Transcripts For CNBC Worldwide Exchange 20131022 : vimarsana

Shares down despite forecasts beating figures. Analyst caution the Smartphone Market is saturated. The ceo tells us there is Growth Potential elsewhere. Even in the lowend smartphone, theres the low end opportunity for many components. And we see generally that growth of low end and entry level phones. And apple is looking at the next shot in the tablet wars today, expected to unveil new ipad devices, big and small. Plus, seg gets a billionaire boost. Bill gates buys a stake. Now the second biggest now the second biggest shareholder in the company. Hello and welcome to this jobs tuesday. You know, it makes sense. Coming up on todays show, patrick, cena are growing novartis has delivered the right medicine with improved abroad. Guide kwans. And well head stateside to speak with one strategy that says the good times are here to stay. Why is that . Well find out at 11 40. Any comments on this jobs tuesday . Email us, worldwide cnbc. Com. Trust me, that is the email address. Now, its better late than never. The u. S. September jobs report is out at 8 30 eastern delayed by 2 and a half weeks because of the shutton. Unemployment is expected to hold steady at 7. 3 . The september report will be less influential than normal. It doesnt reflect the impact of the shutdown. The october jobs report will be out in two weeks. Bearing all that in mind, of course, what are we supposed to do today . Keith way will join us later. He thinks the fed now may delay tapering until june next year, no matter what the unemployment number says or does. Well have a full preview of todays jobs report with him in an hours time. Every week, cnbc is asking you to talk the trend by taking part in an online poll. Today, it is about your prediction for the delayed u. S. Jobs number. So far, 64 of you think the number will miss expectations. Head to traderpoll. Cnbc. Com to cast your vote. Youll be able to see the trend straightaway. Youll have your say on twitter using traderpoll. European earnings season in full flow today, as well. A number of corporates making big news on the stoxx 6 of 00. Kpm has reported a 230 million euro loss in the Third Quarter. Banks posted better than expected figures. The banks president and ceo told squawk box europe where theyre seeing improvements. You see dependic demand quite strong. The uncertainty in europe and the rest of the world is hitting the export industry. There is not a lot of Credit Demand at present. Domestic consumption comes through in higher conditioning for us. Bhp has raised its iron ore production. It helped push australian stocks to a fush fiveyear high. And chips on holdings has posted a near 40 jump in pretax profit. But investors remain concerned about the saturation of the Smartphone Market. The ceo has been speaking to cnbc this morning. Hes explained why the rise of the smartphones is a big growth opportunity. This is what he had to say and you can get full analyst redaction at 10 10 cet. Meanwhile, novartis now says it expects generic drug competition to cost the firm 2. 3 billion this year, down from the 277 billion it forecast in july. Announcing Third Quarter sales of 14. 34 billion, the ceo says he has given up on trying to predict when rivals will launch a competitor to the Blood Pressure pill diavan. The Company Raised its full year forecast after reporting earnings per share of 1 euro on 26 just below reuters forecast. All right. Novartis stock, hes up about a percent at the moment. Andrew, good to see you this morning. Thanks so much indeed for joining us. Good morning. Whats the big headache, then, facing novartis . Are they going to get more new drug launches identity . Its twofold. Diavan is being delayed in its generization process in the united states. Weve heard the rembaxy has a plant now inspected by the fda so that we should have it kick in in 2014. Scheaf got a large pile pipeline. Each of these big products has a lot of competition around it. Theyre not unique and, therefore, they have to have large marketing forces. And the special education that theyve always been claiming, i think, is just less pronounced than they believe. And thats what weve actually seen, a 3. 7 margin decrease in this quarter earnings because they have to beef up the marketing to keep lucentis running, to keep tusina running. These are all big franchises that need to compensate for the generic pressure thats been hitting for the company. Pricing pressure in the u. S. Is fading. And weve just laid out what they have to do with the pipeline, as well. What would it take for you to change that . Billion, it really takes time. Our issue is that we think that expectations are too high. We are still about somewhere around 5 below expectations of the market consensus for 2014. We used to be 15 below and we didnt touch our numbers much and consensus has been coming down and the share price has been coming up in the meanwhile. So we do see our reduced rating in some ways confirmed as it has underperformed roche potentially over the past month. But in absolute terms, it has not come down. It did keep up with the swiss market relatively well. Just one thing generally. As the big guys become too big, for the size that they are, it seems to be really hard for them to come up with the blockbusters to sustain. How big is the r d challenge . The r d challenge is an interesting question. The size is one that hits the company because they have grown to a bulk oftwolock bursts is no move the needle. So uch blockbuster out there so you can show a double digit revenue growth. So that leads over to the r d question. How much r d do you need to be spending so you can discover multiple blockbuster at this point in time. Some companies are more fortunate than others. Were seeing the trend in the drug industry that some of these are splitting up, theyre selling them off or theyre breaking down drugs into medicine tech companies. All in an effort, basically, to reduce the size of the Company Without saying, this is an impossible challenge. Theyre trying to show the investors, here, now you have one company, now you have your shareholder in two of them and each of them will try to show growth and try to drive premium valuation. Thanks, andrew rice, for joining us. Bank of englands charlie bean is speaking at the Society Annual conference in london. Hes come out with a few comments already. The size of the recovery maybe gaining contraction. Pathways to growth have moderated. The markets havent collapsed the decision driven in the uk by domestic outlook andhe Banking Union cant be complacent on a bubble rift. Right now, though, its time to catch up on all the Market Action ahead of the u. S. Employment report. Decliners at the moment, currently, just about outpacing advancers. The ratio is somewhere along the lines of five to four. Its a pretty even stevens at the moment as we head towards the employment report a little later. What about european equities . The ftse was up 311 points. T up points this morning. Very limb losses for the rest of the year. The ftse mib pretty flat. Take a look at where we are with bond yields. Right now, theyve just come back 2. 9 the . We hit the. 6 on friday. As far as the currency markets by the way, keep your eyes in gilt. Weve got public finances coming out. A little firmer today, the pound down to 98. 34. The currency markets havent done an awful lot in 24 hours. It doesnt really tell us anything. And well take our eyes on commodities, as well. The interesting is a pred between brent. Nymex. Around 10 bucks. Thats the widest around six months for april. Gold steady at 1314. Holdings in that the lowest since 2009. Holding down 430 tons this year. One of the reasons, gold prices down 21 in 2013. Copper just a little b as well. How have they traded in asia ahead of that event today . Sixuan lass more for us in singapore. Sixuan. Thank you for that, ross. Asia markets pretty much flat at the moment on this jobs tuesday. The china markets leading the losses as banks and resources sectors fell out of favor on worries that growth may people sending signal for the tightening bias. Positioning for another net liquidity train this week. Felt the pressure on fears soars in housing prices may lead to the curb. The shanghai composite lost almost 1 today fp. In hong kong, the hang seng index pulled back from its onemonth high ending down by 0. 5 with the hopes of china mobile seeing its first ever earnings decline since its ipo. Japans nikkei ended upper by 0. 1 . In sectors as steelmakers were held back by losses in financials and technology shares. The kospi still ended higher by a modest 0. 1 . And in australia, the asx up 0. 4 . Back to you. Sixuan, thanks for that. See you a little bit later. Now, shares of the designer are better than expected. Arm post add near 40 jump in pretax profits. They said earlier the rise of lower cost phones present Big Technology issues. Even in the low end smartphone, theres an opportunity for many components. And we see generally that growth of low end and entry level phones in developing countries as a huge, positive trend for its partners. Joining me in the studios, nick james, director for equity research. There we go, nick. Why is the market being a bit sniffly today . I think we all agree that lowend smart phones are a growth opportunity. Lowend smartphones are substantially cheaper than the high end smartphones. So highend smartphones sell for over 400. These hand sets are selling in asia can be well under 100. And that means two things. It means that theres a lot of pressure on the prices in those chips. And it means that theyre more and more commodity like devices. Whereas the highend market, you dont get the opportunity in high end smartphones. You have to pay a license, dont you . You have to pay a license, but the royalty is a percentage of the chip selling price. So its a chip ee rosing in price every year. Do you get a license per chip use . A chip ender with license Arms Technology will pay a and they design the chip and then that chip goes into production. Once that chip starts selling, the licensee is paid a chip value. It doesnt matter how many phones it ends up in . It matters because thats a percentage of the i get the point that, therefore, lower margins, lower prices. The point is, does that get balanced out to be a lot more phones . Theres more phones being sold in the marketplace. The cheaper smartphones, you sell a lot more highend. Cheap smartphone is going to be replacing what is called a feature phone. Thats a good thing. Thats probably going to drive the price of the phone up a little bit. Really, all this is taking functionality which is getting older and older, which is what happened with feature phones as they became more and more advanced. This tenl gets older and cheaper. Thats causing the Smartphone Market to grow now is using older, Cheaper Technology to move things forward. Its a more Generic Product which means that the percentage of the chip price is going to obviously be a lower number which means its going to be less of a growth driver. So having just reported an increase in growth, what are they supposed to do differently . I dont think they need to do anything different. Its about market expectations. The market got very excited about the fact we had strong growth rates in pd royalty. And this course, the peat ya rate slowed down to 14 year on year growth. Its going to be about 12. Its all about expectationes and people got very excited about the high growth it was getting from smartphones. Theres lots of other opportunities out. But its going to take time for those markets to develop. In the meantime, the rates of growth may well slow down and the rates of growth that weve seen over the past two quarters. Nick, good to see you, thanks for that. And it may be time to trade in your old ipad. Apple is holding an event in San Francisco at 1 00 p. M. Eastern expected to unveil the next version of the popular tablet. Reports say the new version will have a faster are on the processor and the first new redesign since 2011. Leaked images suggest it will look a lot like the ipad mini. Speaking of which, apple is expected to introduce ipad mini 2 which will be faster and may have the display feature thats currently on the bigger ipad. Apple stock is up 0. 5 . You dont trade in your ipads, you just give them to your children. Thats the way that works. Meanwhile, nokia has been unveiling new devices taking place in abu dhabi. The finish company has showcased a new phone, the lumia 320. It comes equipped with a sixinch screen as well as windows power tall let called the lumia 25 20. More tu gal has said theyll do everything they can to avoid a bailout. Is the european banging union a crucial set . More when we come back. 0 thats a good thing, but it doesnt cover everything. Only about 80 of your part b medical expenses. The rest is up to you. So consider an aarp Medicare Supplement insurance plan, insured by unitedhealthcare insurance company. Like all standardized Medicare Supplement insurance plans, they could save you in outofpocket medical costs. Call today to request a free decision guide. With these types of plans, youll be able to visit any doctor or hospital that accepts medicare patients. Plus, there are no networks, and virtually no referrals needed. Join the millions who have already enrolled in the only Medicare Supplement insurance plans endorsed by aarp. And provided by unitedhealthcare insurance company, which has over 30 years of experience behind it. With all the good years ahead, look for the experience and commitment to go the distance with you. Call now to request your free decision guide. Bill gates has invested in fcc. Fcc took a hit from spains property crash, but since june, its shares have doubled in value. So what were asking is what does bill gates do with a Spanish Construction Company . And what does he know that we dont . Send us in your thoughts on what that might be. Email us, worldwide cnbc. Com, tweet cnbcwex or direct to me rosswestgate. Eurozone countries must reveal how to deal with their dead hidden banks by late november. This week, country leaders will gather in brussels with Banking Unions once again high on the agenda. Before such a move can be xwlekted, the ecb wants to test a t health of the biggest european banks in a draft seen by reuters. Demands the country outlined within five weeks just how they plan to help banks in trouble. How would portugal portugal has the capabilities to deal with banks in trouble. It doesnt have the same problems as the lakes of spain or ireland. I pointed out to him the idea as a Company Operating in one of the Cool Companies would suffer from higher financing condition and i asked him what are they doing to address those things and to bridge the gap for some of these corporate and provide support. Listen in. The best thing we have to do is impact that and that is a problem is to win our battles to the markets next year. That is the best political measure that we can take. Also, it is important that europe does its part. We are talking about European Union banking for too much time now. And its time to accomplish it. There is a difference on financing costs between a company that is operating in portugal or its financing in portugal versus its competitors in a lot of europe that is unsustainable in a european market. You have to separate, definitely, the financial risk. It is not affordable, not sustainable, it is not fair that Portuguese Companies with the same Balance Sheet of their european competitors, across from financing that is sometimes the double of its or their competitors. This is not sustainable in terms of longterm, especially when youre talking about a single currency and a single market. Does the Political Risk element here when we had the trouble back in july, then it being fresh elections, can this Coalition Government hold together there and implement what the policy needs . Well, i would say that this government is quite and aside, you have problems in europe, so its implementing such demanding Assistance Program. With austerity measures like the ones that we are to take in 2012, 2013, and now in very much focused in Public Sector in 2014. I think you should not in order to do something in light, you should not focus in problems. You should focus on the way you you should focus on the way you saw the problems. So putting all these brands together, will the portuguese government do whatever it takes to avoid a second Bailout Program . We are doing whatever it takes. Sometimes we have strong internal costs, but there is strong commitment, almost an object session to reek over our sovereignty and that will be only possible if we end up this Assistance Program in july 2014. The portuguese economy minister speaking to me earlier. They want to end this Program Next Year and give up a cautionary program. So a very different tone if you compare them to the likes of ireland. Why are they so intent to regain sovereignty . If youre going to go to Banking Union its more europe. Its not that more europe any more. You have less korchbty. I dont think they want to be dictated to any more. Thats the point. Yes, you give up something. But the time for more europe is over. They want to be more so fest indicated about how we do it. More europe is the answer. More sophisticated about how we do it. Thats not what jeanclaude trichet says. A federalist in the European Commission are still i think we have too be a bit more selective about what we do. Im not saying thats what i want. Im just saying thats i know. But im exciting the european cause. I have to. The european cause is a federal europe. They have to. Julia, thank you very much. The italian Smartphone Market<\/a> is saturated. The ceo tells us there is Growth Potential<\/a> elsewhere. Even in the lowend smartphone, theres the low end opportunity for many components. And we see generally that growth of low end and entry level phones. And apple is looking at the next shot in the tablet wars today, expected to unveil new ipad devices, big and small. Plus, seg gets a billionaire boost. Bill gates buys a stake. Now the second biggest now the second biggest shareholder in the company. Hello and welcome to this jobs tuesday. You know, it makes sense. Coming up on todays show, patrick, cena are growing novartis has delivered the right medicine with improved abroad. Guide kwans. And well head stateside to speak with one strategy that says the good times are here to stay. Why is that . Well find out at 11 40. Any comments on this jobs tuesday . Email us, worldwide cnbc. Com. Trust me, that is the email address. Now, its better late than never. The u. S. September jobs report is out at 8 30 eastern delayed by 2 and a half weeks because of the shutton. Unemployment is expected to hold steady at 7. 3 . The september report will be less influential than normal. It doesnt reflect the impact of the shutdown. The october jobs report will be out in two weeks. Bearing all that in mind, of course, what are we supposed to do today . Keith way will join us later. He thinks the fed now may delay tapering until june next year, no matter what the unemployment number says or does. Well have a full preview of todays jobs report with him in an hours time. Every week, cnbc is asking you to talk the trend by taking part in an online poll. Today, it is about your prediction for the delayed u. S. Jobs number. So far, 64 of you think the number will miss expectations. Head to traderpoll. Cnbc. Com to cast your vote. Youll be able to see the trend straightaway. Youll have your say on twitter using traderpoll. European earnings season in full flow today, as well. A number of corporates making big news on the stoxx 6 of 00. Kpm has reported a 230 million euro loss in the Third Quarter<\/a>. Banks posted better than expected figures. The banks president and ceo told squawk box europe where theyre seeing improvements. You see dependic demand quite strong. The uncertainty in europe and the rest of the world is hitting the export industry. There is not a lot of Credit Demand<\/a> at present. Domestic consumption comes through in higher conditioning for us. Bhp has raised its iron ore production. It helped push australian stocks to a fush fiveyear high. And chips on holdings has posted a near 40 jump in pretax profit. But investors remain concerned about the saturation of the Smartphone Market<\/a>. The ceo has been speaking to cnbc this morning. Hes explained why the rise of the smartphones is a big growth opportunity. This is what he had to say and you can get full analyst redaction at 10 10 cet. Meanwhile, novartis now says it expects generic drug competition to cost the firm 2. 3 billion this year, down from the 277 billion it forecast in july. Announcing Third Quarter<\/a> sales of 14. 34 billion, the ceo says he has given up on trying to predict when rivals will launch a competitor to the Blood Pressure<\/a> pill diavan. The Company Raised<\/a> its full year forecast after reporting earnings per share of 1 euro on 26 just below reuters forecast. All right. Novartis stock, hes up about a percent at the moment. Andrew, good to see you this morning. Thanks so much indeed for joining us. Good morning. Whats the big headache, then, facing novartis . Are they going to get more new drug launches identity . Its twofold. Diavan is being delayed in its generization process in the united states. Weve heard the rembaxy has a plant now inspected by the fda so that we should have it kick in in 2014. Scheaf got a large pile pipeline. Each of these big products has a lot of competition around it. Theyre not unique and, therefore, they have to have large marketing forces. And the special education that theyve always been claiming, i think, is just less pronounced than they believe. And thats what weve actually seen, a 3. 7 margin decrease in this quarter earnings because they have to beef up the marketing to keep lucentis running, to keep tusina running. These are all big franchises that need to compensate for the generic pressure thats been hitting for the company. Pricing pressure in the u. S. Is fading. And weve just laid out what they have to do with the pipeline, as well. What would it take for you to change that . Billion, it really takes time. Our issue is that we think that expectations are too high. We are still about somewhere around 5 below expectations of the market consensus for 2014. We used to be 15 below and we didnt touch our numbers much and consensus has been coming down and the share price has been coming up in the meanwhile. So we do see our reduced rating in some ways confirmed as it has underperformed roche potentially over the past month. But in absolute terms, it has not come down. It did keep up with the swiss market relatively well. Just one thing generally. As the big guys become too big, for the size that they are, it seems to be really hard for them to come up with the blockbusters to sustain. How big is the r d challenge . The r d challenge is an interesting question. The size is one that hits the company because they have grown to a bulk oftwolock bursts is no move the needle. So uch blockbuster out there so you can show a double digit revenue growth. So that leads over to the r d question. How much r d do you need to be spending so you can discover multiple blockbuster at this point in time. Some companies are more fortunate than others. Were seeing the trend in the drug industry that some of these are splitting up, theyre selling them off or theyre breaking down drugs into medicine tech companies. All in an effort, basically, to reduce the size of the Company Without<\/a> saying, this is an impossible challenge. Theyre trying to show the investors, here, now you have one company, now you have your shareholder in two of them and each of them will try to show growth and try to drive premium valuation. Thanks, andrew rice, for joining us. Bank of englands charlie bean is speaking at the Society Annual<\/a> conference in london. Hes come out with a few comments already. The size of the recovery maybe gaining contraction. Pathways to growth have moderated. The markets havent collapsed the decision driven in the uk by domestic outlook andhe Banking Union<\/a> cant be complacent on a bubble rift. Right now, though, its time to catch up on all the Market Action<\/a> ahead of the u. S. Employment report. Decliners at the moment, currently, just about outpacing advancers. The ratio is somewhere along the lines of five to four. Its a pretty even stevens at the moment as we head towards the employment report a little later. What about european equities . The ftse was up 311 points. T up points this morning. Very limb losses for the rest of the year. The ftse mib pretty flat. Take a look at where we are with bond yields. Right now, theyve just come back 2. 9 the . We hit the. 6 on friday. As far as the currency markets by the way, keep your eyes in gilt. Weve got public finances coming out. A little firmer today, the pound down to 98. 34. The currency markets havent done an awful lot in 24 hours. It doesnt really tell us anything. And well take our eyes on commodities, as well. The interesting is a pred between brent. Nymex. Around 10 bucks. Thats the widest around six months for april. Gold steady at 1314. Holdings in that the lowest since 2009. Holding down 430 tons this year. One of the reasons, gold prices down 21 in 2013. Copper just a little b as well. How have they traded in asia ahead of that event today . Sixuan lass more for us in singapore. Sixuan. Thank you for that, ross. Asia markets pretty much flat at the moment on this jobs tuesday. The china markets leading the losses as banks and resources sectors fell out of favor on worries that growth may people sending signal for the tightening bias. Positioning for another net liquidity train this week. Felt the pressure on fears soars in housing prices may lead to the curb. The shanghai composite lost almost 1 today fp. In hong kong, the hang seng index pulled back from its onemonth high ending down by 0. 5 with the hopes of china mobile seeing its first ever earnings decline since its ipo. Japans nikkei ended upper by 0. 1 . In sectors as steelmakers were held back by losses in financials and technology shares. The kospi still ended higher by a modest 0. 1 . And in australia, the asx up 0. 4 . Back to you. Sixuan, thanks for that. See you a little bit later. Now, shares of the designer are better than expected. Arm post add near 40 jump in pretax profits. They said earlier the rise of lower cost phones present Big Technology<\/a> issues. Even in the low end smartphone, theres an opportunity for many components. And we see generally that growth of low end and entry level phones in developing countries as a huge, positive trend for its partners. Joining me in the studios, nick james, director for equity research. There we go, nick. Why is the market being a bit sniffly today . I think we all agree that lowend smart phones are a growth opportunity. Lowend smartphones are substantially cheaper than the high end smartphones. So highend smartphones sell for over 400. These hand sets are selling in asia can be well under 100. And that means two things. It means that theres a lot of pressure on the prices in those chips. And it means that theyre more and more commodity like devices. Whereas the highend market, you dont get the opportunity in high end smartphones. You have to pay a license, dont you . You have to pay a license, but the royalty is a percentage of the chip selling price. So its a chip ee rosing in price every year. Do you get a license per chip use . A chip ender with license Arms Technology<\/a> will pay a and they design the chip and then that chip goes into production. Once that chip starts selling, the licensee is paid a chip value. It doesnt matter how many phones it ends up in . It matters because thats a percentage of the i get the point that, therefore, lower margins, lower prices. The point is, does that get balanced out to be a lot more phones . Theres more phones being sold in the marketplace. The cheaper smartphones, you sell a lot more highend. Cheap smartphone is going to be replacing what is called a feature phone. Thats a good thing. Thats probably going to drive the price of the phone up a little bit. Really, all this is taking functionality which is getting older and older, which is what happened with feature phones as they became more and more advanced. This tenl gets older and cheaper. Thats causing the Smartphone Market<\/a> to grow now is using older, Cheaper Technology<\/a> to move things forward. Its a more Generic Product<\/a> which means that the percentage of the chip price is going to obviously be a lower number which means its going to be less of a growth driver. So having just reported an increase in growth, what are they supposed to do differently . I dont think they need to do anything different. Its about market expectations. The market got very excited about the fact we had strong growth rates in pd royalty. And this course, the peat ya rate slowed down to 14 year on year growth. Its going to be about 12. Its all about expectationes and people got very excited about the high growth it was getting from smartphones. Theres lots of other opportunities out. But its going to take time for those markets to develop. In the meantime, the rates of growth may well slow down and the rates of growth that weve seen over the past two quarters. Nick, good to see you, thanks for that. And it may be time to trade in your old ipad. Apple is holding an event in San Francisco<\/a> at 1 00 p. M. Eastern expected to unveil the next version of the popular tablet. Reports say the new version will have a faster are on the processor and the first new redesign since 2011. Leaked images suggest it will look a lot like the ipad mini. Speaking of which, apple is expected to introduce ipad mini 2 which will be faster and may have the display feature thats currently on the bigger ipad. Apple stock is up 0. 5 . You dont trade in your ipads, you just give them to your children. Thats the way that works. Meanwhile, nokia has been unveiling new devices taking place in abu dhabi. The finish company has showcased a new phone, the lumia 320. It comes equipped with a sixinch screen as well as windows power tall let called the lumia 25 20. More tu gal has said theyll do everything they can to avoid a bailout. Is the european banging union a crucial set . More when we come back. 0 thats a good thing, but it doesnt cover everything. Only about 80 of your part b medical expenses. The rest is up to you. So consider an aarp Medicare Supplement<\/a> insurance plan, insured by unitedhealthcare insurance company. Like all standardized Medicare Supplement<\/a> insurance plans, they could save you in outofpocket medical costs. Call today to request a free decision guide. With these types of plans, youll be able to visit any doctor or hospital that accepts medicare patients. Plus, there are no networks, and virtually no referrals needed. Join the millions who have already enrolled in the only Medicare Supplement<\/a> insurance plans endorsed by aarp. And provided by unitedhealthcare insurance company, which has over 30 years of experience behind it. With all the good years ahead, look for the experience and commitment to go the distance with you. Call now to request your free decision guide. Bill gates has invested in fcc. Fcc took a hit from spains property crash, but since june, its shares have doubled in value. So what were asking is what does bill gates do with a Spanish Construction Company<\/a> . And what does he know that we dont . Send us in your thoughts on what that might be. Email us, worldwide cnbc. Com, tweet cnbcwex or direct to me rosswestgate. Eurozone countries must reveal how to deal with their dead hidden banks by late november. This week, country leaders will gather in brussels with Banking Union<\/a>s once again high on the agenda. Before such a move can be xwlekted, the ecb wants to test a t health of the biggest european banks in a draft seen by reuters. Demands the country outlined within five weeks just how they plan to help banks in trouble. How would portugal portugal has the capabilities to deal with banks in trouble. It doesnt have the same problems as the lakes of spain or ireland. I pointed out to him the idea as a Company Operating<\/a> in one of the Cool Companies<\/a> would suffer from higher financing condition and i asked him what are they doing to address those things and to bridge the gap for some of these corporate and provide support. Listen in. The best thing we have to do is impact that and that is a problem is to win our battles to the markets next year. That is the best political measure that we can take. Also, it is important that europe does its part. We are talking about European Union<\/a> banking for too much time now. And its time to accomplish it. There is a difference on financing costs between a company that is operating in portugal or its financing in portugal versus its competitors in a lot of europe that is unsustainable in a european market. You have to separate, definitely, the financial risk. It is not affordable, not sustainable, it is not fair that Portuguese Companies<\/a> with the same Balance Sheet<\/a> of their european competitors, across from financing that is sometimes the double of its or their competitors. This is not sustainable in terms of longterm, especially when youre talking about a single currency and a single market. Does the Political Risk<\/a> element here when we had the trouble back in july, then it being fresh elections, can this Coalition Government<\/a> hold together there and implement what the policy needs . Well, i would say that this government is quite and aside, you have problems in europe, so its implementing such demanding Assistance Program<\/a>. With austerity measures like the ones that we are to take in 2012, 2013, and now in very much focused in Public Sector<\/a> in 2014. I think you should not in order to do something in light, you should not focus in problems. You should focus on the way you you should focus on the way you saw the problems. So putting all these brands together, will the portuguese government do whatever it takes to avoid a second Bailout Program<\/a> . We are doing whatever it takes. Sometimes we have strong internal costs, but there is strong commitment, almost an object session to reek over our sovereignty and that will be only possible if we end up this Assistance Program<\/a> in july 2014. The portuguese economy minister speaking to me earlier. They want to end this Program Next Year<\/a> and give up a cautionary program. So a very different tone if you compare them to the likes of ireland. Why are they so intent to regain sovereignty . If youre going to go to Banking Union<\/a> its more europe. Its not that more europe any more. You have less korchbty. I dont think they want to be dictated to any more. Thats the point. Yes, you give up something. But the time for more europe is over. They want to be more so fest indicated about how we do it. More europe is the answer. More sophisticated about how we do it. Thats not what jeanclaude trichet says. A federalist in the European Commission<\/a> are still i think we have too be a bit more selective about what we do. Im not saying thats what i want. Im just saying thats i know. But im exciting the european cause. I have to. The european cause is a federal europe. They have to. Julia, thank you very much. The italian Prime Minister<\/a> is coming out saying he prefers a supernatural bank. Well keep our eyes on that. Meanwhile, the green finance minister says his company is still shrinking, but at a slower rate. Gdp was likely to contract by around 3 in the Third Quarter<\/a>, easing from 3. 8 in the second. Improved tourist revenues were cited for the better performance. Wooefk hearing from mr. Charlie bean this morning. We just got the latest snapshot of uk public finances. September public net borrowing up 11. 1 billion. It was 12 billion one year ago. That numbers was as expected. So no surprise there. The cash requirement, 600 million versus a contraction 2. 1 billion this time a year ago. Sterling unmoved by that because thats pretty much what we thought we were going to get. Well take a short break. Still to come, bhp has helped the asx hit fsh fiveyear high. The australian index following First Quarter<\/a> earnings. Well have more on the mining giants numbers and its output on iron ore output when we come back. The headlines from around e t. Its jobs tuesday. The september employment report due today after being delayed by the governments shutdown. A poll finds 64 of payrolls will mix forecasts. Conflicting signals about europes future. Bhp and novartis trade higher. Volatile rates have hit its outlook. Rates are down despite the chip designer beating forecasts. Analysts have cautioned the Smartphone Market<\/a> is saturated. Cnbc is told there is Growth Potential<\/a> elsewhere. Even in a low yebd smartphone, there are many opportunities for components. And we see generally that growth of lowend and entry level phones. Big guns in the tablet world. And home prices in china have their biggest rise in over two years. Overvalued price necessary overvalued price necessary germanys seven biggest cities. Weve got earnings out of china. 241. 6 of million yuan for the zte. That reverses the loss from a year ago. The net profit for nine months, 551. 6 million yuan. Its expected to turn profitable from 2013. This is a China Telecom<\/a> company. Well stay with the earnings theme, as well. Bhp billy to know has posted its forecast after posting strong results in the First Quarter<\/a>. Iron ore deposits up 28. 3 tons in the period while oil output jumped by 16 . The company lifted its full forecast by year to 212 million tons. Bhp says its now really to pull funding from underperforming units and focus on ramping up production. Dominick snyder, thanks for joining us. Have we seen the bottom, then inspect the bottom of the cycle for these guys . And is that base actually on those trade numbers we had out of china a week or so ago where we had record iron ore imports . If for you, the bottom, or if you look at cycles or over the tough two quarters, yes. If you look at the economy, its going to accelerate towards the end of the year and from the fist quarter of 2014. From that angle, we should see some support. Its important to recognize that, really, towards the end of the year, the growth momentum should come from the developed world. You might question we are not yet there. We should see the American Market<\/a> come at best in the First Quarter<\/a>. So if youd asked me about cycle, its shortterm. If you asked longterm is iron ore going to stay where it is, i dont think so. I think its still 10 to 15 downside. Theres a lot of supply coming. I think that pushes prices down and i think bhp is a good example of where the supply is going. Okay. Do you think bhp and rio both saying the same sort of things. Do you think theyre now saying were going to ramp up production . Do you think thats a mistake, do you . Well, at the end of the day, some of them are really on the low cost side. So you try to maximize as good as you can, try to benefit from the high price thats we have right now. As i said, if you look in terms of the supply output, then we can price out some of the high cost chinese producers. And that means it can come off another 10 , 1015 rather quickly in the second half of 2014. So i think try to profit or benefit as much as you can in the short on run. Thats their strategy. Meanwhile, the ubs Commodity Index<\/a> up 2 in the Third Quarter<\/a>. Thats a first positive return for three consecutive quarters. But presumably, from what youre saying about iron ore, would that be reflected in that Commodity Index<\/a>, look, lets take it while you can, its not going last . Well, looking at the dow jones ubs, thats not part of it. You might see more performance towards the end of the year. Thats what i just mentioned was the top down story. So you look at what is the economy, what is the demand point doing . But if you think about it, many of the commodities have a decent supply side. Then you need to be careful some of the prices you might see mony to sustain. So if you give me a total return outlook for the dow jones on a six to 12month basis, then its probably basically flat. So you shouldnt get too optimistic. Youre probably taking some of the strength you see in the metals as an opportunity to exit. Just talk about energy briefly. Weve got the spread between nymex and crude. Its over 10 tl. We havent seen that since sometime in april. Big stock billed in the united states, could that spread get wider . Thee receipt cannily, it could get wider. If the growth rate continues with an additional 1 Million Barrels<\/a> growth over the next 12 months, where are you going to put all that crude . Theres still the risk, especially some of the pipelines, lets say, do not function the way its predicted, then it could easily have stock billed. So from that angle, the spread could wind. But beyond 10 a barrel, its unlikely to last. Potential is there. What supported the crude oil price in europe was the altitude. Globally, we lost 3 Million Barrels<\/a>, so the tightness is felt mostly in europe. Good to talk to you. Thanks for that. Dominick snyder, head of Global Research<\/a> at ubs Wealth Management<\/a>. Australian stocks are up. To get more on that, follow us on twitter cnbcworld. Charges related to tax evasi evasion, he now faces extradition to the u. S. Following allegations that he helped u. S. Clients with 20 billion worth of assets to avoid taxes. Here is something you dont expect to see at the deli counter. Shoppers in the u. S. Got more than they bargained for when an alligator popped in. He wandered through the car park and right through the entrance. Staff eventually locked the store while police managed to gate it away. I think he just wanted a pack of m ms and a pack of coke. Anyway, there he was making his way away from the store. He didnt have any credit, though, that was the problem. Now, just days ahead of the check parliamentary election, artist david kerney has formulated casts on the table or floated them on the river in prague. He directed this 10 meter high statue which is meant to urge people away from voting for the communist party. I think were seeing it from the wrong angle. Anyway, let us know what you think of that. It is an extraordinarily long middle finger. Email us, worldwide cnbc. Com. Were deaf fltly seeing it from the wrong angle. Still to come, chinas oil giants are getting a bit of a piece of the pie. Is the worlds second biggest economy still thirsty for black gold . Well get more from hong kong when we come back. Were just getting auction results out now from spain. 0. 3 on the yield. Right. Now it seems Warren Buffett<\/a> isnt quite as keen on tesco as he once was. His company speshg shire hathway has taken its holdings down 2 . It comes two weeks after the company led a fall in profit led by 56 dip in its earnings in europe. Shares in tesco did end the session in positive territory today. It doesnt get flatter than that. Shares in Construction Company<\/a> fcc are rallying after winning a surprise vote of confidence from bill gates. The microsoft chairman purchased 6 of the group for around 165,000. It makes gates now the second biggest shareholder in the firm. Fcc took a hit from spains property crash. But since june, its shares have doubled in value. So the big question is, wa does bill gates know that we dont . Join us, email us, worldwide cnbc. Com or tweet us, cnbcwex or direct to me rosswestgate. Is bill gates the new property guru in spain . Who knows. Meanwhile, House Building<\/a> in britain is now making its strongest recovery in over 15 years. But supply is still fail to go keep pace with demand. This showing a 10 surge in london house prices over just the last month. At the same time, the bundes bank, germanys central bank has found City Apartments<\/a> may be significantly overvalued by as much as 20 . It suggests against the back drop of low Interest Rates<\/a>, the outward price pressure is unlikely to ease in the shortterm. Another flag for the bull. Japan is seeing its own price build up. Fushiko koshido has the story for us from tokyo. Hi, ross. The nikkeis reporting chemicals and Home Building<\/a> Company First<\/a> half operating profit likely surged 83 on the year to over 700 million. That would be a new record for the first half, beating the companys initial outlook. Driving the surge is the Home Building<\/a> business, accounting for a quarter of total sales for the first half, likely climbing 17 . Demand for home purchases is picking up ahead of april sales tax hike. The other core segment in the chemical business has picked up sharply, as well. With these results, the companys full fiscal year operating profit is expected to hit a record high of 1. 3 billion. And demand in home orders is expected to continue into the second half. Shares traded up 2. 7 today. Thanks for that. Have a good evening in tokyo. Weve had numberes from china, an indicator that may encourage beijing to step in to cool the property market. This is now the ninth straight month of year on year increases. Joining us from hong kong is peter towel ross. What do we make for all this property news . You mean the chinese property news . I think in china its very clear, its basically a sign that china is back to its old ways. So all the talk about rebalancing, economic reform, shifting away from investment towards consumption, liberalizing Interest Rates<\/a> and so forth, what were seeing is that chinese consumers are voting with their wallets. They dont want to put their money in Bank Accounts<\/a> where they are getting a subinflation rate of return on deposits. So theyre buying property and theyre buying property, interesting, the biggest prices were in the prime cities, if you think, sort of beijing, shanghai, gaun show. The places where people will presumably want to live in the future and where price res expected to hold reasonably steady. Thats why were seeing the biggest increases. It makes everybody feel good, creates a wealth effect and probably kind of generates some economic activity, as well, in the shortterm. But in the longer term, its worrying because it shows all the talk about rebalancing and shifting away from chinas old Economic Growth<\/a> model isnt having much effect yet. And how much of this is also because of restrictions on capital controls, and just investable assets . If youre wealthy in china, you have ways of getting your money out of the country or find ways to invest your money in. But if youre part of the middle class, you have very few options. If you put your money in the bank, deposit rates are capped to 3 . Youre getting less than inflation. Your savings are being eroded. You can buy some sort of funky Wealth Management<\/a> products to offer a better rate of return, but those have been cracked down upon and its less clear that youll get all of your money back in that case. So people are going for bricks and mortar. Theyve been doing that for years now. Really what the signal is is that people think this speculative bubble in property, its not necessarily a leverage bubble, its basically people parking their cash in housing. But that will continue for some time. Leverage is the key point, isnt it, peter . If people are buying with cash, you can with stand the hit, right . Its forced selling on leverage thats the issue, i suppose. Lets move on. A couple of other things we want to talk about, as well. Weve got some flashes coming out from the pboc, as well. Chinas pboc might tighten slightly in terms of policy response. At the same time, state backed petrochina and cnoc are among a group of oil giants securing a bid for Brazils Libra<\/a> oil field. The consortium which includes petrobras, Royal Dutch Shell<\/a> is estimated to hold up 12 billion barrels of oil. Demonstrators rallied against it and demand all oil fields be nationalized. But the Chinese Companies<\/a> will hold far less than initially expected. And it all comes as china embarks on a more aggressive investment push abroad in a bid to secure its energy and resource needs. According to research from the heritage foundation, chinas Global Investment<\/a> hit 42 billion in the first half of 2013. Its up sharply from just 9. 9 billion in 2005. Subsaharan africa is up. We know china has been clearly an investor in resource around the globe. And they were in this resource global fight. I suppose the question is whether that you said they havent diversified in the home economy. The question is whether International Investment<\/a> gets diversified, as well. Well, i think its not just oil. Obviously. Theyve been buying pork producers in the u. S. And so forth. So there is broader investment going on overseas investment going on from china. But youre right. Resources is still the main source of investment. Thats what accounts for a lot of those large numbers. And i think whats interesting, unical in the u. S. , you had last year the long, drawn out debate in canada about whether it should allow chinese to buy nexa in one of its Oil Experience<\/a> companies. And, really, what appears to be happening is that china is sort of shifting away from making these high profile big acquisitions into focusing more in the partner. So this brazilian example is a good one. The Chinese Companies<\/a> were specd to dominate. Theyve come in with sort of 10 each behind two big established western oil majors. And when weve seen that elsewhere, as well, Chinese Companies<\/a> buying sort of assets from other companies, buying into blocks, buying partial stakes, investing partially in a way of trying to do this under the rarity without to attract sort of the high profile strutny and opposition that some of the previous acquisitiones and teamed acquisitions have attracted. Absolutely right. Trying to go maybe a little bit under the radar. Is that how much of a new model is this going to be . It was interesting, of course, they this consortium yesterday to build Nuclear Power<\/a> station. This clearly is a nervousness about chinese data and enterprises he investing into international products. The risk is nervousness. I mean, i think its more or less justified depending on what type of investment youre talking about. To be honest, buying a canadian oil explorer, which is already publicly quoted and kind of has international shareholders, whether thats owned by a Chinese Company<\/a> or by international investors, it seems to me from a canadian perspective, it doesnt make that much difference. Clearly having chinese money helping to build your Nuclear Power<\/a> plants in the uk, the uk has taken the view that thats welcome. So the uk has taken the view that everybodys money is equally good in that situation and they will welcome it. But i think it varies. Clearly, you know, we talked we have had the discussion recently about lenovo, the Chinese Company<\/a> being interested in buying blackberry. That would raise a lot of hackels and worries about security in the u. S. And canada. So i think it varies from sector to sector about the sensitivity of those and also, really, about the identity of the buyers where youre talking about the stateowned companies or private companies. Its clear that Chinese Investment<\/a> abroad is going to continue to increase. I dont think theres any doubt that that will happen. And so its up to china partly to make sure those doing the investment are more transparent and, therefore, more acceptable to the rest of the world. Peter, thanks for that. Always good to see you. Have a good evening in hong kong. Still to come, delayed september jobs data from the u. S. Is set for release today at 8 30 eastern. Well dig into that right afterthis. Ly in my 60s. Ive got a nice long life ahead. Big plans. 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[ male announcer ] when we built the cadillac ats from the ground up to be the worlds best sport sedan. People noticed. The cadillac ats 2013 north american car of the year. Lease this cadillac ats for around 299 per month with premium Care Maintenance<\/a> included. Hello. 24 is worldwide exchange. Im ross westgate. Get ready, its jobs tuesday. September employment report due today after being delayed by the Government Shutdown<\/a>. A cnbc poll finds 64 of people think payrolls will miss forecasts. Conflicting signals by the future for novartis. And the big guns are still firing in the tablet wars. Nokia and apple unveiling two new models. Microsoft surface two going on sale. And the s. E. C. Gets a fcc, sorry, get a billionaire boost. Shares in the Spanish Construction Company<\/a> up nearly 10 after bill gates buys a stake. It becomes the second biggest shareholder in the firm. Youre watching worldwide exchange, bringing you Business News<\/a> from around the globe. All right. A warm welcome to you. If youve just joined us stateside here on cnbcs worldwide exchange, welcome to the start of your Global Trading<\/a> day. Yes, folks, its jobs tuesday. 2 1 2 weeks later, of course, for the u. S. Employment report and thats going to guide us, really, as far as futures are concerned. Pretty flat. Especially yesterday. The dow down 7 points. The s p up 0. 1 . Were going to be cautious with these futures until we get that number. Futures at the moment, around about 8 points below fair value on the dow. The nasdaq at the moment is some 6 points below fair value and the s p 500 is actually, 1, a point. A bit below fair value. All of that will change extending what the employment report says. It may not be very much because it is before the Government Shutdown<\/a> and is likely to get revised in two weeks time when we get the october jobs hav rbe flat. Were over two hours into the session. The ftse is up 7 points. Up 31 yesterday. The xetra dax, cac 40 down around 0. 2 . Average it out. The ftse mib is up 0. 1 as well as the ftse 100. As far as treshy yields are concerned, 2. 55 was the yield on the tenyear on friday. Gilt yields, 2. 7 . We have public borrowing figures which came in as markets expected. On the on the currency markets, dollar yen well, commodity markets, lets kick off with those. The spread between brent and nymex, we got big stock build in the united states. That pushed this spread to over 10. Nearly the widest since well, actually, nearly 11. Near the widest since april earlier this year. And what weve got is the stock pushing nymex prices down, brent being supported by the likes of nigeria and libya, as well. Spot gold steady at 1310. We had a big drop in more holdings of the gold trust yesterday. Holdings down 430 tons on the year. Copper steady at the moment. Now lets take a look at treasury yields for you. Currency markets, im getting behind myself. Currency markets, let me tell you, euro dollar, 1. 3671. Dollar yen, slightly firmer on the session. Aussie has the sterling handle. Actually, on a 24hour basis, we havent done an awful lot on the exchanges. People not willing to make a huge number of betts. Thats where we stand in european trade two hours into the session today. To recap whats happening in asia, li sixuan is with us out of singapore. Sixuan. Thank you for that, ross. Hea u. S. Jobs data. China markets losing ground as banks and resources sectors fell out of favor on worries that q4 growth may slow. And the peoples bank of china sent signals with the tightening bias, skipping open Market Operations<\/a> for the second straight session, positioning for another liquidity drain this week. And they werent listed, property place felt the pressure on fears that soaring housing prices may lead to more property curves and the shanghai depositit lost about 0. 8 . In hong kong, the hang seng index pulled back ending down by 0. 5 . Index giant tumbled over 3 after posting its first ever earnings decline since its ipo. And japans nikkei 225 managed to end higher by a modest as ross just talab slightly termer dollar ahead of the yen. In south korea, gains in defensive sectors and steelmakers were held back by losses in financials and technology shares. The kospi still ended higher by 0. 1 . Meanwhile, australia miners helped to push the asx 200 to a fresh fiveyear high. So the index continued to outperform its asian peers, up 0. 4 . Back to you. Sixuan, thanks for that. So its better late than never. The september jobs report out dhad by 2 1 2 weeks because of the shutdown. Just so youre aware, nonfarm payroll res forecast to rise by 180,000 versus the 169,000 in august. Unemployment expected to stay steady at 7. 3 . It is, of course, being released later. It wont reflect the impact of the shutdown, which will likely slow highing and the numbers are certainly to be revised in two weeks when the october report comes out. But bearing that in mind, how many attention should we give it . Keith wade from schroeders joins us now. Morning, keith. What are we going to do with this firth . I think its quite an important number because it does tell you the pace and growth of the u. S. Economy going into the shutdown. So it will give us a good picture of whats going on in september. Youre right, the numbers do get revised subsequently. But the markets put a lot of attention on that nonfarm payrolls figure. The unemployment number itself is very important because that, of course, is the thing that the fed is targeting as a benchmark for when its going to start raising Interest Rates<\/a>. So still important, but i think the real problem for this release today is, of course, we are now after this one. We go into a bit of statistical fog, if you like, because the shutdown will affect the numbers going forward. So then things could get more difficult to interpret. The october payroll number could have been affected by the shutdown. Either directly through the collection methods or just because of the layoffs that took place as a result you may get a bounceback in november, which would mean you wont be a clear number until december which wont be released until the new year. So it could be sometime before you get a picture of the u. S. Labor market. And that takes us into more political hurdles in february and january, as well. So most people now think march is the earliest they go. You think it might be even later than that. Its possible that they could go later than that. Quite a lot depends on the debt ceiling and what happens at the beginning of the year. I would have thought that, again, created distortions in the data in a way that would cause the fed to hold off longer than it could even push itself out to swrun. June. Why is june significant . Why june and not may or well, after march, june is scheduled to have a press conference with the chair. Which would be janet yellen. Thats when the chair has an opportunity to explain the reasoning behind a particular decision. Kind of thought that the Big Decisions<\/a> would take place in those press conference months. Its kind of funny, you dont make a decision based on when the press conference is being held. Absolutely, but you see the same thing happening here in the uk with the inflation report. Its a bit of an artificial timetable. Im sure there is nothing stopping the fed chief from having a press conference whenever he or she would like. Just on the political front, you think the next time around will be slightly better . I do. Two reasons for that. First of all, the republicans took a bit of a bashing in the opinion polls as a result of this recent slowdown. I think they would want to avoid that. So i dont think theyll want to risk the kind of arguments that we had before. Theres the possibility, as well, that the treasury has more scope to extend the debt ceiling further on. So i think theres less likelihood that there will be the same shenanigans that we come to when we come to it in january and february. I hope youre right, keith. I really hope youre right. Now, every week cnbc is asking you to talk the trend by inviting you to take part in an overline poll. This week, of course, were asking you for your predictions in this u. S. Delayed jobs numbers. So far, 64 of you think the number will miss the consensus of 180,000. Youll see the trend there. Only 25 think that well be above 18 0,000. So the bulls are clearly in the minority. In addition to the unemployment report, there are a fair number of earnings. Harley davidson, Lockheed Martin<\/a>, after the close, well hear from amgen and panera bread. And were just hearing out from gm india. Inspectors may be charged for corporate fraud according to an official. Gm officials in india may be charged with corporate fraud. Well keep our eyes on that. When the Financial Authority<\/a> fined jpmorgan last month, it said by virtue of the conduct of the chief Investment Office<\/a> slond he wasnt given the opportunity to respond before the report was published. Next arrested. He registered at a hotel which prompted his name to flash up on an international washt. He now faces extradition to the u. S. And it seems Warren Buffett<\/a> isnt quite as keen on tesco as he once company, berkshire hath has taken its holdings of tesco down3. . The move comes two weeks after the retailer posted a fall in first half profit profit. It was led by 68 in its earnings in europe. Shares in tesco are moved up slightly by 0. 25 . And shares in Spanish Construction Company<\/a> fcc are rallying after winning a surprise vote of confidence from bill gates. The microsoft chairmans purchased 6 of the group for around 155 million. It makes gates now the second biggest shareholder in the Company Behind<\/a> its chair woman. S. E. C. Took a big hit from the spanish property crash. Since june, its shares have doubled in value. So bill gates making a leverage play on construction and property in spain. What does he know that we dont . Let us know. Join the conversation here on worldwide exchange. Email us, worldwide cnbc. Com, tweet or direct to me rosswestgate. Right. Were in the thick of earnings season. The misses in europe moving the stoxx 600. Thats coming right after this. A recap othmorning, get rea delayed data. September nonfarm payrolls due out at 8 30 eastern. Nokia, my row soft and apple are fighting for space in the new tablet market. And bill gates makes an investment in the Spanish Construction Company<\/a> fcc. European earnings in full flow today. Former American Mobile<\/a> targets kpn has reported a 243 million euro loss in the Third Quarter<\/a>. The Dutch Telecom<\/a> Group Residential<\/a> unit said relations with American Mobile<\/a> remain cordan. Kpns position will remain the same. Nevertheless, the stock up 1. 6 . Bhp billiton, the diversified miner up nearly 3 . Iron ore production for 2013, they are increasing, this after reporting a 23 year on year increase in the Third Quarter<\/a>. Thexpect it to push australian stocks up to fresh fiveyear highs. Now, another German Company<\/a> today complaining about the strength of the euro following sap asand adeedis trading in th red. Its says its operating profit will not rise on the year. And in stockholm, swedbank up 4. 3 saying its seeing more signs of life in the economy. They told squawk box europe where theyre seeing those improvements. If the domestic demand being quite strong, but you see the same pattern in sweden in that the uncertainty in europe and the rest of the world is hitting the export industries. There is not a lot of Credit Demand<\/a> at present, but domestic consumption comes through in higher commissioning for us. Swedbank also trading lower, despite the chip giants better than expected Third Quarter<\/a> earnings. Earlier today, the ceo told cnbc the rise of lower cost phones, in fact, represents a growth opportunity. Theres a big mix of components that go into smartphones. We see generally that growth of low end and entry level phones not just in developed countries, but in developing countries as a huge trend for its partners. Still to come on the show, its only been a month since apple unveiled the latest versions of the iphone. So what does tim cook have up its sleeve for todays announcement . Well preview the big event, next. [ male announcer ] more room in economy plus. More comfort, more of what you need. Thats. Built around you friendly. [ male announcer ] the parking lot helps by letting us know whos coming. The carts keep everyone on the right track. The power tools introduce themselves. All the bits and bulbs keep themselves stocked. And the doors even handle the checkout so we can work on that thing thats stuck in the thing. [ female announcer ] today, cisco is connecting the internet of everything. So everyone goes home happy. Apple cant rest on its laurels. The firm is back with more new products today. Jon fortt has the preview. And we are looking ahead to an apple event in San Francisco<\/a>, 1 00 p. M. Eastern. Expecting to see lots of new ipads. A lot of concern about apples ipad performance. Union share is down year over year in q2. But there are three problems with looking at year over Year Market Share<\/a> numbers, trying to draw too many big conclusions here. One, we dont know how many tablets other people are selling because theyre not reporting it. Two, you cant make too much of year over year comps because last year in q2 apple had a new ipad, the third generation. This year, they didnt. Apple is losing unit share, but probably not too much profit share at all. Here is what weve got from apple. Right now, the ipad mini at 329. The ipad 2 at 299 without the retina display and the fourth generation with retina display 499. What happens today . The rumor is well get an ipad mini with the retina display. Because the mini has turned into one of the top selling ipads in the lineup, it might make sense for apple to offer one with touch i. D. And the latest chip. Theres a question whether they can do that and maintain decent margins. Expect to see a design shift in the full sized ipad so it follows more of the design language of the mini, possibly also some cover changes that fit the color scheme of the iphone 5c. Its possible that after tomorrow, the ipad lineup will look more like this. This he keep the nonretina mini around, drop the price to 279. Give it an a6 chip and then you get the layers of pricing on top of that, all the way up to the full size fifth generation ipad. Well have to wait and see. Josh lipton and i will be onsite in San Francisco<\/a> bringing you all the latest news. So tune in to cnbc. Meanwhile, nokia is launching its new products. A power tablet called the luminia 2520. Catchy name. The microsoft 2 surface tablets go on sale this morning, as well. The New York Stock Exchange<\/a> is going to hold a test run for twitters ipo this weekend. Maybe theyve learned something from the nasdaq. The market watch fund will be able to conduct to the system to ensure simulated trade toes ensure there arent any glitches. Incidentally, nasdaq did conduct a test before facebooks botched ipo last year. The nyse wont say wheres thats a factor for the twitter test. Well take a short break. Head to our fresh blog post on attitudes towards internet dating. Read up on why more and more americans go online to look for love. Follow us, as well, on twitter cnbcworld. Earlier we told you how shares in Spanish Construction Company<\/a> fcc were rallying after bill gates purchased 6 of the youre fwrup for around 155 million. The move makes gates the second biggest shareholder in the firm behind its chair woman. So weve been asking what does bill gates want to do with a Spanish Construction Company<\/a> . What does he know that we dont . Its clearly a leveraged take. Gates fcc turn around with Global Vision<\/a> of citizen service, sustainability and technology cities. Thats one thought. Send us yours. Worldwide cnbc. Com, tweet direct to me rosswestgate or cnbcwex. Well talk about the Employment Data<\/a> as we show you where futures are trading ahead of the open today. Pretty flat, really. No surprise on that. Well be back in a few moments. Managing them, moving them, making them work. We oversee 20 of the worlds financial assets. And that gives us scale and insight no one else has. Investment management combined with investment servicing. Bringing the power of investments to peoples lives. Invested in the world. Bny mellon. Sometimes they just drop in. Always obvious. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets<\/a> and drive forward with broader possibilities. Cme group how the world advances. This is worldwide exchange. Im ross westgate. A recap of the headlines. Get ready for a very rare event. Its jobs tuesday. Yep, the september employment report due today. Finally, after being delayed by the Government Shutdown<\/a>, at cnbcs poll finds 64 of people think payroll will miss forecasts. Conflicting signals about the future of europe from corporates. Chp and advancers trading higher. Warning the volatile fx rate will hit its outlook. And the big guns fire in the tablet wars, nokia and apple unveiling new models while microsoft surface2 goes on sale. And fcc gets a billionaire boost. Shares in the Spanish Construction Company<\/a> up nearly 10 after bill gates guys a stake to become the second biggest shareholder in the company. Youre watching worldwide exchange. Bringing you Business News<\/a> from around the globe. All right. If youve just joined us this morning in the united states, a very warm welcome to you. Very good morning. Ahead of the u. S. Open, ahead of the employment report today, u. S. Futures arent doing an awful lot. They didnt do much yesterday, the dow down 7 points, the s p up 0. 1 . Right now, the dow is 11 points below fair value. The nasdaq is the s p 500 at the moment is fairly flat. Its about a point below fair value, as well. The nasdaq is about 8 points above fair value. European equities, well, the ftse is up 0. 1 . It was up 31 points yesterday. The xetra dax with the cac 40 down over 0. 1 . The ftse mib is flat. Its pretty much a lot of caution ahead of the better late than never september jobs report. Its out at 8 30 eastern. Delayed by 2 1 2 weeks because of the Government Shutdown<\/a>. Nonfarm payrolls are forecast to rise by 180,000 versus 169,000 in august. And unemployment is expected to hold steady. It probably wont be as influential as usually. It wont reflect the impact of the shutdown, which has likely slowed higher and the number is almost certain to be revised in two weeks when we get the october jobs report. John is joining us now from boston. Good to speak to you, john. Bearing in mind all those caveats about this number, what should we do with it . Maybe we should hit the Snooze Button<\/a> and go back to sleep. But were not going to do that, are we . No. I think whats going to happen is were going to see this number at 8 30. As long as its within that range, maybe, of 150,000 to 200,000, the markets will largely ignore it. There will be some issues over the Participation Rate<\/a>, im sure, if the Participation Rate<\/a> falls again, that will get a lot of play. If the Unemployment Rate<\/a> does drop, that will get a lot of play, as well, if its for the wrong reasons. But about 8 35, were going to move on and start focusing on the october report out in just a few weeks. I think thats probably the game book. But then that will be clouded by the shutdown. How long is it before we actually get some clean data that we can actually pin any certain economic forecasts on and then the fed can make the decisions of. Thats the key. We finally got all the different data releasing agencies yesterday chime in with when theyre going to release the reports. And that tells you that its going to be, believe it or not, late november, early december before they get everything back in order from where it was before the shutdown. So that doesnt give the fed almost any chance at all to have enough visibility to begin tapering in october. And i think right now tapering in december is a 50 50 shot because, remember, right before the disease fomc meeting what happens is that the new Super Committee<\/a> in Congress Reports<\/a> out, so thats going to create some more distress. But in terms of the data, i think were a good six, maybe even eight weeks away from getting some clean data. Time may be the best guide of whats going on is what were hearing from companies, right . So whats your take away from what companies are saying about the health of the economy . You know, so far, so good. I think we had a lot of reports last week that looked pretty good. Theyre, you know, surprising, not a lot of issues over the Government Shutdown<\/a>. Which i think is good news. But, of course, those reports were only for through the end of the september. So the shutdown, of course, hit october 1st. So i think what were hearing generally from companies is that profits look okay, not great. Global sales look okay, not great. Were still seeing a lot of buybacks. Were still seeing a lot of dividends. Thats helping to drive stock prices higher. But i think from corporate americas perspective, so far, so good. John, well take a pause. Get your o. J. Or whatever it is that keeps you going at this object scenely early hour in the morning stateside. Well come back to you in a little bit. Thanks for now. The u. S. Government is calling on outside help to fix its troubled health care website. It has asked verizon to work on healthcare. Gov. Experts suggest verizon understands the government process because it has already contracts with hsc and medicare. On monday, president obama said there were no excuses for the bug affecting the online exchange. It crashed. Meanwhile, netflixs success with original content like orange is the new black have investors seen green. Well have more as after the break. Mine was earned orbiting the moon in 1971. Afghanistan in 2009. On the u. S. S. Saratoga in 1982. [ male announcer ] once its earned, usaa Auto Insurance<\/a> is often handed down from generation to generation because it offers a superior level of protection and because usaas commitment to serve current and former military members and their families is without equal. Begin your legacy. Get an Auto Insurance<\/a> quote. Usaa. We know what it means to serve. [ male announcer ] united is rolling out global, satellitefed wifi to connect you even 35,000 feet over the ocean. Thats. Wifi friendly. Netflix continues its year long surge as the Video Streaming Company<\/a> reports blockbuster earnings. Julia boorstin has more. Netflix shares soaring after hours on better than expected quarterly results. The Company Reported<\/a> 52 cents in earnings per share. Thats three pennies better than expected and up from just 13 cents a year ago on 22 higher revenue of 1. 1 billion. But its not just about the bottom line. Netflix added more subscribers than expected. 1. 29 million u. S. Streaming subscribers and 1. 44 milli incidenter National Subscribers<\/a> to end the quarter with more than 40 million streaming subscribers around the world. And the companys outlook for the Fourth Quarter<\/a> is rosy on par with last years growth and higher earnings than expected. And the companys investment and originals seems to be paying off. Hastings saying theres a halo effect and that it will double its investment in original content. But it is the exclusive tv series that draw a bigger percentage, the companys overall viewing. Coming up, netflix says to expect more International Expansion<\/a> following the move into the nordics and the neitherererlands. And hastings says hes like to partner with companies to imbed netflix in their box. Back over to you. And joining us for more from stamford, connecticut, edward. High end of the companys subscriber outlook, exceeding consensus estimates. Can they keep building from here . I think they can. I think theyve got great portfolio of contend. I think that theyve got a service that is very you know, works very well for a large audience. I think they can continue to do very well from here. Whats driving this . You know, really, i think whats driving it more than anything else is the strong content that they have, the exclusive series that julia was referring to as well as the original series. And i think thats what makes the value added experience for a Subscriber Base<\/a> around the world. I mean, theyre at a time is there is there a point when they get to saturation or not . They get more money, they can do better cob tent, and then does it keep going . I think you have a virtual cycle that you keep referring to. You have this key value of the content that they have. The content brings about a larger audience and the larger audience brings about strong wordofmouth which brings about additional subscribers. The virtual cycle is key to this. But i think that the key thing is that at some point, you can get to saturation. Were not really sure where it is. But clearly, the stock is pricing in. Its a significant sustained period of growth. And youve, transfer, raised the target price, as well. What are you now whats now your target price . Were now looking at were still our target price is 370, which i think is still below where the stock will open or will be trading today. And i think the key thing here, you have to kind of keep in mind, is that most everyone is focusing on subscribers and subscriber head count. I think thats whats keeping the momentum going in the stock. To justify, a continued significant move from here what youre pricing in is a massive growth of subscribers over a period of time the and there may be a question of whether we get that massive are we starting to get to the point where we start pricing the stock for some sort of perfection or performance . Well, we might be. But i think whats moving the stock more than anything else in the shortterm is going to be subscriber growth and subscriber numbers. And its shortterm thats probably going be fairly good. But i think as you extend out over a period of time and you look at where things ultimately can go, thats where were begin to go price in, you know, as i was saying, pretty sustained period of significant subscriber growth. Wa about International Expansion<\/a> . How key is that going to be . I think international is really pretty critical. I mean, i think if you look at hbo as being a Comparable Service<\/a> to netflix, and you see hbo subscribers are pretty significant in the International Territories<\/a> relative to the domestic market, i think international becomes, you know, very critical area for them for longterm in terms of driving their business and subscriber head count. All right. Edward, good to see you this morning. Edward williams joining us today. Thanks very much, indeed, for that from bmo capital markets. Now, Texas Instruments<\/a> Third Quarter<\/a> profit was down 20 on slightly lower sales and a higher tax benefit last year. Ti is projecting revenues below analyst forecasts. The company struggled against lackluster demand in recent quarters. Its shifting away from mobile chips to embedded processes. Which are used in cars and Industrial Equipment<\/a> as well as analog chips. Shares down nearly 3 in after hour. Shares in chip designer armor also lower today in london despite better than expected Third Quarter<\/a> earnings. They bostoned a nearly 20 jump in pretax profits earlier. The rise in lower cost phones presents a huge growth opportunity. Theres a big mix of technologies that go into a smartphone, even in a low end smartphone. Theres opportunity for many components. And we see generally that growth of lower end and entry level phones not just in developed cups, but in developing countries. In fact, maybe those words having some impact as the stock has bounced back, as you can see. Its now up 7 pounds, 1046. Thats the ceo of arm. And is it to him to trade in your old ipad . Apple is holding an event. Apple is holding an event in San Francisco<\/a> at 1 00 p. M. Eastern. Its expected to unveil the next version of the popular tablet. Reports suggest that it will have a faster processor and the first redesign since 2011. Images suggest it looks a lot like the ipad mini. Speaking of that, apple is expected to introduce ipad mini 2. It will be faster and have a better display feature thats currently on the bigger ipad. Apples stock today in frankfurt, up about 0. 3 . Nokia has been unveiling new devices at an event. The Finnish Company<\/a> has unveiled a new lumina, coming equipped with a 6 of inch screen as well as the lumina 2520. Microsofts new service2 tablets are on sale this morning. Speaking of smiek row soft, speculation has been growing over potential success for steve balmer who required within a year. Earlier today, mark herd was asked if hed be willing to take the top job at microsoft. He declined to comment. Instead, he focused on his own company. Worldcorps asoracle is looki revenues. Oracle is gaining share. Were investing about 5 billion in r d, investing a lot of that into the cloud. Into applications with social and mobile capabilities. And were gaining share. Were pretty happy with our portfolio and our position. And a recap of the headlines today, get ready for the delayed data. U. S. Nonfarm payroll figures due out at 8 30 eastern today. Microsoft, nokia all facing new tablet peps. And bill gates make a move, the technology lendend buying a 6 stake in Spanish Construction Company<\/a> fcc. [ driver ] today, my ambulance knew all about a bike accident, just by talking to a helmet. It grabbed the patients record before we even picked him up. It found out the doctor we needed was at st. Annes. Wiggle your toes. [ driver ] and it got his okay on treatment from miles away. It even pulled strings with the stoplights. My ambulance talks with smoke alarms and pilots and stadiums. But, of course, its a good listener too. [ female announcer ] today cisco is connecting the internet of everything. So everything works like never before. [ female announcer ] today cisco is connecting the internet of everything. Stick with innovation. Stick with power. Stick with technology. Get the flexcare platinum. New from philips sonicare. European markets ahead of the u. S. Open today. The employment report has been fairly mixed and flat. The xetra dax is flat. The cac 40 likewide and the ftse mib. Were going nowhere fast, folks, until today until we get that employment report. So this is the agenda in addition to the september jobs tuesday figure. There are a fair number of earnings today. Weve got dow components due upon, travelers, United Technologies<\/a> all reporting before the open, as do coach, delta, Harley Davidson<\/a> and Lockheed Martin<\/a>. After the close, well amgen and panera bread. European equities, fairly flat. Few is about 10 30i7b9s below fair value. The nasdaq is about nine points above fair value. The s p 500 is pretty much 1. 5 points below fair value, as well. Wa do you do . Jobs are in focus. Here is a recap of some of the thoughts the experts have had this morning. We look at whats in the spot markets and in option markets. The view has moved vithly against the dollar. So concentration come market pricing, its quite attractive because theres a risk reward perspective if we get a price in the data and were starting to get a data thick and fast now. We think payroll will be stronger in q4 than in q3. In that situation, you could get quite a shot in the arm. So its still die verging pasts. So the entity is not anywhere close to removing the core. The fed, they want to taper, they cannot do it now. But eventually, they will. I dont think the market will pay too much attention unless this is a big one on the up side or the down side. Theres a lot of emphasis on this number relative to whether or not tapering is before march or after march. So it does have a big impact on sentiment, the respect being one single data. Thats the thoughts of some of the guests weve had. We heard from john kanally. And rejoining us, john, i hope youre refreshed after breakfast or whatever youve been able to get in. Now, we spoke earlier, we were going to have a focused data. Its not going to clear until maybe the end of the year. And weve been hearing from corporates, as well, about the u. S. Economy. How important for Global Investors<\/a> is what happens with the u. S. Economy and the fed compared to what happens with the rest of the world . You know, i think for the u. S. , if you look at where gdp growth is, its only around 2 . So for u. S. Corporations who want to grow more than that, theyre going to have to look overseas. And i think what youre seeing is that china is probably, you know, stopped getting worse. Theyre kind of in that 7 1 2 to 8 range. But i think markets are still expecting 10. I think over in europe and the uk, things have stopped getting worse and i think theyre about to get better. I think the best case for the economic picture globally might be japan where growth estimates have soared over the last year. Now, markets have reacted to that, as well. So i think that global picture for most u. S. Corporations matters more than whats going on in the u. S. But for some of those u. S. Companies, make the small and mid sized ones, i think they depend more on the u. S. Picture. And for some of them, things arent so bad, either. So i think its a bit of both, but i think the overall theme is that Global Growth<\/a> has kind of stabilized here over the last six months or so after being really rocky between 2010 and early 2012. Yeah. Deflection of that has been a lot of institutions have been switching investments out of u. S. Equities back into european equities. Do you think thats do you think thats the right move . Well, you know, within our models that we recommend to our clients, we still have a u. S. Domestic focus. If were looking overseas, we probably look to the emerging markets first. For example, right now, we do own some emerging market debt and a few of our models. I think on europe, definitely has stopped getting worse, but the question is can europe fix its broken financial transmissions mechanism . Were going to get data on that later this week when we get the september data on m3 and lending to small and medium sized businesses. But thats a key. What youre seeing in europe is that, you know, the ecb is creating some money supply. Its up maybe 3 or 4 . But lend to go small and Medium Sized Enterprises<\/a> is down 3 or 4 . Its difficult to grow an economy when you have that kind of dichotomy. So i think if you can get ta fixed, thats a big help. Would you choose companies that in the u. S. Earn a bulk of their earning easy dmic inings from global activities . Right now within our models, we are overweight, small and mid sized stocks and for the most part, those companies earn most of their growth from domestic sources. So right now, thats where were positioned. However, if you look at the sectors that weve favor, which would be the industrial sector and somewhat the consumer discretionary, that does have a bit of a more International Flavor<\/a> to it. Looking at the equity exposure, we dont have any direct exposure, either, to europe or asia right now. All right. John, thanks for that. Good do you see today, john canale at lpl football out of boston. Earlier, we told you how shares in Spanish Construction Company<\/a> fcc were rallying after bill gates invested in the group for around 155 million. Weve been asking what does he know about leverage play on spanish property that we dont . Brian cox emailed to say i think gates seeses once spain covers from the recession that there are so many people and Many Americans<\/a> that have been talking about investing in spain because of the climate, friendly people and reliable government. There you go. Thanks, brian, for that. Thanks for everybody else who emailed in. Thats it for todays show. Countdown to jobs continues right now with squawk box under way in just a few moments. Have a profitable day. Sfwhoo good morning. Its 18 days late and its on a tuesday. But the friday jobs report from the Labor Department<\/a> will come this morning and well give it all the hype that we give it every time it comes on a friday. And earnings central, the dow components due upon travelers and united tech all before the bell headliners. Its tuesday, october 22nd, 2013. And squawk box begins right now. Good morning, everybody. Welcome to squawk box here on cnbc. Im becky quick along with joe kernen and Steve Liesman<\/a> in for andrew ross sorkin. Appeared rue is still on assignment in asia today. Our top story this morning, the late but so important september jobs report. Economist res looking for an increase of 180,000. The Unemployment Rate<\/a> is seen Holding Steady<\/a> at 7. 3 . Well know more from steve and why todays report could be key for the markets in just a few minutes. The other likely driefl in todays earnings. Well be getting numbers from dupont, travelers, Lockheed Martin<\/a> and many others. Were getting ready for all of those numbers. In the meantime, the futures are ahead of it all. S p futures off by 1. 8. Steve, over to you, this is going to be an important jobs numbers even though it may not be reflective of whats happened since then. Ye","publisher":{"@type":"Organization","name":"archive.org","logo":{"@type":"ImageObject","width":"800","height":"600","url":"\/\/ia902306.us.archive.org\/13\/items\/CNBC_20131022_080000_Worldwide_Exchange\/CNBC_20131022_080000_Worldwide_Exchange.thumbs\/CNBC_20131022_080000_Worldwide_Exchange_000001.jpg"}},"autauthor":{"@type":"Organization"},"author":{"sameAs":"archive.org","name":"archive.org"}}],"coverageEndTime":"20240620T12:35:10+00:00"}