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tv   Worldwide Exchange  CNBC  December 5, 2013 4:00am-6:01am EST

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hello. you're watching "worldwide exchange." i'm ross westgate. hey, big spender, japan unveils another massive package including more than $50 billion in spending to help offset sales tax hike. mario draghi should be holding fire, despite the recent drop in inflation. investors eyeing the ecb's economic staff projections. and i told you so. british chancellor george
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osborne may have reason to gloat. and china's financial institutions are warning against trading bitcoins as the bank admits while there are risks, it could still use the currency. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. hello. a warm welcome to the program. the government has just unveiled an $18.6 trillion yen stimulus package which includes 5.5 trillion yen in fresh spending measures. this is to offset the accuracy in the sales tax which is coming in in april which raises the rate effectively from 8% to 5%. it follows the unveiling of a
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10.3 trillion package back in january. a number of measures will be expected as far as this package is concerned. particularly for those on the lower income as well. we will get those measures as soon as they are announced in detail. also coming up on today's show, hopes fade at wto talks as food sebsydys remain the sticking point. we'll be in bali to get the latest on the push for a trade deal. not loving it. fast food workers go on strike over low pay, but will it make any difference? we'll discuss the pain at 11:30 cet. india's party looks to make gains in key elections. we'll be in dehli in just over half an hour. and move over, detroit. tensions are moving to other regions drowning in debt,
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including puerto rico. what it could mean. if you've got any thoughts or comments about anything we're talking about today, e-mail us, the ecb today will be presenting new growth and inflation forecasts alongside the announcement of its latest policy decision. the central bank said it expected a slight rise in inflation in 2014 and '15 and predicated a rise in in inflation across the upper row zone next year. annette is with us now. they cut rates last month. the euro hasn't weakened. we had sharp divergence between germany and france. what do they do now? >> that's a good question, actually, probably. today they won't do anything. we might see more moving towards
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potential further easing next year. as well, of course, that wouldn't be their first agenda to weaken the euro a little bit towards the dollar. they would never admit that. but it would actually help around the periphery of the eurozone. as well, they want to export their way out of recession. but now i'm joined by the chief economist of germany's second biggest bank, commerzbank. first of all, thank you very much for joining me in that chilly cold weather here in frankfurt. secondly, my question would be what are you expecting today? are we seeing more easing or is it just a reiteration of what we have heard before? >> well, i think the ecb does not want to surprise the market two times in a row. i think the focus will be on inflation projections. we expect the 2014 inflation projection to be revised down to
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1. 1.1%. 2015 will be at 1.4%. that means significantly below the 2% mark of the ecb. >> so will we see a further easing of monetary policy next year or will we actually see rate hikes? because some of them are -- some people argue for a rate hike. >> forget about rate hikes. i think the crisis comes as the periphery countries outnumber the bundes bank in the ecb. and when you have inflation rate around 1%, when you have gdp growth not strong enough to lower the very high level of the unemployment rate, i think this is a chance for the ecb council to go for further easing of the -- of monetary policy and it's possible that they set a negative interest rate, but more likely a special conditional tender.
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>> a special conditional tender. what do you mean exactly by that? it is a little bit for funding scheme of the boe? >> this could be a good example. the ecb may offer a tinder to banks. when banks manage to raise their lending to the nonfinancial sector, then may be allowed to pay an interest rate below the official rate. >> they would like to have support beforehand. we have the negative rates. this could for any time be used
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for an argument relating to special tinder. >> ross was just saying in studio that the euro/dollar is still going very strong. do you think at least the ecb and second agenda is thinking about weakening the euro towards the dollar by some more language? well, i don't think so. because year on year terms create weighted the euro is not so much up against all the other currency high on the agenda. no, there is an implicit easing bite of the council which comes from the peripheral countries which would like to do something for their banking sectors. >> thank you very much for join us today. ross, you see not a lot of news probably out here from the ecb today, but it will be very interesting to see how mario draghi reacts and, as well, how his temper is during the press conference. because he can be quite moody from time to time as you know. with that, back to you. >> oh, okay.
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i've always enjoyed his performances, to be fair, annette. thank you very much for that. plenty more to come from annette and we have extended programming today because of an ecb rate decision. we'll see what moves mr. draghi. then it's probably detected slightly by the questions he receives from those in attendance. we've also got the bank of england today and george osborne's statement, as well, talking about that. no big giveaways. that is the expected theme from the british chancellor today as he provided an update on the government's plan for the economy in his autumn statement. the chancellor is expected to lower his borrowing costs and offer suggestions that a budget surplus is in sight for the first time since the millennium. still to come, we will in around 20 minutes be at college green outside the houses of parliament for a full autumn preview. joining me will be steve radially, the boss of manufacturing policy group eef.
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and later in the show, helia will discuss the good and the bad with the british politician lord digby jones. always were a good comment or two, digby. as far as the agenda in the states today, we have initial jobless claims being released at 8:30. the number might be a preview of what might come in tomorrow's jobs report. at 8:30, we get third quarter gdp. a key benchmark on the road map to the u.s. economic recovery. and october factory orders come out this morning. they are at 10:00 a.m. that's the data. what about global asset prices? let's bring you up to speed. ten minutes to the trading day, we are weighted around about 6 to 4 currently advancers outpace
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decliners on the dow jones stoxx 600. xetra dax, up 0.1 is% as well as the ftse 100. cac 40 flat and ftse mib up 0.4%. we'll show you where ten-year treasury yields are at the moment, 2.82%. we did see adp coming in fairly strong. nevertheless, yields up to 2.83% yielding 2.9% yesterday. as far as currency markets are concerned, just coming back on the announcement of this stimulus package. euro/dollar, exactly where we've been all week, right on this 1 is.36 mark. sterling, 1.6374 just back from
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the two-year high we hit earlier, 1.64. that is the foreign exchange market. what happened in asia today? sixuan has the details out of singapore. >> thank you, ross. asia wran markemarkets tracked . the nikkei 225 dipped further from tuesday's six-year closing high ending down 1 is.5%. while china markets turned for the worst, hong kong listed shares tumbled nearly 5% following steep losses in europe overnight and that's after profit warning. the kospi extended a five-day losing streak. and australia retreated to a seven-week low after the country posted a bigger than expected trade deficit in october. but india as performed opposed
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strong opposition. now for individual movers, chinese telecom equipmentmakers succumbed to profit taking. zte tumbled almost 6%. meanwhile datang telecom down almost 7%. just one day after the issuing of these licenses, a deal is signed between apple and china mobile. according to "wall street journal," this could mean china's largest telco could start to offer isos on its network to 700 million subscribers. it could potentially draw a larger custoday. it's competitor gained 0.25% in china telecom. back to you, ross. >> thanks very much for that, sixuan. carl icahn announcing a tweet
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that he would submit a proon posal to apple shareholders for a 50 billion buyback program. that's lan than the 150 become buyback program he was previously pushing for. well, we have heard from the japanese economic minister, amari, it was he's been with early stage tongue cancer. he's offered to resign, but the prime minister has refused his request. he remains in the post while getting treatment. that came out at the same time that the government has laid out the latest details of its 5.5 trillion yen stimulus package. >> apple has reached a deal with the world's most used mobile
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carrier to report cell phones. it comes a day after china mobile offered a 4g license. neither company is confirming the news and china mobile is telling cnbc a deal is still in progress. china mobile shares gained modestly in hong kong. one company, of course, totally depend yapt on the growth of the smartphone market is ericsson. 9.3 billion mobile subscriptions will be active. 5.6 billion of which will be for smart hand sets. the world anticipates number one mobile networkmaker is compete, chinese competitor hallway. but the ceo said the company is still in a good position. joining us in a first on cnbc interview is hans victor.
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we'll get into mobile phone growth in just a second. could we get your view of the world from a macro perspective. we clearly have in europe a die verging europe, if one believes the pmi from germany and france. do you see a sharp divergence in growth and the core? >> when we reported a third quarter for 1 1/2 months ago, i said that in europe we see no further worsening. we actually see some slight improvements. but you're right, we see splits from different countries. from a telecom point of view, north america has been quite strong for some time and parts of asia, as well. they have been there for a while. but there's nothing new. we haven't had that for i would say 12 months or even more than that. >> explain how the economy
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impacts people spend on mobile. because those of you actually need in your life, maybe more important. >> we had the crisis in the industry. this time we have not seen any similarities of that. the mobile phone and the mobile network and the internet is such an important piece of our personal life today to be efficient and staying in contact. so we have not seen that direct correlation. there the things that comes before mobility and food and clothes. but it's so important in our
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society today so spend tend to keep it. >> we know vodafone is spending 7 billion to up gragrade its network. what are the carriers doing? >> i think it's different from the regions. i can only relate to what voe da phone has communicated. are they going to accuracy their spending on the networks to come. if we look at our business, we're growing over 20% in europe in the third quarter, so we have a lot of business in europe. but we're taking market share. it has been a little slower there. japan, korea, where we've been growing and, of course, another level of investment on 4g at the moment. >> global smartphone penetration reached 60% in 2019.
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here's the thing. just does that sort of growth in smartphones also necessarily equate to a similar growth in data usage and traffic? because if you're the last person to get on the train, you won't use as much as the earlier. >> so far, we see no different patterns and usage. basically everyone get to go a smartphone are using that eight to ten times more than what is called feature phones. many of the people that will get the smartphones in the predictions that we have to 2019, they will, of course, get their only internet access through the smartphone. they will never have a computer or a fixed broadband or something like that. we believe that will remain and technology needs to develop to meet that base demand. >> one of the big success of smartphones is cost of data. is that going to come down? >> i think this will, of course,
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bring things down. we need to be more efficient in our equipment. but also the scale will push down the price of the hand sets. we made the rough calculation that will reduce the dollars on a smartphone, 100 million people on this earth can afford it. and this is a scale of markets where basically the same technology is very important. >> one of the problems i think i have is not speed. i know we talk about 3g to 4g. it's actually capacity. it doesn't matter how fast you go, if it gets full, it doesn't work, right? how is capacity going to change? >> a couple of things. first of all, you need to invest in capacity and operators in general are doing that. secondly, we that spend $5 billion u.s. a year, we need to have even more sophisticated technology that can handle more and more data loans, more and more frequencies. that's where we're doing all the time to actually capture that
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and the efficient delivering. but you're right. it's the capacity. it's a huge difference in the capacity you need. >> what if nokia and alcatel get together? what will happen them to this market? >> we are number one on mobile infrastructure, twice the size on number two and clear the number one on services. 45% are the turnover, installation, consulting, outsourcing. we have also diversified ericsson. so we have different type of competitors in each segment of our business. but it is dynamic in the industry. we're coming in to the second face of a technology revolution. everybody is looking into what the new divested hand set, for
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example. how can we compete? >> good to see you. thanks so much for coming in and joining us on set. now, if you have any sorts of comments, e-mail us. also still to come, india's rupee hit a five-week high against the dollar. we'll be in new dehli for the latest after this.
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joining us with details of elections in new dehli are sri. >> the main opposition party here in india is more right of center, if i could call it that, is likely to have the advantage as far as four of the five state assembly elections are concerned. the bjp as per the exit polls is
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likely to hold on to the states and it's likely to defeat the congress in a crucial state which is a large north indian state. the bjp may, in fact, upset the three time minister who has been in power here for the party in the past 15 years. very clearly, there seems to be momentum in favor of the bjp. and this also in a sense has been seen as a weak -- he's a three-time chief minister of the state which has been upheld as a model for development, model for economic growth and economic reforms. the stock markets, the currency markets seem to be giving this victory a thumbs up and that is the reaction you're seeing currently as far as the equity and the currency markets are
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concerned, ross. >> yes. let's get more into the market reaction, shereen. how notable is it and how do they perceive this party? >> you know, as far as the markets are concerned, this is interesting. for us first time, institutional investorses have articulated their preference for a political party or the brand of politics. remember, the congress is seen more as pushing welfare economics, policy for entitlement, large subsidies running up a large deficit. in comparison, it's seen more reform. but, again, there's a them ma or a dichotomy there. it's the congress that's pushing to a higher fdi limit and a higher fdi cap whereas the dop
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is opposed to that. ubs this morning, goldman sachs a couple of weeks ago, jpmorgan, everyone has given the fact that the bjp is likely to win the next election in 2014, a big thumbs up and that's what you're seeing reflected in the market. >> thanks very much indeed for that. car service is at uba is teaming up with home depot to deliver christmas trees on demand as part of a one-day publicity stunt. investors will be able to pay $135 to have a tree and the stand brought right to their door. >> what would you like delivered, though, on demand? if you want to join the conversation here on "worldwide exchange," get in touch with us, e-mail us,,
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tweet to me @cnbcwex or direct to me @rosswestgate. we today had our own christmas tree here delivered on set. oh, yeah, they delivered it like that. it was quite handy. although some would argue that the thrill of christmas is decorating it yourself. there you go. not long to go. let us know what you think. but the christmas tree, though, could be a thing of the pass if some get their way. most in britain would prefer cash to a festive bash. that story on, as well. follow us on twitter @cnbcworld. bash is a party. still to come on the show, coming up, we'll head to westminster for a full preview of george osborne's full statement. hi honey, did you get the toaster cozy?
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these are the headlines from around the globe. hey, big spend her. japan unveils another massive package including $50 billion in
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spending to help offset the forthcoming sales tax hike. mario draghi expects to hold fire today despite the recent drop in inflation. investors will be eyeing the economic start projections. i told you so, british chancellor george as born might have some reason to gloat just a little with his aus item statement today. the government's program is gaining some footing. and china's financial institutions are warned against trading business coins, but the central bank admits that while there are risks, individuals can still use the virtual currency. european equities have slim gains this morning. we're about an hour and a half into the trading day in europe. pretty flat on the ftse 100. xetra dax is up 0.1%. the cac 40 is flat, as well as
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well as the ftse mib. ten- year treasury yields up to over 2.8%, around 2.82% after yielding 2779%. gilt yields higher ahead of the autumn statement. on the currency market in the ranges, dollar/yen has moved away from that six-month high of 103.70. and euro/dollar is just below 1.36. sterling/dollar just moved away from its two-year high against the dollar of 1.64. now, no big giveaways is the expected theme of george osborne today. he's expected to lower his borrowing forecasts and offer suggestions that a budget surplus is in sight for the first time since the millenium. helia is braising the chill outside parliament where mr.
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osbourn will deliver his speech and joins us now. helia, no big giveaways. what's going to be in the details? >> as you said, it's going to strike a -- for continued austerity. but let's face it, this is a good day for the chancellor. we've got the deficit cut, we've got public spending finally coming down. as you've said, the budget surplus on the horizon, that's big news. he will say austerity and balancing the books needs to be central to the government's policy going forward. now, whether that's pushing out the pensionable age or a further squeeze on public spending, some of that detail is going to be heard, it's going to be changes to energy prices, it's going to be changes to possibly some of their corporation tax, a freeze on business rates, but essentially it's going to away fiscally neutral budget with a tone saying tax cuts, they may kot come in the future, but not
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until we've secured recovery. we will have, however, gdp revisions up towards. the uk economy is booming. some experts are saying that the uk could be the most successful economy within the fw7 nations by the end of the year. with us here to discuss that further is steve radially, director of policy at trade manufacturing body eef. steve, finally, do we have a balanced recovery in the uk? we had positive manufacturing this week and the survey vague that is going to continue. could it be the right kind of recovery? >> well, the news is certainly looking better, but we're still below where we were before the recession in the economy overall in manufacturing. we're going to see january rebalancing, more investment, and more exports. that's what we're hoping today's autumn statement will promote
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more of. >> specifically, how are you expecting the chancellor to promote more investment? >> well, i think there are three things you can do. what we found talking to our members is that companies are tending to invest more. we need to see action that now is the right time to do it. three things i think you could take action is, making it easier for them to invest in skills, addressing rates and most importantly of all, addressing rising energy costs. we've seen action to address rising energy costs for households, but this is a big cost born by business, not by investors in other countries and we need to see action to stop this rising. >> and you just touched on the skil skills. what do you think the government can do that? >> what we have started to see is companies are starting toni vest a lot more in skills. what we need to see is to make it easier for them to do. particularly, put the money in
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the hands of the companies making the investment rather than giving it to the providers. they're create ago proper market in trading. >> and the 370 billion pounds, the government announced 25 billion had been pledged by insurance companies. this all sounds very familiar. is actually the structure for all of this infrastructure development being balanced correctly by the government? >> i think it's starting to happen and i think it's great that we're seeing private funding coming into infrastructure. we're now seeing plans to the government on infrastructure and some action on delivery. but now we need to get it going. >> and will it attract investment from companies? >> i think it will. they've addressed one of the big problems in terms of the insurance sector. but what we now really need to see is we have been here before with plans. we need to see the government working tirelessly across all
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departments to unblock all the things that prevent investment happening and get this infrastructure investment going. >> thank you very much, steve radially, from eef. i think we'll be looking to the chancellor and business certainly will to see what measures are going to be brought in for the real economy. remember, that is what the chancellor has been talking about in the lead up. that's where we've seen the prime minister and his visit to china press on getting money and capital to the real economy. it may be a physically xhushl budget, but how are they going to sustain the growth we've seen in the past pew months? >> helia, thanks for that. the chancellor is due to stand up and give his speech around 11:15 london time, 12:15 cet. we will cover that, as well. that will lead into the bank of england decision, as well.
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the japanese cabinet has approved a stimulus package worth $182 billion. we have the story from tokyo. >> hi, ross. this massive package is expected to push up the nation's real gdp by around 1%. government spending is to total around $54 billion. $13 billion or 25% of this will be allocated to help improve competitiveness of japanese industries and to strengthen metropolitan functions ahead of the 2020 tokyo olympics. the rest will be spent on things like reconstruction of quake-hit areas, public construction works and benefits to low income households. in addition, a $98 billion lending scheme for small and mid sized businesses fpsed by the
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japan corporation will be part of the package. the government is set to decide on the extra budget needed to roll out this huge package by december thanks for that. have a good evening in tokyo. still to come on the program, following the devastation from typhoon haiyan, profits are on the rise in the philippines. we'll have the latest inflation numbers and what it means for us economy, coming up.
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we have seen a 2018 bond just down from november 7th. they had a longer dated one, as well, 1.2 billion of a -- that's the 2017. the year on that, 2.2, a little higher than the 2.1% on november 21st. two auctions, one yield low on the 2018, a little high on the 2017. at the moment, terribly worried about italian or spanish debt.
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in the auto market, ford is taking the wraps off a fleet of new vehicles. the most hotly anticipated municipal them is the new mustang which comes to europe for the first time in its 50-year history. earlier, we spoke to ford's president who explained the timing of the launch and why they're pushing a model that has fairly small sales growth in the united states. there's a huge owner base and interest base. i think there's a million facebook followers in europe along for the mustang. so there's a great deal of interest in the product. we know it's not going to be a massive seller in volume terms in europe. we absolutely are confident that we'll sell the volumes that we'll bring in. but it is also, if you like, a lighthouse, a banner, for all of the capability, all of the design leadership and the technology that ford has globally and is bringing to europe.
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hs in the seconde erseconder, r dongfeng enter a $1.3 billion car making venture. what do investors make of it? >> well, the factory will produce 150,000 cars per year. but the statement doesn't say when this new factory will be operating. still, it's very good news for renault because it's one of the largest carmakers which doesn't have a production facility in china. that's one of the reasons why it has a limited market share in the country. last year, renault sold only 30,000 vehicles in china to compare with a global market of 16.5 million cars sold in the country. that's about 0.2% of the chinese market. so it's important for renault to get a production facility in the country. that's the reason why this green light is very good news for the carmaker. this is raising questions about peugeot citron.
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as uj, p as you know, peugeot is currently having negotiations about growth even with capital links. we're talking about a potential merger between the two carmakers. renault and peugeot can't have the same partner in china. so this is raising questions about the current negotiations between peugeot and its chinese partner. renault is resting positively as we could expect. peugeot is trading a bit lower on the back of this announcement. over to you. >> thank you for that. we'll keep our eyes on this development. meanwhile, a car service called uber is teaming up with home depot to deliver christmas trees on demand as part of a one-day delivery stunt. users will be able to pay $135 to have a tree and a stand brought right to their door. sounds a little expensive. but this one-day event comes up to similar ice cream van and
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kitten cuddling offers over the last few months. anyway, if you had the choice, what would you like delivers on demand? it could be anything you like within reason. join the conversation here on "worldwide exchange." e-mail us,, tweet @cnbcwex or direct to me @rosswestgate. i'll have scripts delivered on demand. it would be fantastic, wouldn't it? meanwhile, ari risrriving this g on the cnbc set was our very own christmas tree which has been very nicely decorated. it doesn't quite compare with the one in rockefeller center. giving us a bit of festive cheer in the studio. it's just a scale issue for comparison. on that. away from christmas, talks of the wto meeting have hit an impasse as india won't budge on
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food subsidies. food security is nonnegotiable. >> less than 24 hours to go and still no deal in sight here at the wto ministerial conference in bali. 12 years after negotiations started on the doha deal, they cannot seem to reach an agreement. the sticking point is still india and concerns about agriculture. they're worried about the four-year peace clause. they want this peace clause to renew automatically until a permanent solution is met between the 159-member countries. the other thing they're worried about is reference prices. they say the wto calculations used prices between 1986 and 1988. they're too low. prices have gone up since then and because of that distortion, it would easily put them over their subsidy cap. they want both of these changes
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earlier today at a press conference. the commerce minister of india said there may not be enough time here in bali to hammer out a deal. >> as i have said, means connected to the permanent. >> what was interesting is sharma positioned himself as a champion of the poor. and it reminded some of a similar situation back in 2008 when india suffered a trade deal and was hailed as a hero of developing nations. >> india speaks for the vast majority of poor people in the developing countries, in the poor countries. india is not alone. >> sharm aa would not give us details on how many were lining up and supporting his decision not to approve the deal. he did say in his estimate it makes up for 75% of the global
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population. it's not what we're hearing here. many countries that traditionally align with india when it comes to agriculture want to see a deal done here, and that includes nigeria, indonesia, china, too, they would like to see something done as would brazil. so we do have india holding out. we're waiting to see if they're going to give in. everyone needs to agree. this is a consensus organization. one holdout means the whole thing goes under. india is under pressure here. the question of whether or not we're going to get a deal done still up in the air. back to you. >> we're getting the clear view of the economic effects from typhoon haiyan in the philipp e philippin philippines. the 3.3% rise in cpi came in at the low end of government estimates and it's still fought well within the central bank's target range. joining us now, regional economist from barclay's in singapore. thanks so much for joining us.
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this was a higher number, but less than the central bank expected. will they look right through it? >> our thought is they're going to look thigh supply side inflation. i think in terms of the numbers for the year as a whole, inflation will be averaging 3%. very comfortably to what the bottom of the inflation target would stand at 3% to 5% for the central bank this year. >> the down side surprise driven by lower than expected food price rises and lower transportation costs, now the government has frozen food pric pric prices. so are these only temporary? >> our sense going into next year, you will see some pick up in food prices. it tends to be seasonal. going into next year, we're expecting inflation to easily average 4.3%, which would be towards the top end of the
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inflation target and we therefore think that the central bank would be hiking basis points into 2014. >> we've got sharp rises in utility prices, as well. there is a view of whether that -- that surely is a crimp on economic activity and on consumers' ability to spend. >> the utility price necessary philippines get adjusted very much with what's happening with global commodity prices. that's not necessarily going to be sustained next year with chinese growth remaining fairly contained. and also remember that we are going to see the fed tapering perhaps in march, which means the dollar is going to strengthen weighing down on commodity prices. >> so another year of underperforming commodities, generally. >> yes, possibly, yes. in terms of philippines, i think those are worth discussing. the economic growth given the impact of the typhoon will be concentrated in q4.
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the house revised down the numbers for 2014 looking at 6.8%. but still fairly strong numbers and, in fact, the second higher in the region after china. >> yeah. is there going to be any benefit from reconstruction? what is the bigger impact, the knockout from the typhoon or on the reconstruction? >> after the typhoon, construction will bounce back strongly as the building activity picks up. so our sense is that growth could easily by about 6.5%. when you have typhoon and national disasters, it has a negative impact on the balance sheet of the country. but given that ggp is a glow concept, a lot of this is not necessarily recorded in the numbers. but the reconstruction is because it's new building activity which would be starting next year. >> thanks so much for joining us. it's been a day of relative
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calm in thailand today. they've been celebrating the king's 86th birthday. anti-government protesters held off their mass demonstrations. in a speech, the thai king urged people to stay united to keep the country stable, but is avoiding tipping his support for either side. pressure is mounting on the ukrainian president. three of ukraine's post soviet presidents have given their support to mass anti-government protesters. this as yanakovich visits china in a bid to seek support from the countries. visiting the ukraine, the german foreign minister also appeared to back government opposition by walking through the heart of protest encampment. he was joined by opposition politicians and the boxing world
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champion italy klitschko. just got data out from ford. we were talking about the mustang earlier. china vex up 47% year on year. that market is still working for them. it could be a hard landing for the flying kangaroo. qantas shares nose dived after the airline issued a profit warning. light demand is fueling jet fuel prices to around a $150 million loss in the first half of its fiscal year as it expects to cut another 1,000 jobs and says it's considered selling off some assets to help fix it. moody's has put qantas on review for a possible downgrade. as far as the agenda in asia tomorrow, a couple of major ipos begin trading. australia's biggest media offering in years, nine network makes its debuts. m&g chemical debuts.
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meanwhile, christine legarde pays a visit. steve liesman has the details of the beige book. >> if federal reserve out with its beige book, the collection of the anecdotes saying the economy continued to expand at a modest to moderate pace as they've described it over the past several months. manufacturing activity came to expand in most districts with gains noted in autos and high tech. manufacturers were open mystic about growth prospects. consumer spending increase in almost all districts at that moderate to modest pace which led to about a 2% rise in the economy over the next few quarters. retailers were cautious according to the base book. sales of autos were modest to strong. some gains in loan demand were noted and some of this supported
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easing of credit standards, which is important. hiring was up moderately in five districts, unchanged in seven. there was difficulty finding qualified workers. we've heard that over the past several beige books and some upward pressure on wages for those qualified workers. there were some declines seen from the federal government shutdown and from sequestration and concerns that fiscal uncertainty could dampen demand in the coming quarters. price inflation was well contained. but employers were concerned about future cost of health care programs. we'll be following this for signs of the outlook for the u.s. economy. back to you. >> that's steve with a breakdown of the beige book. still to come, will santa bring investors a fed tapering treat this christmas? [ imitating car engine ] that's mine. ♪ that's mine. that's mine. ♪ come on, kyle. ♪ [ horn honks ]
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you're watching "worldwide exchange." i'm ross westgate. japan, big spending. they unveil a new stimulus package to help the forthcoming sales tax hike. mario draghi is expected to hold despite the recent drop in inflation. investors will be eyeing the economic projections. fears of christmas fed tapering are reunited after
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strong adp figures. and china's financial institution res warning against trading bitcoins. but the central bank admits that there are risks and individuals could still use the virtual currency. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. a very warm welcome if you've just joined us stateside. welcome to the start of your global trading day here on cnbc and "worldwide exchange." the dow yesterday was down some 25 pointed. the s&p down 2. right now, the call is just above fair value. not by much. around about 7 points on the dow. the nasdaq is around 6 points above fair value after being down from 8 points yesterday and the s&p 500 is just 0.5 point above fair value. we have a lot of central bank meetings in europe today and the employment report tomorrow. right now, the ftse cnbc global 300 represents that flatness and
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caution. it is flat as are european equities two hours into the trading session. the ftse 100 yesterday was down some 52 points. absolutely flat now. the xetra dax is up marginally with the cac 40 up by not much and the ftse mib up 0. 1%. this time yesterday, the ten-year had a yield around 279%. currently a yield of 2.83%. guilt yields very much in focus. we have a bank of england not expecting an awful lot, but the chance george osborne will be presenting his autumn statement to the british parliament. sterling around 1.5363 against the dollar. back down from that 1.6240 two-year high. dollar/yen down at 102.12. we hit 103.70 at the beginning of the week. and euro/dollar around where it has been all week around about this 1.36 mark.
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that's where we stand in european trading. sixuan has the update on what happened in asia today out of singapore. sixuan. >> thank you, ross. asian markets tracked lower ahead of the u.s. jobs report. the dollar/yen added a treshy to japanese exporters. nikkei ended down 1.5%. hong kong listed shares tumbled nearly 5% following steep losses in europe after a profit warning. meanwhile, south korea's kospi extended a five-day losing streak ending down by a modest 1.2%. and australia retreated to a seven-week low after the country posted a bigger than expected trade deficit for the month of october. and we're also watching the telco space. according to the "wall street journal," china mobile and apple finally made a deal after beijing released the long awaited 4g licenses.
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this will allow them for the first time to start to offer network to its 4 million subscribers. apple denied the reports, so we'll keep watching on that front. in the meantime, let's check on these share prices. china mobile added 0.5% today and its xet he china telecom gained 0.25%. china unicom down 1.2% in today's trade. >> thank you for that, sixuan. initial jobless claims are due out at 8:30. also at 8:30, third quarter gdp. we'll see its revisions. many are expecting it to edge higher if anything up 3%. october factory orders come out this morning at 10:00 a.m. now, this data follows
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yesterday's data. u.s. job growth higher than expected in november at 250,000 jobs. expectations will see the creation of around 175,000. the good news, brakes on the u.s. stock markets as fears re-ignited of a taper to the fed's bond buying program and we will be advised of today's data and how that is up. tomorrow on the employment report, joining us is his thoughts, lloyds bank commercial bank in china. >> good morning. >> good to see you. when you combine the adp, the beige book, the decline in the nonmanufacturing ism, what does it point to in the growth of the u.s. economy smp. >> the fed are in something of a quandary. you got a report from the cleveland fed last night talking about what policymakers could do in terms of having boundaries and thresholds particularly with respect to inflation. and this is part of the whole transmission mechanism of
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messages that the fed is trying to get out there. i think what they're trying to say is they don't want the world to think that tapering is the end of the game. >> tapering is not tightening? >> correct. >> two very different things. >> but that's not how the market treated it the first time around. indeed, if you look at the price action, that's not how bond markets are taking it right now. you've got now going the bond rates back to the highs which were cited as one of the reasons that they didn't taper back in the summer. >> the question is, though, does that level -- is it warranted by the economic activity? if it is, it won't matter as much. >> absolutely. but i don't think you have enough clear cut messages to say yes, it is warranted to taper right now. but really, i think as far as the fed is concerned, to get tapering out of the way and have zero consequences for the market, that's what they would do right now. what they want to do is get people focused on the idea that forward guidance is the way forward, that they're not putting rates up for a long
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time, and the threshold to get people thinking they're going to hit relatively quickly. rates are going to stay low for much longer than the markets are prepared to anticipate. >> yeah. yeah. i mean, the fact -- the fear of tapering is always worse than -- >> than the reality. probably when they do it, it will be a buy signal. >> that's what we thought moving into september when it didn't happen. charlie is with us for the hour today. the ecb is presenting new growth and inflation alongside its latest policy decision. in its last survey, the central bank said they expected a slight rise in 2014 and '15 and predicted a return to growth across the eurozone next year. annette is in frankfurt. the big thing is what the pmis are telling us is a sharp divergence in growth between the likes of germany and france. and that growth might be 0.2%.
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how do they deal with that? >> it's a good question. i think they are quite worried about the growing diversion of the eurozone. we had that discussion recently that it doesn't help a lot to look at average acts. we've got data for the eurozone. it doesn't tell you the true story. but the mandate to the look at those aggregates and they will keep on doing so. but there will be, as well, a growing divergence in the governing council. one of my guests today was pointing at the fact that by now, peripheral countries are dominating the governing council. that might explain the surprise move of the ecb during the last governing council meeting and press conference here in frankfurt. going forward, that might mean more easing. the staff projections are likely
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showing us inflation is going down, as well, in 2014 and most likely as well we'll get an inflation figure for 2015. which is far below the ecb's target of on -- below but close to 2%. so most likely we won't hear any more easing today in terms of interest rate cuts. but there might be some tendency or some -- which would be meant to, as well, talk the euro lower, ross, because that is, of course, one of the problems as well here in the eurozone. >> yes. still around the 1.36 level. annette, for now, thank you very much. got anything about the euro? 11.36 against the dollar is up at five-year highs against the yen. >> no. >> absolutely. and, you know, it would be beneficial to periphery countries if the euro was 1.10. but the problem is for the
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eurozone as a whole the balance is basically quite positive. that's why it continues to perform so well. >> is the ecb going to be loser for longer? >> probably. >> in that case, wouldn't the euro weaken? >> yeah, but they tend to respond to one to two-year yields, not five-year yields. >> for draghi today, what's the key? >> i think more of the lpros are coming. whether they come today or not, i'm not sure. a lot of it depends on the forecast. if there is a weakening in the forecast, he will say we did move last month and there remains potential to do more. but what i'd be interested in finding out is what he thinks he still has left to do, what he's
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still got in the ars thenal. there doesn't appear to be a great bit with qe. >> meanwhile, the japanese government unveiled an 18.6 trillion stimulus package. it includes a 5.5 trillion yen in spending measures, charlie. this is to offset the rise in sales tax going from 5% to 8% in april. so we sort of knew that it was coming. the yen has weakened, has brokingbroke i ingen through 100 to the dollar. is it now the funding currency for the world again? >> i don't think it is at this point in time. i think at the moment, the performance, for example, of japanese equities, although they haven't been good for the past couple of days, is attracting a lot of on fund into japan. as a fund currency, i'm not sure the issue is so clear. but you're absolutely right, this is almost a compensatory
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element to the anticipated tax risen. it's not surprising that they do it. because when they hiked the consumption tax in the middle of the 90s, it was disastrous. and you saw a massive slowdown in the economy. and, you know, towards this -- i think almost six consecutive quarters of recession. they then had to go through even more stimulus to create sport. so they're trying to be preemptive. is it going to work? it's hard to say. one would hope so on and certainly the policymakers there seem to have adopted this whatever it takes stance. so if it's not enough, you can assume there will be more. >> when you get the tree? >> probably this weekend. >> this weekend, okay. and do you go out and get it, do you? >> yeah. >> you might be interested in this because the car service uber is teaming up with home depot to deliver christmas trees on demand. it's all part of a one-day
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publicity stupnt. users will be able to pay $135 to have a tree and a stand brought right to their door. this one-day event comes after similar ice cream van and apparent kidden cuddling offers over the last few months. it comes on the day the cnbc studios received its christmas tree. there you go. what would you like to have delivered on demand? get in touch with us., tweet us @cnbcwex or direct to me @rosswestgate. still to come, world heavyweight boxing champion klitchko is emerging as a possible presidential contender in the ukraine. we'll get the latest from kiev. ya know, with new fedex one rate
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recap of the headlines, japan unveils a massive stimulus trying to help ease the pain of the government's expected april sales tax hike. the ecb is expected to keep interest rates on hold. and better adp numbers oust of the u.s. re-ignited december fed tapering, putting pressure
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on asset prices. pressure is also mounting on the ukrainian president. he's currently visiting china in a bid to seek financial support. ukrainian officials are in moscow asking for help there, too. joining us with the latest on the protests in can i ev kiev. aman, what is happening there and how much support are they gathering? >> that standoff continues and a showdown is emerging between the government of president victor yanakovich and the protesters who show no signs on backing down on the demand that he step
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down from power. there was last night perhaps some indication when the deputy prime minister said his party could company snap election toes try and diffuse this politically. more importantly, there are some diplomatic efforts under way. nothing too serious or gaining traction yet. but there are negotiations that could possibly emerge between some of the key european allies including the german foreign minister who is here as well as the russian foreign minister. so there are some movements on the diplomatic or political front that could show some silver lining on the horizon. as you mentioned, right now the government seems to have won a major political victory after it survived a no confidence vote in parliament on tuesday. so certainly from their perspective and the supporters of the president, there is no
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need for them to back down just yet. but despite that, there is, as we have been saying, a growing demand by protesters here who have been braving the cold weather, been braving the frigid temperatures and persistent in their nand that the president and his government step down from power. three former ukrainian presidents have thrown their weight behind the protesters and that certainly has given them more momentum, so to speak. ross. >> thank you very much for that. still to come, does detroit's bankruptcy ruling means a big win for the municipal bond markets? we'll have the latest after the break. as we do so, a reminer where european equities are trading at the moment. pretty even stevens between decliners and advancers. i love having a free checked bag
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we have numbers out from canada's cibc. they've announced a fourth quarter share of $2.05 a share, the adjusted fourth quarter profit beating the thompson reuters analyst estimates for that. and they've talked about the retail and business banking
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reporting a net income of $2.5 billion for 2013. the wealth management unit of 388 million in 2013. but cibc beating the street at the moment with its latest fourth quarter profit. meanwhile, china's central bank has warned of the risk of using bitcoin. in a statement on its website, they said while the currency does not pose a threat to china's financial system, it does carry dangers. the central bank has offered financial institutions not to offer opportunities with regard to bitcoin. elsewhere, the bankruptcy ruling for detroit could be a big win for the municipal bond market. following a federal judge ruling allowing the down trodden metropolis to file for bankruptcy, the ruling could set a precedent for other cities
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such as chicago, philadelphia and los angeles that are suffering from the rising cost of pensions, causing spending cuts in area like public schools and police departments. joining us with his thoughts, lawrence gotlieb. lawrence, good to see you. charlie is with us in the studio, as well. do you see this decision meaning what i just read out, that, okay, pension holders will be below bondholders? >> well, it's a little early to know that. we know that we have the appropriate forum for taking these issues on. chapter nine has proved to be a valuable resource for places like jefferson county with complex problems. here we have more complex problems. it is too early to know the relative priority of claims. if it were that easy, clearly,
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there would be more activity in the markets, etcetera. it will be interesting. there are complex issues and important issues that we have to take on. >> what is the most important issue? >> well, here in detroit, we have a shrinking of a tax base, a shrinking of an economic base, and the government and its services have not shrunk around it. and frankly, that is going to be a difficult and painful process for some. the claim holders, whether they be pension claim holders, general obligation bondholders, etcetera, are but one facet of this problem. we need to take on the more serious issues here of a right sizing, a recall bragz of government and its services on behalf of the people. that will be unprecedented in its size. chapter nine will be tested here. much will be learned and investors need to be focused
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here. not to say that every precedent that comes out of this will apply to the next, be that puerto rico, which we know can't file for chapter nine or whatever comes next. but this is clearly important, important times in development of this body of law and understanding how investors relate to one another vis-a-vis their claims against this bankrupt debtor, the city of detroit. >> i mean, this comes as we've seen a huge new investment in mu ni bonds from the likes of hedge funds. those who support this say, look, this will lead to greater trading, more transparency bond pricing and sort of a greater discipline on government. do you believe that and how are those investors going to react to detroit? >> well, the $4 trillion municipal bond market is really
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an interesting amalgamation of different types of investors. one note that we are all aware of is that there is less participation by sophisticated institutional investors who don't have a benefit from the tax exemption that we enjoy here against u.s. federal state and local taxes. so as these credits become stressed and distressed, and these situations emerge, firms like ours, other firms, become interested in the relative value of these bonds. so it's in these times and others, frankly, that we welcome a liquidity, the increased liquidity and the increased participation of professional investors who have a sense of how to navigate these waters. >> briefly, lawrence, is puerto
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rico too big to fail? >> i wish it were that simple. puerto rico has an enormous number of issues to confront. and frankly, dwarfs detroit by comparison in size. you're looking at $70 billion worth of issuance that is eye bi ubiquitously held. puerto rico is a complex problem, dwarfing detroit by size and magnitude. >> lawrence, thank you for joining us this morning. >> i appreciate it. >> we'll take a short break. still to come, it is a case of unhappy meals. can the protests make a u.s. minimum wage more or less likely? [ male announcer ] how can power consumption in china,
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you're watching "worldwide exchange." i'm ross westgate. a recap of the headlines, stocks slump ahead of u.s. jobs data as fears of tapering have been reignited post the adp numbers. hey, big spender. japan unveils another massive economic package including more than $50 billion in spend to go try and offset the forthcoming sales tax hike. no big positions for the ecb. mario draghi will hold fire tt today despite the drop in inflation.
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investors eyeing his staff economic projections. and china's financial institutions are warned against trading bitcoins, but the central bank admits while there are risks, individuals can still use the virtual currency. sgra you're watching "worldwide exchange," bringing us business news from around the globe. good morning. if you've just joined us stateside here on "worldwide exchange," after yesterday's equity markets, we're not decided either way on the open right now. the dow is currently on fair value, the nasdaq is above fair value and the s&p 500 is trading on fair value. quite an event risk. more data today in the united states. we've got central bank meetings in europe, particularly from the ecb and the bank of england.
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ftse cnbc global 300 is also flat. the ftse 100 is down one point, the xetra dax is up 6 points, the cac 40 down 1 point and the ftse mib is down 0.1% at the moment. what are investors to do with all this event, with all this economic data, as well? here is a recap of what some of the commentators today on cnbc have told us. >> there is huge controversy over the future of bitcoin and derivatives of bitcoin. we're having closer coming out. my thesis has always been that the central banks, whether it be pboc in china, whether it be the federal reserve, have to be very anxious about losing control over currency management. if bitcoin becomes a huge success, is the federal reserve going to quietly go along with that? i doubt it.
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>> the economic outperformance, but at the same time, they look around the world, not much is doing too well elsewhere. so maybe they just want to hold on to sterling. for now, i still like euro/sterling down side. >> we have noticed a very significant drive of sterling, sending it along the cheapest currency. so for those who are trying a more value driven investment strategy is a nice call. >> that's the thoughts and some of the conversations we've had today. mean wile, fast food workers around the u.s. are set to walk out of their restaurants today. we'll have more on that in just a second.
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general growth properties will replace molex on the s&p 500 after close on december 9th. general growth popped 5% in after hours trading on the anounsment. and the fight for jobs in spain has seen 20,000 people apply for just 400 openings at ikea. the retailer says the unexpected surge of applicants led to its computer systems crashing. the online applications were for jobs at a store to be opened outside sa lens valencia next y. and fast food workers in over 100 u.s. cities are set to walk out of their stores today in what could be the biggest effort yesterday to push for higher pay. a similar strike was held in august in order to draw attention to living on $7.25 an
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hour, the federal minimum wage. cnbc asking a spokesperson to attend today, but it did send a statement saying the restaurant industry was one of the few in the u.s. continuing to create jobs. phil joins us now from new york. charlie diebold is still with me, as well. charlie, what are the increases in the national minimum wage? the u.s. is right now in the middle of one of the biggest pushes to raise wages that i've seen in 20 years working in this field. president obama has called for a $10 minimum wage hike. but, you know, given the gridlock in washington, the states are starting to act. california approved a $10
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minimum wage hike and no sooner had that been inked than a consebive placed it on the ballot to go to $12. the high cost cities are pushing for even higher wages. voters in sea-tac, washington, approved a $15 wage. now cities like chicago and new york are calling for wages of similar levels. i think what's driving this is what president obama called the defining challenge of our time in this economics talk yesterday. the fact is, the restaurant industry noted that the majority of the jobs our economy is creating are in these low payment fields like restaurant and retail. these aren't team jobs if they ever were. now tens of millions of adult americans spend their time cycling through these careers, these jobs. at $9 an hour, they're not sustainable. so what the fast food workers are calling for is a raise in pay and sit down with the
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industry for negotiationing a plan to transition to a higher wage, a higher productivity business model. >> how does the industry afford it? at the end of the day, higher wages is going to mean -- i mean, it's going to feed through and we're going to get higher cost of food, aren't we? >> so the road map for how to do this is what's happened with other similar industries in the u.s. in the big cities, they've been given more money through a similar model. there is a huge amount of revenue in the restaurant industry, but it's being skimmed off on the corporate chains. just trimming that back by, say, 5% together with modest price adjustments and the very real efficiency cage you get from higher wages, leading companies
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like costco that pay higher wages have radically lower employment and recruitment costs. that reduce he feed charges and the efficiency savings go a long way towards hiring wages. leading business school analysts have shown that this higher productivity model can actually lead to comparable or greater productivity. retail, costco, trader joes, operating xet hely, delivering very low cost quality goods and services and paying much higher wages and benefits. in fact, there are places in america where mcdonald's and bugger king are doing this. places like the oil boom rings in north dakota where labor markets are tight. >> can you explain to me, paul, why does it in and of itself a higher wage mean greater efficiency. in and of itself, why does one
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equal the other? >> so the well recognized efficiency gaines from higher wages are reduced employee turnover recruitment and retention costs. it's actually surprisingly expensive to replace even a $9 an hour worker. it can cost $2,000, $3,000 a higher. if you are turning to your workforce with it being replaced each year, those are major costs. the high road chains that pay higher wages have much lower costs and they also find -- see that they enjoy the higher curb -- payroll dollar sales and profitability than companies like mcdonald's and walmart. >> paul, thanks for that. a quick reaction from you. look, we know that corporates have taken the greatest share of income out of the economy, right, at the expense of workers. but how much can we take on wages before we get the
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inflation problem that we've been worrying about? >> well, and to me, that's what i hear sort of the macro story from that around the individual issues is that if you start to get this big jump in wages, see through. now hab that just lowers corporate profit margins. maybe they can absorb it. but one would think that the amount of income that gets spent by the people that work in these institutions is virtually all of their income. one, that sounds crazy, it increases economic activity, but it does increase tin flagzary risk. that to me is the issue here. at the moment, we have a fairly benign global inflation story and the u.s. is almost the leader in the packing as far as that's concerned, that inflation is very low there. something like this, if i was at the federal reserve would start to get me worried. maybe not for 2014, but certainly for 2015 that you could see quite a strong surge in inflation. >> thank you for now, charlie.
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futures at the moment, pretty flat ahead of the open later today. when we come back, we'll get into the s&p 500 index checkup. stick with innovation. stick with power. stick with technology. get the new flexcare platinum from philips sonicare and save now. philips sonicare. yep. got all the cozies. [ grandma ] with new fedex one rate, i could fill a box and ship it for one flat rate. so i knit until it was full. you'd be crazy not to. is that nana?
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a recap of the headlines, japan unveils a massive stimulus plan to help ease the pain of the government's expected april sales tax hike.
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even as deflation fears amount in europe, the ecb is expected to keep interest rates on hold. and better adp numbers out of the u.s. has re-ignited the tapering fears that put pressure on the equity markets. right now, futures are indicating a fairly flat start. we like the headline music. now we've got a shake up in the s&p 500 index as being announced today. what's going to happen? there's only one person to ask. kayla tousche has the details. morning, kayla. >> good morning to you, ross. general growth properties is the second biggest mall owner here in the u.s. it's set to join the s&p 500. it will reflakes electronics company molex. will change will take place after december 9th.
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general growth up 5% after the announcement. the chicago-based company has a market value of about $5.8 billion by owning, developing and redeveloping malls around the country. rumors have been swirling around wall street all day that facebook would get that coveted stock on the s&p 500. though rumors sent facebook stock higher on the day's trading session. now, gdp interestingly was in bankruptcy. a bunch of hedge funds rushed into it and it was up 1,000%. for now, i'll send it back to you. >> kayla, thank you for that. have a good -- actually, kayla, our christmas tree just arrived here. when do you go christmas tree hunting? >> you know, i haven't yet, ross, but the car company, uber, i'm not sure if that's made it to london, but it's this on demand app where they can send cars to you. today they are doing a promo
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where they will for $135 send a christmas tree to you. i'm thinking it might be the day to bite the bullet on that. >> is that quite expensive, do you reckon? 135 bucks? >> well, i imagine that it's relatively close to what the actual tree would cost you, so i think the car service gets baked into that. >> i'd be happy if they decorated it, as well. although, you know, my children wouldn't be so happy. >> i'll keep you posted. >> thanks for that, kayla. good luck with your tree hunting, whenever that is. meanwhile, still to come on the show, after the break we'll head to westminster for a full preview of george osborne's full statement. see you in a few moments. a free checked bag i log with my united mileageplus explorer card. i've saved $75 in checked bag fees. [ delavane ] priority boarding is really important to us. you can just get on the plane and relax. [ julian ] having a card that doesn't charge you foreign transaction fees saves me a ton of money. [ delavane ] we can go to any country and spend money the way we would in the u.s. when i spend money on this card, i can see brazil in my future.
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today on the british chancellor that george osborne. but there may not be any big giveaways helia is outside westminster with lord digby joins, a man who knows a thing or two about what politicians should be doing with our money. h helia. >> good morning, ross. we're waiting for the chancellor to stand up. you've got the deficit coming down, public borrowing finally coming down, as well. and even a budget surplus on the horizon. but really, at the heart of the chancellor's message today is going to be continued austerity. and that will mean pushing out the pensionable age, a further squeeze on public spending, because the message here is going to be about fixing the roof even when the sun is shining. and the sun is shining. but if i go out now to digby jones, a man who wrote the book
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"fixing "fixing britain," a former businessman yourself, the government has it right. they are fixing it, aren't they? >> yes, it is being fixed. i have to say, it's an enormous effort by a load of people. business creates the job, business creates the profits, and a lot from the public sector. taking a lot of job hits, having to do more with less. that's a massive change in britain and i actually applaud the whole nation for this. but i think the chancellor is getting this right today. if what we're hearing is getting it right today, it's not this, it's this, but let's just keep it tight to get some money in the tommy tank. make sure that we actually put a bit by this time, ready for the next one. and at the same time, of course, take some of the big decisions. a 25-year-old today cannot expect to retire at 65.
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70 is nothing to a 25-year-old. in fact, a 25-year-old probably expects to live until they're 90, 95. this is not a british issue, it's an american issue, a german issue, a japanese issue, people can't expect to have the states pay pensions as early as before. so i hope he takes the opportunity to do some of the big stuff when he has a bit more money in the tank. >> and obviously that's the welfare reform that the chancellor is expected to talk about. in the past, you have been fairly critical about the political class and their relationship with the business world. we saw the prime minister in china this week. he thinks that relationship has improved and how important was the prime minister's mission? >> yes. you see, i think that place there is -- one thing they don't
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get is business. they're all about spending it, increase spending it, delay spending it, no one ever talks about earning the stuff. and last, this week, we've had a prime minister who has even delayed what we're all here for today by 24 hours so he could make the most to a visit to china. that pleased the chinese. that will very very important to britain. they're investing more in the 18 months in this country than in the last ten years, creating jobs in britain. so i'm really pleased. he didn't just go in the high falutent way that prime ministers do. he talked quite a few ministers so that the different parts of the economy could get moving and talking to the chinese. and he talked to 130 business people. he really, big hats off to cameron. he's done it well. and i just hope that liberal politicians, labor politicians, i hope they all get it.
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which if you don't get this country working hard in the private sector, generating jobs, making money, that place will have nothing to spend. >> lord digby, you've come out and said that europe really needs reform and if it doesn't reform, we should get out. are you still sticking by that? >> yes. you see, this is not a british issue in my view. this isn't british exceptionalism. oh, do me a favor. this is for a kid in spain. this is for a kid in greece. where 50% of the under 25 are out of work. this is about taking 520 million people, living in peace, which is fabulous, and actually saying, let's take on asia and america. let's create an environment where we can compete in the world. marching valiantly towards 1970 is no way of doing that. try and get the people out of work into what to do that, massive reform. why are we giving more money to french farmers than we do to
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universities? that is the future. i want to stay in, but i want to stay in a reformed europe. if they won't reform big time, frankly, we would be better out. >> thank you very much, lord digby jones, a man never to sit on the front. we'll be hearing from the chancellor soon and the labor party chancellor, as well. >> yes. i don't want to be the person digby hits on, but it's good to see him. thanks for that, helia. you can tell him that, by the way. we get along quite well. we have got coverage of the chancellor's statement coming up in 20 minutes. the viewers in europe which, of course, does include the uk i know some people think the uk isn't in europe, but it is. it says so on my passport. on the agenda today, we have an issue of jobless claims set to release at 8:30. it's a good preview of what might come tomorrow with the employment report. also at 8:30, third quarter gdp. then expecting it to go as high as 3%. and october factory orders come
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out this morning at 10:00. futures are pretty flat at the moment. charlie, with all this data that we've got coming out right now, what is your current forecast for when tapering begins and the impact from where yields go in the meantime? >> i mean, our best guess is that it actually happens in march. we're very close to also saying january, shall we say. we don't think the data has been quite strong enough. we haven't got enough clean data post the budget issues and the shutdown to say, yeah, everything is rocking along. as you pointed out earlier, this adp versus the ifm, there isn't such a clear message that they need to do it right now. but nonetheless, they're going to do it and i think in a way that's what the fed are trying to do. they're trying to move the market debate on from tapering. >> charlie, thank you very much. charlie did i ebold from lloyds
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bank commercial banking. that's it. viewers in europe will stay tuned here. viewers in the united states and elsewhere, "squawk box" coming up for you. whatever happens, we hope you have a profitable day. good-bye for now.
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good morning. among our top stories, ringing up retail. some of the nation's biggest stores will report november sales today. that does include black friday. so we'll get a pretty good look. and breaking economic news in europe, the final ecb decision of the year. here at home, we have weekly jobless claims and a revision to third quarter gdp, which was pretty good as you recall. plus, big news in the tech world. apple has reportedly signed a long awaited deal with china mobile. it is thursday, december 5th, 2013. i think the tree might be left
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now. "squawk box" begins right now. good morning, everybody. welcome to "squawk box" here on cnbc. there it is. in all its glory, that's the tree at rockefeller center. it was lit last night and it is a spectacular sight. i'm becky quick along with joe kernen. andrew ross sorkin continues off today. he's off this week for vacation. let's get right to this morning's agenda. on the economic front, we have weekly jobless claims. they are expected to rise slightly to 318,000. in the meantime, a revision to gdp is seen showing the economy grew if a pate of 3.2%. both of those reports will be out at 8:30 eastern time. at 10:00, look for october factory orders. in europe we'll get an interest rate decision from the bank of england at about 7:00 eastern time and one from the ecb at about 7:45. the european central bank is


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