Transcripts For CNBC Worldwide Exchange 20131021

For the currency. We have seen a number of effects on the u. S. Dollar, the japanese yen, etc. , but were compensating in our numbers. And cleaning up the mess. Jpmorgans close to a deal to settle u. S. Related problems. The bank could still face more legal woes. The edf is going to clean up the fukushima plant in japan. Announcer youre watching Worldwide Exchange bringing you Business News from around the globe. Hello. Warm welcome to the start of Worldwide Exchange for the week. Plenty to get through on todays show as ever. Finally, it is u. S. Jobs tuesday this week, but how should investors expect the bull market to go. The treasuries well talk about at 10 20 c. T. The weaker than expected numbers dont really move the needle. Well discuss that as we look at japanese exports at 10 30. As the new department gets set to protect data, well ask whether twitter and google are right to get concerned. Thats 10 45 c. E. T. Plus, its being billed as the biggest auction ever. Well hear from a latin american analyst and why the government has low expectations. Plenty of earnings state side. How is mcdonalds new strategy to manage low u. S. Margins fairing. Well discuss the q 3 numbers later. If youve got any thoughts or comments throughout the show, you can email us there worldwide cnbc. Com. Philips triples their net profits. Improvements in all three of its Major Business movements. In a first of cnbc ever, the ceo spoke about the Health Care Reform and said it proved to be an opportunity for the company. Ive always said the Health Care Reform in the United States causes uncertainty, but overall it will cause liquidation of the health care system. Thats a distraction in the short term. Hospital ceos are not doing as much Capital Expenditures as they did before, and we see opportunities to change the role of philips in the market. Im very excited to become Technology Partner in hospitals and want to drive efficacy. What about the Share Buy Back program here. Is that a reflection that as the board feels business markets may be improving the market isnt appropriately rewarding phillips for the work its doing and youre trying to get the share pry higher . We have talked about our Capital Allocation policy and our Capital Market in september. We have outlined we see many opportunities to grow phillips 4 to 6 offer the next three years. We see opportunities to further boost opportunity by 300 to 400 bases points. We hope to invest more in innovation to the tune of about 200 basis points. Net net this improves further the result of philips from 10 to 11 . Well be strongly cash generative and as such even accounting for some buy back acquisitions. It fits well into use of cash while also mitigating risks. This Share Buy Back program of 1. 5 billion will start in the month of october 2013 and run for the next two to three years. I think its a sign of confidence that we have in the performance trajectory of phillips. Take a look at phillips shares today. Theyre doing pretty well, up 6 , big move for a company like philips. Meanwhile, sap jumped 23 . The Software Company is warning Exchange Rate effects could affect them in the Fourth Quarter. The Third Quarter had seen improvements in the companys asian operations. Weve actually with the numbers were announcing today seen asia pacific japan returning from growth, which is of course a great news. Theres lots of companies in asia who need World Class Software to grow business. They are choosing sap. The growth in china has been very, very strong in this quarter. China is the locomotion for asia. We have a good outlook for the year. We are reiterating our guidance for the full year to be a double digit growth for the company for the full year. We also see an opportunity to continue to expand our margin. Can you talk to us, jim, about the pace of transformation in the company, this move away from people having the software on their own computers, instead accessing the Service Using your cloud. Has that transformed . As you look into the numbers, a good top line, a good bottom line, theres an industry with the world moving to the cloud. The companies dont want to deal with the infrastructure inside. The world is moving faster to this memory computing that sap invent invented. It can analyze large amounts of data and can analyze the future. We have 162 growth in the cloud. We have 90 growth and both of these businesses are becoming businesses of a billion euro size, which means theyre a critical mass. Sap shares doing well, up 5 . Equity strategist of btig joins us now. Two really strong share performances from your biggest blue chips. The sap a month ago lowered the expectations and managed to beat them. People are talking about that. How big an issue is the euro . Its a big issue. Q 3 moving up and q 4 higher than last year. Youre seeing a consistent increase in the euro which is quasi tightening. Mr. Draghi is talking about that. We dont look at the currency. Lets talk about philips for a moment. He came in to turn things around. Hows he doing . I used to like to call philips a gentomar hoping they would continue to improve it and they always came through. Since mr. Van hooten came in, it took a year for people to stop being skeptical. Today is a great example. How would you compare it against siemens . Two things to note. Philips did well in the lighting business which siemens got rid of it. The short term aspects arent very positive for health care. Im seeing this more as industrialized. If you look at sort of when philip ss was in its never doing anything right, it underperformed 50 . Since thin its only gained half of that. Those of you who are looking at these equities, you are seeing big institutional flows back into europe. Theres a cyclical recovery in europe. Whats the risk of disappointment . I think in the cyclical terms, its quite high. When the dax is underperforming, i think a combination because people are buying more risk which means it has been moved higher. The effects are hurting as well. On a cyclical side, at the beginning of the year if you said telephones would be up 30 on the sector in the market, you would have thought you were mad for saying that. Its been a big sell sector. Philips is in a category of selfhelp. What are the key earnings . Do you think were going to be meeting expectations, do you think . Are we going to be lower . A lot of companies have said theyve lowered in the first and second quarters. Theyre missing. They want to make it up in the second half. Which is a classic example whats happening in the last two years. You had companies missing the first two quarters, dont worry, well make it up. The second the same thing. And theyre pushing it out further and further. Weve seen that this year. First quarter actual earnings and the second half and on average they were 10 lower. I think were starting to see that come through. Third quarter numbers arent quite as good as people were hoping. Companies are having to look at the fouryear outlook. Add in the uncertainty of whats happening in the last four months. Nick, good to see you. Thank you from equity strategy btig. Take this picture of the dax 600. Hope you can see where we stand. Around 5 to 3 on the dow jones. As far as ftse is concerned, we were up 46 points on frida friday,. 7 . Early earnings dominating. Cac current is down slightly. Down. 4 of 1 . We looked at some of the leading stocks. Rbs down. A little bit weaker. The Dutch Company blaming adverse currency effects. Again, another Company Coming out from that as well. Selfgrowth for sap slowing in the second and Third Quarter. Its 5. 2 . Rbs, the worst performer, 5. 5 . J. P. Morgue gans reached a tentative deal to reach a prose. They could be close to a deal to split the bank. Bond rates, treasury yields down here, 2. 59 . We got down to 2. 55 last week. Post the nontaper decision. Yield is a little too high. Get minutes out this week from the umptd k. The currency market we saw the dollar on the back foot on friday. This is where we stand. 136. 67 for euro dollar. Aussie dollar with a 96 handle. Sterling cable around 1. 60, 1. 67. Thats where we stand now an hour nood traiting week. Were having the day wrapped up from china. Thank you for that, ross. Let me start with some Economic Data. Increasing exports slowed from the august level and imports rose 16. 59 . Short of expectations. Nevertheless, on the markets the nikkei gained almost 1 with the weaker yen gaining supports. Investors are eyeing the all important jobs data due out tomorrow. China markets outperformed the china market gaining a strong 1. 6 after the premier league ensures investors growth targets will be met. The hang seng added. 4 to end about flat. Over in australia minors pushed the asx higher. Let me show you some individual stock on our radar. Hutch chin son whampoa is calling off a plan to sell its park and Shop Supermarket chain and will focus on expanding in china. The shares tumbled. Thank you, sixuan. Thats the latest out of asia. Jpmorgan reached a tentative 13 billion deal to settle pending civil cases with the Justice Department. Federal Housing Finance agency and the new York Attorney generals office. It would resolve probes into the banks handling prior to the housing slump. The deal was struck on friday between jamie dimon and the u. S. Attorney general, eric holder. Of that 13 billion, 4 billion will go to a consumer relief fund. Jpmorgan tried to insulate it sieve from criminal prosecution, but the u. S. Wouldnt provide those services. Just half of 1 . Umpt s. Regulators are reportedly seeking more than 6 billion from bank of merck for allegedly misleading fannie mae and freddie mac before the housing bust. The fhfa is pursuing the penalty. Its cost the bank more than 40 billion in Legal Expenses and other charges linked to bad subprime mortgages. And Deutsche Bank is in discussions with 50 of its workers over the possible manipulation of the livor rate. The investigation is by ernst and young. The paper reported the staff was able to bring lawyers and witnesses to the meetings. Tom hayes is expected to plead not guilty. Serious fraught office has given anonymity to the former trader. He faces charges into the u. S. Into alleged fixing. Hes not had the opportunity to enter a plea. Umpt s. Treasury yield, how will jobs tuesday move things along . Well get into that straight after this. Announcer youre watching Worldwide Exchange. Brittain has signed a deal with edf to help out with the cleanup. Initial cost estimates for the two closed reactors are set to 40 billion pounds. Under the deal the u. K. Government will guarantee the price of 50 cents per megawatt hour. That will currently double the price of u. S. Power. Whats the best chance to provide the energys policy. Tweet us or go direct to me rosswestgate. Nuclear doesnt generate any carbon but it has other risks associated with. U. S. Treasury secretary jack lew says the u. S. Economy has been bruised by the fiscal fight in washington. Hes pretty confident america will recover. Speaking on nbcs meet the press the country cant suffer another round of brinkmanship. I know the direction. The direction is that it took an economy that is fighting hard to get good Economic Growth going, to create jobs for the american people, and it took it in the wrong direction. And in spite that in washington, companies are mostly upbeat about Economic Growth. In the latest survey, they had growth. 27 of economists showed riding in the Third Quarter. The quarter is expecting Rising Interest Rates to drag on sales over the next year. U. S. Treasury yields, we saw last week getting down to 12. 5 sorry, 2. 5 . We were yielding 2. 74 before we got the resolution in washington. Mark oswald joins us for more. Mark, good to see you. We know we have a faulk of Economic Data. We have a potential wrangle at the beginning of the year. Whats a conceivable or most likely i should say . I think the consensus will focus on march for the time being. I think how it pans out is dependent on a number of things. Being in control of the fed is fracturing. The not so dovish members, like mr. Williams from the San Francisco fed who is close with miss yellen have to look at the various aspects. The data and there is a threat of more shenanigans washington, they couldnt, could they . Well, on the other hand, whats the benefit of more qe . I think this is the question which is vexing a number of those people who are moving to a less dovish start in the sense that theyre worried that the more qe they do, the more that markets are chronically dependent on that flow of qe, not the stock of qe, the more the risks to financial stability, which is one of the arguments which was profit back in may and which seems to be swept completely under the carpet are becoming exponential. I think thats absolutely correct. Then we come back to this point, dont we . One of the reasons that they also didnt move was because they talked about the majority of qe. Market rate went up to 3 . Rephis stopped. Economic advantage was impacted. Yes. Youve got that risk, but that risk is always going to be there. At some stake its going to happen, and if weve got a recovery is the recovery Strong Enough to withstand the risk of that . None of us have fiscal timing going on. Im not sure thats the issue here. The issue is whatever recovery we have, when it does have traction, it will threaten to stall it partially. Were now in a situation actually where the more they do, the more damaging it could become, particularly from two aspects. One is all the Central Banks can ever do is buy time for politicians to act. Buy time for politicians to waste. Well, in this particular case theyve been wasting plenty of it. Weve been having the fiscal and budgetary discussions for 2 1 2 years. Secondly, its time for companies to invest and invest at low rates. Thats not been happening to the extent they would have wanted. There hasnt been that much investment in people. That survey from the nab shows us still reticent to hire because of the uncertainties. If you look at it, actually people have been more focused on buying back their shares, paying out big dividends than actually investing in new products, in hiring people, in improving production facilities. So youve got to this point four, five years in to qe where youre actually saying, well, if we havent got benefit that were meant to have, whats the point of carrying on with it . But its a difficult one for markets to digest. Yes. Mark, stick around. Meanwhile, chinese Rating Agency degong recently downgraded the u. S. Sixuan spoke with the chairman earlier. Sixuan, so, just explain more about this ratings agency. It wont be that well known in america. Yeah, youre right. Theyre in fact one of the local chinese rating agencies and recently it downgraded the United States from a minus to a. Also youchb graded some local Chinese Government bonds, dagong. They remain negative on the sovereign credit. I got to speak to the chairman and i asked him whether the debt deals dropping in washington last week puts americas credit worthiness on to firmer footing and have a listen. Translator the u. S. Will try to resolve the debt ceiling issue over the next couple of months, but this wont change the substance of the matter, which is the countrys deteriorating ability to repay its debt. It doesnt rely on its income or wealth to repay its debt. Instead, they borrow new debt to pay old debt. This is a very vulnerable relationship which can put the government on the edge of a debt crisis. This is a longterm problem and wont be fundamentally resolved by raising the debt ceiling. We remain bearish. Ross . Good stuff, sixuan. Catch you a little bit later. That was part of sixuans interview. Im just wondering whether we think dagong we care of what dagong says. Whats the validity . Theres a lot of merit to it. The counter argument, the u. S. Dollar remains the worlds currency. Its effectively like gold was 100 years ago. In 2011 chinese and japanese treasuries went up. If theyre accumulating it affects reserves, the pace they are, even if theyre diversifying. Their holdings will have to rise. In the long run were on the whole for the dpie lem ma. The dollars influence in the world ironically as its Energy Imports fall. The stock of dollar is going externally falls as well, its going to come less. For the time being markets will lean against the idea. Theres a big threat because the fed is continuing to buy. Good article last week about companies in asia. If you have to post security for trades, youve got to post it in dollars basically. No ones prepared to accept much else in treasuries. There you go, thats the other side of the coin, which is the failing of the big en countries. Creates local Financial Markets which would then offer securities for people to offer against trade. Nevertheless, you have the other side of the coin. There are a lot of cross border swap agreements where the government will post the security. In the long run, more and more trade is being done or settled not in the dollar. There is an increasing focus on it. That process is a very, very longterm process. Youre talking about something that will happen over 5, 10, 15 years. The u. S. Does need to address this problem of its fiscal problems because otherwise in the long run it may find itself on a trying to solve a problem in a more vexed situation. Tonl morrow we have the jobs numbers. Were going to ask you for your predictions for the payroll report which is due out on tuesday. Go to trader pols. Cnbc. Com. You can have your say on twitter using traderpoll. Above 180,000, below or around 180,000. Now well take a short break. Still to come on the show, its a 15 month record trade deficit for japan. Can the nation meet its inflation markets and stay on the path to recovery . Farmers presents fifteen seconds of smart. So you want to drive more safely . Stop eating. Take deep breaths. Avoid bad weather. [ whispers ] get eight hours. [ shouts over music ] turn it down and, of course, talk to farmers. Hi. Hi. We are farmers bum pa dum, bum bum bum bum around the globe, earnings season in full swing in europe. Philips sets the tone. Its nearly tripled its profits. Hes telling cnbc hes upbeat. We have to work hard in the First Quarter, but we have confidence if we stay committed to our targets. Sap confirms its full year outlook. The company ceo also told cnbc the currency impact wont last. We cant take responsibility for the currencies, and we have seen a number of effects on the u. S. Dollar, the japanese yen, etc. , but we are compensating more in our numbers. Cleaning up the mess, jpmorgan is reportedly close to a record deal to settle u. S. Mortgagerelated probes but the bank could still face more legal woes. Brittain signs a deal with french utility edf to build a 16 billion pound Nuclear Power station amid reports that highly radioactive water has breached barriers at the fukushima plant in japan. Were deep in earnings all over the globe. China mobile has just come out with its numbers. Its talked about an operating revenue for the first three quarters of this year of 463 billion. Up 9. 4 . The average revenue per user slipped slightly, 66 recommend b. Get this, as of the 30th of september, the total china mobile customers 675 million which is 50 million up from 740 million in june. Thats not bad, 755 million customers for china mobile. Its operating revenue for the first threequarters, reaching 463 billion which is the figure. There we go. Thats a good number for you, isnt it . 4 no, 755 million customers. Right. We should be so lucky. European equity market today, ftse 100 up. 2 . Xetra dax, up. 1 . And on the currency markets, dollars on the back on friday. Similar sort of levels at the moment for the euro. Dollar where it was. Dollar yen has perced up slightly to 98. Cable below the 162 level. Now we also got some weaker than expected export numbers from japan. Exports up 11. 5 in september. Thats down from the increase of 14. 6 for august. Imports are up 16. 5 but also short of expectations. The trade deficit for the month 9. 5 billion running a negative balance for the 15th straight month. Joining us with his thoughts, chief Investment Officer and cio of Perry International trading joining us from hong kong. Ed, thank you for joining us. Did the trade data move anything on the dollar today . Good morning or good evening, i guess, as it were. Not really. 15 months of trade deficit were proceeded by 15 years of trade surplus. No big deal. So, look, you know, its interesting because dollar enis sort of in a range at the moment, sort of lets call it 95 to 100 if were amongst friends. Equities are now trading in a range. Whats going on . Is there are we whats the next big move . I think were theres been a pause for effect. Really waiting to see how earnings season progresses. Were about to pass into earnings numbers and this fits our overall thesis at rogers Investment Advisors that were starting to move away from an etf all market up, all market down time period where individual Company Earnings are going to become more and more important for individual investors and stock picking in effect will become a much more important part of the portfolio rather than the allocation model to japan versus china. Yeah. Are we are overseas investors questioning the third arrow of abenomics . Is that going to be a key figure to put money into the japanese market . Definitely overseas investors are questioning the third year of abenomics. I dont think theres confidence that the third year is a lot of darts. Hue do the five sacred items such as rice, agriculture, etc. , get addressed under the auspices of the tpp. Theres not one arrow, its multiple, multiple darts. But theres less and less disbelief out there, let us say. Youve had two straight quarters of gdp numbers. You have some of the best tonkin survey numbers since 2006. Its almost prelehman. Theres undeniably better and better Economic Data coming to japan so the doubters are shrinking. In terms of the challenges that japan faces, for getting the third arrow part, forget what about the other part, which is the biggest arrow the biggest hurdle of the lot, that not only a weak yen increases energy import prices, but japan is still actually getting nowhere with reforming its whole Energy Infrastructure and because it imports so much, a weaker yen is only a marginal benefit if the offset is so huge on the other side and to what extent is the lack of growth in the second tier of asia going to present the likes of the indias and the indonesias who have also seen their currencies actually depreciate more than the yen, to what extent does that present a very substantial head wind to japan . Second question first. We think china is the most important regional partner, in fact Global Partner for japan. Chinas been japans largest trading partner since 2004. So a chinese recovery outweighs all the second tier markets going sideways to slightly negative. We do believe a chinese recovery is well in the works. So thats the second question. First question as far as Energy Policy is concerned, we all know that the trade data have been exacerbated by the fact that, you know, the dollar yen has moved against japan as far as having to import all of its energy sources. We think that the ultimate answer is going to be a combination of a certain number of Nuclear Power plants have to get turned back on here and abe will spend Political Capital as and when he needs to in order to effect that. Its almost inconceivable that japan survives on external energy sources. We dont see how the math works frankly if thats where they have to go to. We think there are a certain number of Nuclear Plants that have to get turned back on. We think japan will be a leader with some amazing advances as far as tax structure to encourage solar power, for example. We think japan will be a real leader not only in tax policy but also in technology in that space. Well see what happens. Good to see you this evening. Thank you for joining us. Ed rogers. Teppco says rainwater with toxic levels exceeding limits overflowed through 12 areas areas the the Fukushima Daiichi Nuclear Power plant. Heavy rainfall this week sent contaminated water seeping into the ground. Its unlikely to float into the nearby pacific ocean. Its following recent typhoons. Brittain, meanwhile, has signed a deal with edf to build the First Nuclear plant since the 2011 fukushima disaster. The project in summer set will be built by a consortium and include arriva. Stefan is with us. Taking quite some time for the British Government to negotiate a provider or someone to build this power plant. What are the terms of the deal . Whats going to make it profitable for the French Energy companies in terms of strike prices and what theyre going to get out of it . Thats the 14 billion question, ross. Actually, ive got a question for you. First significant contract in the Nuclear Sector since fukushima that could revive the whole industry in europe. How would you like, how would you expect the stock to react today . Well, yes, and its not up, is it . Its not up. Its losing ground because there is a problem. Edf will assume the financial risk for that project. Its a 14 billion pound contract but it could cost up to 16 billion pounds according to industry experts. Thats roughly 19 billion euros. Edf will take the financial risk even if the government in the u. K. Is ready to guarantee a minimum price for electricity. It will pay at least 89. 5 pounds which is twice the current price. Its a significant price for edf. What if there is a significant cost. What if the price is higher than the original plan. Edf will have to face the burden. It happened already in france. Edf built a new generation of Nuclear Plants in the north of france. The project is now four years behind schedule. Edf believes that it will start producing electricity in 2016 instead of 2012 and the final cost is now estimated at 8. 5 billion euros. Thats to compare with the original estimate of 3. 3 billion euros. Thats almost three times the original price and that is the reason why centrica decided to drop the project because there were too many uncertainties. For edf, yes, its an ambitious project for us but its a risky investment in the united kingdom. Four years behind schedule on their current project. No wonder investors are a little bit nervous. One might hope they might be able to avoid some of the mistakes that have been made there. Yeah. The french one was clearly a prototype. Theyve learned a lot from that project. Hopefully they will not make the same mistakes in the united kingdom. One more detail, ross. Edf says 65 of the project will be financed with debt. Edf has a big level of debt, huge level of debt and increasing it further may scare some investors. Still, mark, its not a bad time to be issuing debt, is it, if youre a company . No. Its very cheap. These are historically low levels. Even if one says they might have to pay an extra 50 to 100 bases points, you have to look at it in terms of, well, thats all very well to say their spreads were, say, 150 and they go to 250, but youre still talking at current levels. For the 30 year project, issue a 30 year debt. Theyre making issues on the inflation debt because they are a utility and thats very popular debt which there isnt enough of for a lot of people. Okay. Thanks for that, mark. Stefan, thank you. Well come back to you. As a result of all of this nuclear news were asking you is nuclear the best answer to provide a countrys Energy Security. Is the British Government going down the wrong path. They say a more than capable nation should be left behind with this type of technology. Its referring to the point that weve brought in other countries to make it for us. If you want to join the conversation on Worldwide Exchange, get in touch with us. Email us or tweet or direct to me rosswestgate. Meanwhile, as far as the agenda in asia, the zte and smic will be reporting Third Quarter results. Out of india, cain india numbers are due. Theyre working on economic ties and the disputed border between the two asian giants. Well take a short break. Still to come, twitter has warned of the e. U. Risk. Well discuss what the implications might be. I love having a free checked bag with my united mileageplus explorer card. Ive saved 75 in checked bag fees. [ delavane ] priority boarding is really important to us. You can just get on the plane and relax. [ julian ] having a card that doesnt charge you foreign transaction fees saves me a ton of money. [ delavane ] we can go to any country and spend money the way we would in the u. S. When i spend money on this card, i can see brazil in my future. [ anthony ] i use the explorer card to earn miles in order to go visit my family, which means a lot to me. Germany has agreed to sit at the bargaining table with Angela Merkel to form a grand coalition. This is after the Opening Party opened the door to concessions. Talks that could drag on for weeks as the spd tries to get its 470,000 members to back the deal or a deal. The Opposition Party Sigmund Gabriel says he expects a new government by christmas. A court has ruled that the former Prime Minister Silvia Berlusconi should be banned from Public Office for years. The process of enforcing this political ban will likely be lengthy as Parliament Still has to ratify. Some 25,000 antiausterity protesters threw eggs and fire crackers at the building during a march on saturday. Demonstrators clashed with police chanting slogans with cuts to welfare programs. It comes as the Prime Minister tries to hold his Coalition Government together. And the foundation which owns more than 33 of mont monte de pasche is under pressure to complete the move as they need to meet eu conditions for state bailout. The stock is flat in milan. The European Commission is saying that theyre going to hit junior holders and it could undermine confidence in the regions banking system. In a letter leaked, the ecb president said the new rules are there. The European Commission is saying this is a template. Mr. Draghi is saying, given what happened inside, first i think we need to be a little bit careful. Hes also in many ways admitting that the european Banking Sector is shaky and any new move which would undermine confidence are going to be adverse. Given where lending is, still contracting, its little surprise and also where growth is, its little surprise mr. Draghi yeah. Do you think the latest tests will uncover more truth or be more of a wash . Unfortunately theres no guarantees that theyll actually reveal anything more. It will be much of the same sort of people looking at exactly the same sort of data. So they probably will try to uncover this and that, but without upsetting markets too far or upsetting confidence that is there which is fragile . Good to see you . Got a good week coming up. Mark, strategist at monument securities. Twitter says the e. U. s Data Protection form is a specific risk factor for the Data Services business. The European Parliament is set to vote on regulations to protect consumer data in the hands of private sector organizations. Google, too, has listed privacy laws as the legal strategic issue it faces. Christopher sythe joins us now. Chris, thanks so much, indeed, for joining us. For i. T. Firms and for social network sites, the ability to collect data on individuals and what they do in terms of their transactions, their buying habits is hugely, hugely valuable. Is there anything in whats being proposed that threatens the trading or handling of that data . I dont think theres a fundamental change in the way they hold data. I think a lot of the concern comes from the rhetoric that was around the first draft of the regulation where the people proposing the regulation challenged the american based social media for the Data Protection principles and the lobbying thats gone on and the amendments that have been proposed. Were not clear exactly the extent it will be adopted, but theyve provided certain safeguards against aggregated or pseudonomized data to determine general behaviors in a way which wont necessarily compromise individuals. Is there a difference between individual and group . Yes. Certainly the thrust of data regulation in europe is towards what they call personal data, which is defined as being data relating to an identifiable individual. So once you aggregate that data and reduce it to trends without identifying the individuals, then theres less concern. Thats safe. The interesting thing, of course, is cookie tracking in windows. Now you cant now get on to websites unless you say i accept your cookies. Thats correct. Thats a separate strain of legislation in europe. I think its symptomatic of the general principle, which is what the new regulation is aimed at. Data subjects, individuals, should be completely clear about how their data is used, who its seen by, whether its transferred, whether its exported, and just so they have transparency and control over that. The cookies rules, the new cookies rules are part of that general trend. The thing is if you dont accept it, you cant go to the website though. I wonder whether the commission might go further than theres a balance to be struck. The other thing is that cookies are often sort of pithery. Personally speaking im not sure they are. Im quite glad that amazon know the books i read so if a new book comes out i dont know about they can tell me about it. Which is what they would argue about. I dont have to put my payment details in. We shouldnt see cookies as all bad provided you know that. Thats the point. Christopher sythe. U. S. Earning season away. Its in overdrive with a quarter of the s p reporting this week. Our next guest says the bar is low. The second half of Worldwide Exchange right after this. This is Worldwide Exchange. Earning season in full swing. Philips setting the tone with a tripling of net profits in the Third Quarter. The ceo of the giant told cnbc hes upbeat. We have to work hard in the First Quarter, but we have confidence if we stay committed to our targets. Investors also looking into sap as they talk about their output. We cant take responsibility for the currencies, and we have seen a number of effects from the u. S. Dollar, the japanese yen, etc. , but were compensating more in our numbers. And cleaning up the mess jpmorgans reportedly close to a deal to settle a u. S. Probe. The bank could still face more legal woes. And president obama is going into damage control as he expects to address the tech issues plaguing the rollout of the Signature Health care program as the white house scrambles to find a fix. Announcer youre watching Worldwide Exchange bringing you Business News from around the globe. All right. If youre just joining us state side, a very good morning to you. A whole new trading week here on cnbc and as the start of your Global Trading day on Worldwide Exchange. The dow up 12 points, the s p up 28 points. 2 points above fair value for the nasdaq and the s p at the moment is a point below fair value. The ftse cnbc global 300 pretty flat during the session. The ftse is up fully up. 2 and down. 2 for the xetra dax. Plenty of individual results. Looking at s p and siemens topping the list of gainers. On the bond markets, treasury yields, 2. 59 or just below that, 2. 58 is the yield. Still below 2. 6. Pretty low still. The gilts yields just a tad higher. The dollar is on the back on friday. Today, gains against the euro. Pretty much where we were just above 137. Up slightly against the yen at 98. At 1. 6168. No major moves. No individual corporate stories. Lets get a recap of what happened in asia. Xisuan is in singapore. Thank you for that, ross. We have japans trade numbers. Theyre weaker than expected. Running a negative balance for a record 15th straight month. Increasing exports slowed from the august level and imports rose 16. 5 . Also short of expectations. Nevertheless, on the markets the nikkei added almost 1 with a weaker yen lending support. Asian markets higher coming off of wall streets strong lead friday. Investors are eyeing the all important jobs data due out tomorrow. Check of markets, the shanghai composite added 1. 6 . Fao schwartz Investor Growth targets will be met. The hang seng added. 4 . South korea kospi ended flat. In australia, the asx 200 had a fresh five year high. Let me show you individual stocks on our radar. Tencent jumped to a record high. Shares of this chinese internet giant has surged over 80 this year so far. Meanwhile, also on the hong kong wars, hutch chin son whampoa is actually trapping the plant to sell its parking lot Supermarket Chain and focused on expanding in china. The shares lost 1 in todays trade. Back to you. All right. Xisuan, thanks for that. Corporate stories very much to the fore here in europe. Philips was rallying. They saw net profits triple. All three segments of the business showed pretty good improvements in operating results. The company says head winds will affect sales in the coming quarters. Third quarter revenue just missing forecast. Although the firm says its still committed to reaching its financial targets for the year. Stock in s p getting a lift. The Software Group confirmed the guidance and its largely in line with its forecast. There were some currency headlines. Theyve been warning that Exchange Rate effects could hit its Fourth Quarter Revenue Growth to around 5 . Its very much Corporate News and earnings thats still on the agenda in the United States. Around 1 4 of the s p 500 report this week, to date well hear from mcdonalds and halliburton, netflix and Texas Instruments and vmw. Joining us is andrew from oppenheimer. Very good morning to you. Thanks for joining us. What do you think of this season . Weve racheted down our expectations. A large number of firms are reporting early. What do you think . Yeah. Good morning. I think were turning from the macro to the micro a little bit as we get past this dramg ma in washington, d. C. Were starting to see the flow of reports coming in. Generally its not the overall growth rates that are as important, but where they are relative to expectations. In this quarter, you know, we saw somewhat of a typical pattern which was coming into the quarter, expectations were racheted down pretty substantially from about 6. 5 growth expected in the beginning of the quarter to the beginning of the quarter when the reports started flowing in, that was all the way down about 3 . That got cut in half essentially. We think when all is said and done there will probably be your typical 65 to 70 up side surprise in companies. So far its been predominantly financials have been the big sector underway. We know theyve had some problems in terms of fixed income trading and some liabilities like in jpmorgans case. But i think youll get some more of the cyclical Sensitive Companies starting to flow in terms of industrials, technology. Our sense is from the macro side what youre going to hear are things are improving and theyve been improving through the quarter, not evenly in the u. S. But globally. It does seem to be the growth is bottoming and turning up. We do think that provides a catalyst Going Forward. Yeah. You talk about this and its more cyclical and globally exposed sectors. I suppose the question mark is whether that trade is going to bear more fruit. Whether its going to be backed up by the economics. We do believe it is before the whole washington if i as could he fiasco started. We think its turning. As we see the Economic Statistics flowing this week, we think that will continue. Well have a little bit of a hiccup because of the hit to confidence that we saw over the past couple of weeks, but in general we do think things are improving. When we look at the overall market, its still largely a valuation call as well. The overall market in the u. S. Is about fairly valued, but if we look at different sectors, like the cyclical sector versus traditional, more defensive sectors, the cyclical sector is historically less expensive than theyve been, especially with things bottoming and improving. We do think theres a bit of a tail wind there from the valuation side as well. Weve cut the estimates down for Third Quarter. What happens in the Fourth Quarter . Where are estimates there . Are we expecting a ramp up . Are we going to trim those back . Definitely need to trim those back as you look into the Fourth Quarter the estimates in our assumption are still too high. You know, analysts as a group are still forecasting earnings. Theyre going to grow about 10 in the Fourth Quarter, which is very unrealistic. Earnings have been growing in the range of 3 to 5 for the last four or five quarters. Theres nothing in the macro data that would suggest thats going to accelerate up to 10 . As the better than expected reports flow in this quarter, its going to be very unlikely that the forward numbers are going to remain especially for this year. The analysts may push out the forward numbers but the near term numbers still look elevated. Thats going to continue to drift in as we go through the Fourth Quarter. Just stay there, andrew, because you mentioned financials. Want to run some news behind that. Cnbc has confirmed jpmorgan has reached a tentative deal to settle civil cases with the Justice Department. The federal Financing Agency and the new York Attorney generals office. That would resolve probes into the banks handling of mortgagebacked securities prior to the housing slump. The deal was reportedly struck late on friday between jamie dimon and the u. S. Attorney general, eric holder. Of that 13 billion, 4 billion will go to a consumer relief fund. Jpmorgan is reportedly trying to insulate itself from criminal prosecution. The u. S. Government hasnt provided those a shurngss. Theyre up around half of 1 . At the same time u. S. Regulators are reportedly seeking millions from bank of america for misleading fannie mae and freddie mac. The fhfa is pursuing that. Its cost the bank more than 40 billion in Legal Expenses and other charges linked to bad subprime mortgages already. Bank of america stock up 1 3 of a percent as well. Andrew, you talked about financials leading the growth in the sector level. Are you comfortable with all of these . Jpmorgan gets a settlement, i presume thats a good thing. Are we going to live with the fact that these guys are getting fines . Yeah. I think especially when youre talking about the big u. S. Financials, theyre caught in that world of the Balance Sheet improving, activity picking up, mortgage statistics picking up. Loan losses coming down. You do have that both regulatory and headline risk that continues to hamper them. So i think, you know, when it comes from the very big u. S. Financials, thats going to be the case. The smaller regional banks that arent as much in the headline risk, i think theyre driving a lot more of the growth that were seeing in the sector. Jpmorgan was a pretty big hit because of the big charge. Fair enough. Andrew, get a cup of coffee, tea, whatever is your poison this time of the morning. Well come back to you fairly shortly. Also still to come, could d day be looming for european banks . Head to our website to see what mario draghi is outlining. You can follow us on twitter cnbcworld. Brittain, meanwhile, has signed a deal with edf today to build the First Nuclear plant in europe since the 201 1 fukushim disaster in japan. The project in somerset, in the southwest, will be built by a consortium. Arriva will have a 10 stake. Initial cost estimates sit at around 40 billion pounds. Under the deal they will guarantee a strike pies of 89 pounds and 50 pence per megawatt hour. Is nuclear the best answer for a countrys Energy Security . Has the British Government gone down the wrong path . Alex has tweeted the edf deal is shockingly bad. Edf will get a 9 return. It all depends, of course, on whether they can build the reactor on time and on schedule. Therein lie cost overruns. If you want to join the conversation, email us or tweet us. Well take a short break. Still to come, can mcdonalds serve up improved numbers when it reports before the open today in the states . In around 20 minutes well preview the fast food giants Third Quarter figures. Mine was earned orbiting the moon in 1971. Afghanistan in 2009. On the u. S. S. Saratoga in 1982. [ male announcer ] once its earned, usaa Auto Insurance is often handed down from generation to generation because it offers a superior level of protection and because usaas commitment to serve current and former military members and their families is without equal. Begin your legacy. Get an Auto Insurance quote. Usaa. We know what it means to serve. Announcer youre watching Worldwide Exchange. A recap of the headlines. Today solidarity for giants are securing equities. Jpmorgan is looking at a 13 billion fine. And technical glitches on the Health Care Exchanges are unacceptable. Lets get more on that. The president will speak at a white house event today at 11 30 eastern where hes expected to call the glitches of the new Health Care Insurance websites unacceptable. Of the president will have a long way for the consumers to set up for coverage while he tries to fix the problems. The department of health and Human Services says theyre bringing in people to work on the exchanges. On saturday president obama said the administration said half a Million People will apply for insurance but wouldnt say how many have enrolled. Lawmakers have criticized the u. S. Health secretary kathleen sebelius. They said she should testify but stopped short of saying she should resign. Meanwhile, u. S. Treasury secretary jack lew says the economy has been bruised. Hes confident that america will recover from the Government Shutdown. Speaking on cnbcs meet the press, its important the country doesnt experience another round of brinkmanship. We know from the shutdown there was a loss of economic activity. I cant give you a number today of what it is. I know the direction. The direction is that it took an economy that is fighting hard to get good Economic Growth going, to create jobs for the american people, and it took it in the wrong direction. Despite the uncertainty in washington, companies are still pretty upbeat about prospects for growth in the latest survey from the National Association, 70 expecting growth. Theyre not as optimistic about hiring. 27 of congress reported rising employment in their companies during the Third Quarter. A quarter expecting Rising Interest Rates and Higher Oil Prices to drag on sales over the next year. Well take a short break. Still to come, the brazilian government is hoping that todays massive auction of oil reserves will help revive a stalling economy. Will this soothe public unease or not . Is it the wrong strategy . We will talk to brazils Energy Finance after this. [ horn honks ] [ passenger ] airport, please. What airline . United. [ indian accent ] which airline, sir . [ passenger ] united. Whoa taxi [ british accent ] what airline, then . [ passenger ] united. All right. [ spanish ] what airline . [ passenger ] united. [ mandarin ] which airline . [ passenger ] united. [ arabic ] which airline . [ passenger ] united. [ italian ] where are we going . [ passenger ] united. [ male announcer ] more destinations than any other airline. [ thai ] which airline do you fly . [ passenger ] united. [ male announcer ] thats great, big world friendly. [ male announcer ] the parking lot helps by letting us know whos coming. The carts keep everyone on the right track. The power tools introduce themselves. All the bits and bulbs keep themselves stocked. And the doors even handle the checkout so we can work on that thing thats stuck in the thing. [ female announcer ] today, cisco is connecting the internet of everything. So everyone goes home happy. Brazilian governments today auctioning off an oil field billed as the biggest ever sold. Its the latest with the control of state reserves. Oil Companies Interested in the rights has been fairly muted because of concerns over extraction costs and the state soared by brazil. Joining us to discuss this, theyve talked about earning 400 billion over 30 years from this oil field to make brazil a lot richer, lift the country out of poverty. Has it really got that potential . It tells you about the hopes that the brazilian government has to boost the economy and government finances than it actually does about what may happen from this particular auction. I mean, no doubt were talking about a very, very large quantity of oil here. The reserve given the 8 and 12 billion barrels, thats probably around the best case scenario. The hope of the government is that it will double brazils output. But the framework for investment is not friendly. As you noted, thats reflected in what have they done wrong . The problem is the size of this is also a problem because of the cost, i guess brazil discovered these major off shore deposits. We need to make sure the state takes as big as possible a revenue take. There were laws that were applied to these deposits which means that the state oil company has to be the sole operator in a joint venture and needs to have at least 30 stake. There are other strings attached. Other fees. Its a very statist, pretty investor unfriendly disincentive to yes. Others to come and actually bid to explore . Exactly. Particularly because of the Political Risk environment. That was reflected in the fact that you havent seen be any u. S. Majors participating in this. European companies and Chinese State owned companies because of all of the controversy over the nsa allegations that the u. S. Was spying on petro and gas and the hostile manner. They were saying the u. S. Companies are deciding the Political Risk is too much. Of course more broadly the is petrobas the right company to take the lead on this . In the sense that its brazils state oil company and therefore it must. But there are concerns over the overall financial viability of the company. It normally runs at a loss. It effectively subsidizes low fuel prices in brazil and its highly indebted. Most of its debt is in dollars. There are already major problems in terms of the supply of rigs and necessary equipment, local content is particularly problematic. Petrobas is a difficult company. So the risks they havent done this the right way is what they didnt have a choice. If they were existing in a vacuum chamber they could not be exposed to the interests and you would have a little more freedom. The companies are not happy about the investment in these assets. The government is essentially pushed into a position where it takes this status approach. Also from a credibility point of view, i dont see the president rolling this back straightaway. It was just announced. There may be a lot of oil there, but the expensive oil, i guess, is difficult to get out of the ground. At the same time of course were seeing shale oil, gas depressing Energy Prices in the United States. Absolutely. That increases that. These are very deep off shore assets that increases the operating costs. Everybody who wants to invest in brazil will be looking at what happened and is monitoring the brazilian governments reaction. That reaction has typically been very hostile especially to foreign companies. There companies will be thinking, if we do anything wrong, if we have an oil spill, well be in serious trouble. Lets bring in andrew very briefly still with us as well in europe. Andrew, its interesting. Now that the u. S. Majors are going for this development in brazil, i just wonder, how are investors treating oil majors at the moment . I think you hit the nail on the head when you talked about them being depressed. You have a big divide between crude oil prices and nat gas prices. You still see that. For the big majors, the strength comes from the crude. The lower price in nat gas is depressing things. Gasoline prices have been on the decline so the refiners have been hit from that. Overall earnings season from the Big Oil Majors not particularly strong this quarter due to those factors. Okay. Fair enough. Andrew, stay there. Well come back to you. James, good to see you. Well take a short break. Still to come, from oil to food. Can mcdonalds serve up improved numbers when it reports before the u. S. Open today . Well preview the fast food giants Third Quarter earnings coming up. Before that, a reminder of how the futures are trading on wall street. This is Worldwide Exchange. Im ross westgate. The headlines from around the globe, cleaning up the mess. Jpmorgan reportedly close to a record deal to settle u. S. Mortgage related probes. The bank could still face more legal woes. Earnings season in full swing in europe as well. Philips setting the tone with a near tripling of profits. The ceo has told cnbc hes upbeat. We still, of course, have to work hard in the First Quarter but we have confidence if we stay committed to our targets. Also software sap attracting buys. They told cnbc that the impact wont last. You cant take responsibility for the currencies, and we have seen a number of effects on the u. S. , on the japanese yen, etc. , but were compensating more in our numbers. And president obamas going into damage control. Hes expected to address the tech issues plaguing the roleout of his Signature Health care program as the white house scrambles to find a fix. Announcer youre watching Worldwide Exchange bringing you Business News from around the globe. All right. Good morning to you. We had a bit of a rally on friday just about for the u. S. Stocks. Today its a muted start it looks like for the u. S. Dollar trading this week. Right now s p 500 is just about 1. 5 below fair value. The dow is some 6 points below fair value. The indication mirrors the ftse cnbc global 300. Absolutely flat. Also been a mixed session so far in europe. Despite good numbers for the s p and the ftse is up and the xetra dax and cac quarante is do down. 28 . This is what the investors have told us on cnbc. Long term, in terms of semiautomatsmall path, long paut, weve gained the instant growth by investing in small caps in japan and the far east. That might lead us to some potential opportunities if we do see slightly better data. If they can find something around the 255 mark. I think theres some question marks about the validity of the rally. That looks pretty fully priced. If we can get up to 97 1 4, that will be a level that wont be inflating. At the beginning of the year if you had said telecoms would be up 30 , the best sector in the market, then youd of thought you were mad for saying that. Because its been a big selfhelp sector, i think philips falls into that category of selfhelp. Jpmorgan may be close to clearing up one of the big legal clouds hanging over the bank. The companys woes are far from over. Kelly is with us from the states. If you get to a settlement, you would think that would be it and you can move on. That may not be the case. Why . Ross, its a giant price tag. The company hoped they would be able to move on. The tentative 13 billion deal confirmed by cnbc would settle civil mortgage cases by the Justice Department federal Housing Finance agency and the new York Attorney generals office. The deal was reportedly struck by a latenight call friday between Ceo Jamie Dimon and u. S. Attorney general eric holder and lawyers for both sides. The probes relate to the handling of mortgagebacked securities that dropped in the housing crash in 2007 and beyond. Of that 13 billion, sources say about 4 billion will go to resolving outstanding issues with the fhfa which overzs mortgage giants fannie mae and freddie mac. Another 4 billion will go to resolving issues. Jpmorgan tried to insulate itself during criminal prosecution during settlement talks including at a high profile meeting between dimon and holder last month. Sources tell cnbc the government was unwilling to provide those assurances potentially leaving the bank exposed to further criminal probes and lawsuits. Those arent off the table yet. The wall street journal is saying its a model of other probes in the run up to the financial crisis. The Justice Department wants the deal to send a message that banks cant buy their way out of a criminal case and although some of that 13 billion settlement will go to help homeowners, this will likely be the largest fine ever imposed by the Justice Department. B. P. , you may remember, was hit with a 4 billion fine last year for the gulf oil spill. Right now jpmorgan says its put a lot of that mona way in frankfurt. If you look at trading, its up by 3 4 of 1 . The Financial Times is reporting that u. S. Housing regulators are seeking more than 6 billion from bank of america. Thats for allegedly misleading fannie mae and freddie mac before the housing bust. Same thing. Countrywide financial, which b of a bought in 2008, has cost the bank already 40 billion in Legal Expenses and other charges all linked to bad subprime mortgages. Right now in trading b of a up 1 3 of 1 . Ross, theyre nearly there on a lot of this stuff but not quite out of the woods. Yeah. It is extraordinary. Huge price tag. Still not out of the woods. Jamie dimon at the back of the que. Thats right, ross. And you know its interesting because a lot of people thought throughout the entire financial crisis he was one of the more responsible custodians of some of these loans but now it turns out that because the company made some deals for companies that werent as responsible and jpmorgan did have a few bad mortgage practices, but on the whole this is really coming back to haunt them. But the numbers are so large, ross, it just seems like funny money at this point. Financial crisis related lawsuits at this point have cost the banks over 100 billion for a government thats having budget issues, you sort of wonder where some of those funds are going. Thats amazing. Yeah, all of the numbers are extraordinary. Kayla, have a great day there. Thanks so much. Talking about banks this side of the pond. Deutsch is in discussions with 50 of its workers over the manipulation of the libol rate. The paper so reporting the stock has been allowed to bring lawyers and witnesses to the meetings. Tomorrow hayes is expect expected tom hayes is expected to plead not guilty as the trial gets underway in london. The Serious Fraud office has given anonymity to the trader. He faces charges in the u. S. Into alleged rate fixing but hasnt had the opportunity to enter a plea. Now same stocks revealed a surprise in uptick in mcdonalds. Data should help the Fast Food Company avoid disappointment today when it releases Third Quarter figures before the u. S. Open. In july mcdonalds announced a change of strategy as it looked at how the margins in the u. S. And stutering sales in asia. Andrew berkley is still with us, managing director of Investment Strategy at oppenheimer. Jim, lets kick off with you first of all. What are you expecting . Im looking for earnings by 1. 51. Thats up 6 from last year, 1. 43. Looking for revenue to increase 3 . We continue to see that europe is up slightly. I think the rest of the world is still struggling. Whats the big problem for them . Performance flat at home, down in asia. Whats europe doing . I think europe has been somewhat stabilized and somewhat picked up. We think thats one of the bright spots. I think that europe is coming off a base and improving in europe. We think europe will be up Going Forward but probably 1 or 2 but the rest of the world i think u. S. Is probably up 1 . Well continue to see weakness in asia. Sales percent, 1 a long way from the 5 to 7 . Why has it gone wrong, particularly in asia . Well, i think there is some choices about what mcdonalds needs to offer. I think mcdonalds is continuing to offer its big mac except i think more people in asia prefer more localized food. So i think mcdonalds has to make a decision about a strategy. Should they continue to offer more of a global brand or more localize the food . I think theyre trying to change the strategy trying to be more localized. I i think thats one that might help. Thats a couple years in the making. Second, i think theyre having trouble predominantly in china because of one of the increase in food prices and also, you know, the supply of the fear of chicken. Andrew, bring you in. Mcdonalds stock hasnt done an awful lot in the last year or so. Is this a sector or a stock that investors will continue to avoid . We believe so. Generally the way we look at stocks specific is in terms of the trend of forward earnings and earnings revisions. Mcdonalds has certainly been a name that has been under pressure for a long period of time here. Overall group we dont particularly like either. You know, i think one of the Big Questions and what investors will be listening for is on the commodity cost side as well. Are they still seeing benefits from that or are commodity costs going to be less of a tail wind . Thats a big one moving forward. Yeah. Jim, i mean, even their competitors, even though andrew doesnt like the group. Competitors have still been doing better. Is it a point mcdonalds isnt cheap enough until we get an increase in sales . I think thats probably the catalyst im looking for. I think investors in this sector generally look at same source sales. Same source sales are flat or growing slightly. I think same source sales are the biggest driver. I think mcdonalds is simply struggling. They are trying to pull out this core of customers but meanwhile i think theyre losing more people, after fluent who prefer healthier foods to the casual the fast casual. I think mcdonalds strugless. We have a hold recommendation of mcdonalds. Jim, thank you. Capital i. Q. For now, andrew, thank you. Shares in Dutch Health Care royal philips is growing. Nearly tripling. All three business sectors saw solid growth. Head winds will affect sales growth in the coming quarters. Third quarter sale just missed forecast. The company is still committed to reaching financial targets this year. Sap sales getting a lift. The Software Giant confirming an operating profit that was largely in line with forecast. A strong euro meant sales growth slowed and its warning that Exchange Rate effects could still hit its Fourth Quarter growth to the tune of 5 . Thats the earnings. Meanwhile, has google found a friend in facebook . Well talk about that in just a few moments. Mine was earned orbiting the moon in 1971. Afghanistan in 2009. On the u. S. S. Saratoga in 1982. [ male announcer ] once its earned, usaa Auto Insurance is often handed down from generation to generation because it offers a superior level of protection and because usaas commitment to serve current and former military members and their families is without equal. Begin your legacy. Get an Auto Insurance quote. Usaa. We know what it means to serve. Stick with innovation. Stick with power. Stick with technology. Get the flexcare platinum. New from philips sonicare. Announcer youre watching Worldwide Exchange. If youve just joined us here, jpmorgan looks set to agree to a 13 billion fine with the department of justice. Solid earnings for Dutch Electronics giant philips. And the white house admits technical glitches in the rollout of the new Health Care Exchanges is unacceptable. Some other stories were looking at today as well. At t is selling the rights to around 9700 wireless towers to Crown Castle International for more than 4. 8 billion. Last month at t said it was exploring a sale of the towers. Under this deal the company will release back space of crown castle for at least ten years so it can keep its communication equipment on site and keep Offering Service without interruption. At t at 1. 6 in frank furthfurr. Dell will pay 13 cents a share. That payout will come out on the 1st. Michael dell and other partners agree to pay it after their fight with carl icahn for control of the company. Google is getting friendly with facebook. The search giants say if they buy an ad for i had double click service. Its a rare moment when facebook launched that. It didnt invite google to take part. They specialize in retargeted ads. They do that based on their browsing history elsewhere on the web. As far as facebook and google are concerned, google up 1 , facebook up 1 4. Get ready for a deluge of data this week as u. S. Investors get flooded with reports delayed by the Government Shutdown and the s p 500 are set to release earnings. Well preview the trading week ahead next. [ male announcer ] more room in economy plus. More comfort, more of what you need. Thats. Built around you friendly. Just by talking to a helmet. It grabbed the patients record before we even picked him up. It found out the doctor we needed was at st. Annes. Wiggle your toes. [ driver ] and it got his okay on treatment from miles away. It even pulled strings with the stoplights. My ambulance talks with smoke alarms and pilots and stadiums. But, of course, its a good listener too. [ female announcer ] today cisco is connecting the internet of everything. So everything works like never before. All right. Welcome back. The markets are ahead of the u. S. Open. A little bit mixed this morning. Had some Strong Revenue performances for the likes of s p and philips. Ftse is up. 1. Xetra dax down. 1. U. S. Futures not really indicating anything very much. The dow is currently seven points below fair value. We are four points below fair value. Meanwhile, president obama will speak at a white house event at around 11 30 eastern today. Hes expected to call the glitches of the new Health Care Insurance website unacceptable. The president will also outline ways consumers can still sign up for coverage whilst his team expects to fix the problems. The department of health and Human Services says theyll bring in a surge of people to work on the insurance exchanges. This is after on saturday the Obama Administration said nearly half a Million People have applied for insurance but he wouldnt say how many have actually enrolled. The republicans criticized Health Secretary kathleen sebelius. They said she should testify although theyve stopped from saying she should step down. Jack lew says the u. S. Economy has been bruised by the fiscal fight in washington. He says hes confident they will recover. Speaking on nbcs meet the press, he says its important they dont experience another round of brinkmanship. We know from the shutdown there was a loss of economic activity. I cant give you a number of what it is. I know the direction. The direction is that it took an economy that is fighting hard to get good Economic Growth going, to create jobs for the american people, and it took it in the wrong direction. And despite the uncertainty in washington, companies are upbeat. In the latest association by National Association for business economics, 70 projected gdp growth. Theyre not as optimistic about hiring. 1 4 also expected Rising Interest Rates and Higher Oil Prices to raise prices over the year. The agenda, september existing home sales are due out at 10 00 a. M. Eastern. Theyre forecast to drop 3. 3 to an annual rate of 5. 3 million. Around 1 4 of the s p 500 report earnings this week. Today well hear from mcdonalds, halliburton and h hasbro before the open. Chicago fed president Charles Evans is on squawk box for an exclusive interview. On friday he said he didnt see anything that signals the fed should taper. So how do we view the session in the week ahead. Were being joined by scott bow and Andrew Berkley still with us. A lot to get through. More data. Lots of earnings out this week. Jobs report tomorrow. How is it going to shape up for you guys . Actually, everything, the base is set here to go higher. Were looking at coming off of just almost a catastrophic time here and we got through it. Now we can focus on corporate earnings. We can focus back to the economy. Im not saying the numbers are so great, but the fact that we were able to get through this whole budget debacle and washingtons just inability to get together and create what is perceived to be a strong footing. The fact that we could get through that, i think were going higher. Earnings estimates have already been reduced pretty far, and like you said, were going to see 1 4 of the s p 500 Companies Report this week. Theres not much down side here. Theres only up side. The reason i say that, we saw the vix, the volatility index, the fear index, that topped out at around 20, 21 last week and it has been steadily, steadily decreasing. Were almost all the way down to where we hit the lows in the summer, in the low 12 handle. Were not quite there yet but were still trending down lower. I think well see a jobs number tomorrow which will pretty much tell everybody that tapering is off the table through 2013. Well see decent numbers come out of these big s p 500 companies. Now i think well be back into that slow running back up. I see another 30 to 40 points in the s p 500 before topping out. Yeah. Go along with that, andrew. To you support that general thesis . I think now that were looking at washington, the focus is back on corporate earnings. If anything what weve gone through has pushed taper back even further. We think its probably back to the end of the First Quarter at this point. The Economic Data is going to be pretty noisy. The unemployment report is tomorrow. I think what comes out of the companies is going to be important to hear in terms of what theyre seeing, especially as the quarter ends. In general i think that is picking up. Finally, scott. We saw a decline in treasury yields on friday. Theyre still below 2. 6 . What happens there . I think were going to see that pretty steady also. Were seeing the dollar index is below 80 now. The fact that tapering is off the table, it will keep the dollar weak. I think well see yields between 2. 5, 2. 7 for the near future here which may help things. You may see Mortgage Applications pick back up. You may see a spike back up in the Housing Market temporarily because we saw such a drop down when we saw rates just jump all the way up to almost 3 . Thanks for that. Scott and andrew, thank you from oppenheimer. Thats it for todays show. Im ross westgate. Thanks for watching Worldwide Exchange. Squawk box is coming up. Good morning, everybody. Squawk box. Im becky and andrew is in hong kong. Hell be joining us in the next hour. The futures have been down about 9. 5 . S p 500 down 1. 5 . In our headlines today, the good news, jpmorgan reaching a tentative 13 billion deal with the Justice Department and other government agencies. This will settle investigations into bad Mortgage Loans that the bank sold to investors before the financial crisis. Part of that came from companies that it acquired. The deal will not release the bank from criminal liability. We will have more from kate kelly in a moment. Also the fte is saying that theyre looking to fine bank of america for its role. The fha is pursuing claims on behalf of financing agencies,