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tv   Worldwide Exchange  CNBC  November 22, 2013 4:00am-6:01am EST

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from this, and that is to say that any action that the ecb takes to reduce the uncertainty -- >> okay, we're just going to keep mr. draghi there in one corner, coming up now, probably europe's most important sentiment indicator, expected to tick up slightly, and that number's due any moment now. as we do so, the euro's near a four-year high against the yen, waiting for that number. the ecb, mr. draghi saying it's very important that we all view everything in a european view. the german business climate index has risen in november, 109.3, better than the reuters consensus for 107.7. and the current conditions, 112 112.2, and the expectations sector 106.3, but the main headline number, 109.3 versus
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forecast of 107.3. the expectations, again, was also better, the consensus was about 104, came in at 106.3. euro's back up to the best levels of the session against the dollar on the back at 1. 1.3519. bund futures also extending losses after that data as well. while we listen in on mr. draghi, quick reaction on that from ricardo. we've seen germany out-pacing the rest of europe. still continuing. >> yes, looks like things are picking up a bit. we saw it yesterday from the pmi as well. both manufacturing and services. it will be interesting to see if there is their service sector survey improved in november. i think it did improve in november. so, we have much better conditions, and that actually supports my own expectation, which is that germany will see a significant growth pickup in the
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next few years. i'm forecasting 1.7% growth from next year, 2.5% for 2015. >> mr. draghi is making point we have to set monetary policy for the full year. and the next two components of that, france, the economy's getting weaker, and italy's still contracting as well. >> yeah. well, i think the italian economy in this quarter will probably rise slightly. i'm looking for 0.1% increase in real gdp. i think the increase in france will be similar to the one in italy, 0.1%, 0.2% at best, so it's clear france is struggling because it has a tighter fiscal policy than germany. it has a less economic economy oppressed by excessive public spending and a very high tax burden. so, that will continue to be the problem for the next two years. i think the only way to allocate that is to once again dilute the
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fiscal consolidation targets that france has presented to the european authorities and aim for a slower process of fiscal consolidation. >> okay. will have to rewrite the rules again. let's turn back to mr. draghi, check in with more of what he's saying. >> -- of this process is to increase transparency so that private sector investors know exactly what is in the banks' balance sheets. and at that point, once the trust is recovered, they will trust putting their money in the banking industry. i think that's the main thing. when all is said and done, that is what we want to achieve. investors should have the facts they need to properly price assets and be assured that banks are sufficiently capitalized. we aim -- when i say we, i don't say only ecb, because all the national competent authorities are working with the ecb in an
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atmosphere that is very encouraging. let me say, i see some who are calling us here today, just want to tell them that the way they work together is truly very encouraging. it's conducive to mutual trust and to collaboration that is inducive of further progress throughout this difficult exercise. but the exercise here is have a supervisory risk assessment, an asset quality review and a stress test. i will not go into the details here as they are being communicated separately to groups of banks. we already had two meetings. this afternoon there will be a third meeting, and so, we will complete this first round of communication with the banking industry. this exercise is going to be comprehensive because it will cover 128 banks and about 85% of the assets of countries
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participating in this. it will be consistent because it will be centrally led with a regalist common methodology and there will be no room for perceptions of national bias. there should be no doubt about the credibility and riggor of te assessment or comparability of results. let me add here that by end january, we expect to announce the key parameters of the stress test exercise together with the european banking authority. we are aware of gathering this information that we need to move with the exercise requires extraordinary effort for national supervisors but also, i would say especially for banks, and we are all aware that next to providing us with the information we need, you also have to run a business on the
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side. so, we are fully aware of that. and in a sense, the collaboration between the various parts of this exercise is key, and i'm saying this also to ourselves. but one thing we have to remember, even though this effort might appear massive, and it is massive, it's not going to be a recurrent request by the ecb. it's a one-off exercise we do. since last year, banks have been improving the robustness of their balance sheets by increasing capital in provisions. in this sense, this exercise is already producing results, and i encourage banks to continue. so, if capital needs are being identified even before the aqr is being performed, we encourage prompt, corrective action by the
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banks. if private sector solutions cannot be achieved and we have trust that they can be achieved because private capital markets now are functioning much better than a year ago, but in case they cannot be achieved in a timely and realistic manner, there is also a responsibility for the public sector to ensure the credibility of the exercise, we need clear public backstops at the national and european levels. if they are drawn upon, the commission has clarified now, there is no more confusion, that the state aid rules will provide for a level playing field in terms of budget-sharing or burden-sharing, while financial stability will be fully safeguarded. the ecb's comprehensive assessment, therefore, provides the first step towards building confidence in euro area banks and between euro area countries and their competent authorities. i call on all banks covered by
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the ssm to join our effort in the coming months by supplying the necessary information to the ecb and to the national authorities. by undertaking prior actions were needed, and by proactively responding to the conclusions of the exercise. once the ssm is established, it offers a real possibility to take a new european approach towards governance of the financial sector, and hance to reverse the fragmentation that we have seen during the crisis. there are three ways in which i see that the ssm can help. first, the ssn can supervise in the european interest. as european supervisor, it has no incentives related to national champions, and its mandate is fully aligned with its european financial stability
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objective. the fact that the new european supervisor is not only legally independent but also independent of any single government or national financial system facilitates the pursuit of its objective. second, the ssn can increase confidence among supervisors, and that's what i hinted at before. during the crisis, some supervisors motivated by uncertainty engaged in defensive actions, such as national liquoritity and national asset liability matching. this might have been rational given their mandates, but simply, it produced further fragmentation. under the ssm, all supervisors will have the same rules, standards and decision-making procedures. as such, a supervisory assessment from the ssn that a
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bank is healthy will be a seal of quality that is valued from one country to the next. third, the ssm can foster trust between banks. european supervisors should make banks more confident to lend to one another across borders, in particular, in the interbank market, and it could also make banks more willing to engage in cross-border mergers and acquisitions. this would deepen financial integration and make the euro area more resilient to fragmentation. our long-term vision, and i stress, our long-term vision for the ssm involves an environment where a worthy firm or household can get a loan from any bank in europe at comparable conditions and where location considerations would now be predominant. yet, further improvements will be needed in united domains.
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there are things that the ssn will and cannot do as far as repairing fragmentation is concerned. it's not only different supervision that holds back cross-border banking integration and activity, also different national legal frameworks, different tax regimes, different rules for corporate governance contribute to fragmentation, and these issues were in consideration to facilitate financial reintegration. another essential element in building a more integrated european banking market is greater harmonization of how no valuable banks will be resolved. this requires a consistent legal framework between countries and a single resolution mechanism to enforce this framework. the first part has already been agreed by governments. the second part, the srm, needs to be pursued as a matter of
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urgency. a robust srm would encompass all banks established in member states participating to the ssm. it would have its center, it would have at its center a strong and independent, single resolution authority that can act evenly across countries and make decisions in the european interest, and it will have adequate powers, tools and financial resources to resolve institutions swiftly and effectively. the key to an effective resolution regime is it creates legal certainty, consistency, predictability, thus helping to avoid ad hoc solutions. to this end, there are two points where i think more certainty is needed. first, one of the new euro resolution framework provides the appropriate resolution toolbox, it would be better to
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have it available right from the start of the srm. i therefore support implementing the bailing tool well before 2018. i think the sooner, the better. to prolong the data means only prolonging uncertainty. second, to price risk properly, inbound investors need to see a clear pecking order in resolution financing, running from capital write-downs and bail in to use of a bank single resolution firm. however, it would be difficult to make such a pecking order credible without a public backstop for the single resolution fund for exceptional cases where its resources are exhausted. otherwise, investors may suspect the governments may at some point be forced to step in again. such a backstop would still
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resolve in the private sector pain, as any borrowing by the fund would have to be repaid, if needed through levees on the banking sector. in other words, the future system would not be about bailouts or mutualization. it would be fiscally neutral. the taxpayer would not pay. >> all right, you've been listening to mario draghi, at the banking conference, making a number of points there, saying that we need clear backstops on both the national euro area level and that last point he was making about the single resolution, and we must have a bail-in tool well before 2018. ricardo baviari's still with us from mizzou hue international. he can make those points and he just maid the final point that there wouldn't be any mutualization of debt, but we are a long way away from agreement between the positions in france and italy and that in germany. >> yes. >> how do we square that? >> well, we, obviously, it would be better if germany had a
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government, a new government fully in office, and then there will be a negotiation. but i think draghi's already hinted at what could be a possible compromise, because he said the taxpayer would not be liable for this resolution, it would not be mutualization. so, he seems to be hinting at a solution where, you know, having a european fund intervening would be really the last resort. and the first thing -- >> germans have been very clear, and it's part of the coalition talks, they will not have the ecm used as a backstop for banks. they're just not going to approve that. >> well, we know it has been used for spain, so it's still there, but so far, it's a loan to the national government. the national government won't lend to the banks. the original deal was, once we
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have the single provision mechanism, so the ecb's fully in control, then the esm will be used to directly recapitalize banking systems. i think the compromise will be that first there will be a degree of bailing in of bondholders, obviously, of stockholders in those banks. then there will be a level of national intervention, if needed, in extreme cases, and only as a third line of defense, there may be a european intervention. so, you know, in order to support the banks. so, that i think, he's outlining, in my opinion, a possible compromise, which is a bit different from what was decided in 2012 in very general terms before the spanish bailout. >> okay. that's banking. just very briefly, update on what policy happens next from the ecb.
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yesterday he made this comment, we had discussed deposit rate cuts. there's nothing more to add. euro rose a little bit on the back of that, but they have cut rates. and castanzio made comments earlier in the week, said look, we had previous meetings, we looked at qe, and no, we didn't take any further. what is going to happen with policy? are they going to ease further, and if so, how? >> i think first of all, as to why they are doing -- why they're making these comments is obviously because they have a forward guidance with an easing bias. they must say they're willing to do more, otherwise, there would be no credibility to their statements. now, as to what they do next, if they need to accommodate further, i think a rate cut is more likely than qe. qe's really the bazooka -- >> the deposit rate or -- >> i would expect both. >> right. >> meaning that if the ecb cuts some time next year -- i don't
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see them cutting in december -- it would be a cut hype -- at least, my scenario would be they cut the refinancing rate again, say to 12.5 basis points or 10 basis points. i don't see it below ten basis points. the deposit rates seem metrically move from zero to say minus 12.5 basis points, so the corridor would be -- >> they keep the corridor. >> they keep the corridor of 25 basis points. this would push beyond year, presumably, trading on the bid side below zero, and it would compress the front end of the curve, it would weaken somewhat the euro exchange rate, and that would be the purpose. now, are they going to do it or not? i think they need to see at least the data for the first months of next year. is there any evidence of a triple dip? is there any evidence of deflation, even in germany? if we see the cti moving towards
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zero in germany, then i think the bundesbank will support the move. i don't see them acting before the next three months and a lot depends on the fed, what the fed does. >> a whole separate discussion. ricardo, thank you for joining us. from mizuhu international. all right, getting to today's program, our road trip across emerging european economies comes to an end today. jeff catches up with poland's first star chef, cooking up something of a storm in warsaw. and japanese properties, find out what's driving appetite in our exclusive interview with the ceo of aeon. we also turn to nigeria to find out how this fast-growing economy is trying to diversify to cut its dependence on oil. we'll have exclusive interviews with the central bank governor and the finance minister. and at 11:20 cet, we'll get the top tech predictions for
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2014. some of it is expected, new wearable gadgets as well as more virtual payment systems, some of it less so, and it involves tattoos. don't miss that. all right, global equities a little bit firmer for the dow jones stoxx 600, out-pacing decliners by 6-3 at the moment. european equities a tad high. we saw the ftse yesterday absolutely flat, just up nine points at the moment. xetra dax up 15 points, not far from the all-time high. the cac is up and down 0.2% at the moment for the ftse mib. sixuan has the update in asia. hi, sixuan. >> thank you, ross. the dow's record close helped spur a rally in asia, but gains are modest as outflows on uncertainties for the fed's tapering timeline capped further up sight. the nikkei 225 hit six-month
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highs as the yen weakened 1-1 to the dollar. china markets saw profit-taking in out-performers such as media stocks, but hong kong, taiwan, south korea and australia all traded to the up side. and on to the big winner in japan, sharp shares jumped over 8% today to a seven-week high after reports that the company will supply china's zte with its power-saving displays. reports also suggest the company is in talks with apple to potentially provide other manufacturers display panels from its plant that currently supplies to the iphone maker. and moving on to china, reports say beijing is drafting new rules to crack down on shadow banking. the measures including taming the explosive growth in complex interbank transactions and some secret agreement guarantees are likely to be put in place early next year. and on the other hand, banking authorities also said beijing will loosen restrictions on small loan finance companies in order to increase private capital in the financial sector.
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and mainly in banks mostly under pressure in today's trade. so, that's a look out of asian markets. back to you, ross. >> all right, thanks for that, sixuan. catch you later. activist investor dan loeb is making another big bet on a japanese firm with u.s. ties. his hedge fund revealed it has a $1 billion stake in softbank and that send the japanese telecom shares up to a 13-year high. he met recently with the softbank chief executive but says he didn't propose changes. softbank recently took control of sprint in the u.s. for $22 billion. loeb says it's the company's big stakes that are most attractive. so, mario draghi's been warning investors not to incur anything from his speeches in berlin thursday and frankfurt today about the possible deduction of negative deposit rates. rumors continue to swirl that the ecb president is considering
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reducing the rate for lenders. the euro fell yesterday on reports, but jeff has spoken to one central bank who's not sure the policy would actually have the desired impact. and he joins us from a rather chilly warsaw once again. hi, jeff. >> reporter: yeah, good morning, ross. you know what? here in poland, they do have the luxury of not having to pursue unconventional monetary measures. the base rate here or the key benchmark rate, 2.5%, and malik balker saying to me that that gives them a certain amount of dry powder, should economies in europe start to turn down and should the polish economy suffer anything like a slowdown in growth. in fact, if anything, the polish economy has been picking up over the last 6 to 12 months or so, and they'll be hoping to do at least 2% here, but i did, when i had the opportunity to talk with
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mr. belker, asked him about the policy being pursued by the central bank right now and whether he felt that a negative deposit rate would be helpful for stimulating economic activity in the eurozone. let's listen to his answer. >> this point -- [ inaudible ] 0.1% deposit rate would change the situation so much, will it induce bank credit? probably not, not very much. what the european central bank can do is probably try, and with some success, try to weaken the euro, which is not without merit for some countries in the eurozone.
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what is less important but will necessarily take more time is the cleaning and strengthening of the european banking sector. >> reporter: so, we've been here talking to the head of the central bank, but we're also here in poland trying to find out what the investment opportunity might be now that this economy and the region as a whole seems to be coming out of its recent slump. with me, i have thomas trusla. he heads up the property business here of jones, lang, lasalle. welcome. good to see you. how has poland fared as an investment destination in the property arena compared to the rest of the cee region? >> it is definitely a place which attracts the interest of most of the investors in the region. a couple of years ago, the interest was spreading little bit more equally throughout the region, but this has changed in the last five years. poland is now attracting 70%,
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80% of capital. so, this is really the place of activity. that's where the international capital wants to invest. clearly, from jones lang perspective, from my perspective, we're happy to see the interest continuing. >> reporter: and if i arrive ed rather green international investor looking to put some money to work here in the property sector, what would be the best way of going about it? are there investment vehicles or should i try to invest directly, maybe, into residential? >> you could consider many options. you could, of course, come and try and do the business directly, but it's going to be time-consuming, or you could consider using some other vehicles. there's two polish vehicles or three polish vehicles, not too many, but they could be considered, but there is also a number of international vehicles, some of them trading in london under that market that would welcome your money as well as part of their financial base.
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>> reporter: okay, so, there are opportunities to get in through the equivalent of, like, listed reits, but why would i want to own polish property at this point? could you just talk us through maybe the yield advantage or the capital gain pickup expected in residential, commercial and retail? >> sure. one needs to remember that there's investors looking at various return parameters. for the core funds, my take is poland is just a nice diversification place. so, the place is viewed as positive growth investment environment but also stable in terms of the return. so, for the core funds, it's just the place for diversification. for opportunistic funds, the market provides some opportunities that have some of the western european countries don't, at least to date. so, that's also the driver. in terms of the yields, clearly,
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it's not as major a country as some of the western european countries. there's also as a result a yield premium for it. so, if you come and want to buy a premium, prime shopping center, you would be looking to pay in the range of 6%. clearly, in some of the western european countries, let's take germany, the neighbor, figure you would have to pay at least 100 basis points less. >> reporter: so, you've got a reasonable yield pickup, 6.5% to 7%, depending what you're going to put your money in. what about security of rights of ownership, because that's something a lot of people worry about? my understanding is that the residential market has, to some extent, been affected by legacy issues from the second world war and ownership questions over some parts of major cities. i wonder if you could just talk a little bit about how secure my rights would be to property i bought here. >> sure. of course, when you come and want to buy something, you should do your legal due
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diligence. i would never advise to come and buy blindly. and once you do your due diligence, there's specialized lawyers that could do all the checks and you clearly define what the situation is with your mortgage risks. and if there's issues, you would see them reduced, then you could seek some legal advice whether this is safe to do or not. but even in the cases where there are resolution claims, you could also secure a title insurance. there's a couple of providers of this vehicle, so you could, if you think there is a risk, you could actually cover for this risk by entitling insurance. so, it's absolutely safe in terms of title security. >> reporter: thank you so much, then, for joining us here and telling us a bit more about the property market opportunities. so, if you want to come here, i think, ross, it's probably not a widows and orphans trade, but the listed vehicles do give you the opportunity to get access to some of the up side.
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the broader question i think you still have to ask yourself is where does it fit into your general portfolio. i think as our guest has pointed out, an interesting diversification trade, but you may not want to go all in. you may want to look at some western property markets for more security, even though the yield would probably be lower if property is your thing. back to you. >> yeah, good stuff, geoff. we'll be back out with you once again during the course of this show. time to get a hot chocolate. meanwhile, you can also head online to read more on our "emerging europe" series as well as take part in our poll. we're asking you which country offers the best investment opportunity out of those that we've visited, hungary, romania or poland? let us know your thoughts. meanwhile, a recap of the headlines today. stocks around the world rallying after the dow hit another major milestone. it's closed above 16,000 for the first time ever. investors paid pretty close attention to germany ahead of stronger-than-expected ifo
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boosting the euro and ecb president mario draghi throwing his support behind bank stress tests. >> one thing we need to remember, even though this effort may appear massive, and it is massive, it's not going to be a recurrent request by the ecb. softbank fails. shares jump to a 13-year high after dan loeb's hedge fund reveals a billion-dollar stake. and the game is on. microsoft takes on sony, launching the xbox one in 13 countries today. it hopes that the price tag, $100 more than the ps-4, will not deter shoppers.
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and european equities are firmer today. the ftse 100 is pretty flat, it was a flat session really yesterday. zet was dax a little bit firm, not a huge lift on the fact that the ifo business climate came in stronger than expected, 109.3 the headline index versus expectations of 107.74 in november. on the bond markets, a mixed session for treasuries yesterday. the philly fed offsetting better-than-expected weekly jobless claims.
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still, a yield of 2.78% this time, yielding around 2.79%. ten-year bund yields ticked up. euro-dollar moved up higher as well, 1.35, best levels of the session just about on it. dollar-yen 1.0108. you had been up for the greenback against the japanese currency. we're looking to see if we'll maintain a break above 100 this time. and sterling-dollar around that 1.62 level. the aussie-dollar also we'll look at later, but the rba governor glen stevens says he's pretty open-minded about whether to intervene further to weaken the aussie. now, wheaties may be the breakfast of champions, but chi china's state-controlled food group thinks it could be a winner with investors and is considering listing its recently acquired cereal maker. there's no timeline, but bright
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food bought a 6% stake in wheaties last year in a $1.9 billion deal. but the biggest ipo in hong kong this year could come from a chinese bad loan manager. they originally set up as one of chinese bad banks and is now planning a $2.5 billion offering. already key investors are lining up, including oaktree capital, king ang insurance and the abu dhabi investment authority. also, gilt group is reportedlireporte reportedly eyeing an ipo in 2014. all things digital says the site hasn't hired any banks for an offering, so the timing could slip until early 2015. early reports are that gilt has performed very well under the new ceo that took over in february. they say revenue has grown 40% over the past four quarters versus the previous four. and japan's biggest retail firm saw a strong start for its
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newly listed reit. aeon's reit nearly $1 billion ipo, rose a solid 8% on the first day of trade. the retail giant selling its properties to the reit and then leasing them back to supply cash flow. the president and ceo told cnbc the reit will then look for opportunities as well in southeast asia but also in japan as the economy recovers. >> translator: there is expectation that rents will rise in tokyo. however, there is underlying concern about the decline in japan's population. so, if i were to talk about areas outside of tokyo, i would think it's neutral to slightly positive. >> joining us for more is the chairman at andrew leon consultants, andrew leon on the phone. we just heard the company looking for further opportunities. what do you think of it? >> i think as far as japan is
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concerned, it's really the economics trying to turn things around, but then the economic depend on the three arrows. and the first arrow is trying to cheapen the japanese yen. this japan has done. of course, that's not the end game and then could be up and down again, but the general direction, it's what's driving down the yen in the long term to help japanese exports. now, the second arrow is part of the stimulus. in the past, japan's stimulus has not really worked in japan and there is no telling whether this could turn around any kind of similar investment in infrastructure and so on, so forth, is going to work. but i think what might be different this time is maybe they're going with some economic goal and trying to build a kind of new japanese economy, as it were, and try to pull out their labor skills and so on and so
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forth. now, that has not really happened in a big way. but the third most important arrow is structural reform. now, the japanese economy, of course, is plagued by the aging profile, one-third of the population is over 65. now, no policy is going to turn that around, but what abi economics is trying to do is perhaps woo more women into the workforce and trying to also break the kind of linkage between the political parties and big businesses, and also maybe easing the kind of taxation and trying to turn around the economic structure in japan. now, that's easier said than done. but on the other hand, as far as ipos are concerned, there's a huge flood of liquidity throughout asia as a result of years of positive easing and all the money running around the world, especially in asia, where the economies -- >> so, andrew, we've got this liquidity coming in --
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>> they're capitalizing on that for the ipos. >> yes, we've got liquidity coming in, as you say, because of qes. what if we start tapering? is liquidity going to withdraw? are we therefore at a high point for ipos in the rest of asia? >> well, i think that those are still a lot of uptick on the market. as i was saying, because so much liquidity and interest rates, at least in the short term, remain quite low. and so, where is the money going to go? obviously, as far as japan is concerned, the market seems to be going up because of the lower japanese yen pushes up the market, so there is a lot of upside in the short term. but my -- you know, my recent remarks were just saying that this is unlikely to turn the japanese economy around in the long term. but in the short term, yes, the market is going up with a lot of liquidity and it seems to be the time for ipos and capitalizing on this excess liquidity. >> final word about ali barber.
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the exchange wants it, but you know, no exchange wants it if they have to change their rules and there are question marks about their shareholding structure. where do you think they're going to go? >> well, the share structure, i think -- well, it really depends on each company, how the structure, you know, their share structure. but i think the world is now much, much more, as i was saying, goes around, and also, the kind of businesses. if you look at even manufacturing of cars, there's components there could oe that could be manufactured anywhere else, and to look at the computer, various locations, manufacturing at the contracting locations are contributing to this. so, i think that the kind of structure of a company is now increasingly global, and that applies not only to companies from japan, from america, but also increasingly companies coming out of china. >> andrew, thanks for that. good to see you as always, andrew leung calling us from
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hong kong. right, that's the latest with andrew. now, u.s. hedge fund third point has invested $1 billion in japanese wireless giant softbank. now we have more from tokyo. >> hi, ross. daniel loeb's company now has a roughly 1% stake in softbank and has publicly declared support for prime minister abe's economic policy. it looks like softbank caught mr. loeb's attention through yahoo! where he served as an outside director and was a major shareholder. softbank also held yahoo! shares and owns the online search company's japanese subsidiary. thirdpoint has been lining up new investments in japan, and with a stake in electronics giant sony calling for a spinoff of the entertainment business, all eyes are now on what stance mr. loeb takes on softbank, but one company official said so far, it appears to be a pure investment. softbank's shares surged 2.3% today and a market cap exceeded
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10 trillion yen benchmark at one point. ross, back to you. >> okay. thanks very much, indeed, for that, shishiko. she just mentioned sony selling the entertainment unit, but not with a spinoff like the one dan loeb suggested. sony pictures entertainment said it would make shows with higher margins and fewer movies and will cut spending by $250 million in the next three years. and in a break from the past, the division laid out future guidance for its growth rate and operating income. sony shares down 1% in tokyo. and sony's rival in the gaming console space, microsoft, held launch events in london, new york and los angeles to mark the arrival of the xbox one. the launch comes a week after the u.s. release of sony's playstation 4 and comes ahead of the critical holiday shopping season. the xbox one will cost around $500. that's $100 more than the ps-4. microsoft's shares are up 40% year to date. the xbox one launch coincides
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with another big gaming event. nintendo shares higher ahead of its release of the latest super mario game in the u.s. later today. nintendo will release a range of games to go with it. super mario 3d world for its wii console and legend of zelda for its 3ds device. reuters suggest shares are up on a good review of the games and a weaker yen. we'll get more on this with alex simmons from ign about the console battle at 11:30 cet. elsewhere, spotify has reportedly raised $250 million in a new round of funding which values the streaming music company at more than $4 billion. the financing was led by silicon valley firm technology crossover ventures. spotify, based in sweden, is looking to expand its global growth. the service is well established in many western countries, including the u.s. spotify aims to launch in parts of asia, including japan. and here's your chance to
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get a very expensive piece of sports memorabilia. michael jordan's chicago area mansion is up for auction today. the 56,000-square-foot house is on 7.4 acres of land. it has jordan's signature number 23, which you just saw on the front gate, and comes with a regulation-size indoor basketball court, as you might expect. there's no minimum bid, but you've got to put down a $250,000 deposit to take a part. the property did fail to sell when it was listed last year for $29 million. there you go. that's the basketball court. so, what feature would your dream house have? i can't imagine many of us would want a basketball court. anyway, you could imagine personalizing your home if money was of no concern. let us know. join the conversation. you can e-mail us,, twee tweet @cnbcwex or @rosswestgate. i kind of like the idea of swimming pools that sink and
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raise and lower themselves. we'll take a short break. we'll be back in a few moments time and talk about nigeria.
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nigeria's government says it's making progress by diversifying its economy but admits it still needs to do a lot more to cut their dependence on oil. around 70% of the country's revenue comes from the energy sector. as steve has been speaking to various officials from the nigerian policymakers -- >> it's one of those things where you're doing "squawk box" and then somebody says to me, there's a really interesting interview in the afternoon, and i did this and it was absolutely fascinating. i didn't know a lot about nigeria, ross, but what i know quite a bit about is the energy sector and i've spoken to their oil minister a lot over the years of the problems they've got. so, that's my thought, oil, problems, bad problems with shell and we've heard of them at each other's throats at the time. >> and? >> the point is, i've come away with a good impression on it. it's got a population of 173 million and is growing fast. it could have the same population as the u.s. by 2015 and they're trying to diversify. 25% of revenues are oil-based and they have massive theft
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problems. there are still big property problems, poverty issues, corruption problems, infrastructure problems. so, that's all there, but as a country that is actually trying to use some of their wealth to diversify and move up the value chain as well. anyway, i spoke to, amongst others, in ngozi, the finance minister, spent a lot of time in washington as well. let's hear what she had to say about how nigeria is creating growth and reducing dependency on that oil trade. >> well, nigeria's already one of the fastest growing countries in the world. we just saw third quarter gdp growth at 8% and we expect to end the year at about 6.75%. actually, the imf is forecasting higher growth rates. but we think we need to grow faster in order to make inroads into eradicating poverty. the world is setting itself a target to eradicate poverty by 2030, so we'd like to do that. we also want more equal growth,
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that is, growth that creates more jobs for our young people and is also more inclusive so we can reach those at the bottom end of the ladder. >> but realistically, 70% of your government's revenues are oil-based. what chance really have you got of moving away from the dependence on oil and gas? >> excellent chances. actually, it used to be 80%. at one point, it was 90% a couple of decades ago, so we are making progress. but we want to do that faster. we've got enormous sources of growth in agriculture, which have not really been tapped, you know. agriculture is about 40% of gdp, and we think that we can turn that sector around to create jobs. in housing, we have not yet tapped the housing sector at all. we have a demand for 70 million units, unfulfilled, and add in 2 million units more per year is what is needed to meet the demand. so, there is certainly a possibility there. and you know, with housing, you create jobs, so plumbers,
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carpenters and all those sectors. manufacturing, we have a population of 170 million, a large domestic market. >> do you think nigeria is using energy revenues and excess crude, the count as well is lower than at the end of last year. do you think enough of the legacy of that energy, though, is being put into many of those issues you mentioned? and may i include, as well, revolutionizing the power sector. there's still power shortages, revolution rising infrastructure, rail and roads. all these things are essential to get that investment on. >> let me say something. you know, for about three decades, no investment was made in the transport sector, very little, let me say, not no, very little. when the country was under military rule. if it's taken you three decades or so to undermine sectors, it will take you quite a bit of time to restore them. the issue is, are you putting in place the right policy to do so?
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i think that just now, under this administration, there has been considerable progress to privatize the private sector, liberalize it and allow power producers to come in. i think with that progress, you will see in the next five years or so improvement in the power sector. and when you have improvement, that's going to allow small and medium enterprises, households, others to benefit and the economy to move much, much better than it has in the past. >> so, it's quite extraordinary that this is an economy, and again, we look at it and say, they've got 6.8% growth, interest rates have been steady for the last 13 meetings, their debt-to-gdp, look at this one, europe, is below 20%, and their deficit is 1.9%. >> if you have oil, you should have those, right? >> you should, but a lot of these countries that you expect to have very stable economic policies, such as russia, haven't got quite the debt dynamics you would hope they would have. anyway, but also, i had the pleasure of speaking to the central bank governor.
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this was alamido senussi. he explained how the country could be affected when they begin tapering qe, very pertinent, of course, for the emerging world. >> the financial markets remain very vulnerable and fragile. if there is a change in monetary policy, as will happen in 2014 in europe and america, and you have a reversal of capital flows, there will be an impact. so, we kind of have to be sensitive. we've bought some time and we have a very short window which to fix some of the issues we need to fix, structural issues, fiscal issues, build-up so when capital flows actually begin to reverse, we don't have the kind of impact we had in 2008-2009. >> and as far as the investment pace is concerned, ross, just to back it up. and i didn't know this was going to be in here. looking at "the ft" today, looking at frontier bonds riding out the summer fed scores. that's nigeria. that's the index, 37% higher
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this year. 37% higher, which is out-pacing all kinds of indices. but just a really interesting case. i think it's time to look at these countries, be aware of the negative perceptions and not negate those, but there's a lot of opportunity in some of these country as well. >> yes, an awful lot more than u.s. small caps, i don't think. >> well, there's a lot more than the s&p, 37 as opposed to 26. >> well, yeah, but look at the risk. you know this, it's risk-adjusted return, steve, risk-adjusted returns. >> they would say you get enough bang for your buck because of the low pe there. >> yeah, we'll see. >> anyway, nice to see you on "worldwide exchange" again. we need to do this a little bit more. >> nice to see you on "worldwide exchange." if you want to stay for the rest of the show, you're welcome. >> it's not in my contract. >> you did yesterday. something happened yesterday. >> i think they promised me a day of leave. >> you were wake in the afternoon, interesting. steve, good to see you. thank you very much. good stuff. chinese state media is reporting a deadly pipeline explosion in an eastern chinese
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city. xinhua news agency says 22 people are dead. the accident is under investigation but they say caused by an oil leak. baby steps. the eu and china have agreed to start talks on an investment treaty while signing cooperation deals in intellectual property, energy security and agriculture at a summit in beijing. the deal marks a thawing of ties long marred by trade spats, but a full trade agreement is likely to be elusive. now both sides will simply study whether an fta is really doable. >> translator: both sides declared we have officially launched a negotiation for an investment agreement and will proactively study the feasibility of a free trade agreement. we will try our best to increase the bilateral trade to $1 trillion u.s. these are all major efforts to push forward china/eu economic and trade relations. >> cyclone helen is closing in on india's east coast.
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the storm with winds up to 130 kilometers an hour is expected to make landfall later today. thousands have already been evacuated, and it's been just over a month since the last tropical storm cyclone hit that region. take a short break. still to come, janet yell yellen's moved closer to becoming fed chair with stocks cheering. what's the market like now for those markets? we'll get into a fixed income discussion. plus, more from geoff out of warsaw.
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this is "worldwide exchange." i'm ross westgate. the headlines today. stocks around the world rally after the dow hits another major milestone above 16,000 for the first time ever on the close. investors paying close attention to germany with a much stronger than expected ifo. that's boosted the euro and ecb president mario draghi has thrown his support behind bank stress tests. >> one thing we have to remember, even though this effort might appear massive, and it is massive, it's not going to be a recurrent request by the
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ecb. >> the game is on. microsoft takes on sony, launching its xbox one in 13 countries today. it hopes that the price tag, $100 more than the ps4, isn't going to deter shoppers. plus, softbank feels the love. shares jumped to a 13-year high for downloads. hedge fund reveals a $1 billion stake. and a warm welcome to you. if you just joined us stateside, welcome to the start of your global trading day here on cnbc, last trading day of the week. the dow closed above 16,000 for the first time, a new record, up 109 points. right now futures are six points, five points above fair value. the nasdaq at the moment is about half a point above fair value and the s&p is pretty much trading on fair value after being up 14 1/2 points
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yesterday. european equities, we're looking at data today out of germany. we were firmer earlier and just slipped back, so back down to the flat line. the ftse down eight points. we're off eight points in germany, just 0.1%, but we did have good news in terms of the ifo business climate index, came in stronger than expected, 109.3. the headline, it was expected to come at around 107.7. manufacturers are more optimistic and they're reporting stronger exports. cac is up 4%, the ftse mib at the moment is down about a third. that's where we stand right now in europe. let's recap the final situation in asia this week with sixuan. >> thank you, ross. asian markets wrapped up the week on a positive note following a strong lead from wall street, but gains are rather modest, as out-flows capped further outsight given uncertainties. the nikkei hit six-month highs
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after it weakened 1-1 to the dollar. china markets saw profit taking with out-performers such as media stocks and telcos. banking shares also under pressure on reports that beijing is drafting new rules to crack down on shadow banking, but hong kong, south korea and australia all traded to the up side. and on to the movers and shakers. sharp jumped over 8% to a seven-week high after reports that it will supply china's cte with its power-saving displays. a report also suggests the company is in talks with apple to potentially provide other manufacturers display panels from its plant. that's currently supplied to the iphone maker. and a three-month high for nintendo, gaining over 4% ahead of its latest super mario game release in the u.s. and moving on to china, reports say that beijing is drafting all those rules to crack down on shadow banking measures, including taming the explosive growth in complex interbank
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transactions and also some secret drawer agreement guarantees are likely to be put in place early next year. and on the other hand, banking authorities also said beijing will loosen restrictions on small loan finance companies in order to increase private capital in the financial sector. and most mainland banks came under pressure in today's trade. so, that's a recap of asian markets. back to you, ross. >> all right, sixuan, thanks for that. have a good weekend, by the way, as well. the weekend starts now in asia. >> thanks. you, too. >> all right. now, europe's growth engine appears to be running at full steam. germany's ifo business survey came in much stronger than expected in november with the overall sentiment index, as i said, climbing to 109.3, compared to the forecast for 107.7. the expectations component also beat, indicating optimism for growth ahead. and the data pushed the euro to a session high, marking a four-year high against the yen. the data came as the ecb president mario draghi also
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backed signs of progress for the eurozone but insisted there are still a lot of challenges. speaking at the future of europe banking conference in frankfurt, draghi reaffirmed the importance of the forthcoming bank test and also suggested that bail-in talks would have to be implemented well before 2018. now, that better ifo number did just push yields up on bunds. ten-year treasury yields 2.78%. a slight dip down yesterday from 2.79%. the philly fed offsetting some decent weekly jobless claims. and ten-year gilt yields at the moment. henderson global investors, kevin williams, nice to see you. we had jimmy bullard coming out as well, the st. louis federal reserve president, saying bond-buying must continue. for now, we know it's going to taper at some point. are we feeling comfortable with that prospect, the yields are
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going to deal with it? >> at least we're starting from a place where yields are higher than the last time, 7.28 rather than the 1.7, so from that view, we are discounting. and i think the fed are trying very hard to make that distinction between tapering and between interest rate rises and to give -- thinking very carefully about how to give stronger further rate guidance. that's what we got from the recent fed minutes. >> is that going to work, this strategy to try to divide the two? when it happens, are we now comfortable enough with that thought? because you know, we have been rather binary. investors are binary creatures. >> investors are often binary, but i think the fed got very, very concerned in the summer about the market reaction to the idea of tapering, and by trying to lay the ground now for tapering, they are managing expectations quite well. now, i guess the issue is, do we
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get tapering in december following some strong november payroll numbers, which is a possibility, and some commentators are calling for that, or actually, do we get tapering in march once we get through all the budget wrangling -- >> or january? >> or january. and january is possible. but -- >> why are you shrugging your shoulders more at january than anything else? >> i think by the time we get to january, we're more likely to wait until march would be my sense. in january, the budget negotiations are starting in kind of february, and the proximity of that was what concerned the fed back in september, one of the things that concerned the fed back in september. so, to us, it seems -- it's possible in january, but if we get strong payroll numbers in november, then december's definitely on the cards. otherwise, perhaps wait until march. >> are we in the middle of the range at the moment on yields or are we about to set a new trading range? we've been trading basically two to three on the ten-year yield. >> if it's in for december, i think that's ahead of most
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market expectations and we can move into a new high range, maybe up to 3.75% on that basis, just as a kind of one-off reaction, but i think it's very interesting when you look at the positioning in the u.s. treasury market, there are quite a lot of people who are already short of their benchmarks. so, that to a degree limits the extent of the sell-off, we think. >> just a word about the ecb. draghi yesterday said we talked about deposit rate cuts, then left it there. nothing more to say on that. and we've got a very divergent growth projections looking now at both germany and france. so, how is that going to play out for investors in the debt? >> i think from the ecb's point of view, they're trying to tread a really kind of fine line of hinting unconventional policy measures they might undertake, if required, while at the same time trying to hold the german line of fidelity, et cetera, et cetera. so, from that point, it's a very, very fine line. where that leaves bond investors
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is, you know, yield pretty much range-bound. and i think if you contrast u.s. bond yields versus european bond yields, in europe, interest rates stay low for a very prolonged period of time, and there's a possibility of unconventional policy measures or rate cuts, and they've obviously talked about a negative deposit rate. so, that is quite supportive, particularly for the front end of the european bond markets. contrast that with the u.s., which is, okay, rates stay on hold for a long period of time, but there's more uncertainty for them to taper. >> okay, kevin. thanks very much. kevyn adams from henderson global investors. also, as our emerging europe week concludes, geoff is in warsaw with an interview that he could really get his teeth into. we're going to take a quick break, but when we come back, we're going to introduce you to poland's first chef cooking up something a little special. mm-mmm. very good. very good! we asked people, "if you could get paid to do something
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you really love, what would you do?" ♪ [ woman ] i'd be a writer. [ man ] i'd be a baker. [ woman ] i wanna be a pie maker. [ man ] i wanna be a pilot. [ woman ] i'd be an architect. what if i told you someone could pay you and what if that person were you? ♪ when you think about it, isn't that what retirement should be, paying ourselves to do what we love? ♪
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all this week we've been on a road trip of emerging european economies. it's nearing an end. karen and geoff have been working hard to take the health check of three nations in emerging europe, hungary, romania and poland, but life on the road, as we know, can be pretty tough. getting interviews with key
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decisionmakers. and geoff's got a huge appetite. so, there's only one thing to do. he had to visit the country's first misilin inspired chef. have you been stuffing your face? >> reporter: we did tuck in a little bit, ross, and enjoyed a slice of the hospitality here. but you know, over the years, there have been a couple key culinary landmarks. 20 years ago, mcdonald's opened the golden arches and brought the benefit of fast food to the polish economy and now we have the first michelin star chef, which is helping put warsaw very much on the map for those gastronomic types who like to travel to enjoy good food. when i spoke to mr. amaro, who is the chef there who started up the whole business after spending ten years in london, i asked him how it felt to get poland's first michelin star.
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>> it was really an amazing achievement for me after 23 years of working in the kitchen, but also, more importantly, it was something that, because it's the first michelin star in poland, it was like polish cuisine has joined the family of great cuisines around the world, and there are not so many. some of the michelin restaurants around the world, they cook mediterranean or international style cuisine. so, you'll find mainly japanese, chinese, italian, french, spanish cuisine in this family, and then, suddenly, we have polish cuisine with a signature approach that we have here. >> you've been open for two years. i mean, is the restaurant already a financial success? >> we pay back every single penny that we had to borrow to make the loan or even for the kitchen equipment that we lease. it's already paid back completely. so, after 18 months, we are
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fully, as in terms of financial profit, we're doing really well. we have three months waiting, at least, for a table in advance. so, it's been really going well. and we also, because i still believe there's something else that we need to develop and progress even more, we're investing the money that we are making here and we opened the lap, something to give us the extra space to experiment and test kitchen and we look for new ideas, search for new ideas. so, this is something that can bring us even to higher standards. >> looked pretty exquisite, geoff. how did it taste? >> reporter: yeah, well, i only managed to try the pudding, but that was very interesting. it was like a sweet mousse with a slight mushroomy overtone,
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which was a fascinating combination. the signature dish is pike with a drizzle of baby duck blood, which on the face of it doesn't sound that appetizing, but apparently, the chef says it's all about telling stories, and this is a very polish type story that reflects the life cycle of the pike. but, ross, for about $170, you can get yourself eight courses and a decent measure of polish spirits after the meal. so, i think that's probably where it sits in terms of culinary peaks here in warsaw. >> but we won't be able to get a table until february. so, we'll just have to -- we'll have to -- i'm trying to work out. in the life story of a pike, where does duck blood come in? >> reporter: well, there is a point, as i understand it from speaking with the chef, when the
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ducks have their eggs and then they're hatched and then these very small baby ducks are swimming in the polish rivers, and it's at that point that the large pike are able to strike. so, there is a connection between the pike and the baby ducks, but it's a gloomy story and i'd rather not dwell on it, so let me move on, perhaps, and talk a little bit about the week that we've had. obviously, karen has been in romania. she went then to hungary to find out how those countries are re-emerging from some of the growth slump after the financial crisis, and i am hear in poland, which in many senses has been a beneficiary as a large, open economy. it has attracted capital where some of the smaller central and eastern european economies, perhaps, have lost it as a result of what happened after the financial crisis and some tightening in credit conditions.
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poland has had a weak spell through 2012. growth re-emerging, though, in 2013, and they're hoping to do something close to 2%. but what, then, is the investment opportunity for our audience? let's wrap up our week here with a listen to what we were told out on the road in central europe. >> now we have to actively work and fight, even fight for growing the liquidity here in romania in order to deepen this market, in order to render it more attractive for, not only for privatized companies, but for investors. >> romania has been mineralized areas, many areas where foreign investors can come. we know about maybe 35 to 40 areas which have potential for growth mines.
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there are maybe hundreds of other areas where foreign investors can come explore. romania is one of the great destinations for the mining industry. >> after 15 years of operating with an isolated, closed trading system, we are now switching to a system that is used worldwide by 18 countries, 4,500 brokers. so, we open our market, therefore, making it more attractive for people to come and traders to join. >> the export business still makes a lot of sense in poland because, usually we have a very good behavior of the currency, that the export business is gaining very fast in poland, and i think i believe that all of the export-driven type of enterprises, they will continue to grow. i'm a big believer in e-commerce and we have an e-commerce portfolio that's basically all things ready for the new economy should perform very well.
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>> reporter: so, for now, ross, it's good-bye from poland. we'll be back, though, later on in "closing bell." and just a reminder, go to the website if you'd like to find out more about what we've been doing in emerging europe. back to you, ross. >> oh, i think we would. geoffrey, good stuff. thank you very much indeed for that. that's latest from poland. and still to come on "worldwide exchange," calling all tech lovers! we're unveiling the top sector trends for next year, from bit coins to smart watches and even what some are terming neck tattoos. find out what we're talking about after this.
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just by talking to a helmet. it grabbed the patient's record before we even picked him up. it found out the doctor we needed was at st. anne's. wiggle your toes. [ driver ] and it got his okay on treatment from miles away. it even pulled strings with the stoplights. my ambulance talks with smoke alarms and pilots and stadiums. but, of course, it's a good listener too. [ female announcer ] today cisco is connecting the internet of everything. so everything works like never before.
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[ female announcer ] today cisco is connecting the internet of everything. you get your coffee here. you get your hair cut here. you find that certain thing you were looking for here, but actually you get so much more. when you shop at these small local businesses,
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you support all the things that make your community great. the money you spend here, stays here. in this place you call your neighborhood. small business saturday is november 30th. get out and shop small. tech firms are scrambling to win the race in innovation with new product offerings in wearables, virtual payments and realtime information. these are just three of the top trends that will dominate in 2014, according to our next guest. joining us for more is michael chiasson, co-founder and ceo at social radar, a social media platform that develops mobile and social apps of the likes of iphone, android and google glass. michael, good morning. good to see you. thanks for joining us again. >> good morning to you as well. >> let's talk about virtual
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payment, and we've got this big discussion about bit coin. is bit coin by the end of the year next year going to be bigger or smaller or will it have been replaced by something else? >> well, i think a lot of the momentum that bit coin has had over this past year, they've gone from a low of trading around $32 to as high as $900. i think today it's probably somewhere between $400 and $600. so, there's obviously been a lot of momentum behind this specific virtual currency, but what i think this is really saying is that there is likely to be the creation and standardization around either one or a couple of these type of peer-to-peer virtual currencies on a global scale. and bit coin has certainly had a lot of momentum the last couple months. >> what does it mean for the likes of coin wallet, google wallet, paypal, all these guys? >> well, i think what it's saying is that people are finally getting comfortable using their mobile devices and smartphones to be able to handle the payment transactions that
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they used to handle with cash, and then started handling with their credit cards, but that it's just opening up a wider range of options for them to engage in commerce, whether it's online or in person, fully electronically. >> all right. we're also getting a big increase in wearables. i'm not sure why you'd want a smartwatch on your wrist unless it looks like a rolex, but anyway, google are coming out with something called a tattoo. what on earth is that? >> well, just this past week, people have been talking about some patents google's filed around this idea of a google tattoo, something that might go right on your neck, and it might do everything from starting to provide better tracking information on where you are to picking up your voice commands to interface with your smartphone or maybe your new smartwatch technology. and i think what really, when people are talking about google tattoo and the different wearable computing, we're talking about just this next
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generation of technology that's integrated in other ways besides just having a computer or a smartphone. it's integrated with the clothing that you're wearing, it's integrated with the jewelry that you might wear. it's something that might go directly on your skin. and this is going to enable you to provide better direct contact with the technology devices that you're now integrating with and using on a daily basis. >> presumably, the idea behind it is, is it supposed to make it easier for you to interact with the environment you're in? so, with location devices and picking up information as you move. >> yeah, i think the idea behind all of these wearables goes right into the next trend that we're talking about, which is getting that realtime information and location information and getting information that's pertinent to you depending on where you are. so, right now, a lot of the wearable devices, for example, do everything from track where you're going to how many calories that you're burning with the new google tattoo, it might provide an easier way for you to interface with these devices because the interface
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will be directly connected to your skin. but when you take all of this information together, what it means is that it's opening up a whole new realm of access to information for people. so, for example, if you're walking down the street and you're looking for a place to eat, you can very quickly get an update on the menus on all of the restaurants nearby, get a sense of what, not only what their menus look like, but which of your friends have eaten there and how they rate them. >> okay. it's a brave new -- i don't know what we'll do with all this information, but good to see that. michael chasen from social radar. one thing that's stood the test of time is the video game console. how is xbox going to fair? we'll find out right after this. ya know, with new fedex one rate you can fill that box and pay one flat rate. i didn't know the coal thing was real. it's very real... david rivera. rivera, david. [ male announcer ] fedex one rate. simple, flat rate shipping with the reliability of fedex.
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this is "worldwide exchange." i'm ross westgate. the recap of the headlines. stocks around the world trying to rally after the dow hit another major milestone, closing above 16,000 for the first time ever. investors pay close attention to germany, who's had a much stronger than expected identifio survey, boosting the euro. and ecb president mario draghi is throwing his support behind forthcoming bank tests. >> one thing we have to remember, even though this effort might appear massive, and it is massive, it's not going to be a recurrent request by the ecb.
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>> the game is on. microsoft takes on sony, launching the xbox one in 13 countries today, and it hopes that the price tag, $100 more than the ps4, won't deter shoppers. plus, softbank feels the load. shares jump to a 13-year high after dan loeb's hedge fund reveals a billion dollar stake. just joining us stateside, very good morning to you, after the first close above 16,000 for the dow. u.s. futures right now are trying to suggest we might move a little higher again at the open, if we get there. there we go, the s&p not by much, only two points, 1 1/2 points above fair value. the nasdaq at the moment is 5, 6 points above fair value. the dow at the moment is around 16 points above fair value. ftse 100 has been fairly flat
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today. it's just up eight points. so, we flirted on either side of the flat line during the session. xetra dax didn't get a huge boost from the ifo number, flat. cac is down a thirup a third, d third for the ftse mib. now, the ten-day shares are sharply higher ahead of the super mario game today. the japanese tech firm will release a range of games, such as super mario 3d world for its wii console and a new mario party and legend of zelda for its 3d twice. according to reuters, shares are up on good reviews of games and a weaker yen. ninten nintendo's game coincides with a perhaps bigger gaming release. microsoft's xbox one is on sale around the world today. microsoft has been holding launch events in london, new york and los angeles to mark the arrival of the successor to the xbox 360.
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the launch comes a week as well after the u.s. launch of sony's playstation 4 and ahead of the critical holiday shopping season. the xbox one will cost around $500. that's $100 more than the ps4. microsoft shares so far this year are up 40% year to date. alex simmons is editor in chief at and joins us now. alex, good to see you. >> good morning. >> we sort of looked at this. for your extra hundred bucks for the xbox, what are you getting that you don't get from the playstation? >> so, the xbox one is being pitched as an entertainment hub rather than a traditional core gamer's machine. what it will do is connect to your cable box or skybox wr whatever you use to watch television, and basically, you can use the xbox one to control all of that. so, if you're watching a movie or playing a game and, you know, one of your friends skiypes you you say xbox pause, the game will pause and you can instantly chat with your friends before going straight back to the game. it also comes with the connect
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camera, the second iteration of the camera that came with xbox 360, which allows voice control, alwz you to play the games by moving around, rather than with a traditional controller. >> they've been trying for a while to make the xbox the hub, the home entertainment hub. is there any sense that actually that is going to work? >> it's very early to say. in fact, they haven't really sort of said how it's going to work in the uk. they've mentioned some partners that they're working with in the u.s., so you know, different tv channels in the u.s. that they're working with to heighten the entertainment experience, but they have yet to announce what's going to happen in the uk. if they're not going to partner with the likes of iplayer or sky, then i can't see it happening. but again, at the minute, we don't know. i think we'll find out in a couple years. >> now with the launch of internet tvs, right, i mean, that in itself -- i mean, it's great now with internet tv. it has all the channels on it and the youtubes and the i love films and iplayers. and that is actually the tv is,
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funny enough, the center of the home. and you can control it with your ipad, if you want. >> yeah, it's a very good point. a lot of the, i guess, apps that you're seeing, the xbox is going to offer you probably have got if you bought a tv in the last couple years, so, it's facing a lot of competition. the difference is, is the way it will interact. so, one of the things they showcased when it was announced back in may is sports games, for example. you could be watching sky sports, the latest premier league game and you'll have a panel down the right-hand side where you can do fantasy football live and stats will change dynamically as the action is happening on screen. obviously, you can't do that with any other system. >> sony has tried to say that its ps4 is for gamers, right? >> yes. >> pure gaming. if you're in gaming, you buy the sony. presumably, though, xbox, the quality of the graphics and everything is just as good, isn't it? >> very much. apart from a handful of exclusive games for both consoles, you're seeing very much the same kind of quality of gaming experience. i think even though the ps4 is
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being pitched as a gamer's machine right now, because obviously, it wants to get people on board, i have no doubt you'll see the same kind of entertainment apps coming out down the line. >> finally, how much are these guys all under threat from apps and games that, you know, you can just download and play on your tv or in your mobile devices? >> so, the next generation of consoles is offering a very different kind of gaming experience, what i would call a premium gaming experience, whereas mobile games are a lot more snackable and, you know, for 69 cents, that's what you expect, whereas if you're spending 40, 50 pounds on a game, you want a full blockbuster experience and that's what these games are delivering, and you can't get that anywhere else. >> yeah. i guess it's a question of where the marginal -- difference between where the marginal gamer is. they might lose it. >> or they might play both. >> okay, thanks very much indeed for that, alex. some of the other stories today. a u.s. jury awarded apple around $290 million in damages from samsung in the company's patent retrial. apple had asked for nearly $380
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million while samsung argued it should only pay $52.7 million. an apple spokesperson says the company's grateful to the jury for imposing costs on samsung, but it was more than just the money. oh, yeah. samsung says it's disappointed since one of the patents in question was deemed invalid by the u.s. patent office. spotify has reportedly raised $250 million in a new round of funding, valuing the streaming music company at more than $4 billion. the financing was led by silicon valley firm technology crossover ventures. spotify, which is based in sweden, is looking to expand its global growth. the service is well established in many western countries, including the u.s., but spotify aims to launch in parts of asia, including japan. daniel loeb is making another big bet on a japanese firm with u.s. ties. his hedge fund has revealed that it's now got a billion dollar stake in softbank. that sent the japanese telecom
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shares up to a 13-year high. loeb recently met with the softbank chief executive but says he didn't propose changes. and softbank recently took control of sprint as well in the u.s., remember, for $22 billion. loeb says it's the company's big stakes in ali baba and yahoo! japan that are most attractive. and heads up, michael jordan fans. here's a chance to get a very expensive piece of sports memorabilia. the star's chicago area mansion is up for auction today. it's a 56,000-square-foot house. it's on just under 7 1/2 acres of land. it's got jordan's, as we saw, signature number 23 on the front gate, and it comes with a regulation sized indoor basketball court, as you might expect. there it is. there is no minimum bid, but you've got to put down a $250,000 deposit just to take part. it is worth remembering, though, the property failed to sell when
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it listed last year for $29 million. so, we're asking today, what dream feature would your house have if money was no object? can you imagine personalizing your home? join the conversation, get in touch with us, e-mail, tweet me @rosswestgate. you may want some feature you've seen on a bond money or something. maybe a pool full of piranha. coming up, americans are just a few days away from sitting down to thanksgiving dinner with turkey and all the trimmings, but u.s. secretaries may have something to be thankful for, the holiday-related stock stats. we'll look at those right after this.
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next thursday, americans are sitting down with their friends and family for thanksgiving, and probably to watch a few hours of nfl football, but they're not the only ones who will be giving thanks for the holiday. seema joins us from cnbc hq with all the details. what's going on? >> hi, ross. u.s. investors may be looking forward to the week leading up to thanksgiving. historically, the major indices have performed fairly well, even with a short trading week. cnbc's market data team crunched some numbers. over the past 20 years, the dow is up pasting an average gain of
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a quarter percent. the biggest gain, 8.45% in 2008. the biggest loss, 4.6% in 2011. now, the s&p 500 has posted the largest average gain of 0.42%, but it's only been up 50% of the time. the biggest gain for the index, nearly 11% in 2008. the biggest loss, 4.4% in 2011. now, as for the nasdaq, it's been up 65% of the time over the past 20 years with an average gain of 0.23%. the composite has been up more than 1% 10 of the last 13 times it's been positive. the biggest gain in 2008. the biggest decline nearly 9% in 2000, after the dot-com bubble burst. the markets continue to do well after thanksgiving, on black friday, which is traditionally a half day of trade. the nasdaq has been the biggest winner over the past 20 years, up 70% of the time with an average gain of more than 0.5%. now, the holiday season overall is historically happy and
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bright, ross, between thanksgiving and christmas. all three indices have been up over the past four years. the s&p 500 leads the way in the past two decades. since 1993, it's been positive 75% of the time with an average gain of 1.5%. the dow and the nasdaq have had larger average gains in that time, up 1.6% and 1.7% respectively. so, if there's a bottom line here, ross, traditionally, or historically speaking, the markets do well during this thanksgiving week, the upcoming thanksgiving week. >> that's always good to know. big question, seema, is i don't know whether you are -- are you ready to step up to the plate and take responsibility for the turkey? >> oh, goodness. preparing the turkey is quite the task, ross. i don't know if i'm ready to take that on just yet, but i will definitely be contributing this year. i mean, i'm thinking maybe an apple pie, a pumpkin pie? i've got to find a way to participate, yeah, in my family's thanksgiving. >> not the pie of the pecan sort, then? >> maybe pecan.
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that's definitely a good choice, something you generally see during thanksgiving dinner. >> okay. i wish you all the best with that. >> come on over any time you want to experience thanksgiving. we've always got a seat for you. >> there is an issue, because obviously, it's a holiday next week on thursday, we have to do more programming. >> oh, to compensate for the lack of programming on this side? >> yeah, we'll see. keep something for me. >> well, thank you. appreciate it. >> thanks, seema. have a good day. walmart, meanwhile, is trying to keep up with the joneses, cutting its free shipping minimum at from $50 to 35 bucks for the holidays. that means if you buy 35 bucks worth of stuff, you get free shipping! that figures. that matches amazon's minimum. last month, amazon raised its free shipping threshold for the first time in a decade from 25 bucks to $35. those two stocks pretty flat right now in frankfurt. gap's third-quarter profits are up more than 9%, beating forecast. that was on higher same-store
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sales, particularly from overseas and online. sales are up nearly 7% in europe and 11% in asia. gap's posted higher same-store sales for seven straight quarters now by tapping hot fashion trends, including a line of colored jeans last year that went particularly well. the company's backing now its full-year forecast as well and launching a $1 billion stock buyback. gap stock, there we go, is just up, marginally up 0.25%. and gill group is reportedly eyeiey eyeing an ipo next year. the site is said not to have hired any banks yet to advise it, so the timing could slip into early 2015, but reports also suggest gilt has performed well under the new ceo who took over for the founder in february. revenue has grown 40% over the last four quarters versus the previous four quarters. and a recap of the headlines
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as well if you're just joining us this morning. european stocks trying to move higher after we got that record close on the dow and a stronger than expected german ifo survey. and a new level in the battle amongst video game makers. microsoft is launching the new xbox one to take on rival sony today. plus, hedge fund giant dan loeb has been delving into japan's softbank with a $1 billion stake. still to come, say good-bye to the world's longest flight. head to our website to find out why singapore airlines is taking its iconic nonstop flight to new york out of the skies. you can follow all the chat on twitter @cnbcworld. wall street experiencing many happy returns, the dow above 16,000 for the first time. how strong are the technicals and the trends? we'll get into that. [ male announcer ] this store knows how to handle a saturday crowd.
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all right, europe's growth engine might be running at full steam. germany's ifo business survey better than expected in november, climbing to 109.3. analysts thought it would come in at around 107.7. it helped push the euro to a session high and it's also up to a four-year high against the yen. and european equities in response as well haven't done an awful lot, pretty flat during the session. we tried to kick on first thing this morning after the dow closed, but it hasn't really happened, slightly evaporated. meanwhile, the ecb president, mario draghi, has backed signs of progress in the eurozone but insists there's still a lot of challenges. he's been speaking at the future of europe banking conference in frankfurt and stressed the importance of the forthcoming bank tests, saying bail-in talks should be implemented well before 2018.
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annetta is at the event and joins us for more. rather contentious, though, isn't it, how the wind-up mechanism has got a bit of a problem between germany and then france and italy. they can't agree. >> reporter: yeah, that's very much true, they can't agree, although draghi yesterday said there will be an agreement before christmas. so, watch out for that space. there is still a lot of disagreement, and most likely, we'll go down the path that we get national backstops, not a single european one, because the germans see legal reasons for that. but let me bring you back to what mario draghi said as well. he actually really very much depended the rate cut off the ecb, which was hugely criticized here in germany by economists to ruin german savers' pension years, and he was making his line pretty clear, that the rates are low because of the weak economy and that the german savers' problems is more or less linked to the sovereign debt, we can call it battle we are seeing
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in germany, because all the investors are shoveling in the cash into germany in order to have a safe investment. and he was saying that if we are seeing structural reforms progressing, then this imbalance between the different sovereign debt markets in the eurozone will essentially ease. so, in the long run, we'll see a more unified market. that is, of course, his hope, mario draghi's hope. and he was hitting out again against those critics that are saying that he's only delivering this policy to southern european, and he very well had a very good audience for that, because here, above all, german bankers and economists were attending, and it was quite interesting to see they had these electronic polls. and one question was, for example, if germany is responsible or is harming southern european states by its policy, by its surplus policy,
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and 60% said, no, no, no, that's not the case, ross. >> yes, which, 40% abstained and maybe disagreed, which would be the interesting point, i suppose. did draghi say anything more about deposit rates or monetary policy? >> reporter: no, he actually didn't comment on any potential move into negative territory when it comes to deposits, but i had a little bit of a background check with different people, and they seem to be very much -- of course, they have discussed it. mr. draghi said that already during last press conference, that they were discussing as well the possibility of lowering the deposit rate into negative territory, but there is no reason to do so now. so, it's still a minority view inside the ecb. it's by far not a majority view. and of course, the bundesbank, we all very much know they would be very much against this. and so, the likelihood of getting that very soon, i.e., during the next press conference or governing council meeting, is rather minimal, ross.
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with that, back to you. >> annette, thank you. that's the latest from frankfurt and mario draghi. california's health exchange has rejected extending canceled insurance plans past this year. last week, president obama proposed the change as an administrative fix to the troubled site but left it up to states to decide whether to go along. california also says 80,000 people have signed up for private insurance through its marketplace through november 19th. that's about 20,000 more than was previously reported. the obama administration plans to delay the start of the second year of obama care enrollment by a month. the move gives insurers more time to set rates after they assess their experience with the process during 2014. charter communications is reportedly near a deal with banks on financing for a bid for time warner cable. the "wall street journal" reports charter has talked with bank of america, barclays and deutsche bank about a multibillion dollar debt package. charter could also get cash from
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sovereign wealth funds and individual investors. reuters reported earlier this month that charter was weighing a bid for time warner cable by the end of the year after a previous approach was rejected. two stocks time warner cable up 1.7% in frankfurt. we don't appear to have a quote for charter communications. on the agenda in the united states today, we've got no economic data, but there are another pair of fed officials speaking. the kansas city fed president, esther george, this morning, and the fed governor, dan tarulo this afternoon. and foot locker, petsmart and ann, which is the parent of ann taylor, reporting earnings. u.s. futures right now suggesting a mild tick higher at the open. the dow is currently ten points above fair value, the nasdaq around two points above fair value and the s&p 500 is around about a point above fair value. the dow yesterday up 109 to a new record above 16,000.
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the s&p, of course, up 14 1/2 points. the nikkei, though, today was only up around about 0.1%. check in on the bond markets. the yield currently on the ten-year's been around 2.78%. that's where we are. slight tick lower yesterday. treasuries were sort of had a two-way swing, really. the philly fed offsetting decent weekly jobless claims. elsewhere, bund yields ticked higher post the ifo number, gilt yields around the same amount as u.s. money as well. that just about brings us to the conclusion of today's "worldwide exchange." coming up next, of course, we'll have the countdown to the opening markets stateside with "squawk box." i'm going to read up on how to prepare a turkey. maybe we'll get 23450 thinto th week on "worldwide exchange." otherwise, whenever it starts, we hope you have a good weekend. before that, have a comfortable day. from all of us here, good-bye
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for now.
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good morning. today's top stories? the dow 16,000, the blue chip index closes above that milestone for the first time, but we don't really have a party or any hats or anything for it, and that means something. the fed is still in focus. our newsmaker of the morning, atlanta fed president dennis lockhart. plus, a call on commodities. goldman sachs predicting steep losses for gold next year. andrew, what -- didn't goldman sachs have a buy on gold for a while? >> they did have a buy on gold, yes, sir. >> never mind. it's friday, november 22nd, 2013, and "squawk box" begins right now. ♪ higher and higher, straight up
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we'll climb ♪ ♪ getting higher and higher, leave it all behind ♪ >> good morning, everybody. happy friday and welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. and there is only one place to begin this morning's conversation. that is with the markets. the dow turning positive for the week yesterday, posting a triple-digit gain and closing above 16,000 for the first time. financials leading the way for the s&p as the index halted its longest running streak -- losing streak in two months. of course, this is three days that were down and i think gained back everything it had lost over the last three days just yesterday. as for that so-called fear gauge, the vix dropped below 13. with only a little more than a month left in 2013, why don't we look at this year's returns? the dow is up more than 22% at this point. the s&p is up nearly


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