Skip to main content

tv   Worldwide Exchange  CNBC  November 18, 2013 4:00am-6:01am EST

4:00 am
welcome to "worldwide exchange." i'm ross westgate. the headlines today. chinese gets a surge after the ambitious reform plan. the ads, one of the biggest gains in europe. boeing continues to lead the race with over 100 billion
4:01 am
dollars in deals. >> we do it when our customers ask us, but it was a big first day. we're not greedy. we'll see how the rest of the show pans out. >> i prefer to build airplanes and deliver them out this decade. shares in aberdeen so i remembers as the firm becomes the biggest asset manager. >> announcer: you're watching "worldwide exchange" bringing you business news from around the globe. and a very good morning to you and evening to you if you're watching in asia. going to kick off the show, all about china growth. marginally beat expectations, 7.8% in the third quarter beat
4:02 am
by the old china. the challenge for the country is whether it can change its economy to one driven by consumption. it was mapped out by the country's leaders on friday. some of the sweeping reforms included relaxing the one child policy, introducing welfare system reforms to help free movement of labor and encourage urbanization plus stepping up financial reforms to let market forces play a greater role. for more on the changes and controversial one child policy, eunice eun sent us this report. >> reporter: this family can have another child but they don't plan to take advantage. >> reporter: having two children costs too much. it also takes a lot of our energy. if we were to have another child time or money wise, it would be a heavy burden for us. >> reporter: that sentiment
4:03 am
among young chinese is leading many here to believe china's decision to relax the one child policy won't lead to a baby boom. couples can have two children if one of the parents is a single child like the wongs. an experiment was headed up in shonn xi allowing parents to have two children. four years after the first child and get married later than most newlyweds, conditions that occur as society gets richer and lifestyles change as they are in china today. >> translator: the experiment was to ease the family planning commission's concerns. >> reporter: instead, it dropped below the national average of 1 point poip 6 babies per woman. the one child policy has been
4:04 am
criticized for causing a population to age fast which could hamper china's economic future. many see the policy change as a test for a bigger move. >> reporter: fears it's falling will require china to throw it into reverse. >> i won't be surprised that that will be followed by policies to encourage people to have birth like what's happened in japan, south korea, and europe. joining us for more in beijing is eunice. this six point plan got investors excited. they'll create a more competitive environment for things like water, oil, gas, electric, transport. what are the key other market reforms that you've picked at? >> you know, it's funny because of the e.u. chamber of commerce
4:05 am
itself has been very critical of china when it comes to market access issues. even the e.u. chamber of commerce today issued a statement and said that they were very encouraged. at the end of the day we want to see what the implementation of this will be. people were pleased with what they were hearing. the reason for that is -- there are several reasons for it but mainly there were quite a few people encouraged because it looks as though china is willing to allow for a more competitive and fair playing field. that was one of the reasons many europeans had and investors had and the government said it will be reducing the role of the state. they said private enterprises would be allowed to get involved in more state projects.
4:06 am
it would end monopolies in some sectors. the markets will be more involved in the price of water, transport and telecommunications. that in itself was such a big issue in china that there was a lot of encouragement and a lot of champaign bottles being popped in this neck of the woods. >> yeah, what is interesting is that proposals on the role of state-owned firms is rather thin. yes, they'll al lay firms to compete more, but if you're still going to have state-owned firms with the same amount of power, one wonders how level the playing field might actually be. >> right. well, i mean, at the same time they make it very clear that this is going to be slow going. i don't know if you remember last week the original statement had said that the state is still going to play an important role. at the same time, even though the state's going to play an important role, we are seeing quite a bit of commentary that
4:07 am
the state will be able to -- that the government will reduce the role of the state. on top of that, there were a lot of changes to the financial sector that people were excited about. the fact that when the government had talked about the markets being -- having a more decisive role in the way that this economy works in the financial sector, they were talking about how markets would be playing a role in setting of interest rates as well as the way the foreign exchange rate is valued. so there was a lot of reason why people were seeing and excited about what they were hearing but at the end of the day, again, what we are still waiting for is how all of this is going to be implemented. >> and that is the key point, eunice, implementation is everything. thanks very much for that. more to come from you in this. miranda carr, head of china research at the nsbo on the phone also from beijing. miranda, good to speak to you. do you think equity investors
4:08 am
have got a little ahead of themselves today or not? >> i think this is a long -- long-awaited reaction. there was an awful lot of skepticism on tuesday because there wasn't all of the details. now we're seeing quite a lot of commitment and it is this shift as eunice was saying to the market based system to the economy. that was mentioned in the communique but now i think people can see the pathway to actually achieving that. >> there were some contradictions which would draw in more funds. >> yes. a lot of these reforms are actually potentially quite
4:09 am
destabilizing. this is why it may come quite slowly. yes, if you ease up on the capital controls then people fear investors. one of the problems with investing in china is you're investing in the property market. this is a multi-level financial system putting more bond market investment and that means that you can actually have more investment not just in either the twin property or equity markets. >> where do you see the biggest growth of the private sector with these? there's private banks. >> private banks, they're into consumer financing. it's banks that could set up and
4:10 am
as long as you get deposit insurance, which means that people won't be scared of putting their money with the private banks, and so the only thing the consumer financing side could be quite interesting. the other thing which was marginally overlooked is in the same way the shanghai trading, it means you can invest in a lot of logistics and services sectors much more freely. that's potentially going to be expanded nationwide. a lot of that is private sector. it's open to foreigners. it's going to be open to the private sector and not just sort of dominated by the state in the first place. that's potentially -- there's no resistance to reform there. that possibly has the biggest up side because china needs better
4:11 am
services and you don't have any of these sort of nasty issues about vested interests and existing systems. >> miranda, good to speak to you as always. miranda carr from beijing. let's bring you up to speed with how the rest of the markets in asia. >> thank you, ross. largely positive in asia with china shares leading beijing after they promised a slew of economic reforms. financials, all majors, many beneficiaries were broadly higher. the shanghai composite jumped almost to 3% today. the hang seng index added 2.7 perce%. japan's nikkei ended about flat. kospi gained a quarter of a
4:12 am
percent. australian shares lost .3% dragged lower by blue chip stocks. also notable is a and z banks went on in the free trade zone. shares ended in the red. as for the outperformers. chinese formula performers went up after chinese said they would loosen the one baby policy. some individual stocks we watched in japan. sony sells 1 million play station 4 units in the first 24 hours in the united states and canada. meanwhile, teppco stepped up restructuring to win more government aid. planning to shed 1,000 jobs and selling off old fossil fuel plants. shares ended higher by a
4:13 am
modest .2%. that's a look at asian markets, back to you, ross. >> thank you. here's how we stand in europe. around 6 to 3 decliners outpacing advancers. we're down on the market. the ftse 100 down 14 points last week despite the fact that we had six weeks of gains. the s&p and the dow. the foottse 100 is down. a number of individual stocks worth pointing out. aberdeen asset management struck a deal to buy lloyd's banking group funds management. the investment partnership. the transaction valued at 660 million pounds makes aberdeen the biggest listed fund manager in europe. the stock is up 12%. lloyds also up nearly about 8%
4:14 am
as well. petrofac. this is the u.k. energy services group warning that it expects flat profits next year. down 14%. they didn't give a specific forecast. eads stock up about 3%. they're bringing in record holders including a $27 million over from the air bus maker. earlier we were told they were confident about the company's plans despite the ongoing competition from boeing. >> we're very pleased with our order book. if you ask me to comment on the 777 order from boeing. we wish them well. what's interesting, all of those airplanes are going to deliver in the next decade and beyond. i'd prefer to build airplanes and deliver them this decade.
4:15 am
they can have 20 years out in the future, i'd prefer this decade. on the bond markets, keep your eyes on u.s. treasury yields. fairly volatile last week. right now 2.7%. we went as high as 2.79. low with a yield of 2.78 on the ten year. on the currency markets the yen is in focus lower against the euro and dollar. right now dollar yen is back down to 99.82 after last year hitting around 183. euro dollar was back over 135 after that slide down to 132.95. and every week cnbc asks you to talk a trend by taking part in our online poll. this week with them back at record highs, we're asking where are you investing?
4:16 am
u.s., european with positive news out of china or none of them. cast your vote. you can have your say on twitter using #traderpoll. also on today's show, we begin our week long tour of emerging europe. the capitol of bucharest. he says he's committed to the european union. are fears of a rising house bubble overrated. we'll speak to the head of the u.k. res depidenctial market to some evidence. capitol hill is holding a hearing on bitcoin. the legal battle is the biggest barrier to further adoption. plus, what's in a seat. figure out why they're battling
4:17 am
it out over length and size. is it the size of the seat or the length of the leg room that matters more when you fly? get in touch with us. e-mail us worldwide@cnbc.com or tweet me @rosswestgate. we'll be right back. hi honey, did you get the toaster cozy? yep. got all the cozies. [ grandma ] with new fedex one rate, i could fill a box and ship it for one flat rate. so i knit until it was full. you'd be crazy not to. is that nana? [ male announcer ] fedex one rate. simple, flat rate shipping with the reliability of fedex. that's mine. ♪ that's mine. ♪ that's mine. ♪ come on, kyle. ♪ [ horn honks ] that's mine...kyle.
4:18 am
[ male announcer ] revenge is best served with 272 horses. now get the best offers of the season. current lessees with an expiring lease get this 2014 ats for around $299 a month. ♪ because what you don't know, can hurt you.urance. what if you didn't know that posting your travel plans online may attract burglars? [woman] off to hawaii! what if you didn't know that as the price of gold rises, so should the coverage on your jewelry? [prospector] ahh! what if you didn't know that kitty litter can help you out of a slippery situation? the more you know, the better you can plan for what's ahead. talk to farmers and get smarter about your insurance. ♪ we are farmers bum - pa - dum, bum - bum - bum - bum♪ you can fill that box and pay one flat rate. i didn't know the coal thing was real. it's very real... david rivera. rivera, david. [ male announcer ] fedex one rate. simple, flat rate shipping with the reliability of fedex.
4:19 am
4:20 am
>> announcer: you're watching "worldwide exchange." silvio berlusconi said he may not back the prime minister but admits he doesn't have the numbers to bring down the government. the media mogul launched his center right pdl party under its original name after a group led by the interior minister broke away to form a new faction. they say they will remain in office and support the country's fragile commission. angela merkel will enter the final stage of talks this weekend forming a coalition government. both sides have signaled a deal could be reached before november 26th which would give the german chancellor a new government by christmas. it comes as the industrial sector raises concerns about the coalition undermining the german economy.
4:21 am
on sunday the country's car giants warned they would consider moving production elsewhere if business conditions worsened. yes, this week we're traveling all across emerging europe. today it's monday which means karen is in bucharest. attention increasingly turns to some of the emerging economies. let's get out to you, karen, in the romanian capitol. right. how would you describe their economic situation? >> it's been a volatile story, ross. if you cast your mind back to 2000, this is an economy that was described as one that was growing so rapidly because it's trying to catch up to the western part of europe. we saw very strong growth rates here, average above 6%. so much hot money flooding into the country that romania didn't
4:22 am
restructure some of the loans. the country thought it was the heydays that would continue but then the financial crisis hit which meant a lot of the money flooded out of the company. there's a stable growth rate. this year romania is likely to close out the year with growth over 2%. the romanian prime minister, could he put his hand on his heart and vouch for the banking system in romania. he said, that's so much of of a joke. we didn't have to bail out any of these banks. there's deleveraging taking place. take a listen to what he had to say. >> i think that not only romania but europe still has the same problem, the lack of credit. the banks are much more reluctant to give credit. a lot of them, they are trying to clean up their bad loans and right now it's very difficult especially for the private
4:23 am
sector in romania to have success to the banking credit. that's why we are trying to use the in flow of the european funds and also the government is not using all the national banking system for the government bond. we are going on the united states market or some other markets in order to leave all the cash credit for the private sector. but it's still -- the recovery is still not yet enough. >> let's discuss the banking sector in romania a little bit further. we'll join the ceo of bcr bank. your bank is a great example of what i'm talking about. you're a majority owned by austria's bank. tell us how committed they are to bcr and to the exposure in romania. >> i think they are extremely committed to romania. if you look at the story, it's a
4:24 am
simple story. the bank i manage was bought for 10.7 billion euro. it generated profit of about 1.5 billion euro since 2007 and the shareholders had taken out 900 -- 900 million, have put in more than 2 billion euro in fresh capital. so they're committed to romania and romania represents a corner stone in the strategy of a group which wants to be a group between frankfurt and moscow. this country is a pivotal place for us. >> i think that shows how archaic it was. let's talk about the toxic shock in romania. what's on your own balance sheet and how much is this holding you back. >> we have a balance sheet of 16 billion euro.
4:25 am
the portfolio constitutes 11 billion and under ifs we have close to 29% of mpls. we have set up an internal bank since i came in 18 months ago that deals with the mpls. we try to remediate, restructure, recover and manage distressed assets. this year is the first year that we have actually arrested the in flow of mpls and we have recovered about 10% of the portfolio. so our outlook is that in the next five years we will be able to disassemble the mpl issue. what also has to be understood about romania, that the accounting treatment here is somewhat different so the mpl balances are overstated in my view about 20% due to different treatment of writeoffs and financial derecognition of mpls. the story is better.
4:26 am
>> how can some of the concerns be addressed? because if you look at the amount of loans, swiss franks i hear is about 10% of some of the loans issued in the heyday. look at other countries like hungary. i gather those loans are no longer being issued anymore. >> most of the foreign currency loans have been done in euro, small part in swiss franks. when we started with restructuring and change of the business model we had actually stopped foreign currency lending to retail entirely as of october 2012. so we were the -- as the largest bank we were the first bank to say enough of this. there's no free lunch and let's educate the market. let's start to change the business model and we are successful at that because our local currency lending registers a very good growth and i believe that the rest of the banking
4:27 am
market is following our policy. >> we heard in the past 24 hours that romanians love to own bricks and mortar, there's a real love affair for property. what does that mean for the housing sector? are prices still falling and are people still -- >> we're like the british. the prices have stabilized. if you look at industrial production, romania has grown 3%. what's remarkable is that the residential construction in the country as of nine months, 2013, has increased 11.4%, which means that many of the residential projects that were started prior to 2009 and left unfinished are actually currently being completed and the equity levels in those projects are increasing as opposed to prior to the crisis if you were a developer and came to a bank, you would essentially receive 100%
4:28 am
financing. in euro, question is how hard euro is these days, but now we see a bit of a turn around. the prices have stabilized. there is actually uptake in prices on high end luxury residential properties and there is stabilization in the mass market. >> thank you so much for your time today explaining the banking situation to us. the ceo of bcr bank. guys, as you can see, there are still some challenges on the credit side and the markets wondering how much the banking system can finance the growth story but nonetheless growth of just over 2% this year is more than you're going to eke out from other nations. >> thanks, karen. you can head online to read more on emerging europe week as well as taking part in our poll. we're asking which country offers the best investment opportunity in the region, hungary, romania or, indeed, poland.
4:29 am
a plane crash in russia has left 50 people dead. the 23-year-old boeing 737 was operated by takastan airlines. among the dead is the president of tartastan. vladimir putin has called for an investigation. also, the enormous scale of humanitarian crisis in the philippines is coming to light. they say 2.5 million people need food and water but only 1/3 are getting it. u.s. seahawk helicopters continue to air lift food into remote areas. the lack of food, supplies, hospitals and drinking water is a problem. nearly 4,000 people have been declared dead from the storm with more than 1,000 still missing. a line of severe storms and tornadoes has also ripped through the u.s. midwest on saturday. on sunday leaving a path of
4:30 am
destruction. at least six people were killed and entire neighborhoods in some illinois towns were flattened by high winds. the national weather service says there may have been up to 40 tornadoes that touched down. the storms affected a dozen states from michigan to new york. they also forced the suspension of the nfl game between the chicago bears and baltimore ravens for nearly two hours. and still to come, we'll be jetting out to dubai for the company's biannual air show which took off with record orders over the weekend. we'll also hear from the president of the american defense contractor raytheon, matt riddle.
4:31 am
4:32 am
4:33 am
>> announcer: you're watching "worldwide exchange" bringing you business news from around the globe. these are the headlines from around the globe. chinese equities surge after beijing releases details of its ambitious reform plan. financial security firms and dairy companies all heading higher. u.s. equities start the week a stone's throw away from the s&p 500 shy of 1500 and the dow close to 16,000. a strong set of orders from the dubai air show. boeing continues to lead the
4:34 am
race with over $100 billion in deals. executives from both companies have been taughting their success. >> we do it when our customers ask us to do it, obviously. it was a big first day. we're not greedy. we'll see how the rest of the show pans out. >> i prefer to build airplanes and deliver them this decade so they can have 20 years out in the future, i'll take the next ten years. shares in aberdeen soar after agreeing to buy scottish widows from lloyds for 660 million pounds. despite the record closes on wall street once again last week, european equities soft, flat. ftse 100, xetra dax and cac is up. we had been up 2.79% one stage
4:35 am
last week. also down to 2.65%. on the currency markets, yen had been weaker. back below 100. we fail to maintain a break above dollar/yen. 98.86. euro dollar is a little bit firm just above 1.35. the dubai air show took off over the weekend with the event logging record deals of over $192 billion. our man in dubai, our very own yousuf gamal joins us. yousuf, we'll talk about all the deals being done. i understand you've been getting in on the act yourself. >> reporter: you know what, ross, why not? i mean, the air show is going on. there are plenty of options and for presenters like ourselves where we have extra cash, this is a good opportunity to lock something down. private jets is the other side
4:36 am
of the story. we spoke about commercial jets, there is, of course, the hope that a lot of the sluggish demand from around the world could be offset by demand from this part of the world. industry group gamma estimated that in 2012 the middle east and africa accounted for just 6.1% of the global jet market. they're hoping to tap this region's potential. i went around and had a look and here's what i found. $60 million, this is the gulf stream g 5 50. space for up to 19 passengers and for an additional $2 million you can get this elite package which also includes control from your apple device with an application. you can simply put down the shades. here we go. range here, 7,700 miles. that's enough to get from you jfk to dubai or london to singapore.
4:37 am
>> we're seeing tremendous demand for long range aircraft. we're doing extremely well in the middle east. the g 650 has proved to be incredibly popular as well as g 550 so demand is good. >> another major manufacturer is bombardier. this is very similar to the g 550 but here you get 13 square feet more of cabin floor space, height, also a little bit more accommodating at 63 right right. range is 7,000 miles. that's still enough to get you to most exotic markets. average variable cost per hour is also slightly higher at $5,500. >> you come to 8,000 you get more range but similar to 6,000 in size. size of the aircraft, range. these two factors to get the best in the market. >> oh, yeah, it costs over $35,000 to fill one of these up. then you have insurance,
4:38 am
katering, maintenance, security. it may not be the ideal gift for christmas. keep in mind that citigroup spoke last month in a recent report about a lost decade ahead as the market continues to face over supply. what do you think, ownership. >> let's get one outright. it's clearly an improving market. how much is the growth in the middle east helping? >> well, at this point, ross, there are different estimates. all of them have been presented at the air show by some of the manufacturers. there are a lot of other options not just bombardier or air bus. you have many other options, the 7 x which is fuel efficient.
4:39 am
they are painting a bullish picture that growth would accelerate in years to come. if historic data is anything to go by, over the last year and has actually dropped by a tenth of 1% according to industry group gamma. at this point still sluggish output at best but, again, they're hoping they can trump up the picture a little bit and make the most of it. >> yousuf, good stuff. thanks for that. we'll allow you to get your breath back after that high flying. we'll catch you a little bit later. meanwhile, more trouble in the air for boeing 787s at japanese carrier ana. they replaced a battery charger after detecting an error during maintenance. we have more from tokyo. >> hi. the problem with the 787
4:40 am
dreamliner was discovered last saturday following the round trip between tokyo and taipei. an instrument in the cockpit indicated an error. the charger was replaced and the aircraft was going to fly without problems. naa isn't the only carrier reporting problems with boeing's 787 dreamliner. two weeks ago there was a problem on a flight from helsinki to tokyo. another 787 flying from tokyo to san diego showed problems with the braking system and had to return to tokyo. carriers are extra sensitive with any problems with 787s. the incidents led to a fall of $50 million in naa's operating profit while the other shares why down $26 million. back to you, ross. >> thanks very much indeed for
4:41 am
that. we have some notes out from the bank of england. they say the systemic risk survey. a sharp increase of u.s. sovereign risk. high impact of u.k. financial systems have fallen and the survey suggests there's a fairly fair degree of confidence and stability of the financial system. that's seeing a rise. there are also some fears over the fast return of rates to normal levels and rising fierea about the environment and rising real estate risks. the real estate risks we are going to get into coming up fairly shortly. if you have any thoughts, of course, on that, you can e-mail us worldwide on cnbc. british house pricing fell in november month over month. will that let some of the air out of the bubble around the british property? we'll get into that as soon as we come back.
4:42 am
4:43 am
4:44 am
>> announcer: you're watching "worldwide exchange." reminder of what's on the
4:45 am
agenda tomorrow. more clues on the market. in china, daim ler is expected to sign a new deal with daic. sony sold more than 1 million game stations when it launched on friday. it's selling in europe and in america on november 29th. sony aims to sell more than 5 million units in march. some consumers claimed that their ps 4 didn't work as expected. they say they're investigating but they believe the problem is isolated. apple has bought israeli chip maker. it has motion sensor technology in connect. 9 to 5 mac block says
4:46 am
they're using the ibeacon technolo technology. apple stores will install transmitters. you have to turn off the alerts if you choose. apple stock is down markedly. the former chairman has been recorded on video in an alleged drug deal. they've apologized after he reported he bought and used illegal drugs after reporting for a committee from the u.k. joining us is hetta, our u.k. business editor. just another can bad day for the
4:47 am
co-op. >> could it get worse? this is a banking institution overseen by a group that has claimed to be a different kind of institution -- financial institution, meanwhile in the last year and a half six or seven chief executives are gone, the two chair men have gone, the finance director is gone, been hit with misselling. had a 1.5 billion pound capital black hole that's forced their restructuring and all of the time people at the bank have been saying, well, actually, what we're worried about is the u.s. hedge funds coming again and disturbing the image of the co-op bank which has been built on the tenants of ethical behavior. where are these ethical behaviors. we haven't seen them. >> they never brought over
4:48 am
trinnia. >> i looked at bbc. the reverend was seen handing over 300 pounds. we don't know how much he was buying, that's quite right. you do worry about -- >> allegedly. >> allegedly buying. you do worry about it. the issue is the way the co-op was run, its members were elected to the board and that's including the board of the the reverend was elected chairman of the bank by the members. now it's under review. how is this possible? we have a system where people don't have the industry knowledge. that's quite key. the key for today's issue is if they didn't have the industry knowledge, we were at least hoping to have the moral fortitude to buy the bank. as you're seeing from things like what the sca hit in terms of the pbi selling, the bank
4:49 am
hasn't been doing its duty by customers. >> okay. stay there, helia. we'll turn our attention to part of the industry. you should be interested in this, the u.k. housing market. the dubai scheme has failed to halt the usual precursors. property websites say the fears are over blown. comments are coming as they step up pressure. talking to george osbourne on the exit plan. joining us for more is the head of research. thank you for joining us. looking at your forecast at the beginning of the year, you were talking about london being pretty flat. elsewhere house prices rise when incomes are falling and mortgage
4:50 am
market access was still limited to the equity rich. he were forecasting a minus .2% drop. how things have changed. >> absolutely. they came out with a multi-billion drop. you've seen that have affect on house building levels. second part came in early, october. the mortgage guarantee, 12 billion pounds came in to shore up the market and to allow them the opportunity to do so. we didn't see that coming in january, i'm afraid. >> of that second phase, david cameron announced last week being accepted for mortgages. only ten up to now have been completed. the actual -- the real impact so far is yet to be felt so is this more of a confidence factor? >> absolutely.
4:51 am
it's not unusual it would be a low number. some of the bigger range of mortgages have been launched. they were expecting it to launch in january. it came a few months early. the confidence it has was really striking. the mortgage guarantee, the lending to first-time buyers that you saw in the mortgage lending figures really rose. people were like, oh, the government has stepped up the market, therefore, maybe it is time for us to take the plunge and buy a home. >> i think one thing to look at, you saw the bank of england governor's inflation index last week, he was talking about risk. they said the house price increase has made affordability much more difficult. i think that's one of the key things you see in today's systemic risk survey from the bank of england, people are more and more concerned about rises
4:52 am
in property prices and what that means for the market. >> yeah. >> although we're getting this kind of consumer bounce and it's economically an uptick, there are seriously concerns about where this is going to go especially if you're talking about increases that could be above 10% next year, across the country and not just in london and the southeast. >> absolutely. you have the disconnect with house prices. house prices outside of london have not been going anywhere very fast. earnings growth has been doing less. it has pushed that house price to the affordability ratio. when you come to take out a mortgage because interest rates are so low, the monthly affordability factor is much better than it was for the financial crisis. you have that disconnect. >> dangerous. interest rates go back up to normal levels people are going to suddenly find they don't have any money to pay for it. >> that's why you have the whole story about stress testing, the lenders being quite cut and dried about this. they are stress testing this.
4:53 am
if interest rates start to rise -- >> do you think the spc will come in and fiddle with it? that's what they're there for now. are they going to use those tools and actually stop 95% lane to value mortgages? the government has gone out of its way to provide 95% loan to value mortgages. >> they could bring down 600,000 limit. they could tweak the charges for lenders to take part in the scheme. >> has the bank of england changed the government policy? >> they have the tools to tweak the scheme as far as i understand. >> they have a window to review it at the moment, but those tweaking powers are really quite serious. if they price the banks out of the market to do that, then the banks won't be doing those mortgages 95%. i don't know if we're seeing any of that. >> it's a fine line between the
4:54 am
bank to respond and a government that has said, this is a democratic elected government saying this is our policy. >> but it was george osbourne who said -- he's given them those powers. >> there's potentially an interesting conflict between the two, isn't there? >> that's the complaint people have -- the concern people have is that mark carney, who is the chancellor's man, remember, the guy the chancellor said was going to be the best central banker of a generation, is he going to actually step up and criticize the flag ship policy for the chosen? he says he will. there are concerns within the mpc whether they're going to be able to do that, if the political will is there. >> thank you for joining us, head of u.k. thank you as well, helia. the dubai air show is into its 24th year. one thing that is notable that whilst the planes are getting bigger, seats have apparently been getting smaller.
4:55 am
>> reporter: for decades the economy class in larger aircraft had nine seats in every row. that meant you had 18 inches of, well, relatively personal space. that is history. the industry has moved towards putting an extra seat in every row leaving you with just 17 inches instead. air bus argues that an additional inch of space helps passengers sleep better. >> what we believe is that for the interests of passenger comfort going much further forward, not just thinking about day to day, but thinking about this long term, is an 18 inch minimum standard should be set for long haul economy sleeping. >> that may be the case. what plane builders do is offer an option to air lines. that is exactly what emirates and other airlines said on some of their a 380s. they added an 11th seat to every
4:56 am
row bringing you back down to 17 inches. another factor is the seat pitch or the amount of leg room you get. here at the boeing and air bus planes as configured by airlines choose a seat pitch that varies between 31 and 35 inches. for a guy my height, 6'7", i fit, but when you try to take down the -- yeah, doesn't work. so if it matters to you before your next flight, make sure you know where your airline stands when it comes to your comfort in economy class. >> yeah. the debate is heating up. we want to hear from you. is it the size of the seat or the length of the leg room that matters more to you? get in touch with us. e-mail us worldwide@cnbc.com or direct to me @rosswestgate. do you think there would be a
4:57 am
significant difference between 17 to 18 inches. number of individual stocks we're focused on. scottish widow's investment partnership transaction valued at 660 million pounds makes aberdeen the biggest listed fund margin now. they want to compete better with those out of the west. petrofac is expecting flat sales. eads flying higher. it's bringing in record orders from the industry including a $27 billion order. still to come, he turned around tesco. now he's turning around another company. we'll hear from herr terry leahy as he turns around british business. you'd be crazy not to. is that nana? [ male announcer ] fedex one rate. simple, flat rate shipping with the reliability of fedex.
4:58 am
because what you don't know, can hurt you.urance. what if you didn't know that posting your travel plans online may attract burglars? [woman] off to hawaii! what if you didn't know that as the price of gold rises, so should the coverage on your jewelry? [prospector] ahh! what if you didn't know that kitty litter can help you out of a slippery situation? the more you know, the better you can plan for what's ahead. talk to farmers and get smarter about your insurance. ♪ we are farmers bum - pa - dum, bum - bum - bum - bum♪
4:59 am
that's mine. ♪ that's mine. ♪ that's mine. ♪ come on, kyle. ♪ [ horn honks ] that's mine...kyle. [ male announcer ] revenge is best served with 272 horses. now get the best offers of the season. current lessees with an expiring lease get this 2014 ats for around $299 a month. ♪ you can fill that box and pay one flat rate. i didn't know the coal thing was real. it's very real... david rivera. rivera, david. [ male announcer ] fedex one rate. simple, flat rate shipping with the reliability of fedex.
5:00 am
this is "worldwide exchange." i'm ross westgate. headlines from around the globe. chinese reform surges. financial security firms all higher. u.s. equities start the week a stone's throw away from big milestones. the dow closing in on the 16,000 and the s&p shy of 1600. eads, one of the biggest gainers in europe on a strong set of orders from the dubai air show. boeing continues to lead the race with over $100 billion in deals. executives from both companies
5:01 am
have been dotti itouting their . >> we do it when our customers ask us to do it, it's been a big first day. we're not greedy. we'll see how the rest of the show pans out. >> i prefer to build airplanes and build them this decade. this he can have 20 years out in the future, i'll take the next ten years. >> shares in ab ber deem so i remember as the firm becomes the world's biggest listed asset manager. they buy lloyds for 660 million pounds. >> announcer: you're watching "worldwide exchange" bringing you business news from around the globe. china's economic agenda for the decade was mapped out by leaders on friday. it came to close in beijing. some of the top sweeping reforms included relaxing the one child
5:02 am
policy. and it encouraged urbanization as well as stepping up financial reforms. joining us for more, eunice is in beijing. eunice, this 60 point plan, so much to look at. what would you pick out as the biggest key deliverable? >> probably the biggest key deliverable would be the fact that the plan suggests that there could be a break up of the state monopolies. that the state will play less of a role and that was one of the reasons why people were very excited that private companies will be able to take part in some state projects. also the fact that there is going to be market oriented pricing. important commodities such as oil along with transport and telecommunications, and finally the third point that people were most excited about would be the fact that we would be seeing some financial deregulation and the fact that we would be able
5:03 am
to see the currency eventually moving to become more convertible. so all of that was getting the markets very excited because the reforms that were unveiled on friday over the weekend really were much more dramatic and fundamental than anybody had hoped. at this stage, ross, we want to see how they're going to be implemented and in what time frame. >> yeah, that's going to be the big thing and how they combine greater competition for the state-owned enterprises when they're not going to slim those down necessarily. the other thing we're looking at is house prices up 9.6% in october according to reuters calculations. this marks a fresh record growth rate and the tenth straight year-on-year increases. data comes as they express an overheated housing market. and an impact on the worlgd's seconds biggest economy. we have land reform and potentially the introduction of
5:04 am
private banks to stimulate more consumer lending. >> that's absolutely right. i know. there's too much there. but it is going to be addressing a lot of different factors. one of the key factors that you brought up was land rights. people have been -- what was really interesting in the state press today is that there were a lot of media organizations that were playing up the fact that we would be seeing more specific details. in fact, one area of the country which is already seeing quite a bit of experimentation in land reform, a province called envoy province. apparently there was a lot of discussion about how we're going to see even more experimentation there where we would see villagers becoming shareholders of the farm land. so just because of the fact that the government from the top was able to unleash these reforms, we're starting to see more details and specifics come out in all of these different places across the country.
5:05 am
>> all right, eunice. thanks. that's the latest from beijing. head to our website for more on china's sweeping reforms. we have the top fives things you need to know. also, is a baby boom beckoning for the country? more on china's controversial one child policy. the study shows that while singapore has more women in the market, there are more in the board room. we also have fresh record closes for the dow and s&p over the weekend and asia markets responding to that news out of china. shanghai closed nearly 3%. let's get more from singapore. >> thank you, ross. it's a very positive session in asia with china shares leading the gains after beijing promised
5:06 am
a slew of economic reforms. many bins beneficiaries of the reform made a rally. the hang seng index added 2.7% and china enterprises jumped a whopping 5.67%. meanwhile, the nikkei ended flat by only a marginal quarter of a percent and australia's asx 200 lose .3%. this is down by 2%. shares ended in the red still. and take a look at reform driven sectors in china. chinese formula makers and baby product makers got a nice boost after they said it would loosen its one child policy.
5:07 am
hong kong listed china's milk producer jumped almost 10%. oil majors also gained ground. giving markets more pricing power in the energy sector could mean price rises and boosts to help these companies earnings. so petrochina today gained by about 5% and simopec rallied over 6%. back to you. >> xisuan, thank you for that. the dow and s&p six weeks of gains at fresh record highs. the s&p just a few points away from the 1800 level. the dow not far away from 16,000. right now futures were about 5 points above it. china just under fair value. european equities, we have the dax at a record high, 9,20 4.
5:08 am
happy days. ftse 100 is up .1. cataract current up 1 poi-- cac quarante up. meanwhile, british leaders are joining ranks with the events in liverpool. it's seen as part of a central part of the rebalancing of the british economy and doubling british exports. the international business festival is here. thanks for joining us. why is this international festival for business so important? why have you thrown your weight behind it? what do you want to achieve? >> this, as you say, part of brittain's changing the shape of its economy.
5:09 am
the government doing less, private sector doing more. also putting more focus on exports but also importantly, although this is a national festival, it's based in the northwest, it's about those parts of the economy outside of london taking the lead. london will be involved but taking the lead. it's a rebalancing in that sense, too. >> this rebalancing, what are we trying to rebalance to? 2/3 of the economy is consumption based. you know this more than anybody working at tesco. what are we trying to rebalance to? we don't want to knock that side of the economy, do we? >> no, we're a service economy. consumption is a big part of our economy. rebalancing in other senses. the government doing less, private sector doing more. when government spends, spends more on the future, infrastructure, r and d,
5:10 am
education, less on current spending. also, expect more leadership from other parts of the u.k. in terms of what the economy does. so we're still going to be a service-based economy. we'd like to have more manufacturing. we'd like to have more exports. i think we've got a good opportunity to do that, but we're not going to overtake services within the economy. >> right now take the g 10, u.k. has the strongest growth, and how would you describe where that growth is feeding through integrated confidence in businesses? are we going to get are you sensing a pickup in investment led growth? are firms seeing a lot of cash going to put it into more machinery or staff? >> it seems so. that seems to be the last piece of the jigsaw, getting business investments. consumer confidence was recovering a bit in 2010 then it was hit hard by the second oil spike and the euro crisis.
5:11 am
again, consumer confidence is coming back. this time you can see business confidence is growing strongly. i think that's important in sustaining the recovery, which really looks well developed. >> are there specific things that can be done? people at the bbc say more funding needs to be put into ukti rather than foreign aid. are there specific things that the government can do to encourage export growth? >> i think the government really should concentrate on the business climate. they've got to balance the books. there's got to be less tax, less spending. they've got to encourage enterprise. less regulation in the country to allow for activity growth. >> do you think business rates -- aside from exports, do you think business rates need to be looked at again? >> i do. yes. i've said this for a long time, business rates are very
5:12 am
old-fashioned tax based on property values. very narrow definition of the economy. if there is to be a business tax base, it needs to be much more broadly spread reflecting the modern economy. it often hits retailers too hard. it doesn't help that sector of the economy. >> is freezing business rates like the labor policy? should the chancellor be following suit there? >> i mean, he's got to look at the overall picture. if you look specifically at business rates, i'd say a reform of business rates really is the priority. >> would you rip it up? >> i'd rip it up. >> what would be the new scheme? >> a new business tax that covers the whole economy, not just the narrow property-based economy. >> just one question, you're chairman of bmm retail. there's a question on whether that's going to float. do you have any early plans or not? >> there are no plans -- public plans for that.
5:13 am
what i can say, the business is doing well. it's an interesting business sector. retail. it's developed in the long recession. i think it will do well through the recovery. everybody likes low prices. >> it seems to be a sector that's booming at the moment. a couple of years ago u.k. retail was seeing the dark days of its cycle. you have pound land, you have dfs. you have a whole slew of ipos that are u.k. consumer retail at the value end. do you think there's going to be enough institutional appetite for all of these offerings including bmm? >> well, i mean, retailing i think is a great example of enterprise in that despite all the pressures, it changes and it comes back and you can see not -- you can not just see the value retailers doing well, but ecommerce retailers doing well, gaining in size coming through doing well as well and the traditional big retailers are adjusting themselves to those changes. so it shows remarkable
5:14 am
resilience. it's highly competitive. largely private. doesn't have handouts. it's a great example of enterprise. >> good to see you today. thank you very much, indeed, for joining us. helia, thank you very much as well. we'll take a break. still to come, struggles in the weak economies. speaking to cnbc, the romanian prime minister says his nation must be willing to join. plus, we'll hope to be joined by tennis great elena starze. see you in a few minutes. we oversee 20% of the world's financial assets. and that gives us scale and insight no one else has. investment management combined with investment servicing. bringing the power of investments to people's lives.
5:15 am
invested in the world. bny mellon.
5:16 am
5:17 am
>> announcer: you're watching worldwide exchange. a recap of the headlines today. europe extends the global market rally. investors cheer china's 60 point political reform platform. and the battle of the skies heats up in dubai with rivals boeing and air bus both benefitting from record orders. if you have a just joined us, welcome to the trading day. they're picking up steam after record closes in the dow and
5:18 am
s&p. the s&p just caught .1% high. it's a couple points away from the 1800 level. the nasdaq is 1.75% above fair market value. equities up a quarter of a percent. the ftse was up. xetra dax is up along with the cac quarante. europe is -- cnbc is traveling through emerging europe this week. poland, hungary, and today it's romania. that's where karen joins us. she's with a tennis great. karen. >> reporter: thanks, ross. let me just tease it up. anything to keep warm here. found a tennis player to help me
5:19 am
up. i want to talk more about the fortunes first up of romania. this is a country that joined the e.u. in 2007. they wanted to take integration the whole way and adopt a single currency back in 2012. that didn't happen. it was pushed out to 2015. they're telling me about integration with the eurozone. >> the eurozone does not need another weak player so that's why first of all we must prepare ourselves and then -- but the political commitment is to join the eurozone. >> interesting. we've been talking about weak plans. found a very strong romanian player here. tennis, the former world number 1 in 1973 to '74 and also winner of the u.s. open. i want to talk about tennis and how this changes the image of romanians.
5:20 am
you have a whole bunch of successful romanian women players. what does this do to see a romanian holding a trophy and displays a strong skill set? >> tennis is not so popular in my country. it was a cycle. before it was much better and now it's the other way. i think she's become number 11 or number 10. >> many of you go on to become ambassadors. prince charles from the u.k. has a home in transylvania. he's held up a good person to explain how strong romania is as a tourism destination. this is your role now. you're the tourism ambassador. you've spoken about infrastructure being a weak link. in what sense do you think it needs to be fixed?
5:21 am
>> it's not very well known. when i was playing all over the place, i tell but nobody believes. now prince charles has a house and they've done a lot of ecological things. romania is a country that needs support from all of the countries because, you know, it's not construction and things like that. you have to come and see it. i say that, nobody believe me. you have to come and see it. prince charles comes here. he did that. >> you are a successful entrepreneur in the past. you've created a radio station, franchises. you've imported luxury goods as well. tell us about the biggest challenge operating as a businessman here in romania. >> it's tough in the beginning because the luxury stuff is not wanted but it's better and
5:22 am
better. >> hugo bass, are people buying the products? >> i don't know. i'm with champaign and things like that. little by little i think it's going to be like the west. i'm hoping that it will be very soon, you know? >> is there much red tape? that's been one of the issues of the communist legacy. there's a lot of bureaucracy. did you find it? >> yeah. people want to go ahead faster. it's slow. now i'm trying to do what i can here. i almost finish it. people like to come here and, you know, bucharest, it's a nice city. it is old town and everybody is trying to do the coffee shops, restaurants. >> i think we've got a bit more time off camera. you can do the two hands. >> overhead. overhead. one hand. >> thank you so much for joining us here. former world number one player in the world, ross.
5:23 am
i'm going to go brush up on some of my tennis skills. >> an absolute legend. i loved his matches with jimmy connors and the banter was absolutely fantastic. i just -- i would have a beer with him or something. get a few stories. i think he's got a few. >> i've got an autograph for you, too. >> that would be cool. thank you very much, indeed, for that. so karen is, as i say, on tour in eastern europe. you can read more on the online poll. we're asking which country offers the best opportunities in the region, hungary, romania or poland. let us know your thoughts. meanwhile, still to come right now, bitcoin continues to hit record highs despite the threat of regulation. how concerned should investors be. we'll see that ahead of today's u.s. senate hearing.
5:24 am
just by talking to a helmet. it grabbed the patient's record before we even picked him up. it found out the doctor we needed was at st. anne's. wiggle your toes. [ driver ] and it got his okay on treatment from miles away. it even pulled strings with the stoplights. my ambulance talks with smoke alarms and pilots and stadiums. but, of course, it's a good listener too. [ female announcer ] today cisco is connecting the internet of everything. so everything works like never before. that's a good thing, but it doesn't cover everything.
5:25 am
only about 80% of your part b medical expenses. the rest is up to you. so consider an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company. like all standardized medicare supplement insurance plans, they could save you in out-of-pocket medical costs. call today to request a free decision guide. with these types of plans, you'll be able to visit any doctor or hospital that accepts medicare patients... plus, there are no networks, and virtually no referrals needed. join the millions who have already enrolled in the only medicare supplement insurance plans endorsed by aarp... and provided by unitedhealthcare insurance company, which has over 30 years of experience behind it. with all the good years ahead, look for the experience and commitment to go the distance with you. call now to request your free decision guide.
5:26 am
the currency is going to be thrust into a spotlight when the policy makers are discussing bit cohn at the senate homeland security committee today. monday investors are continuing to be detracted by the digital currency despite the potential for regulation of the markets.
5:27 am
joining us, we have the founder of macro digest.com. good to see you. >> thank you very much. >> you've made the point, look, alternative currencies like bitcoin are nothing new. history says they won't fail. what are the risks with bitcoin? >> there are three risks, first, that something more technically advanced comes. regulatory is something that's obviously in focus today, but regulatory risks for alternative currencies generally are not the main problem because the big issue is that frankly people eventually decide not to use them any longer. they cease to gain traction. >> demand wanes? >> exactly. they're usually introduced for some kind of reason. the advantages of an alternative
5:28 am
currency dissipate. >> you say bitcoin does have some advantages over previous alternative currencies? what are they. >> it's frictionless. usually alternative currencies are local, tied to a region. the fact that bitcoin has a global brand is something we've never seen before. this incredible marketing behind bitcoin is innovative. it's decentralized nature. that's relatively unique. usually alternative currencies have -- >> does that mean you rate the chances of bitcoin's survival higher? >> i think it makes it certainly more interesting than, say, some things like what we see here in london, the bricks and pound is more similar to alternative currencies. bitcoin is different. it's much harder to know what the future will hold for us. >> this is totally unregulated in a sense. it's a haven for those forces or
5:29 am
people who want to make illegal payments. yeah, you can get money from somewhere that's dubious, buy bitcoins. there's no way of tracking, is there? >> that's a complex discussion. it's more anonymous than, say, using your credit card. that's part of the reason the government is concerned about it because of the concerns about money laundering. what's not being discussed is a potentially bigger threat for bitcoin is as a vehicle for tax evasion. i think governments are more lenient on tolerating money laundering but when it comes to evading taxes, that's where they get worried. >> that's what they will discuss today. >> maybe. >> they need to understand it. if they're missing out in taxes, you're right. so, is bitcoin becoming the alternative currency of choice
5:30 am
or is the rise overdone. for full analysis on the digital currency, please head to cnbc.com. and as you do that, a reminder of the headlines as well. chinese equities surge after beijing releases details of its ambitious reform plan. financial security firms and dairy companies leading the way. u.s. markets start the week a cell phone's thr a stone's throw away from the highs. the eads, one of the biggest orders. boeing continues to lead the race with over $100 billion in deals. executives from both companies have been taughting their success. >> we do it when our customers ask us to do it, obviously, but it was a big first day. we're not greedy. we'll see how the rest of the show pans out. >> i prefer to build airplanes and deliver them this decade so they can have 20 years out in the future, i'll take the next ten years. plus, still to come,
5:31 am
powerful storms sweep across the midwest into the east leaving a wake of destruction. we'll get the latest on the high winds, rains, and tornadoes. stay tuned. ya know, with new fedex one rate you can fill that box and pay one flat rate. how naughty was he? oh boy... [ male announcer ] fedex one rate. simple, flat rate shipping wi.
5:32 am
5:33 am
the dubai air show has set a new record order with over $192 billion in deals.
5:34 am
airlines have boeing emerging as the main beneficiary. our man in dubai, yousuf joins us for more. yousuf, where is all of this demand coming from? who's driving it? >> well, the people i've spoken to so far are very bullish in terms of the different demands needed from east asia, china in particular and basically serving as a hub between east and west. there are positions to serve as a transit hub. if you have the hub of dubai and even istanbul on the further end competing for that lucrative spot. they remain skeptical that down the line there will be clear oversupply. everybody is building and everybody is buying. when it comes to boeing and air bus, in that initial dog fight,
5:35 am
if you want to call it that, boeing clearly deciding the first round for itself with the sale of some $100 billion in aircraft that were orders by -- rather, by qatar and also emirates airlines. the largest order in its history for 150 777 xs. i spoke to the president of boeing international, shepherd hill, and here's what he had to say on what was clearly a good sale. >> we have a total on launch of 777 x of 259 which included orders from looftons so we don't anticipate more orders but let's see how it pans out. >> many of these airlines will get a substantial discount. we don't know the actual cost. in many cases it could be substantially lower.
5:36 am
an order was placed that basically makes it the largest operator of the boek dreamliner 7 -- boeing dreamliner 787. why would you place an order on such an aircraft when reliability is an issue. here's what shepherd says? >> any time you sell 1,000 aircraft, i wouldn't consider that a weak spot. we've had some issues, we're systematically addressing them. you'll see increased reliability going forward. the key here for the 787 is our customers love it. the flying public loves it. it's efficient. it's effective. the people when they fly in it love the experience. >> as you can see in the background, and here probably, it's getting quite loud. that is finally the air show is actually underway. yesterday we had a sand storm. finally things are taking off. not just the deals. briefly to the other side of the story, that is airbus. they got a bit of a life line,
5:37 am
if you will, from emirates. they committed to some 50 as we understand a380s. that, of course, their first real break when it comes to a380 sales which have been sluggish over the last few months to say the least and also an order for the a380 wide body jet. some feel there could have been more. in any case, what is even clearer is that boeing pretty much topped expectations. if you look at what analysts have been saying beforehand, this exceeded it quite significantly. i spoke to the chief operating officer of airbus, john leahy, and here was his reaction to the boeing sales. >> we're already beating our targets in terms of the order book and we're right on track with deliveries. we've got a book to build of over 2 to 1 right now. we said at the beginning of the
5:38 am
year we'd strive to be above 1 to 1. i think that's pretty impressive results. >> so that was john leahy of course in the ongoing fight between airbus and boeing. there's another heated debate on -- fantastic to hear those engines fly by. lovely. just to get back. when it comes to the width of aircraft seats. now traditionally in the past it's been 17 inches. airbus is calling for 18 inches. what's the real story here? well, i went to figure it all out. >> reporter: for decades the economy class in larger aircraft had nine seats in every row. that meant you had 18 inches of, well, relatively personal space. that is history. the industry has moved towards adding an extra seat in every row leaving you with just 17 inches instead. airbus argues that an additional inch of space helps passengers
5:39 am
sleep better. >> what we believe, for the interest of passenger comfort going much further forward, not just thinking about day-to-day but thinking about this long term, an 18 inch minimum standard should be set for long haul economy class seating. >> that may be the case. what plane builders do is offer it to airlines. that's what emirates and others did on a 380s. they added an 11th seat bringing back down to 17 inches. another factor is seat pitch or the amount of leg room you get. here the boeing and airbus planes as configured by airlines choose a seat pitch that varies between 31 and 35 inches, and for a guy of my height, 6'7", i fit, but when you try to take
5:40 am
down the -- yeah, it doesn't work. >> so if it matters to you before your next flight, make sure you know where your airline stands when it comes to your comfort in economy class. well, ross, now you know what people of my height go through in the back of the plane. i don't know what your thoughts are on this. >> you are probably even too long for a flatbed, are you? flatbeds in business class are only 6 foot. so you don't have enough room even there. >> ross, i can't hear anything you're saying, but maybe that's better. we'll catch up later. >> yeah. how unusual to have airplanes at an air field during an air show. yousuf, thank you. yousuf raised that point. what is more important, the size of the seat or the length of the leg room? somebody's tweeted in
5:41 am
manufacturers mandate a minimum of 24 inches. so far it means very little. seats are getting lighter. maybe they can call for more space. martin's tweeted being 6'2", leg room is paramount. let us know your thoughts. join us, e-mail, worldwide. or tweet me @rosswestgate. now a line of severe storms and tornadoes ripped through the u.s. midwest on sunday leaving a path of destruction. at least six people were killed and entire neighborhoods in some illinois towns were flattened by high winds. the national weather service says there may have been up to 40 tornadoes that touched down. the storms affected a dozen states from michigan to new york. they also forced the suspension of the nfl game between the chicago bears and baltimore ravens for nearly two hours. julie martin joins us from the weather channel with the latest. julie, it's unusually late to
5:42 am
get tornadoes. what's happening now? >> yeah, to get them that far north in november is quite rare, but the good news is all of the severe weather has now moved on. take a look at just the devastating day we saw here. all. red circles you see, those are tornadoes. all of the blue circles you see are reports of severe wind. we had more than 360 reports of damage due to high winds yesterday in addition to those tornadoes. one of which was that killer tornado in illinois. today the storms have moved onto the east though and we do have the severe thunderstorm watch in place. this includes basically the jersey shore, places like philadelphia all the way up through new york city and connecticut this morning. so this goes through 8:00 local time here and we are on the watch for more damaging winds. however, that severe threat has now diminished so not expecting anymore tornadoes. certainly some good news there. taking you out to the radar right now, you can see the
5:43 am
storms racing through the east right now. much of the heavier rain is in northern new england right now. still, new york city going to be getting wet throughout the day today. a wet start to this monday morning work week. back to you. >> all right, julie. thank you. that's the latest from the weather channel. if you've just joined us, record highs with the s&p and the dow. s&p away from 1800 this morning. futures a fairly flat start for the s&p 500. nasdaq is just a couple of points up. the dow up for six weeks in a row along with the s&p. they pulled it away. they fuldpulled it away as i wa able to say what it was. maybe we can put it back. anyway, the ftse 100 is currently a few points above fair value. the ftse 100 is up, cac quarante
5:44 am
up. what are investors to do at the start of this week? here's a recap from some guests we've had today. the dollar prices are very interesting. what probably happens, it's aggressively soon and yellen's mandates, i think the market can wait until march. that will keep the dollar on the back foot. i think the dollar yen is a little bit stretched. i think that one might come back. >> all cyclical starts in the eurozone, i think it's a very good play on everything we would buy from this level. >> i prefer europe and i prefer emerging markets in u.s. yields and spreads are really tight. emerging markets are close to a crunch environment with mpls,
5:45 am
bad loans rising and china trying to contain the emerging markets. a buy in bonds. and still to come, timothy geithner's been out of a job since january, but the former u.s. treasury secretary is ready to get back to work. we'll have details on the new addition to his resume coming up. 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.
5:46 am
5:47 am
you can fill that box and pay one flat rate. how naughty was he? oh boy... [ male announcer ] fedex one rate. simple, flat rate shipping wi. stick with innovation. stick with power. stick with technology. get the flexcare platinum. new from philips sonicare.
5:48 am
the headlines, there's some news out of paris. a gunman has opened fire inside the paris newspaper. one man has been seriously injured after gunman has opened fire inside the paris office of the newspaper. we'll keep you updated with the details. a recap of the headlines. european equities extend the rally with u.s. stocks closing in on record levels. investors cheered china's 60 point political program. and the battle of the skies heats up in dubai with rivals boeing and air bus both benefitting from record orders. and timothy geithner has a new gig. the former u.s. treasury secretary has landed a job in
5:49 am
private equity. seema mody joins us from the states. what kind of job? >> timothy geithner will be joining as the planning and managing director of warbuck. he'll be working on strategy, investing, organizational and funding structure as well as investor relations. the company declined to comment on how much geithner will be paid. in a statement he said they appealed to him because of the firm's global strategy and his experience. he spent the majority of his career in government. he started out in kissinger and associates. in 1988 he joined the international affairs division
5:50 am
of the treasury department. from 1998 to 2001 he was under secretary for international affairs under rubin and larry summers. in 2001 he left them to be director of international monetary fund. in 2006 he became a member of the washington based advisory body. in 2008 geithner arranged the rescue and sale of bear stearns and later played a key supporting role to treasury secretary hank paulson in deciding to bail out a.i.g. but not lehman brothers. geithner was nominated to succeed paulson and was confirmed and sworn in two months later. geithner was the last of obama's original economic team to step down. he's been credited with preventing the economy from spiraling. on the last day of treasury geithner defended his role in bailing out big banks. he told the associated press he
5:51 am
would never be able to win over all of his critics. since leaving office geithner has signed a deal to write a behind the scenes book about the response to the financial crisis. joined the council on foreign relations and has given a series of speeches. ross. >> all right. thank you. we'll follow the next stage of his career with interest. seema, for now, have a good day. still to come, the dow and s&p 500 have lofty levels in their sights. will anything get in the way of this santa claus rally. we'll head to the cme for insight after this. [ male announcer ] this store knows how to handle a saturday crowd.
5:52 am
♪ [ male announcer ] the parking lot helps by letting us know who's coming. the carts keep everyone on the right track. the power tools introduce themselves. all the bits and bulbs keep themselves stocked. and the doors even handle the checkout so we can work on that thing that's stuck in the thing. [ female announcer ] today, cisco is connecting the internet of everything. so everyone goes home happy. mine was earned orbiting the moon in 1971.
5:53 am
afghanistan in 2009. on the u.s.s. saratoga in 1982. [ male announcer ] once it's earned, usaa auto insurance is often handed down from generation to generation because it offers a superior level of protection and because usaa's commitment to serve current and former military members and their families is without equal. begin your legacy. get an auto insurance quote. usaa. we know what it means to serve.
5:54 am
how would you describe the
5:55 am
volumes of the stock? is. >> it still has the feeling that there aren't a whole lot of believers. as a contrarian, i view that as a positive sign, that we haven't seen a piling in yet. when people's mentalities start to change and people start to talk about the bullish market instead of talking about why the market shouldn't be here, that's when i'll be a little bit more concerned. the hand wringing by everyone out there because people still don't believe in the trend. >> what's the chance of farm managers trailing their benchmarks and adding to it in the next few weeks? >> well, there are some people now that have some performance problems financially from what's been happening this year. it will be interesting to see what happens, but you're talking, what, 25% here in the s&p. you know, these are outstanding gains. so, you know, you see the vix here this last week went below 12. that's the first time we went
5:56 am
below 12 in the vix. there's still more down side. if you look at it, the 2007 low in the vix went below 10. we have another 15 or 20% to equivalate there as far as the vix making lows and the markets making highs. >> is there anything else out there that you can see that might knock us off track. >> there's always storm clouds on the horizon. it always remains sunny in the big picture. we've overcome each and every obstacle in the last four years. talking about big, big issues. the market inherently has an internal strength. it's all about earnings. the earnings season is finishing up. we may see a little bit of a lull as we often do making sure we can achieve that. one thing i want to mention as a catalyst, the ecb has one bullet left. you can see how the market reacted last week. it's not how they act, it's how they react. last week we saw it and we're back to 135. 136 means possibly 140.
5:57 am
in the euro currency, that hurts the dollar. >> alan, good to see you. thank you. that's it for "worldwide exchange." coming up, "squawk box." have a profitable day. [ male announcer ] 'tis the season of more. more shopping. more dining out. more traveling. and along with it, more identity theft. every time you pull out your credit card, shop online, or hit the road, you give thieves a chance to ruin your holiday. you can't be on the lookout 24/7. but lifelock can. protecting your identity, your bank accounts, even the equity in your home.
5:58 am
when lifelock detects a threat to your identity within their network, they'll alert you by text, phone, or e-mail, protecting you before the damage can be done. act now and we'll protect you 60 days risk free. no one protects you better than lifelock. try lifelock protection 60 days risk free and get a special holiday gift -- a document shredder. a $29 value free. ♪ ♪
5:59 am
6:00 am
traders say they're going to be watching both for hints on when the fed may start to taper all thoi given some of the guidance we've seen lately we wonder if we'll get any hints. if you've been watching the futures, the dow futures are up. s&p 500 futures are flat. chinese stocks surged. the bullish sentiment followed news late on friday when the country unveiled reform plans including easing the one child policy and allowing market pricing of key policies. unit

169 Views

info Stream Only

Uploaded by TV Archive on