Transcripts For CNBC Worldwide Exchange 20141202

Terms of what were communicating. The ruble recovers from its biggest daily loss in 16 years, but russias woes claim another victim. Shares in Italys Saipem plummet. China has its biggest daily rise in over a year with banks and grocery stocks leading the way. Announcer youre watching worldwide exchange, bringing you Business News from around the globe. Brent and wti are currently trading lower after bouncing back during the u. S. Session yesterday. They are up today, up 0. 66 and 0. 23 respectively. Wti crawled back around 5 of recent losses to move back above 65 a barrel. Some oil drillers have responded to operations by putting their operations on hold. Operators around the globe are looking at stacking their rigs, meaning making them temporary idle. The 3406 is aimed at lowering costs despite the offset in the market, but remaining ready for reemployment when it recovers. Imf chief Christine Legarde says while low oil prices are good news for the u. S. Economy, they do add a threat for russia. She added she expects u. S. Oil to rise 3. 2 pefrs. Interestingly enough, that view was echoed by u. S. President William Dudley. He said the Falling Oil Prices boost income for u. S. Households. He said it was reasonable to anticipate a rate hike in mid 2015. Im not going to opine on the appropriate level of Interest Rates. What i will say is weve said exactly what we think the drive off lift of monetary policy. Were going to talk about federal funds rate, this being our primary tool in terms of tightening monetary policy. And weve described through the summer economic objectives that we think are likely to occur. I think were communicating clearly with the markets. Joinings now, forad. Lets talk extraordinary volatility we saw friday and yesterday in the oil prices. Started off sharply lower. Recovered in the trading session. The ruble itself has taken a long time to recover. Why is russia being so much more effective than other places . The reason russia is being affected is because so much of the economy is dependent on oil. So you had a situation that because of the actions of putin and the issues in ukraine and the sanctions placed on russia by the western economy that the russian economy was already in a draft state. The fall in the oil price compounds that problem and thats whats being reflected by the collapse in the ruble. I do wonder if the market is overly optimistic about the drop in the market. Analysts come on and say lower oil prices, that will boost spending, but theres a lot of countries that are dependent on oil revenue. That could potentially Impact Global growth if Oil Prices Continue to drop. I think youre right on both points. The first point, you see the commentary where people have immediately tacked the fall in the oil price to an immediate tailwind fall for the u. S. And the uk. But actually, it takes time for these things to filter through. Dont expect prices at the pump to collapse very, very quickly. So the consumer will feel it in their pocket over time. What really matters is what happens to the oil price over the medium term. I think theres a reasonable expectation that oil prices will remain lower. But thats what really counts over time. And what about for the european economy in particular, does oil prices how much longer do oil prices need to stay where they are to act as extra stimulus for the european economy . Thats a great question. I would probably say we would like to see oil prices longer over the next 12, 18 months and beyond that. Certainly for europe and for the southern european economy necessary particular, they are net exporters of oil. As weve seen, only a little while ago. These are the most sort of fragile economies in europe with lots of structural challenges. So anything that eases the pressure on these economies will be a welcome evolution. The other thing was the bond market. Significant yield compression across europe, yields at record lows. It does beg the question, what would be the point in outright qe in europe . I do agree with you. I think for a lot of people, theyre looking to qe, theyre looking to the ecb to stimulate the economy through the injection of liquidity. And there is actually a very low empirical evidence that that in itself is going to generate growth. What we need, really, for europe is continued reform, reform of intractable labor markets in a measure to encourage banks to lend. These are the things that are going to make a much more meaningful difference for the progress of europe. Thanks so much. Well be back in five or ten minutes time. The shanghai composite has posted its biggest daily rise in more than a year. Leading the way, bank and brokerage stocks. Korea jegarajah is standing by in singapore. Wilfred, good to see you, sir. Surging in the afternoon by more than 3 on the shanghai xotit at the close. This is the best day since september 2013 for the shanghai comp. Why . A lot of the brokerages and the banks went up to buy their maximum allowance. A lot of them are running the idea that we could see further stimulus in the form of a cut in the rrr. Remember the rrr has been cut previously for a select few banks. Theyre talking about a unive e universal cut across the banking sector. Some saying that could happen as early as the middle of this mop elsewhere, we are seeing strength for the hang seng. We saw a snap back in oil. The market up by 1. 4 on the s s p asx 200. Its been that way for the past 16 months. Although you have to ask yourself, given the fact that Commodity Prices continue to get creamed and thats affecting st terms of trade in australia, are we inevitably moving towards some kind of rate cut action in 2015 . The futures markets are certainly indicating its that way, theres a 60 probability that we could see some action in august. Thats where we stand, seema, and wilfred. Say hello to peros for me because we used to go to School Together many, many moons ago. Love it. Thank you so much, sri. How are you doing, mate . Very, very well. How are you doing . Good man. It wasnt too long ago, we used to play dungeons and dragons together. I think we were far cooler than that, sri. I dont know. The geeks inherit the earth, my friend. Youre looking very well, mate. Good to see you. Well, lets move on to European Markets, which as you can see are in the green partly because of the strength in asia, partly because they were in the red yesterday and partly because oil has recovered. Its now in positive territory and its dragging Energy Stocks up with it. Stoxx 600 up 0. 9 and its strengthened throughout the trading session in the last hour. The stoxx 60, up 0. 8 . Lets look at the individual European Markets. Where is the strength coming so far today . The ftse 100 up 1. 1 . Of course, heavily reliant on energy and commodity stocks. Theyre doing well proportionally compared to the rest. Dax up 0. 6 . Italy bouncing back, it was one of the biggest losers yesterday, today its up 1. 1 . After a week of yield compression and bond buying in the u. S. , just see some profit taking. A little bit of bond sales. 2. 22 . Were just coming off that 2. 22 level on the bond yield. We saw bonds pick up a little bit in europe, but not to the same strength. 0. 73 in germany. The tenyear in italy is hovering above the 2 mark. Lets look at forex. Theres not too much going on in some of the main Currency Pairs today. The euro giving up a little bit of ground. The u. S. Dollar strengthening against the yen. Still below the 1. 99 handle weve been hovering around for the last week. The aussie dollar down as much as 7. 5 before hovering to be almost flat yesterday. It took longer to recover than the oil price. Mr. Putin still claiming that speculation is moving at very hard to not look at the fundamentals. Its so reliant on oil. Its been very much affected by the weak oil price. Individual stocks, aviva has agreed to a takeover of its g m german rival, friends life. Friends life up 3. 4 . Royal mail as opened lower over the new rules for delivering mail in the uk. It claims a rival was being given an unfair advantage. Its down 2 . Enjoying a nice bump in trade, Dassault Aviation is up 3. 6 . Dassault aviation might be closer to a huge deal with india worth 15 billion to provide 126 jet fighters. Actually, a contract was announced about two years ago, but so far, france and india were unable to find an agreement on some key points. The first 18 planes will be made in france and transferred to india. The remaining aircraft will be built on location by a staterun company. Rival manufacturer, which we are competing against, are hoping the deal to collapse and make their own offer and get this significant contract. But on the french side, the government was very cautious. The mistake that was made with brazil in 2009. At the time, they placed an order for 56 jet fighters. The deal was announced by the french president sarkozy and but the two kins failed to agree on the transfer of technology. It choose another provider, sweden, with its jet fighter. So it looks like it definitely is about to sign its final deal and the stock is up 4. 5 . Back to you. Coming up on the show, a revival in the pc market is breeding life back into some specific tech stocks. Were going to speak to the cfo of seagate tech about what this means for the companys bottom line. And u. S. Automakers are gearing up for what could be their best sales in a decade. But which stocks will be the biggest winners . We will discuss that. And as Goldman Sachs gives clients a chance to invest in uber, we get your thoughts on whether the taxi app is overvalued. Thats coming up. [sound of crickets] brii,brii,brii [male narrator] weve all heard how military veterans adjusting to the civilian world may have. Certain. Issues. 2. 30. 70. If only everyone had this issue. No matter what challenge they face, easter seals is here for americas veterans. Between the u. S. And the uk is quite surprising in equity markets. The s p is up over 13 this year compared to a fairley flat performance for the ftse 100. Head of european equities at fidelity worldwide, perez, its clear that the u. S. Has a structural argument to be outperform i outperforming is that fair . I think thats absolutely clear. Theres a heightened degree of nervousness around the political environment in the uk. I think when you look at the referendum as being a far, closer run thing and then we have the general election coming up, i think that creates some nervousness in the minds of investors and especially with respect to the pace of economic recovery. So you see now the rate expectations between the u. S. And the uk start to die verge. And the equity market die verging, as well. And what about the make up of the indices . I suppose the u. S. Is made up of a very different set of stocks than the uk. Is that had an effect, as well . Of course. I think when you look first, because the overperformance of the u. S. Versus the uk has been going on for an extended period of time. Part of that has been because, you know, commodity stocks in the uk have been weak or more recent resources stocks have been less strong. But i think when you look at kind of the International Profile of the uk market, actually, the rising dollar is very positive tail winds for the uk corporate sector. And do you think so far this year the u. S. Has been the best house in a bad neighborhood . Can that rally continue into 2015 or at some point does valuation become a big concern . I think that the markets overall, for equities overall, i think they still represent relatively good value in terms of asset classes. Certainly demand for equities continue. But i see that the leadership that weve seen from the u. S. , at least over the next 12 to 18 months, could be challenged by other areas, which are greater beneficiaries from the rising dollar and the Falling Oil Prices we talked about earlier. We talked about the equity market performance, of course, the currency is a similar case where sterling has been weak against the u. S. Dollar despite fundamentally a good economic outlook. Weve got George Osborne coming tomorrow. What are you expecting from that . And as we head into the beginning of the year, do you think its clear either of the parties can have a clear electoral year . I think its going to focus on the economy. I think thats really know, as youre preparing for the run into the general election, i think youll see some of the conservatives campaigning, focusing on the economy and their ability to manage the economy. It is a strong majority, the mandate from people, we see it not only in the uk, but elsewhere across europe. The mpc, its a conservative. Looking at the uk, we have the autumn statement coming up. At the u referendum as well as the may election. Absolutely. I think it could weigh on sentiment. But in terms of actually what happens to corporate earnings, i think if you continue to get the sort of moderate weakening compared to the u. S. Dollar, i think that becomes corporate Earnings Growth. You have two things in your favor, you have lower expect azs in terms of valuation, but you have the scope for corporate Earnings Growth to outperform relative to the u. S. As we look into 2015, how is fidelity positioning itself within Continental Equities . For us, its not a question of country, its a question of looking at individual companies. What were trying to do is concentrate on high quality franchise with businesses that are well spread internationally, low capital intensity, good pricing power, that they can sort of, you know, benefit from this easing of input costs that we are seeing broadly across the market. We talked about oil, a base Metal Commodities have been easing, i. T. Costs have been easing. All of those can be a marginal tailwind for the sector. Are dividends important . From what i understand, stocks in the uk have an average dividend yeel of more than 4 in comparison to the u. S. Around 2 . If youre looking at yields, it might be better to look at the uk. Most investors look at the total return that they achieve, the combination of Capital Growth and income. I think yield becomes a very important component for us to look at is probably is quite a wise way to ascertain value between markets and your total return experience as a shareholder. Thank you very much for joining us. Much appreciated. Perog ferdinand. Now, one sector that got a lot of attention yesterday was technology. It was a tough day for tech investors on some of the internet names. Alibaba losing about 5 . Twitter down more than that. Amazon moving lower after changing the companys outlook to negative following the announcement that it was issuing new debt. But what caught the attention of traders was apple. This after Morgan Stanley said it was trimming its position in the company by 1 . App apple, by the way, witnessed its largest drop in ten months. Down about 3 in yesterdays trade. We should put this into perspective. Some of these stocks, apple as well as alibaba, they have been some of the big outperformers so far in 2014. Apple is up about 40 . At the end, it oenld ended the day down about 3 . I suppose, as youre saying, boaringly, tans has to be a bit of profit taking. Ive tried to think about what other possible reasons. Maybe people were thinking about the change in samsungs shareholder culture moving forward. Perhaps people decided tim cook has achieved all he can already doubling the share price in three years. At some point when you look at the stock continuing to rise, up about 30 . Investors have to figure out whether the stock can continue or if now earnings have been priced into the stock, which i think is something that investors are trying to reevaluate as we approach tend of the year. And perhaps people want to be repositioned into stocks that have exposure into the pc market. For a look at that, we will be talking to the cfo of seagate later in the show. Head to cnbc. Com to find out what some of the other reasons for apples share price selloff yesterday was. Sticking with apple, opening arguments are set to begin today in the antitrust trial. The company is accused of using its Digital Rights technology to assert its dominance in the music market. Plaintiffs claim apple made updates to prevent ipods from playing songs not purchased through i tunes. And Goldman Sachs is reportedly offering its clients a chance to invest in uber. Goldman has a new convertible Debt Offering for their customers who typically have a net worth of more than 10 million. The sale could raise hundreds of millions of dollars in 2009. And we do want to hear from you on this topic. Is uber overvalued . Is it a name you would consider getting into when it hits the ipo market . Join the conversation here on worldwide exchange. Worldwide cnbc. Com or cnbcwex and our personal handles are on the screen. I have to say the first thing that comes out of this for me is if i had loads of money, i would invest it with Goldman Sachs. You only get first option to invest in these companies. True, but is it fair that they get access to invest in these companies before going public. I suppose the only reason goldman gets that opportunity is because Investment Banking division is helping the company get to a listing. Theres a lot of overlap there, isnt it . Absolutely. Uber has raised more than 1 billion from institutional backers, which includes Goldman Sachs and several Venture Capital funds. So its well funded. Back to oil, the plunge in oil prices in recent months has led to a crude shock for one of the industrys biggest billionaires. Robert frank has more. Harold ham has loss more money in three months than some have made in a lifetime. They were worth 20 billion in september, but as oil prices have fallen, so have his share price and hamms fortune. It basically cut his wealth in half. That works out to 100 million per day or 4 million per hour over three months. Hamm is still worth 10 billion, but he has another problem and thats his dworps. He has to pay his exwife close to 1 billion. Her Attorney Says she may appeal for the higher amount. He started with nothing, the son of oklahoma share croppers, and he got his start pumping gas before building one of the largest exploration and Drilling Companies in the u. S. As he once said, quote, i still fear falling back to that level of poverty. You cant escape it. With 10 billion, i dont think you have to worry about poverty, but oil prices are clearly a big concern. Back to you. It absolutely is. Coming up on worldwide exchange, as russias european pipeline plan goes south, we see what the next move will be as google remains earn pressure. European oil stocks rally leaving the stoxx 600 higher amid a volatile trading session for brent and wti. The imf raising its growth forecast for the u. S. Due to weaker energy prices. This as energy fed president William Dudley tells cnbc americans will be better off afterwarding a 2015 rate hike is reasonable. Were being very clear in terms of how were communicated. We said exactly what we think could lift monetary policy. The ruble recovers from its biggest daily loss in nine years. Moscow canceled its pipeline project to supply gas to europe. Chinese stocks made the biggest daily rise in over a year with bank and brokerage stocks leading the way. Lets take a look at European Markets and how theyre trading. Disappointing pmi data did weigh on european stocks across the board. Right now, we are seeing a rebound. Take a look at the xetra dax, bam above 10,000 for the First Time Since july of 2014. Up just about 0. 14 in todays trade. The ftse 1100, thats the outperformer, up better than 1 . Italys italian markets up 1 despite seeing a contraction in gdp in the third quarter. The cac 40, french markets, also in the green up 0. 8 . A great way to look at stocks across eurozone is the stoxx 60. The index is up 4. 5 just over to past month. Russias gdp is likely to contract in 2015. Quite a significant downgrade in the Growth Outlook for the russian economy. That is coming from a Economy Ministry mip sister. Theyre basing their projections on 80 a bare coming from a forecast of 100 a barrel. They say the ruble is likely to remain weak. The average rate for 2014 is 49 rubles per dollar. Recession is there in q11 of 2015. Gdp growth down to 0. 8 as i said earlier from down 0. 8 contraction from 1. 2 growth. Quite a significant decline in their forecast. Were talking about western sanctions weighing on its economic output. Of course, the ruble and now a drop in the price of oil. Russia is one of the companies reliant on oil the ruble did stabilize slightly down on the russian dollar. Declined as much as 7 against the u. S. Dollar at one point posting the biggest intraday decline in more than 16 years. This despite reports the Russian Central Bank may have intervened to prevent steeper losses. They suggested putting in Place Capital controls as it faces increasing funding problems. Russias south stream pipeline providing supply to europe looks unlikely to happen. Vladimir putin said against the 40 billion project made it no longer viable. Gazprom will instead look to supply a pipeline to turkey. The move is weighing on italian oil Services Firm saipem trading down sharply in milan, down 8. 8 . Head of research at boost et, victor, weve been trying to discuss and figure out how the drop in the price of oil is impacting different parts of this market. Look no further than russia. How will russias economy down in 2015 if the price continues to drop . Look, its heavily dependent on oil and the exports drive the economy more than anything else. I think the impact we are seeing on markets is playing out on the bond markets anywhere else. Its in dollar terms that its underperforming. I think the real risk within the bond markets, we see the fiveyear bonds rising 400 basis points since summer. I think the risk is the Russian Consumers had a deal with the profit of rising inflations, inflation which needs to be managed by putin. How is he going to do that . Nobody really knows. But i think as far as europe is concerned and how we see the European Markets evolve, i think there we are seeing defensive positioning, people looking at choices. So the volatility compels many investors to shortterm build hedges around commodity exposure. The Economy Ministry has cut their outlook from growth to 0. 8 contraction. Does the sizes of the change surprise you . I wouldnt say. Look, these projections adjust every time oil adjusts. I think longer term what is important is, again, how can Russian Consumers actually, russia corporates finance themselves sustainablely over the next 12 months or so. Then look the at the bond market for your appears. Does the oil price threaten putins power in russia Going Forward . I think short therm it wont. Its a nice caution but, of course, it becomes a political question once it faces higher inflation. Against, we need to look at how the russian consumer is facing inflation and how the central bank bonds. And the Economy Ministry has come out and said the ruble is going to have a strong impact on inflation. That is one issue. Weve touched on that one already. Lets touch on the sanctions. Will people at home blame putin more than they might for the oil price . Possibly. At the moment, you dont see a lot of movement of house hose centers. I think one could indicator is intieg dollars and selling the ruble. Still trust the government to deal with this properly. I think, again, i repeat my previous appears, its the inflation that is going to be the key driver. What putin can look credibly in front of inflation. If inflation stays under control, below 110 , probably the russian population will give putin the benefit of the doubt. Once it starts to acceleration, and it starts undermining real wage growth, its probably going to put more pressure on ruble from the on the russian government to do something. And does that help exports at all, given the big drop that weve been seeing in the ruble . Yesterday, the biggest drop in the obviously since 1998. Does that help exports . Shortterm, its hard to see whats going to happen with Russian Companies given profitability. The more the oil price drops, the more it becomes an oildriven business. I think shortterm, youre not going to see much. But i think longterm, there is a risk that were going to see, you think, the decline numbers. And stepping away from russia itself, oil and energy in general, youre saying you want your clients to increase that as we get near the end of the year . I would say position yourself more and look for dividend stories. I think dividend is being a key driverer for any investor who looks for equity exposure to dampen the volatility in Financial Market and earn some yields. Bear in mind, the yield differential between the tenyear european bonds and the dividend yields is around 2. 5 in europe. The volatility in bond markets in europe has been sa pretsed by drag draghis receiptry. Just a couple of years ago, we saw volatility. I would argue the new safe haven is strong Dividend Companies in europe. The ftse 100 is outperforming on a bed of strong dividends. You have to have companies that have sustainable growth. Right now for a lot of these energy companies, thats in question given the price in the drop in oil. I agree. They also have to look for consumer names, health care, lots of dynamics happening in the telecom sector, as well. And moving to more defense such as health care and consumer names. Victor, thank you very much for joining us. Much appreciate it. Thank you for having me. Brian sullivan sent this report from u. S. Shale production companies. Williston, north dakota, its noun as the bakken region and the stock markets have been very, very hot around this area until recently. The irk is not so much the suddenness in the drop in oil price, but rather how long the price of oil says at these lower levels. It would take an excess of six months or a year, probably longer than that. We still have a lot of work to do on the wells that have been drilled. Theres a lot of infrastructure to be put in place. Theres a lot of jobs. The wells that have been drills, theyre not going to be shut in. So when youre looking to invest in some of these names, you have to know what their break even costs of production are. Thoughts wells could be, in wall street particle lance, uneconomic, meaning not profitable. Some of the bigger players have lower costs of production. They can sustain these levels of pricing, although they would prefer to have higher, they can deal with it. So the issue becomes not just where oil prices go, but how long they stay low and whats going to happen to the pipeline companies, the Real Estate Market and even the banks who have made a big time living in the last couple of years off this major bakken boom. That was Brian Sullivan in north dakota. By the way, it was negative 10 degrees in north dakota while he was doing that reporting. Do you think how cold that would be . Better brian than me. Go brian. Auto marriages reporting sale with a big boost from early black friday deals spurting consumers to buy suvs and pickup trucks. It could flows with the 17 million was last matched in august. Chrysler, the big winner. Sales are expected to rise more than 3 . Low beam headlights could stop working on gm. The recall affects all the models on the gn cl envoy, chevy trailblazer. They have now recalled more than 13 million vehicles worldwide this year. Gm thus far is trading down about 0. 5 in frankfurt trade. The recall over defective air bags made by jakarta continues to growth. The nikkei turned today that takata is preparing to expand the recall of potentially faulty air bags nationwide in the u. S. Some of the air bags have pieces of middle potentially injuring passengers. We havent yesterday heard from individual carmakers, but the total figure is expected to grow to another 7 million vehicles. The companiess shares have nose dived sid minutes second. Tak at a a will express its action plan tomorrow. Moving on, design flaws caused the crash of a jet last year. The lithium ion battery experienced a short circuit after another battery overheated on a flight. And coming up on the show, were going to talk india. Taking a look at central bank kit frequency australia holds rates for the 16th straight month and the rbi comes under pressure. Thats coming up next. Everyone has questions about money. You know, i think about money kind of a lot. Moneys freedom. Moneys always on my mind. Credit cards. Mortgage. Debt. Its complicated. Its not easy. Im not a good budgeter. Unfortunately, im a spender. I would love to learn more about finances. So theres questions about the world that all of us have, especially about money and finance. The goal of khan academy and Better Money Habits and the partnership were doing with bank of america is to give people the tools they need to empower themselves. The reserve bank of australia has held Interest Rates at record lows citing sluggish Economic Growth. Speculation of further cuts has mounted predicting the rba will cut rates to 2 basis points next year. Indias reserve bank has decided to leave itself benchmark Interest Rate unchanged. However, it did signal it could ease policy. Weve been get something comments from Indias Central Bank governor. To some extent a surprise by the fall in inflation. He says early signs of inflationary expectations are coming down. He would says they will go towards a real Interest Rates of 1. 5 to 2 in the longterm. Lets get market reaction. Indias consumer inflation rate is below the target. Why arent they cutting rates . So far, its below the starting of ribs. There is one reason the inflation rate has been low so far to the basis rate. There is a likelihood ip flakt will go up. One reason for the inflation going down is the oil prices. That has been one reason we see inflation softening in the recent months. But do you think theres more pressure now on india to cuts rates and now theres reports that further rate cuts could come in the coming months . We always look at one basket, but each country has a different economic structure to follow. One policy is policy because theyre trying to control the inflation rate. However, there is lk a fiscal policy and that is lacking so far. Inflation is mostly driven by the supply mechanism. That is driving inflation in the next coming months. They have not cut rates while theyve been in effect. The next week is not until february. So, therefore, if he hasnt cut yet when Inflation Numbers were falling, its unlikely that hell cut market year, either. They will start showing its impact in two to three months time. And if there is a more logical reason bhient cutting the Interest Rates, mostly if the Oil Prices Continue to stay low for a longer period of time, then he has hinted that it could be much before the monetary policy. Incresters have been bullish. According to hir, india is the best performing strategies in 2014. Do you think the market is overly optimistic about what he can achieve . You see that open mist beak reflected into the market. Therefore, the equity market has been reaching multi year highs almost every day. Once the equity market has been lower, so far rupee is down against u. S. Dollar by about 8 . There we can see people are still with concern about the reality of the proms which modi has implemented. And we hear mr. Modi is critical of the lack of rate cuts by the central bank. Equally, will Central Banks be critical of what mr. Modi will be doing . Are there too many bottlenecks in the Indian Economy . There are. However, so far, the Central Banks keep it doesnt reflect its on whats happening in terms of the fiscal policy. But then we can see that. Now asking about the reality check on the modi rhetoric on Economic Growth. Were going to leave it there. Do you know, wilfred, they were the best performing Hedge Fund Strategy in 2013 . India has been a Strong Equity market, no doubt about it. Yeah. The question is, can it condition and is it oversold at this point . Thats something well be watching in 2015. All right, next up, tax havens. A fun topic. France, italy and germany are joining forces to tighten up tax rules which allow companies and Member States to minimize their tax bills. Stephane is live in paris with the latest. Stephane. Good morning. Basically, they would like the European Market in order to attract from international investors. This is basically how companies are paying their taxes in ireland, for instance, for all the business that theyre doing in europe. The german, french and italian finance ministers would like a quick move from the european commission. In a letter sent to the new commissioner for taxes and economy, they say that a strong incentive should be taken by the end of this year and that the new directive should be adopted by Member States by the end of next year, which in european time would be quite a short delay. They would like a similar packa package. Includes an Automatic Exchange of information between the countries on the cross border tax rulings, including a transfer pricings and globalistic measures against tax havens. They feel they should have the support of the new President Commission saying he promised to tackle tax evasion in europe with an exchange of information. We dont know if he will be in an uncomfortable situation because juncker was the former Prime Minister of luxembourg and the company is defensing itself of allegations against low taxes with multi natural Companies Operating in europe. They want to go very quick on that story. Over to you. Stephane, thank you so much. While the measures expected to come from George Osbornes statement is an announcement from Northern Ireland. As weve been reporting, Goldman Sachs is reportedly offering its Wealth Management clients a chance to invest in uber. Fortune magazine says gold man has a new Debt Offering exclusively for customers who typically have a net worth of more than 10 million. And we want to hear from you, is uber overvalued . Is this a name you would consider getting into when it hits the ipo market . Join the conversation here on worldwide exchange. And our personal handles are on the screen now, as well. Worldwide cnbc. Com or krns wex. Would you like to have exposure on uber . I take the contrarian view and say at some point a competitor will come in and steal market share. And to be spare, queer questioning whether its overvalued. Reportedly, it has a 40 billion valuation, which is insane. By the way, in terms of other companies with a 1 billion valuation, pintrest up there, j. D. At 6 billion. Big valuations. Indeed. Coming up, imf upgrades growth forecast on a lower oil price. Does that mean its time to invest in uk equities . Well discuss that, next. Stocks rallied yesterday amyself a volatile trading session for brent and wti. Russias economy minister lowers its expectations for one year. The news weighs on the ruble after it posted the biggest intraday drop in years. Bank and brokerage stocks leading the way. U. S. Futures are pointing to a higher level with key auto data expected to show sales rising to their highest level in more than a decade. Youre watching worldwide exchange, bringing you Business News from around the global. And Oil Continues to dominate the discussion in markets, wilfred. Weve been seeing a steady decline in oil prices. But yesterday, wti crude settling up 4. 3 at 69. Its best oneday gain since 2012. Do you think this is a nap back or the start of roadway bound . If we needed an indication of the longterm effects of oil produces, we had it 15 minutes ago when the russian economy minister came out and lowered its forecast from 1. 2 growth to 0. 8 contraction. They cited oil as the biggest reason and that highlighting how big of an impact this has on Oil Producing countries. So many times experts say there are countries so dependent on the price of oil, it could have an impact on the Global Economy. Lets take a look at futures and how theyre trading on wall street. The Dow Jones Industrial up about 50 points and the nasdaq, which was the underperformer yesterday due to a selloff in tech stocks up about 13 points in premarket. Lets take a look at the ftse cnbc global 300 index. Right now, its up about 9 points or 0. 14 . We were telling but the rally. Diving into the European Markets, again yesterday, that pmi data came in lower than expected. Bur today, a little bit of a rebound. The ftse 100 up 73 points. The zelt ra dax did break the first time this summer. A dose of Economic Data latter this week will hopefully confirm whether this european rally can continue. And lets have a quick look at bond markets. Low yields, but not too Much Movement in them today. Were now around 0. 74 . And in the u. S. , 2. 23 . Lets get on to forex. The euro has lost about 0. 3 today. The u. S. Dollars strengthening to 1. 889. Lets have a look at the ruble. Strengthening 1. 6 today after the economy minister in russia lowered its forecast for the year. It was down as much as 7. 5 at one point. It did recover to be just below flat, but weakening again today. What has been causing weakness in the ruble . Low oil prices. Nymex was down around 1 , 6835. Brent at 7222. Its down 0. 44 . Imf chief Christine Legarde add she expects the u. S. Economy to grow at 3. 5 this year higher due to lower crude prices. And those views were echoed by William Dudley. He said the Falling Oil Price will boost income for u. S. Households. Im not going to opine on the appropriate level of Interest Rates. What i am going to say is were being very clear in terms of how were communicating. We said what we think the criteria are that are going to target monetary policy, were going to talk about the federal funds rate, which will be our primary tool in terms of tightening monetary policy. And weve described when we think that liftoff is likely to occur. I think were communicating quite clearly with the markets. Paul is joining us now. Its lovely to have you here. Good morning. Lets talk about lower oil prices. How is that for the consumer . I think the depending power is quite small. How long, i think nonetheless, there are some knockout effects with that. Specifically with the long bond yield. To dwell on that point, the u. S. Has removed qe, but we havent had the rate rise yet. But markets seem to have continued upwards since then. Have they moved on to now being a fundamentally led market . The difference between easing off stimulus is quite big. As of yet, the jury is out. Also as quickly as we mif expected in the previous cycle. How does the drop in the price of oil change fed policy . Lower oil prices good for the consumer, good for growth. Others would say it would impact inflation which has been quite low in the u. S. That will then delay rate hikes in 2015. Where do you stand . Broadly speaking, probably on the side of keeping rates lower. I think the impact on the consumer is helpful, but i dont think its likely to still make prices to such an extent that we see a run away inflationary scenario. And if rates are lower, why youre negative in terms of asset allocation. Is that right . Its valuation. Weve seen the u. S. Do much better in terms of Economic Growth than the rest of the world, but thats not to say its been a particularly strong recovery by previous cycle standards. So i would suggest that the valuations are priced in a higher Growth Scenario than much more sluggish Growth Outlooks in europe than the emerging markets, for example. At this stage, we dont have an overallocation is appropriate given the valuation differentials. You are overweight in our second chat. But before we do that, i want to talk about volatility in general in market. How is it that its remained so low for so long . I think certainly as investors have looked to other parts of the market for income than previously, in the past, you have held cash in checking accounts and savings accounts, it has gone to equity markets and other high yielding to get some form of income. That has anchored volatility lower and the expectation that Central Banks will come riding to the rescue whenever theres an issue. And that has led investors to become, we think, somewhat complacent over the risk presently in markets. We think the upside to volatility is considerable at this stage. Paul, thank you very much. Well be back with paul in five minutes time. Were going to start with october Construction Spending out at 10 ook a. M. Eastern. Its expected to rebound after falling for a second straight month in september as investment in private and public projects decline. Then fed chair janet yellen is giving opening remarks at the college f fed challenge national finals. Well hear today from fed vice chairman Stanley Fischer and fed governor brainard. Takata is expected to widen the recall on air bags. They were given until this evening to declare air bags defective and issue a recall. If it didnt, nhsta could fine takata up to 17,000 per vehicle. The company is expected to explain its decision on a congressional hearing on wednesday. Gm is recalling more than 316,000 suvs and sedans, mostly in north america, because the low beam headlights would stop working. Gm says it cannot confirm if a loss of life has led to any accidents. The automaker has recalled more than 30 million vehicles worldwide this year. Taking a look at shares, down just about 0. 4 . In frankfurt, over the past three months, basically flat. Oilmakers lort u. S. Sales today which could be the highest in more than a decade. C conannual sales at the 17 million level which was last marched in august. Chrysler could be the big winner. Sales are expected to rise as much as 20 . From autos to china, the Chinese Market surging led by the financials sector. But what caused the jump snm we will have all those details coming up next on worldwide exchange. In case you missed yesterdays actions, no worries, we have all the top stories for you this morning. U. S. Futures shrugging off volatile trade in open. U. S. Automakers are set to report the highest number of sales in more than a decade. And a rough day for the ruble after russia seas says it will fall into recession next year forecasting a recession. The shanghai composite has staged a Late Afternoon rally, posting its biggest daily rise in more than a year. Leading the way are chinese banks and brokerage stocks, some of which are up nearly 10 thp this composite up 10. 3 and it has been a strong gain over the last month. Paul markham is with us. Lets touch on china briefly. The markets iraqiing strongly, not just for the most recent rate cuts since april. Was your structural view on china . Obviously, it represents the biggest opportunity for consumption growth over the longterm. In that regard, we do remain reasonably constructive. We think over the next couple of years, there are considerable structural issues. Insolvent banks and we think consumer which has borrowed too much in the near term. So we would be a little bit concerned for the near term, but over the longer term, we would be more positive. Youre under way emerging markets. Are you negative on the longer term. . Longer term, we think they represent the biggest opportunity for growth. In the near term, it does mine countries and companies which are dependan on the margins. That Means Companies will have to start borrowing their oep own currencies. You see ta impact of consumption gdp growth over the next year or so. The s p 500 health care recently hit an alltime high. The question is how much farther can this sector run given that it has had a great run over the past couple of months . Some say its gotten quite expensive. It could get very expensive. We saw in the late 90s. We think the ability of governments to spend more and particularly in the emerging world is very high. If you look at in your time, they spend less than 3 on health care. And even if those economies get 5 of gdp spending on health care, that represents a huge one which is generation opportunity. You also have a 4 weighting in consumer staples. It suggests its more the discretionary names which benefit from the low oil price. And if youre overweight japan, structurally, though, the economy is looking at a challenged position. It is. What i would suggest is the monetary tim st ewe husband which the bank of japan has put in place, theyre put in place and it has a dis pproportionate impact on gdp. We think the market looks pretty undervalued and we think the export stocks can lead in that environment. Paul, thanks so much for joining us, paul mac markham. And still to come on the show, a revival in the pc market is breeding life back into tech stocks. We speak to the cfo about what this means for the companys bottom line. Thats coming up next. Some of the tech names out there have bvlt bvtd. Hard drives up more than 17 in 2014. Hewlett packard, intel has significantly outpaced the market at 37 and 43 respectively. To talk more about that, pat omalley joins us on a first on cnbc interview. Thanks for joining us in london. Great to be here. The market did not expect the pc recovery given the rise in demand for tablets and smartphones. Can this recovery in pcs continue . Yeah. I think what youve seen fundamentally in the pcs is the innovation cycle going. For years, it wag taking out costs, costs, costs. But if you take a look at the companies mentioned, hp, dell, lenovo, theyve invested quite a bit into their portfolio and theyve made compelling solutions. You know, all in ones, two in ones, you know, making it tablet like. And you can see thats now taken growth rates away from the tablets because people see nice, compelling offerings. We expect that to sort of continue, that innovation cycle has been turned on and we dont see the death of the pc anytime soon. We are very bullish on pcs from now and beyond. The recovery in the pc market has been seen as better demand for your products, hard disk drives. The question is, can that recovery continue and will it continue to help your bottom line in 2015 . Yeah. I think if they continue to invest in, you know, the technology that makes the product more compelling, more user friendly, more the state of the art with apps, touch screen, we see that happening, so were on the forefront of an innovation cycle. So we expect that to carry on 2015. And as long as they keep on investing in a portfolio, we feel very, very happy about it. But that Technology Sort of leverages into a whole portfolio. So whether its going there or the cloud, we feel very comfortable because at the end of the day, the storage has to go somewhere. If we look at the cyclical issues you face, particularly next year, the weaker yen is going to benefit some of your rivals like toshiba. Is that going to hurt you at the end of the day . No. We have large presence in asia. So we take advantage of the lower cost of currencies there. As the u. S. Currency gets stronger, the benefit we have from being a global company, we can sort of balance that and we feel very competitive on the front of where the currency goes given our footprint globally. I also want to talk about your presence in europe. The European Parliament just voted on breaking up google given the fact that there is talk about it monopolizing the space here in europe. Does that stop you as a company from increasing your preps presence in europe. No. We have a large presentation ens in Northern Ireland for doing Major Technology for our hemg. We look at europe as a market thats going to continue to grow because the fundamental needs for storage are global. Its not geographic. Whether youre in asia, the u. S. Or europe, you need storage. So we want to access the best talent, whether thats here or asia. So we dont see the disincentives to being in europe. We see more and more investors to be global. We want to get your reaction, the fbi reportedly warning companies that hackers are using Malicious Software to launch structured attacks, such as the one against Sony Pictures last week. The fbi issued a fivepage flash warning late money. The report refers to sony and its not about a new attack. Its capable of wiping data from hard drives. When you hear these type of stories, as a consumer, its quite scary. What do you do to fend off that . We prevent access into those drives, but we encourage folks to have backup drives. We sell a retail product that will allow you to back up the drives. So you can always restore. So the cost of that is much less than the cost of losing the data. So we have a portfolio that will allow you to, one, protect the encryption, but even as it gets hacked or lost, we believe the user should take control of that information and theres multiple means, whether you have an external drive, whether you use encrypted. Obviously use good protocols, change passwords and dont share them and all that. But that is a battle that will be going on from now to infinity. You were saying youre on top of it given the business youre in. But when you get a feel for how much your clients or your customers on top of this issue, is Cyber Security one of the major threats to the Global Economy right now . Yeah. If youre not really protected, i mean, the one thing thats worse than not having your data is losing key data that someone else could use. So we are working with, you know, agencies around the world, how to better protect it. Were working with our customeres and we have a general education portfolio to work with the consumer on best practices. But its a game youre going to have to constantly move. The hackers, the folks that want to destroy value are going to be making business out of it. You have to be state of the art all the time. Well engage deeply with our oems to make a better solution, to make it hack proof if theres such a thing. Thats a game that you always have to invest in. Best share price, is that down to pc demand or is that structural reasons . I think theres a couple structural reasons. Theres three companies that do this today. When i started 26 years ago, they were 93. Its heavily invested into us to make sure the product is there on time with the best quality and with the best price. Thats one reason. Then theres the sector with the pc rebound. The technology is not going away. This technology is going to be the foundation of storage for a long time to come. I think people are getting awareness that this technology is the necessity for Building Blocks of other technologies. Some say that could take competition away from the ecb. We look at this as a clab raegz. There are certain places where its going to be good. But we believe storage begets store aemg. The more people that get connected, theyre going to have to access data somewhere else. And at the end of the day, growth, solid states, they have to make marriage investments over the next decade to satisfy the needs. Were working on that, as well. Come back and let us know. Pat omalley, thank you so much for joining us. Thanks for having us. Coming up on the show, medtronic get ago shot in the arm from a Corporate Bond. Sales could fund a takeover, but did it manage to beat the giants of tech . Find out next. European oil stocks rally leading the stoxx 600 higher amid a volatile session for brent and wti. And russia admits it will fall into a recession early next year as the Weak Oil Prices and sanctions weigh. U. S. Futures are point to go a higher open with key data driving to highest levels in more than a decade. Takata is set to expand its recall of potentially deadly air bags. Youre watching worldwide exchange, bringing you Business News from around the globe. And if you missed yesterdays trading action, have no fear. Stocks ended lower, but Energy Stocks bust the downward trend thanks to a rebound in crude prices. When looking at the broader indices, the nasdaq did underperform because of a big selloff in some of the tech names, Krug Facebook and apple. Apple saw one of its biggest names in ten months. The dow up about 37 points in premarket trade. The s p 500 up just about 2 points. And the nasdaq also showing a bit of green, up just about 9 points in premarket trade. We should point out a couple spots did hit 52week highs yesterday. Procter gamble, visa, disney and berkshire hathaway. Yesterday wasnt a good day for european stocks because of that weaker than expected manufacturing activity. The ftse 100 up about 1 , which did break 10,000 since the first time of june 2014, its now reversing gains and trading in negative territory, down about 21 points. Its big trading partner with russia. We did get the headlines from russia saying they will enter recession in 2014. The cac 40 up about 13 points and italy showing a bit of green. European stokts for us most part in positive territory, but germany in negative territory. Lets have a look at oil prices, seema. Thats been the main factor moving markets yesterday. So far, nymex down 68. 3 . So with the oil price so volatile, how should they play the market . Shortterm, its going to be very, very volume title. Its a 10 to 15 range. Into next year, we can see tightening in balances. It will be a pretty big uptick. For the european economy, for example, i think this is more important than what they can do in terms of quantitative easing and what have you. What we have seen already in oil prices and the exchange rates, in new york with the weaker euro, you get less bang for your buck. Where we are now, youre looking at growth in 2015 from oil alone. It takes time for these things to filter through. The consumer will feel it in their pocket over time. What really matters is, really, what happens to the oil price not on a one or twomonth view, but what happens over a medium term. Theres a reasonable expectation that oil prices will remain lower. But thats what really counts over time. Brian, good morning. Thanks for joining us so early. Your most recent note says to us theres a lot to worry about. But monday saw a huge purchase of Corporate Bonds. What is driving that . Well, our nations sanctions lead 7. 5 . Were in a lowrate environment. Theyre bringing in more money from the cities and towns leading to one of the greatest credit booms. That leads towards Financial Engineering which over time drives stock Prices Higher. So many of these Stock Companies are sitting a a lot of cash and yet are going to the bond markets to help raise money. Tell us if that trend will continue into 20150. That trend is not only going to continue, its going to intensify. Were seeing more buybacks and more mergers and acquisitions. Thats fueled by debt. And the more mergers we do, the more debt needs to be fpsed. Yesterday, medtronic came to the market to finance its purchase of guridium. Investors showered them with money. At the start of every december, theres a surge initially, but yesterday was double anything that weve ever seen before in history. So were off to a great start in december. What does this mean . The lower rate environment, quantitative easing has ended, so why do the u. S. Bond yields remain so low which is allowing this Corporate Bond purchasing to continue . The demand for Corporate Bonds is Even Stronger than the supply. So the demand and supply yields stay low. And our pensions have such a tremendous lead to earn that 7. 5 yield that its likely that this credit boom is going to continue for years and take stock Prices Higher over time. Brian, what about the black friday sales which came in lower than expected, down 11 due to sluggish demand . Some say, okay, this is a good sign because consumers feel more confident about the economy. They dont feel the need to tap in on those sales. Others say its a bad sign consumers arent willing to put money to work. What are your thoughts . The numbers are bad, but this whole bull market the last 5 1 2 years has had nothing to do with the fundamentals. Our economy has had the worst expansion since world war ii, yet were having one of the greatest bull markets ever because of Financial Engineering that flows from the pensions. With Financial Engineering set to accelerate and intensify, the bull market in stocks is likely to continue for a number of years, no matter how badly the economy gets. And, brian, the questioning of energy bonds has been a big issue, as well, for the lower oil prices. Is that still taking part in some of the bond issues happening or are investors shying away from Energy Related Corporate Bonds . Investors want nothing to do with energy bonds. Ive been telling you on this show for a year 1 2, talking about the bursting of the commodities level that we have from 2008 to 2012, we have what i call the subprime of commodities. And the same type of packages, would they wrap mormgs in in the last cycle and in the cycle before that, they wrapped up fiber optic assets. Its the same type of Financial Engineering that went on in those cycles. Now that that bubble is bursting, commodities are in a down trend. Ive been saying that on the show for over a year and a half. Energy bonds, nobody wants to touch them with a tenfoot pole. Thats like toxic waste. That means our pensions are going to invest in other areas to make up for those losses. Its likely going to see more Financial Engineering, especially in xhshl real estate which is one of the few areas that theres a high yield left. Oil prices did rebound yesterday up will 4. 3 , its best oneday gain since august 2012. Have oil prices found a bottom . Is this the start of a rebound . I dont think so. People trying to buy the oil dip in september, we saw that in october. And we saw that in november. And we saw it again yesterday to kick off december. But oil bonds got crushed yesterday. And generally when a bubble bursts, the fixed income investors see that more clearly than the Equity Investors do. We try and is fight it all the way down. So i think energy and commodities in general are uninvestble until most of the price gains from 2008 to 2012 get wiped out. Were going to leave tlit, brian reynolds, thank you for your time. I also want to get you some news on german car sales. Some headline numbers coming out right now. German car sales falling about 2 in the month of november. Car sales may grow 1 in 2015 to over 3 million autos. Thats according to the vda. German car sales may grow about 2 in 2014. So slitly more than 3 million. You about overall, this data on german car sales have come in weaker than expected. Thats why youre seeing some of the german auto names like bmw, porsche, volkswagen all down significantly over the past hour and thats why youre seeing the xetra dax underperform. Bmp down just about 0. 6 . Top stories at this hour, lets take a look. Shoppers did not flog to their smartphones, tablets and pcs on cyber monday to find the best holiday bargains. As of 9 00 p. M. Eastern time, online sales were up 8. 1 versus last year. Sales had been projected to rise 13 to 15 . Shoppers bought on average four items for a value of 129, down more than 1 compared to last ye year. Now it was a tough day for tech with big names ending up in the rid. Well see what investors hit the sale button after the short break. Values matter. So were transparent about the fresh wild seafood we sell. And the species we dont. Independently rated for sustainability. Traceable from dock to store. Sent fresh from over 50 u. S fisheries with responsible fishing practices. Like bornstein seafoods because to us, value is inseparable from values. Whole Foods Market Americas Healthiest Grocery store. A tough day for tech stocks, investors lost big profits on some big names yesterday. Alibaba losing about 5. 06 in yesterdays trade. Social media big twitter lost 6 . Amazon moving lower after t moodys changed the companys outlook to negative. But what really caught the attention of traders was apple. Shares falling off on heavy volume, i might add. Morgan stanley said it was trimming its position in the company by 11 . Apple, by the way, witnessed its largest intraday drop in ten pose. Recovery at the end of the day, down about 3 as you can see right here. Wilfred, isnt this the start of selloff in tech . People saying main its its profit taking, perhaps it hassing in something to do with the samsung buyback. If you want explanations for why apple has sold off, head to cnbc. Com to find out what the key market watches think happened in yesterdays trade. Opening arguments are set to begin today in apples antitrust trial. The company is accused of asserting its dominance in the Digital Music market. Theyre asking its wealth clients a chance to invest in uber. The ridesharing app is become, up of silicone valleys high startups. The sales could raise hundreds of millions of dollars. In 2011, goldman let wealthy clients invest in facebook ahead of its ipo. Perhaps this is just a repeat of what it offers its clients. Access to these high flying Tech Companies before they go public. Absolutely. Weve talked about the value for uber being probably on the headline number. But still, it comes to the ipo. We dont get to look into the details. I dont know. They already have been able to do that. And, obviously, it doesnt even need to go public at this point given that its raising monies from private wealthy investors and gold man sax. Is it a name that you would like to consider get intoog your portfolio if and when it does eventually ipo . Worldwide cnbc. Com or via twitter cnbcwex. Now, the markets may have taken a breather on monday, but there was such plenty of m aif action. Good morning, wilfred. Computer chips and industrial houses are making their way into the news today. A 12 premium to mondays closing price. The deal will give shareholders of both companies a 50 stake in the combined firm. Cypress makes press screen chips using devices such as Samsungs Galaxy 5s phone. Microchips and controls to control things such as power windows and air bags. Cypress has seen revenues fall for the last two years. Snapping a streak of six straight years of decline. Cypress and spansion shares both jumped in afterhours tradel. Black standards stone is still its asian force for 1. 3 billion. As a result wmcore will no loenger operated the business it had. Gic has been stepping up its recent purchases n buying Office Buildings and housing in australia. As a wie to diversify its portfolio and taking advantage of better yield. Blackstone is trading down today in frankfurt trading. Back to you. Before we go to praek, lets remind you of the headlines at this hour. U. S. Futures struggle volatile trading in oil, pointing to a higher open. U. S. Automakers are set to report vendor sales. And its been a rough day for the ruble even as the economy falls into next year. Takata says it is going to expand the recall of air bags in the u. S. , as ordered last year. Good morning, wilfred. Were still waiting for the official word from takata regarding whether or not it will meet the nand of the national Highway Safety administration. Most believe that this will happen and that its been in the cards ever since the demand was made last week. Takata has recalled more than 13 million air bags and in the United States that recall has only impacted what were calling a regional number of vehicles, those that were at high humidity states, department of the gulf states, the southwest, florida, along the southern eastern United States. This recall would be for all tak at a a air bags, nationwide it would likely include tens of millions more. The official number is unclear. Financial impact on takata is the big question here. Takata may not have a resolution in place, but theres no doubt that a nationwide recall will cost tens of millions of hundreds of millions of dollar. There is a congressional hearing now, another one in washington. Definitely a big one from phil lebeau. A big boost from early black friday deals, cheaper gasoline prices, starting consumers to buy suvs and checks. Does that mean well see lower sales for hybrid car these quarter, phil . Weve seen lower sales this year. Theyre already down about 111. 9 this year. Suvs and crossovers are in demand due to lower gas prices. What they do is change the type of vehicle that people will be buying. So the reports come out later this morning, expect to see big sales for pickups, suvs and crossovers. And remember, this is the beginning of the luxury sales season and we will see strong reports there. I talked with a number of dealers and there were strong sales up on friday, up more than 10 in lux we with this demand on friday. We expect these to be very strong sales reports when they come out in a couple of hours. Phil lebeau, thank you very much. Lets bring in scott adams. To talk more about what to expect, do you think the drop in the price in oil will change the way americans shop this past quarter . I think phil explained it very well. It doesnt necessarily make somebody want to buy a car. It will certainly change what they will buy. Small Sport Utility res one of the biggest parts of the market right now. The small honda crv, toyota rav4. The small jeep, the new jeep compass and the new Jeep Cherokee are unbelievable in sales and every manufacturer is trying to get into that part of the market because you still can save and now those cars get mileage. Its not huge mileage, but when gas is now 2. 50 a gallon here in the midwest and in some places here than that, its the car people are trying to buy. U. S. Adjusted sales have been strong for quite a few months now. Even if theyre going to be strong for one further month, surely this is the time to get out of these stocks before we start to see the turn . Im not sure there is going to be a turn. Ten years ago, seven or eight years ago was the start of the great recession. It was the start of 0 financing that General Motors started. A lot of these cars are now seven, eight, ten years old. People will be looking to replace those cars. We dont see a seasonal slowdown like we did this time of the year. Quickly, is the hummer coming back . Thats funny, we were talking about that yesterday what General Motors would have done if they would have stuck with the hummer. I dont think its that big of a market or that size. It tends to be the smaller base sport utilities, sort of what used to be a family wagon a few years ago. Its not the huge sport utilities. While those are selling well, theyre not like the old hummer days. Scott adams, thank you so much. And lets take a look at your futures that are trading ahead of the wall street open. Transfers leading the decline yesterday due to the rebound in crude prices. Right now, the dow indicating a higher open by around 14 points. And European Markets largely in the red where the ftse 100 is bucking the trend in the green. The energyheavy ftse 100 up in the green. Thats all weve got time for on todays show. Im wilfred frost. Im seema mody. Thank you so much for watching. Squawk box is next. Good morning. Oil shock. Prices are weak again today after what was a pretty big rebound yesterday. This has become a very volatile market, but whatever crude now down about 40 . 40 in the last five months. A warning for corporate america, the fbi telling businesses that hackers have used destructive malware to launch a cyber attack on u. S. Soil. And apple heads to court. The tech giant defending itself over allegations that it abused a monopoly position in the Digital Music market. Among the key testimony, key testimony, taped deposition from the late steve jobs. Tuesday, december 2nd, 2014, 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. Here are the three big stories that were watching today. First up, tis the season to talk about the consumer. New this morning, we have early numbers on cyber monday. Ibm digital analytics reports online sales rose more than 8 compared the to last year. A year ago at this time, cyber sales jumped more than 20 . And a potentially related stories, the nations automakers will be reporting november sales today. But all accounts, those numbers are expected to be strong. Vehicle sales are forecast at an annualized selling pace at about 17 million. Remember, any sales that g