a friday rally dow futures are up triple dij jat digits a corruption rackdown. chinese regulators seize control of one of china's biggest insurance groups. and rbs shares are down big despite the bank doing something it has not done in a decade. we'll tell you what that is in a few moments time it's friday, february 23, 2018 "worldwide exchange" begins now.

♪ good morning a very warm welcome to "worldwide exchange" on cnbc i'm wilfred frost. let's check in on the global market picture and futures this morning are looking at a positive open. we are higher in the premarket coming off a day where we did see gains for the dow and the s&p. but we closed well off the day's highs, both indices coming into today down about 1% week to date yesterday the nasdaq was lower fourth negative session in a row. but only slightly lower. such that week to date it's down just 0.4%. today, as you can see, up significantly. the dow is up 187 points s&p up 16. nasdaq up 45 points. coming into today all 11 sectors of the s&p are lower consumer staple is the worst performer, down 3% we saw yields rise at the start of the week and pull back, but today ten-year above 2.9%.

we spiked at the start of the week and just have come back a bit. asian equities, it's been a negative week overall, just seeing a bounce today. up about half a percent or so for shanghai but hong kong and japan up close to 1%. yif european trade for you, the french index higher, german index flat kind of a mixed session today and a mixed session for the week in european trade. italy up a third of a percent. checking in on the broader markets, oil prices up 2% for the week still off that $6$65 high we sa last week. $62.50 this morning for wti. the dollar board for you, we saw it break a three-day winning streak yesterday it was down a third of a percent, still up 0.8% for the

week coming into today not too much happening this morning. a bit of strength in the dollar against the euro and yen flat against the pound gold prices to round things off, down 1.8% for the week coming into today, given that strong dollar that we've seen for most of the course of this week today 1329 joining me now is the fx strategist from int. the dollar, third positive week in four for the u.s. dollar. that has people talking about whether we're at a turning point and if we'll rally from here what are your views? >> we think it's more of a consolidation. it's licking its wounds after dismal start to the year when it comes to the fed story, it's hard to see the fed being a long-term driver for the dollar going forward. if you believe that the fed funds rate is at 2.5%, 3%,

markets are pricing this in. it's hard now for the fed to be a big driver for the dollar. the dollar's focus is much more on structural things this is a multi-year trend it won't happen every day, every week but certainly the direction of travel forev the dollar is on a downward trajectory. does it come down to secretary mnuchin saying things like a weaker dollar is a better dollar, even if he backtracked on that? >> certainly that was one of the catalysts at the start of the year. it's hard for washington to put that weak dollar genie back in the bottle the cat is out of the bag there. that's fueling a structural adjustment in the dollar we think there's about 5% left in this sort of decline. it's a question of whether its orderly or disorderly. that's a function of maybe u.s. trade policy >> you mentioned you don't think the fed's interest rates will move the dollar either way, because it's priced in

the longer end of the curve responded much more this year than last year is that something that can support the dollar once we reach high yields, but whilst we see it rise itself it's negative for the dollar >> we looked at it last week. we are defining a regime change for the dollar in a sense that rising u.s. treasury yield no longer has to be a positive for the dollar we've seen the decoupling at the long end, real rates for dollar/yen and that could potentially exist. we're trying to figure out whether this rally in yields is a good rally in yields or a bad rally. if it's a bad rally in yields, then that's dollar negative. there's something else about this we can't live off that assumption that higher u.s. yields equals a stronger dollar anymore. >> touch on expectations for the ecb and bank of japan. i guess i would argue since you said the fed can't influence the dollar anymore, presumably people have priced in different

courses of action from those two central banks. >> certainly the greater propensity is in the ecb and the bank of japan. we think there's room for further adjustment, but for us we are looking at euro/dollar at 1.30, and the path of least resistance is a gradual rally there. it's a question of how not if we get there. the rally may be letting gently the foot off the pedal when it comes to normalization >> thank you very much for joining me this morning. the fed is in focus today, thou at 11:00 a.m. eastern time the fed will release the text of jay powell's testimony on the economy. he will deliver that this coming wednesday. and several fed officials will be speaking at the u.s. monetary forum in new york as for earnings, berkshire hathaway reports after the

opening bell warren buffett will release his annual letter to shareholders this weekend warren buffett will be on "squawk box" on monday you can submit your questions now with #askwarren. the world's biggest asset manager is looking for answers from gunmakers leslie picker has the details of that good morning blackrock getting criticism in recent days for its sizable stakes in the three top gun manufacturers. the firm is the largest donor of ruger, american outdoor and vista outdoor. yesterday blackrock out with a statement defending their ownership telling cnbc index providers responsible for the construction of their indices. as a fiduciary we have a responsibility to replicate the indices our clients choose to invest in. as a result we invest in a

company as long as that company is in the relevant index the firm goes on to say they don't have the ability to sell shares of the company in an index even if they disagree with management but they can focus on engaging with the companies and their impact on society. blackrock says we will be engaging with weapons manufacturers and distributors to understand the response to recent events. we are working with clients who want to exclude from their portfolios weapons manufacturers or other companies that don't align with values. blackrock manages more than 2 0 2 $00 billion in portfolios that carve out certain type of companies, be it tobacco manufacturers, oil companies or gun manufacturers. blackrock manages $6 trillion total. >> thank you very much for that. some stocks to watch, hewlett-packard enterprise reporting better-than-expected first quarter results

benefitting from rising sales and storage of network devices hp plans to hike its dividend by 50%. the stock is up 9% hp inc.'s first quarter profit and revenue beat forecast it sold more pcs and printers. the company is raising its full-year profit outlook rbs posting its first annual profit in a decade in 2017 however the bank posted a fourth quarter loss rbs is still awaiting a decision by the u.s. justice department on a settlement of a mroeb into t probe into a misselling of toxic mortgage securities. on the call the ceo did not give a positive update on that. one reason why shares are down 4.5% that statistic, the first profit in a decade from rbs, a reminder of the way that u.s. banks are so far ahead of the curve compared to many of the european banks in terms of recovering

from the financial crisis. we are just getting started on "worldwide exchange." up next, a big corruption crackdown in china regulators seizing control of an bang overnight it's chairman is in police custody. we're live in china with details. and threat to national security that's what the department of defense is calling unfair steel and umumalin imports we have a full report when "worldwide exchange" returns for your heart... your joints... or your digestion...

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welcome back to "worldwide exchange." i'm wilfred frost live in london let's get you up to speed on the market picture futures called higher at the open almost 200 points or so on the dow. 176. the s&p up 16 points the nasdaq up 43 points. yesterday there were gains for the dow and s&p, but well off the highs. both indices are down 1% coming into today treasuries for you, above 2.9 still on the ten-year. we started -- we closed last friday below that level. we have seen yields rise net over the week. but not the highs we saw tuesday morning. we are now at 2.897. a developing story out of the china. the government seizing control of anbang saying its chairman has been prosecuted for economic crimes joining me is tom hancock from

"the financial times." update us on this breaking story. so the ceo has been arrested what else can you tell us? >> we should say the ex-ceo, because the message that came out of the china insurance regulator early this morning says that he had been removed from his post. according to prosecutors in shanghai he's accused of criming including fund-raising fraud and embezzlement, which could bring a potential life jail sentence it's a significant move by the regulators to actually take control of this company for a year, they say though it will be kept in private hands, the big transactions for the company will be controlled by a government-led working group for the next year. >> remind us of the scale of what anbang insurance does and its size, not just in china but international interests as well.

>> anbang has been one of the companies along with others like hna that have burst on to the global scene through a series of big acquisitions over the last year for anbang -- last couple of years. for anbang, one of their biggest purchases was the iconic new york waldorf astoria hotel, which they paid $2 billion for and they did a deal worth 6$6.5 billion with blackstone group for properties based around the world. they were one of the private companies at the forefront of china's global expansion they have been under pressure for the last year as the chinese government has tried to crack down on capital flight and also risky financing which was a particular problem for anbang. >> tom, of course mr. -- president xi jinping was well known in his first term in

office for cracking down on corruption it took a pause as he rolled into his second term, which is well under way is this a sign that crackdown on corruption will continue mr. wu is very well connected politically or thought to be >> yes well he was formerly married to the grand daughter of one of the most important communist leaders in chinese history, though it seems they have been divorced according to news reports, so he lost some of that political protection the fact that mr. wu was detained last year in the summer, it has taken this long for china to announce he will be prosecuted and faces a possible lifelong jail term, the fact it has taken that long suggests political considerations and bargaining in the decision over whether to prosecute him >> tom, thank you very much for

joining us tom hancock with the "the financial times." the defense department is voicing support for the trump administration's plan to impose national security restrictions on imports of steel and aluminum the commerce department recommended that president trump slap steep tariffs on steel and aluminum jim mattis said he would prefer targeted tariffs still ahead on "worldwide exchange," raising the red flag on the u.s. dollar why the ecb is pointing fingers at president trump and full details ahead of the market expectations. we're pointing higher on the futures market let's get a weather update from bill karins. >> good friday morning to you. heavy rain from techs back to the ohio valley. a flood threat remains the heaviest areas are in arkansas and the dallas ft.

worth area we have a couple of flash flood warnings num raerous river flood warnings another widespread 1 to 3 inches, isolated up to 5 inches. the rain does move out on sunday at least you have one decent day over the weekend rainfall totals between 1 to 3 inches the highest totals north of dallas, towards louisville, south of indianapolis and back up towards pittsburgh. the weekend forecast, still warm in the southeast, rain develops into the northeast during the day. over the weekend the worst of it will be moving out of the areas at yhe deep south. th'sour business travel forecast more "worldwide exchange" when we come back let's begin.

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it's why 7 million investors work with edward jones. welcome back to "worldwide exchange," i'm wilfred frost live in london we are called higher the dow is up 150 points in the premarket. the s&p is up 13 the nasdaq is up 38 points week to date before today, the s&p and dow down 1%. the nasdaq down 0.4% for the week we did have a decent dollar run so far this week we broke a three-day winning streak yesterday, down slightly. but week as a whole, up the better part of a percent for the dollar the third positive week out of four looking at a bit of dollar strength against the euro today and the yen. a bit of weakness against the british pound. stocks to watch, intuit

swinging to a second quarter loss revenue beat forecasts but the maker of turbo tax and other financial software issued weaker than expected guidance for the third quarter. planet fitness reporting a fourth quarter net loss on tax related charges. adjusted profit and revenue beat forecast they expect foul-year sales growth of 20% and earnings growth of 40%. planet fitness up 9.5% wingstop's fourth quarter earnings andrevenues topping earnings, but shares are down as the outlook for 2018 fell short of analyst forecasts let's discuss markets a bit more broadly earlier today we had cpi out of the eurozone, which was at 1.3%. the forecast was for 1.3%. clearly still below the 2% target for the ecb let's discuss. joining me is the chief european economist at barclays. good morning to you, antonio

thanks for joining me. let's touch on that cpi data clearly not particularly strong relative to the target of 2%, but it's not slipping at least >> indeed. that's the most important thing to watch, that and wages the real economy is doing well the uae expansionary process, you saw the pmis this week, a bit of a consolidation, if you look at the forward indicators, they show strength in a country by country basis our gdp is doing well. it's the inflation bit what has the ecb worried. >> let's dive down on to that. i think a lot of investors in the u.s. over the last couple of months have thought, wow, the ecb is going to tighten much faster than we expected because of the strength of some of those

things, gdp growth, pmis, but it has a single mandate, just to focus on inflation your overall take of when we're likely to see quantitative easing removed and the first interest rate hike, this year or much later >> i think keep in mind that the ecb went into negative territory for interest rates negative rates have downside problems for banks and the financial system you don't really need negative rates at this level given how well the economy is doing. we are likely to see the first move pi tby the end of the yearn in september i think qe will be ended. probably by september that will be enough, no need to go into additional months. the first move in negative rates

at the end of the year that doesn't mean this is the beginning of the hiking cycle. the ecb will have to move away from negative rates and begin the hiking cycle, that's for much later. >> of the major european economies, if you had to pick one that could surprise to the upside in the year ahead, which one would you pick >> i think france has potential with the macron government, reform, investment that could deliver some surprises. germany continues to surprised frankly everybody given how advanced the cycle is. that could be a continuation of a surprise, depending on what happens on the spd vote on the 4th of march if i had to pick one, france that has the ingredients with better investment and better growth outlook >> thank you very much for joining me this morning.

still ahead on "worldwide exchange," the top stories and a round up of the global market picture. plus some booze news how the new u.s. tax law is a big boone for the beer business. "worldwide exchange" back in a couple and a perfectly inconspicuous suv. you must become invisible. [hero] i'll take my chances.

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digits as investors look to end the week on a high note. eruption crackdown chinese regulators seize control of one of china's biggest insurer groups. and why beer makers are toasting a new tax law it's friday, february 23, 2018 you're watching "worldwide exchange" on cnbc. ♪ good morning a warm welcome to "worldwide exchange." i'm wilfred frost. let's get to the market picture. global stocks -- well, u.s. stocks enjoying a good friday morning. up about 140 points on the dow s&p is up 12 nasdaq is up 33 points week to date coming into today, down about a percent for the dow and s&p. down about 0.4% for the nasdaq let's look at the ten-year treasury note. yields rose more significantly at the start of the week and

pulled back later in the week. last friday's close was 2.87 we were up 2.9% on the ten-year. just slipped below that level again. 2.897% on the ten-year asian equities a negative week for the whole of asiantrade apart from china, which has played catch up to the upside having been closed all of last week ending on a decent note this friday, up the better part of a percent in asia. european trade is mixed. ftse is low, germany flat, france is higher overall we're looking -- we were flat, we're now negative but not too much down 0.2%. broader markets for you. oil prices up 2% for the week coming into today giving a bit of that up today about a half percent or so 62.5 is the price of wti dollar board for you, which was lower yesterday, but for the week has been positive up 0.8%. today essentially flat

a bit of weakness against the pound. strength against the euro. so this will be the third positive week for the dollar out of four. gold prices given that stronger dollar have suffered, down 1.8% for the week coming into today and adding a fraction to those losses at 1330 the price of gold let's talk more about arkets joining me is jane foley from rabobank thanks for joining us. three weeks out of four we'll have dollar strength is that a change in trend more meaningfully >> i think there's been a couple of different schools of thought with respect to the dollar i think there's been a bit of collision of the sentiments over the last few weeks the first is that u.s. yields are rising that should give the dollar some support. certainly if you think about concerns about interest rate hikes, if you can look at yields, if you look at the fact that we know that the fed is

reducing its balance sheet, there are good reason to be concerned about liquidity. it is our view that the dollar can gain some ground against asian crosses, where there's a lot of dollar denominated debt issuance over the course of the year but there is a scale of thought that says growth is strong, strong in the u.s., strong in japan, asia, china on the back of that there should be decent levels of risk appetite that should promote high yield currencies against the u.s. dollar there's been a collision the market needs to go through this period of reconciliation with respect to the two schools of thought it is our view that if the yields do remain higher, ultimately that should bring some concerns about liquidity and that should support the dollar again, this is a period of transitio transition >> what level of yields would make you consider the dollar no

longer a low-yielding currency, such that that offset of higher yield and currency being attractive would no longer apply? >> i think there is a sort of magic 3% for the ten-year. a lot of people are hanging their has the on that level. if we go above that and sustain above that, that could be a change for many people in the market, their perception about the u.s. dollar, about their perception of what is worthy of the investment, whether or not they want to take a high yield risk i think that's a very interesting level. i think for currency markets there's more focus on two-years. what's been interesting, if we look through the course of 2017 and look at some interest rate spreads, particularly the markets i look at, over the last year you've seen little correlation between yields and currencies there's excuses for that

you can say there's political change in the u.s., the market is adjusting to that at the same time there's in flow back into the euro after all, it has a current account surplus, and the market was encouraged by this political back drop. there's some reasons why we can account for that if we look at the charts, the two-year yield spreads over currencies long-term, we do see there is generally some snap back, that there is a vague correlation. therefore higher yields for the treasuries should ultimately bring some support back into the u.s. dollar. >> jane, what's your view on sterling clearly it's had a great rally from the post brexit lows, even though very little has been sorted on the brexit deal. is that rally overdone >> i do think sterling is vulnerable it's had another good day. that aside, if we step back and

look at it over the last few months, what do we see through december we had sterling rallying in anticipation that the deal would be done, on the legacy issues. we got some sort of deal really that was fudged with respect to ireland, and the irish border in particular but we had a deal. the market was encouraged by that i think that encouraged this perception that we would move on and have a trade deal at the end of the transition period over the last few weeks there's been a realization that the two negotiating bodies are wide apart in terms of what they want from the deals that realization has been weighing on sterling in recent weeks. i think it canweigh on sterlin more if we get closer to that march 19th brexit start date and we still are very confused about what sort of deal that there is likely to be i think sterling is vulnerable to the political issues. of course the bank has been

hawkish. the market is anticipating on the back of that that there will be a may interest rate hike. that should be sterling supported. but that's mostly priced in. there can be a little more gain for sterling on the back of that alone. politics will be an interesting focus for the pound. i think it could be negative >> jane, thank you very much for joining me this morning. jane foley of rabobank th manager is looking for answers from gun manufacturers after last week's shooting leslie picker has that from. >> blackrock is the top owner in ruger and american outdoor and vista outdoor.

the firm says in a statement that they put out yesterday that we will be engaging with weapons manufacturers and distributors to undertheir response to recent events we are working with clients who want to exclude from their portfolios weapons manufacturers or other companies that don't align with values. take florida state's board of administration which manages the state's pension. the fund owns almost $3 million in gun stocks but says about two-thirds of those positions stem from investments in the russell 2000, which holds stocks of gunmakers so if they wanted to, blackrock could customize a product for them the russell 1997 says excluding the three gun stocks >> this is fascinating clearly as you say, a simple tracker etf can't cherry pick which stocks it does and doesn't want to hold, but what about

shareholder votes. you have activist managers, then you have active managers, all of whom each time there's a shareholder vote will consider what's on the table and vote accordingly. do the holders of these big etfs engage when these things come around or is that something on the gunmaker's side here, because usually there's no engagement >> that's the interesting thing and activists complain about this frequently, the fact that blackrock, vanguard, state street, these three institutions have such a disproportionate size of ownership of almost every company out there in the u.s. when you do have an activist situation, they tend to vote as -- they can vote as one block. they ten to listen to proxy advisory firms that's going down a different rabbit hole. but they don't have as much of an active look at some of the major issues when it comes to voting as some of the activists would like that's a frequent complaint we

hear that said, a lot of these institutions are beefing up their corporate governance to try and have the staffing to take a closer look at these things as they arise >> clearly this issue in the short-term is big, at the forefront of everyone's minds as you can imagine. but there's lots of other issues for all sorts of stocks that regularly come up. if a blackrock starts to move in the direction of engaging fully on this, surely it will have to totally transform its etf business and engame e engage on every other issue or they don't know where to draw the line. >> exactly and etfs are not expensive to beef up the corporate governance team and actively engage with management that costs monument you have to hire people, fly all over the country to meet with management. it does not make sense with regard to their business model, but it's an unforeseen

consequences in this rise of passive investing that a large portion of ownership in this company are held by institutions which are not as engaging with management as other shareholders wish they were >> leslie picker, thank you very much the national rifle association is feeling backlash from the business world. the first national bank of omaha says it is not renewing a contract with the gun group for nra branded visa cards customer feedback has caused us to review our relationship with the nra. and enterprise holdings is ending its partnership with the nra. they formerly gave nra member discounts. enterprise says the program will end next month the florida panthers held an emotional pregame ceremony last night for the victims of the deadly school shooting the nhl team plays its games ten miles from the town of parkland. the ceremony featured a moment of silence, video, and 17

spotlights on the ice rink for each victim's name the panthers goalie who lives in parkland also spoke calling for those in power to take action against gun violence switching focus back to the markets, we're following a developing story out of china. the government seizing control of anbang overnight and prosecuting its chairman for economic crimes. anbang gained international recognition in 2014 with the $2 billion purchase of the waldorf astoria. coming up on "worldwide exchange," bitcoin's disappointing week we're diving in on the cryptocurrency 5:sun after the break. first, why beer makers are saying cheers to the new u.s. tax law. landon has all the details for that coming up >> it is 5:00 somewhere, and the

tax code has brewers choosing a bit more beer these days all that coming up

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and actually improves memory. the secret is an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory. prevagen. the name to remember. welcome back to "worldwide exchange." let's get you up to speed on the market action. we're pointing higher but we have slipped a bit the dow will open higher by 123 points the s&p higher by 10 points.

the nasdaq up by 32. bitcoin prices for you it's been a volatile start to the year as we well know in december we were up above 17,000 the low early february was below 7,000. right now around the 10,000 mark for the week, bitcoin is down nearly 4%. so what's next for the cryptocurrency joining me is arjun kharpal. the volatility to start the year we had the low two, three weeks ago but recovered a bit since then >> it was a violent selloff at the start of the year. there was concern about the increasing regulation from countries, and rumors in the market that certain coins are being used to manipulate the market so overall a lot of worry about the space. that triggered the selloff we have come back. it's been trading sideways at the moment people are still cautious because people definitely got hurt in that selloff

so there is caution in the market people are wondering what happens next with regulation china has clamped down hard. south korea introduced new regulation uk lawmakers are doing an inquiry into what the dangers of bitcoin are. the bank of england warning against it >> we focus on the price of bitcoin specifically in terms of the gem treneral trf 2018 versus 2017 of bitcoin selling off significantly, is that true of all cryptocurrencies or have others made gains >> so far it seems to be quite a big selloff across the board but what you're starting to see now is the coins beginning to trade independently. so ethereum not going down as much as bitcoin. sometimes sort of up in that sense. some of these coins are decoupling from each other and people are understanding the

nuances from the different digital coins out there and different technologies that back those. i think you'll see more education around the space, what's happening and also regulators trying to crack down on theed about beha ed aboubad markets. >> and you're heading off to the world phone conference >> what we're seeing is not a huge change in form factor, but for samamsung, the new 9 is a market but they have a lot of users that are on older devices, that are two, three, four years older, so they need to upgrade those people people are holding their phones longer that's a difficult trend to deal with. >> expected price point? >> in the same region, perhaps a

touch less, but trends of high-end ultra premium smartphones becoming more expensive and consumers will be willing to pay >> arjun, thank you very much. arjun kharpal. switching focus, the new u.s. tax law is giving the beer industry a buzz. landon dowdy joins us with more on that. landon, it might be early there, but it's nearly lunch time here. take it away >> so you need a beer. don't worry, i'll make sure we bring you back one i'm here at a brewery, and they have raised their glass these days thanks to a new provision in the tax code which provides two years of federal tax relief for brewers. so brewers pay an excise tax on each barrel of beer that they sell under the new bill, the tax is reduced to $3.50 a barrel, down

from $7 for the first 60,000 barrels. that's a big boost for brewers like half full here who produce less than 2 million barrels a year for all other brewers and importers, the tax drops from $18 to $16 on the first 1 million barrels. so this could add up to about 3$320 million in annual economi growth for the beer industry talk about some extra beer money there. >> i think we'll see the creation of jobs i think we'll see a spur in innovation, in beers of all kinds. 2.2 million americans owe their livelihoods in one way or another to the production, distribution and sale of beer. we think this tax relief will spur that further. >> and it's not just the beer industry that is set to see a huge relief, also wine and spirits. and the beer, wine and spirits

industry are set to see a savings of 4$4.2 billion in the next two years back over to you >> it is something to cheers to you about. i would like to see you take a sip of that. if i had a beer here, i wo uld e willing to >> this is for you >> have a great weekend. still ahead, the fed in focus. jay powell giving an update noo the health of the u.s. economy some air fresheners are so overwhelming, they can...

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stay tuned throughout the day to get that on "squawk box. back to the markets here on "worldwide exchange. futures are pointing higher by about 140 points on the dow. we were up about 170 earlier the s&p is up 12 points. nasdaq is up 37 points week to date the dow and s&p down 1%. the nasdaq down 0.4% let's discuss more broadly the economy and markets. david owen from jeffries international is with me very good morning to you >> good morning. >> clearly one of the jitters over the last week or so for markets is stronger cpi in the u.s., more hawkish than expected fed minutes. jeffries as a company has been on the curve of that, expecting four rate hikes in the u.s., not three. >> exactly my colleagues in the u.s. have been looking for four rate rises this year out of the fed

a focus they saw the balance sheet and shrinking that balance sheet, perhaps even faster than the markets are discounting. potentially the u.s. treasury ten-year getting towards 4% which would impose issues here in europe, because obviously spreads would be widening out. the ecb is heading to the exit i would expect this environment to be raising interest rates >> so let's talk about that ecb expectation. clearly a lot of people expect policy to tighten at some stage, whether that's a rate hike or removing quantitative easing is that your expectation can the fed force that to happen quicker than expected? >> i think the ecb wants to stop buying the bonds everything is still data dependent. if the eurozone carries on to the upside, they'll need inflation to pick up slightly, and stop buying the bonds as early as september they may decide to taper into the fourth quarter but that brings with it the

prospect of the first rate rise potentially as early address december but certainly early in 2018/2019 at the latest. >> when we consider the way markets have been volatile over the last couple weeks in the u.s. because of interest rates rising what is your expectation of what will happen to european equity markets when rates go up? they remain remarkably low on top of that spreads, whether you look at various country spreads or corporate spreads are incredibly tight feels like there's lots of room for rates to spike >> the important point to emphasize is that the eurozone is surprising on the upside. there's pent up demand within the system and the eurozone could continue on the upside through next year. we will face higher interest rates and the bond buying program has supported fixed income more generally because half the buyers through the ecb program, half the sellers have been institutions outside the

eurozone, rather than based in london we've seen a major asset allocation switch from the ecb out of the eurozone and into the u.s. as soon as the ecb stops buying bonds, you would expect pressure on interest rates globally breaking news quickly to end the show general mills is to buy natural pet food company blue buffalo much the price tag to be said $8 billion in cash. there is an extended hours share price for the stock. blue buffalo up 5.8% in extended hours. looks like most of that move came at 4:00 p.m. yesterday. it has not yet reacted to that breaking news that we just brought you. that's almost it for "worldwide exchange." let's look at the futures before we go. we are pointing higher at the open coming off a day where we were

higher for the sop a&p and the w the dow is called gh bhiery 134 points that's it for "worldwide exchange." have a lovely within "squawk box" is next 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

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looks like a rally for friday dow futures are up triple digits following yesterday's mixed session. the nasdaq was down, but the dow was up sharply corruption crackdown chinese regulators seizing control of one of china's biggest insurance groups and fallout from the new tax law. this hour we'll talk to a new jersey congressman who is trying to ease the burden on taxpayers and high tax states. it's a weird idea. it involves charitable

deductions for property taxes. plus we'll go live to a craft brewery where owners are toasting the new tax law it's friday, february 23, 2018, "squawk box" begins now. ♪ live from new york where business never sleeps this is "squawk box." welcome to "squawk box" on cnbc we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin will join us in a bit. let's look at the u.s. equity futures. big news in the olympics -- >> what happened >> curling we won the gold for the first time ever. >> i thought we still have to play the final >> the men -- you're right we get into the gold we would win the gold for the first time -- >> i barely know anything. >> he said last t