Transcripts For CNBC Worldwide Exchange 20140911

The latest vote suggests the no count has taken the lead. Shares in ricardo trade higher despite a fall in profits. Chinese stocks hit a high as weak numbers suggest beijing will step up with fresh stimulus measures. Announcer youre watching Worldwide Exchange, bringing you Business News from around the globe. Good morning. Welcome to the show. Were just getting the report through that we had expected from the International Energy agency reporting that oil prices, quote, fell sharply in august. As we know, wti declines by 6. 32 to 96. 08. Brent down to 4. 79 to 103. 40. It says a slowdown in demand growth in the Second Quarter caused by a weaker outlook for europe in china underpibed those downward revisions. It said compared with a year ago, Global Supply was 810 thougs barrels per day. Referencing geopolitics, the iea said while conflijt in iraq and libya show in signs of abating, prices remain muted, that because of weakening demand growth and supply. We will be talking to the bnp senior Oil Strategist in did 20 memberships time. President obama outlines his plans to fight and ultimately destroy the group isis. The president says hes preparing the u. S. For a relentless war for syria. Hes authorizing and expanding air strikes in iraq. President obama is also urging congress to approve a program to train and arm Syrian Rebels in a fight both isis and the assad regime. This Counter Terrorism regime will be weighed to take out isil wherever they exist and using our air power and our support for partners on the ground. This strategy of taking out terrorists who threaten us while supporting partners on the front lines is one that we have successfully pursued in yemen for years. The president believes he doesnt need new Congressional Authority to expand the war against isis and no leaders have so far called for a direct vote on the issues. Hadley gamble joins us now. Hadley, in an interview with nbcs meet the press earlier in the week, president obama said one of the key ames of this speech was to make sure that the American People knew that the u. S. Had the capacity to deal with this threat. Do you think he got that message across . I would say, first of all, where has this president been . Hes very strong, hes coming across saying here we are, were going to do something 37 we have a sort of strategy. But we just heard him mention yemen and somalia. The last time i heard about yemen, it was a complete and utter disaster and im tauing about hearing from it from saudi arabia. They would know. What is america looking to hear from saudi arabia . Theyre going to hear we told you you so and we told you so big time. Unfortunately, i still dont see the diplomates that im speaking to, whether theyre iraqi, from the gulf or americans, theres no Clear Strategy. You cant say were going to pick the guys in syria we like. No one has been paying attention to the Syrian Opposition all of this time, including turkey. They pretty much dropped off the radar. So for me, im still waiting to hear something a bit better articulated in terms of where were going to go next and how were going to get there. Air strikes, that didnt work in libya. What are they going to do . Rain iraqi forces . They need a lot of training. Well have to see what happens next. The uk Prime Minister David Cameron is very clear, he wanted to see a new Iraqi Government in place in order for any military action to have legitimacy if it was called for by them. Is that legitimacy lacking . In terms of the government, we know they put another government in place. These are wonderful steps for them. We know this is a good thing for the iraqi people. Prime minister maliki had a firm grip on power and it was shia dominated for obvious reasons. But its great that these leaders are saying we have to take care of this problem which they havent been dealing with for two plus years. Unfortunately, its going to be a long, hard blowing and that is unfortunately not getting articulated to the American People and to the world. They dont have a Clear Strategy that im seeing yet that is going to be effective. At this point, im still wondering. So far, markets have in general shrugged off issues in the middle east. More air strikes, does that make a higher risk to the market . I think barack obama went to this speech, was very reluctant to have any kind of position. I think this speech is very important. Its very important for u. S. Domestic opinion. Its a way to rally the support around him. In regard for him to be able to do pretty much what he wants in the region. I agree, we dont know exactly what you will do. Strike from the sky alone will not solve the problem. You have to look at the roots of the problem and you have to make sure that you solve it. Right now, if you look at the oil price, we dont see a lot of big impact. I think all in all, it might be better for Companies Like kurdistan. Will, thank you very much. Hadley, thank you very much for joining us. Im sure well hear from you more a bit later, as well. So lets give you an update on markets, you who theyre trading. Theyre prodly flat, as you can see. The stoxx 600 was up more like 0. 4 . Its now up about 0. 16 soever today. Interesting to know where this slight strength is coming from. Perhaps its because of a strong close in the u. S. Yesterday and a decent return in asia overnight. The ftse 1 is 00 is back flat. It was slightly up earlier, partly getting a little bit more confidence, perhaps, from the possibility of a no vote from that latest poll, which well talk about a bit later. But lost that momentum and is down now fractionally. Germany is possibly up 1 . That inflation data that we had out earlier, 0. 8 for august, broadly in line with expectations. Not a strong inflation print, but not worse than expected. France off 23 basis points. Italy just below flat. Individual stocks, morrisons is up fractionally. It had been up more in earlier trade. Thats holding on to slight gains despite a 51 slump in fist half profit. Rbs up 1. 23 after the bank said it would relocate to london from edinburgh. Kellough joins us in two minutes time. Ashmore is taking a hit after a dip in full year profit. The manager the said performance was largely to blame for that. Its off 6 . Air france is off 2. 7 . Shares flying near the top of the stoxx 600 after the carrier pledged to boost core earnings up to 10 by 2017. Lets move to bonds. Yesterday, the u. S. Treasury yield did tick up to 2. 5 the 3 . Its settled down at 2. 51 today. That was following a significant 21 billion tenyear auction. That followed a significant auction, a threeyear bond earlier in the week, a threeyear bond did touch a twoyear high in yields. This tenyear is around roughly a 10month high at the moment. That pulled bond yields up elsewhere. Germany, 0. 98 . Gilt in the uk have picked up again recently, linked to the u. S. Moves, but the risk of Scottish Independence, 2. 48 . Italy, 2. 238 . Forex is very volatile this week. These figures today dont tell the whole story. But the u. S. Dollar has touched a sixyear high against the yen, a 14month high against the euro and a tenmonth high against sterling in recent days. Slightly flat now against the euro, but still below 1. 3 . Against the yen, 106. 8el 5. Against the aussie dollar aussie dollaraussie dollar, aussie dollar,. 9157. So weve had slightly better news for the no campaign, but still a tenmonth low against sterling following the moves in the last few days. Now, lets check in on markets in asia. Sri jegarajah is in singapore for us. Let me start with the china data. That was the big theme today. We got Inflation Numbers on the consumers side and on the factory gates, as well. And very tame they were. And this builds the case that theres more room before the pboc, the most to maneuver was calibrated stimulus measures. No big bang here. Premier league has been categorical about that. So we saw an initial rally on the Greater China market, that they have given up the ghost right now towards the close. They are in negative territory. Standard outperformers, the nikkei 225, looking at eightmonth highs here at the settlement, closing in on 16,000 and thats thanks to the weakness in the japanese currency in the yen. So were still very much in a strong dollar environment as we head towards the fomc. Back to you now. Sri, thank you very much. As sri just mentioned, Chinese Consumer inflation fell to 2 , weaker than indicated. Neutral Monetary Policy starts were blamed for the decline. Eunice at the World Economic forum is joining us. Hey, wilfred. Just talking more about those Consumer Price numbers, what were seeing is quite a bit of slack in the housing market. And thats filtering in to Consumer Prices. Theres, theres a lot of discussion about how excess capacity is weighing on industry here and that filtered through to producer prices. Now, all of that is just more evidence to the weakness in the chinese economy and one of the reasons why weve been hearing a lot today about how chinese the chinese slowdown poses a risk to the global economy. Now, we also heard from the chinese premier who spent some time at the World Economic forum here to really try and reassure some of the Business Leaders at this high profile event. He was talking about how the economy is doing just fine, that its on track to hit its target for the year of around 7. 5 . Also, he was talking a lot about the reform effort that the country has been pushing through those reforms and that it would be able to avoid a hard landing. Wilfred. Its this weaker inflation and, therefore, talk of mormon tear easing, comes at a rather bad time for the premier league cup. As he said yesterday, the 7. 5 would be hit not because of strong economic stimulus or easing Monetary Policy, but because of these vigorously promoted reforms. So the print today and what the markets are doing suggest that he wasnt really telling the truth there, that monetary stimulus is needed in china. Youre exactly correct, that there appears to be a disconnect. But i think that just picking up on what sri had discussed before, we do not expect to see a big bank when it comes to stimulus. But what the market has been talking about is that we could see some more measured, targeted clans in order to help prop up the economy. But there is a lot of concern that the leadership has been dragging its feet on reform. The chamber of commerce issued a report saying they thought the reformest was too slow and that it was too cautious because it has been about a year since the leadership did announce its Major Economic reform plans. And they said a lot of these reforms just havent been meaningful enough to their tastes. Eunice, thank you very much. As you say, they still have a very long way to go with chinas reform plans. The Portfolio Manager with still with me. Yannick, in the face of this, do chinese equities look attractive . I think its okay. The economy will struggle to grow to 7. 5 , there will be some stimulus. It was not based on construction. But all in all, there is some value in the chinese stock market. Along with that, we had german Inflation Numbers. That was weak as expected. Do you think europe is moving into a japan like scenario . Greece was slightly better or in line with the negative results. All in all, we have not yet in a deflation by europe. They have been, in fact, obviously, against sayings in russia. There is no sign of inflation, no sign of wage inflation, as well. Coming up on todays show, could mcdonalds, be branching out for lunch . Find out when you can get your hand on an egg mcmuffin later in the day. And we look ahead to lululemons numbers and see if todays work will be enough to energize. Does sxorts wear have to be fashionable . Which brand do you wear when you work out or should we be focusing on the exercise rather than what they look like . Get in touch with us. Still to come on the show, its time to numr o cf retailer post aed bag of earnings. We break down those figures after the break. Rbs has confirmed it would move headquarters to london if scotland votes to become independent. Rbs, which has been headquartered in scotland since its formation in 1727 has pledged to keep a significant presence in the country. Helia, a little bit of respite in the latest poll for the no campaign. Do you think the tide is turning back and well get a no vote next week . Well, i think you shouldnt get carried away with the new poll. The tide isnt turning. In fact, if you turn the other way, if you look at that poll, even though the no voters are ahead according to the latest data, you actually see a swing from undecided to yes voters. So the trend still remains that those undecided voters are saying that theyre going to look at a yes vote for a separate scotland. Yesterday, we had the governor of the bank of england in front of british mps in front of westminster saying the bank of england has a contingency plan and hinting that if southern scotland would need to raise as much as 130 billion pounds worth of foreign reserves in order to be a credible, independent country. And this is even without the back stops of the bank. What we heard is you were referring to rbs. This is a massive deal. These are both taxpayer banks. I think a lot of us have known for a while that it would be impossible for those banks to stay in scottland without the backing of the bank of england Going Forward. Last night, government came out, treasury said in the case of a yes vote, both banks would have to be relocated and that is because the bank of england would teed to be the lender of last resort. And what we heard about rbs, 11. 500 in scotland. Its saying it will put its plaque in london, but a significant number of employees will remain in scottland. Thats quite important. Brilliant, helia, thank you very much for that. Well be talking more about the implications of that vote and particularly in terms of the impact on sterling later in the show. Morse yops is fractionally down, 0. 6 . The group said the cut was largely due to price cuts made to offset competition from rivals. Shares trading higher despite posting a fall in average weekly orders, up 2. 9 as we speak. Home retail, the operator of home base, likeforlike sales at both stores increased. Retailer next on the rise despite profits of over 19 . The group maintains its full year forecast. John lewis reported a rise in profits. Department stores helped pick up the slump. Yannick, morrison shares up initially on this result. Thats despite a fall in profits. Now, just below that, what can you take from those results . If you look at the results, to defend likeforlike sales down 7. 4 . Nevertheless, easing by 5 in dividend. And i think thats the main thing. Right now around 8 , it was very late in restructuring. They are very late in the loyalty card. I think they will introduce it by christmas. Theyre late for the convenience store, but agreeing to that. So the dividend is a way for you to pay to look at the results, in fact. But a dividend of eight surely feels the intrimt must expect the map part of the dividend will be cut later in the year . Well, i think thats off. It is very possible that they would be able to maintain the dividend. You have to keep in mind, for example, you have a quite large real estate portfolio. They just started to sail in this buyback some of their real estate posts for you. They can do, they can court you to do it and it will be beneficial for the cash flows. I think it shows you a bleak picture today for the uk retail. Absolutely, you said it. Morrison looks like dismal results underlying profits down over a half. But its not just the dividend. It was head of what analysts had expected so thats where you saw the slight pop. Remember, youve got numbers that came out from the onf. For the First Time Since records began in national statistics, so the price cuts that were talking about are hurting the whole sector and you know whats happening with tesco, theyve had to parachute their new chief executive. Very quickly, it looks bleak, even in waitros, which has been one of these Success Stories, you saw a decline. They pointed to the fact that theyve been investing in new store openings as a reason for this decline in profit. Overall, john lewis does well. But it doesnt look rosy for the whole sectors. The only thing we heard was the market shares are growth, the quality of the product, i think, is better and and the fact that those discounters, the chief end of the market are doing well, is that a bad sign for you in general . The possible income is not going up. Theres no way inflation all in all, the only thing you can do as a retailer is trying to squeeze. You talk spain. But the market is not, as well. Still to come on the show, time to talk apple again. Will the watch be a real game changer . Plus, how are retailers getting ready to roll out the iphone 6 . Well discuss after the break here on Worldwide Exchange. We needed 30 new hires for our call center. Im spending too much time hiring and not enough time in my kitchen. [ female announcer ] need to hire fast . Go to ziprecruiter. Com and post your job to over 30 of the webs leading job boards with a single click; then simply select the best candidates from one easy to review list. You put up one post and the next day you have all these candidates. Makes my job a lot easier. [ female announcer ] over 100,000 businesses have already used zip recruiter and now you can use zip recruiter for free at a special site for tv viewers; go to ziprecruiter. Com offer2. Its in this spirit that ingu u. S. Is becoming a new kind of company. One that helps you think differently about whats ahead, and whats possible when you get things organized. Ing u. S. Is now voya. Changing the way you think of retirement. Does the president now have a Clear Strategy against isis as he authorizes air strikes in syria for the first time. If you threaten america, you will find no safe haven. Rbs and lloyds in the green as they outline plans to relocate scotland votes to independence. But the latest poll suggests the no camp has taken the lead. Delivering to investors, reporting a fall in market share. Morrison shares pair gains after its profit jumps 50 . Chinese stocks hit an 18month high as Inflation Numbers prompt speculation that beijing will step in with fresh stimulus measures. European markets paring in the red. The ftse 100 is up 0. 07 . The xetra dax up 17 basis points. Cac 40 up 0. 25 . For forex, we saw u. S. Yields tick up yesterday. The dollar has been very strong in recent weeks. Not Much Movement today, but that ties the true story which is that the dollar is at a sixyear high. Against sterling, it is at a tenmonth high. Moving on, crude remains under pressure after the iea said abundant supplies have driven lower prices. This a day after opec said oil demand was slowing at a remarkable pace. Joining us now, gareth lewis. Gareth, very significant moves as we all know in the oil price downward in august. Is that driven by speculators or by market fundamentals . Market fundamentals. What weve seen, in fact, weve seen nonopec supplies coming from the u. S. , greater than expected. And we also had demand weakness, perhaps less than expected. Now that were getting pmi data from europe and china, the iea has revised down demand expectations for those two countries. So we are seeing weakness, stocks building and prices tend to fall off. Gareth, everyone is, of course, focused on geopolitics and the fact that it hasnt had much impact so far on the oil price, particularly the issues in iraq, syria and also ukraine and russia. There was no immediate loss in oil supply and perhaps the positive impact of those is soon abated. But we think the markets, nonetheless, underestablishme underestablishmenting geopolitical risk Going Forward, in particular around iraq, syria and also russia. More importantly, i think theres a scope for higher prices on the basis that demand tends to increase seasonally as we approach the Northern Hemisphere winter. We have saudi arabia and opec will adjust itself production in most of the tech prices. Some may believe that that is not the case. Gareth, a lot of taukz on the sanctions that europe is imposing on russia. Is it plausible for europe to reduce its independent dependency on russia in a one or threeyear time horizon . Certainly not within a oneyear horizon. It struggles over the basis, as well. Many refineries are floating with crude similar to russian crude. So i think europe and russia are interdependent upon each other and that will limit the scale of any sanctions that may take place. And, of course, u. S. s fear of its own foreign dependency on Energy Supplies has meant that so far they havent been willing to export significant amounts of oil or indeed liquify natural gas if it was to help out a partner behind europe. Could that be an issue behind the u. S. Allowing more exports moving forward . The issue of crude exports in the u. S. Will take a number of years to sort out. The electorate has been brought up focusing on the need for oil independence. When theres a first opportunity for that to achieve, i think its difficult to politically negotiate that with the support of the electorate. A major shift, i didnt see that happening on the threeyear basis. Gareth, were below 100 a moment. Where will we be at the turn of the year . At bnp paribas, we see a stronger demand. We see opec adjusting its product. We believe it is in to support prices and given the end of the year, we see brent approaching 108 a barrel. Gareth, thank you so much. Moving on, ukraine says russia has removed most of its troops from the eastern portion of the country. Poroshenko said 70 of Russian Troops have pulled back. Poroshenko detailed plans to hand more autonomy to rebel controlled territory. Air france vowed to boost core earnings through 2017. Stephane is live in paris with the details. This comes after a plan focused on job reduction and cost cuts. France klm wants too just the company. The ceo said yesterday that it would create up to 250 jobs for pilots. The company is going to restructure its loss making unit. The Cargo Division was one of air france, posted a profit warning in july. 2013 and 2017. Now, the main problem, the main reasons in the shortterm is a strike from the pilots which are as opposed to this transformation plan. The reaction is positive. The announcement seems to please investors. Air france klm shares are trading 2. 6 higher on the French Market this morning. Back to you. Stephane, thank you. Were just getting on on the wires that argentinas congress has passed a new debt restructuring legislation. No further details on that other than it has been passed. Well bring you more when we get it. Now, rbs has confirmed it will move operations to london if scotland votes to leave the uk. The bank said it will provide the necessary clarity for shareholders and investors. Rbs, which has been headquartered in scotland since its formation has pledged to keep a significant level of jobs in the country if it relocates. The news comes as a new poll suggests the no votes have retain the lead. Shows 47 of voters rejecting it. Uk Prime Minister David Cameron begged the people of scotland not to break up from its family of nations. The leaders of all three main Political Parties flew to scotland to bolster the campaign. Joining me now is simon derrick. Simon, good morning. Good morning. Is the risk of a yes vote now priced into sterling . I think were getting rather closer to pricing it in. So how do you really price it in . I think probably the best way to see that is not to look at the price of sterling itself, but looking at the pricing of the market. Pricing is starting to move back from the normal levels that we had just a month ago. You can see some of the sharp moves in the onemonth prices. And just the course of a few days. That will say to me that yes, we are closer to pricing in uncertainty ahead of next week. What is impossible the pricinging is what happens next in terms of the price move that we can see in either direction. And what do you think is driving the weakness in sterling . Is it specifically the uncertainty of what could happen to the british currency in the instance of a yes vote or is it the rise in terms of we dont know how things will play out . I think you have to put it in the context. Sterling was one of the favorites of the market. It was one of the easiest trades you could make. So the reaction youve seen in the last few days is the wake up to that particular story. It came down to the details. We dont know yet what currency we have in scotland. Should we have a yes vote . There is this great uncertainty. You get 25 to 30 moves on sterling when you get these fundamental shifts. There, i think, is the real concern for investors and there is the reason why were seeing volatility continuing to rise. But who knows when you get a knife edge vote like this. If you look at it in very simple terms, what are we talking about here . Were talking about the most significant event for the union in 90 years. Its what we saw in the aftermath of the Northern Iraq story which is the first default of the bank in over a hundred years. It seems to me unreasonable to compare it to those events. Simon derrick, bny melon. Still to come on the show, we get answers as protesters take to the streets near barcelona. Cute little guy, huh . This guy could take down your entire company. Stay with me. On thursday a hamster video goes online. On friday it goes viral a network choking phenomenon. Why do you care . Hes on the same cloud as your business. The more hits he gets, the slower your business may get. Do you want to share your cloud with a hamster . Today theres a new way to work. And its made with ibm. The smartphone wars are heating up again. Tmobile added nearly 3 million customers in august. It wood enable phones to seamlessly switch to a wifi in areas where its Wireless Network is not available. Verizon will give customers who trade in an old iphone a free iphone 6 in exchange for a free twoyear contract. Rival at t is offering customers a free credit and a free iphone 6 when they trade in their contract. Walmart will sell the iphone 6 for 179 and the iphone 6 plus for 279. Verizon, at t and walmart trading slightly down, at t fractionally up in frankfurt. On a programming note, maury will be on squawk in an exclusive interview with david faber at 9 00 a. M. Eastern time today. Twitter plans to raise 3 billion in capital in its first debt sale ipo. Twitter didnt detail its plans for the money. Twitter so far in frankfurt, off about 1. 5 on the news. Is the apple watch really a game changer . Were outside the apple store. Apple pay, i forever 6 and applewatch. We know how wall street has been reacting. Thursday afternoon, the stock was trading up 1 . We thought we would take to the streets of new york city to see how main street america, real life perspective apple customers, how they are reacting to these new products, especially that smartwatch which is apples first dive into the wearables space. Have a listen. I never consider watches in general for one reason or another. I depend on my phone when i want to look at time. I do like the idea of having my phone on my wrist because i dont like reaching for my percent or reaching for my pocket. It looks good. Its just not my type. I have skinny wrists so its too bill big for me. In all honesty, i would probably get that quicker than i would get the phone. Im not really a tech geek or anything and i dont really like talking on the phone, but i love the idea of the watch and i love the idea of being able to track your health and it just being right there. It seems a lot more convenience, in my opinion. Im a runner and i have a garmin, its a small watch. If i do use my phone, i have a thing here. Too much going on. I think i would just stick with my running watch. There you have it. Certainly some mixed reviews on that apple watch. Its just 349. Three styles, multiple bands, multiple colors. We wont really know how consumers are reacting to this when it releases, a date to be decided. If you take a look behind me, there are already folks lining up for apples new iphone 6. Preorders start on that on friday and those arent shipping until nkts friday, but thats not stopping these hard core apple evangelists from lining up to get this new model. Back to you. Meanwhile, tech enthusiasts in china will have to wait a while to get their hands on the new products. Despite the launch date in the u. S. And uk, apple has yet to set a release day for the Worlds Largest market. The tech giant has said it would get to china as soon as possible. Lululemon is reporting results today. Does sports wear tr to be fashionable . Josh has tweeted in to say lululemon is just a fad. I buy a decent pair of shoes and old pants to work out in. Thats what he says. Get in touch with us. We will be previewing those earnings at around 11 40 cet. Dont miss that. Pro independence parties are taking to the street to mark the national day of barcelona. Antonio beroso, Senior Vice President joins me now. Can we start with a little update on exactly what the situation is in barcelona. Yes. Today is socalled national day. There will be big protests. The Prime Minister calling for the referendum on the 9th of november, which is a chosen date. Then the Central Government will challenge them. Will we get to a vote unless madrid changes its mind . No. I think once the Constitutional Court invalidates the laws that allowed the referendum, the Prime Minister has to decide how to handle it. They want international legitimacy. What has been the main argument, that mas and the referendum news in cat loan na, i would say it does provide an example if catalonia sorry, if scotland votes in favor of independence. For them, it provides a longterm example of how things can happen. But shortterm, i think the premier will be very quickly go out and say to the financial markets, this is not going to happen in catalonia. So this potentially could be a bigger issue for spain than it is in the uk. Compared to scotlands 5 . So if this did start to happen, could it move spanish markets significantly . Maybe. But i think the Central Government will be pretty quick by providing independence in scotland. You dont have to worry because we have the situation under control. Now, i think the main issue in the case of catalonia is that they will try to use the Scottish Independence as the precedence, at a european level. They are trying to say, look, the way which could happen, but i think at the end of the day it depends on the negotiations. And do you think that there are clear lessons to be learned from scotlands independence path, so much uncertainty surrounding it . What lessons would you take from that if spain got to that point . I think there are two very different cases. But this one lesson is that you need clarity, right . I think from the very beginning, it has been somehow a rationale debate until the end. What will happen with the oil, what will happen with the clarity . If you want to replicate the process, at the end of the day, you need clarity. You need to know whats going to happen. Antonio, thank you very much. Antonio baroso, Senior Vice President at teneo intelligence. Looking to put your home on the market, you may want to start saving. Up. Robert frapg has this report on how the wealthy are sprucing up properties in order to attract buyers. Preparing your home usually involves a the queen of luxury staging is meredith bear. Her company is where the hole lewood elite turn to when selling their mega homes. And revenues are now 2 million a month. Heidi zieker is head of design at meredith bare homes. We do everything to dress the house so it sells for the highest price as quickly as possible. A job like this costs between 35,000 and 45,000. We are in los angeles where bears team was staging this home about to be put on the market. Asking price . Nearly 20 million. When you think about a home of this value and the carrying costs that you have every month that it doesnt sell, it really is a small investment. Baers team sells tells us that a staged property sells 80 faster than one thats not and for 20 above the asking price. Among the items they add, custom furniture, carpets, hand wrapped books and, of course, hardware. Now, some stagers will put a ferrari or rollsroyce in the garage to give it that luxury, lived in feel. Back over to you. And we want to hear from you here on Worldwide Exchange. Today, of course, as i said, well be talking about the fitness craze thats hitting the streets of the world, really. And particularly we want to hear from you. If you think thats overegged or is there money to be made by investing that and what are the best brands, in your opinion . Worldwide cnbc. Com. Still to come on the show, president obama orders air strikes for the first time in syria. Well bring you more on how he plans to combat the isis militant group after the break. As we go to break, we will leave you with a look at how u. S. Futures are looking ahead of the open. Futures at the moment, expected to open slightly down. Thats dolg a bounce back in markets yesterday and unsxriesing to see a slightly negative open today. The s p expected to open down 6 points, dow expected to open down 54 points and the nasdaq expected to open down 12 points. Well be back here on Worldwide Exchange in a couple of minutes. Guys youre not gonna believe this watch this. Sam always gives you the good news in person, bad news in email. Good news fedex has flat rate shipping. Its called fedex one rate. And its affordable. Sounds great. [ cell phone typing ] [ typing continues ] [ whoosh ] [ cell phones buzz, chirp ] and we have to work the weekend. Great. More good news its friday woo [ male announcer ] ship a pak via Fedex Express saver® for as low as 7. 50. Welcome to Worldwide Exchange. Im wilfred frost. Does the president now have a Clear Strategy . Obama prepares the nation as he authorizes air strikes in syria for the first time. We have made it clear that we will hunt down terrorists who threaten our country with the corporal of my presence. If you threaten america, you will find no safe haven. European shares dip in the red as u. S. Markets point to a lower open. The launch of the iphone 6 sparks a new round of smartphone wars with at t, sprint and mobile all rushing out new promotions. Cnbc has an exclusive interview with print sprs new ceo today. Rbs outlines plans to relocate if scotland votes to separate from the uk. Announcer youre watching Worldwide Exchange, bringing you Business News from around the globe. Thank you very much for joining us here on Worldwide Exchange. As we just said, the u. S. Market expected to open down. That follows a strong day yesterday, led by tech. Nasdaq up about 0. 75 yesterday. Apple up 3 . Today were expecting the markets to open down significantly, about 44 points down for the dow. About six points down for the s p 500 and the nasdaq down about 10 or 11 points. The ftse 100 down about 14 basis points. Germany was in positive territory. Inflation, 0. 8 for august, a year on year number. France down about 44 basis points, italy down about 0. 3 . If we look at bonds, interesting moves in the u. S. Treasury yield over the last couple of days. It did touch 2. 53 yesterday. The day before that, we had auctions. U. S. Yields have been picking up this week on expectations that we might get a rate rise earlier than people had expected. All eyes on the fed meeting next week. That pulled up yields every elsewhere. Thats about 0. 1 higher than it was about 10 is days ago. Uk gilts have picked up, as well, in recent days. Just under the 2. 5 mark. Mark carney, the bank of england governor, suggested earlier in the week that we might see a rate rise in the uk around springtime next year and italy 2. 4 . The forex, the u. S. Dollar touching a sixyear high. At a 14month high against the euro and a tenmonth high against sterling. On the commodities, and we had that report out of the International Energy agency earlier, highlighting the weakness in oilt prices over the summer. As ungz, nymex at 91. Brent at 97. Both under a hundred. Lets get a check in on whats happening in asia today. Over to sri. Thank you, wilfred. A big day today in china. We got Inflation Numbers at a consumer level and for the factory gates for the month of august. They were pretty down boat. That tells you inflation is rather tame in china. This is good news. Gives the pboc a bit more room to maneuver. Markets initially rallied only to give back the gains in trade. The absolute outperformer today, closing at a eightmonth high wilfred thanks to the large part in the softness of the japanese yen. As i said yearly, were very much in a strong dollar environment, weak asia fx environment as we move towards the fomc. Back to you now. Thank you very much, sri. Weekly jobless claims are out today at 8 30. At 2 00 p. M. , we get the monthly federal budget statement. A pair of notable earnings today, kroger and lululemon, which well be talking about more later in the show. But before that, stan wantrofsky joins me from philadelphia. Dan, the outlook you believe for smaller caps in the u. S. Is more positive than for big caps. Well, i think over the long run, we do believe that is the case. One of the problems we have now is here in the u. S. , you have the s p. The larger caps broke out to new alltime highs. Small caps have been struggling. Theres a bit of selectivity. What we want to see is the russell 20 00 break out to new alltime highs, as well. Ultimately in the years ahead, were going to see a rising in terms of our interest rates. We believe small cap performance is highly correlated to that Rate Movement because what its signaling, really, is a new growth cycle here in the u. S. Ultimately, we believe small caps, midcaps are going to take the charge in terms of leadership in the secular market. Theyve really been moving into the large caps almost as a defensive play. And Going Forward as our yield environment starts to rise, we think investors are going to gravitate more towards growth, small midcaps are going to lead the charge. Were voting investors at this point to start thinking about small cap plays and sectors. We particularly like technology, we like industrials to lead the charge. Biotech, health care, those are huge drivers in the u. S. , as well. Thats what were going to start to concentrate on Going Forward here. Dan, usually the small caps, usually the russell 2000 outperforms a market rise in the s p. Its usually higher. But we havent seen that over the last 12 months, despite the s p rising quite strongly. Does that perhaps suggest people arent that confident, that actual strong growth will come through and, therefore, carry markets higher and the markets in general have held up by looz loose policy, not by strong macro fundamentals . If you look at the financial crisis we had a few years ago, off those lows when the s p crashed down to 665, small midcaps did lead the charge by a wide margin and it was recently only recently over the last year and a half or so where large caps took that over. It was a yield play. Again, on a shortterm basis, investors have become a bit more cautious, we should say. But what weve done is weve looked at the longterm correlations going back 50, 60, 70 years. Weve watched not nominal price performance, but relative performance of small caps against those larger cap benchmarks. And theres a very high correlation to interest rates. In other words, the last time we had a reflationary cycle here in the u. S. , which was really the 1940s, 1950s, your small caps, once the stocks broke out, once the markets broke out to new alltime highs it was only a matter of time when rates started to press higher than small midcaps, again, took the lead. Solo were fought there right now, you want to say that russell break out to confirm the bull market. But as long as we see that in the future and you get that break out around 1215 on the russell, you had mentioned earlier the yields pressed on the yield chucks yet. We think yields can pretty higher here. On the six to 12month target, we think they can go more than 3 . Again, with that correlation, that rotation back towards growth in the u. S. , we think small midcaps can take the lead vently. Its early in the call here. Thank you for joining us, particularly so early in the day. I can see youre the first person in the office this morning. Dan from Jenny Montgomery scott. The smartphone wars are heating up again in the wake of apple launching the new iphone 6. The company will enable phones to seamlessly switch to a connection in areas where its Wireless Network is not available. Remember rison will give customers who trade in an old iphone 6 a new iphone 6. Wall smart will sell the iphone 6 for 179 and the iphone 6 plus for 279. Thats 20 less than apples price. Verizon is trading off a little bit. Wall more more significantly down about 0. 5 . At t roughly flat, that of course all trading in frankfurt. New sprints ceomaurice will be on squawk on the street with david faber at 11 00 eastern time. Twitter will issue convertible bonds in two trunks. One will mature in five years, the other in seven years. Twitter didnt detail its plans for the money, but the company has been making several accusationses it looks to expand off its business. Still cocome on the show, president obama orders air strikes for the first time in syria. Will this break any breaks . We needed 30 new hires for our call center. Im spending too much time hiring and not enough time in my kitchen. [ female announcer ] need to hire fast . Go to ziprecruiter. Com and post your job to over 30 of the webs leading job boards with a single click; then simply select the best candidates from one easy to review list. You put up one post and the next day you have all these candidates. Makes my job a lot easier. [ female announcer ] over 100,000 businesses have already used zip recruiter and now you can use zip recruiter for free at a special site for tv viewers; go to ziprecruiter. Com offer2. At a special site for tv viewers; 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. President obama authorizes air strikes in syria for the first time. Rbs and lloyds says theyll relocate to england if scotland votes to break away from the uk. And the smartphone wars are back. Cnbc speaks exclusively to sprints new ceo later today. President obama has outlined his plans to fight the Islamic Militant group isis in a prime time televised address, the president says hes preparing the u. S. For a steady, relentless war in isis. Hes sending 500 340r u. S. Troops to help Iraq Security forces. President obama is urging congress to approve a program to train and arm syrian prebls. This Counterterrorism Campaign will be waged through a steady, relentless effort to take out isil wherever they exist using our air power and our support for forces on the grouptd. The strategy of taking out terrorists who threaten us is one that we successfully pursued in yemen and somalia for years. Hadley gamble joins us more on set. Do we have a Clear Strategy to kill the isis threat . I think that might be a bit of a stretch, unfortunately. At this point, were talking about the Syrian Opposition again. This is a group that was basically sidelined for two years. Last year, around this time, there was a red line that was drawn, you know, for president obama. He said were going to go into syria. Basically the political talk was we shouldnt have air strikes, we dont know who were going after, what syria has begun to understand if they didnt already is a bit of a mess. We have pro assad forces, you are the syrian group, you have all these other terrorist organizations. So its a bit of a mess. So saying were going to go in and do more air strikes, we know it didnt work in libya. The fact that hes bringing up yemen and somalia Success Stories is somewhat questionable. I would have thought twice about that one if i was working at the white house. But essentially right now we dont have a clear way forward as of yet. And both over a year ago, both the uk and the u. S. Were considering attacks in syria. Do you think at that moment that they were totally unaware of the threat and perhaps even existence of isis at that time . I think there were elements of it. I think the overwhelming majority of the gulf arab would say, we told you so on this and we know theyre meeting today to talk about this. The foreign member sisters are talking about the way forward. But essentially, im still waiting to hear a clear way forward and i know that they are. And asking them to get involved, at least of the ground to combat this threat, thats very, very very, very sticky for the saudis, especially. Indeed, hadley. Thank you very much for that. Still to come on the show, could chinas economic shift away blame for a dutch disease affected commodity rich markets . Find out which companies are most at risk avenue the break. Well leave you with a shot at how markets are trading in europe. Roughly flat. Xkc lululemon reports q2 earnings today. Weve been asking you, what do you think about the latest fitness crazes . Does sports wear have to be fashionable . Josh tweeted in earlier and he said lululemon is a fad. I buy a decent pair of shoes and wear an old tshirt to work out in. I have to admit that given that my football team, my soccer team arsenal just got a new soccer team in arsenal that i went out and bought a whole new gym kit because of that. How about you . Let us know. Worldwide cnbc. Com or twitter, cnbcwex. Now, its noon and you have a craving for an egg mcmuffin. The fast food giant has filed a trademark for mcbrunch. A mcbrunch program would likely be limited to weekendes and holidays only. The s. E. C. Is reportedly filing the Investigation Centers on an investor alert sent from heights shortly before the u. S. Government announced changes in medicare reimbursement to doctors last year. Shares spiked before the news was announced. Rebel may have found a buyer, the Atlantic City casino closed its doors last week after being in operation for a little mover than two years. Rebel has filed a motion in Bankruptcy Court to sell itself to the pole low North Country club for 19 million in cash. Pole low is acting as a stalking horse or more initial bid. Rebel is the third Atlantic City casino to close this year. Lets have a look at u. S. Futures. At the moment, they are expecting to open down. The implied open at the s p expected to open down 5 points. The nasdaq down about 11 points and the dow jones down about 50 points. European markets are roughly flat. The stoxx 600 is pretty much flat. Germany is only down 0. 7 basis points after Inflation Numbers came in in line with expectations earlier today. Now, chinas consumer inflation fell 2 in august, weaker than anticipated. The data has led to increased speculation that the pboc will step up stimulus measures. Our next guest has been taking a closer look at chinas economic shift and the impact on commodity dependent emerging markets. As china slows and their demand for commodities falls off, is that a bad sign for some emerging markets that have a heavy dependency on yeah. Its very bad news for hard smodty exporters for who china has been a very important source of demand. So as china moves away from investment towards assumption, it means these commodities super cycle has left their currencies very uncomparative. At the same time, you dont have that spaurt for commodities any more. In the current economic back drop, there are additional risks because most of these economies are current account deficit economies. The pressure on carry trade would start to come through and that will imply that these economies have to reduce their reliance on external funding. Theyll have to reduce their current account deficit even. The pressure is on them to reduce it. And theres nothing particularly new here. An emerging economy with a high amount of Natural Resources clearly is going to have a high percent of gdp relating to those commodities. So, you know, as the commodities super cycle changes, its going to be obvious that their currency will have gone up and now its going to come down. What can they do to protect against that . Well, they should have done a lot of things when they were in the super cycle. But now it has relapsed and fallen behind the curve. But even now, what they need to do is gain competitiveness. And you can do this by increasing productivity, basically, reducing your unit labor costs and things like these take time. So at this point in time, we do see these economies going to increasing pressure. They can increase their share in world exports and, you know, reduce the pressure on current account deficit. And you were saying someone in your notes, someone like brazil has been the they planned very poorly for this, a country like chooil has done in terms of getting ready for this. Precisely. So brazil i think is the most exposed to dutch disease of sorts because they have fallen back on the reform agenda, populist policies, and consistently rising minimum wages, declining productivity. And you dont really see any sign of the site on that. And even the elections, for example, the three parties that are in the running, nobody talks about structural reforms, etcetera. So you dont really see any immediate respite for brazil. South africa is very exposed, as well. As you said, chile is not that exposed. It has managed to avod the proximate relatively well so far. But so far, so good. What happens next. But even in the future, its much better positioned to weather the storm. If you look at the exposure the economy has for commodities, the percentage of gdp surplus is from hard commodities, completely dependent on china. Thank you very much for joining us. Meanwhile, more analysts are sounding the alarm bells over emerging market currencies. Head to our website to find out why selloff could be on the cards. Thats cnbc. Com. Now, the new and improved iphone 6 lights a fire under apples rivals, setting the stage for another round of smartphone wars. We get the full story from cnbc hq in just a few minutes. Stay with us on Worldwide Exchange. As we leave you, here is a look at twaet street ahead of the pope open. Guys youre not gonna believe this watch this. Sam always gives you the good news in person, bad news in email. Good news fedex has flat rate shipping. Its called fedex one rate. And its affordable. Sounds great. [ cell phone typing ] [ typing continues ] [ whoosh ] [ cell phones buzz, chirp ] and we have to work the weekend. Great. More good news its friday woo [ male announcer ] ship a pak via Fedex Express saver® for as low as 7. 50. Welcome to Worldwide Exchange. Obama prepares the nation for a steady, releaptless war with isis as he authorizes air strikes in syria for the first time. If you threaten america, you will find no safe hach. U. S. Futures point to a lower open as the nasdaq has its biggest gain in over three weeks. Chinese stocks see weak Inflation Numbers. The launch of the iphone 6 sparks a new round of smartphone wars with at t, sprint and mobile all rushing out new promotions. Announcer youre watching Worldwide Exchange, bringing you Business News from around the globe. If youre just tuping in, thank you for joining us here on Worldwide Exchange. Dont forget, a strong day in the u. S. Yesterday and the nasdaq leading the charges up 0. 75 . Today, expected to open down about 10 points, the nasdaq. The s p 500 expected to open down about five points and the dow expected to open down over 40 points. Europe has been soft today. The stoxx 600 did, in fact, open around 0. 5 earlier. But it has lost momentum. The stock roughly flat now. Italy, the italian market is slightly up. Germany is roughly flat. It had its Inflation Numbers come out for august, 0. 8el year on year roughly as expected. Not a strong but not worse than expected at least. And the ftse 100 is off about 20 basis points. Now, president obama has outlined his plans to fight the Islamic Militant group isis. In a prime time televised address, the president says hes prefared for the u. S. To have a steady, relentless war with syria. President obama is urging congress to approve a program to train and arm Syrian Rebels. This Counterterrorism Campaign will be waged through a steady, relentless effort to take out isil using steady air power and our party ner forces on the ground. This strategy of taking out terrorists who threaten us while supporting partners on the front line is one that we have successfully pursued in yemen and somalia for years. Nbc news chief correspondent Richard Engle is in iraq and september this report. Reporter if the president didnt have a strategy a couple of weeks ago, im not sure that he has a strategy right now. The only thing that was very clear about this speech is that he wants to launch some air strikes in syria and wants to find some targetes from isis and send in special Operations Forces and can drones to destroy them. Everything else, what happens next was very vague. He talked about partners on the ground. There is no Syrian Opposition that hes going to work with. The iraqi army that he wants to work with in iraq has effectively collapsed and become a pro iranian force. There is only one relatively small malaysia that is pro american that is working with it is u. S. In iraq right now and that is the kurdish fighters where i am. So we heard this speech. He didnt make many concrete proposals, just that action will be taken and that this Broad Coalition exists. Im not sure who the coalition is or exactly what theyre going to be doing. So Richard Engle thinks no Clear Strategy still. Before that, lululemon q2 revenue has come in at 397 million. Full year 2014 revenue of 1. 78 billion. Its increased that to 1. 8 billion and it says net profit in the Second Quarter was 48. 7 million. Were going to be talking more about lululemon and the fitness craze in just a couple of minutes. Now hadley gamble joins us on set. Mark, as wed hear from our reporter there, Richard Engle, obama still hasnt outlined a Clear Strategy to fight isis. Is that a clear summation . I think its very important to take a step back. If you look at the last six years of the obama presidency, obama came to power and the reason why he defeated Hillary Clinton was its quite extraordinary, he won that war. Now we have the prt going out across the United States ramping up action in the middle east. This really is a very Interesting Development and it does come into question whether or not he does have a longterm strategy. I would agree with some of the points raised by your correspondent in that some have argued this is an emotional action to the beheadings that weve seen and what is the longterm gain the u. S. Has in the region . Hadley, would you think this could become president obamas legacy when he leaves office in a couple years time . Not necessarily a war, but certainly unrest. I dont know that this would be his legacy. It will certainly be part of it. That is arguably why were in this position to a degree at the moment because he didnt want to take care of a problem that many in the region certainly in the gulf countries said could have been taken care of if he had gone into syria over a year ago, if he had done something two years ago. As rich add was pointing out, that didnt work out with the afghanistan situation, with the taliban and the creation. Hiring spendie and not enough time in my kitchen. [ female announcer ] need to hire fast . Go to ziprecruiter. Com and post your job to over 30 of the webs leading job boards with a single click; then simply select the best candidates from one easy to review list. You put up one post and the next day you have all these candidates. Makes my job a lot easier. [ female announcer ] over 100,000 businesses have already used zip recruiter and now you can use zip recruiter for free at a special site for tv viewers; go to ziprecruiter. Com offer2. At a special site for tv viewers; big day . Ah, the usual. Moved some new cars. Hauled a bunch of steel. Kept the supermarket shelves stocked. Made sure everyone got their latest gadgets. Whats up for the next shift . Ah, nothing much. Just keeping the lights on. laugh nice. Doing the big things that move an economy. See you tomorrow, mac. See you tomorrow, sam. Just another day at norfolk southern. Welcome back. Lets give you some headlines. President obama unveils a strategy to combat isis, authorizationing air strikes in syria for the first time. Lululemon delivers a win for investors. Revenue beat expectations. And the smartphone wars are back. The iphone 6 launch prompts at t, sprint and tmobile to roll on new promotions. Cnbc speaks scloout exclusively to sprints new ceo later today. Now, an apple a day may keep the doctor away, but a new apple iphone is atrablthing a number of offers and promotions from Wireless Companies in the latest round of smartphone price wars. Courtney reagan is at cnbc hq for us with all the details. Courtney. Good morning. The big u. S. Wireless carriers are now ramping up their promotions in the face of the new iphone 6 release in an attempt to take customeres from each other in an already very saturated market. Tmobile will let customers seamlessly switch. The iphone 6 allows people to resume carrier networks. Current tmobile subscribers can trade in their devices for phones with wifi activity when they sign up for a new program. Tmobile says it added nearly 3 million customers in august, the biggest increase in company history. Mean wile, verizon is offering a free iphone 6 in return for a twoyear contract when you trade in your old phone. Customers will get a 200 gift card to preorder the version of the iphone 6. The offer doesnt apply to the bigger iphone 6. At t will give customers a 300 credit and a free iphone when they trade in their older models. Sprint announced a new program to allow customers to lease the latest iphone 6 and get the latest and greatest iphone every year. Walmart will sell the iphone 6 for 179, the iphone 6 plus for 279. Thats 20 less than apples prices for the phone. Checking in on shares of all of the Companies Involved in the smartphone wars, it does look as if its a mixed picture with version ryan trading lower. Gogo up 5. 75 . Google up 1. 1 and sprint up almost 7 . Coming up on squawk on the street, david faber has an exclusive interview with the new sprint ceo at 9 00 a. M. Eastern time, marcelo claure. We also have the details of the lululemon. Youre a fan of the brand. Do you think the share price can get off the mat now . Its hard to say. Theyve really had some struggles. I think the other problem is they arent in a replacement cycle like they might like to. Once you have a 90 pair of yoga pants, how many more do you need . Indeed. I didnt even know they were 90. That seems incredibly expensive to me. As we said there, yogamaker lululemon has revenue at 390 million, slightly ahead of forecasts. Lululemon shares have had a rough ride this year down nearly 35 . Joining us now on the line from new york is paul lidgeway at wells fargo. Paul, these numbers have come in slightly ahead of expectations. Have they dlifrd the type of things youre looking for . It walls a little better than expectations. Were looking for 31 cents. So we were a little above the street coming into today. And they did beat slightly relative to that. It looks like a little bit better on the top line. Gross margin is seem to come in in line. So i think most people, you know, in the context of everything thats going on with lulu, i think theyre more likely to look at this as a fairley in line number, but feel good this that things havent gotten worse from the last quarter. And touching on what courtney said, once someone has bought a pair of 90 training pants, will they need another one . In the last set of results, the traffic coming into stores was up, but the convergence was down. Do you think thats a real risk for them moving forward . Do they need to deliver new products in order to drive sales momentum . Thats what theyre telling us. It seems a lot of the pressure theyre seeing in their business is on the core onific basic side. What theyre telling us is they need to be better in seasonal product, which i think is a another word for fashion and thats because they feel like they need to have more newness to drive people into the store. Its not necessarily a bad thing. You know, from the customers perspective. But from a Business Model perspective, when you look at the margins on the basics or a core business versus a fashion business, tends to be better on the basic side. So its not a good thing that lulu is having to do it. But i think that they are making strides in getting it done. And, paul, lululemon has only recently come to london. I was looking on their website this morning and their tag line for Mens Clothing was love sweat, hate stink. To Companies Like lulu, do they have genuine technology in their clothes that make it better in other brands or is it just about the branding . No, we think its a technically superior product, i will say that. I think at the end of the day, it is a strong brand. But they have better function in their product than most of the competition that weve seen out there. So i think thats one thing that they certainly have moving in the right direction for them. Its having that great fashion and marrying it with fashion. What are the other best ways to play this . Lululemon, as we know, shares have underperformed. Is that a good stock way to play it or are there others that you prefer . Were northeast neutral on lulu. As the market in general and as the Growth Continues to outpace growth in most other cat dpoers. But because theyre the ones with the target on their back, there are a lot of other players coming into the space that we think might be a better way to play it. One name we like is gap. You know, athletta is a business that they run thats growing rapidly. In the u. S. , theyre going to approach to having 100 stores this year. We think at some point they take that brand global. And its not a huge piece of the overall gap portfolio, but we think it adds something to gap from a Growth Perspective that makes it a little bit more attractive than it otherwise would have been. And throughout the show, weve been asking you, what do you think about the latest fitness crazes . Does sports wear have to be fashionable . Josh tweeted in earlier saying lululemon is a fad. I buy a decent pair of shoes and wear an old tshirt while working out. Get in touch by email, worldwide cnbc. Com or via twitter or direct to me. If its noon and youre having a craving for an egg mcmuffin, dont threat. Mcdonalds maybe extending breakfast after hours. The fast foot food giant has filed a trademark registration for the phrase mcbrunch. Analysts say any mcbrunch program would likely be limited to weekends and holidays only. Now, u. S. Markets make a slow and steady climb higher with the tech leading the way. But the gains look short lived with futures called lower. Well preview the trading day in the United States after the break. Imagine the luxury. Of not being here. The power you want with the fuel economy you dream of. Performance with a conscience. This is volvo innovating for you. Open port twentytwoohoneseven on the firewall for customer db access. Install version twopointthree of db connector and ensure verbose flag is set in case of problems. clapping sound isnt the cloud supposed to make business easier . Get the one that can connect to the systems that you already have. Today theres a new way to work. And its made with ibm. Welcome back. Lets have a look at european markets. They opened stronger today. Up 0. 5 today. France is now down 20 basis points. Germany just up, it had Inflation Numbers in line with expectations earlier. The ftse 100 down about 10 basis points. U. S. Futures expected to open down today. That is following strong gains in the u. S. Overnight. Sorry, yesterday. The s p expected to open down 4 points. The nasdaq expected to open down 11 points and the dow expected to open down about 37 points. How do you make money . Weve had a longterm starting that weve been running a short on euro dollar. That still seems to be very much in view. We think oil l outperform gold on a fundamental basis. The fed is going to turn more hawkish. Theyre closer to finishing their policy than some other Central Banks. So i think thats bullish dollar. Joining us now is hank smith at haverford investments. Hank, i know you say subaverage Economic Growth is, in fact, a good thing for markets. Well, absolutely. Because you dont have the risk of creating any excesses whether it be inflation, whether it be inventories. Excesses that often lead to the risk of a recession, a threat of a recession. So you feel right now you have this goldilocks environment where you have enough growth that the risk of a recession is very low, but not too much growth that you have to worry about any overheating and the fed can keep in position with this low interest right environment. It is a Good Environment for equities. Theres enough growth for profits and that is really the mothers milk of the stock market. So in this environment, we say buy on the dips. Well, hank, you said theres no excess. Surely this market rally has been built on the biggest excess of all time and that is printsing huge, huge amounts of money. Well, ill tell you, for many, many years b now, everyone has been a critic of fed policy. But the reality is Monetary Policy has been absolutely appropriate for the environment that weve been in. And what doesnt get enough credit, wilfred, is the fact that this bull market is born of fundamentals. It is born of earnings growth, confirmed by dividend growth. Yes, fed policy has been helpful, but its really ultimately about fundamentals and the fundamentals have been strong. And so, hank, what factor would you look out for that would make you change your mind on that . Well, look, here you have the traditional sign posts that the risks of a recession are rising. Accelerating inflation, we dont have it. Rising inventory ratios, we dont have that. Hank, im afraid im going to have to go. Apologies on that, hank. Thank you very much, hank smith. Still to come on cnbc, an exclusive interview with the new sprint ceo. Ill be back at the same time tomorrow. Im wilfred frost. Thanks for tuning in. Goodbye. Good morning and welcome to squawk box. President obama delivers his plan to intat the isi group and taking his time to comment on the economy or lack thereof. Waiting o fed, the meeting may be days away, but the markets are focused on the Central Banks next move. And america remembers, 13 years later, the nation, again, stops to mourn and honor the heros in the fallen from 9 11. Its thursday, september 11th, 2014. And squawk box begins right now. Good morning, everyone. Welcome to squawk box here on cnbc. Im becky quick along with joe kernen and andrew ross sorkin. We will hunt down terrorists who threaten our country wherever they are. That means i will not hesitate to take action against isil in syria as well as iraq. This is a corporal of my presidency. If you threaten america, you will find no safe haven. We will break down what the president said and talk about the military options on the table in just a few minutes. In the meantime, lets take a look at the markets. Stocks closing off the highs of the session yesterday