Transcripts For CNBC Worldwide Exchange 20141211

Lauvens the first ltro are expected to disappoint. Results out in over an hour. Moving camps and demonstrators out of the financial district after more than two months of occupation. Announcer youre watching Worldwide Exchange, bringing you Business News from around the globe. We are just getting news out of norway. Theyve cut the deposit rate by 25 basis points to 1. 25 . We were expecting a slightly easing meeting announcement. We werent expecting an outright rate cut until early next year. Low Oil Prices Hit a fiveyear low against the euro, which given the eurozone weakness is quite astonishing. The economy has been weakening. T inflation, the most recent number declining slightly more than expected, but only fractionally. That has led the central bank to cut the deposit rate to 1. 25 . The norwegian krona has strengthened against the dollar today by 1. 2 . And we should point out the norwegian krona has been depreciating against the euro over the past couple of weeks because of the tumbling price of oil. Were talking about western europes biggest oil and gas producer, having an impact from declining oil prices. The Ifo Institute expecting growth in germany to come and revising up with expectations for growth in germany due to the falling euro, a decline in oil prices. They said on thursday, today, its expecting German Growth domestic product to expand by 1. 5 this year and next, according to Falling Oil Prices and a slump in the Euro Exchange rate have helped to pull the economy out of the state of shock. But, of course, germanys biggest economy in the eurozone still has been dealing with Economic Data that has been coming in weaker than expected. Industrial orders, among others, have been weighing on investor sentiment. Right now, we are looking at the xetra dax trade higher by around 0. 4 . And some other data to bring you today, this is a busy morning. Lets focus in on italy. Italys october industrial output contracting by 0. 1 on the month and down 3 on the year. Of course, this is italy, a country that is dealing with sluggish growth as well as high unemployment. In fact, youth unemployment, north of 40 . The industrial output contracting month over month as well as year over year. Were looking at the ftse mib. The italian markets right now trade higher by around 33 . The focus really on the tail end and what he can do to provide growth and stimulate the economy, wilfred. Weve heard from the Norwegian Central Bank. Meanwhile, the Russian Central Bank is widely expected to raise key rates higher than expected. The central bank is also battling the sharp fall in the ruble which is down over 65 versus the dollar this year. Earlier, the central bank conducted 348 million worth of forex market intervention on tuesday alone in a bid to stabilize the currency. Joining us now, our guest for the next hour, nick karn. Very good to have you with us. Thank you. Lets kick off with some of these central bank meetings. Norway has seen big drops in their economy. Weve just seen norway ease measures and were expecting russia to tighten. Why is that difference in policy . Russia faced with sanctions over the ukraine, in much more of a difficult sort of emerging markets type of corner trying to defense its currency. I think the norwegians are happy, to some extent, to see the currencies, the oil price eases and theyre not, of course, faced with anything like the same dynamic of weak currency, starving Interest Rates, where the higher Interest Rates go for more distress the currency goes. When we look at the ruble itself, of course, it has declined further than the oil price in recent months. Of course, it was due a bit of a correction. Particularly the last few weeks, given that the volatility in the paring has picked up so sharply, as well. Does that mean mr. Putin is right . There is a lot of speculation going on in the selling over the ruble or is it purely based on the fundamentals . I think whenever a country sees its currency under pressure, one of the things you almost always hear is that its the fault of speculators often foreign speculators and this is a you know, this is a common coder over time from, you know, right from the 30s onward. So if your currency is under pressure, its due to the evil activities of your enemies overseas. Youre right in saying the ruble has fallen more than the oil price, but these things are closely relate and had thats 90 of the explanation. Back to europe, the ifo revising its growth target for germany up 1. 5 . Better than what the market is expecting. Is that one reason to get bullish on europe and this economic recovery . I think the story in europe hasnt really changed very much. Germany, which was keeping everyone else going is less able to as time goes by because, of course, 1. 5 beats the hell out of nothing, but its not particularly high growth rate. So i think the issues for europe are essentially the same. The risk, of course, is that it gets tucked down into a disinflationary mentality. And, of course, thats more theres more clear and present danger of that right now because of the fall in the oil price. Euro lined inflation is almost certainly going to be negative next year. Nick, youre staying with us for the hour to get more market reaction. Getting the data weve been getting today, that will be welcome. Thank you so much for now. I also want to get you some headlines from the ecb. The governing council is committed to new instruments if needed. He also says the ecb is to assess early to next year how its stimulus has worked. Are they hinting towards sovereign bond buying . Something we will discuss throughout the next two hours. Lets have a look at what european markets are doing today. Were basically flat. We opened up about 0. 2 . Were now down about 0. 1 , as you can see. But dont forget, over to last two trading sessions, europe has shed around 3 in total. The broader stoxx 600 index and, therefore, unsurprising that were sort of treading water today. Lets look in on the individual european markets. As you can see, its basically a broad based flatness. Germany, up 0. 25 . The Ifo Institute has upgraded its growth forecast for germany. But this flatness were seeing in the equity markets doesnt tell the full story, the level of bearishness, the level of risk off trade weve seen the past couple of days which is highlighted by the bond markets. Lets look at that. German bond yields, 0. 7 . They were fractionally lower than that yesterday. The only country with a tenyear lower than that is japan at 0. 4 . And japan was at this level as early as this year. And as we look here through the bonds, bend around clockwise and we get more towards the periphery in particular greece, which has moved in the opposite direction in the last few days. This is the greek tenyear. Lets look at forex on monday. Weve had three days in a row of dollar declines. Today, just pausing for breath. The euro has shed a little bit of ground over the dollar. 1. 2436. The yen, 1118. 19. The ruble is basically flawed today, which is very rare over the last couple of weeks. Its been moving 1 to 2 . We have the Russian Central Bank decision coming up in about an hour. Commodities, theyve been a massive factor moving markets in the last few days. Crude is bouncing back today, having hit fresh fiveyear lows yesterday. 64. 6 for brent and 61. 31 for wti. Volatility has picked up sharply, its up 24 today and up 51 over about seven days. Lets check in with whats going on in asia. Samantha is standing by for us. Good afternoon to you guys. We see a spot of green coming into europe. Hardest hit today, thailand, down over 3 . We have lots of central rate decisions coming through. No change in rates in indonesia and bank of korea, no change of rates. Log at the japanese markets, thats a low. Down 0. 9 . Fitch warning that it will likely downgrade the countrys debt after the budget is approved next year, saying unlikely government revenue will offset a reduction or delay in that sales tax hike. Of course, the second sales tax hike which has seen a delay. Volumes there falling 7 . 126 billion. Interesting to note, the brokerages today, all weak. Down around 10 in the red. And news coming through the securities regulators will inspect their high risk margin lending businesses as early as next week. Were having news that the pboc is once again expanded. 81 billion in shortterm loans to chinese banks. Previous loans that are maturing this month and also news coming through from reuters that theyre saying to the chinese banks, you need to step up lending into the new year. Were waiting for retail sales, fixed Asset Investment and industrial production, those key figures out of china tomorrow. Back to you, will. Thank you very much for that. Going to bring you some flashes out of switzerland. The smb kept rates on hold about 40 minutes ago and the swiss franc did rise off the back of it, 0. 9659. The president of the smb is speaking at the moment. The main headlines, hes saying deflation risks have increased once again in recent months. Hes saying further bank appreciation would push inflation into negative territory. Hes saying the snb must make full year of Monetary Policy. He said theres no intention of selling gold. This comes after the recent was rejected. Although they have the flexibility, theres no current intention to sell more gold. And coming up on the show, no one was lining up for 48 hours to get one, but this is where it all began for the worlds most valuable company. All the details on the auction of the apple one coming up. We also look ahead to the market debut of lenders club in new york, a 5. 4 billion ipo. We ask if you should buy into the peer to peer credit marketplace. Plus, we cross to stephane in paris with the latest on the problem facing tom enders and its shareholders. To help spread some holiday cheer. Before earning 1 cash back everywhere, every time; and 2 back at the grocery store. Thank you even before they got 3 back on gas, all with no hoops to jump through, a couple was inspired to use their bankamericard cash rewards credit card to throw the ultimate Ugly Sweater Party of the season. Thats the spirit of rewarding connections. Apply online or at a bank of america near you. Toothbrush. Sweater. Extra sweater. Headphones, sleeping mask. Oh, and this is the xfinity tv app. He can watch his dvrd shows from where ever he wants. Hey. Have fun, make some friends. Alright. Did i mention his neck pillow . sniffs pillow watch your personal dvr library where ever you go. With the x1 entertainment operating system. Zloo a isnt it true poll shows radically left party shows 41 of greek voters compared to 25. 7 for greek democracy. 300 mps are expected to vote in the first round of elections on december 17th coming up next week, which could lead to a ruling election if the Majority Party fails to gain a majority for its candidate. Germany confirmed annual inflation came in at 0. 6 in november, lowest figure sips february 2010. 82. 6 billion of the 400 billion euros in cheap longterm loans were taken up in the first allotment back in september. 11 italian banks will sign up for a total of 26 billion euros. What should you expect . How should you trade the announcement . Nick karn is still with us. Is. Well, i think the answer to that is substantial. I mean, weve seen net business lending in europe, in negative territory through much of this period. And, of course, that shines this exacting light on how quantitative easing is supposed to work. And, of course, this is targeted as making lending incredibly cheap for banks if they want to take it up. But if they take it up without demanding on the side, theyre charging themselves a low percentage to hold extra capital. Absolutely. And you could characterize the whole Monetary Policy experiment in that sense as taking the economy to water or taking the Banking System to water is one thing, but making it drink is something different. Even though theres been a massive growth in the monetary base, we havent seen that filter through to the end user. That is absolutely true. And i sometimes think thats how this whole quantitative story has developed. The fed had actually stopped publishing m3, which is the most powerful, the most popular kind of measure, arguing that the information had kind of been leached out of it by financial innovation of one type or another. And then quantitative easing, which is almost kind of dead quantity, then came back with kind of born again fer vor. And i think that sheds important light on what the next stages are. Monetary policy arguably worked in the u. S. Were seeing an acceleration in jobs growth in the u. S. The question is, will full blown quantitative easing, will it provide the same results to the european economy . Well, i mean, obviously, thats an excellent question. As we all know, the problem within economics is always how and to what extent you can pick one factor from another because, of course, its not really possible to conduct experiments. Its certainly been the case with the qe experiment in the u. S. Has been accompanied by a substantial fall in Interest Rates. But as we were looking at in europe, just earlier, european Interest Rates are already at very, very, very, very, very low levels. You know, before the next stage of qe. So it may have some other pecksy dust. A lot of lending is through the Banking System and less to bond rates. As we wait for that to take place, do you see the euro depreciating even more, then . Yes, i do. Inc. If price sg very much on draghi to go the next stage in monetary sxermtation. Despite the pushback hes receiving from german policy measures . I think the german interests dont like it, but its a hard case to make if youve got falling prices across the continent. Nick, thank you so much. Wilfred, over to you. Sales rising more than 10 . It had a good start to the fourth quarter. Despite warmer weather. Air italia, maintaining its neutral rating on the telecom player. Down 6. 4 in trade today after italian based Investor Company picked up 8. 86 million worth of convertible bonds. For more on the story, claudia is in milan. Good morning. They were taking up their stake. Both exor and fca are trading down on their stokts after this convertible bond was priced ads at 87. And with the yield that was above expectations. From 7. 1 and 7. 8 came in at 7. 87 pefrs. Its going to be a costly convertible bond for sca. Thats why were seeing the stock down this morning. The stock was suspended limit down. Well continue to see this pressure been fca is under pressure because of the rumors that they may be moving the fiscal domicile of ferrari outside of italy. This will create some issues, not so much from a made in italy standpoint as much as a political standpoint. The idea that some corporate taxes would be leaving italy in a political situation as we are in now is, of course, difficult with the economy not taking off. The made in italy brand would remain. Its still a rumor, so not clear whether that will happen or not. So this rng month, were watching both of these stocks trading down. Airbus, shares tell more than 10 down another 2. 7 today after the planemaker warned on postpones. Lets join stephane in paris. Good morning to you. There are three reasons behind the market reaction. The first one is a profit warning. Airbus will slow that down and it will be replaced but not. Until 2017. Thats the reason why. Airbus won about a gap between the old and the new verge. Thats the main reason for the profit warning. The second reason, its not good is the postpone of the ceremony that was supposed to take place at the end of this week. The first delivery of the airbus 350, the launching customer decided to delay the infinity according to analysts from the sector. Its more like a strategy from the airline to get some lastminute concession. Airbus could discontinue the aircraft after 2018. The problem will remain in the balance for the next couple of years because airbus is struggling to find new clients for this aircraft. Reaction this morning after this announcement, the ceo of the Airlines Says it would be ready to order 140 additional airbus 380 in case airbus would lush an abated version for this super jumbo and the comments from the ceo a few minutes ago from london saying that airbus will focus on kre increasing the number of clients for this super jumbo and also says that all the problems linked to the 380 were now behind us, which means that confidence for the future, after what was said yesterday. Stephane, thank you so much. Retail news, walmarts China Business has reportedly been plagued by questionable accounting and sales practices. An internal review shows the chain made bulk sales to other retailers and booked sales when there wasnt merchandise on the shelf. That made business appear strong. The report says concerns go back as far as 201 1. Walmart says it has taken disciplinary action since then and strengthened its compliance. Walmart is closing 30 stores in china and cutting jobs. Down about 11 is. 2 in frankfurt. Meanwhile, walgreens ceo will retire once Alliance Boots merger is completed. It will be the larnlgest shareholder in the combined company. Walgreen so far in frankfurt is flat today. Still to come on the show, after 75 days of occupation, Hong Kong Police clear out pro democracy protesters from their camp. We have live in hong kong after this break. European market open in the green. Oil edges higher, but brent remains below 65 a barrel. Central bank action under way, norway delivers a surprise cut as activity in its oil sector weakens while russia is expected to raise rates amid rising inflation. The ruble hitting a historic low ahead of that. Take up of the banks ltro action is expected to disappoint. Results are out in around 45 minutes. Police move through hong kongs protest camp moving demonstrators out of the financial district after hour than two months of occupation. A whole host of data coming out today. Lets take a look at how european markets are responding. Trading in the green, of course, there will be an active discussion around the help of european banks. Well get a read on the tltro. Access to capitol for very low Interest Rates helped revive the european economy. Thats a question we will get the answer to later on in today. That result coming out at 10 15 bft. Right now, european stocks higher across the board. Lets give you a recap of the decision we have from the Norwegian Central Bank earlier. They cut Interest Rates by 0. 25 to 1. 25 . We were expecting some easing. We werent expecting a rate cut, of course, norway is responding to the weaker inflation. Theyve got the weaker economy and, of course, the weakening currency in the face of lower oil prices. Lets recap on what the Swiss National bank did earlier. They kept rates on hold earlier. That was broadly as expected. But they also spoke about how deflation risks were rising. They did also say the governor said they have no intention of selling gold. They see the policy challenges remain considerable and they would keep focus on the rate cap. The currency cap was crucial as pressure was increasing on the franc. In the last couple of minutes, weve had a new forecast for oil prices. Theyve cut their wti forecast from 69. Theyve cut their 2016 outlook from 82 to 80. That is from commerce bank. Their oil price next year. Hong kong police had the gun to clear out pro democracy protesters from the area they had been occupying for more than two months. Eunice yoon is live in beijing with the latest. How are authorities responding to this . Well, so far what were seeing in the Chinese Press are several headlines that are along the lines of the people of hong kong have spoken. These protests have had. They have been been in place now for two months. Theyve had a protracted impact on the economy and overall society. We heard from a government spokesperson, as well, who said china as well as hong kong authorities have the legal right. For the most part today, we did see the chinese authorities really down playing this event, trying to illustrate it as insignificant, and its not necessarily surprising when you consider the hong kong protests are the biggest challenge to the beijing authorities. The two have been at odds. There is a right for hong kong people to choose their own leader. They want to be able to make their own decisions whereas beijing as well as the Hong Kong Government thats in place and that was put in place by beijing is indicating that the candidates that they would be choosing from would be vetted by the chinese authorities here. So right now, it looks as though the police are clearing the streets. But the resentment and frustration that is felt by these young people and this generation of hong kong people is not likely to go away anytime soon. Guys. Eunice, thank you so much. Joining us online is peter from reuters. Thanks so much for joining us. The protesters being cleared out at the present today. Has the message going across . What they set out to achieve was true universal sur raej in hong kong. The initial prediction was they would stay until their demands were met. That was never going to happen and, as predicted, that didnt happen. But i think the protesters have sent a message that people in hong kong are unhappy with the state of affairs and were willing to go out on the streets and also that they are willing to stay out there. Theyve been out there for over two months. That was something people thought these protests, if they happened, would be smaller quickly. Perhaps thats not the case. The question is, will we actually get some type of action from beijing based on these protests . What are your thoughts there . I think its i dont think theres any sign, really, that beijing is prepared to compromise on the substance of what its put on the table with respect to holding electrics in hong kong. I think there may be some wiggle room, some fiddling around the edges with the details of how the election might work. Which may be enough to get the proposal accepted by the Hong Kong Legislature which is one of the big hurdles. But that wont be enough for these protesters. Theyve gone much further than they thought they would. The next time something comes along that makes them happy, there will be a possibly they go out on the streets again. Thats really whats changed about hong kong is the possibility that these protesters might be back and might be doing the same kind of thing in the future. Given that, given that they can come back and people believe this new Political Class has awoken in hong kong, in the shortterm, do you at least welcome the fact that these roads are going to be cleared . Yes. I think anybody who lives and has to move around hong kong has gotten increasingly upset with the fact that these roads are blocked and made traffic difficult and delayed peoples journeys and things like that. A lot of the predictions before they started have been complete chaos. Few exceptions to that. Actually, the city has adapted and caught around it. As these have gone on, people have become increasingly and fed up with it. Even people who support the objectives have got to the point where they said, look, we need to reopen the roads and get on with our lives. Thank you so much for joining us, peter. Lets stick on the topic of asia and bring back in our guest host. Nick, lets talk about china. An extraordinary rally in asia market over the last month or so. Is that fueled purely by the rate cut or is there a fundamental reason for chinese equity markets to strengthen . I think we have to see the chinese equity markets this year in the longer term context. And that is that its been very, very poor for a very long time. The longterm story of chinese stock markets is as its opened decades ago, you will have a slightly negative compound here. Thats how it stacks up as a longterm investment. Usually to do with some kind of activity in ipo related type things. I dont think it has much significance over and above, you know, its own interest, if you like. What i do think is very, very important is the slowdown which has in china over the course of this year. China has accounted for more than 100 for the growth in demand over commodities and this last period of expansion. In other words, without china, Global Demand has been falling. I think what were seeing now is a in commodity produces for the reality of the china slowdown. I think thats the single most important thing. More broadly, we know these economic models where you are very, very high levels of capital spending, japan in the 1980s, they have never ended well in the past and maybe this time its different. But, you happen, as investors, i think we always ask for high risk premium. This time, its a different story. Do you think investors will question the premise of International Diversification in 2015 . I think that depends very much where youre sitting. I think if youre sitting outside the u. S. , youre going to if im sit hearing in london well, International Diversification means lots of u. S. Exposure, then youre going to wish you had it. If youre an american, youre going to be wish you hadnt bothered. Nick, i want to come back to the point you made over the last month or so, id say the main lesson weve learned from oil priceses is its more of a supply. Are you suggesting its more of a demand weakness and in particular by china . I think its for both, to be honest. I find it hard to discuss supply without price. Youll find lots of demand pore something at one price. This was our view of the oil price. This is the down swing, the up swing that started for 9 in 1998 and we all remember that famous right of the economist cover, a word awash with oil. At 150, everyone was franticly looking. You dont find it immediately, you start to worry, but you do find it and it unravels from the other side. We were more surprised by oil this year and last year than we were surprised by the relatively Weak Oil Price now. Government figures released today show machinery orders fell from the previous month. Has been growing steadily since june. Machinery orders indicate spending in the private sector and the fall in figures can be worrisome. But the government shrugged this off saying it was an adjustment from the month before when there had been several new large orders for turbines used in power plants. Meanwhile, Fitch Ratings down graded from its current single a plus. It says the governments decision to delay a tax hike from october 2015 has made it almost impossible to reduce the nations massive debt as planned. The rating agencies added in the korns call that the decision will come after seeing what kind of budget the government compiles for the income fiscal year. However, it remains unlikely that it will manage to offset the revenue cost from the tax hike delay. This follows the downgrading of japan last week. Although its impact on the market is limited, its not helping Prime Minister abe who faces an election this coming sunday. Thats all from the nikkei. Back to you. Still to come on the show, instagramover takes twitter as users flock to the photo sharing app. We have the interview, up next. The wall street journal says pay pal may shed about 3,000 position. Most of the cuts are expected from one person would not comment saying we were focused on setting up ebay and paypalace independent companies. Now, theres some ipo news to get you. Lending club has priced its ipo at 15 a share. That came in above the initial range. Valuing the Worlds Largest peer to peer lender at 5 billion. It will debut over the ticker lc. It will be interesting to see how that trade is priced above the range. Lending club has been around since the mid 2000s. Although it doesnt seem like it. Just recently weve been seeing more. Recently, youve been seeing more publishing. Absolutely. We will see how these tech companies, if at all, steal market share from the banks. So the lending clubs founder and ceo will be on squawk on the street at 9 00 a. M. Eastern time. Fox has been one of this years anticipated ipos, but the cloud scorage companies delayed its plans earlier this year due to market conditions. An s. E. C. Filing shows revenues grew 37 in the third quarter, but that growth is slower than previous years. This is one of the most highly anticipated ipos for 2014. The results we got yesterday, they were better than what we have had in the past, but still, the company is highly unprofitable. We should point out, though, that box posted Large Revenue growth on a first three quarter basis from to 13 to 2014. But lets see, maybe an ipo in 2015. Big, big revenue growth. One trend weve been seeing in the cloud and new tech space. Indeed. Now, another tech story, photo sharing app instagram has passed a major landmark. Julia boorstin spoke exclusively to the ceo and sent this report. Instagram announce ago major milestone. It topped 300 million monthly active users adding 100 million since just march. Making it now bigger than twitter. Instagrams ceo telling us hes making it easier for people to discover content and on building instagrams ad business. Theres so much data out there that sits on instagram to the tune of 70 million photos being uploaded every day of the world. If you think about that scale of business, you realize that there are photos pouring in from everywhere in the world. If youre interested in eclectic topics, i guarantee you there are accounts related to that. So we need to make sure to connect you with the content that relates to you. There are no commitments right now. Twitter last quarter had a lot more than 6700 in revenue. How long will it take for you to get on that scale . Were not competing against other tech space. Were competing against print and tv. We are selling brand advertising that shifts perceptions. Chabani did a Wonderful Campaign on instagram to shift perceptions away from the fact that they were just yogurt. They had a 7. 6 incremental lift through a brand on instagram. Thats the type of thing you typically see in a magazine or on tv. If you look at those markets, they are very, very large and i think thats what were going after. You can see where were headed. For more on what he thinks about being bigger than twisted and the billions he left on the table by selling to facebook when he did, go to cnbc. Com. This is a major milestone for instagram. 300 million active users, which overtook twitter which has been dealing with slowing growth as well as disappointing user growth in specific. Thats been a big concern for wall street. If we take a look at twitter versus facebook, facebook has been the win they are year, up about 30 whereas twitter has been underperforming, just about 40 . Absolutely. I dont really like facebook. You can be messaged, you can get posts. In the end, i couldnt be bothered with it. Instagram is perfect. You can share pictures, like them or not. Its a great set of offerings that facebook has by having both. The facebook ipo along with my colleagues at cnbc back in 2012. At the time, maybe the acquisition of instagram for 1 billion, there was so much criticism that facebook endured because they were saying, why are you buying this app, this photo sharing app . But clearly, it was a good strategic acquisition. Absolutely. We also want to bring smu news on walmart. Some flashes coming in on walmart. China, leadership changes and disciplinary actions were also made. Of course, weve been following this story very closely. Let me see here. In 2011, walmart changes and discipline actions were also made. Were going to keep you updated on this story as we get it. Walmart, down about 1 in frankfurt at the moment. Now back to tech, this vintage Apple Computer could be yourself for the right price. An original and fully functional pc goes up for sale today. Its the only one known to be sold be steve jobs out of his parents garage. The computer still works. Its original software, microsoft basi and the apple one star trek game is a cool came. Copies of the ipad are selling for as much as 900 on ebay and other sites. If youre lucky enough to have the factory sealed special edition u2 ipod that am sold in 1994, a seller recently got if you have any gadgets youre still hanging on to . And absolutely no jokes on this. About six months ago, there was an original ipod. So we cant sell it in and out on ebay and make some money. Yeah. Please join the conversation. Worldwide cnbc. Com. cnbcwex does the twitter handle. Many people believe the American Dream is out of reach. The New York Times survey showing 64 say its still possible to work hard and become rich. 7 2 believe they can achieve the American Dream. The poll shows 45 of people think the Economic System is unfair. And coming up on squawk, we sit down with business government and heavyweights at the New York Times conference. Star guests include jack lew, Goldman Sachs ceo lloyd blankfein. Coverage kicks off at 8 30 a. M. Europe. What a lineup weve had for the last hour. Nick karr is with us. Lets talk about the situation in the u. S. In particular, i want to talk first of all about bond yields. Still very, very low. To what extent are those bond yields a result of the situation for the rest of the world . And if we see more easing from japan, which one will stay low in the u. S. Even if the u. S. Is increasing its own rate . Well, weve had a sort of ripple tiny run of that in the sense that the really shortterm rates have nudged up 28 points or so. To some five year area. Particularly jobs data in the u. S. And the longer term rates havent budged. So weve had that sort of doable and i guess that continues to be doable. I do think it has a lot to do with worldwide conditions, a further china slow down to intensify the pressure downward for u. S. Inflation. Were now going to be looking at 2 a gallon. Gasoline, we may have a good jobs market in the u. S. , but we clearly have no clear and present danger from inflation. And that is an environment in which you know you might as well you can afford to wait. Nick, thank very much for joining us today, nick carn of carn macro adviseres. Wilfred, what was once a bright spot for walmart may not be so now. Well get you News Headlines from that report on china. To open credit cards, destroying jills credit and her dream of retirement. Every year, millions of americans just like you learn that a little personal information in the wrong hands could wreak havoc on your life. This is Identity Theft. And no one helps stop it better than lifelock. Lifelock offers the most comprehensive Identity Theft protection available. If jill had lifelocks protection, she may have been notified before it was too late. Lifelocks credit Notification Service is on the job 24 7. As soon as they detect a threat to your identity within their network, they will alert you by text, email, or phone, helping protect you before the damage is done. 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Com onguard to try 60 days of lifelock Identity Theft protection risk free and get a document shredder free. Call the number on your screen right now. 5 00 a. M. In new york. Welcome to Worldwide Exchange. Im seema mody. And im wilfred frost. These are your headlines from around the world. U. S. Futures indicate ago higher open after wall street had its worst day in two months. The price of oil, by the way, stabilizing with the wti hovering around 61. The ecb to announce the result of its second auction of loans within the next 15 minutes. More bad news for chinas Walmart Business after the retailer cut jobs and announced store closures in the region. The u. S. Ipo market continues humming along. Lending club gets set to make its debut today. Announcer youre watching Worldwide Exchange, bringing you Business News from around the globe. Many on walmart expected an easy right through the end of the year. Clearly, there is a lot of volatility in this market. The s p and dow are now set to snap seven weeks of gains in a row. Yesterday, declines were led heavily by the Energy Sector which has been led by the oil price. On top of that, weve had weakness in asia. So it would she an even bigger surprise if that continued. S p 500, 38 months without a move to the downside. So perhaps this selloff is being welcomed, seen as a breather. Take a look at u. S. Futures. Perhaps a bit of a snap back today. The dow up 76 points in premarket trade. We should point out the vix jumping about 67 over the past three days, the biggest threeday gain since october. Is it back in the game and what does that tell us about future Market Performance . Right now, this is the market volatility up about 24 in yesterdays trade. Diving into the european markets, weve been getting a lot of data over the past few hours. German inflation in november at a 4 1 2 year low. Italy, industrial output falling. No sign of a recovery in italy just yet. But despite that poor Economic Data, we are seeing green across the screen except the ftse 100 which is down about 5 points. And the predominantly set of green equity markets youre seeing today dont tell the full story. Its still a story of risk aversion in europe and that is highlighted by the yields we are seeing on some of the core bonds. Germany, 0. 67 . France, 0. 994 . So incredibly low bond yields. Similar in the u. S. , which is at 2. 16 . That is the yield over the last few sessions. That is the story across all the core. Yield compression, risk aversion. The likes of greece moving in the bond specific elections. Picking up even more so in the past three years. Lets look at forex. Were going to focus in on individual currencies. The nor weej yavntan krona had strengthened a bit. The central bank did cut its Interest Rates by 0. 25 . Thats off the face of a weak economy, weakening inflation and a sharply falling economy currency off the back of Weak Oil Prices. Russia, of course, facing a weak currency off the back of oil prices. Were speccing them to see the other thing, increase rates rather than cut them similar to the norwegian krona. Oil has been falling sharply over recent weeks, including the last three trading sessions. But today, bouncing back a bit, 0. 6 for the wti crude. 61. 30. 64. 69 for brent. Interesting news out of the bank of england, wilfred. It published minutes of the discussions alongside Interest Rate announcements starting in august 2015. The bank of england currently, of course, publishes minutes detailing discussions of Monetary Policy and a breakdown of how its members voted with a nearly twoweek lag. So were looking at not too much of a market reaction, although sterling is trading down versus the u. S. Dollar. For more headlines coming from the bank of england, it plans to hold four joint meetings of monetary and meetings in 2015. So some changes there. Now, more market reaction, a cnbc contributor and the head of Investment Strategy at brooks mcdonald asset management. Jenna, a pleasure having you on. Would he be looking at the uk as well as the u. S. As bright spots when looking at the global economy. But the question is, going into 2015, do you think these two markets can continue to accelerate their pace of growth despite global weakness as well as broader europe . What we think is the u. S. And the uk are going to continue to lead growth. We had sterling being a bit of a head win. The caution that youre allude to go is in terms of europe and europe is becoming a binary trade based on whether were going to see more quantitative easing or not. And the thing that a lot of people are missing, however, is that there has been a pick up in the demand for assetbacked securities in the likes of italy. So there are still some bright spots. What it means is the way weve implemented it is more of a bar bell strategy. You look for areas where youve seen opportunity, but then you get into the yield. Energy was seen as a defective sincer. Its also weighing a lot of the oil here in europe. Whats quite interesting is that youre seeing its providing a bit of a cap on inflation. But the lack of Price Inflation is a positive. Wheel were talking about europe, does that mean todays results isser ir to the market and if it is, it gets up closer to quantitative easing . Its not going to be a surprise. The target they had toing expand their Balance Sheet was far too optimistic. But what it does mean is hopes for quantitative easing. It will be a case of bad news being good news because it seems to push us further towards the ending investors wants. Lets get you a rundown of the data today. Weekly jobless data is out at 8 30 a. M. Eastern. Followed by import prices for november. At 10 00, its october business inventories, earnings in focus. Lululemon and radio shack before the best. After the bell, there will be more. Internal reviews showed the chains and retailer books sales. Walmart says it has taken disciplinary actions since then and will be closing 30 stores in china. Its down about 0. 75 in frankfurt trade. Walgreens ceo greg lawson will retire once the drugstore chain completes its merger. It was expected lawson would stay on. Hes ben at the helm since 2008 and is overyou a the acquisition of rival reed. The chairman will be the largest shareholder in the. And we will get you the results after the second ecb teltro auctions coming up. Russia president putin is meeting indias Prime Minister modi. The two will signing dpraemts in trade, industry. Its expected to clench a tenyear oil deal with indias sr group. Putin in new dehli meeting with Prime Minister modi. Were getting a couple of headlines from modi who says russia will remain indias most important defense partner. Russia has offered to fully manufacture advanced helicopters in india. Politically, modi, who what had a successful visit to the u. S. , he has to be strategic and diplomatic or how he handles president obama. Mr. Modi has been on quite an offensive in terms of the policy space since he took over, hasnt he . Hes been meeting with political figures in china. We are awaiting results of the ecbs ltrlo auctions. In the meantime, lets talk to jemma. This might indeed push the central bank closer towards quantitative easing. Weve got france below 1 . What would be the point of sovereign bond buying . Exactly. Already at record low yields. And the other problem is, they have other options open to them. They can start buying Corporate Bonds before they start buying sovereign bonds. And its a political issue. Unlike the u. S. Where you go out and buy treasuries. The problem is europe is how can Central Banks choose one day to support spain and another day to support italy . Thats an issue that germany is putting that road block against. The only thing i would temple that with is germany is struggling and youre starting to hear them say theyre no locker opposed, but theyre skeptical of how useful its going to be. And that means investors are putting their hopes on germany continuing to deteriorate. Is it a better pick up from banks . How do you trade europe . What we see is a great opportunity in italy because you get the greatest drop down in any of the yields. Theyre an ex importantled company. At the same time, going into pharma, going into the defensive sectors. Yes, the valuations look stretched, however, the yields are incredibly attract i have. A lot of of forex strategists that join us on Worldwide Exchange say theyre seeing 119, 120 on the year in 2015. That should help exports, but at the same time, you dont want your currency to be that low, do you . Its allowing europe to become more competitive. That type of environment, this is the boost they need in this scenario. You think about the multi nationals that do business in the u. S. And are benefiting from the recovery in the u. S. , they bring that money back into euro euro europe. Is that a trade . That is very much a trade. What you want to be doing is invest in companies that benefit from Economic Growth and youve got to focus on where theyre telling to. You have strong Economic Growth in the u. S. And are they benefiting from the currency depreciate, as well . Were still waiting for these results. As weve said, it looks like european bond yields are going to stay very low for a long time. Does that mean that correlation effect will occur even if the risk is picking up . It does make us cautious on sovereigns. That lets in nicely because of what weve seen in the Energy Sector. When the oil price gets hit as much as it has, how are they going to pay that, as well. Explain to us why high yields in europe have done so well . Because theyre yield. The tenyear in the u. S. At 2. 3 . Its understandable. You can understand why high yield is doing so well. At the same time, there are risks that are there and it may not continue to do so well coming back into the markets. Thats what were starting to see. Lets talk about the oil price. Is it a supply issue or a demand issue . What were seeing recently, the trigger point has been the fact that opec didnt cut the price. So at the moment, it is a supply issue. There are concerns over china and slowing down there, but its growing at a substantial rate. What we see is continued head winds and Commodity Prices and its made us cautious on emergency markets. Which emerging markets in particular if you for 2015 . Weve always waited for an opportunity to increase because these are the Growth Drivers of the future. And so what i would say this sth is holding us back from getting more exposure and trying to wait. Moment, the greater upside is the consecutive risk. Oil has been one of the trigger points. When you start to see anything that triggers this shapedown and youre coming up to the yearend. People are thinking about locking in profits. You can see this contagion risk. Does that mean we will not get the santa collaterally from thanksgiving to christmas . Thats a very good question. I would hate to put a predict on what happens shortterm. Its very hard to fight that good will that drive markets shorter term for the year. It means a shakedown is natural. But for the good quality assets, you may hold longer term. And weve got some of the results from the tltro results. The ecb has allotted 129. 84 billion euros in this second round of the first phase of the tltro allocation. The reuters poll was expecting 130 billion so they were out by very, very little, indeed. Come in at 129. 84 billion largely in line with the reuters expectations. That follows the september number of 82. 6. He expected them to send it to be higher, but by all means, not higher to a large extent. Lets get reaction from that. Its a great time to get some context. Were seeing demand for the 100 billion mark. There is still pressure on straight quantitative easing. Mario draghi said this sa fouryear process for telcos. It is a fouryear target for the banks. So yes, its a small amount in terms of billions, not trillions, but it is a focus measure he wants us to give three or four years to take effect. I still remain skeptical. Asset backed securities of small and Medium Sized Enterprises while smes are the Growth Drivers of the economy. In that respect, it will have a bigger effect. When do you think well get full blown quantitative easing by the ecb . I hate saying definitely, but its unlikely to be early next year because we have a little bit of time on its hands in terms of waiting for these other targeted measure toes play out. However, the pressure is going to increase and increase towards the end of the year and investors are going to continue to price it in and so they try and force the issue. The stoxx 600 was marginally in the red, but now its up 0. 4 . Although thats coming in line with the reuters forecast, perhaps its more negative than it was with a take up of around 130 billion benefitting the bank stocks. Uni credites and the italian banks up the most, 1. 7. . Credit ago recoal, up 1. 6 . They wanted to see where they stand before committing to the tltr program. Thats perhaps one of the reasons we see that take up in trench one. Trench two meeting expectations. We do. And the department continues. They wouldnt be taking up funding. Do you think well see a pick up . Will this prolong the chances of mario draghi to prevent outright quantitative easing or not . Its giving them a bit of breathing space. Its come in line where where the expectations were. However within you can boost splice as much as you want, but thats dependant on confidence. We said how difficult it would be to have outright sovereign bond buying. Surely, if there is outright bond buying, is it tough to make . Its true, but theres less of an obstacle. So corporate is the sneaky stage one, softens what theyre doing while theyre hoping germany continues to deteriorate. Lets talk about market reaction. Euro right now, the euro trading at a freshday low at 1. 2415 on the days low against the u. S. Dollar. Were looking at italian, spanish, tenyear Government Bond yields falling to the days low. Markets are reacting now to that announcement. Absolutely. Has it made any difference to u. S. Futures ahead of the u. S. Market . We were expecting a slight bounce back to markets after declines yesterday. If that is still the case, well bring you that in a couple of seconds. The u. S. Markets are expected to open to the upside. Nasdaq expected to up about 10 points and the s p expected to open up about 8 points. Thank you very much for joining us. Its been a pleasure, as always. And still to kot on the show, the russian rouble hitting an alltime low versus the u. S. Dollar amid expectations of a rate cut. That is up after this break. A big day for the markets. Welcome to Worldwide Exchange. Im seema mody. And im wilfred frost. Another luke warm lttro auction as banks take up less cheap ecb loans than expected. But italian lenders rally on the news. U. S. Lenders indicate a higher open. The price of oil stabilizes, b wti hovering around 61. Now the focus is on russia. Russias central bank is expected to cut rates when it makes its decision. This as the ruble hits an alltime low versus the dollar in trade today. More bad news for china after a pricing discrepancies announce ing in the region. Announcer youre watching Worldwide Exchange, bringing you Business News from around the globe. We are awaiting the decision from the Russian Central Bank. Wr expecting them to increase rates and tighten the policy in the face of declining oil prices. It is back today, flat the ruble. 1 to 2 has become the norm. So far today, we will bring you the results of the Central Banks decision as soon as we get it, which is likely in about the next 30 seconds. Yeah. The russian rouble has declined so far this year. President Vladimir Putin is in new dehli meeting with Prime Minister modi. New dehlis options had improved since the end of the cold war. Taking a look at these emerging markets, even though india, the stock market, has been on a tear up about 30 yeartodate, its still looking at high inflation and slowing growth. In that way, russia and india have similar problems. Still, interesting to see these two leaders come together at a time when india is strengthening its relations with the u. S. Indeed. So the Russian Central Bank decision is coming. The norway Central Bank Decision came earlier and went the other direction. Here we go. The Russian Central Bank has come through. It raised its key rates by 100 basis points. We were expecting it to be more like 50 basis points, so a significant increase this the central bank rate. That is to protect against rising inflation and to protect the falling currency. The key rate is now at 10. 35 . We havent had any reaction from the ruble immediately. The main policy rate four times already this year and the latest october hike was a 150 basis point increase, taeg it to 9. 5 . So there you go. The micex down about 0. 25 on that news. Lets bring in michael schlossberger. Put your touch on this Russian Central Bank. I suppose when someones currency is in free fall, does a small rate change affect much difference . The 10000 basis points shows theyre trying to prop up the currency as much as they can. Think about whats going on right now in russia. In a world where the standard now is zero Interest Rates, where germans are basically getting paid to finance their debt, the russians are having to raise their rates to 10 . That is going to create, i think, weak havoc in the whole community. I think it basically shows russia is in serious economic trouble because of the low price and the embargoes against it. Its a balancing act. By raising Interest Rates, that could weigh on growth in russia which is dealing with russian sanctions and the declining price of oil. The question is, will this rate hike help weight on inflation which right now is at around 9. 1 in russia. Its a classic emerging markets story where the central bank flails to try and raise Interest Rates in anl attempt to stave off capital outflows. The problems in russia are structural. Oil prices now have des operated the only thing that they have effectively to trade with. So i think its going to be ach more difficult situation for russia for the next year. Boris, just getting more flashes out of the Russian Central Bank decision, theyre saying they see high inflation and devaluation expectations. They are ready to raise rates further, theyre saying, after this Central Bank Decision to increase rates by 1 already. Lets talk about the bigger threat, as you just mentioned, on the russian rouble which has been the oil price recently. But the ruble has reacted more to the down side over the last two weeks or two months, depending on which time frame you look at it than the oil price has declined. And volatility is the huge amount. Does that mean there is some truth in Vladimir Putins claim that this move in the ruble is down to speculation rather than fundamentals . Of course its a function of both things. But i think what youre seeing is the market i think initially the market was skeptical about this oil decline. They thought initially it was a spike in oil at which point it liquifies russia in a much better format. But with oil staying at these prices and perhaps even know going lower, it just puts further and further pressure on the russian economy. If oil pretty much stays at 60 or below for all of 2015, russia i think has a very serious chance of going into a depression. It is just in huge trouble the longer oil stays at these lower prices because it is the only asset that russia has to trade. Boris, were going to come back to you in a second. Russia is expecting annual inspection may exceed 10 in q1 of 2015. Well talk more with boris in just a second. This is the day of data. We did just get earnings of 42 Cents Per Share which is higher than analyst expectations of 32 cents. Lululemon reporting earns that beat street expectations. Net revenue coming up 10 year over year. Just going to recap what we got out of the ecb moments ago. The tltro announcement came in intafkly in line with expectations. Some were expecting a little more, some a little less. But the market has responded positively, that stoxx 600 is basically flat today. It had been down a little bit. The euro dollar is flat. Its strengthened a little bit off the back, but most importantly, the bank stocks have bounced. Boris, cnbc contributor, the results today of the tltro, do they change the outlook of whether its likely or not that were going to get outright bond purchases . I think its interesting whats happening in the euro. On the one hand, it is clear that the dollar is strengthening and the euro is eventually going to fall. And i think the 120 target on the euro is a reasonable target. It has become such a oneway trade and almost everybody in the currency market is short the euro. With any news that delays the idea of ecb qe provides a ground for a Short Covering rally. When you look at the technicals on the euro, it looks like it just kind of bottomed out here. This 1. 2250, 1. 23 level, is bouncing around. So todays news is euro positive because it creates the idea that there may be a delay. Maybe february, march, before they decide to pull the qe. It was decent enough that it still stays within the ecb parameters. And only when they are forced will they do the qe. So i think in some ways there could be a surprise short squeeze in the euro here over the next couple of week because theres no further bad news on the Monetary Policy as the market perceives. Full blown quantities tafb easing at this point, boris, that seems to be priced into this market. Could we be potentially set up for a selloff in european stocks . Yes, i think youre right. European stocks may see a bit of a selloff if theres further delay in qe action. In many ways, european stocks, there will be some order of easing and monetary accommodation coming. There is a bit underneath the european stocks that i think is relatively strong. Especially if the euro stays around these levels. All of that is very positive for european corporates who get a much better Exchange Rate going forward. Boris is going to stim with us. Well be back with you in a few minutes. European markets are just in the red overall. The stoxx 600 is down 0. 08 . The ftse 100 is a laggard, down 0. 3 . Otherwise, as you can see, a little bit of strengths across europe after we had about 3 of declines on the two previous trading sessions. Germany up 0. 5 . Earlier, the Ifo Institute did upgrade its outlook for germany. As i said, the banks in both france and italy in particular rallied a little bit off the back of the results of the tltro announcement from the ecb. Markets down for the third consecutive day in the wooubs which is interesting given that seven days ago the market was buzzing about 17,000 dow. Interestingly enough, futures indicating a higher open. Were looking tt Dow Jones Industrial up about 64 points. The nasdaq up 10 points. S p 500 up just about 7 points. The vix, the volatility index, up about 57 over the past three days. So volatility back in this game. What does it mean . Will it derail the santa claus rally. There were pricing discreditsies after a report shows sales to other retailers when there wasnt merchandise on the is sheflts shelves. The reports go back to 2011. Walmart says it has taken disciplinary action. Walmart is cutting 250 merchandise i merchandising positions. Walgreens ceo greg lawson will retire once the drugstore completes its merger. When it deal was announced in august, it was expected he would say on. Boots chairman will serve as acting ceo. Wall green shares just flat in todays trade in frankfurt. New york regulator ben loti is looking to see whether reu r Deutsche Bank and barclays over possibly manipulating the forex market. Deutsche and bank leps at wasnt part of that. In frankfurt, basically flat on the day. And if the market didnt have flufr to focus on today, wilfred, washington will be in focus. The house of representatives is expected to vote this afternoon on the massive 1. 1 trillion spending bill. While it appears it will pass, conservatives are unhappy that it fail toes challenge president obamas immigration policy. Many democrats are upset the bill weakens part of the doddfrank financial reform. Its been a sizzling deal for the ip oss in the u. S. Well be discussing, after the break. Cute little guy, huh . This guy could take down your entire company. Stay with me. On thursday a hamster video goes online. On friday it goes viral a network choking phenomenon. Why do you care . Hes on the same cloud as your business. The more hits he gets, the slower your business may get. Do you want to share your cloud with a hamster . Today theres a new way to work. And its made with ibm. Gravity taking hold of the stock market yesterday as Falling Oil Prices, tech continues to be a focal point for investors. In fact, the socalled momentum stocks selling off, weighing on the nasdaq composite. Lets get to some of the biggest losers. Gopro, down just about 7. 5 . Tesla down another 3 . Even the Online Travel companies, which have been posting betterthanexpected earnings are up on the year. Yesterday, they were one of the worst performing stocks on the nasdaq. Trading down 3 for expedia. Price line down just about 1. 7 , wilfred. Indeed. Some of the high prices weve seen in the likes of gopro leading to that kind of correction has been a benefit for other companies. Other Companies Want to go list off the back of devaluations. The action isnt about to slow down because of the holiday season. With more, lets get out to landon dowdy. Good morning, wilfred. Renting club, once made the shady business of internet loans into a booming industry is going public today. The Company Pricing its ipo at 15 a share, above the expected range. Far more than gopros record ipo in june. Valuing the largest peer to peer lender at 5. Had billion. Lenning club will trade on the New York Stock Exchange under the ticker lc. Lending club is the first online lender to go public. It helps match people seeking loans with investors willing to provide them and borroweders than a traditional bank, simultaneously producing greater returns for lenders. Lending club has financed more than 6 billion in loans, but the business does face several risks, including more competition from banks and other online lenders. Rising Interest Rates and more regulation. The company has some high profile names on its board, including former u. S. Treasury secretary Larry Summers and former Morgan Stanley ceo john mac. Analysts speculate lending club could use the proceeds from the ipo to make acquisitions beyond consumer loans. Earlier this year, providing financing for private School Education and elective medical procedures. Meanwhile, box is releasing its fresh update on its financial businesses. The Cloud Software product has delayed plans due to market conditions. A new s. E. C. Filing shows revenues grew 70 in the third quarter, but that growth rate is slower than in previous years. That includes the 25 billion ipo. Landon, thank you very much for that. As landon was just pointing out, some high profile members of the board on lending club, Larry Summers, his stake stands to be valued at 15 million. Then theres john mac, former chairman and ceo Morgan Stanley. His shares are valued i believe around 36 million to 40 million. Youve got some big names on this board. Absolutely. Some nice profits for them, too. Now, this vintage Apple Computer could be yourself for the right price. An original, fully functional apple ipc goes up in new york today. Its the only known surviving apple one that has been sold directly by steve jobs out of his parents garage. Its expected to go today for up to 600 million. Sticking with apple, wilfred, the ipod classic is a hot item even though am discontinued the device three months ago. Now, reports say copies of the ipod are selling for more than 900 on ebay and other sites. If youre lucky enough to have the factory sealed special decision ipod in 2004, a seller reasonly got 90,000 for one. Youve got to be crazy to want one of those old ipods, right . I would agree, if it works, particularly. He want we want to hear from you on this. What gadget are you still hanging on to . Arlo, an original Nintendo Game boy and playstation. If you want to inus on the scaled, worldwide cnbc. Com. Do you know what i miss on the old ipod . The scroll button. It was somewhat soothing to flip through and find music within dont you think . I dont think if it was soothing, but before we go to break, u. S. Markets looking to bounce back after their worst days in two months. The euro hit session lows after banks took up slightly loans and the ruble sees the Russian Central Bank hiking rates. The dow s p are looking like they might end their sevenweek whipping streak after yesterdays decline. But today, they are looking like they are going to bounce back. The dow is expected to he up about 40, 50 points. The s p expected up about 5 points and the nasdaq up about 6 points. European markets are basically flat across the board. The stoxx 600 is basically flat. Germany is up 0. 3 . Both france and italy are basically flat. This follows about 3 declines across europe in the previous two trading sessions. So it is jaufr setting that a bit today. But lets look at the banks because the banks have rallied. Weve had another take up by loans. Results out show lenders borrow 129. 8 billion euros. That is just shy of expectati expectations. Bank stocks have rallied on the back of the news, especially in italy where we had unicredit up 0. 9 . Credit agricole in france is up 1. 25 . Seema. Yeah. These loans are expected to incentivize bank lending. Markets are reacting to that tltro announcement. Take a look at bonds. Bond yields have hit the days lows amid expect ages that the low volume in the auction has increased expectations that the European Central bank will have to launch its full blown quantitative easing. But the question is, is this already priced into the market . At this point, markets still moving on the prospect of full blown quantitative easing. Lets take a look at currencies. The euro is at a session low after that announcement. The norwegian krona hit a sixyear low after the central bank could cut to counter the price. The Swiss National bank kept its rates on hold, confounding expectations that it would prepare the ground for negative rates. Youre looking at the norwegian krona gaining momentum against the u. S. Dollar. Of course, the euro at a fresh low for the day at 1. 24. Wilfred. Indeed, lets talk now to forest schlossberg. Lets talk a bit about currencies. Of course, the u. S. Dollar has just given up a bit of ground over the last few trading sessions. Is that just a bit of profit taking or does the structural argument still stand for a strong u. S. Dollar . I think the structural argument still stands. But i think its interesting to take a look at the u. S. Side of the equation over the next couple of weeks. There is a process. There are decent Short Covering squeeze in the euro, in the pound against the dollar. Weve seen the correction against the dollar. The reason why is because the market is very, very focused on the idea that fomc is going to definitively lift starting q1 of 2015. Next week, we have the fomc meeting. Unless we get a very, very clean message that yes, they are absolutely committed and now beginning to normalize rates, i think youll see the dollar weaken basically on expectations. But the market is so geared up on the idea that the fed is definitely committed to the Interest Rate environment, any kind of delay or disappointment could give rise to the dollar profit taking move. I agree with jeff in a sense that there is no fundamental reason for why the fed should raise rates right now. Its much more of a philosophical again than a fundamental one. Wages are still very, very tepid. Growth is still problematic. Were not seeing the growth that requires normal zane of Monetary Policy. There are some qualifiers here to this whole overall bullish dollar view we have in the market. How closely do you think the fed is watching the situation here in europe . We did get a read on inflation today, boris. German inflation in november now at a 4 1 2 year low. The threat the of deflation is still a big one for investors. Is the fed watching that . I think the fed is watching that. Theres always a fear that deflation could be exported to u. S. In a sense. Of course, european gdz goods, European Services could become much lower value here in the u. S. And keep a lid on price levels. The other thing thats interesting today is were all going to be watching u. S. Retail sales. The whole component of this normalization thesis is that u. S. Recovery is really start to go take steam. U. S. Recovery means the u. S. Consumer is back. All right. So were going to have to watch the u. S. Consumer today very carefully. We will do that, boris, thank you for your time. And thats it. Thats all weve got time for today on Worldwide Exchange. Im wilfred frost. And im seema mody. Squawk box is next. Sgro good morning. Welcome to squawk box. The markets are looking to rebound. The futures pushing higher at this hour. Oil prices are dipping below 61 for the First Time Since 2009. Ebay may cut thousands of jobs after. And after ten weeks, police in hong kong are clearing out pro democracy protesters, challenging the governments election plans. Today is thursday, december 11th. Squawk box begins right now. Good morning, everybody. Welcome to squawk box on cnbc. Im becky quick with joe kernen. Andrew is in new york today and he will join us later from there with a special guest, u. S. Treasury secretary jack lew. In the meantime, stories we are watching today, futures are higher this morning after the major averages lost more than 1 . 268 points to close at 17,533. And the s p 500 had its biggest decline since mid october. The fall in crude oil prices taking the blame for the selloff. Oil prices hitting their lowest levels since july 2009, dipping below 6 of 1 a barrel for wti. Market watches verini says the drop in oil is what he is calling a black swan event. He says stocks will move even higher. Well have more on that in just a moment. Joe. Here are some stocks to watch this morning. Ebay is reportedly considering thousands of job cuts. The wall street journal says the company could trim as many as 3,000 jobs. Thats about 10 of its workforce. This as it prepares for the split of paypal. Most of the cuts would come from the marketplace division, which includes ebay. Com and stub hub. And staples is getting some activist attention. Starboard is taking a 6 stake in the retailer and raised its stake in office depot to 10 . And that, at this point, it may push for a combination of the two. And walgreen president and ceo greg waffen is going to retire after the drugstore chain completes its merger with the uk based pharmacy Alliance Boots. Alliance boots executive chairman stefano petina will search as acting ceo while the search for replacement is conducted. Becky, walmart thanks, joe. You are very welcome. What are you looking up . I was just checking i havent seen the New York Post yesterday. Their tabloids are running with the oil brat okay. Here is the thing. No, no, not yet. Were talking about an actor or an actress that is a minimally talented spoiled brat. Now, for me, that doesnt narrow it down one iota. Can you name that person . Can you name the actors and actresses . On the other hand, it would be a much shorter list that arent who arent talent and had arent spoiled brats. Exactly. So that doesnt if you say which actors are a minimally talent and had spoiled brat, to me, its like lets start with the as and end with the zs. No, i love everyone in hollywood. Except for the universal stars, Universal Pictures stars, except in that case. Theyre part of the fold. Part of the family. Theyre very talented and none of them are spoiled. Not at all. Nop nobody around this set is spoiled, either. No, no, or minimally talented. Right. Walmart said it discovered disincreasesies in pricing and inventory in china regulations. It says the issues were not material for the companys overall operations. The statement is in reports that china results seemed stronger than they actually were. And lululemon earnings, quarterly profit, 42 cents a share that beat the streets expectations. Revenue was shy of forecasts. Lululemon did see a surge in online sales. Its up about 1. 30, which is 2. 75 . Shares of lending club will begin trading today. The online peer to peer Lending Company priced its ipo at 15 a share. That was above expectations. We expect it to raise 750 by selling 58 million shares. The initial range was 10 to 12. Police in hong kong, as we said at the top, are clearing out pro democracy protesters. Its been ten weeks that these individuals have been camping out in the streets. Eunice yoon has the story right from nearby where it is having not right nearby, but closer than we are from beijing. Hey, eunice. Not so much. Exactly. In beijing. And, of course, beijing is very quickly watching whats happening in hong kong. So far, what we are seeing is that the police have been clearing out protesters. This has been largely nonvoipt. Some of the purchasers have been arrested. The mood amongst that crowd is one of defiance. There are a lot of people who are chanting and who are holding up banners saying we will come back. And this is after many of them have been sleeping on the streets for the past 75 days in whats really been the biggest challenge to beijings authority since the 1989 Tiananmen Square massacre. The two sides have been at odds over the way hong kong people can uses their own leaders. The protesters want ream choice. The beijing government as well as the Hong Kong Government have said the people can vote just among candidates that are already vetted by the chinese deposit. So the police have been dismantling the barricades and the block aadeblockades. People have been backing up tents and walking away, but the frustrations and discontent among those protesters has not been going away and probably will not for quite some time. Theres been a political awakening in hong kong, especially among many of its young people. Really, the way that awakening plays itself out over the coming years with these young people, the next generation of leaders in hong kong in conflict with beijings authority, how that really plays itself out over the come years is going to shape the way hong kong stands as a Financial Center among the world. Guys. Eunice, thank you. It seems from the reports weve heard that there was not even agreement among a lot of protesters. This has not been organized. And that age divide that you talked about has been one thats played out there, too. Absolutely. There is a big age divide. And there are there is one group that would say that they were the main leaders of the occupy movement in hong kong. But its really a broad umbrella of people. And what i always thought was interesting the protesters is as you go out into the streets, you will see a lot of young people. I really see a lot of young people i mean, i would walk out there and talk to people who are 14 years old, 15 years old, feeling very strongly about their rights. Theyve been complaining about not only protecting their own civil liberties, but theyre worried about their Economic Future. And these are people within the city that really have a stake. Because when they become working adults who are in the working world, their hong kong is going to become part of mainland china. So what theyre worried about is that as the years progress, if they dont act now, then they really could see a lot of those rights as well as their Economic Future erode. Eunice, thank you very much. Again, eunice yoon. Lets check on the markets back here in the meantime. Futures are looking a little higher. Yesterday, you did have some big declines. Yesterday, the dow, the s p 500 and the nasdaq all had their worst day in two months. The dow and the s p 500 both closed at onemonth lows. Dow futures are up by 51 points above fair value. Nasdaq up by just over 8 points. Checking out whats happening in the early trading in europe, mixed markets at this point, the dax is up by 0. 3 . The ftse down by about 0. 5 . And in greece, it like like the market there is down by 3 . It has been an incredibly rough week for that pkt. In asia overnight, declines not significant, less than 1 declines across the board. Hang seng down by 0. 9 . The nikkei down by about that much, as well. Oil prices yesterday settled below 61 for the First Time Since july 2009. This morning, trading slightly higher, up by about 49 cents to 61. 43. The tenyear note, joe, you may be right on this, 2. 16 pergs is the yield. I didnt think that was going back down after fridays jobs number. But i did think the market was along with paulson, i agree with him. When you see a and others. But you get 300,000. And everything is good. Its like every person around can mention all the good things about the market. When you get there, its like whats going to its already in there. That is why it went from 7,000 to 18,000. And now everyone is saying, well, its oil again. When oil goes down, thats a big stretch to go from oil is down, which is obviously thats good. So youve got to get all the way to the point where you say there must be a bad reason why its down. You have to just assume we dont know what it is, but there might be a reason why its down and, therefore, im selling stock. I mean, the knee jerk reaction should be that its good. The journal has a piece today. People that have been waiting for a raise finally got a raise in the form of the deal every week that you fill up, youre going to have more money. So i dont know. I dont know whether theyre buying it out. Ill tell you, i dont just look at greece being down 10 a day or whatever. Just write that off . Its definitely a low. Its not greece or worries about the eurozone . Worried about that selloff in shanghai the other day . I dont know. Shanghai was up 50 since july. We were up, too. Not 50 . Tripled since 09. 50 since this summer is kind of stunning. 35 last year and it was 14 this year. So thats pretty good. All right. Were going to the. Take a look at the dollar. The dollar was down 1. 5 against the yen yesterday. The dollar is up slightly against the yen. 118. 63. The euro is stronger against the dollar. Its sitting right now at 1. 2454. And gold prices, at least at this point, look theyre down by about six bucks. So well get back to this discussion. Our low market prices. What the markets have been waiting for, the market guru calling the Oil Price Drop a black swan event, an unpredictable move that the markets know is coming, but dont really know how to prepare for. So how are stocks going to digest this decline eventually . Berini thinks they go higher. Oh, the other point that i keep making is, you know, its just dog ma that the market goes up between now and the end of the year. Right. And yesterday i saw another indicator where it was 55 out of 55 that it happened and moved higher. Usually people mark up their portfolios with the winners so that, you know, you see it and then in january you have the january, february, it goes down. Everyone says it, maybe it doesnt happen. But who knows. With us to discuss, hank smith, chief Investment Officer at haverford trust. Here on set, jeremy fieeren at ubs. Youre on the left. Thats the way i read, hank, so its just easier for me to keep things straight. Where are you in terms of these, the last three days, really, because monday wasnt great. Tuesday looked like it was going so be ugly. But then the nasdaq pulled it up. Are we in a 5 to 10 er here or are we already done, hank . No. Im not even sure were in a 5 er. I would continue to see that pullbacks should be relatively shallow and brief, as they have been all throughout 2014. Because theres still a lot of money that has missed this bull market that wants to participate and will buy on the dip. And i think that trend continues. And this recent selloff, i know it goes counter to the christmas rally, but we might have bought ahead that christmas rally from the middle of october into the middle of november when we had a 14 gain. Remember, the markets were flat then. And it bodes well for 2015. Remember for the year the president ial cycle, always the most powerful year and we have an economy that is gear to go a new level called the 3 world from the 2 world. So i look at this as constructive, not destructive. That usually happens. You know, when it goes up through december, then down in january, maybe it doesnt do that and it starts okay. Because theres been years where its been great at the end of december and it starts off terribly. Horribly. And i said what youre saying. The 330,000, whatever it is, the jobs number, the tenyear is back down to you know, the only reason that a lot of jobs are bad is because the fed moves more quickly. Thats the only reason you wouldnt want 800,000 jobs is because you would worry about Interest Rates. Markets is telling you rates are still low. Thats probably positive, isnt it . Sure. I think its a positive because its very hard to connect whats going on in the bond market right now with the momentum were seeing in the u. S. Economy. I mean, when you have job growth average in 240,000 this year and the last month, as you mentioned, 321,000, the ism, both manufacturing and nonmanufacturing indexes close to 60. Clearly, growth momentum is improving. It is largely a reflection of inflaegzary or deflationary pressures were seeing from outside the u. S. And the lower bond yields were seeing outside the u. S. Okay. So i think, you know, why wouldnt oil just be, as it goes down, why wouldnt it be a good thing . Commodity necessary general are not correlated with financial assets. They have inverse correlation, dont they . So i dont know why what was it about cap ex that makes up Something Like a quarter of cap ex going into energy . More now than before, but still, what an its still a huge its like a tax cut. Theres no question, unambiguously, oil consumer countries like the u. S. , we consider 70 of our gdp is consumption driven, but its clearly going to be a net positive. Outweigh negative effects from the Energy Sector. The percentage point of gdp, sustain about 10 decline in the oil price. If Oil Prices Stay in the 50 to 70 5 range over the next 12 months, that should bolster consumer spending. Its about 0. 2 or 0. 3 increase in u. S. Gdp. So youre talking about 1 to 2 . I wouldnt go right off the peak. From the geopolitical risks in the middle east and russia and ukraine, we probably are seeing a sustainable decline in oil that could boost gdp 0. 5 to 0. 75 perncentage points. Hank, what we are seeing in oil, that in no way causes you do downgrade Global Growth expectations . This is all supply . No, i think it is mostly supply. Look, demand grows every year, albeit recently its growing a little bit slower because of substitutions, Energy Efficiency and the slow europe and slowing china. But this is mostly about supply. And lower oil is good for the good guys. And its bad for the bad guys. Russia, venezuela, iran, there are a few others in there. Obviously, that is not good for that. And theres concern about theres a black swan here on the negative side is geopolitical trouble caused by russia doing something unexpected because oil is, really, really collapsing their economy. But, yes, can a black swan be good . I agree, this is good for the consumer, both u. S. And global consumer. Its great for china. Its great for japan, its great for the United States. Its just that its happened so quickly, theres a shock to it. But lets enjoy filling up at 2. 60 a gallon. In new jersey, its even less, joe. I know. I want a buck and a quarter again. Thats what it was when i was in high school. We find more and more of it. Its like, you know, we all believe that ridiculous peak oil. You know, theres no reason why the malthusians have to come through. They usually doing. Usually our technology, suddenly we do horizontal drilling. Weve got more i think on the economy than in saudi arabia at this point. 9 Million Barrels a day of production this week. Thats the most production weve had in the early u. S. In the last 20 years. God, i can remember when we were arguing with certain administrations about opening up more drilling and we just kept hearing, look, were not going to solve our oil problems domestical domestically. Thats not going to happen. The one area that does sort of god, the cheaper hydro carbons get, the more the gap grows between that and all these other. The alternative sources of energy . All this stuff that you know, if youre, you happeknow, age and green. Ge still no, we dont yeah. Wind. Anyway, thank you, jeremy. Thank you, hank. Thank you. Well see you. Go back to are you teaching a class today at all, haverford, or are you off . What are you you have nothing to do with haverford, the school . Nothing to do with you run their endowment . You do nothing . You just stole the name . What not yet, but perhaps you can help me with an introduction there. Youre open to managing the endowment, okay, all right. Absolutely. When we come back this morning, well have more on the oil shock and how its affecting china. How that economy is coming to grips with lower crude and how this could be a good thing for the powerhouse. And three years after the moment between john harwood and Texas Governor rick perry, the two sat down and shared some barbecue. What was on the menu and is another run for the white house in the works . Thats coming in the next hour of squawk box. Daughter do you and mom still have money with that broker . Dad yeah, 20 something years now. Thinking about what you want to do with your money . Daughter looking at options. What do you guys pay in fees . Dad i dont know exactly. Daughter if youre not happy do they have to pay you back . Dad it doesnt really work that way. Daughter you sure . Vo are you asking enough questions about the way your wealth is managed . Wealth management at charles schwab. You never jim jam shabriver flab dry ris. O is, bliss pounds hazy dray . Drywall shboop leaver murray. Hey, big bog panorama corn salabaty . Dude, squibble bits. Mareyayzee. Mormal snap jebby rolban jebby deetle flosh. [laughter] eh. Nows the time to get in the loop. Just look for our fall tv picks with xfinity on demand. Huh. Quickly find the seasons hottest shows, huh. Quickly find the seasons hottest shows, with a handpicked collection all in one place. Only from xfinity. Lets gate quick report on the National Weather from and get a National Forecast from the weather channels keith carson. Good morning, keith. Good morning. Lets take a look at whats going on. In the northeast, we have the remainder of the storm system here. Heavy snow in places like buffalo, obviously, we said that a couple weeks ago. This will be soever what were looking for along the east coast may see snow flurries. Not going to be a big deal. The real story today is out west. A massive storm system moving onshore against north california. Wind gusts over the coastline into washington and oregon. High wind warnings. Snow. In the San Francisco area, wind and rains. Obviously, california is still in extreme drought. We have 3 to 5 inches of rain coming onshore here. That is overall a good thing. Its going to happen really quickly, so that might be a negative. But the winds are going to be tremendous. In oregon, we could see wind gusts over 1100 miles per hour. Lots of water and big wind, not what you want to see when you live near trees. No, absolutely. A springy time. What is that, Wishful Thinking . Youre doing what you can, but the springy tie is annoying me because im getting too much showing on the bottom. Its a delicate balance, but i cant get it. When youre weird like we are, i might tie my tie like three our four things. I do the same thing. Different branch have different lengths. Do you get bothered by the closet door being left open . It is an ocd thing. But watch some of these actors that arent im back on my actor rant with the Angelina Jolie thing. Some of the actors that have to put on a tie. I see them Walking Around like this because theyve never done it brp theyve never had to be productive in society. Its like this. Its this high. Theyre Walking Around like that with a jacket on and you can see that much of the shirt. Theyre clueless. This is like that eddie murphy moving coming to america, they have a person that ties the tie for them. Exactly. Anyway, thank you. Keith, good to see you. Good to see you. Its a good summary now. I feel happy ow oh, so happy wti now down over 40 since peaking in june. Some economists are now saying falling demand in china is to blame for a big yump in the dive. The process that has been set up there are now mostly complete. Joining us right now to tell us what to expect from here, avandi shia. He jones us from hong kong. Andy, i have to give you perhaps. You called this way back in september. You were looking for oil to plummet to 60 a barrel. What did you see that led you to that call . Well, i saw chinas Energy Demand kind of fell in august. So that effectively the Overall Economic picture of japanese over investments. China is kind of a growth and energy. And eventually oil price has to catch up with the coal price in china. Basically, energy supply, twothirds is coal. The coal is down 60 . So i expect oil eventually to come down 60 , too. 60 from here or do you think that these prices were not far from what ud called from that 60 drop . Yeah. Its about 60. I think 60 is probably comfortable with the coal price in china. Andy, whats so interesting about this is so many people have assumed that this was a supply issue, that the United States has gotten much better at drilling. That weve been able to get much more oil out of the ground than we ever expected. Youre saying the reason for this plummet is a demand situation, that its a lousy economy. That depends on a lot of scarier scenarios when you start looking at the impact on stock markets. If you look at the commodities, copper and iron ore, you know, most are very similar. You have lags between the different types of commodities. So i really dont buy all the theories. Its up as we see as massive industrial machines. They adjust for the cool down to digest over investments. For all the Commodity Prices coming down. So what happens . Whats happening with chinas economy . How bad is it . And you think it bleeds over into other economies. The investment cycle is different from oil that we see here in the west. The west is dominated by consumption. Half of gdp is investment. And investment has a tendency to overshoot. So when you overshoot, you end up with a lot of overcapacity. Then you have to slow down. China has had an investment cycle for several times. I see that over the next four to five years, china will experience inflation and a sluggish demand. So i think a lot of the other things that will also exchange to some similar stuff. But not affect the consumption over the story. Chinese households are okay. The exports are okay and the government infrastructure dp dp is a contract yop. Tothirds are still okay. What does that mean for a gdp number next year for china . Well, the government probably is looking at 7 . I think its going to be difficult. When we look at energy consumption, its just stagnant. Its not growing. Energy demand really shows how the economy is doing. So if youre looking at sub7 , what does that mean for other nations that have trade with china . Well, it affects Raw Materials and equipment. So you have australia and doin effectively with this story. Japan and germany going through recession. Its very closely tied with china map on the other side, you have much more on the consumer side. Theyre experiencing much less impact. In september when you were looking for this crash in oil prices, wti was in the 90s, maybe 930 to 93 been right now, its sitting just above 61 at 61. Do you anticipate that range lasting long into next year . I think it will last at least five years. The oil price average is 20. 99. Because of chinas boom. When china goes into that situation, i fear the oil price will become too much. So 60 would be the minimal price for the next five years or so. The downside i dont know. I think china basically needs to cool off investment and to digest the overcapacity. Beautiful. I love that, andy. It was the chartel that just collapsed. I do. This long, National Nightmare is over, right . Thats what its actually worth. Yeah. I like it when people actually agree with me. Anyway wsh he may oh, yeah, we hit 6 30. Andy, thank you very much. We really appreciate your time. You see, i see this and i think pontus pilot. Coming up, ready for some i told you that i saw that on the tv screen and i thought they spelled it wrong. It does look like pontious pilot. It was women like pilots. Thats not true. Number two, they spelled pilots wrong, but its pilates. We really do need andrew for this. Were going to work out the numbers for lululemon. And later, getting caught up in angry protests. Sfoo. Good morning. Welcome back to squawk box here on cnbc. Im joe kernen along with becky quick. Andrew ross sorkin is in new york today where hes hosting the New York Times deal book conference and hes going to join us later this morning with a big, special guest. The treasury secretary of the United States, jack lew will be with andrew at 8 30 eastern. Making headlines this morning, in a closely watched case, a federal appeal escort overturned the Insider Trading convictions of two former hedge fund a u. S. Tournl says this will limit the ability of people to trade on inside information, but the whole issue is whats inside, whats not . You pay these research firms, check channels, markets call their sources to find out how things are going. Thats inside information. What have we really gotten in a nefarious way. What is digging, what is . Exactly. Maybe not a total surprise. Sony pictures is on track to debut the interview today. Reporters are banned from the event for the controversial comedy in an attempt to eliminate questions on the cyber attack which north korea is a principal. Its already what theyre talking about on the great. In a place that is pretty closed, hollywood is not the most transparent place and there are some things that go on there. This is what we expect that is happening, and you see. You know, it boggles the mind the kind of stuff that can come up. In any business, but even hollywood is spicier. And the russian rouble, falling to a new alltime low and the new alltime low. So its lower than the last alltime low so its a new alltime low. The dollar against the dollar extended earlier losses after russia raised its lending rate up to 10. 5 . There you go. You know whats interesting . We feel like we know these people. So its gossip we can get in on. I guess so. I guess that is. You know what . If you ever do run into one of them, go up and pretend like you know them and see how that works. If youre a huge star, you wonder why they why they dont like any of us. It happens once every 4,000 people. Lets check out shares of lululemon, the company out with Quarterly Results this morning. They came out with earnings better than expected. Revenue did come in a little bit shy. The Athletic Apparel company has been struggling all year with shares down almost 19 to 2014. Joining us right now on the squawk news line is pam catilaano at sun trust. Is this a turning point for this stock . Thats what some people are saying at this point. Absolutely. Theyve come in given the low base but we have a new ceo in place who is trying to prove himself. This is what we like to see. They came in above guidance. Revenue was a little light. It was 419. 4. Guidace was 4. 20 to 4. 25. There were a lot of issues out there with port delays. But a good comp, thats great to see. Also a very good sg a control. All in all, we were very happy with the print. I read another an lift report that says some of the things they like are trepdz, comps are getting easier. And its Like International Growth Prospects at this point. There is m a speculation out there. I just wonder, what is this, is this a real story of a turn around or a real story that somebody else might sweep in and be interested in this company . I dont think theyre both mutually exclusive. Everything comes at the right price. Obviously, the founder, chip wilson, had made inflammatory comments in the past. At one point, he was chairman of the board. Since that time, hes sold half his stake to a firm that, you know, helps that speculation that they could go the private equity route. And he is not as involved in the company. So clearly, all of that would seem to indicate that they are cleaning up their act to make themselves look more attractive. On the flip side, they did bring in the new ceo, i think theyre both very focused on getting the business turned the right direction. I am confident that the turn is occurring and we are seeing that in the stock price and we will continue to see that in the stock price. But theres always the opportunity on the private equity side. That said, i dont think they come for cheap. We have to think about the situation here. They have growth both domestically and internationally. Thats a true rarity in my space these days. I know you have a buy rating on the stock. Do you have a price target . Yes. We do have a price target on it and i apologize that you guys dont have it in front of you and i will get it for you in one moment if we could go on to the next question. Im sorry. Sure. Lets take a look at some of their competitors. I know that nike, under armour, gap, theres a lot of competition out there. How strong are they versus the competitors . Its a different brand. The market is expanding so dramatically across the board. So lulu is among the first on the leisure side, which is now a turn thats anything. Nike is a lot more for the actual hard core athlete, in my opinion. When we think about it, theyre going after that yoga product, as well, and that lifestyle. But if you look at the product versus the product at lulu, lulu has much more of that aspirational quality. Lulu still has going for them the innovation with the product and the design and we think that they still get that customer who is willing to pay the higher price point for it. We have to run, but do you have that price target . I will get it for you. Send it in to us and well talk about it later. The stock is at 46. 70 right now. Thank you very much for joining us this morning. Right. See what this natural burger is. Okay. Okay. Still ahead on squawk box, three years after the oops moment, john harwood and Texas Governor rick perry got together for some barbecue. Is he gearing up for another run for the white house . And did they completely forget the Barbecue Sauce . Thats next right here on squawk. Will that be all, sir . Thank you. Ordering chinese food is a very predictable experience. I order b14. I get b14. No surprises. Buying business internet, on the other hand, can be a roller coaster White Knuckle thrill ride. Youre promised one speed. But do you consistently get it . You do with comcast business. And often even more. Its reliable. Just like kung pao fish. Thank you, ping. Reliably fast internet starts at 89. 95 a month. Comcast business. Built for business. Welcome back, everybody. We were talking about lululemon. The price target she has is 62. The stock price is just below that. It was under review and she wasnt sure if she could say it or not, so she had to get approval. Its been three years since john harwood and rick perry had an oops moment. They sat down with some texas barbecue to relive that moment. How nice. And to look ahead to a potential 2016 run for the governor, not for harwood. Do you have any concern that that moment would be too big an obstacle . I dont. One of the errors i made was in not being prepared. I was a little arrogant and that had as much to do with my demise as a candidate as, you know, forgetting the third agency of government. I spent the last 22, 23 months in preparation to run for the presidency. The real tragedy, john harwood, was that a libertariantype candidate from texas if you cant come up with three agencies to close down, youre not a true libertarian. He should have had seven or eight ready to go if youre looking for a superfluous useless government spending. Right, john . The craziest thing that we had about that whole moment that we had was on television, he remembered two and he couldnt remember the third, ron paul, mitt romney, everybody on stage was throwing lifelines his way. And iran paul says epa or or no romney said epa. If rick perry and said yeah, the epa, the whole thing would have stopped and we wouldnt have had the oops moment. But he was honest and said thats not the one im talking about, but i cant think of the one im talking about. Honest politicians never get elected, john, or rarely. Ill tell you one thing about rick perry, though. He is a gracious guy and a personal guy from very soon after that happened, he couldnt have been more genial about the whole thing. Hes having some fun with it now, which is why we sat down. And talking about some social issues, too. He made some comments about gay people. He came on and he said, you know, i was really dumb. He cops to saying some stupid things, which arent obviously he doesnt have a monopoly on that. You know, youre eating foot food. I dont know whether he runs or not. It looks like hes going to run. We have cke on later, charles jr. They have a new all natural burger coming out, john. I have to ask you a couple of questions and play a little game with you here for rankings. I loved it. I got a lot of mail. When you called Jonathan Gruber a big nothing burger, number one, an entire Network Needs to reexamine their programming for the past three weeks base thats all theyve talked about for three weeks. Which one are you talking about . Its not our sister network, shock me with a feather. Its a big nothing burger. So im trying to find something that is a burger. So gruber was a big nothing burger. How about what is benghazi a nothing burger . Is it a how about whats the bigger burger, that or the lois lerner the big nothing berger . Could get sustenance from either one of those . It extends on what you want in your burger. They seem like serious things to me. Of course theyre serious things. But youre calling them nothing burgers. Is this bridgegate, is that a tencourse meal to democrats . Because, you see, i would call that a i wouldnt even call that thats like eating air. I mean, a couple of underlings to hayes, you know, some guy in ft. Lee closed down a couple lace . Another network is ready to take that all the way to watergate, yet youre telling me these acts using the irs to extract punishment or i didnt say anything about that. But where do i get a meal . Do i get a meal with bridgegate or do i get a meal with you know where you get a meal, joe . You get a meal on the Living Standards of average people. Thats the biggest problem the country gruber or benghazi or irs . Gruber is not a scandal. Okay. Gruber is just a guy mouthing off in a stupid way. Benghazi is a terrible to put something over on the American People and call them stupid and to not even sell what youre really doing is not a scandal . Oh, thats a policy guy talking about what policy people do all the time. Its not theres no gravity to that. How about benghazi . How about irs . Look, benghazi was a horrendous National Security failure and tragedy. And the irs is a set of actions that shouldnt have happened. But was it directed by the white house . No. Well, certainly the media wont find out on that one. Anyway, thank you, john. Thanks for playing along. You can see this entire digital original on cnbc. Com. When we come back, reinventing the rust belt. Columbus, ohio, says it is making a comeback. But is a perception problem keeping companies away. As we head to a break, check out some of the most clicked on on cnbc. Com. Tdd 18003452550 [ male announcer ] your love for trading never stops, tdd 18003452550 even on the go. Tdd 18003452550 open a schwab account, and you could earn tdd 18003452550 300 commissionfree online trades. Tdd 18003452550 so when a market move affects one of your positions, tdd 18003452550 schwab can help you decide what to do. Tdd 18003452550 with tools like free livestreaming cnbc tv tdd 18003452550 that give you the latest Financial News and trends. Tdd 18003452550 and bubble charts and price charts that let you see exactly tdd 18003452550 how market activity is affecting your positions. 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It is five minutes to 7 00 in the morning and it is exam week. So thats part of why were not seeing a whole lot of students around here, but there is a lot of attention not just to what theyve learned and studied this past semester, but also what happens after they leave. Thats a big issue not only in ohio but throughout the states formerly known as the rust belt. This so called brain drain. Ohios Governor John Kasich says for young graduates really everything they need is right here. There are Great Companies all across this state. There are opportunities for young people to get them excited along with a renovation with a lot of the neighborhoods in our urban areas in this state. So, you know, its cool to live over the rind. Its cool to live in the flat. Over the rind, cincinnati, short north here in columbus, the flats in cleveland. I studied up on that. Heres the thing. Its not exactly working out here in ohio or anywhere else. According to the cleveland fed, 47 or so of the students with degrees or people 25 to 54 with a bachelors degree moving out of state. In the state, only about 29 . Thats saying the state is not attracting people and that adds to this sort of brain drain. We see it in our top states for business. But look at the workforce rank. 46. And the quality of life rank, 43rd. Theres an issue in the rust belt as they try and rebound getting people to come back, keeping the talent part of the thing that will do that, of course, is the economy and jobs. And in that regard, this area is on the comeback trail. Its a bohemian, like, yuppie mecca over the rind now. You need to switch to basketball, scott, for wisconsin. They won last night. You went to wisconsin, didnt you . I went to wisconsin, yes. Very liberal school. Very liberal school. But i went to colorado, very liberal. What happened . What happened . Its weird. You were the start of the ohio brain drain, you realize. When you left cincinnati, thats when the brain drain started. Yeah right. Its a good place to be from. Thank you, scott. Thank you for everything this week. Squawk box will be right back. Hey what are you doing . I was thinking about taking this speed test from comcast business. Oh yeah . If they cant give us faster internet or save us money, theyll give us 150 bucks. Sounds like a win win. Guys faster internet . I have never been on the internet and i am doing pretty well. Does he even work here . Dont listen to the naysayer. Take the comcast business speed test. Get faster speeds or more savings, or well give you 150. Comcast business. Built for business