Election day. And plus japan records its sharpest export since last years devastating earthquake. Raising fears the worlds third biggest economy could be slipping back into recession. Its the start of another week here on on worldwide exchange. Kelly is state side helping to host squawk on the street. P meanwhile plenty to come still on todays show. Here in london, protesters have been marching against austerity. One of our reporters was there. Demonstrators took out their anger on multinational companies. In new york, wall street a underwhelmed as Corporate Giants like ge, part owner of this station, had cautious revenues. Well pibd out if cat pill what are and yahoo will buck the trend or affirm it pnd and obama and romney squaring off, who is likely to deliver the knockout below. We start out with the focus squarely on earnings. Fill whips beat expectations. The firm which traditionally kicks off Third Quarter earnings season said its on track with its cost savings plan. Ceo says the firm is pretty well placed to hit targets. Im concerned about the state of the general World Economy. We see uncertainty in the u. S. And china slowing he can but phillip is self help. Were so focused with driving our own improvements that i believe were on a good path towards our targets. So phillips doing okay in europe, but elsewhere the numbers paint a more dismal picture. 78 Companies Surpass expectations on on the bottom line, but only 42 beat on on revenues. And 38 hain the last week. And this clocks in well below the 62 long term average. Joining us for the first hour, james bevin, ccla investment management. James, thanks for joining us. How concerned should investors be about the Revenue Misses were getting . Im much more interested in the margin misses because revenue in the sensepr predictable margins can be much more tragic because it speaks volumes about diminishing returns. And i think in terms of earnings expect takings, the s p will probably again have to see a significant down shift in the consensus for 2013 earnings, to perhaps less than 100. So we need a repricing . I think equity pricings should go up. Despite the absolutely. You might have to explain. What is clear that were in for a period of very low interest rates, very low bond yields. Im not one of the people who says the bond yield will rise dramatically. Because some banks will keep the lid on the continue. Theyll continue quantitative easing. I expect to see more quantitative easing. I expect to seat bank of japan and euro land both coming up to the season with much more quantitative easing following the lead of the bank of england and federal reserve. And when we get there, i think there will be a tethering and in that environment, we should be paying higher priceses for real growth in the equity market. On that basis, i think the s p 500 is heading up to 1500 points, not based on an explosion of earnings, but just an expectation that people should pay more. Interesting thesis. Are we in somebody described this as a next can standoff between the flood of liquidity and then concerns surrounding the basic economy. If youre going to have a lot more qe, its because the economy isnt performing. And also because of fiscal cliff and you say where do we trace all these problems back to. It has to be the realty that both economies are still deleveraging. The medicine is not fiscal spending. The hard reality is the government will have to continue to spend less and thats very difficult for economies in the near term. Central banks will keep money rates and Monetary Policy extraordinarily easy relative to business as usual. We ought to see more debt write donees a downs and writeoffs. You say consistent with around 3 gdp growth. Absolutely. But all the time you look at the gdp numbers that are backwards, revisions and everybody is gloomy. If you you simply take the lead indicators and joan them up in terms of the historic relationship, we are looking at an acceleration of u. S. Growth largely based on the u. S. Housing market and parts of corporate spending. Although the fiscal issue, if we fall off it, they say that take as percent of gdp. This year fiscal tightening is worth about 1 of gdp. Fiscal cliff probably 1. 5 of growth. Thats wellknown. That should therefore be in the price. Its excitement, isnt it . What is fascinating is when the market is wrong footed. And i think the market is relatively bearish. All right. Good to have you on. Plenty more to come from you. Heineken reports tomorrow on wednesday we have numbers out from vw and volvo and on thursday, santander and Credit Suisse also report figures as well as unilever and wbp. In the u. S. , well be looking at figures in cat pill ar and yahoo . Facebook is later on in the week. You can read up why the stock selloff may be limited. And if you want to join the conversation here, you can get in touch with us worldwide cnbc. Com, at cnbcwex. Staying on the corporate theme, bp has confirmed it is in advanced talks with rosneff to sell its stake, but no agreement has yet been made. The oil giant said a further announcement would be forthcoming if and when a deal was made. They would sell the stake in exchange for cash and rosneff stock. Were also joined by Neal Atkinson at data monitor. Good to see you. Thanks for joining us. Bearing in mind weve been feeling bp was frozen out of russia, if they manage to do this deal, does it get them back in the game in a big way . Because they could i suppose reenergize the thought of a shore partner. Takes potential to energize, yes, but lets get the gloomy bit over first. I wish i had used the phrase first out of the frying pan and into the fire. Obviously the history of the tnk bp relationship has been pretty bad. At one point bob dudley physically intimidating and so on and so forth. So that was brouound to end in divorce in some way. Rosneff does employ bp potentially massive advantage over the next 20 to 30 years in terms of getting access to russian resources. And for Companies Like bp and it peers, access to resources so theyre able to grow production is the holy grail. That is somehow shareholder value will be created. If and when it does go through, and it looks highly likely that it will, its a game changer for bp, but it does carry huge political risks. And thats very difficult to speculate from this point. Can you quantify . Rosneff for all intents and purposes is crumbling oil ink and the head of rosneff is clearly very close to mr. Putin. And we have seen in past behavior from mr. Putin towards the Energy Sector that attitudes can change, people can fall out, there can be abrupt changes in attitude towards foreign investors. And bp potentially and we dont want to overrate it might find itself in a few years side dealing with different people with different attitudes to foreigners and it could find themselves thats the oil business. In russia. Not necessarily the oil business everywhere. All those of course as you were henti hinting at, russia isnt the only one that can behave irrationally. Tnk was threatening to hold dividend payments, but reports suggest rosneff profits, bp a 19 shareholder, received a 540 million payout. So enormous cut. Would that worry you as an investor . Certainly worries me because when i look at the global oil sectors, bp is just one of many and when i compare bps position to that of chevron, i would much rather be buying chevron right now. I suspect youre probably right. Bp is of course at a period in it history which has seen some of its darkest ever days. But if this russian deal does go through and if moving on to another issue bp is able to get some kind of closure with its mexico liabilities, then potentially bp is back on a relatively smooth path. Having said that, of course its taken an enormous amount of damage since the gulf of mexico disaster. But, yes, as of today, i think id rather be with chevron but i wouldnt give up on bp at all. Lets move on to the canadian government. The bid for the canadian bid has been watched and we have this report. Resources nationalism a term typically applied to emerging countries, but after canada blocked the pat troe mass acquisition, many are opening how canada is to foreign investment. Also claims to the deal wont bring net benefits to the country. Supporters say that the government has been short on the precise reasons as to why they have blocked this deal and they have been short on transparent city. What we know is petro bass has 30 days in which to adjust the terms before a final decision is made. Speaking to us here the Energy Minister was very pragmatic and there were alternative investments that malaysia could pursue. If we have an opportunity to i invest in canada, of course we will be happy. On the other hand, if canada finds that such investment is not welcome, then we will go to other countries. At 5. 2 billion, this isnt a blockbuster deal. But if the progress does fall over, it could spell trouble for the 15. 1 billion acquisition of maximenergy. The other is the broaden asian angle. Canada cannot afford to ignore asia and the massive demand. Public opinion poll shows a lot of unease, but its ironic because what the Prime Minister of canada Stephen Harper has been in asia recently a couple weeks ago the four premieres were in china. What were they all doing . Saying asia youre our market, we want to sell things to you. So its a two way street here. The next step in the story is mr. Petromas will sweeten the terms or severimply walk away. So are they shooting themselves in the foot . I think this is an odd decision on the part of canada. Dan yurgin just alluded to it being a market for asian exports. And of course the United States is seeing a resurgence in its own Domestic Production of oil and gas. Which isnt to say canada will be shut out, but the u. S. Will become more selfsufficient. Canada will see booming production of oil and gas itself in years to come and asia which is the biggest growing market is an obvious place. And to have a partnership with a company like petromas would appear to make sense. One wonders if theres domestic politics they blocked the lse bid. But you can understand that because these are Strategic Reserves and once theyre gone, theyre gone. Maybe slightly more take strategic than degnome. Its very intriguing how little weve seen protectionism rearing its head through these difficult times. If you said what is the next potential shoe to drop, it would be a resurgence of protectionist policies. James, you stay, neal, you go. Thank you very much and have a good week. We understand that European Parliament committee is advising to oppose the appointment to the ecb board. Asked to propose a different ecb board candidate. The reason to say we advise against it is gender diversity is an issue. European parliament cant veto board appointments, it can only advise. Lets bring you you up to speed where we stand. Earnings aside with the general asset market prices with the asian update. Asian markets finished on a mixed note following dis disappointing earnings from the u. S. Shanghai composite turned higher in the afternoon session as ban banks recovers. Big energy and shale gas plays outperformed. Bpoc backed newspaper said china has no grounds for more monetary easing, but investors continued to eye are market relations that will lower money rates. Developers and financials helped. China mobile gained ground ahead q3 earnings. Nikkei posted it long he was winning streak in more than a year. Hope for more boj action. Exporters also got a boost from the weaker yen. Shares of sharp jumped over 7 on reports that its lifting its igzo it is play output. More on that story a bit later in the show. Elsewhere, south koreans kospi recovered some lost ground to end marginally in the red. Large caps ended mixed ahead of earnings this week. The asx 200 pulled back on mining and bank and defensive plays, but green corp shares soared after investors bet on a bidding war following a 2. 8 billion offer from u. S. Rival adm. India sensex now higher by about 0. 6 . Ross, back to you. Thanks for that. Here advancers outpacing decliners by more than 3 2. 2 gains for the dax. Down 11 points for the ftse. Xetra dax down a quarter. Slims losses for the cac 40. Ibex currently down a third of 1 . But we did see yields last week in spain and italy down to eight month lows. A little firmer today. But remember, we got down below that 5. 3 level. Ten year italian yields, 4. 76. Well keep our eyes on treasuries. Gilts are substantially higher. As far as currency markets are concerned, euro dollar, 1. 3029, so off the one month high. Dollar is firmer against the yen. Nearly back up to well get into japan in a moment. Trading 1. 6 on cable, as well. Mean while in spain, the Prime Ministers party, hes sort of got through the Regional Elections fairly comfortably, but is it a boost for the governments austerity plan. Well be in madrid. Bob. Oh, hey alex. Just picking up some, brochures, posters copies of my acceptance speech. Great its always good to have a backup plan, in case i get hit by a meteor. Wow, your hair looks great. Didnt realize they did photoshop here. Hey, good call on those mugs. Cant let em see what youre drinking. You know, im glad were both running a nice, clean race. No need to get nasty. Heres your honk if you had an affair with taylor yard sign. Looks good. [ male announcer ] fedex office. Now save 50 on banners. Rajoys has been given a boost after the government won 41 seats in parliament. 18 for socialists and 16 for the two nationalist parties. Elections saw the National Return to you power with 27 seats and that compares with 21 for a Pro Independence party. Leader pledged to work with other parties if elected. Jonathan house is in madrid. Thanks for your patience. What impact if any do these Election Results have on the political process in terms of spain and timing and asking for assistance from the eu . I think this is a moderately positive result for rajoy. He has actually expanded on his parliamentary majority in the Regional Parliament in the galia region. He had a poor showing in the bags country, but theyre sort of outliers in that they are sort of regional nationalist regions where the conservative party had never really done very well. So thats the poor result is in the really a surprise. Im not sure the bailouts was a big part of the the calculus as far as timing. I think probably the key factor there is market pressure on him to come forward and made the bailout request. Right now Market Conditions are pretty benign, so i think the government thinks they can take their time on that. Whats going to happen for this proposed reform in catalonia . The referendum i should say rather than reforl. Reform. The first step is Regional Elections. The Majority Party there has said that after the vote it plans to call a refer run dumb. So first we have to see what the outcome of the vote is and then we will see what happens with the referendum. This is potentially a pretty serious political challenge for the government of rajoy and the Constitutional Order in spain. Constitutionally, a referendum called would be illegal, not recognized, but theyre making sounds that they they will go ahead and do it anyway. So its potentially a pretty important event. Whether we ask for whether the Government Asks for assistance or not in the short term, unless the economics improve dramatically, what happens with the politics . Is the politics likely to break things before the eu does . Well, the thing is right now in spain, the main opposition, the soeshist party, the spanish social list party, is practically knocked completely out of commission. Theyre showing in the elections last night they sort of set new lows for the party, i believe. So that gives the ruling party of are a ohio who already has a parliamentary majority by the way, but the weakness of the socialist socialists gives them a lot more breathing space. Jonathan, thanks very much for joining us. Still to come, japans trade data shows its territorial troubles with china are taking a toll. But could the dispute push the worlds third biggest economy back into recession . Well find out when we come back. Earnings season if europe kicks off with a spark. Phillips beat expectations thanks to cost cutting and solid sales growth. Ceo is worried about macro headwinds. Good im concerned about the state of the general World Economy. We see uncertainty in the u. S. And china slowing. Of the genera. We see uncertainty in the u. S. And china slowing. Bp confirms talks with rosneff, but no decision has yet been made. And president obama and mitt romney head into their final debate tonight. New poll shows theyre in a dead heat with just two weeks to go before election day. And japan records its sharpest drop in exports since the aftermath of last years devastating earthquake, raising fresh fears worlds biggest economy could be heading back into recession. We start off this week on a fatherly tepid mixed note. Bond yields, we moved off the 7 1 2 month lows that we had in spain and italy, spain yields 5. 43 . Certainly no rush to request assistance just yet. Current city m currency markets, u. S. Dollar steady. Dollaryen firmer again up 79. 67. And thats after japans posted a wider than expected trade deficit in september. Exports dropped their sharpest pace since the aftermath of last years devastating earthquake. There are concerns they could slip back into recession, but the bank of japan governor says he still expectses to resume a moderate recovery. Although hes added the bank will continue to main taken an easy monetary response keeping alive hopes of further stimulus. Bank of japan meets october 30th. Joining us for more, martin schultz. James is still with me in the studio. Martin, good to see you. Whats your own interpretation of the trade data, what it means for the economy and policy . Well, these data are certainly quite bad in particular when we look at them at the seasonally adjusted level. We see that basically it has dropped tremendously low. So a strong impact. Whats also important is that so far one or the other of the major markets of was slightly positive. This month in septe