Transcripts For CNBC Worldwide Exchange 20140918

Dependent. Whats the appetite . Just over an hour to go until we get the results of the ecbs first auction. With expectations that banks will take up around 150 billion euros in loans. Investors cheer plans to float its plastic business, allowing the german drugmaker to focus on its crop sooiz unit. Thumbs up, shares of solar surge to the top of the stoxx 600 on reports that rand is eyeing a merger with the industrial group. Announcer youre watching worldwide exchange, bringing you Business News from around the globe. The central bank reassuring markets that rates will continue to stay near historic lows. The fed kept the phrase for a considerable time in its post meeting statement. Janet yellen noted the forecast hasnt changed much since their last meeting in june. There is no mechanical term of interpretation of what the term considerable time means. As ive said repeatedly, the decisions that the Committee Makes about what is the appropriate time to begin to raise its target for the federal funds rate wont be data dependent. When janet yellen speaks, the market listens. Andrew wilson, ceo of immea. Andrew, some would say that theyre a bit confused with what janet yetten said yesterday. Stocks in the u. S. Moved higher and then ticked lower. Then we saw treasuryies off. What was your reaction . I think she did a very good job in terms of the press conference and in their statement. Very little changes to the statement. The press conference was emphasizing moderate and considerable time. So standing on the dovish side. If you look at the summary of the economic projections, you saw quite an increase in their profile for the federal funds rate. I think thats what the currency market reactors do, seeing rates moving up by their own projections. The market is looking at those projections and saying it looks like the fed is pretty convinced about the strength of the recovery. Some people are suggesting we might get a quicker rate rise when rates start to go up. What level do you think the u. S. Economy and the u. S. Economic can absorb comfortably inspect. The feds own forecast have the funds going up by 1. 5 by the end of next year and about 3 by the end of 2016. But markets havent got that discounted. I think the fed is telling you they think rates can move up over the course of the next two years to around 3 . That is way below what is currently discounted in the markets. The clear signal the market is starting to listen and thats where that selloff emanated. The fed tapered the monthly Bond Buying Program by 10 billion for the seventh time. Stay on course, the envy program by the end of next month. Do you think the u. S. Can handle another taper . Is the economy Strong Enough for that 12347. Yeah. Its growing somewhere around 3. 5 . The calendar year that we saw is entirely because of q1, you look at q2 and were on track for 3. 5 growth in q3 and maybe even a similar number for q4 had. Theres enough momentum in the economy to with stand those rate increases and, you know, lets be clear. This is not dramatic increases in rates. This is moving up to around 3 over the course of two years. The jobs data would mean that the accommodative policy is needed to economy the economy the labor market is improving, right . So notwithstanding again, yeartodate, were averaging 215,000. Were still confident with the Unemployment Rate coming down. The feds projection have unemployment falling to below 6 in the early part of next year. So i think there is enough strength in the economy to be able to with stand modest Interest Rate increases. What markets are saying, the catalyst to make one of those two correct could make rates go up. So in that sense, im not so sure the market is ready for rate increases. And when that rate increase does come, which do you think is on the market . Up a little bit from their lows, we think they should be north of 3 . Certainly we think the bond market is going to be at the brunt of the strashl increase for Interest Rates. Stay with us because we want to talk to you about whats happening in europe. And coming up on the show, the house gives the green light to obamas isis plan, but find out why the president of iran thinks the strategy is, quote, ridiculous, in our exclusive interview. And the long wait is nearly over as alibaba gets set to float on the New York Stock Exchange. We ask if this stock is a musthave for your portfolio. And jimmy chu eyes an ipo. All the details, coming up. So european markets have opened up in the green today basically because the fed didnt change its tightening rhetoric yesterday. We still got a considerable period of time until rates slightly increase. They are up and they have jumped more significantly in the last few minutes. Well dive into european markets at the moment. Up only about 0. 14 . Polls have opened in scotland for that crucial independent vote. Germany is up 0. 8 leading the charge. France and italy up, too. Larger drugmaker bayer is up 5 . The group said it would focus entirely on health care. Shares up 5 off the back of that news. Sulzer up significantly, almost 8 after the swit pumpmaker after talks of a potential buyup with dresser rand. Down towards the bottom of the dax after hsbc downgraded the stock sorry, to neutral from overweight is lufthansa. And the world top all right. Were going to fix your mike, wilfred, my friend. In the moment, actually. Lets go over to Sri Jegarajah who is in asia. Lets get a check on the markets over there. Sri, take it away. Hi there. Well, we got that news from the fed, didnt we . It was quite clear that janet yellen and her team are really preparing the markets for a rate hike sometime next year, possibly, but theyre trying to do so without they seem to have a relative degree of success right now. The ftse up by more than 1. 5 . The nikkei, eightmonth highs. And its down to the dollar yen at sixmonth highs, powering the export sector and giving the nikkei that lift. Lets not forget that there are laggards in this market. Sony shares were down at one point by more than 10 after yet another very, very down beat guidance. Remember, they say that they are expecting a lot in the region of well over 2 billion in the year ending march 31st. No dividend, as well. So a lot on the plate of ceo in terms of restructuring this company. Elsewhere, we are seeing some choppiness in the china market. Hang seng up by almost 1 . Shanghai composite, consolidating above 2,300. So overall, its a fairley pro risk day after we got that fed. Lets face it. They really gave something to everyone in the market. On that note, back in london to you. Thanks very much for that, sri. Its the first list of governing for the new list of ecb. He thinks it should be six weeks, not four weeks. That gives us a bit of a breather from discussing the ecb. Well see the bundes bank chief sit out the may 2015 meeting. The estonia, greece and Central Bank Governors will relinquish their votes for october 2015. Thats the new lineup for the ecb meeting every six weeks, not every four weeks. So bond yields yesterday in the u. S. Still just below 2. 6 . Yields in germany just above 1 . Gilt about 2. 5 . Italian yields just above 2. 4 . Yesterday in the statement off the back of the fomc is, quote, that the likelihood of inflation consistently running below 2 has diminished somewhat since early this year. That gave the dollar a bit of a boost. Yesterday, the dollar picked up a little bit against the dollar today. Its been around a 14month low in recent weeks. Here is whats coming up. Its open sesame for alibaba as the company gets set to debut on the New York Stock Exchange. We get all the details, next. And we cross live to edinburgh, over 4 million scotts are set to cast their vote either for or against independence. The all new, head turning cadillac ats coupe. Its irresistible. The result of the referendum will be formally announced with the ballots from the nations 32 local authorities are in later today or early tomorrow. Helia is in edinburgh with more. Good morning, will. Im at one of the 5,500 polling stations around scotland. The weather is a bit soggy, but it hasnt stopped people. By all indications, this is going to be record turnout. 4,285,000 people have registered to vote. Thats a whooping 97 of all eligible voters. And to give you some context, that means the turnout expectation around 80 to 90 . And in the general election, you only scott in scotland a turnout of about 63 . Its also going to be the first time that 16 and 17yearolds get to vote in this historic event. 109,000 teenagers will be heading to the ballot box and their vote could swing it because its incredibly tight. In scotland, although theres 32 local councils, its one person, one vote. Were expecting the first results in the northern rural areas around 2 00 a. M. , but its cities like here in ed edinburgh that will swing it. She expects the final result to be ready by breakfast time, but she wouldnt when she takes her breakfast. One thing that is clear, we will know by this time tomorrow what this historic referendum results are. Indeed, we will, helia. Thank you very much. And will fred, have no fear. The alibaba ipo is nearly here, set to debut on the New York Stock Exchange on friday and what could be the worlds large largest flotation to date. The ecommerce giant is scheduled with shares expected to range from 66 to 68 each. Now, according to the wall street journal, about 1 billion worth of additional shares could hit the market on friday as a lockup restriction doesnt apply to certain preipo shares. Aliba alibabas decision to list its shares triggered a fight between new york and hong kong to list the company. How did new york win . Susan lee reports. A fight between new york and hong kong for the Worlds Largest ipo this year. New york won. Why . Well, New York Stock Exchanges allow for dual class shares which help the Company Founders retain control, with their having to own the majority of the stock. Hong kong only allowed for one share, one vote. Despite losing out on what could be the Largest Technology listing of all time, a recent survey suggests that hong kong investors are okay with that. What we found is theyre very strongly in favor of one share one vote. Theyre not in favor of the special partnership structure. The alibaba was proposing. The Hong Kong Exchange as a Listing Committee is having a second look at their rules, a healthy debate that its ceo has encouraged. Were not going to change our rules for one company, despite the fact we probably agree there are good reasons for us to review it. Both hong kong and singapore ban due class share listings. London discourages the practice. The director of the Hong Kong Exchanges board says hong kong has et right. I think the system works well. It requires people to put their money on the line if they want voting rights. Besides alibaba, other companies have chosen to ipo in new york instead including buy due and chinas twitter like service. The owner seen as chairman says theres another good reason for chinese tech firms to list in new york. It was just by default. I mean, the u. S. Market becomes a place for listing some of the companies because if you cannot list in china, the best in the u. S. Market because industry and Technology Better and theres a lot more liquidity than in the other markets and its an evolution. In 15 minutes time, well speak to one analyst that will tell us why yahoo shares will price above 70 a shares. And im going to recap those ecb flashes that we mention dollars earlier. This is the new layout for ecb meetings which have moved from six weeks to four weeks. We said the governors would not include bundes banks sitting out may 2015. Thats why we saw the stoxx 600 jump a little bit on the news because some people are reporting that had he sat out the most recent meetings that we might have seen outright qe. He was one of the lead opponents to that. So that jump in the stoxx 600 off the back of the announcement of the new format of the ecb meetings. The results of the ecbs first are due in about an hour. The targeted longer financing operations are intnded to boost credit for the real economy and keep the Eurozone Bank lending ticking over. The first of two allotments take place today. It will offer a full year funding at a fixed Interest Rate of 1. 5 . The next takes place on december 111th. Analysts expect it will the real point is a game meant for credit. To give, to rent credit. But the figures in italy will rent credit for 20 billion euros. Over 14 billion for modelists, 17 billion for italy. Medium term loans to customers. And the reality is not easy to find the companies that have credit to invest in this sort of money. We dont need those bonds. We are hoping for good Old Fashioned regional banks. We are around about 100 billion more deposits in our books than we gave credit to the german households or through the german small and medium enterprises. So we do not need such progress. Andrew wilson is still with us. Andrew, everyone in europe has been focused on the most recent set of ecb actions, the rate cuts and telcos, could they be more significant than that . I think most people in the market are looking at the combination of september or december. Theres a big refinancing happening in january. I think the risk is the takeup of below that 150 number that youre talking about. I think the market is looking somewhere north of a hundred that is going well. Look at this combined with december, its just a lot of policy action in mays here and i think people are wanting to see the effects of that. Theres so much talk about will there be outright qe in europe. Is this another master stroke from mario draghi . We know that the bluntness of quantitative easing wouldnt work in europe as well as it has elsewhere. Will it need the easing policy . Its vary targeted policy. In that regard, if you start to see that working, you see that lending increase, i think that is a bit of the issue in europe is getting that credit creation mechanism, getting the funding to those Smaller Companies that drive Economic Growth in europe. Its too early to see if its going to work. Would he go well see over the course of the basically next six months if you start to see the credit creation mechanism kicking in. You know, andrew, as the american on the team, i think the talent with these newly targeted funds is theyre so complicated to really underst d understand. When youre an american investor looking for opportunities in europe, how do you assess the telco program and look for opportunity . Its quite amazing at the moment. Youve got the fed talking about raising rates and when moving accommodations. So the fed is turning right, the ecb is doing the rest. I think for us, that does create an opportunity, particularly in the currency market where that forward Interest Rate differential is starting to widen out in favor of the u. S. Dollar. I think thats good news for the dollar perspective. Equally in the rate markets. I think its clear that theyre going to be raising rates next year. At the same time, the ecb is trying all they can to keep european rates low. So its a relative value trade for us. Europe looks better than the u. S. On the bond perspective. The correlation between bond yields globally has been very high over the summer initially led by european yields pulling several yields down and block where we picked back up by the u. S. There is to real reason for them to be highly correlated at the moment, is there . I think theyre moving in the opposite directions and we think thats going break down over the course of the next several months. The ecb, mario draghi, hes doing whatever he can to revive the european economy. How many of an onus is on the European Companies to intermountain structural reform . Mario draghi talked about this where he highlighted the countries that have gone those through those reforms, are showing Economic Growth and in some ways putting pressure on countries that havent shown that reform to get on and do that. Monetary policy becomes limited. Hes talked about that and so i think its going to be a combination of very accommodative Monetary Policy along with Structural Reforms to get European Growth going. And thats the key question here. We need to get European Growth on a stronger footing. Absolutely. Andrew, thank you very much for joining us. Well be breaking the news as it comes out add around 10 15 uk time today. That was andrew wilson, ceo for Goldman Sachs Asset Management international. Still to come on the show, tweet this billionaire cofounder of paypal takes a tough line over twitter, saying the group is mismanaged. Theres probably a lot of pot smoking going on. Well explain all after the break. The dollar hitting a multi year high after fed chairman janet yellen pledges to keep rates low for an extended period of time. As ive said repeatedly, the decisions that the Committee Makes about what is the appropriate time to begin to raise its target to the federal funds rate wont be data dependent. Stocks in europe spike after the ecb announceses its new voting rotation on speculation that the qe could be announced on expectations that the president is sitting out. Whats the appetite . Just over an hour to go until we get the results of the ecbs first telco auction with expectations that banks will take up around 150 billion euros in loans. Pumped up, shares of sulzer surge on reports that drescher rand is eyeing a merger with the swiss industrial group. And were just getting some data out. Uk retail data has come out for august. It has come in at. Sorry, uk prices fell 1. 2 in august, the largest drop since july 2009. The retail sales is plus 0. 4 month on month, plus 3. 9 year on year. If were looking at sterli sterling dollar at the moment, its early in trade, but hasnt reacted significantly off the back of this. Well move on to european markets now. As you can see, theyve been up across the board today. They open only slightly up with the ftse 100 flat. Now you can see theyre all significantly up. But the ftse 100 also up, as well. Thats after, as we said, the ecb announced its new voting rotation for the next sixweek ecb schedule, not four weeks. And the fact that jans weidman wont be on the march 2015 vote making decision. Therefore, qe is slightly more possible. I want to bring your attention to an Interesting Development in the mobile space. Visa is going to assess a stake on monetizing. On the back of that, we are seeing shares of monetize move lower significantly, down around about 10 points on the day. Visa going to assess a stake in monitise. They enter into an agreement in 2009. Well get you more updates as they come in. The long wait is nearly over. Alibaba is set to debut on the New York Stock Exchange on friday in wakd be the Worlds Largest flotation to date. Shares expected to range from 66 to 68 each. While investors will be trying to get in and insiders may be trying to get out. According to wall street journal, about 8 billion worth of additional shares could hit the market friday as a lock up restriction doesnt apply to certain preipo shares. Cnbcs eunice yoon has visited one village in china, transformed by its access to alibaba. She filed this report from beishon. For sure, this chinese village was called clay bread village due to its long time baking tradition. But everything changed when ecommerce giant alibaba was introduced here. Now this man is an entrepreneur, generating 8 million in annual sales of camping gear. Translator our goal is become a number one Outdoor Equipment brand in the world. Big aspirations from whats known in china as a cowbell village, towns where farmers are trading in for computers and mobile phones to sell goods on alibabas consumer to consumer site. In beeshon, onefifth of the 2300 families sell on taobao. He started by taking orders from nearby factories from a 100 square foot room which he shared with his brother. Some people saw him and thought, how odd, these brothers work until very little every day, what are they up to. Tt his company, bs wolf, ships 1,000 packages a day to chinas increasingly wealthy consumers. Other villagers asked for his advice. Now they buy bikes, cars and homes. China for years has had almost all of its jobs along the coast. But now alibaba is helping to create opportunity for people in places where there werent any before. Lou suffers from muscular dystrophy. He says he was dependant on his mother until he started selling camping gear on alibaba. Translator i used to ask my mother for money. Now, she spends mine. Eunice yoon now joins us live from beijing. Eunice, pretty remarkable to see the impact that alibaba is having in big metropolitan cities, but villages as you just showed us in that report. Yeah, absolutely. Alibaba has a very Good Relationship with the government because it has been able to transform a lot of these url areas. Its a really important point because we can see how important alibaba is to the government because of the way that it has transformed. Its also important to find identity that jack ma has benefited greatly because of his very close relationship with the government, as well. He has made no apologies for his willingness to go along with whatever the Chinese Government wants and he really doesnt have a lot of leeway, either. Hes benefited tremendously because he has 80 of the online sales here in china and that has been very beneficial to him, especially at a time when there have been a lot of these antimonopoly investigations. But rehavent really heard anything when it comes to ecommerce and his company specifically. But at the same time, he has been able to really continue to develop those relationships with the government, which one would say that in china is very important because of any Chinese Company would want to have a relationship with the government and at the same time, it could be potentially limiting with its overseas ambitions. Eunice, for now, thank you. I know well be talking to you a lot over the course of the day as we wait for ticker boll baba to go public. Peter ganya joins you now. Similar to other ecommerce stocks, investors want to see if alibaba has the ability to grow its mobile revenue. Do you think youll have any troubles with that . It doesnt look like from the numbers. Theyre getting 33 of their revenue from mobile. And it looks like they are transitioned to be in a mobile company. I think that will be a path away for growth in the future. So we are very excited about this. You know, Online Shopping in china is still a very small proportion of total consumption. So the Growth Potential is enormous and we are very, very optimistic on the future of alibaba. And peter, what about the valuation about 20 times ebitda. How much is that based on this figure of 80 of market shares of ecommerce . And is that dependable . Yeah. So the 20 times forward on the ebitda is very close to facebook. And its a discount of the biggest competitor in china, tencent. We think its defendable for a lot of reasons. One of the reasons are that even though you could expect the market share to go down from 80 to 60, it wouldnt be a huge impact on growth because of the underlying consumption on growth. You have online to online sales growing around 40 to 45 at the current in the last quarter. So even though the market shares go down, i still think thats 20 of support for strong growth at alibaba. You know, peter, yahoo has been a way for investors to get exposure to alibaba. Once alibaba goes public, would you think that yahoo still has value . So our take on yahoo is that the existing yahoo business, when you strip out the yahoo stake on yahoo japan and you strip out the stake in yahoo alibaba, they havent been able to make decisions that ignite growth. We like yahoo because of its indirect exposure to allibaba a a way to play alibaba. But our take is that after the first day of trading, investors that believe in the longterm story of alibaba should close the decisions in yahoo and move into alibaba. It is a huge bid of china. We think alibaba, it is the backbone of the economy and the transition into being a consumer economy in china. And i dont think investors should underestimate the potential here. They should own it to alibaba. And peter, theyve made quite a few acquisitions in the last day or so. What are they going to do with all this cash theyre raising . So jack ma laid out some of his plans on the road show in hong kong. He said they were beginning to ramp up aggressively in the u. S. And europe to increase growth even more because, as you pointed out, the market shares quite high in china. So they can get more out of that. They can just grow with the market in china, which is still quite nicely. But they will expand into the u. S. And europe. They have spent billions of the u. S. Dollars on acquisitions lately and thats part of the strategy that alibaba is pursuing. Were practicing to facebook so youre buying all these Small Technology firms, upcoming competitor toes keep competition down and get new talent, get new technology. Thats been quite successful so far. I think they will spend some of this new 8 billion in cash to do more acquisitions and get into europe and the u. S. They have the alibaba express, but still as you make service on the street, very few people in europe and the u. S. Still knows the brand of alibaba. But im pretty sure they will begin to know the brand alibaba over the coming decade. Peter, thank you very much. That was peter carnry. Jimmy chu is eyeing an ipo. According to reuters, the company is planning to woo investors by sales growth of more than 10 . According to a source close to the deal, the stilettomaker could announce the listing at the end of this month. You know that brand well, right, wilfr wilfred . Of course. Speaking of fashion, Online Fashion retailer zelando has priced ipo. The pricing could value europes Biggest Online clothes retailer website at up to 6. 5 billion euros. The offers could represent 11. 3 of the company and would be one of germanys biggest tech flotations in the year. Now, deutsche bores says to stop promoting german listings of Chinese Companies last year, citing, quote, commercial reasons. The statement follows news that two executives of frankfurt listed shoemaker ultra summit could recently disappear along with a majority of the firms cash. So in light of this and with the alibaba ipo, we want to know do you trust Chinese Companies . Do you think the vie structure they have to list with on the New York Stock Exchange is a little dodgy . Perhaps . Do they have a place in your portfolio . If you want to join the conversation, worldwide cnbc. Com or cnbcwex. Noted venture capitalist peter teal trashed twitter in an exclusive interview with cnbc yesterday. The early investor in facebook was asked on squawk box if he was as bullish on the microbloging site as he is on the social net, woulding giant. He gave a very colorful answer. Youve got to hear this. Twitter is hard to evaluate. They have a lot of potential. Its a horribly mismanaged company. The people, you know, probably a lot of pot smoking going on there. Wow. But it doesnt what do you really think . But its such a solid franchise, that maybe it works even with all that. Twitters ceo responded to the criticism in a tongue and cheek way tweeting wilfred that he was just working through a bag of doritos. A little bit of snark there in response to what the venture capitalist had to share. We also want to bring you up to date on a story weve been watching. Visa said its going to assess a stake in monetise. Now menetise down about 4. 35 . Its expectation to be profitable in the full year 2015 and its longer term guidance for 2018. But that statement not really helping, shares right now still down about 23. 5 . Still to come on the show, the ceo of valley strikes a bullish tone on iron ore. Thats next. 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; chocolate, soybeans, thisand apricots. Made with what kind of chef comes up with this . A chef working with ibm watson, on the cloud. Ingredients are just data. Watson turns big data into new ideas. And not just for food. Watson is working with doctors and bankers to help transform their industries. Today theres a new way to work. And its made with ibm. Iron ore prices have been on a losing streak over the past six months. In an exclusive interview with the ceo of vale says hes not overly optimistic but saying he expects china demand to remain strong. To have faith in todays in the post cities. We have notes that it started to be reduced. We are considering that at the end of this year can be around the 95. Wayne from ubs is joining us now. The valeceo there is unsurprising on the outlook for iron ore. Are we in a down turn, as well . We have mine supply growing at about 15 . We have steel in China Growing around about the 2 , 3 to 4 . That clearly indicates that while the big miners continually push iron ore into china, we will continue to see weakness in the price. However, i do agree with him that the price may have found a bottom, at least in the near term. But nonetheless, next year well see it take another leg down. We saw rio tinto is going to have to reduce that a bit. Vale is going to keep it up. I think theres a number of things interacting particularly for vale right now, relative to the australian miners. We have seen the real weaken off the u. S. Dollar earlier than what we saw the australian weakening of against the u. S. Dollar. Clearly, theres a Competitive Edge there on the currency. The second thing is, vale begin to produce from a couple of their Key Development mines over the next couple of years. Theyre going to produce iron ore, theyre going to increase iron percentages there of around 66 , 67 . So the third thing is this week dramatic change in the way frayed is going to be considered. Therefore, you have a significant increase in the amount of iron ore shipped out of brazil per ton or price per ton. Therefore, you see a few Competitive Edges that are now starting to emerge for vale versus the australian miners. Wayne, do you think that the demand from other emerging markets could perhaps offset the type of demand were seeing from china . And that could potentially push iron ore Prices Higher in the longterm. I think at the moment, china is the main game. Therefore, we are in this structural oversupply display in the at least the next few years. We have increasing urbanization in india and other Southeast Asian countries. Particularly to see the type of growth rates that weve seen over the last ten years, be replaced by other countries k versus what weve seen in china, its fairley unlikely. So at the margin yet possible, but realistically, given the amount of investment thats gone on in the sector and the amount of growth we are going to see n availability of iron ore supply, it seems unlikely that those other markets can soak up the difference. Well be watching iron ore prices very closely, wayne gordon from ubs, thanks for your time. Now, chinese president xi jinping has arrived in new dehli after meeting hesitate counterpart in his hometown. This is the first meeting of the t two. Were just finding out that modi made an interesting statement. Hes commenting on border peace between china and india. He said there should be peace in our relations and in the borders. As this happens, we can realize the True Potential of our relations. So that is modi again, joining xi jinping talking about the two partners and how they can Work Together well. Absolutely. And very interesting geopolitically that modi visited japan only a couple of weeks ago now. The chinese are visiting him and well be talking about that with david from bank of America Merrill lynch tomorrow. The u. S. House of represents has given its backing to president obama to train and arm Syrian Rebels. Republicans and democrats came together to support the bill. It comes after the u. S. Military advisers said the u. S. Could be deployed in front line positions against isis. Spe speaking, u. S. President barack obama insisted the american troops would not be fighting in iraq. The American Forces that have been deployed to iraq do not and will not have a combat mission. They will support iraqi forces on the ground as they fight for their own country against these terrorists. As your commander in chief, i will not commit you and the rest of our armed forces to fighting another ground war in iraq. Iranian president rouhani denounced isis for its savagery. In an exclusive interview, rouhini spoke out against the Islamic State. They want to kill him, humanity, and from the viewpoint of the islamic tenants and culture, killing an innocent people equals the killing of the whole humanity. And, therefore, the killing and beheading of innocent people, in fact, is a matter of shame for them and its a matter of concern and sorrow for all the human and all the man kind. Cnbc sat down and asked him if obama pledged not to use boots on the ground against isis is realistic. My concern in this issue of no troops on the ground is that you should not announce beforehand what youre not going to allow yourself to do. I think weve seen examples of that not just from the United States, but from other countries, as well. So you should leave all options open. But in this case, as from the beginning, 2011 when problems began in syria and, of course, continuation of problems in iraq, i never thought that there was a need for troops on the ground. But there was a need for was in supporting the opposition to asset so that people can coaless around it and so that such groups could not take over in a vacuum. And if necessary, an air campaign. If you remember when assad used chemical weapons against his people, there was the intention, publicly declared, of putting a stop to that by president obama and i think at that time there were plans put in place to undertake an aerial campaign against certain positions in syria to prevent assad from using chemical weapons again. That did not happen. So troops on the ground is something im not really sure whether they are necessary or not, but you should not tell your enemy what you are not going to use against him beforehand. The terms are coming up in both democrats and republicans are very concerned about appearing soft on terror. Theres great ruckus in the United States to do something to prevent any future acts of terror happening in the west, obviously. But in terms of legislators, theyre saying no boots on the ground, are they naive in your opinion . Do you think the u. S. Is ever going to be able to extricate itself from the middle east . Well, i hope not. Not only because were good friends with the United States, but i dont think in todays world, which has become so small in terms of communications, in terms of the availability of information, in terms of the explosion of data that you have everywhere, nobody can afford to be away from somebody else. And the u. S. Is the number one country in the world until now. Whether its enemies like it or not. As friends, of course, we like it. And but we have to continue to engage with each other. And our middle east editor, hadley gamble, joins us now. Hadley, it was very clear you shouldnt tell your enemies when youre not prepared to do. Is this another criticism of the west, perhaps unclear and lackluster strategy against the United States . Absolutely. I think hes taking another jab. You have to remember hes one who was at the forefront of criticism of the president last year when he said he had drawn a red line, went to congress and couldnt get that authorization he said he wanted and didnt follow through. Saudi arabia and the other states have been strong on what they would like to see within syria. At this point, you know, i think since february or march, they stopped sunni nationals from going back and forth and fighting in syria. Theyre trying to clamp down on any problems they might have as a result of whats happening in syria and iraq. The president of iraq, the new president of iraq has even said we dont want air strikes from saudi and the other gulf stakes. So in terms of what the gulf countries can do, thats a fair question. Hadley, thank you very much. Having his cake and eating it, too, dan greenhouse explains what the fed is trying to do. Xc hello. Welcome to worldwide exchange. Im seema mody. And im wilfred frost. The dollar hitting a high after fed chairman janet yellen vows to keep the dollar lrates low fr a longer period of time. As i said repeatedly, the decision the Committee Makes about what is the appropriate time the Committee Makes its target to the federal funds rate wont be data dependent. Well get the results of the ecbs first auction with expectations that bank will take up to 150 billion euros in loans. Stocks in europe after speculation that qe could be announced in the months that the bundes Bank President is sitting out. The wall street journal says investors could flood the market with 8 billion worth of extra shares not restricted by the lockout. Announcer youre watching worldwide exchange, bringing you Business News from around the globe. And, you know, the u. S. Markets, of course, very much in focus after that fed meeting. Language really played a big role this time, wilfred. Absolutely. Again, the central bank manages to do very little and yet the dollar across the back. Thats the aspect of keeping considerable time in the statement. But even then, the commentary, thats why were seeing that movement in the bond market where yields are picking up. The Dow Jones Industrial average hit a new high yesterday and well see what happens today. Absolutely. On that note, lets take a look at the premarket trade in the u. S. You can see arrows are pointing to the green. The dow jones indicating a move higher by around 48 points. Nasdaq up by 10. Nas s p up by 6 points. Three consecutive days of gains for the u. S. Markets, were looking at the ftse cnbc global 300, as well, wil. Not following the premarket trade in the u. S. , though. Currently down about 0. 1 . Lets take a look at the european markets because we did get that new voting structure from the ecb. On the back of that, we did see european markets move higher. The ftse 100 up about 36 points. The german markets holding on to a gain around 100 points. Considerable gains across the board when you look at the european markets. Lets take a look at the cac 40. Up about 36 points. And the italian markets, once again, showing a considerable amount of green. This after seeing a big rally in its markets yesterday, up about 120 points. So a triple digit gain for the european market, definitely something to be noted here, wilfred. Absolutely. European markets have pushed up. The bond markets yesterday were torn between that statement that rates wont go up yet, but when they do go up, they could possibly go up more than expected. And the u. S. Treasury yield is hovering around that 2. 6 level. It was just below that yesterday, so yields have ticked up a little bit today. The german bund is up just above 1 . Gilt just above 2. 5 and the tenyear in portugal above 3. 16 . As we look at currency markets, theres still a lot of volatilities in currencies which hasnt gone through yet to currency markets. The dollar index continues to push up, it hit a 14year high yesterday. That statement from the fomc that the likelihood of inflation running consistently below 2 has diminished somewhat. That pushed the u. S. Dollar up a bit against sterling. Today it has softened a bit but, of course, sterling has been very weak recently. The yen intd interesting to touch on. The u. S. Dollar strengthening again a little bit, now another new sixyear high. Mr. Jegarajah is in singapore to give us an update on asia. Mr. Frost, the markets on this side of the world like the fact that janet yellen doesnt seem to be in any rush to hike rates. They were gravitating towards the more dovish elements in the fomc yesterday. We did see the dollar, though, power ahead once again. The sixyear high for that cross and that helps to really power the export sector in the broader nikkei lead to go that. The gain at the settlement of more than 1 . However, there was one notable drag and that, of course, was sony. Shares were down by 10 at one point during the session after they warned off a 2. 15 billion dollar loss in the year march 31st. Essentially, the s p putting sonys ratings on the credit watch negative. Elsewhere, china markets, a little bit of weakness there. Property developers, but all in all, its a pro risk day today, everyone. Back to you in london. Thank you very much, sri. Its steady as you go for the fed. Rates will continue to stay near historic lows well after its ends its Bond Buying Program next no. The fed capped the phrase for considerable time in its post meeting statement. Janet yellen noting the Economic Forecast hasnt changed much since their last forecast in june. I want to emphasize that there is no mechanical interpretation of what the term considerable time means. And as ive said repeatedly, the decisions that the Committee Makes about what is the appropriate time to begin to raise its target for the federal funds rate wont be data dependent. Some say it was a dovish speech with hint of hawkish commentary. I think the market had a hard time trying to digest what the bottom line was when janet yellen did speak. I know. And i still find this interesting, over the last month or so, the volatility ann has only read through in the bond market and the but its equity markets that keep shrugging off whatever it is thats announced. Or its the only place you get yield at this point. You look at whats happening in the bond market. Yields arent considerably high. If you want income, you go to dividend stocks and thats in the equity market and thats whats been working so far. Absolutely. Lets get you a rundown on what is trading this day. Weekly job claims out at 8 30 a. M. Eastern time forecast to drop by 15,000 to a total of 300,000. At 8 30, we get august housing starts. Building permits are forecast to remain unchanged from july. At 10 00 a. M. , the september philly fed survey is out to be a market mover. And lets take a look at todays other top stories. The u. S. House of representatives gave its backing to president obamas plans to train and arm Syrian Rebels. They came together to pass a bill that supports the president s strategy. The legislation now goes to the senate. It comes after the president said u. S. Military advisers could be deployed in the front line positions in the fight against the state. U. S. President barack obama insisted u. S. Troops would not be doing the fighting in iraq. The American Forces that have been deployed to iraq do not and will not have a combat mission. They will support iraqi forces on the ground. As they fight for their own country against these terrorists. As your commander in chief, i will not commit you and the rest of our armed forces to fighting another ground war in iraq. Were just going to bring you a flash on ultra sonic, the chinese Footwear Company that listed in germany. That saying the Credit Facility has been procedures are imminent and the cfo does, indeed, remain the cfo even though some of the management has gone missing. Just coming in after the Supervisory Board dismissed the ceo and coo. Definitely an interesting story there. Weve been seeing european markets spike in the last hour after the ecb unveiled its new voting structure. The rotational system means the bundes bank chief will sit out the may and october meetings with speculation mounting that his absence could improve the chains of the bank going for full blown qe. Now, the results of the ecbs first are due in the next few minutes. The targeted longer financing operation are intended to boost credit for the real economy and keep the Eurozone Bank lending pacificing over. The first of two allotments take place today at 11 15 cet in just a moment and it will offer over 4 billion euros at a fixed rate of 1. 5 . The next allotment takes place in december. Stay tuned after the break and well bring you the results. How do you beat the number one seed . You just have to win 70 of your points at net. And keep unforced errors under 10 . On the ibm cloud, the us open analyzes 41 million data points from 8 years of competition to uncover key insights. Data can help show you how to win, no matter what business youre in. Today theres a new way to work. And its made with ibm. 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 these are your headlines at this hour. Markets breathe a sigh of relief as the fed keeps its accommodative policy stance. Orders overflow in europe on merger talk with the u. S. Maker russert rand. And the wait is almost over for alibaba as its set to price later today. The iranian president rouhani has announced Islamic State for its savagery but announced the coalition is ridiculous. Iran said to execute innocent persons was against islam, against all religions and even against humanity. Translator they want to kill him, humanity. And from the viewpoint of the islamic tenants and culture, killing an innocent people equals the killing of the whole humanity. And, therefore, the killing and beheading of independent people, in fact, is a matter of shame for them and its a matter of concern and sorrow for all the human and all the mankind. As harsh as president rouhani was on isis, he is absolutely withering on president obamas strategy to fooip fight it. How come they are doing only air strikes . Are americans afraid of giving casualties on the ground in iraq . Are they afraid of their, you know, soldiers being killed in the fight they came it is against terrorism . If they want to use plane and armed plane so nobody is injured from america, is it possible to any hardship without any sacrifice . President rouhani told us iran is not going to have anything to do with the coalition against isis and he called it, quote, ridiculous. He said he will do whatever is never to keep terrorism from occupying baghdad or iraqi religious sites. He called that a red line and added taking a shot at president obama, saying when we say red line, we mean red line. And well be discussing geopolitics a little more. But were still waiting for the ecb to announce results of its first targeted longer term refinancing operation otherwise known as teltro. Just a recap, 200 billion euros of finance is available this september with a further 200 billion available in disease. Markets analysts are expecting over 100 billion in this tranche and between now and december, expecting over 300 billion. Were waiting for that number now. Again, just to recap, the amount available is 400 billion euros between now and december at a rate of 0. 05 plus a 10 basis point spread. Available at 0. 15 . Were going to go to tina from citi. Tina, a lot of criticism continues to come out about obama and the west strategy against the Islamic State. Are they doing enough . Well, i think there are a couple of ways to answer that question. We just heard president rouhani talking from the iranian perspective. All the countries in the region are united by one thing. That is their common fear of isis spreading. In a geopolitical sense, thats a positive. However, one of the other features of this whole situation is that fighters are coming from these countries to participate in isis, as well. So the saudis and the turks have to balance against domestic Public Opinion as does iran. I call this a sort of friendmies phenomenon in Foreign Policy whereby interests are aligned in terms of fighting isis, but in terms of the regional dynamic, they still have to speak to their domestic constituencies, right . And then in terms of is the u. S. Doing enough, ive been talking about the risk for a long time now, u. S. Pt Public Opinion has been strongly against going back into military conflict. President obama came to power, of course, on the back of that, as well. What we saw was u. S. Public opinion swing 20 points following the executions of the two hostages at the hands of isis. So that has really crystallized Public Opinion in a new way, but not to the extent of allowing the president to put boots on the ground. You know, in that interview with ann curry, rouhani did express a certain level of optimism when it comes to irans relations with the United States saying together they can resolve many problems. Do you think theres truth to that . Well, thats one of the curious developments and important developments, frankly, of the changes in the middle east, right . After 31 years of no contact between the u. S. And iran, we have a diplomatic president thats moving forward in the form of this interim agreement. And as discussed, its a perfect illustration of the idea where iran and the u. S. Actually have a lot in common in terms of interests being aligned. However, its still very sensitive for both sides to actually openly admit to it. I want to rewind the clock a little bit. How is it possible that the Islamic State has had such a significant rise over the last year or two. You consider the money spent not just by the u. S. And the british and the europeans, but other middle Eastern States on fighting, you know, extremism . How is it possible that theyve risen so strongly over the last year . Well, we used to talk about the risks by failed states. And i think one of the answers to your question is the ongoing civil war in syria. It allowed a syrian war to development, the form of isis to take advantage of it. Assad has been saying for years that hes been fighting for terrorists. And it wasnt until they came over the border in iraq that the extent to which he was doing so was evident. On that note, do you think iran is playing the right role in ensuring iraq is well supported when it comes to combatting isis . Iraq is well supported, in items of the money the u. S. Has spent, i think that comes back to your original point about doing enough. Part of the strategy here is that the u. S. Will undertake air strikes and regional forces, iraqi forces will do the boots on the ground bit. But its far from clear that that will have an impact. And also, lets just think historically,ite not that easy to really roll back these counterinsurgencies, right . Whether its boots on the ground or air cover, they tend to be quite persistent forces. Tina, thank you very much. That was tina fordham, Center Political analyst at citigroup. We have now got the breaking news from the ecb. Were expecting on the teltros 86. 2 billion euros have been requested by the European Central bank. That is below expectations. 200 billion was available in this particular tranche for september and 82. 6 billion has been taken up on that fouryear loan at 0. 15 . As you can see, the euro has ticked up a fraction off the back of that, but this really wasnt going to move markets significantly if its that small. Because its not a significant expansion of the european Balance Sheet. Were going to have a look in now at some of those european banking stocks. They are almost up across the board as they have been all through the day today. And theyve probably moved slightly up off the back of it. The italian banks there at the bottom, uni credit, san paolo, up over 1 . Deutsche bank and Commerce Bank in the top corner this. Banco popular in spain is up over 2 and Banco Santander up 0. 9 . So just to clarify again, the 200 billion euros of tltros available to be taken up today. So far, 80 billion has been taken up today and says more available. Even more available the 7 december and even more available april next year. This is just the start of the tltro aspect. Unicredit has just flashed at the head of funding says banks could take up to 12 billion euros in tltro funds but does not expect to reach that level. So we havent got the breakdown yet of that 82 billion of which banks have taken which amounts. But the unicredit head of funding has said that the bank could take up to 12 billion. Im not sure if thats how much they took or not. Were going to have a look at european markets. The ftse 100 is up 35 basis points. Germany up about 0. 8 . France and italy up also, markets open slightly up today. Theyve strengthened on the announcement of the ecbs new voting lineup for ecb meetings which has been changed from four weeks to six weeks and theyve stayed high at that level as the tltro data has been announced. And the euro strengthening against the dollar after we did get that ecb allotment. On that note, lets switch over to u. S. Futures. You can see green arrows across the screen. This coming in after the dow hit a new ultra day high and closing at a record up for three consecutive days, rising 1 in that period. Some of the big movers yesterday included dupont. Many of the Health Care Stocks rallying us. You can see the dow indicating a move into the upside in premarket trade, up about 35 points. Nasdaq higher by six. S p 500 higher by five in premarket trade. On the eve of alibabas ipo, republican senator bob casey, who spoke about his concerns on cnbc earlier this week sent a letter to the s. E. C. Chair Mary Jo White on wednesday. Hes raising questions about the level of transparency from chinese firms listing in the u. S. Eunice yoon joins us from beijing with more. I dont think eunice can hear us there. I apologize for that. Well talk more about alibaba later on in the show. China says apples new smoep has received regulatory investment in the country but has yet to gain the critical access license. Apple says it continues to work on bringing the phone to the worlds second biggest economy as soon as possible. Eunice can hear us and well join eunice now. Hey, guys. Theres definitely plenty of criticism about the transparency of the company. I would say that one of the things people have been looking at is the fact that alibaba does have a close relationship with the Chinese Government and people are wondering what that means. Jack ma in hong kong said he wanted to move aggressively to the United States, to europe. We only got a bit of a glimpse of what na might mean from the london road show when we heard a little bit from the executives that that could mean minority stakes as the company starts to feel its way into other markets. But we dont know what that really means. One asset that they do have is a website in the United States called 11 main. There are a lot of questions there as to whether or not the users of this either on the consumer side or the sellers would be concerned about putting their personal data on a website which is owned by a Chinese Company which has made no apologies about its relationship and cozy ties with the government. So those are some of the questions that have been coming up as alibaba gets closer and closer to this listing. Eunice, thank you very much. Were just going to update everyone, again, on the tltros, which as we said earlier have been released, the data. 200 billion euros was available from the ecb at a rate of 0. 15 . And 82. 6 billion of euros was the first take up. Theres another tranche available of 200 billion euros in december. This First Tranche taken up of the 200 billion available. Of course, the tltro system steps up again in december, but also april of next year. As you can see, european banking stocks are up almost across the board and they have been up throughout the day today on expectations of this, as well. Euro strengthening on the back of that ecb allotment, but now off the highs of the day. Well continue to watch the euro in todays trade. Still to kot come on the sh we talk to a guest who thinks with yesterdays statement, the fed is having it both ways. Find out what he means after the break. Welcome to worldwide exchange. Im seema mody. And im wilfred frost. The dollar hitting highs after janet yellen vows to keep rates low for a considerable period of time. But the central bank paves the way for faster rate rises next year. As ive said repeatedly, the decisions the Committee Makes about what is the appropriate time to begin to raise its target to the federal funds rate wont be data dependent. The ur euro gives up earlier gains as the ecbs first tltro auctions sees a take up of about 86 billion euros, only about half the amount expected. New voting rotation on speculation that qe could be announced that the bundes bank jim weidmann is sitting out. And alibaba gets set to price its ipo. Insiders could flood the market with about 8 billion worth of shares not restricted by a lockout. Youre watching worldwide exchange, bringing you Business News from around the globe. Interest rates will be staying near zero for a considerable period of time, but the fed did hint at rising rates later in the future. Of course, lets take a look at the cnbc ftse global index. Youll see the global 300 index. You can see that its actually training lower at the moment, down about three points. But, again, off the the session lows. European markets, lets dive into the individual countries. You can see that the italian market really showing a lot of strengths today. French market also in the green. German markets continue to move to the upside. Ahead of that vote out of scotland, were looking at the ftse 100 up about 28 points. So how do you make money in markets like this . Here is what some of the experts have been telling us this morning. If you are looking at equities, unless the fed can make this the most Perfect Vision to rate hikes, you will still need to see equities likely correct lower at some point because tightening is tightening. And that likely will feed into emerging markets because tightening creates the giant sucking sound of liquidity at some point where they will need to adjust. Our take on yahoo is that the yahoo business, when you strip out yahoo japan and you strip out the stake in alibaba, we dont think its attractive. That is slow growth and Marissa Mayer has not had the decision to ignite growth. So we dont like yahoo . They may have found the bottom, at least in the near term. But nonetheless, next year we will see it take another leg down. And is were just going to recap on the tltros and the take up of that. 200 billion euros was available today. 82. 6 billion euros have taken up by european banks. That spread across 255 different counter parties. This, of course, the first of eight different tltro tranches available in the coming years. The next one available in the december. The euro has just picked down off its highs today, more of an expansion of the Balance Sheet weakening slightly off its highs. Off the back of this, aiming to reach it most lending to the small and Medium Sized Enterprises that need it. We also had news from unicredit, the only bank individually that weve heard of that is obviously one of those 255 counterparties. That is the head of funding has said it could take up to that amount. Of the 82. 6, perhaps up to 12 where there are 255 counterparties involved in that 82. 6 billion number. Cb doing whatever it can do revive the economy. The central bank reassuring markets that rates will continue to stay near historic lows well after it ends its Bond Buying Program for months. I want to emphasize that there is no mechanical interpretation of what the determines considerable time means and, as ive said repeatedly, the decisions that the Committee Makes about what is the appropriate time to begin to raise its target for the federal funds rate wont be data dependent. Dan greenhouse, chief global strategist at btit joins us. Dan, what did you think about what janet yellen had to say and what are the ramifications of the fed winding down qe in october . Let me start by saying that i think this is all really enjoying. And what i mean by that is were left parsing these words. The short story is i think theres too many words in the fed statement. That said, the clip you just played is instrumental in the belief, our belief, that comes october, the fed will remove this considerable time language will probably should remove this considerable time language and instead begin to guide markets towards the idea that rates will start to rise next year. Exactly when remains data dependent. But if youre sitting at home trying to understand what the bottom line is, the market seems to be confused on how to digest the headlines out of what janet yetten said. If you look at the market, the dollar strengthening, moving higher on yesterdays trade, but then they cooled off a bit. Doesnt that tell us rates could rise sooner than expected . Stocks held up. That seems to be the area of confusion. While i dont disagree that over time, perhaps next year equities may suffer in the face of the first rate hike, i dont understand why there has to be an Immediate Reaction on the part of equities. Nothing really changes. For investors at home, for investors generally, the bottom line didnt change at all. This is man decks to a larger degree. At the end of the day, rates are going to rise next year and it will be in the late spring or early summer. Next changed yesterday to offer that narrative. Dan, so far weve had surprisingly smooth equity markets in the face of pretty volatile macro fundamentals. As the macro fundamental, as the equity markets rates go up, do you think thats going to switch around . Do you think well get more volatile equity markets . Well, calling for higher volatility has been a career ender so to speak for the last four years. Bur r but that said, when rates start to go up, you quoted someone in the intro, you quoted someone saying its hard to imagine rates are going to go up and there wont be some sort of correction in equities. When rates do rise, fed policy are still likely to come true become more valid. Fed talk isnt tightening. Usually when that happens, it spruces higher volatility. How would you describe yesterdays speech . I mean, people can call it whatever they want. Again, its dovish in the sent that the two most important parts remain. Everything else is people trying to get too cute by half. They left those two items in. That is what a lot of people thought they would amendment and they didnt. That is a dovish development. The fed rates are expected to rise more da mattockly in the out years. At the end of the day, thats a good thing. The fed is getting more confident about growth. That is probably premature, but the point of the story is the general narrative hasnt really changed. Its finishing its program and is going the raise rates in the spring or summer of next year. Stick around. We want to see what that means for equity markets. Coming up next, you asy arabias chief. No boots on the ground and the fight against isis. Stay with us. Want to change the world . Create things that help people. Design safer cars. Faster computers. Smarter grids and smarter phones. Think up new ways to produce energy. Be an engineer. Solve problems the world needs solved. What are you waiting for . Changing the world is part of the job description. Join the scientists and engineers of exxonmobil in inspiring americas future engineers. Energy lives here. Welcome back. The u. S. Congress has managed to come together and taking action on several key pieces of pending legislation. Hampton pearson is in washington with more. Yeah, were going to start with the u. S. House of representatives which has approved a stopgap spending measure, divert a potential Government Shutdown on october 1st. The measure passed by a vote of 319108 with opposition spread evenly among republicans and democrats. The other agency through december 16th. This will likely allow lawmakers to work out a longer term spending solution once they return to washington after the november midterm elections. Now, the house bill included a provision to extend the charter of the u. S. Export import bank for another nine months. This put off any decision about the trade future more time to build a case for closing the 80yearold institution. In a statement, boys says it will leave in limbo until the middle of next year and this will likely leave sales to foreign investors. The measure includes a separate provision granting authority for the u. S. To train and arm moderate Syrian Rebels to fight the mitt tant group isis. It sets the contingency rates well above 5 billion. And it leaves ample funding capacity for his proposed air campaign against isis. The u. S. Senate is expected to vote on the house bill today before lawmakers adjourn, again, until november and those midterm elections. Hampton, thank you very much. Now talking to geopolitics, cnbcs hadley gamble sat down for an exclusive interview with former saudi intelligence chief prince al tazal and asked him if obamas pledge not to use boots on the ground in the fight against isis is realistic. My colonel in this issue of no troops on the ground is that you should not announce beforehand, but you are not going to allow yourself to do. And i think weve seen examples of that not just from the United States, but from other countries, as well. So you should leave all openings open, but in this case, as from the beginning, 2011 when perhaps began in syria and, of course, continuation of problems in iraq, i never thought that there was a need for troops on the ground. But there was a need for was in supporting the opposition so that people can coaless around it and so that such groups could not take of. Controversial interview on what he had to say. Absolutely. You can kind of understand why hes coming from in the sense hes saying, i dont advocate boots on the ground. I dont even know if that would work. But certainly had we gotten ahead of this, we wouldnt see the problem that we saw today. Saudi arabia is closely watching this situation among their own saudi nationals were allowed to go back and forth until march or february of this year. Iraq is right on their border. This is a problem that could, in fact, come home to them, as well. And how significant are the opposition . Is this a pipe dream to expect training them on the ground is going to do anything significant . Well, it just really depends on who you talk to and when if you look at the timeline. President obama was calling them teachers and lawyers and, doctors and saying, why should we, you know, be arming these people . What chance did they really have when in his argument not to do anything in syria a few months ago. Now suddenly weve come full circle. When i mentioned that he said, of course, who made up the American Revolution . Lawyers, teachers, doctors. In that sense, youve got people on both sides of the spectrum saying in one point, theyre not qualified but on the other hand, they need to protect what they say as serious aggression from president assad. Hadley, thank you very much. Lets update you on the headlines today. Markets breathe a sigh of relief after the fed keeps its accommodative policy stance. Disappointing as banks only pick up 86 billion euros. And soltice. And its here, alibaba getting set to price tonight and go public on friday on the New York Stock Exchange. What can you expect . Were going to talk to some experts, including dan greenhouse in just a bit. The all new, head turning cadillac ats coupe. Its irresistible. You cant get any thbetter than that. Trains. Siemens trains are not your grandparents technology. Theyre something thats gonna change the cities we live in today. 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We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. European markets and the euro moving higher on the back of an importance announcement out of the ecb. Ecb announcing its First Tranche of targeted longer term operations. The central bank had half around what the market was spething. The program is intended to boost credit for the real economy and to help boost Eurozone Bank lending. In total, 400 billion euros of full year funding is being offered at a fixed Interest Rate of 0. 15 . Wilfred. Indeed. And thanks off the back of this have improved to the second best performing sector in the stoxx 600 today. The markets were ul throughout the day. The two big german banks up 1. 3 . This is going to benefit the Smaller Banks in the more peripheral economies the most. Uni credit is up 1. 6 . We heard it might be up to 12 billion. Pedro sanpaolo up 0. 9 . Bmps down 0. 25 . Not sure why. The spanish economy is up 0. 3 and over 2 respectively. Green across the screen indicating a higher open for wall street, this coming in after the Dow Jones Industrial did hit a new intraday alltime high in yesterdays trade, closing at a record with the dow transports seen as a leading indicator for the market. This coming in after the fed spoke. Janet yellen, of course, saying that Interest Rates will stay near zero for a considerable amount of time. And the big story, the long wait is nearly over with alibaba set to debut on the New York Stock Exchange on friday. The ecommerce giant is scheduled to price its blockbuster this evening with shares expected to range from 6 56 to 68 each. Ard cording to the wall street journal, about 8 billion of additional shares could hit the market friday as a lock up doesnt apply to certain shares. Is this ipo going to suck the liquidity out of the market . No. I think people are expecting this and they have cleared their books for this ipo. This is a compelling opportunity and its a good way to participate in the fastest growth economy, the rising consumption and all the key metrics that you need. I think people are ready for it. I dont think it will suck everything out. And the margins, im sure some people will be will probably not buy this. But overall, i think people are ready for this and they will participate in this. And its about a 20 times forward ebitda multiple, obviously demand is high. But nonetheless, what kind of growth are we going to need to see in growth merchandise value over the next thee years to justify the valuation . I think the way its growth right now, the revenues are at more than 50 clip theyre growing at. And the profitability is pretty high. If they can maintain that, theres no sign that things are slowing down as of yet. Ecommerce is picking up. Its a small part of the business there. So i think thats growing as a share of total sales. So i think overall, gmv is expected to keep growing. If they continue growing at a 50 clip, which they will, i have no reason to believe that they wont, i think they can justify this valuation. Dan, are you hearing investors are trying to clear out their portfolio to get ready for alibaba . Im not. Ill say on this comment, specifically this is exactly the same thing we heard from facebook to a large degree, its what we heard from google. I dont know how much truth there is to this. I would add each if it was the case, there is no way to tie this to the future performance. Either the names that are being cleared. I dont know that theres anything to this story but, again, whats important is whether its determined performance and im not sure how it does. Weve seen a lot of volatility where we see a lot of the tech stocks sell off due to the risk of higher volatility. But the oil tech names, the higher dividends of the world, do you think those are still in favor more so than the new tech names . Theres, to a large degree, someone with finds Something Like work day or fire ire may or may not be the person who finds qualcomm and microsoft attractive. Those are names that go into large cap mutual funds. My moms friends know those names. My moms friends has no idea whats going on in software. Theyre still in vogue with a large core of those giants. But those clients have a significantly higher risk. It sounds like this ipo is locked up, but looking forward, what are the main warnings signs that youll be looking out for as a sell signal for the stock in the future . Well, i think the Third Quarter numbers are coming out in a few weeks from the end of september. So you see some numbers there. Overall, the issues have been flagged. We want to make sure that there is nothing shareholder unfriendly from the company. And also margin compression is a big issue. This Company Wants to be an international company, a global company. And i can see some competitors coming into china, as well. So overall, i would look for margin compression and just governance issues. Keep an eye on those, too. Dan, lets talk about the Small Cap Index with focus from alibaba. The russell 2,000, seen a lot of volatility in that index. Many times seen as a leading indicator for the market. What are the small caps telling you about the broader sentiment when it comes to the markets moving higher . Short answer, nothing. Ill say for investors that dont follow u. S. Equities that closely, the russell 2000 is in the give or take of the third selloff this year. Im afraid i have to cut in. Thank you very much for joining us on the show today. 6 . The house votes to aid Syrian Rebels in the fight against those islamic militants. And the polls are open in scotla scotland. The vote to break away from the united kingdom, too close to call. But there could be chaos or could there be chaos when we hear that outcome tomorrow . I guess it depends on the outcome. And apples tim cook taking a swipe at some of the silicone valley neighbors. Its thursday, september 18th, 014, and squawk box begins right now. Good morning, everybody. Welcome to squawk box here on cnbc. Im becky quick along with joe kernen and andrew ross sorkin. Whats left of Tropical Storm o did he o is dumping a tremendous amount of rain on the southwest. Some areas of new mexico have been hit with a couple inches of rain. Another 3 to 6 inches of rain are expected over the next couple of days. The region is at high risk for flooding and property damage. After weeks of speculation about change, the fed deciding to stick with the status quo. The central bank telling investors that it is near the end of aets purchases and reiterating that it will not hike Interest Rates for a considerable period. I want to emphasize that there is no mechanical interpretation of what the term considerable time means. And as ive said repeatedly, the decisions that the Committee Makes about what is the propose time to