good morning. happy friday welcome to "worldwide exchange." i'm sara eisen >> i'm dominic chu in for wilfred frost. we are starting your weekend off with taylor's swift single called "gorgeous." >> taylor swift's new single are not like they used to be >> i don't know i'll give it a chance to grow on me >> we are seeing action in u.s. equity futures after that late senate vote that cleared the way for reconciliation dow futures are higher, up 80 points s&p up 4.5 nasdaq up 12 points. the nasdaq yesterday was the only one to close lower. the tech selloff led the nas da down the dow and s&p finished in record territory yet again the party keeps going. >> among the reasons for the jump in futures, big news out of washington the senate passing a budget resolution late last night among prartity lines that final vote was 51-49. senator rand paul was the only republican to vote against it. this is a crucial step towards that president's goal of passing a tax plan for this year senator als will have to reconce their budget with a separate one passed by the house of representatives. a live report from washington in a few moments wrapping up that development coming out of washington, d.c. >> we are watching the horse race for the next fed chair. late yesterday politico reported that current fed governor jerome powell is the front-runner to succeed janet yellen bond yields fell on that report. economists say powell is not expected to veer that much from the current fed. i don't know how they know that. he's a governor, of course he votes with the current fed president trump finished interviews with the five candidates he's considering. a decision could come as early as next week politico has advanced the story on this, so they have some credibility showing that the president is leaning towards powell there are report that's treasury secretary, steve mnuchin, is leaning towards powell it is considered friendly for risk appetite stocks >> it's continuity, right? it's the idea that you have an existing governor, part of the system since 2002, and he's never dissented from the overall fed as a governor. >> as a governor you don't do that she appeal to both sides of the aisle. the democrats may be in favor of him, continuity from janet yellen, the economy is doing okay the republicans, he's a republican, he's got private sector experience. so they might be appealing to them >> private equity guy who has a lot of experience existing within the circulation of systems within the fed it's an intriguing call. just over the past few weeks we talked about kevin warsh and those predicted markets. >> that would have been a bigger uncertainty. >> right all of that playing into the discussion as we talk about, we do see asian equities now closing on this friday. you can see they're green across the board. the nikkei in japan, up for a 14th straight day. this is the longest winning streak for the nikkei since 1961 it's an amazing run. we have elections, we'll talk about that later on. the hang seng up bay percent the shanghai up bay quarty a qu percent. we're seeing a bit of positivity on the heels of yesterday's big day for the u.s. markets the dax is up bay quarty a quara percent. the cac up fractionally. >> dollar moving higher. we saw, if we look at the intraday chart of the dollar, a move up on that vote that bodes well for the u.s. economy, for the dollar trade. dollar stronger against the yen, up three quarters of a percent nice move there. also firmer against the euro at 1.18 oil prices, there is the intraday chart that's what i was talking about. you got that vote, you saw a spike up you also saw corresponding move in u.s. futures. the question is does this really pave the way and increase the probability for tax reform or corporate tax cuts, which is what the market is focused on. >> over the last couple of weeks, goldman sachs has come out saying there's a 65% chance that tax reform gets done. >> people are betting on it. >> yeah. >> and the big question is how much is it playing out in financial markets? >> right >> what happens the market if we do get it? does it sell off because it's baked in does it go higher as the treasury secretary says because it only adds more gains for profits and wages. >> he made the point if you don't get it done, you could see those gains dissipate. >> the threat. >> as for oil prices, oil and gold, oil is weaker again. watch this below 51 on wti brent down a half percent. just below 57. gold prices, they should be weakening because the dollar is showing material strength. and, y they are down 0.6%. today's wall street agenda just one piece of economic data, september existing home sales out at 10:00 a.m we'll watch that carefully after getting some week housing numbers lately fed chair janet yellen is the keynote speaker this evening at an event at national economists club in washington that sound like a good friday night activity >> i like it >> ge, honeywell, procter & gamble, suntrust reporting results before the open. later today an exclusive interview with ge's chairman and ceo, john flannery 10:00 a.m. eastern, "squawk on the street." david faber went up to boston to talk to him after a news-filled week his new strategy, how he plans to turn the stock around >> that's the key. this fall has been all about john flannery. he asked for time to develop a plan they'll put forth this whole idea of -- >> cost cuts >> we heard about the cost cuts, but john flannery is taking over at a time when a lot of shareholders are feeling bad >> the worst performer on the dow this year. down 25% >> whether or not you can get that stock turned around -- >> how much will he throw his previous boss jeff immelt under the bus? >> right >> there was that report in the journal about the second plane >> yeah. other stocks to watch today, paypal's third quarter profit rising 18% beating forecasts strong growth in mobile transactions helping results the person to person payment service, venmo, handled $9 billion in volume during the quarter. more and more people using peer to peer payment service. celgene halting trials on a drug to treat crohn's disease, the move follows a risk benefit analysis morgan stanley says the decision was likely based on a lack of efficacy for the drug. ncr's third quarter profits beat forecasts and revenues did fall short the maker of atms and payment processing technology issued a disappointing outlook for the fourth quarter national cash register is how i still remember that company. shares off by 10%. shares of intuitive surgical lower this morning that's despite the company reporting better than expected third quarter earnings and revenue. part of its sales beat due to deferred revenue results would still top forecasts. athena health plans to cut about 500 jobs it's also closing offices in san francisco and princeton, new jersey and the company is cutting its full-year revenue outlook. athena health is under pressure from elliott management which bought a 9% stake. e-trade's third quarter profit fell 3% missing forecasts. the online broker announced a deal to buy trust company of america which provides custody services and technical support to financial advisers. another stock to watch, skechers shares are jumping this morning. landon dowdy has the reason. footwear is big, but skechers, this is a massive move higher. >> shares moving higher after better-than-expected third quarter results thanks to its international business posting earnings of 59 cents a share, 16 cents above estimates. revenue coming in at 1.09 billion. the big beat comes thanks to a 26% increase in the company's international wholesale business and on the call, the ceo said they will remain committed to investing and growing the brand globally by increasing the worldwide store base to 6 if locations, including 187 international stores this as they try to compete with nike and others who have been the leader in the space. look at the stock, shares still on the run up more than 23% back over to you >> unbelievable move landon, you and i both know they're getting more into the golf shoes >> very big with children domestically here. >> that a big market >> it could be golf is all about whether or not you see growth in the game i know a lot of golfers i know use skechers golf shoes. >> thank you clothing subscription company stitch fix is going public the company charges customers $20 to receive five clothing items at home to try on before they buy stitch fix will list on the nasdaq under the ticker sfix according to the s.e.c. filing, the company had sales of nearly a billion dollars this year and posted a loss of just under 1 million. it had been profitable for the prior two years. back to the top story, the senate passing a key budget measure, nbc's edward lawrence has a look at why this matters and just how this will move forward. >> this is a big win for the republicans. first, they haven't had a major legislative win this year or during the trump presidency. this proposal, the budget passed almost easily. most of the republicans, all by one, voted for it. president trump tweeted out this morning congratulating senate majority leader mitch mcconnell saying this is the first step for a massive tax cut for the american people. what passing the budget also denies democrats the chance to filibuster a possible tax cut vote what this allows them to do is the tax cut vote to come in a procedural vote. so they just need a simple majority of 50 senators or more to getthe cuts through the only republican to vote against this was senator rand paul he's concerned that it would add 1$1.5 trillion to the debt over the next ten years still republicans even with the threat of that or the possibility of that are looking for a legislative win and it appears they got it here there were several amendments that passed with this budget one of the amendments simplifies the tax code or calls to simplify the tax code. another would increase the child tax credit that you could get. >> edward lawrence, thank you very much for that update. when we come back, japanese prime minister shinzo abe looks ready for a big win in the weekend snap election. we'll tell you why the global market is pangyi attention stay tuned "worldwide exchange" will be right back what started as a passion... ...has grown into an enterprise. that's why i switched to the spark cash card from capital one. now, i'm earning unlimited 2% cash back on every purchase i make. everything. what's in your wallet? or a little internet machine? it makes you wonder: shouldn't we get our phones and internet from the same company? that's why xfinity mobile comes with your internet. you get up to 5 lines of talk and text at no extra cost. so all you pay for is data. see how much you can save. choose by the gig or unlimited. xfinity mobile. a new kind of network designed to save you money. call, visit, or go to xfinitymobile.com. news out of europe, spain's prime minister will hold a special cabinet meeting tomorrow the government could trigger the process to activate article 155 of the country's constitution which would basically let it take control of catalonia's semiautonomous powers. in asia, japan is holding a snap election on sunday. is this going to be another landslide for prime minister abe, akiko >> prime minister abe took a gamble calling this election almost a year before it was scheduled. though many have him headed for a big win. there were two new political parties that merged in this election, including one started by tokyo governor you'uriko koi. neither were able to take advantage of the popular seat of prime minister among the key things is the consumption tax hike this was meant to pay down the massive debt prime minister abe is calling for it to continue, while some tof will be used to pay for preschool and high school. and koike said we need to hold off until economic conditions improve. that's raised further questions about japan's fiscal health. >> japan's deft levels are extremely high no one in the country thinks we have a sustainable fiscal situation. we're spending 90% of our social budget on the elderly, not so much on the young. that's why prime minister abe wants to push more spending towards the young for education, things like that it's a solid policy. the question is do you fund that with higher taxes or with cutting other spending and that, unfortunately, is not a debate that's happened in this election it was a missed opportunity. >> the bhar kmarkets don't seeme fazed by this. the nikkei ending up for a 14th straight day, the longest streak since 1961 >> i was going to say, as we talk about, we got word that the emperor of japan will abdicate any of this uncertainty playing out at all in the minds of people in japan overall? we know the markets rallied because of this, is there a sense the reform packages could move forward in a meaningful and smooth way >> there's going to be questions about that this comes down to how strong that political mandate is for the prime minister there's no question the ldp will maintain a majority in parliament but will they maintain the two-thirds majority there are also questions about the future of prime minister abe. keep in mind the leadership vote for the ldp party is not scheduled until september of next year. if the president comes out battered on the other end of this election, expect some members within his own party to start lining up to challenge him in that vote next year why did he call this election early? >> if you ask prime minister abe, he framed this as a referendum on the way he handled the north korea issue. his favorability rating ticked up as a result of the provocations coming from north korea. when you think about just three months ago his approval ratings were really plummeting on the back of two big scandals, influence pedalling scandals that really raised questions about his future his numbers started to tick up after the provocations from north korea. in terms of timing, he said this is the perfect time for him to go forward with that there were questions on whether key have a theresa may type of moment, getting a little too confident, but it looks like they will secure the majority, perhaps a two-thirds majority with the help of coalition partners >> all right we'll see what happens on sunday >> she brings up a great point about these are all gambles, calling snap elections >> we'll see what happens sunday akiko brought up an interesting point about north korea. a new warning on that country today. this time from the prime minister of singapore. the leader telling cnbc that ongoing nuclear aggression from pyongyang may potentially result in south korea and japan hosting nuclear weapons on their own soil the prime minister also commenting on president trump's approach to north korea as well. >> i think the president made his decision clear it's a form decision, we leave it at that i don't think it's the time yet to start new initiatives multilaterally with the united states, perhaps one day the time will come. singapore's prime minister is due to meet with president trump in washington, that happens on monday. still to come, the top trending stories including a brand-new way to brag. media mogul aryianna huffington unveiling a new app that allows you to do just that. what's critical thinking like? a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter. morgan stanley welcome back to "worldwide exchange." i'm dominic chu alongside sara eisen. it's time for our top trending stories of the morning selena getting a posthumous award. she is receiving her star on the hollywood walk of fame the star will be officially awarded on november 3rd, a day that the l.a. mayor is now calling selena day in the city of los angeles of course a big movie telling that story of selena one of the biggest -- >> i was surprised she already doesn't have a star. >> right >> tencent's newest game wants you to clap for cli these president xi jinping the game asks users to applaud his communist party address, and measures who can clap the fastest. the game has been played more than 4$400 million times president trump would love this. some users say they clapped more than 1500 times during the game. >> that might be fake news >> it sounds communist it sounds state controlled to me overall, i guess they play a clip of his communist party address, you have to hit a button or do what ever seems funny to me. aryianna huffington is teaming up with samsung to take your humble brag to the next level. they're creating this app helping users disconnect from the internet and telling your friends you cannot be reached. it's called thrive it can schedule times to be disconnected if someone tries to connect you while you're in that thrive mode, they'll get a text sent to them saying you're busy thriving the app will be released for samsung devices later this year. of course arianna huffington is the one who goes on about the whole sleep thing. you have to sleep more disconnect be more for yourself >> meditate and humble brags as well dodgers fans probably still celebrating this morning their team earning a trip to the world series l.a. beat the cubs 1 1-1 last night in game five of the national league championship series hernandez hit three home runs. the dodgers are making their first trip to the world sears since 1988 when they beat the a's. the dodgers will face either the yankees or the houston astros. game six -- >> is it going to be the yankees? >> if it is, it could be a big tv event, new york versus l.a. houston is a great story, after the hurricanes, after everything else it could be awesome to see those guys make it to the world series >> we find that out this weekend? >> it could be today could be this weekend. depends on how the yankees do tonight. >> still to come, one step closer to tax reform the senate passing a budget overnight. we'll take you to washington next you're watching "worldwide exchange" on cnbc. ♪ ♪ my ambition? helping people get what they want, understanding we're not in this alone, and teaching my kids that no ambition's out of reach. ambitions live everywhere. synchrony financial helps make them happen with data, insights, financing and technologies. ♪ ♪ synchrony financial. what are you working forward to? new fuel for the rally stocks set to open higher after the senate moves one step closer to tax reform. we're live in walk with the latest powell in the lead the president reportedly has a favorite in the race for the next fet chad chair. and earnings central two big dow components ready to report quarterly results today it's friday, october 20, 2017, you're watching "worldwide exchange" on cnbc. good morning welcome to "worldwide exchange" on cnbc. i'm sara eisen >> i'm dominic chu in for wilfred frost. it's a tgif. it's been one of those weeks let's get to the markets it's been an eventful one. check out what's happening with the futures. we're seeing quite a bit of green. the s&p opening up by 5 points, if things stay the way they are now. the dow up by 86 the nasdaq up by 13. after that big drop near the open yesterday, only to see things turn around and go towards record territory again those futures now showing at least a positive side to end the week >> the top story, the senate passing a budget overnight it is a crucial step that moves the gop closer to tax reform but just how much? cnbc's ylan mui joins us from washington so now what? >> they made even more mrog gprs than he thought they would this will allow them to pass tax reform without help from the democrats. typically the house and senate would get together and hash out a final version of the budget, but republicans are so eager to get this done and move on to the tax bill, they'll be skipping that step. they did some last-minute maneuvering, they found a way to increase defense spending later on, in return the house agreed to drop their request for mandatory spending cuts. one gop aide says this saves lawmakers weeks of technical negotiations now the house will probably vote to approve the senate's budget early next week. that will finally clear the deck for tax reform >> we should then follow up as quickly as possible to win the fights that can be won this year, so americans start next year understanding that their tax code is simpler, the tax code is fairer, opportunities are likely to be greater >> momentum is everyone on c evn capitol hill, and believe it or not, they may be ahead of schedule >> let's talk about this schedule, you said they're ahead of tchlt it a lot of pundits said they didn't think tax reform would get done this year what are the odds for it getting passed >> whether you put it at 10% or 9 90%, they were better than they were before this vote last night. so instead of the house and senate having to take a long time, all of these weeks to negotiate details, the house can come back into session they'll come back next week and pass this thing. we know that once there is a final version of the budget, that is when the weighs and means committee will release the details of their tax bill. this allows them to move forward to tax reform sooner than they would have otherwise >> i get your point it makes it more likely they can pass tax reform with all republicans, but that's proven difficult. they were also going to pass a repeal and replacement of obamacare with just republicans. there are dissenters, major splits, it still feels like they can't figure out if they want to increase the deficit or not, how they'll pay for whatever tax cut also happen, and where those individual brackets fall >> this is not a done deal by any measure. there are still many ways in which this could fall apart. some senators are saying wait a second, pump the brakes here this may not get done until 2018 it's notable that the house and senate came together last night and negotiated these technical changes to the budget that allowed them to move faster. so you see they've tried to say that this process is so different from the obamacare repeal and replace because they're working together last night is where you saw an example of that happening. >> ylan, sarah mentioned some potential dissension in the ranks there. what is the biggest thing beside some jawboning happening within the republican party, what could derail plans to get this budget deal and tack reform done by the end of the year? >> the budget deal so far looks good to go on tax reform many things could still derail this, including a lot of things on the individual side we focussed on the corporate side for our coverage, but things like ending the state and local tax deduction. the distribution of benefits who sees the biggest tax cuts, that's a big deal. how do we treat the international tax code what happens foreign earnings? there's still a lot of ways in which this can go down >> when do they release their proposal for tax reform. >> very soon, after the final budget is passed if that happens next week, we could see the tax bill soon. >> thank you very much for setting that up. the markets are reacting dollar stronger and so are stocks >> we are also watching the horse race for the next fet chai fed chair. reports say that jerome powell is the front-runner that put pressure on yields, then we saw the dollar move higher as the senate passed that budget blueprint with renewed hopes for the reflation trade under trump. >> the hang seng is up this morning, the nikkei continues to soar it's been on a hot streak going into the election, following the wall street rally and the weakness of the japanese yen early action in yueurope sugges a weaker day catalonia is a notable laggard in the session there as far as european equities. the latest there is that catalonia wants to continue its independence and spain will crack down and put its authority or rule of law -- the best way i can describe this, if illinois tried to secede, and declare independence, the u.s. would have the legal authority to say no >> no, you cannot secede from the union. >> it's contentious and unfortunately violent and difficult, but it does look like that's where it's going. the broader markets overall, check out what's happening with the oil trade. wti crude, $50.70 the last trade there. off by 1%. ice brent crude off by a similar percentage point 56.74 the last trade there the currency side of things, sara mentioned the dollar/yen, we are seeing dollar strength against the euro 1.1805 dollar/yen, 113.30 as for gold prices, geopolitical tensions may be part of that mix. we are seeing gold prices off by $7.80, a half percent. 1282.20 the latest there today's wall street agenda just one piece of economic data, september existing home sales out at 10:00 a.m we'll watch that carefully after getting some week housing numbers lately fed chair janet yellen is the keynote speaker this evening at an event at national economists club in washington ge, honeywell, procter & gamble, suntrust reporting results before the open. later today an exclusive interview with ge's chairman and ceo, john flannery 10:00 a.m. eastern, "squawk on the street." i'm sure you guys will have a lot to talk about with regard to what ge's plans are. >> david is there at headquarters to have this discussion with the new ceo. let's talk more about the markets. ron insana joins us on set what a treat >> thanks for having me. does this mean steve mnuchin was right, that the market was trading off tax reform and it will go up if they can get there and down if they can't >> that's partially true the market has been going up on double digit earnings growth synchronized earning growth around the world, that's redundant, a host of factors reasonably positive including the prospects for -- i hate to call it tax reform, but the prospect for tax cuts for corporations if we talk about the way markets reacted to this this has been a market that's been up since the election notably so, just in the last month, this idea that the markets cannot be taken down even yesterday when we thought we would get a pullback, a headline comes out about washington, d.c. is there a sense now that there's still that buy the dip mentality among investors? >> that seems to be prevalent. as the "wall street journal" and others have been pointing out, trading volumes are extraordinarily low. one thing you don't love to see is a market going up on low volume that doesn't show a lot of conviction art cashin, who i have known since the days before the crash, honored the 30-year anniversary of that yesterday, said volume equals validation. sometimes you have concerns about the market thinning out, advanced decline lines not strong before the move, but generally speaking everybody is inclined to buy the dip. we haven't had one more than 3% all year long. >> the fed horse race, politico reporting that powell is in the lead the market take on that is great, continuity from janet yellen, someone that maybe can get by from both sides of the aisle. is that right? >> i think so. i wrote a piece last week, if it's not yellen, i'm probably selling, with the exception of j. powell. there's a slow unwind from the balance sheet, with the rate increases -- >> how do we know that >> he's voted with her >> usually you do vote with her. >> no you have dissenters. >> but those are presidents. i'm talking about governors. >> governors typically vote with, but he's closer to her perspective than john taylor or kevin warsh, both of whom believe in the taylor rule itself so there's a slightly more dovish tone to mr. powell's commentary versus those other two. >> do you feel the administration now, president trump and everybody in his inner circle feels or has in the front of their minds these decisions could have a royailing ef fiktf markets. >> the president comes from a background where low interests have been helpful in one respect or another hope ply that's not the way in which you pick a fed chair, usually there's a fill sphiloso underpinnings for it but if there's someone who raises rates more slowly than taylor or warsh, jay powell is the guy. >> he said he likes low interest rates and a weaker dollar. >> yeah. presidents typically don't say they like a weaker dollar. we've been in a -- >> he's a business guy >> he's not an exporter. except for his name. yeah weaker dollar under certain circumstances is fine. stronger dollar under other circumstances is fine. a weaker dollar here would be beneficial it helped the stock market the last several months. >> so risk on for powell >> moderately so at this stage of the rally, which is now not only, you know, starting back in march of 2009, it's a little long in the tooth. it's not like you will compiling into stocks. i think stock selection is key the market for now looks fine. i would watch the underlying technical deterioration, volume, advanced decline if those diverge, then the possibility of a correction, the likes we have not seen for a while, emerges again >> we will do that ron, thank you >> thank you >> ron insana. some stocks to watch today, paypal's third quarter profit rising 18% beating forecasts the person to person payment service, venmo, handled $9 billion in volume during the quarter. more and more people using peer to peer payment service. skechers is up this morning 23%. we'll see if that holds to the opening bill amazing moves for skechers. coming up, the case for activism why paul singer is out in the "journal" saying investors like himself are key to market efficiency unusual defensive activism you're wchating cnbc "worldwide exchange." 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 and actually improves memory. the secret is an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory. prevagen. the name to remember. right in the heart of the was in his financial crisis, and saw his portfolio drop by double digits. it really scared him out of the markets. his advisor ran the numbers and showed that he wouldn't be able to retire until he was 68. the client realized, "i need to get back into the markets- i need to get back on track with my plan." the financial advisor was able to work with this client. he's now on track to retire when he's 65. having someone coach you through it is really the value of a financial advisor. welcome back to "worldwide exchange." i'm sara eisen with dom chu. time for our must-read stories my pick in the "wall street journal," efficient markets need guys like me coming from paul singer. he teed off the big p&g proxy fight with nelson peltz, how close it came and how the index funds were deciding factors. great, index funs have power, but we need activist i vesters to ensure efficient markets. so who will do the work that theoretically creates efficient markets? this idea that the market prices things right because so many people are judging, factoring in the information. he said activist investing is one possible answer. that means using your voice and voting rights to maximize value for all shareholders in that light index funds should consider activist investors to be natural allies. pushing against the short-term thinking of activists, and says they're actually long-term >> there's a debate on whether index funds should be more active with regards to corporate governance you wonder whether that long standing spoken or unspoken rule about money managers siding with management unless there's a reason not to is a reason why some of these guys are coming up vocal. >> i think in that p&g fight, many activists were encouraged that two out of the three big index funds went to nelson peltz, if they had not, it would have skewed the vote my pick is in the "washington post." it is a message to congress, don't make the same mistakes we did in kansas. this is dinah sykes. she writes in 2012, there was a tax overall promised to be a shot of adrenaline to the heart of the kansas cit with the benefit of hindsight, we can say with certainty this promise was unfulfilled. in the following five years, kansas experienced nine rounds of budget cuts, stress on state agencies and the inability to effectively provide the core functions of government for our citizens as republicans in congress begin working to modify the federal tax code, i worry that tax reform done poorly could lead to a similar failure. so a lawmaker in kansas went through this similar process t didn't work out the way they thought. you have to look at all the assumptions, she says compromise and coming together on similar points is one way to get a deal done >> they'll have to hash it out. we're approaching the top of the hour the team is getting ready for "squawk box. andrew ross sorkin has a look at what's coming on >> did you talk about the peggy noonan column in the "journal" >> no. >> i'm adding to the list. if you have a moment to read peggy noonan's column, it's about the disposition of a president, and i would imagine no matter what side of the aisle you're on, you will find it fascinating. we have a big show this morning. we'll talk about this google/lyft deal, which has been on my mind google also has a stake in uber, and what it means in the battle for those two. there's didi, apple has a stake in didi. didi has a stake in uber and also lyft. so a lot of bedfellows and frenemies. we have a budget we'll talk about that, whether we really have a budget or not ken fisher will join the program. that's on the agenda >> all right see you then thank you. still to come, the senate just made tax reform a little bit more promising we'll talk market implications straight ahead. trust #1 doctor recommended dulcolax. use dulcolax tablets for gentle dependable relief. suppositories for relief in minutes. and dulcoease for comfortable relief of hard stools. dulcolax. designed for dependable relief. and i'm the founder of ugmonk. before shipstation it was crazy. it's great when you see a hundred orders come in, a hundred orders come in, but then you realize i've got a hundred orders i have to ship out. shipstation streamlined that wh the order data, the weights of , everything is seamlessly put into shipstation, so when we print the shipping ll everything's pretty much done. it's so much easier so now, we're ready, bring on t. shipstation. the number one ch of online sellers. go to shipstation.com/tv and get two months free. welcome back to "worldwide exchange." happy friday a look at dow futures, rallying about 100 points here. stocks are taking off after we got that senate vote on the budget last night. ylan mui said better than expected and ahead of schedule so far stocks are liking it. >> jay powell may be the next fed chair. >> mejurien timmer joins us what do you make of this market reaching record heights? >> the market has been firing on all cylinders all year in terms of fiscal stimulus, the odds have been between zero and 100, and then the markets overpricing it or underpricing it. we have gone from pricing in too much of an odd to pricing it none of it and now pricing it back in underneath that, fundamentals have been great. earnings up 9%, 10%. and probably the most important thing is that despite fed tightening liquidity positions have eased so there's a strong underpinning if earnings are growing and liquidity conditions are easing, that drives valuations higher. that causes prices to rise faster than earnings if that were to change, then we might have a situation where pricesize slower than earnings it's been the best of all worlds if we get a boost from the tax side or regulation side that could keep this thing going longer the caveat is if the fed decides to offset some of this still lis, if itli stimul stimulus, we may get a hawkish fed. >> jurrien, do us a favor if you can. break don't market rally for us in terms of how much is responsible for the earnings picture, how much is just the overall picture for the fed, interest rates who will be the next fed chair what will happen with the markets, the treasury, tax cuts. what's the biggest driver of the markets now? >> like i said, the two drivers are a global synchronized earnings recovery and china is very much part of that picture i see china as a driver of that global earnings cycle. that started first quarter of 2016 well before the election then the election brought on some animal spirits, that also caused valuations to rise. a key part of the puzzle is this liquidity conditions, financial conditions the fact they have eased despite three quarterly rate hikes in a row and a fourth presumably coming in december, and balance sheet reduction starting now as well, that's remarkable. if you think about fed tightening, it's called tightening for a reason. >> you're worried it's going to get more aggressive if we do see some fiscal stimulus >> it might. if the fed decides it will be inflationary, and it might well be if it happens eight years into an expansion, it may make the fed more hawkish that would cause rates to rise, that may have a negative impact on valuation not necessarily on price if earnings are growing faster, it changes the dynamic those are the key things i'm watching >> jurrien, thank you. >> ge, procter & gamble, those are the big ones today >> have a good weekend "squawk box" is next who knew that phones would start doing everything? entertaining us, getting us back on track, and finding us dates. phones really have changed. so why hasn't the way we pay for them? introducing xfinity mobile. you only pay for data and can easily switch between pay per gig and unlimited. no one else lets you do that. see how much you can save. choose by the gig or unlimited. xfinity mobile. a new kind of network designed to save you money. call, visit or go to xfinitymobile.com. good morning breaking overnight, the senate passing a budget bill that paves the way for tax reform are these guys getting it together we'll get a live report from washington president trump is reportedly nearing a decision on the next fed chair. the person that sits in the chair, i think we have new survey data on the most likely candidates u.s. equity futures, what happens if they get close to tax reform they're rising again this morning. we're awaiting quarterly results from general electric and procter & gamble the nelson peltz portfolio it's friday, october 20, 2017, "squawk box" begins right now. live from new york where business never sleeps, in is "squawk box. sfloo good morni good morning welcome to "squawk box." i'm becky quick along with joe kernen and andrew ross sorkin. you are look at strong gains for the futures. the dow indicated up by almost triple digits. looks like we'll open up 99 points if we open here s&p indicated up by six points after both the s&p and the dow set new records once again yesterday. we'll keep an eye on all of that on this last trading day of the

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