Transcripts For CNBC Worldwide Exchange 20140924

The Business Sentiment index has come in at 104. 7. It had been forecast for 105. 8. The last reading had been 106. 3. Weve had the current continue come in at 101. 5 having expected to be 101. 2. This has seen the euro dollar fall from its highs earlier today in the last few minutes. Surely the germans need this as much as anybody else. It looks like the industrialists are sending out a clear message. The activity is clearly slowing. Theres a knock on impact compared from the week elsewhere in europe. Weve seen industrial pick up sharply after quite a bit of depression caused by weather effects in the last quarter. So it looks like we dont get a strong q3. And the 10year Government Bond yields picked up for the fist time since august. Is that facing uncertainty . The economy will continue to face a lot of uncertainty for many years. The challenge is coming through from higher bond yields from around the world. Some investors are obviously taking a safer option he elsewhere. Mario draghi is trying to revive the european economy. Recent data out of the eurozone suggesting that were in for a slowdown. Well get that at the next meeting. The big concern for investors is that the potential size of the markets that the ecb can defend to are just too small to have a Material Impact on the economy. And so when are we really going to see something bigger than the sovereign debt buying . And to recap the Business Sentiment index was expected at 105. 8. The previous reading was 106. 3. But it came in lower. 104. 7. Thats the lowest number since april 2013. Do you think this is going to see a change in rhetoric from the german government, perhaps at the bundes bank, as well, to admit this extra stimulus is needed not only for the whole of europe, but for the ecb, as well . I hope so. And i hope the ecb takes that into consideration when it comes through and start to think about the key things they can think of. They really need town wind this and try to take the euro much lower against the dollar and sterling, as well. And they need to do this in a more direct approach rather than focusing indirect measures like it. Thank you very much. British Prime Minister David Cameron says hes looking at ways to increase the uks role in the Coalition Fighting. Speaking exclusively to nbcs brian williams, cameron pointedly said he was not ruling out military action, saying islamic terrorists pose a dark threat to europe and the u. S. What president obama and i have agreed is that we need a comprehensive plan, we need a Big Coalition and we need something which is going to degrade and outwardly destroy this dreadful organization. Weve taken part so far using spy plane missions, using our tornado plane, helping with information gathering, dropping aid for those who have been afflicted and we very much support the action that america. Others have taken. But we need to recognize this is going to take time, its going to take real resolution. It is a big escalation going from breaking aid to breaking bombs. Would the uk be willing to do the same . Well, we certainly having ruled it out. Weve taken a number of steps so far. Weve armed the pesch mergah. What i want to see and im encouraged by what i have seen i want to see a Big Coalition, i want to see the support of arab states on the ground, i want to see the Iraqi Government properly representing all of its people and asking for this action to be taken in concert with its own forces. We have to learn the lessons of the conflicts in the past. And so those will be the tests that we we apply. But im confident that we play a big part already in this coalition with our long standing allies in the United States and theres more we can do. You talked about the isis threat. What is the isis threat to the uk and what have you learned further about the isis threat to our country . I think the threat is very clear, that you got here, a lot of terrorist organization as it were leaching off another state as we headed afghanistan and here youve got isis, a terrorist organization controlling a state. It has oil. It has money. It has territory. It has weapons. And theres no doubt in my mind it has undertaken and is planning further plots in europe and elsewhere. Specifically in belgium and brussels. It was an isis plot that went into a Jewish Museum and killed entirely innocent people. There are other plots they have been attempting including in my own country in order to kill and mame innocent people. The same applies to the United States of america. This is a fight you cannot opt out of. These people want to kill us. They have us in our sights and we have to put together this coalition working with right across the board all the countries i mentioned to make sure we ultimately destroy this organization. Have you identified the isis executioner in the video . We have done a lot of work and we are very close to that, but the key thing is making sure that we find them and making sure they do not escape justice. It is an absolutely hideous thing that these people have done. Weve seen the brutal beheading of two u. S. Citizens. Weve seen one of my own countrymen beheaded by someone who is almost certainly a british citizen. It is an absolutely appalling, depraved barbaric act. We have to make sure they have. Who threaten american citizens. Lets listen in to what he has to say. It must be clear to anyone who would plot against america that we would not tolerate safe havens for terrorists who threaten our people. Ive spoken to members of congress and im pleased that there is bipartisan support for the actions we have taken. What do you think were the major take aways from the interview with David Cameron . Some serious words from mr. Cameron, but does he have the support to do anything . Thats the bigger question. Thats the question weve been asking in the United States, as well, does president obama have the support. This is a man essentially in terms of David Cameron who couldnt get the support over David Cameron last time around. He almost lost scottland. Its a curious thing to watch someone get up there and be strong on terror, these are terrible things, and you can understand that. But when it comes down to actually doing something, what are they going to do . What is the possibility for the uk to get involved . Is there one . He said in the interview, it has oil, it has money, it has weapons, with regard to isis, and significant amounts of all of those. So exactly what is the next step . And also does it raise the questions how they got into that position in the first place. Unfortunately, if you talk to the arab allies, they say weve been telling you this all along and this is something that needed to be confronted two years ago and the west didnt want to get involved. Its something you said in the United States, the authorization to go to war. Basically, congress got out of town, got out on the campaign trail without authorizing this. The president didnt go to congress to start bombing in syria. When youre running in these midterms, everybody wants to be tough on terror, but nobody wants it on their wrap sheet to say oh, yes, i, too, want to take the u. S. To war. You could argue there is going be month back from militants either way, whether theyre sending troops on the ground or not. Absolutely, yes. And the bigger question is do we contain this threat or not. Would we ever be able to take out all of these terrorists . I would absolutely say no. We can contain them, we can hope to contain the threat, but in terms of terrorists and mill at that points, people feeling disenfranchised, youre never going to be able to shake these people out completely. Theyre going to change their name and move to another country. Eats something people understand in the United States, i think. If they frame it that way, i think theyre going to get further than saying were bombing another cup, were taking our country to war again. Hadley, thank you so much for that. Well talk to you once again specifically about what T Obama Administration is doing in this case, as well. Hadley gamble, our middle eastern correspondent. Do send in your email, your questions, your comments on this very topic to worldwide cnbc. Com. Lets update ow markets. Im going to get straight to the inter day charts. The stoxx 600 opened basically flat. It weak nd in expectation of a weaker than expected german confidence print. Then it bounced when that print did come through weaker than expected. Its currently down 10 basis points. Lets look at the very missed and the German Market off only 0. 17 . Again, the Business Sentiment came in at the lowest level since april 2013. Its five months in a row its come in below expectations. Is he 104. 7 grens an expectation of 105. 8. Italy and france are roughly flat. Air france, which is the subject of strikes, has only suspended over a percent. Down 10. 6 , tnt express says low growth in europe will affect margins in the fourth quarter. It will set aside 50 Million Euros to settle an anti investigation with french authorities. Rbs is off just over 1 after the price of its u. S. Business citizens at 21. 5 a share. Thats lower than the expected range. And adecco, off almost 4 . Towards the bottom of the stoxx 600 saying that its seasonal pick up in business is due to weakness in both france and germany. Bonds, first of all, at the tenyear bund, which actually has risen slightly off the back of that print. The Business Confident index. Contrasting signals to what the bund and the u. S. Index has picked up and weakened ahead of the number. U. S. Tenyear treasuries around 2. 53 . The yield has come back from that2. 6 , that high around the fed meeting last week. Its perhaps a bit of a safe haven trade as bombing in syria took off yesterday. Gilt at 2. 7 . Any form of uncertainty, the market does not welcome. Forex, the u. S. Dollar against a basket of currencies has just come off the twoyear highs that it had been hitting in recent weeks. At the moment, the euro dollar is at 1. 2849 against the yen, 108. 6. And cable is at 1. 638. Lets check in on what markets have been doing in asia. Mr. Jegarajah has been standing by in asia. Sri. That has caused a degree of risk avergdz on the asian markets. But its not widespread. Look at these indices that are performing strongly. And its mainly the Greater China market. Shanghai composite up by almost 1. 5 . This is significant because at the early onset, you can see a bit of a wobble in the china markets after Goldman Sachs rerated their china growth view down to 7. 1 . As i said, a little bit of wobble on the markets, but comps largely because of the reform correlated stocks. Those in defense, the military names and the railway, the infrastructure stocks got a big boost today. Theres a sense that we are seeing momentum in those areas on the reform side in beijing. That is one of the reasons why the shanghai composite got a lift. Watch out for this risk aversion. And the geopolitics are going to be transmitted through the currency markets and of course through the oil markets and they are the big headwinds for the major indices out here. One of the reasons why the indices is on the defensive for today, is because we did see some safe flows into the japanese yen. If we continue to see the oil price creep higher, thats going to hurt some of those import nations like indonesia. On that note, back to you. Sri, thank you so much for that. I want to bring you the latest commentary on the ifo business out of germany. We saw modest weakening in the Euro Dollar Exchange rate. The ifo Economist Says they expect to see a weak Third Quarter in germany. Everyone was expecting a bounceback after that below par reading in the Second Quarter and that had surprised a lot of people. It was a big shock. The ifo Economist Says they expect economies to stag nate in the Third Quarter. They expect german gdp growth around 1. 5 in 2014. Previous forecasts were for around 1. 9 . Coming up on the show, bizarre square or plain ugly as blackberrys smartphone goes on sale. We ask if the price is more important than style. U. S. Residential sales figures are due later today at 11 30 cet. We speak to the ceo of a startup hoping to disrupt the whole way we buy and sell our homes. And we are live at the uk Party Conference in manchester as the leader gives big business a warning on tax. Thats coming up. Now, does your new iphone 6 plus have a curved screen . Its not supposed to. Matchable says there are several reports showing up on apple forums of devices bending slightly after being in ones front pocket for a while. The pocket isnt limited to apple. Sony has a phone thats expected to bend after being in a pocket for a while. Lets stick with the smartphone theme. Blackberry has reentered the smartphone wars with the release of its own major device. It has a square screen and a keyboard that doubles as a touch sensitive slight pad. It has been priced at 599, steeper than the iphone 6 plus and Samsungs Galaxy s5. Blackberry has had difficult staying competitive with samsung and apple. If you look at the share Price Performance since the new ceo joined, the share price is up 68 . The market value is back up to 5. 8 billion, although its still a far cry from the 83 billion at the height. Astonishing. Theres a bit of a price discount, but i think the blackberry operating system is so much worse than android and ios, in my opinion. Oh, come on. Come on. Ive said that before. I like my blackberry. It has the you know, you can type very quickly. I saw you yesterday typing on your other smartphone. Im not going to name the name. But its simply not as fast, is it . I think its easy. And you can use siri. Its much better. And the galaxy has the slide feature. We want to hear from you on this. What do you think of the shape of the new mrb . And will the price tag get you to give up any other device you might have . Join in the conversation here at worldwide cnbc. Com or cnbcwex. The s. E. C. Is reportedly investigating whether pimco artificially inflated their turns on a popular etf aimed at investors. The wall street journal says the probe has been under way for months. At issue is the way the total etf bought and valued securities and whether investors were given inaccurate information. Its a violation of new Securities Laws to give misleading information even if its unintentional. Top story this morning, u. S. Pharmaceutical giant pfizer considered a take overbid from rival activist. The talks ended last week whether activist turned against the deal. Cath rib joins us with more. This is pfizers second attempt to pursue a tax inversion deal. But perhaps theyre coming to terms. Who knows, seema. Theres still a lot of talk they might come back for astrazeneca later in the year. I think whats interesting is this is a company thats kind of fresh out of ideas. They did a lot of work persuading shareholders and politicians in the uk earlier in the year that pursuing astrazeneca was for all sorts of things other than tax inversions. But to not pursue this particular deal with a company which has less interesting r d which has itself built its itself up to acquisitions. That kind of suggests that theyre really determined to do this and to do this soon, whether the rationale is there beyond tax inversion or not. Catherine, weve seen quite big moves in the last 24 hours about this announcement. But the u. S. Is still quite a long way from passing a law on this level. Well, i think definitely theres the appetite for pharma and m a still seems to be like that despite these tax inversion deals. These movements might, in fact, beat up some of on these details. I think potentially the deal which you might see is possibility threatened by these moves and another big mover yesterday was shire. The price theyre paying, a 5 the premium to shires share price before the deal started and shire very, what might turn out to about a clever move, negotiated the break clause short of regulation. It wouldnt surprise me if there is still some negotiation or price or even if they are forced to drop the deal. Because washington is starting to vocalize its distaste for tax inversion deals, will this lead to sloppy deal making and Companies Like pfizer making acquisitions just so they can get that in before tax inversion can be cut down . I think that doesnt seem to necessarily be the best case for investing in a Company Going forward. Were buying this company because it has such great medications coming through its basically saying fundamentally operating by the business. Its just by producing, getting the profits through tax and rather than through and the company should fundamentally be a biases. And for the industry, for jobs in the industry, research in the industry for, you know, producing the kind of medicines that we all are going to need at some stage, not necessarily the most positive thing going faufrd, i think. Catherine, thank you very much. Im going to bring you a flash coming from a turkish official who is saying that neither turkish air space more a usair base in Southern Turkey have been used in the air strike against Islamic State. Well be discussing more about those air strikes later in the show. Still to come on the show, rbs trading lower after the u. S. Unit citizens is prices below expectations. What will this mean for the struggling uk lender . Well discuss after the break. Your customers, our financing. Your aspirations, our analytics. Your goals, our technology. Introducing synchrony financial, bringing new meaning to the word partnership. Banking. Loyalty. Analytics. Synchrony financial. Enagage with us. Watch this. Sam always gives you the good news in person, bad news in email. Good news fedex has flat rate shipping. Its called fedex one rate. And its affordable. Sounds great. [ cell phone typing ] [ typing continues ] [ whoosh ] [ cell phones buzz, chirp ] and we have to work the weekend. Great. More good news its friday woo [ male announcer ] ship a pak via Fedex Express saver® for as low as 7. 50. The uk Prime Minister tells cnbc exclusively he has not ruled out military action against iraq and syria warning a new coalition will be needed to destroy isis. It has oil, it has money, it has territory, it has weapons. There is no doubt in my mind it has undertaken and is planning further plots elsewhere. Early germanys client index falls to the lowest level in a month and a half warning the economy will stag nate in the Third Quarter. This years biggest banking ipo disappoints. Rbs trading lower after its u. S. Spinoff citizens prices below expectationes. Air france rejects claims by the french government that its going shell the expansion of its business unit, insisting the project is only suspended, this as a pilot strike continues into its second week. Lets have a look at european markets. Were looking at a slightly mixed picture today. The ftse 100 is absolutely under water, off by 0. 2 . The xetra dax lower. Off 0. 2 , as well. The ifo numbers, those were below expectations, the lowest number since april 2013. Now, its interesting to look at the session performance of the stoxx europe 600 today because we sell off right at the start of trading. But then rallied a little bit as we saw the ifo numbers below expectations. And we were debating why that is. Im saying maybe its because we were hoping for a stimulus. Will said maybe the numbers werent as bad as expected. Indeed. Interesting to see what the bund yield has done there. And it has gone up a little bit. Sorry, the price has gone up a little bit. The yield has come down. A bid suggesting that number is a disappoint. Five months in a row that german Business Sentiment has worsened. We were looking at euro dollar, 1. 2857. We are looking at dollar yen at 108. 53. Down by 0. 3 . There had been reports that the Prime Minister was concerned about the speed of the decline, down 0. 6 against the u. S. Dollar. Not so much concerned about the euro dollar. Moving on, citizens financial prices its ipo below the expect easy range of 23 to 25. The offering raises about 3 billion for citizens which is owned by rbs. Valuing the u. S. Retail bank at roughly 12 billion. Its the second largest ipo this year. Its also the biggest banking deal since the financial crisis. Rbs shares trading in the session down under 0. 3 . That was a pretty disappointing debut, wasnt it . Yes, it was. Rbss priority at the moment is to be shoring up its own capital strength as opposed to necessarily getting the best price. I guess from a strategic perspective, they are hoping it will be a slightly higher price. Overall, this is very positive for rbs because it is one step closer to privatization. Also in terms of the capital ratio and how it will be boosted. The capital ratio could be bostoned by 2. 3 . Is that too optimistic . It may be a little, a little optimistic. I guess the other thing that is really overshadowing financial stocks at the moment is this kind of inflation, as its been described. Aside from what we saw at barclays yesterday, weve got Interest Rates swaps sedge hedging. As times goes on, this will continue to crimp into the positive jaws. Do you think the regulators have gone too far since the financial crisis in that respect, putting too much pressure on the Bank Operations . Yes, it does appear there might be a bit of overkill going on at the moment. With just a couple of exceptions, a lot of these finds are obviously going back any where between 2006 and 2008. So things have moved on in terms of process and procedure, anyway. Having said that, its certainly marked the banks cause, so that in itself should at least mean that theyre going to pretty much keep the team with it on hopes. Jimmy chu, best known for its very high heels, an interesting time to go public because a lot of the european luxury players have been citing weak command in china. Thats one of the reasons theyve been missing their targets. Prada said earlier this week weakness was the result of its dim outlook. What are the thoughts on jimmy chu . Yeah. Now the luxury people, as well. Burberry is doing perfectly well in china. And yes, of course, any disappointing chinese Economic Data that we see will inevitably feed through. Jimmy chu needs to be very mindful of that when they come to the market, of course. Clearly this money is going to be used to i think its double the amount they have in china. Clearly theyre looking to be there when that kicks in. Theres the general consensus out there that a bumping in in terms of ipo that valuations will now have to come down. This is what companies will have to accept. Even after alibaba. If we look at the performance, theyre down 30 from their ipo price. Is that the right way to think . Its a very difficult time in the market generally, putting the u. S. To one side for a moment which has obviously been testing record highs. If you look at where the ftse 100 is today, were down in the year. So the likes of jimmy chu floated over the next week or two will be keeping a very close eye on the current market situation. Where do you see the index headed at the end of the year . Because we have stocks like tesla which have been weighing on the index this past week. We certainly do. We also have an index which by market capitalization is half made up of miners, oils and banks. That is clearly weighed down on the fact that the american indices have been doing very well. And the other thing, until recently, its been the strength of sterling. Companies have been reporting sterling has been repatriating those profits. On the basis that sterling was roughly 170, went down to roughly 160. Its now 1. 63 and 1. 64. Some of that improvement should filt he through relatively quickly when the impending Third Quarter season has hit us in a couple of weeks. Thank you so much for your time, richard. German firm rocket internet has set its ipo range from 35 to 42 a share. It gives a valuation of the company up to 6. 5 billion euros. It imitates successful businesses. Goldman sachs has become the largest bank to slash its growth forecast for the chinese economy, saying it expects growth to slow to 7. 3 this year from 7. 7 in 2013. Is there hope somewhere amid the slew of negative data . Log on to cnbc. Com for the full story. If people with just cut their growth forecast to around 1. 2 , 1 is. 3 . I wonder whether it cant just fall and drop two or three permission points altogether. Lets talk about the growth targets altogether. Thats been my view for the last year. The market is so obsessed. Now were looking at a deviation of 7. 3 . The u. S. Multi nationals, rely on growth in china. That is my concern. That makes it very, very hard to call which way its going to go. Absolutely. Jack ma, the founder of alibaba has been named the richest man in china. Wealth estimated at 25 billion following his record breaking ipo. But he has denied that hes in the pockets of politicians. People say, well, jack, in china, if youre successful, you must have a strong secret Government Support and this and that. No. I want to prove one thing. I told my team, if we can be successful, 80 of the young people in china can be successful. We dont have a rich father or a powerful uncle. We only have the customers who support us. Rising rents on sterling have made london one of the costliest cities to live and work in. Costs have risen almost 40 in dollar terms since 2008. Richard hunter is still with us. Richard, is this a bullish sign for the british economy . Its an important part of our economy, without a doubt. I cant help feeling theres some similarities emerging between the many, many different Housing Markets youve got in the states, for example, between states. And what were seeing in the uk. Youve got central london, Greater London and the northeast. If you look at some of the peripheral regions in the country, the Housing Market hasnt been that strong at all. But certainly in terms of what it feeds through to, house builders, etcetera, and the fact that we are short of supply in terms of newhousing should be positive for the uk economy. As you mentioned in july and august, we saw leveling off of the price increases. How different is the survey going look auto with some weakening of the sterling . There is a possibility, of course, that inflation may at some point start to go in a north direction again, which time is the likelihood that inflation starts to rise. At least on an ongoing perspective. That puts consumers in a better situation. Whether its then possible certainly in the london areas to get on that housing matter is a completely different show and one thats going to be different to solve. Housing prices are quite high. I know that firsthand. But youre not buying, are you . No. Im renting. But even the rental prices are quite high. At what point do you price out your consumers . At what point do you price out the consumer . Its a very good question. You have a number of very wealthy people from the likes of russia and the middle east, whatever it takes to be snapping with you in west london. From a financial point of view in the city, there are, of course, a number of multi nationals, some of whom will pay for their staff to be in the uk. So that will underpin the rental market. As youre finding out, of course. And it really is incredibly difficult to pinpoint exactly where people with inverted comments get tired of the london property. While demand is there and an open checkbook for many of these oligarchs coming over, it can only go one way. Well leave it there, rush ard hunter. Thank you. Moving on, we may have all dreamed of owning our own bat mobile, but how much would the monster set of wheels set us back . Jane went to find out. It sounds like gotham is under attack, but theyre actually remodeling here where you have the 1989 batman movie with michael keaton. This car, based on an old chevy impala, it has a rollsroyce intake. This continues to make money for warner brothers. The prequel called goth yom debuted and theyre currently filming a batman versus superman movie which comes out in 2016. But l. A. Is a car town. So look at these ims. Even though the bat mobile is sort of supposed to be a car, this looks more like a tank. An m1 abrahams tank costs 6. 7 million. What might this bat mobile cost . We asked a guy who knows cars. Okay. Nice. Its kind of cool because it looks like what we built. Ryan friedling house of West Coast Customs made on mockup ooh another bat mobile for a video game. He said the setup that he built was about 1 million. A working version of the one in the upcoming film is probably backside 3 million. And if it was armed as a defense vehicle . You have to make it bullet proof. Theres so many other pieces to it than just to look pretty and move around the drive. This thing has to, you know, go into war, i would say triple that. It looks like that dark knight vehicle, you know, that vehicle when it the pulls up, like something from the military, i think, almost like the stealth bammer. What do military contractors have to do . We talked to a couple of them. Oshkosh says, quote, the new bat mobile looks pretty cool, but there would be too many unknowns in order for us to give you a decent quote. And from text tron, quote, the real cost is in the tech and weapons batman may require. Also speed and armor and maybe some limited flight. Well have to see what it is in the movie. Friedling house says in the old days, you would make multiple mockups, but now theyre so expensive, you just make once. Im james wells, cnbc news. Youve already put in a order, right . 3 million. Impressive. No, i want a proper costume. Not any of the pajamas, but i want the proper metal and kited out. I want to see that on set. Still to come on the show, 20 years after launching its first store in tokyo, starbucks takes full control of its japanese operations. Is a new strategy imminent . Well discuss, next. This is a burrito made with chocolate, soybeans, and apricots. 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. Hello. You can go ahead and have a nice flight. Re. Music plays music plays traveling can feel like one big mystery. Youre never quite sure what is coming your way. But when youve got an entire company who knows that the fewest cancellations and the most ontime flights are nothing if we cant get your things there, too. Its no wonder more People Choose delta than any other airline. Starbucks has decided to quash ownership by booim buying all outstanding stock. The Parent Company currently holds about 40 of starbucks japan. Another 40 is held by a clothing firm and the rest of the shares are in the market. In japan, starbuck sess in the lead with over 40 market share in the coffee chain bus, but is facing increased competition from Convenient Stores which now brew freshly brewed coffee for around a dollar. Starbucks enters the japanese market 18 years ago and now there are around 1,000 stores around the country. The sales have been strong and the firm expects a 28 increase for net profits for the current fiscal year. The firm has said there will be no dividends for the current fiscal year. Thats all from it nikkei. Back to you. Makiko, thank you very much. The uk Prime Minister David Cameron has defended his position on the uk referendum. Cameron has been under fire after polls led to a tightening in westminster and financial markets. The pm says it was, quote, the right thing to do, but admitted he had been nervous with the outcome. I was extremely nervous and worried because im a passionate believer in the United Kingdom. I represent an english strointsy. Im also british and i cant about the potential breakup of our country. People might ask why on earth do you have a referendum . Well, we are democrats. Scotland voted for a separatist government but wanted a referendum. I think the right thing to do was to say, okay, lets have a fair, decisive and legal referendum. We all made arguments, arguments of the head and arguments of the heart about the deep belief in this country and the extraordinary things its done in the world. In the end, the result was a very divisive keep tu nighted kingdom together. This is settled for a generation and for a lifetime. That is, i think, a great democratic affirmation of the United Kingdom. And you are ready to live up to all that was agreed to in the heat of passion when one of the partners b wanted to see other people and you had this coming back together again . Absolutely. We made promises about a timetable for delivering more power to the scottish parliament, including power over things like taxes and expenditure. What were trying to do is find a settlement where the nations of the United Kingdom all feel comfortable inside this extraordinarily successful country. And that is what were committed to doing. And it goes slightly harry for british Prime Minister David Cameron. Hes reportedly set to apologize to the queen after being caught on microphones telling business magnet Michael Bloomberg how they reacted to the scottish referendum. Take a listen. Well, i cannot believe he did that. He should have known his mike was on. You dont do that in a public hallway, did you . No, particularly not talking about someone so important as her majesty. Wow. All this week, we are revealing some of the Key Headlines from cnbc and the corporate perception indicator, a Global Survey from mainstream to the executive suite. Today we are turning our attention to the street when it comes to job creation and wages. When asked who would you prefer to work for . Just 8 of respondents say a big corporation. However, companies fare better in russia and china where more than a third say they would like a job at a big corporation. Becky quick has been taking a look at some of the other Key Headlines when it comes to job and pay. Money, strategy, power. What matters most to corporations and their leaders . Cnbc and bursa sellers surveyed 25 about the ser seption of the corporation. 40 of the general population in developed economists perceive compensation as ceos most powerful motivatinger, thats above shareholders, customers and employees. 33 of Business Owners agree. 38 say respondents ceos make more money than heads of state and athletes. 60 of america says the top of the heap is getting wealthier. More than half, 58 , of Business Leaders agreed with that. The u. S. , uk and germany rank ceos as the most powerful people in society. But just 10 of the public in developed countries believe ceos are the most respected. In tech news, does your new iphone 6 have a curved screen . Its not supposed to. There are several reports showing up on apple forums of devices bending slightly after being in ones front pocket for a while. Sonys experion phone is also known to build after being in a pocket. Blk has reentered the smartphone wars with the release of its first major device since the overhaul of the company back in november. The passport has 56. 45 inches square screen. Blackberry has priced the phone at 599, cheaper than the iphone 6, 6 plus and the galaxy s5. We want to know if people out there like it. Absolutely. Are you going to get the new blackberry when it comes out . Will you stick with apple, samsung or lg . Join the conversation here on worldwide exchange. World would it cnbc. Com or krngz wex. We heard from blue horseshoe. He said if not an apple, you can keep it. There we go. Oergs might well be looking to get a blackberry. What do you think, carolin . Pepper boy has written in. He says for the truckladites what is that . Its people that arent in touch with the new fads. Apparently im one of those. Still using the old blackberry because the keyboard we eagerly await, looks a bit uncomfortable. But i guess as long as it doesnt bend, that thats a plus, isnt it . A couple months ago, we were talking about the bendable screens but of course theyre not actually meant to bend. This is not on purpose. But i wonder if that makes it easier to carry it in your skinny jeans. That was part of our conversation yesterday. Maybe you should fold it. In ten years time, you really want to fold your iphone the. There you go. I dont think 100 is enough of a cut for blackberry to take off. I think it hasnt got it has a small cult following, but it cant be break into the market farther. Maybe it should be going after the business customers, not the consumer. Coming up, pimco is in the spotlight where an s. E. C. Investigation. We will get you the latest after this break. Your customers, our financing. Your aspirations, our analytics. Your goals, our technology. Introducing synchrony financial, bringing new meaning to the word partnership. Banking. Loyalty. Analytics. Synchrony financial. Enagage with us. Welcome to worldwide exchange. Im seema mody. And im wilfred frost. It has oil, it has money, it has territory, and theres no doubt in my mind it has undertaken other plots elsewhere. U. S. Insies close at a fiveweek low with the dow having its worst day since august. Rbs trading lower after its u. S. Spinoff. Citizens prices below expectations. Pimco under pressure. Reports say the s. E. C. Is probing whether the bond guide places returns for one of its most popular firms. Announcer youre watching worldwide exchange, bricking you Business News from around the globe. Im carolin roth. Coming up on the show, bizarre square or plain ugly . Mrbs passport smartphone goes on sale, we ask if price is more important than style. Markets eyeing u. S. Residential sales data later today. In 30 minutes, we speak to the c he o of a tartup, hoping to disrupt the way we buy and sell our homes. And no one frost about dre. The rapper producer beats takes a number one spot on the list. We reveal the other contenders. Announcer youre watching worldwide exchange, bringing you Business News from around the globe. And welcome to the show. If youre just joining us, its been three straight sessions where all three major u. S. Insies have declined. I wonder whether this is an escalation or a bigger sign of concerns of investors. Is it escalated geopolitical tensions . Is it the slowdown in china, weaker than expected data out of the eurozone all seem to be playing a role in the selloff. Exactly. And the stoxx europe 600 started roughly flat and came back up, even though greater out of germany and disappointed. It will be interesting to see what the u. S. Futures expected. Will it be a fourth day of losses . Thats the big question. Take a look at the u. S. Premarket trade just to get an idea of what we could expect in todays trade. The s p 500, dow and the nasdaq. Arrows pointing to the upside at this point. Dow jones up about 16 points. Lets take a look at the ftse cnbc global 300 index, a good gauge of how stocks are doing around the world. Trading at 6,329, down just about 0. 2 in todays trade. Look at the european markets, that key german Sentiment Report came in weaker than expected. This after the september pmi data showed a dip in the manufacturing sector. That weighing on the xetra dax, currently down about 11 points. Will this push merkel to now act and invest and perhaps look into qe . That will be the question on the table. Right now, the ftse 100 is down about 11 points. French and italian markets seem to be showing a little bit of green outperforming its in europe. The cac 40, up about 10 points and the ftse mib up about 40 points. Carolin. If you go back to the bond markets, theres still a picture of the flight to safety. The tenyear treasury yields, 2. 53 . Worth noting the key yields went negative again. 0. 01 . The first time we saw negative yields there in about eight months. On the back of the ifo data, the lowest prince since april 2013 we saw a rise in bund prices yield just about that 1 level. Also want to draw your attention to what the tenyear greek yield has been doing. It has been rising, though it is off the days highs. This as some jitters ahead of elections potentially. So more worries about the periphery in europe. Lets talk about the currency markets because we did see a huge reaction. The euro dollar pair as a result of that weaker than expected ifo print this morning. 1. 2847 is what were seeing here. We have seen a little bit of a stalling in the dollar up trend. The dollar yen is down by around 0. 25 . 108. 62. A lot of people say that this is related to the fact that Prime Minister abe was voicing concerned about the spied of the decline of the yen rather than the levels. Is that a right assessment . Hi there, carolin. Lets talk about the china markets. They seem to be regaining composure. Theyve taken their forecast down. Its the defense and the infrastructure stocks that are lifting the Broader Market on the shanghai composite and they are likely to be the major beneficiaries of reform. That is why we are seeing strength there. The india scattered showers canceled some languages saying they were not issued in a transparent manner. On the indian markets, we are seeing some hefty declines. This has economic implications, as well. It will worsen appear already severe shortage of coal and it will raise imports. It has implications for trade and the deficit, too. We continue to watch this one. Overall, a fairley mixed picture out here in asia. There are pockets of risk aversion. There is a drag on the exporters and the broad nikkei, as well. Back to you in london. Thanks very much, sri. We are now joined by michael purvis. Three days of declines. Is this the start of a meaningful correction . Its the start of a bull pac. Im not sure how meaningful its going to be. I think the worst case is another 2. 5 down. Its been a 130 day moving average. Thats been right now 1925. So i think we are starting sort of a rollover here at part of this sort of, you know, two steps forward, one step back progression weve seen in the u. S. Equities over the last couple of years. This would be sort of a normal course of business here. When we rallied off those august lows, we never rallied too excessively or too aggressively the way we might have back in june and early july. So its been a little bits of a slow motion rollover. There is not a lot of catalyst in the immediate future here in the u. S. Earnings season coming up in the second week of october here. Some hedging would be in order. But, again, i think, you know, when you get to if we get down to 1925, it looks like everything should be set for dip buying at that point. Three days of cop secretaryive gains, but the focus is on the russell 2000. The small cabin decks continues to underperform in the markets. What does that tell us for investors right now . Its been a real source of frustration and some confusion for either broader investors. Small caps have been huge underperformers this year. Last year, the russell 2,000 was ahead of the dips. This year, sort of the few ekzs thats down on the year. And i think part of the story there is simply that they got overextended. Another part of the story, theres more Financial Leverage in the small caps than in the larger companies. There is you know, with people concerned about rates rising, you know, the small caps have been getting sole very hard and very aggressively. Weve seen other Interest Rates suddenly hit with aggressive telling during the summer. I think at some point very soon, the small caps are going to Start Performing to the upside once again because theyve sort of been overpunished here. Wow. Okay. Michael, you think its severe rate volatility. You think small caps actually are a buying opportunity. They would they fair in the face of a rising dollar . That is a very good question. The dollar has been rising, of course. The way i am generally, their earnings profile relative to, say, dow or s p orifice dak 100 companies which have much more exposure, i think the dollar, the strong dollar that seems to continue to be strong will at the margin certainly help in the coming two earnings cycles. Well see if youre right. Thanks for your time. And lets get you a look at whats on the radar today. August new home sales are out at 10 00 a. M. Eastern, forecast to rise by nearly 4 to an annual rate of 428,000 following more than 2 drop in july. A pair of fed officials are speaking this afternoon. Cleveland fed president Loretta Messer and chicago fed president charles evans. On the earnings front, accenture, paychex, kb home and vail resorts. Citizens financial priced below the expected range of 23 to 25. The offering range is about 3 billion for citizens, which is owned by rbs. Valuing the u. S. Retail bank at roughly 1 billion. Its the second largest ipo this year, but its also the biggest banking deal since the financial crisis. Bs shares are trading down about 1. 4 today. The s. E. C. Is reportedly investigating whether pimco artificially inflated the returns on a popular etf aimed at small investors. The wall street journal says the probe has been under way for months. And whether investers were given an accurate information. It is a violation of the Securities Law to give false information. Im not going to condone anything pinko did here. In a way, you shouldnt be too surprise that they are looking into how youre pricing this. What you have to say is that these bonds are very difficult to value. Theyre looking at the etfs, which have been very popular especially among the retail audience because it gives them ability to have exposure to stocks and securities. We should stress of course this time its an Ongoing Investigation and that pimco is fully cooperating with the s. E. C. It apartments regulators are putting more pressure across regulators in financial areas. Still to come, David Cameron talks tough on isi, saying the International Must must destroyed the organization. Chase can mean lower returns and fewer choices in retirement. Know 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. Welcome back. Lets give smu headlines. Degrade and destroyed. The uk Prime Minister warns Islamic State militants in an exclusive interview. Rbs pricing below expectations. And a report suggests the s. E. C. Is probing pimcos smaller etf for allegedly inflating returns. British Prime Minister David Cameron says he is looking at ways to increase the uks role in the Coalition Fighting Islamic Militant necessary syria. Cameron pointedly said he was not ruling out military action saying islamic terrorists pose a direct threat to u. S. And the u. S. What ps and i have agreed is we need a Big Coalition and we need something which is going to degrade and outwardly destroyed this dreadful organization. Weve tape part so far using spa plane missions, helping with information gathering, drop aids for those who have been afflicted and we very much support the action that the americans and others have taken. But we need to recognize this is going to take time, its going to take real resolution. It is something the u. S. Twitch to last night. Would the uk do the same . We havent ruled it out. Weve tape a number of steps so far. Weve taken a number of steps and we will keep looking at what more we can do. What i want to see, and im encouraged by what i have seen, i want to see a Big Coalition, i want to see the support of arab states on the grounds. I want to see the Iraqi Government asking for this action to be taken in confidence with its own forces. We have to learn the lessons of the conflicts in the past. Im confident that we play a big part already in this coalition with our long standing a allies, the its, and theres more we can do. You talked about the isis threat. What is the isis threat to the uk. What have we learned further about the threat to our country . I think its clear youve got here not a terrorist organization as it were leaching off the United States, here youve got isis, which is a terrorist organization controlling a state. It has oil, it has money, it has territory, it has weapons. Theres no doubt in my mind it has undertaken and is planning further plots in europe and elsewhere, specifically in belgium job in brussels. It was an isis plot that went into a museum and killed people. And the same applies to the United States of america. So this is a fight you cannot opt out of. These people want to kill us. They have us in our sites and we have to put together this coalition working with right across the board all those countries i mentioned to make sure we ultimately destroyed this evil ofgz. Have you identified the isis excuser in the video . We have done a lot of work and we are very close to that. The key thing is making sure we find them and making sure they do not escape justice. It is an absolutely hideous thing that these people have done. It is an absolutely appalling, depraved, barbaric act and we have to make sure that these people will find justice, whether it is justice meteed out in the deserts of syria or justice at home. Mrb will speak to the u. N. At 10 00 a. M. Eastern time. This arch, the president will joint a Security Team on terrorism. There have been rumblings about how president bush was never given the go ahead with those air strikes. Does it makes sense now going into the midterm . There are several factors at play here. Whether youre a republican or democrat, you dont want to look soft on terrorism. But you dont want it on your wrap sheet that you were advising the president to go to war again in the middle east. Nobody wants to take that banter on, as well. The president didnt go to congress and ask for authorize to do these strikes in syria. Is it the use of military force now at a broader capacity inevitable . Well, i think at this point, the u. S. Central command has essentially come out and said the strikes were very successful. Theyve also told us theyre going to continue with strikes. If they want people on the ground, they dont want to put americans there, the person powers only dont want to do that and i highly doubt David Cameron is going to get any support to do something on the ground, as well. In terms of uk public opinion, i dont see that happening. No, and i think its a particularly interesting point. We rewind 18 months. Troops did not go into syria the first time around because the uk took a vote to parliament which it fails and, therefore, the u. S. Thought they couldnt do it without u. N. Approval. I think that is a key issue that both obama, both cameron and western allied leaders dont want to go further than air strikes. No one wants the uncertainty there. We all know something has to be done. Everyone said this is a red line that theyre not going to cross and they want arab leaders to take more on themselves for these countries, iraq and syria, as well. Who is in support of these air strikes and who is against it . We understand saudi arabia, jordan and bahrainful involve in the strikes. We know qatar was in a supporting role. Turkey has come out and said we do support the strikes. Its a sticky situation for the turks. As you said, he supported them, but they came out to see they versus been involved in the air strikes yet. Thank you very much, as ever. Coming up on the show, blackberry unveiling a new phone, the passport. What are market experts saying about the phone . Well get to the latest after this break. Business philosophy is, reynolds . No. Not exactly. To attain success, one must project success. Thats why we use fedex one rate. Their flat rate shipping. Exactly. It makes us look topnotch but we know its affordable. [ garage door opening ] [ sighs ] honey, havent i asked you to please use the we dont have a reception entrance. [ male announcer ] ship a pak via Fedex Express saver® for as low as 7. 50. [ male announcer ] ship a pak via Fedex Express saver® 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. 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 does your new iphone 6 plus have a curved screen inspect there are several reports showing up of devices bending slightly after being in ones front pocket for a while. Sonys phone has been known to bend after being in a pocket. It is made of aluminum, a bendable and soft metal. What do you expect . Come on. Exactly. We have to wonder if this becomes a big issue for apple. The passport has launched a 4. 5 inch square screen and a kweertty keyboard. President obama has priced the phone at 599, chaerer than the iphone 6 and 6 plus as well as the galaxy s5. We want to hear from you. Exactly. What do you think of the new shape of the latest blackberry and will the price tag entice you to give up your phone . Weve had a tweet would said not a chance he would go for the new blackberry, but i know someone that could, and thats you, seema. Youve got three smartphones in front of you, two of which are blackberrys. Why have you got three . I think there is an audience that appreciates the key brt. But why are you got three smartphones . I am in the interim stage of just moving and in the process of taking in such with people in the u. S. And here in london. Therefore, you need three phones. All right. Were going to leave you a look at how the futures are trading ahead of the open on wall street. Green arrows across the screen after three consecutive days of losses for the u. S. Market. Imagine the luxury. Of not being here. The power you want with the fuel economy you dream of. Performance with a conscience. This is volvo innovating for you. 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 to worldwide exchange. Im seema mody. And im will fred frost. These are your headlines from around the world. The uk Prime Minister says he has not ruled out military action in iraq and syria, warning a Big Coalition will be needed to destroyed isis. It has oil, it has money, it has territory, it has weapons and theres no doubt in my mind it has already undertaken and is planning further plots in europe and elsewhere. U. S. Futures points to a major open with a fiveweek low with the dow having its worst day since august. The biggest banking ipo disapoints. Ipo trading lower after its spinoff. Citizens pricing below expectations. Reports say pimco is being investigated to see whether it inflated returns for one of its most popular funds. Announcer youre watching worldwide exchange, bringing you Business News from around the globe. If youre just tuning in, thanks so much for joining us on worldwide exchange. Here is a look at how markets are fairing after three consecutive losses for the u. S. Markets. We are seeing pretty many trade or implied he across the screen. Yesterday we did see a big move in the markets, the dow witnessing a 117 point drop. That came mostly in the last of trade, indicating investor saying cautious when it comes to the market. Now a look at whats happening in europe. Given that weaker than expected data out of germany, markets trade lower. Down about 18 points on the day. The ftse 100 down about 17 points. As we are showing you right here, france and italy showing a bit of green. Geno politics and weak data coming to the forefront. How do you make money in these markets . Here is is what the experts have been telling us this morning. Id say another 10 from here down side. Around 85. I can see that in the shortterm. I think a couple of reasons why, one is it depends on where the brent wti traded. I just got back from houston. Most of them are saying 7. 5 pi. We will slow down a lot of that shale growth. Were on the cusp and growth is going from stimulus to one of where the economy is more economically table. Whenever that happens, markets always question that. Ask when we move, is the economy actually sustainable . Were in that period, particularly in the United States at the moment. Its lacking. Its not taking this is the moment necessarily to sell. Its saying if you were to get a rally back up, maybe towards 1200, its probably not going to last. And the last guest there talking about the underperform of the small stocks. Were going into the end of the Third Quarter. Were going into jewish holiday. Usually as one of the market viewers has indicated, theres usually some drawback ahead of that. Maybe we shouldnt worry about it too much. If there is one thing the market has shows us, it does not follow history. The whole sell in may and go away. The s p 500 has steadily risen from may since september. And i think a bit of volatility in the equity markets has been expected. August new home sales are out, forecast to rise to 128,000, falling more than 2 drop in july. Our next guest is hoping to shake up the Real Estate Market allowing customers to buy and sell homes online with little need of an agency. Todd, thanks so much for joining us. A great day to talk about housing. The important data will help us get a better ug of where the u. S. Is standing when it comes to the economic recovery. The adoption of online has been a big catalyst. Yeah. Referee allows buyers and sellers to control the whole process. We Leverage Technology to make the process simpler and easier for everybody and lets them save and have a much better viewer experience. Then on the buy side, when youre ready to purchase, you can hit our one click coffer button and purchase a home almost anywhere in the country and well give you a rebate producing your net purchase price. Were really excited about this. We encourage everybody to check out the technology and see what were all about. I wanted to push you on this a little bit. The first thing that struck me was people in the u. S. Pay around 6 in agents for a typical transition. Is there no space for this model in somewhere like the british market . Im sorry, what was the question one more time . What was the last part . So in the uk, for example, agencies are a lot lower than they are in the u. S. If youre charging a fee, albeit a smaller one than typical agents, can this model work in other markets . Yeah, well, we think it can. Obviously, reducing costs and improving service and experience would probably work in any market. You say 6 . We refer to it as a 6 lie. The American Public is conditioned to think that it only costs a little 6 to sell your house. In reality, most people have mortgages on their home. For instance, the yarchl of a 500,000 home with a typical 80 mortgage. When you pay 6 to sell your house, its 30,000 youre giving away to a broker. So the cost to sell the house is more like 30 . That doesnt include Title Insurance costs and things like that. It makes i it hard for home sellers to keep any equity in their house. Todd, youre certainly not the first to come up with this idea. Are you willing to go lower in terms of those commissions . Listen, we believe that youve got to offer a value add to all of you customers. Were going for as little as 1 . You could literally list it, sell it, get into all the consumer facing websites and sell your house for 1 . We think that is a very good deal. Not only that, you can use our Realtime Technology to accept, reject offers, all from your smartphone. You can receive offers, counter aurs, reject offers. You can make offers. Weve streamlined the process to make it easier you do need less involvement from real estate agents, although we think real estate aekts are an important part of this process. Weve made it simpler, and you dont have to overpay to sell your house. Thank you fouror time. Riding strength on the sterling has made london the most costly city to live and work in. The uk capital has knocked hong kong off the top spot for the first time in five years. Log on to cnbc. Com to discover the other costly cities. There you go, london at the top of the list. No price. Lets take a look at todays other top stories. Dr. Dre was ranked the highest hip hot artist. He earned 316 million in the past year thanks to the sale of beats. Jayz raked in cash from concerts, his rock nation tour and his latest album. I think its amazing how these artist res now putting on their entrepreneur hat and finding ways to penetrate their brands. And come out being extremely successful. Im excite to see how dr. Dre is used inside of apple. Our producer just asking me if i could rap my response to this question which i can assure you is not going to happen. Its very impressive. Theyre creating huge music off the back of it. These guys make a fortune. I want to hear that wrap. Come on. It will be a private one maybe later. Maybe another day. Home depots massive data breach is starting to show up. Criminals are using stolen credit and card information to buy prepaid credit cards. Hank greenberg is taking the u. S. Government to Court Next Week and it and he has some big financial backers. Private Equity Investor j. Christopher flowers have contributed about 15 of greenbergs expected legal costs. Coming up, could mrbs new past port put the hand setmaker back in the smartphone race . Well discuss after the break. Your customers, our financing. Your aspirations, our analytics. Your goals, our technology. Introducing synchrony financial, bringing new meaning to the word partnership. Banking. Loyalty. Analytics. Synchrony financial. Enagage with us. Its in this spirit that ingu u. S. Is becoming a new kind of company. Ing u. S. Is now voya. Changing the way you think of retirement. Sometimes they just drop in. Always obvious. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Do you still love your blackberry . The struggling smartphonemaker unveiled the passport, 13 mega pixel camera, 30 giga bytes of storage. But most of all, a square screen. The passport will retail at just under 600 without a control in the u. S. Is price enough to drive demand . Wilfred, that will be the question. Well see, a 150 decline in price, will that be enough . And we want to haesh from you on this. Will the price tag entice you to give up your existing phone . If you want to join the conversation here on worldwide exchange, get in touch with us. Worldwide cnbc. Com or cnbcwex. Blue horseshoe says if its not an apple, you can keep it. Sure, yes, he would be a blackberry. Herr darling says not a chance he would go to the blackberry. Once a man known only as the panic says he would consider it, but only if it came with an iphone of, as well. Harsh words there. The ipo market has been harsh this year evidenced by alibabas offering last week. Mary thompson joins us from cnbc hq with the full story. There have been ten ipos this year and is coming to market today. That is below the expected range of 23 to 25 a share. The deal raised 3 billion valuing citizens, owned by the royal bank of scotland, roughly 12 billion. Now, the Financial Times reports rbs had to cut the ipo to alleviate investors concerns over the banks ability to deliver on its financial target. Rbss stake in citizens will fall to 75 after the ipo. So a 3 billion citizens is the second largest offering this year. According to deal logic, its the Third Largest ipo since the re sear Research Back in 19d 85. Now, deal logic says the average pop for the ten bank ipos this year is 3 versus a 14 jump for all ipos. Since going public, ipos have gained an average of 6 this year. The worst performing sector this year, among them, saab tander consumer usa is down 2r5 since going public in january. In the meantime, the S P Regional Bank index is down 5 this year. The luke warm reception for citizens underscores the management this year. The fdic says the uk bank province did top 40 billion in the Second Quarter. But the industry has been pressured by low Interest Rates, restriction on consumer fees and strong trading. Rbs bought citizens back in 1988 in an attempt to expand its global operations. Back to you. Here is a quick reminder of your headlines this morning. The uk Prime Minister warns Islamic State militants in an exclusive interview with cnbc. Rbs prices lower. And a report suggests the s. E. C. Is probing pimcos small investor retail for allegedly investing returns. Top story this morning, the s. E. C. Is reportedly investigating whether pimco artificially inflated the returns on a popular etf aimed at small investors. The wall street journal says the probe has been under way for months and bill gross, who manages the fund, has been questioned. Kelly fratto, first, let met get your thoughts on this probe. Anyone we look at how firms are marketing, especially with retail investors, we know ever since the financial crisis, theyve had a big interest in pricing of securities and maybe some irregular layerty. Im troubled by the way it comes out. These leaks from the s. E. C. Are damaging to the firmes and theyre not in a position to defend themselves publicly because of ongoing s. E. C. Investigations. But these involve, you know, odd lots of bonds that are really difficult to price. The reason that firms get outside pricing is to avoid mispriding them themselves. Its not clear to me right now that there was anything improper, but that doesnt preclude any kind of investigation from the s. E. C. To make sure there isnt any improper activity. Again, tony, we know we dont want to condone anything. No, never. Is this common practice . Arent other people doing that, too . And why is the s. E. C. Singling out pimco . I think theyre looking across the industry and all kinds of products that are you know, that are marketing to retail investors. That is what the s. E. C. , really, should be doing. Im not saying its outside of their purview, but i think, you know, these kinds of these kinds of leaks, you know, really detailed information about bill gross coming in and being interviewed, you know, its just the images, its not the way to really encourage future cooperation from firms with s. E. C. Investigates. Really done just to embarrass some of the parties here. These are complicated questions. Theyre involving difficult parts of life. If you think about it, these firms hiring outside firm toes handle pricing. The reason you do that is so that you dont get accused of just what they seem to be accuseding pimco of doing, of selfpricing these assets. You want outside pricing. Its a difficult, you know, investigation. Tony, great point there. Stay with us a little longer. Carolin, 140 Global Leaders are headed to the u. N. Headquarters in midtown manhattan today. What will on their agenda . Well bring in some experts and have that conversation, coming up 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. Welcome back. We had significant weakness yesterday as air strikes began in syria and a bit more weakness today as german Business Confidence data disappointed this morning. The ftse 100 is off 211 basis points. Germany is off 0. 1 . France and italy slightly bucking the trend. Seema, u. S. Futures. That data out of germany disappointing this region. You see germanys markets underperforming. When you look at the u. S. Markets after three days of consecutive losses in the u. S. , we are seeing futures pointing to a higher open. We did see the russell 2,000, as well, underperform about 1 in yesterdays trade. Investors trying to understand what the the reason for that trade. Was it the geopolitical tensions, the news of the of china . Well have to wait and see. The u. N. General assembly fully gets under way today in new york as leaders get their chance to address members. This afternoon, the president will chair a u. N. Council meeting. Lets get back to tony fratto, a cnbc contributor. Do you think the u. S. Strategy in terms of the air strike necessary syria, does that make sense or is it careless because a thought could benefit from this . Yeah, thats a big concern, carolin, of course, is that if youre going to go into syria and take on this enemy, we have to remember its the enemy of the assad regime in syria. But i think we have to pick our enemies and prior advertise them in order in ways that make the most sense for the United States right now. And maybe a deal having to deal with assad later. But its very difficult. You heard in David Camerons interview, he used the words degrade and ultimately destroy. President obama has used that language, also. I see how they can degrade the enemy here, both in iraq and syria, destroy is a much greater challenge and a longterm challenge that is going to involve a lot of cooperation from the groups on the ground, including the iraqi armed forces, the kurdish groups, the sunni tribal leaders and some of the people who are fighting the assad regime in syria, as well. So its a very difficult challenge. It was an aggressive start to the air strike yesterday and it seems like its having an impact. They can get at supply lines and training areas and other materials that are important to isis. Its going to be very hard to dislodge them from ground they already hold. Tony, thank you very much. Thats tony fratto, managing director at Hamilton Place securities and a cnbc contributor. Of course, the air strikes on syria weighed on markets significantly yesterday. I wonder whether that will continue into the u. S. Market today. And it seems like the fight in the Islamic State is going to take a long time. Were going to have to wrap it up here. Thats it for todays show. Squawk box is next. Good morning and welcome to squawk box. Air strikes on isis give another opportunity to take out an unrelated terror cell said to be plotting the United States or europe. The impact of home depots massive data breach is starting to surface with fraudulent transactions showing up across the nation. And a pimco fund run by bill gross himself is under scrutiny by the s. E. C. It is wednesday, september 24th, 2014. Squawk box begins right now. Good morning, everybody. Welcome to squawk box here on cnbc. Im barack obama along with joe kernen and andrew ross sorkin. We are back at headquarters with lots of stories this morning, including one coming up about a bendable iphone. The new iphone 6 is a bit thinner, but is it supposed to be this flexible . We have that coming up later in the show. Lets start things off this morning with the markets. The dow is coming off its first back to back triple digit loss. This in over three months. Small caps continue to struggle. The russell 2000 is now nearly 8 off its record high back in july. Down another 1 yesterday. If you take a look at whats been happening in the markets this morning, the futures are indicated slightly higher, ever so slightly for the s p futures. Its fractionally higher. Dow futures look like they are up by about 14 points above fair value. Andrew has some of the mornings top stories. Andrew. We have Corporate News this morning. Pfizer now reportedly making another run at an inversion. This time holding takeover talks with activists