Below expectations due to bad weather and cautious spending. Another poll suggests scotland is leaning towards voting for independence. Announcer youre watching Worldwide Exchange, bringing you Business News from around the globe. Good morning, everyone. Youre watching Worldwide Exchange and its tuesday. Happy apple launch day. Tech tuesday producers are very happy about the alliteration] in that cycle. It will be exciting to see what they actually launch. Absolutely. And it should be real interesting to see what the stock will do. Usually with regard to apple announcements, we see buy the rumor, sell the fact. Apple shares have been selling off, at least the last couple of days, especially last week. Well see. Maybe it is sell the rumor, buy the facts. Indeed. The wait is nearly over. Apple is holding an event at 1 00 p. M. Eastern in its hometown of coopertino, california 37 thats the same site where steve jobs introduced the original mac computer 30 years ago. Apple is expected to unveil the iphone 6 with the largest green and likely a smart watch. That will be the first category ceo tim cook says apples wearables could dominate the market through 2015. And apple shares have outp e outpaced the market in anticipation of todays event. Historically, apple tends to lag after a product release, but over time, the stock performs with the biggest gains coming six to st months later, well come to that tick chart in a men because i have a few disagreements with it. But first of all, were joined by cyrus. The most important thing for me here is will these product releases allow apple to maintain its Price Premium and therefore protect its margin . Yeah. I think todays Product Launch is probably the biggest launch since the ipad. I think we dont to attest to the secrecy that apple normally gives to these events, we dont know if its an i watch. It could be a wearable computer, something on your wrist to do with fitness or health and it could have a watch on it and have something to do with your iphone. A lot of people have said theyve definitely lost their lust ner terms of their ability to innovate, to find new products, to make a really big splash. Do you think this is tim cooks moment . I think it is. I think when mr. Cook first came along, he had a stumble when he issued the maps app. The map wasnt as good as you expect a product to be. But i think the maps app was essential for them to get into mobile payments which is something they may talk about today. This is about the big thing that alibaba is about, specifically mobile commerce. Youre much more focused on the wearable device than the iphone 6 . I think newswise, the i watch will be big. Revenuewise, its going to be the iphone. Its going to be two models of the iphone 6. Theres going to be a new operating system, ios 8 with functionality like the Continuity Service whereby you do something on your iphone and it automatically hands over to your imac. Apple and samsung have had clear leadership in the innovation over the last few years. More recently, theres lots of smartphonemakers that have caught up. When we move on to wearable devices, do you think apple will have a year or two leadership ahead the rest of the pack. Yeah. I think the key difference is they both make hardware, but they dont both make software. Products like internet tv which may also be launched today by apple, that will expose Companies Like samsung versus apple which has a sticky system. Following a product release, according to data, apple tends to lag. As time goes on, however, the stock outperforms with the biggest gains taking place six and 12 months after the release. If you look at it, its saying the most reaction comes 12 months later, but there are so many other factors that could be moving the share price on that. On top of that, there have been now six different iphones and a few more on top of that. Its been over seven years since 2007. Essentially all that chart is really saying is since the first iphone, apple has done really well. What drives the share price now, is it innovation in general or bottom line sales . That chart is pretty good. I think it still is the iphone. The iphone represents 50 more of sales, probably 50 more of profits, we dont know. Both of these products have come out since 2007. Theyre very recent products. And so i think the key is the iphone 6 and the upgrading system. But do you still want to buy the shares inspect theyve had a fantastic run over the last six months. We saw that wobble last week. Is that a good time to buy . I think it is. If you look at apple thee mattockly, in other words, what are the big investment themes apple could potentially benefit from, theres a number of thims themes in the pipeline. Mobile payments, we could find out about that today. Then theres internet tv which is coming up, then theres big data for more of the data that apple collects. Apple has a lot in the pipeline. Its going to release what it wants today, but theres a lot more to come. And you mentioned mobile payments. That links alibaba. Where do you stand on that . Do you think they priced that well . Well, alibaba is priced between 150 and 160 billion. I think on a relative valuation basis, in other words, if you take the top 10 companies that can compare, that are alibabas peers, it stands in about the middle. On a theme attic basis, alibaba does a lot for the economy. But its when you look at the risks that we see real problems. This is one of you know, in 20 years of looking at technology, ive never seen an ipo where theres so many risks. And its not just the Technology Risks im talking about, its the corporate government risks and not just china no political, but specific to this company. And were going to touch on some of those risks on alibaba again. But as we said, its tech tuesday here on Worldwide Exchange and we want to know what has been your must have gadget over the last few years. Which products are you most looking forward to coming up . Is it wearables or the new conversation . Join the conversation here on Worldwide Exchange. And weve just had some flashes from the Dutch Safety Board. Their preliminary report pointing towards an external cost of the mh17 crash. The Dutch Safety Board saying mh17 broke apart due to a large number of high Energy Objects and it says there is no evidence of technical fault on flight mh17. These findings certainly not coming as a surprise, but the dutch saw the highest number of casualties on that flight, almost 300. The u. S. Tech giant announced in february. Google could be hit with fines up to 6 billion if the two sides fail to reach an agreement. And we spoke to europes competition chief who said google has lots of questions to answer for. We happen we will work on this until the last minute. I am sure that the next commission and the next commissioner will have to work a lot on google because this is not the only case. We are working on android, not yet a formal investigation, but quite some advanced knowledge. We can work in other areas of google where some people are sending out arguments and in some cases former complaints talking about possible abuse. In other areas of the Google Business and in other areas beyond competition, going the has a list of questions to serve the attention of the European Union, the commission, big data, factors and so on. And were also just getting a breaking news that the french antitrust watchdog has opened an investigation against gdf suez. But back to google particularly, theyve carved out a wonderful market for themselves. Is it fair that they face this kind of antitrust investigation off the back of it . I think the accusation against google is when you do a search, it diverts traffic to their own businesses as opposed to giving you a fair search. And that is key. If it is doing that and its proven that its doing that, i think that is a breach of anticompetition laws. In about two months time, there wont be a solution between the two sides because this investigation has lasted for years and years. Even the smallest step has taken months and months. So what if google has to pay 10 of its revenues . How dent mental would that be to the firm . I can that would be extremely did he want detrimental. I think the incoming european commissioner, i think all understandcations are that hes going to take a more europefocused approach, possibly a more muscular approach. I think youll see more anticompetition inquiries against u. S. Tech companies. Net neutrality will be on the cards because theyre deciding about that on the 15th of september in america. So that might come here, too. I wanted to move the chat back to alibaba. You mentioned that you think its relatively priced for this particular moment for the ipo. Once its listed, what are the main factors youll be looking at . Its relatively well priced, but stock markets are on a relative high. But at todays prices for tech . Yes, yes, it is. What are the key factors youll be looking at moving forward . I think some indications are that the bankers have learned from the facebook saga and theyre going to price this right. If the price rises i expect the rite price to rise, but whats going to send it down . The vie structure, the variable interest entity structure. In china, this structure could be illegal. We dont know. Theres uncertainty about it. And two is the structure means that the shareholders in allibaa might actually own these assets. The biggest ipo in history potentially. A lot of uncertainties around. Thank you very much, cyrus. Also on todays show, tech stomps on to the cat walk of new yorks fashion week. We find out how intel is trying to lure fashionistas. Home depot shares fall after we find out hackers gained access to customer information. Now lets take a look at how europe is at the open. Were one hour into the trading session. The stoxx europe 600, we saw quite a shurnlg at the hope. But then we saw a bit of a shift to the downside. No major news flow within the last hour that would warrant such a move. We have to keep our eyes peeled on that. Overall, the moves arent huge and, once again, we are maybe just seeing some profit taking after the recent run up. The xetra dax down by 0. 1 . The notice if it is 100 continually stabilizing after yesterdays big drop, which was related to the uncertainty around stocks referendum, dtoda. The ftse mib outperforming, it is flat now. Lets get to some corporate specific news because it seems this is whats driving the market today. Lets kick things off with abb. Abb shares moving higher in switzerland to the tune of 1. 4 . This is after the swiss engineer announced ads 4 billion Share Buyback as part of a strategic shakeup. Average Revenue Growth of 4 to 7 a year. Coming up, we will be speaking to the ceo of abb in a first on cnbc interview. Certainly dont want to miss that. I was just alluding to the slight performance in the italian market. This is because Telecom Italia will hold talks to buy movil eyes brazil unit. The group said its issuing 1. 1 million shares to buy the dutch group. It plans a Capital Increase to fund the purchase. And last but not least, shares in loreal slumping to the bottom of the stoxx 600 after it cuts its Growth Outlook for the global Cosmetics Market to between 3 and 3. 5 . Shares down by more than 2 . Lets get out to stephane who has more on this story out of paris. Stephane, the ceo saying 2014 is a strange year. Is that because no one is buying lipsticks any more . Yes. Not exactly, actually. The warning is related to the market cosmetics segment which is not forms as expected. The Retail Sector remains difficult, for instance, in the u. S. And the uk despite the recovery of these two economies. And in western europe, the market was negative in july and august because of the market prices but also because of the poor weather conditions. For instance, people vote less product this summer compared to last year and that explain why the performance was negative on that. On the longterm, though, the ceo remains it will turn to a berth rhythm market year. The 20 years was resting competition in the past and is satisfied with a new pro business agenda in france which he believes will improve the mood and the confidence for French Business leaders. That being said, its a warning and thats the reason why the stock is trading lower. It seems as though we are seeing stabilization for the 10year treasury yield. Just below that 2. 45 level. Maybe some concessions for the incoming supply. Were getting three, 10 and 30year notes later on this week. The tenyear gilt yield shot up yesterday, 2. 5 . We saw a steepening of the curve after those polls coming out with regard to the Scottish Referendum in two weeks time. Tenyear italian yield at 2. 3 . Were seeing a surge to the dollar for 14month highs. The reason for that . Nobody really knows. The only data we have to contend with was the jobs expectations on friday. Up by around 0. 25 . Euro dollar still under pressure, below that 1. 29 level. 1. 2869. Briefly, i want to take a look at cable at 1. 6099. Below that 1. 61 level within worth noting that the onemonth volatility at the is the highest since 2011. After warning of a selloff back in july, Goldman Sachs changes its tune and its now bullish on stocks. We hear from the Investment Bank chief equity strategist next. Wait, wait, wait, its wait, wait, wait. Whoa, does she have special powers when she has the shroud . No. Guys . Its the woven one the woven one. Oh, oh that gives her invincibility. Guys . No, no, no. The scarlet king is lord victors son no dont. I told you you guys are gonna be so surprised when you watch the finale youre so lucky your car has wifi. Yeah. I am. Equinox from chevrolet. The first and only car company to bring builtin 4g lte wifi to cars, trucks and crossovers. This guy could take down your entire company. H . Stay with me. On thursday a hamster video goes online. On friday it goes viral a network choking phenomenon. Why do you care . Hes on the same cloud as your business. The more hits he gets, the slower your business may get. Do you want to share your cloud with a hamster . Today theres a new way to work. And its made with ibm. David costan told cnbc that risks are fading. Ricks of higher bond yields, which had been a concern say three, four months ago, it has now been reduced. As a result of that, the downward pressure from higher Interest Rates on u. S. Stock markets, particularly in Global Equity necessary a broader sense, has been reduced. And as a result, more fundamental drivers of the economy, particularly in the u. S. And in asia is likely to be a key driver to why we get higher prices. Davids colleague, the pacific equity strategist at Goldman Sachs made his bullish argument for european equities. The equity risk premium, a valuation of european stocks still is at very, very high levels. Particularly, if we look at the risk premium priced into equities and that then is priced into bonds and look at that over a historical period, were clued at extreme levels quite favorable from equities. From a relative valuation perspective, theres a clear argument in favor of european equities. Joining us now is gary fowler. Gary, great to speak to you witness again. Your colleagues at Goldman Sachs are bullish about equities, but youve been bullish all along. You think this bull market will last another three years . Yeah. It could be a very slow cycle in our view. We may end up getting through in 2017 with the market still rallying. But thats not to say there wont be risks. So with increasing caution because a lot of the fundamentals of volatility suggest very good reason for very good low volatility at the moment. That in itself is a risk. As we progress through the rest of the cycle, the credit cycle is going to start turning. The pullbacks when we get them may be more significant as we move forward. And you mentioned the credit cycle and youre suggesting ta that is already starting to turn downward. How can markets continue upwards in the face of that . Well, its not so much that the credit markets will actually sell off. Its just that the returns from credit will start to deteriorate. Youve had so much of the Capital Gains and spreadse through. Further spread compression, we believe, will probably be in tant em with an incase in sovereign yield. Actually, the yields compress receiving Corporate Bonds may be very limited. So you can still generate your carry. What were saying is the fundamentals of credit may well start to deteriorate because youve got a lot of high yield issuance starting to come through, whether it be for lbos, or whats interesting now is the trend of companies willing to junk their balance sheet, accept a significant ratings downgrade, specifically to issue very deep threat. Thats the driver of the credit is cycle going to powered equities is that this financial releveraging is going to increase risks in the system, but in the shortterm, thats potentially favorable for equities for a while yet. Gary, if i look at the dollar rate today and over the last couple of days, theyre higher across the board. The dollar closed at a 14month high. Can carry continue to rise . And what about commodities stocks . On the issue of rising yields, its certainly a risk that if u. S. Yields were to rise, then a variety of factors would start to look less appealing. Whether its potentially globally emerging markets. However, its important to recognize how significant the supply and demand extortions are. We mentioned this last year when yields backed up aggressively. There is not enough Financial Product to buy for the amount of money that investors globally are saving. In particular, if you look at what Central Banks now hold around the world of u. S. Treasuries, its a vast proportion of the u. S. Treasury market. On top of that, youve got banks that are required to hold more aaa securities and theres a significant bias towards tr