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tv   Worldwide Exchange  CNBC  October 16, 2015 5:00am-6:01am EDT

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thank goodness it's friday folks. hello and welcome to worldwide exchange. i'm susan li. >> i'm wilfred frost. here are your headlines from around the world. >> investors turning sour on nestle. the swiss food giant cuts it's full year outlook. we'll be hearing from the ceo in over a half hours time. >> hugo boss shares sink almost 10% as they say asia business momentum has deteriorated and cuts it's guidance for the year. >> auto makers lifting car sales
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in europe but the impact of vw's emissions scandal has yet to read through. >> could the dream house be haunted? weak sales of barbie dolls weigh on mattels earnings missing forecasts in the third quarter. okay. let's check in on u.s. futures since we're coming off a pretty strong rally yesterday. the s&p at its highest now in two months so the implied open is telling us that we're above fair value. we're up some four points when markets kick off. the dow jones industrials looking at gains of 26 points or so. the nasdaq pricing in advance of 13 points. let's bring it back to the markets and we have a bit of a theme going on. >> we do, indeed. the theme is a negative one coming from china which is taking it's toll on earnings for various companies this quarter. let's kick off with nestle which
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cut it's full year outlook in part because of weakness in china which the ceo describes as a mixed bag. nestle shares are off 2%. hugo boss is off 10%. it stunned investors by cutting sales and profit targets on weakness in the country. the german fashion house said business momentum in asia deteriorated considerably in the third quarter. now carrefour has also been effected by weakness in china. however a recovery helped offset significant weakness overall and we're looking at shares performing nicely despite the softness in china. they're up 4.9%. now plunging chinese steel demand weighed on rio tinto but it's on track to meet it's full year target. they're up 0.4%. >> let's talk about china. how worried should the corporate
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world be about slowing china right now? we'll get numbers on monday october 19th. this is what investors priced in to show the world's second largest economy is slowing down to below 7%. that's the first time we'll get a gdp print below 7 since the global financial crisis in 2009. economists are hooking for a 6.7% read but then china's own statistics bureau says a number as low as 6.5% would still fall within it's expected range since they said they are targeting gdp of around 7% in 2015 but most economists think we'll be at 6.8 this year which would be by the way the slowest expansion in a quarter of a century. so back 25 years and then for next year, economists priced in 6.5% expansion and, you know, this is, i guess, this is hurting a lot of corporates from all different sectors. from commodities to fashion
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houses to consumer brands like nestle. >> absolutely right. that's an important point to focus on. their low end retail relatively speaking and the likes of hugo boss and burberry effected as well. the reason overall we do a much better fall than people are expecting is this is coming when we're expecting gdp to be at 6.7 or 6.8. this is the kind of difficulty that companies face when we're still in a high growth environment. so there are inefficiencies in corporates in china and there's a point where it's binary. we don't just see profits drop by 1% in line with gdp growth dropping by 1%. you get a much bigger fall in profitability and companies in china. >> i just want to remind everybody. we have seen this economic slow down coming for awhile. this, by the way, was started by the chinese government. trying to shift away from an
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export lead, manufacturing low grade economy to something more qualitative and more disperse for the rest of the country. we saw this coming. i don't know if there's certain factors that shocked the market more. like for instance this anticorruption crack down that the chinese president has embarked on and that hurt a lot of casino names. for instance, in new york let's take a look at shares in wynn resorts tumbling after the close. this follows angry comments from steve wynn that's not known to minut mince his words. quarterly revenues sliding some 38%. he said that bureaucrats were making it difficult to plan ahead. >> it's become a major issue in macau as to the impact of government policy on planning for employment, promotions, hiring, and compensation. none of us are really clear on
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what our environment is going to be like going forward and it makes planning and adjusting almost a mystical process. >> schlumberger is hinting more cost cutting measures could be ahead after beating estimates. the world's number one oil services provider says any rebound in drilling activity will take longer than expected. it cut 20,000 workers. it and it's competitors have been hit hard by slumping oil prices. >> things are not all that great in the doll house. weak barbie sales. missing on the top and bottom lines. mattel has been trying to revival barbie sales as electronic toys and tablets are grabbing market share. the company also says a strong dollar and weak sales in it's monster high business have also hurt it's profits. i'm not so familiar with monster
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high but i don't think you're contributing enough to mattel's bottom line. what tow think? >> i'm not i'm afraid to say. no longer. grown out of it. used to be the top of my shopping basket every single time. but no more. now let's also now give you a run down of what to watch this trading day state side. we'll get numbers from general electric and honeywell before the market open. meanwhile aerospace contractor honeywell is expected to come in at $1.55 a share and revenue. u.s. consumer sentiment due to be released this morning and the labor department will deliver the jobs opening and labor turnover survey. still to come here on worldwide exchange, we get first on an interview with the ceo of nestle as the stock sinks to the bottom of the stoxx 600 on a disappointing outlook.
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stay tuned for that. we're coming back in a couple of minutes. need to hire fast? go to and post your job to over one hundred of the web's leading job boards with a single click. then simply select the best candidates from one easy to review list. and now you can use zip recruiter for free. go to try align for a non-stop,ive sweet-treat-goodness hold-onto-your-tiara, kind-of-day. live 24/7 with 24/7 digestive support. try align, the undisputed #1 ge recommended probiotic.
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hugo boss shares seeing one of the worst days in years. trading sharply lower after cutting it's full year profit and sales forecast. that's due to the on going china
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slow down. the u.s. fashion house reporting negative sales. down 1% along with an 8% drop when it comes to core profit. a slew of investment banks downgraded their ratings on the stock this morning and we're still lower by 10.5% and they were looking for expansion of 3 to 5% this year. they had to trail that back from estimates and the u.s. isn't really performing for them as well, what they're calling negative developments. they haven't elaborated. >> we have to add to that. we have been talking about the china theme and various earnings this week and morning as well. we have to add the fact that they slighted the u.s. this is a big share reaction. we don't want to attribute it all to the china slow down. it's important. the weaker u.s. sales is relevant. that's something we have to focus on this week. it had a big effect on the market and the dow. hugo boss a different end of the consumer spectrum to warm up. things aren't that pretty in
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terms of u.s. retail sales. >> but u.s. side is saying weaker tourist sales that they get when the overseas travellers from asia and emerging markets travel to the u.s. maybe to save from the hux luxu factors at home. and the strong u.s. dollar. that's all swirling on the bottom line but again, it's not just hugo boss. burberry reported this week. having some problems. lvma shutting stores in china now. it's a tough environment for the luxury retailers. >> let's transition and chat about the u.s. retail environment. so we started earnings seasons. it hasn't started that well across the spectrum. retail sales themselves report. the dow coming off the back of that. this earnings season is such a crucial one. yes we had a few corrections but we've seen a rally in the start of october. if we get a disappointing
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earnings season it will be another factor that weighs on the fed and investor sentiment and leaves us thinking we had a six year rally. is this justified? >> we're looking at the first back to back negative earnings quarter for u.s. names since 2009. this quarter part of me eps is forecast to be down some 5% coming off the .7% decline we saw in the previous quarter. >> we'll come back to that in a bit. let's get back to nestle after nine months sales missed expectations amid a slow down in china. the parent company said sit also impacted by the maggi noodles recall in india. shares are trading at the bottom of the stoxx 600. we're off 2.2% as things stand. let's go out to carolyn. she joins us live from switzerland and is joined by the ceo. carolyn. >> good morning to you. i'm very glad to have with me the ceo of nestle.
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thank you for taking the time this morning. always a pleasure speaking with you. there's a couple of one off factors relating to india and rebates in the u.s. but still the third quarter organic growth we saw for you was the slowest since 2009. how disappointing is that? >> i'm an ambitious because. i'm disappointed because they oversh ov overshadow good things. you saw that europe continued going very well. health science, north america is coming back strongly. and also latin america and so that and all the categories. we saw a little pit of softer recovery. recovery still but softener china but that's going to come back. i'm actually quite confident. >> is there a sense though that maybe in the second quarter of this year when you spoke to analysts that maybe you were a little bit optimistic when it comes to the return of maggi
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noodles in india that you were a little pit too optimistic about the recovery in china. >> we will have it a little bit stronger. but it's actually going further down. you're part of that. no excuse but you're part of that. india, maggi noodles and we have to say, we have been clean again and that has a major impact. i expect it to be back sooner but it's deeper and yeah, you have to work with the authorities and get it back on the job. that's what we do now. >> you say that you are seeing a recovery in china but it's slower than you have anticipated. have we hit the bottom in china when it comes to demand for your products. >> we are growing in china. so we are not hitting the bottom. we are growing. what we are talking about is the growth is a little bit slower. and not even in all categories. e business almost doubling this
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year. coffee, nest cafe growing almost double digits. our joint venture we have going well again and taking some callers back. do we get double digits? i don't think that was when we had that. we don't have double digits but we are starting to have good growth on a bigger base. as a country, so i am confident and optimistic for china but we should not be spoiled by double digits always. >> how much visibility do you have for china though? how many unforseen factors could you run into in how difficult is it to foresee how your business is going to pan out over the next six to nine months. >> you see china, it's a continent. so there's many factors where they do believe we have the fundamental structure strength of our portfolios there. we have a food innovation pipeline for us to really make it work. >> today you lowered your outlook for this year to 4.5%. to a lot of people that came as
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a little bit of a disappointment because many people are very familiar with the long-term nestle model of 5.6% and the question is whether that is still realistic. it came up a number of times during the press conference. what is your response. >> whatever you call it, it is a long-term ambition we have. and 4.5% is a sense of realism for what we had and it is part of that over time. we delivered over 6% of time and with many factors that are playing into it. so i'm still ambitious and i don't think it's wrong to have ambition. that's what came together for this year. >> so there's no plans to actually lower the long-term growth model from 5.6% to 4 to 5%? >> we're outgrowing the market and competition. that is what matters and that's our ambition.
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the line we put there is overtime. i don't have that nervousness of you failed. i don't feel 4.5% that would smell like failing. >> you've banked very heavy on emerging market growth over the last couple of years. you're hoping to reach 45% in terms of overall sales very, very soon. that has hit a little bit of a road block with the slow down we see in emerging markets and in china. do you still think that's realistic? that exposure to the emerging markets or do you feel like you have to tweak your strategy a little bit to adjust to the new normal? >> i don't think so. remember when the crisis hit and europe, north america stalled and oh, let's go to the markets now and china was still double tijt and now we say no. we said no. we said we're going to stay in europe and have to have growth in europe and north america. and we had issues but we never
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had no growth in europe and actually it's accelerating. why because we embrace and not only let go. that is going to play for us now. why? all the dynamics that we found to create growth inspite of all in europe for example is exactly these arguments that also are going to compound on growth and the developing markets so no we never said let's move on to the emerging markets, that's where the glory is going to be for the future, no, we said, growth should be all over the world. and we are seeing it. europe is growing fast. north america is back. >> but in north america you're seeing some pricing pressures. do you think once again that was just a one off. >> in north america, pricing pressures, we had pricing pressures, competitive environment is like that. what we have to to is operations and value for the consumer.
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it's not only price and cost but it's value creation. that's exactly what we have done. when he to reconnect with the consumer. the consumer has moved fast. it's all about organic and clean label and you go on. very valid argument. well, our wellness agenda are playing into that. we just had to connect it and i hope -- i'm confident that's exactly what's happening. it's reconnecting, growing double digits and pushing again this category. the best category to conserve nutrients and offer that is growing in. so looking forward. >> finally before i let you go, paul, you talked so much about portfolio optimization and what your company has done over the last one or two years is you divested a lot of smaller business. do you think with that disappointing third quarter growth that you're seeing that you have to accelerate that even further or take a different avenue? maybe be more opportunistic in
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m&a for example. >> you never have a yes or no answer for this. portfolio management or strengthening portfolio is the fundamental driving force of our successful future. but also taking care of what doesn't work and see opportunities to revert that or if you don't have a prospect of enjoyment in the future financially, well, then separation and that's what we have done. we have accelerated actually, we have many small things but 2.6 billion he equivalent sales has been sold off and yet at the same time we have ice cream and we don't sell it off. we have strong brands and so many arguments but we find a partner complimentary to our capabilities and that's otolaryngology creative way of going about it. i think in last years we have gone quite well about -- let's say, we mentioned 8 to 10% of the sales have to be looked
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after and fixed. well, we went through quite a bit of that if you include ice cream but that's not static. there's new opportunities we'll invest more. there's more fading and that's why the portfolio management, strength in portfolio is fundamental and permanent. >> always a pleasure speaking to you. thank you for your time. we talked about the businesses not performing so well and i hear that ice cream, all of that working really well, isn't it? >> so many things that are working so well. overshadowed by but that's how it is. >> thank you for your time. appreciate it. guys back over to you. >> thank you so much. let's check in on the headlines before we go to break. u.s. futures pointing higher with key markets set to hold on to yesterday's rally. european auto sales post their 25th consecutive month of gains. more cost cuts could be ahead for the company.
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a man traveling with a group of afghan refugees has been shot and killed by border guards in bulgaria. meanwhile, the eu has announced it will now offer turkey as much
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it's help to stem the flow from migrants at europe. let's get out to julia. she is live at the leaders summit in brussels. julia. >> thank you so much. that was the big news out of the summit. a deal with turkey try to stop the flow of migrants. housing 2 million syrian refugees. up to 350,000 headed to europe this year. just 50,000 were stopped at the border so it gives you the sense of the scale of the issue they're facing and the question is, and there's many ifs and buts will this curve the migrant flow. i'll put up my proposals in november so now we begin that countdown to the leader summit and perhaps clarity on both the rev y refugee crisis. >> thank you so much. julia on the ground at the
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summit in brussels. still to come on the program, first earnings since nelson peltz took a stake in ge. will it power up his portfolio? we'll discuss and we'll check in on futures as we saw the 217 point pump yesterday for the dow and today the implied open is going to be higher as well. j!
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happy friday. hello everybody and welcome to worldwide exchange. i'm susan li. >> here are your headlines from around the world. >> shares seeing red after the swiss food giant cuts it's full year outlook. the ceo tells cnbc he is staying positive on china. >> good growth on a bigger base. as a country and in that country. i'm confident and optimistic. should not be spoiled by double digit always. >> hits the wires before the
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bells. nelson peltz got into the stock. >> trouble in the doll house. could the dream house be haunted. weak sales weighing on mattel's earnings missing forecasts in the third quarter. >> a policy reversal from president obama as he announced troops will stay in afghanistan longer than expected. >> we are here at the end of a pretty long week. let's see how the markets are fairing after that 217 point rally yesterday for the dow. meantime the s&p is at its highest. we're going to be higher adding to the advance, the s&p 500 called up by 2.5 points. dow jones higher by 35 points and the nasdaq gaining 13.5 points. let's check in on european
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markets since this is the lead you're getting from europe on this friday to finish off this week and we snap a three day losing streak across the euro zone yesterday and as you see on this friday advances here. the swiss benchmark looking at gains of 3.25%. up by similar margins across the board today. the dax coming out of bear market territory and the ftse 100 up .6 or so. let's check in on political news first. >> susan, president obama has announced a slowing of the withdrawal of troops from afghanistan in a reversal his policy on the 14 yearlong conflict in the country. richard engle filed this report. >> it's a war that just won't end. after $14 years, a trillion dollars and american lives lost,
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the president said today the mission is still not over. >> i decided to maintain 9800 troops in afghanistan through most of next year, 2016. >> it meant going back on a promise made just last year. >> by the end of 2016 our military will draw down to a normal embassy presence in kabul with a security assistance component just as we have done in iraq. >> but iraq didn't workout either. the president had hoped to end both wars. he ended up sending thousands of troops back into iraq and said today thousands will remain in afghanistan. it's not what he wanted. >> i know that many of you have grown weary of this conflict. as you are well aware i do not support the idea of analyst war. >> the president planned to draw down forces from about 9800 to about 1,000 by the end of next year. under the new plan those 9800 will stay through next year and
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5,500 will stay after that too. >> so there you go. that report from nbc's chief foreign correspondent richard engle. another reversal from foreign policy promises that president obama made to get elected in 2008. he said he would with draw all troops from afghanistan and also in iraq by the end of 2017. here we are. we're keeping some 9800 troops still mostly in afghanistan in 2016 and already receiving criticism from the republicans saying 5500, 9800, that's not enough to defend. >> i think in terms of the reversal i don't think people are critical of that himself. it's just him being responsive to current situations. republicans saying more should be there. it's a shame they're still needed but as long as he's reacting to current situation i don't think any immediate criticism can be thrown. >> i think there is.
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obama has been criticized as one of the weakest u. s. presidents when it comes to foreign policy. the syrian red line which the president backed off on and this is one of his main foreign policy pillars in that 2008 campaign to get the white house saying he would take out all troops and looks like he hasn't been a strong president keeping and sticking to those campaign promises. >> what's interesting as well is foreign policy we seem to think certainly from a year out that's going to be a crucial factor given what's going on in the world, it always tends to go back to domestic policy. that seems to top the agenda. so we'll see. >> he also has a legacy issue. he's in his final 16 or 17 months in office and how does he want to be remembered as a u.s. president? >> i don't know but i tell you what, mr. president if you join
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susan and i on worldwide exchange you'll have a chance to tell us. we'll have to wait and see. 16 months to shape his legacy. >> let's move on then and get back to the markets and talk about general electric. in some ways they're changing direction and changing their legacy as well. ge is slimming down because we were considered one of the bell weathers for a look at the states and the u.s. economy but they have been slimming down when it comes to their financial arm and they'll report third quarter earnings before the bell today. this is the first earnings report for ge since activist investor nelson peltz made a $2.5 billion investment in the company. dean, good to have you on. from all accounts i see ge is expected to, i guess, put in much less of a performance than they saw a year ago. your expectation. >> sure, right now we're looking
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at 26 cents for the quarter. but the expectations and the focus really isn't on earnings this quarter. it's all the other changes that you were just mentioning. how they're slimming down and exiting most of ge capital. close to closing on the largest deal they have ever done. so the focus is on the change in the portfolio, far less on the actual cadence of near term earnings. >> let's talk about the transition that's going on more broadly in general electric. we're seeing the earnings shift away from the finance and i'm seeing them selling off more and more of that part of the business. do you think we'll get an update on that? the most recent of those sales was the biggest yet. >> that's exactly right. so the pace of the sale down out of ge capital did culminate this week in the sale of the big part of the commercial lending and
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la leasing portfolio to wells fargo so the update folks will be listening for today is where z does that stand? what multiples have they got for those sales and what is left in the portfolio that needs to be existed and what's that time frame. >> let's talk on the alstom merger as well. it does include various die vestments. do they take away from the attractiveness of the deal or is this still a deal you applaud and want to hear more about? >> that's what everyone was waiting for. the deal was delayed for additional review by the regulators. both the u.s. and the eu. everyone was holding their breath to see what would the concessions be. would those be deal breakers? and it turned out to be what we consider to be favorable for ge. very uneventful concessions. the idea of giving up some of
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the service contracts. it was less than 5% of the total service contracts. didn't change the economics whatsoever. it looked to be very favorable and uneventful and now it's full speed ahead on the closing of the deal. >> what about nelson peltz. he has a $2.5 billion investment in ge. he talked about basically driving up margins, cutting down on costs and he says do some financial engineering. borrow some $20 billion and buy back some of your shares. >> so if we roll the clock back to may, i actually interviewed nelson peltz at a big industrials conference and he said at the time he was targeting two industrial activist investments. one turned out to be pent air and the other turned out to be ge and you said he did invest
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$2.5 billion investment. about 1% of ge. the surprise for everyone including myself is how much nelson peltz is endorsing the ge transp transformation. he went point by point and basically put an exclamation mark next to each one of ge's initiatives. it adds an element of watchdog accountability. he's not asking for a board seat at this stage so as long as ge executes he would -- we expect nelson peltz's presence to be in that, what we categorize as constructive activism. >> let me just ask you about the future, that's my final question to you. he's been ge ceo since 2001. that's been 14 years. that's unheard of when it comes to corporate ceos in the u.s.
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do you think it's time for a change in direction? >> well, actually, if you go back to ge's history it's 123-year-old company. the average tenure for a ceo at ge -- and thomas edison was the founder of the company -- was 15 years. it's not unheard of. that's a very average tenure for a ge ceo. if you had to think about what is going on, the pace of change, my expectation is immelt will be guiding the firm through this period of transition and then might be interesting to talk about when that tenure might end post this transformation. is that a couple of years? three years? we don't know. it would be premature to talk about it today. >> thank you so much. diversified companies analyst at
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rbc. >> right. let's check in just on that european car sales data we got earlier today. it rose 9.8% in september. that's 25th consecutive month of gains. now german auto makers were leading the gains with strong demand from the likes of diamler bmw and volkswagen as well. it's here for you now. do bear in mind the storong performance is september sales. the story really only broke on the 21st, 22nd of september so the full impact of diesel gate not coming through the numbers. they were a bit stronger earlier in trade and they have given up some of the gains. volkswagen down at 1.10. >> when we come back, the mcmuffin is paying mcdividens.
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details coming your way next.
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suggesting that maybe their blood testing devices are inaccurate.
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speaking to mad money she disputed the allegations. >> in this case, it was pretty disappointing to see that after every single one of the sources that we spoke with who the journal had contacted told us that the statements that were being attributed to them were false or misleading and the only sources who were left were ones that wouldn't speak with us that on their own website say that they now do business with labcorp in their office or demanded in writing that we pay them in cash up front $2,500 an hour to talk to them about their statements to the journal. >> did the journal know everything you just said before they wrote their article? >> of course. absolutely. >> yeah. this is some controversy. this is considering one of the hottest start ups valued at $9 billion. elizabeth holmes owns half the company. considered one of the youngest billionaires on the planet and
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if there are all of these questions about the accuracy of their tests. that's all they do. 240 blood tests brings into question whether or not, just the legitimacy of this company. >> and caused a bit of an up roar. a strong fight back from her yesterday. so we'll have to see how that plays out. wow, 31 and he's worth $4.5 billion. >> still not bad. i've got ten months to catch up. let's see if that happens. >> get going. >> get going, indeed. it's a tale of two fast food companies today. from board changes to turn around plans. for all the details let's get out to landon. >> good morning to you. yum brands the company behind taco bell, kfc and pizza hut is making big changes. the fast food giant added the activist to the board. he is one of yum's largest investors holding a nearly 5% stake.
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outspoken activist is also in yum. shares jumped on the news after the closing bell even though yum also lowered guidance. the stock has been hit on concerns relating to china's economic slow down. the announcement comes as the company lowered it's earnings forecast and china shares this year. it will see flat to low single profit growth this year. the strong dollar is creating head winds and will take 1 to 2% from the earnings. mcdonald's saw it's stock touch an all time high yesterday. it happened after a report that it could make a move with it's massive real estate holdings. the fast food chain restructures and positive all daybreak fast lunch. investors are loving it. back to you. >> thank you and have a lovely weekend. >> thanks. >> loving it.
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i like that. let's talk about the world's largest package food company. it's trading close to the bottom of the european markets after cutting it's guidance. missing estimates due to a noodle recall in india but the company also taking a hit from under value kating due to an additional one off charge. the ceo said that the maggi noodles recall had a big effect on its india business. >> we always said the product was safe but that has a major impact and we never -- i expected to be back sooner but it's deeper and you have to work with the authorities. that's what we do now. >> seaworld is planning to challenge a ban on breeding k l killer whales. they voted to give seaworld a
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permit to build two large pools on the decision that it stop their breeding program. the company has been criticized over it's treatment of an malice at its parks. >> good friday morning, these are your headlines. u.s. futures are pointing higher with key markets set to hold on to yesterday's rally. hugo boss cut it's outlook after a poor set of sales and ge reports before the bell on the first set of earnings since nelson peltz got into the stock. before earning enough cash back from bank of america to take their act to the next level... before earning 1% cash back everywhere, every time... 2% back at the grocery store... and 3% back on gas... vince of the flying branzinos got a bankamericard cash rewards credit card, because he may earn his living jumping through hoops, but he'd rather not earn cash back that way. that's the spectacle of rewarding connections.
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they have been under fire for blooding the marketplace without a gambling license. rerepresentatives weren't available for comment. >> so, you know, i won a burrito for lunch today from our producer present with extra jalapenos because the mets beat the dodgers last night. the national league championship series is set. turner hit the home run and the mets sent the dodgers packing 3-2. jacob striking out 7 over six innings and this by the way is the first nlcs for the mets since 2006 when they also managed to defeat the dodgers back then. so some deja vu. it's only the middle of october but we may already have the catch of the year. take a look at this. stanford university quarterback looking deep for wide receiver who makes -- he makes the incredible catch around the ucla
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defender. maintaining possession of the ball as he fell to the ground and he had to wrap his hands around the defender. that's pretty good. >> that's incredible but that counts. >> that counts. you know, he hit the ground with the ball exact. >> i like that. nice bit of action ahead of the rugby quarterfinals this weekend. >> okay. we got to go and check in on u. s. futures. here's a look after that 217 point pop yesterday for the dow. we're going to be up 4 points. s&p dow higher by 31 and nasdaq gaining as well. let's get to the chief options strategist joining us from chicago and your read for the end of this week. >> well, i want to see some follow through on yesterday's action. we broke out above the september highs. i want to see good positive follow through but you can see as the markets are reacting it's important to focus on the price action. that's what i look at and we're
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getting positive follow through and a trap has been set for these shorts once again. it's deja vu. we bounce back and bounce back the distance of the sell off on top of the old highs. that looks at 2300 in the s&p. >> what do you make of the consumer sector given the numbers we saw from walmart this week and retail sales numbers as well. >> i don't think walmart is the barometer of the economy so much. what we have seen here with this consumer sentiment getting negative over the last month, you can view that as positive. as much as things change in august the fundamentals are solidly stable. you have low interest rates and inflation and low energy prices. those are a positive. now we're in the corporate earnings season and we'll see if that firms the market. we're right back to the bottom
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of the six month sideways channel we had in the s&p. so it looks like we recovered and have done pretty well so far. >> quickly, allen, let me just ask you about earnings. we're going to see 5% negative earnings growth. >> well, that's the set up. it has low expectations. you underpromise, overdeliver. we have done this quarter after quarter and the price action has been positive regardless of the news or noise the markets overcome all this negativity once again. >> same thing for last quarter as well. thank you so much. same thing last quarter. you set the barlow and makes it easier for companies to beat. >> we'll have to see whether that will be enough for the rest of the earnings season. that is it for today's show here on worldwide exchange. thanks for watching. >> next up, u.s. squawk box.
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good morning. we have a continuing global market rally. stocks jumping in asia overnight. green arrows across europe in early trading and u.s. futures adding to yesterday's big gains. but there's trouble in toy land. shares of mattel under pressure after sales of barbie dolls drop again and the activist appetite picking up some steam. yum brands appointing an investor to its board. the stock getting a pop on speculation it may spin off it's china business. a big loss for fantasy sports, nevada orders sites including
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fan duel and draft kings shutdown in that state. it's friday october 16th, 2015 and squawk box begins right now ♪ >> live from new york where business never sleeps this is squawk box. good morning and welcome to squawk box on cnbc. joe was mentioning the u.s. equity futures. take a look for yourself. you can see this morning we were looking at modest advances but this come after pretty big advances yesterday. the dow futures up by 28 points. the nasdaq up by 16 and the s&p up by four points. on the agenda earnings and economic data. dow component general electric is set to post quarterly results at this hour. then later this morning we'll be


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