Transcripts For CNBC Worldwide Exchange 20150204

Car maker shift into overdrive. Is a bromance brewing in brussels . He received a warm welcome from the european president amist word he will try to convince him to try to increase the countrys bailout. Youre watching Worldwide Exchange. Bringing you Business News from around the globe. And were just getting the euro zone composite pmi for january. This is 52. 7. It was forecast at 52. 3. This follows the numbers. The competition pmi was 52. 6. We had in the last 15 minutes or so data as well. Italy beat france beat and germany slightly below expectations. The euro dollar off session lows 1. 146. The overall euro zone private sector growing at the fastest pace in six months in january. Firms slashing their rate. January services pmi at 52. 1. The euro dollar trading at 1. 14. Interesting to see the reverse trade over the past couplel of months. Alexis is at the moment meeting with commissioner president. The Financial Times is reporting he will ask him for a technical extension of the countrys current bailout. Well have all the details at 9 30 london time when we cross live to julia on the ground in brussels where that meeting is taking place. If he agrees to this technical extension, would that basically be going against what he promised citizens . In a way he has to hold up to what he has been promising his people that voted for him. Over the last 24 hours we have seen that coming out of him. A hair cut on the debt is now agreed in greek peoples minds. That was the first step needed. Thats the newly elected Prime Minister of greece. A bromance if you will. The later meeting will be coming today with mario draghi. Will there be the same level of chemistry . The European Central bank is set to push back on greeces turn around plan. Specifically the proposal to issue shortterm treasury bills. The ecb will play hard ball and is unwilling to approve the bridge financing worth 10 billion euros that would help athens buy time while a new bailout plan is a agreed upon. Greece is set to auction 625 Million Euros worth of tbills today. Yields have come off their highs right now. Were looking at the ten year greek bond yielding 10. 2 . To get more on the trade for greece Going Forward, charlie, head of macro strategy. Are you expecting a solution to come together and would you buy greek debt . I think there will be a solution almost because there has to be. You mentioned the contradiction of whats going on right now against the election promises that were made you have to keep in mind thats politics right . What you say isnt the real politic that you face afterwards. They are sort of doing their own thing which is what they were arguing with to start with. The europeans are prepared to play ball. They understand the debt burden is pretty much unsustainable so they want to find a work around as well. Its going to take a long time and Angela Merkel was eluding to this yesterday. I dont think were going to get an answer in the next week or two. Theyll come up with some sticking plaster deal to create interim financing but a proper longer Term Solution is probably at least six months away. Looking at the greek bond yields just a second ago which has come away from the record highs over the last 24 hours or so, has it been odd we havent seen more of a spike in yields in countries that have similarities in their outlook to greece over the last couple of weeks . Has there not been any contagion at all . No, you have to think about whats going on on the other side. The market is gearing up for the ecb to step in and buy a large amount of government bonds and if you look at the available free float if you like or net supply the story is impressive. Over the course of the next three months. So its very difficult to sit there and say yes im going to start selling the long end of italian debt when you know theres a very big buying coming any day now thats going to take effectively all of the marginal supply. Lets have another one on european yields. In particular the fact that german tenure is below the japanese tenure. The speed with which that has happened is quite astonishing. Its very hard to feel theres any value of merit of yields of that level. But germany is probably the biggest beneficiary of qe because of the key metric that theyll be taking all the net supply and then some probably. But over the next six months real yields in germany are still going to be not that low. So in real terms, if you look at yields in nominal space and not just real space, you look at spanish tenure yields theyre in real terms close to full blown expansion levels. So it depends what youre looking at. Theres not such a mix match if you look in that space. Charlie with theres a few very strong sessions in a row. Brent 57. 3. Thats off 1 . Lets talk about the movers trading sharply lower after learning that full year profits would fall short of 201 levels as the finished state owned refinery of 254 Million Euros. Were joined by the ceo on the phone. Thank you for joining us. Fourth quarter operating profit in line with expectations but your guidance short of what the street was expecting. Is that because of Lower Oil Prices . How long can that cant . Good morning, if you think about a refining environment there is a lot of moving parts and its almost impossible to say but it will be very robust and its probably lower so we are still very very strong and positive operating profits for this year. But obviously the market reacting badly for these numbers. Shares are 5. 5 as we look at things and particularly the guidance in the year ahead. What kind of impact is that having . Thats something 70 Million Euros impact and we had this big turn around every fifth year. Thats what were going to do. The share price probably there was also someone who was not satisfied with our dividend. Its very stable as was last year so its also showing that we are very confident and robust with the results. Sharp rebound in oil prices over the past couple of days. Brent is up about 20 since the recent low hit back on the 13th of january. I want to get your thoughts on the rebound. Do you think its sustainable and what does that mean for your bottom line . Its very difficult to say. Of course there was indication. Pumping is now 20 lower than the Fourth Quarter. That gives us some hope for the higher crude prices but we believe it would be now probably increasing the crude price toward the end of the year but its too early to say and what this does for us, it will be lower crude price in our comparable figures and i suppose that we have cut it last Year Inventory evaluation. I noticed that you have removed the word oil from your corporate name. Whats driving that decision . Its more than the fact that the commodity has fallen out of favor recently. Absolutely. Its not only the dropping oil but theres fundamentals behind because its changed very much. Were very much into readables and well call the new business areas like bio based chemicals. We have a wagering company and for example last year they made 40 of our profit so we are really moving out from the normal refining and thats why we also like to change our name because we moving ahead. Thank you very much. Ceo of nestle. As greek leaders meet with european policy makers we have been getting headlines. Lets get you up to date. He says crease will never again have a budget deficit. He says we will never seek Financial Aid from moscow. Over the last couple of days theres rumors that greece will look to russia for extension of financial terms as it puts together this bailout solution but at this point the finance minister saying it will not look to moscow for aid. Lets have a look on European Market which is were strong yesterday. We had a descent Asian Session as well but its running out of steam this morning here in europe. Its up only. 2 . It strengthened as you can see. We had some of the European Services pmis which were better than expected but nothing significant enough to drive markets meaningfully higher this morning. The ftse 100 was particularly strong yesterday because yesterdays rally lead by commodity stocks in oil and the dax is below flat by 15 basis points and france and basically offsetting those two moves in squermny and the u. K. Look at bonds and the yields across the world at the moment germany falling below the yields. Its really astonishing on january 19th. When we saw qe announce there was a 25 basis points spread in the other direction. Japanese yields now above the ten year on germany. Greece of course yields are just come back from the highs we saw a couple of days ago. Theres been some progress in those negotiation with europe. The u. S. Dollar coming back off some of its highs and a little profit trading. The euro weakened a little bit and the aussie dollar bouncing back today. Currencies have done well today but it had a big sell off yesterday after the rate cut from the aussie central bank. Coming up on the show disney is expanding its frozen franchise after the blockbuster film helps the entertainment giant hop wall street expectations. Well get you those details coming up. Plus macys opens its wallet making its first acquisition in a decade. More on that. Plus twitter is reportedly set to open up its First Operations out of the u. S. We discuss the social media giants expansion plans ahead of earnings. This weeks highly anticipated report. Welcome back. A very good morning if youre just joining us. Well dive in and look at some of the biggest individual movers in europe. Hugo boss is off 4 as the german fashion house delivered a lackluster outing with economic uncertainties. Lets move on to sky. Those gains paired back quite significantly over the last half an hour or so. This after it reported a 16 rise in first half profits ahead of forecasts. It has paired the gains quite significantly. Speaking earlier on squawk box europe the companys cfo discussed the mobile strategy. Customers are telling us theyre happy to take more from us. We sold in one quarter alone more than a million more paid for products from our customers. The good news and i think what set ises us apart in the category is the strength of the brand and hunger for customers to spend more with us and buy more services. Weve gone if you like from the Home Communications market over the last ten years from being a complete market entrant to challenger and the number two player in the market. We have done all of that on the back of real demand from customers. Its early days on mobile were really pleased with the partnership partnership. They have a good network in the ut. Moving on lvmh sales soaring higher. Its up the best part of 6 . Great performance. Lets get out to more on that with stefan in paris. Good morning. Following the announcement yesterday evening this morning plenty increase their recommendation on their price target and barclays snp Capital Increase their price target. Lvmh reported a 5 increase in sales. The average forecast was 2 to 3 growth. Its been boosted by the very good performance of. It worked well. All the new products work raeldly well especially in the United States with record sales. The Leather Division which is the main unit which is dominated by the products did well with a 4 growth in sales to compare with 2 in the third quarter. So the trend is accelerating. The wine and spirits units suffered a 16 contraction of its operating profit and thats mainly the sales in china following the anticorruption lows and also a significant drop. All in all the numbers were stronger than expected and theyre doing very well. Its on the French Market you 5. 8 its entering 2015 with confidence. Lets move on to syngenta trading higher. Profit ahead of analyst expectations despite of currency head winds. Carolyn has more. That was a very positive surprise this morning. Top and bottom hienline were better than expected. If you take a look at 12 sales growth in large part because of a new Product Launch. That was the biggest Product Launch in history with 300 million in sales. That helped last year. Going forward to 2013 its going to be a lot more difficult because theyre facing a number of headwinds. One of them being fx or crop kriess. When i spoke to the ceo i asked how much visibility he had going into this year. With lower crop prices this is lower crop prices but we had lower crop prices a year ago. The difference between last year and now is that the farmers this year were selling into a low commodity price. So the profits are going to be down a little bit relative to last year and we just really imagine theyll be more bearish themselves on inputs and expense management. Were airing on the side of caution. That caution has to be underpinned by whats going on in russia where the rouble continue to depreciate relative to the dollar and thats pressurizing what for us is a good sized business over there. How difficult is the pricing in this environment . Well pricing, rewith doing and did last year we dollarized a lot of that and we had to put our prices up significantly the 160 million of impact last year we were able to recover 80 million of it to pricing but we still got 80 million and hit to the bottom line on that. Its material. Lets have a look at the share price once again. Still outperforming. Were high by 3. 4 . This stock too has lost quite a bit of ground as a result of the snb move. Some of those losses. In the next hour well bring you what the ceo said about oil prices. That will be a tail wind. Will that be 2015 or 2016 . That is the big question. Chinas services pmi came in at 51. 8. Despite that number shares are rallying today. So charlie are investors basically betting on further Central Bank Intervention given the series of disappointing reports out of china . Thats part of it. You also have this process where they are managing the slow down if you like. Theres the hong kong and shanghai exchanges. All of that is carey kwating a fair amount of extortion in the equity markets but the theme is that they are slowing down and that the data continue to confirm that. But theyre doing a good job of controlling it. Its easing back. That will link to further rate cuts. Thats an interesting point because of course the focus in the global currency war currently on europe but its in asia as well. Absolutely. We think that will be a big theme Going Forward. China is going to appreciate their currency too much but somewhere like korea, malaysia these countries have a significant disadvantage if you like following on the policy measures that youve seen in japan and we expect to continue to see that response from policy makers within the region trying to if you like grab back some growth and depreciate the kurn sis but we think theres one or two stand out exceptions that werent under those lines. Both of them should do relatively well on a comparative basis. Those are the trades were looking at at the moment. China shares are trading lower right now. How much does that change your investment thesis when looking at china. Youve come down so far. Is this the no i think the Energy Complex is going to remain very subdued for a long period of time. The supply dynamic suggests overwhelmingly conclusive. Capital expenditure plans being expressed. That could reduce the supply and create more demand . It could. But again the wheels turn slowly on this. Its not something thats going to dictate the price over the next six months. For now we seem to have established more or less a clearing area for the Energy Complex. Somewhere between 5040 and 55 barrel for the next six months. Charlie, thank you for joining us today. Now americans are less stressed. Thats according to a new survey by the countrys psychological association. It suggests people are feeling less anxious in general before the recession. However money is still the main reason for emotional strain with 72 of those surveyed saying they felt anxious about their personal finances over the last month. So we want to know what stresses you out . Is it money or Something Else like love. But do get in touch with us. Join the conversation here. Worldwide cnbc. Com is the email address. What stresses you out more . Relationship or money . Neither at the moment. Enjoying the new job and arsenals rebound as well. That always helps. There you go. Still to come on the show our next guest says dont buy the hype surrounding crude. Find out why after this short break. Welcome back. European markets fail to track a rally state side and in asia opening on the flat line as Oil Goes Back on the slide with wti below 53. Syngenta says the firm will raep the reap the benefits next year. They beat earnings expectations despite currency head winds. Toyota with a weaker profit as they help the auto maker shift into overdrive. Is a bromance brewing in brussels . The greek Prime Minister receives a warm welcome amid reports hell try to convince him to expand the countrys bailout bailout. We just had u. K. Services pair data that has come out for january. It had been expected at 56. 5. That 57. 2 significantly higher than expected growing. Service data is particularly important in the u. K. We were selling it to 1518 as we look at things now. Lets look at European Markets. So far over the past couple of days they have been in rally mode betting on the ecbs promise of stimulating growth. Theres also been opt mifl around optimism around a solution coming together. Right now were seeing investors book profit with the ftse 100 down about. 4 . The german markets with a loss of around. 4 . Similar story for the euro stocks 50. A good gauge of stocks across the euro zone. Well, yes, indeed the index is down about four points. Keep in mind we have been seeing a vast out performance in the european equities. You can take a look up almost 9 . Lets have a quick look at bonds because the german yield fell below that of japan yesterday for the First Time Ever. A significant move over the last three weeks or so since ecb policy action have become very much expected and then delivered. The deal on the ten year in germany. 35 . Greek yields just came off their highs as there were positive developments in the negotiations between greece and europe. The euro is slightly soft today. Nothing too significant. Its still at 1. 146. Dollar yen is seeing the dollar weaken. Just want to give you an update on skies stock price which is in deed at the top of the ftse 100. Earlier we were reporting the price of be sky be. Put thats after first half profits showed a 16 rise which was ahead of forecasts. Greeces finance minister says a country will never seek Financial Aid from russia. Hes there for debt talks with mario draghi. Meanwhile, the greek Prime Minister received a great welcome. They were seen hugging and shaking hands in the last hour. A lot on the agenda today julia. Yeah there is. Both in frankford as you mentioned and also here in brussels. We have just shown pictures of the meeting between them. It had the greek press in rap tours. The patting of the backs and the kisses we saw and both parties laughing as they walked off. Thats the backdrop for discussions and the most pressing discussions are going to take place in frankford. Its likely to be a big broad discussion about what to do about greece Going Forward. They have to make a decision on whether to extend the emergency liquidity Going Forward. That being taken down by the banks. The banks then using that money to tissue and buy tbills from the central bank. So theres an aurlt that the ecrgument that theyre allowing the country to be financed. Thats an outcome of the discussion today and the other thing is what happens here in brussels and the question is whether or not greece is forced to continue in some kind of extension of the program and whether or not theyll be able to issue tbills Going Forward. The suggestion is they wont be able to do that. The question is whether or not they can allow flexibility for greece. We know the message from discussions i had, they expect to give them more neck blt. They also know talking about a bailout Going Forward is not feasible so there is flexibility. Whether there isnt flexibility is on reform. Its going to be up to greece to prove they can continue with reforms and finance the country if they do allow the minimum wage to be raised and collective wage bargaining to be back. Its a real process of negotiation. Theres going to be a solution found while a broader deal is made over the next few months. I expect it to be a rocky process. Its a reason to come back and have a far more radical suggestion as far as debt is con turned. Its a long way to go. Thank you so much. In the meantime we have been seeingsee seeing volatility in the equity and bond market. Lets switch to the corporate stories. Raising funds from the swiss trader as it fast approaches the deadline for a 7 million debt re repayment. The russian state control group has had its ability to raise debt limited by on going western sanctions. The report is exploring alternative options including shortterm financing. The ceo of brazils state run oil company is expected to resign when it reports earnings next month. Theyve been undermounting pressure to step aside. They allegedly con fired with lawmakers, contractors and black Market Dealers to swill billions through kick packs. They requested her resignation. Strong gains yesterday in trade. Up 13. 7 . Lets switch to stat oil. Shares are moving lower after it announced the acting ceo will take up his post permanantly. He replaces lund that resigned last year. I always seem to get the hard pronunciations. Theres no doubt about it. Oil prices i know how to say that are easing this morning after wti settled at its highest level of the year around 53 barrel. Crude rallied up to 13 . Neil atkinson joins us now. We knew the corporates and big majors were going to cut capex. Why is this move announced . A lot of people declared victory. From here on in were going to start rising again although a bit gradually and i have to keep coming back to its the fundamental stupid as somebody might say and when you look at the underlying fundamentals of supply and demand in the oil market the low oil price has not yet had a major impact on production in the United States and some might argue the oil prices are targeted at production. That hasnt started to fall yet and it wont fall until the second half of this year. Meanwhile, theres no corresponding big increase in the prospects for oil demand. Although in the u. S. Theres a bit of an up tick. We have a lot of supply in the market and there is a mayor, mayor oil supply surplus which is going to persist for the first half of 2015. On that basis i dont see how anybody can declare victory that the slight is over and the worst is over and from here on in prices recover. Its not credible. But neal some would disagree. What we are seeing appears to be contraction in oil supply. Also news in a drop in oil rig on asian. Could those factors lead to lower supply and higher demand for oil. That isnt 2015. When does that play out . The action they have taken to slash their investments these are projects which arent shovel ready today. They are projects that might have gotten earlier this year but wouldnt yield production as such. Oil coming out of the the ground until 2016 2017 and in some cases later than that. What were talking about here is the here and now. Now youre right, there is a dramatic reduction, 24 i think it is in drilling activity in some parts of the u. S. Which are producing shell oil and that will start to feed into lower actual production but only two weeks ago u. S. Oil production reached 9. 2 Million Barrels a day which is a modern record high. It hasnt yet started to feed through into actual declines in production. Thats all im saying. When we start to get actual declines in production and higher Oil Demand Growth than we expected then yes were back in a bullish market. Lets move on to some corporates. We had a desen set of results from bp yesterday surprising the market. You have an interesting possible perspective on the corporate future. Well, bp is in a class of its own because of the fall out from the gulf of mexico accident which is now nearly five years agatha happened april 2010 and of course the consequences of that, the damages that bp still has to pay has not yet been finally quantified and of course were talking about billions and billions of dollars here. So for bp to possibly be prey to merger talks or an acquisition which is something we hear talked about quite a lot, you do wonder why anybody would do that given that bp still has these liabilities. Meanwhile, among the ranks of the Major Oil Companies we are in a situation where a 40, 50 60 oil price is what were going to be living with for the next year or two which bob dudley the ceo of bp was suggesting that then take our minds back to the last time we had low oil prices or lower price which is is the end of the 1990s. We had major mergers. Now today we have a second tier of players, bg group. Those are companies not in the major category but theyre having difficulties cutting their investment. Cutting staff. Maybe cutting dividends. That remains to be seen but those Companies May be the ones that are going to be the one. Theres other Oil Companies that may not be big enough to have the heft to go forward indepen den independently. Thank you very much. Of course we have been following the news coming out of frankfurt. The greek finance minister saying he is having a fruitful discussion with the ecb president mario draghi and says we cannot continue with business as usual. Of course he has been on this whistle stop tour. He is points higher posing to raise 10 billion euros in shortterm treasury bills as a way to raise some Financial Aid and allow them to then put together a plan over the next coming months with european leaders. The focus on the ecb, will the ecb approve the debt sale . This plan outlined. Well have to see as we get more headlines coming out of that meeting. All right. More to come. Twitter setting its sights on emerging marketing. The Financial Times reports the Company Plans to open an r and d center. Its first such facility outside the u. S. Last month they bought zip dial for 40 million. They say it will use the staff as the base for the new center. Twitter reports earnings on thursday and were also excited to mention that we will be interviewing the ceo of zip dial to recall here on Worldwide Exchange. That will be a first on cnbc interview and great timing given the news coming out around the acquisition and what twitter is planning to do with zip dial in india. And particularly ahead of the big set of earnings to focus on coming up. Meanwhile, netflix is back online after it suffered an out outage for more than an hour. The company is still investigating the cause of the outage. People took to twitter to express their collective dismay. Netflix is down. Im running to costco the apocalypse is near. Netflix is down. Maybe ill go talk to my family for the first time. They seem like nice people. A strong reaction from netflix one hour outage last night. In case you were wondering if netflix had fans this outage confirms it and drove people crazy. Taking to twitter to express their frustration with the fact that its down. No more house of cards. I think the new season is coming out end of february. Beyond excited. I cant wait. Love it. Still to come on the show all is well in the magic kingdom. Disney topping earnings estimates with a little help from the frozen gang. All of wilfreds friends. Well tell you more after this break. Lets take a look at toyota. The worlds biggest auto maker says it expects to report a record profit of 2. 7 trillion yen for the year ending march 21st. Meanwhile sony is liking to return to the black thanks to strong sales of its video game consoles and image sensors. For more lets get to the nikkei for the story live in tokyo. Yes the firm raised its sale forecast for the full year in march. Around 68 billion. It expects an operating profit of around 178 million which came as a surprise since the previous forecast was a loss of 340 million. They took a beating but it saw growth in image sensor business and video game consoles and movie and music business. Net loss for the year will be around 1. 5 billion which is about 25 less than initially forecast. Now in efforts to restructure its business sony will slash the number of employees by more than 2,000 while boosting production of its image sensors mainly used in smartphones in which the firm currently enjoys top Global Market share. Thank you very much. Joining us to discuss more about sony and its results is jay nelson Senior Editor at japan newsletter. The question is whether the recent hacking attack its getting a revision to its earnings in march. It had minimal impact, maybe 15 15 million. So not even a question as far as the overall earnings picture. Correct me if im wrong were getting a revision to their earnings in march which could highlight how the hacking did impact earnings if at all. Were getting a revision. It will be the actual results for the quarter. Its not expected to have any impact at all. Lets focus to the rest of the earnings. To what extent is the playstation sonys saving grace at the moment . Ps4 is doing well. The sales are moving toward ps4 in the comeponents as well as the machine itself and the ps3 is being phased out. Its a smooth transition and doing excellent for the company. Lets talk about the Television Business as well. Is that starting to turn the corner . Yes, the Television Business for the first time back in a decade. Its had three straight quarters of positive operating profit and we havent seen that in a little more than a decade. Its a low margin business and its never going to be anything to write home about or invest in shares. In the future its not going to be a problem like a year or two ago. A very challenging space. You had samsung and others stealing market share from sony. I want to talk about the smartphone space. The experior smartphone was the only unprofitable. This year did it help the bottom line . Yes. In fact every single Business Unit in the continuing operations was profitable this quarter. No one seems to be noting there were no losses in continuing operations anywhere in the company for the first time in a long time. That includes smartphones. Eventually they still need profits. You have to hand it to them for managing it well. You have apple and samsung that are the big players but despite that competition theyre still doing well. A lot of competition in that space. I want to bring it back to talk of the hack in particular because i do get rumors come out that this is really really hurting the company a lot more than theyre letting on. What is your view on that operationally even if we can say it hasnt had too big of an effort . I dont see how the hack effects them at all in the longterm except on a reputational basis. Theyre the butt of jokes and there were a lot of postings on the internet of the inside information. So from a reputational standpoint they look incompetent but that will wear off and as far as the actual impact to the business or sales profit i dont see any kind of longterm basis thank you. Much appreciated. Now disney earnings easily topped estimates in the First Quarter. Boosted by dvd and toy sales tied to frozen. The Company Reported a rise in business to its u. S. Theme parks. Julia has the story. The key takeaway is that the strategy of building brands to exploit across all the platforms is working with all the companys divisions showing growth. It is a great testament to strategy to focus on franchises and great brands. They obviously benefit from that but also Operational Excellence and clear demand around the holiday period. Just about anyway you look at it the company had a great quarter and again it says a lot about the properties, the assets this company now has. He is confident this across the board growth will continue on the strength of disneys franchises as well as other factors. He also says that measles has had no impact on attendance at disney land and attendance in reservations are up this quarter. A massive growth driver for disney espn hes not concerned art chord cutting. Back over to you. Disney one of the big movers there. Frozen is one of your favorite songs, im forgetting how it goes. Dont tempt me to do this live on air because i will and our viewing figures will collapse. We did have a nice little sing song during the break. But just for private ears. The u. K. Central election is not the only election taking place in may. Theres also elections for fifas new president. Hes called for an end to a culture of intimidation within fifa cht the Vice President and member of the organizations executive committee is among three challenges. I spoke with him and asked him if fifa needs to clean up its act. Well, what im looking for is clear transparency and proper reform. The last four years i have been executive at fifa and i have seen ideas for reform. And unfortunately none of them have been really carried through and its time now that the president comes in who is accountable for his actions and takes responsibility for it and serves the sport and puts the priority on stake holders. How important is it that it moves quickly. How big of a Financial Impact is this having on fifa . Its very important that sponsors have confidence in the organization. Its disturbing to see and we need to restore that. Theres some that way its okay that we can find other sponsors but thats not the point. For all our sponsors to have faith and confidence in a transparent and open fifa. Lets talk about the current president , has he let down the world of football by breaking his promise to stand again for the presidency . Well i think that any president should stick with his word and thats something that i will be doing if i win this election. Still to come on the show netflix users go on a rant. Goes off air for over an point. Well bring you extremely amusing comments that hit social media. Thats after a short break. And welcome to Worldwide Exchange. Here are your headlines from around the world. Take a look at markets. The global rally fading wti and brent trading lower weighing on European Markets with u. S. Futures indicating a bigger open. Disney blows past earnings forecasts as the continued success of frozen fuels the media giants results. In a rare move for the u. S. Auto industry ford plans to hike pay for some lower level union workers. And is a bromance brewing in brussels. A warm welcome from the European Commissioner president amid reports hell try to convince him to extend the countrys bailout. Youre watching Worldwide Exchange. Bringing you Business News from around the globe. After the 20 rise in brent todays actions suggest the rally will not continue. Were looking at brent as well as wti trading down by 2 . I also think whats interesting, particularly if we rewind to friday on friday u. S. Equities were down and given the strong bouts since the lows if we see equity rally fizzling out as it has done in europe already that does suggest the correlation effect is much reduced from where it was a few weeks ago. The big question is how correlated are the equity markets to whats happening in oil. That has to do with the energy rebound. They have been fuelling the rally they have been seeing on wall street. The best performing sector in the last two days. Take a look at u. S. Futures according to a lower open. Perhaps thats staying true in todays trade. The nasdaq down about 16 points and the s p 500 down about 8 just as we look at Oil Prices Moving lower. Take a look at the cnbc global 300 index. Investors had a lot to digest. We had the weaker than expected pmi data. That weighing on Investor Sentiment but guests have been telling us that puts more focus on the central bank to put together more easing measures that will then help a rebound in the china economy. Right now were looking at the cnbc global 300 index up just about 13 points. Pmi data in europe also been a focal point for investors. Now despite that rally investors are sticking to the sidelines waiting for negotiation to come together when looking at bailout terms in brussels. We have the finance minister as greece meeting with various leaders. Take a look at the xetra dax down around 49 points. Cac 40 down 14 points and the ftse mib down around 71 points. I wonder if the negative tone has to do with the oil decline on whats happening around greece and its bailout terms. Half an hour ago we had slightly above positive gains in the markets. The services pmi is pretty good a meeting also happening in brussels between them. Maybe lack of clear positive statements giving a little bit of decline at the margin but weve had a strong couple of days off the back of oil prices. So unsurprising were seeing a pull back. Lets look in at the bond market where yesterday the ten year german yield fell below the ten year japanese yield for the First Time Ever and only three weeks ago, january 19th the spread was 25 basis points in the other direction. So the speed with that move weve seen them switch direction. Really quite astonishing. The easing in japan was only a few months ago so the action not that starkly different. So surprising moves weve seen it go quite so low. Now in greece of course the yields have been moving in the opposite direction over the course of 2014. Were at 10. 2 . We were on the 9 high at the start of todays trade and just putting the yields up again. That has also weighed on equity markets this morning. The euro has softened today having bounced off its bottoms since the ecb meetings. Its 114 today. 111 is where we touched a couple of weeks ago. Its off. 3 today. The aussie dollar flattened off the day despite some doing well the last couple of days. Today its just flattening off. 778 and sterling a flat 1518. We had services pmi better than expected. Brent is at 53. 7. Its interesting to see gold rally yesterday. Matthew beasley head of Global Equities. We were talking about trading in negative territory after the last couple of days. What do you think is a reason we were looking at stocks today. Is it a decline in the price of oil or does it have to do with the worries that they proposed the debt sale. Some degree they could be a metaphor for this year ahead of us. There is a lot to be confident about when it comes to european equities given where it started from. Giving us some of the data were seeing. We saw some more of that this morning but theres so many things that can blow markets off course here. Its natural at a more elevated stage at an equity bull market. I think whats perhaps more interesting and more difficult to understand is some of the shorter term movements are linked or not linked. Consumer staple stocks rising increased strongly too. Maybe thats to do with the shorter term collection of the dollar. Greece has sold 812. 5 Million Euros of 26 week treasury builds. The year on those at 26. 75 . They got that small auction away but nothing too major. Lets talk about the greek yields of course jumping around over the last week or so. Do we think that despite people saying there shouldnt be financial contagion this time around that the risk is being underestimated. If you look at the head of the bank Banking Sector theres fear. More than likely its a result of qe. The challenge is it can depress yields in the shortterm but theres few ways to pay really domestic European Growth. Its surprising theyre the way they have been. Theres fear of contagion and whatever may happen in greece will spill over and have ramifications for some of the other European Countries too. I get a bit of play on domestic European Growth coming up. If we dont get that its more of a tax on the bank than the positives. Thats an important assumption to make. You are seeing some evidence of that bottoming out. Not yet growing. Thats crucially important for banks to grow their lending books from here and to drive earnings higher but we are seeing some bottoming out. So places like italy and spain and for a fundamental rally. Its of course the weaker euro but over the past couple of days were seeing the euro strengthen against the u. S. Dollar. Its now trading at 114. Do you think thats a concern for investors because the weaker euro is expected to boost exports and lift european corporate earnings . Yeah think of where we are now as to where we were a year ago. Its the number of days in which theres the currency benefit. Not just the point in which the weaker euro has impacted results for a significant amount of time for European Countries. As we move through the first half of this year thats going to be a favorable tail wind as a result of that historical european and Euro Weakness we have seen. Lets also talk about the u. K. Will they be suffering . They will. If im thinking of geographies over the next 12 months the u. K. Is one where there has to be significant potential for negative surprise. Its one of the Fastest Growing countries across western europe. Its across the g7. Expectations are readily elevated and theres potential for an election to produce a result and seen by investors as unfavorable. I dont get that its unfavorable. We had a coalition for the last five years that seemed to work. Yes theres a possibility of a government unfavorable for Business Environment but labor in the u. S. Is a far cry from greece. Theres negative currency certainly in the u. S. And youre almost certainly going to move toward the referendum. That would mean an exit for the u. S. And equally if you have a strong labor lead government or out to the snb maybe theres risk for some fiscal laxity. Head of Global Equities at Henderson Global investors. Hell stay with us for another chat. Lets get you a run down on what to watch in the u. S. January adp employment report is out at 8 15 a. M. Eastern. Forecasts call for increase of 240,000 in private sector payrolls. We get the report on friday as well. 235,000 expected. At 10 00 a. M. January ism services index. Governor powell and president mester will speak. Gm, merck and clorox before the opening bell. After the closing bell 2st1st century fox. He cut his stake in media giant news corp. It reduced its holding to 1 from around 6. 6 . The sale will generate around 187 million. Shares are down over 12 over the last six months despite a strong move yesterday to the upside. Lets take a look at disney because disneys First Quarter results beat forecasts boosted by dvd and toy sales of none other than frozen and as visitorsvisitor visitors flock to the u. S. Theme parks. They have not seen a major impact from a Measles Outbreak at disney land. Each reported higher than reported operating profits. Cable networks saw a decline due to higher programming costs and that was offset by a big squump at jump at abc. Just a great jump across the board. Its clearly a great testament to strategy to focus on franchises and our great brands. Parks and resorts obviously benefit from that but also Operational Excellence and clear demand around the holiday period. Disney plans to open its shanghai park in the spring of 2016. Later than thought. Disney will show a new 7minute short featuring a new song ahead of the live action cinderella film next month. Theyre milking the frozen brand. Shares up about 6 in frankfurt. Im looking forward to that cinderella movie. Are you . Yeah. Its a great story and if they update their films well im all for a repeat. It worked well for them about ten years ago or so. Now, chipotles profit beating forecasts. But same store sales came up shy of estimates and the company repeated its earnings from october that sales growth may slow this year. Theyre tying with the idea of raising steak prices to offset cost increases. Sales fell 6 . Theyre down 5. 5 in frankfurt today. Still to come in Worldwide Exchange, syngenta is feeling the pinch. Well find out how the business is going to cope in 2015. All that after a short break. Welcome back. Oil is back on the slide with wti below 52. Disney blows past wall street expectations as frozen fuels earnings and ford unveils plans to hike pay for some lower level eun youn union workers. Trading higher after analyst expectations despite currency head winds. Lets join carolyn for more in a sunny yet chilly day. Youre right. There are a number of headwinds. We have low crop prices and that gives farmers less incentive to invest in their Crop Protection and second of all you have huge head winds. They report a very strong dollar. It has a big cost pace where the swiss has been rising and has very high exposure to the emerging markets. So were seeing very volatile fluctuates there as well but its not all bad because look this company is also benefitting from the Lower Oil Price and that may not be visible as well in 2015 but certainly 2016. The lag effect for us is about 12 months so the decline in oil will have a tail wind and improvement in our cost base. That wont help us until 2016. That was the ceo of syngenta speaking to me this morning and the ceo pointing out that there is a chance that the low Oil Price Effect could offset the negative effect of the swiss franc. So 2016 looking brighter than 2015 potentially. Back to you. Thank you so much. Next up on Worldwide Exchange, were getting behind the wheel after the strong auto sales report. What does it mean for gm . Well discuss that next with an expert. The future of the market is never clear. But at t. Rowe price we can help guide your retirement savings. Our experience is one reason 100 of our Retirement Funds beat their 10year lipper averages. So wherever your longterm goals take you we can help you feel confident. Request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing. Call us or your advisor. T. Rowe price. Invest with confidence. Welcome back. Ford plans to move hundreds of entry level hourly workers to a higher pay rate in the coming weeks. A rare move in the u. S. Auto industry trying to cap wages. The move follows the decision to hire 1500 hourly workers to help meet the demand of pick up trucks. Ford will exceed a quota on the number of employees it can classify. That cap was put in as part of the concessions agreed to with u. S. Auto makers in 2007. Take a look at how shares are performing up about. 15 in frankfurt. General motors recently confirmed its sticking with plans to turn profitable in europe by next year. The fall out from the high profile ignition switch recall continues with the fund established to seeing a jump in applications before the deadline. Total claims filed reached 4,180. Sticking with the auto space toyota raised its operating Profit Guidance as a weaker yen boosts the value of overseas sales. It expects a report profit of 2. 7 trillion yen for the year ending march 31st. Chinas pmi Services Reading came in at 51. 8. Thats down from december. The survey indicates the slowest expansion for six months. Lets get back to more on china. This follows a reading earlier in the week fuelling concerns from china. Would that be the right move though . We find it hard to find individual Chinese Companies where we can call their profit outcome given the changes that we see. Theres many in china. Not least of all the Weak Oil Price. China as an expoiter of oil. The next six to nine months will suffer. But at the same time they have done a good job to try to deflate the challenges they have to deal with. Weaken the efforts and theres been fixed Asset Investment across china and thats being deflated. Now of course with that is concerns about longer downturn. Its hard to know where well end up. Is it underway in china . Its Global Equity funds. We dont own any chinese stocks at all but china has important ramifications for broader perspective on Global Economic outlook. Speaking of a slow down i want to bring the conversation back to whats happening in the u. S. Because a rekren series of lackluster data. Were talking about 2. 6 on friday. Manufacturing orders weaker than expected yesterday and factory orders disappointing to the downside. What do you make of the recent data suggesting the economy season as strong as some were expecting. Its going to be a concern if you see the prolonged downturn as they move through the coming two or three months. You have the market to other geographys around the world is more elevated. You have earnings divisions that are perhaps rolling over very very slightly. Clear the Oil Price Weakness is a big driver of that aggregate earnings downgrade that were seeing and concerns that wages are starting to rise across north american corporate. Thats great for workers but not for comfortability and ultimately its going to be a signal for the feds to think about raising Interest Rates. If this disappointing data continues to come out of the u. S. Does that put more pressure on janet yellen to delay the rate hike to 2016 as Morgan Stanley is outlining . Yeah overly focused on this drive. The fed needs credibility. People are much more concerned about where we see rates the end of 2016 rather than 2015. You got through the earnings season so far and yes the bar was lower priored to this. Were still seeing top line and earnings beats and while that can continue the markets can go higher from here. Is oil back in the bull market. It is. We are still underweight in the oil sector. Its quite frankly a little too hard for longer term bottom up stock pickers to call or indeed exploit. Some of the recent price action with wti crude down about 2. 5 . Some suggest the volatility in the oil trade will continue. Matt beasley always a pleasure to have you on. Thank you for your time. Still to come on the show all is well in the magic kingdom. Disney topping earnings estimates with a little help from elsa and the frozen gang. Well tell you more after this break. U. S. Futures reporting a lower open after the rally on wall street. The dow a lower open by 78 points. Nasdaq down 21 in premarket. More coming up after this short break. Breaking news out of china. China central bank is cutting its reserve requirement ratio that will be effective on february 5th. It will cut its banks requirement ratio to 19. 5 and also cutting its reserve requirement ratio by 50 basis points and again that will be effective february 5th. This comes after a series of disappointing at a at a. Weaker than expected manufacturing earlier this week. So perhaps the central bank saying they have to do more to stimulate growth in the country. Absolutely. The manufacturing figure earlier this week 39. 8. That was the First Reading below 50 for 2. 5 years. And 51. 8 down from 53. 4. Sparking this action by the Chinese Central Bank to cut that reserve requirement ratio by 50 basis points. They also said there could be a further 50 basis point cut for qualified urban Rural Communities depending on situations but at the moment 50 basis point cut as you can see. The move has seen aussie dollar spike. They did, in fact cut their own rates the day before and that meant that the aussie dollar declined quite sharply yesterday so a bounce back there in relation to it. Were looking at the dollar strengthen against the Canadian Dollar but look at the euro dollar. Weakening against the u. S. Dollar. The big story here is that the central bank has cutting its requirement ratio by 50 basis points as effective on february 5th. Remember the big Interest Rate cut came in november of 2014 when china cut its Interest Rates unexpectededly stepping up efforts to support the worlds second biggest economy. Indeed. We see gold spiking to session highs up. 7 off the back of this news fuelling gold of course. Interesting extra flashes coming out seema. They said they will cut it by an additional 400 basis points. 4 for China Agriculture and development. One of the biggest banks in china. So really target there had to ease the biggest state owned lender in particular. But the core point of course this 50 basis point cuts for the main. We were just pointing out currencies. We should point out that china has been strengthening against the u. S. Dollar for the second straight day tracking the Central Banks move to stimulate the economy through further intervention and this surprise news coming out of the China Central bank is sending it higher against the u. S. Dollar and as you were pointing out other commodity backed currencies strengthening on hopes to stimulate further growth out of china which is a big concern for Global Markets. Interesting, that move relatively muted compared to some of the moves on the aussie dollar up about. 7 . The chinese equity markets up. Did close slower in todays trade. The central bank said we have been getting a series of reports that confirms our economy isnt a slow down. We need to continue to be one of the biggest economies in the world. Thats definitely the reason. Pmi 51. 8 this morning. Down from 53. 4. More importantly in the week manufacturing pmi. Such a crucial gauge were china. 49. 8. Below 50 in contraction territory for the first time in 2. 5 years. So once again weve seen the Chinese Central Bank willing to react to shortterm slow downs in the economy. Some of the flashes coming out at the moment. Theyre saying they made this move to help keep the economy stable and they will guide appropriate growth in social financing and seeing a cut as we have said reacted to shortterm disappointments. And this of course follows that surprise decision by the central bank in november to cut their Interest Rate the first time in two years as some of the data coming out of china, specifically around pmi and factory orders coming in weaker than expected putting focus on the central bank to take action and stimulate the economy in response. We have been looking at futures trading lower. Spot gold trading higher. Up about. 7 . Commodity backed currencies have been strengthening. Chinas currency is also strengthening against the u. S. Dollar. Global markets responded to what the central bank announced today. These u. S. Futures still pointing to a negative open but much less negative than it was before this cut so were now expecting a small negative open on u. S. Futures down five points for the snp. Were still looking at the currency moves off the back of this decision as you can see. The aussie dollar in particular in focus given its such a dependent economy on the chinese economy. Lets have a quick look at u. S. Futures. There we go. The s p expected to open down 5 points. The nasdaq down 9 points. Much less than we were looking at a few minutes ago. And we should point out lets also have a quick look at European Markets still in the red despite this move. They have been in the red for the last hour or so pause oil has taken a sharp move to the downside today in particular following the strong bounce its had in recent sessions. Half a percent of declines. Lets have a quick look at the oil price before we go to break which is down a couple of percent today. Following that bounce back. Oil shares up about 20 since the low hit on january 13th but oil indicating a move to the downside but will this surprise decision by the Chinese Central Bank change the trade on oil . Well be discussing that with our next guest. In the meantime well take a look at disney earnings topping estimates in the First Quarter. More on earnings and the news out of china coming up after this break. [ male announcer ] at northrop grumman, we know in the cyber world, threats are always evolving. At first we were protecting networks. Then, we were protecting the transfer of data. And today its evolved to infrastructure. Finance. And military missions. Were constantly innovating to advance the front line in the cyber battle, wherever it takes us. Thats the value of performance. Orthrop grumman. Welcome back. The breaking news over the last ten minutes. The Chinese Central Bank cut the reserve requirement ratio by. 5 in response to weaker data this year. Manufacture pmi was 49. 8. First time 2. 5 years below 50. 51. 8 down from 53. 4. Weve seen the likes of the aussie dollar rally. Were joined on set. He is showing they are just always willing to react to the shortterm data. A little full of surprises. Tends to do this when youre not expecting it. Big headline this morning is resisting an Interest Rate cut. Whats interesting though that we have been talking about is they cut it a few months ago and we havent seen any of the effects of that so far. The chinese governments priority is of course what they say so that means taking some tough medicine and stepping away from these bigger policy moves so people started to doubt that more was on the way, Something Like an Interest Rate cut. Its much of the last two years before the last triple archive. This morning 2. 4 2. 4 trillion in infrastructure across the provinces in china. Thats a very large stimulus package even for a central bank that says or country, because in china the central bank is associated with the central government. It means less liquidity into the system and things like infrastructure because theres been a lot of spending. The Financial Sector and banks have been hit hard recently because of this ruling to cut the reserve ratio by. 5 from the banks. You also really want to look at the property developers. The banks have other competing factors. So the measures that are still gone, you want to remove the ceiling and floor on some of the deposit requirements but certainly for the property developers, for the government and the reason they have been resisting these bigger policy moves is because so much of the money is into the property sector. It takes up 25 of the economy. In china, you know that has been on a downward trend as well. It does make up so much of gdp there. If you look at the comp gattis index you can see a strong rally and significant out performance and i wonder whether this rate cut will fuel. Retail participation at the end of 2017. In the chinese marks its all largely retail investors. Thats a very good point. We saw the effect of our last triple archive in the equity markets. We havent seen it on the ground. You want to take a look at the Services Side because its gaining in important and that started to weaken as well. But also the employment sub indexes within the pmi numbers. That may be what pushed them to actually act this time because with them saying they want to act, 100 million jobs how can you do that if economy is slowing. Theyre number one priority is stability. Thats what theyre trying to do here. It seems they may be going away from that because if youre talking about reforms youre not creating asset bubbles which this could potentially do and thats certainly a danger. With debt to gdp at 250 and still rising one does question whether its worth searching for those arbitrary growth targets and turning in the tax again when debt is already so high. Absolutely. You take a look at the loan numbers. Loans from banks have been decreasing over the last month but in this shadow Banking Sector huge. So thats certainly something to watch. Thank you for now. Its immediately after the Chinese Central Bank sector cuts. Lets remind you of the key headlines. China sennal bank cuts its reserve ratio by 50 basis points. Wti below 52 and disney blows past wall street expectations as frozen fuels earnings. Well be back in a couple of minutes. A surprise move despite weakening fundamental data. The reading below 50. 51. 8 compared to 53. 4 that came out earlier today. Weve seening the aussie dollar hit session highs. It has moved lower after that. But its now roughly flat for the days trade in. 78. This move by the central bank basically allows the banks to reduce the amount of cash that the banks have to hold as reserves. This reserve requirement in ratio points. Its the first time we have seen the move since may of 2013 but at the same time many analysts here have been coming on to say that Central Bank Intervention is expected. Further intervention is expected given the weak set of data points youve been getting out of china. Specifically the pmi Services Data coming in weaker than expected. Put mrg focus or pressure on the central bank to act and stimulate the chinese economy. Global markets have been responding. Specifically in the current sy space looking at commodity backed currencies like the aussie dollar. Gains in the last ten minutes. Weve been looking at the dollar strengthen against the Canadian Dollar. The euro though holding at 114 against the u. S. Dollar. Lets get out to larry mcdonald. Senior director at new edge usa. Im happy to have you on the show today because we want to get your instant reaction to this move by China Central bank cutting that reserve by 50 basis points. What does it mean to you . Its clear over the last year in china you had a big shift in policy where a year ago or right about now the government was trying to curtail risk and take a conservative step toward managing risk in the leverage in the system. And now has the employ slowed down they completely reserved course. As you say the word panic there, theyre trying to hit the arbitrary growth targets but debt to gdp is so high. Is this the right strategy for the chinese economy in the longterm . I dont think so. If you think about 2007 in the United States we had a chance to regulate those that had exploded maybe 500 or 600 increase in the amount outstanding in Corporate Bonds or structured products and our regulators let it go. It helped the economy for a year and a half. The market is a beast. If you just let the market go on eventually bad things happen. What else needs to happen in order for chinas economy to pick up . Because the central bank of china says this move to cut the ratio by 50 basis points will help keep the economy stable . It will guide appropriate growth in social financing. Well the most interesting thing ive seen in china over the last six months is as they provided more stimulus youre getting a diminishing return in terms of gdp. So theres something going on in the ecosystem or the insfra infrastructure between the government and regional government. Even though theyre giving more leeway here and allowed more debt expansion but theyre getting return of gdp expansion from the risk theyre taking. Theyre in a much more difficult spot than a couple of years ago. Is it a surprise we havent seen more of a benefit in the chinese economy from the Weak Oil Price . Thats a tough one. The consumers there, consumers are like 35 of gdp versus Government Investment is still 60 or so so you dont have a big consumer thats spending lots of money. Lets also just mention the performance in the chinese shanghai a market. Of course the market is closed at the moment following after the market closed but in december and november we saw an unbelievably strong rally in that market which followed a main eight cut. With this cut fuel in a similar way . I think the most interesting thing to watch is the band. Weve been up against that upper band, in other words theres a stealth deval youuation going on. The euro is weakened. Thats going to hurt the chinese economy. It goes back to the currency wars. You had a really damaging effect on trade thats happened because of the euro to china and you have to wonder what are they going to do . Expand the band again or do this walk down stealth devaluation. It creates a lot of problems for china. Stay with us. Well be back to you in a couple of minutes. We want to touch on the other big story impacting Global Markets today. Thats the developing situation in greece. Julia is standing by with an update. Thanks so much. Well obviously two very important meetings for the greeks today. We had the finance minister meeting mario draghi. They were talking through the details of whether or not the greek banks will continue to get funding and more broadly whether the Greek Central Bank will be able to fund the country through the next few months and when the program ends in february. So that was the basis of the discussion. Here in brussels the Prime Minister was talking to European Commission head with more broader details of this program. A far more softer tone coming into this. More debt swaps and debt repayments linked to gdp. So a far more constructive basis for discussions but the red line here is that the country needs to continue to reform and theres going to be no negotiation as far as thats concerned even if we see less oversight Going Forward and thats something where the commission is able to soften on. If you look at the markets over the last 24 hours they expect to see a shortterm interim agreement being made. Longer term you have to expect more radical ideas Going Forward. Still a bumpy road expected. Back to you. Thank you so much. The ecb were expecting, if there will be a debt sale approval thats something we will be watching today as finance minister of greece meets with mario draghi. Larry i want to get your thoughts on whats happening in greece. Theres hope that the greek negotiations around a bailout term would come together. If so would you be a buyer here of greek debt . I think you want to watch. The jury is still out in terms of monitoring. So you have a government thats going to borrow money from investors and they juanwant to convert this debt to equity. So you have to say if the new debt is going to be linked to gdp you need an independent observation vehicle within greece that can monitor the gdp because you dont want someone borrowing money from investors telling you what the gdp is. You need an independent body there and the post interesting thing is whats happening in spain. One of the best parts of working with new edge and sock gen is the global observation that we have now for our u. S. Clients. We have been watching spain very carefully because the rise in greece is starting to leak over to the party in spain. Thank you very much for that and for joining us today. Much appreciated. Senior director at usa cnbc contributor. Lets get out to more surprise from the Chinese Central Bank. Eunice youn joins us on the phone. They decided to cut the amount of money banks needed on hand by 50 basis poinls. It cut the reserve requirement ratio up for banks here and whats significant is its for all commercial banks. Previously the central bank made cuts but it was a very selective decision in the past. This is an indication that the policy makers are growing increasingly concerned about the economy. We also had Services Numbers that came out today which came in at a six month low showing that the economy hasnt been growing at a pace that the policy makers at this stage are very comfortable with. Theres been a growing chorus of economists here who have been talking about the link between the gdp and job creation and the conventional wisdom is that the policy makers will be making decisions based on jobs growth. The jobs growth has been holding up and there is more concern because there is such a strong link and as we saw in the Fourth Quarter of this year. Im afraid to say thats all we have time for here on Worldwide Exchange today. U. S. Futures are pointing to a negative open. Slightly less negative than before the rate cut. Thank you for watching. Squawk box is next. China moves to boost lending by boosting reserves banks are required to hold. Disney beats the street on strong performances for its theme parks. Tv networks and movie studios and can you imagine a night without netflix . Customer outrage after an hour long outage at the video streaming service. Get a life. Go outside. Read a book. Call your mother. Its wednesday february 4th 2015 and squawk box begins right now. Live from the most powerful city in the world, new york this is squawk box. Good morning, everybody. And welcome to squawk box here on cnbc. Im becky quick with joe kernen and andrew ross sorkin. At least 13 people are dead after a commercial flight crashed into a river shortly after take off. There were 50 passenger and crew aboard. The plane clipped a bridge and crashed into the water. That aircraft belongs to transasia. Thats terrifying video. In the United States a horrible train crash in new york city last night in the suburbs there. A crowded commuter train slammed into an suv on the tracks. It happened at rush hour. Seven people were killed. At least 12 people were hurt. Most of those people were in the train. At least one person on the vehicle. The crash caused the vehicle to explode and it set the front of the train