tech on a tear the nasdaq breaks through 7,000 as chip stocks rally to kick off the new year north korea reopens cross-border communication with south korea as tempers cool in the region and southwest airlines showing some real love for the new tax law. we'll tell you how it's january 3, 2018 "worldwide exchange" begins now. ♪ good morning warm welcome to "worldwide exchange" on cnbc. i'm wilfred frost. let's check in on the global markets. the positivity that we ended with yesterday continues, albeit

in a much more muted fashion a tech-inspired rally. we also had the russell, mid caps, transports all nicely higher slightly higher this morning, but only slightly. the one question mark yesterday given the rally was that the bank stocks did not take part, particularly on a day where yields rose as well. let's look at yields they rose nicely yesterday so it was a proper riie risk ony the ten-year, 2.46 this morning. markets around the world asia was nicely stronger yesterday. today stronger again not quite as resoundingly. we have a holiday in japan today. european boards were down yesterday, about 0.3%, 0.5%. up today the ftse is flat germany and france are up a bit.

let's look at the broader markets. oil prices gained a bit yesterday -- were flat yesterday, flat again today. still nicely above $60 for wti 60.5 the price this morning. moving on to the gold price, which was up about half a percent yesterday. flat today 1316 is the price of gold. dollar the big question mark over the last couple of weeks. it rallied for the first part of december as the tax bill got passed, slipped for the second part of december and continued that slipping early this year. lost about 0.3% yesterday. the euro and pound hit highs not seen since september euro close to 1.21 elsewhere, the slide in the dollar over the last couple of weeks seems to have stabilized bitcoin around the 14,000 level,

pushing to 15,000 yesterday. turning to the wall street agenda looking for manufacturing and construction data at 10:00 al eastern, followed by minutes of the fed meeting at 2:00 eastern, and we'll hear from automakers throughout the day. let's talk more about the trading day ahead and the trading year ahead, peter boockv boockvar, a cnbc contributor is here good morning >> good morning. >> minutes today, should we ignore them because of the ma makeup changing or still some insights to learn? >> i think ignore them after a fed meeting we hear a multitude of speeches from members. we already know their thoughts they're all over the place with the minutes. i don't think there's going to be a clue. we're clear on what they'll do this year. they want to raise three times they'll continue on the quantitative tightening. >> in terms of the change of the makeup of the fed, there's

appointments to come, normal rotation of voters that happens. is that important to note? neel kashkari is one who did not vote for a hike. he falls off does that increase the chance for more hikes what's your forecast for the year ahead >> i think it firms up the chance for hikes john williams replaces him who wants to hike rates. we also have charlie evans who comes off, replaced by loretta mester who wants to raise interest rates if there was question of them following through with three, it's put to rest with the new complexion we still need a new new york fed president and a new vice chair i think the fed wants to raise three times. they want to continue with the balance sheet reduction. where the stock market goes and the economy goes can change that what is going on with the dollar the last two, three weeks. it was weak for most of the year, then it picked up. now slipping again despite various factors occurring that

you would think are supportive of the dollar. >> that's been the entire year everyone thought the fed was ahead of the curve for raising interest rates, and that should be good for the dollar there's a concern with the flattening of the yield curve. there's a concern about budget deficits in the u.s. the ecb is cutting pack on their qe purchases that's a bid to the euro, in addition to the trade surplus. i think people have to wonder why the dollar trades so poorly here and what is that telling us what >> what is it telling you? >> that fed tightening typically ends poorly. it's going to lead to an economic slowdown at some point in 2019, irrespective of the fiscal boost to the u.s. economy at the same time that other central banks will be following the fed in terms of tightening >> do you think the ecb will be following the fed? we talk about them tightening a few years ago however they have

a single mandate, it's inflation and inflation is not there >> it is bubbling there. we saw an upside surprise in german inflation last week and a multitude of pmis talking about inflation pressures. we have commodity prices yesterday that closed at the highest level in nine months so we are seeing the percolation of inflation the ecb is well behind the curve in that they're even still doing qe >> coming back to the u.s., how long can we continue at the current roughly 3% growth rate before these issues take hold? >> that's the $64,000 question a real test is q1. in q4 we saw a rebuild from the hurricanes we also see confidence in the economy. we'll see highwow that translats into growth. will the tax cuts fall into the bottom line. will companies follow through with capital spending? q1 i think will be a good tell for that >> as ever, pleasure to see you.

peter boockvar joining me. u.s. airlines handing out big bonuses on the back of the tax law. landon dowdy joins us with the details. >> good morning. airlines are celebrating the gop tax plan southwest and american both announcing they'll give $1,000 bonuses to employees following the tax overhaul that president trump signed into law last month. southwest also announcing that they'll use tax savings to buy new planes the company saying it intends to reinvest in the business, reward share holders and increase its investment with boeing to support future growth opportunities. the two major airlines are the latest businesses to ray nou se bonuses. look at the stocks both trading flat. back over to you >> thank you very much for that. stocks to watch today. moneygram says its proposed 1.2

billion 5:xacquisition of ant financial has been called off. they failed to get approval for the committee for foreign investment in the u.s. which reviews foreign purchases of u.s. firms for national security concerns ant financial is an affiliate of alibaba. alexion pharmaceuticals says it will work with elliott management to fill an open board seat last month the "new york times" said elliott built a stake in alexion. novartis says the fda granted break through status to treat breast cancer in premenopausal women. the stock is flat in swiss trade. still ahead on "worldwide exchange," decision day for financial regulation everything you need to know about the mifid ii rules going into effect across europe.

and north korea opening dialogue with the south. we're headed to the korean peninsula for a live update.

welcome back to "worldwide exchange." let's get you up to speed on the market action. futures pointing higher relative to yesterday's gains treasuries, yields rose yesterday. it was a traditional risk-on

day. selling of bonds, buying of equities 2.465 on the ten-year. following the developing story out of the korean peninsula. north korea reopened a cross-border hotline with south korea. it's the latest sign of slightly easing tensions between the two nations. let's get to chery kang with the latest on that good morning >> reporter: good morning. so north korea is starting the new year with a charm offensive. it revived the phone line with south korea at the interkorean border village that has been cut off for nearly two years. south korea is very much welcoming this development the top office calling it very much meaningful, a significant development. quite a turnaround for the most of 2017 but washington is skeptical.

we have some reaction from u.s. president donald trump a couple of tweets one very much playing it down and another one talking about how he's got a bigger nuclear button than the one that kim jong-un claims to have all the time on his desk we've got u.s. ambassador to the united nations, nikki haley saying that the fundamentals don't change staying consistent on that washington policy on north korea having to go nuclear-free. so i think the question at this point that we need to ask here is whether north korea does want to make nice out of goodwill without any strings attached back to you. >> thank you very much for that. also developing -- excuse me, also following the developing story on iran at least 20 people have been

killed in clashes between anti-government protesters and security forces. the supreme leader blaming the west for the violence. more than 450 demonstrators have been arrested since the protests began nearly a week ago. sticking with news from overseas, today is the day that sweeping new financial regulation goes into place across europe. it's called mifid ii, it impacts equity trading to the cost of analysts research. joining me is financial times reporter phillip stafford. good morning to you. thank you very much for joining me very quickly, we discussed it a bit yesterday, but frame for us the main changes taking place. >> well, it's a very, very wide and sweeping piece of legislation. 1.7 million paragraphs to boil it down. it's going to open up transparency, especially in the off exchange market, fixed income it will demand a lot more transparency in how you set prices for analysts research and

what exactly you're paying for there's more reporting on transparency in etf markets. >> in particular in terms of paying for research, firms have to pay a specific hard dollar amount as opposed to in the past where they covered the cost of research out of commissions for trading. when we think about that, the aim was transparency what are some secondary side effects that could be expected >> well, one of the big things is that this is ultimately a huge i.t. project. so there's been an awful lot of upgrades of systems to introduce new reporting standards. so in theory the end investor should be getting more mention about their trade, especially in things like the etf market which has been lagging in europe compared to the u.s. for many years. one reason why was because there wasn't an awful lot of publicly available information.

now i don't think you are going to get much of a big bang today. it's one of these pieces of legislation that people will wonder come the end of the day what was all the fuss about? then they'll look back in a year two years time and say, yeah, that was quite something this will be the case here as the information trickles out, as people get used to it, they'll have a better idea of how much they're paying for something, where it's being traded, and maybe end up with a better product somewhere down the line >> what's the chance this becomes the global norm as opposed to just a rule for the eu >> this is possibly one of the big unknowns about mifid ii, and there's a lot of focus on this, both in the u.s. and asia. if it works in europe, yes, i suspect that the demands from fund managers will become too great. and that that will probably result in legislation elsewhere. once you let the genie out of the bottle, if the fund managers

and others like it that will lead to pressure elsewhere and you need the legislation it will just become the best practice it's one of those cases where by the time legislation comes in, everyone will be doing it. so this is an unknown quantity, but an exciting time as well >> i find it exciting, too but that puts both of us in the geek box. final question -- >> i'm afraid so >> the u.s. investment banks, what does it mean for them in terms of are they worried are the the moment for brot profad s and revenues or is it a number of concern for employees who may see them cut analysts numbers but not impact the bank's bottom line >> yeah. i think the latter is very much towards where it will end up yes, certain employees will be

worried, but as we have with regulation, usually it jacks up the cost for everybody who the best positioned in that respect, the u.s. investment banks. they can afford to service all sorts of clients around the world. in the middle you have some smaller mid-sized banks, european banks they may find it harder. strangely enough, when you get down to the bottom tier of the market, you can specialize better and mifid ii might help that the squeezed middle as they call it you can't be everything to everybody, so where do you focus? which bits do you say, you know what we don't make an awful lot of money here >> phillip, thank you very much for shedding light on that still ahead, back to work for congress they return to washington today. we'll tell you what is on the

agenda there as we head to break, the national weather forecast from bill karins. good wednesday morning to you. a lot going on with our huge ocean storm. this is primarily an event for coastal areas of the east coast. we're already watching ice storm underway winter storm warnings through the coastal carolinas, energy and even north florida the amount of ice, never seen this before in north florida this is a quarter inch of ice. that's a half inch of ice. this pink could be the possibility of three quarters of an inch of ice that's unheard of. we will have major power problems and downed trees if this materializes today. savannah to charleston, you have up to four to six inches eastern north carolina gets hit with the snow. and blizzard warnings for eastern new england and those winter storm warnings along the coast. big cities like new york, philly and d.c., you are on the lighter amounts of snow. towards the coast, that's where

it gets heavy, especially in eastern new england what a storm it will be over the next 36 hours. that's your business travel forecast more "worldwide exchange" when we come back

welcome back to "worldwide exchange." if you're just getting up, let's get you up to speed on the market action. big gains in the u.s asia is higher, but not as high as it was yesterday. hong kong had a big gain japan is closed today for a national holidayment europe,

we're seeing slight gains off the back of slight to medium losses yesterday down about 0.3% to 0.5%. up 0.3 for germany and france. futures in the u.s. are pointing higher, albeit just slightly we're up a couple points on each index this morning the senate returns to work today following the holiday break. there's a lot on the agenda. let's get to tracie potts live in washington with what to look out for. >> good morning. so there are some big things that they want to do, like welfare reform that could take time and some things they have to get to right away, like the budget today the president's legislative director and budget director are coming to capitol hill to talk about that with congressional leaders. to talk about spending limits. the white house says the president wants a two-year budget that protects the military and advances some of his priorities along with that budget and the

deadline for that is january 19th, congress has got to renew children's health insurance funding. it got a temporary band-aid at the end of last year a lot of states running out of money and are waiting to see what washington will do about that also about disaster relief for florida and texas and puerto rico and the virgin islands. that was also left hanging on a permanent basis at the end of the year there are some new voices coming in to capitol hill today doug jones of alabama, tina smith of minnesota replacing al franken. it bumps up the minority of democrats in the senate by just a little bit could make negotiations harder if republicans are not all on the same page. they have less margin for error. >> new faces coming in some speculation of possible others to come, including a former presidential candidate. >> mitt romney there's talk that he could run for the seat that orrin hatch just announced that he's going

to be retiring from in utah later this year. >> thank you very much for that. still to come tonight on cnbc, don't miss the season premiere of "billion dollar buyer" tillman is offering two small businesses an opportunity that could change their fortunes forever. >> you look like a texas cowboy. i should have worn my boots. i look like the california metro guy. i'm the one from texas we need to change right now. i wear my has the like this. >> yeah. >> come on, partner. >> let's go. how many cows do you have? >> 120 these are what we'll harvest next month >> so what makes it organic? >> everything is certified there's grass. no pesticides or spray >> they're out here enjoying this vitamin "d" and eating an amazing diet like us, what they put into

their body affects how the meat comes out. >> look at them. they don't look stressed at all. >> don't miss "billion dollar buyer" tonight at 10:00 eastern time still ahead on "worldwide exchange" a round up of the top headlines a check back in on the global markets. bill ackman is making a big bet on himself we'll explain how when orwi ehae" returns i love you, basement bathroom of solitude, but sometimes you stink. febreze air effects doesn't just mask, it cleans away odors.

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the nasdaq pointing to another record open. ackman's big bet on himself. why he's feeling extra bullish in the new year. and where's the beef the new mcdonald's menu item that is getting a lot of buzz today. it's wednesday, november 3, 2018 this is "worldwide exchange. good morning warm welcome to "worldwide exchange" on cnbc. i'm wilfred frost. we got slightly positive open expected if we are looking at the futures market up five points for the dow the nasdaq leading the way up five the s&p up 1 lets look at oil prices, which were essentially flat yesterday. slightly higher today. 60.05 for wti. it's been a good couple of weeks for oil prices asia had a great session yesterday. higher again today slightly only.

shanghai up 0.6. the nikkei is closed for a public holiday european trade, we lost about 0.3% to 0.5% esterday. we are higher today. about 0.3% for germany and france the ftse 100 is flat turning to today's wall street agenda, look for manufacturing and construction data at 10:00 eastern, followed by minutes of the fed meeting, we'll hear from the automakers as they report december sales let's talk more about the trading day ahead. joining me is daniel ives from gbh insights in terms of that rally yesterday, in particular led by tech stocks and the nasdaq, how encouraging is that so early in the year given the big gains >> we think it's the start of a major trend. if you look at the secular trends here, we have a better-than-expected earnings season over the next month or

two. overall, if you look at guidance coming up for 2018, probably 5% to 8%. i think this is just going to be from a multiple expansion the strong secular trend you saw semis, apple, e-commerce, netflix. this will be a f.a.n.g.-led rally with small caps joining. >> some people get nervous when they hear f.a.n.g. led you say the five biggest tech companies around will lead the way. is there an essence there that there could be something wrong with this thesis >> those are the ones that lead it, but you also look at cloud, you look at streaming. you look at e-commerce but now it's sort of you go to that second layer. who are the guys that benefit from ai, from cybersecurity, from some of the bigger trends that's where we think you see a broader rally. but i think you look at the fang

names that will lead this, you step back. the repatriation, 300 billion, 400 billion that comes in, a lot of m&a consolidation, that will spread across the board for tech right now we don't see anything stopping the tech rally in terms of earnings consolidation and multiple expansion >> i will bring in mark and get your views for the top trends of the new year we were talking about f.a.n.g. do you think alexa could deliver to the bottom line for amazon? >> i think one of the trends at ces 2018, the world's biggest tech show next week, more companies will be making amazon-alexa enabled devices and there will be a war between google and amazon in terms of which services make their way into the services. yesterday, lg announced they are

i think that's where the war will continue. >> cloud computing has been a big winner for amazon. does that start to turn in the opposite direction because competition is so fierce with other cloud computing companies or other retailers that use some of their cloud services? >> i still think they'll continue to be strong. the competition is getting stronger, but when you look at their entire business model and how they're looking to expand alexa into the home, also to our daily lives, voice assistants in general are getting smarter. amazon is looking at more ads when it comes to alexa so combining the cloud smarts. up to now it's been getting more prime subscriberers. now it's can they make money from the devices other than just ordering amazon stuff. >> you are strong amazon

>> i'm long and strong amazon. on the consumer side, we think 45% to 50% of e-commerce they own. now it's about the next step is it pharmacy is it healthcare right now it's their world everyone else is paying rent >> in terms of the other question marks for the year ahead, what's the impact of disney taking over the fox assets >> i think it will be a huge shakeup in terms of the media landscape and streaming. especially for netflix even before this merger was announced, there was a threat from disney's streaming surfa i, and they were saying we'll carry all our movies, and the marvel shows that are so popular on netflix and whether they will bring them into the fold that's a threat. then you have disney's stake in hulu and they'll gain ownership of that service. too could be more of a competitor, not just to netflix but services like sling. finally because they have so much influence and all these

different services, when you think about the cable world replacement services like sling tv, they can say if you want all of our channels for disney, you have to take our fox channels too. that could increase prices for sling tv, which starts at $20 a month and they could be pricing people out of their competition. >> have we passed the peak of where new media threatens traditional media? is this the year where traditional media fights back? >> it schlis, but it remains to how good they'll be at it. what is the user interface like? is the bandwidth enough? i think there's a lot to learn there. also apple, yesterday it was reported that they could be taking a hard look at netflix. it makes sense despite it would be a hard company to swallow, just because they're so far behind when it comes to media streaming. and i do think they need another part of their refr knvenue strem

that's about recurring revenue as opposed to just devices >> do you put weight behind that rumor that apple could buy netflix? >> i think there's some merit in the fact that you'll have roughly about 200 billion repatriated. this is the window of opportunity for apple to really look at streaming. if you're going to do it, you have to do it with netflix instead of buying piece meal apple needs that second growth driver if you look where it is, it is in streaming the apple netflix potential acquisition would make a ton of sense. they should have done it years ago. but it's something to keep an eye on if apple decides to pet bet on streaming now, that's a potential buy.

>> great stuff thanks for joining me. still ahead on "worldwide exchange," bill ackman is betting big on bill ackman we'll explain what we mean the hedge fund manager's new strategy for the new year. before the we go to break, a quick check of the bond market we're back here in a couple minutes. for your heart...

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welcome back to "worldwide

exchange." futures pointing higher, only slightly relative to yesterday's gains. the nasdaq was up 1.5% yesterday. oil prices slightly higher as well fractionally lower yesterday hedge fund manager bill ackman is making a big bet on himself in the new year. leslie picker is here to explain. >> that's right. in the first trading day of the year, bill ackman along with a group of pershing square advisers announced a plan last night that would increase their ownership in their firm. pershing square with a tender offer of up to 3$300 million by the management team who believed the firm was undervalued pershing square is publicly traded in amsterdam and london and has been trading to a discount of net asset value. some may argue that discount was warranted after a rough 2017 for pershing square.

ackman took a $4 billion loss after selling his stake in valeant in march then he had a contentious proxy fight at adp, and last week pershing agreed to settle a lawsuit for 1$194 million reducing pershing square's performance for the year by 132 basis points pershing square was down 4% in the year, making 2017 ackman's third consecutive year of not just under-performance but negative returns >> those returns, i forget highway bhow bad prior years were how big is this 300 million buyback of shares relative to the maul bsmall buybacks over t course of the couple years >> little by little each week we'll see results come in throughout the week. it's something that has not been

effective enough to narrow the discount so they have not -- that hasn't been working for them. they are still trading at a significant discount so this is the next measure they're taking in order to narrow that and it remains to be seen whether that will work for him. >> where does it stand today compared to its peak >> roughly $10 billion at the peak it was closer to 16 billion. ackman has strict lock up requirements it's a type of situation where even after three years of negative returns, lps can't just redeem at will they have to redeem incrementally if at all. so it's something where you will not see this huge rush for the exits immediately. it will take time and they have the capital. >> even if investors wanted to do that. exactly. time for our top trending stories. landon dowdy is back with along

at what is buzzing >> beyonce is returning as coachella's headliner after canceling last year due to her pregnancy. you have ever been to coachella? >> i have not been of all the festivals in the world, i would consider this one. nice weather, mornings by the pool better than camping in the rain. >> it brings in a lot of money like 1$114 million you see 125,000 people. >> so successful they made it two weekends about five years ago. i considered it, but still haven't done it. justin timberlake announcing his brand-new album yesterday. >> not that excited. >> because it's not your boy band this is the american boy band. >> he's cool >> i'll be excited about this one. he a few details about a new single expected to drop on friday he also posted a trailer for the

album ims catself called "a manf the woods. >> i'm quite excited you teased it well he's cool. >> so, this actually looks like a perfume ad don't know if you saw it >> yeah. >> his wife is in it his child is in itful. >> this wasn't a music video >> no, this was strictly a promo. brilliant. it has us talking about it >> mcdonald's is testing a new burger complete with fresh beach. the arch burger is going for a trial run at seven u.s. locations. in march of last year the chain said it would start making its quarter pounder available with fresh beef in 2018 >> two thoughts in this i'm annoyed you told me about this in january when i'm trying to be healthy. secondly, i didn't know they weren't using fresh beef

already. >> they were frozen. they have to do this to keep up with shake shack >> i still think shake shack, in and out, people always talked of them as a premium burger but they have the same effect on you. >> getting fat >> no, an hour later, you are like i shouldn't have had such a big fourth burger. i don't think they feel that much more healthy. >> what are you doing? low carbs? >> no carbs for barbs. >> it hasn't done well yet >> especially with mcdonald's doing this one jeopardy contestant lost out on $3,000 after mispronouncing coolio's gangsta's paradise. >> a song by coolio from dangerous minds goes back in time to become a 1667 john milton classic >> nick? >> what is gangster's paradise lost >> yes our judges have re-evaluated one of your responses, nick.

you said gangsters instead of gangsta's, so we take 3200 away from you you're now in second place >> the clip has gone viral on facebook >> i think this is appalling not least because i would have got the pronunciation wrong. this is -- i think it's verging on being discriminatory. what if someone had come from a different background and pronounced it wrong. >> is this more about you or this >> i would have gotten it wrong as well. i'm serious. i think it's appalling it's so close. it's clearly the right answer. i find it astonishing. unless that's something they do every day with every answer, unless you pronounce it exactly right. >> rules are rules it just means you have to stay gangsta. >> and i would have gotten it wrong myself. approaching the top of the hour the team is getting ready for squawk i probably pronounced that

wrong. from new york with a look at what's coming up >> think of this chain bragging about all fresh ingredients, you said pepper. >> i don't think i said pepper i said papa. >> i would never be able to answer any question for a quiz in america >> alex has quite a few embarrassing moments the most embarrassing ones when he get condescending about a tough answer that i know he had no idea what it was. and he kind of looks at the contestants and goes, huh. or when all three of them don't get it he looks like, wow, we've got a really -- any way. >> the equivalent in the uk is university challenge >> that's probably better. you can't say gangster -- you can get a hernia >> which is why i won't try. >> you say gangsta naturally,

don't you? >> i am one. that's why i know how to say it. >> you know what i don't know, you're a young fellow wilf, you're not nearly -- you have a degree of cynicism. with me, these predictions we get, we have them again. >> you have cynicism >> a little bit. >> really? no one noticed >> we know predictions they're difficult to make, especially about the future. people come on and talk about the outlook going forward. it's like -- they're very good at the outlook going backward. but a lot of them are sell side. so their predictions, when they're not managing money, they're sort of trying to keep the job at whatever big firm they're working for. >> in europe from now on they have to make sure they get them right or people won't pay for their research with mifid ii >> but the buy side guys with money on the line, they don't even come on why would they they don't want to spread around their wisdom

so the guys who have a chance of getting it right don't make predictions, except voting with their feet the up withes that do talk, it's blah, blah 8%, 10% we'll do it any way. >> i'm sure the guests you have on doing his predictions can't wait after that. >> this one today, those -- none of those predictions came true he said, well, i told you they were supposed to be surprises. byron is on, maybe. >> unless he heard this tease. >> yes >> one thing i can predict about the outlook going backwards, tech stocks went up 1,000 points on the nasdaq in eight months, which is like -- i think that's 17%. now it's mostly because of apple, microsoft, amazon, alphabet and facebook, but this year looks a lot like last year so far, doesn't it

we're not far from 25,000 on the dow. the nasdaq really was -- >> tech is over 20% in the u.s., in terms of market cap in europe, it's 6%. it's sort of a bit embarrassing for europe >> well -- >> joe, we'll leave it there we look forward to "squawk box" in ten minutes time. >> you mispronounce "squawk box. twitter. >> still ahead on "worldwide exchange," the fed in focus. minutes from last onntmh's meeting hitting the tape today we're back in a couple minutesdt we have a potential to make a difference.

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welcome back to "worldwide exchange." i'm wilfred frost. futures pointing higher. a few points across the board

this morning joining us is john silvia from wells fargo securities good morning >> good morning. >> let's talk about the fed minutes and what to expect today. are they less important than normal given the changing and voting makeup of the fed >> following on your conversation with peter boockvar earlier this morning, the minutes are much less important. also when peter talks about the first quarter or next year, we're looking at capital goods orders, consumer goods orders, elements like building permits, as indicator os of how strong tt first half of 2018 is going to be >> in terms of that elusive 3% growth, how achievable is it going into this year and more broadly into the rest of the r foreseeable future the trump term >> that's the split you need to focus in on. 3% is achievable in 2018 consumer confidence is sky high.

looks like equipment spending will pick up government spending is picking up sustainable over the long run, our argument has been you need to look at productivity and labor force participation rates. those are two fundamentals to give you 3% over the long run. we still have more like 2.5% in 2019 and 2020. >> in terms of some of the charts you liked in 2017, one relates to homeownership and whether millennials will start to buy homes sum up your views on that as we go into the new year. >> we think they'll pick up in terms of homeownership the character of the homes will be smaller, more urban in terms of townhomes and condominiums. they will not pick up at the pace for the baby boomers because of the price of land we see some improvement in housing going forward. >> in terms of funding this, is

it mortgage funded and what do we expect for rate hikes and mortgage prices this year? >> yeah. our concern is at the short end. that we're looking at three fed rate hikes in 2018 that will raise the short-term cost of funding, not only for homes but also for automobiles so, the adjustable rate mortgage we think there's a bit of a barrier there in terms of real strength in housing. we do expect better in housing but there's going to be a financing challenge. >> in terms of the balance between fiscal stimulus coming on and monetary stimulus being removed, however can that yuf set last are we too late in the cycle for it to be more than a one-year effect >> i think you'll run into problems the second half of this year as the bond market looks forward, the treasury financing in the year ahead, and as you see the fed shrinking its balance sheet, i think the challenge will be the third and

fourth quarter of this year in terms of how rates may move. we're talking about real interest rates inflation is modest, but those real rates will start to kick up >> in terms of the positive surprise we got this year in terms of global growth helping the u.s. economy, is that positive surprise now gone, even if the growth remains, it's priced in. >> absolutely. you got it the surprise was a jump from 2016 to 2017 2017 to 2018 pretty much sustained improvement. a lot of it is in the united states but the surprise is in terms of europe or canada, the recovery is in brazil and russia. that is pretty much done deal. we don't see another upwards surprise in terms of global growth >> john, pleasure. that's about it for "worldwide exchange. futures pointing higher by a few points following those big gains

we saw yesterday the nasdaq led the charge up 1.5% "squawk box" comes up next is this a phone?

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tech stocks start the year in rally mode as the nasdaq breaks through 7,000 on strength from the chip sector and those big f.a.n.g. stocks. breaking news, north korea reopens cross-border communications with south korea as tempers cool in the region and perhaps kim jong-un realizes size does matter when it comes to buttons the latest ahead. and bill ackman's big bet on himself. why the hedge fund manager is feeling extra bullish in the new year it's wednesday, january 3, 2018. "squawk box" begins right now.

♪ live from new york where business never sleeps, this is "squawk box. good morning welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. let's look at the u.s. equity futures. yesterday the first trading session of the year, and you saw more records across the board. the s&p 500 and the nasdaq, the russell 2000, dow transports all saw record closes. the nasdaq pushing above the 7,000 level for the first time ever this morning green arrows once again. modest advances. the dow indicated up by 6 points s&p futures up by 1. the nasdaq up by 5 the dow saw a triple digit gain yesterday. up by 104 points