Skip to main content

tv   Worldwide Exchange  CNBC  February 1, 2013 4:00am-6:00am EST

4:00 am
4:01 am
you're watching today's "worldwide exchange." i'm ross westgate. here are the headlines today from around the world. spanish bank stocks hit hard. bbv bbva, sees profits plunge. a pair of china manufacturing survey seeking expansion in
4:02 am
january. the official pmi has slipped below expectations. >> and is steady as she goes, the u.s. economy is expected to keep up the recent trend of modesty of unspectacular job growth in january. plus, the dutch finance minister warns of a worsening deficit this year, this after the government is forced to bail out local banks after a bailout of 3.7 million euros. we kick off with the pmis out of the eurozone. january manufacturing pmi, 47.9. the flash 47.5, december manufacturing pmi was 46.1. it has boosted the euro to maintain its gaze, now back over to 1.3651 and continuing to climb high.
4:03 am
that is now a 32-month high against the yen, as well, at 11.25965. the german manufacturing pmi was a little better, as well, this morning. helping to boost those numbers. we suggest that there's benefits from emerging markets rather than, perhaps, from elsewhere in europe. anyway, coming in better once again for the eurozone. still in contraction territory, but, of course, the trend is what is being concentrated on. we had similar indicators for two die verging views on china's recovery. eases to 50.4 for january, that was below the forecast of 5079 the. but a private survey showed growth at a two-year high. the final hsbc pmi up 52.3. which is an inch above last week's reading. at the same time in india, growth slipped to falling new
4:04 am
export orders. the manufacturing pmi there down to 53.2 in january. the economy may be on track now for its slowest annual growth in daek aid. factory activity has consistently expanded for nearly four years running. so that is the back drop for the markets today. and we'll look at the employment report later. sixuan, let's kick off with you. reaction to the china pmi. >> thank you, ross. investors, in fact, shrugged off the mixed signals for the two versions of the numbers for january. the shanghai composite rallied today and posted its best weekly gain in 15 months. brokerages surged some 3% to 15% on hopes of higher trading volumes. according to the latest survey, investors confidence in january jumped 24% on the month hitting the highest level in nearly two years. the hang seng trimmed early
4:05 am
weakness to finish flat. the chinese state sealmakers summabled brought down by weaker than expected pmi data. in japan, the nikkei 225 gained for the 12th straight week, its longest rally since 1959. the yen continued to weaken on easing hopes. the softbank shares surged 5.7% after posting strong q3 earnings. shirk rose sharply on talks that it would post its first earnings in three quarters. elsewhere, the kospi finished marginally in the red. meanwhile, china helped fresh australia shares to a fresh 21-month high. india's sensex is now trading lower by 0.4%. on that note, back to you. >> thank you very much for that,
4:06 am
sixuan. here we are, first trading day of february. 8 to 1, advancers outpace decliners. the ftse, having its best january since way back in 1989. here we go. up 31 points. we started the 1st of february, as well. strong january for the xetra dax. the ibex will come on in a second. down, underperformer. the cac 40 up 25 points. we'll let you know what's going on with those spanish banks. bbva shares dropping sharply after the group saw profits down 44% in 2012. the earnings were hit by big provisions against toxic real estate assets. shares were also down this morning, although they've just turned around. it's up 0.6%. even bbva has gone fairly flat, as well. the group posting a loss of about 2.5 billion euros. more than analysts estimate. stephane is with us in madrid.
4:07 am
it's interesting to see these shares have turned around a little bit. >> yeah. we've seen an improvement, especially after the publication of the pmi, the manufacturing pmi in spain for the month of january. we're still in contraction. but the situation has improved slightly if you compare to december. 46.1 for the manufacturing pmi in january. that's to compare with 44.6 in december. that was, of course, the 21st consecutive month in contraction for the manufacturing activity in spain. but that was a bit of an improvement. as for the bank today, we've seen a negative solid trading for the banking sector in spain. the reason for that is the end of the short selling ban that was listed yesterday evening by the stock market regulator. i think this newspaper is the one that summarizes very well the situation. it's [ speaking foreign language ].
4:08 am
after that decision made why he yesterday. plenty of numbers to digest. full year profits down 40% for bbva, the second largest spanish bank. the bank was hit by the recession in spain because it makes 70% of its business out of the country. but still, it's spanish operations were in the red. 1.3 billion euros last year. the bank was impacted by some significant proinvestigations that we knew more or less the size of the provisions. 9.5 billion for the year. we have numbers from kashabank. down nearly 8el%. slightly below expectations. that's 8.6% and the trend, ross, we will talk about that later in the show, but plenty of spanish banks have announced that they have started to repay the llrto to the european central bank. we have an announcement, 24 billion euros yesterday from santander. 8 billion euros repaid at bbva
4:09 am
and casea bank. it has paid 4.5 billion euros in the bank. >> stephane, yesterday we saw santander talk about how they might sell off some more real estate assets at a big discount to the market. i wonder whether there are any other banks coming out with news to that effect, as well. >> indeed, santander made a precise announcement yesterday, 15,000 that were owned by the bank, plus 15,000 that were processed making a total of 30,000. significant for you. and it will continue to sell in the property assets, even if the bank stated clearly yesterday that it has completed its program of provisions to cover potential losses on its property portfolio. >> stephane, thanks for that. catch you a little later. you can see yields here 4.3%.
4:10 am
they're slightly lower on the day. but they have risen from recent lows. we just had another snapshot of unemployment continues to get worse. the unemployment rate for december, 11.2%. pmi bouncing off the lows, although they're still in contraction territory, but it's the trend the markets are focused on. 10-year bund yields, 1.7%. on the currency markets, euro/dollar, 1.4657 giving another boost up from those pmis, and the yen is down at 2 1/2 year lows against the dollar at 92.17, 33-month lows for the yen against the euro. aussie/dollar, down 1.0365. below 1.04. we've got manufacturing pmis coming out of the uk in around about 18 minutes. we will bring that for you, as well. so let's get more on what's going on with these, the pmis
4:11 am
and what it means for investors in asia. joining us from hong kong is rob suberman, chief economist at nomura. thanks very much, indeed, rob, for joining us. what do you make of the slight difference between the hsbc number and the official pmi? >> yeah. it's sending mixed signals at the moment. i mean, we're looking at the details of the -- of both pmis, in fact, probably give you a bit of a clearer read in that new orders actually picking up inventory is going down. that's a good sign for this month. so, you know, our view on the mis and other data was out earlier this week. our view is the economy growth is continuing to pick up, but not dramatically. so we're looking for growth this quarter to be around 8.2%, a bit above 8%. i guess the key thing which we're focusing on is we don't
4:12 am
think this is the start of a long lasting recovery. in fact, i think it's going to be cut short the second half of the year china's economy will start to slow down again. >> why? >> there's two reasons. one is there's been a big build up of debt, especially in the shadow of the banking sector. we think after the national people's congress in march, the policymakers will have to start to crack down on that. and the other issue is inflation. working age population, the way that chinese statistics office measures it actually fell last year for the first time in decades. potential growth slowing. we think that it doesn't take much of a pick up in growth before you hit the supply constraintses. so we think inflation is going to rise. those two reasons, debt and inflation, means there will be tighter policies earlier than usual in the cycle. >> well, that has big implications, rob. if that plays out, big implications for investors in global confidence. how does that feed through?
4:13 am
>> it potentially could. it depends how much growth slows. we're expecting china's growth to slow from a bit over 8 earlier this year to around -- to 7.2% in the fourth quarter. and, you know, if we're right with this, i think it could potentially have ramifications for demand, particularly for commodity producers and commodity prices because i don't think many people are focused on this risk of a slowdown. >> and what does it do for the aussie/dollar? >> it weakens it. >> fair point. look, i mean, we also look at what we've got investors have sort of got quite excited because we got rid of the risk of a starker slowdown in china. we got through the u.s. political -- we're still debating it, but we got through the fiscal cliff. europe's tail risks seem to have
4:14 am
diminished somewhat. if you put china back in play, how will that impact the u.s. economy? particularly where we've got job creation very much in our minds today? >> well, i mean, one thing we have to think about is at least sequentially as we get into the second half of this year, we're expecting u.s. growth, japan growth, you know, even euro area growth to pick up somewhat. so, you know, it could be that even with this china slowdown, the rest of the world demand will be sfusht offset the. so overall, you know, the world economy will be okay. but i guess the big thing for china is, you know, if you're looking at the overall debt in the economy, including the shadow banking, it's about 185% of gdp. it's a huge number now. and, you know, our view is the urgency to actually start to scale that back is significant
4:15 am
now. and the longer that the authorities delay it, the risk of a sharper slowdown in growth is later on. so, you know, we're hoping that there is responses in q2. if there's not, we might have to start to build in slower growth further out. >> rob, thanks for that. have a good weekend and have a good evening. >> you, too. now, we talked about real earlier this morning. ing, this is s&sreaal. the ing levy will result in a 3 to 350 million euro charge. it will hit its core on ratio by around 12 basis points. that's the impact of that nationalization on ing. also on today's show, preparations are under way in new orleans for the u.s. sporting event of the year. baltimore ravens and the san
4:16 am
francisco 49ers going head to head in this sunday's super bowl. today's session also all about the jobs report. nonfarm payrolls are expected to rise in january. we have announcements from new york at 11:00 c.t. there's travel brewing in the takeover of mexican beermaker. and before all of that, we'll be in frankfurt. where real estate group leg has gone public, the biggest real estate deal in frankfurt since about 1997. the ceo will just us in just a few moments.
4:17 am
[singing] hoveround takes me where i wanna go... where will it send me... one call to hoveround and you'll be singing too! pick up the phone and call hoveround, the premier power chair. hoveround makes it easier than any other power chair. hoveround is more maneuverable to get you through the tightest doors and hallways. more reliable. hoveround employees build your chair, deliver your chair, and will service your chair for as long as you own your chair. most importantly, 9 out of 10 people got their hoveround for little or no cost. call now for your free dvd and information kit. you don't really have to give up living, because you don't have your legs. hoveround replaced the legs. and now every hoveround comes with this handy tote bag and cup holder for access to your favorite items. and right now, get this limited edition hoveround america travel mug free with your hoveround delivery. [singing] hoveround takes me where i wanna go.
4:18 am
call or log on to to find out where a hoveround can take you!
4:19 am
property group leg began trading this morning in gurmny. it's the second largest listing since way back in 2007. the stock priced at 44 euros a share in the middle of its initial range and it's pretty much trading there, 44.09. leg is setting out an ambitious plan this year as it works to capitalize on stability. joining us now is thomas hagel, the ceo. first of all, congratulations. we haven't seen many ipos, so this one, it must feel good to get this one off.
4:20 am
>> thank you very much for your congratulations. yes, we like the situation. this is what we have been working for. >> you haven't issued any new shares on the listing, so you haven't reached any proceedings, i guess, from the stock market debut. so what was the idea behind this listing? >> we have a new platform, we are positioned in northwest syria. an acquisition is one of our most important aims for the future and that's raising capital in the future from the capital markets. >> what are your -- okay. so why are you so confident about wanting to invest now? >> the time is ready. there are multiple acquisition opportunities.
4:21 am
we are well positioned in this market. we know everything about this market. we are positioned in more than 160 locations. that is why we know the market and we have opportunities coming from this market and that is what we are going to do in the future. >> what sort of yields can you generate in this market? >> we raise year around 5% to 8% and we are heading for a bigger one, a larger one. >> how much is this impacted by what's going on with the german economy? obviously, you've flirted with contraction in the last quarter. i'm wondering how the separate way you invest in the market is from the general economy. >> look, we are a well
4:22 am
positioned company in the market. we knew the market very well. we were able to increase the rent over the last year steadily. we know the markets and we assume for the future growth as well internally and with external droeth. and that is why we now see the best situation. that is why we're headed for this ipo just in time. the stock market is great at the moment, as you can see. and entering our last week on the road show, we saw just this interest of investment. and it's the way we see it at the moment on the stock going on. >> yes. and, look, just talk about what's driving rents. what is behind rents going higher? >> we have a situation in germany, especially in -- where
4:23 am
we are just in the right shape of market for our product. our product is suited, rents tend to go up and not down in the future and that's due to the fact that we on one hand have a situation on the market that people need homes at reasonably priced and on the other side over the last year, the supply went steadily down. it's due to the fact that it's just too expensive to those new homes and our market shares, the market piece is just fitted for the demand. >> all right. thanks very much, indeed, for joining us, ceo of l.e.g., the latest company to float in frankfurt. thank you very much. elsewhere in spain, the ruling property party is on the defensive after allegations that its top property markets received secret payments on a regular basis since 1997. spanish conservative is deny the allegations and have threatened to sue the newspaper that published photos of the secret
4:24 am
accounts. a new order into his finances has been called and an emergency hearing is set to take place on saturday. the prime minister is expected to announce his first stimulus package as early as today. as the recession in spain continues to deepen, more than 25% of spanish laborers are unmroit. joining us now, nickace spirro. despite the continued woes of the spanish economy, pmis have bounced slightly off their lows this morning. despite the fundamentals, you look at the bund market and there's enormous difference in sentiment. is that still going to happen because of differing yields between spanish yields and german yields? >> i would expect it to.
4:25 am
spain in the markets right now are existing almost in the powder worlds. there is a striking disconnect between -- between sentiment and fundamentals. certainly, i think one of the most glaring examples of the -- of this disconnect clearly what we've actually -- what we've seen over let's say the last several months or so is a dramatic improvement in new confidence. and at the same time, we've seen spain's fundamentals significantly deteriorate, certainly in the case of retail sales, of industrial near production and spanish banks are
4:26 am
still knee deep in a property driven downturn. >> and there are forecasts now. i thought it was nomura city. whichever bank, i apologize. talking about spanish gdp by 4%. >> one shouldn't exaggerate. span entered the crisis in a relatively comfortable position debtwise. the problem is, the scale of the economic downturn and the fact that the -- the costs of the bank bailout have been basically settled, have saddled spain to even higher debt. that's clearly undermined spain's creditworthiness. >> the thing is, is what we're seeing here just something that's going on in january? because with such easy money in the world and the fact that if
4:27 am
you're a fixed income investor, real returns are negative. are we driving fixed income investors not just in the sovereign market, but, you know, they're not going to -- they can't switch out of fixed income into equity. we talk about them looking at structured credit now seems to be flying, investment grade is overvalued. i wonder if that's what's going on here, if you can find the spanish debt at 5%, it's still better than other stuff you could buy. >> what we're seeing here is a shift from perceptions of spain as a high return one. we're seeing something which is eeriely similar as far as we are concerned to the convergent straights before the advent of the -- of the euro. and, in fact, in the years
4:28 am
following the launch of the euro. spain right now, and even more italy, are considered as at the very least investable. and this was not the case several months ago. >> how much are they? >> they certainly are if you believe that the worst of the eurozone crisis is over, which we do. in terms of the debilitating markets. we take the view nat fundamentals do not warrant these type of views the. >> nicholas, thank you for that. just a reminder, the spanish prime minister is expected to make those announcements later today. see what our top analysts are saying at and the dutch government has announced it's taken over troubled banking and insurance
4:29 am
from s&s reaal. the dutch finance minister says the nationalization will cost the state 3.7 billion euros and that's already received a 750 million bailout in 2008. latest rescue, according to the dutch finance minister will inevitably lead to a worse budget deficit this year. it will charge other banks, including ing, for a rescue. ing came out this morning saying it will cost a charge between 300 and 350 million euros in extra provisions. we now have uk manufacturing pmi outer. i can tell thaw it's coming in at 50.8 versus a revised 51.2 in december. and the poll was 51.
4:30 am
it's flirting with recession. slightly below the consensus poll here. the readling for that was 51. anything above 50 separates growth from contraction. the previous month up 54.2 from numbers in december. despite a poor hit from weather, new orders up for the third consecutive month hechd by the home market. let's get reaction to that with adam cole, head of g-10 strategy at rbc capital markets. adam, the pound has been under pressu pressure. if we get slightly better data, does that change the outlook? >> i think it has to help, yes. i think the more convincing reason why sterling has been under pressure is a side effect of the ongoing recovery in the euro and the recovery of risk premium in the eurozone. on the macro data themselves, we think that the picture has been
4:31 am
at worst, really, ambiguous recently. certainly the q4 gdp data was soft, but elsewhere, the data have been okay. it characterizes the numbers we have seen this morning. in that sense, i think sterling in our view probably is reaching oversold levels here. >> that's interesting because there is a thought that it could be to the front of the ugly cue. it's been shielded as a euro ply. but if we take the tail off risk off from europe, we take the risk off for the dollar and sterling is a bit of a focus. >> yes. what i would say is the compression of those tail risks in the eurozone, we think, is probably in its end game at the moment. and the market has moved from pricing of 50/50 risk of eurozone break-up to barely more than a 10% risk of the eurozone break-up now. i think one has to say those risk premium have compressed so much, so quickly in a straight line. that we probably are reaching the point where there isn't that
4:32 am
much to go for on that. so the extent that that's been the negative driver for sterling, we probably at some point during the current quarter will reach the end of that game. >> i was just looking at the high tallan auctions we had this week. it seems as though we don't really care what happens with italian elections. we'll take it in our stride. >> i think yes, indeed. and one of the side effects of the ecb's omt which, of course, hasn't been used yet is that it has back stopped risks from most sources, and that includes politics in the eurozone and that markets have become tolerant of the potential for shock such as the election. we still don't rule out that coming back on to the markets in january at some point. but even then, within very limited parameters for how much the markets are prepared to rock price intellirisk. >> the yen is down to 2 1/2 year lows against the dollar. it's 33-month lows against the euro. this trend firmly intact. what sort of targets do you
4:33 am
have? >> i don't think with the new bank of japan governor coming up in march and april, i think it will take an awful lot for those yen shorts to get covered ahead of that. for me, the real questions in terms of policy deliver rather than policy promises in the second quarter of this year rather than the first. so run with the trend, but be aware as running into the second quarter of the year. i think markets are going to start looking for delivery of policy change rather than just promise. >> adam, always good to see you. thanks for that. adam cole from rbc capital markets. many people are preparing for one of the biggest tv events of the year. it's not the "worldwide exchange" highlight program. it is, in fact, the super bowl. the face value of a ticket to ated tend this game going from
4:34 am
$850 to $1,250. but ticket resalers are selling them at highly marked up prices. we want to know what's the most you would spend to see any kind of sport event? e-mail us, tweel us, @cnbcwex or direct to me, @rosswestgate. how much you be prepared to pay and for what? where will it send me... one call to hoveround and you'll be singing too! pick up the phone and call hoveround, the premier power chair. hoveround makes it easier than any other power chair. hoveround is more maneuverable to get you through the tightest doors and hallways. more reliable. hoveround employees build your chair, deliver your chair, and will service your chair for as long as you own your chair. most importantly, 9 out of 10 people got their hoveround for little or no cost. call now for your free dvd and information kit. you don't really have to give up living, because
4:35 am
you don't have your legs. hoveround replaced the legs. and now every hoveround comes with this handy tote bag and cup holder for access to your favorite items. and right now, get this limited edition hoveround america travel mug free with your hoveround delivery. [singing] hoveround takes me where i wanna go. call or log on to to find out where a hoveround can take you!
4:36 am
4:37 am
spanish banks hit hard after profits plunge. the company has lifted a short telling bank. ibex has been the only major european index in the red. a pair of china manufacturing survey signal expansion. hsbc's private gates are a two-year high for january. but the official pmi slips below expectations. the u.s. economy is expected to keep up the recent trend of modest but unspectacular job growth this month. and the dutch finance minister warns of a wider deficit this year after the state bailed out local lender s & s reaal. it's charged the dutch bank $1 billion for the rescue.
4:38 am
ahead of the jobs report out of the u.s., european stocks are firm, 8 to 1. the ftse 100 after the best january since 1989, up another .5% this morning. along with the xetra dax and cac 40. the banks are weighing down the ibex this morning. santander is the biggest loser on that sector. on the bond markets, yields are lower in spain and italy, slightly higher in germany and the uk. ten-year gilt yields back up to 2.12%. despite pmi -- oh, maybe that's why. january manufacturing pmi, 51.8 versus 51 for the uk. slightly better than expected for the eurozone this morning. final manufacturing pmi, 47.9. the flash is 47.5. and on the currency markets, the
4:39 am
euro continues to climb. dollar/yen is up at 2 1/2 month highs at 92.22. thailand's bp group still to buy a 17% stake in pingan insurance from hsbc is due to expire at the end of today unless, of course, china's insurance regularity grants an extension or gives its approval. china was reportedly concerned that the funding came from sources outside cp group, a move that would violate the terms of the agreement. joining us from hong kong is michael flarety. michael, is this deal finished? >> well, it's hard to say. as you said, there's three scenarios at the moment. one, they extend the deadline. two, they approve it. the third, he reject it and if that's the case, things get
4:40 am
interesting. >> what's the most likely, do you think? >> i think it's hard to say. i think it's an extension probably of something that given the uncertainty that served us last late year, early this year, either the option that if we weren't, you know, 100% comfortable with the funding or anything else regarding the deal, that would probably make the most sense. but, again, hard to say. >> yeah. so what are the implications? if it doesn't go through, what are the implications of other deals that might be in the pipeline or other things people might want to do in the seconder? >> i think the thing to focus on is hsbc. it's not devastating if it doesn't go through, but, really, it's taken a long time and it's taken the energy of people very high up in the company, including the ceo, to try to make this transition work. the interesting thing is, if it doesn't, does he want to spend the next year or so trying to get this transaction through? it's going to be very tough. >> yeah.
4:41 am
i mean, exactly. as you say, it would be tough. if he doesn't get his transaction through, how can they replace the lost business? what would the likely strategy be sthp. >> well, he has a few options. and that is the first you line up another buyer. now, $8.5 billion in the stock, you know, continually going up, that's not exactly an easy thing. the other thing is, you can't sell down 85.billion in the market. you do it in chunks. that's an option, as well. in each case, it could take some time. >> yeah. how do we see the future development of financial services here in china? are you going to be -- you know, are companies ever going to be allowed some riflely unfettered access?
4:42 am
>> products sold in china, products sold overseas. in the end, they turned out to be very good investments. the actual cross selling, the actual cooperation really didn't happen. and you saw that in the case of all the banks that sold out of their chinese bank stakes. also now you're probably seeing this, as well, with hsbc and ping an. >> michael, good to see you. thank you. a bit of news out from google concerning the eu. it is now analyzing google proposals. no word on when they may finish analyzing it. goombling, casinos took in $3.4 billion, up 7% from a year ago. but below forecasts of 10% to 12% growth. analysts attribute the low numbers to the traditional lull before the new year.
4:43 am
this is all in macau, of course. these vip gamblers have scaled back their betts last year because of the uncertain economic outlook and the clampdown on corruption. in the auto world, toyota says its china sales are looking up. the world's largest carmaker sold more than 72,000 vehicles in china in january. that's up 24% from a year ago. it was toyota's first year on year growth since june 2012 in the country. anti-japanese sentiment has been hurting sales in china. but on the domestic front, toyota sales slipped 15% in january as government incentives expired. honda suffered an even steeper 53% drop. and staying with japan, we're seeing a couple of old school
4:44 am
japanese electronics. toshiko has the story for us. >> hi, ross. struggling japanese electronics giant sharp and panasonic both released their improved earnings report today. the nikkei reported that sharp would be posting their first operating profit in five quarters. after the market close, the company released its earnings report and returning to the black, its 2-3 operating profit turned out to $28 million. this is mainly due to its strong sales of its smartphone panels. sharp shares gained 6% today. meanwhi meanwhile, panasonic returning to the black posted a net profit of $666 million for the q3, mainly from its cost cutting efforts by eliminating jobs. however, they both leave doubts about their struggling businesses. sharp maintained its forecast for the fiscal year to march, a net loss of 4.9 billion dollars
4:45 am
and a revenue of $26 billion. panasonic reiterated its full year forecast, a net loss of $8.3 billion. back to you, ross. >> all right. toshiko, thanks very much, indeed, for that. asia next week, earnings, earnings, and yes, more earnings. mitsubishi electric are posting new results. we'll watch for buy due and soho earnings out of china. htc and mediatex report fourth quarter numbers. back here in london, the jpmorgan trade known as the london well reportedly tried to warning others at the bank months before they led to losses of more than $6 billion. "the wall street journal" citing e-mails reviewed by a senate panel and jpmorgan and say bruno told another trader last january that the size of his bet wag
4:46 am
getting scary. managers didn't stop his trades until march. the senate panel is examining whether the bank failed to disclose crucial information to its primary regulator. and talking of wales, we have another discovery in the uk. slightly different nature, this, and it might leave one british man with a hundred thousand pound payday. 50-year-old ken willman stumbled upon a clump of whale vomit while walking his dog. he initially thought it was a football. but picked it up and noticed a foul smell. he then told sinus that a company offered to pay him 50,000 for the vomit which is used to make perfume. but companies in thailand offered up to 4 times that amount. i'm not sure how you could confuse that with a football. anyway, there you go. i'd never thought i'd read the
4:47 am
importance of whale vomit. still to come on the show, u.s. authorities are brewing up trouble with the ab inbev deal. is the u.s. giant set to get hammered? i don't like this. we'll talk about it when we come back.
4:48 am
4:49 am
4:50 am
the french president francois hollande is reportedly planning to travel to mali tonight. according to the french paper liberation. dell is leading itself to a buyout group. reports suggest the transaction might be finalized this weekend in a deal announced on monday. the buyout group is reportedly around $15 billion in debt financing from four banks, barclay's, bank of america, credit suisse and rbc. michael dell would be the operator while those from microsoft would be minority investors. dell stock is up 5% on the story. and the battle is brewing between the u.s. justice department and anheuser-busch inbev.
4:51 am
i says the $20 billion deal would give ab inbev too much dominance over the u.s. beer market. ab inbev says it will fight the ruling. shares down on modelo down twsh actually, ab inbev is now up on that. why is now the stock going up 12347 people thinking they might not get blocked or on they might come to some arrangement? >> i think the feeling yesterday is an 8% decline was probably after overreaction. i would have said that put the probability of the deal not going through at about 66%. i think this morning, people have realized that actually my view is that the deal will ultimately go through and this is nearly a delay. >> it will go through, but what is going to have to happen foor that eventuality to take place?
4:52 am
they could look to sell some of the brewing assets in mexico that produce the corona brand into the u.s. in my view, that would appease the regulator. of course, it would make the deal slightly less attractive. i would simt about 3%. >> let's look at what the doj is concerned about. they say if this deal goes through, they'll have dominance and they'll be able to rise beer prices. you say they have been raising beer prices for their other products. and corona has been the beer that actually kept prices low. >> yes. so it's two differing strategies from the two major brewing companies in the u.s. ab inbev, the leader. ab inbev has been pushing the prices to the tune of 2% to 3% for the last two years.
4:53 am
michelob has followed that trend. corona is the biggest import brand in the u.s. essentially, two differing strategies. the dog's view is were ab inbev to take over modelo, they could look to rise corona pricing. >> how does it stack up? >> they've said they won't market or price it in the u.s., that will all be done from c constellation brands. clearly, the doj has a different view of the matter. >> yeah. so heesh is the thing. ab inbev has not wanted to consider things necessary to do the deal. will they now change their tune on that? >> well, i think for them, the merits of trying the keep the
4:54 am
deal in its current form, they might be thinking it's worth the litigation and it's worth the extra months in court. but ultimately, the strategic portions of this deal sit within the mexican market and corona. i think inbev will ultimately, if they have to, give something up in order to get the deal through. >> finally, talk about raising prices. are they raising prices because they can and they are improving marmgin or because they're under pressure? >> it's a combination of both. the strategy of ab inbev has been raising prices in a higher regard in its lower price brands and forcing the price gap between the lower priced brands and the premium brands to basically get consumers to trade up in their higher price brands. they can more inknow administrative, but they can charge pricing. >> thanks so much for joining us.
4:55 am
>> now, from beer to football, they go together quite well. britain's premier league club spent $100 million on players in the january transfer window. it's well short of the record 225 million pounds. and mario balance tele-19 million pound switch from manchester city to ac milan. there will be quite a few people pleased about that move, as i understand it. somebody in the gallery said yes. outside of the premier league, it was the top signing, david beckham has signed a five-month deal. he received offers from as far afield as australia and china to play. he said he would donate his entire salary to a children's
4:56 am
charity in paris. no suggestion there was any motivation about the proposed 57% tax. and we're just about two days away from one of the biggest sporting events in america. the super bowl. the baltimore ravens and the san francisco 49ers are battling it out. there will be plenty of auction off the field. brian shactman has been taking a look at the business of advertising ahead of the big game. >> everyone has their choice for what they consider a classic super bowl ad. whether you like contact, any use of the force, as well as inanment objects knowing how to get down. >> it's that kind of party. hit it. >> the super bowl is one part football, one part tailgate and one part cultural super bowl phenomenon dating back 30 years. >> when we all saw that 1984 xlushl for apple, i think that's
4:57 am
when we really all started to loot a commercials in a different light for the super bowl. >> fast forward to 2013 and the ads are scrutinized as much as the game and the cost is enormous. mercedes benz made an eight-figure commitment and brought in super model kate upton to launch an entirely new line of cars. >> it's hard to believe there could be such thing as an eight-figure no-brainer. >> we also have the usual suspects, pepsi, coke, godaddy returns with danica patrick and a little help from a friend. hoping to make their new impact the new commerce, wonderful pistachios, soda stream and milk rolls out the rock. and no super bowl would be the same without the youtube sensation of the moment. this year, it's psy. ♪ open gangham style
4:58 am
>> there you go. the tickets to attend the super bowl goes from $850 to $1,250 for a ticket. resalers sell them for as much as $3,000. what's the most you would pay to see a sports event? let us know. e-mail us, tweet, @cnbcwex or tweet direct to me, @rosswestgate. >> john tweeted in saying he will spend hundreds to watch the super bowl. hundreds of dollars. you've got to spend at least 800. so are you prepared to spend at least $800 to watch the super bowl? and if it's from a couch, it's going to be a little more than that. still to come, we find out if america's jobs recovery has more room to run.
4:59 am
[singing] hoveround takes me where i wanna go...
5:00 am
where will it send me... one call to hoveround and you'll be singing too! pick up the phone and call hoveround, the premier power chair. hoveround makes it easier than any other power chair. hoveround is more maneuverable to get you through the tightest doors and hallways. more reliable. hoveround employees build your chair, deliver your chair, and will service your chair for as long as you own your chair. most importantly, 9 out of 10 people got their hoveround for little or no cost. call now for your free dvd and information kit. you don't really have to give up living, because you don't have your legs. hoveround replaced the legs. and now every hoveround comes with this handy tote bag and cup holder for access to your favorite items. and right now, get this limited edition hoveround america travel mug free with your hoveround delivery. [singing] hoveround takes me where i wanna go. call or log on to to find out where a hoveround can take you!
5:01 am
this is "worldwide exchange." i'm ross westgate. here are the headlines today. the u.s. economy is expected to keep up the recent trend of modest yet unspectacular job growth for the month. u.s. markets have turned in their best january performance in more than a decade. history says that means a positive year could still be on the card. spanish bank stocks hit hard
5:02 am
after banks see profits plunge. the country's market regulator lifting a short selling bank. ibex, the only major indices in the red. and hsbc's private gauge hit a two-year high. the official pmi has slipped below expectations. right. we have some data out of the eurozone. we've got cpi, first of all, was 2% lower than 2.2% in january. and if i can pull up the unemployment number, as well, there we go, that's the cpi figure for you. i'm trying to see if i can scrape together the unemployment number. eurozone december jobless rate,
5:03 am
11.7% versus -- that's the december number versus 11.7% in november. it was seen ticking up to 11.9%. we did see the eye auto tallan rate tick higher. those two bits of data and low inflation and lower than expected unemployment now boosting the euro further on the dollar. we got another boost about an hour or so ago when the pmi came in at 47.9, higher than the flash 47.5 for manufacturing. the euro/dollar now up at fresh one-year highs at 1.3672. the hsbc was can on. the official china number slightly weaker than we might have thought. let's see what kind of reaction we've had to those numbers in asian trade. li sixuan is with us in singapore. hi, sixuan. >> thank you, ross. investors ignored the paint picture ignored for china in january.
5:04 am
remember, they may also be thwarted by the upcoming chinese new year. the shanghai composite added 1.4% today and posted its best weekly gain in three months. the surge from 3% to 10% helped by hopes of higher trading volumes. investors confidence in january jumped 24% on month, hitting the highest level in nearly two years. the hang seng recouped early weakness to finish flat. but some of the china state run steelmakers tumbled, weight down by that weaker than expected official pmi data. in japan, the nikkei 225 gained for the 12th straight week, the longest winning run in 54 years. while the yen weakened to trade above the 92 handle against the greenback. sharp shares also jumped by about 5.8% on talks that it would post its first operating profit in five quarters and that was confirmed by the company
5:05 am
after the bell. elsewhere, south korea's kospi finished marginally in the red, but automakers rebounded after recent sell off. australian shares climbed to a fresh 21-month high marking its best weekly gain in about nine weeks. india's sensex ended lower by about 0.5%. back to you, ross. >> all right, sixuan, thank you very much for that. this is where we stand with the u.s. futures at the moment. we are called higher to get to the unemployment report. the dow is currently 66 points above fair value, only around about 134 points shy of dow 14,000. the nasdaq is concernedly 11 points above fair value. the s&p 500 about 557 point above fair value. we did manage to stayed up 5% fort month of january. when that has happened, 11 out of 12 times we've gone on to see double digit gains in the s&p for the course of the year. is that going to happen this
5:06 am
year? we don't know. but that's what the history tells us. when we get a 5% gain, it does deliver double digit gains. as far as the european session is concerned, the european session is at session highs, 5,319. the ftse 100 up 38 points this morning, 0.6%. the xetra dax up 0.7%. the weakest member here is the ibex, down once again because of spanish banks. although the stocks, not as bad. cashbank up 0.1%. bango san sander is down again 2.75%. let's recap what's under those spanish banks this morning. we heard earnings numbers coming out yet again from some of these banks. particularly from the bbva. let's get more details from stephane who is in madrid. stephane. >> ross, all the spanish banks last year improved their balance
5:07 am
sheet. they also improved their solvency ratio, but it came at a price with significant -- were taken. 9 billion in total taken from bbva last year, posted this morning a 44% decline on its full year net profits. the bbva, although it does only 30% of its business out of spain was impacted by the economic recession last year. the banks announced its spanish operations were unprofitable with a loss of nearly $1.about billion euros. the key matrix in spain was up 5% for the year. it's rising, but still remistakens well below the average of the spanish banking sector which is up nearly 11.4%. also bbva announced this morning that it has returned 8 billion euros to the central bank at the start of its ltro loan. it's roughly one-third of what the bank took from the ecb. also this morning, we have numbers from caixabank.
5:08 am
the third largest bank in spain. net profits decreased decline by 78%. that was a bit weaker than expected. bad loan ratio at 8.6% at the end of the year and caixabank has decided to return part of its ltro loan to repay at 4.5 billion euros over the last tu weeks. so plenty of numbers to digest. plus something important also yesterday evening, ross, the market regulator in spain decided to lift the ban on short selling that was implemented in july last year and extended for three months at the end of november as a result we've seen this morning some massive selling movement on the banking sector. some of them we're losing as much as 5% just a few minutes after the start of trading. over to you. >> yeah. and they have report some of those losses, as you say. stephane, thanks for that. that's the latest out of madrid. on the currency markets, pmi manufacturing pmi, 54.8. we're looking for a figure of
5:09 am
51. but still, it's back in expansion territory. sterling, pretty steady. aussie/dollar dragged down by that official china pmi number. 1.0371. dollar/yen firmer at 92.17 and the euro/dollar as they're staying up at fresh 41-year highs, 1.3666. that's where we stand on the currency markets. meanwhile, the january u.s. jobs report is out at 8:30 eastern. economists are expecting another tepid month of hire b, the dow jones consensus is for an increase of 166,000 of nonfarm payrolls. that follows 155,000 in december. unemployment is expected to hold for the third straight month at 7.8%. the labor department would also publish benchmark revisions to payroll data going back to 2008. now, julie coronado's chief economist at bnp paribas.
5:10 am
julie, do you agree with the steady as she goes scenario? >> pretty much, yes. smoothing through volatile gdp numbers we've gotten, the u.s. economy appears to be growing around 1.5%. the labor markets are lagging indicators, so we shouldn't expect any acceleration in job growth yet. my own forecast is for 150,000. >> if that continues, bearing in mind what we heard from the gdp reported, and then we have that classic defense spending, what's your own thoughts about where we'll be with that sort of job growth and fed policy at the end of the year? >> i don't think that's the kind of job growth the fed is looking for. in fact, they have promised to continue quantitative easing until they see substantial improvement in the labor market. and since the labor market is a lagging indicator, as chairman bernanke has pointed out, we need to first get above trend gdp growth, which in their mind is around 2.5%.
5:11 am
so we haven't seen anything in the data yet that suggests that job growth is about to pick up to an area that is satisfying to the fed. so we think they're going to be expanding their balance sheet at roughly the same pace all year, perhaps they'll be able to taper back a bit going into 2014. but we think they're going to be in this for quite a while, despite the discussion we saw in the minutes. >> yeah. with this here pick up in investment, that was a good thing in that report. and, look, you're saying investors are going to pick up this year. why won't that translate into stronger job growth? >> it will eventually. i mean, i think investment is the key area with we expect the turn in global manufacturing that you've been talking about this morning will benefit u.s. exporters. the continued stable u.s. consumer will benefit the business sector. ask we do expect investment to pick up and eventually that will lead to job growth. right now, the cloud of uncertainty around fiscal policy is something that's holding
5:12 am
businesses back. it's trying to get more clarity on where government regulation, government spending is going to be before they make some of these decisions on spending and hiring. >> the interesting thing is, of course, while all this goes on, if markets continue to grind higher in a fantastic january, we are seeing extraordinary demand in credit. you know, investment growth now looking very top. people are pushing the boundaries out. people now talk about structured financial products making a comeback. >> indeed. >> fixed income investors, they're not switching to equity. they're staying. >> fixed income. but they're going for much higher risk to get some return. if the fed stays where it is, are we creating another credit bubble? >> that certainly is the risk. and we worry about that. you're absolutely right. if we look at the credit markets or equity markets or fx markets, there is more leverage building in this system to try and get some greater yeemdz in this low-yield environment.
5:13 am
one always worries that thakdz ultimately lead to something that's unstable. and i do feel like markets have, perhaps, run a little bit ahead of fundamentals at this point and we may see some disappointment as the economic improvement is going to be more gradual. so that is one of the things that falls under the systemic risk category that the fed has cited as one of the costs of their qe policies. it's definitely something they're going to be monitoring. but it comes down to will their decisions be driven by froth in the system or will their decisions be driven by the economy? at this point, i would say they're keeping an eye on that. but there's nothing that is in the system yet that is leading them to conclude that they need to pull back. >> give it another six or seven months. we might feel differently, julia. stick around. get a cup of coffee. make sure someone is looking after you. you get a breather and we'll come back to you. we want to know what is your
5:14 am
prediction for the jobs numbers today? do you agree with the consensus of 166,000 jobs added? e-mail us, tweet, @cnbcwex or direct to me, @rosswestgate. the u.s. senate has agreed to let the u.s. treasury keep borrowing money past the current 16.4 trillion limit at least three may 19th. sorry, i have to bring you back for this. quick thought about this, can we get rid of the debt ceiling? >> iveng what we're seeing is some of the political brinksman ship around the debt ceiling may be a thing of the past. the renls certainly got hurt politically trying to use that tool as leverage.
5:15 am
6/hopefully it's an indication that that particular kind of brinksman ship is behind us. >> we'll see. i never put it beyond politicians. when the story changes, they'll change. julie, now win promise you can have your coffee break or tea break. try tea, it's very nice. english breakfast. very good thing to have first thing in the morning. we'll come back to you, jules, julia. in the united states, in addition to the jobs report, there are some other pieces of the economic data. the final look at january consumer sentiment is out at 9:55 a.m. eastern. on the corporate front, exxon mobil, chevron, merck, tyson foods all report earnings before the bell. january sales are also out. they're expected to be seen at the strong rate compared to last
5:16 am
year. this is all thanks to pent up demand as well as the improving housing market. and if that is not enough for you, millions are preparing for one of the biggest tv events of the year. the face value of a ticket to attend this football game goes between 850 to $1,250. the ticket resalers sell them for as much as $3,000. if you haven't got a ticket and you want one, they'll government you $3,000. what's the most that you would spend to see a sports game? this sports game, any sports event, e-mail us,, tweet@cnbcwex or directly to me. still to come, dell is edging towards a buyout here. it could be announced as soon as monday. details when we come back. ♪
5:17 am
[ male announcer ] make your escape... twice as rewarding. earn double points or double miles on all your hotel stays through march thirty first. sign up now at
5:18 am
5:19 am
it's jobs day in the u.s. consensus is for another month of unsteadily spec tract lar growth. chinese pmi data signals expansion. hsbc takes two-year high but the officials pmi sits below expectations.
5:20 am
dell is erroredly inching ever closer to a buyout group to silver lake partners. reports suggest the transaction will be finalized over the weekend and the deal could be announced as early as monday. the buyout is reportedly around $15 billion in debt financing from four banks, barclays, credit suisse, and hsbc. dell stock in frankfurt is firming up now 6% on these reports. boeing's engineers union will start voting next week on whether to authorize a strike. union leadership made the decision after recommending members reject the company's best and final contract offer on thursday. the union representatives 23,000 workers. the move comes as boeing and
5:21 am
investigators are working around the clock to determine what caused two lithium batteries to fail on its 787 dreamliner jet, prompting regulators to order the plane to be grounded. stocks today in frankfurt off 0.75%. morgan stanley's reporting james gorman is getting a raise this year. he will get a higher base salary of $1.5 million. that's unfrom $800,000 last year. gorman was paid a total of 9.75 million from 2012 down 7% from 2011. still to come on the program, exxon, chevron and oil companies report in two hours. what should we expect? more to come. ♪ [ male announcer ] how could a luminous protein in jellyfish, impact life expectancy in the u.s., real estate in hong kong,
5:22 am
and the optics industry in germany? at t. rowe price, we understand the connections of a complex, global economy. it's just one reason over 75% of our mutual funds beat their 10-year lipper average. t. rowe price. invest with confidence. request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing. all stations come over to mission a for a final go.
5:23 am
this is for real this time. step seven point two one two. verify and lock. command is locked.
5:24 am
five seconds. three, two, one. standing by for capture. the most innovative software on the planet... dragon is captured. is connecting today's leading companies to places beyond it. siemens. answers. u.s. oilmakers chevron reports earnings after the close today. joining us for more, jason gamble. julia is still with us, as well, in the states. good to see you, joseph. what are we going to learn today? >> well, i think a few things. i think first of all that chevron is more likely to show follow through from the oil price environment because they tend to be less levered to
5:25 am
refining and natural gas prices in the united states and those were pretty weak areas during the fourth quarter. i think the other thing we'll be looking to is can these companies exhibit any production growth? it was one thing that we have some question marks around the shell numbers from yesterday. we think exxon will be growth challenged and probably have to face up to that to a certain extent today. chevron, on the other hand, does have some growth in front of it. >> you talk about it's too early to get a reliable fill for estimates. just explain, you know, where we go then. >> well, we do see brent oil prices being relatively strong in 2013. you know, we really think that the current price in the environment is supported by fundamentals. but we also do look for continued weakness in refining, particularly in europe, and also to a certain extent in asia. and those factors are kind of offsetting each other. i think it is going to be a year where it's company specific in
5:26 am
performance rather than something that's driven by a big macro trend. >> yeah. look, we're going to hear from bp, as well, thx week. and they're trying to, you know, close out the impact from the gulf oil spill. what do you make of what we'll hear from them? >> well, i think there's going to be likely little. i think that's its own set of news events that doesn't correspond to reporting. i think the one thing we'll want to get more clarity on is how progress is moving in russia. we have a few quarters that will have the sales of tnk and the progress in recognizing those earnings will be important for the financial metrics. >> and look, you look at the brent price, as well, how much of a differential are you expecting?
5:27 am
do you see that happening? if so, how much might that be? >> it's already there, too. we think in the short-term, there could be some negative impression on the markets because of some pipe likes that are coming into operation. but we expect over the medium term that that spread between wti and brent is going to be somewhere in the $12 to $15 range and that probably extends for 3 to 5 years. >> jason, good to see you. thank you so much, indeed, for joining us. u.s. authorities are brewing up trouble for the ab inbev/montelou deal. more when we come back. first, a reminder of where futures are trading ahead of the open on wall treat st. ♪
5:28 am
(train horn) vo: wherever our trains go, the economy comes to life. norfolk southern. one line, infinite possibilities. we can afford to take an extra trip this year. first boston... then san francisco. hotwire checks the competitions' rates every day so they can guarantee their low prices. so our hotels were half price. ♪ h-o-t-w-i-r-e... ♪
5:29 am
5:30 am
this is "worldwide exchange." i'm ross westgate. a recap of headlines around the world, steady as she goes. the u.s. economy is expected to keep up modest yet unspectacular job growth in january. u.s. equities turn in their best performance in more than a decade. history says a positive year could be on the cards. spanish bank stocks have been hit after bbva, caixabank and others are set to plunge.
5:31 am
the ibex today is the only major european index in the red. this will be the jobs numbers today, just to recap what we're looking for here. we've got the january forecast up 166,000 in december, up 155,000. the january jobless rate is forecast to stay steady from the december number b, as well. julie coronado is still with us. julie, you think -- you believe in the steady as she goes jobs number. what will it take to change that scenario? >> well, right now, the job market is a story of cross currents. so there's some sectors that are doing better and there's some sectors that are actually
5:32 am
deteriorating. so we expect construction to be a bright spot. we've seen housing improve. that should translate into jobs. on the other hand, the government sector has been a drag and it should continue to be a drag given the spending cuts that we're already seeing and that we're likely to see throughout this year. tourism is doing well. retail should get hit a bit because of the weakness in consumer spending and retail spending that we've seen. so it's a real story of cross currents. we haven't yet gotten to the point where all of the growth drivers are firing at once. when one thing improves, another thing is pulling back and that's sttory for the broader economy 37 that's what we've seen in gdp. >> we've talked about the turn around in housing we've brought about and now worry seeing some growth. is that going to -- is this trend solid enough to improve yes, we have definitively turned a corner and is it going to do anything for construction jobs? >> yes, but i think we should be
5:33 am
careful about looking to prior housing recoveries and drawing conclusions from that. because i think this housing recovery is going to be difference. valuations have fallen to the point where people are starting to buy, investors are starting to come in and clear excess supply for a consergz have to rental units. so it feels like a sustainable bottoming. but, again, the overall jobs picture is subdued, consumers are still very cautious. the young generation in the u.s. just doesn't view housing the same way. so i don't think we're going to go into a boom phase in housing that will translate into a lot of construction and a lot of jobs. i think it's going to be a gradual pick pup. >> julia, thanks for that. good to see you. earlier in the show, skeed you if you agreed with the is 166,000 jobs added.
5:34 am
earlier you tweeted 155,000 and 170,000. the u.s. government is announcing last call now on the $20 billion proposed merger between ab inbev and modelo. the justice department is looking to block the deal on competition grounds. >> budweiser and corona aren't meant to be. the justice department entered a motion to block the deal. in the decision, the justice department's anti-trust chief said the two companies would lay claim to nearly half the company's $80 million beer market. that's possibly driving control up for consumers. it does, however, mark the first time u.s. regulators have moved to block such a giant deal since the department broke up a $40 billion merger between at&t and
5:35 am
deutsche telekom's t-mobile in august 2011. t-mobile has since agreed to be acquired by metro pcs. but on the back of the anheuser/model deal gets -- shares rose on that deal getting broken up. elsewhere, the markets fell. perhaps the worst fallout came for constellation brands, the spirits company that holds the key for corona distribution in the u.s. shares fell as much as 20%. the market had expected that they would benefit from any potential deal. for now, we'll send it back over to you. >> all right. that's kayla with the wrap-up. joining us on the phone is harry shomaker. harry, good to see you this morning. thanks for getting up. >> great to be here. >> the doj expects because of ab inbev and bud like and miller has been raising prices and
5:36 am
corona hasn't had price rises, if you put corona with bud, they have prices and prices will go up. >> the way they have it set up is that constellation would have full control over crown. and in the past, yeah, constellation has been more prone to increase pricing, even with their jv with crown. crowns tend to be more aligned with modelo, which is not one of the prices. so conceivably, the justice department really does have something there. >> what is interesting here is they've been very aggressive. they're suing to block the deal. they're not looking for a remedy. is that going to be their final position? >> you know, i think there's still room for negotiation and a remedy, but i think it shows the doj feels they have a very strong case.
5:37 am
and they wouldn't do this if they didn't feel that way. and i think the market has been very bullish on, you know, finding the right concessions to make the deal go through, but it's kind of getting late for that. and i think it's going to have to be a big package of concessions to go through at this point. >> just how big a surprise is this development? >> well, you know, it's actually a huge surprise to the market. although it probably shouldn't have been. there's been a lot of signs out there, you know, recently that this is -- this deal is going to be litigated. i mean, it's a different political environment here. and we're going to see a more active justice department, particularly with big mergers like this. and so it's -- yeah, big surprise. it probably shouldn't have been. >> harry, the u.s. beer market is important, of course, for corona. i presume ab inbev are looking at this. that, i presume, is the big
5:38 am
thing at stake. so is it in their interests here to just come to an agreement so they can still make corona a big selling global beer? >> yeah, i think so. but it kind of sdpendz depends on how big the concession has to be. you know, if they have to give up the brewery which is their largest right on the border, ab has indicated that could be a deal breaker. so it just depends on how big the package is. >> we'll see what happens. harry, thanks for joining us. all right. u.s. futures are called higher. the s&p having its best month since, what, late 2011. and the nasdaq is currently -- the dow is currently kaut called up 65 points. the nasdaq you called up 11.57 points and the s&p up 5 points.
5:39 am
the indexes are doing fairly well. cac 40 up 0.8%. the ibex is being dragged down 1.4%. still to come, the nfl is hoping a record audience tunes into the super bowl on sunday. advertisers are betting big that the viewers will be watching the action in between the action on the field. we'll look at the super bowl ads when we come back. [ male announcer ] i've seen incredible things. otherworldly things. but there are some things i've never seen before. this ge jet engine can understand 5,000 data samples per second. which is good for business. because planes use less fuel, spend less time on the ground and more time in the air. suddenly, faraway places don't seem so...far away. ♪
5:40 am
5:41 am
5:42 am
a recap of the headlines today, it's jobs day in the u.s. oougs markets enjoy the best gains in january in over a decade. chinese pmi signals expansion. hsbc says it could face a two-year high. by the officials numbers slip below expectations. all right. with just two days away from the kickoff of one of the biggest sporting events of the year. that's the super bowl. the baltimore ravens are battling it out for the vince lombardi trophy. there will be plenty of action off the field. brian shactman takes a look at the business of advertising in the big game. >> everyone has their choice for what they consider a classic
5:43 am
super bowl ad. whether you like contact any use of the force as well as inanimate objects knowing how to get down. >> it's that kind of party. hit it. >> the super bowl is one part football, one part tailgate and one part cultural super bowl phenomenon dating back 30 years. >> when we all saw that 1984 commercial for apple, you know, i think that's when we all really started to look at commercials in a different light for the super bowl. >> fast forward to 2013 and the ads are scrutinized as much as the game and the cost is enormous. mercedes benz made an eight-figure commitment and brought in super model kate upton to launch an entirely new line of cars. >> it's hard to believe there could be such thing as an eight-figure no-brainer. >> we also have the usual suspects, pepsi, coke, godaddy returns with danica patrick and a little help from a friend.
5:44 am
hoping to make their new impact the new come everies, wonderful pistachios, soda stream and milk rolls out the rock. and no super bowl would be the same without the youtube sensation of the moment. this year, it's psy. ♪ open gangham style joining us for more is jim cooper from new york. what does one player this year releasing an ad with a lot more seemingly relying on it, that is blackberrymaker rim. why would this be such an important place for them to come for the first time? >> i think just the audience is massive. they're trying to build market share. the audience is going to be about 100 million viewers.
5:45 am
it's a good place for them to get their product back out in the marketplace and try to build some buzz. >> the thing is, their customers are corporate customers. they're not the general cop assumer. so, you know, how do they translate, you know, mass market into where actually they're selling their product? >> you know, i probably would disagree with that. i think sometimes the mass market will drive a niche market. this will be talked about, especially if the ad is a good one. >> what makes a good ad? >> i think an ad that has an economy of tone, that really is sort of done in a creative, but clever way, that really sort of hits the brand in a very clear way and, you know, doesn't insult the viewer. they want humor, they want sex, they want sent mentality. and they want it in an emotional context of the super bowl which
5:46 am
is, again, the biggest night on television in the entire year. >> autos seem to generally dominate. we all remember the vw darth vader ad a couple of years ago, which they released a little early, as well. that doesn't seem to be happening this time around. >> well, there are some early releases, but the brands are teasing instead of releasing the entire ad. so it's a combination of strategies. you either tease the ad, release the whole thing or go more the traditional route and wait for the game for the big priced. you can get a lot of prebuzz for it, youtube is a huge portion of this story right now. and certainly you can get, you know, a couple million views prior to the game that's not terrible. >> is anybody out there trying to make it sort of a -- you watch the tv and then you go and do something online on your mobile application. how are they tying people in,
5:47 am
besides just watching the ad, trying to get some instant follow-up. >> yes. this will be the most democrat iblg super bowl of all times. they want people to vote. they're doing all sorts of crowd sourcing. audi is doing that, coke is doing that, doritos is doing that. they want people to be invested in these things. they're spending almost $4 million per spot. they want people to sort of remember these things during the game and post, as well. >> doritos inviting consumers to make up or make a super bowl ad. how does that go down? >> doritos calls out for anyone who wants to try and make the ad for the super bowl. year in and year out, sometimes they tend to be the most funniest and outrageous ads. the two ads i've seen are pretty out there and hilarious and we're seal what kind of buzz they create. >> so are those going to be your favorite, ben?
5:48 am
you know, i certainly like those. they're organic and you don't really know what you're going to get. they tend to be surprising. i did see the budweiser clydesdale foal ad. that will be a sentimental favorite. that should be good. >> i just wonder because the game takes so long. what normally people do is record the game and then edit out the ads. i i'm wondering whether the thing to do will be to record the ads and edit out the game. i don't know pp. >> i mean, certainly there is an intense following for the ads as well as the game. you know, sometimes, you know, the game might be boring and the ads might be great. so you never know. but certainly the game is going to be dvr'ed and these ads will be chewed over and over again on youtube. and going forward. there will be all sorts of social buzz. it will be the most second
5:49 am
screened super bowl of all times. people will be using tabletes and smartphones to interact with these ads and then to interact with themselves and their friends about the ads, too. >> all very interactive. jim, good to see you. thanks for joining us. earlier on the show, we asked you how much you would pay for tickets for something like the super bowl or any of your favorite sports games. david tweeted us to say he would pay $500 tops for a super bowl ticket. i don't think -- i think they start at 800. so you're not going. he also tweeted he would pay thousand thousands to see zlatan score against new england. how much do you want towards the super bowl? 5 0,000? 100,000?
5:50 am
join in the conversation, e-mail us, tweet us, another highlight of the super bowl each year is also the halftime show. this year, beyonce has the nod. she generated a little controversy last year when it was revealed she lip sync'ed the presidential inauguration. yesterday, she laid off that to rest. snoets and the home of the brave the brave ♪ thank you guys so much. any questions? ♪
5:51 am
5:52 am
[ male announcer ] make your escape... twice as rewarding. earn double points or double miles on all your hotel stays through march thirty first. sign up now at
5:53 am
the jpmorgan traders in london reportedly tried to alert others at the bank of mounting risks to his derivati rivetderi. the size of his betts were getting scary. at the same time, another whale discovery in the uk. this is a slightly different nature. but it might leave one british man with 100,000 pound payday. 50-year-old ken willman stumbled upon a clump of whale vomit. now, he initially thought it was a football? he thought that was a football. all right. anyway, he the picked it up. he noticed a foul smell and he told sky news that a french company offered to pay him 50,000 euros for this piece of
5:54 am
whale vomit. apparently it's used to make perfume. companies in switzerland could offer up to four times that amount. if you focus, you never know what you might stumble on and what it might be worth. that's the weirdest story i've ever heard .i've heard a lot. the dow is concernedly called up 64 points. the nasdaq is called up 10 and the s&p 500 is called up 5. we had 5% plus gains for the s&p 500 which as we all though, we talked about it yesterday, means we now have a very good chance of double digit gains. the last time that happened, 11 out of 12 times that the s&p has been up 5% we've gone on to have double digit gains. the dow close 7% in january. that's its bet biggest chris since 994. 81% of the time. there you go, my friends. that's what the odds are telling
5:55 am
you. different story, though, for apple. the tech giant had its worst month since september 2008 at the high of the financial crisis. he lost its crown as the world's biggest company which has returned to exxon mobil. and pimco's bill gross has produced his skepticism that the much discussed rotation out of bonds into stocks are now happening. the so-called bond king said fund flows at pimco show little signs of rotation and cash money markets may be the source of this. todd horowitz at the cms trading group joins us with his own views, as well. rather than the rotation out of bonds within it seemed fixed income investor res going for riskier investments. i hear structural products are making a comeback.
5:56 am
good morning, ross. everyone is trying to figure out a meal to get their money and they haven't been able to find it. >> how wide are you? are we building up a future problem here? are we building up another credit bubble? >> i believe that we are building a bubble here. i think this is an artificial bull run with the ever chase for yield. however, you've got to stay with it been but you've got to be very occasionus in here. and i think that, you know, today's jobs number is going to tell a big story. we had a week coming back. we had rotten consumer confidence, wiped out all of 2012's gain. we had a lousy gdp number. the market stayed exactly where it was monday is where we are today. i think the whole week is pointing to what's going on happen this morning. and i think if this number is not well north of 200,000, i think we're going to look for serious selling pressure here because i think that the market is expectations and the priced
5:57 am
in perfection is here and if we don't meet those expectation, i think we're going to get serious telling here. >> that's interesting. our story is markets are braced for a bla jobs report. in other words, so what. >> that's the way, but you can see by the way the market has been trading all week. the last two days, it's been like the market has been closed. nobody has any interest. i think they're waiting to see, this is the time piece of the puzzle, to see if we're making some sort of recovery. and i think that you're going to see that as much as they think we are, we're just basically artificially pushing the can down the road and kind of building numbers and forcing people into the equity markets for the chase for yields because there is no place to go with your money, other than the equity markets right now. >> okay. so consensus number and the s&p slips. that's what you're saying, todd, right? >> that's right. >> all right. >> if we don't beat, we go down. >> okay.
5:58 am
todd, good to see you. we'll all see what happens. thanks for that. there is only one place, of course, to find out what happens with that number. "squawk box" is coming up next for the u.s. the european equity groups, a little bit of ltro breaking news in just a few moments.
5:59 am


info Stream Only

Uploaded by TV Archive on