tv Worldwide Exchange CNBC November 21, 2014 4:00am-6:01am EST
inflation expectations have fallen to levels which seem to be fashionably low. i guess the market is poking on the dovish side of that saying or reiterating that they have to be super careful that inflation expectations are not the ankle rate. inflation expectations would equal monetary tightening, i.e., would harm the fragile economic
recovery. also, that he was referring to the recent data from yesterday that the pmi levels are showing that a stronger recovery is rather unlikely in the coming months. it was probably back in the view of the doves in the markets. we are seeing that directly in the euro/dollar exchange rate. the euro is sharply lower versus the u.s. dollar. here there was a clear reaction also to the draghi equities are rallying on the back of those comments. but also, the hawks have some reason to see a backing from draghi, he is reiterating they are preparing for the unconventional measures in case the outcome of already taking measures is not decisions to raise inflation expect actions. with that, back to you.
>> annette, thank you very much. the stoxx 600 is up 0.9% off the back of this and the italian ten-year bond yield is at record lows. joining us now, gareth davis is from jpmorgan. there was a bit of someone from everyone, a bit from the bears, a bit from the bells. he was saying inflation expectations are far too low but in the longer term inflation expectations were on track. >> exactly. they just need time. he's almost saying steady the ship, hold on, and wait to see the plans are already announced which can be amended. see how they ban out into q1. >> mario draghi addressed the lack of growth. were there any game changing statements or take awayes from what margo draghi just told us? we've heard these reassuring
comments before. >> absolutely. this really is a holding pattern. if you think of where we've come from in individual steps, we've made a huge amount of distance from the original conservative central bank. so what we actually see, even throughout the course of the year he's saying, just let's wait and see. we've announced a lot of things. let's see how we work in abs. we won't see started covered bonds. i think really he's just saying let's wait. >> these reassuring comments are good for the economy, good for the market, but at some point we have to see the numbers improve. >> exactly. so buying time allows the macro figures become two. and i think the way we look at that as the backdrop into q1 is
that the numbers will become more positive as time goes on. >> gareth, abs purchase is yet to start today. we've had the aqr. that didn't have a huge effect on the market. is the abs purchase the start of something significant? >> i think really the covered bond program is the start of something significant. so the last four weeks of activity, they've been quite systematically quietly accumulating assets in the background. we're at the end of november already. it's a relatively short year. by the middle of december, we start to look elsewhere. his scope for doing abs in q4 is relatively limited. lots of things in terms of bonds that he already owns, abs already posted the repo window. but in terms of affecting climate activity, i don't think that's going to be possible at least in 2014, we have the 2015 plan. >> as we saw today, hit rhetoric
doesn't suggest he's about to start buying sovereign bonds, but perhaps he will start buying sovereign bonds. >> exactly. he's teeing up the potential of eligible at he ises. he mentioned corporate credit as a next step. then we have a little bit of a distance. >> gareth davis, thank you very much for joining us. and we'll get you some news on russia. the russian energy minister says the government is discussing possible oil production cut but there is no decision that has been made just yet. but on the back of that, we are seeing the markets move the dollar. russian rouble down about 0.9% or down about 2% over the past seven days. the next big catalyst for oil is opec's meeting next week. expectation has been for the
cartel to not cut production. so the russian government is discussing possible oil production cuts. wilfred, over to you. we bounced back straightaway at the start of today's play, up about 0.3%. as you can see, we have strengthened throughout the last hour off the back, really, of mario draghi's comments. we're now up 0.85% in the stoxx 600. let's look at the stoxx 50, which is up fractionally more. continental europe, up slightly 1% slightly better than pan europe. what was mr. draghi's saying? he was classic super mario. he was reassuring the market with just enough confidence that he is there ready to act if necessary, but probably didn't say enough to really anger the germans. but we do hear from yens
abideman at 10:15 cet. how has it broken down across individual markets? the ftse 100 up 0.55%. continental europe is taking comfort in the fact that mr. draghi will act if necessary. germany up 1.15%. france up 1.07% and italy up 1.3%. we saw a fraction of yield growth yesterday because of global growth stemming from those pmis. but it wasn't too significant a move. it's below 0.8% again today. that's stemming because of a risk off sentiment of some of the dovish lines of mr. draghi's
comments earlier. the uk is seeing yield compression there, as well. the 10-year in italy, 2.27%. let's move on. 1.2468 on the euro/dollar. the yen has come back below the 118 handle. 117.9. we know the bank of japan wants to weaken t japan and it has been successful in doing that. but mr. aso came out and said recent moves have been a little bit too sharp. the aussie/dollar has been flat today. it's been weak. 0.86 today. and cable is off a little bit today, 0.3%, a little bit of political uncertainty after the
parliamentary seat win. 1.56 on cable. now let's check in on markets in asia. good afternoon, sri. >> good morning to you, will. not doing too badly in the asian markets as we round off the week. after the wobbles from the pmi and after the shaky start midweek i would say to the shanghai hong kong trading leaks. so the brokages and the financial stack in favor on the mainland. i want to talk about the currencies you were alluding to. the finance minister, in my opinion, verbal intervention from him. he's worried about the depreciation that we've seen in the japanese currencies, that it moved too fast too quickly and
too hard to the downside. and it did give the yen something of a short in the arm. so the stronger yen caused a bit of a wonl and it did regain composure in trade. incidentally, the politics, a lot of political noise, a lot of policy noise coming out of japan as we head closer to that mid-december election. abe did dissolve the lower house of parliament today at around 1:00 p.m. japan standard time. so that paves the away for the election nearing the start and the campaign to get into full gear. elsewhere in the market, as i said, we're not doing too badly. yes, some of the banks and some of the commodity plays are under pressure and that brought down the afx 1200. >> skree, thanks very much. let's dive into some top stocks in europe today. shares in buig are rallying after its rival said it may be interesting in buying the
condmrom rat unit. bouygues is up 4% on that story. let's join stephane in paris. >> good morning. this has been on and off the for the last 12 months in the tilly come market. but recently, altyse said it would also be interesting in merging the french operation. the main shareholder made an approach. he also contacted free mobile to consider a potential merger. it's revising this morning on the speculation of the future of the french telecom sector which basically would reduce the number of players from four to three. the merger between two french telecom operators would create a
lot of synergy, but it would probably stop the price war between telecom operators. that is good for consumers, because in perhaps, the telecommunication is one of the lowest in europe. it was good for the consumer. it's not necessarily the best scenario for telecom companies with margins. the launch of the operator almost three years ago. the french telecom operator could be working on the scenario this morning. it's another part of this ongoing story. but the market believes it could happen. bouyges is up 4%. slumping to the bottom of the stoxx 600 offer the buy rival salamander energy, in an all-stock deal, the british oil
and gas explorer hopes the move will allow it to expand. and coming up on the show, shares pop after hours after southby's ceo stepped down. find out why some thought the auction house was in need of restoration. have you ever gotten in trouble at work for using twitter? we discover how this picture cost one uk politician her job. we gear up with the founder of throttle, an online community attracting the next generation of car fans.
key talks of iran's nuclear program enter a key phase this weekend. joining us on set now is hadley gamble. hadley, if they fail to reach an agreement, will that just push iran and russia closer together? >> it's highly possible. i think that they've had a strategic relationship for years, as we happen. they certainly are in agreement on what's happening in syria, for example. at the same point, you have to understand, all eyes are on secretary kerry right now and he's pushing to keep this deadline to keep them on track
for this deadline of monday. we've seep a lot of doubt with the iranians. and the reason for that is if they fail to mead this deadline, president bush could be in trouble in congress. >> republicans have been very vocal on how they want to impose further sanctions on iran. how does that complicate the situation? >> they don't like the steel. they haven't liked the steel for a long time. it's coming in in january and are basically saying if we don't get exactly what we want, we are going to have to be tougher on tehran. the president can work out a deal, but inevitably, congress is going to have to list them permanently. >> does that make president obama look weaker to citizens would, of course, he's been putting together a deal with iran for a while now.
>> and even the iranians have commented on this in the past. the president, because he has to talk to congress, is in a tougher spot, is in a weaker spot than they are themselves. on the flip side, mr. rouhani, part of his the success of his program is suggestive of success, as well. >> the iranians also debt practice for a deal here, but they don't want to give up too much in this deal. and the iranians have made a lot of grand here. just the fact that they've been talking to the united states directly is a first. they haven't done this in 35 years. but the rouhani government realizes two very important things are at stake here.
one is an economic revival of the country which won't happen without sanctions being lifted. iran is being frozen out of international banking community which makes it very hard to save with the world. foreign companies desperate to have foreign investment back in bstkountry as are foreign here. so they need these sanction soes be lifted. is the second process they're having is idealogical. if the situation in iran was to deteriorate further sanctions were going to be imposed even if we went down towards the root of a conflict, they might miss all that ground they've made in the idealogical strong holds they've made. they would rather not give that up than have sanctions. there are two very important points iran has to look at to get this deal through.
investors are also looking for direction on what opec will do next week when it comes to the oil market. crude prices popped yesterday amid expectations the cartel could decide to cut production when it means in vienna on thursday. bank of america merrill lynch is forecasts a 500,000 barrel a day reduction. seema, i was chatting with an oil expert yesterday and he said this opec meeting is the biggest in the world in over a decade. all of opec wants to see a cut from the group with, but none of them themselves wants to be responsible for that cut. >> and this is coming at a time when oil prices are down about 40% since june 20th of this year. we've seen a massive drop and that has brought more of a focus on what analysts will do. expectations had been for the cartel to not cut production and add to that if the talks in iran do not go well.
that brings even more pressure for opec to find some type of solution here. >> i think over the last month we've been saying whatever your view is on the long-term oil price, the short-term oil price has very little flaw until we get to this meeting. so this meeting next week is crucial. we'll get an indication either way of whether opec is willing to respond. that can give us an indication of where the short-term price can go. there would be a 500,000 barrel a day cut, and they're saying members including saudi arabia have budget near the price. but, of course, so much rest on the saudi arabia decision within opec. >> and energy has been an underperformer this year, it's the worst performing s&p sector so far. given the move that we saw yesterday or the talk around what opec will do, we did see energy outperform. was the best performing sector in yesterday's trade. another thing that could impact energy prices is weather. more severe weather is being
forecasted for the northeast today. ten people have died when snowstorms hit the area of western new york with more than a meter and a half of snowfall. lester holt filed this report. >> day three. >> this is absolutely crazy. >> and the snow keeps falling. and it weight of it all, over five feet of snow and counting, is beginning to cause roof collapses. more than a hundred patient ves to be evacuated from this nursing home when the roof began to show signs of weakening. >> the roof is compromised. it obviously has not collapsed yet, but there is potential for it. >> in hamburg, more than two po dozen people driven from the roads, near white yous conditions and deep snow have been holed up in this walmart store since tuesday. >> couldn't ask for a better place to be stranded. >> rooftops look at if they've
been slathered in whip cream. >> we can count dozens of cars that were stopped in their tracks, buried in snow, barely the roof is visible. it's like the day the -- stood still. >> even as crews maybe progress, there are neighborhoods surrounded by chest deep snow. we ventured down one cul-de-sac where we could only shout a conversation. >> have you ever seen anything like this? >> no. i've lived here my whole life. >> officials are doing their best to reach those facing emergencies and are asking home bound residents to take precautions. we met the shram family last night. they're still snow bound. but today, her husband, david, finally got out, walking four miles to get food for their baby, evan. >> the first challenge i had to come was the eight-foot high wall of snow. i did get out returning to find
out that the subboards were bare, in a manner of speaking, but at least i was able to find two quartz of milk. i was able to get baby food, which was a big plus. >> look at the feet shoveling snow off of their roof, obviously concerned about a collapse of some kind. they can't dig their way out of this neighborhood. >> crews are clearing the new york thruway, but it is still closed tonight and hundreds of vehicles remain. >> you can see the wall of snow there along the edge of the lake. it's a big, gray wall. >> buffalo's robert wilson stadium, where tonight the bills have declared a snow day, calling off sunday's scheduled game against the jets. more on our top business stories coming up after this short break. stay with us.
>> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. >> ready to step up the pressure, the euro hits a session low after ecb president mario draghi vows to expand the central bank's asset program if inflation stays too low. president obama goes it alone, taking action on sweeping u.s. immigration reform without
getting approval for congress, setting up for a clash of republicans. >> americans are tired of gridlock. what our country needs from us right now is a common purpose. a higher purpose. >> western leaders hold frantic talks with iran on its nuclear program, but a deal on easing sanctions seems unlikely. another record for alibaba just months after its blockbuster ipo in september. the internet giant sells the largest corporate bond ever by an asian company. >> and we've just had the uk public sector borrowing numbers, it came in at plus 7.7 billion pounds against an expectation of 7.8. so the net borrowing fractionally lower than expected in october. and it is worth noting the previous month was a lot higher,
11.8. nonetheless, expectations were below expectations. sterling has weakened significantly in the last half an hour. and the news wires just mentioning this gives manager george osborne hope that the budget might recover at a faster pace ahead of next year's general election which, of course, still a lot of debate on who is going to win that. and to recap our story of the day, margo draghi says the ecb will use all means within its mandate, the move sending the euro below 1.25. the underlying growth in new york is weak and says the bank was ready to intervene more if necessary. >> the ecb has acted and is continuing to act, to bring
inflation back towards the 2% and assure the inflation expectations. >> we should mention the euro has been gaining the u.s. dollar over the last couple of weeks. >> european markets green across the screen. markets like what mario draghi has to say. but some analysts that we have been speaking to this morning saying we need to see actual resolution and an impact on the economy, not just comments. looking at the xetra dax, the outperformer up about 1 is. 2%. the euro stoxx 50, higher. we are looking at the index up about 1%. session highs up as you were pointing out 4% over the past one month. >> so, seema, so far we have
seen equities go up. what has happened to bonds? there's been a bit of yield compression. the ten-year in germany has fallen below 8% again. 0.78%. interestingly, in italy, the ten-year italian bond, 2.27% is at record lows. so we have, despite the fact that equities have gone up, had a bit of a risk up trade within the bond market because, of course, mr. draghi was saying underlying growth momentum remains weak. he was saying short-term inflation expectations are acceptably lower. expect azs might allow equities to go up, but rick off in the bond markets. >> that's right. now, some tech news. alibaba has prized its $8 billion u.s. bond offerings from 1.6% to 1.5%. there was extraordinary demand for the company's made in debt sale. it was six times oversubscribed,
with totally orders allowing alibaba to tighten the pricing on the sale closer to its u.s. tech peers such as amazon or oracle. it is the largest corporate debut ever. two interest points there, wilfred, first, we've been seeing more companies tap the bond market. one of the reasons is because of taking advantage of low interest rates. but a lot of these companies don't want to reoperate the money they're seeing overseas. apple is a good example of that. so it's interesting to see that there's this real interest in tapping the bond market. >> absolutely, i agree. there's lots of interesting things to point out here. also the fact that alibaba doesn't do things in half. always bigger is better.
but worth noting, lots of corporate in the u.s. tapping the bond market because the corporate bond market in the u.s. is so well developed. this is one of the key problems europe has. but that is not feeding through to easy lending to the corporates because the bond market isn't as developed. it relies much more on bank lending. >> and it's interesting to note it's not just tech companies in the bond market. chinese companies in general have sold $28 billion in u.s. bonds so far this year, the highest on record by a long way. we'll have to see if that continues into 2015. now, sticking with tech, intel says it expects solid revenues next year forecasting this single digit growth. the company kicked off its investor day by announcing a 6% dividend hike and said growth margins would reach 6% in 2014. again, all cap tech has been in favor this year. it's been doing much better. these old cap names that have
slow but consistent growth and have that attractive dividend yield, that's been, wog well for investors. now news about two ledge endary investors and i'm not you can talking about steve sedgwick and geoff cutmore. i'm talking about mr. soros, a sample of approval from the depar temperature from pimco. the amount double tess money he was managing in his fund. bill gross saying on his twitter account it was, quote, an honor to be chosen. for more on this story, check out our website, cnbc.com. japan's lower house of parliament was dissolved and a general election has been scheduled for december 15th. cnbc has the story live from tokyo. >> the election will gauge voters in confidence in abe's
economic policy and shed light on whether the public supports his decision to postpone the tax hike by 18 months. abe's priority is to shake off the mind-set. this will lover the tax rate in tokyo. our problems call for reducing regulations. meanwhile, koroda has said four times this week that he expects the government to establish a sustainable fiscal structure. the ruling liberal democratic party has pledged to implement the second tax increase by april 2017. the upcoming debate will be meaningful.
back to you, wilfred. >> thank you very much. russia has been a top story this week. despite the impact of sluggish growth, the micex is now trading in the green for the year. it is outperforming the ftse 100. what is the underlying cause of all this? miguel, what do you think is the main catalyst driving this market higher? >> investor sentiment, if you look at the micex, illustrate did well. especially afterthe ruble collapsed in july. >> let's focus on the ruble which obviously has been very
weak recently. mr. putin is adamant that it's only speculation moving the currency. from the outside, it doesn't look like that's the case. is he going to have to give up on that rhetoric and start to protect the kurnltsy? >> i think there are three reasons. >> you have actionses in place. the companies have to replace debt out of their profit and their revenues. it also puts pressure on. i do agree with the president, at least some regulated demand and the central bank needs to take the monetary hike further kind of eliminating the liquidity with bank. >> let's talk about president
putin's opinion polls at home, his nationalistic viewpoint seeming positive but not -- is president putin in a stronger position than he was six or seven months ago? >> definitely in a good position at home because of the nationalistic movement and people really approve his actions in ukraine. this is lookly to continue. >> what do you expect unemployment to hit next year? >> probably around 5.6% on average in 2015. >> okay. we'll see if you're right. thank you. now, still to come on the show, we take a look at the uk election results last night and discuss how this tweet ended a
political career. stay tuned on "worldwide exchange" for that. and the spotlight is shining on the french economy, but paris is now illuminated for a very different rope. not because i am headed there tonight. a number of celebrities gathered in the french capital to turn on the christmas lights. we'll leave you with pictures from paris.
brb outlined plans for u.s. immigration reform in a prime time speech on friday night. more than 4 million people will have the chance to apply for work benefits. tracie potts has more live from washington. >> good morning. what the president said is that people who have been brought in this country for five years who were brought here as children even though they're older now or who have children who are legal residents will be given an opportunity to stay legally, temporary relief from deportation and a three-year work permit. but they'll have to pass a
background check and they will have to pay taxes. there's been strong reaction actually before the president announced this and after hear on capitol hill from republicans who say it is essentially giving 5 million people a free pass and putting them before those who have been legally trying to get status here in the united states. the president says he wants to focus deportation efforts on criminals who come into this cup. >> thank you very much for that. now, uk has its second elected winchester mp by nearly ,000 votes, a majority of 7%. the margin of victory was less than some had been predicted. it is a major headache for uk prime minister david cameron who visited the constituency five times. labor was pushed into third place. losing their deposit. ukip could win more mps across
the country. this. >> think of what it would mean to have a block of ukip across the parliament. if you believe in freedom, if you believe in localism, if you believe in people power, if you believe that the world is bigger than europe, if you believe in an empty britain, then come with us and we will give you back your country. >> a good night for some was not so good for others. wheel on the campaign stral, one labor mp was forced to resign under this sweet. she was accused of snobbery and being out of touch after tweeting this picture. she announced her resignation from the party. joining us now to discuss that, but first, the result of the elections yesterday is andrew this is ukip's second
week in parliament. my first question is, is the still partly at least a protest vote? >> well, it's very difficult to say. i think the reality is ukip have had a couple of chances here and people have voted for them and, of course, at the same time, they had an extremely strong result in the labor seat where they came in second now. and if you go back to the east election, they came in narrowly acceptable to the democrats, as well. one of the problems they face is their support is broad. the question will be whether they can concentrate to make a real break through. they're likely to get 6 to 10 seats in the general election. can they do further? >> and europe is divided across the general spectrum.
as has been shown so far, would it just cause labor to lose votes or the conserb ifrs to lose seats? >> i think the reality is while the first tranche continues to come maply from the conservative is, more recent rises have come tt expense of the labor party. even last night, you saw the vote is now down to one-sixth of the total vote. so this is very bad news for them. particularly across the north of england, we have a lot of safety tonightsies in which the turnout is very low. it's a concern that the labor party has. >> the toris seem to be one step away from all out crisis mode. how worried should david cameron
be? >> they haven't really moved from about 30% in the opinion polls. they're not likely to go much further down than that. their general opinion is that at the end of the day, if your economy is growing around 3% when other economies around the world is doing much worse, that has to be rewarded by the electorate. >> european immigration will be a much bigger issue next year. >> could that galvanize particularly the right and see a lot of voters comes back to the conservatives as we turn? i think there is quite a bit of surprise that the conservatives haven't made more of this.
the conservatives didn't take it knit further. it was like some idea that they played with a little and then they forgot. cameron has a big habit of doing that, making one big speech and leave things for a while. >> perhaps that is the case for all the issues. they've been somewhat doing that to the conservatives already. are the conservatives not even in election mode yet? >> i think there is an aspect of that. i think they're hoping to get a very late swing from the labor party here. they didn't want that to turn into an issue being against the government. but the conservatives had a period from about 1992 through
2006 in which they didn't move from 30% in the opinion polls. they had a brief few years in which they did better. but now they're back at 32%. their opinion roll rating has not moved very much for nearly 20 years. one of the interesting things is, with the rise, takes votes from labor, it looks at the end of the day like labor's ability to hold on to its core vote may be less than that of the conservative. >> we also want to get your thoughts on this sweet which has gone viral. thorpeberry announced her resignation from the party's fund. do you think this is too extreme of a response? >> what she did, she tweeted various pictures from around the
constituency. she doesn't have any commentary. >> i think the last thing the labor party wants to think is this is against football fans. this person is someone who put out the flags at the time of the world cup. you have a west ham flag there, so they're west ham fans. the labor party didn't want to go anywhere near the idea that it was extraordinary to show an england flag and extraordinary to be a football supporter. that was catastrophic. i suppose then they felt they had to get rid of her to kill the story. but it's almost like that killed the story, but in a way you'll have the sneer, headlines and the sun. when the labor party prefer to talk about people, instead,
they're talking about the labor party again. >> so harsh, losing your job after one tweet. >> before we receipt you go, who will be prime minister next year? >> david cameron. >> thank you so much the. and let's take a look at today's other top stories. months after dan loeb joined the auction of the board, the ceo of sotheby's is stepping down. take a look, shares are up 7.4% in frapg further. investors team to like this move. moving on, rare blue diamond went up for auction at southby's on thursday night. the pear shaped gem went for
more than twice what was expected. >> you did you buy it? >> i did, but luckily i sold it back. the diamond was from the estate of a widely regarded u.s. philanthropist, art collector and gardner. the jewel has been described as potentially flawless. it's very nice. >> it is stunning. i wouldn't mind one. >> $32 million is quite a lot. >> too much, actually. >> too much. moving on -- the retail earnings bandwagon continues. gap is cutting its full year outlook of sales at its main brand continues to fall. demand for cheaper clothes at old navy is slowing. the retailer is shaking up management at the gap and banana
republic chains. gap is down about 3.5% in frankfurt. moving on, game stop's third quarter results fell well below analyst forecasts. the retailer blames the release of assassin's creed. gamestop is trimming the upper shares of its full year estimates. and let's look at pharma news. valiant pharmaceuticals has slashed its stake in allergan from underunder 10% to 1.0%. the move comes just days after the botoxmaker. so the story continues to get even more interesting. valeant pharmacy up 3%.
it's up about 21% over the past six months. let's have a look in on european markets. yesterday we had about 0.75% declines. at the open of today, we are in the gaining 0.75%. we have strengthened throughout the day. mr. draghi's comments from the economy were relatively bearish. once again, he reassured the markets that he stands ready to act if necessary. the ftse 100 up 0.56%. most of the continental european markets are up more than the uk, of course. germany up 1.26%. italy just over 1%. talking to one strategist about this, i'm surprised ta these reassuring comments draghi continues to deliver. the market responds positively despite the improve in economic
data. >> absolutely. and i think that is what he's the master of, isn't it? giving reassurance without having to act so far that it would anger the germans or those in the european commission. >> i would say it's overproming and underdelivering on his behalf. the markets seem to like it. u.s. futures are sharply in the green after the s&p 500 did hit another record high yesterday on the back of some better than expected domestic data out of the u.s. right now, dow jones indicating a higher open by around 40 points and retail earnings will continue on friday. still to come on the show, alibaba bonds are in high demands. we'll bring you more on the tech high inflated super sooiz after this break.
z. thanks for joining us on this friday morning. welcome to "worldwide exchange." i'm seema mody. >> and i'm wilfred frost. these are your headlines from around the world. >> ready to step up the pressure. the euro hits a session low as mario draghi vows to hit the central bank's asset program if inflation stays too low. president obama goes it alone, taking action on sweeping immigration reform without getting approval from congress, setting up a clash with republicans. >> americans are tired of gridlock. what our country needs from us
right now is a common purpose, a higher purpose. western leaders hold frantic talks with iran and its nuclear program. but a deal on easing sanctions seems unlikely as tehran is accused of secrecy. >> and another record for alibaba just months after its blockbuster ipo. the internet giant fell to its largest bond ever by an asian company. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. >> interesting day of trade in the u.s. that eurozone pmi data did come out weaker than expected. but then domestic data out of the u.s. came in better than expected. and you saw u.s. markets lift off and, once again, the s&p 500 closing at a record high for its 44th time this year. >> absolutely. you're exactly right with that.
and the u.s. has got at least an offsetting set of factors to work with. yes, it faces weaker growth particularly out of china, japan and the eurozone. but it has that domestic fundamental strength allowing the u.s. markets to continue to hit all-time highs, all bet i on small, absolute moves. as you're saying, weaker pmi data yesterday. it's very little fundamental strength to point to in the eurozone. although today, we're ticking up because of support in the market. >> and the u.s. continues to be seen as the best house in a bad neighborhood. take a look at futures right now, sharply higher on the back of those comments from mario draghi. the dow jones industrial, the nasdaq once again at a 14-year high. the s&p 500 is on pace for its fifth consecutive weekly gains. so it is moving towards an 8.4% move to the upside over this past week. diving into the cnbc global 300 index with gauging stocks around the world. we did get into that
discouraging pmi data yesterday out of the eurozone. but even out of china, that has weighed on investor sentiment. the index right now, up about 0.05% on the day. diving into the european markets which did end in negative territory yesterday, we did bounce off the lows of the day thanks to that strong philly fed index that came out of the u.s. right now, we're looking at the ftse 100 up about 32 points on the day. the xetra dax had a great week. it ended in positive territory yesterday. france and italy also seeing green. again, it's those comments coming from mario draghi. whether we've heard it or not before, the markets seem to like it and that's why we're in positive territory. >> absolutely, seema. and if we wanted confirmation of the potential central bank action that is pushing equities up, it's a look at the bond market. we are seeing bond buying, a bit of yield compression on european bonds. i.e., a bit of risk off in the bond market, a bit of risk on in the equity market suggesting
that we have got weak fundamental sentiment on the economy, but a little bit of positivity for risk assets like equities because we might get some central bank action. we're going to come back to bond yields later and look at forex. the euro has weakened off this thought of mario draghi that he stands by ready to weaken the sheet if necessary. now, the yen has rebounded 0.35% today. of course, the central bank in japan is after a weak yen, which it has achieved over recent weeks. 117.78 because the finance minister mr. aso came out to say the recent moves in the last week or so has been too sharp in the yen. the aussie/dollar has declined after the last three trading sessions after iron ore hit a five-week low. what implications does that have
for the general election next year? well, a little bit of uncertainty is what investors are saying because the pound is off 0.4%. seema, back to you. mario draghi says the ecb will use all means within its mandate too boost inflation and the central bank's president acknowledged that underlying growth in europe weak and said the bank was ready to intervene more if necessary. draghi specifically hinted the bank is ready to adjust the size and the composition of its balance sheet to make sure the low price growth does not become embedded. >> the ecb has acted and is continuing to act to bring inflation back towards 2%. and assure the penance of inflation expectation. >> joining us now to discuss is john cray, international investment analyst at s&p capital iq. john, appreciate you getting up early with us this morning. >> pleasure to be here. >> so mario draghi says it is
essential to bring inflation back to target. can you trust that mario draghi will implement measures to help inflation? right now we're looking at five country necessary deflation which is described as 12 months of a drop in consumer prices. >> right. he needs to step up and expand the as etd purchasing program beyond the current goals and move more towards the government side and purchase assets in terms of sovereign debt. he's fought going to get -- he's not going to achieve his goals by using the first stage of asset purchases. >> but, john, what's the point of buying sovereign debt? the ten-year yield on german bonds is 0.78% already. the italian ten-year bond hit a record all-sometime low today. the bond market isn't developed for sovereign yields to feed through the markets. surely if more action is needed, it should be buying corporate
bonds, not sovereign bonds. >> it is. and it's within its mandate to do so. i'm not too sure he has the support of the bundes bank on that. for the next set of more advanced liquidity, which would be on the sovereign side. he would really have to push with the bundes bank to support him on the issue of buying corporate debt back. >> john, we got disappointing eurozone pmi data yesterday. that resulted in european stocks more or less trading down. but in some ways, similar to what we saw in the u.s., is bad news actually good news for the market? because it tells us now the ecb, mario draghi has no choice but to unveil quantitative easing. >> that's absolutely right. the news, as has been stated over and over again since yesterday, is that the economy there continues to remain weak and it could slip into recession. we're not calling for that immediately in our office, but it's clear that the economy is
not getting better and thats asset purchases will have to continue. the expansion of liquidity, lower interest rates, that will be good for the eurozone n months ahead. japan's prime minister has dissolved the country's lower house and called a snap election. speaking of the first mandate for his embattled economic strategy. on that note, i realize you say equities deserve nothing more than a solid underweight. what if you hedge the yen and expose yourself only to ek porters? surely that will away decent strategy. >> absolutely. and that is something we recommend to our clients. if you have an exposure, a stock market exposure to that, just be underweighted. if you're not going to hedge. but at the same time, be mindful of the fact that abe-nomics hasn't worked. he's now -- it's now been revealed that he's been having
conversations with bill krugman who would advance the cause of expanding the debt to gdp ratio. i don't think that ix ma any sense, but clearly quantitative easing hasn't worked. structural reform that he needs to put in place, they have to putd in place and it's going to take time to work. >> and who in asia suffers most from this weakening yen? >> clearly it's not the japanese. their export side should improve. however, as many analysts in the field has mentioned, the japanese have exported many of their factories abroad, which means the export revenues wouldn't be as large as you would expect with a steep decline in the yen. who would be the beneficiaries in this case? you know, the import -- the exporters of commodities if global growth can get back on
track. the malaysians, the indonesians, the indians. these places where commodity producers would provide the bulk -- would get the bulk of the benefit from a fast growth in japan and fast exports. >> john, thank you so much and we'll, of course, stick with you and gets your thoughts on iran coming up in the next segment. before we get there, let's talk about other headlines at this hour. alibaba is looking at yields ranging from 1.625% to 2.4%. there was extraordinary demand for the company's rate and debt sales. reports say it was six times oversubscribed with total orders settling close to $55 billion. that loud alibaba to tighten the pricing and sales. if the largest dollar denominated company. it says the largest debut of
corporate bond issues ever topping corporate sales in 2011. so we had a record ipo in september. >> a record singles day. alibaba does not do things by heart, does it? >> no, it really doesn't. >> in a prime time speech on thursday night, deportations will be focused on undocumented immigrants. more than 4 million people will have the chance to apply for work permits. and more will benefit from the expanded program. >> we need more than -- we need reasonable, come palgzat debate that focuses on our hopes, not our fear he. president obama's plan has prompted a furious response from
republicans. now, coming up, as thoughts get under way in vienna, we look at why next week could be a volatile week for the markets. stay tuned on "worldwide exchange." opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets
let's get you some headlines. ecb president mario draghi vows to falter the asset buying program if inflation remains weak. obama risks his relationship with republicans by pushing ahead with immigration reform alone. and kerry talks over iran's nuclear program enter their final phase this weekend. but officials have warned there could be a delay until march. hadley gamble, the dooem deal here is limiting iran's nuclear activities in exchange for sanctions released, but it's just not that simple. >> and politics always being a major part of anything that happens with the middle east. you've got to secure a breakout time. he wants a breakout time of at least a year.
he also wants to make sure this works with improvisation. they can't look weak or this deal will fall through in tehran. so it's very important for them. >> and it comes at such a tough time with many foreign nations. if this fails to get through, does it worsen the anti-american feeling across the world? >> it certainly doesn't help. i think if you look at what's happening in the gulf countries specifically, they're very curious about how this deal is going to really work out. we know the congressional americans are cautious, pretty cautious about the deal in general. but certainly in terms of their relationship with russia, the relationship with tehran. and then on the flip side of that, the relationship with the saudis. >> john, i want to get your
thoughts on this potential nuclear agreement, if you will. iran is suffering from the drop in the oil price. do you think that will engage in these discussions after the next few weeks? i think tehran has its set of interests at hand. they obviously would need sanctions listed. how far they can woman without looking as if they're -- into the u.s. is a key issue. a and, you know, the price of oil going down is a sign of their already weakening economy. at the same time, they can't look weak. >> john, thank you very much for joining us today. now, aside from keeping a close eye on iran, investors are waiting to see what is going to
do next week. the cartel could decide to cut production when it means in vienna on thursday. bank of america merrill lynch is forecasting a 5,000 barrel a day reduction. talking to oil analysts yesterday, this is potentially the biggest opec meeting in over a decade. but none of the individual members wants to be the one to do that. >> everyone is trying to hold out. that would be the question when opec meets next week. because of that, you typically see a lighter volume in equity markets. but given that there's so much happening before that, we could potentially see a lot of volatility in the price of oil which, by the way, is down about 25%, 26% over the past six months. a big drop and, of course, that's the reason we're really expecting opec to bring some type of solution to this.
>> i think the oil price will be higher than where it is in the 12 months. but in the short-term, there has been no flaw and all eyes will be on that. we gear up to talk to the founder and ceo of car throttle, an online community attracting the next generation of car fans. ♪ health can change in a minute. so cvs health is changing healthcare. making it more accessible and affordable, with over 900 locations for walk-in medical care. and more on the way. minuteclinic. another innovation from cvs health. because health is everything. what are you guys doing? yoga, it's supposed to make us more productive.
better mind and body keeps us efficient. you guys have misread the memo. this is the new lenovo yoga with the intel core i5 vpro processor. it combines the productivity of an ultra book with the touch benefits of a tablet. and it's custom configured by cdw. so we can stop doing this? my head hurts. [painful grunts]
car throttle is one of the fastest growing channels for young car fans. the buzz feed for cars be tech crunch earlier this year, we're now going to bring in the founder and ceo of car throttle. you've seen so much interest from your site, car throttle. why cars? why do you think that's been able to be such a hot topic for investors and consumers out there? >> well, we recognize that there's a large space within automated media. we basically preferred to target the next generation of big car fans, the 18 to 25-year-old petrol heads.
>> are those individuals buying cars? do they have the means and the money to afford a car right now? >> this generation, 18 to 25-year-olds, there are two reasons why we target them. first, they're super sharing so they share lots and lots of information on facebook with their friends. they're going to be the next generation of fans that purchase cars. >> seema is definite lay super sharer. anyway, coming back to the.topic at hand, you're creating new content, fresh content for people to consume by video, but skipping any form of broadcasters going straight to online. how big is that trend at the moment? >> it's huge. we're seeing huge growth right now. we put out two videos a week and we have 240,000 subscribers. we've seen 247 million alone. going forward, i think the trend is going to become more direct and our video content for those users directly, possibly
skipping out. >> obviously, europe is dealing with its own economic challenges. how is that affecting your ability to raise money from investors? >> i think ultimately we're backed by some of the investors right now. >> investors in facebook? >> i think the plan has always been how can we build a big hundred million company within the uk. we had investors backing that vision and we were great to get some investors early on. for us, there is a huge marketing capability. we're seeing other nut works start to develop and that's one of the biggest selling factors. and what is the biggest driver of your revenues? is it clicking through people that want to buy cars or is it the traffic you're getting because the content, whether it's original or not, makes
people simply want to watch it? >> advertisers want to get behind that and alongside our brand. some advertisers that are looking to target that audience and potentially serve them up for the great contend or a landing page. >> and you're one of the fastest growing youtube channels out there. how are you making sales? how are you monetizing this content and are you profitable? >> we are a -- so it is a 30-second advert which is proving to be a fantastic revenue source at the moment. >> at that moment, you're lieuing google to take a slice of the pie? >> not necessarily. we don't see that much traffic or resolve from google. in fact, it's become one of our biggest re-ferrers.
we're lucky to have one of the investors from facebook itself. people are getting more behind us and other networks. >> and before you go, what car do you drive? >> i drive at the moment a perjerati, a 270 basis -- >> wow, that sounds like fun. thank you so much for joining us today. let's bring you some earnings. gap is cutting its full year outlook at sales at its mainstay brand continue to fall and demand for cheaper flows at old navy is falling. same-store sales fell 3% in the third quarter and the retail is shaping up management at the gap and banana republic chains. trading down 3.5% in frankfurt.
wilfred, i have to ask you, is gap popular here in london or in england? >> it's quite popular, but it's not a high end trendiness. but you're not really asking the right person. >> oh, come would be you have fashion skill. gamestop's third quarter results fell. it delays a release in video game software. gamestop is trimming the upper end of its full year estimates. shares fell 11%. >> after hours, but they're up 16% over the last three months. and giving you a look at how futures are trading at this moment. the s&p 500 did trade at a record closing high. right now, arrows pointing to a positive open. dow jones up 44 points reassuring comments from mario draghi adding fuel to this market.
half an hour to go until we reach 6:00 a.m. eastern. there is "worldwide exchange." i'm seem where a mody. >> and i'm wilfred frost. >> uran pressures are falling after mario draghi vows to expand the central bank's asset program if inflation stays too low. president obama goes it alone taking action on zeeping immigration reform setting up for a clash with republicans. >> americans are tired of
gridlock. what our country needs from us right now is a common purpose. a higher purpose. >> western leaders hold frantic talks with iran in its nuclear program, but a deal on easing sanctions seems unlikely as tehran is accused of secrecy. another record for alibaba months arch its internet ipo. the largest corporate bond ever by an asian company. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. if you're just tuning in, thanks for joining us here on "worldwide exchange." here is a look at how markets are faring ahead of the wall street open. the s&p 500 did close at a record high yesterday for the 44th time this year. the dow settling at a record for the 27th time this year. keep in mind the s&p is on pace for its fifth consecutive weekly
gain, up just about 9% in that period. so definitely an outperformance in the u.s. markets. a lot of that being driven by u.s. domestic data showing an improvement. the s&p 500 indicating a higher open. the dough dow industrial up about 40 points in premarket trade. check out the nasdaq, up about 10 points in premarket trade. we've been seeing apple outperform over the past couple of days. that stock has been on the move and getting very close to breaking $1 trillion in market cap value. now take a look at the euro because that has been on the move ever since we got those reassuring comments from mario draghi where he did recognize the fact that inflation is too low and that the ecb needs to put together unconventional measures to stimulate the european economy. on the back of that, the euro has been moving lower against the u.s. dollar. it's trading right now at 1.2435. diving into the european markets, how are they respond to go mario draghi's comments? positively. right now, the xetra dax up triple digits or 1.7% on the
day. the ftse 100 really in focus. it continues to outperform up just about 24 points. even when you look at france, it is up just about 1 is 1.2%. mario draghi says we will do what we must to raise inflation expectations as fast as possible. italy up about 333 points, so a big move in italy, up 1.7%. but the question is, is mario draghi overpromising and underdelivering? wilfred. >> european markets going up in the equities space. but if we needed confirmation for what's driving that, let's have a look at bonds. we have also seen a bit of yield compression. there is a bit of bearishness out there. 0.78%. we're having a bit of risk off coming through in the general sentiment in the bond market. but, of course, as we just showed you, equity markets going up, that's on the possibility of more action from the ecb. in draghi saying he stands ready
to take on unconventional measures if necessary. you're saying there, seema, is he overpromising and -- >> we've seen this story before. we have these reassuring comments. the market rallies. but this economic data shows us europe is still dealing with economic malaise. >> i agree. but i think that is his genius. he continues to reassure the market doing just enough to keep things ticking along and giving more time for these targeted individual measures like the talk shows, like the covered bonds and purchases that we're going to have now, to give them a chance to work. and by doing that, he's giving europe's economy a chance to recover without angering europe so much there would be a case against the ecb. >> magic in words, i guess you would say. that's what mario draghi has been a master of over the last year. >> i'm convinced that mario draghi is indeed super mario. another story, president obama outlining his plans for u.s. immigration reform in a
prime time speech on thursday night. deportations will be focused on undocumented immigrant whose pose security threats. more than 4 million people will have a chance to apply for work permits and a million more could benefit from new or expanded programs. listen in. >> we need more than politics as usual when it comes to immigration. we need reason, thoughtful, compassionate debate that focuses on our hopes. not our fears. >> president obama's plan has prompted a serious backlash from republicans. they say he's taken union hat ral action. let's bring in tony fratto, managing director. let's start with do you agree with republicans have accused a president of illegal power grab? is that the case? >> well, they've certainly accused him of that. i'm not really a constitutional, you know, scholar on that. i think that, you know, the president is trying to deal with a very real problem we have, which is a large number of
undocumented citizens living in the country. congress needs to deal with it. i think everyone agrees legislation is the best way to deal with it. i'm hopeful that this will help spur action on the congress to take up the issue. it's something we try to do in the bush administration going back to 2006 and, you know, it's long overdue. we need to find a way to rationalize our immigration system. >> i like the way you worded it, that you hope it's going to spur congress into action. because in the uk, we don't have these type of executive orders. you guys do. so, of course, there's got to be times, there's got to be moments where the president is going the to use that, republicans taking a swipe at him for it. hopefully this will lead to legislative action on the issue. >> yeah. we can't just, you know, pretend that -- you know, we have this huge population here, estimated to be upwards of 11 million people. they're living in our community.
they're in many cases children who are american citizens. they send a lot of their children to the armed services. a lot of kids, they're in the fabric of our community here, certainly important parts of our economy. and so we need to find a way to just rationalize that system. we have a bigger, long-term concern. a lot of countries do and certainly the united states in terms of increasing the size of our labor force and getting the most productive and high quality talent into the country. so we need to think about it from that perspective, also, how can we attract, you know, as many great people who have made this country what it is and continue to do that in the future. these kinds of fights like this actually suppress immigration to the united states. they tend to keep people away because they think they're not wanted. that's very bad for the u.s. economy. >> i was telling you, we're going to interrupt the discussions to bring breaking news on our viewers. the chinese central bank has cut interest rates. it says it's cut the one-year
benchmark lending rate by 40 basis rates. it's cut the one-year dpoe deposit rate by 25 basis points. it's one the one-year loan rain by 0.4%. across the board, we're seeing more easing measures from china following weak pmi data that came out in the in the week. and i suppose the debate, seema, is the slightest sign on economic performance. >> it is and in terms of how the market is react to go this news, we're looking at interest rates rallying after they cut its rates, the australian dollar is rising to the day's high. >> i think to bring you in to discuss this topic.
is this a response to the domestic situation? >> i suspect a little bit of both, but more of the latter. i was speaking to a group of chinese bankers last late week. we talked about the softening in the softening and the need for the government to use a little bit more market based stim ewe will you tell husband with interest rates and some other efforts to try to continue demand. . there is general softness in asia and the broader economy right now. so, you know, i think it's actual a positive to see china taking some action to try to get a little bit more economic support there.
>> longer term, there is just a credit bubble that's getting bigger and bigger. >> that is a real concern, wilfred. i think you're absolutely right. we are talking about a short-term effort here by the chinese. they absolutely need to deal with what maybe a financial credit bundle and really address that and understand what is the, you know, what is the portfolio of nonperforming loans and are they simply inflating it that way? that said, china's move from, you happen, sort of administrative actions by the government towards greater use of what i think of as market based instruments like the interest rate, you're thinking about the policy rate in executing monetary policy is long-term a good thing for the
chinese to think more about market-time instruments that are very comfortable for us in western economies. they need to make those reforms going forward for the long run. >> and we are looking at the aussie/dollar trade at the highs of the day, up about 1.2%. it has been underperforming against a basket of currencies. with that said, tony, interestingly enough, one of the big themes so far this year has been the impact of monetary policy and central bank policy has had on the markets rather than watching the fundamentals. we have just been watching the comments and the rhetoric coming out of central banks. do you think that would be a trend in 2015, as well? >> i hope not, seema. as much as i like the greater communication from central banks and greater transparency, i'm not a big believer in the jaw bone markets with words. i'd much rather see all market participants look at economic fundamentals, the underlying performance of the economy, the
investment environment, the opportunity to get return on investment and productivity growth. ultimately, that's what we're looking for rather than the words of central bankers. there is no question since the financial crisis the words of central bankers have been very important, they've been backed up largely by actions. but simply trying to jaw bone markets is not a sign of a healthy economy. we want much more focus and interest in these economic fundamentals, instead. >> thanks very much for joining us. let's recap what china has done. they have cut the one-year lending rates by 40 basis points to 5.6% and they have country the one-year deposit rate to 2.75%. the aussie/dollar rallied off the back of that news. and we've seen session highs.
intel delivering a big -- to wall street raising to 96 cents a share. the company made this announcement at its annual investor day. intel shares have been outperforming the tech index this year. up about 39% year-to-date thanks to better-than-expected earnings as well as stabilization in the pc market. the stock, by the way, did hit a 52-week high yesterday, wilfred. >> indeed, a great set of announcements. performing well. but not for the first time, the u.s. tech stocks being outshown by their latest partner, alibaba. just two months after its latest ipo, just wowing investors and coming to market for the first
time with a public company with an $8 billion corporate bond sale. >> that's right, wilfred. good morning to you. alibaba priced an $8 billion offering thursday night from 1.62 to 4.5% putting the sale in line with and even tighter than some of the world's best known companies. it was extraordinary demand for the company sale. reports say it was six times oversubscribed. the total orders settling close to $55 billion. reports say half the investors came from the u.s. the highly anticipated sale is one of the largest investment deals of the year and what's already been a banner year for the corporate debt market. which was the busiest year on record since they began tracking data in 1995. alibaba's deal is the largest dominated offering by a company. it's the largest debut ever for
a corporate bond issue. it matches the size of walgreen's bond offering early this month which is used to pay for european drugstore chain alliance. but it doesn't crack the all-time ten. the top spodz spots are held by verizon b, apple's debt sale of $17 billion last year and $12 billion this year. with its high investment rating and using the -- surrounding its ipo, alibaba was able to price this deal against amazon, cisco and oracle as opposed to buy due and tencent. alibaba has emerged as a biggest source for banks. morgan stanley, citi and others reaped millions of dollars for their efforts in this bond sales. banks have collected more than
$35 billion in fees this year with some new stock and bond offerings. wilfred, back to you. >> thank you very much. >> and before we get to the break aud trailan bonds higher. mario draghi vows to bolster the central bank's asset buying program if inflation remains weak. obama risking negotiations with republicans by moving ahead with immigration reform without congressional approval.
it cut its deposits rate by 2.5% to 2.75% and it raised the ceiling for deposit rates to 1.2 times from 1.215. that gets the bank a little bit more flexibility in china. the aussie/dollar is higher 1% off the back of that news. what else is linked to the chinese economy? the miners. the mining stocks in london have rallied off the back of this news, bhp, rio tinto, all up between 2% and 3% off the back. we're also going to have a look at gold prices, gold over the course have bounced as you can see from session lows. it's 1196.2. >> european markets are responding to that rate cut by china, which is effective on november 22nd. we're looking at the stocks europe 600 index at session highs right now. up about 1.4%. there's another catalyst helping the markets right now and that is mario draghi's reassuring
comments today. he did say he improvised the risk at a too long period. and the firm anchoring inflation expectations is critical under any circumstances. the market liked what mario draghi had to say. we did look at the euro weaken against the dollar trading at session lows down just about 0.8% against the u.s. dollar. >> and the central bank did acknowledge that underlying growth in europe was weak and said the bank wag ready to intervene more if necessary. draghi specifically heads to the bank ready to adjust the size and composition of its balance sheet to make sure low price growth does not become embedded. >> the ecb has acted and is continuing to act to bring inflation back towards 2% and assure the firm opinion of inflation expectations. >> take a look at how u.s. futures are responding to the reassuring comments coming from mario draghi as well as that
china rate cut. right now, futures are higher. wow, at the highs, i guess you could say of the day, dow jones industrial up just about 90 points in premarket trade. the s&p 500 did close at a 44th record high. seeing a gain around 0.1% in premarket trade. bob, we got china's rate cut decision, this is supposed to eventually help china's economy grow faster than expected. what are your thoughts on that? >> good morning, seema. i heard you guys announce it while driving in this morning and my first reaction was wow, that's great. coming in this morning, you saw a little bit of a blip up in the futures side. i think this was exactly what kind of push we needed. realizing that we're going into a low volume week here in the u.s. with the u.s./thanksgiving holiday coming up next week,
this type of event going into this week, especially given the sort of cloud that we've got with the opec meeting for next week, i think it's the kind of thing that leaves traders in long positions as opposed to thinking, well, when i come this monday i have to start lightening up, we have lower volume and there could be negative announcements. economically, this is going to go a long way to help sooth those fears. >> domestic data yesterday alleviated signs of weakness in europe. can domestic data out of the u.s. continue to help the market move higher or at some point does it have to be weighed by the uncertain global economic outlook? >> well, i think that's happening already. i think what we're looking at right now is the spectrum of oil prices combined with the u.s. fed and how quickly they're going to move. one of the things i noticed in the fed minutes personally was that even though they were pretty much status quo, they seemed a little softer in terms of the outlook for the global economy as you mentioned. i think the fed is looking at that, but they look at it from a
much more macro view than i think people think. i don't think there was any risk of any change in the fed's statement. i think that is the driver here. when you're looking at what's going to happen in u.s. equities, u.s. equities perform well during the beginning of a rate hike cycle but then they start to decline as you get to the early to mid stages of it. i think what you're looking at here is the start of that cycle. where does that cycle come in? you make a great point about global economic data. while it's not the fed's first line of economic data, it is something they have to pay attention to. just investors have to keep in mind they're going to be looking at that from a little bit of a step back as opposed to right in the forefront of fighting europe and china's price. >> u.s. futures indicating a higher open. bob, we're going to leave it there, chief market strategist. and develops in the last half an hour, mr. draghi hinting earlier that unconventional policy still might be used. china jumping the gun and easing itself. what will that mean for u.s. markets? "squawk box" will update you on all of that coming up next.
good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. we do have breaking news at this hour. just moments ago, china's central bank cutting interest rates. the goal, of course, is to lift the sagging economy there. michelle caruso cabrera will join us in just a moment with the full story. here are the other three big stories we're following today. president obama announcing his plan to fix the immigration system and he is doing it without congress. the setup would allow immigrants in the united states for more than five years to be able to apply to stay in this country temporarily without fear of deportation. that's for two years as long as they can pass a background check and pay taxes. >> you can come out of the shadows and get right with the law. >> john harwood will join us with more in just a few moments. you can call this one a draghi rally. stocks trading higher in europe following the speech wh