tv Worldwide Exchange CNBC October 18, 2017 5:00am-6:00am EDT
market milestone the dow touches 23,000 for the first time ever and it looks poised to crack that high again today. your trading day set up straight ahead. deal or no deal. new signs of life fora bipartisan healthcare agreement. we have the latest from washington. and china's future we'll head to beijing where one of the most important global political events is underway it's wednesday, october 18, 2017 "worldwide exchange" begins right now. ♪ good morning welcome to "worldwide exchange."
i'm seema mody in for sara eisen. >> i'm mike santoli in for wilfred frost. >> good to see you >> great to see you. >> world is a busy place already when you see it this morning >> record day. we didn't close goabove 23,000, but we did hit it. >> it looks like the open we might get there. let's check on the global markets. look at the u.s. equity futures. they were leeaning slightly to the upside the dow indicated up almost 50 points that would put it above the 23,000 mark if we stayed around there. the s&p 500 just modestly above the s&p hit an all-time high yesterday. the slow, steady grind continues higher nasdaq also pointed slightly higher seems like the action for the dow, most likely ibm that had the stock popping let's look at the rest of the
markets. ten-year note, we see modest upside to the yield. back above 2.3% on the ten-year. it's been kind of compressed people have been talking about how we've not been able to liv state t levitate the ten-year note yield. as the do you tries to exceed 23,000 once again, look at markets in asia a strong session with the nikkei trading around a 21-year high. it has seen 12 consecutive days of gains closing higher by around 0.2%, 21,363 ahead of a key election this weekend in china, huge political event, the chinese party congress kicking off today. president xi jinping and that 3 1/2 hour speech. we'll get you more details let's look at europe early trade there. marginally higher. dax up 0.3%, right above 13,000.
looking at the broader markets outside of equities, oil continues to hold a bid. you see wti above $52 a barrel brent is also up almost 1%, above $58. natural gas slightly to the down side, a bit under $3, 1% lower there. you still see those headlines about hostilities in the middle east, but perhaps the crude oil trade is back above the sort of mid end of the range we've been in most of the year. look at the foreign exchange markets. dollar is also off its lows, not making dramatic moves. but seems like it is firmer across the board you can see especially against the yen right there. it looks like you have a bit of a bid. not too much going on in the way of currencies. not a lot of handicapping of central banks. looking at gold. been on the defensive, under $1300 an ounce i think it is a bit in the red, about a quarter percent lower.
1 1282 per ounce. there are new signs of life for a bipartisan healthcare bill lamar alexander and patty murray have reached a short-term agreement to help stabilize the health insurance market. sources telling nbc news that the deal would reverse president trump's decision last week to end billions of dollars worth of government payments to insurance players. the new agreement would extend the payments for two years the deal would make catastrophic plans available to anyone. president trump addressing news of the deal yesterday at the white house. >> lamar has been working very, very hard with the democratic -- his colleagues on the other side, patty murray is one of them in particular, and they're coming up and they're fairly close to a short term solution the solution will be for about a year or two years. it is a short-term solution so
we don't have this dangerous period >> the white house later clarified the president's remarks saying the administration is willing to work with congress to get a legislative solution but the president refuses to provide bailouts to insurance companies. the president took it a step further overnight tweeting any increase in obamacare premiums is the fault of the democrats for giving us a product that never had a chance of working. in trade news, nafta talks have been extended through the first quarter of next year after a fourth round of negotiations wrapped up in washington without a deal america's top trade representative, robert lighthizer criticize mexico for failing to make concessions. a federal judge in hawaii has blocked major parts of president trump's revised travel ban. the ban was set to go into effect today it would bar most nationals of syria, libya, iran, yemen, chad
and somalia. the ruling does not apply to parts of the ban restricting travel by certain north koreans and venezuelans. the whois says the decision whis the decision is wrong. >> ibm shares are up nicely on better-than-expected results the company beat on the top and bottom lines ibm did see its 22nd straight quarter of revenue declines. the cfo addressed those declining revenues on the earnings call. >> as we said at the start of the year, we reiterated in july, we said we would see improved pra jekt trajectories in the second half of the year, and talked about the drivers of that change third quarter performance reinforced that. while we have more to get done in the fourth, can shows we're on the right course and also shows that our confidence and strategy is well placed. >> joining us on the cnbc news
line to talk about these numbers is david hull from cfra research good morning >> good morning. thanks for having me >> what have you learned from -- about ibm's progress from the numbers? the stock has taken it well, maybe some people betting this might be a turn with a faster growing business getting more attention than the declining legacy ones. the stock does have a lot of ground to make up. it was at 180 several months ago. >> definitely. clearing the air, i think there's been misplaced fixation around the consecutive fears about a material stall, and tra ste stra teej tegic imperatives, but looking under the ibm hood to get a full overall feel for the stabilization going forward, q3 results reinforce that, that redefined trajectory
you know, again, work still has do be done to wrestle with those declines late last week, we had a q3 preview and highlighted four key points they needed to carry through high single digit growth rates, you got a surprise there, up over 11% that was largely driven by the cloud as they fully scale and embed some of the capabilities across all segments, and help automate growth second was just overall systems revenue. reversal from sequential declines you saw in q2 you saw 20% delta grew in q3 vital considering you had a couple weeks where that occurred in q3 where you'll probably see maybe 300 to 4$400 million lift.
and lastly, the stabilization in globalization bookings >> all right we'll leave the conversation there. to your point, the stock is seeing a nice pop here up 4.5% in premarket trade we'll see so you ibm performs throughout the day david holt from cfra research. there is a pair of economic reports and plenty of earnings september housing starts are out at 8:30 a.m. eastern at 2:00, the latest beige book report new york fed president, bill dudley, and dallas fed president, rob kaplan are speaking today on the earnings front, abbott labs, u.s. bancorp reports results before the bell. after the close, american express, ebay and united airlines don't miss wilfred frost's exclusive interview with wells fargo ceo tim sloan at 2:30 p.m.
eastern. more stocks to watch this morning. the s.e.c. is charging rio tinto and two former executives with fraud. the regulator claims the mining giant tried to cover up a multibillion dollar loss of african coal investment. in 2011 rio tinto purchased coal assets in mozambique for $3 billion and sold them for 50 million. rio tinto denies any wrong doing. credit suisse's largest shareholder is considering part of an activist plan to break up the bank harris associates rejects the bulk of the case, but the chief investment officer wants to look at parts of the proposal including sifting the investment unit out of switzerland. >> and shares of cree look to be trading low their morning. the company's earnings and
revenues were in line with estimates but the current quarter guidance falls short of forecast let's switch to canadian pacific. a better than expected third quarter results on higher shipments of crude oil and coal. the railroad operator is raising its full-year guidance expecting double digit earnings growth that stock up 2%. select comfort's third quarter earnsings and revenues missed forecasts they reported disappointing same-store sales the company blaming the impact on hurricanes that hit the u.s. and puerto rico last month. and in the pharma space, astrazeneca says the fda granted a priority review to its new drug application for tablets to treat breast cancer. linparza is for patients previously treated by chemotherapy the drug was approved in 2014 to treat ovarian cancer. still to come, what's next
for china? the most crucial political event is underway in the world's second largest economy we are live with what you need to know. the horse race heats up for the next fed chair we'll tell who is in the lead and what the choice could mean for your money when "worldwide exchange" returns. [bell rings] every year we take a girl's trip. remember nashville? kimchi bbq. amazing honky tonk? i can't believe you got us tickets. i did. i didn't pay for anything. you never do. send me what i owe. i got it.
takes place every five years president xi jinping who is expected to be re-elect the ed party leader gave the keynote address today. he said china will push ahead with fiscal, financial and foreign exchange reforms and also called for a continued strong role for state run firms. joining us from beijing is jim mcgregor, chairman of apco worldwide graeater china region what did you make of president xi's speech? >> wasn't a lot new in there other than him framing the next steps. this is his coronation where he really asserts himself as the paramount leader he talked about a new era for china. new era for the party. he said new era 36 times in his 3 1/2 hour speech. this is a time when he brings his own people on to the standing committee, the highest body and he consolidates his power.
he sees himself as a third transformative leader behind mao and dung his promises for reform, more openings for foreign companies t will fall on deaf ears when it comes to the american and other foreign companies in china they've been talking opening for the last couple years what we see is more and more closing, more and more tightening, fewer opportunities for foreign companies, and specific policies aimed at replacing foreign companies with chinese companies where china has the technology and the wherewithal. we'll have to wait and see if there's real policies put behind the rhetoric >> walk us through what happens next, especially with the key cabinet selections happening in the coming days. >> it's funny, i said this many
times, the american president comes in and your first term, you're powerful, the second term you're a lame duck the chinese leader comes in, first term you're a lame duck because all the team in important positions were appointed by those who came before you this is where he gets his people in throughout the bureaucracy on the highest levels of party. and it's the xi show he's a different leader than we had the other leaders were moving more towards a collective leadership he got himself named to be the core of the party. this is where he's going to -- it's all about xi jinping. all about xi jinping he's bringing strong one-man rule back to china >> jim, was there anything in his speech or do you expect to hear messages that are really directly intended for the american audience in terms of the ratcheting up of at least trade tensions and rhetoric with
the white house? >> no, actually this is a very domestic speech. it's very domestic he is sending signals out to people in the party and to officials that it's a new era, meaning my era top down he changed the party rules in the last couple years, so that you can't discuss party policy they were headed towards being like the ldp, where there would be internal party debate now it's top down, lennonism, be quiet and listen to the top, anti-corruption. he has a grip on things. with very little aimed at an international audience than a few platitudes on being open for more investment and being open for financial reform i do believe there will be more economic reforms after this congress, maybe not because he wants them, but this economy can't keep going without some reform still too much fixed asset investment, too much power by state owned enterprise, and they
need to move and build on the consumer economy >> well, the communist party congress is not over yet perhaps more details in the coming days, not just on economic reform but the appointments we're crucially awaiting jim mcgregor, thank you for joining us the streaming wars are heating up we will tell you which actress facebook just signed for its brand-new series and two of the biggest rivals in sports are doing some serious trash talking on twitter. those details ahead.
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welcome back to "worldwide exchange." harvey weinstein officially resigning from the board of the weinstein company. this comes after dozens of women have come forward over the past week and a half with allegations of rape, assault and sexual harassment against weinstein barry diller address the scandal at a "wall street journal" conference yesterday >> he's not going to be known for the good movies, not going to be known for anything other than this. and this is a very, very hard demarcation line where -- and -- where behavior, any kind of manipulative behavior is simply not going to happen. so i think it's an enormous
change >> worth noting weinstein has denied all allegations of nonconsensual sex. the head of amazon studios stepping down following sexual harassment allegations there roy price was put on leave of absence last week after reports that he sexually harassed an amazon tv producer it's time for the trending stories of the morning we'll start with movies. we have a title for the new hans solo movie, it's called "s ssol. >> it's amazing to me that the name is a deal >> that goes to show -- >> hungry for any detail and facebook is adding some serious star power as it pushes deeper into scripted programming. the social network inking a deal
with kerry washington to produce a show called five points. >> this is a telling sign of how facebook is trying to own content as netflix and hulu do the same it's time for social media giants to hone in on this space. >> user generated content was the story at the beginning i wonder if five points is about the five points neighborhood in new york a fajita felony making waves on social media. a texas man has been arrested for stealing more than a million dollars worth of fajitas from a juvenile correctional facility over the past decade the plot was only uncovered when the man took a day off for a doctor's appointment that's when a food delivery service tried to deliver 800 pounds of fajitas. workers turned him away saying
they did not serve ma fajitas. the delivery man replied he had been delivering the meal for the past nine years. the employee was fired and arrested for a first class felony >> 800 pounds, that's a lot. >> on wall street trading desks, they force you to take certain vacations, because when you're away, the fraud is uncovered if there is fraud. two of the biggest rivals in sports doing some serious trash talking. the red sox tweeting a video from the 2004 alcs when they beat the yankees with the caption today's basically a holiday. the yankees twitter account firing back by saying workday for us, game time is 5:08 p.m., if you're not busy obviously a reference to the fact that the yankees are still in the postseason. in2004, the red sox came down from being 3-0 to win four in a row. as for that workday for the
yankees, the bronx bombers took on the houston astros in game four of the alcs yesterday the yankees were down 4-0 and then roared back to tie and then go ahead in the game thanks to aaron judge and gary sanchez the yankees did win 6-4. the series is tied at 2-2. game five is this afternoon also in the bronx >> quite the comeback for the yankees. >> best part it was a 5:00 p.m. game, so i could actually watch it >> there uf you go >> the chicago cubs took on the los angeles dodgers in the nlcs last night the dodgers continued their dominance beating the cubs 6-1 l.a. takes three games to none lead in the series game four is tonight in chicago. that's your sports wrap up. still ahead on "worldwide exchange" a look at the top headlines and a round up of global markets
and the race tightens. we'll tell who is in the lead to bemeheco t next fed chair. "worldwide exchange" will be right back obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances.
by hurricane harvey. your help is urgently needed. dow 23,000 the blue chip average touches another milestone. more on the record setting rally straight ahead. fed finalists. the president nears his decision for a central bank ahead what the choice means for your money. and big blue beats shares of ibm are on the move
following better than expected quarterly results. it's wednesday, october 18, 2017, you're watching "worldwide exchange" on cnbc. good morning welcome back to "worldwide exchange." i'm seema mody >> i'm mike santoli. >> good morning to you let's check global markets futures are pointing to a higher open so yesterday, of course, the big story was dow hitting 23,000 we failed to close above that record, but it looks like remay touch that record and we may be above 23,000 today the dow up 42 points the s&p up 1 point, and the nasdaq up slightly rising yields has been the story over the past two weeks. that continues with the yielda 2.32%. look around the world.
asian equities had a slight upside bias. let's see how they are the nikkei just marginally higher and shanghai was up about a quarter of a percent south koreamarginally lower. the u.s. markets did have a positive day yesterday, the dax up a half of a percent france and the uk also up. just slightly to the down side, italy and spain. let's look at broader markets starting with commodities. oil, you can see there, marginally higher at 52.02 for wti crude. ice brent crude at $58.27. geopolitics seems to be the big driver this week those tensions between iraqi and kurdish forces certainly have played a role in driving oil prices higher. look at currencies the dollar, for the most part, has been trading in a tight
range. here to date, stronger against the euro at 1.17, and against the yen, 112 the pound slightly weaker at 1.31 look at gold, interesting story playing out there. we've seen some weakness in the gold market. yesterday it was down 1.3% today down 0.3%. just about $4. keep an eye on gold trading at 1,282. the other base metals like it, copper continue to hit new highs. >> industrial metals, levered to the global expansion are doing well i thought you were going to say bitcoin. >> we'll get to that in a bit. president trump will meet with janet yellen tomorrow as he nears a decision on his choice for fed chair. let's get to steve liesman for more on the race for the top job. >> like the olympic finals here. president trump saying he will pick his nominee for fed chair in a fairly short period of time janet yellen, who trump will
meet tomorrow, is one of the five candidates under consideration and the president said he likes and respects them all. here are the latest market predictions. jay powell seems to be leading the race with a 38% probability. followed by stanford economics professor john taylor. reappointing fed chair yellen at 23%. kevin warsh whose star is said to have faded. my reporting was that his star was never that high. 21%. and gary cohn, once the shoe-in for the job, down at single digits, 6% these odds reflect the latest media headlines. i think they're kind of worthless and not adding a lot of new information it's harder, but maybe a more informative way to do it is puzzle through who wants what and who is whispering in the president's ear. president trump would appear to want low rates and high stocks those are pro yellen and powell ideas. pro deregulation which is leg
yellen and maybe powell, taylor and warsh are the candidates for that the gop congress, they would be not yellen, though powell, taylor and warsh would come in and they want a rules-based monetary policy that would favor taylor democrats in congress would want dodd-frank, they want yellen in that regard. and they favor current policy framework. they said the key point concerning the turnover in fed personnel is not whether the new board members are hawks or dovs but rather they'll favor a different approach to policy that's from natwest markets. there's an idea, are they hawks or doves nobody care goabout that, they care about people coming in and saying we want a whole different
way, a rules-based one that would be warsh and taylor, but that could lead to a higher policy rate. >> what is interesting to me is powell's candidacy, maybe the one in the lead now. it's continuity, but not janet yellen so is there a sense out there that the president does not simply want to reappoint janet yellen >> well, i think two things. first of all, any president would want somebody in the chair testifying before congress who is not going to criticize the president's policies and, in fact, might favor them so if the question from the congressman or congresswoman is what do you think about these tax cuts if janet yellen is there, she may say if they enhance productivity it's good where warsh may say tax cuts are
good for the economy and they boost growth they get that. this president who is more likely to say i put this person in, rather than reappointed -- i think reappointment would be seen as a defeat >> what about the thoughts of neel kashkari being in the mix >> that's not on >> not on. >> that was a non-starter. i guess a wealthy well-respected investor brought that up i don't think that's happening i reported, and i was able to say, he's not even under consideration. >> you made a case that low rates and high stocks, that's what president trump wants if he wants that, why not just stick with yellen? the stock market has done well under her lead >> there's a lot to be said for that i believe if you put up the list of who is under consideration, i think i have not actually counted it out, janet yellen's experience on the federal reserve is greater than all of those combined
she has been at the fed since the early '90s she would be seen as a steady hand, continuation of policy comfortable to the markets markets hate changes, as you reported more than anybody else. that's an issue. you make a good point that janet yellen would be somebody who would continue this gradual -- it's interesting to point out, she was criticized for being too dovish when she took the chair's job. she's the first one to raise rates in ten years, she started the process of reducing the balance sheet from what i can tell, it's been managed well >> a slight irony to that point, these rules-based folks who would get in there with a new framework and say we should tighten faster, they might do nothing but come close to what the fed itself is saying for next year. if the fed on paper says we're doing three next year -- >> here's your morning wonk fest, 5:37 a.m. eastern time so taylor has this formula
the thing that economists are debating is does he go in and change this formula to allow for what they call a lower neutral rate in other words, the idea that the right rate for the economy is lower there's a big debate over which taylor rule, a 93 taylor rule, a 99 taylor rule have a little more coffee, folks. i apologize inned a vachb advane some of those rules lead to higher rates unless you go back in and alter what is considered to be the neutral rate the other thing about it, taylor is still working in a framework of high unemployment creates low inflation and low unemployment creates high inflation it's not a very different framework but the trouble is many people believe taylor's rules would lead to higher rates. >> thank you very much >> thank you >> the next couple weeks we'll close in on a decision let's talk more about the fed race joining us is larry mcdonald from acg analytics, editor of
the bear traps report. good morning how does all this filt neer int market expectations and what investors have to worry about based on who the new fed chair might be. >> you, steve and seema laid it out well warsh has collapsed. taylor -- the moment taylor hit the tape, we had 2 1/2 basis points higher yield on tens. so taylor's view is more hawkish, more of a threat to the market i think the thing to take away here is that the tax cuts have been underpriced in terms of expectations you have the hurricanes and a big stimulus package that could come in the fourth quarter you have a taylor, powell or warsh, then a feedback loop from a dollar that collapsed this year that's feeding the global
economy, as you pointed out with commodity prices, feeding back to the united states so the whole thing is a cocktail that's going to come together in the fourth quarter and i think the fed is going to get surprised by this cocktail >> a lot of names in the mix if yellen gets the job as fed chair or reconfirmed, how would the market respond >> bonds would rally because expectations have been drifting towards a surprise. i'm in the camp and a lot of people are in the camp that trump wants a practitioner, somebody who's been outside of the academic sphere. yellen, as steve liesman pointed out, has great experience in the fed and on the academic side but has never taken professional risk warsh has taken professional risk i think trump wants someone like that most importantly, trump wants
his own person that's working with randy quarrels, who is the head of regulation in the fed now, and mnuchin so i think behind the scenes, the white house is concerned that if congress doesn't move forward on tax cuts fast enough, they want to control the regulatory regime to stimulate the economy that way >> this cocktail that you talk about being mixed up for the fourth quarter, you're basically saying you may get a bit of an acceleration in growth and the market saying, wait, is the fed behind the curve is that what we're looking at here >> yeah. maybe catching up. right now expectations where the fed is in terms of the dots, and where the market is in terms of expectations is wide it's like 2 1/2, 3 hikes differential so the fed may be right here, but the market doesn't believe they're right. that's why they're behind the curve. >> that's been the story for a
while. we'll see how that plays out larry mcdonald, thank you very much >> thanks. some stocks to watch this morning. ibm shares are jumping the company beat on the top and bottom lines ibm did see its 22nd straight quarter of revenue declines. the cfo addressed those declining revenues on the earnings call. the s.e.c. is charging rio tinto and two former executives with fraud. the regulator claims the mining giant tried to cover up a multibillion dollar loss of african coal investment. in 2011 rio tinto purchased coal assets in mozambique for $3 billion and sold them for 50 million. the sec says the company inflated the value of the assets to hide the loss and raise money from u.s. investors. rio tinto denies any wrong doing calling the case unwarranted. >> and shares of cree look to be trading low their morning. the company's earnings and revenues were in line with estimates but the current quarter guidance falls short of forecast
it is down more than 3%. coming up on the show, is goldman sachs suffering from an identity crisis? today's must-reads are ahead first as we head to break, take a look at early trade in europe. marginally higher across the board. france up 0.4% similar move in germany, above orwi e "wlddexchange" comes back in a minute. i love you, basement guest bathroom.
welcome back to "worldwide exchange." time for our must-reads, stories catching youour attention. my pick is in the "new york times," it's titled a road map for catalonia. i want our proud pragmatic catalan spirit back. i want to us get back our desire for broad consensus and to reject strategies that seek to impose one group's idea over another's. strategic agreements on nationwide issues, we must take better advantage of our energies and channel them towards our objectives or economic and social progress. this is a snapshot of the overwhelming sense of national pride that many catalonians have in a time when there's a standoff between catalonia and madrid if no terms are made in the coming days or months, you wonder what that means for the broader sense of pride >> sure. >> that spain would have >> would this be read as
conciliatory, or is this just kind of saying, no, no, we want to be recognized >> i think it's a sense of recognition and this pride for catalonia. >> interesting that's a fascinating story that was quiet for so long. >> slowly getting more speed. my pick is in "the financial times. goldman sachs suf an i goldman sachs suffers an identity crisis. making the case it's not a cyclical thing the humbling truth for goldman is that u.s. retail banking has become not only more reliable than investment banking but more profitable jpmorgan's balance sheet is three times the size of goldman and it made a 19% return on equity in the quarter compared to gk oldman sachs' 11%. the market reacted negatively yesterday because there is a nagging sense that they
overcommitted to areas of wall street that may not come back. gaper says it is what the old jpmorgan went through, an identity crisis in the '90s, which led them to merge with chase manhattan. >> so this brand reorganization. goldman accounting for 44 points on the dow yesterday we are approaching the top of the hour. that means a team at "squawk box" is getting ready. andrew ross sorkin is in new york with a look at what's coming up. good morning >> good morning. we have a big show i don't want to oversell it sometimes i think i say it's a big show, but this is a big show we have richard branson on set richard has been on "squawk" many times, often we get him skyping in from neker island or outside his home in london today we have him in new york. his new autobiography is out we'll talk to him about his life and all of the entrepreneurial
efforts he's pursued but also drill down on his newest move. we talked about it here. he brought it to us live, exclusively his investment in hyperloop one. now called virgin hyperloop one. senator david perdue will speak with us. we will talk tax reform, maybe get inside baseball about who will be the next fed chair and the ceo of robinhood, wes moore will join us it will be a good conversation >> exciting times. richard branson, there's a new cruise line that virgin is working on with bain capital i would be interested to hear how that's going that's supposed to be for millennials specifically cruises generally for the aging demographic. >> what? it's true. >> becky is sitting here -- >> average age on a cruise, 55 >> have you gone on a cruise >> i have not. i'm going on my first one next year >> we'll await your review
>> becky is asking me if i've been on a cruise i have not >> me neither. >> i'm not a millennial either we'll talk to richard branson about that >> andrew said they'll drill down on the hyperloop story. >> i liked that. >> i'll take whatever i can get. >> all right see you in a bit still to come, the dow on pace to open at 23,000 your trading day set up is next. and later today, don't miss wilfred frost's exclusive interview with tim sloan that's today at 2:30 ete oasrnn "power lunch." we'll be right back. your brain is an amazing thing. but as you get older, it naturally begins to change, causing a lack of sharpness, or even trouble with recall. thankfully, the breakthrough in prevagen helps your brain
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hans olsen did you expect dow 23,000 in 2017 >> no. i was expecting mid single digit returns, i'm happy to get more than that, but a lot more than i expected >> the cliche is we pulled forward some returns from next year, when you have a better than expectexpect'd year. >> you know, we all talked about how september and especially october can be seasonally weak times for the market that has not been the case this year. later today we'll get the beige book i think it will confirm that the economy is in good shape which mean fts eas if the earnings ho, we'll hold these gains for the year we may get more volatile towards the end of the year, but we'll hold the gains through the end of the year.
>> on the fed beige book, can this market withstand another rate hike in december? >> i think so. i think we're well beyond the point of worrying about one more rate hike toppling things over indeed, we have commenced shrink the balance sheet this month we seem to be doing fine now i think the beige book will show that. >> it seems the debate has shifted to not are things good, the market recognizing the positives, but where are we overall in this cycle? just how much longer can we expect things to actually reward investors because of the gains to date. also so much has gone right for the markets in terms of global expansion and credit markets being so calm. >> that's the trillion dollar question where are we in the cycle? i think this is the -- this bull market is the second longest on record going back to the 1930s this economic cycle is fourth or
fifth longest going back to the late 1880s the question is in front of investors minds. i think we got another 18 to 24 months in the economic cycle before we have to worry about what comes next. ie a slowdown. >> or worse. >> or worse. we have just come out of an earnings recession, which is rare, earnings recession outside of economic recession. this is the tailwind pushing stocks along at this point i think we have more to go there. >> talk to us about technology would you allocate more capital into technology on a day where ibm is up 4% on what seems to be better-than-expected earnings? >> i would be more interested now in value stocks than i would over growth stocks they have so underperformed. i look at ibm as a value story with six years of declining earnings
maybe this quarter they break that trend that's a good value story that maybe is becoming something else >> what about the inner play of markets and policy expectations. we might get a patch on the healthcare side and the story remains the hope hanging out there of something on taxes. >> right news this morning on the potential deal on healthcare, i would not confuse this with necessity, and sanguine on systemic tax reform. >> you're not. >> no. maybe a cut in the rates, but any type of reform is hard to see in the juncture. there's not the bipartisanship you need to get something like that done. >> all right thanks for being with us premarket trade, looking up. >> twe have u.s. bancorp and eba
good morning the dow touches 23,000 for the first time ever and looks poised to crack higher again today with another new high ibm will give the dow a boost. the dow sharply higher after the company beat on the top and bottom lines and in washington, new signs of life on this time a bipartisan healthcare agreement a live report from the capital it's wednesday, october 18, 2017 "squawk box" begins right now. ♪ live from new york where business never sleeps, this is
"squawk box. good morning welcome to "squawk box." we're live from the nasdaq market site. i'm becky quick along with joe kernen and andrew ross sorkin. joining us for this hour is ambassador ed burns. great to have you. >> great to be here. we have a lot to talk about. let's look at u.s. equity futures. as joe mentioned, the dow crossing 23,000 for the first time ever during yesterday's trading session. it ended up closing just below 23,000 as you can see this morning the dow is indicated up by 65 points, which would put it well above 23,000 s&p futures indicated up by 2 1/2. the nasdaq up 6 points the dow