Transcripts For CNBC Worldwide Exchange 20150129 : vimarsana

Its another big day today of u. S. Earnings. Alibaba and ford all report before the market open. All eyes will be on google and amazon. Of course people are still talking about the fed press release from yesterday. The Federal Reserve not showing its hand that its wavering over whether to hike rates this year. In its policy statement the fed says it will still be patient. That word patient is still there in raising rates and is upbeat on the u. S. Economy setting solid growth and strong job gains. The fed says that while pressures are holding down inflation, mainly oil prices those are intensifying. Its optimistic prices will move back toward its 2 target. Wilfred . Thanks. Lets look in in the markets and were in the red today and really its been risk off sentiment thats transferred through different time zones and no particular region has been able to buck that trend over the last 48 hours. You can see the stoxx 600 down. 7 and its been a really steady decline throughout the course of the day having opened slightly less than the. 7 were now down at the moment. Lets look in at the individual markets and see where that is finding itself. The ftse 100 is down 1 . Shell performing badly after it is focussing on financial discipline and that dragged heavy stocks down. Germany down. 86 and unemployment number coming at 6. 5 this morning in line with expectations. France. 6 . Of course its been a volatile couple of sessions for russia. Lets look in in bonds. An interesting set of data to look at in particular the u. S. Where we did see bond buying following the fed statement. There was a little bit of everything mt. Fed statement from yesterday. Focus on the domestic economy being strong it was accompanied with risk off sentiment yesterday. Seeing bond buying pushing the tenure to 1. 74 . Germany around. 34 and thats similar to where its been since the ecb meeting. No further yield compression over the last couple of days. Lets have a look in at greece because bonds have been moving in the opposite direction. Look at the ten year which moved as much as 1 from trough to peek yesterday. Now at 10. 9 but in particular lets focus on the shorter end of the curve. The five year 14. 3 is up. About 2 today and the three year at 18 is up close to 4 today. So the short end of the curve going sharply higher. Of course fears of default on the short end because of the new government. So 18 on the three year. Incredibly high yields there. Lets look what did the u. S. Dollar do yesterday . It didnt do that much. Much more muted than the bond market move and equity market move and as we look at currencies today its more of the same. The story of 2015 being the broader u. S. Dollar index continuing like it had done last year. Taking off a little bit of the gains of the last week or so but that gain has been more differentiated. The yen, for example, 117. 7 away from those lows of 121 we saw last year. Quick look at commodities, sell off and oil prices yesterday. Today the move more muted. Wti 44. 4 and brent 48. 6. Lets get in and have a look at markets in asia and sri is standing by as ever. Over to you. The asian markets stumbling here and wrong footed as many were by the tilt in the fed statement overnight. The biggest one day loss for the nikkei in about two weeks down by 1 . I wanted to talk about the australian marking because its bucking the negative trend across the rest of the region. Up very slightly. Aussie dollar got smoked today at as 5. 5 year low. The big question in the markets around here is whether the reserve bank of australia, next week when they review policy is going to be the latest entrance into the currency wars. Theres a lot of speculation in the markets that they may kot commit and cut rates. Thats going to send the currency down even further. Thats one of the reasons we saw the market higher. Investors chasing after the high yield in anticipation for easier policy. Its not a foregone conclusion though. It seems to be pricing in the possibility of the rate cut. Thats the big question. Is the rba next week going to be the latest one thats going to join this devaluation party. Thank you for that. Coming up on the show as eu Foreign Ministers hold an emergency meeting over russia we cross over to moscow where jeff is looking at the impact of sanctions on the economy. And out with the old, in with the new, mcdonalds is cooking up a new recipe for success with a new ceo at the helm. Plus swedish banking giant misses earnings forecast. We speak to the cfo straight after the break. Welcome back. Cnbc learned several large drug makers received a mysterious invitation to a meeting at the white house on friday. They have been asked to send their top researchers to the event. More detailed are expected to be shared on president obamas plans for a Precision Medicine proposal that he mentioned in the state of the Union Address last week. It would boost research to help companies identify and treat diseases based on dna. Health stocks were among the best performers in 2014. A year that saw 1. 25 billion pounds raised in london. The highest amount since the financial crisis. Lets get to seema joining us for the j. P. Morgan health care in london. Thats right. Healthcare has been profitable sector for investors but the other point is better than expected earnings and shared buy backs. Theres a lot of reasons investors are staying positive on the sector but where are we seeing the drug innovation these days in 2015. Will we see more trends in the u. S. Versus europe. To learn more about the European Health care market and some of the Success Stories im joined by the ceo of a company that did go public in the u. K. Last year. You raised about 200 million pounds. Were joined by steve harris. A pleasure to have you on. Thank you. What i find so interesting about your business is rather than focussing on a rare disease that impacts 4. 6 of the population, youre addressing a large number. Allergies. But some would say this is a crowded market. I can go to the supermarket and find many different medicines that treat allergies. What is your edge . The medicines in the super market are symptomatic relief. They make you feel better on the day but they dont really do the job for a large number of sufferers. Those moderate to severe sufferers that really cant function properly. What were trying to do is change your immune system so it doesnt react to these alabama letter generals. We want your immune system to change and we act like someone who is not allergic because these are things that are harmless. Your body should not be reacting to. Thats what we are trying to achieve. You have a couple of different areas. Different allergies youre trying to target. One is cat alabama letter squis. How many people out there are allergic to cats . Theres a huge number. There are 13 Million People in the u. S. Alone. Its about the same in europe that are moderately to severely allergic to cats and its a role problem for their life. They walk into a room and explode in symptoms. They cant function. Often theyre in a house with a cat and they cant do anything about it because maybe the wifes cat or husbands cat and they dont want to get rid of it. It causes a lot of problems. You sit next to a person on the bus that has a cat, you explode into symptoms. If people want to treat themselves or their children, you can imagine going into a Childrens Party they cant go. So it has a big impact on their life. This is all about trying to keep the working, functional population really well. As opposed to the Rare Diseases when it has the biggest impact on productive at work than any other disease. Allergies is a major problem for the economy. This cat allergy drug youre working on when will it hit the market . And what will it be priced at . Were in the last staging of clinical testing. Its a long Clinical Trial because were looking for longterm benefits. We are looking one year later to see a treatment effect. So its not this on going treatment. So Clinical Trial will report out in about a years time. We then have to file with the regulators and the regulators simp take a farther year. Its a slow and drawn out process but it will be interesting to see howell that allergy medicine now. Steve harris thank you for your time. Good luck. Wilfred, back to you. Seema thank you very much. The cofounder and chief investment strategist at absolute strategy research. A quick question on the health area sector youre positive because you think its a defensive sector but is defensive still the right word. You have to look at the things driving it. The leading indicators are rolling down. Historically thats where health care does well. Secondly in a yield starved market youre still looking at very defensive yields. 3. 3 that gives you a very nice lift over those you were talking about over there and finally in a muted Economic Cycle things like bio tech can go to the boone because you are getting such a big dynamic coming from the possibility of it taking off elsewhere. You have a few factors here driving that and well be back with other calls in about five minutes. Theyre rallying on a plan to cut risk rated assets by 20 . The move is designed to increase its capital buffer without having to raise Additional Capital in the market. Rallying around 11 on todays trade. The plan will impact but there were no plans to sell its subsidiary in the country. The group also said that the russian downgrade would not impact its risk calculation. Now sebs 4th quarter operating profit missed analyst expectations due to low trading and hedging incomes. They also raised dividends but less than forecast if we look today. You can see its sharply lower. Its down about 4 or 5 . Well have a look at that share price in a couple of seconds. Joining us on the phone from stockholm is cfo of seb. What do you make of the latest results . Clearly the market is disappointed and when you look at it in comparison to another bank with very good results and bigger than expected Dividend Increase yesterday. No, i think we have come out with a fairly strong result. We achieve 20 billion of operating profit which is something we set out to do in 2015. We reached hah target a year early. We should be pleased with that. As you point out, trading income has been difficult in q4. Low Interest Rates. Its hitting the fixed income trading and the income as well. So thats the major contributor to a little bit lower incoming in q4. Well clearly, whether or not the results perhaps look good on the face of it the markets not taking it well. Its down. 35 . Lets just talk about the current Interest Rate environment and the shape of the yield curve ch how much. How much is that impacting your business . Can you turn it around more meaningfully while the yield curve is shaped like it is . Its putting pressure on the whole Banking Sector but if we look back the Net Interest Margin in seb has been very stable all the time. So weve been able to up to this point were able to compensate on the landing side for the falling margins on deposits. I think were able to compensate in a good way. The income is up. So you know diversification has been good until now but interest sensitivity is greater at these levels. Its about 3 billion for percentage point of change on annualized basis which is a big number. Well have to keep at it and we have been able to compensate. Thats the plan. Lets move on and talk about your exposure to the baltic country which is is a meaningful part of your break down. Has that been widely effected by the ukrainerussia crisis . No its still not a big part of the group but no it hasnt really effected it. The Baltic Division is doing well. Its producing a profitability of 17. 5 which is and i think stability and the innovations in the baltics mean they compensate for the difficulties there in a very good way. So i think we feel well relaxed is the long word but we feel comfortable with the baltic business. Thank you very much for that. The ceo of seb. Lets bring the discussion back more broadly to wider markets. Does that pressure on countries like sweden increase from here once the ecb acted . Are the banks going to be forced to follow in a similar suit . Hopefully you dont see that cascade. The more interesting thing for me was hearing about the bank sector. I think one of the problems that youve got from the ecb qe is the flattening yield curve. This is a bond focus repurchase program. Youre going to get bond sensitive plays like the pharma sector doing well. But banks the lesson from japan is when you do bond finance repurchase it isnt actually the banks dont do particularly well. You havent really incentivized incentivized them to lend aggressively. Final very quick question outside of health care whats the stop sector pick . Its going to be a combination of the Foreign Exchange related, foreign Sales Sectors that will do well. Things like autos and industrials. And then its going to be some of the yield plays like pharma and then youre going to get tech as well. Thank you for joining us this morning. Much appreciate it. Chief investment strategist at absolute strategy research. Still to come on the show well cross to moscow as Foreign Ministers debate fresh sanctions on russia. Jeff joins us right after the break. Youre watching Worldwide Exchange. Bringing you Business News from around the globe. Europeans markets in the red amid a renewed sell off in oil and gas stocks. This as shell announces its slashing spending by 15 billion over the next three years. The slide in oil adding to pressure on the rouble as eu Foreign Ministers prepare fresh sanctions on russia amid descent from greece and germany. Deutsche bank with surprise profit in the Fourth Quarter. Greek banking stocks with losses after hitting a record low but government borrowing costs rise sharply as they turn their backs on commitments. Good morning. Lets get a check on european markets in the red. The xetra dax down. 7 . It fell to a record low in january. That was in line with expectations but what youre seeing on these markets earnings news we just told you about shell in the headlines that is bucking the trend in germany but still is the fed meeting from yesterday. When janet yellen sounded bullish on the u. S. Economy, the markets are pushing that first Interest Rate hike further out but still this is a question very much on investors minds. Youre seeing that play out again in this session over here in europe. So youre seeing it underwater. Indeed lets look at bonds. That fed statement yesterday was accompanied by general risk off sentiment and u. S. Bonds going up yields going down 1. 75 . Thats where they have been since the meeting last week moving in the other direction of course greek yields. 11. 3 were currently looking at on the tenure. Thats another big move from where it closed yesterday. Five years now at 14. 6 up the best part of 3 today and the three year is up 4 today at 18. 1 so the short end of the greek curve moving very sharply. Fears of course on a debt default following the election of the government. The u. S. Dollar moves following the fed meeting yesterday. Slightly muted. Not too much happening there but as you can see the biggest mover today is the dollar up against the ruble by the best part of 1. 5 . Well prorussian rebels have accused the Ukrainian Army of shelling in the region. Fighting intensifies with rebels on the brink of taking over a strategic railway town. Russian foreign minister warned military action will lead to a inevitable escalation of conflict. Meanwhile the crisis in Eastern Ukraine is taking a toll on russias state run gas company. The group posted a 62 drop in profits siting volatility but it was hit by lack of deliveries to customers in ukraine. This as eu Foreign Ministers prepare to meet in brussels. Greeces new Energy Minister says theyre against further penalties on moscow. He said the government had not been consulted and added we have no differences with russia or the russian people. Well spokesman for European Council president donald tesk responded to the claims saying all eu governments had been consulted. Ministers are set to extend current sanctions by six months and add new names to the list of russians impacted. Not all parties are convinced. Theyre saying the eu should not rush with new sanctions. Jeff has been in moscow reporting for us. What do you think . Are the sanctions actually going to get through . Theres so much back and forth at this point. There is a little window of opportunity here for the russians to do something that would change their story because even if sanctions are green lighted at this Foreign Ministers meeting they wont really get signed off until the middle of february and they wouldnt be imposed until march. So there is a process here where if the russians perhaps were perceived to be deescalating in Eastern Ukraine all could persuade other elements within the Decision Making group this wasnt the time to move forward then maybe they could be put off. Clearly the fact that now the new greek government is saying we need to be consulted and were not necessarily going to sign off on new sanctions that brought a new element into this story. Saying that maybe this is not the kind to increase the pressure on russia. Thats a more measured announcement that we have seen for some time from european leaders leaders. We do have an interesting 48 hours for the russian economy. Theres a question on where we go on Interest Rates after the shock hike we saw at the end of last year by the central bank trying to defend the rouble. We might see a dramatic cut in rates to ease some of the pressure on the economy. But well get to that presently. All of that of course is adding pressure on russian businesses and Federal Reserve<\/a> not showing its hand that its wavering over whether to hike rates this year. In its policy statement the fed says it will still be patient. That word patient is still there in raising rates and is upbeat on the u. S. Economy setting solid growth and strong job gains. The fed says that while pressures are holding down inflation, mainly oil prices those are intensifying. Its optimistic prices will move back toward its 2 target. Wilfred . Thanks. Lets look in in the markets and were in the red today and really its been risk off sentiment thats transferred through different time zones and no particular region has been able to buck that trend over the last 48 hours. You can see the stoxx 600 down. 7 and its been a really steady decline throughout the course of the day having opened slightly less than the. 7 were now down at the moment. Lets look in at the individual markets and see where that is finding itself. The ftse 100 is down 1 . Shell performing badly after it is focussing on financial discipline and that dragged heavy stocks down. Germany down. 86 and unemployment number coming at 6. 5 this morning in line with expectations. France. 6 . Of course its been a volatile couple of sessions for russia. Lets look in in bonds. An interesting set of data to look at in particular the u. S. Where we did see bond buying following the fed statement. There was a little bit of everything mt. Fed statement from yesterday. Focus on the domestic economy being strong it was accompanied with risk off sentiment yesterday. Seeing bond buying pushing the tenure to 1. 74 . Germany around. 34 and thats similar to where its been since the ecb meeting. No further yield compression over the last couple of days. Lets have a look in at greece because bonds have been moving in the opposite direction. Look at the ten year which moved as much as 1 from trough to peek yesterday. Now at 10. 9 but in particular lets focus on the shorter end of the curve. The five year 14. 3 is up. About 2 today and the three year at 18 is up close to 4 today. So the short end of the curve going sharply higher. Of course fears of default on the short end because of the new government. So 18 on the three year. Incredibly high yields there. Lets look what did the u. S. Dollar do yesterday . It didnt do that much. Much more muted than the bond market move and equity market move and as we look at currencies today its more of the same. The story of 2015 being the broader u. S. Dollar index continuing like it had done last year. Taking off a little bit of the gains of the last week or so but that gain has been more differentiated. The yen, for example, 117. 7 away from those lows of 121 we saw last year. Quick look at commodities, sell off and oil prices yesterday. Today the move more muted. Wti 44. 4 and brent 48. 6. Lets get in and have a look at markets in asia and sri is standing by as ever. Over to you. The asian markets stumbling here and wrong footed as many were by the tilt in the fed statement overnight. The biggest one day loss for the nikkei in about two weeks down by 1 . I wanted to talk about the australian marking because its bucking the negative trend across the rest of the region. Up very slightly. Aussie dollar got smoked today at as 5. 5 year low. The big question in the markets around here is whether the reserve bank of australia, next week when they review policy is going to be the latest entrance into the currency wars. Theres a lot of speculation in the markets that they may kot commit and cut rates. Thats going to send the currency down even further. Thats one of the reasons we saw the market higher. Investors chasing after the high yield in anticipation for easier policy. Its not a foregone conclusion though. It seems to be pricing in the possibility of the rate cut. Thats the big question. Is the rba next week going to be the latest one thats going to join this devaluation party. Thank you for that. Coming up on the show as eu Foreign Ministers<\/a> hold an emergency meeting over russia we cross over to moscow where jeff is looking at the impact of sanctions on the economy. And out with the old, in with the new, mcdonalds is cooking up a new recipe for success with a new ceo at the helm. Plus swedish banking giant misses earnings forecast. We speak to the cfo straight after the break. Welcome back. Cnbc learned several large drug makers received a mysterious invitation to a meeting at the white house on friday. They have been asked to send their top researchers to the event. More detailed are expected to be shared on president obamas plans for a Precision Medicine<\/a> proposal that he mentioned in the state of the Union Address<\/a> last week. It would boost research to help companies identify and treat diseases based on dna. Health stocks were among the best performers in 2014. A year that saw 1. 25 billion pounds raised in london. The highest amount since the financial crisis. Lets get to seema joining us for the j. P. Morgan health care in london. Thats right. Healthcare has been profitable sector for investors but the other point is better than expected earnings and shared buy backs. Theres a lot of reasons investors are staying positive on the sector but where are we seeing the drug innovation these days in 2015. Will we see more trends in the u. S. Versus europe. To learn more about the European Health<\/a> care market and some of the Success Stories<\/a> im joined by the ceo of a company that did go public in the u. K. Last year. You raised about 200 million pounds. Were joined by steve harris. A pleasure to have you on. Thank you. What i find so interesting about your business is rather than focussing on a rare disease that impacts 4. 6 of the population, youre addressing a large number. Allergies. But some would say this is a crowded market. I can go to the supermarket and find many different medicines that treat allergies. What is your edge . The medicines in the super market are symptomatic relief. They make you feel better on the day but they dont really do the job for a large number of sufferers. Those moderate to severe sufferers that really cant function properly. What were trying to do is change your immune system so it doesnt react to these alabama letter generals. We want your immune system to change and we act like someone who is not allergic because these are things that are harmless. Your body should not be reacting to. Thats what we are trying to achieve. You have a couple of different areas. Different allergies youre trying to target. One is cat alabama letter squis. How many people out there are allergic to cats . Theres a huge number. There are 13 Million People<\/a> in the u. S. Alone. Its about the same in europe that are moderately to severely allergic to cats and its a role problem for their life. They walk into a room and explode in symptoms. They cant function. Often theyre in a house with a cat and they cant do anything about it because maybe the wifes cat or husbands cat and they dont want to get rid of it. It causes a lot of problems. You sit next to a person on the bus that has a cat, you explode into symptoms. If people want to treat themselves or their children, you can imagine going into a Childrens Party<\/a> they cant go. So it has a big impact on their life. This is all about trying to keep the working, functional population really well. As opposed to the Rare Diseases<\/a> when it has the biggest impact on productive at work than any other disease. Allergies is a major problem for the economy. This cat allergy drug youre working on when will it hit the market . And what will it be priced at . Were in the last staging of clinical testing. Its a long Clinical Trial<\/a> because were looking for longterm benefits. We are looking one year later to see a treatment effect. So its not this on going treatment. So Clinical Trial<\/a> will report out in about a years time. We then have to file with the regulators and the regulators simp take a farther year. Its a slow and drawn out process but it will be interesting to see howell that allergy medicine now. Steve harris thank you for your time. Good luck. Wilfred, back to you. Seema thank you very much. The cofounder and chief investment strategist at absolute strategy research. A quick question on the health area sector youre positive because you think its a defensive sector but is defensive still the right word. You have to look at the things driving it. The leading indicators are rolling down. Historically thats where health care does well. Secondly in a yield starved market youre still looking at very defensive yields. 3. 3 that gives you a very nice lift over those you were talking about over there and finally in a muted Economic Cycle<\/a> things like bio tech can go to the boone because you are getting such a big dynamic coming from the possibility of it taking off elsewhere. You have a few factors here driving that and well be back with other calls in about five minutes. Theyre rallying on a plan to cut risk rated assets by 20 . The move is designed to increase its capital buffer without having to raise Additional Capital<\/a> in the market. Rallying around 11 on todays trade. The plan will impact but there were no plans to sell its subsidiary in the country. The group also said that the russian downgrade would not impact its risk calculation. Now sebs 4th quarter operating profit missed analyst expectations due to low trading and hedging incomes. They also raised dividends but less than forecast if we look today. You can see its sharply lower. Its down about 4 or 5 . Well have a look at that share price in a couple of seconds. Joining us on the phone from stockholm is cfo of seb. What do you make of the latest results . Clearly the market is disappointed and when you look at it in comparison to another bank with very good results and bigger than expected Dividend Increase<\/a> yesterday. No, i think we have come out with a fairly strong result. We achieve 20 billion of operating profit which is something we set out to do in 2015. We reached hah target a year early. We should be pleased with that. As you point out, trading income has been difficult in q4. Low Interest Rate<\/a>s. Its hitting the fixed income trading and the income as well. So thats the major contributor to a little bit lower incoming in q4. Well clearly, whether or not the results perhaps look good on the face of it the markets not taking it well. Its down. 35 . Lets just talk about the current Interest Rate<\/a> environment and the shape of the yield curve ch how much. How much is that impacting your business . Can you turn it around more meaningfully while the yield curve is shaped like it is . Its putting pressure on the whole Banking Sector<\/a> but if we look back the Net Interest Margin<\/a> in seb has been very stable all the time. So weve been able to up to this point were able to compensate on the landing side for the falling margins on deposits. I think were able to compensate in a good way. The income is up. So you know diversification has been good until now but interest sensitivity is greater at these levels. Its about 3 billion for percentage point of change on annualized basis which is a big number. Well have to keep at it and we have been able to compensate. Thats the plan. Lets move on and talk about your exposure to the baltic country which is is a meaningful part of your break down. Has that been widely effected by the ukrainerussia crisis . No its still not a big part of the group but no it hasnt really effected it. The Baltic Division<\/a> is doing well. Its producing a profitability of 17. 5 which is and i think stability and the innovations in the baltics mean they compensate for the difficulties there in a very good way. So i think we feel well relaxed is the long word but we feel comfortable with the baltic business. Thank you very much for that. The ceo of seb. Lets bring the discussion back more broadly to wider markets. Does that pressure on countries like sweden increase from here once the ecb acted . Are the banks going to be forced to follow in a similar suit . Hopefully you dont see that cascade. The more interesting thing for me was hearing about the bank sector. I think one of the problems that youve got from the ecb qe is the flattening yield curve. This is a bond focus repurchase program. Youre going to get bond sensitive plays like the pharma sector doing well. But banks the lesson from japan is when you do bond finance repurchase it isnt actually the banks dont do particularly well. You havent really incentivized incentivized them to lend aggressively. Final very quick question outside of health care whats the stop sector pick . Its going to be a combination of the Foreign Exchange<\/a> related, foreign Sales Sectors<\/a> that will do well. Things like autos and industrials. And then its going to be some of the yield plays like pharma and then youre going to get tech as well. Thank you for joining us this morning. Much appreciate it. Chief investment strategist at absolute strategy research. Still to come on the show well cross to moscow as Foreign Ministers<\/a> debate fresh sanctions on russia. Jeff joins us right after the break. Youre watching Worldwide Exchange<\/a>. Bringing you Business News<\/a> from around the globe. Europeans markets in the red amid a renewed sell off in oil and gas stocks. This as shell announces its slashing spending by 15 billion over the next three years. The slide in oil adding to pressure on the rouble as eu Foreign Ministers<\/a> prepare fresh sanctions on russia amid descent from greece and germany. Deutsche bank with surprise profit in the Fourth Quarter<\/a>. Greek banking stocks with losses after hitting a record low but government borrowing costs rise sharply as they turn their backs on commitments. Good morning. Lets get a check on european markets in the red. The xetra dax down. 7 . It fell to a record low in january. That was in line with expectations but what youre seeing on these markets earnings news we just told you about shell in the headlines that is bucking the trend in germany but still is the fed meeting from yesterday. When janet yellen sounded bullish on the u. S. Economy, the markets are pushing that first Interest Rate<\/a> hike further out but still this is a question very much on investors minds. Youre seeing that play out again in this session over here in europe. So youre seeing it underwater. Indeed lets look at bonds. That fed statement yesterday was accompanied by general risk off sentiment and u. S. Bonds going up yields going down 1. 75 . Thats where they have been since the meeting last week moving in the other direction of course greek yields. 11. 3 were currently looking at on the tenure. Thats another big move from where it closed yesterday. Five years now at 14. 6 up the best part of 3 today and the three year is up 4 today at 18. 1 so the short end of the greek curve moving very sharply. Fears of course on a debt default following the election of the government. The u. S. Dollar moves following the fed meeting yesterday. Slightly muted. Not too much happening there but as you can see the biggest mover today is the dollar up against the ruble by the best part of 1. 5 . Well prorussian rebels have accused the Ukrainian Army<\/a> of shelling in the region. Fighting intensifies with rebels on the brink of taking over a strategic railway town. Russian foreign minister warned military action will lead to a inevitable escalation of conflict. Meanwhile the crisis in Eastern Ukraine<\/a> is taking a toll on russias state run gas company. The group posted a 62 drop in profits siting volatility but it was hit by lack of deliveries to customers in ukraine. This as eu Foreign Ministers<\/a> prepare to meet in brussels. Greeces new Energy Minister<\/a> says theyre against further penalties on moscow. He said the government had not been consulted and added we have no differences with russia or the russian people. Well spokesman for European Council<\/a> president donald tesk responded to the claims saying all eu governments had been consulted. Ministers are set to extend current sanctions by six months and add new names to the list of russians impacted. Not all parties are convinced. Theyre saying the eu should not rush with new sanctions. Jeff has been in moscow reporting for us. What do you think . Are the sanctions actually going to get through . Theres so much back and forth at this point. There is a little window of opportunity here for the russians to do something that would change their story because even if sanctions are green lighted at this Foreign Ministers<\/a> meeting they wont really get signed off until the middle of february and they wouldnt be imposed until march. So there is a process here where if the russians perhaps were perceived to be deescalating in Eastern Ukraine<\/a> all could persuade other elements within the Decision Making<\/a> group this wasnt the time to move forward then maybe they could be put off. Clearly the fact that now the new greek government is saying we need to be consulted and were not necessarily going to sign off on new sanctions that brought a new element into this story. Saying that maybe this is not the kind to increase the pressure on russia. Thats a more measured announcement that we have seen for some time from european leaders leaders. We do have an interesting 48 hours for the russian economy. Theres a question on where we go on Interest Rate<\/a>s after the shock hike we saw at the end of last year by the central bank trying to defend the rouble. We might see a dramatic cut in rates to ease some of the pressure on the economy. But well get to that presently. All of that of course is adding pressure on russian businesses and Banking Sector<\/a> where liquidity is at a minimum. I asked just how far away this economy is from a full blown banking crisis. The Current Situation<\/a> is rather dramatic but the situation comes on the very untimely consequence of three factors. One, structural problems that have nothing to do with Oil Price Levels<\/a> or sanctions. Second obviously, is the oil falling by more than 60 in a very short period of time. And the third problem in the russian economy is obviously the sanctions but thats only third. Now if you talk about oil being as low as it is for example, 40 45 barrel then we will certain certainly see the need for banks to build reserves as we estimate those needs for reserves and there will certainly be some bank failures. I do not exclude the possibility of some banks actually going bust losing their cherished reliability but on the whole, i think the russian Banking System<\/a> is much better off and in much better shape than 2008. All of these things being considered were in a decision to clear this adversity with reasonable comfort. Well, as you would expect we would be here over the next 48 hours. Just keeping track of what these developments mean for the russian ruble and dynamics for this economy. Were going to talk to the head of the state owned bank. That will be a live interview tomorrow morning into cnbc europe programming. So make a point of joining us for that. Now ill just say we have one or two other things were working on which hopefully will come together which will give us a better insight as to how moscow intends to deal with the on going crisis in the west. Thanks for that. We look forward to the interviews coming up the next couple of days. I wanted to get a feel from you what the sentiment is on the ground about this on going crisis. William hague warned putin of continuing down this path but domestically do people believe what he is saying much more than we do in the International Community<\/a> . That this has not got serious russian involvement in the ukraine crisis . And ukraines forces are similar to what putin described them as a nato legion . Well i cant tell you how he described the action of russian reservists that may have volunteered as they put it here to fight in the region. That is clearly beyond my brief butly tell you, the president appears to still enjoy high popularity ratings here and thats been something of a conundrum for western leaders. They have been hoping this would translate into pressure on the russian government and president putin himself but it doesnt really seem to be playing out in that direction at this stage. I suppose the issue here that dr. Gabriel brings up the German Economy<\/a> minister is if we are not getting the outcome that we want at the moment from these sanctions as far as the russian government is concerned, why persist with imposing more at this stage . But it exposes the inchanges of president putins behavior at this point. Jeff, i know that throughout the morning you have been covering this emerging greek angle and this whole story and essentially greece could torpedo the whole sanctions idea and do you think that russia could be a future lifeline to greece. Is there something substantial emerging here . Yeah this is a fascinating story and we should spend some time on it. Lets not discount it. My understanding is and the greek finance minister has made this point as well in his own blog the greeks are not saying we do not agree with sanctions or at least that seems to be his interpretation interpretation. What were concerned about is the consultation is greece is a part of the eu then surely the greek government should be consulted before any fresh sanctions are imposed. That was my sense of what was said by the finance minister of the new government. But i want to point out in the past they argued that maybe greece shouldnt be part of nato. Now i dont think that is current policy but it does suggest theres a closer relationship with the views of russia than we saw from the previous greek government. So i think this is one where we watch the space. At the end of the day the greeks could not stop sanctions being imposed on russia but how close is it . We need to wait and watch this story unfold. Back to you. Thank you for that. Well be back out with jeff later in the show. Now governments around the world are scrambling to reform outdated Health Care Sectors<\/a> and address the needs of the population. Lets get out to seema once again live at the Jp Morgan Health<\/a> care conference in london. Wilfred as you rightly pointed out health care is an important topic ahead of that u. K. General election coming up in may. The question is what can the u. K. Government do to create an infrastructure to make the u. S. A favorite destination for Life Sciences<\/a> . We are joined by the minister of Live Sciences<\/a> for the u. K. Minister George Freeman<\/a>. Thank you for joining us. We have seen a Record Number<\/a> of companies go public in the u. K. 1. 25 billion pounds raised in 2014. A great number but nothing compared to what were seeing in the u. S. So the question is what does the u. K. Government have to do to encourage more companies to go public here in the u. K. . Youre right. Were seeing a resurgence here in the u. K. After a few years of a lot of private activity and early stage investors but the Public Markets<\/a> quiter. Last year in 2014 we raised 1. 2 billion for early stage investment. We have seen a hot ipo on the london market. Im here today opening the market to signal the restoration of Investor Confidence<\/a> and interest in the life science sector. The u. S. Is on fire. The nasdaq at the moment raising huge buckets of money and very high valuations and its a very very active sector but theres something going on in the u. K. Which investors are beginning to realize is extremely interesting and value. The first country on earth with the billion a Year Investment<\/a> in nhs reserve, we have the ability to build an integrated Health System<\/a> which is a test bed for targeted medicines and new diagnostics. None on earth has the combinations of deep science. And thats our strategy. To use the unique advantage. But to create a stronger infrastructure a lot of capital, a lot of funding is going to be needed and if the government continues to look for areas to cut down on expenses and narrow its deficit, couldnt that result in many of your projects that you manage to be cut . No thats why the Prime Minister<\/a> made Life Sciences<\/a> our number one industrial strategy. Its the first one we launched. We protected the science budget here in the u. K. Despite a very challenging Public Sector<\/a> finance round. We invested substantially and in the project and we invest just over a billion a year in the medical research counsels. We invest a billion a year in the nhs. Today im announcing another 15 Million Investment<\/a> in cancer research. Were prioritizing the sector. We see it as doing two things. Helping us develop in our Health Service<\/a> smarter medicine more Precision Medicine<\/a> to get more health from every pound we spend in the national Health Service<\/a>. So we stop giving the wrong drugs to the wrong people and monitoring properly which patients are responding. This is about smart medicine. Getting more health for every pound and developing clusters of great Fast Growing Companies<\/a> here in britain that pay tax and generate jobs and employment and prosperity. This is a modern economy. Life science is generating revenue and solutions to the Health Care Challenges<\/a> we face. Lets switch focus to innovation. That has been front and center this election. What does tougher immigration laws mean for your talent pool . Will the quality be compromised or suffer from that . No we put in place a series of mechanism that ensure that the Global Talent<\/a> we need the great scientists around the country can come to britain and build businesses. Within the immigration title theres a whole series of different issues and economic migration in europe. Theres people coming to the u. K. To study. We want people to come here study here start a business here and our message is if you have a skill question need in this sector and theres an opportunity for you youre welcome. Were very much open for business. All right. Thank you so much for your time and wilfred as you just heard there from the minister Live Sciences<\/a> will continue to a priority for the u. K. Government ahead of the highly anticipated election in may. Thank you very much. Sorry, wilfred. Japans Third Largest<\/a> airline skymark filed for bankruptcy. The story is live from tokyo. Take it away. Thank you. They sent shares to limit low today. The companys president who lead skymart since 2004 resigned. They stated that the airline will continue flying. Already a tokyo based private equity firm offered to provide credit while they work on constructing plans and numerous laesing companies have shown interest in sponsoring the turn around but the top creditors, airbus and the Leasing Company<\/a> will have the greatest say in choosing sponsors. It was founded in 1996 when they opened up japans Airline Industry<\/a> which was comprised of just gel and ana. It rose to become the countrys Largest Airline<\/a> but problems rose in 2011 when they contracted to buy six of the a380s. And the following year low Cost Carriers<\/a> emerged in japan eating into skymarks business. If they ended up losing its independent it could give greater Pricing Power<\/a> to gel and ana. Thank you so much for that. Now still to come on the show well be taking a look at tech earnings including nokia and samsung after the break. Stay with us. Uh, and i know my iq. Okay. Uh, and i knowuhi know what blood type i have. Oh, wow uh huh, yeah. I dont know my credit score. You dont know your credit score . I dont know my credit score. Thats really important. I mean i dont know my credit score. Dont you want to buy a house. Like, ever . You should probably check out credit karma, its free. Credit . Karma . Free . So, thats. How much . Thats how much its free. Credit karma really free credit scores. No credit card needed. The report marks the 5th straight quarter of decline for Samsungs Mobile Division<\/a> and it comes as rival apple game the worlds Biggest Smartphone<\/a> vendor in the Fourth Quarter<\/a> of 2014. Starkly different fortunes between those companies. Particularly in china. Apple keeps going in on samsungs territory with the note and the bigger iphone. Not just in volumes in terms of smartphone sales that apple is beating samsung in terms of trend but also the price points. Apple has managed to maintain that higher point entry. Going up over the last set of results. Much broader range of price entries. It kills the margin. Yeah pretty grim. Meanwhile, nokia shares are trading low. The group was boosted by strong sales to sprint in the u. S. Weakness in the companys licensing and business were driving the sell off as you can see down 4 today. Meanwhile, alibaba announces its fiscal quarter before the bell. They suggest the ecommerce giant will post Strong Revenue<\/a> growth. Eunice filed this report from beijing. Alibaba is going to post december Quarterly Results<\/a> before the u. S. Markets open on thursday. Were expecting some solid numbers. The chinese ecommerce giant is going to say revenues soared to 4. 5 billion. Thats thanks in part to a one day Shopping Festival<\/a> here called singles day which happens in november. The profits are also likely to soar by 8 to 1. 4 billion. Investors are probably going to have a lot of questions for the company. Alibaba is been on a big buying spree and many people are wondering how the investments are paying off and how they fit into the overarching global strategy. Another area of concern is the mobile area. Ecommerce has been moving to the mobile phone. A lot of people are wondering are they going to be making more money off of the mobile internet and how are they going to do it . Finally the biggest area investors will be wondering about is how alibaba is going to fight fakes. This is after the company has had an unusually public dispute with the Chinese Government<\/a> which is very critical of alibaba as well as other online retailers for selling fakes on their websites. Cnbc beijing. Stay tuned. Squawk on the street will be speaking with alibabas executive vice chairman joe tsai at 9 00 eastern time. The days of businesses having their own computing system is being arcane as more firms switch to running if from the can cloud. Trade shift is capitalizing on that move. I spoke to the ceo and asked about expansion plans. If you have a platform like facebook and linkedin and companies would sign up and invite other companies to join and we spread all over the globe. But you guys dont charge. How do you make money . We charge for those using our Enterprise Software<\/a> and then we have a lot of thirdparty app builders and if they sell and make money we take a cut from that. I assume the shift is happening quickly. Companies moving to the cloud. Its a real interesting time. Theres a huge transition going on for the fortune 500 companies. Theyre moving from manufacturing to services. New Business Models<\/a> are emerging and they need to deal with the supply chain in a different way. We were lucky to be there. The response from companies has been good. Yeah we work with Large Companies<\/a> like dhl, the national Health Service<\/a> in the u. K. Who would you like to be working with . All the companies in the fortune 5,000 but we would like to help a lot of the companies to connect and be part of the global business. Thats half of them as well. Absolutely. What i thought was really interesting is you guys are trying so big Companies Like<\/a> to delay payments because it boosts their working capitals but its not good for Smaller Companies<\/a> that can go bankrupt in the smaller process. How do you fix the weak link . Theres a lot of processes broken. It just takes time to do. Right now its hurting our economy and what we can do is help the companies connect the digital data and then we can let third parties like citi bank have the supplies like financing. Have you had an experience yet with the risky nature of that business . Youre having the bank as the middleman. What if somebody doesnt come through . The great thing is we have so much data. We can provide them with very rich real time data. They allow them to get much better Credit Ratings<\/a> and access to finance. You guy versus already been on the acquisition trail a little bit. You have competitors out there. Our competitor sap bought them. Excuse me. I was asked recently if wed want to sell to s. A. P. But we would rather buy them. Lets have a look at greek bond yields. Sharp moves today. The ten year is at 11. 3 following sharp moves yesterday. Also worth pointing out the short end which moved sharpest. Five year is at 14. 8 . Up 1. 3 on the day. The three year up 2 on the day at 18. 6 . Lots of volatility. Still to come, the tech earnings keep coming with alibaba, google and amazon all due to report. We break down the expected winners and losers after the break. [ male announcer ] meet jill. She thought shed feel better after seeing her doctor. 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Call the number on your screen right now. Good morning and welcome to Worldwide Exchange<\/a>. Heres your headlines from around the world. U. S. Futures point to a mixed open after a twoday slump on wall street. A rate hike despite concerns over the strong dollar and lower oil. Crude taking its turn on Royal Dutch Shell<\/a>. Earnings miss forecasts. Facebook reports better than expected earnings as mobile ads continue to power results. Mcdonalds appoints a new ceo as the fast food giant has a new recipe to boost sales following one of the worst years in decades. As an investor how do you profit on the drug innovation that we are seeing in the Health Care Space<\/a> . By the way, health care 25 gain in 2014. We discussing the Investment Trends<\/a> here live at the gp morgan healthcare conference. Youre watching Worldwide Exchange<\/a> bringing you Business News<\/a> from around the globe. So yesterday was a little bit of everything in that fed statement. Some comments about positive domestic situation although lots of reference to the tough global economy. Considerable time dropped but patient brought in instead of it. It seemed that investors just pick and choose. They mentioned slowing Global Growth<\/a> but perhaps that is being pushed further. Youre seeing that play out on u. S. Futures. It has been two days of declining. Were looking at a mixed open here. We have lots of earnings to look forward to as well. The likes of alibaba, amazon google, and investors continue to have the fed statement, rates will be still in line with what janet yellen has been saying which is the mid of 2015. This year could that be pushed further out. Certainly investors the markets are thinking that could be those. Especially if you look at the longer bond yield. Lets see how european markets are fairing in todays session. Were seeing volatility to the down side. The ftse 100 down. 8 . Deutc Deutsche Bank<\/a> is out with profits. They were expecting a loss in the last quarter. So cac 40 down. 3 . The micex index is up. 7 . A lot going on here. We know that the eu is talking about imposing further western sanctions on russia. Theres some comments and some of the volatility is playing out whether greece could potentially stop the sanctions from going through. It seems unlikely but the standoff between grease with russia and the creditors continues to play out in these markets. So it is Interesting Times<\/a> here in europe. Its interesting that when the greek elections first happened investors were complacent and now were seeing the bold moves by the new government and rethinking things a little bit. Thats a big factor. And equities struggled to buck the trend over the last 48 hours as we moved into different time zones. They lead each other lower. Its a selffulfilling prophesy. We also have seen a little bit of bond buying and the fed statement yesterday although there was some positives and some negatives it did see some bond buying. Lets also look at the ten year in germany. 35 . Its not been much change this week and greek bond yields moving the opposite direction. Were at 11. 1 on the greek tenure. The short end of the greek curve moving more sharply. We have the five year now at 14. 6 . Thats moved 1. 3 today. The three year at 18. 1 up over 2 today. The short end of the curve pointing to expectations of a possible debt default. Sharp moves there following the sharp sell off we saw in greek banks yesterday. What did the u. S. Dollar do after the fed meeting yesterday . Well it didnt do that much. The move was more muted compared to that on the bond market or equity market and the u. S. Dollar continuing its trend over the last couple of days. Just coming back off the highs it had earlier this year and the euro gaining ground today. Were at 1. 13 there. And a quick look at the roubel 68. 7. Well be out to jeff in moscow later in the show. Oil prices sold off sharply yesterday. Today the move is more muted. Now bouncing back it was down fractionally at the start of trade up. 6 for wti. Brent 49. 03. The Federal Reserve<\/a> indicated it remains on course to hike rates this year as expected in the january statement. They dropped its commitment to keeping rates on hold for a considerable time and it repeated it would be patient with its plans to raise benchmarks borrowing costs from zero. Policy makers were more bullish on the economy noting it had been expanding at a solid pace with strong job gains. Facebooks Fourth Quarter<\/a> earnings rose 34 . It jumped 49 and now make up more than 2thirds of total ad revenue. 85 of users are accessing the site through mobile devices. Spending is rising higher than revenues. Total costs and expenses were up. Facebook ceo says theyre seeing Growth Opportunities<\/a> in many areas including video. You just hit 3 billion views a day on facebook. Consumer use of video is exploding. That gives us an opportunity to do more monetization. When consumers do more video we have the ability to she more video ads. Facebook fell more than 2 in after hours trade. Its down almost 2 today as you can see in frankfurt trade. Another big day of u. S. Earnings today. Alibaba, Conoco Phillips<\/a> and ford all report after the market open. After the bell all eyes on google and amazon. Tomorrow we close out the week with chevron along with mastercard mattel and xerox. Seema joins us from the Jp Morgan Health<\/a> Care Investor<\/a> forum in london. Christine, how are you judging the earnings season so far . The multinationals are struggling. Especially with the strength of the u. S. Dollar. Thats a great assessment. When we started off the week first peak earnings week of the season, we had a couple of industrials that recorded really big blows this season. So caterpillar and 3m setting a poor tone. They missed estimates on the top line and bottom line and sited the stronger dollar so i think investors got spooked that was going to continue throughout the season but now were seeing tech to the rescue. We saw apple. We saw facebook. Were going to see how alibaba, amazon and google all report today but the tech sector which should see the biggest impact from the rising dollar has been able to ward off some of the weakness. Mark sukerberg says revenues would be higher. For the companies that have great management and great product mix or services they are able to hedge a bit like some of the Tech Companies<\/a> that were seeing come out now. And christine, lets talk about health care because here at the conference behave been discussing better than expected earnings. Thats one of the reason Health Care Stocks<\/a> have been rallying over the past one year. I believe analysts are expecting a 16 rise of profitability in health care. Where do you see the growth coming from . Is it share buy backs or organic Revenue Growth<\/a> fuelled by what we have been seeing in the pharma and bio tech space . For health care thats expected to be the leader among all s p 500 sectors. So were actually looking at 20 year over year growth on the bottom line and close to 10 on the top line. Thats the highest revenue and Earnings Growth<\/a> estimate of all ten sectors. So in health care were seeing its quite pure growth. Not necessarily tied to share buy backs like it has been over the last several quarters but specifically in bio tech that sector is expected to grow profits by 60 this quarter. Well be looking closely at Gilead Sciences<\/a> and a few of the others. Theres only seven companies within that industry but bio tech expected to be huge this quarter and i think its pure profit growth. Theres other sectors being impacted more by share buy backs. I dont think thats what you have here be health care. Lets talk about the industrial sector. It highlighted the difference in Different Companies<\/a> ability to deal with the stronger u. S. Dollar. We started out the very very strong. Thats after you had those reports from caterpillar and 3m. Ups was another weak area which we werent expecting. Transports should be benefitting from lower oil. Fed ex out with great numbers. Record Holiday Shipping<\/a> numbers so theres a difference here while i do take the stronger dollar very seriously and in most cases its difficult for companies to completely hedge for this theres companies able to do so with the example of fed ex versus ups. It comes down to Good Management<\/a> and planning for things such as a currency hedge. Theres some industrials that havent been able to. Airlines, another strong area within the industrials which would be expected because of jet fuel costs that have come down. Of course airlines arent passing those on to consumers so theyre adding that all to the bottom line. A big theme that is emerging already this year is the divergent Monetary Policy<\/a> between the u. S. And the rest of the world. We have been talking to a lot of our guests here about the Value Proposition<\/a> that european equities may offer. Are you starting to look beyond u. S. Markets . Its very difficult in this situation because its clear that u. S. Markets are the strongest right now. This is not a couple of years ago when europe was going through a recession and u. S. Companies were able to look to china to offset some of the weakness in europe. Unfortunately right now u. S. Companies are struggling not only with weakness in europe but as well as moderating china. So you know u. S. Corporations they get 40 or the s p 500 index gets about 40 of its sales from outside of the u. S. They do rely on a strong global picture to succeed. Thats something were seeing in a lot of press releases that u. S. Corporations are jittery about at this point. Will qe work in europe . Thats yet to be determined. A lot of people are hoping for that. So were looking for a clear global picture as we head through 2015 but some of the guidance has been a little soft. That has been mostly due to a global picture that isnt quite in line with what we would expect at this point. Thank you very much for joining us. Lets give you a run down of what else to watch this trading day. Investors will also get a pair of economic reports today. Weekly jobless gains are out at 8 30 a. M. Eastern time which are expected to drop for a second straight week as filing for Unemployment Benefits<\/a> hit seven month lows this month. At 10 00 a. M. Look for home sales since homes go under contract about a month or two before theyre sold this report is seen as a leading indicator for existing home sales. Lets take a look at todays other top stories. Theres a new pittsburgher boss as don thompson will step down in march. Hes going to be replaced by Steve Easterbrook<\/a> who is currently the companys chief global brand officer and was formally head of mcdonalds europe. Thompson that took over as ceo has seen sales slump. They have come under fire for adding too many items to the menu and consumers are opting for healthier fare. Mcdonalds reported the first an wrul annual drop in sales. Theyre closed but likely to start the session lower. It always makes me unbelievably hungry. California is taking a stand against ecigarettes. Planning a campaign to warn residents about the health risks. This follows a report declaring theyre a Public Health<\/a> threat urging lawmakers to regulate them like traditional cigarettes. They say its to discourage people from switching to ecigarettes which are seem as less harmful. Seema has more on what to expect after the break. Thats right, wilfred. Genetic sequencing is transforming the personalized medicine space. How can you as an investor profit from it . Well speak to an investor on some areas to watch and specific stocks to perhaps keep in mind over the next coming year. Thats coming up here on Worldwide Exchange<\/a>. Lets back. Lets give you your headlines. The fed stays on course to hike rates this year. The oil route drives Royal Dutch Shell<\/a> to slash spending as earnings miss forecasts and facebook reports better than expected earnings as they continue to power results. Several large drug makers received a mysterious invitation to a meeting at the white house on friday. They have been asked to send their top researchers to the event. More details are expected to be shared on president obamas plan on a Precision Medicine<\/a> proposal he mentioned in the state of the Union Address<\/a> last week. It would boost research to help companies identify diseases based on patients dna. Stocks were among the best performers in 2014 a year that saw 1. 25 billion pounds raised in london. Thats the highest amount since the financial crisis. Joining us now live from the Jp Morgan Health<\/a> care conference in london is seema mody. Over to you. Not only one of the best performing sectors in the u. K. But one of the best performing sectors in the u. S. Gaining about 25 and interestingly enough you would think that health care when investing in the sector you would need a multifacets approach. So now were joined by Polar Capital<\/a> ceo, pleasure to have you on. Nice to see you seema. Tell us about with a you think is needed in order to be a smart Health Care Investor<\/a> given that theres so many to account for. Where would you put your money going into this new year . Well we invest across all the sectors. You need to look across all the sectors. Sometimes people think health care is drugs. What about in terms of how the u. K. Government is trying to prioritize Life Sciences<\/a> and is trying to to use ways to incentivized more companies to list here in the u. K. Could that attention . Could that capital also create Good Investments<\/a> from your point of view . We hope so. One of the reasons were here today is theres some incredible innovation within the u. K. And i think the government is putting a real push we heard from a couple of politicians. I think you heard from George Freeman<\/a> earlier, are putting a big push in trying to get the invention and innovation and helping it to be commercialized. The city will be an important part of that. Aging population means more opportunity to innovate but how much of that progress rests on the government. I think in terms of where new drugs are coming from they have a role to play for that in basic research. If you look at where new drugs are coming from and the success of the pharmaceutical industry from a perspective over the last three years its been driven by innovation coming out of the tech sector. Gene sequencing expected to transform the space. Are there areas to watch that could benefit from this trend . We got very excited about the genome in 2000. Its being translated into commercial opportunities so you see that first in oncology. So some of the Big Companies<\/a> that have pipelines in these new drugs, theyll approximate personalized and that means targeting to specific people. So the right patient had get the right drug but theres other bio Tech Companies<\/a> as well as some diagnostic companies that are also playing into that space. And, you know just a fun fact, i used to work in a Genome Sequencing Lab<\/a> back in the day. But since then we have seen major progress. Big pharma growing their pipeline by acquiring small to mid sized bio tech firms. Other players are doing the same for tax incentives. Do you see this trend continuing . And if so what are some names that can capitalize from this trend . Youre seeing it in the United States<\/a>. Its all coming down to how can we take cost out of health care . The games we like here we like medtronic. The deal has become a 100 million guerrilla of medical devices. We also like zimmer. Its become a dominant player in the market. These are two stocks to watch over the next year. What would you say to the European Companies<\/a> that feel like they need to go to the u. S. In order to grow their firm and to ultimately list on either the New York Stock Exchange<\/a> or the nasdaq . What would you say to those companies that they could perhaps achieve that same level of success here in the u. K. . Its always very attractive to go to the United States<\/a> because theres lots of money there. I worked there for seven or eight years but theres a lot of companies. Theres a lot of competition for capital and if companies in the u. K. Think about telling their stories to investors here and explaining what they do more than once again and again they can get support out of london and possibly the rest of europe. Well leave it there. Thank you for your time. Wilfred, sending it back to you. Thank you for that. Sounds like it could be another big very active year in health care. Even here in europe. Still to come on the show could chinese regulators be taking the magic away from alibaba . Well get the latest from beijing as we preview earnings out later today. Alibaba announces the physical third quarter. The ecommerce giant will post Strong Revenue<\/a> growth and 8. 9 billion un. Alibaba is going to post the december Quarterly Results<\/a> before the u. S. Markets open on thursday. Were expecting some solid numbers. The chinese ecommerce giant is going to say that revenues soared by 48 a year ago to 4. 5 billion. Thats thanks in part to a one day Shopping Festival<\/a> here called singles day which happens in november. The profits are also likely to soar by 8 to 1. 4 billion. Investors are probably going to have a lot of questions for the company. Alibaba has been on a big buying spree and many people are wondering how those investments are paying off and how they fit into the companys overarching global strategy. Another area of concern is the mobile area. Ecommerce here has been moving increasingly to the mobile phone. A lot of people here are wondering are they going to be making more money off of the mobile intranet and how are they going to do it. Plus how they are going to fight fakes. They have gotten in a public dispute with the Chinese Government<\/a> which has been very critical of alibaba swelts other online retailers for selling fakes on their websites. Cnbc beijing. Stay tuned, squawk on the street will be speaking with alibabas executive vice chairman at t9 00 a. M. Eastern time. Its about the singles day this quarter. Theres lot of big spending days but it is interesting looking at the talk of counterfeits we were talking about a couple of days ago. So far that has not hurt domestic sales but for the Domestic Community<\/a> if they start announcing plans they want to expand more internationally people arent going to expand that sort of thing. Im not sure that the regulators are serious. This is a slap on the wrist. Its about giving the Smaller Companies<\/a> a little bit of an edge. They have come out and said this before without really having a lot of action after that but it will be interesting to see what american and International Investors<\/a> think about this development were expecting a mixed open following two days drag down. Thats despite the tech sector weighing on the nasdaq. Otherwise well see what alibaba does to the New York Stock Exchange<\/a> of course as well. Certainly and still to come on the show the oil route is adding insult to injury. So what is the end game for president putin. Jeff joins us live from moscow after the break. Earnings miss forecasts. Facebook reports better than expected earnings as mobile ads continue to power its results but costs are rising faster than revenue. Mcdonalds appoints a new ceo as the fast food giant boosts sales following one of the worst years in decades. Youre watching Worldwide Exchange<\/a> bringing you Business News<\/a> from around the globe. And if youre just tuning in thank you very much for joining us here on Worldwide Exchange<\/a>. Heres a look at u. S. Futures within the last five or ten minutes have gone all green. It was previously a mixed set of futures but were expecting a bounce back from two days in a row of quite heavy falls in the u. S. Markets. The s p expected to open up 1. 5 points. Dow up about 6. 3 b points and the nasdaq to bounce about two points. Very poor tech earnings so far this quarter other than apple that bucked the trend. Lets look at european markets and see what theyre doing. Little bits of green coming out and of course weve had a weak couple of days in europe as we had in the u. S. We did start the day a little bit more positively and its down about 0. 3 . Thats focused into the ftse 100 and cutting of cap ex. Germany just below flat. Weve got france now just in the green having been down just a bit earlier. Been a volatile couple of trading days. Lets look at greek bonds. Quite sharp increases in yields yesterday. Sharper still today. The ten year is at 11 . The five year 14. 7 . Thats moved over 1 today and the three year is at 18. 6 . Its up about 2. 5 today. So of course sharp moves across the curve, particularly at the short end pointing to fears of a debt default in greece. Well the Federal Reserve<\/a> has indicated that it remains on course to hike rates this year as expected in its january statement. The fomc dropped its commitment to keeping rates on hold for a, quote, considerable time and repeated it would be patient to raise benchmark borrowing costs from zero. They will be more bullish noting it had been expanding at a solid pace with strong job gains and i thought what was interesting, i love how we analyze every single little word. Its comments on the oil price, janet yellen decided this will be a good thing for the u. S. Economy but everything were seeing is a little bit unsure at this point . Youre seeing a slow down in the rest of the world which is impacting the u. S. As we two through earnings season. I agree. We always debate that considerable time versus patient. What does it mean . But what theyre still focussing on and they mention that last time and this time is inflation expectations. Its not just the focus on today. But slightly closer to deflation than four months ago. They know theres a wall of money and they are looking at where inflation might be in a couple of years time. Its interesting. Goldman sachs once again lowering their forecasts for oil and was it Morgan Stanley<\/a>, right that put this low floor on oil. They said that maybe it would go down to the high 30s. Absolutely. So its expected to last for sometime. Lets look at the oil prices. They cut it across the board. Not just oil but oil was weak yesterday. Quite sharply weak. As you can see a slight bounce back today. Crude at 44. 5. Thats wti and brent is at 48. 9 up about 1 . And i should clarify it was barclays not Morgan Stanley<\/a> that said it would go perhaps into the high 30s. Meanwhile, Energy Stocks<\/a> continue to under perform. Shell trading at the bottom after plans it will slash 15 billion in investment. The oil giant also expected earnings eckearn earning expectations. The group posted a 62 in profits citing low oil prices and ruouble volatility. Down only about. 3 today. This as eu Foreign Ministers<\/a> prepare to meet for an emergency meeting where they are expected to expand sanctions on russia. However not all leaders are convinced. Greeces new Energy Minister<\/a> says its against further penalties on moscow. The government had not been consulted and added we have no difference with russia and the russian people. Theyre also saying the eu should not rush with new sanctions. Lets get out to jeff on the ground in moscow. And jeff the pressure really on with both the ail price decline continuing. Of course a further meeting of european Foreign Ministers<\/a> taking place today. Yeah absolutely. Clearly further sanctions from the eu would not be welcomed at this stage by the russian government. We have also had some suggestion that washington is looking at what it might also do to rachet up the pressure on this government. What we know is this round of sanctions if it were to be imposed and signed off in the middle of february it would result in a lengthening of the existing sanctions and potentially there could be other Companies Cited<\/a> or other individuals cited that may be excluded from access to capital markets. Thats one of the key challenges here. Theres concerns about liquidity in the Banking System<\/a>. And we have seen the government come out and provide support to specific names vtb bank has received in excess of 2 billion in support and we have seen extension of other support to russian financials. So clearly the focus here in russia will be very closely on that gathering taking place. One other thing we are 24 hours away from the Russian Central Bank<\/a> decision. Theres those that think the bank mismanaged the ruble crisis in those very dramatic two weeks back in december where we saw significant declines. Theres been a reshuffling of some of the staff at the Russian Central Bank<\/a> as questions have been asked as to whether the dramatic 6. 5 hike was appropriate. Interest rates perhaps sit at 17 on the key benchmark rate and there are many here hoping that tomorrows decision bring at least a 2 to 3 reduction because clearly thats not helping Economic Activity<\/a> either in this economy and we will have that decision live into Worldwide Exchange<\/a> tomorrow. Were also talking to dtv bank live tomorrow morning as we exsee the outcome of this meeting in brussels. We look forward to your coverage tomorrow. Coming up next on Worldwide Exchange<\/a>. Theres a new man taking over at mcdonalds. Investors hope he can turn the fortunes around. The full story after the short break. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets<\/a> and drive forward with broader possibilities. Cme group how the world advances. Welcome back. Health care stocks were among the best performers on the u. K. Ftse in 2014. A year that saw one and a quarter billion pounds raised in Life Sciences<\/a> epos in london. Thats the highest amount since the financial crisis. Joining us live from the Jp Morgan Health<\/a> care conference is semma mody. It could be another exciting year for the health care sector. A lot of interest in the Health Care Space<\/a>. Were not just talking about the out performance in the equity market but the Record Number<\/a> of deals. In fact 2014 the best year for deal making since the financial crisis and that means my next guest has been keeping quite busy. Were joined by catherine petty. Thank you for having me. Will we continue to see a record amount of deals in 2015 . If so where is the demand coming from . The pipeline still continues to remain strong. We had actually 161 followers raising about 20 billion. Were coming off the back of that on strong fundamentals. We have a rotation into health care out of the other equities which is strong. From the u. K. Standpoint last year we had 13 in health care we have a pipeline building but the purpose of today is to get more investors together to give them a chance to go to market. Some investors i speak to say theres a lack of Risk Appetite<\/a> when it comes to the European Health<\/a> care market. Would you agree . How could that change if we want to see more deals in the Health Care Space<\/a> . Historically that has been right if you look across the European Health<\/a> Care Companies<\/a> roughly 30 to 40 is now u. S. Shareholders but you also have very strong longterm only shareholders investors in the u. S. You must be sal evacuating at the numbers we saw in the u. S. In 2014. Raising 9. 54 billion in proceeds. What do regulators and exchangers here in the u. S. And europe need to do to lure more companies to list here . We have all the leaders here. We have very experienced management teams. We need more longterm capital. Weve seen more cross over investors than ever before. U. S. And european cross over investors come in but we need more Success Stories<\/a> and a cluster of these companies to come to market in the next few years. Do you think theyre doing a good job of funding and providing the infrastructure to prosper here in the u. K. . The job is to provide the structure to enable to companies to grow and succeed. They provided the first minister for Life Sciences<\/a> which is a great stake and around the back of that theyre putting in place the right kind of incentive schemes for these companies to get off the ground from an i. T. Infrastructure standpoint but also with tax incentives as well. And tax inversions. One of the reasons were seeing a surge in health care but washington policy makers have been trying to cramp down on these deals. Do you think that could result in a delayed amount of deals hitting the market . It always needs to be done for the right strategic regions. If we look forit at the moment youre seeing a lot of those companies doing pharma to bio tech and large transactions. Thats been brought about because companies have done their Strategic Review<\/a> and decided whether they wanted to be posting their bets and theyre going after it. Lets talk about an interesting investment trend we have been focussing on. Thats activist investors pressuring Companies Like<\/a> hp apple, to buy back stock or spin off an asset. Can this u. S. Style of activism could that resinate here in europe. Weve seen a few coming into the market in europe but we tend to have a much stronger pool of longterm investors as well as the hedge funds but if we look at the Shareholder Base<\/a> of most of our bio Tech Companies<\/a> they tend to have a significant representation. Well leave it there. You think were going to continue to see a surge. Well see if your right. Thank you. Wilfred, back over to you in the studio. Thank you very much. Now meet the newburger boss. Mcdonalds is shaking up the management ranks tapping out the new ceo as it struggles with a major sales slump. Lets join landon on cnbc hq. Youre right. There will be a new man in charge of the golden arches as mcdonalds is replacing don thompson that will retire on march 1st. Steve easterbrook is the new president and ceo. Hes the chief global brand officer and ran mcdonalds europe. Before that he was ceo of two restaurant chains. He was appointed ceo in july of 2012 after mcdonalds reported 106 straight months of positive same sales growth. But they have slumped. He decided to take action after another disapointing quarter but last week mcdonalds reported the first annual drop in same store sales in a dozen years and cut its budge by 800 million. Mcdonalds has seen sales slump as the core low Income Customers<\/a> struggle to recover from the financial crisis. The company has come under fire for adding too many new items to the menu which slowed down service. Theres been a big shift as consumers are opting for chains with healthier fare or more Natural Ingredients<\/a> and also five guys red robin and shakeshack which is going public this week. He says its tough to say goodbye to the family but theres a time and season for everything. His stock has been relatively flat. The dow is up 33 and s p 47 . Mcdonalds rose 3 in after hours and today in europe shares are up nearly up 2 . Back to you. Thank you for that. Before we go to break lets remind you of your headlines. U. S. Futures point to a mixed open. Positive open after a two day slump as the fed stays on course to hike rates this year. Shell slashes spending and earnings missed forecasts and facebook has better than expected earnings. Well be back in a couple of minutes. Stamps. Com is the best. I dont have to leave my desk and get up and go to the post office anymore. [ male announcer ] with stamps. Com you can print real u. S. Postage for all your letters and packages. I have exactly the amount of postage i need, the instant i need it. Can you print only stamps . No. First class. Priority mail. Certified. International. And the mail man picks it up. I dont leave the shop anymore. [ male announcer ] get a 4 week trial plus 100 in extras including postage and a digital scale. Go to stamps. Com tv and never go to the post office again. Welcome back. Lets have a look at european markets. A bit of a mixture of red and green that isnt the case about a half an hour ago. We had a little bit more strength than we had over the last hour or so. Lets see where the market sell off is focused. Its the ftse 100 down half a percent. The route is weighing on the energy sector. Germany is just below flat. France is just above flat and russia managing to eek out 1 of gains after aa volatile week. There wasnt that much move yesterday following the meeting. The u. S. Dollar broad indexes come off over the last week from its gains in 2015 but of course that rally in 2015 has been more divided than it was for 2014. Certain Currency Pairs<\/a> bouncing back against u. S. Currency strength. The yen 11788. Its come off its lows it hit the back end of last week. 1. 1299 at the moment. Lets look at greek bonds. Thats the story of the day so far in europe. Across the curve 11. 1 . Yesterday the start of trade it was just below just below 10 . So quite significant moves on the tenure but the move versus been more pronounced at the shorter end of the curve. Thats moved 1. 5 today and the three years at 18. 6. It moved 2. 5 . So clearly the short end really under pressure pointing to fears of debt default in greece. What does all of this mean for the u. S. Markets . Weve seen a little bit of a turn around and weve seen it turn around again. The nasdaq was positive not too long ago but now were seeing it back marginally under water. It has been two days of selling off in the u. S. Equity market so perhaps some consolidation here. Lot of earnings to look forward to today. Investors will be able to act out on that news. We have alibaba, amazon and google as well as a number of other really big names reporting before or after the session. Lets give you a run down of all the factors to watch investors also weighting weekly jobless claims and look for december depending home sales which measure signed contracts. Its seen as a leading indicator for exiting home sales. Joining us now is author and founder of average joe options. Com. Good morning to you. Thank you for joining us as ever. Lets talk about the risk of the last couple of days. Yesterday in particular u. S. Equities selling off of course. Was that down to the fed statement or other factors . Good morning when you look at the overall market were in a big consolidation pattern. 17,000, 1980 s p to 2080. We have seen some weakness. The first thing that sent chills down investors back was tuesdays earnings on caterpillar and microsoft because of the dollar. One of the big problems were seeing here is because the dollar is so strong its almost an Interest Rate<\/a> rise. We dont call it raising Interest Rate<\/a>s but because the dollar has become so hot it artificially makes u. S. Interest rates look higher which is why we see the world yield yield curve flattening down. Theres some fear. Theres some things going on the market. Yesterday was the first real day we had real volatility. You saw a lot of money moving out into the bigger cap stocks because thats where it goes. We are seeing a little bit of the risk off trade but were in a big consolidation range and i wouldnt be surprised to see a bounce off of lows here and see a rally. Its dee in london. How did you interrupt the feds language from yesterday . Does it push the rate further like the markets are expecting or is that intact some time mid this year . I think the fed is going to act sooner. I think the fed wants to see if the overall world economies kind of settle down because i think the fed has finally realized that the real solution, the real way to true growth is they need to raise rates to create Bank Liquidity<\/a>. What we havent seen over this entire time is Bank Liquidity<\/a> lending availability or power into the middle class or small business. So the fed made a statement and because they brought the concern of the worldwide economy that sent chils down wall streets back as well. Lets quickly talk about the nasdaq because tech earnings have been very poor other than apple that beat forecasts. Are we expecting a bounce back in the nasdaq . I think when you look at the big picture, all the markets are just really in this big consolidation shop. We can be fearful. But were 3 or 4 from the all time high. Its not like the markets are collapsing her. Author and founder of average joe. Com. Im wilfred frost. Nice to anchor with you today. And you. Squawk box is up next. [ male announcer ] at northrop grumman, we know in the cyber world, threats are always evolving. At first we were protecting networks. Then, we were protecting the transfer of data. And today its evolved to infrastructure. Finance. And military missions. Were constantly innovating to advance the front line in the cyber battle, wherever it takes us. Thats the value of performance. Northrop grumman. Good morning, a changing of the guard at the golden arches. Mcdonalds names a new ceo after the old one was retired after a year of struggling sales at the fast food giant, how to reignite this icon. Were going to talk about it. Plus social networking on the goal. Strong mobile revenue and video views and expenses soared. And if you were hoping to get a last minute ad into the super bowl you are out of luck. Spots are officially sold out. People know about that . With top brands paying up to a record 4. 5 million for just 30 seconds. You better use them well. Its thursday january 29th 2015. Squawk box begins right now. 4. 5 murder in the Second Degree<\/a> for 30 seconds. Im going to watch for the commercials this time around to see if theyre making use of this time. Welcome to squawk box in cnbc. A new report out today finds theres a surge. Retirement savers reaching record balances this last year will have the numbers that might surprise you in a little bit. Heres the other big stories were watching today. Another flood of corporate earnings on cap including alibaba Conoco Phillips<\/a> ford and","publisher":{"@type":"Organization","name":"archive.org","logo":{"@type":"ImageObject","width":"800","height":"600","url":"\/\/ia801605.us.archive.org\/11\/items\/CNBC_20150129_090000_Worldwide_Exchange\/CNBC_20150129_090000_Worldwide_Exchange.thumbs\/CNBC_20150129_090000_Worldwide_Exchange_000001.jpg"}},"autauthor":{"@type":"Organization"},"author":{"sameAs":"archive.org","name":"archive.org"}}],"coverageEndTime":"20240621T12:35:10+00:00"}