Skip to main content

tv   Worldwide Exchange  CNBC  October 26, 2015 5:00am-6:01am EDT

5:00 am
session. lights out for the lumileds deal. they delay the sale of a $3.3 billion division. the ceo tells cnbc he's confident the transaction will still get done. >> still, we have to first close our lumileds deal. we see a little bit of a delay there in the regulatory approvals. >> apple starts taking online orders for the new tv. iphone sales could take the shine off of its earnings. >> ben carson overtakes donald trump for the first time in the republican presidential race while the democrats lose another candidate as lincoln chaffee drops out of the race. all right. we've got the german etho institute data coming out.
5:01 am
october current conditions comes in at 112.6. that is down from 114 last month. the expectations 103.8. that's fractionally above last month which was 103.3. let's have a look also for the other line of the data. 112.6. we've had that one. 103.8. so one of them fractionally better than expected. the other quite significantly lower than expected. euro dollar, 110.42. up 1/4 today. the main reason we've seen the euro soften over the last few trading sessions is because of the ecb rhetoric last week as opposed to this date this morning. 110.44 on the dollar. susan. >> good monday morning. kicking off a new trading week in the u.s. let's look ahead to u.s. futures and what they're implying for the open as we kick off the new week. coming off four street weeks of gains for u.s. markets. right now the implied open is telling us we'll be a little bit
5:02 am
lower, down below fair value. the implied value for s&p 500 is down 7 points and dow jones down 18 points and the tech heavy nasdaq crossed 5,000. looks like we are in for an 11 points decline. here's a lead we're getting from european markets. by the way, the german dax has put in the best months since 2011. this monday morning we're not seeing the follow through from that rally that we saw at the end of last week in the u.s. and through the asia pacific markets. today we're looking at some areas where the ftse 100 is down. pretty much flat. let's check in on the lead that we got from the asia pacific and what happened during the asia pacific last night which is on track, by the way, for the best month in 2009 since the global
5:03 am
financial crisis. we do expect the boj meeting this week which might include some more expansion when it comes to monetary stimulus. the first day of trade after the cut that we saw in interest rates and reserve requirements late on friday. i'll show you the asx 200 index didn't go anywhere. we showed movement. let's get to units. china's growth target never set in stone. the country's premiere leader said they never quoted to a 7% expansion. they will not defend it to the death. let's bring in eunice. since we are kicking off this five-year economic plan this week, what are we expecting? >> reporter: well, we could expect to see a lower growth target. the chinese communist party is meeting this week in order to
5:04 am
debate and set their economic and social agenda for the next five years. this is a very important meeting. it's going to last for days where they're going to be discussing a lot of important issues for the economy. now there's some concern that during this meeting because the -- because of the slowdown that the leadership here has been backtracking away from economic reform. so we're expecting to hear many of the leaders here to really reiterate for international investors as well as other investors domestically that they are, in fact, committed to structural reform. we're expecting to hear that there is a very important role for the markets here and another important point is that we're expecting that a new growth rate could be in the works. the current growth rate target for this year is around 7% and we've been hearing a lot of
5:05 am
expectation and speculation even among government researchers that that target could be guided down to 6.5%. susan. >> that's how they do it in china, right? all about central planning, five year plans, eunice. let's get back to that move on friday. we were thinking about it. why did they cut interest rates and reserve requirements heading into this week? it all makes sense now, to get them all set up for this economic planning meeting, eunice. but do you think it's going to do anything from what i understand, from what i see, interest rates and reserve requirements don't have that big of an effect anymore. >> reporter: well, the chinese premiere did come out on state radio and he actually said that the government was going to continue to make reasonable use, his words, of interest rate cuts as well as rrr cuts in order to support the economy. your point is very well taken about the interest rates. the economy here isn't as sensitive to interest rates as
5:06 am
they are to, say, the rrr cut which would affect the banks and allow more liquidity to get into the system. however, i think that it's very difficult to say what the motivations were behind the rate cuts on the interest rates as well as the rrr cuts. you could say that part of it is because the authorities didn't believe their own data. we see that for q3 the number came in at 6.9% which beat expectations. there are a lot of investors who are wondering if the number looked strong at 6.9%, why would the authorities come in with such an aggressive move. there are also people wondering if this is political, that the government because they were heading into this economic conference, that they wanted to be able to shore up the economy and make sure that it seems strong enough, you know, just because the eyes of investors are on the leadership here. >> they love doing it on a friday night or over the weekend, doing it once again.
5:07 am
thank you so much, eunice. >> reporter: very inconvenient for your social life on a friday. >> for you, yes, exactly, when you are having dinner, get the phone call. thank you, eunice. >> let's bring in miranda carter who's with us around the desk. she's a senior analyst. this latest stimulus from the pboc does in fact come after gdp numbers are on the up side. does it highlight that they're much more concerned about the underlying situation? >> for these it has helped the economy where you are having quite a lot of stress. the sectors like the steel industry, cement, glass, you're actually seeing quite a lot of pressure and in the northeastern areas where you're seeing quite a big slowdown. it really helps that. the other big thing that you need to support is the proxy market. if you saw proxy market continue to be celebrated potentially
5:08 am
fall in 2016, that's where you get basically the going forward recession, china dragging the rest of the world story from. whereas, if we get that to stabilize, which we did see some signs of in september, then we could actually sort of get a slightly better economic reading. >> is this a big enough move to stabilize the problem areas. it's a small movement but is it in fact a sign of things to come? >> our economic team in shanghai thinks there would be tufurthers cpi goes down. you could see further interest rate cuts. you're very likely to see bigger reserve requirement rate cuts. that's basically what counts. that's squeezing domestic money supply and so as they loosen up, you can get more funds into the system. the big thing, this is the thing that is doing the most to stimulate is the bond market. that's where you see -- after the stock market boom it's the bond market where all of the money is flowing into.
5:09 am
that's good for raising government funds. you're seeing a bit of a problem there as well. >> the bubble you're saying in china's bond market. >> you're looking at slightly doubling of the corporate bonds. you've seen very heavy government bond issues. the exchange market you're seeing very, very low yields come in. >> i would also argue that the bond markets must be domestically held in china. so what about i guess the equity markets? we've called that a bubble, too. there are bubbles everywhere in china. property bubbles. you name it. >> it depends where the money is flowing next. you saw all of the money flowing into the equity market, up 150%. we're getting that after it's gone down 40%, the money is going somewhere else. it could either go overseas or back into the proxy market. what we're seeing is a lot of the cost of the monetary easing. the lower interest rates, we're getting that and seeing that
5:10 am
going to the bond market. that's basically where the next if you like proxy market is developing. >> miranda, very quickly, the currency, anymore devaluation coming? >> the big thing is the sdr decision. they're very likely to get into the common reserve currency into september. this in some ways off sets it. they're calling it 5, 10% just in terms of overall devaluation. >> but you're getting interest rates and deposit rates. that's natural deflation pressure, isn't it? >> they're getting their currency and everyone who has to invest in the assets, particularly the foreign central banks reweighting into domestic government bonds. then you take a lot of that devaluation pressure out of the markets. >> okay. miranda, thank you so much. miranda carr, senior analyst at haitong securities. i'm going to recap some of
5:11 am
that data in germany. the headline numbers, 103.8. current conditions is 112.6, slightly below expectations. also some lines coming out of it relating to volkswagen. they say the volkswagen scandal has no impact on the german auto industry. they're saying that the business climate in the auto industry rose in october. still short term of course following the break in the scandal but that's the headlines coming out of the german ifo institute. 110.24. >> do you find that unbelievable that there is no impact on the auto industry from volkswagen given that they are the largest employer in germany? >> it's surprising particularly because it has forward-looking confidence implications this particular reading, it's not a backward looking data. we've had a good five or six weeks of the scandal to settle in. that's the headline. >> interesting. let's talk about apple because we have apple reporting
5:12 am
earnings this week along with 1/3 of the s&p. apple, of course, will be the big one beginning to accept now online orders for the new version of its apple tv today. the new device, apple tv, will start $15949. it will feature a faster processor. siri remote control and its own built-in app store. it's set to start shipping by the end of this week. shares of apple up this hour over the trade. there are growing concerns, though, when it comes to that report card slowing iphone sales could weigh on the tech titan's numbers. going to report after the bell tomorrow. apple, of course, is a huge component of the s&p and the dow. how they do usually carries along the rest of the benchmark. >> certainly does. let's talk philips. posted a negative bottom line number the same period last
5:13 am
year. the dutch con gom mer rant lumileds expresses concern over the transaction. we spoke to the ceo first on cnbc and asked him about his outlook on emerging markets demand. >> it will take some time, in my view, before the emerging markets are all back at their historical growth rates. we see the impact of the currency volatility. that's difficult to deal with. nevertheless, i'm pleased with the 22% results improvement despite the currency volatility. >> same with earnings. the world's largest advertiser wpp beat analyst's expectations by posting a third quarter like for like sales growth from 6% a year earlier. they were boosted by strength, they say, in the north american business. speaking first to cnbc, wpp's
5:14 am
ceo martin said he was confident about growth coming from emerging markets despite the emerging growth in china. >> we're looking for an improved fourth quarter. i remain an unabashed bull on china. >> antitrust regulators in australia have pushed back their decision until the 19 ths of november on the $70 billion shell takeover of bg group. this as the body weighed competition in the local gas market. in an exclusive interviewee asked the bg group ceo if the australian authorities aren't offering enough sympathy given the market pricing pressures. >> i cannot comment on the process in australia. it is sharing in that process. we expect that it can be closed early 2016. and it comes to corporations in the market, i think that also
5:15 am
crosses all operators and all service companies and technology companies because we have to deal with the fact that an industry that we need to provide energy more efficiently than we do today in order to develop good companies but also to provide the energy that the world needs decades into the future. we're going to go to break here on "worldwide exchange." our next guest is hoping to overstate uber. it will be a smooth ride? find out after the break.
5:16 am
5:17 am
5:18 am
well the come back. remind you of the headlines. china's stimulus fades. they're going to strike back in a conference call and apple tv goes on sales and it's concerns the tech titan's earnings could be hit by slower iphone sales. let's talk about u.s. politics. new iowa poll shows that ben carson now surging past donald trump in early voting. nanks part to support from a number of conservative christians. the latest polling results show that the retired neurosurgeon is now backed by 28% of likely
5:19 am
republican caucus participants. that's up 10 percentage points since late august. former front-runner donald trump saw his support fall four points at 19%. when it comes to the democratic race they will bid farewell to another candidate. lincoln chaffee announcing he will drop out of the primary race and end what many have called a long-shot bid for the white house. speaking at an annual democratic event in washington, d.c., chafee summed up the ultimate message behind hits campaign one more time. >> as you may know, i've been campaigning on a platform of prosperity through peace but after much thought i have decided to end my campaign for the president today. thank you. but i would like to take this opportunity one last time to advocate for a chance be given to peace. meantime, it's happy
5:20 am
birthday to hillary clinton. she turns 68 today. hillary clinton and rival bernie sanders giving duelling speeches at the jefferson jackson dinner in des moines, iowa. clinton took jabs on sanders about her shouting. hillary turned 68 today. she looks great, don't you think? >> she does, indeed. >> lovely. don't forget, we're just two days away, just two days away from the next republican presidential debate which you can catch right here on cnbc on october 28th. take place in boulder, colorado. but, you know, it's kind of reminiscent in 2012 when rick santorum took the early lead and faded towards the vote itself in the primaries. >> yeah. >> we had, of course, romney taking over. kind of similar, right? >> i think -- >> i think? >> on the republican side the fascinating thing is the way donald trump has opened it up for people other than bush because if we rewind sort of six or seven months, everyone almost
5:21 am
assumed almost as strongly as hillary clinton would be for the democrats that jeb bush would be for the republicans. he's changed the debate and ben carson now extraordinarily taking the lead. the favorite to the betting markets is, in fact, now marco rubio who's two to one to twin? -- win it. >> so rubio has surged forward. he would have thought jeb bush was a long way ahead of him. >> early bids because when it gets down to the voting, caucuses, primaries it's a whole different picture. it's interesting that donald trump seeing that he's behind ben carson, he's starting to attack ben carson. that was something he was loathe to do. he was going after jeb bush for most of the campaign. now he's calling ben carson low energy. light when it comes to immigration policy. looks like the gloves are on,
5:22 am
aren't they? >> indeed. more politics coming up during the show. i'm just going to come in and bring you some news on an earthquake that is a 7.7 magnitude. it struck in northern pakistan. it's shaken buildings as far wide as afghan capitol of kabul. also been felt in the indian capitol, new delhi, as well as in pakistan and islamabad. a 7.7 magnitude earthquake in that area striking in northern pakistan. we'll bring you more on that as and when we have it. let's get back to the markets and the trading day and give you a rundown of what to watch for on this monday. yes, we are kicking off the new week. we're going to get a read on the health of the services sector, services tmi purchasing managers index 9:45 eastern time. new home sales at 10:00 a.m. eastern. results on a latest dallas fed survey at 10:30 a.m.
5:23 am
on the earnings front we'll hear earnings report from xerox, cheesecake factory, first data and more. investors are gearing up for day one of the fmoc's two-day policy meeting which will kick off tomorrow. hello, watson. you can see now? i can recognize people, analyze images and watch movies. well i wrote a few books, did a speaking tour, i... i've been helping people plan for retirement. and i help doctors identify cancer treatments. is that all? i recently learned japanese... yeah, i was being sarcastic. i haven't learned sarcasm yet. i can help with that.
5:24 am
5:25 am
we've gotpeptocopter! ummy town. ♪ when cold cuts give your belly thunder, pink relief is the first responder, so you can be a business boy wonder! ♪ fix stomach trouble fast with pepto.
5:26 am
the new cab comparison app signs up private hire drivers through a proprietary platform. to tell us more about this exciting venture, we have the founder of car group. this is kind of different from uber. this is antiuber because you're signing up for taxi sources already out there. >> we are not anti-uber. karhoo brings together private higher cars and taxies empowering the consumers to make the choice, give them the ability to pick the car that they want at the price that they want and the brand that they want bringing together not only the big brands that everyone knows but your favorite local company as well. it's really exciting. >> brands like halo already allow you to hale a regular yellow cab in new york or a
5:27 am
black one in london. how is this different? >> well, by giving the consumer the choice of what ride they want, whether they want a licensed cab or one of new york's iconic yellow cabs, it's all about having the deepest amount of inventory giving the lowest estimated times of arrival that we're able to do in a very wide area across the city. our initial three launch markets are london, new york, singapore. we very much hope to start scaling our business from there very, very quickly. >> daniel, you're not in operation. you're saying you're in discussions to raise in excess of $3 million. where is this money coming from? >> we're very fortunate to have amazing supporters, both institutional and strategic. they believe in what we're doing. as such we're currently smashing our targets. it's truly an exciting time. >> uber has turned the market
5:28 am
over. i realize you can hale those types of services on the app. you have the investors. if things go well for you down the line you guys are making huge amounts of money and the drivers aren't, surely you'll create the same level of friction that uber is creating at the moment. >> we connect consumers with the biggest range of the incumbent fleet out there. this is not only fantastic for consumers empowering them with the choice but it's really, really good for drivers, too. allowing them to get more jobs through their central dispatch. >> daniel, thank you for joining us. much appreciated. >> we're going to take a look at futures trading ahead of the open on wall street. four straight weeks of gains. looks like the implied open will be a little bit lower. stay with us on "worldwide exchange."
5:29 am
5:30 am
5:31 am
good monday morning. hello, everyone. welcome to "worldwide exchange." i'm susan li. >> i'm wilford frost. here are your headlines around the world. the china stimulus effects fade. u.s. futures pointing down shrugging off asia's positive section. ben carson overtakes donald trump for the first time in the republican presidential race while the democrats lose another candidate as lincoln chafee drops out.
5:32 am
no more stalling. general motors strikes an 11th hour deal with the uaw union averting strike action just in the nick of time. apple starts taking online orders for its new tv amid concerns that slowing iphone sales could take the shine off earnings this week. hi, everyone. good monday morning. if you're just tuning in, thanks so much for joining us on the program. let's check in on markets and how they're fairing ahead of the u.s. open. four straight weeks of gains on wall street. the s&p is within 3% of the record high which we saw in may this year. also as you see the nasdaq up above 5,000 once again since late august. the implied open is telling us to give back a few of the gains we saw on friday. down some points. s&p 500 and dow jones industrial trading lower by 41 points.
5:33 am
nasdaq opening lower by around 11 points. here's a lead from the european session. had a pretty good week. all of that euphoria from the china stimulus effects fading as we kick off the trading week. the ftse mib and the german dax, which saw its best week since 2011 adding to the advance of this monday. here in the u.k. we're looking at declines also of 1/4. back to you. >> susan, thanks very much. let's just update people on the news of the earthquake that we've heard about in the last five or ten minutes. it's a magnitude 7.7 earthquake. it hear near afghanistan. it is being felt across the region in the capital of afghanistan, kabul, new delhi and islamabad in pakistan. it's a 7 point be point 7 magnitude earthquake that has
5:34 am
struck near jahm in afghanistan. north northeast of kabul. being felt around the region. let's move on. toyota has overtaken volkswagen. the japanese automaker saw almost 7.5 million vehicles between january and september. that's more than vw and general motors. >> gm striking a deal with uaw have reached a tentative agreement to avert a strike minutes before the proposed deadline. few details have been released. they have significant gains of job security protections. shares of gm at this hour turning in the futures market forcing a higher open. rallying at 1.5%. nancy has more on the last-minute deal. >> it came within 60 minutes of the deadline. that obviously suggests there were serious sticking points
5:35 am
here, but investors will welcome this mainly because the good news is gm has avoided a strike. given the timing, we heard gm settled. gm was very adamant they wanted to avoid a strike and move on. what we don't know are the exact details of the wage agreement. the uaw mentioned significant wage increases and agreements. one of the sticking points with the two-tier wage structure they were trying to work through, err bear in mind the union leaders have said we want more from gm. victim of their own success. if you take a look at the average u.s. labor costs you can see why gm would be working to keep the prices down. they've managed to keep them down to $55 an hour.
5:36 am
that's outpacing the rivals toyota and vw. >> nancy, thank you very much for that. investors are gearing up for the fomc's two-day meeting tomorrow. janet yellen is appearing to disagree with her opposition on the dove 4 scale. most other fed presidents seem to favor a 2015 rate rice. any position would be dated. let's discuss this further. joining us from europe is michael purvis, chief global strategist. michael, very good morning to you. thanks for joining us. in the last couple of days we've had very dovish tone out of the fomc. does that make it less likely that the fed itself will tighten because of what's happening in central banks around the world? >> absolutely. i think the ecb move, which was a strong one that we just saw, one of the most noticeable things of course was the impact on currencies. you know, janet yellen or her
5:37 am
colleagues won't necessarily, you know, directly and explicitly address that. the fed obviously doesn't have a dollar mandate but the impact of a very strong dollar not just on u.s. exports and so forth but also as sort of a tail risk for global markets and what i mean by that is, you know, emerging market fx getting beaten up too much by an ever growing dollar. yellen has to be very cognizant of the risk. the ecb is leading the stance here and in a sense, you know, really kind of almost helping define the next moves for the fed or lack thereof i should say which means that, you know, liftoff is a lot less imminent than it was even if some of the u.s. data might suggest that it would be happening in december. >> michael, we'll come to the
5:38 am
fed in full for a moment. let's cover the ecb. it was a surprisingly strong dovish rhetoric from mario draghi. do you think the rhetoric has justified it. some has been disappointing but not all the areas. >> well, it's really been a mixed response. i think mario draghi did point out that the loan growth has actually gone positive. it's accelerating but i think it's also a -- you know, a little bit of a reflection that, you know, inflation expectations have not really been that strong. realized inflation has been really pretty weak as we're seeing for most developed markets. you know, i think he's being proactive. september '16 is really not that far away all of a sudden. at the very least he has to start conditioning his constituents and the global markets for what that's likely
5:39 am
to be. i think he's got to consider how strong a euro does he want as well. some people refer to it as a currency war. i think it's an increasing trend of collective and interlocking central banking policies that are all erring on the defensive side. >> michael, speaking of currency wars. some would say that japan really kicked it all off. they have a central bank meeting this week where, you know, some people, i would say kind of 50-50 right now, they priced in more expansion there. >> yeah. well, i mean, i think as you said, the japanese have kind of broken the mold there. if you look at their -- the amount of the japanese central bank's balance sheet relative to gdp, they are about three times what the u.s. is and more than that where the ecb is right now. i think they're going to be the most predisposed to generally having a more dovish, you know,
5:40 am
and aggressive expansion. i'm not -- i'm not clear exactly how much they're going to do just this week or how much of a possible shift this week. i would say strategically as the ecb moves stronger, it puts that much pressure on the others to move stronger as well. >> michael, thank you for your time. let's get to politics and a new iowa poll shows that the neurosurge neurosurgeon, ben carson, has surged past donald trump in early voting thanks in part to support from a number of conservative christians. the latest polling results show the retired neurosurgeon is now back 28% of likely republican caucus participants. let's get to washington d.c. tracie potts from nbc news has more. tracie? >> reporter: hi there, susan. actually, we have a couple of polls in iowa showing ben carson ahead of ben carson.
5:41 am
the quinnipiac is showing him at 28%. 8 and 9 percentage points above, ahead of donald trump. trump is striking back as a result of that taking aim at carson saying he's weak on immigration, talking about trade saying he can't do as good of a job at negotiating trade with china and other nations as trump would do. even to some degree talking about his faith. you saw that over the weekend questioning carson's faith. carson's response to all of that. he says he's not going to get into the mud pit with donald trump and that's a quote. we're going to see a lot more of donald trump today. he's doing a live town hall in new hampshire where he'll be taking questions live on the spot from viewers, reporters, non-supporters on social media. nbc is involved in that. we're going to have an exclusive interview with him at that event, but it's interesting to see as the poll numbers for trump start to drop only in iowa right now, he definitely is looking backwards taking aim at
5:42 am
carson. >> calling him low energy, possibly lower energy than jeb bush. tracie potts in d.c. on the democratic side, democratic voters will bid farewell to another 2016 presidential candidate. former governor lincoln chafee reports he will drop out of the presidential race. chafee summed up the ultimate message behind his campaign one more time. >> now as you may know, i've been campaigning on a platform of prosperity through peace, but after much thought, i have decided to end my campaign to be president today. thank you. but i would like to take this opportunity one last time to advocate for a chance be given to peace. >> and don't forget we're now just two days away from the next republican presidential debate which you can watch right here
5:43 am
on cnbc. we'll be hosting the debate live from boulder, colorado. the debate will be moderated by john howard, becky quick and carl cantonea. exciting. when it comes to sports this week, we have the new york mets packing up and heading to kauchkansas city. a win for either side will end a three-decade wait as the mets last won in 1986 and the royals won back in 1985. game one's first pitch is on tuesday night, 8:00 p.m. eastern. meantime in the nfl, the jacksonville jaguars held on to beat the buffalo bills in the first nfl game ever to be streamed live on yahoo!. they held on for a three-point win the final score, 34-31. did i say that i've never seen so many excitable buffalo bills
5:44 am
fans outside of buffalo here in london. >> it's been a busy weekend of sport in the u.k. >> that was a great game. >> also the rugby. >> rugby, lots of football as well. lots of soccer, i should say, given that we discussed football. the grand prix state side. >> oh, yeah. three championships. >> three championships, two back to back and had a little bit of a wait between one and two. >> dominant. we're going to go to break here on "worldwide exchange." a juicy few days for apple. the new tv box out today. they'll start shipping. third quarter earnings tomorrow. what would be a shiny week for apple shareholders? 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.
5:45 am
this is kind of fun. that comes from my floor? eww! this is deep couch sitting. deep couch sitting!
5:46 am
5:47 am
good monday morning, everyone. coming off a pretty good week on wall street with all three benchmarks up 2% during the last five days of trade. nice way to kick off on this monday. i want to highlight what's happening with the nasdaq, above 5,000 for the first time in two months. thanks to all time highs with amazon, google's parent company and facebook. we'll see how sentiments holds up this week. >> absolutely right. all eyes, of course, susan on the biggest component of the dow is apple. let's go out to landon dowdy,
5:48 am
cnbc hq. the focus this week of course is on the tech giant. >> that's exactly right, wilford. hot stock to watch this morning. apple rolling out the latest high tech gadget. newest version of the apple tv will begin accepting online orders starting today. the new set top box will start at $149. faster processor, revamped touch pad and own built-in app store. the apple tv first debuted at the global wsjd conference in california. tim cook says it is slated to start shipping by the end of the week. while analysts aren't expecting them to have a near term financial impact, it could be a critically strategic story to watch and could be more crucial than the ipad. investors will be paying especially close attention to apple as the tech giant gears up to report fourth quarter earnings after the bell.
5:49 am
looking for earnings of $1.58. with the tech heavy nasdaq surging past its key 5,000 mark last week, a positive earnings surprise could push the index soaring to new heights. enjoying 12 straight quarters of beats on the bottom of line. the fourth quarter is typically one of apple's weakest of the year. ahead of earnings shares are trading lower. >> landon, thank you so much. now after coming under fire over questions about its accounting practices, valiant pharmaceuticals will respond to its accusers on a conference call set to take place at 8:00 a.m. eastern time. allegations are tied to valeant's partnerships with other companies. valeant shares falling as much as 40% on citron reports. bill ackman doubling down on the
5:50 am
holdings of valeant. that's the largest holding in the portfolio. u.s. headlines are pushing lower as china stimulus fades. and a 7.7 magnitude earthquake has hit northern pakistan with tremors felt as far as afghanistan in india. [ male announcer ] whether it takes 200,000 parts, ♪ 800,000 hours of supercomputing time,
5:51 am
3 million lines of code, 40,000 sets of eyes, or a million sleepless nights. whether it's building the world's most advanced satellite, the space station, or the next leap in unmanned systems. at boeing, one thing never changes. our passion to make it real. ♪ our passion to make it real. sometimes they just drop in. always obvious.
5:52 am
cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances. welcome back. let's have a look in on european markets. as you can see, mixed trade but leaning towards the negative side of things. it does, of course, follow two very strong days of trade late last week off the back of ecb's dovish tone. however, this is a slightly weak session given how strong it was in asian trade.
5:53 am
putting in perspective the gains we saw last week. >> the global stock market rally is losing steam. that's after the initial euphoria. reserve requirements on friday. checking out on u.s. futures, the implied open is down. the s&p 500, looks like we are lower by seven points. dow jones industrials pricing in implied open below fair value. we're losing 40 points. the nasdaq climbs above 5,000 for the first time in two months. the implied open is telling us we're down 11 points. let's give you a rundown of what to watch for as we are kicking off a new week on this monday. we're going to get a key read on the health of the services sector with the services pmi comes your way 9:40 a.m. eastern time. new home sales at 10:00 a.m. eastern and the results from the latest dallas fed survey comes your way at 10:30 a.m. on the earnings front hear from xerox, first data cheesecake factory and nova care.
5:54 am
investors gearing up with day one of the fmoc policy which will kick off tomorrow. joining us from the floor of the cme, michael, good monday to you. let's talk earnings sings i think we still have 1/3 of s&p components reporting this week. so far from what i see, it looks like it's the first time we've seen in tandem declines in sales and earnings since 2009. what does that tell us? >> tells me that there's a drag in corporate america and for the same reason it's about time that we start to see that differential. i think at least in the near term it's not going to be as depressing as maybe some had thought but as an earnings whole, at least percentagewise at the end of the day, i think there will be a lot of positive news that comes out of this and as expected they're probably buying out demand.
5:55 am
>> we saw a late rally. a decent week of returns for u.s. equities. has earnings really justified that? it's been mixed at best really, hasn't it? >> no, they haven't, but for those reasons i think technically the market sets up very positively. i think fundamentally not as much, but i'm not surprised. actually, i believe at least that you're going to see new highs in the stock market by the end of the year. i think you'll see the s&p above 2100 and as bullish as that sounds, i think last week's -- again, last week's action by china and the fed probably pushing any rate move out to next year is going to prove very positive for global stocks, mostly fuel here in the u.s. >> michael i assume that prediction is also predicated on more stimulus either on the ecb or bank of japan this week? >> absolutely. they can't stop because their big brother is showing them the way and i think right now markets have been so drenched
5:56 am
with that kind of news over the last 18 months it immediately gets factored into the market. it's the abrupt changes we see in the market which is one of the reasons why i'm extremely positive here in the u.s., not necessarily so much from the earnings standpoint, but i think technically the market is still looking like it's going to make a rise. michael, very quickly, not expecting anything from the fed this week then? >> no, i'm not. that changes my course from about 30 days ago where i thought it was going to be implementation time. one fast note, keep an eye on 243 in front month copper in the u.s. that rebound is showing us that the down side pessimism globally in the commodities complex is starting to dissipate. i think that's extremely important to me. >> michael, thanks so much for joining us. that's it for today's show. thanks so much for watching. i'm wilford frost. >> i'm susan li. u.s. squawk boo"squawk box" com
5:57 am
way next. (vo) what does the world run on? it runs on optimism. it's what sparks ideas. moves the world forward. invest with those who see the world as unstoppable. who have the curiosity to look beyond the expected and the conviction to be in it for the long term. oppenheimerfunds believes that's the right way to invest... this big, bold, beautiful world.
5:58 am
5:59 am
good morning. the markets are going to try to pick up where they left off. friday's rally fueled by major tech names. now the focus will turn to apple and another fed meeting. valeant pharmaceuticals under fire. about to hold a major conference call to refute the accounting practices. don't look now but your bacon is under attack along with some other delicious meats, both breakfast and otherwise. monday, october 26th, 2015, and "squawk box" begins right now.
6:00 am
>> 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. let's check out the markets this morning following the big friday rally. you can see this morning a very slight amount of give back with the dow futures down 39 points. s&p futures 5.5 and nasdaq down 11.5. the early trading in europe you'll see at this point it looks like the dax is higher. up by .3 of a percent. the other major indices are lower with the cac down to close to half a percent at this point. a big week for the markets and in politics. first, the earnings calendar. dozens more companies that are reporting this week including apple which will be released after the bell tomorrow. twitter, pfizer, murk, exxon mobil as well.


info Stream Only

Uploaded by TV Archive on