breaking news from wall street to washington, u.s. futures clawing back after the dow plunged more than 1,000 points yesterday the index is on pace to see its worst week since the heart of the financial crisis the u.s. government officially shutting down after lawmakers fail to pass a spending bill by the midnight deadline it's friday, february 9, 2018. "worldwide exchange" begins right now. good morning a warm welcome to "worldwide exchange." i'm wilfred frost. >> i'm seema mody in for sara

eisen. let's get straight to the market picture. a massive selloff again yesterday. we were down over 4% for the dow. a lot of the selling coming late in the day as we have seen through some of these days of volatility and selling, we are now down 6.5% week to date before today for the dow. that following a 4% fall last week the falls week to date for the other two indices, about 6.5%. the dow and the s&p are in correction territory, which means a pullback from the highs of 10% or more the nasdaq 100 also in correction territory the nadz dsdaq come podposite d% this morning we are expecting to bounce back higher by more than 1% on all of those indices the dow higher by 1.2% the nasdaq higher by 0.9%.

ten-year treasury note, rising interest rates la behas been a g reason for this selling. the high yesterday was shus sjuy of 2.9%. 2.842 is the number. >> it's been a volatile week for global investors the selloff has been pronounced in asia which did end the week lower, lower by 2.3% for japan, hang seng lower by 3%, shanghai down 4%. all of these markets trading in correction territory, so they are trading down 10% from the all-time high. the south korean kospi down 1.8% on friday. for the week down 6% look at early trade in europe, we are seeing mild losses. dax down about 0.4%. keep in mind this comes after losing 300 points in yesterday's trade for the dax.

the italian mib yesterday was down 500 points. in spain, stock there's are down 0.7% the ftse 100 down about a half percent. we got uk construction suffering its longest contraction since 2012 the fact that we are not seeing a bigger selloff in europe, a bit encouraging this morning. it was down less than the u.s. yesterday, therefore it's not playing catchup to the down side as much as we could have expected let's discuss this selloff more with mike santoli live at the nasdaq good morning to you. yesterday a lot of selling picking up pace throughout the course of the afternoon. yields a factor as well. what was your take on yesterday afternoon? >> many people expected that we would need to see some kind of a new visit to those lows that we set earlier in the week. it's a standard wall street

tactical view that you have to retest if i get a reversal to see if that low will hold and see if fundamental demand does show up. i thought the tenor of the trading yesterday afternoon was relatively indiscriminate. you saw lots of aggressive almost systematic trading going into it to the down side that, as a take away is a positive you wasment thnt that sentimentt there's nowhere to run or hide if you want the attitude for a proper low all we've done is undone the two-month rally from thanksgiving through late january. that clearly was an overshoot to the upside now it's is this bull market broken or bent i think we're in the zone of a good trading low but that doesn't mean it's a race back to the highs >> i had a fascinating conversation with the head of

equity trading yesterday afternoon. i was surprised by his level of bearishness. there are two main takeaways one is that 80% of trading now is programmed in some way, the second one is that if we stay below the recent highs for a week or two weeks, the amount of supply that will come on of equity selling is so great that we will continue to fall and pick up pace the confidence that this head of equities had that we have now seen the market highs for the next year or two was higher than 50%. it was a relatively bearish conversation what's your take on those factors? >> i would say the idea that the highs of january 26th are the highs for one or two years is not a consensus call that leans towards the skeptical side of things the fact that 80% of all volume is systematic or algorithmic in execution is not surprising to me

we've seen the finger prints of that for a long time, not just in this little unwind. i think that idea that the market has to show itself to be in an uptrend to keep people participating and willing to hold at these levels is rel van. i do think that it shows the psychology of this market, whether it's a human trader or a machine learning trading algorithm. in 2017 when you almost had a half percent loss, what does that condition you to do that conditions you to think the tape is unvulnerable to down side so this has shattered that idea. i think it has to show itself in fundamental demand of people saying we think the market is cheaper, we're worried about evaluations, nothing economic is being indicated necessarily in a bad way by this selloff. credit markets are not really

disturbed too bad. you have to have that process of people deciding if, in fact, real money wants to be involved at this level as opposed to people riding the momentum to the upside which it now seems january was all about. >> stick around. let's bring in art hogan art, good morning to you i want your thoughts on the rsee in volatility. last time we had this sort of volatility, it took 55 days to go below 10, does this tell us the triple digit moving to the upside and down side is the new normal >> the level of volatility in 2018 will be significantly higher than 2017 that's an easy statement to make because we had very little volatility in 2017 we need to watch how much of this is trapped short vol position is unwound.

the market itself had a 50% or 60% average daily volume on a significant down day that's important a lot of what happened what happened in the last half hour that was technical the volumes in some of those instruments that were that crowded trade were incredible yesterday. that might represent that trapped short vol trade getting unwound. that's important to move beyond that 679 that i think volatility is now the norm, not the exception. earnings are growing something like 18% in 2018, that's significant and that's going to increase volatility the most important thing i think, indiscriminate selling yesterday is causing a great deal of disruption in the market, meaning that if we're concerned about rising interest rates, why would financialal ase

the worst performing sector? they have the spreads between the 2 and 10 widening out, a light regulatory touch, so certainly you wouldn't think they would be the worst performing sector. it plays into the comments of just indiscriminate selling. >> and rising volatility is a good thing for the investment banks. when we consider the level of money that is coming out of equities just this week, u.s. indices down 6%, european indices down 4%. asian indices down, 8%, 9% this week, why are we not seeing people going into assets or gold why isn't it going into other asset classes? >> it's a fascinating dynamic. we have not seen the normal playbook ofrisk off really get involved right here. i think there's a couple reasons. one, it has been the equity market responding to itself. responding to its own excesses

to the upside in january, unwinding a lot of these strategies that are referred to there, which would be an accelerant on the selling. i don't think the cause of why we're down at these levels i also think in previous market selloffs, the overriding fear in the background was, okay, now we're in a deflationary bust type scenario again. we'll have to worry about that world of extremely low interest rates, and weak growth and we'll have certain economies teeterins recession. treasury yields really have not come back much off the highs it's a bit of a different set of worries. you can grab some reassurance out of that fact, because it would tell you the stock market being down 10% is not saying now we have radically increased odds of a recession any time soon it's much more about an unwind

of enthusiasm for what earnings can be and what multiple we'll pay for those this year and next >> the dow implied open today of 218 points what are you advising clients to do with their money? >> not to panic. that's been clear throughout the cycle here second thing is, it's a great opportunity to make shire the asset allocation mix is where you thought it was at the beginning of the year or the beginning of last year also take a hard look at the disruptions that have happened this market has gone down uniformly across the board, higher interest rates don't adversely affect everybody in an equal way. this will be a period of time where active management and stock picking is going to win out. this is the time it happens. >> art, thank you very much for that insight mike santoli, also thank you very much. following breaking news out of the nation'scapitol, the

u.s. government officially shutting down after failing to reach an agreement before the midnight deadline. tracie potts has more. >> rarely do we see something coming literally down to the weir and ov wire and over the wire like last night. debate is going on right now early this morning these lawmakers have been here all night long a last-minute vote to try to reopen the federal government before people have to show up to work in the next few hours it shut down at midnight after the house and senate failed to come to an agreement on spending and immigration, which is not in this deal at all eventually the senate did come up with another short-term plan, a six-week budget with plans to increase spending over the next two years. the next two budget cycles, plus they agreed to deal with immigration at a time set, starting monday afternoon. now it's up to the house to sign

off on that and sen d it to the president's desk there are a lot of people in the house concerned about the price tag including nancy pelosi who has said this morning she doesn't want to vote for this budget because there is no commitment on her side to deal with immigration like we've seen in the senate. still unknown whether this will pass a lot of federal workers wondering whether or not they have to show up for work today we're expecting that vote to happen within the hour >> tracie potts, thank you very much we were looking at live pictures of the house, we will bring the vote live as and when it does begin to happen, which could well be during "worldwide exchange." we are just getting started. up next, the selloff spills overseas asia and europe deep in the red. full team coverage from around the world. and as we head to break, another check on u.s. futures. dow indicating a higher open, but still early in the day

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breaking news. the house has begun to vote on a spending bill that would end the shutdown that began at midnight. it's a vote we expect to take about 15 minutes we'll bring you the result as soon as we have it the senate has passed the spending bill. the wall street selloff is spilling overseas. we have full team coverage of this global market meldown

sri jegarajah is standing by in london first let's start in asia with nancy hungerford nancy, good to see you >> hi, seem a. not a happy friday for investors in asia. firm arrows to the down side let's show you some underperformers. the shanghai composite finishing lower by 4%. the nikkei 225, a lot of focus on this one throughout the week. lower by 2.3%. it was off the lows of the session but broad selling here let's look at the hang seng. you'll notice the steep drop as we got closer to the end of the week overall this was a 10% move to the down side. this index is in correction territory and negative for the year up until today hong kong was a hold out clinging into positive territory. it was also the worst week for the hong kong market since the financial crisis of 2008

the shanghai composite had its worst weekly fall since january of 2016. a closer look at the nikkei 225. we had the shanghai composite, the nikkei also in correction. on a weekly basis losses of almost 9%. that was the worst week for the bench mark index in two years. so investors not seeing a reason to buy going into the week the lunarny ye new year holidays next week as well. back to you. >> thank you very much let's get the latest on the selloff in europe. sri jegarajah joins us from london good morning >> it's interesting, nancy talked about the extent of declines in asia which were admittedly sharp but interestingly enough we're not seeing the same kind of quantum of losses in european markets. yes, they're down but the damage report is not initially as bad

as expected. the scope of the losses is not that pronounced. the dax and ftse down by roughly 40 points. this does point to resilience in the earnings numbers and underlying economic back drop as well back here in europe we have been seeing something of a renaissance in european equities i will say that it's probably getting some help sentiment-wise from the fact that u.s. futures, your side of the world are pointing higher, are suggesting a rebound. it's still relatively early days in terms of the session. we're about midway through the morning session. this picture could very well change given the fact that intrasession volatility is back and back with a vengeance. but so far so good a degree of composure in some of these european markets as we head over to the weekend let's see what next week brings us the backdrop looks better as well given the fact that over the course of this week, we saw

progress in terms of a deal between the spd and the german coalition talks, and the other factor here is that we have to keep an eye on the italian elections which are looming closer potentially another source of risk for these european markets. so far so good degree of composure as we round off the week >> sri, thank you very much for that so far so does not quite the all-encompassing phrase for the week, but i understand what he means. >> with the dow up 200 points in the premarket. coming up, how to keep your money safe during these wild market swings. and later we're headed back to capitol hill. house members holding a vote that would end the government shutdown that began at midnight. lots more to come.

no matter how the markets change... at t. rowe price... our disciplined approach remains. global markets may be uncertain... but you can feel confident in our investment experience around the world. call us or your advisor... t. rowe price. invest with confidence. welcome back to "worldwide exchange." let's get you up to speed on the market action. it was a big day on wall street with the dow losing over 1,000 points yesterday here on friday setting up for a positive open with the dow up 255 points in premarket. nasdaq higher by 51. s&p 500 is up 30 let's look at the stories in currencies the weaker story has been the broader story, affirming against

the euro and yen 1.22 against the euro and 109.10 against the yen. >> joining us now is david woo from bank of america merrill lynch. thanks for joining us. i guess let's start with the rates story. clearly a spark for some equity investors as rates have risen in the u.s., people have decided to sell off equities. we crossed up to 2.88, 2.89 yesterday in terms of the ten-year what's your expectation of where that goes from here? have we broken through new levels that the yield will rise well beyond that i called this optimism selloff to the extent higher rates right now is a delayed reaction to tax reform having been passed. investors started to realize this will be much more bullish for growth outlook, this will

lead to a high potent initial growth rate. this is why i call this an optimism selloff not about monetary tightening. this is the reason why the dollar has been strengthening based in the last couple of sessions >> this is important to go into that point versus the financial crisis as we learned from reporters around the world that the percentage selloff in equities is the biggest since weeks back. you don't think it's comparative in that sense. >> not at all. previously in the low interest rateregime, people piled into stocks, credit indisrim naturalna indecembinde indiscriminately because of lower yields this is about basically finally the fixed income market coming to realize with the president's approval rating going up, with economic growth actually improving that things will be

better, and if things are better you're seeing a one-time reconfiguration, we pricing of all risky assets this has been an orderly selloff. this is why i think this is an optimistic tone behind what's going on >> how much higher does the ten-year yield rise from here? it's above 2.8 >> obviously in the short-term a lot is riding on how much higher rates can the stock market live with without the stock market going down further the stock market will tell us when the rates market is ready to take it to a next level i think deficits will be surprising to the upside i think three plus treasury yields is realistic, also we should be seeing higher real yields as opposed to inflation break evens. that's really the big story.

>> wick point quick point on the dollar, is this a meaningful turning point or a temporary pause in the decline >> we are having a bullish dollar call here i'm saying, you know what? rates are heading higher, u.s. will do better than other countries. that's dollar positive i think a lot of massive inflows to the u.s. equity fund was because of millennials piling to the stock market every one dollar goes into the stock market, 20 cents finds its way into equities. i think the equity market has taken out the bubble in that flow, that's bullish for the dollar as well >> david, thank you very much for joining us >> still ahead, we're keeping an eye on u.s. equity futures after yesterday's massive selloff.

we are pointing higher by 1.1% on the dow we'll dive into that market picture coming up. >> and shutdown showdown the government officially shutting down overnight. the house is voting on a spending bill now. a live report from our nation's capitol when we come back. for your heart... your joints... or your digestion... so why wouldn't you take something for the most important part of you... your brain. with an ingredient originally found in jellyfish,

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u.s. futures clawing back after the dow plunged more than 1,000 points yesterday the index is on pace to see its

worst week since the financial crisis. can congress get its act together the u.s. government officially shutting down at midnight, but the house is voting on a bill as we speak it's friday, february 9, 2018, "worldwide exchange" begins right now. ♪ ♪ good morning, a warm welcome to "worldwide exchange" on cnbc. i'm wilfred frost. >> i'm seema mody in for sara eisen. straight to the markets we go. it has been a big week for wall street with the dow losing over 1,000 points yesterday in premarket we are up 269 points in premarket trade, but still early in the day the s&p 500 indicating a higher open by 1.2%, the nasdaq higher by nearly 1% in the premarket. the ten-year has been a big part of the market selloff.

right now 2.85% on the ten-year. that's a four year high for the yield on the ten-year. >> a bit more positive picture this morning but we cannot underplay the selloff yesterday, down 6.5% week to date for the dow after a 4% decline last week and asian stocks down 9% for the week, european stocks down 4% for the week kayla tausche is in wag with the la washington with the latest on the shutdown, we will get to her as soon as a decision comes in. let's go back to mike santoli. let's recap the massive intraday selloff we saw yesterday the way the market seems to pick up pace on down days and the selling proliferates what was your take on yesterday afternoon and what continues to drive the reasons behind the

equity selloff >> i think in the middle of the week, we had a bunch of unconvincing bounces in the market off of the lows, there was not this clarity that those selling waves we saw monday into tuesday were truly exhausted yesterday afternoon there was a capitulation that says we have to get back down to the lows on a trading basis we saw monday and tuesday and see if they hold i think the selling, the nature of it, the rhythm of it was very aggressive, and really indiscriminate it was throwing out babies with bath water, that's the way it happens in the sharp short-term moves. now the question is have we sold enough are we back to a level where fundamental investors might get interested again are stocks oversold enough a lot of folks are saying here or within a couple percentage points here should be a place where the market can make a trading stand. but the question is where does that leave us? somewhere along the two-year trend of where the markets were

goi going. in november and december we overshot that trend and now we've undone the rally we've had since starting in thanksgiving so do we have people willing to own stocks in an aggressive way at these levels. >> the earnings picture we're seeing, 80% of the companies have beat on sales, by mar the highest record since 2006. how do you make sense of a strong earnings picture and at the same time stocks are semin e board. >> you have piesed in good earniear priced in good earnings news. we have people saying an

earnings downturn coming, i don't think it's that message yet, it's that too many people got too long too quickly and it's a pretty long unwind. breaking news in washington. the votes are in in the house. kayla tausche has the results. >> we have just learned that republicans do have the votes to pass the government funding bill to keep the government funded for the next six weeks while they hash out the details of a broader budget plan and this two-year deal to raise spending levels in washington the house vote, which nbc news is reporting comes 240 yeas to 186 nays, about a dodzen dozenn forgave thefavo that tipped this vote. this is two hours after the

self-imposed midnight deadline to fund the government the government went into a shutdown because of a stall tactic because of kentucky senator rand paul who was aggrieved by the spending levels in the bill and he wanted to keep the senate from being able to move forward expeditiously last night, spending about 90 minutes on the floor in a peach where he talked about how republicans were hypocritical because they criticized deficits under the obama administration and now we're doing the same thing. he said the spending levels in this bill are part and parcel why the market has been in turmoil. >> you wonder why the stock market is jittery? one of the reasons is we do not have the capacity to continue to fund a government like this. we've been funding it with phony interest rates that are concocted and given to us by the federal reserve but they are not real >> the white house did anticipate that perhaps this

could drag out into the wee hours of the morning the federal government government opens around 8:00 a.m., last night the office of management and budget was telling people that they were preparing for a lapse in appropriations, but as we stated earlier today, we support the bipartisan budget act and urge congress to send it to the president's december 1sk withouy still unclear when this will become official and whether there will be a delay in the start time for the government this morning given how long this process has dragged out. >> just back to what you said at the top. this is a six-week coverage for the budget, not the original intended two years >> because the deal is so complex, they need more time to actually put some meat on the bones. they have reached this agreement. it's expected over the course of the next six weeks there won't be surprises there won't be wrenches thrown into the mix to throw this off course because this deal la been

agreed and has been passed by both houses. it's just a matter of fleshing it out, if you will. and they need some time to do that yes, it is a six-week funding bill, but it does carry an amendment that has an agreement in place with the broader principles that were announced earlier this week. >> kayla, thank you very much. let's bring in our guest good morning to you, jimmy i guess over the last couple of weeks we've made progress but are also reminded of the divided nature not just between the republicans and democrats but also within the republican party, particularly when it comes to fiscal conservatives. >> republicans, as rand paul said in that video, republicans are transforming and not everyone is comfortable with this transformation of a party that focused a lot on debt and deficits to one where that's not

a huge priority. when you look at this bill, the number thrown around with this bill is that it will increas spending by 3$300 billion that's not really true what this bill will do is increase spending by about $2 trillion over the next ten years. when you add it to the 1.5 trillion from the tax cut, the republicans have really agreed to a $3 trillion spending increase over the next decade. so they are thinking about debt and deficits differently >> now that we have the house budget passed, where do you see washington turning their attention? is it infrastructure a second phase of tax reform which has been rumored to be part of the discussion as well >> yeah. the infrastructure infrastructure is always like the next thing they'll turn to never quite getting to it. i would think on the tax issue there are plenty of republicans who want to make democrats take

a very difficult vote on taxes by voting to extend permanently the temporary income tax cuts which republicans passed the temporary cuts, they want to make them permanent. democrats have been against the tax cuts to make democrats vote against making the individual tax cuts permanent that would be a tough vote again, that's more money added to the debt and deficit. so i think my one safe forecast for the year is that nothing will be done that will reduce spending and deficits over the coming years >> james, just quickly, clearly president trump claimed credit for the stock market rise when it was rising. did voters care about that then and are they likely to care now that the market is pulling back significantly? >> i suppose this is a temporary tullback if this is a beginning of a

longer period of stag anything that in t stagnation, yeah, people will care this was the one bright statistic that the president could point to to show his methods were turning around the econom economy. >> i'm not sure it's the one statistic, other economic statistics have been encouraging. >> gdp growth is slightly faster, job growth slower, wage growth slower. the big drop in the unemployment rate, but that's also numbers that the president in the past called a phony number. >> james, thank you very much. >> you bet back to the markets now. >> with the dow up 284 points, nasdaq higher by 60 points in premarket trade, joining us is steve grasso, a "fast money" trader stocks can fall fast and bounce back hard. we learned that lesson this

week is that what you expect in today's trade? >> you know what's troublesome is yesterday i felt confident with the directionality of the market when we were drifting higher, it felt like the legs were taken out from under it once again no one knew what to point to you you can scramble, say it's about debt and deficits, i think it's about that risk coming off the table and it's selling where no one that ahas any idea where coming from. it's almost robotic when markets get to a certain level, these funds have to de-risk. >> steve, in terms of the sparks that we always go back to in terms of what the causes are, yields are focused, we did see yields pick up again yesterday and markets decline. are you still watching that level, the level of the ten-year as one main way to decide if

we'll have a good day or bad day? >> yields are always a focal point. but, you know, a couple days ago we did hear from fed governor evans and saying he didn't think inflation was as big a problem as people thought. jay powell, our new fed chair said that the tax cuts should not be as inflationary as he once thought soi do think you're seeing sor of a walking back and a more dovish stance on the fed to walk those levels back. the rates are rising around that so i would think that if you're an investor you maybe, if you want to scale into this market longer term, don't try to pick the bottom but the selling is concerning still. >> just to work off what you said, should investors treat yesterday's selloff as a good buying opportunity or is it too early to do that >> i think if you're longer term, you have to know who

basically you're trying to cater to is it your kids money? your money if you're a longer term or shorter term investor. if you're shorter term these markets will get to lower levels, maybe 1%, 2% to the down side and then rally and bounce if you're a longer term player it doesn't matter if you're picking 1% or 2%, you're looking for the long game, you're looking for 30%, 40% >> steve grasso, thank you still ahead on "worldwide exchange," u.s. futures are rebounding after yesterday's big selloff, but what will market volatility rule on what the global market selloff could mean for your market stay tuned, you're watching "worldwide exchange" on cnbc

welcome back to "worldwide exchange." breaking news from washington. the house passing a budget deal minutes ago. the democrats waited until after most republicans had cast their votes to cast their own. the final count 240-186. the senate passed its bill earlier this morning the bill will head to the president's desk for signature which will reopen the government let's look at futures at this hour we saw the dow up 265 points over a percent higher.

the nasdaq up 53 points. the s&p up 31 points yesterday the dow was down more than 4%. week to date, the dow down 6.5%, following a 4% decline last week markets around the world, europe down about 4% for the week asia down 8% or 9% joining us now is tim seymour from triogem asset management. thanks for joining us. are you of the view that this selloff is just getting started or have we now, with the rize in futures we're seeing this morning got a reason to think we're drawing a line under it? >> let's face it we have a tremendous pull back you went from very overbought conditions to veryover so overs conditions 23 to 24 on a nine-day rsi which is a measure of momentum tells you that the s&p has not been this oversold since the election flurry in 2016

ultimately what concerns me is when people try to oversimplify this to a six issvix issue to h levered funds, short vol trades. people short vol for a reason. part of that was related to the central bank put and where we were with interest rates and that which was skel muching squa lot of volatility. the reaction is appropriate to the overbought levels, but to say the dust will settle and it will be business as usual. there will be elevated volatility levels, not 35, but we remain in 2018 with higher risk and higher volatility more central banks equals more volatility >> we are down across the board in oil, wti and brent. is that in response to a

stronger dollar? >> that's important. we have had a quiet move in the dollar, and you could make the argument brent has been relatively resilient at a time when we started to see rig counts tick up there's been a little more pressure building on the u.s. fly side in the last round of earnings, the capex a pd spend spending rn conservative i don't know we'll get that far over our skis again, but tie it back to global demand and fu fundament fundamentals, i think oil has performed where it should. technically you have to watch oil here, but i don't think brent has overreacted here >> are you buying anything today? if so, what? >> as i look globally, stocks in asia are the most oversold

again, some of these moves have been symmetric so the biggest moves ha s havs off the highs of the building point. i look at the asia tech stories, but i think they've been beaten up, a name like alibaba which we had data there, and i think the global story is very much intact for me emerging markets are the most oversold asset class. they were the most overbought on the way up these are place anybos people n. i don't think you need to do a lot today. the next couple days will be days where we settle out >> tim, thank you very much for joining us tim seymour. futures are higher this morning by 1%. still ahead, the fed factor.

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welcome back to "worldwide exchange." futures are higher despite big falls in asia, small falls in europe these gains today of just over 1% or so or 250 points for the dow come after a massive selloff yesterday, down 4% for the dow, week to date the dow is down 6.5% of the selloff, according to s&p global markets have lost 2 $5.2 trillion in value over the last two weeks the marketmeltdown will be the first big test for jerome powell drew, good morning to you. what a week for the new fed chair. how do you see him responding not only to market volatility

but the rise in yields >> i think the market will welcome the rise in yields for them it's a matter of how fast they move up. in terms of equity volatility, they're probably looking at earnings growth and revenue growth have been good. is the market reflecting the fundamentals of the companies or just fear? if it is just fear what is that fear based on? people got it in their head there could be inflation they finally realize there could be inflation from the fed's perspective -- >> we saw the jobs report, 2.9% rise in average hourly earnings, and people saying inflation is back is it really >> that's not the evidence that inflation is back. when it comes, it will come gradually. i expect you'll see more of it this year. we're not thinking about the 1970s again. people are responding as if the fed will have to slam on the brakes because the 70s will repeat themselves. it's not the most likely outcome. >> it sounds like you're

relatively positive at the moment in terms of the fact that this selloff may be over done. what are you telling investors to do, where they should deploy money? >> the things you want to look for, i actually think that the main driver of everything going forward, if you give me one stat to look at to see where everything is going, it's productivity that will tell you whether or not companies can make more money but also tell you whether there has to be more inflation in the economy when you look at how productivity has been behaving as growth picked up, it seems like you'll see this pick up in productivity which means you can have higher growth, higher wages for consumers, you don't have to have the inflation component, which means the fed can keep this steady pace going >> so far productivity has to be weak, i'm afraid we have to pause there. that's it for "worldwide

exchange." we are pointing higher this morning, over 1%, 260 points on the dow, following a msiasve slide yesterday down 4% for the dow. "squawk box" comes up next over 80 years. ay cor call us or your advisor. t. rowe price. invest with confidence.

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u.s. futures are clawing back after the dow again plunged more than 1,000 points yesterday. now in correction territory. the index on pace now to see its worst week since the heart of the financial crisis breaking overnight, the government shutdown after lawmakers fail to pass a spending bill by the midnight deadline, but congress just passed a funding bill in the last half hour the shortest shutdown in history, you were probably

history. we are live in pebble beach at the at&t pro am bringing you interviews with heavy hitters. it's friday february 9th, is it olympics day ♪ oh, don't whistle. "squawk box" begins right now. ♪ >> good morning. welcome to "squawk box" on cnbc. we are live from the at&t pro am at pebble beach. i'm becky quick along with joe kernen, andrew is off today. our guest host is market strategist and portfolio manager at pimco tony, thanks for joining us. picked a good day to be here a lot going on >> he knows a lot about bonds. >> a few things. >> which may be part of the problem we've seen about stocks. we'll talk about the risin