Lowest level in almost six years, but still beat forecasts. The ceo tells cnbc, stress tests would send a strong signal to the market. Hopefully, weve seen that these stress tests are for real and that the european Banking Sector has to be to clean out their bad loans. That would be a signal of strength and that could help the sentiment in the market. Announcer youre watching worldwide exchange, bringing you Business News from around the globe. Hello, everyone. Im seema mody. Coming up on the show, senior hong kong officials sit at the bargaining table are protesters, but we hear from one person who says dont hold your breath for a compromise. Strong chilling ways on earnings as ae is the hos tries to avert sales slowdown. Will the Recovery Efforts pay down . We will discuss. And is we ask whether headwinds in china and russia will eat away at the bottom line. Announcer youre watching worldwide exchange, bringing you Business News from around the globe. So, carolin, everything is calm in the markets. Ive been away for a couple of weeks. I had to go on holiday. You have to do that a couple times a year. But its good to back back on this show. Its good were seeing modest gains in these markets. You have to wonder why. Is it really just a bounceback that everyone was expecting to see or is it all about apple, seema . Thats the big news today. Apple could potentially provide a boost to the tech heavy nasdaq. Apple beating street expectations. But wall street focused on the stronger than expected guidance, expecting a big jump in holiday sales, despite the iwatch not coming out until next year. Absolutely. And we will be diving into Apple Earnings and all of the other market stories in just a couple of minutes. But first, our top stories. Vladimir putin has sent his condolences over the death of the ceo of total. Russian investigators say the driver of the pilot that caused the crash on the runway during takeoff was drunk. The french president says he was shocked and saddened by the death who says he has big ambitions for the oilmaker. Stephane now has the latest. Good morning. France has opened an official investigation and will send a team to moscow to assist the russian investigator team. France has the right to do it, given that the plane was operated by a French Company and was built by french manufacturers. Therefore, france has the right to send a team to moscow. It will organize a Board Meeting as soon as possible without further details about the exact schedule. Total will appoint another ceo. Two potential candidates, phillip hthe other nate is patrick puen, the head of the refinery in europe. He assisted krzysztof de margerie. Christophe de margerie was a strong defensor of russia. He said globally speaking, the need for Oil Companies to work and all the countries even when the stress of sanctions or conflicts makes it difficult. So the question is whether the next ceo of total will use the same strategy. The plan for total is to double the production out of russia by 2020. At this time, russia should account for more than 10 of its global portfolio. We shall announce that shortly. Over to you. Stephane, thank you very much. Lets have a look at markets. Quite a lot of green behind me. Markets opened basically flat, but they have strengthened a little bit in the last 20 minutes. The stoxx 600 is up 0. 5 . Lets have a look at the stoxx 50, as well, which is up pretty much exactly the same amount. We have a little bit of impetus in markets so far today. Not totally surprising, given the huge amount of volatility and the negativity that we had last week. As you can see, a bit of strength across the board. The ftse 1 is 00 just shy 0. 5 . Germany, italy, france just ahead 0. 5 in the green. Lets have a look now at some individual stocks. In the news today, apple is up 2 . All eyes on u. S. Trade, how will apple open when we get there . Arm is, in fact, flat now. Shares were trading higher despite the designer reporting disappointed revenue. They were high off the earnings of apple. Actelion raised full year guidance for the second consecutive kwarder. 6. 45 in the green. Swedbank posted betterthanexpected earnings. Michael spoke to the ceo about his view earlier about the banks upcoming stress tests. Hopefully we see that the stress tests are for real and that the european Banking Sector has to clear out their bad loans. That would be a signal of strength and that could help the sentiment in the market. Now, yesterday i was saying the tenyear treasury just settled around that 2. 2 mark. A little bit more yield compression, perhaps a little more negativity out there yesterday. The germans, 0. 84 . And the uk yield continues to have that impression. Lets have a look at forex, as well, and the u. S. Dollar. 128. 24. Its given up some ground today against the yen, 106. 54. Lets have a look quickly on asian markets, as well. Sri, stick with me on this update. The nikkei giving up 2 today. Yesterday it was up 4 . But its basically a risk off trade today. Weve got china off 0. 75 following that china gdp print. Data out of china, well be breaking that down for you later when were joined at 9 30. Hong kong is basically flat as is australia. Absolutely. Lets try and make some sense of the market. It seems as though theres some bargain hunting going on. Last trade days, the European Response was a bit delayed. A lot of people are trying to call the bottom. I would say, i represent a Company Whose investors are longterm investors. Right now, i see no reason to change that and ive been suggesting more. As many commentators have said, theres no real solid reason for this sell isoff. Therefore, at these levels, when you can get decent yields on Global Equities around 276 , 2. 7 on the ftse level, absolutely, especially its the real worry really is deflation. And low yields for longer, so why not buy some yields on equities . A lot of people would agree with you. And thats exactly what worries me now because a lot of people say you should be buying on the dips. This is the strategy. No one is telling you to take risk off the table to buy gilt right now. Youve really got to divide the longterm client investor. So the optimism, all that triumph over history. So then youve got to be buying on dips. Youve got to be optimistic about eks. Its hocuspocus. Who knows where its going in truth . On report my money on the fact that markets will recover. If we are in a period of longterm low growth, low inflation, you see buying the high yielding part of the equity markets. Markets are going to turn up because of growth in the u. S. , perhaps europe might recover. Either way, i like equities. Higher sectors saying investors should put their money with specific sectors. Would you recommend if you believe in the low growth low inflation, the central bank unable to produce any inflation, obviously, youre the you would want pharma, tobacco. Dare i say sort of big tech. The more defensive, not the software. Anything that looks like it can continue to generate safe earnings and you dont want to be in growth dominated sectors that would fall asunder in a period of structural low growth. Im not entirely convinced that we are looking at low growth. Despite the worsening situation in germany, germany has continued its me fairty. Im totally amused by germanys stunt. Its like its gotten into the euro without appreciating what that means. Its reluctant to create political and fiscal union, the political and economic system. The ball is very much in germanys court to embrace the concept over the euro and its totali totality. When they set it up, they knew very well that one thing was intended to lead to another with the political and fiscal union. Isnt that a little harsh . They bank rolled the existence of the u. S. Since 2012. On top of that, when you have Companies Like ireland coming out with austerity saying, look, were doing a lot to save the euro. These countries that have had to go through issues like ireland and greece, theyre showing signs of recovery. It was always intended germany would bankroll the euro. Thats the replay. So you think without Political Unions, then theyre being short sided . Yes. And a Political Union would give them the leverage for institutions in brussels to have some say on how that bankrolling, that support for the periphery was spent. At the moment, they down have that. It legitimizes that its the only way you can keep the euro afloat. Okay. Well be back with more from our investment strategist. Before we go to break, youre looking at live pictures of the courtroom with Oscar Pistorius where hes expected to be sentenced. Well bring that verdict as soon as we get it. Breaking up is hard to do, especially when 54 billion at stake. We discuss the collapse of the abbvie shire deal. Thats coming up after this break. When change is in the air you see things in a whole new way. Its in this spirit that ing u. S. Is becoming a new kind of company. Ing u. S. Is now voya. Changing the way you think of retirement. A single ember that escapes from a wildfire can travel more than a mile. That single ember can ignite and destroy your home or even your community you cant control where that ember will land only what happens when it does get fire adapted now at fireadapted. Org the tail end of a hurricane gonzola reached the british isles. Winds are expected to reach 70 Miles Per Hour in coastal areas. Here is a story catching the attention of wall street. Microsoft says the ceo nadal la was paid more than 80 million in the companys last fiscal year. Most of that comes from restricted stock tied to microsofts performance against other companies in the s p 500. Nadella wont be able to get those shares until 2019. Microsoft says he was the biggest beneficiary of a retention plan the board put in place last year when Steve Ballmer announced he was stepping down. Microsoft shares, by the way, up about 28 over the past year. And what do you think about microsofts ceo payback . If you want to join the conversation, get in touch with us, worldwide cnbc. Com, cnbcwex. And our personal handles are on the screens. That is a fantastically high number. If it is based on equity stock optiones and over the longterm, he doesnt get them until 2019, if the performance justifies it, perhaps its justifiable. But regardless of that, the timing couldnt be worse. Last week, the awkward comment coming from him about how women should to get a pay raise, its difficult for him to justify this package right now. Absolutely. And gender equality has been a hot issue, not just in the workforce, but specifically in siliconealley where youre seeing fewer women on average and on top of that being paid less than men. Send in your comments to cnbcwex on twitter. Billion offer investors bill ackman said valeant was discredited. He made misleading statements about valeant and ignored outside advisers when he called valeants offer problematic. Allergen has been working for months but all efforts have been rejected. Carolin is going to tell us more about this deal. Before we get to that, carolin, a big deal for shine and this breakup. Shires ceo has been officially terminated. Abbvie is blaming the treasury for the dealing. Meanwhile, allergan shareholder policy is stepping up pressure on the bow textmaker to make its own offer for shire. Youve been following this story for as long as its been on our minds for the last couple of months. How much money is going to change hands now that this deal has fallen through . Well, weve got 1. 6 billion which is payable to shire by the close of business today. But thats not really where this story ends, i think, because youre seeing so much more action from these activist investors. Weve got john paulson who is better known for making great calls in 20307. Who is coming in, hes a big shareholder in both allergan and shire. Hes not apparently urging them to make a tie up, which would obviously mean that is Valeant Allergan deal may not happen. And this is something, which is why weve seen shires share price recovery slightly this morning. We will wait and see what the next move is here. It doesnt look like the trend for contoll addition is over yet. Its a long way from consensus of getting something pushed through on this topic. Are Companies Moving too soon with the deal . There has been a lot of speculation that abbvie was overly cautious in this particularly when there had been a move even since the deal with a announced on the 22nd. There had been a deal where they said this is still going through, this is still attractive despite inversion. And i think it will mean that deals for which tax inversion is the main focus probably wont go through. But there is still some room for consolidation. Theres fear, theres a lot of recovery companies, theres a lot of cash in balance sheets. We could see quite a lot more. I want to bring you back in here. Tom elliott, International Specialist at debeer group. A lot of deals have fallen through. Yesterday, we saw the highest number of deals that has fallen through since 2008, not just abbvie and shire. Tmobile and illiad, as well. This could be hitting the maa streak that is predicating much of the gains. Do you think thats a big risk for the market . Yes, i do. And i think we could look at two things. Youve obviously got the u. S. Congress want to go clamp down on this inversion theme ahead of the election. And then youve got markets wobbly the last couple of weeks. A lot of dealmakers are nervous. What is the price they should be paying . Put that together and thats on itself to bring prices down. I think whats really interesting here is will this drive the u. S. To reform its tax law or after all this has groan over, will we still be in a crazy position where its more efficient for apple, for instance, to borrow large sums of money in order to pay dividends rather than use the Cash Holdings it has overseas to bring those yields to pay the dividends. Im personally doubtful that the american tax system will change. I think youre going to continue to see these strange things going on. But before we go this change, do you think the termination of the abbvie shire deal will lead to other companies trying to grow revenue organically . Certainly from america, yes. I dont know that much about the pharma industry, but economies of scale matter hugely for the late stage trial and progressing drugs to the market. And so anything that actually hinders that would be a pity. If we put aside the tax angle for a moment, were now seeing valuations come down. This should be a sleek spot for m a. It is built for the reasons weve given. If the other part of the balance sheet, the working asset, have a question mark over their valuation. You can understand why markets are up. But i would like to reiterate, ultimately, this is a time when investors should be looking to pin the market and the large cash on balance sheet, good dividend coverage, generally, and i go back early to my pro equity position. Research shows you tend to see a drop in m a. Do you think if volatility continues to move to the upside, we could see m a drop Going Forward from here . Almost certainly. But the volatility index is notorious. What is it now, 16 . 18. But it did go above 30 last week, well above the historical average of 20. That indicates a lot of fear in this market. Yes. My hunch for what its worth, and who knows where we are going, but we will see more money at the markets. That will help to settle markets over the coming months. Tom elliott, we will leave it there. And before we go to break, just a reminder that youre looking at live pictures of a courtroom where a judge is due to sentence Oscar Pistorius for his culpable homicide of his girlfriend, reeva steenkamp. Well bring you that when wealth it. And still to come on the show, we cross to beijing for more on the companys gdp reading. Thats coming up next. Dont go away. Sgroo paris prosecutors open an investigation into the plane crash that killed total ceo christophe de margerie. Down but not out, chinas gdp growth closed to 7. , the lowest level in three years, but still beat forecasts. Shares of softbank closed higher than expected. Hopefully we see that these stress tests are for real and that the european Banking Sector has the ability to clean out their bad loans. That would be a signal of strength and that could help the sentiment in the market. And were just getting some data out of the uk. The september Public Sector net borrowing was expected at plus 10 billion and it came in at plus 11. 8 billion last year it was 10. 3. And the Public Sector net cash requirements was plus 17. 7 billion versus 6. 7 billion a year ago. So both those numbers ticking up. Lets have a look at cable. How is that iraqiing off the back of these numbers . It has well, its not really moved in the last couple of minutes. Cable is basically flat for the day. And lets have a look at european market. What were seeing today is a bit of a technical downside, but it seems as though this is still dragging on. There is too much conviction under it. The ftse 100 up 0. 5 . The xetra dax higher by 0. 7 . And the cac 40, despite the death of the chairman of total is up by 11 . Arm getting a little bit of a lift early on. Weve got a host of corporate earnings that were better than expected today. Lets have a look at the bond markets because the stoxx europe 50 is up by 0. 7 . I was going to talk about the bond markets. Lets have a look at that right now. We are seeing treasuries higher in yesterdays trading session with the yields continuing to fall. They have been falling for five consecutive weeks. The tenyear german yield, 0. 84 and the tenyear gilt yield at 2. 15 . Were seeing some pressure on the periphery once again in part because of the chinese numbers that we got out today, even though chinas economy grew by 7. 3 in the Third Quarter. It was still the slowest growth in about six years and weve got the stress tests coming you up later this week. I get a lot of investors sitting on the sidelines this week. Lets get back to the china numbers. Its the big story. In march, the lowest growth in almost six years and it raises a question of whether beijing will decide to introduce more stimulus. Lets bring in eunice yoon, who is live in beijing. Eunice, 7