Industrial output numbers that rose a stronger than expected 9. 7 . Retail sales were in line with forecasts. Economists say the china Inflation Numbers are a bit of a concern. Consumer prices unchanged. Producer prices fell by 2. 3 . As for the rest of the markets in asia, the nikkei fell 6 for the week. Wow. Early trading in europe this morning wow. Those numbers add up over the course of the week. Saw big declines, like 3 in places. Dont rub it in, please. You know thats my prediction. Japan is number one this year. Now im still up how much . 34 . Ireland is up 23 . Im still ahead. Do you have a target . No, it would be the single best developed market this year. Made the prediction on december 2nd. Im still up bet getting nervous. Are you . Not really. I didnt think so anyway. Well check in with Ross Westgate to have more about whats been happening around the globe in a few minutes. Brian . In geopolitical news, the u. S. Ordered all nonessential staff to leave consulate in lepore, pakistan, due to a specific terror threat. Theyre also warning american citizens not to travel to pakistan. Meantime, president obama will hold a News Conference this afternoon at the white house before leaving for vacation on marthas vineyard. Andrew . We got a couple of corporate stories to talk about. Big one, the jpmorgan now reportedly close to reaching a settlement with security regulators over the socalled london whale trading losses. Bruno iksil, he was the whale in some ways, hes not expected to face charges related to the incident. Apparently, by the way, hes talking and made some kind of deal or may be making a deal with the s. E. C. The other component of this is that as part of whatever settlement the s. E. C. Reaches with jpmorgan, they might have to admit some form of wrongdoing or some form of admission why would the s. E. C. Cut a deal with that guy when he was the rogue trader doing things that the management at the bank unclear he was the rogue trader. It seems like what has happened is as the story developed that his boss and his boss boss may have been more rogue than he was. Not iona drew. A few layers a couple of layers in london and that may be where the problem is. The issue ofe iing jpmorgan to admitting guilt, but toss not just about admitting it or how much money you pay the s. E. C. , it is once you admit it, all the derivative lawsuits that come, and so there say lois a lot of looking at this decision. Also in an unrelated story, reuters reporting the department of justice has stepped up a probe into bear stearns. Get this, were back to 2008. Their mortgage dealings in the runup to the financial crisis. This could also add to jpmorgans legal problems because if you remember, of course, jpmorgan bought bear stearns with the governments encouragement in 2008. A mess. Yeah. Blackberry is said to be warming up to the possibility of going private. Reuters reporting that ceo Thorsten Heins and the board are increasingly coming around to the idea that taking the Company Private would give them breathing room to try to fix problems out of the public eye. No deal is imminent and sources tell reuters that blackberry has not launched any kind of a sale process, at least not at this point, but you can see the stock is up 8 , trading last at 10. The company being advised by jpmorgan. Speaking of Companies Going private, t. Rowe price, the firm has been one of the most influential opponents of michael dells offer to buy out the pcmaker. Michael dell writing an open letter to employees about the deal, he writes in part, i believe that the offer delivers full and fair value for stockholders and is best for the future of our company. Importantly, the revised transaction he says also enables us to enact the will of the majority of voting stock holders. Remember, those were the change in rules that he and carl icahn have been fighting over. A check on your mash ets on this friday morning here. As becky was noting, watch out, folks. It has been weak lately. We have seen a weaker trend for the last couple of days than we have seen pretty much all this year. And mark faber has dire warnings about im not giving away the future story, becky, but you want to listen, mark faber, who tends to be negative, thats why his report is called gloom boom and doom. This one is a doozy. It is a doozy and a doomy and hes got some really negative comments on the market youre going to want to hear. Thats why we call it a tease. Dow futures implying a drop of 46 points at the open. You care about oil because you probably drive around on summer vacation. And it trickles down to gasoline and things may get expensive Going Forward. Were seeing all the they call it hydro carbon going up this morning. Wti, brent, gasoline, wholesale gas and natural gas all higher by about half to 1 this morning. In the bond market, tenyear treasury note yielding 2. 594 . Mortgage rates remain flat, week over week. In the currency markets, which we got a guest on here, nick broke will discuss what is happening. Were seeing euro dollar at 133. 78. For gold bullion, gold, after a run the last couple of weeks, has been weaker this week, though were up about 1. 50 an ounce to 1311. 40. Gold has had a crummy year. Now time for the Market Report where we find Ross Westgate who is standing by across the pond in london this morning. Good morning to you, ross. Good morning to you. Pretty even stevens now for advancers versus decliners. If anything, slightly weighted to the downside, pretty much five to five right now. And really tracking to see where we finish the week on what happens this afternoon in the u. S. For the bounceback we got yesterday. Looking at where we stand with prices, see the ftse 100 is the standout right now, up 11 points. The rest of the mark, xetra dax, ftse down. 2 to a half. The reason the ftse is standing out is because of chinese data. Chinese industrial output up 9. 7 in july, a better than expected performance. Retail sales up 13. 2 . What that has done is boosted the resource stocks, resource stocks in london on the sectors breakdown, best performer today, followed by telecoms, real estate, household goods, food and beverages are down. Telecom outperforming, kpn, america movil, carlos slim, 9. 6 billion bid for the rest of kpn that it doesnt already own. Challenging a rival offer for kpns german business. Telefonica last month made an 11 billion bid for kpns crown jewel, which is the german business eplus. And that cast doubt over america movils expensive on paper currently lossmaking investments in kpn, which they made last year. So the stock of kpn up 16 , but really it is about carlos slim wanting to get his hands on germanys eplus. And some say it is also a sense here he could wait it out, you can get the stock cheap right now and wait three or four or five years and the macro environment in europe will turn around as well. Talking about macro environment, quick look for you where we stand with debt prices. Were going to start a major privatization plan later in the year. Yields pretty contained, still very low, 4. 2 , ecb doing its job. Thats where we stand in europe. Back to you. Have a great weekend, sir. Well see you next week. Thank you very much, becky. Were keeping an eye on currencies this morning. The indian rupee falling to a record low versus the dollar as the reserve bank of india struggles to tighten policy. The dollar is getting hit hard against the euro and the yen. Joining with us more on this now is nick beninbroke, the head of currency strategy at wells fargo. Nick, watching the dollar over the last week, ive been scratching my head trying to figure out what is going on, especially when you look at the dollar versus the yen. It is down 2 just over the last week. And you would think that with the fed signaling it is going to be tightening or at least tapering, that the dollar would have a little more strength, especially with some of the strong economic numbers we have gotten. What is going on here . Yes, ive been scratching my head a little bit too. I think there is a couple of issues that are important. Number one was that payrolls report we got last week which was a little subdued and the bond yields remaining relatively well behaved here in the u. S. Right now. So we have got a short holiday, short lull before we refocus on the Federal Reserve. I think thats probably weighing on the dollar a little bit. The other thing we have seen, i think, over the past month is if we remember back to early july, both the European Central bank and the bank of england were particularly concerned about rising yields and sounded super dovish and we didnt really get anything extra from them in august. So i think the contrast between what is happening in the u. S. On the one hand versus the rhetoric we get out from the europe is not quite as stark in contrast and thats another reason why were not seeing the dollar do very well, it is on the defensive. If you pull back, and look at a slightly higher level instead of every tick anding ing ttock a situation where the bank will be poised for tightening versus Central Banks in other places like europe and japan that are nowhere near getting to that point. I dont understand. What do you think is a fair valuation for the dollar versus the two currencies . The fair valuation is higher. We look at some of our targets for the euro dollar rate, were looking for that to move to 125 over the next 12 months. For the pound, not quite such a large move, maybe down 2 to 150 or so. I think it is a reflection of the very short, you know, extremely short time horizon and i agree with you, i dont think the state of affairs is going to last forever. I think as we move to september, despite the comments we have seen from the fed, for sure i believe theyre going to be reducing those bond purchases soon. Probably get a decent payrolls report at the start of september as well. I think come september well see the dollar recover. Do you think this is a buying opportunity for the dollar . The dollar index alone down 1. 6 over the last week. I think so. I think as we approach september 18th, and i think september 6th is the day that payrolls report, july, just about every figure was strong except for the payrolls report. That was an important exception but the outlier. We look for strength and dollar to strengthen as well. What is happening with the rupee in india . The rupee obviously is struggling and the reserve bank is in a difficult position because they have got an economy that is underperforming, not really attracting a lost foreign capital in terms of bond purchases or equity purchases. Usually the central bank might actually be lowering rates to try and boost growth and attract that capital into the country. Especially from an equity perspective. The issue they have, of course, is the currency is so weak, and possible inflation that they really are have their hands tied and cant reduce rates. Theyre on the defensive. What happens in the u. S. With rising bond yields of the Federal Reserve does go in and reduce purchases thats going to make things difficult as well. You think it is a story of a continuing weak case for the rupee, particularly against the dollar . I believe so. There is, you know, there is limits as to what the central bank can do itself. It certainly tried a few different things. It raised some of its liquidity rates. It also is trying to absorb some of the additional liquidity. But it is going to need some help globally and it doesnt look like it is going to get that right now. It looks like if we get some a little bit of volatility with respect to, you know what is happening with the Federal Reserve, i think the rupee is more vulnerable than most. We see that currency moving from around about 60 per dollar right now, just to 62. 50 to 63. We think the rupee is going to weaken. What is your favorite currency right now around the globe . I think the favorite currency is probably the u. S. Dollar is right up there in terms of the majors. You have to probably look a long way out in terms of thinking about currencies that could recover. But as i say, im still very focused on what could happen soon with the Federal Reserve. I think when that happens, well see higher bond yields and well see stronger dollar as well. This is entirely tied to the markets reaction by driving bond yields higher . I believe it is. It is not entirely, but in early july it certainly was. That whole theme moved to the one side for a little bit, but i do believe well see that theme come right back and, yes, it is very much focused on the thank you for joining us this morning. Thank you. A corporate fight that people are still buzzing about this morning, and this is really a story that came out yesterday and still has a little bit of confusion, at least for me. Well try to clear it up. Jcpenneys board responding to bill ackmans most recent letter in which he called for the retailer to speed up their ceo search. He also suggested former ceo Alan Questrom return as the new chairman. The board says the companys made significant progress since mike ullman returned to ceo four months ago. Ullman was the ceo, left and now came back. The board says the ceo has an overwhelming support. The chairman says the board was extremely disappointed. Ackmans letter released to the media at the same time it was sent to the board. You spoke with questrom, right . Everybody was screaming all over sort of the twitter sphere yesterday about what the story really was here. Ackman seems, in his letter, which i read you probably did too, seems to say that questrom has pretty much said im coming back. But questrom told you what . Questrom told me that he had told them told ackman he would consider coming back under the right circumstances. My knee jerk reaction is i look the up at the screen and saw Allen Questrom sourcing ackmans letter saying he was saying ackman that it was sourcing ackmans letter saying questrom was coming back to jcpenney. Ive known him for a long time, i used to cover retail. I picked up the phone and called questrom. I call his cell phone. Ive known him for over a decade. I said, youre going back to jcpenney, i said whats going on . He said, whoa, back it down a second. He said he would consider it under the right conditions but the right conditions include it not being a hostile situation. And questrom supported ullman going back as the ceo and part of this is ackman kind of knocking ullman, which now you have everybody from the board of jcpenney to Howard Howard schultz. Starbucks defending ullman. I dont want to trample on bill ackman. I dont know the guy. I think it is a hazy story. It seems like two i mean, let me know what you think, it seems like, a, ackman maybe jumped the gun in his letter suggesting that questrom all but agreed to come back. But questrom had talks with him. They started out about four or five months ago. But conditionally agreed to return was the verbatim. Thats stronger than what questrom told me. What he told you. And he was on the air, on cnbc. And isnt andrew, last point, isnt ackman also making an end to round around the board . Thats a hostile situation at that point and questrom laid that out as a condition he would not return under. I dont understand how you can be a board this goes back to either you want to be a board member an insider or outsider. If you want to be outside the tent, throw darts and arrows and whatever you want all day long. If youre inside the tent ackman is inside the tent. Thats my point. Hes throwing darts at the other people inside the tent. Yes. The board was furious that this letter came out and found out by watching it on cnbc. It is a bit of a mess. But in talking to questrom two pieces to this. One, he clearly it is clear whatever bill ackman is trying to do inside the board is not working. And therefore thens going to the media, and therefore whatever his relationship he had, if he had one at all with the board disintegrated even hes trying to knock out the ceo and the chairman of the board. But the last piece is that whatever you think of bill ackman, at least on jcpenney, he doesnt have that much credibility left given what happened the first time around. So ackman has a long track record, he has equity in other areas. I still think it is a very screwed up company, but on jcpenney alone and some of the other retail plays from a more fundamental basis, suddenly jcpenney because of ron johnson went to a sleepy retailer to one of the hottest corporate stories in the world, you look at jcpenney now and the problems they got, forget about ackman and all this stuff, the fact is we dont know who the ceo might be four months before christmas. It is three weeks in backtoschool season. This is incredibly important part in time. He was very surprised the board wasnt further along in finding who was going to be the permanent ceo. He said there is he thinks about the people who would be right for it, he thinks four to five people, could have conversations with those four to five people very quickly and figure it out. If im ackman, and my wife works in retail, we talk about this kind of stuff, wait until january to do this, get through the holidays, get through the incredible what is it, 40 of your sales come in the last three weeks of december. They have already taken all the merchandise. Everything they plan on having on the shelves in christmas, the orders have been put in, the merchandise is there. But the strategy may not be there, discounting and management and inventory and stuff. Seems look a slipup by ackman. Watching the stock yesterday, the stock was up 8 on the news on what, though . On the news that questrom was potentially coming back. It was up 8 . If you look this morning, it is down 3 . There is a lot of back and forth. This is complicate gld thed. There are times ive had situations like this. Times when Board Members have talked to journalists because theyre not getting their way on the board, theyre convinced if the rest of the board saw if if this news they were contemplating was out there at all, the stock was as high as it was and it would pressure the board to make the same decision. If youre mike ullman, the old ceo, the new ceo, we did a whole thing on street signs, we talked about jcpenney for a long time. A great guy. Yes. And now you got us basically we had guests on, former Department Executives who said they would like to see ken hicks who is the ceo of foot locker come in and if youre ullman and watching cnbc probably as most ceos do and seeing your name in a graphic and seeing who is going to replace ullman and ackman is saying how did i come back . In ullmans defense, he stabilized that company when he came back in. A lot of the suppli