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tv   Worldwide Exchange  CNBC  September 5, 2013 4:00am-6:01am EDT

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watching "worldwide exchange." i'm ross westgate. a recap of the headlines today. syria looks to overshadow talks of the g-20 summit where tensions between russia and the u.s. are running high. leaders keep the focus on growth the and the effects of fed tapering. central banks in focus, stocks trading higher ahead of the ecb decision. bank of japan sees modest recovery. dollar yen hits the 100 level again. but india steals the show as
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they try to shore up the rupee. samsung and qualcomm try to set the clock of the smartwatch market, sony races to secure its spot in the phone space. the ceo of the japanese tech giant tells cnbc he won't give up on the tv business. >> we have a good relationship with all of our major shareholders. and we continue to have a good dialogue, certainly with mr. lobe and third point as well as all our other major shareholders as well. hello, warm welcome to "worldwide exchange." u.s. senate foreign relations committee agreed to authorize a limited attack on syria, clearing the way for a full senate vote next week. the measure is expected to pass in the senate, but its fate in the house is less certain. vote came as president obama urged lawmakers to prove his plan for syria. speaking at a news conference in
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stockholm yesterday, he said international community's credibility is on the line. secretary of state john kerry also testified before the house foreign affairs committee yesterday defending the case for action. >> as we debate the world is watching, and the world is wondering not whether assad's regime actually did this. i think that fact is now beyond question. the world is wondering whether the united states of america is going to consent through silence. >> this, of course, coming as president obama meets with world leaders and g-20 summit in st. petersburg where syria will dominate the discussion. earlier this morning, the vice minister warned a military strike would hurt the global economy, setting up calls for a political solution. let's get over to the g-20, steve is there. and join us now. steve? >> ross, here's the thing. do you want to talk about tax if you're a journalist here or
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syria. and quite frankly everyone wants to talk about the latter, even though subject surrounding the former are more on the formal agenda here. i've spoken to the presidential representative of the russian federation at this meeting and she told me once again that syria is not on the formal agenda. she also said, of course putin and obama will be speaking. i said, will they be speaking to each other? she said, there is lots of people here not necessarily can she confirm we'll see a bilateral. i think we can confirm there won't be a bilateral. so is syria on the agenda here or not or is it dominating events regardless of what people want to be on the agenda. we spoke to the director general of the lio, guy rider. >> i think it is very, very important the issues of jobs and growth which, you're right, the russian presidency put at the top of the agenda, do not get swept away by the admittedly devastating issues of syria,
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tapering and the rest. i think we need to keep our eyes very firmly on the jobs and growth issues and like you, i feel confident that's what's going to happen here. >> reporter: so i spent a lot of time this year already in events in st. petersburg and moscow working out what the russian's presidency aims are working or as we have seen laterally events over syria will dominate. let's speak to a man we spoke to much earlier, russia. the ceo of the russian direct investment fund. you have your agenda. the rdif has its agenda. the president has its agenda. is that being overwhelmed by the poor relationship between mr. putin and mr. obama over syria? >> well, we believe that definitely syria is a big topic of discussion. but we don't believe that syria should really completely overshadow other key issues because the growth and economic growth is really the key issue for the world. so we want people not to be trigger happy.
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we want people to be investment happy and strategy happy and talk about resuming growth of the economy, that's important, that will create jobs and create opportunities for people. >> i wonder if there is a naivete, because putin and obama are disagreeing on syria, that he we can't agree on a whole host of other issues. i think they are agreeing open a whole lot of other issues, aren't they? yes. we have $5 trillion of investors, many american investors and we all have three steps we believe can be taken so that the world economic growth is increased by 3%. this is a joint position by many countries. >> in your opinion, this is cat clo gwi egorically stated, none of that will be overwhelmed over the poor relationship over syria? >> we believe there will be major progress on those issues and media will concentrate on
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syria quite a bit. the substance and actual decisions will be made in many other areas as well. >> i can't think why the media is obsessed with syria when they have action plans on tax to contend with. let's look at your agenda here. you've got a lot of money to spend. $10 billion to spend. the russian private equity fund. sovereign wealth fund. earlier in the year you said the engine of growth, the locomotive of growth is the emerging markets as well. are you revisiting that call, is the developed world rather than the emerging world where we'll see more growth? >> it is a combination. we generally see a major decline in cross board investment. cross board investments decline from $12 trillion to $5 trillion since the last five years. and we see that of the emerging markets slowing down a little bit and developed markets are picking up, but really to get growth going at 4%, 5% level for the world, it requires both
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markets to work together. for example, we have been setting up jet funds with china, with some european countries because we believe joint investments between developed and developing countries is a way to stimulate growth. >> a three-point plan. run us through the details. >> free flow of investments is as important to free trade and basil 3 restricts insurance companies. we believe it is wrong. bringing more private capital into infrastructure. right there is no standardized way to bring private capital into infrastructure. third point, increase infrastructure efficiency. $1 trillion are wasted each year in the world because infrastructure projects aren't run efficiently. if you increase efficiency, you get to 3% extra growth for the road. >> receilet me ask you if g-20 e right place for that. i look at the developed nations, can the g-20 ever really deliver coordinated action?
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>> we believe so. for example, we are working quite a bit with australians who will take over and want to make sure the plans we outline get implemented. we look at some very specific ideas. one is creation of $200 million fund that will fund the infrastructure projects. sounds like a small point. big issue about many projects are not well documented. that is a joint position of 20 countries that we should do that and do very specific steps. >> let me give you a curveball. do you think the central bank and european central bank is doing enough to stimulate world growth in. >> no. >> carol dmeimitrev. je >> he knows and we know that the remitt the bank has is very
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different from that the federal reserve enjoys or the bank of england these days. they cannot go into the market and willy-nilly buy up assets to ease up balance sheets. it isn't in the remitt. the best we have got is a threat of omt but it remains a threat. but let's not do the ecb down too much here. they put over a trillion euros on the table for the banks through the ltro program. there is ample liquidity being fed into the credit machine. a lot of the bankers as you know, steve, just continue to argue that there isn't the demand because growth is still quite slow, quite sluggish in a lot of the eurozone economies. >> sure. but the rtlo money seemed to come with some former stigma attached. why else did all the northern banks put it back on deposit and the southern banks borrowed as
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much as they could. how was this the remedy when the banks could use the money and could use it without any consequences left it on deposit. >> well, that's a question that some of the bankers will have to answer themselves as they look into the mirrors and they feel the color of their own consciences. the debate remains is it a problem of demand or is it a problem of supply? what is interesting is the return of rtro money slowed. you got to ask yourself the reasons why that's the case. is it that demand is picking up and they think they may have a channel to funnel that into the real economy as we see some better pmi numbers and the green shoots of recovery or is it because we still have high levels of sovereign indebtedness and that money is finding it way into the purchasing of domestic sovereign debt. all of these questions are fascinating. communication is going to be the key here today, steve, when it comes to the ecb.
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and mr. draghi has a difficult road to walk as always here because we have recovery, but we also have this language in the forward guidance about maintaining low rates for an extended period of time. so how does mr. draghi meet this dilemma. voca veeland is with me. i call him one of miracerc merk men. thank you for coming here. do you think the communication strategy that the ecb has pursued has worked given that we have seen rising forward money market rates? >> well, first of all, i think it is a very good idea to reveal a bit more information about the expectations of the policymakers. that's what the ecb does. it does it for the first time. we have seen other banks like norway, sweden, they give you the full projection of future interest rates. so i think that's a good thing.
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of course, you can debate about what affect that should have. it gives information to market participants. does it have to be the same forecast as policymakers, do they have to talk down rates for a long time? i don't think that's not the issue. because market participants may have a different view on how the economy will grow and how it will respond to policy rates. so the best thing the bank can do is tell them more about what the bank thinks. >> what about the issue of moral hazard? have we not forgotten that if you apparently give market par tis pa tis pants a blank check, the risk is we end up with the same problem of excess leverage and reckless lending behavior. we don't want a transparent and clear guidance on interest rates that allows people to go willy-nilly into the markets borrowing to their heart's degree, do we? >> i think there is a risk. i think you shouldn't promise in the sense of hey, this is a
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guarantee. the ecb hasn't done that. they said we're going to apply the same strategy we do. we're going to tell you more about how we think that strategy given our outlook for inflation, for growth, for monetary development will translate into interest rates. you don't have to share that view. but it gives you more information on the thinking of the ecb. that's a good thing. personally i think interest rates will rise faster than some market participants believe. we have done what mr. draghi suggested, looked at the reaction function, which could reflect ecb's behavior in the past. we fed in forecasts. we find interest rates like the mro rate would be anticipated to rise according to our calculations by may 2014, june, second quarter, basically, which is earlier than others anticipate. but i think it is a good thing that -- >> we're going to be in trouble then, aren't we? because we have high unemployment. we have falling inflation. we have got sluggish growth die nammics here.
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these are not the economic conditions we need to see higher interest rates. >> interest rates are low. in europe, we have massive liquidity. you look at liquidity, balance sheets relative to gdp, the ecb has done a great job in expanding that, if you wish that. so i think we have very ample conditions, but the ecb can do, they have done. and, you know, we do see that the economy is picking up. so far, if you look at the ecb staff forecast from june, they are very pessimistic on both inflation being low and growth being low. others are more optimistic and we'll see how that pans out. >> the whisper here is, i can't confirm this or not, but there is disagreement between the bundesbank still and the ecb on this strategy going forward. and these rates are not the right ones for germany, which is leading the eurozone out of its funk at this point. surely the ecb and the bundesbank need to come to some accord here and ecb needs to
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amend its policy appropriately for the largest economy in europe. >> i don't think that's quite the right way of looking at it. i don't know the internal discussions. i can't comment on that. but, you know, the ecb's job is to look at your area inflation and not any specific country. so it will never be perfectly appropriate for a specific country, which has a different inflation rate or inflation outlook than the euro average. we know that. that's part of having a common currency. and there are other mechanisms for basically, you know, you control that. governments have fiscal policy, so, you know, if there is faster growth in germany, we can certainly then consolidate more quickly and move towards those targets. >> you started talking about higher taxes, we can't go on. volcker, nice to have you with us. thank you for giving us your time. volcker veeland joining us, professor at university and one of angela merkel's wise men.
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back to you for now. >> good stuff, geoff, thank you for that. plenty more from geoff and steve. the coverage of the ecb and interest rate decisions on cnbc in our extended coverage. bank of england will be delivering its rate decision at 12:00 london time. 1:00 cet. and the decision is at 13:45 cet and the press conference at 14:30. in japan, central bankers are using their most bullish economic language since the financial crisis saying the economy is moderately recovering with inflation expected to keep ridesi rising gradually. the yen has weakened. it is now at 102 to the dollar. key level which, of course, the yen has -- the dollar has been unable to sustain. in india, rajan start eed h
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term. on the first day on the job, he unloaded a dump truck of measures to shore up the rupee. until the end of november, overseas borrowing rates have been raised. other moves are geared to liberalizing markets and boosting lending. investors are so far on board with the rupee up sharply today. right, that's where we stand. more reaction on that, starting off our global markets report, sixuan in singapore. hi, sixuan. >> thank you, ross. you already talked about the key highlights in asia today, a largely positive session. volumes are relatively thin as investors await key u.s. data and more clarity on syria. japan's nikkei 225 ended just a tad higher after the bank of japan kept rates steady and raised its economic outlook. but investors are cheering the arrival of the rbi's new governor while the central bank's new policy moves help to strengthen the rupee and boost stocks. india sensex now still in action, leading the gains in the
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region, now currently higher, but about 2%. hong kong's hang seng index hit a three-week lie in south korea's kospi closed around some three-month highs. mainland china and australian market were under a bit of pressure today. let me show you top gainers. at the region's shipping sector shopped up strong gains as freight costs surged to its highest level in nearly two years. take a look at these chinese shipping companies listed in hong kong, jump something 6% to 7% in today's trade. there are also recently boosted by the free trade zone pilot program in shanghai with hopes more similar programs will be approved in other cities as part of beijing's plan to restructure the economy. meanwhile, asian automakers with u.s. exposure also gained ground as u.s. auto sales rose at the fastest pace in nearly 6 years in august. south korea's hyundai motors gained .6% and japan's honda
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jumped 2.3% today. back to you, ross. >> sixuan, thanks very much. that's the latest in asia. here in europe, as you can see, we are weighted to the upside. around about 7 to 2. not at the session high but not far away from it either. this morning we wait for the bank of england, not a lot expected from the decision. up nearly 1% this morning. about half a percent for the xetra dax and cac quarante similar moves and ftse mib as well. look at where we are with bond markets. gilts edging higher on yields. 2.92%, getting nearer the 3% mark. spanish yields 4.5% with italy as well. on currency market, dollar yen over that 100 level. 100.02. sterling dollar, still holding on to the gains we made yesterday where we climbed 1.36,
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euro dollar down below the 1.32 mark. we'll take a short break. still to come on the program, helia brings usz the latest installment of the uk banking sector. today, focus on barclays. lego building up its market share. we'll join the ceo of the danish company and find out if making money from toys is merely child's play. and the chairman will be talking greek markets in a first on cnbc interview at 11:20 cet. plus, military action in syria nears as the u.s. senate foreign relations committee approves a strike. how should investors expect investors or markets to react. we'll get into the detail before 12:00 cet. if that isn't enough, hot on the back of sony's latest salvo, a first on cnbc interview with the ceo straight after this break.
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blackberry is pushing to speed up the process of auctioning itself off. they want to sell itself possibly as soon as november. firm has been in talks with multiple parties interested in taking on parts of the company or buying the firm in its
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entirety. we said in august it was exploring strategic alternatives naming a new special committee of board members and narrowing down interested parties. could apple be close to announcing a deal with china mobile? that's the question everyone has been wondering since they invited chinese journalists to an event in beijing. satellite launches scheduled in tokyo and berlin, it could mean the new eye phones will hit shelves in several markets simultaneously. samsung beat apple to the punch with the new galaxy gear smartwatch. those who buy it will no longer need to fumble in their pockets to check e-mails or take calls. reviews mixed. full of features like voice recognition and a camera that shoots video. the battery charge is comparatively low and the dollar price could be a bit too high for those without a galaxy note to link it to. come one, come all.
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qualcomm has thrown its hat into the ring with its own toq smartwatch. it plays music and is the first to come with a color touch screen. there is a picture of it for you. staying in the secretary, sony unveiled the smartphone it hopes will rival samsung in berlin. jeff has been in frankfurt. he's been catching up with the ceo kazuo hirai yesterday. >> it was a fascinating conversation, ross. we -- one of a limited number of broadcasters that had access to the ceo of sony. and you'll know, i mean, sony had a dreadful few years of late. they seem to have got left behind as all these other operators or device producers move to a platform type approach and focused on the experience for yusers. sony continued to focus on the technology and somehow missed the wow factor with the
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consumer. well, last set of numbers shows they are starting to turn things around under this one sony program that mr. hirai has championed. so i kicked off that conversation by asking whether they are going to meet the raised targets and raised guidance they gave the market at the last quarter's earnings. >> we still have a long ways to go and also we still have yet to do see how we do during the all important holiday season. i believe with the great products like the xperia set one and other products we announced here that we are going to have a very strong fiscal year. >> can i ask then what contribution europe is going to make? how strong do you think europe may be and are you concerned at all about the slowdown we're seeing in the emerging markets? >> i think that the weakness that we're seeing partially in the european markets, some of the slowdown in the emerging
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markets as well is something we keep an eye on. at the same time, we look at some of the categories that we have leadership in, like, for example, digital imaging. those areas where we continue to gain market share. we have our ups and downs. where we're strong in categories, i think we're making good strides. >> i want to ask you about dan lobe and his stake at third point. clearly you told him you're not interested in spinning off some of the sony pictures business. are you worried he may now be building support with other shareholders? >> i think that we have a good relationship with all of our major shareholders. and we continue to have a good dialogue, certainly with mr. lobe and third point as well as with all of our other major shareholders as well. >> isn't he an unnecessary monkey on your back, a distraction from running the business? >> major shareholder of our company, and, you know, he deserves to be treated just like any other major shareholder. >> can i ask you about the debt situation?
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you've said you're going to sell the headquarters building in manhattan. there has been some talk about selling down the television business or the building in tokyo. is that going to happen now this you're rated junk? >> let me first address the tv issue because the tv business is certainly not for sale. we're not looking to get out of the tv business at all. i also articulated the fact that we wanted to really streamline and manage our portfolio for businesses as well as our assets and concentrate our resources to where we see the growth in our business. and so we realigned our portfolio, i can tell you for a fact that with regard to cash flow as far as financing goes, we have a lot of resources in place to be able to make sure that we're able to invest in those areas where we see growth going into the future. >> and finally, i want to finish by asking you about the nokia microsoft deal within the last few days. are you worried about the impact it is going to have on hand set
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sales at sony? >> i think the important thing for us is to make sure that we are concentrating on making sure that we deliver from sony the best smartphone to customers around the world, and we have yet to see the impact of the latest announcements from microsoft and nokia. i think it is still early days. >> so mr. hirai. we got news of a new hand set and we also got some news of a new watch. well, an upgrade, i guess, of the existing smartwatch, the sony smartwatch 2. but to some extent, ross, i suspect that that announcement has been somewhat overshadowed by the samsung's own delivery of a watch, which seems to beat the sony product on a number of areas when it comes to the technology. >> yeah, the one thing i did work out, jeffrey, with the new smartwatches is that it makes it a lot easier to get away with playing poker in a senate
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hearing or dare i say, you know, a game during an ecb press conference without being spotted. >> yes. yeah, that's an interesting one. but isn't the point that you have to win? you have to win and then it is okay. and we all have a bit of a giggle about it, even though you may be sitting in some important political meeting where syria's discussions are being made. you can laugh it off if you make a joke about whether you won or lost. >> exactly. it is a lot easier just to -- a little bit, pretend you're looking at the time and, you know, not the same as you put your hand in your problem et and whip out a -- >> what's wrong with counting the tiles on the ceiling or seeing how often you can cross your toes or wiggle your fingers? those good old-fashioned games that used to get us through the press conferences. >> is that what mrs. cutmore
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does? geoffrey is with us all day. thank you very much. so, do you really need a smartwatch or should the likes of samsung just stick to what they know best? logon to our poll on and have your say. tomorrow, more from berlin's event. still to come, a rowe has broken out over who should decide whether european bank is no longer viable. is the bundesbank holding the cards? we'll be in frankfurt for another look. more from geoffrey to come. [ kitt ] you know what's impressive? a talking car. but i'll tell you what impresses me. a talking train. this ge locomotive can tell you exactly where it is,
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these are the headlines from around the globe. syria looks set to overshadow talks of the g-20 summit in st. petersburg. tensions are running high. leaders were hoping to keep the focus on growth and the effects of fed tapering. central bank in focus in europe. stocks tradie ining higher ahea the ecb decision. bank of japan sees modest recovery as dollar yen hits the 100 level again. india steals the show in asia, investors cheering a barrage of moves from the incoming governor to shore up the rupee. and in an exclusive
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interview, the ceo of bpba tells us why spain is set to become the strongest and why themarket s overreacted to tapering. european equities this morning have made some modest gains. ftse 100 just up small amount, around 6 points. xetra dax, cac quarante, doing well with the ftse might be tb . bond yields higher across the board there. gilt yields 2.92%. treasury yields, 2.93, getting back up towards the 3% mark. keeping our eyes on that. on the currency markets, dollar yen also not quite over 100. reached 100 this morning. euro dollar weaker 131.86. sterling consolidating gains above 156.
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russian president vladimir putin warned america has it has no right to military strike on syria without u.n. approval. >> translator: i've watched the debates in congress. congressman asked mr. kerry, are al qaeda and syria, people say they have gotten stronger there. kerry says no. i officially say they aren't there. combat units of rebels in syria is a unit of al qaeda. kerry and others know about this. this wasn't nice to watch. we communicate with them and assume they're decent people and he goes and lies openly and knows he's lying. this is sad. >> president obama said he hopes his russian counterpart changes his mind on supporting president bashar al assad's regime. >> if in fact you're outraged by the slaughter of innocent people, what are you doing about it? and if the answer is, well, we should engage diplomatically,
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well, we have engaged diplomatically. and the answer is, well, we should shine the spotlight and shame the governments. the governments often times show no shame. we should act internationally. well, sometimes because of the various alignments, it is hard to act through a security council resolution. and so either we resign ourselves to saying, there is nothing we could do about it, and we'll just shake our heads and go about our business, or we make decisions even when they're difficult. >> so this is as the u.s. senate foreign relations committee agreed to authorize a limited attack on syria yesterday clearing the way for a full senate vote to the resolution next week. jim maceda is in turkey, near the syrian border and joins us now. if we're heading towards a strike on syria, how do you
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think that might play out? >> hi, ross. well, military experts are telling us that since it is a limited strike, expect to see it being short, as short as a day or two. dozens of cruise missiles will likely strike what we call command and control headquarters, air bases for assad's chemical weapons arsenal. and also the air defense systems around those bases, but probably not the chemical weapons themselves as that would be difficult to control. there could be a lot of, what they call collateral damage. other targets, as many as 150 to 200 of them, according to some analysis, will likely be military airports or missile sites. basically the means of delivering assad's chemical weapons. assad had time to adjust. reports say he's hiding heavy weapons this even soldiers in residential areas, houses and
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schools. u.s. commanders are confident that the strikes will seriously damage his chemical capability. but they're not meant, ross, to do any more than weaken assad. not to kill him, not to topple him, because with thousands of foreign fighters and al qaeda-linked jihadis inside syria, filling the vacuum, the outcome could be even worse. this is -- there is, i should say, a political strategy behind the military intervention and that is striking at assad's chemical weapons. that should, to some extent, slow down the momentum that his forces have been gaining on the battlefield in recent months, return the war to a stalemate, and hopefully, at least this is the theory, give space to both sides, to return to the negotiating table. but, of course, there are a number of intangibles and that could be a very, very big gamble. back to you, ross. >> good stuff. thank you for that. now from jim later. a rowe has broken out over who should decide if a european bank is no longer viable.
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the ecb is set to start supervising the eurozone bank next year. at the same conference, bundesbank board members says the ecb should be able to indicate if a bank is no longer viable. annette has been looking at this and joins us from frankfurt. a bit of a turf war, annette. i suppose there is an argument for saying the local authority might be -- might have a better idea of what is going on at an institution. >> yeah, that's very much true. that was the argument ever since they came up with a plan to have the new supervisory sitting inside the ecb. the bundesbank was against that plan ever since they came up with the plan because they're saying, of course, it is threatening the independence of the ecb when there is as well the same people supervising the banks while the banks are doing
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business with the system of the ecb. so the bundesbank is very clear on that. and them saying, okay, let them have a seed inside the ecb, the new supervisor is already a step towards the argumention we had earlier on from the european central bank. but that new message yesterday didn't go down too well with the bundesbank. we had a member of the board yesterday at the conference directly contradicting him. there is a new argument on the horizon, more about who has to say something about the new architecture we're heading towards. speaking about the banking conference, yesterday, i had the chance to catch up with one of the biggest banks in europe and, of coursing had to ask about the spanish economy because they recently said that they're already seeing a bottoming out of the recession in spain. take a listen what he had to say
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as well on the banking industry. >> one year ago, many, many investors bet against the euro. i said publicly no. don't bet against the euro. now europe is perceived more -- more secure, more safer. europe is there forever. not for a couple of months. >> do you feel as well when you speak with investors, are they, again, willing to put the money into spain? >> they're doing so. now the russian investors have come over again. we are seeing investors invest in europe and in spain. therefore, europe is perceived as stronger than before. and this is a good test for europe. >> one question on latin america, because you're such a huge player in those markets, do you think the fed's tapering will actually create a big problem for emerging markets and
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as well, of course, for you? >> not at all. i think the markets have overreacted, the qe tapering. of course, the flaws are, you know, out. and we are seeing some problems in emerging market. but you look to make us a whole, we are very upbeat about america, mexico, the other countries. they all have their own specific problems but looking at the medium long-term, latin america is very strong. >> the eurozone crisis was one of the big topics at the debate yesterday or the event. but the topic of overregulation and balkanization of regulation, you have different patches of regulator assistance across the world, which makes life harder for the bank, was very high or very on top of the agenda i should say. with that, back over to you. >> annette, thanks for that. sticking with the financial sector, we continue our coverage
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of the british bank today with a look at barclays. helia has been running the series and joins us for more. helia? >> barclays perhaps the sexiest bank in the uk, full of great businesses and very profitable investment bank. but potentially still a lot of skeletons too. as you can see, the share price has gone up and down over the last five year since the financial crisis. and they have had their fair share of scandal, like the libor scandal. and in the last set of results, we saw 2 billion extra of provisions set out. that's not good news for this man, anthony jenkins. he set out a kind of program at the beginning of this year to focus the bank not just on improving the culture, but on improving returns. when we talking about banks being up for sale, uk banks
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being up for sale, barclays is one of them with the biggest cash call to investors since the beginning of the financial crisis. that is after the pra crossed their hands and said they needed to raise 12.8 billion pounds to fund a short fall in capital. that 5.8 billion of rights issue, that is going to be coming out week after next. and we have got obviously that will be earnings diluted. but what it means for investors is that the capital will be there shorter. it also means that the return on equity will be a lot, lot sooner. they're pushing that out, that target for 11.5% will be pushed out to 2016. so what kind of a bank is barclays? well, still 60% of its profits comes from the investment bank and look at that. the corporate bank in the uk is very strong. over the last few years in europe, it has struggled. but businesses like rates,
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incredibly strong. now, obviously barclays, when we talk about barclays, you got all of those risks that we have been talking about for the last week. you've got conduct risk. are there any more skeletons there. and expenses that radically tried to reduce cost as shareholders have demanded that that comes out in line with dividends. one of the key businesses for barclays is barclay card. i spoke to the queen of cards earlier this week and asked her, being top of your game, being the market leader, does that leave any room for growth? >> there is absolutely growth in the payments business. and barclay card is growing overall. so over the past three years alone, roughly we have doubled the size of the business. we have added over three years, 12 million new customers to the franchise. if you look at the payment flow, our payment volume that comes over our rails, that's increased by nearly 30% over the past
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three years. there is absolutely growth in this particular area. >> all right. meanwhile, let's move on as well. helia joined me on the set. market analysts are unified in expecting no change to interest rates or asset purchases, comes one week after mark carney's main speech as governor where he reiterated his commitment to forward guidance. the key thing here, helia, despite that commitment, we continue to see upward pressure on the long end of the curve. ten-year gilt yields up to -- >> same with sterling. look at the price of sterling. it is almost like if you -- the question is will he come out with a statement? and if he does, the third time he's trying to convince markets again look seriously, there is no reason to expect rate hikes in the economy and it isn't doing that well, despite key figures all week and last week that show the economy is recovering at quite a fast pace.
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>> out of the activity service we saw with pmis, it was indicated services, services pmi yesterday, jobs growth is actually at the weakest that it has been for the year. and it is jobs, one of those key knockouts. >> yeah. clearly the jobs is the threshold they're looking for, that outline, they want to -- they want unemployment to be reduced and then they'll increase rates. the word of the knockouts, those knockouts are supposed to say, look, if the rest of the market, one of them was, if the rest of the market don't seem to buy the story, they think rate increases are on the rise and you talked about gilts, really good measure, talked about the fact that we have got good data coming out of the uk and genuinely the markets are not believing what he said, so his credibility is looking a bit shaky. >> they're going to test him, aren't they? test the results -- >> if he comes out today and
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says, look, let me put out a statement to say, yes, okay, the recovery is warming up, but honestly, we're still going to wait for another three years. >> the most interesting aspect of this would be if some other members of the mpc decide forward guidance isn't working, but we believe the economy is still weak, they might start voting for more qe. that would be -- that could be stunning. >> we saw that in the inflation report. we saw that there were -- and in the minutes we saw before that key members of the mpc were talking about, look, we haven't voted for qe this time, not looking at it now, but we're ready. we're at the ready for more qe. it would be a very hard sell, i would say, to see more stimulus in the market. >> all right. helia, for now, thank you. we'll take a short break. you played with legos, right? i still do play with lego. lego revenues jumped on the back of new product launches as sales
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all right, we're focus ed on g-20 today. this is live shot from stockholm as you can see where the u.s.
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president barack obama is just about to leave the swedish capitol to get on air force one to fly to st. petersburg, part of the trip that he's added on. he is waiting for congressional support for plans to strike syria. at the moment, there is no official confirmation of any meeting with the russian president vladimir putin. keep our eyes on that. first, though, we turn our attention to lego. 13% jump in revenue for the first half of the year. the firm increased its share for global toy market nearly 9%, helped by solid sales in asia. lego said it plans to begin construction on a china manufacturing facility next year. john goodwin, cfo at lego joins us now. will that be a construction of a plant with normal bricks and mortar. john? >> that's right, ross. we tend to use traditional construction methods as opposed
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to our own bricks for manufacturing facilities. >> why is that -- how big a market is that now for you? to justify that you'll have a local facility? >> as you saw in the press release, we were able to deliver growth of over 35% in asia, in first six months of this year. and it certainly a key focus for us going forward. as you're well aware there is a huge amount of children within the asian region, and it is an area we haven't had a huge amount of focus on as a company in the past. we see it is a massive opportunity and as you rightly pointed out, we recently made a commitment it order to build a manufacturing facility in china to complement distribution center we're basically outside of shanghai in order to serve the asian region and the consumers in the region. >> is it -- lego is literally
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one product. i mean, you know, you got the brick, if you know what i mean. you don't have to do anything different presumably for the chinese market, do you? >> no, what we're looking to utilize is our product portfolio that we have, that is consistent whether it is in the u.s. or in europe or indeed in asia. and that's a key part of our business model and how we approach conditisumers around t globe and the chinese consumer is very enthusiastic about the products that we have, both in the uk and the u.s. >> how would you describe right now competition in the toy market, global toy market? >> it continues to be an intensely competitive as you would expect. it is a very active market. it is one that responds to new product innovation indeed, 60%
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of our product lines are new every year. so innovation is a key element and it is important that you keep the call factor about your product and keep up to date with consumer inputs and wherever those types of dynamics exist, typically the market is very competitive in the toy market is no different in that regard. >> what is happening with sort of costs and pricing, john? >> well, we continue to keep key eye on our costs to keep sure we keep on top. at the same time, we're making sure that we develop our capabilities for the future. so it is that fine balance between insuring that you don't allow any lack of focus from your call, but at the same time, insuring that you're gearing yourself up for the future opportunities and we already discussed asiana as an importa one for us where we're building our capabilities in that region in order to respond to the demand we have there. >> john, good to see you.
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amazing lego factors, you put all the bricks together, how long we go. it is a great product. thanks for joining us. john goodwin, cfo at lego from denmark. what is on the agenda in asia tomorrow, a busy day. the bank of japan monthly report while malaysia issues trade figures. the next generation summit in bali. we'll have coverage on that on the program tomorrow. right now, second hour of "worldwide exchange" coming up. we'll have more from the g-20 in st. petersburg. that is where the u.s. president barack obama is about to fly to on air force one.
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this is "worldwide exchange." i'm ross westgate. syria looks set to overshadow talks of the g-20 summit in st. petersburg with tensions in russia and the u.s. running high. hoping to keep the focus on growth and the effects of fed tapering. central bank's focus as well. investors wondering if president mario draghi can sound confident about recovery and dovish with his forward guidance. bank of japan seeing some modest recovery. dollar/yen reached the 100 level again. india stealing the show .
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samsung and qualcomm try to set the clock of the smartwatch market, sony races to secure its spot in the phone space with the ceo of the japanese tech joint telling cnbc he won't give up on the tv business. >> we have a good relationship with all of our major shareholders and continue to have a good dialogue, certainly with mr. lobe and third point as well as with all of our other major shareholder as well. hello, good morning to you. warm welcome if you joined us state side. u.s. equities firmer. right now as far as futures are concerned, we're called pretty flat, really, what, 6 points below fair value on the dow.
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currently just five points above fair value on the nasdaq and the s&p 500 at the moment, about a point above fair value. european equities mixed today as you can see. ftse mib, cac quarante, xetra dax, flat. on the bond markets, we continue to see yields heading higher. particularly look at gilt yields. a lot of events today. we have the ecb, bank of england meeting as well. gilt yields 2.92%. ever since mr. carney has come out and issued the forward guidance, yields have continued to climb up really as they have in the united states as well. spanish yields a little higher today, along with italian yields too. and on the currency markets, dollar/yen has gone through the 100 mark this morning, just below, 99.90. euro/dollar 131.90. besides those bank meetings as well, we heard from the bank of japan today, getting as bullish as they have been in a while on the japanese currency.
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also, of course, the g-20 under way, president barack obama just leaving stockholm to fly to st. petersburg. that's where we stand right now in european trading. let's remind you what is happening in asia today. sixuan, as ever, standing by with the details. sixuan? >> thank you for that, ross. despite lingering uncertainty over syria, asian stocks rising to a three-week high ahead of key u.s. data. japan's nikkei 225 financial did just a touch higher after the bank of japan kept rates steady and raised its economic outlook. india is the clear outperformer today after its new central bank chief unveiled measures to support the rupee and also the banking sector. the sensex is less than an hour from its market close, still jumping by about 2%. meanwhile, hong kong's hang seng index hit a three-week high on south korea's kospi closed around some three-month highs. china and australia pulled back a bit in today's session. as for the top gainers, the
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region's shipping sector chalked up strong gains as freight costs measured by the dry index jumped to its highest level in nearly two years. some hong kong listed trading companies surged from 6% to 7% in today's trade. asian automakers with u.s. exposure gained ground today as u.s. auto sales rose at the fastest pace in nearly six years in august. south korea's hyundai motor gained about .6% today. and japan's honda jumped 2.3%. back to you, ross. >> all right, sixuan, thanks for that. that's the recap in asia. meanwhile the u.s. senate foreign relations committee agreed to authorize a limited attack on syria, which clears the way for a full senate vote on the resolution next week. the measure is expected to pass in the senate, but its fate in the house is less certain. the vote came as president obama urged lawmakers to approve his plan, speaking at a news conference in stockholm. he said the international community's credibility is on the line. the same time, secretary of
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state john kerry testified before the house foreign affairs committee, defending the case for action. >> as we debate, the world is watching and the world is wondering not whether assad's regime sactually did this, i think that fact is beyond question. the world is wondering whether the united states of america is going to consent through silence. >> this, of course, come is as president obama meets with world leaders at the g-20
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global. >> i think it is a topic on the margins of the -- i cannot exclude that some of the leaders may want to discuss it, these are bilaterals. but otherwise, the official program is not including syria as in any means at all on the agenda. >> can we have a successful g-20 summit if president obama and president putin aren't talking to each other? >> why do you think they won't talk to each other? they talk to everybody else. is this fine? is this successful? is this 20 people, meaning maybe they speak to -- i don't know -- they'll have to talk. >> we have the representative of the world's largest economy on one side and the representative of the russian federation, the president who is hosting this event. it would seem natural for them to talk to each other.
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>> they will talk to each other. i don't understand what you mean they won't. >> so you can confirm that president putin and president obama will talk to each other during the g-20? >> i'm not confirming that they will have a bilateral, i don't have this information. but if sitting in a room with, like, 34 representatives of different countries and international organizations in talking there means talking to each other and i think that this means talking to each other, then it will surely happen. >> i'll pursue this one more time, if i may, because i want a successful global economy with the russian agenda succeeding with jobs and growth at the forefront. if i want that, i need the world's largest economy and the host to speak to each other, surely. >> well, but we had no problems with american delegations when we would draft the documents, completely support the russian
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agenda and jobs. >> no real clarity on what obama and putin will or won't be speaking wispeak ing about. while they may disagree very publicly on syria, that's very, very clear and they have very different trajectories and paths on how they see the crisis evolving, they are not agreeing and doing a lot of work on a whole host of issues. the problem is talking about tax and trade and transparency, perhaps less exciting for the journalists here than talking about syria. let's move the conversation on. one thing that is very important for g-20 is to show the coordination. i don't know if there is coordination. we have discussed this a lot on cnbc over the years about the lack of coordination. and coordination too about policies of going into support mechanisms and out them as well. let me bring in my colleague geoff cutmore, in frankfurt as well. let me put this idea to you. everyone is talking about tapering and we'll hear from the
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ilo and others talking about the issues and how important it is for them, but the fact of the matter is, tapering has given everyone more food for thought about how much coordination is missing in the world as well. has the ecb had a free ride on the back of qe and now will have to stand on its own legs a little bit more? >> well, you know, i would think that the perspective here would be somewhat different. and i think it would be tapering is causing us a certain amount of pain, because european economies are not in the same state as the u.s. economy or even the uk, which seems to be recovering a little more robustly. yes, okay, we have seen a better print on the services and the factory pmi, so there is something of a recovery taking place. but it is still very slow, very gradual unemployment numbers are high, debt levels are high.
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inflation is low. here they would argue that we would like to see lower rates for longer and tapering is having the opposite effect on the markets. so at this point, i guess there will be those who say yes to some extent, europe has benefitted from the fed's largess, but don't forget that the ecb already put over a trillion euros into the european banking system through the ltro program so they would argue at the ecb that they have done quite a lot to ease liquidity constraints in the eurozone economy, steve. >> not just the europeans who have seen to be affected dramatically by quantitative easing. what we heard in the early years of quantitative easing was talking about the negative effects of it. now they're still moaning about the negative effects of taking it away again. this is the point i raised yesterday. let's see what angel gurria has
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to say about tapering and what that means for the global economy. >> now it has gotten to a point where i think everybody understands there is a lot more than the possibility of tapering, which is what we -- >> 20% decline in the rupee since may. >> i think now one must look hard and that includes my own country, mexico, at our own reform efforts, the things that we have not done, the things we still have to do, because the post crisis world is going to be a cut throat world. competition for the markets, we have lost competition for the jobs that we have lost, competition for the well-being we have lost, is going to be ferocious. >> angel gurria yesterday. let's throw this back to geoff. you talked about the trillion euros that went into the banking system. a large amount of that went on deposit. what i want to know is if the ec
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bench has come up with such great medicine rather than just verbal intervention, where are the jobs in europe? right. i think geoff is having a little bit of problem with the line there. but, i mean what we need to move on with here, then, geoff, can geoff hear me. i'll hand it back to ross. i think geoff is having a few problems with his line in frankfurt. but, ross, i think there is the point, people saying, yes, the ecb put the ltro money forward and we're seeing more stability in the pmi data as well, but we still have 12% or there, thereabouts, unemployment and 60% youth unemployment throughout southern europe as well. where is the job creation, where is the job growth? back to you, ross. >> i don't think he was being rude. i think he genuinely couldn't hear you, steve.
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>> that happens to me a lot. it is "squawk box" redux. >> steve, thanks. that's the latest from st. petersburg. we'll get out to geoffrey for the ecb discussion. let's remind you ahead of that what is on the agenda in the united states. weekly jobless claims at 8:30 eastern. forecast to remain unchanged at 331,000. that report coming ahead of tomorrow's jobs numbers. we'll also get fed speak from indianapolis, fed president and factory order in chain store sales. a pair of key earnings coming out tomorrow from verifone and smith & wesson and the adp unemployment report and the manufacturing. "worldwide exchange" continues right after this. building animatronics
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just joining us, recap of the headlines today. syria threatens to hijack the g-20 summit in st. petersburg. equity moves higher in europe ahead of the ecb and bank of england rate decisions. investors cheer the new man at the top of india's central bank with the rupee and stocks both moving higher. still to come on the program, continued anti-austerity pro tests, looming bailout targets, how should invest evors assess gree?
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head of the euro group says it is realistic to assume greece will need more support beyond the current bailout package. the main stock index is up 2% this year on the back of improving data.
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joining us for more is costas, chairman of the hellenic market corporation, one of the country's main regulators. you're over here on a road show. how do you gauge investor interest now in greece compared to this time last year? i'm just wondering now, have people decided that it is off the table and if it has, has it changed opinion? >> the interest is undoubtedly higher this year to just give you a number, we have three times the meetings arranged that we had last year. so it shows that people want to know about greece. and i think i said last year, because this was a beginning of the end of grex, so it is now not a possibility. neither political nor financially, but investors know it and they're waiting for the next phases, which is for the growth potential that also everybody knows that greece has
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to realize. >> we still see -- everybody needs to know, we'll need another extension, another package of programs, right? that's fairly clear, isn't it? >> it is not so clear. there is the finance gap that we have. a gap that has been calculated around 10 or 11 billion euros again. but this is not something that we need to tend to now. this program has to finish and can finish smoothly. this program ends at the end, at the middle or end of next year of 2014 and then we will see if there are still the need to cover the financing gap. so this is not a discussion that we need, i think, to have now. >> we had another costas in yesterday. >> a very common name. >> who clearly was an important
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part of privatization to finally agree, and there is a whole raft of privatizations greece needs to deal with. but it has been stuck. are we going to see more? now that opap is out of the way. >> it has been finalized. >> yes. are we going to see more happening now? it has been a huge frustration. >> this has prove to be a very difficult exercise because of lingering difficulties. we have a very complex legal system, especially concerning reits, acquisitions. the situation is very difficult. and there has been also resistance from those, you know, parties, groups, people, et cetera. this is on track, but this is going much less smoothly than expected. some people thought that this would happen.
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privatization, program of such a scale is very difficult to, you know, be exactly on track, especially in greece. >> and just -- market capitalization, what is -- how do you see your role right now in promoting greece and helping out with the growth that -- the growth trajectory you need to get going? >> let me tell you if i may right now we are in a situation whereby we have credibility, high credibility, because everybody is seeing that greece is trying to respect its engagements and be on track. we have the three-fourths of the road of the fiscal consolidation finalized, which is very important. and so we need now financing of the economy and recapitalization is the first big step. we have four banks that are now fully recapitalized and can do the jobs and there we have a very important role to play, we played it in first phase and now there is refinancing of the
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banks and we'll play it again. and the major issue now is, of course, also to begin to tackle the social issues, the so-called 330s as i call them. 727 -- 27% unemployment, 27% people that are around poverty. and 27 or 30% of gdp out of the greek economy. so after credibility and sustainability, we need to tackle those big issues. >> costas, thank you very much for joining us. thank you. now, in frankfurt, mario draghi will attempt to continue his balancingant. he must talk down expectations of impending rate rises while remaining positive over any rebound in europe. geoff is outside the ecb headquarters with annette, of course, as well. guys, handing it over to you. how do you think he's going to steer the good ship eecb today? >> my sense is that he will try
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as much as possible to stick to the forward guidance that already has been provided by the ecb. annette, there are those, though, who already say it is redundant, not having the desired effect in managing the forward interest rate curve. >> yeah, that is true. if you look at the rates, they're not following that what the ecb is actually promising. a lot of people have been speaking to -- or stressing the fact that the ecb has to be bolder, but it remains to be seen whether we hear anything substantial today from mario draghi. i actually rather doubt it. do you? >> it is hard for him to either sound too upbeat or too negative on the growth pro file. clearly the markets have decided that europe does deserve rerating and that the strength that they're starting to see in services and manufacturing pmi is positive. and is sustainable at this stage, which leads us then with
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other issue on the table. does the question of the minutes and publicizing the minutes come back in today's meeting? has the asset-backed securitization story gone for good. what about this talk of a simmering disagreement between the bundesbank and the ecb over bank supervision. any of these thins going to figure in. >> probably the banking supervision thing won't figure because that's not the topic for the press conference today. the minutes will most likely be pushed again in the future, at least what i was hearing, still like a legal issue and still have to figure out how to tackle that problem, being precise and informative, but at the same time, trying to protect their members, right? >> so, ross, to sum up, i think, no change in interest rates, careful management of the language, forward guidance remains in place. mr. draghi will perhaps tip a hat towards the prospect of the
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economic growth, recovering slowly in the eurozone, but not fast enough to change the wording on forward guidance and interest rates. back to you. >> geoff, annette, thank you very much. we have extended coverage here on cnbc world and cnbc in europe of those ecb and the bang k of england as well. the countdown to the friday jobs report is on the way with a sneak preview due ahead of the u.s. open. we'll get a preview after the break. has it's ups and downs.
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you're watching "worldwide exchange." recap of the headlines from around the globe. syria looks to overshadow talks of the g-20 summit in st. petersburg where tensions are running high. leaders were hoping to keep the focus on growth and the effects of fed tapering. other central banks focused, stocks heading higher with investors wondering if mario draghi can feel confident while remaining dovish in his forward guidance. the bank of japan seeding a modest recovery. investors cheer a barrage of moves from incoming governor rajan to shore up the indian rupee. samsung and qualcomm try to set the clock of the smartwatch market, sony's racing to secure its spot in the phone space, but the ceo of the japanese tech
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giant told cnbc he's not giving up on the tv business. >> we have a good relationship with all of our major shareholders. and we continue to have a good dialogue certainly with mr. lobe and third point as well as with all of our other major shareholders as well. and if you're just joining us this morning, warm welcome to you. this is where we stand state side for the futures today. the dow at 96 points. the s&p up 13. right now, pretty much at trading on fair value. indicated for a flat start. data to get through before we get going it that. ftse cnbc global 300 down at the moment. european equities trading flat as well. ftse 100 up six points, up nine at the moment. the ibex is up 12 and cac quarante is going nowhere. plenty of qualification for investors not quite sure what to
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do. stuck between central bank meetings, economic data, and syria and prospects of fed tapering. what are investors to do in this climate? here is a recap of some of the thoughts we had from guests on cnbc already today. >> sitting on the sidelines for now. once the issue passes, you can look forward beyond that and take away that volatility as we go into that. there can be an attractive investment proposition ahead. but for now, we're kind of holding on to just taking a breather. >> the easiest to take the position on is the s&p. in that respect, the reits come into place and what we did was to have some thoughts on the s&p, which we typically don't use as an instrument, but this time around we did.
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>> china is important. it is growing at a still very rapid pace. in comparison. asia is, you know, in pretty good shape, value, manufacturing. countries like i would say mexico, countries like turkey over the long term. >> some of thoughts we have had, on the agenda state side today, quite a lot, weekly jobless claims out at 8:30 eastern. forecast to remain unchanged at 331,000. that report coming ahead of friday's jobs number. we also got the adp employment report. and we're also getting fed speak from minneapolis fed president naraya narayana kocherlakota. joining us from new york is michael pervis.
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michael, good morning to you. thank you for joining us. we're in an unusual space at the moment. we focus on data and what it means for the fed. political risk coming out of syria and we're trying to work out what is happening with the global economy and the em space. how hard is that making it? >> the markets are being tossed and turned and everyone getting back to work mode right now. but it is important to remember that september has a habit of coming in like a bull and leaving like a bear. seasonally there is some strong seasonal patterns here that set up, and i actually think that, you know, when you see rallies like we had yesterday, those are good entry points for selling those rallies and putting on market protection into what could be some choppy times in the next few weeks. >> look, just to put into context, the important aspects of this employment report tomorrow. if it is an okay number, is there a perception tapering will
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stop in a couple of weeks? >> well, sure. i think, you know, consensus would probably have it that, you know, if you get a -- a good number, meaning 180 to 200, nothing amazing, but something pretty solid, that we could start tapering in september. i think whatever -- if we get tapering in september, i think it will be tapering light here. and let's not forget we have a backdrop here of some, you know, some potentially ominous issues with respect to syria. and i think that's not going to be lost on the fed here. so i think unless we get a very extreme number out of the jobs on friday, that we're not going to see that much of a -- necessarily a decisive market reaction. i think this jobs number may be a little less interesting than some of the other ones we have had. and let's not forget the elephant coming into the room now is really who is going to --
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not really fed tapering in september or october or, say, november/december, it is really who is getting ben bernanke's job and that is much more of i would say a volatility catalyst than either the job number we're looking at on friday, or the fomc on the 17th and 18th of the month. >> yeah. if it is summers, as opposed to janet yellen, which, you know, how does that change the game? is it just because of the uncertainty because of what he might do becomes the problem? >> well, you know, the headline on summers is that, you know, he will be -- he's going to be certainly more hawkish than yellen. i'm not absolutely convinced he'll be ultimately that much more hawkish than yellen. i think he's -- he will have -- he will be looking closely at how much fiscal gridlock we have at congress ultimately.
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however, in the short-term, if he does get the job, and i think the consensus out of washington more and more is that he's the front-runner, if he does get this job, then that's going to, i think, be pretty jarring, only because this guy doesn't have monetary experience. he's a brilliant economist and doesn't have the monetary experience that yellen has or some of the other candidates have or the current or prior fed chairman do. so i think it is just going to be, you know, sort of a big unknown the market has to come through and sort through. summers will have to sort of ultimately, you know, clarify where he is with respect to strategic policies with qe. >> mike, stay there. want to recap that read on auto sales we had out yesterday, the secreta sector's strongest sales since 2007. we saw double digit gains across the board, particularly among
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asian makers. nissan and toyota with a gain of 22%. honda, 26%. plenty of excitement around the numbers. what does it mean in terms of assessing the real strength of the economy? >> it is a great question. i'm not too excited about that. you have two big factors. one is which you've got -- there is some interest rate component in the auto sector. the second one is which you have an average fleet of 11 years. that's up noticeably from historic averages which is more like 9 to 10. and, you know, coming five years out of the 2008 financial crisis, you know, there has been finally some pent-up demand. meeting with an improving economy and this sort of convergence with lower rates did help spur some great auto sales, whether we have continuation
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there in the coming months will be interesting. it is important to step back and realize that the auto sector is a lot smaller than the housing sector. roughly one-fourth as much in terms of its contribution to the u.s. gdp and i think from getting back to the fed for a second, looking at how important that auto sector is, in terms of guiding, tapering and monetary policy, it is not the obvious. the housing data we got in august, a lot of it is very dismal. i think that is the more important component here to be fobbousi focusing on as it relates to the fed. but clearly the news yesterday was very encouraging for the mi. we'll come back to you in ten minutes or so. tomorrow, alan mulally, find out how they're putting a high tech
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spin on its product line. that's coming up tomorrow. still to come in a few moments, just when it looked like things couldn't get any bleaker for blackberry, they're pushing for an expedited sale of itself. seema mody has the story.
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a recap of the headlines today. syria threatens to hijack the g-20 agenda in st. petersburg. world leaders tell cnbc they're keeping the focus on growth and jobs. markets move higher in europe ahead of the ecb and bank of england rate decisions. investors cheer the new man at the top of india's central bank with the rupee and stocks both moving higher. watch out, samsung beat apple to the punch with the new galaxy gear smartwatch. those who buy it will no longer need to fumble in their pockets to check e-mail or take calls but reviews are mixed. full of dandy features like voice recognition and a 1.9 megapixel camera that shoots video. the battery charge is comparatively low and the $300 floor price could seem high for those without a galaxy note to link it to. plus, come one, come out. qualcomm has thrown its hat into the ring with its toq smartwatch. it plays music and is the first
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smartwatch to come with a color touch screen. sony pitting the smartphone hopes on the xperia 1. geoff cutmore caught up with kazuo hirai. after the launch, he admitted sony was operating in a clef challenging market and was positive that they would succeed. >> we need to make sure we're bringing to the forefront the great technologies we have, and really bring that to the consumers and the consumers can decide what suits their best needs, their requirements. i believe that, you know, when customers really touch and really try our products that they will be true believers in our products. >> could aprple be close to announcing a deal with chinese mobile. that would be hours after it is
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expected to unveil its new iphone in the states. but with satellite launches scheduled in tokyo and berlin, it could also mean the new iphones will hit shelves in several markets simultaneously. blackberry is reportedly looking to speed up a potential sale, which is fueled speculation of potential bidders who might be circling the smartphone giant. what is going on? only one person to ask, seema has the details at cnbc hq in the united states. good morning, seema. >> good morning, ross. here is the latest we have learned. blackberry is pushing to speed up the process of auctioning itself off to a potential bidder. dow jones reports the struggling hand setmaker wants to sell itself possibly as soon as november. the company has been in talks with multiple parties who are either interested in taking on parts of the firm or buying the firm in its entirety. the blackberry also said in august that it was exploring strategic alternatives, having named a new special committee of board members and working diligently to narrow down the
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list of interested parties. previously there was some speculation that microsoft would be a bidder for the smartphonemaker, but became clear microsoft was out of the r running when it announced it was acquiring nokia services this week. we saw shares of blackberry move on the move. closed up by around 7% on the day. ross, back over to you. >> seema, thanks for that. still to come, syria threatening to steal the show of the g-20 summit in st. petersburg. are investors shrugging off fears of a military strike? we'll talk about that after the break. [ driver ] today, my ambulance knew all about a bike accident, just by talking to a helmet. it grabbed the patient's record before we even picked him up. it found out the doctor we needed was at st. anne's. wiggle your toes. [ driver ] and it got his okay on treatment from miles away. it even pulled strings with the stoplights.
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[ agent smith ] i've found software that intrigues me. it appears it's an agent of good. ♪ [ agent smith ] ge software connects patients to nurses to the right machines while dramatically reducing waiting time. [ telephone ringing ] now a waiting room is just a room. [ static warbles ] all right. european equity markets if you just joined us this morning are
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pretty flat, really. and mixed ahead of plenty of data out of the u.s. today. as far as u.s. futures are concerned, this is where we currently stand. the dow, what, 16 points below fair value. the nasdaq is two points above fair value and the s&p 500 is on fair value. this as we continue to assess what might happen in syria. u.s. senate committee cautiously backed president obama's call for action against syria. approval for a move on the assad regime came in a 10-7 vote in favor of a compromised resolution. this, of course, coming as president obama meets with world leaders at the g-20 summit in st. petersburg where syria will likely dominate the discussion. steve is in st. petersburg with the latest. i mean, the media would like it to dominate the discussion, but is it actually dominating the official discussions? >> no. not at all. it won't be on the official
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agenda. i would suggest, at all. whether it is talked bilaterally, of course. are the french and americans going to talk about it? yes, we believe so. are the rugs going to talk to the u.n. about it, they could do so. in terms of official agenda, it couldn't be further from what the rugs want to talk about. they want to talk about jobs, trade, regulation. we got a lot of inputs coming who are hoping that a lot of the work they have done throughout the russian presidency will come to the fore at some stage and the informal talks which will take place about syria will be less of a headline, but, today, front and foremost, all about syria. i've been asking about everyone i speak to is syria going to dominate. pretty much everyone turned around and said it is a big issue, needs to be sorted out, a tragic geopolitical issue. the fact remains, the g-20 is here to talk about a whole host of other very important issues.
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emerging market volatility, whether it talks about tapering, whether it talks about tax, trade, regulation, the banking sector, the $60 trillion derivatives market. they want to talk about all these things and move forward so we don't have another financial crisis. in short, ross, yes, everyone in the media is talking about syria. on the sidelines, people will be talking about syria. in terms of the official g-20 agenda, it is not there. the fact that putin and obama aren't necessarily going to be speaking to each other doesn't necessarily mean that the whole host of american delegates here and a whole host of russian delegates aren't going to be speaking to each other about a whole host of other issues, they will. they'll talk about allthings tr joint communique. back to you. >> steve, thanks for that. the latest from the g-20. president obama is flying there now from stockholm. michael pervis with me, and
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hadley gamble, our middle east correspondent. hadley, let's kick off with you first of all. how do you now see this progressing with u.s. congress? >> well, it is interesting, ross. what we have seen over the last couple of days, some grueling discussion, some grueling talks with secretary kerry, secretary had hagel, and what i saw yesterday was interesting with the house foreign affairs committee. they were asking secretary kerry about that syrian opposition and he told them that between 15% and 20% of the syrian opposition are the bad guys. didn't define what those bad guys, who they are, what they're doing in syria. but you saw president putin calling him out earlier today, talking about, you know, secretary kerry, lying to the congress. wasn't necessarily lying, but wasn't pointing out that opposition is made up of elements of al qaeda and other militant islamists. secretary kerry, a grueling process, these kinds of hearings, but tired and tripping up. and you saw the president in comments earlier also looking very, very tired.
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so you're kind of seeing in congress this playing out in a very grueling fashion for everyone from the obama administration. >> michael, let me bring you back in here. as this continues to play out, as hadley calls it, we had this trade, this flight to safety trade. how is syria, if we continue to weigh up a strike and we get one, how will that be set off against things like fed policy? >> a great question. just a couple of comments in terms of how the markets will respond here. classically on the launch of a missile, you know, you'll see equity sell-off, volatility spike, oil to spike, and gold to spike. the -- this process, however, is one really of much more sort of a grinding as your guest pointed out, a grinding consensus
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building type of process. so what i think is really happening is that keeps a little bit of a ceiling on equities, a floor under volatility, and gold and oil prices here. once we actually, if and when we get an attack, i think what, you know, the big question there is what is the, you know, which instrument or security moves the fastest or the most dramatic way. and i would suspect that might probably be oil and volatility. if you go back to what happened after 9/11, or the first gulf war, these moves tend to often be rather ephemeral unless there is big fundamental damage to oil supplies here. so you have to be kind of quick and keep in mind that the fed will be watching this as much as anyone else, and as it relates to the tapering as we discussed, you know, in the earlier segment.
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>> but, michael, i can't help thinking that world markets keep using tapering and now syria as an excuse, an excuse to create volatility in the oil markets and excuse not to buy u.s. and other global equities as well. i don't even know how much oil the syrians produce, it is so small. surely if there is a limited attack, it is not going to affect world oil supplies in the slightest and it shouldn't really affect the global investment attitude. >> well, you're absolutely right about the syrian oil production. however, the -- it is really a question of the unknown unknowns as to how other players, not the syrians, per se, respond, but how other players in the region respond. and that's really the question mark there. and, you know, you're absolutely right. oil has risen. brent has risen pretty dramatically for a lost reasons. >> okay. >> certainly part of this. >> michael -- >> this is already in some of that level.
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>> we got to go. thanks very much. michael, hadley, steve, that's it. "squawk box" is up next for our viewers in america. for our viewers, we continue with ecb.
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good morning. todays' top story, key decisions from the boe, ecb and boj. abc plus. an early read on jobs ahead of friday's government report. adp, employment report set to hit the tape at 8:15 eastern. it is thursday, september 5th. i've got consonants and vowels all over. it is 2013. "squawk box" begins right now. ♪ good morning, everybody. welcome to "squawk box" here on
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cnbc. i'm becky quick with joe kernen. andrew ross sorkin is off today. we start things off with the economy. the bank of england and the ecb are both holding policy setting meetings today. that boe decision is due out at about 7:00 eastern time. the ecb, alphabet soup, 45 minutes later. both central banks are expected to keep rates unchanged. we'll have more from our colleagues in europe in a few minutes. in news out of asia overnight, the bank of japan voting to maintain its monetary stimulus. the boj offering a few more upbeat economic views than last month on growing signs that its expansionary policy is working. the numbers are still hard to get your head around. they'll be expanding the monetary base at an annual pace of 60 to 70 trillion yen. >> you added a boj to the boe and the ecb and the adp. so you added another one. >> yep. >> the yen is apparently when you're going to talk about now. >> the yen, in response to everything. look and you'll see what happenit


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