Transcripts For CNBC Worldwide Exchange 20140121

On the downside, dsm, the dutch Chemicals Group misses full year targets. The ceo sounding cautious on emerging markets. Europe is more or less flat. United states has some modest growth. And emerging economy growth is slowing down somewhat. So lets be realistic. The picture even worst for alston. The power giant cut its target on weak utilities demand. Plus, the pboc dumped billions of dollars worth of cash into the Financial System bringing down money market rates and easing money market fears ahead of the Lunar New Year holiday. Announcer youre watching Worldwide Exchange, bringing you Business News from around the globe. Hello and warm welcome to the program. We kick off with the latest iea forecast with global demand. Theyve slightly raised the estimate of Global Oil Demand, unexpectedly strong u. S. Deliveries, partly offset by china and elsewhere. For 2013, as a whole, growth estimated at around 1. 2 Million Barrels a day accelerating to 1. 3 Million Barrels a day in 2014 as the economy continues to recover. Global supplies inched down month on month in december to 92. 3 Million Barrels a day. Biofuel output cutting nonopec liquid supplies. But opec crude supply did rebound slightly to 29. 842 Million Barrels a day which has reversed with four months of decline. Joining us now, neal. Good morning, ross. What do you make of that . Well, i wasnt surprised by the fact that the ia slightly upgraded their outlook in Global Oil Demand. I think the tendency in recent months with some marginally better Economic News from around the globe would be that Global Oil Demand would go up. Whats interesting and what you just said there is it isnt an upgrade for the u. S. , although modest, theres been a slow downgrade for china and one or two other developing countries. So net, the overall demand growth outlook, while its marginally better than previously thought, its still not that startling. And you used the figure 1. 2 Million Barrels a day for growth in 2014. While that is not particularly startling, particularly when set against the expectations of very large growth in oil supply. Oil surprises going to be stuck in a rut in 2014 . Well, i think in the early months of the year, i think oil prices are likely to remain much in the range that we see for most of the last year. Even the last two or three years. The u. S. Market is slightly different, of course, because its not an internationally traded market and surprise will remain specific, of course. But as 2014 progresses, the big issue that i think many of us are waiting to see how it plays out is how much of this expected wave of oil supply from countries such as the United States itself, brazil, russia, kazakhstan, canada, how many of on those countries will see the amount of oil we expect actually come to the market, over what time frame, how its phased in and, of course, the opec countries themselves pup mentioned in your introduction, they are shutting production in significant amounts in places like libya at the moment for reasons that were all too aware of. We expect more from iraq, for example, in 2014. And then theres iran which is a big potential overhang. Iran is a potential overhang, but when we look at this perhaps a biltmore slowly than some of the excitement weve had recently, i think it is very unlikely that significant volumes of the iranian oil, which is currently shut in by sanctions, will appear in the market in calendar 2014. However, well before the end of the year, there could be a deal which gives us visibility for iranian Oil Returning either at the very end of the year or in 2015 and that in turn could be enough to send prices down to a new trading range. Very briefly, how long before the u. S. Starts exporting oil . Well, it requires huge legislative changes in the United States. I would think in an election year, any change would inevitably lead to u. S. Oil prices tend to go rise to go closer to the international norms, i think thats political suicide in a Midterm Election year. Neal, good to see you, as always. Thank you for joining us from lloyds list intelligence. For more analysis on the downward trend in nymex, including whether shale is leading in the u. S. To head to an export ban, follow us on twitter or cnbc. Com. O also on todays show, will political unrest in thailand read to more unrest . Florida senator mark rubio has been speaking to on cnbc from tokyo. Find out what he thinks about americas debt woes and fellow republican Chris Christies scandal. Thats at 11 15 cet. U. S. Traders returning to the holiday weekend. Well look at the Fourth Quarter scorecard with john buffett. Hell be joining us from boston, snow permit approximating. And egyptians get the green light for military rule, but will it usher in the stability needed to curb tourism . Well have the latest. Plus, here in london, well unveil a brand new ranking as we unveil the worlds top ceo. Some surprises in there. What are the characteristics that make a top ten global ceos . Chinas interbank lending rates correcting after the central bank took more action to boost liquidity. The pboc injecting more than 42 billion into markets that followed yesterdays shortterm lending to big banks and trial lend to go smaller banks. The pbocs ability to keep a lid on credit has sparked market jitters. What has been the reaction in asia . Li sixuan joins us for the reaction in singapore. Hi, sixuan. Hi. Thank you, ross. So on the back of the pbocs cash injection, the shanghai composite rebounded from a sixmonth low, up almost 1 to stand above the key 2000 level. Industrial stuff and financials all rallied. And with gains in h shares, which are Hong Kong Listed china companies, the hang seng index in hong kong gained about 0. 5 today. In japan, the nikkei 225 ended by about 11 is at the dollar regained lost ground against the yen. South koreas kospi ended higher by 0. 5 . Miners took a beating in australia, but gains in banking stocks helped send the asx 200 higher by 0. 7 . As for individual work, we talked about the cash injection. Lets take a look at chinese lenders. They trade modestly higher in the mainland, but clocked in stronger gains on the hong kong bores. So the big lenders, ccb, icbc, bank of china and abc all gained over 2 today. In japan, marine transports outperformed on a nomura upgrade and the stock gained 278 today. But on the other hand, a a was among the biggest losers today. The firm apologized to customers about its recent tv ad that was accused of being racist of stereotyping foreigners and the Stock Plunged 276 . Thats your recap of asian markets. Ross. Thank you, sixuan. The ftse 100 was just up 7 points this morning, but is fairly flat again. Do you Ha Deutsche Bank was down yesterday, the cac 40 up 0. 16 . And were 0. 5 higher for the ftse mib. French power and transport Engineering Firm alstom has lowered its annual profit target. Its blaming a slowdown in orders for oil and gas by power plants. Bouygues down 5 . This is that main shareholder. Unilever, nice move, up 4 . They came out ahead of the Third Quarter saying they were being hurt by emerging markets. Today, better than expected full year results, net profits jump to go 2. 6 billion euros on the back of an 8 growth in sales from emerging markets. I spoke to paul, the ceo, a little earlier. He told me he was pleased with the figures, but is still worried about those numbers from developed markets like the u. S. It is obviously a very positive thinking population. So as soon as there is some positive news and the thing goes into overdrive, the reality is that real incomes have not really moved in the u. S. Since 1996. The growth that is there is only to the benefit of a small part of the poll lagz. We, as an organization, obviously indicator to the broader population that hasnt seen any progress. Dsm is down 8. 6 today despite ongoing currency head whippeds. But speaking exclusively to cnbc, the ceo says the company is going to try to work to offset major currency effects. I have no crystal ball, but i assure you for 2014 at this moment the Currency Exchange rate we have today, weve had as our normal growth of our businesses. We will try to offset that Currency Exchange rate affect. Europe is more or less flat. United states has some modest growth and the growth in emerging economies is slowing down somewhat. Lets be realistic. The economic environment around us is still challenging. As far as currency markets are concerned, euro dollar, 1. 3538. Away from that 1. 29 lev39 level is a sixyear high. Dollar yen, 104. 66. Aussie dollar, 0. 8784 and sterling just above 1. 64. On the bond markets, treasuries are back up and running today. The yield on the tenyear, 2. 85 . Gilt yields just below that, 2. 84 and tenyear bunds, 1. 75 . Irelands fiveyear borrowing costs down to their lowest ever level after moodys upgraded the countrys Credit Rating to investment grade. Yields on fiveyear irish bonds currently 1. 63 and that is lower than fiveyear gilt yields of 1. 72 as well as fiveyear treasury yields, as well. Joining us is ashley shire, ahead of global credit good to see you. Thanks for having me. What do you make of that, those irish yields . What an amazing recovery, right . But i think its really a statement around the recovery that we are seeing post the crisis. Europe is without question seeing stabilization. It is recovering from the financial crisis. And theres a lot of opportunity in that for investors. Yeah. Its a convergence trade. How much more convergence can we get with the economies doing Different Things . Part of the on question youre asking there is how do investors monetize this . How do they benefit from the fact that these spreads are depressing post the crisis. Last year, high yield was the way to play it. You saw over 10 return. More than that if youre in one of our funds. I was a little worried about high yields right now. We have a number of guests who have come on saying high yield is a buzz looking for a windshield. Is it . So i think theres a lot of tund in specific parts of high yield. And, you know, i think the place to look is really the Banking System in europe where youre starting to see recovery. Youre starting to see banks delever and critically raise capital. From an equity side, banks have been the place to be. If you believed in the recovery or you believed there was going to be no breakup, right, thats been the ultimate risk. Why is now the debt the place to be for banks . So european banks need to raise something on the order of 200 billion euro with the bank capital in the form of capital securities, which are fixed income securities, over the course of the next five years. That means that these securities are going to have to come cheap, right . Youre talking 6 to 8 yields on most of these securities and that represents real opportunity for investors. Any institutions in particular . You know, i would stick from different banks are in different phases of where they need to go. The swiss bank has done quite a lot. Clearly, Deutsche Bank needs to do more. I think you want to stick with the banks that are going through the process, but have done enough where they can focus on raising Equity Capital or trimming back compensation in order to build the capital that they need on their balance sheets. Thats an opportunity in high yield. You also say japan is the biggest swing factor for u. S. Assets. Just explain that. I would have thought the u. S. Economy is the biggest swing factor. Sure. So we all know that japan is very focused on reigniting their economy and getting to spof inflation. The past years efforts are starting to pay some fruit. Going forward, investors in japan who have historically invested, 50 of their money is sitting in the bank earning zeros. Theyre not going to be happy when their money goes from zero percent to plus two. Is it going to go to that, plus two . Its certainly gone to plus one and their state objective is to hit plus two. Lets say theyre successful. Youre not going to want to have your money sitting in the bank if youre a japanese investor. Your going to want to look for return. Will be in the nondenominated fixed assets. I think theyre going the buy u. S. Assets. In fact, the Japanese Companies themselves are starting to buy u. S. Assets. Yeah. Sprint, you had beams being bought this past week. It will be more expensive if the yen keeps weakening, though. Buy while its still cheap. Good to see you. Thanks for joining us. Thank you very much. Jpmorgan has reportedly dropped work on another chinese ipo amid practices in the country. They were hoping to go ahead with a 1 billion offering this year. Jpmorg jpmorgans exit was prompted by its concerns about the choice of wei. Wei worked from jpmorgan from joorn 2012 until last awl august and now works ford u. P. S. Jp morgan chase, pretty flat. Farm goers reportedly banned staffers from their own money. The Financial Times suggests that wells code of ethics says employees shouldnt invest in privately held businesses which compete with the bank which could cause a conflict of interest. Well take a short break. Still to come, off the back of an earnings beat, well bring you my fist interview with unilever ceo paul tollman. Unilever has rrtd better than expected results. I caught up with paul polman and the ceo of unilever. He told me he was pretty pleased. There are headwinds on the currency webs but the underlying sales growth is up 4. 3 , which is very competitive for us. We also have another year of profitable growth, core operating margin up 40 basis points, so that is four years now of top and bottom line growth, profitable, consistent and competitive. These have been achieved despite the slowdown in emerging markets. Emerging markets used to go at the composite of 6 to 7 . Its now more 5 to 6 . We have to deal with that. You saw china again this morning in the papers probably going more towards 7 growth rate. Admittedly on a larger base, but that is what it is. We have seen b a significant slowdown for growth in major markets like understand meesh ya, south africa, brazil where we have strong currencies. You talk about currency depreciation. Does that have a direct impact on consumer demand . Over time, it might. What happens with a lot of these countries when you see a 20 to 30 devaluation, you obviously import inflation. That will have a dampening effect on markets over time. You deal with that by not fully pricing for that inflation and thats why you see a still healthy growth rate. Our emerging markets have been growing at nearly 8 again and this is now for the fifth year in a row that we significantly outgrow these emerging markets. That just doesnt happen by itself. Its a lot of hard work from a lot of people. And we will continue to do that. In your report, you also talk about this ongoing volatility in this external environment. Explain exactly what that looks like and how you manage it. Well, ive often called it the xlix and ambiguous. Never have you seen so many changes. The world has become a very interdependent technology, the financial world, and its a very difficult world. You see it on the geopolitical front. Never have you seen so many issues emerging or popping up in different parts of the world, people speaking up and causing uncertainties. Stock markets moving up and down, currency markets we just talk moving up and down. Its a very volatile environment to do business in. Paul polman talking to me. Well take a closer look at those results with max king in around ten minutes or so. Other earnings out today, alstom has lowered its annual profit target blaming a slowdown in orders in thermal power. I dont like it when we get bad news in paris. Stephane has more. Its a pretty big share back, stephane, 11 1 . Absolutely. As of this morning, they shared a warning. Around 7 for the physical year, down 2 from last year. For the next year, alstom is targeting lower margins. Thats for the next two to three years to come. It explains its facing weaker demand and believes it will remain so in the shortterm. Its order intake declined by sorry, grew 11 in the Third Quarter, but its only due to the transport division. Its still down 12 on the first nine months of the year. Also this morning this is drawing my attention. This morning, they posted very negative results for the Third Quarter of its fiscal year. Thats because of china. And the company to promote in china is having a negative impact on the sale of Premium Products and thats the case for the cognac made by the company. The cognac reported a the 2 decline in the Third Quarter. Its not speccing any recovery in china in the shortterm, not even for the crucial period of the new year. As a result, the company confirmed its guidance for significant double digit decline in full year operating profits. The Market Reaction was very negative at the start of trading. Its improving slightly now. All right, stephane, thank you. Sap Software Giant said its going to delay reaching its investment goal because of china. What are the investments theyre making . Well, theyre investing in the Cloud Business saying that is what no, not investors, but customers want because more and more customers would like to have used the software of sap and, therefore, they need more cloud storage. So that is what they are doing and that is costing a lot of money and that is why they are pushing gold to reach a 35 profit margin operating profit margin, i should say, to 2017 is. What is new also is they are setting a new Revenue Target for 2017, up 2. 53 billion euros coming from the Cloud Business. That is a Huge Development if the Cloud Business isnt doing that well because currently they are only having a revenue of something between 700 and 800 million euro. So you see the potential is huge. There are other market xhem taters who are saying that the Cloud Service forever the whole industry could have a revenue potential of 130 billion. So you see thats the future for sap. And as the time elapses, actually, the losses get more and now the shares are down by 0. 6 . Ross, back to you. Something will turn around. Still to come, at the turn of the year, our next guest told cnbc earnings would be the big story of 2014. His companys report, whats happening with his predictions . Well see new a few moments. Stacys mom has got it goin on stacys mom has got it goin on stacys mom has got it goin on [ male announcer ] the beautifully practical and practically beautiful cadillac srx. Lease this 2014 cadillac srx for around 319 a month with premium Care Maintenance included. Emerging markets used to grow at the composite of 6 207 . Its now more 5 to 6 . We have to deal with that. We have seen a significant slowdown for growth in major markets, like brazil. Dsm shares to the down side after missing full year targets. The ceo is sounding cautious on emerging markets. Europe is more or less flat. United states has some modest growth and the growth in ee emerging economy is slowing down somewhat. Alstom, cut targets on weak utilities demand. And the pboc dumped billions of dollars of worth into cash into Financial Systems bringing down market rates ahead of the Lunar New Year holiday. European equities slightly higher. The ftse 100 is fairly flat, xetra dax up 0. 3 . Cac 40 up 0. 2 and 0. 5 up on the ftse mib. Tenyear bund yields, 1. 76 . Irish fiveyear debt is now yielding less than that of the fiveyear gilt and treasuries, which is something. They have been awfully busy back up to investment grade. On the currency trade, euro dollar, currently at 11. 3540. It has been down to around 11. 3508. Dollar yen, firmer between its range of 104 and 105. Consumer goods making unilever reporting a 3 decline in its full year turnover. The group hit by a slowdown in emerging markets. Underlying sales were up 4. 3 for the year. Earlier, i spoke to the ceo and he told me he was fairly pleased with figures. Obviously, head whippeds on the currencies that youve seen in many parts of the world. But the underlying sales growth is up 4. 3 , which is very competitive for us. We also have another year of profitable growth, core operateding margin, up 40 basis points. So that is four years now of top and bottom line growth. Max king is a port foal your manager and joins us now. They have a profit warning in the First Quarter. Things have beaten a bit this morning. But he still talked about emerging markets being difficult, the sales growth there now less than they used to have. Interesting even in the u. S. , where he said its a positive economy, real economics havent grown for a while. How tough is it for companies . They had a good run for a while. Consumer staples got far too optimistic. They put through a tolerant 18 months. Were now starting to see signs of some of the companies turning around. Unilever, for example. Diaggio is one weve been looking at. There is value in the sector. Giving emerging market headwinds, were looking for easier rates. That is what got everybody excited, wasnt it . They said look, these companies, you mentioned two of them, theyre Stable Companies and they, because of emerging markets, theyve added a growth element to them when wasnt quite what we thought it whatting go to be. People thought they were for a bit, didnt they . Exactly. Thats why we got cautious about 18 months ago. Now, i think the value has returned and there are some good quality stocks out there. Theres still down sides in areas. Still pretty nervous about tobacco. What are you looking for at the moment in terms of are you looking for steady earnings, cash flows . What should we be looking for . T what you really want is steady Earnings Growth, not just for this year, but over the next three years. We can see Earnings Growth over the next three years, we may not make money on a particular share, but we can be pretty confident on the threeyear view. Where do you see that . Where do you see those opportunities for steady Earnings Growth . Consumer staple hes is one youre looking at. We would be looking in the resources area. Everyone got bloomy. A pretty awful year in 2013. Which is why everyone doesnt like them. The values are cheap, the companies are basically running their businesses for cash, trying to cut costs. Price rs are pretty favorable. The swing on that is chinese growth. There are plenty that think well see chinese growth slip below 7 . Of course it is. Chinese growth is accelerating and will probably go further than people realize. Wont that have an address impact on the Metals Prices . It will be a headwind, but there will be a tailwind for the markets in the u. S. Picking up. And we can be hopeful that well start to see some pick up in other emerging markets to compensate. The chinese share of metals around the world is going to fall for the next several years. We have a number of earnings out in the u. S. , as well, this week. Everyone is talking about we need major earnings to justify the performance we had in 2013. Do you think were going to get it . Just as everyone is saying it doesnt make it wrong automatically. Its not so much Earnings Growth justify the form of last year. Its Earnings Growth to justify so we need to see further Earnings Growth. Theres no doubt about that. Were all looking at the numbers quite nervously because if the number disappoints, people start bringing down forecasts and that will mean that youre going to be a dull market for quite some time. Especially when the earnings number come through and people fell off their forecast, then you can look forward to a reasonable year. What is your instinct tell you . I think, actually are you experienced in your analyt analytics . I rely on i think europe is probably going to disappoint. I think people are too optimistic will europe. I think the u. S. Will come through okay. So i think the markets probably arent going to do very much in the first half of this year. Then there will probably be some events i think the europeans will be forced into taking action. I think we may well see quantitative easing in europe. Thats where we will lower the euro and probably get a are you excited about European Assets . I think actually just be patient. Be prepared to be patient for the first half. I think you should see a bit second half. Stock pickers. Stock picking will continue to be the way to make money in the markets. Max, always good to see you. Thanks for that. Max king joining us from investec market. Earnings are in focus stateside as investors return following the Martin Luther king holiday. Johnson johnsons report before the bell, ibm reports its numbers after the close. Also out this week, united technologies, mcdone adds, microsoft and procter gamble. Well be discussing those earnings at 11 30 cet with john buffett. And when it comes to driving earning hes growth and creating share value, which businesses are best . We want to hear from you. Who do you think is the best ceo in the world . If you want to join the conversation here, please, get in touch with us. Email us, worldwide cnbc. Com, tweet cnbcwex or direct to me rosswestgate. Dont miss out on that. Who is the best ceo in the world . We will reveal all as revealed a little later. Meanwhile, lenovo is reporting its in talks to buy low end server unit x86. The chinese Hardware Company is only confirming that its in talks with a third party. Rumors of an agreement first surfaced yesterday with the wall street journal the object of lep novos affections is actually dell. Lenovo shares dropped 3 higher. Dropbox has reportedly secured 3 million after the firm has been valued at 10 billion. Dropbox was last valued at 4 billion following a previous round of funding in 2011 1. Many expect the companies to go public sometime this year. And in japan, spains energy giant septer and have agreed to reach an alliance. Cosmo struggled with its domestic business in hopes of teaming up with the spanish firm. It ames to curb the growing influence western oil measure by investing in Oil Companies in asia. To begin, the two forms plan to confirm additional weight to confirm crude. Cosmos output is 20 Million Barrels a day in the middle east. Cepsa plans to help the Japanese Firm with development as cosmo looks to exporting lng in the future. The nikkei is reporting Japanese Energy company jx holdings Petroleum Products segment is expected to post a pretax loss of on 380 million for this fiscal year and in march. The firm was expecting a 181 million profit for the segment. But failed to meet the projection with the growth risk growing pressure to keep gasoline prices low despite the high year coast of importing oil. Ross, back to you. Thanks for that. Reminder of whats on the agenda in asia tomorrow, Central Banks will consider possible easing. Australia reports Fourth Quarter inflation. India leads the corporate earnings parade with Mahindra Mahindra and larson. In singapore, the sgx and keppel land both come out with results. Indonesias Foreign Investment is expected to hit record levels in 2014. Well cross to singapore for a health check and what to expect from the bank of irelands rate decision. I need proof of insurance. Thats my geico Digital Insurance id card gots all my pertinents on it and such. Works for me. Turn to the camera. Ah, actually i think my eyes might ha. Next Digital Insurance id cards. Just a tap away on the geico app. Could save you fifteen percent or more on car insurance. Everybody knows that. Well, did you know that when a tree falls in the forest and no ones around, it does make a sound . Ohhh. Ugh. Geico. Little help here. Thai authorities are determining whether toe declare a state of emergency after protests over the weekend. Thailands prime ministers have called for a february 2nd election to diffuse elections, but some are boycott it. The countrys central bank is likely to cut Interest Rates tomorrow as the unrest dents the economic outlook. Understand neesh whys Foreign Direct Investment unexpectedly jumped in the Fourth Quarter. Sdi rose more than 20 in the Fourth Quarter to 5. 8 billion. Officials say it could have a record 33 billion next year as investors continue to tap into indonesias resources in writing that will calm the data. The data may help calm outflow fears. Joining us for more on both stories, the economist at hsbc in singapore. Hi. Nice to see you. Lets kick off with Ireland First of all. Is there any doubt that theyre going to cut tomorrow because of the impact the process is having on the economy . Look, i mean, i think youre looking at a very protracted nature of the political crisis now. I think the downside, macroeconomic risks are clearly starting to build up. I think there is a Minority Group of economists probably not looking for the boc to move tomorrow. Some people are arguing that its perhaps too soon given that they delivered a surprise cut in november. But, you know, look, in your opinion, tomorrow will be a day as good as any. If the Central Banks view is that it needs to act preemptively to the economic drag that is going on come from this political ip stability, then i think a 25 basis point cut tomorrow should be in the bag. And you think more to come, potentially . Not that much more to come. I mean, if we look back at what the bot has done so far, i mean, in fact, quite stealthily, i might actually, since the tail end of 20111 its eased Interest Rates, very, very gradually, but that easing cycle has taken us past 1 00 basis pointses. And in that period of time, whats happened is that Household Debt in thailand has actually built up to rather unsustainable levels. So in terms of the number of bullets that the bot has to play around with, you know, i think that arsenal is somewhat limited. So i think, you know, they might deliver a cut tomorrow and then follow that up with another one at some point in the very near term. What impact is this unrest is likely to continue for some time. What is the impact going to be, not only in growth and inflation this year, but next year, as well . How much have you changed your forecast . We have taken our numbers down. This year, were now looking at growth of 3. 5 . Next year, i think 4. 5 probably sounds about right. And that is down from an initial estimate of 4. 4 this year. And a base case of 5. 2 next year. So, you know, i think the headwinds will come domestically. As things were, even throughout the crisis, both a state of investment as well as private Consumer Spending had been extremely weak in thailand. So i think this crisis will exacerbate that. And then on the external side, i think where we start to see some headwinds already forming will be through the tourism channel with i think quite a number of airlines now having reduced and more flights that theyre providing to bangkok. Talk about indonesia. We said earlier, up more than 25 . They now have this mining law thats just been introduced, which basically means a ban on the processing of raw minerals. Longterm, is it the right thing to do or not . I think so. I mean, look, you know, Everybody Knows about the current account deficit pressures in indonesia. My view is that the worst is now over. We are in for a very gradual nair rowing on the current account deficit. The export ban in the near term doesnt help, for sure, but i think as a lot of these miners come in and smelt building and so on and so forth, its quite likely in the next one or two years, we will see record high fdi numbers. Thanks so much for joining us. The World Economic forum is kicking off in davos. Leaders are expected to debate policy risks. Hadley gamble sat down with the founder and chairman about his thoughts on facing the global recovery. Its very clear that we have a kind of return of optimism. Just look at the stock exchanges and so on. We see a new degree of entrepreneurialism, particularly in the United States. But i would end with other worlds on cautious optimism. I would say we are in a period of expectations. The economy will not any more grow as fast as it did before the crisis. And such has enormous consequences, for example, for social inclusion, shop creation. Finally, we have so many on knowns and unknowns. We dont know yet what the situation will be in europe with the banking stress bank stress tests. The u. S. , we see tapering. And i could go on and on. And live coverage from the World Economic forum begins later today on closing bet bell at 1700 cet. And tomorrow, julia will joining us on the ground with interviews with ceos and policymakers throughout the day on Worldwide Exchange. This time tomorrow, you will be much more with julia than me. You can head online to see what you can expect from this years meeting, stay in touch with today anticipates event following our twitter account. Also online, a special report on what the experts in davos think could be the worlds biggest risks. Join us on twitter using bigge biggestrisk. Who are the worlds top ceos . We want to hear from you. What do you think . Let us know, join the conversation. Worldwide cnbc. Com or tweet cnbcwex or direct to me rosswestgate. Violence has impacted egypts booming tourism industry. Renewing hopes the country may be on the road to a political transition. But will it be enough to coax tourists back into the country . Yusef is in cairo. There are those who would say if you want down to sharp and that region, theres still people coming and having a nice time. Absolutely, ross. Let me get you up to speed, though. In the last 30 minutes, state state media has reported that Police Officers have diffused a bomb under a car across the river behind me here in the central part of cairo. And that underscores something that the middle east economics pointed to in a note late yesterday, as well, that there is this jurntd current, these tensions with the Muslim Brotherhood continue. Those risks being flared up later on as we get closer to parliamentary and president ial elections. Tourism in all of this is trying to find a way through. Tourism in egypt account for 1 in 8 jobs. After the ousting of Mohammed Morsi last year, many visitors went elsewhere. 2013 was a very bad year for us. According to egypts official statistics agency, tourist arrivals in 2013 fell almost 39 year on year. This place used to be packed with fourteen tourists. Instead, in the two hours weve been here weve hardly seen any. Even these cats have found a new home in an unsold box of suits. I love my business. I love my business. I would not close all my shop. At the Egyptian Museum in cai cairos infamiliar yuls nay rowby square, no need to wait for long lines. Very secure. There are signs of a recovery, with the rivals increasing again prime ministerially in the red sea area. Were witnessing a agreement improvement for the last quarter of 20134. This is part of the changes were seeing as part of the road maam implementation. Now that many countries have eased travel restrictions, officials are confident they will be able to attract some 13. 5 million visitors this year. The whole point that elections will bring about a swift return to stability and that there could confirm the use of these issues. The next major event is the anniversary of the revolution here in egypt from 2011. That will be on the 25th of january. The government is stepping up its security. On the other hand, still no news on who is going to run for on president. Ross. You said thanks for that, yusef. Still to come on the show, european equities taking a breather from earnings and looking at the real economy. The zew survey is coming out in just a few moments. As we do that, well leave you with a few waiting for the upside of vapsers to decline. The second hour of Worldwide Exchange coming right up. Youre watching Worldwide Exchange. Im ross westgate. Unilever beats forecasts. Emerging markets used to grow at a composite of 6 to. 7 . Its now more 5 to 6 . We have to deal with that. We have to deal with significant slowdown in growth from major markets. Brazil. And u. S. Traders return from the Martin Luther king holiday with about a quarter of s p 500 firms reporting this week. Johnson johnson and verizon get the ball rolling today. Two people are arrested from mexico they say may be died to the massive data breach of target. But one u. S. Authority says the two arent connected. And the pboc dumped billions of dollars worth of cash into Financial Systems bringing down money market rates and easing cash credit fears ahead of the Lunar New Year holiday. Announcer youre watching Worldwide Exchange, bringing you Business News from around the globe. Warm welcome to the program. The zew survey out of germany, january Economic Sentiment index, 61. 7. It was 62 in december. We thought it would tick up to 64. Its actually just declined slightly. The january current german conditions index, 41. 2. The poll was for that to be 34. 41. So its a little stronger. So Current Conditions a little better. This months survey improved conditions confirms expectations of the economic upswing. Euro dollar, they looked at that Economic Sentiment as part of it and dipping on the back of that. Not swayed by the Current Conditions, its at 1. 3530. The twomonth low we hit yesterday, 1. 3508. Mark oswald is with us, strategist. Happy new year to you. Happy new year. I think i can still say there. What kind of growth are we going to get out of germany this year . How is it going to help out the rest of the eurozone if at all . I think out of germany, we can expect an acceleration relative to last year. We may get just sort of 2 look to be reasonable. For the rest of the eurozone, i think there are more encouraging signs coming out of italy. However, the big buzz word there means france. It will take some time for these latest reforms to get some traction. You really wont see any benefit until they hold for the year. With those new forms come with new strikes, as well. Indeed. As we know, frances inherent resistance to change is well documented. But the fact of the matter remains that there needs to be a lot of incentives put out there to businesses to start employing more people, whether these measures will work remains open. Is the growth were going to get enough to keep or is inflation going to keep falling . Were currently at what, 7 on the core . Yep. Which is at a record low of 2 . I think the inflation data itself wont be a big trigger unless the ecb revises its forecast. And at the moment, it clearly is not willing to revise its forecast. The likelihood that inflation will stay slow, around 1 , maybe just above by middle, end of the year, seems likely really depends to some extent on what happens with energy prices. Inflation generally is going to stay low around the world, but i would have to add that people talking about inflation are barking up the wrong tree because some of it is actually in europe. Not only in europe, but also in the u. S. , in canada, theyre talking about deflation worries. Its barking up the wrong tree. A lot of it has to do with the impact of the internet and the collaborative economy, which is definitely bearing down on prices. This is for the next stage of in supper, isnt it also that the banks are terribly constrained . Its all going to be raising capital. Banks and companies. And companies. Not huge money in the system, is there . There isnt. Part of it is actually the drag down on inflation is coming from wages by the fact of the matter that theyre not increasing or in some countries falling quite sharply. That acts as a major drag. So were not going to see a major pick up. I think for the ecb, the this is the point. You think we will see qe later this year. How would you rate the chances of that . I still think its a very, very unlikely prospect. 5 . 11 , actually. Simply for the reason that there are so many legal hurdles to it. Right. You see, did they say there are no legal hurdles to it . You buy bonds evenly and it would be justified on the inflation forecast and well, actually, actually, mr. Draghi was being very, very careful at the last press conference not to say anything which might irritate the germtan Constitutional Court which may yet throw omt court out to the court of justice. The omt has been fantastically effective without having to do anything the. Absolutely. Dont go anywhere near it, just stop. I think the biggest danger at the moment in terms of the ecb is mr. Draghi has a way with a lot of jaw boning of markets. The rise that weve seen until the overnight, even if term rates have stayed very, very low could be if we dont see a fall after this, assign of the markets are getting tired of this all talk no action and are start to go call mr. Draghis bluff. If youre worried about the downsides of the economy, why arent you doing anything . Well find out. Chinas Inter Bank Lending rates are correcting. They injected more than 42 billion into money markets in a highly telegraph move. I follows yesterdays shortterm lenders to big banks. Ahead of the Lunar New Year holiday and the pbocs bid to keep a lid on credit has sparked market jitters. So what has happened with investors in asia, sixuan has more for us out of sing pop. Thanks, ross. On the back of the pbocs 42 billion cash injection, it ended back up the key 2000 level. The hang seng endecks and the nikkei ended higher. Elsewhere, better risk sentiment left its south korea kospi to a threeweek high, higher by 0. with shipmakers and automakers outperforms. Down under, banking stocks helped send the asx 200 to a twoweek high. Miners took a beating in australia. Fortescue metals ended lower today. Ccicbc, abc and bank of china all jumped over 2 today. Thats your recap of asian markets. Thanks indeed for that, sixuan. Lets take a shot at where we stand. Ratio around about six to three at the moment. Slim gains yesterday for the ftse. It was just up some 7 points and this morning, its up around 5 points. The cac 40 is up 0. 3 . The ftse mib is up 0. 5 . Take a look at where we stand as far as the bond markets are concerned. Euro dollar, 1. 3533. Dollar yen, firmer but still very much in its range between 10 on 4 and 105. Remember, that fiveyear low for the yen, 105. 41. The aussie dollar is just off its 3 1 2 lows. Helped by the gdp coming in yesterday stronger than we might have expected. Sterling is stelly just below 1. 65. Tenyear treasury yields, 2. 85 . Gilt a little below that, tenyear bund yields, 1. 75 . As far as the agenda is in the United States today, lets remind you of whats on there. Its a pretty quiet day in terms of economic data. No major reports until thursday. Earnings season rolls on with about a quarter of the s p 500 reporting this week. Were going to hear today from johnson johnson. Travelers, veer rison, Delta Air Lines before the open. Ibm, Texas Instruments all report after the close. Some of the other stories were looking at today, police in south texas have arrested a mexican couple at the u. S. Border who were allegedly caught with credit cards claimed with information from last months issue in target. They started working with the secret service after a number of retailers were hit with purchases last week. And the new Jersey Governor Chris Christie says hes now readier to be president of the United States. But is his run over before it even begins . Final out what central rival marco rubio has told cnbc after that. I need proof of insurance. Thats my geico Digital Insurance id card gots all my pertinents on it and such. Works for me. Turn to the camera. Ah, actually i think my eyes might ha. Next Digital Insurance id cards. Just a tap away on the geico app. Could save you fifteen percent or more on car insurance. Everybody knows that. Well, did you know that when a tree falls in the forest and no ones around, it does make a sound . Ohhh. Ugh. Geico. Little help here. Of the dusty basement at 1406 35th street the old dining table at 25th and hoffman. And the little room above the strip mall off roble avenue. This magic moment it is the story of where every great idea begins. And of those who believed they had the power to do more. Dell is honored to be part of some of the worlds great stories. That began much the same way ours did. In a little dorm room 2713. This magic moment recap of the headlines, unilever beats earnings expectations, but warnings of emerging market headwinds still. A possible breach in the target data breach as police make an arrest on the u. S. Mexico border. The new Jersey Governor Chris Christie is being sworn in today for his second term as alleges over political intimidation by his administration continue to swirl. A democrat reportedly met with federal investigators for several hours on sawn. Hoboken asking for 1 million in relief but received 346,000. On monday, the claims were strongly denied. Mayor zimmer has our conversation in may of 2013 is not only false, but is ill logical and does not with stand scrutiny when all of the facts are examined. Amid speculation the governor christies scandal could damage his president ial bid in 2016, cnbc asked another republican candidate to weigh in during an exclusive interview. Governor christies interview put out a forceful denial. I think all of us should research judgment. Rubio, also voiced concerns over economics ongoing fiscal wo woes. And the kind of investment we need to create the sort of growth that the United States desperately needs for our economy to create more jobs and opportunity. So weve got some structural changes in our economy that are ongoing. Would it inhibit investment in the United States . I dont see that happening, do you . Not nearly to the same extent as last year. I think everyone realizes or that capitol hill is not going to have the sort of scraps that it had over the last couple of years this year ahead of Midterm Elections. The American Public seems to be much less in the mood for people who stand by their principals and much more in favor of people who do things. Therefore, i think the threat of gridlock on capitol hill is not what it was. Nevertheless, toous has a lot of fiscal woes. As the economy is growing been its coming in fairly strongly and having a transformtory affect. The profile looks better, doesnt it . I think the underlying profile of the nonfinancial economy is much, much xwrochimp. That is probably the most seismic change along with the overall benefits from technology. It would still help the u. S. If capitol hill could get spending measures and spending orders in place. But if it did, then the concern, i suppose, for the equity and bond markets would be that the fed would actually have to act rather quicker than its currentcurrent ly estimated. Where do you see yields rising inspect. In terms of the tenyear, i think we start shifting up the range. In the shortterm, were going to have a lot of distorted data. So im not sure were going to have a range break of that 2 1 2 or 3 on tenyear or 3. 5 , 4 in the near term. However, once we move forward, id expect the yield to march towards 3. 5 . The stronger the data comes in and the greater the pressure on the fed, particularly if we see the Unemployment Rate falling to that 2. 5 threshold to go earlier than currently estimated, its going to rise and the quicker that happens, the more yields are going to rise. If we continue to pace in the last two months and next month, well be there, wont we . Nevertheless, i would add still in inflation adjusted terms, actually real yields in the flus look v ae trooktive. Still to come, as the worlds biggest executives land in davos, find out which ceo is better. Well find out. Before we unveil p more to come in just a moment. According to a new index, andersons jeff bezos is the most effective ceo. Others breaking the list including larry paige. Steve. Thank you so much indeed. Its an interesting list, jeff bezos, robin lee, theyre five of the top six. Not the usual names you would expect on there. How have you ranked this . What led you to these results . Good question. The main rankings has been based on the on a shareholder shawl. What we did is we looked at their hard data to a ceo Revenue Growth, profit growth, and then the softside. So the reader was the right values, are they building a culture that will sustain and are these building on a company that will sustained and innovate beyond themselves. Do you get some ceo result . Some fortune and chairman cl eos. These guys, what are the notable differences . If you notice, they arent traditional corporates. I think the three factors, the first one is they think very much longterm. Those ceos are focused on not just next year, but decades ahead. The second piece is that they are commercially aggressive in what they do. Amazon goes its own path. So does google. They have strong cultures in those businesses. They arent perfect, but theyre very strong companies. If you talk about the longterm, the average tenyear is much longer than the average ceo life is what, five years roughly . Yes. The tenyear, the top ten 1 is 12. 5 years. These ceos, one they get through their seven or eightyear gap, they create more value. Weve got a lot of Technology Ceos in here. Is that because they create the most value for the business that theyre in . Its hard to create value if youre in an old on style factory. Yes. You have to outperform your industry. But some of the Technology Groups have made huge value. North america ranks nearly had a the ceos. Brink was what. I think tlal gom up again next ye year. They arent the recognized names, either. And there are still 19 of them. Fascinating. The u. S. Northeast is bracing itself for another blizzard with warrant storm warning in effect for new york city and western long island. Weather channels Reynolds Wolf joins us now. When is this blowing in . Well, were going to see the beginning of it today. There are many features coming together to give us this. It begins with the jet stream. Its going to move farther to the south, the great lakes, the midwest, the ohio valley and into the eastern seaboard. Some upper level energy will join the fray. Thats going to do a couple of things. One, thats going to bring in much colder air from the north. At the same time, its going to bre overriding customer. When that mur begins to fall through the lower levels of the at mots fear, boom, youve got snow. Washington, d. C. Could see 8 to 12 inches of snowfall. With the heavy snow we anticipate we could have major delays in washington, d. C. , new york, obviously. Boston for today, moderate delays. With heavy snowfall, youll see more delays and it wont just be in the air, but also on many of the roadways. For the nations capital, were in the United States, were looking at about 34 degrees at least for today and then the heavy snow, limited visibility, tough times for millions of americans. Thanks whats coming. We we do so would be there wg, currently implied bier by 6 on the s p 500. This is Worldwide Exchange. Im ross westgate. The headlines from around the globe, unilever shares up near the top of the stoxx 600 after betterthanexpected earnings despite the slowdown. The ceo told me on a first on cnbc interview the company is still facing a emerging market headwinds. Emerging markets used to grow at 6 to 7 . Its now more 5 to 6 . We have to deal with that. We have seen a significant slowdown for growth in major markets. U. S. Traders return from the Martin Luther king holiday with about a rlt kwaer of the firms reporting this week. Johnson johnson is and verizon get the ball rolling today. Police in texas have arrested two people from mexico they say may be tied to the massive data breach at target. Although one u. S. Authority says the two arent connected. And the peoples bank of china poured billions into the km as many bringing down money market rates and easing restrictions ahead of the countrys knew year holiday. And if youve just joined us in north america, welcome back. I hope you have a good day off yesterday. This is where we stabbed for the futures. We are indicated higher. The s p currently trading some 4 1 2 point above fair value. The nasdaq nearly 17 points above fair value and the s p 500 is some 59 points above fair value. European equities didnt do an awful lot. The ff 100 was up around 9 points at the moment. The xetra dag was drawing lower and were rather disappointing. The cac 40 is up 0. 3 . The ftse mib is up 0. 6 . Thats where we stand in europe. Lets remind you about what some of our guests have had to do for investors on cnbc. Its very dovish. Ecb can be dovish. They cut rates in december. Yet where was the new Zealand Central Bank may be positioning itself to a hike in the next few months. And that is why. Its still, perhaps, a good value in the currency. The ecb is sounding a lot more dovish than the bank of england at the minute. Youre thinking about the outlook for eurozone Interest Rates, too, that looks softer than the uk, as well. So whether or not its over that, i think 2 outlook is very good for growth. We will still camp out. Cap ex picking up in a nevada of reasons. And Something Like 8 in japan. So, you know, were actually talking about very strong growth that youre going to see in the first half of this year. Just going to drive equities potentially up another 20 . Those are some thoughts weve already had. Unilever has reported better than expected full year figures. Net profit jumping 9 . I caught up with the ceo a little earlier. He told me hes pretty pleased with the performance. Hes obviously had head winds on the currencies. But the underlying sales growth is up 4. 3 . 55 of our Business Building share. We also have core operating points, so that is fourth and quarter line growth. Jpmorgan report i ly dropped. Jpmorgans exit was prompted by concerns about its employment of joyce wade. Hong kongs security filings state of ohio wei worked for jpmorgan until last august and now works for u. P. S. Jpmorgan in frankfurt, pretty flat. Wells fargo has reportedly banned staffers from lending their own money through peer to peer platforms. The Financial Times says the code of ethics suggests employees shouldnt arrive in priefl lit held businesses, but compete with the bank. Wells fargo stock down 0. 3 . And dropbox has reportedly secured 250 million from blackrock and other investors in a new round of funding. The 6yearold start up valuation has surged along with demand for Cloud Services. Many expect the companies to go public sometime this year. Lenovo is playing coy over reports its in talk to buy low end server union from ibm. Then this other mister erted. Ly huultimate many reports say they have restarted talks that ended last year. And last week, egyptians voted overwhelmingly for a new constitution. Renewing hopes that the country may be on the road to a transition. But will it be enough to revive the struggling tourist sector . Yusef has more for us from cairo. Yusef. Well, ross, as we wait for an announcement as to when parliamentary and president ial elections will happen, take a look. This is not an oil rich gulf state. This country depends on foerchb investment, on tourism. Back in the good days before the revoluti revolution, you were looking roughly 1. A year. He said, so where are we at. The Great Pyramids r one of the last remaining wonders of the free world. But even they have fallen a horde time kep follow . 2013 was a bad year for us. Even the first half of it was very slow. The second half was almost that. According to egypts official statistics agency, tourist arrivals in 2013 fell almost 39 year on year. Now, before the revolution, this place used to be packed with foreign tourists. In the two hours weve been here now, some have i love my business. I will stay in. I will not haul my shop. At thee beginant museum, no need to wait in long lines. Some do find a rare opportunity by visiting, over about there are signs of a recovery with increasing again primarily in the red sea area. Were witnessing a great improvement to the last quarter of 2014. This, i think, is part of the changes that were seeing as part of the road map implementation. Now that many countries have eased travel restrictions, officials are confident they will be able to attract some 13. 35 million visitors this year. The hope here is that elections will bring about a swift return to stability and that egypt can reclaim its standing as the leading Tourist Destination in the region. Cnbc, cairo. Whats interesting to node here is that the composition of the market hasnt changed over the years. Some 75 on average of visitors come from the european mainland. Of course, theres still the risk ahead for the country as a whole. On saturday, this will be the threeyear anniversary of the 2011 revolution here in egypt. Well have to see basically how it all unfolds. Three years. Thats amazing. At the moment, the red sea, this is the perfect time to be there, isnt it . It is a good time to be there, ross. I suggest you book a ticket and come across and well take some time off this weekend. That sounds perfect, just like it is here in london. Yusef, thank you very much indeed for that. Still to come, authorities in texas believe they may have a idea of what went wrong with a will i y let me tell le avenue. This magic moment it is the story of where every great idea begins. And of those who believed they had the power to do more. Dell is honored to be part of some of the worlds great stories. That began much the same way ours did. In a little dorm room 2713. This magic moment afghanistan, in 2009. Orbiting the moon in 1971. [ 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. And a recap of the headlines today, unilever beats personings expectations and warning of emerging market headwinds. Police make an arrest on the u. S. Mechanics r u. S. Mexico border. So 11 of the s p 500 companies have reported results so far. 57 have topped revenue line estimates, which is women below the fouryear average. The Financial Sector is the winner so far with the highest Earnings Growth for the quarter. Joining us is john buffett, earnings analyst at sackso. John, good to see you. We talk about that 57 topping the bottom line estimates. What is the full year average . Over the last few years, weve seen 71 of Companies Beat the estimates. We are seeing a weaker start to this earnings season with just 57 of Companies Beating the bottom line. Some of that may be due to the fact that companies are pessimistic coming into this earnings season. We saw 96 companies, the index give negative guidance. Clearly, companies are pessimistic coming in. At this point in time, were seeing fewer Companies Beat the estimates on average. It is still very early days, right . So, you know, that average could easily go up. Exactly. Its very early in the earnings season as you mentioned. Just over 10 of the companies have reported. Most of the companies that have reported have come from the financials, technology and Consumer Discretionary sectors, really starting this week and over the next few weeks, well hear from a broader range of companies and well have more data to work with in terms of how that is that part of provisions for credit losses . That is part of it. Analysts are expecting a decline of 10 revenues versus Earnings Growth of 24 . A lot of the strength and Financial Sector is coming from the insurance space. Specifically, the multi line insurance and the property and Casualty Insurance companies. And the reason for that is that these companies are benefitting from easy year ago comparisons due to hurricane sandy. And the year ago, a number of these companies had to pay out catastrophic losses due to hurricane sandy. In this last quarter, we did not have major hurricanes in the u. S. The therefore, earnings are back to normal levels this quarter versus much weaker earnings a year ago. Thats help to drive the overall growth for the Financial Sector of this quarter. Yes. That would be sort of easternings being approved on the bottom line. What are you seeing there . Overall for the index, just 0. 3 Revenue Growth expected. However, as i just noted, a lot of that weakness is coming from the Financial Sector. Again, its due to a onetime situation of one company, prudential, they had an unusually high number. If we take prudential out of the mix, growth and financials on the revenue side would be flat and growth index overall would be 1. 5 . Weak Revenue Growth overall, but much of that is due to the prudential factor dragging down the revenue side. The blended right at the end of the forth quarter was 5. 35 how much do you have to spread out . One, as we noted, fewer companies are beating the estimates, so youre not seeing that uptick due to upside surprises. And one of the other trends weve seen is analysts have continued to cut estimates, particularly in the Consumer Discretionary and in the energy sectors. Weve seen the numbers for both of those sectors come down over the last few weeks. Again, a combination of fewer Companies Beating, analysts continue to take down their numbers in the Consumer Discretionary and energy space. As a result, weve seen that growth rate come down down to 5. 9 today. John, good to see you. I know youve got some snow coming, so i hope thats okay for you. Thank you for joining us from boston. Police in texas think they may have uncovered a major lead in the fm breach at target. Jackie deangelis has joined us from the states. Hi. Good morning, ross. Happy tuesday. Police in macauen, texas, arresting a mexican couple pe area. The police chief saying Mary Carmen Garcia and daniel doe mention easy had used cards with data from south texas residents. He says they bought several items at National Retailers in the area. He also says local police started working with the u. S. Secret service last week. He says investigators believe on the hopes that banks would be be able to detext the from the fraud that way. A target spokes woman wouldnt comment on the on issue, other than to say that the investigation is active and ongoing. Doubts are being raised about the source of the Software Code behind the data breach. On friday, intel crawler said a russian teenager created the malware and reportedly sold it to doesz of criminals for about 2,000. Intel crawler isnt alleging that the teen perpetrated the hacker attack, but brian krebs, the Internet Security blogger is disputing iper callers report. In his exclusive interview on cnbc last week, greg steinhoffle says credit is speaking in fa r faifr. The wall tleel street journal says it was offered. I was at a target this weekend and i was doing some shopping. I wasnt one of the people at risk as a result of the data breach. But i paid in cash because i just you know, this is going to leave a sigma, i think, with a lot of consumers for a long time. Yeah, i think youre right about that. Jackie, good to see you. Have a good day. Still to come, toous trahe trading week is light on data. Well find out what might move investor sentiment, come up. Into on the agenda is in the United States today, its a pretty quiet day in terms of economic data. No major reports until tomorrow. Earnings season rolls on with about sorry, until thursday, i should say. Earnings season rolls on with around 0. 25 of the s p 500 reporting this week. Today well hear from johnson johnson, travelers, verizon and Delta Air Lines before the open. Ibm and Texas Instruments will report after the close. U. S. Futures right now are indicating a higher start. The nasdaq around 15 points above fair value and about 5 points for the s p 500. Joining us now, michael gurka. Mike, nooz nice to see you. We did absolutely nothing yesterday while you were on holiday. How do you see this shaping out this week . Well, ross, one of the expectations was coming into earnings clearly was that you were going to rt sta to see the broader index in particular, the s p start to pull back on a lot of missed forecasts. So if the status quo remains the s p above 1825 or even in this elevated 1830 level, its still remains rather bullish. I think that that 1807 level is kind of like the baseline of support for start here. But in particular, i think the broader indexes have been actually surprising and outperforming because of this anticipation that i mentioned. So, again, everyone here in chicago remains rather fixed on this tenyear yield to see if 282, 280 is going to be the new benchmark, i think the risk there is clearly a lower yield, which means that the bond market will continue to rally on disappointment that growth is slowing. Right now, at least, thats the First Quarter emphasis right now. Yeah. Apart from the nonfarm report, all the other data is suggesting completely the opposite. Right. And, you know, on the commodity extent here, ross, i just want to mention that theres been a lot of emphasis in the market about seeing the crude oil market pull in a little. And if youve noticed, at least versus brent, the spread is starting to narrow considerably. And a lot of anticipation is that that could get really close. For me, at least, i think the way the dollar has been performing recently, its going to be more of my montra, at least, that youre going to start seeing a stronger dollar and a lot weaker currency versus the u. S. I think that will start showing up in a lot of the commodities space after getting beat up for quite some time over the last year. But, again, i think europe is looking good on the equity side. Green light ahead. Okay, michael, good to see you, as always. Have a good day in chicago. Thanks for joining us from spectrum asset management. Thats it for todays edition of Worldwide Exchange. Coming up next, squawk box, the countdown of markets stateside. Whatever happens, we hope you have a profitable day. Bye for now. Good morning. Johnson johnson, travelers set to report this morning. China stocks have their best gains of the year. And abm in talks for a multibillion dollar sale for one of its units. It is tuesday, january 21st, 2014. Squawk box beginning right now. Good morning and welcome to squawk box here on cnbc. Im Michelle Caruso cabrera along with Steve Liesman and scott wapner. Becky and joe are on their way to davos, switzerland. Andrew is there already. Well be talking to dow clem kal ceo Andre Liveris and ken rogoff at 8 40 a. M. Also a huge chess player. Making headlines, earnings season is in full swing plunge the names reporting before the bell today, johnson jounsan, travelers and verizon. After the bell, well hear from ibm and Texas Instruments. Roughly 50 of S P Companies have reported, roughly 50 have missed estimates. U. S. Equity futures this morning are suggesting that we are going to have a positive open. The dow would open higher by about 57 points. The s p by 6. The nasdaq by nearly 16. Scott. Michelle, thanks. In corporate news, two people have been nabbed at the texas border in a credit card fraud