crisis averted lawmakers strike a last-minute deal to avoid a government shutdown full market reaction straight ahead. stepping down, alphabet's eric schmidt is leaving his role and bitcoin's big drop the cryptocurrency losing a quarter of its value overnight we'll tell you what's behind the major selloff. it's friday, november 22, 2017, the last friday before christmas, "worldwide exchange" begins right now

♪ good morning welcome to "worldwide exchange" on cnbc. i'm seema mody in for sara eisen. >> i'm dominic chu in for wilfred frost. a lot of christmas music throughout the course of today's show if you like it, you'll love it if not, bear with us >> even though i'm not a fan, this is a classic. >> it is a great song. we have quite a few things that could be driving the trading action looking at the u.s. futures picture, we're seeing stable markets. we've seen this theme developing, we have not seen major moves in the premarket futures at least ahead of the opening bell right now the s&p 500 looking like it will open up by 4 points the dow up by 19 the nasdaq up by 5 as for the treasury yield side of thing, the ten-year note yield is falling a bit we saw that 2 1/2 mark yesterday. about 2.48% there. the run up in yields is pulling back just a bit in this early

friday trade >> let's look at asia and how stocks closed there for the week the japanese nikkei did end the week higher. hang seng higher by 0.7% shanghai composite slightly lower. the kospi ening the week with a gain of almost a half percent. in europe we're seeing significant action the spain equity index, ibex, opening on a weak note down nearly 1% on the wake of thursday's regional elections in catalonia. catalan's three pro independence parties gained a combined 70 seats, which gives them the majority in the 135-seat assembly that, of course, raising fears that we could see some type of future referendum or that urge for independence you can see the stock market there down 1% as is the euro >> let's look at commodities they are on the move we're seeing wti crude prices

off by a half percent. $58.06 brent world benchmark futures gauge, $64.71. off by 20 cents. also on the gold prices, woel check there. those sprayses had been holding around the 12.50 mark, now at 12.71. a bit of green on the board in terms of what's happening with the gold trade >> on the currency side of things, let's look at where the dollar is trading. euro is 1.18 against the dollar. a bit of weakness against the greenback on catalonia concerns. u.s. dollar against the yen, 113.35 pound holding on to 1.33 looking at cryptocurrencies. bitcoin losing a quarter of its value overnight, just in the last 24 hours, bitcoin plunged 25%. the selloff is not confined to just bitcoin it's other alternative cryptocurrencies down as much as

20%. ethereum has lost a significant amount over the past one day there were concerns from coinbase, the largest cryptocurrency exchange that individuals were complaining they could not buy or sell bitcoin on the exchange. we got an update this morning, coinbase saying it has resolved issues that disabled transactions that perhaps one of the concerns out there over the past one day. certainly a move to the down side >> if you look at the futures markets, they're young right now, one week for the regulated, two weeks for the cbo. if you look at the intraday highs, we're off 30% in terms of those markets. just to give you an idea how volatile it can be to the upside and down side. >> market cap, bitcoin has lost 1$120 billion of its market cap in less than a week. >> buyer beware situation. in political news, lawmakers striking a last-minute dole to

avert a government shutdown. the house and senate passing a temporary spending measure that will keep the government funded until january 19th congress is now, yes, done for the year they'll return to work in january. something to watch there nike reporting fiscal second quarter profits that beat expectations, also revenues as well gross margins did dip signalin stiff price competition. nike shares off by 2.25% in extended hours trading joining us now is sam poser senior research analyst from susquehanna. nike is one of those stocks that we gave up for dead it was not going to do well, too much competition from the likes of under armour and adidas. what are people not as bull ush

bullish on the results >> the reason is north america's revenue is down just under 5%. they have a target of $50 billion for 2022, which is predicated on north america's revenue increasing mid single digits nike's management is saying they expect sales to reflect in 2019, and it's a little too early to tell there as far as the run up in the stock this year, a lot of it came out of the analysts day a month and a half ago where nike's product mix was really strong and a lot of analysts and investors came away upbeat about it we're upbeat about the product, not about the stock. >> what do you think is behind the weakness in north america for nike is that predicated on the access of adidas?

>> i think that nike back about three years ago, when adidas started to show their stuff, they didn't think that was sustainable, and was complacent in a modest way. given the speed of information picking up, that left them somewhat flat footed now they're coming back and trying to come back strong i think adidas was starting at a lower base, but i don't think they have the breadth nike has i think nike just let their guard down a bit a few years ago. >> sam, lay out the playbook for 2018 you have big players like nike, also adidas, under armour. let's talk about the north american market which seems to be the concern how do these companies stack up? who will come out ahead in 2018 given what you know now? >> i think it's going to be a

real battle. i don't think we'll get clarity until the middle of '18. i think some of the retailers could be the winners in this more so than the brands, at least from what we've seen right now. it's become a law of scenarios adidas has to be more innovative, broaden their offering under armour has to make decisions about distribution or they'll probably be the largest share donor. >> the outperformance of nike over under armour staggering so far this year. sam poser, thank you very much for joining us bright and early on "worldwide exchange." happy holidays to you. >> thank you alphabet executive chairman eric schmidt is stepping down. landon dowdy has that story. >> good morning. schmidt is leaving his role as executive chairman but will

continue to serve on alphabet's board. he will be transitioning to a technical adviser role schmidt first joined google back in 2001 as a ceo in a statement, schmidt said the timing is right, and that he plans to spend more time on science and technology issues as well as philanthropy in his new role he will work on the spinoffs shares are unchanged in early trading. back over to you in other corporate news, a corporate shake up papa john's founder, john schnatter, you know him, he's in the commercials, is stepping down january 1st the move comes two months after schnatter made controversial comments saying that the protests by nfl players were hurting his company's sales. papa john's is a major advertiser during nfl games, and

schnatter is the public face in those ads. he will stay on with the company as chairman but not ceo. shares up by 0.1%. >> it was interesting, earlier this year, schnatter blamed slow earnings on players kneeling during the national anthem it was a move that upset some fans but again, as you pointed out, an interesting move here >> those are the controversial comments that maybe led to some of these issues. >> exactly other stocks to watch, shares of cintas are trading higher the company is raising its full-year 2018 guidance. the stock up 3.5%. chubb will launch a $1 billion stock buyback program. they say the current program will expire december 31st.

novartis says the fda has given primary review status for one of its cancer therapies. some other stocks to watch, roche striking a deal to buy u.s. cancer drugmaker ignyta for 1$1.7 billion roche will pay 27 bucks a share, a 74% premium to yesterday's closing price. ignyta has several drugs in development that use gene therapy to kill the understand lying diseases of the growth of cancer tumors. gbc sealed a deal to buy rival ladbrokes for 5$5.3 billion. gvc owns the sporting bet, foxy bingo brands ladbrokes merged with another rival in 2015, so some movement

on the againibgambling side of . it is a busy day ahead on the economic data calendar november durable goods and personal income and spending are out at 8:30 a.m. eastern that's followed by november new home sales and the final reading on december consumer sentiment at 10:00 a.m still ahead on the show, flying high. it's been a turbulent year for the airlines, will 2018 bring sol frie some friendlier skies? we'll breaking out our playbook for the airlines ahead. first the retail rush is on. just two shopping days left until christmas, so which stores are in the best shape? we're going on a last-minute shoppi seehengpr wn "worldwide exchange" begins

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no! no! yes! yes, indeed. amazing speed, coverage and control. all with an xfi gateway. find your awesome, and change the way you wifi. welcome back to "worldwide exchange," i'm seema mody. let's look at futures. they are pointing to a higher open the dow jones up 16 points in premarket trade. nasdaq up 6. s&p 500 higher by around 4 points switching to treasuries, above 2.4% for the ten-year yield. it's crunch time for the retailers with less than three shopping days left until the big holiday, yes, christmas. who will win this holiday season with us is mary epner. thank you very much for the

early wakeup call. >> thank you >> it's the super bowl for retailers. it's critical for so many people with a handful of shopping days left, who are the winners and losers in your mind so far >> it's a case of extremes we have luxury doing very well especially compared to last year because they had some difficult comps, plus the way momentum has been going, they've been great at the other end, we have discounters and massive retailers, so walmart, ross stores, target, and some department stores that are just rock bottom in prices. >> when you say luxury, you're not talking higher end coach and micha micha michael kors, you're talking luxury luxury. >> no. i'm talking gucci, prada, valentino. i've also seen coach, michael

kors and kate spade see improvements taking a cue off of what luxury luxury has been doing. >> do you think the fluctuation in currencies has made luxury more appealing >> that's one part of it but i am somebody who goes by product. the merchandise warrants new purchases. these are things customers do not have already these are new trends that makes the difference. >> you know what is different about the luxury side of things, we talk about the stock market at record highs. the people who traffic in louis vitton, gucci, they probably have exposure to the stock market as opposed to your maybe average every-day american if i'm looking forthose products that people are not predisposed to buying on the higher end of the spectrum, are there still shopping places where people can get a great

deal >> yes, crunch time is coming. so discounts are out if droefs pla droves. so places like macy's, bloomingdale's quality product that mirrors that aspiration the luxury look or the brand name. >> millennials, what are they buying this holiday season what does the research show? >> quirky, off-beat brands we have to stop telling them what they want and listen to what they are telling us >> and go on instagram because they're all there. >> a lot to of licensed team products, a lot of new quirky cosmetic brands like glacier, supreme, these brands that are building and building and they're not small anymore. these are over 1$100 million companies or have the potential to be. >> very interesting. thank you for joining us with that shopping list appreciate that. if you're going out there, do your part for the american

economy and buy some stuff before the holiday season. thank you very much. still ahead, taking back control. separatist leaders in spain declaring big wins in regional elections. we're live in barcelona with the election. and next year's global hot spots, the regions of the world you need to watch in 2018. [vo] progress is an unstoppable force. the season of audi sales event is here. audi will cover your first month's lease payment on select models during the season of audi sales event.

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welcome back to "worldwide exchange." i'm dominic chu. if you're waking up, let's get you up to speed on the market action u.s. equity futures pointing to a modestly higher open the s&p up by 4 points, dow jones up by 16 and the nasdaq by 6. trading action in asia, largely positive the shanghai composite was just about flat down fractionally. the hang seng in hong kong up, and the nikkei up by 0.2%. kospi up by a half percent in europe, a bit of a weaker market the spanish elections or the catalonia region specific elections are driving the action the dax down 0.2%. ftse up by 0.1%. cac in france off by a quarter of a percent the ibex in spain off by close to a percent in trading. >> sticking with europe, pensions are escalating in spain after separatist parties in catalonia declared victories in

the latest regional elections. willem marx has the latest from barcelona. good morning >> reporter: this was an election called by mariano rajoy, the spanish prime minister to try to take back control of catalonia it was anything but normal we had carles puigdemont, the ousted president of catalonia campaigning remotely from brussels, we had another campaigning from inside a jail cell in madrid nevertheless, their two parties combined with another separatist party have won a majority in the assembly that means there's a huge problem for mariano rajoy who called the election. the tensions have not dissipated it's what carles puigdemont, the ousted president of catalonia described as a slap in the face for mariano rajoy. >> given this vote, does this

raise the chance of another independence referendum coming to fruition in 2018? >> i chatted a few moments ago to one of the major figures in one of the separatist parties, he said they would try a different approach, doesn't seem like they would have another referendum, but that's their ultimate goal. so the real question is who will be leading this charge in catalonia with these two well known figures, one in jail, one out of the country, and how is mr. rajoy in madrid going to respond to this election which saw his own party drop down to a handful of votes, and his major political rival in madrid doing very, very well on the back of this they are themselves -- the citizens party, they are not able to form a government here likely >> for now, thank you very much. clearly a story we'll continue to watch in the new year i would point out that tourism to spain has done down substantially since that first referendum vote took place in october. less foreign visitors to spain since that vote happened

>> what i thought was interesting about the action, the idea that the banks are the ones taking some of the biggest hits caixa bank, but they're not down huge it's not a panic spreading >> we saw short-term volatility. sticking overseas what are some big themes to watch as we head into 2018 michelle caruso-cabrera has your 2018 playbook. ♪ >> reporter: as chief international correspondent, here's what i'll be watching in 2018 first, international trade will the u.s. withdraw from the north american free trade agreement or what we call nafta. the negotiations between the u.s., mexico and canada are extremely contentious. you can say the same about the world trade organization, the wto. the most recent meeting there ended in discord

numerous industries could be affected if the u.s. withdraws second, key elections around the globe. mexico, italy and the re-election of vladimir putin in russia mexico is of note because there's a chavez-like candidate running who is anti-u.s. and could be a thorn in the side of the administration if he wins. third, there's always north korea's nuclear ambitions. they are almost certainly expected to come up here at the u.n. time and again next year. >> that was cnbc's michelle caruso-cabrera the international theme is so huge, even given with what's happening this holiday season and the developments, but that u.n. vote condemning the u.s.'s actions on jerusalem >> and north korea, the probability of something

actually happening is low, but the consequences are extremely high if something were to happen so something to watch in 2018. especially to see the south korean president, he just ended talks with chinese president xi jinping, how those countries work together to counter the threat coming up a round up of the top stories and a check of the global markets and more on bitcoin's big drop, the cryptocurrency losing a quarter of its value overnigh wll tl t,e'elyou why. you're watching "worldwide exchange."

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bitcoin's big drop the crypt losing a quarter of its value overnight. we'll tell you what's behind the selloff. getting sick kicked, nike s under pressure after some weakness in north america. and flying high, what to expect from the airline industry in the new year. it's friday, december 22, 2017 you're watching "worldwide exchange" on cnbc this last friday before christmas. ♪ >> good morning. welcome to "worldwide exchange" on cnbc. i'm seema mody in for sara eisen. >> i'm dominic chu sitting in for wilfred frost. a lot going on in the markets this morning >> there is.

one week to go for the markets let's see how things are shaping up here in premarket trade with a look at u.s. futures we're higher across the board. dow up 20 points, nasdaq up 6, yesterday congress passing the short-term bill to avoid a government shutdown. this after the senate passed the latest tax bill. so it's been an eventful week ahead of the long holiday weekend coming up. dow up 21 points, s&p higher by 4. let's look at the ten-year yield. >> 2.48% in the last half hour just about there >> 2.48% >> let's talk about asian equities we saw a mixed picture there largely positive the nikkei in japan up 0.2%. hang seng up three quarters of a percent. the shanghai just about flat the kospi in south korea off by a half percent maybe marginal weakness in europe the dax in germany off by 0.1%

the cac in france, 0.2%. the ftse 100 in the uk, the out-performer, up 0.1% the ibex off a full percent. >> commodities have had an encouraging week let's look at where oil is trading. lower today, wti crude down 0.4% i would point out wti up nearly 2% this week we'll see how things shape up on friday, if that changes the weekly performance of oil. turning to gold, yesterday gold saw a gain of 0.8% it's up also about 1.5% so far this week. the gains continue, up another dollar at 1,271 we are seeing euro weakness and dollar strength on the heels of spanish catalonia election results. last trade for euro, 1.1852. the dollar/yen, 113.37 dollar strength there.

cable, pound sterling, 1.3378, the last trade there bitcoin also, we mentioned it before, losing a quarter of its value overnight. down about 37% if you look at the futures market from their peak to trough bitcoin coinbase prices off about 7% 14,450 the last trade there. >> coin base says it resolved an incident that caused all buy and sell orders to be disabled that was a concern or a story we were watching yesterday when bitcoin was moving to the down side. switching to political news, lawmakers striking a last-minute deal to avert a government shutdown the house and senate passing a temporary spending measure that will keep the government funded until january 19th congress is done for the year. they'll return to work in january. >> looks like the lights are still on >> for now nike shares are under pressure after reporting results.

landon dowdy joins us with more on that story. >> that's right. shares of nike slipping after reporting second quarter results. on the surface it looked like a solid quarter. nike with earnings of 46 cents a share, 6 cents higher than expectations revenues of $8 billion, but nike saw some weakness in the biggest market, north america. revenues fell 5% here signalling a pick up in competition but nike's ceo is hoping to reverse that trend by beefing up its partnership with amazon. take a listen to what he had to say. >> we are extending the pilot. we are bullish on where this can go from here i think the important part is that we advance the brand through better presentation, and then the sharing of data so we can better serve consumers. >> look at the stock shares up about 25% year to date the stock is down 2.2% in early

trading. back over to you >> thank you in corporate news, alphabet executive chairman eric schmit is st is stepping down he will transition to the role of technical adviser schmidt first joined google in 2001 as ceo. he became executive chairman ten years later. schmidt saying i believe the timing is right in alphabet's evolution for this transition. a quick look at shares unchanged, 1,070 they had a good year following this tech rally in 2017. how about a corporate shakeup. this is papa john's. the founder, john stepping down as ceo the move comes two months after schnatter made controversial comments saying that the protests by nfl players were hurting his company's sales. papa john's is a major advertiser during nfl games, and schnatter is the public face in

those ads. the chain did later apologize for those comments he will stay on with the company as chairman. shares up by 0.1%. down 18% over the past three months the sharing economy got a big wake up call in 2017 so what's in store for the new year here's the playbook for 2018 >> reporter: some of the biggest players in the sharing economy got a reality check in 2017. airbnb facing increasing regulatory pressure in some of its biggest markets and uber underwent a shakeup that led to the departure of its ceo and a crisis of culture. others like lyft raised billions of dollars in new capital and gained market share. here are three predictions for 2018 the debate over labor in the sharing economy could intensify as gig works who power the bulk of profits ask for more.

classified as independent contractors, these workers are not eligible for benefits or subject to traditional legal protections and they're already bringing lawsuits against lyft and grubhub among others. unicorns will grow up. as the likes of uber, airbnb go public, they'll have to clean house and tell the best possible story to investors given the scrutiny on corporate culture in 2017, they'll also have to make sure governance is up to par. three, softbank's vision fund will continue to shape winners and losers in the gig economy. with nearly 1$100 million in fie power and a desire to invest in the most disruptive players, masa son and company will be investors in ridesharing and co-working >> that's what to expect in 2018 i'm particularly interested to see what happens with airbnb the latest round, they raised a billion dollars, at a reported

valuation of 31 billion. this is seen as a big disruptor in the world of lodging and hotels it's why marriott hilton have been thinking about what they can do to fend off competition >> if you look at it, you can take the playbook for that and go into what uber did for the transportation industry. >> right >> the idea that you can have people as independent contractors and people offering their own hotel rooms, apartments and homes a lot of people have adopted it. i've not been an adopter maybe at some point i will, just staying in somebody's house right now feels weird. though i have used other services, like homeaway, those companies. once you try t you'll reshg it, it's not too bad it provides a more authentic experience if you're abroad. you can try out a cool hip apartment downtown in barcelona.

>> one of our bosses is on vacation for the holidays, their family is staying at an airbnb >> we will see if these companies go public in 2018 or stay private for longer. coming up, forget all the negative headlines we'll find reasons for you to spread the christmas cheer today's must reads are straight ahead. as we head to break, here's today's national weather forecast from bill karins. good friday morning to you this is a very busy travel day we have busy weather maps. winter storm warnings for northern new england, vermont, southern napolitano, upstate portions of new york, winter weather advisories, snow and slee sleet on top of it where the purple it, that's six inches of snow south of i-90, we could deal with freezing rain the freezing rain forecast, a quarter to a half inch massachusetts could be a mess tonight into saturday morning.

the forecast for today, heavy rain from dallas through areas of arkansas, tennessee and kentucky then the weekend forecast is going to take that mess to the east coast on saturday, possible airport delays, new york city also back down through the carolinas, still icy in northern new england. christmas eve forecast, a bit of light snow in new england, watch out christmas day in northern new england. got a snowstorm for you. atth's your business travel forecast more "worldwide exchange" when we come back building a website in under an hour is easy with gocentral...

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welcome back to "worldwide exchange." i'm seema mody alongside dom chu. time for our must reads. my pick is in the "wall street journal. u.s. tax reform has europe worried. being the big dog in europe is no defense when the world's largest and most dynamic economy is slashing its tax rates. a 21% federal rate in the u.s. will be impossible to ignore given the incentives it creates for european companies to invest in america instead of at home. speaking of playbooks for 2018, keep an eye on how foreign companies respond to this recent tax bill here in the united states do does it make america a more appealing place for international players. >> michelle caruso-cabrera was talking about international relations with the rest of the world. this is from the "new york post," maybe a more conservative pro certain group tilted

newspaper. but the front page here from the "new york post" is titled stop, go the weasels you have a picture of nikki haley in a sea of weasels, again, weasels in the united nations. this is the idea that the u.s. will have to think about what its relationship is diplomatically, economically or otherwise with the rest of the world. one newspaper, this is local to the new york market. it's not like a conventional thing, but still something to think about. >> a good sign -- or another example of how foreign policy is a big part of the debate in 2017 >> my pick is in "usa today." it's from the editorial board. it's titled reasons for christmas cheer. so the board writes, there is certainly plenty to worry about these days, north korea is sabre rattling again, the globe is warming and the president is, well, the president. so they go on to list a number of things. they say the economy is gaining

strength in the u.s. isis is on the ropes we've got teen pregnancy in decline, cancer mortality dropping and your vote being important. they also go on to say space does not allow us to cite many more positive developments in air safety, smoking rates, alcoholism, infapnt mortality, pay for women and other areas. for all those reasons, even worries ought to be finding some reason for christmas cheer that echoes the feeling for the season there's a lot to be thankful for. we have problems, no doubt, but there's things we can key in on as a positive going on in the market >> sure. absolutely economic signals, the market, we'll see if that continues. >> more people working >> but are wages going up? we'll see. still ahead, it's been a turbulent year for the airlines. but will 2018 bring friendlier skies? we're bringing you the playbook ahead. and as we head out to break,

another check on the futures picture. you can see here, modestly positive open shaping up "worldwide exchange" will be right ck ba

what's critical thinking like? a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods?

the value of capital is to create, not just wealth, but things that matter. morgan stanley welcome back cintas shares are trading higher they had better than expected second quarter results the company is raising its full-year 2018 guidance. chubb will launch a $1 billion stock buyback program. the largest casualty and property insurance company says the current progra will expire december 31st. novartis says the fda has given priority review status for it's combo therapy to treat stage 3 melanoma p priority review expedites drugs that are expected to have a

significant impact on the treatment of a disease some other stocks to watch, roche striking a deal to buy u.s. cancer drugmaker ignyta for $1.7 billion roche will pay 27 bucks a share, a 74% premium to yesterday's closing price. ignyta has several drugs in development that use gene therapy to kill the understand lying diseases of the growth of cancerous tumors online gambling firm gvc has sealed a deal to buy rival ladbrokes for $5.3 billion. gvc owns the sporting bet, foxy bingo brands ladbrokes merged with another rival in 2015. airlines are expecting to soar in the new year with industry experts forecasting record profits in 2018 here's phil lebeau with next year's playbook for the airline industry the airline industry is

soar ing as it flies into 2018 thanks to strong demand in the world's key markets. from the u.s. to china to europe, airlines are expecting near record passenger levels in 2018 that's one reason why global profits for carriers are forecast for $38 billion, an all-time high. one reason profits will increase is because airline fees and revenues will keep climbing higher in 2018 from checked bags to changed reservations, airlines are projected to rake in more than $57 billion in revenue from those fees as much as passengers may complain about the fees, they are not going away. peoplely, expect to see low cost carriers continuing to expand in 2018 spirit and frontier see more routes they can add here in the u.s. as they expand domestically low-cost international carriers

will continue adding routes from europe to the u.s., setting up 2018 to become a very busy and very profitable year for an airline industry poised to climb higher phil lebeau, cnbc business news, chicago. >> another burning question for investors, when we look at the airline space f we'll see more m&a and deal activity. yesterday there were reports that boeing was going to buy the brazilian aircraftmaker, embraer. that stock was halted on the report, then opened sharply higher clearly one story to watch >> they've confirmed those talks now. that's news. the companies have both said they've been in talks but are waiting for embraer, partly state-owned in brazil. which means brazil has one of those golden shares. they have the right to reject a deal that could happen there it speaks to the idea that it is becoming hyper competitive, not just because of the airlines, but the manufacturers as well.

boeing has never been one that you associate with these smaller, short haul jets >> no. good point >> for those people who commute on these new york to d.c. or boston to d.c. routes, you're probably flying an embraer regional jet, or the candair jet by bombardier. this whole thing plays out like a corporate soap opera >> especially looking at those three players. from the airlines to the broader markets, what's in store for your money in the new year with us is scott clemens scott, there is so much to talk about because nobody -- i shouldn't saynobody, fewer people out there predicted after the election that we would see a 30% run in the dow, a 20% run in

the s&p 500, maybe we could have gotten a rally but this seems like something that was not on a lot of peoples radars did we draw forward a lot of those returns this year? could we expect modest returns next year or is the bull run still intact >> i think the bull run is still intact for the fundamental reasons that drove the market this year. it's a fundamental story related to corporate earnings. corporate earnings have been healthy all year long. tax reform helps, but it's icing on the cake of an otherwise pretty positive back drop for 2018 >> that earnings growth, is that already priced in to stocks? if not, which sector is likely to outperform? >> it's hard to say a lot of it is not priced in with the rallies we've had this year. the economy is in good shape, personal consumption is healthy. that's 70% of the gdp equation tax reform puts more money in peoples pockets, valuations are

a bit of a constraint. not the tailwind they have been. but not enough of a constraint to slow the bull market. >> if you had to pick one sector, what would it be >> sectors related to the consumer because of the combined tax reform, the corporate benefit on the bottom line >> from an allocations perspective, we talk about stocks all the time, are there hot spots elsewhere in the market that you're looking for either towards an investment angle or a risk sign >> the opportunity that arises from the tax reform is smaller to mid capitalization stocks those companies don't have the ability the larger companies do to adjust to the tax system. so that's where we would look for opportunities in 2018. some of that has begun to play out. we're still finding opportunities abroad playing out. we have a healthy allocation outside the united states.

>> are you a buyer of cryptocurrencies if not, is this the time to get in just in the past week bitcoin lost 1$120 billion of its market cap. it's come in cheaper >> it won't surprise you to learn the 200-year-old private bank doesn't own cryptocurrencies for its clients. i wouldn't mind in my stocking but not in my portfolio. it's important to draw a distinction between cryptocurrencies and bitcoin the parallel to the dotcom era is important throughout the whole dotcom boom and then bust there were a small handful of companies that not only survived but thrived. i think that may play out to be the case here as well. at present, no bitcoin, no cryptocurrencies in our portfolios you saw bitcoin this morning, bottomed out at 12,500 the price volatility, proliferation, that all characterizes a bubble to me let's talk open ended. we've been throwing playbooks out for the last couple of days or so. what will be the hottest theme

you mentioned some of these investment angles. on your radar what is the thing that catches your attention or the attention of investors in 2018. >> i think the thing to watch in 2018 is what happens with wages. if we get an acceleration in wage growth, the unemployment rate is at 4%. unemployment rate for those with a college degree or higher is 2% at some point the wage pressure builds if that becomes inflationary, it may influence or dictate the pace at which the fed raises interest rates, that could have negative implications for the market if we get an environment in which wages grow modestly, again the benefit to the economy and the benefit to personal consumption could be another beneficial tailwind to markets >> scott, thank you for joining us on "worldwide exchange. things to watch, bitcoin down 25% in the past one day. >> that's it for "worldwide

exchange" this morning merry christmas, happy new year to everybody out there i'm off next week. >> "squawk box" is next. i'm not. i'm here join us. is this a phone?

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it's the last "squawk box" before christmas, just three days to go and we put together a top-notch last show. andrew was off, but no reason to fear we've got you covered. joe and becky are here steve grasso is here to help carry the weight and tell us how tax cuts could boost the growth rate trading in bitcoin reached foa f foo fevered pitch. was caused the rise, trump, earnings or both, or does credit

belong to synchronized global growth three hours to go, we'll all make it somehow, you're watching "squawk box," and it starts right now. ♪ live from new york where business never sleeps, this is "squawk box. good morning, everybody. welcome to "squawk box" on cnbc. we are live from the nasdaq market site in times square. the last day before the holidays i'm becky quick along with joe kernen andrew is out today. >> early christmas >> for the next two hours, steve grasso, a fast money trader, great to see you >> great to see you guys >> we will talk about a lot of things, let's look at the u.s. equity futures we did see the markets, the major averages see some gain