Transcripts For CNBC Worldwide Exchange 20150113

Time since 2002. We break that data in under 30 minutes times. Lets look at stocks. They rally after the u. K. Supermarket oust. German rival metro beating expectations on its consumer electronic division. Youre watching Worldwide Exchange. Bringing you Business News from around the globe. All right. Oil continues to dominate the investigator discussion. Oil taking another leg down with wti and brent both slumping around 2 . Near a six year row. The iranian president delivered a fresh warning saying the dramatic drop in prices not only hurts iran but other producers including saudi arabia and kuwait. They defended the decision saying prices would stabilize at profitable levels. He also said the organization had no plans to meet before the next scheduled meeting in june. You can take a look at shares right now of oil trading down about 3 in todays trade. Indeed and the dramatic sell off comes as china reported record crude imports next month. China also posted a better than forecast rise in exports in december. Stronger u. S. Demand helped to offset weakness in europe but the overall trade value grew less than forecast. Lets check in on markets in raise i cant now with an update. Sri. Thank you very much. For the regional markets one of the highlights shanghai since you mentioned the data and one of the main theomatics out of the import side was the fact that china was out there in the market in december toward the end of the year restocking with some vigor. No surprises there given what we have seen in the oil market and the commodities market more broadly. So for the month of december imports of crude oil, iron ore and soybeans at record highs. Is it going to stay that way . Probably not. Well probably see a degree of aggregate demand. Also liking the export figure robust overseas demand help december exports grow almost 10 3k9 but10 but all of that was offset from the financial sector. Stable at the close up by two tenths of a per cent. Nikkei 225 holding to the currencies. We did see a stronger yen but that did pause during the day so offer a degree of respite for Japanese Equities but we continue to see no respite in the price of oil. Continue to see capitulation in the oil stocks. Back to you in london. Despite china reporting record imports were seeing Oil Prices Moving down side and thats what is moving markets. Oil shares were down about 5 and now nearing a six year low and its interesting to see how before in june when oil prices started to slide it was seen as positive for consumers but now given the accelerated decline to the down side theres fear this will have a major impact on earnings specifically from the energy sector. Of course. Its really interesting in the last 48 hours or so we have continued comments that dont give support from the oil price. We mentioned comments and we also heard from saudi billionaire prince who said we may never seen 100 barrel an oil ever again and we had a significant cut in the impact yesterday. That seemed to be the catalyst yesterday. At the moment there doesnt seem to be a flaw. I do think for the consumer that will become incrementally positive but it creates a risk attitude. The focus will be on how this impacts inflation. The euro zone dipped into negative territory when it comes to inflation the First Time Since 2009 at the death of the financial crisis. We get u. K. Inflation data in 30 minutes or less. That will be interesting to see how oil prices are impacting headline inflation here in the u. K. Now bizarrely enough europe has been bucking the trend over the last couple of trading sessions. We had a strong day on hopes despite weakness in the u. S. Yesterday and as sri told us mixed in asia overnight. Europe is managing to hold about flat. Just five basis points into the green on the stock 600 but it isnt in the red as some might have expected as oil price continues its route. Just slightly more in the red today. Lets look at the main markets in europe and see how that is breaking down performance. Fise 100 was the underperformer yesterday so despite the continued weakness in the oil price its a heavy weighting and managing to relatively outperform today but nothing too significant. Otherwise across the rest of europe were seeing 4 of declines. Germany posted the first balance budget since 1969 today. Its down. 25 today. We saw a lot of bond buying in the u. S. Yesterday. That followed a three year auction that saw Strong Demand and now theres more auctions to come this week but it seems at the moment that demand should outweigh supply and were back below 1. 9 in the u. S. Again the uncertainty we get when Oil Price Declines also leading to a bit of risk. 1. 7 on the yield there. We also saw quite a bit of bond buying in europe because of easing which well discuss in a couple of moments. The u. S. Continued to be correlated even though theres no prospect of bond buying. 1. 52 well be getting Inflation Numbers there. The japanese five year went to zero today and the german short end of the curve is in negative territory. Japanese and german bonds pointing to fears of inflation and quantity easing whether its happening already or expecting to happen soon. The performance of the u. S. Dollars has been mixed year to date. The u. S. Dollar has been weakening and the yen is around a one month high against the u. S. Dollar even though today its basically flat. Yesterday it touched around 117. Away from that 121 handle we got to in the middle of the december. Its been steadily weakening and its around a nine year low. 1. 182. Nine days to go. Increasing expectation the central bank will announce some form of quanative easing. The banks shouldnt wait too long to take action saying Monetary Policy is an impact only after a long delay. If i want to do something i should do it sooner rather than later. And Christian Noyer saying nothing had been decided so far in qe but if there was to be a Bond Buying Program the ecb should have a cap in terms of the percentage of what Government Bonds we should be buying. And jozef makuch saying the general bank is ready for qe if measures talked about do not have an effect we have to move to quantitative easing. So lets discuss more with the head of strategy. The guessing game continues as we approach that Council Meeting on january 22nd. Do you think divided opinion will actually stop the ecb from making a decision . I think it will stop them from acting. The problem is they may act too late and too little and decide on a program that doesnt please market expectations. Theres a lot built in markets right now. What do you think the market is expected theres various reports of a 500 billion euro package unveiled. I think theres at least a trillion of bonds thats priced in by the markets with bonds at 45 basis points and also the ecb is priced in to buy across the whole curve so not just in germany or aaa bonds. Thats essential. Whether they base the purchases on gdp size bond market size Sovereign Rating or contributions to the central bank, even if the likes at the long end of greece and italy are included it will be a small proportion compared to the amount of bonds from germany and france and the core. So how will this really feed through to make an effect on market where as you say were already at 45 basis points on the german tenure. Theres a difference between buying in proportional amounts and risk amounts. If you buy the long end of peripheral curves and you buy the short end of germany youll have the same end of race in your portfolio but you concentrate your fire power on to the countries that really need it. This could be one of the solutions without reaching the treaty. Even still how will this feed through to the underlying economy because surely it comes down to the fact with an undeveloped bond market that well still need banks to want to take cash from the central bank and lend it out. But when rates are negative why are they going to want to take that on to their banner sheet when theres no demand on the other side. Dont get me wrong, the other question is does it really help the real economy and here we have to address two questions. One is the credibility is huge. How long does inflation fall before ecb starts to become uncredible. The same for the fed and the bank of japan and then we have to issue rates, the tightness of Monetary Policy and this starts to become an issue for the u. S. Right now as rates increase and the dollar also depreciates which was a problem for a long time. That of course is a conversation meant to be had. Markets are overly optimistics about what it can achieve and if it can revive a euro zone economy. You can check in but you cant check out. Do you think that will be a concern Going Forward that what may be unveiled on january 22nd wont be able to provide a solution to the deflationary risk to the euro zone. Helicopter money is inflationary by definition as people expand on their permanent consumption. The problem is does it really help . Do you want an economy thats not growing and growing only on nominal terms or where rates are stuck at zero forever . Is this really something that we need . And at the margin if we get quantity easing will it make much needed structural form more or less likely . Will it mean that governments can take the painful decisions or will it allow them to think we got the money in the shortterm. Lets start spending again and pursue populous issues. Its an important discussion ecb should make with the single governments otherwise the risk is to create heavy hazards within the euro zone. And as we look at things at the moment the euro continued 2015 as it finished 2014 on a downward trend. Will it continue on that trend . It depends on the stance of the Federal Reserves Monetary Policy. If we get higher real rates there its potentially the case that well see a reversal of the trend. Our scenario is still that were going south. Great. Thank you very much for joining us there. Head of developed markets rate strategy at citi. Coming up on thursday cnbcs steve leaseman will have an interview with christine lagarde. A lot to look forward to. But coming up on todays show as alleged mastermind behind the silk road website goes on trial we ask one expert how bitcoin will fair in 2015. A look at sports. My Home Team Oregon loses to ohio state in the National Championship. What went wrong . We dissect last nights big game. Investors work up an appetite for shake shacks ipo. Well also speak to the ceo of burger rival Habit Restaurants just months after the groups nasdaq listing. Thats live coming up from orlando. Youre watching Worldwide Exchange. All right. Youre watching Worldwide Exchange and we are tracking all the big movers in todays session. Absolutely. Lets have a look at some of the big movers here in europe. Outperforming and its looking for a new ceo to return to growth after the supermarket announced disappointing sales over the Christmas Period. The current ceo will be leaving at the end of the four year results in march. The new chairman said his successor will be an external candidate. Its up 4. 4 on the back of that news. Metro in germany up 2. 8 . Its a smaller debt than expected in the wholesale and consumer electronic units. Asos is up 6. 5 after the Christmas Trading update. The fashion retailer reported a 15 jump in sales over the period thanks to strong domestic demand. The chief executive kept Profit Guidance unchanged. Now focus on u. S. Earnings. Those are big movers in europe. Wall street kicking off earnings. Swing alcoa to a profit in the fourth quarter. Higher Aluminum Prices and lower energy costs. The company sees solid demand this year from the auto and Aerospace Industries. But what can we expect this week . Earning system is getting into full gear. Names reporting include k. B. Home out before the bell followed by csx after the bell. More importantly we get numbers from jp morgan on wednesday along with wells fargo but thats not it. Bank of america, citi group and black rock on thursday and intel and lastly lets take a look at friday because Goldman Sachs, charles swab pnc and suntrust all reporting earnings and that will be a market mover this week wilfred. Indeed and well be talk about which sectors are poised to make the biggest gains this earning season. Thats at 11 30 cet. Now health care and bio tech stocks were the second best performers los angles year and could be setting up to make a repeat in 2015. He filed this report from the Health Care Conference in san francisco. It was a big day. The jp morgan Health Care Conference kicked off with a bang. Shire announced a acquisition. And theyre paying more than double the share price and Bristol Myers announced a lung cancer trial of a drug that stopped early because it reached its goal. Amid the swirl of news the question on everyones mind is can bio tech and pharma continue the success in 2014. I would hope so. The performance is due to substance. Its not hype or over expectations. Its the fact that Company Versus brought forward a lot of interesting new drugs. The jp Morgan Conference sets the agenda for the year ahead in health care. They present to about 9,000 investors. The mood on day one was upbeat as one might expect after five years of out performing the Broader Market. Concerns on ceos minds, drug pricing, a debate that started to heat up around the cost of new medicines for hepatitis c and concerns for more pressure in other diseases. Theres been a modicum of pricing pressure for some time now. I think if you go back five or ten years were seeing much more focus on value. Were seeing patients demand more for the medicines theyre buying. I think thats a trend that will continue. I dont think its only diabetes and oncology. I think youre going to see that more broadly. But half a dozen Industry Leaders all had the same answer when asked about bio techs prospects for 2015. Asked if bio tech will out perform the Broader Market for the 6th Straight Year all said a resounding yes. And we should note that despite the sell off we saw on wall street yesterday health care is a brought spot. The S P Health Care index hit an all time high. Analysts are expecting a 16 rise in profitability. So this might be one sector to watch this season. Where would you be more focused the cheaper valuations with yields or the bio tech stocks. It will be interesting. Given that we have seen bigger firms buying them maybe its the bio teches to watch. It was interesting to see shire was up on the back of announcing the acquisition. Moving on an antiislamist rally joined record numbers. They were organized by a right wing group which the chancellor condemn for promoting prejudice. They held banners saying stop multiculturalism and stop the silent fraud. Charlie hebdo is set to print 3 million this week. It will feature a carton of the profit mohammed holding a sign. Stephan is in paris with more on the story. Hi will demand will be high for this weeks edition of the magazine on the back of the rally we have seen across the country. I spoke yesterday to my local news agent and he told me that some of the regular clients already asked the news agent to put aside one or many copies of Charlie Hebdo and thats why it will be printed at 3 million copies. Thats to compare with an average 60,000. And for the first time also Charlie Hebdo is going to publish its edition in many languages. 16 in total. We dont know how it had been spread across the country. In paris the president will hold a ceremony to pay tribute to the three policemen killed last week in the french capitol and later today the four jewish victims that were killed on friday will be buried in israel. The Prime Minister will attend the ceremony. And third in line for the french protocol and she will represent the country. In europe were getting more support, more comments from leaders. The head of the European Parliament paid tribute to the victims in france and also speak up yesterday to defend the freedom of expression. 17 people are dead. Their cartoonists, journalists and police officers. Theyre simply employees. Theyre simply citizens. Jewish people are dead. They died because they defend and emotions body that which fanatics dont want to accept which is criticism, humor, satire and freedom of expression. Meanwhile france remains on the now we just lost those pictures. We will be back out with him throughout the show though today. Another story that were watching though u. S. Central command says its twitter account is active again after it was hacked by isis sympathizers on monday. The group callposed threats and documents including the addresses of two retired u. S. Generals although none of it is classified information. They oversee u. S. Troops in the middle east and afghanistan and has directed air strikes against isis fighters in iraq. Twitter suspended the page shortly after it was hacked monday afternoon. Indonesias air transport investigator has confirmed it has received the cockpit voice recorder from the crashed air asia jet. Divers found it near the flight at a at a recorder yesterday in the bottom of the java key. Both will be key in determining the cause of the crash that left 162 people dead. Still to come will mark carney have to put pen to paper. We find out if u. K. Inflation fell well below the market of 2 and what the boe will do about it. Thats coming up. Youre watching Worldwide Exchange. Bringing you Business News from around the globe. Wti falls below 45, a fresh six year row. Irans president warns pain ahead for all producers but they say opec was right not to cut. China takes advantage of lower costs importing crude at a record level in december. Trade data surpassing expectations giving chinese stocks a bit of a lift. The falling price of oil and food expecting to push u. K. Inflation for the First Time Since 2002. That data due to hit the tape any second now. And rally after the u. K. Supermarket ousts its ceo of weak christmas sales. Beating expectations on performance from its consumer electronic division. Were just getting some headlines from the Prime Minister of italy saying that the italian president is to step town in the next hours. Of course he took office in 2006 and accepted a second term in 2013 but he is widely suggested or signalled his lack of interest in serving a full seven year term. He was seen as one of the leaders that played a significant role in helping europe get out of the debt crisis in 2011 but italian president to step down in the next hours according to the Prime Minister of italy. And were just getting u. K. Inflation data which is coming at naught on the month. And 0. 5 . Various were thinking 0. 7 and 0. 6. Thats well around the 1 band and is below expectations as well leading to the fact that mark carney will have to write a letter of course to the govern lt to explain it. To provide historical reference inflation fell to a 12 year low of 1 in the month of november. Were seeing the currency space move on the back of this. Sterling weakening against the u. S. Dollar at 1508. Lets get reaction to this. Our u. K. Business editor is with us on set. Also joining us is robert wood chief u. K. Economist. Lets kick off in studio. This is below expectations but we will have to see the letter written as expected. Yeah we knew the letter was going to be written. 14 times king wrote to the chancellor because they missed inflation targeting. On the upside this is below the 1 target and way below. I think since records began this is the level that weve got to. 0. 5 . Very low. The question is will the mpc be bothered by this or will they say they need to look through this because the major factor in cpi falling of course is the tumbling oil price which the u. K. Doesnt really have much control over but 40 of the items in that cpi basket all in negative territory. Whats peculiar about this situation, i want to get your thoughts on this is the that the u. Kflt is seeing strengthening labor market. Employment has improved. Jobs are being created. Shouldnt that push Wage Inflation higher as well as broader inflation as well . Eventually it should push Wage Inflation higher. Thats one reason to not be concerned today. The economy is heading in the right direction which should guard against some of the theoretical risks that many people might worry about. For instance that consumers will expect very low inflation tomorrow. That will lock in a deflation nary mind set. In the u. K. Thats unlikely because the economy is growing. That being said inflation is likely to remain below a half percent. Its likely to make the bank of england worried about raising Interest Rates in the near term. Last month mark carney described falling prices as net positive. With that in mind the latest pressures are they a positive to the u. K. Economy rather than a negative . Absolutely. A massive positive for the u. K. This puts a lot more money into consumers pockets for spending. They have to spend much much less on petrol and food if one of the price cuts this morning is repeated. This puts much more money into consumers pockets which they will go out and spent. Its a big boost to the domestic economy. The u. K. Is a Net Oil Importer and net food importer too. It will accelerate growth this year. But that being said i think with inflation close to zero the bank of england faces no pressure to raise Interest Rates in the near term so it can wait and see what happens. A noted u. K. Historian tweeted that the oil decline has become one of the most powerful changes in politics and economics for many years. Would you agree with that statement . How big of a risk is that to the u. K. s economy . It is one of the most powerful things thats happened over the last few months. All have fallen very sharply and this is very important for a whole range of consumer goods and also its important for stris like the north sea and for areas in scotland as well which is particularly dependent on that. For me the big political impact of this is that wage growth minus inflation is going to go pretty positive now over the next couple of months. Real wages will be rising the best part of a half percent within a couple of months. Thats a real backdrop in the sense that the change of wages. Whats bad is real wages are way, way below where they were before the crisis. This is a small increase following a big increase. Wages have been the major factor and it hasnt kept up with inflation. Apart from recently we saw the latest print going up to 1. 6 . Thats going to out strip this very low level of inflation. You tweets from David Cameron, george osborne, Danny Alexander all saying this is very good news for u. K. Families. We should be happy. This is as you said a net positive and David Cameron claiming the longterm economic plan for the government working. The question is i guess at what point do you become concerned and the letter that were talking about mr. Carney writing isnt going to be sealed with kisses. Its supposed to have a plan for how the bank is going to get the u. K. Back on track toward that 2 target. And what hell say, remember we wont see that letter until the next minutes, thats the 18th of february and well also see the chancellors response but we should get an idea of how much the mpc want to look through the Falling Oil Price and how much theyre concerned about other prices in the u. K. Falling. Absolutely. Both sides of the spectrum will be arguing whether this is a positive or not and well see that debate developing over the next couple of days. Robert one final comment from you. I want to mention some of the data that came out. Weve seen 10 year on year growth in november house prices. In london in particular up 15. 3 . So that is quite a strong set of Growth Numbers for the house prices. What does that mean for the economy and indeed for the political debate as we go into the election. To be honest house prices in the economy, the link there is exaggerated to be honest. Rising house prices make people feel better off. But makes a lot of people worse off. Anyone that wants to buy a house is made significantly worse off. Running for the hills when they go down. Its not something i focus on massively. Of course at the margin it probably helps the economy a little bit if house prices are going up. Robert thank you very much for joining us today. That was robert wood. Also thank you for joining us here on set. Lets get a check on how european markets are responding to the latest u. K. Inflation data we just broke. Ftse 100 up about. 38 . We were sitting on gains ahead of that inflation data but european markets holding on to gains and taking a look at the euro stocks a good cage of stocks across the euro zone and up. 2 . The it has gained about. 6 in a month. Very well covered. A couple of auctions coming late they are week but at the moment demand out stripping supply. Were down on the ten year note in the u. S. We also saw bond buying in europe said germany is at. 46 on quantity easing. Selling weakened a little bit over the last ten minutes of so. 1. 5. Its down 0. 6 on the day near session lows. Near 9 year lows 118 at the moment. Now as crude Oil Prices Fell to the lowest level in nearly six years funds have flowed into saver havens such as japanese bonds. Lets get out to the nikkei live in tokyo for an update. Thats right. That five year japanese Government Bond fell to 0 today for the first time. The benchmark ten year yield also fell to 0. 255 which is a new record low. Growing number of investors are buying more jgbs as a safe haven from tumbling global market. Meanwhile Lower Oil Prices are helping revival the japanese economy. Japan posted a current surplus for the fifth straight months in november. Trade deficit by the drop in crude oil prices and stronger exports due to the weaker yen contributed to the better than expected result. A measure of the peoples assessment of the domestic economy improved in december. The index rose for the first time in five months and the Outlook Index also climbed for the first time in seven months. However Lower Oil Prices will make it difficult for the bank of japan to achieve the 2 inflation target. The economics minister said the boj is unlikely to meet its target for the next fiscal year due to the Falling Crude prices. Thank you very much for that. Well bring you some flashes now coming out of airbus. Weve just had the numbers saying that airbus 1,456 net orders for the year for 2014 and delivered 629 jets in 2014. These are record delivery numbers for airbus following boeings own record delivery number last week. They beat airbus in terms of delivery last year but slightly behind inner thes of orders and i will be talking to the coo of airbus at 12 00 cet. And well switch our focus back to the u. K. The intensifying competition in the supermarket space put a lot of focus on market share. Whos winning, whos losing. Well were getting new numbers. Market share falling to 29. 1 in the 12 weeks to january. Cantor also pointed out that u. K. Grocery market share falling to 16. 8 , the market share is falling to 11. 3 . Morrison looking for a new ceo and bid to return to growth after the supermarket announced disappointing like for like sales over the Christmas Period. Current ceo will be leaving the firm at the end of full year results in march. The successor will likely be an external candidate and asos shares in the green. The fashion retailer reporting a 50 jump in sales over the period thanks to strong domestic brand. So big movers in the retail space. Absolutely. Including metro trading high after reporting the first call of sales fell 2. 2 but that was smaller than expected thanks to improvement in the electronics data. Lets focus on the u. K. In particular including morrisons which is up 6 . A big bounce in that number despite Significant Management issues. They were actually better than expected. People were forecasting a drop of 3. 8 . 4 . Something like this and the Christmas Period came in at about 3. 1 . So the numbers surprised on the upside. The other thing you had was the chief executive falling on his sword and i think for a lot of people its been the end of a very rocky road for morrisons. This is a year where they saw their profits. They had to abandon an acquisition in the baby area. They had to be late to the game in terms of online delivery. They have been late to the game with reward cards and a lot of people including sir ken morrison said the fault lies entirely with the shoulders of dalton phillips. He has resigned and the new chairman thats only been parachuted in veteran of the retail world. Brought in to revive the fortunes of morrison saying look we want to get ahead of this. Were going to look for a candidate externally. The question is who is this candidate . We were talking about inflation figures in the u. K. Just now and if you look at food inflation out of that basket, food has fallen 1. 9 . Thats the biggest fall since 2002. So its not just in terms of oil price. Youve got some basic things going on in the retail world putting pressure on supermarkets in a way weve never seen before. Milk is cheaper than water in the supermarkets at the moment. And we also had the market share numbers, continuation of the trend weve seen for awhile now. What can the likes of tescos in the middle market morrison do to stem those flows in market share. Very difficult because understanding the Retail Consumer its very tough. You saw morrison saying theyre expanding their Convenience Store and trying to look at Loyalty Cards and understand their customers more but the big discussion is tesco is having to make all the changes. The investment they make in price, how much can the likes of morrisons hemorrhage, because to play with the big boys you need a lot of money. That turn around strategy unveiled by dave lewis the new ceo will it be enough to revive the tesco experience from cutting 33 shows but also putting focus on improving the experience as a consumer. Yeah its very difficult to improve an experience. Thats the problem you have. The best chance the u. K. Supermarkets have is that they stop growing because ultimately their range is limited and the u. K. Consumer says no i want to buy 120 different items. Not just 43 but in terms of the u. K. Experience if youre cutting cost its hard to improve what the u. K. Experience sees on the shelves and in the eyes. As a consumer being new to london and experiencing the tesco experience i get quite confused theres too many options and i find it to be messy. Where do you go . I have frequented a tesco many times but its not the most streamlined experience. Frequenting tescos that happens to all of us. I hear you. Well keep it there. Thank you for bringing us the latest and your perspective on whats happening in the u. K. Supermarket space. But other use to bring to you, songbird has advised investors to reject a take over bid saying it undervalues a firm. The latest investment author is a 2. 5 billion pound bid. Shareholders have until the 29th of january to make a decision. Eco World Investment a malaysian owned private vehicle has developed three sites in london. 428. 7 million pounds. Still to come here on Worldwide Exchange. Never mind the dramatic drop in crude prices there standing by opecs decision to stand back. We discuss after this break. Oil takes another lick down with them both slumping around 2 near a six year low. The dramatic drop in prices not only hurts iran but other protusers including saudi arabia and kuwait after the united arab emmirants said it would be at lower levels and the organization had no plans to meet before the next scheduled meeting in june. Oil is down over 3 today. Wti down 44. 6. And some traders were pegging yesterdays sell off to Goldman Sachs cutting its oil forecast slashing its wti, a forecast of 41 from 70. Jeff curry explained this move and his forecast on cnbc. The key theme here is keeping capital out of the market and prices have to remain low enough to keep potential capital which theres lot out there. Private Equity International oils, the idea is that capital is the new margin of adjustment. This market is experiencing a paradigm shift right now and really whats driving that paradigm shift is one simple observation, fast cycle production. You put capital in today you can get production 30 or 60 days from now. Thats radically different from the world we used to live in in which you made investments today and you wouldnt get production for three or four years. The second factor is the high decline rates of shale. Production begins to fall. Its turn it up turn it down. Capital is now the new margin of adjustment. Gets the market three different components or levers to pull to adjust supply. Credit equity as well as cash flow. Lets talk more about the oil trade with the senior Oil Strategist at bnp, the pleasure to have you on this morning and of course the supplydemand equation has been one of the reasons we have been seeing the sharp decline in oil prices but help me understand whats happening in todays trade. China, the worlds second largest oil consumer reporting a record crude import. That should help Oil Prices Move higher, no . Yes, the reason that oil prices have been falling is many a supply story the u. S. Expansion of shale but if you look on the demand side of at the kwags we have Global Economic growth accelerating this year and next. And in theory we should be good for oil demand and in addition the chinese news is quite interesting because theyre building strategic stocks to use in the event of all major supply disruption and building stocks to levels similar to the levels that are held in the west. When oil prices are very low its a Good Opportunity to dip into the market and accelerate the purchases of oil and i think china has done that over the last month. I would say over the last five days we had a pause in the oil price fall. It did recommence yesterday but that pause we thought was due to increased buying not just by china for strategic stock building but also because of the forward structure of the oil twice. It was an incentive to go out and buy oil and physically store it in tanks on the basis that it will be worth more tomorrow than it is today and we felt that it lead to a slight pause in the fall of the oil price but that is certainly the fall recommenced yesterday. So what will perhaps provide a little bit of a relief to those bulls out there that have been caught on the wrong side of this trade when looking at oil . Will it be the cartel stepping up and saying they will cut production which seems very unlikely. We heard comments from saudi arabia, and kuwait and uae. Theyre pursuing this data of no production cuts where at the margins the lesser nations among opec are creaming for cuts to be discussed before or at the next june meeting. I dont think opec will necessarily increase production. Its quite possible that they might cut back a little but its all around supply and demand and how quickly they respond to the price signal. So on demand prices should boost demand all things being equal. The supply thing is really a case of how quickly a production shifts. Existing production when operating costs are covered that oil is going to be produced. Not much is going to happen in the next six months. Its only in the second half of the year where we might start to see the drop in drilling on the u. S. Shale oil patch starting to have an effect on u. S. Oil production. It wont completely reverse the situation but it will start to lead to an improvement in the Market Dynamics and we believe the start of an improvement in oil price would commence at the start of the second half but from now until then its weak indeed. The focus is on the classic supply deman balance as you have been saying but what impact has general macro factors having on this route . The strong dollar and things like that. Well, in terms of oil demand some of the weakness is the fear by some that the World Economy is stuttering and on that basis the need for oil is less. However we believe that overall Lower Oil Price is good. It puts more money in the pockets of consumers, particularly in the developed western nations which have a high propensity to spend money at all times. So that should lead to an upward price. The downward pressure is the fact that the dollar is strengthening relative to the currencies there. Monetary contraction phase of Interest Rates where japan and europe are in an expansion phase. This leads to a strengthening of the dollar and creates head winds for the oil price. And i still believe its the fundamentals of supply and demand driving things but the strength of the dollar isnt helping any recovery oil price. Thank you very much for joining us this morning. Senior Oil Strategist at bnp. Want to bring more flashes out of airbus results. They say the 8380 is on track to break even in 2015. Stay tuned ill be speaking to the coo of airbus at 12 00 cet and first interview live. Were going to talk sports. Ohio state has been crowned National Championships winning the First College football playoff monday night beating my Home Team Oregon 4220. The buckeyes were lead by running back elliott who piled up 246 yards on the ground and scored four touchdowns. This is the 8th football title in ohio state history. The 5th the team won out right and the third for coach urban myer who won back to back championships at the university of florida. So it was a tough night for me. Im sorry to hear it. Yesterday i was playing the other side. I wish you had won. Would have been nice for you. Thank you. Speaking on the sports front, ronaldo beats messi to win the ballon dor. The decision was made by the coach and captain of each fifa nation as well as a journalist from each nation. A worthy winner this year. Ronaldo quite a handsome man. Is he . Indeed. I bet you didnt notice. Hes quite a legend. Its nice to see him on foreign shores playing. I follow him on instagram. He poses a lot of selfies. Fyi. Im sure he does. Well continue the sports talk but also again oil is the big story. Crude selling off weighing on markets with Energy Stocks leading the way down but our next guest is staying bullish on u. S. Equities. Lets ask him why after this break. Its 10 00 a. M. Here in london. 5 00 a. M. In new york. Thank you for joining us. Youre watching Worldwide Exchange. Here are your headlines from around the world. Wti falling below, get this 45. Brent at a fresh six year low but european markets shrugging off todays route with u. S. Futures indicating a positive open. The threat of deflation stocking the u. K. Consumer prices falling at the lowest level since 2000. China taking advantage of lower Oil Importing crude at a record level in december. Trade data also surpassing expectations. Thats giving chinese stocks a bit of a lift. The twitter account for the Central Command is back up and running after it was hacked by a group of isis sympathizers yesterday. Youre watching Worldwide Exchange bringing you Business News from around the globe. And once again it is commodities that are dominating the investor conversation. Yesterday Goldman Sachs slashing its forecast. That had something to do with the accelerated decline we saw in oil prices but theres a commodity moving higher and thats gold. Gold shares at a 12 week high. Is that indicating that investors are trying to find a little bit of safety in this market . Absolutely. Gold is finally moving higher given the huge amount of volatility we had and of course also thoughts of more monetary easing and gold hasnt gone higher quicker but as you said its around about a 12 week high. Its been around that 1200 level for awhile and as it pushes 1230 1240 thats where it was around december. It will be interesting to see if it can continue that momentum now. Exactly. What does this mean for equities . Dow jones indicating a move higher. Nasdaq up 22 and s p 500 with an opening around 9 points. A good gauge of stocks across the world a lot of focus on china. Stronger than expected chinese trade data. Japan also in focus. We are looking at the u. S. Dollar touching a one month low against the yen. A lot of movement in asia diving into the european markets because weve seen a lot of volatility. Spex you speculation on what the ecb will do on january 22nd. There are different policy makers that say they know what the right solution is to revival the euro zone economy. We get the results of that meeting next thursday. Its green across the screen. Interesting to see the ftse 100 up. Over the last two sessions its managed to buck the trend of whats happening elsewhere in the world. Thats down to prospects of quan tif easing offsetting that weve seen by the continued route in the oil price. That and the successful three year note auction in the u. S. Saw yields move lower yesterday. Bond buying pushing yields below 1. 9 . Were now at 1. 87 in the u. S. A couple more auctions to come but at the moment demand soaking up all the supply that comes to market. We also had bond buying yesterday and today in germany. Pushing yields to. 6 for a good reason as we focused on prospects of quanative easing coming. And the inflation number falling to 0. 5 for the year. The prospects of the u. S. Dollar slightly different this year compared to last year. It hasnt just been against all currencies. The u. S. Dollar has given up some ground this year. Its bounced back against the yen today. 2 . But somewhere off those highs of mid december of 121. Now the euros prospect versus been the same as last year. Continued slide down another. 3 today. Lets have a look in on commodities as well. Oil continues its slide. 44. 6. Thats down 3 . Brent is at 45. 9. Also down 3 and gold is on a good run. Its 1238. Its up. 4 today. Can it continue to push on through . Given the volatility we are seeing prap it can. Now the dramatic oil sell off comes even as china reported record crude imports last month. Theyre making a chance at building reserves. The overall trade value for 2014 grew less than forecasted. On that note lets get out to sri standing by in singapore with an update for us in a rangers. Sri. Thank you wilfred. Better than expected trade data highlighted did backstop some of the markets. An otherwise fairly patchy session. Lets talk about it in a bit more detail. The financials lost some steam so that offset some of the feel good factor from the data. As you mentioned, 9. 7 expansion in exports for the many of december and i think on the imports side the real story was with the commodity markets. Theyre very clear to extrapolate from the data that the chinese were in the market toward the tail end of last year really opportunistically buying a lot of resources at these very low levels. Record crude imports in the last month of the year. Record soybean imports and iron ore imports. Is that a trend thats going to remain over the course of 2015 . Probably not. Well probably see a degree of moderation in aggregate resources demand. That helped to stabilize the shanghai market. Nikkei back and it was the currencies that pressed the market low. The stronger yen trend did pause for breath offers a degree of relief and the nikkei coming back off the worst level or testify day to close, still in negative territory by. 6 . Back to you now in london. I hope you had big celebrations last night for your 25th birthday that you celebrated yesterday of course. 45th you mean. I got it wrong. I dont know how i did that. Its a school night so. I didnt drink much. Sure sure. Thank you very much as ever for that update. You could have said that youre like wine you get better with age. Oh well of course thats very true but we all knew that already. Absolutely. We are now going to get market perspective. We are joined by ken cayman joining us live from new jersey. Thanks for getting up early with us ken. Im going to start with what were seeing in the currency space because we are looking at the u. S. Dollar touching a one month low against the safe haven yen. The big concern is that the multinationals that do business overseas that to bring in foreign revenue that they will be hurt by the stronger green back. How much of a concern do you think that will be this earning season. I think i would use the word drag on earnings instead of real hurt. In the United States exports theres about 15 gdp. I think that growing demand globally as oil prices come down might offset some of that. Maybe not in the first half of the year so i would categorize it more as a drag but im not sure its a huge huge speed bump. One of the things that will be a net positive is maybe a broadening out of the market. Weve seen you know the indexes or the investment trade really be the place to be over the last couple of years but as we see earnings estimates come down in the energy world which is roughly about 8. 5 or so of the s p were going to start to see Stock Selection across other areas do much better. So i think the question comes to what market youre talking about. If youre just talking about narrowly the indexes that everyone looks at i think that could dampen out but well see a broadening out of the markets we havent seen over the last couple of years in the United States. You were just mentioning the move in Energy Stocks. The worst performing sector once again due to the accelerated decline in oil prices. How are you recommending clients to approach or look at the energy trade . Would you say this is the time to perhaps go bargain hunting . Well its a positive. Theres way more places in the world that use energy than produce energy. So well get stories over the first half of the year of the places on the globe that energy is a negative. So those create speed bumps for the market but as you look at to answer your question on a broader stance i mean the input costs for most things are energy certainly food and chemicals and production. So i think youre going to start seeing a broadening out and i would say to people 2015 is going to be the year that some of the sectors of the market in many cases all the sectors of the market that havent been in the sweet stop of the s p 500, when you look at the s p 500, 50 of it is in 60 stocks. So, you know were going to start seeing a broadening out as many many companies, especially Smaller Companies are benefitting from much Lower Oil Prices. So now is the time to actually be optimistic about what its going to be but not necessarily just in the narrow indexes. Ken i want to pick up on a phrase in your note that you sent to us and thats theres a lot of money in equities that doesnt really want to be there. How big of a risk is that to equities globally as we see rates tick up over the course of the year. That is a risk but it boils down to how much they tick up. Theres a lot of people in equities now and i say theyre hostage in equities because they cant get yield anywhere else. Savers have been punished. They saved their whole life and their safe money is earning nothing so theyre pushed out to the on risk scale. If Interest Rates go from 0 to. 5 thats not going to cause a lot of people a lot of leeway in their budgeting decisions. If we talk later down the road if we ever get to Interest Rates more historically normalized rate where they can get 2 or 3 it becomes a very big deal. I think its an absolute net positive even though we have to get through a very short period hopefully short period of pain when we start actually increasing rates as far as Market Sentiment goes but its absolutely a positive that we would start seeing Interest Rates move up a bit but theyre not going to move up to the point where people can find yield elsewhere other than equities and more riskier trades. Ken kamen, thank you for your time. Wilfred you were just saying when rates will rise this year. Theres a lot of speculation on whether rates will in fact rise in 2015 Goldman Sachs saying 2016 given that inflation is well below 2 . Im not nailing my colors to the mast on that fact. I do agree with ken the big thing that everyone is saying it will be very gradual, small rises at a time so it wont necessarily be as big an impact negatively as some people are expecting but a lot still out in the open. Its going to be a fun year. In the shortterm lets give you a run down of what to watch this day. Sums up all financial activities will be out at 2 00 p. M. Eastern time. Minneapolis fed president is speaking this evening and home builder k. B. Home reports results before the open while csx is after the close. Lets take a look at the other top stories at this house. U. S. Central command says its twitter account is active again after it was hacked by isis sympathizers on monday. The group posted threats and documents including the addresses of two retired u. S. Generals although none of it is classified information. Centcom overseas u. S. Troops overseas and afghanistan. Lets bring you up to speed on the airasia story. Indonesias air transport investigator confirmed it retrieved the cockpit voice recorder. They found it near the flat data recorded recovered yesterday at the bottom of the java sea. It will be key in determining the cause of the crash that left 162 people dead. Can the momentum continue . We look at the sectors poised to make the biggest gains this quarter after this short break. Welcome back. Lets give you headlines. Wti falls below 45. Markets shrug off the latest route with futures indicating a positive open and u. S. Central command says its twitter account is back up after it was hacked by a group of isis sympathizers. Of course earnings season unofficially kicking off in the u. S. Alcoa beating forecasts on a boost from demand. The company sees solid demand this year from both the auto and Aerospace Industries. If you look at the up the revenues up 14 and by the way, 50 of that is driven purely by organic growth. The profitability is up and literally i would almost call it a business trifecta. All the three groups are performing very well. Earnings are in full swing. Names today including k. B. Home out before the bell also followed by csx after the close. More importantly tomorrow jp morgan along with wells fargo. Bank of america and citi group and black rock on thursday. Keep an eye on intel. They report earnings on thursday after the bell. Goldman sachs wrapping up the week reporting on friday. Charles schwab also on friday. Health care and bio tech could be setting up for a repeat in 2015. Megafiled this report from the jp morgan Health Care Conference in san francisco. The annual jp morgan Health Care Conference kicked off with a bang. Shire announced an acquisition of nps pharmaceuticals. Theyre paying more than double the share price and Bristol Myers announced a lung cancer trial of a drug that stopped early because it reached the goal of helping people live long amid chemotherapy. The question on everyones mind is can bio tech and pharma continue the success in 2014. I think so. Its due to substance. Its not hype and over expectation. Company versus brought forth interesting new drugs. More than 400 companies present to about 9,000 investors over four days in san francisco. The mood on day one was upbeat as one might expect after five years of bio tech outperforming the Broader Market. A debate started to heat up around the cost of new medicines for hepatitis c and concerns for new pressure in other diseases. I believe theres been a modicum of pricing pressure for some time now. If you go back five or ten years were seeing much more focus on value. Were seeing pairs and patients demand more for the medicines that theyre buying. Thats a trend that will continue. I do think its only diabetes and oncology. I think if youre going to see that more broadly. But half a dozen Industry Leaders all had the same answer when asked about bio techs projects in 2015. When asked if they would outperform for the 5th Straight Year all said yes. Jamie diamond says he struggled with having to publicly disclose last july he had throat cancer. Speaking at the conference on monday he said he little choice because his condition had deteriorated and he lost about 35 pounds during treatment. Tests show hes now cancer free. He now thinks more deeply about health care since becoming ill. Coming up on Worldwide Exchange, were going to discuss bitcoin. They lost 2thirds of their fall in 2014. Whats the outlook in the new year . Well get that coming up next. Thanks. [ male announcer ] fedex® has solutions to enable Global Commerce that can help your company grow steadily and quickly. Great job. mandarin cut it out. See you tomorrow. Hes accused of netting millions of illegal profits from more than 1 murder in the Second Degree of goods and services on the site. They were paid for by bitcoin. Thats right. The value has fallen dramatically. Its down 70 against the u. S. Dollar and that period trading around 247 having been well above 800 and actually 1,000 at one point over the last 16 months. Lets discuss more with simon dixon. Ceo of bank to the future. Com. A pleasure to have you on. Theres skeptics that say bitcoin is nothing more than a fad. Theres no value and thats basically being backed by a formula that is kind of hard to understand. What would you say to those skeptics out there . Well bitcoin is not just a currency. Its a very significant techno technologic innovation. Its programmable money which is hard for people to understand. Imagine when apple invented the app store and the iphone and no one could forecast what was possible by making Technology Programmer where entrepreneurs all around the world could bit applications. Bitcoin is in a similar space. Similar to the internet in 1995. It was protocoled and very geeky but later came from it applications like google and facebook. The invention of programmable money allows people to do things with money which could have never been achieved before and bitcoin is programmable money. Its innovation without permission from a bank. But theres many mobile Payment Systems out there that now offer Similar Services that bitcoin offers. Its important to understand the difference between bitcoin and banking. With banking the bank becomes the legal owner of your money and they spend it as they wish in the Financial Markets and they also create money when they issue loans. With bitcoin you own your money. Its on your phone. You own it. You are the legal owner. You can spend it as you wish. This is my bitcoin debit card which allows me to spend it anywhere where a credit card is accepted and the people who participate in the network can also get involved in creating the currency as well. But who is it ultimately backed by . One of the reasons the u. S. Dollar is the worlds safe haven currency is because we know who its lender of last resort is in times of crisis and turmoil. Who is that entity for bitcoin. Well bitcoin was built upon principles to mimic much like gold. It doesnt get in the process of creating more than exists. Therefore it doesnt need that because its backed by and this is a bit the people find hard to understand but kripmass. Anybody can see theres sound principles behind how this currency is created. It trades on a free market so people focus on the price of bitcoin but it doesnt need the backing in order to make it. That requires a bit more understanding of how the code works. But given the volatility we have seen. Youre a former investment banker and trader as well. Would you recommend investors out there to buy bitcoin. I believe theres a lot of untapped value. The innovation of programmable money has significantly further to go but markets are very very unpredictable right now. Weve seen quantitative easing push money into the stock markets. People borrowing at virtually 6 . Buying back stocks the Property Market bubbles and in that time gold has only just started to turn around. I think youll see bitcoin follow gold at the moment because its very much ahead against the financial crisis and we have not seen any solutions since the financial crisis and its banking as normal. Lets talk about your bitcoin debit card that you just showed us. Thats a Development Im not sure everyone is aware of that it can be used in every day trade in the same way that normal money can. Is that a recent development and what does it enable you to do . You have to remember bitcoin is a six year experiment as it were. Weve had now half a billion of Venture Capital invested in start ups and businesses building on top of the bitcoin network. Weve seen that money coming through in building applications that make it easy for people to use. Bitcoin is still at where internet was in 1995. For geeks and hard to understand but what were going to see in 2015 is much much more applications that make people use bitcoin without knowing that theyre using bitcoin because theres significant improvements in what it does and entrepreneurs are developing those applications right now. Thank you for joining us right now. Simon dixon, ceo and cofounder of bank to the future. Com. Do you think bitcoin will survive 2015. We have been getting in your tweets. Joe said with all the controversy surrounding bitcoin there may be opportunity for other Digital Currencies to be the one. Email us at worldwide cnbc. Com. Our handle is on the bottom of the screen but i suspect this will be a debate Going Forward. Absolutely. Absolutely. Just as we head to break, lets have a quick look at u. S. Futures. What are we expecting the u. S. Markets to do ahead of trade today . The s p expected to open up 6 points. The nasdaq expected to open up 15 points. Well be back in a couple of minutes. 5 30 in new york. Well to Worldwide Exchange. Here are your headlines from around the world. Wti now falling below 45 with brent at a fresh six year low but european markets shrug off todays route with u. S. Futures indicating a positive open. The threat of deflation stalking the u. K. Due to falling petrol and food prices. China taking advantage of lower Oil Importing crude at a record level in december. Trade data surpassing expectations giving chinese stocks a lift. The twitter account for central demand is up and running after it was hacked by a group of isis sympathizers. Youre watching Worldwide Exchange. Bringing you Business News from around the globe. And if youre just tuning in this Tuesday Morning thank you for joining us on Worldwide Exchange. Hets get lets get you up to date on how markets were performing yesterday. The biggest weight on the markets as oil fell about 5 in yesterdays trade. Oil continues to move to the down side. Wti now below 46 barrel. In terms of where we saw the move in the equity space, financials selling off tech also a loser, Companies Like apple, yahoo and google all closing in the red as we kick off the earnings season. Right now futures indicating a higher open. Were looking at the dow up about 50 points. The s p 500 up about 4 and the nasdaq up about 10 points in premarket trade. Lets dive into the european markets. The speculation continues ahead of the meeting on january 22nd. What type of Bond Buying Program will be put into place. Ahead of that were seeing european markets higher. Ftse 100 up about 30 points. Markets responding positively again. And the cac 40 up 25. Were seeing moves to the upside. Take a look at the euro stocks 50 its a good gauge of the euro zone and the other big story is commodities. Were seeing an accelerated decline and the wti crude now trading down about 2. 5 trading below 45 barrel. Lets look at brent crude, trading at 46. 35 down just about 2. 3 . We should point out though here we go gold we seeing a bit of a safe haven buying in todays trade. Gold is trading at a 12 week high right now trading up by around half a percent. Joining us to learn more about what to expect Going Forward is chad. Thank you for joining us. I want to get your thoughts on the move were seeing in oil. Is it a shortterm positive but a longterm negative . I happen to agree with that. I think it does imbolden Consumption Patterns in the United States. It does tell a sign that the Global Economy is shifting down a little bit. Not only within the euro zone but the chinese economy which is going to put a lid on oil prices in the next six months. So the 45 number investors should get used to that number and perhaps, you know put that into their analysis Going Forward. Given the move were seeing in oil interestingly enough equity markets continue to see these wild swings. We have seen the dow witness five Straight Days of triple digit moves. What do you make of the recent volatility were seeing in equities . Were going to see it Going Forward for 2015. I think what it generally is is that the Federal Reserve is curtailing the liquidity program. You have the ecb thats going to be moving more aggressively in the coming month and what you also have is just a misunderstanding about where the valuations are and how investors should be squaring their portfolio. So what were expecting for 2015 is that the United States will have a positive return of between 5 and 6 and we would be overweighting u. S. Equities at this point. But to say 5 to 6 which is a small amount for the course of the whole year presumably theres going to be a great deal of volatility in order to get to that point. So would you understand if a lot of investors think ive had great gains thus far and now its time to take my foot off the gas a little bit . Yeah absolutely. It wouldnt shock us at all if you see a 10 to 15 correction over the course of the next 4 to 6 months. Look weve had a terrific 36 morally here within the u. S. Equity markets with very little sell off. A 9 10 sell off one or two times over that 36 months is really an anomaly. When looking at the markets though Going Forward over the course of the next three to five years investors though have to keep a careful eye on Global Growth, the u. S. Economy as well as earnings so were going into earnings season which should be some what disappointing when you look at it from you know looking at it over the course of this session. So we can be some what more pragmatic about investing at this point. I wouldnt say were very bearish but just a little bit more prudent with what we would select in our portfolios. You mentioned Global Growth there very important. If we do start to see a bit more action from the ecb could that make you turn more positive on the outlook for Global Growth . I wouldnt. No that may gen up the Financial Markets in the short run but the transition period to credit growth which is a real impulse within the euro zone is really troubling and not moving at a naturalized growth trajectory. Therefore you have a real gdp expectation in the euro zone thats a half a percent in 2015 and youre seeing it up and down the yield curve in europe. Thank you very much. For now. Well be back with chad in about ten minutes time. Chad morganlander. Portfolio manager at stifle. Shake shack is announcing plans late last year for a new york listing. The upcoming debut will put it in a growing category of publicly traded restaurants. The company also following the footsteps of Habit Restaurants. The california based chainsaw shares more than double on its november debut but its now trading shy of the initial closing price. Lets bring in from the icr Exchange Conference in or landlando, russ, the ceo of Habit Restaurants. I want to get your thoughts on the u. S. Consumer. Were seeing employment strengthen Consumer Confidence rise. Sentiment improving as well. Is that helping your fast casual restaurant and your customer as well . It certainly is. As the economy has strengthened you know Consumer Confidence has improved and restaurant sales traditionally mirror Consumer Confidence pretty closely. How do you fend off competition in the fast casual space. Specifically those that have burgers on their menu Mcdonalds Burger king shake shack, its a crowded market. Yeah it is a crowded market but, you know burgers are americana and without question the consumer has a high demand for them. Always has. And we see that lasting a very long time of course. Lets talk about your expansion plans. Moving outside not just your home state but your home country. Tough on your plans to expand in america for us. Yes you know we have been growing at a, you know at a fairly aggressive pace for the last five years and our plan for this year 2015 is to open an additional 26 to 28 locations here domestically. You know primarily focused on the west coast. But about 20 to 25 of our new locations here in the states will be in the east coast. Were opening our second new jersey location. And well also go to the washington d. C. Metropolitan area this year as well as here in florida. And then interestingly looking at your plans to expand the board, you have focused on the middle east to start with. Explain the rational for that. Yes, you know thats a new opportunity that we announced recently. We have an agreement with food quest to do up to 50 restaurants over the next seven years in the uae region. They came to us. They were kind of brand followers for a long time and we had discussions with them and felt that they shared a lot of the same values that we did. They had infrastructure in place and were committed to be a great partner and we really look forward to that new opportunity with them. We have seen consumers shift to fresh and organic food. Do you think that appeal to that Health Conscious customer without inflating their costs, how do you, i guess, capture that trend Going Forward for your restaurant chain . Yeah the consumer you know has definitely migrated the palate here in america certainly is looking for higher quality, higher flavor profiles made to order. Theyre willing to pay a little bit more but that certainly mays well into the habit and you know a lot of the other fast casual brands that you mentioned earlier. All right. Were going to leave it there. Ceo of Habit Restaurants. The stock down about 25 over the past one month. I have to say all of that has made me unbelievably hungry. So hungry. Love it. Well we have lunchtime coming up soon wilfred. Lets take a look at the other top stories at this hour. Ohio state has been crowned National Champions winning the First College football playoff monday night. Beating oregon my hometown 4220. The buckeyes were lead by running back elliott that piled up 246 yards on the ground and scored four touchdowns. This is the 8th title in ohio state history and the fifth out right and third for urban myer that won at the university of florida. I hate to say i told you so but as i said yesterday after an amazing result for ohio against alabama it was i called it. I got it right. I appreciate your Market Research you did ahead of this ncaa chat. Im very sorry. We got to the finals. Thats a big deal in itself right . Absolutely. Now coming up hackers have struck at retailers and hollywood and now a new target the u. S. Military. All the details after this short break. A black wry, for the little blue box. Tiffany shares featuring their lost day in ten years. Cutting its guidance following a disappointing holiday season. Much of that having to do with weaker sales from japan. Shares ending down about 14 . Keep in mind also underperforming. Only just over one year but another underperformer yesterday in the u. S. Was twitter. That followed news that the twitter account for the u. S. Military Central Command had been hacked. Its now reportedly back up and running after the hack yesterday. For more on that story lets join landon who joins us. Good morning to you. The twitter and youtube accounts for the u. S. Central command were taken over briefly on monday by a group of isis sympathizers. The group posted threats to u. S. Soldiers and the message i love you isis. They also published documents including the addresses of two former u. S. Generals that retired several years ago. It doesnt appear the information is classified and much of it can be found online using google searches. They oversee u. Sflt troops deployed in the middle east and afghanistan and orchestrated air strikes on iraq and sere wra. Its based in florida. Its youtube page had featured video of the air strikes which were replaced by isis propaganda videos. It suspended the account about 30 minutes after the first tweet was posted by the hackers. U. S. Officials acknowledge the incident is embarrassing but are down playing the importance. While theres something to take seriously theres a big difference between hacking a twitter account and a data breach. On monday president obama announced new proposals to boost american Cyber Security following recent high profile hacking incidents including Sony Pictures which is blamed on north korea. The u. S. National Counter Intelligence center chose monday to join a twitter. They made a joke saying up to 292 followers so far and not hacked yesterday. Back over to you. Thank you very much. Now the white house is warning that president obama will vie to a republican backed bill in congress that would scale back financial reforms including the rule that bans banks from making risky bets and investing in private equity and hedge funds. It would delay a provision to collateralize loans. Theres close to a settlement for inflating ratings on Mortgage Backed securities before the financial crisis. S p could pay 1 billion equal to a full years operating product. Its the only Ratings Agency sued by the u. S. Government. It says its being singled out because of its downgrade of the rating in 2011. Mcgrawhill trading down 1. 4 . Now before we go to break lets remind you of our headlines at this hour. Wti falls below 45 with brent at a fresh six year low. Markets shrug off the route with futures educating a positive open and u. S. Central commands twitter back up after it was hacked by a group of isis sympathizers. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Welcome back. Lets have a look at european markets. Yesterday it was thoughts of easing and it was a similar trend today and allowed europe to buck the trend as Oil Prices Continue to decline. Lets also look at commodities. Wti and brent are both off the best part of 3 today. Wti at 44. 8. Brent at 46. 1 and we have seen a little bit of a rally in gold in recent trading sessions at a 12 week high just pushing the 1240 level. Interesting enough decline in oil prices weighing on the energy sector. Energy the weakest sector down about 10 over the past three months. Thats been weighing on u. S. Equities but look at futures. Theyre imlying a higher open. The dow jones with a 72 point gain in premarket trade. Dropping for the second consecutive day yesterday. Earnings could really change investment sentiment. Alcoa beating forecasts on a boost in demand from the auto sector. Higher prices and lower energy costs. The company sees solid demand this year from the auto and Aerospace Industries and earning season getting into full swing this week followed by csx. More importantly tomorrow is j. P. Morgan with a busy few days of Bank Earnings along with wells fargo, bank of america, city group, black rock and friday we hear from goldmans sack. Portfolio manager. I want to talk about health care. Its expected to see a 16 rise in profitability but the sector is already trading at an all time high. Is it getting too expensive to put money to work in health care right now . Well you could still see seams of opportunity within health care. It has had a tremendous run over the last 24 months but we do favor some companies which we as Value Investors do see longterm Great Potential over the course of the next 12 to 24 months. Theyre one of the worst performing sectors in yesterdays trade ahead of a slew of Bank Earnings coming up this week. Yes indeed. In fact we would be underweight financials at this point as the Federal Reserve moves away from their liquidity program. We would be some what more pragmatic within that sector and when it comes to the overall earnings picture for year over year were expecting Revenue Growth within the s p 500 of roughly about 1 to 2 as well as earnings up 1 to 2 . In fact thats due in part like you mentioned because of the oil sector. Lets just dive in on that before we come back to your other sector picks because 1 to 2 of Earnings Growth doesnt seem much at all given the run weve already had and lets come back to a point we mentioned earlier. You should be arguing for a much more bearish view than suggesting 5 to 6 gains of equities this year if we only get such small Earnings Growth. Well we do believe that over the course of this year you will get about 5 to 6 s p earnings that will be back end loaded but you are correct, okay thats why i mentioned in my previous segment that we wouldnt be shocked to see a 10 to 15 correction. Now within our portfolios i would like to let you know that about a month, month and a half ago we took our waitings on equities from overweight back to a neutral weighting so were starting to move up the spectrum of investments, the quality spectrum because we do believe theres potential for market correction. Lets talk about some of your sector picks, in particular Consumer Discretionary is your top pick. Is that predicated on the weak oil price. It is. We have been overweight Consumer Discretionary for a year because we have been underweight oil. We believe oil prices will be some downward pressure so Consumer Discretionary you dont have to go farther than looking at a walmart, a target also t. J. Max and, in fact a new edition to our portfolio has been ralph lauren. Chad morganlander. Interesting you were pointing to a market correction. A 10 to 15 move to the down side. When do you think that will come . Quickly . The problem is its been 36 months of less than a 10 correction which is an anomaly. We believe because of the Central Bank Movements within ecb as well as whats happening within the emerging markets and the Federal Reserve becoming a little more hawkish that can come in the next 4 to 6 months. Weve had this anomaly where you havent had this massive correction or modest correction. Thank you. Take care guys. Thank you so much. That does it for us on Worldwide Exchange. Im wilfred frost. Squawk box is coming up next. Good morning crude prices plunging overnight as one of the biggest opec producers stands by the cartels position to keep output steady. Trouble in tech land. Shares of google now down 19 from their 52 week high and apple isnt fairing much better. Off about 9 from its best levels in the last year. Both of those arent 52 week highs. And the hacking of america, troubling questions about the security of the nations systems this morning after the twitter and youtube accounts of the militarys Central Command are breached but not to worry its tuesday, january 13th 2015. And squawk box begins right now. Live from the most powerful city in the world, new york this is squawk box. Good morning everyone. Im becky quick along with joe and andrew. Congratulations to ohio state. The buckeyes beating oregon 4220 last night. The First College football playoff National Championship. In the old system ohio state would have never had a chance to win the title. It began the First College playoff as the fourth and final seed. This is the buckeyes First National title since 2002. Well talk a loit moret more about the big game and the big money behind it. Did you stay up to watch. I watched the first drive. The first thing we