Transcripts For CNBC Worldwide Exchange 20140819

President obama justifies actions saying time is up in mosul. Today, with our support, iraqi and Kurdish Forces took a major step forward by recapturing the largest dam in iraq near the city of mosul. And authorities in missouri say police came under heavy gunfire overnight as a peaceful demonstration against the shooting of a black teenager turns violent. Announcer youre watching worldwide exchange, bringing you Business News from around the globe. So a very good morning, everybody. Lets talk a little bit about this bhp billiton story. Unlocking value, but for who . Bhp billiton shares as the mining giant announces it will spin off 14 billion worth of assets into a new company to be listed in australia. It comes as bhp posts full year underlying net profits of 13. 5 billion. Thats up 10 on the year. Well, lets catch up now with john wilson. Well speak to him as he comes good. But meanwhile, i want to fill you in on the mollermaersk story. After the shipper delivers a 1 is billion buyback, up 5. 3 . It raised its outlook on the year citing stronger earnings on its shipping business. Earlier on the show, the ceo gave his outlook. The euro has a lot of strength and still has good balance of trade and a lot of export of goods. We have a lot going for us. But i think until we see structural change, more deleveraging, its hard to see really strong growth. But, you know, we just have to trade in the world that is being offered for us and i think there are plenty of opportunities also in a world that is growing a little less fast than you could wish for, in particular if youre european. So lets have a look at the European Markets and give you a sense of how the trading session has kicked off. Were very early on in the day, obviously, but the stoxx europe 600 is well into the positive ledger at the moment. Were up nearly 0. 5 at this stage. Lets look at the wall and have a look at how that breaks down in terms of the individual markets and where the strength is. The ftse up 0. 4 right now. As we saw yesterday, there is in the German Market at this point, and were 0. 9 the higher on the xetra dax. If you come along with me to have a look at the italian market, this is the key peripheral on our wall at the moment. You can see theres a little bit of pain there, so were off about 0. 1 right now. How does it look for the bond market, then . Are we seeing Much Movement here on the bonds, even as we see buying into the equity . Well, the interesting thing here, as you would anticipate, weve got some movement on the bond prices, not necessarily concerning the momentum that weve got in the equities. But as you can see, these yields are just extraordinary, arent they . Ten year. You give your money to the German Government for ten years and what do they give you in return . A measly 11 on t 1 on the yie. Quite frankly, why would you bother unless you are very concerned about the conservation of your cash. Italy, slightly better at 2. 6 . But is italy only 160 basis points safer than germany . Thats the question that the bond investor normally has to ask themselves. As you can see, we continue to have very low yields here as a result largely of the markets view that qe will come in europe at some point. Lets roll it on. Lets have another look at a different asset class. This is where we are in the currency trade at the moment. Euro dollar. The euro just continues to ease away here a little bit amass largely an indication of what we see in the market at this point that the dollar is going to get stronger and the euro is going to continue to get weaker here. Has the pound have the best of it . Weve done nothing by back away from the 1. 70 mark on the cable cross. If you want to talk about any of these, get in touch with us this morning. Well pick it up. Dollar yen, were not really going anywhere in a hurry, are we . But weve got some interesting stories out there and not least those that might affect the Australian Dollar with bhp billiton. Out to skree in singapore with a round up of some of these stories. Thank you very much, geoff. The markets are wrapping up the trading day and it has a riskon type of session despite the fact that the calculus with regard to ukraine and the geopolitics hasnt changed radically. Nonetheless, the markets and investors do seem to think that the geopolitical risks are receding and that is why we are seeing more money heading into our regional equities. The nikkei 225 closing off at a twoweek high will help the market was the data stateside, the numbers on the Housing Market, that helped and a softer yen helped, as well. One of our stockspecific stories that weve been following closely today involved sky mark airlines. The top gainer in tokyo gaining 28 today. Thats after the nikkei business reported that air asia may be seeking control for japans Third Largest carrier. But air asia Tony Fernandez was emphatic on twitter. He poured a big bucket of cold water amid the speculation calling that rubbish and saying the company is focused on a Budget Airline that hes stepping up with japanese partners, but not sky mark. So broadly, geoff, we are seeing a risk on as an appetite for equities in this region. But its locum vikz buying that we are seeing. That is how i would characterize it. Its low energy and melt up in these markets. A lot of caution in the minds of investors as we head towards the fomc minutes. Janet yellens address at jackson hole is now very important, timeline and for our markets, weve got data out later on this week on thursday, the flash pmi numbers from china. Thats where we stand. Back to you now. Sri, lovelily. Thanks very much indeed for that. As we leave the asian markets, there are those who think that europe is going to become increasingly like japan was several years ago. Stewart richardson, nice to see you this morning. Stewart is with us for an rng. Stay with us. You might want to get involved in this next conversation. There are those who are a littlup set about bhp billtons announcement this morning. They told us assets will be poured into a new Company Listed in australia. Andrew mackenzy said options for its earning capital to investors are opening up. As a competition, we will be intense and get more intense than i believe as a consequence of that. Capital bhp and bhp billiton will rise and we will have more options with regard to distribution to shareholders. All well and good, but why has the share price been falling . John joins us on the line from brisba brisbane. John, what are the shareholders not getting from this announcement that they needed . I think one of the things they didnt get and was anticipated as it turned out incorrectly was a Share Buyback. There was an expectation. And i think to some extent, it was promote d by the company or that was what appears to be the case. And these statement about were looking into it in the future is something thats pretty hard to quantify, identify, and get your head around. Its all very well to say were going to do something about it. I have whittled out that shareholders would rightly appreciate it, saying this is what were going to do. Were going to do it now and this is how its going to impact upon shareholders, but that didnt happen. But listen, the shares, i bought them because i believe that this is a business that is going to do better from here that ultimately the economy will support growth in bhp billiton. Is that spinning some of the assets off into a new company that i get to own as an existing shareholder, shouldnt i be happy about that, that management is focused on efficiency and generating higher return in an industry i already want to own . Sure. I think that is a different issue. And i dont think anyone has any negative thoughts about that, except that it is the weaker side of bhp. But they havent made any suggestion that thats not the case and that they are harding off areas which are not their core assets. However, there is a bit of negativity that comes with the spinoff, as well, and in the dmrako press here, that concern is about the people they have nominated or speculation that people who have chosen to run the new company. Now, weve got the ceo and the new ceo and the new cfo, both of whom have finance backgrounds, which is great, and no one is suggesting that they dont have the qualifications needed as part of a team. But what has been hard out here is that its an absence of operational people with mining experience. Now, that can be refuted, of course, by saying thats only part of a team and it really depends on who the talk to people. Who they enlist as part of the team to run a new company. Lets get some more questions in here, stewart. Good morning, john. As follow on from that, what does the Management Team has to put in place maybe in the next one, three, four months especially to get the market to start buying into this new spinoff about a new Corporate Structure . Is there anything in particular the market should be looking for . Well, the time frame thats been announced is the spinoff is not going to occur until sometimes in 2015. They may have been more specific than i am. So they have a bit of time. But what i would like to see, i think would like to see, people in that Management Team who do have the runs on the board with operating these types of businesses which are going to comprise the new capital. And specifically, aluminum, goal, magnesium, nickel and silver. Certainly to have the two things that are quite different, i think, anyway, aluminum is different from the other guys. So you need experience, i think, with aluminum and you also need experience with the other mining businesses. John, its been a pleasure. Thank you for your time, john wilson, private client adviser at rbs morgans. Stewart, why didnt they tell these assets on the open market . Its a good asset. They representative vowel in the existing business, they can be injected into the new operation, why isnt there a trade out there on the market . Its a reshuffling of assets within the sector in the last several years. I think theres been a lot of focus on some of the poorer investments in the last cycle with a lot of Companies Recently taking writedowns and a look at the restructuring. It was incredibly hot two or three years ago. China was pushing demand. With the china story now changing with the socalled rebalancing coming out of beijing, i think this defies that and the marmg of trade buyers would probably be the chinese themselves looking to lock in longterm surprise. So in terms of chinese dynamics, im not quite sure what this story is there. In terms of nonchinese demand, im not sure that that is given the current cycle in the Mining Sector. Just for the sake of disclosier, do you own anything in the Mining Sector . We dont own anything. Why are you in gold miners at the moment . Have you not seen equity markets . The thing about the gold mine, even if you go back a long time, and lets say we go back seven, eight years, the gold price has gone up significantly despite the performance next year, and yet gold miners have gone nowhere. A lot of writeoff in the previous core investment, we know that the underlying possibility is going to get challenged, the gold price is going to go down further. And that will, again, accelerate any further writeoff. In terms of the gold price itself, last year was a poor year for gold price. Gold price res doing relatively well. Featuring most major gold markets, actually. If were featuring gold markets in here, we have geopolitical concerns rising, we have concerns over longterm growth, weve got the yields which are zero everywhere, Holding Growth compared to bonds or a zero yield, theres no give up there. So its relatively good risk reward. If youd like to take stewart on on his gold trade, let us know what you think, world would it worldwide cnbc. Com. cnbcwex. Does google have what it takes to may you another 1,000 . What exactly will 500,000 get you in beijing . And brazils president ial election heats up. The candidates take to prime time tv to make their case. The vote. Can they persuade you toni vest in the verbespa . All that still to come. We started zya with the thought that the kid on the back of the bus might have a song that he has in his head but he just cant get out. With the technology of cloud, we change all that. I can sing something into my device, up to the cloud it goes, back down it comes, sounding better. We break down the walls of creation and we give music creation for the masses. Unlock the creativity in anyone. With the ibm cloud. The ibm cloud is the cloud for business. So were back, everybody. Delivering a 57 jump in underlying profits, persimmon is up 0. 6 . They were, quote, taking advantage of the current Market Opportunities and it is confident about maintaining that momentum. What about the other side of the world . Chinese home prices fell in a record 64 cities in july, including beijing, where price he eased by 1 is on a monthly basis. This as the government tries to calm the Housing Market while maintaining robust growth. Eunice has been taking a look at the situation for home buyers in beijing. Reporter jong lu is the proud owner of a 450 square foot apartment in beijing. The 28yearold webb editor invested her entire life savings and took advantage of easier mortgages in china to buy her new 250,000 home. Its very easy to get a mortgage. Any bank will give one to you, she says. Without one, i wouldnt even think about buying. Jong is one of the firsttime buyers authorities here hope will help prop up chinas flagging Property Market. In beijing and other cities across china, the Housing Market is starting to weaken. Many economists are worried about the impact a housing down turn can have on the entire economy. Chinas Real Estate Market drives growth around the world. The construction fuels prices in commodities. For years, the market was too hot with housing out of reach for most chinese. The government put in restrictions to stop speculators, but now theyre concerned about market could fall too fast and trigger a hard landing. Home prices dropped in july for the third month in a row while sales are sluggish. Beijing recently moved to encourage big banks to step up lending, especially to lower income and first time home buyers. Local authorities are also putting in measures, like tax rebates, encouraging buyers to invest despite falling prices. Sure, there are risks involved, she says, but im a risk taker, risks that chinese authorities hope stay under control. Eunice yoon, cnbc, beijing. Can you still make a turn in the Chinese Market if you can get access to it . Michael is a regional director and head of research for Greater China as jones lang lesalle. Thanks for joining us. Where is there an opportunity to make a buck . I guess it depends how you want to play it. We see opportunities for first time home buyers, really, across china. I think thats really the important story here. The demand picture and the policy regime very much favors the participation of those first time home buyers. To the extent that they represent 55 to 60 of all primary sales, and then you have upgraders which make up another 35 to 40 of transaction volume. So they really do drive the market piece end users. So would you say that the government has been successful, then, in actually driving the speculative money out of this marketplace . Yeah. I mean, the policies the home purchase restrictions started to come into place in 201 1. Our view is that theyve long been quite successful. I dont think they get enough credit for that, actually, to the extent they have marginalized the investor participation in the market. And i think the totality of the policy regime does make the path of least resistance building for and selling to these end users and first time home buyers. But the challenge Going Forward is Getting Developers to move down the income curve, to try to Start Building for people choser to average incomes. And there is a pretty big dropoff there because, you know, really, whats been built thus far is building upper middle class housing. Michael Stewart Richardson in the studio here. On that particular point, when we look at the Housing Available today and we look at, say, the home price to average income ratio, is this too to reach for the vast majority of people . And if thats the case, are we going to see further Price Reductions from the developers which will present the Downside Momentum for the Property Market maybe over the next 6 to 12 months . Is this a big risk, do you think . Right. So i think the issue of affordability can afford what theyre buying. The challenge is how you get development and completion of projects that have positioned lower. And what that means is those are projects further from the citys center so the land price is lower. Unit sizes are smaller so the total Purchase Price is lower. Fittouts that are less extravagant, less branding, fewer amenities. Thats what a project that is positioned lower looks like. Thats how prices on average come down and how you build more affordable housing. So its a question of segmentation. And i think the challenge for the market, the developers and the government is the profitability of building that mass market housing looks very different than what the industry has enjoyed up until this point in time. Michael, its been a pleasure. Thanks for joining us. For more, head to cnbc. Com, policymakers are pinning their hopes on First Time Buyers to prop up chinas property sector. Did you have some . Did you make 1,000 off of google . The company went public ten years ago. At the time, some analysts thought 100 a share price was too high. If they think the stock is around 100 and its going for 85, theres money on the table for the selling shareholders and the company. Taim, when they were talking about a range of 135, they were taking a little bit away from the new shareholders. Good morning, everybody. Bhp to spin off 14 billion worth of assets. But where is the Share Buyback . The stock drops to the bottom of the ftse after the company says monies will be invested into a new company underwhelming investers looking for a payout. Shipper molermaersk launches a buyback on earnings. President obama justifies air strikes in Northern Iraq saying the wolf is at the door in mosul, as a crucial dam is taken from is fighters. Today with our support, the iraqi and Kurdish Forces took a major step forward by recapturing the largest dam in iraq near the city of mosulp. And authorities in missouri saying police came under heavy gunfire last night as the investigation into the shooting of a black teenager turns violent. So a very warm welcome, everybody. Back to worldwide exchange. Just having a little look here for the uk data. Weve got some inflation numbers. Sterling falls after uk inflation data. Lets see if i can actually find the numbers. That might help at this point. Just talk amongst yourself for a moment here. Minus 0. 3 on the month. 1. 6 on the year. I think we were looking for a little better than 1. 6 . Kick jukes has joined us, global head of Foreign Exchange at socgen. We didnt hit the 1. 8 the market was looking for had i here, kit. What does that tell us about the uk economy . The prices fell last month on the back of food and clothing prices. There is velgs Consumer Price inflation, even less wage inflation, not much ppi inflation. And the economy is doing fine. And the question is then, you know, what is carney going to which part is he going to lead us down next . Well, im just having a look at the producer input prices, minus 1. 6 month on month. Minus 7. 3 year on year against expectation. Output prices minus 0. 1 month on month minus 0. 1 year on year. How can you frighten the market with higher Interest Rates in the face of such weak inflationary pressure. Theres nothing to suggest they need to go up, absolutely nothing, no rate growth, no inflation. The economy says nominal growth in 4 , it shouldnt be at and that is being the challenge here in the United States for quite a long time. The challenge for the markets is that mark carney decided to interrupt part of the world cup in brazil to tell us rates might want up this year and it has been moving backwards ever since. We feel collectively the market is being led around the grden a few times now. Youre trying to manage a portfolio of assets. The uk now indicating that there is a disinflationary trend in this cycle. I think we talk about some headwinds and then its talk from some of the elite about the secular stagnation. Whats clear is that theres two or three economies who do pretty well. U. S. Seems to be doing pretty well. And yet there are still no signs of inflation. So this gives the Central Banks room over a long period of time. My fear here is that Central Banks knows as much as kit and i do in terms of theyre giving us a Forward Guidance, they want be as open and transparent as possible, yet they changed direction far too often. So in my mind, what the Central Banks needs to be doing in the uk and the u. S. Is stepping back, letting the market set the price for everything and just say listen, wife done or job. We provided liquidity post the financial crisis, weve put in place certain measures to help the Banking System longer term. Now we have to step back. That means that the market begins to forecast rate rise necessary 2015, so be it. But stop giving the Forward Guidance and changing your mind. Part of the problem here, kit, and we know what it is in reality is the qe is starting to leave a misbehavior in assets. As we talk about this inflation data, weve got the o s number for june for house prices in the uk. The numbers, 10. 2 plus year on year. 10. 4 for may was the previous number. London, 19. 3 year on year. Yeah. And thats part of it. If your job with inflation is just to say i only move it when theres a danger of overheating, which is a bit like saying i only then what youll get is this level where rates are too low relative to the nominal growth rate and we dont know what the longterm consequences are, except that we can see them in bubbly asset markets and we know its dangerous. And when we make investment decisions, we just say, i have to go with it, but i sell off the pound at this pound or buy . Sell. The pound trades 1. 50 to 1. 70 against the doorl. Somewhere in the world cup, mark carney thought it would be higher than that. Its now drifting ever so slowly lower. It will take a bit more of a catalyst to accelerate this because weve had a big move over the last four weeks. Okay. Well come to that in a second. Lets dip back into the European Markets and show you how were trading. Across those markets, we are still in positive territory. Actually, thats given a kicker to the ftse. We showed you the charts as we released all those numbers came through. Weve just picked up modestly about 0. 1 on the ftse to take us up 0. 5 . On the currencies, the impact youd expect on the pound from the weak data. We are at 1 is. 6647 or thereabouts on the cable quote. Weve got an Australian Dollar quote on that, as well. Against theback drop of the Central Banks announcement this morning. What did the rba tell us . Interest rates will remain on hold for the foreseeable future since the companys outlook remains certain. There was a, quote, notable degree of Spare Capacity in the labor market and that the strong aussie dollar will continue to weigh on growth amid signs of weaker economic activity. A Sentiment Survey just said australians are feeling pretty good about where they are even as the central bank is worrying about loan growth and signs back in the labor market. Well, you know, its a question of, you know, variety. The economy has been in a pretty good shape for a long time. United states had a very good run for ten years, compared to the rest of us. So they should be. What the central bank is saying is, you know, the big driver from rebuilding china and buying australian materials to do it has, you know, grown dramatically. Where do we go from here . We dont really know. Thats not whats happening to the dollar on the back of this, is it . No. But at the same time, you have all of these issue about stagnation. Pushing out the idea that the level of Interest Rates, the neutral level of Interest Rates will be even lower than the last number you thought of. Maybe the peak in rates is close to 3 . Thainestbly makes investors around the world say, well, i need to get yield from somewhere. Their eyes shine when they see the aaa. Thats enormous. So the company is overvalued. So you think the aussie dollar goes down. Eventually. All right. Stiert, we talked about your view that europe is looking more like japan by the day. So in this race to the bottom, we have disinflationary pressure in the uk, weve talked about australia and the Central Banks policy. Is europe still the worst house on the block, if you like . I pretty much fear it is. I think the the problem is that draghi two years ago said he would do whatever it takes. And that has brought forward an awful lot of good market news. Yields have collapsed in the last few years. The one thing which he probably doesnt want to continue with is the currency strength when we saw 1. 20 to 1. 40. Since the beginning of the year, hes fallen in the wanting the currency to go down appreciate. Our view is that he will continue to talk the country down with his view that i dont talk about the currency. This is the one Major Central Bank where theyre talking about certain sizes of bazookas yet to be deployed. Of course, they employed a few back in june, and it gets to the point of where we are to next month and then in december. That wont be enough and then well get qe. It sounds like youre not buying europe. Are you doing anything in the days . Very, very pleased . We think the u. S. Yield curve continues to gather. We think the pressure should be going higher over time. The stagnation, the long end appears to be unable to go up, incredibly so. Gold is a good hedge across a diversified portfolio. Within the currency markets, we think the dollar is the one to earn very much a twostep forward one step back at the moment. Were in this situation where growth is not coming through, sterling has been okay, its sustainable and were prone to headlines on the geopolitical side. That may continue. Thank you so much. Lets pick up on some of these geopolitical stories. A fleet of vehicles flying white flags came under attack from rocket fire. The ukrainian president says the separatists have shown little regard for the region. Translator terrorists are temporary residents of these places so we have no ties to them. The worse the situation, the better it is for them. They destroy infrastructure, substations, ridges, enterprises. It is the gilt of militants and their foreign patrons. Wall street is at the door, that was the stark warning from u. S. President barack obama as he called on iraq. It comes after iraqi and Kurdish Forces backed by usair strikes sought to control the mosul dam from fighters. President obama called the operation a strategic victory. Today, with our support, iraqi and Kurdish Forces recaptured the largest dam in iraq near the city of mosul. The mosul dam fell under terrorist control this month and this directly eyed with protecting americans in iraq. If that dam was breached, it could have proven catastrophic, with floods that could have threat bed the lives 06 thousands of militants and endangers our forces in baghdad. They launched an operation early this morning to drive islamic militants out of the creme greek. Ten years ago today, google went public. America third most valuable company has transformed its Business Model from purely online add Revenue Generation to one that now includes smartphones, wearable tech and driverless cars. Josh lipton takes a look at the companys growth trajectory. Google, its not just a company, its a verb. And a lot has changed since the Company First went public. Lets start with the market cap which now exceeds 390 billion. That is greater than microsoft, facebook, oracle or intel. Its nearly twice the market cap of jpmorgan and slightly less than the value of exxon. Investors who poured money into google have enjoyed an incredible return. Shareholders have reached a gain of nearly 1,300 over the past decade. That dwarfs the return to the s p 500 and the nasdaq over the same time period. And that massive stock run up has made googles cofounders very wealthy. Larry page and sergei brin with now worth more than 31 billion each. That puts them both in the worlds top 20 billionaires according to forbes. The Business Model that larry and sergei and eric schmidt have created is maybe not quite as good as the discovery of oil, but up there. I mean, the Online Advertising business that theyve created generates just empties of cash. Google has continued to grow rapidly over the past decade. Its revenues reach 16 billion in the latest quarter. And the company now has more than 52,000 employees. At the core of its business is search. And the advertising generated from those queries. And the numbers on Google Search are massive by any metric. Google processes over 3. 5 billion searches every day and more than 1. 2 trillion per year. And as all of these numbers continue to grow almost daily, there is no question, google wants to remain the worlds destination to access the wealth of information at home, at work, and in an increasing mobile world. Josh lipton, cnbc, silicone valley. Basically, weve got some comments here from Credit Suisse, it appears. This is a developing story. There are suggestions that Credit Suisse put together securities and products that were ultimately sold by an offshore Investment Vehicle or issued by an offshore Investment Vehicle and sold on to Bank Espirito Santo customers and some of those customers werent aware of what was in the bundle. Credit suisse says at no point did it sell to any clients or to the named special purpose vex says the announcement this morning. Credit suisse says it arranged and was involved in the issuance of special purpose vehicles for Banco Espirito san toe. But it did not sell to or advice any clients. Thats the comment that were getting. Just worth bringing that tour your attention as we continue to monitor that story. Still to come on the program, shipping a profit. Moller mollermaersk reported a First Quarter profits ahead of forecasts. We open the container and sort through those nl numbers next. [ woman ] the cadillac summer collection is here. [ male announcer ] during the cadillac summers best event, lease this allnew 2014 cts for around 459 a month or purchase with 0 apr. Hurry in this exceptional offer ends soon. Welcome back, everybody. At 8 30, we go july Housing Starts expected to bring 860,000 Building Permits, forecast to rise 3. 3 , a day after the mahb data showed home Builder Sentiment rose in august to its highest since january. Despite a dropoff in Mortgage Applications. Suggesting an uptick in cash buyers. So were asking you the morning, is a dropoff in Mortgage Applications a sign that Young Americans are being squeezed out of the Property Market . If you want to join the conversation here on worldwide exchange, please get in touch with us by email at worldwide cnbc. Com or via twitter cnbcwex. Shares in molar maerveg up over 5 in early trade after the danish shipper delivered a 1 billion buyback. The Company Reported Second Quarter profits above expectations. And stronger earnings for the year. Earlier on the show, the ceo of mollermaersk gave his expect ages for the year. We have a lot of going for us, but i think until we see structure change, more deleveraging, its hard to see really strong growth. But, you know, we just have to trade in the world that is being offered for us and i think there are plenty of opportunities. Also in a world that is growing a little bit less fast than you could wish for. In particular, if you are european. Lets bring in robert, ahead of european transport and Infrastructure Research at mcquarry group. Robert, it was interesting to see these numbers in the wake of lloyd, which i think current disappointed the market. And we were rabraced for worst figures from molarmaker. But it seems to have delivered at least on the shipping side. Yeah, absolutely. It drove the beat today. He think the execution of quality cost savings going on in the maersk container shipping business. I think the delivery of those vessels is helping to drive the beat and increase their large and differential, including look, Everybody Loves a Share Buyback. And i think that was good management, shareholder expectations by putting that money on the table. What about the next six to 12 months, though . How are they going to fare . I think in terms of the earnings, youll see ongoing consensus coming through and i think the key driver of that will be the container shipping business. Referring back to the 20 large vessels that i spoke of just a moment ago, we believe the real competition from those vessels arrive when the Company Receives between 11 or 12 or both vessels which will be in a month or twos time. So after they have 1 1 or 12, we think the cost savings in that business will accelerate and that will mean that, you happen, the company should deliver very, very solid result for this year. And were expecting growth next year, as well. And how much of that is dependent on the Northern European shipping rates continuing to improve from here . I dont think it really is dependent on that. Asia to europe freight, weve seen it be relatively steady if you average it out over the last three or four quarters or so. Were not seeing any significant improvement in freight rates, just basically a continuation of what you see today. If there was actually improvement in the rate driven by strong which weve seen recently and the ceo of maersk alluded to benefits driven by restocking in q2. Then a. Ation of that strength could provide some upside, which would be incremental on the stock. Robert, thank you very much for that, Robert Joynson with a bullish view on mollermaersk. Attorney general eric holder will travel to missouri to investigate the shooting of unarmed teenager. Reports suggest police fired tear gas and stun grenades at demonstrators. Captain ron johnson says the police were respond to go a small disorderly faction within the group of protesters. Jay gray joins us from ferguson. Jay, lets just pick up with you here. How are things currently . Is there any likelihood that this continuation of protesting goes on . Reporter oh, i think the protests will continue here. In fact, protesters have said theyre not going anywhere, that they want to make sure their voices are heard. Look, its been another rough night on the streets here. At least 31 people arrested, two people injured by gunfire as there was, again, a clash between what is a small group of those protesters and police in riot gear that are on the ground. Tear gas was used. We have smoke canisters that were deployed here. Rocks and bottles being thrown at police officers. So it was just a violent scene that played out as it has most every night since the death of Michael Brown here. You asked about protesters returning. What captain ron johnson who has been charged by the governor to run security here said early this morning was he would love it if protesters could come out and make their voices heard during the Daylight Hours because of what he calls the criminal element here, notice giving them the chance to hide behind the message, to hide in the governor of darkness as we get into the later hours here, jeff. So its a very violent situation, one that seems to be a vicious circle right now. Jay, well wrap up with it, then. Thanks so much for joining us. Jay gray coming to us from ferguson with an update on the latest on the ground there. It all seems relatively quiet for the time being. I dont know whether you saw it, this one has just broken. J. C. Chan, the son of martial arts movie star jackie chan has been arrested for possession of marijuana in beijing. According to police, the 32yearold had 3. 5 ounces of marijuana on him and tested positive for the substance. Chan was detained along with taiwanese movie star kai koe. In 2009, jackie chan was made an antidrug ambassador in china and said his son can make his own way, writing him out of his will. And asias ceo tony per unanimous dez has taken to twitter to say hes not interested in japans sky airlines after reporting the budget carrier was weighing a bid for japans Third Largest carrier. The reports sent skymark surging 28 in tokyo earlier. The two airlines are not in talks according to airasia. Well be back. Good morning to all of you joining us from north america. Bhp bucks the trend, dropping to the bottom of the ftse after the mining giant says it will spin off 14 billion worth of assets. But where is the Share Buyback investors are asking . Missouri Authorities Say police came under, quote, heavy gunfire overnight in ferguson. As the people demonstrate against the shooting of a black teenager turn violent. And ten years on from its blockbuster ipo, we take a closer look at google. Does the company have what it takes to make you another 1,000 . Announcer youre watching worldwide exchange, bringing you Business News from around the globe. Good morning, everybody. If youre just joining us, thanks for tuning into the program. Here is a look at how the markets are fairing ahead of the u. S. Open. As you can see, we have an indication of a relatively positive start to the u. S. Trade here. And a lot of that momentum being driven by the European Markets finally getting out of the gate in reasonably strong form. And the ftse has put on a little bit of weight after we saw some inflation data that was below expectations, to be honest with you. But it did get the pound serlg an opportunity to weaken here and the some of those exporters looking for a little bit of a boost. Germany continues to be the main leader on this european indices, up 0. 9 with the poor old italian mib dragging up the rear at this point. There are some interesting stories in our European Market this morning. Shares of mollermaersk up 5 in early trade after the danish shipper delivered a 1 billion buy back. They raised their outlook for the year citing stronger earnings in the business. It still hats good balance of trade and a lot of exportive industrial goods, so on and so forth. We have a lot going for us. But until we say structure change, more deleveraging, its hard to see really strong growth. But, you know, we just have to trade in the world that is being offered for us and i think there are plenty of opportunities also in a world that is growing less fast than you could wish for, in particular if youre european. Elsewhere, investors in bhp talking about unlocking value. But for who . Bhp billiton shares fall after announcing it will move assets into a new company. Speaking on the analyst call, andrew mackenzy said options for returning capital to investors are opening up. The kovm l competition will be intense. Capital will rise and well have more options as a result in terms of cash flows about distributions to shareholders. The analysts saying the shares are down because they havent announced a Share Buyback as a result of this spinoff. And that was something that was aechted. What is that doing for the Asian Session as those markets step up for the day . Lets get out to sri in singapore. Hi there, geoff. Youve been talking about dbhp in london. Youve seen the share price reaction in your neck of the woods. It was very negative. Yes, second half profit wasnt too bad. It was just shy of forecasts. Disappointment that bhp didnt accompany that demerger with a Share Buyback. And some are drawing the conclusion that perhaps that is because they wanted to keep their dry. They wanted to keep some cash on their Balance Sheet in reserve in Case Commodity Prices do fall even further. So do they know some things that we dont know is the big question. Thats really, i think, at the bottom of this issue and why weve seen so much disappointment. Having said that, the market in sydney closed today higher. Bhp is a big weighting. The stock was up by 1. 4 . So it will be interesting to see tomorrow if we see that negative sentiment from bhp shares and the london listing translate into a bit of an unwind in the bhp shares listed in australia. Elsewhere, geoff, despite the geopolitics, lets face it, they havent change a great deal in terms of the calculus and the risks in iraq and ukraine. But the markets need to be quite sanguin about the risk of these issues. The noishg 225 closing at a twoweek high. But i will hasten to add that this can be a locum vikz buyin probably because of the summer doldrums. Theres a lot of risk to digest this week with fed minutes, jackson hole and a speech at the end of the week locally for our markets. All right, sri. Thanks so much for that. As we roll call some of that data, were looking at Housing Starts in the United States. Andrew berky joins us from op oppenheimer and company. Good morning to you. Is the u. S. Housing Market Holding back the u. S. Recovery right now . Yeah. I think its been one of the more volatile areas, coming out of the early First Quarter we had in growth. We saw a rebound in consumption. We saw the rebound in other areas of spending. But housing has been the one thats been very volatile. I think its likely to step back. One of the biggest surprises is the lower Interest Rates weve seen this year is that mortgage activity hasnt picked up. I dont think they want to do anything to upset that recovery were seeing in the housing side. Can you blow off that lower mortgage approval number on tougher Credit Conditions . The banks are putting applicants through tougher question heirs or is there Something Else behind it . Actually, if you look at some of the recent fed loan data, the standards have started to ease a bit. Its still rather tough. But i think at the end of the day, it gets back to the underlying theme which is jobs and wages. Thats the underlying theme all week as we look ahead to the fed minutes. The bottom line is you need more job growth before youre going to get a real pick up in morning applications that would lead to more housing numbers. Just looking at the broader markets, the u. S. Has clearly had leadership through this recent phase. Some are wondering if were starting to see leadership rotating away from the u. S. In some of the emerging markets. Have you got a view on how much gas is left in the tank for the dow, the s p and the nasdaq from here . You know, certainly from a u. S. Leadership side, if you dig into that leadership, you know, its very cyclical, risk on areas that are leading the market right now. We have transports doing well, the small caps doing well. I think its a good sign that europe is starting to come back. I think over the next six nine months, the u. S. Is still going to be the leadership area. That will be the safer haven as these geopolitical issues flare up. We think on the s p a round number to look at is 2,000. I think we can get it above that relatively soon in the next couple of weeks. All right. Well come back for a second is opinion in just a moment. Well, we may all remember facebooks botched ipo back in 2012. It was a different story for the other nasdaq darling, google. Lets take a look back at how cnbc covered its market debut ten years ago. Okay. For real, google is trading up 15 . Already more than 2 million shares traded. It opened up at 101 100. 011. Up 15 , a little bit more than that. Were at 96, a little bit above 96. 96. 11 after pricing at 85. Where the reward was that what if tnew car smelledit card and the freedom of the open road . A card that gave you that im 16 and just got my first car feeling. Presenting the buypower card from capital one. Redeem earnings toward part or even all of a new chevrolet, buick, gmc or cadillac with no limits. So every time you use it, youre not just shopping for goods. Youre shopping for something great. Learn more at buypowercard. Com urm keeps the relief rally moving on as investors welcome a break in geopolitical attentions. Peaceful protests turn violent as unrest continues in ferguson, missouri, overnight. A few anniversaries will be celebrated as shareholders will mark the tenyear anniversary of google since it went public. Shares have been on a role with the stock price up more than 1,000 . The tech giant has pursued an aggressive Acquisition Strategy over the last decade. It bought android systems in 2005 and now 85 of smartphones use that operating system. Youtube was picked up in 2006. And is now the third most visited website after, of course, google and facebook. And google also bought Motorola Mobility for more than 12 billion in 2011 and it made the leap to further integration in peoples homes with the purchase of nest labs this year. So they have been on the acquisition trail, but google itself still very desirable stock. Lets take a quick trip down memory lane and see how cnbc covers googles debut. Some say the 85 price may be too high. Martin of janco partners says the stock is overpriced by as much as 10 . And that based on 2004 cash flow, he pegged the stock at 76 a share. I think the demand, both from the nasdaq and internet in general have been weaker and things that have come out in the last several weeks have put a damper on that. So that is a look at cnbc ten years ago. Andrew, its a 14year peak, i think, for the nasdaq. You still like technology, though, why . Tech is one of our favorite areas. Its auto a classic later tm cycle area which we think weve moved into this year. To potential up poikly in i. T. Spending. Weve seen pretty good earnings reports coming out. I think september which Companies Come back and they start to revisit their budget, their outlooks, the valuation looks pretty reasonable to us. So youre looking for areas of growth where valuations are fairley reasonable. But more in terms of the large cap names like google to fit that profile and an apple or a microsoft. Those names look very attractive to us. Yeah. I think the earnings will be fine in terms of energy. What weve had is weve had a pullback in the Commodity Prices here over the last couple of weeks. The sector has pulled back, as well, so it did very well in the first half. A lot of investors we talked to are concerned. The stocks had moved too much. Now its had a bit of a pullback. So we think there will be a bit on Commodity Prices in particular. We think thats a sector to get involved in if you didnt have the opportunity in the first half. Why would you not go fishing in small caps to get some exposure to that growth recovery story . Im interested in your advice to stick with your large cap at this stage. Yeah. We think were moving more into the later cycle of the bull market and the expansion, essentially. Typically, large caps will tend to do better than small caps. The primary reason is the valuation side. We do some valuation work on databases that we have. We still show that small caps are significantly overvalued, though. I think that valuation concern is going to continue to linger around here. As the markets you know, if a fair multiple, but its certainly not cheap. And i think you want to floor areas that are cheaper than the market at this point. I think the valuation is a little prohibitive and i think large caps can continue to do better. Thanks for your time this morning, andrew berkeley. Still to come on the program, could brazils president ial election be good for markets . Were going to talk about the Campaign Season as it gets into high gear. Make a point of staying with us for that. And well be back. Ive got some big news. Are you sitting . Well, stand up. Actually,its pretty huge, so sit. No stand, thats the whole pointstanding burns calories. Im burning them off right now. You wont want to sit still the more you know. Welcome back, everybody. Youre watching worldwide exchange. Were coming to you from london. Attorney general eric holder will travel to missouri thursday to investigate the shooting of mike brown. This as protests turned violent despite the lifting of a curfew. Captain ron johnson says the police were respond to go a small, disorderly faction within the protesters. Jay gray joins us now from ferguson. Jay, i guess we will see curfews imposed again here. Will that be enough to keep protesters off the streets . You know, i dont believe. Theyve said all along they want their voices to be heard. We asked captain ron johnson, will we see another curfew . He said he cant speak to that. He just enforces what happens. So it will be up to the governor. Understand that even before the curfew was in place and while it was in place, there were still problems on the streets here. And it seems like its going to continue until this Community Gets the answers that they want. Now, the majority of these protesters, as youve talked about, are doing it the right way. Theyre making sure that Michael Brown is remembered. It is the Smaller Group that are involved here. They seem to be causing most of the problems. So that point, what the captain said today was he would love it if protesters, when they could, would see it at the light of day because this criminal element, as he calls them, he believes are hiding behind their message in the darkness of night. Jay gray joining us from nbc in ferguson. Bra zells stock market has been moving higher since the tragic death of a candidate last week. Recent polls shows the rousseffs odds rising. James lockhard smith is from maple craft. James, what do you think this narrow race now means for the vespa and other Asset Classes in that economy . Well, in the shortterm, financial markets, anybody is a better candidate that dilmer im mott sure too many have thought about what the alternatives mean. A few weeks ago, there were indications that they would lead to a narrowing. Yesterday after this other poll when marina silva has reemerged and well saw a boost in villareal. We dont know that much about silvas approach to economic policy. Shes the places primary alternative. We know shes signed up to inflation targeting, to cut fiscal policy, but not much more. The current government is signed up for inflation tarlthing. But inflation targeting occurs in a very different type of policy environment. If youre invested in oil and gas or infrastructure, silva is an environmentalist, so i think the permitting projects becomes more complicated. I think it really depends on the sector. So briefly, do you agree with the polling weve seen, that dilmers chances of whipping are actually worsening or have worsened over the last week . Yes, theyve definitely worsened. And at the same time, dilmer still appears with 30 of the vote, quite a wide margin. The same deal shows her Approval Ratings have gone up. Its roughly 50 50 between her and marina silva, which we wouldnt have thought of, you know, a few weeks ago. So that has changed. But it is very well placed. All right. Thanks for your time, james, maplecroft. Still to come on the program, turning tax inversion on its head. We explore president obamas options to limit Corporate Americas overseas acquisitions. And well leave you with a look at how the futures are trading ahead of the open on wall street. We have positive sentiment here in europe. Well squeeze in a break. Good morning. Thanks for joining us. The European Markets saw solid gains today after the nasdaq hit a 14year high. Bhp billiton shares have fallen after saying they will spin off 14 billion worth of assets. But where is the Share Buyback, some investors have asking. And authorities in missouri say police came under heavy gunfire in ferguson after the shooting of a black teenager turns voipt. Ten years after its ipo, were going to take a closer look at google. Does the company have what it takes to make you another 1,000 . Announcer youre watching worldwide exchange, bricking y bringing you Business News from around the globe. No great surprise, is guess, that we have some positive momentum early on. Were still a little way away from conversing in this. This is the real activity on the u. S. Markets. It takes us on from what weve seen already in the european session where weve had positive pick up from a good trading day in asia. Lets just show you these exchanges. Were up nearly 0. 5 on the ftse 100 with the German Market in the lead and the ftse mib flirting with turning positive here, were just off modestly on the italian index at this point. So how do you make money in these markets . Here is what some of the experts weve been speaking to this morning have told us. Its not a 100 upside, but, you know, youve got a little bit of so youre going to see more measures, better liquidity. The u. S. euro curve continues to dampen. Its particular stagnation. Unable to go up incredibly so. We think a good hedge is to diversify the portfolio. The intends of being a lower cost resistor. And its much more due to the fact that, you know, its conservative and they make sure that they are available. And thats a kwek look at your trade of the day. Attorney general eric holder will travel to ferguson on wednesday to investigate the shooting of unarmed teenager mike brown, this has protests turned violent, despite a curfew. Police were responding to a small disorderly faction within the protesters. Tonight, started with prayers and messages of unity. Peace and justice, took a very different turn after dark. There were shootings, looting, vandalism, and other acts of violence that clearly appear not to have been spontaneous and premeditated acts designed to damage property, hurt people, and provoke a response. Captain ron johnson there. President obama called on iraqi to unite against islamic militants. It comes after iraqi and Kurdish Forces backed by usair strikes, we took control of mosul dam from Islamic State fighters. Obama cites the operation as a strategic victory. Today with our support, iraqi and Kurdish Forces took a major step forward by recapturing the largest dam in iraq near the city of mosul. The mosul dam fell under terrorist control this month and is contractually tied to protecting americans in iraq. If that dam was breached, it could have proven catastrophic. Meanwhile, Iraqi Forces Continue to be bolstered by those usair strikes. They launched an operation earlier this morning to drive islamic militants out of tikrit, the hometown of former dictator saddam hussein. A ceasefire between israel and hamas has been extended by 24 hours with talks set to continue. Palestinian grocenegotiators sa there had been no progress at any point aimed at resolving the conflict. He also accused israel of calling on key issues. Israel has called for the disrming of mill at that point troops in gaza. So google went public ten years ago today. Despite the dutch auction. Cnbc reports at the start of trade. Ive been watching nasdaq ipos roll in. I thought the opening was very smooth and the trading has been moving orderly. Its been moving up. I have to agree with daftd about certainly the opening looks successful, at leave the. Welcome back, everybody. These are the headlines this hour. Europe keeps the relief rally rolling on as investors watch a break in geopolitical attention. Bhp rocks the trends after announcing a 14 spinoff. And peaceful protests turn violent as unrest continues in ferguson, missouri, overnight. Joo president obama appears to be arranging a number of deals that could become all the rage in Corporate America this year. Hampton pearson joins us from washington. Good to have you with us here. So the president seems to be increasingly frustrated with the bipartisan approach. What can he do if he wants to go it alone . Specifically, the u. S. Treasury department is putting together a list of options for secretary jack lew to consider ways to halt or prevent u. S. Companies from reloengting overseas, primarily to avoid higher tax rates. Inversion deals have become increasingly popular. More than 50 have been struck over the past decade. Lew, the treasury secretary, is expected to pick one or more on the options pb but recommendations are limited as far as what hell recommend to the president. Officials say it could range from specific rules to a round of changes. That strig triggered the white house to take steps to prevent companies from taking such deals and hint it could act on its own. U. S. Lawmakers agree the tax inversion should be curbed, but they cant agree on exactly how to proceed. Some democrats say passing a stopgap measure while some republicans say the best way to stop inversion is an overhaul of the entire u. S. Tax code. President obamas powers are relatively limited. Others believe the white house can take steps including how to address the treatment of a companys debt and equity under current u. S. Tax laws. So the plot thickens and basically the policy, back biting and drama continues. Hampton, thank you very much for that. Worldwide cnbc. Com is our email address if you want to weigh into this conversation. Should the president be more focused on a complete overhaul of the tax system or is it about time that the government got to grips with these american corporates who are seek to go restructure their tax affairs . And if the republicans are not coming along for the ride, then the democrats have to do it on their own. Worldwide cnbc. Com. Squawk box is the other program i do in the morning. Sales dropping to a record low, down 9 from this time a year ago, higher prices on Grocery Store shelves have consumers to buying the onetime star at the breakfast trabl. Exotic fru Exotic Juices as ready to grab a share of the mc. J. C. Chan, son of martial an movie star jackie chan has been arrested for Marijuana Possession in beijing. He tested positive for the substance. Chan was detantd along with taiwanese movie star kai coe. 2009, jackie chan was made an antidrug ambassador in china and has said in the past that his son can make his own way, writing him out of his will. No news on whether he tried to fight himself out of the arrest. Just a week before the u. S. Open lost one of its top stars nadals absence leaves the door open now for djokovic, andy murray or federer to toll capture the title. We head into a vote here on scotland, the remaining part of the uk. Anyway, lets stick with the sports as the worlds tennis stars descend on new york for the u. S. Open next week. We talk to maria sharapova. She will sit down with us to talk sports and business in a cnbc exclusive interview today on squawk on the street 10 00 a. M. Eastern time. Unfortunately, my day will be done by then and i wont get to join in on that interview. But im sure it will be fantastic. Maria sharapova, then, 10 00 a. M. Eastern time. Coming, home sweet home. U. S. Home builders report growing optimism about the state of the market. So does that body well for todays key data on Housing Starts and Building Permits . We ask the chief executive or chief economist of the National Association of home builders. That is coming up shortly. Plus, well ask our guests whether a recent drop in Mortgage Applications is a sign that many Young Americans are being squeezed out of the Property Market by investors who are paying cash. Join the conversation here on worldwide exchange. Get in touch or by twitter. You can get to us cnbcwex. Either worldwide ad cnbcwex. Im 16 and just got my first car feeling. Presenting the buypower card from capital one. Redeem earnings toward part or even all of a new chevrolet, buick, gmc or cadillac with no limits. So every time you use it, youre not just shopping for goods. Youre shopping for something great. Learn more at buypowercard. Com were back, everybody. Youre watching worldwide exchange. European markets started off the trading session this morning on a positive footing. The german dax, the strongest gainer here up nearly 0. 9 . While the italian market has struggled, really, to get into positive territory. The ftse got a little bit of uplift from some very benign inflation data earlier on, but that has weighed on the pound shsh sterling. So if you are intending to hold up data in the United States anytime soop, do the change now in case its getting weaker. Bhp billiton shares weighed on the down side after announcing it will skin off 14 billion worth of assets into a new company to be listed in australia. It comes as bhp announced 13. 5 billion off 10 on the year. Speaking on the analyst call, andrew mackenzy said options for returning capital to investors are still open. As a competition, we will be intense and get more intense than i believe as a consequence of that capital ability and bhp billiton will rides and well have more options as a result in terms of cash flows about distributions to shareholders. Was it really ten years ago . Goodness. Google first went public. The internet search giant emerged on the market. The company has transformed its Business Model to one now that includes smartphones, carrible text and driver also cars. Josh lipton takes a look at the companys surprise. Google, its not just a company, its a verb. And a lot has changed since the Company First went public. Lets start with the market cap which now sees 390 billion. Thats greater than microsoft, facebook, ibm, oracle or intel. Its nearly twice the market cap of jpmorgan and just slightly less than the value of exxon. Investors who poured money into google have enjoyed an incredible return. In fact, shareholders have reaped a gain of nearly 1300 over the past decade. That dwarfs the return of the s p 500 and the nasdaq over the same time period. And that massive stock run up has made googles time founders very wealthy. Larry page and sergei brin are now worth 31 billion each. That puts them both in the world anticipates top 20 billionaires, according to forbes. The Business Model that they have create sd maybe not quite as good as the discovery of oil, but up there. I mean, the Online Advertising business that theyve created generates just mountains of cash. Google has continued to grow rapidly over the past decade as revenues reached 16 billion in the latest quarter and the company now has more than 52,000 employees. At the cop of its business is search and the advertising generated from those queries. And the numbers on googles search are massive by any metric. Google proses over 3. 5 billion searches every day and more than 1. 2 trillion per year. And as all of these numbers continue to grow almost daily, theres no question, google wants to remain the worlds destination to access the wealth of information at home, at work, and in an increasingly mobile world. Josh lipton, cnbc, silicone valley. What does that tell us about where were going on some of those Technology Stocks today . The nasdaq indicated higher on the implied value from the futures that were looking at here. The s p and the dow jones also positive. Worth pointing out to you this is largely driven by a strong session here in europe and weve picked that up from asia earlier on. What is on the agenda in terms of other stories to keep your eye out for july cpi out at 8 30 eastern. Consumer prices forecast to rise 0. 1 and 0. 2 when you strip out food and energy. 8 30 we get july Housing Starts expected to rise more than 8 to an annual rate of 965,000 buildings, forecast to rise 3. 3 . David crow is chief economist at the National Association of home builders. And, david, that was a strong looking number that we had yesterday in the nahb data. Do we get confirmation that things are broadly Getting Better across the Housing Market. Todays batch . I think so. For a couple of reasons. One, as you mentioned, the nahb wells fargo Housing Market index was up nicely for august. And, in fact, is one point shy of the peak for this year. Weve also seen a fairley decent recovery in the jeefr all economy, which is really what housing has been waiting on. Its been good, strong employment reports to give people the confidence that they can go forward with such a major purchase as a home. Is that a lagging indicator of interest in the market, do you think, or something we need to keep an eye on . Most definitely its an indicator. And its an indicator of the younger buyer, usually the first time home buyer. What were seeing right now is mostly purchases by trade up buye buyers, people who own a home or have enough equity that they can wall it into a new home. The first time home buyer is suffering from a whole wrath of difficulties. So that is strict underwriting is casting out those people with even a small shade in their credit ratings. Young buyers also, of course, at the start of their career, so they have a relatively lower income. They dont have a lot of savings and theyre often in a job that requires them to move around. So were having some struggles to get that First Time Buyer into the market. Shouldnt we be concerned about that, though . As Credit Conditions are easing and we look at the 30year, which is telling us that actually Interest Rate charges on mortgages should be coming down at this points, we want younger buyers coming in at the bottom of the ladder, dont we . Otherwise thats going to cause problems later on. No, absolutely correct. The younger buyer is the key. That allows the existing homeowner to buy a new home. So its a key element of moving forward. And, yet, their ability to access credit is a real difficult problem right now. Were seeing some small changes in that and hopefully that our congress will come forward with new legislation to confirm what were going to do with our Government Sponsored Enterprises with fannie mae and freddie mac. If they could clear up that uncerta uncertainty, i think we could move forward at a faster pace. David crow, chief economist at the National Association of home builders. So lets just revisit these united statu. S. Opening calls for you. We have a positive start to the u. S. Session indicated out of the futures. Weve had a strong situation here in europe from the open so far. The only weakness has been the per he rif ral markets. But weve had some other news flow telling us that the ship company is going to give 1 billion back to shareholders and ultimately they beat earnings expectations. On the u. S. Market trade, we wrap up worldwide exchange. Thanks for tuning into the program, everybody. Im geoff cutmore. Byebye. Good morning. A big rally on the streets. The nasdaq closed at a 13year high. The dow and s p 500 have been up three of the last four days. Well, the days news on inflation and housing help or hurt the markets . Wireless war, unveiling a new pricing plan, but will 20 giga bytes of data and up to ten lines for 100 be enough to lure customers . And a hospital attack, the victim of a cyber attack from china. Tuesday, august 19th, 2014, and squawk box begins right now. Good morning and welcome to squawk box here on cnbc. Im Andrew Ross Sorkin along with joe kernen. Becky quick continues to enjoy some time off. Steve ballmer introducing himself to l. A. Clippers fans at a rally. Clapping and shouting. He was nearly hoarse. He ran around to the song lose yourself. Yes, i do live in seattle. No we can all love seattle. Theres no team there. Weir not moving the clippers to seattle