Transcripts For CNBC Worldwide Exchange 20131108

This morning. I said it earlier, we were up in italy 8 . We were up in spain 4 . To italian stocks, Telecom Italia trying to bolster sales. Plus, a jump in chinese exports, but as beijing leaders gather for their policy meeting, just how strongly will they push ahead with economic reform . Announcer youre watching Worldwide Exchange, bringing you Business News from around the globe. Hello. Weve got a full bumper show to end the week, but if that wasnt enough weve got jobs friday coming up and the impact of the Government Shutdown, as well. So on todays show, as they gather in beijing, some of the big question is whether they will agree on any Major Economic reforms. The anticipated meeting happens behind closed doors, but eunice will give us a preview at 10 15 cet. In a bid to boost finances and dial into the brazilian market, our guest says people might be overlooking the fact that there is still quite a lot of potential in italy. Thats coming up in half an hour. Plus, could shale gas energize the fuel industry . Well be joined by a strong advocate of the technology, the socalled fact master. And at 11 20 cet, well be joined by the founder of good night to talk about the massive opportunity he thinks is presented by big data, created by the continued growth of digital. As i mentioned, thats not enough. Yes, folks, it is jobs friday stateside. Government shutdown expecting to make the report one of the weakest of the year. Well preview the employment numberes and how the fed is going to reaction to it. Thats coming at 11 30 cet. As ever, if youve got any thoughts, comments or questions, we would love to hear from you. Email us, worldwide cnbc. Com. But first, the s p has downgraded frances Credit Rating for the second time in nearly two years. At the same time, the agency changed the outlook to stable, mean theres now a one in three chance of further changes in the next two years. Here is a view of what our guests have been saying about the downgrade so far. Im not surprised about whats going on in france now through the downgrade this morning. I said it earlier, we were up in italy 4 , down in spain. If improved, it will only turn positive in our business and, again, we are ahead six to nine months of the economy and it will only turn positive in our business. The youth unemployment in france is about 26 , which is above the european zone average so those are not good signs. To be honest, france has not done any labor market reforms. France is stimulating the economy on labor market reforms, nothing has been done yet. And i think its really necessary. We have a Balance Sheet structure. We have a triple e plus rating. This trading has been confirmed in the month of august. And we are entering the value hike where after a few years of heavy investment and cash out, due to the plans to have been building in the usa we are now traeming down our cap ex and we are benefiting from the ramp up of these two new plans. When you see the further Weight Reduction from yesterday evening, then certainly eurozone and the euro not yet over its economic problems. And i think that all signals which push the country for stopping the reforms and continuing reforms are very important. As far as the cac 40 is concerned, this morning it is down 0. 75 . Stephane has more reaction for us out of paris and joins us now. Hi, stephane. Hey, ross. Obviously, the french finance minister disagrees with the guidance that was provided this morning by the s p, in a statement regrets the decision of s p. He signals that france still enjoys one of the highest ratings in the world and thats the french debt is one of the most liquid in the eurozone. And he also says that this rating is reflecting some strong assets of the country, starting with its demography, the quality of its infrastructure, the high level of education, the strong productivity of its labor force and, of course, the high Savings Rates in the private sector. S p, of course, doesnt share the same view. The reforms have have been implemented by the socialist government are not strong enough, deep enough to raise the midterm Growth Prospect for the French Economy. I also believe that the country has lost its ability to xwlempt some deep reforms because of the high and record Unemployment Rates at the downgrade from s p. Comes just three days after the European Commission issued its growth Economic Forecast for france saying that even if the country will avoid recession this year, it wont be able to contain its public deficit, which is likely to reach 3. 7 of gdp in 2015 which is much higher than the 3 targets set by the government. All right, stephane, thanks very much indeed for that. Plenty more to come on the statements out from stephane. Meanwhile, lets get a reaction from adam cole. We saw the euro yesterday down to 1. 329 the 5, adam. A little firmer today. Where is the bottom of this range, this fall from the euro twoyear high of on 1. 3833. I think not with standing the risk on its own fundamentals, we think the euro will find composure relatively quickly and still expected the end the year back in the high 130s. So the damage from the ecb move i can will be ready to be downgrade. But on its own fundamentals, this is a problem and the enormous down side from here. Is this not a relative gain, adam . Is this a question whether the ecb is going now fast or slower than the fed in terms of their loosening or tightening, if you know what i mean . Yes. I think that was the principal moves in the ecb yesterday. And the rate move in itself is not of enormous consequence. What it does is leave the door open to further easing. But our reading is that the ecbs hurdle is still quite high for implementing another round of easing and in that sense, i think the euro will find comp e composure relatively quickly and will stabilize and push back up towards the recent range. Mario draghi headed towards interlieing price targets. He points specifically at the you are row zone inflation data and the effectiveness of Forward Guidance, as well. Lets listen to what he has to say about that. We are pretty sure that the Forward Guidance has been effective in reducing volatility of the money market rates. Its also been effective in reducing the sensitivity of money market rates to news that would not warrant any change in fundamentals. Yeah. So look, is the Forward Guidance working or was it too opaque . Or were you pleasantly surprised, adam, that they surprised us . Whether its working, its difficult to know. But i think in a relatively dilute way, the Forward Guidance, not just for the ecb but for the other Central Banks using it probably is working relative to where we would be in the absence of that Forward Guidance. And i think if there was a surprise in the ecb statement yesterday, its that they did keep that easing bias in place and the ecb clearly wants to keep the threat of further easing overhanging the market. But as i say, realistically, the hurdle from using that is still relatively high. But here is the point, adam. There is a threat to further easing from the ecb. All were talking about with the fed is when they do less easing. Isnt that what should theoretically push easing forward . If you look at the fed Balance Sheets, its a reasonable sumgdz in the u. S. And reasonable assumptions on ltro in the eurozone next year. The fed Balance Sheet will expand more quickly than the ecbs for many, many months yet. The question that i have on that is whether the two simple balance of the sheets is the current driver in the market and you need to identify the champs through which the qeo liquidity injections drive markets. And i think its more complex and certainly in terms of the simple sized Balance Sheets, the fed is getting bigger more quickly than the ecb. Adam, about to see you this morning. Thanks very much indeed for that. Let bring you up to speed with where we stand right now for Global Equities on this last doppler radaring day of the week. Yesterday post the ecb we got a rally going on. The german markets were up over 1 right now. On the dow jones 600 around about 8 to 2. The ftse ended up down 44 points. We got that rally post the ecb and then we got the u. S. Growth numbers out and everybody said, oh, maybe the fed wont be tapering or will be tapering. Sorry. So we sold off the ftse 100 down 0. 3 . The xetra dax currently down 0. 5 . Cac 40 down 0. 7 and the ftse mib up up 0. 2 . Tbills around 2. 16 . In fact, despite the fact that the Economic Data out of the u. S. Had this impact, it didnt really impact treasuries. They went the other way. Italian yields, 2761 . Bund year, 1. 698 . Thats why we stand in europe. How did we finish the week in asia . Sixuan has the details out of europe. Thank you for that, ross. Asian markets came under pressure ahead of the u. S. Jobs data. In china, better than expected october trade numbers werent able to lift markets. With investors still focusing on the Party Meeting and inflation data due out tomorrow, the shanghai composite ended lower by 1 . Meanwhile, the nikkei 225 lost 1 falling to a onemonth low in south koreas kospi and down 1 as Samsung Electronics continued to tumble as its dividend plan disappoints. Chinas financials trade lower on the certainty over reforms in the sectors. Brokerages led the losses with haitong and southwest securities falling by about 7 in todays trade. Beijing plans to launch a third round of bid toes develop its before the year end. And compared to the last round, all major state owned oil majors will participate in this auction, showing confidence in the sector and shares are off their session lows, but theyre still in the green at the moment. Back to you, reduce. Sixuan, thank you very much indeed for that. Still to come, as sixuan said, will chinas third party please or disappoint . Well see what Economic Reforms could come out their weekends meeting. Its a really big deal. Well get more when we come back. At farmers, we make you smarter about insurance. Because what you dont know, can hurt you. 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 october trade picks signals that Economic Growth continues to rebound. Exports rose 5. 6 on the year, way more than expected following a decline in september. Imports grew a solid 7. 6 . Attention now turns to sector and inflation activity due tomorrow. Eunice joins us in beijing ahead of this. Eunice, first of all, the latest on the trade data before we talk about, you know, whats going to happen over the weekend. What is the view currently of the strength and sustainability of growth . Well, thats a big question. Right now, people are talking about, though, that the main take away is that we are seeing a pick up in global demand. Because if you look at the on october export figures out of china in combination with korea and taiwan, it really does tell the same story, which is that were seeing demand pick up in the United States and in the European Union and because of that the export countries out here are benefiting including china. In terms of your question about sustainability, thats a big question mark, but what people have been talking about is that at least these set of figures, the october numbers, are more in line with what we saw in july and august. You mentioned september. That appears to have been an aberration. People are talking about how maybe that was our seasonal entirely because of a big holiday in autumn. But a lot of people are not quite convinced that we are out of the woods yet here in china. Lets talk about this. Many are watching what new reforms will come. Will this be as big as the one they had in 1978 . Well, you know, thats what a lot of people have been talking about here. There are many people who do believe that. A lot of people have been discussing whether or not really china is on the verge of one of its most important moments in economic history. President xi jinping are supposed to be behind closed doors and thrashing out a blueprint for economic reform. When chinese president xi jinping came to office, he was heralded as a new force to change chinas economic direction. But whats happened so far . He has talked many times about reforms he sees in power. But so far we have seen few reforms. Will this weekend policy meeting be his turning point . Its seen as an important conference in a chinese leaders turn when economic policies are formed by the communist part elite. The conference this year is being touted as one that will be as dramatic as 1978 when the great reformer signaled a new market oriented direction for china. 78 was exactly the same. If you look at the paper of the plan which decided the open reform. You wouldnt find a lot of reason in it. But at the same time, a lot happened. Investors are showing xi takes the economy to its next stage, transforming it to rely less on investment and more on consumers for balanced growth. This means dismantling stateowned enterprises, pushing policies like Social Security to get people to send and opening up Service Industries like the banks. So far, xis achievements has not impressed. His Government Free trade zone in shanghai was supposed to be a test bed for financial reform, but has gone nowhere. And politically, many people xi has moved backwards, cracking down on the press and social media. The atmosphere for International Businesses has turned sour with investigations and media forward providesing. Others, though, see a strategy in xis tactics, using campaigns to disappoint and assert control over others. Right now, theyre cracking down on everybody to remind them who is the boss. Its the party. The party wants to get a grip on everybody. Eunice yoon, cnbc, beijing. Everybody is expecting reforms, so from an investor reform, the question is how much, how fast are we going to trade this . Well, you know, we are expecting comprehensive Reform Program to be announce onned in the coming days after the sort of policemen lenum is completed. So in areas such as Financial Sector reforms, fiscal and tax reform, land reform and continue to go promote urbanization. So in terms of completion, china was still a much smaller economy and china was insulated from the rest of the world. Today, the chinese economy is second largest in the world. Whatever happens in china has huge ramifications globally. I would think the leadership will give us a road map for the next several years, not just the next several quarters. So in terms of investment implications, i would focus on the Service Industry which would see a lot more support in the government. I would focus on the Consumer Sector which is set to become a much more important driver for gdp going forward. How much more land reform play a part of that . Well, it will play a very large role. However, execution of land reform is going to be challenging. I think the government is focussing on giving more land use rights to the farmers. Perhaps they will be allowed to lease their land. And farmers should be able to use land as collateral when they make borrowings in the future. Land reform goes hand in hand with urbanization as well as the system. So i think land reform has a profound implication for the chinese economy. Do you think we are going to see a change whereby mainland investors will be able to put money freely into hong kong . Well, i think this will take some time. Money goes in and out of country, needs to get approval. But we are gradually seeing liberalization of money outflows from china. As we know, theres a huge amount of capital in china. Chinese bank saves probably at this point are close to 20 trillion. Nearly 200 of the countrys gdp. Chinese investors have been seeking higher term asset. I think it will be a big boom for the Hong Kong Market if china investors could invest more in hong kong, more freely. But i think risk also is quite important. I think at the very beginning stage, we would encourage mainland investors to go through professional channels rather than investing on their own. Im assuming because of the breath of reforms we might get, is it going to take time to work through the measures and scale out what the impact might be . Therefore, might be some initial disappointment because weve got to work out what the results are going to be. Youre absolutely right. I would caution against immediate effects from this plenum. We should look at this as an occasion for the government to outline the blueprint for reform. But when it comes to execution, a lot of these Reform Programs will take some time. But one thing is clear. The government is focusing a lot on innovation, on dismantling some of the monopolies of stateowned companies. Theyre focusing on green growth. So here you have a series of investment implications already. Focus on the Service Industry, ecommerce, logistics, the environmental protection, and i think china is now focusing a lot more on the quality of growth rather than just on the quantity and the pace of growth. Okay. Thanks very much indeed for joining us. Have a good weekend or what we hope will be revealed over the weekend, although it may take more time to fully understand it. Stell to come on the program, Telecom Italia shares have slumped. Well get the latest from milan right after this. And these are the headlines from around the globe. France suffers a shocked credit downgrade by the s p. Pushed the euro lower again. The frerchbs finance minister called the agencys judgment inaccurate. Im not surprised about whats going on in perhaps now with the downgrade this morning. I said it earlier, we are up in italy, 8 . We were up in spain 4 . Were still down in france 5 . Two italian stocks among the biggest losers today, Telecom Italia trying to bolster its finances while spinmechanica lowers its profit guidance. A jump in chinese exports signals more growth recovery, but as beijings leaders gather for their big policy meeting, how strongly will they push ahead with Economic Reforms . European eks are down today. Around 3w7 to 2 decliners outpacing advancers at the moment on the european bourses. Weve got the latest data out of the uk and trade numbers, as well. October global trade deficit, 9. 8 billion. The latest figure was unrevealed at 9el 6, as well. The trade balance was forecast at 9. 1, so wider than we might have thought. Fed Third Quarter construction revised, as well, to 1. 7 quarter on quarter. Construction actually was not as big a contributor to the uk economy as we thought. A slightly wider deficit is what i meant to say. Sterling dollar coming back near the session highs. Gilt yields today, around 1. 7 on the tenyear. Tenyear treasury homes, surprisingly lower over the last 24 hours, despite the fact that we had stronger than expected gdp numbers, which caused they fought the fed might be tapering earlier. But caused treasury yields to go down. And as far as treasury market is concerned, euro dollar has been a big mover since we hit that twoyear high of 1. 3833. The euro today is back up to 1. 34. So very volatile trading. Now, iag, the British Company of Spanish Airways says the kchs ceo said restructuring efforts for its spanish carrier was starting to reap rewarz. Mean wile, allianz helped by strengths in its insurance division, this after reporting a slight rise in First Quarter profit that beat analyst forecasts. On the down side there, you can see finmeccanica stocks are down 6 after it swung to a net loss in the Third Quarter. The firm warning after the close yesterday that it would miss its core earnings target for the year because of troubles at its train making business. And vallourec stock under pressure, as well, even after the french steel pipemaker reported a better than specialitied 30 jump in net profits in the Third Quarter thanks to strong demand. Particularly from the oil and gas industry. In an exclusive interview with cnbc earlier, the cfo has warned in a slowdown of its key market in brazil. They have been gropg growing strong since a few quarters now with among other, the extremely active tendering for new breaks of activities. There will be a slowdown in the next three quarters and the american stable during the last few quarters. Telefonica has been checked by weak home markets as the Spanish Telecom group managed to beat most analyst expectation wes a profit of 3. 14 billion euros in september. Thats a 9 fall on the same period a year ago. The stock for telefonica this year is up some 19 sorry, is up some 22 compared to the ibex of 19 . Meanwhile, Telecom Italian has taken sets to stave off their Credit Rating downgrade. Its received an offer and will sell and lease back 17,000 towers in italy and brazil. Je made the way from frankfurt to milan. He joins us. Did you take the train . No, no, i flew. Its much quicker, ross. Id recommend it. Not as scenic, though. No, not quite so scenic, but the from milan, we are here, of course, to talk about Telecom Italia and this major restructuring announcement weve had. This is a business thats been in a Restructuring Program for some time now. So no major surprises that we get the announcement that was due and we were expected to get numbers, as well, here. But i think there are a couple of things that are, perhaps, a little bit of a surprise. One is that its not a rights issue, its a convertible bond that theyve gone for here. And i guess the other is that theres no sale of the brazilian business. In fact, if anything, theyve restated their commitment to the brazilian operations and some of the cash that will be raised through this exercise, ross, will go into or back into the domestic italian infrastructure plus it will find its way back into the brazilian business. But we have the opportunity to catch one marco and im going to go into this building behind me, which is their headquarters in milan and for the rest of italy and were going to have a conversation about exactly why theyve chosen the options theyve chosen, ross. Yeah. We look forward to that, geoff. Well let you go. Thats the latest out of milan. Joining us now in the studio is robert. Good to see you, robin. Thanks very much indeed for joining us. You had written about what we were going to expect on this particular date. And what weve got, how does that match your expectations . It matches pretty well. And i think, you know, the stock is down today because people are worried that theyre not going to sell brazil. But the reality is that it would be mad to say anything other than exactly what they said. Why snm. If you want to sell that kb. Well, youre going to chalk it up and say how important it is here. There is a key phrase yesterday. We said its a core asset. Now, theres a price for everything, but the price for core assets is really a high one. So i think the stock is down today because of the convertible, theres conclusion in that, its the same Management Team and lets face it, theyve not been great at delivering historically. Should we doubt at how theyll be delivering a sale of their asset price should it achieve . No want i dont think so. Why . Because the reality is that the synergy value in breaking that up business is enormous. And telefonica has a huge amount of pressure and sense of urgency. Telefonica has not historically bid low for assets. Theyve historically bid high. And its reasonable to think that with amx, they will bid a pretty high number and i think they will do so in the next three months. Next three months. Okay. So look, if weve managed to sort brazil out, we shouldnt forget what italy might be able to do for the company. Just explain that because we looked at a very weak economy still in italy. Well, i mean, the great thing about businesses that have not been well managed for a long time is theres a huge amount of opportunity. If you go back and looked at bt six, seven years ago, it was adp because it had been undermanaged and costs hadnt been dealt with and there was a lot you can do. And i think actually the same is true of a lot of infrastructure throughout europe. So theres a huge opportunity there. But the reason telefonica is going to bid a high number for brazil is because that would be a mafs delevering event for Telecom Italia that would be paid for in part by other people at that point, merge, Telecom Italia is a very attractive option because youre getting a very low Indebted Company which has the potential for real turn around. Do you see that happening . How long for that still to happen . I think the potential with merger with Telecom Italia couldnt happen until a brazilian deal would be closed and thats a 330 day process. So the reality is that probably doesnt happen until the end of 2014, 2015 beginning. And the Politics Around that will be okay . We might have a completely different Italian Government by the time we get there. Thats always a risk. Although the nice thing about different Italian Governments is theyre always kind of the same, as well. And look, if you look at what people are saying in italy, what they really want is more investment in the infrastructure. So what yesterdays announcement did was it placated politicians. It said no head count cuts, but theres going to be a lot of investments in the italian market. It gave a little bit to the Credit Ratings agencies by saying were going to do a mandatory convert and do some asset sales and reduce debt, but it kept telefonica in the game because they did not say that theyre going to spin off the wire line network. In fact, theyre keep that and that means that that is very valuable. All of what youre saying, briefly, and its suggested with more share price weakness we should pick this stock up. I would buy the stock on this weakness today. I think it continues to be a very attractive stock. Good to see you. Thanks so much indeed for joining us. Now, lets get some more news out of france. Debuting on the French Market this morning, owned by carlisle said the initial Public Offering was ten times oversubscribed. And the owner of the london eye and the london aquarium has been listed on the share. The Company Closed the offering early because of strong demand. You can thats reflected in the Current Trading price, 3 points 45. The theme park operating selling a 30 stake. Theyve raised 957 Million Pounds at an issue price which initially valued business at 3. 2 billion pounds but is now valued more from where the stock is trading at the moment. Meanwhile, it was hard to miss twitter soaring in its wall street debut thursday. An otherwise down day for the u. S. Markets. Bob pasani was in the thick of it at the New York Stock Exchange and he walks us through the action. Ross, twitter took a long time to open. When it did, it opened with a bang. And after briefly trading at 50, settled down to roughly 45 to 48 for the rest of the day. As the market sold off in the last hour, twitter also came down, ending the day at 44. 90, below the opening price. Was a mild disappointment to an otherwise very strong showing. Now, one footnote, ross, this was the longest it ever took for the nyse to open an ipo. It didnt open income 10 48 a. M. The previous record was visa, which didnt open until 10 17. The underwriters were insistent they wanted to open at the right price and they didnt care if it took longer. Ultimately, they were right. As for weather twitter is worth the 45 price, its the wrong time to argue that point. Well get a better idea of what the public thinks after a few weeks when this has had a chance to settle down. Back to you. That was bob running us through the first day of trade for twitter. Well, the nsa filing twitter singled out some of this competition. Line, ka can i au and talk. Any analysis of this sector does need a dive on the social networking letter that is china. Now, these are the top five social networks. China internet giant tencent dominates users in the top five. 600 million or 91 of china has a social net, woulding account. That compares with 67 in the u. S. About 88 of chinas social media users are active on at least one social network and the average user spends upwards of 36 minutes a day on such sites. It is a difficult landscape in which to operate because china has recently taken steps to crackdown on social media activism by detaining various outspoken users. Twitter itself is banned in china and has up until now made very little effort to expand there. But this doesnt mean china cant play a role in the social networks strategy. Chinese Companies Still account for 700 million worth of advertising revenue a year. Im julia wood in singapore. Well keep our eyes on that story. Meanwhile, who wants more exposure to chinese toxic loans . Asset management may be banking on the prog prospect that many investors do. Some reuters sources say could be worth around 2 billion. Its expanded into other businesses since attracting big banks like ubs. Still to come, well hear from one Energy Expert saying britain could be missing out on a big opportunity if it fails to frack shale supplies. The world aps strongest storm of the year is currently pounding the philippines. It reached the countrys central islands this morning knocking out trees, power lines and shelters. Officials say as many as 12 Million People could be affected, but its too early to assess the full damage. With wind gusts up to 25 kilometers per hour, its worked up waves as high as six meters. The massive storm could still pick up as it heads out across the South China Sea later this weekend towards china and vietnam. Well be keeping our eyes on that. Meanwhi meanwhile, in japan, to he see ba plans to bike a 50 stake in britains nugeneration. Toshiba has been struggling to advance its Nuclear Plans since 2011. Its now looking to reinforce its business by investing overseas. Currently, france ddf suez and spains ibarduola owns a 50 stake in nugen. The deal is worth about 200 million but the British Government is bringing it up to potentially 400 million. Other companies such as france ariva are interested in buying nugen, but the reliability of toshi toshibas subsidiaries as apparently gave it a leg up. Toshiba plan toes increase sales in its Nuclear Business to 10 billion by 2018. Ross, back to you. Thanks for that. Have a good weekend in tokyo. Fears over a jump in Energy Prices have reignited the debate over fracking and whether shale gas could be a game changer in the industry. New shale gas could help families with their bills and make the country more competitive. Joining us with his thoughts, chris fultz who has been in london this week speaking about the benefits of Shale Exploration in the uk. You were at a discussion last night about green peace. It was a robust conversation. Decide fg were going to take on the challenge of amassing this huge shale resouns. 10 of the resource in bolin could power the uk for ten years. Its astonishing that we cant decide to try this resource and see what it will do for the country. There is a difference between the u. S. And the uk. First of all, land mass. Were overcrowded with housing and people and so fracking in this country causes a much bigger disruption. It doesnt. I dont think thats true. I think thats an excuse that they would like you to believe. I live in the barnett shale in dallas ft. Worth. Weve drilled wells underneat my house, underneath university, underneath downtown. With technologies, we can sell up one drill location and drill 24 wells in different directiones from that one square, not having to move the rig. So that should not be a deterrent. So you would say theyve got a bad press undeservedly. They do have an undeserved press. Of course youre going to say that. Well, okay, but think about this. Weve fracked a million 1 2 wells in the United States. 1900 new wells a month. We have the experience and what im telling you is based on fact. Half the people are protesting frack with no experience of it. If we get some fracking going in the uk when. Okay. When. I dont know. Im saying if. How many of the proceeds of that should be shared with the local community . Would that make a difference to look at this . So we take whatever central proceeds to help build a new school or its all driven by economics and driven by money, right . The idea now theyre talking about a 100,000 pound stim usely and 100 of profit going to these communities helps them find a pathway forward. But the reality is were looking at the betterment of the uk. Were doing deals with qatar to bring in l g. We dont know if the heat is going to be on in the wintertime. This is an energy model that gives the uk a pathway to there is one issue. If the British Government decides were going to do this, the eu might come in true. And stop it happening by claiming that theres an omissions problem. And if the eu decides that fracking is going to exceed emissions, they could stop it. What is the issue . If you look at the United States, the epa came out with a study just this year that said over the last five years, that the United States is methane from natural gas has decreased by 20 when the natural Gas Production has increased by 40 . Were capturing more methane, capturing more emissions and increasing our production by 40 at the same time. So a mafs increase in production and a big decrease in methane. That, again, i think is an excuse that should not hold us back. You talk about ng security. The British Government is now finally building a Nuclear Plant down in somerset. What is the right mix, do you think . What percentage should come from renewables and well, i think you hit the nail on the head. It is an energy mix. Im not sheer to say fracking is the holy grail or replacing types of energy reform. I think whatever is left with coal will be a piece of it. Renewables will be a small piece and im thinking natural gas should be the biggest because it burns cleaner than coal. It can help us unmariry our relationship weve had with coal. Not a lot of folks are high on the fact that coal is a pollutant. But i think nuclear is a stopgap until we can get more supply from natural gas, indigenous supply here. Im an optimist and i think natural gas is the biggest drill and im a realist and say that renewables will be a small piece of the mix. How much more efficient can the world get . Ideally, we would like to be using or have an awful lot less demand. Energy efficient is energy reform, if you will. And i think Energy Efficiency is a piece of that puzzle. 88 Million Barrels a day being burned every day on this planet. Barrels of oil,ite . That number is 120 Million Barrels. So we had to look at all types of energy forms if were going to power this planet. We cant be short sided. Chris, good to speak to you. Thank you for coming in and giving us your point of view. Now, we spoke about this yesterday. Ahead of time. Disneys Fourth Quarter profits rose 12 which beat forecasts on strong sales of its video game. Disney infinity and the solid Box Office Performance by monsters university. But product units at the cable tv were were down 7 . The company cited timing of recording fee revenue on espn. Bob iger appearing on closing bell focused on the positives. We feel really good about the quarter that ended our fiscal 2013 which ended with record revenues and record profits. So a good, solid year, good solid quarter. The group included a Qatar Sovereign Wealth Fund and several canadian investment funds. The filing details the pay package for new blackberry chairman john chen. Hes getting 1 million in base salary and could earn a 2 million performance bonus. He gets 13 million restricted shares, certainly worth 85 million based on blackberrys current share price. Talking of which, in frankfurt, its down 0. 9 . Later today, an interview with Telecom Italias marco patuano. That interview at 1300 cet. As far as the interview in asia and monday next week, its an important weekend as we said for china as the company outlined its reform agenda starting on saturday. Thats also when well get a slew of chinese data for october, including inflation, industrial output and retail sales figures. Then on monday, india joins the data dayluge with its october trade figures. Well have that downgrade from s p. Well get more reaction from the french president. He said low Interest Rates are a testament to frances credibility. And that reaction considering a number of voices today saying the s p was fairly justified. Still to come, meanwhile, on this show, prepare for a prolonged period of low inflation. That was the message from the ecb president mario draghi as the central bank surprised by cutting rates. The action opened the door for another ltro. Well get into the details of that. Thats after the euro slumped down to around 133 yesterday. Its rebounded during the session today. Plenty more to come on the next hour of Worldwide Exchange. And well count down to the jobs number for october. Just what was the impact of the Government Shutdown on that . Well also preview the u. S. Trading day to come. Keep it here on cnbc. Stacys mom has got it goin on stacys mom has got it goin on stacys mom has got it goin on [ male announcer ] the beautifully practical and practically beautiful cadillac srx. Get the best offers of the season now. Lease this 2014 srx for around 369 a month with premium Care Maintenance included. Im only in my 60s. Ive got a nice long life ahead. Big plans. So when i found out medicare doesnt pay all my medical expenses, i got a Medicare Supplement insurance plan. [ male announcer ] if youre eligible for medicare, you may know it only covers about 80 of your part b medical expenses. The rest is up to you. Call now and find out about an aarp Medicare Supplement insurance plan, insured by unitedhealthcare insurance company. Like all standardized Medicare Supplement insurance plans, it could save you in outofpocket medical costs. Call now to request your free decision guide. Ive been with my doctor for 12 years. Now i know ill be able to stick with him. [ male announcer ] youll be able to visit any doctor or hospital that accepts medicare patients. Plus, there are no networks, and virtually no referrals needed. See why millions of people have already enrolled in the only Medicare Supplement insurance plans endorsed by aarp. Dont wait. Call now. Youre watching Worldwide Exchange. A recap of the headlines from around the world, france reveals an unexpected slump in industrial output after suffering a shocked Credit Rating downgrade from the s p. Thats dragged down stocks, pushed the euro lower once again. The french finance minister called the agencys judgment inaccurate. The Business Leaders speaking to cnbc such as the ceo of adecco say the move is justified. Im not surprised about whats going on now with the downgrade this morning. I said it earlier. We were up in italy 8 . We were up in spain 4 . Were still down in france 5 . Markets surprising for a weak u. S. Employment report. Just what was the impact of the Government Shutdown and could it steady the feds hand on tapering anytime soon . Plus, a jump on chinese exports signals more growth recovery. But as beijings leaders gathered for their big policy planning meeting, how strongly will they push ahead with economic reform . Announcer youre watching wase Worldwide Exchange, bringing you Business News from around the globe. Good morning to you. If youve just joined us stateside, welcome in this jobs friday. U. S. Stocks fell yesterday after stronger print of Third Quarter gdp, up 2. 8 annualized. We thought it would be around 2 . It did put some thoughts in and, of course, maybe tapering will start soon. The dow down maybe 52 points moving away from the record high. Right now, the dow is currently some 40 points above fair value. The nasdaq at the moment is around about 14 points above fair value and the s p, which is down some 23 points yesterday is currently trading 6. 5 points above fair value. The ftse global cnbc 300 has been weak during the session, currently down around about 10 points as have european equities. The ftse yesterday closed down 44 points. We were up well over a percent from european equities after that surprise cut from the ecb rate discussion before being dragged down by u. S. Equities towards the end of the session. Right now, the ftse is off 0. 3 . Xetra dax is down 0. 5 . We had numbers today which show germany has a record trade surplus again, which is interesting after what theyve received from the cac 40 down 0. 8 . The if it is mib up 0. 1 . Take a look at bond markets. The u. S. Treasury yields, the tenyear note currently yielding around about 2. 61 . Now, we were higher this time yesterday. You would have thought if you thought we were going to get tapering sooner, maybe bond yields would have gone higher. Italian yields, 4. 11 . On the currency markets, the euro dollar, we got down to 1. 3295, which matches september 16th low. You can see over here we have rebounded a little bit further. Back up to 1. 3427. So there is caution back in the market ahead of the employment report today. Sterling, just below 1. 61 at 1. 6073. Tease where we stand in europe. With a recap of how we finish the week in asia, sixuan has the details for us out of singapore. Sixuan. Thank you, ross. Asian markets wrapped up the week on a low note ahead of the u. S. Jobs data. In china, better than expected october trade numbers werent able to lift markets. With investors still focusing on the Party Meeting and inflation data duty out tomorrow. Mean while, in japan, the nikkei 225 fell to a onemonth low and south koreas kospi slipped 1 as Samsung Electronics continue to um theble as its dividend plan disappointments. Australian shares snapped four weeks of gains. Tin decks lost 0. 4 had today as banks traded as dividend. Chinese financials trade lower on uncertainty over reforms in the sector. Brokerages less the losses with haitong securities and southwest securities tumbling 7 . Chinese shale gas price busted down trend as beijing plans to launch a third round of bids to develop its shale gas loss before the yearend. Compared to the previous rounds, all major state owned oil marriages will participate in this auction showing confidence in the sector. And some shale gas price showed pockets of strength in todays trade. So that is a look out of asian markets. Back to you, ross. All right, sixuan, have a great weekend. Thanks for that. Thats the recap in asia. The october u. S. Jobs report is out at 8 30 eastern. Its expected to be one of the weakest records of the year. There we are, skewed by the impact of the 16day Government Shutdown. Forecasts call for nonfarm payrolls to rise by 120,000. Following an increase of 148,000 in september. The slowdown in hiring is expected to be concentrated in the private sector. The contract contractors and others who depend directly on government funding were temporarily laid off. The Unemployment Rate is expected to rise from 7. 2 to 7. 4 . And s p has downgraded frances Credit Rating for the second time in nearly two years. At the same time, the agency changed the outlook to stable. And that means theres a 1 in 3 chance of further change within the next two years. Joining us with the reaction to that, stephane is in paris. Stephane, i imagine that the french governor has been saying this is unjustified. This is, indeed, what the finance minister said this morning. Just a few minutes ago, we had the sort of reaction of the french president francois hollande. He says that the government will take all the necessary measures to save the savings measure. But he clearly said the go government will not call into question the french welfare model. They believe its reflecting the french credibility. Earlier this morning, the finance minister clearly criticized the rating decision from s p. They claim the country still enjoys one of the safest and one of the highest ratings in the world and that is reflecting the strong assets of the country including its demography, the quality of its infrastructure, and the high level of education. Although, ross, the Market Reaction is very limited this morning. The downgrade is clearly another political blow for the french socialist government because its questioning the effectiveness of its reforms. S p says that the reforms were not deep enough to raise the Growth Prospects for the French Economy and its also saying that france has lost its ability to reform, to implement Structural Reforms because of the high Unemployment Rate. This is reflected in what we had earlier from a survey earlier this week, ross. According to that survey, 75 of french people think that the government has the wrong Economic Policy and only 24 of french people are confident in terms of economic outlook. Right. Stephane, for now, thank you. Lets get some thoughts on that. Richard kelly is head of rates at t. D. Securities. Richard, around about 11 , the lack of ability to reform, the reason for the s p downgrade. How much do investors actually care . Theyre not going to stop buying their governments debt. And i think the bigger news out of it is when you look ahead, the fact that theyve now moved this to a stable outlook. It gives you a floor amongst where these are going right now. Theres a big point about how much they care about the european economy per se. Spreads have narrowed across the zone with bund. How much of a disconnect is there between that and actually wa were pricing in . Because people have been talking, looking at this recovery apparently were getting. Yoj you need to price out worry about low growth. Where do you price it . You would price it in terms of low yields, flatter curves. So i mean, if we were really into that scenario, thats where we would get. That is your japanese scenario that everybody is afraid of because these yields keep talg. But it does nothing for the high debt levels. Correct. This is the debate. There are people that are trying to argue low inflation is helping boost wages and getting this recovery. But the biggest problem with the eurozone is not that real wage and the real growth, its the fact that we still have real leveraging. Right. And this is what mario draghi talked about yesterday. He talked about diminishing underlying price pressures, specifically to last months harm onnized inflation data. But theres very violent Market Reaction, led to reports coming from that press conference to question the effectiveness of draghis Forward Guidance and, therefore, ultimately, his credibility. Listen to his response. We are pretty sure the Forward Guidance has been effective in reducing volt tilt of the money market rates. Its been effective in reducing the sensitivity of money market rates to news that would not warrant any change in fundamentals. Has Forward Guidance been effective . You could argue its been a big too fake. I think Forward Guidance is a work in progress in its attempt to hold back what the market wants to price in because we know the market will price in the worst data when it comes. The ecb Forward Guidance is probably the weakest of all the Central Banks weve seen and the only reason you would say european yields have managed to outperform a number of others, its with the underperformance of the economy. Everybody is caught on by this rate cut, which caused the euro to weaken substantially down below 1. 33. Is that a good thing that we were surprised, do you think . Does it feel keep on their guard . Will it keep pressure down, put more pressure on the euro . It watt as positive sign that you finally saw the ecb be fairly aggressive. The ltro has been the pin kap kal of draghis career. This came two to three months earlier. So it was positive at that time. The negative is they dont have anything left. There are this was this far their one shot to weaken off the euro. After this, it is really negative rates. They could, couldnt they, do if disinflation continues as a real deflationary threat, it could launch for q he. It is a high political hurdle for doing it, but they could. If the down side risks to growth are bad enough, they know that they will have to respond. They know Interest Rates will not be there. That becomes the only option. You would expect a loud volatility going around that. Richard, for now, thank you very much, indeed. Richard kelly. Still to come on the frahm, were creating data as an astonishing rate and technology is struggling to keep up. Coming up, well find out how big data is now very big business. [ male announcer ] more room in economy plus. More comfort, more of what you need. Thats. Built around you friendly. And a recap of the headlines. The french digs disconnection, hollande targets economic policies as s p downgrades the countrys Credit Rating. Jobs friday is back. Investors expect a weak october report because of the u. S. Government shut youp. And chinas top brass gather in beijing to plan Economic Policy as the countrys exports indicate a continuing recovery. Still to come, its jobs friday stateside. Wrangling is expected to have worked to make the record one of the weakest of the year. Its going to preview the employment numbers at 11 30. And today is also the day that the holidays arrive in new york. The world famous radio city Christmas Spectacular opens. Plus, a 76foot tall, 1 12ton norway spruce is going to be put up at the Rockefeller Center just there. [ male announcer ] this store knows how to handle a saturday crowd. [ 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. Now, disneys Fourth Quarter profits rose 12 , beating forecasts of its video games, disney infinity. Higher theme park spending and a solid Box Office Performance by monsters university. Profits at the cable tv unit fell. Appearing on cnbcs closing bell, the ceo bob iger was focused on the positive. We feel really good about the quarter that ended our fiscal 2013 which ended with record revenues and record profits. So good, solid year, good, solid quarter. Disney shares down nearly 3 in after hours. And in frankfurt, currently off 2. 5 . And mark your calendars, folks. Disney says the next star wars movie, episode 7, if you can believe that, is going to open on december 18th, 2015. December the 18th, 2015. Its being directed by j. J. Abrahams who could created lost and directed the last two star trek films. Hes teaming up with the author of the Empire Strikes back and return of the jedi. Fairfax is disclosing its investment partners. A filing details the pay package for the new blackberry chairman, john chen. Hes getting 1 million in base salary, could earn a 2 million performance bonus and is getting 13 million restricted shares. Currently worth around 85 million based on blackberrys current share price. Blackberry stock, speaking of which in frankfurt, down about 1 . Also in the telecom sector, Geoff Cutmore is speak to go Telecom Italias marco patulona later today. That interview will be exclusive at 1300 cet. Also numericable trading at 26. 55 after issuing at 24. 80. Another ipo in london, merlin entertainment, this is the entertainer of madam tussauds. It has begun trading on the british stock market, priced it initial listing at 3 pounds 15 pence per share. They closed the offering early because of strong demand. They sold a 3 stake. Theyve raised 957 Million Pounds. The current price 3 pound 42. And until now, twitter has shown little interest in expanding into china. Through the market, is it simply too big to ignore . It hadnt been allowed into china. Julia woods has more on asias expanding social scene. The nsta is filing twitter singled out some of its asian competitions, namely japans line, south koreas kakao all of which are growing rapidly and had strong user numbers. Any analysis of this sector needs a deeper dive on the social networking ladder that is china. Now, these are the top five social networks. Qzone, tencent, sina and pingyou. Chinas qone is the largest. 91 of chinas netizens visit social media sites versus 67 of u. S. Citizens. The average user spends upwards of 36 minutes a day on such sites. It is a difficult landscape in which to operate because china has recently taken steps to crockdown on social media act e activism by detaining various outspoken users. Twitter is banned in china and has up until now made very little effort to expand there. But this doesnt mean china cant play a role in the social networks strategy. Analysts say twitter could take a leap out of googles book. And even though the Search Engine is relevant inside china, chinese Companies Still account for 700 million worth of advertising revenue a year. Im julia wood in singapore. Now, who wants more exposure to chinese toxic loans . Chinas Asset Management may be banking on the prospects that many investors do. Its been given the green light for Long Congress ipos that some reuters sources say could be worth around 2 billion. Its being set up as a bad bank b back in 1999 by beijing to help clean up bad loans. Its expanded into other businesses since, attracting investment from big banks like ubs. All right. Lets show you where we stand with u. S. Futures right now ahead of the open today. Remember, the dow is coming off a record close yesterday. We had that stronger gdp number a little bit earlier. And yesterday, i should say, that thought made people think maybe the fed is going to taper a little bit earlier than expected. The dow down 152 points. Off 23 points for the s p yesterday. Well get the futures board for you in just a second. European equities right now are currently declined at 7 to 2 outpacing advancers at the moment. There we go. Theres the wall. And maybe we can show the futures, as well. That would be fairly handy. Is the futures board ready to go . There we go. Thank you very much. We are implied higher at the open jobs report. That will depend a lot. S p 500 are currently up 6. The dow up 44 and the nasdaq up 15. Just if time for christmas, the auction season gets under way in new york. Next, cnbcs robert frank filed this report. The big art auctions in new york got off to a little bit of a slow start on monday. You about its quickly picking up steam. Southbies and christys expected to sell more than 1. 5 million in art. The sothebys sale was a disappointment with pieces like this selling for 2. 8 million that was under the estimate. Now, other big works by picasso failed to sell. But next week is the big test and the top pieces are mostly warhols. Theres a coke bottle expected to sell for over on 60 million and his silver car crash, a giant painting from 1963 could sell for more than 80 million. A frn sis chipparticular could sell for 80 million or more. So far, theres a sign this hot art market could be cooling. This 4 inch wooden cigar by picasso was sold by christies for 1. 1 million. Still to come on the show, its job friday stateside as weve been saying. Government shutdown wrangling is expected to have worked to make the report one of the weakest of the year. Were going to preview the employment numbers, 11 30 cet. Stay with me in the studio for a quick tease of that is mr. Kelly. Thanks very much, indeed, richard, for sticking around. One of the things i was interested in, euro dollar got down yesterday to 1. El 235. Was that a shortterm loan some of were still very uncertain about was going to happen with the dollar. I think its as low as the eurozone can take it in terms of where the rates are going. Now its going to be the dollar trend. Thats still openly outside of this payroll report, strong dollar, and youre back into the 120s next year. Next year. I dont think theres enough time this year to quite get you there. But thats still the trend in the euro. Is that because weve changed differentials between the ecb who may be loosening and the debate about simply when does the fed stop buying as much . I think you have the minor shift in rate differentials. It makes the euro more of an attackive funding currency. That gives you marginal incentives. Ultimately, the u. S. Is in a stronger economy and stronger recovery than the eurozone. Stick there. Well get your thoughts and plenty more. The employment report coming up for the last part of Worldwide Exchange this week in just a few moments. 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 and drive forward with broader possibilities. Cme group how the world advances. Youre watching Worldwide Exchange. Im ross westgate. The headlines this morning, french president farther what is hollande defends his country after the country suffers a shocked downgrade rating by s p. Others say some move is justified. Im not surprised about whats going on in france now. I said it earlier, we are up in italy 8 . We were up in spain 4 . Were still down in france 5 . Investors are bracing for a weak u. S. Jobs report to show the impact of a Government Shutdown and could stay the feds hand on tapering anytime soon. Plus, a jump in chinese exports signals more growth recovery, but as beijings leaders gather for their big policy planning meeting this weekend, just how strongly are they going to push ahead with key Economic Reforms . Announcer youre watching Worldwide Exchange, bringing you Business News from around the globe. Welcome. If University Just joined us stateside, two jobs friday. Yes, jobs friday is back, the october employment report out at 8 30 eastern. Its expected to be one of the weakest of the year. Skewed by the impact of the 16day Government Shutdown. Forecasts, though, as you can see, call for nonfarm payrolls to rise by 120,000 following an increase of just 148,000 in september. Well below the consensus, then. The slowdown in hiring is expected to be concentrated in the private sector. Government contractors and others, funding was temporarily laid off. The Unemployment Rate is expected to rise from 7. 2 to 7. 4 . Joining us with their thoughts, anthony chan, chief economist at chase private client jpmorgan. Hes in san francisco. And Richard Kelly with t. D. Securities with me on set. Anthony, how much are we going to read into todays report . Well, believe it or not, ross, were going to see conflicting evidence out there because the way the government is going to handle the furloughed Government Employees is to consider them as unemployment in a Household Survey used to compute the Unemployment Rate. For that reason, i think the Unemployment Rate could go as high at 7. 5 . But then when you look at the popular unemployment number out of the establishment survey, if these government workers were unemployed but they got paid during that period or within the survey period which is the pay period for them, they are counted as being employed. So youre going to see these government workers being unemployment for the Unemployment Rate purposes, but they are employed for the survey. So a lot of confusion, ross, in the way to interpret these numbers. But i think establishing the survey will give you nonfarm payrolls in the neighborhood b of about 110,000 or so. So if the Unemployment Rate jumps back up this month, is it going to fall back again in the next set of figures . Absolutely, ross. These government workers came back and theyre not going anywhere. Theyre employed again. Remember, we also may have had some secondary effects on the Unemployment Rate as some of the government contractors, some of the people that worked around washington and depend on having the government open, all those individuals are going to go back to work. Lets not lose sight of the fact that the economy had a pretty good head of steam going into the Fourth Quarter. So the momentum is there and, believe it or not, were going to have faster growth in 2014 than we do have in 2013. So guess what . The Unemployment Rate is going to steadily continue to drop over the next couple months. You say we have some good momentum, but that Third Quarter number yet was down to restocking and Consumer Spending was the lowest since the Second Quarter of 2011 and that twothirds of the economy. Well, but the consumer confidence, of course, dropped during the Government Shutdown. But it has bounced back. We know that the wealth effect is strong. The equity market, even with a little correction here and there, is still strong and alive. The restocking, ross, took about 0. 8 . So even if i take out the restocking effect, were still talking about a 2 gdp number that we got yesterday. And next year, the Federal Reserve, for example, is expecting 2. 6 growth. Were not as optimistic as the fed, but well certainly take 237 or 2. 4 is doable next year. The important thing here, ross, is the economy is moving forward. A little momentum. The economy is getting stronger. Thats why theres concern out that that the Federal Reserve may move sooner rather than later on the tapering because the economy is improving. Lets bring in rimp ards view on that. What does this mean . I think everyone is going in today ready for the Monkey Business in payrolls and the shutdowns. But the point is, really, we look to a down side. If you look to where the surveys are going, theyre braced on for a bad number. If we get a bad number, were in a wait and see for another month to see where the numbers are going. Recently, the data in the u. S. Has surprised to the upside. If we get that here, markets can start to price in that tapering because i think consensus is at march. Finally, for both of you, richard first, what other balance of risk or the chances of a december tapering at the moment . How would you price this . December, very low, but january significantly higher. Than thonny . I agree. I think in december, the probability of the Federal Reserve tapering in the wake of the data thats unclear, by the way, ross, one thing i didnt mention, the quality is data is somewhat suspect here because the government was shut down for a while and the quality of the actual surveys is also suspect. For december, never say zero probability, but low. But i think as you move into the coming year in 2014, the probability does increase. But remember the Research Studies done by the Federal Reserve, even if they taper sooner rather than later, they may keep shortterm Interest Rates lower for longer. There was a low probability of the s p cutting rates, but they still did it. Thanks very much, anthony, good to see you. Richard, thank you, as well. Moving on, an explosion in data creation and technology is trugelling to keep up. Experts had less than 1 of the worlds data. Its currently being analyzed. The universe continues to grow at an astonishing rate. Our next guest says exploring and analyzing big data or the need is only going to grow and its becoming very big business, indeed. Joining us is jim mcknight. Jim. Good morning, ross. Nice to see you. Im wondering whether we got too much data from an investors point of view. We get so much data, we get clouded by it and its hard to see the woods for the trees. Theres huge amounts of data streaming in from all the tel telcos, web traffic, a huge number of sensors that are spitting out data left and right. But our job is to write the software that helps analyze that type of data. So that companies can get real insights about what direction they should be going in. You have a point of view that we havent got enough people with the right skills to analyze the data that the likes of you are producing. We did just did a survey with these skills, the uk, is a sort of think tank here. Theyre projecting over the next five years, were going to have a shortfall of about 70,000 people with the skills to analyze big data. So we are basically going to churn out an awful lot of data and the not know what it means. Is that wa youre saying . Unless we have the people to help analyze it and understand it. Of course, were doing our part. We are providing about 6 Million Pounds a year to the universities here in the uk and in ireland. Were also trained 2,500 undergraduate students so far and provided certificates for them. So we are really trying to work on this. How is this going to help us economically, jim . Payback. Oh, my gosh, the salary levels for someone with a masters degree and advanced analytics, 80 t 80 to 100,000. So theres very good salaries there. Weve got to encourage more people. And i understand on the salary level, but just on the business of analyzing data, will you have a great understanding of whats going on . Do we know what that gives us economically . Well, if youre in retail, for example, and were able to help you forecast every single skew and every single store, how much youre going to sell each month, youll know what to put on sale, what not to put on sale, we can forecast what sizes people are going to buy. So that the retailer will have the right sizes. And then also not be out of stock when the customer comes in. With the forecasting skill thats really important help you to manage your stock flow, for example . Well, yes, exactly. And things like banking for credit card fraud, we provided credit card fraud for a number of banks to be able to determine that this card is not being used like it normally is used, therefore, it must not be the owner of the card thats using it. We have the employment report out today. Do you think businesses are confident enough in the states to make investments . You talked about this, theyre going to invest in people . Theres a need for people in the stadz that can analyze a large number of information. Thanks for joining us. U. S. Futures as we wait for this important number have ticked higher this morning. We are currently some 40 points above fair value for the dow. The s p at the moment is around 6. 5 points above fair value. European equities have been softer. The ftse 1100 off 0. 3 . The xetra dax off 0. 5 . The cac 40 off 0. 75 and the ftse mib is up 0. 1 . Still to come, president obama says hes sorry for Many Americans that may lose their Coverage Even though he promised many wouldnt. [ male announcer ] united is rolling out global, satellitefed wifi to connect you even 35,000 feet over the ocean. Thats. Wifi friendly. Afghanistan in 2009. On the u. S. S. Saratoga in 1982. [ male announcer ] once its earned, usaa Auto Insurance is often handed down from generation to generation because it offers a superior level of protection and because usaas commitment to serve current and former military members and their families is without equal. Begin your legacy. Get an Auto Insurance quote. Usaa. We know what it means to serve. Stick with innovation. Stick with power. Stick with technology. Get the flexcare platinum. New from philips sonicare. A contrite president obama is apologizing to the American People for all the problems that have kropt up with his Health Care Reform since it was rolled out more than a month ago. With more, were joined by jackie deang his in the states. Just how apoll getting has he been, jackie . Very apologetic. President obama says hes sorry some americans are losing their Current Health care plans as a result of the Affordable Care act despite his repeated pledge over the past two years that no one would have to give up coverage or the doctors that they liked. And the president s comments come after nbc news reported last month that the white house has known since 2010 that millions of people who buy insurance on their own that they can see those plans canceled because the policies dont meet the guide lines under obama care. In many cases the new plans are at higher rates. In an exclusive interview, chuck todd says his administration wasnt as clear as they need to be. Even though it only affects a small amount of the population, it means a lot to them, obviously, when they get this letter cancelled. And, you know, i am deeply concerned about it and ive assigned my team to see what can we do to close some of the holes and gaps in the law because, you know, my intention is to lift up and make sure the insurance that people buy is effective. Now, the president has been blasted by republicans who oppose his Health Care Law and by fellow democrats who are frustrated with the rocky rollout of the online exchanges. He says hes looking at a range of on options to help people whose insurance is being canceled, but is stopping short of endorsing legislation that would grandfather more of those policies. T now, republican congressman darrel issa wants to hear from the obama admin straegzs top tech officials at a hearing next wednesday as to why healthcare. Gov is faring so poorly. The white house chief Technology Officer todd park is willing to speak with the committee at a later date, but hes too busy right now working on fixing the website. Issa says he may consider subpoenaing parks. The political ramifications on this seem so large. Now, talking about twitter, you and i were not optimistic enough, were we . No. No. I was a big bear and even you were on the conservative side. Wow, what a showing we saw from twitter yesterday. Amazing. Twitter soaring on its debut generating a lot of enthusiasm. It was a down day for the markets. Bob pisani was in the thick of it at the New York Stock Exchange. Hes here to walk us through the action. Ross, twitter took a long time to open, but when it did, it opened with a bang after pricing at 26, it opened at 45. 10. After briefly trading at 50, settled down to roughly 45 to 48 for the rest of the day. But as the markets sold off in the last hour, twitter came down, ending the day at 44. 90 below the opening price. It was a mild disappoint to an otherwise very strong showing. Now, one footnote, ross, this was the longest it ever took for the nyse to open an ipo. It didnt open until 10 47 a. M. The previous record was visa which didnt open until 10 17. The underwriters were insistent that they wanted to open at the right price and they didnt care if it took longer. Ultimately, they were right. As for whether twitter is worth the 45 price, its the wrong time to argue that point. Well get a much better idea of what the public really thinks after a few weeks when this has had a chance to settle down. Back to you. Thats bob telling us how it was. Jackie, just how much were people twitching, waiting for that first print to come through . Bob talked about the long wait for everything. Absolutely. After the facebook debacle, i think all ice were on the nyse and this twitter ipo. I think the nyse wanted to make sure that they got it right and they took their time with it. While they were waiting, people were antsy to get that opening print. But at the same time, they felt confident that it was going to go smoothly and that is really what was important about yesterdays ipo. On another note, ross, i want to point out that yesterday the market was down significantly. Bob pointed out that twitter sold off a little bit, but you have such a big spike on a sock like that where really the rest of the Economic News wasnt so fantastic and you saw the dow sell off. It tells you how investors are thinking about these individual names and the nasdaq saw a big decline yesterday. Jackie, whenever it starts for you, thanks for now, have a great weekend. You, too. Now a recap of the headlines, the french disconnection hollande defends frances economic as s p downgrades the countrys Credit Rating. Jobs friday is back. Investors expect a weak october report because of the u. S. Government shutdown. And chinas top brass are gathering in beijing as the countrys exports indicate a continuing recovery. Still to come, following a luke warm reception of the shanghai free trade zone, will the chinese president make any change to economic direction in this weekend . 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[ driver ] and it got his okay on treatment from miles away. It even pulled strings with the stoplights. My ambulance talks with smoke alarms and pilots and stadiums. But, of course, its a good listener too. [ female announcer ] today cisco is connecting the internet of everything. So everything works like never before. Chinas leaders are getting ready for the communist parts third plenum. It will start tomorrow. Many are watching for what new railroad forms are going to come. Eunice, we had a guest on earlier who said from an investment point of view this will be bigger than the 1978 plenum in terms of policy changes. What is going to happen . Thats what a time of people here have been talking about. Its being touted as one of the most important moments in chinas economic history. What were going to see over the next couple of days is the chinese president xi jinping and about 200 or so of his communist part padres getting together behind closed doors in order to draft and come up with blueprint on Economic Reforms. Now, in terms of the broad strokes, mainly this is going to be a path for china to be able to change its economic models, to really move away from investments and push further for a consumption led economy. So in terms of the type of policies people are hoping for macro policies that are pro consumption to Social Security, possibly some land reform. People have been talking about how they hope to see some type of Movement Towards dismantling stateowned enterprises. Theres been a lot of discussion about how theres a big need to open up the Financial Sector and that we could, though we wouldnt necessarily see details, at least see a communique at the end of the four days that would signal in serious commitment to change. Thats wa people are hoping for, ross. Certainly a big weekend. We will be watching all the reaction implications. Eunice, thanks for that. U. S. Futures right now after yesterdays selloff, the dow down 152 points. Much will be dictated by the employment report. Dow futures are currently some, what, 40 points above fair value. Michael gurka is with us from the chicago based spectrum Asset Management. Michael, we know what the forecast of the jobs report is at the moment, up about 120,000. How is it going to play into todays trading . You know what, ross . As expected, youve been saying this a lot over the past is that if something really disappoints, is that more reason to know the fed is still in play . And more importantly, i think the mantra has been over the last year or two, if anything pulls back in equities, its been a massive buying opportunity. But, you know, maybe we want to keep an eye on the commodities space here just because you see this me andering lower in copper, in crude, in gold, in silver, in cotton and sugar. Everything is just falling off right now. And, again, its not just fundamentally or demand incorporated here. But as asset prices in particular commodities continue to show maybe the tradeoff here in going lower, eventually whats going to happen is people that watch the equities closely are importantly the tenyear yield, were going to break out of this 2. 50 to 3 range there. We just bounced off 2. 5 again. The dollar sort of got stronger against the euro because of the ecb rate cut. How are we going to trade now . Well, you know what . Thats a really good point to bring up. Because if you look at the chart right now between the british pound and the euro, not just the way they trade against each other, but how they trade versus the dollar, yesterday was the knee jerk reaction you would have expected with the euro just falling out of bed and trading into the 1. 34 handle from those highs up at 1. 38. Sterling held in there pretty well. But this morning and most of the last night, here in the states, youre starting to see that rebound, which takes me back to weaker dollar, higher currency rates against the dollar, the feds premise of a weaker dollar and how thats been playing in for a week or two. I think that continues to trade back in and out with the stronger trade currencies in the u. S. And michael, youve been talking about your lumber trade which you have said is on fire. If we get a weaker jobs number, people think tapering is put further off. Is that going to keep adding fuel to the fire . You can only fill the balloon is so much air. I understand the fed chairman is giving a timeline between december. March to start see the tapering play in. Eventually, theres going to be too much air in the balloon. Im not going to say the Printing Presses run out of ink, but whats going to happen here is theres a lot of pressure on this market to see how the tapering or putting off of lower rates is going to happen. Again, keep an eye on that. Michael, good to see you. Michael gurka from chicagobased spectrum Asset Management. Just a reminder, today is also the day that the holidays start arriving in new york. World famous radio city Christmas Spectacular opens and a 76foot tall norway spruce will be put up here at the Rockefeller Center, which indicates were into the Holiday Shopping season. So good luck with that. Meanwhile, coming up next, squawk box, the countdown to the jobs number. Keep it here on cnbc. Have a profitable day. Goodbye for now. Good morning. It is jobs friday, but before you get too excited, the report is expected to be one of the weakest of the year. Twitters second day as a public company, shares of the social net, woulding giant jumping 73 from its ipo price. And a frenzied trading debut. Plus, a super typhoon slamming into the philippines, meteorologists say it is definitely the strongest of the year and one of the strongest ever recorded. A significant loss of life is predicted. Its friday, november 8th, 2013. Squawk box begins right now. Good morning, everyone. Welcome to squawk box here on cnbc. Im becky quick reporting live from new york today where we are attending the 22nd annual barron investment conference. Its taking place at the metropolitan on opera house. How often do you get to see you have live at the metropolitan opera house. Our guest host today, ron barren. We have a lot to talk about with him. Ron, thank you so much for being here today. Thank you, becky. We will get to all of that in just a moment. But first, joe and andrew are back at cnbc headquarters. Republican old wolf will join us from the Weather Channel with the latest in just a moment, but andrew, back over to. Thank you, becky. On the market, the october jobs report. The release due at 8 30