tv Worldwide Exchange CNBC December 4, 2012 4:00am-6:00am EST
. in is "worldwide exchange." here are the headlines from around the world. european finance ministers will try to come to an agreement on the eu banking union, but deep revisions remain. house republicans put forward their plan to cut the u.s. deficit, but the proposal is quickly dismissed by democrats and the white house. and australia central bank cuts interest rates to the lowest level since the financial crisis in a bid to get ahead of
sluggish commodities demand. we're on tuesday and off to a slightly, what, soft close yesterday for european stocks. right now we're pretty evenlies passed, advancers just about outpacing decliners on the stoxx 600, but not by much, 5:4 if that. so one hour into the trading session, this is where we stand. the ftse 100 just flat, a flat close yesterday. the dax was essentially fairly flat yesterday. up just ten points. the cac 40 yesterday doing a little bit better, up 0.2%. first pointing out ftse up 9 out of the last 11. we have seen yields continue to decline in spain. just 5.23%, but still capped.
spain requesting financial assistance. we'll keep our eye on the uk as we head toward the bank of england meeting this week p. dollar index has hit a one month low. you're redollar up to euro-dollar up near the high we saw yesterday. dollar-yen moving away from the 7 1/2 month high. rebounding against the dollar and the euro ir, as well. priced in a lot in terms of monetary policy out of japan. and aussie dollar, 1.0463, yes, we have cut the cash rate in australia to match the record low of 3%. but we see the aussie dollar rise because it's pretty much all priced in. sterling-dollar also getting a benefit. back over 1.61. so that's where we stand in
european trade. let's recap the asian trading session for the first time today, when you not the last. >> thank you, ross.not the last. >> thank you, ross. shanghai composite recovered from its four year low as property financials, rebounded. shale gas and geothermal plays also rallied as beijing plans to cut its annual coal consumption target by 2015. the hang seng finished m eed marginally in the green. losses in the services sector capped the up side. in japan, down beat manufacturing data spurred profit taking on exporters, but sharp shares gained on a deal with qualcomm. more on that coming up from tokyo. south korea kospi also lost a quarter of a percent today. heavy weight cost company underperformed as investors fear the possible bid for canadian mine may hurt it balance sheet.
sherry has more details on that later. and in australia, investors shrugged off the rba rate cut which was largely priced in. we'll have more on that, as well. banks, miners and defensive stocks broadly lower. sensex trading higher by 0.2%. back to you. >> catch you a little later. that's the latest from singapore. let's get the view with daniel morris, jpmorgan. daniel, good to see you. what's your view at the moment? i want to put the u.s. data into context on the ism manufacturing because it didn't tally with markets of smaller companies, as well, so what does it mean? >> you kind of picked the one that you want or at least tells the story that you want to tell. they kind of balance each other out, one positive, one negative. so if you look at the other trends for the economy, it's still the same of steady slow appreciation and that there really i don't believe is any effect from the supposed anxiety about the fiscal cliff. i think people know there will
be some type of resolution. we didn't know the details or when. but companies are still investing the way they would normally do and they're not stopping because of -- >> that doesn't make us quake a bit about the jobs report later this will week and what that does for investors' nerves? >> we know it will be worse than it would have been because of super storm sandy. so you didn't know how much it was to do with that and how much was the economy. so it will be a bit of a wash in terms of reading the tea leaves for the u.s. >> so the growth picture for the u.s., we sort of 1%, 2%, depending on what happens with the fiscal cliff. what do you think, 2.5%? >> yeah, i think we should be 2.5% to 3% by the end of next year. >> which might be a slightly better outturn. china seems to be back on track. is there anything in europe -- what's the tail risk at the moment? >> i think there's two things that could still go wrong in europe. one, there's always political risk. in italy, you do have elections
coming up. there's a chance getting a higher share than people anticipate. but even then, the financial forces are going to force any government that comes into power to more or less stick to the plan morsi set out. on the other hand, there's always spain, the worries that with 25% unemployment, that you would see the default rate particularly on residential mortgages shoot up, it's 3% now, which is pretty amazing given the struggles within the economy, but we think it will go up somewhat, but really not any more than people have already priced in. >> and then ten year yields, 5.24%. at the moment, relatively speaking, pretty comfortable. >> maybe a little bit too comfortable and we certainly don't want to get complace complacent.yields are where they were say in march of this year and then subsequently they shot up to 7.5%. we know with the draghi put that that won't happen, but we don't want to think that there is only one way -- >> yesterday said, look, sort of the idea of the risk on phrase,
certainly for -- he was looking at it from credit markets, but would stay on until the middle >> i think lite bit more selective. it won't be just everything goes up now. we have to start thinking about companies and sectors again the way we should do as investors. >> that would be nice. quite nice if we could actually an sliz stuff on its own merits anden vest accordingly. do you think we can get away from the general political driven theme? >> probably never away, but relatively diminished. >> that would be nice. plenty more to come from you. also we head out to sydney. australian central banks cutting rates to match a three year low. that will be in about ten minutes. and u.s. companies race to go beat the fiscal cliff, we'll take a look at the biggest payouts from morning at 10:30 london. in brussels, eurozone finance ministers getting ready to
tackle banking union proposals. we'll have updates throughout the show. and are you going to hit the slopes during the holidays or in the course of the ski season? 11:40, we'll talk, yes, the ski season. one of the things that make winter great for the guest who for the time being is keeping warm in orlando, florida. we will do that. unemployment in spain has continued to rise, by 1.5% in november, pushing the total number to 4.2 million people. french finance minister says he's confident the buy back plan will go well. silvia is still there as they work their way towards banking union proposals. silvia, i don't know where -- i don't know if i want to talk about greece or not, whether i
want to dive straight into the banking union and what chance have we possibly got of getting agreement. >> let's talk about greece, much more fun. no, greece we have to get out of the way. is the debt by back program going to be successful, everyone nds it will. we know that's the one little lynchpin on which everything else rests. so if it's not, the money will not flow, but everybody insists as when he headed into the euro group meeting yesterday that it will be successful. that's also what what we hear from the greeks. there's a bit of arm fwising, but it will probably go through. and then lo and behold ahead of the actual summit in the morning, they can sign up the check for the next greek installment also we hope. we're also closer to a little rescue package for cypress.
spanish aid package for the banks is on track. so that was the working list last night. another thing on the to-do list. the head of the euro group confirmed last night that, no, i will not extend anything now, i will definitely leave as head of the euro group at the end of this year, so there will be another personnel debate. remember they asked him will to stay on for another half year because they couldn't work out who the successor might be or should be. nobody wanted the germans or the french and they couldn't agree on anybody else. >> so how important is his role and therefore who is the right person to replace him? >> i think the role is important to the extend that the head of the euro group has to have two major qualities. a, he has to have another clout
to keep the shall i say flee circus together sometimes, and he alsos have to have enough of a conciliatory nature to balance out between the opposing view. so that's why jean claude was perfect. he's been a finance minister long enough and he's been there from the start. it won't be easy to replace him. especially banking union, banking supervision, there is so much to put on track yet. not only inside the euro group, but with the eu as a whole that somebody that has a bit of umpf would be very much needed. but we haven't found that person yet. >> i was about to launch into banking unions. but i might -- i wanted to go into that whole sarcasm who will
regulate the german savings banks when they fund german business and the rest of the eu would like to do it and germany won't. seems like a bit of a sticking point to me. >> there are lots of sticking points. first of all, who is going to be the supervisor. for the eurozone, it would be the ecb. but if the ecb is the one big gorilla on the block sitting there in all the meetings so to speak for 17 country, then all the others even if they have their own voice will be slightly sidelined because there's one big power and all the others are split up. so there was a discussion should there be a eurozone supervisor, that doesn't quite work. do we need a some rice or who works for everybody he, where should that sit. brussels, also lots of question marks. and obviously then we get to the point where all the deposit
insurances lie. every country has a different scheme. so i think we're a far cry away from having anything like a european banking union. >> i would tend to agree as ever. thank you for now. we'll catch you a little later. how much of this matters? investors say if we move toward a banking union, you can't have any kind of economic without a bank union. how much does that matter? >> for investors today, probably not a whole lot. he's broader long term questions about what the eurozone is going to look like, what is going to be the balance going to be, we have to have vote, treaties, and it's difficult -- >> doesn't matter in the short term 245 ththat they don't let w
up? >> you think if you hold it for five years do you still get something back. >> there are a lot of analysts saying european equities will outperform u.s. equities. when you look at the rapid growth rates, is that just because they're undervalued? what is it? do you agree with it? if not, why not? >> sure. as a region, it's actually not undervalued. it's average right now. there was a discount. there has been times over the last year that's gone. europe has done reasonably well, u.s. is off, so now we're equal on valuation. but that doesn't mean that within sectors there is not very undervalued regions. italy for example is still very clean. so it depends. >> other news we're following, a bomb has exploded in the offices of golden dawn early this morning. police sources have told reuters there was damage caused to the building in an athens suburb, but no casualties. and in the states the white
house and top democrats are dismissing the budget proposal put forward by republicans saying it doesn't address the president's pledge to hike taxes on the wealthy. the plan includes $800 billion in new tax revenues by cutting loopholes and deductions, but leaves the bush era tax cuts in place for everyone. that's half of what the president has proposed. it also cut $1.2 trillion in mandatory and discretionary spending. the republican plan includes $600 billion in entitlement savings and raising the eligibility age for medicare and changing how cost of living increases are calculated for social security. white house officials say the two sides will continue to negotiate ways to avoid the year end fiscal cliff. and president obama is meeting with a group u.s. governors today around 10:00 a.m. eastern. it includes jack markell, mary fallon, scott walker. the governors will discuss how the fiscal cliff will impact their states and possible solutions. it's also expected to meet with house republicans, as well, this
week. and oracle is amongst the latest of speeding up their dividend pay outs to avoid possible tax hikes because of the fiscal cliff. they will pay dividends a total of 18 cents a share for the next three quarters. larry ellison didn't take part in the decision, but he will benefit. he own as 23% stake in the company, so he'll receive around $198 million. yes, you heard it right. oracle stock down 0.8% despite that in frankfurt. still to come, interest rates in australia are moving down. down under. find out what central bank is worried about when we come back.
australia central bank held its rate setting meeting. matthew taylor has the details. >> the market had been pricing in a 25 basis point rate cut and the reserve bank delivered with an early christmas present. central bank lowering the cash rate to 3%, this is the lowest level since the height of the global financial crisis back in 2009. the rba says while it's still waiting to seat impact of its
previous 150 basis points of rate cuts work its way through the economy, the global outlook is still seen to the down side and judge policy easing was appropriate right now. it does point to some signs of strength, though, particularly in china saying growth there appears to have stabilized and says the european economy remains a problem. domestically it says a return to strong consumption in australia is unlikely and that the rate cut is designed to foster growth in the local economy. the attention here in australia is now turning to wednesday's gdp figures with the treasurer wayne swan saying he wouldn't be surprised to see a slight moderation in those growth numbers. that's the latest from sydney. back to you. >> despite that, aussie dollar actually edging higher against the u.s. dollar 1.05. aussie dollar moving higher after a rate cut suggests very
much priced in. where do we go from here? >> that was very much priced in. i think probably what surprised people today was just how neutral the statement was that we got from the rba, in effect how similar it was to the november statement where they held rates unchanged. from here, i think really the focus turns to what's happening globally, particularly negotiations around the u.s. fiscal cliff. now, we think those negotiations will continue and that the deadlock between politics will continue, as well. that and he unlikely to be supportive of risky assets and we think the australian dollar will probably suffer because of that. >> the rba i guess trying to stimulate other sectors of the economy. what hope do they have of doing that? >> they have a high hope.
what they want is a smooth transition, the mining sector of the company starts to wind down and provide less of an impetus to growth, they want to see the household sector play a larger role and the only way really in which they have to do that is to loosen policy and it will pass through to lower mortgage rates for those households. >> are rates going to go lower? some futures are predicting it 2.5%. i've seen some economists talk about a floor of 2%. is that feasible? >> i think it's feasible, but not our view. i think today's statement supports the view we've had for a while now which is once we have this cut which we had today, that rates will probably remain unchanged. at least we see a deterioration in either the global environment or at least we see domestic growth really fall off from here. as the rba made the point and one that we agree with is that
there's still time for these rate cuts which we've had delivered to pass through to the economy itself. we know monetary policy takes between one and two years to have an effect. >> what if on the contrary we get better growth out of china and we see commodity prices go up again and now when we've already had all these rate cuts, is there a risk then to inflation for the country? >> i think there is. that was one thing that the rba pointed to in the november statement, then worried that underlying inflation had ticked up towards the middle of the 2% to 3% target. i think from here, if we do get a scenario like that where the u.s. fiscal issues are resolved, i think the statement the rb after the has given us today probably puts them in a good position to be able to move policy higher if they have to next year in response to higher inflation. >> so what happens to the aussie dollar now?
>> well, as i said, i think that the issue that we have going into year end is the fiscal cliff. we think that it won't be resolved quickly, and we think that it will weigh on financial market confidence. it also will see people's expectations of u.s. growth for the first quarter of next year be revised lower. i think overall that environment is one where the u.s. dollar strengthens and where risky assets don't did well. so we think the australian dollar will fall from here into year end. >> all right. good to see you. thanks for that. shares in singapore olam moved higher. olam is trying to counter the muddy waters report which has accused of firm of improper accounting. while the issue was meant to shore up confidence, short severals told cnbc it signals just the opposite. >> actually, we view this debt offering as a clear victory for
muddy waters. less than a week ago, we came out with a report warning that olam might collapse and we now have what appears to be effectively a stop gap sovereign bailout of the company. >> and south korea posco has won a right to get a stake in the mining operator. but investors weren't thrilled. hi, cheri. >> hi, ross. that's right, posco shares ended the session down, but along with other steel maker s listed on te bourse with slow u.s. manufacturing data overnight, plus the industry has been struggling with falling profits this year with a slowing demand. especially markets like china. and the ideal way to ride out these difficult times and to reduce costs would be to acquire
properties that mine steel making raw materials. and that's exactly what posco is doing according to these reports that say a consortium that it leads has been named preferred bid forea stake in a canadian mine. some reports say it's seeking to acquire around a 10% to 15% stake and is scheduled to sign a sales and purchase agreement early next year. and how will posco finance this acquisition? observers say it's been selling many noncore assets like its holdings in sk telecom to cushion these investment plans like the purchase of the australian steel and iron ore producer aryan which by the way collapsed late october. back to you. >> all right, chery, thanks for that. still to come, we'll speak as to a guest who believes volatility in the oil market will continue well into 2013. we'll find where his predictions are for crude next year. i always wait until the last minute.
house republicans put forward their plan to cut the u.s. deficit and avoid the fiscal cliff, but the proposal is quickly dismissed by democrats and the white house. and australia central bank cuts interest rates to the lowest level since the financial crisis in a bid to get ahead of sluggish commodities demand. financial policy committee has been meeting. the outlook for financial stability has improved. signs of improvement overall. . few signs yet of improvement, though, in corporate credit. more capital would enonly banks to access cheaper funds. that's their latest thoughts.
they see further cuts needed on bankers pay. also looking to see whether we have any construction. the november construction pmi 49.3. slipping to the 50.9 in october. survey data hasn't necessarily matched the hard data either. and this all comes as british chambers of commerce has issued a gloomy prognosis. cutting its uk growth forecasts for next year and 2014 to between 1% and 1.8 saying output will only return -- sorry, to 1% from #.8 saying it will only return to levels at the end of 2014 p. this after retail sales also missed forecast in number. like for like members up 4.4% on an annualized basis. this is according to a retail consortium. the increase in sames is looking for shoppers looking for bargains in the run up to
christmas. >> we're bullish overall, so still optimistic. i think one of the big issues is the materials sector that has a big weight within the ftse # 00. so of course that goes back to china. >> you were suggesting in your question earlier that you were thinking maybe china demand will be okay? is that what you're leaning towards? >> sure. i think even though the numbers that we got in the last quarter for chinese gdp were pretty good, the perception i don't think has spread as widely as it should have. so there's potential for not only better growth, but a better perception of that growth. >> whether that feed into mining stocks? >> in general they've outperformed over the last month or so. you've had a pretty substantial selloff for most of 2012. >> okay. nokia with a bit of news. they're doing a self a head
office in finland, selling price $170 million. there you go. real estate not part of the core business apparently. sale of lease back. right. let's move on. european stocks today 10 out of the last 11 for ex-take tax. was a pretty flat close yesterday. bond market, yields still very contained for spain and italy. 5.2% yields in spain. italian yields slightly lower, 4.39. gilt you see currently just edging slightly higher. and on the currency markets, dollar index at a one month low. ism manufacturing not helping. dollar-yen therefore down to 82 and dollar is done against everything else, as well. apart from the swiss franc. let's show where you we stand with oil prices right now.
we've got nymex trading at 89. present at 110. both of them fairly steady. what about the outlook? joining us is peter hunt at rbc. peter, good morning to you. so does oil stay in this sort of recent ranges for the foreseeable future? >> actually we think it is. it sounds like sort of the risk of complacency. something we challenge ourselves on quite regularly. but given the points about china demand and global gdp, we're still very cautious in terms of demand, but the issue for the oil markets is supply and there are still big movements going on there. i think over the last three months, you've seen a really sharp fall in the output from iran. that's down below 3 million barrels a day for the first type since at least 2000. a lot of those volumes have been physically made by increases in iraq. but while they can make up the volume, they don't make up for the sense of instability.
and i think as long as you have iran producing around a million down from a high of 4 billion only in 2008 and still needs to generate revenues from about one third the amount of volumes, iran is quite highly incentiv e incentivized to highlight the insecurity in the market in order to sustain the oil price. >> daniel thinks maybe we haven't priced in general resources, steadying and maybe a pick up in demand. >> we remain cautious. we think there is a bit of up side supply. if it there's a bit of an increase in our china demand, 0.3 to 0.5 million barrels a day next year.
if we're off to the races, i think it will be quite difficult to react fast enough and that will be a real support for the price. >> peter, to what degree do you think opec is able to manage prices? do they want them to be higher than they are or are they happy with the current levels? >> opec is happy with the current levels. saudi has been quite public over the last several years saying that it sees around 100 for the opec basket, a little bit more than that for brent, as being a fair price. much more than that, it starts to get concerned about impacting demand. lower than that it obviously impacts the revenues for social spending, as well. and i think opec has apparently been able to manage that but i think on its own, opec is unable to maintain that price if there are real pressures on the demand side. so i think the fact that we've had relative stability around 100, 110 dollars brent is a testimony not only for opec's
ability to manage the price, which sink marginal, but a confluence of interests at the moment between both producers and suppliers that this meets somewhere fairly in the middle. >> peter, we've been fairly volatile. a lot of that's down it tto the o geopolitics. and i assume that's the wide card still into 2013. >> iran will be feeling vulnerable. the fact is that over the last few months, it is now producing less than iraq and i think that will increase the feeling of sensitivity on the part of iran. highlighted the threat of instability because it really hasn't got the influence of volume control, so it has to be three more public statements and issues like that. and it tends to put things in the market when there is need
for a proos supporice support. >> all right. thanks for that, peter. swiss government has vetoed a proposed new law to increase transparency at commodity traders on the grounds that legislation would prove too string again. carolyn is in zurich. not often you hear regulators saying new rules would be too stringent, but here we go. so why? >> yeah, you have to ask why would the swiss cabinet rule against this motion whiches for terse more transparency. this is also in part a law which would force trading houses to declare the payments that they make to the resource rich countries. so why would they veto against it? you have to understand, and i'm not trying to justify anything here, the commodity trading business is a huge contributor
to tax revenues here. 20 billion swiss francs is year is what we're talking about. takes very secretive have i. you have big trading houses and they want low taxes and political stability and i'm sure there's a huge lobby really lobbying for this law not to be passed. but really this is at odds with other legislation which is now being pushed forth bri the u.s. and eu in terms of anti-drupgs and anti-bribery. so a big blow to the regulators. >> interesting, karl lycarolyn. thanks for that. daniel, i want to get your view on oil majors. >> as always, it will depend on the path of oil prices and if we don't really honestly expect a
big appreciation, i think for next year the outlook is particularly more advantageous for oim makers than it would for other natural resource stocks. >> according to the chief economist of the cftc, high frequency traders earn an average of more than $5 every time they go up against traditional investors. for more, head to cnbc.com. you can also get in touch with us email@example.com. now sprint nextel as well is reportedly out of the market for metro pcs. reuters says the company won't make a counter offer for its smaller wireless rifle which is merging with t-mobile. in october, sprint announced japan's soft bank would buy up to a 70% stake to the company. now reports just sprint believes going after metro pcs would complicate the regulator review
of the deal. the stock completely flat today. twrads forced to seek emergency capital for investors including getgo. capital stock today in frankfurt down 1.65%. and cargo ships with lining up offshore as the strike moves in to the second week. shippers and striking clerical workers resume contract talks on monday, now the longest disruption at the nation's busiest port since a 10 day lockout by longshoremen in 2002. and this one is taking place after the busy pre-holiday shipping season. major retailers unexpected, but
asking president obama for intervene. and it seems justin bieber may not know his banking history. the teen idol was asked to lead a ping-pong tournament and asked why does he get the room and not us, suggesting the pop star's unaware that jpmorgan actually deceased some time ago, a jpmorgan apologized for the confusion saying bieber is welcome to play ping-pong with us anytime. any way, on to japan. to japan now. qualcomm will be taking a stake in sharp. the story for us from tokyo.
>> the deal will see the two uses sharp technology. sharp will receive $61 million from qualcomm by the end of this year which wou year, but the chip maker will also make additional investment the in the future if the partnership turns out to be successful p. the nikkei reporting the total amount of investment would be around $22 million which would give qualcomm a roughly 5% stake in sharp. sharp likely to post its second consecutive net loss for the year ending in march. it has lost three quarters of its market value this year due to massives losses andfuling market share. since sharp significantly lost it market value, investment talks has bogged down. so the market welcomed the reports of today's deal sending sharp shares up 1% before the formal announcement after the market closed. back to you. >> okay. thank you. still to come on the show, japanese companies have been
ecb says it won't be feasible for the ecb to supervise all banks that have received government assistance by january 7th, 2013, which was the original target. says he doesn't want an appointment of the supervisory board to be decided outside of ecb bodies either. and he's confident the ecb will pass rules that allow the board to meet with supervisors from noneuro states. a long way to go before we get any agreement on that list of things. meanwhile in japan, many companies have been reportedly raising billions by issuing nonyen denominated bonds. the better fit is cheaper costs and m&a overseas. there is an appetite from those who would normally buy european debt. at the same time investors are increasingly worried to japanese exposure to government bonds.
apparently new fears over the default of jgbs on the banking sector. jared, thanks for joining us. in the bank of our mind, is it more than just an exo exten sha fear or not in. >> again, let's not forget that japan is the world's largest creditor, as well. so you have to look at it from both sides. so we can't forget, but it's not acutely around the corner. >> it's interesting, when we saw the move into the states, as well, from softbank, we were thinking here are japanese banks looking a little stronger now. they've had a weak currency.
are they in a globally better footing? >> it's not only softbank. a lot of manufacturers and even service industries are expanding overseas. it they understand that japanese markets domestically is going to saturate or going to basicallydy veers guy more higher value added. so they're expanding to asia. once they make the decision, they're very quick to -- >> and we said in the introduction they're raising money sort of from nontraditional areas. >> i think that's a natural course of the way. this is how it should have been done a lot earlier, but the methodology of financing in japan is not as diversified in the west because it's based on banking governance. banks always had a very strong upper hand on japanese corporate
entities, but of course as you reported, that's gradually changing for the better. >> so what is the japanese equity market going to reflect so? what will investors do? >> i think we're still running towards constructive destruction. however, i think the market will perceive to be a better faith obviously because we're walking away from lost three years of the political scene by dpj. look at the foreign policies. where are we in economic transition. absolutely nowhere. so i think the japanese have learned after three years of lost time that they do need to move things forward. okay ldp not being the best, we all know that however, in saying that, they at least know how to implement the policies. >> what's the policy of any significant change of monetary after the election compared to what tell like to see happen?
>> there will be much stronger imposed. ldp is already verbally putting this on. it's almost a race who can put more pressure to bank of japan in the sense that they can alleviate the market. of course from a westerner's point of view, i'm sure in a dangerous move that they were asserting far too much pressure to central banks. but that's exactly almost like a tool that's been used for many of the parties involved to get elected right now in japan. >> all right. thank you. good to see you. on the asian agenda tomorrow, third quarter growth figures. india, a check on the country's services industry. and on the political front, as well, parliament gets ready to vote on allowing foreign supermarkets to finally set up shop. mean while in the states, the white house and top democrats have dismissed the latest budget proposal put forward by house republicans. they say it doesn't address the
president's pledge to hike taxes on the wealthy. it heaves the bush era tax cuts in place for everyone. it's half of what the president has proposed. it also cut $1.2 trillion monetary and discretionary spending. republican plan includes $600 billion in entitlement savings and raising the eligibility age for head care and changing how cost of living increases are calculated for social security. white house officials suggest the two sides will continue to negotiate ways to avoid the year end fiscal cliff. and president obama's also meeting with a group of u.s. governors at around 10:00 a.m. eastern. the bipartisan group includes delaware governor jack mar account kell, mary fallon, scott walker. they will discuss possible solutions to the fiscal cliff and how it will impact their states. the group also expected to meet with house republicans later this week. and oracle is the latest amongst the group of companies to speed up dividend payments as a means of avoiding possible tax hikes
for investors because of the fiscal cliff discussions. the company will pay difference tends fors next three quarters totaling 18 cents a share. the ceo didn't take part in the decision but will benefit. he owns 23% stake, that means he'll get around $198 million. pretty good. daniel, what is the share buy back dividend play at the moment, how strong an impact wheth will it have? >> long term probably not a whole lot. it highlights even in general if we think we'll avoid the fiscal cliff, people do appreciate that some taxes will have to go up. so we may shovel a bit how returns from equities are paid to shareholder, whether buy backs or dividends. what really matters is the actual growth itself. >> are you counting on more share buy back, companies sitting on a lot of cash? will they pay more of it back to
shareholders and is that going to be supportive? >> it's a bit of a chicken and egg problem. what you find is as long as the market itself is going up, companies tend to buy back their shares. so as long as the stock market goes up, they buy back. but which drives the other is a little unclear. generally since we think the market will continue to appreciate, we should see who are buy backs. >> after the third quarter earning season wasn't terrific, where do we go now with earnings? >> i think the r third quarter looked bad were because the comps from the year before were quite difficult. growth better in 2011. so looked worse this year. but going out into next year, they still pick up. probably high single digit. >> and you think fiscal cliff one way or another whether come up with something that's good enough for now. >> it will have a biggerle impact on market prices as
opposed to the economy, so buy on the dips. >> what does that mean for the last few weeks of -- just look at some of the prices here. the dow up 5%, s&p up a lot more. 12% despite the dip since october and september. for the last few weeks we just meander into it some. >> it's hard to say. i think there is at this point probably more risk on the down side if some of the negotiations were to break apart. i think the deal is priced in, so the rally may be pretty short lived. >> daniel, thanks very much for joining us. a couple story here. if you're looking for the city with the best quality of living in the world, then head to vienna. this according to consulting group mercer just published its quality of life survey. zurich number two. baghdad ranked last over concerns over security and political instability. and it is official, a new royal
highness is on the way. after week of speculation, the duke and duchess have confirmed they are expecting their first child. the duchess thought to be under 12 weeks pregnant is being treated in a central london hospital for severe morning sickness. book makers have been inundated with bets. and more from twitter, as well. last night the pope announced he'll be using a micro blog to he spread his message. the pontiff says he'll defeat in eight languages. the english language version of it is @pontifex.
there you go. will you be following the pope? what is the top news maker? e-mail or tweet us. we'll take a short break. still to come, we'll be back in brussels. finance ministers start debating proposals for a banking union after they also are signing off on debt by back proposals for greece. can i help you? i heard you guys can ship ground for less than the ups store. that's right. i've learned the only way to get a holiday deal is to camp out. you know we've been open all night. is this a trick to get my spot? [ male announcer ] break from the holiday stress. save on ground shat fedex .
here's the headlines from around the world. taking the next step, house republicans put forward their plan to cut the u.s. deficit. but the proposal is quickly dismissed by democrats and the white house. finance ministers try to come to an agreement on the european banking union. and australia's central bank cuts interest rates to match the lowest level since the financial crisis to get ahead of sluggish commodities demand.
today dow caught up about 9 points. down nearly half a percent during the session. nasdaq calmed up nearly four points. s&p also currently called up half a point or so. global 300 during the course 69 session so far today is up two points. pretty flat session for europe yesterday. just about in positive territory. means the ftse has been up nine out of the last 11 sessions. this morning just up 0.2%. cac 40 up three quarters of a perks ibex up half of 1%. italian yields still going lower. spanish yields still pretty lower. spain requesting aid for its banking sector.
and in germ any, yields just a little bit higher. as far as the dollar index is concerned, down at a one month low. euro-dollar up near the high october 22nd. a little bit more than that. dollar-yen meeting away from the high we hit last week. the rba cut rates to match their all time low of 3%. pound stronger against the dollar. dollar down across the board. that's where we stand here. if you've just joined us, now the trading day for us in asia. >> a mixed day of trade for asian bourses. composite bounced off its four
year low as property developers and financials reboumded in the afternoon. shale gas also rallied after beijing plans to cut annual coal consumption target by 2015. the hang seng finished marginally in the green. tell companies gained momentum, but casino stocks tumbled 5% on profit booking. down beat manufacturing data spurred profit booking on exporters. sharp shares gained on reports of a new investment and also joint deal with qualcomm confirmed after the bell. south korea kospi also lost a quarter of a percent today. costco underperformed as investors fear the possible bid for a canadian mine may hurt will its balance sheet. and australia, yark the investors shrugged off the rate cut largely priced in. the aussie dollar rose on a more hawkish statement than expected. defensive stocks broadly lower. sensex finished higher by 0.2%.
back to you. >> thanks for that. have a good evening there in singapore. now here in europe, optimism about greece's plan to buy back bonds has been lifting the euro. officials are confidence the plan will go well following a meeting of finance ministers in brussels last night. the focus today turns to banking union proposals they're confident a compromise can be found. at the same time, ecb policy maker says it is not feasible for the central bank to monitor all the lenders that have received government aid and that the supervisory board should be picked within the ecb. they're talking about basically they have to get these things up and running by january the 2nd. silvia is still in brussels and joins us for more. look, they've got to supervise all banks that receive government assistance by january 2nd. what else are they supposed to
be doing by january 2nd that they might not be doing? >> they've already softened the time horizon because originally everything was supposed to be per end of year, meaning by january 2nd, everything would be away we go. that would be the banking supervisi supervision. none has happened yesterday. speaking in an unprecedented move, i don't know whether that's the new eu as it were, we do have public deliberations of the eu finance ministers and indeed victor was speaking before which means we press peeps can watch it in the press room and can actually listen to what is being debated. schaeuble speaking a little earlier. and so at the moment, the argument is going going back and fro. the big question, two big questions, who will supers vice all the banks.
the ecb is saying it should be lying within the ecb and everyone else may join. ha-ha. that was the original plan. they said the ecb should be the single supervisor. and everyone else who wants to join is up to them. but this is the only super national organization equipped for it. the ecb pretty much insists that might be the case, but there is no agreement on that. and then comes the actual banking union which is far away from us yet. >> shoibl has been speaking as you say. he's talking about they could perhaps fine an interim solution. where is do you think the middle ground?
>> that will be the big question. there was a discussion before saying what is urgently needed is not every bank being supervised. but the main thing you have to look into is all the international banks, the banks that have branchs in various countries, it actually doesn't make any institutional sense to have lacking at the internationally operating banks in germany, but they can only look at the german part of it, but they don't see what these banks are doing in spain or italy or anywhere else in the world. so that could be the interim solution that we're taking maybe instead of with 6,000 banks, we're talking about maybe only 20, 30, 50 of the big institutions that will send up at the ecb and then we move on step by step. >> all right. for thousand we'll see how talks evolve as ever.
>> the fact we're not breaking up seems to cheer investors. is that going to last? >> i think so. tail risk is now being removed from the eurozone. i think we could go back to august and you might have thought there was still a chance that greece was going to leave and now we've effectively had an official sector bailout again in all but words. yes, it's a private participation and all voluntary, but the funding to retire greek government debt at a 40% haircut and the extensions that we saw basically last week essentially mean the net present value of greek debt has again been for given by the center. we fear q1 will be negative, as well, which might set us up for an ecb rate cut. but politics are getting better.
>> spain is getting bailout money. is this mood on the politics going to be sustained? >> i think so. the more difficult question now is whether spain needs to formally ask for omts if there is pressure on the bond market. so far we haven't seen that. but the spanish bank bailout, we're finally getting around to it. i think theyed a hoped that setting up a single backing supervisor would mean the bailout wouldn't be required. it now looks as if everything is being delayed there, so they have the bailout money now. >> spain asking for assistance, can they last beyond the german
elections? it's in the fall of next year. >> there's a window between september and october. they pre-funded themselves for this year and they've done some funding for next. of course the issue becomes when spain goes in to next year and starts needing to issue five to six year paper and will that be the trigger for a formal queks. omt means the market tries to push up spanish yields. the ecb can help if asked. and that's the crunch time the first quarter and how markets react to debt auctions. certainly i think any kind of easier terms for ireland, for portugal and for spain would have to be delayed up after the german elections. so maybe the spanish government strategy will be to wait for as long as possible before formally asking for those funds. >> all right. thanks for that. good to see you as always.
in the states the white house has dismissed the proposal by republicans saying it doesn't address the president's pledge to hike taxes on the wealthy. the plan would generate $800 billion in new tax revenues by cutting loopholes and deductions, but does leave the bush era tax cuts in place for everyone and that's half of what the president has proposed. it would also cut $1.2 billion it in discretionary spending. the republican plan includes raising the eligibility age for medicare and changing how cost of living increases are calculated for social security. white house officials suggest the two sides will continue to negotiate ways to avoid the year end fiscal cliff. and baby mania has hit will the uk as the duke and duchess have confirmed a new addition to the british royal family. we'll have the latest. [ male announcer ] this december, remember --
interest rates to match their lowest level since the financial crisis. we'll talk airlines later. ahead of that, british airways say it's offering to imbalance the crew numbers. we'll keep our eyes on that. delta possibly bidding for a stake in injury gone atlantic. meanwhile there's other global news of significance. it is official, new royal highness on the way. after week of speculation, it's confirmed they're expecting their first baby. there are a number of bits of flash photography. the duchess is being treated in a central london hospital for severe morning sickness. book makers have been inundated
with bets on what the new prince or princess might be called. joining us for more, michelle kozinski. good to see you. give us a sense of the scale of international media. i don't think i've seen a paper this morning from around europe that hasn't got their picture on the front pain. >> right. you can't dozen it that this is huge global news. all over the tabloid press, magazines, fwgossip columns sin the day they've walked down the aisle. so even though you felt like you needed to give a bit of a disclaimer there since it's a morning show you felt it right that you you should mention it, but you can't deny this is big. minutes after the announcement was officially made by the palace yesterday afternoon, there were photos, composite photos that were being compiled online. imagining what this child will
look like. there was immediately a twitter handle called i am royal baby. around the u.s. where of course we know the royal family is enormously popular, cities around the country are asking for live shots from london. this is just one of those things that gives people something to pay attention to. and it is happy news, although it does come with the unfortunate circumstance that kate is feeling very poorly. but people want to know about this and it will be something we'll be watching no doubt very closely for the next nine months. >> absolutely. and we wish her the best of course. intense media interest is a great driver of traffic, right? this is a story media you loutl love. >> and in the u.s., you walk in a store are a back of magazine,
you'll's kate's picture on multiple magazines as any given time of the year. they know this story sells copies and they'll put it there and even if the medical line was not necessarily true. now it is true and there will be that much more coverage. the palace is trying to maintain some degree of privacy. they announced they won't in fact be giving daily updates on kate's condition while in the hospital, but you know everybody else will be quoting their unnamed sources in giving those kinds of details. >> if you're in the states, only one place to follow it and that's on nbc news outlets. michelle, thank you very much indeed for that. also in the united states today, no economic data, but quarterly report on u.s. bank earnings at 9:30. look for results from autozone, big lots, toll brothers, mattress firm and pandora. and still to come, heathrow
airport is bursting at the se seams. but is consolidation the only cure for these growing pains. having you ship my gifts couldn't be easier. well, having a ton of locations doesn't hurt. and a santa to boot! [ chuckles ] right, baby. oh, sir. that is a customer. oh...sorry about that. [ male announcer ] break from the holiday stress. fedex office.
slim declines credit. dow down nearly half a percent. right now implied down half a percent for the 500, up just four points for the dow, nasdaq called up just two points. european market which is had slim gains or were flat yesterday just up marginally for ftse. but they have been up nine and ten out of the last sessions. ibex up around half of 1%. in terms of individual stocks, shares in tui travel a little bit higher. an 8% rise in full year profits as the world's biggest toll operator has said numbers good at boost from the strong summer vacation period. meanwhile a report out of the united states suggests travelers will also pay more to fly this holiday season. according to the ticket sales data from priceline.com, the average price for domestic airfares departing the last two weeks of december is up 4% versus the same period last year. but against this backdrop, global airline bosses are staging a fight over ways to boost airport capacity. the ceo of iag which owns ba is
set to join the debate when he appears before a parliamentary committee later today. heathrow slots perhaps just one reason why delta is reportedly mulling a 49% stake for the british based virgin atlantic. the deal would expand delta's position in london and boost its governance along the lucrative transatlantic root from new york. joining us is portfolio manager at anc capital. arthur, thanks for joining us. how important are heathrow slots if you want to compete? >> i think they're important to have a presence there and when you look at what delta is doing specifically, they're increasing their scope. and when you look at the flights and the offerings that delta has, it's week relative to
american b.a. so what delta wants to do, it smells an opportunity here to give an offer to go customers because this is a network business and move those customers that maybe are going on ba, aa, or united out of newark on o. to the delta large system. and that's the opportunity it has. and conversely people here that want to come to the states or the big network delta has to get people to points beyond i think for virgin to be part of a transaction here, you get the united states market which is a large market. >> you have sink more airlines which would sell, sky team with delta and sort of ba, aa team, as well, how are those three global shaping up, who is winning? >> well, i'm partial to sky
team. sky team and united alliance are far ahead of all the other alliances. and you look at profitability, let's step backwards and look at profitability in the united states market which is are large markets, you have united and delta leading the pack. so those are the two -- >> an interesting concept for me for american airlines because they spent -- you take the last 30 year, how much have they spent in chapter 11? i often ask myself if you're not southwest for the legacy carrier, is it actually a viable business or is it more of a social service. because they're constantly having to be restructured anytime there is a crisis. >> first of all, the big carriers have been margins for first time ever. and that's what the braps did. second of all, you're right, at the end of the day, the government viewed this is this
as a social service, but right now, airlines are making money with gdp below 2%. that has never happened. i view the business as the railroad in the united states early '90s. you had zombie railroads, conrail split up by two railroads, and you had railroads in bankruptcy for 30 or 40 years throughout the history of the united states. it was until they consolidated because there was a network business where they started making economy returns. and now you you look at the airlines and i was involved with the bankruptcies, the 5ir8s are making money reducing debt which has never been done with such awful growth we have. delta for example had $17 billion of debt in 2009. met debt. mid 2013, they'll be at 10 and
it's all done with cash flow. >> so you think we have finally turned the corner for the airlines business in the united states? it's a different model for the next decade or so? >> i think unfortunately past historical events led us to this, but as you look forward, this business should be consolidated. >> i like that is the progression speprospect. thanks for joining us. still to come, about time of dreaming getting the hats and gloves out. the ski slopes, snow is arriving. what will the season be like.
here are the headlines today there around the world. taking the next step, house republicans put forward their plan to avoid the fiscal cliff. proposal quickly dismissed by democrats and the white house. eu finance ministers trying to come to an agreement on a european banking union. this as the ecb vice president says appointment of the supervisory board should be decided by central bank itself. and australia central bank has cut interest rates to match their low he is level since the financial crisis in a bid to try to get ahead of sluggish
commodities demand. very good morning to you. kelly away all week. we seem to be on different schedules. pretty disappointing ism manufacturing. lowest in three years. today called slightly higher, 12 1/2 pounds. a flat tisch day yesterday for the ftse. just up four points. ftse and dax up 9 and 10 out of the last 11 trading days. dock 40 up on 0.7%.
ibex up two thirds. the white house and leading democrats have dismissed the latest proposal by republicans suggesting it didn't address the president's pledge to hike taxes on the wealthy. the plan would generate $800 billion in into tnew tax revenu leaves the bush era tax cuts in place for everyone. it would cut $1.2 billion in discretionary planning. it raises the eligibility anyone for medicare and changes how cost of living increases can calculated. house officials suggest the two side where is continue to negotiate ways to avoid the year end fiscal cliff. and on that team, the president will meet with a group of u.s. governors.
they'll discuss possible solutions to the fiscal cliff and how it will impact their states. the group is also expected to meet with house republicans later in the week. in corporate new, sprint nextel is reportedly out of the market for metro pcs. the company won't make a counteroffer. sprint announced japan and he softbank will buy up to a 70% stake in the company. reports suggest sprint believes going after metro pcs would complicate the regulatory review of the softbank deal. sprint stock in frankfurt up just a third of 1%. and service capital reportedly in talks to join the bid for night capital. it would include silver lake partners and credit suisse.
it's vying with getgo. they've been ig the company since august after bad trades informationed it to seek emergency capital investments. and in germany, angela merkel is officially launching her campaign for re-election. she's said to be wlauded for her solid leadership. the result is expected to set the stage for the federal poll national elections which take place in september. we'll talk about oracle returning cash to shareholders. plus it's just about time to break out your skis and head to the mountains. we'll find out what the financial forecast for the skiing results will be as full as they hope the slopes will be.
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to buy back bonds has helped the euro out. officials are confident the plan will go well. this follows a meeting of finance ministers in brussels last night. finance ministers are confident a compromise can be found. ecb policy maker meanwhile said it is not feasible for the thorl bank to monitor all the lenders that have received government aid by the original target date of january 2nd. ecb cut its growth forecast to 1% and 1.8%. saying output will only return to pre-recession levels at the end of 2014. this has retail sales for the country missed forecasts in november. like for like numbers
were up, though. the increase in sales is due to shoppers looking for bargains in the run up to christmas. matthew taylor has a report from sydney. >> the market had been pricing in a 25 basis point rate cut, and the reserve bank delivered with an early christmas plenty. central bank lowering the cash rate to 3%, the lowest level since the height of the global financial crisis back in 2009. rba says while it's still waiting to seat impact of its previous 150 basis points of rate cuts work its way through the economy, it says the global outlook is still seen to the down side and policy easing was appropriate right now. it did point to some signs of strength, though, particularly in china saying growth there appears to have stabilized and
the european economy remain as president obama. domestically it says a return to strong consumption is unlikely and that the rate cut is designed to foster growth in the local economy. wayne says he wouldn't be surprised to see a slight moderation in the growth numbers. the that's the latest from sydney. >> meanwhile qualcomm set to become a sizable shareholder in sharp. they're investing $61 million in struggling japanese lcd firm, but could double that if all goes well. the deal announced after the monthly close will see joint efforts on energy efficient smartphone displays. this will be through qualcomm subsidiary. sharp shares higher on reports that the deal would be announced up 1%. and cargo ships are stacking up
offshore and the strike moves in to its second week. contract talks resumed on monday. the longest disruption of the busiest port since a ten day lockout in 2002. but this one is taking place after the busy pre-holiday shipping season. national retail federation has asked the president to intervene. facebook might be a stock to watch. here's a full preview. >> in the u.s., cars and housing are two areas of the economy that have done a lot better this year. and that improvements has carried over to companies that operate in those indices. new luxury home builder toll brothers is expected to report profits nearly tripled. demand for new homes has lit a fire under sales. and autozone could see income jump by 15%.
americans are still shopping for products to help them maintain their older cars. there is no economic data due out today. but facebook is expected to make a special announcement early today. and aircraft maker boeing and the union that represents its 23,000 engineers will resume their labor talks. for those who follow american sports, the national hockey league will sit down with its players union again today. the two sides are still trying to figure out how to divide $3 billion a year in revenue. but with no progress expected, the entire season could be iced. and forget about the fiscal cliff as if we could. in washington, the capitol hill christmas tree will be lit tonight. john boehner will pull the switch in a hospital of holiday inn duesed n induced nonpartisa. >> that's the look ahead today. we've had a few technical problems with getting our licks up to north america which is why we've had a number of guests stacking up, but i'm assured we're working on them. we will talk about the ski season, as well.
before that, let's remind you what the headlines are today. fiscal cliff talks set to drag ons as budget proposal by republicans dismissed by the white house. banking union talks taking central stage in brussels. finance ministers trying to find a deal. and australia central bank has cut interest rates to its lowest level since the financial crisis. how? cdw and hp networking implemented a virtual application network that reduces the time to deploy cloud applications from months to minutes. with fewer bottlenecks like this. finally. charles! client golf. aim for the lake. really?
. jpmorgan says mr. bieber is welcome to play ping-pong anytime. and if you're looking for the city with the best quality of living in the world, then what you need to do is go to vienna. this according to mercer. just published its quality of life survey as zurich landed the number two spot. baghdad ranked last because of security and political instability. and it's official, a new royal highness is on the way. after week of speculation, the duke and duchess of cambridge have confirmed they're expecting their first baby. the duchess is thought to be under 12 week pregnant being treated in a central london hospital for severe morning
sickness. book makers inundated with bets. spec lating they might even be having twins. we wish the duke and duchess the very best wishes. the christmas holidays typically marks the unofficial start to the u.s. ski season. according to farmers almanac, an average a snowfall is forecast for the colorado rockies. possibly meaning they could have a great season. joining us is david gibson from snow magazine. david, what are you you doing in orlando? what's happened with the early snow there? >> that's what happens when you belong to a big publishing conglomerate. we publish our magazines out of orlando and i've become pretty much my reader. the minute the snow starts falling, i head to the mountains. >> we had quite a good shopping period over the holiday season. we've got consumers a little bit
better. how will the resorts do this season? >> vail has really been taking the long view. we had a bad snow season last year. and a lot of the small resorts felt that, but vail i think sees the ski industry is going which is a complete ski experience from the hotels to the dining to the skiing. and they did some nice acquisitions over the last few years and they seem to be in a pretty healthy state, i think. >> you have the phrase money will find snow. what do you mean by that? >> well, even when the snow is not great at your local mom and pop resort, there is still this big class of people that are big fans of the ski resort lifestyle and they'll travel to find it. whether that's south america in the summer or it's the russians
because their local snow is not that good or really americans and europeans who are back and forth between the alps, canadian rocky, rockies. even right now when aspen and vail aren't having the best early season, we're having tremendous snow through the canadian rockies, british columbia and alberta. those resorts are opening early. hotels are full. right now of course you're having this string wind river i believe they're calling it which is dumping tons of snow on the high sierras. they'll be digging out the snow lifts. >> if you've had poor snow the previous season, how does that then -- must reflect into people buying equipment and clothes. snowfall presumably spills out not just into the people who go to the resort, but all the equipment manufacturers get impacted, do they?
>> absolutely. we had a really interesting situation that happened over the last couple years. we had a lean year last year which was following a very what we'd call an epic year where it just never seemed to stop snowing. that meant that on that epic year, people of course updated all of their equipment, they got new outer wear, and then when we had a lean year following, it just didn't live up to the hype. people weren't back in the stores. they still had their equipment from last year. so industry wide, the whole situation was down. but skiing has become particularly at the high end where snow magazine sits a very fashionable thing. much as it was in the 40s and 50s. and a new outfit every use is something that a lot of people think about. there's new ski equipment that happens every year. once upon a time, your skis really didn't change over the course of a decade other than to
get them relax h. waxed and have the enls sharpened. now there's new technology every year. snowboarding is taking-46. >> which is i didn't like to rent my skis so i always have the latest. i buy my boots, will you like to rent my key. >> i've looked at those pictures and i'm salivating at the prospect of booking a few trips. so thanks very much indeed. oracle is the latest among a group of companies who aim to speed up dividend payments. liarry ellison did not tapt part in the decision, but he'll benefit. he'll receive $198 million for
his 23% stake. oracle stock nevertheless down slightly. three quarters of a percent. hugh johnson is chairman chief investment officer at hugh johnson advisers. dividend buy backs -- differepa how big a theme? >> not a big one. every investor is really difference. you have to shape depending on the investor. i think generally speaking our expectation is, yes, capital gains taxes will go up to about 23.8%. differenvidends will for the go the ordinary tax rates i don't believe, but they'll go up.
they're trying to find losses to offset it. obviously everybody is kind of putting investment on hold. first of all, you have the employment report this friday which always puts a little bit of caution in the air. but this is put something extra caution in the air. nobody really there's a positive outlook. not a wildly positive, but as positive outlook. but we're putting every on hold until we see what's the resolution of the fiscal cliff. quite frankly everything i've been able to learn is we're not going off the fiscal cliff. p th this is not thelma and louise. we'll have this resolved. but again, there's enough uncertainty that we want to kind of put the whole process on hold
until we see a resolution. and i do think indeed we will see a resolution, a positive resolution. >> that's the good news. and we've seen a number of investors say u.s. equities has outperformed this year to -- well, done pretty well. thousand turning their tune and saying you want to be more international. what's your view on that mix? >> i would agree with that. it's a little bit of an evolved explanation, but i think it's good news we'll see weakness in the dollar. i think that's part of the federal reserve's strategy. the whole idea put weakness in the dollar to try to improve exports to offset the weakness we're seeing if exports to europe. so i think all of that is part of the federal reserve's strategy. but again, weakness in the dollar, strength in other currencies, particularly the asian currency. some of the south american current cities. that says we'll see international capital flows fall to go other markets. so what i would say to everybody is that whereas we've held down
our exposure to international equities, both developed and to emerging, i would start to increase that exposure to international equities both developed and emerging, largely because i think you'll see dollar weakness and currency strength in other parts of the world. >> next year will be steady -- far more steady and far less spectacular, that seems to be what you're suggesting. >> growth next year probably around 2% is the consensus, 2.4% is where i come down. growth in profits maybe 3% to 4% next year. a very flat interest rate environment. you put all that together, you ask yourself what's going to happen to the stock market if that's right. and the answer is you won't get much out of that.
>> so how do you invest into sectors? i think we've lost sound. unfortunately. there we go. our apologies. anyway, that was hugh johnson fp our apologies to him. we have had problems this morning as you might have guessed. let's just recap before we go where we stand european stocks. ftse 100 up nearly 0.2%. u.s. futures slightly upward, but it's all to what i. we'll get the count done to the opening markets with "squawk box" up next. we hope you have a profitable day. [ male announcer ] this december, remember --
white house rejects counteroffer from republicans as both sides remain far apart on avoiding the fiscal cliff. president obama meanwhile will meet with some of the nation's governors to talk about the cliff, growth and deficit reduction. and oracle puts the pedal to the metal, the company accelerates difference denied payments and larry ellison is the big winner. it's tuesday, december 4th, 2012, "squawk box" begins right now.