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tv   Worldwide Exchange  CNBC  October 1, 2014 4:00am-6:01am EDT

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good morning. welcome to "worldwide exchange." i'm wilfred frost. >> and i'm seema mody. these are your headlines from around the world. >> hong kong protests, the biggest demonstration yet weighing on stocks in asia and europe. >> mario draghi comes under fierce criticism for his bond buying program. >> the uk super market says it will review its dividend sales.
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french and russian governments lay out their 2015 budget. moscow cuts spending plans as sanctions take their toll. we're on the ground in moscow and paris. >> you're watching "worldwide exchange," bringing you business news from around the globe. >> and we just got the final reading of the eurozone september manufacturing pmi. it has come in at 50.3. the previous month for august, it was 50.7.. it was forecast for september at 50.5 but came in a at 50.3, so slightly lower than expected. you can see the euro/dollar has moved down. also, five minutes ago, we got the german reading which came in at 49.9, below expectations at 50.3 and below where it came in
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for august at 50.4. again, slightly weaker than expected eurozone data, ahead of the crucial meeting for the ecb. in only a month, we've had two very strong days of positive gains in the stoxx 600 after the last season ended a month ago, yet the stoxx 600 ended the month broadly flat. obviously, not much confidence there. >> growing concerns around a slowdown here in the european economy, and now further evidence of inflation being curbed. there's a lot of concern out there in the market and now further pressure on mario draghi to act, unveil some type of measures tomorrow in the ecb meeting. >> indeed. we're just getting some flashes, as well, saying that they expect production to rise 2% in 2015. that is coming following those pmi numbers just below
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expectations. >> earlier, thousands heckled the flag raising sayre mother by the city's media so far has refused demands to step down. pauline is in hong kong with the latest. >> wilfred, the crowd is getting huge and bigger by the hour, as you can see behind me. we're seeing the range of faces today. it's not just student protesters. we're seeing older people and families coming in, bringing in their young children as well as babies. part of this is sheer curiosity. the other part is they are supporting, many of them supporting the pro democracy demonstrators. part of the reason why we're seeing so many more people today, it is national day, a public holiday. this is a day where china celebrates the founding of the people's republic of china. and the chief executive of hong
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kong was at a flag raising ceremony earlier today. and he had a specific message for the demonstrators. he said, listen, going to the voting booth is a lot better than sitting at home and watching 1200 people make the decision for you. and what he's referring to is the 1200 people on a committee here in hong kong that vote for the chief executive. what beijing has proposted is its vergdz of universal suffrage in which each person in hong kong who is of voting age to vote for the chief executive. but they have to vote from a sluice of three to four candidates that have basically been prescreened. now, in terms of safety, it's been fairley calm and peaceful here the past few days. but one multi national company is not taking any chances. lo'oreal yesterday said it is issuing a travel ban for its employees to come to hong kong,
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at least for the next couple of days during this seven-day holiday. but the demonstrators i've talked to on the ground are said to be civil and obedient and peaceful for the long hall. >> thank you very much for that update. moving back to europe, the ecb will update plans in naples tomorrow. it could increase tensions between the ecb and germany. angela merkel needs to put a stop to mario draghi's fiscal medeling. the central bank of overstepping its mandate in the battle against deflation and says the ecb has become a bailout agency with its program said to be detailed by mario draghi at its
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meeting in naples. now the ecb is facing a lot of difficult questions. what is the likelihood of mario draghi unveiling some type of dramatic measures tomorrow at that meeting 12347. >> we know in europe and with the ecb nothing is ever really dramatic on that. >> it's about what's needed at this point. >> it is what's needed. they're overstepping their mandate and they're right to do so because that's what europe needs. we're just saying top, that was so successful in the u.s. that stood for troubled assette relief program. if they buy the highest quality assets, it's not going to help europe in any way. >> i want to touch on another quote. he said deflation is not a danger for europe, but an essential precontinue for restoring competitiveness. has he got that wrong? >> i suppose you can make that argument, but it's very, very
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simplistic in that the deflation we know is a great threat for economic recovery. while they have to regain the competitiveness, that's not achooefd through general deflation. that's just nonsense.. sorry. >> and we're going to get a comment tomorrow from mr. draghi on what is included in these abs purchases. do you think we'll get color on that topic alone and nothing more. >> well, the discussions that we've had in a pattern are -- we wouldn't be surprised if he actually does a bit of a barbell approach. so he boys the stuff that needs to be bought to get the banking system going again. but to apiece the germans, he buys some very high quality government debt, super safe, in order to keep them quiet. >> if you're an investor out there and you want to may the european market, is there a specific region or country that looks attractive to you at this point? >> i think the first one will be the german economy.
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if you want to be a bit more bullish, then that's in the periphery. >> you don't think that could impact the german economy going forward? >> it might well. but at the moment, i'm looking more positively at the sanctions in that they're giving draghi real leverage over the germans to say, look, we've got to do something. this is going to down down your economy. so this is actually -- and i think there's just too much interest on the russian side involved economic interests that those sanctions will not be a permanent institution. >> we saw that the german pmi was slightly weaker than expected. that allows the eurozone as a whole to, therefore, take up more significant easing measures. >> i think that's a relatively
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extreme position. >> broadening it up a little bit, hong kong protests continue to keep investors on edge. hong kong clearly plays an important role in the financial world. what are your thoughts on the head whippeds going forward? >> between a rock and a hard place, really. i can sympathize with the people there. but given all the other troubles that markets are focused on, i could do without it. in a way, i'm not too concerned that it will spill over into china. because that's not really what they need. it's a bit of the same scenario
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that putin had with the ukraine showing public uprisings can bring about change and that's the last thing the chinese need in this current situation. i expect them to be pretty hard on this one. >> we will leave it there. thank you for your time. now, throughout this show, we will be discussing the markets, the ecb and what to expect in the fourth quarter. e-mail us your thoughts, world would itwide@cnbc.comes. it's the national debut for zalando in one of girlny's biggest tech flotations in years. that of rocket internet has been moved forward by a week due to high demand.
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zalando's stock is currently trading at 22.20. again, the issue price was $211.50. an ipo to keep an eye on today. >> let's have a look at european markets in general. the stoxx 600 finished september basically flat. they finished q3 fractionally down and that's how stock is exporter basically flat, but fractionally down, lacking momentum. where is that weakness coming from today? there's a bit of softness in the u.s. and continued weakness in asia despite hong kong and chinese markets being closed today. as you can see, a little bit of weakness in europe. the ftse 100 is down the most, down about 0.5%. we had final reading of pmi coming in about 20 minutes time. the rest of europe, as i said, fractionally weak, but broadly flat. we have had that data out of europe. we think that made more movement on the euro/dollar. those individual stocks, sainsbury trading in the red.
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it will review its dividend policy. the group is going to cut sales forecast following a fall in second quarter trade. it's off 3.5%. tesco is off 3%. britain's watchdog has started a full investigation into the company after the growth value last month. morrison is down the most of the big food retailers and that's brought down by the other two. it's near the bottom of the stoxx 600. staying on stocks. adidas has announced shares in the stock buyback program in the fourth quarter. the company said it will repurchase up to 10% of its shares. orange down about 2.5%. the french government has trimmed its stakes in the telecom group by 1.9%. this is part of its 2015 budget. stay tuned, we'll head out to stephane, out to the french finance ministry for the latest on the french budget in a short while. let's look at bonds.
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the ten-year u.s. treasury yield staying around 2.5%. the biggest factor that moved that was friday when bill gross announced his res ig naigz. ten-year treasury, 2.49%. we continue to see a strengthening dollar, another new six-year high against the yen. 109.75. the aussie/dollar, really on a tear down 0.4% today. 0.87 against the u.s. dollar. that's almost a 7% decline in september and it continues that slide down. let's look at the euro/dollar. which has moved down again off the back of slightly weaker than expected manufacturing data in the eurozone, perhaps expecting more loosening than otherwise would have been the case. seema, what do we talk about after the break? >> the first patient to be diagnosed with ebola outside africa is being treated in a
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dallas hospital. we bring you live coverage from texas with the late oeft that case. and find out how automakers plan to revive demand as europe's car market hits the skids. what companies are on the right track? and we'll bring you an interview with u.s. president jimmy carter who tells cnbc he would have been re-elected if he would have been able to resolve the iran hostage crisis. >> i could have ran -- with the weapons that we had. but in the process, a lot of innocent people would have been killed.
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a big move in ebay yesterday. jpmorgan and jeffries cut the rating following its spin-off of paypal. it comes to six months after ebay's management maintained that the two businesses were better together in the face of calls from shareholders and activist investor carl icahn for a split. >> and we want to hear from you on this. is bigger better or are spin-offs are best way to stay
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ahead of the game? if you want to join the conversation here on "worldwide exchange," e-mail us, worldwide@cnbc.com. what do you reckon? >> you know, i think smaller is better. i think the risk that you run when you're a larger corporation is that you lose your vision and i think sometimes decisions to spin off a company to unlock shareholder value makes sense. >> absolutely. i can get that. and you lose your efficiency perhaps if the you're bigger, but the economies of scale are there for you to make the most of. we should see what other people think. join the conversation here on "worldwide exchange." moving on, the french government promised to cut its public deficit from 2015. they plan to bring the level to below the mandated 3% by 2017. stephane is outside the french finance ministry in paris with more. stephane. >> morning, wilfred. it's official now, france will need more time to reduce its public deficit. the target has been awfully
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chilly. the new target is 4.3% next year, 3.8% for 2016 and 278% for 2017. but will receive another delay, will get another delay from brussels. we're going to talk about it with the head of economic research at natixis management. do you think france will have more time? >> yes, clearly france will have more time. france is an important country in the euro area. and there is -- when we look at the french process, it's likely to expand on government expenditures. so if we decrease in public expenditures, it will be a risk for growth in france. and for the all euro area. >> do you think the main problem is the deficit, it will be close to zero in 2019, which means two years later than expected.
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>> it's necessarily long to go there. there have been strong import to reduce its deficit in previous years. but now it will do that. because whether you reduce expenditure or you increase taxes. so it's complicated. to do that now, when you look at the french economy and private demand is very weak. and so having stronger measure to reduce structural deficit could be a real drag on the economic growth and that's not what is expected. >> it's not an austerity plan. however, the government will reduce the spending cuts by 20 billion euros next year. do you think the effort could have been bigger? >> no. clearly, when you look at the process, the main driver for growth is government expenditure. so if you reduce government
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expenditure, there is a real risk on growth. the main policy is to improve the momentum of private demand and then, when this momentum will be stronger, it will be the government will be able to reduce the deficit, not before. >> natixis management, thank you very much for being with us. all eyes on the former french economic minutester is the new eu commissioner for economic affairs. so it will be the one in charge of the french deficit. will he be -- is he going to be more incident gent because he's french? that's the question. he will testify tomorrow before the european parliament. >> stefan, thank you very much. >> russia also in focus.
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the russian government has submitted a draft federal budget for 2015 to the lower house of parliament with signs western sanctions and the failing oil price are having an impact. 700 billion rubles, around 17.8 billion dollars of previous spending plans have been axed. the ruble hit a record low against the dollar yesterday following reports russia was considering imposing capital controls to stem outflows. both the central bank and finance ministry have denied those rumors. now, our very own geoff cutmore in live in moscow with the latest. geoff. >> good afternoon to you. this is a fascinating story. the plot thickens, as they say. the central bank is now talking about investigating potential market manipulation. of course, that rumor emerged yesterday suggesting that authorities were looking at some form of capital controls for this economy. we know there has been an outflow of sdi.
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the economy ministry itself talked in terms of in excess of $100 billion. this is not good for liquidity in this economy and credit availability. but would they go to the decree of introducing restrictions coming out at the moment. the central bank and the finance ministry are saying no, that is not the case. but as i say, the central bank is talking about looking into whether there's been market manipulation here to drive down the level of the ruble. i had the opportunity while i've been here to talk to andre coffman. the ceo and chairman of the bbc bank, one of the major banks here suffering a consequence of the sanctions regime. i asked him whether he thought it was necessary right now for the government to put those capital controls in place. let's hear what he said. >> it is in order. so i think we don't expect now that this kind of mechanism are
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needed. but never say never. but not at this stage. >> so very interesting. while he said no, not at the moment, it doesn't seem necessary, he didn't rule out the prospect is that the government may think about it or introduce them at some point in the future. and just coming back to the budget issue, there are two areas where we've seen a rise in spending. one is around defense, considering what is going on with the ukraine and the other area is in some social program. mr. putin continues to enjoy popularity here among the grassroots and listing the spending on social projects will only help secure that at a time where the russian economy is unlikely to grow this year. back to you. >> thank you very much for that.
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still to come on the show, uk supermarkets may need some retail therapy today. coming up, we find out why investors are checking out the biggest growth. stay tuned on "worldwide exchange."
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welcome back. the euro takes the leg lower after the latest pmi data shows german manufacturing sector has contracted for the first time in 15 months. >> hong kong protesters defy chinese national day celebrations warning of the biggest celebration yet, the unrest weighing on stocks in asia as well as europe. >> mario draghi comes under fierce criticism for his bond buying program amid reports the ecb is planning to buy greek and cipriot loans. >> a soouk super market says it will review its dividend policy due to falling sales. >> i'm going to recap the european data we had in the last
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half hour. german pmi came in at 49.9, below forecasts of 50.3 and below last month's august reading at 511.4. that is contraction in 15 months as we just told you. eurozone september manufacturing pmi watt at 50.3. as ugz, the euro has moved down about 30 basis points off the back of that news. we are waiting for the british pmi data, which we should have any minute now. but we'll move on to markets for now. >> let's take a look at the european markets and see how they're fairing. keep an eye on the political unrest in hong kong. that weighing on investor sentiment. also that data we got out on manufacturing data. you can see the ftse 100, the big underperformer today, a lot of that has had has to do with earnings coming from the retail space, specifically spans bury. trading down 0.3% on the ftse 100. the xetra dax still holding on
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to a fractional gain. cac 40 down 0.113%. italian markets flat at the moment. >> and if we look at bond markets, the biggest mover so far today has been the greek ten-year yield. it's moved about 40 basis points. it had been at around 6.75% yield. it's now 6.3% yield. bond prices in greece going up off the back of those announcements the ecb might well buy cypriot and greek bonds. the ten-year treasury around 2.5%. we have now got the uk manufacturing pmi data. it's hit a 17-month low in september. the number at come in at 51.6. it was forecast at 52.6. in august it would have been 352.4. so 51.6, a significant amount below expectations. we're looking at the sterling/dollar pair there. it's moved sharply lower off the back of that. so manufacturing pmis across all
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of europe has come in weaker than expected today seeing their currencies move down against the dollar. moving on, uk prime minister david cameron is putting the final touches to his key note speech which will close the conservative party agreement. foreign policy was addressed yesterday. the london mayor delivered the biggest crowd pleaser calling to an end to oligarch buying homes in london. >> but thank to the wisdom of a clear majority of stocks, it is the capital of britain and the capital of the united kingdom and will remain so and will, i believe, remain so for our lifetime. you have commission -- to.
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and when the -- >> earlier, our uk business editor helia caught up with william hague, leader of the uk house of commons and asked him if he thought the general election would be a close contest. >> it will be a close-fought battle, no doubt about that. a hard-fought general election, there is a danger of a labor government that will lurch back to all the deficit and the debts and the overspending that they did before because they show no sign of change. so we have to make sure we win that election. the great thing this week is we have set out such strong confident plans for the future to have three million abrentissh abrentisships, to help people to get their homes and so many good plans for the future. now we have to communicate that. >> that was krn's uk business editor speaking with william hague, leader of the house of
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commons. the prime minister's speech is set to take place today at 11:30 cet today. make sure to tune in for that. now i want to switch our focus to the auto sector. the big automakers support september sales today. analysts expect another month of continued growth with double digit gains seen for chrysler, gm and nissan. they'll be watching the level of incentives automakers had to employ to get consumers to buy. the monthly sales number comes on the same day that gm's ceo mary barra is set to unveil her long-term if not financial strategy for the company. and the 2014 paris motor show kicks off amid ongoing uncertainty for europe's carmakers. the weakest showing since november. to make matters worse, the top two markets, france and germany, just entered reverse in august, post ago drop in sales of 276% and 0.4% respectively. >> let's bring in the had he had
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of auto motive research group. auto industry, obviously, seeing a lot of weakness. that data we just highlighted, concerning for investors out there. how much of this is due to the slowdown we're seeing in the european economy? >> he we've seen european pmis heading down for quite a while now. that is obviously a concern. we're seeing a slow recovery for european cars below the levels where we used to be. capacity utilization is very, very low. nevertheless, we see a stabilization of prices. we think b replacement demand is still driving a recovery, but debt recovery is slow. >> and for those big automakers in france and germany, what's the offset between a weaker market at home and a weaker currency that comes with him inspect. >> you've got to be global these days. you've got to be selling car necessary china, in the u.s. and, of course, that's not just true for the auto industry, but that's benefiting german exporters relative to the french or italian, you know, oems which
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are more european sent rick. i think we will learn that in paris this week again and during q3 reporting. >> there's a lot of wealthy individuals who live here in london and in germany, as well. how much is that market driving the high end car market? >> well within these are the only price spots, really. germany is a very corporate market. 80% of the premium cars are being sold to corporate customers benefiting from germany. london is a completely isolated market. but even price competitiveness in london is very high. so it's really all about the global reach of strong brands. >> is that why you have a strong buy on that market? >> it's supporting some of the highest returns, coming at eight times earnings, roughly. so you get a quality in the sector at a relatively low
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multip multiple. >> the uk profit warnings this week, is that based on the u.s. market or the international market? >> it's a combination of things. we've warned on latin america, they've warned on russia. they said the european economy is slow so they took down their margin. in the u.s., they might be at the lower end of the 8% marmgin range, which is disappointing the the market, but an 8% margin is pretty good. >> does that bode badly for the stock longer term? >> that's a very good question. the focus has been on the u.s. market, are we reaching peak levels in terms of sales, in terms of pricing momentum and as
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you say, market momentum. i really think profitability in the u.s. can't go any higher than here. >> weakness in china has been a big concern for a lot of the luxury players out there. how has that impacted the auto market if at all? >> china continues to be a success story. i'm a deep believer the demand for western brands in general will continue to drive the market up, will continue to be a success story. the next big theme will be financing, which is increasingly available to chinese customeres and that is listing more and more people on the mobility or the upper brand letter. >> what car do you drive? >> i drive an audi. >> and one final question on gm, the negativity around if ignition recall, is the worst behind them? >> it's hard to say. europe is not out of the woods, gm is strong in china.
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the product momentum is now getting stronger relative to gm. i think it's not clear where americans can drive earnings from here. it will be great to learn whether they get margins in the u.s. back to 8% or 10% been but i think it's probably too early. >> thank you so much for joining us. now, we'll be speaking live in paris tomorrow with first on cnbc interviews. the morning kicks off with the ceo of rolls-royce followed by the ceo of ford mark fields on "squawk box" europe. we'll hear from the ceos of land rover, volvo and opel. we'll speak to the ceo of daimler at 1:10 cet tomorrow. the centers for disease
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control has confirmed the first case of ebola in the united states. the patient left liberia on september 19th and began feeling ill a few days later. the cdc stressed the situation is under control. listen in. >> the bottom line here is that i have to doubt that we will control this case of ebola so it does not spread widely in this country. it is certainly possible that someone who had contact with this individual, a family member or other individual, could develop ebola in the coming weeks, but there is no doubt in my mind that we will stop it here. >> nbc's jay gray joins us live from texas. jay. >> good to talk to you. that patient is still in violation here at texas presbyterian hospital in dallas.
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health officials won't tell us his current condition, but they are certain they can stop the spread of this deadly virus, diagnosed for the first time here in america. what we do know is this patient traveled from africa to visit family members in dallas and initially wasn't presenting any symptoms. didn't have any problems on the plane. in fact, all of the passengers that fly from africa anywhere are tested at the hospital. anyone with a fever is pulled immediately from the plane until they can be sure that that passenger doesn't have ebola. what is going on here is the treatment will continue and it will continue for quite some time. a crew, a team of medics from the cdc has been rushed here to texas not only to help but to seek out and monitor anyone who may have come into contact with this patient, mostly family members here that they are
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concerned about. they'll watch them over the next 20 to 25 days. that's the incubation period for this virus. that is the latest in dallas. i'm jay gray. seema, back to you. >> thank you very much. the biggest mover, techmiri pharmaceuticals, up 21%. tekmira was allowed to use its experimental drug. checking shares in europe, all are trading higher on the day. us airways seems to be moved lower after hours, including delta air lines. america, united, southwest and jet blue. and we want to get your thoughts on what's happening
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around the world. not just of course in africa and the u.s. what are you expecting from mario draghi? e-mail us your thoughts or tweet us, world would it@cnbc.com. happy birthday mr. president. coming up is the 39th president of the united states turns 90, cnbc's tonya brian meets jimmy carter. plus, you get some special birthday messages. >> we all do think of him and his legacy as one of such compassion and humanity and to continue to give all the great work that he does and to wish him a very happy birthday. >> an extremely happy birthday. >> i wish him every future of happiness and a great birthday.
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japan is joining the ipo party. the government selected nomura and jpmorgan to underwrite the post. we have the story live from tokyo. >> yes. a group what used to be a government entity holds around
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$120 billion in capital and the privatization began nearly ten years ago, which is now entering its final stages. all of the firm shares are currently held by the government and concerns are set to be offered in autumn next year. the size of the offering is said to be around $40 million or more. the turkey firms will several the listing. investors around the world meet the revenue to pay for reconstruction efforts in disaster-hit areas. the group is trying to clear the way by listing stemming from its days at the postal ministry. it's planning to pour nearly $6 million into its mail delivery unit with rivals in the private sector. but market watchers say that it needs to show investors a clear growth strategy and convince them that it can operate free of government involved. that's all from the nikkei. back to you. >> thank you very much. shares of zolando have
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listed at $21 a share, currently trading at $22.80. really interesting to see that while the european economy may be slowing down, the ipo market is heating up. >> absolutely. particularly in the tech space. only founded in 2008. it's taken six years and mafs valuation rocket internet which is one of its investors due to ipo into course. this space continues to be very hot. >> and i wonder how much of this has to do with the excitement behind alibaba driving the e-commerce and internet players to the market. >> absolutely. >> now let's talk about retail. sainsbury sales are in the red after the retailer said it will review its dividend policy. the group cut sales forecast following a fall in second quarter trade. john rogers said u.s. grocers were now operating in a very
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tough environment. >> it is facing different challenges today than it faced ten years ago. ten years wag around a third about strategy. today we're facing a much more structural challenge. but we are confident in the business, we are doing all the right things. we will be announcing moves in november. that's how we're going to move forward so we can continue to win in what remain aes very, very tough market. >> grit britain's financial advisers are following the accounting scandal that runs from around 3 billion pounds. the super market said it would cooperate fully by the probe for the financial conduct authority. tesco announced the overstated profit on september 22nd. natalie berg is joining us now. let's start with the sainsbury results. all the big players over the last three or four years, they've done quite well. is that positively behind us? >> sainsbury has been the
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darling of the super market sector for a long time. but i think they are no longer insulated from the discount threat, from the structural changes that we're seeing in the markets. these results in terms of like-for-like sales were better than expected. i think what was a concern for me is sales are expected to be in decline for the second half of the year whereas before they were expecting them to be flat. >> and we mentioned tesco shares. tech has had a much, much worse years than sainsbury and yet both of them have sold off significantly over the last 12 months and year-to-date. >> they no longer stand for quality or value. when you look at tesco, their whole proposition, the reason why they became the largest retailer in the uk is because they've been all things to all people. but now there's so many choice on high street. you have discounters, various
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onlines with the shopping onlines. you can click and collect. >> when you look at tesco, market shares declining, they've issued multiple profit warnings. now news of this accounting error. it's hard to be billish as investors stay on the sidelines, take a look at what will happen going forward. do you think that the company can stage a turn around? if so, it would be the best comeback story ever. >> absolutely. and i think they have their work cut out for them. comparing tesco to sainsbury, structurally, they're in a worse position. so over half the stores, excludeing the convenience stores, are in space that's over 50,000 square feet. these are large out of town stores that people just aren't visiting. so we heard mike from sainsbury saying there is a trend towards the little and all thin and people are visiting the discounters. >> little is one of them,ly
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little and often in that sense, as well. but these guys, you know, audi's 4 haddel 8 market share, still relatively small. how are they having such a big impact on the major layers? >> i think what wove seen is sort of this perfect storm. on the one hand, we've had a complete change in consumer mind-set. it's now a badge of honor to go to an ial did i or a little and save on your groceries. and i think the habits that we learned during the recession are now very much entrenched and people are recognizing that it's not just about low prices, it's about convenience and the quality is pretty good, as well. >> let's talk about online food retail, as well. is it something that the major food markets absolutely hate but they have to offer? >> to a certain degree, yes. it's very difficult, you know, a lot of retailers are still trying to figure out the economics of online. there's been a lot of innovation around click and collect. tesco and have been pioneers in
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allowing groceries to collect them from online. they're trialing some schools and libraries. so i think the idea is that the consumer has a lot of decision toes make and retailers need to offer choices in a seamless way that allows shoppers to access their brands. >> natalie, thank you very much for joining us. and a reminder of our viewer exchange topic today, following ebay's announcement that it's splitting up, we want to hear from you. what is the best way to go for corporate? is bigger better or is spin-off the way to go? worldwide@cnbc.com or via twitter @cnbcwex. i wonder if that will help the major uk foot food retailers. >> perhaps. that's an idea there. >> jimmy carter, the 39th president of the united states is today celebrating his 90th birthday. in a special cnbc meets tone ya
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meets him. carter served just one term in the top elected office in the state but continues to travel the world in his work for the carter center. the former president spoke to tone ya about his childhood in segregated america, modern slavery and his legacy. however he began by speaking about the most famous event of his presidency, the iran hostage crisis. >> i think i would have been re-elected easily if i would have been able to rescue hostages from the iranians. everybody asks me, what would you do? i would have sent one more helicopter because if i had one more helicopter, we could have brought the hostages and the rescue team. when that failed, i think that was a main factor that brought about my failure to be re-elected. so that's one thing i would change. >> i would say do something, anything. and he said them have them take a host aemg out one at a time one day and execute them in front of the world? you know, he was firm, but it
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was tough. we knew he would probably not be re-elected. he didn't give in. i was proud of him, but peace is very difficult. war is -- in our country. >> even your wife, rosalynn was encouraging you to take action. was it hard to not take everyone's advice around you, even your wife? >> yes. well, i could have been re-elected if i had taken military action against the iranians, it would have shown i was strong and resolute and manly and so forth. i think if i -- ikd have wiped iran off the map with the weapons that we had. but in the process, a lot of innocent people would have been killed, probably including the hostages. so i stood up against all that advice and then eventually my prayers were answered and every hostage came home safe and free. and so i think i made the right decision in retrospect, but it was not easy at the time. >> you left office as you have
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said involuntarily. if you had been re-elected, what would you like to have accomplished? >> i don't have any doubt that if i had had another term in office i could have implemented firmly the peace agreement that i negotiated with israel and its neighbors. that was never fully implemented. so now, 35 or 40 years later, we still have israel not at peace with its neighbors. but my successors were not very interested in the mid east peace process, not as deeply as i was, and that's one of the things that i could have done differently. >> in 1982, you set up the carter center. what did you hope to set out to achieve with it? >> well, my first hope was to have like a small camp david here so i could negotiate peace agreements between countries that were at war or likely to go into armed conflict. and we still do that, as a matter of fact, but we also had a basic premise of not duplicating what other people
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do. so this leaves us in a chance just to fill back -- in the world. >> the work of the carter center is spearheaded by the president and rosalynn carter who were at the heart of every project that is undertaken. millions of lives have been improved in over 80 countries thanks to their work. >> for more on tone ya's interview with former president jimmy carter, tune into cnbc meets tonight at 23 cet. and it's the first day of the fourth quarter. let's take a look at how markets are fairing in premarket trade. the s&p 500 indicating a slightly higher open. dow jones up 13. nasdaq back in the green, up almost 1 point in premarket trade. coming in after the dow, the nasdaq and the s&p 500 sported gains in the third quarter. european markets are in the red so far today. broadly flat across the whole region. the ftse 100 is down about
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0.26%. the other major indices, roughly flat. that's on weak trade in asia. but we've had that weaker than expected pmi data across a number of eurozone countries today. let's look at the currency markets. the euro/dollar has moved significantly off the back of the weaker than expected eurozone pmi. also, we can expect the german pmi is down about a quarter of a percent today ahead of the ecb tomorrow. >> hong kong protests, keeping investors on edge. we will head live next to hong kong to get you the latest. that's coming up on "worldwide exchange."
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welcome to "worldwide exchange." i'm seema mody. >> and i'm wilfred frost. >> hong kong protesters on chinese national day of celebration is the biggest protest yet. europe's growth engine runs out of fuel. the euro takes a leg lower after the latest pmi data shows germany's manufacturing sector has contracted for the first time in 15 months. >> illegal physical metaling, mario draghi comes under fierce
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criticism of his bond buying program. health officials confirm the first case of ebola diagnosed in the u.s. the patient now being treated in dallas. shares of biotech companies working on drugs to treat the deadly virus spike on the news. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. >> and as we just said there, the first case of ee bowl what has been confirmed in the u.s. we understand that it is under control. let's go out to the individual off the back of that biotech and pharma companies doing quite well as the drugs that they have been developing likely to take a boost as this becomes more significant. >> clearly, there's a need for a treatment for a faster and more effective treatment. that, of course, in focus with a lot of those firms who are working on ebola. in general, a very scare story for the united states confirming that case.
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exactly. we'll bring you more on that story as and when we get it. moving on, the first day of trade in the united states for the fourth quarter. what are we expecting, seema? >> interestingly enough, s&p capital iq says on average, the q4, fourth quarter, is generally positive for the markets, averaging a gain of around 3.8%. right now, in q4, you can see arrows pointing to the upside. the s&p 500 implied open about 1 point. dow jones up 19. nasdaq up around 2 points. nasdaq gaining around 2% in the third quarter. it was the small cap index that lost ground losing about 7%. for the cnbc global 300, a good gauge of stocks around the world. basically looking flat at the moment. coming down off its highs about five points on the day. diving into the specific european markets, ahead of that ecb meeting, a lot of focus on
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what mario draghi will do. the euro has been weakening about 2.5%. that's the lowest in two years. we have been seeing notable movements in the german market. this in reaction to the contraction and manufacturing activity in germany. does this give mario draghi one more reason to unveil some type of dramatic measure tomorrow at the ecb meeting? france in focus, as well, after unveiling its 2015 budget. hollande says expect painful reforms. the market responding negatively to that. down just about five points on the day. italy in focus up about 14 points after unveiling its manufacturing data. but the big underperformer has been the ftse 100 down about 15 points. wilfred. >> absolutely. let's have a look at the bond markets. the u.s. ten-year is around about 2.5%. it hasn't had as much movement since friday after the resignation of bill gross. but the most interesting of the european bonds today is a ten-year greek yield which has fallen by as much as 40 basis points. bond prices rising in greece
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significantly off that expectation that there might be junk buying by the ecb of greek and cipriot bonds. we'll get more color on that tomorrow. the forex rate, currently trading at 1.602. it's down 23 basis points. it was down close to 0.5% in earlier trade. particularly out of germany, which is the first contraction in 15 months. maybe we'll get some more easing measures from the ecb yesterday. the u.s. dollar, another six-year high against the yen. and the aussie/dollar moved almost 7% down in september. it is down another 33 basis points today, a very severe slide in that so far. seema, back to you. >> hong kong is bracing for its largest demonstrations yet as pro democracy protesters vow to disrupt chinese national day celebrations. earlier, thousands heckled a
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flag raising ceremony by the city's leaders who have refused demands to step down. susan lee is now live for us in hong kong with the latest. >> hi there, seema. we're looking at another day of protests here in hong kong. given that today is october 1st, national day, there's a lot of symbolism at play. talking to the protest leaders, they are expecting a peak amount of protesters to come into the streets today in long coming. it's a bit of a family day today, given that it is a holiday. there are no businesses open for shop for business and tomorrow, tomorrow is also a holiday, as well. we're looking at a lot of families bringing in their children, coming into the crowds. given what i saw the last few days, it seems like a build up of more and more people hitting the streets. protesters saying we could see as much as 250,000 here tonight at the main protest center which is within the central business district and just outside government house. but i should report that
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protests yesterday and the night before have been quite peaceful. yesterday basically this road, this main artery that goes into the heart of the central business district in hong kong stretches for miles and miles of people. with the lightning and the thunderstorms last night, we're expecting the same scene tonight as we build into the peak of people heading into this main protest. speaking to some of the protesters out here, they want to show hong kong is a civilized nation and a civilized territory. they're saying they're looking for something calm and peaceful and hopefully we will see that later on tonight. we'll send it back to you in london. >> thank you for that, susan. >> and still very peaceful, as susan was saying, despite significant numbers. we'll bring you more on that story as and when we have it. the ecb will outline its
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plan in naples tomorrow. the central bank will begin buying greek and cipriot bonds. at the spite the peripheral abs will make up a small portion of the purchases, but it could increase tensions betwewith ang merkel. detailed by mario draghi at tomorrow's meeting in naples. we're now joined by brian reynolds, chief market strategist at rosenblack securities. brian, this debate continues to rage in europe as to whether mario draghi should do more to stave off deflation. are central banks overreacting to the threat of deflation or
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would it spell disaster for the eurozone? >> i don't think you're overreacting to the threat of deflation. we have a debt overhang. we didn't crush the debt in the last downturn. we simply shifted it from the private sector to the public sector. when you have a debt overhang, that's deflationary. and the easing central bank policies have merely offset that. although the way they're about to go do it, i jokingly called it state sponsored finance or state sponsored shadow banking. >> the euro continues to weaken against the dollar, currently hit ago two-year low at 1.25. after we got that manufacturing data out yesterday as well as reports on eurozone continues to decline. how big of a concern is that movement in the euro inspect. >> well, the funny thing is is that the ecb is about to ease more. just as the federal reserve and the u.s. is about to stop quantitative easing and the fed thinks they're going to start tightening next year. so based on that reporting path, you would expect the dollar to
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appreciate dramatically. and that has helped inflation expectations in the u.s. collapse. so far if you look at the fed i've five-year forward inflation expectations, they are now at the third lowest level in four years. and so with inflation expectations plunging among market participants, i don't see how the fed can tighten. and eventually, i think the fed is going to have to wake up and realize they're not going to raise rates the way they think they will. that will help reverse that currency situation we're seeing now. >> brian, we saw in september a strong month again for corporate bond pure chases in the u.s. is that a sign that quantitative easing has worked in that market? it's reached the companies that need it whereas in europe, we still see anemic loan growth towards the small and medium sized companies that need looser liquidity?
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>> quantitative easing hasn't done much. our markets have been driven by our pensions need to make 7.5%. they've been pour money into the markets for five years. the credit boom in the u.s. has survived the end of qe1. it's survived the end of qe2 and it will survive qe3. credit investors brought almost 200 billion of new corporates in september. however, the month kind of ended badly because we broke the 1985 level on the s&p to the downside. we broke above the 62 level on the ig credit derivative. that spooked investors. we're in kind of july mode where we had a panicky sell-off and the credit market shut down for a few weeks. i think we've got a correction ahead of us in the stock market. but i think as people realize the higher yield that appear in the junk market over the last year or so, over the last month on so, become more appealing to those pensions. i think we'll start to see the
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credit boom rev up and that will eventually take stocks higher. >> the first day of the fourth quarter after the dow, s&p 500 and the nasdaq logged gains for the third quarter, do you think stocks can continue to run higher? there are a lot of head winds, specifically on the global front that could wane on investor confidence, including the protests in hong kong, tensions in syria and iraq. >> there ever been macro worries throughout this entire five-year bull market. every once in a while, they spark a brief channel but scary pullback. i think they began one of those last week. and i think that probably runs a few more weeks. but eventually, the credit flows will start to pick up again as the pensions start to put money to work. in september alone, more than 30 major pension funds voted to put more money into credit. that money hasn't even hit the credit market yet. that put cash on corporate balance sheets and they use it to buy their stock back and they use it for mergers and acquisitions. so i think that will be the
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dominant story of the fourth quarter once we get past this temporary brief pullback that we started to experience last week. >> that will be the question if stocks can continue to outperform despite the prospect of rising rates. brian reynolds, chief market strategist at rosenblack security, thank you for your time. jpmorgan, jeffrey ves cut their rating on ebay stocks following the announcement to spin off its paypal arm. it comes just months after the two teams claimed the two were better together. we want to hear from you on this. what is the best way for corporates to go? is bigger better or is spin-offs the better way to play the game? adam tweeted us to say smart move to compete with companies like amazon. if you want to join the conversation here on "worldwide exchange," get in touch with us
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by e-mail, world would it az cnbc.com or via twitter @cnbc x @cnbcwex. wilfred, it's your favorite time of the day, the time when we look at the rundown of what to watch this trading day. the september adp employment report is out at 8:30 eastern time. and at 10:00 a.m., we get the september ism manufacturing index and august construction spending, this coming in ahead of that all important jobs report on friday. still to come, the cdc confirms the first case of ebola in the u.s. we head live to texas for all the details after the break.
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welcome back. protests in hong kong spread to new areas of the city. germany's key manufacturing sector contractor for the first time in 15 months sending the euro lower. and the u.s. reports its first case of ebola sending biotech shares higher after hours. the center for sdedisease
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control has reported a patient who arrive from africa four days after landing walls admitted into a hospital on sunday. the u.s. is well equipped to stop the spread of the disease that killed thousands in west africa. >> i have no doubt that we will control this importation or this case of ebola so it does not spread widely in this country. it is sernl possible that someone who had contact with this individual, a family member or other individual, could develop ebola in the coming weeks. but there is no doubt in my mind that we will stop it here. >> a scary situation, to say the least. we're now joined by nbc's jay gray who is in texas to give us the latest. jay. >> hey there, seema. doctors won't release the patient's name or tell us his
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current condition. as you just heard, they will say they're very confident they can stop the spread of this deadly virus diagnosed here for the fist time on u.s. soil. we know the patient traveled from here to texas, did not present symptoms on the plane, was checked for fever before he boarded, was allowed to fly over, had no symptoms on the plane and, therefore, health officials are not very concerned about those that may have been passengers on that flight with him. what they are concerned about is his family members. and people he's been in contact with once he began exhibiting those symptoms here four to five days after he landed in dallas. the cdc rush team is on the ground now. they will help in the treatment but also to identify and monitor those that may have come in contact with this patient. doctors here will not discuss their treatment protocol at all, not even talking about any experimental treatments that may be used during the patient's stay here. that is the latest live here in
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dallas. i'm jay gray. seema, back to you. >> thank you, jay dwb for the layest. shares of several biotech companies working on ebola spiked in after hours on tuesday. the biggest, tekmara pharmaceutical up. checking their shares in europe, let's have a look at how they're doing. several usair lines have been moving lower on the announcement, including delta, jet blue, united, southwest. united is the most significantly down, almost 3%. >> the u.s. secret service under fire for a security breach at
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the white house may be suffering another embarrassment. reports say prosecute president obama was in an elevatorers with an armed security contractor who had three armed convictions last month. agents questions the man after he refused to stop recording the president with his phone. agents didn't discover the man was armed until a supervisor fired him and he turned over his gun. the store continues to get scary. >> particularly from a brit's point of view. we look at it and think the president's security team should be the fiercest and tightest in the world. that doesn't paint a picture of this at all. >> absolutely. hedge fund manager bill ackman was -- herbalife stock. ackman was going to make a
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presentation on herbalife. he then told a friend to make $47,000 by buying put options in herbalife. >> and the 39th president of the united states meets tonya. plus she gets some special messages. >> we all do think of him and his legacy as one of such compassion and humanity and to continue to give all the great work that he does and to wish him a very happy birthday. >> give him the biggest hug ever, an extremely happy birthday. >> i wish him every future happiness and a great birthday. ♪
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[ beeping ] ♪ jimmy carter, 39th president of the united states, celebrates his 90th birthday. he sat down for a wide ranging and personal interview. he spoke out about failing to implement a lasting peace in the middle east. >> i don't have any doubt that if i had had another term in office, i could have implemented very firmly the peace agreement that i negotiated with israel and its neighbors.
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that was never fully complemented. now, 35 or 40 years later, we still have israel not as peace with its neighbors. but my successors were not very interested in the mid east peace process. >> president carter spoke about about what he would like his legacy to be. >> i'd like to be remembered as a champion of peace and human rights. >> and tone ya jones us now from new york with more. >> good morning, wilfred. how are you? >> we're very well. we're sorry you're not here in the studio with us. >> i'm missing you, too, but the big apple was calling. >> i can understand that. tell us what else we're going to hear from president carter in the interview later. >> you know what, wilfred? it is an extraordinary interview. i sat down with him. he's 90 years old today. the 39th president of the united
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states. and he is so sharp as they come. and you know what? he has more energy than probably all of us put together. in an extraordinary interview, he told me what it was like growing up in a tiny farm outside plains georgia in the segregated south, how he went off to the navy for the world, how he got into politics, and famously defeated gerald ford to become the 39th president of the united states. now, of course, his presidency you had international crises, domestic recession, but the biggest challenge that we'll all a remember during the carter years was, of course, the iran hostage crisis. that is what cost him his presidency. there's no doubt in his mind. he left involuntarily. he didn't want to bomb iran. he said, well, i could have wiped iran off the map with the
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weapons that i had, but i did not want to do that. he said i could have been manly, i could have -- war is popular. he said he knew he did not want to risk any of their lives. it was an detroit moment within the interview with a really extraordinary man. >> for more on tone ya's interview, tune in to cnbc meets tonight at 23 cet. still to come on this show, we head back out to hong kong to find out how much protests are hurting tourism in what is normally one of the busiest weeks of the year. dow up about 10 points on its first day of the fourth quarter. that's premarket trade.
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good morning and welcome to "worldwide exchange." i'm seema mody. >> and i'm wid fred frost. these are your headlines from around the world. >> health officials confirm the first case of ebola diagnosed in the u.s. a patient now being treated in dallas. shares of biotech companies working on drugs to treat the deadly virus despite the news. hong kong protesters define chinese national day of celebration warning of the biggest day of dem administrations yet.
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>> the latest data shows pmi sector has contracted for the first time in 15 months. >> mario draghi comes under fierce criticism amid reports the ecb is planning to buy greek and sipriot strength. sfla you're watching "worldwide exchange," bringing you business news from around the globe. >> if you're just tuning in, thanks so much for joining us here on "worldwide exchange." here is a look at how markets are fairing ahead of the open. markets veering to the downside in what was looking like a higher open for u.s. stocks. s&p, dow and the nasdaq trading lower in premarket. this, of course, coming lower after what was a stellar third quarter for u.s. stocks with a dow transport index posted its
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fifth consecutive quarterly gains. the nasdaq, the big winner gaining seven quarters of gains up about 49%. the s&p 500 logging seven quarters of gains. so it's been a couple of strong quarters for the u.s. stocks. the question is can this market continue to move higher of course in the face of rising rates? what he will say, what he will unveil tomorrow. taking a look at where we're seeing the action today, you'll see the xetra dax up about 1 points. this despite that news that we got on manufacturing data out of germany. now a look at the euro/dollar. the euro continues to decline
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across the manufacturing zone. >> and this national holiday in china, but protesters, hong kong towards visiting the city in what is normally one of the year's busiest weeks. industry officials are warning the impact on local business, including travel, restaurants and retail will be big. sue seen is in hong kong with the latest. >> yeah, that's right. this is a the crowds and protesters are behind me on the streets. holidays, a lot of the shopping has been deterred. a lot of their balance sheets and profit margins.
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they mark this event with a flag raising ceremony. you saw a lot more police on the streets, you saw a lot more road closures. this is building into the event tonight. this is originally supposed to be the start of the first -- what's supposed to be the start of occupy central. that coincides with the protests, the sit-in. this is one of the main arteries of congress congress that is right outside of government houses and the central business district. speaking to protest leaders last night, they're expecting 250,000 to hit the streets tonight. and you can see that, given that if you look at the build up that we've seen in the last few days, at this time of the day, there are more and more people on the
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streets than there has been for the last few days, as well. we are expecting the crescendo here in hong kong tonight. >> and given that this is a day of celebration and, of course, as you mentioned, the flag raising ceremony has been shunned by many hong kongers, how angry is beijing going to be that that celebration has been spoiled? >> quite angry. i had one of the chief executives and chinese officials along with his cabinet. he said he was disgusted at this view, given that we have people, you know, tear gas, late into the wee hours on monday, pepper spray, the charges and they were talking about rubber bullets. so in his view, having the protesters he says it is still hot here in hong kong facing the
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lightning and the strorms last night. you know, to him, it doesn't seem like it should be a cause for celebration in hong kong. >> susan, thank you very much for that update. the russian government has submitted a draft budget for 2015. 2 falling oil prices are having an impact. 700 billion rubles or around $708 billion of previous spending plans have been cashed. the ruble hit a record low yesterday following reports russia was considering imposing capital controls to stem outflows. both the central bank and finance ministry have denied those rumors. geoff cutmore is live in moscow with the latest. geoff. >> yeah, we can take that story on a little further here. because the central bank has now said that they are investigating potential market manipulation
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around those rumors of capital controls. as a you pointed out, they have denied that they are being considered at this stage. but it is worth asking the question, because we have seen extensive outflee from raush ya. talking about for the year in excess of $10 billion. this sfot good news for liquidity in this economy. it is not good news for the russian economy. which at this point looks as though it may want grow at all. but just back to that capital control story, i had the chance to talk to the chairman and ce on of o of the ecb bank and i asked him whether he thought those capital controls would come. let's listen to what he said.
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never say never, but not at this stage. >> just as a post script on the budget story, yes, the budget for 2015 going ahead of the doom of the russian parliament here. a couple of areas where there is some spending growth in spite of those cuts, it is an you a steer budget. but we do expect to see increases for both defense and for social spending. focused on the grassroots here in russia, mr. putin in spite of the sanction and the pressure on the russian government at the moment still seems to be quite popular with the common people here. and, of course, if you increase social spending while you're making cuts elsewhere, that's another reason to increase or at least hold on to support. wilfred, let met send it back to you in london. >> yes, thank you very much for that. now with concerns the budget
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will see 700 billion rubles, are the krem lip's economic forecasts too optimistic? log on to cnbc.com to find out if putin is right to be so hopeful over the economy. and let's take a look at today's other top stories. the ecb, of course, a front and center move could be expected tomorrow by mario draghi. the financial times close to the ecb says the slices of peripheral will make up a small portion of the purchases. but it could increase tensions between the ecb and germany. >> and angela merkel needs to put a stop to mario draghi's fiscal meddling. writing in an op-ed in the financial times, accused the central bank of overstepping its mandate in the battle against deflation. says the ecb has become a
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bailout agency with it program set to be detailed by margo draghi in tomorrow's meeting at naples. the german opinion very different from a peripheral country as to whether this is the ecb role to bail out other economies. some german economists are getting very angry at draghi. >> and germany at some point needs to give in and say mario draghi and the ecb knows what is best for the eurozone. clearly growth and inflation is a concern and they need to put together a plan to revive europe's growth. >> absolutely. but even though the german economy its is struggling, even on expectations that there might be purchasing of greek bonds, any measures are going to benefit the periphery countries far more than they'll benefit germany. >> expectations are definitely high. the rain shower row is trading at 1.26. we'll have to see what mario
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draghi says tomorrow. it's not just investors who care. europe matters. a lot of these multi nationals that do business in europe. a lot is riding on what the ecb can do to are vooif growth. euro/dollar currently at 1.2603. now, the cdc confirms the first case of ebola in the u.s. we'll take a closer look after the break. xkç
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he auto bay shares topping the s&p 500 and the nasdaq in yesterday's trade after announcing plans to spin off paypal, its payment business which makes up nearly half of its market value. ebay gaining over 7%. its biggest interday gain in nearly two years. it looks to fend off competition from amazon and other players. interesting to see that jeffries, though, downgraded ebay trialing valuation and increased uncertainty as a reason to downgrade the stock. >> indeed. and i wonder whether this decision was spurred by apple announcing their own online pay platform. we want to hear from you on this topic. what is the best way for corporates to go, bigger better or are spin-offs the best way to
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stay ahead of the game? josh madden has tweeted in to say i think it's good for paypal. blue horse show says bigger is always better and greed is good. that's an interesting point of view from blue horse. keep your comments coming into us by e-mail, worldwide@cnbc.com or twitter @cnbcwex. the u.s. centers for disease control has diagnosed its first case of ebola on american soil. kate snow filed this report from atlanta. >> at a late afternoon news conference, the centers for disease control director, dr. tom frieden, sought to reassure americans that a case of ebola here in the u.s. is not cause for alarm. >> the bottom line here is that i have no doubt that we will control this importation or this case of ebola so it does not
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spread widely in this country. >> frieden said the patient, who is not being identified, left liberia in west africa on september 19th, arriving in the u.s. on the 20th. the patient had no symptoms when he left liberia or when landing stateside. but four or five days later, he started feeling sick. he sought care last friday, but then went home. then two days ago, he was admitted to texas health presbyterian hospital in dallas. since the man was not symptomatic on the airline, he would not have been contagious at that time, frieden said. the cdc does not believe anyone who was on the flight with him was exposed. >> it is certainly possible that someone who had contact with this individual, a family member or other individual, could develop ebola in the coming weeks. but there is no doubt in my mind that we will stop it here. >> now, the cdc will try to piece together who did come into contact with the man and when. >> we identified all people who may have had contact with the
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patient while he could have been infectious. and remember, ebola does not spread from someone who is not infectious. >> while it appears the general markets are largely striking off the news of the first confirmed ebola case, there are some sectors that are reacting sharply. court know reagan is at cnbc headquarters with more. >> shares of essential biotech firms have soared. tekmira pharmaceuticals jumped nearly 30% on heavy volume. in august, they allowed the use on of an experimental drug for the virus. tkm ee boll la was the drug taken by the u.s. doctor who was infected while working in liberia and recovered once he
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returned to the united states. biotech firms up 11% after hours. it consulted the world health organization on ebola and has received u.s. government funding to develop a drug. newlink genetics jumped 18%. sarepta therapies up 7%. they caution they have enough to treat about a hundred patient webs but they don't have enough resources to ramp up production. on the flip side, stocks in usair lines fell in after hours trading on where the ebola patient traveled from liberia to texas. you can see delta, american, united all lower. southwest and jet blue slightly higher on the session. seema, back to you. >> thank you, courtney. and we're going to take a quick break. before we do, let's update you on your headlines. u.s. pressure for chinese strength continues as protesters in hong kong spread to new areas
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of the city. germany's key manufacturing sector contracts for the first time in 15 months sending the euro lower. another day, another downgrade. cutting the ratings of five pimco funds. stay with us here on "worldwide exchange." this is a burrito made with chocolate, soybeans, and apricots. what kind of chef comes up with this? a chef working with ibm watson, on the cloud. ingredients are just data. watson turns big data into new ideas. and not just for food. watson is working with doctors and bankers to help transform their industries. today there's a new way to work. and it's made with ibm.
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we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances. the u.s. secret service under fire for a security breach at the white house last month may be suffering another embarrassment. reports say president obama was in an elevator with an armed security contractor who had three criminal convictions during a trip to atlanta last month. reports say the agent questioned the president after he refused to stop recording the president with his phone.
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a supervisor fired him. >> s.e.c. has charged two men with insider trading after they learned hedge fund manager bill ackman was shorting herbalife stock. the man was told by his roommate that ackman was going to make a negative presentation on herbalife. ackman and pershing square have not been accused of any wrongdoing. a consultant is cutting its rating on pim whoa's funds and four other funds. the move comes a day after morning star downgraded the funds. several institutional investors have placed pimco on their watch list. pimco's cio says there will be no changes to the way money is managed now that gross is gone. listen in. >> i believe my role ultimately at the end of the day is to create an environment that allows for good decision making.
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we're going to be very, very focused on client returns going forward. we always have been here at pimco. that is the key focus of every management team. >> pimco's ceo douglas hodge tells cnbc the company is moving forward and clients are standing with them. listen in. >> and we've lost that tape, but we will give you an update on european markets now. european markets have been broadly flat today, slightly in the red. the ftse 100 is the main laggard down 40 basis points, italy down, as well. this is partly based on the manufacturing pmi that came in lower than expected. >> u.s. futures implying a lower open now. s&p 500 down about 1 points in premarket trade. dow jones, nasdaq also lower. this coming in after the dow transports index posted five consukter quarter gains. the s&p 500 logging seven quarters of gains, up 38% during
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that period. let's get you a look at the rundown. what to watch this trading day. the september adp employment report is out at 8:15 eastern tim. forecasts call for an increase of 209,000 in private sector payrolls versus 204,000 in august. at 10:00 a.m., we get the september ism manufacturing index and august construction spending. lindsay pegs, chief economist, joins us now to give us a look at what to expect later this week. lindsay, what are you expecting? when you look at the quarterly gain for the s&p 500, the nasdaq as well as the dow, some would say the market perhaps is a little bit expensive now. >> well, i think the market is holding their breath, certainly for that very important employment report coming out on friday. in the u.s., we did see a disappointing report back in august coming in under 150,000 for the month. so the market is really waiting to see if that was an anomaly,
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if we see that revised away or if we see the september number reverse back to that. but it really is all about jobs here in the u.s. where we continue to see a loss of momentum. we have seen that declining trend since that plus 300,000 number back in april. this will set the tone for that final quarter of the year and it set a very positive or negative trend for the equity markets, again, depending on what that headline job number tells us. >> so 80s a strong jobs report. will the federation rates in about six months? >> well, i think it is. it's too soon to say one report will be 234u6 to tip the fed aepsd hand one way or the other. but it will set the tone the economy is on much stronger footing than we spec'd. we see manufacturing data on a regional basis begin to wane slightly. we see housing data leaves us very little unchanged from the start of the year. consumers seeing lackluster income growth. if we continue to see strong headline inflation, it's going
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to bolster the argument of the hawks on the federal reserve that the fed should raise rates sooner rather than later. >> and lindsay, we've seen the u.s. dollar strengthen again above the currencies, but particularly the euro today. which sectors do you want exposed to in that environment. >> we need to keep an eye on that we're concerned about is manufacturing. and this actually has been the one sector of support to the u.s. economy most markedly throughout the first half of the year. the stronger dollar will make u.s. exports more expensive on a relative basis and this will continue to put downward pressure on the manufacturing base. now, the problem here is that when we look at this from a domestic standpoint, the consumer has improved far less dramatically than we have seen manufacturing production suggest. so, again, against a very unseen domestic consumer and tepid international consumer, a rising dollar does cause problems for u.s. manufacturing. >> lindsay, that you know very
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much. that's all we've got time for on "worldwide exchange." i'm wilfred frost. >> i'm seema mody. "squawk box" is coming up.
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good morning. ebola has lanned in america. we will be live in texas with a report. and protests continue in hong kong. it's wednesday, october 1st, 2014. "squawk box" dwbegins right now.
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good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with andrew ross sorkin and brian sullivan. joe is off today. welcome to october. this is the month that may be best known for some of the market's worst days and for good reason. it has had five of the six one-day worst stock drops every. the 1929 crash, 1987's black monday and, of course, the financial crisis, as well. but before you pull up the covers and go back to sleep and avoid investing this month, take some solace in these statistics, as well. there's a slow gain in october going back to 1928. the dow is up nearly 3%. the s&p about 7% and the nasdaq almost 8%. but it has been a rough run for the small caps. the russell 2000 down more than 5%. despite a volatile end to the quarter, the dow, the nasdaq and the s&p suspect all closing higher for the

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