. bouncing back. stocks pointing to a higher open on wall street following yesterday's triple digit decline on the dow. activist investor nelt neso peltz winning his proxy battle with procter & gamble after a vote recount. and why mattel just rejected hasb hasbro's latest takeover offer it's thursday, november 16, 2017 "worldwide exchange" begins now. ♪ >> good morning. a very warm welcome to

"worldwide exchange" on cnbc i'm wilfred frost. we will get to the markets they are pointing higher yesterday we had a triple digit decline for the dow, down more than 130 points. we are bouncing back this morning. not quite triple digits. up 92 points for the dow 10 points for the s&p. the nasdaq up 30 points. energy the worst sector yesterday. oil prices continued their recent two or three-day slide. energy sector down 1.2%. the best sector was financials up 0.2%. in part getting a boost when richard cadre, the cfpb chief announced he would go eight months before the end of his term he was one of the last few remaining obama pro regulation i appointments in powerful positions. his departure helped some of the consuming lending banks in particular let's look at why we're higher in part because of the rest of the world was higher yesterday the rests of the world was lower and that fed into a generally risk-off tone by the

time we opened bouncing back. the nikkei up 1.5% down 1% yesterday. europe is bouncing back. yesterday the dax was down 1%. today we're up about 0.5%. 0.6% for the continental european markets the ftse 100 is flat retail sales from the uk were down 0.3%. the consensus was down 0.5%. we just had eurozone cpi expected at 1.4 -- last time it came in at 1.4%, came in just below that, 1.3% let's look at the treasury board. yields have slid significantly in recent weeks. we ended on friday at 2.4%, well below that at 2.36% at the moment yesterday did see a pause in terms of that slide in the ten-year it's kind of paused again today because we were slower than this 2.36% on the ten-year. either way certainly seeing the

yield curve flatten over the last couple of weeks the two-year has been ticking up oil prices slipped yesterday not as much as the prior day down about 0.6%. today down a bit 0.2% 55.2 the energy sector is the worst performing week to date on the s&p 500. dollar board did not slide yesterday as it had the prior day and earlier in the session, ended up flat. but this morning, as you can see, getting a bit of a bounce back from some recent weakness the dollar at 0.3% as you can see moving against the yen just higher this morning. let's talk more about the markets, joining us is guy ad adami. >> good morning, wilf. you're flying solo, my man >> not anymore, you have joined me, albeit just on the phone what was the reason for the sell

offyesterda yesterday profit taking? >> i think people in china are looking at ten-year yields in china, highest in quite some time are the chinese not only just sort of tapping the brakes but putting their foot on the brakes if that's the great growth engine behind everything if they're slowing things down, it could concern folks no he now here we are. this is a market that continues to grind higher regardless of news flow. >> are you concerned about the shape of the yield curve, the change we've seen in the last couple of weeks two years at significant highs, ten-year losing some steam in terms of the yield level? >> 100%. it's not so much -- well, it is the yield curve. i think we got down to about 67 basis points, but the speed in which the yield curve is flattening which is pretty startaling

it's been a quick move in a short period of time if the economy is as strong as the stock market suggests, we should not be seeing yields where they are and we shouldn't see a flattening yield curve is the fed going to hike us into recession? as you know, they control the front end of the curve obviously the market controls everything else. so for me, that is concerning 100% it's one of those things the market doesn't care until it cares. i'm not trying to be glib, but that's the truth >> we did see apple off 1.3% or so some other big tech names as well are you dipping back into those? is that a buying opportunity >> for apple it has been for some time. you think about it the vix is something that spikes and eases back spikes, eases back people have gotten so complacent and so used to buy every selloff

and everything, it's almost pavlovi pavlovian. you will wake up one day, in my opinion, where the s&p is down ten handles, closes down 15 handles, and you will see a continuation right now we're not in that sort of environment to your point europe remains strong the dax is at the whisper of an all-time high. let me point out one thing you have the german dax effectively at an all-time high. it would be interesting to overlay a deutsche bank chart. as the dax has been going straight up, deutsche bank for all intents and purposes has been going straight down with a little move to the upside along the way. what is the biggest bank in germany telling you that the market refuses to see? i'm not sure what that is. that's worth watching as well. >> as well, in some of the markets that have hit record highs in europe, they have been based on euro weakness which doesn't feed into the banks, because euro weakness comes from

low yields >> 100%. you see some of the data out of europe how much longer are they going to be able to keep yields down you mentioned the dollar and currencies i would submit that all these central bankers, whether they realize it or not are trying to sort of -- i'll use the teterm -- torch their currency why? as you know, the weaker your currency is, the more attractive your goods are in a global race to zero, wilf you're a smart, tall, attractive man, who is the winner there are none >> on the point of the ecb, the other interesting thing to watch there is credit. credit spreads are tight, on days when you see equity selloff, you don't see european credit flinch. mr. adami, we'll leave it there. >> one day i'll come in, i'll be

your co-pilot. >> i look for that immensely nelson peltz battle for a board seat at p&g just took a twist. this was very exciting late yesterday. >> it all came down to 43,000 votes. this is remarkable that's the amount that swung the election to nelson peltz in a recount. this could be a black eye for p&g. the company announced about a month ago their preliminary tally indicated peltz had lost the board seat now the two sides go into the snakep snakepit this ised advisers go through each ballot one by one and make sure they were counted correctly. shareholders in proxy contexts can vote more than once with only the last vote counting. so there's more room for error with 43,000 votes at stake, they

could find something that swings this election back to p&g's favor. 43,000 votes out of 2 billion shares outstanding is 0.0016% of the company. p&g spent $35 million on this proxy fight. they're not going to just walk away shareholders like the prospect of peltz on the board. the stock rallied in after-hours trading yesterday when this was announced. >> so many questions the first, even though this swung from the opposite direction this is not decided yet. this is still preliminary in theory >> either way, big win in the short-term for nelson peltz. >> is there anything added to p&g, anything they said after the result that looks embarrassing for them? >> they were certainly quick to claim victory. they did caution that was a preliminary tabulation it's very fuzzy how this all gets calculated. basically what happens is after the votes are calculated, after

the annual meeting about a month ago, each side was receiving information from the proxy solicitors that showed, especially the electronic votes that came through, but the challenging aspect about p&g in particular is that it's 40% retail so there were a lot of paper ballots with which one, which is not as common in other proxy fights paper ballots are more difficult to sift through because it has to be signed correctly, it has to be the right color. people have to know what they're doing as far as checking the right box for which candidates they want to elect to the board or not so, with all of that fuzziness, there's a lot of room for error. you can vote more than once also so you have all of this paper you're sifting through that's what they did after the votes, after the preliminary tally was announced. >> potentially for broader activists, a victory if this does come through having thought peltz had lost this and ackman lost his recent battle with adp.

thank you very much. in political news, president trump is headed to capitol hill today where he will try to secure a big win on tax reform his visit comes the same day the house plans to vote on their tax bill the senate's efforts to overall the u.s. tax code are hitting some friction. republican senator ron johnson says he will not support the current bill because it unfairly benefits corporations more than other businesses senate republicans can only afford two members to break from their ranks if they want to get the measure passed we'll hear much more from senator ron johnson at 7:30 a.m. on "squawk box." ti time inc is in talkes to sell itself to meredith group the koch brothers have tentat e tentatively agreed to the offer by sinking more than 5$500 million into the dole. talks fell apart back in april.

mattel rejecting hasbro's latest takeover offer. kate roddegers has those details >> reuters says mattel believes the offer undervalues the company and doesn't take into account the potential for regulators to reject the deal on antitrust grounds. reuters say mattel's new ceo may be trying to drive a harder bargain in talks with hasbro even though mattel has struggled compared to its rival this year. the company has cut its full-year revenue forecast citing the bankruptcy of toys "r" us shares of mattel are down 1%, and hasbro is flat. cisco systems reporting better than expected first quarter earnings on strength in

its security business. the company is also forecasting revenue growth this quarter which would break 8 straight quarters of declines netapp second quarter earnings and revenue beat forecasts. third quarter results are expected to top expectations thanks for hyper converged infrastructure technology. l brands third quarter earnings were in line with forecasts but same-store sales fell at victoria secret. they cite the negative impact of its exit from swimwear and other apparel. still ahead on "worldwide exchange," morgan stanley ceo james gorman sitting down with cnbc to talk reform, trading revenues and brexit. his exclusive comments straight ahead. and smashing records, this da vinci painting just became the most expensive piece of art ever full details when "worldwide exchange" returns. ♪

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welcome back to "worldwide exchange." morgan stanley's ceo james gorman sitting down with cnbc to talk everything from the market to the fed to banks and brexit plans. he talked tax reform and whether or not it will get done. here's what he said this morning. we will have more comments or not more, any of his comments coming up later.

they're not ready at this stage. instead, we will take -- no, we're not. we'll stay with you. jobless claims are on the docket today. let's run through today's agenda 8:30 a.m. come jobless claims. industrial production at 9:15. the monthly home builder survey at 10:00 lael brainard and rob kaplan are speaking today as well walmart and best buy report earnings before the opening bell along with viacom and manchester united we're not meant to take views on stocks, i hope they do badly on the pitch. after today, we will hear from gap and williams-sonoma and coca-cola is holding an investor day in atlanta don't miss sarah's interview with the ceo of the company at 10:00 a.m. eastern time.

a lot of retailers reporting today. what can we expect to hear let's bring in jan kniffen of kniffen worldwide and cnbc contributor. good morning to you. >> good morning. >> let's talk off quickly with yesterday's big mover, target down 10% main reason for that and can it bounce back? is it now cheap? >> i don't think it's cheap. i haven't been a fan of target for a while. i used to say back in 2006, target was the best retailer in the country, maybe along with hd and costco they have not been since i wasn't a fan when they went into groceries, they're still in groceries, i think it's a problem. i wasn't a fan when they were in kach canada i'm not a fan of their loyalty program, it is too much of a discount when i decided amazon and walmart were going to fight to take over the world, i decided target was not i cannot get excited about them and their space because i don't think they have a way to come

back they're doing a good job now, retailing 101. i don't see what retail ing 102 will change to make them competitive. i done see how they fix grocery when the new grocery to me is amazon, and the old grocery is walmart. along with that there's kroger it's a tough space. let's talk about walmart they report today what are the key things you're looking for. >> i want to see if they have another quarter of up traffic and up comps that will tell us they're continuing back on the road to what i would describe as the return to what they always wanted to do, be dominant in the space, price, price, price, have the stores in stock. they're doing all the right things then there was the acquisition of jet i was a fan of that. i think they have to be the biggest menace to amazon >> with that, is mark laurie the most important part of that acquisition? how does he compare in terms of

a tech leader of the future compared to someone like jeff bezos? >> mark laurie wants to drive amazon into the sea. i don't know that he k but i love the attitude. yes, i think buying mark laurie was one of the smartest things that doug mcmillan has done. he has had quite a run since he took over the reins. >> quickly, gap and best buy today. are they up against it >> i'm a best buy fan. i'm not a gap fan. i think gap itself, the gap name is really struggling they're doing better at old navy, but they're not strong at banana republic. i don't see what they're going to do to get that fixed. best buy, i have in the last man standing category. they have won their space as much as you can win electronics. they're going to be there a long time they reconfigured the stores, leased out space they have done all the things you have to do it's still a tough space if you want to be in that space, best buy will win in the category >> thank you very much for

joining me still ahead on "worldwide exchange," we'll actually get some comments from james gorman, and later, the nfl accusing jerry jones of hurting the league we'll have the latest on the big money sports dma wrahen we come back

welcome back james gorman sitting down with cnbc to talk everything about the market to the fed to the

banks brexit plans he also talked tax reform and whether or not the u.s. is likely to get it done. here's what he told cnbc this morning. >> the administration knows if they don't get this tax plan done, 2017 was a wasted opportunity. there's a republican congress, a republican administration, this was a core plank of the administration's platform. i think a plan should get done but it's not certain >> james gorman also talked about trading revenues here's when he thinks things will start to turn around. >> i think next year, if we get a corporate tax plan done, rates start ticking up, q erngs continues the path they're on. we'll start to see more normal volatility kick in and with that more normal trading revenue. >> gorman also addressed morgan

stanley's post-brexit strategy >> it is tough we don't know what post brexit looks like >> we're in unchartered territory. >> exactly i said earlier i'm not a british citizen, it's not fair for me to say, but it was a mistake from an economic point of view. it will cost london jobs we're all trying to minimize the impact of that we'll have to have a european headquarters we're required to. >> is it front foot? >> is heading that direction there's a difference between the legal entity and what we're putting in terms of markets, so sales people can work in par ri is and milan. >> will it involve job losses? >> will involve job shifts >> gorman adding it doesn't necessarily result in job losses of the 5,000 jobs suggesting that that's only 10% or so that could shift and gorman was there speaking in asia

let's discuss this and the broader political situation in the uk with peter spiegel from "the financial times." good morning to you. >> good morning. >> at the moment we're in the process of the eu withdrawal bill making its way through parliament the various opposition members to the government have added attempted amendments some of them significant some minor so far the government managing to stick to win the votes it needs to win >> they're winning the votes, but some amendments it's getting incredibly narrow. theresa may does not have majority of her own party in parliament she's relying on a small northern irish party to get the majority and there are several votes where you see members of her conservative party rebel, even two or three are a problem for her, she doesn't have that majority many of these issues she's losing the number of her majority that is very unsettling for a

lot of people. it gets to the point, you were making with morgan stanley we heard it a lot from the american banks because it's so uncertain both in london and bilaterally with the eu, they're beginning to hit a wall at the end of the year where they have to started making decisions on do they keep jobs in london do they have to pull the rip cord and pull the trigger on their emergency scenarios where they move people to frankfurt. we heard the same thing from people at jpmorgan, goldman sachs, morgan stanley. they met with wilbur ross when he was in london a couple weeks ago raising these red flags. the unsettled nature of the political environment in london is having real-world economic effects. >> to what extent whether we're thinking about the leaders of the eu 27 or the remainders in the uk, to what extent are they pushing theresa may and the government too hard such that there may be a breaking point that she gets forced out and the result could be someone with a

harder line view on brexit >> it's a real debate within the eu in particular they see theresa may as their best option. the other options are hard line brexiter boris johnson or michael gove if there's an election and they have to face jeremy corbyn, could you imagine another period of uncertainty and another political election the debate is can we really negotiate with theresa may if we don't know if she can deliver, they may not be prime minister in two, three, six months. what's happened here in westminster is a very bubble-focused conversation where they're not even thinking about brussels frequently. they're thinking about their own political careers and futures and i guess survive focuses the mind the negotiations have almost become a side show >> peter, great to see you

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few futures pointing to a higher after wall street looks to recoup some of yesterday's victories. nelson peltz's battle with

p&g took a dramatic twist. and they say a picture is worth a thousand words, but this picture is worth millions. it's thursday, november 16, 2017, you're watching "worldwide exchange" on cnbc. ♪ good morning a warm welcome to "worldwide exchange" on cnbc. i'm wilfred frost. let's get straight to the global market picture starting with u.s. futures yesterday a decline of 0.5, 0.6% or 130 points for the dow. we are expected to bounce back, not quite triple digits, 95, 96 points or so the s&p up 11. nasdaq up 31 points. energy is the worst sector, down 1.2% the best was financials. up 0.2%. getting a boost on the news that cfpb director richard cordrey will step down early

let's look around the rest of the world. that's a large reason why we're up today this time yesterday europe and asia was down. japan bouncing back 1.5% down more than 1% yesterday. in europe, we had sharp declines the dax was down more than 1%. we got a bounce back, 0.7%, 0.6% for france and germany the ftse 100 fractionally higher retail sales in the uk better than expected. still down 0.3%. and cpi in the eurozone was at 1.3% in and around where it was expected to be let's look at the broader markets starting with oil which has been slipping this week. down slightly. down 0.5% yesterday. 0.6% down a tenth of a percent today at 55.25 let's have a quick look at the dollar, which was down quite significantly this time yesterday.

yields did recover through the course of the day. today it is higher by 0.4% down a little against the pound, up against the euro. treasury boards for you. the story the last two, three weeks has been yields slipping significantly at the long end. we were down to close to 2.32 % at the start of the week but recovered a bit on the ten-year. meantime the shorter end of the curve has seen yields rising the general tlerend continues t be one of a flattening yield curve. let's talk more about the markets. joining me is art hogan, chief market strategist at wonderlic securities good morning to you. >> good morning. >> let's talk about the selloff yesterday. we had one last thursday as well having a bit of one yesterday. in general, they are few and far between at the moment. are you not too concerned about a pullback of 0.6% yesterday >> when you look at it, i think we're looking for reasons to be

nervous. that happens a lot when you have a year where we haven't had a pullback when we see the spread getting flatter or high yield rates blowing up, even extrapolating out the move we've seen in oil, for example, and a bit of a pullback there, i think that's a reach. when we think about what we should be focusing on here, it's the economic data and how that will drive earnings. for the most part the economic data stream has been positive. for example, if you were to look at wti, which is working its way up to 57, now back to 55, that's up 30% since june. down 4% in the last two weeks. i don't think that should be a cause for alarm. i think what we should focus on is it's okay to have a great year and focus on getting out. the only thing i get concerned about is the fact that we've had su such -- you have professionals and portfolio managers who may wanted to look this in early so instead of having that rally

at the end of the year and seasonality in the marketplace, you may have that natural sense to lock this in and take some money off the table and head into the next year with good performance. >> retail is in focus. target yesterday a terrible set of results, down 10% walmart the main focus today what are your views on both of those. >> it's interesting. we clearly in a retail world, we have winners and losers. we thought l brands would do better than they did home depot put in great results. when you look at target, do we need a target, walmart and amazon at the same time all if grocery? that's the big question. did target go a step tooting in? interesting to see how that proves out when you look at grocery, target, krogers, there's one too many pliey er players there that may be dragging down markets. i think they have to make structural decisions to right the ship retail in general, i think,

we're constructive on. heading into the most important job season of the year, all the inputs we've seen have been relatively positive. i think if you pick your spots, find the places where there's leadership, you will have a good holiday shopping season. and consumer discretionary has been thrown out with the bath water here there's some value to be had >> art, great stuff. good to see you. art hogan of wonderlic securities. nelson peltz has battled for a board seat at p&g and took a brattic twist. leslie picker has the details. a big turnaround potentially >> potentially everything is preliminary in this fight the first vote count where we saw p&g saying they preliminarily won by 6 million votes. now that is a bit closer nelson peltz is saying he won in a preliminary vote count by 43,000 votes no matter which way you slice this, this is incredibly close it may not be over yet either.

p&g spent $35 million on this proxy battle to get him to make sure he's not on the board do they walk away over 43,000 votes? i don't know >> they will keep fighting, no doubt. let's assume nelson peltz wins this he will get a board seat of how many and what will be his top of agenda item at the next meeting? >> he would get a board seat at the company. in this proxy battle one thing that confused a lot of investors is the fact that there was one proxy card that had his name on it and another proxy card that had the rest of the directors. he has said he will not replace a director by coming on to the board, that he would be inclusive of everybody on the board and have him as an addition what his first priority would be, he wrote a white paper outlining what he plans to do for prokcter & gamble. one of his main tenants is to restructure the organization he said it's bloated, not productive my guess would be that's

something he will focus on, making sure there's more efficiency at the company. he talked about bringing newer, smaller brands into the company to appeal to millennials he talked about improving digital capacity all those things he would be at the forefront of if he were to be on the board. >> when we see the share price reaction of this news of him potentially winning the board seat, is that overall taken as a win for activist investors >> absolutely. this was an especially important proxy contest. it's the biggest company by market cap that has ever faced an activist. so, the fact that something like this is winnable, the fact it had 40% retail investors which are historically seen asiding with management, the fact that nelson peltz could overcome that hurdle and get enough votes to make it this close at this stage of the process could influence other activists to say what

nelson peltz did is possible at these companies, maybe i'll do the same >> leslie, thank you very much president trump is headed to capitol hill today as the house plans to vote on their tax bill. the senate's efforts to overhaul the tax code appear to be hitting some bumps let's bring in john harwood. good morning let's talk about those bumps in the senate what did senator johnson have to say yesterday and is that a nail in the coffin for the senate tax map? >> no, it's not a nail in the coffin, but ron johnson has concerns about how the senate bill treats pass-throughs. he wants it differently. he wants a lower rated for pass-throughs than they're now getting. the argument from economists is that pass-throughs are already treated beneficially because they are not subject to double taxation as corporations are so, it does indicate that with 52members in the senate,

they're vulnerable to defections of any kind. susan collins also has doubts. john mccain, jeff flake, bob corker all have concerns about the amount of deficits that are created by this bill and the maneuvers that they've come up with to try to limit the costs on paper, that is to say making the individual tax cuts temporary so you can project that you won't have that quocost later, those are not substantive changes. those are paper changes. if you're concerned like bob corker, he said if this adds a dime to the deficit i won't vote for it you have to be concerned if he will go along with this in the end. >> that broader point about deficits is something we have always known would bother lots of republicans i guess we'll get to see today in the house whether it's enough to lead to an outright defection like this other issue has led

senator johnson to talk about. >> i don't think it will be enough today i talked last night to members and leadership aides, they are highly confident they'll have the votes. there will be some defections, maybe a dozen or so but they can afford to lose a dozen this is the first step in the process. this house bill, of course, is different from the senate. the house bill among other things does not fully eliminate the state and local tax deduction which is something that the senate bill does. if that comes back in conference it will be hard to pass it again in the house there's a lot yet to be worked out. the passage of this bill is a 50/50 proposition, but they'll take a step forward today in the house. >> goldman sachs put the probability up to 80%. >> they did they've been more bullish than others. they are not projecting as much

economic growth impact as the sponsors of the bill would like. they did, once those changes in the senate bill were made, which by repealing the individual mandate allowed some money to be added to the bill to give to middle class taxpayers, but i think ron johnson indicates that when you got johnson, collins, those other senators i mentioned, they still have some hurdles to clear >> different topic we heard yesterday that richard cordrey will be stepping down earlier than expected. some suggest he will run for ohio governor. you interviewed him recently is that a likely next step for him? >> i do. i think that's been on his mind all year this will be a good environment for democrats to run in in 2018. running as the sigh who stood up to president trump and the moderate republican party on issues of regulation and protection for consumers, i think that's a positive platform for a democrat to go into the

election with. the only question is whether or not richard cordry has the dar riz ma a charisma and personal appeal to take that home and become the democratic nominee i do think that's his intention. >> we'll hear more on the topic of tax reform from senator johnson today, that's coming up at 7:30 a.m. eastern time on "squawk box." still ahead on "worldwide exchange," the top trending stories. steven mnuchin sending the internet into a frenzy with his latest photo-op. we'll bring you that. and the big money drama in the nfl. the latest war of words between the league and dallas wbcooys owner jerry jones. "worldwide exchange" back there a couple of minutes. for your heart...

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welcome back top for our top trending stories. kate rogers is with me >> da vinci's portrait selling for 4$450 million scholars believed the 500-year-old portrait which once belonged to three kings was destroyed until it re-emerged in 2005 what is epic about this you can see a couple clips, the auction near, imagine how tense that

might be when the bids are coming in at this level. it's more than auctioning off a small charity prize. big job to have. >> the feud is growing between the nfl and dallas cowboys owner jerry jones. the nfl sent a letter to jones' attorney yesterday which was obtained by cnbc this letter accuses jones of damaging the league. jerry jones publicly objected to a contract extension for roger goodell and threatened to sue if it was approved by the come tenizatite compensation committee jerry jones has denied his objections are tied to the six-game suspension of cowboys star running back eurozo e ezekl ellio elliott. treasury secretary mnuchin and his wife making more

internet news. they posed with a newly minted sheet of money with some saying they looked like bond villains the photo was snapped while they toured the u.s. bureau of engraving and printing yesterday to see the first dollar bill with his signature >> i love the glare. the glare is sort of the best thing about it it's a real pose with lots of jaw clenching. >> a little blue steel no smile coming out there. jeff bezos admitting he is a big fan of breakfast biscuits. the amazon founder revealing that he used to eat an entire can of pills bupurry biscuits i the '90s this ended after his wife stepped in and they were married for three months >> i don't think he eats this still. >> no. apparently he has an intense fitness workout routine. an entire can? >> i don't know what pillsbury biscuits are, doesn't sound

healthy. >> we'll get you a can after the show they're great. >> i accept. thank you very much. still to come on "worldwide exchange," lots of data earnings, fed speak on the docket we'll tell you what we're watching when "worldwide exchange" comes back $1.50 futures contracts? what about a dedicated service team of trading specialists? did you say yes? good, then it's time for power e*trade. the platform, price and service that gives you the edge you need. looks like we have a couple seconds left. let's do some card twirling twirling cards e*trade. the original place to invest online.

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good morning welcome back to "worldwide exchange." we are approaching the top of the hour the team is getting ready for "squawk box. andrew has a look at what's coming up. >> we have a lot coming up markets set to rebound we'll talk about nelson peltz and his comeback if you will, in this p&g saga, if not soap opera. we'll also talk about art. this remarkable da vinci painti painting there was an expectation that it might go for under what the earlier buyer paid which was 1$127 million we'll talk about that, and we'll have senator ron johnson to talk taxes and more. we have seen a bounce back

in futures today yesterday the dow was down more than 130 points. this morning it's up just shy of 100. around 90 points or so let's bring in juren timmer. good morning to you. thank you very much for joining us in tells of the selloff we've seen, yesterday 0.6%, late last week, is any of that justified by the data, if not in the u.s., internationally. has the data taken a slight turn south of late? >> i think the data has been good i think, you know, in the spirit of thanksgiving coming up, we should be thankful for the fact that since this reflation rally started a year and a half ago the s&p is up almost 45% against the lowest volatility ever rarely do investors get more bang for the buck than they have over the last seven quarters or so we're seeing earnings growth starting to slow not in an alarming way but

slowing towards the trend line of 7%. financial conditions which is the most important thing, are starting to tighten because the fed will raise rates in december they will probably raise rates a number more times. the market is not pricing that in and for the first time since the election you can see the prospect of tax cuts being priced into the earnings estimates for next year. normally the q1 number for next week, the growth rate trends lower as we get closer to earnings season, and actually it is moving sharply higher at plus 11%. we're at the point where if the tax bill, whatever it ends up looking like, doesn't come through or to the point where the market expects, we could set the market up for disappointment there's a number of things making this market a more of a two-way street

>> let's talk about the fed as well december rate hike doesn't seem to be a swing factor that's priced in what would prize the market next year in terms of hikes >> the market is pricing in december almost at 100% probability that will probably happen. after that, the fed funds market is pricing in two more hikes the fed via the dot plot is suggesting six more hikes. on top of that we know the balance sheet will start shrinking. over the next three years it will shrink by 1.$1.25 trillion that's the opposite of qe. in all likelihood that will tighten financial conditions to some degree. my sense is that the market is complacent about what the fed is going to do. it may not go for six but maybe not for two either maybe somewhere in the middle. the theme for 2018 is going to

be the opposite of 2017, where we will see tighter liquidity conditions and that kind of removes the likelihood that stock triesprice also rise fastr than earnings. it is going to be a different year in that respect >> does that flatten the yield curve more >> the yield curve is being hotly debated. it's flattening and still positive but every strategist and economist could pull out the playbook saying when the curve inverts, you get a recession i don't know if that will happen this time around the curve is not inverting yet, if it were to invert it would be rising short rates and falling long rates because in the last few days the ten-year has gone down a bit whether that is a different kind of inversion or the typical inversion remains to be seen maybe there's a false positive

there. >> thank you very much that is it for "worldwide exchange." futures pointing to a 90-point move higher on the dowhe last i. with a home equity loan, you can pull cash out of your house for anything you need- home improvement, college tuition, even finally getting out of credit card debt. come to lendingtree.com to shop and compare home equity loans right now. because at lendingtree, when banks compete, you win.

good morning we're bouncing back this morning. stocks pointing to a higher openings on wall street following yesterday's triple dij jitd digit decline on the dow what's happening today on twithe dow? earnings and nelson peltz winning his proxy battle with p&g. they said he didn't, right did they not know? following a vote recount, full details are ahead. and it was the most expensive painting ever sold at auction. we'll show you the da vinci that

shattered art auction records. it's thursday, november 16, 2017 "squawk box" begins now. ♪ live from new york where business never sleeps, this is "squawk box. good morning welcome to "squawk box" on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. u.s. equity futures seeing a bounce back after a down day yesterday in the markets yesterday twe saw the biggest declines since september 5th for all three major averages all three now are at the lowest levels of november this morning things are turning around dow futures indicated up by 88 points s&p up by