Markets and overall. I just think that making prediction about stabilization of this environment is quite hard. The latest to stop from refining weakness. The firm upping the amount of cash its putting aside, as well, to deal with the gulf of mexico spill. And toyota shares fall lower in japan despite the carmaker raising its forecast. The firm now expects a record profit this year. Announcer youre watching Worldwide Exchange, bringing you Business News from around the globe. Warm wake to todays program. We kick off with where we are an hour into trade in european equities. 8 to 1 decliners currently outpacing advancers on the Dow Jones Stoxx europe 600. Here we are, this is where we stand right now. Love the prices on for you. Were not quite at the session low. We hit that about a half an hour ago or so. Ftse 100 off 0. 4 . The xetra dax off 0. 75 and the cac 45 off 0. 25 . Ftse mib is up 0. 36 . The nikkei down over 4 today during the session. The yen actually didnt continue to strength. Hang seng back after its holiday, down 2. 8 . The kospi down 1. 7 . The asx in australia off 1. 75 . Hasnt done much for the stock market. The vix, over 20 for the First Time Since october. 21. 44 is where we stand right now at 16 . As you can see in the last few sessions. And volume yesterday, extremely high, as well. As far as bond markets are concerned, the stock market losses have been treasury gains, tenyear treasury yields below 2. 6 at the moment. The first time weve been down there since the beginning of november. That is a threemonth low. Gilts today, construction pmi coming out in around half an hour. Gilt yield back down to 2. 68 . Not too long ago after the unemployment numbers we had out about two weeks ago, that yield was heading back up towards 3 . Taking a look at the currency market to date, dollar yen, the lowest since november 21st on monday. Just over 101. 28 is where we stand. The saucy dollar, were back up to 0. 8885 because of that change in rba. Sterling, a little weaker because of the dollar. And euro dollar, just above 1. 335. 1 is. 3479 was the recent low we hit on friday. Thats where we stand with currency markets. Plenty to come on todays show, as well. Chip designer arm just missed forecasts with Fourth Quarter number webs but managed to maintain its outlook. Yumm brands has had an earnings beat, but sales in the Fourth Quarter drop. Well check in on that story. Toyota raises its outlook, telling investors it speblths a record outlook this year. We get all the details live from tokyo in the next hour. And happy birthday facebook. Social media trail braiser turns 10 years old today. Later, we visit how facebook became so popular and what the next steps are for that business. Yes. I should probably set up an account at some point. But youre not a facebook . No, no. Youve avoided it for ten years. Dallas normal way to get ahold of people. Its a utility now. Its the best way to get in touch. Whats wrong with the phone or any other way of communication, text messaging or a thousand other ways of communicating with people. Its the cheaper way . Is it . I dont know. Some of these stats are ama amazing, right . Treasury yields back to 2. 5 . Copper, longest losing streak in 27 years. Yeah. You were talking about the vix volatility index, but its a broad based pick up in volatility here, isnt it . Yeah. Vol at 20 is not a big deal. No. But relative to where we were in may of last year may of last year was just a blip on a continuous straight line. So even if were only back, what, 5 in the stocks . How were we in may of last year . We were always worried about china. Its a perfect storm. It is. Concerned about growth in the u. S. Weve always had those concerns. Weve had those concerns last spring. Weve had those concerns Three Springs in a row. Weve gone after awful long way. You have to have a pullback at some point. How about 15 for the s p . It would be fine. It would be a tremendous buying opportunity. We could do it. Why not . Anything is possible. Well take a short break. When we come back, well look into bp. Its shares down after the latest oirnlgmaker to report a weak set of results. See you in a moment. Bp shares are down, they became the latest oilmaker to post negative results this quarter. They posted a 37 drop in profits after output from its production and refinery units fell. Bp said lost income from asset sales and weak recessions on mining have dented their profits. Elsewhere, ubs shares jumping more than 4 today after the swiss bank posted a larger than expected Fourth Quarter profit of 917 million swiss francs, driven in part by a better performance of the lenders investment bank. Now, carolin is in zurich to run us through the numbers. A better performance overall, carolin. But theres a lot of caution about this statement that he made about concerns about emerging markets, about tradesing over the First Quarter. This is no different from what weve heard from him for the last several quarters, is it . Or am i wrong . Its nothing different from what weve heard over the last nine quarters, julia. So yes, hes right to be cautious because weve seen a fair amount of volatility in the markets in the first month of the year, but who knows how the rest of the fist quarter is going to play out. Of course, there is concern that the First Quarter which has a seasonality is usually very strong. May not be seeing that boost that we usually see in the last years prior to this. Again, weve got two months to go before this quarter wraps up. I want to bring you a note from Goldman Sachs this morning. They call the numbers mixed result. As you pointed out, they say the Investment Banking results, that was very strong partially because revenues outside the fixed income units, they held up better than expected. I pointed out the advisory business revenues, up more than 70 of the quarter. Also ecm revenues up substantially, up by more than 50 . And keep in mind, fixed income only accounts for some 15 of Investment Banking revenues going forward. So even though that was flat, thats not too much of a concern for the bank. Now, the other point of strength that i would point to is the fact that capital and the Balance Sheet metrics, they were very, very strong, as well. And coldman sacks says this was partially because of lower than expected risk weighted assets, but also because of that partial reversional of the Operational Risk add on which is required by the local regulator. And this had been a big concern for investors going into the numbers, part ideally because there have been rumblings about a higher than expected leverage ratio here in switzerland, but also because of this ubs take risk out of. When i spoke to the ceo of ubs, he tried to reassure investors about these two issues. I think the underlying elements that drives the value for our franchise are still intact. I think in respect of the leverage ratio, we have a clear path. We are already well ahead of our minimal regulatory requirements by continuing a discipline executional of our reduction of risk weighted assets and the Balance Sheet in general. We will achieve our targets in a permanent manner. I look at our overall the overall environment. I would say that, you know, by excusing that we will be able to have a good capital return for our shareholders. So i think continue to execute is going to be very important. But is it still possible that you could be paying a special dividend in 2014 . We say that when we achieve our 13 target ratio, which clearly we expect to happen this year and we have a possible stress 10 ct1 ratio, then we will pay at least 50 of our net profit attributable to shareholders to them. We saw 28 increase in your bonus pool for 2013. Im wondering, why did you feel you had to do that . How difficult is it to attract talent out there . First of all, its very important that on an accounting basis, the cost of our valuable compensation for 2013 is basically flat. I think that we took down our compensation in the last two years quite massively, also absolute and related terms to competition. We had a very strong year this year and this is now reflecting our compensation framework that we want to retain and attract the best people in the industry to serve our clients. And julia, let me tell you why Goldman Sachs believes this is better results. Because the profit in the allimportant Private Banking business came in below expectations, partially because of the cost and the gross margin is still stuck at 85 basis points. Julia, in an hours time, well be speaking to an analyst and he says with the return on equity of just about 7 , maybe shares at ubs not too compelling right now. Back over to you. Thanks, carolin. We look forward to that coming up. Lets move up and round up our Earnings Reports. Shares up 4. 3 after the firm lost in the last quarter. Fourth quarter numbers disappointed investors due partly to and apple as a Smartphone Market slows. He told cnbc he still expects growth to continue. Were expect to go deliver that. Were expecting everything that weve been going through the last few years to come to fruition and more units to share. Were clearly seeing some slowdown in the groekt in the high end of smartphones. But overall in the markets, were supposed tom other end products. Joining us now, christine. Thanks for joining us. Good jump in full year revenues. Still playing in the right space . Whats your outlook for them . Definitely, if there had been a slowdown in q4. Overall, 2013 had been a good you know, the company saw 22 person with crossing 1 billion better on 11,1117. 7 million in 2014. And the first three quarters, the company had around 26 and its just quite a fall which had a marginal decrease compared to the previous quarter. Around 15 , so youre talking about 80 billion connected devices worldwide with the sullivan forecast, right . Yes. Which suggests is a big pie for arm to be involved with. Yes. That would be a key driver for arm when we talk about the internet of things. Very arm is potentially one of the Strong Companies in the market. And we are talking about 500 billion Internet Users by 2020 and they move away from just mobile and smartphones. Yes. It becomes things like tvs, i mean, anything. Absolutely, yes. We can talk about, you know, run by the pentation of tvs, microcomputers and even the wireless chip sets and so on. What about the networking market . Ive seen a number of analysts say this is going to be one of the key royalty Growth Drivers over the next two to three years. Do you agree with that . Absolutely. If you see aluminum and royalty revenues drew by 18 in 2013. Which is trimming tremendous. And when you talk about the process of royalty, specifically, it grew by 19 in 2013. The physical life she tried to draw back, it is definitely a driver. And we can see through arms results, as well. Talk to me about valuation. Ive seen the price ratio 38 times. A lot of analysts saying their expectations are baked into the cake here. Its difficult to see further good news as far as the stock is concerned. Whats your judge here on market valuation . You know, i know why this question is coming from, but i would expect the First Quarter of 2014 to pick up. Especially because of the pipeline of olympicss that they have and the royalty revenues that they are expecting. I think it should be fine. Were going to get your view. I think the valuation is an interesting one. We think the stock is attractive. I think its going to be a stock particularly in the current market that investors will start to stiff around at these levels with todays selloff. Which actually, its not the headline revenue over on 38 sometimes times forward earnings number. Thats notice really what people are investing in. This is a stock after todays corrections people will be looking to pick up. Back to you very quickly, chris. This selloff, Dennis Gartman is talking about a 15 potential correction. What do you think . I think were in a environment where weve got through considerable volatility. You could do a Google Search and say volatility is going to pick up in 2014 and guess what . Volatility is this is lower, isnt it . The structural reality of the whole zero Interest RateFederal Reserve intervention had meant that were in a very low environment for a considerable period of time. The big shift is that people are now beginning to look at the fact thrather than just holding all my exposure in risk assets or riskier assets, i can say actually now the trashry market isnt terrible. People are beginning to use treasuries and more than risk hedge and equities, global equities, more than the return geared growth opportunity. And against that backdrop, the momentum of last year have run out of steam and started to reverse, all at the same time. But the news flow hasnt region changed. So what were seeing, this is about people repositioning for 2014. Treasuries, equities, i dont have to take that Political Risk as much in some of these countries which actually ive defer and the momentum trade. Massive flows out of emerging market etfs, headline etfs in particular. I dont think its a crisis, i dont think its panic. I think its a readjustment at the beginning of 2014. But if you look at what happened in the implied rate, they fell off by about 12 basis points yesterday. Thats not a flattening of the yield curve. We saw them turn significantly or take out any pricing rate hike weve seen. Is it too much . Well, look, i mean, the ism figures come out. We know its weather related. But the minute its relate related, we know the data isnt going to be as visibility, as it had been quantifiably. Can we rely on that data point to trigger all those algorithms that keep buying and keep selling . They should clearly by earning equities. Emerging markets have taken a big hit. Emerging markets last year were peoples favorite asset class. This is a very different back drop here. What do you do, do you sit on your hands . We had a guest yesterday telling us cash was king orb doctor. No, i dont think cash is king. Treasuries are your Investment Risk Management tool. In markets like this, when you see share prices correct quite sharply, its when you go start to look. Look at the banking stocks out there that have now become quite attractive. They might be mo attractive in a few weeks, credit. We could have the most hated rally because it was going away from them and they had been waiting for something to happen. If you had been making money in investment markets in the last three or four years, you can and look at a stock like performance today, you say is this really what i should be doing . Should i be taking this big step back . I think if you start to look at the message coming through through the likes of ubs, these are stocks that you can step back into again and say, look, i can pick it up at these levels with very little real risk. I think with a breakdown of the u. S. Equity market in particular, that would be where i would be going to look around. I would be looking at good policy stocks u. S. Side to see that value side. This change in the flows out of etfs, when does it stop . Its not a predictable process when you had the flows going in that people didnt anticipate in terms of the volume. These have been very big macro orientated moves. They had been going into spiders, short positions. Money has been moving very, very quickly. What wir looking at is the secondguesses that are start to go occur now. And if you go into a set of results, theres a big short story for people. Do i close out my shorts before the numbers . If the numbers are weak, do i then double up . Were not in a here is a you can get on board and go to sleep. These flow numbers are telling us right now that the market flow is going against those situations. Thats when you get your opportunity. You dont get your opportunity when the market is going up 50 basis points, 1100 basis points every trading session. You get a momentum trade, you end up not buying value. These are varmts where you can get value on board and thats really important. Great. Equity strategist at lieber investment services. Meanwhile, the fed dallas president Richard Fisher says mondays selloff doesnt affect his support of the tapering of the bond buying program. He says hes focused on real Economic Performance and what happens in the bond markets. So speaks the hawk. Elsewhere, the Australian Central Bank dropped a reference to the Australian Dollar being uncomfortably high. The rbi kept its main cash rate unchanged at a time record low of 2. 5 . The rbi started lowering rates in november of 207 and its last month was december last year. You can see up around 1. 8 been taking it to just above that 89 figure level. Chinas Opposition Democratic Party is heading to court. Its calling for the dissolution of the thai party. Separately, the commission is looking into several campaigning irregular layerties leading up to the election. China has pulled out of the deal to buy 1. 2 Million Pounds of thai rice, adding to the interim administrations financing problems. Now, happy birthday facebook. The social media giant celebrates its tenyear anniversary today. But is it all downhill from here . Is facebook so yesterday . Ross i saw the trend when it launched. You just didnt bother at all. Yeah. If you want to join the conversation here on Worldwide Exchange, get in touch with us by email, or via twitter cnbcwex or you see, no one is asking anybody to face them, are they, to talk about this story . Tweet, email, no one says face me. Face me, baby. Or whatever do you face each other . What do you do . I joined in the beginning. Is that what its called . I