tesco as the grocery giant parachutes in its new ceo two months early. the shareholders are not convinced, sending shares lower for a second day. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. and we're just going to bring you the eurozone market pmi data that is just breaking as we speak. the composite pmi number has come in for august at 52.5. it has been forecast to be 52.4. >> let me just jump in here. what we're looking at is the september number. if you see that one, that's 52.3. >> and they're coming for the manufacturing number for september to come in at 50.7, having been forecast at 50.5. looking there at the ur euro/dollar, which is flat for the day on the news. the services pmi has come in at 5371, having been forecast at 53.0. so in general, the eurozone pmi numbers coming in pretty much as expected. fractionally ahead. chief economist at market, chris, largely coming in with line with expectations? >> generally. although there are some really negative signs when you think of the detail and the markets focusing now on the german services sector which performance better than expected and that helps support this number here. the eurozone pmi is trading at a level 0.3% growth at best. this is a meager performance. so there's nothing to rejoice here. it's always moving in the wrong direction, slowly etching down again. when you vel of into those numbers, you have german factory orders falling for the first time since june last year. if the services are not expanding, that's not coming down. so the euphoria is going to creep short lived, unless we get some bounce back in these numbers. also concern this. the german services sector we saw coming down which fits into that factory data. so while markets may be slightly -- that the numbers weren't as good as expected, we think the prospects further downward momentum rather than looking up. >> i think it's worth looking at the prices. firms in september cutting prices to the 30th month in a row. if you dig down into the german numbers, we're seeing some inflationary pressures. that tells you that once again, the eurozone monetary policy, that is good for the eurozone, but not for germany. >> it does look like it's in germany and the domestic economy in germany is elsewhere and will pick up again. sometimes our only winning services at the moment are aggressively cutting prices to win new customers and retain existing ones. that's nos as sustainable in ters terms of markets. chinese activity picks up unexpectedly with the hsbc market rising to 50.5 in august and a final reading of 50.2. how do we make sense of the data coming out of china? this manufacturing data better than expected. >> it's better than expected in 2 sense that it's not too awful, really. it's hovering around the 50 level. given the stimulus that we have so far this year, looking ahead and seeing thats prospect haedz, their workforce numbers at a rate that would not see the height of the financial crisis until 2008, 2009. that's the key take away for those numbers today. is it a ray of light n new export numbers, the new equipment, 3.9, a decent reading. the last few months of additional data we saw on average, just digging into additional numbers. the september number suggests we will see some improvement in china's trade position and that should boost the economy. >> sorry to jump in here, but the hsbc number really the small to medium sized enterprise is doing and that doesn't give us a full extent of the property down turn. we have to wait for the official number. >> well, no. and the hsbc number, which is compiled by markets, is a -- is correct according to the economy. there's more medium and large companies in the right portion of that survey tunnel. where the distinction comes and where people see some discrepancy with the number is that that one has that additionally been focused on the state owned enterprises. so the market is structured, but the mortgage was a larger one. there is a slight difference. it reflects how we market that. >> thanks for that clarification. the u.s. military says it has taken action against syria to -- an imminent attack. last night, since then there have been other developments. hadley gamble joins us now with more on this story. can you give us the latest on what we know? >> a lot of developments coming out now. they have taken action in terms of air strikes. we also know that, interestingly, a syrian plane was shot down in israeli air space just about a half an hour ago, it was 21 aircrafts and, given what we've seen in terms of the usair strikes, it wouldn't be farfetched to imagine that the syrian airport would be scrambling at this point, anyway. i hesitate to say this was some sort of action on the part of the syrians. u.s. central command has come out and said not only will they working to take out isis targets in syria, but they were attempt to go take out al qaeda-related elements, what they describe as an imminent threat to the united states. the response from isi, quite interesting, who they're really going after, the saudis, becauses they're saying the saudis helped them. they're going after the saudi royal family. this is a chance the gulf arabs took when they decided to take action in terms of air strikes. that was a pretty bold move on their part. what we've seen over the last several decades, they're against extremists, they're against terrorists, but they've been -- to go out and do anything in terms of overt action. it doesn't play as well at home. >> have they declared air strike necessary syria, the elevation of the action, they said air strikes would be able to contain the issue, but they won't be able to feed the issue. that's same old question, do you think we need more? >> it's coming from tony blair, and despite your political feelings, he's not the only one who says this. essentially what you're going to have to see are people on the ground. who are those people going to be? at this point, it's the syrian opposition. the jordanians are hosting them, the saudis are training them. we're going to train them, as well. but in the meantime, i think we're going to see more air strikes. but it is a worry. >> absolutely. and i suppose, as well, if we look at that whether we'll see more action from the partners in the region, as well. >> and we have to keep in mind, united nations meeting in kicking off. we have leaders in saudi arabia, it gives people the opportunity to clear the air. >> what is really interesting, the lines of communication have never been completely closed, but they're more open than they have been. >> hadley, thanks for your time. >> let's have a look at the markets. we're seeing a sea of red. the stoxx europe 600 off by 1%. we had the better than expected hsbc numbers out of china. we are shrugging those off and we're focusing on the ghee quo political risk in the middle east. the cac 40 off by north of 1% and the ftse 100 also seeing pretty partnership tuesday kinds of more than 1%. tesco again under pressure. i want to talk about this crackdown of inversion by the u.s. treasury. shire and astrazeneca shares are sharply lower. the steps could jeopardize potential takeover deals for the firms at the end of pfizer. astrazeneca, 5%. shire down by 6.5%. the announcement weighing on london based smith & nephew. so i want to remind you, uk based tate and lyle at the bottom of the stoxx 600 after issuing a profit warning. shares off by 17%. the group said increased competition and disruption to its supply chain would hit annual profits. the story for us, the group revised its outlook for 2014. risk reversion upwards to 1.7 billion euros. the company's ceo says he can't rule out sanctions having a negative effect on this with russia. he verified the profit warning is not related to russia and the process. and still it's bucking the trend, it's up by 3%. this after the company said it will split its company into two units. the dutch group said its sliding business will stand alone while consumer and dealt care divisions will move to 15.4 euro business. yaya international, confirmed merger talks with cf industries. yra has a market cap of 6.7 billion dollars. let's have a look at the bond markets. the ten-year bund yield, back below that 11 is% level. really, there is a flight to safety as a result of the growth concerns and the geopolitical risks out there. the ten-year treasury yields, 2.54%. way off the three-month highs that we saw last week. that attracted a lot of buyers. quickly in the currency space, it seems as though the dollar rally is taking a little bit of a pause against the japanese yen, that is, for example. back below that 900 level. euro/dollar, up by 0.2% because we're seeing some dollar weakness coming through. sterling still under pressure, 1.6318. it's worth noting some of the asian currencies have bounced back against the u.s. dollar. that is seeing through chinese numbers. sri. >> thanks for that, carolin. first of all, leading off one of your top stories, the coalition air strikes hit isis targets in syria have curbed. that is why you are seeing most of the asian indices in negative territory. let me talk to you about the pmi, the flash estimates for the month of september. in my opinion, it was a bit of a -- different commentators are drawing different conclusions. it was better than expected, and brings forward some stabilization in the broader economy. look at the devil in the details. unemployment is at a 5 1/2 year low. but that tells me there are still very real underlying threats within the chinese economy. one of the reasons why the hang seng is on the defensive and the shanghai composite is up by 1%. strangely enough, the asx 200 is up by 1%. one of the outperformers today despite what we saw in the iron ore price. the fresh five-year low. >> we're going to bring you some flashes. you can see on the bottom of your screen there, that man, which is the truck arm of volkswagen, has said that it expects truck markets in russia to fall 20% to 25% for western suppliers. it's down fractionally today on -- in normal trading. expect more about russian sanctions a bit later. another headline, the eu anti-trust chief says going the must improve its settlement offer or face formal charges. alminia says there are more problems with google than with microsoft. ilmunia says it rejects turning into this is a political data. and we're to be seeing a deal with regards to google within the next two months. coming up in the show, global markets in the red, but one of wall street's biggest bill of health is why the s&p will end the year as 2230. that's in around 45 minutes. . also details as jimmy chu confirms a new ipo. and the uk opposition party says it has a plan coming up, we go to manchester. this is a burrito made with chocolate, soybeans, and apricots. what kind of chef comes up with this? a chef working 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[ male announcer ] ship a pak via fedex express saver® for as low as $7.50. tesco cut its profit outlook on admission of an accounting error. allen stewart will now immediately start his new role as cfo at tesco pep really has his work cut out for him. what is the trend to buy and restore that credibility at tesco? >> there's so much here. the chief executive joined merely weeks ago. it's going to be huge and their predecessors will have to be hanging around and be questioned about just what went wrong with what seems to be serious difficulties at the uk business. so we've had a little bit more clarity today and just what looks like might have happened. the uk business looks as though there's the joint trading for commercial activities. some of which play a little bit in advance of tesco to promote their products and which tuesdayco will -- some payments, too. it looks as though that might oversee it and four executives, really, really top executives the uk market team had been standard as a result of that. this is all -- we don't want to kind of jump ahead to block the investigation. but, of course, hopefully within the next couple of months there will be more on what went wrong. there's a number of questions out there that shareholders are asking. he was responsible for bringing in clark. sometimes with governance. this is a board which has two people on it who used to be chief financial officers of ftse 100 companies. how could they not spot this somewhere in the economy? why are profit margins still -- we know our sales aren't doing as well as they should be. >> catherine, there has been some speculation on the street whether tesco would split up its assets. a strategy that would be unthink about as much as a couple months ago. but given the slowdown, what are you hearing from your sources? is that really on the cards or on the table? >> there seems to be a lot of different things right there in the city and quite a lot of it seems to be coming from people who would make quite a lot of money if tesco were to be sold off and if they were hired to do it. there's always been some speculation that tesco might spin off some property assets, tesco bank might be totally spun off from the main company. but it really remains to be seen. one good thing for tesco is with this new management team, they can come in with whatever they want. there's a broom approach here and the previous management team seems to have not done particularly well. they have absolute free reign to bring in a new strategy. >> for now, thanks for your time. >> the leader of britain's opposition party, ed milliband will be giving a speech today. >> he will want to strike and tone and start by saying it's better to lead great britain and the working people of great britain than labor. he's going to point to things like housing, wages, he's going to point to apprenticeship. he's going to talk about all these things that are important to the labor hot line. one of the key policies, of course, is the -- this is about making britain fair. expected only to raise $2 billion pounds. that he says will be used for the nhs. remember, the nhs costs $113 billion. so it's really the tone that labor wants to strike. we had two days of business friendly messages from ed borg and from the shadow business secretary truka moona talking about a closer relationship with business. business opportunity. you had the chancellor talking about really being tough on the deficit. but today it's going to be about getting that message to the people that are streaming in behind me. you can see the conference center filling up with that all-important speech. essentially, will, we are in the countdown process. seven months ago, labor ahead on the polls. ed milliband himself, lagging david cameron's mark pointedly. >> german chancellor angela merkel will today address the german industry bdi. we'll bring you that key note speech when it starts in around 15 memberships' time. and tensions between the two sides. the french mm said he wanted to tell the germans paris would implement economic reform, while the german chancellor praised france's and bishop's reform program. them to avoid oversimplification votes. let me just say that we still wanted to have a little bit of fun with it. we were wondering what was served at the lunch? what are the dishes that might serve the two european giants. there you go. on the left, you've got the french flag. you've got exit growth. fiscal fondue. coq un vells. >> take up is low as with tltro, maybe that means there's more for us. the german menu, savingssuppe, that doesn't sound tasty. >> that is worth. >> sounds very, very german. although i understand. >> so do you think there's a lot of opportunity? >> and, you know, austerity strudel to round things off. now, blockbuster sales for apple's new iphone, the company sold more than 10 million of its iphone 6 and 6 plus in the first weekend of release. a new report up from 9 million from its last release. tim cook could have sold even more phones if supply was available. apple's biggest phones are a run away success. could one kill another? will the iphone 6 of kill the popularity of skinny jeans? the bigger phones might not fit in slim pockets. if you want to join the conversation on "worldwide exchange," [email protected] or via twitter, @cnbcwex. what do you think? >> i think this begs the question whether cargo pants will make the comeback. >> i'm not necessarily the trend setter, but i thought skinny jeans were out anyway. >> coming from new york, i think they're still popular. are they? >> how about whether the iphone watches can become popular enough for people to drop the fashion trend. still to come on the show, an interview with tesco ceo and the energy stocks you should be eyeing for your portfolio. stay with us on "worldwide exchange." >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. european markets trade lower as the u.s. launches the first air strikes in syria. washington says it's imminent attacks. >> shares in astrazeneca, shire and smith & nephew head lower as the united states takes action to curb inversion deals. manufacturing in the eurozone comes in weaker than expected. and more troubleshooting at tesco as the grocery giant bring in its new cfo, allen stewart, two months early. shareholders are not convinced, sending shares lower for a second day. the ftse 100 off by 1%. a couple factors, struggling despite better than expected chinese pmi. the focus is on growth impetus and the worries about what's happening in the middle east. we've got some public finances data for the uk. >> we do. it's coming through august public sector net debt, exiting 1.4 trillion. and the net cash requirement was 1.5 billion. that's versus 4.4 billion. net borrowing came in at 10.8 billion versus 10.1 billion the year before that. >> and it's very worrying to see that public finances have deteriorated further because we've had a pretty weak start to the year. that's certainly a bit on of a concern, a bit of a headache for uk finance minister mr. osbourn. let's have a look at how sterling/dollar is reacting. it is off the lows, but down by 0.2%. let's stay with the currency webs because we're seeing the dollar with a bit of a pause after seeing that recent rally. it's been higher phenomenon ten consecutive weeks. euro slshl dollar, 1.2873. modestly higher even though we have eurozone pmis morae or les in line with expectations. total continues to is he sell off non core assets in the business stream line. >> the objective is to have both 25 billion cap ex. with $25 billion cap ex we can basically try to gain the decline. so out of the decline, sending about $15 billion. in addition to the -- you had $5 billion to slightly increase your predictions by, let's say, 1% to 2%. so this is 15 to 20 and then you have a $5 billion product. >> but it's all relative. if you look at the energy landscape today, it's getting harder and harder to extract energy, in particular conventional oils. so surely you need to be investing more today, not less. >> if you had a vast operation in that position we made, we even, if our expiration was not a great success, we have been able to to acquisition to discover biorealm to add the portfolio. this is, for instance, in italian, in brazil, and to the portfolio. what is important is that we keep our expertise namely in lmg in shore so that people making the discovery, being able to -- because it doesn't have to know all point and things about total thanks to our reputation of being a good operator. >> you mentioned expiration there. would you say that area has been a failure? >> i would say that over the past three years by the latest. where we make the market aware of the conclusion, it's nature for me to make any comments as this staple. >> and we're joined now by charles. it's a broad trend across all the majors, cutting cap cap ex, focusing on discipline. do you think that's going to we good for shareholders in the short to memory yum term but bad in the long-term? >> the major oil companies have spent the last several years chasing growth. this has meant the returns really suffered. this is unsustainable. the new focus we have today of free cash flow, of improves investment efficiency, it's very good for investors. we're focusing back on this group of unloved companies. it's not necessarily good for all investors, because the offshore drillers at the moment are suffering significantly because cost is coming out of the system. that is good for consumers. but, of course, this is a knock on impact here. production will suffer. so we think production growth will be down by 40% potentially due to these cuts. so that is real significant tightening in the market going forward. >> the oil price so far has been pretty -- over the summer despite a lot of headwinds. further out, do you think the oil price is going to rise? >> i think there's a complete come place eptsy around the oil price at the moment, which is fueled by the shale we've seen in north america. the sustainability of that is questionable. there's only so much of this unconventional oil that you can extract. lows in natural gas, but not so much oil. yes, we have a problem going forward with tightening oil prices. at the moment, we can see several signs for this market tightening up. >> sorry to interrupt here. you're looking at a live short from the german industrial bodies conference where angela merkel is delivering a speech in german. we will bring you interesting comments. this is on the back of the meeting in which the french prime minister made comments saying saying what i came to say to the german people -- this is obviously about fiscal discipline with france not playing by the rules that the eurozone have set. now back to oil and total. we spoke to the ceo of total on how sanctions on russia have affected his business. let's listen to what he had to say. we are eventually trying to crystallize -- so that we can attract other lenders like that of the chinese or the russians. >> i have to say as far as what i can see today, that russia and china are close together. >> and charles wall is still with us. do you think the west might live to regret sanctions they're imposing on russia? well, something had to be done. frankly, the european union and the u.s. are in a very different place here. we can see vast volumes of natural gas over supply of energy in north america. and then in europe, of course, we're competing directly with asia. so this trend that you've identified there with that question after china getting closer to russia is in direct competition. this means certainly wind and fuel prices will rise in the future in europe. >> with the u.s. making a big push into fracking, some executives say the u.s. is the place to be if you're in the oil and gas sector. which companies in your coverage do you think are well positioned to benefit from their exposure in the u.s.? >> i would agree with that. at the moment, the growth in production somg out of the u.s., the focus of oil fields is for the service site is in the u.s. so we have a very strong representation of those companies. we think there will be further consolidation in that space, as well. another catalyst to perform. you have to balance that within your portfolio, though, because on the of these companies are overpriced. in reality, we don't think that the shale boom lasting out of this decade. so you'll see by 2018, 2019, this growth in shale oil plateauing and thereafter, of course, the u.s. focus will be back international and we'll have a further consolidation. so everyone retrenched to home, they will be going again. >> charles, you say you like the space. it's a difficult one to make money in. let's give credit where credit is due. you've outperformed domestic global energy. why did you see that outperformance? what was your winning that -- >> well, we are a global fund. i think that's incredibly important. because the ftse oil & gas is very focused in these major oil companies. we're able to go and find growth opportunities, value opportunities, globally. so we have great performance maybe as far afield, we're saying very much in north america, in canada. that's really where value comes for our fund. >> charles, thank you very much for your time today. appreciate it. and i want to get to some breaking news. we've got the cantor data as far as the super market space in the uk. tesco's uk grocery market share is 28.8%. tesco sales down 4.5% in the 12 weeks to september 4th. that is according to the world panel. now, this is, of course, ahead of the accounting scandal that has erupted at tesco over the weekend. and we're seeing this squeeze in the middle for those super markets which are positioned in the middle. they're driving market share at the expense of the incumbent, asset sales of 0.8%. sainsbury down 1.8%. morrison is down 1.3 the%. and the overall grocery market growth slowing to a new record low of 0.3%, the lowest level since when the market data was first compelled in 1993 as price innation falls to zero. that makes it even more difficult for the tescos and the sainsburys to deal with the competition from the low-cost companies. still to come on the show, if you think most people agree it's key for corporates to pay their fair share of tax, you would be wrong. in china, only 55% think it's a big deal and in russia it's even lower. your customers, our financing. your aspirations, our analytics. your goals, our technology. introducing synchrony financial, bringing new meaning to the word partnership. banking. loyalty. analytics. synchrony financial. enagage with us. you're looking at angela merkel addressing the german conference in berlin. she's been speaking at length about where german competitiveness is. annette, what stands out to you? >> it's very interesting that the calls from the german industry on the german government, i.e., angela merkel to spend more on infrastructure investment were not really addressed by angela merkel herself. she's more or less referring to growth potential from a potential translick free trade agreement, which is, of course, also -- for growth but not in the short-term. so what is interesting is even the german industry is calling for more investment because they depend on a good infrastructure in germany. there are research notes from very renowned research institutes here in germany that there's an investment gap of $1 trillion euro, but it comes to infrastructure. that is in the west of germany, very interesting, because the use of germany at the reunification was very well modernize. broadband investment in rural areas, the german economy is very -- when it comes to the middle stand. both mid sized companies who are very often hidden in their very specific niche market. but they're very often considered in rural areas and they need a very good broadband. we need a lot of investment in that area and now the industry is calling on the government to get the legal framework right. there's a lot of talk on the change to renewable energy, also here the industry is complaining about high energy costs to other countries. which makes them less competitive. also here, the government needs to find an answer. of course that is in the action area of gabriel, the economy minutester who will speak later on today and we might hear a word or so on his idea to how to revolutionize the energy policy in that country. right now, it's far too expensive for a lot of companies. so that is the bottom line, what the discussion is actually concentrating on here in germany. with that, back to you, seema. >> annette, thank you. we'll continue to give you the headlines out of that bi conference. luxury shoe brand jimmy chu has revealed plans to list on the lopped stock exchange in october. the deal could value the firm aren't 700 million pounds. jimmy chu has 120 shops globally. a fun ipo to look forward to. citizens financial group, the u.s. retail banking subsidiary of rbs expects to raise around 3.5 billion. that was certainly one that's fallen under the radar because alibaba, of course. >> absolutely. investors split profits following its first day surge. the e-commerce giant ranks among the biggest companies in the s&p 500. so following alibaba's astro knot nomiccal, valuation, they have been investigating the other internet stock up that have been raging human amounts of funding this year. >> start-ups have been garnering a lot of attention. uber right now, the omnipresent taxi replacement service has been given an $18 billion valuation. uber has bigger goals. it's been seen as a potential competitor to amazon and fedex. so that is a big one to watch in the u.s. air b & b allows homeowners to rent their homes in spare rooms to travelers is valued at $10 billion. the online news site buzz feed known for its list based service recently raised $50 million from well respected and valued more than three times "the washington post," which is kind of puts into perspective how big buzzfeed is. >> yeah. eric schmidt, recently called buzzfeed vibrant and growing. sp spotify is valued around $4 billion. there's some speculation about ipos. transfer wise has recently raised $5 million. some of the high profile investors including teal and this has an unofficial valuation of around $1 is billion. the brothers, who founded this company in berlin, they have a 7% stake in london. the valuation here is north of $5.5 billion. so no reason for these european tech start-ups to hide behind their u.s. peers. >> and stay tuned. we'll be talking more about the picture of european start-ups as.one of london's most influential partners in around 0 memberships. all this week, we are revealing some of the key headlines from cnbc and corporate perception indicator. a global survey from mainstream to the executive suite. today we are talking tax and when asked if it is important corporations pay their fair share of taxes, 71% of uk citizens said it is very important along with the u.s., however, the figure was lower in germany and china and russia where just 12% said it was very important. the u.s. treasury is taking action to curb tax inversions, making feel less profitable and harder to pull off. the rules include a ban on local hot shot loans. they also prevent moves, companies that used to make deals to qualify for more favorable tax treatment. shire and astrazeneca shares are both sharply lower as a result of this announcement. smith & nephew has been down, as well. >> joining us now, watson. it's a huge amount of m&a already this year. how much of that is related to tax inversion speak? >> i think there has to be an enormous amount. i think certainly some deals that are attractive, tax inversion has yet to pay another benefit of some of the deals. but it's some of the headline ones. it's the big ones. but there are many, many, many deals. there's reality is a lot of activity, but a lot of column inches. >> we're seeing the most active third quarter in q&a. what strikes me about this is the performance and the acquirer's companies. share price is up. why is that? is this because they're not overpaying this time around? i think there is a perceived wisdom that m&a destroyed value. people like to focus on the deals that don't work. the reality is most deals do deliver value. acquirers outperform their nonacquiring peers. that doesn't mean every deal works. it peens in general they do. so what happens having bought the company, the deal was predicated on growth, working better together. companies are getting much better than that. shareholders are recognizing there is value here. >> there is an exception. cross border deals are underperforming. does that tel the deals between the u.s. and germany, germany buying all these u.s. companies, particularly in the gas space, do you think these are doomed to fail almost? i know those are pretty harsh words. >> what we found, actually, is domestic deals are outperforming by more than cross border. but even cross border deals are beating the index. so it's true that cross border is hard. as you would expect. and also big deals are hard. so they're still outperforming. it's easier to buy in your home country. again, if you think about that post deal, can we extract value from this, if you're operating in that market, you're much more comfortable with the workforce. the workforce is more comfortable working together. it's harder where you have people working together, different ways of working together. >> how should our audience at home make sense of the reel rise in deal flow? typically you see a surge in deal flow when corporations are confident in the market. they're willing to allocate capital into the market. so is this actually a sign of positive corporate health? >> absolutely. what we may be seeing is the next stage of m&a wave. that's driven by confidence. coming off the back of the financial crisis, it was hard for a chief executive to stand and say i want to invest a lot of capital. that's getting easier because of that corporate confidence. but i think on top of that, companies have learned from their mistakes. they're much better at doing deals and, therefore, that caution is not just about confidence, it's about saying can we actually implement this and prove it? show me the business plan. show me how you're going to bring this together. so i think it is good news, but always approach with care. the study shows m&a works, but not every deal. >> most of the media attention has been on m&a in the u.s. and europe. the strongest perform her last quarter was in asia. is that right? >> absolutely. and we've always thought of m&a being a western things. so the u.s. still does most of the deals. this is a lot of deals coming out of asia now. asian multi nationals are doing deals and they're outperforming enormously. they've had double digit outperforming over the cities. interesting, you were starting to see what is more cross border deals. so asian companies coming out. a lot of domestic consolidation with rush ya. >> thank you very much. steve allen, m&a leader. we're going to be joined by one of the biggest bulls on wall street to tell us why he thinks the s&p 500 is trading higher. that's upcoming next. xkç european markets trade lower. washington says it puts the action to imminent attacks. shares in astrazeneca, share and smith & nephew sink after the obama administration take actions to curve tax inversion deals. both services and manufacturing in the eurozone come in weaker than expected. share in more weekend chemical firm surge after it's reported to merge with a u.s. industry creating a $27 billion fertilizer firm. display you're watching "worldwide exchange," bringing you business news from around the globe. more breaking news on the situation in syria, the syrian foreign minutester received a letter via iraq from the u.s. secretary state kerry. the syrian government says they've coordinating with iraq and that's according to the statement. syria says it will not stop fighting islamic states in eastern syria and other areas. and we'll be continuing to watch those headlines out of syria to see if any of that is factored into the markets. yesterday was a down day for u.s. stocks after that record setting week for the dow and the s&p 500. hey, alibaba, our favorite stock to talk about also selling off, which is interesting. it's only two days into the week. we don't want to get ahead of ourselves. so far, markets have held up really well in the face of volatility and bond markets. this week, europe has been weak and the u.s. is obviously very weak yesterday. >> and the depth cost, the russell 2,000 below its 200-day moving average. on that note, take a look at u.s. futures. it's another down day or implying a down open for the u.s. markets. s&p 500 down about five. dow jones industrial about 35 points. and more evidence in the small cap index. the russell 2000 currently about 7% below its all-time highs. so a lot of concern about what we're seeing in the small caps on that note. take a look at what's happening in the european markets. we got recent data out this morning that could be factored into these markets with the ftse 100 down about 1% in today's trade. and you can see the xetra dax down about 1%. one of the big losers in the ftse 100 is tesco. keep that in mind. and we're looking at red across the screen here when looking at the french and italian market. italian markets down triple digits down 166 points. and let's have a look at some of the top stocks. we saw tate & lyle, that was a profit warning this morning? >> that was nose dive to the bottom of the stoxx 600 after issuing a profit warning. the group said increased competition and disruption to its supply chain would hit annual profit. and a similar story for austria's bank after the group revised its outlook for 2015 up to 1.2 billion euros. the company's ceo says he cannot rule out sanctions having a negative effect on business necessary russia. however, he clarified just minutes ago that a profit warning is not related to russia and the hqr process. and then there is philips, trading to the up side after saying it will split its company into two units. the dutch group said its lighting business will stand alone. consumer and health care business will be merged into one business. yara has confirmed merger talks from cf industries. yara has a market cap of 13.6 billion dollars in sales outlets in 50 countries. the norwegian government is yara's largest shareholder owning about 36%. >> but overall, the tone in equity markets is one of negative sentiment. there's a lot of flight into safe haven. this is very much reflected in the bond markets. we're seeing prices up across the board and the yields dropping the ten-year treasury yields down 2.54%. we saw that yield of 2.65% that we saw last week. that was a three-month high. a lot of people thought that was very attractive and that's when the buying stepped in. also some people thought that maybe the sell-off that we saw in recent weeks, that was overdone. the ten-year bund yields just below that 1% level in the ten-year gilt year at 2.7%. and the currency markets, the dollar is slightly on the back as far as the euro is concerned, back above 1.2881 is the level we're currently trading at. the eurozone pmis, more or less in line with expectations. the dollar falling against the japanese yen, back with 109, down by 1.5%. overall, the dollar index is not too far away from the 14-month highs that we saw in recent days and the aussie -- slorl, which has been a major victim of the unwinding of the carry trade, that is seeing a little bit of respite below that 90 cent level. let's turn our attention to the asian trading session. we got some significant macroeconomic data points out of china that were better than expected. what was the market reaction? >> hi, carolin. the u.s.-led air strikes against isis targets in syria is spurring risk appetite. different commentators drawing different conclusions. the headline did hypothetic for stabilization in the world's second largest economy. but look at the response. in the hang seng and the shanghai composite, shanghai composite up 0.8%. the aussie market writes the headline pmi. the market there up by 1%. there's no getting away from the fact that the employment fund index at a 5 1/2 year low still has a lot of underlying stress in the broader chinese economy. back to you now in london. >> thanks very much, sri. we're going to update you now on the flashes we've had out of syria in the last 15 minutes or so. reuters reporting that syria was -- hours before that the air strikes from the u.s. would take place. reuters also reporting that nato was not involved in the u.s.-led strikes on islamic state targets in syria and syria has said automation with iraq continues to be at, quote, the highest levels. syria has said it will not stop fighting islamic states in eastern syria. this, of course, comes as the u.s. military has said it's taken action to disrupt a, quote, imminent attack against the u.s. and washington interest. washington launched the first attacks against the islamic state targets in syria last night. nbc's tracie potts joins us from washington with more. >> we are just learning new details from the defense department here from the pent gob this morning about exactly what happened in syria. here is what we know. it was not just the united states. we know that there were five other arab nations involved. the saudis, qatar, bahrain and jordan were all involved. what we don't know is were they involved with their own military? was it in a support role? and who was involved in what particular strikes? we also have unconfirmed video of the aftermath of one of those strikes. we've not been able to confirm the authenticity of that. but the pentagon defense department says this morning that there were fighters who were killed. according to a monitoring group on the ground, there were ten casualties, as they put it, not to mention a number of fuel and weapons depots, the finance center according to the pentagon and other targets that were hit in that strong hold of rakah. >> thank you very much, tracie. now, the u.s. secretary is taking actions to curb inversions. the rules include hop scotch loans that let companies tap foreign cash without paying taxes. the rules don't retroactively apply to deals that have not yet been completed. let's take a look at inversion stocks, the ones that have been on the move. shiers and astrazeneca shares both sharply lower as a result of the announcement we got. it's weighing on london based smith & nephew which has been the subject of takeover talks of medtronic. there's concern that we will see a pushback on these tax inversion deals. to get more on that, let's brick in tony dwyer. tony, m&a has been one of the factors that has been providing a boost to u.s. stocks. word about the white house might try to push back on these tax inversion deals. what do you think that will do to broader sentiment around the u.s.? >> it may have a temporary impact. but ultimately, it comes down to the credit markets. is credit available? what is creating this m&a, the stock buybacks which help earnings per share. all of that is coming from corporate credit. as long as companies are able to borrow from investors and borrow from banks, that's why i'm so bullish. as long as money is flowing, you ultimately have a better economy and better earnings. >> you mentioned share buybacks, even though it's something by chief capital. surely that's knot not sustainable. it's false increased roes and it's not going to continue. >> and it's typical of every part of the cycle. in the first part, rates are low, companies want to borrow. they borrow a lot of money, buyback stock, do a lot of m&a and eventually invest that money into growth vehicles. whether it's taking something over through m&a oreg it's tryi to organically invest. when you have an armageddon financial situation, the first community of which i was part of in la, it's always what happens if it fails? it failed. it wasn't gray. the whole system failed. so you don't just come back right away in the next 15 a minutes because -- and start lending to people that you shouldn't have ever lent to in the first place. so i think it's a longer economic cycle taking longer to play out. >> yet yesterday we did see a sizable move in the markets. the russell 2,000 now trading about 7% below its all-time high. what are your thoughts there? >> well, there's a 92 -- we've been saying there's a 92% chance that september was going to be negative. as a matter of fact, out of the 12 occurrences where you've had an up 3% august to a new 52-week high, you've not had a positive september. you've had one unchanged period. so 1 out of 12 you were not down and it was unchanged. when you're up 8% in the s&p through august, you end up going additional 4%. so it's not a surprise we're having a little bit of a pullback. the question is, over the last four years, as long as credit has been available, every pullback should be purchased. so if i showed you a chair, which i've been doing here with the clients in london, if you look at a chart at it peak over the last four years, you would have loved to have bought that peak. so it doesn't matter over time, and that's what we're thinking as long as credit is available. >> buying the dip is a strategy. is that fueled by retail investors who maybe have missed out on this rally because maybe because they weren't part of this alibaba ipo, they want to get in and buy stocks. >> right. i think it's both. first of all, if you're a pension fund in the u.s. and you have to make 7.5% per year, this is -- we can make great academic economic statements. if you need to make 7.5% per year and high yield debt is at 5%, you can't get there. if you have a fixed income component, you can't get there. so you have to add to risk on weakness. i had a person from marketing come into my office say i've been bullish for four years and i haven't bought. do you think it's too late? so there's a big part of clients still waiting to get in. >> thank you very much for now. we'll be talking more to tony after the break. we've been focusing on the fed action last week. more liquidity coming into european markets and his top pick. stay with us here on "worldwide exchange." welcome back. let's get you some headlines. the united states launched an air offensive in syria targeting islamic strong holds. no more inversions. some shares are sent sharply lower. and shares in norway's yara international rally as a $27 billion fertilizer giant is being discussed. all right. let's give you a rundown. there's no major economic data. but for fed officials speaking today, fed governor jerome powell, look for a trio of notable earnings reports, carmax, carnival, and bed bath & beyond. >> and u.s. traders are watching the russell 2000 which just yesterday hit its death cross in two years, basically when the 50-day moving average breaks below its 200-day moving average. this of course has been being watched closely by investors, not being seen as a bullish sign overall. the russell 2000, small caps have been underperforming the broader markets so far this quarter. tony, i know i asked you about the russell 2000 before the break. is this the best sign for u.s. stocks going forward? >> it's funny. i had my associate do a study and it was about a 50/50 chance that when this happens, that the russell 2000 is down or up three months out. and it has the better performance over the next year. so, again, it's been much with the rest of the market. you can have a pullback. corrections are only natural, normal and healthy until they actually happen. we're famous for coming on tv and saying, oh, wecht expect a correction and when one comes, everybody runs away. truly, in the fundamental backdrop of the u.s. economy is terrific. actually, if you go back and look at some of the -- in 1996, we were following a 34% year. osama bin laden declared his initial jihad against america, israel was attacking hezbollah. this was all in the summertime of 199637 the market was up 11%. and it still went up about 10% in the first quarter. >> what about in terms of using the s&p move higher from here? which sectors and stocks do you think could provide that? >> historically, growth outperforms value right now. so information technology, the growth areas of health care, the growth areas of industrials and even the consumer discretionaries should see a trade into the end of the year. the market has been weak for a little bit of time now. it's not just yesterday and today. with the credit market we've got and the fundamental back drop we've got, the market would buy that. >> we've seen a lot of volatility in the currency markets and in bond markets in the last few weeks on the back of big macro news. but somehow, equity markets have continued to shrug that off. why do you think that is? >> it's not real volatility. it's more volatility than zero, right? so when we referenced more volatility, if you look at fed funds futures, they haven't moved out of this narrow trading range they've been in for the last year. so the actual perception of what the fed is going to do hasn't changed that much. yes, you've had a bump up in the two-year, five-year, and ten-year notes. you're start to see some of that the a bay as the commentary takes place that they're going to be raising rates sooner than expected. >> tony dwyer, thank you so much. all the hype around alibaba, but which next start-up could be the next to go public on the u.s. market exchange? we will talk about a start-up with a venture capital investors next on wex. know that proper allocation could help increase returns so you can enjoy that second home sooner. know the right financial planning can help you save for college and retirement. know where you stand with pnc total insight. a new investing and banking experience with personalized guidance and online tools. visit a branch, call or go online today. ♪ (train horn) vo: wherever our trains go, the economy comes to life. norfolk southern. one line, infinite possibilities. welcome back to wex. right now, arrows pointing to the downside. the dow employing an open around 26 points. the nasdaq selling off. the question is, of course, will the sell-off continue? russell 2000 will be in focus after breaking that debt. in european markets, losses are deepening. the xetra dax down by 1%. the cac 40 off by 1 is.5%. we've got eurozone composites, september flash pmis out at 52.3. that was just a touch below expectati expectations. we did see strengthening in terms of germany numbers. but that was more than offset by the ongoing down turn in france and slowing of growth elsewhere. a lot of focus this morning on what is happening in the middle east and the air strikes in syria. let's get back to pmi. chinese manufacturing activity picking up unexpectedly in september with the hsbc market flash pmi rising to 50.5 from august's final reading of 50.2. let's get out to eunice yoon joining us from beijing. eunice, one number that is striking is that the employment index fell from the weakest level since february 2009. can we expect more stimulus targeted to jobs? >> oh, it's difficult to say. that is exactly, though, the detail that people are looking at in this set of numbers. for the most part, this is a pleasant surprise. the pmi, i mean, just generally. everybody's expectations were managed so low and once we saw that the number came in higher than the expectation, people were quite, you know, happy with that. but and also they were saying the positive sign is that we are seeing some new export orders which point to the strength in the overseas markets. but absolutely, the employment picture is one that most people are worried about. because that figure has come in quite low, basically it means that china has been, you know, now is seeing its factories shed jobs, factor in the factories have seen since china has been grappling with the financial crisis. that has led some economists to wonder why these factories are shedding jobs. are they preparing and bracing for what they foresee as some weakness in the economy going forward. >> eunice, we'll continue to watch the situation closely. for now, thank you. some tech news in keep in mind, apple is denying a report that it plans to shut down beats music. apple bought the streaming music service along with the head phone business in may for $3 billion. at the time, beats music only about a few hundred thousand subscribers. apple is expected toic ma some changes to beats, which could mean the brand will go away, but the service won't. apple was one of the bright spots on yesterday's trade, currently trading down about 0.8% in premarket. meanwhi meanwhile, it's been blockbuster sales for apple's new iphones. the company sold more than 10 million of its iphone 6 and 6 plus. a new record. tim cook says the company could have sold even more phones if the supplies were available. apple's bigger phones are a run away success and samsung's phablets, as well. could they kill a fashion trend? that is skinny jeans. will it fit into pockets? one tweet says already skinny jeans deserve to die and people are meant to wear sweatpants, cargo pants and yoga pants. >> tell us how you really feel. >> i'm telling you, cargo pants are going to make a come back or larger purses. >> you have a big samsung, don't you? >> i do. i have a samsung galaxy. because of that, yes, i have bigger purses. but skinny jeans i still have. >> apparently it's all about skinny boyfriend jeans. i haven't worn them, but i guess they look okay. >> you have to go shopping. >> it's a great excuse, isn't it? we'll live you with a look at how the u.s. futures are trading ahead of wall street. arrows pointing to the down side. 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[ female announcer ] over 100,000 businesses have already used zip recruiter and now you can use zip recruiter for free at a special site for tv viewers; go to ziprecruiter.com/offer2. welcome to "worldwide exchange." i'm seema mody. >> and i'm wilfred frost. these are your headlines from around the world. >> the u.s. launches the first air strike in syria. washington said it took the action to disrupt imminent attacks. >> the obama administration tax act to curb inversion deals sending shares in london sharply lower. a surprise pick up in china's factory orders boost stocks but those services coming weaker than expected. shares in yara international conserve after report emerge that it's in talks to merge with a u.s. company. >> you're watching "worldwide exchange," bringing you business news from around the globe. >> and if you're just tuning in, thanks so much for joining us on we can say. here is how markets are fairing ahead of the u.s. open. u.s. stocks continue to move lower. you have the dow, the s&p 500 trading in premarket open. a lot of the big tech names would turn to downgrades after alibaba went pup and were in focus. now look at european markets and how they're fairing after the economic data we got out this morning. it's pretty much red across the screen. the big loser is the french markets, down about 1.5%. the ftse 100 down by 1.5% with tesco, the big losers there. let's take a look at some of the big stocks in focus. yara has confirmed merger talks with cf industries. yara has a market cap of 13.6 billion dollars. the nor weejend government is yara's largest shareholder. the uk military says it has taken action against syria to disrupt an imminent attack against the u.s. and western interests. washington launched the first air and missile attacks last night. the syrian foreign minister meanwhile said he received a letter from john kerry indicating the attack plans. let's get back to hadley to give us the details on this story. we have all this breaking news this morning, the israelis shooting down the plane, we've got the u.s. warn of an imminent attack by al qaeda veterans. what is the u.s. focused on right now? >> for the united states, they have several irons in the fire, i would say. essentially we wanted to do these air strikes, take out some of the isis militants, but then at the same point, we're working to take out al qaeda. them, of course, you heard obviously from the iranians, we've heard from the saudis and now we're hearing from isis who said they're blaming saudi arain why for joining the -- in items of these air strikes. that could cause waves back at home with the saudis. this is a big sort of psychological shift for the sunni arab states. >> and, you know, if we rewind two or three weeks ago, it didn't look like there would be air strikes on syria. it still looks like there won't be boots on the ground. >> i think all options remain on the table, despite what you're hearing from the obama administration. we also know that in terms of the syrian opposition, the saudis are going to train them. martin dempsey has said it's going to take up a year for those fighters to be ready. it's going to be a problem for these states and at the same time they're basically going to be hurting these guys. they don't have boots on the ground to take care of them there, they're going to have boots on the ground between iraq and syria. even the russians have weighed in and said they air strikes could be a problem. >> hadley gamble, thanks for join us. news related to barclay's, the u.s. financial regulator has fined barclay's 37.7 million. barclay's agreed to settle at an early state and that is why barclay has has qualified for a 30% discount. the failings were pounded by flaws in naming incorrect daes that suggested assets belonging to barclay's. the fda says barclay's retyped 38 million putting 16.5 billion pounds of assets at risk and, once again, are there fought been a settlement, the fdi would have imposed a penalty of 58.3 million pounds at barclay's. >> and shares down about 1% in today's trade. luxury shoe brand jimmy chu has listed on the stock exchange. the deal could value the firm around 700 million pounds. they have 120 shops globally, of course, became much more public, much more popular after sex and the city. >> the flotation of citizens financial group, the subsidiary of rbs is expected to take place today. >> alibaba shares ended the session around 4% lower yesterday. the e-commerce giant now ranks among the biggest companies in the s&p 500. following alibaba's astronomical valuation, the other internet start-ups have been raising huge amount of funnings this year. >> that's right. high valuations are garnering a lot of attention. in the u.s., it's really all about uber. the omni tax replacement service has been given an $18 billion valuation. uber has bigger goals. analysts say it's been seen as a potential competitor to amazon and fedex one day. its unofficial valuation around $10 billion known for its format recently race dollars $50 million. while a respected venture capitalist firm, that values the company more than "the washington post." ooirts a one one to go to. >> it is extremely popular, isn't it? ghoulel's eric schmidt recently classified that. anything above $4 billion, some even said $5 billion. spotify has 3 million subscribers in the u.s. transferwise, it was founded by two estonians. one of them, the first employee of skype. it ras recently raised $25 bhl. here is a german rocket internet, $5.5 billion is the valuation. keep in mind, they want to build the next alibaba, the next e-commerce giant. can they do it? time will tell. >> and everyone loves a successful start-up, none more so than our next guest, eye line berber. it's interesting to wonder where the next alibaba story will come from. but you're in a better position to comment than the rest of us. which start upareas are you investing in at the moment? >> we focus on uk and european opportunities, of course. alibaba started as its own leader and is now coming to dominate in the world stage. i think in the uk and maybe across europe we have an opportunity over other areas include sectors such as simtec tech, cyber intelligence or cyber security. you could tie the health care industries and those first through themes are where i think we have a lot of promise. >> we're looking at a lack of long growth across europe. do you think that's stopping entrepreneurs and strong companies from growing and taking out a loan? >> i think right now we're in a really good time for preers. where people can show traction, they can show progress, where it's revenue or user growth or some kind of option, they're not having any trouble raising money as you've just illustrated from both the u.s. and here in europe. that's up almost three times what they raised last year. there is no shortage of equity fps. if you're a high growth, high potential start-up business, you're not looking for low capital anyway. >> what about high net worth individuals. >> that is one of the other strengths. i think the government policies have been really, really helpful in terms of encouraging high net worth to invest in start-up or any kind of smes. there is scif or seed investing. that is apart from where it started to raise money, as well. >> can i get your overall take on where we are in the tech market? are we in a bubble? if we have in a bubble, would that be so bad? some of the innovations and the disruptive innovations coming out of it, it's fantastic for consumers. >> you are generally right. we anticipate companies will take seven to ten years to realize their full valuable. whether or not we're in a bubble is sort of to your point, it's only a problem when the bubble burst. in the meantime, you're in a growth stage. i think we're in a start-up for entrepreneurs. that is very good because that is where we're going to get the most aggressive and fastest innovation systems. >> eileen, thank you very much. still to come, a number of uk pharma stocks trading lower after u.s. treasuries clamp down on local tax inversion. which other firms could be affected? details after the break. your customers, our financing. your aspirations, our analytics. your goals, our technology. introducing synchrony financial, bringing new meaning to the word partnership. banking. loyalty. analytics. synchrony financial. enagage with us. it's in this spirit that ingu u.s. is becoming a new kind of company. ing u.s. is now voya. changing the way you think of retirement. want to know how the u.s. conexcuse meer is doing? pay attention to bed bath & beyond. it's had a tough year due to that slowsing housing market as well as a shift to online competitors. analysts are expecting profits to remain under pressure again. the folks at william brain moving it to underperform. the stock down 20%. >> another area ofs that have been under pressure pharma stocks. the called tax inversion deals are taking t on the chin today. mary thompsomhompson has more o story. >> good morning. the treasury department is making it harsher for companies to move headquarters outside the country. treasury second jack lieu announcing the new rules on monday evening. says changes to five parts of the tax code and are aimed at making inversion deals less profitable. among the rules, a ban on loans. the changes seek to limit what's known as inversion. that is when companies spin off units into a foreign entity under current laws. right now, u.s. companies that inverse the merger are still looking at dmeft can tax purposes. the treasury secretary wands to reduce that to 50%. but that requires los angeles by congress. most republicans say the issue should be address you through broader tax reforms. now, back to the rules unavailable last night, they only apply to inversion deals that had been released on monday. and the treasury is reviewing other actions it might take. president obama says he's glad the treasury department is taking steps to change inversion. it is looking to buy rival drugmaker shire. it's unclear whether the rules will affect burger king's deal. the rules may not apply to deals made for pure business strategy. burger sing says the move is aimed at its markets. we'll be watching. back to you. >> mary, thank you very much. moving on, activist recent hi made a deal to buy allergan. they have agreed to merge with a union with plans to relocation the company in ireland for tax purposes. allergan's interest in valeant up as we speak. sticking with the m&a theme, the federal trade commission is reportedly considering an anti-trust lawsuit. "the wall street journal" says the ftc has been investigating the merger which would combine the two food supplier wes a nationwide reach. let's take a look at how sysco is trading, down about 6%. the united states launches an air offensive in syria targeting islamic state strong hold. no more inversions, the u.s. looks to cut down on the loop hold and send shares lower. cf industries could create a $27 billion fertilizer giant. china's health care reforms, a hot button issue for investors. we're going to talk about that next coming up on "worldwide exchange." want to change the world? create things that help people. design safer cars. faster computers. smarter grids and smarter phones. think up new ways to produce energy. be an engineer. solve problems the world needs solved. what are you waiting for? changing the world is part of the job description. join the scientists and engineers of exxonmobil in inspiring america's future engineers. energy lives here. welcome back. let's update you on european markets. monday was a bad day for equity markets globally. that has continued into european markets today. the european markets are particularly weak. we had pmi data out this morning. french and german pmi data disappointed. the german market is down 1% and the ftse 100 is off 1.3%. what are we expecting in the u.s. markets? >> after a record-setting week for the dow and the s&p 500, we did see socks cool off in yesterday's trade. futures pointing down downside. a lot of the biotech and tech stocks weighing on the index. specifically, the so-called momentum stocks. some analysts citing higher valuation or height.ed valuation as a concern. we'll continue to watch the nasdaq closely. let's bring in kenny to get his view on what's shaking markets. are investors taking a breather here? >> that's exactly what they're doing. right? you can see almost feel it in the markets. it's a little bit of a set back and wait for a minute because all the excitement that build up last week with alibaba, the excitement with the ecb, the excitement with the bank of japan, everyone adding money, the markets moving higher. when everyone sits back and takes a look at the bigger picture, they're thinking, once again, we've gotten ahead of ourselves. the news continues to be mixed. it's not necessarily all off to the races and you get exactly what you're getting. the nasdaq and russell have been under pressure even as the broader market has been holding steady. that is indicative of the next move. i don't think it's by any chance the beginning of a sell-off. i think we test the 50-day moving average on the s&p at 1975 issue. where i think it will find some support. today we're seeing european markets quite a lot lower, part of the reason for that is air strike in syria. how are you expecting the u.s. market to react to that information today? >> and i think the same thing is going to happen here, right? the market doesn't like uncertainty and conflict. what we saw last night the items of conflict will paint the investor psyche. they're thinking about, let me take some money off the table. cash is always king. but i think the geopolitical events tend to be very short-term. now, all betts are off the table. all of a sudden, this im floweds and becomes a much better situation. when we see the markets back off on the ghee yee political concerns, the market finds itself and it's off the to the races again. >> kenny, we've been watching the russell 20300. the small cap index trading below its all-time high. what should investors take away from that move? >> i think what they have to take away is the concern, right? there's a disconnect between what the markets is telling you and what the fundamentals are telling us. that has been the story for a while, but everyone is okay with it as long as you get the central banks continuing to pump money, everybody feels safe. but certainly here in the states, the end of qe is happening next month. although rates will remain low, i think the market has to readjust to this idea that the fed is not going to be pumping extra money into the system and it's trying to find its level. so i think that's what you're seeing. i think you may have some -- you know, a push lower in some churning until asset managers and investors start to feel more comfortable. >> kenny, we've got about 40 seconds left. in the face of a stronger u.s. dollar, what type of sectors are you positioning yourself in? >> that will be an interesting story, too. how strong is the gorl dog to be? i tend to think if you believe in stronger economy, if you believe it's turning around, industrial names are the names you should be allocating. you have to believe in the broader economy. financials and industries, for sure. i continue to like technology. that pressure will create opportunity. kenny, as always, thanks for joining us. and that is it for today's show. i'm will fred frost. >> i'm seema mody. "squawk box" is next. good morning. and welcome to "squawk box." the u.s. at this point with five other arab nations begins striking isis targets inside syria. and chilling new forecast for the ebola epidemic. the world's health organization now expects 20,000 cases by november. with a 70% death rate. i've seen even higher estimates for the eventual rate to see. and the white house tracking down on tax inversions with new rules to close a loop hold in the tax code. it's tuesday, september 23rd, 2014, and "squawk box" begins right now. good morning, everybody. welcome to "squawk box" here on cnbc. i'm barack obama along with joe kernen and andrew ross sorkin. we are coming to you live from the first annual clinton global ishtive conference in new york city. let's of state all getting together to talk about issues of social change. later this morning, president obama will be addressing this meeting. coming up at 11:00 a.m. eastern time, we have an interview with the host of the conference himself, former president bill clinton. that will air live right here on cnbc. we have a new lineup, the ceo of american standard and nrg energy. former secretary of state