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tv   Worldwide Exchange  CNBC  October 6, 2014 4:00am-6:01am EDT

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it's monday, welcome to "worldwide exchange." i'm wilfred frost. >> and i'm seema mody. these are your headlines. >> clenching 30% of the vote, he'll claim de la rusa in the second round. and meg whitman says the spinoff from the hardware and services division is going to occur. hong kong gets back to work. businesses in the city reopen but traffic is brought to a standstill as small numbers of protests continue near the
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government buildings. and disney shares plummet as they announce a 1 billion capital euro hike. you're watching "worldwide exchange" bringing you business news from around the globe. we just got a brief budget through. it's come in for 2015 showing gdp growth at plus 2.9% driven higher by private consumption. it seems the risks to the committee are coming from abroad and unemployment seen falling to 22.5% from 24.5% in 2014. so still a very high level, but moving in the right direction. the primary budget seen at 2.9% of gdp. public debt at 316 billion euros, which is 168% of gdp.
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moving on to brazil's pro-business candidate, he surprised a rally in the election. he will make it to the second round this month. silva came in third at 21%. brazil's main stock market is expected to get a boost when it opens later today. six days ago the polls suggested that his winning margin would be 68%. a big close in the coming days. >> it's no surprise on who the investors and wall street is supporting. the opposing candidate gaining a lead sends brazil stocks higher. that's what we saw today. >> most interestingly is that nevish surged with the support
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switching to nevish. how much from the 30% of silva's votes will go with russel? now moving on, we've had germany factory orders earlier today. they stumped nearly 6% in august, well below forecasts posting the biggest drop since 2009. the data could boost expectations as we see further easing measures. the xetra dax is catching up after a holiday on friday. we are being joined now down the line by perez, do you think worsening german data is the best thing to see for the european economy as a whole? >> i think that's a very good question.
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what you're referring to is if you see worsening data, does that bring forward the point in time where the ecb gets more aggressive with the quantitative easing. my perspective is that it can be misleading looking at the short-run data with respect to germany. actually, if you take a step back, i would say the medium term prospects of the germany economy look sound at this point in time. you're seeing good positive progress in house price growth. double-digits over the last couple years. unemployment forming to a low level. and clearly in the short-term where germany is sensitive is towards international growth. but i would say that there is a risk of looking at some of the short-term numbers on growth, on inflation, and perhaps coming to the wrong conclusion about the medium term prospects for the german economy. >> for us both in fiscal and monetary terms, how serious do you think the divisions are in the corridors of europe as to
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what the best course of action is? >> again, that's another very good question. i mean, what you can see when you look at kind of last week's reaction to the initial move by the ecb, what that reflects is a kind of some uncertainty about the extent to which how aggressively to pursue the quantitative easing measures. and i have a lot of sympathy with that from the perspective that if you think about quantitative easing, what's been demonstrated, it's a very good method of shoring up the system in totality in terms of providing liquidity for the financial sector and for the economy more broadly. it is yet to really demonstrate much imper call evidence that actually it delivers strong economic growth going forward. so i think that's where a little bit of the debate lies or half the debate lies. >> perez, the appreciation many the euro has been a concern for some traders, but some say that it will be the tailwind behind
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european earnings the next coming quarter. what are your thoughts providing the euro and the earnings? >> i'm very much in that view. i think there are two things that have really acted as headwinds for the corporate sector across europe. one has been the level of currency and the other has been labor costs. i think on both of the measures, i think what you're seeing in the short-term and also looking out over the medium term is those pressures easing and potentially the headwinds turning to tailwinds. >> head of worldwide investment equities, thank you for your time. send us where you think stocks are headed. this week they are gaining some momentum. e-mail us at worldwoide@cnbc.co.
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jimmy choo could be set with a billion dollar evaluation according to reuters sources saying shares are due to an initial range between $140 to $180 pence a share. the luxury shoe label is looking to sell at least 25% of the company through the listing. and let's give you an update on what the markets are doing in europe at the moment. quite a lot of green behind me.. the stocks stoxx 600 is up. germany playing catch-up after the close on friday. germany is up 1.5% despite weaker than expected machinery data. as you can see, that positivity is all across europe. so perhaps weaker data from germany means higher chance of quantitative easing with another four weeks until the next ecb meeting with the market taking strength today.
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the ftse is up half a percent and italy is nearly up 1%. germany is up 1.5%. we'll look at the individual stocks. we are looking at the two biggest foreign lenders in russia getting a boost this morning after the fda reported their respective russian subsidiaries are issuing large amounts of ruble bonds. this is seen as an attempt to replace parent company funding as they cut sanctions to hit countries. societe generale is up 1.35% and raiff bank is up 3.82%. in the u.s. they ticked up in expectation of the positivity but didn't move too much off the back of it. 2.3% today, but they have been range-bound between 2.4% and 2.6% moving when there's positivity in the economy. bonds in germany about .91%.
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we'll look at the u.s. dollar that continues to move up despite the jobs report on friday. the broader dollar index measures the dollar against six major currency. it's up 8% this year on course for the strongest year in nine. it's logged weakly gains for 12 straight weeks and hit a four-year high on friday. the dollar continuing up not too much movement today. the euro bouncing back a little bit, 14 basis points. the u.s. dollar/yen taking a little bit of strength there. and the aussie/dollar is bouncing back 1.6% despite the strong dollar index. we are going back to seema quickly for an update. all right. i want to get you flashes on deutsche bank. reuters quoting sources saying deutche bank performed well in the third quarter, especially in investment banking.
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it goes on to say, the sources at reuters, say deutsche bank in the third quarter burdened by provisioning for legal and regulatory matters. they have reached out to deutsche bank for a comment but they have declined. deutsche bank shares are higher in intraday trade. and shares of hewlett-packard are trading sharply higher in frankfurt. the tech giant is reportedly going to break into two companies in the latest attempt to improve its fortunes. the announcement could come tomorrow as h.p. will spinoff the printer and p.c. business from the hardware and corporate services unit through a tax redistribution of shares next year. meg whitman will be chair of h.p. inc. and the other will be called hewlett pack enterprise. the spinoff is a major trend in the technology industry that broke last week. we heard about e-bay and their plans to spinoff paypal and we saw e-bay shares spike in
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pre-trade. today similar situations. >> both of those deals have seen a bit of a turn-about by the ceo, meg whitman said three years ago this was not going to happen and is happening. likewise we bay. so i wonder what this means for the management. apparently she'll continue to be leading both groups. interesting to see if we'll get pressure from shareholders. >> the p.c. maker has been been experiencing challenges with the subscribers shifting to mobile and h.p. is a victim of that. but they have been a turnaround with the stock up 30% year to date. interesting why meg whitman felt this was the time for h.p. to spinoff the printer and p.c. business. it is a $56 billion business, a huge part of the company. >> it has been a turnaround with the stock doing better in recent months. but i wonder how much of that is due to the cost-cutting they have put through and whether there's more to come when they split. i'm not sure whether that's the case or not. >> definitely a story to be watching today.
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now yahoo! is reportedly close to investing a small portion of the cash it made from the alibaba deal on the mobile snapchat. the internet firm is planning to invest $20 million in snapchat vowing around $10 billion. snapchat turned down a $3 billion offer from facebook has reportedly been working to secure capital from various sources over the past few months. shares in yahoo! are up more than 17% year to date. coming up on this show today, a japanese typhoon heads out to sea after slamming central japan and causing travel chaos. we have all the details from tokyo. as the world bank trims its growth forecast for china, we speak to one analyst who says there could still be an upside in base metals despite weakening chinese demands. and can be there a fairytale ending for euro disney. shares plummet despite walt disney coming to the rescue.
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you're watching "worldwide exchange." >> welcome back. here's an update on the asian markets.
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a lot of markets closed today, china, malaysia, indonesia all closed for a public holiday with volumes down a bit. nonetheless, it's a general kind of bit of positivity coming through following the strong close in the u.s. the number of protesters has fallen in hong kong. that's allowed a slight rally but the rally based more on the fact that it sold off significantly last week than anything specific. the hang seng index up 1.1%. the nikkei also up strongly 1.1% given the bond going weakness of the yen. now, a small number of pro-democracy protesters continue to occupy the streets surrounding the government headquarters in hong kong, but civil services have been allowed to return to work after blockades have been lifted. we have this report from the ground. >> reporter: the protests and the rally in hong kong have entered their 11th day sdespite the ultimatum to come and go,
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remove the blockades or face appropriate force. the numbers in the protests are significantly fewer. we have more curious onlookers and tourists coming out to take photos instead, but the protesters are holding ground. as you can see behind me, as the night draws on we are expecting the numbers to increase here. business pretty much as usual as quiet and peaceful. the hong kong stock market today has managed to regain some of last week's losses. we were down 2.5% last week up more than 1% today. we did get some comments coming from the chairman of the hong kong stock exchange saying the mood of the market is better today and operation is as usual. also, some statements from the government saying that the banking system, the financial markets, today everything is operating smoothly. and in good order. hong kong's dollar exchange rate also steady. and there is apple liquidity in the markets. that is the latest from here in hong kong, emily tan, back to you. >> we'll continue to keep you up-to-date on the hong kong story. switching focus, we have a
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big merger deal in the health care industry. medical device maker beckon dickinson will buy carefusion for $12.2 billion. carefusion is up 38% today. wilfred? 40% of companies anticipate pursuing acquisitions in the next 12 months. the highest number in three years. this moving from the global capital conference barometer. we are joined by the global vice chair for the advisory services at ey. bottom line, what is moving the market? >> good question, wilfred. what we are seeing is a stock five years since the financial crisis that kicked in. what is exciting about this time saturday that apart from the insane amount of deals we
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predicted last time around, we are now going to see a bulge in pipelines and a bulge in the focus and rebound around mid-sized deals. >> we have seen a surge in u.s. deal flow, but washington now perhaps cracking down on tax inversion deals. do you think that results in less deals going forward? >> we have specifically asked respondents what could constrain your deal appetite? and we have seen a real uptick this time around. we have seen a 30% increase in the deal pipelines coming forward. tom of the list is geopolitical issues understandably, but also coming is regulatory in techs. they have been very strongly directed by an increase in sentiment and confidence and stability. both in the economy but also in corporate earnings. >> you said geopolitical tensions were seen as the potential for deal flow, was there russia and ukraine, isis
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in iraq, which was it? >> they don't pippoint specifically, but in respondents two years ago, one of the issues in itself would have completely impacted in any appetite. they are recognizing the geopolitical risks are coming out. we just heard the news about hong kong. it's still a leg forward because overall the confidence and the stability of the economy is growing. when you put it into perspective like the corporate earnings very good technically in here, then you look at the deal fundamentals, this has been the lowest evaluation between buys and sellers. and the nearest prediction over the next 12 months. when you put it all together, they have been given a lot of confidence to move from the big deals into bringing in a very subdued mid-sized market into action. >> which sectors in which countries will benefit the most
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according to the survey? >> what has been great is what is moving out of the u.s. the u.s. will be moving across the markets, japan is in play. we also see a lot of activity from india and china. across all sectors, which is a great feel, you can feel the us is taped movement in m&a. particularly in automotive, technology, life sciences and consumer products. >> thank you very much for joining us. that was the global vice chair of transaction advisory services at ernst and young. we are getting flashes from south africa saying the central -- they have appointed a new central bank governor. that coming through according to reuters. >> that's right. kyang nago effective november 9th. something to lookout for.
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>> and the rand has moved to 11.26 against the dollar. we'll have more news when we have it there. and a 1 billion capital hike is being backed by walt disney company. stephan is here with more this morning, good morning. >> good morning. there's a warning because of the economic conditions. the number of visitors will be significantly lower for the fiscal year. euro disney is now expecting between 14.1 and 14.2 visitors compared with nearly 15 million a year ago. as a result, the revenue will drop between 1% to 3% for the fiscal year 2014. and the recapitalization of the 1 billion euros includes the ride issue of 420 million open to all shareholders. and it includes the 600 million
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euros of debt owned to walt disney. it will convert this as it is the largest shareholder. the saudi prince still hasn't decided if they will back the plan. as a result of the capital decrease, walt disney will get more than 50% of euro disney. and under the french market rules, it will be requested to launch a tender offer on euro disney. and the result and consequence will be that euro disney could be de-listed from the stock market. the shares are falling sharply this morning in spite of the recapitalization plan. >> stephan, are you a fan of euro disney? >> i must admit not really. i have been there a couple of times. we were having the debate this
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morning whether it is located properly in europe because the plan was to install it in spain at the beginning. perhaps it's the golden france to attract visitors. >> i went a couple of times some years ago. only a year or two ago, perhaps. >> right. like two months ago. nothing compares to disney world in miami, just have to say that. the u.s. jobs right has fallen below 6% for the first time. steve liesman has a breakdown of the numbers. >> the economists expressing relief after a strong jobs report from the government showing a rebound from last month's big disappointment that came along with upward revisions to july and august. over at bank of tokyo, they said yea, baby. they said, that's more like it. oxford economics is claiming the job market is alive and kicking in the united states. non-farm payrolls rising bay greater than expected 248,000 in the month of september. and july is up by 60%.
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the unemployment falling more than expected to 5.9%, that's the bottom of what they expect for the full range. the hourly wages were unchanged. they are saying there's still no sign of acceleration in wages but they doe believe it's coming. 35,000 jobs were added in the retail sector over the last two months. construction was up by 16,000 aligning the weak housing numbers we have had and government up by 12,000 jobs. the fed will surely note the strong job growth but coming with a lack of wage growth and the still declining participation rate in the united states that should help them keep the current low funds rate in check. at some point capital economics may have to include the unemployment rate to be a reasonably accurate number about the amount of slack but may not be there yet. most economists reiterate the call for a mid-2015 rate hike. but a few more reports like this and that could change quickly.
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u.s. unemployment may have reached a six-year low but americans are as pessimistic as ever. just four in ten people now believe in the american dream. this according to a survey from the public regent research institute suggests the number of people who believe in the idea that if you work hard you'll get ahead has sunk below 2011 levelsful while the number of those who never believed in the american dream has reached the highest level since the poll was launched. and we want to hear from you on this. do you still believe in the american dream? if you want to join the conversation here on "worldwide exchange," e-mail us at worldwide@cnbc.com and our personal handles are at the bottom of the screen. seema, do you still believe? >> absolutely. but very interesting survey to show economic data not a good gauge of sentiment and confidence in the economy. apparently only 44% of americans still believe in the american dream. quite low if i ask others. >> this really comes back to the
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question of, has quantitative easing helped everyone? not really, the richest few. for those people who still had a job, it's made their mortgage cheaper and savings have gone up, but it's not helping much at all. so get in touch, we want to hear from you on that. still to come on the show, another dramatic turn in the pro-business candidate heading for a runoff for the president. we'll get full analysis after the break. cute little guy, huh? this guy could take down your entire company. stay with me. on thursday a hamster video goes online. on friday it goes viral - a network choking phenomenon. why do you care? he's on the same cloud as your business. the more hits he gets, the slower your business may get. do you want to share your cloud with a hamster? today there's a new way to work. and it's made with ibm.
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you're watching "worldwide exchange" bringing you business news from around the world. welcome back. a dramatic twist in the b brazilian market. and ceo meg whitman is set to spinoff the p.c. division from the hardware and services division. and deutsche bank saw a third strong quarter. and the south african president appoints a new central bank governor. he will take his job on november 9th.
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indeed, we just had that announcement from south africa with the new central bank governor. he is emphasizing it will be a continuation of previous policies saying the continuity at the bank issues a mandate about fear and prejudice. you've got the dollar rand there. you can see the dollar has weakened against the rand on the back of this news. we'll bring you in for your take on this now. >> first, i will say south africa's new problem is not monetary policy. it's the fact that the -- there is basically no growth in the
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economy. and i think probably it's important that the central bank is led by fairly well respected class, a fundamental problem like it is in the market in europe and in government. the question is whether, in fact, we'll see the kind of fiscal and structural reforms, which the former governor has been going on about for quite some time. >> when you look at africa as a whole, where do you see opportunity? obviously, there's so much room for improvement in so many ways, as you said, when talking about structural reform, are there specific areas you see? >> within the entire emerging market, it's very much a case of
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differentiation. i think south africa as one of the most enveloped markets has considerable news of its own. clearly, you want to steer clear of zambia and ghana, post the most misbehaved pupils in the south african sovereign credit class. but i would say that it's really a case of looking at the underlying fundamentals. that's the most important thing. >> and brazil's candidate has staged a surprise rally in the general election surging past the one-time favorite silva to take second place. she won 41% of the vote.
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a second round runoff will happen later this month. maria silva came in third with 21%. brazil's main stock market has been volatile in the days running up to the vote to get a boost from the result when it opens later today. the market pretty much getting excited about the prospect in neves winning. >> it's been a surreal election from day one. obviously, what is bad news for mrs. rousseff is undeniably good news as far as the markets are concerned. the comeback of mr. neves is quite striking. but there's an underlying narrative here, which is i think very important. this election has been as much if not more about the fear of change as it has about the yearning for change. and it's no surprise that the --
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that the candidate who has been able to achieve the most support so far is the one who is the most reform shy. and i think if miss rousseff is able to paint mrs. silva a friend of the bankers and capitalize on that, then the fear is she'll be able to make commencement out of mr. neves on a more liberal agenda. and i guess the underlying concern here is that the stock of choice between the status quo and reform, the more likely it is that brazilians will offer the status quo. >> how important is it that mr. neves gets the endorsement from
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mrs. silva? and if he does, will he capture the majority of her percent? >> i think he'll get the endorcement of mrs. silva but we'll see if he gets the supporters. that could be a third-way participation as mrs. silva is advocating. it will be difficult for him to approach her. but he'll have a lot more air time than previously. mrs. silva was a four-week wonder and is now out of this race. so i'm still -- i would still put my money on mrs. rousseff. it is a totally different situation in india where it's the incumbent in brazil which is
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still very much in the lead. >> nicholas, if we broaden our focus to emerging markets and look at brazil, russia, india, china, where would you put money? >> i would steer clear of turkey in the sense that it has a serious credibility problem as far as monetary policy is concerned. i think india has been -- as you well know, overhyped to a certain extent. but the politics of reform are a lot more favorable there. i think in indonesia they could be the big hope and the big surprise. expectations were, in fact, not as high as inflated as they were in india. they may play to his favor. i would selectively invest in emerging markets that hard up currency as opposed to local new currency. but there's an underlying resilience to the marginal class because the end debt is a
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quantitatively different one. >> we'll pick up now on news from greece submitted a 2015 budget aiming to cut taxes and ease austerity. they will post a minor deficit for the first time more or less balancing the books in 40 years. this comes as the government announces a vote when parliament convenes today. the vote takes place on friday after three days of debate. the prime minister will be looking to use the vote to end speculation over earlier elections before march 2015. nicholas, the big question in greece now is whether or not they're going to exit imf loans and the payments early, are they strong enough to do that? >> no, they are not. and it was arguable whether in fact porch gal was able to, should have actually gotten the loan.
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ireland clearly shouldn't have gotten the loan. the big difference between greece now and two years ago is that it's political and economic problems are viewsed a country specific. they will not send ripples throughout the eurozone. greece was -- greece mattered because it was the conduit about fears of the break-up zone. syria is -- i think that it is a sign that is clearly in all of these countries and there's a desperate part on the greek government to reclaim domestic ownership. >> because greek equities have been very strong and fixed interest is strong this year. will you be investing in greece? >> no, i wouldn't.
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i would steer clear of greece until it is clear that the government is meaningfully addressing the important structural reforms. so i would be very cautious about investing in greece. no two ways about it, it's been a tremendous rally, but it's been the disconnect between fundamentals very startling. >> i think we touched on every continent. much appreciated. nicholas spiro, thank you. u.s. health officials are playing down fears of further ebola cases saying no new infections have appeared so far. this as the first person diagnosed we bo louisiaith ebol his life. we'll have a live report from jay gray in dallas coming up next hour. this comes as the scientists say there's a 75% chance ebola
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could spread to france by october 2014 and a 50% chance to land in britain by the same date. moving on, scar sales in japan are sluggish since the consumption sales tax in april, but sales seem to be recovering. here is the story live from tokyo. >> reporter: yes, sales of imported cars increased 4% in september. this is the first rise since the consumption tax hike. over the past six months, sales have dropped 1.9% but last month's uptick was driven by a launch of a new model. we'll look at mercedes benz, imported vehicles account for 10% of car sales in japan and the german maker has 22% shares of the import market. and thanks to the new class sit-on, it increased by 11% in september. volkswagon, another german automaker and the number two player in japan saw sales climb 7% thanks to its part in rebound of the mini car.
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also adding lift to sales the recovery of the luxury market. the cars priced over $7,000 increased by 40% last month. sales of model cars priced between 40,000 and 100,000 rose 8%. but this is not limited to the automated sector. goods are recovering at a faster rate, too. so japanese automakers may have to take this into consideration to shift their sales into a higher gear. back to you. >> thank you very much for that. still to come on the show, as the world bank jumps on the bandwagon warning of slower growth in china, we ask what rebalancing means for the metal trade. stay tuned. when change is in the air you see things in a whole new way.
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u.s. unemployment may have reached a six-year low, but americans are as pessimistic as ever. just four in ten people now believe in the american dream according to a survey from the public religion research institute. it's suggesting the number of people who believe in the idea if you work hard you'll get ahead as has sunk below 2011 levels though the number of those who never believed in the american dream has reached the highest level since the poll was
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launched. >> we want to hear from you on this, do you still believe in the american dream? one person writes in saying the american dream is now a nightmare. wall street is built on quick sand and the u.s. is going down the road of greece. if you want to agree or disagree, get in touch with us and join the conversation on worldwide exchange. e-mail us or via twitter. switching focus, the world bank cut its forecast for china's economy to expand by 7.4% in 2014 compared to estimates of 7.6% growth. the washington-based group says local measures to contain local debt and tackle shadow banking would curb investment and manufacturing output. china's slowdown raised fear that is a recent rally of metals could wind down in the next term. the next guest share this is view but says there could be an upside in the face of china's rebalancing. michael, good morning. when you're looking at china's
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metals market, what are the main factors? zbling it is as simple as that. you have to say that there are big structural changes coming through from pretty much being a solid drive in the past decade. china is now just driving something like 50% of the metals demand growth. and that's exactly the point because the other 50% suddenly matters as well. and china is not really growing quite as much. europe is slowing quite a lot as well. so the only nation really growing is the u.s. so you're giving back a lot of the gain that you saw in the beginning of the year. >> but can the growth we are seeing in the u.s. offset the weakening demand we're seeing in china or no? >> this is one we made for quite a while. it is a china trade and now they are trading on the global economic side of things.
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and you mentioned it before at the onset of the session, that growth momentum globally is still standing and doing relatively well. but the rest of the u.s. is not. and i think that just takes another side of it away. >> which metals are most strong liquor lated to a weakness in chinese markets? >> i think the one that comes to mind is the copper has been performing the best this year. >> what is the long-term view? obviously we have seen the price of base metals weaken the past couple months due to china and data out of that country. by going forward, you're somewhat optimistic or bullish, why is that? >> most importantly after the financial crisis markets put a
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lot of pressure on minors to cutback expenditures and spending. we do see that the supply growth is slowing down and yet it can show that those matter the least and are in production cuts. those stand relatively well. you're looking across the basement complex. overall, into the second quarter, some of them are 40% on the year. some are 15% on the year. so there's the story, i think. >> and which companies deal with the situation the best? >> that's always a tough one. i think if you are a diversified minor with politically low production costs, you can probably deal with the situation the best. you can see that big miners are squeezing out of the market at the moment. >> so your top stock pick is -- >> we have a few on the equity side. >> michael, thank you so much
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for joining us. met call strategist at bank of america global research. and airbus says it won 1,077 orders between january and september including cancellations that the net number of orders were 791. deliveries over the same period came to 443. so you can see it is up almost a percent in trade today. staying with france, the european commission is planning to reject the latest french project according to a report by the wall street journal following news that it would breach targets in 2015. stephan is joining us from paris with more. >> reporter: according to european officials, the french budget is in serious noncompliance with the european rules. as a result, the european commission is planning to send it back to paris to be revised. the french budget includes 21 billion euros in spending cuts as part of a broader plan to
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reuse public spending by 50 billion euros, but obviously that's not enough to comply with the deficit target. the french government is expecting the deficit of 4.3% of gdp for the next year, which is way above the original target of 3%. brussels is reportedly not only upset with the level but with the french attitude. it's not like france will try and perhaps fail to aim its targets says a european source but it is like it is planning not to do it. and that's the reason why the commission is about to reject the french budget. the commission also plans to look at the deficit for this year after the government indicated last week the structural deficit will decline by 0.1% in 2014. that's far from the original target of 0.8%. now the race on the political crisis is the main concern in
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france because it could fuel the empty european sentiment, which eventually would increase the support from the extreme right's leader in france. this is a bigger concern that france would face because france could potentially be facing a sanction of 0.2% of gdp. but the government seems more concerned about the political implications and the economic implications. >> and stephan, do you think this debate further hurts his chances of being the economic affairs commissioner? >> yeah, for sure, in terms of timing it's not the best for him. last week the french press said it was good during the hearing in brussels but not good enough to vince the european parliament potentially facing a second hearing. and this is not in the best position to get the job. remember, he was the french finance minister for two years
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and did admit he didn't make the deficit target. in the future, he could judge national budgets. this timing is not the best for him. >> stephan, thank you very much. and switching focus, a powerful typhoon has caused travel chaos in japan and killed at least one person. authorities ordered the evacuation of 200,000 people and canceled thousands of flights. the storm is now headed out to sea. honda and nissan previously announced they were halting production at various plants in the country. the japanese weather also affected proceedings on the formula one track. 25-year-old jules bianca left the track and crashed into a recovery vehicle. he was rushed to the hospital to undergo severe surgery for a severe head injury. and the hacker who is hit
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jpmorgan chase may have hit nine other banks and brokers. "the new york times" identified the companies and didn't say how bad the attacks were. former u.s. homeland security chief tom ridge is teaming up with lloyds of london to launch a company specializing in cyber security insurance. the financial times says the announcement is expected today. an estimated 3,000 u.s. companies were hacked last year. we'll update you on the flashes from deutsche bank we have had today stemming from the reuters report that said that the bank had performed well in the third quarter, especially in retail and investment banking. we have approached the company that declined to comment saying the bank will report numbers on october 29th as was always expected. as you can see, deutsche bank is up 1.75% in trade so far today. let's have a little look at the rest of european markets. the ftse 100 is up .42%.
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leading the way today is the dax in germany up 1.23%. all of europe despite weaker than expected data out of germany. this morning germany leading the charge because it was not open on friday and bouncing back somewhere. but weak data out of germany allowing all of the markets in europe to bounce back. presumably that on the expectation that we might get more easing out of the ecb even though the last meeting was only last week. four more weeks to wait until we can get more easing out of the ecb. let's look at the bond markets. the bond markets in europe department really react that strongly to the ecb meeting last week whereas equity markets have been quite volatile since. the german bond yields near 1.9% where they have been settled the last year or two. ten-year gilts at .021% down. and ten-year italy is near
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2.31%. let's move on to the u.s. dollar continuing to strengthen trend in recent days. it hit the 8% near the broad index this year on track for the strongest run in nine years. and it's logged weekly gains for 12 straight weeks hitting a four-year high on friday. the dollar against the yen today is down 109.4. euro/dollar at 1.25. the dollar is weakening a bit against the swiss franc so far today. h.p. announced they are going to split out two parts of its business. it is up around 8.7%. they performed quite well this
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year, 45% up on the back of cost-cutting and a turnaround story of the split of the business to boost the trend further, however we'll discuss that hewlett-packard split throughout the day. and hp is set to split into two groups, but would it be a mess she breakup? we'll discuss with a couple experts coming up on "worldwide exchange."
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welcome to "worldwide exchange." i'm seema mody. >> and i'm wilfred frost. these are your headlines from around the world. >> hp is set to split into two to remove the hardware division from the p.c. business. and the head of the cdc prepares to brief president obama on the situation but says he's confident the ebola disease won't spread. and a twist to the presidential election. neves clenches 34% of the vote
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saying he'll face his opponent in the runoff. you're watching "worldwide exchange" bringings you business news from around the globe. >> wilfred, finally good news from the markets. we got the better than expected jobs market and u.s. jobs moved higher. >> the one that stuck out was 5.9% up employment. top average over the last ten months of jobs is over 200,000 and does seem significantly bullish. perhaps it's bullish enough for people who look to the possible rate crisis. >> does it raise the prospect of raising rates? that's the big question we'll hear this week. on that look, look at the u.s.
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market trade. arrows indicate opening higher. the s&p is up 7 points, the dow jones up 59 and the nasdaq up 13 points. stocks ended lower despite friday's gains. the russel dropped 1.25%. the ftse 300 is sharply higher up 20 points at session highs. we'll also dive into the individual european markets. draghi disappointed last week, but we saw a rebound in shares friday and that rebound continues into today. you're looking at the ftse 100 up 27 points. the xetra dax is up 109. the ial yap markets are up about 58 points with a flurry of data out this week as well as in the u.s. with the fed speakers very important and the commentary about the prospect of rising rates will be factored in by investors. >> absolutely.
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thursday, friday and monday, quite a lot of volatility in european equity markets, but we have not seen the same volatility market in the u.s. bond markets managing to slug off the ecb market and stay sort of range-bound. the spanish yield 2.1%. the british yield 2.3% with the ten-year bond market at 1.1%. the similar story in the ten-year u.s. treasury which we have moved on, but nonetheless it's around 2.43% today. it's been ranging between 2.4 and 2.6% despite the strong jobs print on friday. it didn't move too much. let's go on, the euro strengthened today about a quarter percent up against the dollar. the dollar is giving up ground against the yen, but nevertheless on friday the broader dollar index hitting its 12th straight week of gapes. so what you're seeing today is not really the full story with the u.s. dollar continuing its very strong run. seema? the big tech story today,
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wilfred, shares of hewlett-packard trading sharply higher. the tech giant is reportedly set to break into two separate companies in the latest attempt to improve its forcheck up. reports say hp will spinoff the pc and printer business from the corporate hardware and services unit through a tax-free distribution of shares to stockholders next year. meg whitman is ceo of the hp inc. and patricia russo is the chairman of hewlett-packard enterprise. dion weisler is the ceo of hp inc. >> it's a big part of the business. printers and pcs are $56 billion. so it's a big move.
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you have to see what else is left in the company after they accomplish this spinoff. >> indeed we'll be discussing that more later in the show. now the first person diagnosed we ith ebola is being treated in nebraska. the freelance nbc news cameraman who contracted ebola last week is expected to arrive in nebraska today for treatment. that's a separate case. dr. friedman will be briefing president oh baa ma today saying he's confident this will not spread into the u.s. >> the bottom line is we know how to stop it and it's not going to spread widespread in the u.s. we can do public health interventions that stop it in its tracks.
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>> and nbc's tracie potts is in washington with more. tracey? >> well, wilfred, we expect doctor frieden to update president obama today. the cdc has 35 people in west africa trying to con tape the disease there. here they are focusing on dallas. they have 48 people they are tracking who came in contact with thomas duncan at some point when authorities believe he was symptom attic. only ten of the family members and health care workers are high risk. but they are waging them for 21 days for the three weeks required. meantime, the nbc photographer is just coming in today. we just got word he's landed in maine and will be in omaha as they try to treat him. two ebola patients being treated. dr. sacra is now back in the hospital, this time in massachusetts, because he spiked
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a fever. but as you just heard, the cdc is trying to reassure the public and today we'll reassure president obama this is not an outbreak or epidemic. it is not the beginning of what we're seeing in africa. also, the pentagon has gotten involved and now they are expanding their numbers. instead of 3,000, they are sending 3,600 people overseas to africa to build hospitals and train workers there to contain this deadly virus. wilfred? >> tracey, thank you very much. of course, ebola fears have been rocketing the market. last week we saw transportation, specifically airline stocks underperform due to ebola fears. we also watch the currency markets specifically the u.s. dollar continuing to gae ing ti momentum trading at 12.2% over the last five years. we'll bring in the chief investment officer at commonwealth financial network. brad, we are about to enter the third quarter earning season as
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the u.s. dollar could be a big thing for those who do business overseas. what are your thoughts? >> i would agree with that. it will be a headwind and i think the appreciating dollar is very likely to continue with three major supporting factors. and any u.s. company has to cop te contend with that. >> let's consider the jobs print we had on friday. quite a significant beat, but is it really the longer term trend that's more important? >> it is the longer term trend but it is equally if not more positive. you mentioned earlier we have the average of over 200,000. prior to last month, we had the longest streak over 200,000 jobs a month since the late 1990s. now we hit the highest gdp growth since 2011 and before that 2006. the economy is firing on all
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cylinders. we are doing well. >> how big of a concern is europe to you, brad? because last week draghi spoke and didn't deliver exactly what the market wanted and we saw european stocks move lower but the european stocks reacted negatively with the shift to the jobs report. when you look at the u.s. stocks, how big of a concern is europe as a headwind? >> europe is a headwind, not so much. europe is a tail risk very much so. the financial system, we saw the systemic effects of the european financial system in 2011. that could happen again. scotland woke a lot of people up to what might happen with europe. and the problem is not gone away. in fact, it's gotten worse in many respects. >> but there's a lot of multinationals have that exposure to europe, so the lack of growth or slowing growth i should say, that's not a big concern for you? >> earnings in general are starting to take a hit.
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we have seen expectations come down by almost half of the third quarter. i think that's also a weighing on the market. europe is part of it and currencies are a big part of it, wage growth pick up and are starting to see companies not be able to cut as much as they have been. you mentioned layoffs earlier, we're getting to the end of that way to make money. now our companies are starting to invest and that's going to hit margins and earnings growth. >> switching focus to the domestic market, a lot of investors saying we have an improving economy, growth in jobs, low inflation, that's a goldilocks scenario. should investors get into stocks at this point? >> i think being cautious makes sense but i think the dollar cost average including money into work, putting money to work right now is starting to make sense. if you go back to history, improving the economy with a rise in gdp which we're seeing
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equates to a rise in stock multiples. it's procyclical. even though the stock market is very fully priced, it's still in an uptrend. and right now the trend is up until its proven wrong, so yes, i would start to put money to work. >> all right, brad, we'll leave it there. the chief investment officer at commonwealth financial network. now, brazil's pro-business presidential candidate makes waves as he readies for a runoff. is it still too close to call? we'll discuss after the break. [ male announcer ] ours was the first modern airliner, revolutionary by every standard. and that became our passion. to always build something better, airplanes that fly cleaner and farther on less fuel. that redefine comfort and connect the world like never before. after all, you can't turn dreams into airplanes unless your passion for innovation is nonstop. ♪
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welcome back. we'll give you some headlines, hp shares rally as meg whitman is set to break the company into two. the first u.s. ebola patient is fighting for his life. the cdc will brief president obama later. and neves will face rousseff later in the election. a small group of pro-democracy protests continue to occupy the street surrounding the government headquarters in hong kong but civil servants have been allowed to return to
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work. pauline is here with the latest outside of hong kong. >> reporter: a lot of protesters have left. as you can see, there are a smattering of protesters here and there on harcourt road. over the weekend the government made it clear there would be serious consequences if the main arteries were still blocked. so we saw a call from the university professors and former judges for the students to go home and also to keep their safety in mind. well, these arteries are still blocked but we have not seen the government take a really hard line enforcing some of the barricades out. but it did cause a lot of traffic gridlock this morning as people tried to get into work or go to school. on the financial and commercial front, it's impacting hong kong. our producer was just taking a walk in central and soho and normally the streets were teaming with people, but there were very few people on the sidewalks there. i also spoke to the founder of
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the retail chain here in hong kong who is the founder of g2000 which has 7,000 shops here in hong kong. between sunday and today, sales in his stores have dropped 35%. so that gives you an idea of the financial impact this has had on individual businesses. where do we go from here, seema? student protesters are still supposed to have this meeting with government officials. the number two here in the government talking about the situation, even though beijing has stated repeatedly it's not going to budge on its stance for universal sufficient ramg. seema? >> pauline, thank you so much for the latest from hong kong. brazil's pro-business candidate neves took second place between the current president dilma rousseff. this means he'll go against
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rousseff later this month. marina silva came in third with 21%. earlier it looked like silva was second and in the end neves gained momentum. >> you can see brazilian stocks tick up. >> it will depend on how much neves can take from the third-place candidate.
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still to come on the show, it's an i.t. spending spree. we ask the experts where companies need to put their dollars to save ahead of the game coming up. [♪] great rates and safety working in harmony. open an optimizer +plus account from synchrony bank. visit myoptimizerplus.com to open an account. service. security. savings. synchrony bank engage with us.
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let's get you a check on the u.s. pre-market trade with
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stocks indicating a higher open with the dow jones up 57 points. the nasdaq up 12. good news about the labor market continuing to provide fuel to stocks. we're looking at the s&p 500 indicating a higher open by eight points. a big story is sharing of hewlett-packard trading higher in pre-market trade. the tech giant is reportedly set to break into two separate companies in the latest improvement to separate the corporate hardware unit from the pc unit. peter, i have to ask you, before we talk about the i.t. spending environment, what are your thoughts about this potential spinoff at hp? >> yeah, assuming the speculation is correct and will obviously see that from hp today, it will create two companies of equal size in revenue. the interesting thing here is it
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will allow the enterprise division really to focus on enterprise customers. and it would allow the pc and printer business to focus on optimizing its supply chain and therefore really building perhaps a stronger company. the challenge is that the pc and printer business still has to straddle between selling to enterprises and selling to consumers and that still leaves open the question of whether or not there are more opportunities to release value by perhaps looking at a later stage even splitting out the pc from the printer business. >> well, let's talk about i.t. spending and how much companies are spending on tech services despite the recovery in the u.s. economy. i.t. spending has been depressingly low. what does it look like for this quarter and for the future? >> yeah, so we are actually seeing this year the market will probably end up around 3.8 trillion dollars. it's going to grow actually at a as n increasingly healthy clip
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rate for 2015. it will probably become very close to a $4 trillion technology market. we're seeing acceleration both in devices and in servers. and that goes back to the h.p. situation. that's actually something that could benefit h.p. if it sees the speculation correct around the breakup. we continue to see the strong software market and strong services market even though there are substantial changes in technology caused by this evolution towards the digitalization of business. but the market is strengthening and 2015 will strengthen in europe even with the depressing part of the technology market globally. >> peter, you talked about the digitization of business there, is that a bad sign for the market? >> we believe the digitization of business creates a change in the need of skills in technology.
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it moves us more towards needing skills around analytics, smart machines, how to work with the internet of things. and so what it will do is it will automate certain jobs that are knowledge worker jobs. we believe by 2025 which is far out, that one-third of existing knowledge worker jobs will actually be replaced by smart machines. either to do decision or actually to do hard work. what does happen, though, at the same time is we're seeing shift of work over to more complex decision environments where human beings really still are needed. but it is going to create a very complex labor market because we're going to have a significant shift in the economy caused by the digitization of everything around us. >> and your firm is projecting worldwide i.t. spending to surpass $3.9 trillion in 2015 as companies strive to keep one the
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digital industrial economy we have been discussing. does that benefit new start-up areas of i.t. or things like hp, ibm and the like? >> well, this change is really what's putting strain on companies such as h.p., ibm, oracle and snp because all software is eventually moving to the cloud. we are seeing many companies move away from owning their own hardware by 2018. what we're going to see is half of the server capacity globally will be with companies that are serving enterprises. so enterprises won't own their hardware anymore. so it's creating a significant strain on the old established companies. but it's also creating a whole new category of company that is are technology companies. the very interesting thing is
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that every company is becoming a technology company and that creates an exciting part of how we need to look at companies. we need to look at very established companies like ge or siemens as technology companies. >> peter, thank you very much for joining us today. peter is the senior president at research at garner. u.s. unemployment may have reached a six-year low but americans are pessimistic as ever. just four in ten people now believe in the american dream. this according to the public religion research institute. >> so we've been asking you, do you still believe in the american dream? john rogers wrote in to say that 96.6 million people are not in the workforce. and michael e-mailed in to say, the american dream appears to be much more convoluted than it
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once was. hard work is no longer rewarded and work is harder to attain. e-mail us at worldwide@cnbc.com and you can also tweet us at our personal handles at the bottom of the screen. what's going on in the u.s. treasury market? our next guest says there should have been a post-payroll soothe. we'll discuss that next coming up.
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welcome to "worldwide exchange." i'm seema mody. >> and i'm wilfred frost. these are your headlines from around the world. >> hp is set to plan off its pc business from the hardware and services division. shares rally in pre-market. the first person diagnosed with ebola in the u.s. is fighting for his life. the head of the cdc will brief president obama saying he's confident the disease won't spread. >> a dramatic difference in the brazilan election. neves clenches 34% of the vote meaning he'll face-off against yousseff in the election's
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second round. you're watching "worldwide exchange" bringing you business news from around the globe. >> if you're waking up with us in new york, thank you for joining us here on "worldwide exchange." a look at the u.s. pre-market trading with markets indicating a higher open up 50 points. the s&p 500 is up 6 and nasdaq is sporting a gain in pre-market trade after u.s. stocks extended their gains on friday on the back of the better than expected jobs report. but it was the russel 2,000 that continues to lag. we'll keep a look at the small cap third quarter earnings kicking off reporting earnings on wednesday. thompson is expecting a 4% increase in profits across the board when you look at u.s. companies. so earnings will play a catalyst for stocks going forward.
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we'll also dive into the european regions for the markets. we are showing a gape of 70 points. france up 11 points. interestingly, the german market continues to move higher despite the downbeat industrial figures out of germany. nevertheless, a gape this morning. the ftse 100 gaping 20 points after comments from draghi last week with the focus on the jobs report. now also in focus in the u.s. is the big tech story with shares of hewlett-packard trading sharply higher in pre-market trade. the tech giant is breaking into two separate companies in the latest attempt to improve forcheck ups. the announcement could come today with hp spinning off its pc and printer business from the corporate, hardware and services unit. through a tax redistribution of shares to stockholders taking place next year. now we'll bring in jon fortt, i have to ask you, many investors called for h.p. to break up the
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company, why are we hearing about this now? >> well, to answer that question is probably that the pc business has been going through an unexpected uptick. a number of reasons for that. tablets growth has sort of stalled and people realize they need productivity machines. and that business for hp is really a cash-flow machine. so hp has explored selling that business a little more than a year ago. couldn't really find a taker at the price they wanted. it turned out to be more valuable and investors are seeing more value in it than a potential inquirer would have a year ago. this is really the failure we're seeing now of the vision of more than a decade ago of hp as a hardware superstore. we thought they could serve consumers and enterprise pcs and a huge amount of goods that are walmart style to everybody,
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pressure suppliers providing smaller prices. at the transition to mobile and cloud, that model didn't pan out the way hp intended. now this company that was kind of a piece together conglomerate of a bunch of other businesses decided to split apart. >> and jon, the stock price is already down pretty well so far this year on the back of cost-cutting and sort of a turnaround story. is this opportune timing for meg whitman or a sign of the further side to come? >> well, i think it is at the very least opportune timing, you can't break out the crystal ball to know how long the beneficial trends will last. but as i mentioned, the pc business doing well, the pc and printer business is not necessarily seen as the loser. it would have been seen as more than a year ago when dell was trying to go private basically on the idea, hey, nobody wants
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to invest in the pc business anyway. now everybody can say, hey, that business had more life than a lot of people expected. the question is, though, even though that business continues to be a cash cow, still not growing or expected to grow long-term. the enterprise side of businesses that hp is in, networking, storage, software, industry standard services, growth issues in all of those, so there are going to be questions for investors on where each business goes from here. >> jon, thank you for joining us. and a look at the treasury market. we saw u.s. treasuries move on friday on the back of the solid u.s. unemployment report. we have the u.s. employment report. we saw u.s. treasuries move lower as investors shifted to equities trading near 2.4%. to speak more on the bond market, we'll bring in our next
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guests to those looking for higher yields on the year-end but that didn't happen. the senior director of newedge usa and a cbs contributor, we'll talk about the bond market with deutsche bank writing that the bond market is exhibiting bubble-like tendencies. will we see a massive exodus once the markets rise? >> well, there's no question it's a crowded trade. but the long end last week of the 30-year was definitely lower in yield, higher in bond prices. and that's a big plus considering the strong jobs report. you've got to remember, since 2008, 16 million people, 16 million people have left the u.s. labor force. that's a big number. those people aren't spending money the way fully employed people are. and i think that's one of the biggest drags we have going. we lost another 30,000 people last month of people leaving the workforce. >> larry, i want to bring up the chart we just flashed up to show
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the differing situations the last time the unemployment rate reached 5.9%. the stats you sent through to us. in particular, highlighting the differential in the yield the last time unemployment was this low. do you think yields will stay lower for longer like this, are there reasons for that, or as we have higher unemployment numbers, why haven't they shown up already? >> that's a great point because you're right. five years ago in july the unemployment rate was 5.9%. it's 5.9% today. but the ten-year was at 4% and today we're at less than 2.5%. so i think that there's one reason why the fed should raise the fed funds rate. and that's because of the bubbles that are lurking in the system. the same bubble that is created the lehman meltdown with the fed choosing to do nothing about it. angela merkel's labor economist, she's to the left.
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so she's going to do everything in her power to really try to do something about the 16 million people who left the labor workforce and will use monetary policy to try to bring them back and try to stimulate the economy. even though she's risking blowing up asset bubbles the way we did in 2007. >> sure. also want to talk about the junk bond market, larry, because reports show that the junk bond market has returned on average 14% each year. municipal bond funds are up 6%. so if you're feeling confident in the market, should you put your money in those markets? >> well, junk is or has sold off dramatically over the last month. that's another thing that makes me concerned about u.s. equities because junk bonds are down substantially. i mean, junk bonds are essentially in a correction over the last couple of weeks. i would think if junk gets a little cheaper, it's still fairly rich by historical standards but a lot cheaper than
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it was say a month and a half ago. so i think you can nibble in when you get that stress of the bond market and the bill gross exit created lot of stress in the junk bond market. >> absolutely. larry, stick with us, we want to get your take on the brazilian debt market as we watch the elections on the other side of the break. indeed, coming up next, another dramatic turn in brazil's election as the pro-business candidate heads for a runoff against rousseff. full analysis after the break.
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brazil's pro-business candidate has staged a rally in the general election surging past marina silva to take second place behind dilma rousseff. meanwhile, environment list marina silva came in third with 21%. aecio neves is in second and will face-off against dilma
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rousseff later this month. >> do you recommend that neves can take a significant amount of silva's votes? >> i think the way mr. neves is surging is dramatic, political and almost historical cops consequence. he's up 15% in the polls in two weeks. so i think that the former hedge fund manager and former head of the central bank who sold his hedge fund to u.s. bank jpmorgan is probably one of the smartest financial people in this hemisphere or this part of the americas. not in this hemisphere, but i
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would say that there's so much momentum there that the market could warm up to this. the bottom line is he has to take at least 60% of silva's support to beat rousseff. and that's a big number, but over the next three weeks there's the probability creeping back in with a big balance for braz brazilian equities. >> is this more attractive for th brazil in your eyes? >> the russian equities are trading at almost half a percent of 60% hook value. if you can deal or want to hold them for the long term, but for the most part, stocks in mexico, most of the emerging market equities are much, much cheaper than u.s. equities. the dollar has made this unprecedented surge. if you look at the dollar on a
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technical basis, it's the most overbrought it's been in decades. so i think over the next five years emerging market equities are a better value than u.s. equities. they are just very cheap. >> larry mcdonald, senior direct director and cnbc contributor. kate rogers at the cnbc headquarters has more on the u.s. dollar. >> hey, seema. the surging dollar is posing a triple threat to u.s. companies profits by driving up the cost of doing business overseas. thus pushing down the value of non-u.s. sales and by possibly signaling weak international demand. the dollar index is up about 8% since the end of june and a few analysts see it stalling out any time soon since the u.s. economy is on much better headwind.
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many are multinationals as a group and generate half the revenue in u.s. markets. investors have factored in the strength anything dollar on third-quarter earnings. they say the third quarter profit forecast has dropped to 6.4% from 11% two months ago. the currency effect has yet to be felt in future quarters. q4 profit forecasts have dropped slightly to 11.1% from 12% in july. now analysts say ford's profit warning last week could be a sign of things to come. the automaker cutting its 2014 pre-tax profit forecast citing steeper than expected losses in russia and south america. over the next two weeks we'll get the onslaught of earnings from u.s. companies with the highest in overseas sales. analysts have been slashing their estimates by an average of 5%. intel reports next week as well and generates more than 80% of
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its sales overseas. but unlike yum, they have nudged up the tech sectors with 60% overseas in sales. tech also issued the most profit warnings for the third quarter. back to you guys. >> kate, thank you for that. we're about to head for a break but before we go these are your headlines. hp shares rally in germany as ceo meg whitman looks to set to break the company into two. the first u.s. ebola patient is fighting for his life with the cdc said to brief president obama later. and in the brazilian election neves comes in second to rousseff with the market set
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let's take a look at the top stories. it appears dr. thomas frieden says the one dose is gone and won't be available for ebola any time soon. the cdc will brief president obama later. >> it is understandable people are scared, it's a deadly virus, but back to basics. the bottom line is we know how to stop it. it won't spread widely in the u.s. for two basic reasons. we can do infection control in hospitals and we can do public health interventions that stop it in its tracks. >> bill gross says he's happy to be back at work. another story we're watching closely in his first interview since quitting pimico. gross says he's exuberant about giving up management responsibilities. gross had a secret meeting in
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mid-september before leaving pimico with rival bond manager jeffrey gunlock at double line capital. he told gunlock pimco was going to fire him and gunlock says he thought there was a possibility of joining forces. in other news, the hackers who struck jpmorgan hit nine other brokers but did not identify the companies and it's not clear how serious the attacks were. last week jp more michigan says the data breach affected 83 million u.s. households and small businesses. meanwhile, former u.s. homeland security chief tom ridge is teaming up with lloyds of london to launch a company specializing in cyber security insurance. the financial times reports the announcement expected today. an estimated 3,000 u.s. companies were hacked last year. okay. we'll give you an update on european markets. as you can see, green across the board. led by germany up three quarters a percent. that's large by because of the bounce-back of not opening on friday when markets were up in
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positive territory. that is also there despite the weak print in machinery orders earlier today. that might mean that people are expecting positive or possibly positive earnings pushing the easing up across the board. signs in the u.s. continue to show positive trading with the s&p up 4 points and the dow jones up 39 points with the nasdaq up 7. the focus is on the third quarter earning season this week. how do you make money in markets like this? this is what the experts have been telling us this morning. >> in this environment you should be worried on assets and gold is one of those. a lot of private investments have huge amounts of gold when normally growing equities. the gold equity markets have gone down but we expect it to be at $1,000. our forecast for that oil does recover as a result of
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either a discipline relative to the quarter. the euro/simildollar trend super strong. the markets have tried to trade so many times and so many events over the past quarter, and this is finally working so that means more downside for euro/dollar and means dollar is a lot stronger. let's give you and rundown of what to watch this trading day. no economic data out on monday but the kansas city fed press ether george is expected to speak later today. this week our focus turns to the earnings season. do you think earnings will help or hurt stocks going forward?
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oh, it's definitely going to help for some of the adverse reasons i come from. i would say at least right now at least if we see disappointment and the market pulls back, that's healthy. which is why i like to see the 200-point days from last week and the market pulls back. i'm rather bullish at the highs, but i think of earnings that do disappoint on a percentage basis more than across the board for the s&p, i think later on that warrants more of a bull market because it fuels more buying power. again, the problem is that on the side of the earnings itself, is it leading to a longer term trend in the companies to show us there's a gaping problem. but again, i disagree with all that saying it's healthy going forward. >> michael, on friday good economic news was all good news for the markets. does that mean we have genuine
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confidence and the rate hike is irrelevant? >> one thing the markets have done the last couple of years is getting used to factoring in growth projections because they have been slightly anemic and don't surprise too often. that being said, if growth does pick up here in the u.s., which i don't the payroll number gets me extremely excited just yet. it is a step in the right direction. one thing i like to bring up quickly is the fact that in the commodity markets you're starting to see real breakaways to the upside in coffee, cocoa and some of the sauce where the rest of the markets have been breaking. if you look at the longer dated charts, in particular, gold and crude oil like ten-year monthly charts, we are approaching the 100-day moving averages. if we see breaches, i would become bullish. >> have you been looking at coffee up 9% on brazil's supply concerns, do you know what is driving coffee higher and is this a trade investors should
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focus on? >> what i think investors should focus on is the fundamentals of coffee sporadic region to region. but as a whole on the gamete the contract itself is very adverse to large volume swings. but right now at least it's one of those contracts at least here that in futures land we have seen is in breakout mode. and further extension is probably warranted because of the seasons in the southern hem steer. and i'm not surprised that some of the softs are behaving completely adverse to metals to currencies and of the sort. i think that's very healthy for the market and again that teases back to why the treasuries are in a narrow range to give us the same result. >> michael, thank you for your time. michael gerka, founder president of brew and hill partners. we are expecting a positive open with the dow up 47 points and the s&p up 4 points and the nasdaq up about 8 points. that's all we've got time for today. i'm wilfred frost. >> i'm seema mody.
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"squawk box" is next. when change is in the air you see things in a whole new way. it's in this spirit that ing u.s. is becoming a new kind of company. ing u.s. is now voya. changing the way you think of retirement.
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good morning. welcome to "squawk box." hp is expected to split into two as early as today. and one ebola patient is in dallas and the other is on his way to nebraska. and a typhoon sweeps through japan on this monday, october 6. "squawk box" begins right now. good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe
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kernan and andrew ross sore kso. government employees return to their jobs. schools reopening and today is the deadline for demonstrators to scale back their protests. protest leaders are talking about political reform. in market news investors have been riding a pretty wild ride to start october. in the first three sessions, the dow has moved by 721 points. unfortunately for the bulls it has not been all to the up. we'll check out the u.s. equity futures at this hour with the dow closing above 17,000 on friday. you can see futures are indicating up 44 points for the dow and up by close to five points for the s&p. andrew, over to you. thank you, becky. we have today's top corporate story and that is hp. hewlett-packard saying they have plans to split itself in two coming after the tech giant reportedly explored a number of options in the recent months including the

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