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tv   Worldwide Exchange  CNBC  January 15, 2014 4:00am-6:01am EST

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hello. you're watching "worldwide exchange" and i'm ross westgate. >> and i'm julia chatterley. >> it's a watershed day for apple. it's a huge announcement. i am so honored to be doing business with chairman shi and china mobile. they have the largest network. we're incredibly impressed with them. we have deep respect for them. >> the world's bank is boosting
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its outlook for global growth this year, but warns emerging markets are the most at risk due to the impact of fed tapering. >> all celebration in india flanks to a 30% fall in vegetable. and double duty growth in the asia pacific region helps bur rememberry outperform expectations in the fourth quarter. shares in the retail giant rally to the top of the stoxx 600. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. >> very good morning to you. welcome to "worldwide exchange." retail sales stronger, hawkish fed officials. >> and goldman sachs came into this week saying we can see a 10% pullback. one day and everyone is
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desperate to get back involved. >> early fed tapering, and we are feeling better. >> the world is great? >> the world is okay. plenty to get through, as well, on today's show. >> hong kong leaders pledge to tackle the policy and housing rows at its policy speech. we discuss the $10 billion deal at 10:40 cet. and it's back on the road for mary becauser. it will start paying its first dividend in five years. japan airlines grounds one of its boeing 787s raising fresh safety concerns over the company's dreamliner aircraft. we'll get the full story live from tokyo. and bank of america continues earnings season. results are out before the bell. we'll find out what banks our guests say are undervalued at 11:45 cet. and finally, delegatees from over 30 countries gather in london to discuss european
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reform. we'll go live to chancellor osbourn's key note speech this morning. but first, this is a watershed moment. that's the message from apple's ceo tim cook speaking ahead of the release of iphone from through china mobile on friday. cook says he's confident about the release on the on world's biggest carrier. eunice yoon is joining us from beijing. would he be waiting for so long for this deal to be agreed. how does it compare with our expectations? >> well, so far, it seems as though it's pretty good. at least the two men who i spoke to earlier today were very excited that this long courtship is finally over. tim cook, the ceo of apple as well as the chairman of china mobile, both of them sat down with me. and tim cook said they were
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excited and confident and optimistic about the release of the iphone this friday at china mobile stores. this is what tim cook had to say. >> it's a watershed day for apple. it's a huge announcement. i am so honored to be doing business with chairman shi and china mobile. they have the largest network. we're incredibly impressed with them. we have deep respect with them and have had from the very first discussion that we've had together. we see this as bringing the world's best smartphone to the very largest and now the fastest network in china. >> now, of course, it is a big deal that both companies were trying to work out for a very long time. for apple, one of the bybig issues is it would get access to china mobile's 160 million subscribe subscribers.
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in terms of china mobile, they wanted to have some sort of a deal because of the data plan they just unrolled 4g network, so they want to make sure that they move from a company that additionally known for voice and become a company more known for high speed data services. so that is what both of these companies are hoping to get out of them. now, one of the things that i did ask, i kept pressing them to see whether or not they could give us some estimates for iphone sales. neither of them would bite except the chairman of china mobile did say that the preorder numbers did come in quite strong. so far, he said, by just a -- since the numbers were basically taking it as preorders, they say they have about 1.2 million preorders so far. so not so shabby, ross, overall. >> yeah. and what's been the impact on apple's surprise, eunice? >> well, what was interesting since this announcement has been
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some of the chatter online. we've been hearing a bit about the pricing. the china mobile pricing has come in. it isn't as exciting as some people had hoped for because we did see that china unicom and china telecom ahead of this announcement did lower their prices. so china mobile numbers and their pricing not as exciting to be. online, there have been many complaints saying that the price of the iphone through china mobile should be lower. we'll see as to exactly how it is all going to pan out. china mobile did mention the subsidies. that was another big issue because people are wondering how much these phones would be subsidized. in other words, if they're subsidized a lot, people would be more willing to switch over to china mobile and buy an iphone. as of right now, china mobile
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has said those figures about the 70s will be released at the annual results in march. >> good stuff, eunice. thank you so much for that. >> and, of course, we'll bring you more of cnbc's interview with apple ceo tim cook and chairman of china mobile chairman xi gouhua at 11:00 cet. right now, global hours an equity and a little bit more into the european trading session, you can see we're about 7 to 2, advancers beating decliners at the moment. the ftse yesterday was up just nine points. we were turned around by the stronger retail sales data. we saw the dow snap a four-day losing streak and pick up u.s. treasuries which have been falling. the ftse 100 up 0.3%.
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xetra dax up 0.9%. cac 40 up 0.55% and ftse mib up 0.8%. burberry, a luxury christmas, posting underlying revenue which beat expectations. but the company has warned that a current level exchange rates will be something of a headwind. the chairman of monte dipaschi says the failure to carry out a capital hike later this year would bring down the country's entire banking system. alexandra is speaking after the bank decided to stay on in their roles despite being forced to delay the rights issue. the stock up 2%. tullow oil, down 1.5%. it made new oil discoveries in kenya as they expect annual revenues to come in at $2.6 billion when it releases full year results next month.
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our stock is just off a little bit. taking a look at where we are with treasury yields, right now, 2.87%, having coming down 2.84% on monday and tuesday in the wake of the nonfarm payrolls. stronger retail sales number just picking it up and two fairly hawkish fed officials speaking, both fisher and plosser saying we should wrap up tapering much sooner than the market expects. we're thinking fed rate hike would be the end of 2015. now it's being priced in around august 2015. let's show you where we stand on the currency markets. euro/dollar, we got down to around 11.37 monday and tuesday. back down to 1.36. dollar/yen getting all the way down to 102.85 on monday. now back up to 104.47. the aussie/dollar still down near these three-year lows. at the moment, .8892. and sterling back to 1.64 against the dollar. so that's european trade.
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li sixuan joins us with an update on what's happened in the rest of asia today. >> thank you, ross. let me start with china because the country's new december loan and the broader m2 money supply fell short of analyst forecasts. the total social financing aggregate which is the broader measure of liquidity remain unchanged from the previous month. yet chinese banking shares remain under pressure despite the central bank saying it will keep monetary prudent in 2014 for adjusting a tightening or loosening bias. they said risk control should be enforced. and overall, with fears of a further squeeze and shares after ipo resumption, the shanghai composite ended lower by 0.2%. but investors continue to saver small cap stocks. the nasdaq stock, china exports gained 1% today of record highs. it is now up about 7% this year alone. and after seeing 75% gains last
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year. as for the best performer today, japan's nikkei 225 rebounded 2.5% after yesterday's 3% tumble. exporters, financials, real estate stocks all made strong rallies. banking shares gained ground, closing south korea and australia. both markets ended higher by less than 1%. back to you, ross. >> sixuan, catch you later. now the world's bank is raising its forecast for global growth for the first time in three years. expects gdp to rise. the group says richer countries are finally turning a corner after the financial crisis which should support growth in developing economies. the world bank warned that prospects are vulnerable to the impact of the fed tapering which could push up interest rates. and it knows that brazil, india, turkey and indonesia are the most at risk from the withdrawal of that stimulus. the central bank is expected to raise rates for the seventh
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straight time today in brazil. some traders are predicting 50 basis points. the president has been struggling to balance growth risk and rising prices. now we're joined by didier st. george. >> good morning. >> good morning. good to have you on the on show. we have we have to be selective about how we tackle emerging markets this year and how we invest in them. how are you weighting your portfolio this year towards emerging markets? where specifically should we be focusing? >> as you suggest, indeed, last year has taught a lot of investors a lesson that in some cases it is possible that you have all the fundamental merits and still be hammered by profit taking in a lot of ways. this being said, we are a few
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months down the line and, you know, you can make a reasonable case that now the market is going to be more differentiating between those countries that are truly vulnerable, not only because of the risk of tapering and rising rates, but just because of the merits of their economies. because this morning is an interesting comparison when you look at india and brazil. brazil still has to struggle with a slowing economy and inflation. very difficult cocktail to manage while at the same time the inflation numbers are start to go be quite encouraging in india and you have the prospect later on in this year of the elections with possibly mr. mody being elected which would clearly have an impact on the business morale and optimism. so you take the example of india and brazil, no doubt that we will go for india. mexico is an interesting case, of course, the country which at
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the same time is quite linked to the u.s. economic recovery, has embarked on the number of quite convincing reforms and from the fact that china is being to some extent, you know, being put in contest with rising salaries in china whereas the situation has become more competitive in mexico. so we would clearly put more confidence in mexico, in india, than in brazil or in turkey. so very, very country-specific allocation this year. >> expecting developed market to outperform this year? >> well, i think this year it's a case where you should not just look at the emerging market as a whole. you could have huge divergence between countries. so making a broad brush call in favor of developed markets over emerging markets could be tricky. you could do an average of
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numbers. but when it comes to actual asset allocation, you want to be in the u.s. probably more now than in europe. you want to be in india more than in -- >> from what we saw the last time in 2031 would be more in the u.s. and europe. there's a big flow of people that thought they were underweight in europe. why the reversal? >> well, i think you have to admit that europe remains pretty much a liquidity play. there's no growth to -- >> each 1% gdp -- >> marginal, people coming in because they were coming out of recession, that limits growth imaginable and it's the marginal -- >> i'm not too sure it's a rate of a change of growth. it's a range of a change in risk. the fact that in the middle of 2012, there was systemic risk in europe. systemic risk is talked about the very -- not simply in discussions, but systemic risk,
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we know what it is. we saw that in the u.s. in 2008. there was a rarity which presumably he's behind us now and, therefore, it's fair enough that the world is rerating. if the rating has second place, now we're back to having the economy being a more important driver. do you prefer the european economy or do you prefer the u.s. economy? i think -- the stocks never really reflect what's going on in the economy. >> well -- >> ross. >> i think the sentiment now after those past five years is the only thing that matters is central banks and liquidity. and maybe this transition will be a trigz where you have to take both into account. i would see more visibility on one side of the currency than the other. >> some people think apparently
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you look like tim cook, right? so we had to -- i don't know. does didier look like tim cook? you can e-mail us. twe tweet @rosswestgate. what do you think? >> i think with a glasses change. >> i can see why they suggest that. so you can either write in and let us know your thoughts on does didier look like tim cook or you can send in your views about emerging markets. funny enough, it's the same e-mail address. >> strangely enough., or @rosswestgate or @jchatterley. still to come, india's headline inflation rate drops to five month lows.
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india's headline inflation drop in december thanks to run
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away vegetable prices. joining us is india's chief economist at bank of america merrill lynch. undoubtedly good news for the central bank. how will this scede into whether they have to think about hiking rates any more? >> yeah. we expect the rbi to pause into the middle of 2014 and cut 75 to 1100 basis points in the second half. our view is that inflation will come down further in the second half of the year and that will give more comfort to the rbi to cut rates. >> what about the current -- i presume that's predicated on the currency not weakening any more. are you comfortable that isn't going to happen as we've had fed officials now saying we ought to be tapering faster.
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>> yeah. i mean, we expect the currency to remain somewhere in the 60 to 65 range. with the view that the dollar remains somewhat around 1.30 euro. yes, the tapering will be a challenge and let's see how on it goes. but remember that in the indian case, rate cuts support the rupee because for india, foreign investment in equity is two $30 billion was foreign investment in debt of $20 billion. so like many other economies, rate cuts in india support the rupee and rate hikes actually go -- rupee. >> you're talking about foreign investment there in india. it's been a huge turn around story, india being one of the
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fragile five six months ago and now there's an incredible amount of what india can achieve in growth acceleration this year. is that what you're expecting, too? >> no, we do not expect growth to -- we think that the worst is over, but we do not see the compa recovery until june. we do not see any green shoots right now in the recovery. we do expect recovery later in the year and growth might go back to, let's say, 5%, 5.5% level from 4%, 4.5% this year. but that's six months away. >> can i ask you how much optimism is baked into the cake about what happens with the election later this year? i think do you have ya bank called that it could reach 24,000 this year. given what you said about
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growth, do you think that's a complete misnomer? >> well, you know, there are two things. one is what the markets priced in or don't price in and the economy. if you see the last two elections, they had big impact on stocks. you know, the market one 10% on election day either way. but that said, the impact of elections on growth, on inflation, on rupee is very muted. you know, growth has come up and come down in a -- the rupee has strengthened and weakened in every regime. inflation has gone up and come down in every regime. so i think the macro fundamentals move more with global fundamentals. but that said, the elections are always a market impacting event. >> brilliant. great to chat with you this
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morning. >> you saw a rather long delay. it happens sometimes. in some days, it's a second. some days, it's like five minutes. who knows. who knows what switching around has decided. >> we understand that problem, though, don't they? >> they might have gone by san francisco rather than the other way. >> just keep smiling. european banks are looking at the stress tests. in a letter, european banks said sovereign exposures would still be included in the health checks, and available for sale. didier, what do you make of that? >> well, i think mr. draghi is in an interesting position in this respect this year because isn't it a little bit of a conflict of interest to both have to do the examination, the
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audit of the quantity of the assets and be the lender of last resort at the same time. so i suspect to have some kind of a comment of that nature, which is difficult to understand from a pure, you know, quality examination standpoint. as dipaschi says, some banks remain right now extremely fragile. and what is done to the balance sheet following the review, you know, might be what really matters after all. but then there is, of course, in the meantime, a lot of these banks are not going to be more recovered than they've been lately, probably even less so, which is not going to have bank lending. and if there is one area in which europe is not making much progress at all, it is in bank lending in the periphery. actually, in germany even, the latest numbers are showing that bank lending is actually good
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enough, as well. and in an economy which compared to the u.s. is lots more dependent on bank lending, that is not something which, you know, can make you extremely optimistic on the recovery. >> i feel there are so many more things that i want to talk to you about, but alas, we have bitten by the bell. didier saint georges. thank you. george osborne is expected to say today that the uk will leave the eu unless it embarks on wholesale reform. that's due to start at any minute.
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and these are the headlines from around the globe. apple ceo tim cook says the company has made a deal with china mobile through access with a very fast network. >> it's a watershed day for apple. it's a huge announcement. i am so ownered to be doing business with chairman xi and china mobile. they have the largest network. we're incredibly impressed with them. we have deep respect for them. the world's bank is boosting its outlook for global growth this year, but warns emerging markets are the most at risk due to the impact of fed tapering.
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shares in burberry rally to the top of the stoxx 600. >> we're an hour and a half into the trading day here in europe. the ftse 00 is up 0. 3% this morning. burberry is helping out nearly 5%. the xetra dax up just under 1%. cac 40 up 0.6% and the ftse mib up a little more than that. on the bond markets? >> we're looking at the bund and treasuries. they're inching higher, 2.88% after the rally that we saw in equities.
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the bund and italy remaining stable. >> on the currency markets, retail sales numbers better than expected in the united states. two fairly hawkish speakers saying we should be tapering faster than is currently planned. so 1.36% against the euro. dollar/yen is at 104.37 after being down from 105. cable just around 1.64. >> hollande yesterday giving the dollar a bit of a boost. for now, we are waiting to hear from uk chancellor george osborne and we'll bring you his comments when he's speaking. joining us in the studio is helia while we wait for the chancellor to get under way this morning. he's going to say the eu is
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falling behind, we have to cut well fare spending. is this speech for europe or the uk? >> it's interesting. he's going to be reiterating some of those campaign logos from 2010, smings like things l go on like this. we have to make a decision. it's either reform or decline. that's what the chancellor is going to say. >> reform or decline. whatever happens, the uk is going to go out of the eu because europe is going to go for it, create a closer unit and actually, this is a decision that is not going to rest with britain. because by default, they're going to create something in europe that we can't join. so the debate here is completely anemic. >> i don't think so. i think the idea is that the uk government is facing is can they reform europe in a way that works for uk voters. that's the argument they have to
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make before the 2017 referendum. >> but my point is the referendum will be completely irrelevant because what they are going to create is a union which we couldn't possibly join, anyway. >> they haven't decided what he's going to ask for. >> remember that he -- >> we haven't asked people what they want yet. we need a concise plan. >> george osborne, today, has to seed the way. but he is going to try and fight for the uk within this renegotiation. >> is he going to get knit support from germany? germany should support george osborne's plans, right, to make the eu more competitive.
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>> germany's huge current account surplus must be rebalanced. that's the verdict of hans verna sinn, the ifo president. interesting conversation. it's a nice way to avoid the subject of conversation domestically in germany. the coalition are suffering a bit of criticism of who wants to spend what and mr. wolfgang schroebler is keeping the purse strings very tight. >> yeah. that's very much true. people are saying that this coalition has a very rocky start. it's only a month since they actually started that coalition and they already can't agree on anything, it seems. but remember last time it was the same and last time it was, as well, a rocky start. and the coalition lasted for four years. so it remains to be seen. perhaps it's just a little bit
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of a political theater play here, as well, going on in berlin. but coming back, it was quite interesting. i was asking about the big current account surplus germany is having. that is what he had to say regarding those surpluses. take a listen. >> when the euro was introduced, it was a huge capital outflows, boosting these other countries bringing germany to a slump. then there was a crisis and the private flow was replaced from the ecb from the rescue operations. and all these resource demands, let's say, by other countries are still there and they are basically behind the huge german account surplus. that needs to be rebalanced. >> now, this coalition is really doing, i would like to discuss now with my guest, cars nichols. thank you very much for joining us. so what is your take?
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do you think it's a very rocky start this coalition is having? >> no. i think this is completely overdone, to be honest. if we look back at the facts, it took a couple months to get this coalition agreement negotiated, then merkel was re-elected just before christmas. and then we've seen the holidays. this is the first the german parliament is actually going back to work. we haven't seen anything substantial. there's been a couple interviews over the christmas holiday break, but we simply don't know yet how this government is working. so i think this is completely overdone. >> okay. we are not going to look into the crystal ball, then. let us talk about the gdp numbers. they came out a little bit on the disappointing side today in germany. is that something we should worry about or is it just a temporary weakness? >> yeah, temporary, i think. if you look at the political implications of that, these are still -- you know, given what's going on in the regional context that germany is in, these are
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positive numbers and they will be welcomed, after all, by politicians here in berlin because you can use them in two constituencies. you can use them in brussels saying, look, the recipe that we have been subscribing in europe is watching out. and then you can use it for the domestic constituency in this building, as well. you can say look, it has never been popular with german voters to promise help to the european partners, but in return for this, we slightly see an uptick in performance across the eurozone. whether that is true economically in the end remain toes be seen. >> one of the weaknesses reading through the numbers. >> yeah, i think domestic investment and domestic consumption, that is not going to change massively. if you look at it politically, there's no real push for this in there new grand coalition, just a sense for competitiveness.
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you know, the focus on exports, on international markets and so on, that is strong across the political board in germany. so i wouldn't really expect major changes there. >> so when they were saying, yeah, germany is moving in the right direction, it's just a lot of rhetoric and nothing, really? >> probably. the criticism isn't coming from the united states towards germany. that is something that is well known here in germany. it hasn't triggered any change. how could it? what is important is the domestic grounding of these political parties here. germany's conservative political union and, of course, the employers with the influence on the cdu, there is a very strong coalition behind the current economic setup in germany. >> thank you very much for joining us. so this is like the latest from germany. but the very latest is actually the berlin fashion week.
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have you ever heard of it, jules? >> i actually can't say i have, annette. but we have to leave you there. we'll be back with you later on in the show. but for now, uk chancellor george osborne has been speaking and we're going to listen in now. >> absolutely necessary to persuade people of the merits of the eu. it was, after all, sold to our company as a european economic community. and without economic success, at the u will not be regarded as democratically legitimate. you can see that in the way that support for the eu has fallen sharply right across the continent during the economic crisis. so today i want to develop the conversation about some of the economic reforms that we want to secure as part of the forthcoming negotiations. we need two things. first, we need economic reforms that enables the eu to create jobs and economic security and compete in the global race, something it is not doing well at the moment.
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and second, as the eurozone undertakes the integration required to make the euro work, we need constitutional reforms to make sure that those countries who are not in the euro can remain in the eu confident that their interests and rights will be protected. let me begin with the first of those things, with jobs and economic security. now, we all know there was a competitiveness problem in europe before the crisis. but the crisis is dramatically accelerated, the shifts in the tectonic economic plates can see power moves eastward and southward on our planet. over the last six years, the european economy has stalled. in the same period, the indian economy has grown by more than a third. the chinese economy by nearly 70%. over the next 15 years, europe's share of global output is forecast to half. make no mistake, our continent
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is falling behind. look at innovation. where europe's share of world patent applications nearly halved in the last decade. unemployment, there are a quarter of young people looking for work can't find it. look at welfare. europe accounts for just over 7% of the world's population, 25% of its economy and 50% of global social welfare spending. this is the continent that for centuries led the world in innovation and discovery, enterprise and work ethic. are we to say that the work that gave us galileo, darwin, the industrial revolution, democracy and the free economy, the continent that gave us all of these things has just given up on the future because it's all too difficult? and as the father of two young children, i don't want to turn
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to them & as we see the latest chinese scientific break through or indian innovation and say that used to be us. that used to be europe. the hard truth is if we want to maintain our way of life in europe, we have to get more competitive. that is going to require some tough steps, living within our means, expanding free trade. now, most of -- will have to be taken at a domestic level. .i'm not sure to lecture other member states will that. not least because the uk has to take more than most. when i entered office three years ago, we ufrd one of the sharpest falls in output and faced a higher budget than almost any major economy. higher than spain or portugal, much higher than italy or
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france. that is why we're working through a long-term economic plan that makes tougher choices necessary for our prosperity. reducing borrowing, investment in business and infrastructure, capping welfare and controlling him gragz, delivering better skills of schools. and i know that we are not alone. many of our neighbors have also taken tough decisions in recent years. we in britain should praise them for it, not dismiss them. germany led the way a decade ago with its employment and welfare reforms, unemployment remains half the european average. spain is undertaking radical labor market reforms, so they're now yielding real results. >> we are going to leave george osborne speaking there, but we will continue to bring you the headlines from that. helia, any key take aways from that? the stand out for me, 7.% of the population is europe, 50% of
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social welfare spending. >> normally, that is seen as a sign of a wealthy and very progressive region. but i think here, what george osborne is saying is look to the east, look to the south, they're gaping ahead of europe. he's going to say later in his speech that in the next 15 years, europe's part of the global economy is going to go down by 50%. and that really, in order to tackle this and if europe wants the uk to remain within it, we have to focus on two things. we must back business and we must really curb welfare across the whole of the continent. and without those two key measures, he says uk knot going to be part of europe. >> how about we put forward a plan of what the uk wants and wants to see specifically? because we're still avoiding of
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saying exactly what we want. that's part of the criticism that comes back from europe. >> we're seeing the prime minister needs to be allowed out of some of these bureaucratic rules. you had the letter from the mps last week saying we want all uk businesses that don't trade with europe to be allowed out of the european rules. that was actually dismissed from the uk government. we have merkel coming up to the uk at the end of february. presumably, that's the moment where we're going to see discussions for what the uk actually wants. >> helia, great to chat with you. >> good game, though. >> great game. still to come, the leader of hong kong has taken aim at the recent struggle with positive housing. we'll get more on that pledge.
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welcome back. egyptians have one more day to vote for a new constitution which could pave the way for special elections. the referendum takes place in a tight security after an
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explosion took place in cairo yesterday, although no casualties were reported. yusef joins us now for more on the story. yusef, is it having any impact on people being able to vote? >> well, from the cues we've seen so far, it appears not to have a substantial impact. it's difficult to gauge. we'll have to wait and see later how those turn outnumbers come in. in any case, day two of this new constitution, the poles will be open until 9:00 p.m. despite there not being any casualties with the bomb blast that you mentioned, there were still 111 people killed and some 42 people injured, according to state media in clashes between supporters of tt mohammed morsi and the different security forces across the country. there's much more to it. this is effectively rubber stamping the ousting of mohammed morsi last summer and could open
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the door for the candidacy of the army chief himself. the stock exchange is trading to the upside. but with all the violence that is happening, late yesterday, i made it to the makeshift finance mip industry after passing several checkpoints. the original one was put on fire, burned down, effectively. >> we know things have been quieting down, fewer demonstrations, let injuries. security has been gaining grounds, that's number one. number two, this morning, i went and voted myself. long lines, energy, optimism.
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and i think the march for putting egypt on the right track politically and building political institutions is right there. there will always be some who do not understand the change. >> and basically keeping the door open for further support from abroad. remember, some $12 billion in eight pledges came from the oil rif rich gulf countries. government is dealing with a widening budget deficit. there's a lot of pressure here. that is not going to happen realistically or effectively until there is stability. we're sticking with their 3% to 3.5% growth target for the transitional period which would end by this summer. we'll keep you posted, but for now, it's back to you. >> yusef, it's good stuff. plenty more online, as well. now, new lending in china has slowed in december as the
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pboc steps up its campaign to curb run away credit. money supply rose less than expected while social financing was flat on the month. at the same time, hong kong's chief executive is wanting to help low income families and alleviate the city's housing squeeze. in his annual policy speech, leung announced a $3 billion subsidy scheme for the poor. it equates to around $229 million u.s. he's ramping to up the housing supply. >> apart from soaring property and rental prices, cramped living conditions trouble hong kong people. our target is to ensure that
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hong kong people are adequately housed and will have better accommodation. the we must plan not only for the next two years, but for the next 30 years. >> joining us from hong kong, peter, good to see you. how is the speech from cy leung gone down? how has it been received? >> i think that this is generally a set of an annual show piece event. and i don't think there were any big surprises in it. we know kind of what the hong kong government wants to do and what they're trying to do. people are looking closely to see what kind of carrots are being offered to the public here. there are essentially three debates. one is about property prices, one is about general inequality and the other one is about the prospects of democracy, the prospects of universal suffrage of hong kong people.
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and the hong kong government's strategy is very clear. the first two issues, improve the housing supply and handouts for the poor but nothing at all on democracy. >> we can hope at some point they're going to address the political reform issue. can i ask you what they're going to do on housing here. it's effectively back fired. we're still seeing prices at the medium to low end of the market. what can they do here? >> that's exactly right. there's the hong kong authorities until recently they've basically tried to deal with the demand side. they took all kinds of measures to make it harder to protect mortgages, to protect the banking system. when that didn't work, they spruced as you say just over a year ago the duty to stop people from the mainland or ex pats to discourage them from buying
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property. that basically hits the luxury part of the market. but on the lower end, interest rates are low. people don't really have anywhere else to put their money. also there's a shortage of supply. that's something the government is now talking about dealing with. they're talking about increasing the amount of supply. they're allowing more apartments to be built on the same part of land, which means even more densely populated how the housing estates for people and even more crowding. i think they're trying to partly deal with that, but it won't necessarily make people feel better. >> the bottom line is, if they want to call the house market, we have to raise rates. >> that is a very interesting question. clearly, hong kong has had -- the dollar in u.s. monetary policy for the last five years and obviously the chinese growth
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at the same time. so that has been totally inappropriate and has expressed itself in this big asset bubble. there will be some tightening in the u.s. as long as the peg is maintained. but it will be interesting to see kind of how that plays out, how that dynamic plays out because, of course, there is still a lot of money potentially coming across the border from china which affects the hong kong market just as much as interest rates in the u.s. >> good to see you. we'll take a short break. still to come, we'll be back in beijing for unieunice yoon's interview with tim cook after a deal has been announced with apple and china mobile.
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welcome to "worldwide exchange." i'm julia chatterley. >> and i'm ross westgate. these are your headlines today from around the globe. a game changer for apple. tim cook says the deal with china mobile will provide access to a very fast network. >> it's a watershed day for apple. it's a huge announcement. i am so honored to be doing business with chairman xi and china mobile. they have the largest network. we are incredibly impressed with them. we have deep respect for them.
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are emerging markets at most risk for contracting because of impact of fed tapering? and george osborne warnings that the european union is falling behind india and china and calls for immediate reforms. >> of the next 15 years, europe's share of global output is forecast to half. make no mistake, our continent is falling behind. it can't go on like this. gm is bringing back a quarterly dividend, as well. on the back of strong sales, the automaker last year. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. >> if you're just tuning in, thanks for joining us here on the show. let me give a look at how the markets are faring ahead of the
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u.s. markets. the indices all rallying in yesterday's trading sessions. it seems we're going to add to those gains today as far as the futures are concerned. the dow adding around 29 points ahead of u.s. trading today. we've got the nasdaq gaining around 10 points and the s&p 500 gaining around 2 points. so that one valued over 1% in trading yesterday, too. let me give you a look at what's going on as far as the biggest, the 300 biggest global stocks are concerned. and it was a relatively mixed gaining session as far as the asian session was concerned and the story continues here in europe. let me give you a look at the individual stock performances here. the ftse 100 up 0.7%. the burberry, the outperformer there, the fashion brand. the german market higher by 0.8%. we've got the french market higher by 0.4% and finally, the italian market is higher by around 0.5%. >> we were helped, weren't we, yesterday by u.s. retail sales. how has that impacted us today
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in european treasury yields -- sorry, european debt yields. let's just show you. a little higher across the board. spanish yields a little lower, 3.78% is where we stand at the moment. i wish i could show you where we were with ten-year treasury yields would be helpful. they have come up from around 272 2.3%, 2.84%. there we go. 2.8el 72%. as far as the currency markets are concerned, euro/dollar, we got up to 1.372. right now, 1 .3618. dollar/yen, 104.28. aussie -- slor/dollar, .8899.
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what about that asian session? sixuan wraps it up as ever from singapore. >> thank you, ross, for that. china market underperforms most of asia with a further cash squeeze weighing on sentiment. but investors continue to favor small cap stocks. the nasdaq china export added 1% today to a record high. it's now up over 7% this year alone after so many so much 5% gains last year. as for the best performers today in asia, japan's nikkei 225 rebounded after yesterday's 3% tumble. exporters, financials, real estate stocks all made strong rallies. elsewhere, banking stocks gained ground both in south korea. both markets ended in the green today. on the data front, china's december loans and the broader m2 money supplies both fell short of analyst forecasts. the total social financing aggregate which is a broader
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measure of liquidity remain unchanged from the previous banks. yet chinese banks remained under pressure despite banks saying it would keep monetary policy the same for 2014. the pboc pointed at the benefits of shadow banking and said risk control should be enforced. back to you guys. >> all right. >> i think they're late. thank you very much. very kind of you. jules is now with me. it's fantastic. >> i had so much fun in the last two days, i thought i'd say. let's give you a look at what's on today's agenda in the united states. december ppi is out at 8:30 eastern. they're expected to rise by 0..2%. 2:00 p.m., we get the latest beige book report from the fed. we've got fed speak, chicago fed
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president charles evans and atlanta fed president dennis lockhart will be speaking today. earnings for bank of america comes in before the opening bell and csx out after the close. >> there is your agenda. meanwhile, we finally got there. thank goodness for that. a watershed moment, that was the message from apple phone's tim cook. cook said he's extremely confident about the release of the world's biggest carrier. china mobile says it's received 1.2 million preorders for iphones since december the 25th. eunice has been speaking to both gentlemen. she's got more for us from beijing. eunice, we've waited so long for this deal. is it okay now that we've got there and are we sort of fairly happy with the details? >> well, i'm sure both men are
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fairly happy with the details. they are able to close the deal. there were good feelings all around today to see the reports between the two mep. the china mobile chairman said now i'm going to switch to an iphone. tim cook apparently had given him his own iphone that was made for china mobile. it was in the gold color because that's popular here in china. overall, there is so much excitement over the release of china mobile which will be in stores on friday. >> it's a watershed day for apple. it's a huge announcement. i am so honored to be doing business with chairman xi and china mobile. they have the largest network. we're incredibly impressed with them. we have deep respect for them and have had from the very first discussion that we've had together. we see this as bringing the world's best smartphone to the very largest and now the fastest
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network in china. >> now, this is a dole that both companies have been working on for quite some time because you could see how both of them would benefit. china mobile on the one hand and trying to really reshape itself and it changes its reputation from a company that's known more for voice instead of data. now it's built out a big data network, 4g. it's hoping to benefit that way. and for apple, it gets to plug into china mobile's massive network. it has over 760 million subscribers. and appearing says this is just one way that they're going to be able to built the momentum which ended very strong, tim cook said, at the end of last year. >> last year, we were able to work with the government authorities to be able to launch china at the same time that we launched every other country. and the results of doing that, i'm pleased to tell you, although we haven't released our
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total results, as we expected, we sold more iphone units last quarter in greater china than ever before. and so we see that momentum and the announcement with china mobile today as just being able to, you know, continuing the momentum that we've really been building for the last three or four years or so in china. it is a very key market for us. >> now, one of the big questions that hasn't yet been answered is the question over subsidies, just how big the china mobile on subsidies are going to be. that's really going to determine just how much people are going to be upgrading to the iphone or switching from china unicom or china telecom.
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both of those companies cut their prices just ahead of the release of the iphone at china mobile. >> yeah. subsidies. we'll see, i guess, what happens to that, eunice. great stuff. i'm pleased we finally got an announcement. between this and tapering, we can move on. i'm very happy. eunice, great stuff. thanks very much. >> until apple's earnings and then we have to pore over the details. the subsidies. the china mobile boss gets one for free. he gets his gold one for free. any guess? >> what? >> how much they're going to have to -- >> no, no. >> they're being sold by two of their suppliers who are already cutting prices. >> interesting. now, general motors will start paying a quarterly dividend in march. the automaker's stopped dividend
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necessary june 2008 before it was bailed out by the u.s. government. it comes after gm posted a 4% increase in global sales last year, helping it secure second place behind toyota. naming chuck stevens as ceo who becomes company president today. shares rose 2% in after hours. today, adding to those gains in the german trading session. >> on the stock, still to come, as egyptians head to the polls on the final day for the constitutional vote, which could pave the way for new elections, the company's finance minister speaks exclusively with cnbc. more in a moment.
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an sxloegz took place in cairo yesterday. joining us with more is yusef. yusef, how is the vote going? >> well, so far, ross, it's slightly more peaceful than yesterday. stai state media saying clashes in the last 24 hours in supporters of president mohammed
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morsi and security forces across different parts of the country. what i've been able to observe, issues like the role of religion, the issue is much more one of whether or not individual egyptians support the idea of the army back transition and possibly even a candidacy of the army chief himself. this is why this referendum, the second day which ends today at 9:00 p.m., is so important. that is why the turnout figures are going to be critical and the benchmark will be the previous constitutional referendum. the end of 24 was about 33%. that's the figure to be theoretically if the army back
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transitional government would like more legitimacy and proof to the world that they're going in the right direction. we're watching very, very closely. they are secured some grants from the oil rich gulf countries to the tune of $12 billion. that money was channeled into stem ewe husband packages. so i asked him whether the egyptian economy was becoming dependent on those funds and whether they needed more. >> the egyptian economies can benefit from all the support they can get. it doesn't mean that they are going to rely full lit outside the support. as i might have told you last time at the end of june of 2013, budget deficit was 20% of gdp. economic growth last year was only 2.2% of gdp. 2.2% growth rate.
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unemployment was close to 2.4%. you had an economy that needed to be pushed. >> do you feel the egyptian pound is overvalued? >> you don't expect me to answer that. >> well, i thought i'd go your cue. as a finance minister, you probably have the -- >> this is a central bank, central bank's business and i would leave it to the government to comment. >> so on you don't have a particular opinion on where the egyptian pound should be -- >> no. there has been a movement in the exchange rate relative in the egyptian pound to the dollar. here is the economy as we would like to believe that the economy would recover, fdi would be back, our exports would go up. that pressure on the pound would be much less. exactly where that will, you know, where will it end to be, it's a function of all these variables. >> keep in mind the government
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deficit has been widening. the only other indicators might be encouraging, like the government borrowing yields which have eased over the last few months and the egyptian stock market which has been on a tear rising over 45% in the last six months. trading to the upside yesterday and to the upside today in the action we're seeing this morning. so that is the update from here. i'll hand it back over to you. >> thanks so much. nice to talk to you, as always. ahead of friday's big lauren, apple says its new deal with china mobile won't just be restricted to selling iphones. >> general motors is paying out for quarterly dividends for the first time since 2008. >> and fed tapering will hurt emerging markets. the world banks, at the same time, the organization upped the -- for growth. and still to come on the show show, should power flow back from brussels to national
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parliament? george osborne seems to think so. we'll talk to the former prime minister of slovakia and see what she thinks after the break. stay with us. i need proof of insurance. that's my geico digital insurance id card - gots all my pertinents on it and such. works for me. turn to the camera. ah, actually i think my eyes might ha... next! digital insurance id cards. just a tap away on the geico app. could save you fifteen percent or more on car insurance. everybody knows that. well, did you know that when a tree falls in the forest and no one's around, it does make a sound? ohhh...ugh. geico. little help here. open to innovation. open to ambition. open to bold ideas. that's why new york has a new plan -- dozens of tax free zones all across the state. move here, expand here, or start a new business here
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after the bounce yesterday, let's show you where u.s. futures are. the dow snapping a four-day winning streak -- four day losing streak, i should say. 115 points right now. the s&p is called up 2. the nasdaq currently called high by around 11 points. european banks will not be required to mark to market their sovereign debt portfolios in the upcoming stress tests. the european central bank said sovereign exposures will still be included in those health checks. those show health maturity and availability for sales. >> meanwhile, the eu falling behind india and china is. speaking earlier, mr. osbourn claimed the continent's competitiveness was being lost. >> we all knew there was a competitiveness problem in europe before the crisis. but the crisis is dramatically accelerated, the shifts in the
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tectonic economic place to see support moving eastward and southward on our planet. >> now, joining us is yvette, the former prime minister of slovakia. thank you. thank you so much for coming to talk to us this morning. >> thank you for the invitation. >> we're blaming the uk for being violent in their demand as far as europe is concerned. but the likes of the dutch have said the time for more europe is over. and so what is the deal .how does europe need to adapt? >> i would try to be as simple as possible. first of all, creation of european union, world base on total collapse at the end of second world war and such a value is like peace, freedom, human rights, etcetera, were the major common aim of all of us. but we did it. more or less. and all these rights and values
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at present. we have at a national level at our constitutional law. therefore, we can solve more problems around like sometimes a deficit, sometimes financial deficit, but still on the level of national countries and states. therefore, there is a question, what is the new aim? what is the common value of this continent? >> what is the end project that was started when germany and france really got together for a political idea not to have to go to war together, but what is the end project? there are those in brussels. jean-claude trichet says the end project is it's a political union, it's more power to the european parliament, it's a stripping down of national power. that's what we need. it's burden sharing. is that the end project? >> who needs a project? do you think? >> well, that -- i'm sure that's
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what they think. >> is it possible? then the question is what do you really need and how to create new feeling that we are living in the common world and it has a sense. needs new vision, new idea, which we can offer to the citizens. give me example. you have a headline. apple and china mobile together, great business. okay. but for politicians, this is something unbelievable. because my question is it is for political prisoners to have better position to have a phone call from that reason. they have forgotten. so to return to europe, to understand me correctly, we have single market. we have free movement of goods for that services.
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we have problems of free movement, be open, but we haven't single space, single incorporation market for cultural value and common values of europe. i will explain it in one sentence. europe is maximizing their diversity. on minimum space. so the only way what we can do is to support this diversity. there is no will, no need to be the same. >> so on no federal europe, no -- >> i do not believe in this concept because -- and i am not only one, but majority of citizens. neither either -- >> they didn't ask the population when they started the project, either. i don't know why they would start asking them now. but we'll see what happens.
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>> we know what will happen. they will say no. still to come, the world bank is adding fuel to the fire of economic fears. but is it still value for risk hungry investors? find out more after the break. ♪ [ male announcer ] this man has an accomplished research and analytical group at his disposal. ♪ but even more impressive is how he puts it to work for his clients. ♪ morning. morning. thanks for meeting so early. oh, it's not a big deal at all. come on in. [ male announcer ] it's how edward jones makes sense of investing. ♪
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welcome to "worldwide exchange." i'm julia chatterley. >> and i'm ross westgate. aapple's ceo tim cook says a deal has been made with china mobile to provide iphones with a very fast network. >> it's a watershed day for apple. it is a huge announcement. i am so ownered to be doing business with chairman xi examine china mobile. they have the largest network. we're incredibly impressed with them. banks boosting its outlook for global growth, but warns emerging markets are at closer risk for the impact of fed tapering. >> you can tell us that george osborne warnings that the european union is falling behind india and china or calls for immediate reforms. >> over the next 15 years, europe's share of global output is forecast to half.
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make no mistake, our continent is falling behind. we can't go on like this. and gm is bringing back a quarterly dividend, its first such payout since 2008 on the back of strong sales last year. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. if you're just tuning in, thanks for joining us here on the show. let me give you a quick look at how the markets are faring ahead of the u.s. open. we've got a few hours yet, but it's green on the board again today. the dow futures indicating around 33 points higher. dow adding 0.7% in trading yesterday and the nasdaq indicating higher by around 11.2, adding to yesterday's gains of 1.6% in trading. and the s&p 500 higher here in the futures by 2.4 points so
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far. let's take a quick look at how the european markets have traded this morning. green, green everywhere. we've got the ftse up by around 0.3%. the german market outperforming here, higher by 0.8%. we've got the cac 40, the french market up by 0.4% and the italian markets having a strong day today, too, up 0.8%. ross. >> thanks for that, jules. that's where access prices are trading at the moment. what are we to do as global investors? here is a recap of some of the thoughts of some of the guests we've had on cnbc today. >> our economy expects business investment two weeks in a row significantly once and should the debt ceiling issue come to pass, as of february the 7th, and that should see the u.s. economy accelerate around 2.8% growth this year which should keep upward pressure on the end of the curve or all the commodities on the front he because the fed is going to beef up its forward guidance.
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>> obviously, business in europe is way down and there's a disconnect between the two. and the difference, obviously, is china and the emerging markets have all of these companies have made a huge amount of money. really, what we're saying is that earnings expectations and current multiples are well ahead of the growth that we see for 2014. >> what's interesting is we've seen a divergence from china. part of that reflects how big the company is, how will established it is in the market. but i think they're seeing not declining in that market is being the coach and other players continue to see growth. >> today, the world bank, meanwhile, is raising its forecast for gloeth global growth for the first time in three years. now expects gdp to be up 3.4% this year in 2013.
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the group says which countries are finally turning a corner. which should support growth in developing economies, although the prospects are still vulnerable because of the fed's tapering which could push up interest rates. brazil, turkey, indonesia are the most at risk for withdraw of u.s. stimulus. tim joins us now. pick up on that withdrawal of u.s. stimulus, mr. plosser and the fed saying we should wrap up asset purchase quicker than what the market is currently pricing in. do you think that is going to happen, bearing in mind the data from friday with the employment report? >> i expect policymakers are focused on the risk of policy error. and the perceived risk of policy error. and they spent an awful lot of time getting this $10 billion a month tapering pace into the market. and into the market in a sense that the market is now taking on
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board at least the developed equity in bond markets in a positive sense. i think if it's a question of, well, the u.s. economy is galloping along and the budget is going to be a bit more balanced than we thought it was going to be, therefore, we can afford to taper, i don't think markets would really buy into that. so i think the core view of the fed, particularly with the new governor coming in, mrs. yellen coming in, i think it's going to be steady as she goes right through to the end of the year. i don't put too much weight on that. >> on that basis, how do equities trade, bearing in mind they didn't really pause at all? i know we had a poor losing day to the dow. >> it's extraordinary, ross. in my view, all is pretty much set across the developed world. we're now seeing the eurozone likely to see a 1.5% hike of rates. germany could be growing at a pace next year. we're going to see the three handle coming for this year's growth. it's going to be an earnings driven world where valuations
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aren't so expensive. with inflation pressures, if you read the ft this morning, deflation resurge, that i think has the bond market risk. so i think with bond yields and developed markets low at 3.5%, all is set fair. just coming back to this set back or the drawdown issue, yes, if you're gut, you're saying neither the s&p nor the ftse hits a string of 2012. so, you know, human nature, that must be happening. but then we look at the money flowing coming in. look at yesterday, the ftse on the back of the u.s. on monday opened up 80 points down. that was 100 points ago. so there is clearly money flows buying into this. and from that point of view, we're not galloping away in the near year by any means. it's steady as we go, positive, it's not a revaluation year, but it's an earnings driven year. for me, that's okay. >> based on that, how much of your portfolio are you willing to hold in cash at this moment?
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we keep talking about where with can he invest, where can we invest? what about holding a bit of money in cash and you have to get involved? >> you keep cash values -- you never know when you're going to need to have that cash working for you. you extend a bit into the duration now and i think you'll find most bond managers had an extended duration over the past few months. they are getting paid there. if you look at credit risk, at least in the developed markets, i think that still looks a pretty reasonable risk return. in equity terms, we would still be overweight on a balanced portfolio. >> so you like -- >> very much. >> tell us what investors should be doing. >> the yield is simply in the beaten up sectors. so you have to be very careful. this morning, there's a message there because, clearly, that is a fiscal power. so the insurers, if you buy 6%, 7% yields, they're there for a
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reason. >> it's interesting, the uk you fancy over eurozone and the u.s. and it did drag on basic resources. is that a kul that resources are going to change or what is it about the uk market that -- >> no, ross, i think when you look at the components of the uk, yes, it has more of a -- about 25% of uk energy or materials. and i think we still -- we're pretty -- not bearish, but we're not very excited about the outlook for gold, for oil, other basis at this stage. we are more positive on the cycle. we're more positive on the financials. and the uk had quite a weight on financials and they don't pay yields. but going back to the other question, where did you get pay and some of the consumer discretionary stocks, vodafone, the five handle you get there, some of the utility stocks, some like national grid, that's a solid situation you have there. there are 4%, 5% yields you can pick up. managers know they're getting equity volatility when they're
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buying yields in the equity markets, but that has been a trade that the search for income has been a trade for the last 18 months and remains the theme for this year. >> brilliant. tim harris, yes, the ceo of harris capital. thank you. now, coming up, when is a recall not a recall? when elon musk says it isn't. he's at odds with regulators on what he calls a remedy to fix the problem on the electric vehicles. mine was earned orbiting the moon in 1971. afghanistan, in 2009. on the u.s.s. saratoga in 1982. [ male announcer ] once it's earned, usaa auto insurance is often handed down from generation to generation. because it offers a superior level of protection. and because usaa's commitment to serve current and former military members and their families is without equal. begin your legacy. get an auto insurance quote. usaa. we know what it means to serve.
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now, it's the tale of two automakers this morning. u.s. safety regulators and gm have decide to return some cash to shareholders. to get more on that, seema mody is with us at cnbc hq. hi, seema. what are you going to start with? >> let's start with gm. of course, a lot of auto news. when it comes to gm, the company will start paying a quarterly dividend at 30 cents a share in march. it's the automaker's first common stock share in june 2008 before starting with bankruptcy. gm had been pressured to reinstate the dividend since before the treasury department sold off its remaining stake. it will cost nearly $1.7
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billion. it comes as the company says durable sales rose to 1.79 million vehicles. u.s. sales rose 7%. that helped gm secure secretary place behind toyota. shares rose 3% in after hours trade. ceo elon musk is disputing the use of the word "recall" by safety regulators. tesla's most la week to provide upgraded wall adapters and charging software for about 29,000 model s sedans as a recall citing the risk of fire. that comes after a garage fire in november which authorities say may have been caused by a charger. on cnbc's closing bell, musk says no vehicles are being physically recalled. >> it doesn't make sense to call it a recall. it's an over the air update. it makes sense in the 21st
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century. it's just that the word -- this is a better word than "recall" to describe. remedy would be certainly an accurate way to describe it. >> earlier on tuesday, tesla said it delivered 6,900 model s vehicles in the fourth quarter, 20% above what the company had forecast. tesla secretaries to double growth and sales locations this year and is working on the new model s crossover vehicle which it hopes to day due in the second half of the year. tesla is delivering more cars in the april now. >> we're putting cars on the boat in essentially about a month. and i think towards the end of this year, we'll see very significant sales in china. we've seen a tremendous amount of product.
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>> tesla was a standout stock in yesterday's trade, closing up 16%. ross and julia. >> okay. i don't know about the whole recall, when it -- you know, you wanted to upgrade the chargers and a couple other things. but they said there was a risk of fire. so who -- you know, right? recall, not recall, it doesn't matter. the cars have to go back. >> ross, i have to ask you, have you ever been in a tesla? >> no. why? are you inviting me? >> i would like to invite you. one day, we should try it out. i have had the opportunity to ride in one and i have to say, it's a very fun experience. >> the good thing with electric cars is the initial accelerator, there's no lag on the acceleration. it's instant power transmission is what i guess. >> right. the acceleration and it's very
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quiet. >> yeah. which you need to do something about. thanks for that, seema. let's recap the headlines. >> ahead of friday's big launch, apple says its new deal with china mobile won't be just restricted to selling iphones. following strong sales, general motorss is paying out a strong dif send for the first time since february 2008. >> tapering, the world forecast ups its outlook for global growth. and later, analysts expect a big forty quarter jump in previews and revenue. we'll preview the numbers right after this.
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all right. it's a watershed moment, that's
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the message from apple's ceo tim cook. he's in beijing ahead of the release of iphone on china mobile on friday. finally, cook has said he's extremely confident about the release on the on world's bigger carrier. china mobile says it has received 1.2 million preorders for iphones since december 25th. eunice has been following the story for us in beijing and joins us for more. finally, we got the details of what's going to happen. do we know, actually, though, anything about subsidies and who is going to pay how much for what? >> we don't. we did not get the breakdown of the income breakdown. and we also didn't get any more information about the subsidies. that is going to come at the annual results in march for china mobile. but we did get finally a deal after a very long courtship. apple is going to be benefiting because you'll be able to tap into china mobile's vast network of subscribers. 760 million of them. and as for china mobile, they'll
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be able to really benefit from using better data services and try to reinvent themselves by moving from a company that's mainly been known for its voice calls and now moving into a very fast network. i want to take you straight to the interview we did with tim cook as well as xi. >> i am so honored to be doing business with china mobile and chairman xi. we're very impressed with them and have deep respect for them and have had from the very first discussion that we've had together. we see this as bringing the world's best smartphone to the very largest and now the fastest network in china. last year, we were able to work with the government authorities
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to be able to launch china at the same time that we launched every other country. and the results of doing that, although we haven't released our total results, we sold more iphone units last quarter in greater china than ever before. and so we see that momentum and the announcement with china mobile today as just being able to, you know, continue the momentum that we've really been building for the last three or four years or so in china. it is a very key market for us. >> mr. cook, i've seen ranges from between 10 million to 30 million in additional new iphones that could be sold because of this deal just this year. what estimates do you see? >> look, we play for the long-term. and i see this announcement
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today as being one of those very key milestones in doing great stuff over the long-term for our customers and our shareholders and our employees. and that is the way i look at it in -- so i'll let others predict the numbers. >> how competitive is your pricing compared to your rivals like china telecom and china union any come? >> pricing is more than or competitors, but i still believe it's very attractive. you asked a very important question for tim cook on numbers. i cannot tell you completely, of course, but since december 21st, we had millions of preorders. this is very encouraging. >> and, ross, so far online, among the chinese public, there has been some comments about the pricing. they said that a lot of people are saying that it is a little priceyer than what they would like to see. china unicom and china telecom, the rivals of china mobile
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actually dropped their prices for the iphone ahead of this announcement. >> all right. good stuff. thanks for that, eunice. and we are all terribly finally we got an announcement. >> later as earnings season continues the pace, analysts will be paying close attention to bank of america's mortgage lenders after results from both of its competitors showed the market was still suffering. now joining us, sharas mian and marty, let me begin with you. one word, litigation. that's what we care about here. we want to understand what movements they're having to make. tell us your expectations. >> well, this is going to be the highlight of the quarter in a sense that, you know, we do think there will be some charges. as we saw, jpmorgan settling a lot of their issues here recently. bank of america was doing that early on.
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it will see it year-end here. do they have to increase their reserves in anticipation of a new wave of, you know, negotiations with the government? so those one-time settlements in potential reserving for that will be kind of foreshadowing what we might see in the first part of this next year. >> can i ask you, we are looking at the mortgage lending business in particular. bank of america has said that they are going to grow this business. have they really missed the boat as far as some of the recovery here is concerned? how is this going to drive the business? >> yeah. that is an issue for bank of america. they were so tied up with all of these, these settlement issues that the other guests referred to that the big run up in the mortgage business via the bank didn't get as much benefit as
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was fathought of. overall, they have a much stronger leverage to the u.s. economy, particularly on the housing side, and overall, about 80% of the revenue comes from the domestic market. so as the outlook for the home market continues to improve, it's reasonable to expect that there could be a very strong beneficiary of that positive front. >> what kind of loan growth do you think we should get? >> if you're looking at jpmorgan versus wells fargo, it will be interesting to see what bank of america kind of lands. wells fargo was cruising close to portfolio growth around 10%. where when you look at jpmorgan, it was still in that 4% to 5% annualized pay. bank of america and its franchise across the country, it will be one of the things that
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we'll be looking at very closely is can they see some acceleration in loan growth as we saw as wells fargo yesterday. >> sorry. sheraz. >> yeah. yeah, i agree with that. i think the key question is the outlook for the year, i think they still remain in transition. the effort to squeeze out costs from their business operations is the big thing and remains the big theme in the bank of america story. and if they get some tailwind from an improving economic bankrupt, that obviously makes the whole transition process all that much easier for bank of america. >> thanks very much for joining us, saherod mian. marty, always good to see you, as well. that's about it for "worldwide exchange." we'll be back here tomorrow, jules and i. coming up for everyone else, "squawk box" and the countdown
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to markets stateside. but right now -- that's it. have a great day. >> see you, bye.
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good morning. apple's ceo tim cook calls his company's deal with china mobile a watershed moment. the details in an exclusive interview with the tech leader. in market news, the world bank says the global economy is turning at this point. hopefully up. plus, the earnings report of the morning is bank of america set to post quarterly results after we saw big turn around tuesday in the markets yesterday. it's wednesday, january 15th, 2014 and "squawk box" begins right now.
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good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. our eunice yoon sitting down with apple's ceo tim cook and the head of china mobile earlier today. she's going to join us from beijing with that exclusive conversation in just a few minutes. but first, let's take a look at the markets. we are only nine sessions into 2014. but the s&p posted its best day of the year yesterday. this comes after some pretty disappointing days. if you take a look at equity futures this morning, you're going to see at this point that the indices are indicated higher once again. the dow jones industrial average indicated up by about 26 points. s&p futures are up by 3 points and the nasdaq is up by 12 points. all of this is coming as asian markets picked up ground overnight, too. and the world bank is raising its global growth forecast. we'll talk about that a little more later. on the economic calendar here in the united states today, at 8:30 eastern time, the december producer price index, the headne


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