tv Worldwide Exchange CNBC September 5, 2014 4:00am-6:01am EDT
welcome to "worldwide exchange." i'm wilfred frost. >> and i'm carolin roth. >> the ecb's surprise triple rate cut. european markets fall back. markets are anticipating a solid jobs number. but kenneth rogoff tells us the central bank is not ready to hike rates. reports emerge after shelling in the eastern ukraine hours before and rebels are
expected to confirm a cease-fire. the u.s. readying a fresh round of sanctions on moscow, regardless of any peace plan. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. and you're looking at live pictures from new port in wales where nato leaders are expecting a military flight path which is happening as we speak. >> there we go. that's the fly past. three planes and -- >> well, of course, we'll be back to nato throughout the day today. continuous updates from hadley gamble who is there. we'll be discussing the significance of those ecb monetary policy measures yesterday, which are obviously taken by the market as a complete surprise. >> absolutely.
we saw that huge rally yesterday and quite surprising to see this morning it's fizzled out. you have to wornld why. maybe it's because the market realized they did this because the european economy is weak after all. maybe realism is settling in.. >> the euro weakened significantly yesterday. today they force that and we're going to go out to steve sedgwick later to hear more about this and what people on the ground in italy are thinking about that. but for now, we continue to look at the nato leaders. there's been quite a sign today of the military of nato keen to highlight to potential aggressive what is at their disposal. this morning, we are expected to see that cease-fire take hold. and the rebel leaders yesterday said yes, if there is an agreement, we will try to stick
to it. we have reports of cease-fires so many times before. nerl neither side stuck to it. this morning, we've already been getting reports of shelling. now, we've been getting a view on the ecb's unprecedented moves from the shores of lake komo with a series of guests. >> liquidity, you guy assets and assistance. so, of course, at the enof the day, these assets, there may be a problem. but, you know, we see the u.s. and japan, all the other countries have gone to this avenue. the european central bank has been the only one not to go for reasons in the past. but now that inflation is at zero percent, why are we waiting? >> he went as far as he could. and it's not just what he's
doing now, but the signal he's sending about what is to come. it may not come in a rush, because they have -- they're very occupied with trying to set the standard. that's the big thing going on. that's going to be very painful politically for the ecb. potentially, the numbers are large, even, say, here in italy and they don't want to do other fights. after that's over, then they can say hey, we don't have any inflation. we need to do something, let's go do more qe. >> so just to have a short time working without all the bells and whistles around it would not work. you need to have cooperation. they have to be in the boat. you have to have a system that administered this short time working program. you have to have firms that know how to take it up and you have to have a consensus where you don't cheat. it is a great question mark, why can't they do this? they don't have a consensus in
northern europe. uniones and management going on the same rope. >> it's the main bucket of water. many have the planning, the planning in the banking system. do we have any pipes? from time to time, you see one. you see depasche, in the uk, we had almost every at one belly up. the central bank point of view is i can increase the pressure from the boiler, but i want to make sure that i have enough resistance in the pipes. >> lets get back out to steve joining us on the shores of lake como. your previous guest was talking about the problem in the eurozone. >> yeah, the plumbing does need repairing and the part of the plumbing is the transition mechanism claiming all this money is being offered by the central bank and getting it to the people who need it
throughout europe. it's enough to bring in a countryman. despite your surname, you have the president of the sterling industry. bdi. what about that plumbing? >> you know, money is very happy these days. it's even cheaper with 0.05%. but i think the cost of the money is not the real problem. as companies, it's not a question if the money costs 0.1% or 0.5%. you have to be just as confident and willing to spend the money. >> why then, sir, do i look at record german trade surpluses and i see investment levels at the percentage of gdp, many, many percentage points lower now
in germany. in europe, but in germany than they were a decade ago. >> you are right. they mentioned two points. it's quick by some european friends, but we should never forget, for example, our exports rise by 10% and imports rise by 9%. so all of our european friends are -- they should never forget we have an international chain and we have importing a lot. from our export on our friends, because investments are too low in germany. the european or the ecb average with the 20%. and at least three points make up to 80 billion euros.
>> very interesting. when it's talked about, there is enough flexibility on the fiscal side, as well, at the moment. they don't need more flexibility because the -- allow that, as well. interesting for the whole of germany. do i sense from what you're saying is you want to see more flexibility, you want to see more public investment, more private investment? >> we need more public investment and more private investment. i'm not speak iing spending mor money. i think austerity has been okay. but we have though shift from social expenses to investment expenses and innovation expenses. the last night months of the coalition, they care a lot about social expenses, yet to shift the policy into the future we have to care more about innovation, more about
investment. we have this meeting with merkel and we talk about these topics and i'm confident that they will take -- let me ask you a very important question. when you met herr merkel, did you discuss the party line is having on you and your companies? thousands have been at stake. >> i have a very clear position. we are very happy to have these two persons because i thinkite the right -- and i'm very convinced and i wouldn't give any support of cause. i wouldn't say to them what to do. but i have a very clear position on the long run.
the politics should not win. up front, we have economical interest. we might lose some money. but say let's, you know -- the long run and the global rights and the human rights. >> thank you very much indeed for your time. the german group stands behind merkel. thank you. >> thank you. >> you can compete. thank you. >> thank you very much indooid deed for joining us. the bdi, back to you in the studio. >> steve, thank you very much for that. by the sound of the helicopters, more important guests for you to interview this weekend.
let's have a look at european markets. they have been on a tear the last 48 hours weapons driven by thoughts of a cease-fire, thursday driven by the ecb action. but today, as you can see, the stock off 0.2%. if we dive into some of the individual markets, you can see that it's flat to down today, not significantly down. interestingly, germany just up 0.2%. it wasn't quite as strong yesterday as some of the proposedly weaker economies like france and italy, which were both up over 11% yesterday. today down 17 basis points, down 27 basis points respectively. now on to the bond markets. yes, we did see that and part of the big jobs number comes out later today. >> yields across the rest of
europe remain very, very low. as we've been saying for a long time, in the bond market at least, that had expected some kind of easing. the yield in italy, 2.3% today. fx rates, of course, yesterday, we saw the euro lsh dollar fall a massive 1.6% against the dollar. it's basically flat today, but it did, in fact, open weaker and recovered a little bit of ground. that meant that yesterday it fell less against the euro than the euro site. we're now joined by hans rheticare, from morgan stanley.
.which of those steps is the most significant, in your opinion? >> well, i think the message concerning the balance sheet of the central bank is the most interesting part of the exchange market. you remember when draghi said that the balance sheet should abobe increased to the levels of 112. the euro/dollar exchange rate down to 1.20. what you have now is upcoming u.s. dollar strength. nonetheless, the ecb is going to increase the balance sheet in the united states. the balance sheet is still not growing. you have less supply of u.s. dollar. i think the solo has the lowest yielding talent.
you have alternative funding policy surrounded. that is adding to dollar strength. by the european central bank yesterday, the yield level for peripheral bonds in europe and that makes this market less effective for investors. including most of the emerging markets segment. that actually implies there's no attractiveness in holdings. that's the biggest part of this euro/weakness is going to come when we are doing the repair job
on the banks, when banks feel ready to provide euro funding for global activities. that is what we haven't seen and i think that is going to become a big theme going into next year. therefore, you have to prepare for much lower euro levels. >> hans, i can't help but think that the ecb is now effectively targeting the exchange rate. novotny was saying the other night that he believes the exchange rate is going in the right direction. you get the impression that he provides the ecb minutes. fwlfr, it doesn't surprise me that this comment came from him. a zero boundary level from interest rates, how do you generate inflation expectations? how do you generate income? you need to look at the exchange rate. in other words, you have to
borrow inflation expectations from abroad and that is for what the exchange rate is for. and so urmt tyou remember the i meeting earlier this year and the authorities from japan into the direction of europe said you have to consider your strength of your exchange rate because you have a deflationary problem. that was a time when there was a rethinking of the basis and the ecb considering that euro/weakness is a actually, too. >> and hans, we've got the crucial u.s. jobs number coming out later today. >> yes, of course. we have seen rate and strength and that means the market will be following if there is a weak number. but the big thing, what is going
to happen with wages? the increase. which of those instruct tunnel unemployment in the united states is much higher. it does not take a lot to have wage dynamics coming in. and the market is taking that information very seriously. and you see that is how the short end of the u.s. curve is trading. the danger point here, u.s. long yields would break higher. of course, u.s. dollar strength will broaden out and affect higher yielding currencies. >> thank you very much.
that was hans redeker. and some comments from the uk foreign secretary, he says he favors going ahead with increased sanctions on russia. he says he can still lift them later according to an injury with the bbc. he also says there have been no commitments to take part in any air strikes in iraq, but the uk could control that possibility. just hours after a ewe containan officials, here is what they were saying. >> tomorrow at on o'clock p.m., the meeting will take place. i will address and give an rd on to the military headquarters for a cease-fire. i do expect a peace time will take place tomorrow. >> and we're now joined by nbc's albina -- on the phone. wove seep reports about shelling happening in the east of ukraine. what can you tell us? what is the latest? >> good morning. we're is in the city of mariopo,
which is a port town. last night, the shelling started heavily around the check points on the southeast of the city and these were the ukrainian check points. it appeared officials were point i ing. he thinks they are from all sides and there is a heavy heavy russian military presence in the area. this morning, we went back to the check points and there was certainly heavy fire coming in and out of the area. the mood there is very tense. the ukrainian army there is on the ready. there is no sign that this will seize by 3:00 local, which the size fire time is expected at. >> thank you very much for that. we're going to go out to hadley gamble who is in wales at the
nato conference. hadley, this is talk of a cease-fire but talk of sanctions regardless. give us an update. >> essentially, what we saw over the last 24 hours, really tough talks from eu leaders, nato leaders. it looks like we will see some action later today. basically, they want to rachet up these sanctions on mr. putin. they say there is a cost to what russia has been doing and it is time for russia to pay that cost. essentially what you'll probably see over the next few hours, they're going to have to come to a consensus about what they're going to do about a lack of cease-fire if that cease-fire is given an attempt to implement et. we haven't had word on that as of yet. we're going to monitor that situation. earlier, i got a chance to speak
to the eu president, the president of the council -- sorry, the commission, i had a chance to ask him about this. sangs are the way to go. definitely soft power sanctions is one of the things we'll see from him going forward. coming up on "worldwide exchange," flying from the nest, one of google's acquisitions.
. the internet is once again dominating things at the technology summit in berlin with homes, cars and devices talking to each other. live at fifa in berlin is louisa. >> guess who i just saw? angela merkel. but not the real one, an impersonator walking around here. we had a juggler yesterday, angela merkel impersonation is here. a lot of talk about how to get your devices talking to each other, of course. the sony ceo was telling me the day before yesterday why be in
the smartphone arena any longer. he was making the point that we're moving into the smartphone generation and at some point we'll move into wearable technology. the other type of technology we'll be communicating through tomorrow. therefore, it's important to be in smartphones. that's worth keeping in mind as we look at what type of technology is making the rounds now. with regard to interconnecting your home, i spoke to matt rogers earlier and they're the ones bringing smart thermostats to your home, smart smoke detectors, as well. >> it's been around for a few years in the u.s., canada and in the uk. that's one of the reasons i'm looking at ifa today. >> and what's the difference between the european market and the u.s. market? >> is the u.s. market really that much more developed? >> i would say the u.s. market is more inclined towards
comfort. whereas many of the europeans are worried about energy costs. heating costs are 60% or 65% of your home energy bill. >> how much is it going to set me back if i decide i'm going to be very, very smart and get a smart thermostat? >> for 179 pounds for a thermostat and 89 pounds for a -- >> isn't there an extra cost that's taken somewhere? how is the cost structure divvied up and also when you look t utilities in general? >> it helps you save more over time. typically, our customers cease over an year, 18 months, the thermostat has paid back itself and after that it's paying you dividends. >> and i'll be speaking ceo of harmon systems.
they do big audio systems. here in germany, we're in berlin a day after the ecb decided to surprisingly cut rates. some pages of the shop showing how deutsch mark is very sxriesed over the ecb rate decision. german federation for banks talking about putting the euro up for sales and it erases dangers that reforms are going to be too slow to move ahead. there's quite a bit of criticism that they didn't leave a lot of room for maneuver in the future. still to come on the show, apple says it's introducing new security measures for its icloud service. we'll be discussing after the break.
hours before kiev and proseparatist rebels are expected to confirm a cease-fire. u.s. and uk readying a fresh round of sanctions on moscow, regardless of any peace plan. good morning. welcome back to the show. we are just getting flashes from the bank of england saying 49% of respondents see a rate rise. the mpc kept rates on hold yesterday cop tear to what the ecb today. 49% say they expect rates to rise within 12 months and the inflation expectations for the uk are 2.8% for the year ahead. interesting, of course, the move that we saw yesterday in the pound despite no change in policy. absolutely. and this is very crucial because a majority of economists now expect a rate hike as early as february. interesting to see what the
respondents would say about the next six months. are they actually agreeing with what economists are saying do they expect that rate hike as early as february? >> it will be interesting to see. u.s. rate hikes depending on jobs numbers later in the show. let's have a quick look at the european market a bit softer today, following a strong run on wednesday and thursday. the xetra dax only one in the green at 21 basis points. the ftse mib all down slightly. >> looking at the bond markets, we want to show you the two-year yields which have moved into negative territory for the shouts, the portuguese, the italian and the spanish, as well. they are all down across the board. this is, of course, as a result of the movement we saw from the ecb yesterday. it's very important to see that the two-year yield for germany now in negative territory along with france. the ecb moves, of course, forex a lot yesterday. we saw the euro/dollar fall a
massive 1.6%. it's now below the 1.3 level. it's basically flat on the day today, but it was down more earlier. we're covering a little bit of ground. the the the u.s. job rates support the big move following monetary allegation yesterday. >> u.s. nonfarm payroll data is due out later with analysts speccing another bumper jump in hiring. 225,000 jobs forecast have been added in the month of august in what would be the seventh straight month of gains of more than 200,000. the unemployment rate is expected to tick down slightly to 6.1% from 6.2% in the month of july. let's get back out to steve. and reading a comment from an analyst this morning, steve, he said that the central bank leadership has now been passed to the ecb. away from the fed. what are your gusts saying this morning? >> lots of bit of auto during
that. central bank leadership passing i think was part of your point. but one thing we do need to know of course is how this extra money, how this extra liquidity is going to move through the system, the transmission system and create economic growth. create momentum on the jobs front if nothing else. europe can only look on enviously in many cases on of that 6% handle on the unemployment rate. albeit we have that in areas of northern europe. here in italy, we have over 12% unemployment rate, nearly record levels. 1,000 jobs a day was one of the key pieces of rhetoric how much they're losing here in italy. let's start the various dynamics. i think the point is, we're seen
some green chutes in spain and italy. >> yes. basically, spain, you know, is making reforms, actually. more flexibility in the level market and besides the high unemployment, the rates that you said is helping a lot of unemployed people with funds from the government. involving the private services system, especially agency workers in this process of qualification. >> monetization was spain was always the older generation are blocking jobs because they don't leave their jobs because their packages are quite extraordinary. this amount of time they get in lieu of the service they've had is extraordinary. and spain has addressed that,
hasn't it? >> yeah, addressed that. from january, they changed the nation and, you happen you know, it's very easy to get rid of people with 20 days per month you can leave them at home. a and, of course, you have a good quality of work that can help these people to enter again in the level market with prequalification of the skills. on the other side, the economy is picking up, as you said, some green shoes because they lower the taxes rate and the foreign investment, especially in the automotive sector, so a lot of the big companies picking up some examples or somewhere else that they move from france to
spain. >> and yet they -- >> because of the -- >> and the low -- >> why has renzi done this? he promised a blitzkrieg almost the first 100 days. why are italians not getting this done? he promised a lot and if it gets done, it will be good. >> italy is a -- country. it's a great country. but it has the worst, most rigid layer laws. >> it's very difficult to make reform. this is our main challenge at the moment. if we look at the labor markets, we have a huge youth up employment, which is really dangerous, a pity that young people -- we are over 45% of young people not find a job, you know? almost 23% of the -- we have a
lot of challenges here. the main reason that i see because things are not happening is the quality of our human capital. if you look at the sum data, you see that we have almost 46% of the people that is -- doesn't get a secondary school. which is the -- we have one of the lowest university rates in europe. .you have another important affect is that the rate of the bond above the school for the young generation. so education is really something that we need to tackle very quickly with the reform. last week, the government is promising a gain and, you happen, new reform.
>> renzi doesn't have another 12 to 15 years. frankly, is renzi the man to carry out the changes or has he promised too much and he's just not delivering? >> it's true, it's true, that's the feeling. you have a lot of entrepreneurials that are now concerned about this overpromising. i think that we need to see very quickly some -- otherwise we will be another time in the troubles. >> we have to leave it there, but an absolute pleasure joining us today and hearing your thoughts on this, as well. stephaneo scarbury. fred wilfred, you, too, get to do hard assignments like this once you've do the done your
time at cnbc in the studio. >> i look forward to it. >> this must be one of the most people duties you can be sent on. pay your dues and you'll get to go, too. let's cross live to wales where general rasmussen is delivering his opening remarks. let's listen. >>. >> i now invite prime minister david cameron to make his welcoming remarks. >> thank you, secretary general, colleagues. when nato last met here in the united kingdom in 1990, many would have hoped that its core aim would soon have been fulfill fulfilled. after the long years of the cold war, the vision of a europe that was whole, free and at peace seemed within our grasp. yet today, the protection and security that nato provides is as vital to our future as it has ever been in our past. we face new and evolving
dangers. to the east, russia is tearing up crimea and its troops. in the south, an arc of instability bends from north africa to the middle east. last night, we discussed the threat posed by isil and iraq in syria. so our message is clear. we are united by these barbaric and dispiespicable acts. to stand up and defeat them and to deal with all the threats that we face, our great alliance must evolve and refocus on the new capabilities we need to keep our people safe. and i hope in these sessions today, we can agree to the changes that are needed. for me, there are three. first, as russia tramps illegally over ukraine, we must
reassure our eastern european members that we will always uphold our article five commitments to collective self-defense. so we must be able to act more swiftly. in 2002, nato stood down its high readiness force. i hope today we can agree a multi national spearhead force deployable anywhere in the world in just two to five days. this would be part of a reformed nato response court, four in the unit, three legal. if we can agree to this, the united kingdom will contribute 3,500 to this multi national force. second, as the secretary general has said, we must increase our capacity. i hope today we can reaffirm our public commitment to spend 2% of our gdp on defense and 20% of that money on equipment.
this would send a strong message to those who threaten us that our collective resolve is as strong as ever. and this issue about equipment is as important as the overall amount of money. what matters most of all is what are we able to do? what are we able to deploy. what enables us to respond rapidly and together collectively to the threats we face. those are the questions we must answer with our increases in capability. third, we must extend our partnerships and building a more effective security network that fosters the ability right around the world. to do this, nato must become not just an organization that has capability, but an organization that exports capability. i hope we can agree to use our expertise to provide training, mentoring, forces in jordan, in georgia and also in iraq when the new government has been established. these can be the first steps in
a long-term commitment to help our friends and our allies around the world. this commitment is vital for our own security, by standing up for our values around the world, that is the way we will keep our own people safe. thank you. >> thank you, prime minister. and this concludes the public part of our meeting and i would like to thank the representatives of the media for having joined us this morning. >> that was the uk prime minister speaking at the summit. some of the commentary he's been making is that if russia invades into ukraine, that would be seen as an illegal move. let's cross back to steve who has been getting reaction to the crisis. steve. >> just on that last point, definitions of invasions have been something people have been pouring over, not only here, but
politicalpy. obviously, mr. poroshenko has spoken in noen certain terms about the fact that he sees a russian invasion. others have been more -- about the army. as you say, we've been talking about some of the ramifications, the reactions that have been occurring economically. i spoke to the head of the bdi. he said we spoke to merkel. she is our elected leader. we understand what she's doing from a foreign policy point of view. we have at the bdi back frau merkel. it is tantamount to them that they seek good action from are
her. her heinus that's thousands and thousands of dollars. so it's very interesting. a leader ahead made this decision. we respect those despite what it costs us economically. others have been talking about the benefits and the negativity. we heard previously the germans could lose between 15% and 25% of their exports. if the trade war were to expand from here, as well. but on others are saying, hang on a second, if we see euro depreciation, on the back of the crisis of competence, calls by the conflict in ewe crepe, that could mean to the euro coming down. this could have positive effects is say a negative.
listen to the comments talking about some of the other ramifications. >> it would top everyone except maybe the competitors that the has in the world markets. it would help southern europe and rebalance with them indirectly. for that to happen, you need an event, monetary policy hasn't -- you can shred off monetary policy. what could happen is a political crisis might caught a flight to the euro. all these things will help ironically save the euro. >> if you look at it from an economic angle, where is russia in terms of its global impact economically in trade? basically, it's an exporter of oil and basically some primary metal products. zac too much about your
neighboring relationship with neighboring you knows, that contract, sing it needs about relzs with his neighbors as well as the world. >> he made a great point, i think he made the key point. if you're a seller of raw materials, of energy products, you can be however you like because they're always going to need it. if you're a fellow consumer product like the chinese, we need a collaborative relationship with your customers been, as well. there's a different in the psyche between -- and consumer products. back to you. still to come on the show, obama is the most european president the u.s. has ever had. find out what that means on the break on "worldwide exchange." we needed 30 new hires for our call center. i'm spending too much time hiring
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back the use of force for ukraine. hadley gamble is at the nato summit for us. hadley, the it seems like a cease-fire is close. >> that's what we're hearing, but, of course, the fighting in eastern ukraine could really mean that everything will end up as a major makeup to this afternoon's plans. what we've been hearing from nato, leaders, a fresh round of sanctions is on the table. it could be announced as early as this afternoon. we're hearing more on the isis threat. david cameron said russia is ripping up the rule book. to be fair, was it naive to think that russia was really going to play by those rules? one country that doesn't really put itself out there in terms of alliances when it comes to the military and when it comes to
its own defenses, finland. i had a chance to speak to the finland foreign minutester and i asked him about that strange agreement that they have. they're not part of the nato allianc alliance, actually. i said you have a long border with russia. what does that mean? does that mean europeans should be spending more on their own defense? >> that will absolute hi be the okay outcome. but they have all differents, so particularly the baltic cubs. it's very understandable that the estonians want the reassurance from the obama visit to their country. but i don't think the people in
finland would be gladdened by having -- american position. >> is that just this president or americans in general? >> in general. obama is perhaps the most european president that the americans have had in a long time. >> and in terms on of europeans and that defense spending, would you agree, then, that they've been like the grasshopper that sang all summer? they let this go and let this go hoping for the strategic putin but has the laboring been done against what when he said are the intentions. >> that could be very bad and that has to be counted. besides, i think we also need to have a look at the european union to do something wrong to create the kind of paranoia with
russia today looks at the european union. we've had never had any anticipation through the social union of creating spheres of influence including russia wore anyone else. >> thank you very much for that report. the director of the paris office of the german martial fund of the united states. germany is known to provide security to its members. does that make nonmembers feel more threatened? >> of course. benefit from the security guarantee, article 5. so it's nato's role to try and define a way of protecting these nonmembers states of nato. and i think that's just the beginning of the discussion that we've seen at the world summit. we're just starting to discuss among transatlantic allies how do we guarantee the security not
only of the members of nato, but also of our neighbors, of the neighbors of this article five frontier. and i think that's a very big challenge for nato. and one i think i wanted to add on to that issue is putin would not have invaded ukraine if ukraine would have been part of nato. pat of his strategy back in 2008 wouldn't have had to -- if georgia had been part of nato. so that's an opportunity to be strategic and smart in a certain way because he's attacking nonmember states of nado because he knows article five is not guaranteed the security of these states. but he's just showing what he's capable of doing and, therefore, threatening potentially in the future member states of nato. >> okay. i quickly want to touch on the ur survey that you put on thp this survey was conducted before
the downing of flight mh-17. how different would that survey have looked had it be conducted right after that? that was certainly an event which rapidly changed the opinion on nato and its invol involving. >> we must ask new questions this year about how would you see your country reaction in the situation of the ukraine crisis. would you rather see your government sending arms to support ukraine? >> thank you very much for that. i'm afraid i have to interrupt. that was alexandra. we'll be back in just a short while. stay with us.
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welcome to "worldwide exchange." >> markets have anticipated a solid u.s. jobs number that could be the one that makes the fed move. kenneth rogoff tells us that the central bank knot ready to hike rates. mission accomplished, the euro continues its fall after the ecb's surprise triple rate cuts. european stock markets falling back after hitting a 6 1/2 year high. >> reports emerge after shelling in the ukraine hours before protesters and rebels and are expected to confirm a
cease-fire. uk prime minister david cameron urging nato to act against russia as he says moscow is illegally transforming over ukraine. >> to the east, russia is ripping up the rule book with its annexation of crimea and its troops on southern soil in ukraine. we're just getting the second reading of the eurozone second quarter gdp number. confirmed at 0%. quarter on quarter, 0.7% year on year. so once again, unrevised at 0.0%. this certainly isn't positive because we came to a stand still in the second quarter and with the second quarter gdp forecast once again in line with expectations unrevised at zero
percent. growth for the eurozone, will? >> we'll come on that on european markets in just a second. if you're just tuning in now, let's give you an update on u.s. markets ahead of the opened today. it's expected to open down today. yesterday, the u.s. market getting in touch with new highs, but ended up down. that was partly ahead of this nonfarm payroll print we have coming out today. july, we had 209,000. the dow jones forecast today is 225,000. we'll be discussing what to expect on that front with our next guest. as you can see, markets in the u.s. expected to open down today. the s&p expected to open down about five or six points and the dow expected to open down about 10 points. european markets haven't really moved following that reprint of the second quarter gdp. it stayed roughly where people were expecting it. italy was basically flat today after a very significant move yesterday. italy and france up over a percent of the back of that ecb easing measures. two of the economies most in
need of easing. the dax today up slightly 0.13% and the ftse 100 also down again. full year previously strong european markets, probably why we're seeing a breath today. caution ahead of this all-important jobs report. as well, pointing out before, this could be a crucial one for the fed. not necessarily in terms of what it's telling us about the economy, but in terms of what the fed could be doing. let's have a look at the bond markets then. yesterday's trading session after the ecb move and after the very strong services data out of the u.s. we saw the yields ticking higher this morning. the between-year bund yield, 0.69% unchanged from yesterday's level. keep in mind, bunch have reversed some of their gains yesterday.
i want to show you was going on in the currency markets, as well. 1.2953. close to 14-month lows against the u.s. the dollar against the japanese yen is above that 105 level once again at six-year highs. and we're seeing more pressure on the minimum exchange rate. the euro is dangerously close to that level at 1.2057. steve has been getting reaction to the ecb action on the shores of lake como. this is less than 24 hours old. and already we've seen a whole host of criticism coming from a number of former ecb members around the world. what have they been telling you? >> it's very interesting that they should be criticizing, because a lot of them, of course, have been stuck in the same conundrum that mr. draghi has been. namely, that we have bigger debts than we had in 2008. we had work unemployment than we
had in 2008. we have no inflation in the system and we have to growth in the system. we have structural issue eggs in southern europe especially and in france, as well. so there are a whole host of issues that mr. dralgy has been forced to try and address at least some of them by not so much traditional measures, as well. in fact, many people say he needs to try and go even further. he says we need to buy assets, a whole host of assets and in some scale getting that balance up somewhere in the trillion dollar level that it was at previously. and saying, also, which i thought was very interesting this morning, that actually get the euro down. it's not about the sovereign debt, it's not about what that sovereign debt buying will do to liquidity. it's about getting the euro down and getting inflation in the system and getting some form of confidence up, as well, and
getting people spending again, as well. he was one of a whole host of people we spoke about and about the liquidity issues, as well. we spoke to him, we spoke to ken rogoff and others. let's listen in to some of the latest reactions to draghi. >> you buy assets and inject into the system. so, of course, at the end of the day, these assets are not good assets. there may be a problem. but, you know, we will see the u.s. and japan, all the other countries have gone to this avenue. the european central bank has been the only one not to go for good reasons in the past. but now that inflation is at zero percent, why are we waiting? >> we went as far as he could and it's not just what he's doing now that the signal he's sending about what is to come. it may not come in a rush because they have -- they're very occupied with trying to fix the banks, that's the big thing going on.
and that's going to be very painful politically for the ecb. they're going to have to go to capitals and say you have to get more equity in your banks. potentially, the numbers are large, even, say, here in italy. they don't want to do other fights. after that is over, then we can say, hey, we don't have any inflation. we need to do something. let's go do more qe. >> the money is probably not a euro problem. we are investing and we need more trust, entrepreneurs, as companies, it's not a question if the money, you have to trust the confidence to invest and to have surroundings to spend the money. >> it's the main bucket of water. many have the planning. the planning is the banking system. the data is do we have any pipes? from time to time, you see one. you see passky, in the uk, we have almost every -- went belly
up. especially the key issue for the central bank is i can increase the pressure from the boiler, but i want to make sure that i have enough resistance in the pipes. and that's the qr process. >> going back to what he's done and what he can do, many people feel the monetary policy has almost gone as far as it can go. some form of sovereign bond buying hasn't happened. the implicit threat of that has been the yields down. what's very clear for this is the likes of rogoff, especially there has to be other parts of the equation coming into play. listening to the germans saying we need to spend more, i think it's very interesting because german capital spending is a percentage of gdp has gone down like the rest of the world, like the united states, like the rest of europe over the last ten years or so and the german admitting they need to do more heavy lifting, as well. they need to do a lot more in terms of capital investment, as well, and we also need to see,
of course, those big structural changes that here in italy mr. renzi has promised and yet to deliver. back to you. >> thank you very much, steve. now, moving back to the u.s., the august u.s. jobs report is out at 8:30 a.m. eastern time. hiring is expected to pick up a bit last month, offering fresh evidence in the economy. forecasts call for an increase of 225,000 in nonfarm payrolls versus 209,000 in july. that would mark the seventh straight month of gains above 200,000, a stretch not seen since 2007. now, anthony chan is chief economist at jp morgan chase. anthony, was your prediction for the number? >> i'm looking for private payrolls to come in around 230,000 nonfarm payrolls, a headline number, somewhere in the neighborhood of close to 240,000. and the reason for that is that the economy is gaining momentum. we certainly saw that in the service sector.
reaching a nine-year high when you look at the service sector purchasing manager. so you're seeing a lot of other corroborating data suggesting labor market conditions are indeed improving. >> i wouldn't be surprised to see a lot of focus in the data points. if we look at the long-term unemployment participation rate, that still is at very, very high levels, closer to 62%. just to vindicate janet yellen's view of being an uber dove, wouldn't it? >> i think it does. i think that labor force participation rate has a long ways to go. but you've seen some research coming out of the federal reserve suggesting that a lot of the reason for the weakness in the labor force participation rate are indeed structural. not all of it. so i would not be surprised if over the next couple of months we may even see some this month to see that labor force participation rate picking up a little bit. but at the same time, we're not going to be able to rely on that indefinitely, because a lot of the reasons for the weakness there is, in fact, structural.
>> anthony, obviously, the numbers have been improving in recent months, but there has been a lot of chat about the quality and the potential longevity of some of these jobs. what's your view on that? >> my view is that yes, we saw in the beginning of the economic expansion that indeed a lot of jobs included in the low rate sector have looked at those numbers carefully. and if you look at the numbers from june of 2009 when the economic expansion began, they've created over 5 million jobs in sectors that i consider higher wage sectors. and the way we define that is looking at average hourly earnings closer to 20 miles per hour. and what you're seeing is of the more than 8 million jobs created, more than five out of three of those jobs in the high wage sector versus the low wage sector and you see that pattern repeating itself. bottom line, after economic expansion continues, you will see a much bigger emphasis on
the higher wage paying jobs being created over the next 12 to 18 months. >> anthony, we have this discussion every single month. is the adp a good indicator for the nonfarm payrolls report or is it not? because if it is, you would think that the whisper number for today's numbers should be coming down a little bit. we saw a slight disappointment yesterday. >> well, carolin, if you've looked at the adp report, after the disaster forecast in december of last year where the forecast ministers 151,000, in the last six months, the adp report is behaving a lot better. in the last two months, it has missed the nonfarm payrolls, the private payrolls have come in 20,000 on average weaker in the last two months than the actual -- than the actual bls numbers. the bottom line is, with the forecast minus 20,000, i think they view for the possibility that would go above what the adp number is forecasting this month
because in the last two months, as you've seen in the reverse, overall in the last six months, it's been a pretty good indicator. and, of course, you're absolutely spot on. that indicator has been spotty. but since 2012, when they re -- the adp, you've seen some improvement, barring, of course, 245 disaster since december 2013. so right now, i actually believe there's a good chance that today's payroll estimate could come in much stronger than the adp number. therefore, no reason to shave down the numbers relative to the consensus. in fact, i'm looking for the number to come in slightly higher than the consensus is looking for. >> anthony, poor macro data in recent weeks has forced morrow draghi to loosen policy there. is the lesson from the u.s. from that don't tighten too soon? >> i think the lesson is the economy is weak, you don't want to tighten too soon. but the economy in the united states is actually getting stronger. when you see gdp numbers coming
in so strong in the latest -- in the latest quarter and, in fact, the possibility that we'll see that number even being revised a little higher for the second quarter, it really tells us that the u.s. economy is getting better. but as you pointed out earlier, for the eurozone, real gdp on a year to year basis is coming in below 1%, 0.7%. we need to see that number a little stronger. mario draghi certainly has the right formula. i would not be surprised if the pressure continues, especially because they have no inflation. inflation rates in europe, 0.3% year over year with a positive 2%. it is a formula for more action and that's exactly what mario draghi is doing. and i think that that will translate into stronger corporate profits and i would not be surprised if by the end of year we're not looking at a 0.7% real gdp number for the eurozone. we're looking at something closer to 1 % on a year over year basis. >> anthony, thank you so much for joining us, anthony chan at jp morgan chase expecting
235,000 jobs. and it could be one of the most crucial data points in recent years. the u.s. jobs number is, of course, due out later on today. do you think it will be another plus 200,000 number? we've had 200,000 plus numbers for the last six months. we want to know your conversation. get in touch with us. today's other top stories, bp rebounding in today's session. it did fall 6% in yesterday's trading session which could cost bp as much as $18 billion. that is more than the $3.5 billion that bp had set aside. on the expectations it would be found liable for just simple negligence. the ruling details numerous incidents where bp apparently county costs with a disregard
for safety risks. it's interesting to see bp bouncing back today despite the fact that they could be facing 17 billion. >> i think it's a possibility it won't be quite that much. metlife is a third insurer after prudential financial and iag to be tapped with such a designation. comparable to the biggest banks. metlife in frankfurt is closed today, so that's not really -- over the last three months is up 6%. sgliets actually up 0.3% in terms of the adr. so we're seeing a little bit of a trade coming through in frankfurt, too. john berber is the legendary acid tongue comedian. she died on thursday at a
manhattan hospital. she was 81. rivers went into cardiac arrest last week following a lutein procedure. reports say the medical examiner's office will investigate the incident. rivers opened her trademark show with can we talk. she continued to work in clubs and on television into her 80s. did you watch her show, fashion forward? >> i didn't see it, i have to say. >> i watched it a couple of times. very entertaining. she will be missed. >> she will. coming up, it may only be accept, but one retailer says it's not too early to talk about christmas. details after the break here on "worldwide exchange."
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about it be enough to make the fed move? ecb hangover raiding in the red a day after draghi's dramatic triple rate cut. is ukraine's cease-fire over before it even begins? fresh artillery shelling reports coming in from the east of the country. tim cook says apple is planning additional sets to keep
hackers from additional celebrity accounts in the wake of hacking scandal. apple will alert users by e-mail when someone tries to change passwords. apple is trading in frankfurt down almost 1% today. the u.s. government says hackers broke into a server supporting the healthcare.gov website. the intrusion likely occurred back in july. but wasn't discovered until last week. investigators say no consumer data was stolen or viewed during the breach. and officials say the attack won't impact the second open enrollment period for obamacare which starts in mid november. and it may only be september the 5th. but it's never too early to start thinking about christmas. at least that's what u.s. retailer k-mart wants shoppers to consider as it drops several subtle hints in this new ad. >> hello, america. it's too early for christmas.
so just to be clear, this is not a christmas commercial. however, let's say you have an event in late december that you need a lot of gifts for. like maybe your entire family is having a birthday on the same day. now is the time to get to k-mart and put those gifts on lay away and then pick them up just in time for the non-christmas celebration. k-mart no money down lay away. merry birthday, everyone. >> have you started your christmas shopping yet, carolin? >> of course. i did it all last year. you didn't? >> i have to wait and see what's hot, new wearable devices. >> an i watch. >> perhaps. still to come, obama is the most european president the u.s. has ever had. that's according to the finland president. find out what he means after the break. stay with us from "worldwide exchange." xkç how do you beat the number one seed?
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payroll prints we'll get in a few hours. >> all right. we've got some flashes coming from the u.s. secretary of state mr. kerry. he says no boots on the ground is the common deadline for allies and the islamic states. he is urging -- to contribute in some form towards the militant threat and kerry calling for a plan to counter the islamic states in time for the u.n. general assembly later in september. let's get out to hadley for the reaction on this. hadley. >> certainly we're hearing from secretary kerry. we've also, as you know, heard from the uk prime minister david cameron. also a little bit earlier today and he was essentially saying we're going to, of course, contribute some 3500 troops to this nato alliance rapid response force, but we're also hoping to do something to combat this threat from the islamic state. one of the things that they would like to do, obviously, would be intelligence sharing between the nato countries. and also, you know, they haven't
ruled out helping the united states with air strikes. so we could see that, as well. one thing we do know is that they have been given things like light body armor, that kind of thing, to kurdish forces. they haven't gone so far as to give them actual weapons. the problem is there is that the kurds have been trained to use older russian weapons as opposed to what the uk uses in their armed forces. it wouldn't do well as a crossover in terms of giving military assistance to the kurds. >> thanks very much, hadley. still to come on the show, could this be the number that makes the fed move? after the break, we get some predictions for what today's nonfarm number could mean. we'll be back in two.
welcome to "worldwide exchange." i'm wilfred frost. >> and i'm carolin roth. these are your headlines from around the world. >> markets have a solid jobs number that could be the one that makes the fed move. we're told the central bank is not ready to hike rates. the ecb hangover, markets slip lower after multi year highs. the euro tries to regain lost ground. reports emerge after fresh artillery shelling in eastern ukraine just hours before expected concerned cease-fire.
uk prime minister david cameron urging nato to act against russia as he says moscow is illegally trampling over ukraine. >> to the east, russia is ripping up the rule books with its annexation of crimea and its troops on southern soil in ukraine. >> announcer: 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 "worldwide exchange." have a look at how the futures market is faring ahead of the u.s. open. all of the three exchanges expected to open down. the nasdaq expected to open down a couple of points. the s&p down about 3 points and the dow down about 10 points. that ahead of the noncertainty with the nonfarm payroll prints coming later today. wednesday was strong on the back of possible cease-fire in ukraine and thursday, of course, strong after that ubs/ecb
easing. today, italy off about 11 basis points. france off about 2 basis points. those two markets in particular very strong yesterday given that they needed that loose monetary policy. germany, up 14 basis points today, buck the trend and the ftse off about 24 basis points. carolin, what have we got coming up with the u.s. payroll number? that's the huge number everyone is looking out for today. spething another bump in hiring, 225,000 jobs forecast has been added in the month of august. with this, the seventh straight month of gains. the unemployment rate, that is expected to tick down slightly to 6.1% from 6.2% in the month of july. let's get back out to steve sedgwick joining us live from shores of lake como. you've been speaking to mr. roboff, and he says the fed is not ready for a rate hike just
yen. >> ken rogoff, he spent a lot of times on debt gdps and debt levels, a lot of work recently on inflation. he says hang on, policymakers, it's not dead, it's just dormant. we have to look at these huge number of data points that janet yellen and the head of the fed have looked at. there's low participation rates, 63% level. do we need to be worried about it? here is listening to see what the harvard profester had to say. >> there was quite a big heads in jackson hole which argued that, in fact, a lot of it really was from factor that's people can't move easily, people retiring. there were some that said some of the reporting just to change how people report whether they're unemployed or not, it's less dramatic. it's very confusing. chair yellen said we look at 19 things . -- >> and let's look at one thing.
participation rate. is that structurally low and going to stay structurally low? i tend to think it will come back some. >> to 65, 66? >> well, that was -- you know, certainly 64, 65, i think, can come back. i think there was a period where people are pulling out of the workforce who might have taken a job if it was possible to sort of on the fence, elderlily, people who maybe were doing a second job. >> i am delighted to say that i'm not the only cnbc staffer who is here. michelle caruso cabrera has joined us. hello, michelle, how are you? >> good morning, steve. lovely to see you. >> it is absolutely gorgeous. comfortable working conditions. but it's amazing. we start off on the u.s., if i may. i want to share any consolation about toous economy. you share the stateside view on europe. we had great numbers. the construction spending, some of the home bases, the gdp
revision, we got a 6.1% handle on the top headline rate and unemployment in the states. but it was that good. why isn't yellen pulling the trigger on more aggressive action? >> ken rogoff alluded to this. she has key numbers, the market is saying she has a whole dashboard of employment data she looks at and a lot of that dashboard doesn't look so good. wages are still problematic. as a result, she's not ready to necessarily do anything more aggressive than what has already clearly been laid out. >> that wages argument, that worries everyone, doesn't it? why if we've only got 6% unemployment aren't wages better? the consumer doesn't feel that confident. >> there are surveys that showed that there are many americans who believe we are still in a recession in the united states. clearly, the viewpoint is not that things are going very well. we haven't seen wages improve.
and a lot of economists believe part of that is because the way the recovery has been constructed and what's been happening with the federal reserve, it's much better to buy back stock, it's much better to do a balance sheet recovery necessarily compared to trying to expand the business through more investment. >> yeah. and -- >> that would mean more jobs. >> on origination jobs less, the mortgage origination department are talking thousands of jobs. with this recovery in housing, its financial investors, it's qe investors, isn't it? >> we are starting to see some changes there. we've seen some investors go away, but we're seeing tremendous number of cash buyers at the high end because we're getting slight capital from russia and from china, also from south america, argentina and venezuela. and then it's incredibly difficult to get loans still for the following reason. the regulations, you know how the pendulum goes, right? so the regulations have swung so far back that the origination -- the mortgage originators feel that if the mortgage goes bad, they're going to have to eat it, right? now, during the crisis, we said
oh, that is what we should have been doing all along. so that's what they started to do. >> the original pension funds during the process. that's part of the problem. oh, hang on a second, we've got securitization in europe now. >> now everybody in the chain has to have a stake in this and that way they'll be better at writing mortgages. we got what we asked for. guess what? then you get fewer mortgages. >> joe and the guys shooting the breeze about europe, as well. and we've got this dreadful double digit unemployment in europe. you've seen the debt prices. >> terrible. >> you've been in greece several times, in italy. what is the state saying about this? >> we find the european situation incredibly extraordinary to us. to see the incredible rise in unemployment, how sad it is, and yet how little political will there is for real reforms that would change things. not just political will, it's
actual citizens would don't realize there's going to have to be painful reforms in the short-term, which means life will be better for them as with future generations in the long-term. the banning of nationalism in germany, emblem attic is the problem we see with vested interest -- >> in terms of labor laws. >> they are. and then we look at them and see that's the best you've got in europe? because to us, their economy still looks -- >> it's amazing. it's cultural between europe and germany and germany and the rest of europe. >> yeah. >> michelle, i normally only see you when there's a crisis. i'm just waiting for the next one. i don't know why you're here. >> i'm here because i think this is ground zero for the next crisis. >> on the balcony, do you remember that, as well, with the tear gas? >> yes, yes, yes. >> we have to leave it there. i've been wrapped three times.
we'll get to see some very interesting people. guys in the studio, i hand it back to you. >> steve, thank you so much for that. why are we in addition not sitting over there in lake como? that looks so attempting, doesn't it? >> it does, indeed. maybe next year. still coming up on the show, core changes at michael cores, two of the biggest shareholders are stepping out. we go shopping for more details after this short break. [ hoof beats ] i wish... please, please, please, please, please. [ male announcer ] the wish we wish above all...is health. so we quit selling cigarettes in our cvs pharmacies. expanded minuteclinic, for walk-in medical care. and created programs that encourage people to take their medications regularly. introducing cvs health. a new purpose. a new promise... to help all those wishes come true. cvs health. because health is everything. i'm spending too much time hiring and not enough time in my kitchen.
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will solid jobs report be enough to make the fed move? and is the ukraine cease-fire open before it even began? reports emerge of fresh artillery shelling in the east of the country. bp extending losses today after the oil giant was found grossly negligent for the gulf of mexico oil spill. shares did fall 6% yesterday following the federal court ruling which could cost bp as much as $18 billion. that is far more than the $3.5 billion bp had set aside on the expectation it would be found
lible for just simple negligence. the ruling details several incidents where bp apparently cut costs with a disregard for safety risks. the u.s. government says hackers broke into a service supporting the healthcare.gov website that continues to enroll people in obamacare. the ip trugz likely occurred in july, but wasn't discovered until last week. no consumer information was stolen or viewed during the breach. two of the biggest movers and shakers in the global fashion industry have decided to move on from their major investment in luxury retail of michael kors. jackie deangelis har more from cnbc headquarters. michael kors stock has soared. thursday, the company announced its secondary offering of more than 11 million shares which will let two founding investors
sell their nearly 6% stake and resign from the board. morgan stroll and strall, they are michael kors largest shareholder having bought the company in 2003 and helping to mastermind the company's ipo in 2011. shall and stroll made their name by backing up another incoming u.s. designer, that's tommy hill figurer. kors sells clothes, shoes and other accessories through high end department stores and its outlets, as well. the brand took off when michael kors took part in another project reality show project runway. shall and stroll are still betting on the kors brand. they own exclusive licensing rights for the company's licensing brands in china, hong kong, macau and tie roy. he said quote the vision for this success has been supported
by stroll and chou. we look forward to on our continued business relationship with them, enquote. michael kors sales have outpaced the competition growing by 20% in each quarter since the company's ipo. but it's been criticized for overexposure following rapid expansion and more aggressive discounting. since pricing its ipo at $20 a share, the company's stock has surged four fold. however, shares have slipped down about 1.5%. it fell 4% in after hours trading. today in frankfurt, it is up 1.5%. back to you. >> thank you so much for that. the trouble is, i don't know if you ever have that problem, you simply don't want to be wearing the handbag that everyone else has got. i'm sure you're very familiar with that. >> ohm on the weekend. harmon international who count automakers volkswagen and toyota customers forecasted lower than expected full year profit as it spends more to expand in emerging markets. its revenue group in such markets by 31% over the last 12
months with china the main driver of that growth. most of the new capital will be spend on building new capital in brazil and india while expanding further in eastern europe. the eastern conference in berlin for us, louisa. >> will fred, thank you very much. yes, i'm indeed joined ceo of harmon international. very good to see you. i just want to pick up some points that were just made in the studio, this just coming into us that you've had difficulties and that we have had heard you giving up a profit warning basically. what's going on? why the weakness? >> weakness and -- say it again, please? >> that you warned on profits, profits for the full year are not going to be as expected. >> well, actually, we just had double digit growth on bottom line and top line, this is on top of 24% growth on top line and 20% earnings per share
growth. market is expecting harmon to continue to lead possibility in top line and i think we will have a number of years ahead of us because auto sector is doing very well and audio space is doing very well. so i think we'll have a very good start going forward. >> but it looks like you're having difficulty in the developed markets. >> developed markets, we have very good penetration. right here in germany, we do the high encars and u.s. we do very well. the biggest growth opportunity is in bric markets and africa and middle east. that's where we have been focusing. however, having said that, 70% or 75% of the revenue still comes from home markets of europe and america. >> and with regard to security, because you also do information systems, how do you factor security into the technology that we're seeing today? >> you know, security is becoming a very important topic, particularly when we all hear the buzz word of connected cars. connected means when you connect the car to the clouds and you're
getting information like you're sitting in your home and your computer. the hackers, the bad guys can come in your car. imagine, that is a scary scenario. up until now, cars are most vulnerable as soon as you connect them. audio technology in the car, we're bringing a cyber security software layer to protect cars from the bad guys. that's safety, security and information technology in the cars. >> anesh, good to see you. thank you very much. guys, that's it for me. back to you. >> louisa, thank you very much for that. metlife is exploring ways to fight the u.s. government proposal subjecting the company to more regulatory oversight. metlife is the third business to be capped for such a designation which comes with stricter supervision by the fed. let's have a look at how metlife shares are trading in frankfurt, up mod ily by 0.3%. now, it may only be the
fifth of september and summer doesn't officially end for another two weeks been, but it's never too early to start thinking about christmas. that's what u.s. retailer k-mart wants shoppers to consider as it drops several subtle hints in this new ad. >> hello, america. it's too early for christmas. so just to be clear, this is not a christmas commercial. however, let's say you have an event in late december that you need a lot of gifts for. like maybe your entire family is having a birthday on the same day. now is the time to go to k-mart and put those gifts on layway and then pick them up just in time for the big non-christmas celebration. k-mart's no-money-down lay away. merry birthday, everyone. >> it's never too early. still to come on the show, could this be the jobs number that makes the fed move? after the break, we get some predictions for what today's nonfarm numbers could mean.
welcome back. let's have a look at the markets ahead of the u.s. open. yesterday, they hit highs during trading and ended the day slightly down. today looks like more of the same, the dow expected to open down by about 20 points, the s&p expected to open down about 3 points and the nasdaq down about 4 points. of course, this ahead of the crucial nonfarm payrolls data. forecasts call for an accuracy of 225,000 nonfarm payrolls, but 209,000 in july. that would mark the seventh straight month of gains above 200,000, such not seen since 1997.
unemployment forecast to tick back down to 6.1%. how do you make money in markets like this? here is what some of the experts have been telling us this morning. >> the best opportunity to invest globally are in atpr in japan and in europe. >> it is the discount to global emerging markets. and if you look at where russia is right now, it's about 59%. generally it's traded tweven low 50s and low 60s. eventually at this point, it's closer to a look where we say it's more attractive for risk/reward. it's better in your favor than taking profits. >> big on china, which is another controversial thing to say. but if china really starts to bed down and accelerate, it's -- >> all right.
let's get out to todd horwitz, author and founder of averagejoeoptions.com. todd, for the third day in a row, u.s. job markets jumped higher, record highs, we saw a bit of a nose dive, especially in yesterday's trading session. why is that? >> good morning, carolin. what we're seeing now is that markets may finally be tapping out of energy here. we talked about the jobs number and how good it may or may not be. but when you look inside the numbers, the numbers themselves, 200,000, 140,000 in service jobs, the overall participating rate is brutal. if the government thinks these number res good, they're on fantasy island. we're looking at numbers that the average american is making 23% less money today while he was making five years ago while the wealthy is making 25% more. the overall middle class is still in a recession. they're underemployed if they're employed at all. so these numbers are artificial based on a participation rate.
from the technical perspective in the overall chart, basically on wednesday, he had a key reversal in the s&p future which made a new contact high. yesterday, we added the key reversal in the s&p. made a new high in the morning. there are warning signs saying because markets may indeed be ready to start to roll over and start to sell off a little bit here. >> so you say the market is topping out. we see volumes coming back into the market. 5.7 billion shares traded on exchanges yesterday, higher than the average over the last five days. this topping out, there is conviction behind it, right? >> what we had the last five days, earlier in the week, last week, we had the labor day holiday. we're coming in, we had the draghi speaking yesterday. crying up a storm and there's a lot of trouble in europe. now you've got the jobs number today. there's some conviction here. i wouldn't be surprised to see a pop. i don't think we're going straight down, but i'm certainly
concerned and we're starting to see the real facts down. inside the numbers, although artificially they look good, inside them they're not as good as they appear. >> and to top the nonfarm payroll forecasts to be 235,000, how much i decided would it have to be to move markets today? >> you know, i think if the number popped up real big, some people might think it may be too hot so they may sell off the market. if they miss to the downside, you would probably see a little bit of a pop saying, hey, the fed is not going to lead. the biggest fear right now and the worst thing we look at, everybody is looking at mario draghi and janet yellen. we don't care about the regular parts of the market. where is the free money going to start flowing in? if it looks like the free money is going to stop, it looks like the market will continue to try to rally. >> thank you so much. i'm wilfred frost. thanks for joining us.
>> "squawk box" in the u.s. is coming up next. have a fantastic weekend, everyone. for our call center. i'm spending too much time hiring and not enough time in my kitchen. [ female announcer ] need to hire fast? go to ziprecruiter.com and post your job to over 30 of the web's leading job boards with a single click; then simply select the best candidates from one easy to review list. you put up one post and the next day you have all these candidates. makes my job a lot easier. [ female announcer ] over 100,000 businesses have already used zip recruiter and now you can use zip recruiter for free at a special site for tv viewers; go to ziprecruiter.com/offer2. at a special site for tv viewers; oh, he fakes a handoff quaand he's making a run..... for mattress discounters fall kickoff sale! right now, save up to $300 on sealy posturepedic and serta mattress sets. even get 24 months interest-free financing on every tempur-pedic. you're going to love their football field-size selection. this calls for a little touchdown dance. don't miss the fall kickoff sale at mattress discounters. ♪ mattress discounters
good morning. the final countdown to the jobs report. will the markets take the heat on the market? apple's tim cook says the company is planning additional security steps even though it wasn't their fault, not in any way, shape or form. but they are planning additional steps ahead of the hackers. and elon musk is big on nevada. i was told somewhere with the help of a brothel. did you say that? the state wins gig da batteries sweep stakes.
it's friday, september 5th, 2012. wow, i missed a couple of years. september 5th, 2014, and "squawk box" begins right now. good morning, everybody. welcome to "squawk box" here on cnbc. we are joining you live this morning once again from new york city. i'm barack obaecom becky quick kernen and andrew ross sorkin. the nfl season kicked off last night with the seattle seahawks taking on the green bay packagers. the seahawks picking up where they left off last season. we're going to be talking a lot more football at 7:00 eastern with new england patriots owner bob kraft and future hall of fame quarterback tom brady. a lot more to talk about in this morning. >> the big story of the morning, the latest employment report. it is jobs friday. polled forecasters