trchlts is 5:00 a.m. at cnbc global headquarters. break out the advil because it looks like the fed hangover is here to stay wall street is struggling for gains this morning following yesterday's another big selloff. your trading day set up. that is straight ahead. defense secretary jim mattis handing in his resignation that fallout ahead and then a shutdown showdown congress has until midnight to pass a spending bill and avert a government shutdown. we are live in d.c. with the latest nike beats, but it is what

the company said about china that is grabbing headlines this morning. those details ahead. ready, set, shop it is crunchtime for retailers as we head into the final weekend before the christmas holiday. it is friday, december 21st, 2018 "worldwide exchange" begins right now. ♪ it's christmas all over good morning and welcome to "worldwide exchange. brian sulvlivan is off today we are seeing a slight amount of green on the board the dow would open up by 20 points if these gains hold to the opening bell s&p up about 3 points and the nasdaq up around 23. treasury is in focus we are still seeing yields just below that 2.8 mark here you can see 2.79% for ten-year treasury note yields two years at 2.67% we're still watching that gap between them turning now overseas

on the asia overnight session, we have seen the nikkei and japan up over half a percent and the shanghai composite up by 0.75 of 1% on the european trade the cac in france off 3% and german dax off by 0.75% as for the broader macro picture. we are seeing euro strength. we're watching dollar yen, as well and brinsh pountish pounds justt flat on the session. just around 1.26 63 for that trade. so, dollar strength marginally against the euro dollar weakness against the yen and the pound. on the oil side of things, wti, crude still below $46 per

barrel february crude contracts are in play ice brent up to $54.17 investors will be closely watching two big developing stories out of washington, d.c., today. first, fallout from another high-level departure within the trump white house. defense secretary jim mattis is stepping down. he handed in his resignation to the military judgment and setting up for a shutdown showdown the house passing a spending bill that includes spending for a border wall and the senate has until midnight tonight to vote on it and avert a partial government shutdown. you can see that clock there both of these stories could have a big impact on the markets. let's bring in ceo of commerce street capital dory, thank you for joining us this morning as we talk about the developments in washington, will they have an effect on the markets? is this something that we're keying on right now or are there

bigger factors at play in your mind >> well, absolutely i think it will the market is really dwelling on bad news that is out there it's been a bad technical market since october. it's going to continue bad through the end of the year and probably through mid-january so, all this news about china, the administration, the government shutdown and all those things just fuel the fears of an already nervous market >> so, i'm curious we had some, i guess the best way to put it is frustration and perhaps friction in washington, d.c., between the white house and congress other parts of the administration why is it now that it's becoming so much more of an issue >> i don't think that it is. this happens all the time. think about all the times in the past where congress has gotten at odds with either each other or with the white house over the budget and a threat of the shutdown and how nervous the market gets. so, as an investor, you have to think, will this shut down

permanently and that's the end of america i don't think so so, it's all political posturing that will work out and all it does is create more buy and opportunity for those who have cash and a little bit of nerve, if you will. >> no doubt about it, dory, you bring up excellent points. the thing in washington that probably has more people concerned is what is happening not with the administration, but with the federal reserve take us through the thought process you have right now did the markets overreact to what happened with the fed interest rate hike and subsequent press conference by fed chair jay powell >> you know, it's a really interesting time to try to get in the mind of the fed they had long-term position that rates were artificially low and they needed to get them up so they could lower them, again, in case we had a recession. they have been raising rates and stubbornly committed to that and that is probably okay except they're not looking and letting the economy absorb the rate

hikes which percentage wise are way higher than what they have been in the past they didn't listen to the market so, here they're looking at historical data without looking at probably one of the best leading indicators that you can have, which is the stock market itself and they should have taken the reads over the last 30 days and said, hey, let's pause let's wait there's no hurry and the market would have loved the news and, instead, they had this adherence to this policy or at worst a resistance to the administration >> dory, you mentioned the stock market being the ultimate leading indicator. if that is the case, are we do for a recession in 2019? >> well, i think there's a lot of data slowing home sales, things like that the fedex numbers yesterday were a global leading indicator so, i think we have to listen to it we have to look at it and be careful. that doesn't mean the market

doesn't oversell and we're caught in this technical cycle period, as well. add all of this to the feahe nod politics, i think it creates some interesting buying opportunities between now and year end and probably second, third week in january before this thing starts to play out. >> 'tis the season for shopping lists. thank you very much, dory wiley, appreciate the help. have a good day. >> you, too. your top corporate story is nike the company reported a big earnings beat in extended hours trade. those shares up by 8%. let's get to frank holland with more on nike's quarter and that big stock move frank? >> lebron james' slam dunk earnings in revenue and overall sales growth in nike's core business, sneakers and apparel saw double-digit growth. sales in north america, the company's biggest market rising

9% and up in europe and middle east and africa. 26% growth and the company said it also saw big sales number on singles day. that one-day retail event created by alibaba they remain bullish about growth in china, despite some uncertainty about u.s. tariffs. >> there has been uncertainty regarding u.s./china relations we have not seen any impact on our business nike continues to win with the consumer in china. for over three decades, nike has been a brand of china for china. >> and nike sources more than 20% of its products from china other potential headwinds for the company continue to be a strong u.s. dollar nike also announcing plans for a new line of smart basketball shoes and immense yoga line to compete with lululemon

dom, over to you >> perhaps refreshing to hear positive commentary from a large company. frank holland, thank you for that update. new this morning, former nissan chairman carlos ghosn was rearrested in japan. prosecutors say the move was based on suspicions that ghosn shifted more than 16 million in personal investment losses to nissan back in 2008. he also allegedly had the company deposit millions of dollars on four separate occasions into a related bank account. ghosn was ousted and has been in jail on allegations of financial misconduct. china firing back this morning after the u.s. accused it of committing economic espionage. u eunice live with the latest. >> beijing isn't taking those accusations lying down

saying the u.s. has made up facts and created noise and argued that the chinese government has, quote, never participated or supported anyone in any way in corporate cybertheft the ministry counted that the u.s. large scale cyber spying is an open secret and that china would never accept these accusations. now, beijing sharp rebuke came after the u.s. justice department alleged that two chinese nationals had orchestrated a global campaign of cybertheft against the u.s. and its allies u.s. prosecutors say the two are linked to the chinese government, targeting 45 american tech companies, the u.s. military and agencies like nasa sources told reuters that the hackers were able to reach customer data through ibm and hp enterprise servers the companies would talk specifically about those claims, but they did say they prioritized customer security. now, the uk, australia and new

zealand have all said that they joined the u.s. in the criticism of beijing, but, dom, china had a couple words for those countries, too saying that their words were slanderous >> eunice, there is a sense building not just because of the trade and tariff discussion, but competition in technology, artificial intelligence, machine learning, that this relationship with china is going to be as, if not mored av versarial than the u.s. with the sou.s. versus chi for global supremacy >> that is exactly what is a lot of people are talking about here we see that reflected not only in the commentary from the chinese government itself, but also in the state media. for example, today, the state media has been very critical, obviously, of what happened with the united states and this decision by the doj, but, also,

they've been talking about the u.s., what they have been describing as cultural arrogance and the argument is that the american elite are so out of touch and so disrespect the chinese and the chinese way that they can't fathom the idea that the economy here would rise on its own. and that china couldn't achieve its own status back in the world without stealing american technology i think it's really difficult to say now how this standoff that we're seeing is going to play out when the two sides negotiate or at least attempt to negotiate a trade deal next year >> it seems like more complications for that big overarching trade discussion that we're having right now with china. thank you very much, eunic, for that update. we're just getting started a double dose of d.c. drama. investors focused on two major developing stories out of our

nation's capital we are headed to washington live that is straight ahead. but, first, time to ready, set and shop it's crunchtime for retail as we head into the final weekend before christmas a pulse check on the holiday shopping season when "worldwide exchange" returns after this break.

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oh, the christmas tree at rockefeller center a great scene in new york this morning. the countdown is on. less than four full days until christmas and that means it's crunchtime for the retailers let's get to courtney reagan with more on that story. courtney >> saturday is expected to be the second busiest day of the year behind black friday for retailers. the national retail federation says about a quarter of americans are still checking off their lists. i know i'm not done yet. a number of retailers are extending their hours for the procrastinators. kohls staying open for 83 straight hours most macy's storms will open today at 7:00 a.m. until midnight and sa7:00 a.m. to midnight saturday and sunday. >> last-minute we came up from philly to do shopping in new york. >> only halfway down >> unless you want to pay for

shipping, shoppers up 47% this season compared to last. and retailers say those click and collect orders spike in the final days before christmas. dick's expect the number of online pickup to triple as it gets closer to christmas half of all web orders are fulfilled in stores but in the final days before christmas it surges to around 80% target expects the holiday season order pickup to be three times last year's levels macy's numbers doubled compared to last year tomorrow, dom, old navy is giving free round-trip rides if you have a buy online pick up in store order that you have to get back home. >> what an amazing, just, i guess, development in technology and the shopping experience

right there. courtney, please stick around. let's bring in jan, ceo of worldwide enterprises and also a cnbc contributor like i said, courtney sticks around so, jan, courtney laid out everybody that is going to be open maybe for 24 hours a day. all of these extended hours. are we going to see that final rush that is going to save christmas for the retailers? >> well, if tomorrow is not the biggest shopping day of the season, the answer to that is no it will be the biggest shopping day in store for sure. but will it be the biggest shopping day i think right now we've seen this big lull after the big season, right. we saw five fabulous days at thanksgiving then we saw the big droop like we do every year and it's been droopier than usual. so, we saw more of a turn down than we normally see however, we've got the very long season, the longest it can be and now we've got the final push so, tomorrow will be huge.

sunday has to be a barn burner for this to be as big as last year's growth. >> as you're channel checking and doing all of your research, where do you think the heat will be in the next three days as we make that final push is it on the luxury side is it on the electronic side is it on the clothing side i mean, where do you find that the activity is going to happen? >> if we see something disappointing, it will be on the luxury side. here's why all these gyrations in the market and the fact that people's assets are not growing in the fourth quarter. we've seen a reduction, right? in household assets. that is the part i'm most worried about. at the bottom, everybody is working and everybody is getting more pay than they got last year we're going to see a good, strong finish at the bottom. if we do get disappointed, it will be at the top and 100% the fault of the market. >> so, courtney, the top 100% fault of the market. i recall an interview that you guys had with brian cornell, ceo

of target. that was back in august when he called this the best environment for the consumer that he's ever seen in his professional career. it seemed to mark the top in the retail trade for consumer discretionary stocks what do you get a sense of as we head into this, this is the most critical time for retailers. what is the outlook for all those companies? >> i think that's a good point, dom. we saw this peak in the stocks but i don't know that means we saw the peak in the spending and the sales yet. we actually had a pretty good earnings release report quarter for a lot of those retailers in november so that was before the holiday season started i know what you're talking about with mr. cornell and we asked him that again do you still think it's this strong he said he hasn't seen a change and that was at the end of october. jan makes a good point if we see this breaking, it will be at the high point that is the consumer that you see that correlation with. when the stock market starts to

pull back. that is the spending that you see fall the luxury the higher-end spender we sent cameras out to a number of cities and talked to consumers and saying have you paid teenattention to the marken we didn't find a single person that said, yes most people said i can't even remember what i bought earlier in the season. i am still buying more and have a budget but inevitably i go above it at least for most consumers, they have not been scare stock market activity. >> she makes an interesting point. we had good retail releases after the third quarter and if you really released good numbers you went down 10%. if you released bad numbers, you went down 20%. the stocks showed that peaking feeling. the consumer is still really strong at the moment >> a couple moments left, jan. we're neck deep in christmas, but 2019 more towards dollar

stores or louis vuitton and tiffany? >> at the moment the dollar stores we're not seeing the growth in the upper end of the market. the market and spending really follow each other pretty well at the high end i think we'll have strong employment and the new minimum wage that amazon set for the nation is real i think we'll still see the strength at the bottom and i'm really concerned about what we see in luxury unless we see this a temporary blip in the market if we roll over at the top in the market, that is not good for the luxuries well, coming up, we'll dive deeper into the consumer discretionary trade as we close out the year but coming up next, wall street is on washington watch watch as the clock ticks towards another government shutdown. we're live in d.c. with the latest. another travel alert if you're hitting the road this holiday weekend. winter weather could have an impact on your plans

the latest on atth weather when "worldwide exchange" returns after this

investors are following two major developing stories out of our nation's capital defense secretary jim mattis ca handing in his resignation while the clock ticks towards another partial government shutdown. let's get to tracie potts live in d.c. with more of those stories. >> hey, dom, good morning. two budgets have passed here on

capitol hill one with money for the president's border wall and one without. that's the essence of the conflict as we now count down the hours to this possible shutdown >> there is a shutdown in the house. >> reporter: stalemate with less than 24 hours to go. >> i do not want the government -- >> i understand. >> reporter: it may happen tonight's the deadline the house just passed a temporary budget through february 8th >> the motion is adopted without objecti objection. >> reporter: that includes $5 billion for president trump's border wall. democrat nancy pelosi said that could never happen she was wrong. nancy does not have to apologize, the president tweeted. so proud of you all. now on to the senate >> it can't pass i don't know it will get a single democratic vote. >> reporter: without a few senate democrats onboard, the budget wall money cannot reach the president's desk includes no money for the wall >> any measure that funds the government must include border security has to. >> reporter: frustrated

lawmakers say it's up to the president to break the gridlock. >> you are in charge of the house, senate and white house. get a grip and learn how to govern the country >> reporter: it's not clear what can happen between now and midnight to keep the government running. and the other big story out of washington, jim mattis has announced he is stepping down at the end of february with what some describe as a scathing resignation letter to president trump questioning some of the areas that they have disagreed on saying we need to be clear eyed about our enemies and respect our allies the president put a bit of a different spin on it tweeting that mattis was retiring and that he named someone to replace him soon >> two former generals leaving the white house pretty close after each other thank you very much, tracie potts, for that story. we'll break down what all that d.c. drama means to you and your portfolio plus, drone chaos. london's second biggest airport

reopening after this hour after a drone grounded all flights just before christmas. the latest on this developing story when we come back. (clock ticking) (bell ringing) it's time. time for a new kind of cloud. the ibm cloud. the cloud that proactively protects your business from threats, instead of just reacting to them. that lets you modernize and move more of your apps without re-writing. that unlocks insights from all your data and puts it to work with ai. get a faster, more secure journey to the cloud. the ibm cloud. the cloud for smarter business. ♪ ♪

♪ oh, there's no place likargh!e ♪ this one's a pretty big tree... ahh! i'm trying... [ glass shattering ] ♪

yippiekiyay. [ laughter ] ♪ mom. ♪ a santa selloff. will investors be handed a big, fat, lump of coal as we close out the final big trading week of the year. your friday market set up straight ahead. shutdown showdown.

watching washington, d.c., as the clock ticks towards midnight the latest ahead a major travel alert if you're one of the millions of people hitting the roads this holiday weekend. you're watching "worldwide exchange" right here on cnbc welcome back to "worldwide exchange." brian sullivan is off today. let's get you up to speed on the market action. frank holland is back with this morning's top headlines. >> good morning, again, dom. shares of nike, the world's biggest sports apparel maker are spiking. sales rose 10% with strong demand in north america and china on the company's conference call ceo mike parker said nike has not seen any impact from the trade war between the u.s. and china

former nissan chairman carlos ghosn today's move comes amid new allegations ghosn shifted personal investment losses to nissan new lipper data showed that it was pulled from stocks in the last week. they're on pace for their worst month of withdrawals on record let's get a check on the other headlines. francis rivera live in the newsroom with the latest >> frank, francis, easy to get mixed up flights in and out of gatwick airport are back after drones sparked concerns of collision. the airport is warning travelers

to check their flight status before leaving for the airport. much of the east coast is facing heavy rain and bumper to bumper traffic as holiday travel shifts into high gear. in florida damaged 70 homes and injured one person. the weather delays should be out of the way by tomorrow morning. praising a walmart cashier in new jersey after he took care of a grocery woman in need the woman was in distress about the trouble she had paying for her items. that's when the clerk stepped in and asked her to wait 15 minutes so he could help out the woman who made the now viral post said the young cashier renewed her faith in humanity. for a lot of us that renewed faith in humanity. >> what a great story ahead of the christmas holiday. thank you for all of that. let's get you up to speed on

the market action. futures pointing to a very slightly higher open the s&p up by two to three points the dow up by about 13, 15 points on that side of thing, nasdaq up by 26. treasuries, we are seeing yields on the ten-year u.s. treasury still below that 2.8 level, 2.79 the last trade there 2.67%. turning overseas on the asian side, a lot of market activity on the nikkei and shanghai composite down by 0.75 the dax in germany off by three quarters of 1% and the ftse 100 off by two-thirds of 1% and french gdp coming out weighing on the markets as for the broader side of things check out what is happening with the euro

dollar yen 111 with crude oil prices we're continuing to see that pull back in crude west texas intermediate below $46 a barrel at this stage $45.76 the last trade there off by quarter of 1% brent crude $53.91 the last trade there. the last full trading day before christmas is packed with economic data. durable goods, personal income and spending and the final estimate on gross domestic product. that is followed by consumer sentiment at 10:00 a.m. eastern time and, of course, the countdown to christmas is on there are just four shopping days left under four, if you want to think about it technically. it is crunchtime for the retailers. the saturday before christmas consistently ranks as one of the top holiday shopping days in the season what does this mean for retail

stocks time to do some sectornomics if you take a look at the consumer sector versus the s&p 500, we have seen a decline in both, but consumer discretionary as you can see there, still at least holding on to some relative performance versus the s&p 500. now, let's take a look, again, at some of the digging into aspec aspects. the black friday spend this year was $24 billion. meanwhile, super saturday they estimate could be even bigger with $26 billion in spending they look at some of the hot items and it could be on the luxury side of things, perhaps luxury goods like handbags and also perhaps maybe jewelry those things to watch. the things that he's not watching as closely for a hot pickup in sales is toys, consumer electronics and home products those items might have been purchased earlier on to avoid not getting them as supplies perhaps run out.

so, certainly, some super saturday expectations for the holiday shopping season and that blitz right before christmas well, let's bring in now ed campbell senior portfolio at qma. ed, let's start you with what's happening with the retail trade. we know that consumer confidence is near relatively high levels and that does bode well for the holiday shopping season. does that mean that the consumer will bail out the markets when we see the results kind of in the first quarter? >> i mean, consumer spending is hanging in there pretty well of course, consumer discretionary as a cyclical sector is under pressure right now. and, you know, we think the cyclical sectors are likely to be under pressure for a while. so, we're taking a more defensive orientation in our portfolios currently given the volatility you're seeing >> when it comes to that consumer, we know that consumer

spending in that gross domestic product, that famous formula makeup estimates are 70% gdp >> yep >> how critical is it for that consumer to remain confident and continue to spend in order for this market and the economy? we know that they're not the same, to move up from these current levels >> well, i think it's critical and, you know, i think the underlying health of the u.s. economy still looks pretty strong here. so, when you consider what's happening in the markets, right. we had a 16% drawdown in the s&p 500 here worst december since the 1930s so, i do think that most of the damage is done here in terms of market declines. that doesn't mean that we will turn around very quickly so, we're about three months into this correction from the high that we saw in october and bottoming is typically a process. so, i foresee the first part of the year as a continuation of

what we've been seeing lately. i don't think we'll have much more in terms of declines, but i think sort of flat, unrewarding markets with a lot of volatility we think that the pieces are going to come together to get more bullish in 2019 and it will take a while >> so, those are the kind of broad ideas that you have. so, let's lay out a strategy if you're an investor and you take that scenario that you are predicting will play out in the first part of the year, how exactly should investors be positioning now and what should be going on shopping lists and what kinds of opportunities have to present themselves before you deploy some of that cash to get back in the market >> so, i would be crouching in defensive position right now >> even with valuations the way they are right now >> yeah, yeah. so, i mean, we are overweight cash we're neutral on equities. overweight fixed income, real estate, commodities. as i mentioned, i do think we'll

see an inflection point next year when it will be time to get more aggressive. you want to own things like small cap and emerging markets the sign posts we're looking for clear signs that the fed will pause. clear signs that the dollar has peaked and is starting to decline. you know, i think the global slowdown is going to be broader in the first half of the year. we want to look for signs that global growth is bottoming and, of course, earnings are hanging tough after the gangbuster results that we saw last year, we still want to see signs that earnings are going to rise in 2019 >> one of the things that we have been asking many of our guests on air over the course of the past few weeks, we noted in the cnbc fed survey that more and more respondents expect a recession in 2019. not everybody. just shy of a quarter of them. how do you feel as a money manager? do you feel that we are destined for a recession any time in 2018 >> i still judge the risks of a

2019 recession is very low i mean, the key indicators that we focus on in terms of, we have our recession dashboard. the yield curve, the conference board leading indicator and high yield spreads and initial unemployment claims. so, i mean, the one that is a little bit concerning at this point is the yield curve, but it's really an inverted yield curve and even then a long leading indicator. once it inverts, you're looking at least a year. and the markets don't really respond to recession risks until about six months before. my sense is that we still have one more up leg in risky assets. and we still have at least a year plus before the end of the economic cycle so, i wouldn't get too bearish here >> no recession until 2019 thank you very much for that. let's find out what is going on and trending. what are we going to be talking

about today. frank holland. i'm not going to call him francis any more >> you can do it >> i know him well >> moving on start with president trump just when you thought he couldn't surprise you again or couldn't surprise you his tweets he has taken thrown back thursday to a new level. check out what he posted on twitter late yesterday ♪ farm living is the life for me ♪ >> president signed the farm bill by tweeting out a video of him singing the theme song to the '60s sitcom "green acres." mullally tweeted, if you guys need me, i'll be in a hole in the ground >> i remember watching it because my father loved that

show we used to watch the reruns on nick at nite or wherever they were i remember that theme song in my hand >> i can sing the whole song i'm not going to well, apparently oat milk is a thing and it has fans and those people are now facing a crisis this holiday season a very serious edition of trending oatly announcing it's out of stock until january 9th. they're paying more than $1,200 for a pack on amazon they are in the process of fact. so this doesn't happen >> it was a thing for a while about whether almond milk is actually milk. whenever i think of oat anything else that's not dairy milk i

think is it really milk? >> never knew this was a thing but online people say it tastes better than almond milk and soy milk. >> i'll try it once. here's a question. what is your favorite christmas candy and, more importantly, what is your least favorite? >> i'm a big peppermint bark kind of person if you want to call it candy, i've never been a fruit cake person so, all those little kind of candied, cherry looking things i'm not a fan. >> this story is for you candystore.com surveyed least favorite christmas candies and people overwhelmingly do not enjoy christmas tree nougat and christmas peeps. i hate marshmallows. >> that's peppermint bark, i like that. >> you're in a minority on that one. people don't like that cherry gorcordials >> it is like the cherry liqur.

>> throwback candies on this trending >> i'm not sure. i'm going to stick with the peppermint bark. frank, thank you very much for that holiday edition coming up the fed factor and housing. what rising rates mean to your mortgage an expert's take on that ahead. plus, the best bets to make in the new year. we're breaking out your playbook for 2019 when "worldwide exchange" returns after this break.

mortgage rates are on the move to the downside the average rate now stands at 4.62%. that's a three-month low joining me now is lawrence chief economist at the national association of realtors. lawrence, as we talk about interest rates, is it the defining, most important factor for housing right now? >> mortgage rates drives housing market and certainly the job growth drives and jobs is there. but it is the swings in mortgage rate that has impacted the home sales in recent months and very welcoming that the inflation expectation is coming down along with mortgage rates. >> lawrence, one of the things that we have been following in

higher frequency data. weekly mortgage apps is the idea that refinancings have come dow quite a bit. do we expect those with hitting three-month lows and cash out re-fis or do something else to unlock the equities in their homes? >> the overall net worth of homeowners during the recovery cycle during the past ten years. home valus have been rising, but the overall mortgage balance has not, which means there is a sizable equity that has been built up that can be used for cashout refi we may see some pickup in refi activity but interestingly the u.s. home owners have been conservative and not wanting to tap their home as an atm machine. so, in a sense, homeowners are in a much healthier situation. but if they could, they could refi and take the cash out

>> before we let you go, we know there have been pullbacks in very hot parts of the market here in the united states. what is the outlook for the spring selling season in your mind given what you know right now? >> with the mortgage rates falling recently and remains stable at this point, i believe that there will be a rush of buyers come spring buying season the question is whether especially on the mid-price points or moderate price points sufficient inventory to supply that demand. on the other hand, planning of supply >> the middle market is where we have to watch. lawrence, thank you for joining us this morning on mortgages and interest rates >> thank you. coming up next on the show your year-end playbook what is in store for your money as we close out a very volatile 2018 stick around we'll be back after this

festive music, but it is dark and stormy outside in the new york area. if you live out here, you know what i'm talking about driving into work this morning was tough. a lot of rain. be safe out there if you're on the eastern seaboard of the united states. well, checking out the futures market this morning for stocks we are seeing some marginal gains. the dow slated to open up by 43 points if we hold these gains to the opening bell the nasdaq up by 31 after steep losses the last few days let's brin we have been asking a lot of folks, is there a recession in 2019 what is your take? >> half of ceos expect one in 2019 they are really dismal folks >> are you that dismal >> no.

it's -- we can't forecast a recession, right i mean, i think the problem that everyone is bugged with is the expansion can't go on for more than ten years it never has so, something is going to go wrong. >> so, the unprecedented nature of the bull run. but everyone says, bull runs don't die of old age so, what exactly -- >> yellen said that. >> right >> well, we're going to test that >> we could test it. but let's talk about what exactly we see that is constructive why do you feel as though the economy is still able to sustain itself and not go into recession in 2019? >> well, assuming we get past the 16% decline from the highs of the year for dow industrials, that would take a toll on business and consumer confidence if it stays down here. there's really no -- the traditional reason is because the fed raises rates too high,

and they raise rates too high to slow the economy to fight inflation. but we don't have any inflation this time. i was struck by the press conference with powell saying that pretty much would he have a tighter policy right now and he said, no that means even how tight is tight? that means the fed funds rate going above 3% based on their reading of neutral their neutral is 2.5, 3. somewhere in there he doesn't see it going higher than that. i think that's pretty bullish for the economy to continue. >> so, we've mentioned a lot about the flattening yield curve. certain parts of the yield curve based upon maturity that have inverted technically is it something we should be watching and, if so, what is the most important part of the yield curve that we should be watching for for that possible indicator? >> three-month treasury bills and that's too complicated

that will not invert people use two-year note to ten-year note. i don't view that, i mean, you really want to ask is the inversion of the curve, does it mean that credit is tight? is fed policy tight? with a 2.5% fed fund rate, that doesn't sound like expensive money. the only thing that is different this time that makes me nervous and if you're in the housing sector, you're also nervous. is that this raising of the fed's fund rate to 2.5%, it send mortgage yields up more than they ordinarily would. long-term rates we're concerned about here for potentially slowing the economy. >> so, housing certainly a hot spot to watch. thank you very much for joining us this morning. and happy holidays to you. >> same to you. that does it for "worldwide exchange." a futures market that will indicate a slightly higher open and something to watch after a week racked up with losses

the countdown, midnight tonight, we'll watch that very one. i'm ofnef xt week. merry christmas, happy holiday season greetings to all of you out there. the woods? the value of capital is to create, not just wealth, but things that matter. morgan stanley

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kn morning trying to make sense of the s l selloff. don't forget the dow was up 400 on that one day. i think it's like 1,200 points since the fed. now down more than 5% since monday we'll show you continuing headwind that could drive stocks even lower although we're okay so far today. do we like these positive openings not everyone does. shutdown showdown. congress has until midnight to pass a spending bill at key agencies a live report from washington. finally nike posting a big

earnings beat. the china trade war has not hurt its business the stock soaring this morning is that a dow component? i knew that. friday, december 21st, 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. let's take a look at the u.s. equity futures at this hour on this friday morning and, guess what, a little bit of green. we haven't seen much of that lately we'll see if this lasts through the morning and, even more importantly, into the day and through the closing session. we're up b