Transcripts For CNBC Worldwide Exchange 20141201

Early numbers from shoppers indicate they did not spend as much as they did last year. Welcome to the show. Just getting some eurozone pmi data out. This the second reading out for november. The wide numbers come in at 50. 1, previous month was 50. 6. The forecast was 50. 4. Its come in below forecast. This follows the individual readings out from france and germany. Germany the headline number coming out at 49. 5, retraction territory. The lowest reading for germany in the last 15 months. The eurozone wide number coming in at 50. 1. The euro dollar at 124. 55. Italys final Third Quarter came in at negative 0. 1 . Contraction in growth for the Third Quarter. Italy has shrunk or stagnated for the last 13 consecutive quarters. Fragile recovery thus far for italy. Joining us know is the chief Investment Officer at tatan investment. The eurozone number below expectations. The german number coming in with retraction. Is that a surprise . That is a bit of a surprise. I would have thought after what we heard eventually about Business Sentiment that number would be better. The only positive i can see its further pressure to the drage do whats necessary. Do you think its sufficient . We have not heard much from the german government, and i think that will allow drage to do more, maybe there are various ways they can act. Is this how the market will perceive negative data coming out of the eurozone . Is bad news actually good news, because the ecb has no choice but to unveil full blown quantitative easing . It depends. If its just not terrible, but bad enough to keep the pressure up, the market should see that as good news. If its too bad, then its just bad news. Similar to what happened in the u. S. Im not sure it was all that bad data, youre referring to the sales figures from last friday . Just in number. Weak data out of the u. S. The qe would stay in place for a while. Of course. Thats strategy in place for the market. Another story is in the commodity space. Brent trading below 70 a barrel, a fresh 4 1 2 year low, wti is at the lowest level in five years. The stock weighing on the oil and gas sector. In the u. S. , the S P Energy Sector is in bear market territory, down more than 20 from its record high in june. Have to get your reaction to the move that were seeing not only in oil but in Energy Stocks. Can the market move higher if Energy Stocks continue to underperform . Yes, theres way too Much Negative news on the oil price fall. Just because a certain price falls doesnt mean bad news. For us, its good news, unless it gets into an uncontrolled fall. They can look through it, see its something between the saudi arabia and the u. S. , u. S. And russia, it will end eventually, and oil prices at this level are a great stimulus. We were talking the last month or two whether the Oil Price Decline was good or bad for markets. Surely this big reaction off the back of opecs meeting confirms the oil price is weak because of supply, not weak demand. Thats what we see and thats why theres no shift. Because the Saudi Arabians are pointing the finger at the u. S. Saying you change something if you do not like the oil price. We are content with it. At what point does the price war become unmanageable for Oil Refineries and explorers . At some point theres a concern for these companies that rely on oil Service Revenue . Lets face it. Theres flexibility on the demand side. Once the Oil Price Drops, demand picks up. I dont think this price is flawless. Even though we are seeing weakening growth in asia . Specifically china . I dont think were seeing weakening growth enough to warrant a drop in oil demand. We will continue our conversation in a moment. Now, taking a look at the markets, willfred, you have a look at whats happening in oil and the equity space, and we will focus on the bond yields. Thank you very much for that. As you can see, quite a lot of red behind me so far today. We had a strong week in europe. Profit taking off that end of the month and going into europe. And weak sentiment coming into equity markets and weighing on Energy Stocks. The stoxx 600 down the better of 1 . The stoxx 50 down 1. 1 . Lets look at the individual markets. Profit taking across the board, ftse 100 down 1 . An energyheavy index. The dax was strong last week. Up 6 . Had 11 Straight Days of gains. Down 0. . France down 1. 2. Italy down 1. 5 . Lets look at bonds. Well dwell on bonds for a second. We had significant yield compression over the course of the last month and last week. The italian tenyear hovering around 2 . If you held that during november you would have made 13 of gains as bond prices rose and yields fell. The uk just below 2 . Germany, 0. 69 . We were all talking about it pushing the 0. 8 handle for a long time. Its gone through that and through 0. 7 . Despite very different sets of circumstances in the u. S. S, we have seen yield compression there as well. To a lesser extent, but yield compression nonetheless. Lets look now at some individual at the euro, basically flat, 124. 50, but in general a stronger u. S. Dollar environment despite the move in the yen which was weaker in earlier trade. The dollar has softened against the yen after moodys downgraded japan from a1 to aa3. The aussie dollar very weak over the last trading session. Weak chinese data this morning, that never bodes well for the aussie dollar. The u. S. Dollar strengthening 4 against the ruble. The ruble is down some almost 60 over the last 12 months. Very, very weak today, influenced by the weaker oil price. Lufthansa is flat, but up to 150,000 passengers are likely to be affected by the ninth strike at lufthansa. Almost half of the Airlines Flights for monday and tuesday have been canceled. Flat so far today. E. On up 4. 2 . The company says it wants to spin off fossil fuel and Nuclear Generation company into another company and focus on renewables. And Balfour Beatty is up. The Construction Company is likely to be split. John lang says the deal will be funded with a share issuance. Altice up around 5 . It agreed to buy portuguese assets of Telecoms Group oy in a 7. 4 euro billion dollar deal. Here is more on the deal. This is not listed in paris but its controlled by an israeli billionaire. The company was not known in france, even though it was owned by a cable company, but its now well known since it bought the former telecommunity. Over the weekend altice confirmed its ambitions to become one of the Largest Telecom players in europe with this acquisition in portugal. They will pay 7. 4 euros to buy pt portugal from a Brazilian Company it will finance this acquisition mostly via an increase in debt. Thats the problem. Even if the Company Becomes a major player in europe t has a huge debt level. It paid 13. 4 billion euros, 7. 4 billion euros in europe, and over the past year, the company spent 35 billion to make acquisitions in france, europe and the caribbean. Thats the problem from the market point of view. The company has a huge debt level in april it was able to raise 12 billion euros, but until which point it will get the support from the market, thats the question. Even if the Market Reaction today is widely positive after the announcement. Thank you very much. Now our focus turns to asia. Moodys has downgraded japan to an a1 rating from aa3 and put the outlook at stable. The Ratings Agency says the cut is down to uncertainty about japans ability to cut fiscal defic deficit. In terms of market impact, the end hit a sevenyear low against the dollar on the downgrade and has recovered in trading. Lets go and look at the broader Market Reaction to that downgrade. Thanks. This happened after the japanese markets closed. You are right to highlight the transmission mechanism is in the currency markets. They are the first to be impacted by this sovereign downgrade. We expected this to happen. Remember, Fiscal Consolidation is on the back burner by deferring the sales tax hike, that was supposed to happen in october, the 15th of october next year, 2015, i should say. Also the distinct possibility we could see increased stimulus spend big ting by the governmen. Thats why moodys pulled the trigger on this downgrade. Initial reaction for the yen was for it to weaken further, to fresh sevenyear lows before rebounding against the u. S. Dollar. Well have to wait and see for tomorrow to see how the markets and equities will take that downgrade. Elsewhere, very rough day for our markets given the double whammy of the fairly soft Manufacturing Activity data that we got on the official level and from private forecasters out of china and the capitulation in the price of oil hitting index heavyweight oil stocks in this region. Thank you very much. Lets get an Expert Opinion on that downgrade on japan. The fears over the future of japans economy continue to grow. Why would anyone get bullish on japan right now . I think with the reforms that the government is introducing, there is a Brighter Future for japan going forward. This downgrade was a bit overdue when you think about it. Japan debt was never big issue because it was domestically owned. With the latest announcement they said they want all their domestic funds to start buying equities and perhaps foreign assets. Therefore the rating agencies should be downgrading them. Moodys saying the main reason was heightened uncertainty over achievability of the fiscal deficit reduction goals. A little bit overdue. I suppose the bigger risk, yes, shortterm spending is good. Push equities higher. Is there a point where investors, domestic investors will get terrified that the government cant continue to meet its debts . I think where we are at the moment, thats a good, fair bid away. There is, when you have that sort of government debt, that concern always somewhere in the future. But at the moment that population is still so driven into debt or into holding fixed interests for pension reasons i dont see that happening any time soon. Lothar, thank you very much. Lothar mentel. Coming up, u. S. Retailers may not be quite in the black after thanksgiving, but will cybermonday provide some Holiday Cheer . Were in ohio seeing how one u. S. Company is preparing for sales. And was n behind the major hack on Sony Pictures . We tell you why one film in particular could have rile the the secretive nation into action. And were speaking to one internet startup hoping to be the expedia of central europe. Thats coming up. Hungarys Economic Future is on stable ground according to fits. Upside and down side rights are balanced and a drop in Unemployment Rate will spur consumption in 2015. Reporter good morning. Yes. Beautiful budapest, a bit colder, i might add, doesnt matter. Listen, look what youre looking at back here. This is a castle. Used to belong to the hungarian king. Used to live in it before the Ottoman Empire took over. And youre looking at what used to be buddha and we are standing on what used to be pest, before they put it together to become budapest. Lets look at some of the Startup Companies that have been operating. We have been talking about taxation and stringent government measures put in place over the last couple of years. Lots of taxes put in place on the banking sector, and also the neighbor, ukraine. So there are a lot of issues with regards they should be siding with russia or building closer ties to the likes of germany and europe. So, what does it feel like to operate in this environment . Joseph is the ceo of zelest. You are an Online Booking type company. Tell me about your company. Yeah. My company is a travel agency, but we focus on the small apartment flats and small accommodation possibilities because we focus on the domestic in poland, ukraine and slovakia and croatia. Youre a relatively new company. Whats it been like in this environment thats been quite tough to operate in . Whats it like to start the company . What are you finding now . In my opinion, every country is starting a new company. Not the country type, but starting a new company. In my opinion, we started in 2000 this company. This is a very young company. And we are building up this company the last five years. This was a typical Startup Company because we starting with two other people, and at this moment we have 80 people. What are you finding with funding environment . Funding environment, in my opinion, is very good. The value is another dotcom which is popular in hungary. And locally, we focus on local inventories which is growing double more. 10 this year, this is a good starting point for accommodation providers. What would you like to see from the government to support some Smaller Companies like your own . A little bit less regulation. This is the most important thing for the Startup Company. The regulation side is very, very heavy for the Small Company and thinkimaking it free is goo opportunity for growing faster and faster. And i noticed vitamin c was discovered by a hungarian way back when. Yes. Thank you very much. Thank you very much. The ceo of szallas. I will be legging it off to talk to the finance minister here this afternoon, the taxation minister. Well be back on closing bell with that interview. Thank you for that interview and the fun facts about budapest and hungary. Now, retail is the big story. Numbers are in for the biggest shopping event of the year. Many consumers say they are in the better Financial Condition this Holiday Season. But the sales figures may make you think otherwise. Americans are spending less and taking a different approach to shopping. Kristin dahlgren reports from new york. Reporter this years black friday had all the frenzy and fighting weve come to expect. But fewer americans were out shopping this weekend in stores and online. According to the National Retail fediation, overall shopper traffic was down from thanksgiving through today. 134 million shoppers. Less than the 141 million last year. Experts say that might be a good sign for consumers. I think the consumer feels they have more choice when they want to shop and when deals are available to them. Reporter despite some stores being open at 6 00 a. M. On thanksgiving, turkey day turnout was flat. Black friday shopping brought in 87 million in stores and online. Shoppers are shelling out less. 381 over the Holiday Weekend, compared to 407 last year. Total spending for the weekend is expected to be almost 7 billion less. Millennial are spending this year. We ended up buying a coat. Another pair of jeans. A sweater. Reporter and social media is already abuzz with cybermonday deals. 52 of consumers expected to shop on cybermonday. Amazon is offering new discounts every ten minutes. The game plan is to buy everything we saw here today online and have it shipped free. Reporter for those who feel like theyre starting too late its not over until its over. Retailers will be there and available for deals. Reporter in a shopping marathon that it seems is just getting started. Kristin dahlgren, nbc news, new york. We want to hear from you on this. Are you over sales shopping or were you out spending this weekend . Let us know. Joins conversation on worldwide exchange. Email us, or tweet us. Gentlemen, have you been shopping over the weekend . I didnt realize that black friday is not just a u. S. Based phenomenon. I have to say this on my part, all the talk of shopping put me off this idea, and i will probably want to do it next weekend when theres no shops on. Ifrnl it felt like this black friday phenomenon was spilling over to the uk. When i checked with my friends in germany and denmark t had not arrived there. They said black what . We have cybermonday. But the initial figures, perhaps more for the main high Street Stores on friday itself werent that positive. The weekend as a whole, and they dragged out when the discounts apply. We dont have all those numbers in yet. Exactly. We saw that last year. Theres talk about figures being less good. Then all of a sudden the online retailers come in. They seem to be in a different reporting cycle. It all goes up. I wouldnt be surprised if the weekend, together with cybermonday today, turns out to be way better than last year. I would be very surprised. As we head into the christmas heard. Are you positive on the u. S. Consumer . Very positive. Prices at pumps have dropped 30 . Thats real money in the u. S. Consumers pocket. They like to spend that. Lothar, thank you for joining us today. Coming up on the show, as clashes with pro democracy protesters in hong kong flair up again, we speak to one british mp banned from the territory by the Chinese Government. Stay tuned. Thats coming up next. Crude continues its selloff with wti hitting a fiveyear low. The move weighing on commodity stocks and sending the russian ruble to below 50. Moodys downgrades japans credit sending the yen on a roller coaster ride. And altice continues its shopping spree snatching up brazils oi. And u. S. Shoppers went to and from the mall over the Holiday Weekend, but early numbers indicate they did not spend as much as last year. Well discuss that. Well have a look at sterling whilst we await pmi data. The october reading had been 53. 2. Were waiting for the second reading in november. Selling has jumped significantly in the last 10, 15 minutes. Its 156. 76, perhaps thats on expectation of a stronger than expected reading. We havent had the numbers out. Maybe some people have had an early number. The numbers are coming out. Ill get them for you now. The uk november manufacturing pmi is 53. 5. Its the highest since july. It has come in above the 53. 3 that we had in october. Reuters poll was expecting 53. 0. 53. 5, ahead of expectations of 53. 0. That spurring the pound higher over the last ten minutes. Its broken up just a quarter percent today, the session is 1. 5684. Uk mortgage approvals falling to the lowest level in more than a year. The fewest mortgages were approved since june of 2013. Consumer lending boomed. Uk we are look at the sterling trading higher against the u. S. Dollar. So, bouncing back more in relation to the pmi data than the mortgage ending data. Brent is trading below 70 a barrel, nymex is at the lowest level in five years. In the u. S. , the S P Energy Sector is down more than 20 from its record high in june. Mideastern markets have taken a hit. Abu dhabi and dubai are trading at multiyear lows. Lets go over to yousef over in dubai looking at the Market Reaction to the drop in oil prices. Keep in mind that they are clawing back some of the losses in early trade so far, but sunday was the big day in terms of reacting, not just to the opec decision but also to a 10 drop in oil prices. Remember, thursday afternoon and the government shuts for the weekend. You saw saudi stocks drop by 4. 8 . Petrochemical stocks getting hammered, including the bellweather, Saudi Basic Industries hitting the limit of 10 in trade on sunday. Investors clearly showing anxiety that the prices are here to stay. The ceo told us last week that he was convinced the Oil Price Drop was temporary. Traders feeling differently about this. The concern is that the gulf golf the budgets, which depend on oil revenues might get jeopardized down the line. Who is most here . Bahrain or oman and number three is saudi arabia. Saudi arabia has the fiscal buffers to navigate through a prolonged period of 70 a barrel. Saudi arabia could continue financing a budget deficit of 55 billion a day for 13 years using foreign reserve assets. They have fiscal muscle to lay here. As brent continues to lose contraction, that will apply significant pressure on sentiment and profitability of a lot of Companies Going forward. Well keep a close eye on the markets, back to you. Thank you very much. Global markets responding to the drop in oil. Lets bring in Eugene Weinberg for his view. Thank you very much for joining us. Many different factors weighing on the price of oil, weakening global demand, the stronger dollar and u. S. Oil production. Going forward what factor do you think will weigh on the price the most . I think that all those sectors will be weighing on the price. Right now the market seems to be very surprised by the decision of the opec not to cut its production last thursday. Were not surprised. Also were not surprised by the price reaction. But its necessary to understand that the prices will need to stay at the current level so even below in order to really fulfill the goals of opec, namely to damage the oil production, shale production in the u. S. Thats why we expect prices will stay low for probably the next six, nine months and then will recover as we see production impacted in the u. S. Is opec now weaker than ever . Internally within opec different Member States are divided on what the best course of action should be. Opec used to be described as a tea bag because it used to be working only in hot water. I think opec is not truly weak, but the perception of its weakness is weighing on prices. It seems to be a paradigm shift with goals not within the prices but within market share, but theyre definitely likely to react sometime in the future. But the impact of such actions will not be as strong as it used to be over the course of the last year because the belief of the market is not any more there because it with you very much shuttered during the round of price war as we see it within the opec. Traders focusing on the price of gold, trading at a 4 1 2 year low after swiss voters rejected a proposal to force the countrys National Company to boost the holding of gold reserves. That also impacted the price of silver. The sharp move in oil and a stronger dollar weighing on the price of both precious metals. Do you think gold and silver prices will continue to fall as we head to the end of the year . The market focus on this is surprising to us. It was clear that the swiss would be denying this, because it would put the Swiss National bank into very wrong position going forward. I think it should have been expected. Were surprised that the market is surprised. But there are some other obstacles which make us believe that prices are likely to recover from current levels, especially the pick up in coins and bars worldwide, but especially in china, india, with weakness recently. Recent action by the Indian Government which put away the restrictions for import is the more likely to be supporting pripr prices in the longer term. Stepping back from those particular events, whats the main thing that drives the price of gold today . Its very different from five years ago when there was a fear of inflation from printing money. As qe ends in one country and others, what is the fundamental reason to own gold . Those are the same reasons to own gold. Those are the same reasons to drive gold over the course of the last year. Its on the one hand its economic sentiment. And performance of equity which is weighing on the prices. In the other end, expectations of the rise in real Interest Rates which are weighing on the gold prices. Should one of those factors not come as expected by many or for instance the Interest Rates will not be rising as fast as strongly as expected or the equity markets would take some volatility, then gold prices are likely to recover. We dont expect a stronger recovery in those terms over the course of the next month. The prices are likely to stabilize around 1200, but in euro terms or japanese yen, we expect prices to rise stronger over the course of the next month. Eugen thank you very much. Moodys has downgraded japan to an a1 rating from aa3 and put the outlook to stable. The Ratings Agency says the cut is due to uncertainty about japans ability to cut its fisc fiscal deficit. Reporter following the announcement, japanese tenyear bond yields are being nudged upwards and the futures are falling below the 17,500 mark. The yen fell to a fresh sevenyear low. Rating agency says it has become uncertain whether japan can reach its goals in reducing fiscal deficit and points out deflationary pressure may result in difficulties in effective and timely Economic Growth strategy. Japans Prime Minister abe postponed the tax hike which would have helped reduce fiscal debt, citing unfavorable general conditions. He stressed among Party Leaders today that the economy is steadily recovering under the governments current economic policies. And he added should his party win and return to office, he would go ahead with the consumer tax hike in 2017 and not judge whether Economic Conditions are favorable or not. Thats all from here. Thank you very much. Coming up after the break, mr. Bling bling is back. After being the first president to lose reelection in 30 years, could Nicolas Sarkozy be heading back for a stint . Were live in paris finding out more. You can bring back a lot of things from a trip around the world. But you cant always bring back customer data. Because many customers dont like it when their data moves around. Can i go now . If youre going to do business globally, you need a cloud that can keep your data where it needs to be. Today, theres a new way to work and its made with ibm. Former french president Nicolas Sarkozy could be heading back to the palace after being elected head to the opposition ump party. He gained 63. 5 of the vote, well ahead of his nearest rival. The question is will he become president in 2017 . Theres still a long way to go for sarkozy, even if he was comfortably elected ahead of the conservative party this weekend with almost 65 of the vote. Its not the landslide victory that sarkozy was expecting at this election. It show theres is still a significant number of people at the ump party opposed to sarkozy. And that theres a long way to go if he wants to run for the next president ial election. The main problem is energy pay. The former french Prime Minister didnt run for the presidency of the ump party but wants to run for the next president ial election. According to recent survey, only 23 of french people want sarkozy to gain political influence, compared with 57 for another. So the socialist president could be defeated if he runs in 2017. The second thing for sarkozy is the french justice. Sarkozy could face legal actions on the former Political Campaign in 2012. If convicted, guilty of course for sarkozy, the race for the palace would be seriously compromised. For now, its a victory, a gain back in the Political Landscape in france. It promises to modernize the ump Political Party and restore its financial situation. I heard wilfred talking about the bling bling president before the commercial break. Were not in 2007 anymore, im sure sarkozy wants to show Something Else other than the bling bling politician he used to be. He claims everywhere he has changed. Now well see if he really changed a lot. Well see what he does with the ump Political Party. Thank you very much. Now, thousands of pro democracy protesters in hong kong clashed with police on monday morning forcing the temporary closure of the governments headquarters. Our next guest chairs the Foreign Affairs committee in british parliament, part of the role is to criticize the one Country Two Party system. Joining us now on the phone is sir richard ottoway. Thank you very much for joining us this morning, sir richard. I noted from the handover agreement between the british and chinese it says candidates must be selected by a broadly representative nominating committee. If china is now ignoring that agreement, do the british have a right to get involved . Unfortunately theres no arbitration clause in the joint declaration. And, so, all we can do is note the direction of travel of china here. The important thing to remember is china is a member of the g20. They are paid up members of the international community. This is not sort of behavior that we expect from g20 partners. And i think that just taking note of these decisions gives us some idea how we should behave when it comes to future negotiations. Do you think the decision to block future mps will heighten tensions between british authorities and chinese officials . It doesnt help. We just got Anglo Chinese relations back on track. A couple years ago the Prime Minister met the dalai lama, that caused a bit of a spat. Since then weve had a fairly good direction or travel or trajectory. I think this now is a setback. And im im pressing very much the British Government over here to be more forthcoming in their response to this development. Sir richard what is your view on how china should act on this particular issue moving forward . Should it give way to some of the protests and lead to more democratic elections for the next hong kong leadership vote . Well, you put your finger on it when you mention the phrase just now about the broadly represented nominating committee. It needs to be broadly representative. Not packed out with beijing placement. And i think that could be the first step. What is needed here is compromise by both sides. A consensus. And what i would urge the protesters to do, their leaders s to do is sit down around the negotiating table with the hong kong and chinese authorities who are different, by the way, and try to thrash Something Else. So tell us whats next. We im asking the house of commons to have an emergency debate on the situation here. Either later today or more likely tomorrow. And and of course we watch the developments, you know, the activities of protesters in hong kong with growing interest. Sir richard, british relations have been improving in recent years, David Cameron has been keen to increase trade deals between the two countries. What is he telling you on this particular issue . I have not personally spoken to the Prime Minister about this over the last couple of days. The Foreign Office has expressed regret and disappointment. I think, you know, again, britain has to sit down around the table with the chinese and try to work out a way forward. We have huge trade links between the two countries. We have Prince William going over there in the new year. I mean, we have got to behave in a civilized way towards each other. The initiative by the Chinese Government to ban us going to hong kong doesnt help at all. Sir richard, thank you very much for joining us this morning. Sir richard ottoway. Now, moving on, latin american currencies have been under pressure from the fall in oil prices. On friday the mexican peso fell for the fifth day, and the british real grew. Joining us now is juan swatoro member of the executive group. The fall in the oil price has different effects on different economies. Brazil must be really suffering. Brazil already does not have economic regulators. It barely came out of recession with suspicious 0. 1 growth ahead of elections. Inflation of 6 . Was recently downgraded by s p, barely holding to Investment Grade. This Falling Oil Price makes things much worse. To remember, brazil discovered with very good news an 80 billion reserve of offshore oil in 2007. And went on one of the most aggressive and expansion programs, almost 220 billion by 2018. The problem is that all of this, off shore oil works 100, below 85 it really doesnt. Has a significant drop in oil prices changed your investment thesis when looking at south america . It doesnt affect everybody in the same way, but brazil is at risk with this big risk, big debt, could maybe lose Investment Grade on difficult situations. Venezuela at 65, i dont know how theyll make it. Argentina suffering low commodity export prices in general. So this very strong drop makes things very, very difficult for some latin american countries. Last time you came on you talked about the investment role that china is playing, but that could change since oil prices are down since 2014 . All investment programs and Government Programs that depend on oil are being reviewed. One interesting example is mexico. Mexico has a conservative policy of hedging oil. For example, around two months ago, mexico hedged their production around 80 per barrel. The ministry of finance of mexico probably did a trade thats making any hedge fund in london today jealous. The mexican peso has fallen significantly off the back of that. Lets talk about some other issues facing the mexican economy. One of which is corruption does that make you look at the country with a pinch of salt . Yeah. Today theres a problem of leadership credibility in mexico. Theres corruption scandal, the canceling of a billion 3 billion Railroad Project one week after discovering that the wifes house was owned by one of the participants in the consortium. Some months ago the killing of 43 students by Police Working with gang leaders. I think the presidency will need to recover some of the credibility by pushing on important reforms. One of them, the opening of the oil industry after 100 years of monopoly is necessary to start producing Production Growth in mexico. Vasquez won the president ial election in uruguay. Should investors be bullish on investing here . He was a new old president. He was president in 2005 and again in 2010. He has been the center left president in uruguay. He has a Simple Program lets sustain growth and be able to use this to reduce inequality overtime. Its a very predictable policy, predictable program that has been working for uruguay being one of the highest grossing in latin america. So we expect that to continue. Uruguay is also the worlds first state run marijuana marketplace. We expect marijuana to finally be legal in uruguay. It will be the first country to attempt Something Like this. Were looking forward to the results. Juan, thank you very much for joining us. Much appreciated. Now, early promotions and Online Shopping took a toll on brick and mortar sales over the black friday weekend. The National Retail federation says total sales fell 11 . Shoppers spent on average about 381 billion, thats a lot even though its down 6 from last year. Analysts say consumers may be feeling better about their financial situation so they dont need deals as much or didnt want to fight the crowds. U. S. Online sales rose 32 on thanksgiving and 26 on black friday. Driven by stronger deals. The National Retail federation says 40 of consumers shopped online or planned to shop by the end of the weekend. Now, the nrf projects 127 Million People will shop online today. Does that include wilfred . Not today. Cybermonday istoday. About 2. 5 billion is expected to be spent. Are you over sales shopping or were you out spending this weekend . Let us know. Join in on the conversation. Worldwide exchange, cnbc. Com. Tweet us. It comes a bit early. I like shopping as we get closer to christmas. You get more in that atmosphere. Thanksgiving is a massive u. S. Holiday but its never spurred me. The best deals are after thanks giving. I should be planning this better. I probably should get around to this today. Your true love wont have to get a second mortgage to buy you everything you want this christmas. Pnc is out with its annual christmas price index, which tracks the cost of everything in the christmas song. It will cost you 27,673 if you buy everything, up 1 from last year, the smallest increase since 2002. The cost of eight of the 12 items stay the same, six geese a laying. If you buy the partridge in the pear tree, do you buy the pear troe as well . I was hoping that you would sing that as you read it. Was i supposed to . I think so. Well have you read that. We look forward to that. In the red across the board. Ftse down and the stocks heavy rating in the index weighing on the white index. Germany down a quarter of a percent. France down 4. 6 . Italy down over 1 . The euro is roughly flat so far today, the dollar has weakened. It was stronger at the start of play but has come off recently. Sterling is up. 2 . Record territory despite the drop in oil. U. S. Futures are taking cues from europe. Were looking at the dow jones down. Nasdaq, by the way, only 5 away from making its alltime closing high. Its down five points. U. S. Markets are set up to snap their sixweek winning streak. We set you up with what to expect this week. Thats coming up next. Welcome to world wild exchange. Hope you all had a wonderful thanksgiving. Im seema mody. And im wilfred. Sending u. S. Futures into the red. Getting crushed is the price of gold as swiss voters reject a proposal to protect the Central Banks reserves. Early numbers indicate they did not spend as much as last year. Moodys downgrades the credit rating. Sending the yen on a roller coaster ride versus the dollar. And welcome. This is, of course, the first trading day for december, the last month of the year. People are coming back from thanksgiving, figuring out how to position their portfolios. The big move has really been in oil, down 30 since june of 2014. Energy stocks in bear market territory. If youre looking for losses thats really where its been. Absolutely. All prices weighing on markets. Of course, as youre saying its december, it gives us a chance to reflect on november. One of the biggest gainers in europe if you invested in italian tenure, you is would have made 13 . Weve seen across europe particularly last week also pushing into the u. S. Bond yield, more confusing. The outlook for the u. S. And europe is so starkly different. The big trend this year. It will continue into next year, what were going to discuss throughout the next hour. How theyre trading through the open today. Dow jones down and nasdaq, which hit a 2 1 2year high on friday is down a couple of points on premarket trade. Six weekly gains in the u. S. Markets, oil losing 10 in fridays trade. Big move in response to opec not cutting oil production. Take a look at the ftse index. Weak factory data is prompting talk of further action. It has largely come in disappointing. You can see markets reacting negatively to that. Trading down threetenths of a percent. Diving into markets, pmi data across the board, which has largely come in weaker than expected. Ftse 100 trading down 56 points. France and italy also showing significant losses, actually. Were looking at the italian markets down 1. 1 . Italys gdp came in. Another contraction growth for italy. What can he do to lift the economy and, of course, the labor market. Lets see what that means for the markets, seema. Particularly over the course of last week, italian tenure is just above 2 now. French tenure is below 1 , uk, below 2 . Germany,. 7 . Huge, huge moves in european bond markets for the fundamental economy but also the prospect of more easing from the ecb. But interestingly enough, that yield compression in europe has seen yield compression in the u. S. Where, of course, the outlook is very, very different. The u. S. Is not here at the moment. We have seen yields push below 2. 3 . Is that town to correlation with european and japanese bonds or is it because people are, in fact, more bairiearish than the highs might reflect . Basically flat, 1. 2464. 118. 4, weakening in the second half of asian trade. The dollar is soft by. 36 . Weaker data out of china this morning. The korgs between the chinese data and the dollar always very strong. U. S. Dollar against the ruble, now at the weakest level its been over five years, 52. 25. Commodities have been moving markets significantly over the last week or so. Crude is now down to 65. Brent is below 70. For weeks, weve been saying, will it push below 80, now its below 70 as well. Gold has bounced back a ll bit, up 1175 after the swiss referendum vote of no. Offsetting that move india has reacted on importing gold, settling things down there and silver is up 3 , 15. 88, having been down significantly earlier in trade. It has bounced back over the course of the last few minutes. Chief global strategist is joining us now. Michael, good to see you. With that move weve seen in u. S. Bond yields, why are bond yields continuing to compress at a time when theyre going higher . When you talked about the japanese and european yields going to very low levels. Effectively exports, yield compression into the United States as well. You know, certainly on a relative value here, stronger credit here in the u. S. And several country notice euro zone have higher yields. I call it sort of imported quantitative easing, in turn battling their disinflationary trends. To a degree one global bond market. So i think thats a very big factor here. I dont know whether you can necessarily look at the lower yields in the u. S. As an indictment on the u. S. Economy as much as it is sort of a reflection of sort of a global gdp slowdown and, of course, this inflationary environment continues into 2015, where do bond prices, bond yields head from here, michael . Thats a great question, nina. If i had to guess right now over the coming year, youre going to see u. S. Tenure yields range from 2 to 3 right now. There are a lot of good, important things happening to the u. S. I dont think were going to get some explosion in gdp around the corner in the u. S. I do think that sort of the steady trend towards, you know, sort of a 2. 5 , 3 gdp seems to be on track here, which would suggest something higher than current yields. Other hand you do have these Global Forces that we were just discussing sort of coming in there. And, you know, even as the fed has stopped its purchase, bond purchase program, youve seen the impact of this sort of imported qe here. Theres a lot of different forces coming to play here, yields and its a complicated framework you have to look at. And its not simply a judgment about the u. S. Economy and just where the bet is. Thats what make this is market so exciting. Stick with us. Well discuss the commodity market with you. Of course, thats been gaining a lot of attention over the past couple of weeks. Also, lets get you a rundown of what to watch this trading day. First trading day of december. Well be focusing on the november Manufacturing Index out at 10 00 am eastern. Activity is expected to be down slightly from october, but still well above 50, the level which indicate that is manufacturing is growing. New york fed president bill dudley and Stanley Fischer are speaking this afternoon, both after the close. Betting Retailer Mattress Firm and rv maker thor industries. Other top stories, early promotions and Online Shopping took a toll on brick and mortar stores. Total sales fell 11 to 50. 9 billion. Shoppers spent on average 383, down from last year. They may be feeling about their better financial situation so they dont need deals as much or want to fight the crowds. Rising 32 on thanksgiving and 26 on black friday, driven by stronger deals. National Retail Federation says 32 of consumers shopped online or plan to shop by the end of the weekend. Nrf projects 127 Million People will shop today, cyber monday, guys, down from 131 million last year. Consumers will spend just about 2. 5 billion today. We do want to hear from you on this. Are you over the sale shopping or were you out spending this weekend . You can tweet us at cnbc, twitter handle on the bottom of the screen. You did not take advantage of the deals, wilfred but i have to admit i certainly did. What was on the Shopping List . I got some boots because it rained so much here in london. Boots for you. What did you get for me . Oh, wilfred i am still trying to learn what you need. I feel like you have everything already. Gifts are always welcome on top of anything else. You just let me know when youre ready and its all wrapped and ill look forward to opening it. The elsa doll is doing well. Any gift is pretty good. There you go. Definitely got that coming from you. What else . Star wars figurene. Im a bit older than the gifts youre suggesting. Apart from food and wine, i buy that throughout the year. Liquor is always good. Now, moving on, spot gold is near a 4 1 2year low, swiss voters overwhelming rejected a proposal to force the National Bank to reserves of gold. Of course, the sharp move in oil and stronger dollar are also weighing on the price of both precious metals. Chief global strategist at wheeden co. Initially gold sold off but its bounced back and is up today. Looking forward into the next year, what are going to be the main drivers for the gold price . Are you bullish or bearish . I think gold prices right now are roughly near the fully loaded marginal class production. To get them down to 1,000 or so, you need a real structural shift downwards in demand. I just dont see that. Look, on the swiss vote, everyone knew people would be very surprised if that had passed. The fact that it even happened, that a developed economy with an historically very strong currency had this vote at all, i think, is a statement about the extent of central and concerns people have about the Central Bank Balance sheets over the broader term here. I think thats ultimately going to remind people that, you know, these monetary experiments are not without some risk down the road. And i also think that, you know, the continued physical buying out of the east, in countries like india, china and other ones are going to continue. So, i would say that, look, inflation data is not going to come in strong in the next 12 months but i think its hard to see it really go too much further south of here. Yeah, but michael i would expect yeah. Consumer demand out of china and india doesnt really help the price of gold move higher. At the end of the day its central bank policy. Well, you know, if you go back through certain key parts of the gold rally, over 2002, 2011, there was you know, you cannot underestimate the importance of the far east. Those are big economies that are historical historically on an official sector basis, very underweight gold there. And the retail component is very, very significant. You know, with respect to how gold moves, with respect to a feds move to expand its Balance Sheet and so forth, there certainly has been correlation there. But i think theres also been, you know, the and, look, weve had a strong dollar the last couple of years. And that may continue. Thats going to be a big headwind for gold. Right now im in the range bound camp here. I dont think its going to go further south. If the fed continues to not expand its Balance Sheet, i dont look at that as really a material headwind for gold. Absolutely. Of course, if we did get that yes vote from the swiss yesterday, they were estimating 13. 50 an ounce on gold. Of course, it was an overwhelming loly no vote. Rejection from the gold proposal. Well leave it there, chief global strategist at wheeden co. Thanks for your time. We have that cnbc story after the break. Welcome back. Lets give you some headlines. Crude prices continue to crumble, sending u. S. Futures and european shares into the red. Theien forced to a sevenyear low compared to the dollar before recovering. It could be a bleak black friday as consumers didnt open their wallets quite as wide this year. Cnbc sources have confirmed hundreds of glaxosmithkline employees in the states are ordered to clear their desks. Katherine boyle joins us in studio. It follows a major that glaxosmithkline has had to face. Essentially swapping some components of both businesses with novartis. And then back in october chief executive did flag that they were looking to make a billion worth of cost savings. Traditionally, by far, the largest part of the business, has suffered the past couple of years because there have been increased pricing pressures, insurers am the post obamacare world are looking to be quite aggressive on price negotiations. Really important business has suffered particularly from that. Its not that surprising, i suppose, that the u. S. Business should be tarkted in this of course, as we all know, pharmaceutical companies are all trying to target markets as well. There may be job cuts in other areas of the business, but the ones likely to be told to start this week are likely to be in the u. S. , yes. Thank you very much, katherine, for joining us. Definitely. Of course, still to come on the show, tis the season to be shopping. What should you get your little ones . We have the top toys coming up after this break. Science, technology, engineering and mathematics or stem is the big buzz word in the toy industry, according to our next guest. Some stem toys let kids build, program and control like the vex robotic starter kit that you can pick up for a hefty price tag of 399. Lets talk more about the toy expert at the toy insider. Lori, do you think these stem toys will be on the top of the Holiday Season Shopping List . Yeah, actually, i do. You know, its great for children to want to get involved in toys like this where they dont realize that theyre learning. And parents, of course, feel good about making purchases like that. Stem is not just about the classroom anymore. It has moved into our toys. A lot of that vex robotics you can pick up for as little as 79, 89. Some analysts were saying, lori, that the proliferation of the digital age, of course, has captured the attention of the small ones, the little ones. Do you think that could be a competitive threat to toys . Well, you know, Toy Companies are really figuring out how to take that technology, those wow factors, and put it into toys. You see that across the board with Companies Like lego, who has figured out how to take its called lego fusion. Kids are building but then theyre using technology to make those buildings come to life. So, theres some stem in there. Theres tech in there. You see the technology across lots of different categories. Theres a whole toys to life category that weve seen emerging. You see that with skylanders, disney infinity. Amebo has jumped into the game. Kids take physical toys and can bring them to life in video games. Theres lots of ways to use technology so that it works with toys, too. I like the sound of some of these toys we were just talking about. Surely toys dont have to be educational. What about the really fun ones . Whats top of the list when education and learning is completely thrown out . All right. For one thing, kids are always learning when theyre playing. Theyre learning how to share, theyre learning about neu nurturing. Top of the list this year is frozen. Its definitely a frozen christmas. Lots of great toys come from entertainment properties, tv, movie, video games. Frozen is leading the way, teenage mutant turtle the is leading the way. Doc mcstuffins, really the forerunner, frontrunner last year who is still the most popular doc in town. New properties, a new tv show that the kids love. Great toys for that area, too. Are boys and girls another category i was going to ask you if both boys and girls are showing interest in these stem toys. Yes, of course. Obviously, some of them like frozen, the dolls are geared more toward the girls. Girls and boys are loving olaf. Everybody loves the movie. Teenage mutant ninja turtles, yes, its geared more toward boys but plenty of girls are turtle fans, too. It is geared to everyone. One of the things that we are seeing, another big trend that boys and girls are loving is the diy, do it yourself, and the dyo, design your own trend this year. So now were not talking about education. Were talking about things that the boys and girls both enjoy. With the do it yourself, it usually is more about the younger kids, crayola has a great paint maker. When i talk about dyo or design your own its actually more for that difficult to buy tween child. So theyre really into designing their own toys. Theres a line called its my biz, geared toward the girls. They design their own line of tshirts or jewelry or cupcakes and then they actually learn how to market it and sell it. Those are also some big trends. Thank you so much for joining us. Toy insider. Seema, lori was saying that kids li learn to share. My brother and i learned how to fight. Which then teaches you basically skills of how to share. Sort of. Just about. Im jealous. Im an only child. I didnt have that interaction so much. I had cousins. Im hearing ahhs in the control room. Dont worry. I had people to play w i just didnt have my own siblings. Toys will be on the agenda later in the week. Well have scale electrics in the studio later in the week. Thats right. I certainly will be winning against seema on that. Game on, brother. All right. So, thanksgiving sales have slip this had year. Weve been asking you, are you shopping over the Holiday Weekend or were you spending time outside . Josh tweeting in, i did my shopping online. My wife went to the stores on black friday there. See, you should be taking cues from our viewers. Can you tweet us at cnbc weks. Our handle is on the bottom of the screen. Called in question as moodys cuts its rating on the island nation. More on the japan downgrade after the break. And a look at futures as we head into the break. S p 500, dow nasdaq, all arrows pointing to the down side. It could potentially be a negative start to the month of december. Its the last month of the year. Can you believe it, wilfred . Its nearly christmas. Im seema mody. And im wilfred frost. Sending u. S. Futures into the red. Also getting crushed is the price of gold as swiss voters reject a proposal to boost the countrys central bank reserves. Moodys downgrades japans credit rating, warning it might not be able to meet its fiscal targets, sending theien on a downward spiral. Computer network last week. Investigators are looking into whether north korea was responsibl responsible. Youre watching worldwide exchange, bringing you Business News from around the globe. And if youre just joining in, thanks so much for joining us. Hope you had a wonderful thanksgiving. It is the first trading day of december. Lets take a look at premarket trade on what we can expect in wall street trade. Dow jones industrial is trading lower in premarket trade. S p 500 down about nine points. Nasdaq, which, by the way, is about 5. 4 away from breaking its alltime closing high hit in march of 2000. The nasdaq right now trading lower in premarket trade. Keep in mind the dow, s p and the nasdaq just turned in six straight weeks of gains for the First Time Since november of 2013. If you take a look at the european markets to see how theyre trading, a couple of weeks other rebound thanks to commentary from mario dragi, helping to provide a lift to european stocks. Right now, given the discouraging pmi data we got out over the past couple of hours, we are seeing markets trade lower. Ftse 100 down about 51 points. The french markets also trading down just about half a percent or 23 points. Ftse mib, italian market, trading down around 1. 3 , triple digit decline for the italian markets after italys gdp came in worse than expected, contraction in the Third Quarter. Growth issues and challenges, still a major focal point for investors here. In the euro zone, commodity space, nimex crude right now trading at 65. 6 a barrel, big concern for investors. Energy stocks trading in burr market territory over 20 below its recent highs. Big question is, can markets continue to move higher despite the underperformance in Energy Stocks . In fact, anthony chen, managing director and chief economist at Jp Morgan Chase joins us. I have to ask you about that question. Markets continue to hit record highs. Can they continue to move higher, despite the under drls performance in Energy Stocks . Obviously, theres going to be a little bit of a temper tantrum. Obviously this is disconcerting. When you put all of this in perspective, Lower Energy Prices do, in fact, stimulate consumer activities. I think once we get over this and once Energy Prices start to stabilize, markets will be just fine. And, anthony, when we look at whether this will help the u. S. Consumer or not, i suppose the bigger factor to be looking at is employment numbers. And how are you taking those recent prints on that topic . The recent on unemployment has been encouraging. In the latest survey week coming in just a little bit higher. If you look at things like continuing claims, you look at the insured Unemployment Rate, all those things are telling you that the employment numbers will perhaps get even better. When we get the employment report on friday, i think we are poised for a lower Unemployment Rate, say 5. 7 . A nonpayroll number, 210,000. Probably not as strong as the last number. But things are, in fact, moving nicely along. Average hourly earnings, still discouraging. Well still see a weaker number. Way too low for janet yellin. Labor Participation Rate is a problem people are saying. The more you chip away at that Unemployment Rate even with the issues surrounding the Participation Rate, the labor market is going to get tighter. Wages will start picking up. Guess what, thats going to lead to much faster consumer spendin spending. Moodys has downgraded japan and put outlook at stable. Ratings agency says the cut is down to uncertainty about japans ability to cut fiscal deficit, effectiveness of growth measures. The yen hit a sevenyear low. Since then, it has recovered. Would you put money into japan at this point . We havent seen abenomics work. Who says it will work in the next 16 months . Seema, remember, you dont want to put money to work in an equity market when everything is perfect. Things are still dicey. You did see Capital Expenditures number, very encouraging, which tells me the Third Quarter number in japan, gdp declining, that number will be revised higher. I would not even be shocked if we come very, very close to being on change on that growth rate. Sales tax has been delayed in japan. Were going to get additional stimulus. Abe and kuroda are in for much quantitative easing. Moving forward next year we will see, in fact, Economic Growth faster. In the Fourth Quarter for japan, i would not be surprised if the Growth Numbers are closer to 1. 5 to 2 after that disappointment in the Third Quarter. That means the equity market will move forward. What youve seen this year is a nice rebound in the japanese equity market in anticipation of all of this. Now with the prospects for Economic Growth getting even better, absolutely i would put money to work in japan. In doing that, would you hedge the yen . Surely the yen can only move down. No question. When you have this aggressive quantitative easing, that will weaken the yen. Its already happened and more is going to come. Well continue to see that yen getting lower and lower and lower. Yes, it would not be a bad idea to hedge the yen. As all this quantitative easing occurs and the market goes up and the yen goes lower, you want to be able to capture the upside in the equity market and not getting hurt by the weaker yen which will undoubtedly happen. Chief economist at Jp Morgan Chase. All right. Some Corporate News to get you now. This could be the plot to the next big hollywood blockbuster, major movie studio is hacked and clues may point to a culprit in the far east. Landen dowdy joins us now with the latest. Good morning to you. Sony picture sincere bringing in a Forensics Team to try to determine the cause of a massive cyber attack that took down the movie studios Computer Network last week. Hiring a unit of fire eye to repair the damage and email systems are expected to be back online today. Faa is also looking into the incident. Reports say screens displayed a red skull and the phrase hacked by gop which may stand for guardians of peace. That group threatened to release confidential emails and other data and posted pictures of the studios top executives online. Sony was looking into whether hackers working on behalf of north korea were behind the attack for retribution of the backing of the film the interview which comes out on christmas day, starring seth rogen and james franco. North korea has described it as an act of war. Annie starring jamie foxx, and cameron diaz and fury starring brad pitt, which has been downloaded 900,000 times in the past week. Its rare for pirates to get their hands on movies before theyre released in theaters. Downloaded about 2 million times, piracy was blamed for the movies Disappointing Box Office numbers. Playstation Gaming Network was hit by an attack that impacted 100 million users accounts for close to a month. Back to you, seema. Landon, thank you very much. Hope you had a great thanksgiving. Accounted for half of the ten funds of the biggest outflows this year. The funds have lost more than 100 billion as rivals take market share from the worlds biggest bond manager amid upheaval. Darren wilson will not get a severance package as part of his resignation from the police force. Wilson shot Michael Brown this summer, sparking violent protests when a grand jury decided last week not to charge him, wilsons lawyer says he stepped down because of the threats made against other officers and police department. President obama is expected to discuss the situation in ferguson today with his cabinet and Law Enforcement officials. Coming up, point, click, shop. Biggest Online Shopping day of the year. Are consumers in buying mood . Were live at a Fulfillment Center for more than 300 e commerce websites after this break. Take a look at gold. Swiss voters rejected a move that analysts say could have sparked a gold rush as the Swiss National bank would have had to buy 1500 met rick tons of gold over the span of five years. In response to the swiss vote, gold prices did move lower, now down just about 2. 4 for the year. Keep in mind, they were estimating an 18 rise in gold shares if the yes vote did win. Wilfred . Seema, how much do you like gold . The gold prices come down. Its looking pretty cheap. Christmas is coming up. I dont know what to get you really. Just stick to diamonds and rubies, wilfred. Well, fat chance of that happening. Early results on the black friday shopping weekend are in. Its bit of a glass half full, glass half empty situation for the u. S. Retailers. Theyre not about to sound the alarm as they get set for the next round of sales on cyber monday. Joining us from ohio, courtney reagan, with whats ahead. Thank you so much for joining us early. Yes, absolutely, wil. Its nice to be here with you. Worry live in ohio and can officially say that the Holiday Season has begun for retailers. National Retail Federation says that total sales for the black friday weekend, that does includen online and in store are down 11 . Shopper traffic, down 5 . This is compared to last year. The Holiday Season does roll on, though. Today, its cyber monday here in the u. S. National Retail Federation says 126 million customers will expected to shop online. That is, though, also down from last years expectations. Black friday week was a stellar one here at fanatics. Largest Distribution Center here in the United States. The Largest Online retailer says that sales were up 25 for the week. And those orders are being filled and more are coming in today as it is expected that today will be fanatics biggest sales day of the year with an expected 700,000 orders. Thats ten times the volume of an average day. Now, fanatics powered the ecommerce websites of more than 300 websites for leagues like the nfl, ncaa, retailers like jcpenney. One of the team leaders told us theres a lot of pressure to get the job done right on cyber monday. Its kind of a mixed bag of emotions. A little excitement. Trying to see how much you get and a chance to make sure we want to get that order, you know, guaranteed. That threeday ship to the customers. Were under the gun to get that done. Under the gun but around the clock, this distribution Fulfillment Center will be open for 22 1 2 hours during the Holiday Season, to make sure that they can fulfill all those orders that are coming n its expected to be a strong season here at fanatics. Back to you, wil and seema. Black friday sales have come in weaker than expected. Is that because more people are expected to shop today on cyber monday . You know, seema, its a little hard to tell exactly why we saw what we saw over the weekend. It could be one of several factors. It could be that some folks shopped early. It could be some folks are planning to shop late. It could be a weaker season than expected but it could also be were not quite sure how its going to shake out. Theres a lot of thought as to what exactly happened over the past weekend. Well see, maybe well get more clarity after we see the activity online today. Courtney reagan, thank you so much. As we were telling you, thanksgiving sales have slipped this year. Weve been asking you for the past two hours, are you over sales shopping or were you out spending this weekend . Sharon emailed us, i was in three Walmart Stores over the weekend. Let me tell you, they were packed with shoppers. Thank goodness for Online Shopping. There wasnt any more room for them inside the store. Some people partaking in the festivities, annual tradition of shopping the day after thanksgiving, wilfred. Email us worldwide cnbc. Com and cnbcwex. Very important we get on the ground to get a real feel of it. Absolutely. Sticking with the theme, your true love wont have to get a second mortgage to buy you everything you want this christmas. Pnc is out with its annual christmas price index, which tracks the cost of every item in the 12 days of christmas song. It will cost you 27,673 if you buy everything. Thats up 1 from last year. Smallest increase actually since 2002. The cost of eight of the 12 items stayed the same. The six geese a laying went up a whopping 71 and the partridge in a pear tree, 33 . Although its still a relative bargain at just 20. That was fun to watch. Indeed. Im not quite sure how they price all those items but a nice light hearted story anyway. Yes. Before we go to break, lets remind you of the main headlines. Crude prices continue to crumble. Moodys cuts its rating on japan, yen forced to a sevenyear low versus the dlr before then recovering. And Sony Pictures trying to get to the bottom of a massive cyber attack that took down its networks last week. Welcome back. European markets in the red as can you see. The ftse 100 is down. Germany is down. 36 . Italy, 1. 4 . It could be a bit of a bounce back. Germany was um around 7 and were now into a new month. A bit of reshuffling. Likely, its correlation to the oil prices which are down goen day. Its weighing on the Energy Stocks. Brent is below 74. Lets look at the Energy Stocks. That oil price is weighing on. Some significant moves. Energy stocks are really suffering. Will they way on u. S. Stocks as well . The price of oil down 30 since june of 2014. The energy sector, the worst performing sector. Theyre 20 below the recent highs. The dow right now indicating a moving lower, down just about 60 points in premarket trade. The nasdaq is lower in premarket. Lets get Market Reaction, what to expect. This is the first trading day of december. Lets bring in who are we bringing in . President of trader audio. Com. Thank you for joining us. In the month of no, consumer stocks rebounded and, in fact, Consumer Discretionary and Consumer Staples gained 5 . Can the rally continue in december . The broader based index right now really continues to charge higher. I mean were off the all time highs here as we stand waiting for the open this morning. For the most part, we have yet to rerejection. Nasdaq making all time highs last week. And again and Still Holding above that 4300 level on the nasdaq right now. The one fly in the oinltment is that russell. Were waiting to see if we can get the russell above 1200. Were holding bid up on all time highs and have yet to see rejection. If the economy is strengthening, then the Small Cap Index is compromise of domestically oriented names, that index should outperform. You would think so. One thing that ive been talking to a lot of our clients about is how very long, prolonged kind of sustained type rallies have very specific characteristics associated with them and the rally weve been seeing in the s p and nasdaq and dow is no different, certainly one of characteristics that weve seen this year has been limited participation on behalf of the russell. And closing out the year right now, that stl continues to be the case. But one thing you have to be aware of, very similar in terms of acceptance or rejection, right now were accepting the all time highs. But the other thing to be very well aware of is even without the participation again of the russell, the other broader based markets, nasdaq, russell and dow have been able to continue to enjoy the all time highs again as even as recent as last week. So Economic Conditions remain very much the same as they have been throughout the whole time that weve seen this rally. Again, the only one thats not participating is the russell. But that is very characteristic of this rally. A lot of traders started to accept that and anticipate that as being part of it even though the dow, s p 500 and nasdaq continues to trade higher. We have seen new highs in the markets. But its been small gauins. And at the same time weve seen bond buying. Weve seen yield compression. Does that suggest that theres a bit of barishness out there . Maybe well see a stock Market Correction . Well, again, the maybes and is there and there could bes arent really something that we can trade off of. So personally what i like to look for is where the market establishes value and we continue to establish value to the upside. We have really to take any out to the down side. I can sit about and talk about what could and might happen. What is more important is what is happening. Yes, we are seeing a little bit of flight to quality, if you will, or flight to into the bond market. But for the most part, still, higher highs in stocks and even headed into a very eagerly and much awitted, anticipated jobs data number on friday. Ben, thank you very much for joining us. President of tradersaudio. Com. Thats it for todays show. Next up is squawk box. Good morning, welcome to squawk box. Becky is oit sick this morning. Get better, becky. We have a lot of stories to talk about. We have three that were watching today. Big one, could opec bankrupt shell cruiser here at home . Meantime, reuters reporting the permits for new wells dropped 15 across 12 major shale operations for months last month. This all coming as Oil Prices Continue to fall in the decision to drop outputs. Prices have dropped for five months and the longest losing strike since the financial crisis. Were going to talk about an oil trader in a couple minutes. The consumer is also in focus this