Federation tells cnbc we expect sales to hit the groups. 9 forecast. Good morning, everyone. Well, if you celebrated christmas, hope you had a fantastic break. For me, usually these breaks are way too short. Let me tell you how u. S. Futures are shaping up this morning. Were looking mixed as far as the dow, the nasdaq and the s p 500 are concerned. The dow hit another record high in yesterdays trading session. It was up for the sixth straight session and hitting record highs on a nominal basis for the sixth day in a row, as well. The s p 500 also ending at another record high. The dow up about 0. 75 and the s p 500 rising around 0. 5 . Remember, jobless claims falling by more than expected yesterday at a onemonth low. We have a rally in retail related stocks after we got a data about the Retail Shopping season. That was better than speexpecte. I want to show you how european markets are doing this morning. They are back online after they were closed for the Christmas Holiday for about two or three days each. The xetra dax, hitting another record high, up around 0. 8 . So this yearend christmas rally certainly continuing. In corporate related news, daimler saying its truck business will top last years sales numbers. The cac 40 and the ftse mib also seeing some nice gains, around 0. 9 for the French Market. In terms of the asian trading session, well, we saw some choppy trading, the s p asx 200 down marginally. The shanghai composite up around 1. 4 . The pboc injected liquidity into the markets this week and that led to the steep decline in terms of the sevenday repo rate. So the fears about the credit crunch, which we had last were specifically, they continue to abate and the nikkei 225 up marginally, maybe some profit taking on the back. Most of the yen against the dollar or dollar yen rather briefly touching that 105 level. In terms of the bond markets, some interesting moves that we saw this morning in terms of the tenyear treasury briefly touching that 3 level just a few minutes ago, but back below that level now, 2. 99 is where were trading right now. A lot of people said we shouldnt be too surprised if we see that 3 level. The first time weve seen this hit since the month of september this week because were seeing so little trading volume, so volatility is probably going to be higher. Tenyear bunch tracking u. S. Treasuries lower on the yield at 1. 93 . And last but not least in the forex markets, cable hitting the highest level since august 2011 this morning, 1. 6486 is where were trading at. And dollar yen, back below that 105 level at 104. 83 up by a little bit. Japanese consumer inflation topping 1 in november for the first time in five years coming in higher than forecast at 1. 2 . Meanwhile, factory output rose for a Third Straight month. Retail sales jump and job availability hit a sixyear high, this all adding to growth signs japans recovery is gathering momentum. So how Prime Minister shinzo abes goals looks back at the highs and lows of abe nomics. The nikkei 225 advances here is anything to go by, abe nomics has been a roaring success with yeartodate gains of over 50 . The index surging past the 16,000 level on tuesday for the first time in six years. But its worth to take a look back at some of abes bold moves since taking office. In january, it was a big bang. The bank of japan under the stewardship of the previous governor raised the inflation target to 2 . By the end of fep february, a changing of the guard at the boj. Abe nominated kuroda as the head of the central bank, fueling speculation of further monetary stimulus. And increased fate between member countries. But a pledge to inject 1 1. 4 trillion into the economy in less than two years stunned the markets as the boj aimed to double its Monetary Base by tend of 2014 with kurodas term just beginning. In may, though, weak chinese data and the first mention of the Federal Reserve drawing back quantitative easing sent the nikkei 225 plunging more than 7 , its biggest oneday loss in two years. And by the summer, expectations fizzled when abenomics has unveiled reform which disappointed many hoping for details. But by july, the Political Climate improved with abes push for economic recovery, the liberal Democratic Party coalition cemented power in japans upper house election. By october, japan took a long awaited decision to raise its sales tax by three percentage points. Thats the first increase since 1997 and was accompanied by a 5 trillion yen stimulus plan. November marked the first year of abenomics, and while japans health dramatically improved, the economy faced challenges. That was affected in the Third Quarter where growth was revised lower. Tpp talks hit a road block after japan failed to make concessions for the u. S. But on the bright side, the nikkei has surged over 50 this year, making it one of the best performing equity markets globally. Back to you. Joining me now for the full hour of Worldwide Exchange is jeffrey view, strategist at fbx. Did you have a good christmas . Yes, thank you. Clearly ending the year with a bang, just below 105. 1. 2 , core cpi, were halfway there, arent we . If you look at the overall performance of abenomics related asset classes, people will say it has been a success. But if you look at the structural reform, it seems like people are not making adju adjustments on it. So long as dollar yen is higher, the nikkei is going up. At some point, though, people are going to ask questions about how you follow through and at what point does this former inflation become more pernicious. You can print your way to 3 , 10 inflation if you wanted to, but is that the road japan wants to go down upon . And we are in favor of being long dollar yen still. We are cautious about this turning into a round, and that will be bad inflation and bad currency movements for japan. And it is all about wages, isnt it . We saw the month of november, regular wages didnt fall for the first time in 17 months. That is a very, very good indicator. But is it going to persist once we hit the consumption tax in april . If you look at what the boj and japanese governments are trying to tell corporates, saying you need to pass on more of your income gaines and towards underlying wages. You need to allow japanese households to feel better about their underlying asset position, they need to spend. You need consumption to start picking up. That would start to reverse longer term lines, core inflation, otherwise youll be importing prices and at some point i think japanese household res going to say, hold on a second, we want dollar yen higher, but not to the extent that our real income is starting to fall. That may result in some rather adverse effects in the japanese economy. You are skeptical, but on the other hand, you say stay long dollar yen and there have been some wild and bold calls out there. And i believe we could see dollar yen around 125 by the end of next year. Do you have similar outrageous bull calls for the dollar yen . We have a bull call, but its not outraging. Were looking at 110 by the end of the year. 125 is a bold call. If we get back a few years, 124. 75 is the high that dollar yen reached before the Global Economy started to make a turn for the worst. If we go beyond that, 1. 40, 150, then it could go hyperbolic because that outright printing money, outright coming in, the bad inflation coming in, so be cautious about that key 125 level. Anywhere between now and 125, thats good. Beyond 125, our trade might be making money, but we would be flashing the alarm bells. Ene even to reach the 110 levels, wouldnt we have to see another arrow being shot, another round of quantitative easing by the boj . Absolutely. We are looking for more qqe coming in around april. That will be the First Anniversary of the bull decision to announce quantitative easing. That coupled with high yields, we see a more towards 3. 5 towards the end of 2014. That should help things, as well. Real yields starting to favor the u. S. , and hopefully japanese money will flow. That doesnt solve the underlying story of wages. Do send in your emails, worldwide cnbc. Com. Find me on twitter. Meanwhile, lets take a look at todays other top stories. Retailers are already tallying up results from the past few weeks. Thursday, mastercard advisers said holiday sales grew 3. 5 thanks to heavy spending. The ceo of the National Retail federation tells cnbc he still expects sales to hit the groups 3. 9 forecast despite challenges such as the shorter Holiday Season and bad weather. We got off to a great start on black friday weekend. Consumers were out in big numbers. We came out strong. Over the last few weeks, we ran into the inevitable of this shortened, truncated Holiday Season because we knew we had six fewer days in the season and that led to this promotional environment. We knew thats what it took to get people out into the stores. Things should be better than we were last year, given all the positive Economic Data and the surge into the stock market. But he says many u. S. Consumers dont feel like theyve been part of the economic recovery. Meanwhile, in the uk, shoppers surged stores hoping to pick up on holiday sales. Spending is estimated to have hit a record 2. 7 billion pounds on boxing day. Thats including online sales. Still coming up on the show, it may be the season for bargains, but Delta Air Lines, a big give away, turned out to be a huge mistake after just 25. More on that story coming up after the break. This this morning, european equities trade higher following on the session from asia and another record close on wall street. U. S. Retailers are hoping the holidays here continue as the post Christmas Shopping season begins. Abenomics arrows continue to hit the markets. Factory output is wide in other straight months. Now, here is a cool story for you. Delta air lines is owning up to its mistake. The carrier says it will honor the really cheap fares that some passengers bought by accident on thursday. A round trip between cincinnati and minneapolis was sold for 25. Another in cincinnati and Salt Lake City went for 48. Both usually sell for more than 400. U. S. Fwoft rules aimed at truth in advertising require airlines to honor any mistaking fares. What we would like to know is if you could get a deeply discounted flight to a destination of your choice, what would it be . If you want to join the conversation here on Worldwide Exchange, get in touch with us by email, worldwide cnbc. Com, cnbcwex or direct to me carolincnbc. Personally i would want to go anywhere. When you flew into london, i saw thailand, hawaii, all those amazing places. I really want to go anywhere, whether its discounted or not. What about you, jeffrey . Ive always had a soft spot for patagonia. Its beautiful down there and i have an argentine colleague and he keeps telling me how wonderful argentina is. Check it out and see if you can get one of those discounted airfares. Probably not. Still to come on the show, the yen continues to steal the spotlight, hitting a fiveyear low against the dollar and the euro. Well find out what the 2014 trade could be coming up after the break. And well leave but a view of the heat map of how the european markets are trading right know. Well be back. [ male announcer ] this store knows how to handle a saturday crowd. [ 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. Afghanistan in 2009. On the u. S. S. Saratoga in 1982. [ male announcer ] once its earned, usaa Auto Insurance 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. 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Ross spoke to the ceo and began by asking him where growth could come from in 2014. We started to 13 with the thyme tiny revenue decline. We were nearly flat in the Second Quarter and now we start to grow. So in europe is falling the trend. Its not at all a very good market nor a goommy one, but things are progressively awakening. What is going to be key for you . Is a macro environment going to be stronger as far as youre concerned . How does it fooel feed in . The first point is if i look at the consensus, the consensus shows a growth of 3 . A growth of 3 is probably a growth in terms of number of people of more than 8 to 10 with some Price Inflation coming in from the increased calls to india. So on the one hand, we have more and more people in the market and even more and more service. On the other hand, it will lead to probably a stagnation of on shore with europe and u. S. Resources and an increase of offshore resources india, poland and latin america. So that is the demand that is it is driven by cost pressure, and some Growth Initiative really think the digital Channel Management is today the big driver, the big mobilization. Geographical, i would expect we end on a positive note in the uk and in france, surprisingly, and the u. S. , of course. I would probably think things should get better in germany and northern europe. Yao assessment in france is interesting. If you look at the activity data, its been getting worse for france. France might be well back in recession. What is your assessment of the economy and what needs to be done . The first point is the market was surprising. We have shown in france a growth of 3. 7 in the Third Quarter. We are number one in france and we are probably winning market share. Probably thanks to a good segment position we have very little exposure to the state activities of less than 10 . We are big in financial sector. We are powerful in some good sector. So its i dont see the French Market really. We are growing in france. Now about france, there are a lot of comments, but i will say two things. Today, what is required first some tax stability. I dont dream of tax relief, but we need to stop seeing the invention of new tax regime every other week. And the second point where all Corporate Leaders are aligned and just the weight of public spending in the gdp is just wide. And i think its probably removing or limiting the space for the private sector and the private investor. That was the ceo of capgemini. Let me show you what u. S. Futures are doing this morning, the s p taking fair value into account. Its modestly lower and the dow jones is up by 10 points and the nasdaq could rise by almost two points. Keep in mind, as the dow is on track for the longest winning streak since march, it is also on track for the best yearly performance in 2003 is expected to see gains of around 25 to 26 this year. Lets get back to jeffrey, fx strategist at ubs who has kindly agreed to be our guest host on this quiet friday. Now, everything in the market is fairly quiet. But there is one story in the fx markets which has been making headlines over the last couple of days and thats the turkish here ra. With that Political Uncertainty thats playing out in turkey, do you see a floor for the currency right now . We have to look at turkeys fundamentals. Turkeys investment ratios, gdp is far too high, really, just stands alone out there even among some current account in emerging markets. So next year, we have the taper, we have the cost of credit rising across emerging markets. They are under pressure to rebalance in the first place and now with the political mess going on, they probably wont have any space to do anything at all. Its up to the central bank. This could get nasty quickly. So what could the central bank be doing . Thats been very ineffective. It has been damaging to the currency. Should it really be raising rates given that the Growth Outlook isnt that great, either . Well, raising rates probably will be marginally more effective in that intervention. Because the actual size of on turkey is reserved smaller than purported and we know the account of fx deposits. Overall, raising rates, if you look at it in a tapering environment, yes, the tapering has started, but the cost of carry, him being short, em currencies against the dollar right now is still quite high. So that might just be enough, especially at this time of the year where people are still swearing to just tell the short, okay, you might want to think this through. But heading into next year, the fiscal turmoil remains and if we have a disruptive run up to the election where dollar turkey could go. What about other emerging currencies, the indian rupee, the indonesian rupiah, has the tapering moved . We believe it has for now. But the next phase is what will happen on the rebalancing side. So tapering has been priced in, but markets are giving the rupee, the rupee has the benefit of the doubt right now hoping for