tv Worldwide Exchange CNBC February 12, 2015 4:00am-6:01am EST
hello, good morning and welcome to worldwide exchange. i'm wilfred frost. >> i'm seema mody. here's your headlines from around the world. >> the rouble falls against the dollar. and the imf pledges $40 billion for ukraine. christine legard says the package is sufficient. >> design the program in such a way that there's enough buffers to accommodate a difficult situation as it stands. >> greek banking shares highly
despite a lack of progress on the deal. >> it's a mixed bag of european bank earnings. setting aside further provisions to cover u.s. legal issues but puts it's troubles behind. >> strong european deliveries turbo charge european profits. also pledging to boost earnings going forward. >> you're watching world wide exchange. bringing you business news from around the globe. >> the roubl serks trading lower against the dollar. prorussian separatists are refusing to end the conflict in ukraine. meanwhile russia is demanding unacceptable terms. in the last 30 minutes imf managing director pledged for
them. we asked if it would effect the ability to reform the country. >> the program is not without risk. we believe it is realistic and we are reinforced in our assessment by the determination, appetite for reform by the authorities and by the various stake holders in this dialogue that we've had. you know they have demonstrated their appetite for reform. they had a fiscal policy that was better than expected. they increased energy prices very courageously. they have begun tackling the corruption and money laundering issues that plagued the economy for a long time. they moved on the exchange rate which was always a taboo. they want to do it and we designed the program in such a
way that there's enough buffers to accommodate a difficult situation as it stands and we hope it would not deteriorate. that would be in the interest not only of the people of ukraine but also the economic situation. >> now how quickly could they receive that first installment and what kind of conditions would be attached to that in the interim, particularly the talks going on as far as peace is concerned. >> the program is totally independent from the minsk program. while we care that it's productive and satisfactory it's independent and i hope to submit the program to the board which has a final say on the program before the end of the month. before the end of february and once that has been approved and a few prior actions completed then we disperse very promptly and we're known for that
rapidity. >> julia, great interview there. give us an update on the latest development on the russia-ukraine crisis. it's been a busy 24 hours. >> absolutely. the point she was making there as far as ukraine is concerned and their support with this facility is its very independent of the peace talks going on now in minsk. we heard that poroshenko left at one point last night. talk that the russians were being unreasonable in their demands. demarcation lines are a real issue for them too. it was developed since september. the rebels made further ground. the ukrainians want to abide by the original accord and demarcation lines in that. the rebels don't. difficult to see how they get through that and ultimately even if they do whether or not the russians abide by it. that's the question here, does
this lead to peace and do we see a cease fire? but this is very independent as far as the program is concerned from the peace talks right now. a real show of support from the imf which is all they can do here despite the on going violence and it's an ambitious program. a lot of skepticism given what we have seen in the past about whether or not they'll follow through with implementation. she was clear with me too. she said we have never seen commitment like this from a ukrainian government to push through with reforms. she gave us a shopping list of why this time was different and they're going to abide by the program now. the flexible exchange rate movement we've seen is a key element for them but also the gas prices and oil prices in the country. 66% in gas prices. 40% in oil prices in 2014. she says this demonstrates a commitment to energy reform and they'll front load some of the
banking sector with energy sector of course and the sub sytys that are provided. but i also think think is a real show of solidarity from the imf and other countries perhaps against the violence and tensions in the country even if they can't do more and meetings with poroshenko today. back to you. >> thank you very much. we'll be back out with julia shortly. but let's get an update on markets and what we're doing in europe. europe was a little weak yesterday. the u.s. was mixed as was asia and today we're mixed in europe once again. fractionally up. the stock 600 showing about a quarter of percent of gains which has come in the last 20 or 30 minutes. across european markets a slightly better sign than the stock 600. partly because they report in u.s. dollars. a little bit of euro weakness.
the ftse 100 up a quarter of a percent. france up .3% and athens is doing well today despite no real clear proo guess from the talks in brussels which we'll be hearing more about from julia shortly. that's up 3%. the banks leading the charge as they often do. the euro which has been moving around in recent sessions is basically flat today. it's at 1.13. it has been moving around when we hear news as to whether a compromise is looking more or less likely and let's put that in perspective because it hasn't moved around that much and that's one of the big factors that people aren't fearing wider contagion from the greece issue. the yen moving strongly to the upside today. 119.5. best part of a percent move there. we have the u.s. dollar strengthening against the
rouble. they aren't willing to sign an greemtd that may or may not have been reached between the leaders of france, germany, ukraine and russia. let's look at the swedish krona which moved quite sharply in today's session. it's moved 1.5% to the down side. we might get the other chart for you in a second. that's the month chart. the they cut the repo rate to minus 0.4%. they will be buying 10 million swedish krona. a significant move to easing in sweden. >> we're learning flashes coming from dow jones that russia's vladimir putin says we're able to agree on the main thing in ukraine talks. putin agreed on a withdrawal of
heavy artillery in ukraine. the russian rouble is strengthening as putin says a cease fire has been agreed upon. the russian rouble is reacting. we're looking at markets right now. watching these developments. putin says a cease fire has been agreed from february 15th. we have agreed on a withdrawal of heavy artillery of the russian backed separatists in ukraine. that's the developments coming out right now. putin says ukraine should take constitutional reform to respect rights of people in eastern ukraine. these are the headlines coming out of the meetings in minsk but some type of negotiations are coming together. putin says we have agreed on a withdrawal of heavy artillery and putin says a cease fire has been agreed upon. we'll get you the latest as they come out but you're looking at the markets at the wall.
>> we'll come back and look at the stoxx 600 chart because it's moved sharply off the back of the news. a best part of .25%. continuing it's rally. it had opened just below flat. we're up .5% particularly on news of the possible cease fire coming out of the minsk meeting. let's now move on to bond rates and see what we're looking at there and of course we are just above 2% on the u.s. tenure. we saw that tick up yesterday. there's two real reasons for that. one positivity particularly coming from the recent jobs numbers which have been descent and that's suggesting that rate expectations may be brought forward but we have heavy bond options this week including a ten year option yesterday. so that's where we are at the moment. the german staying low at .36%. the u.k. 1.68 and of course greek yields have been moving in
opposite directions in recent days but they have been stable over the last day or two. stable but still elevated 10.89% on the ten year. here's the other maturityies and the shorter end of the curve at much higher yields. the greek two year 21.5%. the three year 18.2%. so relatively stable despite the fact that the equity market is rallying the banks in particular. all of this comes after they failed to reach an agreement with the greek government on the way forward regarding the country's bailout program. after seven hours of intense discussion both sides could only agree to resume talks on monday. >> of course focus now on greece as well as russia. we're learning that the headlines coming out of minsk that vladimir putin agreed to a cease fire. in a meantime a member of the french delegation said it would be difficult for german chancellor angela merkel as well
as the french president to get to brussels on time for the european union summit on thursday. does that delay the talks and the negotiations? let's get to julia who is with us for the latest. >> thank you so much seema. as you were saying there, obviously it's going to be difficult to see what happens now in terms of timing. yes russia seems to have signed the cease fire agreement. i don't know if you've seen anything as far as the separatists are concerned. up to a few minutes ago we weren't sure if they were going to sign this consent. we'll have to see if they were willing to sign this. even if we have signatures on the paper, will the russians and russian separatists abide by the rules of this. as much as this seems like progress at this stage the devil will be in the detail and the follow through is going to determine whether or not ultimately we see positive
action and follow through on this accord right now. this is going to make the leaders late depending on who has their own plane but obviously the remaining leaders have plenty to discuss here and they'll just join at a later stage. 1:00 p.m. the arrivals expected from the eu leaders and as you were mentions just before that greece also. i'd argue there was progress made on that subject. we were never expecting a deal to be announced today. the view was these talks would continue and we would try and reach some agreement on monday. we were always suggesting it was going to come down to just how this is talked about and negotiated going forward. the greeks said we don't want this finance program but he said we don't want to extend this program. so it just comes down to terminology on how they can go
home and everyone can go home and call this is a victory and if we get an agreement we'll have to see if there's any austerity in there to see who can really claim victory as a result of these talks. back to you. >> for now, thank you so much. we'll be coming out to you shortly with more developments as they come out over the next couple of minutes but i want to recap what we do know in term of the meetings taking place in minsk. vladimir putin agreed to a cease fire from february 15th. that would be this sunday and putin also says ukraine talks, leaders agreed on a withdrawal of heavy weapons, ukraine forces to pull back from current line rebels from september 19th line. putin also says ukraine agreed to constitutional reform. let's talk about what this means for broader markets and
investors with phillip shaw. we were going to discuss greece more in our discussions but given the developments coming out of the meetings in minsk, is this what markets want to hear right now? >> it's a start, isn't it? it's a long way before you get a permanent cease fire in the situation. russian corporates refinancing themselves over the rest of the year and also the sovereign situation as well. so it's a step forward. i think realistically there's a long way to go here. >> let's move the debate back to greece and the on going toing and froing as to whether we'll get a compromise deal. how important is it that the bailout is extended? >> that's a little bit of a red herring. originally the february 28th deadline was set because after that greek paper would be
ineligible for open market operations at the ecb. the ecb already preempted that by saying we got rid of that waver and it's below investment grade and you're not using it. the key deadline is when greece runs out of cash. there's varying estimates of that. they were the big rollover of bonds in july with a huge event here now because there's reports that greek revenues are beginning to dry up. tax revenues are drawing up. that's been brought forth perhaps april, may. so the time scale is a little bit shorter and i don't think the end of this month is that critical. >> market participants are trying to assess what damage would endue but given that they're held by the official sector it arguably poses a smaller systemic risk to global markets. is that correct? >> i think that's right.
it also changes the nature of negotiations. really for greece to make a meaningful reduction in it's debt burden by renegotiation. it really doesn't do anything. we already had the big private sector restructuring. it really has to look at european union debt and to a certain extent imf debt. it's not going to get very far with any of those institutions in a restructuring of its debt. particularly the imf. so how it reduces it's debt burden is one of the key questions here. we think it can't. we think this is a longer term thing. it really has to grow it's way out of its debt burden but whether that's politically acceptable is a big political question. >> phillip thank you very much for joining us today. much appreciated.
phillip shaw chief economist. i want to come back to the live pictures you're seeing in minsk following successful negotiations between vladimir putin, petro poroshenko and angela merkel where a cease fire has been agreed. live pictures of mr. putin leaving a recent press conference. those pictures are losing a slight feed but of course as we told you just earlier that a cease fire has been agreed. putin's latest flashes at the end of the press conference he was saying the leaders have called for restraint in a period before the cease fire comes into play and also reporting the separatist rebels have been calling for the surrounded ukrainian forces to surrender. there's still some ways to go before it's implemented but a big development that he is saying we have reached. >> interestingly enough two days ago president obama called russian president vladimir putin
warning him that further actions would be feed in terms of finding a negotiation and if he does not want the u.s. to play a stronger role or bigger role in terms of military support in the russian-ukraine war but clearly here negotiations coming out at this point successful between russian president vladimir putin and various leaders meeting around the ukraine cease fire. we'll keep you up to date on what is taking place out of the meetings in minsk but we'll also talk about earnings. tesla earnings hit a speed butch but elon musk is confident the sky is the limit. >> there's another glitch at netflix. this latest technical issue made some fans very happy. we'll bring you all the news on that story. >> twitter plays a matchmaker for a-listers and advertisers. stay tuned to hear about the social media giants latest acquisition.
♪ ♪ ♪ tigers, both of you. tigers? don't be modest. i see how you've been investing. setting long term goals. diversifying. dip! you got our attention. we did? of course. you're type e* well, i have been researching retirement strategies. well that's what type e*s do. welcome home. taking control of your retirement? e*trade gives you the tools and resources to get it right. are you type e*?
share and 3% fall in net income from a year ago. this as the firm completes it's exit from a russian business but the group said it would maintain it's dividend for the year at 17 swiss francs per share. caroline is live with the latest on these companies and what to expect going forward. take eightway. >> seema, take a look at the share price reactions. off by more than 3% in part because numbers for the fourth quarter were a little disappointing and that also applies to the return on business operating profit the last year that came in at 11% below the longer term target but the ceo is confidence he can breach that over the medium turn and there's concerns about the soft start to the year. now completely different picture this morning for credits. they're up 6.5%.
year to date they're down 20%. what we're seeing this morning is on the one hand bargain hunting and also a response to the numbers which were pretty good pretty solid and the company announcing a cost cutting plan as a response to the swiss franc and keeping it's dividend steady which not many people expected. let's come back to the impact on the businesses of the two companies. let's hear from the two coos and economy minister. >> took 2014 and imposed the rates and the current conditions on that. we estimate that's about a 300 million negative impact for us. we also then announced measures that had mitigate that. we have cost reductions and other measures that actually get us to more than that in terp of trying to offset that. that won't all happen in 2015 but over the course of the next
couple of years we'll completely mitigate that. >> for me it's important to see that the exchange rate between the swiss franc and europe develops to the purchasing power parody and that is in my understanding about 120. >> impact of course is not on the operational business as such due to high swiss francs but most of our income is foreign country sy so the translation into a swiss franc dividend has an impact but not effecting our underlying businesses. >> so a very different response from zurich this morning because inshushs doesn't add on a-- insurance doesn't add on another cost
cutting program. there will have to be job cuts but he didn't outline how many and which divisions would be hit the hardest and then you have the swiss economy minister saying that the swiss franc should be above 120 and much much closer to the purchasing power of parody but now we're far away from that and until we're far away from that point it's going to continue to heard small and big businesses alike. back to you. >> thank you very much. we'll bring you more of the flashes following this meeting in minsk. we heard from president putin and now heard more flashes coming out of the other leaders. the french president said we came to a global agreement about the cease fire and global political settlement of the ukraine crisis. we also heard from the ukrainian president poroshenko that says while there were various unacceptable conditions put to the ukrainian side agreement was
reached and he says that the contact group comprising of russia ukraine and the osc have signed a document. markets responded positively to this news. we've seen the rouble rise .8% on the day as you can see and we've also seen the equity index in russia go up. the stoxx 600 is up .5%. it rallied around .25% on that specific news. >> the latest meetings are proven to be successful but we're waiting for the president to talk about the cease fire and what negotiations will be taking place going forward. >> other than the two flashes we reported where he mentioned the fact that the document has been signed. we'll bring you more on the situation unfolding around ukraine after this short break.
banks earnings. setting aside further provisions to cover u.s. legal issues but puts it's troubles behind and swings to a profit. >> shares race ahead after strong european deliveries turbo charge profits. the french car maker pledging to boost earnings going forward. >> let's recap what we learned in the last 20 minutes or so and that is that president putin and petro poroshenko of ukraine say a cease fire has been agreed to by both sides. we've said that will agree the withdrawal of heavy artillery from the region after it kicks off which is reported to be sunday. let's get more reaction to this deal. joining us on the phone is the founding partner and managing director of the russia team at
trusted sources. thank you for joining us at short notice. it seems that we have agreement between poroshenko for a stamp. how significant is this? >> it's the necessary starting point. it's not a sufficient condition for a resolution of what is ultimately a geo political confrontation going way beyond the horrible events and the conflict zone in southeast ukraine but it's a necessary condition for getting to a solution. you mentioned the withdrawal of heavy weapons. artillery. multiple rocket launchers. these are the things killing dozens and dozens of innocent people in the last few weeks and also last summer so that has to be an absolutely necessary precondition and it's good news. >> chris, what do you think pushed putin to agree to this cease fire? up to this moment we have been seeing putin use a rather bold
and defensive tone. >> i think if you analyze the activity in recent weeks and last summer as i mentioned, you'll see that the rebel forces have been given sufficient support to prevent their being crushed. that was last summer and also to conflict losses on the ukrainian forces which clearly with the aim of bringing the party to the table to try to get this cease fire and they have not been given sufficient support. you can imagine huge armored deployments, arpaioer,ir power, all the other things to launch major offensive operations to grab territory. it's all been fighting just around the line of control. in other words it looks like the goal has been to get, persuade the ukrainian side to come to
some sort of terms leaving the rebel controlled area physically secured and a lever for russian influence within ukraine which is in my opinion at least, the ultimate geo political goal. >> will the separatists in the east of ukraine agree to what the elected leaders have supposedly agreed to today, do you think? >> i think it's in their interest to do so and they will actually be the people signing the government. i doubt the heads of state and government will formally sign anything. but one of the reasons why these talks appear to have gone on all night long is very sere warehouse attempts have been made or at least very serious talks have gone on about the underlying political resolution. that is some degree of autonomy for the rebel controlled area and the two sides are very far apart. so in answer to your question there's no agreement yet on that
but on the cease fire and above all the withdrawal of the heavy weapons this is the crucial thing and it's clear now that not everyone is on board. >> a sigh of relief for president obama and secretary of state john kerry do you think given both leaders were looking at potentially supporting the ukrainian troops there with their military support? >> i'm sure that everyone is relieved for their own reasons but also for the common reason that there's a chance that the worst of this violence and the loss of life will be behind this but specifically to answer your question, yes, i think the decision for the obama administration on increasing armed supplies to ukraine was a very difficult one with very sensitive arguments on either
side and an end to the shooting war will at least allow it to be shelved. i agree that must be welcome. >> chris thank you so much for joining us. especially at short notice. also the rouble rallied about .8% thus far today. >> a rather change in tone from the crew yan president who earlier this morning said no good news has come out of the minsk summit at this point but in the last 20 minutes he says a peace deal does not include federalization for rebels. it calls for a withdrawal from ukraine. also ukraine should establish it's control over the joint border with russia by the end of the year but the main headline leaders in minsk agreeing upon a cease fire in ukraine that will commence on february 15th which is this sunday and market versus been reacting positively.
we have been looking at the rouble strengthening against the dollar. up better than 29% so far this year and as the european markets are also seeing this as a positive development of course. successful negotiations taking place on this ukrainian peace deal and you can see the european markets higher across the board. the xetra dax up better than 1%. the europe stoxx 600 trading at session highs. >> let's focus on the biggest individual stock movers so far today. commerce bank reported 4th quarter net profit coming in at 77 million euros. more than double the dow jones forecast. this tanks to a tax refund and fall in provisions. they're likely to increase their litigation provisions as us. investigations into sanctions and money laundering intensify sending the shares lower. coming up we'll be speaking to the chairman and ceo. that's a first on cnbc
interview. let's move on to another bank stock. in the red after they reported full year losses of 5.3 billion euros. it's fourth consecutive annual loss due to write downs on bad loans. in response the italian bank will raise it's planned capital increase to comply with the ecb capital targets. that's down 1.35%. banco popolare started the session early. the bank posted a loss of 1.95 billion euros last year. the common equity tier one capital ratio and gauge of financial strength was 11.3%. that's lower by half a percentage point but still performing better today. they're trading higher up 1.3%. the french bank booked a 31% increase in profits.
the reason for the change in tone, significant exposure in russia and reverses the losses in earlier trade given the fact that we have had the cease fire agreement. now it's also raised it's litigation provisions on a u.s. investigation into alleged sanctions breaches. stefan spoke to the ceo in paris and asked him about his sent lt on -- sentiment on russia. >> first of all, there was a positive contribution of russian activity. secondly we managed well the balance sheet and the liquidity and the credit portfolio has improved dramatically because we were able to get rid of the portfolio and the coverage ratio has increased at 85. so if you wish we enter in the best situation in russia.
2015 will be recession between 3 and 5 but let's see how things are developing. it's too soon. i think probably it might be the most difficult year. we'll see a little bit later what we can expect for 2016. >> are you confident about diplomatic solution with russia? we'll see. what is very clear and the recent dialogue and efforts just reflect again that for europe it would be of course beneficial to find a diplomatic solution. russia is a neighbor. russia is a close market. it's important to avoid further deterioration of the situation. >> joining us is james, global equity strategists. let's start with russia because a lot of challenges facing the russian economy right now. the western sanctions in place but given the news we're getting out of minsk that a cease fire
has been agreed upon around the ukraine war taking place. do you think western sanctions could in the near term be lifted and that could help the economy rebound? >> yeah it's hard to know the timing of sanctions being lifted but this is a positive step. very very fresh news. we are invested in russia and it hurt us a little bit so far. we're adopting a longer term approach to this. we see geopolitical crises as an opportunity. what we have experienced over the last nine months or year has been quite heavy gyrations around quite negative news but if you look over the longer term say three year plus view when geopolitical crisis first occur after three years you see a positive return in equity markets quite substantially so it's very much this longer term approach. it's very attractively priced now at three times priced earnings. >> the fact that you're invested there is that because you also think the oil prices bottomed or
because moving for the geo political situation and sanction situation can improve. >> it's difficult to call the oil price. many people have said that. the boss of ep says $50 barrel and the other $90 barrel. there's huge uncertainty. it does look as if it's bottomed. this could be a good opportunity. >> let's stick with the oil companies because it's interesting to see all of them are cutting cap ex. none of them cutting their dividend. is that a situation they'll regret in the years down the line? that they should be thinking about the long-term rather than protecting the share price by maintaining a dividend? >> this does bring in cutting cap ex and could lead to lower growth in the future. what we're seeing is oil companies be wietquite balanced on cutting cap ex.
they digit cut as much as possible and yet they promised to sustain the dividend. if they can do that which we feel they can, we do feel they can and that's a healthy balance so they perhaps won't be the impact won't be quite as negative as people think. >> there's also an interesting story too. >> a lot of different factors to digest. you have the oil prices russia and then of course greece. that continues to be an overhang for this market. would you allocate capital into sectors for defensive and less vulnerable to the uncertainty around greece? >> one of the challenges you face now allocated into defensive sectors, are they incredibly expensive now? particularly health care staples, staples have disappointed. >> they've had a massive run over the past one year. >> you pay up for that defensive yield. we see the opportunities of companies where you're being paid to wait for a recovery.
particularly -- see the energy sector within europe you can get around 5.5% dividend yields. so you are effectively being -- as long as you feel they can continue to pay those dividends you're being paid to wait for recovery. >> should the greek situation be undermining the rest of europe more than it is currently? >> it's difficult to tell. if you look just at the cold hard economics greece only represents 1.8% of gdp for the whole of the euro zone. will it have a significant impact on the euro zone in total? if greece was out of the picture we may see a pick up in the euro but then we still have the negative pressures for the euro and quantitative easing. it's hard to say how much genuine impact it will have. >> yesterday hedge fund manager told cnbc that a greek debt deal would obviously be good for markets but he also added stocks
could survive even if it goes the other way. >> we find ourselves talking a lot about greece but we're not actually invested. >> makes sense. >> let's move on the debate and talk a little bit about the u.s. and earnings has been mixed over the last couple of weeks. do you think earnings has been good enough to justify superior evaluations that we see? >> analysts in the u.s. have been playing the same old game of downgrading their expectations prior to earnings season. this time around we have seen 75% ratio. 259 i think it is and 87 misses. so that's quite high. growth has been around 2% but it's interesting when you strip out apple, growth has fallen by minus 2.1% so apple is a significant portion. most of the growth actually in this market. >> you would think the euro would be playing a more significant role in helping boost corporate earnings on this
side of the bond but we're waiting for that to trickle through in the common quarters. >> mt. u.s. there's a trend of more domestically focused companies out performing. and a lot of international companies have posted disappointing earnings in the u. s. >> it's true and it could be a trend to continue if the green back continues to strengthen. james, thank you for joining us. we'll leave it there. and russia of course that's been the big story. after the break, we'll bring you more on the developments in russia and that peace deal coming up next.
welcome back. we're looking at live pictures in minsk where vladimir putin is addressing a press core. a cease fire agreement has been reached between president putin of russia and president poroshenko of ukraine. angle merkel the german chancellor was also present. a significant development in cease fire negotiations this morning. we're listening or looking at president putin as we talk.
>> various leaders committing to respect ukraine sovereignty and territorial integrity. the leaders also agree that regular meetings would be held to ensure the fulfillment of the minsk agreements. this cease fire will commence on february 15th which is this sunday. >> indeed we heard one of the main developments was that we would see heavy artillery withdrawn within two days of the cease fire. that would make it next tuesday. that's a significant development. still remains to be seen what happens in the region but great development to hear both ukraine and russia reached an agreement. we're waiting to see what flashes come out of what mr. putin is saying. he's speaking live at the moment. for now let's focus on autos.
shares are higher after it tripled full year net profit to 1.9 billion last year. that's higher than expectations and comes on the back of strong sales in europe and cost cuts. auto makers say they are increasing spending to ensure their cars don't damage the environment but with stricter penalties coming down the road could bottom lines be set to have a bump after investing in that space? james is the head of investor research at cdp which was known as the carbon disclosure project there's a clear business length between that and the companies that do that. >> that's right we think there's a clear link to to earnings and
investment fundamentals. i think the most topical is fleet emissions where there are heavy financial penalties for noncompliance with regulatory target which is are tightening overtime. >> how have lower oil prices changed the way you cover or research these companies? oil prices come off by about 50% over six months. pump prices are down over 20% so we think from an advanced vehicle perspective it still doesn't impact it enough to make the it a nonstarter. we think there will be growth on a five to ten year time frame. in particular driven by china where we think it can be a game changing market if you believe the strict target china have for advanced vehicles from 2020 and
the size of the electric vehicle market for china in 2020 we think 200 million vehicles a year which is the total number in uk or india for that matter. >> which are the best on the measures you look at. >> we have three of the top four performers are japanese companies and nissan is number one and toyota is number two. the nissan leaf is the top selling car and toyota is a leader in hybrid technology. >> is that feeding through to their bottom lines? it will in due course? >> yeah. >> thank you for joining us. much appreciated head of investor research at cdp. let's impact the latest from russia. live pictures from president
putin of of russia who is addressing a press conference in minsk where the agreement is signed this morning and stamped by chancellor merkel of germany. >> markets are responding to the news that the cease fire is between russian president vladimir putin and the ukraine president petro poroshenko. that will commence on february 15th. we haven't seen markets move higher on the back of the news of a cease fire. ukraine peace deal if you will. give us your reaction to this deal. >> it's very positive. the whole thing took all night. you can imagine the leaders. i don't think we've seen this anywhere before. being stuck in a room for about 14 hours until the early hours of this morning. this is very positive. president putin came out with the first press conference.
the details are coming out. it still looks as though we need an agreement on the demarcation line. that's the reason why fighting is still going on very he havely in eastern ukraine and why the suffering just needs to stop now so the markets as you say haven't really reacted. it's been euro bonds on the sovereign side in russia which have been rising more than the russian rouble but it's also supported currencies like the try from spill over. >> when does this make a meaningful effect on the outlook from russia's economy? only when sanctions are removed completely? >> the effects will start to be felt as soon as we have the cease fire in place on the 15th of february. we don't know whether there's going to be an international piece keeping force in place which is the most important point and one of the issues they have been arguing on on the last one or two days. that will be the main positive
knee jerk reaction for markets but for the local economy in russia and ukraine we need some time now for consumers, for households, for people in the different countries to be able to digest this and see what this implies for the future outlook but yes if this accord comes into place we will start seeing the european union skating down against russia. >> just saw president putin giving a hug to him hosting this meeth but meeting but not parts of the discussions. >> the hopes of a deal have sent the micex index up more than 21% this year. do you think valuation wise russian stocks still look attractive to you? >> russian stocks have been always very undervalued from a forward looking point of view and one of the main reasons has
been the lack of goverance issue and lack of reforms and because around 75% of the index is energy related. so i think that yes, if we get a resolution now then we will see valuations or expectations for valuations especially from the growth side improve and then you'll see domestic sectors starting to become more attractive. >> thank you for joining us. much appreciated. head of emerging market research at commerce bank. >> after the break we'll bring you more on the developments coming out of minsk on a cease fire in ukraine. that's coming up.
russian markets rally as talks in minsk end in a cease fire deal for ukraine. the leaders of russia ukraine, france and germany agree on withdrawal of heavy artillery and agreement to pull out the military. >> despite a lack of progress on the bailout deal with the government sticking to demands with a new program. >> it's a mixed bag for european earnings. setting aside furlth prother provisions to cover issue but puts the
troubles behind and swings for a profit. >> shares of tesla are skidding today after the electric car makers fourth quarter results and deliveries fall short of forecasts. >> you're watching worldwide exchange. bringing you business news from around the globe. >> let's take a look at u.s. futures. they're slightly higher. the dow up about 80 points. s&p 500 up about 8 points in premarket trade utilities selling off. the nasdaq was able to close in positive territory. much of that having to do with apple which by the way did close at another all time high we are higher across the board at session highs on the news of the russian-ukraine cease fire which will commence on february 15th. we have been hearing from different leaders talking about
negotiations coming together so successful at this point. the question is what will the path be going forward. xetra dax up better than 1% a gain of around 36 points but all eyes on the index. the russian equity market which is up better than 2.5% in today's trade. year to date up about 30% so big moves in european markets. of course investors hopeful this negotiation that has come together will lead to perhaps western sanctions being lifted. >> russia has had an effect on broader europe and we're now up over .5% in the broader index. everything in the green apart from ireland today. let's move on and have a look at bond markets and the u.s. bonds on the ten year is 2% at the moment today. that's following an auction
yesterday after ten year notes priced at 2% which is well covered. a couple of more bond options today. but also the positivity we have seen particularly around the employment front in the u.s. european yields continue on a similar path. i mean very very low in the core and pretty high for greece. we're at 10.85 so no real spike over the last 24 hours but remaining on those elevated levels. the euro is jumping around over the past week moving a little bit at the margin depending on what headlines come out of greece but no real contagion moving it to worrying levels. let's move on. the yen is weakening today but let's have a look at the rouble because that's been a significant mover since we heard news of the cease fire agreement. the dollar weakened .6%. it did move a lot sharper than that but we're around .6 or .8%
move upwards for the russian rouble today. >> now back to our top story which is russia. president putin and president poreshenko agreeing to call a halt on sunday. it's between the leaders of ukraine, russia france and germany. the withdrawal of heavy weapons and both sides and creating a demilitarized zone in eastern ukraine. we have been hearing this ukraine peace deal coming together. interestingly enough the german foreign minister said we have accomplished something. referring to that cease fire that has come together but he had hoped for more out of the talks in minsk and this new minsk deal is no comprehensive solution and the new deal could end the spiral and says it's not
everything we would have wished for. so perhaps still hesitation of what the deal will lead to and if the russian backed separatists will listen to what they agreed upon. >> an interesting point of view for the last half an hour or so indeed coming out there and we had a flash only about 15 minutes president. he says he will brief the european counsel on the deal. we'll know much more of the details we're getting in as we look at things but overall still a positive development over the last 40 minutes or so imf managing director pledged 40 million dollars in brussels. she asked if geo political risks would impact the ability to reform the country. >> the program with ukraine is a very ambitious one. it's not without risk. we believe that it is realistic and we are reinforced in our
assessment by the determination and appetite for reform by the authorities and by the various stake holder in this -- stake holders in this dialogue that we've had. you know they have demonstrated their appetite for reform. they have had a physical policy that was better than we expected. they increased energy prices very courageously. they have begun tackling the money laundering issues that plagued the ukraine economy for a long time. they moved on the exchange rate so they want to do it and i think we steined the program in such a way that there is enough buffers to accommodate, you know a difficult situation as it stands and we hope that it will not deteriorate. that would be very much in the interest not only of the people of ukraine but also for the economic situation. >> how quickly could they receive the first installments
and what conditions could be attached to that given the talks going on as far as peace in the country is concerned. >> well the program and the negotiations we conducted are totally independent from the minsk process and while we care that it's productive and satisfactory it's independent and i hope to submit the program to the board which has a final say on the program before the end of the month. before the end of february. and once that has been approved and a few prior actions completed then we disperse very promptly and we're know for that rapidity. >> let's get the latest on the sentiment from julia live in brussels following the cease fire agreement which took place shortly after christine legarde's comments. over to you. >> thank you so much wilfred. as you were pointing out and as christine legarde said very
independent this imf support system from what we have seen as far as a potential cease fire is concerned right now. we'll take you through just to clarify $40 billion in total for the imf here. $17.5 billion coming from the imf here and a lot of skepticism given what we have seen in the past as to whether or not they will continue to fulfill promises as far as reforms are concerned but she pointed out straight away in the press conference that look we have never seen a ukrainian government with this kind of commitment. she pointed out there the energy price rises we have seen. oil prices higher by 40%. the flexible exchange rate regime as far as she is concerned a number of elements here that indicate this is a government that will follow through and deserves the support. you have to argue though obviously as far as european leaders and the imf are concerned, this is a country that up until a few moments ago was still seeing war in a region of the country. the domestic economy suffering as far as the social aspect of
concern. we saw 6.7% last year. similar levels expected to fall this year so they're doing as much as they can to offset some of the damage being done and of course the concerns there too. the discussions obviously on this point going to continue. there is optimism here if we have now agreed to cease fire and if that holds, remember as far as we know right now very little difference between what's been agreed today compared to september and the russians didn't seem to abide by that. so very early days but optimistic if we do indeed see a cease fire from sunday. of course 15th of february is expected to begin. guys back to you. >> julia, thank you so much. we have been following the market reaction to that news of a cease fire coming together between russia and ukraine. take a look at some of the multinationals now. hopes that the cease fire will lead to sanctions to be lifted will not only send russian stocks higher but some of the multinationals that have been hurt in the decline of russia's economy and the fear that russia
worries will impact the bottom line. take a look up about 9%. another bank up about 7%. that's a smaller stock. only trading at 2 right now. carlsburg up about .3% and coca-cola which has cited russia as a head wind up about 1.5%. so a lot of stocks reacting positively to the news of a cease fire coming together. joining us to talk more about russia is rob carnell. chief international economist at ing. we want your reaction to the cease fire coming through. what does it mean to you? >> you to regard this as being very positive but as your reporter was saying earlier you have to see this implemented on the ground and so many times before that hasn't been the case. it's a question of whether the separatists are fully under the control of putin and will abide by this and if they don't you
may see it unraveling quickly. but hopefully this puts off talk of arming ukraine which was something unsettling a lot of people. thinking that could end up with a proxy war being fought in ukraine between russia and the united states. i don't think anybody wanted to see that but kaushllycautiously optimistic. >> it's had a broader effect on the european economy. >> you're cutting off your own nose to spite your face. you're taking some of the pain yourself and what the european union is saying we can take this in order to try to inflict pain on vladimir putin. the reality is the european union isn't in great shape to be putting sanctions on anyone. it would be in their best interest to get rid of the sanctions as quickly as possible. >> thank you. i'm going to bring you a very quick flash from merkel that
says that putin put pressure on the ukrainian separatists to reach this ceasefire. we've also had some comments that putin was also talking to the separatists within this deal. another slightly positive flash regarding the ceasefire. we'll move on and talk about greece with rob. we've had a few more flashes on that topic. they are committed to reforms such as those on tax evasion and corruption and they need to find a solution respecting eu norms. this continues to go on this debate. as to whether we will reach some kind of consensus between the two parties. yet so far it doesn't really effect global markets in the way, for example, that russia has been. >> it's interesting. greece has seemed to almost ring fenced itself in all of this. the rest of the world is dealing with all of it's other problems but greece in the fast would have been a serious weight on
everyone's mind. still potentially could be and it's whatever happens in this. i don't think anybody could really make intelligent guesses as to where this ends up. it's a greek problem for now. could spill over into the countries but very much greece problem for now. >> in the meantime conflicting headlines on progress and the talks taking place. that's making investors very impatient. so what do you think the time line is here? when do you see a solution coming together? on the next crisis meeting on monday? perhaps get some sleep over the weekend? >> i'm skeptical anything will happen at that monday meeting. nothing came out of yesterday's meeting. so little they decided they're not going to work on anything over the weekend. they've got nothing so monday maybe we get the beginnings of a frame work for a solution of talks. that's about the best you can come out with on that time frame. >> sticking with europe i wanted to ask you about the move this porng cutting rates and announces their own form of quantitative easing. it follows moves from the danes
and the swiss but they had pegs to protect where as of course sweden doesn't. are central banks are going to be forced to be reactive to other easing on their doorsteps? >> i dare say he would say he has been proactive. i think he has been reactive. they were humming over the possibility of qe. they didn't know of course that the ecb would do its own we. it was a rumor largely expected but they haven't got the full details. now we know it's happening. there's very little else they could have done. i would say that the amounts they offered to buy in terms of asset purchase 10 billion swedish krona is peanuts and the interesting bit of the statement was this suggestion that they'll keep reviewing this. they could do moves to compensate this. it strikes me as a horrid policy decision to get qe out there and
we'll try to workout the details later on. if they don't do more it stands likely to appreciate sharply. >> what are they doing? put pressure on the fed to bush back it's own rate hikes? >> possibly so. it's appreciated a fair bit and we have a bit of a stinky trade number. that was largely hoarding of the cheap oil available at the time. i don't think it really effects the u.s. trade balance that much and i think on your sister program a coup of weeks ago, it's good news for america and good news for the world. at the moment that remains true. >> exports make up 14% of u.s. gdp. >> quite a closed economy. they don't care very much. >> chief international economist at ing. thank you for your time. >> still to come there's another glitch at netflix but instead of causing a headache this latest technical issue made some fans of the video streaming site very happy. all the details after this short break.
returns to profit in the fourth quarter and renault on a roll as it drives targets higher for this year. >> sis coe results beat forecast as demand for switching equipment more than made up for weaker spending. rev new rose 7% in three years. the company is forecasting second quarter sales growth of 3 to 5% and is boosting dividend by 10%. it has been struggling with weaker sales in china, growth elsewhere has been strong. >> you'll see countries in europe move faster than the u.s. in terms of digitizing their whole economy. digitizing their business. changing their gdp growth job creation health care and education. we're right in the sweet spot of all of those. >> rose nearly 7% in after hours trade. it's up 5% today in frankfurt.
>> tesla's model s fell short. they have 10,000 orders for the model s and 20,000 preorders for the upcoming model x suv and it's praftforecast sales of 55,000 vehicles this year. ceo elon musk sounded optimistic saying it's market cap in ten years could be basically the same as apple is today around $700 billion. tesla shares well they're down about 5.8%. a big mover this. >> just going to bring you flashes from angela merkel in minsk. she is putting into perspective what has been agreed. while she says there is now a real chance that the ukraine situation will improve but she says tall hurdles still lie ahead of us and we now have a glimmer of hope and putting of course pressure on separatists to reach that. >> interesting. germany taking on a more cautious tone when it comes to
the cease fire agreed upon. the foreign minister of germany said he hoped for more out of these talks. he also says a new deal is no comprehensive solution and the deal could though end escalation spiral. merkel saying this is just a glimmer of hope at this point. more on the developments out of minsk coming up but also tune in after this break to find out how the ceo plans to leave the wish national bank shock behind. more on that coming up next. 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 and drive forward with broader possibilities. cme group: how the world advances.
you can't predict the market. but at t. rowe price we've helped guide our clients through good times and bad. our experienced investment professionals are one reason over 85% of our mutual funds beat their 10-year lipper averages. so in a variety of markets we can help you feel confident. request a prospectus or summary prospectus with investment information risks, fees and expenses to read and consider carefully before investing. call us or your advisor. t. rowe price. invest with confidence.
>> shares in focus up about 8% after beating expectations. a net profit of 920 million swiss francs in the fourth quarter. they have a dividend of 70.7 a share. more importantly what did credit suisse have to say about the unexpected move in january to scrap the currency peg? >> well the first couple of days after the snb move they said they came out favorably. they didn't see any major trading losses but now they have taken a good look at the numbers and they're initiating the cost cutting program. they want to cut 200 million swiss francs in cost.
unfortunately there will have to be cuts and he didn't specify how many and where they'll be cut. up by more than 8% but since the snb move and the start of the year these share versus fallen quite drastically. they're off by around 20% to recooping some losses here credit swiss is up by better than 8% this morning and when i spoke to the coo i asked how he felt about the performance in the fourth quarter. >> we had good performances. our private banking performed well and the investment bank was solid across the board and there was a quarter with more volatility. it was a more challenging quarter. >> so the other positive take away is the fact that the company held steady it's dividend of 0.7 swiss franc a share because a lot of investors
expected that to be cut slightly so they'll get the choice between a scrap dividend and cash dividend but that dividend was held steady and that is really good news. back to you. >> investors seem to like what they hear. thank you so much. still to come on the show we talk more about earnings. we'll focus in on tesla. we find out if they can recharge the companies deliveries. take a look at u.s. futures higher across the board. this russian and ukraine ceasefire helping improve. more on that coming up next.
. it's a big market day. >> here's your headlines from around the world. >> that's moving markets. russian markets rally and a ceasefire deal for ukraine. the leaders of russia ukraine, france and germany agree on a withdrawal of heavy artillery and agreement to pull out of foreign military. >> greek banking shares behind despite a lack of progress with the government sticking to its demands for a new program. >> shares of tesla skid after the electric car makers fourth
quarter results sfarfall short of expectations. but the french auto giant more than triples it's earnings. >> cisco soaring today after a continue rebound in growth on nearly every corner of the growth. >> you're watching worldwide exchange. bringing you business news from around the globe. they stand ready to cut rates if it dips. we were wondering if they would try to bring back the rate rise expectations which have been pushed back in recent weeks. they're saying they're even ready to cut rates if needed.
in his letter which goes to the finance minister george osborne that the u.k. is not experiencing deflation yet. we can see that sterling has moved up sharply on that news. let's have a listen in now. >> a letter from the governor to a chancellor explaining why inflation is so low and what the mpc is going to do about it. i'll likely have to write a few more before the year is out but as unusual as all that is its arguably not the main story the headlines mask stronger underlying dynamics. growth in the global economy was a touch stronger last year than we had expected in november and the outlook for the u.k.'s trading partners is virtually unchanged since our last forecast forecast. despite renewed head winds modest global growth is expected to continue reflecting three
factors. first, oil prices have halved since six months ago as these falls are more likely to reflect changes to actual and potential supply of crude than the reductions in the demand for it this development is positive for the global economy. second central banks around the world provided additional stimulus. most notably recent ecb actions should provide much needed support to our largest trading partner. third, partly as a consequence, global real interest rates have fallen further and notwithstanding recent increases in market volatility financial conditions have improved on balance. in the united kingdom output growth remains solid and domestic demand growth robust. unemployment has continued to fall reaching the lowest level for more than six years with half a new jobs created. >> that was the mark carney
saying the central bank stands ready to act if necessary including cutting rate ifs needed. >> despite the prospect of falling prices the u.k. is not in deflation which has been a big concern for investors. let's look at how markets are reacting. u.s. futures are higher across the board today. the big market mover is the news that russia and ukraine agreed to end fighting in ukraine. the ceasefire will commence on february 15th. that's this sunday. successful they gauche wragss taking place in minsk with president of ukraine as well as russian president vladimir putin. the nasdaq which has been out performing over the past coup of days thanks to apple up about 21 points in premarket. take a look at apple because it did close at a new high in yesterday's trade at $124 giving
it a market value of $727 billion but more relevant is that it's up now better than 13% year to date. so some big moves in shares of apple and despite the out performance in apple some analysts say it's under valued. a run could continue. carl icon says it's worth $216 a share which would give it a market cap of $1.3 trillion. he was watching our show yesterday yesterday. >> and he was right to do so. >> absolutely. we're still talking about greece. the big news there is that negotiations have not come together between greece and it's international creditors but as you can see investors putting greece to the side right now and focused on that news out of russia. russia and ukraine agreeing to end fighting in ukraine sending stocks higher.
europe is a big trading partner with russia. this is good news as investors are taking it in stride. the micex index up about 2% but hopes of a deal coming together sent investors into russian stocks. keep in mind year to date up about 30%. earnings, a big part of the discussion here. tesla's 4th quarter loss missing forecasts as deliveries fell short. they blame weather, shipping problems and the stronger dollar. tesla has 10,000 orders for the model s and 20,000 preorders for the sx suv. it's also forecasting sales of 55,000 vehicles this year. on the conference call elon musk sounded optimistic saying based on tesla's growth trajectory the market cap could be the same as apple is today around $700 billion. you can see shares down better than 6% in frankfurt.
let's talk with the auto analyst. thank you for joining us. >> good morning. >> do you think elon musk is overly optimistic? >> that's still quite a long way off. obviously we're bullish on tesla. around a target price of $320 but i think those kind of valuations are still quite a long road to travel. >> george let's dive into the results yesterday. so orders still good but deliveries were poor. >> yes deliveries came in lighter than expected. the company guided around 33,000 for the full year. but they were about 1400 light. the reason for that is tesla recently introduced the 85-d. it was a new model. there were modifications to other parts of the vehicle and that held up production. so the production wasn't done until the last day of the year and once you produce you then have to deliver. they weren't able to get the
vehicles to their customers on time. >> how much of a head wind will china be? recent earnings suggest weakness so far. >> but i think to date china has been a relatively small market for tesla and probably through the course of 2015 it will take time for them to build up momentum there. longer term we think it's still a huge opportunity for them. clearly it's been a great opportunity for premium german makers that have seen huge sales growth in china and the chinese government has a fairly obvious mandate to encourage the reduction of electric vehicles but they've had problems they have to address. >> you're bullish on tesla. what's your topic in u.s. car space? >> our top pick at the moment remains ford where we have a target price of $16 and buy rating but clearly you have seen
momentum shift toward gm who have had improved operating performance during the second half of last year and now activist shareholders getting involved. >> thank you for joining us today. much appreciated. that was george auto analyst at isi group. coming up it's deja vu again. all activity along u.s. ports will be shutdown amid the tense dispute between shippers and union workers. the latest details on the standoff, next.
welcome back. let's talk tech. sis coe's rebound continues as it reported better than expected second quarter profit and revenue. demand for switching equipment and reuters helping the company. cisco also forecasted 3 to 5% in the fourth quarter and also boosted it's dividend by 10%. investors reacting positively to the news. shares were up about 5% in after hours trade while cisco is struggling with weak sales in china growth elsewhere has been strong. >> you'll see countries in europe move faster than the u.s. in terms of digitizing their whole economy. digitizing their business. changing their gdp growth job creation health care and education.
we're in the sweet spot of all of those. >> now operations at several u.s. ports will be mostly closed down this weekend amid an increasingly damaging contract fight between shippers and dock workers. let's get out to landon with all the details from cnbc hq. over to you. >> good morning. shippers are planning a partial shutdown of operations at 29 u.s. west coast ports on four of the next five days. loading and unloading by union dock workers will be suspended today as they were last weekend and again saturday through monday. work will continue in the terminal yards, rail hubs and gates to clear cargo containers at the ports. the organization that represents the shippers says it makes no sense to pay workers higher holiday and weekend rates for the slow down in traffic they blame on the union. ships today and monday would command premium pay in observe vance of separate president day holidays. the union says shippers are engaging in brinkmanship even
after the first contract talk last friday. a spokesman denies that management is stone walling. the two sides say negotiations which are being overseen were set to resume on wednesday but are now moved to today. they handle half of all maritime trade and more than 70% of imports in asia. they have impacted the commercial supply chain for months disrupting shipments of good from manufacturing and transportation and retail sectors. they have been most noticeable on the nation's two busiest cargo hubs. they estimate a full extended shutdown could cost the u.s. economy $2 billion a day and urged president obama to intervene. the white house is monitoring the situation but it's up to the two sides to resolve their differences. wilfred back to you. >> landon thank you very much. >> another story we're watching congress passed the bill to approve the controversial keystone xl pipeline which would
transfer crude to u.s. refineries on the gulf coast. president obama is expected to veto the measure. he wants the state department to complete it's review and make it's own decision on the project. senate majority leader is branding the bill as a jobs bill but senate supporters are still four votes shy of the majority needed to override a presidential veto. >> as we go to break let's remind you of the headlines. leaders agree on a ceasefire deal for ukraine sending russian assets higher. shares of tesla fall after the fourth quarter results missed the mile and renault on a roll as it drives targets higher for the year ahead. chasing performance can mean lower returns and fewer choices in retirement. know that proper allocation could help increase returns so you can enjoy that second home sooner. know the right financial planning can help you save for college and retirement.
we had a weakness at the open surrounding the greece issue we're continuing to struggle to find a compromise in those negotiations but we strengthened out the session in europe in particular because of the news of a ceasefire in russia was' look at the markets now. the russian index is leading the charge. those countries most effected by the sanctions in russia which is a long way from being moved which are benefitting the most across continental europe. germany up 1.7%. the ftse 100 is up .5%. mark carney is speaking following the inflation announcement where he says we're not in deflation yet but the central bank is ready to act if necessary. he's pushing back expectations of a rise in interest rates saying they stand ready to cut
if necessary he cited the weak oil price and situation globally and internationally as some of the reasons for that. let's move on and look at the stock moving the most on the back of the ceasefire. those with big exposure to russia. we have the bank in australia and austria. of course significant operations and breweries in russia. up 5.5%. interesting to look at bp. significant of course exposure. it's only up fractionally and earlier we were talking about the results that disappointed. it was down off that news but is quite significantly up today following that announcement of the ceasefire coming from the talks in minsk. let's look at the rates because they have been moving similarly and the rouble strengthened. it's up .5% at the moment. it was up about a percent earlier but some have been templed after angleela merkel
that there's significant hurdles to get past. >> the russian-ukraine ceasefire boosting sentiment in europe and that is feeding through to wall street as well. if you take a look at the premarket trade for u.s. futures. s&p 500 indicating a higher open by 12 points. the dow jones industry ultimately 100 points in premarket trade. the nasdaq the tech heavy index up 28 points in premarket trade. i want to give you an update on how we traded yesterday. utility is the only average to hit a record high so far this year. given the stronger than expected payrolls report investors have been selling sectors like the utilities on the massive run over the past one year. in terms of where we saw the strength in yesterday's trade, tech algd health care were the days best performers. apple hitting another all time
high closing at a market value of $727 billion. apple up 13% year to date. the tech giant is worth $216 a share which would give it a market cap of $1.3 trillion. so a big move there in apple. right now it closed at $124.88. so we'll keep an eye on apple but of course between russia and ukraine, that seems to be the big market mover this morning. president putin and president poroshenko both agreeing to call a halt to the fighting in eastern ukraine from sunday. that's february 15th. the deal follows marathon talks between the leaders of ukraine, russia, france and germany. the deal means that the withdrawal of heavy weapons and both sides and creating a demilitarized zone in eastern withdrew crane. meanwhile imf managing director christine legarde pledged $40
million for ukraine at a press conference in brussels. julia spoke to her afterwards and asked her if risks would impact the ability of the country. >> it's not without risk. we he believe it is realistic and we are reinforced by our assessment by the determination, appetite for reform by the authorities and by the various stake holders in this dialogue that we've had. you know they have demonstrated their appetite for reform. they have had a physical policy better than we expected. they increased energy prices very courageously. they moved on the exchange rate which was also a taboo. they really want to do it.
we designed the program in such a way that there's enough buffers to accommodate a different situation as it stands. that would be in the interest of the people of ukraine and economic situation. >> how quickly could they receive the first installment? and what conditions would be attached to that in the interim, particularly as the talks are going on as far as peace in the country are concerned? >> the program and negotiations we conducted are independent from the minsk process and while we care this is productive and satisfactory it's independent. i hope to submit the program to the board which has a final say on the program before the end of the month. before the end of february and once that has been approved and a few prior actions completed then we disperse very promptly
and we are known for that rapidity. >> russia and ukraine will continue to be a focal point for investors but let's get you a run down of what to watch on this trading day. there's a lot of it people will be watching. they rose less than expected last week. claims fell to a 14 year low at the end of january. also out at 8:30 we get january retail sales which are forecasted to drop for a 2nd straight month at 10:00 a.m. december inventories are out. as for earnings dr. pepper kellog and manchester united. groupon, king digital and zynga. so let's get out to brian reynolds chief market strategist. brian over here in europe the big market mover has been that russia-ukraine ceasefire which will commence on february 15th.
russia and ukraine did agreeing to end fighting in ukraine. how much do you think that will provide a boost to wall street today? >> well from a humanitarian standpoint this is terrific news. any time you stop fighting that's great. but ukraine hasn't been a big driver. the u.s. credit boom has continued no matter what has happened in the ukraine. it can cause slight ups and downs. it's a slight positive for stocks today. >> so you think you mentioned the u.s. credit boom. is that driving u.s. markets or fundamental growth? >> credit investors are buying bonds hand over fist. it took a little break when the drop in oil started to unnerve the credit market but in the last week as oil tried to put in a short-term bottom the credit market has opened up tremendously and february is off to one of its best starts ever.
>> wouldn't you say that we are seeing fundamental strength in the economy? particularly in employment numbers we have seen over the last couple of weeks? >> we are seeing good payroll growth and that hasn't translated into economic growth. but instead of spending it they seem to be sitting on their wallets. we saw retail sales down in december. they're likely to go down again in january. one of the consequences of that is if you save money instead of spending it it puts downward pressure on interest rates and inflations. >> investors had to keep in focus greece. investors are transfixed around a single question. will they leave the euro zone? how boar ried are you about that? >> i'm not worried at all about that. i think greece is a side show. i called greece the radio shack of europe in that it's a very
very sick country just as radio shack was a very sick company. they have already defaulted. greece and radio shack already defaulted. since the greek default a couple of years ago was a nonevent i would expect further problems to be a nonevent from a macro standpoint even if they leave the eu because it hasn't helped the economy. the unemployment rate is enormous. i can't see why being part of the eu is a real big benefit to them. it's more of a benefit to germany. so at the end of the day, the germans will probably find a way to accommodate the greeks. >> and of course greece and it's international creditors failed to agree on a way forward. now our attention turns to that crisis meeting which will be on monday. we'll leave it there. brian reynolds thank you for your time. >> that's all we've got time for on today's show. thank you very much for watching. i'm wilfred frost. >> i'm seema mody. squawk box is next.
vladimir putin says leaders have agreed to a ceasefire in ukraine and the marks are on the move. the stocks going in opposite directions at this hour. and carl is at it again. he says apple is still way undervalued. he says it should be worth over a trillion dollars right now. it's thursday february 12th 2015 and squawk box begins right now. >> live from new york where business never sleeps this is squawk box.
>> good morning and welcome to squawk box here on cnbc. joe, becky, and andrew they're all on assignment. did you have the winning powerball numbers? i'm going to go out on a limb and say no. but there are three winning tickets out there sold in texas, north carolina and puerto rico. those three people will split the mega prize of $564 million. it has been nearly a year since the pot and the powerball reached the size. last time was $425 million. this is the 5th largest ever in the united states. the record 590 million back in 2013. >> one of the tech guys just threw something against the wall because he didn't have the number. did you hear the crash in the back? >> he has to work the rest of the year. >> there were lines for this powerball. >> i believe it. >> at the gas station. >> we have breaking news out of russia at this