tv Worldwide Exchange CNBC October 19, 2015 5:00am-6:01am EDT
good monday morning. welcome to "worldwide exchange." >> it's not 7%, but it's better than expected. chinese growth slowing to a six-year low with premiere and president xi jinping blaming growing pains as he prepares for his first state visit to the u.k. shares in deutsche bank higher after ceo john cryan clears the decks with a radical plan to split it in two and shows executives the door.
>> sergio marchioni says he's confident in his pricing of ferrari's ipo between 48 and $52 a share. amazon goes after the fakers. they turn legal in its bid to crack down on fake reviews on its website. so here we are kicking off a new week. wall street, by the way, posting three straight weeks of gains. the implied open on this monday is going to be down. s&p 500 down, dow jones industrial down 23 points. the s&p 500 looking at marginal losses. losses priced at 1/3 of a point. the nasdaq is seeing gains of 6 points. let's get to it. the world's second largest economy, it's not 7% but it's 6.9% gdp growth in the third quarter. better than what economists had
forecast. the weakest reading in more than six years. however, the number was slightly better than what analysts had feared. when you drill down into the details, maybe it isn't that strong in china. >> exactly right. let's drill down now because a series of down beat underlying data has raised expectations of further support measures to prop up the country. factory output reported weaker than expected growth. fixed asset also came in below forecast but retail sales, that was a bright spot rising slightly above expectations in september. that's the outline. let's get the details. eunice is live for us in beijing. eunice. >> reporter: thanks so much, wilford. thanks so much, susan. the overall numbers and the take away is that there seems to be a belief that there's a growing disconnect between some of the data, the hard data, as well as the headline figure. the gdp came in at about 6.9%. this is, as you guys had said, the slowest that we've seen
since 2009. at the same time the way the leadership has been painting it is that this is still stable. the economy is still relatively strong and over the weekend we heard from the chinese premiere who said that it wasn't going to be easy for the country to reach its economic growth target for the year of about 7% but at the same time he did think and suggested that employment is still adequate, that the wage income is also at an appropriate level. so because of that this level of growth is acceptable. we heard something similar from the chinese president xi jinping who is now in the u.k. ready for a four-day visit. he said to reuters in a written interview that he understood that there were concerns about the chinese economy but at the same time believed that the economy or that the country would be able to weather through this downturn. the problem though is that there are more and more voices among economists from a wide range who
are getting increasingly concerned about the integrity of the gdp data. gdp data probably is the easiest to manipulate no matter what country you're in, but here in china there's concern that it's becoming increasingly political. it's a very high profile number and that the government is increasingly under pressure to deliver because they are measured by that economic growth number. so the more of a concern is that the more that they create the concern about the integrity of the data, the more they undermine their own credibility. >> yeah. so, eunice, that's right. the chinese economy has contributed to global growth. 1/3 of global growth for the last seven years. people are concerned that maybe the slowdown is a lot slower and steeper than what people had predicted. when you drill down, ubs is saying that the retail sector
and property is a huge portion. this could slow down the economy. they have to do something, the authorities, at this point. >> reporter: yeah. well, i think that one of the key take aways was that we are seeing an industrial slump. housing construction, which is a traditionally strong sector, is becoming more of a drag and also manufacturing is weighing on -- weighing on the overall economy. so that's what people are concerned about. they're seeing these headline numbers close to 7%. when they look at the industrial figures or other figures they just aren't convinced that there's quite a match and the other concern is that there is an expansion in services as well as evidence that i.t. or consumption is picking up, but the concern is that it's just not picking up fast enough in order to offset some of the slowdown that we're seeing in
industrial sectors. >> you're seeing that in the gdp deflator minus .7% which is a bit concerning. eunice, i'm going to let you go. joining us from the chinese capitol of beijing. head to our website as well where you can follow our live blog. this has real-time analysis, market reaction and more expert opinions for you right there on cnbc.com. speaking of expert opinion, let's bring in the ceo and founder of fifth street asset joining us around the london desk, len. good to see you. >> good to be here. >> we're looking at the numbers and doing the math. some of it doesn't equate. how do you get 6.9% gdp expansion when you have a negatiligenative gdp deflator. >> it's not possible. i'm there with my son max and looking at the empty areas.
we were talking to people. you have a tour guide earning $15,000 a year. i would translate that to pounds. not too much. he owns two apartments. he's losing money in the rents because the rents declining worse than his interest payment. 99% down. the empty amountpartments, the they pay them is in apartments. it makes no sense. the economy is built on a very precarious foundation. >> we had a recovery in the past few months but a big drag in the lower tier cities where you have a lot of empty apartments that you mentioned, a lot of empty buildings. that's god to come home to roost. >> really scary. you're seeing the decline of the dollar and some of the effects in terms of the hoarding of oil or natural resources. i'm not quite sure that this hasn't started to fakt the global economy already.
>> sounds like you're quite a significant china bear then. who is getting affected the most around the world? is it the ems? >> i think the whole world is very linked right now. i think the linking of the global economy was -- when china devalued our currency, i don't think it was really understood how linked we all are. and i think it will come out when the european banks, big global bank is all affected. one thing that comes out, they're investing around the world whether it's in raw materials or natural gas or transportation or whatever. that's affected by china. >> as i mentioned, china has accounted for 1/3 of global growth for the past seven years, but we should also point out that china's economy has doubled in the past six years. >> theoretically? >> meaning it hasn't really doubled? >> that's right. >> so what has it done?
>> nobody understands what the figures are. as you showed from that chart, right, you have two major parts of the figures that are down, one's down 10%, one's down 7 but magically retail makes up for the growth? 6.9, you know, when i was an analyst at merrill lynch years and years and years ago, we watched earnings. if they made earnings by the .1. we never believed that. 26.6 was 27. >> i'm going to argue that, you know, china's economy is now more than 50% services oriented. not manufacturing anymore. >> okay. >> why can't we look at retail sales and consumer spending? isn't this what we're moving towards? shift towards qualitative consumer spending rather than exporting manufacturing? >> i think china is rotating towards that economy. terrific growth in the middle class. so many people growth in the middle class can account for a lot of growth. so many of the u.s. companies and european companies are targeting that chinese company. you're right, it is an important factor. what i'll say about that is a
lot of that is driven by sentiment. it's down somewhat. it had risen. they saw asset values artificially rise. what happens when the stock market shocks in europe or the u.s. you have a sentiment change. could that change consumer behavior? >> len, stick with us. founder, ceo fifth street. let's talk about banks and one of the top stories this morning, a better controlled, lower cost and more focused bank. that is what deutsche bank ceo john cryan hopes to achieve after a radical overhaul of the bank's structure. he has now split the firm's investment banking business into two, global markets which will look after sales and trading activities and another for corporate transaction banking operations. >> now also host of new executives have been brought in by cryan to run the new businesses as he seeks to distance the bank from the faces associated with past
misdemeanors and poor performance. some of the changes are there. >> deutsche bank is not the only one making changes. investors in credit suisse are awaiting an overhaul which will come this wednesday. then it turns to numbers from barclays and the hunt for the new ceo. november gets going with results from hsbc and its reports it may not move its headquarters from the u.k. to hong kong after all. standard charter bank at third quarter numbers. scorecard comes out after hsbc. >> len, i want to bring you back in here on this conversation. you have a different view from the deutsche bank. do you think this is all driven by regulatory issues? >> unfortunately for us, we borrow almost half a billion from deutsche bank and half a billion from credit suisse. these are major partners of ours in terms of borrowing.
a reason why jpmorgan is lowering its assets, they're focusing on retail. deutsche bank is focused on that. credit suisse is the 21st, we hear the private client could be sold. that's going to be a major disconnect between the bank and the private client services. they have a very powerful private client division that also we rely on. >> great stuff. we'll have another chat with you after the break. >> do stay tuned. we'll have david from drexel hamilton. that's in around 15 minutes' time. morgan stanley reporting before the bell this morning. also coming up, "saturday night live", snl, makes a bold prediction about the outcome of the presidential race. >> i'm bernie sanders and come next november, i will be hillary clinton's vice president! i'm jerry bell the second.
and i'm jerry bell the third. i'm like a big bear and he's my little cub. this little guy is non-stop. he's always hanging out with his friends. you've got to be prepared to sit at the edge of your seat and be ready to get up. there's no "deep couch sitting." it's definitely not good for my back. this is the part i really don't like right here. (doorbell) what's that? a package! it's a swiffer wetjet. it almost feels like it's moving itself. this is kind of fun. that comes from my floor? eww! this is deep couch sitting. deep couch sitting!
you the s.e.c. has required a rules change for assets that could be liquidated without materially impacting pricing within a three-day period. for more on how this rule can impact mutual funds and etfs, let's bring back len. this is more targeted potential change on the asset management industry. is it a change you welcome or are critical of. >> they're defining what is liquidi liquidity. the markets are starting to adapt to that as well as risk retention in the clo business which is a whole nother topic. it's hitting at the same time. what it actually means or what i interpret it to mean is within a three-day period without it materially affecting the price you have to be able to sell an asset to call it liquid.
now we think that the assets, the bond market, which is bigger than the stock market could materially move if people had to sell. the question is what kind of asset. is it super big assets? is it medium-sized assets? what kind of assets do you have to hold in order to achieve liquidi liquidity. >> i'm trying to make sense what bond markets are telling us and what equity markets are telling us. the s&p is 5% away from all time highs. the ten-year yield is hovering barely above 2%. there's some sort of divergence here and i'm wondering who's telling the truth about what's actually happening in the global economy. >> the bigger divergence, you look at the hyg or high yield bond index which is hitting lows, hitting 92 down to 85ish. i think that that move is really bad. it indicates even though 25% is oil, i've said stay away from oil, that's been a big move of ours. maybe some is oil driven, some
is economy driven. the economy is totally manipulated. qe in europe and japan is 10 times bigger. all of that money goes somewhere. the u.s. economy is a great place to put it. >> we've seen the ten-year yield dip back to 2%, it's just above that again as rate hike expectations have been pushed back. >> sure. >> is the yield on the treasury market attractive given all the other concerns we've touched on? >> attractive relative to zero in the bank or attractive relative to what? i mean, attractive relative to government ten years in europe that are negative, which i still don't quite understand how that works in germany. >> a bull market? >> ours trades to spreads. we have leveraged loans. trades off of spreads to treasury so in effect we own or relative to the u.s. bond market but we don't think in the u.s. that 2%'s the real number.
fund managers think it's 3, 3.25. >> len, thanks very much for joining us. founder and ceo at fifth street asset management. still to come here on the show, driving in public. ferrari gets set to price its ipos. it accelerates towards the stock market. will it fetch the grand prix it's hoping for? want bladder leak underwear that moves like you do? try always discreet underwear and wiggle, giggle, swerve and curve. with soft dual leak guard barriers and a discreet fit that hugs your curves.
yeah, we're in the thick of it when it comes to earnings season in the u.s. and it's been a mixed bag of numbers so far for the u.s. lenders. jpmorgan, goldman sachs both disappointed as a tough market weighed on trading. citigroup and bank of america delivering strong profits on lower legal costs. meantime, wells fargo was the only bank to grow its top line as it looks to replace citigroup as the third biggest u.s. bank. expectations are pretty high for morgan stanley this morning which is set to report before the bell after a forecast topping quarter last period. so let's talk with david hilder, banking analyst from drexel hamilton from new york, new york. david, i think the consensus on 62 cents apiece on 8.5 billion for the three months. what are you looking for? >> i'm actually looking for 70 cents. i think that this quarter has shown a lot of strength in m and
a, merger and acquisition fees which are two of morgan stanley's franchise strength. >> i feel like morgan stanley is doing better than their peers, relative peers in this space, because last quarter they came out with some pretty good results and given that goldman has reported some -- you know, some problems in their trading business and then jpm also having the same problems, they won't escape that. given the shift towards private banking more from james gorman, maybe they'll put in a better report card. >> well, certainly it's important to remember that morgan stanley gets about 50% of its revenue from the wealth management side, the retail brokerage business, and that is a pretty steady performer. certainly on the top line and they've been increasing pretax margin. the bottom line should hold up very well. >> let's move the discussion on david to retail banking as well because as susan's pointed out,
investment banking, the likes of j.p. and goldman has been under pressure. what about the retail banking at the moment? is that the more sensible place to have exposure at the moment? >> well, i think actually it's very hard among the largest banks to have exposure only to retail banking because of the ones that you mention that reported last week including jpmorgan, wells fargo, bank of america, citigroup. they all have about a 50-50 mix between commercial or wholesale banking and retail banking. certainly in the retail sector you're seeing very good credit quality. you're seeing relatively strong loan growth or better loan growth than we've seen and, of course, that is a slightly more profitable business because of the slightly lower expense ratio than the institutional side. >> david, one more question for you. i know you cover u.s. banks. given your expertise when it comes to the banking sector, just wondering when you look at what's happening with deutsche bank today, this change in
strategy exit five executives, it doesn't come as a surprise to you, does it? >> no. i certainly -- deutsche bank has been signaling for a while that there are major structural changes ahead in their investment banking and commercial banking businesses. i think the real surprise over the last year has been that in the wholesale businesses globally the u.s. competitors have shown up very well. jpmorgan, goldman sachs, morgan stanley, citigroup, bank of america, merrill lynch are all showing better revenue and profit numbers than their major european competitors, which as you noted will report over the next few weeks, including not only deutsche bank but barclays, credit suisse and uvs. i think it's actually great for the u.s. banks that they have had to deal earlier with tougher capital environments and some of those things are issues that the european banks are now just really facing in a very serious way. >> david, thank you so much for getting up so early.
david hilder, drexel hamilton. >> happy to do it. ferrari has lined up at the starting grid of its eagerly anticipated ipo. sergio march marchionne is speaking. nancy joins us on the set. >> we know the range for the price of the share has been 48 to 52. ferrari is valued at 10 billion. so at this level that would be very good news for the fiat chrysler ceo mr. marchionne. what we've heard from various banking people is demand is strong. it was shouted about the road show last week. we could see this move higher. mar marchionne was saying ferrari is
recession proof. there is a lot of excitement. we have to encourage caution as well given that this is a very flashy ipo. >> recession proof for cars that could cost up to $2 million? >> you can outfit up with your special requirements. >> exactly. >> of course, there's this whole issue of increasing demand in asia and china. we have seen luxury cars be mute. something to keep in mind. >> nancy, thank you so much. we're going to get a break. coming up next, we'll take a look at the race for the white house. arguing republicans, bush and trump go head to head over 9/11. we'll get you more in top politics right after this. re eah 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,
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welcome to "worldwide exchange." i'm susan li. >> i'm wilford frost. here are your headlines from around the world. china, it's not 7% but it's better than expected. chinese growth slowing to a six-year low with president xi jinping blaming growing pains as he prepares for his first state visit to the u.k. snars deutsche bank higher after ceo john cryan scleers the decks with a radical plan to split the bank in two and shows executives the door. sergio marchionne says he's
confident of the ipo as they're expected to be priced 48 to $52 a piece. >> amazon is going to crack down on fake reviews on its website. good monday morning, everybody. if you're just tuning in, thank you for joining us on the program. let's check in on markets. we're on a three-week winning streak. all three benchmarks have been up the last three weeks. quietly the s&p 500 is now 5% away from all-time highs once again. the implied open futures are telling us are going to be lower for the s&p 500, maybe down by 1/3 of 1%. that's a flat start. the dow jones industrials should be down by 31 points below fair value and the nasdaq called higher by 2.5 points. here's a lead from the european
markets. looking at an up and up day after better than expected china gdp 234u78s for the third quarter. the span anything ibex up and the xetra dax and the ftse mib is up. we had a bit of a management reshuffle and a bit of a strategy there for germany's largest lender. wolf? >> thanks, susan. donald trump and jeb bush continued to spar over whether bush's brother, former president george w. bush, carried some blame for the 9/11 attacks. nbc's kristen welker reports. >> trillion dollars. >> reporter: the war of words between donald trump and jeb bush is heating up today. trump using 9/11 and the former president george w. bush to again jab at jeb. >> i don't want jeb bush to say my brother kept us safe because september 11th was one of the worst days in the history of this country. >> look, my brother responded to
a crisis and he did it as you would hope a president would do. united the country. >> reporter: the fight got started friday when trump threw the first punch. >> when you talk about george bush, i mean, say what you want, the world trade center came down during his time. >> hold on. that -- you can't blame george bush for that. >> he was president, okay? don't blame him or don't blame him, but he was president. >> reporter: today the front-runner seemed to double down arguing his immigration policies would have prevented the attack. >> i believe that if i were running things i doubt those families would have -- i doubt that those people would have been in the country. >> reporter: but bush hit back. >> it looks as though he's an actor playing the role of the candidate. mr. trump talks about things as know he's still on "the apprentice." >> reporter: characteristically trump wanted the last word tweeting, jeb, why did your brother attack and destabilize the middle east by attacking iraq when there were no weapons of mass destruction?
bad info? this dust up comes as polls show trump still leads but dr. ben carson is catching up. trump gets 24% of republican primary voters while carson gets 23. will trump's comments be the controversy that resonates? >> he can say things that would get any other politician or a regular politician in a lot of trouble and yet it doesn't seem to affect him. >> reporter: meanwhile for democrats and front-runner hillary clinton it's a waiting game to see if vice president joe biden will enter the race. saturday night biden accepted a human rights award in new york where he made no mention of the topic on everyone's mind, even as some audience members shouted, run, joe, run. biden did praise his late son beau who had urged him to run for president. >> as my son beau used to say, just keep moving forward. >> reporter: tonight the vice president headed to mass in delaware, perhaps looking for guidance. there have been a number of
signs that biden is leaning towards yes. he's reaching out to key constituents, organizers and union leaders to assess his level of support. sources close to him say a decision is imminent, but if he wants to get in, he has to announce soon. >> meantime, the race for the white house also went to "saturday night live." the opening sketch comedian larry david probably best known for his off beat hbo sitcom "curb your enthusiasm," also one of the co-creators of "seinfeld" is earning rave reviews for his spot on impersonation of democratic presidential candidate bernie sanders on snl. take a look. >> we're doomed! we need a revolution. millions of people on the streets and we've got to do something, and we've got to do it now! ah. i'm bernie sanders, and come next november i will be hillary clinton's vice president! >> classic.
okay. let's bring in ben white now. ben white chief correspondent joining us from cnbc headquarters. ben, that was hilarious, of course. >> you can't make me follow larry david. >> when bernie sanders was asked about larry david, he said larry david probably does a better impersonation of bernie sanders than i do, don't you think? >> he's brilliant. i was tweeting it during the debate when bernie sanders was getting pretty, you know, agitated. larry david does a better bernie sanders than bernie sanders does. it was brilliant. >> alec baldwin was pretty good i thought as jim webb. >> he was pretty good. where's my time? give me my time. very good. >> i don't have any answers. ben, let's talk seriously though. i think the wild card -- >> sure. >> -- is right now about vice president joe biden, whether or not he's going to step into the race. he's talking to his constituents, thinking about it. ultimately what do you think he's going to decide to do? >> that's the toughest call in
politics. i think he wants to do it. every move suggests he's going to do it feeling out potential operatives in iowa. talking about what strategy would be like in the early states whether he could overcome hillary clinton. could something intervene in the next few days? he would have a long road. hillary clinton remains dominant front-runner despite the early polls showing bernie sanders up in newm hampshire and iowa. he has to decide whether he has the fire in belly. right now i think it's a likely yes that he runs for president. >> do you think if he announces he'd immediately see a poll boost or where the polls show at the moment they assume he'll be standing i.e., hillary is very much the front-runner? >> yeah, i think you will see relatively quick poll boost. he's a popular vice president. a lot of people like joe biden a lot. he's a natural politician. i think he'll fall quickly at
least into third behind sanders and clinton and depending how he fares early on he could be right up there near the top. i think it will be hard to knock off hillary clinton. the other question is can joe biden put the money together required to run a race for president against hillary? she has $33 million in the bank at this point. he's going to have to raise a lot of money. not always been his strong point with big donors. he has a lot of the big donors locked up. he will be in the mix. if he runs, he'll be an alternative. i don't think he'll win. obama coalition will certainly give him a strong look. he's a legitimate strong contender. i don't think ultimately he gets the nomination. >> ben, let's switch focus and talk about the republicans as well. more developments over the weekend, trump clashing with bush again on foreign policy. how's that resonating with voters? because on the face of it it feels like trump is really going close to the wire with what he's
saying. >> he's gone close to the wire, over the wire. it doesn't seem to matter for him. but, you know, saying that he would have prevented 9/11 through his immigrationsounds re and it is. it's brilliant politics by trump because what are we talking about, we're talking about george w. bush, talking about the past, talking about the famous last name. one of jeb bush's big draw backs is that people associate him with the bush dynasty. his brother's more popular now than he was in office. still, people don't look that fondly on the bush years so now we're in a news cycle where it's all about the bush name and bush past. that's all because of trump and what he said and forcing jeb to respond. he couldn't leave it hanging out there but now he's stuck talking about this. the last thing on earth he wants to talk about it. it's absurd some of the things trump is saying about george w.
bush and what he could have done in 9/11. in terms of political strategy it was ingenius. >> i was wondering why he was going after jeb when he's neck in neck with ben carson? >> i think his thought process is that ultimately long term jeb is a bigger concern than ben carson. he looks at jeb's war chest, the amount of money he has. the thinking that when we get into the actual voting, primaries and caucuses jeb might be a bigger challenge. plus, i think he likes ben carson. carson doesn't go after him. jeb bush goes after him repeatedly and as we've seen from jeb's persona and tweets. he doesn't like that. trump will respond. it's not about the politics, it's his own personal affront from jeb. he's going to go on the attack to anybody who attacks him. >> ben, i know it's early there. do you have a bernie sanders
impress? >> i'm worried we're going to get attacked. i'm going to go crazy right now. i can find the goose. where is the goose? i'll find the goose. >> where did the goose come in? >> hillary clinton said -- she said, you know, there's no golden goose, you know, that, you know, if sanders is trying to find the golden goose. i'm chicken and i'll do. he said, and if there is a golden goose, i'll find them. they hang out by the ponds. >> i like that impersonation. ben, you're a trooper. let's talk sports. you can't stop dale murphy. you can only hope to contain him. the new york mets second baseman homered for the fourth straight game and he powered the mets within two wins of going to the world series. cubs ace jake arrieta allowing four runs in only fivenings. let's turn our attention to
the nfl, new england patriots and indianapolis colts met for the first time since deflategate. patriots came out on top trailing by 1 at halftime. tom brady found tight end rob gronkowski for a 25-yard touchdown pass and the lead. patriots running back also legarrette blount rushing for 91 yards and a score as the pats advanced to a 5-0 record for the first time since 2007. still to come here on "worldwide exchange", amazon goes after the fakers. find out why the tech titan is going legal in its battle to preserve integrity. we're back in a couple of minutes.
all righty. so the counterfeit claims are still dogging alibaba shares and they're fighting pretty hard lobbying the u.s. trade representatives office to stay off the black list on the so-called markets list because they've received a few complaints that alibaba continues to sell counter fit goods on their website. whether it's the b2b side alibaba.com or taubau. alibaba shares for the week is actually up 2.5%. will, i have to say alibaba made a smart move because they're bidding 3.6 billion for the china youtube that they don't own. in some ways that's consumer
play because it's streaming and it's video watching and you get it on the young millennials. >> gets them away from the core marketplace business, doesn't it? >> let's transition from alibaba trying to fight counterfeit goods and amazon trying to fight counterfeit reviews. landon is live from cnbc hq. >> good morning, wilford. the biggest week of earnings for technology companies. first up today, ibm, the blue chip company reports after the close. they are expected to post a marginal decline. pricing pressures will weigh on top line growth. signs of ibm declining down by double digits. yahoo!, microsoft, alphabet formerly known as google, yahoo! expected to report its numbers tomorrow. the street estimating it will earn 16 cents a share on $1 billion in revenue.
yahoo! stock has been on a tear over the past few weeks. we'll hear from internet giants amazon and alphabet on thursday. investors will be watching how global head winds from china are affecting business. the company behind windows reports thursday. microsoft is seeing its stock rallying over the past month is expected to earn 58 cents a share on $20.8 billion in revenue. of course, investors hoping that this latest batch of earnings will provide clues into the extent of the u.s. economy's soft patch. back over to you. >> landon, thank you so much. landon dowdy there on cnbc headquarters. china's gdp hitting a six-year low. asian markets are shaking it all off. deutsche bank has a shakeup. ferrari gets set to go public. it hits a price at 48 to $52 apiece. opportunities aren't always obvious.
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one of our top stories this morning, economic growth in the world's second largest economy. it's not 7% but 6.9% in the third quarter. still better than what economists were looking for calling for 6.8% gdp expansion. that's the weakest read we've seen in six years. you have to go back to 2009 during the global financial crisis. 6.9% sounds pretty good. when you break it down into the individual economic gauges it also paints a slowing picture of china. a series of downbeat data really has raised expectations that maybe we're going to get more support for the central authority. the central bank tries to prop up the economy. factory output posted a weaker than expected number. fixed asset investment which some say has been driving the chinese economy also coming in below forecast. retail sales a bit of a bright spot here rising slightly above
expectations in september of 10% or so. will. susan, let's have a look at european trade. in the green for continental europe although the ftse 100 is just below flat. germany leading the charge as you can see up .85%. that's partly because shares in deutsche bank are trading higher this morning in a positive reaction to a major structural reorganization. you can see up 3.76%. ceo john cryan has announced plans for the investment bank to be split in two. one for corporate finance and the other for global sales. it's unveiled a major reshuffling with a raft of departures and new rivals. karen joins us around the desk and has been following the story closely. quite a lot of changes here? >> yes. he's not worried about making those changes. he had the kitchen sinking change. what we saw overnight, not a big surprise but it's certainly bearing his stamp he could
argue. cryan has delivered. that's what a lot of people are saying this morning. a lot of people who worked on the old guard, on the old strategy, they have been let go. so that includes the co-head of the investment banking unit. we know that the investment bank has been split in two. the trading activities will now be a stand alone business. there's bits of speculation of whether this was done to make it easier for deutsche bank to sell that business. the longer term question is how does this bank get back to profitability? what is going to be the size of the job cuts, the cost-cutting exercises. 3.5 billion euros in the next couple of years. how exactly is that going to be done? we'll get more details next week. >> despite investment banking being split in two it still remains a core part of it. >> it does, but they want to be less risky. they want to be less capital intensive. we know that some of the trading operations have taken up a lot of capital so they do need to
reduce that. >> karen, thank you very much for that. let's check in on u.s. futures and what they're expecting for the monday open. we are kicking off a new week. the s&p 500 is 5% away from all-time highs again. the implied open is telling us the low fair value for the s&p and the dow jones industrials. s&p 500 down by 2%. dow jones down 25 points. nasdaq higher start of close to 4%. let's get to chicago. ben lichtenstein, we're close to the all-time highs again. three street weeks of gains for wall street. >> we are as you mentioned slightly lower at this moment headed into the open here this morning, but holding up the levels that we saw on thursday and friday. very much bid-type activity closing out the day both thursday and friday. we have yet to reject the levels. the one thing to keep an eye on again is price activity.
it's reminiscent of what we've seen in 2015 rather than the last weeks with the late day rallies. a lot of earnings this week. i think people will be focused on the bigger names like apple. the other thing to keep an eye on is the russell which has been lagging. still unable to get above 9.17 2015 highs. unable to get above 17% september highs. russell needs to get up above the 11.90 level. still around 11.60. the s&ps, dow and nasdaq have been very strong and have yet to reject the upper levels. >> ben, what's driving the october rebound? earnings haven't been fantastic so far. we've got some big names to come this week as well. why so much positivity over the last couple of weeks? >> well, we've seen a little bit of a weaker dollar which has been kind of give and take a little bit because the dollar's been somewhat mimicking the stock indices futures product. as we've seen a bit of a rally come back into play, the dollar
has seen a big comeback in the play. overall the dollar has been a bit weak recently. i think that's attributed. i think a lot is technically related. we're testing an upper extreme of the balance. the balance has been forming the value area, the sideways consolidation trade that's been forming below the september 17 highs. up above the august 24th lows. right now we're testing at upper level. this is key trade above a significant level doesn't mean as much as migration of value. >> quickly, i'm just wondering how is wall street going to digest the china gdp numbers which came in faster and better than expected? by the way, shanghai has recovered some 15% from the august lows. >> well, we seem to be seeing that bad news is good news type response in terms of wall street and price activity. we saw a significant amount last week and i think that as long as stocks or investors in stocks
feel that the interest rates are not going to rise at any time in the near future, which doesn't seem to be the case right now. i think we'll see that come into play in the price activity hold upper levels. >> ben, thank you so much. president of tradersought yes.com. >> that's it for today's show. flown by as ever. thank you so much for joining us throughout. i'm wilford frost. >> do we have to go? >> we do otherwise we'll get in trouble. >> i'm susan li. next up, "squawk box" is coming your way. sure, tv has evolved over the years.
good morning, china economic slowdown. growth slipping below 7% for the first time since the financial crisis. those gdp figures didn't top expectations, but what are the real numbers? what do we really believe about china's gdp? and a financial shakeup, deutsche bank restructuring its business and removing top executives. and rumor has it, social media buzzing about adele. this morning after the british pop sensation teases her first album in more than four years. has it been four years? who is this person? >> we love her. >> oh, come on.
>> it's october 19th, 2015, and "squawk box" begins right now. ♪ ♪ >> announcer: live from new york where business never sleeps, this is "squawk box." good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. if you're just waking up, we want to get you up to speed. the u.s. equities. dow futures indicated down by 27 points. s&p futures down by 2.5. the nasdaq looks like it is slightly higher up by 3 points. corporate earnings are likely to dominate the trading week ahead. on the calendar, morgan stanley, halliburton. and this afternoon we'll be