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tv   Worldwide Exchange  CNBC  January 13, 2014 4:00am-6:01am EST

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welcome to "worldwide exchange." these are your headlines from around the world. was it just the weather? many continue to digest friday's stock surprise as they try to stay in the green. banks decide to water down three debt moves. give diplomacy a chance. president obama warns against imposing fresh sanctions on iran after it completes its deal to halt its nuclear program for next monday also sending crude prices lower. shares fall after the
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british oil services of amec offer to buy another company. you're watching "worldwide exchange" bringing you business news from around the globe. all right. now on monday morning, 64 as far as european equities are concerned. we are up by just .01%. if you remember back on friday, they are holding the rally we are seeing in the european indices, but as of trading this morning we'll take a look at this this morning.
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look at the ftse 100 up .01%. same for the cac 40. we'll look at the sectors because it really is the banks in focus this morning up over 1% this morning. european banks among the biggest winners after regulators agreed on sunday to relax new rules to improve leverage ratios. this is a relief for the global vendors who fear raising billions in extra capital. the new standards being drafted by the bars of committee, of course, tossing the chance to reduce debt. they hope to allow that to push out lending with the economy. we can hope. let's have a look at the bond markets this morning, too. the one that i really do want to point south the ten-year treasury, we can't ignore the 8 basis point sell-off on friday
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taking us down to 2.86 this morning. and as far as the periphery markets go, in particular, we have the dollar softness after that payoff on friday continued into the asian session. but relatively unchanged as far as euro dollar is concerned. we are still seeing the dollar softness dollar yen at 103.40 right now. commodities now with the global markets today, gold continued to rally this morning up .10%. a spike on friday for a weaker dollar and higher commodity markets, this was a one-month high. from the rates market yet, brent and lme are up slightly after what we saw with iran over the weekend, but we have to live and
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hope. nickel is the big move up 1.5%. indonesia is working on minimum ore experts. president obama allowed the expert of copper, iron ore and zinc concentrates to continue. so it's focusing on the nickel market right now to give a reprieve to the country's foreign mining giants freeport and numont. this was the biggest rally since september on the bank, which the government believes will boost domestic processing. israeli producers are also expected to benefit from the move sending aluminum and other areas higher. indonesia's $2 billion nickel industries are being threatened and adding to current account pressures, not to mention that the unemployment rates there, too. elsewhere in the asia region, china's yuan hits a record high
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in early trade after the central banks reflect weakness in the dollar. and they say the chinese currency could appreciate by a further 2% to 3% this year, already of course at 20-year highs. let's check in on the markets in asia. lisa schuan, tell us what's going on with the markets today? >> thank you, julia. i'm going to start with china markets today. not able to get a boost from the postponement of five new ipos. the country's securities wash stack announced late sunday new measures to tighten the supervision of the ipo market. and under these new rules, issuers and underwriters have to release risk alerts if an ipo is priced at a higher evaluation than its peers. authorities will also carry random spot checks to make sure no numb public information will
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be disclosed to investors in pitch books and road shows. and the shnezhen comp down about .20%. on the currency front, julia mentioned you have record highs against the dollar because they set an all-time high point after the soft u.s. jobs numbers. and the other asian markets rebounded a bit today as the weak u.s. dollar revived speculation the fed may retain its stimulus program for a bit longer. indonesia's composite jumped over 3%. japan's out of action and kospi gains 5%, but australia closed at a three-week low after resource stocks. as for big movers, chinese property developers took a beating on the hong kong and mainland horses. chinese's led ministry plans to form a nationwide realistic
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registry system seen as a precursor for a national expansion of a property tax trial. so you see these property stocks took a beating today. back to you. >> xi, great to speak to you. see you later on. for now the payroll was to the downside in december for 74,000 jobs created. the figure significantly undershot expectations of a near $200,000 gain and marked the smallest pay increase in three years. the number was accompanied by a drop in the unemployment rate to a five-year low of 6.7%. this has been ascribed to be dripping out of the labor markets, so a reduction in that participation rate, but what a headache for the federal reserve. let's bring in phillip tyson, government bond strategist at icap joining us now. phillip, give me your thoughts on these numbers. is it safe to assume the federal reserve will look at these and just say it's a temporary thing,
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weather-related and will continue as planned? >> i think so, yes. essentially, you're right, it was a shock, the payoff was much weaker than you can expect. you can't be certain, but it does seem to be the cold weather that's impacted payrolls, people being surveyed around the survey period. it contrasts significantly with all the other data that we have seen, the small business indices, the adp, the employment components of the ism, they don't suggest that the jobs market is falling off a cliff. so i think the fed will be very cautious when interpreting this payrolls report, particularly as you say, the unemployment rate has fallen to 6.7%, so it's not far from the 6.5% level previously considered the point of which they might consider raising rates. essentially i think what it means is that tapering will
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continue. they are going to be cautious with it, but i don't think they can afford it at this stage because of one month's payrolls to suddenly pause in the tapering process, which is already quite a cautious one. >> that makes a lot of sense to me, and yet look how bond yields reacted. look at the move in the ten-year. you can say that the equity markets moved and the bond markets are concern there had. do you expect the move that we saw there higher in u.s. rates to correct paths over the next few days as we get more data to confirm what the payrolls didn't tell us? >> well, i think the risk is that in the next few days we could see yields fall a little bit further, under the market of sold off to the top of it, sort of recent trading yields, yields were hovering near the peaks before the data came out. it was -- the report was obviously clearly weaker than expected so we saw yields fall back towards about 1.85 level or
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so at ten years, 2.85 level at ten years, sorry. we've got retail sales numbers later on this week. they also might be impacting negatively by the cold weather. so they may be looking for yields to fall more in the short run, but what you've got to remember is anything with any activity or spending that was hit by the cold weather in the december/january period will be recovered in the months ahead. so if we do see slight yield falls toward the bottom of the recent trading range in the next few days, i think as the data picks up and recovers in the sort of later in the first quarter in february, we could see some more awkward pressure on yields returning. and the market could essentially be range trading for the next few months. i think weather reduces in bond markets at the moment in peripheral bonds in europe. >> i will stick with the u.s. markets just because of what you're mentioning through is quite interesting. do you expect the u.s. dollar to remain on the backfoot if you're
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talking about further sell-off of yields in the u.s. markets right now? >> yes. i think in the short-run as i say, if the next few days' reports are impacted negatively by the weather, aside from putting downward pressure on yields, it could keep the dollar up or a little bit on the backfoot, but it's a temporary thing. i really do believe that the growth in the u.s. economy is picking up. it's sustainable at this time. we've seen previous swoons in u.s. activity, it's always been related to fiscal or political events. there's nothing on the horizon right now like that. i think it is a temporary weather-related impact. and that will recover relatively quickly, i think, as we get into the february/march period. >> phillip, you did mention one of my favorite words, which is the periphery of europe, and i'm going to come back to you on that. but for now just bear with me because every week cnbc asks me to talk the trend by taking part
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in the online poll following december's disappointing jobs data. what should janet yellen do with tapering? stick, easy or cut? head to traderpoll.cnbc.com to cast your vote and you will begin to see the trend. you can also have your say on twitter using #traderpoll. we would love to hear from you. now, we've just had some italian data out this morning. the november industrial output rising 0.3% month on month. starting to see that data right now. we have the year on year reading coming in. november industrial outpit, 1.4% year on year. now, we're sticking with the theme of italy, the italian prime minister is once again under attack. this time from within his own party. the new head of the democratic party mateo renzi has attacked
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the coalition for failing to push through economic reforms speaking to an italian newspaper the 39-year-old said he was amazed that the politicians department understand the need to hurry. but if politicking as expected going on in italy there. now spain's opposition socialist party has taken a lead in a new opinion poll. they are ruling conservative people's party has seen popularity fall following austerity measures, corruption scandals and a move to restrict abortion. spain's labor market has also proved a major headache for the prime minister with the current unemployment rate at 26%. the poll comes as rajov visits u.s. president barack obama in washington today. now let's take a look at how the peripheral bond markets are trading this morning. as you can see, the italian yield training at 3.91% there. spain is tied to trading at 3.18%. porch gal, it lil, these are the
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key outperformers as far as the equity markets go already this year. it's interesting to see. philip, you said some of the best gains are still to be seen as far as the peripheral markets, is that right? >> yes, i think so. we have seen fantastic performance in all the peripheral markets benefiting from search for yield, the better macro data, the perception that the eurozone economy is maybe finally turning the corner. some of that data has extended into these peripheral economies, too. so that's boosting optimism going forward. and i think as well the benefit from the backstop of the ecb's omt purchase program. even though the details are pretty vague, it hasn't been used that. that's provided a real boost to sentiment in peripheral bonds.
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short-term, given the way the markets are trading, the price and momentum, et cetera, that we can see some further outperformers of peripheral markets versus the call, some further and spread narrowing. you look at the spanish markets of the portuguese syndication, the success of the irish, bond auction, it all bodes well going forward. and i think what we'll see is some of these peripheral curves flatten and shift a bit lower. having said all that, i am a bit cautious longer term because even though growth is looking like it's bottomed out and we're picking up a little bit, it's still nowhere near strong enough to ease into the massive debt levels and to really bring these unemployment rates down in some of these peripheral economies. and i think if growth disappoints later on this year, then sentiments in the bond markets could begin to wane. so i don't think we're through the eurozone debt crisis yet. it could really emerge later on
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this year again, but certainly in the short run it looks like there's more gains to be had. >> i like the way you mentioned the word cautious there. what's positioning like in some of these markets, because we continue to see them tighten, tighten, tighten, but just how involved are investors? and despite your warnings about possible growth disappointments, my concern is that positioning seems to be very high right now. >> i think it certainly has increased. you've seen obviously a lot of domestic interest in these individual markets, spain, italy, et cetera. but also you've seen an increasing amount of overseas flows into these markets. and i think that is going to continue in the short-run. it's interesting, actually, if you look at the way these auctions have performed, usually with spain and italy, you get a little bit of indigestion when issuing yield bonds, but we haven't seen that this time. in spain last week the market rallied into the auction and continued to rally afterwards.
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and i think that's a sign that there's still room for the overseas investors to move into these markets. there's still room for some further yield falls, despite the fact that we are now at spread levels that haven't been seen for the last few years versus germany. and i think there's potential for another 30 to 40 basis points in that narrowing in terms of spread, this is germany, in some cases. >> philip tyson from icap speaking to us there. spain raising to euro lows. india comes into focus this week to give clues on whether further rate hikes are in store for asia's third largest economy. we'll be discussing that at 10:40 cet. and thousands of protesters block roads in bang koch in the attempt to shut down the city and oust the prime minister from power.
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we look at the potential economic impact at 10:45 cet. and airbus unveils its 2013 order numbers. can it regain the title of the world's largest aircraft maker? we go live to paris in just about 20 minutes. and in the wake of a data breach that could affect as many as 110 million americans, we hear from the target ceo about his plans for some major damage control. and finally, detroit auto show revs up to show you the hottest cars hitting the roadway this year. we'll go live to the motor city at 11:30 cet. phew, i need a break now. we'll see you afterwards. and this will be your premium right here.
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you're watching "worldwide exchange." >> welcome back to the show. we just had moody's comments saying u.s. money market funds boosted the european bank exposure by 11% in 2013 in the fourth quarter of 2013. focused recovery play numbers are out there as the european financial sectors are one of the key focuses for 2014, too.
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now let's move on, a deal to freeze iran's nuclear program will come into effect next monday. this is aimed to create a long-term solution to the standoff over iran an nuclear ambitions. nbc's kristen welker reports. >> reporter: on a diplomatic trip to paris, secretary of state john kerry welcomed the news of the nuclear deal with iran and also answered critics who argued the obama administration is too eager to trust a country that has a history of cheating. >> as this agreement takes effect, we will be extraordinarily vigilant in our verification and monitoring of iran's actions. >> reporter: the deal calls for iran to freeze parts of its nuclear program in exchange six countries including the united states will gradually ease about $7 billion worth of economic sanctions and only if u.n. inspectors confirm that iran is complying. the deal is short-term, six months, giving negotiators time to hammer out a broader
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agreement. nbc's ali arussi is monitoring reaction from iran. >> deputy foreign minister achi said all sticking points have been resolved and iran would be receiving $4.2 billion in seized oil revenues. while tehran would scale back its enrichment program and allow frequent inspections. >> reporter: in washington the deal was met with deep skepticism. republican house majority leader eric cantor called the agreement deeply flawed and said it does nothing to reverse iran's nuclear program. but democratic congressman adam shift disagreed. >> i think this is the best opportunity diplomatically to resolve and put an end to this nuclear weapons program or program with that potential in iran. so i think we have to pursue it. >> reporter: while the debate continues on capitol hill, foreign policy experts say now the hard work begins for negotiators. >> what's coming next is the real challenge, is to convince the iranians that a project that
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they have spent 20 years and billions of dollars on that has involved thousands and thousands of people and is the pride of the iranian revolutionary guard corps should actually be dismapled. that's going to be very difficult. >> reporter: a majority of senators including 13 democrats support a bill that would impose new sanctions on iran if the country violates the deal. the president has threatened to veto the legislation arguing it could derail the agreement. steve sedgwick is joining us now onset. steve, as we just pointed out there, now the real work begins, how confident can we be of this working and the iranians following through? and what are thement ply cases of that? >> i don't know. i'm not an expert on geopolitics in iran, but i do know about the ramifications for the oil market. this is the real key, because the iranians are very excited about obviously getting back into the export market in some fashion. they and the iraqis for a very long time have had this big
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battle about saying, we've got more reserves than you, no, we've got more than you. so 150 barrels underground is what they both say they've got. the early estimates are close to anywhere near true, this challenges the supremecy of the middle east and broader opec. so that will be interesting. and the iranians have been it in-picking and fighting against each other in meetings previously as well. i spoke at the last opec meeting in december to the iranian oil minister, and he was very excited about what the removal of sanctions would have on production. but what's interesting is listen to the level of oil he thinks he can produce. >> i hope after sanction we will produce -- after lifting sanctions immediately -- >> for 2014? >> after lifting the sanctions. >> so that's the middle of 2014, you are hoping to produce 4 billion barrels a day. >> we can, technically.
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>> technically he says 4 million barrels a day. this is all interesting. we have to get into the nitty-gritty numbers, but presenting the bear case for the price of oil, which is what they really care about, you have light swede crude trading at a significant discount as we can see, $92 a barrel to where brent is trading to $107. now back to opec, if all the guys say they can produce what they think they can produce at some stage this year, then it gets interesting. the iranians getting an extra 2 million barrels on the table. the iraqis putting an extra 2 million on the table. they need to find 700,000 more to get up to where they need to balance the books, which is a key year ahead of the presidential elections in 2015, and the libyans are producing nowhere near what they could produce if they settled their internal issues. that could mean 4 million barrels plus onto the table. that gives us the question then, is the world going to need this?
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the world has quite a lot at the moment, so there's a significant downdraft on the oil price. herein lies the problem, oil from opec into the united states already trades at a significant discount to wti. they trade at a $25 to $20 discount to the united states, which takes it down to $85 a barrel, which then becomes competitive with shell. so that is a very big bearish scenario for the oil price. here's the bullish scenario. ford last week said their sales in china were up 49%. the chinese only have 44 cars per 1,000 population at the moment. the americans have 600 cars per 1,000 population. what if the chinese triple to the world average of 135 cars per thousand? what i'm saying is -- well, here's one more, back at the height of the crisis we were demanding globally 83 million barrels a day, we are already back up to over 90 million
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barrels a day. the iea which represents the consuming nations thinks by 2035 we'll get up to 100 million barrels a day. my point being is, great we get the iranian oil, great we get more shell and the iraqi oil, et cetera, et cetera, we are going to need every barrel. therein lies my case. for equalibrium. >> i'm speechless. i know you said you are not an iranian specialist, but i saw the nuclear chief suggesting over the weekend that if the bill going through the iranian parliament passes, they have to accelerate their nuclear enrichment process. >> yeah, it is a key process to get the oil back on the process. despite the american dreams, sorry for the u.s. viewers talking about energy independence, look at the numbers. your shell has a limited
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utilization. the americans import 7 million to 8 billion barrels a day. they are still producing at levels that they have not for decades, which is great. >> are you all bull then? >> no, i think the market is in beautiful equalibrium. i think a lot of people are happy with it. >> so you took a long time to a say trade. talking about the shell industry, they are investing $48 million. this is the first french company to commit to the u.k.'s oil and gas development. the investment though small is seen as a boost to british government's attempts to lure companies to develop shell case. and british engineer amec
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has agreed to buy foster wheeler in a cash and share deal which values the swiss firm on 9 billion pounds. the ceo appeared on "worldwide exchange" in december last year said that the deal would more than double the mining services' revenues such as latin america. if the deal completes, the foster wheeler shareholders will receive $16,000 in cash. they are seeking a u.s. listing in connection with the transaction. shares in foster wheeler, which is listed on the nasdaq, are up more than 17% in the last three months. it will be interesting to see how that stock reacts when the u.s. markets open later on this morning. now valerie truella, the long-time partner of francois
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holland was hospitalized over the weekend. stefan is in paris to talk through this with us. when i first saw the story, i had to wonder if this is going to help francois holland's popularity. having a younger girlfriend didn't do the defense minister any harm, did it? >> he is already suffering very low approval ratings. well, i'm going to show you the gap between france and the united states, even between france and united kingdom, a large majority of french people, 77% according to a new survey, believe that it's a private story that should involve only francois hollande, so french people are indulgent after this report. and what has it been for francois hollande? 84% of the french people claim that the story is not going to change their view on the french president. 13% say it will affect their view of francois.
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and 3% still believe that it's going to improve their view on francois hollande. still on the political ground it will make things perhaps a little different for hollande due to hold a press conference tomorrow to outline his economy policy and hopes to make the country more business-friendly a. hollande is expected to announce flexibilities in exchange for job creation, so that was supposed to be the top story for him this week, but after what happened just before the weekend, and obviously the questions at the press conference and the headlines after the conference are more likely to be focused on the mistress gates that was all over the press this week. >> mistress gates, given the hassle he gets over his performance of the economy, you have to wonder which questions he would prefer right now, stephane. thank you for chatting with us. for now, if you have any thoughts on that or anything
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else we talked about during the show this morning, e-mail me, worldwide@cnbc.com or tweet me, of course. now, still to come on the show, as earnings season kicks off in the u.s., our next guest says 2014 is set to be a landmark year for equities. another hour? find out which assets you should own coming up after this.
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welcome back to "worldwide exchange." was it just the weather? investors continue to digest friday's job surprise with stocks in europe trying to stay in the green. banks leading as the regulators decide to water down debt rules. give diplomacy a chance. president obama warns against imposing fresh sanctions with iran after it completes its deals with world powers to halt the nuclear program for next monday sending crude prices lower. typeland at a standstill as protesters put a stranglehold on bangkok in the heart of the city. and shares of nickel miners getting a boost after indonesia bans on process mineral exports.
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well, let's give you a look at how the european markets are trading so far this morning. we're eking out further gains this morning. the outperformer there, the italian markets up .70%. as i mentioned, the banks are in focus after regulators are lessening the rules on ratios, meaning they have to allow less capital going forward. now disappointing u.s. jobs numbers may have kicked off 2014 with more of a whimper than a bang, but the next guest says the outlook looks distinctly positive as western economies continue to pick up momentum. bernard invesco is here with us, thank you for coming on the show. can i ask you which region of equity markets will outperform this year? where should investors be looking?
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>> obviously, we are looking where they are more attractive for us is in europe, obviously, in the eurozone, particularly, and some asian markets as well. so from that starting point, asia and europe are the best place to invest going forward. even if the momentum matrix is ushering different in regions at some point. >> which sectors in europe? >> you mentioned the banks this morning, it's obviously very sensitive to one of the decisions or rumors, for instance, like the basil three perspective agreement that could be much more in line for them. so banks in some cases, what has been called the value numb growth typical companies, the very country to what performed in the first half of last year, so we've had an expectation to september and october of last year, and it's slightly to go for a couple months still.
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>> you also expect the u.s. markets to do well this year. they are all the same trades that everybody's talking about. does that raise any concerns for you that actually everybody has the same views right now? >> yeah, there's obviously a huge consensus that it's a concern for us. obviously, you still have a big tailwind for this from the u.s. market. yes, the consensus that big is a concern, but the earnings results are still there. and it justifies plainly what's been going on for the past few years, so there's still earnings, there's still momentum. and the economy background is still there supporting the u.s. economy and the u.s. stocks in general. so they are still having plenty of reasons to be there even if it is more cautious. >> what are your expectations for the earnings season? a big week for the u.s. banks this week, in particular. >> yeah, you've been seeing, as usual, for the past few weeks,
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earnings expectations being trimmed down. so a little bit, a little bit lower expectation would lead to positive surprises going forward. so we're entering the season quite confident so far. >> you say bearish on emerging equities, is it so easy to jump on the bandwagon of expecting lower growth from emerging markets this year, what about those in the developed markets if we're expecting potential surprises from europe, potential surprises from u.s. and the likes of japan, too? >> actually, we're guessing more and more eager to jump into the emerging markets going forward. but still we do not, for the moment, because the flow is a capital out of the emerging markets in general are still massive, money keeps going out and still the economy contacts over there, be it inflation or growth accelerating in many countries, is a concern for us.
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so when the evaluation is not quite as attractive over there, but still not enough for us to get back in, but we're quite aware of that and waiting for some more appealing moment to get back in, particular looking at the flows and waiting for them to stop getting out of there. >> bernard, as a frenchman, i have to ask your opinion on this. obviously, vital to your trading strategy right now, do you think francois hollande should be left to his own devices, or do you think the press have a right to intrude on his personal life? >> well, i have the impression that the personal life of presidents and politicians in general over here in paris is quite, scene quite differently from how its been handled in other countries, but still from the market perspective, i don't the impression it has much consequences for us. and, in general, the political
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side on which the governments are that correlated with market performance, so this is not something i do care a lot about, to be honest. >> that was a very serious answer to that question. thank you so much for taking it seriously, bernard aybran, ceo of invesco am. if you want to e-mail us on the points we are discussing, you can, worldwide@cnbc.com is our e-mail address. and my twitter handle as well. now, change of pace. the 2014 detroit auto show kicks off today. and there's already plenty of news. daimler's ceo says they may build another factory in north america to ramp up global production. he says no decision has been made as yet, but he also said there's a shortage of vehicles in every market. and demand for new vehicles such as the mercedes s-class has been
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brisk. daimler has seen gains up .70%. we'll be talking in more detail about the import sector in the next hour. for now, ford is expected to unveil a new version of its top-selling f-150 pickup truck at the auto show today. it will be the first high-volume vehicle made of the lighter metal. the new f-150 is act 700 pounds lighter, which should increase fuel efficiency. let's take a look at the performance of ford's stock in the last six months, down by just over 9%. that's interesting. that's the performance in the general market up .80% so far this morning. general motors' ceo says the company is very close to introducing a dividend but wouldn't be more specific. gm last paid a dividend in may
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2008. they also say the european car market has baottomed sure but i sure mow fast it will rebound. we'll look at gm's shares trading in the general markets, relatively unchanged, down by .02 and in the last six months up by 4.7%. cnbc's phil lebeau has full coverage from the detroit auto show throughout the day, including the only live interview with the incoming gm ceo mary barra today at 8:00 a.m. eastern on "squawk box." now airbus is expected to give a glimpse of the ongoing battle to beat u.s. rival boeing. stephane is back to give us a preview. what should we lookout for? >> what we know already, julia, is that 2013 was a record year
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for the industry. what we know is that airbus will lead the race in terms of new orders for the last year, but it will be behind boeing in terms of deliveries. we are expecting airbus to announce 1,412 net orders for the last year, that's roughly 57 more than boeing. however, in terms of deliveries, they are expected to beat their own expectations at 625 deliveries, but that would be less than boeing, which last week reported 648 commercial aircraft deliveries. confirmation will come in less than an hour from 11:00 cet. we'll have the ceo of airbus first on cnbc at 12:40 central european time. so stay with us, obviously. >> stephane, great to chat with you. thank you for that. now john strickland, director of consulting, is set to talk about this more. stephane was just saying there, net new orders of 1,412
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expected, 57 more than boeing, so one's actually clocking up more, but the future of the new orders is better as far as airbus is concerned. >> this is a little bit of a pr exercise between the companies. you have to put it in the context that we have two global giants here, boeing and airbus, they are both the predominant players in supplying aircraft to the world's airlines. i'll put a caveat on that, we are seeing a new breed of manufacturers coming up in the short hold, small regional jets, but we are talking about airbus and boeing. when we look at what they said before today, the performance differs as far as what aircraft you're talking about. the large aircraft, by which we mean boeing's 747, and airbus's double-decker. airbus has done better by boeing
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by setting more orders, but this segment of the market is quite limited. the real battleground in the long hold market is between the new generation small body jets. boeing is ahead with the 787 having about 900 orders. and the value per plane of long equities is higher, so airbus may be leading orders, but a lot of the orders are composed of the short hold aircrafts. so you get more of them over the boeing planes, but the value of the plane is lower. >> the talk that airbus will look to revamp the a330 over the -- they have not said when they will do this, how much of an impact will that have? the ac 50 is coming online this year. whatever they do with this
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cannibalizes the sales of the a350, or are we talking about something different sneer. >> you're right, that's a risk for the aircraft, the a330 is a very solid 20-year history, very popular with airlines and a phillips in the orders because of boeing's own delay on the dreamliner, so airbus profited from that. but they do have to walk the tightrope, so to speak, on that question about their own new model, the a350, they don't want to damage sales of that, but if it sees the ability to grab a few more relatively late cycle orders on the 330 at expense of boeing on the 787 by reengineering and improving the efficiency of the aircraft, that's something to look at. >> john, great to talk to you. we'll look forward to hearing what they say later, john strickland. coming up, the ceo of airbus joi joins cnbc for a fascinating interview with the title of the largest aircraft maker.
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and we'll be discussing some of those points with him, too. and still to come on the show, protesters flood the streets of bangkok in a bid to force the prime minister out of office. so will ongoing instability rock investment into thailand? we'll be discussing right after the break.
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european banks are celebrating after regulators agreed to relax the rules designed to improve leverage ratios. the decision is a relief for global lenders who fear raising billions in extra capital. the new standards are being drafted by the basil committee tasked with reducing banks reliance on debt. we are in frankfurt to talk about the german bank reaction to this, they have been lobbying hard across europe to prevent these measures being too stringent. how are the german banks reacting? >> well, actually, the bigger the bank, the more benefits from that watering down of those rules. pardon. to be introduced by 2018, so what we are looking at, the new rules are saying now that banks are allowed to net certain
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activities. they have trading partners as well to not have off balance sheet beakers inside the calculation to calculate elaborate ratio. all that is of course aiming at reducing the balance sheet of a bank because the leverage ratios calculate by setting the capital of banks have in relation to the total balance sheet. and thus the smaller the balance sheet, the less capital the bank needs to fulfill a certain leverage ratio requirement. the regulators over the weekend convened in basil to come up with the compromise, and they are looking into the 3% leverage to be introduced by 2018. so that's really positive news for the banks. there was a lot of lobbying going on because for a lot of lenders that would have meant billions, not only millions of euros or u.s. dollars to keep on
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their balance sheet and not be able to give them to shareholders or to make them work in other directions in order to reach such a leverage ratio. so today, really, positive news. deutsch bank shares are up 4%. so very good day for banking shares. back to you, julia. >> thank you. i like the rule of thumb. the bigger the bank, the better the rally today. great to chat to you. bangkok is in shutdown mode as protesters call for the overflow of the prime minister. they seized seven sites and are blocking major road intersections. the leaders have rejected compromised talks with the government. meantime, red shirt supporters of the prime minister have started rallies in several regions on sunday. but for now steered clear of bangkok. now joining us on the line from
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thailand is prinn panitchpakdi. it seems that things are pretty calm for now. >> yes, i think this began from the 31st of october, it was a smaller group of 30,000 people opposing the amnesty bill and reform, which later was ruled unconstitutional by the court. they are morphing into the larger opposition attempting to overflow the government, which they claim lack ability and trust of the people. we have seen a few minor shooting incidents in bangkok, but now they are moving into the more central area of bangkok occupying seven major sanctions across central bangkok,
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including the famous intersection. for the crowd, it's a large number, but there's music being played, the crowd is in good nature so far, and there's so far no violence, no weapons being carried around. and i look for things to change in the coming days. >> what do you expect to take place on february the 2nd? and it looks like neither side is going to accept the other winning, so where do we go from here? >> the election on the 2nd of february is unlikely to happen now, i think. if it goes ahead, as you say, we are unlikely to be able to open parliament with 95% of them elected, thereby you can have open elected with 95%. the prime minister is calling for an emergency meeting to consider a proposal to postpone the election until the 4th of may. so they will look into this to try to find a resolution before a proper election can be held. the main opposition party is
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boycotting the election, so i doubt there's a proper election in any sense of the word anyway. >> what's the best case scenario, to see political deadlock, how does the economy manage this as we are in peak tourism season? we need to see export growth in this country. we are talking about reforms last year, which is a positive stat, how concerned are people? >> i think businessmen are extremely concerned and seven main businesses and organizations have gotten target already to try to be the middle-man to construct a mediation between the government and the opposition protesters. >> prinn, i have to jump in, we have to take a quick break. it was brilliant to chat with you. after the break, we'll talk u.s. strategy earnings season and autos. stay with us.
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welcome to "worldwide exchange." these are your headlines from around the world. was it just the weather? investors continue to digest friday's job surprise with stocks in europe trying to hold in the green. banks leading as regulators decide to water down basel's debt rules. give diplomacy a chance. president obama warns against imposing fresh sanctions on iran after it completes its deal with world powers to halt its nuclear program from next monday, sending crude prices lower. inside the bull's-eye, weeks
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after the retailer was hit by a massive data breach, target's ceo speaks out. in an exclusive interview with cnbc, he says he's confident his stores are safe and secure. and thailand at a standstill as protesters put a stranglehold on bangkok blockading major intersections in the heart of the city. you're watching "worldwide exchange." bringing you business news from around the globe. well, if you're just tuning in, thank you for joining us bright and early here on the show. let me give you a look at how the markets are faring ahead of the u.s. open today. and as you can see, we're looking like we're going to see a lower open, though there are a few hours to go yet. as you can see, the dow futures indicating points lower by around 36 points. the nasdaq indicating lower by 9.5 points. and the s&p 500 indicating lower
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by around five points. the s&p 500 managing to track around .20% gapes after the payrolls number, so lackluster trading as far as that was concerned. but at markets here in europe managing to digest some of that, too. as you can see, a choppy session for the asia trade with a focus on china trading n particular. five ipos canceled their figure to the banks as regulators agree to soften regulators in regard to the amount of capital they have to hold. this is a performance of the individual markets, as you can see. we'll start with the ftse 100 here gaining by around .10%. the german markets gaining .30%. and the french markets up .20%. and the ftse m in italy up.60 kt. we are still seeing the outperformance of the periphery markets, in particular. we'll break it down to the
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individual sector performance here. as i mentioned, one of the key outperformers is the banking sector, in particular. we heard earlier this morning from anetta the bigger the bank, the better gapes we're seeing with the less capital they were anticipating having to hold. in particulars on the downside, the likes of utilities and household goods tracking down by around .60%. we have been waiting all morning for airbus to announce the number of orders. we've got that press conference on and they are just starting to release some of their numbers. in particular we'll be talking about that again later on in the show as those numbers come out. let's take a quick look at the performance of the commodities markets. remember, we were seeing dollar weaker earlier this morning. slight change around as far as that's concerned. we're seeing gold now slightly weaker, but we're only talking .10%. slight weak in brent and crude,
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positive reaction as far as the iran deal to reach their accord and then reduce the enrichment process for their nuclear weapons. so oil coming off the anticipation of further oil coming out of iran there. and nickel, of course, the big gainer in indonesian exports. the other focus has been china. their currency touched a record high against the green back in early asian trade, this after the central bank set an all-time high midpoint to reflect weakness in the dollar on friday's session. analysts polled by reuters say this could appreciate by 2% to 3% this year. and remember, we are trading at 20-year highs. let's take a quick look at what's going on as far as the treasury markets are concerned. and the one we can't avoid looking at is the ten-year treasury number after the payroll number, the 11-basis points in terms of yield trading near the 2.86 level.
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heading into the u.s. level, the prifty spreads are continuing to tighten. we'll take a quick look at the rates, i was talking about the dollar earlier. the dollar slightly higher here to relatively unchanged versus euro/dollar. the dollar/yen is near the 1.33 level. let's check in on the markets in asia. li, talk to us about how we are seeing the equities in the region performing. >> thank you, julia. china markets very much in focus today, but they are not able to get a lift from the postponement of five new ipos. as you just mentioned, this comes after the country's security washed off and announced new measures to tighten the ipo market. under the new rules, issuers and underwriters have to write release alerts if it is priced
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higher than its peers. and authorities will also carry out random spot checks to make sure no non-public information will be disclosed to investors in road shows. the shanghai composite ended down .20%. the shenzhen down by about the same margin. and the chinese market added.70%. in other asian markets, they rebounded a bit today as the weak u.s. dollar revived speculation that the fed may retain its stimulus program for a bit longer. indonesia's composite ended higher by 3.2%. the kospi added half a percent, but australia closed at a three-week low down by .40% with losses in banks offsetting resource stocks. as for big movers, chinese property developers took a beating today on both of the hong kong and the mainland forces. china's led ministry plans to form a nationwide registry
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system. this seen as a precursor for a national expansion of a property tax trial. that's why we are seeing those heavy sell-offs for these property stocks. back to you. >> li, good to talk to you. u.s. payrolls were down in december with only 74,000 jobs created, well below expectations of a near 200,000 gained. this coincided with a drop in the unemployment rate to a five-year low, 6.7%, largely due to people dropping out of the labor market. piers cowen is joining us now. we've had the whole weekend to digest this data, weather, that's it, move non. >> by and large, yeah. i think weather definitely played a role. you can see that by looking at the construction job creation, which there wasn't any, so i think that's quite a good indicator the weather did play a role. you can always, i don't know, it's psychology.
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when you get a really bad number, you just try to explain it for weather-related or whatever it is issues. when you have a good number, everyone is really bullish and wow, this is amazing, the economy is on fire. i think that's quite a good indicator of sentiment at the moment. the payrolls number, i don't know, the more payrolls numbers i go through, the more skeptical i become as to how important it is on the day its announced. >> there are revisions. you can't pay attention to a payrolls number because of the revisions. >> exactly. we have a bigger revision in november, so that offsets the employment rate. 6.7%. we're almost at the 6.5% fed threshold that they use for their guidance on raising rates. they did tweet last month's meeting that they won't look to raise rates until unemployment
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falls below 6.5%. but the big question is did the payroll number on friday alter the way the fed or the pace that the fed may taper that? and categorically no. the fed are not going to look at friday's payroll number and say we're going to hold off on tapering. with the unemployment rate dropping sharply, they can't be in the position where the unemployment rate is at 6.5%. they haven't started tapering yet. they are over that. and taperings, we are on it, we're on this boat and nothing's going to change this direction, really. we're tapering into zero by the end of the year. and it's all about ford guidance from this point. whether they alter their guidan guidance, we'll wait and see. >> piers, stay there. we'll look at the airbus numbers feeding through. i'm going to give you a quick look at those.
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airbus saying they are beating boeing on orders. remember, john strickland said it's a pr exercise, watch out for that. but they are saying they have taken 1,619 gross orders, delivering 626 jets. they aim to sell 30 in 2014. they plan to ramp that up from 2018, in particular. they plan the first a350 deliveries in 2014. we knew that already. and they are saying they are reiterating the a350 break even by the decade end. so by 2020. and confirming a380 break-ins by then. so both of those things are what we have heard before. they are posting record jet deliveries in 2013. and that's airbus. remember, we're going to be
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talking to the ceo right after "worldwide exchange." so watch for that. we'll give you a look at what is on today's agenda in the united states. we have dennis lockhart speaking about the economy this afternoon. it will be interesting to get more fed speak at 2:00 p.m. we also get the federal monthly budget statement. as for earnings, look for results from fast food giant wendy's. we'll take a look at today's other top stories. target's ceo is speaking out publicly for the first time since the retailer was hit by a massive data breach during the holiday shopping season. critics have questioned why it took target four days to come clean about the incident, which now may have impacted at least 70 million credit and debit card accounts. and an exclusive interview with becky quick, gregg steinhafel
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says it is safe to shop at his stores. >> as time goes on, we are going to get down to the bottom of this. we are not going to rest until we understand what happened and how it happened. clearly, we're accountable and responsible, but we're going to come out at the end of this a better company. and we're going to make significant changes. i mean, that's what you do when you go through a period like this. you have to learn from it, and you have to apply those learnings. and we're committed to do that. >> what can you share? was it a point of service situation? was it an outside vendor? what happened? >> we don't know the full extent of what transpired, but what we do know is there was mall ware installed on our point of sale registers. that much we have established. we have removed the malware to provide a safe and secure shopping environment. this investigation is ongoing and it will take some time before we really understand the full extent of what's happened. >> the nationwide probe has been launched on the security breach
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and the reports say more than 30 u.s. states are involved. target shares are trading slightly lower by the last few months at 1.8% closed right now on that box, but eventually we'll see how that stock reacts. you can see more of becky quick's interview with the target ceo gregg steinhafel at 6:00 a.m. eastern time. neiman marcus announced friday their customers' debit and credit card information may have been stolen. they don't know how many were affected, but it was alerted to the breach back in december. reuters reports at least three other well-known u.s. retailer were hit by hackers during the holiday shopping season in the same manner as target. walmart, home depot and macy's tell cnbc they were not affected. now earnings season officially kicks off in the u.s. this week with jpmorgan's results on tuesday morning.
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the earnings for the s&p 500 are expected to grow 6.1%, but revenues by just 0.3%. factset estimates earnings growth for the sector will rise 22%. piers, talk to me about earnings season, it is typically a good one, isn't it? >> yes, it is. the earnings season, generally we have a pattern. if you think about -- let's talk about the earnings to start with, so earnings growth, what happens is that every quarter for i can't remember how long since the crisis, we have had declining earnings expectations as we have been going through the quarter. so it goes back to october where we're expecting earnings growth of 9.6%. but today that 9.6 has come down to 6.1. so you always get this as you go through the quarter, stocks guiding lower, it's a good strategy. you uh play down expectations.
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>> expectation management. solo to do well. >> this is how things work. here we are with the lowest earnings expectations we've had for this quarter. and then what happens is companies come out and generally beat earnings. and the s&p, here's a good stat for you, the s&p has rallied every earnings season since quarter two 2009. every single one. >> putting numbers aside, what do we want to hear from them? strong guidance for 2014, what do we want to hear? >> the absolute most important thing is what they are going to talk about for the year ahead. normally companies will only give quarterly guidance, so for the next quarter, but start of the year they tend to, that's the course they tend to give, annual guidance. we really need to see them being encouraging and positive about this economic momentum that's building. we need to see them being more optimistic with guidance. and if this whole 2014 story pans out as we expect, where we expect this momentum in economic
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growth to build and build, then we're going to need companies to start being more confident in terms of their capex and so on. we need to see that message delivered during this earnings season. you mentioned the financials up 20% earnings growth expected, but you have quarter four in 2012 that was actually very bad for the financials. so the comparables -- take that into account. it is not like the financials are on fire, necessarily. >> it's a catch-up. we have to leave it there. piers curran there. iran's promising to curb their nuclear activities in exchange for sanctions. we'll look through the ramifications after the break. hmm, fifteen minutes could save you fifteen percent or more on car insurance. everybody knows that parker. well,
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welcome back to "worldwide exchange." obama urges congress not to issue new sanctions on iran as the countdown begins on a new deal. the european markets struggle to stay in the green as they watch the u.s. jobs payroll number. and airbus posts a record for new orders with more than
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1600 planes on its books in 2013. iran's deal to curb nuclear power in exchange for an easing of trade sanctions is a step closer. acting as lead negotiator for a block of six countries, the u.s. has a six-month implementation process beginning on monday. in the meantime, u.s. president barack obama is battling against a new bill in congress, which would impose fresh sanctions on the middle eastern country. now after the start date for the deal was announced, the price of brent moved slightly lower, which brings in an analyst here with us now. iran could be given the basic needs to comply. >> i think obama has a difficult balancing act because he's trying to move forward towards the comprehensive deal with iran. remember, we only had the announcement of the interim deal
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starting, that's a six-month very temporary deal while they try to negotiate a permanent deal. but on the flip side, he's also got to persuade congress that this did lo macy is going to make the middle east safer and reduce the threat posed by iran. so every time he tries to get closer to a deal that iran can accept, he makes a bigger struggle to get congress on his side. and i think that's going to be the big balancing act through the whole of 2014. and it's a very hard one. >> so assuming that he does manage to prevent further sanctions, how quickly do you think we could start to see iranian oil come back to the markets? >> well, i don't think during the time of this interim deal we'll see much additional iran an oil. >> so not for the next six months. >> and probably not beyond that. people are talking about the interim deal being extended because they are taking too long to negotiate the technical details. we are probably not seeing more iranian market for 2014. >> as far as oil prices are concerned, the lack of reaction
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really that we have seen in brent actually makes sense. >> i think it does. we saw something similar monday after the deal was announced. in november we had a little dip in asian trading but prices came back up. as the market digests this and realizes this is an imminent return of supplies, okay, we have a diplomatic process ongoing, but until there's confidence that supplies are coming back, that doesn't really impact the market balance. >> so i have two quick questions here, first iran is negotiating for a good swap where $1.5 billion a month, what's going on here? is this a way to allow them breathing space without having to agree a deal with the international community of the six large powers negotiating? >> this was a bit of a surprise story that came out friday. and i don't put too much credence on this meaning a half million barrel a day increase in exports. russia is one of the 5 p5 plus 1 powers. it would be hard for them to
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undermine it. this may be a misunderstanding about a deal that could be the return of the caspian oil swap or something implemented one the comprehensive deal is reached, but i don't think we're about to see a big increase in iranian exports by russia. >> interesting. i'll make sure steve listens to you and watches this tape back. steve was talking to us about 4 million barrels coming back online according to the iranians themselves. we just had an italian auction out this morning, so i want to show you through details of that. italy has sold 4 billion years' worth of new december 2016 btps with a yield of 1.51%. they have sold 2.5 billion at a yield of 3.17%. and they have also managed to sell a 1 president 69 billion euros worth of september 2028
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with a yield of 4.26. and that's about 30 basis points lower than when they were raising cash on november the 13th. so these yields continue to pull back. actually, the three-year bond auction, it's a new era, euro era lifetime load. let's take a quick look at the futures trading ahead of the open on wall street. passenger: road trip buddy. let's put some music on. woman: welcome to learning spanish in the car. passenger: you've got to be kidding me. driver: this is good. woman: vamanos. driver & passenger: vamanos. woman: gracias. driver & passenger: gracias. passenger: trece horas en el carro sin parar y no traes musica. driver: mira entra y comprame unas papitas. vo: get up to 795 miles per tank in the tdi clean diesel. the volkswagen passat. recipient of the j.d. power appeal award, two years in a row.
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welcome back. airbus has posted record orders for 2013 outpacing its u.s. rival boeing. airb airbus' 2013 -- sorry, misreading there. airbus says there's room to increase production if the market remains as positive as it was in 2013. so stephane is in paris listening to these numbers, take us through what you're hearing from the ceo, stephane. >> first of all, last year was a record year for airbus in terms of new orders and deliveries. the european plane maker posted 1,503 net orders, which is significantly higher than boeing. there's about 150 aircrafts of difference between the two plane makers. however, in terms of deliveries,
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they both did not regain its crown last year with 626 deliveries. that is significantly lower than boeing, which posted for the last year 648 deliveries. now, also a couple announcements in the press conference. airbus is planning to sell at least 30 airbus 380 this year and believes the program will break even by next year. regarding the new aircraft airbus 350 made of composite materials, it's planning to get a certification for the aircraft by the end of the third quarter. and with the first delivery still planned for the end of this year. back to you. >> stephane, great to chat to you. thank you for taking us through the numbers. coming up, the ceo of airbus joins cnbc for a first interview as the space giant tries to regain the title of the world's
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largest aircraft maker. now piers still with us, talk through the top trades for 2014. >> so top trades would be stay long equities, not quite like we saw last year but still to the upside. the more interesting movements will be finally some dollar strength against the euro. i think that you'll see -- one of my contrary interviews will be gold. i like gold quite a lot. i think you'll get a good year for gold. i think that the inflation story has been very depressed in the u.s., but more so in the eurozone. we're talking about deflation risk and so on. up nation in china is incredibly low. i think that may have troughed, and i think you perhaps will see a lot of this qe money that's really not going into the market at all, mainly trickle in now. and i think you will see also, if this economic momentum continues in the u.s. in 2014, rain shower going to see
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consumer-driven inflation. and i think that this inflation ticking back higher is a cue for gold to reband off a terrible year last year. >> and yet you're saying that one of your favorite treasuries is gold bond. gold doesn't do well usually so explain the two trades. >> so gold got annihilated last year. and i think incorrectly. i think it's overdone. i think you will see a snap rebound. i think that the bond trade is more to do with an ongoing economic recovery. i think that -- i think that the interesting area will be the short end because i think you'll have to see short-end yields begin to create higher. this unemployment rate is at 6.7% in the states. 6.5% is coming. who knows, next month. and i think that rates going higher mid-2015, that's too far out. i think that's going to start to come in as we go through the year and i think short yields will rise curve flattening. >> and buy gold. >> yes. >> thank you, piers.
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welcome to "worldwide exchange." these are your headlines from around the world. was it just the weather? investors continue to digest friday's jobs surprise with stocks in europe trying to stay in the green. banks lead as the regulators decide to water down those basel debt rules. and give diplomacy a chance. president obama warns against imposing fresh sanctions on iran after it completes its deal with world leaders to halt its nuclear program from next monday. that's sending crude prices lower. airbus posted an industry record with more than 1600 planes ordered across 2013. the european plane maker now talking about taking back the top spot from rival boeing. and detroit rolls out the red carpet for the world's largest automakers unveiling brand new models at the north american auto show.
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you're watching "worldwide exchange" bringing you business news from around the globe. if you're just tuning in, thank you for joining us here on the show. let me give you an indication of how these u.s. futures are shaping up ahead of the trading session. i'm blending quite nicely into the background here. it does appear to be a lower open here. the dow joins futures indicating lower by 40 points. the nasdaq is down by 12 points. remember that ending the day up around 1% on friday's trading session, so taking back some of the gains. and for the s&p 500 indicating lower by just shy of 6 points, in particular. the u.n. markets, here's what's going on as far as the european markets are concerned. we have the u.k. indices heading lower right now by just over .10%. the german market is lower
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by .3%, sorry, higher. the banks are in focus in germany suddenly lifting the markets. the french market is higher by just shy of .30%. and the italian markets are higher by .60% raising three-year money today over in italy at euro era lows. how do you make money in these markets? that's what we care about. listen to what the experts have been telling us all morning. >> we should go back to more of a traditional drive to correct the financials, because we had a downside report on friday's market report, we have the numbers depreciating. going forward that will continue to be the case. >> further easing of sanctions can happen, which could potentially for the oil market allow visibility to iranian
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exports returning to the market. that's about a million barrels a day or so. and that event in conjunction with other possible supply increases does mean that by the end of 2014 we could be in a situation that oil prices are on a serious downward pressure. >> you mentioned the banks this morning, it's obviously very sensitive to one of the decisions on rumors, like this morning, the basel three perspective agreement that could be much more benign nor them. so banks, and in some cases, what has been called value numb growth typical companies. now we've been teasing it all morning, the 2014 north american international auto show is kicking off in detroit with the latest high-tech fuel-efficient models taking center stage. cnbc's phil lebeau is joining us live from detroit at the north american international auto
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show. from all the reports i have read on this, it's going to look hot but it's going to be green. how are the carmakers finding the balance? >> reporter: yeah, julia, one of the big themes this year, it's all about automakers putting more content, more features into the automobiles while also taking more weight out and making them more fuel-efficient. because they've got to meet higher mpg standards over the next seven or eight years in the united states. mercedes is a good example. let me show you the new mercedes c-class they unveiled last night at the north american international auto show. and you look at it and say, that looks like a typical mercedes c-class. they have upgraded and freshened it up with a youthful look to it. what's interesting, though, is it is 200 pounds lightser with more aluminum content in there. lightweight aluminum to make it more fuel-efficient. mercedes topped bmw for luck
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sur sure ri kroun /* luxury crown in the u.s. last year. >> we see about 5% growth globally. perhaps even 1% more for luxury cars, so together it's a good environment to work in. >> reporter: speaking of greater fuel efficiency, take a look at the new ford f-150. a lot of people are calling this the aluminum f-150 with the all aluminum body that will be combined with a new eco-boost engine to give the f-150 far greater fuel efficiency than the current f-150. remember, this is the best selling vehicle in the united states for the past 32 years. this is a big bet by ford with its big truck. and finally, the gmc canyon rolled out for everyone to take a look at last night here in detroit. it is the latest mid-sized truck from general motors. this goes on sale later this year. it was also a chance last night to briefly talk with mary barra, the incoming ceo of general
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motors, the first woman to run a major automaker. we'll talk to her live this morning on "squawk box." it's a cnbc newsmaker interview you do not want to miss. this is mary barra's only live extended interview here at the north american international auto show. a big day, julia, not only with miss barra but as well a number of automakers with big unveils coming up. and we'll be here all day long with that. back to you. >> thank you so much. we certainly basketball keeping an eye open for all those things, including the gmc out there. joining us for more on the auto sector, thomas beslin, head ceo at keppler shepherd. tell us why you are still bullish after two years. >> we have three major reasons. first, we are seeing a very favorable environment for light
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vehicles. we have it growing a bit more than 4% in 2014 after growing 3% in 2013. we think with europe turning, it's also key major support for european stocks as we have seen in the u.s., for instance, into 2009 and 2010, we are two or three years behind in europe. and thirdly, evaluation remains broad on the stocks. we are watching price earnings, and the cycle still looks effective to me. >> the automakers gave back a record amount of cash to investors last year, i think 11 billion euros or something, can they continue to generate that free cash flow and continue that dividend growth that we saw last year, in particular? >> that's one of the components we are using in our view. having investors to get to the rising flows is one way for
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investors perception to norm allize. we have the european dividend rising to more than $13 billion this year, going to $15 billion in 2015. when i look at the auto sectors for chemicals with a decade in europe, you have a number of high-quality companies that have been achieving high returns for four or five years and are returning a higher proportionate of their earnings to their shoulders. so for earnings multiple, expend. >> tell me how concerned you are for these particular stocks and what are your top picks here? what should investors be looking senate. >> currencies in our view for european names, the biggest headwind that we still have in
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2014, a much stronger euro against almost any currency. you also have the market currencies. these two combined will negatively impact earnings quite significantly. we think it's more of an offset by the trend in the overall demand and the turning point in europe. so overall we stay bullish for 20 2014. we are looking at volkswagon. and among the carmakers, we still like michelin. >> thomas, great to speak to you today. head of automobile sector research at keppler. coming up, the ceo of target opens up about the massive data breach that hit the u.s. retail giant during the holiday shopping season. hear comments from his exclusive
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interview with cnbc coming right up. welcome back. how is everything?
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european forces are higher as investors still weigh out the high jobs number. and airbust posted a record number for orders with more than 1600 planes on the books in 2013. the bull's-eye squarely on target as more information comes out about the massive data breach the u.s. retailer suffered during the holiday shopping season. seema moody is joining us with more. >> reporter: chairman and ceo of target is speaking out publicly for the first time since hackers stole data from card swipe machines at store checkout counters between black friday and mid-december. initially it was thought up to 40 million debit and credit card consumers were affected, but on friday personal data including e-mail addresses and information
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from 70 million customers was compromised. in an exclusive interview with becky quick, gregg steinhofel is reassuring that target customers are safe and secure. >> we are in the middle of the criminal investigation as you can appreciate and we can only share so much, but as time goes on, we are going to get down to the bottom of this. we are not going to rest until we understand what happened and how that happened. clearly we are accountable and are responsible, but we are coming out at the end of this a better company, and we're going to make significant changes. that's what you are dealing with when you go through a period like this. you have to learn from it, and you have to apply those learnings. and we're committed to do that. >> what can you share? was it a point of service situation? was it an outside vendor? what happened? >> we don't know the full extent of what transpired, but what we do know is there was malware installed on the point of sell registers. that much we have established. we have removed that malware to provide a safe and secure
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shopping environment. this investigation is ongoing. and it's going to take some time before we really understand the full extent of what's happened. >> and nationwide probes have been launched into the security breach. attorneys general from new york, connecticut and minnesota have joined the investigation, which reportedly involves more than 30 u.s. states. you can see more of becky quick's interview with target's ceo today on "squawk box" starting at 6:00 a.m. eastern. now on friday neiman marcus disclosed hackers may have stolen credit and debit card information from its customers. the luxury department store says it doesn't know how many people are affected, but it was alerted to the breach by its credit card processor in december. reuters reports at least three other well-known u.s. retailers were hit by hackers during the holiday shopping season in the same manner as target, home depot, walmart and macy's tell cnbc they were not affected. julia, back over to you. >> seema, thank you so much. have a great day.
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now american hustle was the big winner at the golden globe awards held last night in los angeles. they took best emotion picture, musical or comedy. the awards hosted by amy poehler and tina fey also recognized 12 "12 years of slave" which won best picture drama. stephanie stanton sent this report from the red carpet. actually, we don't seem to have that report. i haven't seen either of those movies, so i can't ad lib to tell you about them. coming up, strike up the band as the earnings parade is set to kickoff in the u.s. what can we expect from the flood of results over the next month? we'll get insight from the cme. stay with us. ♪ ♪ stacy's mom has got it goin' on ♪ ♪ stacy's mom has got it goin' on ♪
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welcome back. investment banks are rethinking internship programs and relaxing rules for bankers. bank of america merrill lynch circumstance la circulated a memo on friday recommending they take ten days off a month. morgan stanley has formed a committee to examine how to improve working conditions. meanwhile, president obama is going to be talking this week about how to create u.s. manufacturing jobs, one of the economic goals he set for greater attention in his second term. in his weekly radio and internet address, the president hinted his trip home wednesday to rally and focus on the manufacturing sector. now let's give you a look at what's going on in today's agenda for the united states. well, we've got atlanta fed dennis lockhart speaking. and at 2:00 p.m. we get the
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federal budget statement. and earnings from the fast food giant wendy's. now earnings season officially kicks off in the u.s. this week with jpmorgan's fourth quarter results on tuesday morning. factset says earnings for the s&p 500 are expected to grow 6.1%. revenues by just 0.3%. financials which dominate the calendar this week are expected to contribute the bulk of that growth. now scott bower, senior market strategist is joining us now. scott, what should we will booking for this week? so far the futures for the u.s. will be a weaker open this morning, is that a delayed reaction to the payrolls disseminating from the unemployment rate? what's happening here? >> i think what we're seeing is just a bunch of skepticism in the market right now. you know, we're at these highs and everyone is expecting modest earnings growth at best, maybe revenue numbers that aren't so
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great, so i would say that traders on the floor are kind of discounting that. traders on the floor are discounting that number that came out on friday. kind of throwing it away to say, this is going to get revised anyway, but the focus now like you just said really becomes on corporate earnings. we'll see jpmorgan and goldman sachs and intel, ge, really kickoff the beginning of the season here. and if we start to see some modest revenue growth, not -- it doesn't have to be anything over the top, but modest revenue growth, that's going to kick the market in the pants, quite frankly, and make it -- move the next leg higher. but the overall feeling, i think, out on the street is, well, it's time to take a pause, it's time to take that 2% to 3% downward move, but i don't know that that's going to happen. i think the rising interest rates that we've seen in the new 3% number that is now the norm, whereas six months ago that was the shock to the system. that was the shock to main street. now 3% is the norm.
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that has been digested. like i said, if we can start to see some modest revenue growth, i think we're in for a pretty good start to the year, actually. >> talk to me about gold right now trading at one-month highs despite everybody still being relatively skeptic on gold. is this just a temporary blick? >> same thing, like you just said, we've seen this big pull-back last year, we've seen a modest retracement back to the upside here. and it's kind of gone hand-in-hand with rates, though what we saw at the end of last week with rates really dropping down under 290 again, we saw the gold market rise. i think you'll see gold trade hand in hand with how interest rates are going, but i do see gold going higher from here. >> brilliant, scott, great to chat to you. scott bauer of trading advantage. that's it for today's show. thank you for watching "worldwide exchange." mine was earned orbiting the moon in 1971.
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good morning. target's ceo greggsteinhafel will talk to us and we'll have the exclusive interview. the auto show kicks off in detroit. gm could be driving toward a dividend. the automaker also announcing a recall of 370,000 full-size trucks due to a potential fire hazard. and goldman sachs makes a call on stocks. it's monday, january 13th, 2014. "squawk box" begins right now.
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good morning, everybody. welcome to "squawk box" on cnbc. i'm becky quick along with andrew ross sorkin. andrew has this morning's top stories. andrew? thank you, becky. making headlines, general motors' cfo says the automaker is close to reintroducing a stock dividend. they continue to believe they will break even in europe by mid decade. in other gm news just days before it learns whether a 2014 chevrolet silverado pickup truck wins the honors as north american truck of the year, the company is recalling 370,000 full-size trucks due to a potential fire hazard. gm's incoming ceo mary barra is joining us live from the detroit auto show at 8:00 a.m. eastern time this morning. also, southwest

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