tv Worldwide Exchange CNBC November 13, 2013 4:00am-6:01am EST
hello. welcome to "worldwide exchange." i'm ross westgate. the headlines today, u.s. treasury secretary jack lew tells cnbc he needs to see more specifics on china's economic blueprint and that market reforms must further. jobless data in 30 minutes, will they underline an improving employment picture for the uk and prompt the bank of england to signal an earlier core inflation report? the russians are drinking
less, according to carlsberg. shares fall as the brewing giant lowers forecasts after missing expectations in the third quarter. and the ceo tells cnbc he sees smoother sailing next year. shares up boosted by the forecast beating revenue figures. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. all right. welcome to the program. plenty to get through today. so on today's program, as some of italy's biggest luxury brands report third quarter earnings, we'll speak exclusively with the high-endmaker moleskin. the french economy is expected to show pick up in the final months of the year, we'll be joined by medev.
and with china reporting record sales, the focus shifts to u.s. e-tailors during the key holiday season. we'll speak to the ceo of beyond the rack at 11:45 cet. now, the bank of england will release its quarterly inflation report this morning. but first, the new govern mark carney introduced forward guidance. and with economic data stronger and inflation lower, many will be wondering if there's going be a revision. we have the employment report coming out at 9:30 london time. that should see potentially the unemployment rate ticking down 7.6%. yesterday, we saw inflation data at an annual rate of 2.2%, much weaker than we were expecting with an annual print of 2.5%. helia is with us. what is going to happen today, helia? are they going to bring forward their forward guidance?
>> i think they're right. they're going to make a few changes. the main thing we're expecting is that the forecast for that all-important threshold, the unemployment threshold, remember, forward guidance according to mark carney is all about saying that we won't consider hiking rates until unemployment hits 7%. we're about 7.7% at the moment. and they said the last inflation report that that wouldn't happen until the tail end of 2016. what we're expecting now is for them to say, actually, we think that's going to happen sooner than we first anticipated, sometime around the beginning of 2016. >> there are those out there, the mirror city, who are saying there's four quarters. so, in other words, this time next year. >> you're absolutely right. and i think that feeds into the debate about the bank of england's forward guidance, how useful it is and how useful their forecasts have been. because if you look at their growth forecast, which, again, they're expected to raise today,
nudge up, they've been behind the curve in terms of where they think the unemployment is going to be. they have a very long-term view. most economists think the unemployment will fall. >> cap incomes think so. they're more pessimistic. the bank would argue, no doubt, we're not talking to economists. we are talking to the real people, the people that hire the small business, the engineering firms, consumers on the streets. that's our target with this. >> yeah. you're absolutely right, ross. the -- that the govern has been thinking we don't care about the markets, if the market doesn't believe us, that's not a problem. we want to get the message out to the real economy, to those businesses to feel comfortable that those rates will stay low for longer. and there is information out there in terms of surveys that businesses feel more comfortable
that rates will stay low at the beginning of the year. that means they'll be investing. a key issue is productivity. what the bank is saying is that they expect productivity to actually start growing. and we've been at really low levels of productivity. it has inched up slightly, but if productivity goes up, you're more flat in the economy. >> i am, indeed. look at the time charge. >> there's nothing like a fan chart. good morning. that's what i always say. thank you very much for that, helia. china needs to be more specific on the policies it intend toes implement according to the u.s. treasury secretary jack lew who is currently touring asia. speaking exclusively to our colleague in singapore, he gave his view on china's reform plan. >> there are a lot of questions still to be answered. the communique coming out of the plan is at a very general level.
to be optimistic, it leans towards market oriented policies. it doesn't spell out all the policies. we'll be having discussions where i hope to learn more about some of the specific policies. the tests are easy. the tests are easy something like the shanghai free trade zone and moved to open it. we'll see what the details are. it can't just be a banner. it has to be some details underneath to open up markets like financial services and other things to competition. you look at where they move on currency. they have to move steadily in the right direction and continue to close the gap and ultimately they need to have a -- they're making progress, but they need to have steady, sustained progress and moving back and forth. >> all right. jack lew moving earlier. what do they make of that day down of the ubs conference? carolin is there. lets find out. hi, carolin. >> hi there, ross. let's get to my next guest, paul
sheer, chief gloenl global economist. the market is a little disappointed about the details coming out of the third plenum. does the market have a right to be disappointed? >> i don't think you can expect too much. looking at past experiences, it's been only over a period of months and sometimes even years that specific policies come through. >> let's talk about japan because you were part of a panel talking about abenomics here yesterday. we are expecting third quarter gdp numbers out tomorrow morning. we are expecting a slowdown in terms of exports and is abe-nomics not working? >> i think it's too early to say abe-nomics is not working. one is a concerted attempt to end deflation.
the other is an attempt to lift real growth in the economy. that's going to take a long time to implement and to see any fruits of. the short-term agenda is all around the bank of japan operating monetary policy to try to end deflation. that's off to a pretty good start. it's a high hurdle to success. >> is it feasible to believe that after 15 years of deflation, japan can finally get out of it? >> every over central bank in the world has a price stability or a 2% inflation target. most of the time, they're successful. and so the bank of japan, in theory, should be able to deliver 2% inflation. the problem in japan has been up until mr. koroda took over in march of this year, the bank itself didn't really believe they could do it. now mr. koroda is saying yes, we can, yes, we will. so this is a real game changer for monetary policy in japan.
>> japan is intend on doubling the consumption tax by april next year. do you think it's a good idea given that the economy -- yes, it is growing, but we are expected to see a little bit of a slowdown? can it stomach that hike in the consumption tax? >> i think that's a big risk to the economy, particularly in the risk of the deflation. it's done that before and with great success. i do see this as a significant risk to the reflation objective. >> wa is it that you want to see happening in japan for you to say abe-nomics is a big success. it is credible, it is not too ambitious. >> well, again, there are two components to it. the bank of japan continuing to do whatever it takes to end deflation. they set themselves a target for
about two years to achieve na objective. if there's slippage, as many people think there will be, because it's not that easy to do, then we would look for the bank of japan to double down and achieve its objective. on the growth side of the economy, the government has come out with a long list of plans. it lacks cohesion at the moment. it's a long laundry list. rather than stepping back and saying, how do we get growth in japan up? probably more focus on the labor force. and getting participation rates up, even looking at the low fertility rate in japan and even thinking perhaps out of the box about a smart immigration strategy for japan. that's off the table at the moment. those are the sort of things that would give growth a shot in the arm. >> thank you very much, paul sheer from s&p, and say tuned because we have an excite iing entry coming up. and in one hour's time, we'll
talk to garth mccartney on the ipo trends in europe. >> carolyn, looking forward to that. right now, it's time to catch where the markets are. we are ten minutes into the trading day. decliners currently outpacing advancers on the dow jones stoxx 600 by a ratio of 8 to 2. we're also at the session low. the ftse yesterday fairly flat, just off 1.5 points. we have the employment report to come as well as the bank of england. right now, the ftse, as we move it on -- that you can very much. cac 40 down 0.4 % as well as the xetra dax. keep our eyes on treasury yields. we're at 2.78% yesterday. we just dipped down during the session today, so coming back, yielding 2.75% which is pretty
much where we closed friday's session, as well. gilt yields will, of course, be in focus as we go through the morning. we saw a sharp fall off in sterling post that lower print of inflation. that inflation print, 2.2%, the annual rate. lower than the 2.5% we were expecting. sterling down 1.5854. today we're just above it, just below the 1.59 mark. dollar/yen, 99.52. and euro/dollar today, pretty flat at 1.3428. still above that, just below the 1.33 level which is the two-month low which we hit at the end of the last week. that's where we stand in europe. sish juan has the latest for us out of singapore. >> investors have cut their risk appetite at the third plenum, disappointed expectations. at the close of trading in
china, the shanghai composite ended down by almost 2% and the hang seng index in hong kong down almost 2%, as well. its shares tumbled almost 3%. banking shares among the major drags because of the lack of details on financial reform. we have h-shares on top and h-shares on the bottom here. mid size lenders tumbled some 3% to over 4% in today's trade. but one sector outperformed, that's military equipment and the defense sector. this after the plenum mrupt said beijing will boost the country's national security and defense capabilities. aerospace and aerosun both up 10%. lingering concerns over an early fed tapering, but sony
outperformed, jumping about 3% as active ifrt investor dan loeb expressed bullish views in a krn cnbc you introo. come up, we'll bring thaw clip. in south korea, the kospi pulled back. now, some of italy's biggest luxury brands report third quarter earnings. plus, we just got earnings out, as well. we'll get into that. welcome back. how is everything? there's nothing like being your own boss! and my customers are really liking your flat rate shipping. fedex one rate. really makes my life easier. maybe a promotion is in order.
sales, carlsberg has kept its revenue forecast for the year unchanged. mollor-maersk has raised fwi guidance. speaking on the phone, the former karlburg ceo said he expects a pick up in the shipping container market. >> we forecast, actually, for the coming years around 5% in sort of asset -- as a good growth in a year. so we don't think it will go much higher than this. and it's actually normal that you have a relatively strong third quarter because of christmas seasons and so on. but we are seeing good development from europe in container business. u.s. is a big sloggish in our figures, but it may not be a general trend as things look stable. >> sainsbury is up helped by the
fact it's increased its market share in more than a decade. the company had a fist half profit before tax in one off items of 4 million pounds. speak to go "squawk box" earlier, the cfo john rogers says he's very cautious. >> it continues to be very tough, actually. we've seen this pattern of behavior over the last 12, 24 months. so the market has been very, very difficult, particularly in this one up to christmas. customers looking to save over the christmas period. >> gdp stock down nearly 2%. it's reported a 6.5% decline in core earnings. this for the first nine months of the year. the french gas and power group is still sticking to its guidance. and the london stock exchange off about 0.5%. that was in line with
expectations. its cfo was speaking to us and explained the impact of its acquisition of lch clear net. >> the transition just closed only a few short months ago. already, management has been refocused. there has been changes. and we have embarked on the process of delivering what are highly achievable costs as well as revenue synergies. so the work is overgoing. >> some of italy's biggest luxury brands are exploring big numbers this week, offsetting weaker home sales. a 10% jump in net profit. and moleskin says they're confident they can achieve double digit revenue growth for 2013. the ceo is with carolin at the
ubs conference. >> yes, absolutely. i want to say welcome to the ceo of moleskin. thank you so much for joining us this morning. nine-month revenues, you're confident you'll be achieving double digit revenue growth for 2013. how much of a headwind was the stronger euro? >> the euro certainly didn't help. in the end, our tougher clients, 1.5 million. but on the other end, the managing team was focused on working on growth opportunities we have in many different channels. >> ubs puts out a lot of great research and one of the research papers was they called you the little black dress of notebooks. they point out that you've seen fantastic revenue growth, 24% over the last few years. very high margins, best in
class. how difficult is it going to be or how easy to keep that up? >> well, there is nothing easy these days. but as i mentioned, we're very focused on the many growth opportunities we see in the new direct consumer channels that we are developing, retail and e-commerce. as our nine-month 2013 numbers show, we're doing very well in excess of 20% developed in our business. and wholesale, orpd, is definitely affected by the euro. we see opportunities there, as well. as far as margins are concerned, we are really focused on the bottom line and growth on our ibda income in net terms. the channels that we are deve p developing. but, again, what i think is
important is it's a professional, i think. >> asia and australia make up around 10% of your overall revenues. but it's one of the fastest growing margins for you. i wonder, what was the effect of the crackdown of luxury goods in china? how is that impacting your business? >> that's a very interesting question. in fact, that is working in our favor. when it comes to luxury, moleskin is a luxury. as we define luxury as doing something important for yourself. it's not luxury from the standpoint of messaging the fact that you are -- that you belong to very wealthy segment of the population. moleskin is a brand. it's perfectly positioned in china to serve as the brand for the new middle class that is coming up. and that he is looking at other brands than the luxury brands
have become identified of the regime. to signal more cultural sophistication rather than just wealth. >> everything has gone digital and you've struck that partnership, as well. how are you bridging that gap? >> well, the partnership was born, in fact, out of the region to survive moleskin users with products and services that can help them bridge the designs between analog and digital and move contents from one division to the other. it's been working very well. we've recently announced at the conference in september, the continuation of our partnership and the launch of new product and we're working on some other very exciting -- in the digital space. on the other hand, don't forget th that, yes, the world is going
digital and the more and there's a lot of surveys toicate into that. people feel the need to assure more and more physical objects that when it comes to doing something that is important to them. for example, when writing something or when you want to signal that the picture is very important to you, you print it still today, but you do it on something that is special to you. and that is where a brand like moleskin that means something is ideally positioned to take advantage take advantage that technology seems to value everything that we do. >> so we're always going to be carrying that notebook in our purse because it's small. >> because it's not a book. it's a book yet to be -- >> thank you for that, ceo of moleskine. coming up, we'll speak to garth
mccartney. >> thank you. looking forward to that. still to come on the show, as we count down to the bank of inflation, wa is happening with jobs? the unemployment rate moves down closer to that 7% threshold where the bank would say we change our guidance or think about putting up rates. we'll get the latest daels data coming up right after this. le f? 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, insured by unitedhealthcare insurance company. like all standardized medicare supplement insurance plans, they could save you in out-of-pocket medical costs. call today to request a free decision guide. with these types of plans, you'll be able to visit any doctor or hospital that accepts medicare patients... plus, there are no networks, and virtually no referrals
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u.s. treasury secretary jack lew dells china he needs to see more specifics and market reforms must progress further. >> jobless data out now in the uk. could it prompt the bank of england to signal rates might go up further than they're currently forecasting? the russians are drinking less according to carlsberg. shares fall as the danish brewing giant lowers expectations for the third quarter. and the ceo of moleskine tells cnbc he sees smooth sailing next year with container sales picking up.
shares boosted by new numbers, as well. >> right. we're just about to get the latest print of uk unemployment data. we might see the rate ticking down from 7.7% to 7.6%. 7% is a key threshold for the bank of england to think about raising rates. they said we're not going to do that until we hit a 7% threshold. it doesn't mean if we hit that rates automatically go up, but it is now an important fact about deciding how to price rates. the adjusted three month to september total average earnings at 0.8%. the unemployment rate has fallen, as well. the adjusted jobless claims, minus 41,000 at 3.9% of the workforce. it was forecast to fall 35,000. the claimant rate, the lowest since january 2009. the wider ilo september
unemployment has dropped by 48,000 and the rate has come down as we saw to 7.6%. the unemployment rate was last time lowered in april 2009. the average earnings up 0.8%. that is still at a record low rate. so unless inflation comes down even more, the squeeze in real earnings continued. we did see inflag rates coming down to 2.2%. gilt futures falling more than 15 ticks after this labor market data is wiped out early gains and sterling is up to a session high of 1.5942 it was around 1.5890 before that data come out, 1.5890. it has gone up to 1.589. that is the latest data for the bank of england.
we'll get the latest on the bank of england's thoughts, of course, and how that jobs picture, improving jobs picture under about an hour from now. 11:30 cet. 10:30 london time we'll get the results. european equities, meanwhile, the ftse is down 0.8%. the xetra dax, cac 40, ftse mib down about 0.3%. euro/dollar, still around, as well. gilt yields, 2.79%. the ten-year treasury yields, 2.75%. moving on, european leaders have pledged to might a priority. member states promised to speed
up the roll out of job funds. the jobless rate amongst young people advanced currently running at over 25%. joining us from paris is pierre gutta, head of the largest employment union, metta. what is the best way, in your opinion, to stimulate growth and, therefore, employment? >> well, i think the first solution would be to restore competitiveness of europe and air france. we have a strong unemployment rate in france still and for youth, for young, it's 25%. it's much too higher. what we need to do first is to recover xet ifrness in order that the companies can get better margin and especially higher. then we have to attract our
young people back into the industry, for instance. there's a lot of jobs which are requires and where the young people don't want to go, to come. so i think we should restore competitiveness and be more attractive for our young. >> are you talking about restoring confidence through cheaper labor, competitiveness? which area do you want to improve? >> i think in france we still suffer from a very high level of public spendings. and i think we reach, in fact, 67% of your gdp where average europe is around 50. the only solution is not to tax and tax again, but the only
solution is to really have the occur age to optimize the -- and decrease the public spending. this is what we keep asking the french government is to trust the french companies and restore a business friendly company in order that we can hire more people, in order that we can keep on investing and erupting our companies. >> yeah. do you think they're going to listen? >> well, i hope so. they are saying good things, you know, within the french government. we've talked about reports. we talk about some tax credits. but this is not enough. and i think now the time has come in france to take the right on strong measures, reforms, in
order that we go in the right directions. i think you know that it is not so easy. there is a kind of university among the business people, among the country right now. this is especially linked to -- which is dry right now. so i think they must listen to that and the right directions. we try to push the government to do that quickly. >> let's take an individual xamp. alcatel lucent says it plans to cut 10,000 jobs worldwide. it spreads through europe. immediately there was this complaint that they shouldn't close an office or factory in france. and it's the same with renault. there always seems to rub up against a political obstruction. >> yes. there's still prime in france
where you know the high level of unemployment, i told you that we are around 11% rite now. they try to prevent and to stop any resaturation of companies where, in fact, we should accept the adaptation of our companies. the world is moving because customers trends are moving, technologies are moving. so i think we sign the contract with the partners, reunions, one year ago where we introduce more flexibility, flex security within the companies. and i think now it's bitter, we can adapt with our people, the companies much easier than it used to be in france. so we're going to do the right direction. >> pierre, good to talk to you this morning. thanks so much indeed for
joining us. upping the ante in the highly competitive race to sell tablet computers. makiko has the story for us from tokyo. >> hi, ross. yes. sony may have found a valuable customer in driving sales of its tablet computers. cable tv services are offering new services for users who use tablets. the tablet c will be equipped with each company's application so users can use them as remote controls and shop online. and the tablet market in japan is forecast to grow more than 60% by fiscal 2017 with sales reaching over 12 million units. but competition is fierce with about 40 brands jostling in the market. so makers are focusing on corporate customers where they can charge more by customizing the devices. sony is aiming for tablet sales to reach more than $100 million in three years. and the company downgraded its
unit sales target for tvs, pcs and additional cameras last month. tablets is one of the pillars it is counting on to turn around its electronics arm. back to you, ross. >> thank you, makiko. have a good evening in tokyo. staying in japan, daniel loeb has told cnbc the tech giant has benefited from the weaker yen and ongoing structural reforms. loeb says the business reflects japan's current economic and political back drop. >> we remain very bullish on japan. we wouldn't have made the sony investment if we didn't support abe and koroda and everything that they're doing. but, you know, politically, economically, and from a monetary standpoint. >> and every week, cnbc is asking you to take part in an
online poll and this week it's how are you trading sony ahead of the play station 4 launch. head to cnbc.com. you can cast your vote or have your say on twitter using #traderpoll. nor earnings in focus in asia. the stock market pc continues to way on taiwan he's's asustek. profits slipped by over a quarter. growth is forecast to drop next quarter. tablet shipments were stronger, up 25%. shares of sina kiktd 4% higher in after hours. first quarter profit remains slim, a nearly $25 million.
revenue was up from a year ago. and we've had earnings in from the parent company of wii, tencent. third quarter net profits up 5% to $636 million. but revenues were stronger. it plans to monetize its new services and add more gains to its offerings. joining us with more, ricky leite. on the phone from hong kong. ricky, thanks for joining us. what do you make of the numbers we've just had? >> thanks for having me today. >> a pleasure. what do you think of the numbers? >> the third quarter was less than our expectations. our expect third quarter net income is 3.95 billion. >> a little bit less. but they -- they're talking
about expanding their position in the game industry. they've got pipelines such as fifa online three. how beneficial is that going to be? it has over 300 million subscribers right now and 1100 million subscribers overseas. and we expect to bring robust growth to the company, as well. >> they've got this stake now in sohu's search platform. which they got in september. how -- what are they going to do with that? how do they make that work for them? >> because tesla is -- the
market share, we expect it could expand its search engine and monetize the global search industry, as well. >> thanks for your thoughts, ricky lai, joining us from hong kong. meanwhile, tencent is among a group of chinese companies taking aim at rival baidu. the group says baidu and other players use software that steals online content automatically. baidu has not yet responded to the accusations.
speculation is abound that bhs has been weighing suitors. on the next episode of cnbc meets, tone ya -- expectations and in the show, she asks him how he plans to turn bhs around. >> unfortunately, there is always a perception with an older brand. we sort of have to move it on. we probably -- because this only comes in at this time of year, it's much easier to deliver a completely new -- something fresh. people are coming to us specifically for this because they know we do it. nk it's how do we keep that customer coming back. >> when you see the money, phillip, does it worry you? >> well, you don't want to lose money. that's not the plan. >> catch the full interview
tonight on cnbc. kicks off at 2300 cet. that's 10:00 london time. still to come on this show, we alternative our attention to the future of travel. could cross rail for london's problems, we'll be joined by the ceo of a mobile firm whose sales have just passed the $100 million mark. welcome back. how is everything? there's nothing like being your own boss! and my customers are really liking your flat rate shipping. fedex one rate. really makes my life easier. maybe a promotion is in order. good news. i got a new title. and a raise? management couldn't make that happen.
getting from a to b in our city is no longer a simple task. tom mckenzie has been setting out to discover what's being done to get city dwellers around more quickly, cheaply and with the least impact on the environment. >> it's the biggest infrastructure project taking place in europe right now. the $24 billion mega project that is london's ross rail.
scheduled to be fully completed by late 2018, the 100 kilometer route is expected to bring an extra 1.5 million people in london within 45 minutes. >> it will be very much a railway of the 21st century. it will have brand new train, brand new station and the ability to actually go across london much quicker than you're able to do today. the project is seeing 42 kilometers of new tunnels being excavated from under the uk capital, something developers are mindful of when it comes to transportation needs. >> we're building in spare capacity, we know we might need it at some time in the future, we doerchbt know when, but you only get one chance to build an underground structure. developers say cross rail will boost the uk economy by $67 billion. >> this creates growth.
and i think it's really important that as the economy grows that we insist on ensuring that there's a balance between supporting people in terms of day-to-day activities and also thinking about wa we're going to leave for the next generation. and that's what this does at the time. but all cities have different, a fact that can deseen when it comes to their transport solutions. the city of wongxhu has created one of the largest bus systems. >> it's around one bus every ten seconds. >> gaung zhou's bus ferries 800,000 customers every day. >> it was super conducted. .it's more than 811 is in the corridor and the nomly anticipation, the four lengths
pulled many fast and it looks like an ocean of buses. >> in other words, less traffic jams means less co2 emissions. and it's not just mass transport systems that city governments are employing to help us get around. gaun zhou, just like london, new york and paris all offer resident aes bicycle service so you can do your daily commute, keep fit and help save the environment. . >> innovation city is on all this week. you are looking at negative having to use cash. >> we see doubling the use of
public transit in the last ten years in the uk, especially on rail, we don't have to wait around longer to buy the tickets. we just use our mobile phones to do it. not only is it quicker and sexier for the public, it flashes the infrastructure costs of having all of this dead equipment sat around to enable you to get somewhere. >> slit the equivalent of an oyster card on my phone? >> yeah, yeah. and it does the away with the need to get into the line or precollect your tickets. you use your phone. >> how long will it be before we can travel without cash or credit cards or a paper? everything on a trip in a mobile phone, do you think? >> in some areas, we can already do that. you launch the system across the whole of boston's commuter rail. you don't need to use cash at all. you just use your phones. and multi hundred million to
change infrastructure. we followed up in san diego with a launch in just two weeks. the thing with mobile examine cloud technology is it can come in and display large scale infrastructure projects and revolutionize transit. >> talking about revolutionizing transit, here we are in london. we did quite a lot for the olympics. we're now building cross rail within which will have quite a lot of impact. how much can you change transport without necessarily having big, new infrastructure? you need to build capacity into the system, clearly. are there ways of doing that without having to spend a lot on cop create and -- well, that's wa we're dealing with. a lot of agencies we work with don't have the infrastructure or the time. if you're all these new young sort of educated employees want to live on public trantsit, they don't want to be in cars. you sit in a car, you don't read your e-mail. on public transit, you can.
let's make the phone into the infrastructure. it's far much faster. also, we can use that to nudge people's behavior to get better use of the infrastructure we have. the uk has the peakiest transport in europe. everybody travels at the same time. there's no incentive for you to travel outside of that. if we were able to give you a slightly lower prices to go just off the peak, we would nudge people who could be flexible to make use of that capacity. that would take just a bit of i.t. work. >> you message your phone and say if you're thinking of traveling now, delay it half an hour or 30 minutes. >> and you can have it cheaper or, for example, get more loyalty points. >> that's a good way of dealing with traffic management. >> it is. for example, when you're about to go home and say, oh, your normal train is busy. if you need to get home for the kids, leave at 4:30. if you can afford to, stay in the public for an hour or a
half. >> the quick trep to the public, though, never pans out. thank you very much, indeed, for joining us. >> now, our innovation city coverage continues all week. head online to catch up with all of our special reports. a degs pratt situation continues to unfold in the philippines after typhoon haiyan. relief continues to pour in, but can't reach the affected areas fast enough. some suppliers are being reported as losing warehouses and smashing water pipes to get
water. the president says total death may be far less than the 10,000 which officials predicted earlier. but aid workers say there's no way of knowing until remote areas have been reached. mean while, the bank of korea is likely to keep rates steady. abe-nomics in japan under scrutiny again as third quarter gdp figures will be released. and it's the third day for japanese earnings with mizuho and mitsubishi reporting this morning. china air lines and singapore's singtel. former heavyweight champion of the world mike tyson says he's pulling no punches in the release of his auto biography in the relief of his memoirs, iron mike.
mike tyson will be on set at 4:30 eastern to discuss the book. so if you had a chance, what would you ask mike tyson? let us know. e-mail us, firstname.lastname@example.org, tweet @cnbcwex or direct to me @rosswestga @rosswestgate. i think most of us would prefer to ask limb not to hit us. but there is a great quote he came out as saying most people have a plan until they get a punch in the face. still to come in the program, more than a thousand economic experts for more than 100 countries and we're going to get their verdicts on the bits climate around the world. it's the latest itc/ifo survey. that coming up. the next hour of "worldwide exchange" starts right after this. ♪ ♪ stacy's mom has got it goin' on ♪ ♪ stacy's mom has got it goin' on ♪ ♪ stacy's mom has got it goin' on ♪
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investors after atlanta fed president dennis lockhart says it's not out of the question the central bank might pull back on qe next month. and the russians aren't drinking. that according to carlsberg. shares fall, the danish brewing giant raising forecasts in key markets after missing expectations in the third quarter. >> you're watching "worldwide exchange," bringing you business news from around the globe. right. we're just getting the latest icc ifo world economic survey out. they're saying the economy picked up in the first half of 2013. production primarily expanding more rapidly in the advanced economies while the pace of growth and emerging economies by contrast have barely picked up at all. but growing confidence on part of the companies in most countries suggest that the economic recovery will continue
into the second half of years. joining us now is the author of the world economic survey, the international chamber of commerce john guy kareo and joining me in the studio is karen ward. welcome to you both. so there's a growing confidence. what's that based on? >> well, i'll tell you, there's two things that come out of the report. one of them is this growing confidence in recovery and in solid signs of a global recovery with some good regional manifestations of that. i think the other side of it is there's an great and growing uncertainty about the political leadership that affects the economy. you see it most directly just looking at the two biggest economies in the world. the u.s. and china. i mean, i think that the shutdown in the u.s. has shaken confidence a tremendous amount. as you were saying earlier in
the program, everyone has a plan until you get a punch in the face and i think the shutdown was a punch in the face. you look at china and the third plenum that just took place, there is a program for reform which has been announced, except it's a mystery. no one understands and knows what the details will be. so those kinds of things are contributing to a tremendous amount of uncertainty in the longer term, in the six months to a year perspective. but overall, again, the message is that there's a sense of confidence, at least, that will really comfort investors that the economy is recovering overall. >> that confidence, is it enough to induce greater investment led growth from the private sector? >> i think that that's what we're getting. as you know, we're a network of over 6 million companies in 120 countries and certainly i would say that the sentiment among those companies is very much more positive now than it was a year ago. and that that is obviously
affecting decisions to go ahead and invest to make acquisitions, to make expansion plans and to increase their volumes of trade. i think that that's all contributing in a very positive way. what everyone is watching is, again, because it's a very clear situation where we're just coming out of a serious crisis and though there's confidence in recovery, everyone is afraid of that punch in the face coming if it might be on the horizon. so they're looking at things like multi lateral discussions going on climate change in warsaw today and the fact that there's not much progressing there .this is not an encouraging sign. everyone i think is very much focused in the business community on bali, which takes place in barely a month. there there is at least an expectation that there will be a minimalist deal that will
greatly minimize growth. it's basically a cutting red tape of the border and so forth, a very simple process, in a sense, among the simplest negotiations in the wto basket. if that's agreed, there will be about a trillion dollars of stimulus to the world economy without anyone borrowing anything and the creation of, we estimate, over 20 million jobs. so i think, again, businesses looking at those sorts of markers to get some confidence in the political leadership being able to take advantage of the signs of recovery. >> all right. fascinating report. thank you very much, indeed, for that. and he's talked about punches in the face from politicians. house budget negotiations are meeting for a second time today at 10:00 eastern. they now have exactly one month to try to carve out a deal to avoid another fiscal crisis like the one that closed down the u.s. government last month. the expectations are low for a so-called grand bargain. earlier this week, democrats are seeking to kill or reduce
several corporate tax breaks and deductions aimed at wealthy americans. this is as the u.s. treasury secretary jack lew told this channel that he might prefer a smaller budget deal. >> the right answer is a balanced approach. you know, there are a lot of members of congress involved in this budget conference. chairman of the senate budget committee, senator murray is the leading democrat in the negotiations. she has made the case that there needs to be a balanced set of policies. that can be small, medium or large. you can do some loophole closers that are just shutting down some things that are abuses to begin with. you can raise fees. there's always kind of things that you can do to put a balanced package together. nk it's easier to put together something small than something large. so let's see how far they can go. if they can make progress and agree to even something relatively, you know, small or moderate that replaces any of the sequester with a better set
of balance policies, it's good for the economy. >> let's bring in karen ward. karen describes it as punches in the face from politicians. are we going to get another punch in the face from u.s. politicians on the next debate about budgets and -- >> i think we should certainly prepare ourselves. because i think these guys, they aren't pickering about small things. the republicans and democrats have fundamentally different ideologies about the role of government in an economy. the republicans want to go back to their small government, low interference, american dream business model, believing that that is what is going to get the u.s. back on to a decent recovery. and, of course, the democrats are saying that's all very well and good, but it's not equitable, so we need to spread wealth more fairly. so they're apart in how to run the economy. .i'm afraid to say i think we're going to have these negotiations which are going to go to the wire every three months. >> on its own, regardless of what the u.s. economy is doing right now, on its own, is that
enough of a reason for the fed not to taper in december? some are saying we still might just because we are unsure about a positive as they were in september, enough for them not to do anything? >> i think it does matter. as it shows, business investment, which is what we are looking for to drive a robust recovery, it's still not coming through. and we've been expecting it for three years. and i think that's where the political uncertainty in that cloud is having a real impact on the recovery. and so i think it's a very important reason and the fed should stay extremely cautious. now, they might want to at least start the tapering process. it's a very, very small amount. but certainly taking their foot off the accelerator to me, the u.s. data -- >> a month, right? when they do start. >> absolutely. >> karen, stick around. plenty more to come from you. right now, let's bring you up to speed with where we are on futures at the moment. we saw the dow yesterday down
from 32 points. right now, it's just below fair value. it's around about 23 points below fair value for the dow at the moment. the nasdaq is some 9 points below fair value. the s&p is around 257 points below fair value after being up 9 points yesterday. european equities are fairly flat at the moment. 0.8% for the ftse. the xetra dax, cac 40 and ftse mib off around 0.4%. we did have a dip down in unemployment rates to 7.6%. that saw gilt futures being sold off. ten-year gilt year 2.8%. ten-year treasury yield, 2.75% is the yield on the ten-year. it has come down somewhat. on the currency markets, euro/dollar fairly steady. we'll get a change in forward guidance from the bank of england in 20 minutes' time. dollar/yen just below the 100 level at 99.49. so that's the session right now
in europe. what about what's going on in asia? what has gone on in asia? li sixuan rejoins us in singapore. sixuan. >> thank you, ross. investors have cut their positions in china shares and risk assets at the third plenum disappointed expectations. at the close of trading in china, the shanghai composite tumbled almost 2%. is hang seng down lm nearly 2%. h-shares tumbled almost 3%. as for the rest of asia, the nikkei 225 he'sed over concerns of an early set tapering. but sony shares overperformed jumping about 3% as dan loew expressed bullish views in a cnbc interview. meanwhile, in south korea, the kospi down 1.6% and australia's asx 200 has its birthday in about six weeks ending lower by about 1.4%. chinese banks among the major
drags because of the lack of details on china's financial reforms. we have a-shares on top and h-shares on the bottom row here. amid five lenders such as china merchant and pudong development bank tumbled near 3.5% today. but one sector joust performed, that's the military equipment and the defense sector. this after the third plenum boost said it will boost the country's national securities. these two companies both surged limit up by 10%. that's a look out of asian markets. back to you, ross. >> thanks for that. the bank of england releases its quarterly inflation reports this morning. are you adjusting your thought when we might see rates gomg going up in the uk? >> not just the unemployment rate. i think the bank of england has
to admit that the data has been stronger than they expected across the board. gdp has been stronger than expected. they might be bringing forward their guidance a little bit. but i think what we have to remember is the other xoenl of that labor market release this morning is that wage growth is still incredibly low. i think the unemployment rate isn't telling us the whole story. there's a huge number of people with part-time work, full time work, there's a number of those who come back to the market. so the wage earners tell me they are still very worried. there are very little inflation pressures in the uk economy. >> so where are you, beginning of 2016, are you? >> yes, yes. i think what we're saying is don't get too carried away with some of the recent news flow. it's very hard to see such strong inflation continuing. >> at least inflation came down more than we thought yesterday. karen, stick around. more to come from you.
just a reminder of what's on the agenda stateside, the australian federal budget is out at 2:00 p.m. eastern. macy's reports earnings before it is opening bell. after the close, we'll hear from cisco systems and the theme park operator sea world entertainment. we'll take a short break. still to come, we'll recap the headlines and we'll get into the exchange world. welcome back. how is everything? there's nothing like being your own boss! and my customers are really liking your flat rate shipping. fedex one rate. really makes my life easier. maybe a promotion is in order.
u.s. treasury secretary jack lew calls on china needs to be clearer with policy. the fed president of atlanta says the central bank could start tapering next month. and the uk unemployment rate is at its lowest in four years. attention now turning to the country's inflation rate. will the bank of england nudge forward its forward guide jans? still to come, we'll be back at the ubs european conference in london with an exclusive guest who says there's an earnings recovery still in europe that is detracting attention from u.s. investors. we'll get more on that in just a moment.
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fupg. and on cnbc's closing bell, he says they're still rigged against the little guy. >> i think we can do better here. i think the markets have become too fragmented. there's always a day when somebody has to sell a stock or an index fund has to sell in order to rebalance or you and i go in and redeem our pension in order to pay the rent. and that fund has to sell. and the markets should not take advantage of people on those days when they have to take action. >> so is anybody thinking of the little guy at the ubs conference currently under way in london? carolin is there. are they, carolin? >> i think they are. let's talk to garth mccartney at ubs. thank you so much for joining us. we've had a couple of really lean years for ipo activity in europe. how has 2013 shaped up so far? >> i think it's been a great year for the ipo market.
i think 2013 has gone a long way in addressing that problem. but i think we've also seen a broadening out of different factors and different markets which has been acceptable for ipos. >> now, you've been working on a number of the big deals this year, but what is your pipeline looking like for this year? >> i think it's building strongly for next year. i think reference multiples are encouraging for vendors in terms of valuation expectations. i think from the investor base, it had good performance for a number of deals this year. therefore, their appetite is strong. so that's all building, actually, for quite a good 2014 and particularly the first half of 2014 we see it being very strong. >> in terms of sectors, is it broad based or one particular sector we're looking at? i think the uk has been really strong. >> we're moving now i think into a phase where we're broadening out to a secretarier.
when we look back, it's quality and dividend yields driving that. i think we're now at a phase in the cycle where that is now broadening out and the market now has appetite for smaller cap companies and sort of broader number of regions. but i think it's sectorwise and we continue to see that being active in 2014. >> what does that tell you that we're actually at a bursting point for ipos? >> i think it's early to say that. literally, we've had a small number of ipos to date this year, to the point last year we were uncertain whether this market was opened and given what's going on in european growth, given what's going on in the european secondary market, we see this as the beginning as opposed to the end. >> does it matter who the vendor is, whether it's private equity, bad weather, coming from the government or corporate spinning off to focus on some of its core units? >> again, i think the sector is broadening out. i think it's the same for the
vendor base. i think private equity has been denied the ipo exit route for quite a while now. we're now seeing them able to access ipo markets. they've got mature assets. i think they're going to be a key driver of this renaissance and the ipo market into next year. but know very much the market is open for a broad range of different vendors. >> i think a couple of people were surprised by the lack of rights issues we've seen so far this year. do you feel as though this is going to be picking up next year? >> i think that's right. i think you've got a number of factors in the background, some of the regulatory changes that are happening will induce more to come to the equity markets to address that. i'm thinking particularly in the financial sector. you're right, this year we've seen i think with the rise in the underlying equity market, i think that's helped to address some of the capital positions that we would see next year rights issues being more prevalent as part of the overall capital raising activity. >> thank you so much for those insights, gareth mccartney, head of equities syndicate over at ubs. ross, back to you.
>> carolin, thank you for that. despite all the debate over monetary policy, equity markets have continued to grind higher. bond markets, of course, have still been fairly contented. anything that's going to upset these things, the move higher, global hsbc points out? >> i think we still are more concerned about the eurozone than most. i think the recovery is still looking extremely fragile. the latest data have suggested that we might even see activity rolling over from here. so some of the optimism has come from the eurozone. >> and all the money that we just heard coming from the states into europe, is that misplaced or not? >> well, certainly i'm having a lot of conversations that border along the lines of the ecb will willing to print money like everyone else. that's very misplaced.
unemployment is still high. if anything, it looks like it's nudging higher rather than lower. if a recovery rolls over, then we are still in a staggering situation which politically i think is extremely risky. we've got the ecb's hqr over the next year. there's a lot of deleveraging happening in the banking system ahead of that. so i still think there's a huge amount of risk in the eurozone. there we've become entirely too complacent. former heavyweight of the world mike tyson says he's pulling no punches in his auto biography. the iron mike memoirs is about his rise to fame and infamy. he will be on set at 4:00 p.m. eastern to discuss the book. what if you had the chance would you like to ask iron mike tyson? get in touch with us. email@example.com, tweet @cnbcwex or direct to me @rosswestgate. i think first of all we would all ask him not to hit us.
still to come on the program, as the unemployment rate in the uk drops to its lowest point in more than four years, is the bank of england going to change its forward guidance when they think rates might go up? we'll get the latest from the bank of england's inflation reports right after this. as we do so, futures right now are implying pretty flat open with the u.s. equities. the s&p called down just 2 points. the dow up 2. it's as simple as this. at bny mellon, our business is investments. managing them, moving them, making them work.
u.s. treasury secretary jack lew tells cnbc he needs to see more specifics on china's economic blueprint and the market reforms must go further. cast ago cloud over markets, atlanta fed president dennis lockhart says it's not out of the question. the central bank might put back on qe next month. and the uk unemployment rate dropped to its lowest rate in four years. might that prompt signaling this rate earlier than they're forecasting at the moment? and the russians aren't drinking. not as much as they used to according to carlsberg. shares fall as the danish brewing giants lowers its forecast in key markets after missing expectations for the third quarter. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe.
>> if you've just joined us stateside, welcome to the start of your global trading day. u.s. futures right now are indicate ago fairly flat start for u.s. equities. the dow is just three points below fair value. the nasdaq at the moment is some 2 points above fair value. the s&p 500 is about a point below it, according to that wall. we're just waiting for the latest on the bank of england on their latest inflation report. and they've raised the growth forecast and lowered the unemployment forecast, possibly suggesting an earlier hike. they say a greater than 50% chance of unemployment at 7% in the third quarter of 2015. they had seen that in the second quarter previously of 2016. they've raised the uk growth forecasts. they say the economy expanding by 2.8% in 2014.
mark carney, karen wallace, reaction to that? >> i think they've acknowledged the data we've seen. they had to admit that the data has come through stronger than they'd expected. and they've set themselves -- on that. >> let's listen to mark carney. >> the economy is growing at its fastest pace in six year. for the first time in a long time, you don't have to be an optimist to see the glass is half full. the recovery has finally taken hold. it's welcomed that the economy is growing again, but a return to growth is not yet a return to normality. nearly 1 million more people are out of work than in the years before the financial crisis. many others in part-time work would prefer to be working full time. wages are not yet increasing. and the economy remains 2.5% smaller than it was in 2008. the same recovery is needed to put people back in work and to
use up the slack that still exists in the economy. a sustained recovery requires a revival of the business investment. so far, the upswing in growth has been driven by a modest recovery in consumer spending and a rerival in housing investment. that's not surprising. we can't expect to see strong export demand from the uk's major trading partners. business investment typically takes time to pick up during recovery. the eventual recovery in business investment will be supported by continuing improvements in credit conditions as our banking system gains in strength and by reduced uncertainty about future prospects. well, recent surveys and investment intentions have been encouraging the handover from household business spending may not be smooth. quarterly growth rates of gdp are likely to ease back a little next year. .over the forecast realizing growth is likely to remain modest compared to past
recovery. a sustained recovery requires price stability. cpi inflation has fallen back unexpectedly sharply to 2.2% in october. it may pick up slightly in coming months as recently announced utility price increases take effect. but the lower starting point, an appreciation of sterling in recent months, and persistently weak domestic price pressures mean that inflation is projected to be significantly lower than in august. under the assumption that the bank rate follows a path inquired by market yields, the 2% inflation target has reached a full year earlier and inflation is expected to remain persistently a little below target in the later part of the bank forecast. the mpc assesses the chance of inflation being at or above 2.5% towards the end of the next year to be only around 1% and 3%, much lower than in august. the mpc judges inflation
expectations remain sfushtly well anchored. a sustained recovery requires confidence that the monetary policy will be maintained in the face of weak falling demand and ongoing repair of household bank and government balance sheets. a forward guidance means the mpc will not consider to raise bank rates at least until unemployment rate reaches 7%. through that guidance, we are giving businesses and households the confidence that interest rates won't go up until skrobs, incomes and spending are recovering at a sustainable pace. in line with the unexpected strength of demand, the unemployment rate has fallen a little more rapidly than expected in august. and that's to be welcomed. 100,000 more people are in work as a result. the mpc continues to make the conservative assumption that productivity recovers only gradually with demand so that
none of the gap relative to the precrisis gap is closed over the forecast period. as a result, stronger near term growth causes unemployment to fall faster than we had expected in august. again, based on the assumption that the bank rate follows market interest rates, we judged there to be a two in five chance that unemployment will reach the 7% threshold by tend of next year and a three in five chance that it will have done so by the end of 2015. although the mpc now expects the 7% threshold to be reached earlier than we did in august, what really matters is wa we learned about the economy along the journey to that threshold. also, the average hours people want to work is implied somewhat more slack in the labor markets than previously assumed. our views on productivity can be expected to evolve as the recovery progresses.
it's important to remember that the threshold is a -- the unemployment threshold, i'm sorry, it's important to remember that the unemployment threshold is a staging post for assessing policy, not a trigger for an automatic increase in bank rates. when the threshold is reached, the mpc will set policy to balance the outlook for inflation against the need to provide continued support to the recovery in output and employment. as one illustration of the potential tradeoff, compare the mpc's projections conditioned on the alternative assumption that bank rates is held constant until the end of the forecast horizon. the projections show materially stronger growth, mainly 1% of gdp cumulatively. and more rapidly falling unemployment, even though inflation is close to the target
policy in the period. >> you have been listening to mark carney, the governor of the bank of england with the latest core inflation report. clearly in the quarterly inflation reports we no longer worry so much about inflation but rather what's happening with employment because they have this 7% threshold. karen is still with us, as well. a 2 in 5 chance that they hit that that 7%. by the end of 2015. but he went out of his way to once again reiterate 7% as a staging post, not a trigger. >> absolutely. but it's interesting to hear him comments about -- he's effect muchly saying we've got more growth than we expected. we're getting less inflation from that report. so he's highlighting that we might reach our growth objectives dwrerl than expected, but if when we get there wage inflation is still 1%, then that
doesn't necessarily tell us it's time for us to move. >> the uk might have able to have higher wage growth than previously. >> back to goldilocks. >> great. meanwhile, u.s. bond prices took a hit yesterday with benchmark bond yields hitting their highest level since mid-september. this is after the atlanta fed president dennis lockhart says tapering was not off the table for the september meeting. but the u.s. economy still needs an accommodative policy. the move comes as the treasury gets set to sell a combined $17 trillion in debt this week. it's interesting, we hit 2.7% on the ten-year yield. we're back down to 2.75. that is kind of where we were last friday post the jobs report. what is going to happen with the fed and, therefore, how bond yields might come back up? >> well, i think they've learned a lot over if course of the
summer about how reliant the economy is on these low interest rates. so i think the difficulty for them is if they start -- if they do begin tapering, how can they change their communication this time around to make sure they don't see such a -- on the long end of the curve such that monetary conditions still stay accommodative and they are still nurturing the economy? in other words, how do they tell us we might be slowing coming off the acceleratoaccelerator, still nowhere near the break. that's what this time, if they begin, they've got to get right. >> meanwhile, china needs to be more specific on its policies and what it intends to implement following the third plenum, this according to u.s. treasury secretary jack lew who is currently touring asia. speaking exclusively to martin in singapore. he gave his view on what we know about china's reform plan. >> frankly, there are a lot of questions still to be answered as the communique coming out of
the plenum is at a very general level. so be optimistic, it does lean towards more market oriented policies. it doesn't spell out all the policies. so we'll be having discussions where i hope to learn more about some of the specific policies. the tests are easy. the tests are -- you look at something like the shanghai free trade zone, they moved to open it. we'll see what the details are. it can't just be a banner. it has to be some details underneath. if it opened up markets like financial services and other things to competition. you look at where they move on curren currency. they have to move steadily in the right direction and continue to close the gap and ultimately we need to have a bull market. they're making progress, but they need to have steady, sustained progress and not moving back and forth. >> what did you make of what we do -- we didn't get a huge amount of detail. are you confident we're going to
get more details? is the plenum already a di disappointment? >> china knows it's going to have to go through a dramatic shift in its business model, away from a restrained currency, repressed financial system, business models to opening up the financial system, wage growth, consumer driven growth and then internationalized currency. that's a pretty significant shift. and they understand that and they are going about it in the right way. it's not surprising they didn't give us the finer details on the road map. because this is a pretty extraordinary transformation they're going to go through. but they absolutely know that it's what is necessary to get china to be the biggest economy in 2020 and that's their entire objective. >> karen, good to see you today. thanks so much indeed for joining us. we'll take a short break. still to come, weighing in on safety concerns about the tesla model sedan.
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the atlanta fed president dennis lockhart says the central bank could start tapering its qe program next month. and mark carney reiterates a 7% threshold as a staging post, not necessarily a trigger for raising costs. now, it could be said that when talks, people listen. the entrepreneur behind spacex is never one to mince his words. he made headlines tuesday. courtney reagan joins us for more. hey, court. >> hi. good morning to you, ross. musk says tesla will not recall its tesla s sedan. three fires have been reported in the last month, two of on which occurred when the driver ran over debris that damaged the car's battery pack. speaking to our andrew ross
sorkin in new york, musk says the headlines are misleading and that the model s has a smaller fire risk than the average gas powered car. musk says prior to the recent sell-off, the company's high stock prices got a little in the way of doing business, as usual. >> actually, the high stock price was sort of distracting. and, in fact, i went on record as saying that i thought the price was higher than we had any right to deserve. i mean, that said, i do think long-term that the price will be -- the value of the company will be well in excess of that. but to give us that valuation now is to have a lot of faith in our future execution. >> musk looking cool in that leather jacket. shares picked up in after hours. as we take a look at how they're trading in frankfurt at this point. up about 3%.
musk has been referred to as the steve jobs of automobiles. he says if he ever started another company, it might involve supersonic electric airplanes. musk says he thinks the future where just about everything will run on electric power. >> i feel confident in predicting the long-term that all transport will be 100% electric. with the ironic exception of rockets. unfortunately, there's no way around newton's law. i think people will look back on this era like we look back on the steam engine. it's quaint and, you know, we should have a few of those around in a museum. but it's not how people will drive. >> musk is also not one to back down from a fight, firing back at hollywood superstar george clooney. clooney told "esquire" magazine he used to own a tesla roadster, but complained about always be stuck on the side of the road.
clooney reported lly auctioned s off for charity for $99,000. musk says the comments were needless and george clooney reported his iphone 1 had a virus in 2007. >> something else to look at, as well. we've got the full art auction get ago big boost last night. christie's bacon painting sold for a record $127 million. the 1969 piece, three studies of freud, depicts the grandson of sigmund freud. the auction set another significant record as chess kuhn's balloon dog. this sculpture went for more
than $58 million, the most by any living artist. the christie's sale took in $691 million in total making it the most expensive auction in history. i don't know if you can see those pictures. that is a 12-foot copper/steel balloon dog. >> and what does one do with this copper/steel balloon dog? >> apparently there's five of them in different colors. you stick them on your driveway, i guess, or your front garden. they don't bite the postman. >> no, they don't. it's -- art is one of these things. i just don't get. it's beautiful, but that is an awful lot of money to pay for a balloon dog. >> yes. $58 million is a lot for a metal balloon dog. i'm going to now try and blow itch a couple of balloons, make some shapes and see whether i can turn that into some art.
there's an idea for all of us. court, thanks for that. we'll send one over to your house. talking about spending a lot of money, retailers are talking about opening up all the stops and opening up early on thanksgiving. we'll be joined by beyond the rack next. welhow is everything? there's nothing like being your own boss! and my customers are really liking your flat rate shipping. fedex one rate. really makes my life easier. maybe a promotion is in order. good news. i got a new title. and a raise? management couldn't make that happen. [ male announcer ] introducing fedex one rate. simple, flat rate shipping with the reliability of fedex. 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.
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european equities today have been softer during the session. the ftse 100 down about 1% at the moment. the xetra dax, cac 40 and ftse mib off between 0.25% and 1%. u.s. futures are indicating a weaker start at the moment. down not by much is off some 24 points below fair value. the s&p at the moment is around
1.5 points below fair value. the nasdaq is around 4 points below fair value. macy's kicks off a week of earnings by u.s. retailers today. investors will be lisping for any comment about the holiday shopping season, which seems to start earlier and earlier every year. the national retail federation predicts total sales to rise 3.9% this year, up from 3.5% from 2012. as for online sales, they could jump as much as 15% to $82 billion. joining us is the ceo of beyond the rack and joins us now. the fact that we've got less holiday these year because of the closeness between thanksgiving and christmas, how do you combat that? >> well, i think the most important thing we can do is get an early start. i think you're seeing both in bricks and mortar and in online, many of the retailers are trying to get a jump because
effectively we're losing about six selling days versus where we were last year. >> but if you start early, are people going to spend money earlier? >> well, that's external hope. i think anytime that we've seen in the past where we can offering consumers great valuable regardless of the timing, we see consumers respond. so i think on a combined basis, the entire industry st hoping that that happens. >> but it's going to make everything much more competitive, isn't it? >> i think the competitive landscape, many of the consumers already are looking towards moving many of their shopping decisions online because the malls are going to be more compact so there are going to be more people there. so i think a lot of consumers are looking for convenience in addition to value this year. >> how much of that online is becoming mobile? >> well, mobile is really a huge
trend. two years ago, about 6% of our business was mobile. today, it's over 50%. so it's huge between tablets, iphones, android and mobile apps. a big part of the e-commerce business is moving towards hand sets and away from desktops. >> yeah. i suppose it's the different between a smartphone and a tablet. look, how are you competing at beyond the rack? are you going to put more categories in, presumably? >> well, for us, it's really about offering consumers what they want. which is convenience and great pricing. so we have a team of merchandisers that all over the world to find great bargains on brands that consumers love. one of the big things we did over the last year is we expanded our merchandising assortme assortment. so a big part of what we do
today is not only fashion accessories, but also values for the home. kitchen, bed and bath and things like that. so we're offering a completer store, if you will. >> yeah. and that takes you into a different competitive landscape, though, doesn't it? >> it certainly does, but you know, the thing about our business and what we have found particularly in the flash sales space is 80% of on our revenues come from repeat customers. so it's really about offering a greater selection and greater value to your existing customers. >> do you think customers are going to be spending less this holiday season for a purchase? >> well, based on the trends so far this year, it seems like our business is up about 35% year over year. and the early trends in november is that that trend is consistent. so we're very bullish on the fourth quarter for this year. >> okay. thanks very much, indeed, for joining us. that's just about it for today's edition of "worldwide exchange." coming up next, "squawk box" the countdown to the opening of
markets stateside. keep it here on cnbc. we'll also, for uk viewers, have the latest on the bank of england's quarterly inflation report. bye for now inspect. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances.
good morning. jack lew says the s.e.c. is moving in the direction it should and he still supports the strong dollar. plus, a painting, the tri something or other, fetches $142.4 million. and it's not even sigmund freud. it's one of the biggest auctions in history. and elan musk breaks his silence. the tell us tesla ceo says the automaker isn't recalling model
s cars. it's wednesday, november 13th, 2013. 11- 13-13, which means nothing. "squawk box" begins right now. >> good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. the treasury department will release figures for september. speaking to cnbc asia earlier today, treasury secretary jack lew sounded optimistic. >> we obviously went through a period of economic difficulty. but what we learned is it did get to the 11th hour. but in the 11th hour, there was a broad bipartisan consensus in the united states to be where