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

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a very warm welcome to "worldwide exchange." i'm wilfred frost. >> and i'm seema mody. these are your headlines from around the world. >> five flee a cafe in sidney where others are held hostage. police are saying they are keeping a close eye on social media. >> we are monitoring all forms of communication, whether that is facebook or twitter for any information that might assist. and again, i put out that plea and that message. if anybody does have any information, please let us know.
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and margin calls are triggered over secession plans in the country. and japan's prime minister hailed this weekend's vote as an indication for economics. and paris taxi drivers stage a citywide protest against uber. you're watching "worldwide exchange," bringing you business news from around the globe. let's get straight to our top story this morning. the ongoing hostage situation unfolding in sydney. these pictures recorded earlier show armed officers outside a cafe in the business district. a lone gunman is holding an undisclosed number of people but
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local media says about a dozen hostages are held captive. within the last few hours, the number of people seen running out of the building. earlier the hostages were also seen holding a flag against the shop window. tony abbott said the government's allegations are known but we'll see if this is politically driven. >> this is a very disturbing incident. and i can understand the concerns and anxieties of the australian people at a time like this. our thoughts and prayers above all go out to the individuals who are caught up in this. i can think of almost nothing more distressing or terrifying than to be caught up in such a situation. and our hearts go out to those people. let's have a look at the australian market so far today. it is not reacting too severely to the news. also, we have the news out
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earlier today of a revised forecast for the size of the budget deficit, which is also affecting things in australian markets today. do head to cnbc.com for a live look at events in sydney. cnbc.com. we'll have a look at the markets now. do down 0.64%. we have also had revised forecast for the budget deficit in australia, the 2006 budget is revised to $31 billion aussie dollars. nevertheless, the market is not reacting too significantly to today's news. japan's prime minister security's landslide victory declaring a victory for abenomics. they look to strengthen their supermajority by taking 291 of the 475 seats in the lower house of parliament.
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coalition party kometto secured the win by 35 seats while the rival japan communist party took fewer seats. >> translator: my abenomics policies are only halfway done, but we move aid way from the dark days two or three years action. i'm aware that people are not feeling the effects. >> joining us now is derek, the head of global cops ovation research at bank of japan mitsubishi. derek, we'll talk about the japanese result. the crucial question from my point of view is does this now allow him to focus, not just on the first two hours of the reform project, but a third hour
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for structural reform? >> yes. the idea of the snap election is it's a starting point to give him a fresh four-year period. so he doesn't have to go back to the people until 2018. so he can focus more significantly on those structural reforms. i think there's the element of uncertainty in terms of what the focus will be. of course, there's the constitutional reform and the right for japan in terms of self-defense. also the nuclear story and what prime minister abe wants to do. the markets will watch closely going forward. is it going to be about structural reform to boost the supply side of the economy or is he going to focus more on the other aspects? and if that is what happens, the markets could become disapinted in regards to the prospects for reform being speeded up. >> of course, part of abenomics is weakening the yen trading at a seven-year low against the u.s. dollar.
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they say this is good for multinationals that do business in japan, but doesn't that hurt japanese consumer who is have to deal with higher import prices? for example, beef prices are up 5% over the past one year. couldn't that perhaps weigh on domestic consumption? >> well, it certainly is a negative. i think obviously we have to take into context what's happening in terms of the commodity space n particular. we are into a disinflation environment, so that helps on the other side. i think you have to incorporate that into judging the negative impact. i think also, not many people focus on this. you have to remember that japan the largest creditor country in the world from the international investment position. its assets abroad are much, much larger than the liabilities of japan. so in that sense, the overall boost from a weakening currency is very, very positive on the net international investment position. and that's a positive that is sometimes forgot.
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>> let's just talk about this politically, if he does stay in power for the full four years, he'll be japan's longest serving prime minister in four decades, which is astonishing on the back of two election victories. >> no, it certainly helps in terms of the prospects for progress going forward. crucially, he's really going to tackle the fiscal deficit and there's been very little on that so far. it's all been about fiscal stimulus and that's where problems could lie in the future. foreign investors don't believe he's tackling the fiscal deficit down than what the doj is doing. >> japan is not in an annual agreement, but the weaker yen from the last few weeks and the reinforced position of abenomics, what does this mean for neighbors in japan? >> the liquidity is positive and the capital will continue to
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leave japan as the economic outlook is tough. it will signal that capital is leaving. the economic effect will be quite different. so liquidity may go to asian markets but trade with japan is going to be harder and harder. >> enough on japan, thank you, derek. we'll stick with jason to talk more about broader asia now to focus on thailand where stocks have plunged today with s&p trading down by more than 8% earlier in trade. it's recovered now to 4%. jason, what are you hearing for the many reasons for the sharp declines? >> this is very much energy related. as we pass through lunchtime, a few seem to come out in terms of recession. the market did react to those. there was a lot of future-related selling.
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but then we had no facts come out and the market has bounced a little bit. >> isn't this a delayed move in energy stocks? we have been seeing oil prices depreciate since june of 2014. why are we seeing such a big move in energy stocks today in the thailand index? >> the funny thing about thailand is as a country it's a huge beneficiary of oil prices. in asia it's one of the biggest net oil importers. economically, this should be a big positive. but for the thai index, quite a portion of it is made up of energy companies. so there's this two-way pull. >> 10% of the waiting is energy. >> let's touch on the importance of the royal family, particularly in the point where we are still in the extended military government following the military coup. has thai made progress? what's the outlook? >> since may we have seen some stability. local investors until now
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responded positively to that stability. we saw the likelihood of infrastructure projects getting off the ground. things settled down in bangkok in terms of the protests. the thai market until today was an outperformer in the region. things were looking better. the trouble is, as things go on, the market will be subject to moving because of room. >> thank you, jason. for now we'll return to the top story this morning, the hostage situation in sydney. matt taylor is joining us with the latest from sydney. matt? >> reporter: thank you very much, will. the latest is five people have managed to escape the lint cafe in sydney. the movements out of that cafe dramatically captured by television cameras. three earlier in the day, three men which included two patrons and one staffer.
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and then about an hour after that, we saw another two staff members emerge from that cafe. we do know now that the hostage taker is known to police, they have managed to identify who this person is, but they are not revealing any more information to us. and they are also not revealing how many other hostages remain inside the cafe at this point in time. they have also refused to clarify those five that have escaped, whether or not they were released by the hostage taker or whether or not they managed to escape and flee the cafe by themselves. take a listen to some of what the deputy new south wales police commissioner said a short time ago about the ongoing situation. >> we have access to all the new south well as police force, and we also have access and partner agencies working with us for anything that we might need so that we can get the best
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resolution. >> the deputy police commissioner there. we also know negotiations between authorities and the hostage taker are underway. just what he's been requesting of the authorities, they are not commenting, but we do know a number of hostages from inside the cafe have been contacting local media outlets and making comments on social media as well saying that the hostage taker is demanding that an isil flag be brought to the premesis and that he has a phone call with the australian prime minister, tony abbott. he's also allegedly said that he has two explosive devices inside that cafe. and that there are two other explosive devices elsewhere around sydney. as you can imagine, the center of sydney is cleared out with people urged to avoid the city. a number of traffic routes into the city have been disrupted as well to prevent people from
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making their way into the city. and we will be getting a briefing in about five minutes or so. the new south wales police commissioner and the new south wales premier will be updating us exactly on what's going on. we'll bring you those comments when the media conference is due to kick off in the next five minutes or so. >> matt taylor, thank you for developing us on that story out of australia. appreciate it. and we'll focus on europe as we get the headlines. ecb members against the low interest rates have had an effect and the negative deposit rate is the lowest possible rate. he also sees no prospect for more interest rate moves and the ecb's goal is not to have unified interest rates across the eurozones. he also said it's not the goal of the ecb to have uniform interest rates in europe. so focus on how the ecb will revive the european economy,
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nowotny says there's been some effect on the low interest rates but won't have much in the future. wilfred? thank you for that, seema. we have a bit of strength in european markets today coming during the session. we started flat and are now at half a percent. what is the reason? well, possibly some of the comments out of mr. nowotny that seema just brought you, but also the fact that last year was negative. it's the worst 2014 look at the markets. i have never seen it so similar, 0.60% across the board for the four major indices in europe thus far today. last week huge negativity based really around the oil price. and that affected risk assets across the board, particularly energy stocks. today, a bounce-back. that could be part of the reason for the strength we've had. wti still below 60.
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58.6. up 1.4% today. brent is just above 60 and $63, up 1.84%. that's a look at bonds. we have significant yield compression in the u.s. the back end of last week and early today. 2.12%. of course, that's just the risk of sentiment we have had leading people to buy into bonds. last week as i said affected really by energy prices. this week focused again on the fed meeting tuesday and wednesday. will janet yellin be dubbish, that's what the bond market is suggesting. we have had yield compression in europe for an additional reason, that's the expectation of more easing at the next meeting of the ecb. 0.96% to tell the story there. and coming off the five-year highs on monday against the broader index. today bouncing back a bit against the euro, 20 basis points, 1.2434. it's been giving up ground
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against the yen to cross the 121 handle at the beginning of last week. now back to 118.6. not so much based around the election but coming off the highs as i said last week that it hit. the aussie dollar is flat despite a worsening trade deficit numbers and indeed the situation in sydney. what is coming up, seema? coming up on the show, we'll focus on uber taxi drivers who are protesting against uber. we'll speak to the rival of uber in 30 minutes' time. and u.s. shale boom project in jeopardy? we'll tell you all the e the tails. and sony scrambles to play damage control demanding news outlets stop publishing leaked e-mails. that's coming up next.
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and some news to bring you, a private equity group is set to buy petsmart for $8.7 billion following pressure from and activist investor pushing for a
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sale since july. the $83 per share deal marks the largest buyout this year, but that's not it. family dollar is set to delay a vote approving a merger with dollar tree according to a report in the new york post. the vote was originally scheduled for december 23rd to give rival dollar general more time to improve its counter offer. dollar tree is currently offering $74.50 per share while dollar general is offering $80 a share. let's focus in on some of today's individual movers. bt is up 1% and is expected to announce a takeover deal with one of the uk's biggest mobile phone companies as early as today according to a report by "the sunday times." they have said to have been working out a deal for a $10 billion acquisition of ee or 02. h&m is beating expectations up half a percent. the swedish fashion giant said sales came in at just over $5.6 billion. meanwhile, technip dropped its
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bid for ccg after talks broke down on sunday recovering off 7.63% off the back of the news. cgg said none of the values were creating positive news for the company. now stephan is here with more. >> reporter: cgg is a small unit that employees 40 engineers. technik didn't say how much they would play exactly but the acquisition would only cost a few thousands or millions, nothing about the plan to buy the rival cgg. technip is based in frankfurt specializing in polyester processing. they claim the acquisition to enhappens their position as a technology provider to the petrol industry and will incrude revenue from that segment of
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business. technip also decided over the weekend to drop the plan to buy cgg, another french oil services group after the first approach was rejected. that was only three weeks ago. cgg at the time considered the offer too low despite the 25% premium that technip was offering on the last previous day's price. they could have a potential alliance after the takeover fail. after this announcement this morning, they have raised their recommendation for technip to neutral to increase its price target for the stock to 48 euros up from 43 previously. over to you. >> stephan, thank you very much for that now. we'll bring you a live police press conference from sydney relating to the hostage situation there. let's listen in. >> if you work in this exclusion zone, i'll ask you to work from home tomorrow. a map of the zone will be
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provided to the area. when you go about tomorrow morning as you would, there's a couple of changes in the city. they will continue to be an exclusion zone around martin place. so if you work in this exclusion zone, i ask you to work from home tomorrow. a map of the zone will be provided to the media and can be found on the government website, newsouthwales.gov. look for updates on that. the transport network will operate largely as you would expect. but again, just to make sure, check the transport new south wales website to get full details the on your journey. ultimately, we are doing all we can in these difficult circumstances. and we will get through it. but i'll hand it across to the commissioner to make a few other comments. >> thank you, premier.
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good evening, ladies and gentlemen. can i start by saying our plan and our only goal for tonight and for as long as it takes is to get those people who are currently caught in that building out of there safely. that remains to be our number one priority and nothing will change. i'm sure there are many questions that you might have for us, and i'm not going to necessarily be in a position to give you that information because i will not be going into the tactics or the strategies that we're employing, suffice to say that we have large numbers of police. they are in contact and we're working to resolve this just as quickly as we possibly can. having said that, i, too, want to thank the community, particularly those people who are in the city today. you acted in a way that made it a lot easier than it could have been. for that i want to thank you. there's much work to be done and much more to be done over the coming hours i'm sure. but for those that have loved one that is may be caught up in this, for those that may be in
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that particular building, rest assured, we are doing all we can to set you free. we will be looking after your safety as our number one priority. and i'm happy to go to questions. thank you. >> reporter: the lights have gone off in the cafe, have you switched them off? >> i'm not certain about the tactics at this stage, janet, but certainly when the time is right we can talk about those things. what's happening inside those premises are thing that is will need to be resolved amongst negotiators. we have the best negotiators in the world on the job right now. and so at this stage, rather than second-guess or give them anything that might cause some grief for those people that are caught in there, we're not in a position to talk any further about that either. >> reporter: what do you know about the condition of the hostages inside?
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>> i understand nobody is injured. and for that, we are grateful. >> reporter: the hostages that have come out, are they allowed to talk about what happened on camera? >> certainly, they will be working with us to assist in making sure that we get a peaceful outcome in this particular event. look, the one thing that i can say is, if people are being contacted by hostages, particularly the media, we'd ask that you put those people and ask them to ensure that the man inside speaks to police, speak to a trained negotiator. they are the people to help in this situation and certainly they are available and will be looking to talk to the man who certainly has control of that particular building right now. >> reporter: has he been known to police? >> pardon? >> reporter: has he been known to police? >> we won't go into the detail of who is in there and how many are in there at the moment.
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>> reporter: do you know who is in there? >> certainly at this same, we are putting that picture together, but at this stage in terms of numbers, who they might be, we are not at liberty to go into that information. >> can you tell us -- >> again, they are out of the building. rather than talk about how that happened, we are just pleased to see them out. >> reporter: can you tell us about the motivation for this in the city? >> look, again, at this stage, motive, there are many out there that would be summarizing and some would be guessing. and at this point, we are not in the business of guessing but we are in the business of investigating. we'll get to the bottom of it. at this same, again, all i can assure you is that we're doing absolutely all we can and we'll do more to guarantee the release of the people. >> reporter: how are police involved in this operation? >> too hard to say, lucy. we have many involved right now and are looking to increase the
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numbers in the coming days if this drags on. we are hopeful to get an outcome. of course, that's what we are all praying for. having said that, we'll put as many police as we need to in this operation because it's just that important to us. >> reporter: can you tell us about the hostage at the hospital? >> i understand that one hostage did go to the hospital for a pre-existing condition. and was treated for that. there was nothing that came from this event that caused that person to go to the hospital. >> reporter: how much information have they given you? >> again, we are not in a position to go into that. look, i would like to give you as much as i can, but right now that's as much as i can because first and foremost we are looking after and making sure we do nothing to put in any way jeopardize those still in the building. >> reporter: you addressed the hostages, so you're acknowledging that -- >> there's no place on earth that doesn't have access to social media. we know that. and accordingly, our plans are
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built around that. >> reporter: you talk about the contact with the hostage taker, do you make direct contact with the negotiators who have directly spoken to him? >> the means by which we are communicating is something close to the chest at this moment, suffice to say, we have contact with him. >> reporter: there have been large crowds standing around and watching, are you asking them not to come in tomorrow? >> look, when there's not a lot of information out there people don't know quite what is going on. having said that, as i said earlier, i want to praise sydney members who have behaved appropriately for this hard conversation. i can only ask for this to continue. there's no need for people to be around the area for there's nothing to be seen.
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again, if we can get that level of support tomorrow that we got today, we'll be in a good place when it comes to managing crowds. already such gathering that you're talking about. >> reporter: have you cleaned the opera house and the other buildings? are you looking for the explosive twice? >> at this stage we are dealing with one location. we are not concerned at this stage about any other. >> reporter: is the reason for locking down other buildings because you have information that you need to investigate about other locations? >> we needed to be sure that those locations are safe. they have been cleared and deemed safe. >> reporter: because of information you had? >> certainly we were acting on advice and that advice is something that we have to build on. again, if people see something, we want you to tell us. we want you to ring the national security hot line. if you see something happening, ring 000. if you need to respond urgently, don't hesitate and use the 000 number. that's what it is there for. at this stage again, we have certainly had a lot of support from the public.
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and we would encourage that to continue. if you see something, say something. >> reporter: are you certain there's just one gunman involved? >> again, we are not going to talk about numbers. and we're not going to talk about those that might be inside that stronghold suffice to say at this stage we know it's at last one. >> reporter: looking at some of the police out there and talking about surprise attacks and whatnot, what is your message to other people watching? >> clearly reprisal attacks are something that should not happen. at this stage, we need to let everyone just settle down. we want people to remain calm. there are a large number of police that will be involved in ensuring that we have a level of safety and confidence that people can go about their business normally in any part of new south wales, particularly at
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this time. so those police will be out there. you have seen them more recently after operation appleby be groups involved in making sure there was community confidence that the police were there to serve and to keep everyone safe and secure. that will continue. >> that's interesting that we are working with others and we'll continue to make sure everyone is safe and that will go on. okay? >> that was andrew skipioni. he said during his address, quote, we are doing all that we can to set the people free. and they did understand that so far nobody had been injured. he thanked sydney people for their calmness in the situation so far today. and he didn't give too many specific operational details
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because he said he did not want to jeopardize the people in the building. he urged people to continue to remain calm. that was the new south wales police commissioner following a new address from the south weals area. we'll discuss this more, joining us on the phone from melbourne is dr. benjamin macqueen, dr. ben gentlemjamin benjamin, thank you for joining us. in september the terror alert was raised to high in australia. at that point the prime minister abbott said there was no imminent threat at the time to the people of australia. do you think he had more information about the time he was trying to keep people calm and that the threat level was, in fact, higher than he eluded to? >> reporter: the information we are getting now and is still
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speculative but anything linked to the current event would be no signal. i think there was a lot of pre-planning going along with it, so i'm not sure -- we had some terror arrests today and there were a number of rising levels today. >> there has been a growing concern about the security and safety of australian nationals over the past couple of years. do you have full faith that the police and officials on the ground can handle this situation accurately and efficiently? >> yeah, i think they are handling the current situation quite well. i mean, they are taking it slowly and are getting statements from the commissioner and others that it just takes a while. this is going to take a while. we just have to take our time with this, we're not going to rush it. i mean, we can't -- in all
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honesty, we can't prevent these sorts of things happening because these are places where everyone can go, so i think what we need to do is judge the police on their response to the event. and i think their response has been highly appropriate. >> ben gentlemjamin, we have mi messages on social media. what is your understanding of this will be an isolated issue or not? >> again, it is speculative. we don't really know but this is quite isolated. it appears there's only one individual involved. you can gleam some things from some of the superofficial things that we're seeing, like the flags trying to link himself to the isis flag. he is seeing this as an isolated
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incident to stir up trouble. not to say there won't be repeat incidents. this is quite likely that he'll inspire similar acts, but i can't say this is sort of a coordinated claimed organization. >> benjamin, thank you for joining us. dr. benjamin macqueen, senior lecture and list from monash university. now moving on, chinese economic growth could slow to 7.1% next year down from the expected 7.4% growth according to an initial report seen by reuters. still with us is jason pitcoff. jason, we'll talk a bit about china. these specific growth forecast targets from 7.4 to 7.1% is the highlight of the mismanagement in the chinese company. that they feel compelled to hit
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the arbitrary numbers. >> i think it's the direction that matters, not the number itself. 7.17, it will feel low for many industries in china compared to when the growth rate was higher. that's what is important. the margins are thin and we are seeing non-performing loans in the banking sector go up. we are starting to see a credit cycle, but china is much more a flexible company than it used to go. there are a lot of entrepreneurs and many of them are going to new sectors rather than focus on the property development as once preferred. >> speaking to an investor in new york city who said the biggest risk to global markets in 2015 would be a slowdown in china. but my question is, don't you think if the u.s. economic growth story stays up tact and the consumer continues to spend money, won't that increase imports to china and help the
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overall economy stay on track? >> i think chinese exports to the u.s. can hold up reasonably well, but china is less competitive than it once was with a smart fall in the yen, other emerging market currencies including last year. so i think china's share of exports may be reasoning steady. but the u.s. being strong, europe being weak, one cancels out the other. >> how about the opportunity with china and the u.s. working on a bilateral treaty to result in the american companies opening up businesses or expanding into china. could that also be one reason to stay bullish on china or perhaps see a rebound in growth in 2015? >> i think we have to remain open minded on china. as investors, we are always looking out for opportunities and we might shy away from some sectors, property, financial companies, but there will be other sectors where would like to informs. and if we do see a sell-off in the chinese markets, we'll take advantage of that in 2015. >> jason, in terms of global
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macrorisks, do you thing europe is underestimated by the market? >> i do. what is happening in russia is quite fascinating and week to week the situation there appears to be worse anything. it's the same for many countries heavily reliant on exports of oil-related products, whether it is oil, gas or both. so venezuela, iran, they are having similar problems but russia is a much more important country. the size of the economy is contracting sharpfully the u.s. dollar terms. it's likely to occur again next year. the demographics are pretty apalling, so it's starting to look like it has such a large geographic area, that it will have a declining pop lugs. you have to look for things to sell in larger amounts and quickly. we heard today that sales of the armory weapons have gone up 20% in the last year.
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going forward, russia will say what do we have to sell and i think they will sell it to china. >> the next election is 2018. i think it will be future leaders, so i don't think this is an event for 2015. but in the medium and longer term, that's russia forced to do something like that. in a similar way in which they sold it to the u.s. >> jason pitcoff, thank you for being here. we'll get you a check on the european parks after a tough week for the european stocks last week. a lot is predicated on the price of oil down 40% since june of 2014. but here on monday we are seeing a bit of a rebound with the ftse 100 up 0.7%. the xetra dax is trading above a level it broke ten days ago at
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9,655. up just about 0.64. there was no room to cut rates more and the ecb measures need to swell the balance sheet to spur the arizona company and it can only work if accompanied by fiscal policy steps. again, no room to cut rates any more. let's stick with europe and focus in on italy. the prime minister called on his ruling party over the weekend to support reform measures despite fears of a political challenge. now, on friday two italian unions held nationwide actions against the latest labor reform which is easier to fire workers. we'll talk about italy and the prospects with the senior european economist at society general. thank you so much for joining us. of course, italy is strict and outdated labor laws as widely seen as one of the reasons italy's company is in recession. mateo is not able to pass his reforms.
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>> we have to remember that this is the third year in a row that italy has negative growth. clearly, we have a long-term problem here in italy. the label market rules are headed in the right direction but much more is needed, unfortunately. we need much higher growth in italy to make sure that the debt is us is stainable. or that it is tied to a fiscal policy. >> is it too easy for opposition parties, whether they are from the left as it is in greece or from the reuters on the right to impose stru impose structural reforms. if you vote for us, we'll come in to make the situation nicer because it's taking so long to impose the reforms, people are willing to believe that. >> yes. and once new parties are in power, they will also face the same kind of problem.
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on the way, it's a matter of having a balance with your electorate. we have a long, stable period in europe and it is difficult for countries who do not see progress to say to their electors, we are on the right track. here i would use the example of countries who are in deeper problems who go to assistance from the international community. and the number of countries have done that he, ireland, portugal and greece among them. italy doesn't have growth yet and that's a problem. >> so how does italy learn from ireland that staged a rebound? >> well, if they want to avoid getting the asis the answer from abroad, they have to take deeper steps on their up. to find the balance, renze is trying to navigate this balance and not do too much. but i think from the perspective
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of investors, clearly we would like to see much more. >> on the fiscal side, we'll have this type of austerity. on the other side, does there need to be short-term easing to allow them to get through. >> i told them they can do more on the demand side and are opening up to a possibility offingo offingo offingof aggrega aggregate. >> at some point next year, when do you actually expect the reforms to pass? and at what point could we see it return or rebound in the economy then? >> it's typically structural reforms that take time to feed through to the economy. however, if you can deliver them in a credible way where mark is
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actually buying into, that would be very beneficial. but unfortunately what we have seen so far is that it takes a little bit longer to actually get reforms. and it comes by a gradual approach. >> slow and steady always wins the race. we'll see if that happens for italy. senior european economy at society general. thank you so much for your time. japan's manufacturers are growing more cautious about the future according to the boj's quarterly survey. they saw manufacturers move to slightly lower than the previous reading and the estimate. this suggests the effect of the yen to be uneven. sticking with japan, sunday's general election resulted in a landslide victory for shinzo abe. here's the story live from to o tokyo. >> reporter: thank you, wilfred. the liberal democratic party and
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its coalition partner have secured their part in the lower half parliament. they needed 317 to override the legislation. this means barring any drastic changes, abe has four years to release more plans on abenomics, but according to the internal affair of communications seat, this is a post-war low. and a lack of voter confidence in the role of abenomics to release investigation. since abe became prime minister, the stock market as doubled and the yen has weakened significantly to boost profits for major corporations. but these benefits have not been felt much by households. mostly because wages remained flat. abe pointed out wage figures are only revised once a year in japan. he also said the chairman of the
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nation's largest business lobby will encourage other companies to raise wages this coming spring. the policies are for deregulation. that's all from the nikkei. back to you, wilfred. >> thank you very much. still to come on the show, french-founded ride sharing community blah blah car weighs in on the uber ban and tells us where it is in growth for 2015. act i. scene 3. open port twenty-two-oh-one-seven on the firewall for customer db access. install version two-point-three of db connector and ensure verbose flag is set in case of problems. (clapping sound) isn't the cloud supposed to make business easier?
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get the one that can connect to the systems that you already have. today there's a new way to work. and it's made with ibm.
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and we're going to the latest out of russia, the russia bond yield spreads over u.s. treasuries have surpassed 600 basis points for the first time. that's coming so far in today's trade. sorry, the first time since mid-2009. so 6% spread between u.s. and russian ten-year bonds. a story we are watching today, the french government announced it will ban uber from january 1st saying the ride-sharing version of the app allows non-professional drivers to take clients. this as taxi drivers stage a full-day protest against the car-booking app. we'll go out to stephan
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following this story live from paris. stephan? >> the government has decided to ban uber arguing that the service presents a danger for the customers. that will impact only part of uber's activities. the service is a cost-sharing service using non-professional drivers and the ban will not impact the government. the announcement from the government came on friday saying they were incompetent to make a decision on whether uber should be banned in france. and it came as the taxi drivers started this morning to block some of the access to the french capital arguing that uberpop wasn't fair competition because taxi drivers have to pay for a license of 200 euros for a small fee of only 150 year after year for professional drivers like
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uber. this announcement comes after comments made last week by the french economy minister who said paris should be the second market in europe and that the government was not planning to ban the whole company. and he also said that france wasn't planning to impose a ban, but at the time he was important for uber to have the right level of qualification for its drivers, which was kind of a way to pave the way for the decision that was out this morning. so the ban on uberpop will start on the first of january next year. now we'll get market reaction from a competitor to uber, nicholas bruson, founder of a french car-sharing community with over 10 million members. a great day to have you given that the story is gaping a lot of attraction. your app allows consumers traveling the same direction to share a vehicle. how is your business being impacted by the growth of uber? >> thank you for having me.
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first of all, there's confusion on what we call ride sharing in the different segments of ride sharing. if you think of uber or the taxi apps, you essentially type a button, a car is coming. an uber licensed taxi or the licensed taxi person will carry you from point a to point b. if you think of what the car is doing, it is different in giving you a community of people, drivers or passengers, and the driver is actually sharing the ride with the passenger. so typical that the driver would be anyone like a teacher or anyone. and when you drive from, let's say london or brussels, you should share your car with two or three passengers going the same way. >> at the end of the day, if i'm a consumer in paris to go from point a to point b, i can use uber or a taxi.
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>> it is like comparing a taxi or a long-distance car. after you book the car two or three days in advance, just like you book a car or train ticket, whereas on uber you tap the button to get a car. >> nevertheless, the ban we are hearing from stephan is based around the safety of passengers because of untested, unlicensed drivers. which is an issue that people who use your service also face. >> so in other words, you find that the mechanics are a bit different with uber. as a passenger, you pick your driver. as a female passenger, you can pick a female driver. it is very much supply led in the marketplace to choose your driver. on uber you pull the driver and
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they will send you a driver, so you don't make a choice on the driver. >> we'll talk about the success of blablacar so far. you are not taking a similar approach to uber in terms of expanding across the major cities. why do you think that you haven't done that, in particular, there are reasons you don't think it will work as well in the u.s. >> well, what we chose to do, if you go back three years ago, it was very much a french community, like 99% of the users were in france. we decided to bring that to europe first. so we decided to expand to spain, italy and the european countries. and today we have over 10 million members across europe. and most recently we are expanding to russia and turkey where we have city ride to ride sharing to message back and forth. we decided not to go to the u.s. now because the market is not as competitive for city widesharing.
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first of all, the incentive for a driver to share a ride long distance is a lot less needed. >> you braved $100 million including from excel partners. part of your expansion also includes to india which is dealing with heightened concerns about safety at this point. how do you expand to end india keep them safe? >> safety is one of the biggest concerns in all the services, especially in blablacar. it's all about essentially members who check a few things, we check the mobile phones and facebook with the connections on the verification on drivers and passengers. but then it's time to rely on a lot of peer reviews and the community to build trust in the community. >> nicholas, thank you very much
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for joining us. very food to hear about that. >> and good luck. >> nicholas busan, the co-founder and ceo of blablacar. very interesting story, isn't it? >> yes, this ride sharing space is getting a lot of traction. taxi these days are expensive, so if you find an app to get to point a and b, consumers are after it. coming up, we'll head back out to sydney where our hostage situation continues in the cafe. we'll bring you the latest right after this short break. xkç
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5:00 a.m. on the east coast. welcome to "worldwide exchange." i'm seema mody. >> and i'm wilfred frost. these are your headlines from around the world. first up, five people flee from a cafe in sydney where others are held. the police say they are committed to a safe rescue plan. >> in our plan, our only goal tonight and for as long as this takes, is to get those people who are currently caught in that building out of there safely. that remains to be our number one priority and nothing will change. u.s. futures point to a
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mixed open after wall street suffers its worst week this year. a rebound in crude could give some relief as investors await the fed meeting later this week. thai stocks plummet. posting the biggest drop since 2008 leaving asia lower. meanwhile, the japanese markets shrug off a victory for prime minister abe. petsmart gets snapped up for $9 billion in the largest leverage buyout of the year. you're watching "worldwide exchange," bringing you business news from around the globe. now let's get straight to our top story this morning. the ongoing hostage situation unfolding in sydney. according to the latest reports, none of the people being held captive have been injured and police say there's much work to be done in the coming hours. let's go to matt taylor in sydney with the latest.
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hi, will. the latest we have from the new south wales police commissioner in the last half hour or so, and you just played some of what he had to say in the headlines there. the plan tonight is to get those people out safely. that's going to be the plan tonight and for as long as it takes. still only five people have emerged from that lindt cafe in martin place right in the center of sydney. it's been some hours since seeing movement on that front. we have three people who initially fleed, two men, two were customers, one was a worker. an hour later, two female workers emerged from the building as well. we understand that one of those has been taken on to the hospital. but no one has been injured. in terms of how many hostages remain inside, the police commissioner wouldn't go into those details for operational reasons, but we understand there may be about 15 more hostages still inside that building.
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and all of the lights in that cafe have been turned out. it's now 9:00 p.m. here in sydney. the commissioner would also not confirm whether or not those five had managed to get out of the building escaped or whether or not they were released by hostages. and wouldn't detail any other nuts and bolts information for obvious reasons. take a listen to some of what the police commissioner had to say. >> i'm sure there are many questions that you might have for us. and i'm not going to necessarily be in a position the give you that information because i will not be going into the tactics or the strategies that we're employing suffice to say that we have large numbers of police. they are in contact and we're working to resolve this just as quickly as we possibly can. >> reporter: the police commissioner also saying he wouldn't be speculating on the motives behind the incident, but we do know that a number of
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hostages from within that building have been contacting local media outlets here in australia. and also posting some of the demands of the hostage taker on social media. they say that the hostage taker demands an isil flag and a phone call with the australian prime minister tony abbott. he's also claiming that there are two explosives in that cafe. and two explosives elsewhere around the sydney central business district, however the police commissioner says they are only concerned about that one location, the cafe location and not about any other areas around sydney. the opera house was closed a little earlier on today and evacuated. the commissioner saying that was because they had a fairly reasonable threat against that particular landmark. they said they managed to dispel any concern about that particular threat, so the opera house was reopened. performances that were supposed to go on there tonight were
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canceled. and the harbor bridge was also briefly closed. we know now there are a number of traffic restrictions in place on that particular landmark in sydney. the two southbound lanes to get into the southern business district are closed off and traffic restricted from exiting the bridge to make its way into the central business district. a lot of streets are still closed down and we'll continue to monitor the situation, guys, as the evening continues to unfold. >> matt, thank you so much. of course, a developing story that we'll continue to watch. global investors will be watching. at this moment we'll take a look at the u.s. markets to see how they are faring. it was a tough week for u.s. stocks with the volatility gaping 7%. the dow jones industrial indicating a move higher by 120 points. the nasdaq up just about 31 points in pre-market trade. but the s&p 500 is actually down just about four points in pre-market. remember, energy makes up 9% of the s&p 500.
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of course, the decline in oil prices has had a significant way on investor sentiment. taking a look at the european markets after what was a tough market for european stocks last week, we are seeing a rebound on monday morning. we are looking at the ftse 100 up 52 points. the xetra dax up 70. the cac 40 is up 27 points and the italian markets up 162 points. this week also a lot of focus on the fed and on whether they will indicate that rates will rise sooner than expected given that growth is meeting the target acceleration. job growth also met the target, but oil prices are weighing on inflation. so can the fed raise rates well below its target? that seems to be a big question. >> how dubbish is the statement? of course, as seema said, one of the reasons for a bit of sflent if european markets are coming out of mr. nowotny.
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he ruled out primary market bond buying for the ecb and did say secondary market purchases are possible if necessary. he said the risk of the euro zone collapse has been removed and did say there was no prospect of more interest rate moves. that's one of the reasons for the equity market strength so far in europe today. the other reasons being a bounce-back from last week's decline and the bounce-back in the oil price as you can see today. wti still below 60, 58.5 up just over 1% today. brent is at 62.9 up 1.7%. so a risk asset in itself is rising and that helps european equities. we'll look at the bonds where the story for the last ten days or so has been one of yield compression. we are at 2.12% in the u.s. ten-year bond buying there, partly because of the risk of sentiment we have from oil prices last week in europe. there's been a supplementary reason happening in january. the yields on the german
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ten-year, .65%. the euro has bounced back a bit, 1.2422. it has shed more ground against the yen, not much of the election result but because of the massive move in the past weeks. and after it crossed the 121 handle last week, it's come back a bit since then. the aussie dollar regained a bit despite situations in sydney and the sterling is flat. we'll check in on the markets in asia. sri is standing by for us in singapore as ever. good afternoon to you from london, sri. good morning to you, wilfred. i want to pick up where matt taylor, the occur respondent in sydney left off. to reemphasize that the hostage situation is very much a huge crisis right now, but remember it is unfolding in the heart of
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sydney's business district impacting the sentiment in the capital markets in australia. it's affecting the aussie dollar as well. elsewhere, broadly the sentiment is quite negative on the back of that more than 300-point decline we saw. the dow at the tail end of last week. obviously, we saw negativity from the sharp oil price declines from last week despite the fact as you eluded to that we are seeing some stabilization in the oil price. big story for us today was the landslide victory over the weekend off prime minister abe. so now the real story is with him to roll up his sleeves and get moving on the third structure of reforms. the market feels that he's not up to the task. and that's one of the reasons why the nikkei is under pressure. out sourced moves as with the bank set down with margin calls
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compounding the negativity. but it is energy-related. so we should see stabilization tomorrow and a bit of a bounce-back. brokers telling me the market is going to trade between 1440 and 1500 for the end of the year. that's where we stand. back to you. we'll talk about the markets and what to expect this week with carter worth, chief market strategist. thank you for joining us. >> thank you, good morning. >> a lot of discussion about how much the rapid decline in oil prices has changed the dynamic of the stock market. how much do you think it is spooking investors? >> well, what is interesting is it very much has had an impact on the general feel, if you will, of the equity market. it is not so much specifically crude, it could be anything, meaning any very precipitous important drops in the area of financial assets. you could have a plunge in real estate prices or a shock in other areas. it basically is unsettling and
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that is what is going on here. and there's no indication that this decline is over. it's tempting to bye week this. we have done it in the past, and invariably being early is a painful thing. >> equities can rebound despite the continuous drop in oil, or do prices have to drop before we see a rebound in the stock market? >> right. the important thing in one's mind is to visualize the trajectory of the bull market. we are well into the sixth year of the bull. if you think about it, we have had this september/october sell-off, the draw-down of 10%. that's the biggest draw-down in three years. last week we just had the biggest one-week decline in two years. these are the kind of vibrations and cracks that start to appear when you have a fairly mature bull phase that is now again six years in the making. and we made no progress this year.
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equities are not up. the country world index, 9,000 stocks from 48 developed in the emerging countries is up changed on the year. that's the broadest range of ek wes the. in fact, that index is propped up by the influence of u.s. stocks. if you take the msi all country world index, we are down almost 8%. the bull market is very much in question. >> carter, let's talk about some of your specific calls. you upgraded your call on financials back in august and you're banging the table about that now. why is that? >> right. so what we like here is that there's general improvement in relative strength. all things that have been tested, the biggest models ever over time, strength is number one. when you have a period of underperformance in ten of the prior months until august, then you start to see the improvement relative to the general asset equities. usually that's the beginning of the period performance. so in august, we went ahead and
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did what you referred, we upgraded the sector from underweight to overweight. we like the group, and this is a strange thing to say and there's no way to quantify, but we like it as a safehaven play. big broker dealers in the u.s., we think they will do well. and attract capital where some of the classic defensive areas like health care and staples are quite extended and crowded. >> you like financials despite the capital shortfall, the $20 billion shortfall around jpmorgan? >> yeah, we think that's largely priced in. and all the other horrible things they keep having to say and do. >> all right. we'll see if you're right, carter wright, thank you for your time. we'll also give you a rundown of what to watch this trading day. it's a big week. today we'll start with december empire state survey that comes out at 8:30 a.m. eastern offering a read on manufacturing and hiring. then at 9:15 a.m., industrial production is released. finally at 10:00 a.m., the nahb
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housing market index will be released providing a check on home builder sentiment. really be right back after this break.
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welcome back. we'll give you your headlines. australian police worked through the night to rescue hostages in
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a sydney cafe. u.s. futures point mixed following the worst week on wall street this year. and bc partners snaps up petsmart for nearly $9 billion marking the largest private takeover of the year. the rise continues in mma as they look to buy petsmart for $8.7 billion. they have been pushing for a sale since july. the $83 per share deal marks the largest leveraged buyout this year. i mean, wilfred, we thought we had seen the flurry of deals hit the market in 2014, but clearly investors and companies are finding a way to make deals happen before the year end. >> absolutely. making use of the low rates before they might disappear next year and m&a continues. >> this year, we have seen $2.6
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years of m&a. a 60% rise since 2013. a flurry of transactions, but the question is will it continue into 2015. washington has been trying to crack down on these type of deal setups. >> indeed. meanwhile, family dollar is set to delay a vote to approve a merger with dollar tree according to the new york post. the vote was originally scheduled for december 23rd. the move could give dollar general more time to approve its offer. dollar tree is currently offering $74 per share and dollar general is currently at $84 per share. >> we'll discuss how falling oil prices are impacting the u.s. shale move. that's up next. xkç
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opec remains unchanged as the oil prices continue to drop $40. they have not yet set a target for oil prices. oil prices are regaining ground today up 1%.
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wti is at 58.46 and brent crude is at 62.92. let's go to s&p capital now. your view is that we are close to the bottom of the oil price? >> i think that's fair. i think that you look at the economic rates that a lot of the u.s. independent producers are facing. you start to see some of these shale places become uneconomic at $60 oil. obviously, if the oil price continues to go a little further south, you're going to see an increasing number of plays no longer economic. and i think it's starting to resonate in the counts and the production numbers. shale production was down for the first time in 11 months in november, for example. >> talk to us about how to play energy stocks. if i'm invested in energy stocks and i've seen the s&p energy
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index lose about 16.5% already this year due to a drop in the price of oil, do i cut my losses and sell those stocks or ride it out until 2015? >> that's a good yes. i think it varies depending on which names you're in. i can give you examples of spaces we have positive fundamental outlooks on right now. one is the integrated gas companies, chevron, for example. we have four stars or buy opinion on the stock. we think that it's a longer term focus kind of play. they are doing a lot of interesting things with l&g in australia, for example. and i think the growth potential is there, you have to have the stamina to wait it out. the second example would be the oil and gas storage and transportation index, which is one industry in energy still in positive territory for the year. names we like there, for example, somewhat smaller names but a name like regency oil partners, ticker rgp.
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also four stars or buy opinion. for names in storage and transport, it really doesn't matter to nearly the same extent what happens to oil prices because it's really a volume play. and the volume is definitely pretty strong right now. >> stewart, just before we go to the next question, can i ask, any disclosures with any of the business companies you just mentioned, very quickly? >> no, none. >> okay. moving on, the oil price as we know has fallen pretty sharply. what about divergence and energy prices across the globe? you mentioned l&g in australia, are asian gas prices at a premium or have they fallen much less than the oil price? >> it's a good question. a lot of gas prices in asia are oil-linked. which is different than it is in the americas. so i would expect that asian gas prices have come down as well. i think your comment earlier about the united arab emirates, what that feels like to me is an
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opec constituent pushing all its chips into the middle of the table and asking not opec countries to blink first. again, though, i think we're reasonably close to the bottom. and i think there's not a huge amount of downside from here, at least in the short-term. >> i think we are close to the bottom even though the saudis are not willing to cut protection? >> yeah, i think -- i do think that the shale producers are more likely to blink first. but i think it is starting to manifest in the production numbers. and if you look out a year from now, i think oil prices are going to be higher than where they are today. >> when do the u.s. shale oil prices cut production? >> we have already started to see it. we have started to see some names in the balkan, for example, pull back. conoco phillips announced they are cutting back in the basin, not because of the economic $60 oil but because they don't have the takeaway capacity to move
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the product out of the region. so there's a couple different reasons why some of the shale producers might be cutting. i think we're already starting to see it a little bit. >> yeah, it comes down to supply and demand. stewart at s&p capital, thank you. sticking with oil, the key oil terminals have been closed due to clashes in the rival governments in libya. fighting has disrupted half the company's crude oil capacity. joining us now is hadley gamble, so far the oil prices have shrugged off the concerns. is this a catalyst of it to turn around? >> this is part of the broader saga we have seen in libya the last couple of years. essentially, what you have are rebels in the west trying to take over the oil facilities with an elected government in the east to try to hang on for dear life, pretty much. the u.n. is going to try to get in to negotiate a settlement and the government in the u.k. and the u.s. are working desperately
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through that channel for them. but at the same point, this is falling off the radar scream when we talk about trouble in the middle east. we are looking at the oil price and doesn't seem to be moving that much. >> hadley, thank you for the update on libya. still to come on the show, we are going to bring you the latest on the developing hostage situation in sydney nearly 12 hours since the crisis began. that's coming up.
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you're watching "world wide exchange." i'm seema mody. >> i'm wilfred frost. >> five people flee from a cafe in sydney, australia. and the authorities are committed to a safe rescue plan. >> our plan and our only goal for tonight and for as long as it takes is to get those people who are currently caught in that building out of there safely. that remains our number one priority and nothing will change. >> the u.s. futures point to a mixed open after wall street suffers its worst week this year. a rebound in crude could give relief as investors look to the fed meeting later this week. stocks plummet with the biggest intraday drop since 2008 leaving asia lower, meanwhile the japanese markets fall
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despite a victory for prime minister abe. and petsmart is in the largest private takeover of the year. you're watching "worldwide exchange." bringing you business news from around the globe. and if you're just tuning in, thank you so much for joining us on "worldwide exchange." as you can see behind me, a green day for european stocks after what was a tough week for the eu. we're looking at the ftse 100 trade up 50 points. the xetra dax is up 58 points. today ecb's governing council member nowotny provided dubbish commentary, and that's why we could be seeing stocks in positive territory. france is up 25 points. and the italian market is seeing a triple-digit gain of 156
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points. but investors have been paying close attention to asia with a lot of volatility in some of the regions. taking a look at the nikkei index right now down just about 272 points or 1.6%. prime minister abe winning the election. the question is, can abenomics revive the japanese economy and how much of a time line will investors give him? we're looking at the index trade down and the set index, the thailand stock exchange has been seeing a little bit of a comeback today down as much as 7% at one point. but now it did trade down 2.4%. a lot of that having to do with energy stocks underperforming today. two of the biggest thailand oil companies make up about 10% of the thailand stock exchange. underperformance in the two names resulting in the set index underperforming in general. the shanghai composite up 15 points. so a bright spot in today's trade. wilfred? thank you, seema. let's get straight back to our top story this morning. we are nearly 12 hours into the hostage situation unfolding in
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sydney. australian police say there's much work to be done in the coming hours but offer no information on tactics or how many people are still being held captive by a lone gunman. the pictures recorded earlier show armed police officers outside the lindt cafe in the city's business district center. earlier the hostages were also seen holding a black jihadi flag against the shop window. cnbc's matt taylor will join us live from sydney with the latest in a couple minutes. we'll look at u.s. futures after a down week for u.s. stocks. we looked at the cbo volatility index gaining over 76% just in the past seven days. a lot of that having to do with a drop in the price of oil. remember, energy makes up 9% of the s&p 500. and energy stocks lost about 12% last week weighing on the s&p 500. right now the index indicating a move lower by around four points. the dow jones industrial bucking the downward trend up just about 106 points in pre-market trade with the nasdaq up 30 points.
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joining us to talk about the markets and what to expect is tim hayes. thank you so much for joining us. >> thank you. >> another big week for markets. the fed is widely expected to signal its course to raise rates next year do. you think we'll actually get that type of statement from the fed even though the price of coil continues to drop and that could slow inflation down even more? >> most likely we'll see the fed reaffirm the probability of the middle of next year. some type of rate increase. and really nothing has changed fundamentally in terms of the economic outlook for next year. in fact, anything in the oil price decline has improved things from the consumer standpoint. so i would see them reiterate that. >> and global equities have strong momentum behind them going into next year, particularly the first year on positive equities. >> that's right. we have an excellent buying opportunity. not only from the short-term standpoint, this tends to be in
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the mid-december -- oftentimes the market is week in the first half of december. and then you rally into the end of the year and into january. the first five months of next year look especially good for the market. so i think we're in a really good turning point right now for what could be a good rally amid second quarter of next year. >> the financial markets are spooked by the massive drop in the price of oil. if the price of oil continues to drop, will that derail the santa claus rally? >> i don't think -- i think at some point we'll see the market has gotten overly complacent and that is an excuse for people to position themselves and get out of their losing stocks. often you have a vacuum in mid-december with the january effects starting to pick up in areas that haven't done very well like small cap stocks and emerging markets could be an opportunity. people go and can buy them after selling their losers in the first half of the month to get into areas that might do better and the good values going into next year. >> tim, you say in your notes
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that yields will rise next year, but only a small amount. i suppose that sounds very similar to what people say at the back end of last year. so many people were wrong, so why do you think that will be the case next year? >> well, we actually think that global growth is going to come through at 3.6% next year. the imf is expecting 3.8% growth next year. we see a lot of good things in terms of the economic outlook to start to put a floor under both commodities and bond yields most likely. and that drives from the low yield levels. the real economic growth is going to come through to drive the market higher in the first half of next year. >> if growth is better than expected, that will drive them out of treasuries and into equities because the risk is gone. >> that's right. bond yields will gradually start to firm up. so we'll start to see bond yields move up and start to see bond prices move down, equities move up. but there's, from where we are right now, these are extremely low yield levels. the potential for yields is vast
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at this point. >> any advice for those screaming right now? >> i'm seeing the consumer discretionary break out since the october bottom of the market. keep an eye on the energy and materials. they have not sold off much. the first half of the year will be a broadening out. as the market realizes this is coming through, the narrow market is about health care and technology. we'll start to see other sectors take part and those are undervalued, especially energy again. it could start to surprise people on the upside going into next year. >> tim, thank you for joining us. much appreciated. tim hayes at ned davis research. sony is tuning out the noise from the recent hack attack. but is it too late? we'll have the latest from cnbc headquarters after this short break. we needed 30 new hires for our call center. i'm spending too much time hiring and not enough time in my kitchen.
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and christmas is just about ten days away, which means we are in the peak of the holiday shipping season. fedex says today will be their busiest day in the history of the company with, get this, 22.6 million shipments moving around the world. the united states postal service is also gearing up its busiest day of the year. the usps predicts it will
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process 640 million cards, letters and packages today. that's up significantly from 607 million last year. quickly take a look at the fedex shares up 23% this year. >> ten days until christmas, seema. isn't that exciting? >> so exciting. >> i can't wait. now, moving on, sony is playing damage control over the recent hack attack reporting news medias not to publish the leaked documents. let's go to landon with more. >> a you remember in of news organizations have been warned not to use any information revealed from last month's hacked not only does the permanent lawyer advice against leaking any information going forward, he said anything previously obtained should bedestroyed. you cannot view, upload, download or make any use of the information being released.
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among the information that he considers stolen are e-mails, social security numbers, health records, salary information and more. while the hack was initially reported 20 days ago, the new information is being discovered and reported every day and has provided a wealth of inspiration for media organizations. this continues to have an impact on angelina jolie, leonardo dicaprio, for example, and controversial e-mails say sony executives refer to angelina jolie as a spoiled brat. they defended the coverage of the hack to "the new york times" saying they only cover the very newsworthy documents. guardians of the piece behind the sony attack while the studio to pull its upcoming film "the interview" due out on christmas day. it features seth rogen and james franco on a mission to assassinate the leader of north korea. they promise the news media will get more information before the
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movie is released on the 25th. wilfred, back to you. >> landon, thank you very much. now, as we head to the break, here's a reminder of the headlines. australian police worked through the night to rescue hostages in the sydney cafe. and the u.s. november or thes are keeping their eye on the crude rebound. and petsmart is involved in the largest buyout takeover of the year.
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back to our top story this morning. we are nearly 12 hours into a who is tan situation unfolding in sydney, usaustralia. police say there's much work to be done, but there's no word on how many people are still being held captive. let's go to matt taylor live in
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sydney. matt? >> reporter: thank you for that. we are 12 hours away from the exact moment when that gunman entered that cafe building in central sydney. and he began what has unfolded for the following 12 hours. we know that five people have managed to emerge from that lindt cafe in martin place in central sydney. martin place, for those of you not familiar with it, is an area of the central business district that dissects the area east to west. and it houses big financial operations and institutions. the reserve bank of australia has its headquarter there is. a number of law firms and the u.s. consulate was evacuated shortly after this situation started to unfold. but the latest that we have from the police officials is that those five people have emerged.
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that's all that has emerged so far. the police commissioner saying that for tonight it will be the top priority to continue to try to have the other hostages that remain in the building removed safely. they will not comment on how many people are inside, but we are told it could be as many as 15 hostages still inside the building. the police commissioner also would not speak about any operational matters and wouldn't confirm if those that had managed to emerge from the building had either escaped or been released by the hostage takers. the police commissioner also not speculating on the motives of that person behind the incident. but take a listen to what some of the news the police commissioner had to say a short time ago. >> i'm sure there are many questions that you might have for us. and i'm not going to necessarily be in a position to give you that information because i will not be going into the tactics or the strategies that we're employing, suffice to say that we have large numbers of police.
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they are in contact and we're working to resolve this just as quickly as we possibly can. >> the police commissioner also speaking about these calls that have been coming in from hostages to a number of australian media outlets, television stages and radio stations, where the hostage taker has given lists of demands to these hostages to pass on to the media organizations, demanding an isil flag and also a phone call with the australian prime minister tony abbott. also, mentioning that explosives, two explosive devices are maybe in that cafe. and two other explosive devices may be elsewhere around the sydney central business district. but the police commissioner saying he's not concerned at the moment and neither are authorities about any other locations around the city.
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they are focused on the one area inside the cafe, around the immediate cafe vicinity. so going to, i guess, elate some fears that there may be other devices around the city. back to you. >> matt, thank you for that update. now we'll bring flashes out of belgium of another hostage situation that has taken place this morning. we've had news of this in the last 15 minutes of a hostage situation in belgium where manuel gonzalez's spokesperson for the local police confirmed to nbc news that four armed hostage takers walked into a small apartment building and they have taken a number of hostages. the police are trying to deal with the situation to confirm how many hostages have been taken so far. we'll bring you more news on that separate hostage situation in belgium as we get it. >> two separate situations and we should point out traders are citing that hostage situation in belgium for the reason we're looking at the belgian 20 index
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off the highs of the day up just 0.40%. we'll keep you updated on the two separate stories. in the meantime, this is what to watch this trading day in the u.s. at 8:30 a.m. we get december empire state survey numbers offering a read on manufacturing and hiring. then at 9:15 a.m., industrial production is released. finally at 10:00 a.m., the nahb housing index, which is out to give a check on home builder sentiment. we'll also give you a look at u.s. futures and how they are trading after what was a tough week for the u.s. markets. the volatility index gaining 76%. energy prices underperforming, weighing on the s&p 500. remember, energy makes up 9% of the s&p 500 index. right now we're looking at the dow jones industrial up 112 points in pre-market trade. nasdaq up 30 points. and keep in mind, the nasdaq 100 is set for a reshuffle next week. the exchange said late friday it will add this week american airlines, electronic arts and lam research to the index.
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in exchange, expedia, f-5 networks and maxin will be removed. others to look at include 21st century fox 8 shares, liberty global a and comcast a shares. comcast is the parent company of cnbc. we'll look at the european markets in the green today. the stoxx 600 is up. the ftse 100 is up .75%. france is up .75%. why is it up? well, oil prices rebound a bit today. last week we bounced back a bit. we also had statements out of the ecb member who said purchase bonds are possible if necessary. so we may get easing at some point in january. we'll also look at the oil price, which as i said rebounded a bit today. wti still below 60 at 58.2. brent is at 62.5 up 1% today
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after last week's sharp declines. opec has said that it will leave crude unchanged even if the oil price continues to drop for the united arab emirates and the group will keep the target of 30 million barrels per day unchanged if oil prices fall to as low as $40 per barrel. the secretary general defended the group's decision to main taint output levels and added that the group has not yet set a target for oil prices. joining us to discuss more on the markets is michael gerka, thank you for joining us. i want to kick off with the last week the worst for equities. if that's because of weak oil prices, surely that's a buying price for the market index. >> absolutely. i was looking at a longer-term chart, something dated more than three or four years down the road, but i've really put a lot of note here into this current 100-day moving average in the
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s&p. we are far away enough from the market right now to look as a great opportunity to start scaling in some new loans. the oil prices here are clearly in a situation where things are starting to look better for growth. and for those reasons, it is completely understandable why the ten-year treasury is trading at the yield price it is now. >> of course, the markets are seeing the worst decline since 2012. last week a lot of that predicated on the massive move we'll see with the price of oil moving 12.5%. the question is can equity rebound until the price of oil bottoms or will we actually see a rebound before that? >> i think we would get a rebound before that because the momentum, first of all, it's not going to stop -- >> michael, thank you very much for joining us. apologies, we have to jump in because of a bad line.
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michael gerka, founder and president of brew hill partners. now, of course, the oil prices we said have been declining sharply over the last week. and as oil prices continue to slide, enterprise product has abandoned plans for a pipe line that would have moved oil from north dakota to oklahoma. this decision comes as opec still has not announced plans to cut back on production creating a worldwide oversupply of oil. the company behind the project said in a statement the commitments from potential partners were not sufficient enough to support the pronlg. two of libya's key oil terminals have been closed due to clashes between armed factions supporting the country's two rival governments. a force measure has been declared as fighting disrupted half the crude export capacity. and wilfred, the drop in the price of oil last week didn't just impact equities but sent buyers into the treasury market. the decline to 2.1% yield is the swiftest weekly drop in terms of basis points since june of 2012.
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>> i think we should be looking at what the bond market has done over the last couple of weeks rather than specifically at the equity markets because it highlights the risk of sentiment we have had, a change from a couple weeks ago. in europe and japan you can point to the fact we have more easing as a good explanation for why yields are so low, but the ten-year in the u.s., this coalition is okay with bond yields, but we are down to 2.13%. as we look to next year, we are kind of where we were last year where people thought, surely they won't go lower, but would you bet against it with people ready to press the put top to print more money? >> look at the ten-year yielding near 0.024%. if you are looking for this trade specifically in the bond market, the u.s. ten-year level looks more attractive at these levels. >> absolutely. an interesting one on the european bond market trades, we might be expecting more quantitative easing, but countries like france are also
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below 1%. france has been trading over the last couple of weeks as a bit of a safehaven in europe, similar to the german trading. clearly its outlook is very different. so the yields are up credibly low. that suggest that is market investors are expecting in january the outright quantitative easing, which we're not certain to get yet. so there could be a little bit of disappointment next year. >> stay tuned later in the day as cnbc's brian sullivan will be speaking to bill gross exclus e exclusively in the first television interview since leaving pimco. that's live at 2:00 p.m. eastern time. it will be great to get hiss perspective on the bond market given the moves we have seen the last few weeks. >> no doubt, he's a global expert. stay tuned to cnbc as we continue to bring you live coverage from sydney where a hostage situation in a cafe continues. "squawk box" will be out to sydney at the beginning of the show. that's it for today's show on "worldwide exchange." i'm wilfred frost. >> i'm seema mody.
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next up is "squawk box."
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good morning. breaking overnight, a gunman is holding hostages in sydney in a chocolate shop in australia. and a global market watch after friday. stocks coming off the worst week in three years due to a drop in crude. now they are watching the big fed meeting this week. and the $8 billion buyout that we had word of coming. petsmart is going private. it's monday, december 15th, 2014. and "squawk box" begins right now.
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good morning, everyone. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernan as andrew ross-sorkin is off today. police are treating this siege as a hostage situation and negotiators made contact with the gunman. >> our plan and only goal tonight and for as long as this takes is to get those people that are currently caught in that building out of there safely. that remains our number one priority and nothing will change. >> we'll have a live report from the scene in just a minute. in the meantime, here are the other big stories we're watching. the fed is in focus as the central bank is widely expected to signal its easy money stance is coming to an end. and it is on track to start raising rates next year. many watchers think the fomc is

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