Transcripts For CNBC Worldwide Exchange 20140827

Must agree with a ceasefire with western rebels in the country. Telecom stocks lead the way in europe. Telecom italia higher on reports that it will launch a bid for vivendi despite counteroffers. Venture capital firm invests 20 million in snapchat, the messaging service with virtually no revenue. Good morning, everyone. Its wednesday. Its time for a brand new edition of worldwide exchange. Its one hour into the trading session. We are a little softer here across the European Markets. The stoxx 600 is off by 0. 1 . We had a fantastic rally over the last 2 1 2 weeks specifically monday and tuesday on the back of hints of more qe coming from the ecb. One by one, i want to show you where the softness is coming from. Germany, down 0. 25 . German morale fell for the first time in 123456 years. Why is that . Because of russia and ukraine. The ftse 100 is pretty much flat. The ftse mib is still down by 0. 2 . The ftse markets, dollar close to a 13month high on the back of durable goods and Consumer Confidence data yesterday. 1. 3184 off those oneyear lows that we saw earlier on this morning. Once again, it is all about draghi, isnt it . European bond yields are holding near record lows with the yield on frances tenyear falling to a staggering 1. 27 yesterday. Down from 1. 37 last week. This amid expectation that the ecb will deliver for the stimulus when it meets next week. Jpmorgan says it expects some policy changes to make telcos more attractive and the chances of qe are over 30 by the end of the year. The german finance minister says Mario Draghis comments appear to support fiscal austerity have been, quote, overinterpreted. Earlier we spoke to jeanclaude trichet who called on mario draghi to deliver on what he has promised already before implementing any new pressures. Take a listen. It seems to me before having any new weaponry in place, you have to apply what you have already decide, which is very, very important, very significant, very substantial, and i hope will be delivered as soon as possible. Nicholas is managing director and steve cohen is with me now. Good morning to you, gentlemen. Steve, let me kick things off with you. Do you think we need more qe for the eurozone . Deals are already at record lows. What difference is qe going to make . I think the question is weather qe will make that big a difference in terms of bond yields. If you think about where you are in europe versus the uk or u. S. , yields in europe are very, very low. But it will underpin risk assets very much. I think that was the message the last four or five years. The one thing qe can do is push risk appetites higher and thats the one thing mario draghi wants to do in terms of delivering the confidence boost that hes delivered the last couple of years and whether that feeds through into the real economy. Nicholas, this morning were getting sments saying maybe mr. Draghis comments may have been misinterpreted. Do you think hes right . Do you think that mr. Draghi didnt intend to make those comments . Oh, i think he definitely did. Risk assets have been pushed extremely high. And i think that launching qe now is a place of thumbing the door out to the horses bolten. Qe is basically a nonstarter before the results of the asset quality review come through. Its questionable whether it will be launched this year. It certainly will not fix the underlying problems of the eurozone. But any little bit helps now. It is politically contentious. I think weve moved to the stage where it is almost becoming an inevitable that some form of large scale asset purchases will be launched. It certainly needs to see the results of the telcos and possibly the assetbacked securities. But i certainly think that he intended to make this is comments. You say its inevitable. Im thinking is it too little too late . Steven, what do you think . Its a big question because ultimately, even in the u. S. And the uk, its not clear what qes impact has been on the real economy. And i think the point you made earlier on is right, which is the starting point where we are now, yields are already so low. I think the one thing that has triggered draghis comments is the drop in inflation expectation. Up until the last couple of months, theyve been able to fall back on the fact that expectations at least in the medium term held up and the world roughly in line with their forecasts. Thats no longer true. I think that has been a big shift for him to start make those comments. Even if this is an empty promise, do you think this is more buying interest european equities . Do you think well see more buying no matter what . European equities were oning into headwinds. The inflation picture was weakening rapidly. Russia ukraine was is significant factor and earnings, again, had a very lucid quarter. We were seeing money come out of europe, particularly u. S. Investors were telling european equities to buy emerging market equities. I think what draghi did on friday is going to recapitalize, along with russia calming down. Were still seeing emerging markets is being combining the confidence of draghi and what might come next which i think is a different driver. Buying on hope, does that work, nicholas . Well, it certainly did as far as the omt is concerned. The problem is that theres no real economy equivalent for the omt. It clearly will not i dont think that these are simply words. This was a very welltimed and a very important speech. But certainly large scale asset purchases will not fix the underlying reduie inying woos a that there is a that the political and economic governance of the eurozone is in taters. All right. Nicholas and steve, were going to stick around. Lets get back to one of our other top stories. The german finance minister says hes not happy about comments from frances recently departed who called germanys disparity a sesson. Meanwhile, the former economic adviser to president hollande has been named perhapss new economy minister. He replaces smnl who publicly criticized the government policies. Speaking earlier on the channel, trichet gave his views on the shuffle. It was absolutely necessary, in my opinion, to have this because one minister the economic minister was openly arguing against the line of the government. This seems to me absolutely unacceptable in any country. Lets get out to stephane who has been covering this story for us out of paris. Mr. Trichet says it was absolutely necessary. Whats the reaction in france specifically in the french press . Well, the left wing of the socialist party yesterday was a bit it was a Chain Reaction to the appointment of him. It was the most significant decision in this new government. S not a politician, but he is extremely well connected to the Business Community. The contact point for hollande to the Business Community. As such, its a very signal sent by the government. The time is about to implement a Significant Impact through that package. 40 billion euros for a company in order to boost their competitiveness. So in terms of policy, a economic adviser to Francois Hollande is one of the men behind this new agenda with really compared to the former economic minutester. Nobody was expecting him to take control of this ministry. Were expecting yesterday that the finance minister would take the control of the whole economy and finance the ministry. By the way, he will remain finance minister. He will be the contact point for french authorities in brussels. Hes the one attending the meeting and its important to keep saffer at the time Francois Hollande is going to request but not a delay for france to review six public deficits. So to make it short, the reaction from the Business Community is rather positive to the appointment of emanuel. The reaction from the left wing of the socialist party is negative, but we couldnt expect the Market Reaction given what happened in the last three, four days. But the cabinet certainly has its work cut out for them because weve got the upcoming budget vote, weve got the upcoming vote of confidence. How are they expected to fair in terms of these votes 12347. We got the vote of confidence. It will stick the confidence of the national assembly, although theres no obligation in a french constitution to request a vote of confidence. Now, the budget is more tricky event from the agenda for Francois Hollande because the appointment of emanuel might increase the process from the left wing of the socialist party. Now will is a risk that some of the socialists would not vote 2015. In that case, there is no vote, Francois Hollande would be in a difficult situation. So it is a strong decision for the economy. And still coming up on todays show, how further investors are looking to snap up a share of snapchat of the most recent valuation put to them, the 10 billion bracket. Cracking the allergy problem, we take a look at researchers say theyre very close to creating an allergyfree peanut. And were inside Buckingham Palace, speaking exclusively to Prince Andrew about his current role in the monarchy. Where the reward was that what if tnew car smelledit card and the freedom of the open road . A card that gave you that im 16 and just got my first car feeling. Presenting the buypower card from capital one. Redeem earnings toward part or even all of a new chevrolet, buick, gmc or cadillac with no limits. So every time you use it, youre not just shopping for goods. Youre shopping for something great. Learn more at buypowercard. Com welcome back to the show. Rbs has been flying 14. 5 Million Pounds in relation to pulled mortgages from customers. The uk financial watchdog says the lender and its division failed to ensure that advice given to customers was suitable in over half the cases reviewed in 2012. Rbs says its profits have been completely overhauled. Uk state agents fox news has reported a 29 jump in first half core earnings saying it will pay out 12. 8 Million Pounds. The stock is falling sharply after the group warned that transactions were set to slow in the second half of the year due to tougher mortgage standards. Meanwhile, rising home prices have been have given a boost to the rental market. More than six of the uk population currently rents. As a result, Tech Startups are introducing new apps and websites to disrupt the rental market. Find out more on our website, cnbc. Com. Squares reportedly looking to raise capital, that would value the startup at 6 billion. The company led by twitter cofounder dorsey turns any tablet or smartphone into a debit card reader. Square aims to raise about 6 billion. And Venture Capital firm kleina perkins is reportedly investing in snapchat. Cliner xhi er committed to inve million in may. If the deal goes through, snapchat would join a select number of valuations above 10 million. Including from uber. Is snapchat worth a 10 billion valuation or could this app disappear itself down the line . Also, we want to know, do you use the messaging service . Personally, i dont use it. I want to know if you guys are using it. Join the conversation here on worldwide exchange. Get in touch with us via email, worldwide cnbc. Com or via twitter, cnbcwex or direct to me carolincnbc. Breaking news from reuters in the last couple of minutes, polelands Prime Minister says that the polish secret services confirmed that regular units of russian army are operating in ukraine. This after two hours of facetoface talks with the russian president and his ukrainian counterpart. Yesterday were deemed positive even though no ceasefire was reached. Vladimir putin played down his influence and insisted it was up to kiev to bring an end to the violence. Translator we in russia cannot talk about any conditions of a ceasefire, about any agreement between kiev and donetsk. This is ukraines business. We can only help create an atmosphere of trust that is important and necessary process. Meanwhile, the ukrainian leader says there was Multi Lateral support for a peaceful resolution. I can say that the logic of this peace plan was finally supported by all of the heads of state without exclusion. Insisted first of all it is necessary to reach an agreement tone sure the free democrat of ukrainian system illegally detained by armed groups. We achieved an agreement to organize a Contact Group immediately. Lets get back to our panel of guests. Steve Cohen Investment strategist at blackrock and nicholas. Nicholas, russians are optimistic, but youre not as optimistic about this apparently cease pier. Not at all, no. What we have seen is a shift in this crisis, and not one which kiev will be particularly pleased with. The mounting civilian death toll in the east of ukraine is starting to play into russias hands. This is forcing a shift in the west response. Weve seen germany playing a much more important mediating role. Germany is now, in fact, in favor of federalzation. This is music to the ears of russia. So all of a sudden now, despite the fact that this has been a creeping invasion and russia has violated the sovereign territory of ukraine, its ukraine, its kiev that is now undermounting pressure to come to the negotiating table and to reach a deal with the separatists. But this is a very, very politically awkward time for ukraine and, clearly, germany is now playing a very Important Role and that means almost certainly at some stage, a more balanced, a more russia friendly role, germany has been anybody but to russia. But there has been a shift. Specifically from the economic perspective, they cannot afford to toughen their stance once again. Its hurting, isnt it . It certainly is. It certainly is. But Vladimir Putin obviously will take comfort from the fact that his Approval Ratings are near 90 . What did you say, 90 . 90 . And thats basically according to a relatively independent russian pollster. And also that he has enormous support for this and the dip is now no longer just about ukraine. This is about russias firm belief that the west is out to destroy russias reputation and its economy. So hes on the war path. Lets move on. Palestinians flooded the streets of gaza yesterday morning after israel accepted an egyptian ceasefire agreement. Gaza must now be brought under one legitimate palestinian government, commenting on the open ended ceasefire, israel said it would allow the flow of humanitarian goods if the deal was honored. The finger was pointed at hamas for not accepting a ceasefire sooner. Israel has accepted the egyptian ceasefire proposal. This time, we hope the ceasefire will stick and i can now that the dust will be clearing, why is it that today hamas has accept the very same framework that they rejected a month ago . So much bloodshed could have been avoided. All right. Lets show you what European Markets are doing early on this morning. The ftse 100 modestly higher. Overall, we are seeing a bit of a pullback after two strong days of gains. 2 1 2 weeks of gains for these European Markets. The xetra dax is down modestly. The cac 40 off by 6. 5 points. Lets get back to steven cohen, investment strategist at blackrock. What do you do in terms of your money right now . Weve got all the geopolitical risk. Yes, weve got some talk of a ceasefire in israel, gaza, some type of a ceasefire between russia and ukraine. This is still lingering, isnt it . What do you do with your money right now . I think it is lingering and it will probably continue to linger as we heard earlier on. The impact on markets is relatively muted. We continue to like equities in the current environment. Growth is good but not good enough. Thats a dramatically changed Central Bank Policy. I think the fed is absolutely critical over the next one to two months to see if we see any change in rhetoric. We have nonfarm payrolls next week and then we have the fomc in the middle of september. That to me is the only thing that can really change the overall environment that were in, which is broadly risk positive in terms of equities. And also very much this driving search for yield, which continues and we continue to see a lot of money going into credit, for example, even Investment Grade credit in europe. How much does it yield right now . Around 1. 5 , depending on what you own. Not much, is it . Not at all. But it tells you ultimately investors, given particularly here in europe, were going to be in a zero rate environment for a very long time and investors are looking for yield. And into places like peripheral debt again and Investment Grade credit. And is that why investors have been moving into high yield . Weve seen a little bit of a selloff, a fairley orderly selloff in the months of july and august. Ja valuations arent particularly compelling. But where youve seen a selloff is the underlying credit fundamentals were not changing. So i think the rate environment potentially is a risk to high yield. Again, i think it comes back to the fed next month. But we definitely saw investors on this move out in spreads coming into buy yields, particularly institutional investors. And i think it tells you again that as long as the fault rates stay low, as long as were in this relatively benign environment, the question is yeel. The question comes back to what changes the Central Bank Policy . Its fought going happen in europe. Its really going to happen in the u. S. Thats why i think the fed is the key focus. Before we talk about flows, going back into the emerging markets, were seeing emerging equities rally. Even though the dollar has moved a very, very long way and if you look at some measures of the dollar, were back to where we were at the peak of last year, that has had very much impact on the emerging market assets. So i think thats quite an interesting message. If you continue to have a rising dollar, the real impact is does it drive yields and do you see a big shift in the yield curve and the u. S. So far, that hasnt really happened. In that environment, theres a lot of environments with emerging market equities. Theyre still underowned. While we are seeing yields go in, we can see more money go in to reallocate. And you like korea and taiwan. In general, yes. Steve cohen, investment strategist at blackrock. Appreciate your time today. Still coming up on the show, is it time to sell the greenback . Our next guest says its time to rethink the dollar trade. What should you be buying instead . Well be back. [ male announcer ] during the cadillac summers best event, lease this 2014 ats for around 299 a month. Hurry in this exceptional offer ends soon. Announcer youre watching worldwide exchange, bringing you Business News from around the globe. Weir interpreting the ecb, the german finance minister says markets are reading too much into draghis softening stance. Jeanclaude trichet says he must deliver on original promises before launching qe. Having a new weaponry in place, you have to apply what you have already decided. Not our business, russian president Vladimir Putin says ukraine must agree to a ceasefire in the country and moscow will only support the Peace Process when it starts. Telecom stocks lead the way. Telefonica will announce a plan for the broadband unit defight telefonica increasing its startup offer. Investing 20 million in snapchat, the messaging service with virtually no revenue. Good morning, everyone. Lets show you what European Markets are doing at this point in time. Were roughly 1 1 2 hours into the trading session and were seeing a mixed picture. The ftse 1100 is up modestly, less than 1. 5 after that fantastic rally yesterdays trading session playing catchup. The xetra dax is taking a bit of a pause, off by 0. 11 this morning. Once again, after draghis potentially over the weekend, these markets did rally quite a bit on monday and tuesday. The cac 40 is off by 0. 1 . Pretty neat brazilians government shuffles going on in trans. We take a look at the bond markets, french bonds also very much attune to what is going on on the political front. I dont think weve got the french yields up but, remember, they fell to another low. 2. 37 . The tenyear germany, below that 1 level. All record lows on expectations made before qe comes in from the ecb. On the forex market, the dollar is not too far away from the 13month high. The dollar yen is back below that 104 level. Back below 104 . Euro dollar, close to a oneyear low. It is off that oneyear low that we hit earlier on this morning. It is all about draghi, isnt it inspect what is not about draghi these days, you have to wonder. And the sterling dollar is at. 9333 up by 0. 3 from the u. S. Dollar. Lets talk to chief economist from saxo bank steve jacobs. Steve, youve got a very interesting report out. You say that the u. S. Dollar has peaked at the trade and reserve currency. Why is that . First of all, i think its important to make clear that my big macro call for 2014 has been that germany will get very close to recession. We will trade the bund sets up 11 in the tenyear. So what ive now changed slightly is that for the balance of the year, the u. S. Interest rate will outperform bund rates inspect our perspective, that drives relatively the euro dollar higher. On top of this, on the dollar side of the equation, the latest data weve seen from treasury has had the single biggest negative data point ever in history. Minus 350 billion dollars leaving the u. S. I increasingly find that more and more Business People get skeptical used not only u. S. Support as their investment but using the u. S. Dollar as a transaction currency. And finally, on the eurozone, i think theres two things that makes the euro at risk of going higher from here, one being, of course, the overall positioning from 111. 3 the 9 to 1. 31 handle and most importantly, as we get near to this japanlike growth environment, we have seen not only the last five years, but potentially we see for the next five. You have to remember, the deflation currency outperforms inflation currencies. That is contractually why japan and the yen was stronger during the last 15 years because, of course, you increase purchasing power in the country where inflation is falling and you do the opposite. So a combination of debt positioning and the fact that the u. S. Has seen very concerning outflow as relatively to the rest of the world. Lets put your shortterm outlook for euro dollar aside for a moment. I want to come back here. The attractiveness will fall. Steve, it still has the cheapest, the most liquid bond market in the world. Why would anyone lose out with that . And its almost blasphemy to myself, being a formerly living in the u. S. And believing very much in the way u. S. Conduct businesses. But i think at a top down level, you have to realize that a number of countries and i think the damage done by the fine is not to be ignored. The fact that a local regulator in new york is able to take down almost a global bank like bnp is not sign of a strong system, its sign of a system thats run amuck. That is very concerning. Leave aside whatever there was to be given and blamed to be given is very, very concerning when some local person in new york almost can take down a global bank. Overall, ill say again, when i talk to Business People, they do not want to engage in the dollar. You see russia, you see china, and you see a number of countries who want to get away from using the dollar. But it is true, as you say, dollar still constitutes 60 of global research. It is almost still the main currency that people want to carry in their pocket. But having said that, even that is decreasing. Global research used to be at 17 less than five years ago. So, you know, its a tough call and its not a call im actually very fond of to make. But i think its at the bottom end and the conclusion here is that globalization works in favor of the dollar and i think this slight move towards antiglobalzation will work against the dollar. Even if this is not your favorite call in the world, which currencies could benefit from this . Is it the euro . Is it the japanese yen . Is it the renminbi even . So i think the euro is the only Capital Market which is big enough to take some of the flow that goes out of the u. S. And as global investors, we have the issue that the u. S. Capital market is roughly five to six times bigger than the second biggest Capital Market. So if you are a global investors, you will have to be in the u. S. Whether you want to be or not. But as the European Market expands itself, receive abc buying from the ecb. That sort of fly will create bigger and deeper pockets in terms of europe. Im skeptical about the ability of the currency like the renminbi to Gain International transaction. But certainly to a lot of the trade flow already between the middle east, between russia and china is happening in the renminbi. So its not to be noted at all. Thank you so much for your time and thank you so much for that bold call. But you say you have been vindicated in terms of your bund yield target below 1 . Sateen jacobson, saxo bank. Net profits came in at 1. 15 billion hong kong dollars. That is versus specations, i believe, of 736. 6 million hong kong dollars, so that looks to be better than expected. Chinas everbright says its expected that the group will continue to achieve high profitability in the future. Were also getting breaking data on uk groceriers. Uk groceriers fall 20 in the Second Quarter. It is a troublesome period for the incumbents. Theyre trying to gain market share and theyre doing that successfully during the market shares war. And the uk grocery market sales up 0. 8 in the 12 weeks to august 17th. That is a tenyear low according to cantar. Do send in your emails, your questions, your comments to worldwide cnbc. Com. We want to know what you make of todays and if you have any questions for the guests you see on this show. Lets get back to emerging markets, rally in brazilal and emerging stocks yesterday as investors eyed an increasing odds in a president ial challenge in brazil. Turkeys central bank used the key policy on hold when it announces its latest Rate Decision later. Lets get back. Its still isnt independent, is it . Well, thats a big question. We certainly know what the central bank should do. It is clear that it should stop throwing caution to the wind and it should keep rates certainly on hold. There is a significant chance that the central bank will once again cut. I suspect that if it cuts, it will be by 25 basis points. I certainly sense that the central bank is trying to push the envelope to see how much it can actually get away with. Rates in turkey, to be fair, were obviously jacked up to extremely high levels. One would expect them to be low. The Crucial Point here is that the markets are actually expecting a rate cut today, albeit a small one, and are penciling in barely 10 to 15 basis points in rate hikes over the next year. The markets are being overly sa sangwin about turkey. Turkey is treading on ice. The fundamentals of the turkish economy are bound. Monetary policy is a serious concern. But theres political continuity. Weve got the economy minutester, the finance minutester. That should ease some of the concern highlighted by some on it Credit Rating agencies, correct . Mr. Bonashed has been sidelined. The governing ak party has taken a fairley significant populist turn. And basically, this is not the ak party of old, which is a much more populist party. Mr. Dobatuglu will govern in the shadow. Mr. Ed duan is basically doubling as a Prime Minister. Hes basically a de facto premier. So there are some serious, serious concerns about draghi, the central bank being the most important one. I appreciate your time and your comments this morning. Makiko has the latest for us from tokyo. What are you focusing on today . Yes. Now, hitachi has taken up a new strategy to boost its Cloud Computing service by partnering up with its rival amazon. The firm that made its name in Consumer Electronics now has about 20 of its sales coming from the i. T. Sector. Hitachi mainly offers its services to large firms. It believes it will compliment amazon, whose strength lies in renting affordable Processing Power to clients. The decision to partner up with amazon came as more firms stock to the online giant which provides services at possibly the lowest rate in the world. Hitachi is hoping the tie up will allow it to hold on to existing customers and to bring on new clients, as well. The goal is to double the business to 5 billion next year which would boost them to the top place in the domestic market. The plan has its risk, however, as it may end up losing shares to amazon. Thats all from the nikkei. Back to you. Still coming up on this show, we go inside buckingham palish for a sneak peek of tonights episode of cnbc meets. Dont want to miss it. So ive experienced things that other people would never have an opportunity to experience and theyre perfectly normal to me. They may be different to what youve experienced. But your version of normal is different to my version of normal. Cute little guy, huh . This guy could take down your entire company. Stay with me. On thursday a hamster video goes online. On friday it goes viral a network choking phenomenon. Why do you care . Hes on the same cloud as your business. The more hits he gets, the slower your business may get. Do you want to share your cloud with a hamster . Today theres a new way to work. And itmade with ibm. There is some potentially good news for people who suffer from lifethreatening food allergies. Researchers at university of North Carolina have found a way to remove all the allergens in peanuts. Rough will i 2. 8 million americans are allergic to peanuts or about 1 of the population. Bestbuy shares disappointed ford Third Quarter in a row and the Company Expects the second half to get tough. The u. S. s largest retailer battles those shifting online. The traditional brick and Mortar Stores have been reeling under the rising threats from online stores. As Courtney Reagan finds out, there is a way to beat them. Traffic for most of us is a hassle. For retailers, tights holy grail. Just getting shoppers in the store has become a feat. While many retailers say a sale on their website is just as good, a sale in their stores is technically more valuable because the high overhead cost of operating a store fleet. Still, retailers are learning online and mobile presence must be as strong as the experience in store. The webb used to be feared by retail, but now its not only embraced, its depended on. According to comport, nearly three in four mobile shoppers searches resulted in consumers making a purchase in store. Retailers are looking to the webb and mobile to get consumers to shop in store. The good news for retailers and why we continue to see sales improve yeear over year is whats coming into the store is a high valued proposition. Somebody who has researched the information, has a good idea what they want to buy and then theyre coming to the stores. Best buys ceo tells me shoppers are browsing online first so their trips to the store are more targeted, which means tore traffic is going down, but converting trips to sales is going up. Target has seen huge growth rates for cartwheel. Its an app that offers discount and coupons for consumers on mobile devices or through facebook but requires instore purchasing. In order rooms acquisition of look is driving consumers to its stores. Shoppers are returning online purchase to look at Nordstrom Rack stores noting it is a tremendous driver for our rack stores. Jcpenney says its website sales growth comes in part from dotcom orders originating in the stores. With 30 of pennys Online Business pick up in store . The possibility of shoppers grabbing a couple more while while there increases. Courtney reagan, cnbc wsh Business News. Stitiffany co earnings are expected to pick up today. Sales could be hit by softness in the asian market. U. S. Sales are expected to pick up 6 to 8 . Europe is seen declining close to 4 while japans market could be hit the hardest with a 15 drop due to the april tax hike. The same analyst, however, with the introduction of the modern tiffany tee line. Coming up, we speak to oppenheimers analyst about his outperformance ratings for the stock coming up at 11 40 cet. Changing gears, his Royal Highness, the duke of york, is the third child open Queen Elizabeth ii duke of edinburgh. He has served in the royal navy, married and divorced sara the duchess of york and for ten years he embraced business as the uks special representative for International Trade and investment. A ynz exclusive reveelts why he gave up that position and why he believes commerce is essential. Business is the engine room of prosperity and growth. When you actually see what goes on in the factories and what theyre producing, when you see the intellectual innovation, when you see the dedication that Business People put into this, yes, there is a profit motive. But if we dont allow the profit motive, we wont have prosperity in our own country. The duke of york stepped down from the role of trade ambassador after much criticism of the uk press. Did you choose to step down from that role in 2011, i believe, and do you miss that role . No. I had a long series of discussions with a lot of people. One of the things that became evident to me was that actually this was too much focused on me as an individual and not on the uk and not on the range of people who can provide that level of support. And its become destabilized. And so what i was trying to create was the sort of circumstances where more members of the royal family were in a position to be able to be used, for want of a better word, by her majestys government in the pursuit of this. Now, weve succeed in that, but it required me to step down and get is out out of the way in order to be able to do it a new way. And i think the new way is as good as the old way. I have no objection to that. It was my suggestion, so im entirely happy with that. It was a really candid interview, wasnt it . With all the viewership that weve got around the world, basically, there is monarchy. What is the point of monarchy . The monarchys role in the 21st century, the family has to be one of the most famous families in the world. It attracts a lot of press, a lot of coverage, especially in the last few years, carolin, with the queen celebrations, with Prince William marrying Kate Middleton. Its never been so strong. There are so many tourists that come to london just to look at Buckingham Palace. I went behind the scene at the Buckingham Palace to see what it was like. Its like a mini village. I was going up back stairs, down, it was like entering through some extraordinary. And wab of course, the duke of york has a role in empowering the youth of today. That is what hes focused on now. Hes talked about stepping down from being the uk trade envow, which cause a lot of controversy. But hes spending a lot of time now on his own initiative to empower the youth today in the united kingdom. A lot of people talk about the monarchy, is it relevant . They have to go to Buckingham Palace and see the hordes of tourists and see that it is. You have to wonder if its relevant beyond tourism. Weve got william, george, harry, charles, of course. He is the second in line. The first one in line. But you pointed out before, that the duke of george is actually the queens favorite son. Why is that . Well, i always felt that. It was always when i was growing up, it was always reported that he was the favorite son. Of course he went to fight in the faulkland conflict. He came back a hero. And her majesty was there to greet him on the dock and theres a story about that. Its always been rumored that he is the favorite son. Whether thats true or not, well have to ask her majesty. But, of course, he has attracted a lot of press. So its good and bad. All right. Tonya, thank you so much for that. A fantastic and very inspiring interview. Thank you very much for that. You can catch the full interview with his Royal Highness tomorrow on cnbc. Send in your emails to worldwide cnbc. Com. Let us know your thoughts about the monarchy, weather its in the uk or other parts of the world. Mr. Abe has said raising sales tax in 1 increments, that certainly is an option. Japan could toss the implement of the sales tax in stages rather than a single hike. That is according to the outside advisers Prime Minister shinzo abe and this has been reported by reuters. Still to come on this show, snapchat turned down a 3 million takeover bid. Well talk about the app later on in the show. Here is a quick look at the u. S. Futures as we go to break. Well be back in a few. Xkc welcome to worldwide exchange. Im carolin roth. The dollar rallies as investors in europe eye further action from the ecb. But the former Central Bank President jeanclaude trichet says mario draghi must fulfill previous promises before launching something new. The 10 billion start up at silicone valley Venture Capital firm invests 20 million in snapchat, the messaging service with virtually no revenue. Keeping the canadians happy, Warren Buffett denies burger kidnappings deal with tim hortons is about tax invasion. Hes putting shareholders before patriotism according to speculation. Putin says ukraine must agree with rebels in the east of country and moscow will only support the Peace Process when it starts. Announcer youre watching worldwide exchange, bringing you Business News from around the globe. Good morning, everyone. Thank you so much for joining us here on the show. Looking at u. S. Future this morning, were expecting to see yet another higher start to the trading session this is after the s p 500 closed above that crucial 2000 level for the First Time Ever yesterday. This morning, it is seen at 1,999. 6. In fact, since the march lows of 2009, this index has rallied by a whooping 200 . Why were we higher yesterday . In part because we got the durable goods numbers, the highest since 2007. But the gains we saw yesterday, dow jones up by 0. 2 . The s p up by 2 points only. Lets have a look at these European Markets. And were seeing a bit of a patchy picture. The xetra dax is seeing a little bit of profit taking down by 0. 2 . After that fantastic rally that weve seep over the last two trading days, why havent we seen that . Draghi hinting at potentially more in the qe. The ftse mib is up by around 32 points. A lot open focus on some of the telcos today with that telefonica story out potentially making that bid for up to see 7 billion. In the currency markets, the dollar is surging to a 13month high against other currencies. Maybe were seeing some unwinding of that this morning. The euro is seeing a little bit of strength against the u. S. Dollar, up by 0. 1 up from those oneyear lows that we hit earlier on today. Once again, the euro coming under pressure from hope and expectations of more easing coming from the ecb and cable is at 1. 6567. Lets talk more about european bond yields. As you can see, theyre holding near record lows with the yield on frances tenyear falling to a staggering 11. 27 yesterday. And down from 1. 37 last week. And this amid expectation that the ecb will deliver further stimulus when it meets next week. Jpmorgan says it expects some policy changes to make telcos more attractive and the chances of qe are over 30 by the end of the year. But german finance minister says Mario Draghis comments appear to have have been, quote, overinterpreted. Earlier we spoke to the previous ecb president jeanclaude trichet who called on draghi to deliver on promises made already before he implements something new. It seems to me before having new republicry in place, rough to apply what you have already decided, which is very, very important, very significant, very substantial, and i hope will be delivered as soon as possible. And just seeing some flashes concerning the imf chief lagarde, actually, lagarde put under formal investigation for negligence in the french political investigation case. This is according to sources close to legarde. According to reuters, the imf chief has no plans to resign. Joining me now is pretty mcmillan. So the s p 500 closing above the 2,000 level. How important is this in terms of a psychological level . What were seeing is volumes up very, very low. There isnt a lot of conviction behind this. I think the lack of conviction is the problem here. What we saw earlier this year is we saw a run at 2000 and it didnt come off. Now were seeing a slow, hesitant run. And i think the question is if we can break convincingly above it once people come back from the beach next week, thats going to be very, very positive. If we cant, i think we may be looking at an adjustment period. What would the trigger be for us to stay comfortably above that 2000 level for the s p 500 . Would it be earnings, would it be a fairley dovish fed . Would it be easing of geopolitical events . What would it be . I think it would be the fed signaling in some way that, yes, we are going to continue looser for longer. Thats the interpretation that weve had. But im not convinced and i dont think the market is convinced, either. The other thing that would help is if the economy starts putting in some numbers in which case we say were going to hit our profit expectations. You mentioned some of the sectors that you want to be cautious of. Energy, consumer staples. Is that because theyve outperformed for the fist half of the year . Whats the story here . I think with energy, youre looking at a longer term secular i dont want to call it a bear market. If you look at oil, for example, youre looking at supply increase much faster than demand over time. Thats not positive. You have other things where supply is going to come online. Youre getting close to critical price points where some companies are going to have to start pumping to meet their budgets. In terms of the sectors that you want to be invested in, you want to be in sectors that are clearly exposed to the domestic economy. You know what im thinking. Of the first half of the year, the u. S. Economy hasnt groan at all. Thats a fact, isnt it. Why would you want to be exposed to the u. S. Economy which in many parts are extending on what the rest of the world does, too. Well, i think my first thing would be im looking more towards the future than the past. And if you look at the first half of the year, i would say the First Quarter youre right, we got hit hard. But not as hard as the statistics would suggest. The Second Quarter looks like were going from strength to strength. If you look at every single piece of the employment data, that is improving at an increasing rate. This is a bet on the recovery of the consumer, the recovery of employment, and i think thats exactly what were seeing. What we do need, brad, is wage gains. Were not necessarily seeing that in the last couple of weeks. Where are earnings going to come from and spending power . Thats exactly right. You put your finger right on the nub. If we dont see wage growth in the next 6 to 12 months, then we have to call into question the recovery but wage growth is typically a lagging indicator. If you look at the growth in wages of 80 of the working population, the nonsupervisory workers, its growing at an increasing rate. Youre seeing it step up and its stepping up over time. And were just getting the unemployment rates now to a break point where typically weve seen wage growth accelerate. So youre quite right. That is what has to happen. We need to look into this recovery is real. Thank you so much for that, appreciate it. Chief Investment Officer at commonwealth network. Lets take a look at todays other is to top stories. Looking to raise capital. Square looks to raise capital of 6 billion. Part coming from singapore sovereign wealth fund. Square was valued at 5 billion earlier this year following a stock sales for early investors and employees. Reports say cliner committed to invest 20 million in snapchat in may and at least one other is involve in the latest round of funding. If the deal goes through, snapchat would start up with valuations. And we want to hear from you on this. Is snapchat worth a 10 billion value agdz or disappear down the line . We want to know, do you use the messaging service . Daniel tweets, it is mostly used by teenagers with very limited purchasing power or they use it when they grow up . I doubt it. Tell us what you think, worldwide cnbc. Com, cnbcwex or direct to me carolincnbc. Tiffany cos earnings are expected to pick up. Sales in the Second Quarter could be hit by softness in the asian markets. According to Investment Bank oppenheimer, u. S. Sales are expected to pick up 6 to 8 . Europe is seen as declining close to 4 while japans market could be hardest hit with the decline of 15 . T a tax hike in april. The analysts see a bright spot at the Fashion Jewelry company with the introduction of the tline. Coming up, we speak to oppenheimers analyst about his outperform rating on the stock at 11 40 cet. And still coming up on worldwide exchange, taking a bite out of the tax bill. We ask whether Warren Buffett is cutting shareholders out of patriotism. This morning, after hitting the 2000 mark on the s p 500, next weeks ecb meeting for directions. Ukraines leader says he is seek ago truce with rebels in the east. AdVenture Capital, valuing it at 10 billion. And an update on the breaking news with Christine Legarde. She plans to appeal the decision to put her under formal investigation. Once again earlier on, just a couple minutes ago, really, the imf chief Christine Legarde haas has been put under formal investigation for negligence in the case when she was a minutester. Of course, were going to keep you updated on this story as we get more details. Its all about keeping the canadians happy. Warren buffett has defended his decision to help in burger item kings takeover of tim hortons. John, thank you so much for tale taking the time to speak to us this morning. It is all about tax, isnt it . Its not about keeping the canadians happy. Its not all about tax. What we have here is a substantial business dooel deal going on. Burger king is merging with tim hortons in canada. As a result of this memorier, there is a bit of tax timing going on and its all about where this group is going to be headquartered. Theyve chosen canada as this place for tax reasons. But why canada . As i understand, canada isnt necessarily the most attractive tax haven in the world. For that, youd have to go to switzerland, for example, or maybe not any more, but a couple of years ago. So canada is a very pettive standpoint. First and foremonths, ka flamedan Corporate Taxes are much less than american tanss. In america, our combined tax raise is 40 in the u. S. But the biggest point is about the way overseas profits are taxed with the canadian Parent Company versus a u. S. Parent company. In canada, overseas profit, theyre taxed overseas and then they can be repatrioted in canada tax free in most circumstances. That is very unlike the u. S. A u. S. Parented group, when they bring back their profit to the u. S. As a dividend, that dividend is subject to tax in the u. S. And at very high Corporate Tax rates. Therefore, this is all about the profits of this merge group is going to earn outside the u. S. , not the inside the u. S. They could realize in substantial tax savings down the road by choosing canada as a place to headquarter this group. But, jean, if anything, this is another wakeup call to the u. S. , isnt it, in terms of the Corporate Tax code. We know it is long overdue for an overhaul. I guess its not going to come before the elections, though, isnt . No, i think youre right. I think the american ves to look at two things. Foifrt all, is there Corporate Tax regime competitive . And their Corporate Tax rates are high, but the way they deal with overseas profits, and the way theyre brought back to the u. S. Is very different from most countries in the rest of the world. The united kingdom, for example, used to have a system similar to the american. I think the americans the need to look at reforming their system. In the shortterm, they may look at a quick fix by making their antiinversion legislation a bit tougher to get around. Don, i know youre a tax expert, but in terms of the reputational impact burger king might take from this, do you think people will be buying their burgers from wendys and mcdonalds and not berger king because of this . That will be an american question. I think everybody will stillby buying. Was the impact going to be in the u. S. Market and outside of that, its not really appear issue. Wells fargos ceo has warned they will not providing loans to people with lower credit scores. John tells the financial times, depositbacked agencies such as fannie mae were too quick to accuse banks of faulty underwriting on mortgager and later defaulted. Some says the risk should shift to insurance companies. A federal judge has rejected the u. S. Governments bid to perform a former bale youtd. That tlooer the sway for a tire. Still to come on this show, were inside Buckingham Palace, speaking exclusively in line to the fifth in line for the throne, Prince Andrew, about being part of the most famous monarchy in the world. Well leave you a view of our heat map. Higher by 0. 1 . Thank you daddy for defending our country. Thank you for your sacrifice and thank you for your bravery. Thank you colonel. Thank you daddy. Military families are uniquely thankful for many things, the legacy of usaa Auto Insurance can be one of them. If youre a current or former military member or their family, get an Auto Insurance quote and see why 92 of our members plan to stay for life. Welcome back to the show. The s p 500 has been up above that crucial 2000 level for the first time yesterday yesterday at close. The nasdaq seen higher by around 4. 3 points. The nasdaq up by 0. 34 yesterday. Overall, were seeing very, very low volumes in these markets. That tells you there isnt a lot of conviction behind the moves that were seeing. His Royal Highness, the duke of york known as Prince Andrew is no stranger to the pomp and ceremony of being a british royal. Hes a full time working member of arguably the worlds most famous family. Cnbc was sclus hely invited into Buckingham Palace. He was asked about what he thought about opening up the palace to various ceremonies. There are events that benefit charities or benefit organizations that take place here all the time. And they are just part of the routine. And the receptions that go on here recognize usually the people and organizations who have played a part in society and the its very important that those people and organizations are recognized. It must be extraordinary for the young people coming into the palace to meet yourself, her majes majesty. It must be incredible. It comes back ta your thing about normal again or my thing about normal. Its normal for you. Its my mother. How would you greet your mother . Exactly the same way i greet my mother. Yes, i want, there is huge excitement. And im led to believe most people the first conversation they have, they have no or never have any recollection of. Its a very good question, isnt it . How would you greet your mother. Aston ya joins us now, call her mother, mommy . Just mom. And i suppose for Prince Andrew, it could be mom, as well. Her majesty and Queen Elizabeth ii, what an extraordinary person she is. 80s hard to believe she could just be mother. Its given us here in the uk a major boost specifically with Kate Middleton coming on to the scene. What about beyond that . What about beyond tourism . I do feel it is relevant. It has become incredibly popular over the last several years. Theres the argument about taxpayers money, funding them and funding a particular lifestyle. But theres more at scale besides tourism. The work they do for charities and for initiatives is hugely important. The duke of york himself has an enormous amount of initiatives that he pushes, that he works on every day to help empower the youth of today. I traveled with him to schools, to colleges, where he talked to young people that wouldnt otherwise have opportunities. And hes given them those opportunities. From that perspective, it is relevant. Of course we have a lot of european mon the arckies, but they dont seem to be as popular as the british one. Thank you very much for that. You can catch the full interview with his Royal Highness, the duke of york. Still to come on the show, picture a messaging app snapchat has a huge 10 billion valuation. Well give you all the details after this short break. This is a burrito made with chocolate, soybeans, and apricots. What kind of chef comes up with this . A chef working with ibm watson, on the cloud. Ingredients are just data. Watson turns big data into new ideas. And not just for food. Watson is working with doctors and bankers to help transform their industries. Today theres a new way to work. And its made with ibm. Welcome to worldwide exchange. Im carolin roth and these are your headlines from around the world. The s p continues its march higher. And the euro slumps as the market sets on further stim use husband from the ecb. A silicone valley venture firm invests 20 billion in snapchat, a messaging service with virtually no revenue. Just keeping the canadians happy, Warren Buffett denies burger kings deal with tim horton is about tax invasion. Amid increasing criticism, he is shareholders before patriotism. Not our business, russian president Vladimir Putin says ukraine must agree to a ceasefire in the country and moscow will only support the Peace Process when it starts. Good morning, everyone. It is another busy trading day for you and once again were expect ago higher start to the trading session. The dow, s p 500 and the nasdaq all seem modestly higher. For the First Time Ever closing above that crucial 2,000 level, and in fact since march 2009, weve seen an increase of the whooping 200 . Good job as you call that at the bottom. The ftse 100 is up by less than 6 points. The xetra dax close to the flat line, off the session lows from the cac 40 is also just flat, 4,392. Again, maybe a little bit of profit taking after the seller gains in the last few trading sessions. This is on the back of more session from the q he. How do you make money from these markets which is still characterized by summer trading at low volume . Here is what some of the experts have been telling us this morning. I think its important to make clear that my big macro call for 2014 has been that germany will get very close to recession and we will trade the bunds up 1 in the tenyear. So what ive now changed slightly in my outlook is for the balance of the year, u. S. Interest rates to outperform bund rates. In that respect, of course, that drives relatively the euro dollar higher. Tackedally, we have a lot of flattening happening. But the idea is yields in europe are already very, very low. But it will underpin assets very much. One thing qe can do is push assets higher. Snapchat is one of the more popular social media apps today with more than 1 million monthly users. Its proving to be popular among investors. Is it really worth 10 billion . Seema mody is at cnbc headquarters. A big news item, snapchat, a free mobile apps that allows you to send photos to friends and then disappear. Now about 700 million snaps are sent each day. That growth may be attractive to investors. Cliner perkins is investing in snap chat at a valuation close to 10 million. At least one other strategic investor has committed to this deal of rounding. Snapchats value has soared from about 2 billion a year despite no clear business model. Its specd to make its first foret into advertising later this year. A new Service Called snapchat discovery would let users read additionally editions of newspapers and magazines. Report say alibaba considered a pass on a chance to invest in russias dsc global invested earlier this year. Cliner perkins was a daily investor, but has been criticized for missing the boat on media and messaging apps earlier this year. That would value at 7 billion. The company led by twitter cofounder jack dorsey allows to turn any tablet or mobile phone into a credit card reader. Cliner perkins, lakoia capital and an interesting time for Tech Companies in silicone valley. I have to ask, do you use snapchat . You know what . I dont. Maybe its because im not a teenager any more. Ive never used et. But i was late to the game in terms of candy crush and twitter, so maik maybe im not the best indicator. You use it, right . I do use it. And i have to say, once you start it, its a little addictive, kind of like candy crash. Maybe i dont even want to get into it, then. Lets move on, best buy shares disappointed for the Third Quarter in a row and the Company Expects theyre going to have to get tough. The Largest Electronics consumer, the tra brick mortar store has been rising. But as Courtney Reagan finds out, there is a way to beat that. Traffic. For most of us, its a hassle. For retailers, its the holy grail. Just getting shoppers in the store has become a feat. While many say a sale on their website is just as good, a sale in their stores is technically more valuable. The higher overhead cost of operating the store fleet. Still, retailers are learning online and mobile presence must be as strong as the experience in store. The question used to be feared by retail, but now its not only embraced, its depended on. According to comport, nearly three and four mobile shopping searches resulted in consumers making a profit in store. Retailers are looking for webb and mobile to get consumers shop in store. The good news for retailers and why we continue to see sales improve year over year is that whats coming into the store sa high value proposition. Somebody who has researched the information, has a good idea what they want to boy and then theyre coming to the stores to execute the purchase. Best buys ceo tells me shoppers are browsing online first so their trips to the store are more targeted, which means store traffic is going down. But converting trips to sales is going up. Target has seen huge growth rates. Its app offers discounts and coupons through mobile devices but requires online purchasing. The Department Store says shoppers are returning Online Purchases look items to nordstroms rack stores noting the look is a tremendous driver for our traffic stores. Jcpenneys quotes many of these sales being made in store. While ecommerce browsing is driving consumers to stores, promotions remain tough. When it comes to driving traffic. Macys cfo karen hogey recently acknowledged the store sees less traffic unless offering promotions. Courtney reagan, cnbc, Business News. And stale with the industry, coming up on the show, could tiffanys new line bring a sparkle back to the bread . We preview the jewelrymakers results after the break. Dont go away. Into these are your headlines after hitting the 2000 mark on the s p 500, investors eye next the ecb meeting for direction. No break through with russia, but ukraines leader says he is seeking a truce with rebels in the east. An adverse rur capital firm picks up a stake in snapchat, valuing it at 10 billion. A french court has put Christina Legarde under investigation for corruption. Legarde says she will appeal the Court Decision and has no intention to resign. Meantime, allergan has scheduled a special Shareholders Meeting for october 18th. Allergan is asking to expedite an injunction barring valeant from exercising rights with any shares they might have unlawfully required. That would effectively prevent them from any shares at any shareholder meeting. And its all about keeping the canadians happy. Warren buffett has defended his decision to help burger king take over tim hortons and invisits it has to do with the canadians size and not tax inversion. Meantime, tiffany cos earnings are expected to pick up slightly from last year. But sales could be hit by softness in the asian markets. Brian, thank you so much for joining us. Consensus for eps of 85 cents, youre expecting 86. What can we expect as far as the regions are concerned . Well, we spec to see some weakness in asia. The u. S. Should be decent. I think europe is going to be decent. So basically, more of the same from tiffany. Kind of a mixed bag, if you will. Youre expecting a 15 decline in japan. Obviously, this is because of the sales tax increase. We saw a whooping 30 increase in the quarter prior. Is the japan story and the asia story overall, even despite this crackdown in chinas luxury spending, is it still intact for the likes of tiffany . I think it is. I think the real key point here, and tiffany talks about this a lot, is tiffany really serves a different consumer in china or in asia. Its more of that up and coming wealthy class as opposed to the uber wealthy. I think tiffany is well positioned here in asia. Youve got appear outperform rating on the stock. 15 buys, 14 holds. Its shares very close to those record highs. Where would that future outperformance come from . Ive go a 112 price target. In my view, tiffany has a lot going for it right here. The Company Recently launched a new product line. Worldwide, despite some of the issues we just talked about, i think worldwide demand trends are quite good. The company is controlling costs well, managing its margins well. To an your question, i think youre going to get better Earnings Growth than people think over the next couple of quarters. And weve got pictures of that view. How much of a game changer is that . I dont know if id use the term game changer. I think what this does is its definitely a fresh look for tiffany, which is encouraging because there aent been a new style in a while. So i worked this through our clients last week. I think it could be additive to sales here over the next few quarters. Gaining changer maybe longterm. A lot of retailers have recently changed their Vantage Point and tiffany has a new ceo and cfo. This transition, do you think it would be a seamless one or do you think it adds certain elements to the stock . I think it should be seamless. And i think whats encouraging is theres new blood coming to tiffanys, some new perspective. All right, brian, i appreciate your time this morning. The s p 500 closing above 2000 for the first time. How much more room does it have to run . Well tell you everything you need to know before todays opening bell after the short break. Good morning, everyone. Lets show you what European Markets are into. Were a couple of hours into the trading session and looking at a fairley flat market. Were seeing some underperformance in germany and france after the poor performance in the last two trading sessions on the back of those comments from mario draghi about potential q he. The ftse 100 is up to the flat line and the ftse mib is up almost 25 . Telecom italian up on reports that it could be writing a 7 billion bit from the wte assets in brazil. Lets have a look at u. S. Futures, taking fair value into account. Advancing once again after the s ps 500 hit another milestone yesterday. And for the first time, it did close above that 2000 level after it made a run of that on monday, didnt quite manage to close above that level on monday. But yesterday, yes, we did reach that milestone. Its worth noting that since the lows of march 2009, this index has rallied a whooping 200 . Good for you, if you called the bombach in march 2009. Lets have a look at the bond markets, ja p morgan says it expects some policy changes to make telcos more attractive. And the chances of qe are over 30 by the end of the year. But the german finance minister says Mario Draghis comments over fiscal austerity have been overinterpr overinterpreted. Trichet called on draghi to deliver on what he has promised already before implementing any new measures. Take a listen. It seems to me that before having new weaponry in place, that you have to apply what you have already decided, which is very, very important, very significant, very substantial, and i hope will be delivered as soon as possible. All right. We are now joined by our next guest, neal curry is head of technical strategy at bank of America Merrill lynch. You think the s p 500 has further upside. How much . We think were probably going to get a push up to the 2020, 2030 area over the next couple of weeks. Probably in september, thereabouts, we could expand up to the 2050, 2060 zone. At what point are we going to be hitting another resist yapt levels . 2035, could it be higher than that . Theres a lot of stuff that comes in around the 20, 2035 zone. We are effectively at all new highs on the ftse 2,000. Were looking at a series of projection levels where historically the market, given the pace of the current trend should start to see signs of stalling. This is when the markets continue to rally despite the geopolitical risks out there. Historically, you tend to see a pick up in volatility. Investors tend to historically become a little bit more anxious as you move from summer into the fall. If you look at the seasonality of, say, Global Equity markets, the month of september is one that is often considered consistent with the jittery market. So historically, it would not be a surprise at all to see a pick up in volatility. But i think for that to happen, youre going to have to see the u. S. Rates market start to turn higher in yield. It certainly has been. You say in your notes the u. S. Dollar is at near term correction against the euro, against the pound and against the yen. But you say any weakness in the dollar should be faded. Why are you such a dollar bull . Well, i think first and foremost, the strength of the dollar is quite impressive. Its a whole host of g10 currencies. And thats also happening in an environment of, as you pointed out, stable to lower treasury yields, which historically youve seen the dollar rally on lots of occasions. But the fact that it is rallying where people are still struggling to make reason of the why it is so strong. In addition to the larger trend, is usual one that is consistent with a move that should ultimately persist. It is looking stressed on a variety of technical indicators from which you can see a bit of a consolidation or a bounce. It is 2014 most, when is that . Its basically the october contract over, say, the next couple of weeks. Weve been surprised by wti or frankly, for that matter, oil. Crude oil was extraordinarily well bid. In fact, if you looked at present and started to brock the out from an almost threeyear range trade. That breakout would be strong lipped. Im still given the state of that trend, we think over the course of the next couple of weeks, wti should see a push back to its january lows. Before we let you go, give us your best trade of the day. What do you like . What do you not like right now . I tend not to focus in on a lot of interday trading activity. Over the course of the next couple of days, we should see a bit of a consolidation or a pullback in the u. S. Dollar. But that pullback and conso consolidation should be seen as a buying opportunity. We think that is quite a strong trend and is a trend that should persist for some time. All right. Thank you so much for that, mcneal curry, head of technical global strategy at bank of America Merrill lynch. Weve been talk talking about a 20 Million Investment in snapshot by cliner perkins which values the startup close to 20. And at least one other strategic investor is involved in the latest round of funding. Is snapchat worth the 10 billion valuation or could this app disappear down the line . Daniel tweets, the app is mostly used by teenagers with very limited purchasing power. Will they use it whether they grow up . I doubt it, he says. Get in touch with us at wofrldwide cnbc. Com. krns we can see. Thats it for todays show. I am carolin roth. I will leave you with a look at u. S. Futures ahead of the open. Maybe another record day for the s p. Well see you tomorrow. [ mal] its one of the most Amazing Things we build and it doesnt even fly. We build it in classrooms and exhibit halls, mentoring tomorrows innovators. We build it raising roofs, preserving habitats and serving americas veterans. Every day, thousands of boeing volunteers help make their communities the best they can be. Building Something Better for all of us. The s p 500 closed above 2,000 for the first time. But just barely. Developing, russian president Vladimir Putin and ukraines president pet rapport shenco meet and talk about a ceasefire plan, but no agreement yet. And snapchat is worth how much . The app has an eye popping valuation after another high profile investment that were going to talk to you about. Its wednesday, august 27th. Where did the summer go inspect 2014. Squawk box begins right now. Good morning and welcome to squawk box right here on cnbc. Im Andrew Ross Sorkin along with joe kernen and Michelle Caruso cabrera. Apple is expected to unveil the iphone 6 coming on september e9d. Now theres a new report that the ipad could be getting, well, bigger. And were going to talk a lot about that in just a couple of moments. But first, lets get you caught up on the top stories of the morning. The biggest, of course, the s p 500 setting a record close for the 30th time this year. The index now up nearly 200 . Its from its 2009 bottom. Consumer discretionary stocks, they have been the best performer since then. Check out this list of best performers and their return since march