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tv   Worldwide Exchange  CNBC  October 22, 2013 4:00am-6:00am EDT

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hello. this is "worldwide exchange." i'm ross westgate. get ready for a rare event jobs tuesday. the september u.s. jobs report due today after being delayed by the government shutdown. a cnbc poll suggests 64% of people think payroll will miss forecasts. conflicting signals about the future from european corporate, chp and novartis trade higher. they've warned the volatile fx rate will hit its outlook.
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shares down despite forecasts beating figures. analyst caution the smartphone market is saturated. the ceo tells us there is growth potential elsewhere. >> even in the lowend smartphone, there's the low end opportunity for many components. and we see generally that growth of low end and entry level phones. >> and apple is looking at the next shot in the tablet wars today, expected to unveil new ipad devices, big and small. plus, seg gets a billionaire boost. bill gates buys a stake. now the second biggest now the second biggest shareholder in the company. hello and welcome to this
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jobs tuesday. you know, it makes sense. coming up on today's show, patrick, cena are growing novartis has delivered the right medicine with improved abroad. guide kwans. . and we'll head stateside to speak with one strategy that says the good times are here to stay. why is that? we'll find out at 11:40. any comments on this jobs tuesday? e-mail us, trust me, that is the e-mail address. now, it's better late than never. the u.s. september jobs report is out at 8:30 eastern delayed by 2 and a half weeks because of the shutton.
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unemployment is expected to hold steady at 7.3%. the september report will be less influential than normal. it doesn't reflect the impact of the shutdown. the october jobs report will be out in two weeks. bearing all that in mind, of course, what are we supposed to do today? keith way will join us later. he thinks the fed now may delay tapering until june next year, no matter what the unemployment number says or does. we'll have a full preview of today's jobs report with him in an hour's time. every week, cnbc is asking you to talk the trend by taking part in an online poll. today, it is about your prediction for the delayed u.s. jobs number. so far, 64% of you think the number will miss expectations. head to to
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cast your vote. you'll be able to see the trend straightaway. you'll have your say on twitter using #traderpoll. european earnings season in full flow today, as well. a number of corporates making big news on the stoxx 6 of 00. kpm has reported a 230 million euro loss in the third quarter. banks posted better than expected figures. the bank's president and ceo told "squawk box" europe where they're seeing improvements. >> you see dependic demand quite strong.
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the uncertainty in europe and the rest of the world is hitting the export industry. there is not a lot of credit demand at present. domestic consumption comes through in higher conditioning for us. bhp has raised its iron ore production. it helped push australian stocks to a fush five-year high. and chips on holdings has posted a near 40% jump in pretax profit. but investors remain concerned about the saturation of the smartphone market. the ceo has been speaking to cnbc this morning. he's explained why the rise of the smartphones is a big growth opportunity. this is what he had to say and you can get full analyst redaction at 10:10 cet. meanwhile, novartis now says it expects generic drug competition to cost the firm $2.3 billion this year, down from the $277 billion it
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forecast in july. announcing third quarter sales of $14.34 billion, the ceo says he has given up on trying to predict when rivals will launch a competitor to the blood pressure pill diavan. the company raised its full year forecast after reporting earnings per share of 1 euro on 26 just below reuters forecast. all right. novartis stock, he's up about a percent at the moment. andrew, good to see you this morning. thanks so much indeed for joining us. >> good morning. >> what's the big headache, then, facing novartis? are they going to get more new drug launches identity?
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>> it's twofold. diavan is being delayed in its generization process in the united states. we've heard the rembaxy has a plant now inspected by the fda so that we should have it kick in in 2014. scheaf got a large pile pipeline. each of these big products has a lot of competition around it. they're not unique and, therefore, they have to have large marketing forces. and the special education that they've always been claiming, i think, is just less pronounced than they believe. and that's what we've actually seen, a 3.7% margin decrease in this quarter earnings because they have to beef up the marketing to keep lucentis running, to keep tusina running.
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these are all big franchises that need to compensate for the generic pressure that's been hitting for the company. >> pricing pressure in the u.s. is fading. and we've just laid out what they have to do with the pipeline, as well. what would it take for you to change that? >> billion, it really takes time. our issue is that we think that expectations are too high. we are still about somewhere around 5% below expectations of the market consensus for 2014. we used to be 15% below and we didn't touch our numbers much and consensus has been coming down and the share price has been coming up in the meanwhile. so we do see our reduced rating in some ways confirmed as it has
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underperformed roche potentially over the past month. but in absolute terms, it has not come down. it did keep up with the swiss market relatively well. >> just one thing generally. as the big guys become too big, for the size that they are, it seems to be really hard for them to come up with the blockbusters to sustain. how big is the r&d challenge? >> the r&d challenge is an interesting question. the size is one that hits the company because they have grown to a bulk oftwolock bursts is no move the needle. so u'ch blockbuster out there so you can show a double digit revenue
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growth. so that leads over to the r&d question. how much r&d do you need to be spending so you can discover multiple blockbuster at this point in time. some companies are more fortunate than others. we're seeing the trend in the drug industry that some of these are splitting up, they're selling them off or they're breaking down drugs into medicine tech companies. all in an effort, basically, to reduce the size of the company without saying, this is an impossible challenge. they're trying to show the investors, here, now you have one company, now you have your shareholder in two of them and each of them will try to show growth and try to drive premium valuation. >> thanks, andrew rice, for joining us. bank of england's charlie
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bean is speaking at the society annual conference in london. he's come out with a few comments already. the size of the recovery maybe gaining contraction. pathways to growth have moderated. the markets haven't collapsed the decision driven in the uk by domestic outlook andhe banking union can't be complacent on a bubble rift. right now, though, it's time to catch up on all the market action ahead of the u.s. employment report. decliners at the moment, currently, just about outpacing advancers. the ratio is somewhere along the lines of five to four. it's a pretty even stevens at the moment as we head towards the employment report a little later. what about european equities? the ftse was up 311 points. t up points this morning.
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very limb losses for the rest of the year. the ftse mib pretty flat. take a look at where we are with bond yields. right now, they've just come back 2.9 the%. we hit the.6% on friday. as far as the currency markets -- by the way, keep your eyes in gilt. we've got public finances coming out. a little firmer today, the pound down to 98.34. the currency markets haven't done an awful lot in 24 hours. it doesn't really tell us anything. and we'll take our eyes on commodities, as well. the interesting is a pred between brent .nymex.
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around 10 bucks. that's the widest around six months for april. gold steady at 1314. holdings in that the lowest since 2009. holding down 430 tons this year. one of the reasons, gold prices down 21% in 2013. copper just a little b as well. how have they traded in asia ahead of that event today? sixuan lass more for us in singapore. sixuan. >> thank you for that, ross. asia markets pretty much flat at the moment on this jobs tuesday. the china markets leading the losses as banks and resources sectors fell out of favor on worries that growth may people
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sending signal for the tightening bias. positioning for another net liquidity train this week. felt the pressure on fears soars in housing prices may lead to the curb. the shanghai composite lost almost 1% today fp. in hong kong, the hang seng index pulled back from its one-month high ending down by 0.5% with the hopes of china mobile seeing its first ever earnings decline since its ipo. japan's nikkei ended upper by 0.1%. in sectors as steelmakers were held back by losses in financials and technology shares. the kospi still ended higher by a modest 0.1%. and in australia, the asx up
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0.4%. back to you. >> sixuan, thanks for that. see you a little bit later. now, shares of the designer are better than expected. arm post add near 40% jump in pretax profits. they said earlier the rise of lower cost phones present big technology issues. >> even in the low end smartphone, there's an opportunity for many components. and we see generally that growth of low end and entry level phones in developing countries as a huge, positive trend for its partners. >> joining me in the studios, nick james, director for equity research.
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there we go, nick. why is the market being a bit sniffly today? >> i think we all agree that lowend smart phones are a growth opportunity. lowend smartphones are substantially cheaper than the high end smartphones. so high-end smartphones sell for over $400. these hand sets are selling in asia can be well under $100. and that means two things. it means that there's a lot of pressure on the prices in those chips. and it means that they're more and more commodity like devices. whereas the high-end market, you don't get the opportunity in high end smartphones. >> you have to pay a license, don't you? >> you have to pay a license, but the royalty is a percentage of the chip selling price. so it's a chip ee rosing in
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price every year. >> do you get a license per chip use? >> a chip ender with license arms technology will pay a and they design the chip and then that chip goes into production. once that chip starts selling, the licensee is paid a chip value. >> it doesn't matter how many phones it ends up in? >> it matters because that's a percentage of the -- >> i get the point that, therefore, lower margins, lower prices. the point is, does that get balanced out to be a lot more phones? >> there's more phones being sold in the marketplace. >> the cheaper smartphones, you sell a lot more high-end. >> cheap smartphone is going to be replacing what is called a feature phone. that's a good thing. that's probably going to drive the price of the phone up a little bit. really, all this is taking functionality which is getting older and older, which is what
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happened with feature phones as they became more and more advanced. this tenl gets older and cheaper. that's causing the smartphone market to grow now is using older, cheaper technology to move things forward. it's a more generic product which means that the percentage of the chip price is going to obviously be a lower number which means it's going to be less of a growth driver. >> so having just reported an increase in growth, what are they supposed to do differently? >> i don't think they need to do anything different. it's about market expectations. the market got very excited about the fact we had strong growth rates in pd royalty. and this course, the peat ya rate slowed down to 14% year on year growth. it's going to be about 12. it's all about expectationes and people got very excited about
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the high growth it was getting from smartphones. there's lots of other opportunities out. but it's going to take time for those markets to develop. in the meantime, the rates of growth may well slow down and the rates of growth that we've seen over the past two quarters. >> nick, good to see you, thanks for that. and it may be time to trade in your old ipad. apple is holding an event in san francisco at 1:00 p.m. eastern expected to unveil the next version of the popular tablet. reports say the new version will have a faster are on the processor and the first new redesign since 2011. leaked images suggest it will look a lot like the ipad mini. speaking of which, apple is expected to introduce ipad mini 2 which will be faster and may have the display feature that's currently on the bigger ipad. apple stock is up 0.5%. you don't trade in your ipads,
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you just give them to your children. that's the way that works. meanwhile, nokia has been unveiling new devices taking place in abu dhabi. the finish company has showcased a new phone, the lumia 320. it comes equipped with a six-inch screen as well as windows power tall let called the lumia 25 20. more tu gal has said they'll do everything they can to avoid a bailout. is the european banging union a crucial set? more when we come back. 0 that's a good thing, but it doesn't cover everything. only about 80% of your part b medical expenses. the rest is up to you. so consider an aarp medicare supplement insurance plan,
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bill gates has invested in fcc. fcc took a hit from spain's property crash, but since june, its shares have doubled in
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value. so what we're asking is what does bill gates do with a spanish construction company? and what does he know that we don't? send us in your thoughts on what that might be. e-mail us,, tweet @cnbcwex or direct to me @rosswestgate. eurozone countries must reveal how to deal with their dead hidden banks by late november. this week, country leaders will gather in brussels with banking unions once again high on the agenda. before such a move can be xwlekted, the ecb wants to test a t health of the biggest european banks in a draft seen by reuters. demands the country outlined within five weeks just how they plan to help banks in trouble.
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how would portugal -- portugal has the capabilities to deal with banks in trouble. >> it doesn't have the same problems as the lakes of spain or ireland. i pointed out to him the idea as a company operating in one of the cool companies would suffer from higher financing condition and i asked him what are they doing to address those things and to bridge the gap for some of these corporate and provide support. listen in. >> the best thing we have to do is impact that and that is a problem is to win our battles to the markets next year. that is the best political measure that we can take. also, it is important that europe does its part. we are talking about european union banking for too much time
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now. and it's time to accomplish it. there is a difference on financing costs between a company that is operating in portugal or its financing in portugal versus its competitors in a lot of europe that is unsustainable in a european market. you have to separate, definitely, the financial risk. it is not affordable, not sustainable, it is not fair that portuguese companies with the same balance sheet of their european competitors, across from financing that is sometimes the double of its -- or their competitors. this is not sustainable in terms of long-term, especially when you're talking about a single currency and a single market. >> does the political risk
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element here when we had the trouble back in july, then it being fresh elections, can this coalition government hold together there and implement what the policy needs? >> well, i would say that this government is quite -- and aside, you have problems in europe, so it's implementing such demanding assistance program. with austerity measures like the ones that we are to take in 2012, 2013, and now in very much focused in public sector in 2014. i think you should not -- in order to do something in light, you should not focus in problems. you should focus on the way you you should focus on the way you saw the problems.
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>> so putting all these brands together, will the portuguese government do whatever it takes to avoid a second bailout program? >> we are doing whatever it takes. sometimes we have strong internal costs, but there is strong commitment, almost an object session to reek over our sovereignty and that will be only possible if we end up this assistance program in july 2014. >> the portuguese economy minister speaking to me earlier. they want to end this program next year and give up a cautionary program. so a very different tone if you
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compare them to the likes of ireland. >> why are they so intent to regain sovereignty? if you're going to go to banking union -- >> it's more europe. it's not that more europe any more. >> you have less korchbty. >> i don't think they want to be dictated to any more. that's the point. yes, you give up something. but the time for more europe is over. they want to be more so fest indicated about how we do it. >> more europe is the answer. >> more sophisticated about how we do it. >> that's not what jean-claude trichet says. a federalist in the european commission are still -- >> i think we have too be a bit more selective about what we do. >> i'm not saying that's what i want. i'm just saying that's -- >> i know. but i'm exciting the european cause. i have to. >> the european cause is a federal europe.
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they have to. julia, thank you very much. the italian prime minister is coming out saying he prefers a supernatural bank. we'll keep our eyes on that. meanwhile, the green finance minister says his company is still shrinking, but at a slower rate. gdp was likely to contract by around 3% in the third quarter, easing from 3.8% in the second. improved tourist revenues were cited for the better performance. wooefk hearing from mr. charlie bean this morning. we just got the latest snapshot of uk public finances. september public net borrowing up 11.1 billion. it was $12 billion one year ago. that numbers was as expected. so no surprise there.
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the cash requirement, 600 million versus a contraction 2.1 billion this time a year ago. sterling unmoved by that because that's pretty much what we thought we were going to get. we'll take a short break. still to come, bhp has helped the asx hit fsh five-year high. the australian index following first quarter earnings. we'll have more on the mining giant's numbers and its output on iron ore output when we come back.
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the headlines from around e t. it's jobs tuesday. the september employment report due today after being delayed by the government's shutdown. a poll finds 64% of payrolls will mix forecasts. conflicting signals about europe's future. bhp and novartis trade higher. volatile rates have hit its outlook. rates are down despite the chip designer beating forecasts. analysts have cautioned the smartphone market is saturated. cnbc is told there is growth
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potential elsewhere. >> even in a low yebd smartphone, there are many opportunities for components. and we see generally that growth of lowend and entry level phones. big guns in the tablet world. and home prices in china have their biggest rise in over two years. overvalued price necessary overvalued price necessary germany's seven biggest cities. we've got earnings out of china. $241.6 of million yuan for the zte. that reverses the loss from a
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year ago. the net profit for nine months, 551.6 million yuan. it's expected to turn profitable from 2013. this is a china telecom company. we'll stay with the earnings theme, as well. bhp billy to know has posted its forecast after posting strong results in the first quarter. iron ore deposits up 28.3 tons in the period while oil output jumped by 16%. the company lifted its full forecast by year to $212 million tons. bhp says it's now really to pull funding from underperforming units and focus on ramping up production. dominick snyder, thanks for joining us. have we seen the bottom, then inspect the bottom of the cycle for these guys? and is that base actually on those trade numbers we had out of china a week or so ago where
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we had record iron ore imports? >> if for you, the bottom, or if you look at cycles or over the tough two quarters, yes. if you look at the economy, it's going to accelerate towards the end of the year and from the fist quarter of 2014. from that angle, we should see some support. it's important to recognize that, really, towards the end of the year, the growth momentum should come from the developed world. you might question we are not yet there. we should see the american market come at best in the first quarter. so if you'd asked me about cycle, it's short-term. if you asked long-term is iron ore going to stay where it is, i don't think so. i think it's still 10% to 15% downside. there's a lot of supply coming. i think that pushes prices down and i think bhp is a good example of where the supply is going. >> okay. do you think bhp and rio both saying the same sort of things. do you think they're now saying we're going to ramp up production? do you think that's a mistake, do you? >> well, at the end of the day,
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some of them are really on the low cost side. so you try to maximize as good as you can, try to benefit from the high price that's we have right now. as i said, if you look in terms of the supply output, then we can price out some of the high cost chinese producers. and that means it can come off another 10%, 1015% rather quickly in the second half of 2014. so i think try to profit or benefit as much as you can in the short on run. that's their strategy. >> meanwhile, the ubs commodity index up 2% in the third quarter. that's a first positive return for three consecutive quarters. but presumably, from what you're saying about iron ore, would that be reflected in that commodity index, look, let's take it while you can, it's not going last? >> well, looking at the dow jones ubs, that's not part of it. you might see more performance towards the end of the year. that's what i just mentioned was the top down story. so you look at what is the
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economy, what is the demand point doing? but if you think about it, many of the commodities have a decent supply side. then you need to be careful some of the prices you might see mony to sustain. so if you give me a total return outlook for the dow jones on a six to 12-month basis, then it's probably basically flat. so you shouldn't get too optimistic. you're probably taking some of the strength you see in the metals as an opportunity to exit. >> just talk about energy briefly. we've got the spread between nymex and crude. it's over $10 tl. we haven't seen that since sometime in april. big stock billed in the united states, could that spread get wider? >> thee receipt cannily, it could get wider. if the growth rate continues with an additional 1 million barrels growth over the next 12 months, where are you going to put all that crude? there's still the risk,
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especially some of the pipelines, let's say, do not function the way it's predicted, then it could easily have stock billed. so from that angle, the spread could wind. but beyond $10 a barrel, it's unlikely to last. potential is there. what supported the crude oil price in europe was the altitude. globally, we lost 3 million barrels, so the tightness is felt mostly in europe. >> good to talk to you. thanks for that. dominick snyder, head of global research at ubs wealth management. australian stocks are up. to get more on that, follow us on twitter @cnbcworld. charges related to tax
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evasi evasion, he now faces extradition to the u.s. following allegations that he helped u.s. clients with $20 billion worth of assets to avoid taxes. here is something you don't expect to see at the deli counter. shoppers in the u.s. got more than they bargained for when an alligator popped in. he wandered through the car park and right through the entrance. staff eventually locked the store while police managed to gate it away. i think he just wanted a pack of m&ms and a pack of coke. anyway, there he was making his way away from the store. he didn't have any credit, though, that was the problem. now, just days ahead of the check parliamentary election, artist david kerney has
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formulated casts on the table or floated them on the river in prague. he directed this 10 meter high statue which is meant to urge people away from voting for the communist party. i think we're seeing it from the wrong angle. anyway, let us know what you think of that. it is an extraordinarily long middle finger. e-mail us, we're deaf fltly seeing it from the wrong angle. still to come, china's oil giants are getting a bit of a piece of the pie. is the world's second biggest economy still thirsty for black gold? we'll get more from hong kong when we come back.
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we're just getting auction results out now from spain. 0.3% on the yield. right. now it seems warren buffett isn't quite as keen on tesco as he once was. his company speshg shire hathway
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has taken its holdings down 2%. it comes two weeks after the company led a fall in profit led by 56% dip in its earnings in europe. shares in tesco did end the session in positive territory today. it doesn't get flatter than that. shares in construction company fcc are rallying after winning a surprise vote of confidence from bill gates. the microsoft chairman purchased 6% of the group for around $165,000. it makes gates now the second biggest shareholder in the firm. fcc took a hit from spain's property crash. but since june, its shares have doubled in value. so the big question is, wa does bill gates know that we don't?
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join us, e-mail us, or tweet us, @cnbcwex or direct to me @rosswestgate. is bill gates the new property guru in spain? who knows. meanwhile, house building in britain is now making its strongest recovery in over 15 years. but supply is still fail to go keep pace with demand. this showing a 10% surge in london house prices over just the last month. at the same time, the bundes bank, germany's central bank has found city apartments may be significantly overvalued by as much as 20%. it suggests against the back drop of low interest rates, the outward price pressure is unlikely to ease in the short-term. another flag for the bull. japan is seeing its own price build up. fushiko koshido has the story
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for us from tokyo. >> hi, ross. the nikkei's reporting chemicals and home building company first half operating profit likely surged 83% on the year to over $700 million. that would be a new record for the first half, beating the company's initial outlook. driving the surge is the home building business, accounting for a quarter of total sales for the first half, likely climbing 17%. demand for home purchases is picking up ahead of april sales tax hike. the other core segment in the chemical business has picked up sharply, as well. with these results, the company's full fiscal year operating profit is expected to hit a record high of $1.3 billion. and demand in home orders is expected to continue into the second half. shares traded up 2.7% today. >> thanks for that. have a good evening in tokyo. we've had numberes from
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china, an indicator that may encourage beijing to step in to cool the property market. this is now the ninth straight month of year on year increases. joining us from hong kong is peter towel ross. what do we make for all this property news? >> you mean the chinese property news? i think in china it's very clear, it's basically a sign that china is back to its old ways. so all the talk about rebalancing, economic reform, shifting away from investment towards consumption, liberalizing interest rates and so forth, what we're seeing is that chinese consumers are voting with their wallets. they don't want to put their money in bank accounts where they are getting a subinflation rate of return on deposits. so they're buying property and they're buying property, interesting, the biggest prices were in the prime cities, if you think, sort of beijing,
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shanghai, gaun show. the places where people will presumably want to live in the future and where price res expected to hold reasonably steady. that's why we're seeing the biggest increases. it makes everybody feel good, creates a wealth effect and probably kind of generates some economic activity, as well, in the short-term. but in the longer term, it's worrying because it shows all the talk about rebalancing and shifting away from china's old economic growth model isn't having much effect yet. >> and how much of this is also because of restrictions on capital controls, and just investable assets? if you're wealthy in china, you have ways of getting your money
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out of the country or find ways to invest your money in. but if you're part of the middle class, you have very few options. if you put your money in the bank, deposit rates are capped to 3%. you're getting less than inflation. your savings are being eroded. you can buy some sort of funky wealth management products to offer a better rate of return, but those have been cracked down upon and it's less clear that you'll get all of your money back in that case. so people are going for bricks and mortar. they've been doing that for years now. really what the signal is is that people think this speculative bubble in property, it's not necessarily a leverage bubble, it's basically people parking their cash in housing. but that will continue for some time. >> leverage is the key point, isn't it, peter? if people are buying with cash, you can with stand the hit, right? it's forced selling on leverage
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that's the issue, i suppose. let's move on. a couple of other things we want to talk about, as well. we've got some flashes coming out from the pboc, as well. china's pboc might tighten slightly in terms of policy response. at the same time, state backed petrochina and cnoc are among a group of oil giants securing a bid for brazil's libra oil field. the consortium which includes petrobras, royal dutch shell is estimated to hold up 12 billion barrels of oil. demonstrators rallied against it and demand all oil fields be nationalized. but the chinese companies will hold far less than initially expected. and it all comes as china embarks on a more aggressive investment push abroad in a bid to secure its energy and
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resource needs. according to research from the heritage foundation, china's global investment hit $42 billion in the first half of 2013. it's up sharply from just 9.9 billion in 2005. sub-saharan africa is up. we know china has been clearly an investor in resource around the globe. and they were in this resource global fight. i suppose the question is whether that -- you said they haven't diversified in the home economy. the question is whether international investment gets diversified, as well. >> well, i think it's not just oil. obviously. they've been buying pork producers in the u.s. and so forth. so there is broader investment going on overseas investment going on from china. but you're right. resources is still the main source of investment. that's what accounts for a lot of those large numbers.
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and i think what's interesting, unical in the u.s., you had last year the long, drawn out debate in canada about whether it should allow chinese to buy nexa in one of its oil experience companies. and, really, what appears to be happening is that china is sort of shifting away from making these high profile big acquisitions into focusing more in the partner. so this brazilian example is a good one. the chinese companies were spec'd to dominate. they've come in with sort of 10% each behind two big established western oil majors. and when we've seen that elsewhere, as well, chinese companies buying sort of assets from other companies, buying into blocks, buying partial
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stakes, investing partially in a way of trying to do this under the rarity without to attract sort of the high profile strutny and opposition that some of the previous acquisitiones and teamed acquisitions have attracted. >> absolutely right. trying to go maybe a little bit under the radar. is that -- how much of a new model is this going to be? it was interesting, of course, they this consortium yesterday to build nuclear power station. this clearly is a nervousness about chinese data and enterprises he investing into international products. >> the risk is nervousness. i mean, i think it's more or less justified depending on what
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type of investment you're talking about. to be honest, buying a canadian oil explorer, which is already publicly quoted and kind of has international shareholders, whether that's owned by a chinese company or by international investors, it seems to me from a canadian perspective, it doesn't make that much difference. clearly having chinese money helping to build your nuclear power plants in the uk, the uk has taken the view that that's welcome. so the uk has taken the view that everybody's money is equally good in that situation and they will welcome it. but i think it varies. clearly, you know, we talked -- we have had the discussion recently about lenovo, the chinese company being interested in buying blackberry. that would raise a lot of hackels and worries about security in the u.s. and canada. so i think it varies from sector to sector about the sensitivity of those and also, really, about the identity of the buyers where you're talking about the
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state-owned companies or private companies. it's clear that chinese investment abroad is going to continue to increase. i don't think there's any doubt that that will happen. and so it's up to china partly to make sure those doing the investment are more transparent and, therefore, more acceptable to the rest of the world. >> peter, thanks for that. always good to see you. have a good evening in hong kong. still to come, delayed september jobs data from the u.s. is set for release today at 8:30 eastern. we'll dig into that right afterthis. ly in my 60's... i've got a nice long life ahead. big plans. so when i found out medicare doesn't pay all my medical expenses, i got a medicare supplement insurance plan. [ male announcer ] if you're eligible for medicare, you may know it only covers about 80% of your part b medical expenses. the rest is up to you. call now and find out about an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company.
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hello. 24 is "worldwide exchange." i'm ross westgate. get ready, it's jobs tuesday. september employment report due today after being delayed by the government shutdown. a cnbc poll finds 64% of people think payrolls will miss forecasts. conflicting signals by the future for novartis. and the big guns are still firing in the tablet wars. nokia and apple unveiling two new models. microsoft surface two going on sale. and the s.e.c. gets a -- fcc, sorry, get a billionaire
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boost. shares in the spanish construction company up nearly 10% after bill gates buys a stake. it becomes the second biggest shareholder in the firm. >> you're watching "worldwide exchange," bringing you business news from around the globe. all right. a warm welcome to you. if you've just joined us stateside here on cnbc's "worldwide exchange," welcome to the start of your global trading day. yes, folks, it's jobs tuesday. 2 1/2 weeks later, of course, for the u.s. employment report and that's going to guide us, really, as far as futures are concerned. pretty flat. especially yesterday. the dow down 7 points. the s&p up 0.1%. we're going to be cautious with these futures until we get that number. futures at the moment, around about 8 points below fair value on the dow. the nasdaq at the moment is some 6 points below fair value and the s&p 500 is actually, 1, a point .a bit below fair value.
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all of that will change extending what the employment report says. it may not be very much because it is before the government shutdown and is likely to get revised in two weeks time when we get the october jobs hav rbe flat. we're over two hours into the session. the ftse is up 7 points. up 31 yesterday. the xetra dax, cac 40 down around 0.2%. average it out. the ftse mib is up 0.1% as well as the ftse 100. as far as treshy yields are concerned, 2.55 was the yield on the ten-year on friday. gilt yields, 2.7%. we have public borrowing figures which came in as markets expected. on the on the currency markets, dollar/yen -- well, commodity markets, let's kick off with those. the spread between brent and nymex, we got big stock build in the united states. that pushed this spread to over $10. nearly the widest since -- well,
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actually, nearly $11. near the widest since april earlier this year. and what we've got is the stock pushing nymex prices down, brent being supported by the likes of nigeria and libya, as well. spot gold steady at 1310. we had a big drop in more holdings of the gold trust yesterday. holdings down 430 tons on the year. copper steady at the moment. now let's take a look at treasury yields for you. currency markets, i'm getting behind myself. currency markets, let me tell you, euro/dollar, 1.3671. dollar/yen, slightly firmer on the session. aussie has the sterling handle. actually, on a 24-hour basis, we haven't done an awful lot on the exchanges. people not willing to make a huge number of betts. that's where we stand in european trade two hours into
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the session today. to recap what's happening in asia, li sixuan is with us out of singapore. sixuan. >> thank you for that, ross.hea u.s. jobs data. china markets losing ground as banks and resources sectors fell out of favor on worries that q4 growth may slow. and the peoples bank of china sent signals with the tightening bias, skipping open market operations for the second straight session, positioning for another liquidity drain this week. and they weren't listed, property place felt the pressure on fears that soaring housing prices may lead to more property curves and the shanghai depositit lost about 0.8%. in hong kong, the hang seng index pulled back ending down by 0.5%. index giant tumbled over 3% after posting its first ever earnings decline since its ipo. and japan's nikkei 225 managed
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to end higher by a modest as ross just talab slightly termer dollar ahead of the yen. in south korea, gains in defensive sectors and steelmakers were held back by losses in financials and technology shares. the kospi still ended higher by 0.1%. meanwhile, australia miners helped to push the asx 200 to a fresh five-year high. so the index continued to outperform its asian peers, up 0.4%. back to you. >> sixuan, thanks for that. so it's better late than never. the september jobs report out dhad by 2 1/2 weeks because of the shutdown. just so you're aware, nonfarm payroll res forecast to rise by 180,000 versus the 169,000 in august. unemployment expected to stay steady at 7.3%. it is, of course, being released later. it won't reflect the impact of the shutdown, which will likely
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slow highing and the numbers are certainly to be revised in two weeks when the october report comes out. but bearing that in mind, how many attention should we give it? keith wade from schroeders joins us now. morning, keith. what are we going to do with this firth? >> i think it's quite an important number because it does tell you the pace and growth of the u.s. economy going into the shutdown. so it will give us a good picture of what's going on in september. you're right, the numbers do get revised subsequently. but the markets put a lot of attention on that nonfarm payrolls figure. the unemployment number itself is very important because that, of course, is the thing that the fed is targeting as a benchmark for when it's going to start raising interest rates. so still important, but i think the real problem for this release today is, of course, we are now after this one. we go into a bit of statistical fog, if you like, because the
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shutdown will affect the numbers going forward. so then things could get more difficult to interpret. the october payroll number could have been affected by the shutdown. either directly through the collection methods or just because of the layoffs that took place as a result you may get a bounceback in november, which would mean you won't be a clear number until december which won't be released until the new year. so it could be sometime before you get a picture of the u.s. labor market. >> and that takes us into more political hurdles in february and january, as well. so most people now think march is the earliest they go. you think it might be even later than that. >> it's possible that they could
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go later than that. quite a lot depends on the debt ceiling and what happens at the beginning of the year. i would have thought that, again, created distortions in the data in a way that would cause the fed to hold off longer than it could even push itself out to swrun. >> june. why is june significant? why june and not may or -- >> well, after march, june is scheduled to have a press conference with the chair. which would be janet yellen. that's when the chair has an opportunity to explain the reasoning behind a particular decision. kind of thought that the big decisions would take place in those press conference months. it's kind of funny, you don't make a decision based on when
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the press conference is being held. >> absolutely, but you see the same thing happening here in the uk with the inflation report. it's a bit of an artificial timetable. >> i'm sure there is nothing stopping the fed chief from having a press conference whenever he or she would like. just on the political front, you think the next time around will be slightly better? >> i do. two reasons for that. first of all, the republicans took a bit of a bashing in the opinion polls as a result of this recent slowdown. i think they would want to avoid that. so i don't think they'll want to risk the kind of arguments that we had before.
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there's the possibility, as well, that the treasury has more scope to extend the debt ceiling further on. so i think there's less likelihood that there will be the same shenanigans that we come to when we come to it in january and february. >> i hope you're right, keith. i really hope you're right. now, every week cnbc is asking you to talk the trend by inviting you to take part in an overline poll. this week, of course, we're asking you for your predictions in this u.s. delayed jobs numbers. so far, 64% of you think the number will miss the consensus of 180,000. you'll see the trend there. only 25% think that we'll be above $18 0,000.
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so the bulls are clearly in the minority. in addition to the unemployment report, there are a fair number of earnings. harley davidson, lockheed martin, after the close, we'll hear from amgen and panera bread. and we're just hearing out from gm india. inspectors may be charged for corporate fraud according to an official. gm officials in india may be charged with corporate fraud. we'll keep our eyes on that. when the financial authority fined jpmorgan last month, it
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said by virtue of the conduct of the chief investment office slond he wasn't given the opportunity to respond before the report was published. next arrested. he registered at a hotel which prompted his name to flash up on an international washt. he now faces extradition to the u.s. and it seems warren buffett isn't quite as keen on tesco as he once company, berkshire hath has taken its holdings of tesco down3.%. the move comes two weeks after the retailer posted a fall in first half profit profit. it was led by 68% in its earnings in europe.
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shares in tesco are moved up slightly by 0.25%. and shares in spanish construction company fcc are rallying after winning a surprise vote of confidence from bill gates. the microsoft chairman's purchased 6% of the group for around $155 million. it makes gates now the second biggest shareholder in the company behind its chair woman. s.e.c. took a big hit from the spanish property crash. since june, its shares have doubled in value. so bill gates making a leverage play on construction and property in spain. what does he know that we don't? let us know. join the conversation here on "worldwide exchange." e-mail us,, tweet or direct to me @rosswestgate. right. we're in the thick of earnings season. the misses in europe moving the
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stoxx 600. that's coming right after this.
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a recap othmorning, get rea delayed data. september nonfarm payrolls due out at 8:30 eastern.
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nokia, my row soft and apple are fighting for space in the new tablet market. and bill gates makes an investment in the spanish construction company fcc. >> european earnings in full flow today. former american mobile targets kpn has reported a 243 million euro loss in the third quarter. the dutch telecom group residential unit said relations with american mobile remain cordan. kpn's position will remain the same. nevertheless, the stock up 1.6%. bhp billiton, the diversified miner up nearly 3%. iron ore production for 2013, they are increasing, this after reporting a 23% year on year
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increase in the third quarter. thexpect it to push australian stocks up to fresh five-year highs. now, another german company today complaining about the strength of the euro following sap asand adeedis trading in th red. its says its operating profit will not rise on the year. and in stockholm, swedbank up 4.3% saying it's seeing more signs of life in the economy. they told "squawk box" europe where they're seeing those improvements. >> if the domestic demand being quite strong, but you see the same pattern in sweden in that the uncertainty in europe and the rest of the world is hitting the export industries.
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there is not a lot of credit demand at present, but domestic consumption comes through in higher commissioning for us. >> swedbank also trading lower, despite the chip giant's better than expected third quarter earnings. earlier today, the ceo told cnbc the rise of lower cost phones, in fact, represents a growth opportunity. >> there's a big mix of components that go into smartphones. we see generally that growth of low end and entry level phones not just in developed countries, but in developing countries as a huge trend for its partners. still to come on the show, it's only been a month since apple unveiled the latest versions of the iphone. so what does tim cook have up its sleeve for today's announcement? we'll preview the big event, next. ♪
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an apple event in san francisco, 1:00 p.m. eastern. expecting to see lots of new ipads. a lot of concern about apple's ipad performance. union share is down year over year in q2. but there are three problems with looking at year over year market share numbers, trying to draw too many big conclusions here. one, we don't know how many tablets other people are selling because they're not reporting it. two, you can't make too much of year over year comps because last year in q2 apple had a new ipad, the third generation. this year, they didn't. apple is losing unit share, but probably not too much profit share at all. here is what we've got from apple. right now, the ipad mini at $329. the ipad 2 at $299 without the retina display and the fourth generation with retina display
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$499. what happens today? the rumor is we'll get an ipad mini with the retina display. because the mini has turned into one of the top selling ipads in the lineup, it might make sense for apple to offer one with touch i.d. and the latest chip. there's a question whether they can do that and maintain decent margins. expect to see a design shift in the full sized ipad so it follows more of the design language of the mini, possibly also some cover changes that fit the color scheme of the iphone 5c. it's possible that after tomorrow, the ipad lineup will look more like this. this he keep the nonretina mini around, drop the price to $279. give it an a-6 chip and then you get the layers of pricing on top of that, all the way up to the full size fifth generation ipad. we'll have to wait and see. josh lipton and i will be on-site in san francisco bringing you all the latest
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news. so tune in to cnbc. meanwhile, nokia is launching its new products. a power tablet called the luminia 2520. catchy name. the microsoft 2 surface tablets go on sale this morning, as well. the new york stock exchange is going to hold a test run for twitter's ipo this weekend. maybe they've learned something from the nasdaq. the market watch fund will be able to conduct to the system to ensure simulated trade toes ensure there aren't any glitches. incidentally, nasdaq did conduct a test before facebook's botched ipo last year.
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the nyse won't say where's that's a factor for the twitter test. we'll take a short break. head to our fresh blog post on attitudes towards internet dating. read up on why more and more americans go online to look for love. follow us, as well, on twitter @cnbcworld. earlier we told you how shares in spanish construction company fcc were rallying after bill gates purchased 6% of the you're fwrup for around $155 million. the move makes gates the second biggest shareholder in the firm behind its chair woman. so we've been asking what does bill gates want to do with a spanish construction company? what does he know that we don't? it's clearly a leveraged take. gates fcc turn around with
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global vision of citizen service, sustainability and technology cities. that's one thought. send us yours., tweet direct to me @rosswestgate or @cnbcwex. we'll talk about the employment data as we show you where futures are trading ahead of the open today. pretty flat, really. no surprise on that. we'll be back in a few moments. managing them, moving them, making them work. we oversee 20% of the world's financial assets. and that gives us scale and insight no one else has. investment management combined with investment servicing. bringing the power of investments to people's lives. invested in the world. bny mellon.
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this is "worldwide exchange." i'm ross westgate. a recap of the headlines. get ready for a very rare event. it's jobs tuesday. yep, the september employment report due today. finally, after being delayed by the government shutdown, at cnbc's poll finds 64% of people think payroll will miss forecasts. conflicting signals about the future of europe from corporates. chp and advancers trading higher. warning the volatile fx rate will hit its outlook. and the big guns fire in the tablet wars, nokia and apple unveiling new models while microsoft surface2 goes on sale. and fcc gets a billionaire boost. shares in the spanish
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construction company up nearly 10% after bill gates guys a stake to become the second biggest shareholder in the company. >> you're watching "worldwide exchange." bringing you business news from around the globe. all right. if you've just joined us this morning in the united states, a very warm welcome to you. very good morning. ahead of the u.s. open, ahead of the employment report today, u.s. futures aren't doing an awful lot. they didn't do much yesterday, the dow down 7 points, the s&p up 0.1%. right now, the dow is 11 points below fair value. the nasdaq is -- the s&p 500 at the moment is fairly flat. it's about a point below fair value, as well. the nasdaq is about 8 points above fair value. european equities, well, the ftse is up 0.1%. it was up 31 points yesterday. the xetra dax with the cac 40
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down over 0.1%. the ftse mib is flat. it's pretty much a lot of caution ahead of the better late than never september jobs report. it's out at 8:30 eastern. delayed by 2 1/2 weeks because of the government shutdown. nonfarm payrolls are forecast to rise by 180,000 versus 169,000 in august. and unemployment is expected to hold steady. it probably won't be as influential as usually. it won't reflect the impact of the shutdown, which has likely slowed higher and the number is almost certain to be revised in two weeks when we get the october jobs report. john is joining us now from boston. good to speak to you, john. bearing in mind all those caveats about this number, what should we do with it? >> maybe we should hit the
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snooze button and go back to sleep. but -- >> we're not going to do that, are we? >> no. i think what's going to happen is we're going to see this number at 8:30. as long as it's within that range, maybe, of 150,000 to 200,000, the markets will largely ignore it. there will be some issues over the participation rate, i'm sure, if the participation rate falls again, that will get a lot of play. if the unemployment rate does drop, that will get a lot of play, as well, if it's for the wrong reasons. but about 8:35, we're going to move on and start focusing on the october report out in just a few weeks. i think that's probably the game book. >> but then that will be clouded by the shutdown. how long is it before we actually get some clean data that we can actually pin any certain economic forecasts on and then the fed can make the decisions of.
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>> that's the key. we finally got all the different data releasing agencies yesterday chime in with when they're going to release the reports. and that tells you that it's going to be, believe it or not, late november, early december before they get everything back in order from where it was before the shutdown. so that doesn't give the fed almost any chance at all to have enough visibility to begin tapering in october. and i think right now tapering in december is a 50/50 shot because, remember, right before the disease fomc meeting what happens is that the new super committee in congress reports out, so that's going to create some more distress. but in terms of the data, i think we're a good six, maybe even eight weeks away from getting some clean data. >> time may be the best guide of what's going on is what we're hearing from companies, right? so what's your take away from what companies are saying about the health of the economy? >> you know, so far, so good. i think we had a lot of reports last week that looked pretty
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good. they're, you know, surprising, not a lot of issues over the government shutdown. which i think is good news. but, of course, those reports were only for through the end of the september. so the shutdown, of course, hit october 1st. so i think what we're hearing generally from companies is that profits look okay, not great. global sales look okay, not great. we're still seeing a lot of buybacks. we're still seeing a lot of dividends. that's helping to drive stock prices higher. but i think from corporate america's perspective, so far, so good. >> john, we'll take a pause. get your o.j. or whatever it is that keeps you going at this object scenely early hour in the morning stateside. we'll come back to you in a little bit. thanks for now. the u.s. government is calling on outside help to fix its troubled health care website. it has asked verizon to work on
5:36 am experts suggest verizon understands the government process because it has already contracts with hsc and medicare. on monday, president obama said there were no excuses for the bug affecting the online exchange. it crashed. meanwhile, netflix's success with original content like orange is the new black have investors seen green. we'll have more as after the break. mine was earned orbiting the moon in 1971.
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netflix continues its year long surge as the video streaming company reports blockbuster earnings. julia boorstin has more. >> netflix shares soaring after hours on better than expected quarterly results. the company reported 52 cents in earnings per share. that's three pennies better than expected and up from just 13 cents a year ago on 22% higher revenue of $1.1 billion. but it's not just about the bottom line. netflix added more subscribers than expected. 1.29 million u.s. streaming
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subscribers and 1.44 milli incidenter national subscribers to end the quarter with more than 40 million streaming subscribers around the world. and the company's outlook for the fourth quarter is rosy on par with last year's growth and higher earnings than expected. and the company's investment and originals seems to be paying off. hastings saying there's a halo effect and that it will double its investment in original content. but it is the exclusive tv series that draw a bigger percentage, the company's overall viewing. coming up, netflix says to expect more international expansion following the move into the nordics and the neitherererlands. and hastings says he's like to partner with companies to imbed netflix in their box. back over to you. >> and joining us for more from stamford, connecticut, edward.
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high end of the company's subscriber outlook, exceeding consensus estimates. can they keep building from here? >> i think they can. i think they've got great portfolio of contend. i think that they've got a service that is very -- you know, works very well for a large audience. i think they can continue to do very well from here. >> what's driving this? >> you know, really, i think what's driving it more than anything else is the strong content that they have, the exclusive series that julia was referring to as well as the original series. and i think that's what makes the value added experience for a subscriber base around the world. >> i mean, they're at a time -- is there is there a point when they get to saturation or not? they get more money, they can do better cob tent, and then does it keep going? >> i think you have a virtual cycle that you keep referring to. you have this key value of the content that they have. the content brings about a
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larger audience and the larger audience brings about strong word-of-mouth which brings about additional subscribers. the virtual cycle is key to this. but i think that the key thing is that at some point, you can get to saturation. we're not really sure where it is. but clearly, the stock is pricing in. its a significant sustained period of growth. >> and you've, transfer, raised the target price, as well. what are you now -- what's now your target price? >> we're now looking at -- we're still -- our target price is $370, which i think is still below where the stock will open or will be trading today. and i think the key thing here, you have to kind of keep in mind, is that most everyone is focusing on subscribers and subscriber head count. i think that's what's keeping the momentum going in the stock. to justify, a continued significant move from here what you're pricing in is a massive growth of subscribers over a period of time the
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and there may be a question of whether we get that massive -- are we starting to get to the point where we start pricing the stock for some sort of perfection or performance? >> well, we might be. but i think what's moving the stock more than anything else in the short-term is going to be subscriber growth and subscriber numbers. and it's short-term that's probably going be fairly good. but i think as you extend out over a period of time and you look at where things ultimately can go, that's where we're begin to go price in, you know, as i was saying, pretty sustained period of significant subscriber growth. >> wa about international expansion? how key is that going to be? >> i think international is really pretty critical. i mean, i think if you look at hbo as being a comparable service to netflix, and you see hbo subscribers are pretty significant in the international territories relative to the domestic market, i think international becomes, you know, very critical area for them for long-term in terms of driving
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their business and subscriber head count. >> all right. edward, good to see you this morning. edward williams joining us today. thanks very much, indeed, for that from bmo capital markets. now, texas instruments third quarter profit was down 20% on slightly lower sales and a higher tax benefit last year. ti is projecting revenues below analyst forecasts. the company struggled against lackluster demand in recent quarters. it's shifting away from mobile chips to embedded processes. which are used in cars and industrial equipment as well as analog chips. shares down nearly 3% in after hour. shares in chip designer armor also lower today in london despite better than expected third quarter earnings. they bostoned a nearly 20% jump in pretax profits earlier. the rise in lower cost phones presents a huge growth
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opportunity. >> there's a big mix of technologies that go into a smartphone, even in a low end smartphone. there's opportunity for many components. and we see generally that growth of lower end and entry level phones not just in developed cups, but in developing countries. >> in fact, maybe those words having some impact as the stock has bounced back, as you can see. it's now up 7 pounds, 1046. that's the ceo of arm. and is it to him to trade in your old ipad? apple is holding an event. apple is holding an event in san francisco at 1:00 p.m. eastern. it's expected to unveil the next version of the popular tablet. reports suggest that it will have a faster processor and the first redesign since 2011. images suggest it looks a lot like the ipad mini. speaking of that, apple is
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expected to introduce ipad mini 2. it will be faster and have a better display feature that's currently on the bigger ipad. apple's stock today in frankfurt, up about 0.3%. nokia has been unveiling new devices at an event. the finnish company has unveiled a new lumina, coming equipped with a 6 of inch screen as well as the lumina 2520. microsoft's new service2 tablets are on sale this morning. speaking of smiek row soft, speculation has been growing over potential success for steve balmer who required within a year. earlier today, mark herd was asked if he'd be willing to take the top job at microsoft. he declined to comment. instead, he focused on his own
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company. >> worldcorps asoracle is looki revenues. oracle is gaining share. we're investing about $5 billion in r&d, investing a lot of that into the cloud. into applications with social and mobile capabilities. and we're gaining share. we're pretty happy with our portfolio and our position. and a recap of the headlines today, get ready for the delayed data. u.s. nonfarm payroll figures due out at 8:30 eastern today. microsoft, nokia all facing new tablet peps. and bill gates make a move, the technology lendend buying a 6% stake in spanish construction company fcc. [ 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.
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european markets ahead of the u.s. open today. the employment report has been fairly mixed and flat. the xetra dax is flat. the cac 40 likewide and the ftse mib. we're going nowhere fast, folks, until today until we get that employment report. so this is the agenda in addition to the september jobs tuesday figure. there are a fair number of earnings today. we've got dow components due upon, travelers, united technologies all reporting before the open, as do coach, delta, harley davidson and lockheed martin. after the close, we'll amgen and panera bread. european equities, fairly flat. few is about 10 30i7b9s below fair value. the nasdaq is about nine points above fair value. the s&p 500 is pretty much 1.5
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points below fair value, as well. wa do you do? jobs are in focus. here is a recap of some of the thoughts the experts have had this morning. >> we look at what's in the spot markets and in option markets. the view has moved vithly against the dollar. so concentration come market pricing, it's quite attractive because there's a risk reward perspective if we get a price in the data and we're starting to get a data thick and fast now. we think payroll will be stronger in q4 than in q3. in that situation, you could get quite a shot in the arm. >> so it's still die verging pasts. so the entity is not anywhere close to removing the core. the fed, they want to taper, they cannot do it now. but eventually, they will.
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>> i don't think the market will pay too much attention unless this is a big one on the up side or the down side. there's a lot of emphasis on this number relative to whether or not tapering is before march or after march. so it does have a big impact on sentiment, the respect being one single data. >> that's the thoughts of some of the guests we've had. we heard from john kanally. and rejoining us, john, i hope you're refreshed after breakfast or whatever you've been able to get in. now, we spoke earlier, we were going to have a focused data. it's not going to clear until maybe the end of the year. and we've been hearing from corporates, as well, about the u.s. economy. how important for global investors is what happens with the u.s. economy and the fed compared to what happens with the rest of the world? >> you know, i think for the u.s., if you look at where gdp growth is, it's only around 2%. so for u.s. corporations who want to grow more than that, they're going to have to look
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overseas. and i think what you're seeing is that china is probably, you know, stopped getting worse. they're kind of in that 7 1/2 to 8 range. but i think markets are still expecting 10. i think over in europe and the uk, things have stopped getting worse and i think they're about to get better. .i think the best case for the economic picture globally might be japan where growth estimates have soared over the last year. now, markets have reacted to that, as well. so i think that global picture for most u.s. corporations matters more than what's going on in the u.s. but for some of those u.s. companies, make the small and mid sized ones, i think they depend more on the u.s. picture. and for some of them, things aren't so bad, either. so i think it's a bit of both, but i think the overall theme is that global growth has kind of stabilized here over the last six months or so after being really rocky between 2010 and early 2012.
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>> yeah. deflection of that has been a lot of institutions have been switching investments out of u.s. equities back into european equities. do you think that's -- do you think that's the right move? >> well, you know, within our models that we recommend to our clients, we still have a u.s. domestic focus. if we're looking overseas, we probably look to the emerging markets first. for example, right now, we do own some emerging market debt and a few of our models. i think on europe, definitely has stopped getting worse, but the question is can europe fix its broken financial transmissions mechanism? we're going to get data on that later this week when we get the september data on m3 and lending to small and medium sized businesses. but that's a key. what you're seeing in europe is that, you know, the ecb is creating some money supply. it's up maybe 3% or 4%. but lend to go small and medium sized enterprises is down 3% or
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4%. it's difficult to grow an economy when you have that kind of dichotomy. so i think if you can get ta fixed, that's a big help. >> would you choose companies that in the u.s. earn a bulk of their earning easy dmic inings from global activities? >> right now within our models, we are overweight, small and mid sized stocks and for the most part, those companies earn most of their growth from domestic sources. so right now, that's where we're positioned. however, if you look at the sectors that we've favor, which would be the industrial sector and somewhat the consumer discretionary, that does have a bit of a more international flavor to it. looking at the equity exposure, we don't have any direct exposure, either, to europe or asia right now. all right.
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john, thanks for that. good do you see today, john canale at lpl football out of boston. earlier, we told you how shares in spanish construction company fcc were rallying after bill gates invested in the group for around $155 million. we've been asking what does he know about leverage play on spanish property that we don't? brian cox e-mailed to say i think gates seeses once spain covers from the recession that there are so many people and many americans that have been talking about investing in spain because of the climate, friendly people and reliable government. there you go. thanks, brian, for that. thanks for everybody else who e-mailed in. that's it for today's show. countdown to jobs continues right now with "squawk box" under way in just a few moments. have a profitable day.
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sfwhoo good morning. it's 18 days late and it's on a tuesday. but the friday jobs report from the labor department will come this morning and we'll give it all the hype that we give it every time it comes on a friday. and earnings central, the dow components due upon travelers and united tech all before the bell headliners. it's tuesday, october 22nd, 2013. and "squawk box" begins right now. good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and steve liesman in for andrew ross sorkin. appeared rue is still on assignment in asia today. our top story this morning, the late but so important september
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jobs report. economist res looking for an increase of 180,000. the unemployment rate is seen holding steady at 7.3%. we'll know more from steve and why today's report could be key for the markets in just a few minutes. the other likely driefl in today's earnings. we'll be getting numbers from dupont, travelers, lockheed martin and many others. we're getting ready for all of those numbers. in the meantime, the futures are ahead of it all. s&p futures off by 1.8. steve, over to you, this is going to be an important jobs numbers even though it may not be reflective of what's happened since then. >> ye


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