it is 5:00 a.m here are the top five things you need to know wall street again pointing to a lower open following yesterday's selloff. the dow implied open down another 100 points the big focus is on bond yields. the ten-year right back above 3% credit suisse posting a first quarter profit beat thanks to its wealth management division. a federal judge dealing a blow to the president on the daca program. and bitcoin moving lower with stocks after hitting $9400. we're hitting all these stories coming up. it's wednesday, april 25th

"worldwide exchange" begins right now. ♪ hi everybody, good morning welcome from wherever in the world you may be watching. i'm brian sullivan thanks for being with us it may be another day in the red for your stock investments futures indicating the dow will drop about 100 points at the open this coming off yesterday's nearly 2% drop for stocks. you have concern over bond yields people dumping big cap tech stocks peak earnings. all of that driving the selling. much more on the markets and your money all hour long yields may be the big story. 3% is still the number for the first time in four years the benchmark ten-year note is yielding 3%. yields moving down a bit, but that 3% number matters because bond yields matter to nearly

everything from the cost of your mortgage to the repricing of trillions in global debt they also make stocks at least on a dividend basis just a bit less attractive. oil not reacting a whole lot about 67 bucks a barrel. up fractionally. let's go worldwide now the asian markets are following our markets down pretty much if you don't like the color red, today is not your morning. jap japan, china, those markets down similar story in europe. all the major indexes are lower there. the dax is down 1.5% let's talk about all of this joining us is larry mcdonald from acg analytics he's editor of the bear traps report a cnbc contributor and a smart and nice guy larry, thanks for joining us again on "wex. blue oyster cult, the song don't fear the reaper, good song should we fear 3%? should 3% be doing this kind of damage to the equity markets

>> thanks, brian great to be with us. and you have to remember over the last two, three years a couple trillion dollars has been flowing into passive asset management strategies, stocks and bonds. and yesterday stocks and bonds were down together in the same day. in the first quarter stocks and bonds were down together in the same day so your dentist in ohio with the million dollar portfolio, half in stocks, half in bonds for the first time in two decades is losing money on both sides of the equation and that dentist, that investor is pulling money out of stocks and bonds and moving that capital towards alternatives that's what's going on the way the market went up so viciously for so long now we're in a period where because of this really change, this mchange

in the market, people may be moving back to active strategies >> i love your analogy i often said the markets may be more important to the dentist in ohio or the doctor in dallas than to the professional investor this shows people getting up early, who have a portfolio, they're not professionals, and the question they might have is this 0.01%, from 2.99% to 3%, why does that matter at all? >> it's more about -- so we have been taking a lot of clients to washington over the last six to nine months. and the perception is, it's widely known you're looking at trillion dollar deficits the next two years thri trillion plus. if we slip into softness in the economy, you're looking at 1.5 trillion in deficits so investors globally are not as

confident in the u.s.'s ability to pay we won't default, but with that amount of bonds that have to be sold relative to a lot of other ugly credits in the g-10 countries. the u.s. is not the only country that has to issue a lot of bonds. the entire g-8 that is what is going on it's a surprise about how many bonds have to be sold. >> you remember when oil collapsed to the mid 30s, everybody was saying it's good news, gas prices are down. we said it's not an oil story, it's a debt story. this will hinder the ability of these big firms to pay back the hundreds of billions of debt you're hitting on an incredibly important point. united states debt, we're sound. how much of a worry would you have about trillions in global debt that will be repriced if yields keep going up not here, but around the world that's it. so investors have to think,

okay, where will i put my money? the biggest liquid pool to put your money in -- let's say $2 trillion, if 10% of that shifts into alternatives, the energy space is at its lowest percentage of the s&p 500 in ten years, the mlps, some equities in there are trading at half the valuation they were a year ago the xlp etfs, the exploration companies, there's tremendous value here money will flow into alternatives like energy executives, that's the sector that will outperform value will outperform over the next 12 months >> jeff gundlach recommending the xlp at the sohn conference thank you very much for joining us today is one of the most interesting and potentially important times for the stock market in years. why? because we're likely to find out

if your stock investments can go up at the same time bond yields and oil prices do. history says that may be tough if not impossible. look at this 20-year chart you have the dow, the oil and ten-year yield the dow is in blue imagine the chart. there yougo. green and red are yields and oil. oil and equities can go up yields have not really seen it let's bring in a man who knows history more than anyone, jeff hirsh of the stock traders i'll almanac. i don't think i can remember a time when all three of those went up at the same time can you? >> no you have to go back further for it to have more significance back in the '70s, even license plate days we had rates higher, going higher, stocks going nowhere for quite awhile >> that was oil and yields going

up, but not equities >> yeah. >> though equities did go up from '74 to '76. >> that was after the arab oil embargo got wrapped up and prices started coming down you saw them get hit again in the '79 oil crisis so equities cannot go much higher >> when you go back to the alma knac nac, and you look and say can all these things go up at the same time, maybe you can find a weaker month period -- >> i didn't find anything extended data is not that great for oil prices and interest rates. the fed changed a lot of the databases. it's not as continuous that we all look at. but i don't remember anything -- any extended period of time where the dow or broad market has gone up in the face of

rising oil >> like every commercial will tell you on cnbc, past performance is no guarantee of future results so just because we necessarily haven't done it, doesn't mean we won't do t >> no. it's logistically not valid. but odds are, we only have the past and the present to measure the future by. >> are you worried about equities now >> it's the end of april yeah i'm worried. we're getting into that worst seasonal period in the worst part of the four-year cycle. so we also have rhetoric coming out of d.c we're seeing a president his timing is more democratic. things have taken longer to come into play. we have tax cuts, tariffs, that sort of thing. but the noise there is making wall street and the world -- >> it's weird that -- >> it's all converging >> but we've waited for guffman, we waited for good news.

>> we seem to have finally gotten to the point where earnings are good. profits are good the korean peninsula is settling down trade rhetoric is backing off. >> a bit too good to be true almost >> it's got to be annoying to viewers at home who are not professional hedge fund algorithmic traders, everything is aligning but stocks are falling. >> there's a little desell rceln fear in growth in the economic numbers and corporate numbers. it's been good for a while volatility has been low. rates have been low. it's not the level at 3% that you're talking about, but it's the trend. the trend that people are worried about and that global debt is huge it will come back to bite us at some point i think we're getting a pullback here it's set up that way with the midterm election years but that sets up the sweet spot, the fourth quarter of the midterm year, first two of the election year.

we could still end up low single digits >> viewers at home should highlight, it's not a stock story, it's debt oil is a debt story. this is a debt story jeff hirsh, thank you. all right. to some of the big individual stock stories. shire, takeda pharmaceuticals striking a preliminary deal to buy the irish drugmaker for $64 billion. i guess the fifth time is the charm. this is the fifth time they made the offer. under the new bid takeda would pay just under 68 a share. credit suisse reported better than expected first quarter results. the best quarter for credit suisse since it launched a restructuring program three years ago. texas instruments, latest earnings and revenue topping estimates. company is forecasting higher results for the quarter.

t.i. is seeing strong demand for chips used in the industrial and auto markets now to more on one of the biggest stories coming out of vegas. how wynn resorts is doing following the ouster of its ceo. contest is a brewer covers the gaming space and joins us. >> they beat on eps, 3 2 cents a share. revenues just slightly missed expectations but wynn's new ceo is distancing himself from his predecessor he is pointing out that steve wynn is no longer part of the company and that the company ha now named three women to the board of directors, and that wynn settled these longstanding lawsuits they're hiking the quarterly dividend by 50% and pointing out the boost in casino revenues in macau and room revenues in las

vegas breaking a quarterly record he says he is rethinking some development projects they have a big lagoon part of the paradise park plan. another project under scrutiny wynn boston harbor the ceo talked about speculation that the company would have to sell it. >> we think it is a really good opportunity. however we're a $30 billion company. and if there was ever any risk due to heightened rhetoric that there could be any contagion from massachusetts into our $30 billion company in las vegas and macau we will have to take a hard look at what is best to protect share holders and value. >> there's a big hearing at the massachusetts gaming commission. matt maddox is expected to attend that hearing and they don't want any con ttagion from massachusetts to las vegas or

macau. elaine wynn is demanding a complete overhaul of the board urging other shareholders to hold a vote from a close friend of steve, he has no business being on the board and in the meantime look at the charts. right before the earnings on january 22nd were announced, the stock spiked then the report came out about steve wynn and the allegations it plummeted over the last three months, over the first quarter, shares grew until yesterday, 7.6% while the s&p was down 5%. >> they came back. >> it's a remarkable story now jeffries is out this morning, david katz saying he's putting a new price target on the share, 230 bucks a buy >> there's zero indication that

said, guys, we're going to vegas for a dude's trip, let's go to caesars not wynn because this happened their core business appears not to have suffered >> he says room revenues look right where they are the outlook is good. they have mass gaming increases in macau they're looking at japan, making ahard play because everybody thinks gaming will happen in japan. >> big interview coming up, contessa thank you. we'll hear from matt maddox later this morning on "squawk box. just getting rolling on "worldwide exchange. on deck, we're all over the early market action following the selloff futures indicating another drop of 100 points at the open first we're going behind the wheel. phil lebeaueijing auto show what is attracting a big crowd here at the beijing auto show? this is the first time tesla set up a booth here at the beijing auto show.

they're all coming here to see the model 3. we'll look at tesla's opportunity in china when "worldwide exchange" returns after this these birds once affected by oil are heading back home. thanks to dawn, rescue workers only trust dawn, because it's tough on grease yet gentle. i am home, i am home, i am home

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show >> thank you, brian. electric vehicles are growing in popularity in china. it already has a huge lead compared to the rest of the world. more than 600,000 electric vehicles sold here in china last year europe had just over 3 00,000 look at the u.s., just 200,000 sold last year japan was fourth tesla, about 14,000 tesla vehicles told in china last year that's % of its global sales we did catch some owners charging up their model ss here. they all say the same thing, despite the fact they pay a hefty tariff they would do it again. tesla discussed opening a plant in china but is not yet to the point where they're announcing those plans. there are rivals who are already complaining to compete with tesla.

there are 26 electric car companies in china some of these companies will fall apart over time they won't have the funding to last before y but experts believe more than a few could challenge tesla and the established automakers tesla reports earnings next week as always, expect more than a few questions about its plans in china and whether it has really set a better -- given us a better sense of when it might open a plant here. brian, back to you >> phil, thank you very much hope you have a wonderful birthday have some fun beijing style. appreciate it. just ahead, we're on washington watch the president taking a hit from a federal judge on his plans over the daca program. those details next. and later on the first lady stealing the show at the macron meeting. why menilaa's has the has some people talking today

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. a blow to president trump topping your political news. a federal judge ordering the trump administration to reinstate the immigration program daca tracie potts is live in washington with more on that deferred action for childhood arrivals, this program has been in question for months now. the president wanted to shut it down the courts have weighed in and now a tral judfederal judge in s

that program for now can go on it's unlawful but he put a 90-day stay on his decision, essentially three months for the homeland security department to give their side for why they want to shut this down this is the third time in three months that a court has weighed in if they do not come back to court and explain why they want to wind down this program, then the department will be forced to both accept new and renile ewal p p applications and get those processed. tim cook will meet with president trump in the white house today. the meeting will be closed to the press and no word on the official agenda. if any headlines come from that meeting on apple which has taken a beating in the markets the last couple of weeks, we'll bring that to you. >> let's check on what else is happening outside the world of business phillip mena with more.

more than 100 migraine igra traveling through mexico could arrive in tijuana by tomorrow morning. this prompted president trump to deploy national guardsmen at the border 150 people are already being sheltered in tijuana dallas police arrested a man they say shot two officers and a store loss prevention officer. all are in critical condition. they chased down armando juares who opened fire in a home depot. and a record has been broken in the coolest way ever. literally. irish runner paul robinson set the record for the fastest mile ever run at the north pole the 25-year-old finished in four minutes and 50 seconds braving temperatures around 22 degrees -- negative 22 degrees robinson aims to qualify for the

2020 olympic games in tokyo. he got a record and just a bit of frostbite >> my question is was there a previous record? how many other people have done this >> no one ever i don't know still an impressive feat >> might be. don't do that. >> right you try and you get the record that's the way it goes >> i will do the record breaking mile run up machu picchu i couldn't finish it still ahead on "worldwide exchange," big tech's drop the f.a.n.g. stocks under major pressure. and later on, a profit pop we have a wild stat about this quarter's earnings season that will have everybody in your office talking it is your morning rbi that's coming up why did i want a crest 3d white smile?

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can the big tech stocks recover or is it finally time to say good-bye to google andfarewell to facebook? we have a cool video alert for you. you have to see this world record breaking lego sculpture it's wednesday, may 25th second half of the show rolls on

♪ welcome back thank you for being with us on cnbc i'm brian sullivan here's how your money and investments look right now stock futures indicating another drop at the open triple digit loss indicated for the dow, this coming off the drop yesterday in the stocks if everybody was buying the same five or ten stocks for five years and now they're selling them, what do you think will happen the bond market is the other story. yields hitting 3% for the first time in four years when we hit them four years ago, literally it was for a hot minute well see if the market can stay at 3%. that's where we are now. in asia, red all over the screen asian markets are down european markets are down as well the oil market, not a big move oil prices up fractionally the dollar continues to creep a

bit higher dollar has not moved a whole lot. the gold market has been in play we'll see if people are dumping stocks f they'll bif they'll bu. maybe they're buying the cryptos. bitcoin, down 3% ripple down 10%. big drops for all the cryptos. here's my expert analysis this morning, nobody is buying nothing. there is not one thing worrying stock investors right now, there's many peak earnings, selloff in tech, trade worries, and the 3% bond yields let's see if our friends in europe are concerned joining us is steven ma krsh maclo smith. do you fear 3% bond yields over there like we do here? >> no, brian, we don't fear 3%

bond yields. if you look at what has been happening the last five, six years with central banks in extraordinary stimulative mode, nominal yields have been low it was always likely that when central banks ceased that, you would see bond yields normalizing. we think this is part of a normal process of normalization in bond yields plus if bond yields are moving up, yield curves should be steepening relieving the fear of growth people will probably interpret this as growth continues at a healthy level. >> bonds are not moving, gold is being sold, cryptos being sold, where is the money going >> i think just in the short-term there's a slight hiatus happening in markets. if we look back to january, we entered 2018 with a high level of optimism about markets,

because it looked like growth would be healthy around the world. earnings would grow in equity markets. japan and u.s. earnings looking particularly good. people were not concerned about valuations but the issue with that is you had levels of optimism definitely the exuberant side of bullish and also a protected market if you looked at the call ratio. that dropped to low levels so what's happening is people are digesting that and the pace of growth has slackened slightly a number of things contributes to that. one is a slight turn in the credit cycle and winter weather in europe. we have figures from the german ministry of finance saying a record number of people were ill with flu in march in germany, about 7% of the work force that has an impact on demand growth having been extraordinarily high in the eurozone and the back end of

2017, looks as if it's coming off the boil a boil a bit in the first half of 2018 but we still think the growth over the full-year will be above trend. people are just readjusting positioning slightly, and going from growth that looks like 2.5%, 3%, to much closer to 2% now. >> i love hearing that because basically in march every single american seemed to be stricken with the flu we might see if that is showing up in the numbers. the numbers are good overall i'm not asking you to comment on individual names, why do you think apple and other big stocks whose business seems steady are down 10% and 2% over the matte of four, five days >> it's difficult to gauge short-term stock reactions, but your point earlier that people have been buying the same stocks most of the last five years, that rings fairly true these stocks have created an enormous amount of leadership within the market. as people rotate and take a bit

of risk off the table, they will take profit in the larger positions. i think it's no more sinister than that. >> i'm not blaming the etf market, but when you have 5, 10 stocks that are 20%, 30%, 40%, 50% of the biggest etfs that everybody buys, and those stocks get sold what does everybody expected will happen to the other 90, 100 stocks in the etf? how can they go up they can't >> i think your point is well made you take one step back, and i think the people have focused on the technology area of the u.s. market possibly to the detriment of other areas. back end of the last year we saw the banks doing reasonably well. steepening yield curves are a decent environment to do bank lending business they looked robust some volatility because of the fixed income and currency trading side there's a broader picture of

health within american earnings, partly as a result of tax cuts put through at the end of last year that people should be focusing on. >> yeah. yeah pretty much every hedge fund out there owns amazon, google. steven, great discussion see you soon, i hope thank you. >> thank you if you own any of these three stocks, pay attention. amgen reporting a higher first quarter profit thanks to strong demand for new products and high hopes for a new migraine treatment which is likely to get fda approval next month. cree earnings beating forecast revenue did miss the company offering a bullish outlook. they expect fourth quarter sales to top expectations. that stock up 8% premarket. edwards lifesciences t could be a disaster of a day that stock down 8% sales of its transcatheter heart valves missing estimates the company losing market share on some products in europe. time for the top trending stories. let's get back to contessa with

those. lego land japan is building a 14 foot cherry blossom tree out of lego bricks and it took home a guinness world record it required more than 800,000 legos and took more than 6,000 hours to build probably just as long to disassemble it philadelphia-born rapper meek mill released from prison his first stop post jail was a sixers game. he rung the liberty bell before tip off. a big deal there first lady melania trump got buzz on social media everybody talking about her wide-brimmed has the that she wore during a state visit with the president of france. some said the first lady was channeling her inner olivia pope others compared her to beyonce

others still said that she was being abducted by her has the. i think she looks extremely elegant and i would feel bad for anyone who is forced to stand next to her having their photograph taken it's like a comparison >> yeah. as you know from time to time the internet does focus on things that seem to be a bit obscure. you are a fan of the chapeau >> that has the is not obscure >> just little things, instead of the meeting, it's like the hat! >> it's attention getting. perhaps she wanted to hide her eyes you know, keep them downcast >> sometimes a hat can be used to shade yourself from the sun, or in rain at a baseball game. still to come, tech taking center stage the big cap tech stocks having a rough day on wall street what that could mean for the rest of earnings season. first let's get your national weather forecast from bill

karins good wednesday morning to you. our slow-moving rain storm in the mid-atlantic yesterday is moving through the northeast not causing many problems as far as airport delays and things like that. maybe some isolated flooding concerns here's how the rainfall forecast will look. not much additional rain if any from baltimore southwards. new york city could get another half inch, one to two inches in coastal maine and eastern new england. here's the timing of it. 7:00 a.m., the heaviest rains from philadelphia to new york. right there in the morning rush hour i did -- by 6:00 p.m., the heaviest rains shift to new england. we mentioned the possibility of airport delays this morning, philly and new york, isolated delays. this afternoon we will shift was out of new york and up tordboston that's your business travel forecast more "worldwide exchange" when we come back

if you're hoping to wake up watching "worldwide exchange" and seeing futures soaring, i'm sorry, they're not futures indicating a drop of 80 points the implied open for the dow is 80 points coming off yesterday's 550-point slide. if the tone in texts and e-mails i received yesterday from people i know are indication, you, america, care about the big cap tech stocks.

everybody bought tell for years. now everybody is watching them like a bunch of hungry hawks happening just a few minutes ago, google upgraded by stifel nicolaus they boosted their rating from a buy to hold. he is comfortable with alphabet's positioning in the media space relative to facebook not really helping most stocks down, not a lot, but alphabet stock slightly in the red. facebook, amazon, alphabet, netflix and others yesterday falling more than 3.5% how far these stocks have fallen from the 52-week highs facebook down 18%. amazon 10% netflix 9%, and alphabet down 15 let's get more from arjun kharpal joining us from london

here, literally here, these four stocks which have been popularized in a popular acronym seem to be owned by every tom, dick, harry and hedge fund manager. how is their slide being managed over in london >> you're right. what was interesting last year is everybody said let's buy f.a.n.g.s as this massive basket, and they did they rose phenomenally last year this year we're seeing that unwinding. a lot of these individual names have their own problems. this is not one basket of fang stocks going up. you saw with alphabet earnings the other day, the big question was the amount they were spending actually how much investment and they have not been able to convince investors now the investments they're making might lead to future growth. that's a big question for google and you throw in the regulatory concern, which is also a big issue for facebook as they report earnings today after the bell, there will be a close watch on how will the upcoming

european regulations that are set to come into force on may 25th affect their business on top of that, spending is another key concern. how much will facebook have to spend to comply with new regulations on lawyers, on moderators, and also new product areas. those will be two big areas. apple another key stock. popular name huge concerns over iphone demand one analyst said the market is in full panic mode over iphone sales. you saw morgan stanley knock down their unit forecasts for sales for the june quarter a lot of concerns around each of these names. each have their own problems the market is more discerning to particular names now rather than just saying let's own all the f.a.n.g.s. >> the apple halo, skyworks, some chip stocks in apple products or affiliated with it, qualcomms of the world, down 9%, 10%, 12% so far this month this is having more of a broad

effect on the market overall this psychologically, arjun, these are stocks even if you don't own them, they control a lot of this market, do they not? >> absolutely. you mentioned the chipmakers, key names to look out for. they give us a read will you around apple if you look at two big ones, asm austria microsystems, they provide 3-d sensing components for the iphone x i was speaking to some analysts in the uk and if you read from ams is saying, they're saying apple will significantly cut if not completely scrap the iphone x from production and just sell whatever inventory they have left that's a key concern there's questions how well did the iphone sell. was this just a niche product? apple was making somewhere near

64% margin on the iphone x it's not completely bad. it accounted for 5% of handset profits last year, which is phenomenal for one phone there's a bit of a debate around iphone x sales so now the questionis how do they monetize that through the services and other things. >> we like to lump these names in together. it's the way you do things in the media. but these companies have almost nothing to do with each other. apple sells phones facebook sells you netflix sells movies and tv, and google sells key word for google sells key word for for advertisements they're not related entities but being dumped like they are >> yeah. just because they have risen up together and as you mentioned the etf as well. there's a general concern about

so much expectation baked into the stocks facebook's growth rates have been in the region of 45%, 47% each quarter think about the expectation now. there's concern in this environment where we have concern over issues of regulation, a slowing smartphone market, these companies spending loads more and potential issue of margins, that concern does spread across the high-growth tech stocks. that's why we're seeing this broad selloff across the names as you said, the f.a.n.g.s being de-f.a.n.g.ed. they have been def.a.n.g.'d. i know it's boring, but the oil stocks are doing well. there's an oil company whose ta ticker is fang, i by the oil stock will outperform the f.a.n.g.s. arjun kharpal, great stuff tim cook will meet with president trump at the white

house today. the meeting is closed to the press. no word on an official agenda. but of course if anything does come out of that market moving we will bring it to you. because that's what we do. on deck, call it profit palooza. despite the market's drop, we have a staggering stat about earnings season that mayen the most random but interesting and maybe important thing you'll hear all day stick around - i love my grand. - anncr: as you grow older, your brain naturally begins to change which may cause trouble with recall. - learning from him is great... when i can keep up! - anncr: thankfully, prevagen helps your brain and improves memory. - dad's got all the answers. - anncr: prevagen is now the number-one-selling brain health supplement in drug stores nationwide. - she outsmarts me every single time. - checkmate! you wanna play again? - anncr: prevagen. healthier brain. better life. ♪

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welcome back 5:51 another rainy day. can i be the first -- it's 40 degrees in new york and raining. happy fall i hope you have the halloween decorations up and are thinks about thanksgiving i don't think spring or summer is coming. that's the way we feel here. it's 5:51. can stocks go up if oil and bond

yields also keep going up? let's bring in michael tyler from eastern bank wealth management let's move the weather aside as depressing as it is. the market has been depressing as well. do you worry about 3% yields and higher oil prices as it pertains to equities? i think equities can withstand 3% yields. the concern is whether the yield curve will invert. there's nothing now that will cause longer term bond yields to go up. as long as bond yields are stuck at about 3%, you can go from 7 years to 30 years, and you're staying within, like, a quarter point of interest rates, if that's not going up and the fed hikes too rapidly at the short end, you could invert the yield curve and that could cause people to be afraid of a recession. that creates a psychological environment that would be

unhealt unhealthy. we have to be careful what the fed does, but 3% yields, 3% ten-year itself does not concern me that's healthy >> why do you think the market is concerned right now >> the funny thing is it's about the earnings it's not about the interest rate when you hear a company like caterpillar, i think that was instructive yesterday, they said blowout quarter, the numbers were fantastic the same true for several other companies yesterday. but they're afraid it's a high watermark. that's when the markets get nervous. the pe ratio may look attractive now, maybe even cheap, but the reason it's low is not because of the low price but because of high earnings. you have to think can we sustain double digit earnings growth through the next year or two we have a one-time boost because of the tax package i think that will sustain earnings for another year plus or so. at some point, you have to wonder are we running out of

earnings growth? that's what the market was worried about yesterday. >> do you believe in the peak earnings that we seem to be talking about more lately? >> we're not there yet but if you're not looking for it and if you're not concerned to be paying attention, then you have a problem we have to look for it it's not there yet we have another year before we're concerned. at the same time there are a couple yellow flags to pay attention to >> like what >> the main one, will we hear more companies -- earnings so far are tracking at close to 20% growth that's outstanding so when you look ahead, what we're seeing are few companies that have produced great numbers, yet the stock prices go down because the so-called whisper numbers are too high, expectations are too robust. that's a short thing the market can swallow that. when you see companies cutting their forecasts and saying we can't sustain the margins or

growth rates, that's when i get worried. >> theoretically i'm supposed to buy a stock now because i'm trying to buy future earnings. if you believe that earnings are going to continue to go up, maybe not at this pace, but continue to go up, why is the market buying discounting those future earnings now? >> i think the question of -- if you want to get into it, it's not what are the earnings in the future but how are they priced, that's where the interest rate does matter. if you see interest rates climbing too rapidly, you look at the latest dot plot from the fed, they're looking for three, maybe four rate hikes this year. another several, three or four next year. and on into 2020 you run the risk of inverting the yield curve and run the risk of short circuiting economic growth and what the stock market can do simply because the

discount rate that you'll use becomes too high for what the earnings can support that's the real risk in the markets now. >> michael, i think you laid it out perfectly. it's early, peoples heads are cloudy, but you laid it out perfectly. thank you. >> you bet. your morning rbi goes to what michael talked about. if you're uneasy about stocks, earnings have been good, but did you know that profits have been off the charts it's the best quarter for corporate profits for at least a decade and maybe longer. according to jones trading and fact set, profit margins for the s&p 500 companies are coming in at 11% so far. folks, that is not only good, it is the highest net profit margin seen by s&p 500 companies since fact set began tracking the data in 2008. 40 quarters, none better than the last one you are number one, corporate profits. the markets don't seem to care

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stocks pointing to losses at the open this morning after yesterday's industrial beat down and the tech wreck we saw. full market rundown and coverage straight ahead. and we'll get results today from cnbc parent company comcast. also dow component boeing and twitter. we have the numbers and instant reaction coming up. and apple ceo tim cook is headed to washington today we'll tell you what's on the white house agenda it's wednesday, april 25, 2018 "squawk box" begins right now.

live from new york where business never sleeps, this is "squawk box. good morning, everybody. welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick along with andrew ross sorkin joe is out today we're joined by kevin o'leary sitting in with us once again today. >> nice to be here. >> andrew is here, too in body. >> i'm here, my voice is not we'll see how we do. checking the markets, you'll see u.s. equity futures in the red, this comes after the markets are looking to recover from yesterday's selloff good luck with that. the dow futures are down by 70 points s&p futures off by 6 1/2 nasdaq down by 15. all of these are things we've been watchin