tv Worldwide Exchange CNBC December 30, 2013 4:00am-6:01am EST
hello. you're watching "worldwide exchange." i'm russ westgate. vladimir putin ordered security to be tightened across russia after a second blast rips across the city killing 14 people in volgograd. shares in monteith are down at the bottom of the italian market. they want to raise 3 billion euros in capital next month. china calls for an emergency mechanism to control local debt. they say some regions show local
risk. it's controllable. and the german legend michael schumacher remains in critical condition after suffering head injuries in a skiing accident in france. doctors are due to give an update on his health in an hour. >> announcer: you're watching worldwide exchange. >> hope you had a good christmas break. if you're joining us this morning or this evening in asia. e-mail us email@example.com. a second explosion in the russian city of volgograd killed 14 people. a male suicide bomber carried out the attack on a trolly bus. on sunday afternoon another suicide bomb killed another 16
penal at t people at the train station. vladimir putin has vowed to tighten security across the country. seven time world champion michael schumacher is in critical condition after injuring his head in the swiss alps. he was in a coma and he underwent surgery. he was wearing a helmet when he hit his head on a rock. doctors are due to give an update on his condition at 10:00 gmt. 2013 was another big year for world events. here's a look back at some of the highs and low points over the last 12 months. >> it appears that there were two explosions. boston police are confirming there was a major incident somewhere near the finish line. >> this is something that's not our place to decide.
the public needs to decide whether these programs or policies are right or wrong. >> just absolute devastation in the areas that have been hit the hardest and we're talking about the provinces around lata in central philippines. and joining us for the first part of the program today, ricardo barberi. thank you for joining us. those are highlights of some of the sort of geopolitical events. in a way though, 2013 was the year that didn't bark for
geopolitics. >> yes. >> are you sanguine for 2014? >> i'm generally on pptimistic. you never know what can happen next. i think in terms of geopolitical risks, there have been signs between the u.s. and iran, for example. the syrian crisis didn't last long, didn't lead to a sharp rise in oil prices. if anything, prices have been quite stable recently. >> oil is the one market where of course this gets shown up in geo policy and energy prices more than any other. what are you forecasting for oil next year? >> well, my expectation -- >> no. >> but my assumption is that we
stay at levels probably slightly $100 a barrel. that's the assumption i made in my focus. i don't think we'll see a sharp decline for now. there will be a cap in global demand for oil but at the same time we have a stronger supply, particularly in the u.s., which was unexpected until six years ago and actually continues to surprise on the up side. the market is expecting a decline over the coming months so the curve -- the futures curve is inverted. that means we should have a beneficial impact on inflation in industrialized countries. i think probably output in the u.s. could surprise -- >> the u.s. story has been a story that could surprise both in terms of shale gas and shale oil as well. how much does it change when the u.s. is no longer -- becomes an exporter and becomes an exporter of oil and that might change the
dynamics. we might see an extraordinary thing where the dollar and oil are no longer inversely correlated. >> well, the interesting thing is so far it hasn't had a significant impact on the dollar. it improves obviously the overall trade ball and the current count, but it's not been a big thing. at the moment the currencies are driven by a section and expectations on policy than by current account developments and i think on the nonoil balance the u.s. still has a substantial deficit and that's probably what catches market attention, but i think medium term these shale revolution is something that is extremely positive for the u.s. economy. >> and provided an enormous competitive advantage to particularly european countries. german companies in particular are talking about the competitive disadvantage they're
at, not only in terms of energy costs but also in some ways one can talk about currency as well. there's a lot of bleeding from german companies about strength of the euro. >> i think it's one of the interesting questions about 2014 is if at some point we see a turning point in the dollar, which we did see briefly in 2013 and then was reversed, and we are ending the year with a weak dollar again, at least against the majors, well, against the euro in particular, so europe at the moment is bearing the brunt of all of these global adjustments. hopefully in 2014 we see a bit of bottoming out in the dollar, particularly going into the second half of the year, and that's one of the drivers of my own focus for the european economy. it's where i see potentially some up side over the cost of 2014 and probably more importantly in 2015.
>> ricardo, thanks so much indeed for that. you'll stick around. let's bring you up to speed with where we are with global equity markets right now. let's take a look at the dow jones stock 600, we've just about weighted to the up side. around about 6 to 4. advancers currently outpacing decliners at the moment. european stocks up near fresh five-year highs. ftse 300 is up 15%. pretty flat at the moment and volume, as you might expect, is extremely light at this particular moment. the ftse 100 after another week of gains last week, maybe we can put the prices up for you, there we go. this is where we stand. pretty flat. just up a point as is the xetra dax, as is the cac quarante. we've had four straight monthly gains for u.s. equities. let's show you where we stand with currency markets. what have we got next?
monte paschi is voting to hold off until mid may. it needs the capital to repay its bailout from the italian state and to avoid national lieization. they wanted the capital hike in january. they suggest the chairman could resign over the issue. cnbc caught up with the chairman after the meeting and asked him about the bank's future after delay of the capital hike. >> the future is uncertain. we were sure that we were able to increase it, which is quite important to the bank in terms of capital position. now we have the market so shall we see what the market will bring to us. we have to recreate the
consultant in anticipation. >> recapping the asian markets for you. one of the big bits of data, not much data, we have china pmis. ahead of that, shanghai down .8 of 1%. the nikkei has had another storming year. the hang seng is flat and the s&p sx is just up .6%. the aussie dollar has been one of the worst performing currencies down at 50%. more on that in a second. we keep our eyes though on where we stand with treasury yields. it sets the global benchmark cost of money of course. ten year treasury yields, 3.003%. over 3%. we hit that over friday. the highest in over two years. gilt yields over 3 perce%. in january of this year yield's down there at 1.8%. we've had, in fact, the third
worst year for treasuries in terms of selloff since 1973. now on the currency markets, dollar yen is at 105.33. we've been as low as 105.41. plenty more to come on that. euro dollar, 137.45. we got to friday 138.94, which is about a 26-month high. sterling dollar, 164.89 after also being up as high as 165.75. that's the highest we've been since august of 2011. as i mentioned, the aussie being down at three-year lows against the green back as well. meanwhile, france's controversial millionaire tax is getting the green light. we'll get the details on who is due to pay up coming up after the break. before we go, here are steve leaseman's predictions over the macro trends in the course of 2014.
>> my big call for 2014 is si synchronized global growth. we haven't had a year since 2005. 2014 could be that year with the crisis ebbing in europe, u.s. fiscal and japan central bank opening up the throttle, there's a decent chance from one of the big three since the crisis began. all of that means better domestic growth and global growth will keep the fed on track to end qe in 2014. it will do all it can to get out of the program without a spike in interest rates and a sharp fall in stock market. so it's going to lean heavily on guidance that rates be kept low through 2014 and even into 2015. inflation could be a new worry next year. it's unclear if we'll have actual inflation but it's logical it will be a concern for markets. that will present a challenge for the fed. if wages and commodities rise, the central bank could have to lean heavily against criticism that it's risking inflation.
corporate news, there's a workshop on one of swatch's parts makers. it couldn't quantify the amount of damage done during the fire and whether or not it will interfere with production. shares in swatch are down 130%. danish km karlsberg is buying china's company and is trading up. in chongqing beer. the private equity firm is investing $215 million in the shoe maker crocks which would give it a 13% stake. blackstone will receive preferred stock. crocks also has announced that the ceo will retire in april and plans to step down from the board. crocs sales are down 2% in the third quarter and expects fourth
quarter numbers to be at the low end be of estimates. shares in crocs currently up 2 point be point 4% in frankfurt. we bo like you would like you t there was a questionable trend you would like to see changed. european central banks will stay low and could be cut lower. we asked stefan if he thinks there will be fewer european assets over the coming year. >> we're being very supportive. we don't think the negative rate, for instance, is very likely. we would argue along the line of the north korean that deflation is a race but it is not the central case so you're likely to see all the action from the ecb but only if inflation goes down much further than what we expect.
so i think we're very much wait and see for the time being. i do not expect any big stay from the ecb in the future. next year will be different. they will probably need to bridge the end of the three year euro. you'll see another euro at some point. in the future i don't think there will be any big surprise from this. >> so where will investors in europe be taking their direction from? >> well, from our point of view you have a recovery and if you have a recovery -- very slow one. >> i was going to say, pretty -- i mean, france it looks like it could be back in recession. >> france was back in recession, but if you look at lead indicator, they are clearly above 50 for the pmi, etc. we do think there is a recovery in europe for the time being. that's also why i don't think the ecb needs to do much in addition to what they have done already. so from our point of view, we still believe that the stock market will continue to rally on the back of the european
recovery, the u.s. recovery and yen. so we still like european equities for the time being. >> okay. it's an interesting point, this recovery. third quarter was .10% growth. >> yeah. >> i get the marginal rate is important, the marginal rate of change. >> i think there have been two step. the first step is we advise to go long european equity at the very beginning of july. the reason was we thought they could restabilize and what was surprise was very, very low outcome. so you had this rally and if you look, the rally was only down on the p's because the earning has not progressed. gross rate is very weak. basically it was a risk rally. people were pricing on negative scenario. scenario is mediocre. you're happy. now is not enough. if you want to further rally because europe is more or less fair value in our model.
you need appropriation of earnings and then you need appropriation of gdp at some point in the future and that's the bet. and i agree that q3 was not terrific to say the least but we do believe that when the -- >> the future of earnings are coming from? >> we think next year earning would start to improve because we have a 1.1 points in europe. 1.1 for next year. not great. mediocre number. if i give you 1.1 with the purchasing leverage of the company that's enough to generate some earning momentum. that's the bet. i think the risk rally is down. you need earning. that's the bet you have to make on europe. >> stefan there. with me is ricardo barberi. do you agree with what stefan is saying? >> what he said is very sensible but i see risks that something
will -- something more will be done by the ecb. my forecast for the ecb refinancing rate is that it will be cut again to 10 basis points. >> what will be the reason that they give for that? >> well, the continuing high level of unemployment and obviously the ecb, as you know, rarely mentions unemployment but the overall level of economic activity still being very weak, you know, having two quarters of growth respectively or .3 or 0.1 simply means you are kind of bouncing off the bottom, but it's not really the kind of growth we want to see. you know, the unemployment rate, although definitions differ. >> i suppose, a lot of money. this is the point, sir, a lot of money has gone into europe because we've gone from no growth to a very slim rate of growth. >> yes. >> it's huge expectations that
there is a recovery underway, that earnings are going to pick up. it seems to me, hard to justify but, you know, what do i know? >> yes, well, to some extent european companies are global. in fact, german companies have been performing quite well. the dax, i mean the german index given how well they're down on the export side. you don't need necessarily a lot of domestic growth to justify the market. the equity markets have rallied -- sorry, the u.s. markets. so there is some catching up, particularly in the weaker economies. so if you have a measure of economic growth in the lives of italy and spain, those markets could potentially double over the coming years and just catch up, a partial catchup with the rest of europe, but i would say one thing that i believe about the outlook is if you have
relatively benign growth forecast for the european economy for next year, you must be assuming that the euro weakens against the dollar or otherwise you have to assume that the ecb will do more and also that more will happen on the fiscal front and that's my assumption. i think initially we're not getting much support from -- >> when you say more will be done on the fiscal front, what do you mean specifically? more consolidation, more spending, more stimulus, what? >> a bit more accommodation compared to existing plans. what we saw this year is that the original plans were diluted, although with different excuses, but the reality is most countries delayed fiscal targets. i think we need something like that to happen over the coming years, hopefully in a better way from a quantitative point of view, meaning putting more emphasis on economic reforms, more emphasis on investment and
being a bit harder in -- you know, more determined in cutting government expenditures in the area of current government expenditure. not investment. >> all right. in terms of reforms, on this story, france's millionaire tax has been given the constitutional green light. president francois hollande put a tax in. the president does have the power to overthrow the law. surely, ricardo, france is the biggest worry in the eurozone. it could easily be in recession for the fourth quarter. >> definitely very slow growth. i must say it's been probably the most difficult economy to forecast this past year based on the available indicators. i think the economy in q4 will
grow slightly, say 0.1% quarter on quarter so i'm not that pessimistic, however, there's no question in europe it's the weakest economy and there are more tax hikes to come and so there's a reason that 2014 still starts -- >> your previous answer you talk about the structural reforms. do you see any sign that france will implement any of the reforms you -- >> well, obviously we like to see market re-enter reforms. even what france has done in terms of reducing labor costs is a measure that's based on creating incentives to hire more workers than reduction in payroll tax effectively, right? that's what they did. so there's still a very centrally planned approach to things. it's not the kind of reform we would like to see to revitalize
the economy. even this story about the income tax on the highest earners is appealing in terms of, you know, the message, we are trying to distribute the burden. the reach should have more, but that is always the case. >> doesn't help investors, does it? >> exactly. that is always the case, that you have a progressive system of personal income tax. there's also wealth tax in france. the message they send to people like ceos, high earners in general has been get out of france. and i don't think it helps -- actually, i think european countries, particularly those in eurozone, would be well advised to try and attract the high earners, to try and attract certain industries that have been penalized like our industry, the financial services industry. it still has potential to create jobs or at least to dislocate other parts of europe, for
example. i'm surprised that no country in europe has the political guts to say now we are actually targeting this sector to attract it to our country. >> ricardo, stick around. the obama administration says more than 1.1 million people have signed up for health insurance through the government's website. the overwhelming majority have come this month. experts say the enrollment should be over 2 million once the states report their numbers. that would be short of the goal of 3.3 million by december 31st. righters suggest the white house is being pushed to hire a ceo to run the federal insurance exchange. that person would be responsible for roles in technology as well as coordinating with insurers and state regulators. the administration says the idea isn't being considered. we'll take a short break. still to come, underground nuclear tests and an execution. we'll look at north korea's moves that had the rest of the
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year. bond markets, yields are higher. ten year treasury yields above 3% as are ten year gilt yields. they hit the levels on friday and they've maintained this morning. on the currency markets, dollar yen is down at a five-year low. 105.41 is what we hit overnight. we're currently at 105.28. 138.94 on friday. we were at 137.40. sterling, below 165. we hit the highs as well 1.6577. a second explosion in the russian city of volgograd has killed 14 people. a male suicide bomber carried out the attack on a trolly bus. on sunday afternoon another suicide bomber killed 16 at the city's train station. these attacks come just two months before the winter
olympics in sochi. the russian president vladimir putin has vowed to tighten the security across the country. jim accedea is in the country. >> reporter: a major rail and bus hub for the city that you would normally pass through on your way to or from sochi, investigators have issued a statement now saying that this morning's bus bomb was carried out by a male suicide bomber. no one or group has yet claimed responsibility for either today's or sunday's attacks which have now killed at least 30 and wounded more than 60 according to russian investigators, but the strong suspicion, of course, is that this is the work of islamist insurgents from the area in southern russia and people are extremely upset. they're terrified in volgograd, a city of over 1 million. today there are reports that residents are simply staying inside. they're too afraid to go out now
and go about their daily lives. police are calling these two attacks acts of terror and are connecting them to a publica peel. you recall just several months ago this was made by the chechnyian warlord, a man on the u.s. list of terrorists, an appeal to his men to kill civilians and upset the winter sochi olympics. that's an event that vladimir putin has staked his prestige and reputation on. this latest wave, getting very close to so he have i. volgograd only 400 miles. another car bombing, 170 miles from sochi. russian people are worried. vladimir putin and his security forces are extremely worried as well. he's deployed some 40,000, special forces, police and agents, around sochi to make it as safe as possible, but the millitents have shown that they
can strike elsewhere, they can strike often and at will. back to you. >> jim aceda, that latest report from moscow. they're voting against the plans to raise more capital. they have been down. they're currently up at 1.7% in milan trading. short coming and going on local government debt in china has risen to a staggering 17.9 trillion u.n. this is accord to go a new order of figures up to the end of june. chinese state auditor says some regions are showing risks but current levels of liabilities are controllable. he's called for an emergency mechanism to prevent debt risks. ricardo, how important is the chinese work? we know the chinese economy is very, very important. the question is is what you think it's going to deliver for us this year, how it plays in. >> our expectation is that the growth rate will be close to what the authorities are
seeking. a bit slower in recent years, around 7.5%. we don't expect these issues. local debt will have a major effect on economic growth. that has always been, as far as i'm concerned, one of the question marks that i've had in mind because we know relatively more about the national debt, sort of the debt of the national governments, much less about the workings of the financing of the regional governments so that, of course, remains two of the gray areas that one can worry about. i would say in general in terms of the economic repercussions, when china slows, of course you have slower foreign market growth for european exporters, that tends to have a relatively more significant impact on germany because germany is more successful in penetrating the
chinese market but also as we've seen in recent months, if china slows, commodity prices stabilize or decline and that actually is a positive term of trade effect for the industrialized economies, particularly europe which is an important area. so it's not all negative in terms of how it affects europe, i think it actually has a rebalancing effect to the extent that it affects germany relatively more than the other european countries. >> steve, we saw this in steve liesman's report earlier. he said his call is synchronized global growth. he made the point, we haven't had a year without at least one quarter of negative growth from either japan, u.s. and europe since 2005. so is 2014 going to be the year where we don't have a quarter of negative growth for any of those? >> well, that is the baseline forecast, that what seems to be the most likely scenario.
my own scenario for europe is that the eurozone slowly accelerates from a weak q4 in 2013, the growth of 0.2 to a slightly higher growth raise of 0.23 in q1. on average i'm not far from the consensus. i think the average growth rate would be 1.1. i'm more optimistic about the u.k. clearly more dynamic trend in the economy which has now been confirmed by the data that we have through to, you know, q3. for the u.k. i think we move from 1.5 average growth this year to 2.7 next year, which is a pretty decent growth rate. so the answer to your question is probably yes. of course, that is net of any unforeseen shocks that we may have as we did two years ago when we had the unexpected -- well, almost three years now,
the japanese earthquake. right. e-mails, documents show competitive pressure may have pushed them to ramp up their hiring of china's elite families. they've opened up a bribery expansion but have expanded it to include hiring practices of others including citigroup and questioned d credit suisse. it stepped up efforts in 2009 after losing a lucrative business deal to deutsch. jpmorgan hasn't been accused of any wrongdoing yet. western tensions in north korea was an ongoing story in 2013. it began with reports that the nation had conducted underground nuclear test. kim jong-un's excuse of his uncle for treason and what the key risks are for the nation in the coming year. >> north korea is obviously a difficult place to understand so overall what we would say is we
just need to be cautious. at the end of the day they live literally in their own world. they're often referred to as the hermit kingdom. we can't predict what their behaviors will be. the execution of his uncle shows you literally anything can happen. with north korea the key thing is to remain vigilant, have no assumptions and above all remain calm. >> yeah. in terms of -- i mean, you're saying in your notes china's already characterized this as an eternal affair and as long as north korean accusations remain verbal little should change, but how nervous -- i mean, you say keep calm. how nervous should they be? if this is an irrational action, we haven't had irrational actions from north korea before. >> well, i think that china is well versed in north korea's behavior so if we think from a geopolitical perspective, the
key issue becomes for the chinese they have the north koreans on their boarder. it's a nuclear state. they want north korea to behave. from the american perspective, they don't want north korea to be failed. they don't want nuclear weapons to be lost and the south koreans want peace. the chinese understand dangers so they will not provoke north korea at all unless they feel they are truly pushed and the goal is always stability given the severity of the situation should north korea fail. >> how does this all feedback into south korea? you were saying the fourth quarter looks like it's been a fairly good one despite the strength of the one. >> i mean, the number one question i had from investors on the day that we learned or the day that we wrote about his execution was what do i do? do i buy? do i sell? we've always taken the view that
the investment decision is much like the diplomatic one. from a dip pllomatic standpoint because you can't predict and you can't see how your actions will be taken by them, the best thing to do is give them clear conditions how you will take actions on their actions. actions for actions, words for words. from an investment standpoint, it's the same conundrum. we can't say with any conviction what north korea will do tomorrow. unless you have that conviction, it does not make sense to buy or sell unless there's something definitive in the news that says it's very clear that a certain direction is going to take place. all we really know from this is kim jong-un has begun to build a new power base. he's executed someone who was essentially a threat to his control. now he will build a new leadership team. we shouldn't be surprised if there's some sort of provocation, missile tests, you could see some shells lobbed as we've seen before, but
ultimately we should assume that north koreans are self-interested. if there was outright confrontation, they would definitely lose. they're choosing to take strikes that would provoke and strike aid and create crisis domestically to validate the regime. >> that was the view of shawn cochran oncor rea. now don't forget if you have any thoughts or comments you can e-mail us firstname.lastname@example.org. we'll take a short break. could music pirating offer a treasure trove of analytics. we'll have a list of the most downloaded artists for the year when we come back.
apple stock lost a quarter of its value over that period. they're also advising them to vote against their resolution of carl icahn. he wants to buy back 50,000 shares. it's the first time apple has voiced a response to icahn. google is also hitting the open road. "the wall street journal" reports they will announce to team up information systems. it will be based on google's android software. the aim is to let drivers and passengers access map apps on droid powered phones. audi will show off technology to let cars drive themselves for short periods which could be available in four to five years. you can see more on that. i had a bmw driverless car. audi down .8%. google up .4%. now bruno mars, rihanna and daft
punk may have seen a large amount of their bounty go to the bottom. it was ditched to piraters. could this illegal downloading activity actually help unlock some information that may prove valuable to artists? joining us is gregory metz, ceo of symmetric. thank you for joining us very much indeed for joining us. bruno mars, rihanna, both down loaded 5 million times in 2013. is that all illegal? >> that's downloads on the network. >> that's all on bit torrent. >> do you have any comparison how that compares with itunes downloads? >> well, actually, itunes -- >> legal downloads.
>> bruno mars has had many more sales than illegal downloads. he's actually doing very well. i think those three artists were amongst the top sellers of the year as well. >> if you are going to be one of the best sellers of the year, you're going to have one of the biggest batches of bit torrent as well. >> that's right. >> what -- but if that's the case, you say that, look, there could be some useful analytics from bit torrent downloads. what would it be? >> the thing with bit torrent is global data. you can see what other people are downloading along with, say, the new bruno mars release, start profiling fans all the way down to a town or city level. it's very useful market information. >> why would we know that from legal downloads? >> well, you may know it in countries where that music has been distributed. it's being global, you can start looking at other areas where
people can actually buy it. >> could you use that information, say maybe we need to market in that space? >> yes. >> is that how you're thinking about it? >> that's how record labels and managers use that kind of data, yeah. >> how does this combine -- you're also measuring social? >> yes. >> an awful lot of measurements of social. how do the two combined? >> well, you can get some of the data from, say, twitter data but also things like spotter fly streams. we've also seen spotter fly is really helping to reduce pie ra piracy in areas where it shows people are moving from downloaded illegally to more legal services. >> are spotify helping? >> there is a downward trend. >> there is a downward trend? >> yes. >> what is the future looking like for artists and protecting their i.p., trying to generate
more revenue? >> things from spotify, the future shows a lot more streaming services. that will start becoming much more mainstream around the world. >> does it feedback into do you think incremental revenue? i mean, this idea is the more people that listen to your product, even if a lot of them are doing it for free, go back for more and you sort of might generate greater sales than you would have done. >> yeah, i suppose there's a strong conversion rate. i suppose people are downloading to sales but also there's also tours, merchandise, other areas where artists can start capitalizing. there's brand partnerships. a whole new load of revenue options in the music industry. >> when you talk about how precise this bit torrent data is, how granular does it get? you don't know who their people are. >> it's anonymous data. you don't know who they are.
you know the regions down to a city level so you can start showing global heat maps where an artist is popular, find pockets of fans where they are growing in popularity. >> if you're doing a tour, there's a lot of people that -- >> exactly. maybe do another date there. it's certainly more useful for smaller acts, more breaking. bruno mars already knows where he's popular right now. >> yeah. yeah. can you measure the sort of -- do you see groups that are sort of growing in popularity that yet record labels haven't necessarily latched on to? >> that's very valuable. >> are you going to be in the a&r business? >> it's valuable information. a lot of the useful information of bit torrent is the timeliness so you can rapidly pick up on friends and how they're different around the world. >> and what is the -- you know, when you're -- because presumably bands themselves can use this.
>> yes. >> they set up their own labels. >> that's right. >> the world is different now. you don't actually have to sign with somebody, do you? go out and talk direct to your audience. >> we have many artists using our services. we even have a free service for them. they do use it. >> is that z-- how much of a correlation is it? if you have a huge twitter following and you said, hey, look -- i'm wondering the power of things like twitter and social media to influence what your followers do. if someone has a big twitter or facebook following, you say go and do this, do you know what they actually get on that? >> it differs across artists. certain artists have very loyal fans and they will actually do anything. if an artist says go look at this video, that media will suddenly gets millions of views. artists like katy perry and big artists. very good media for interacting with fans, engaging with them and getting them to hopefully
buy yourself. >> yeah. because commercialization is not about the music. they understand it's everything. >> that's right. >> greg, good to talk to you. i'm saying merry new year. in this period between new year's and christmas, people never know. >> exactly. >> is it christmas, is it new year. so i say merry new year. that -- >> thank you. >> good to see you. let's see you in 2014. let's get a final thought from ricardo barberi. ricardo, we haven't talked about the fed and u.s. economy and more importantly yields. treasury yields over 3%. gilt yields are over 3%. when does this -- how much higher do they go before we sort of get worried? >> well, i guess we are back to levels where there were concerns in the u.s. that because obviously mortgage rates are above a spread over treasuries, this will slow down the recovery in the housing markets. so i think we are already in the
area that most people feel uncomfortable about. it's interesting because i have been in the past couple of weeks after the fed gave us a very dovish message, so the impact on the market has been very favorable in terms of equities still rising. bond yields are back to where they were around -- you know, in early september. i think overall the impact on this tapering announcement has been pretty, you know, smooth in terms of how the markets have responded. i think the critical issue for next year is does inflation remain very moderate? because the whole architecture of -- >> is based on that fact. >> -- of the fed is to say, look, we are going very slowly in tapering. we are keeping rates close to zero because inflation pressures are very moderate. actually, we are at risk of deflation. if that is called into question, then the fed will have to abruptly change approach but in
the near term there aren't mainly factors pointing to higher inflation. we need a much stronger economy to generate inflation that's not driven by energy by china, you know, commodity prices and the likes. >> yes. >> and i think because of that we can expect the fed will continue to go slowly with its tapering even if the economy picks up. now i still think that over the coming months at some point the market will start thinking, well, maybe the fed has to tighten earlier than what they've been telling us in their press conferences and in the past few days we've seen the early signs of that because until a couple of weeks ago the front end of the s curve was rock solid. in the past few days we've had a selloff in contracts thatly have 2013 fed futures, euro futures
that started to move. sold off around 15 basis points on the june 15 maturity, for example. i think that's one area where i like to be positioned although in the near term the trend is towards so-called bear steepening meaning bond yields go higher. >> yes. >> the front end is more anchored. the ten year sector -- >> we have the two ten-year spread has widened since july. >> ricardo, merry new year to you. >> thank you. >> see you in 2014. ricardo barberi. we'll take a break. still to come, blackstone is ordering up a men's size 12 in black. the second half of worldwi"worl exchange" coming up.
welcome to "worldwide exchange." vladimir putin steps up security after a second blast happens in volgograd less than 24 hours after another suicide bomber. china is calling for another security measure to secure debt. they say current levels are controllable. new data shows the number of americans signing up for health care insurance surged over the last month suggesting the
government is making progress in fixing the troubled healthcare.gov website. plus, german formula 1 legend michael schumacher remains in critical condition after suffering head injuries in a skiing accident in france. doctors are currently giving an update. >> announcer: you're watching "worldwide exchange" bringing you business news from around the globe. good morning to you. if you've just joined us state time, seven time formula one world champion michael schumacher has suffered serious injuries following a ski accident in the french alps. he is being attended to at a university hospital in france. this is the coverage of the press conference. spokesperson is giving an update on his condition. he's being described as staying in critical condition following the ski injury. doctors say they're unable to predict how michael schumacher's
condition will develop. doctors say they have only operated once since he arrived at the hospital and said he is in a coma at the moment. he also apparently is, as we understand, was wearing a helmet on his skiing trip. meanwhile, a second explosion in the russian city of volgograd has killed at least ten people. they say the blast which happened on a trolly bus is being investigated as a terrorist attack. on sunday afternoon a suicide bomber killed 16 people at the city's train station. the attacks come just two months before the winter olympics in sochi. local government debt in china has risen to a staggering 17.9 trillion u.n. that's nearly 3 trillion dollars. this is according to a new order for figures that are out until the end of june. the chinese say some regions are showing risk but current levels of liability are still controllable. they've called for emergency
mechanisms to prevent debt risks. those are some of the world news headlines. we'll bring you up to speed where we stand on global equities. let's bring you up to speed with the anything kay. that was finishing -- it's now closed for the year. it was up 2/3 of 1%. down around 3 points. hang seng pretty flat as is the s&p. the aussie down at three-year lows against the u.s. dollar. up from 15% so far this year. i'll show you where we stand with u.s. equities as well. we've had four -- what looks like we're on for the fourth straight months of gains. the dow at the moment is just below fair value -- sorry, above fair value by around 18 points. the nasdaq is currently some 8, 9 points above fair value. s&p 500 is about 2 points above fair value. the ftse and cnbc global 300 is
flat. european equities have been absolutely flat as well. move that on for you. this is where we stand. footsie 100 down .2. the ftse is down as well. shareholders of mont montmonte pasc monte paschi. they need the capital to repay its bailout from the italian state and to avoid nationalization. they wanted the capital hike in january. media reports suggested the chairman could resign over the issue. cnbc caught up with the bmps chair after the meeting and asked them about the bank's future after the delay of the capital hike. >> the future is uncertain. we were sure that we were able to increase it, which is quite important to the bank in the
capital position. now we have seen the market. shall we see what the market will bring to us? we have to recreate the consortiums, the underwriting consortium. >> let's bring us up to speed where we stand on currency markets at the moment. euro dollar, 1.3752. worth pointing out we did get up to 1.3894. that's about a 26-month high. dollar yen 1.0525. just below the 1.03529 level. dollar euro has been up at a five-year high as well. aussie dollar, i talked about this, down 15%. sterling currently just below 1.65. that's 1.6577 which is the highest since august 2011.
on the bond markets we keep our eye on treasury yields. they are still above 3%. that's the highest in two years. we hit that 3% mark on friday. we have pending home sales out due up 1% in november, but treasuries on track for their biggest annual loss or third biggest annual loss, i should say, since 1973. the two ten-year spread has been the widest since july of 2011. ten year gilt yields also over 3% as well. in january they were trading with a yield of 1.8%. so i mentioned some of the new data on the year in states today. yeah, we've got november pending home sales are out at 10 eastern. forecast to rise at 10:30. we'll get the december dallas fed survey. one notable earnings report today egg producer calmay foods. here's josh lip ton with the rest of the week. although santa claus seemed to have gone back to the north pole, investors had been
enjoying a santa claus rally with record highs for the dow and s&p 500. now as we head into the final two trading days of 2013, get ready to ring in 2014, the blue chip index may still have its best year since 1996 and the s&p 500 could have its best year since 1997. there are no significant corporate earnings reports scheduled for release but a report on pending home sales in november is expected to show they rose 2.5% after falling half a percent in october. also we're going to get a new report on consumer confidence before the end of the year. it's expected to show a nice gain over november. an associated press poll finds 46% of americans are ready to say good-bye to 2013. they don't think their fortunes improved for this year but the outlook for 2014 is definitely positive with 49% saying they expect the new year to be better than the old one. honestly, my kids are hard to impress... so i got the windows nokia tablet.
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morning actually have gone back up on a bit of short covering. now, could high yield offer better value compared to high quality bonds in 2014? penn capital's pete duffy says any pull back on rate volatility should be considered a buying opportunity. he joins us now. senior portfolio manager at penn capital. pete, good morning to you. merry new year as i like to say to people at this particular moment. pete, talk to me about high yield. i had a hedge fund manager on just before christmas. he said high yield is a bug looking for a windshield. why is it not, in your opinion? >> well, there is a tendency to look at high yield in the rear-view mirror of 2006 and 2007 where there certainly were excesses, you know, built up in the system in terms of leverage and, you know, poor quality of issuance.
this time around, you know, high yield is actually potentially quite an attractive asset class to be in relative to high quality fixed income because, you know, those are bonds that have event risk such as lbos or also interest rate risk as we've seen in, you know, the apple bonds and high profile lbos like heinz and dell. so to invest in high yield, it's all relative. the double digit returns that we've seen over the last five years are probably done at this point, but to clip a coupon in an environment of relatively benign corporate credit environment and to kind of shelter yourself from rate risk we think offers an interesting risk/reward opportunity. >> yeah, i get the clip the coupon idea and what you said.
the risk is like what is the risk of that -- taking that coupon in terms of your capital? >> well, that's a good point. you know, i think you just have to look at what companies have done over the last several years to improve their balance sheets and it's really astounding. we've been through record new issuings, most of which has been used for refinancing. i'll tell you the maturity runway or the debt that comes due over the next three years for some investment grade bonds and loans at this point is pretty de minimis. you don't really have maturities getting in the way. you have interest coverage ratios really at their all-time highs. you have companies that have locked in interest rates at a very low cost of debt and, you know, these are things that we've never seen before and this debt has turned out for a good, you know, 8 to 10 years.
so as we look out over the next several years we see very limited catalysts for, you know, hitting the windshield as you'd say other than for maybe exogenous shocks like geopolitics. >> yeah, what about tapering? we have ten year treasury yields up at 3%. how is -- how sensitive is high yield to that compared to investment grade, for example? >> well, all forms of higher quality fixed income, high grade corporate munis, treasuries themselves are going to be rate sensitive because you lend to those companies for a longer period of time. you typically have very small coupons and you have limited to no covenant. in high yield, you know, valuation is basically based upon spread to the forward default expectations which are very minimal at this point and
so this past year treasuries, you know, sold off to 100 basis points. high yield absorbed all of that rate shock, let's say. we think probably spreads and high yield have another 50 or so basis points left to compress down potentially to the mid 300s. so if the economy continues to improve and rates trend a little higher sort of in a gradual way, we think that high yield can do -- you know, can do its job like it did in 2013, which is absorb a little more of the rate increases. >> interesting thought. pete, stay there. get a cup of coffee. we'll come back to you fairly shortly. meanwhile, a recap of the headlines. vladimir putin has tightened security after volgograd is.
they are not planning a second operation. some of the other stories today. the obama administration says 1.1 million people have signed up for health insurance through the government's website. the overwhelming majority have come this month alone. enrollment should top 2 million once states report their figures and that would fall short of the original goal of signing up just over 3 million. reuters reports the white house is being pushed to hire a ceo to run the federal insurance exchange. that person would be responsible for rules and technology as well as coordinating with insurers and state regulators but the administration says the idea isn't being considered. e-mails and documents reportedly show competitive pressure may have pushed
jpmorgan to ramp up its hiring of the children of china's elite families. u.s. authorities opened a bribery investigation against the bank this spring but it expanded it to include hiring practices at others, including citigroup and credit suisse. "the new york times" says jpmorgan created its sons and daughters program but they show it stepped up after losing a lucrative business deal to deutsch they stepped up. jpmorgan hasn't been accused of doing any wrongdoing yet. its stock is down .8 of 1%. danish firm carlsberg is buying breweries. shares in carlsberg have ticked up 1%. blackstone is ordering up a 12 size croc in black. they're investing $12 million in shoe maker crocs.
they'll get preferred stock. they'll convert that to common stock as well as two seats on the board. crocs have announced the ceo will retire in april and plans to step down from the board. croc sales fell 2% and expects third quarter sales to be at the low end of estimates. crocs stock up 2.4%. around our question today for viewers, are there any questionable trends from the past that you'd like to be revived? if so, what would it be? join us. get in touch with us. e-mail or tweet or direct to me @rosswestgate. we'll take a short break. as we do so, lead you with a shot of how the heat map is treating. we're pretty even stevens really, 5 to 5 advancers and decliners right now on the dow jones stock 600. we'll be right back. avo: the volkswagen "sign then drive
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♪ [ male announcer ] the parking lot helps by letting us know who's coming. the carts keep everyone on the right track. the power tools introduce themselves. all the bits and bulbs keep themselves stocked. and the doors even handle the checkout so we can work on that thing that's stuck in the thing. [ female announcer ] today, cisco is connecting the internet of everything. so everyone goes home happy. looks like we're on for a fourth straight month of gains for u.s. equities. we're flying high on the s&p 500 about by a point. the dow was higher by 20. the nasdaq just under 5. european equities have been pretty flat in today's session. we're up near five-year highs on
an average of these markets. xetra dax is up near an all-time high but today just down .1%. the ftse is up maybe .1. volumes are pretty much derisery. they're still feeling pretty optimistic for the year. i asked the president and the ceo of the association of financial professionals what's causing those feelings. >> we're looking at revenue growth, we're looking at hiring, we're looking at inflation and all those business conditions seem to make a real nice holiday wishing and holiday greetings for next year in 2014 with inflation staying relatively low, which i know your guest mentioned a few minutes ago. >> so does that mean they're going to allow their companies to invest more? will they hire more people or not? >> yeah, we actually asked that question and 43% were going to
hire more people here in the u.s. next year, which is a very positive news for the economy going into 2014. >> does that compare with what we've seen in previous years or compared to sort of the mid 2000s? >> yeah, well, this is the best news that we've had since the 2008-2009 recession as you mentioned in the last 500 yeafi years. so this is significantly better than the last three, four, five years. it's positive news for the economy and for jobs going into next year. >> would you say that's 2014 overall. are there still concerns about the first part of next year? >> yeah, there are. they see a little bumpy road ahead for the first half and they see more growth going into the second half of next year. so i think they're taking a conservative outlook going into the first six months but then they see good economic growth and job growth going into the latter part of 2014. >> andrew, what do you make of
this survey and what it's saying to you? >> yeah, i guess the first thing i'd be interested is if it was taken before the budget was passed or the house budget was passed or after because i think that was certainly one of the big concerns you heard from a lot of ceos and cfos during the sequestration and the government shutdown was the confusion coming out from washington. now that we have more clarity on that front, i can certainly see where hiring plans would start to pick up for next year. i think the other one that you often hear from ceos and cfos is the health care, obamacare implementation. that's been a big overhang, just the uncertainty on the rules. as that's rolling out you have a little more certainty on what that actually means for your business. >> can you address those two points? >> yes. it was taken after the house budget vote and of course like everyone in the business community, all the uncertainty didn't help in terms of the cfo's outlook and, yes, the
health care as well. so i think this is probably reflecting some certainty going into 2014 on both those issues. >> that was the cfo survey. still with us is pete duffy, senior portfolio manager at penn capital. pete, what's interesting is if they get more confident -- and low borrowing costs as you talked about, how that might feed through of what happens with mna and strategic mna. what's your view of that from where you sit? >> yeah. we would expect mna to pick up this year rather in 2014. at the end of the day large companies are struggling to grow their top lines and they will turn to acquisitions in part funded by cheap debt and so we'd expect, you know, large cap strategic buyers, investment-grade type buyers to bolt on to their businesses
growth year, small cap, high yield type of companies. >> yeah. >> private equity, for that matter, you know, will have a tough time competing against the synergies and the cost of debt that strategics can bring to the table. >> all right. so, look, we were talking earlier how, look, you've absorbed -- high yield's absorbed quite a bit of a spike up in treasury yields. if we get any kind of pull back you said earlier that would be an opportunity to buy, but where would you go? >> well, i think given our view of the economy, which is fairly constructive and, remember, you know, rates are trending higher here and the fed is tapering because the economy is doing better, you know, we'd favor, you know, middle tier of the credit quality spectrum, even lower tier for, you know, special situations. we would also, you know, bar
bell in some loans and some converts as well. we would probably want be to avoid, believe it or not, some of the highest quality forms of fixed income, which are more rate sensitive. we want names and bonds that will perform well when rates rise because the economy is doing better. >> pete, good to see you today. thanks very much, indeed, for joining us. we appreciate it. have a great night tomorrow night. we'll see you in 2014. pete duffy from penn capital. still to come, ecb president mario draghi says there's no need to cut rates. now they could steal equities. reminding you that equities in the states are due to open a little bit higher. we'll continue the program right after this.
this is "worldwide exchan " exchange." i'm ross westgate. the headlines today. russian president vladimir putin ordered security to be tightened across russia after a second blast rips through the city of volgograd killing 14 less than 24 hours after another suicide bomber. new data shows the number of americans signing up for health insurance surge suggesting that the government is making progress in fixing the troubled healthcare.gov website. china's state auditor calls for an emergency mechanism to control debt.
liabilities have jumped to $3 trillion although he adds current levels are controllable. and doctors in france confirm that the german formula one legend michael schumacher is still in critical condition after suffering head injuries in a skiing accident. they say it's not clear how it will progress. >> announcer: you're watching "worldwide exchange" bringing you business news from around the globe. if you've just joined us state side, a very good morning to you. hope you've had a great christmas weekend. u.s. equities are forecast up a slight tick higher. we are on track for four months of straight gains for u.s. stocks right now. the dow is somewhat 20 points above fair value. the nasdaq at the moment is some, what, 10 points above value just about and the s&p 500 at the moment is around 1.5% above value. the ftse cnbc global 300 is flat
and european equities have also been fairly flat today down around .1 of 1%. volumes have been very low indeed for european equity markets. the ftse 100 is down .1%. the xetra dax is up. the cac quarante is down and the ftse mib is fairly flat. dollar yen has been down. currently at 1.0525. euro dollar we've seen late on friday hit 1.3894 which was a fresh -- well, near two 1/2 year high. currently at 1.5752. euro yen is at five year highs. sterling dollar, we hit 1.6577 which is the highest since august 2011 late on friday. we're currently 1.6475. a second explosion in the
russian city of volgograd has killed 14 people. a male suicide bomber carried out an attack. on sunday another suicide bomber killed 16 at the city's train station. these attacks come two months before the winter olympics in sochi. the russian president vladimir putin has vowed to tighten security around the country. jim aceda is in moscow and has filed this report. >> reporter: good morning. investigators in volgograd is a major bus hub, a city you'd pass through on your way to or from sochi, investigators have issued a statement saying this morning's bomb was carried out by a male bus bomber. no one group or person has claimed responsibility for today's or sunday's attacks which have killed 30 and wounded 60 according to russian
investigators. the strong suspicion, of course, is from islamist extremists in southern russia. people are extremely upset. they're terrified in volgograd, a city of over 1 million. today there are reports that residents are simply staying inside. they're too afraid to go out now and go about their daily lives. police are calling these two attacks acts of terror and are connecting them to a publica peel. you recall just several months ago this was made by the chechnyian warlord, a man who is on the u.s. list of terrorists, an appeal to his men to kill civilians and disrupt the upcoming sochi winter olympics. that's, of course, an event that russian president vladimir putin has staked his prestige and reputation on. this latest wave of bombings is getting very close to sochi. volgograd 400 miles from the venue and another car bombing which took place on friday and killed three, only 170 miles
from sochi. russian people are worried. vladimir putin and his security forces are extremely worried as well. he's deployed some 40,000 special forces, police and agents around sochi to make it as safe as possible, but the militants have shown that they can strike elsewhere, they can strike often and at will. back to you. >> that's jim aceda with his report. joining us is lil lila gevordian. thanks for joining us. no one has come forward to claim responsibilities as jim says, but you say this has all the hallmarks of the black widow group. why? and who are they? >> well, these are the mostly north caucasian women, initially chechnyian and these are women who have lost husbands, brothers, fathers who have been part of an islamist militancy in the past decade or so. and in some ways it is -- they have become sort of recruited by
the islamist militants to take part in military action, mostly suicide bombings. they are called black widows. and if we compare the recent attack on the trolly bus on the bus attack in october in the same city, we do see similarities but, of course, we have to wait and see whether a group comes forward to claim the responsibility. >> why volgograd? >> volgograd is actually quite close to the troubled region of dag gue dagistan. it is not the same region as where sochi is, but i have to say that it's not far from kr t kraftotan region. in some ways it's convenient to deliver a message that militants
can export terror into main land russia. main land russia which is bordering is not far from the troubled region but not really there. >> presumably the olympics is a tempting target for these terrorists. what do you think are the risks? what do you think they might achieve? even if they stop people traveling, they would probably claim that as some success. >> absolutely. and to some degree picking volgograd which is a relatively large city according to russian standards is sending a message that russia is troubled. it's sending a message that even if the security is really tight around sochi olympics, still there is a risk and this could deter peempt and also in terms of the economic cost, despite all the efforts that the government has put into the olympics, into the building infrastructure hoping there will be a spillover effect into the southern russian region, into
north caucuses region to bring some economic development, this is risking derailment. so two goals are achieved really, terror to show the power that regardless the federal republic, the federal government effort, the small group of militants are still powerful to attack soft targets and, secondly, economic damage. >> is this going to derail, lily, or how might it derail russian investment in the russian olympic games. they've spent a fortune, $50 million. how are they going to plan to get that return back? >> well, they have, indeed, spent quite a lot because this is quite a prestigious event. as i've said, there's also economic rational. the southern regions especially around sochi are very attractive also north caucuses which has a wonderful potential except
terrorism risk, security risk is quite high. what the recent attacks show is that the operational risk is far too great for investors and the incompetent vestment in sochi would probably pay off only partially in the sense that russia will try to stage a really world class games, but other than that would it be able to convince investors to come to a region? i highly doubt that. >> lilla, thank you for that. >> thank you. >> senior economist at ihs. we'll take a short break. the countdown is onto the ball dropping of 2014 in new york's times square. we'll talk to the man in charge of lighting up the night sky for the world famous new year's eve celebration. he's the head of phillips lighting north america. welcome back. how is everything? there's nothing like being your own boss! and my customers are really liking your flat rate shipping. fedex one rate.
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cheers. and seeing as it's such a historic city, i'm sure they'll appreciate that geico's been saving people money for over 75 years. oh... dear, i've dropped my tea into the boston harbor. huhh... i guess this party's over. geico. fifteen minutes could save you fifteen percent or more on car insurance. >> announcer: you're watching "worldwide exchange." new year's eve celebrations have come a long way since the ball first dropped in new york's times square in 1907. back then it had 100 light bulbs. this year son yes sotomayor will
push a button that use only 22 watts of electricity. the man who's responsible is the ceo of phillips lighting. bruno. good to see you. you've done all your tests, have you, bruno? this thing is going to work, is it? >> yes. good morning, ross. happy new year to you. we're very confident that it will all work perfectly fine. >> right. this is for the first time ever you'll be illuminating the numerals in colors that can change. you have new leds, digital control panel. what's going to happen? >> well, as you know, phillips is known for innovation and technology, and so today we're -- i mean, this year we're going to spice it up with something new. 207 hue bulbs will be lighting up the 1 and 4 along with
luma led bulbs for the ball. it gives us an opportunity to showcase our technology in a completely different way. specifically as you know, the award winning hue lamps are really all about digitally enhanced. it's about giving people the opportunity really to control their environment with adding over 16 million colors. >> yeah, hue is something that you can run from an i.s. or android device. it's a digital device for controlling your lighting? >> yes. it runs by really a smart device and essentially it really is all about the intelligence that is being built into the led itself. we're bringing really the internet of things to lighting. >> you talked about the ball lit by over 32,000 l.e.d.s.
how much energy is that using? how much more energy efficient are we now compared to where we were a couple years ago? >> well, the 32,236 l.e.d.s use about 22 watts of energy. we are 90% more efficient than we were with the incandescent and halogen technologies. that equates to about two wall ovens in the normal family home so it's much more energy efficient than it has been with the previous technologies. >> are businesses, bruno, big businesses now switching over? are they making an investment in their lighting? are they prepared to make an investment now to save money over five years if you see what i mean? >> well, i mean, this -- this technology has application both in the commercial space as well as in the consumer space, and obviously the technology that you see with the new year's eve
ball and with the numerals has significant application. when you talk about a total cost of ownership, when people are looking at the maintenance and all of the associated costs from a commercial perspective, it makes a lot of sense because of the quick pay back, but this technology is very much relevant in our own home because if you look at the technology and how it's evolving, we're really crossing the threshold from what has been really a disposable item in the home to much more of a durable good because people really want to control their lighting and they want it really full of expression, full of style. rather than really just worrying about it when it flickers or when it fades, it really is much more about really an expression of people's personality. so that is what it really enables the technology to do.
the technology that we have behind me is also the technology that is going to be in our new lamp and what i'm showcasing here is essentially an l.e.d. a-19 65 watt that uses about 10.5 watts. this uses the same l.e.d. technology as we're using in the new year's eve ball. it really runs the gamut in terms of these applications. >> not quite what you're seeing in times square. bruno, thanks. all the best tomorrow night and happy new year to you. bruno, ceo of phillips lighting north america. >> all right. >> always a good place to be, times square. meanwhile, recap of the headlines today. vladimir putin tightens security across russia after volgograd is hit by two deadly explosions. china's local debt is surging to
$3 trillion. michael schumacher remains in critical condition. they're not planning a second operation. meanwhile, tim cook is taking home more than just a basket full of iphones and ipads this year. apple has released details of its ceo's 2013 pay package. i think it's probably more than mine and hampton pearson's put together. he's got more for us on this story. hi, hampton. >> how are you doing, ross? yeah, you've got that right. tim cook earned $4.25 million this year, roughly the same as his paycheck in 2012. an s.e.c. filing shows it has a base salary of 1.4 million and performance bonus of 2.8 million. they awarded him 1 million restricted stock units. the idea was aimed at signaling apple's confidence in him
following the death, of course, of steve jobs. the award vests annually, but part of it depends on shareholder returns versus a group of apple's peers, including cisco and google. now cook didn't earn his bonus last year, about 7100 shares, as apple faced increased competition from samsung and other rivals as well as margin pressures. the award is based on returns between august 2012 and august of this year. apple stock lost a quarter of its value over that time period. separately, apple is advising shareholders to vote against a resolution by carl icahn who's proposing the company buy back 50 billion in shares in fiscal 2014. icahn has discussed this with tim cook and has taken to twitter arguing a buy back of as much as $150 billion is within apple's means and could prop up the stock. apple says it's already returned 46 billion in dividends and buy backs in the first six months of
its 100 billion capital return program. in a statement the company says the board and management team are thoughtfully considering options for returning additional cash to shareholders. the global marketplace imposes a dynamic competitive landscape and the company's rapid pace of innovation requires unprecedented investment flexibility and access to resources quoting the apple statement. this is the first public response to icahn's demands. ross? >> hampton, thanks very much, indeed, for that. we'll be seeing you tomorrow. if not, have a very good new year's eve, hampton. >> and the same to you, sir. >> thank you very much. that's the latest from hampton. meanwhile, a look at some of the other stories we're following today. the obama administration says more than 1.1 million people have signed up for health insurance through the government's website. the overwhelming majority have come this month alone. experts say it should top 2 million once states report their figures. that would fall short of the original goal signing up 3.3
million by january 1st. they're being pushed to hire a ceo to run the federal insurance exchange. that would be responsible for rules and technology as well as coordinating with insurance and state regulators. the administration says the idea isn't being considered. still to come, they may be getting ready to ring in 2014 in times square, but a little group downtown that is set to ring out the year. will there be more happy returns in the next 12 months? we'll get more insights on the year that was and the year to come. to us, eagle. ♪ 2,000 feet. still looking very good. 1,400 feet. ♪ [ male announcer ] funny thing happens when you shoot for the moon. ahh, that's affirmative. [ male announcer ] you get there. you're a go for landing, over. [ male announcer ] the all new cadillac cts, the 2014 motor trend car of the year.
above fair value. the nasdaq at the moment is some ten points above fair val. s&p 500 is above fair value. joining us is mark from swan wealth. we've had the best two weeks the last two weeks. what happens next? >> well, you know, i think today's going to be a slow one. tomorrow as well. then we start running into ism and nonpharm pay rolls. watching that ism number, if it's too hot could cause the ten year to move. if the ten year really moves faster than the fed wants it to, that could send the equity markets into turmoil. same thing with nonpharm pay rolls. we are riding a fine line where we want good numbers. even really good numbers but maybe not off the charts numbers because that could really cause the ten year to move. if the ten year starts to move, if there's worries of too much
economic growth or an increase in inflation, you could see equity markets kind of dive off of these tops and, you know, i do think that's a significant risk with these numbers coming up in the next week. >> last week the s&p was up four record closing highs in a row. we want to spread this out between twos and tens as well. is it the level we get to or the pace of the yield rise that will be of more concern? >> it's the pace. it's the pace. the ten year is going to move to 4%, maybe 4.25, you know, over the next year. 18 months if the fed is able to manage things properly. if the ten year makes a quick move from 3 to 3.25, 3 to 3.5 in a matter of weeks, that is going to turn into a real problem. that's where the equity markets i think take a dive. now if you look at where the vix is trading, 12.25, option prices
insurance premiums are relatively inexpensive. with the market at an all-time high, i think there's a good argument to be made about buying some sort of portfolio insurance heading into 2014. >> that would make a lot of sense at these sort of levels. mark, great to see you. happy new year to you. have a good day today. >> happy new year. >> good luck tomorrow. mark sebastian who's -- actually, i have a he got time for one more question, mark, to you. quick word about the dollar. >> here the euro continues to run against the dollar. i don't think that can last. i'm expecting the dollar to continue to be strong against the yen. i think the euro -- the u.s. euro trade's overdone. anybody that has any type of duration beyond, you know, a few weeks should look at going long on the dollar against short the euro. >> mark, thanks for that. we are now definitely out of time. good to see you. happy new year. that's it from today's edition of "worldwide exchange." coming up next is a festive edition of "squawk box."
good morning. just two more trading days for 2013. the dow posting another weekly gain while the ten year is holding on to 3%. and there was a second suicide bombing in russia this morning. that left at least 14 dead and dozens injured. and apple says vote no against carl icahn's $50 billion buy back proposal. it is monday, december 30th, 2013, and "squawk box" begins right now.
good morning and welcome to "squawk box" right here on cnbc. i'm andrew sore kick along with joe kirn nin and kayla tausch shi who's sitting in for beck can i. >> did y >> good morning. >> why are you whispering? >> you don't have your microphone on? i'm sorry. let's get to our top story. a deadly bombing in russia. the second in less than 24 hours. at least 14 people were killed and nearly 30 injured when a bomb ripped through a trolley bus by suspected suicide bomber. that blast happened in the russian city of volgograd which is about 400 miles northeast of so sochi. on sunday a female suicide bomber attacked a rail station. 16 people killed. more violence leading up to the winter olympic games in february. we'll have more coming up. michelle cabrera