Transcripts For CNBC Worldwide Exchange 20140210

Jap japan. Youre watching Worldwide Exchange. Bringing you Business News from around the globe. All right. Welcome to the start of this week on Worldwide Exchange. The olympics is on, did you catch any over the weekend . I caught a little of the snowboarding. I was watching the luge yesterday afternoon. The speed they go around 80 miles an hour or something. You head back its amazing. I watch the jump in the u. K. Yikes they were jumping 30 meters. That chap set the world record about 250 meters. A little difference on that. Plenty to come on todays show. The golden arches, its in vietnam. Mcdonalds opening its first restaurant there as hundreds of fans line up to get their big mac. Well bring you an interview with the ceo from mcdonalds later to find out why it took so long to open in the country. And what deals may we find in airways . And how is this going to impact relationships with brussels . Emerging markets stabilized toward the end of last week, but as tapering continues, questions remain about the Growth Outlook for many of these regions. According to hsbc, the Market Growth sat the weakest level in four months. Joining us is karen from hsbc. Good morning, karen. We are looking at the pmis here and we look at the future activity index, it looks like a lot of people are betting on an export recovery. Whats the story here . I think thats the question. Well see the Financial Markets have reacted in quite an abrupt fashion for the outlook for the emerging markets and have seen big currency declines. Some Interest Rate hikes and some fairly large ones, so the question is, are we going to see a positive reaction from those Financial Market moves . Say weaker currencies promoting better exports, or will these current account imbalances adjust by weaker imports and slowing domestic consumption . It does seem from the results of the survey that maybe it will be that Positive Side to the adjustment, which is better exports and reaction to the weaker currencies. The report is manufacturing sentiment at a tenmonth high, but at the same time weve got the sector seeing a record low. Theres a huge divergence there, isnt there . Yes, and it really comes down to those changing currencies, much higher Interest Rate slowing domestic demand. And the combination for weaker exports, slower services, slower domestic economy, should see the imbalances that have built up in the last two or three years, start to close and improve. When do these assets become cheap enough for investors, karen . Well, i think its a combination of both seeing, as i say, that Positive Side of the export story coming through knowing that the internal domestic adjustment isnt too painful, that there isnt any political problems that do surface as that domestic adjustment does come through. So some stabilization activity getting through key elections, of course n many of the emerging market economies this year, it causes not just the emerging market story, its just as important whats happening in the u. S. So its expectations of u. S. Recovery this year and u. S. Yields being scaled back as quickly as they have been over the last six weeks. Then that wall of money thats sloshing around the Global Economy searching for yield perhaps goes back to the emerging markets regardless of how strong activity is there. The best noticeable thing is it hasnt. We have had a fall in yields, a rise in u. S. Treasury prices, and it has not benefited emerging markets. I think it is early days and i think the markets are going to want to see more signs of stabilization in the data. Of course, this is very we have only just had rate hikes and the currency declines. We want to see how the economies do react to that adjustment. So some stabilization, i think some more positive signs that china is still maintaining 7. 5 mo men tim. I think the foundations of that would help the move back to the emerging assets. Karen, just give us a bit of a detail on what youre seeing as far as employment pmis are concerned because you noticed a deterioration across the board right now. That has to set alarm bells for domestic consumption, surely. Yes, certainly, the weak component was the employment side. Its suggesting that employment has stabilized rather than were going to see mass layoffs, but i think with all of this emerging market story, weve got to remember where weve come from. Its not that we are in some troubling period right now, its the three our foryears ago these economies were delivering well above potential. They had record low Unemployment Rates in many of the emerging markets, so we are seeing some of the froth come off them if you like. We are seeing some stabilization from what i think the abnormal period was actually three or four years ago. Thank you, karenward, senior economist at hsbc. Really interesting what you said at what point is it to get involved. Merrill lynch said on friday if we see another 7 to 8 billion of outflows this week, that will trigger sale signal for them. We saw a 14 rally in markets over the next three months when that happened. They said it will be a sell signal. A buy signal. You said sell. Im sorry, buy signal. 14 rally in the emerging markets over the next three months. Well see. Talk the trend by taking part in on your loon poll. The gdp data out this week, which of the continents stock indices would you like most exposure to . The cac 40, xetra dax or ftse mib. We are an hour and seven minutes into the european trading week, and we are a little bit firmer, 64 after a move upwards last week for global equities. The ftse 100 was up 8 . The first week of gapers in weeks. This morning, slim gains. The ftse 100 up seven points, similar for the French Market cac and fairly flat for the ftse. Nokia toward the top of the stock 600. The firm signed a Patent Technology agreement with the taiwan ease filmmaker htc. Both firms have pending litigation. Now investors hope this paves the way for future licensing deals. Nokia stock up 4. 5 . Loreal is also up after nestle could be looking to sell their stock in the biggest cosmetics maker. The firm reports firm results after the close today. Normally there are big stakes here, but loreal could take the shares back and cancel them. And after the bank of englands government floated the idea of a national bad bank, they said it could help the countrys lenders get troubled assets and boost new lows to italian companies. On to bond markets, there shallry yields were 2. 72 yield before the jobs report. They tick down this morning just below that. Beyond yields and gilt yields are a bit higher. Janet yellen will make her first congressional appearance as fed chair on tuesday. The dollar is high against the yen today, currently 102. 21. We got to 102. 65. Last week it was 176. And the euro dollar hit a oneweek high on friday of 136. 49. So we are pretty much still on that. Not Much Movement from friday to now. So, thats where we start here in europe. What about the first trading day in asia . Li sixuan is here with more. We are heading to the key 2100 level. The hang seng index lost a lot,. 30 . In taiwan they ended fax with htc weighing on the index by 4 . Another net loss in q1. Asian markets gained as wall street managed to weather the mixed jobs report. Japans nikkei gained 1. 8 ahead of tomorrows holiday. Soft bank jumped 5. 7 today after an upgrade. Meanwhile, banks in australia helped rebound over 1 . We have been watching chinese banks on the back of the ppocs comments about risk control in the Financial System. And they were under pressure in hong kong today, but its a different showing over in the mainland. Banks especially mixed lenders extended last fridays strong rebound on the hopes of better liquidity conditions in the months ahead. Aside from financial stocks, chinese electric carmakers were also among the top gapiners. This is after subsidies were extended for green vehicles after 2015. Meanwhile, faw also reported a 40 increase in its january sales. So thats a recap of the asian markets. Back to you, ross. Thank you, li sixuan. Now the golden arches have finally hit vietnam. Mcdonalds opened its first restaurant in the country in the capital Ho Chi Minh City. They even have a special sandwich called the mcpork. Well have an interview with the mcdonalds ceo don thompson later in the show. Did you see Steve Martins movie when he tries to say hamburger. Now he has to say porkburger. Okay. They do a lobster burger im told by our producers. Whats the point, have the lobster and throw away the bread. I couldnt agree more. Preaching to the choir. Nestle could be selling off a huge stake in the firm. Well have more after the break. I must begin my journey, which will cause me to miss the end of the game. The x1 entertainment operating system lets your watch live tv anywhere. Can i watch it in Butterfly Valley . Sure. Can i watch it in glimmering lake . Yep. Here, too. What about the dark castle . You call that defense . come on [ female announcer ] watch live tv anywhere. The x1 entertainment operating system, only from xfinity. Youre watching Worldwide Exchange. Switzerlands access to the Single Market is under a threat to limit the number of migrants from the eu. 50 back the initiative proposed by the right wing populous party, the Democratic Union center. The French Foreign minister will now have to review its relationship with switzerland. You were one of the people they were trying to limit, a german in switzerland. Yes, i studied in switzerland and started my first job in switzerland. So i would have been one of the people that may have been pushed out or may have been part of this quota, but let me tell you about the vote. It is very, very close vote. 20,000 votes made the difference. And the turnout was actually quite high, 56 considering previous referendum. And then if you look at where the positive votes came from, they came from the rule eras. I dont think thats a big surprise. Then the voters in the city, they voted against it because probably they know whats at stake here. What way are they voting . They are not voting against the people that come in and generate a lot of money or a savings account, they vote against the people lowly paid . I dont know. Im asking the question. I guess they are voting against a different segment, so the ones that are taking their jobs, the ones that maybe are earning too much, the one that is are filling up the trains, the ones that are, you know, taking up their kids school places. I think its not a very educated vote. And thats my personal opinion. But ill say it, having lived there for they are voting with those people building new homes . It is across the board, it is about those or more about the people that come in and buy up higher properties, make wages high, steal jobs. It was the germans and the italians contingent there. 23 of the swiss are documented foreigners and these 23 said that before they make up roughly a third of the gdp. And thats huge without the foreigners the switzerlands cant exist. It will be interesting to see yahoo move their Financial Base from switzerland to ireland. So they are not alienating just individuals, but they are alienating businesses, too. It will be interesting to see what the brussels reaction will be. We had that in the introduction, and if they change their relationship with switzerland, then switzerland has to go back it was a democratic vote. So i know its not convenient for you, but thats a democratic vote. But then if they change the relationship in a way that was negative to switzerland, then switzerland would have to go back to have another democratic vote and say, things are worse. I dont know how things pan out. Look, theyve got about three years to write this into law to make it to some extent palable to the eu, but this will never be palable to the eu because this is about free labor, goods and services, about capital. And switzerland now breaching one of the principles. Thats a big problem for the bilateral treaties in place. The eu should implement their own principles before telling other people not to do it. Thats a completely different story, isnt it . I think theres going to be sympathy with the government. This is not a governmentled initiative so i think they will work together. The interesting thing will be the rhetoric we get out of brussels and the neps as they are going to be using every possible opportunity. Exactly. Whatever happened to a truly Single Market in the first place . Why not just sort that out for services, okay, lets deliver what it was supposed to be in the first place . The problem is, will this give rise to other populous moves across europe. You have nigel farage tweeting last night, this is wonderful news for National Sovereignty and freedom lovers throughout europe. It is. And were going to get democratic votes in may for the parliamentary elections. Theres a more fundamental question, is that the right way of putting referendum before the people . I think it highlights the question, crystallizes the question about whats going on more broadly in the eu right now. How many people were asked if they wanted a single currency . Well, maybe they would have voted against it. Exactly. Well leave that one. You cant end on that kind of question, ross westgate. Unemployment rates in spain are how much at the moment . And greece . Too high. We hit the unemployment numbers and they have not had the euro. Ill leave that one hanging. Thank you so much. Bank of america is trading near the top 600 after nestle could be looking at ways to reduce their 30 billion stake in the cosmetics giant. Here are the details in paris. Stephane, every analyst suggested that actually they were going to stay as they were and nestle wouldnt do anything about this stake. So what are your thoughts on this report that they are now perhaps talking to loreal about what to do . The speculation has been on and off for a couple years now, but what nestle would do with the 29. 3 stake in l oreal, this morning nestle declined to comment on the report. This is the second largest shareholder of l oreal behind the family with a 35. 6 stake. Nestle already announced to the management of loreal about their plans and could make an announcement at the next Shareholders Meeting in april. They could sell their stock to the public. This preemption right expires at the end of april on the 29th. They said clearly buying back the shares of nestle would make sense for loreal. They will report their data after the markets close. I was told there wont be any mention of the nestle story in the press release tonight, but tomorrow morning there will be a press conference and im sure that plenty of questions will be focused on that report because that will be a significant investment if loreal buys back their shares. The price is worth 32 billion. Thats a big stake. Thats a big stake. Thank you, stephane. Great to talk to you. Joining us from hong kong is charles eung, one of the key questions is whether loreal can continue what they have been doing for the last decade. The ceo suggested that loreal is pulling some of their products and the reaction is negative, whats your take . I strongly believe that loreal has grown in china and will in the next five to ten years. Although give the intense fine competition in china, first we think loreal has the brand fort folio from the premium brand to the mainstream brand in china. I believe loreal will have a more veered acquisition in the next few years. We think this is a good starting point. The third thing, loreal is strong in the hair care sector, be new china we see a huge upside potential for the hair care business in china. So i strongly believe in china loreal can main tape the strong growth in china. Yeah, i believe so. How significant is the other competition you talk about from south korea, i heard that Proctor Gamble are losing the mass market share. What are your thoughts there . Youre right. So for the mass market share, there are two kind of products. One is skin care and the other is hair care. In china in the mass market skin care sentiment, loreal can continue to buy gross than other competitors in china. But lorea slrks the dominant player in hair care beauties. And they have mass product in china. So even given the dominant position for the hair care in china, we still see the upside potential. In the past there are fears of two local brands emerging, so given the small base in china, they have the big upside potential to grow in the mass and professional segment. Charles, you just mentioned there may be some local firms that develop, what is the potential for them . You mean for the local brands, right . Yeah. Yeah. You know, in the past few years loreals Product Portfolio is on the high end. So in order to trade in china, they have to reach the most sale points. So the most efficient point for them to do that is to buy the local brands. And the leverage there works to sell loreal and the other brands. So an acquisition match is a good example. First they are in a good category and the second is to match the Distribution Network in china to penetrate a much lower tier in china. Charles, good to see you, thank you for that. He was joining us from Standard Charter bank. Its game over for the popular game flappy birds. Have you played it . Yes, i have. How long can you keep it up . Not for so long. I get frustrated and bored and am afraid of breaking my scream, so stop. Fans in mourning after the creator of this popular game was reporting as much as 50,000 a day from advertising revenue. And then he said the fame was really his life, not the money. In a series of tweets, he gave a statement saying, he cannot take this anymore, i cant take the 50,000 a day. Still, if you want to be bought out, you should never set out to be bought out. Just cops trait on the product. And then pull the plug unexpectedly. Are you missing it . Have you missed it already . I gave up after the first day. I could see where it was headed, addictive. So we want to know, what computer game do you miss . What game took up too much of your youth days . Join the conversation here on Worldwide Exchange and get in touch with us. Email us at worldwide cnbc. Com, tweet us cnbcwex or rosswestgate. The original Space Invaders, they brought that back as an app. Do you remember with the thing you used to shoot . I liked tetris. Theres something pleasing about tetris. Still to come, its a blockbuster. The new lefo movie breaks numbers at the box office this weekend. Well check in on that. The question is whether it is freeplay or you have to build the set, i dont know. Well see in a few moments. Huh. Fifteen minutes could save you fifteen percent or more on car insurance. Mmmhmmm. Everybody knows that. Well, did you know that old macdonald was a really bad speller . Your word is. Cow. Cow. Cow. C. O. W. E. I. E. I. O. [buzzer] dangnabbit. Geico. Fifteen minutes could save you. Well, you know. Youre watching Worldwide Exchange. Bringing you Business News from around the globe. And the headlines from around the globe, barclays shares are high after reports of a data breach put thousands of client details at risk. Let weak banks die. Europes new Bank Regulators look to break the weak offerings to cover the Balance Sheets black hole. And nestle could be considering selling 30 stake in and then taking it off the market. We are now into the trading week in europe. Equity saw gains after last week. A little bit high this morning, the ftse 100 is currently up. 20 . The markets are gaining ground in trading. Today we did see it trading at the highest level since the end of january after the payroll data on friday. We have dollar yen trading above the 102 level lending support to the equity market. At onemonth highs, near onemonth highs, there are levels to watch there. The u. S. Treasury yields came back after the jobs report on friday and we are currently at 2. 67 . That was the yield on the tenyear before the employment report. Elsewhere, the gilts are flat at 2. 71 . Joining us is the head of credit strategy at National Australia bank. Simon, nice to see you. The last few weeks we saw tenyear treasury yields slip from 3 down to 2. 57, currently the level we just saw, 2. 6, how is that filtering out across the rest of credit space . Credit space continues to be a risk. We went up to 3 and the fear was to go up to 3. 5 on the back of tapering. Then people realized tapering was not necessarily a negative when inline with improving macro backdrop. More importantly, we are potentially deteriorating into treasuries again. So we have come back to the 2. 6. So in that low yield environment, people are continuing to chase risk further down the quality Investment Grade. We have had this view on high yield and one of my favorite quotes was the high yield was about looking for a windshield. Well, at the end of the day, just like the other one, just because you can ride into the beach on a highway doesnt mean you can swim fast, but everyone was moving further down to get the incremental yield. And that continues to be the case for the time being. As you said, the potential sort of black hole within european financials that is starting to come out now, you have german banks or the ont through there are questions within financials and nonfinancials, its a time that is hard to be arguing that you should be chasing that further done the quality spectrum in the absence of a yield. You are not buying into the extended credit rally here, but what changes your mind . Well, for the time being it is not so much looking to go short the market but not trying to overextend your risk profile. It is probably close to if not the alltime highs. We are trading about 77 in europe this morning, if you allow for the differential in european financials between 2007 when the main hit was just inside 20, probably 25 to 30 basis points between the two, if you take this out, thats probably worth another 20 to 30 basis points. If you take that off todays 77, you are back down to the level we hit in 2007. I would argue we are in a different macro environment than 2007. So to be chasing it now, dont go short but dont chase the extended rally. What about the opportunity to see spreads relatively tight to switch out the emerging market exposed credits we have seen . I have seen a number pointing to this right now. You would recommend it . It is not necessarily switching out of emerging markets per se, but its the exposure and taking that view now. Its looking at the current account deficit, countries that have to be more defensive and the Investment Grade within high yield focusing much more on the bottomup fundamentals rather than chasing the yield. I guess you get a sense of whats going on in the australia credit markets. The reason i ask is because i would say its a good proxy for china if you want to have emerging market exposure, are we seeing that in the australian credit market space . The Australian Market has been closely coor lated to the china story, so you get a slowdown in the commodity space with pressure coming into australia, but at the same time from the offshore investors perspective, youve got a very solid sovereign rating, a very high level of yield relative to the low level of yields in europe. So the strong conviction is from the offshore investors perspective. To be invested in the australian corporate when there are so many question marks over europe and potentially further filling into the emerging market space as well. People are not selling it as a proxy, is that the point . Yes. Interesting. Barclays has launched an investigation after reports of the personal details of 27,000 customers have been stolen. Britain said on sunday all the information was leaked raising the prospect for new fines. Whats been going on here . Well, theres an investigation thats been launched because a whistleblow went to one of the National Papers on sunday and provided a whole kind of data book of all these customers, these 27,000 customers details. Pages and pages of it. He says it is from a division that closed down in 2011. And the data is easily sellable and claims allegedly that this information is being sold to untold broker that is are going after these customers based on that information. Now, Barclays Says it has notified the regulator, the fca is in there, and they are saying it could be a serious criminal action. And in which case there would be no issue for barclays. What we are looking at is whether this represents some kind of lapse in oversight. Some kind, you know, technical or i. T. Systems breach that they havent been very careful of. Because we know banks know more than i. T. Systems these days. If somebody can access all that information under somebody else, theyve got a huge problem there. Are aalleging somebody from the bank is selling it or somebody hacked it . Somebody from the bank. Somebody stole the information and tried to sell it off. Its a p. R. Disaster. It all depends on how i think that the key point, julia, is that barclays has been trying to clean up its reputation. Remember tomorrow the bank is going to produce its annual results, Anthony Jenkins is going to stand up with a whole chapter entitled the good citizen. Its probably not that much of a good citizen if it is selling its customers details. We understand the report will share another workforce with the investment bank. And hes got a major problem with his traditional Retail Banking. Yes. Youve seen, i think, barclays, their biggest problem is people worry where are the rest of the skeletons . With the hedge fund, sorry, the Interest Rate kind of have they dealt with everything. Weve got the effects probe to come. Yes, the probe tomorrow. Do you think hell address it tomorrow . The data breach, i would be surprised if they do. Last time around in the notes they produced a kind of a couple sentences with where they were with the probe. Hell be asked about it whether he wants to be or not. Head to our website for more on the barclays scandal at cnbc. Com. Weak banks should be allowed to die, thats according to the yo eurozones chief regulator. She will oversee the assets and stress tests due out later this year. And more bad news for the eurozone banks that could be facing a 50 billion euro capital black hole according to the chief executive of fund manager. He also warns germany has one of the worst Banking Systems in the world. Anetta is there in frankfurt. You have had some interesting stories over the last few days. What was interesting in that report was that davide said that they would welcome criticism from the regulators to go to the banks to say, this is it, guys, we need to do something about it. Do you agree with it . I actually dont think thats very much true because the German Government is known to have protected the german bank, which is a huge part of the Banking System for quite some time. And theres actually no big reason which would con vince me that they might have changed their mind by now. Only last year and the year before the big shipping lender and the largest bank in hamburg was rescued by their shareholders, which was also part of the city of hamburg. There was enough political will to really close down lenders, and that was something the Eu Commission wanted to have in exchange for the billions and billions and billions the lenders got from the taxpayers. So this is why this doesnt exist anymore, and this is why they had to downside tremendously. So whether those stress tests done by the ecb will really shakeup the german banking scene, i probably would rather doubt it as, of course, theres a lot of political will to keep those lenders and also recently they were saying they are not seeing a lot of problems for german banks. For that, back to you. Thank you, annetta. Thoughts on the german banks . I think just talking about banks in general, this comes at a time when we say spreads are trading sort of toward scientific heights. You have the stress test, if anything, the regulators have to come out to show credibility and transparency, from which previously with the stress test in 2012, you had the bankers, whatever, who three weeks later were needing to be bailed out. So we need to let a couple die perhaps in order to get credibility here. With all due respect to davide, that 50 billion euros is not a new number. The expectations have all been around there anyway. It makes great headlines for the media but it is not a new number. The banks generally say were fixed. And this is going to be a longstanding process, even if you believe that buying into Bank Credit Risk at this stage for the longterm probably makes sense. They bought into it but now people wonder with the cards out there, its a big question mark out there. Simon, good to see you. He is joining us from National Australia bank. Japans account surplus was the smallest on record last year that stood around 32 billion, down more than 32 from the year before. Makiko has more from tokyo. Hello, ross. Yes, the main cause for the shrinking surplus was the growing trade deficit. Imports hit a record high due to soaring costs of imported fuel as Nuclear Power plants still remain offline throughout the nation. The domestic economy picking up has also led to a rise in demand for imported goods. On the other hand, exports were a big let down. The weaker yen was expected to give japanese exports a boost and did grow for the first time in three years up 9 from 2012, but since many manufactures already shifted production overseas, the impact was not as significant as many hoped for. The only column that remained in the black was income from Investments Overseas reaching a record high, but it still wasnt enough to make up for the trade deficit. Japans outstanding Government Debt rose to almost 10 trillion, a record high as of last year, and its twice the size of its economy and the worst of industrialized nations. Economists warn that japan could also fall into the red within the next few years and that along with urgent fiscal reform, more needs to be done to help businesses expand and compete overseas. Thats all from the nikkei report, back to you, ross. Makiko, have a good evening. In japan 11 people were killed and more than 1,000 injured after the heavy snowfall hit tokyo and other parts of japan over the weekend. But 11 inches over snow fell in the capital, the most in 45 years, causing major problems on the roads and in the air. Hundreds of international and domestic flights were canceled and many households also lost power. Elsewhere, Chinas Central Bank takes on guard duty. The peoples bank of china will step up efforts to protect the Financial System against risk from Wealth Management products and local Government Debt while keeping liquidity flowing. Wow, good luck with that. In the quarterly report, they vowed to keep Monetary Policy steady saying while the economy will remain stable, theres no base for solid growth as yet. Chinas dongfeng shares were asked to be suspended after the french government officials will head to china this week for negotiations on the tieup with dongfeng. This could see the chinese carmaker and the french government take matching stakes over a 4 billion share issue. On the agenda in asia tomorrow, the japanese markets will be closed for the National Foundation day holiday, but theres still plenty of action for the rest of the region including earnings from Hutchison Port and foshan haitian shanghai. Coming up, well find out if this is a golden opportunity for mcdonalds in vietnam. Youre watching Worldwide Exchange. Welcome back to Worldwide Exchange. Members of the aviation sector including airbus and boeing are gearing up for the Singapore Air show. But what can you expect this year . Well find out. From commercial jets to military planes to Aerospace Parts makers, the largest air show kicks off tomorrow with billions of sales on the line. And with over 1,000 companies from 50 countries filling up singapores exhibition center, this year is said to be an even bigger show. This year we have a tremendous influence on the ecosystem in terms of autos or in terms of seeing strategy initiatives. Reporter naturally, the birds will get the attention. The boeing 747 dreamliner will be featured while the new 747 800 will be featured. And the air bust a350 will take to the first air show. The question here is whether the iconic jets are over the worst of their technical and production problems. On the defense side, theres the new u. S. V22 osprey deployed after typhoon hainan hit last year. Theres a lot of activity around the maintenance companies, and they are going to be in asia and singapore as their specific market. This is about asia and the overall industry. This is about a lot of opportunities in asia for the whole supply change. Reporter and those opportunities could chalk up to 31 billion in sales or even more. At least thats what asias Aviation Industry will be hoping for. The renal head of transport is here with us. We are going to see 50 billion from orders and this is expected to be the biggest air show by 2016. How are they adapting expansion plans and are they doing enough . I guess if you look across the regional space in asia, for example, the japanese slightly are geared more toward the boeing 747, but i think they move to the 350 announced earlier, that was the first time in history that a Japanese Carrier has started to look into these planes. And i guess looking to other countries, Companies Like Singapore Airline, they are looking at the airbus 350. So it is a mixed view in what we could see perform in a plane in thattant. Who is going to drive the sales . Airbus or boeing that wins in this case . Sorry . Who is going to drive the sales . Do you see the sales being driven at the show, if we are talking 25 billion of upsales expected. Well, i mean, obviously the 8350 will be a key. Well see a key model that they focus on because this is the next generation of wide body plane for the next five to ten years. Paul, thats great to talk to you, regional head of thats port. We look forward to all the details. Now to mcdonalds that has opened their first restaurant in vietnam over the weekend hoping to serve big macs to the 90 millionplus. The restaurant in Ho Chi Minh City is just one of several they hope to open in the next few years. We talked to the ceo to ask why it took so long to go into the country. Mcdonalds, we are not in a rush to market strategy. What we are thinking and what we do plan is that we want to enter a market and be there with an appropriate infrastructure to deliver the kind of quality products, the Safety Standards we have at mcdonalds. So we have not expanded into a lot of countries over the last 10, 15 years. Part of that has been because we focused a lot more on the core of our business, the existing assets that weve had, and weve had incremental growth in certain markets. This is an interesting time to be expanding in vietnam. In the long term, the demographics are promising, it is a fastgrowing and young population with incomes rising. But in the shortterm as the fed tapers, thats causing a lot of upset in emerging markets including the Capital Markets and also in the economies. How concerned are you about the slowdown in the region and also in vietnam where gdp has dropped into the 5 bracket . Well, at mcdonalds we are a longterm investor. So when we invest in a marketplace, we dont invest for the next two years along, we are investing for the long term. So whether that be vietnam, whether thats malaysia, singapore, whether thats south korea or china, we are investing in these markets for the longterm. So we dont expect to just see a tremendous return on that investment year one or year two or three even in some cases. But we do expect it to build a fundamental awareness of the band, a base of customers loyal to the band and will satisfy those needs and continue to build our business into the future. Emerging markets and Frontier Markets represent a Growth Opportunity clearly for mcdonalds, but how do you manage the currency fluctuations in the various countries . Does it affect your bottom line . Our strategy relative to broader growth is not just based upon emerging markets. We have 35,000plus restaurants, so small comparable sales growth in those restaurants yields very strong return for our shareholders as our business as a whole. We are focused on being able to grow the collective of mcdonalds. And this year were opening some 15,000plus restaurants. Based on 35,000, thats not a huge increment. Its a substantial increment, but new growth alone does not drive, will not drive mcdonalds into the future. Relative to currencies, we do several different things. One, is that we will reinvest quite a bit in the markets themselves. So if were growing in a certain market and we have revenues in that market, many times were able to reinvest those earnings in the market back into Additional Development opportunities. We try to create as many suppliers and a strong percentage of our supply chain as possible in the local markets. That gives us a National Edge as well. There are some limited currency hedges and other things we will put in play, but more than anything, we are a local business and we locally reinvest the dollars back into the business. Oh, yeah, mcdonalds open in Ho Chi Minh City. Exciting. Still to come, is it time to taper the table . We have the falling u. S. Jobs growth, but is it due to the weather . And janet yellen will testify this week. The second hour of Worldwide Exchange is coming right up. Ok, heres the way the system works. Lets say you pay your guy around 2 percent to manage your money. Thats not much, you think except its 2 percent every year. Does that make a difference . Search cost of Financial Advisors ouch over time it really adds up. Then go to e trade and find out how much our advice costs. Spoiler alert. Its low. Really . Yes, really. E trade offers Investment Advice and guidance from dedicated professional financial consultants. Its guidance on your terms not ours thats how our system works. E trade. Less for us, more for you. Welcome to Worldwide Exchange. These are the headlines today from around the globe. Market shares for barclays trade higher despite the data breach putting thousands of customers information at risk. And a u. S. Bank regulator sets her sights on breaking the 50 billion euro Balance Sheet black hole. Loreal reports that nestle could be selling their 50 billion stake in the firm. And the falling yen is giving a boost to exports. Youre watching Worldwide Exchange bringing you Business News from around the globe. If youre just joining in, thank you for joining us on Worldwide Exchange. Heres a look at how the markets are faring ahead of the u. S. Open. We saw a rally on fridays session closing out the week with the best twoday gapes since october. The s p and the dow both posting their best weekly gains for 2014, but has sentiment now turned . Well, you can see behind me, a red board here. Weve got the dow futures indicating low by about 31 points. So increasing the negative sentiment actually over the last hour or so. Weve got the nasdaq indicating low by 1. 5 points. And the s p 500 low by 2. 5 points so far. We have plenty of time into the session. You can see behind me, rally for the asian market, the nikkei gape posting gains with the chinese back. In the european session, we are seeing volatility, but we are posting gains this morning. Weve got the ftse 100 higher by. 20 . The German Market is higher by. 40 . Cac in france higher by. 40 . And the ftse here is losing a little down by. 10 . This is the first gape in four weeks for the s p, so thats helped out a bit. Well show you where we stand with some of the individual stories we are following today. Nokia up over 4 . Top of the stock 600 after the Company Revealed it signed a patent and Technology Agreement with the taiwanese startphone maker htc. Pending litigation between them hopefully will pave the way for future licensing deals. Loreal is saying nestle could be looking to sell their 34 billion stake in the worlds biggest cosmetics company. Well preview those numbers coming up. Nestle could sell their stake and then loreal could take them back and cancel them. And sentrica down 2. 7 . The market sold off on comments that the British Energy secretary ed daily said the company should be broken up. Hes been campaigning for lower fuel prices in the country. Take a look at where we stand with treasury yields, we were yielding on the tenyear near 2. 7 before the employment report came out and dropped on the yield 2. 68. This morning we are lowing at 2. 66. Treasury yields continue to be low. Slightly higher yields in the rest of the European Space and gilt yields as well. In the currency market, dollar is up at a oneweek high against the yen, 102. 12 this week. Last week we were at the 11week low of 102. 76. Euro dollar, we hit a high on friday. Li sixuan is back after her holiday to recap whats happening in asia. Thank you, ross. Great to see you this monday. Most asian markets gained as wall street weathered the mixed jobs report. The key 2100 level here but the hang seng lost 2 after the pbocs comments about control in the Financial System. Over in taiwan the dax ended flat with htc weighing on the index slipping 4 before it forecasted another net loss in q1. Elsewhere, japans nikkei rallied to 1. 8 ahead of tomorrows holiday. Soft bank jumped 5. 7 after an upgrade. And nissan gained marginally then posting a 57 jump in the q3 profit. Meanwhile, gains in australia helped rebound over 1 in todays trade. Chinese electric carmakers were among the top gainers today. This comes after beijing extended subsidies for green vehicles beyond 2015. And shares of Warren Buffett backed faw car were up by 10 . Meanwhile, faw also reported a 40 increase in its january sales. Thats a recap of the asian markets. Back to you. Thank you, good to see you. And the lower than jobs report is saying the weather probably isnt to blame. Heres our chief economist at stern, lindsay, you point out is the goods producing payrolls actually saw a solid rise thanks to cop instruction. So based on this data, in particular, you think momentum in the labor market is slowing. Yes, this is the second disappointing report on the heels of december for a total gain of less than 200,000. Over the past two months, again, a lot of analysts came out to say it was weather. It was weather that caused the weakness, but we did see a rise in good producing payrolls, in construction payrolls and we saw the Service Manufacturing index hold steady in january. So its very difficult to explain away the weakness simply because of weather. Yeah, 62,000 people said they couldnt make it to work because of the weather, but the average for people who cant work in january is 330,000. Exactly. So again, when we take in those seasonal effects, what we actually saw is that weather did not play a role here. And remember that the survey week is the week with the 15th included during the month. And that was more of the benign weeks. So again, its very difficult to blame weather alone. Its most likely that we did see a slow in hiring against that over zealous rampup above 200,000. 6,000 dip in education and health. The Health Sector has been one of the biggest contributors to job growth. What do you think is behind that . You know, thats actually one of the anomalies in the report. Health and education have been a consistent contributor to payroll growth. So this dip of 6,000 certainly is very difficult to explain away. More likely something in the seasonals or maybe early hiring again pushed forward into that october or november report. But we dont expect this to be a continuing trend. This is one months data point, which doesnt jive with what we have seen over the past several years in terms of strength out of these two sectors. With the Unemployment Rate down to 6. 6 , presumably the fed continues to wind down its asset purchases, where does this leave us ahead of the yellen testimony and what shes likely to say . You know, this is one of the silver linings. If you are looking for one of the positive aspects of this report, the continued decline in the Unemployment Rate certainly is where you can look. And this was actually for organic reasons, meaning although the labor force increased we saw Household Labor force increase even more. We are still at a near three decade low in terms of labor force participation, but every step is a step in the right direction that certainly helps. As far as yellens testimony, shes very likely to point out the jobs position between the strength and weakness we have seen as of late in the u. S. Market, referring to october and november above trend strength opposed to the weakness at the end of the year carrying into januarys number. Can i go back to the unemployment point that you made, yes, we saw it up for the right reason this is time, but to what extent do the Unemployment Benefits expiring pay a part in people rushing to get jobs . There was 1. 3 million americans that for them their benefits expired so we did see in some cases individuals drop out of the labor force, individuals that were hanging on to benefits, waiting for them to expire. Now look at labor Market Conditions just as 12 million additional americans since the end of the Great Recession said it is not worth looking for a job right now and dropped out. On the other hand, we saw several thousands of americans rush to take available jobs, whatever they could find, regardless of whether or not they were included in the underemployment number. So the benefits certainly played a role, but again, the main trend here is that loss of momentum on headline employment. And thats really what this jobs report points out. So picking up on that point about the loss in the headline, weve got october and november above 200k payrolls, we have december january significantly below now. Where does february need to come . How bad does february need to be to make the fed here step up and go, okay, now we maybe need to adju adjust . Theres going to be a lot of weight put on this february report. As the fed tries to dissect the underlying weakness versus temporary effects. Like a loss of momentum after we frontloaded this into september and october. But the fed is looking to february for the tiebreaker besides what we have seen the last four months. So its going to most likely be that we have to see significant weakness, meaning less than 100,000 in terms of february to really highlight the fact that it is that loss of momentum thats driving the u. S. Labor market rather than a temporary decline or a temporary weather effect having an impact in employment. And if we do see less than 100,000, i think it is very likely yellen airs on the side of caution and says, look, we need to pause or taper the tapering timeline and pullback on the monthly bond purchases again in her first monthly meeting in march. Interesting, so 100,000 is planned for february. Lindsay, great to talk to you. We have an announcement from barclays. They are going to announce the fully results but they already said the 2013 adjusted pretax profit will be 5. 2 billion pounds and the annual forecast will be near 5. 8. This is after reports over the weekend suggested that personal data held by 27,000 customers has been stolen and sold to the black market. What is going on at barclays . Who will pay for that . What do these figures mean . Well get more as soon as we come back. Where you think youre gonna go when your times all gone . [ male announcer ] live a full life. The new lexus ct hybrid with an epa estimated 42 mpg. The further you go, the more interesting it gets. Lease the 2014 ct 200h for 299 a month for 27 months. See your lexus dealer. The headlines today, europes nug Bank Regulator says weak banks should be left to die. Mcdonalds opens up its first ever store in vietnam. And janet yellen gets ready to offer testimony to the house and senate this week. Adjusted pretax profit of 5. 2 billion pounds. Sterlings are weaker by analysts and pretax profit of 2. 9 billion sterling. They are releasing slightly early figures. This could be to draw attention away from the other story going on about barclays today. They have been in the news for three days now, which is just like barclays. Absolutely traditional. I think their worry was some of the numbers were leaking out into the market, so they wanted to come out to say what they were. As you mentioned, they are a bit lower than expected. I mean, at the pretax profit level, the statutory level has come down a bit. The reason people are speculating, we wont see this until tomorrow, but a reason why weve gotten a lower level than expected is because the cost of its own debt has come down. So the charge is less so that final pretax profit number is higher. But we wont see that detail until tomorrow. We just have those headline figures. But as you said, a lower number than analysts were expecting. And flip over to the other story about barclays, the one they are obviously not trying to draw attention away from. The data protection. Yes, this is the story that a whistleblower has gone to one of the u. K. National papers and revealed that he could carry out 27,000 customer informations on what do they call these keys with the information. Regulators have gotten involved. Barclays said it launched its own investigation. It could just be criminal kind of collusion, in which case the bank should be clear. The question is, have they been have they been in kind of having enough checks and balances in place to make sure that the data is safe. Im not sure if it is criminal activity, it could be an employee inside the bank with this information. It could be somebody internally in the bank wrongdoing. Its a real nightmare for barclays, isnt it . Another one. Absolutely, another one. They have been on the hook for libels they have been on the hook for Interest Rates, but well see what the numbers look like tomorrow. How is he going to manage it . I think it will be difficult. Remember, hes got a whole chapter in the good citizen. So how these two things tally i dont know. His whole focus tomorrow is to keep slashing the investment bank. Well hear more on that tomorrow and say, look, the futures Retail Banking, dont worry about that. Interestingly, the future is Retail Banking and technology. So barclays really needs to get it right because theres supposed to be the kind of tech safety. Thank you. Weak banks should be allowed to die according to the chief regulator who headsup the supervisor mechanism. Daniele nouv will also oversee the stress tests due later this year. And more bad news for the eurozone banks that could be facing a 50 billion black hole according to the chief executive and advise tore the British Government on banking issues. He also said germany has one of the worst Banking Systems in the world. Still to come on the show, as bad as market volatility is, a new report suggests red tape could be one of the biggest risks facing Financial Services firms. And well ask why later. As we do so, well show you where we are on the dow jones stocks 600 heat map. Be right back. [ male announcer] the new new york is open. 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. Were open to it. Sometimes they just drop in. Always obvious. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Welcome back to Worldwide Exchange. We were just talking about barclays and i mentioned being the cynic that they released these numbers to detract from the other story going on about them right now, but the ft published these numbers on page 26 today. So obviously its a regulatory requirement now to announce those numbers today. So for no other reason did barclays announce them, they were forced to by the financial times. I want to mention that. U. S. Futures, they are ticking a little lower this morning. This after the s p snapped or was up for the first time in four weeks. The dow up. 60 . We are lower by two points for the s p 500 and the dow jones is down 32. As for the agenda to date the Economic Data this week is going to be focused on fed chairman Janet Yellens testimony before congress on tuesday and shell be speaking before the senate on thursday. Mcdonalds reports january Sales Numbers at 8 00 a. M. Eastern. That was a tongue twister, i apologize. And earnings today from hasbro, loews, nuance and annies. And quarterly emails show the top chinese regulator asked jamie diamond directly for a favor to hire a young job applicant. U. S. Authorities are investigating whether jpmorgan and other banks hired highlyconnected people in chinese business. The New York Times reports diamond met with the applicant family friend of the regulator in june 2012. She now works for the company. Jpmorgan says diamond had nothing to do with the decision to hire her and diamond is not suspected of wrongdoing. Jpmorgan shares are slightly low lower this morning. And toyota is closing a criminal probe into cases of sudden acceleration from several years ago. The automaker could pay 1 billion to end the fouryear investigation into one of the most embarrassing international incidents. Prosecutors are examining whether to make false or complete reports to regulators about possible vehicle defects. Toyota still faces hundreds of lawsuits over the acceleration issues. And Warner Brothers snapped the right pieces together to come up with a hit at the u. S. Box office. The lego movie opened with 69 million in taking among the best for the animated film thats not a sequel and better than despicable me. It stars chris pratt and Morgan Freeman adding 18 million overseas and has received good reviews reflecting the popular lego toys. And get the issue box ready. Its game over for the popular mobile game flappy bird. Fans are in mourning after the creator removed it from app stores. The vietnamesebased creator was reportedly earning as much as 50,000 a day from advertising revenue. Is that all . Thats all. It wasnt enough . Is that why he shut it . Wait for it, he said fame was ruining his simple life. Poor guy. 50,000 a day, he could have gone incognito. I think it is strategic. He tweeted, but i still make games. So imagine the anticipation. Lookout for the next one. Bingo. Theres a strategy there. We want to know, what computer game do you play you played this, right . Yeah, i tried once and thought this could be addictive. Its hard to keep it up for very long. What electronic game took up too much of your youth or student days . Joan brenner said, Space Invaders. There is an app for that. Thank you very much. You answered my question. Join the conversation and get in touch with us, email us at worldwi worldwide cnbc. Com or tweet us. And the Olympic Games are underway in sochi. The highlight includes the final of the mens olympic downhill. American bode miller began as the race favorite despite a Strong Performance in training. A series of small errors put him on the backfoot and he finished in eighth position. And australias meyer stormed through to top the leaderboard after completing the course in 2 06. Italys christoph was unable to take the gold being just. 006 behind. And jenny jones took on a strong field in the womens snowboard slope start. She soared to the top of the leaderboard with a score of 87. 25. I think these guys are great. I love the snowboarding. Do be able to do that. Jamie anderson was never far behind after recording 95. 25. Finland took silver and jones won bronze. Thats great britains first ever winter olympic medal on the mountain. Whoo well done. Brilliant. So the leaderboard, there we go, norway doing very well, two golds already. Seven medals overall followed by the netherlands. And then the usa. Russia one gold, two silvers, one bronze. Russian authorities warned against using bitcoin saying it could be used for financing terrorism or money laundering. Prosecutors say treating bitcoin as a parallel currency is illegal and that the ruble is the sole official currency. Thats interesting because the ceo of the Second Largest Bank there said it would be ridiculous to ban this. So thats interesting. Still to come on the show, the maker of the big mac makes a big bet on vietnam opening its first restaurant in the country. Well find out if this is a golden opportunity for mcdonalds. Welcome to world wide exchange. Im ross westgate. These are the headlines. Barclays releases their shares early and theres also reports of a huge data breach. Let weak banks die. The u. S. Bank regulator sets her sites on breaking sovereignce. And mcdonalds opens its first restaurant in vietnam. And the falling yen is failing to give a boost to exports. Youre watching Worldwide Exchange. Bringing you Business News from around the world. Well look at how the u. S. Markets are trading ahead of the open. We saw that rally in fridays session closing out the week with the best gapes since october for the s p and for the dow. The best weekly gain in 2014. So far, the key question is, has the tide turned . Red behind me on the board. We are indicating lower here for the dow futures by around 37 points, so gaining momentum to the downside over the last 30 minutes or so. The nasdaq lower here by around 2. 5 points. And for the s p 500, the story here, lower by 3. 5 points despite fridays gapes. Lets give you a look at what happened across the asian and european session. In positive territory, the nikkei 225 there in japan, thats based on currency weakness. And the European Market is managing to hold as a whole in the green. Relatively unchanged. We have the u. K. Markets higher by. 10 , the german higher by. 30 . The cac higher by. 40 . And in italy, slight underperformance just shy of. 10 lower in trading today. Ross . Thank you. Mcdonalds has owned its first restaurant in vietnam over the weekend. They are serving happy meals and big macs to the 90 millionplus population. The 350seat outlet in Ho Chi Minh City is one of 100 restaurants they hope to open in the next ten years. Don thompson has been explaining why it took so long to get into the country. We want to enter a market and be able to be there with an appropriate infrastructure to deliver the kind of quality products, the Safety Standards that we have at mcdonalds, so we have not expanded into a lot of countries over the last 10 to 15 years. Part of that has been because we focused a lot more on the core of our business, the existing assets that weve had, and we have had incremental growth in certain markets. Okay. Joining us for a little bit more is rick mayo smith, managing director at indochina capital. Rick, good to see you, thats the reason why it has taken a little while. What is the opportunity for a company like mcdonalds in vietnam . Well, vietnams grown now with 90 Million People into quite a sizable Consumer Market. And what people havent realized is that over time the market and the gdp has grown to be over 130 billion. And so actually its a bit late for mcdonalds compared to when they went into thailand when the gdp was in the 50 billion range. So i think they are not too late. Theres going to be a lot of possibilities. We have a lot of real estate there and the Retail Market is booming. And actually, the stock market is doing very well. It hasnt been hurt at all by the recent downturn in other emerging markets. We have done quite well in the Vietnam Market across the board, but the Consumer Market is definitely the big play these days. Why has vietnam sort of been relatively sheltered . I think people have been focused on china and india the last ten years. And now that the two countries are not growing as quickly as they used to, vietnam is always looked at as china plus one for the manufacturers. You have the billion dollar intel plant there, you have a number of big manufactures, samsung exports Something Like 20 billion worth of mobile handsets. Its sort of the secret that people are now becoming more aware of. And we find that they have been through some tough crisis as well. They have had bad publicity the last two or three years that has hurt them, but the fundamentals in vietnam are very good. The central bank and everybody else, they have stopped and declined the currency. They have the inflation that came down from 22 to 7 . Interest rates are more reasonable. So i think people are taking another look at vietnam that had a boomtime in the 90s and in 2000 and now it is having a chance in this decade. So people are taking a close look at it, and for example, mcdonalds. Rick, how easy is it for new businesses to take opportunities to move to vietnam and to open up there because you cant escape the fact that its the Prime Ministers soninlaw given the franchise for mcdonalds here. That to me is a bit concerning. Henry wynn was a wellknown business person before he married the daughter of the Prime Minister and is a harvard businessman. Its a logical choice. I worked at burger king when i was a kid and would help them, he worked at mcdonalds as a kid and hes helping them. I dont think its as bad as it looks. If anything, they made a smart choice. Perfect. You think it is relatively easy for businesses to set up there in respect to we are and have been doing business there for 20 years, and i would say their hurdles have really gotten through most of the bureaucratic mess that used to be the case in the 90s. So i would say its pretty easy to open up a business now in vietnam, especially getting easier in the consumer and logistics because of the wto, those time limits have now come upon us where we can allow to do that. They are also with the dtp, a new trade agreement, that will open up the market further. So we are provietnam and have been there for 20 years, but it really isnt that difficult to open up a business if you really put your mind to it. And theres a lot of people there to help you. Rick, brilliant, thank you for bringing that up. The managing director at indochina capital. Still to come, aol is reversing changes to its employees benefits plan. Well bring you the details, next. 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. Welcome back to Worldwide Exchange. Here are some headlines. European Bank Regulators say weak banks should be left to die. Mcdonalds opens its first store in vietnam. And a Publishing Company forces barclays to report their 2013 earnings a day early. Aol is reversing course on changes to its Employee Benefits plan. The company ceo was in hot water. Bertha coombs is at cnbc hq. Bertha, when i read this story, i cringed. Is this apology now going to enable him to move on . We shall see, julia. Thats right, aol Ceo Tim Armstrong made headlines last week when he said they were cutting back on the companys 401 k program because of increases in their Health Care Benefits due to obamacare or the Affordable Care act as its formally known. The company will scrap recent changes to its 401 k Retirement Plan and says hes sorry for comments he made to explain the initial move. Aol had decided to give employees an annual lump sum contribution instead of matching countntributions each pay perio. That didnt cause too much of a fuss until a town hall meeting on thursday. Armstrong during that meeting with employees singled out two unnamed women who had, quote, distressed babies, unquote, with Severe Health problems. Saying their care boosted aols Health Care Costs by a Million Dollars each. The immediate backlash overshadowed aols Fourth Quarter results to show the companys best growth in a decade. Armstrong later tried to clarify his comments saying aol wanted to be, quote, open and transparent about the choices that it makes, but hes been accused of using the infants as cover for an unpopular policy change. The mother of one of the babies deanna fay whose husband works for aol came forward to address armstrongs comments and in an interview with nbc news. It was sort of impossible to process that he was talking about my daughter who was home with me at that time. You know, to hear her label a distressed baby who cost the company too much money and therefore the ceo had to make the decision to cut retirement benefits. It just seemed like so completely dehumanizing. In an email to staff on thursday, armstrong said aol would reinstitute matching 401 k contributions on a per pay period basis. He also apologized for his remarks saying he made a mistake by mentioning specific health care examples when trying to explain the companys decisionmaking process. Fay says armstrong has reached out to her family and she has accepted his apology. Health care costs dont tend to directly affect a companys spending on retirement benefits, but they say that most companies do consider them in tandem. Although some were surprised aol would attribute high medical expenses to specific people. While most large selfinsured companies paid claims directly, many also purchased stock loss insurance, which is designed to cover the bulk of unexpected amounts over a certain threshhold, which can be for anything, julia. Obviously, there are people who have longterm illnesses that become very expensive as well, so these are things that companies build in when they know they are insuring a wide population. Thank you, bertha. Really interesting to get your take there. Now lets take a look at some of the other stories making the news. Influential proxy Advisory Firm iff is recommending shareholders vote against the buyback proposal. Apples annual meeting is on february 28th. They are waging a campaign to get the company to return more cash to shareholders. Iss says apple has made good faith efforts in the past two years including creating a significant dividend and authorizing a sizable buyback. But it doesnt completely let apple off the hook describing its buybacks as a little like bailing with a leaky bucket. Apple is slightly higher in the trading markets up around. 10 . Now Senior Executives at the Worlds Largest Financial Services company are so worried about the threat of regulation change that they are rethinking their organizational structures and do not feel ready for the impact the red tape is said to have on growth. Thats the starking conclusion of the new report which claims regulation is now second only to market volatility as the biggest risk facing financial firms. The executive survey described themselves as, quote, highly stressed by the situation. Jeffrey wallace is president of sunguard Consulting Services and is joining us now. Jeffrey, lets be honest, if ceos are saying that regulations are a crucial issue, you actually get paid on that, dont you . Youre benefiting from some of that conservancy in this report. I wouldnt say benefiting but we are working to address those issues. Obviously, they are highly stressed by the the environment feeling that the structure is creating an issue where they cant grow their business as well as they would like. They return to shareholder value they are paid to do. In our business we are trying to help them prepare and be ready for the change and inact that correctly because their reputation is on the line. So we have seen the Financial Services get hit by a number of different claims. I have to say, hang on a second, if we look here in the u. K. , the ppi claims, we look at libel, these shareholders return, too, so where is the balance, more regulation or letting businesses get away with the numbers we have seen . In the survey we found that the Financial Institutions see the need for Regulatory Reform and regulatory change ren a buying into that to make sure it happens. Because their reputation is on the line. They are not being driven by the large fines. Quite frankly, they are being driven by their Reputational Risk and theres consequences on their retention of customers. They want to be seen as a high value trading partner. So as they focus on this, they want to ensure they are meeting the regulatory requirements in introducing the cultural change required to be compliant with the future. But at the same time they also dont want to dampen their ability to return shareholder value and create new Business Opportunities or create new service that is benefit the market. Thats is what their core business is. Sometimes a regulatory general does distract from that, and thats a concern, balancing that is really the key issue for them. How much more are they going to be investing, jeffrey, than in technology . I mean, who is going to pick up the pieces in this . Well, theres definitely going to be continued investment technology. Most organizations quite frankly feel understaffed and underprepared for the regulatory change, but as they continue to invest in technology, they want to turn that into strategic advantage, being able to use this investment as a way to come up with better support systems and a new process framework and hopefully New Enterprise approaches to their organization. They want to unlock the potential so they dont want to waste the time and effort, and turn it into something that can return shareholder value. Thats really the key, but then being able to balance those both sides of the coin is critical, but they dont want to make it just about regulatory agenda. Ticking the box, meeting the minimal requirements from their historical past is not the way of the future. They want to enact cultural change and look at it in more enterprise and strategic ways. Thank you, jeffrey. I think the key point is that you mentioned that businesses are onboard with the changes that need to happen, it is just how we achieve that. Jeffrey wallace, president of sunguard Consulting Services. Thank you for joining us this morning. A bit sad, game over for flappy bird. The owner decided to remove it from the app store despite making 50,000 a day. 50,000 a day. But hes pulled it. Why would he do that . Well tell you when we come back. [ male announcer ] the new new york is open. 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. [ male announcer ] with nearly 7 million investors. Oh hey, neill, how are you . [ male announcer ]. Youd expect us to have a highly skilled call center. Kevin, neill holleys on line one. Ok, great. [ male announcer ] and we do. Its how edward jones makes sense of investing. And now, folks, game over, oh, yes, for the popular mobile game flappy bird. Fans are in mourning because the creator has removed it from app stores. This is a vietnamesebased owner who was reporting as much as 50,000 a day from ad revenue, but he said fame has been ruining my life. My simple life. In a series of tweets, he gave fans 22 hours notice before removing the game saying, i just cant take it anymore. He couldnt take the 50,000 a day anymore. Its too much. But i made this point earlier, he did say on his tweet, and i still make games. So i kind of believe theres a strategy there. Pull it when its doing really well. He saw this was not going to get more, so he pulled it and theres a great anticipation for the next one. Yes. Earlier we asked what Computer Games occupied too much of your life . One wrote, sorry, none, dont have time for games. Enough, moving on. I liked Space Invaders and now i know theres an app out there. I like the simple. European equities, we are three hours until the trading day. After gains last week, the ftse 100 is up pretty flat this morning. The cac is down a third. And italy is down. 10 . West week the best week in g the dow mini. The futures are lower by 39 points. We have the nasdaq lower by 3. 75 points. And the s p 500 is down 5 points. Losing ground over the next 30 to 40 minutes or so. A big focus for investors is janet yellen making her first trip to capitol hill as fed chairman tuesday and thursday to testify about the economy and Monetary Policy. Yellen has not spoken publicly about fed policy in about three months. The managing director of the chicagobased spectrum Asset Management is joining us now. Michael, what do we expect from yellen here . Will she have to assuage concerns here that the Growth Outlook and the jobs outlook is deteriorating . Well, you know what . She has clearly referenced the about of the fed to continue with the tape or at least pulling away from the asset purchase. For those reasons, i think theres a little bit of honous on the market to get that to come through. Thats a problem as you start to see the treasuries build up of getting that tenyear treasury yield closer to 2. 75 and 3 is completely failed and looks as though the job report in itself is one of the reasons why were getting such speculation. I think markets rallied on friday after the jobs data. Well, i think the markets, once they took a step back they started to realize that the fed is clearly in play here because of the weakness and its more like the real Unemployment Rate being 12 versus the 6. 6 to 6. 7 being posted. Again, why that happens is simply this, the dollar was really starting to take the feds onous and we started to rally and we saw weakness in the sterling and the euro. That resulted after the number in a complete aboutface and then we started to see a lot of weakness again in the major currencies. Again, i just reference the treasury market because the fed is not comfortable with, im sorry, the market is not comfortable with fed policy at this point. Thats why well continue to see a rallying stock market. So we saw around a 5 correction in these u. S. Indices. Do you expect us to continue the see this swinging around until we get a better idea of where we are headed or can we rally at this point . I think one of the best strategies here, at least for the remainder of the first quarter, is simply this. Its not a bad trade at all to start selling it to really good stock strength as we saw to end the week, which is probably going to be a good trade to start the week. And for the same reason, when we started seeing these major corrections or the belief that the market is going to start coming off a little bit more, a little bit more piecing in, but clearly top line right now. I think the major positions continue to be short positions and selling into this top nature in the s p at near and or above 1800. Mike, good to see you. You must have been upset and had a miserable weekend for you. Spurs spurs thats why i said it, hes a spurs fan. Michael, thank you for that. Have a good day. Thats it for todays edition of Worldwide Exchange. Squawk box is coming up next. Turbocharged engines against. Engines. Best in class rear legroom against otherclass legroom. But then we realized. Consumers already did that. Twice. Huh. Maybe thats why nobody else showed up. How does one get out of a death cage . Avo the volkswagen passat, starting at 21,945. Thats the power of german engineeri good morning. Welcome to squawk box. The job reports in the books and now they turn to janet yellen as she gets red the toy face congress. And they are asking apple shareholders to say no to icahn. Now hes expected to make a statement ahead of the opening bell. And mcdonalds brings the big mac to vietnam. They will also roll out monthly sails later this morning on monday, february 10th, 2014. I dont have anything for valentines day yet. I have to think about it. Squawk box begins right now. Good morning, everybody. Welcome to squawk box. Im becky quick along with joe kernen and andrew ross sorkin. The dow is coming off the biggest twoday gains in four months. The u. S. Equity futures this morning are looking a little weaker. Right now the dow futures down by 41 points below fair value. The s p futures off by 4. 5. Same story with the nasdaq down by four points. In asia overnight, stocks took their cues from wall street. The shanghai composite closing up 2 in a onemonth high. Stocks getting a boost from a number of billioncy announcements seen as favorable to Earnings Growth sectors from autos to insurers and infrastructure. For example, the Chinese Government extending subsidies for electric vehicles beyond 2015. In the meantime, in japan, the benchmark nikkei index rose to a oneweek high. The weaker yen overshadowed