tv Worldwide Exchange CNBC February 5, 2010 4:00am-6:00am EST
about the global recovery picture. that is pulling the miners down 2.3%. let's check the ftse cnbc global 300 index. it should be showing a negative session. down heavily, 4,215. ross, quite a bleak picture here in asia. >> yeah, christine, we have continued that sell-off here in europe. we're off the session lows an hour into the trading day. sectors that are weak are financial services, resources, insurance, construction and gas. teleconis the only sector that is up. we had vodafone coming out and supporting that market. nicole, a very good morning to you. >> a very good morning to you, ross. here in the united states, we're just minutes past 4 oshg in the morning. markets are relatively flat across the board after yesterday's huge sell-off. the dow is actually up above
fair value 17 points right now. recently narrowing to its worst day since july. but it is jobs, jobs, jobs here in the united states. we're looking to see if the market will turn the tide on that news. christine 3/. >> nicole, joining us for the next hour is jewelace and gentlemen, thank you very much for being with us. anata, first of all, we're seeing this reaction in the stock markets. we've known about these debt problems in europe, greece, spain, portugal. why such a reaction from the equity markets now? >> i think the question to ask is why wasn't there a reaction earlier? i mean, the stock market is always known to react like human beings. they ignore the problem until it
stares them in their face. that's exactly what they're doing. >> but it finally hit the markets. >> yes. they were focusing on the liquidity from last year. central banks and the government underwrite every failure. that's what they found on at the time. everybody else could be put on the back burner. this is, again, back to the front burner. that's how they behave. >> andrew, are the debt problems in europe as bad as the markets are making it out to be? >> i think any talk of a generalized sovereign debt problem is well overdone. there are certain weaknesses in particular sovereign credits, particularly in -- as we've mentioned, in the eu. to the extent that there's an impact on asia, it lacks because of the sovereign credit issues and the eu countries in particular and more about concerns over growth. and i wonder to what extent the u.s. jobs numbers might have been a more important driver for
recent equity market moves. >> yeah. we'll come off of that, andrew. i just want to get your sense, though, what it is that we fear most with the euro zone debt crisis. what is it reasonable to fear? is it reasonable to fear any kind of default or not? that seems to me to be stretching it. >> absolutely. i think we've downgraded greece to bbb plus in stages 2009. although bbb plus is still a high rating on the global scale and we see greece still at some distance of default. the cost of borrowing has risen sharply in the last few weeks. my colleagues have done some research showing that we expect
19% of their gdp. for greece, the number is 2 %, which is not so far above the average for the block as a whole. there are some concerns that grooeps grooets obviously doesn't have the opportunity to devalue. and this has led to, again, as i would describe it, quite overheated talk of a break yun of the euro area, of greece leaving the single currency block. i think that kind of talk is overdone, very much so. i don't think how it would serve greece to dump the euro and bring back the dachma. it wouldn't solve any underlying problems and it would have a host of practical difficulties. >> andrew, i have a question for you.
>> the uk has countersy block behind it and its fiscal deficit is equally high and it has to he restructure its economy. so why is the uk having a higher credit rating than greece, for example? >> well, the uk has a very wealthy, diverse economy. i'm not sure of the structure problems in the uk are somewhere near as severe as they are in greece. the uk is aaa. we have said that the chances of cha changing are less than 50%. and therefore, the uk remains aaa with a stable outlook. you mentioned that the uk doesn't have a currency block behind it. an old one in the uk and not something that probably we want to get into here. but i'm not sure that the uk would be fairing back if it were
a member of the euro area. after all, the 25% devaluation that the uk has experienced since mid 2009 has been one of the factors that support the uk's growth outlook. >> andrew, this is nicole lapin in the united states. do you think the jobs number will be overshadowed by these fears of sovereign debt? >> well, i think the most important factor for the -- that we should be focusing on for sovereign credit in particular is the long-term structural issues and in the closer term, the growth outlook. and i think the jobs numbers bear a lot more directly on the global growth outlook, not that we should put too much weight on
one month's numbers than the sovereign debt or the credit profile issues over a number of countries around the world. so i think the jobs numbers will certainly be an important global focus. >> andrew calhoun, director of sovereign group at fitch ratings. thank you so much for being with us. our guest host stays with us for the hour. let's get you to the top stories making news around the globe right now. in the united states, we are following the january jobs report out at 8:30 a.m. new york time. the dow jones forecast calls for a no change in nonfarm payrolls, following a loss of 85,000 in december. the unemployment rate is seen ticking up to 10.1%, a 26-year high. this report includes the annual benchmark revision, though, of payrolls through march of last year. so that is expected to show an additional 800,000 jobs were lost during the recession, bringing the total to more than 8 million.
and the world's top finance ministers and central bankers will brave arctic weather conditions when they meet in canada this weekend. timothy geithner is expected to push g-7 counterparts to keep sfim ewe husband aids in place. the global recovery could falter a country's rely too much on still sluggish spending by consumers and businesses. he's expected to face questions about u.s. debt to tighten banking regulations. ross, we will be watching. >> we certainly will. meanwhile, portugal's finance minister has urged the country's parliament not to pass a region funding bill. it would increase the funding for the region, but the governor warned it would have serious consequences for the country's finances and credibility. the full vote is due later today. just next door, investors concerned about spain's finances have mounted. but speaking with u.s. president obama on a visit to washington,
the spanish prime minister defended the health visit country's economy, addressing concerns about the ballooning debt. he had that he did not share the market's fears and added that the fundamentals of the economy was sound. >> ross, here in asia, watching toyota motor shares gaining ground today, closing up 1% in tokyo trade. this despite a carmaker may have to recall its hybrid prius cars in japan to repair a software glitch related to its braking functions. this comes after a probe is launched into the prius problems. better than expected fourth quarter results at singapore based dbs group. net profit for the quarter rose
67% to $348 million u.s. marking two straight zart quarters for profit. strong fee income and higher loans helped mitigate a surge in bad debt charges. and we'll be speak, pierre gupta a little later on in the show, ross. >> yeah, don't miss that. still to come, we spoke to the ceos of a chemical company this morning. find out what they told us about 2010. a little later, it is super bowl weekend. and the last spot sold out for ads. we'll look at how things have changed. %%%%%%%%%%%%
as you mentioned. that is really going to be smt spotlight today. but there are a couple other things of no december credit consumer figures or the amount of debt outstanding will be out at 3:00 p.m. new york time. the fed president james bullard is speaking at a monetary policy forum in washington university in st. louis at 5:20 p.m. s he is a voter on the fomc this year. there is a handful of earnings, as well, that we'll be watching. we'll hear from aetna, aon, simon property, tyson foods and weyerhaeuser. >> as far as the fixed income markets are concerned, despite all the concerns about debt, the risk appetite has flowed out of the stock markets. bund yields are just falling a little bit, 3.14%. and that's similarly the case for treasuries. they slipped in asian trade. but ahead of the jobs report,
the yield right now has just come back from that earlier high. so the yield on the 10-year note, the 3.59%. dollar/yen, 89.63. euro/dollar, just nudged below the 1.40 mark. actually, i can't read that. it's 1.36. sorry. my eyesight is going. joining us for more, sam stanley, from halo financial. it's age, sam. the euro has been pressured by all these concerns about sovereign default or risk of it or sovereign debt. at the same time, of course, we're going to get a view on u.s. growth. which way is out in the end? >> well, at the end of the day, we've seen the risks taken off the table. everyone has sold the euro, etcetera. so really, we're going to be looking at nonfarm payrolls for the next move to support that.
if it's a good figure, we should see a spike up in the euro and sydney. the dollar will probably sell off. and it's a bad figure, then it's going to start pushing through those support levels. and we just keep on breaking them on the way down, ross. it's a major figure. it's always a major figure nonfarm payrolls friday, but even more so i think now. >> sam, it's nicole lapin in the united states. should we be worried about sovereign debt levels in the i'd, as well? >> not really. they are a concern. it has been brought up, but really, nothing compared to what eve seen in greece, spain and portugal at the moment. i mean, the credit default swaps there are blowing out massively at the moment. i don't think that's something that the market is particularly worried about as we speak. >> sam, this is van from
singapore. let's step away from the jobs report and the benchmarks will tell us what was important one year ago is completely a different number. in the state of the union address, the u.s. president said he would like to double toous exports in five years and president sarkozy called for three. how are they going to get there? >> well, really, it's going to be a challenge for both of them. obama clearly wants to get its way out of the slowdown through exports. the u.s. is a great manufacturer. but all of a sudden, that's going the other way around. and to become a net importer and obviously, the buyer of last resort, they need the dollar to be relatively -- i wouldn't say weak, but they don't want the dollar to be creatively strong. they need to invest in their own infrastructure, obviously, and they need to steer clear of trade barriers, as well.
that is the first thing. with regard to sarkozy, he's come out and talked about the strong euro. he's going to be out of the moon with the euro falling to about 9% as it has for the last couple of months. for them, i've got a strong base in germany and france. make sure they keep their wages low. you tend to get brought up by the strong unions over there. they should be okay. >> this is christine in china. we know trade tensions have been rising between the u.s. and china. are you surprised? >> with the yen situation? >> with the chinese coming out to defend its yen pold policy. it's no surprise, right? >> absolutely not. how many times have we seen this, christine? it happens all the time. i think the timing is interesting. tensions are very, very high at the moment between china and the u.s. there's a number of reasons why, but certainly president obama
meeting with the dalai lama wouldn't have helped. so i think interesting timing. but we get it all the time and really, some things never change. >> van, what's your take? the u.s. wants the chinese to do something about its currency, but is this really the right way to do it? >> they don't want china to revalue. the more pressure you get from them. maybe the u.s. producers in china want the yuan to be weaker valued. >> so it's reverse psychology? >> perhaps. because the more they ask in public, the less they're going to get. >> it's always reverse psychology. thanks very much. stan, we'll let you go. reverse psychology in the stock
markets. no one can predict those. today in europe, we are down. been about a percent lower in most of the markets. in the uk, it's really all about what's going on with the banks and commodity sectors. british airways actually surprised us. it's on the up side this morning. there we are at the bottom there. 0.6% higher. that's after it came on up out with a surprising operating profit for the third quarter and mainly down to cost cutting. what about germany? sylvia is there one day after the ecb and at the heart of what's going on with our debt. it's strange, sylvia, isn't it? there's nothing we didn't know three months ago when the markets are going up that we don't know today. >> well, there's nothing we didn't know five years ago, maybe. we've known from the word go that there were things building up there. i hasten, i don't want to keep saying on the periphery of the
euro zone. it's not the periphery if we're talking about spain, portugal and greece. now it's payback time. when they were there for the free ride with cheap money, it helped countries like germany because we could sell our goods to them. so we're in this together now and it has to be solved and resolved. but i think many of these concerns might be overstated right now. the underlying trend in there is something else. the euro, for a long time, by default was overvalued. and now everybody is scraping the bottom of the barrel to see why the euro should be maybe fair valued or lower valued again. things like greece and the other concerns about sovereign debt play into that very nicely. remember, we've been complaining about it that the euro was too high, too high, and exporters couldn't sell their goods. now everybody is complaining again. >> on the up side, comps are doing fairly well. the deutsche telekom might want
to cash in on that. >> yeah, that and exactly the point. they're cashing in at the moment. deutsche telekom has never quite made a t-mobile usa work because they're limping very slowly behind the competition, behind at&t w behind verizon. t-mobile u.s. can't quite make it. they've been woulding various potential partners for a link up, for a merger, knocking on doors and saying, do you want to take this off our hands and buy it? they couldn't quite get that working. now, of course, the latest reports are suggesting that they're preparing an ipo in the u.s., want to spin it off, float it there and maybe that way they can see how they cash in on it. the market likes it. there's an inkling in there that deutsche telekom, the mothership might be shutting off t-mobile usa sometime in the near future
because so far they haven't had much fun with it. >> and the swiss international bank was intervening in the stock markets overnight. let's get more. carolin is in zurich. >> the smi is moving lower and lower. sangenta is the only green stock that is in positive territory, up by 0.6% losing some of its earlier gains. syngenta posted yrl numbers in line with expectations. the top line was a bit stronger, up 1% on the year. but what the market really seems to like is the $750 million that the company is returning to its shareholders and especially the $200 million in the form of a share buyback here. now, why return all that money to your shareholders? we did put that question to the ceo of that business, mr. mike mac. >> we're giving the money because we anticipate extremely strong cash flows in 2010. part of that will be driven on
some earnings growth on the back of strong -- we expect a strong year from 2010. >> we also had earnings out from swiss private bank, julius baer. that is in line with all the other financials. credit suisse is down 2.5% her . julius baer posted a profit higher than anticipated, up 7% here. but what the market seems to be focusing on is that net new money flows for 2009 came in lower than anticipated. we saw inflows of only 5 billion francs in that year. when we talked to the ceo of that business earlier on, we asked him how his outlook wham about attract accounting more new money in the medium term. >> clearly, the market cycle is positive. we can clearly be at the higher end of that range. >> that was with mr. boris
collardi, ceo of julius baer. now back to christine in singapore. >> carolin, thank you very much for that. coming up on "worldwide exchange," we will hear from china's biggest bank ceo. he'll tell us why he has no intention of easing up on ambitious growth plans. >> and we have numbers coming out in the uk any moment now.
this is "worldwide exchange." the headlines from around the globe. >> here in asia, worries about debt problems sparking a sell-off in the region. the nikkei sinks to a two-month closing low. >> in europe, the spreads of equity markets are down across the continent. >> in the united states, today's jobs report will likely see losses during the great recession have been huge and are about to get even bigger. >> producer prices have just come out in the uk. 3.8% year on year. the consensus was for 3.7% annual rate. it's the highest annual rate
since december 2008. core prices up 2.5%. a little less than the consensus 276%. that is stronger than the 6.3%. so the annual rate of input prices is certainly higher than expected and the annual rate of output prices, again, a little higher than expected. sterling, not a huge amount of reaction to that. as you can see, still trading at around 1.5683 against the dollar. dara march is the global head of equity schak at kalon. we'll put a halt to inflation? >> yeah. we're back in that feeling like growth activity, the question mark is overhanging.
>> as we saw the first time when we were in this position, it was slower than expected. we're still getting up theside surprises on inflation. in my mind, it will keep the mpc in line again. >> the confirmation for now, there is no more qe. but it didn't really happen. why? >> if they had said something categorical, that's the end of qe, we need to do something else, then fine, you would have had the sterling push. what you had was them saying, we're done with it for now, would you we're keeping our options open. it wasn't enough to get the bulls energized on the back of that. i think they're waiting for the inflation report. >> daragh, stig with us. right now, the global equities are weaker. the ftse cnbc global 300 is down
by 40 points. christine, what kind of day have we had in asia? >> we're seeing a sell-off here in asia, ross. what spooked investors was the debt concerns we saw in europe and the rising jobless claims in the u.s. ahead of the nonfarm payroll numbers we saw today. investors using this as an excuse to sell. the stronger yen really hurting the exporters. the hang seng tanking 3.3%. the shanghai market down 1.9%. risk aversion in south korea, as well. the kospi is right now trading off more than 2% if we flip the boards. the bottom day sensex -- well, 3%, actually. the bombay sensex is down 276% and the aussie markets off 2.3%. so a really bleak picture here in asia. nicole. >> and we have markets relatively flat across the board here in the united states. the dow is down below -- 7
points below fair value right now. it was up just about a half an hour ago. this is after the dow tumbled 268 points yesterday to 10,002. that is the worst day since july. but of course, the big focus in the united states, jobs, jobs, jobs, the jobs report coming out in a couple of hours. so the question is, will the market turn on that news? let's bring back in daragh maher, get head of foreign change at the kalon report. do you think the markets will come down? >> i think if we get enough surprise, it will provide some influence into the market. >> we were looking for the first positive print in a few years and then we got dune side disappointment. so yeah, there is scope for nonfarm payrolls to provide a
turning point. i don't know whether it comes today. we're not that far from consensus. it would really take this momentum out of the market. >> hey, dare ragh, what would h to happen in europe for the rba to put off any rate hike? >> well, i think in general everyone is worried about debt problems in europe, not just the rba. what the markets are looking for in a way is greater clarity. whether greece is going to do it on its own and in a way, whether there will be more explicit support for greece whether that's proved not to be the case. so the rba, obviously, one of their considerations is europe. to my mind, their biggest consideration is commodity and demand and that looks very, very strong despite the retreat we've seen in prices. i think ultimately the rba will be hiking again this year no matter what has haepd in europe. >> the question, at the beginning of the year, we had
forecasts of 9% to 10% growth in china and commodities. so to what extent the australian dollar and commodities have priced in that good news. is the risk skewed on the downside for the currencies down under? >> i don't think so. it's been quite a sizable pullback on the aussie dollar and the aussie crosses. on our trading signals, most of them are suggesting the aussie dollar is oversold. so, in fact, there's too much pessimism now in the australian dollar. just this morning, we recognized buying it against sterling. i don't think it's any more, only because we've had this pullback in the aussie. >> and daragh, just your comments on the swiss national bank intervening overnight. do you think we're going to get much more intervention? >> well, it's nice to have somebody buying the euro. they seemed more comfortable with the economy and more tolerant of strength. but now we have new global doubts and particularly in the
context of how the euro zone might perform. so it makes sense to their mind to be in the market again to prevent excessive strength. so i think yes, i think the short answer is yes, they will be in the market again if the market keep pressuring the swiss franc. >> okay. daragh, we'll leave it there, daragh maher from calyon. coming up next, we'll bring you an exclusive interview with southeast asia's biggest bank, dbs group. stick around.
>> and welcome back to "worldwide exchange." it's raining and drizzling just a little bit here in singapore. let's check on the trading day over in tokyo and check in on what's happening there with asuka kondo. >> thanks, christine. tokyo stocks had a sharp sell-off on friday. there was high exposure in
europe after the euro pounced overnight about sovereign debt problems in europe. the nikkei 225 closed at a two-month low. sony and hitachi were stable as they both upgraded their fiscal 2009 earnings outlook the previous day. toyota motors shares rose by 9%. traders also said that its shares were brought back as they once fell below its volume per share of 3,280 yen yesterday. but investors were still concerned with the brake problem on the prius hybrid. the carmaker has decided to recall some 2,070 units to fix
the problem. panasonic said that its net profits for the third quarter returned to black aid by cost reductions and a domestic stimulus program. for the full year ending march, the firm raised its operating profit outlook to 1,50 billion yen to 120 billion yen. that was the nikkei business report. back to you, christine. >> saijal. >> what a day. i investors, you get a sense of worry about the european debt problems. we saw heavy losses. let me talk about the greater china region because the hang seng index fell to a five-month low. very weak performance there. shanghai composite putting in its third week of losses there. and taiwan was down 4% there. if we take a look at the hong
kong blue chip, some of these plays, take a look at lenovo, down 2.4%. it posted a small profit, $79.5 million. but still, that stock sinking. in south korea, it was the banking stocks that led exporters there. speaking of banks, i want to talk about dbs, putting in very strong numbers. 67% rise in the q4 profits. 493 million singapore dollars. so easily beating expect ages. part of the reason for that is a soft fee in commission income jumped quite a bit, 36%. low growth is very important for banks and specifically, housing loans up about 7% from singapore in hong kong, as well. the results, though, however, clouded by its exposure and the
nonperforming loans jumped 43%. a big part of that had to do with dubai world. i sat down with the ceo and asked him about dubai and the new changes when it comes to capital adequacy and, of course, the results. >> we're pleased with the results because of two reasons. one, there is strong growth. we showed top growth in the line in revenue. and that speaks to the fact that underlying businesses have been doing would it well. given the economic environment is actually pretty poch. and the good news is that interest margins or total interest earnings went up 4%. not as good because everybody knows dbs is deposit surplus bank and we tend to be negatively impacted in a downward interest rate cycle. so to be able to grow in that environment is actually pretty positive.
>> how much of the 384 million of that bad debt was related to dubai world? >> well, a total npas, nonperforming assets, went up substantially in this last quarter. and all of that was to do with markets outside of our core market. so that did not include asia, southeast asia, at all. we made a disclosure a couple of months ago that we had a single loan to dubai world at the holding company. and we have moved that outstanding into a nonperforming category. quite frankly, i think we've been conservative in that regard because that is nonperforming. technically, it wouldn't have had to move it into nonperforming. after moving it, we've chosen to wait a little bit for it. >> there's a lot of concern that
there's property bubbles brewing in china, in hong kong, a lesser extent in singapore. how do you feel about that? does that concern you? >> you have to worry about asset price bubble in china and hong kong because values have gone up too far too fast. frankly, as any prudent bank, we do stress testing. that includes not only direct exposure to property, but exposure of collapse property. >> you had mentioned that you may to preserve capital because of the new regulatory requirements and i'm talking about basur three. how big of a challenge is this going to pose? >> first of all, i think the out in terms of what the regulatory environment and regulatory climate is likely to be. frankly, this is a political hot potato right now. all banks are going to have to struggle with this situation.
i think the issues around basul three will have to be debated for a long period of time. the implications of a bank are very small. the implications for some of the banks in germany and the rest of the world and some of the major trading bank in the u.s. are very, very substantial. we're extremely well capitalized. our tier one ratio means that it's unlikely that we'll be required to go out and raise more capital. >> that was piyush gupta. christine. >> this ceo is still very ambitious on growth, despite what's happening in the global economy. >> that's right. and he talked about the capital constraints. but he says still very ambitious. and he did outline a plan. very interesting. he's aiming to achieve 60% of the revenue outside of singapore over the next five years. now, of course, traditionally,
their focus on singapore, 60% or so, comes from singapore. the rest just out, including hong kong. but he wants to change that mix. he talked about it being 40% in singapore, 30% in southeast asia and 30% in greater china regions. so. >> and when i asked him about organic or inorganic, i don't think he's ruling inorganic out. >> he's just a few months into the job, right? >> a few months. >> we'll see what happens. let's cross over to india and check in on the trading day there. ayesha faridi joins us live from mumbai. ayesha. >> thanks for that, christine. in tandem with the rest of the globe, vicious cuts for what you're seeing this friday. we've gotten very close to breaking below the 4,700 mark, which sa crucial level that most traders are eyeing out for. what happens once we get the 4,700 mark, the next level is 4613 for the nifty, which is the
200 day moving average. that is the key level that we're watching out for. reliance industries, the key heavyweight index stock like that has hit a 52-week low. you are seeing the nifty stocks bleeding under pressure. we saw some bought of recovery kicking in in the middle part of today's trading session. but the market has given up its gains. and across the broader markets, you have the small cap index staring down by over 3 odd percent. just a handful of gainers. unilever, would see some buying, so it flips lots between the rest of the green. total indices at this point in time are suffering in pain. you have the entire sugar space which is tumbling. well really, that is what is happening in our markets. oil and gas, metals, that is giving up most of its gains.
and you have domestic funds waiting on the sidelines, except buying in the second half. which is why you're seeing some bit of stocks issue back into the green. the float in the system are largely on the side. and more importantly, the selling is coming on very high volumes. we've got another two hours of trading, as well, so let's see what tomorrow throws up for us. that is back to you, christine. >> ayesha faridi, live in mumbai. thank you very much for that. the biannual singapore air show 2010 opens its doors to the public this weekend sri brings us a preview of what to expect. >> reporter: this is asia's biggest aviation event. this is where the manufacturers of commercial airlines and the private jets all come to showcase their wears. let's find out what's going on.
this is the air 3542 currently in development. it's a multi purpose fighter aircraft and it can go more than 176 times the speed of sound. let's take it for a spin. and all the action is not just on the ground. it's also up in the air. a flying display come prizing air forces from singapore, australia and the united states all ready to surprise the crowd. get some practice in.
buckle up your seats. it's going to be a bumpy ride. there's a long line in the advancement of aerospace for your viewing pleasure. that just about wraps it up for cnbc's coverage of the singapore air show 2010. the next show will be in 2012. and i think i've just got enough reading material to last me until then. back to you there. >> sounds terribly exciting. we should be there. anantha, do you see the sell-off as a buying opportunity? >> in asia, we are not there, but we are getting there. but i don't think i would by terribly in a rush to buy into stocks in advanced nations. >> why is that? >> i think the underlying dynamics of growth, there is no de-lev raeming here, you're talking about stangz and strong
growth in credit. so i think the dynamics is fairly strong here. so we would view any sell-off as an opportunity to buy here. >> do you think we have seen the worst of the sell-off or is this just a blip today? >> i don't think we have seen it all yet. i think there is still more to come. we began with the markets focused on how to manage the growth of recovery. they completely forgot the other aspect which is in a deleveraging cycle, growth can disappoint. we need to get that into the price and then the market will become more attractive. >> if you had to buy into the market, is there a safe haven sector you're looking at or would you buy gold, commodities? >> i think maybe we should look at the agricultural commodities. they did perform last year, so we should buy them.
and when you talk about gold, china refusing to play ball and then you have the euro zone problems. the sterling is also an issue. i think gold might be in our portfolios until 2012. then if you look at the asian markets, you have to focus on the big ones. but there are no safe havens in two days' work. >> what prices or valuation metrics do you want to see before you g back in at a lower level? >> i think in asia, for example, the price to book went from two to one last ma. i think we're looking at 1 to 5 times then probably asia looks interesting. >> what about europe? >> the issue of european governments being able to convince the taxpayers to bail out the nations like greece, it will take a long time. so i think in europe we aren't
exactly looking at a particular value at this point in time. i think there's a lot of blood letting to happen. >> later on today we have nebs out from the u.s. for unemployment. what kind of number would give the market a lift? >> i really am skeptical that we are going to see a number in the range of plus 30 to plus 50. >> so what happens in the meantime? >> we entered the year with valuations not supportive of jumping into it and we told clients to wait for a correction to buy in the risky assets. we are not quite there yet, but we are waiting to see the correction and we're getting into some markets in asia. so in that sense we are happening this is playing out. >> so a lot of wait and see,
watching to see highs and lows? >> yeah. perhaps next week would be an interesting buying opportunity in asia. let's see. >> okay. all right. thank you very much for talking to us. thank you very much for being our guest host. now you know you can get all the top stories in one place and they will cover on "worldwide exchange" on cnbc's very own website and on a lighter note, you can find out why even in the fair market people still want to put their best leg forward. find out how the business of helping people to have sexy legs is still thriving. forget about the next shoe to drop. it's all about the shoes to help you shape up. ross, i'm sure you agree. >> i don't think there's anybody on this show that need to worry about the shape of their legs, christine. >> you don't see our legs to begin, right? coming up on "worldwide exchange," what has pushed things over the edge and how do
welcome to "worldwide exchange." the headlines making news today. in the united states, today's jobs report will likely show losses during the great recession has been huge and are likely to get even bigger. >> worries about europe's debt problems sparking a sell-off here in asia. the nikkei sinks to a two-month closing low. >> and here in europe, that market has his new session lows. >> nice to have you here with us on "worldwide exchange" today. i'm nicole lapin in the united states just after 5:00 in the morning. on wall street, let's get you started with our global trading day. markets are still guy guesting after yesterday's big sell-off. the dow is down about 30 below fair value right now. just in the last couple of minutes, it has humbled just a little bit more.
the dow tumbled 268 points to 10,002, down 7% from january's highs. the s&p is about seven below fair value right now. we have a big jobs report, of course, coming out in the united states today. and in a couple of hours. we're trying to see if the markets will calm a little bit, but it doesn't look like a turn around. >> no. losses of between 2 and 2.75%. we're just about at the session low. we're off 1.6% for the ftse 100, 174% for the xetra dax. over 2% for the cac 40 and smi. construction, big losers. ing, dutch financial services group, off 5.5%. and the likes of rio tinto, the miner, off nearly 4%, as well, christine. >> we're seeing a sell-off here in equity markets, as well. as for the currency markets, a
risk aversion is setting in. the euro is getting hammered against the dollar right now, 1.3671 given concerns about debt problems in greece, portugal and spain. euro/sterling, 0.8705. a lot of safe haven going into the yen, sending the yen higher and putting pressure on the exporters in japan. ross, back to you. >> is this just delayed reaction to debt problems we knew about and growth worries we had last year? is it an excuse to take some profit? is it a buying opportunity? joining us is james bevan, chief investigate officer at ccla management and also in paris, david cope, from cumberland advisers. james, is this a crisis or actually is this a nesbit of profit taking which you regard as a buying opportunity? probably neither. if you say to me what is going on, it is very clear that markets are now responding to the reality the central banks are stepping back from the table and governments have indicated they're not backing to continue to support markets.
therefore, the big question to markets is where is this growth going come from and who will deal with the high levels particularly if we're now into the environment where st. louis banks are more minded to tighten rather than loosen. this is on the flight to safety. >> david, what do you do? >> well, i think james characterized it well. the first round coming out of the post lehman crisis was of the liquidity crisis. central banks have the tools to address a liquidity crisis and they did it in large -- with large amounts, very robustly worldwide. now we have a different sort of a fix here. we have a sole ventsy crisis and
that has moved into sovereign debt. that requires a political discipline. the markets are forcing that discipline and the reaction is a pushback. we're going to see it in greece with the unions in the streets. we saw it in portugal with what was the makings of a failed government bond auction. so we now have to confront that tension. my view is it will ultimately be resolved because the markets will force the resolution of governments to behave themselves, but it won't be pleasant while it happens. >> david, this is christine. when you say sovereignsy crisis, what do we hear the most? a default? sure that's unlikely. >> it's unlikely that a government in the end defaults, unless it runs out of money, like argentina. so what happens is governments get forced to push back on their budgets and now they have to go through a 34ri8 political fight. meanwhile, the markets have a very large uncertainty premium and we're seeing that evolve in
credit default price swapping and credit spreads. in the end, no government ever pays off its debt. it reschedules the debt. and that's probably how this all works out. the markets don't know what to do with this during the uncertainty period and they're reflecting the uncertainty in these violent moves in the currencies, which is the adjustment process now worldwide. >> so what is the owning, david? does that mean we're going to see a double dip recession? >> well, we're going to see a period of weakness in the second half of this year. we're going to see it in the u.s. after the inventory restocking runs its full course. we're going to see it in labor numbers which will be horrible for most of this year. and we're going to see that in the rest of the mature economies, as well, to a lesser extent. on the other hand, that means central banks do not raise interest rates and that we do not see high inflation risk and that we're going to be looking at a g-4 interest rate of zero
to 1% all of this year, maybe all of next year. so liquidity drivers will again power markets higher once we get through this typhoon or hurricane or whatever you want to call it the david, in terms of stock selection, what interests me at the moment is the companies are robust and have strong free cash flows, high dividend yield and are exposed to the faster growing economies of the world. >> we think the tech sector is in for a very long cycle because the companies you just described have cash available. that cash earns next to zero if they don't deploy it. they can deploy it in capital expenditures in the tech sector with very fast recovery. and so the focus will be on cap ex, not labor. that's why this is a very slow job growth recovery and it's
fragile on the labor side and labor income is not going to be rising for a while. but the tech sector could have a very long cycle here. >> david, it's nicole lapin in the united states. we'll focus in on jobs in just a moment. but i want to get your thoughts on pricing sovereign debt. yesterday, a lot of traders were trying to figure that out. >> nicole, it's a very difficult issue with the pricing of sovereign debt and credit default swaps. and the complexities relate to the currency. so you see the credit default swap price of the united states sovereign debt rise. it trades in euro. and you see that price of the japanese credit default swap rise it's denominated in u.s. dollar. obviously, a sovereign cannot denominate in its own currency. on the other hand, in the euro zone, you do not have a central government, so you have the pricing of the various sovereign debt issuers.
and those have exploded in terms of premium relative to others. there is a reason that those sovereign debt pricing default -- credit default swaps are reflecting something. they are not reflecting the fact that japan is going to default on its debt. it will not. it has $1 trillion in reserves, issues debt in yen and it can front yen to pay. so this is not a default risk, which says it's something else. the something else could be the policy risk. and i believe it's the policy risk that is at hand. in japan, we have some predictability in policy. in the i'd, we have massive change in policy and we're not sure where it's taking us so the credit default swap is up. and in europe, we have various states in various levels of policy disarray. greece, portugal, spain, which proposed to cut back its pension.
retirement age and then reversed itself 48 hours ago. so its policy, which is being reflected in these prices in our vi view. >> sure. but as you know, david, policy takes a long time. what you do in the meantime is what you saw yesterday in overreaction? >> this is nerve-racking for investors and very complex because of the interrelationship of these currencies and various sovereign debt issuers. so investors have two choices. they can run to cash and sell. in this case been they've gone to an asset class that yields next to zero and will probably appeared to do so for years. they can focus on the places in the world where you're likely to get more growth. merging market asia is one of them, for example. even as china was going through
change, in the long run, the chinese economy is going to be larger, more profitable and much more of a power in the world. >> david, stay with us. stay with us. james bevan, the cio of ccla investment management, both of you, we appreciate your time and your insight. coming up on "worldwide exchange," we are just three days away for the big game, as always. the tv commercials will be just as big as the game itself. stay tuned to find out what we can expect goes on and off the field.
on cnbc.com now, a strategist tells cnbc that the u.s. crisis should be a lesson for europe. they linked their reaction to the greece, portugal and spanish to the lower response of u.s. authorities to the problems with bear stearns and lehman brothers. the toyota saga continues with the company saying it is preparing to recall its iconic prius hybrid car to address complaints about delayed breaking. cnbc.com is having a poll on whether investors would buy toyota stocks or any stock within the auto sector at the moment. and cnbc's fast money program released a correction survival guide after the dow recently fell below the
psychiatric logicicly important 10,000 level. read this ad at cnbc.com. and welcome back to "worldwide exchange." let's do a quick check on where gold and oil is standing. our biggest fall after posting their biggest one-day loss since 2008. that was yesterday and continue it continues to fall further, 1,052.60 an ounce. down 1.is %. crude extending losses, downed 72.83 a barrel. and brent should be falling, as well, 56 cents lower, $71.50 a barrel. of course, a lot of risk aversion come to the market. a lot of eyes on that u.s. jobs nonfarm payroll report coming out later today. mean wile, global equity markets ahead of the u.s. open
have edged down to their session lows right now. this morning, down 1.5%. and icap, one of the world's biggest dealers, gave a full year disappointing guidance today as new business was taking longer than anticipated to turn a profit. . the financials are certainly weaker on that. sylvia is in frankfurt. she will be in frankfurt in a few moments time. let's just get a little bit more from james with us. what's your take on the issue? >> i've looked at relative bond markets relative to what was described as bond indicators in a couple of months. what is interesting from my point of view is that the uk gld market again rates the strongest
returns every time there's a piece of bad news. that is incredibly misguided. political uncertainties and heaven help the bond markets, and i think the 10-year yields are rising up from a current level of four. >> if yields are going up, to get up to that level and interest rates are still going to stay low, i mean, that provides a big boost for stock investors isn't it down the road? >> i think it's an excellent opportunity for long-term investors. i think the strong companies that have really good free cash flow yield don't have to worry. so i would be looking at companies like record banks. i think that company probably deserves a price around 37 pounds and i say that on the basis of the company's ongoing activities. you wouldn't even have known that there was a global crisis in the making if you saw what
that company was doing in terms of its ongoing business. >> david, what do you do with government bonds, david? do you think those sort of yield targets are right? >> we like bonds, which are at a widespread to government bonds. because you're getting baid paid for the additional risk and there are many sectors in the bond market in the u.s. to build america bond, which is a state and local government security can trade at 200 basis points over the treasury sxp be a very, very secure high trade instrument. >> a lot of people are looking at finances between equity and conventional and are you looking at mets, as well? >> well, in our portfolio structure, we do not. we have separate categories in debt and separate categories in equity and we only use etfs in the equity side.
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welcome back to "worldwide exchange." it is 5:20 on the east coast of the united states. let's take a look at how u.s. markets are likely to open. markets lower across the board. the dow is down about 32 points below fair value after tumbling 268 points yesterday. down 7% from january highs. the s&p down about 7 points below fair value right now, as well, after falling 3.1% to 1063. the jobs report, of course, coming out in a couple of hours. that is really going to be in the spotlight today. a couple of other items to get to you. december consumer credit figures
where the amount of debt outstanding will be out at around 3:00 p.m. new york time. james bullard is speaking out of monetary policy forum at washington university in st. louis at 5:20 p.m. there is just a handful of earnings today. aetna, aon, simon property, tyson foods and weyerhaeuser will report, as well. it's hard to switch from this huge global sell-off to companies betting the farm on these little baby ads. 30 seconds, $3 million. chump change, right? >> yeah. but the good news is that those ads look to be sold out this year. miami will be the center of the sports universe this weekend at super bowl xliv. it's going to be the most watched event every year, even those who don't watch football will be tuning in. darren rovell is in miami to
experience the atmosphere. i just wonder whether the new orleans saints, never made it to the super bowl before, whether them getting to the super bowl is sort of a met for for the rebuilding of new orleans itself post katrina? bearing in mind
that they were going to leave the superdome. >> yeah, absolutely. after katrina, the superdome was like a staging ground. it wasn't a place for the super bowl. and forget about luxury suites and everything else. nowhere else is in trouble in terms of a football town. and now that they're in the super bowl for the first time ever, i think we're pretty sure that they are not going to be leaving nowhere else anytime soon. and it is -- it has provided the city with a whole lot of host and certainly has been key to the rebuilding and people certainly feel good about new orleans through football, so to
speak. >> you raised a key point about how much a successful sports team can attract investment. >> yeah. you know, it's very important. you know, they talk about all the time, they talk about how important is it to have a
football team? and even a city like indianapolis, the fact that they have the colts makes indianapolis that much bigger. that's why the city of indianapolis agrees to pay whatever difference there is in terms of making sure that the indianapolis colts are not in the bottom third of league revenue. why do they do that? well, they do that because the nfl and being an nfl city means so much to how you define indianapolis. it means so much to how you define new orleans. >> darren, let's talk about that advertising. can we -- are companies buying these spots? we're talking $3 million a pop.
that comes down to like $ 00,000 a second. >> yeah. you know, it dipped a little bit down to $2.6 million and it has been taking a little bit longer to sell out. cbs announced on monday, nicole, that they had finally sold out. and the fact is that some have decided to sit out this year. although pepsi co has something through frito lay, pepsi knot advertising this year. and there's been controversy with cbs denying some gay dating site, whether that was appropriate or not, denying a go daddy add and the controversy over a prolife ad, whether cbs should have accepted that. it's a big game and it's always a debate as to whether it's worth it. of course, if you're anheuser busch, it's about winning the ad
meter and probably not so much about selling beer. but if it's some of these other smaller companies, you know, then it really is about building their brand. >> yeah. even in this economy they're selling out. my god. darren rovell, live for us bright and early in miami. darren, thanks so much for being with us. the super bowl, as we've been mentioning, one of the biggest advertising venues every year with companies paying that pretty penny to get their products in front of millions of eyes. joining us right now is michael lebowitz. so what companies actually benefit the most? i think we're having some problems with michael lebowitz. maybe he can hear us right now. what companies actually benefit most from spending that $3 million a pop for one of those ads?
>> i think the companies that really have an opportunity to benefit are companies in low consideration categories where they get tremendous benefit from being top of mind. companies like go daddy, you know, it's a huge investment, obviously, for a smaller company, but it's really important for them at the moment that somebody is ready to take the step to own a piece of internet real estate that their name is the name that comes to mind at the point of being ready to take action. >> does it dilute the gravitas of advertising in the super bowl? >> well, with i certainly think it will be interesting to watch over time as we see some of the players that we never have seen, you know, in super bowl's past, like godaddy, like cash for
gold. and does that have an effect on the overall marketplace as we see pepsi departing this year? over time, does that change the economics of the super bowl? and do big brands and blue chip brands need each other to maintain the overall halo effects of the value of the time? >> let's talk about the value of these big sports events, michael, because there is a view. it's harder and harder to get an appointment to view. but that's what you get with a big, live sports event. so do the value of these events go up? >> well, certainly, i think it's very hard to create event television in this day and age. i think we've seen that clearly in the broadcast world, that they've struggled to do it. but the super bowl world is really the king of these and i think really, again, it comes back down to an individual
business's goals and whether it's appropriate to spend such a premium to be in front of a broad audience for a short spike of time rather than investing that money in a program that might give them a year's worth of conversation in the digital world. >> even in this day and age, super bowl advertising is still the holy grail. michael lebowitz, the founder and ceo of big spaceship. christine, first of all, michael, we appreciate your time. christine, being the ceo of big spaceship, if i had to be a ceo, i would like to be the ceo of a big spaceship. >> it has a nice ring to it, doesn't it? >> absolutely. yeah. coming up next on "worldwide exchange," an amazing buying opportunity or a sobering correction? we'll discuss what to make of the recent losses in the market
the nikkei sinks to a two-month closing low. >> here in europe, equity markets are down again near the session lows. welcome to "worldwide exchange." it is nice to have you with us on this friday. markets are lower across the board after yesterday's big sell-off. the dow is about 50 points below fair value right now. the s&p about seven points below fair value after closing yesterday, the dow down 7% from january highs. the big jobs report out in a couple of hours. will a good jobs report, ross,
calm the market down? that is the big question that we will be watching. >> they could probably do it, couldn't they, nicole? they're both for the session lows in european stock markets. 1.6% for the ftse 100. losses of 1.3% for the sweat ya dak, over 2% for the cac 40 and smi. banks, commodity stocks, also feeling the effect. after a better out from vodafone yesterday, these are very cash again rafb companies. christine. >> a sharp sell-off in eblth markets here in asia, too, ross. but the euro continues to be focused after those debt problems continue to surface between greece and spain and portugal. so that is weighing on the currency markets. euro/dollar, 1.3685. sterling/dollar, 1.5701. euro/sterling, 0.8712. dollar/yen, 89.48.
nicole. >> the january jobs report, christine, will be out at 8:30 a.m. new york time. the dow jones forecast calls for no change in nonfarm payrolls following a loss of 85,000 in december. the unemployment rate is seen as ticking up 10.1%, a 26-year high. the report includes the annual benchmark of barrels through march of last year and that is expected to show an additional 800,000 jobs were lost during the recession, bringing the total to more than 8 million. joining us live again, david kotok. 8 million, david. what do you make of that number? >> it's a big number and it takes a very, very long time to get them back. and drilling into those numbers, the case in human terms is very serious in the united states, nicole. the only one drops being created is for you as captain of the spaceship. >> and james bevan is also with
us, the cio of ccla investment management. feel free to chime in at any time, david. i want to ask you, james, what are you looking for with the jobs report? is it the headline number or are you looking at specific s subsectors to give us more information about the state of jobs right now? >> the bigger idea that is emerging is companies last year grew their margins. that demonstrated that companies are able to grow without needing the same level of labor intensity. that is bad news for people that are expecting to hear a rapid recovery in labor numbers. that said, i think there has been a general expectation. we probably have to see economic growth in the united states, about 2.5% to begin to get the unemployment number lower. my concern is that if productivity is higher, we're going to have to take a much stronger growth number in order to push the employment picture
better and, therefore, i suspect we're in for a prolonged period of bad news on employment and, therefore, one should be much less focused in stock selection on companies that are dependent on u.s. consumption, much more focused on companies that are able to grow in the fast moving economies, like asia pacific, which is precisely what we saw yesterday. >> david, we see much stronger growth. >> i think james is spot on. he summarized it succinctly and perfectly. the answer is yes. and the cap ex sector and the tech sector are places where you can go that is oriented towards delivering the productivity gains that james is talking about. that is not a good indicator for labor income, hence, consumption. >> so david, what about commodities, do you still believe in the china story driving up commodities?
>> i would recharacterize, christine, and see and say china plus other places like vietnam, for example. yes, i think that the emerging market growth story is intact. those economies now have large reserves. and they have rising incomes within those countries, so there is a multiplier effect. so the answer is yes. >> david, can i cut the commodities sector into three seconds? it strikes me that the emerging market story is unequivocally bullish for some of the industrial commodities, such as copper and aluminum. do you have any idea where i am much more concerned about downside risk is the oil price. i think there is a reasonable price of oil falling to as low at $60 a barrel given the
importance of the u.s. economy. do you go along with that? or do you have a contrary opinion? >> no, james, i think you're spot on again. we also have this transition in the u.s. where we're increasing the use of natural gas and we've expanded natural gas as domestic production because of gas shale and the new technologies. so the u.s. is becoming very self-sufficient in natural gas oriented energy. it's a wonderful thing to happen finally. and that, over time, will take some pressure off of oil. >> david, this is christine here again. to what extent are you watching this trade tension, rising trade tension between the u.s. and china? what could it simply escalate it to? what's the worst case scenario? this is terrible, christine. why the united states continues to -- the obama administration continues to pick pooi fight after fight after fight with china in protectionist terms over little things, tires, electric blankets, it doesn't
top. and what do we expect the chinese to do other than to push back? i don't understand the policy. it is the rising risk. i'd be curious if james sees it the same way, actually. >> i think it's a huge risk, but i confess that what one can discern is an expectation that the system taking grip in china is not delivering the changes in political process and the anticipation of people in the democracy that i suspect that the u.s. administration has hoped for. and i rather wonder if what we are seeing are the politicians attempting to ferment the process of democracy and saber rattling in order to get contraction on your front. what is your view on the political process? >> well, the political process is now in a great state of flux. protectionist is an easy out for this administration and they continue to follow it. the issue for us on the investment side is do we have the right to culturally, to
impose cultures on other cultures rather than do it in an inclusive suggestive way when we know the pushback from the culture will not respond the way we would like? and that is an tunt attitude in the obama administration that troubles me and it leads to rising barriers, rising protectionism and all the ills that comes from it. that's our worry in the u.s. >> absolutely. >> and we also have other worries in the u.s. excuse me, david, i just want to thank you guys for the meantime. those other worries including a big market sell-off that we want to get to in just a little bit and the big jobs report, as well. stay with us. still to come on "worldwide exchange," toyota is not the only car company dealing with faulty brakes. we'll bring you the details of the latest problems hitting one of america's auto giants. stay tuned.
at the end of the day in sitka, alaska, the fishermen bring in the catch. and cargill brings in the sea salt to help them preserve it, shipped in an efficient supply chain to save the fishermen money and their catch. this is how cargill works with customers. welcome to cnbc's "worldwide exchange." here are some of the top stories we're watching from around the world. in the united states, it's a deal that could make invest hes feel lighter than air. industrial gas company air products is offering to buy its rival airgas for $5.1 billion in cash.
it's $60 a share and 30% of the premium. a merger could create the largest industrial gasmaker in north america. reports say the ceos of both companies have been talking since october. airgas has rejected two previous offers. in frankfurt, airproducts and airgas is -- well, air products is down slightly and airgas is up. ford is expecting to fix more than 17,000 mercury milan hybrids that may have a glitch in their brakes. warning lights come up on the dashboard and drivers may perceive a loss of braking even though the systems are indeed working. ford did fall 1% in after hours trading after dropping 5% in regular trading. ross. >> there seems to be something going on with hybrids. shares of volvo have recovered after dipping early in morning
trade. it is seeing a relatively quick recovery in the european market, which is what is supporting stocks. overall, the stocks had a mixed reaction from analysts. the operating loss widened to $316 million. >> ross, we continue to keep an eye on toyota. the company shares gaining ground today, closing up 1% in tokyo, despite the threat of another recall. japan's transport minister says the company or the carmaker is considering a recall of its best selling car, prius. mahara says toyota might offer voluntary repairs on vehicles with brake issues. earlier, the nikkei reported that toyota would recall an estimated 270,000 units of its new prius in the u.s. and ya pan. we're waiting on a briefing by toyota happening in less than two hours time. viewers in britain can catch an
interview coming up on strictly money at 11:15 gmt. viewers around the world can log on to cnbc.com shortly after that to watch that interview. still staying with the auto theme, mitsubishi motors may supply a new small car to france's citron next year. it may have a price tag of about $11,150 peugeot would be among the car suppliers for such a deal, but nothing has been decided. mitsubishi and peugeot began talks in december to build on their cars. mitsubishi fell 3% in line with the other auto losses we're seeing and peugeot fell 2.5%. ross. >> one of the interesting opportunities you suggest is japan. why doesn't japan merit
stimulation for investors? >> we're talking about quantitative easing, and yesterday what we see is a change of administration in japan, a new man at the helm who is more combatic. i expect we will see a hiking in quantitative easing. i think that will mean a weakness of the yen. i think we will be looking at some of the cheaper japanese exporters. i think we should be looking at companies with strong free cash flow yield where the shares are inherently cheap. and i think we should have another look at the japanese banking sector where a lot of restructuring is over. >> you say japan is a take on the global cycle. >> if you said to me, where are we in terms of the political agenda for growth, it's quite clear that we're going to see a very significant reemphasis on ensuring that the global economy does not have a dumb dip. and i for one do not believe we
will see a sustained double dip in economic recovery terms. >> james, thank you very much. and just over 12 minutes to go before "squawk box." a couple of big games to focus on today. carl has the run down. hey, carl. >> rur right about the game, ross. that jobs number is on the way. we're live at the labor department for the release. as for the postgame, the bond king, pimco's big gross, so doevent miss our coverage of this economic super bowl. speaking of the game, darro vel will be here speaking to the marketing chief of gatorade. he asks some of the players questions about credit default swaps and all sorts of stuffs. we'll see which gridiron great passes mr. rovell's test. plus, pith gas inflation against super bowl ticket inflation,
that's coming up as we begin at the top of the hour, ross, in about 12 minutes time. now, will you watch the big game on sunday or are you too worried about manchester united or -- >> there's a very big game on sunday, chelsea against arsenal. >> i was looking forward to that, myself. >> i thought you might be. the super bowl i used to watch. but as you know, when you get a young family, carl, late night viewing, as it would be for me now, just goes out the window. i'll watch the highlights. >> we'll watch it here on squawk on monday morning. >> colts or saints? >> i'm going to go saints just -- i don't know why. there's some romance in their season. it's unbelievable. >> yeah, i agree with you. i would go with that, as well. looking forward to the show, carl. thank you. >> okay. see you later. >> i'd like to ask financial journalists sports quizzes.
the january jobs report will command the bulk of the spotlight today, but there are a few other items of note. december consumer credit figures, or the amount of outstanding debt will be out at 3:00 p.m. new york time. james bull lard is speaking at a monetary policy forum at washington university in st. louis at 5:20 p.m. bullard is a voter on the fomc this year. there are a handful of earnings out today. we'll hear from insurers aetna, aon, simon property group, tyson foods and paper productsmaker weyerhaeuser. let's bring back in david kotok, chief investment officers of cumberland advisers to try and dpie digest all of that data that i just mepged and the big market sell-off. what is driving that?
>> nicole, the worries about the debt crisis is certainly a big thing. and today's labor report, which you've just anyhow announced is not going to be pretty reading, even if the top line numbers seem to be improving. there's an adjust many in birth and death which is not consistent with what we're getting in small business and we're going to see revisions, so we know we've got 8 million jobs as you announced lost over the last cycle. it's not a pretty picture and markets are worried about that. markets are worried. we are down more than 7% from january highs. is it all right to talk about a correction right now? >> i think we're in the correction, and long overdue, considering how far we came from the bottom in march. i think the next step, though, is do we prepare a platform for another upward leg in stock prices? it would seem to me the answer is going to be yes because the
liquidity will remain by these central banks for a very long time. and so i believe this is preparing platform for another upward movement in stock prices later in this year. >> david, this is christine. i know we've talked about this before, the jobs report, but specifically, what are your expectations and how are you positioning yourself in the market ahead of that report? >> top line, we're going to get around this 10% unemployment rate, more or less. underemployment rate, over 17. in the specific sectors where you see heads of households, like single moms, that unemployment rate is over 13%. it's likely to go higher. so this is not a pretty picture. you get into the capital expenditure area like cap ex. that means technology. you're going to get into the medical sectors now that obama's administration is not going to derail the health care system, medical devices in pharma,
biotech. biotech is particularly very cheap. >> all right. well, there's always stuff on sale and there's always a silver lining, it seems. david kotok, we appreciate your time today. the markets are lower across the boards. we want to check out the dow right now. about 40 below fair value. it has been tumbling for the last hour or so after the dow tumbled more than 268 points yesterday to 10,002. ross, what are you guys look looking at? >> yeah. we're looking at the session lows right now ahead of the employment report. off 1.75% for the ftse 100, 1.4% for the xetra dax, 2.3% for the cac who 2% for the smi. banks and mining stocks all weighing fairly heavily right now. >> ross, we are looking ahead to the big jobs report. but that's going to do it for
who who who who ♪ >> good friday morning. welcome to squawk here on cnbc. i'm carl quintanilla along with joe kernen. becky will be back on monday. traders in europe and asia reacting to the sell-off here on wall street. the major european bourses hitting two-month lows in early trading and adding to the issues about the euro zone's sovereign debt prices. no surprise there. in asia, markets falling nearly 3% lows. u.s. equity futures at this point, you know, joe, we barely hung on to dow 10,000 yesterday. futures here were positive until europe opened lower. now we're going to -- 65 points or so below fair value on the dow. >> yeah. the claims number didn't help yesterday, the jobs report, obviously. but it was europe that got everyone spooked.
>> yeah. >> and also the credit default swaps on the s.tup.i.d. p.i.g.s. this was the day of reckoning that comes from that, which we did, as well. so the worry is that the eventually -- and the lead editorialan in the journal is wa usa. so does this kind of stuff happen to the big countries that you're snoefd not worried about right now? people think germany eventually goes in and helps and does whatever needs the be done. but you wonder how far this needs to go. in items of all sovereign debt given how much support you have to give the private sector. >> the euro zone is a group of economies that need to prop up the weakest players. in ts