joining us is richard turnill. always great to speak to you. thank you for coming in. pecting any shift from fomc, or will it be study as they go? richard: great to be here again. we are thinking the fed is going to continue to raise interest rates gradually. unlikely we get any shock out of the statements. the market has already repriced significantly between three and four hikes this year. toortantly, it is very hard envisage a scenario where the fed raises interest rates more than four times this year. we are expecting a continuation of study normalization of monetary policy. francine: what does that mean? a quite the repricing of treasuries? richard: you showed the two-year yields earlier. if you look at the short end of the curve, much of last year, the market was highly skeptical as to whether the fed would do what it was telling everybody. the markets have come around to that view. it looks to us that there is some value at the shorter end of the curve now. when you look at those two-year yields, for the first time in many years, you are getting compensated for i

. >>> when we come back, the global chief investment officer will be joining us richard turnill fromlack rock will be joining us >>> then later this morning gm cfo on the block. take a look at the volatility index. it doubled during regular markets. it is up again another 35% wow. volatility sitting at 50 yesterday at this time sitting at 17. we haven't seen days like this in quite some time stick around you are watching "squawk box" right here on cnbc you can't predict the market, but through good times and bad at t. rowe price we've helped our investors stay confident for over 80 years. call us or your advisor. t. rowe price. invest with confidence. >>> welcome back to "squawk box. futures take a look right now. we are in the red. we are deep in the red after a very red day yesterday the market looks like it's going to open down again and down big time triple digits. we're looking right now if the market opened today at this very moment, 640 points off nasdaq would open down 102 points down. s&p 500 would open 58 points down, 59 points depending on -- it keeps ricocheting back and

talk to you again soon >> my pleasure >> blackrock's richard turnill who is right >> the issue around going deep into u.s. domestic is this idea that you're underestimating the earnings power due to the tax change but we have started to see the s&p report and nobody really knows what the actual tax rate should be. the miss by walmart is actually 250 basis points on a tax judgment i think if you buy richard's story, you don't have the risk you basically have a situation where you have the full impact of the tax adjustment and this comes out of mid-cap companies >> you have made this argument before >> that is my question to him. why is small caps underperforming? >> well, i'm still saying that elastic band is winding up and getting ready to spring. because i've talked maybe 11 or 12 of those companies now in the mid-size and saying, what is a tax rate and they say, we don't know yet. we have not had the taxes interpreted for us by the irs and we are small so we're not going to make any estimates until we know what the code says. i think the upside in the back quarters is going to be in

would you pay the same evaluation in a rising, interest rate environment black rock's, here is richard turnillits earning power >> for the market at this point, there is a debate going on as where we are in the bull market and in sort of a glass half full or empty situation when you take a look at morgan stanley's view and blackrock's view earlier this morning, it was below 20 we are 21 in change. we are seeing some concerns as we are getting back to full trading. last week we entered a holiday short week we are back now. >> and there is walmart. earnings were missed they issued a full guidance that's at or below consensus that's what it is poised to do this morning >> yeah, the bulk is on walmart is really being thought over once again here especially when you see it online sales, ecommerce sales of 23% of the quarter as oppose to the previous quarter which is up more than 50%. is it losing momentum in the key metric where it is competing against amazon which is a theme this morning with the albertson's deal, it is all about the fight and competition and how you are poise against amazon where