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tv   Worldwide Exchange  CNBC  October 9, 2009 4:00am-6:00am EDT

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"worldwide exchange." global equities, well, they're trying to nudge higher today. the ftse cnbc 300 nudges the words just up two points. european stock markets, a bit of a soggy start. we're inching slowly upwards. the futures are just going to open down. we've closed up around 1%, around those levels for these markets yesterday. the xetra dax, cac 40, smi all a little firmer. what's interesting, of course, is commodity stocks this morning are not really positive. mainly because the dollar has had some respite from comments out from mr. bernanke. they're reiterating the rates are going to stay loose for some time. it did help dollar/yen, we're at 89.29. euro/dollar, we've been up over 1.48 in the last 24 hours. it was kind of helped along,
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really, dollar against through after mr. trichet came out and basically said that the support for a strong dollar was important, excessive foreign exchange moves are unwelcome. cable, that's around 1.60. we've been around that level all week. >> ross, here in asia, most asian markets staged quite a nice session so far. some of them to 14-month highs. a lot of them about optimism about the state of the economy and about the state of earnings. the nikkei 225 is up 1.9%. obviously, the south japanese yen helping some of the exporters in this particular market. the kospi rallying 1.9% because of comments coming out in the bank of korea. that seems to be giving a boost to the market. the hang seng is flat at the moment. people are staying cautious in this particular market. take a look at the shanghai
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market coming back after a one-week holiday at this stage. a huge jump there. 4.18%. and the bombay sensex trading a little under water, 0.4%. the strong dollar is really pulling back. nymex light sweet crude is drifting back to us, $71.41 a barrel. and brent is pulling back, as well, $69.54 a barrel. julia, good to see you. thank god it's friday. >> happy friday to you. here in the u.s., it looks like futures are pointing to a higher open. the dow did gain about 60 points yesterday. now the dow is up about 33 points from fair value. fass dak futures pointing slightly higher as our s&p futures are up about 5 points above fair value. we had same store sales better than expected, a number of different factors pointing to the gains yesterday and to
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today's higher open. let's take a quick look at the bund yield. the yield on the 10-year bund is up to 3717%. looking at the bonds, the yield on the 10-year note is now up 0.53% to 3.3%. yes we did see weaker than expecteded 12 billion option of reopened 30-year bonds, which is the last leg of $78 billion in government note and bond sales this week. take a quick look at gold after hitting another record high of $1,061 dollars. it's pulling back today as the dollar gains strength. right now, spot gold is down to $1,045.15. joining us for market strategy is clive hyman and sasi ming. christine, i'm going to let you kick it off here since you have sasi in the studio with us.
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>> thank you very much for that. let me start with you first. stock markets are here in asia at 14-month highs. in your notes, he seem to be a bit cautious saying stock markets may have overestimated the state of the global recovery. why is that? >> i think it would be staifts that in the last 16 months, we've seen a turn around in the state of the economy, in the global economy. but now the question is how far are we recovering? so i think we are recovering, but just not as quickly as some believe. >> so you seem do be cautious about the market. but one particular stock you like, it's winmakow. do you think perhaps that has overtaken las vegas as the gaming center of the world?
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>> from a stock point of view, i like it. it doesn't have the u.s. exposure that you might norm by be exposed to. the problem in the u.s. right now with 10% unemployment, with weak earnings coming out, i think gaming and entertainment is going to be on very low priority. for wynnmacau, i think they'll be outperforming. >> clive, it's julia here in the u.s. i want to get your thoughts on bernanke's comments yesterday. he's saying they need to rise to raise rates. we are getting some of the fed governors saying they want to tighten as soon as possible. what is your take on those comments? >> i think bernanke is calling
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it correctly. i agree with tey in terms of what he says. i think we're going to short the bubble that is being fueled unfortunately by speculation. i saw some interesting statistics. we're in 16 months into a 55-month cycle and we haven't yesterday bottomed out. so i agree with michael gagan's comments at hsbc that we're going to see a second dip and i'm expecting that sometime between now and march when the reporting season comes through. however, the financial institutions, they've been in the a&e department, they've been on some oxygen, they've had the injections and the plates. but they are in recovery and they haven't yet sorted out a lot of the problem lanes and in particular, the property market here in -- certainly in the uk
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is going through a bubble where people are saying that they'll be able to buy 20%, 30% off market valuation. but the market valuation is at least 20% overvalued. so i think there's still quite a lot of correction to go. as an investor, i would be moving into the more cautious banking stocks, to be frank, hsbc/barclays is doing very well. very impressive. sad to say lloyd's tsb have lost their way and rbs, i don't see how steven has to justify his pay packet at the moment because the bank is not doing what he is supposed to do. >> he only get the full amount if he delivers a full set of key metrics, though. he has to deliver that. >> he's not going to get it as far as i'm concerned and he's not worth his base salary, because most of the bankers are not doing what they feed to do. considering that they should be
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owned by the government and they're not going to push it out -- yeah, but regulators -- i still don't know how you square the circle from being told to build a capital ratio and put more money in. how do you do that? >> i still think the banks are going to have to come back to the market, which is what i was saying back in june and july, and i think that is what is going to fuel the next cycle. essentially, people are going to have to raise more money to get the grade. >> tey, despite the fact that there's a fear of double dips, we have a wealth of global stimulus right around the world. in the short-term, it's just going to keep encouraging people to invest in risk assets and commodities, isn't it? >> well, that's a very fair point. we think some of this growth, it is fueled by the fiscal stim the ewe husband that we have seen. but the risk here is that once you take away the punch bowl,
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right, then the party might start. and we're not seeing demand pull up as quickly as we like. >> okay. good to see you. thanks very much indeed for joining us. stat gist at capital markets an many. one year on amid the global financial crisis, jean claude trichet said he was in no rush to raise borrowing and supported the dollar saying he supported washington's policy on the greenback. >> i think the statement of the u.s. authorities on the dollar policy is extremely important in the present circumstances. when the secretary of the treasury, our friend, ben bernanke said a strong dollar is in the center of the u.s. economy, it is an obvious
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judgment which is important for us, in our eyes, and for the global economy. >> elsewhere, europe's biggest telecom group, telefonica krb hiked 2010 dividends and reassured investors over its profit prospects. but it did revise down the guidance in 2012 because of falling revenue in the mature european market. and the british government is reportedly looking into whether the royalback of scotland or lloyd's are failing to meet their financial target. the bailed out banks may be deliberately pricing loans at inflated levels. both banks say it would be impossible to hit record levels without changing their lending
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practices. >> ross, over in hong kong, wynn macau rose better than the expected 13% above the ipo price of 10.08 hong kong dollars. it's now the world's sixth largest ipo this year. gambling stocks remain robust despite high valuations as investors bet on high prospects. wynn says it ames to present long-term values for the investors. >> generally, we've always had investors that stay long-term. those people that want to buy and sell the first day, they're entitled to, but they're better off to go to macau and play in the casino. >> that was allan zeman.
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>> well, after months of negotiations, today might be the day that tengzhong may acquire the hummer brand from general motors. reuters says according to the agreement, tensionzhong still needs approval from the chinese government. if successful, it could get the acquisiti acquisition. revenue and profit guidance has been raised for infosys after they report a better than expected profit of $332 million, 7.5% higher than the year before.
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infosys says bit sentiment has improved and prices stabilized. shares and value are rising on the back of the results, right now, pulling back just a little bit, down 2,209 indian rupee. don't miss our interview with s.gopalakrishnan right here. >> ben bernanke says the fed will be ready to shrink its balance sheet and tighten monetary policy once they're ready to. at some point, they will have to prevent an inflation problem somewhere down the road. ben bernanke says the fed has the ability to pull back and raise interest rates when the time is right. the fed has reportedly started small scale tests of reverse repo trades on wall
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street. this could help them tighten restrai restraints. this helps the fed keep short-term interest rates at a desired level. in the congressional panel oversaying the t.a.r.p. says the government program to fit foreclosures aren't doing enough. the treasury said thursday its mortgage relief efforts have helped 5,400 homeowners. but the panel says the crisis has moved to beyond subprime loans. the panel says the program is targeted at the housing crisis as it existed six months ago rather than as it exists right now. you can get much more on all of these news stories, videos and blogs on all of today's market-moving action at cnbc.com. still to come on today's
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program, the bank of korea did keep rates on hold, but after australia raised rates this year, will others follow soon? and we will head to istanbul in turkey again today. ask me. even if you think your mattress is just fine... ask me what it's like to get your best night's
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global equity markets trying to get firmer. we've got patricia in frank fur, carolin in europe and becky in london. >> we have markets moving a little higher. we expected to be lower. just adding 8 or 9 points at this stage, but still, it's a gain and led by a couple interesting stocks. intercontinental is doing well, too. whitbred has companies like or brands like premier inn, the hotel chain. they had their stock upgraded by analysts at barclay's today and helped by the fact that marriott across in the u.s. and hotel sector beats expectations, as well. that's helping whitbread and intercontinental, too, which is
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in the same space, as well. lloyd's and also rbs, lloyd's banking group and rbs in the banking sector both declining today. the ft, financial times, reporting that the government is look into whether these two government-backed banks have failed to meet the agreements on the government looking into allegations that they be pricing loans at higher levels and are not meeting those obligations. basic resources stocks suffering a little bit in today's session, too. it helps to temper any gains and jjb. after the ftse 100, jjb is a sports retailer here in the uk. they have confirmed the reports falling. they are planning to raise $100 million pounds in a capital raising, finalizing those shares at the moment. patricia, how is it going in germany? >> well, we are more or less
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moving sideways right now. we had a bit of a volatile moment and morning so far, absolutely flat, 0.9% to the upside. daimler and allianz holding up nicely. deutsche borse up about 2%. but the chemicals and reso you source stocks at the moment, bns, k&s slightly down by 0.8%. interesting news from audi and the vw coming through with their sales for the month of september. down 6.8% so far for the year, it's down about 7.5%. however, they still think that they will rereach their sales targets in terms ofyj for the fl year of 2009. vw up slightly 0.6%. lufthansa, we are still waiting for traffic data to come through for the month of september. so far, we've heard from the company they are not planning any more job cuts so far for
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this year, 2009. lufthan lufthansa, as you can see, up 0.7% midcap index started on a lower note today. up about 0.5%. important data on a macro level today, we had trade data disappointing beg time for the month of august. so the trade deficit on the surplus was less than expected. tell us about the ex ports were less than expected. imports were less than expected. a lot of people are now doubting the impact within q3 gdp figures. that's the dax for you. over to switzerland and carolin. >> thank you, patricia. we're higher on the smi, but barely in positive territory. let's talk about some of the gainers. julius bear doing very well, up by 2.5%.
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zeebowda is putting on gains higher by 1.5%. the company reported a drop of 4% in sales for the first nine months of the year. that was in line with expectations, but sales were hit by a stronger swiss franc. in terms of the outlook, givaudan says it confirmed its medium term guidance. activan losing earlier gains it made earlier in the session. the company reported on a milestone drug against multiple sclerosis. charlie gasparino last night reported that ubs has struck a deal with mccann to head ubs's u.s. wealth management business within a month. that's it from here. now over to christine in singapore. >> thanks for that, carolin.
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in japan, the nikkei 225 closes above the 10,000 level for the first time in a week with the exporters gaining on the back of a slightly weaker yen. that is helping to lift the topix. upon tear the concerns eased after the central bank's decision to keep rates on hold. we have the construction and banking sectors gaining as a result. sam song electronics rebounding from recent lows, as well. in china, the shack high market is coming back from a long weekend, led by an index heavyweight such as petrochina. the market playing catchup after a long holiday. key economic data is coming up in the next couple of weeks. those gains, however, failed to lift the hong kong market. look at caution there, the
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happening sang market saying flat. this particular market closed more than 5% in the last trading sessions. wynn macau is getting off to a strong start. the government raised $1.6 billion to become the world's sixth largest public offering this year. over to australia, the stock is slipping just a touch, 0.3%, ahead of caution on the u.s. earnings. the indian market is pulling back just a little bit rye now, down 8%. we had profit taking now weighing on the sensex. 16,704. that's a stop shot of the trading day here in asia. julia, over to you. >> thanks, christine. here in the u.s., there's just one economic report today as we wrap up the trading week. august trade deficit figures are out at 8:30 a.m. new york time. the gap is forecast to have
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widened to $33.6 billion from just under $32 billion in july. fed vice chairman donald kohn speaks about the weakness and monetary policy and crisis in washington, d.c. at 12:15 p.m. at 2:00 p.m., president obama will be speaking about the economy and his administration's plans for regulatory reform. that's your global stock watch. >> still to come, the bank -- >> coming occupy "worldwide exchange," the bank of korea holds rates steady for eight months in a row. but is a rate hike on the horizon? we'll take a look.
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iemp christine tan. in asia kra, the bank of korea keeps rates at a record low and dark hopes of an early rate hike. and i'm ross westgate. here in europe, stock markets are up, but are being tested by weaker trade numbers out of germany dealing blows of hopes of a stronger recovery. >> and i'm julia boorstin. here in the u.s., ben bernanke says the fed is not in a rush to raise interest rates until he sees efficient improvement in the economy.
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>> you're watching cnbc's "worldwide exchange." we have to get producer prices and trade data. stocks are firmer. we were called down first thing, but we have had a bit of a rally. but it is not resource stocks that are going up. let's bring you this data out of the uk. up 0.4% on the year. that is a stronger increase, than we thought, minus 0.1% was the figure we're looking for on the year. that's the highest annual rate since april. core output prices up 1.4% on the year, a little stronger than expected. input prices down on the month. the global goods trade gap, 6.24 billi billion. that is the smallest since june
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2006. sterling just spiking up on the trade day. joining us with reaction prices, brian goldwin. trade day is better than expected. what do you make of the output prices? input prices are still contracting. some companies are putting margins in there without the price looking firm, or not? >> i'm not sure. it's a bit early to make that conclusion. we've had the weakening of sterling recently, which is somewhat pressure. rates of these indices, the basis from the weakening of prices last year started to fall out. so we are going to see both the producer and the consumer price numbers go up sharply in the next couple of months. how will that be viewed? because in the same way, of course, that we've got weak inflation because of the year on year comparisons, how are we going to view it as a headline inflation or are we not going to view it as a bit of an inflation
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problem? >> the central banks have tried very hard to try and strip out this effect. it's changing volatility prices. going forward, that's going to be less important. there will probably be more visibility in some sense. core inflation is going to continue to come down and most of these economies because unemployment is still rising and there's a lot of excess capacity. >> brian, it's julia in the u.s. you say in your notes one of the issues is policy stimulus. looking at this debate we're seeing within the fomc committees and the comments that ben bernanke made yesterday, what kind of strategy do you think we'll see here in the u.s. about interest rates? >> they reiterated yesterday that interest rates are going to remain low for an extended period of time. of course, there has been more talk reebtsly about how and what
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sort of pace of interest rate increases we'll get when they eventually come. i do think when the fed feels ready to raise rates, they won't hang about. it will probably be fairly swift action they'll take. at the moment, monetary policy settings in the u.s. and elsewhere are still kind of at emergency levels. so when they feel that deflation risk has been dealt with, they're probably move quickly to change -- well, they'll move aggressively to change the start to policy but i think they'll wait quite a long time. i don't think we'll get that until early next year at the time at the earliest. >> brian, this is christine here. when you look at data coming out from japan, machinery orders rising from a record low, but overall capital spending remains weak. how do you think all this is going to weigh on the bank of
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japan when it meets next week? we're not expecting any changes there at all. we've had positive numbers, but this is from a massive collapse at the beginning of the year. so i think monetary policy remains as aggressive as it can be. i think the bank of japan, if anything, should be trying even harder. they should be emphasizing a positive inflag target more aggressively than they have done. they've got the biggest deflation risk of all the global economies. >> thank you so much for joining us. as far as stock markets are concerned, we're trying to nudge higher right now. here in europe, we're up about 0.2%.
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the dollar is a little stronger. we'll come on to that. financial services, travel and leisure are all stronger this morning. a little weakness in chemicals and utilities. yesterday, in the states. so the dollar has rebounded off its recent lows. dollar/yen is up to 18920. we're down to low. euro/dollar, 1.4818, somewhere around there and we're back down to 1.4725. sterl around the 1.60 mark. so the trade gap wasn't quite as big as we thought. >> hey region ross, here in asia, a lot of optimism about earnings and the state of the global economy. the nikkei 225 up a strong 1.9%. the exporters climbing on a slightly weaker yen. this index ending above the 10,000 level in more than a week. the kospi is up 1.9% after
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comments from the bank of korea calmed fears of a near-term interest rate hike. that helped boost the markets a little bit. the hang seng is finishing flat. this market up strongly over the last four sessions. the shanghai market coming back from an eight-day holiday to finish a strong 4.8% higher. the banks leading the way, of course. this particular market playing catchup to the global rally. the only one under water we have seen at this point in time, down 1.9%. over all, a good finish here in asia yap the. >> same-store sales came in better than expected. now the dow is point iing -- futures are 33 points above fair value. nasdaq futures are pointing towards a lower open and s&p 500 futures are up slightly from
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fair value. so we did see a reversal there in the index. looking at the u.s. 10-year yield, the yield on the 10-year note is up 0.51 %. yesterday we saw that -- an unexpectedly weak response to the $12 billion option of reopened 30-year notes. we're going to keep an eye on that yield moving forward. of course, all of the auctions this week have wrapped up $78 billion in treasury auctions. christine, over to you. >> the indian market is trading under water right now. let's find out what's going on. ayesha faridi is joining us right now. >> it started out okay, but now it's turning negative for the equity indian markets. we're pretty much the only ones weaker in the entire asian basket right now.
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the banking stocks started collapsing first. weakest in the market today, down by almost over 5% right now is tata motors. they have indeed raised almost $750 million by an f dcc 350 for jute and they would be using this money to erase some bit of debt and for the loan for jaguar/rover. it has been very, very muted listing from the primary market. and even though the numbers beat street expectations, both on the bottom and top line, the management does tell us that they are indeed cautiously optimistic about future interest rates. they've been hiring people, as well, but nonetheless, it is, i think, the market is more importantly, excuse me, the kind of dollar weakness that we are
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seeing visibly, the indian rupee which is dampening the sentiment right now. with that, it's back to you. >> ayesha faridi, thank you for that. you have a good weekend. >> it's been turkey week here on cnbc. this week, the country played host to the international monetary fund. guy johnson caught up with the british prime minister. >> for the last 50 years, turkey has looked west to the european union. it wants to become a member and that hope has been held for a very, very long time. but there is a growing sense in this country that angela merkel's re-election may finally end that dream. i spoke to the prime minister in an exclusive interview and asked him whether or not he shared that view.
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>> translator: the re-election of mrs. merkel in germany and the new coalition government to be established in my opinion will not create any change in turkish/german relations. in other words, the process will continue as before as countries as leaders who know each other, we will continue the same way. i don't think there will be a difference. >> so you don't think there is an issue with the fact that we now have two of europe's largest countries, france and germany, as being negative towards turkey's acceptance into the eu? >> translator: there were some issues before and there are still some ongoing. but i think some things will change for france as well. maybe in france when the election is over, they may have a different point of view about the future. and so i am hopeful in that regard, too. with respect to germany, as you know, we have close to 3 million
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citizens there, about 700,000 are german citizenes and they vote in germany. there are five turks who are in the federal parliament in germany. they will very very important in creating even more relations between turkey and germany. >> so a bigger question may be does turkey actually want to join the european union? after all, it's been a very long road and the message seems to be at the moment that the european union doesn't want turkey, so maybe turkey is start to go think, you know what? if you don't want us, we don't want you. >> translator: it's an interesting question. we're talking 1959 and now we're in 2009. we're talking 50 years and in those 50 years turkey's seption into the eu was delayed and delayed. now turkey has begun a session talk. we have no intention of inteting go of this process. if the eu leaders or the members of the european union say they
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do not want to take turkey as a member, that they want to stop the session talks, that's another matter. but until then, and when and when it happens, then we would reconsider our position, but we will continue on this path. >> over the next few days, we're going to be traveling to iran. what message will you take to iran? obviously, we find ourselves in a difficult situation. and turkey, i would argue, can ill afford to see further sanctions applied to iran. you have considerable agreements with the country and, of course, you probably need gas for the nabuco pipeline. >> translator: let me say this. turkey and iran have a century olds friendship. we share a lot of common values. now, with respect to the discussions about iran's nuclear arms, weapons of mass destruct, i view it in the following way. we don't want to see any nuclear arms in our region, whether in iran nor in israel or in any country.
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we should not be visiting solely on iran, my most recent visit to the u.s. i said, why don't we focus on israel. 1,500 people died in gaza. if it's the gazans who died, should we turn a blind eye to that? i think justice is really as important to us just as the interests of israel are important to us. the lives of palestinians are equally important to us. in other words, we have to be just, fair, honest and insear. >> earlier the prime minister spoke to me sclus youly here in istanbul. guys, from the beautiful building behind me and from istanb istanbul, back over to you. >> that was guy's special report out of turkey.
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christine. >> hey, ross. the bok decided to leave rates steady today at a record low saying the outlook for the economy remains weak. 3 out of 10 analysts foresee the bok raising the base rate later this year. let's get some thoughts from joseph. obviously, you know, the property market is a key concern. so far, twen thoughts have tried to cool down the housing market by imposing lending curves. do you think it's a matter of time before the bank of england steps in to do something about the property market? >> well, i think on the rates front, it's difficult to see an interest rate coming. i think the comments came after the decision was equally important because of those on the part of the central bank itself is clearly not on the property market, but on the economic recovery, as well as the export recovery. i think governor li made et very clear that he's not focusing on
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property, he's focusing on ex ports. until we have a certain export recovery, i don't think it's going to move that quickly on interest rates. >> so unless we get some certainty on the export front wbl does that mean the bank of korea is willing to let house prices rise and let a bubble build in the housing sector? >> i think now that seems to be the case. there is more concern about this export recovery, citing that the demand coming from the from his production on the production side indicates external demand. but that is not firm enough. i don't think he rates packages as a points where it is becoming a bubble. i think korea will make the decision perhaps later on in 2010 to raise rates. >> joseph, how do you see that affecting ex ports and then the
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decisions by the korean fed? >> well, i think it's very interesting. because if you look at the strength in the asian ex ports recovery, it's coming from two fronts, as well. one is that we have had a very sharp inventory correction process at the start of the year and now we're starting to see this rebuilding of inventory globally. that is leading to some of the open ex ports like korea, taiwan, singapore recovery. also, the economic recovery in terms of the export fund is coming off a very, very low base. and i think we need to look more closely at 2010, whether the u.s. consumer bounces back on its feet and starts the to consume again. if you don't have that, even the sustain blts of this export recovery is in question. in terms of the current city front, while the markets are pricing in a significant appreciation in asian economies versus the dollar, i think that is coming from the angle banks.
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>> so on the topic of interest rate hikes, we've seen talks on the bank of korea. which central bank in asia do you think will be next to raise rates? what are the possible candidates we're looking at? >> let me talk about clarification. when i say korea is not going to raise rates before the year is over, that does not mean we don't expect korea to be among the first in asia to be the first to raise rates. we see the bank of korea, bank of india and -- >> what about china? >> china is more peculiar. china did not cut interest rates as much as some of the other central banks did. also, i think it's very important to mention that a lot of the liquidity in the system right now is a result of bank
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extending of new loans. that is what's causing the inflationary pressures on the asset side for china. what they want to do is skill back this credit extension and perhaps even consider raising the reserve ratios and last raising the overall cost for the economy. >> joseph, very good talking to you. thank you very much for coming back. >> thank you. >> and another story we're watching carefully, rather interesting in hong kong, when macau become the first american company to be listed on the hang seng today, shares rose a better than expected 13% above the ipo price of 10.08 hong kong dollars. but a listing raiseed 1.6 billion making its the world's sixth largest ipo this year. analysts say the strong debut signals appetite for gambling stocks remains robust despite high valuations.
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qynn's successful debut could do well for los angeles sands. which is expected to list in hong kong later this year. after months of negotiations, today might be the day that tengzhong seals the deal to acquire the hummer brand from general motors. reuters saying according to the agreement, tezhong will receive the dealership network, but the deal still needs approval for the chinese government. the price tag? a cool $150 million. next year's dividend is increasing by 22%. shares are trading to the upside after the spanish telecom company improved its 2009 forecasts amid the recession but the company did revise down its
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guidance until 2012 because of falling revenue in mature european markets. the french labor minute sterp has been encouraging companies to help fight stress in the workplace following another employee suicide at renault. he's urging french companies to sign up to his plan by the 1st of february. if they don't come to a collective agreement, he says companies may face public denounceation and they may be fined. >> ross, the review, which was reported earlier this week, was mandated by the government in the wake of citi's stress tests. the fdic disputes the rigger of the review. it was based partly on interviews of citi executives who rated the skills of their colleagues. the review gave mostly positive marks, but did recommend some shuffling of senior management. in frankfurt, citi shares are
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now flat. i don't know if that chart is working, but it looks like it's at 3716. meanwhile, chevron expects third quarter earnings to be higher than the previous quarter, boosted by export and production operations. that's the result of higher crude prices. the number two u.s. oil company says prots from oil and refining will be flat and the weak dollar will impact all of its businesses. chevron will result results on october 30th. chevron closed at $5.35 on thurs. coming up, we'll get more in-depth analysis going into earnings season. >> and the dollar has a little bit of support today after comments from trichet and mr. bernanke. we'll get the latest on the currency markets and looking for that japanese manufacturing data, as well.
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on the dollar market, the dollar has some respite after comments from ben bernanke and jean-claude trichet. will it last? >> i can't believe it will. while everybody talks about the
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strong dollar and mr. bernanke does it on a regular basis, now mr. trichet is joining the party, that doesn't mean the dollar will strengthen. it doesn't necessarily mean that it will strengthen for any period of time. i think while we've seen movement with the central banks doing their best to strengthen the dollar, you know, there's a finite amount of work you can do in that respect. you can talk it up, throw money at it for a while, but sooner or later, it finds an equilibrium. >> what do you target, briefly? >> dollar/yen, i think probably top end of the range at the moment will get it up to around 90, 93, 94. there's a question whether it can push higher than that. euro/dollar, it haven't really got a target. this trade isn't range trading, anyway. it's dancing between two poles. so it is a very easy currency to trade at the moment. 1.48, the top of the euro zone and the dollar. >> yeah.
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it would seem to be. you would think we ought to try some currency because of the allure there for traders. but it hasn't happened as of yet. >> look, i mean, it's a pretty easy trade, right? most people are shorting the dollar. we short the dollar and then we invest in commodity stocks or gold or whatever house it is. how significant is it that there is a discussion going on at the fed about interest rate rises? it seems to be the one thing that would stop that trade would be a reverse in interest rates. you know, you reverse the policy in the u.s. and the timing of that and pricing that in. >> to a degree. but i think it will take a lot of tightening before we start to see it change to the emphasis of, you know, selling the u.s. dollar and buying the australia or kiwi dollar or whatever. you know, even if they move interest rates up by 0.25 by 0.25%, 0.5%, whatever, it's a very obvious carry trade there. >> yeah, but if they go before
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japan, doesn't the carry revert back to japan? there's a risk, isn't there? >> there always is a risk. generally, interest rates across the globe are ridiculously low. and a few places where there's a reasonable yield, australia, africa, those people are likely to pick up trade. the question is, where do you borrow your money and your yield advantage won't force you to spend a fortune on hedge costs. obviously, we don't dole with speculative clients, but it's something we have to watch. and i don't see any particular reason for that to unwind for the time being until u.s., uk, european and japanese interest rates start to rise and obviously, the japanese will be the last of all of those. >> david, thanks for joining us, director at halo financial. coming up on "worldwide exchange," we will continue to monitor headlines across the globe. >> plus, has wynn may cau paved
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the way for other ipos. >> asia? we'll take a look coming up after the break.
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i'm christine tan in asia. chinese stocks rally after playing catchup after a long holiday. wynn macau marks a stronger
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debut. >> and i'm ross westgate. stock markets are trying to move into positive territory. we've had weaker than expected trade figures out of germany. that has dealt a month to strong recovery hopes. and i'm julia boorstin. here in the u.s., ben bernanke says the fed is not rushing to raise interest rates, waiting to see a sufficient improvement in the economy. we just heard the breaking news that president obama has won the nobel peace prize, but we wanted to welcome all our viewers here in the united states. welcome tort start of your trading day. we have a lot of news to digest today and now this nobel peace prize news. first, let's take a look at where the markets are heading before we dig into all of that data and information. the futures are pointing higher. futures are 33 points above fair
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value. nasdaq futures pointing slightly lower and s&p futures a point below fair value. looking at a bond market, the 10-year bund yield is up to 3.16%. and the yield on the 10-year note is -- the yield on the 10-year note is up 0.043 to 3.29%. ross, over to you. >> thanks very much, indeed, for that, julia. global equities are trying to be a bit firmer. china was back in trade today after a week long holiday. here in europe, we were in positive territory about an hour into the session two hours in and we're either side of the flat line. what we're not doing is getting any support at the moment from commodities. mainly because the dollar is a little stronger today after comments from mr. trichet yesterday, head of the ecb and mr. bernanke, as well. that's why those equities are
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weaker. meanwhile, as you heard julia boorstin say, barack obama has won the nobel peace prize. let's hear a little bit about that. >> and work for a world without nuclear weapons. obama has a precedent created a new international climate. international diplomacy has regained a position with emphasis on the draw that the united states and other international institutions can play. dialogue and negotiations are preferred as an instrument to solve even the most difficult conflict. in addition, a world free from nuclear arms has disarmament and arms control negotiation. besides obama's initiative, the united states is now playing a more constructive role on challenges the world is
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confronting. >> we're listening to the fact that u.s. barack obama has won the nobel peace prize for his attempt to work for world peace. that's the reason he's got it and i suppose that allows him to continue his work in that particular area. we talked about how stocks, meanwhile, and commodityies are lower compared to the selling that we've had. dollar/yen, up to 89.20. euro/dollar, down to 1.4722 after it being nearly a cent higher at 1.4818 yesterday. sterling has come back down to 1.5952. >> hey, ross. most market ended on a lot of optimism today. the nikkei 225 up 1.9%. the exporters finishing up above
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the 10,000 level, so pretty significant there. the kospi central bank comments calmed fears about language term interest rate hikes, giving the market a boost of 1.9%. this market had strong sessions of gains, sunny investors are saying cautious there. the shanghai composite, up 4.8%, after coming back from a week-long holiday. so investors are there are playing catchup. the bombay sensex, down under water by more than 1% at the moment. oil, nike mechanics light sweet crude $71.21 a barrel. and brent is down 43 cents, $69.34 a barrel. ross. >> okay. let's wrap some of this all together. bob parks is with us.
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bob, it's pretty clear at the moment that you've got an environment where it's easy to borrow the dollar, short the dollar, invest in risk appetites, whether it's commodities and commodity stocks or gold or whatever it may be. seems to me the one risk to that, of course, is if u.s. interest rates change. yesterday we have this information from ben bernanke saying monetary government takes hold. it just perked the dollar up a little bit. but it is your fundamental case to now that trade that i just mentioned is going to be in place? >> well, clearly the dollar is being used as a funding currency at the moment. i think there are a number of elements to this equation. the first element is when the federal reserve tighten monetary policy, and in terms of raising interest rates, i think bernanke has been very clear, which is that any tightening of monetary policy on the interest front is going to be delayed. i think probably the most likely
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scenario is to see this tightening around the middle of 2010. our health forecast is that we will have the fundamental funds rate at 1% by the end of the third quarter 2010. don't expect any interest rate action from america this year or early next year. what is more interesting, however, i think, is what do they do on quantitative easing and what do they do? and i think the key fact ser what they do on liquidity management. what is clear is if you look at the size of the federal reserve balance sheet, it is currently stable. i think as we go into early next year, the first stage of this exit strategy, in fact, will be on the liquidity management size and we could see the size of the federal reserve balance sheet come off a little bit as they start to reduce liquidity of the system. >> bob, this is christine here. how will the fed prepare the market for their quantitative easing? how will it lay the groundwork? >> i think you'll have a series of official statements alluding to the fact that growth is now
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recovering and in the second half of this year, we could easily have u.s. growth annualized at 2% to 3%. i think where lines are going to get difficult for the federal reserve is that headline inflation is currently negative as we go into the first quarter of next year, base effects are going to result in inflation going positive. and that, in fact, is going to be a challenge for them because i think inevitably, they're going to have to say that this rise in inflation in the first quarter of next year is likely to be temporary. and actually, that could result, although january is typically a stronger month for the dollar, actually, i think because of the decline in real interest rates, that actually could result in further dollar weakness in the first quarter. >> bob, it's julia here in the u.s. i want to get your thoughts on the treasury auction this week. we had a much, much weaker than expected $12 billion auction of reopened 30-year bopdz, this just one day after a very strong
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response to 10-year bonds. what should we make of this? is this back to the old day when he is stocks go up and bonds go down? >> there are two factors in play. the first factor is the equity bond relationship. if we see equity markets drift sideways over the next month or two, which is my expectation before we have another leg up in equity markets, that implies that volatility in the bond markets is not going to be that great. but we have to watch the other factor and, you know, the reason why bond yields have been low over the last two to three months is because liquidity, which is being injected into the banking system has been recycled by the banks into government bond purchases. and if the banks short to increase their lending, which frankly they're not doenl doing at the moment, that lend sg going to be financed by sales of government bonds.
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likewise, i think we also have to come back to this question of what does the fed do about withdrawing the very substantial amounts of liquidity in the system. because when that starts, that would also be negative in the government bond market. i think the trend over the next two to three months is going to be a slow, not very volatile rise in yields and we could see early next year yields back to let's say a range of 3.63, 0.8%. bob, will this liquidity trump everything or will there be a pause for the equity markets? we'll be joined by edmond shanks. more to come here. chloe is 9 months old.
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welcome back to "worldwide exchange." i'm julia boorstin. bnp paribas has released its cross monthly report for october. for more, let's talk to edward ching, bob parker remains with us throughout the hour, as well. edmond, we had quite a strong start to earnings season this week.
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we got better than expected same-store sales results and a larger than expected drop in initial jobless claims. what's your outlook? do you think these are all signs that the rally will continue? >> well, actually, no. i'm actually a little bit more skeptical. let's put this in context. we've had an all mighty recession called by the financial crisis which had another leg down from lehman's. we've had a construction to the upside from that where stocks have rebounded in the last six months. what we found and in many cases, we have reached the levels where we were in september 2008. q3 earnings were at a very early stage. i don't think you can draw too many conclusions from that. what we can say in the short-term is that industrials should pick up over the next six
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months very rap idealy and that is the v-shaped rebound people have talked about. the question we have going on beyond that, do we expect to see that follow through in the rest of the economies and do we expect to see that sharp initial rebound continue through 2010? we as a house have not so sure of that. >> meanwhile, edmond, does all this liquidity that's been pumped in, the central bankers around the world are still saying, hey, we're going the keep our foot on the pedal here. does that story still trump everything else? >> i think, ross, in the longer term, i.e., if you take a 12-month view, the answer has to be yes. again, if we take our macro view, we suggest a modest turn in 2010. no inflation in 2010. so that back drop will allow central banks to continue to flood the market with liquidity, up to the point at which they see a robust recovery. and i think whatever you say at the moment, ross, the economic recovery we see for the moment,
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it's certainly anything but robust. it's rather fragile. and actually, that is the best cocktail for equities in the medium term. more fragile recovery, but allowing central banks to keep low interest rates and credit and kwaut tafb easing to go on the table. >> are we still going to get this liquidity boost all the way through to christmas? >> the answer to that is probably yes. but i do think the nature of equity markets could well change over the next one to two months. we think that it will well be investor rotation out of small cap into large cap. some profit taking on the very high gains that we've seen in emerging markets, so a rotation from emerging back into developed markets. i also think of rotation household overleveraged companies, which are still going through the painful process of deleveraging into defensive stocks and stocks which are high
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dividend stocks. so i think we could see over the next month or two a period of consolidation. there is a risk, obviously, that all this optimism that is being built into third quarter earnings may disappoint. and that's certainly not the case today. but i do think that given the rise in markets that we had in aupg and september, clearly, technically, we're looking overboard. >> ross, this is chris teague. we talked about emerging markets. do what extent do you think global growth will continue to be led by emerging markets? >> for the first time since i can remember, the answer to that question is yes. and our five-year forecast, and obviously a five-year forecast comes with a huge caveat, but we think the emerging markets in the g-20 countries will have an annual average growth rate of 6.5% in china and india will be in a five-year growth rate of 8%
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to 9%. the developed world, we think in g-20 will have an annual average growth rate as low as .5% to 2%. so the growth driver over not just the next year, but i think in the medium term, is going to be the emerging markets. that obviously comes with one exception and that one exception is central and eastern europe. that's where the restructuring process will last for at least another two to three years. when we talk about growth markets and leadership, it's centerly asia america and -- >> do you think that's true? are you bulis on the short-term markets? >> we're taking a cautious approach to the next two to three months. certainly when you look at the profile, i would agree in terms of the growth profile, we see the same type of growth profile in terms of what you see in
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emerging asia and latin america versus the more mature markets. i think that looks to be the case. and the question is, where is this liquidity going to go? and the emerging markets seem to be one of the prime candidates to receive the sort of cash flow that we saw in previous bubbles going to tmt or indeed in terms of property markets. >> all right. edmond, thank you very much for your views. good talking to you. have a good weekend. and, of course, bob parker will continue to remain with us, vice chairman of asset management credit suisse. still to come, european stock markets are trading in the green with hotels mainly boosting the ftse. more than just money moving across markets. it's about exchanging ideas across cultures, opening up to the world- continuing to innovate. you need to have a nimble organization that can innovate rapidly and constantly is willing to learn.
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welcome back to "worldwide exchange." i'm julia boorstin. here are some of the top stories we're watching from around the globe. fed chairman ben bernanke says the fed will be ready to tighten balance sheets and raise interest rates once the economy improves. bernanke says the fed has the tools and the ability to pull back its flood of cash and loans in the economy and raise
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interest rates when the time is right. meanwhile, the congressional panel overseeing the t.a.r.p. says the government's panel to oversee foreclosures isn't doing enough. 500,000 homeowners have been helped and it's on track to help 3 million people within three years. but the panel says the crisis has moved beyond subprime loans and the program isn't designed to deal with foreclosures caused by unemployment. the program is targeted at the housing prices as it existed six months ago rather than as it exists right now. ross, over to you. >> thanks, julia. hungary's prime minister wants to join the euro zone sooner rather than later. >> h awe ngary needs the euro asap. but before asap can happen, we need to make hundred gary so competitive that when we join
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the euro, it is not going to hurt our long-term competition always seems to have happened in other cases recently. hundred gary needs the euro, but before that, we need to continue with cuts. >> technologies has raised its revenue and guidance to march. infosys reported that better than expected profit of $332 million, 7.5% higher than the year before. infosys says while currency, volatility remains a huge concern, business sentiment has improved and prices have stabilized. shares in infosys initially getting a boost, now pulling back, 2,171. don't miss our first on cnbc interview with s. gopalakrishnan
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right here on "worldwide exchange." >> yeah. something not to be missed. how are global equities doing right now? we'll bring you up to speed on that starting off with becky in london. >> the ftse 100 has turned a couple points down. basic resource stocks certainly aren't helping. amongst the biggest decliners on the uk today, it is the metals and miner stocks down today. all the usual suspects, basically, pulling us down to that ed are arrow. elsewhere, we've mentioned a couple other stocks on the move. in the hotel sector, we have whitbread. the shares in that company are doing really well today. there was an upgrade by the analysts at barclay's, but getting a bit of strength, too, from marriott. and that is helping intercontinental hotels group, as well. patricia, how is it going in
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germany? >> lackluster trade, beck can he. to be honest with you, about 25 million shares have traded at this time. that is fairly low. small down, down 0.1%. pulling us down are chemicals as well as industrial stocks and kaas down about 2.5%. tuesdayen krup, as well, under pressure, as well. after the alcoa figures managed to increase spirits out here in germany. deutsche borse is up, as well. lufthansa crept up, but two of the gainers, up about 2.35%. that is frankfurt. over to christine. >> the south korean kospi rising
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1.9%. monetary tightening concerns easing after the central bank's decision to keep rates on hold today. in china, this is a standout on the shanghai composite up 4%. the market is playing catchup of a week long holiday. those gains failed to lift the market. wynn macau's ipo got off to a strong start, raising $1.6 billion to become the world's sixth largest public offering this year. i want to mention australian stocks slipping 0. % on caution of more u.s. earnings and finally, continuedan market had a brief pop after better than expected earnings, but profit taking eventually setting in and that is weighing on the sensex down 1.2%. what's happening in the japanese market? let's cross live to tokyo and check in on the trading day there. moriyasu-san. >> tokyo stocks gained for a
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fourth consecutive day to push the nikkei index over the 10,000 mark for the first time in a week. the yen weak bed slightly against the dollar giving ex ports a breather. first retailing operating of clothes chain unit saw a 2% gain of report earnings in these tough time. on the negative side, cole's lost 2% after having to say their cooking oil was not health friendly because a cancer-causing ingredient was found. another department store, takashemia said today its group operating profit slashed 6.3% for the march/awl august half. hit by the unbeaten consumer and
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that was the nikkei business report. have a nice weekend. it's back to you, christine. >> ken moriyasu from the nikkei. coming up after the break, we will speak with the ceo of infosys after india's second biggest software reporter managed to beat forecasts. there's that mr. clean magic eraser thing again. clean freak. [ bottle #2 ] whoa... is he better than us? uh, i mean, i mean i feel like it took you like three times longer to do whatever he did... dude, dude, he's got...these -- like -- microscrubbers... yeah, i guess... magic man. he's a magic man. what? i just want to be squeezed. [ male announcer ] remove three times more grime per swipe and get this unbeatable clean guaranteed or your money back with the mr. clean magic eraser.
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it's 31 minutes past the hour. welcome back to "worldwide exchange." here are some of the top business stories we're watching from around the world. here in the u.s., ben bernanke says the fed is not in a rush to raise interest rates until there's sufficient improvement in the economy. >> and in europe, stock markets have been trading in and out of positive territory, being tested by weaker than expected trade business out of germany. and here in asia, we're watching for india i.t. bellwether infosys posting a better than expected q2 profit but shares failed to hold on to gains. we'll talk to the company's ceo. >> let's take a look at the
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futures ahead of the open. dow futures are above fair value. nasdaq reversed court about an hour ago, three points less than fair value and s&p 500 futures are about a point highehe than fair value. let's take a look at the 10-year note. now the yield on the 10-year note is up 3.28%. ross, what is it looking like in europe? >> we've been in and out of positive territory all morning, julia. this is where we currently stand. just down slightly. perhaps no surprise, we have no support, really, from the chemicals, commodity stocks, construction, primarily because the dollar is stronger this morning. we had some comments from mr. trichet and ben bernanke saying they still favor a strong dollar and when interest rates may
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change. dollar/yen, up 89.06. euro/dollar, 1.4833. we were at 1.48 yesterday. sterling is just below the 1.60 mark where it's been for the last three trading sessions. christine. >> hey, ross, most asian markets finishing on an upbeat note this friday. let's take a look at some of the boards. the nikkei 225 up a strong 1.8%. the kospi up 1.9% after the central bank there said that it was not going to hike interest rates any time soon. the hang seng up just a touch there, pretty flat, but bear in mind, this market had strong gains so investors are staying cautious. shanghai composite coming back from a week-long holiday to finish 4.8% higher. and the bombay sensex is a little under water right now, down 1.1%. julia. >> joining us now for market strategy is kevin cook.
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and bob parker from credit suisse continues to stick around with us. he's our guest host for the hour. kevin, i want to hear your thoughts on this discussion we've been having this morning about what to make about all of these optimistic points we've seen so far this week. we had a very strong start to the very beginning of earnings season. we had stronger than expected same-store sales. we also had a larger than expected drop in initial claims. where do you see these points all leading us? does this mean that we're off to a strong start for third quarter earnings? >> i think so. and, you know, this has been a market driven by doubt as much as anything. i'm calling it a v recovery spread where fund managers have to be buying stocks here. whether you manage $10 million or $10 billion, you can't doubt earnings recovery here. so we're at the bottom of the recession and the earnings trough and you have to be buying stocks here because you're competing with trillions of other dollars in fund managers' hands. and a rapid recovery in earnings
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means that you can -- stocks stay cheap, stay low and stay affordable. and with the fed back stopping this whole thing with acome dafb rates and we got confirmation last night that the extended period will remain here and the bond market -- the yield curve is not pricing in dramatic inflation. so we're in a sweet spot here for at least the next two to three quarter peps. >> kevin, you are much more optimistic than a lot of the other guests we've talked to this morning. i'm curious, there there any reasons for you to be skeptical? there were questions with alcoa, how much were those strong earnings affected by cash for clunkers. the expectations are very high right now. does that concern you at all? >> not really because, you know, that is what's fueling it, people staying on the sidelines. that doubt fuels things higher. fund managers are looking ahead two or three quarters here, taking advantage of the fed liquidity and putting money into
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risky assets. and until we get, you know, true signs of inflation down the road or until we get some other bonds to drop, like commercial real estate unfolding, some of these portfolios that can't be refinanced, there will be a 10% to 15% correction at some point in the next two quarters here. but right now, s&p 11 is definitely in the cards if we can get through the 1070 area. and we could see 1150 this year. >> i don't disagree with that. and i think just a few observations. first of all, the down trend in corporate earnings momentum starts in the fourth quarter of 2006. it turned in the second quarter of 2009. i think if one looks out one to two years, it is highly likely that that turn around in the second quarter of 2009 is going
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to persist. corporate america could be up easily 1% to 2%. so i think the trend is positive, indeed. >> i want to put this to kevin. you said earlier you were going to transition out of certain types of stocks into others. >> well, if you look at the equity market rally since the 9th of march, which was the bottom, it's been characterized by very strong performance in emerging markets. it's been characterized by strong performance in small cap and by companies which have had high degrees of leverage. i think the rally is now going to transition into more higher quality, high dividend sectors. >> kevin, i mean, when you said the market is going up, do you buy all the market or do you look at that transition that bob just talked about? >> well, i would continue to stay in industrials, materials, energy.
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you know, this is the early part of the he recovery cycle here and those are the sectors you need to be in. technology has been strong, continues to be strong, and health care, i think there's some opportunities. so those five basic areas i would say in or add to. >> kevin, i completely agree with you on the i.t. sector. structurally, we are long i.t. i also agree with you on construction materials and i think one theme on construction materials is it obviously benefits from the trend increase in infrastructure spending. on the life insurance sector, i think the number of longer term themes which make what has been an unattractive sector suddenly become more attractive. >> i don't follow that sector that specifically, but i would say that if a life insurer has not can the exposure, they basically company their books
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clean. they've stuck to their knitting. they have a consistent stream of revenue that they can see going forward. >> okay. kevin, you're going to stick around. we'll come back to you. we'll come back to bob, as well, in a few moment time and wrap up his thoughts, as well. >> infosys technologies has raised its revenue and profit guidance for the year from march. this after india's second largest exporters expected a profit of $3.27 million. interest senment says it is a concern sxb and shares have stabilized. pulling back 1.6% lover, 2,176 indian rupee. now joining us in a first on krvenz interview, s. gopalakrishnan. good to have you with us on the
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show. first of all, i want to ask you, you raised your full-year forecast. do you somehow see the business environment improving to the extent that you can actually raise prices? >> no, not yet. you know, we see the pricing and want to be stable in the near future. the growth is primarily to volume. we have benefited from consolidation. we have benefitted from common pleas some companies deciding to start investing so that it can emerge outs of this genre. >> mr. gopalakrishnan, you said prices you can't really actually raise prices, but we know that wages have been going up. how much is that putting a squeeze on your margin? >> so in the second half when we are increasing compensation in end ya and slightly outside india, it is going to impact the margin by about 200 basis points. but we felt that, you know, tsd
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the right thing to do. we have done well in the first had a. in the beginning of the year, we did not give a compensation incrcr to our employees. but right now, we've decided to give an increase. >> bob parker in london here. good day to you. you know, our slew sview, i'd b interested in your thoughts on to what extent that poses a problem for you. >> the volatility is within a narrow range, then we are able to manage that.
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we are able to deal with the rupee appreciating against the yen. so we did the guidance at 47 rupees to a dollar. traditionally, we don't use quarter ending number, but we will use 47 this time. if it is within the narrow rain because of the heading, we were able to manage. if it goes above that, that's not so good. >> mr. gopalakrishnagopalakrish julia here in the u.s. i'm curious how much competition you're seeing from hewlett packard and others that are expanding very fast in india. >> we are able to maintain our relationship with our clients. in fact, in some of the ol consolidation, we have benefited. we have been competing with these companies for many years now, but it's not really new.
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so we have been able to sustain or maintain or position in the industry. >> mr. gopalakrishnan, it's very good of you to join us here on cnbc. thank you very much for your time. coming up next, we'll get final thoughts from our best host, bob parker.
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final thoughts from bob parker, of credit suisse. bob, as we plow through this last quarter, what are sort of the best ideas right now that you've got, that you're telling clients for investment advice? >> first of all, on the foreign exchange markets, i think one has to stay short against the emerging market particularly in asia and latin america. i think the currency to watch, which i'm sure is going to appreciate at some stage in 2010, is the chinese renminbi, which is now the most undervalued currency in the world. on fixed income, stay with corporate credit. and particularly, exit government bonds.
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i think government bond yields are far too low. in equity markets, i think it's now time to rotate back into quality underleveraged, high dividend large cap companies. having said that, i think 2010 is going to be a year where equity markets will be the strong asset class. if you ask the question where is the next bubble, i would answer by saying, we don't have any market bubbles today. as we progress through 2010, we build up an equity market bubble towards the end of next year. >> yeah. capital economics has sort of put it neatly. are we in the mother of all cap bounces at the moment? >> that depends how you define a dead cat bounce. one of the themes is going to be this growth differential. the same would apply in corporate earnings growth.
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and the developed world is going to have a period of mediocre growth. one theme, which i think is interesting at the moment, is that if you are concerned about the strong performance in emerging markets being overstretched, then rotate back into developed markets, but into companies which actually generate most of their emerging -- most of their earnings from emerging markets. so you've got banks, telephone companies, utilities and a whole range of industrial companies in developed markets, which are cheap relative to emerging markets. >> bob, thank you very much, bob parker management of credit suis suisse. >> big news is out. just 45 minutes ago, u.s. president barack obama has won the nobel peace prize. the norwegian committee gave obama the prize for hope for a better future. since taking office in january this year, obama worked to
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restart the stalled middle east peace process as well as calling for nuclear dirs arm mament. up next, we're expecting trade deficit numbers forever august. there ts is going to be a presentation this afternoon by the government.
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all right. it's time to find out what's coming up on "squawk box" in just under nine minutes. becky is with us. hey, beck. >> good morning, ross. good morning, everybody. it is friday, but we are not going to slide into the weekend easily. we have a big finish to this week of "squawk box" today. we have an exclusive conversation with carl icon, the investors outlook on the markets and what he thinks about carol barts of yahoo!. plus, we're going to get a preview from one of his right hand men, austin goldby. we'll get a chance to talk to him about what's been happening
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with the dollar and the nobel peace prize today. plus, today marks two years since the s&p and the dow hit all-time highs. we're going to be talking with a person who knows it all on treat while. banking us is don powell, current bank of america board member wbl plus we'll by joined by top executives from earn sten young. and i have some guest co-hosts with me today, stick around. "squawk box" is coming up at the top of the hour. >> any more than that? >> yeah. one of them is right here, but i'm not going to show you here. i'm going to leave you hanging. >> we just have to watch. >> that's right. you have to watch to find out. we'll see you later.
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have a great weekend. >> thanks, beck. you, too. >> okay. kevin cook, market analyst with fixed investment is still with us. he's gefg us a look ahead at the day on wall street. kevin, futures are pointing down. how do you expect the markets to the move today? >> well, you know, historically nk the very low. and with the dollar continuing to weaken, knob spekdz the trade dif set to rise any time soon. we nooz need to see if we get get through that 1070 level on the s&p before we go higher. >> kevin, looking ahead to next week, we're going to get earnings reports from the major financials, citi, goldman,
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jpmorgan, b of a, they're all reporting next week. what do you expect to hear from them? >> well, i mean, the banks are in a sweet spot right now. they've got the back stop from the fed and it's positive sloping yield curve that, you know, really just gives them a way to create returns here. we're not hearing any bad news about commercial loan portfolios yet and, you know, they've written this stuff down. so i think that banks are going to continue to just create the returns that they can with this yield curve in the shape that it's in and with no real inflation on the horizon. >> kevin, i want to go back to what you just mentioned about these commercial loans. there was a report earlier this week that the banks have been very slow to raelsz their commercial property losses. how big of a problem could this be down the road and when do you expect that shoe to drop? >> well, it's really about being able to refinance things. so if they're -- for instance, wells fargo inherited this
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enormous portfolio on the wachovia acquisition of, say, $225 billion and if the practice was, for the past three years, that wachovia was writing some really bad loans, wells fargo is in the position now, do they keep rolling this forward or do they take all the losses now? but it's a matter of loans coming through and needing to be refinanced and at what rate. >> kevin, we're going to have to leave it there. thank you so much for your thoughts. kevin cook, peak fixed investments. that's it for today's show. i'm julia boorstin. >> i'm respect respect here n r here in europe. >> and in asia, i'm christine tan. thank you for your company on "worldwide exchange." ♪
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good morning, everybody. a "squawk box" exclusive. carl icahn speaking out on the economy and more. this year's nobel peace prize winner, u.s. president barack obama. it is friday, october 9th. "squawk box" begegright now. >> good morning, everyone. welcome to "squawk box" here on cnbc. i'm tyler mathisen. i'm lucky enough to spend the day with becky quick. >> i'm the lucky one here. >> thanks for inviting me back.
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>> thank you for coming back. >> it's wonderful to be here. joe and carl are off this morning. hope they can get back soon. lots to get to today including becky's exclusive conversation with carl icahn. about an hour ago, a nor weekan nobel committee says the u.s. -- i'm from norway. >> you are? >> yes, i am. pb barack obama received the award for his ability to connect people. the committee says only very rarely has a person to the same extent as obama captured the worl's attention and given its people hope for a better future. his diplomacy is founded in the concept that those who are to lead the world must do so on the basis of values and attitudes that are shared by the majority of the world's population. >> i don't know. the man has been

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