Transcripts For CNBC Worldwide Exchange 20140113

British oil services of amec offer to buy another company. Youre watching Worldwide Exchange bringing you Business News from around the globe. All right. Now on monday morning, 64 as far as european equities are concerned. We are up by just. 01 . If you remember back on friday, they are holding the rally we are seeing in the european indices, but as of trading this morning well take a look at this this morning. Look at the ftse 100 up. 01 . Same for the cac 40. Well look at the sectors because it really is the banks in focus this morning up over 1 this morning. European banks among the biggest winners after regulators agreed on sunday to relax new rules to improve leverage ratios. This is a relief for the global vendors who fear raising billions in extra capital. The new standards being drafted by the bars of committee, of course, tossing the chance to reduce debt. They hope to allow that to push out lending with the economy. We can hope. Lets have a look at the bond markets this morning, too. The one that i really do want to point south the tenyear treasury, we cant ignore the 8 basis point selloff on friday taking us down to 2. 86 this morning. And as far as the periphery markets go, in particular, we have the dollar softness after that payoff on friday continued into the asian session. But relatively unchanged as far as euro dollar is concerned. We are still seeing the dollar softness dollar yen at 103. 40 right now. Commodities now with the Global Markets today, gold continued to rally this morning up. 10 . A spike on friday for a weaker dollar and higher commodity markets, this was a onemonth high. From the rates market yet, brent and lme are up slightly after what we saw with iran over the weekend, but we have to live and hope. Nickel is the big move up 1. 5 . Indonesia is working on minimum ore experts. President obama allowed the expert of copper, iron ore and zinc concentrates to continue. So its focusing on the nickel market right now to give a reprieve to the countrys foreign mining giants freeport and numont. This was the biggest rally since september on the bank, which the government believes will boost domestic processing. Israeli producers are also expected to benefit from the move sending aluminum and other areas higher. Indonesias 2 billion Nickel Industries are being threatened and adding to current account pressures, not to mention that the Unemployment Rates there, too. Elsewhere in the asia region, chinas yuan hits a record high in early trade after the Central Banks reflect weakness in the dollar. And they say the chinese currency could appreciate by a further 2 to 3 this year, already of course at 20year highs. Lets check in on the markets in asia. Lisa schuan, tell us whats going on with the markets today . Thank you, julia. Im going to start with china markets today. Not able to get a boost from the postponement of five new ipos. The countrys securities wash stack announced late sunday new measures to tighten the supervision of the ipo market. And under these new rules, issuers and underwriters have to release risk alerts if an ipo is priced at a higher evaluation than its peers. Authorities will also carry random spot checks to make sure no numb Public Information will be disclosed to investors in pitch books and road shows. And the shnezhen comp down about. 20 . On the currency front, julia mentioned you have record highs against the dollar because they set an alltime high point after the soft u. S. Jobs numbers. And the other asian markets rebounded a bit today as the weak u. S. Dollar revived speculation the fed may retain its Stimulus Program for a bit longer. Indonesias composite jumped over 3 . Japans out of action and kospi gains 5 , but australia closed at a threeweek low after resource stocks. As for big movers, Chinese Property Developers took a beating on the hong kong and mainland horses. Chineses led ministry plans to form a nationwide realistic registry system seen as a precursor for a National Expansion of a property tax trial. So you see these property stocks took a beating today. Back to you. Xi, great to speak to you. See you later on. For now the payroll was to the downside in december for 74,000 jobs created. The figure significantly undershot expectations of a near 200,000 gain and marked the smallest pay increase in three years. The number was accompanied by a drop in the Unemployment Rate to a fiveyear low of 6. 7 . This has been ascribed to be dripping out of the labor markets, so a reduction in that participation rate, but what a headache for the Federal Reserve. Lets bring in phillip tyson, Government Bond strategist at icap joining us now. Phillip, give me your thoughts on these numbers. Is it safe to assume the Federal Reserve will look at these and just say its a temporary thing, weatherrelated and will continue as planned . I think so, yes. Essentially, youre right, it was a shock, the payoff was much weaker than you can expect. You cant be certain, but it does seem to be the cold weather thats impacted payrolls, people being surveyed around the survey period. It contrasts significantly with all the other data that we have seen, the Small Business indices, the adp, the employment components of the ism, they dont suggest that the jobs market is falling off a cliff. So i think the fed will be very cautious when interpreting this payrolls report, particularly as you say, the Unemployment Rate has fallen to 6. 7 , so its not far from the 6. 5 level previously considered the point of which they might consider raising rates. Essentially i think what it means is that tapering will continue. They are going to be cautious with it, but i dont think they can afford it at this stage because of one months payrolls to suddenly pause in the tapering process, which is already quite a cautious one. That makes a lot of sense to me, and yet look how bond yields reacted. Look at the move in the tenyear. You can say that the equity markets moved and the bond markets are concern there had. Do you expect the move that we saw there higher in u. S. Rates to correct paths over the next few days as we get more data to confirm what the payrolls didnt tell us . Well, i think the risk is that in the next few days we could see yields fall a little bit further, under the market of sold off to the top of it, sort of recent trading yields, yields were hovering near the peaks before the data came out. It was the report was obviously clearly weaker than expected so we saw yields fall back towards about 1. 85 level or so at ten years, 2. 85 level at ten years, sorry. Weve got retail Sales Numbers later on this week. They also might be impacting negatively by the cold weather. So they may be looking for yields to fall more in the short run, but what youve got to remember is anything with any activity or spending that was hit by the cold weather in the december january period will be recovered in the months ahead. So if we do see slight yield falls toward the bottom of the recent trading range in the next few days, i think as the data picks up and recovers in the sort of later in the First Quarter in february, we could see some more awkward pressure on yields returning. And the market could essentially be range trading for the next few months. I think weather reduces in bond markets at the moment in peripheral bonds in europe. I will stick with the u. S. Markets just because of what youre mentioning through is quite interesting. Do you expect the u. S. Dollar to remain on the backfoot if youre talking about further selloff of yields in the u. S. Markets right now . Yes. I think in the shortrun as i say, if the next few days reports are impacted negatively by the weather, aside from putting downward pressure on yields, it could keep the dollar up or a little bit on the backfoot, but its a temporary thing. I really do believe that the growth in the u. S. Economy is picking up. Its sustainable at this time. Weve seen previous swoons in u. S. Activity, its always been related to fiscal or political events. Theres nothing on the horizon right now like that. I think it is a temporary weatherrelated impact. And that will recover relatively quickly, i think, as we get into the february march period. Phillip, you did mention one of my favorite words, which is the periphery of europe, and im going to come back to you on that. But for now just bear with me because every week cnbc asks me to talk the trend by taking part in the online poll following decembers disappointing jobs data. What should janet yellen do with tapering . Stick, easy or cut . Head to traderpoll. Cnbc. Com to cast your vote and you will begin to see the trend. You can also have your say on twitter using traderpoll. We would love to hear from you. Now, weve just had some italian data out this morning. The november industrial output rising 0. 3 month on month. Starting to see that data right now. We have the year on year reading coming in. November industrial outpit, 1. 4 year on year. Now, were sticking with the theme of italy, the italian Prime Minister is once again under attack. This time from within his own party. The new head of the Democratic Party mateo renzi has attacked the coalition for failing to push through Economic Reforms speaking to an italian newspaper the 39yearold said he was amazed that the politicians department understand the need to hurry. But if politicking as expected going on in italy there. Now spains Opposition Socialist Party has taken a lead in a new opinion poll. They are ruling conservative Peoples Party has seen popularity fall following austerity measures, corruption scandals and a move to restrict abortion. Spains labor market has also proved a major headache for the Prime Minister with the current Unemployment Rate at 26 . The poll comes as rajov visits u. S. President barack obama in washington today. Now lets take a look at how the peripheral bond markets are trading this morning. As you can see, the italian yield training at 3. 91 there. Spain is tied to trading at 3. 18 . Porch gal, it lil, these are the key outperformers as far as the equity markets go already this year. Its interesting to see. Philip, you said some of the best gains are still to be seen as far as the peripheral markets, is that right . Yes, i think so. We have seen fantastic performance in all the peripheral markets benefiting from search for yield, the better macro data, the perception that the eurozone economy is maybe finally turning the corner. Some of that data has extended into these peripheral economies, too. So thats boosting optimism going forward. And i think as well the benefit from the backstop of the ecbs omt purchase program. Even though the details are pretty vague, it hasnt been used that. Thats provided a real boost to sentiment in peripheral bonds. Shortterm, given the way the markets are trading, the price and momentum, et cetera, that we can see some further outperformers of peripheral markets versus the call, some further and spread narrowing. You look at the spanish markets of the portuguese syndication, the success of the irish, bond auction, it all bodes well going forward. And i think what well see is some of these peripheral curves flatten and shift a bit lower. Having said all that, i am a bit cautious longer term because even though growth is looking like its bottomed out and were picking up a little bit, its still nowhere near Strong Enough to ease into the massive debt levels and to really bring these Unemployment Rates down in some of these peripheral economies. And i think if growth disappoints later on this year, then sentiments in the bond markets could begin to wane. So i dont think were through the eurozone debt crisis yet. It could really emerge later on this year again, but certainly in the short run it looks like theres more gains to be had. I like the way you mentioned the word cautious there. Whats positioning like in some of these markets, because we continue to see them tighten, tighten, tighten, but just how involved are investors . And despite your warnings about possible growth disappointments, my concern is that positioning seems to be very high right now. I think it certainly has increased. Youve seen obviously a lot of domestic interest in these individual markets, spain, italy, et cetera. But also youve seen an increasing amount of overseas flows into these markets. And i think that is going to continue in the shortrun. Its interesting, actually, if you look at the way these auctions have performed, usually with spain and italy, you get a little bit of indigestion when issuing yield bonds, but we havent seen that this time. In spain last week the market rallied into the auction and continued to rally afterwards. And i think thats a sign that theres still room for the overseas investors to move into these markets. Theres still room for some further yield falls, despite the fact that we are now at spread levels that havent been seen for the last few years versus germany. And i think theres potential for another 30 to 40 basis points in that narrowing in terms of spread, this is germany, in some cases. Philip tyson from icap speaking to us there. Spain raising to euro lows. India comes into focus this week to give clues on whether further rate hikes are in store for asias Third Largest economy. Well be discussing that at 10 40 cet. And thousands of protesters block roads in bang koch in the attempt to shut down the city and oust the Prime Minister from power. We look at the potential Economic Impact at 10 45 cet. And airbus unveils its 2013 order numbers. Can it regain the title of the Worlds Largest aircraft maker . We go live to paris in just about 20 minutes. And in the wake of a data breach that could affect as many as 110 million americans, we hear from the target ceo about his plans for some major damage control. And finally, Detroit Auto Show revs up to show you the hottest cars hitting the roadway this year. Well go live to the motor city at 11 30 cet. Phew, i need a break now. Well see you afterwards. And this will be your premium right here. Sorry to interrupt, i just want to say, i combined home and auto with state farm, saved 760 bucks. Love this guy. Okay, does it bother anybody else that the mime is talking . Frrreeeeaky [ male announcer ] bundle home and auto and you could save 760 bucks. Alright, mama, lets get going. [ yawns ] naptime is calling my name. [ male announcer ] get to a better state. State farm. Theres nothing like being your own boss and my customers are really liking your flat rate shipping. Fedex one rate. Really makes my life easier. Maybe a promotion is in order. Youre watching Worldwide Exchange. Welcome back to the show. We just had moodys comments saying u. S. Money market funds boosted the European Bank exposure by 11 in 2013 in the Fourth Quarter of 2013. Focused recovery play numbers are out there as the european financial sectors are one of the key focuses for 2014, too. Now lets move on, a deal to freeze Irans Nuclear program will come into effect next monday. This is aimed to create a longterm solution to the standoff over iran an nuclear ambitions. Nbcs Kristen Welker reports. Reporter on a diplomatic trip to paris, secretary of state john kerry welcomed the news of the nuclear deal with iran and also answered critics who argued the Obama Administration is too eager to trust a country that has a history of cheating. As this agreement takes effect, we will be extraordinarily vigilant in our verification and monitoring of irans actions. Reporter the deal calls for iran to freeze parts of its Nuclear Program in exchange six countries including the United States will gradually ease about 7 billion worth of economic sanctions and only if u. N. Inspectors confirm that iran is complying. The deal is shortterm, six months, giving negotiators time to hammer out a broader agreement. Nbcs ali arussi is monitoring reaction from iran. Deputy foreign minister achi said all sticking points have been resolved and iran would be receiving 4. 2 billion in seized oil revenues. While tehran would scale back its Enrichment Program and allow frequent inspections. Reporter in washington the deal was met with deep skepticism. Republican House Majority leader eric cantor called the agreement deeply flawed and said it does nothing to reverse Irans Nuclear program. But democratic congressman adam shift disagreed. I think this is the best opportunity diplomatically to resolve and put an end to this Nuclear Weapons program or program with that potential in iran. So i think we have to pursue it. Reporter while the debate continues on capitol hill, Foreign Policy experts say now the hard work begins for negotiators. Whats coming next is the real challenge, is to convince the iranians that a project that they have spent 20 years and billions of dollars on that has involved thousands and thousands of people and is the pride of the Iranian Revolutionary guard corps should actually be dismapled. Thats going to be very difficult. Reporter a majority of senators including 13 democrats support a bill that would impose new sanctions on iran if the country violates the deal. The president has threatened to veto the legislation arguing it could derail the agreement. Steve sedgwick is joining us now onset. Steve, as we just pointed out there, now the real work begins, how confident can we be of this working and the iranians following through . And what are thement ply cases of that . I dont know. Im not an expert on geopolitics in iran, but i do know about the ramifications for the oil market. This is the real key, because the iranians are very excited about obviously getting back into the export market in some fashion. They and the iraqis for a very long time have had this big battle about saying, weve got more reserves than you, no, weve got more than you. So 150 barrels underground is what they both say theyve got. The early estimates are close to anywhere near true, this challenges the supremecy of the middle east and broader opec. So that will be interesting. And the iranians have been it inpicking and fighting against each other in meetings previously as well. I spoke at the last opec meeting in december to the iranian oil minister, and he was very excited about what the removal of sanctions would have on production. But whats interesting is listen to the level of oil he thinks he can produce. I hope after sanction we will produce after lifting sanctions immediately for 2014 . After lifting the sanctions. So thats the middle of 2014, you are hoping to produce 4 billion barrels a day. We can, technically. Technically he says 4 Million Barrels a day. This is all interesting. We have to get into the nittygritty numbers, but presenting the bear case for the price of oil, which is what they really care about, you have light swede crude trading at a significant discount as we can see, 92 a barrel to where brent is trading to 107. Now back to opec, if all the guys say they can produce what they think they can produce at some stage this year, then it gets interesting. The iranians getting an extra 2 Million Barrels on the table. The iraqis putting an extra 2 million on the table. They need to find 700,000 more to get up to where they need to balance the books, which is a key year ahead of the president ial elections in 2015, and the libyans are producing nowhere near what they could produce if they settled their internal issues. That could mean 4 Million Barrels plus onto the table. That gives us the question then, is the world going to need this . The world has quite a lot at the moment, so theres a significant downdraft on the oil price. Herein lies the problem, oil from opec into the United States already trades at a significant discount to wti. They trade at a 25 to 20 discount to the United States, which takes it down to 85 a barrel, which then becomes competitive with shell. So that is a very big bearish scenario for the oil price. Heres the bullish scenario. Ford last week said their sales in china were up 49 . The chinese only have 44 cars per 1,000 population at the moment. The americans have 600 cars per 1,000 population. What if the chinese triple to the world average of 135 cars per thousand . What im saying is well, heres one more, back at the height of the crisis we were demanding globally 83 Million Barrels a day, we are already back up to over 90 Million Barrels a day. The iea which represents the consuming nations thinks by 2035 well get up to 100 Million Barrels a day. My point being is, great we get the iranian oil, great we get more shell and the iraqi oil, et cetera, et cetera, we are going to need every barrel. Therein lies my case. For equalibrium. Im speechless. I know you said you are not an iranian specialist, but i saw the nuclear chief suggesting over the weekend that if the bill going through the Iranian Parliament passes, they have to accelerate their Nuclear Enrichment process. Yeah, it is a key process to get the oil back on the process. Despite the american dreams, sorry for the u. S. Viewers talking about energy independence, look at the numbers. Your shell has a limited utilization. The americans import 7 million to 8 billion barrels a day. They are Still Producing at levels that they have not for decades, which is great. Are you all bull then . No, i think the market is in beautiful equalibrium. I think a lot of people are happy with it. So you took a long time to a say trade. Talking about the shell industry, they are investing 48 million. This is the first French Company to commit to the u. K. s oil and gas development. The investment though small is seen as a boost to british governments attempts to lure companies to develop shell case. And british engineer amec has agreed to buy Foster Wheeler in a cash and share deal which values the swiss firm on 9 billion pounds. The ceo appeared on Worldwide Exchange in december last year said that the deal would more than double the Mining Services revenues such as latin america. If the deal completes, the Foster Wheeler shareholders will receive 16,000 in cash. They are seeking a u. S. Listing in connection with the transaction. Shares in Foster Wheeler, which is listed on the nasdaq, are up more than 17 in the last three months. It will be interesting to see how that stock reacts when the u. S. Markets open later on this morning. Now valerie truella, the longtime partner of Francois Holland was hospitalized over the weekend. Stefan is in paris to talk through this with us. When i first saw the story, i had to wonder if this is going to help Francois Hollands popularity. Having a younger girlfriend didnt do the defense minister any harm, did it . He is already suffering very low approval ratings. Well, im going to show you the gap between france and the United States, even between france and united kingdom, a large majority of french people, 77 according to a new survey, believe that its a private story that should involve only Francois Hollande, so french people are indulgent after this report. And what has it been for Francois Hollande . 84 of the french people claim that the story is not going to change their view on the french president. 13 say it will affect their view of francois. And 3 still believe that its going to improve their view on Francois Hollande. Still on the political ground it will make things perhaps a little different for hollande due to hold a press Conference Tomorrow to outline his Economy Policy and hopes to make the country more businessfriendly a. Hollande is expected to announce flexibilities in exchange for job creation, so that was supposed to be the top story for him this week, but after what happened just before the weekend, and obviously the questions at the press conference and the headlines after the conference are more likely to be focused on the mistress gates that was all over the press this week. Mistress gates, given the hassle he gets over his performance of the economy, you have to wonder which questions he would prefer right now, stephane. Thank you for chatting with us. For now, if you have any thoughts on that or anything else we talked about during the show this morning, email me, worldwide cnbc. Com or tweet me, of course. Now, still to come on the show, as earnings season kicks off in the u. S. , our next guest says 2014 is set to be a landmark year for equities. Another hour . Find out which assets you should own coming up after this. Welcome back to Worldwide Exchange. Was it just the weather . Investors continue to digest fridays job surprise with stocks in europe trying to stay in the green. Banks leading as the regulators decide to water down debt rules. Give diplomacy a chance. President obama warns against imposing fresh sanctions with iran after it completes its deals with world powers to halt the Nuclear Program for next monday sending crude prices lower. Typeland at a standstill as protesters put a stranglehold on bangkok in the heart of the city. And shares of nickel miners getting a boost after indonesia bans on process mineral exports. Well, lets give you a look at how the european markets are trading so far this morning. Were eking out further gains this morning. The outperformer there, the italian markets up. 70 . As i mentioned, the banks are in focus after regulators are lessening the rules on ratios, meaning they have to allow less capital going forward. Now disappointing u. S. Jobs numbers may have kicked off 2014 with more of a whimper than a bang, but the next guest says the outlook looks distinctly positive as western economies continue to pick up momentum. Bernard invesco is here with us, thank you for coming on the show. Can i ask you which region of equity markets will outperform this year . Where should investors be looking . Obviously, we are looking where they are more attractive for us is in europe, obviously, in the eurozone, particularly, and some asian markets as well. So from that starting point, asia and europe are the best place to invest going forward. Even if the momentum matrix is ushering different in regions at some point. Which sectors in europe . You mentioned the banks this morning, its obviously very sensitive to one of the decisions or rumors, for instance, like the basil three perspective agreement that could be much more in line for them. So banks in some cases, what has been called the value numb growth typical companies, the very country to what performed in the first half of last year, so weve had an expectation to september and october of last year, and its slightly to go for a couple months still. You also expect the u. S. Markets to do well this year. They are all the same trades that everybodys talking about. Does that raise any concerns for you that actually everybody has the same views right now . Yeah, theres obviously a huge consensus that its a concern for us. Obviously, you still have a big tailwind for this from the u. S. Market. Yes, the consensus that big is a concern, but the Earnings Results are still there. And it justifies plainly whats been going on for the past few years, so theres still earnings, theres still momentum. And the economy background is still there supporting the u. S. Economy and the u. S. Stocks in general. So they are still having plenty of reasons to be there even if it is more cautious. What are your expectations for the earnings season . A big week for the u. S. Banks this week, in particular. Yeah, youve been seeing, as usual, for the past few weeks, earnings expectations being trimmed down. So a little bit, a little bit lower expectation would lead to positive surprises going forward. So were entering the season quite confident so far. You say bearish on emerging equities, is it so easy to jump on the bandwagon of expecting lower growth from emerging markets this year, what about those in the developed markets if were expecting potential surprises from europe, potential surprises from u. S. And the likes of japan, too . Actually, were guessing more and more eager to jump into the emerging markets going forward. But still we do not, for the moment, because the flow is a capital out of the emerging markets in general are still massive, money keeps going out and still the economy contacts over there, be it inflation or growth accelerating in many countries, is a concern for us. So when the evaluation is not quite as attractive over there, but still not enough for us to get back in, but were quite aware of that and waiting for some more appealing moment to get back in, particular looking at the flows and waiting for them to stop getting out of there. Bernard, as a frenchman, i have to ask your opinion on this. Obviously, vital to your trading strategy right now, do you think Francois Hollande should be left to his own devices, or do you think the press have a right to intrude on his personal life . Well, i have the impression that the personal life of president s and politicians in general over here in paris is quite, scene quite differently from how its been handled in other countries, but still from the market perspective, i dont the impression it has much consequences for us. And, in general, the political side on which the governments are that correlated with market performance, so this is not something i do care a lot about, to be honest. That was a very serious answer to that question. Thank you so much for taking it seriously, bernard aybran, ceo of invesco am. If you want to email us on the points we are discussing, you can, worldwide cnbc. Com is our email address. And my twitter handle as well. Now, change of pace. The 2014 Detroit Auto Show kicks off today. And theres already plenty of news. Daimlers ceo says they may build another factory in north america to ramp up global production. He says no decision has been made as yet, but he also said theres a shortage of vehicles in every market. And demand for new vehicles such as the Mercedes Sclass has been brisk. Daimler has seen gains up. 70 . Well be talking in more detail about the import sector in the next hour. For now, ford is expected to unveil a new version of its topselling f150 pickup truck at the auto show today. It will be the first highvolume vehicle made of the lighter metal. The new f150 is act 700 pounds lighter, which should increase fuel efficiency. Lets take a look at the performance of fords stock in the last six months, down by just over 9 . Thats interesting. Thats the performance in the general market up. 80 so far this morning. General motors ceo says the company is very close to introducing a dividend but wouldnt be more specific. Gm last paid a dividend in may 2008. They also say the european car market has baottomed sure but i sure mow fast it will rebound. Well look at gms shares trading in the general markets, relatively unchanged, down by. 02 and in the last six months up by 4. 7 . Cnbcs phil lebeau has full coverage from the Detroit Auto Show throughout the day, including the only live interview with the incoming gm Ceo Mary Barra today at 8 00 a. M. Eastern on squawk box. Now airbus is expected to give a glimpse of the ongoing battle to beat u. S. Rival boeing. Stephane is back to give us a preview. What should we lookout for . What we know already, julia, is that 2013 was a record year for the industry. What we know is that airbus will lead the race in terms of new orders for the last year, but it will be behind boeing in terms of deliveries. We are expecting airbus to announce 1,412 net orders for the last year, thats roughly 57 more than boeing. However, in terms of deliveries, they are expected to beat their own expectations at 625 deliveries, but that would be less than boeing, which last week reported 648 commercial aircraft deliveries. Confirmation will come in less than an hour from 11 00 cet. Well have the ceo of airbus first on cnbc at 12 40 Central European time. So stay with us, obviously. Stephane, great to chat with you. Thank you for that. Now John Strickland, director of consulting, is set to talk about this more. Stephane was just saying there, net new orders of 1,412 expected, 57 more than boeing, so ones actually clocking up more, but the future of the new orders is better as far as airbus is concerned. This is a little bit of a pr exercise between the companies. You have to put it in the context that we have two global giants here, boeing and airbus, they are both the predominant players in supplying aircraft to the worlds airlines. Ill put a caveat on that, we are seeing a new breed of manufacturers coming up in the short hold, small regional jets, but we are talking about airbus and boeing. When we look at what they said before today, the performance differs as far as what aircraft youre talking about. The large aircraft, by which we mean boeings 747, and airbuss doubledecker. Airbus has done better by boeing by setting more orders, but this segment of the market is quite limited. The real battleground in the long hold market is between the new generation small body jets. Boeing is ahead with the 787 having about 900 orders. And the value per plane of long equities is higher, so airbus may be leading orders, but a lot of the orders are composed of the short hold aircrafts. So you get more of them over the boeing planes, but the value of the plane is lower. The talk that airbus will look to revamp the a330 over the they have not said when they will do this, how much of an impact will that have . The ac 50 is coming online this year. Whatever they do with this cannibalizes the sales of the a350, or are we talking about Something Different sneer. Youre right, thats a risk for the aircraft, the a330 is a very solid 20year history, very popular with airlines and a phillips in the orders because of boeings own delay on the dreamliner, so airbus profited from that. But they do have to walk the tightrope, so to speak, on that question about their own new model, the a350, they dont want to damage sales of that, but if it sees the ability to grab a few more relatively late cycle orders on the 330 at expense of boeing on the 787 by reengineering and improving the efficiency of the aircraft, thats something to look at. John, great to talk to you. Well look forward to hearing what they say later, John Strickland. Coming up, the ceo of airbus joi joins cnbc for a fascinating interview with the title of the largest aircraft maker. And well be discussing some of those points with him, too. And still to come on the show, protesters flood the streets of bangkok in a bid to force the Prime Minister out of office. So will ongoing instability Rock Investment into thailand . Well be discussing right after the break. I need proof of insurance. Thats my geico Digital Insurance id card gots all my pertinents on it and such. Works for me. Turn to the camera. Ah, actually i think my eyes might ha. Next Digital Insurance id cards. Just a tap away on the geico app. Could save you fifteen percent or more on car insurance. European banks are celebrating after regulators agreed to relax the rules designed to improve leverage ratios. The decision is a relief for global lenders who fear raising billions in extra capital. The new standards are being drafted by the Basil Committee tasked with reducing banks reliance on debt. We are in frankfurt to talk about the german Bank Reaction to this, they have been lobbying hard across europe to prevent these measures being too stringent. How are the german banks reacting . Well, actually, the bigger the bank, the more benefits from that watering down of those rules. Pardon. To be introduced by 2018, so what we are looking at, the new rules are saying now that banks are allowed to net certain activities. They have trading partners as well to not have off Balance Sheet beakers inside the calculation to calculate elaborate ratio. All that is of course aiming at reducing the Balance Sheet of a bank because the leverage ratios calculate by setting the capital of banks have in relation to the total Balance Sheet. And thus the smaller the Balance Sheet, the less capital the bank needs to fulfill a certain leverage ratio requirement. The regulators over the weekend convened in basil to come up with the compromise, and they are looking into the 3 leverage to be introduced by 2018. So thats really positive news for the banks. There was a lot of lobbying going on because for a lot of lenders that would have meant billions, not only millions of euros or u. S. Dollars to keep on their Balance Sheet and not be able to give them to shareholders or to make them work in other directions in order to reach such a leverage ratio. So today, really, positive news. Deutsch bank shares are up 4 . So very good day for banking shares. Back to you, julia. Thank you. I like the rule of thumb. The bigger the bank, the better the rally today. Great to chat to you. Bangkok is in shutdown mode as protesters call for the overflow of the Prime Minister. They seized seven sites and are blocking major road intersections. The leaders have rejected compromised talks with the government. Meantime, red shirt supporters of the Prime Minister have started rallies in several regions on sunday. But for now steered clear of bangkok. Now joining us on the line from thailand is prinn panitchpakdi. It seems that things are pretty calm for now. Yes, i think this began from the 31st of october, it was a Smaller Group of 30,000 people opposing the amnesty bill and reform, which later was ruled unconstitutional by the court. They are morphing into the larger opposition attempting to overflow the government, which they claim lack ability and trust of the people. We have seen a few minor shooting incidents in bangkok, but now they are moving into the more central area of bangkok occupying seven major sanctions across central bangkok, including the famous intersection. For the crowd, its a large number, but theres music being played, the crowd is in good nature so far, and theres so far no violence, no weapons being carried around. And i look for things to change in the coming days. What do you expect to take place on february the 2nd . And it looks like neither side is going to accept the other winning, so where do we go from here . The election on the 2nd of february is unlikely to happen now, i think. If it goes ahead, as you say, we are unlikely to be able to open parliament with 95 of them elected, thereby you can have open elected with 95 . The Prime Minister is calling for an emergency meeting to consider a proposal to postpone the election until the 4th of may. So they will look into this to try to find a resolution before a proper election can be held. The Main Opposition Party is boycotting the election, so i doubt theres a proper election in any sense of the word anyway. Whats the best case scenario, to see political deadlock, how does the economy manage this as we are in peak tourism season . We need to see export growth in this country. We are talking about reforms last year, which is a positive stat, how concerned are people . I think businessmen are extremely concerned and seven main businesses and organizations have gotten target already to try to be the middleman to construct a mediation between the government and the opposition protesters. Prinn, i have to jump in, we have to take a quick break. It was brilliant to chat with you. After the break, well talk u. S. Strategy earnings season and autos. Stay with us. Welcome to Worldwide Exchange. These are your headlines from around the world. Was it just the weather . Investors continue to digest fridays job surprise with stocks in europe trying to hold in the green. Banks leading as regulators decide to water down basels debt rules. Give diplomacy a chance. President obama warns against imposing fresh sanctions on iran after it completes its deal with world powers to halt its Nuclear Program from next monday, sending crude prices lower. Inside the bullseye, weeks after the retailer was hit by a massive data breach, targets ceo speaks out. In an exclusive interview with cnbc, he says hes confident his stores are safe and secure. And thailand at a standstill as protesters put a stranglehold on bangkok blockading major intersections in the heart of the city. Youre watching Worldwide Exchange. Bringing you Business News from around the globe. Well, if youre just tuning in, thank you for joining us bright and early here on the show. Let me give you a look at how the markets are faring ahead of the u. S. Open today. And as you can see, were looking like were going to see a lower open, though there are a few hours to go yet. As you can see, the dow futures indicating points lower by around 36 points. The nasdaq indicating lower by 9. 5 points. And the s p 500 indicating lower by around five points. The s p 500 managing to track around. 20 gapes after the payrolls number, so lackluster trading as far as that was concerned. But at markets here in europe managing to digest some of that, too. As you can see, a choppy session for the asia trade with a focus on china trading n particular. Five ipos canceled their figure to the banks as regulators agree to soften regulators in regard to the amount of capital they have to hold. This is a performance of the individual markets, as you can see. Well start with the ftse 100 here gaining by around. 10 . The German Markets gaining. 30 . And the French Markets up. 20 . And the ftse m in italy up. 60 kt. We are still seeing the outperformance of the periphery markets, in particular. Well break it down to the individual Sector Performance here. As i mentioned, one of the key outperformers is the banking sector, in particular. We heard earlier this morning from anetta the bigger the bank, the better gapes were seeing with the less capital they were anticipating having to hold. In particulars on the downside, the likes of utilities and Household Goods tracking down by around. 60 . We have been waiting all morning for airbus to announce the number of orders. Weve got that press conference on and they are just starting to release some of their numbers. In particular well be talking about that again later on in the show as those numbers come out. Lets take a quick look at the performance of the commodities markets. Remember, we were seeing dollar weaker earlier this morning. Slight change around as far as thats concerned. Were seeing gold now slightly weaker, but were only talking. 10 . Slight weak in brent and crude, positive reaction as far as the iran deal to reach their accord and then reduce the enrichment process for their Nuclear Weapons. So oil coming off the anticipation of further oil coming out of iran there. And nickel, of course, the big gainer in indonesian exports. The other focus has been china. Their currency touched a record high against the green back in early asian trade, this after the central bank set an alltime high midpoint to reflect weakness in the dollar on fridays session. Analysts polled by reuters say this could appreciate by 2 to 3 this year. And remember, we are trading at 20year highs. Lets take a quick look at whats going on as far as the treasury markets are concerned. And the one we cant avoid looking at is the tenyear treasury number after the payroll number, the 11basis points in terms of yield trading near the 2. 86 level. Heading into the u. S. Level, the prifty spreads are continuing to tighten. Well take a quick look at the rates, i was talking about the dollar earlier. The dollar slightly higher here to relatively unchanged versus euro dollar. The dollar yen is near the 1. 33 level. Lets check in on the markets in asia. Li, talk to us about how we are seeing the equities in the region performing. Thank you, julia. China markets very much in focus today, but they are not able to get a lift from the postponement of five new ipos. As you just mentioned, this comes after the countrys security washed off and announced new measures to tighten the ipo market. Under the new rules, issuers and underwriters have to write release alerts if it is priced higher than its peers. And authorities will also carry out random spot checks to make sure no nonPublic Information will be disclosed to investors in road shows. The shanghai composite ended down. 20 . The shenzhen down by about the same margin. And the Chinese Market added. 70 . In other asian markets, they rebounded a bit today as the weak u. S. Dollar revived speculation that the fed may retain its Stimulus Program for a bit longer. Indonesias composite ended higher by 3. 2 . The kospi added half a percent, but australia closed at a threeweek low down by. 40 with losses in banks offsetting resource stocks. As for big movers, Chinese Property Developers took a beating today on both of the hong kong and the mainland forces. Chinas led ministry plans to form a nationwide registry system. This seen as a precursor for a National Expansion of a property tax trial. Thats why we are seeing those heavy selloffs for these property stocks. Back to you. Li, good to talk to you. U. S. Payrolls were down in december with only 74,000 jobs created, well below expectations of a near 200,000 gained. This coincided with a drop in the Unemployment Rate to a fiveyear low, 6. 7 , largely due to people dropping out of the labor market. Piers cowen is joining us now. Weve had the whole weekend to digest this data, weather, thats it, move non. By and large, yeah. I think weather definitely played a role. You can see that by looking at the construction job creation, which there wasnt any, so i think thats quite a good indicator the weather did play a role. You can always, i dont know, its psychology. When you get a really bad number, you just try to explain it for weatherrelated or whatever it is issues. When you have a good number, everyone is really bullish and wow, this is amazing, the economy is on fire. I think thats quite a good indicator of sentiment at the moment. The payrolls number, i dont know, the more payrolls numbers i go through, the more skeptical i become as to how important it is on the day its announced. There are revisions. You cant Pay Attention to a payrolls number because of the revisions. Exactly. We have a bigger revision in november, so that offsets the employment rate. 6. 7 . Were almost at the 6. 5 fed threshold that they use for their guidance on raising rates. They did tweet last months meeting that they wont look to raise rates until unemployment falls below 6. 5 . But the big question is did the payroll number on friday alter the way the fed or the pace that the fed may taper that . And categorically no. The fed are not going to look at fridays payroll number and say were going to hold off on tapering. With the Unemployment Rate dropping sharply, they cant be in the position where the Unemployment Rate is at 6. 5 . They havent started tapering yet. They are over that. And taperings, we are on it, were on this boat and nothings going to change this direction, really. Were tapering into zero by the end of the year. And its all about ford guidance from this point. Whether they alter their guidan guidance, well wait and see. Piers, stay there. Well look at the airbus numbers feeding through. Im going to give you a quick look at those. Airbus saying they are beating boeing on orders. Remember, John Strickland said its a pr exercise, watch out for that. But they are saying they have taken 1,619 gross orders, delivering 626 jets. They aim to sell 30 in 2014. They plan to ramp that up from 2018, in particular. They plan the first a350 deliveries in 2014. We knew that already. And they are saying they are reiterating the a350 break even by the decade end. So by 2020. And confirming a380 breakins by then. So both of those things are what we have heard before. They are posting record jet deliveries in 2013. And thats airbus. Remember, were going to be talking to the ceo right after Worldwide Exchange. So watch for that. Well give you a look at what is on todays agenda in the United States. We have Dennis Lockhart speaking about the economy this afternoon. It will be interesting to get more fed speak at 2 00 p. M. We also get the federal Monthly Budget statement. As for earnings, look for results from fast food giant wendys. Well take a look at todays other top stories. Targets ceo is speaking out publicly for the First Time Since the retailer was hit by a massive data breach during the Holiday Shopping season. Critics have questioned why it took target four days to come clean about the incident, which now may have impacted at least 70 million credit and debit card accounts. And an exclusive interview with becky quick, Gregg Steinhafel says it is safe to shop at his stores. As time goes on, we are going to get down to the bottom of this. We are not going to rest until we understand what happened and how it happened. Clearly, were accountable and responsible, but were going to come out at the end of this a better company. And were going to make significant changes. I mean, thats what you do when you go through a period like this. You have to learn from it, and you have to apply those learnings. And were committed to do that. What can you share . Was it a point of service situation . Was it an outside vendor . What happened . We dont know the full extent of what transpired, but what we do know is there was mall ware installed on our point of sale registers. That much we have established. We have removed the malware to provide a safe and secure shopping environment. This investigation is ongoing and it will take some time before we really understand the full extent of whats happened. The nationwide probe has been launched on the Security Breach and the reports say more than 30 u. S. States are involved. Target shares are trading slightly lower by the last few months at 1. 8 closed right now on that box, but eventually well see how that stock reacts. You can see more of becky quicks interview with the target ceo Gregg Steinhafel at 6 00 a. M. Eastern time. Neiman marcus announced friday their customers debit and credit card information may have been stolen. They dont know how many were affected, but it was alerted to the breach back in december. Reuters reports at least three other wellknown u. S. Retailer were hit by hackers during the Holiday Shopping season in the same manner as target. Walmart, home depot and macys tell cnbc they were not affected. Now earnings season officially kicks off in the u. S. This week with jpmorgans results on tuesday morning. The earnings for the s p 500 are expected to grow 6. 1 , but revenues by just 0. 3 . Factset estimates Earnings Growth for the sector will rise 22 . Piers, talk to me about earnings season, it is typically a good one, isnt it . Yes, it is. The earnings season, generally we have a pattern. If you think about lets talk about the earnings to start with, so Earnings Growth, what happens is that every quarter for i cant remember how long since the crisis, we have had declining earnings expectations as we have been going through the quarter. So it goes back to october where were expecting Earnings Growth of 9. 6 . But today that 9. 6 has come down to 6. 1. So you always get this as you go through the quarter, stocks guiding lower, its a good strategy. You uh play down expectations. Expectation management. Solo to do well. This is how things work. Here we are with the lowest earnings expectations weve had for this quarter. And then what happens is Companies Come out and generally beat earnings. And the s p, heres a good stat for you, the s p has rallied every earnings season since quarter two 2009. Every single one. Putting numbers aside, what do we want to hear from them . Strong guidance for 2014, what do we want to hear . The absolute most important thing is what they are going to talk about for the year ahead. Normally companies will only give quarterly guidance, so for the next quarter, but start of the year they tend to, thats the course they tend to give, annual guidance. We really need to see them being encouraging and positive about this economic momentum thats building. We need to see them being more optimistic with guidance. And if this whole 2014 story pans out as we expect, where we expect this momentum in Economic Growth to build and build, then were going to need companies to start being more confident in terms of their capex and so on. We need to see that message delivered during this earnings season. You mentioned the financials up 20 Earnings Growth expected, but you have quarter four in 2012 that was actually very bad for the financials. So the comparables take that into account. It is not like the financials are on fire, necessarily. Its a catchup. We have to leave it there. Piers curran there. Irans promising to curb their Nuclear Activities in exchange for sanctions. Well look through the ramifications after the break. Hmm, fifteen minutes could save you fifteen percent or more on car insurance. Everybody knows that parker. Well, did you know auctioneers make bad Grocery Store clerks . Thatll be 23. 50. Now. 75, 23. 75, hold em. Hey now do i hear 23. 75 . 24 hey 24 dollar, 24 and a quarter, quarter, now half, 24 and a half and. 75 25 now a quarter, hey 26 and a quarter, do you wanna pay now, you wanna do it, 25 and a quarter sold to the man in the khaki jacket geico. Fifteen minutes could save you. Well, you know. And shift through all eight speeds of a transmission connected to more standard horsepower than its german competitors. And that is the moment that driving the lexus gs will shift your perception. This is the pursuit of perfection. [ male announcer ] even more impressive than the research this man has at his disposal is how he puts it to work for his clients. Morning. Morning. Thanks for meeting so early. Come on in. [ male announcer ] its how edward jones makes sense of investing. Welcome back to Worldwide Exchange. Obama urges congress not to issue new sanctions on iran as the countdown begins on a new deal. The european markets struggle to stay in the green as they watch the u. S. Jobs payroll number. And airbus posts a record for new orders with more than 1600 planes on its books in 2013. Irans deal to curb Nuclear Power in exchange for an easing of trade sanctions is a step closer. Acting as lead negotiator for a block of six countries, the u. S. Has a sixmonth implementation process beginning on monday. In the meantime, u. S. President barack obama is battling against a new bill in congress, which would impose fresh sanctions on the middle eastern country. Now after the start date for the deal was announced, the price of brent moved slightly lower, which brings in an analyst here with us now. Iran could be given the basic needs to comply. I think obama has a difficult balancing act because hes trying to move forward towards the comprehensive deal with iran. Remember, we only had the announcement of the interim deal starting, thats a sixmonth very temporary deal while they try to negotiate a permanent deal. But on the flip side, hes also got to persuade congress that this did lo macy is going to make the middle east safer and reduce the threat posed by iran. So every time he tries to get closer to a deal that iran can accept, he makes a bigger struggle to get congress on his side. And i think thats going to be the big balancing act through the whole of 2014. And its a very hard one. So assuming that he does manage to prevent further sanctions, how quickly do you think we could start to see iranian oil come back to the markets . Well, i dont think during the time of this interim deal well see much additional iran an oil. So not for the next six months. And probably not beyond that. People are talking about the interim deal being extended because they are taking too long to negotiate the technical details. We are probably not seeing more Iranian Market for 2014. As far as oil prices are concerned, the lack of reaction really that we have seen in brent actually makes sense. I think it does. We saw something similar monday after the deal was announced. In november we had a little dip in asian trading but prices came back up. As the market digests this and realizes this is an imminent return of supplies, okay, we have a diplomatic process ongoing, but until theres confidence that supplies are coming back, that doesnt really impact the market balance. So i have two quick questions here, first iran is negotiating for a good swap where 1. 5 billion a month, whats going on here . Is this a way to allow them breathing space without having to agree a deal with the International Community of the six large powers negotiating . This was a bit of a surprise story that came out friday. And i dont put too much credence on this meaning a half million barrel a day increase in exports. Russia is one of the 5 p5 plus 1 powers. It would be hard for them to undermine it. This may be a misunderstanding about a deal that could be the return of the caspian oil swap or something implemented one the comprehensive deal is reached, but i dont think were about to see a big increase in iranian exports by russia. Interesting. Ill make sure steve listens to you and watches this tape back. Steve was talking to us about 4 Million Barrels coming back online according to the iranians themselves. We just had an italian auction out this morning, so i want to show you through details of that. Italy has sold 4 billion years worth of new december 2016 btps with a yield of 1. 51 . They have sold 2. 5 billion at a yield of 3. 17 . And they have also managed to sell a 1 president 69 billion euros worth of september 2028 with a yield of 4. 26. And thats about 30 basis points lower than when they were raising cash on november the 13th. So these yields continue to pull back. Actually, the threeyear bond auction, its a new era, euro era lifetime load. Lets take a quick look at the futures trading ahead of the open on wall street. Passenger road trip buddy. Lets put some music on. Woman welcome to learning spanish in the car. Passenger youve got to be kidding me. Driver this is good. Woman vamanos. Driver passenger vamanos. Woman gracias. Driver passenger gracias. Passenger trece horas en el carro sin parar y no traes musica. Driver mira entra y comprame unas papitas. Vo get up to 795 miles per tank in the tdi clean diesel. The volkswagen passat. Recipient of the j. D. Power appeal award, two years in a row. 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. [ male announcer ] this is the story of the little room over the pizza place on Chestnut Street the modest first floor bedroom in tallinn, estonia and the southbound bus barreling down i95. This magic moment it is the story of where every great idea begins. And of those who believed they had the power to do more. Dell is honored to be part of some of the worlds great stories. That began much the same way ours did. In a little dorm room 2713. This magic moment welcome back. Airbus has posted record orders for 2013 outpacing its u. S. Rival boeing. Airb airbus 2013 sorry, misreading there. Airbus says theres room to increase production if the market remains as positive as it was in 2013. So stephane is in paris listening to these numbers, take us through what youre hearing from the ceo, stephane. First of all, last year was a record year for airbus in terms of new orders and deliveries. The european plane maker posted 1,503 net orders, which is significantly higher than boeing. Theres about 150 aircrafts of difference between the two plane makers. However, in terms of deliveries, they both did not regain its crown last year with 626 deliveries. That is significantly lower than boeing, which posted for the last year 648 deliveries. Now, also a couple announcements in the press conference. Airbus is planning to sell at least 30 airbus 380 this year and believes the program will break even by next year. Regarding the new aircraft airbus 350 made of composite materials, its planning to get a certification for the aircraft by the end of the third quarter. And with the first delivery still planned for the end of this year. Back to you. Stephane, great to chat to you. Thank you for taking us through the numbers. Coming up, the ceo of airbus joins cnbc for a first interview as the space giant tries to regain the title of the Worlds Largest aircraft maker. Now piers still with us, talk through the top trades for 2014. So top trades would be stay long equities, not quite like we saw last year but still to the upside. The more interesting movements will be finally some Dollar Strength against the euro. I think that youll see one of my contrary interviews will be gold. I like gold quite a lot. I think youll get a good year for gold. I think that the inflation story has been very depressed in the u. S. , but more so in the eurozone. Were talking about deflation risk and so on. Up nation in china is incredibly low. I think that may have troughed, and i think you perhaps will see a lot of this qe money thats really not going into the market at all, mainly trickle in now. And i think you will see also, if this economic momentum continues in the u. S. In 2014, rain shower going to see consumerdriven inflation. And i think that this inflation ticking back higher is a cue for gold to reband off a terrible year last year. And yet youre saying that one of your favorite treasuries is gold bond. Gold doesnt do well usually so explain the two trades. So gold got annihilated last year. And i think incorrectly. I think its overdone. I think you will see a snap rebound. I think that the bond trade is more to do with an ongoing economic recovery. I think that i think that the interesting area will be the short end because i think youll have to see shortend yields begin to create higher. This Unemployment Rate is at 6. 7 in the states. 6. 5 is coming. Who knows, next month. And i think that rates going higher mid2015, thats too far out. I think thats going to start to come in as we go through the year and i think short yields will rise curve flattening. And buy gold. Yes. Thank you, piers. Great to chat to you. Now, still to come on the show, its all razzledazzle in the motor city as Global Leaders roll out the latest and greatest models. Phil lebeau is joining us live in detroit coming up right after the break. [ man 1 ] were now in the approach phase. Everything looking good. Velocity 1,200 feet per second. [ man 2 ] your looking great to us, eagle. 2,000 feet. Still looking very good. 1,400 feet. [ male announcer ] funny thing happens when you shoot for the moon. Ahh, thats affirmative. [ male announcer ] you get there. Youre a go for landing, over. [ male announcer ] the all new cadillac cts, the 2014 motor trend car of the year. Welcome to Worldwide Exchange. These are your headlines from around the world. Was it just the weather . Investors continue to digest fridays jobs surprise with stocks in europe trying to stay in the green. Banks lead as the regulators decide to water down those basel debt rules. And give diplomacy a chance. President obama warns against imposing fresh sanctions on iran after it completes its deal with World Leaders to halt its Nuclear Program from next monday. Thats sending crude prices lower. Airbus posted an industry record with more than 1600 planes ordered across 2013. The european plane maker now talking about taking back the top spot from rival boeing. And detroit rolls out the red carpet for the Worlds Largest automakers unveiling brand new models at the north American Auto show. Youre watching Worldwide Exchange bringing you Business News from around the globe. If youre just tuning in, thank you for joining us here on the show. Let me give you an indication of how these u. S. Futures are shaping up ahead of the trading session. Im blending quite nicely into the background here. It does appear to be a lower open here. The dow joins futures indicating lower by 40 points. The nasdaq is down by 12 points. Remember that ending the day up around 1 on fridays trading session, so taking back some of the gains. And for the s p 500 indicating lower by just shy of 6 points, in particular. The u. N. Markets, heres whats going on as far as the european markets are concerned. We have the u. K. Indices heading lower right now by just over. 10 . The German Market is lower by. 3 , sorry, higher. The banks are in focus in germany suddenly lifting the markets. The French Market is higher by just shy of. 30 . And the italian markets are higher by. 60 raising threeyear money today over in italy at euro era lows. How do you make money in these markets . Thats what we care about. Listen to what the experts have been telling us all morning. We should go back to more of a traditional drive to correct the financials, because we had a downside report on fridays market report, we have the numbers depreciating. Going forward that will continue to be the case. Further easing of sanctions can happen, which could potentially for the oil market allow visibility to iranian exports returning to the market. Thats about a Million Barrels a day or so. And that event in conjunction with other possible supply increases does mean that by the end of 2014 we could be in a situation that oil prices are on a serious downward pressure. You mentioned the banks this morning, its obviously very sensitive to one of the decisions on rumors, like this morning, the basel three perspective agreement that could be much more benign nor them. So banks, and in some cases, what has been called value numb growth typical companies. Now weve been teasing it all morning, the 2014 north American International auto show is kicking off in detroit with the latest hightech fuelefficient models taking center stage. Cnbcs phil lebeau is joining us live from detroit at the north American International auto show. From all the reports i have read on this, its going to look hot but its going to be green. How are the carmakers finding the balance . Reporter yeah, julia, one of the big themes this year, its all about automakers putting more content, more features into the automobiles while also taking more weight out and making them more fuelefficient. Because theyve got to meet higher mpg standards over the next seven or eight years in the United States. Mercedes is a good example. Let me show you the new Mercedes Cclass they unveiled last night at the north American International auto show. And you look at it and say, that looks like a typical Mercedes Cclass. They have upgraded and freshened it up with a youthful look to it. Whats interesting, though, is it is 200 pounds lightser with more aluminum content in there. Lightweight aluminum to make it more fuelefficient. Mercedes topped bmw for luck sur sure ri kroun luxury crown in the u. S. Last year. We see about 5 growth globally. Perhaps even 1 more for luxury cars, so together its a Good Environment to work in. Reporter speaking of greater fuel efficiency, take a look at the new ford f150. A lot of people are calling this the aluminum f150 with the all aluminum body that will be combined with a new ecoboost engine to give the f150 far greater fuel efficiency than the current f150. Remember, this is the best selling vehicle in the United States for the past 32 years. This is a big bet by ford with its big truck. And finally, the gmc canyon rolled out for everyone to take a look at last night here in detroit. It is the latest midsized truck from General Motors. This goes on sale later this year. It was also a chance last night to briefly talk with mary barra, the incoming ceo of General Motors, the first woman to run a major automaker. Well talk to her live this morning on squawk box. Its a cnbc newsmaker interview you do not want to miss. This is mary barras only live extended interview here at the north American International auto show. A big day, julia, not only with miss barra but as well a number of automakers with big unveils coming up. And well be here all day long with that. Back to you. Thank you so much. We certainly basketball keeping an eye open for all those things, including the gmc out there. Joining us for more on the auto sector, thomas beslin, head ceo at keppler shepherd. Tell us why you are still bullish after two years. We have three major reasons. First, we are seeing a very favorable environment for light vehicles. We have it growing a bit more than 4 in 2014 after growing 3 in 2013. We think with europe turning, its also key major support for european stocks as we have seen in the u. S. , for instance, into 2009 and 2010, we are two or three years behind in europe. And thirdly, evaluation remains broad on the stocks. We are watching price earnings, and the cycle still looks effective to me. The automakers gave back a record amount of cash to investors last year, i think 11 billion euros or something, can they continue to generate that Free Cash Flow and continue that Dividend Growth that we saw last year, in particular . Thats one of the components we are using in our view. Having investors to get to the rising flows is one way for investors perception to norm allize. We have the european dividend rising to more than 13 billion this year, going to 15 billion in 2015. When i look at the auto sectors for chemicals with a decade in europe, you have a number of highquality companies that have been achieving high returns for four or five years and are returning a higher proportionate of their earnings to their shoulders. So for earnings multiple, expend. Tell me how concerned you are for these particular stocks and what are your top picks here . What should investors be looking senate. Currencies in our view for european names, the biggest headwind that we still have in 2014, a much stronger euro against almost any currency. You also have the market currencies. These two combined will negatively impact earnings quite significantly. We think its more of an offset by the trend in the overall demand and the turning point in europe. So overall we stay bullish for 20 2014. We are looking at volkswagon. And among the carmakers, we still like michelin. Thomas, great to speak to you today. Head of automobile Sector Research at keppler. Coming up, the ceo of target opens up about the massive data breach that hit the u. S. Retail giant during the Holiday Shopping season. Hear comments from his exclusive interview with cnbc coming right up. Welcome back. How is everything . Theres nothing like being your own boss and my customers are really liking your flat rate shipping. Fedex one rate. Really makes my life easier. Maybe a promotion is in order. Good news. I got a new title. And a raise . Management couldnt make that happen. [ male announcer ] introducing fedex one rate. Simple, flat rate shipping with the reliability of fedex. Welcome back. Let me give you headlines, obama urges congress not to approve fresh sanctions against iran as the countdown begins on the nuclear deal. European forces are higher as investors still weigh out the high jobs number. And airbust posted a Record Number for orders with more than 1600 planes on the books in 2013. The bullseye squarely on target as more information comes out about the massive data breach the u. S. Retailer suffered during the Holiday Shopping season. Seema moody is joining us with more. Reporter chairman and ceo of target is speaking out publicly for the First Time Since hackers stole data from card swipe machines at store checkout counters between black friday and middecember. Initially it was thought up to 40 million debit and credit card consumers were affected, but on friday personal data including email addresses and information from 70 million customers was compromised. In an exclusive interview with becky quick, gregg steinhofel is reassuring that target customers are safe and secure. We are in the middle of the criminal investigation as you can appreciate and we can only share so much, but as time goes on, we are going to get down to the bottom of this. We are not going to rest until we understand what happened and how that happened. Clearly we are accountable and are responsible, but we are coming out at the end of this a better company, and were going to make significant changes. Thats what you are dealing with when you go through a period like this. You have to learn from it, and you have to apply those learnings. And were committed to do that. What can you share . Was it a point of service situation . Was it an outside vendor . What happened . We dont know the full extent of what transpired, but what we do know is there was malware installed on the point of sell registers. That much we have established. We have removed that malware to provide a safe and secure shopping environment. This investigation is ongoing. And its going to take some time before we really understand the full extent of whats happened. And nationwide probes have been launched into the Security Breach. Attorneys general from new york, connecticut and minnesota have joined the investigation, which reportedly involves more than 30 u. S. States. You can see more of becky quicks interview with targets ceo today on squawk box starting at 6 00 a. M. Eastern. Now on friday Neiman Marcus disclosed hackers may have stolen credit and debit card information from its customers. The Luxury Department store says it doesnt know how many people are affected, but it was alerted to the breach by its credit card processor in december. Reuters reports at least three other wellknown u. S. Retailers were hit by hackers during the Holiday Shopping season in the same manner as target, home depot, walmart and macys tell cnbc they were not affected. Julia, back over to you. Seema, thank you so much. Have a great day. Now American Hustle was the big winner at the Golden Globe Awards held last night in los angeles. They took best emotion picture, musical or comedy. The awards hosted by amy poehler and tina fey also recognized 12 12 years of slave which won best picture drama. Stephanie stanton sent this report from the red carpet. Actually, we dont seem to have that report. I havent seen either of those movies, so i cant ad lib to tell you about them. Coming up, strike up the band as the earnings parade is set to kickoff in the u. S. What can we expect from the flood of results over the next month . Well get insight from the cme. Stay with us. 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. Lease this 2014 cadillac srx for around 319 a month with premuim Care Maintenance included. How did edward jones get so big . Let me just put this away. Could you teach our kids that trick . [ male announcer ] by not acting that way. Its how edward jones makes sense of investing. See, i knew testosterone could affect sex drive, but not energy or even my mood. Thats when i talked with my doctor. He gave me some blood tests. Showed it was low t. Thats it. It was a number. [ male announcer ] today, men with low t have androgel 1. 62 testosterone gel. The 1 prescribed topical testosterone replacement therapy increases testosterone when used daily. Women and children should avoid contact with application sites. Discontinue androgel and call your doctor if you see unexpected signs of early puberty in a child, or signs in a woman, which may include changes in body hair or a large increase in acne, possibly due to accidental exposure. Men with Breast Cancer or who have or might have prostate cancer, and women who are or may become pregnant or are breastfeeding, should not use androgel. Serious side effects include worsening of an enlarged prostate, possible increased risk of prostate cancer, lower sperm count, swelling of ankles, feet, or body, enlarged or painful breasts, problems breathing during sleep, and blood clots in the legs. Tell your doctor about your medical conditions and medications, especially insulin, corticosteroids, or medicines to decrease blood clotting. In a clinical study, over 80 of treated men had their t levels restored to normal. Talk to your doctor about all your symptoms. Get the blood tests. Change your number. Turn it up. Androgel 1. 62 . Welcome back. Investment banks are rethinking internship programs and relaxing rules for bankers. Bank of America Merrill lynch circumstance la circulated a memo on friday recommending they take ten days off a month. Morgan stanley has formed a committee to examine how to improve working conditions. Meanwhile, president obama is going to be talking this week about how to create u. S. Manufacturing jobs, one of the economic goals he set for greater attention in his second term. In his weekly radio and internet address, the president hinted his trip home wednesday to rally and focus on the manufacturing sector. Now lets give you a look at whats going on in todays agenda for the United States. Well, weve got atlanta fed Dennis Lockhart speaking. And at 2 00 p. M. We get the federal budget statement. And earnings from the fast food giant wendys. Now earnings season officially kicks off in the u. S. This week with jpmorgans Fourth Quarter results on tuesday morning. Factset says earnings for the s p 500 are expected to grow 6. 1 . Revenues by just 0. 3 . Financials which dominate the calendar this week are expected to contribute the bulk of that growth. Now scott bower, Senior Market strategist is joining us now. Scott, what should we will booking for this week . So far the futures for the u. S. Will be a weaker open this morning, is that a delayed reaction to the payrolls disseminating from the Unemployment Rate . Whats happening here . I think what were seeing is just a bunch of skepticism in the market right now. You know, were at these highs and everyone is expecting modest Earnings Growth at best, maybe revenue numbers that arent so great, so i would say that traders on the floor are kind of discounting that. Traders on the floor are discounting that number that came out on friday. Kind of throwing it away to say, this is going to get revised anyway, but the focus now like you just said really becomes on corporate earnings. Well see jpmorgan and Goldman Sachs and intel, ge, really kickoff the beginning of the season here. And if we start to see some modest revenue growth, not it doesnt have to be anything over the top, but modest revenue growth, thats going to kick the market in the pants, quite frankly, and make it move the next leg higher. But the overall feeling, i think, out on the street is, well, its time to take a pause, its time to take that 2 to 3 downward move, but i dont know that thats going to happen. I think the Rising Interest Rates that weve seen in the new 3 number that is now the norm, whereas six months ago that was the shock to the system. That was the shock to main street. Now 3 is the norm. That has been digested. Like i said, if we can start to see some modest revenue growth, i think were in for a pretty good start to the year, actually. Talk to me about gold right now trading at onemonth highs despite everybody still being relatively skeptic on gold. Is this just a temporary blick . Same thing, like you just said, weve seen this big pullback last year, weve seen a modest retracement back to the upside here. And its kind of gone handinhand with rates, though what we saw at the end of last week with rates really dropping down under 290 again, we saw the gold market rise. I think youll see gold trade hand in hand with how Interest Rates are going, but i do see gold going higher from here. Brilliant, scott, great to chat to you. Scott bauer of trading advantage. Thats it for todays show. Thank you for watching Worldwide Exchange. Mine was earned orbiting the moon in 1971. 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. Good morning. Targets ceo greggsteinhafel will talk to us and well have the exclusive interview. The auto show kicks off in detroit. Gm could be driving toward a dividend. The automaker also announcing a recall of 370,000 fullsize trucks due to a potential fire hazard. And Goldman Sachs makes a call on stocks. Its monday, january 13th, 2014. Squawk box begins right now. Good morning, everybody. Welcome to squawk box on cnbc. Im becky quick along with andrew ross sorkin. Andrew has this mornings top stories. Andrew . Thank you, becky. Making headlines, General Motors cfo says the automaker is close to reintroducing a stock dividend. They continue to believe they will break even in europe by mid decade. In other gm news just days before it learns whether a 2014 Chevrolet Silverado pickup truck wins the honors as north american truck of the year, the company is recalling 370,000 fullsize trucks due to a potential fire hazard. Gms incoming Ceo Mary Barra is joining us live from the Detroit Auto Show at 8 00 a. M. Eastern time this morning. Also, southwest