Quarter of record profits, all thanks to revival in the chip sector, but shares are falling as it prepares for Slower Growth in the mobile space. All right. A warm welcome to you. Welcome to this jobs friday. No, its not a jobs friday. Because of this. House republicans today are holding a closed door meet to go discuss plans for budget and fiscal matters as the u. S. Government shutdown hits day four. There is little action in congress as the budget impasse looks like it could very much into the debt ceiling deadline of october 17. Reports suggest john boehner has signaled he wont let the u. S. Default even if he has to enlist votes from democrats. The Treasury Department is warning a default would be catastrophic, plunging the u. S. Into the worst recession than that experienced 2007 to 2009. The president has canceled a trep into indonesia next week. And the shutdown debt ceiling on the minds of people all across the United States, Brian Sullivan moderated a Panel Discussion last night knee chfe larry fink and bill gross who weighed in on the topic. Standard bearer of the world. People look to the United States as a country that lives by principles. And just the notion, just the conversation of a potential default is unacceptable. Our central bank is the Central Banks banker. And to the extent that we set the tone either in the form of Interest Rates or stability, of course we are. And is there a possibility of a debt default like i mentioned yesterday on your program, really, no. I think its basically theatrics. He doesnt expect it to repeat year of a of it rear, but if it does, there could be several years of negative gdp. Joining us this morning from paradigm group. Been a while. Nice to see you. Is it pure theater . Well, i wish it was just theater. It has some real impact on the economy. But i think the Obama Administration is right to really put their foot down this time because otherwise it might become a very regular reoccurrence. We saw the s p having its worst session for a month yesterday, down 15 points. The dow having its biggest decline in two weeks. Are we going to weve been fairly sanguine up until yesterday. Will we get twitchity as investors . I think we. And im welcoming this a little bit. It might create a sense of urgency with republicans that they should stop playing these game. Its more the Tea Party Really than the republicans. Thats what the president was talking about to john harwood, the markets should be concerned, he would like the markets to put pressure on them. I dont think the tea party or republicans will change. Theyre representing the interests of their when they go back to their constituencies, they are doing what theyre told to do. The question is whether john boehner just cuts them loose. Something like that i think is what were expecting the outcome of this to be. I do not expect that we will actually go over the fiscal cliff or a new fiscal cliff, debt ceiling looming out there large. If you dont believe that, at some point if we get it more of a selloff, at some point you sha step in and buy, shouldnt you . If you fundamentally believe that, at some point in the weakness over the next ten trading sessions, youll be thinking there is a we discussed exactly that yesterday, that we would if this volatility continues and goes much worse, we will step in and rebalance our portfolios to buy back more equity. Equity in the states, is that or europe . More getity in the estates. Still more bull learn about the states. Europe is a bit too risky for us to go overweight there. But thats contra to what the big institutional money has been doing. They have been underweight. Absolutely. And good luck to them. Our investment approach is more around avoiding risks rather than trying to bet on the next hot fashionable thing, which we find is a lot harder. Okay. Stay with us. More to come from you. Right now lets bring up with the way youre pea an markets are trading one hour into the session. And you can see were weighted to the down side around about 7 to 3. A little bit less than that. Decline currently outpacing advancers. Ftse did manage some gains. It was up around 11 points. But not quite at the session low. Of course we had stocking dated yesterday as well as far as services pmi is concerned. That is pointing to a pretty good quarter of around 1. 2 . Today ftse down 12 right now. Xetra dax currently down 15. Cac 40 currently up 5. Laws being debated over amazon. And the ftse mib rallying again. We saw bond yields lower, as well. As far as telecon goes, currently down 1 . Jules is with us in milan. Reporter thanks very much, ross. As you said of course what we got yesterday from that Board Meeting was the resignation of the former ceo. What weve got now is the coo taking over in his place. An insider as expected taking over the role. Theyre looking for a chairman to split that role. A couple of possibilities, but what will it mean, it will mean a fresh strategy. Remember this is a company that lost three quarters of its value over the time that he was the ceo. We need to address a 29 billion euro debt pile. The market cap on this business, around 11. 8 billion euros. Need to shore up the finances of this company. Moodys warning of a potential ratings downgrade to junk for this earlier in august. They also need to improve the efficiency, streamline the business, separate out the consumer and the business divisions, too. Something else that analysts are talking about as a possibility. But the key difference in terms of strategy is that this does seemingly open the doorway for their lat ten American Assets to be sold off, the brazilian business in particular. This is something the former c he have o didnt want to do. He wanted to look at Capital Raise of potential rights issue of up to 6 billion euros. It hut him at loggerheads with the shareshareholders, they wil building their state over the next few months to around 22 . No reason ultimately given. But he walked away with a 6. 6 million euro package. The stock up 7 over the last seven days since this was announced. So the work begins i think as far as restructuring and the strategy. Back to you. Thanks very much for that. Well stay in italy with a look at where we stand with italian debt. Ten year btp yielding 4. 31 . We tipped up to 4. 7 ahead of that confidence vote on monday. And today the Senate Committee hearing is taking place on whether to expel mr. Berlusconi from parliament which is why he pulled his deputies out. But he still lives to fight another day. Lets show you where we stand as well with treasury yields 2. 61 . Interesting thing is two short term treasury day is a reezing, yields are rising on fears of a Government Shutdown. But it is meaning that yields and ten year are actually lower with 22. 63 yesterday. We did hit under 2. 6 , 2. 59 on monday. On the current he cicy markets, eurodollar 1. 3620. Got up to 1. 3646 overnight. The high for the year just over 1. 37 for euro against the dollar. Japanese yen, 97. 10. This morning down at five week lows. Bank of japan came out with announcements as expected today. Well talk about that. They talk about a moderating improvement in the economy. Aussie dollar a little firmer and the pound back below 1. 62. So thats where we stand right now in european trade. What about that Asian Session . The last one of the week. Lets go to singapore. Thank you, ross. The political stance still in the u. S. Weighing on the asian markets and the weaker greenback versus the yen turned up the heat on japanese exporters. At the nikkei 225 lost 5 on the week. Over in hong kong, index china mobile took a hit on reports of new rules favoring its competitors. And the hang seng lost 0. 3 today. Tax ba tech space in the spotlight. Samsung another record quarter of operating profit. While growth may be up close to 28 , thats still a pull back from their previous quarter growth rate of 47 . Competition in the Smartphone Market continues to heat up and analysts are less than thrilled by the prospects of the much hyped smart watch. And sam snksung share ended on floot line. Meanwhile htc ended in the green. Higher by 1. 5 . Floot line. Meanwhile htc ended in the green. Higher by 1. 5 . Klafloot line. Meanwhile htc ended in the green. Higher by 1. 5 . Tfloot line. Meanwhile htc ended in the green. Higher by 1. 5 . Floot line. Meanwhile htc ended in the green. Higher by 1. 5 . Floot line. Meanwhile htc ended in the green. Higher by 1. 5 . Floot line. Meanwhile htc ended in the green. Higher by 1. 5 . Floot line. Meanwhile htc ended in the green. Higher by 1. 5 . Latfloot line. Meanwhile htc ended in the green. Higher by 1. 5 . Line. Meanwhile htc ended in the green. Higher by 1. 5 . They are facing fierce competition along with internal issues, but after dipping in to negative territory in early trading, the stock rebounded on reports of a possible tie up with the chinese i. T. Manufacturer. Ba back back to you. Thanks very much for that. Nearly 95 of existing barclay shareholders in london took part in a 5. 8 billion pound reits issue. The fundraising was launched to help the companys balance sheet. As for the stock, down about a percent. It seems to have gone awry. What do we do with that . Youre right. Its priced into the market. The take up has been relatively high. There is a rump, but its not a huge amount in the context of the whole thing. I think really the barclays story was that they have this 12. 8 billion capital shortfall that they are plugging with a reits issue that was much larger than the market expected. They took a heavy hit on the share price. Huge discount. If youre an investor, youll follow your money. There is no other option really. And i think on the day that they announced it, you saw about 2 billion pounds wiped from bar which i clays shares. So they took a hit. What next . There is more money to be raised. They have about 2 billion in convertible bonds. They have to shrink down the balance sheet. But i think really for investors, the question will be can Anthony Jenkins do a lot of the heavy lifting that the bank has to do. In the prospectus, we saw key earnings from the bank which makes 40 of the profits down absolutely. Government wished they didnt make any money from theinvestme. Absolutely. Theyre not in vogue anymore. But barclays is our only british bank that is still a Global Investment bank. The good news was that they managed to go into the Public Market and raez tets. Thats got news. Were away from the brink of having to worry that we might have another meltdown. I think from that end, were more in normal times again. Are they exciting . No. Im still not getting excited about uk or european banks because even though at this point in the cycle we would expect banks to do really, really well, i really see that only happening in the economy is on fire. 1. 2 . Exactly. So they should do really well, but they will always have to hold a lot more capital than the american brothers and sisters because there is just so much more pressure on if you look at the bank of englands report yesterday, youll see that the increase in capital is going for uk banks and thats just an upward trend. So its a shame youre not excited because there will be a lot to invest in, but a lot of Capital Raising going on. Probably have Deutsche Bank go to the markets. Its not just the british banks. We just saw lloyds privatization. There is money in the market. There has to be. Because these banks are desperate for capital. I havent heard a politician this week say they need to lend more. Have you . Still havent got their heads around lending and Capital Raising. No. Whats interesting is orion if this is true, but the rumor was that there isnt even a working extreme around lending when theyre looking at the separation of royal bank of scotland into a good bank and bad bank. So things like that make you think government isnt always thinking. What an amazing assertion to make. For now, thank you very much indeed. Elsewhere, jpmorgan ceo jamie dime on that has given up his title of chairman of the main subsidiary unit to comply with new internal policies on multiple roles within the company. On july 1, dimon became chairmanchairman emeritus. Jpmorgan stock is up 18 this year. Do you buy the u. S. Banks over you dont like uk. What do you think of u. S. Banks . Im more interested in u. S. Banks. Id be underweight in european banks. Well talk tech, as well, today. Samsung is set to dial up another quarter of record operating profit, but the saturated Smartphone Market may hit earnings growth. Well be in seoul at 10 30. And there is a record 340 billion available for commercial Real Estate Investment, thats in around 30 minutes. And jpmorgan as we mentioned topping the globalen Investment Banking table with more than 4 billion in fees for the first nine months of the year. Well get all the details from the Thomson Reuters m a report at 11 20. And will it be the tweet smell of success for twitter as it publishes its preipo filing. They want to raise 1 billion. Losses are increasing. And the bank of japan has held steady on Monetary Policy, but warned of global dangers from the u. S. Debt debate. Well speak to the chief scr japanese economist. [ male announcer ] you know that family . The one whose eye for design is apparent in every detail . Whose refined taste is best characterized by the company they keep . Well. Say hello to the newest member of the family. The cadillac srx. Awarded best interior design of any luxury brand. Take advantage of this exceptional offer on the 2013 cadillac srx with premium Care Maintenance included. No change in the bank of japan today. It kept its Monetary Policy unchanged citing improving Business Sentiment and rising expectations for inflation. The bank said japans economy is improving moderately and didnt need any extra help at the moment to cancel the forthcoming sales tax hike next april. But they did warn the u. S. Fiscal stalemate could destabilize global markets. Joining us from tokyo, chief japan economist at rbs. Thanks very much indeed for joining us. No big surprises from the bank of japan today, but what is the risk to the country from an extended u. S. Stalemate in the political situation . I would say the biggest risk is another round of the yens preergs. For example, if the markets fears on the u. S. Debt ceiling increase going forward, it may affect on the markets to the down side. S so if the yen appreciation materialize, this is the risk scenario of japan. Trading just below 97. The yen has been unal to sustain any break below 100 against the dollar. What is the rate as which we start generating pain for Japanese Corporations . I would say if you think about the break even level of the dollaryen for the Japanese Corporation, its for the Manufacturing Sectors. I think that 92 or 93 is the absolute level for the Japanese Corporation for their break even. So at the moment, at the level of the 97 is very comfortable efl for t level for the Japanese Corporations. But if the markets fears continue to increase on the back of the u. S. Fiscal issues, i think that the economy is going to face some serious condition if the dollar yen goes back to below 90 or even close to the 92 level. Be interesting to 150e see what the policy response would be because the bank of japan did upgrade its view on capital expenditure. There is an improvement in corporate profits. Would we see more of a stimulus to offset the consumption tax hike . I would say that the 5 trilli trillion yen of the economy packages earlier this week is not enough to fully close the gap after the consumption tax hike in april next year. Of course we are going to see some contraction in the gdp numbers in Second Quarter next year. But it doesnt necessarily mean that japanese economy is going back to the recessionary phases. I mean, consecutive neglect it differen difference growth. I would say negative growth for the japanese economy in 2014 should be short lived. Ands sustained recovery from the Second Quarter next year. We have a lot of discussion on our desk around the v. A. T. Hike and should perhaps the bank of japan, therefore, have been a little bit more dovish than they were, increase what theyre doing already. Was it right really to increase v. A. T. In one goal by 60 , why didnt they just say well increase v. A. T. By 1 every six months for the next two or three years . They have to chang the menu costs, they have to change the price setting mechanisms. So it may cause a lot for the japanese makers. Also for the retailers. Thats why the government and the japanese government have decided to avoid graud increase. If you think about a 1 increase in each year is best to mitigate negative for the japanese economy. I think the government put priority to the Price Centers i think. Okay. Have a good weekend. Good to see you. Meanwhile the Transpacific Partnership free trade talks are under way in indonesia. Lets get back out to tokyo for more there. Right. Unfortunately, we can see the mouth moving, but we cant hear. Our apologies for that. I dont know if well try and fix that. Meanwhile, forget the bank of japan. The biggest event in japan this week might well as have a baseball game. You can read more at cnbc. Com. Plus find out doctor one strate why one strategist is saying keep an eye on japan despite the u. S. Shutdown. In asia on monday, the summit will be under way without president obama. Markets in china and australia will be closed for holiday, but we will expect big retail earnings in japan with interim results. Well take a short break. Still to come, samsung looks to be on a roll. Forecasting another record set of results. But investors seem to be less than ehe ne but investors seem to be less than ehe nnamorenamored. Plus the shutdown in the United States. What will the discussions be today . U. S. Equities starting to feel the strain of the Government Shutdown on growing anxiety the budget impasse will extend to the next physicaltfis over the debt ceiling. Tw to wwitter unveiled details ab the ipo. And berlusconi could be expelled from the government. And samsung is talking about another record of quarter profits, but shares are fairly flat as they prepare for Slower Growth in the mobile space. Over an hour half in for the european trading day. Mixed is where we stand. Ftse mib still benefiting from the fact the government is still there in italy. Bond market, yields on the ten year a little bit higher for treasuries. We were at 2. 63 in late u. S. Trade. Italian yields are slightly lower at 4. 3 . Dollar still pinned at eight month lows. Eurodollar not far off the highs for the year. Currently 136. 18. We did hit on january 1st, 137. Dollaryen 97. 12. Bank of japan was as expected take. Meanwhile lets get back out to the nikkei. She was telling us about the Transpacific Partnership free trade talks and you got cut off in your prime, so im very sorry. Its okay. Nice to see you, ross. Japan is looking to get rid of more than 90 to the u. S. Uk news is reporting in order to protect farmers, agriculture trade will remain offlimits. Japan is being more flexible, but the u. S. Is still pushing for high aer rate of taeaariff elimination. The 12 ttp nations are aim to go create one of the world hes biggest areas. But many officials worry it may be difficult to reach a deal since obama canceled his trip. Thanks for that. Have a great weekend and our apologies for the mistake earlier. Samsung is estimating a 25 jump in its Third Quarter operating profit from a year earlier. Lets go to seoul for more of the details. Hi, sherry. Hi, ross. The guidance that we got this morning was quite impressive George Oleary over that 10 trillion mark for the very first time, but what weve got today is a good combo of good and bad. And i will say thats exactly what happened, clearly reflected in its Stock Performance today as well just breaking even. Now, its a record, but the 25 of jump in operating profit is the slowest growth since the Third Quarter of 2011. And, too, the Semiconductor Business is expected to have helped the number this is time masking the slowing growth in the mobile business. Its a good thing and there are those who point out there isnt a competitor for samsung in the chip business. Expected to cut its output by some 14 in the fourth quarter, but then when the Mobile Division accounts for two thirds of its operating profit, investors do have a good reason to be concerned here. Remember how investors were pretty spooked by jpmorgan and more began stanley reports on slowing component orders for galaxies, actually starting in the Third Quarter of this year. So now were expecting the final readings with more details on each divisions performance as well as its forecasts on the quarters to come. So well get clarity from samsung by that. For now back over to you. Thanks for that, chery. Lets get more. Joining us is direct information for telecons in asian pacific. A. J, the mobile business accounts for 60 of revenues. So its great the chip business is doing well, but investors clearly cant get their minds off whether weve hit saturation point particularly for high he said smart phones. It is still more than 60 of revenues. Just put things in perspective, previous quarter one of the main reasons why the system i c conductor doing well is one of the Key Competitors had a fire in their key factory. Eystem i conductor doing well is one of the Key Competitors had a fire in their key factory. Miystem i conductor doing well is one of the Key Competitors had a fire in their key factory. Stem i conductor doing well is one of the Key Competitors had a fire in their key factory. Tem i conductor doing well is one of the Key Competitors had a fire in their key factory. Em i conductor doing well is one of the Key Competitors had a fire in their key factory. M i conductor doing well is one of the Key Competitors had a fire in their key factory. I conductr doing well is one of the Key Competitors had a fire in their key factory. I conductor doing well is one of the ke cont so the thumb numbers have been slightly below expectations compared with the previous quarter where they sold more than 20 million in the first two months. So thats a cause of concern for samsung. They are not showing as much demand as what analysts would have expected. And is that now the way its going to be . Is the market a lot more competitive . The market is competitive. There are so many players right now in the market. Also i think one of the key differences now is where does samsung want to focus. High end segment willing to pay a premium. I think the next level would be around the mid segment whether or not samsung wants to introduce more smartphones which are toward the lower end segments. But that also takes into consideration the price point would be much low aer and operating profit would be much lower. But i think well have to take a call on that very soon. Htc today posted its first ever quarterly loss of 100 million. And its got supply chain problems and competition. Black berry is now in play with one did it is closed offer. Can htc if you have tough it ou . Anticipating the problems are a bit different. I think bit of a more market issue rather than product issue. But whether microsoft or other factors, so would they be getting more at risk as compared to our u. S. And android. I think it will get more competitive. So it will be difficult for samsung in the next few quarters. Share55 for the year. That would cause any shareholder to say we need a radical shift in strategy. And considering that mobile is the biggest division, other shareholders want to see what is samsungs next big move around the Mobile Division. They will be focusing on the next big deal or are you going to make a shift toward samsung has already announced plans around new product its. So whats going to be that next big move. I think investors want to see a very clear direction in terms of new products or focusing on different segments. Okay. Thanks for that. When i was talking about 55 shares down, i was talking also about htc. You can now start the count down oig clo clock. Twitter made the ipo public. They are looking to raise 1 billion. It would use Ticker Symbol twtr. But didnt say where it was going to list its shares. In the filing twitter says it has 218 million active monthly users and 65 of its ad revenue comes from mobile. The revenue more than doubled in the first half of this year, but still in the red at its net loss grew 40 over the same period. The ipo is expected to take place sometime next month. Losses are increasing, but well sell you a chunk for a billion. Meanwhile facebook plans to roll out ads on instragram that it bought last year. Ads will be introduced gradually and for now users will only see them occasionally. Users will start to see photos an videos and be able to hide ads after they see them and provide feedback on why they didnt like a particular ad. Facebook stock up a tenth of 1 . Adobe systems say it was the victim of a so phisticated cybe attack by hackers who stole the source code to some of its most popular programs. The Company Believes the hackers got access to i. D. S and encry encrypted passwords from 2. 9 million mill customers. France has passed a law in an effort to protect local bookstores. Io customers. France has passed a law in an effort to protect local bookstores. N customers. France has passed a law in an effort to protect local bookstores. Stefane, is this the long arm of government probing too far into International Business or is this a just filed move to protect the small guy . They claim it has nothing to do with large Internet Companies, just a way to protect small independent book shops. We had the same debate more than 30 years ago in france when a single price was introduced to the books and when you buy your book, find it way cheaper if you go online or go to some retailers. But with free delivery offered by moth online shores, traditional book shops claim they are facing unfair competition and the price is not regulated anymore. As a result, the French National assembly has voted a law to ban free deliveries on books. If says Online Stores wont be able to accumulate the 5 discounts and the free deliveries. So probably Companies Like amazon will drop the 5 discount and continue to offer free postage. It will create award situations because some companies which has retail physical stores but also selling online will have to sell its books more excessive online than in the physical store. Its not the law has not changed yet. The bill needs to be voted by the senate. But the interesting point is that the law has been voted by both socialists and the opposition, so its likely to come into force and, yes, it is also targeting amazon, one of the giant in the sector. No differences there between french language books and International Language books. No, not at all. But you are right, ross, on where youre mentioning that the french government is not very happy with large Internet Companies. You know that recently they asked the European Union to control more Companies Like google, like facebook because of their domination of the market. Stefane, thanks for that. An interestinger to. Well talk about that more. We want it hear from you. How far should governments go when it comes to interfere management marketplace. Jo join the conversation. They stop the big guy, should there be no interference, should you interfere in places like utiliti utilities. The labor maparty saying they wt to crack down on parties. Meanwhile, still to come, he survived sex scandals, election defeats, and even being attacked with a souvenir cathedral. But could berlusconis prayers be going unanswered . Ahead of that, here is a look back at some of the former Prime Ministers highs and lows. [ male announcer ] when we built the cadillac ats from the ground up to be the worlds best sport sedan. People noticed. The cadillac ats 2013 north american car of the year. Lease this cadillac ats for around 299 per month with premium Care Maintenance included. Because what you dont know can hurt you. Urance, what if you didnt know that its smart to replace washingmachine hoses every five years . What if you didnt know that you might need extra coverage for more expensive items . And what if you didnt know that teen drivers are four times more likely to get into an accident . sup the more you know, the better you can plan for whats ahead. Talk to farmers and get smarter about your insurance. We are farmers bum pa dum, bum bum bum bum this would normally be jobs friday here on cnbc. But of course there is no nonfarm payroll report because of the Government Shutdown. Which is making it a lot harder for investors to work out what the fed will be up to. As a result, and as we slide toward negotiations in the states that may get closer to the at the time ceiling, the reaction is a little mixed. Cac 40 just up a third. The key mover this week has been the ftse mib, its been a pretty good week for italian markets. A record could be available for investment in commercial real estate next year. They reviewed nearly 3,000 managers and investors. Studies suggest low yields make commercial real estate an attractive investment. If low yields have made real estate an attractive investment, what happens if how concerned are you getting the kreeyields backing up over the summer . When you say low yields, we have looked at extra reports about the possible impact of quantitative easing being taken out of the market. The impact is negative, but maybe not as bad as you might expect. At the same time that Government Bond yields would maybe go up, gdp growth would improve. And of course it would only go up if gdp is better. Exactly. So when gdp goes up, occupiers feel better about the world and they will represent more space. So the income for investors would improve. Implication, though, was that there was a low hurdle rate. By definition when hurdle goes up, property will become less attractive, but we same time, we also would expect the arriving premium to come down, as well. Investors in a higher growth environment would be accepting perhaps higher risk for their property investments. As far as this report is concerned, what is the market that will attract most of it . Thats the interesting bit. The increase is actually biggest in asia pacific. We think that asia pacific is very interesting market. And the biggest growth in the available capital is targeting that region. Its also a region that is experiencing good growth, but it is actually quite tightly priced in some places, as well. And its difficult to buy into. Because the prime stuff presumably is already gone and its concentrated and valued quite highly. Exactly. So yields have been driven down quite significantly. With strong check growth that we still forecast for many of the countries in that region. Of course rental growth will continue in many of these markets. But the question is are you paying too much for that income growth. And so were looking at that very carefully, but of course other regions are also competing for that capital, as well. U. S. Clearly maintaining its dominance with 4 4 of capital. Interesting china and the uk the next focus. 9 chair each. And the uk economy is doing very well, were talking about 1. 2 growth for the Third Quarter at the moment. Pmi the strongestner in the world. So what is the attraction right now, what is have happening to rents in london and the uk . Prime side, weve seen an adjustment on capital values but represents are expected to grow again. If you look at initial yields, and this is the starting point, yields have been coming down on the prime side. We actually think that given a lot of the capital, about 65 of capital thats available can look at noncore opportunities. We position the next phase in this recovery will really be out of prime into noncore markets, perhaps nonlondon markets for the uk and europe also markets will that still be mixed . It will be mixed. We have already seen International Investors going into big shopping centers. Most of those of course are outside of london. And so thats a very interesting trend. We think that people will start focusing on nonprime, they will go into noncore markets. Because there is that weight of capital. And it does need to find a home and yields are still attractive. They havent tightened yet. Thanks for coming in and talking about that. Italian Senate Committee meet willing decide the future of Prime MinisterSilvio Berlusconi in the senate. It has started. Jules is in hitly and shes been talking to people about how they feel about the former Prime Minister. Thanks so much, ross. Yes, specifically i asked them actually whether the decision of the Senate Committee today should actually be to oust berlusconi from parliament. Listen to what they had to say on this. Translator id very much hope not because i was one of those who voted for berlusconi. But im still very much in doubt. At the end of the day, i cant give an exact response. Im very confused and undecided. Translator i dont know. I think he still has things left to do. Its difficult to say if it will be the end for him. Maybe wed have to pardon him. Even if he did something really wrong. He has to go out of our government, our parliament. We need a change. We cant say that in italy there is berlusconi. We have something new, something good. It is clear some undecided voices there. Now, im joined by the advice rector. You have an interesting take. You say its much a do about nothing. A lot of rumors, and a lot of humor. We have the same government, same parties supporting and same minister. So really nothing changed. What has this done for italys credibility with that europe and with the European Commission in particular . Italy has a credibility problem. They are looking for political stability. But let me say the primary budget of italy is in surplus and is one of the few countries in such economic conditions. So youre saying you think its not just about what italy needs to do. We know they need Structural Reforms and work to do, but work has to be done on the side of europe and perhaps germany, too. I think europe cannot be germanized. I mean austerity is worse now. It will lead to unemployment. So what i really hope for europe and for southern europe, of course, is that germany, tgerma government will change its austerity policy. The problem with germany is its straight approach implies economic disequilibrium in europe. So to solve the problem, they must do a lot of changes. But even germany must change significantly. You say europe shouldnt be germanized. I think the germans would argue that they have already softened up enough, given italy more team to reach deficit targets. Do they need to do far more . Youre frowning at me. Germans must be aware that its in their interests because their trade surplus is used to finance italian demand which allow German Companies to export. So now what must be definitely done in germany is to sustain internal demand in order to reduce their trade surplus. And to allow for instance Italian Companies to export in german country. Youre talking about italian exports. Youre also vice rector for china, as well. What does italy need to do to promote their products over in china . A lot of new things must be done. There isnt an integrative Communication Campaign promoting italian industrial system. So what must be done in the next future is not to promote single entity, single territory, but big asset is made in italy, so an integrated campaign aimed at promoting our asset, it is italy and not small parts of it. All right. Ross, ill happennd it back to. Thanks. Over in switzerland, financial marketing regulator is investigating several swiss banks in connection with the possible manipulation of Foreign Exchange rates. Its given no further detail. All the banks potentially involved we know that bank inup, britains financial watch dog also said it was looking to report traders manipulated benchmark if you said exchange rates. Worth pointing out theyre trying to hold the 120 mark. Swiss franc against the dollar up at 1 1 2 year highs because of concerns in the u. S. Talking of which, the nonfarm payrolls report is now the latest casualty of the Government Shutdown. With that now postponed indefinitely, what does it mean for fed policy . Second hour of worldwide can change is coming after this. U. S. Investors starting to feel the strain on growing anxiety that the budget impasse will extend. Twitter bird is taking flight. They publicly unveiled details about its ipo. Berlusconis political future in the balance. He could be expelled from parliament. And samsung expects another quarter of record profits thanks to revival in the chip sector. The shares are pretty flat as it prepares for Slower Growth in the mobile space. House republicans will hold a closed door meeting this morning to discuss plans for budget and fiscal matters. As the u. S. Government shutdown has hit day four. There was little action in congress thursday. The budget impasse could stretch into the debt ceiling dead line in mid october. John boehner has signaled he wont let the u. S. Default even if he has to enlist votes from democrats. It could plunge the u. S. Into a worst experience than that experienced in you 20 2009. Brian sullivan moderated a panel last night featuring larry fink and bill gross and they weighed in on the topic. The United States is a standard bearer of the world. People look to the United States as a country that lives by principles. And just the notion and just the conversation of a potential default is just unacceptable. Ou our central bank is the Central Bankshe extent we set for the currency and the like, of course we are. Is there a possibility of a debt default like i mentioned yesterday on your program, really no. I think its basically theatrics. Theatrics or not, it does mean we havent got an employment report today and its being postponed indefinitely. Normally wed be keyed up for that. Yesterday we saw the dow have its biggest decline in two week off nearly a percent. S p the worst session for about a month, as well. Right now the dow is just, what, ten points above fair value, nasdaq around six points above fair value. And the s p 500 just about a point and a half above fair value. European equities two hours in to the trading session a little bit mixed. Ftse yesterday was up 11. Right now its moved higher. Just flat. Xetra dax up a tenth. We were down an hour or so ago. Cac 40 up 0. 4 and ftse mib, huge relief that after the confidence vote. The dollar has been down once again near the eight month lows. Eurodollar, though, down just at 1. 3611. Dollaryen 97. 14, not much from the bank of japan earlier today. They said there is moderate recovery in the economy. But theyre not doing anything to offset the consumption tax hike because the government will come up with fiscal stimulus. And the pound today just away 1. 61, just shif ty of the eight month highs. Thats where were trading now. Lets get up to speed in asia. The political stance in the u. S. Stale weighing on the asian markets. Weaker greenback versus the yen turned up heat on japanese exporters. At the nikkei 225 lost about 1 today and 5 on the week. Over in hong kong congress, china mobile took a hit on reports of new rules favoring its competitors. And the happening sang lost to date. Samsung expected to clock in yet another record quarter of operating profit. While growth may be up close to 28 thats still a pull back from the previous growth rate of 47 . Competition in the Smartphone Market continues to heat up and analysts are less than thrilled by the prospects of the much hyped smart wash and final results will be posted by the end of this month and shares ended on the flat line today. Meanwhile taiwans htc on the other happened ended in the green, higher by 1. 5 despite its first ever quarterly loss. The smartphone maker is also facing fierce competition along with internal issues. But after dipping into negative takerer to in early trading, the stock rebounded on reports of the possible tie up with the chinese i. T. Manufacturer. All right. Now the u. S. President barack obama will be a no show in the summits in indonesia next week. The president is dealing with the government shut down oso he canceled his trip. That may work to chinas advantage. Today as far as theed agendagen would have been all about the jobs report, but its not. It has postponed the data indefinitely because of the Government Shutdown. There will be five fed girls speaking or taking part in Panel Discussions today. Minneapolis fed president , fed governor, new yorks bill dudley, dallas Richard Fisher and richmonds jeffrey lacker. And joining us today, julia coranado. Nice to see you. The nonjobs friday, julia. What are we supposed to do . How are we going to work out whats happening with the economy . Well, we get a new pieces of private sector data here and there. But, yeah, youre asking an economist. I think what were hearing from fed speakers is that this is one of the reasons they decided to be cautious without data to at that Time Temperature of the economy, theyre likely to continue to be cautious. Yeah, so if we vus price ourselvour just price ourselves off the political chat. The fed is out of game, they keep buying, so we just assume thats going to happen. Chat. The fed is out of game, they keep buying, so we just assume thats going to happen. And now we focus on the debt ceiling and how far the politicians in d. C. Will push the game. Its gone farther than we had thought it would. And there is pretty much a stalemate in washington. We dont think well default on government debt, but there is plenty for treasury Bond Investors to worry about in the next few weeks. Its kind of interesting the action the treasury bond, weve got two year, the short dated notes, yields are going up and long he said, theend, they are. Does that make sense . It makes sense if you think the government might miss a pavement or two, so you get the yields on the bills that are due in october and november spiking on those worries. And yet the flight to safety as you say pins down the longer he said of the yield curve. So it makes some accepsense in twisted politician driven world we live in. It doesnt make sense from an economic standpoint. And wont we get through all of this, hopefully we can settle into more sensible markets. Bearing in mind that as you say one of the reasons the fed clearly decided not because this was the scenario i guess they were worried about and they did say that, how much does the sort of resolution we get depend on what the fed does next . If we only get some bill that sort of means we have to come back in two months and start the whole process again, presumably that will keep the fed from doing anything. Well, yeah. There certainly is a worry that in terms of the political set skrup we have in d. C. , its not going to change, it will be the same cast of characters for the next few years. Uskrup we have it going to change, it will be the same cast of characters for the next few years. Pskrup we have i not going to change, it will be the same cast of characters for the next few years. We have in d to change, it will be the same cast of characters for the next few years. So we could continue to be in a repeat cycle. Does that mean the fed has to do qe forever . Hopefully not. It waumt the onsnt the 07only fed decided to be cautious. If the u. S. Economy were to show a more desis cisively strong performance, the fed would be most of comfortable step back even though productive. We have estimates Deutsche Bank says its more than two week. What will be the Economic Impact in your view . I agree that the direct impact of a shutdown for several weeks were talking about a few tenths on gdp, not a game changer. Keep in mind a lot of the government is still functioning. Social security checks are going out. People can travel around the country, tsa is still operational. So a lot of the key functions of the government are functioning. The direct impact of what is shut down is relatively small. The bigger worry is if this drags on, if there is brinks map sh mapman ship over the debt ceiling, that could mean a big are hit to consumer confidence, to business confidence. Were going into the Holiday Shopping season. So i think thats the biggest concern. All right. Stick around. Well come back to you. There was hype around washington, as well, as a woman rammed her car through a barricade at the white house and then raced towards the u. S. Capitol building. Thats where she was shot and killed by police. Two officers were injured. One hit a barrier during the chase and the other struck by the suspects car. There was a 1yearold child in the vehicle who was not hurt. The house and senate was put on lockdown during the incident. The woman has been identified as Miriam Carrey from connecticut. Relatives said she had been suffering from postpartum depression. Still to come, what happens if a hurricane hits during the Government Shutdown . That could happen. Well get latest from the Weather Channel. Ocean gets warm. The peruvian anchovy harvest suffers. It raises the price of fishmeal, cattle feed and beef. Bny mellon turns insights like these into powerful investment strategies. For a university endowment. It funds a marine biologist. Who studies the peruvian anchovy. Invested in the world. Bny mellon. [ male announcer ] the parking lot helps by letting us know whos coming. The carts keep everyone on the right track. The power tools introduce themselves. All the bits and bulbs keep themselves stocked. And the doors even handle the checkout so we can work on that thing thats stuck in the thing. [ female announcer ] today, cisco is connecting the internet of everything. So everyone goes home happy. Headlines today, twitter has filed for an ipo of up to 1 billion. And samsung forecasts another quarter of record profits, because slowdown in smartphone growth spooks investors. France passed a law preventing online book sellers to offer free delivery in an earth to protect local bookstores. Stefane has more. How much of a threat is this . Whats the thinking . Its likely going to be voted because at the national assembly, the project has been backed by socialists, but also by the opposition. Its not the first time the french go. Is trying to attack growing dominance from internet giant. A few weeks ago, france called on the european upto regulate Global Internet companies leak amazon, but also like facebook and google to counter the dominance on online trade and services. This time its officially to protect local book shops, but its targeting clearly amazon which is offering free delivery for its books as part of the regulated price of the books in france, Internet Companies will have the choice between offering a 5 discount on the retail price of the book, thats the current law, or offering the free delivery. But thonot both of them. Some companies have both online and physical stores in france and in that case, the price of the book online will be higher than physical stores. Its amazing. Well see what happens. Thanks for that stefane. Weve been asking just how far should governments go when it comes to interfering in the marketplace . The wisdom of punishing many to protect a few is questionable and likely to be counterproductive. Join the conversation and get in touch with us. Email, tweet. There could be reasons for bringing the price down for the poor. But is that too much interference. Gulf of mexico and residents are making preparations for the first major storm of the season. Forecasters say drop p cal storm karen should reach hurricane strength by late tonight. Reynolds wolf is at the Weather Channel in atlanta with the latest. Whats the path of this looks like . Well, the latest we have is that this is still going to tip it march. And i have to tell you on sat complete right now, it does not look all too impressive. A couple things working against the system. You have very dry air a into the western gulf of mexico. Still very deep tropical convection just to the right of center. But you were asking what direction might this system take. Well, the latest we have for it in terms of the forecast models, each of these lines represents a different direction that it might take, a different pathway. All of them seem to be in agreement of more of a northerly trajectory before veering off towards portions of the northeast. The forecast that we have for the National Hurricane center shows that we anticipate with those winds of 60 Miles Per Hour it may indeed strength then to 65 Miles Per Hour by saturday evening local time here in the United States on the gulf coast. Possibly making a pass near new orleans of winds of 70 and then weakening significantly to 40 Miles Per Hour american winds, 30 Miles Per Hour american winds as we get into both monday and tuesday early. The key reason for it weakening is because it will be away from its primary power source being that warm water. Despite that, it still could provide quite a bit of rainfall. Take a look anywhere from, say, 3 to 5 inches of rainfall locally up to 8 inches of rain. Still a flooding situation that could occur. Certainly for parts of the gulf coast here in the United States, pensacola, mobile bay and perhaps even into new orleans. Well send it back to you. Reynolds, okay. Thanks for that. The interesting thing from where were sitting, weve seem to have had a pretty light season for storms. Any reason for that . Theres as many reasons as there are grains of sand on the plan either. Many reason why is weve had certainly a quiet season. But the problem that we have is that in our part of the world here in the United States, for the atlantic basin, certainly in the gulf of mexico and are a caribbean, the season can extend through november. So we have quite a ways to go yet. There is time for more intensification and more storms. All right. Thanks come, fees totaled more than 56 billion in the first months of the year. Which bank booked the most . Building animatronics is all about getting things to work together. The timing, the actions, the reactions. Everything has to synch up. My expenses are no different. Receiptmatch on the business gold rewards card synchronizes your business expenses. Just shoot your Business Card receipts and theyre automatically matched up with the charges on your online statement. Im john kaplan, and im a member of a synchronized world. This is what membership is. This is what membership does. Shares of barclays trading up slightly after they announced nearly 95 of its existing shareholders took part in a 5. 8 billion pound reits issue. Barclays hopes to raise 300 Million Pounds from the leftover stocks. The socalled rump. The fundraising was launched in order to help plug a 12. 8 billion pound hole in their balance sheet. Jamie dimon has given up his title of the banks main subsidiary unit to comply with new internal policies on multiple roles within the company. On july 1 he became chairman emeritus of Jpmorgan Chase bank. Their stockstill up away 18 this year. Down a quarter of a percent today. It was jpmorgan stopped the table for the first nine months of the year booking 4 4. 4 billin in fees. The study shows fees from Global InvestmentBanking Services are 3 from the same period in 2012. Julia is still with us. Chief economist for north america at bnp paribas. Good to stick around. By the way, how are you dealing with this withdrawal from the jobs . Its not easy, ross. Its not easy. This is the highlight of our month. So it will be a very quiet friday. We dont quite know what to do. Just give us some thoughts, your view on the actual strength of the u. S. Economy. How much more strength is there to come in housing and where is job creation coming from . Well, so on the housing front, its been disappointing how quickly Housing Demand rolled over as Mortgage Rates rose. You can look at a 4. 5 Mortgage Rate and say thats extremely low by historical standards and yet consumers backed away pretty quickly. So thats been a big disappointment. Wed like to see if it doesnt bounce back some. But it does seem to be less of a driver of momentum going into 2014. Who is driving job growth . Its been premly driven by the service sector. There is a notion of a manufacturing renaissance in the u. S. And the Manufacturing Sector is doing fine. But its not really a job creator in the u. S. Anymore. And what were seeing is tourism is a huge driver of jobs. Its creating about a third of all new jobs. And then the health care industry, an aging society means we need to take care of a lot of people, so thats a job creator. And thats a bit of a worry because those two sectors are fairly low productivity sectors. A lot of those tourism jobs do not have benefits or very high wages. So there are still question marks hanging over the u. S. Economy. We also talked earlier about jpmorgan bringing in the most fees. Matt, what have they done particularly well . Is it because of m a fees are up . Whats been going on . M apma and a fees are actual down. Capital markets are driving the fee story. And skrchjpmorgan picked up 0. 4 market share point over last year. Will we see more u. S. Firms targeting europe . Thats the big question. Cross border m a has been a driver for the past five years. Its down 19 over 20 twefr12. And you would expect to see the cross border piece to come back as we move into the next cycle of m and a. Europe seems like a pretty logical place for acquirers to be looking as well as some of the emerging market which is we see up 1 over 2012. And what about debt Capital Market fees. Debt Capital Market fees are just about even from last year. Up just 1 . But they do account for one third of all the Investment Banking fees that were taken in during the first nine months. Weve seen records in the high yield market, were seeing the record Corporate Bond from verizon which has powered much of all the stories in invest the banks on the m a side as well as lending and corporate debt side. So the debt Capital Market side is still driving year to date picture, but we did see quite a bit of weakening in the Third Quarter. Overall fees were down 24 compared to the Second Quarter. So id expec weakening in the b earnings we see next week. Matt, thanks for that. Still to come, is commercial real estate soaring . Its as simple as this. At bny mellon, our business is investments. Managing them, moving them, making them work. We oversee 20 of the worlds financial assets. And that gives us scale and insight no one else has. Investment management combined with investment servicing. Bringing the power of investments to peoples lives. Invested in the world. Bny mellon. This is worldwide exchange. The headlines today u. S. Markets starting to feel the strap of the Government Shutdown. Growing anxiety that the budget impasse would stepped to the next fiscal fight over the debt ceiling. The twitter bird is taking flight. The social Media Company publicly up veiling details about its ipo. Berlusconis political future in the balance. He could be expelled from parly the. And samsung prepares for Slower Growth in the mobile space. Its not jobs friday because of the shutdown. Anyway, welcome to you if youve just skroip ejoined us estate s. U. S. Markets getting twitchy about the ongoing shutdown and as we get closer to the debt ceiling deadline. Biggest decline dow in two week. S p having its worst season for around about a month or so. Today the s p is currently just two points above fair value. Nasdaq is about six points above fair value and the dow around about 11 points above fair value. European equities have been trending a little bit higher. Certainly as far as the cac 40 is concerned and ftse mib benefitinging fr infrom the fac Coalition Government did hold together and berlusconis party didnt bring down the government. Xetra dax and ftse 100 are fairly flat. Weve been talking about the fact we have no jobs data today and that the fed was worried about the government, as well. Everybody thinks that we wont breach the debt ceiling, but something has to change with the politics. S thats that come down to mr. Boehner saying heave ho to the right wing, the tea party part of the Republican Party . Unfortunately, it looks like skron boehner has to go against the majority of his party. I dont think weve yet gotten to do that. The question is what pushes him to do that and it does require that we get closer to the debt ceiling. Possibly a few no are dmore day market turmoil would focus attention to washington. President obama asked for a little bit more market turmoil the other day. So its a difficult political cam could you husband and unfortunately right now political pli, n politically, the shutdown is working for the democrats and the Tea Party Republicans who are sort of getting support from their boating base. Democrats an republicans who are sort of getting support from their boating base. Somebody has to fall on their sword and it look like the centrist republicans that will take the biggest hit. What will be the Market Reaction that would help . The dollar is clearly weakened, but that doesnt impact politicians. So what will be putting more weight on them . If equities fall out of bed or if something happens to bond yields . Good old equities selloff that hits their voters 401 k Retirement Savings plans and starts lighting up the phones, that tends to be what getting their attention. So nothing weve seen yet is particularly troubling. But if we got a more sustained market downturn in equities in particular i think they would start that would help influence the debate, give them something to give them an out exceptionally. Other than that, the Government Shutdown, you know, were talking about a few tenths on gdp. This is not something that is really painful to most americans. Again, most of the essential functions are still operating. You cant go to a national park, true. The data that we love so much isnt coming out and that is problematic in certain areas. But for the average american, theyre not really feeling the pinch. No, not yet. Stick around. Meanwhile demand for real estate is skyrocketing as more Companies Seek to expand their property portfolios. A new survey shows that despite continuing Economic Uncertainty and the prospect of rising Interest Rates, confidence in commercial real estate is at an all time high. Our next guest says the spike in demand is a strong indicator of continued economic expansion. Joining us for more, managing director and chief Strategy Officer at marcus Real Estate Investment services. Julia still with us, as well. Good to see you. Just talk about the so far its been a low hurdle rate for investors into real estate because bond yields have been low. When they were spiking up towards 3 , were you getting concerned or not . Good morning. Thanks for having me on the show. Not at all. Weve seen the demand for commercial real estate build up relatively steadily since 2010 and then 11 and 12 and so far in 2013, sales volume is up over 20 . So the demand has been quite balanced coming back into the market. Enthusiasm is grounded by the fact that property fundamentals are improving, the yield row fi profile is competitive. And weve seen low Interest Rates and more availability of financing. So would you be comfortable if bond rates were going up, treasury yields were going up because it was an economic recovery . Because although that would create a higher hurdle rate, it would presumably mean that would be who are people wanting to rent and occupy. Exactly. Only reason Interest Rates have been on the move, if the gli is doing good, there are more job, more need it for space and represent growth should accompany the debt cost. Whats happening with apartment vacancieses for those professional apartment be investors . S for those professional apartment be investors . For those professional apartment be investors . 579menapartments were the fi sector to recover. They have gone from 8. 5 vacancy on a National Basis down to 4. 5 . They are in very good shape. Weve seen very strong represent growth in the past three or four years. And its beginning to taper off a bit only because the market is pretty well balanced. But if you look at the pent up demand, even despite recovery in the housing sales, were still pretty optimistic about the performance of the apartment sector. Julia, weve seen the commercial Property Price index down 25 . Its now rebounded by 26 . When you look at that, what does it mean for the rest of the economy, what is it telling you . The u. S. Economy is slowly healing. And i think we are seeing the multifamily residential sector as was just noted is strong because there is a shift towards demand in rental and so there is plenty of demand. And i agree that that looks likely to remain reasonably robust. People do want to rent. And that means that the construction needs to be channeled into that sector. And then other sectors, as well. I mentioned tourism. So anything related to that. Hotels, shall ome retail. Those are seeing Strong Demand because we have Record Number of overseas visitors every month. And that means those sectors are doing well. So there are stories of strength in the u. S. Economy and it is a story of healing even if the overall numbers are still fairly subdued. And so the commercial market is feeling that. And just a final question about mortgage approvals. Do you think this shutdown will hurt mortgage approvals . Because there is a question mark you wont be al to prove your income through irs statements or whatever it is. Sure. That is a concern. Statements or. Sure. That is a concern. Income througr whatever it is. Sure. That is a concern. If the shutdown lasts longer than a couple of weeks, that becomes a problem. We have a 30 to 60 day process that gives us a little cushion, but it is a serious problem and as was mentioned, the lack of visibility on the Economic Data is a major issue. But were hoping that this wont last much longer than what weve seen in historical periods like this. All right. Good to see you this morning. Thanks for joining us. Looks nice there in San Francisco. I dont know how youll get through the day without the employment report, but find some alternative entertainment if you can. Many ill just have to go home early. Thats not a bad idea. Always a good idea. Thank you both. Well take a short break. Still to come, it may be one of the biggest trending topics today. Going public. Twitter has taken the wraps off the details of its ipo. Well run through the numbers. [ taps baton ] [ dings ] [ male announcer ] every thought. Every movement. Carefully planned, coordinated and synchronized. Performing together with a single, united purpose. Thats what makes the worlds leading airline. Flyer friendly. Building animatronics is all about getting things to work together. The timing, the actions, the reactions. Everything has to synch up. My expenses are no different. Receiptmatch on the business gold rewards card synchronizes your business expenses. Just shoot your Business Card receipts and theyre automatically matched up with the charges on your online statement. Im john kaplan, and im a member of a synchronized world. This is what membership is. This is what membership does. Because what you dont know, can hurt you. Urance. What if you didnt know that posting your travel plans online may attract burglars . [woman] off to hawaii what if you didnt know that as the price of gold rises, so should the coverage on your jewelry . [prospector] ahh what if you didnt know that kitty litter can help you out of a slippery situation . The more you know, the better you can plan for whats ahead. Talk to farmers and get smarter about your insurance. We are farmers bum pa dum, bum bum bum bum rekaccap of the headlines, shutdown enters its fourth down. Twitter moves closer to a public debut filing for an ipo of up to 1 billion. Sa and samsung posts another quarter growth, but slowdown spooks investors. Always more than a month after announcing its ipo, twitter has publicly unveiled details about the offering starting the count down clock so what could be the most anticipated deal since facebook. Kayla tausche, they seem to be a long way from making a profit. Yeah, this very never made a profit. Twitter made public its s1 filing with the sec furs afternoon which it had kept secret under the rules of the new job or jumpstart our business agent. Theyre looking to raise 1 billion, derived mainly for registration purposes. Cgent. Theyre looking to raise 1 billion, derived mainly for registration purposes. Ent. Theyre looking to raise 1 billion, derived mainly for registration purposes. Nt. Theyre looking to raise 1 billion, derived mainly for registration purposes. T. Theyre looking to raise 1 billion, derived mainly for registration purposes. It will likely change as they go on their road show. It will use the Ticker Symbol twtr. It didnt say where it will list its shares on the New York Stock Exchange or the nasdaq. But twitter says it has 218 million active monthly user. Thats as of june 30th. And 65 of ad revenue comes from mobile. Twitter revealed revenue nearly tripled last year. First half of this year, revenue more than doubled to 254 million. A little later than investors had expected and also notched a net loss of 69 million as costs soared. Those numbers are mostly in line with the estimates of outside analysts, but again, we had been hoping for full year revenue of 580 million. Among the risk factors, twitter warns its heavily reliant on ad revenue. The company only began selling ads in earnest in 2010. Says more than 87 of its revenue came from ads. But priests have fallen over the past five quarters. That decline says it the result of efforts to expand its available inventory and change its algorithms to distribute ads more frequently each day. So more ads, but theyre getting cheaper by the minute. Were also learning about the stake holders in the company which was spun out of a struggling San Francisco startup in 2006. Cofounder Evan Williams says the Largest Holding at about 12 , jack dorsey another founder just under 5 . And the ceo has a 1. 6 stake. And while there have been many comparisons made to facebook, twitter is much smaller. Facebook had ten times the am revenue and four times the monthly users when it filed its e ipo papers. Nm revenue and four times the monthly users when it filed its ipo papers. Nm revenue and four times the monthly users when it filed its ipo papers. Annualm revenue and the monthly users when it filed its ipo papers. Revenue and fou the monthly users when it filed its ipo papers. But nonetheless highly anticipated. Well also bring in michael chase from social radar. Michael, kayla has gone through all the details. Where do you think knowing what we now know this stock should price . I think youre going to see pricing in the high 20s, low 30s. But i think thats just where it prices. Because if take you a look at just some of the early metrics and numbers they put out, what youre seeing is a company that has great revenue growth, the majority of their money coming from mobile advertising, which every knows is continuing to grow, but most importantly, the fact that even though twitter is a household name, they still only have just over 200 million active monthly users which gives them huge opportunity for growth still here and as well as around the world. 75 of the revenue is from the u. S. But three quarters of the monthly users are outside it. Is that an opportunity or a problem . I think thats a big tup opportunity. If you look at facebook or linked in or many private sites, of course they see initial growth coming from the United States and north america. In or of course they see initial growth coming from the United States and north america. And then very quickly in other sector, you see them follow the trends that happen here in the u. S. So you can expect twitters International User base and revenue to grow significantly over the next several years. Clearly we dont care about ro profits, but at some point they have to make some money. I think twitter is reinvesting as much as possible back into that growth engine. Even the revenue numbers, even if theyre coming in slightly lower than what the analysts were initially predicting, no one can disagree that their growth rates are really where the long term stupts will come from. So if twitter can continue to make the right investments and grow that international base, then youll start seeing pretty large profits i think in a relatively short amount of time. And how are they going to monetize this . Can they put ads in without disrupting the flare out . What is the trick here . What is the golden egg . I dont think its a mess industry of where the real Revenue Generating opportunity is for twitter. Its not dissimilar from the way that facebook makes their money or linkedin makes their money. Right now twitter is the goto place for real time information on news and events that are taking place around the world. You have over 200 million active users on a monthly basis who go there to get their information. So there is a big opportunity for twitter to continue to insert right into the twitter feeds or connect directly to those users and provide them with targeted sponsorships or partner with Large Companies or brands that want to get directly in front of the end user. And theyre just starting to it do this. Remember now, twitter has only ban putting ads in twitter streams and doing partners with large brandsthis. Remember now, twitter has only ban putting ads in twitter streams and doing partners with large brands just in 2010. So i think there is a lot of runway in front of them to continue to build upon that. All right. Good to speak to you. Michael chase, social radar. Kayla tausche had to go and we thank her, as well. As u. S. Shutdown puts the could i bosh on the jobs report, how will it play out in well previe the trading day ahead. Potbelly priced its offering at 14 a share on thursday which was before the expected range. The deal raised 105 million before the potential sale of additional shares to underwriters. And facebook plan it is to roll its ads on instragram. It i roll its ads on instragram. Sit roll its ads on instragram. It roll its ads on instragram. T is roll its ads on instragram. Is roll its ads on instragram. Is t roll its ads on instragram. They will be introduced gradually. They will be able to hide ads after they see them and then provide feedback on why they didnt like any particular ad. Facebook stock this year up about another third today in frankfurt. And a dough bisystems says it was the victim of a sophisticated cyber attack. They believe they got information on 2. 9 billion customers. U. S. Futures ahead of a nonjobs friday today just a marginally higher. The dow currently some 18 points above fair value, nasdaq at the moment is some 8 points above fair value. Dow biggest decline in two weeks. 136 points lower. So what are investors to do with the ongoing on capitol hill . Here are what some of the experts have been telling us this morning. Actually i prefer to hold equities or bonds that pay you every year. And unless you get key turning points, youre destined to lose money. So weve decided to actually sell the commodities. Buy short term u. S. High yield. The supply of gold is very limited which makes it have Intrinsic Value for that reason. So i guess investors usually rely on the dollar as a safe haven. But obviously the dollar wont hold as much value as it used to. Use fees is almost a competitive for you guys. I actually have it sitting on high desk scrolling through and the information you put on is very useful and therefore i do wonder whether eventually you will see twitter starting to grow because it provides such a great service. So what is on the agenda today . Well, it would have been the jobs report. But the Labor Department made it official, its postponed the data indefinitely because of the Government Shutdown. But there are five fed officials speaking or taking part in Panel Discussions today. Well hear from lakota, jeremy stein, bill dudley, Richard Fisher and jeffrey la lacker. We asked is this a step too far for government interference. Matthew via twitter said we consider it past actions against companies, it isnt surprising its a french company. Anyway, there you go. That debate will continue to rumble. For more, go online to cnbc. Com. European equities as we head towards looking at the u. S. Start of trade today have just turned up a little bit. So theyre looking a little bit higher. Coming up next, its squawk box. The countdown to the equity markets staed site side, whatev happens, we hope you have a profitable day and a very enjoyable weekend. [ male announcer ] more room in economy plus. More comfort, more of what you need. Thats. Built around you friendly. Twitter is trending. They release new details about its epo. President obama canceling his trip to asia as the shutdown enters day four. The dow trades below 15,000 on debt ceiling concerns. And its squawk jobs friday. Although no numbers from the government. But our team has come up with some unofficial Employment Data to fill the void. Its friday, october 4, 2013. Squawk box begins right now. Good morning. Welcome to squawk box. Im becky quick along with joe kernen. Andrew ross sorkin is out today. Normally this would be a jobs report friday and wed be telling you about the expectations for the month of september. But the Government Shutdown forced the Labor Department to close and that means no report today. Of course that Means Nothing to trade on today. If you take a look right now, the futures are indicated up by about 12 1 2. Shut down and i go oig has been driving trading. If youre looking at unofficial jobs data, squawk will provide its own jobs report with the help of steve liesman. And well be getting help from mark zandi starting at 7 00 a. M. House fwchlt ochlgop leaders wi today. And president obama is canceling plans to