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tv   Worldwide Exchange  CNBC  October 3, 2012 4:00am-6:00am EDT

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welcome to "worldwide exchange." these are your headlines from around the world. president obama and mitt romney have jabbed at each other from afar for weeks, but now they get to do it face to face as they get set tonight for their first debate. slipping growth hits home in china's resilient services sector. and more signs of trouble for the spanish government as the latest figures show its corporate tax revenue has tumbled. mariano rajoy issues the latest
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denial that he's ready for a bailout. we now have the latest numbers crossing for the eurozone services pmi. the september final services read coming in at 46.1. an improvement that we have seen from the 46 number. this is still the lowest level we're seeing since 2009. the forward indication 49.4. in terms of what we're seeing on the final comp sit pmi, this is above the 45.9 read that we have, but just a fraction below what we saw in august, the rate was 46.3 then. this is the lowest read since may 2009.
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in terms of new business number for the composite september rate, 43.8. we're still right back at some of these 2009 lows. elsewhere, the numbers are not that much better. lisa has more on these numbers out of china. >> official data showed china services sector fell sharply in september to its lowest level in almost two years. it shows the rest of the economy has started to feel the effect from the sluggish manufacturing sector. if you look at the breakdown of the services pmi, the construction services sub index -- meanwhile, new orders were dragged lower by demand weakness for transportation. over in australia, a survey showed an even grimmer picture as its services index dipped to 41.9 in september.
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india reports its all important services pmi tomorrow, while hsbc is out next monday. that's all from me. >> thank you very much. coming up on today's show, we head to paris to find out more, the attempts to offload his unit. then to hong kong where we examine the political transition in china plagued by scandals and disappearances. we get an expert view on the new leadership change. and next, washington and its debate tonight as romney and obama finally square off. we'll have a preview of what to expect and what's at stake with our very own democrat-republican panel. and real estate is on the rise. we head to new york with founder barbara corcoran. mariano rajoy has denied reports
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that spain will request a bailout. the spanish prime minister joked that news agencies either knew more than he did or that they were, in fact, wrong. meanwhile, moody's rating agency said it will publish a review into spain's credit rating at some point this month. all spanish tax revenues have jumped significantly from precrisis levels due to a high incide incidents -- and seeking profits abroad as domestic demand wanes. just over $16.5 billion euros from corporate tax from the almost $45 billion collected in 2007. let's get out to julia in madrid. this was always going to be one of the challenges for the rajoy government to keep a handle on revenues as it tries to cut spending and increase taxes. >> reporter: absolutely. yes, he's announced the billions worth of austerity measures, but to some degree has tried to protect businesses. he understands the issue and the
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importance of the tax receipts. we're talking about an economy with a 25% unemployment rate, above 50% for young people. it's not easy for these businesses. you only have to look at the pmi readings that we've had this week, look back to the manufacturing one. it seems to be bouncing along the bottom within the details of that company. still cutting jobs. it continues the pressure on prime minister rajoy to say he needs help here. of course, he announced last night that there wasn't going to be an imminent bailout. we're back watching the markets. he threw the gauntlet down a couple weeks ago suggests that might be a way to see his hand forth, but now we're back to debating when and if this happens. i think where the market is concerned, it is a case of when, not if. we start to look back at
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potentially october 21st, the elections again. meeting the german prime minister, they are pointing out this is a regular meeting. i think irrespective of this bailout there's going to be plenty to discuss there. he's also just behind me, just went into the meeting this morning, he's presenting the details of the stress test to congress here. as you mentioned, moody's came out this week and said their adverse scenario could see actually the requirements for these banks needing to double the levels in that stress test, so again, perhaps, failing to draw a line in the crisis in the banking sector, too. so plenty of work for prime minister rajoy to do. back to you. >> we know there's been a number of attempts by the spanish government to try and bring integrity to the banking system, so it seems as though there's an
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enormous onus now on the spanish government to try and sell this at home. >> absolutely. they've made this point that $20 billion suggested in that oliver wineman report can be issued by the banks. said they were going to do a capital raise of their own, 2.5 billion euros. they would rather do it on their own, but the question is are they capable of doing that? >> julia, thank you very much for that. let's get up to speed now with european markets. this is the picture that we're looking at today. you can see from the heat map we are swamped with red in the early part of the session. we're off about .3 of a per cencen --
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percent. just pushing up about 11 points as we take a check of the markets. but across some of the other numbers, the market is staging a mild pull. so getting back some of the early gains. the ftse is down about .2 of a percent. let's move on to a couple of the top stocks to watch out there today. it's been a big day for the retailers in the uk. pointing to the global economic environment saying it's challenging and reported a drop in its first half net profit. it was really dragged down by some sluggish sales numbers. it's got a cost of one billion pounds. the company trying to fix its domestic operations, investing in stores, people and products. the online department has been a huge push. the contrast has been -- you can see the varying performances of
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these two stocks in the trading session today. its numberns coming in fairly well. this is the third biggest supermarket chain here in the uk. take a look at the spike in the airline. it's certainly making some strong inroads out there. raised its profit guidance. it's also reported a boost in strong demand from some of the european beach roots from london, so it's been using the flights to fly into some of those little nations. it seems as though the pursestrings for holiday travelers has certainly being loosened a little bit. let's take a look at what's playing out on debt markets today across the charts. you see prices are moving high. we're still seeing below the
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1.5% level. the constant question mark surrounding the official request for aid. but so far yield pressure is still okay. just drifting off that 5% level. across foreign exchange markets today, let's look at the flavor that we're seeing out there. a little bit of appetite still for the u.s. dollar. the trade for the australian dollar has been down since then. so it seems as though that might be a little bit broken. dollar-yen rates fairly stable for a couple days, but still we are seeing story up and down a tenth of a percent.
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euro/dollar -- 129 and a quarter is the handle. the golden week holiday has been impacting liquidity, although some people really take you off for some of those beach destinations. >> really a lackluster day of trade. the hang seng came back from holidays, to end marginally in the green. strength in defensive telecoms were partially offset due to falling oil prices. over in japan, the nikkei heat a three-week low as investors remained cautious ahead of the boj and ecb meetings, but the
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retailer rallied, because annual group sales could top nearly $1 billion. if so, it would be the first japanese retailer to ever reach that scale. over in australia, the asx 200 edged up to a 14-month high. minors slumped following a short rise in the trait deficit. india now higher by .2%. >> up next, uk drinks maker have been given an extinction to survive. that's up next.
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and now for a fluffy news story. we don't always get to do this. looking at pictures of cute animals may actually increase workers' concentration and productivity. that's according to researchers at the university of hiroshima. does your cute puppy or cat increase your productivity?
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if you want to join the conversation, get in touch with us by e-mail, via twitter, and i'm also on twitter as well. the french president is facing some pest problems. a small group of entrepreneurs are making headlines in france with the protest against a jump in capital gains tax, calling themselves the pigeons, that's french surveillance for the fall guys. their viral campaign has attracted thousands of followers on facebook and twitter. let's get out to stephane in paris who's been following the pigeons. always sounds more attractive in french. holland is facing no shortage against the tax rises. >> they are not really focusing on this new 75% tax, which is going to be implemented. they are focused on new tax, on capital gains basically, wants
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the capital gain to be taxed at the same level as salaries and that's the problem for young entrepreneurs because when you create a small company, you don't pay yourself a huge salary, and the only way to make money out of it, to be rewarded for your hard work is to resale your company some years later, if it's successful, of course. and in that case, if you sell your internet company for perhaps ten million euros, you will have to pay up to 60% in taxes. that's their own calculations. that's to compare with 32% right now. that's the reason why they've created this movement on the internet. 23,000 fans on facebook, more than 5,000 followers on twitter. i'm not sure they're going to convince the government, but at least they managed to put the debate on the table. >> thank you very much. elsewhere, ag bar has been ground an extension on their major talks. the u.s. takeover panel has given the two companies until the end of the month to decide on a potential 1.3 billion pound tie-up.
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meanwhile, another deadline also looms for eme capital. they have to make an offer for the high end jeweler by the end of today. meantime, the private equity sector has come under some skutny with accusations that the industry is sitting on cash rather than investing it. joining us now is simon perry, senior partner at inston young. a 13-figure sum. this is really referred to as -- need to energize off the sidelines and put into some sort of a vehicle. why to you think this hasn't been put to work just yet? >> i think the trillion number that's mentioned in the article you're referring to is not a number i recognize. i think the number is probably more like half that. >> so not $200 billion, you think it's about $100 billion? >> you mentioned the trillion, 200 of which relates to the 2007
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and 2008 funds. 2007 and 2008 were definitely peak years for dry powder. that's the committed funds that haven't yet been spent on new investments. but it's actually been falling since then. it's quite a complicated issue. there are a number of reasons why fans haven't been investing, but although investments were at a peak in 2007 and 2008, there have been substantial investments through the subsequent years. >> so if there is cash that some of these private equities firms are sitting on and it's not to the extent that you think it is, do you think the pace of acquisitions is going to be focused on big deals, so called elephant hunting, or do you think the focus is still smaller firms? >> i actually think it's both. you've got to look at both the u.s. and europe and asia as different markets. in the u.s., there's been much more debt available, so there's more active market generally and private equity's been able to do deals.
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in europe, debt is more constrained by some of the uncertainties around in the eurozone in particular, so the number of transactions in europe has been less. >> let me get to one story we're tracking for you. the oracle ceo says the software maker's growth will be driven by its lineup of cloud products. they haven't planning any near acquisitions in the near term. >> oracle is the only company in the world that innovates all three layers or develops, engineers and invests at all three layers of the cloud. we think it's very difficult for a niche provider. >> that's interesting, because it almost feels for a large company to go down the path of transformational acquisition, they put the company at enormous risk. doesn't it mean it leaves private equity with more room to pick and choose the assets they
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want? >> yes. i think one of the most interesting things about this post-wait period has been the lack of strategic transactions from large corporates. not least because they're sitting on very large cash piles. however, if you look at the uncertainty in gdp growth around europe, in particular, it's not surprising a chief executive is not going to risk transformational acquisition, transformational deal in this kind of environment. once we can see our way through eurozone crisis, then we can see perhaps a return to maybe pedestrian, but at least some growth in gdp. i think we could see a waiver of strategic deals. that presents a significant opportunity for private equity and having dry powder is going to be valuable for everybody because it's a very positive part of the modern economy. >> there's been so many challenges, too. i want to come to the strategy for private equity these days, because there was this really
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interesting change that took place in the crisis where getting access to cash was a lot more difficult for companies, so private equity almost didn't go down the traditional path of getting these vehicles, loading them up with debt and trying for a quick sale. they tried use that as part of the investment return. these days, the access to capital has become a lot easier for companies. the environment has also swung back a little bit towards the old hey day. does that mean the approach by private equity firms is also changing back to the more traditional mcdonald snell. >> no, i don't think so. i think the model is permanently changed. you can't buy cheap gear highly and sell deer anymore. they produce better performance, improve profits, expand the geographies that they work in and so on. so i think the model is permanently changed. the odd example of maybe pure engineering. i think fundamentally it's now
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about being good stewards of the businesses and improving them while you own them. >> appreciate your time. thank you so much for stopping by. the european banking authority will publish its final report on banks' implementation of capital plans at 1,700 cet today. this follows s a 2011 recommendation to restore market confidence. it will be published after the european markets close. joining us now is the head of the european interest rates strategy at barclays. nice to have you onboard with us today. this has been an ongoing theme, just how much capital banks need to raise to meet requirements. we're in an environment, though, where we want banks to be writing more loans to encourage growth across the eurozone, so do you think the capital buffers right now are appropriate for
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the conditions? >> i don't think it's as hot an issue as it was six or 12 months ago. i think most people would consider that there has been some rebuilding of capital, but in some way, it was linked to the stress test of last year, and that that is not actually the real problem. i think the main problem in terms of the landing is the demand, and as your previous guest said, the economic outlook, which doesn't really justify additional lending. i think what you are seeing is definitely deleveraging rather than building up of capital for the moment. >> the quality of assets is slightly different under the basel three category so. the result is that some of these banks are still likely to have to go to the market in coming months to raise capital what. do you make of the environment out there, and does this just
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destroy the investment case still around some of the european banks? >> right. i think a lot of this capital raising will actually -- especially on the basel tree, will come from risk assets rather than purely raising of new capital. i don't think that we expect, you know, a flood of new capital raising here by european banks. i think the capital and balance sheet and deleveraging topics will remain live. but, you know, it's going to be live for the next few years. >> how much clarity do you think we have in the banking system? because we had the results of the spanish order last week that have been presented to parliament today. we've got more eu stress tests coming up next but these tests have never really had the same appeal that the u.s. stress tests do.
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here it felt -- do you think we've got to the point where investors know what lies within if european system? >> you can do a lot of stress tests. the fact is that credibility has been impaired over the past few years, so there is always lingering doubts about the validity of these stress tests. for the past three, four years now, investors have been really peering over what banks' balance sheets are, where the risks are, and i think there's a higher level of knowledge about what is happening. in a way, you know, the issues will really turn about, more towards the asset sides and the deleveraging rather than the capital. >> what's your read on the regulation that's likely to come
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into force? also looking at whether there should be ring fencing around some of the training activities of banks. are we still in for a major change across the sector? >> i think there's a lot of these regulations, which are still a work in progress. people are preparing -- there is a lot of regulatory activity, whether it's dodd frank or the banking union developments in the euro area. we don't know really for sure how it's going to pan out, so a lot of banks are preparing for these new rules, but we know that the timetable on which they are being done can be slipping as well. and that the rules are not fully finalized. it does increase the uncertainty, but also in direct
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terms the willingness to land the economy. >> thank you so much for joining us this morning. let's just get up to speed on some of the moves that are taking place on foreign exchange markets. the dollar in particular, we had it falling to a three-week low a couple of hours ago. so it's lifted off those levels. in terms of some of the data we're looking at, the uk pmi numbers, showing that services on jobs for the first time since november 2011. we are seeing a turnaround that's occurred in recent months. the uk september composite pmi has dropped to 51.1 from the august reading of 52.2. so we're seeing an unwind in that number.
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the uk pmi is pointing -- this is according to market. as for the services read, let me bring you to that number. the september services pmi read 52.2 versus in august at 53.7. this is an unwind on the numbers that we've had earlier the month previous. it's not a great direction for services. potential indication of just some softening in the uk economy. don't forget all the reads we've had here in the uk have been somewhat surprising on the upside. these numbers a bit disappointing today. can i just revisit sterling there, 161.08. so you can see this sentiment is oscillating and a little bit weaker on the back of some of this news. stay tuned for annalysis of these figures. joining us soon is chris williamson. also still to come on this
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show, the date is set, will china's new leader reached bold new reforms or stick to the status quo? that's coming up next.
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you're watching "worldwide exchange," bringing you business news from around the globe. >> president obama and mitt
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romney have jabbed at each other from afar for weeks, but now they get to do it face to face as they get set for their first debate. slumping growth hits home in china. a sharp slowdown for services in the eurozone as well, france and spain the hardest hit in set. and more signs of trouble for the spanish government as the latest figures show its corporate tax revenue has tumbled. this as mariano rajoy signals he's ready for the latest bailout. let's recap on some of the european market action. we have been off to a weaker start here for the trading session. there's still some losses across the charts. the ftse is down about a tenth of a percent. the cac down about a quarter of
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a percent. the ibex just drifting lower. now it's time to give back some of these gains. across bond markets there hasn't been too much pressure on the periphery in terms of the yields. 5.76%. we were around the 5. % mark this morning. italy still fairly good, too. a little bit of a spread there still. but safety trade showing you that there's still fairly low yields on our firm. moving on to the foreign exchange markets. we have seen a little bit of movement in the sterling trade this morning after some of those softer services numbers coming out. some of the euro numbers haven't
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been that great. the australian dollar still heading backwards after the rba. practice time is over. tonight, president obama and mitt romney get to do it for real. the men will meet face to face in the first of three presidential debates in denver, colorado, at 9:00 p.m. eastern, so set your clocks. the latest nbc "wall street journal" poll shows the president still holds a narrow 49-46% lead over romney. some 40% of voters say the country is moving in the right direction, versus 53% saying it's on the wrong track. nearly 60% believe the u.s. economy is recovering. so you can tune in to cnbc's debate coverage tonight starting at 8:00 p.m. eastern as we get
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you set up for the debate. several top chinese banks have pulled a plug on a planned trip to tokyo. they were supposed to attend the imf's annual meetings next week. a small chinese company is up in arms with barack obama. rails corp is suing. the farms are located in oregon, in restricted air space used by the u.s. navy. they said the president acted unlawfully when he issued the order last friday. when geopolitical tensions and business wranglings with some of the u.s. are just some of the issues that china will have to grapple with. the 18th national congress is set to meet in november on november 8th to name china's new leadership team. but will the new group be able to strike a new tone with
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trading partners while reviving the economy? joining us now is the director of center on china's national relations. nice to have you onboard with us today. there's a lot resting on this transitional change in china, but the headlines coming up to this have not been so great. we've heard much in the way of political fallout. also some of the prints links. how do you think this is going to transpire come november? >> well, i think that they've put most of the events behind them. they've had the trials of his wife, the police chief, and they've announced that they'll have the trial before they go to the 18th party congress. so i think that will be behind. so that's not a big issue at this moment. >> you make the point that most new leadership groups in china have eventually led to major
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policy changes in the past, but what we know of this leadership is that they're trying to slow growth, chasing a quality growth over what we've seen in the past, but also inclusion by those that have been left out. do you think there's going to be any deviation from this policy objective in the upcoming years? >> well, i think there's a serious need to continue to deal with some of the people who were left out of the system. china is a kind of socialist country without socialism. a lot of big problems that people face sun employment, retirement, health care issues. those are all very big. so i think they've got to deal with that. they recognize that they need to change the nature of the manufacturing sector. they need to move to more innovation, rely less on exports. they know the problems.
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the real question is whether they can do anything about them in the immediate term. most of the leadership changes have taken least two or three years before they can get enough control over the economy, over the people around them to really make a big difference. if you look back -- in 1989, it took eight years to really show us what his views were. tao, it took him three, four years. some people think it could take this leadership a couple of years, but then again, they may be in a stronger position to change things relatively quickly. >> the struggle for power has been interesting to watch from some of the local newspapers, because there have been reports that tao has been keen to hold on to some of the power after he departs the top job. some of those generals have also not been successful so far in this lead-up to the change.
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do you think he will actually attempt to keep his finger on the pulse once he departs? >> the key question is whether he maintains position as the chairman of the military affairs commission. it gives him some leverage. but he lost a key battle just a little while ago, as your audience may know, there was a young man whose car crashed in beijing. he was half naked with two other almost naked women in his car, turns out he was the son of a key ally of tao, who was expected to run the central economy's general office, and that general office has always been a position of great authority, and now a person has been able to move in and take that over. so that could make it much more difficult for tao to affect the issues that people discuss. >> appreciate the time. thank you so much for joining us
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today. >> thank you for inviting me. >> hong kong university of science and technology. very much appreciate your thoughts. let's give you a look at what's on the agenda in asia tomorrow. japan central bank begins its two-day policy meeting. the boj is likely to stand pat this time around but may signal more stimulus on the 30th of october. elsewhere, india posed september services pmi following strong numbers in august and cnbc will have an exclusive interview with malaysia's prime minister, so be sure to tune in for that. back over this side of the world, business activity in the eurozone shows no sign of a rebound. the latest composite pmi figures for september fell to the low nest three years. france and spain saw a mild contraction as the country struggled with painful austerity measures. meanwhile, growth in britain's sector services slowed in september.
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services pmi fell to 52.2 last month down from a reading of 53.7 in august. joining us now discuss is chris williamson, chief economist at market. good to have you onboard. i want to start out with the uk numbers because we've seen some move in the sterling dollar. we're now at 161 and flat on the handle, so there has been a bit of a selloff on the back of this news. services are interesting, because in some ways they are linked to manufacturing. the read today, is this telling us that the uk economy is not as strong as some of the numbers have been suggesting? >> it's certainly looking that way. this is a really interesting number, i think, because we're beginning to move out of the noisy period. obviously have the disruptions due to the jubilee and the olympics, which caused huge variation in the gdp numbers and the surveys, so this really is quite a clean month to really take the temperature, and the signals are that growth is very weak. services sector is expanding,
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but it's a very modest pace. we're looking at over the course of perhaps a .2% increase in services. but don't forget, services is a large chunk of gdp. that bodes qwell. fortunately, we've got a small contraction in construction, so the uk economy is probably fairly stagnant in the third quarter, which is pretty much in line with what the survey was saying. that was out yesterday. as to what the gdp numbers will say, they could be completely different, so you could see a nice rebound in the gdp numbers from that .4% decline in the second quarter, coming up quite strongly in the third quarter. but the message is don't be fooled by that. the underlying trend is a weakening one. >> the key is looking forwart. if you look at some of the expectations about future business, the expectations index
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was rising to 67 from 66.5 in august. so this is a move higher. companies cautious about starting, which makes sense with those replacing those who are leaving. so is it that much of a bearish picture as we head towards christmas? >> i don't think there are signs here that things are collapsing. we're looking at a period of fairly modest, quite boring growth coming ahead. obviously there's be some volatility in the numbers. but the overall pictures looks to be a fairly flattish one. we had some strong retail sales data in the gdp. we saw incomes were rising at nearly 2% year on year, which is the fastest i think for four years. the consumer is coming to life. when inflation comes down, we
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will see consumers helping to void the economy, so that's probably where we'll get the growth. the risks are, of course, the eurozone. >> anecdotally, you know that retail is doing okay the uk when people are queueing up before it's opened. thank you for joining us this morning. still to come on the show, it's a matter of financial power for nuclear power. hopes of a nuclear renaissance in the uk fade as reports suggest a franco has not come true. but is there still reason to be optimistic? answers after the break.
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"the financial times" reports that it has walked away from the race, the latest setback to the uk government's hopes of ushering in a revival of nuclear power. joining us now is scott parker, director of uk nuclear energy sector. this franco chinese con sorpgs,
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talking about buying the verizon nuclear venture. where do you think this leaves the transaction? >> there are only two nuclear vendors that are approved for use in the uk and that's westing house and ariva. obviously one of those is no longer available. >> they are trying to maximize the proceeds, but if you knock out one of the key buyers, is it fair to say we're not going to get the top dollar for this asset if it is eventually sold? >> i'm not sure that's true. there are two other companies that are interested. the disadvantage is they haven't got their reaction or the technologies approved, so if they do buy the nuclear company, there will be a delay of another two or three years before they could start construction on site. >> let's just delve into some of the regulatory hurdles because the chinese obviously have the cash to buy these types of assets. what hurdles do they face
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investing in the key strategic assets in the uk? >> if the westinghouse china state nuclear power company consortium is successful, they will have it approved by the end of the year. >> i want to ask you a broader question about the nuclear space because it was something that impacted nuclear policy for several months anyway, at least. the fukushima disaster saw the japanese peel back from pushing further with nuclear power. but at the december ritriment o position. should they be looking at other forms of clean energy? >> it's the right answer for the whole global power sector. it is important that we get back on track with the nuclear program. there's a number of reasons for that. firstly, the european large combustion directive means that
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we will be having to close down a number of our large power stations over the next couple of years, and our existing nuclear fleet is quite old, and most of those reactors will close over the next ten years. it will be some pressure on the uk power sector as a result. >> what's the tone across europe when it comes to nuclear power? because the government changes took the shine off the sector. we know it's a very expensive industry that requires a lot of capital at the early phase. do you think the investment banks are willing to run the ticket on this because of the dynamics that play out in the sector? >> there is a bit of concern there with funding. but at the end of day, across europe, we're committed to reducing our carbon generating capacity, and the only way we can do that is through the construction of low carbon generating power stations and nuclear is one of those solutions. >> thank you very much for
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joining us today, scott parker on set with us today. a move to raise cash and reduce a debt pile, the spanish telecomgiant says it has not decided what percent of capital it will float, but it does plan a controlling stake in the company. telecom has confirmed it's in discussions to combine with smaller rival metro pcs. deutsche telecom could come a step closer to exiting the market. they moved to call speculation saying significant issues were still outstanding and a deal was far from certain. joining us now is the principal analyst, nice to have you onboard with us today. deutsche telecom has been trying to off load t-mobile for a while now through the at&t deal that
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didn't go through because of regulators. is this a still closer to exit or is it about a big investor? >> it's about juggling the options in the market. t-mobile's parameter problem is they don't have the scale that the likes of at&t and verizon wireless have, so everything they've been trying to do is to overcome that disadvantage. so imagine with metro pcs, it doesn't give them that scale, but it gives them time to actually rethink the opposition in the market and consider and prepare themselves for the exit. >> so this could be somewhat of a warm-up deal. but the competition is left in the space, because t-mobile, if it still goes through, will have the greatest scale to take on the likes of verizon and at&t. >> it would have been if metro pcs was big enough. but combining the two companies
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together is only going to give them about 13% market share. at&t is 30%. verizon wireless is 32%. sprint is 16%. 13% is still not enough to compete with the likes of verizon. but if the combined metro pcs unit was to along the way eventually find a way to resolve the technologies and come together to combine the future, then we are looking at a potential big top player in the u.s. market, but that's highly spec speculative. >> telecoms are tied to this whole smart phone revolution, and the latest to come to the market was apple with the new apple 5 device. verizon stock on the first day when this was announced hit the market, it also spiked because of its lt network. where does this lead to mobile anyway? isn't it at the wrong end of the spectrum because it's not offering the apple device?
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>> that's unfortunately the position it's found itself. t-mobile still has opportunities to go in the market, but it's got to invest. a plausible opportunity to gain competitive advantage. possibly they don't visit. so that's why they continue to seek solutions in the marketplace. that's why they are looking at metro pcs, who already have investments in the u.s. but metro pcs comes with low quality customer base. that doesn't necessarily give some gigantic boost in the market, so we'll have to watch it and see how it develops. >> we haven't had a listing here in europe for a while to speak of really, and it's going to be -- plans on listing its german unit on the frankfurt market sometime before christmas to raise cash and try and cut some of its debt.
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how much appetite do you think there will be? because it seems as though utilities has been attracting the defense of safe haven trade for some investors, who are scared about what's playing out here in europe. >> at the end of the day, despite all of the smart phones and everything, telecom still boils down to customer service. it means good cash flow. that's the attraction of the telephone maker. they are trying to balance the portfolio. the disadvantage is having the spanish market. whether that's a game changer for them, i don't think so. this is just about trying to shift around their assets and their resources around to see if they can be able to boost, improve their performance in spain. >> appreciate your time today. thank you for talking with us.
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we're going to go for a break, but coming up, we talk currencies with a guest who thinks the spanish request will trig aeropositive reaction in the euro. but it will be short lived. stay tuned to find out more.
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welcome to "worldwide exchange." president obama and mitt romney have jabbed at each other from affaor weeks but now they get set to do it face to face as they get set for their first debate. slowing growth hits home in china's resilient services sector. nonmanufacturing pmi slips to a near two-year low in september. a sharp slowdown for services and business activity in the eurozone as well. frns and spain the hardest hit in september, whilst uk growth also sheds jobs. more signs of trouble for the spanish government as the latest figures show corporate tax revenue has tumbled.
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th >> you're watching "worldwide exchange," bringing you business news from around the globe. thanks for watching this show. here's how markets are faring ahead of the u.s. open. we're look at a bit of a split picture this morning. fair value down nine. we've got fair value on the nasdaq in the minus two category. minus one on the s&p .5500. we might be in for a softer start. this comes on the back of a low volume day yesterday for the states. putting in some slim gains by the closing bell. the dow seeing a bit of an unwind as some of those growth stocks had investors a little bit spooked, so selling in some of those pro growth names. let's move on to european
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markets so we're not providing much of a lead today. some selling across the charts, particularly for the markets here in europe. some of the services sectors numbers today, we saw the services industry contracting in september. we've got the market down a tenth of a percent. the dax has been trying to trim its losses all morning. pretty close to the flat line. this has been one of the strongest performers so far this year. the cac in france is so far down three tenths of a percent. we tried to push -- look at this, a little bit of success now as we move throughout the morning. it's now up almost four tenths of a percent. i want to show you what's happening on bond markets. this picture has been a little bit more encouraging than the equity markets. a little bit lower. 5.75. also pretty close to that 5% handle on italy.
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will spain officially ask for aid? apparently won't be now, but nonetheless you can see there's not too much pressure. we still see a lot of appetite for german bundes. one trade that has been seeing more demand this morning, sterling dollar, 16117 is the level. the growth story here in the uk has been particularly strong of late, defying expectations, so that just created a few nerves out there. i do think this trade might be broken now. off another half of a percent. so it is looking like it will fall through the 102 handle. euro dollar really holding
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around this level. let's move on to what's been playing out across europe. li sixuan joining us out of singapore. >> asian markets with lingering concerns over spain's bailout. the hang seng came back from holidays, following downbeat china services data and marginally in the green. gains envelopers were capped by losses in energy. in japan, the nikkei hit a three-week low as appetite waned, but fast retailing, the operator of the clothing chain rallied 3.7% because reportedly it could become the first japanese retailer to ever break
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the one trillion yen mark or nearly $13 billion in annual sales. the kospi is closed today, but over in aust the afx 200 up to a 14-month high helped by banks and i.t. firms. that weak trade data also pushed the aussie dollar to one-month lows. back to you. >> business activity in the eurozone shows no signs of a rebound. the latest composite pmi figures for september fell to the lowest in three years. france and spain saw a marked contraction as the countries strasbu struggle with painful austerity measures. a high incidents of bankrupt sis among small businesses. the increasing tendency of large corporations to seek profits abroad as domestic demand wanes.
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in 2011, spain raised just over $16.5 billion in corporation tax from the almost $45 billion euros collected in 2007. this has been formally raised in parliament today, i think we might have some live pictures now coming in from parliament. >> they've been speaking the last 20 to 30 minutes or so. presenting the details of that report. the extreme scenario for these spanish banks is $60 billion euros, but then we heard from moody's, suggesting that these banks could need up to 105 billion eurorows. perhaps some explaining to do. we saw this week, they suggested they would raise 2.5 billion
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eu euros. that's one of the things the economy minister is going to be doing. he'll be meeting with his counterpart in germany. he'll also be having a regular meeting, we're told, is what the officials are taking great pains to point out to us. given the fact that we've had the stress test, the budget for next year, too, and not to mention that germany has asked spain to back off from assistance from europe in the near future. i think that's something that the market will certainly be watching very closely. we heard that an imminent request for aid is not coming for this weekend. i think it would have been a significant shift for spain to have suddenly turned around and said okay, now we're ready for this. so we're back to this waiting game and speculating over perhaps when this will come. i think actually the market reaction yesterday tells you a lot, the lack of market reaction that certainly from an investor perspective this is a case of when and not if. if you're looking for possible
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reasons to trigger a request, spain does have to refinance around $28 billion euros worth of debt, short term and longer term debt by the end of october. the first auction since we had that budget comes tomorrow. plenty going on in spain to keep us busy. for now, back to you. joining us now is steven engler. i want to bring up first the sterling, because we've seena just a little bit of movement in that trade today after what's been fairly stable trade for the currency of late, this on the back of some of the uk services number showing some weakening out there among corporations. do you think this was a reason to sell today? >> well, i think sterling is a very troubled currency. i mean, you have to understand that it's been trading very close wli the euro in between the euro and the dollar.
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it's a very weak economy after years of low interest rates, after quantitative easing, an exchange range that's depreciated a lot over the last three or four years relative to everyone else. and the fact that the economy is so weak right now, i think is a very negative signal for the market. and for investors with respect to sterling. it will do well against the dollar if the euro goes up, but on its own i think it's going to underperform. >> i want to take a look at the euro. about a tenth of a percent. it doesn't seem to be struggling too much. the services number was better than the flash number on the composite level that we got into. >> it was the only thing that mattered, but i think you're in a situation where the market has
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become a little bit less concerned about the eurobreakup scenario, and that's why we're at 129 rather than 121. i think the market would still like to see the risk diminished. i think news that spain is requesting a bailout, rumors that they're going to go into a program, i think are very positi positive. >> there's a lot of thes and butts about the timing there around spain, so why is the market still putting its chips on the table ahetd of that news? >> well, here's the rumor. i think that would be very reassuring because for a long time, the eurozone breakup scenario was a reality. i think that once the ecb is both committed with its funds and committed with respect to
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being passive with other investors, i think the market will gain more confidence that the worst scenarios won't emerge. you have to remember -- and i think that will make the euro rally in the near term. what you have to worry about is the fact that the eurozone is a really weak economy. all the austerity. so it's not really very attractive. but i think at the moment, the markets aren't looking at the baseline, they're looking at the tail. as long as that tail risk is diminished, i think the euro will rally. >> we'll come back in just a minute. let's give you a flavor of what's coming up on today's agenda in the united states. the september adp employment report is out at 8:15 a.m. eastern. forecasts call for an increase in 153,000 in private sector payrolls. at 10:00 a.m., we received the
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september ism services index just to complete that global picture of services numbers today. analysts are looking for a reading of 53.1, down more than half a point from august. at 11:00 a.m., meg whitman holds her first meeting since taking over as ceo of hewlitt packard. still to come on this show, real estate mogul barbara corcoran joins us for a look at the housing market. that's coming up at 5:45 a.m. eastern.
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these are your headlines. president obama and mitt romney get set tonight for their first debate tonight in denver. services sector growth slows across the globe in september, and the spanish prime minister issues the latest denial that he's ready to seek a bailout. the uk retailing giant both released earnings earlier this morning.
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this comes after a billion pound investment in uk stores. figures for the rival were better. the retailer reporting total sales up 4.3% in the second quarter. growth was particularly strong in its online business, that was up 20%. earlier we spoke to lori, the cfo at tisco and we asked whether investment in the uk market is paying off and about the supermarket in the global sector. >> it's been very hard to roll out a scale number, when frankly neighborhoods are closing. there's more foreclosure signs around us in some neighborhoods than there are open houses. so it's been quite a difficult journey really through that period of time. >> the cfo asked him about the retailer's strategy in such a challenging market during a difficult economic environment. >> we've seen tremendous growth, for example, in our clothing range, partly helped, of course, by the range, but it's fantastic. it's a great result.
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when the nonfood market is clearly seeing quite challenging times. >> other stories we're watching. the oracle ceo larry ellison says the software maker's growth will be driven by its lineup of cloud products. the company was slow to embrace the cloud well son famously mocking it as a fad in 2008. in an interview, he says oracle is now all in and isn't planning any major acquisitions in the near term. >> oracle is the only company in the world that innovates all three layers or develops and invests at all three layers of the crowd. we think it's very difficult for a niche provider to compete with us. >> ellison won't comment on whether oracle's board has picked a successor yet. he is expected to eventually hand over the reins to the cfo or president mark heard. the shares down .6 of a percent.
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the apple faithful are just getting used to their iphone 5, but the rumored mini ipad may not be that far behind. reports say apple's asian suppliers are now mass producing a new tablet with a lower resolution 7.8-inch screen versus nine inches for the current ipad which came out in march. apple is expected to unveil the mini ipad later this month, but the company isn't releasing any details. you may recall these expectations have been somewhat built into the share price which hit some height last month, currently trading in germany at 513, the share price bouncing 1.5% in trade. the best buy founder richard schultz is pushing ahead with his possible $11 billion bailout. reuters reports he and at least four private equity firms
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including apollo have started examining the company's books. schultz is also reportedly discussing what role he would have after a buyout. reuters says an offer probably won't come before mid november. looking at a bounce of 11%-plus. the share price down just over 16%. practice time is over. tonight, president obama and mitt romney get set to do it for real. the men will meet face to face in the first of three presidential debates in denver, colorado, that happens at 9:00 p.m. eastern. the latest nbc "wall street journal" poll shows the president still holds a narrow 49% to 46% lead over romney. 53% of voters say the nation is on the wrong track, but that is the best number in three and a half years. nearly 60% believe the u.s. economy is recovering. we're going to have full debate coverage for you. we start a little bit earlier
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than that debate. cnbc's coverage begins at 8:00 p.m. eastern. be sure to tune in for the very latest. stay tuned. in about ten minutes time, we'll have a preview of what to expect and what's at stake with our very own democrat-republican panel. that's coming up for you here on "worldwide exchange." we use this board to compare car insurance rates side by side so you get the same coverage, often for less. that's one smart board. what else does it do, reverse gravity? [ laughs ] [ laughs ] [ whooshing ] tell me about it. why am i not going anywhere? you don't believe hard enough. a smarter way to shop around. now that's progressive. call or click today. [ grunting ]
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here's a look at how the trading session is shaping up, early hours before the u.s. market opens. you can see we might be in for a bit of a softer start, at least for dow and the s&p 500. this comes on the back of what was a fairly patchy session yesterday. we didn't exactly have much in the way of gains to report on the s&p and nasdaq. dow was even in negative territory as some of those growth or cyclical stocks have faced some selling pressure. as for the european markets today, we have been trying to improve the position, and a little bit of success now with some green on the charts with both the german market and also the spanish market today. the italian market has been trying to track into the green. this comes after these markets all opened in the red this morning. we're on the flat line now. the cac has been the underperformer. it still remains in negative territory down a tenth of a percent.
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we did have the sterling dollar tracking around a three-week load. a little bit weaker on the back of the services number, but you can see the euro is pushing higher in trade today against both the dollar and the sterling. the dollar-yen rate up a tenth of a percent, but really tracking these levels for a couple days. the australian dollar going into reverse, down .4 of a percent. standing patiently buy, steven engler, global head of a g-10 fx strategy at citi. thanks for joining us again. want to come to some of your u.s. dollar calls. you've been making the point that on the economic data in the u.s. dollar moves have been consistently moving hand in hand of late in the past they used to move in the opposition direction. so do you put this down to the qe-3 factor? >> in part, although it's been in place even when qe-3, or when quantitative easing hasn't been
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a major driver, a major force in the market. you have to realize that when you take a look at correlations over long periods of time, the dollar is kind of the currency of despair. you buy it when the economy is weak and you pretty much sell everything else. i think qe-3 is kind of making it easy for the euro and the europeans to look good right now because much of the world is terrified about the balance sheet expansion that they expect to occur and the flood of liquidity. so i think that there's a bias in the market. you know, to sell dollars broadly. in that circumstance, you look at reserve managers, you look at investors, there is this dollar negative trend in the market, and the fact that some of the u.s. economic indicators are picking up, that's not enough to offset the liquidity effect that we're seeing. >> this is a market that has
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used risk events to try and trade on some of these currencies. this week we had a lot of jobs numbers coming up. the adp is the first number that comes out today, but we also have the payrolls at the end of the week. how are you positioning around these numbers? >> well, i think that the basic trade is that if a good number is going to be good for other currencies and bad for the dollar. i think that the good number dollar negative correlation is still in place. the market i think feels that the fed's commitment to quantitative easing is strong enough that a couple good numbers isn't going to change the likely path of monetary policy, not just for the next few months, but for the next few years. so i would go with that. i think the market is kind of realistic in its expectations of where the unemployment rate is going to be, or where the payrolls are going to come out, 115, 120 pounds about right. but i think if it does come out stronger, we end up with
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stronger s&p and a weaker dollar. >> thank you very much, steven engler. we're going for a break. coming up on "worldwide exchange," the clock is ticking down on tonight's u.s. presidential debate in denver, colorado. we bring in a democratic and republican strategist on each side to look at what president obama and mitt romney have to prove to win over undecided voters, come up next.
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president obama and mitt romney have jabbed at each other for weeks but now they get set to do it face to face as today get set for their first debate. nonmanufacturing pmi slips to a near two-year low in september. a sharp slowdown for services, business activity in the eurozone as well, with france and spain the hardest hit in september, whilst uk growth also slows as firms shed jobs. >> you're watching "worldwide exchange," bringing you business news from around the globe. >> if you're just tuning in, thanks for joining us here on this show.
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here are some early numbers across markets before the u.s. open. a futures suggesting a bit of a softer start today. we did see some improvements on the s&p 500 and the nasdaq yesterday, but the dow was in negative territory, a bit of a slowdown in some of those stocks. it doesn't look as though we're going to see much out of the gate. we had a weak start across those markets, but now you can see we've got green being chased across these boards. some of the strongest markets today, the german market and also the italian market right out in front. but we do have points on the spanish market, although just dipping into the red. it is a bit of a waivering level of sentiment here today. a few challenges here for the uk with a services sector read also coming in a bit disappointing,
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but nonetheless equities now in front. how do you make money in these markets? here's what some of the experts have been telling us this morning. >> we've been quite bullish on treasuries. we've been recommending some buying on the ten-year treasury future. we think there had been room for treasuries to recover lost ground. they've done some of that now and we're back closer to the lower yield levels in terms of futures prices. >> prefer emerging markets. within that, one of the federal position being overrode but also local currency debt. >> it's become far more subtle.
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less risky, but also you try to maintain longer term fees. >> the first u.s. presidential debate between president obama and mitt romney is tonight in denver. the focus is on domestic issues and expectations are set high. new jersey's republican governor chris christie told "face the nation" this whole race is going to turn upside down come thursday morning. this as the latest nbc "wall street journal" poll shows president obama holds a narrow 49-46% lead over romney. some 40% of voters say the country is moving in the right direction versus 53% who say it's on the wrong track. nearly 60% believe the u.s. economy is recovering, though. joining us now is steve murphy, a democratic strategist and managing partner at mvar, and gretchen hamill is a republican strategist and executive
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director at public notice. nice to have you both with us. steve, perhaps you can kick it off for us. what do you think tonight holds? >> you know, here's what barack obama has to do. the debate right now in the campaign is very heavily over economic policy going forward. that's where barack obama wants to focus. he will accuse mitt romney of seeking $4 trillion, $5 trillion in additional tax cuts for the wealthy while raising taxes on the middle class. there will be a lot of talk about that because mitt romney disputes that he would be cutting taxes -- excuse me, raising taxes on the middle class. at the same time, he's challenged. obama's challenge is not to be too cocky. with good reason, he gets cocky sometimes. he's got to be careful that he doesn't is a moment like he had in the new hampshire debate in 2008 where he said hillary is likable enough. he has to avoid that kind of characteristic.
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mitt romney, on the other hand, what mitt has to do is prove that he's a human being, that he's a tin man who has found a heart, who cares about people other than his social class. and secondly, he has to put barack obama on the defensive. a big challenge there for him because the two are mutually contradictory. >> we're just looking at pictures there of mitt romney sans jacket, so trying to prove that he is the man next door. this has been the whole way through the campaign. gretchen, it is obama's to lose because he is in the lead. what do you think we're likely to see in terms of the tone of the debate and where each candidate will try and push this conversation? >> you know, i think the one who wins this debate will be the one who brings the other out of their comfort zone. president obama will not want to talk about his record, so romney will have a challenge in that and he should. he should challenge obama, try to get him to talk about his record, talk about his policies and how they have or have not worked. i think they will talk a little bit about how they have not worked. if we really want to continue those policies for the next four
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years. at the same time, romney needs to go in and talk about what his policies are, he needs to build that trust with the american public, because the american public right now believes that this country is on the wrong track. they want something to change. they don't believe that more government spending in this economy has actually done anything for it, the stimulus didn't work. the bailouts, you know, are still something that the taxpayers owe billions on. and so he needs to show a difference. he needs to show the contrast of what four years under a romney presidency would look like, and the difference from four years of president obama's second term. >> why is this about detail, because there is a theory that this is just about selling the person, it's not about the policy strategies in these debates. >> well, i think it is about the policy debates here tonight. i think that yes, the american people may have a little bit of trouble of liking romney. it's because they don't really know what romney stands for. and they have had trouble, you know, knowing who he is in his
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past. i think that tonight he needs to win the trust of the american public by telling them what his policies the next four years are going to be. >> steve, you've touched on this before about some of the language there, not just in the speech, but some of the subliminal language that the audience could pick up on. how important is this, for instance, a politician not to look at their time piecing suggesting that they're bored with the conversation, those types of things in the past that have derailed campaigns. >> they can be absolutely critical if they build a barrier between you and the voter, and that's certainly what both of these candidates want to avoid. one of the big dynamics in this race is that a greater percentage of voters like -- say they have a favorable view of barack obama than unfavorable, and it's flipped for romney. a greater percentage say they have an unfavorable view of romney. mitt romney isn't win unless he changes that. so he has to present himself as
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somebody who is more likable than the current image. he's got an advantage tonight. mitt romney has an advantage in that this is his first time he shares the same stature as the president on the same stage that he has an equal status with the president. he has an opportunity here to describe to voters a vision that is more inclusive than his 47% remarks. that's going to be a big part of tonight. >> steve, just how strong are the two candidates matched up to each other? we know obama is a very charismatic speaker. but romney also put in a decent display at some of the primaries, republican convention as well. do you think he can take on obama? >> yes, i do. romney rose to the occasion in the debates. he was challenged from the right continually in the primaries during the nomination process, and every time he had to win a critical debate, he did. he won the nom noination in the last debate in arizona.
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if that debate had gone against him, he may well not be the nominee today. he's an experienced debater. he is a very capable person. he's a smart person. he's going to be extremely well prepared. preparation is his mantra. i expect mitt romney to do well tonight. >> gretchen, ultimately who do you think will be controlling this debate and setting the other candidate on the run? >> well, i think president obama does have an advantage here that he's been talking about the same policies and using the same talking points for the past four years. so he has that advantage. his convention speech was a lot like a state of the union speech that we've heard over and over and over again. so romney i think will have to rise to the challenge tonight. he'll be on the stage with the president. he knows what's at stake here and the pressure will be on here to actually show what his policies are going to be like to bring president obama out of his comfort zone and really to challenge him. so romney's got a bis task ahead of him.
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i believe that he can do it, i believe that he can go out there and have a real debate with the president of the united states about where this country is heading and how we need to change some policies. >> appreciate the time today. thanks so much. thank you very much for joining us here on "worldwide exchange." for all the coverage of the first presidential debate, tune in to cnbc at 8:00 p.m. eastern tonight as we get you set up for the official debate at 9:00 p.m. also, still to come here on this show, real estate mogul, and shank tank member barbara corcoran joins us for a look at the housing market, as u.s. house prices post the biggest jump in six years. that's coming your way.
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these are your headlines. president obama and mitt romney get set for their first debate in denver. service sector growth slows across the globe in september. and rajoy issues the latest denial that he's ready to seek a bailout. other stories we're
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following for you today. the apple faithful are just getting used to their iphone 5, but the rumored mini ipad may not be that far behind. reports say apple's asian suppliers are now mass producing a new tablet with a lower resolution 7.8-inch screen, that's versus the nine inches for the current ipad which came out back in march. apple is expected to unveil the mini ipad sometime later this month but the company isn't revealing any details. this has been why we've been seeing a spike in apple share prices recently in both germany and the united states on the back of expectation about all these products before christmas. today you can see we've got a bounce in the frankfurt listing of the stock, up another 1.6%. reportedly close to a deal to sell up to $6 billion worth of its assets in the gulf of mexico. they have narrowed down the talks to three possible buyers.
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here's a look at their shares, currently up 16%, versus an overall performance years to date of just over 4%. it's a busy week in the u.s. ipo market with six deals set to price. three companies will make their debut today. life lock, which provides identity theft protection, is priced at $9 a share, that's below the expected range. it will trade under the ticker lock. javelin at $20 a range. the real estate investment trust will trade under the nyc under the ticker jmi. as for the third one, a british maker is priced at $10 a share, below the expected range. it will trade under the symbol lxfr. so three newbies to take a look out for today.
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best buy founder richard schultz is pushing ahead with his possible $11 buyout. reuters reports he and at least four private equity firms including apollo and tpg have started examining the company's books. schultz is also reportedly discussing what role he would have after a buyout. an offer probably won't come before mid november. and a look at best buy shares, up $11.5%. the year to date performance not so rosy, down almost 17%. the dark clouds have been hung over the u.s. housing market for years. appear to be breaking up. the report yesterday from core logic shows home prices rose 4.6% year over year in august. that is the biggest annual jump in six years. core logic has reported six straight monthly gains, and all
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but six u.s. states are experiencing higher home prices. joining us now is barbara corcoran, who is real estate mogul and author and nbc contributor. lovely to have you onboard with us today. let's delve into these house price numbers, because there's a huge amount of focus out of ben bernanke, pointing to the sector. do you think we are seeing a turning point in housing? >> we've clearly seen a turning point. where the turning point actually begins is in the attitude of the individual homeowner who's thinking about buying or thinking about waiting. what has happened is there's just been a switch thrown and everybody who was thinking about it and stalling about it seems to be in the market either shopping with an eye toward doing it soon or has already picked up a house. so we have seen a tremendous attitude difference very recently here. >> how even is the recovery? because looking at the case, there were particular states and
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cities that weren't moving. core logic also shows that states are experiencing gains. is it an even pickup across the states? >> well, what's interesting is the markets that were the hardest hit with the highest ure rates have been ironically doing the best. so you have a city like phoenix, arizona, that no one would touch with a ten-foot stick, and right now, those prices have gone up 33% in the last 12 months. the reason for these turnaround states, portions of florida, certainly that everybody thought will never turn around, is because investors marched into that market early. why did they do it? because they could buy these homes so cheap and rent them out at enormous profits. so we really have the investors to thank for turning around the worst markets here in the u.s. but certainly now the homeowner is marching right behind them. >> i'm glad someone is chasing yield somewhere in the yield. if we look at arizona, idaho, nevada, utah, these are where the biggest appreciation has taken place.
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what's the strategy here? do you chase some of the lower end markets or do you chase the core markets now? as an investor, what's the right strategy? >> what an investor looks at typically is their own local market because they know it best. the investors that go into somebody else's backyard and try to become a wheeler-dealer there always lose their shirts. even though we can look at all these markets, they're actually individual pockets with local investors buying. those are the smart guys, the guys that start trying to sharp shoot the market based on statistical surveys nationwide. never do well in that business. it's always the local buyer that's making the killing. >> the fete has been pretty keen for momentum to continue in the sector, and this scheme is about trying to narrow the spread between treasuries and mortgage rates for borrowers. we have seen some traction already on that part. a lot of investors now want to hide out as a safe haven. do you think this is actually
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going to make a difference at the end of the day, that the cost of mortgages comes down? is it that simple this time around? >> i think what would even help the housing market and the attitude out there, really going to fast forward, is if interest interest rates low for so long, right now a nice fixed rate mortgage is under 4%. no one expects those numbers to ever go up, so the attitude is oh, this is going to be around forever, and that's just not the case. if we had an up tick in mortgage prices, what would happen is everybody would charge into the market because they would think that the party is over. >> barbara, stay right there. we have a lot more to talk about. small businesses are the backbone of the u.s. economy, generating the bulk of the new jobs created each year. so how can big businesses give small business owners a leg up? barbara is going to stay with us and talk about that next.
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plenty coming up in the states today. the september adp employment report is due out at 8:15 a.m. eastern. this is important because we're coming up to the nonfund payrolls number at the end of the week. at 10:00 a.m., we get the september ism services index, just completing the picture of services that are across the globe. the u.s. will give its version today. the first analyst meeting since taking over as ceo at hewlitt packard. look for results from family dollar and marriott. it's estimated there are more than 27 million small businesses in the u.s., those entrepreneurs make a major
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impact on the economy, creating anywhere between 60% to 80% of all-new jobs, providing those companies the chance to succeed is the focus of the annual world business forum being held in new york this week. attending that event and speaking there is barbara corcoran, real estate mogul, author and nbc contributor. i'm sure a lot of people also watch you on the reality tv show on abc "shark tank." you're speaking today at this forum in new york. what's your message going to be to ceos and entrepreneurs? >> well certainly, every ceo there who is running a large business does better if they think lick a small business. that's not anything new in what succeeds in business. but what we're trying to do here is take the lessons we've learned from so many successful start-ups that are doing very well and doing most of the hiring in the states right now, we're trying to take those lessons and share them with the larger guys out there that could put their suit in the closet for a little while and maybe really hustle like a small business, because those are the guys
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making the jobs right now. >> this is almost a reverse in thinking because often a lot of business people are told to think big, not small. so why does it work to almost micromanage what's playing out in your own business? >> it's not about micromanaging, it's getting in touch with the customer, whoever is right at the curb, getting customer feedback, trying to figure out what actually is working, getting rid of everything that's not working. it's about being more in touch with what the consumer wants versus what the board on top of you wants or the feedback from your inner circle. i think the smart business people are really listening hard, and you know we've gotten in the habit of talking well. but people are starting to really listen better. >> expected to feature at the forum today is this conversation about access to capital. we were just talking about this before in the context of the housing market. this is one of the problems. even though borrowing rates are low, it's fulfilling the criteria to get the loan that's been somewhat of an issue. do you think this will change
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any time soon? >> unfortunately, it is changing, not all the banks are lending. certainly for myself, i remembered trying to build my business, i could not have done it if i didn't get a thousand dollar loan to get started. i built that into a business and employed over a thousand people. do you know how valuable that was to my local economy? if chase manhattan hadn't given me a credit line, i could not have continued my business. now i'm in partnership with over 18 small businesses, and what are they doing? what's the major issue once they have a little success under their belt, is cash flow problems. so large banks coming into play like a chase manhattan and helping these people succeed is not just an extra, they don't succeed without it. so the small business lending has become the major card in helping small businesses grow. >> best of luck at the world business forum today. and that's it for today's show.
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i'm karen cho. thanks so much for watching "worldwide exchange."
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good morning. today's top stories. your money, your vote. president obama and mitt romney set to square off tonight in the first presidential debate. new polls today show the race is closer than some have suggested. in global market news, weak economic data was out overnight from china. the country's normally robust services sector fell sharply last month. here at home, stocks are bouncing around to start the fourth quarter. investors say they're in a wait and see mode. i don't know if we've actually talked to any of them ahead of earnings season, but we're saying that anyway. it's october 3rd, 2012, and "squawk box" begins right now.


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