tv Worldwide Exchange CNBC September 20, 2012 4:00am-6:00am EDT
welcome to "worldwide exchange." these are your headlines from around the world. chinese factory output continues to stall. hsbc's early read on september factory sganlg marks the 11th straight month of contraction on the mainland. spanish borrowing costs are expected to fall as they auction off debt and signs of the sale could be of concern. wen is in brussels, eu leaders expected to avoid new stands despite a telecom trade dispute.
the headline gauge for business activity is falling to 46.3. that compares with 47.5 in august, the lowest reading since january 2010. the flash composite of course comes before the final one in about two weeks tile. it follows readings on germany that we're better than expect. flash composite, jobs index lowest since 2010, the flash composite pmi headline figure 45.9. that's its lowest since 2009. chris williamson, welcome to the set. what's the takeaway here from
the eurozone september figures? >> well, another rather disappointing moment. as you said, slowest growth since june 2009 when you measure cross back manufacturing services. so this ends the worst quarter for three years really. so to suggest the eurozone as a whole contracted around 0.5%. much worse than we saw in the second quarter. >> is that 0.5% quarter on quarter annualized or not? >> just that quarter. so annualized more around 2%. >> so you're saying wat third quarter readings apply is the eurozone shrank at a 2% annualized rate. >> there were big divisions within the eurozone, though. we saw a surprise in germany, signs of stabilization, but the indices plunged and steep
decline in france which is more along the lines of what we're seeing in italy and spain. >> we've seen people in the market talking about how the spread between france and germany coming in so much in recent weeks perhaps overstates the strength of the french economy, now those figures come out and if you're positioning for french weakness, that seems to be the place to be. >> certainly supports it, yes. although we do have to be careful. september, there's a big return to business from the holidays in august. we did do try to account our best seasonal disruptions, but you can never be perfect. it's not that science. so we do recommend you look at the last couple of months as a whole role. but even then, you see strong divergences there. >> what's interesting is if the market will interpret it as worse because a stronger germany
may make it difficult to get everyone in the eurozone or central bank on board where they need to be perhaps more aggressive or more accommodative to support the economy. >> last month we were seeing convergence and contraction, but all heading in the same direction which makes policy making easy. what we also saw was feed through of the oil price increases pushing through the manufacturing supply chain in particular. which it's early days yet. they're not big increases, but still marking a divergent trend. oil and food rapid pass through to consumer price inflation, as well. >> and unfortunately, the and you are row zone isn't the only place we're seeing weakness in activity. to china, hsbc's latest check on the manufacturing sector remains bleak. flash pmi inched a bit higher
frto 47.8, the 11th straight month of contraction for mainland factories. i'm curious how you perceive this slight uptick. do the details support any sign of bottoming? >> remember the headline index is combined of five different sub indices. the output measure fell signaling a faster rate of decline, so it's difficult to read new orders should lead output, so in that sense, hopefully we have signs of stabilization. but the fact it's one of the fastest declines we've seen in the last three years is worrying. >> we're seeing asian shares selling off on the news, but almost being the worst you could get in composition. if you have new orders picking
up, if markets are waiting on chinese policymakers to be more aggressive to help purchase a turnaround, but at the same time, you see a pick up in new orders, does this maybe take the pressure off a little bit? >> i think the sxeshlgt taexpec based on economic stimulus. when you look it at the real data, it's signaling in the third quarter as a whole, an increasing rate of decline. we're seeing that in the eurozone and in china, the worse quarter for three years. >> you mentioned it translates into a 2% annualized contraction. but what does it tell us for chinese economy? >> we're looking at growth slowing to around 7.5% gdp. that's an annual rate. it's harder in china to getting a really quarter on quarter
changes. so pretty much on line with what most people have been expecting, but it's quite disappointmenting performance. the government's target should be reached, but a low benchmark really for the whole year. >> want to make sure you can reach a target. chris williamson will stay with us for the hour. but staying with china, the central bank has injected roughly $6 billion into the money market in an attempt to easily liquidity conditions. it's a departure of a three week run of withdrawals totaling $18 billion and the yuan has raised to a seven month high. trade traders unable to say why, though. still to come on the show, another test it for madrid, up to 4.5 billion you're rows of benchmark bonds are up for auction in a key test of confidence. also chinese wen is in brussels for talks with many hoping for an eu life line deal. and rev up your engine, it's
lewis hamilton, talk shop with the british racecar driver out in singapore. before all of that, as mentioned, asian markets are selling off after the weaker chinese manufacturing data. now a look at the continent. >> a negative day of trade for asian bourses on the back of the weak flash china pmi reading. composite tumbled 2%, hang seng followed suit to he said well in the red. with broad base loss in resource, industrials and financials on both bourses. but stocks with military concepts continued to take center stage. mainland ship builders bucked the downward trend. nikkei gave back short lived gains boosted by the bond buying by the yen's rebound. the boj cut its economic outlook
after trade figures and weak manufacturing sentiment reading. industrials china exposure also under pressure. elsewhere weakness in financials and ship builders sent the kospi lower. samsung lost 2% on concerns the company may be sharply cutting ship production due to weak outlook in 2013. following commodity prices took the shine out of australia market with mining stocks losing steam. lastly index came back from yesterday's holiday, now down about 0.6%. >> thanks very much. we'll see you later in the program. the mood here in europe has largely keyed off the weakness we saw in asia. stocks 600, a 9:1 ratio. we didn't see a huge selloff in the wake of those eurozone figures. the stronger german ones keeping some support in the market there. we can take a look at how it's playing out across the major
major bourse os. ftse 100 down about 0.7%. so certainly a weak start to the morning. a quick look at bonds because as mentioned, we do have key auctions coming up. the ten year u.s. and german bund, investors rotate into the safer haven securities. 1.73% on the ten year for america there. italy and spain, italy now back over 5%. keep an eye right here, 5.009%. in spain, 5.7%. it if we can take actually a deeper look into the spain curve, we want to watch levels before this auction. that typically will give you the 5.7% up here. we are seeing a little bit firmer demand across the shorter end where the european central bank is supposed to concentrate its bond buying. i think this might be the 3 year
over here. the two years, 3.15%. a quick look at commodities. take a look at oil in particular. we've seen such a strong selloff in the last couple days. we'll explore this later with our guests in the program, but brent crude adding to that weak tone nymex 91 bucks. gold and platinum lower this morning. not a lot of places that investors like around the globe. still to come, stick around, because premiere wen is meeting with eu leaders at a crucial trade summit. we'll head to brussels live. bob... oh, hey alex. just picking up some, brochures, posters copies of my acceptance speech. great! it's always good to have a backup plan, in case i get hit by a meteor. wow, your hair looks great. didn't realize they did photoshop here.
and also discussions over financing a stake in tkp. the state owned russianle oil firm is looking to raise $15 billion to purchase half. some analysts value the stake at closer to $25 million. and bank of america reportedly plans to cut 16,000 jobs by the end of the year. "wall street journal" saying speeding up it cost cutting measures and falling revenues. the cuts outlined in a document for top management would shrink the workforce below that of jpmorgan's and wells fargo. we can take a quick look this morning. b of a shares are down about 1.4% in frankfurt trade. that's about twice the losses seen across the broader index. and it's a busy day in the u.s. ipo market. five companies making their debut. topping the list, trulia.com. the real estate site will trade
under the sticker trla. the other comes coming to market, capital bank, national bank, spirit realty. a sixth company has purportedly postponed its ipo due to low demand. and in japan, the biggest ever trade testify sit in europe. exports fell for the third straight month. the company shipped 23% less to europe than it did a year earlier with exports down 6% overall. analysts were expecting a steeper drop, however, given the global lowdown and exports to the u.s. did show a pick up. chinese premiere wen has just been speaking in brussels and the eu summit. he says he deeply regrets the u.s. failed to lift an embargo to china. julia chatterley is following all of this fors. some sharp rhetoric from wen. >> i don't think there was any surprise. this is something that's been going on for a while and i don't
think from the european official side that this was something thaws was ever going to be adjusted today. ps premiere wen's last eu china summit, though, and i do think the conversations i had here suggest that the level of importance china puts on the you're pea an relationship is highlighted given the fact that he's here so close to the leadership change that takes place in china. there is going to be a lot of talk today and i think a lot of the focus has certainly been on whether they will continue to be supportive of sovereign debt. it comes just a month after angela merkel went to see the premiere in beijing and he said they would continue to buy sovereign debt, but they had serious concerns. and the it would be -- there would be a clear assessment of arriving. and what we have to debate is whether the bond purchasing program has altered that assessment in any way. the other things of course that will be discussed, human rights, trade, subsidies that china puts on their goods. and i can't really go any further without talking about
the issue of the solar panels. this will be debated, but they won't get in to the nitty-gritty. that's for the investigation to decide. and of course comes on the back of reports that there will be a delay in the ruling on subsidies to telco, too. especially within the eu, there are divisions on the treatment and the relationships with china. they do seem to hold all the cards. ultimately we're not going to get a decision on the dialogue today because it won't be the usual arguments perhaps about beijing's ability to restrict press access. kelly, back to you. >> julia, just curious, because eu is sort of trying to play this off, with you if you read between the lines, they're backing down a bit from what perhaps should be tougher sanctions imposed on china over some of the telecoms or what have you.
is this because ultimately europe's bargaining position is much weaker now and we've seen china stepping up its rhetoric about selling japanese bonds in light of their regional trade dispute. >> officials would always tell you that there is no political impact or consideration when they make these rulings, but you have to question it, you're allowed to question. in terms of the reserve, i would point out that unlike many other central banks, the day take suggestses that china has continued to diversify away from the dollar into the euro. so the success and the progress in europe is as important to them as anyone else. i do think these are key considerations and europe has to take those into consideration in its dealings with china. so quite frankly at the moment, china does hold far more cards than europe on all these matters. >> thank you very much for that. following the story for us out of brussels. we'll continue to bring the rest of the headlines as we get them
from that event. want to remind you, speaking of trade, our trade link series here on "worldwide exchange" airs every week. we look at how the financial crisis is affecting global trade and the impact it's having on business around the world. monday at 10:50 central european time. for more, it's trade link link links.cnbc.com. let's go live to mumbai. are there signs of a u-turn? >> the rupee has fallen to its weakest level in more than one week. the key problems in the political front, we've seen a key ally of the congress pull out of the government. so as a result, the uk government is now in minority. one scenario is congress calls truce. two key demands. one is a roll back of the 51%
and b is the roll back of the five rupee price hike. if the congress listens to this, it's not a great sign for the reforms. it's everything the government tried to do has been completely nullified. scenario number two is that the government calls the bluff, government still stays in power, continues to remain a minority government, but it gets working government support from other regional allies which means the government doesn't fall, but going forward because of pressure from the other regional parties while providing its support, going forward reforms are still circumspect. or the worse case is the government falls, there is a no confidence motion passed and foo forced to prove its majority. but even otherwise, most political analysts we spoke to said there is the possibility
that either congress falls into the demand but reforms will be increasingly difficult to go ahead. whatever is done is done, but going forward, the path is not easy. on that note, it's back to you. >> chris williamson is still with us here onset with us. chris, how important is it that these bank reforms go through? >> it's very important in terms of domestic stability if nothing else we've seen from the pmi surveys that it's been one of the best purchasing sectors this year. the domestic economy has been a big support. anything that can disrupt or calm that domestic stability will be a problem.
it needs to continue to accelerate that it is reforming and that will help the domestic economy which in the global environment at the moment, the more stable your domestic economy, the better. >> it's interesting because we've gone from maybe a couple of years back or months back to this idea that india was the new china, the new exciting place foin ve for investors to more recently with all the supply side concerns. people sort of reevaluating whether india is an investment opportunity at all. where do you think the pendulum is now? is it shifting back to a pillar of strength? >> i think the pendulum is very much wavering because there's this huge indecision out where companies will make their decision to invest. obviously the merging markets, the fast growing countries offer lots of potential, but there's a
sea change in certainly large corporations about where they invest in new facilities and so forth. because of the competitive advantages are narrowing compared to the west. we've seen the west has woken up and realize it has to be competitive with wages in these countries. germany is a great example of that. so there is a realization that the growth model is not what it was before the crisis, but it's still very much a powerful model. >> and citigroup has cut its forecast for next year. the bank thinks the global economy will expand just 2.6%. people typically talk about global recessions, they're actually talking about the 2% threshold, that conditions are week enough to be recession like. >> i think that 2% really comes from the fact that that means
the emerging market will be growing. so it's a weak scenario. and when you look at most people's global as far as, they were at 4% or so. so remarkable how little progress has been made. >> the weaker the readings, the more action needed from policymakers. so you'll get this rebound. and what we've seen at the moment is almost harking back to 2008 where finally internationally they're grasping the needle and saying we all need to do something in a coordinated fashion. i don't know if that's what's happening behind closed door, but you can see the coincidental teaming of the ecb, the fed --
>> but that said, i think action perhaps would have almost a bigger impact here in terms of global investor sentiment and that's not what we're seeing. india is on hold, we keep kind of waiting for more. like waiting for -- >> yeah, i don't know to what extent that's true because they're getting the problems arising. those countries are looking to the developed world to sort their economies out. especially europe. and that's where the growth consumption needs to come from. >> too bad for the rest of you guys who can't wget your own sorted out. thank you very much for your time this morning. and we should mention the u.s. flash pmi reading will be out later today. and still to come on the program, uk retail sales for the month of august are due, that includes the olympics. so how much of an impact did it have on shop something we'll find out next.
spanish borrowing costs are expected to fall as madrid auctions off debt. one analyst says the size of the sale could be of concern. retailers are reporting a decline of 0.2% of the month. this is somewhat better than expected 0.4%. london olympics had a negative impact interestingly on online sales. and if you were here in london like we were, you know that's because getting around the city was a bet of a mess during that period. but once again, retail sales down 0.2% in august from the prior month, about half the decline expected. you can see a little bit of a if i wereness in sister link there,
including take a look at retail sales, up about 3% from earlier and that again was a little shallower decline than expected. so even excluding fuel, there was a decline. london olympics had negative impact on their online sales. take a look at how that's affecting trade this morning. we did head into the session on a pretty weak note. ftse 100 there is down two-thirds of a%. cac 40 half a percent. ibex 35 down a quarter of a percent. and we're only about 10 or 15 minutes away from the results of that spanish auction. we'll see how bond markets are look before that event. spain's ten year is up this morning 5.74%. shorter end of that curve, though, showing more firmness.
italy back above 5%. bunds and gilts are benefiting from a rotation into quality or at rest relative quality. take a quick look at currency markets. euro-dollar down by 0.6%. so decisively punched below that 1.30 level. the aussie dollar by the way after the weak chinese figures is down 0.3%. starwood hotels and resorts has just opened the largest hotel in macao today. and joins us is president and ceo of starwood worldwide. between good morning, fritz. >> good morning. how are you? >> it sounds like it's one of the biggest properties both for your company and for mac cow oig. macao. >> yes, this has 4,000 rooms. it will be our biggest hotel in the system.
the good news, the first 2,000 are opening today and we're already sold out for the weekend. so demand looks good. not just our hotel here, the market is doing very well. so we're quite confident we've opened a new winner here. >> it's almost like the skyscraper index. you can't help but look with a raised eyebrow and wonder if it doesn't mark the top of the market more than anything. >> i think we're a long way from the top of the market for china. think of it this way. already the casino take in macao is about five times las vegas, but they're about one fourth the number of hotels. so in a lot of respects, the lodging sector here has a long way to catch up and here we are after all next to the fastest growi growing hotel market in the world. >> hbs a new york based consultancy came out with their second quarter figures for macao and asia more broadly in terms
of tourism and visitor demand earlier this month. and they say rev par was only up about 5% in the second quarter. as you know, this follows sort of 20%. is there a risk of oversupply in the market? >> as you look at macao or across china, in a market this fast, there will be more supply than there is nand. but given the underlying growth we see in the chinese market today, we continue to see that that supply will eventually be absorbed. we have 100 hotels under construction snd not one is being held up.
>> for taiwan, they were up 28%. macao was town. >> taiwan is another very good market. we've been there for a number of years. and just recently opened two, both of which have done extraordinarily well alongside the westons and sheratons that we've had there for some time. so we're bullish on the taiwan market, as well. >> and lastly, where will you look ahead in five years time? how many properties do you expect to have in china and across the broader region and how important in terms of revenue share is this area going to be for your company? >> we have just over about 200 hotels in asia pacific today, that's out of 1100 worldwide. we think that number will double. so that gives you a good sense for how important asia is for us in terms of growth and its absolute size. >> absolutely.
fritz, opening one of the largest properties in macao and joining us this morning. thanks very much for your time. well, deutsche banks has reached a deal to sell to rhj. patricia is in frankfurt following the story for us. >> it is significant because of course deutsche bank trying to restrict their balance sheet. the capital structure is something they did not like, so now this is the second attempt. so the deal is now okayed and has a volume of about 384 million euros which would be paid in cash. all the parties involved are
confident to get the approval eventually. we do have also other investors potentially involved. names are floating about. so deutsche bank definitely continuing the restricting. so all in all, it should be pretty significant also for shareholder value going forward. >> all right. patricia, thanks for following that for us. over to japan, the annual tokyo game show. >> 209 companies have gathered here in tokyo to show off their latest and greatest video games, gadgets and consoles. more than 1,000 new game titles
were unveiled, a record high. one of the big highlights is sony's slimmer and lirt new playstation 3 down sized 25% from the current model. visitors can also try out their new online game service launched in japan and eight other countries next month. sega announced it will be launching a brand new game title called demon tribe. nintendo didn't show up this year, but game creators unveiled a string of new titles for the giant new console wii u due out in did tecembedecember. back to you. >> okay. thank you very much for that. joining us is head of market rate and debt strategy at ing wholesale banking. any minute thousand we're expecting the results of the spanish auction. what are your expectations?
>> well, it's another event for spain. baseline view is that they'll get the job done. the way these things work is that there's a group of primary dealers obligated to take down the bonds. those prinl area dealers tend to find it difficult to get account interest and account interest is still dominated by spanish domestics. but you have to assume the job gets done today. they will have to try to get the bonds back into the market. >> what about the slope of the curve, how do you expect this to change if we don't see for example huge drop off of demand? >> i think the interesting part of the curve is the front end because we know the ecb is ready to intervene in f. spain would only ask for help. there's been some impact on the
front end. you have for example two year paper trading around 3%. the risk is going forward if spain doesn't ask for help that the front end of the curve will begin to go higher from here. so given the risks that i'd be short front dated paper. but the ecb could come in pretty quickly. >> all right. we'll get through the results. we'll come back to you. and still to come, we'll find out what lewis hamilton is reluctant to talk about coming up next. >> i had to try.
this one. down a percentage point on the yield. the bid to cover is higher. let's get reaction from stefane in madrid. we were just showing the spanish curve there. what's your take? >> it's more or less what we were expecting. the borrowing long term costs for spain declined significantly compared to the last auction. 5.66% for the ten year, that's to compare with 6.65% at the last auction which was the 2nd of august. and 24r5three year, we are 3.84 the average yield. so that's not decline in that
case. but globally the situation is easing on the spanish bond market. the borrow iing means they will face the decision of whether it will require an international bailout. still exploring other options than bailout according to a report this morning. the government would like to use the remaining part of the bailout package to avoid. european leaders have agreed to give spain 100 billion euros to recapitalize the bank sector, but in the end, we are expecting only 60 billion euros to be necessary to recapitalize the spanish banks which makes remaining part 40 billion that the government would like to use, but it would need the green light from european leaders which is far from being granted. but it c ompares with 6.65% in
august. >> the borrowing costs have come down, but are they done enough? august. >> the borrowing costs have come down, but are they done enough? >> down over the past month, but the auctions this morning are pretty much in line with where the market was trading before the auctions. the three year bond is a new three year. it's come in at expectations. i think the interesting thing is if the mid cover wasn't fantastic in that three year and really it should be a high bid cover because the ecb is supposed to come in and support that part of the curve. i detect a little bit of anxiety there on the part of investors with respect to the speed at which spain might come and ask for help. >> and going into the auction, you said keep an eye on the short end. what's happening in the three year is perhaps consistent with that view. are you surprised that we haven't seen stronger interest given that investors should
perhaps anticipate being able to buy at turn around and be able to sell to the ecb? >> there's a real concern that the markets will dictate the policy moves going forward, that the front end of the curve starts to sell off and that's what trips spain into asking for help. i think that's reflected in this morning's auctions. decent bid cover. but the size down was relatively small. so bottom line, it's come broadly in line with expectations and like i say, a low bid cover on the three year. >> do you expect markets will push back towards the 6% level say on the ten year? i know the shorter he said to watch, as well, but will the markets force the government's hand here? >> i think that's the arriving. it's not like the markets are playing a speculative game here. the point is that what we need
to see is that real money investors coming into buy spain and if enough real money investors come in, the ecb won't be required. p so the risk going forward is that that won't happen and that front end yields begin to drift higher and that will eventually result in spain asking for help. >> and do you have a view as to when that event might happen? because we're seeing speculation that it could be as soon as the end of this month or perhaps it won't raeld be up the end offing on the. how significant is the time line he here. >> i think we're talking weeks. we have seen some real money buying in spain, but we haven't seen outright loans being set. so the next few weeks will be crucial. >> thanks for all of your time this morning. and now germany siemens has
unveiled its latest project. the crystal is said to be one of the most environmentally friendly buildings. louisa bojesen went to the opening. >> the crystal is important because we have just started in 2008 with the green portfolio. in the meantime, we have moved forward the whole dialogue with the cities how we help to recreate a much more calm and efficient and more sustainable infrastructure programs in many cities around the world. so this becomes a key customer set for us in the crystal is whether this knowledge is really happening. the engagement agenda with planners, with mayors. and this will be connected to the world. so this will be us talking much earlier. >> but this is quite an expensive project, as well. it's not a project that you
anticipate will be copied elsewhere. >> this is something which is unique and it's set up because it also hosts the 30 best technologies which siemens has available. they will will be having the tile log with the customers and we will have it linked up through networks and through other parts of the world. so this will be also the place where best practice sharing is happening so different cities can learn what works better in singapore or new york. >> there are signals we're seeing a slowdown in the manufacturing and industrial segment of germany. do you anticipate this? >> without any doubt of course germany sim pacted, but germany is still growing at a slower pace. but the strength of germans, of germ aany germany, the strong industrial footprint and products german companies are producing and
which are in high demand around the world, so it is relatively a better place compared to other parts of europe like the southern part of europe. >> moving on to japan now, the auto industry there is bracing for weaker sales in china as tensions take hold. some car brands were targeted e and sticking with transport, france and germany are trying to find a ghon position on the proposed eads/bae system merger. merkel saying she plans to discuss it with hollande this weekend. patricia, what kind of -- if we sort of think about this discussion between merkel and hollande, what kind of terms might they be trying to hammer out? >> well, i think of course they're trying to get their deal through the eu regulatory
approval system and also through the government involved, the german, french, potentially also the english or uk government. so it is a very political issue, it needs to be handled politically. and also the question is of course on one side now you have kind of a german franco company which then should be a german uk company, that's another issue there. but interesting are the comments by the ceo who said the progress with the government seems to be there, seems to be quite good. there will be preliminary meetings at a political level today and tomorrow pre-that meeting between merkel and hollande on saturday. however, if the demands by the government are too high, mr. enders set they could decide to walk away from the potential 45 billion merger. so it is a difficult issue and job cuts or job guarantees are going to be involved as well as voting or veto rights, as well, whereby voting shares should be
kept to about 15% in order to really stabilize the national interests in the common company that is supposed to be created. so we really have to watch it step by step and at the moment, the progress should come on saturday. >> all right. we'll keep an eye on that over the weekend. thanks very much for that. for uhe la one heads to the bright lights of singapore this weekend with a night race. there is speculation the british star could move to mercedes the end of the season when his contract runs out, but when cnbc caught up with the 27-year-old, he kept tight lipped about his future. >> this is the question that everybody is asking and i doubt i'll get a clearance from you, but i got to try. for weeks now, if not months, there's been so much speculation. are you staying, are you -- not going to talk about that at all?
>> i'm glad he came in. >> i had to try. let's try this way. maclaren, you are so happy there. this is the only team you've ever driven for since you were 13. your whole professional life. >> i've been very fortunate. i don't think any other driver at least on the grid has had the opportunity that i've had in a team to be a part of a family for such a long period of time. so i've been here longer than a lot of the people that are in the team. i did my work experience there. >> you've grown up there. >> yes, my roots. and i'm very grateful for every opportunity that maclaren gave me because voice i wouldn't be here, wouldn't have had the success that i've had. so it's been an incredible journey. >> you've been described as one of the few out there who can win especially with a dollar and he not in top form.
true? >> possibility. possibly. when i grew up, my first car was a disaster. it was terrible. it had been owned by five different people, used and abused, bent into different shapes. my dad tried to bend it as much as possible into shape. and, you know, and i beat people with better cars. but it's different in formula one. but you can make the -- the car does make a huge difference, but a half a second difference a driver can make, which is what the teams are constantly chasing, you know, in terms of it development. uk government ministers will launch proposals today marking it easier to list on the london
stock exchange. in an effort to establish london as europe's technology hub and challenge the nasdaq in-can text, listing requirements will be relaxed for high tech companies allowing them to float just 10% of their business from the current threshold of 25%. a senate panel will put high speed trading under the spotlight today, holding a hearing on whether it needs more regulation. the hearing comes in the wake of several technical glitches or whatever word you might use. they've been a blow to investor confidence. jcpenney krechlt chlt off the ron johnson says the second half of the year will be just about as bad as the first for the department store chain. john so that said the company's turn around plan will take time. since taking over late last year, he has remade penny's look replacing regular sales and coupons with every day low prices. but consumers haven't responded and that's led to a 1221% drop
sales. groupon is laufrning its own mobile payment service. does the new revelation in patriot spell the end of cash and cards? would you be happy to use your mobile to patriot for everything? what do you think about the mobile wallet? let us know here, email@example.com. e-mail me. i don't have ross around. i need something to keep me going. you can also tweet us of cour course @cnbcwex or @kelly_evans. and still to come on the program, will your smart phone replace your video game console? that's one of the questions we'll be discussing from the tokyo game show. bob... oh, hey alex. just picking up some, brochures, posters copies of my acceptance speech. great! it's always good to have a backup plan, in case i get hit by a meteor. wow, your hair looks great. didn't realize they did photoshop here. hey, good call on those mugs. can't let 'em see what you're drinking.
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these are your headlines from around the world. chinese factory output continues to stall. hsbc's early read on september manufacturing marks the 11th straight month of contraction on the mainland. this as activity in europe also continues to slip as pmi figures for september hit their lowest level in over three years sitting well below the threshold for expansion. and a bit of relief in markets as spain sells nearly 4 billion euros worth of longer term debt. yields are falling. and big job cuts could be wlooming for bank of america. reports say the company is set to shed upwards of 16,000 people by year end.
that let's take a look at how futures are trading. it is red across the board. from asia to europe, we've seen a tone of weakness. dow jones pointed lower by about 35, the nasdaq by about 5, s&p 500 looking to shed a couple points this morning, as well. take a look at the bigger picture. cnbc ftse global 300 i think can give you a sense of that. down half a% this morning. and again, we've seen more of a selloff here as weaker figures, whether that's the chinese figures or the european figures hit and people digest just what this means for the growth outlook. the major european bourses are still in the red. ibex 35 is now down 0.7% after
spain's august. only down less than half a% before that auction. the cac 40 down three quarters of a percent after disappointing reads on french factory activity. germany down 0.4%. ftse 100 down 0.6% despite firmer read on retail sales than expected. august did still show a decline give back. spain in particular, the ten year is at almost 5.75%. not too much of a move, but after it did auction off three and ten year debt, significantly lower yields than the last go around, but still maybe not low enough. the three year in particular if we can flip over to the spanish curve, bid to cover wasn't quite as strong as hoped. nevertheless you're seeing the spanish three year price rising. yield there sinking to 3.74%. quick look a commodities. the selloff is continuing.
brent crude down 0.3%. below $108 a barrel. nymex down almost 0.9% to $91.20. really wasn't long ago that this was at that triple digit level or near it. platinum and spot gold both down this morning. let's see what has been happening in asia. >> asian markets retreated following that hsbc flash china pmi reading. the composite tumbled 2% to near a four year low while the hang seng said 1.2%. mainland ship builders bucked the downward trend. nikkei gave back short lived gains. boj cut its economic outlook
after down beat trade figures and weak manufacturing sentiment reading. villes and exporters with china's exposure were also under pressure. elsewhere weakness in financials and ship builders dragged the kospi lower. i samsung lost 12% 2% on concernsy are cutting chip production. miners lost ground. sensex lower by 0.6%. well, new steps from the ecb haven't given much hope to firms in the latest eurozone block. survey points to the lowest level of activity in over three years this month. composite reading came in at 45.9. and over in china, hsbc's latest check on the manufacturing sector also remained pretty bleak. flash pmi for september inched up just a tad, 47.# from a final august reading of 47.6.
nevertheless, the 11th straight month of contraction for mainland packer tos. factories. so what does it all mean? mcneil, welcome. chris williamson pointed out that you have production falling and yet new orders picking up. so what's the signal to you? >> i think you can take a step back and you look at what we've been going in the shanghai composite and use it as a proxy it for investor attitude. we've been in a straight decline since may of this year. falling just over 20%. but now it looks like we're trying to carve out a base. certainly not something that -- certainly not something that will happen overnight and we could be in a 6% range over the course of the next month or so. >> do you see similar signs of
perhaps a bottoming in other china related markets? is there a broad sense that after the selloff that they're also now perhaps going to follow suit? >> australia's been a little bit of a different story if you look at the aussie dollar in the sense that it's been very much back and forth as the shanghai comes positive it has gotten crushed. but it if you look at, say, copper prices, those things are starting to stabilize. we've had a rather significant run up. that could be on issues of qe rather than just purely a china story. but certainly you are seeing some signs that, again, that with the aussie dollar trying to stabilize, we're at the range highs of roughly the past year, significant run up we've seen of recent in copper prices. it does suggest that going forward, the risk reward is going higher. >> and this is what's so interesting to look at the shanghai market and what is it
sniffing out. is it keying off basically u.s. easing or perhaps a policy driven response here? >> it could be a policy driven response. the money centers of the word, globally equity markets tend to do well with lots of cash. >> which is interesting so let's look for a moment at crude oil. it's fallen for a fourth con secretary could you it difference day. we had both brent and nymex down nearly 1% in trade this morning. it's been a rough couple of days for them. how can it be that at the same time you have perhaps signs of a bottoming in some of these asian
markets, certainly a risk on mood. if you go back to the qe talk in developed markets, what's going on with crude? >> i think as you pointed out, since we've had qe, you've seen risk markets and commodity markets rally extraordinarily well. gold effectively traded up just on several weeks ago about that but throughout that time even with concerns in the middle east, energy markets have not done much of anything. we've seen gasoline rally, but you had people piling into the trade saying with qe, we should see gold or -- sorry, oil decline quite sharply. so you had people pile into this trade, at the same time, markets were not able to catch a bid and yesterday as we started to break down, you had big position climbs. >> there's both a demand and
supply story here. litany of concerns out of the middlest. so why is it that there isn't more fundamental strength supporting prices here? >> i think a lot of it has to do with positioning. the bigger picture outlook for crude. in the near term, you just had a lot of people long from not very good levels and they were forced frankly, i think a lot of people would take it if we can get into a situation where risk rallies but leaves oil behind. but it just doesn't -- it seems so paradoxical. let's take a look at the agenda in the u.s. weekly jobless claims are at 8:30 a.m. and if you thought they were important before, they're even more important now. they're expected to rise by 15,373. at 9:00 a.m., it's the september market flash u.s. pmi. at 10:00, leading indicators and
philly fed survey. and boston fed president will be speaking at about quarter of 8:00 eastern time. as for earnings, results from conagra, jeffrey, oracle and cintas all due out today. and strong words in brussels. we'll be live from the summit after the break. bob... oh, hey alex. just picking up some, brochures, posters copies of my acceptance speech. great! it's always good to have a backup plan, in case i get hit by a meteor. wow, your hair looks great. didn't realize they did photoshop here. hey, good call on those mugs. can't let 'em see what you're drinking. you know, i'm glad we're both running a nice, clean race. no need to get nasty. here's your "honk if you had an affair with taylor" yard sign. looks good. [ male announcer ] fedex office. ave 50% on banners.
global business activity stalling as pmi figures from china and the eurozone show further con trags. borrowing costs falls sharply. and bank of america reportedly set to cut upwards of 16,000 jobs. early voting begins friday in the u.s. as latest polls show president obama with a small lead over mitt romney. mcneil curry is still with us. as we turn our attention to the election, should investors keep anything in mind in terms of equity performance around this event? >> sure. generally speaking we can talk about risk assets generally as they trade into year end. and the first thing is you tend
to see historically but a seasonal weakness around the september/october period. during periods of elections, you tend to see that bit of weakness skew forward into october. so we could see a bit more volatility. but big ir picture if you take a step back, you shouldn't lose sight of the fact that they tend to do well into year end. >> why is that? >> part of it could be especially this year a lot of cash still on the sidelines so you would expect a very, very strong trend to transpire. historically i think it's partly because as you will see in the september/august time frame, you see a lot of positions get cleansed out and as you get into year end, investors start to rebuild and reassess their global outlook after what is a period of negative expectations. >> lately it hasn't even been markets, it's been economic
performance broadly. stronger year end, there is momentum into the start of the year. we hit the summer and things unwind. is this just me feeling like this is the case or is there something to it? >> well, if you look at the map, there's definitely something to it. it's statistically significant. if you go back from the 1920s forward or from the '70s forward, commodity markets, you see a bias towards a bit of risk off negative price action in august, september, sometimes in the first half of october. and then from there, a very, very strong gain into year he said. so you're saying there's basic volatility around the event, perhaps weakness ahead of the election itself. does it matter who wins in terms of market performance? >> historically if you look, the democrats have done a bit better or you've seen markets perform a bit better unsdder a democratic president. but when you put together the mix between the house and senate and the president who
effectively runs the various branches, it can be a little bit more mixed. maybe this time is different, but historically, the s&p has done better with a democratic president. >> okay, mcneil will stay with us in just a bit. one of the world east largest video games conventions is kicking off. we'll hear from a firm who sees it is as a new frontier for financial trading.
let's take a quick look at how markets are trading. dow jones implied to shed about 50 points at the open. s&p 500 and nasdaq pointed a couple points lower, as well. premiere wen has been spreing in speaking in brusselss and he regrets that the eu has failed to market chinese market status, but assures they are a great supporter of taken grac eer of . were those comments meant to sort of smooth things over or is there something to them?
>> i don't think there's anything new in what he said particularly to the arms embargo. china have their view and i think the european officials are clear and they agree to disagree on this front. but it is good to hear the support reiterated. just the fact that he's here so close to the leadership transition highlights the importance of the european relationship to china, but i think the ultimate question is does the level of support and the comments he made mean there's ongoing or increased support in bond purchases or how much more convincing does china need that the situation is under control. that's no doubt going to be discussed. but it's not just about bond investments. there's other investments to be made here in europe and actually a study suggested we could see between 1 and 2 trillion dollars worth of investments from china by 2020.
so the flip side, what about eu investment in chinese companies. and that's who are difficult to s see. half thought the regulation would deteriorate over the next two years. all these things likely to be discussed take in addition to the solar panel, too. there isn't going to be a presser. certainly going to be raise questions about beijing's ability to restrict press access. back to you. >> coming back to the point about financial flows in to
europe, the importance of which especially as we look at still struggling peripheral bond markets, does it help explain why the eu has brushed these potential trade filings under a rug? >> eu officials would always say there's no political motivation for these kind of decisions. but certainly have to question it given china's ultimate calling card of $3 trillion of foreign exchange reserves. it's an open question. >> julia chatterley following that for us. thanks very much. smartphones are the future for everything. and for video games if the trend seen at the tokyo game show 2012 at least is anything to go by. the convention is one of the world's larpest ga eslargest ga events and has seen a surge in
mobile platforms.gest gaming ev and has seen a surge in mobile platforms. joining us now is co-founder and chief innovation officer. thanks for being with us this morning. >> thank you. >> tell us a little bit about what you're doing. for the most part, people in markets try to pretend like they're not just playing a game. you seem to be playing that up. >> what we see is that there is a growing population of gamers and that those gamers today play games on different kind of devices including smart phones. they play games also on facebook and casual games is a big trend. we also see that the demographic is changing. the gamers are not the people that you may think of. they are older, 75 years old on
the outer edge, like a lot of women are playing games now. they're more connected online, more sophisticated. and what we feel is that those people are very intimidated by the stock market in skrgeneral. and most offer the same to active traders. so we're trying to solve that problem and trying to engage with the gaming generation and trying to speak the same language they're used to. >> and your company started by you, a former apple software designer, you have 100,000 registered units, 2,000 brokerage accounts. so it's significant. what's interesting is the
difference between you and the traditional platforms. you have coins that people can earn in exchange for trading activity. and, yes, that may be opening you up to a different kind of user, but is it in some ways pandering to people or at risk of people who are putting in their capital risk? >> if people can learn about the stock market and understand financial information, they'll be smartser. and we believe the way to do that now is to leverage game design tools to really create a more inviting environment and also allow people to really learn and map inlate financial information so they actually understand it. so we're not a game, but we're leveraging a lot of game design tools like coins to not only
create on more user friendly and more fun environment for people to invest in, but also really to try to engage and educate our users so they actually become smarter and better investors. >> so where do you think you'll be in, say, one, two years time then? >> our goal is 1 million users and more than 25,000 brokerage accounts. >> and given you're spending less per member, certainly something for the likes of schwab to keep an eye on. thanks for your time this morning. mcneil is still with us. and i have to ask about where you potentially sort of look at markets and see opportunity right now. >> well, i think one of the big places will be in hard assets.
particularly gold. i'd focus in on gold. ultimately we think that can probably trade between 3,000 and 5,000 an ounce going forward. certainly not within the next several months, but long term basis, we're in a well defined uptrend and we certainly have more to run before that runs it course. so that certainly would be very, very strong area of interest. >> and did i see you have strong feelings on the kiwi? >> oh, yes. the aussie cross we think has a pretty down side potential, as well. we've seen decent weakness, but bigger picture if you take a step back, we've been in this range and we think we'll see continued medium term longer term weakness ultimately for a move down to we think about 115 area before all is said and
done. >> can be quite telling for prospects across that region of the world, as well. but still think it will raise an eyebrow. >> we have a lot more in the bull move and i think it's fallen off people's screens because we've been in the range trade for just about a year now and we've seen impressive strength recently, but bigger picture, there's no indication of a long term secular bull friend has run it course. >> just have to have time to wait it out. all right. mcneil, great to have you here this morning. stick around. because coming up on "worldwide exchange," we'll talk the future of payments with the ceo of verifone.
welcome back. these are your headlines from around the world. business activity continuing to stall pmi figures out from eurozone and china show further contraction. activity falling to the lowest level in three years. a bit of relief as spain sells longer term debt. yields in the ten year did fall in the wake of that.
big job cuts could be looming for bank of america. the company is set to said upwards of 16,000 positions by the end of the year. still seeing pretty much a red tone across the board. dow jones implied to open lower by about 45 minutes this morning. nasdaq and s&p also pointed down. this of course keys on off a session where in asia we had the weak eurozone pmi figures. even though spain's auction rel it's not spurring confidence. major indexes, ftse 100 down 0.7%, cac 40 now off 1%. and in the eurozone pmi figures, france in particular showed some disappointing results. and the ibex 35 in spain, down
1% again spain did manage to go to auction, raise money more cheaply than last time around especially the three year not getting quite as much demand as investors might have hoped. markets in the red this morning, but what opportunities might there be to make money? here's a quick look at the advice we've heard from experts already this morning. >> these markets are in selling risk. >> it will be basically a liquidity valley for the time being. that's why we like commodities, banks.
>> we think the opportunities lie in the spanish and italian despite the rally that we've got. following a ruling by uk media regulator issued earlier this morning, news corp is fit and proper to hold a broadcasting license, but criticized the scandal and fell short of the conduct expected of a ceo and chairman. and in response, news corp. says it's completed with it decision and disagrees with the statement over james murdoch's actions. it says mr. murdoch's comments about his handling were not substantiated by evidence and that he deserves credit for his role of bskyb. there's no evidence he engaged
in wrong doing. but news corp generally pleased with the decision. last month mobile patriot signed a deal with starbucks to process their credit and debit card transactions. this is followed by a similar offering from ebay's patriot pal% now even group on getting n on the paact. >> just improving the process for consumers wasn't enough. we also wanted to do something really disruptive. and we realize because we have this great deals business, for our groupon merchant partner, we can give them guaranteed lowest pricing in the market. so our pricing for the groupon merchants that are using payments is 1.8% plus 15% for transaction, and if they can find a better price, we guarantee we'll beat it.
>> verifone has announced it will team up with oracle to offer its own mobile payment software with a card reared and bar code scanner that can be used with an ipod touch. and the ceo joins us. doug, welcome. this is a big deal that you have announced with oracle. do you think you can take on the squares and grouponses of the world? >> it's not a matter of taking them on. we're all working together in a sense. andrew is a good friend of mine. what groupon and square and about 35 other announcements over the last 18 months are saying is that there will be a lot more ways to pay. and retailers are increasingly looking to verifone for bring it all together.
verifone's position is to play switzerland, let it cooperate and do it in a secure way.verif switzerland, let it cooperate and do it in a secure way.switz and do it in a secure way. >> have you stayed out of the space for too long so squares has the advantage? >> no, we've been in the mobile pay space for 15 years with wireless terminals. we entered the ipad, ipod space a couple years ago. so i think we've been a leader in the spaces. but we're not competing with square or groupon. we're helping them -- they want wider deployment, they'll come to us and we'll get them installed. their payment processing services installed at 70% of american retail very quickly by using our channels. >> so explain then how it is that you -- so you're saying that square actually is not a competitor? >> square is a marketer of payment processing services. for micro merchants, we com beat
with dongles, but with tradit n traditional merchants, it's a solution that could be used by folks just as we provide a channel entry into the visa and mastercard world. so if you go talk to retailers, they want to use all of the electronic wallets. they don't want to leave certain side customers on the sidewalk or store. >> so if we're all in a mobile payments world, what is verifone's role going to be there? >> verifone will continue to provide the entryway, the technology at the point of sale, the point of sale will be mobile in the store, it will be on the sidewalk, and it will be at the checkout stand. we will allow all the wallets to work together in one place for one consistent experience for the consumer and the retailer. and we'll be agnostic with respect to which way the transaction goes. >> let's go back to the poicht
point andrew mason said. as competition gets in the market, you're seeing pressure on the transaction fees. he says they'll do 1.8% plus 15 crepts per transaction. almost sounds like walmart, beat beat or match anyone else. where does that leave you? your cut often looks like it's upwards of 10%. >> all payment schemes ultimately have to pay visa or mastercard and interchange. that interchange rate is anywhere between 1.5% and 3% perhaps for some american express cards. so there's not a lot of margin for payment processors. we're not a patient processor. we don't charge for traditional retail. we provide the technology and the i.t. support to make these transactions run. but i agree with you, these guys that are competing for transaction processing rates, it seems to be a chase to zero. and that will be very dangerous.
>> and people perhaps kofrnt focus on the advertising piece. and this was quite interesting when we talked last time around. we were looking at the systems you have for example in london cabs and new york cabs and whether it's the tv display ads, those are also verifone -- that's part of your company. is it going to be a bigger part going forward? >> it will be a gigantic part. right now we're live in 35 thourk ca,000 cabs around the world. that and he going to 100,000. and we're moving to the gas pump. that's another place where the consumer is captive. he's got one hand on a nozzle and one eye on the screen. and it's a great place for media buyers to spend some of the media money.
you talked earlier about mobile gaming. digital media buyers are looking for new places to advertise coupon, provide offer, sell lottery tickets. that's a phenomenal piece of beach front property that verifone owns. >> are gas station property, i guess. doug bergeron, thanks very much for coming in this morning. still to come on the program, a number of debutantes on wall street. we'll have the ipo calendar for you. bob...
oh, hey alex. just picking up some, brochures, posters copies of my acceptance speech. great! it's always good to have a backup plan, in case i get hit by a meteor. wow, your hair looks great. didn't realize they did photoshop here. hey, good call on those mugs. can't let 'em see what you're drinking. you know, i'm glad we're both running a nice, clean race.
no need to get nasty. here's your "honk if you had an affair with taylor" yard sign. looks good. [ male announcer ] fedex office. now save 50% on banners. want to quickly show you the spanish yield curve because spain was able to raise three and ten year debt at cheaper yields than the last time it went to market, but we're still seeing a mixed reaction to that auction. spanish ten year is weaker with the yield up to 5.75%. and back here at the two year end ever thin end of things, there's a bit of a sell-off. let's get more on the reaction to this auction from stefane who is joining us from madrid. having time to process these results, what's the take?
>> amp yield dropped to 5.56%. 6.64% the last similar auction in august. clearly enough for the government to buy some time before making the decision, but obviously it's not enough for the spanish economy to avoid a bailout that the stage. raised #.8 billion euros was a bit more than the top of it target. the demand as i was saying was strong. bid to cover ratio 2.8 for the ten year. 1.6 for the three year.
now, the result will not put the pressure on the spanish government which we know is exploring other options to the bailout. newspaper reporting this morning would look to use part of the bailout for the banking sector to avoid requesting a full bailout. we know that european leaders made available 100 billion euros for the banking sector, but not all the money will be necessary. so in the end of government would like to perhaps use this money, but it would need to do so with a vote from european leaders. >> all right, receive pstefane. thanks. global activity continues to stall and continued contraction. borrowing costs fall at the latest auction. and bank of america's reportedly set to cut upwards of 16,000 jobs by year end.
they're seeing an increasingly difficult market this europe and competitive pressure in china increasing significantly. the company shares down there a little more than 2% falling on the news of these comments that mercedes-benz will be less profitable this year than last. still to come, five companies to float. an ipo bonanza. we'll tell you who to watch.
bank of america plans to cut 16,000 jobs among falling revenues. the cuts outlined in a document top management would shrink the workforce below of that wells fargo and jpmorgan. it has lagged due most tloi mortgage losses. and shares down better than 1% in frankfurt trade this morning. fed chairman ben bernanke met with members of the senate finance committee wednesday afternoon warning them of the dangers of the so-called fiscal cliff. tax hikes and spending cuts will go into effect in january unless congress agrees on a new deal. senators who attended the meeting say bernanke told them the fiscal cliff would be a severe negative shock to the
economy.alysts put the shock at upwards of five percentage points. a senate panel will put high speed trading under the spotlight holding a hearing on whether it needs more regulation. the hearing comes in the wake of several technical glitches and trouble this year that has hurt investor confidence. including erroneous trades last month. investment firm executives are expected to bring up proposals to limit market disruptions. one is kill switches. and jcpenney ceo ron johnson said the second half of the year will be about as bad as the first for the department store chain. speaking to investors wednesday, john so that said the company's turn around plan would l. take time. since taking over late last year, he's remade penjcpenney's look in advertising.
they've had a 21% drop in sales the first half of the year. shares are down almost 2% in early trade this morning. and another one to keep an eye on is daimler. seeing shares now down better than 3% this morning. this after the ceo saying it will be lower than last year's level of 5 billion euros. he says second half will be below first half figures. he cites competitive pressure in china increasing significantly and he says the company's planning restructuring measures to boost sales and earnings. you can see european autos in general down on the news. peugeot is bubicking the trend. in the u.s., jobless claims out
at 8:30 a.m. eastern. this key gauge all the more important given the fed's rhetoric around quantitative easing and expected to gain 15,000 to 373,000. moving on from that, at 9:00, september market flashhe philly. for earnings, results from conagra foods, jeffrey, oracle and cintas due out. plus no less than five companies are expected to make their ipo debut about that topping the list is trulia, it's priced its offering at $17 a share above the expected $14 to $16 range. the real estate site will trade under the ticker trla. other companies coming to market are capital bank, national bank, spirit realty. globe immunes has reportedly postponed its ipo due to low
demand. we have a preview what have we might expect from trulia. dan, what do you think will happen here? >> first i got to say i'm not surprised but i've heard a bunch of people be surprised that trulia priced high because only they were sued last week by zillow for patent infringement. a lot of people think it was to throw a wrench in the ipo. clearly didn't work. zillow was known as being much bigger, but if you look at revenue, zillow is about 43% higher in revenue, but it has 67% higher market cap at that 17 per share ipo price. so there he's actually room for trulia to grow. >> there are others who criticize the company saying it's coming to market too fast, citing the fact that it had a $7.6 million loss in the first half up there $2.6 million a year earlier. just talk buildiing about how wa
profit and ipos this year in general, that the time is not yet ripe. >> i think again looking at zillow as a comp, vil low also had a loss in 2011 and it's been trading fine. i think the thing about trulia and zillow, they have consumer facing sites. people buying homes use their app. the plus where they're trying to make the money is on the broker side. >> they have to show they can make money in mobile. how can they succeed where others have struggled? >> i said this to somebody who bought a house and used both trulia and zillow. on the mobile side, it makes accepts as a mobile app because you have people literally driving around looking at homes. so it makes sense to have an app that's mobile.
people won't use it on a desktop as much. as for make money, that's the big question mere. but investors so far validated the model with zillow and they have fairly similar business strategies. so i don't see why trulia should do worse admittedly it's smaller. but it's coming in at a 67% discount to where zillow is in terms of market cap. so it would seem to have a little bit of room to grow there. >> smaller may be beautiful for ipos as you point out in your column. facebook maybe killed the big ipo or certainly held some people off for the time being. dan, thank you very much for joining us this morning. and before we go, let's take a quick look at how markets are did doing as noted earlier. it is kind of a risk off mood this morning. the dow pointed lower. manufacturing activity in europe and china contracting and daimler talking about weakness in its mercedes-benz unit. can anything turn the market around? we'll keep an eye on jobless claims. now here's u.s. "squawk box."
today's top stories, a drop even morrow announced than the previous pop. oil prices fall into a six week low. the future of finance. bank of america reportedly speeding up a broad cost cutting plan that includes jobs losses. and why goldman ceo lloyd blankfein says tougher regulation of wall street is needed. it's thursday, september 20th, 2012. "squawk box" begins right now. good morning. welcome to "squawk box." i'm becky quick along