tv Worldwide Exchange CNBC November 28, 2014 4:00am-6:01am EST
welcome to "worldwide exchange." i'm seema mody. >> and i'm louisa bojesen. >> how low can it go? opec responds to calls to cut production the. >> the falling oil price hiking fears of deflation, though. in europe, a key reading on prices due in around an hour is expected to add pressure on the ecb to act. >> big holiday bargains to be
had. u.s. shoppers hit the stores and millions hit the mall .shopped online on thanksgiving. and astrazeneca telling cnbc exclusively that pfizer's takeover would have probably failed due to tax rules and any deal would have been destructive. >> if we had agreed to a deal, the deal would have fallen apart. it would have resulted in destruction in our company. >> hi, everybody. welcome to another "worldwide exchange." we've got two hours together. this is some breaking data just hitting our wires at the moment. and we're looking at the italy oak adjusted rate and basically
what that means is the october jobless rate hs his a new all-time high. >> it has. came in lower than expected. right now, we are looking at youth unemployment in italy rising to 43.3% in october. >> clearly it has not come to fruition yet. >> the september unemployment rate revised up to 12.9% from 12.6%. but, again, underto underline the october unemployment rate, a new record high having been hit in this states, rising to 13.2% from what we saw back in september. >> another big story today has been oil. oil price dominating the market. the price of nymex, by the way, hitting $68 while brent on course for its biggest monthly drop in 2008 after opec decided not to cut production of yesterday's closely watched meeting. >> now, a sharp fall for a
number of major european oil majors. bg group, for example, total, gallop energy are all downgraded this morning by nomura. on the upside, though, european airline stocks, look at that, all in the green. heavily in the green as they reap the benefits of a cheaper oil price. air france klm up by 6.76%. >> the ruble has hit a fresh historic low amid a rally in the dollar. other commodity linked currencies, including the dollar and the crohn ya have come under pressure. so all parts of the market being impacted by the drop in the price in oil and the opec announcement yesterday. >> definitely. now, steve spoke to the oil minister of the newly appointed oil mip sister in nigeria and asked her what she had planned. >> for me, it's a privilege
being a woman and being the first woman to hold this position. of course, we are hoping that over the next year, we will see more stability in terms of the market coming in. >> we don't have an extraordinary meeting in the spring. there must have been a push for the meeting. given the -- there was some call for that, but we felt that at this point in time, the rollover should be sufficient to ensure the decline in price is kept to a minimum or erased altogether. we would hope that it doesn't come to a meeting. if and when that is necessary, we are always ready to call one in. >> the markets are going to test opec, it's going to test the producers. do you think $70 is a challenge for opec? >> we would hope that it wouldn't get to that point. >> and finally, do you expect now nonopec to share the burden?
it's something we talked about beforehand, but it can't just be opec. the uae minutester said to me opec didn't cause this supply. >> no, incident didn't. i think going forward that is very clear. were all in this together. it's not just opec. it will not necessarily change the picture if the nonopec countries don't share the burden. >> clearly, a divided opinion on what opec should have done yesterday, but we did not see an oil cut. jason gammell from jeffries joins us to help us understand where the price of oil goes from here. jason, how are opec countries going to secure their budgets without the price of oil back above $80 a barrel? >> they're simply not. they're going to have to break into their foreign currency reserves to keep things balanced in the near term. i don't think strategically anyone in opec wants to see oil prices below $80 or even below
$90. but tactically, they're trying to help others to force the burden on reducing production with them. i think what we'll see is capital spending cuts in places like the united states that will help to share the burden with opec over the medium term. >> following the announcement, brent crude hit its lowest levels since august 2010. how much lower can it go? >> setting a floor is very difficult. the cash cost on existing production goes down to $45. now, i'm not saying it's going to go there, but that is really the first break point that you would have. i think we probably see brent prices drifting before they can find support. >> jason, good morning, it's louisa. talk us through what you're looking at where you would say, look, it might be a buy. >> well, in particular, we like royal dutch shell simply because it has the most financial sector
within the budget. it can operate down to backside 58 brent. we're clearly a long way from there, but their balance sheet is pretty pristine. it's about 12% gearing. we think shell can get through this environment in relatively good financial health. now, at the other end of things, we still like dg very well because we see some significant inflexions in their operations coming up over the next year with australia and l&a starting up and with brazil ramping up production during that time frame. >> you mentioned oxley, as well? >> yeah. oxley in the united states is very interesting because they've got about $10 billion from divestiture proceeds. now, over the medium term, oxy does need a higher oil price. but what's interesting is with a pullback in oil prices and equity prices, that buyback program becomes all of a sudden more powerful. >> do you think if the energy
prices continue to drop does that -- companies dividends? do you think that will delay dividend hikes or back on how much they offer shareholders? >> that's one of the biggest questions we're receiving from clients right now. i think the existing dividend is pretty safe for most of these companies, for at least a two-year period of relatively low oil prices. but the question about hiking dividends is the key one. i think it's unlikely we're going to see sithd increases in dividends in the sector so long as oil prices are low. >> we're going to leave it there. jason gammel, thank you for your time. we want to hear from you on this. where do you see the price of crude headed? john tweeting in, going lower. $45 a barrel, maybe $42 by july. yikes. some bearish calls on the price of poil. of course that is good news for the consumer in terms of how much you're paying at the gas pump in terms of what other people are saying. let's take a look. if you want to join in on the conversation here on "worldwide
exchange," there you go, daniel tweeting in, is there a correlation graph between oil and gas or russian defcon level or troop movements toward europe or some accidents in arabia? tweet us. you can see our handles on the bottom of the screen. if you're just joining us, we were called flattish to a couple of points lower. we are seeing the stoxx europe 600 reflecting precisely that. we are down somewhere in the region of 0.5% on this last day of measure. markets today, still a half a day of trade for u.s. bond traders. ftse 100, xetra dax and the cac 40, ftse mib all trading a bit
lower, down by 0.5%. we are looking out for the eurozone inflation data due to hit around an hour's time or so. we are expecting to see it coming a little bit lower once between, which could mean that another finger yet is pointed at the ecb. you have to step in and give us more stimulus from looking at the first quarter following the comments over the past couple of sessions. let's move on and show you what took place in bond market, what's taking place at the moment. we're continuing to see buying across the board in bonds. i cannot highlight this enough. we've seen this enough, extraordinary lows being hit in yesterday's session. we continue to see pressure with the german ten-year yielding around 7% ten-year and the uk yielding around high of 1.9%. we're going to focus in on -- focus in on the yield pushing
lower. it's not just in the u.s., it's not just here, it's across the globe, seema. >> absolutely. the bond story is being watched very closely by investor. in other news, france, italy and spain will be told today they are at risk of breaking eu budget rules. according to documents seen by reuters, the countries along with belgium, portugal and aus try ya could breach the eu budget rules. however, the commission is likely to defer any decision to march of next year. now the european central bank's vice president sent tongues wagging this week over ecb bond buying. he said the purchase of sovereign debt and, quote, other assets could be an option if the environment does not develop as expected. >> well, in the first place,
we -- the situation on financial markets in europe is different from other parts of the world. and is not a situation of general -- in financial markets in europe. second, of course, our monetary policy is directed to use new channels to try to ensure price stability in the area as a whole. and we are trying, then, to increase our monetary base in order to have channels that will still -- to various parts of assets. which then can increase the growth and inflation in the euro area as a whole. that's our primary objective is about price stability in both directions in some magic way. and financial stability concerns have to be addressed by other types of instruments that are
called market financial policy and that has been given to central banks all around the world recently. >> well, stephane caught up with the french economy minister who discussed the view of ecb with fo forms. good morning, stephane. good to see you. happy friday. >> good morning, happy friday to you, as well, louisa. the new french economy minister was appointed only three months ago and is confident that the ecb will act in the next coming weeks or months. but it's all that france will have to do its homework, basically implementing some reforms, this to kraelt create the political conditions for an ecb intervention. >> normally, you never expect anything from the eb. that's the best way to have something. >> to be serious, i think first that the ecb will completely
fall from this mandate. for sure, the ecb will act in the weeks or months to do so. but my -- i mean, my top priority is that if we do reform in our country, if we do reform in germany, if altogether we create the political context of more ambition for europe and if we invest in europe thanks to the -- so we create a european new deal, i will show you how and this european new deal is a political condition of the ecb's intervention. >> he also told me that france will present some new economic reforms shortly. they will be presented before the parliament at the beginning of next year. and he also believes the current situation in france in terms of public deficit is due to the lack of growth and also to the lack of inflation. but what is date on the french
public deficit situation. louisa, i send it back to you. >> stephane, i'll capture it and happily throw it on. thank you very much and we'll see you soon again. meanwhile, expectations at the ecb will have to deliver further stimulus have increased following the weaker than anticipated french, german, spanish inflation figures. now we're waiting for the big one because in around 30 minutes' time, about 45 minutes' time at 11:00 cet, we get the overall number with the eurozone with most forecasts suggesting prices will have fallen further on the month from october's reading. we're looking for a print of 0.2%. that's the kind of average expectations. hi lessandro. how excited are you about inflation at the moment, the lack of inflation, the drop in oil through the big commentary that we're getting out with regard to more stimulus? are we moving towards a new era for markets heading into 2015? >> it's the new normal.
the data is due in a couple of minutes or a half an hour or so. it's all data and i think the market is moving on already. the price drop in commodities is compacting forward expectation. and so if you compute credibility on the basis of what the markets are pricing forward, one year forward, two years forward, it's a different story. and we see really a lack of credibility from the ecb. >> how are we supposed to think about oil at the moment? and i'm just glancing at a twitter comment that came through a bit earlier from daniel. he says great, mormon tear ease, lower oil, less inflation equals less money printing and he's pointing out the u.s. markets. he says would cares. >> if you're long stocks, you care. there is a transfer of income across the sector, across inflation, across the age pyramid. that's all stuff we've seen in japan already. it's nothing new in reality. we've seen already the piling up of excess reserves in the u.s.,
holding 2.5 trillion of reserves there after qe. there's not too much signs of lending, actually. this is what's going to happen in the eurozone, as well. they're going to buy bonds and banks are going to hold money. >> the number that comes out in 45 minutes' time confirms that inflation continues to grow here in europe. is that news actually good news for the markets because then it confirms that the ecb will, in fact, unveil full blown quantitative easing? >> it's good news for the market. especially in the euro/dollar, especially in the bond market. but make no mistake, at some point there will be a trigger point where deflation is not so good any more and we will have those issues as well as for those countries. >> that's a question of whether the market is overly optimistic of full blown quantitative easing and whether other structural reforms are needed to provide a boost to inflation. >> definitely reforms are
needed. but the first round of reforms in 2002 in dwermny is lower wageses and higher employment. >> where do you see value in fixed income? as we're looking at multi year lows, i was aconstituented by those yields hit yet across the globe. >> you look at the gdp market, there is still a gap between bunch and jgbs. three-year bonds are between 1.75 and 3%. we are looking at a slower fell and a fed that starts later than expected. >> thank you very much for being with us. happy weekend. a couple of hours to go. not that we're counting.
and coming up on "worldwide exchange," we're discussing a whole host of stories. brazil's president hoping for an economic turn around on a new finance minister. winter weather does not stop millions of americans from hitting the stores yesterday. and uber hitting the road block and taking to the streets of nevada.
to be frar, he needs time to supplement the reforms. so in six months, it's unlikely we'll see the impact of the modi effect. >> and, of course, the monsoon season came later than expected in india. that could weigh, i believe, on agricultural output this quarter. >> yes. actually, we're seeing food prices coming off and that's showing inflation numbers which is good for modi, actually, because that will help the central banks, you know, price in monetary policy less than expected. >> do you think there's more credibility being put in place now with the new government and is that going to make a difference to pushing through some of the reforms needed and is it going to make a difference in the long-term viability that we've needed?
>> not as tremendously. improving economic stability is incredibly important. credibility of markets is very important. it's not just the new government, it's the central bank is incredibly respected. he has done a great job so far. both physically and monetary credibility is improving in india's case. >> at the same time, now, there is this nice headwind being driven towards emerging markets, coming not just from the drop in oil prices. >> modi has been very fortunate on that. we see the dollar strengthen,
gold prices will come down and to an extent on head winds, extended tailwinds are tremendous for india. security has been a big issue in looking at new delhi and other countries. have you factored that in at all in terms of less being going to visit because of these security concerns? >> that is an issue, not just in india, but across emerging markets. but what is more critical for india apart from improving security is to incentivize investors to ease regulations, losing red tape, improving labor market flexibilities. smaller steps have been taken on that end, but not really big
bank reforms. securitiry mains an issue, but there are other big issues, as well. >> that's one of the big issues i think when looking at india, corruption and solving securities especially when it comes to women. >> a lot to be done not only in india, but elsewhere on that issue, as well. >> thank you for your time. >> as we await those numbers, let's head over to mumbai. >> help us understand what to expect this quarter. >> hi. well, it is definitely going to be a slowdown for the gdp. it is estimated to come down to 5.1% as opposed to that 5.7% end quarter high that it clocked in q1. now, one of the key reasons for that will be a slowdown in industries as opposed to expectations and the growth of percent that we saw in the
previous quarter. industries as a whole is expected to slow down to a growth of around 1.5% this time around. besides that, we have been had what has been a lackluster monsoon. so that is expected to possibly slow down to growth for agricultural to around 1.722%. what is left is the services industry. services are expected to hold up, so it could grow anywhere between around 6.7% to 6.8% so overall, yes, it's a slowdown for gdp, but it comes at a time where brent crude prices are trading at an all-time low.
so most of the street and even the markets for that matter are not looking at the gdp that closely as they were earlier simply because we are eventually going to benefit from crude prices. >> lower oil price webs when will that trickle down to the consumer specifically in india? >> we're already feeling it in the u.s., right? tim to come, the deal on as tra zen what would have failed. find us on twitter. we're taking your questions and your comments throughout the show. see you in a second.
pressure on the ecb to act. >> the u.s. consumer hitting the stores after black friday deals after millions hit the mall and shopped online on thanksgiving. astrazeneca tells cnbc takeover prices would have failed due to u.s. tax rules and that any deal would have been constructive. >> if we had agreed to a deal at the time, just like if deal, it would have had normal disruption and destruction in our company. reacting to that announcement from oh pekt, no cut in product right now. >> a little bit of profit taking
today. the big story has been oil. brent crude right now trading at a full-year low after opec decided not to cut production. brent crude is trading at $71 a barrel. oil forecasts for 2015 will be cut. interesting to see if we will see a cut to production later on. >> and a lot of the forecasts will be coming down. a lot of the economy is basing their budget on like $100 a barrel oil, right? that is not happening so a lot of that is going to take place. and we might continue to see downgrades, as well. showing you some of the commodity currencies, we're seeing the russian rouble continue its weakening trend against the greenback in today's session. euro/dollar, 1.2535 or so.
the decision this weekend on voting for the referendum o whether or not they need to boost their reserves of gold. that could have an impact, as well, on the swits in the trade. health care continues to dominate investors minds with a bid for astrazeneca would probably have failed according to the ceo of the british pharma giant. in an exclusive interview, he said any deal would have created, quote, enormous disruption. if he feld the company -- >> i don't know what people are going to do and i really can't credit what is going to happen. the only thing i can say, really, is that this level of attention that the situation creates helped us in a way highlights the strength of our
pipeline and the progress we are making because, of course, everybody was key to understand why we believe the company's available war more than offered and we've had to explain. of course, some of our targets some people may disagree with or challenge, but i don't think everybody can challenge the fact that our pipeline has made enormous progress. so that level of attention has helped us make the case. >> so what are you going to do? how are you going to defend this company? >> i think, you know, the -- will take the same as before and
we are very aware of our fiduciary responsibilities. and certainly we consider this before, where is the price? does it affect the value of the company and what is the proposal to execute on the -- on an acquisition base? you know, what is the level, it was highlighted that we are worried about the tax inversion risk. in fact, it has become a reality. and quite frankly, you know, if we had agreed to a deal at the time, probably that deal would have fallen apart by now just like the abishire deal and it would have created enormous disruption and destruction in our company. >> that was great timing to get the astrazeneca ceo on the back of that deal.
is there the likelihood of another deal coming to fruition from your point of view? >> well, i think in terms of the the pfizer deal and the possibility has very much receded, we've got a lot of an listeds kind of looking at a 25% probability that they'll come back with even a few months ago before this tax inversion announcement. and, you know, pfizer have the track record of being really, really aggressive with acquisitions and, of course, they did have quite a lot of cash to spend and wanted to bring it back. at this stage, they have brought in some of that kind of new drug that we've been discussing and through a deal with merck and in recent weeks so that is with that pipeline astrazeneca makes not quite the same attraction.
>> a deal didn't happen, right? the other thought is it might have been good to boost that pipeline which is important for astrazeneca. >> in the previous career, he spoke elsewhere in the interview, but high m&a can be a good thing. but he seemed quite relieved that the pfizer deal hadn't gone through. from the astrazeneca perspective, they were very concerned that it was motivated for tax reasons and the actual fundamental things like actually producing medicines to benefit patients and to make money for the company and its shareholders might have fallen by the wayside. >> i was speaking with somebody who owns a big company recently and he was saying his rule of thumb is if he's taking over another company, he has to -- about 70% or more.
otherwise, it can pay off because if it's 50/50, you run into clashes especially with culture, the culture of one company versus the culture of another. it can be messessy. >> catherine, thank you very much for coming in to talk to us and a great interview this morning. thank you. now let's read more from that interview in the meantime. head to cnbc.com to find background and analysis on pharma and m&a. >> the data came out of japan today. japan's consumer price data for october showing that people are still keeping their wallets in their pockets. we have the story live from tokyo. zadani. >> thank you, seema. japan's inflation slowed for the third straight month. the core consumer price index, which cloous excludes prices for fresh foods rose. the growth shrinks to 0.9%.
not that this number is surprising, though. a few months ago, the bank of japan governor denied the cpi falling below 1%. but he changed his tune last month calling a slide possible given plunging oil produces. that possibility was what spurred his decision to introduce further monetary easing. still today's cpi data has made economists even more skeptical that the boj will improve its target by tend of 2015. household spending fell 4% on the year, indicating that people continued to tighten their purse strings. but things are less gloomy on the corporate side. industrial production rose 2.3% in the month and is expected to increase in november and december, too. the deflationary mind-set is gradually being seen in business, but a change may be still far off for households. back to you, seema. >> we're going to continue to keep a focal point on japan, its economic data and whether or not abe nomics will start to work for the economy.
now, in other news, getting some headlines on malaysia airlines. its earnings are out. it's posting a q3 net loss of 576.1 million malaysian ringett versus a net loss of 375.4 million ringgit a year ago. it has been a tough year for the airlines, right now post ago net loss in the third quarter. >> maybe now with the low oil price -- >> they should be benefiting from that, that's true. >> derrick halpenny, joining us. good morning. >> good morning. >> let's talk about some of the commodity currencies and the moves that we saw following that massive drop in the price of oil. is the weakness going to persist for the canadian dollar? >> yeah, i think obviously there is that link there. in terms of canadian dollar, there has been some evidence of late that of a degree of divergence in terms of the correlation between crude oil prices and the canadian dollar.
we've had some better economic data. the market is beginning to contemplate they may have to raise rates sooner than expected. inflation came in higher during this month. so the canadian dollar, i would put a -- one of the best commodity based currencies from here. at the bottom of the list is the russian rouble. and the projection from the economy that the russian government has put out is flat growth next year based on crude oil prices of $95 a barrel. so where we are today is completely off. >> is there trade in there with a commodity currency where on one hand you have oil pulling down and then on the other hand you might see bounces in the short to medium term during to central bank policy. if you're trading currencies out there, you might be able to get in and make some money in the short-term. >> it's all about whether or not we can see some stability coming into the crude oil market. if the top of price declines
that we've seen over the last 24 hours, i think they'll all suffer pretty badly. but again, just on a relative play, i would pick the canadian dollar. if you happen to look for a reversal in crude oil prices, to cover yourself in terms of the risks to the downside, the canadian dollar is probably the one i would go fo for. if we do see crude oil rebou rebounding, the canadian dollar would outperform the most. >> what about the aussie dollar? when we got the surprise rate from china, we did see that sent in from the u.s. dollar. now analyst representing further rate cuts from china which you could potentially see a rebound in iron ore and other commodity demand from china. is that one reason to get bullish on the aussie/dollar if that is the expectation? >> i certainly think the trade story in regard to the correction of the australian dollar is near completion. a couple of years ago, we had the australian dollar as the
most overvalued currency in the g-10 state. it's been a substantial correction. we're now into fair value territory. we have the australian dollar weakening next year, but that's more on fed policy and the dollar more broadly. specifically on the australian dollar, our deal in china is a little bit more upbeat on the market in consensus. i think the australian dollar lower on the terms of trade is probably complete. >> do you think sluggish growth from china, that's the new normal? and sluggish growth, let's put that into perspective. that's still 7% gdp for china. >> yes. there's a clear trend. as they go towards the readjustment of the balance of the economy, it's inevitable you'll see a gradual deflation in growth. but as long as it's gradual, i don't think that's particularly negative for the global outlook in 2015.
>> in they do vote yes on sunday, will the swit national bank be able to defend the level? >> if the vote was yes, i think for sure, initially, they will keep the floor in place. based on that, i think they defend the floor next week in the aftermath. however, over the medium to long-term, it becomes extremely difficult for them to expand their balance sheets when at the same time they have to hold up to 20% of total assets. so i think over the medium to long-term, it becomes more difficult. i think what they were trying to do was beat the speculators and hold the floor for as long as possible. >> you never know.
in these referendums, you never mow. >> we'll see. we'll talk next week. >> yeah. still to come on this show, the issue of cyber security was thrust back into the spotlight yesterday after a global attack on many sites, including our very own cnbc.com. after the break, we analyze the risk for retailers on black friday. that's next.
hello, everybody. welcome back to "worldwide exchange." did you have a good thanksgiving? >> it was wonderful. got together with some americans. we made turkey, apple pie, peach cobbler. >> you said we made. did you make? >> i'm not so much a master chef, it's a siou chef. i chopped. >> u.s. consumers rushed some stores. consumers will be back at it
today when stores roll out more deals for black friday. walmart says millions of customers shopped on thursday. it had its second best online sales day ever. tablets, tvs, video games were hot. as were the disney frozen snow globe elsa doll. >> have you seen "frozen"? >> no. >> then you would understand that's the main character of "frozen." the iconic song, "let it go." >> now i understand why i missed that one. ibm's digital analytics, they said online sales rose between 12% midnight and 9:00 p.m. eastern thursday with mobile devices making up 48% of web traffic and 30% of sales. coming up later today, a first on cnbc interview with macy's ceo terry lundgren. it's a swedish name, lundgren. everybody knows that. target's ceo brian cornells is
on squawk on the treat at 9:45 a.m. he's probably american but i gave it a swedish twist. >> i'm sure he appreciates it. now, the group of hackers known as the syrian electronic army, a group on thursday, it displayed a message that said, you've been hacked by the sea. nadal, microsoft, the guardian, telegraph and cnbc.com were targeted. joining us now is e.j. hillbert to help us understand the risk with cyber security, especially now as many people will be missing out on the traditional shopping experience in the u.s. and shopping at the convenience of their home online. what is the biggest risk that is posed this season? >> few people pay attention to this. in fact, yesterday was the first day of the holiday scam season, as well.
so the bad guys know that everybody is going to be shopping online, that they're going to do this, and this is when they up their game on the attacks and the attempts to steal money and confuse consumers into who they're going to. the attack from the syrian electronic army yet was more of a propaganda attack to showcase that they could attack groups and the attempt to undermine confidence in those groups. but they're not really targeted towards money. retailers, the financially motivated hackers that you're finding a great deal more of nowadays, this is their time and you'll see a dramatic uptick in this. >> what do consumers do who want to shop online? what do they make sure they can do to make sure their data isn't breached? >> fist, go to the real site. type it in. rather than clicking on some link in some e-mails you received or something that you saw on twitter or facebook or something of that nature. those links, you don't know where they're really going and
that's the key. the second thing is, if you get to one of these sites and something pops up and it doesn't look right and it says you need to download this in order to do -- don't. it's that simple. if we see a button says says click okay, we click okay. but even my 8-year-old daughter knows not to do that nowadays and the rest of us need to learn that, too. >> was the best password? a couple good tips for me now and again. >> so everybody understands, about 85% to 90% of people use the same password on everything. okay? so if i guess your password on one thing, i can guess it for all of it. 17,000 people had is case arsenal 1. >> what? >> yeah. the soccer team here in the uk. the best password is not something that's going to be associated directly with you. the best situation is a pass phrase. take a series of words or something that you like and put
it altogether as one big thing. we all know that the normal password is eight characters, one upper case, one lower case .some special character. that's a pattern. it's very easy for me to crack those patterns. my son is a big chelsea football fan. you have the number sign in there, the number one in there, capital c. >> i wonder if wilfred's password is arsenal one. he's a huge arsenal fan. i'm sorry if you're watching, wilfred. >> you said it's going to get -- we're going to see a lot more hacking and there's going to be a lot more of that. why necessarily? at the same time as you've got people trying to hack stuff, you also have a lot of people working on, you know, fire walls and taking 10,000 hits a minute and things like that. are the systems getting better? >> well, you see, that's the difference. because these big walls have been built in, kwov to use the system any more. i trick you into clicking on
something. your credit card right in and out online sells for about 6 cents. to be honest with you. but your personal e-mail account and all of your contacts sells for about $30. because if i send an e-mail out as you, everybody is going to click on it because it came from you. and they're going to trust you. or they're going to install malware or they're going to go where you tell them to go. so it's not so much about systems as against people and tricking you into doing something. >> thank you very much. happy holidays. >> happy holidays. >> have a good weekend. >> thank you. >> managing director. now, uber has been forced to temporarily halt ragzs in nevada after a judge issued a preliminary injunction banning the popular ride sharing app. uber launched in las vegas and reno a little more than a month ago. state regulators have made several attempts to shut down
the service, arguing it doesn't have the right permits to use the service. >> i like how you say uber. >> uber. >> it's great. okay. another big story, of course, is oil. that's dominating price market action. the price of action hitting $68 while brent on course towards its biggest monthly drop since 2008 after opec decided not to cut production after yesterday's closely watched meeting. that's why we've been asking you and we want to hear from you, where do you see the price of crude headed? we have been getting your tweets and e-mails in. oil dropping quickly to $60 a barrel and then, whoa, $30 before it rebounds. quite the bearish call. if you want to join in on the conversation, tweet us. >>@louisa bojesen is my twitter handle. >> and yours is?
@cnbcwex or @seemacnbc. >> i'm just hearing through my ear that cameron is speaking, david cameron, the prime minister, and he's speaking on migration. immigration. i said migration, but immigration issues. he's giving a key note speech on european union migrants welfare rights. so that is taking place right now in london. and we just wanted to make you aware that that is taking place. it's a hot issue for politicians. >> in the u.s. and in the uk. >> yeah. >> still to come on this show, we'll keep you up to date on what cameron has to say. crude stocks sliding. we drill down into the sector, that's next.
hope you had a great thanksgiving. thanks for wake up with us here on was want pim i'm seema mody. >> good morning, everybody. i'm louisa bojesen. >> it's all about oil. how low can it go? the price continues to tumble after opec rejects calls to cut production. move prompting a sell-off in global oil stocks. heightening fears of deflation in europe, a key reading on prices due to hit the tape now is expected to add further pressure on the ecb to act. >> who needs sleep when there are big holiday bargain toes be
had? u.s. consumers hit the stores in search of black friday deals after millions hit the mall and stop online on thanksgiving. and astrazeneca's ceo telling cnbc exclusively that pfizer's takeover attempts would have probably failed due to tax rules and any deal would have been destructive. >> if we had agreed to a deal at the time, the deal would have fallen apart, just like the abvishire deal. and it would have created enormous disruption and destruction in our company. display you're watching "worldwide exchange," bringing you business news from around the globe. >> hi, everybody. welcome. you're still watching "worldwide exchange." we're looking at the november flash cpi for the eurozone plus 037%. what that means is that it's
slightly better than anticipated as in it's hanging on to the level that we saw last time around. it follows a reading of plus 0.3%. so we're flat month on month. we were anticipating to see a little bit of a drop of 0.2%. that hasn't happened. my guess is whether we're 0.2% or 0.3%, there's still pressure on the ecb to act more. >> yeah. >> we're in an inflationary environment. >> clearly, yeah, not the best read of inflation here in europe. but there's nor data. eu unemployment coming in at 11.5% for the month of october. we did get italy's unemployment data earlier today. and it did come in higher than expected. so markets were reacting negatively to that. and we are get something other headlines. at the u says we may decide in march to demand cuts in italy, belgium, their budgets are at risk of missing targets. >> yeah. just hearing, as well, we've got the greek gdp out of the wires.
greek seasonally adjusted third quarter gdp, 0.7% quarter on quarter. that's, again, staying in line with the flash ups. the same level as the flash estimates of 0.7%. i'm looking at third quarter revised gdp on the year. 1.9%. yeah, again, coming in, staying in line with the flash estimates out there. let's check in on the euro/dollar and see where we're trading at the moment following this state on the wires. you've got slight selling in the euro against the greenback. again, hanging on to that level of 1.23/1.24 which is where we've been sitting for a while now. seema, what is taking place on the broader markets? >> a short week for the u.s. how are they going to trade today? it is a trading day with that.
we had japan unemployment, inflation data disappointing the streets, india gdp on the second actually. s&p 500 trading down about 4 points. a lot of data for investors do digest. let's take a look at the ftse cnbc global 300 index. it is trading lower down just about 15 points or 0.2%. the focus really on india gdp. this is six months now that prime minister modi has been at the helm of india. what type of growth will india be able to witness after the economic reforms that modi has been able to put in place? it might be too early to see the fruits of his labor, but that is something that analysts will be watching out for. back to focus here in europe, right now, markets in europe are trading lower. we got that cpi data. it did come in line with expectations, but, again, still not a great read on inflation.
>> xetra dax do you know 53 points. the cac 40 down 20 and italy, after that disappointing data kams came out, we're seeing markets trade down about 160 points. a lot of pressure on matteo ren renzi. can he bring the reforms that he's been promising? >> i love how we're seeing quite a bit of selling. >> the gdp number. >> exactly. in line with the flash estimates, right? so looking at what we're seeing in the bond markets, though, we've had this massive pressure on yields. we saw that in yesterday aels session. continuing today's session, as well, with buying across the board except for germany. in the last half an hour or so, we saw it in the switch there. back again, buying germany, as
well. that is very much a trend that has been intact here over the last couple of sessions, especially it has to be said it's been going on for quite some time now. these record low yields have been pushing here over the last couple of months, really. looking at the currency markets and the cross straights, we were just showing you the euro/dollar. almost 1.2450. the dollar/yen, slightly higher. you've got the aussie/dollar again against the greenback. we had earlier comments this week from the central bank there about how the aussie/dollar was looking slightly overvalued. keen an eye on the ftse over the weekend. they'll be deciding whether or not to force the central bank to up its holdings of gold, and that could have an impact on whether or not the central bank is able to hold on to its 1.20 floor step in the ftse against the euro. so seema, a lot going on. >> absolutely. and oil prices continue to dominate market action.
we should point out, brent crude oil moving into positive territory after some data on crude oil for january deliver, up 0.4%. right now, trading at $72.80 right now on brent crude. keep in mind, it's still down about 30% since june 2014. you find nymex hitting $68 a barrel. that's the biggest monthly drop since 2008. bg group, gout energy, all down this morning by nomura. federa was cut to a hold by deutsche bank. you have seen some significant swaps in these companies. take a look at this. share prices off in the region of, what, three, four, seven, 8.5%. a lot of pressure taking place in the oil stocks. on the upside, though, a very
different story out there. european airlines, they are loving it. they reap the benefits, too, of the cheap oil price. >> the ruble has hit a fresh low amid its rally in the u.s. dollar. other commodity linked currencies have come under pressure on the back of that decision from opec yesterday. now, receive spoke to the oil minister of nigeria and asked her what she planned for her tenure. >> i think for me it's a great privilege being a woman and being the first woman to hold this position. of course, we are hoping over the next year we will see more stability in terms of the markets coming in. >> tell me how the decision went. we don't have a meeting in the
spring. there must have been a push for the meeting. >> given the circumstances, there was some call for that. but we have at this point in time the rollover should be sufficient to ensure the decline in prices is kept to a minimum or erased altogether. we would hope it doesn't come to an extraordinary meeting. but, of course, if and when that's necessary, we are always ready to call one in. >> the market is going to test opec and the producers. do you think $70 is a challenge for opec? >> for all countries, not just opec. we are an oil producing company, so we would hope it wouldn't get to that point. >> do you expect now nonopec to share the burden? it's something we talked about beforehand, but they have to share the burden. the uae minister says to me, opec didn't cause this ov oversupply. >> no, it didn't. we are all in this together.
it's not why he just opec. opec will not necessarily change the picture if nonopec countries don't share the burden. >> let's get market reaction. john stevens, thank you for joining us the day after thanksgiving. oil prices in focus. were you surprised that opec did not cut oil production given that many of these countries, their revenue is so dependent on oil? >> i think b what we're seeing coming out of opec is saudi arabia signaling they are no longer willing to be the world's central bank with oil. the saudis are hold to toe the line. >> as you were just pointing out, a lack of interest from their oil minister in cutting prices. at what point do you think we
could see some type of interest from saudi arabia in cutting production? >> actually, i don't think you're going to see much interest in saudi arabia for a couple of years. i think this could go on for a long time. and i think their intention is to drive out the exploration program, really, in the u.s. if you look at what's happened, the basic numbers are this. world demand for oil has grown by 800,000 barrels a day. shale is growing by 1.2 million barrels this year. so what that means is that there's 50% more supply in the u.s. alone than coming out of the rest of the world. and that's the production level they want to try and target. get that down to zero growth. and that means oil prices in the high 50s, low 60s for a couple years. and the saudis can do it and they are intent on doing that. >> yeah. john, hi. it's louisa. add into the mechanics, as well, that the u.s. can't export oil.
>> that the. what they're trying to do is see a surge in growth in saudi, growth in nigeria, angola, all those compete in the same type of light sweet grade that saudi is trying to produce. if the u.s. continues to grow at this rate, saudi would have to cut their own production by 40% over the next two years and this scares them. they saw what's happening with iran, with the sanctions, and iran is sli will irrelevant right now in the world oil market and that's something that the saudis are not willing to do. with 77% of the spare capacity in opec and 75 years of reserve life, they are telling the market by putting on another 150,000 barrels a day in the last week or so, that they intend to hold the line and drive other producers out of the market. >> so what's your guess? what happens to the price of oil? >> it continues to drop lower. i think you'll see wti hit 58. brent hit roughly 62. it will stay there for a few
months. i think longer term, two years out, you'll settle at 80 to 85. keep in mind that most shale production in the u.s. is uneconomic below $65. so what they're going to see is them try to drive it down to that level and it will stay there long enough, it will have to stay there at least a year. that's how long the investment cycle is for most of these producers. the fact is that opec can act unilaterally because saudi is the anchor, it's the world's central bank for oil. and places like america, they're all independent producers. they act independently based on price signals. they're going to have to see that price signal stay low and stay low for long before they curtail production. >> john, interesting commentary. thank you very much, john stephenson, president and ce of at stephenson company capital management. >> where do you see the price of crude headed from here? we've been getting your tweets over the last hour. nadara tweeting in, i think oil
will quickly drop to see 65. then as margin calls hit down to $53 before at least a 10% bounce. so louisa, we've been getting many tweets this morning, people see the price of oil dropping even further from here. >> i haven't seen a single person writing in saying oh, i think oil will go back up. >> maybe it's part of this kind of -- it doesn't have to stay at 50 or 60 or 70, right? there's a new normal taking place, a bit of rejigging. also an attempt to let the market reprice itself to get the demand balance right, too. but at the same time, the market mechanisms are sorting stuff out, as well. >> it's good for the consumer. it's driven gas prices down in the u.s. that potentially means more money in consumers' wallets. that doesn't mean that they'll spend more of this holiday shopping season. that's what the retailers hope, at least. >> we would love to hear from
you, as usual. email@example.com. @wnz correction or our twitter handles are on the screen. how important is it to you, this massive drop in oil and does it change the way you trade or invest at the moment? let us know. let's move back and take a look at some of the other top stories making the rounds today. winter weather didn't keep u.s. shoppers from hitting the stores in search of bargains on thanksgiving yesterday. a number of retailers are calling that thursday gray thursday. consumers will be back at it today. stores roll out more deals for black friday. walmart is saying millions of customers, they stopped thursday and they had their second best online sales day ever. tablets, tvs, video games, they were hot. as well as disney's frozen snow globe elsa doll. if you have to see the movie. it's actually great. >> i do. i haven't been to the movies for
quite a while. >> now that we have netflix, there's less of a need to the to the theater. >> but i still love the movie experience. the imax and all that. >> popcorn, the whole nine yards. moving on, ibm digital analya analyt analytics, mobile devices making up 48% of web traffic and 30% of sales. the average order, $128. down by 1.5% from last year. coming up later today, a first on cnbc interview with macy's ceo terry lundgren at 7:00 a.m. eastern. brian kuna is on "squawk on the street" at 9:45 eastern. big day for derail, but it's a big day for brazil. hoping for an economic turn around on a new finance minister. but are investors convinced? we're going to discuss that next.
customers -- u.s. politicians and trade groups are dismayed over breaking up. ♪ >> there you go. >> my goodness. welcome back. braz brazil's new finance minister said he's laid out plans for the economy in a speech last night. briefly rallying prior to the press conference. sending the session lower as investors focus on the outlook for the country next year. in his speech, the government would be honest and reduce the debt. the global head of ee memorying marke
markets. >> what do you make of this? >> otherwise, i'm afraid the other american countries, he has made some bold promises, but i'm afraid his work is going to be difficult. it's going to be much less fun than the introductory music suggested. you're going to have a situation where you're going to increase your primary surplus by 2% to 3%. tease going to be difficult. he's going to have to cut government spending, which was entirely against what duma has stood for in her first term. >> the finance minutester said there was no need for that.
>> target number one is to avoid a ratings downgrade. they might hold off for a little while. i think it's going to be a decent month before we hear details of how he intends to bring up the primary surplus. are they going to do something with welfare spending or pensions? those are two key areas. we'll find out in a month's time. it is a necessary condition for brazil to get these targets going. >> it was interesting. on one hand, you have, you know, the goals laid out. and then on the other hand, there's a real cautiousness surrounding next year, for example. and it does seem people are more focused on the cautious tone coming here on 2015. >> it's not clear because the market has rallied.
in fact, the -- still has rallied. so the market does think of this as an appointment which is credible. so i'm not sure that everybody is completely depressed in brazil. i think the markets have done quite well. moving into next year, you're absolutely right, growth is not going to be strong. while it's okay to be a fiscal hawk as maybe the commodity prices are rising, in the next couple of years, commodity prices come under pressure, you spoke about oil, iron ore are and copper are doing similar things. it's going to be much more difficult for brazil to reform. the rate has not improved despite a big bull market in commodities. now, the next five or six years, they're going to have a tough time. >> thank you very much for being with us, global head of emerging market cross strategy at ubs. we need the music to go out, as well.
astrazeneca has helped the company show offs strength. speaking exclusively to our own catherine boyle after he added that any deal with the u.s. giant would have probably failed, anyway. >> we were worried about the tax inversion rate. in fact, it has become a reality. and quite frankly, if we had agreed to a deal at the time, probably that deal would have fallen apart by now just like the abvie-shire deal. and it would have created enormous disruption and destruction of the company. >> what else did he tell you about where they're headed? >> some very, very ambitious revenue targets, seema, the one which alistair was most concerned about at the moment is whether they can match 2013 revenues by 2017 despite the expiration of patents.
>> he admitted they're ambitious. >> move your microphone just a tad. there we go. okay. but it's interesting in terms of the direction of the company and where it's going. . >> absolutely. he said if you could take one positive aspect from oil, the destruction it cause, on that pipeline, particularly with oncology which is an entirely new way of treating cancer. some of those treatments should be coming on to the market in the next few years. those will turn into top sellers of the company, too. >> thank you very much. it's an interesting interview always when you think there's going to be a deal and there isn't. still to come here on the show, shopping, shopping and more shopping. u.s. retailers, consumers spend
on thanksgiving. it will be wash, rinse and repeat today on black friday. we'll be live at the malls. don't forget some of the latest numbers from thursday's online sales figures from ibm digital analytics. that's coming up next. and markets were closed yesterday because of thanksgiving, but take a look at how markets are due to open today's dow jones industrial indicating a lower open by around 40 points, the s&p 500 down about 4 points in premarket trade. the nasdaq showing a bit of green, up about 4 points in free market trade.
5:30 a.m. in new york. thank you for joining us. >> hi, everybody. i'm louisa bojesen. >> i'm seem where a mody. >> oil is the big story. how low can it go? that's the big question. the price of crude continues to tumble. prompting both u.s. futures and oil stocks to trade lower. >> inflation dipping again in the eurozone. height.ing expectations that the ecb will have to act to ward off inflation. >> u.s. consumers hit the stores in search of black friday deals after millions hit the malls and shopped online on thanksgiving. >> and european lawmakers voted
to break up google to the dismay of politicians and others stateside. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. all right, well, we've had a big impact from the price of oil, right? nymex lower by some 6.5%. brent settling right now to right around 72% or so. remember we had the thanksgiving holiday taking place yesterday. so light trade. that's emphasized these moves, as well. opec deciding mott to cut production at yesterday's closely watched meeting. so we've seen a huge impact here. seema, a lot of impact also for example norway, we've seen major oil there writing and talking
about how it's down by 10% now. >> some big move in response to the price in oil. that's been a sharp fall for a number of european majors. you can look at these, they were all downgraded this morning by nomura. statoil was cut from a hold to buy. there are some winners here, some of the airlines are reaping the benefits of cheaper oil prices. we've seen earnings from some of these airlines come in better than expected because of the drop in the price of oil. >> how low can the price of crude go? >> the big oil producing companies, moving forward. but it's a net for growth, a net for bond markets taking yields lower with inflation.
and for most, you know, again, away from oil producers and those fears is a positive trend and risk appetite for equities. >> the existing dividend is pretty safe. the but the question about hiking ditch depends i think is the key one. i think it's unlikely we're going to see significant increases in the dividends in the sector so long as oil prices are low. >> i would pick the canadian dollar if he wants to look for a reversal in crude oil prices to cover your risk to the down side. the canadian dollar is probably the one i would go for. if we do see crude rebounding, the canadian dollar is the currency that will outperform the most. >> oil prices trading at a four-year low. but take a look at u.s. futures. they're trading lower ahead of
the wall street open. markets were closed on thursday for thanksgiving. today is a shortened trading day. the s&p 500 indicating a lower open by 5 points. dow jones industrial down about 43 points. nasdaq bucking the downward trend up about 4 points in premarket trade. >> here in europe, we were called slightly to the downside this morning. we're hanging on, a little bit of selling taeg place right now. the bond markets, but ohm for half a day. firstname.lastname@example.org. @cnbcwex. italy is down by 0.7% at the moment. it's pretty significant stuff. i just wonder when it's a buying opportunity, as well. when do 350e78 decipeople decid.
>> the shopping bonanza known as black friday is here. u.s. consumers hitting the sites in terms of shopping deals. some retailers are now calling gray thursday. are we going to get orange tuesday? >> courtney reagan joins us from dayton, ohio. getting your own christmas shopping in, courtney? >> oh, i wish, louisa. there is not going to be much time to shop around today. it is for the super bowl of retail for us here today. right now, a little bit of a lull at the mall. this mall, like many stores, started opening up yesterday at 6:00 p.m., have been open through the night. so we say a rush of shoppers last night for thanksgiving. now we're seeing a lull as everyone goes back home and recharg recharges, but only after millions hit the stores yesterday at the local walmart
that i visited here, it was much busier than what i saw last year with lines wrapping throughout the store. carts were full of tvs and household appliances. i lost count when we tried to count the number of carts in line because they were so hard to follow. 22 million shoppers visited their stores yesterday on thanksgiving. their online sales, second highest level ever, second only to cyber monday last year. when it comes to categories, they're saying the top five tablets, tvs, sheets, children's apparel, video games. not quite as busy as walmart. shoppers in line at target with smaller carts. they seem to be a little bit more casually shopping at target as opposed to walmart where it seemed like they were targeted in their purchases. as we take a look at interesting data from shopular, it's a
shopping app that tracks shoppers at 40,000 different retailers. they're saying the average time shoppers are spending, the highest at macy's. more than 73 minutes on average. so that is some pretty good time there for black friday. traffic being 100% higher than on an average day. we're only just beginning, the national retail federation expects 96 million shoppers to hit the stores today. back to you both. >> courtney and reagan, thank you so much for getting up with us. we're looking forward your first on cnbc interview with massey's ceo terry lundgren. but that's not it, brian cornell is on "squawk on the street" at 9:45 a.m. eastern. coming up, uber has to hit the brakes in las vegas. the popular ride sharing app is facing a ban in the state of nevada. details on that coming up in minutes. stamps.com is the best.
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this morning. hi, hannah. >> hi. great to see you. now, spreading deals over a wider time frame, that has been a strategy used by many retailers. does that mean that black friday and cyber monday then lose their appeal? >> defer natalie not. based on our realtime analytics and ibm benchmarks, we saw the growing season is indeed up this year. so while the growing and trapping season is longer, we're seeing sales are boosted up. yesterday we saw mobile reach an all-time tipping point. so we're seeing larger sales than ever. we are seeing great increases in shopping this year. >> how do tablets compare to
smartphones, hannah, when looking at consumer usage? >> yeah, so this is a very interesting trend that we saw the past few years. really, what we see buyers do is they browse on their smartphones. so they about it, yesterday you finished your pie, you finished doing the dishes, you grab your mobile phone or your tablet and you curl up on the couch and you do a bit of browsing. maybe you plan for the next day, maybe you check out the deals, see where you're going to go. but really, you're most likely to buy when you're back on that bigger screen. so you're browsing on your mobile phone. later you're going to take out your tablet. easier to put your credit card in to make those buys. so what we see is that buyers browse on the mobile device and buy on the tablet. >> but the larger smartphones, the phablet, if you will, has become quite popular. has that changed retailers'
strategy, being able to target those consumers using a larger smartphone screen? how as a consumer, you can view the product better? >> i would say overall retailers have begun to target this mobile trend. we're seeing so many new updates in mobile, whether it's a mobile appear, a more optimized mobile web page, offering consumers, discounts if they opt into a loyalty program. retailers are taking the time to bridge the digital and the physical. so that's bringing the best of online in store. >> retailers are focusing on how can i provide the best customer journey to my consumers on their mobile phone. that's mixing, online and in store. >> hannah, thank you very much for being with us.
now, more trouble for uber, the popular ride sharing service might be hitting the brakes in a major u.s. market, las vegas. maureen brennen has more on that from cnbc headquarters. >> no uber in vegas, at least not right now, louisa. uber's gamble that it could take on the tax industry and regulators in nevada appears to be coming up short. the app has been forced to temporary regardly halt operations across the state after a judge issued a temporary injunction on wednesday. uber launched in las vegas and reno just a little over a month ago. nevada regulators have been drying to shut down the service ever since. stheer arguing it doesn't have the right permit to transport passengers. uber writes, it's effort nevada is the first state to do this.
over 1,000 jobs have been opened up overnight. the flexibility and innovative offered by uber. >> the company is trying to rally supporters. uber says tens of thousands of people have taken rights in recent weeks own though it doesn't pick up passengers did he airport or on the strip. now at a concert last week, ceo travis talnik compared toss heavy handed tactics with authorities wearing masks and bullet proof vests to police responders in ferguson, missouri. uber operates in 130 cities across the nation reports say ub
ser in talks to raise financing. that could value uber as much as $40 billion. big numbers despite all of these battles taking place in nevada and other areas. louisa and seema, back to you. >> and they're growing so fast, as well. thank you very much for that. courtney, thank you. >> politicians and trade organizations are reportedly s dismayed about calling for the break up of google. although the poll is completely unendporsble, it holds it will prompt eu regulators to tackle the dominant position. >> it's interesting, you know? we talked about it yesterday, right? so if you were off yesterday -- yes. obviously, this story carries no legal weight. that's important to note. this is basically the eu trying
to clamp down on u.s. organizations that are perhaps trying to monopolize the tech landscape. >> yes. it might also be europe saying, look, we have rules and regulations on our side of the pond, as well. we'll talk more about this. let's get to your headline this morning. crude oil prices continuing to tumble after opec rejects cuts in targets. this on wall street after opening a day's trade. and shoppers hitting stores, more than 22 million consumers hitting stores on thanksgiving. we'll see you in a second.
oil right now at $72.90. yesterday, we did get that decision from opec to not cut oil production. steve sedgwick now back in london after speaking to various ministers about whether opec could cut production. >> my major take away, like every kid in the classroom, this is the best prank going and then they go back to the classroom and they said, is it just us in the prank? no one else is doing it? and then they said we're not doing the prank, it's just i you in the back. and then he turns around and says, no, i'm not doing this prank at the moment. every producer wants to cut production. every producer wants $100 a barrel. they think that's a stable price, a ir if a price. but who is going to do it? the russians came to town and said it's not us, i'm afraid.
u.s. shale holders, no, we're going to produce more and more. and there are other producers like the iranians, libya, this is down to you. saudi is turning around saying, no, why should we lose market share? and he said we did not create this oversupply. it's a good thing having more product around. but the fact remains, we didn't start the fire, why should we be the ones to put it out? >> in reality, what the saudis are trying to do is price out the u.s. >> the current investment is going to be there. but you can't do that. it's too simplistic. i can tell you saudi and the
rest of opec didn't appreciate how quickly the likes of nigeria and others would be shut out of that u.s. market. so they underestimated. who is to say what the cost of production is in the u.s.? maybe for moms and pops, it's $75 a barrel. but for the big operations that have great technological advances, it maybe $60 a barrel. but it's the marginal extra barrels on the table. that is the key. the new investment. that's what opec thinks it probably can do. >> we've been talking about oil, but let's take a look at how the u.s. futures are reacting to that drop in the price of oil. the s&p 500 is indicating a couple points lower in premarket trade. the dow jones industry trading down 32 points in premarket. it's the nasdaq bucking the
downward trend just about five points. michael zerick ka joins gurka js now. how would you trade energy stocks now? >> i think energy stock res going to get a cue from energy futures and energy futures clearly explain we're going to see lower prices here. i think the 62 in particular start coming into play. i think the stocks are going to get beat up. effectively with what the market is going look at year-round is is the valuation still too cheap? for those reasons, is it a euro buy now for 2015 or do you get in right now. >> michael, good morning. it's louisa been. >> good morning. >> are there any obvious trades we're overlooking? we've got a new year ahead of us. there could be some closing out of books, things like that.
taking that alongside what's going on in oil, and let's not forget bond markets, as well. >> i think one of them in the commodity space that's being overlooked is not just a referendum or a vote in europe or pending, how the gold in precious metal markets work as a whole, but i think silver gets to be a very auspicious trade and in particular i think any further lower long-term buyers and silver are going to love these prices, historically it's proven to be a very good level. for these reasons, you're noticing even the resurgence of coal here in the u.s. is overlooking the silver play. i like the value of silver here. once again, if we continue to get weakness off the gold trade, i think silver benefits greatly. >> an important one after that opec announcement. michael gurka, thank you for your time. that's it for the show. >> that's it for the week. >> the week is over almost.
good morning. nations retail stores opening their doors earlier than ever before hoping shoppers show up to spend. prices on oil plunging after opec decides not the cut production. and if you're looking for a ride in las vegas, don't wait for uber. the ride sharing service shut down in nevada. it's friday, november 28th, 2014. "squawk box" begins right now.
good morning, everybody. i'm becky quick along with andrew ross sorkin and michelle caruso cabrera. joe is xoining an extended thanksgiving holiday. in the meantime, it is plaque friday. here we go. guys, it is black friday. in fact, take a look at a picture of toys r us in new york's times square in the city that never sleeps. shoppers have been looking for deals for hours now. yeah, there it is. they're walking in the doors right now. we're going to speak with the retailer's ceo in just a few memberships. veteran retail analyst dana telsey. i know you've been out checking the stores. >> i certainly have. >> we're going to get the update with dana in just a few moments. first, though,