury goods very popular. they sold 400,000 watches. single day isn't only about the sales but it's also about the new retail that was one of the areas that we saw alibaba pushing jack ma said he wants to see chinese people not only buying differently but also shopping differently using their mobile phones in physical stores. guys. >> eunice, thanks very much. there were some reports leading into singles day that maybe chinese people were a little bit fatigued it seemed like a gimmick. >> apparently not. >> no, 25 and 19 billion shows you they were ready for it. still ahead on "worldwide exchange", british prime minister theresa may had a

really bad weekend we're live in london with the details. house ways and means ubngittee member kevin brady is doli down on his tax reform. we'll tell you what he said that's getting a lot of buzz stick around, "worldwide exchange" will be right back no matter how the markets change... at t. rowe price... our disciplined approach remains. global markets may be uncertain... but you can feel confident in our investment experience around the world. call us or your advisor... t. rowe price. invest with confidence.

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rear's a video you can see collapsed buildings, loss of debris authorities say more than 330 people were killed by the quake. we'll continue to follow developments and bring you more as they come in to us here >> turning back to markets the pound taking a big hit 40 members of parliament agreeing to sign a letter of no confidence in prime minister theresa may. >> reporter: good morning, guys. it's a chilly morning over here and chilly morning for markets there are a lot of questions being asked about whether theresa may can hang on to her leadership here. they're eight short of the number of people they needed in order to go ahead.

there are questions about whether or not she can remain in power. there was an underwhelming conference she's lost two cabinet members in the last week alone all of this is happening in the back drop of brexit. there's been very little progress made. the chief negotiator on the eu side said they want more commitment from the u.k. side. the u.k. negotiators are pushing back saying they're not willing to disclose that amount yet. within her own party theresa may is coming under increasing amount of pressure from boris johnson and michael gove who had apparently sent her a letter pushing for a harder push in brexit and signaling that they have an intention to walk away if nothing is reached in december on the other side, of course, businesses are getting a little bit nervous. you see the reaction this morning.

they will have meetings today to spell out how the transitional deal is going to be spelled out. she has a lot to do. she doesn't have a strong hold on her own at the end of the day. >> thank you very much in london with that new pressure on prime minister theresa may thank you very much. let's bring in international chief investment officer from jpmorgan asset nick, mostly in currencies with the weakness in the british pound, do you think all of this seriously complicates the situation as to how brexit will proceed, how the u.k. economy might perform or other investment implications at this point? >> frankly, it's unlikely to when you look at a lot of it, it's political piddle paddle the roadmap here is what happened in the early '90s if you remember john major, he was an evil prime minister but survived five years.

so these political dynamics can go on for actually a very long time when you look at it it's moved a percent today, actually, not much given recent daily volumes. of course, it's a fair bit stronger than the start of the year the pound is 6% stronger than the start of the year. so actually in context markets aren't too alarmed right now >> nick, markets in general have seemed not alarmed about much of anything lately. as you know, it's been a very calm march higher. bond markets also very placid at this point global growth looks okay is anything about to disturb this picture it seems like that's the main question is can this very kind of slow, orderly progress be up ended by anything? >> well, it shouldn't because there's a lot of focus on political risks. when you look at a political risk, it's frankly not new it's present in virtually every country around the world you're absolutely right.

when you take a step back and look at the economic dynamics, they're very robust. you've got stronger growth virtually everywhere and you've got global growth that is coordinated at a much higher level and consistent even in the u.k. we forget that the bank of england raised rates. >> nick, there's questions about whether the middle east is headed towards a period of instability. we see that saudi arabia has requested an urgent arab league meeting and this with top business leaders on charges of corruption are you concerned at all about what the future of the middle east holds given what's happening in saudi arabia right now? >> no. the key there is they clearly have some form of transition and the dynamic to which of course is oil prices. one of the big impacts we've seen recently of course is higher oil prices. in aggregate, that's actually pretty good for the middle east. >> if you feel as if the kind of

strength in markets has been underpinned by good fundamental news, what do you think it means for the magnitude of the up side i assume you think risk markets are in pretty good shape through year end >> oh, it is very much so. so when you look at it, central banks are probably underestimating the potential for economic growth. when you look at risk assets, frankly, that will be very under pinned from a fixed income perspective, the standout is probably high yield. u.s. high yield bonds, that index is nudging 6%. earlier that got down to r5 poi -- 5.5% that prevents an opportunity. >> 6% seems like a juice jy yie, that shows you what kind of market we've been in thank you very much. still ahead here on "worldwide exchange", president trump continues a whirlwind tour through asia today he's attending an economic

summit in the philippines. we'll have the latest on the president's trip straight ahead. here's today's national weather forecast with nbc's bill cairns. >> good monday morning the cold temperature is leaving the northeast. there's a lot of light clouds, rain, snowflakes falling anyone traveling outside of philadelphia, new york, northern jersey and the poconos, there is a little winter precip out there and slick roads. light rain exiting early today northern portions of new england we may see some snow showers here areas from syracuse into the southern adirondacks forecast, chilly and raw with highs only in the 40s. drying out during the day. new york, boston areas of the southeast warming up nicely during the day midd othe lef country no problems at all and a big storm here in the pacific northwest. that's your business travel forecast more "worldwide exchange" when we come back

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welcome back to "worldwide exchange." kevin brady is doubling down on his tax bill brady says the house will not accept a senate plan to eliminate state and local tax deductions here's what he said over the weekend. >> look, i'm convinced that this is where we're going to end up because it's important again, as i told you, chris, to make sure people keep more of what they earn even in these

high tax states. what we've worked towards and worked with is our lawmakers from new york, california, new jersey, make sure we've delivered this relief. i'm commit today it. >> are you saying then that the house will not accept a total elimination that, that just won't fly even if the senate passes it? >> that's what i'm saying. >> can't get clearer than that, can you? the house is expected to vote on its tax reform plan later this week. president trump continuing to tour through asia he's in the philippines today attending an economic summit let's get to nbc's tracie potts with more on the president's trip hi, tracie. >> reporter: good morning. we've been monitoring his movements this morning he visited the u.s. embassy in manila he had a sitdown, a one-on-one meeting with the philippine's controversial leader greeted by water cannons holding back protesters, president trump opened an economic summit in the philippines urging more balanced trade with the u.s he's promising more details

wednesday from the white house. >> we have deficits with almost everybody. those deficits are going to be cut very quickly and very substantially. >> reporter: the president avoided provoking north korea's leader kim jong-un after noting insults on twitter adding i tried so hard to be his friend. >> strange things happen in life that might be a strange thing to happen. >> reporter: he defends trying to befriend russian president vladimir putin after backing off of criticizing u.s. government agencies. >> i believe in our intel agencies, our intelligence agencies. >> i think he's giving putin a pass i think it demonstrates to mr. putin that donald trump can be played by foreign leaders who are going to appeal to his ego >> i don't think there's anything at all that we can trust that comes out of putin's mouth. i think he's a dangerous man and a thug. >> reporter: more questions about russia as the president wraps this trip with a focus on trade. now there have been lots of

questions about whether human rights would even come up between presidents trump and duterte of the philippines the white house tells us they did very briefly as they were talking about the war on drugs and isis and of course trade is the big issue for the president there today. >> certainly was tracie potts in washington thank you very much. coming up, we'll have a roundup of the global markets and today's top stories, including deal talk in toy land. two major toy makers might be looking to join forces all of those details coming up. plus taylor swift's record setting reputation how her new album is already on the brink of making music history. you're watching "worldwide exchange" on cnbc. ♪ ♪ trust #1 doctor recommended dulcolax. use dulcolax tablets for gentle dependable relief.

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markets now. stocks pointing to a lower open on wall street as investors focus on weakness over seas. we have your monday market setup straight ahead. breaking overnight, ge set to announce a big restructuring. we'll have those details ahead. barbie meet my little pony buzz today over reports of a megatoy merger this is monday, november 13th, 2017, and you're watching "worldwide exchange" on cnbc ♪ ♪ good morning welcome to "worldwide exchange" on cnbc i'm contessa brewer. >> i'm mike santoli. sarah and wilfred are off today.

>> nothing like a big kickoff with some great music and a look ahead. >> sure. >> let's check on the global markets. right now taking a look at futures. boy, are we still seeing that yield curve flattening it looks like we start the day with the s&p 500 futures everything off to the races. of course, off of that breaking week where they've broken eight weeks winning streak looking like small caps and financials under performed last week. now taking a look at the treasury as well again, it looks like we've got some under performance here on this high yield. the flattening yield we're talking about less than 70 basis points between the two year and ten year. again, moving slower this morning. the ten year off by oh, about .03% now >> taking a look at asian equities this morning. it's been kind of busy especially in japan. you see a 1.32% loss in the nikkei over in japan

that's mostly a give back from a very furious rally more than 2 months and 20% up side in japan. hang seng and hong kong up .2 of a percent. shanghai after a blockbusters singles day buying binge up almost half a percent. kospi is down by about 1/2 of 1% over in europe, mildly negative markets for the most part. you see german dax down 1.5% has firmed up. it's town 1/10 of 1% the ftse 100 up marginally the weaker pound is helping equities since our last report the last half hour spain has nosed into the green as well. >> taking a look at the broader markets now, oil is moving lower this morning wti off .2%.

that's following a big lift last week up 2% total down slightly. brent and nat gas off. up against the euro by .1% breaking corporate news overnight, general electric expected to announce a major restructuring today. according to the wall street journal they'll focus on aviation, health care and they plan to shed their majority stake in baker hughes. john flannery will make the announcements later today. we'll get more details tomorrow when he sits down exclusively at 9:30 a.m. eastern time flannery did speak to us after the earnings time. he said, november 13th, that's

when we're going to start our plan we'll have a huge slimdown the intention to exit energy and keep health care some people thought they might shed health care we'll see what kind of color comes out of this. >> he came from health care. it's a business he knows very well. >> that's true. >> as did jeff immelt. it's held a prize position within ge. the other thing i think is going to be interesting, ge has some 300,000 employees. >> yes >> so you have to think that a lot of ge employees now are wondering in terms of the refocus and slimming down what's it going to mean for jobs as well. >> the journal did mention there are almost 10% of the employees, 28,000 i think is the number are outside of the business unit so they're either in corporate or kind of a general r&d function it seemed as if they might be ripe for trimming. in some other corporate news this morning, uber is striking a

big deal with japanese is firm softbank they plan to buy 14% of uber through a combination of new and existing stock that deal comes a month after uber's board agreed to sweeping governance changes in order to secure the soft bank investment. among those changes, reduced powers for the former ceo, travis kalanick. it shows uber is one step closer to going public by 2019. >> this was quite an overhang for the company. in more deal talk, hasbro is making a move for mattel landon dowdy has more. >> g.i. joe may be taking over bids for barbie. mattel and hasbro up sharply following reports that hasbro has offered to buy mattel as both firms look for survival tactics in what is a struggling industry mattel's market is up $5

billion, less than half of hasbro if the deal goes through, it would create a toy titan hasbro's brands include nerf, my little pony and it has the licensing rights for "star wars." mattel has barbie, american girl and it has been struggling with weaker sales take a look at these stocks this morning, mattel up 22%, hasbro up 3.3 back to you. >> landon, thank you very much quite a reversal of fortunes as landon mentioned, hasbro twice as large as mattel in terms of market value. five years ago it was the reverse. hasbro's been on a role. mattel has been struggling >>. >> this takes up shelf space with so many entrepreneurs

deciding to sell -- >> toys "r" us in bankruptcy. >> let's get to trending stories. social media paying tribute to the wife of liz smith. the dame of the ditch. smith was best known for her widely read celebrity column and her recording on wnbc news live at 5 during my time at wnbc she was nothing short of fabulous. liz passed away at the age of 94 and with her a piece of new york and actor harvey firestein just heard liz is gone great broad. tough cookie trail blazer and under it all a softy. actor rob lowe added love liz smith. >> seems like she very much was of that moitd of gentle approach to gossip. >> i did wnbc and people loved

her. she was legendary. remember, her column went far beyond just what the manhattanites -- >> yes >> speaking of another woman who's a legend. >> taylor smith. >> at 24. >> "big reputation" is breaking records. selling more than 700,000 copies on track to sell 1 million records in the first week. it's potentially becoming the year's best selling album in just one week. >> a toilet sells for $100,000 it's up for sale for that. luis vitton. they created a piece from 24 designer handbags. they totaled $18,000 you can see there was a bit of a markup for the toilet itself by the way, this toilet is fully functional it comes with a gold-plated bowl

apparently it's not been tested. >> offers to test it and not to buy it. >> apparently not. if you put that in your house, you know everyone is going to make a beeline to the powder room. >> wonder if it's part of -- >> look what you made me do. >> altogether. meanwhile, a group of nfl owners will meet to discuss a contract extension for roger goodell. he's seeking lifetime useof a jet and health insurance for his family for life. he's paid $32 million a year it comes a week after dallas cowboys owner is threatening to sue to block goodell. >> interesting he's not asking to double. >> not quite right now, football is going so well. >> the revenues are still there.

the tv deal see how long that goes. >> how long that lasts. let's go to sports in the field. new england patriots traveled to denver the patriots pile on the struggling broncos the play of the game dion lewis took the kickoff 103 yards down the field for a score. wow. brady also passed for three touchdowns new england beat denver 41-16 to improve their record to 7-2 on the season look at that did you see that run >> i did i saw -- i mean, they should just spot new england with two losses at the beginning of the year they go on. >> like a handicap >> yeah. coming up, talking taxes today's must read straight ahead. as we hit the break, let's get a check on currencies. we did have that big decline in the british pound in d.c the dollar is still up significantly almost .9% against

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sorry about that. they're all about me saving for a house, or starting a college fund for my son. actually, i want to know what you're thinking. have a seat. knowing that the most important goals are yours. multiplied by 14,000 financial advisors, it's a big deal. and it's how edward jones makes sense of investing. welcome back to "worldwide exchange." in deal news today, boeing making a $15 billion deal with emirates they're forecasting a $730 billion market for new airplanes in the middle east let's get to willem in the middle east. good morning. >> reporter: mike, big numbers there from boeing. they're predicting needing more than 3,000 aircrafts will be sold in the next 20 years.

yesterday they got a $15 billion deal with emirates one of the biggest buyers in the region that was a real disappointment for airbus, their main european rival. $25 billion to develop and they sold 100 of those aircraft now to emirates. right now they're in desperate need of a life line for that particular aircraft. they have not seen any major sales in the last couple of years. they were hoping emirates would come through with sales. we've been talking to the head of bombardier. he said that the tieup with airbus he thought threatened boeing's dominance he said it was something that couldn't be matched by any of boeing's offerings that's why they pushed the u.s. commerce department. pushing it forward by boeing bombardier saying they don't see

that as a major problem. they're tied up with airbus for 4or 500 jobs in alabama. it could be a loop for a sell to delta. >> willem, we will keep an eye on the stock of boeing appreciate that in dubai there. let's get our must-read stories now. these are the stories catching our attention. "the new york times" this morning highlights the right way to cut corporate taxes the editorial board writes american businesses theoretically pay 39% of their profits to the federal and state government but it goes on to say because of copious loopholes not the least the ability of large multi-nationals to shift profits to low tax countries, few businesses pay the sticker price. american companies pay an average effective federal-state rate of 18.1%, roughly the same rate as those in other advanced

nations. what the editorial board says real reform would look like not blowing a $1.7 trillion hole in the budget, lowering the top rate between 25 and 28%, reducing incentives for businesses to borrow rather than use their own and bring back the off shore profits. in the editorial it talks about $70 billion that the irs is missing out on because of these off shore tax havens. >> right the idea of simplifying seems to have almost universal appeal the mode of doing it getting down to 20%. small businesses, small taxes, another element of the current plan doesn't really feed into -- >> we like the idea of a simplified tax code but when it comes to losing out on say child tax credit or mortgage interest. >> yeah, there you go. on that point, my pick today is in the washington post it's titled are tax rates

immortal reducing or eliminating the mortgage interest deduction would cause home buyers to press smaller homes with less debt a good thing they could use that to pay for retirement, their children's education or cover daily expenses the point is while the mortgage debt is very popular everyone aspires to make great use of it. it doesn't incentive advise homeownership other than buying more home than you need. there's such resistance to getting rid of it. >> upper middle class are taking advantage of that mortgage tax interest i thought it was interesting, too, the editorial writers go on to say you have to factor in the fact that people who make home furnishings and people who furnish bigger homes with more insurance, all of those people have a vested interest. >> whenever you have something away. still ahead on "worldwide

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welcome back to "worldwide exchange." stocks to watch, royal dutch shell. they agreed to sell 26 billion in assets as part of the three-year program for the acquisition of e.g. group in 2015 royal dutch shares reacted positive to that qualcomm reportedly set to reject broadcom's bid. they met this weekend. qualcomm's ceo feels the $70 price doesn't factor in the uncertainty of getting a deal approved we'll see how that plays out brookfield partnership made a

$15 billion did bid. brookfield does not own some of it at the top of the hour that means the team is getting ready for "squawk box. andrew ross sorkin is in new york. >> hi there, you are talking deals. we have a lot of deals to talk about. we will talk about hasbro, mattel, uber getting together. we'll talk about alibaba singles day. over the weekend john nippon will join us politics and john boroseau. >> from wyoming, we'll be anxious to see what he has to say. >> nice to see you. >> nice to see you. let's get another check of the futures right now. treasuries moving lower this morning. futures on the s&p looks like we're down across the board here the dow jones down 23 points for

the implied open closing, breaking that eight-week winning streak. now it looks like the markets are heading lower. the treasury is moving lower this morning as well we have the president michael cohen. how much is the hole debate over tax reform driving the market? >> that's a great question i'm not sure the anticipation of tax reform has been driving the market for over a year as has been the anticipation of other things, of other forms of stimulus that would come from the tax code that hasn't made much progress on capitol hill. i think we'll probably get some bills from the congress and the senate that have to go into conference but really we haven't seen a lot of change but the expectations for it have had markets i think feeling the

positive animal spirit >> michael, i guess the other side of that is if you look at the kind of stocks that have propelled the s&p 500 to 15, 16%, it doesn't seem like they're going to benefit from a corporate tax cut. it seems like the potential for a tax cut is one of the many reasons in a bull market this is tied in to use as excuses to buy here how does that set us up? >> that's a great point. fundamentals have been driving us we've seen double digit earnings growth i think, too, when we wonder whether, you know, this tax cut has been priced in, i think wall street's also fairly smart, fairly cagey and knows that washington is a bunch of gridlock right now probably pricing in the fact that it won't get it done. we would like to see, we would expect to see some of the smaller or midcap and domestic

companies that would benefit be surging if it looked like we were going to get one. otherwise, we've been dependent on increasing fundamentals but share prices are still very high this is still -- we're still making record all-time high valuations if the rule is to buy low, this isn't low. >> marriott ceo said last weekend in his earnings call when he was asked about the importance of tax reform, he called waving it the magic wand. he said it wouldn't move the needle for us. we didn't have a caps flow problem before tax reform. we won't have a cash flow problem afterwards, but what it might do, the big question is, would it lower the cost of capital. what does that do for the american economy if you lower the cost of capital? >> you know, contessa, the cost of capital i think is pretty much everything if we're going to go back and explain this rally of the past eight years. i mean, this has been a terrific

rally. it's been driven by this very cheap capital, quantitative easing and the other various programs from the fed, the increase of the fed's balance sheet, the increase of debt but it's changed, right? we've had a shift now and i think it's really important and i think it's much under heralded we've gone from quantitative easing from quantitative tightening qt, you're hearing it on the qt now. the fed is pairing down their portfolio. they're going to raise rates we now when we look at the spread between the 10 year treasury and the two-year treasury, last week we were below 70 basis points. that spread is normally like 200 basis points i don't want to get too wonky, but when that short end of the yield curve, when the two-year treasury starts to pay as much or more of longer rates, they call that inverted yield trip. not a good sign. it's something we need to watch. while complacency and investor comfort seems to be ruling the day. >> michael, no doubt about it,

once the yield curve inverts, definitely a warning sign. until you get to that point, if you look historically, right, it hasn't necessarily been wise to anticipate it and get out of markets. it seems like that's the fix that a lot of investors are in things have been good. what's to say they can't stay good longer. >> that usually lasts longer than anybody thinks it usually will that conundrum of when do you pull the cord to jump and open the chute is always on people's minds. i think time in the markets over my 30 years of doing this as evidenced by the whitehair, time and not timing will make you more money so if it's long term money and you're invested, you want to stay invested. trying to get this right and precise is probably not going to make you much money. >> michael farr on the qt. >> on the qt. >> thank you, michael. appreciate that. >> thanks. that's it for "worldwide

exchange" this morning nice to be with you this morning. >> you as well everybody keep an eye on ge. >> that's right. everybody have a great day ah, dinner.

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good morning breaking overnight, general electric reportedly set to announce some big changes to its core businesses. those details straight ahead was the lead article in the wall street journal a big deal for uber. the company reaching a major agreement with softbank. it's worth billions. and a possible tie up in toy land they let this go really? the buzz of the day, reports of a megatoy merger it's monday, november 13th,

2017, and "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. let's take a look at the equities future. the dow futures are indicated down 27 points s&p futures off by 3, naas cac o -- nasdaq off by 3. taking a pause in the rally. the dow and s&p 500 down and both of them coming off their first weekly losses in nine weeks. overnight in asia it was a mixed picture. in hong kong i know the stocks were a little weaker the nikkei was down by