Transcripts For CNBC Worldwide Exchange 20140915

And the greek finance minister says buyers are lining up to snap on assets in his country. Investors do see that theres only upside potential in the country. The economy has stabilized after a lengthy recession of about six years. So their bet, i will succeed. Youre watching worldwide exchange. Bringing you Business News from around the globe. Hi, everyone. Im seema moody. Coming up on todays show, hear why they believe alibaba missed an opportunity with its london, i po. And we go shopping to look to add to your portfolio. And Jeffrey Suleman is joining us for an exclusive interview. Find out what he thinks is next in the pipeline. Youre watching worldwide exchange. Bringing you Business News from around the globe. Welcome to the show. A lot on the agenda as we look ahead to the fed meeting on wednesday talking about the alibaba ipo. And we have a new member to the team to introduce. Very exciting. And that member knows a thing or two about m a. You have covered a lot of this action in the u. S. Welcome to the team, seema mody. Thank you. Alibaba is expected to price later, so we have a lot to talk about. Jeffrey suleman will join us later in the show to give us all the details. Lets head back to one of the top stories. As we enter the final days in the runup to the Scottish Referendum, the latest polls show the race is too close to call. Three polls put the no campaign ahead. One gave the yes camp a narrow lead. And the u. K. Prime minister David Cameron will today make his way back up to scott land in a lastditch attempt to save the union. Cameron is expected to say a yes vote is a oneway ticket. This is scotlands first minister trying to keep up the momentum his campaign has enjoyed in recent weeks telling voters the referendum is a once in a generation opportunity. We have the founder of drag economics and the Reuters New York Times columnist here, we are privileged to have you with us today, alex salmond is here, what is your expectation with this vote . I think the markets are wrong because they have not sold out sufficiently. If the vote goes yes, in other words for independence, i think theres a really very large downside for sterling and for any other assets that are linked to british politics in some since. But even if the vote goes no, especially if the margin is narrow, which is by far the most likely outcome, i cant see an upside because what has happened over the last two weeks is still going to be extremely destabilizing, not just for scotland but for british politics. So this is very much an argument, not based on the british currency but on british politics and the uncertainty it will create . Absolutely. If scotland will vote to stay in the union, which is more likely than not on thursday, this has been like a neardeath experience, not just for the united king come as a country but especially for the government. And i would say particularly for the conservative party, because although the conservative party would gain marginally in terms of electoral tactics by getting rid of scotland with the 40 mps, it is a conservative party. And the idea of a conservativeled government presided over the breakup of the United Kingdom is an incredibly traumatic experience for the conservatives. Therefore, if we can stay with cameron, the concessions hes made already on the diva max proposition to give scotland total fiscal freedom is really going to undercut the Austerity Program to get reelected. So i think the chances of getting reelected have substantially gone down between now and the may election. I feel more worried than the implications for the u. K. Than the rest of the eu. The yearning for independence in belgium and parts of italy, should we be looking at a big rethink of europe overall . I think we should. The only reason i didnt mention it was i was trying to not go on for too long. But youre right from a global perspective and european perspective, if scotland votes for independence, it has a big knock on it. The scotland, on the other hand, i would say that if the scottish vote goes for the union, which is more likely than not, then even if its by fairly small margin, to some extent it may discourage the immediate thrust for independence, for example. Well be back with him shortly to discuss other topics. Happy m a monday, everyone. Lets look how the markets are faring one hour into the trading. We are down by a third of 1 . This is in part because theres caution ahead of the fed meeting later on this week. The Scottish Referendum, of course, but also we have pretty disappointing china data over the weekend. Well get to that in a second overall putting pressure on the markets. I want to show you what the markets are doing one by one. We have the dax down by 0. 1 . The ftse 100 is to the tune of 0. 14 and is caution across the board. Well talk about some of the big m a stories keeping us busy today. Nobel biocare in switzerland is down this morning. Thats a premium close to the close of july 2019 when it confirms early talks about a sale, but why are we seeing a slump in the price today . And lists were hoping for a much higher price, some north of 20 franks a share. Well look at the bond market as last week we saw the biggest increase in u. S. Yields in more than a year. The tenyear treasury tracking higher, well above that at 1 level at 1. 09 . And very quickly in the currency markets, its going to be a fascinating week for currencies, specifically for the dollar. We are expecting this change in language from the fed. And in anticipation of that, we are seeing a rising u. S. Dollar. We are seeing euro dollar at 1. 2933. Not far from the 13month lows. Dollar yen is range bound close to sixmonth highs. Japan is closed today, so a little less volume in this pair. And the victim of the up winding of the karat trade is down 0. 49 . Lets check on the markets now from singapore. Sri, nice to see you. The japanese respect the aging days. Lets talk about the china markets where all the stress is. Of the weekend, we got the data done for the month of august. And the standouts, the negative standout, i should add is that factory activity did slow to its slowest pace in nearly six years. So the stimulus drums are beating quite loudly in china and only seems to be shoring up the shanghai comp sit. Remember, the australians are so dependent on what goes on in china with the economy in terms of trade, so heavy losses for the cax 200. It slipped below u. S. 90 cents, so thats the lowest since march. A lot of risks still out there on a global basis for our markets, but overall quite a rough day. Remember, carolyn and wilford, we are in a strong dollar environment. Thats bad news for asia fx. Back to you now. Sri, thank you so much. Now in other news, heineken is trading higher after the approach of sab miller for a possible takeover saying the offer was, quote, nonactionable. The family owns just over 50 and informed the brewer they want to keep their independence. Here are more details. Everyone watching this sector will be frothing at the mouth because again this talk of consolidation and why is that interesting . Because this is a sector that is really right for it. Everybodys been talking about sab possibly being a stalk that might be taken over by the much bigger player abi. That looks like it might be turned on its head because sab has gone in what some insiders are calling a desperate attempt to protect itself from being a target for abi to have a look at heineken, but remember, like all brewing companies, youll notice if you follow the sector, they are controlled mostly by the families that wont give up control. And the family, they own 50. 1 of heineken have said it is nonactionable, but this is substantially putting s b miller in play. That share has gone up. Today on this news its up over 5 because people are thinking, what does this mean for abi, and does it mean that heineken might be saying, look, we would like to do a deal but wait to be scavengers because we see a deal where abi buys sab and then when sab has to sell off interest in coors, well be there with a cheaper price and ready to do the deal. So lots going on in the brewing sector. A up twoing story well continue to watch. Sticking with deal news, global phrma volumes have hit a record high of 261 billion dollars so far this year. That is according to deal logic, but could more deals be in the pipe line . Well be speaking to the ceo of cowen co. Company. Email your questions to us. And a slice of the alibaba pie is growing. More from the hong kong leg show after the break. Welcome back. Alibaba continues its twoweek pitch to potential shareholders with the ipo outpacing expectations. The companys founder jack mott faced questions over the decision not to list in hong kong. Listen in. People say that hong kong lost the alibaba deal. To me, alibaba missed this great opportunity in hong kong. And i think maybe its because of our incapable communicating with hong kong. And i believe hong kong is changing. And in the past 15 years, i love hong kong and will continue to love hong kong and invest in hong kong. What well do in the future is give hong kong more Business Opportunities and create more Business Opportunities for people in hong kong to develop their career in china and in the world. And i speak from my heart. I love hong kong. Lets bring in a guest now to talk about the alibaba ipo. Jackson wong, you have been following this ipo closely. So much interest in alibaba given it has dominated the Chinese Market, but it is still not wellknown globally. When do you think alibaba can replicate their success in other countries . Well, i think alibaba is not in a hurry to replicate their motto in the u. S. But i think they can do that once they commit to china. But for now i think china still has plenty of room to grow. And since they have been doing so well, i do not think that they need to dominate u. S. Or the other markets just yet. But i think they are thinking about that. In china they can still grow at a third per year in the next five to ten years. I think its still a very solid growth company. So i think probably down to the road a few years later, once they have everything set up in the foreign market, especially in u. S. , i think they will go ahead and take on amazon. Plenty of reports over the week are that books are closing early and under writers are looking to raise the price or widening the bend. Do you not think that underwriters and investors are getting carried away by this . Well, we remember facebook, the Lesson Learned from there that they did widen the band and raise the total ipo amount. And for the first day, it was okay. But then three months later it did not perform well. So i think alibaba from the sentiment, they could raise the ipo size. But i think they are seriously thinking about letting it as is because, you know, they would like to see a blockbuster ipo and they would like to see power on the first day. Now the rumor cries would be around 70 to 80 on their first day, but if they raise their band to around 70, its still looking like it has room to grow, but not as openthusiastics other stocks. Do you think yoku will Gain Momentum once alibaba goes public or will they suck the life out of other stocks . I think both scenarios will happen. If alibaba can perform so well, it will lift up the whole sentiment for the chinese internet companies. If alibaba will only do well on the first few days, i think a lot of funds would have to advance their portfolio and probably have to sell some of their position in the chinese internet companies. So it depends on how big the ipo or how successfully alibaba can list it in the next few days. But i think, in general, alibaba will not survive out of the chineserelated internet companies. They can probably alibaba will probably suck the life out of amazon or ebay other than the Chinese Companies. Jackson wa, thank you for your time. The ceasefire between prorussian rebels and kiev troops has come under pressure after the shelling of the donetsk airport. Nato meshes have started to deliver arms to help soldiers fighting with separatists. The ukrainian currency has plummeted 60 this year as the conflict with the rebels took its toll on the economy. Steve sedgwick caught up with the governor to discuss how much Economic Conditions have worsened since the imf agreement. First of all, it was a first review in july. And initially the program applied 5 gdp and deterioration in the program is minus 6. 5, but unfortunately right now because of really drastic deterioration of Economic Conditions, i suppose well revise the program and i suppose that it could be minus 9 or 10. Still with us is amsol, as things stand, has putin won . I think so, yes. And actually, i think thats good news for the markets and for europe. Because this was a struggle that putin was never going to lose, that russia was never going to lose. So the question was always whether there would be some kind of settlement. The ceasefire has held despite the erratic violence. So this could lead to a prolonged and really destructive war, which russia was only going to lose if nato intervened. But they were looking either at the negotiated settlement or essentially a world war iii. So in that sense, i think it is better that putin has won. I cant believe why you would be saying why putin has won, because there are significant record lows against the dollar. We saw huge capital outflows. They cannot easily be reversed. And then we also saw inflation very, very high. That has take an toll on the economy. And the oil price is not necessarily helping, so what exactly makes you say that from the Economic Perspective . From the Economic Perspective it is very costly and they have lost, certainly in the shortterm for all the reasons you have given. What im talking about is the geopolitical contest over whether ukraine would become not just a fully independent country but a country that eventually in the foreseeable future becomes a member of the eu and the lives of nato. And that was a struggle on which the russians were willing to spend a very large amount of their economic prosperity, that certainly happened, they have lost that, but politically they have won. The other point i would make is that i think in the long run this may not be as bad for russia as you suggest. Because what it does is it forces russia to become more selfreliant. To some extent, it will become more of a protectionist nation. That means it will follow a Development Policy closer to that of china, brazil, india, other large emerging economies than it has done so far. And that will perhaps help it to get away from Natural Resources. And moving to the russian markets, do you think well get a meaningful change in the fed rhetoric this wednesday . I dont know. Im not on the committee. Unfortunately, perhaps, for the world, not just for me, but i dont know whether there will be my guess is there actually wont be because i think yellen, stan fisher, the vice chairman of the key operators of the fed, i think they are quite bullish. But i think there will be a removal considerable period of zero Interest Rates after the end of qe next month, even if there is a removal. I dont its going to signal any chipd of change in the fed policy big enough to have a macroeconoming impact. We are talking about a quarter point rise in Interest Rates which may be brought forward by a month or two or pushed back by a month or two. This doesnt really make much difference to the broad structure of the world economy. I think actually what the ecb is doing, what is going on in europe is potentially more important. And the reason we are seeing bond yields all over the world go up in the last three weeks has not been because of wednesdays fed meeting, but its been because of the apparent change of policy of the ecb that was signaled by mario draghi. What about evaluations, i just moved here from new york where my focus was mostly on the u. S. Equity markets. Some say that the rise in the u. S. Market banks the question that evaluation at some point will become a certain. Some say thats the rise in rates to put a lid on stocks. What are your thoughts . I think the evaluations will become a concern. I think we are much more in an evaluation driven market than the macro and monetary driven market over the last five years. I think they will become a concern. I think over the next 6 to 12 month there is a serious risk where evaluations go up quite dramatically and crash like they did in 1987. But what has been tested and proved very clearly over the last several months is evaluations as they are today, even in the u. S. , although they are above average are not yet high enough to trigger the kind of really big correction that many people have been waiting for and been nervous about. Youre in response of pretty big shocks. There have been pretty big shocks over the last six to nine months. They have triggered corrections of 4 , 5 , 6 and then rebounded. Before we get a big correction of 15 to 20 , evaluations will probably have to go up before they go down. And a lot will ride on this weeks meeting. The founder of dragge economics, thank you for your time. Still to come, well speak to Jeffrey Suleman and get his version of tax aversion and m a. Youre watching worldwide exchange. Bringing you Business News from around the globe. Too close to call . Polls provide little clarity on which way scotland will vote at the number of reports suggesting economic gape is on its way for both countries if the interest splits. And sab miller and heineken lead the way after the dutch brewer rejects a bid from its rival. And biocare slumps after analysts suggest it may have sold itself too cheaply to u. S. Health care giant. And the greek finance minister tells cnbc that buyers are lining up to snap up assets in his country. The investors do see that theres only upside potential in t the country. The economy stabilized after six years, so their bet, i will succeed. All right. Well have a look at the your mean markets. The ftse 100 is just flat now. Keep in mind, the shares bucking the trend are heineken and sab miller. The xetra dax is eking out a ga gain. And if we look at bonds, a steady improvement in the u. S. Mac macro data has pushed up the yields. The gilts are at 2. 55 . The upgrade came as the ministers gathered with Structural Reforms as a top talking point. According to reports, the greek finance minister they are veeped during one discussion to point out his country had been congratulated by the oacb on economic changes. Annetta was at that meeting and has more on that for us now. Thank you very much. I spoke to the greek finance minister exclusively and indeed he was quite proud that he was named by the prime example to push for reform, but also he was saying that it actually helped to have the troika in play. Take a listen how bullish he is about those privatization efforts. This is as needed cash abroad. And the one way to attract that is through investments. And one vehicle is privatizations. We would have seen theres a lot of interest in the airports, in the ore companies. Theres people lining up now to buy assets. We didnt have this experience earlier. Now we have it. This is because investors do see that there is only upside who ten initial the country. The economy is stabilized after a lengthy recession of about six years. So their bet, well succeed. You sound like a man who does not want to have his country under another program. So are you expecting the country to need another program . Look, the program did have benefits in the sense that the lenders forced greece to actually do Structural Reforms. But at some point after you do the reforms, after one, two, three years in the ucb rankings on new reforms, but after a point one needs to do this on their up. And to me, structural reform is one which should be vigilant. And it should be owned. And for them to be opened, you have to seek cash in the pocket. You have to associate the reforms with the benefits of the expansion thats coming. And where are you in greece from that way from zero to ten, how much do nongeek people really endorse those reforms . I think they do. They have seen prices come down with shops opening over the weekend, and frankly the greeks have matured as individuals. They have connected the expenditure of the government in other given ways with their own taxes. Finally, they know that they have to pay for the government expenditure. This is an amazing maturity for a population that were suffering. So the top headline from the meeting is that Everybody Needs Structural Reforms and everybody was also singing to the tune of the ecb. As marco draghi the week before went out with the assetbacked security. I. Resources from investment will mostly come from the private sector. Of course, they will be instrumental in lerming them, but we are looking for possibly incentives and better use of public money in public budgets. So the resources are really important but are not the only one thing we have to worry about. And let me stress again, its up to governments to facilitate private investment. Most economists in germany would agree at the loss of trust and the subsequent Economic Impact of moving away from the policy would be much worse however they would be financed that we could make. Thats why im ready to argue with any economynist this world about how we can spur growth in germany and how we should not do it in order to not destroy it. We have post, private and puck lib investments over time. We should not impose them. So we need to work on developing private investments including the public support. Thats what we wanted to offer as a common project. The french and german positions are the same in either investments. So the key takeaway is everybody wants to have private investment cash coming into the eurozone in order to invest here, but also theres the question over whether there are enough projects which are actually having a good return in equities. And thats one thing the European Investment bank is now looking into according to the finance minister of germany. And hell present a list of projects until the end of this year. For that, im sending it over to you, see ma. Annetta, thank you for that comprehensive report. Switching to currency, the aussie dollar has fallen following china data that beijing will lawn ch fresh stimulus measures. Peter frank is head of fs strategies. Which does the aussie dollar head from here if china continues to slow down . It has fallen to sixmonth lows overnight and i think thats an indication of concern that the Global Economy is not growing fast enough to be sheltered from any further slowdown in china. Now, behind the scenes in china, theres a lot of money pumped into the economy. So we would expect a weak patch will be out there for the next month or two and could drive it down a couple points against the u. S. Dollar. The u. S. Dollar has moved quite a ways compared to the aussie dollar. They have also got huge amounts of Natural Resources for relatively a small population n that being an assetbacked security. So hasnt it fallen already . Yes, i think theres still a price decline likely. And the key determination is for them to be looking fairly negative right now. Everyone is talking about the dollar, but i dont want to talk about that but the swiss frank. Last week we saw the verbal mention of potentially negative Interest Rates. Do you think that will actually happen, or will it just stay with verbal intervention or will we get the preemptive strike . I think it is more than verbal intervention. Within the last ten days, i will see it get to the 1. 20 floor that was very brief for a few moments in the market. I think they will be more than verbal but will be pushing up the euro swiss and the dollar swiss higher. Of course, the negative rate is something they can do. It is a last resort. I think they only do it as the floor is broken. As long as the floor doesnt break, they will shy away from it but there are dire warnings of the threat in the meeting and the announcement after the meeting. Peter, another currency watching is the indian rupe. Where do you see this head from here . It used to be fairly stable against the dollar. India is one of the economies that seems to be recovering now just at the same time as china is weakening a little bit and japan has fallen off the radar screen as far as the key Global Growth provider. As long as the u. S. Recovery is strong and the chinese growth doesnt slip much further, then the rurpee should trade in a god range. Well leave it there. Thank you so much for your time. Swedens left wing social m democrats came out victorious on friday. Electors punished him for his attempts to reform the state from the antiimmigration sweden. They surprised pollsters with the party taking 13 of the vote. Well have a look at how the currency is performing this morning. It is essentially flat now but we did see some weakening in the currentycy against the euro before. It may take a couple weeks to form the coalition. And still to come on the show, cnbc gets backsame access to top London Fashion show. Find out what phillip green is posing per the global expansion. Stay tuned on worldwide exchange. And before we get to scotland, we have a couple flashes out of russia. The russian Prime Minister said russia is ready to comply with all agreements with the eu regarding the ukraine Peace Process. Weve also had another flash that says russias president putin has discussed the Peace Process with the security council. Well bring you more on that when we get it. Moving back to scotland, the u. K. Prime minister David Cameron makes his way back to look at the yes vote being a oneway ticket as they try to keep the momentum gaining traction in receipt weeks. Hes told voters the referendum is a once in a generation opportunity. Investment Advisory Firm cross border capital says investors pulled 17 billion pounds out of the u. K. In august on fears of a split. Thats the fastest pace since the financial crisis of 2008. Meanwhile, a u. K. Sunday times report says scotland could face a funding gap of 5. 6 billion pounds in the Pension Scheme if the country votes for independence. Well get back to the u. K. Business editor, even the queen has weighted into the debate. You know when the queen is not amused and its all going wrong. Look, we had private comments from the queen on the weekend, but i think that they are pertinent because it is getting emotional. This is a referendum that will be decided it seems not on the economy, not on the face of the 17 billion that may be pulled from scotland, but really on scottish peoples sense of identity. The interesting fact, there are only 6 million scots in scotland. There are 18 Million People around the world who identify themselves as scottish. But just a quick note on the ipo that is interesting, weve had a lot come back from the yes campaign about scare stories. And weve had recent comments from the supermarkets talking about prices going up. But the rbs story really highlights what is simply fact, which is that if you create a border under eu rules, Pension Funds have to be fully funded. And in the case of ibs, that would mean a 5. 6 billion black hole. But all means, rbs is not alone. U. K. Businesses have massive Pension Funding gaps and to create a situation where you have a different country has very kind of complex implications all across business drones. This potential divorce between the u. K. And scotland it could end in happiness. Whats the biggest fear out of all we have been talking about, the split of debt, your thought there is . I think that i cant speak for the scottish people, but i think for the general fear that i come across that its going to kick the u. K. Backwards, remember that this year has been a very good year economically. The u. K. Is growing over 3. 1 . Gdp is going to create such risk and instability. Its going to knock not just the Big Companies but really the smes that will be stifled by this. So it could be a good thing in 20 years for the scottish identity, but i think most people would agree its going to be hugely disruptive to the u. K. Economy. Thank you so much for that. And heres something that the scots could be missing out on. Designers and fashionistas around the world flocked to london for the fashion week. Amidst all the blogging and selfie taking, Serious Business will get underway. Orders worth more than 100 Million Pounds are placed during londons fashion week each season. Tanya brown caught up with the top shop brand among many others and began by asking how the expansion into china is coming along. We are just getting our time in the water with the start. I think the decision was to start more focused with a Smaller Company as opposed to the goliaths, test the water to see how we do and we can be close to it. So its a start and well develop china, its just a measure of how. What about new york because youre opening on fifth avenue very soon . Well, new yorks always a challenge. So its hard work. In america, new york specifically, the first time we opened, it was a big, big challenge building there. Its torture. You want to move something, you need a permit, its just the hours, when they can, they cant, they might, but it is hard work and we have to. We have a big plan for the opening, so its our biggest, second biggest street in the world. So we have to put our best foot forward, so we will. So how is it to be the new face of top shop . It is incredible. I have my friends sending many me pictures kissing my face. What is it like to work with philip . Its a pleasure. I want to take some photos, i think it would be fun. Its been wonderful. What does it mean to have kara for your brand . Well, i think its good that kara is here. Obviously, there was a lot of discussion. I wanted kara and i think it is important she wanted to be with us. It has to be both sides, you know what i mean . Yes, hopefully the people i have worked with, its about building a friendship, not just about work. Therefore, i want to be able to help kara and do what i think is right for her. And the support is lovely. I think it is so important to have that kind of relationship. And kara is coming to new york. So, obviously plenty to buy for your wardrobe at fashion week, but should you be eyeing the luxury designers for your portfolio . Carolyn and seema have been shopping around. Here are the european names in terms of year to date performance. Burberry has been a headache for investors because shares here today are up 1 and has been underperforming the rest of the sector. Why . Because of the strength of the currency here in the u. K. Well, that in effect should be waning in the runup to the scottish elections, but we have seen a transition in japan and thats why the shares have been lagging somewhat. And its worth noting that kering owns sarah mccartney, gucci, very important names at London Fashion week. And vmh up 3 so far year to date. Mark jacobs, louis vuitton, featured household names but just now took a stay in jw anderson. Interestingly enough, carolyn, a slightly different screen when you look at the u. S. Retail stocks despite the economic recoverfully the u. S. The consumer is still a bit concerned for investors and that can be reflected in some of the big retail stocks. Raffle lauren down 1 year to date recently announcing a dividend in an effort to capture the tech fashionistas. Another big loser this year has been cove. Shares underperforming due to weak north american sales. But the Fourth Quarter earnings did Beat Estimates thanked to Higher International sales from china. Coach also said it sees china sales rising 20 in the fiscal year 2015. And michael kors is known for handbags and accessories targeting the middle class. They expect markets to shrink in 2014 investing in expansion in europe. Interesting given the slower than expected recovery in the eu. And madeleine, the luxury and list at research, some people are getting concerned that the trend in lurk surery is slowing down but you see a difference between the ultrahigh end and the aspiring luxury. Yes, i dont think the luxury market is going anywhere any time soon. The number of luxury consumers is expected to grow considerably. And as you mentioned the aspirational lecture, customers see this particularly relevant in emerging markets with the massive growing middle class who are looking to just luxury products. The Economic Growth story here in europe still up for question given the recent data we have been getting. Italy back in recession. How does that impact some of the luxury retailers across the region . Theres i think it definitely affects the number of tourists coming to europe to spend. That also is relevant for devaluation of many currencies, local currencies, and theres been a downtime for the nationalties including the russians and thais coming to europe. However, the Chinese Market is still shopping in europe and retailers are confident with regard to it. We are seeing luxury firms very active in the online world, but are they emphasizing that too much . Alibaba is now active. Is retail being neglected by the big firms . No, i dont think so. What the firms are striving to do is to combine the Digital Initiatives and retail stores. Its very important that fans offer an omni channel experience with the consumer number one. You might be very interested in this, but the version of menswear is a moneymaker for the label, did you know that . I didnt know exactly but im interested to hear more. Actually, growth in the u. S. May be outpacing that of womenswear. Is everyone on board or who is the leader in this field . With regards to which countries are buying menswear. Well, definitely menswear and gifting as well, you will see a lot of hard building build iing this i want to talk about online spending with luxury. I find it hard to maam if youre buying a really expensive clothing item that people dont want to go in and try it on. Surely online is not as high of a driver for more expensive items. I think it allows people to research the product. I dont have statistics in front of me but it is interesting the number of people who researchline and go into the store to purchase their product. Once you are in the store, you have the whole experience and somebody there to look after you, everything is all about you and i think thats kind of encouraging sales going forward. Thank you, madeleine. Wilfred, tax aversion, m a and more. Well speak exclusively on the next three topics coming up, stay tuned. Welcome to worldwide exchange. Im seema mody. Investors brace for a change in fed Forward Guidance later this week. Its merger monday. Snp miller and heineken reject a bid from their u. K. Rival. And a flood of orders for the Company Shares to lead the ecommerce giant to up the size of its ipo and increase the share price. Too close to call. Polls provide little clarity on which way scotland will vote as a number of reports suggest economic pain is on its way for both countries if theres a split. Youre watching worldwide exchange. Bringing you Business News from around the globe. Im carolyn roth. Coming up, billionaire bill ackman is hoping to raise 2 million through an amsterdam listing. Well bring you all the details. As fashion fever hits london, we go shopping for the luxury stocks to add glitz to your portfolio. With. Merger monday in full swing, we speak to one of the top deal makers. Jeffrey solomon, cowen and companys ceo, find out what he thinks is next for the pipeline. Youre watching worldwide exchange. Bringing you Business News from around the globe. Welcome to the show this morning. But more importantly, well some seema mody to worldwide exchange. How am i doing this morning . So far so good. I hope people at home agree. Well be talking mna in a bit, but looking ahead to the fed meeting on wednesday. That could have an impact on the markets. Interestingly enough, if you look at the u. S. Premarket trade, the arrows are currently pointing down. The s p 500 is down four points, the dow jones down 11 markets. And the nasdaq had and interesting week of trade for apple down four points. On that note, well dive into the market to see where they are trading at this hour. Youll see the ftse 100 ahead of the Scottish Referendum down about six points on the day. The xetra dax is the clear outperformer with the jer man market up eight points. The french and italian markets are showing red in todays trade. The meeting later this week could have a big impact. Will we see rates rise sooner than expected . Thats the big fear on the street. You know what, seema . Personally it could all be priced into the dollar and treasury yields. We may not even see a big move anymore this week if we do get the change in the language. The yield currently at 2. 61 . In fact, last week the u. S. Bonds posted their longest losing streak in a year. This is of course in anticipation of the foc meeting later this week. The tenyear gilt is at 101. 8 . Well look at the currency markets, its all about the dollar. We are seeing the Dollar Strength just below the 14month high. The euro dollar at 1. 2925. We are not seeing too much there. We are close to the sixyear highs for the dollar yen at 107. 25. And the aussie dollar as we discussed did see a little built of a recovery back above the 90 cent level, but still down by a third of 1 . Okay, well check in on the markets trading in asia. Sri is standing by in singapore. It was all about the china data today, wasnt it . It was. That was a major risk then and it came over the weekend. The markets really reacting to it now. And the standout, the negative standout i might add is factory activity which expanded at the slowest pace in nearly six years. So thats said, a fairly sizable ripple through the markets. Interestingly enough, the shanghai composite is the exception rather than the rule bucking the negative trend in its peers up by. 30 . Perhaps the market is there frontrunning the idea of stimulus happening sooner rather than later because of the worsening macro pitch in the largest economy. Heavy selling on the hang seng. Similar for the asian markets. And the aussie dollar sank for 90 cents. The australians we all know hardwired into the chinese economy in terms of trade. So fairly lackluster session overall right here in asia. Looking at the broadest gauge for fiveweek lows, you are not seeing the nikkei or the topix today with the markets in tokyo closed today for respect the aged day. Look at all the gray hairs, wilfred. Ill be here when im 90 years old. I hope you will be too, sir. I look forward to these discussions in 40 to 50 years time. Something like that. Sri, thank you very much. Well update you on flashes from the oecd that has cut its growth forecast for major developed economies, particular surprise coming in for the u. S. Where data has been improving. It just cut the forecast to sorry. They just cut to 3. 2 from 3. 5 . Its also cut its outlook for the eurozone Growth Numbers to 9. 8 this year down from 1. 2 . And to 1. 1 for next year down from 1. 7 . Quite significant cut there is. Quite interestingly, they are calling on the ecb to act further saying recent actions are welcomed but the further measures including quantitative easing are warranted. I think this will irk a lot of people at the ecb because they said we have done everything we can. Over to the government in terms of pursuing their Structural Reforms. Absolutely. Well look at those later in the show. Now as we enter the final days in the runup to the Scottish Referendum, the latest poll race is too close to call. The four polls published the weekend while three put the no ahead and one gave the yes camp a narrow lead. The u. K. Prime minister David Cameron will today make his way back to scott land in a lastditch attempt to save the union. Cameron is expected to say a yes vote is a, quote, oneway ticket. This is scotlands first minister trying to keep up the momentum his campaign has enjoyed in recent weeks telling the voter this is is a once in a generation opportunity. The Scottish Referendum is definitely a big potential market mover. I know a lot of investors who i speak to in the u. S. Are watching this. Being a top priority for investors. This is how the markets have responded to this, but i dont think this is around the country. It is very much political. Weve got 18 months the if theres a yes vote for the terms to be agreed. The general election is punctuating the 18 months halfway through with so much up certainty as to what the terms of separation will be. And will this lead to other independence movements . We have been seeing thousands pack the streets in barcelona. Thats Something Interesting to watch as well. I think youre absolutely right. Shortterm, it is about whether the pound can fall further, i would say. And we could see a decrease in the currency. On to the u. S. , i bet that janet yellen will steal the show after dropping a considerable time when referring to how long rates will stay at the record lows. Andrew berkeley, managing director at oppenheimer, andrew, you have to look at the reality of the situation. Rates still are low. At one point the rates will rise and the market will see this as a catalyst. Yeah, good morning, seema. Eventually we are moving in that direction as the fed winds down. Its extraordinary measures here. The first step is to get rid of that considerable time. Nobody knows exactly what that means. The market is kind of anticipating this meaning six months, so they could leave it right now and still a sixmonth window would get us furtherer in the market as pricing in, which is kind of the late Second Quarter Third Quarter next year. I largely agree with that projection and think considerable time will probably come off with the fed telegraphing that. Theres some media outlets, but i think thats the next step and really the next step in fed policy is this language, essentially, thats what they have as they wind down via the tape or the bond portfolio. The curve has been moving up with tenyear rates moving up pretty considerably last week. As we get closer to 3 , thats when the markets have started to get into a little trouble, a little volatility with the bonds rallying about that point. But, you know, as long as the main Economic Data is positive it will be a factor. We just had data from the ocd to cut the growth forecast for u. S. Growth this year from 2. 6 to 2. 1 . What is your take on that . Well, my sense is a lot of it is probably the market from the first quarter. They never took down their full year numbers based on the weakness in the beginning of the year. The trajectory we are running in is somewhere near 2. 5 range. When you smooth out all volatility, obviously very weak first quarter. Bouncing back in the Second Quarter, but we have been in the 2 to 2. 5 recovery in the u. S. For quite some time, several years now. And its really been kind of a gold locks environment because its not too hot to remove stimulus but its enough growth to get corporate profits going and pricing power. As long as we stay in the 2 to 2. 5, which is the ecbs forecast, we believe its still in the positive. Thank you. Well look at todds other top stories, the u. S. Maker of industrial and Consumer Health Care Products is buying Nobel Biocare paying 8. 20 a share, a 20 premium to nobles Closing Price before july 29th when it confirmed early talks about a sale. Well look at nobel shares reacting this morning off quite heavily by almost 6 . This is because analysts and investors were hoping for a bigger prize, essentially a much higher one. Above that, a 20 handle. Dara down here in germany is essentially flat. And big ackman is hoping to raise 2 million through and ipo on the amsterdam stock exchange. Ackman has already secured more than 1. 5 billion in commitments from european Pension Funds and less son funds. That will invest in their offshore holdings. Coming up, well speak to the Council Member on tax inversion between wall street and washington. Plus, find out who he thinks will be next on the hit list. Ow that proper allocation could help increase returns so you can enjoy that second home sooner. Know the right Financial Planning can help you save for college and retirement. Know where you stand with pnc total insight. A new investing and Banking Experience with personalized guidance and online tools. Visit a branch, call or go online today. Youre watching worldwide exchange. Lets look at the markets. The dploglobal markets are open in the red. And alibabas ipo could have a pop in appetite. And the scottish vote is creating urn certainty. Mario draghis plan is not the best for everyone else. O one. It liberates liquidity and liberates capital and the balance sheet. In that sense, the Regulatory Initiative is to be welcomed and is differentiated to the taxpayer. This is something different. Thats why i am more skeptical about these initiatives which is why i am interested in purchasing. Andrew, i have to ask, the stark reality facing europe is at this recovery taking longer than expected. But well take the u. S. View on it, how does mcdonalds see itself being impacted by the bigger than expected europe . I think it has been an ongoing issue for a while. Europe started to look like it was coming out of the trough late last year. I think the ceos were starting to get more encouraged. It will be interesting going into the earnings season how they view that now. Obviously, as you talked about a few moments ago, theres a huge currency swing in the past few weeks. Obviously, the dollar is very strong so that will hit a lot of the multinational earnings when they start to report in a few weeks. So overall, youre going to start to see that divergence in the companys tones where its strong u. K. Europe still pretty fragile and the emerging markets are not firing yet. Thats been a story with starts and fitz here. Slowly but surely, we have seen that in the sx base or the equities base, what do you buy and what do you sell . Well, we think in terms of the equity portfolio, the leadership really seems to be the growth areas with reasonable evaluations. We picked him up for the rest of the year. You can find lot of the attributes, but the volatility in terms of the bond market and the currency market, that really is going to impact those bond proxytype equities. So we have already seen that start to play out where utilities reads and telecom no, we think generally rates are going to move higher here. So well be cautious in those areas. Thank you for that, andrew. Appreciate your time. Andrew berkeley, managing director of institutional portfolio strategy at oppenheimer. The Chinese Commerce ipo of alibaba could be the largest one, but is it enough . Well explain coming up on worldwide exchange. Location. Location. shouting location. Heres the location that matters the most. Here. Or here. Or here. Its wherever this is. To get customers to come here and stay here, youre going to need an app that connects to all your systems. So they can bank, shop, do what they need to do, and you gotta do it fast. Before the competition does. Its tough out here; you better be on the right cloud. Today theres a new way to work. And its made with ibm. 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. Alibabas road show heads to china today to pitch to potential shareholders. Heres the report from hong kong where the company was hosting a launch with institutional investors. It was standing room only for the hong kong leg of the alibaba road show where jack hong spoke in front of people to say it was an honor to be back in hong kong. To me, i think alibaba missed this great opportunity to list in hong kong. And i think because maybe its because of wrong time or the incapable communication, communicating with hong kong. And i believe hong kong is changing. Weapon over the past 15 years, i have loved hong kong, i will continue to love hong kong and will invest in hong kong. What we want to do in the future is try to give hong kong more Business Opportunities and create opportunities for young people in hong kong. To develop their care here in the world. I love alibaba. Hes the found irof the ipo desktop. Com. Well talk about the deal, road show is in hong kong and headed to london. Ill be covering that road show on wednesday. What do you expect demand to be like on friday when it does open for trade on the New York Stock Exchange . What is interesting, is this alibaba, we could go on wednesday. Last week they had 800 people. You cant get stock. Its targeted toward institutions. And we think its going to price above the range. The range is 60 to 66. And there seems to be no real price she has done this before. It seems to be all good news for alibaba, but what is your current market risk to their positioning . Its a play on the Chinese Market. They have 80 of the ecommerce market and china, the rate of consumption is 35 and the u. S. Is at 67 . The idea is that it can grow, as the regular consumption will increase and imports go down, i have a report that shows alibaba. If you buy it in the u. S. , you dont know what the sources are or the return policy. This is a globaling gnomic risk. And especially a macro risk in china. What about the microrisks on the decline. We are seeing more competition in rapid growth. They are simply over. Well, the sales from the june water last percent with a lot of us taking our shoes off, you cant continue that forever. Ive never been experienced with them because they are making money. We have a human footprint there with the Free Cash Flow coming up, im not great 60 of the shareholders are going back, but on the other hand, its a capitol intense ity. They have such a wide foodprint. You know, rumor has it that underwriters will price shares higher than the initial range. How important is a suck they want to price this near 10 . There will be a lot of trading. It will be very important for the ipo market if alibaba does well. Right now it is ignored by the Retail Investors and is not targeted toward the Retail Investors and the retail people are not interested in using alibaba. But they will get wind of it if the 22 billion ipo goes up and the institutions are making money. It would be good for the market then. Whats happening now is there are few ipos being fired. Whats happening is the market or the people waiting for alibaba. When facebook was a disaster, i think the market right now is selling at really highs, and if it stays at the highest it probably will and if im successful, theres going to be a lot of people who are motivated by greed to get back into the ipo market. 600 million Internet Users in china and france are out there, this is a story well be watching. And a record high of 261 billion dollars so far this year according to de, alogical. Well speak to the ceo of koun cowen company. And heres a look at how futures are trading ahead of the opening on wall street with arrows pointing to the downside. Welcome to worldwide exchange. Im seema mody. And im wilfred frost. Investors brace themselves for a change in guidance later this week. And most Major Companies are calling on the ecb to launch fullblown qe. And miller and heineken are higher after the dutch brewer rejects a bid from its u. K. Rival. Swiss firm nobel health care is looking to merge with another company. If you are just tuning in, thank you for joining us on worldwide exchange. Heres a look at the u. S. Markets faring in premarket trading. Red arrows across the screen after u. S. Stocks finished down for the week halting a fiveweek streak of gains despite the movement to the downside. You have to point out the s p 500 is still trading about 1 below its intraday alltime high from 2011. Red arrows across the screen ahead of the fed meeting this week. How do you make money in the markets . Heres what the experts have been telling us this morning. We would expect to make it obvious that the chinese economy will recover, but certainly it could drive it down another couple points against the u. S. Dollar in the very near term. I do believe that its still an overweight equity position, overweight risk on the equity side within fixed income. Ive actually put money into cash money markets taking away from governments. The long end of the curve is moving up. We see tenyear rates move up pretty considerably last week. As we get closer to 3 , thats when the markets over the past couple of years have started to bet into a little trouble. A little volatility as you see bombs rally at that point. As long as you make Economic Data robustly, we think thats a net positive in the overall market. Sab miller and hine ken are trading higher after it rejected an approach from larger sab for a possible takeover saying the offer was, quote, nonactionable. The heineken family said it wanted to preserve the groups end pep denindependenc independence. Swiss dental maker biocare is looking to be bought by danaher. Danaher so far is flat on the day. Joining us in an exclusive interview is jeffrey solomon. Thank you for joining us this early in the morning. Glad to be here. Well, we got to talk about the mega deals we have been seeing over the past couple of weeks or months, i should say. Tax inversions, one of the catalysts blow rates and now we see an influx of up flow. Do you believe youll see a dramatic drop in deal flow . Well, i think Prime Minister is buying the lack of growth globally. And a lot of Corporate Investors are taking the opportunity to really ring out cost savings. So i still think for the foreseeable future, we are in and extremely low environment. We need to see the low really tail off. The tax inversions are becoming increasingly popular this year. And just this year in 2014, 55 of all up version deals since 1996. While the market is applauding these deals, it is drawing a lot of critics. At what point will u. S. Regulators step in to change the way the deals are looked at . Well, i would certainly think its something they have to look at broader in terms of a broader tax reform bill. And i think thats something that has been kicked around for a while. Its going to be hard to do something in a oneonone basis. So i think it will be a little while, but what we are seeing with the activity in washington that really tries to go at tax inversions. But in the near term, you are not going to be seeing anything. Over the long term a deal on the new tax code n the meantime, do you think the up stayation l the media has made a lot of it and its an issue in washington, d. C. , but we are not seeing a lot of companies today move away from it specifically. I just think its part of the overall tax plan that a lot of corporations have been following. So i dont expect there to be significant change. You have to be more politically aware today than you have been and certainly a consideration where six months to a year ago it wasnt. Jeffrey, sit tight with us as we want to talk more about the ipo market as well as the health and tech sectors. Still to come on the show, cnbc gets backstage action in london. The top shop events. Stay tuned on worldwide exchange. Theyre custom made trains. You cant get any better than that. Siemens trains are not your grandparents technology. Theyre something thats gonna change the cities we live in today. I find it so fascinating how many people ride this and go to work every single day. Im one of the lucky guys. I get to play with trains. People say, wow, we still build that in the United States . And we say, yeah, we do youre watching worldwide exchange. Welcome back. Well continue with jeffrey solomon. I have to ask, we have what could be the biggest ipo ever going public this friday on the New York Stock Exchange. Alibaba, really interesting to see the change in sentiment. If you looked at chinese stocks two years ago, a lot of investors were cautious when it came to a lot of the names due to transparency issues, but tables seem to have turned and now people are more receptive to the idea of investing in chinese stocks chachlt has chan stocks. What has changed in your perspective . Well, alibaba is an enormous company of all sizes and a lot of the company that is became public in the first wave and the ones that didnt work out were a lot small we are a lot less transparency. So i think its sort of tough to compare alibaba to other smaller stocks. Its got a great market share and will do up credibly well. I want to dwell on alibaba, do you think investors in the u. S. Understand the variable structure that all Chinese Companies have to go through to list in the states . I think, again, a lot has a to do with transparency and making sure investors get comfortable with the way to invest. This is why a lot of companies are really considering the u. S. As still the primary park market to list their shares. There are rules and regulations and makes much a much better balancing. Thats one of the things we have been working on. How do you make sure when investors enter the marketplace here in the United States that investors are confident in their ability to solid investment decisions. I think this is sort of a part of that. Again, its all good for the integrity of the overall market. Lets step back and talk about broader equity markets, jeffrey. We are seeing a rise in geopolitical tensions with the concerns of the recovery in europe. We are sitting here in london tracking that, but the s p 500 is still trading 1 below the intraday high. What is really propelling the market higher . Well, so i actually think the u. S. Growth is pretty decent, but we have Growth Without inflation which is very helpful. When you look at the low interest environment, we are having a wonderful renaissance, if you will, in capital flows in the United States. And thats continuing to propel the market higher. We are seeing a lot of capital formation, certainly since the jobs act. We have seen over 400 companies go public and a regrowth in terms of fundamental economics. Theres a lot of effort going into reshoring here in the United States and building a lot of the prices back up. But theres a lot to drive the capital flows back up for the u. S. As the rest of the world feels its way. Well get more details on that later this week with the fed meeting. Jeffrey solomon, ceo of cowen and co. , thank you for joining us. Big ackman is looking to raise money through the ipo on the amsterdam exchange. Ackman already secured more than 1. 5 billion in commitments from the european Pension Funds and u. S. Hedge funds that will invest through the offshore holdings. And u. S. china relations have been cooling in recent months. You can add another pressing issue to the list of soft points between washington and beijing. Hampton peerson is in washington with more. Hello, wilfred. Jack lew has written to the Chinese Government warning that the series of antitrust probes against Foreign Companies could have serious implications for u. S. china relations. Now the wall street journal is reporting lew sent a letter to the Vice President premier in recent days saying the focus on value firms could devalue forum and referendum policy. The policy meeting attended in july at which china is include ed talked about microsoft. China looks to open force a 2008 antimonopoly law some critics say is being used to unfairly target foreign firms. Qualcomms case could result in record fines topping a billion dollars. In the past two weeks, the journal says four International Business lobbies including the u. S. Chamber of commerce have raised red flags over the chinese problems. Chinas three antitrust regulators are not targeting multinational firms and their enforcement work is fair and transparent. The chinese leader says 10 of companies affected by antitrust investigations are foreign. Have a great day. Hampton, thank you very much. Designers and fashionistas from around the world have flocked to london for fashion week. Amidst all the tweeting and selfie taking, Serious Business will get underway. It is estimated orders worth more than 100 Million Pounds were placed during London Fashion week each season. Tanya braddock owns the top shop brand among many others and asked him about what his plans are to open up on fifth avenue. So its hard work. In america, new york specifically, would have been the first time we opened a big, big, big challenge building there. Its torture. You want to move something and youre not a permit, but it is just the hours, what they can, they cant, they might. Its hard work. We have to get there, we have to. Its the second biggest show here on the street. One of the most important streets in the world. So we have to put our best foot forward and we will. Plenty to buy for our wardrobe, but should you be eyeing the designers for the portfolio . Carolyn and seema was out shopping around. Well have a look at whether or not you should be buying any of the european luxury names. Only up 1 outperforming the ftse 100 and underperforming in the rest of the sector because of the transition into japan and the fx strength of the sterling that has come up in recent weeks. Carrying the french group up 1. 8 . Hsbc said in a recent piece the reason why they are cautious on the luxury factor is the fact that margins are under pressure. Fx and slow transit hong kong is looking better in the u. S. , seema . When you look at the u. S. Treasury stocks, it is right across the screen is under due to international sales, specifically in china. Coach sees china sales raising 20 in 2015. And michael kors is known for the handbags and accessories recently targeting the middle class. They expect margins to shrink in 2014 as they succeed to europe g given the slower than expected economy in europe. As you can see, the move is not so big this year. And these are your headlines so far today. The u. S. Markets look set to open the week in red as investors brace for a change in lingo. And theres speculation that alibaba could be boost ed. 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; 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. Where the reward was that what if tnew car smelledit card and the freedom of the open road . A card that gave you that im 16 and just got my first car feeling. Presenting the buypower card from capital one. Redeem earnings toward part or even all of a new chevrolet, buick, gmc or cadillac with no limits. So every time you use it, youre not just shopping for goods. Youre shopping for something great. Learn more at buypowercard. Com this broke just about 30 minutes ago. The oecd is calling on the European Central bank to launch full qe after cutting its outlook for the currency area. They said zero inflation warns of further measures. They are also cutting their forecast for u. S. Growth this year to 2. 1 from 2. 6 previously citing fed tightening. And lets update the markets. Thats not the only headwind for europe so far today. We had weak data out of china yesterday meaning a weekday in asian markets. The scottish independent vote on thursday and the fed meeting coming on wednesday. That means negative across the board in europe. Italy almost a percent down. France is down 40 basis points. Germany being relatively flat. And the ftse 100 down 9. 3 . And seema, what does that apply for the u. S. Open . The u. S. Market seems to be taking cues from the European Market as we are red across the screen with the s p 500 trading flat in premarket trade. This coming after a down week for u. S. Stocks halting a fiveweek of gangs. We have a rise in the volatility down 10 as investors watch the geopolitical tensions. The september Empire State Manufacturing survey is out at 8 30 a. M. Eastern. This measures Industry Conditions in new york. And at 9 15 we get august industrial production. The forecast is scheduled to rise 3. 4 . Joining me is chief Market Strategist at will this be another week of losses . Well, very intelligence statement. I feel like i should be interviewing you, carolyn. We are talking about a situation where the two major news events of this weeks Scottish Independence and the fed are difficult to predict. You cant say that the fed statement came in. 2 higher than it should have or the Scottish Independence vote came in a half percent lower than it should have. These are detailoriented events. In terms of what can happen with the scott irk independence, its same thing with the fed. The change in the statement most people expect but it could be minute. Janet yellen was possibly going to change the period rate saying the rates could stay at 0 for some time and mark has to interpret what that means. Youll see up and down movement, but having said that the individual stocks perform very well during this period. We have not had two up days in a row in the dow since august 28th or so. So i think you can see we saw a big move on yahoo on friday. Solar city on friday and the other solar stocks. We have seen yields start to tick up on u. S. Treasuries. How much further do they have to rise before it becomes a big headline mover. We have moved from the 2. 39 to well above 270 to 275 range before the market takes advantage. Youll see a big move and possible reversal, but until you get to 270 and 2. 75 and establish a new range with a rate higher than 275. That is the base. An unlikely scenario that could scare the magic into the corner. The latest data out of china doesnt look too good suggesting china is slowing down. What does that mean for the price of brent crude . Well, brents interesting, i look more at the spread, the wti brent spread which in physical oil market we call the dif. Brent is interesting because its a sea born crude that the saudis rely on to keep the stability predictably. Wti, different story. Very free floating and very much supply driven. That continues to increase as we have the dip to widen out over time. Chief Market Strategist at teppas partners. Seema, did you enjoy the first day . Its wonderful. Thank you for having me. Im excited for smart, savvy conversation. Well watch the Scottish Referendum with the alibaba ipo. A lot on the plate this week. Well do our very best. Well, exactly. A lot on the agenda this weekend and more to come as well. And the fed meeting is probably the biggest talking point. And if janet yellen changes her language, thats what investors will be looking for. Im carolyn roth. Im wilfred frost. Im seema mody. Squawk box is next. Good morning. Welcome to squawk box. The fed is front and center with the markets waiting for Janet Yellens next move. And alibabas ipo road show will kickoff. Well unveil the plan for global domination. And snp miller wants to grab a heineken, but not so fast says heineken. Squawk box begins right now. Good morning, everybody. Welcome to squawk box here on cnbc. Im becky quick along with Andrew Ross Sorkin and joe kernan. Hurricane odile is pounding baja, mexico. That storm could threaten the southwestern part of the u. S. By the end of the week. Now to andrew for breaking monday morning deal news. Thank you, becky. We have a bit of breaking news this morning because sources are now telling us a 30 billion company is privately buying trizetto for 2. 7 billion in ca cash. Cognizant has served nearly 245 health care