Transcripts For CNBC Worldwide Exchange 20140811 : vimarsana

Publicly traded assets into one company into a massive 44 billion deal. Hi, everybody. Welcome to Worldwide Exchange. Very glad youre with us. We have two hours together, kicking off a fresh week on the back of closing out last week with some pretty hefty losses for the week for many of our European Equity markets. This morning, not so. We were called slightly higher after over the weekend we saw some leeway with regards to geopolitics and we saw what seems to be a little bit of a move towards, or in the right direction both with regards to russia and with regards to the middle east, too. Be aware, though, that things can change very quickly and it is still a volatile situation were looking at with regards to the geopolitical tensions. The main european markets, though, trading higher across the board at the moment. Were up by shy of 1 for the ftse and the cac, the xetra dax adding more than a percentage point and same for the ftse mib up 1. 4 . The dax looking at consolidation phases last week or some consolidation technical levels, according to a number of analysts out there, but we are hanging on to that 9,000 womark. The asian markets, we saw strength there overnight in asia, too. The nikkei higher by more than 2 . Shanghai, hang seng and s p asx also higher, so gains across the board really. Now, with regards to what were seeing in russia, the russian market opened significantly higher, as mentioned. Investors cheering a report of a drawdown of troops from the border, despite increasing unrest around donetsk. The nations two largest banks, vtb also in the green with hopes they will remain in the russian index. Looking at the currency rate, you have euro dollar pretty flattish at the moment. Well be talking more about currencies. Lets talk a little bit about what were seeing in ukraine as well. Russian troops, theyve continued their offensive on donetsk after a proposal for a ceasefire from a prorussian rebel leader yielding no result. The fighting concentrating on a particular junction, and we are looking very closely at whats taking place there. Now, the russian president is saying hes ready to consider an aid mission to the east of the country only by an unarmed and International Task force. Now, meanwhile, u. S. Major exxon oil started drilling in the Russian Arctic on saturday, despite sanctions on its russian partner, rosnev. Putin praising them for creating a model of international cooperation. Lets talk more about our markets this morning. Yellen zezico is with fixed income at Pioneer Investments and joins us. Welcome. How are you . Fine. Appreciate you having me this morning. Coming into todays session, i mean, we saw a lot of losses coming out of last week. We heard of a ceasefire both in russia as well as the middle east over the weekend. And this morning were called higher across the board and weve seen gains across the board, too. Do you think its going to continue . Well, i wouldnt really see this as a sign of deescalation, as some people look at it. Its probably lack of reescalation in russia ukraine, and we only have that ceasefire for another 72 hours, at least. So, i think were just having a respite and just a reason to cheer from here. So, were going to probably see some more headlines in russia and ukraine. Obviously, this isnt going to go away from us, so tension will still remain, but it was very, very nervous where investors were expecting to have more explanati escalation. We didnt see that, obviously. No, its interesting. Everything is very volatile at the moment and everything changes quickly as well. Its interesting, we keep hearing about the geopolitical tensions and it does very much seem like its a russiadriven story still, despite the unease taking place in the middle east, too. And i mean, the heating up thats seen both when it comes to gaza, or iraq as well. Would you agree it is more russialed than anything at the moment . Well, i would agree with that, because obviously, were seeing a direct impact, especially on european economy here with the russians countersanctions and we still will see if russia will impose any additional sanctions as they reportedly said they might, as well as i think what weve seen also with ukraine actually stepping in and announcing that they might actually have their own sanctions. And one of the sanctions would be to impose a ban on Energy Transit to europe. And that is a very serious story. Ukrainians obviously taking the initiative to tell europeans not to negotiate behind their back with the russians. And they obviously are looking to impose themselves also with this nuclear option. How is it playing out in fixed income markets, and especially emerging market fixed income, which is the area that you oversee . Weve seen yields coming down substantially across the board in a lot of sovereign debt. Is there a trend thats going to continue here . Are we going to see that reverse at any point in the near future . The trend has been so far for tightening of fixed income markets in general. Emerging markets have enjoyed a very Strong Performance so far, but in the last few weeks, obviously, weve seen a lot of or a big combination of all of these geopolitical factors weighing on the market and also a technical move in u. S. High yields, which is obviously a huge outflow, 7. 1 billion one week. This is something that obviously investors have in mind, thinking oh, this might be the turning point. So, the market feels a little bit nervous, given that the technical situation has been so good for so long for emerging markets. And obviously, all eyes are on the fed. Yeah. Yerlan, well come back and talk about the fed and Monetary Policy within the hour. Youre with us for the hour. Let me just ask you to turn your phone off because were getting a little interference. Meanti meantime, the crisis in ukraine and threats of russian intervention risks upsetting Global Financial markets further, according to managem t management. Martin gilbert said everyone is too relaxed around ukraine and he thinks that financial sanctions on russia will have a big effect. And the lirm saw gains after ree Recep Tayyip Erdogan won the election with almost 52 of the vote. Speaking with cheering supporters in ankara, he struck a cons son si con sill tarry tone. Democracy won again. Those who didnt vote for me won as much as those who did. Those who dont like me won as much as those who do. Well, hadley is in istanbul. Hadley, no surprise we saw erdogan running off with the victory. Whats going to change now, if anything . Reporter well, essentially, what the president elect will do over the next 6 to 12 months is essentially consolidating his power behind the office of the presidency, and hes got to do that by changing the constitution, another risk factor for investors in terms of whether or not they feel that the economy is the place they want to put their money in turkey, is whether or not the economy minister is going to stay on. There is a question whether or not he can do that under party rules. Hes restricted to three terms. And essentially, everyone were speaking to here, at least in the financial community, is saying to us, if he is allowed to stay on, they feel a lot more confident about where the economy is going in turkey. Hadley, thank you very much for that. We will come back out to you and talk a bit more in a bit. Yerlan is still with us. Head of emerging markets fixed income at Pioneer Investments. Thoughts on turkey and thoughts on whether or not were going to see changes from within turkish leadership . I mean, because erdogan won another round of elections, does it mean hes going to appoint a yes man also in the president ial seats . Well, thats whats being the topic of the markets. I think the expectations are that somebody very loyal to him will be appointed as the next Prime Minister and the head of the party excuse me, Prime Minister, yeah. And i think thats a very logical thing to do. So, for me, the bigger question is what happens to the current pack of leaders of the party and his close aides, and were talking about ali baba john, whether hes going to remain in the cabinet responsible or not, who if not, as the rumors are that hes out, who will replace him . And the second, of course, is what happens to the gulab. So, whether he stays in the team in this new reshuffle or whether he will start challenging erdogan directly, and thats obviously something that makes people speak now. Because its also an issue of whether or not hes removed himself too much from his western allies and whether theres a way back and kind of regaining that position that he held on to for quite a while, where he was seen as being both a man of the middle east be and a man of the west at the same time. Well, this is a very difficult act of balance that erdogan now has to play. Youre absolutely right, he has been seen as someone who is moving turkey away from europe and actually economically has helped turkey a lot, redirecting the turkish exports to middle east has been a fantastic opportunity for him. Now theres another opportunity for him actually to get closer to russia, and obviously, thats through the increased exports, turkey exports less than 500 million worth of goods to russia, euros, that is. I think thats a fantastic opportunity now that we have a 12 billion loss of trade between russia and europe. So, turkey has this opportunity now to increase, actually, its ties with russia. Whereas the u. S. And europe is concerned, i think that situation will remain quite fluid. So, we will see how it happens. What do you make of the turkish fixed income market at the moment . Obviously, we do see a lot of pressure from investors. Like last time, we have seen around tapering talks in april of last year, so turkey remains to be vulnerable from the current account perspective, so that will remain a key vulnerability of turkey going forward. So, when the fed changes its back on the Monetary Policy, i think turkey will start to be more volatile on the one hand. On the other hand, obviously, turkey still remains to be a very large opportunity set for investors, a very Strong Economy with an opportunity there in the currency, obviously, at the levels where it still doesnt look overvalued. Well, lovely. Good. I still want to get on and talk more about general Monetary Policy. Were asking viewers to take part in our online poll. Which bond market, if any, is the bubble ready to burst . Bunds, treasuries, periphery, european debt, other markets . Which other assets do you think should be on bubble watch, if any at all . I might ask you that question in a moment as well. But join the conversation right here on Worldwide Exchange. Get in touch with us either on email, worldwide cnbc. Com or twitter louisaboisen. Which is a bubble ready to burst . Still to come, amazon halting orders of some disney movies. Thats coming up. Also, its a fourth major for rory mcilroy, as he claims the uspga at valhalla, becoming the first backtoback major winner since 2008. And Silicon Valley is all abuzz over anderson horowitzs latest investment. Is buzzfeed really worth 850 million . Find out why the Venture Capital giant thinks that the website is a media gamechanger. And its not done there, because success at a price. We see how pricelines recent acquisitions and chinese expansion is impacting earnings as well. Youre watching Worldwide Exchange on a monday morning. Stay with us. More to come after the break. Where the reward was that what if tnew car smelledit card and the freedom of the open road . A card that gave you that im 16 and just got my first car feeling. Presenting the buypower card from capital one. Redeem earnings toward part or even all of a new chevrolet, buick, gmc or cadillac with no limits. So every time you use it, youre not just shopping for goods. Youre shopping for something great. Learn more at buypowercard. Com hi, everybody. Good morning. You are indeed. Im louisa bojesen. Kinder morgan is consolidating its oil and gas pipeline empire under one roof. Its buying the outstanding shares of its family of companies, Kinder Morgan energy partners, Kinder Morgan management, and El Paso Pipeline Partners, for 44 billion at premiums between 12 and 16 to fridays closing price. Now, its the largest deal in the sector since exxonmobil bought mobile for 74 billion back in 1999. Kinder morgan controls about 80,000 miles of pipeline in north america. And shares of the companies in german trade, el paso pipeline jumping while Kinder Morgan is off just a tad. Blackstone is reportedly close to a deal to buy 50 stake in shells shale gas field in louisiana for 1. 2 billion. Shell entered the region known as haynesville in 2007 through a joint venture. Blackstone already has a presence in louisiana, investing 2 billion in energy to build liquefied natural gas plant. Shares here both trading slightly lower. The pace of u. S. Recovery disappointing, according to the Federal Reserve vice chair Stanley Fischer. In prepared remarks for a conference in sweden, he says that slowing Labor Productivity and housing headwinds are undercutting growth. The feds number two also suggested that longterm annual growth could be as low as 2 , below the Central Banks previous forecast. Yerlan, Stanley Fischer speaking in sweden later today. Are we going in the right direction with regards to fed policy . We keep seeing tapering. Were still a long ways from rates going up, we think, or is that the case . Well, the markets still believe that were on course for the end of the qe, so the tapering is on. But the main question is whether the policy rates will be revised soon after or to what extent those rates will go higher. So, i think this is the most important question. Now, lets bring max king into this discussion as well. Hes a Portfolio Manager at Investec Asset management, with us, too. Max, welcome. What do you think in terms of fed policy . Well, i think if the u. S. Economy accelerates, then the Federal Reserve will need to raise Interest Rates, and that is wholly a good thing from the point of view of investors. We still want to see accelerating growth turning into something that brings forward subsequent busts in the next recession, so we would welcome Interest Rate rises as a response to higher Economic Growth. But even with the last jobless figure, which was a bit disappointing, why would we move ahead when yellens target really is still is whether we have a sustainable and a strong jobs market . Thats a fair point. So, i think thats the reason why some of the people in the fed believe its still premature to talk about anything in terms of a higher policy rate. So, i think we will maintain just the tapering at the time, at the moment, but i think fed will be very, very dovish in terms of its policy rate. The Unemployment Rate in the u. S. Seems to be falling pretty fast, but the Federal Reserve insis insists its at capacity. Hopefully, not so too late. How squeezed is the Housing Market going to be once rates start going up . I think of course its dangerous to talk about u. S. Housing markets because all Housing Markets are local, especially in the u. S. In the u. S. , theyre firstly regional, then theyre local. So, i think the housing fundamentals in one part of San Francisco and another part of new york are completely different from what they are in phoenix, arizona, or memphis, tennessee. Yerlan . Well, i absolutely agree. I think housing probably will remain to be the most important factor in u. S. Growth. Of course, we have seen a big progress and pickup in employment and a few other sectors like petrochemicals for example or anything that is concerned with oil or gas exploration. So, i think this is something that will continue driving together with the housing. Okay. Lets talk about japan a bit and whats been going on there, because Japanese Equities posting their biggest oneday gain in four months as part of a broad rally in asia. Exporters led the nikkei higher as it recovered most of the losses that it sustained on friday. The yen coming off its sharp gains last week, helping the Overall Index to rise by 2. 4 . The bank of japan has warned that the expansion of Japanese Companies overseas may weigh on exports. In its monthly report for august, it said that it expects output to increase moderately, but it singled out automakers and personal computer makers for weaker growth, this as Consumer Confidence rose for the third consecutive month in july ahead of whats expected to be a weaker gdp reading on wednesday. How much weaker could it be, max . Well, i think theres too much attention on japan. The relative about japan is were seeing strong Earnings Growth and earnings have been upgraded. The earnings upgrades in japan are as strong as in the u. S. Valuations are modest, more modest than they are in the u. S. , and the japanese market is very attractive. The trouble with the westerners in terms of investing in japan is theyve been in too much of a hurry. Theyve expected too much too soon. And the underlying story about japan, steady reform, rising corporate earnings, increasing response to shareholders, has been pretty positive. And of course, there is no population growth there. So, the underlying economy in terms of Worldwide Exchange<\/a>. Very glad youre with us. We have two hours together, kicking off a fresh week on the back of closing out last week with some pretty hefty losses for the week for many of our European Equity<\/a> markets. This morning, not so. We were called slightly higher after over the weekend we saw some leeway with regards to geopolitics and we saw what seems to be a little bit of a move towards, or in the right direction both with regards to russia and with regards to the middle east, too. Be aware, though, that things can change very quickly and it is still a volatile situation were looking at with regards to the geopolitical tensions. The main european markets, though, trading higher across the board at the moment. Were up by shy of 1 for the ftse and the cac, the xetra dax adding more than a percentage point and same for the ftse mib up 1. 4 . The dax looking at consolidation phases last week or some consolidation technical levels, according to a number of analysts out there, but we are hanging on to that 9,000 womark. The asian markets, we saw strength there overnight in asia, too. The nikkei higher by more than 2 . Shanghai, hang seng and s p asx also higher, so gains across the board really. Now, with regards to what were seeing in russia, the russian market opened significantly higher, as mentioned. Investors cheering a report of a drawdown of troops from the border, despite increasing unrest around donetsk. The nations two largest banks, vtb also in the green with hopes they will remain in the russian index. Looking at the currency rate, you have euro dollar pretty flattish at the moment. Well be talking more about currencies. Lets talk a little bit about what were seeing in ukraine as well. Russian troops, theyve continued their offensive on donetsk after a proposal for a ceasefire from a prorussian rebel leader yielding no result. The fighting concentrating on a particular junction, and we are looking very closely at whats taking place there. Now, the russian president is saying hes ready to consider an aid mission to the east of the country only by an unarmed and International Task<\/a> force. Now, meanwhile, u. S. Major exxon oil started drilling in the Russian Arctic<\/a> on saturday, despite sanctions on its russian partner, rosnev. Putin praising them for creating a model of international cooperation. Lets talk more about our markets this morning. Yellen zezico is with fixed income at Pioneer Investments<\/a> and joins us. Welcome. How are you . Fine. Appreciate you having me this morning. Coming into todays session, i mean, we saw a lot of losses coming out of last week. We heard of a ceasefire both in russia as well as the middle east over the weekend. And this morning were called higher across the board and weve seen gains across the board, too. Do you think its going to continue . Well, i wouldnt really see this as a sign of deescalation, as some people look at it. Its probably lack of reescalation in russia ukraine, and we only have that ceasefire for another 72 hours, at least. So, i think were just having a respite and just a reason to cheer from here. So, were going to probably see some more headlines in russia and ukraine. Obviously, this isnt going to go away from us, so tension will still remain, but it was very, very nervous where investors were expecting to have more explanati escalation. We didnt see that, obviously. No, its interesting. Everything is very volatile at the moment and everything changes quickly as well. Its interesting, we keep hearing about the geopolitical tensions and it does very much seem like its a russiadriven story still, despite the unease taking place in the middle east, too. And i mean, the heating up thats seen both when it comes to gaza, or iraq as well. Would you agree it is more russialed than anything at the moment . Well, i would agree with that, because obviously, were seeing a direct impact, especially on european economy here with the russians countersanctions and we still will see if russia will impose any additional sanctions as they reportedly said they might, as well as i think what weve seen also with ukraine actually stepping in and announcing that they might actually have their own sanctions. And one of the sanctions would be to impose a ban on Energy Transit<\/a> to europe. And that is a very serious story. Ukrainians obviously taking the initiative to tell europeans not to negotiate behind their back with the russians. And they obviously are looking to impose themselves also with this nuclear option. How is it playing out in fixed income markets, and especially emerging market fixed income, which is the area that you oversee . Weve seen yields coming down substantially across the board in a lot of sovereign debt. Is there a trend thats going to continue here . Are we going to see that reverse at any point in the near future . The trend has been so far for tightening of fixed income markets in general. Emerging markets have enjoyed a very Strong Performance<\/a> so far, but in the last few weeks, obviously, weve seen a lot of or a big combination of all of these geopolitical factors weighing on the market and also a technical move in u. S. High yields, which is obviously a huge outflow, 7. 1 billion one week. This is something that obviously investors have in mind, thinking oh, this might be the turning point. So, the market feels a little bit nervous, given that the technical situation has been so good for so long for emerging markets. And obviously, all eyes are on the fed. Yeah. Yerlan, well come back and talk about the fed and Monetary Policy<\/a> within the hour. Youre with us for the hour. Let me just ask you to turn your phone off because were getting a little interference. Meanti meantime, the crisis in ukraine and threats of russian intervention risks upsetting Global Financial<\/a> markets further, according to managem t management. Martin gilbert said everyone is too relaxed around ukraine and he thinks that financial sanctions on russia will have a big effect. And the lirm saw gains after ree Recep Tayyip Erdogan<\/a> won the election with almost 52 of the vote. Speaking with cheering supporters in ankara, he struck a cons son si con sill tarry tone. Democracy won again. Those who didnt vote for me won as much as those who did. Those who dont like me won as much as those who do. Well, hadley is in istanbul. Hadley, no surprise we saw erdogan running off with the victory. Whats going to change now, if anything . Reporter well, essentially, what the president elect will do over the next 6 to 12 months is essentially consolidating his power behind the office of the presidency, and hes got to do that by changing the constitution, another risk factor for investors in terms of whether or not they feel that the economy is the place they want to put their money in turkey, is whether or not the economy minister is going to stay on. There is a question whether or not he can do that under party rules. Hes restricted to three terms. And essentially, everyone were speaking to here, at least in the financial community, is saying to us, if he is allowed to stay on, they feel a lot more confident about where the economy is going in turkey. Hadley, thank you very much for that. We will come back out to you and talk a bit more in a bit. Yerlan is still with us. Head of emerging markets fixed income at Pioneer Investments<\/a>. Thoughts on turkey and thoughts on whether or not were going to see changes from within turkish leadership . I mean, because erdogan won another round of elections, does it mean hes going to appoint a yes man also in the president ial seats . Well, thats whats being the topic of the markets. I think the expectations are that somebody very loyal to him will be appointed as the next Prime Minister<\/a> and the head of the party excuse me, Prime Minister<\/a>, yeah. And i think thats a very logical thing to do. So, for me, the bigger question is what happens to the current pack of leaders of the party and his close aides, and were talking about ali baba john, whether hes going to remain in the cabinet responsible or not, who if not, as the rumors are that hes out, who will replace him . And the second, of course, is what happens to the gulab. So, whether he stays in the team in this new reshuffle or whether he will start challenging erdogan directly, and thats obviously something that makes people speak now. Because its also an issue of whether or not hes removed himself too much from his western allies and whether theres a way back and kind of regaining that position that he held on to for quite a while, where he was seen as being both a man of the middle east be and a man of the west at the same time. Well, this is a very difficult act of balance that erdogan now has to play. Youre absolutely right, he has been seen as someone who is moving turkey away from europe and actually economically has helped turkey a lot, redirecting the turkish exports to middle east has been a fantastic opportunity for him. Now theres another opportunity for him actually to get closer to russia, and obviously, thats through the increased exports, turkey exports less than 500 million worth of goods to russia, euros, that is. I think thats a fantastic opportunity now that we have a 12 billion loss of trade between russia and europe. So, turkey has this opportunity now to increase, actually, its ties with russia. Whereas the u. S. And europe is concerned, i think that situation will remain quite fluid. So, we will see how it happens. What do you make of the turkish fixed income market at the moment . Obviously, we do see a lot of pressure from investors. Like last time, we have seen around tapering talks in april of last year, so turkey remains to be vulnerable from the current account perspective, so that will remain a key vulnerability of turkey going forward. So, when the fed changes its back on the Monetary Policy<\/a>, i think turkey will start to be more volatile on the one hand. On the other hand, obviously, turkey still remains to be a very large opportunity set for investors, a very Strong Economy<\/a> with an opportunity there in the currency, obviously, at the levels where it still doesnt look overvalued. Well, lovely. Good. I still want to get on and talk more about general Monetary Policy<\/a>. Were asking viewers to take part in our online poll. Which bond market, if any, is the bubble ready to burst . Bunds, treasuries, periphery, european debt, other markets . Which other assets do you think should be on bubble watch, if any at all . I might ask you that question in a moment as well. But join the conversation right here on Worldwide Exchange<\/a>. Get in touch with us either on email, worldwide cnbc. Com or twitter louisaboisen. Which is a bubble ready to burst . Still to come, amazon halting orders of some disney movies. Thats coming up. Also, its a fourth major for rory mcilroy, as he claims the uspga at valhalla, becoming the first backtoback major winner since 2008. And Silicon Valley<\/a> is all abuzz over anderson horowitzs latest investment. Is buzzfeed really worth 850 million . Find out why the Venture Capital<\/a> giant thinks that the website is a media gamechanger. And its not done there, because success at a price. We see how pricelines recent acquisitions and chinese expansion is impacting earnings as well. Youre watching Worldwide Exchange<\/a> on a monday morning. Stay with us. More to come after the break. Where the reward was that what if tnew car smelledit card and the freedom of the open road . A card that gave you that im 16 and just got my first car feeling. Presenting the buypower card from capital one. Redeem earnings toward part or even all of a new chevrolet, buick, gmc or cadillac with no limits. So every time you use it, youre not just shopping for goods. Youre shopping for something great. Learn more at buypowercard. Com hi, everybody. Good morning. You are indeed. Im louisa bojesen. Kinder morgan is consolidating its oil and gas pipeline empire under one roof. Its buying the outstanding shares of its family of companies, Kinder Morgan<\/a> energy partners, Kinder Morgan<\/a> management, and El Paso Pipeline Partners<\/a>, for 44 billion at premiums between 12 and 16 to fridays closing price. Now, its the largest deal in the sector since exxonmobil bought mobile for 74 billion back in 1999. Kinder morgan controls about 80,000 miles of pipeline in north america. And shares of the companies in german trade, el paso pipeline jumping while Kinder Morgan<\/a> is off just a tad. Blackstone is reportedly close to a deal to buy 50 stake in shells shale gas field in louisiana for 1. 2 billion. Shell entered the region known as haynesville in 2007 through a joint venture. Blackstone already has a presence in louisiana, investing 2 billion in energy to build liquefied natural gas plant. Shares here both trading slightly lower. The pace of u. S. Recovery disappointing, according to the Federal Reserve<\/a> vice chair Stanley Fischer<\/a>. In prepared remarks for a conference in sweden, he says that slowing Labor Productivity<\/a> and housing headwinds are undercutting growth. The feds number two also suggested that longterm annual growth could be as low as 2 , below the Central Banks<\/a> previous forecast. Yerlan, Stanley Fischer<\/a> speaking in sweden later today. Are we going in the right direction with regards to fed policy . We keep seeing tapering. Were still a long ways from rates going up, we think, or is that the case . Well, the markets still believe that were on course for the end of the qe, so the tapering is on. But the main question is whether the policy rates will be revised soon after or to what extent those rates will go higher. So, i think this is the most important question. Now, lets bring max king into this discussion as well. Hes a Portfolio Manager<\/a> at Investec Asset<\/a> management, with us, too. Max, welcome. What do you think in terms of fed policy . Well, i think if the u. S. Economy accelerates, then the Federal Reserve<\/a> will need to raise Interest Rate<\/a>s, and that is wholly a good thing from the point of view of investors. We still want to see accelerating growth turning into something that brings forward subsequent busts in the next recession, so we would welcome Interest Rate<\/a> rises as a response to higher Economic Growth<\/a>. But even with the last jobless figure, which was a bit disappointing, why would we move ahead when yellens target really is still is whether we have a sustainable and a strong jobs market . Thats a fair point. So, i think thats the reason why some of the people in the fed believe its still premature to talk about anything in terms of a higher policy rate. So, i think we will maintain just the tapering at the time, at the moment, but i think fed will be very, very dovish in terms of its policy rate. The Unemployment Rate<\/a> in the u. S. Seems to be falling pretty fast, but the Federal Reserve<\/a> insis insists its at capacity. Hopefully, not so too late. How squeezed is the Housing Market<\/a> going to be once rates start going up . I think of course its dangerous to talk about u. S. Housing markets because all Housing Market<\/a>s are local, especially in the u. S. In the u. S. , theyre firstly regional, then theyre local. So, i think the housing fundamentals in one part of San Francisco<\/a> and another part of new york are completely different from what they are in phoenix, arizona, or memphis, tennessee. Yerlan . Well, i absolutely agree. I think housing probably will remain to be the most important factor in u. S. Growth. Of course, we have seen a big progress and pickup in employment and a few other sectors like petrochemicals for example or anything that is concerned with oil or gas exploration. So, i think this is something that will continue driving together with the housing. Okay. Lets talk about japan a bit and whats been going on there, because Japanese Equities<\/a> posting their biggest oneday gain in four months as part of a broad rally in asia. Exporters led the nikkei higher as it recovered most of the losses that it sustained on friday. The yen coming off its sharp gains last week, helping the Overall Index<\/a> to rise by 2. 4 . The bank of japan has warned that the expansion of Japanese Companies<\/a> overseas may weigh on exports. In its monthly report for august, it said that it expects output to increase moderately, but it singled out automakers and personal computer makers for weaker growth, this as Consumer Confidence<\/a> rose for the third consecutive month in july ahead of whats expected to be a weaker gdp reading on wednesday. How much weaker could it be, max . Well, i think theres too much attention on japan. The relative about japan is were seeing strong Earnings Growth<\/a> and earnings have been upgraded. The earnings upgrades in japan are as strong as in the u. S. Valuations are modest, more modest than they are in the u. S. , and the japanese market is very attractive. The trouble with the westerners in terms of investing in japan is theyve been in too much of a hurry. Theyve expected too much too soon. And the underlying story about japan, steady reform, rising corporate earnings, increasing response to shareholders, has been pretty positive. And of course, there is no population growth there. So, the underlying economy in terms of Economic Growth<\/a> per capita and gdp per capita is pretty positive. So, were very relaxed indeed about japan. Yerlan . Asia . Im not really following japan that closely, but i think for us, japanese storys probably less about its growth but more about the technicals. And i think the idea of moving Pension Fund Money<\/a> coming from japan actually flowing into japanese equity i think would be the key driver here, and the government seems to be adamant that this should happen and this will continue to drive prices higher. How about jgbs . I mean, do you go for jgbs at any point in the near future . Do you think, look, we need to make sure the japanese market is on track again . Whats your thinking in that regard . People think the japanese economy should be on track, one should be negative on jgbs and the famous widow maker trade people have pursued in the past and have never succeeded. I think for the moment, i think the jgb still remains very stable, anchored at this level. But if anything, probably will be playing for a bearish scenario for jgbs. But were still trying to figure out whether or not the japanese economy is fully out of the woods or whether were going to, you know, see some type of not continued deflation than stagnation in the medium to short term. I think that scenarios probably the most likely that we will see probably the mediumterm stagnation and the market will be driven more by technicals rather than fundamentals. I think its more attractive to pursue the Conversion Rate<\/a> between bonds and to buy japanese bonds. Weve been so long german bunds all year, but weve tended to steer clear of japanese bonds simply because theyre less attractive than the german ones. And its not time to say, look, the bunds rally has gone far enough, yields have been pushed down far enough . We might be getting there, but i think we probably expect the german 10year bund to break 100 basis points. The point is, its a wonderful oasis of safety if youre a southern european saver. You dont want to put your money into the local banks. You worry about the politics in the long term. You see the economy stagnating. The german bunds is a rocksolid state trade for some europeans. Do you think theres a bubble about to burst in the bond market . I mean, is there a bond market bubble somewhere . Well, certainly, some of the valuations that weve seen in u. S. Markets are now under pressure. Some people obviously believe that this is not really any attractive level of yields. And if you look at the historical levels, the valuations are obviously quite low, not only in the u. S. , but say in emerging markets as well. But were not really seeing any fundamental reasons why that should change any time soon, given where the fed is and given whats happening with the Global Economy<\/a>. You dont yields are still positive, and thats the point. Real yields are still positive, in germany, in the u. S. , in uk. If inflation rises, it seems to be a positive and bonds are becoming unattractive, but until you see an upturn in inflation pressures for the long term, youve got to stick with the trade. One person writes in saying the finnish 10year is about to pop. We dont have a strong view on finnish 10year, but i guess given whats happening with regards to russia, i think thats something that is worrying. I think finnish economy might suffer. I think they were discussing with 400 Million Euros<\/a> worth of finnish goods actually being stopped from being imported, so exported to russia. I think that obviously has to be positive for the yields, you know, in terms of the pop. Yeah, yeah. Max, anything else that you think were missing with regards to the general picture in markets at the moment . I mean, is there an area where there is value, despite the fact that were seeing geopolitic geopolitical well, bonds are okay, but i think theres value in equities. And the reason for that is just simply the earnings season has been pretty good and were seeing earnings across the world beat expectations. In the u. S. And japan, its very positive. In the europe, its just merely less bad than feared. And the consequence of that is that not only are the earnings forecasts this year stabilized, but theyre actually starting to go upwards, and that means that actually, the markets week by week become steadily cheaper. So, i think thats a positive for equities and suggest theyre going to be going higher before the end of the year. Max, thank you very much for now. Youre staying with us for a while longer. Yerlan, thank you very much to you. Yerlan syzdykov, Pioneer Investments<\/a>. Thank you. Still to come, is captain america and maleficent versus amazon. Theyre not stopping disney movies as part of a contract dispute. Stay tuned. More in a second. Hi, everybody. Welcome back. Im louisa bojesen. European stocks following asia higher as investors shrug off geoPolitical Risk<\/a>s from the middle east and ukraine. Russian stocks joining the rally, despite intense fighting in donetsk, as kiev forces vow to recapture the ukrainian city. The lira strengthening amid instability as Prime Minister<\/a> erdogan wins the election. And one pipeline family, Kinder Morgan<\/a> is consolidating all its publicly traded assets into one company in a massive 44 billion deal. All right, everyone, just a recap this morning. Glancing at european markets map, youll note were green across the screens, higher in the region of 0. 5 to 1. 5 across the board coming off last weeks dire losses for many european markets out there. We saw green across our screens for the debt markets. Today a little bit on that with yields pushing delicately higher in some places, except for maybe the italian 10year, where the yield is still 2. 8 . The currency markets, the fx rate, yen easing against the dollar, safe haven demands subsiding a tad. You have the aussie dollar at a twomonth low on friday. Aussie bulls still just are getting to grips with the shock jump scene in the jobless state and the downgrade to the forecast for Economic Growth<\/a> and of course, the turkish lira in the dollar as well. We saw a rise in the lira after erdogans president ial win as anticipated. Shares rallying at the top of the stoxx 600 after earnings after the market close on friday. This is the italian lender. They showed a surprise profit in the Second Quarter<\/a>, but the group also said that charges on its bad loans ticked higher from last year. Right next to it youve got bilfinger, the german builder, getting a boost after forecasting significantly stronger performance for the second half of the year helped by cost cuts. The Company Posted<\/a> a 30 drop in quarterly drofts. Balfour beatty has rejected an offer saying there was no Strategic Logic<\/a> for the merger. A statement was made after balfour posted a 53 drop in firsthalf profits. And blackstone is close to signing off on a deal to buy royal dutch shells 50 stake in the huge gas field in louisiana, according to reports. Shells interest in the haynesville shale property is said to be worth 1. 2 billion. Now, iraqs Prime Minister<\/a>, nuri al maliki, has warned that the countrys security situation could get worse after the president failed to nominate him for another term for Prime Minister<\/a>. In a surprise speech on tv, he accused the newly elected president of putting his Political Goals<\/a> ahead of the interests of the people. Translator security situation will get worse and this will have bad consequences and will damage the interests of the iraqi people. I will file a legal complaint to the federal court against the president of the republic, committing a clear constitutional violation for the sake of Political Goals<\/a>. Now, this all coming as the u. S. Launched a fourth round of air strikes on sunday to aid Kurdish Forces<\/a> battling Islamic State<\/a> militants in northern and western iraq. The military also is continuing to drop food and Water Supplies<\/a> to minority yazidis on the mountains. Max king is Portfolio Manager<\/a> at Investec Wealth<\/a> management. Max, we hadnt really expected all of the geopolitical tension or geopolitical focus just, what, two, three months ago, and things have changed very quickly. About you lo when you look at invests at the moment, is there a way to invest . Is it all about dodging some of the geopolitics at the moment . First International Event<\/a> i can remember in my lifetime was the sixday war, which started with israel invading gaza. And in 47 years, nothing has changed. Theres always been turmoil in the middle east and there always will be. I can be pretty sure that in 47 years time, there will still be turmoil in the middle east and will still be missiles flying across the gaza Israeli Border<\/a>. Its a perennial constant in the world, and thats not going to change. How about russia, and especially the impact of sanctions, and not just on the Food Companies<\/a> in europe but on the greater european economy . Well, i mean, it is rather a sad fact that the assault by the ukrainians on the east, which has led to a significant loss of life, including many, many, many more civilians in gaza, is being widely ignored. And i think that its not so much the sort of somewhat of a rogue regime in ukraine to worry about. Its actually the uncertain of western policy, which seems to be theyve got it in for russia. On the right, people are nostalgic for the cold war. On the left, theyll never forgive russia for betraying communism. So, it seems it is certainly a worry that the western attitude towards russia and the western media actions towards russia. What happens if we see some type of of a russian i dont want to use invasion, but for lack of a better word, invasion or incursion into Eastern Ukraine<\/a> on the grounds of humanitarian causes, which theyre also talking about . The russians arent stupid. And you could say that, actually, its some sort of humanitarian effort that might well be a good thing, because otherwi otherwise, there will be significant further loss of life in Eastern Ukraine<\/a>. Youve already seen for example ukrainian using western aircraft as shields for their bombing raids in Eastern Ukraine<\/a>. And it doesnt suggest that the ukrainians are going to be very sympathetic to the reconquered parts of Eastern Ukraine<\/a>. Economic data coming out of europe . Do you think its going to get better during the last part of this year, or are we going to stay in a stable line . Are we going to come back a bit . Are we going to fall a bit . Im afraid the longstanding view of ours is actually that the eurozone is not going to get better, that people who thought that it was going to pull out of recession middle of last year, we thought they were wildly optimistic. And actually, the european economys flatlining. Now weve seen the economys dipped back into recession, the italian economys been in recession for more than three years, and i dont think thats going to change. I think that actually the eurozone is locked into zero growth or into a shrinking economy. Which means what, more action from the ecb . Well, it probably means the ecbs going to keep Monetary Policy<\/a> in a noose, but its probably not going to make a big difference. The good news is there are good european companies. Some dont depend that much on the eurozone and are prospering in the world. Others realize there will be no growth in the eurozone and are making stringent efforts to improve their cost bases and to shrink their operations. So, it doesnt mean to say that europes a bad place to invest. It just means from an economic point of view, you cant really look towards the eurozone getting any help to the Global Economy<\/a> at all for the foreseeable future. Max, thank you very much for being with us. Max king, Portfolio Manager<\/a> at Investec Wealth<\/a> management. Thank you. You can get in touch with us on email. Europeanclosingbell cnbc. Com or on twitter, louisabojesen. Weve been asking, which bond market, if any, is the bubble ready to burst or is there an asset class that you think looks a little bit lofty . If you head online, you can find a piece on this. Bunds, treasuries, periphery debt, make emerging market debt. Let us know your thoughts. You can find us on twitter with your answers to that. Is there a bond market thats ready to burst . louisabojesen is the twitter handle or on email. Worldwide cnbc. Com. Thats the email address where you can find us on this show. Now, amazon is picking a fight with superheroes and witches, apparently. Reports say that the online retailer has stopped taking preorders for some disney movies, including captain america, the Winter Soldier<\/a> and maleficent in an apparent contract dispute. They say amazon is motivated by profits at the expense of offers in book stores. Amazon has halted orders of some of the publishers books, including jk rowell yegs latest novel. Amazon is asking to write to hachettes ceo to end the standoff. Are you familiar with any of these . No, but disneys one of my favorite stocks in the year, since i went to china in spring and realized disneys opening up in pudong and that will actually celebrate disneys growth around the world. Disneys not just about its latest blockbuster film. Its about making a serious impact in the chinese market, which im quite optimistic about. You have a good point there. And continuous expansion plans in china as well, or looking at potentially expanding further, i saw, as well. Yeah, well, the theme park is in an area which is massively connected to a Huge Population<\/a> in the area and it ought to trigger broader growth in the whole chinese market. Maybe from there on into the whole east asian market. Disneys a very good story indeed, i think. Okay, well, there you have it. But still, nevertheless, some headknocking with amazon. Netflix subscribers have doubled in the uk over last year to 3 million households, thanks to hit shows like breaking bad and house of cards. New data revealing that more than one in ten uk homes have subscribed to the streaming service, outstripping rival amazon. The company has been boosted by the popular practice known as bingeing, where customers watch an entire season of episodes in a matter of days. Have you done that . No, i havent. I havent got netflix, but it was the pick of the year for one of my junior colleagues last year, and i rather regret i didnt follow him into the stock. How much junior . Sometimes it pays off to listen to the younger generation. The rookie. They know whats moving. Yeah, it was a fantastic performer last year and is still a great stock. I havent watched backtoback episodes of anything. I get a bit funny in the head after two or three episodes and then i have to stop. I agree. Moviegoers flocking to the theater this weekend to catch the exploits of four heroes in a half shell, as theyre called. Leonardo, rafael, donatello and michelangelo, remember . The teenage mutant Ninja Turtles<\/a> topping the u. S. Box office with a 65 million debut, well above the 40 million estimate. Its the fifth live action film in the franchise based on the comic book and cartoon from the 1980s. A sequel already in the works for 2016. Does that appeal to you . Who would have thought that the entire world would have been taken by turtles in the 80s . But we are in no position to judge the markets. No, not at all. The bank of japan warning in its monthly report that exports and industrial output may slow down. Makiko has the story live from tokyo. Reporter yes, louisa, the central bank did keep its overall assessment of the economy, suggesting a continuing gradual recovery, but it became more cautious on its outlook on exports and warned that exports have been sluggish due to a slowdown in the u. S. Economy and other asian nations, almost blames increased overseas production by japanese automakers. It also said factory output is expected to rise moderately, but some effects from the consumer tax hike in april will remain weighing on demand. Cars and pcs will likely stay weak. On a brighter note, consumer demand in investment in housing had remained steady, shrugging off the effects from the consumer tax hike. And thats all from the nikkei. Back to you. Thank you very much for that. And speaking of some of the bigger stories in your part of the world, lets take a look at whats on the agenda in asia tomorrow. We have the cpi inflation data from july out of india. The reserve bank and government there hoping for a lower number for more elbow room to go easy on policy rates. We also get the final secondquarter gdp number out of singapore. The governments advance estimate of secondquarter gdp released in july had shown that the city stage gdp contracted from april to june for the first time in seven quarters, hit by a sharp drop in manufacturing activity. And for all of you golf fans out there, sundays been special to rory mcilroy this summer. He won the british open last month and was leading the pga championship going into the final round. Now, rory went back and forth with phil mickelson, rickie fowler, Henrik Stenson<\/a> on 17. He knocked in a 10footer to birdie to go two shots up. Mickelson made a valiant effort on 18, nearly chipping in for eagle from off the green, but it was all about rory, though, fighting darkness. He tapped in for par to finish 16 under to win his fourth major title in the past three years. Mcilroys also the first backtoback major winner since 2008. Still to come here on Worldwide Exchange<\/a>, can a new car bring a zest to the bottom line . The earnings preview is next. Find us on email, twitter louisabojesen. Join the converse on Worldwide Exchange<\/a>. The ca illac summer collection is here. During the cadillac summers best event, lease this 2014 ats for around 299 a month and make this the summer of style. Hi, everybody. Welcome back. Sales of jeans in the u. S. Are down by 6 on the year, according to the latest data. Why . Courtney reagan finds out. Well, backtoschool is really the Holiday Season<\/a> for denim sales, but jean retailers arent expecting a blockbuster season, thanks to the growth of athleisure. Piper jaffrays annual taking stock of teens survey shows over the last two years, teen girls brand favorites have moved away from denimcentric names and toward at leisure names like victorias secret. But the death of denim goes beyond jeans. The sales of jeans are down 6 year over year. While many consumers are dressing down, sporting yogawear beyond the gym, others are dressing up, fatigued of the same old jeans as the goto option, and its showing up in the major denim players results. Bf corpss jean brands includes lee, wrangler, and rockin republic. The Company Sells<\/a> more jeans than any other company in the world but has seen jeanswear revenue fall 3 so far this year, while its sports a wear revenues have groan 4 . They recognized the trend and are working to incorporate stretchtype innovations into its products. It shows nondenim is a driver for the back half of the year and theyre responding with innovative textile innovations for the fall and says retailer response has been strong. Gap inc. Tells me gap is still a dominant category, particularly at its gap and old navy brands. It continues to be committed to continuing innovation in the category. Back to you. Now, something completely different than jeans. Tata motors net profit in the First Quarter<\/a> is expected to drive 17 higher on the year, this as indias largest Car Manufacturers<\/a> set to launch two new passenger vehicles, the bolt and the zest. We have the Equity Research<\/a> analyst from morningstar. Thanks for being with us. How do you rate tata . Hi. So, tata motors, i think the results would be fairly good, if we talk about the revenue, the top line. It is going to show a doubledigit growth, around 17 growth, primarily driven from the Strong Performance<\/a>. The business is going through a struggle partly because of a subdued economy, and also because of the past couple of quarters they have not been able to introduce models in that manner. So, while the business is going to struggle, profits they are expecting are going to show a loss, something close to 10 billion rupees. They are expecting an expansion in margins to about 17 growth in Group Revenues<\/a> in terms of net profit, we are expecting 100 jump in the profit. The profit forecast is actually looking quite good because of the jain highmargin segment. So, while youll see the lowmargin business declining let me just jump in, because im curious about the bolt and the zest, these two new models that theyre launching. I mean, what are the thoughts heading into this launch . Of course. So, this quarter and the couple of quarters, there are quite interesting launches, starting with the bolt and zest. These two cars are going to be launched in the most highvolume segments in india. So, youre talking about 0. 4 million to 0. 9 million rupees, and this is about 65 of the segment in india. Now, tata has been losing market share in india, and it did not have a very strong selling car in these segments. So, i have seen zest. It looks quite improved from the past couple of cars. The zest and bolt basically is actually a line in the strategy of actually taking market share and increasing the volume. And because theyre getting launched in the highest volume segment of the market leader. Marti derives the highest from this segment. It is not only bolt and zest. Bolt and zest are making noise for this quarter, but we should also remember, the gamechanger could be the jaguar xe and x17, which will be launched in the Second Quarter<\/a> and nearby other quarters. So, those cars will fall into that sedan category. And according to us, they could open an entirely new segment for tata in china. Sure. In the north of Price Premium<\/a> category. Thank you very much for being with us. Equity Research Analyst<\/a> from morningstar india. You can find us on email, worldwide cnbc. Com. Thats the email address. Starting a fresh and new week here following from the losses we saw last week on equity markets. Do you think its going to be a green week . Write in, let us know, say good morning. Many of you have. Good morning, everybody. Good morning jeff, nick. So, et cetera. Linda, good morning. On twitter, louisabojesen is where you can find us there. Now, both the israelis and hamas appear to be holding fire just hours into a fresh 72hour ceasefire. There were no immediate reports of breaches. Israel saying negotiators will return to cairo to resume indirect talks if the truce holds. As nbcs bill neely reports, deadly violence just hours before this latest ceasefire shows that there still are no guarantees of a longer lasting peace. [ sirens ] reporter fire and a fury of an unfinished war raged in gaza today, this the aftermath of an israeli air strike. This building was hit just a few minutes ago. First of all came a warning strike, and then about two minutes later, a massive explosion. Amid all the talk of a ceasefire, the air strikes continue. Israel determined to strike hamas right up to the start of an agreed truce. Well continue until we achieve quiet, said Prime Minister<\/a> netanyahu, and we wont negotiate under fire. Israel was hit today. Hamas rockets landing in fields. Two were shot down. Others landed directly on an Israeli Border<\/a> post. Israels retaliation took the life of a 14yearold boy and three others today. The truce finally agreed by israel and hamas came too late for him. The ceasefire will last three days and open the way for talks, but theyve failed once already. Many fear another failure will escalate the war. And the biggest victims of that will be the civilian population here in gaza. More devastation, more killing. Reporter the devastation is immense already. One truce has come and gone, and nothing changed. The new one brings a pause in their suffering but no guarantee of lasting peace. Bill neely, nbc news, gaza. Now from gaza to turkey. The lira posted gains after turkish Prime Minister<\/a> recep erdogan won the countrys first direct president ial election with almost 52 of the vote. Hadleys been speaking to people on the streets of istanbul to get their take on the outcome. Reporter despite a visibly low turnout, turkeys Prime Minister<\/a> emerged victorious, claiming over 50 of the vote as the countrys first popularly elected president. Translator not a Single Person<\/a> who can manage this country. Thats why i voted for him. Other than erdogan, no one can manage this turkey. Reporter but as recep erdogan moves to consolidate his power, investors looking to capitalize on five more years of the economics should take note of the growing dissatisfaction here with the man and his policies. Translator erdogan is, of course, hard to reach because hes not running for the labor and to workers, because he is running extremely narrow policies. Reporter looking strictly at the numbers in sundays polls it might be easy to dismiss erdogans critics, but take a closer look and the picture is somewhat different. Almost 100 years ago, the founder of modernday turkey, ataturk, moved the capital from istanbul to ankara, a seat of a new, modern, secular state, away from the politics and intrigue of istanbul. 100 years later, theres still two turkeys. You have the nationalism of anatolia, versus the multicultural, mult ethnic istanbul. And its that dual identity many in turkey find troubling. Whats more important to you, the economy or the social issues . The social issues. Because first because you know the economy is always, like, it is never stable. So, maybe some doubts may happen, but it is going to be all right if the people fears increase. So, its like, its going to be better in time, but if we go like this, it doesnt matter economys good. They say that economy is good, but i believe that it is not good. Translator there are people im not satisfied with in the government. Look at the economy. People are doubting each other. People are afraid of one another. Life isnt comfortable here. Were eating a small amount of bread, but how were eating. As retirees, we have nothing. Reporter and so, while the majority of voters may have given mr. Erdogan a free pass to the presidency, the chorus of discontent is growing, and investors would do well to take heed. Hi, everybody. Welcome back to the second hour of Worldwide Exchange<\/a>. If youre just joining us, im louisa bojesen. These are your headlines today. U. S. Markets set to open higher they opened higher, rather. Here in the europe and u. S. , similar in step with europe and asia as investors shrug off the middle east and ukraine. Russian stocks joining the rally despite fighting in donetsk as kiev forces vow to recapture the ukrainian city. And iraqs Prime Minister<\/a> stands defiant amid pressure to step down, as u. S. Secretary of state john kerry warns that al maliki shouldnt be stirring up instability. And creating one big happy family. Pipeline operator Kinder Morgan<\/a> is consolidating all of its publicly traded assets into one company in a massive 44 billion deal. Now, if youre just joining us, thanks for tuning in again. A fresh start to the week. We came off of a week last week where we saw quite a bit of red and here are how markets are faring ahead of the u. S. Open here in europe. Weve been green across the screen this morning. We were called higher. Ftse hanging on to gains by 0. 5 or so, xetra dax up more than 1 , cac 40 and ftse mib, similar story there. When looking to see whats taking place in russia, you can see the index and some of the russian stocks there trading higher. The russian market opening significantly higher as investors, they have been cheering the reported drawdown of troops from the border, despite increasing unrest around donetsk. The nations largest banks also in the green, vtb and sberbank, helped along by beliefs northwethey will remain in the index. The forex, the euro dollar crossed 1. 3388, the yen easing a bit against the dollar. Safe haven demand subsiding a bit after we had this news on friday that russia was ending military drills near the border of ukraine. And on top of that, also this new 72hour ceasefire taking place in gaza. So, safe haven demand just falling back a little bit. The aussie dollar, as i was saying, hitting a twomonth low on friday. You will recall that we saw the sharp jump in the jobless data at the end of last week in australia and you also had the downgrade to Central Banks<\/a> forecast for Economic Growth<\/a>. A lot of people now questioning the japanese growth, which is due out this week, the japanese gdp data, and also what kind of growth the u. S. Economy is going to show between july to september. Thirdquarter growth for the u. S. But really, this week its all about the japanese gdp data. A lot of people wondering whether or not were going to see the japanese economy bouncing back during the Third Quarter<\/a>. It took a hit in the Second Quarter<\/a> after the consumption tax increase that we heard about in april. So, u. S. Futures indicating just a little bit of a tad upwards move on the u. S. Markets, once the u. S. Markets come under tap in some 4 1 2 hours or so. Lets talk more about what we can anticipate this week. Brian reynolds is a chief Market Strategist<\/a> from rosenblatt securities, and he joins us. Brian, good to see you. We closed out the week last week with a lot of volatility. We saw, though, the u. S. Rallying on friday, quite substantially. The dow and the s p both seeing their best day in approximately five months time or so. How are you reading the markets . Well, were in a bull market and weve just had a small pullback in that bull market. Weve seen that time and time again over the last five years. There was a lot of bad news in ju july, from, you know, the plane being shot down over the ukraine to tensions in gaza, and then finally, the big break was the u. S. Getting involved again in iraq, and that set the futures plunging down thursday back down to some support levels, and we bounced up from them, and that tells us that this pullback is likely nearing an end. Likely nearing an end, youre saying . Well, it looks like these pullbacks tend to be brief. They tend to be less than a month or so, and its been ongoing now for about three weeks, and that tells us within a month or so, stocks are likely to be back at the highs and probably pushing through them. Last month, more than two dozen major Pension Funds<\/a> voted to put more money into the credit market. That money hasnt even hit the credit market yet. Thats likely going to happen in september, and thats going to lead to more buybacks and more merger and acquisition activity thats designed to lift stock prices. So, it looks like this panicky drop in the stock market is coming to a conclusion. Where do you think that were going to be taking our next indications from . I mean, are we going to go back to focusing more on fed talk . Are we going to be focusing more on the Economic Data<\/a> . Are we going to be looking at corporate earnings as we head into thirdquarter reporting season . I mean, where are we going to be taking our cues . Well, i think after all the focus on all the geopolitical tension that was occurring in july, i think people are going to start to refocus on the u. S. And whether the economy is worsening or whether its strengthening. The tenyear treasury got down to about the 2. 40 level or a little below right after the iraqi air strikes were authorized. That 2. 40 level is very, very significant emotionally, because its been a key support in resistance level going back to four years. Now were back above it, and i think if we can hold above that, which seems likely now, that Equity Investors<\/a> will get less scared and start to put more money to work, and thats probably going to help us get back to the highs relatively soon. Hang on just for a minute, brian, because i just want to mention whats been taking place with regards to some of the fed speak and what we can anticipate today. The pace of u. S. Recovery is disappointing, according to Federal Reserve<\/a> vice chair Stanley Fischer<\/a>. In prepared remarks for a conference in sweden, he says that slowing Labor Productivity<\/a> and housing headwinds are undercutting growth. The feds number two also suggested that longterm annual growth could be as low as 2 below the Central Banks<\/a> previous forecast. If thats the case, brian, this doesnt bode very well for europe, then. I mean, if china and the u. S. Stop spending or are dealing with Slower Growth<\/a> in each of their areas, europe is really going to be in a tough spot then. The fundamentals arent great, and they havent been great for five years. Most of the rises in stock prices have come about because of Financial Engineering<\/a> because weve seen such strong flows into the credit market. I think those flows are going to accelerate in the last third of the year. But what the slow growth means is that when the fed finally stops tapering, probably in october, it will probably be a while before they lift Interest Rate<\/a>s and they will probably rise at a slower pace than weve seen in other expansions, because the economy has a lot of headwinds still left over from the last financial crisis. Okay. Brian, are you a golf fan by chance . Yes, i am. Oh, you are . Okay. Let me just update then viewers, in case theyre just joining now, what happened over the weekend, because yesterday was very special to rory mcilroy. This summer, he won the british open last month. He was leading the pga championship going into the final round. Rory went back and forth with phil mickelson, rickie fowler, Henrik Stenson<\/a>. On 17 he knocked in a 10footer for birdie to go for two shots up. Mickelson made a valiant effort on 18, almost chipping in for eagle off the green. It was all about rory, though, fighting darkness. He tapped in for par to finish 16 under to win his fourth major title in the past three years. Mcilroy is also the first backtoback major winner since 08. Were you watching, brian . I was, and the story of rory mcilroy is kind of like the stock market. Its been going along great guns for a while, and then all of a sudden, it fell back. And that happened for about maybe three weeks or so, and now its starting to get its legs back. And once we get into september, i think that momentum will start to build from debtfueled m a and debtfueled buybacks, and i think that will help lift share prices up the way that rory mcilroy came back to win yesterday. Are there sectors that look undervalued to you . No. The stock market, i think in terms of relative valuations weve had these nasty rotations within the stock market, and so, weve rotated through utilities this year, and they were leading the pack for a while and now theyve fallen back. I think the first leg upcoming out of this little correction that weve had probably gets led by the safer names. And then once weve gotten to new highs, then you start to see the high beta names start to come into play. Brian, its been lovely seeing you. Thank you for getting up early. What time is it in boston now, 5 00, 6 00 . Its only 5 00. Its 5 00. Well, listen, early bird gets the worm, right, as they say. So, hopefully you got it. Hopefully, youll have a good day ahead of you, brian. Thank you. Brian reynolds, chief Market Strategist<\/a> from rosenblatt security. Thank you. You, too. Yes, always. Happy to be alive. Kinder morgan is consolidating its oil and gas pipeline empire under one roof, buying outstanding shares of its family of companies, Kinder Morgan<\/a> energy partners, Kinder Morgan<\/a> management and El Paso Pipeline Partners<\/a> for 44 billion at premiums between 12 and 16 to fridays closing price. Now, its the largest deal in the sector since exxon bought mobil for 74 million in 1999. Kinder morgan controlling about 80,000 miles of pipeline in north america. 80,000. Thats a lot. The company is in german trade today. Youve got Kinder Morgan<\/a> off a bit and el paso jumping by a tad on the back of this news. Blackstone is reportedly close to a deal to buy a 50 stake in shells shale gas field in louisiana for 1. 2 billion. Shell entering the region known as haynesville in 2007 through a joint venture with encana. Blackstone already has a presence in louisiana, investing 2 billion in chenery energy to build a liquefied natural gas plant. In trade, both companies slightly off. U. S. Markets we were just talking about, look set to open slightly to the upside. On the agenda in the states, no Economic Data<\/a> out today. Look out, though, for reports this week on retail sales, import prices, ppi data, Consumer Sentiment<\/a> data, and just a couple of companies that report results today. Take note of priceline, which well be talking about a bit later on. Sysco, Caesars Entertainment<\/a> and rackspace all reporting. Head to our website for the online poll. Were asking which bond market, if any, is a bubble ready to burst . Bunds, treasuries, peripheral european debt . If you have other assets you think should be on bubble watch and you want to join the conversation here on Worldwide Exchange<\/a>, well, get in touch with us. By email, were on worldwide cnbc. Com. You can also find us directly on twitter, cnbcwex or directly to me louisabojesen. Its always nice to hear from you at the start of a fresh week. Lets take a look at some of the other top stories that were following today. The kurds plea for american weapons is being heard as senior u. S. Officials say that the Obama Administration<\/a> has started to directly arm the groups in iraq. Thats according to the Associated Press<\/a>. This comes as a fourth round of air strikes was carried out by the u. S. On sunday to aid Kurdish Forces<\/a> battling islamic militants, groups in northern and western iraq. Washington continues to drop food and Water Supplies<\/a> to minority yazidis in the sinjar mountains. Meanwhile, iraqs Prime Minister<\/a>, nuri al maliki, has warned that the countrys security situation could get worse. Thats after the president failed to nominate him for another term as Prime Minister<\/a>. In a surprise speech on tv, he accused the newly elected president , fuad masum, of putting his Political Goals<\/a> ahead of the interests of the people. Translator security situation will get worse and this will have bad consequences and will damage the interests of the iraqi people. I will filelegal complaint through the federal court against the president of the republic, committing a clear constitutional violation for the sake of Political Goals<\/a>. Now, coming up, the turkish lira has been gaining after Prime Minister<\/a> erdogan won the president ial election in turkey, but fitch has issued a fresh warning, saying Political Risk<\/a>s remain. Find out more. Well be crossing out to hadley in istanbul straight after the break. Good morning, everybody. Youre watching Worldwide Exchange<\/a> here on cnbc. What if there was a credit card where the reward was that new car smell and the freedom of the open road . A card that gave you that im 16 and just got my first car feeling. Presenting the buypower card from capital one. Redeem earnings toward part or even all of a new chevrolet, buick, gmc or cadillac with no limits. So every time you use it, youre not just shopping for goods. Youre shopping for something great. Learn more at buypowercard. Com im spending too much time hiring and not enough time in my kitchen. [ female announcer ] need to hire fast . Go to ziprecruiter. Com and post your job to over 30 of the webs leading job boards with a single click; then simply select the best candidates from one easy to review list. You put up one post and the next day you have all these candidates. Makes my job a lot easier. [ female announcer ] over 100,000 businesses have already used zip recruiter and now you can use zip recruiter for free at a special site for tv viewers; go to ziprecruiter. Com offer2. Hi, everyone. Welcome back. Im louisa bojesen. These are your headlines. U. S. Futures pointing to a higher open as Global Markets<\/a> shrug off geoPolitical Risk<\/a>s. Kinder morgan inks a 44 billion deal to consolidate all of its public assets into one giant company. And iraqs Prime Minister<\/a> refuses to back down as u. S. Defense secretary john kerry warns al maliki not to stir up the waters. Now, despite recep erdogans decisive victory in the turkish president ial elections, Political Risk<\/a> is likely to remain high in the country. This according to Ratings Agency<\/a> fitch, which adds that potential instability will weigh on turkeys credit rating. Speaking to thousands of cheering supporters in ankara, erdogan struck a conciliatory tone in his speech with a message of unity. Translator today, national will won once again. Today, democracy won once again. Those who didnt vote for me won as much as those who did. Those who dont like me won as much as those who do. Now, hadley is in istanbul and has been covering this story for us and continues to do so. Hadley, erdogan being Prime Minister<\/a> for 11 years. Now hes the president. Is anything going to change . Is it going to mean that were looking at more stability anywhere . Fitch doesnt seem to think so. Reporter well, its interesting depending on who you speak to, louisa. In the short term, many investors had sort of priced this in. They thought, you know, five more years of erdogan as president means five more years of stability, but there are risks, as you mentioned. And in the short term, the next 6 to 12 months, youre going to see political instability, actually in the country. Your Big Questions<\/a> remain, one of which is will the countrys economy minister, ali babajan, continue to stay in power . And the reason thats important is because he is the man behind the phenomenal Economic Growth<\/a> policies that weve seen mr. Erdogan initiate over the last ten years. So, its important whether or not he stays or he goes. There are also regional Political Risk<\/a>s. GeoPolitical Risk<\/a>s. One of which very important and very interesting to the u. S. Audience. We obviously see Prime Minister<\/a> maliki standing stubborn in baghdad. Hes basically said hes not going to allow any outside powers to dictate what happens in baghdad, at least politically. But whats important for the turks is the threat of isis, the threat of the Islamic State<\/a> along the borders, frankly, and how thats going to play in terms of their relationship with the Kurdish Regional<\/a> government. Weve seen many energy deals as a result of a bond thats kind of happening between the kurds and the turks. And thats put their relationship with baghdad at risk several times, and its been worth it to them because of what it would bring them in the long term in terms of the energy equation, but its also very interesting. There is a threat from these islamic terrorists, not just along the border with turkey. Theyre still dealing with over a million syrian refugees. There is the thought of many here in turkey that mr. Erdogan brought this problem on himself by funding rebel elements within syria. So, youve got a situation where there are internal Political Risk<\/a>s and external geoPolitical Risk<\/a>s as well. Hadley, some are saying on the outside that it feels like turkey is much more polarized now. Its a much more polarized nation with regards to support for erdogan, despite the fact that he ran off with this almost 52 win. Is there a sense of that . Reporter oh, absolutely. You do have to look at it. Yes, he got over 50 of the vote, but it was a low 50 . It was about 52 , 53 , and it wasnt a 70 takeaway win for the Prime Minister<\/a>, now the president elect. And most of the voters we spoke to here in istanbul expressed strong reservations about mr. Erdogan in terms of his social policies. They were talking about social media. They were talking about the risks of a more closed society. And you have to remember also that there really are this is a country with dual identities. There are really two turkeys. There is the conservative, religious National Element<\/a> across anatolia and then you also have the mult ethnic, multicultural istanbul, this modern, bustling economic hub. So, there really are two turkeys. Its very much reflected in what we saw in yesterdays results. Hadley, thank you very much for that. Hadley gamble joining us live there from istanbul. Still to come here on Worldwide Exchange<\/a>, Ukrainian Forces<\/a> stepping up their assault of the rebelheld city of donetsk. Well be talking about the situation in the country and the russian threat to intervene next. Were some two hours, 2 hours and 20 minutes into trade in europe. Almost all green screen. See you in a second. Hi, everybody. Welcome back. Youre still watching Worldwide Exchange<\/a> here on cnbc. Im louisa bojesen. Its monday morning, straight off the back of a week last week that was very red for europe. But on friday, something happened. We saw a turnaround in our u. S. Equity markets. And in fact, both the dow and the s p saw their best day, their best performance on friday. What weve seen in some five months or so. We had a very Strong Performance<\/a>. Now were being called higher just by a couple points across the board for our u. S. Markets. European markets this morning also hanging on to some gains as indicated here, higher in the region of 0. 5 to 1. 5 or so for the xetra dax. So, by and large, a bit of buying taking place again this morning, as it seems, at least for the time being, that geopolitical tensions are easing just a little bit. Thats what some are saying after weve had this new 72hour ceasefire struck in gaza and were also looking at russia ending military drills near the border of ukraine. However, still a lot of fighting taking place in other parts of Eastern Ukraine<\/a>. But speaking of russia, the russian market opening significantly higher as investors cheer a reported drawdown of troops from the border, as mentioned, despite the increasing unrest seen about donetsk. Meanwhile, the Ukrainian Government<\/a> troops have continued their offensive on donetsk after a proposal for a ceasefire from a prorussian rebel leader yielded no result. The fighting is concentrated on a road and rail junction, which kiev claims is used by separatists to obtain arms from russia. Petro poroshenko says hes ready to consider an aid mission to the east of the country but only by an unarmed and International Task<\/a> force. Now, meanwhile, u. S. Oil major exxonmobil started drilling in the Russian Arctic<\/a> on saturday, despite sanctions on its russian partner. President putin praised the head of exxon russia for create a model of international cooperation. Andrew wood is a former uk ambassador to russia, and hes with us here in the studio. Andrew, welcome. First of all, do you think any progress has been made with regards to the tensions between russia and ukraine . Well, its very difficult to say for now exactly what these maneuvers mean on the part of the russians. Theyve done it before. If it means that putin has begun to answer the basic dilemma, that is, am i going to try and grab the lot or am i going to back off in a sensible way, which would be to back off, then yes, its a very good sign. Do you think there is still a risk of a russian invasion . I mean, do you think theyre still considering that . Yes. I think they see that its in their interests to maintain the pressure on the west in general and ukraine in particular, obviously, by making pains. That is not the same thing as actually deciding to go in. It doesnt really have a plausible excuse to go in, but he obviously does not want his people in Eastern Ukraine<\/a> to be forced to surrender. Yeah. You have hundreds of casualties as well in the region, and theyre now talking about some type of a humanitarian aid mission as well. And the russians have indicated that they might be interested in doing Something Like<\/a> that, too, that it wouldnt necessarily be an international group. If the russians went ahead with that, what do you think the response would be . I think the response would be total mistrust and people would assume that the humanitarian mission would be rather similar to the humanitarian mission, the exercise against georgia. So, i think that would be totally incredible. Does putin have other options at this stage . Yes. He has plenty of options. He can count the cost of what hes already done and reckon its simply not worth it. His problem is that he has raised such a storm in his own country with lies that its quite difficult to escape the consequences of that. So, how he hangs on to credibility at home and manufacturers a sensible policy abroad is a difficult task. But if hes being sensible, that is what he must do. Andrew, thank you very much for being with us. Andrew wood, former ambassador to russia. Still to come here on the program, Kinder Morgan<\/a> scrapping its partnership structure, bringing the company together under one roof. More on the massive 44 billion deal next. Well leave you with a look at the futures stateside and how theyre trading heading into the open on wall street in a few hours. Hi, there, everybody. Welcome back to Worldwide Exchange<\/a>. Im louisa bojesen. Here are your headlines today. U. S. Markets set to open higher in step with europe and asia as investors shrug off geoPolitical Risk<\/a>s from the middle east and ukraine. Russian stocks joining that rally, despite intense fighting in donetsk as kiev forces vow to recapture the ukrainian city. And creating one big, happy family. Pipeline operator Kinder Morgan<\/a> is consolidating all of its publicly traded assets into one company in a massive 44 billion deal. And iraqs Prime Minister<\/a> al maliki is standing defiant amid pressure to step down as u. S. Secretary of state john kerry is warning maliki not to stir up instability. Hi, everybody welcome back. Yes, you are watching Worldwide Exchange<\/a>. A fresh start to the week coming off of a week last week where we saw drops on our european markets, we saw a lot of negativity out there. On friday, the u. S. Markets took a turn and we saw a lot of positivity with the s p and the dow both posting their best sessions seen in approximately five months time or so. Weve seen gains overnight from our asian markets. Our european markets this morning opening in positive and u. S. Futures indeed. Right here next to me, they were pointing to a positive indication or positive start to the open as well. Stateside in, what, four hours or so. The ftse cnbc global 300 is higher by 0. 3 at the moment, taking a little bit of a step up this morning. Weve had a scaling back of geoPolitical Risk<\/a>, at least if you go with the headline stories out there that russia was ending their military drills near the border in the uk. We had that news through on friday. And that seemingly is really leading the way. Eweve also had this new 72hour ceasefire struck in gaza. Thats the deal thats been negotiated by the egyptians. Theyre still there, the geoPolitical Risk<\/a>s, but nevertheless, were coming in to trade this morning slightly higher. How do you make money in these markets . How do you position yourselves . This is what some of the experts have been telling us this morning. Its the inflation of bonds across the emerging market spectrum where were finding value. Equities historically have given you a return of inflation plus 4 . Thats the longterm risk premium. Youre picking that up on emerging market inflation in bonds right now. Volatility has risen over the past month because of geopoliticals. Now, i think that geopolitical rise of volatilitys never lasting. Either you are getting used to the problem or the problem thus abate, but it is never lasting. Let me say that i think volatility is going to rise because we are likely to see a better u. S. Economy, and a better u. S. Economy is going to increase Global Funding<\/a> costs. Markets are still in positive territory in terms of expectations. Expecting mr. Draghi to make a move and its expecting what weve seen on the sort of loosening of credit standards and on sort of the pmi side. Its expecting that to move into higher earnings, and therefore, at some stage, the equity markets stage a recovery that were waiting for. Now, in big deal news, u. S. Oil pipeline giant Kinder Morgan<\/a> is consolidating its vast empire in the largest deal in the Energy Sector<\/a> since exxon bought mobil for 74 billion back in 1999. Seema modys at the headquarters of cnbc with the details on this. We forget how big a deal it really is, seema. Louisa, it is definitely a mega deal. Kinder morgan, which operates 80,000 miles of oil and Gas Pipelines<\/a> and 180 storage terminals in north america through three separately traded units, now the company will spend 44 billion to buy out the outside investors in both units. Kinder Morgan Energy<\/a> partners, kindor Morgan Management<\/a> and el paso pipeline. The founder says they will expand the reach of the projects they can do. The shareholders of the three units will get a premium of between 12 and 16 of fridays closing price. Kinder says the newly combined entity will offer a 2 annual dividend. Thats expected to increase 10 a year through 2020. The deal will unravel the financial structure that Kinder Morgan<\/a> helped make popular in the 1990s Master Limited<\/a> partnership, mlp. These give special tax breaks to companies that generate most of their revenue from natural resources, typically pipeline operators, which charge fees to move oil and gas. Now, mlps dont pay corporate taxes to the u. S. Government and distribute cash to shareholders through dividendlike payments. Now, in kinders case, investors had been concerned its mlps were too big to achieve substantial revenue growth. Now, Kinder Morgan<\/a> was created in 1997, a year after Richard Kinder<\/a> left enron. In 2006, the company was taken private in what was then the largest managementled buyout. Five years later, it went public again in a large ipo. And later that year, it expanded by buying rival el paso corp for 21. 1 million, making Kinder Morgan<\/a> the largest natural gas pipeline operator in the u. S. Checking shares of Kinder Morgan<\/a>, down right now, but el paso sharply higher, around 11 . Louisa . Seema, good seeing you. Thank you very much for that. Seema mody there at headquarters stateside. I just want to bring you some flashes were just getting through on wires with regards to the ebola cases in africa. If we could just go back. Somebody just moved my prompter. There we go. Nigerias lagos has ten confirmed additional ebola cases now up from seven. Thats according to the health ministry. Lets move on and lets talk about iraq, because the u. S. Secretary of state, john kerry, has called on iraqs government to form a government, saying that he hoped Prime Minister<\/a> al maliki would not stir the waters of political instability, this after maliki made a surprise televised speech where he accused the new president , fuad masum, of putting Political Goals<\/a> ahead of the interests of the people. Translator the security situation will get worse and this will have bad consequences and damage the interests of the iraqi people. I will file a legal complaint through the federal court against the president of the rubblish committing a clear constitutional violation for the sake of Political Goals<\/a>. Now, meanwhile, the Associated Press<\/a> has cited a senior u. S. Official, saying that the Obama Administration<\/a> has started directly arming Kurdish Forces<\/a> in iraq. Now, in turkey, despite recep erdogans decisive victory in the turkish president ial elections, Political Risk<\/a> is likely to remain high in the country, this according to Ratings Agency<\/a> fitch, which adds potential instability will weigh on turkeys credit rating. Hadley has been following reaction to the election on the ground in istanbul. Reporter despite a visibly low turnout, turkeys Prime Minister<\/a> emerged victorious, claiming over 50 of the vote as the countrys first popularly elected president. Translator not a Single Person<\/a> is electable who can manage this country. Thats why i voted for him. Other than erdogan, no one can manage this turkey. Reporter but as recep erdogan moves to consolidate his power, investors looking to capitalize on five more years of economics should take note of the growing dissatisfaction here with the man and his policies. Translator erdogan is of course hard to reach because he is not working for support of labor and to workers, because he is running extremely narrow policy. Reporter looking strictly at the numbers in sundays polls, it might be easy to dismiss mr. Erdogans critics, but take a closer look and the picture is somewhat different. Almost 100 years ago, the founder of modernday turkey, ataturk, moved the capital from istanbul to ankara. It was the seat of a new, modern, secular state, away from the politics and intrigue of istanbul. 100 years later, there are still two turkeys. You have the conservative nationalism of anatolia versus the multicultural, multiethnic istanbul. And its that dual identity many find troubling. Whats morn more important, the economy or the social issues . Social issues, because first because, you know the economy is always, like, it is never stable. So, maybe some downs may happen, but its going to be all right if the people feels happy and free. So, its like, its going to be better in time, but if we go like this, it doesnt matter if economys good. They say that the economy is good, but i believe that it is not good. Translator there are people im not satisfied with in the government. Look at the economy. People are doubting each other. People are afraid of one another. Life is uncomfortable here. Were eating a small amount of bread, but how are we eating . As retirees, we have nothing. Reporter and so, while the majority of voters may have given mr. Erdogan a free pass to the presidency, the chorus of discontent is growing and investors would do well to take heed. All right in deal news, whats going to be on the menu for priceline after buying restaurant bookings company open table . We will give you an earnings preview and what to watch out for with priceline, coming up next here on Worldwide Exchange<\/a>. Good morning, everybody. What if there was a credit card where the reward was that new car smell and the freedom of the open road . A card that gave you that im 16 and just got my first car feeling. Presenting the buypower card from capital one. Redeem earnings toward part or even all of a new chevrolet, buick, gmc or cadillac with no limits. So every time you use it, youre not just shopping for goods. Youre shopping for something great. Learn more at buypowercard. Com hi, everybody. Welcome back. Im louisa bojesen. These are your headlines today. U. S. Futures pointing to a higher open as Global Markets<\/a> shrug off geoPolitical Risk<\/a>s. Kinder morgan inking a 44 billion deal to consolidate all of its public assets into one giant company. And iraqs Prime Minister<\/a>, al maliki, refuses to back down as u. S. Secretary of state john kerry warns al maliki not to stir up the waters. Now, priceline is set to report a jump of 28 in revenue on the year for the Second Quarter<\/a>. Thats all coming up today before the opening bell. This would be the first set of results for the top Global Online<\/a> Hotel Reservation<\/a> Service Group<\/a> since it bought the restaurant bookings Company Called<\/a> open table for 2. 6 billion. Joining us on the phone now from boca raton, florida, is daniel kernas, Senior Analyst<\/a> with benchmark company. Thank you for joining us. What are you anticipating for pricelines q2 . Well, good morning. For established Companies Like<\/a> priceline, the talking points dont tend to change too much quarter to quarter, but this time around, as you mentioned, we have the acquisition of open table and the recent investment in ctrip to dig into Hotel Supply Growth<\/a> and the typically modest Forward Guidance<\/a> that is conservative quarter after quarter. Room night growth was 32 last quarter, down from 36. 5 the quarter before. And q2 is their toughest comparison of the year, but still, booking. Com is making headway domestically. Theyre growing very strongly in asia and internationally and its still early days for global ota penetration in general. So, probably some upside to the quarter and modest guidance going forward. Theyre looking very closely at china. I mean, theyve agreed to invest the 500 million, as mentioned, in ctrip, as you say. China accounting for one in ten tourists globally. Its the worlds most populous nation. Whats this going to do to a company like priceline . Yeah, so, the ctrip investments very interesting. Its a very savvy investment in their part in chinas leading domestic ota. From pricelines perspective, it allows them to further penetrate one of the worlds Fastest Growing<\/a> markets while finally gaining an ownership stake like expedia has. And for ctrip, it makes sense as the chinese outbound market has been focused on both expedia and orbitz as an area of immediate and rapidly growing opportunity and pricelines bring them more size, scale and selection on that front. What do you think the strategy is now, because the open table strategy as well, i mean, thats 2. 6 billion. Do they have the money to spend in these areas . And also, instead of focusing on one area, theyre looking at restaurants, theyre looking at not just at the Restaurant Business<\/a> but at the general bookings business as well. Well, they certainly have the money. And in terms of open table, we think the acquisitions very interesting. And while they did pay a lot for it, it does make a lot of sense. If you think about it, you know, they enter a solid strategic adjacent vertical with the diner market. Priceline has a long history of success taking standalone brands to the next level, particularly on an international basis, which is where open table was struggling. And it will be really interesting to see as well if they ever decide to fully integrate reservations and their bookings platforms, implying priceline would be managing your trip from top to bottom. Daniel, thank you very much for being with us. Daniel kurnos, Senior Analyst<\/a> from benchmark company. Silicon valley Venture Capital<\/a>ist firm Andreessen Horowitz<\/a> has confirmed its invested 50 million in buzzfeed, the news website known for its list design to go viral on social media. Chris dixon from the vc firm joins the board as part of the investment which represents more than all of the companys previous funding rounds combined. In a blog post, dixon compared buzzfeed to tesla and uber and said that the company would be transformed, emerging from this period as a serious, preeminent media company. And amazon is picking a fight with superheroes and witches. Reports say that the online retailer has stopped taking preorders for some disney movies, including captain america the Winter Soldier<\/a> and maleficent. In an apparent contract dispute. Hachette says that amazon is motivated by offers and book stores. Amazons halted orders of some of the publishers books, including j. K. Rowlings latest novel in a dispute over ebook pricing. Amazon is asking customers to write directly to hachettes ceo to demand an end to the standoff. I still havent read any of the harry potter books. I should, probably, shouldnt i . Amazon over the past 12 months higher by 12 and german trade currently on the session just 0. 1 higher. And netflix subscribers have doubled in the uk over last year to 3 million households, thanks to hit shows like breaking bad and house of cards. New data reveals that more than one in ten uk homes subscribe to the streaming service, outstripping rival amazon. The company has been boosted by the popular practice known as bingeing, where customers watch an entire season of episodes in a matter of days. I was talking to my guest a bit earlier, and neither he nor i have done the trip where you watch all of the episodes at once. We get a little silly in the head when doing that. So, maybe its just us. Microsoft is deciding to stay in the market for ultra lowend phones. The company is introducing the nokia 130 today. Get this, at 19 euros or 25 per phone. It doesnt have an internet connection, but it can play Digital Music<\/a> and movies as well as tune in to fm radio. The phone, which will be available in the Third Quarter<\/a> of this year, is aimed largely at emerging markets like china, indonesia, nigeria and vietnam. And moviegoers flocking to the theater this weekend to catch the exploits of four heroes in a half shell, leonardo, raphael, donatello, michelangelo. Dont tell me youre not getting nostalgic by hearing these names. The teenage mutant Ninja Turtles<\/a> topping the u. S. Box office with a 65 million debut, well above the 40 million estimate. Its the fifth live action film in the franchise based on the comic book and the cartoon from the 1980s. A sequel is already in the works for 2016. Hua sorry, caught me by surprise. I didnt know he was coming up from behind. Coming up, earnings, retail sales, inflation, inflation data even. The fed speak and geopolitical news. Well be looking at what could rock stocks in the coming days. Thats all next. Xkc hi, everybody. Welcome back. Youre still watching Worldwide Exchange<\/a> here on cnbc. Im louisa bojesen. Our european markets this morning were called in slightly higher territory and were holding on to that picture here so far. Were three hours into the trade or so. The ftse, the dax and ftse mib all a little higher. We saw a real value on friday in the u. S. , the best day for the dow and s p seen in some five months. Asia closing higher overnight as well after the biggest weekly fall, though, in five months last week. So, you have to put into perspective that we saw pretty big drops. We have seen pretty big drops on our markets last week in general. Russian stocks and whats taking place there. The russian market opening higher. Investors cheering reports of a drawdown of troops from the border, despite increasing unrest around donetsk. The pace of the u. S. Recovery is disappointing. Thats according to Federal Reserve<\/a> vice chair Stanley Fischer<\/a>. In prepared remarks for a conference in sweden today, he says that slowing Labor Productivity<\/a> and housing headwinds are undercutting growth. The feds number two also suggested that longterm annual growth could be as low as 2 , below the Central Banks<\/a> previous forecasts. Thats the talk coming up at 3 00 eastern time. So, yes, well have more after that. Lets take a look at whats on todays agenda stateside. No Economic Data<\/a> today, but look out for reports this week on retail sales, import prices, ppi, Consumer Sentiment<\/a> data. Thats all out. A couple of the companies that report results today that are worth noting are priceline, sysco, Caesars Entertainment<\/a> and rackspace. U. S. Futures, though, indicating that were looking at a slight jump on the open for the u. S. Markets, once we open in some 3 1 2 hours or so. So, just beware of that and well float those for you so you can take a look. There we go. There are the futures. So, were just a little bit higher there. Todd horowitz is an author and founder of averagejoeoptions. Com. He is with us now. Todd, good to see you. What are you looking for this week . Good morning. Well, you know, this week is an options expiration week, so that could create a little bit of a move to the upside, but i think after fridays dead kiev bounce, what i would consider the overnight flush on thursday into the friday rally, which is continuing this morning, i think you want to look at 1,940 to 1,960 on the s p as a potential top here in the market and for a spot to see some selling. We saw some very heavy buying off of i think Short Covering<\/a> and a Short Covering<\/a> rally on friday, but i think the key this week will be the closing, the ending of the earnings season week, plus an options expiration week, and really youve got to watch Treasury Bonds<\/a> as they continue to be really strong pushing down Interest Rate<\/a>s even lower. Yeah, how much lower do you think they can go . You know, i thought they were low enough as it was, so its hard to say, but certainly right now theres a lot of interest, and i believe the chinese are buying a lot of u. S. Bonds as well and buying a lot more debt. I mean, certainly, we could go down to 2. 2 in the 10year. Last year, dont forget we were at 1. 75 , so certainly theres a reason and theres a chart that says they can go a lot lower. Todd, thank you very much for being with us live out of chicago. Very early there still. Get your morning coffee. Thank you. Thank you so much. Well speak soon again. Todd horowitz, author and founder, averagejoeoptions. Com. Thats it for todays show. Im louisa bojesen. Thank you for watching Worldwide Exchange<\/a>. See you soon. Bye. We started zya with the thought that the kid on the back of the bus might have a song that he has in his head but he just cant get out. With the technology of cloud, we change all that. I can sing something into my device, up to the cloud it goes, back down it comes, sounding better. We break down the walls of creation and we give music creation for the masses. Unlock the creativity in anyone. With the ibm cloud. The ibm cloud is the cloud for business. Good morning and welcome back to squawk box. Making overnight news, Russian Forces<\/a> driving back militant group isis, regaining control of two strategic towns with the aid of u. S. Air strikes, while iraqs Prime Minister<\/a> accuses the newly elected president of violating the constitution. Right now, european markets are gaining ground on easing tensions between ukraine and russia. And rory mcilroy wins the 2014 pga championship in the dark. A classic ending as rory captures his fourth major and second of the year and Third Straight<\/a> start. Its monday, august 11th, 2014, and squawk box begins right now. Good morning and welcome to squawk box here on cnbc. Welcome back, joe. Im Michelle Carusocabrera<\/a> along with joe kernen, whos back from vaca. Scott walker is here as well. Becky and andrew are off today. U. S. Investors are waking up to green arrows to start the week, Global Markets<\/a> getting a boost as the crisis in ukraine is easing. In asiana, the nikkei bouncing back up 2 from the 3 drop on friday. In early european trading, markets higher across the board. As you can see, we put moscow on the top, higher by 1. 8 , but france, the ftse, the mib in italy and germany higher almost 1 or more than 1 . U. S. Equity futures are falling along with that, suggesting that the dow would open higher by about 29 points. The nasdaq by 7, the s p by 3 1 2. While the situation in ukraine seems to be calming down, we are following a very differentto","publisher":{"@type":"Organization","name":"archive.org","logo":{"@type":"ImageObject","width":"800","height":"600","url":"\/\/ia804503.us.archive.org\/29\/items\/CNBC_20140811_080000_Worldwide_Exchange\/CNBC_20140811_080000_Worldwide_Exchange.thumbs\/CNBC_20140811_080000_Worldwide_Exchange_000001.jpg"}},"autauthor":{"@type":"Organization"},"author":{"sameAs":"archive.org","name":"archive.org"}}],"coverageEndTime":"20240619T12:35:10+00:00"}