Good morning. Welcome to Worldwide Exchange. Im sara eisen. Im wilfred frost. Good morning to you from me as well. Lets check the Global Markets after another solid day on wall street took the dow up not quite to 20,000. So close. Above 19,900 for the first time. Futures not doing a whole lot. The nasdaq yesterday stood out. Technology finally caught up after weeks of underperformance with the nasdaq surging a percent. Dow futures down 8. S p futures up 1. Nasdaq futures up 3. A lot going on today, including the fed decision. News conference from janet yellen, dot plot from the fed, economic forecasts as well. The tenyear treasury note yield is sitting at 2. 44. Were sort of within the range, towards the higher end of the range of where we have been. Bonds look like a sell. The stock market continues to be a buy. The dow 100 away from 20,000. It is slightly down at the open. The bank of japans tanken survey showing an uptick in japans biggest manufacturers, in line with expectations. Not moving the yen at all. The dollar hit a tenmonth high against the yen on monday. Since then it slitted a bit. The dollar treading water across the board today as we approach the fed decision. Asian trade as a whole, it is mixed to down. Shanghai down about a half percent. Globally the risk sentiment is one of just pausing. If anything theres a tilt to the downside on the european boards. Early trading indicating a pause in the strength weve seen in european markets lately. Kind of small. The dax down a quarter percent. France down a half percent. Italy is now flattish. Spain down 0. 8 . Maybe some caution ahead of the fed forecast, the News Conference and the tone from janet yellen. Feel like that Interest Rate increase is baked in. Its a question of how aggressive they want to be when it comes to forecasting next year. The thing on that that i would add is last year we were expecting our first rate hike. We got it. We were also expecting by this time this year we would have a downwa downward risk of rates. Now, if we dont get that kind of big risk event again, maybe we will be back to three or four hikes next year. P not necessarily the same playbook in terms of markets. China deval yvalued their curr. Oil has been moving the other way. Emerging markets current sis took it on the chin. A lot happened last year that spooked the market. Youre right, a lot is on the forecast for four rate hikes that the fed made for the following year. Well see what they make this year. Theres also hope, unlike last year, of fiscal policy, which is better. Which give the it more room for hikes. True. If you missed out on the rally and the dow goes up to 20,000, you can see the hats come out at the New York Stock Exchange what do you do . Thats a milestone but it makes the front pages and indicate that maybe we have a little bullish, or maybe its justified. Maybe this is a completely new outlook. The sevenyear bull market is not tired because we have a fresh burst of stimulus coming from a republican and trump controlled congress. Certainly the tech stocks joining none the rally. Broadening out. Broadening out. Rotating again. Knock stock left behind santoli said. And if the fed clamps down on inflation and we get this higher growth type environment, those stocks dont get derailed by higher rates. The question is do they get retailed by trump . Well see how that meeting goes today. Big focus on the fed and that tech trump meeting today. Lets round markets off with the other asset classes. Oil prices soft today. Very strong on monday. Flat yesterday. And they are down about a percent or so today. 52. 3 for wti. The dollar slipped a bit earlier in the week. Broadly flat yesterday. Today not doing much. All eyes on the fed. Particularly the forecast for next year. Gold prices this morning are a little bit positive, up about 0. 3 . To todays busy agenda its dominated by one event, that would be the fed decision on Interest Rates it comes at 2 00 p. M. Eastern time along with those members forecasts. Thats followed by Janet YellensNews Conference at 2 30. The countdown clock for cnbc is up, 8 53. 40. Stay here on cnbc for all of it. You dont have to watch the clock for all eight hours. You do. You have to watch the clock for eight hours, 53 minutes, 32 seconds. 8 30 a. M. , Producer Price index a nice read on wholesale inflati inflation. Retail sales at 8 30. 9 15, industrial production, 10 00 a. M. , business inventories. President elect trump will hold a roundtable summit with tech leaders today. Among the intended attendes aes are tim cook, sandberg, jim bay soe bezos. One noted person not attending, is dorsey of twitter. Maybe saying im not going to go because its a conflict of interest, but apparently not invited. Ginny rometty announced her firm plans to hire 25,000 new collar employees. She says that the new jobs will come over the span of four years including 6,000 added positions in 2017, next year. The company will invest 1 billion in retraining and developing u. S. Workers over the same time span focusing on vocational education. Its interesting here that she is coming out. Clearly ceos know what trump has promised voters and knows what they want to hear about creating jobs. Looks like well get that if she gets her way, the conversation turns to education, skills, and training new workers. She will be attending todays meeting hoping to urge trump to support some of the measures she writes about. Indeed, she will be there. Another appointment by president elect trump, he has tapped ryan zinke to serve as secretary of interior. The department employs more than 70,000 people. He is a proponent of keeping public lands under federal ownership, putting him at odds with some in his own party who favor their privatization. Hes apparently an outdoorsman. From montana. I think its more than 70 of federal land they control. Back to markets. Warning from the socalled bond king, jeff gundlock. Landon jodowdy has the details. Reporter he says investors should watch out for an s p reversal around Inauguration Day. Yesterday he said further rising treasuries would hurt the markets saying is the tenyear, if it goes above 3 t could start to bring into question some of the aspects of the stock market and the Housing Market in particular. The tenyear sitting just below 2. 5 . He said president elect trump could be bond unfriendly and that investors should embrace for a 6 treasury yield when four or five years. He said things could turn around after Inauguration Day when reality sets in, and that trump doesnt have a magic wand. He warns that dollar softness could be coming in the weeks ahead. To todays corporate news. Federal regulators dealing a blow to wells fargo. They determined the bank has not done enough to come up with an adequate living will plan. As a result, the fed and the fdic are placing new restrictions on the lender barring it from setting up new International Banking businesses or buying nonbank subsidiaries until it resolves the issues. This is the first time the fed imposed penalties under the living will. If regulators are not pleased with wells fargos regulators could impose fines. Penalties are not an issue for wells fargo at the moment. They could become a things if they dont hammer out things by march. Wells fargo fell about a half percent when the news came out. Back in may john stumpf said very clearly were taking action such that in october were confident well pass that. Clearly they didnt. Its a surprise they found this. I think the investors attentions are elsewhere with the fed rate hike coming, but youre right, its important still to watch. In Global Financial news, italys bmps confirming that the ecbs rejected its request to raise capital. Th the ecb told the bank a delay could cause further deterioration in its liquidity threatening its survival. The monte dei paschi board is meeting today to decide whether to launch a lastditch effort to raise cash. Part of the unicredit news yesterday, the biggest italian bank, this one, bmps is much smaller, the ceo of unicredit also saying in the press conference that he felt bmps would be sorted by the end of the year. Especially with this political limbo theyre in. They have to come up with some sort of package. They do. Then it goes back to the same issue that the greeks are like, hold on, guys, why are they allowed to do this why cant we . Theres a lot of political hurdles to get over. In deal news, some news to tell you about, Johnson Johnson dropping its pursuit of swiss drugmaker actelion. Reports say Johnson Johnson was unwilling to pay the price needed to seal the deal. Sanofi is reportedly in talks now. Theres a look at all three. J j up slightly, actelion getting slammed on the news. Coming up, well discuss d fed expectations next. Girl youre going to need me. Youre going to need us. All of us. Youre going to need our help with your water. Your air, your food. Youre going to need our determination, our compassion. Youre going to need the next generation of leaders to face the challenges the future will bring. And we promise well be there when you need us. And we promise well be there whentadirectv now. Stream all your entertainment anywhere anytime can we lose the all. Theres no cbs and we dont have a ton of sports. Anywhere, any. Lets lose the anywhere, anytime too. You cant download onthego, theres no dvr, yada yada yada. Stream some stuff somewhere sometimes you totally nailed that buddy. Simple. Dont let directv now limit your entertainment. Only xfinity gives you more to stream to any screen. Welcome back to Worldwide Exchange. Good morning. The fed widely expected to raise Interest Rates for the first time all year this afternoon. The big question is what will janet yellen say about the future . Joining us now to discuss this is paul donovan from ubs wealth management. How has the backdrop, rising stocks, bond yields and the dollar changed the outlook for what janet yellen will say and what the others will forecast this. This afternoon . I dont think it changed it terribly much. The fed is for now run by economists. The economists are going to be looking at the economic fundamentals. The economic fundamentals is you have an economy running well, so that dictates rising rates now and next year. The movements in the dollar and bond markets so far are probably not big enough to change the feds perceptions of the risks. Given quite a lot of expectations are baked in at this stage, could one of the surprises be president elect trumps reaction to any decision the fed makes . Do you think hes likely to comment on the fed does . Tweeter in chief. The risk of a tweet is something new. We have not had to worry about this before. Yes. This is relevant. In the good morning. The past we had that meant trump has been hawkish on Monetary Policy. I think thats a naive interpretation. This is a man whose business is built on leveraged money in the past. Its somebody who is very clearly not afraid of stimulus at the expense of a bit higher inflation. So i think that the interpretation of this could be quite significant. There are still two vacancies on the fed at the moment. There are potentially another four vacancies by the middle of 2018. Chair and vice chair are up for reelection. And there are questions about the very independence of the fed coming from congress. So the attitude of the president elect, i think, will be really significant here. Paul, can i also ask about the euro and where were heading, given that were expecting a hike today. Last week the ecb extended the timeline of the easing. Stark difference in the Monetary Policy were seeing in europe and in the u. S. , raising many questions as if we will hit parity soon on euro dollar. The euro bounced back a bit this week. What is your view of where that goes from here . Our view is that the euro is likely to remain relatively strong. Probably strengthen from here on in as we go through next year. Its a noisy currency pair, of course, but the direction is stronger. You have to remember, Interest Rates dont drive currencies. I wish they did my life would be easier if Interest Rates drove currencies, they dont. Theyre one of many, many factors. Think whats hatppened this yea. The u. S. Had rising bond yields. Europe has negative bond yields for the most part. The u. S. Has positive policy Interest Rates. Europe has negative policy Interest Rates. Euro dollar is basically where it was in january. So when you have all of that outperformance, the dollar can barely manage to hold itself together against the euro. If we dont get that degree of outperformance next year, fundamentals suggest the euro goes up. Theres an underlying buyer we dont know about for the euro. Paul, how many rate hikes next year do you predict . Two, though i think they should consider doing more. Theyll only do two. Got it well see what they forecast this afternoon. Paul donovan, thank you. Dont forget, you can watch coverage of the fed decision including that allimportant janet yellen News Conference here at cnbc starting at 2 00 p. M. Still to come, china making a not so veiled threat of retailiation following comments from president elect trump. Thank you for calling. Well be with you shortly. Yeah right. Xerox Predictive Analytics help companies provide a better and faster customer experience. Hello mr. Kent. Can i rebook your flight . Im here xerox Customer Care services. Soon to be conduent. Wait im here mr. Kent . But i keep it growing by making every dollar count. Thats why i have the spark cash card from capital one. With it, i earn unlimited 2 cash back on all of my purchasing. And that unlimited 2 cash back from spark means thousands of dollars each year going back into my business. Which adds fuel to my bottom line. Whats in your wallet . This is where i trade andrs. Manage my portfolio. Since i added futures, i have access to the oil markets and gold markets. Okay. Im plugged into equities trade confirmed and i have Global Access 24 7. Meaning i can do what i need to do, then i can focus on what i want to do. Visit learnfuturestoday. Com to see what adding futures can do for you. Welcome back to Worldwide Exchange. Good morning. Lets get you up to speed on the market action. Happy fed day, the trump rally has continued. Didnt quite get to dow 20,000 in yesterdays session. The dow added more than 100 points and closed above 19,900. Foug futures are under a bit of pressure, down 11. S p is up about 1. Tech up about 2 points in the premarket ahead of a busy day. The feature is the fed decision at 2 00 p. M. Eastern time followed by the News Conference of janet yellen at 2 30. Lets show you the tenyear treasury note yield ahead of that. We get some ppi data this morning, wholesale inflation and retail sales. 2. 44. You can see that climbup in bond yields is hovering around the mid 240s level. Well see if anything happens with the fed if it leads to more of a bond selloff. All eyes on the fed. Thank you. To politics, china sending a not so veiled threat to president elect trump today. Staterun media saying if the u. S. Leader wants to cause problems on the one china policy, beijing will take its revenge out on American Business in china. Eunice yoon has more. Reporter when trump first started calling into question the one xhchina policy, he was worried American Business would be a political football and there could be retribution. Today he has another reason to worry. The official media has been forecasting problems for u. S. Companies. In fact the global times, specifically called out starbucks. Saying the coffee chain could suddenly lose market share to its british rival here. And antitrust authorities are now reviewing Business Practices of an unnamed american automaker which would likely be slapped with a penalty soon. Ford says it is not aware of any investigation. Gm says it wont comment on that report. But it does adhere to the lays of the land. For both of these companies, including starbucks, china is a huge market for him. Howard schultz said he believes china would be a bigger market for the company than the United States. The American Chamber of commerce had said today that he was hoping there would be stability in this relationship, beijing through the official state media says it also wants to see a stable economic relationship. But it is sending a signal beijing will use its levers of influence if trump rocks the boat. Who else stands to lose from this besides starbucks . Well, i think specifically starbucks, also gm, ford, Big American Companies that rely on the chinese market. Another one that people here have been talking about, kind of almost like a sick bet, boeing. Because boeing has such massive business here. In 2016 is supposed to have about 11 billion in orders. The state media also had suggested that china might suddenly see more airbus orders than boeing if trump were to continue to question this one one china policy. Im sure that will come up today at the tech meeting in new york. Still to come, the top stories including the big fed decision. Plus many of the nations top tech executives will be meeting with the president elect this afternoon. We will take you live to trump tower for a look at exactly what issues are on the agenda. Good morning. Its fed day. We will talk expectations. Face time with trump. The titans of tech descend on new york today to meet with the president elect. And the force is strong with the fans. Star wars diehards are lining up for the premiere of rogue one. Could the spinoff smash Box Office Records . Youre watching Worldwide Exchange on cnbc. Good morning. Welcome to Worldwide Exchange. It is