Transcripts For CNBC Worldwide Exchange 20131211

My apologies. We seem to have some technical issues. Lets recap this morning some of the headlines. Desktop computers are not dead. A rallying call from meg whit man as the hpcoe tells cnbc exclusively a turn around plan is on track but admits there is still work to do. We have to continue to innovate and you can discover the innovation engine is alive and well at hp. A lot of heavy lifting ahead. The eurozone finance ministers outline a political bargain to wind down troubled banks that fail to agree on the crucial issues of sharing costs. Hes confident that a deal can be done before christmas. We can now see the outline uls of a compromise and im quite optimistic that next week we can finalize it. Announcer youre watching worldwide exchange, bringing you Business News from around the globe. All right. We have the latest data coming out from the iea, their report just coming out. Highlights of this, theyre talking about the wti spread, which we have looked at. It was around 17. 55 a barrel at the end of november. Its down quite a lot since then. We have Inventory Data coming out today which may show a fall in the stockpile. The iea saying the estimate of Global Demand being revised up to 29. 73 Million Barrels per day. The key thing about this is nonopec crude topping 43 Million Barrels a day for the first time in a decade. Opec crude fell for the fourth consecutive month. Smaller drops in nigeria, kuwait, venezuela, upsetting a higher output than iran, iraq and angola. Opec ministers keeping their Group Outlook target unchanged. Thats the latest on the iea. As far as european equities are concerned, slightly firmer this morning after falls yesterday. The ftse 100 down some 36 points. The dow off 52, as well. Right now, were pretty flat for the ftse 100, you cant recollect ra data. The cac 40 up 0. 5 and principlively flat for the ftse mib. North yot bo Nathan Bostoc left his position. British bus and rail Operator First Group stock up nearly 3 rejecting a proposal to split the firm and sell the companys u. S. Business, saying the plan is not compelling and contains inaccuracies. The worlds biggest clothing retailer posted a 10 raise in sales for the first weeks of the First Quarter. Well get more on inditex in around 45 minutes. As far as bond markets are concerned, we saw treasury yields down to a yield of 2. 8 . Were currently on tenyear treasuries just above that at 2. 81 . We were yielding 2. 93 after the jobs report last friday. And on the currency markets, the dollar is town to a sixweek low. The euro yesterday we saw up to around 1. 3748. We are above that at 1. 3767. Not far away from the high of 1. 3830. Dollar yen is back below 1. 30 moving away from that sixmonth high. Sterling dollar, 11 is. 6416. That is the trading in europe. Lets bring in sixuan from singapore with the update on whats happening in asia. Hi, sixuan. Hi. Thank you, ross. A lot of red arrows in asia today. China markets led the losses saying liquidity would dry up towards yearend. Financials, home applians and cementmakers. Markets also await the end of the annual market planning meeting to get more clarity about the countrys 2014 economic targets and reform priorities. And over in japan, the nikkei 225 ended lower by 0. 6 with the dollar yen falling below the 103 handle. South koreas kospi, australia asx 200 both lost near 0. 8 . Meanwhile, the new Zealand Market was dragged just a bit lower by fontera. That stock tumbled as much as 10 to its alltime low before ending down by nearly 6 . This is after the group slashed its 2014 earnings and dividend guidance. Meantime, india reported a november trade deficit of 9. 2 billion. Thats nearly a 50 drop from the previous year. Trading lower by 0. 6 . Now for some individual movers. Chinese coal producers took the brunt of the selling today after beijing said all users will be curved to combat pollution. And on the other hand, Clean Energy Stocks as you can see from the bottom row here, they got a nice boost as a top official said china will speed up the development of hydro nuclear wind and solar power. Back to you, ross. Thank you. Closer to a deal on a Banking Union outlining how a new agency could close failing lenders. Julia caught up with the euro Group President and asked him whether the talks were a success or failure. I think they were a success because on the number of big issues weve moved along, we can now see the outlines of a compromise and im quite optimistic that next week we can finalize it. You call it a compromise. Just how watered down is this, really . Its hard to tell. We will see next week. But i think the fundamentals are going to be very strict and firm. We have strict bailin rules. We will have a fund in which all banks have to contribute. There will be one single set of rules. All the banks will be under sms supervision. All the banks will be under the resolution, some direct and some national. You didnt mention the key word, which is a common fund. Its going to be a single Resolution Fund. The architecture of it is to be discussed. But i think we all want to make sure that its credible, that the funds will be available if banks have to be resolved. But luckily, we have firm bailin rules put in place. They will take the first blow. They will deal with the first losses and then if there are more losses, then we can go to the fund. Were not addressing the link between weak so much s between weak so muchovereigns a banks is a concern. Is that still going to be a concern . We will have eurozone funds. There will be, especially in the first year, some national responsible. If that causes a problem, then we ever the esm according to the agreed rules. So i think the outlines of how its going to work are becoming more and more clear. Thats your position. What about everybody else . Well, im just going to convince them. Are we going to have a solution by christmas . Before christmas. Wow. Hes fairly confident. Have we heard anything from the germans on this . Well, this plan, ross, look like what the germans were asking for. Of course, its complied to their demands. The kicker really here is that, yes, were talking about having a common fund eventually these funds turning into an individual fund. But individual countries will be able to vote on whether or not that fund can be used. Their vote count is going to be based on ecb capital. So if you add in the germans, the dutch and the fins, they could decide if these funds will be available. But the other crucial thing is this fund is not going to be built until the next or its going to be built over the next ten years. So what happens if somebody needs to use a fund at the National Level and its fully depleted . What next . And who backs up the back stop . The german view on this is that the stability mechanism shouldnt be available as additional cash. So we came out of this meeting, yes, with a broader framework, but theres still plenty of questions. As i asked the president of the euro group there, are we truly breaking this link between the banks and some of the weaker sovereigns . Im not sure we have. It will be interesting to see whether we actually agree something stronger next week when we come back to the drawing board. With the work set to continue, ross. Stay there for a moment. Lets bring in robert quinn. Robert, youre a favorite of banks as an investment. How much of this story plays into that or how much are you ignoring it . I wont ignore it. A lot of the issues down here are very, very important politically and in terms of its impact on banks, in terms of its impact on share prices, it doesnt have so much of an impact. It doesnt necessarily. You dont see a lot of this news shaking the bank. You dont see share prices coming off weak in the last weak or so. Are you confident that all the regulatory headaches, pressures, fines, everybody else is also in the price . You saw that maybe a couple quarters ago. Now the stronger banks are going to hit with Oil Litigation funds. But in terms of whether or not they can handle that and have the capacity for greater provision in the greater handle in these funds, im wholly confident on that. Jules. You know, were talking about a Banking Union here. Were talking about something thats going to apply to these banks far off in the future. Do you think investors understand that when were talking about a common backstop for the bank, that it isnt going to be available for incne year when we have the asset review and the stress test, right now, those countries are very much on their own dealing with these issues. Do you think they understand that . I think they do. Its very important for the ecb and the European Banks as a whole. Youll get harmonzation. I think the imf, looking at what they did in their global stability report, they analyzed the total loss absorption quality of spain and italy. That is relatively well contained. Remember, spain and portugal are both into independent asset quality reviews in the last two years. The bank of italy has done their own review. What we do expect to see from an investment point of view from bank shares is an increase in provisions ahead of the cutoff q4, 2013. So from an investment point of view, spanish banks, italian banks, a majority of the European Bank as a hole look at the benefit performance sectors next year. Robert, stick around. Youre with us for a whies. House and Senate Negotiates have reached a budget deal. The agreement sets federal spending levels at 11. 012 trillion for fiscal 2014. A little higher than the current law, but less than the democrats wanted. It hikes Airport Security fees and reducing federal Workers Pension benefits. The House Budget Committee chairman paul ryan says the teal is a step in the right direction. Patti murray, his counterpart, says it rolls it back in a balanced way. I think this agreement is a clear improvement on the status quo. This agreement makes sure that we dont have a Government Shutdown scenario in january. It makes sure that we dont have another Shutdown Scenario in october. This deal builds on the 2. 5 billion deficit reduction that we have done since 2011 and sequestration shouldnt be replaced with spending cuts alone. Congress must still approve the deal, particularly the house. The House Speaker john boehner praised it. He didnt say whether the house would pass it or could pass it. The pact doesnt address the u. S. Debt ceiling which has been extendsed through to february 7th. But it does suggest that weve got Congress Working together to come up with something before they have been pushed to something. Thats helpful, isnt it, for Risk Appetite . It is. What youre getting now is youre getting into the period where youre only a few quarters away from midterms. Every time they have these departments, the republicans come out worse. They cant necessarily afford to push back again because its potentially political suicide leading into the midterms. At the same time, youve had a series of progressions. Its interesting where this might leave the fed. If we believe political reasons are maybe why the fed didnt taper in october, is it more probable they could taper in december or january . They could. Youve got yellen coming in any moment now. I think wanting to get around to the next round of economic forecasts from the fed in the march meeting. We upgrade our gdp forecast. At the same time, we dont see the same need for taper. Taper is becoming much less ral lieutenant for equity investment. Are you saying we could divorce ourselves from bond yields shoot up . Youve already seen u. S. Treasury rates on the tenyear have moved about 150 basis points in the last 12 months. Weve already seen that. But if you look at macro fundamentals, it should be around about 3 . So the actual year on year event in u. S. Treasuries is largely taken place. I dont see any reason why the u. S. Treasury yield should creep up. Up near the year high, up nearly to 138 again and euro well see what that means from european equities, as well. Hes telling his government ukraine would need the money if it was to sign a trade pact with the eu which is what it backed away from last month and it is causing all the process. Still to come on todays show, italy anticipates Prime Minister gives up another vote of confidence after a sea of political change. Well head had to rome to look at the outlook. Plus, is the euro the new thorn in the side of techs . Well take a look. Its a done deal in the u. S. As lawmakers agree on a budget, but this just progress in sheeps clothing . Well take a look at whats been agreed in more depth. And we have our exclusive interview with meg whitman, ceo of hp. What a milestone, a first woman ceo of an automaker in the United States. Frankly, i think its a real milestone for women in business. Is miley cyrus really now a symbol of the way we live . That is the thought of nancy gibb, who has included the singer on this persons person of the year title. Miley will have to fight off some stiff competition with the likes of pope francis, jeff bezos who all made the top ten. The winner will be announced later today. What were asking you is who represents 2013 for you and why . And Time Magazine do this in either a good of a bad way. It doesnt matter. Have Time Magazine chosen the right tone or missed the man or woman that youll remember the year for. Get in touch with us, worldwide cnbc. Com, tweet cnbcwex or direct to me rosswestgate. This is enrico letta is waiting for a confident vote in Parliament Today. It comes as the italian protesters held a second day of strikes as part of the socalled pitch fork movement. The fivestar movement as beppe grillo urged police to join the antiausterity rallies. Joining us with his thoughts, francesco solenti. What is the reason for this confidence vote . Who is trying to achieve what . Hi, ross. Thank you for hosting me. I guess this vote of confidence is very different from the one we had just two months ago on october 2nd. That one was about survival for lettas government. This is just a medical checkup for the government. Letta gave in to the request for a vote of confidence. But i think this is a lot about corridor tactics, its about consolidating powers, seeing who is supporting whom, counting votes and seeing how large a majority is for lettas government. I do think that letta gave a brilliant speech a couple of minutes ago. He is stating italy needs some serious constitutional reforms before even thinking about other elections. And i do think that most players in Parliament Today are keenly aware of that need. And, actually, i do see a system that is very polarized between reformers on one hand and radicals on the other hand. Those who believe the system can be changed from within and those who think it must be brought down. After this confidence vote, as you say, well have an idea of the support of support for the letta government has. Is it going to be enough to deliver Electoral Reform ones . Ross, actually, i do think the majority is there. Its not a large lead. Speculations are that the lead will be quite a still double digit lead is in the senate. That should definiafinitely be h to make the Electoral Reform. But before thinking of Electoral Reforms, you should bear in mind that there are other reforms which have top priority. Because if you look back at the past 20 years, we had about ten premiers. We didnt just have silvio berlusconi. If you think of the numbers, we had dini, champa, we tell monte, berlusconi, and they all failed to deliver syrias reform. So the question should be what was it that blocked them . Its obviously impossible that they were all dumb, so its probably our architectural design, how our institutions are designed. That design was originally made after world war ii. It was a design that was was specifically aimed at avoiding power concentrations and quick decisions. But today there is a great need for quick and powerful decisions. So the architecture has to be changed before venturing into elections, which is to say that Electoral Reform is a priority. But probably not priority number one. Robert. Hi. Good morning. The italian political calendar is largely hindering on institutional reform and largely in two strands. The nearly electoral law from where i sit seems like a very real possibility and potentially should mean letta will stay in power for the next 12 months and beyond. A rebalance of powers between the upper and lower house seems very unlikely. How does that compare with your thoughts . The question is well taken. He said basically he would put forward a proposal in which the senate will be abolished. And this shows how great the lack of parliamentary experience is because its very difficult, obviously, to have the senate to swallow a decision of selftorpedoing. If you phrase it that way, you must vote to selfdestruct yourself, youll never get their party. Theres probably rather than abolishing one of the two chambers, the smartest way to handle that is to have a system where the two chaipg chambers dont just overlap like theyre doing today, but they differentiate themselves like in germany where stheer hanling different things. In italy, we have two chambers basically voting on the same bills and just causing a delay. Fair enough, francesco. Thank you so much for joining us. Joining us from rome, robert sticks around. The rbs chief jumps ship after just ten weeks on the job. What does it mean . Well get into that when we com come back. So i knit until it was full. Youd be crazy not to. Is that nana . [ male announcer ] fedex one rate. Simple, flat rate shipping th the reliability of fedex. Open to innovation. Open to ambition. Open to bold ideas. Thats why new york has a new plan dozens of tax free zones all across the state. Move here, expand here, or start a new business here and pay no taxes for ten years. Were new york. If theres something that creates more jobs, and grows more businesses. Were open to it. Start a taxfree business at startupny. Com. House and senate goerngzs shake hands on a u. S. Budget deal that could hit another off fiscal standoff early next year. Their job now is to sell the plan to the rest of the congress. Desktop computers arent dead. A rallying call from meg whitman says her turn around plan is still on track, but theres plenty to do. We have to be able to innovate. You can discovery the innovation engine is alive and well at hp. I think a lot of heavy lifting ahead. Finance director Nathan Bostock is jumping ship to santander after just ten weeks on the job. And European Finance ministers outline a trbled barga bargain. The euro group says hes confident a deal can be done before christmas. We can now see the outlines of a compromise and im quite optimistic next week we can finalize it. We saw treasury yields, the tenyear down to around 2. 8 . Its a little higher than that at the moment, 2. 811 . We were yielding 2. 93 post the employment report last week. And on the currency markets, dollar index down at sixwooem week lows. Shares at i. T. Hardware firm Hewlett Packard are up almost 90 this year as the Ceo Meg Whitman told us absoluexclusive country is on its turn around track. Carolin has been speaking to the woman herself in barcelona. Indeed, the numbers have been a lot stronger. Two years into the turn around strategy, the stock price has been responding, up about 95 in the last year. But some people call the recent removal of the stock from the dow index as a symbolic turn in fortunes. It was stripped out of the index and replaced by the likes of visa. Ive been talking to the Ceo Meg Whitman. Take a listen to her strategy. I think were making a lot of progress as we go forward. We are two years into a fiveyear turn around and obviously we have to accelerate Revenue Growth and continue to innovate. You can see and discover the innovation engine is alive and well at hp. So were making real progress. I think the turn around is on track, but a lot of heavy lifting ahead. I mentioned that moment where hp stocks were off the index. How difficult a task has it been to convince them to stay on board with hp . Well, weve been very transparent with the investor community. Weve laid out our plan. Weve deliver on that plan. And thats such an important part of the strategy with wall street, which is mean what you say, say what you mean and deliver. Thats what weve tried to do. And i think were begin to go build confidence around the product road map, where were taking the company. So i think theres more confidence which is why youve seen the stock go up. Additionally, weve increased our cash generation and now we are at a net debt position of zero on the operating company, which is a big milestone. When i came, we have 12. 5 billion of debt. Many people on wall street have big question marks about the future. At one stage there was a discussion about spinning it off and it was going to cost about 1. 5 billion. What is the future of pc . How committed are you to keeping it . Because it makes sense to try and spin it off these days. This was the very first decision i had to make when i came to hp because my predecessor said maybe we were spinning the pc business. So i said there is very much a core part of hp. This is what we know. Everything from, you know, as i said, bdi to workstation toes laptops all the way to huge High Performance compute machines. So it fits into our overall strategy, gives us supply chain leverage. So were committed to the pc business and now what we call the personal device business. Lets talk about some other on big events youre carrying. We have this issue in washington, it seems as though we might be getting a compromise to end this gridlock thats been impacting business across the board. What does it mean for hp . Do you think this brings any change to the level of spending . Certainty is always a big thing for business. We can plan for almost any eventuality. To plan almost everything. So on to the extent that there can be a bipartisan budget deal, we dont have another risk of a Budget Shutdown or a Government Shutdown in the United States, that would be a very good thing for not only u. S. Business, but frankly Global Business because, obviously, the United States still has a big role to play in the world economy. The other big factor, the unknown to markets is tapering and theres been a lot of chatter that perhaps tapering should kick off this month. Do you think the environment is Strong Enough for the fed to start removing some stimulus and whether the fed has impact . Well, of course, people have been talking about this for years. You know, our Interest Rates, obviously, artificially low and when will those Interest Rates start to creep up . And listen, im not an expert in this area, but i think over time, you know what is very good for the economy is not sharp movement. You know, sort of lets do little bits at a time and see what happens. So i wouldnt be surprised if there was some tapering in the future from the fed. You can hear meg whitmans message there as she speaks to about 7,000 customers here at this conference. And you can see a whole bunch of hp signs behind me. But behind these signs, theres partnership signs which tells you how much convergence this is going on in the industry and how much muscle hp is trying to exert here. Karen clearly recorded that for steve. But anyway, its always worth playing again. Use regulators have backed the volcker rule as part of a set of regulations that will dramatically curb the way they do business. The vote comes as eurozone finance ministers edge closer to a deal on a Banking Union. Yesterday they managed to hash out a draft plan. The draft compromise talked about how the cost of such a scheme could be equally shared among states. The details of this agreement are due to be discussed next week. Joining us with his thoughts, the fund manager of the Opportunities Fund at Asset Management, still with us is robert quinn from s p capital iq. Good to see you. Im not sure whether were working otherwise towards the common Resolution Fund or not. Clearly, the germans dont want that. It appears failing banks will be dealt with first on a National Level and then we sort of see where we go after that. But how important is progress on a Banking Union to confidence from banks from an investor point of view . I think its important to set the standard, to bring some credibility to a market that is still fearing about the potential blowup somewhere within the european union. I think it is now increasingly wrong to believe a system, an Important Bank could be the cause of, lets say, the next crisis. So i think going forward, whatever is going to come out of the decision, its good to have a standard, but generally speaking, we dont think if there is going to be any crisis, its going to come from a banking sector. What about the crisis coming from a country and the bank being stuffed full of that countrys bonds . That doesnt do anything yet. Does it discover the link between banks and sovereigns . Yes. But the responsibility comes also from the supervisor, the central bank that is actually provide the ability or preventing the access for some of these bank to pile into the sovereign bond market. So i think it is going to be the combination of the two. And lets not forget that as we go forward for the next few years, were going to get seriously some growth, some sort of a credit cycle starting to kick in. Also improving the asset quality and at some point will have some sort of tapering. But i think its part of the process of getting some standards but also making sure that we can provide growth. Banks are moved you know, rallied quite a lot since mario draghi came in with his dont worry, ill do whatever it takes. How much is in the price now . Well, maybe half. Half of the potential recovery simply because you still find it creates value in some of the institutions. But theyre actually putting their house in order. So going forward, we think that for the next two years within europe, we will get further reratings as credibility comes back into some of these countries set up with their house in order. So the cost of equity as we go forward with cause them to go down, enabling these companies to consider the rates. Even the likes of Commerce Bank are looking for selling noncore assets and getting their acts right. And i think as we go forward with a global i mean, a european standard, that will feel the completion of the recovery phase. Okay. Sort of echoing some of the things robert was talking about. Meanwhile, hsbc has agreed to sell its 8 stake in the bank of shanghai to santander. The transaction should be completed during the first half of next year. Santander and hsbc shares a little bit in focus today. And the financier has jumped ship after ten weeks on the job. Nathan bostock is the former head of restructuring at rbs and was expected to play key rate restructuring at an internal bad bank. At the same time, lloyds has received a reside fine of 28 Million Pounds for the way it incentivized its sales team. The bonus is not to put staff under pressure, but forced them to ignore what customers wanted. They always told me the banks are so customer focused. Helia has joined us around the set. Lets kick off with mr. Bostock. Is how much of a blow did he disappearing now . Massive. Some would say timing is everything. Back in 2011 1, he was going to go to lloyds. He changed his mind. He came back. He was promised a big job. Bruce went to run citizens. Hes been in the job for ten weeks. And youve got to think the chief executive of rbs this morning, ross mcqueuen came out and said nathan was a talented banker and he wished him luck but he looked forward to competing with him. I think you can gather from that that theres a lot of frustration internally at rbs. Every week, theres a bad headline. Theyre trying to conduct a Strategic Review to move forward. But this is going to be a massive fight. Remember, Steven Hester left in the summer. Before that, we had john hurricane leave the investment bank. Ross mccuen, his role still hasnt been filled. So youre looking at rbs which has all this kind of cornucopia of problems, trying to get the taxpayers kind of investment back with no finance directioner. No head of retail. A chief executive who has been in the job for a very, very long time. Its a difficult bank to run. We went through three headlines there. Hs hsbc, the Headline News around banks have been terrible, whether its probes into rigged trading, more regulation coming down the pipe, why is that not going to be more of a headwind . It doesnt really matter, global banks have had it, you know, whether youre jpmorgan, whether youre ubs, libor rigging, wales issues i think actually we should see that as good news because we are now getting right most of what we potentially think could go wrong at this time. Going forward, we could have quite a lot ahead of us. It is potentially the next restructuring story. At the end of the day, theres a lot of value for investors. So i think if you are the litigation or regulation rates growing into next year are still going to be around, they are going to be smaller. Because most of the obvious is deemed out today. The issue remains with these banks, when theyre getting these signs, i think banks bad behavior, if you like, and probably touched on this, will always be around and its a question of whether or not we can handle these funds and these costs. Bank equities largely follows. It has a long way to catch up with that. In europe, its about 20 and in europe, its about 0. 5 . It takes a couple of periods to come out of loan growth. So youre a couple of years away from that, but you get an enormous pick up in the bank earnings. Thanks so much for that, helia, guy. Thank you so much for joining us, as well. Export in india rose, a far cry from the double digit growth of the past four months. But the trade figures had a silver lining. Hector joins us from mumbai. Hi, thanks for that. Like you mentioned, it has been disappointing. Overall, it went down in double digits for the third consecutive month. That was quite a positive that we saw. We saw the oil and the nonoil imports which is basically primarily gold and silver, down 80 for the second month. So that was positive. We have clocking anywhere between 25 to 27 million billion dollars in terms of exports in the past for months at least. That scaled down to around 24 billion to the month of november. Nonetheless, it came in at around 9. 5 billion. But most of the current account deficits, most economies are at the back and now there is more conservation and how exactly fiscal deficits would pan out. Back to you. Thanks, good to see you. Here is a reminder of whats on the agenda in asia tomorrow. No moves are expected. On the data front, we get november cpi. One of congress longs biggest ipos makes its trading debut. Still to come, in did i tex has seen a rise in sales. Is this enough to make up for the stronger euro . The ukrainian riot police have now left the protest sites in kiev, despite attempts for the ukrainian president to diffuse the standoff. The opposition continued to demand the resignation of the current leadership. The Prime Minister was quoted as saying this morning, they would need around a 20 billion euro loan from europe if they were to consider signing the deal. And the strong euro, meanwhile, appears to be weighing on the worlds biggest clothing retailer. Inditex, some of its markets lost value against a single currency. Thanks fob joining us. On balance, the sales were pretty much what we expected, right . Thats right. The Third Quarter was up 8 in organic terms. But like you said, a big impact. I think whats in that interestingly, the second half of the quarter actually flowed. It had the sales growth of 10 for the first half of the quarter and that slowed, leading to an 8 growth overall for the period. However, since then, in the first five weeks of the Fourth Quarter, weve seen things pick up again. Which obviously bodes well as we head into the very critical end of year period. You make the point inditex is trading on 25 times earnings and its currently 26 above its five year average. Does that mean its expensive . I think its close to its peak multiple, record peak multiple. Of course, its all relative. I think considering the groups profile, it looks relatively expensive. Clearly this year is not expected to be as strong as growth year. Part of that is due to translational fx impacts. However, going forward, if you take a longer term view, i think in the mid teen Earnings Growth level. If you consider that and look on a wider perspective, considering the Growth Opportunities it still has, somewhere in developed markets as we consider market share in places like the u. S. , china and russia are less than 3 . To me that suggested its the scope for the brand and this group of brands that continues to expand. Weve seen the effect of the euro essential. Theres a whole host of germans coming out in the last quarter explaining about the strength of the euro. How is the euro going to Impact Companies in europe particularly against the dollar with tapering . Is it going to be a help or a hinder . Its been a hinder for a little while now. Youve seen on the previous season the cross sectors. Will they get better . Will they get better, i think the key catalyst is the taper event. I think the euro is overvalued versus the dollar. I think once you get to the taper event, you will start to see the gap between the size of the respective Balance Sheets between the ecb and the fed. And thats been the key regime for that currency. Its been much more important than the twoyear yield differential between the bund and the ufcs, the ecbs balance sheet, 25 lower than it was maybe 18 months ago. So i think the euro will turn on that moment. I think a lot of people underestimate the actual superior Growth Profile the u. S. Is about to go into. Were very optimistic on the u. S. Economy. And just a final word from you. Youve got a number of stocks you like . Swatch, prada. Was your outlook for next year . I think for next year, weve had a bit of a jittery Third Quarter, a big slowdown in organic sales and obviously the fx impact playing in. Some of the effects that impacted on the Third Quarter, i think, will continue beyond that and into the Fourth Quarter and First Quarter of next year. Some of those are strategies, great for the longer trm, but in the shortterm could impact on growth. I think overall we might have a couple more quarters of more subdued momentum in the sector. But beyond that, i think were well positioned and continue to see high organic sales growth in this sector which is still very unique. Its still well protected. It has brands that have Pricing Power and its very difficult to replicate brands which have hundreds of years of heritage. So im optimistic on the sector beyond the next couple of quarters. And i think were in a position to see strong top line growth coupled with expansion. Thank you for that. Quinn, thank you from s p capital iq. Still to come, Hewlett Packard Ceo Meg Whitman shrugs off concerns of potential activists. Our strategy from the beginning has been that we are stronger together. That is our point of difference relative to our competition. But obviously, we have to prove out that thesis, right . [ male ] for every late night, every weekend worked, every idea sold. You deserve a cadillac, the Fastest Growing fullline luxury brand in the United States. Including the all new 2014 cadillac cts, motor trends 2014 car of the year. Now during our seasons best event, get the best offers of the season on our Award Winning products, like the 2014 ats and srx. Open to innovation. Open to ambition. Open to bold ideas. Thats why new york has a new plan dozens of tax free zones all across the state. Move here, expand here, or start a new business here and pay no taxes for ten years. Were new york. If theres something that creates more jobs, and grows more businesses. Were open to it. Start a taxfree business at startupny. Com. Yep. Got all the cozies. [ grandma ] with new fedex one rate, i could fill a box and ship it for one flat rate. So i knit until it was full. Youd be crazy not to. Is that nana . [ male announcer ] fedex one rate. Simple, flat rate shipping with the reliability of fedex. Youre watching worldwide exchange. Im ross westgate. The house and senate shake hands on a new budget deal. The job now is to sell the plan to the rest of congress. Desktop computers are not dead. A rallying call from meg whitman as the hpceo tells cnbc exclusively her turn around plan is on track, although theres still plenty to do. We have to continue to innova innovate. I think the turn around is on track, but a lot of heavy lifting ahead. Wall street is ordering room service. Hilton getting set to rejoin the ranks of publicly traded company. Should price ipo after trade today. Shares in rbs trade lower as finance director Nathan Bostock quits the lender after just ten weeks on the on job. Hes jumping ship to rival santander. Announcer youre watching worldwide exchange, bringing you Business News from around the globe. If youve just joined us stateside, a very good morning. Welcome to the start of your Global Trading day here on cnbcs worldwide exchange. U. S. Equities were softer by the close. Dow down 52 points. The nasdaq down 8. This morning, were pretty much on fair value for the dow. Were a couple of points below for the nasdaq, the s p is pretty much on fair value. So not much indicated at the moment. The ftse cnbc global 300 flat and the ftse and the xetra dax pretty flat this morning. Xetra dax is up 16. The ftse mib is currently down 24. And on the currency markets, dollar index is down to a sixweek low. Euro dollar, 1 is. 3833 with that high, were currently at 1. 3760. Dollar yen has moved back below 103. That is the trading action in europe, two hours into the session here. Lets recap what happened in asia today. To do that for on us, here is sixuan. Thank you, ross. Asian investors remained cautious, but news of a u. S. Budget deal is helping cap any further downside. The markets still led losses for the shanghai composite ending the day lower by 1. 5 . Over in japan, the nikkei 225 ended down 0. 6 . Meanwhile, south korea and australia both lost nearly 0. 8 . In the new Zealand Market, dumera tumbled after the group slashed its 2014 earnings and dividend guidance. India reported a november trade deficit of 9. 2 billion and thats nearly a previous 2 drop of the index. As for some individual movers, banking shares dropped today. Chinese banks will drop 15 million. This marks another step for deposit Interest Rate liberalization. And that is a quick update of the asian markets. Back to you, ross. Thanks for that, sixuan. Federal spending levels are set at 0. 12 trillion for fiscal 2014. It its a little higher than the current law, but less than what Senate Democrats wanted. The deal replaces around 63 billion in ee quester budget cuts by hiking Airport Security fees and reduces pension benefits. Patti murray says it rolls back to the sequest ner a balanced way. I think this agreement is a clear improvement on the status quote. This agreement makes sure that we dont have a Government Shutdown scenario in october. It makes sure that we dont lurch from crisis to crisis. This deal builds on the 2. 5 trillion in deficit reduction we have done since 2011 and continues the precedent that we set in the fiscal cliff deal that sequest railing shouldnt be replaced with spending cuts alone. This bipartisan deal will help millions of americans who were wondering if they were going to keep paying the price for d. C. Dysfunction. House Speaker John Boehner praised it. He didnt say whether the house could pass it. It doesnt address looming longterm inemployment benefits or the u. S. Debt ceiling which has been extended through to february the 7th. Martin, a very good morning to you. Does this budget do anything . Is it a false storm . Well, i dont think anybody expects that this is anything like a permanent fix. It is a step forward in the sense of finally showing some ability to get together the operate parties. You know, theyve been stalled for quite a while, but with the congresss Approval Rating at an alltime low and with midterm approaching, theres incentive to start looking like they can work together. Yeah. And what it may do, bearing in mind if you believe that the fed didnt taper, martin, in part because of concerns about politics, does it mean its less of an imbedment if they want to announce something next week . I think it does relieve one concern. They have been, of course, concerned about the economy as you usually do at this point in the cycle. You see some mixed signals. Thief wanted to be sure that there really is some traction. But at the same time, as you suggest, they have not wanted to add concerns about tapering to the uncertainty which has been a very serious concern to the Business Community that there has been so little predictability about the course of the budget in washington. Why is this right for now . We know eventually the fed will start to raise rates, but it seems a ways off. The tapering may not have as devastating effect as might have been the case earlier in the year. But sooner or later, rates will go up and the longer the majority of bonds, the more youll get hit when that happens. So its painful to stay at the short end, take the low rates. But when those bonds mature, youll be able to roll into the higher rates than prevailing. So you cant time it precisely. Again, it may hurt you during 2014. But i think its really the best strategy. Do you think they should announce it, just get it out of the way next week . I think there is some definite argument for that. Im not convinced that when the tapering occurs it will not ruffle feathers at all. Its not clear the market will get through it quite smoothly. But i think the strengthening of the economy, the signs that we really are moving along really make a difference from where we were earlier in the year. I think were now getting to the point where, once again, good news is good news, that a sign of improving economy does not signal that, well, thats going to cause the fed to taper and, therefore, we have to be bearish about that development. Martin, good to have you on this morning. Stick around, i hope youve got coffee or whatever it is you need there to stay secure and safe. Shares in i. T. Hardware from Hewlett Packard are up almost 90 this year. That as Ceo Meg Whitman told us exclusively the companys fiveyear turn around plan is on track, but theres still plenty of work to do. I think were making a lot of progress as we go forward. But we are, as you said, two years into a fiveyear turn around. Obviously, we have to accelerate Revenue Growth and we have to continue to innovate. And you can see and discover the innovation engine is now alive and well at hp. So were making real progress. I think the turn around is on track, but a lot of heavy lifting ahead. I mentioned that moment where hp stock dropped off the dow index and that was a big moment for you, i guess, with investors. How difficult a task has it been to convince them to stay on board with hp . Weve been very transparent with the investor community. Weve laid out our plan. Weve delivered on that plan. And thats such as important part of the strategy with wall street, which is mean what you say, say what you mean and deliver. Thats what weve tried to do. And i think were begin to go build confidence around the product road map, where were taking the company. So i think theres more confidence, which is why youve seen the stock go up. Additionally, weve increased our cash generation and now we are at a net debt position of zero on the operating company, which is a big milestone. When i came, we had 12. 5 million of debt on the operating company. What is the strategy . Youve launched a couple of these devices. Up five, i believe, and they were selling for that 89 on black friday. How big a position do you need in the market for it to be profitable . Are you doing it as an addon to the rest of your services so you can say we are the biggest in the business and this device is right across the data center . Well, i would separate our commercial business from our consumer business. In the commercial business, we have a tremendously strong lineup because we can go from Virtual Desktop to workstations to desktops. By the way, desktops are not dead. To laptops, to hybrids, to tablets for the commercial enterprise. Then in the consumer business, this is a much more competitive business with very low price points. Were going to be careful about where we play and how were going to win. Theres no point in not making money. We have to segment the market and be thoughtful about it. But, listen, we really like our position in the commercial space and weve got some innovation coming in the consumer space, too. Many people on wall street have big question marks about the future. At one stage, there was discussion about spinning it off. This was going to come on the back of acquisition. What is the future of pc . How committed are you to keeping it . It makes sense to try and spin it off these days. This was the very first decision i had to make when i came to hp. I took 100 days and basically said, this is very much a core part of hp. And here is why. We are the biggest compute company in the world. This is everything we know. Everything from vdi to workstations to lap taupes all the way to huge, High Performance compute machines. So it fits into our overall strategy, gives us supply chain leverage. So were committed to the pc business and what we now call the personal device business because its far beyond pcs. Hewlett packard Ceo Meg Whitman speaking. Well bring you more of that interview later in the show including her take on the threat of another Government Shutdown which may have dissipated slightly. Well be over to brussels to hear from euro Group President jerome disselbrun. More to come from worldwide exchange. Open to ambition. Open to bold ideas. Thats why new york has a new plan dozens of tax free zones all across the state. Move here, expand here, or start a new business here and pay no taxes for ten years. Were new york. If theres something that creates more jobs, and grows more businesses. Were open to it. Start a taxfree business at startupny. Com. You can fill that box and pay one flat rate. I didnt know the coal thing was real. Its very real. David rivera. Rivera, david. [ male announcer ] fedex one rate. Simple, flat rate shipping with the reliability of fedex. Time to make a booking for wall street as Hilton Worldwide seeks to raise 2. 4 billion in its ipo. And hps Ceo Meg Whitman issues a rally price saying there is a future for desktop computers. Eurozone nations, mean wile, have edged closer to a deal on a Banking Union with finance ministers hashing out a draft plan outlining how a new agency could close failing lenders. The u. N. President told cnbc banks will maintain responsibility for their balance sheet, despite the creation of a common rescue fund. Its going to be a single Resolution Fund. The architecture of it is to be discussed. But i think we all want to make sure that its credible, that the funds will be available if banks have to be resolved. But luckily, we have firm bailin rules put in place. They will take first blow. They will deal with the first losses. Then if there are more losses, then we can go to the fund. Julia joins us for more. Julia, when is a deal not a deal and when is a single Resolution Fund not a single Resolution Fund . A deal isnt a deal, ross, when its an outline of a political agreement in brussels, how well you point that out on. But the negotiations are going to continue next week and this is a strong belief here we are going to reach a deal. The question is what kind of a deal . A watered down deal very much on the germanic lines. Let me take you through what we know and ill take you through the key concerns and the questions that still need to be addressed next week. Were going to see a threestage process. Bailin is going to be brought forward to the cypress star bailin senior critters to be bailed in to the seeing losses if the bank struggles or it needs to be ran down. Then and only then if more cash is needed we go to the National Funds. And over the course of ten years, those National Funds are going to be xwacombined to makee common fund. And those votes are going to be weighted so were going to have the likes of germany, of the netherlands, finland, the Northern European countries able to veto that cash being used. So one big concern there. The second question, of course, is what happens if one of those National Funds gets used in the shortterm, where else can they go . Right now theres a crucial question there and, of course, the final question here is is there going to be a back stop for the ultimate back stop and gain . Thats going to take ten years to build. Yes, its a step forward, but a political agreement at this stage is not yet a deal. But plenty of work from today. Back to you. As ever, jules. Thanks very much indeed for that. Still to come, she came in like a wrecking ball, literally. But is risque pop star miley cyrus really a symbol of the way we live . That could be the vote of Time Magazine editors person of the year. Miely has to fight the likes of pop francis, Edward Snowden and je bezos, who all made the top ten. The winner is going to be announced later today. This isnt people who are necessarily good, its just people who have been notable, either good or bad. We want to know who represents 2013 for you and why . Has Time Magazine chosen the right person . Have they missed that one man or woman that youre going to remember the year for . Email us, worldwide cnbc. Com, tweet cnbcwex or direct to me rosswestgate. Still to come, as investors await the implementation of the long awaited third title of the jobs act which backs crowd funding, our next guest says women are more successful at raising funds through the crowd than traditional methods. Plus, more with our exclusive interview with meg whitman and her views on tapering. Well leave you with her excitement as the new head of general motors. What a milestone. The first female ceo of a big three automaker in the United States. I was thrilled for mary and also thrilled for gm. Frankly, i think its a real milestone for women in business. [ male announcer ] how could a luminous protein in jellyfish, impact Life Expectancy in the u. S. , real estate in hong kong, and the optics industry in germany . At t. Rowe price, we understand the connections of a complex, global economy. Its just one reason over 70 of our mutual funds beat their 10year lipper average. T. Rowe price. Invest with confidence. Request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing. [ male announcer ] this december, experience the gift of unsurpassed craftsmanship at the lexus december to remember sales event. Some of the best offers of the year. This is the pursuit of perfection. More than a year after president obama signed the jobs act implementation, investors are waiting for the third title which deals with crowd funding. The component would allow nonaccredited individuals to invest online into private companies. But were unlikely to see it come into effect until april or may next year. Joining us is renee wingleman. Martin is also with us in new york. Martin, nice to have you back. Thanks. Lets kick off with you, renee, first of all. How important is title three going to be . At the moment, you cant invest in equities. Sure. Its the large global crowd platform in the entire world. People use it to create a campaign to raise money for their business, even their charity in exchange for perks. So whats exciting about the jobs act is that now in addition to perks, youll be able to add to equity. The reason thats exciting is because all kinds of ideas could potentially be unleashed and are unable to get started. Im interested in because you can invest in plays and theaters and things. Is that not you know, and get a financial return on it. Why is that different from a private business . Its a very private financing experience. So you have to know the right people to get in on the deal. But equity crowds are doing as well as anybody to invest. So what its doing is its providing main Street Investors the same opportunities. No, im just thinking in the uk i can invest in a theater production for natural return. You can get a perk in return. So maybe you can get a chance to go to theater or to an Opening Night party, but you cant get an equity piece in the project. Right, okay. Martin, are you a fan of crowd funding . Well, i think the idea of making Equity Investments possible in order to help Small Businesses without the instructions, you know, the red tape is required is a good idea. At the time that this big was under consideration, there were concerns expressed about the protections for the investors. Of course, under traditional underwritings, theres quite a bit of disclosure requirement. And at the same time that youre reducing the red tape, there were some concerns that you might be raising the risk of misrepresentation. And i guess i would ask our guests what concerns, what sort of safeguards are there, what is the danger of this program being side tracked by if a problem of that nature arises. Sure. Yeah. I think weve been actually dealing with that same risk and problem for the last six years, since we started. So just because we are purcha purchasing a platform, it didnt mean that people werent going to try to take advantage of it in the way it wasnt intended. We have a whole Data Science Team working out in San Francisco mining our site and keeping the site clean and free. So were using technology to adjust those risks. Were excited about taking the same things weve learned and applying it in the equity environment and continue to make it a safe environment. I suppose it cant just be technology. This is what responsibility does the provider have for, you know, where is the legal responsibility for what you put on the site and making sure that, you know i suppose are you being will you have it as a normal exchange for Due Diligence when it comes to list, for example . I think it will be similar to when we launched indygogo the first time. When you go on to the internet and you say what youre going to do, i think we just heard meg whitman say her investor strategy is mean what you say and say what you mean. In did i gogo is the ultimate place to do that. Youre telling the world what you want to do. Whats the most successful our Biggest Campaign came out of the uk here, they raised 13 million and 27,000 people for a phone, which is an open operating system they were looking to put into a phone. Renee, good to see you. Thank you so much, cofounder of indy gogo. Todays tenyear treasury auction could be a litmus test for december take placer from the fed. Well look at the likely timetable for the central bank to pull back on its bond pure chases. Also more on meg whitmans view. You know, our strategy from the beginning has been that we are stronger together. That is our point of difference relative to our competition. But, obviously, we have to prove out that thesis, correct. Honestly, im not looking for fivestar treatment. I get times are tight. But its hard to get any work done like this. Then came this baby small but with windows and office. It runs my work stuff. And i can use apps like flipboard for news, or xbox video to watch the shows im never home to see. And i can still get work done at the same time. Excuse me, do you mind if i. Yep. Honestly, i wanna see you be brave youre watching worldwide exchange. Im ross westgate. House. Senate shake hands on a budget deal. Their job now is to sell it to congress. Desktop computers are not dead. A rallying call from meg whitman as the hp ceo tells cnbc exclusively its on track, but they have to continue to do. Were making real progress. I think the turn around is on track, but a lot of heavy lifting ahead. Wall street is ordering room service. Hilton gets set to rejoin the ranks of publicly traded companies and should price its ipo after the close today. And shares in rbs are lower. Finance director Nathan Bostock has quit after just ten weeks in the job to jump ship to rival santander. Announcer youre watching worldwide exchange, bringing you Business News from around the globe. A warm welcome if youve just joined us stateside. U. S. Futures this morning are pointing a fairly flat picture. The dow and the s p down 5 right now. The s p pretty much on fair value as is the nasdaq. And the dow is just, what, some sort of six points above it. So no real indication of where we might go from the open, apart from not very far. The ftse 100 down was some 36 points yesterday. Currently up 6. Were up 0. 1 for the xetra dax. Cac 40 in france is up a little more, 0. 6 . Were down for the ftse mib. Meanwhile, congress has reached a budget deal that will avoid another Government Shutdown. Earlier to the channel we spoke to the ceo of Hewlett Packard who welcomed the news. Certainty is always a good thing for business. We can plan for almost any inventorilty if we kny l eventuality if we know whats going to happen. So on to the extent that there can be a bipartisan budget deal, we dont have another risk of a Budget Shutdown or a Government Shutdown in the United States, that will be a very good thing for u. S. Business and frankly Global Business because, obviously, the United States still has a big role to play in the world economy. The confusion about the macro data, so when it comes to your own numbers, if you had to look at 2014 and we do see this deal push through to the end, does this make a 5 , 10 difference to your numbers . Is there any way to separate that out . Its hard to know. What we are counting on as we plan for calendar 2014, were not speccing any tailwinds from the macroeconomic environment. Almost anywhere in the world. So i suppose if there was a budge deal and you saw the u. S. Economy accelerate, that would be helpful to us. But well wait and see. Theres been a lot of chatter by some of the Board Members that perhaps tapering should kick off this month. Do you think the environment is Strong Enough for the fed to start removing stimulus and whether that has impact and borrowing costs for some corporate customers . Yeah, yeah. Of course, people have been talking about this for years. Our Interest Rates artificially low. And when will those Interest Rates start to creep up . And listen, im not an expert in this area. I think over time, you know what is very good for the economy is not sharp movements. You know, sort of lets do little bits at a time and see what happens. So i wouldnt be surprised if there was some tapering in the future from the fed. Meg whitman speaking to karen tso. Bond traders today put their money where their mouth is on fed tapering. Theyre expected to offer clues where Market Expectations line up on the feds timing. Fridays better than expected jobs report, the chances for tapering in december have increased in the eyes of traders. Martin is still with us. Martin, were talking about this a little earlier. Its kind of intriguing, actually. Since that jobs on report. We saw treasury yields go higher to 2. 93 . The yield on the tenyear. Since then, were now yielding 2. 8 . Does that suggest they dont think tapering is imminent or actually that were sort of comfortable with it . I think that the market is getting more comfortable with the tapering earlier in the a great deal of concern. Year. There is just the suggestion that tapering might begin, was quite disruptive to the market. Im not convinced that weve entirely turned the corner on that. I dont think you can do something as major as that without the market noticing at all. But i think the market is better prepared for it than it was earlier in the year. And weve had positive response in the stock market to strengthening in the economy as opposed to a fear that tapering will upset the apple cart. Yeah. Theyve gone out of their way, havent they, to say tapering isnt tightening and Interest Rates are going to stay low for a very, very long time. Theyre binary in their thinking investors about that. But what risks are there at some point from Interest Rates going higher and how exposed, also, is i suppose the higher levels of fixed income market, the high yield markets . Well, the high yield market, interestingly, the strategists from the investment banks typically start the year saying that the market will earn the coupon, meaning that the total return will be somewhere in the vicinity of the yield on the index currently around 5. 6 . Theyre not saying that now, talking about low single digit negative returns. So thats reflecting the likelihood of some rise in the underlying treasury rate. I would say also some vulnerability on the risk premium above the treasury rate, which by my reckoning ought to be close to the historic average of about 6 , but is getting frightfully close to 4 . So i see some vulnerability there, as well. So it may be a good place to be on a relative return basis because youre likely to have bigger price decreases in the Higher Quality bonds, but should not look to this to be certainly not an outstanding year for high yield and quite likely below historical average returns in the mid to high single digits. Clearly what youre suggesting is theres a large overevaluation of that. People have lost a lot of money, you know, saying that its the end is over for income investors. Well, thats right. The argument that you hear is that default rate is not likely to rise significantly and i would agree with that based on the signs we can see now. But the overvaluation that is really a function of the feds extraordinary support and i think that is one vulnerability in the tapering that even if rates dont go up, the very aggressive injection of liquidity into the system by the fed is that it starts to slow down, that may remove some of that artificial strength in the risk premiums. As always, thanks very much, indeed, for joining us. He gets up early, now he gets to go to his days job. Hilton worldwide, the parent of the hotel chain, is expected to price its ipo after the close of the state today. It could be the second biggest offering of the year if the Company Raises the maximum 2. 7 that it might be targeting. Hilton was taken private by blackstone in 2007 for 26 billion including the debt. The company is aiming to sell up to 130 million shares priced between 18 to 21 each and will trade on the New York Stock Exchange under the ticker hlt. British boston rail Operator First Group, meanwhile, has rejected a proposal from sandel Asset Management to split the firm and sell its u. S. Business. The plan is not compelling and takens inaccuracies according to firstgroup. Helia joins us now and has been looking at this. It hassle low bus business and greyhound. Its been underperforming. Just as the uk business has been underperforming. What san did he lla has come in and said is actually if you got rid of these businesses, you would bring debt down and take the share price up to 199. Thats way above where it was before the rights issue. Back in may, the companys share price halved as you can see when it launched about a 600 million rights issue to pay down debt. Now, the company is saying it wont work. Weve looked at this, taken the opportunity not to sell these businesses, but we do have a Capital Market presentation in january and the market clearly thinks that there is something going to happen. Whether thats accelerating its Cost Cutting Program or making sure it gets the targets faster, the company will have to extract more value because people like sandell, activist investors really keep pushing. It depends how much support they get from others, presentations. Absolutely. Things Like National express and elliott partners, they took a 20 stake and pushed for big changes. And in the end, they walked away with a profit. So there is history in this. Still on the rise. Helia, thank you very much for that. Still to come, just a year ago, president obama was riding high after his reelection victory, but hes ending 2013 on a low note dubbed by troubles with his health care program. Theres the latest nbc wall street journal poll coming up. Ya know, with new fedex one rate you can fill that box and pay one flat rate. How naughty was he . Oh boy. [ male announcer ] fedex one rate. Simple, flat rate shipping with the reliability of fedex. A recap of the headlines, shake my hand. The house and the senate agree on a budget deal. Debt limits still loom. Hilton world would it is getting set for an ipo. And hps Ceo Meg Whitman issued a rally cry. She says there is a future for desktop computers. And what a difference a year makes. President obama started out 2013 on a high note. Coasting to a high Approval Rating following his reelection. But amid a series of challenges over the past several months, that public support has faded dramatically. Bertha coombs is at cnbc hq in the states with more details. Hi, bertha. What are the ruin is telling us devining the numbers . Good morning, ross. Health care appears to be making the president s rating lower than they were a year ago. 54 of americans disapprove of president obamas performance. Obama ar Approval Rating was about 52 , but its been edging down all year. About half of people say theyre disappointed or dissatisfied with his presidency. While the past year has presented several challenges to president obama. The maybe culprit for his current woes has been the troubled roll yoout of his Signature Health care rollout. Nearly the same amount say they are bothered more by the problems with the healthcare. Gov website. Some americans are losing their current plan. That bothers them, as well. However, there is a small silver lining. Only a quarter, one in four, believe that the program should be totally scrapped. But perhaps more significant, president obama has seen declines in key attributes, just 28 now give him high grades for being able to achieve his goal, down 16 points from january. Only 37 find him honest and straightforward. 44 believe hes able to handle a crisis. Thats down five points from june. The president isnt the only one that gets a bad grade. Many people are down right disgusted with congress. 51 view the 115th congress as one of the worst ever in terms of performance and accomplishme accomplishments, low marks for the people in charge in washington come as americans are becoming more optimistic about the state of the u. S. Economy. And only 3 say the economy will improve over the next year. Thats up 12 points since early october when the Government Shutdown began. And certainly the most recent numbers weve gotten on unemployment and job growth may well be helping there. But healthcare. Gov has been a big, big problem for the obama administration. Kathleen sebelius will be testifying this morning before the house energy and commerce committee. Shes going to taught the improvements on the website since theyve had their fix. Since december 1st, things have been rolling along. Nonetheless, its been a very, very rocky start, to say the least. The moral is that health can really damage you, right . Yeah, yeah. Certainly the health of your administration or the way people perceive it. Thanks for that, bertha. Always good to see you. Have a great day. Meanwhile, they came in like a wrecking ball, not bertha, but risque pop star miley cyrus. Is this really a symbol of the way we live . Time Magazine Editor nancy gibbs has included the singer on the list of this person of the year title. Pope francis, Edward Snowden and jeff bezos also made the top ten. Its knots not necessarily about whether youre a good person or a bad person. Its about have you been in the news a lot, i suppose. The winner will be announced later today. So weve been asking who do you think should be the perpendicular of the year . Still to come, we have a deal. Should investors cheer the ryan murray agreement or should investors simply agree to a small deal to start their holidays early . Well get the view from d. C. After this. Open to ambition. Open to bold ideas. Thats why new york has a new plan dozens of tax free zones all across the state. Move here, expand here, or start a new business here and pay no taxes for ten years. Were new york. If theres something that creates more jobs, and grows more businesses. Were open to it. Start a taxfree business at startupny. Com. Impact wool exports from new zealand, textile production in spain, and the use of medical technology in the u. S. . At t. Rowe price, we understand the connections of a complex, global economy. Its just one reason over 70 of our mutual funds beat their 10year lipper average. T. Rowe price. Invest with confidence. Request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing. House and Senate Negotiators have reached a twoyear budget deal to head off the threat of a Government Shutdown next month. It sets spending levels at 0. 12 trillion for fiscal 2014. Its higher than the current law, but less than what Senate Democrats wanted. It replaces around 63 billion in sequester budget cuts by hiking Airport Security fees and reducing federal Workers Pension benefits. Paul ryan says the deal is a step in the right direction. His counterpart senator patti murray says it rolls back the sequester in a balanced way. I think this fwraemt is a clear improvement this the on the status quo. This agreement makes sure we vent have a Government Shutdown in january, it makes sure we dont have another Government Shutdown scenario in october. It makes sure we dont lurch from crisis to crisis. This deal builds on the 2. 5 trillion deficit reduction we have done since 2011. Continues the precedent that we set in the fiscal cliff deal that see zest ragz shouldnt be replaced with spending cuts alone. This by partisan deal will help millions of americans from wondering if they were going to keep paying the price for d. C. Dysfunction. Congress has to approve it. President obama calls it a good first step. John boehner praised it. Joining us is ed okeefe. Ed, very good morning to you. What is it like, this business passing through the house, do you think . It looks like theyll probably do it. All indications are they have enough folks in the middle to pass this deal. You pointed out with the lack of Unemployment Insurance and this really doesnt address the deficit, but the fact that it makes all these other cuts, saves the pentagon, pumps more money into them once again suggests that this is going the happen. The big reason more than any, its a twoyear budget agreement that for the next two years assures that washington isnt lurching from one deadline to the next and allows washington to get back to work on all sorts of other issues, especially with campaigns looming in november. Yeah. So whats the plan . We get this voted in the house on friday and then the senate would, what, wrap it up next week . Looks like it. The idea here is get the house out of town by friday. Theyve been here for the past two weeks. The senate got back on monday. Theyre working there way through a bunch of nominations now including janet yellen to lead the u. S. Federal reserve. At some point they would agree to this, send it over to president obama, and for the next two years, we wouldnt have to worry about the budget. They might turn their attention to such things such as tax reform and finding other ways to pay down the deficit. But this is a notable change, especially requiring federal workers and military retirees to shoulder more of the burden on their pensions. Its something thats been talked about for years. Something the cities and states have had to do with their budget shortfalls. Now putting more of it now on the backs of civil service, something notable both parties seem to be willing to do. We just heard bertha talking about how much low esteem, if i can put it like that, congress has now held by american people. Is that mow the defining character in this in these discussions . Its certainly part of it. Theyre looking for ways to demonstrate that theyre doing something. And if they can get a modest budget deal that saves roughly, what, 20 billion or so in the coming years and then they can sort out some other things before the end of the year and come back in january and get to work on other on things, other domestic concerns, they may head into novembers elections with those numbers creeping up just a bit because of what demonstrated that they could get some things done. But this year has been wasted. Congressional record will reflect that only about 61, maybe 62 pieces of legislation were passed by both chambers and sent to president obama. That is a post world war ii historic low. Lawmakers know with a 9 Approval Rating, theyre flirt, thrift terrorists and undertakers. What battle are we going to have over the debt ceiling, though, next year . Well see. Theres always a desire to do this. Theres a good collection of folks on capitol hill would want to discuss it. But thats not exactly a sexy issue to discuss in a campaign year. There are those, especially on the right who understand this is something that has to be done. But, you know, theyve tried cutting for the past few years. It doesnt necessarily seem to have worked. It really has sort of made it difficult for the government to get anything done. So well see. Theyll keep talking, but i wouldnt expect much work on that in 2014. Ed, good to see you. Ed okeefe, joining us if it is washington post. Earlier we told you about Time Magazines perpendicular of the year and asks who represents 2013 for you. He said the pontiff. He has set the Catholic Church on a new course for its future. And darin said our very own helia. Coming up next is squawk box. We hope you have a profitable day. Goodbye for now. Good morning. A budget deal has been reached. But will enough people get on board . Gm is done with the land down under. The automaker is going to End Manufacturing in australia by 2017. And uruguay goes up in smoke. It will become the first country to set up a National Marketplace for legal marijuana. Andrew is checking the flight reservations down there light now. Its wednesday, december 11th, 2011 and squawk box begins right now. Good morning, everybody. Welcome to squawk box here on cnbc. Im becky quick along with joe kernen and andrew ross sorkin. Our big story this morning is the budget compromise. Patty murray and paul ryan reaching a deal that will avoid a Government Shutdown. I think this is a clear improvement on the status quo. This agreement makes sure that we dont have a Government Shutdown scenario in january. It makes sure that we dont lurch from crisis to crisis. This deal builds on the deficit reduction that we have done in 2011 and sets the precedent that sequestration shouldnt be replaced with spending cuts alone. This deal will help millions of americans wondering if they were going to keep paying t