they receive state aid. the prime minister warning all could close if the government doesn't help. >> you're watching "worldwide exchange," bringing you business news from around the globe. >> very good morning to you. plenty of data to get to this morning, including the business climate index falling in october. we hit 100 in october. the reuters consensus forecast was for 101.5. the climate continuing to fall. the current conditions index, 107.3 versus the consensus forecast of 109.8. so both those measures weaker than expected. expectations index 93.2 versus the forecast for 93.7. euro just falling now to a

session low of 129.47 after that disappoi disappointing survey. no revision to the september indices. and just to recap, a short while ago, we also had the composite pmis as well. 46.2, slightly weaker than the reuters poll of 46.4. the business expectations index 47.8. it was 49.4 in september. that's the lowest since february 2009. the october manufacturing pmi 45.3. again, weaker than the reuters poll of 46.5. so the pmi and apple index 44.8 as well, and that's down from 49.7. so eurozone business in october continues suffering the biggest

recession. joining us is chris williamson, global chief economist, which puts all that data together. take the german pmis, take your composite pmis, not cheery. >> it's not a good picture, no. the survey is pretty unanimous, saying the zone is going through a tough moment, the worst since 2009. these are really bad numbers. what's interesting is the official data haven't quite caught up with that yet. they're still suggesting a sta stagnation. >> if you were going to translate this into gdp numbers, hard data, what would the read-through be? >> well, we're looking for the region as a whole, a gdp collapse of around 5.6% in the

third quarter and that same rate of decline as we go into the fourth quarter. that sort of contraction is what we're seeing at the moment. that matched the pmi reading in terms of how you would look at gdp. so france has joined the periphery, if you like. germany is showing some resilience, but nevertheless -- >> october manufacturing pmi came in this morning -- what was the flash estimate? 45.7. now people are looking for number 48 on that. >> way off the mark. >> what's going on there? >> people have been looking at the official production data, which have been stronger, especially for germany and france, than the business survey. so they're saying well, there's a lot of noise. the surveys are going to bounce back more in line with what the official data are saying. that's not the case. it looks like it's going to go the other way around.

it's a pretty gloomy prognosis for the coming months as well. the business expectations had fallen. going to bounce back up, surely maximum business sentiment is going to improve. that's not happened. it's gone in the other direction. >> we're talking about the chinese data. how much of this is pure euroareuro area and how much is slowdown in the rest of the world? >> what we've seen in recent months, there was a glimmer over the summer and more so in october, and that is the euro area produces, and service companies are suffering from weakness in the eurozone, but more so weakness from asia and to a lesser extent, weakness in the u.s. as well. asia slowdown really hittin>> i

cart and horse on that. the euro is falling to a session low, post those two bits of data. bund futures extending their gains as well. may not do anything for stock sentiment. talking about asia, china's manufacturing activity was up at a three-month high. the early read suggests the recovery. that wasn't enough to stop a 12th consecutive month of pmi contraction. some analysts still see the need for further stimulus. what is this telling us? are we now on the bottom of the downturn? not the downturn, the slowdown? >> possibly. it's too early to tell. it's only just in -- >> suggest there the chinese survey, the official government one might come out above 50. >> it may well do. but i think one of the

interesting things was that the rate of decline has eased quite significantly. the smallest fall for five months. but in there, when we were reading through the reasons, they were saying that their trade had been disrupted due to the spat between japan and china. if we perhaps make a mental allowance for that, it suggests that export orders are falling at a far weaker rate than they were before. fourth quarter is looking better than the third. >> it comes back to what we were just saying about europe, europe being infected by asia, but if china is supposed to be exporting to europe, then those -- i don't know which one is pushing which. >> obviously there's trade both ways. but what we are seeing are there's some glimmers of hope that the downturn has passed. but against that what we're seeing is more and more companies looking at the

outlook, hearing words from people like the imf and saying okay, it's still tough times, let's move back. we've seen this in some of the earnings reports as well. morgan is saying it's not looking great for next year. let's cut back. that's the general mantra at the moment, it seems, globally. >> chris, i think we're going to let you go on that point. chief economist at market. don't forget on today's show, we're going to be in tel aviv, where we're told exclusively that further action is needed on iran. facebook has dispelled fears about its ability to monetize. we'll announcements live from connecticut. volvo has missed estimates it's warned a flat demand. we'll be in stockholm to speak

first to the ceo. that's 11:20 cet. so, global equities not a pretty day on weert either. and you can see we're down again. decliners outpacing advances here. so let's pull you up for those stock indices. just down a quarter percent for the ftse. we did try to get a little bounce going first thing this morning. volvo missing its qe-3 expectations. we'll get more from stephane on

that. its height, its full-year revenue outlook. talking about a record for the fourth quarter. we got the apple ipad mini being launched and other products as well. it's pushing on again from yesterday's gains, up another 2.25%. ten-year yields nudging back. ten-year spanish yields up to 5.7. so heading back towards the 6% level. yields heading lower once again on bunds. euro/dollar down to session lows at the moment. got around 129 -- let's show you where we are. dollar/yen back below 80. did get something of a benefit from the china pmi numbers. and sterling/dollar below 160.

the dollar getting something of a boost. that's where we stand right now. let's get more on that asian trading day. li sixuan is with us. sixuan? >> thank you, ross. asian markets mostly lost ground, but avoid ed -- the han seng also managed to finish in the green by about .3 of a percent after yesterday's holiday. brokerages sacked, but power producers led support to both forces. reported income. pc makers with losses after layoffs. apple suppliers had very mixed showings as investors were skeptical about the ipad mini's

ability to compete. nintendo shed 5% ahead of earnings. mobile operator kddi gained over 1% of its report card. more on those names a bit later in the show. elsewhere, south korea's kospi extended a four-day losing streak. auto makers tumbled on a strong currency. but the apple supplier surged after posting smaller than expected losses. we'll have more on this with our guest just ahead. australian shares fell to a one-week low. higher than expected inflation in 3 q 3 damping hopes. >> it can't confirm a report in a domestic paper that claims that dprooes has won a two-year extension. the report doesn't cite any

sources. last night in a televised address, the greek prime minister insisted talks are ongoing. it helped portugal reduce its budget deficit, but stripping out that game. revenues actually slumped while spending rows. at the same time, planned cuts face a legal challenge ahead of the country's judges union. the draft budget is likely to be illegal and it should be evaluated by the constitutional court. and the ecb chief to talk about the central bank's response to the eurozone debt crisis, specifically the ecb's plan for unlimited bond purchases. silvia is in berlin and joins us now. what's the number one question, do you think, lawmakers want to ask mr. draggy? >> there's two parts of it. germans are always obsessed with inflation, so the largest number

of this 120 or so people who are sitting on the budget committee and the capital markets committee and the european affairs committee are going to ask yet again about the dangers to inflation, whenever we're heading. the second question is what the ecb does still within its mandate. is this still monetary policy? if what they're doing, if the omt is a monetary policy measure that is absolutely necessary to repair dysfunctional markets, why hasn't it happened yet? why are there political conditions set to dispensing monetary policy to doing its job? these are questions that are buzzing around here. has the ecb actually abandoned monetary policy a long time ago and entered into quasi fiscal policy? there's a lot of talk about that. but also, of course, the accountability of the ecb, if the ecb is asked more and more

to take on tasks that it wasn't originally designed to do, to embark on crisis management, to embark on repairs of fiscal disparages, then the ecb must become more accountable. must become more transparent like the fed in the u.s. where have the trillion euros gone? which banks benefited from it? these are questions that the members of the various committees that we've been talking to have been asking us and say this is what we would put to mario draggy, saying basically okay, if you step up to the fray and buy us time, you still have to tell us what you're doing. i asked him among oher things also about the dissent between the icb, between mario draghi,

and the bunds bank. he said this is a healthy conversation, but it has to become transparent. we have to know exactly what is going on and maybe something positive can come out of this debate. this is what he had to say. >> i'm not quite sure whether in older times there hasn't been a debate between the central bank. the new thing is that they are much more communicative at the moment. and my recommendation to the monetary policymakers, keep things calmed down as well. a good decision always, and a good controversial discussion is always at the start of a good decision. but whether it shall be made up in the ecb council, i would usually recommend to do that discussion in the ecb council and come to a common ground. >> wouldn't we all like to be a fly on the wall in these discussions with par owe draghi, but afraid not. maybe we get something out of it

after the debate. it's supposed to finish at 1600 our time, so hopefully on "closing bell" we can tell you a little bit more. >> we sort of have a sense how those conversations are going to go, don't we? >> yes, we do. and on the one hand, politicians are quite happy that the ecb is stepping up, essentially doing their job because that means they have a nice backstop position if they don't deliver on time. >> yes, but with the economic data, the spanish bond yeels are rising. still to come, we talk to a guest who thinks that europe is getting closer to ditching austerity. we'll find out why when we come back.

yesterday was the worst day for the dow since june 21st, but there were some companies, and notable exceptions. ups bucked the trend and registered the gains. they have limited exposure to both europe and china. so what we're going to ask

today, is it time to buy america? is buying america a good investment? please let us know. you can e-mail us. is it time to buy america if you're a global investor? apple has unwrapped the ipad mini, a smaller version of its popular tablet, but not at a smaller price. john ford was at the apple event in silicon valley. he's got more on the company's latest innovation. >> right here at apple unveiled the ipad mini. also an entirely new ipad, which wasn't quite expected. new ipad, full sized ipad, same price, faster processor. but the ipad mini is really interesting product here because the question is does this just extend apple's momentum in tablets, keep the growth going, or does it take it to an entirely different level? i talked yesterday about the difference between the mac mini,

which really just filled in the mac product line when apple brought that out in 2005, and then the ipod nano, which put the ipod on an entirely new trajectory. this has the potential to be that, but we've really got to see how consumers react to it when it really gets into their hands in a couple of weeks. apple is going to phase out the new ipad. they're not saying exactly what they're going to do in terms of price of that. they're keeping the ipad 2 around at $400. this gives them full, very interesting touch lineup from the ipod touch at just a couple hundred dollars to the higher end touch at $300. the ipad 2, the ipad mini, and now this fourth generation ipad, a very formidable holiday lineup going to be in stores heading into the season when they're facing competition from amazon with the kindle fire and fire hd from barnes & noble with the

nook, now microsoft coming on this week with the surface. google with the nexus 7. and who knows what other touch devices we might see from them before this season is over. so quite the battle royale among these tech companies. but apple taking quite a swing yesterday. guys, bark to you. >> that was john fortt. apple stock down 3%. have we got a frankfurt quote? no, we don't. meanwhile, facebook did slightly better. reported a third quarter net loss. revenue rose 32%, slightly better than expected. facebook made $153 million from mobile at a category that didn't exist for the company seven months ago. mark zuckerberg is talking about the importance of mobile ads.

facebook stock for once having a good session, up 14% after hours and up nearly 12% in frankfurt. meanwhile, nintendo, the world's biggest have game maker loaded its fully operating profit forecast, smaller than analyst estimates and less than its outlook earlier. the super mario creator has been struggling with a strong yen. the firm did cut its operating loss for the first six months in half from the year before. nintendo also says its new wii-uconn soles should trigger some profit growth. over in south korea, two of the country's tech majors have managed to impress. what's going on? >> hey there, ross. we do have two happy campers here. they both saw a bit of a q3 profit.

there are some glimmers of hopes in its mobile division. nice to see more smart phones in the third quarter, especially those that run on faster lte networks, that are taking off in korea, japan, and the u.s. analysts expect lg's mobile business to report its first annual profits in three years. they managed to turn in a net profit. that's because despite falling demand, this was partially offset by gains and foreign exchange. looking ahead, they are seeing stronger in q4. during a press conference, the company's vice president promised a curb inventory and a cut investment to keep the profit margins high, and this year closed higher by around 4%. back over to you. >> thanks for that.

joining us now is mark newman. what do you make of these numbers? doing slightly better. >> yeah, i think you manage to eke out a profit on the mobile communications side which is slightly better than we had all anticipated, but it's a very slight profit, and i think if you look at the scale of the business now, it's not that impressive really. the revenue has slapsed recently over the last few quarters, and they're not significantly gaining shares back. so although they've managed to eke out sets there, i think overall not that great. >> yeah. the memory chip maker operated before the market opened shares up, because the loss smaller than expected. what's going to happen with demand for memory chips, do you

think? >> i think demand is very robust. you know, what we're seeing right now is prices are quite solid. they've increased quite a bit in the last couple of months. the last tw weo weeks, they werp 17%. i think that we're going to see a rebound into next year. d-ram, on the other hand, half of demand is still pcd-ram. it's still quite weak mainly because of pc shipments being very, very weak. because of that, d-ram prices continue to be quite weak, which continues to be a headwind for all of the memory players. but what i believe is going to happen is we're going to get a rebound in deram prices in 2013 after the acquisition. >> they've got to take supply out, but the demand picture is going to continue to decline

really. if you're not in the mobile space, it's getting hard, is it? >> yeah, that's pretty much true. what you're seeing in d-ram is it is very, very week. the companies that are strongest are samsung and hinix. offsetting some of the weakness in pcd-ram. however, it's part of the d-ram market, it's becoming quite a drag on the overall supply demand balance for the industry. >> okay, mark. thanks for that. still to come on the show, we'll be in tel aviv later to hear an exclusive interview with the israeli finance minister. he says more action is needed. bob... oh, hey alex. just picking up some, brochures, posters

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these are the headlines from around the globe. flash pmi data points to further weakness across the eurozone.

hsbc's early pmi reading hits a three-month high in october. investors like facebook's third quarter results. shares jump 14% after hours as the company shows its aim to make some money off the mobile devices. we'll get more on that. meanwhile, vw says its nine-month group sales revenue, 27.9 billion is higher than the previous year. 144.2 billion. the nine-month operating profit is 8.8 and people are looking for that to be around nine billion. so the nine-month operating profit down 1.6% to 8.84, which

reflects the technology overhaul and this slump that we're getting in the european auto market. but they are reaffirming their goals to increase vehicle sales and revenue for the group to match last year's operating profit. the shares rebounding slightly on that reaffirmation. meanwhile, one stock that is taking a hit, volvo. the firm missed expectations. also warned investors that it expects no growth in its main european and north american truck markets next year. also, ford expects to announce that it will be closing a plant in belgium. executives from the u.s. car maker are scheduled to meet with staff representatives, whilst ford's european management team is set to meet the belgium prime minister and employment minister later in the afternoon. it currently employs more than 5,000 workers. persia says it's close to agreeing a multi-billion-dollar

financing deal. up to seven billion euros of future borrowing. stephane is with us from europe this week. he's covering this story. joins us for more. how are they going to get around the eu state aid rules? >> it is compatible with european rules. it's true that the french government is going provide financial guarantee. they are close to a deal with its creditors to get a refinancing plan of $11.5 billion, but it's also close to getting a state guarantee of up to seven billion euros. they will have a representation, one of the first requests made by the government was the suspension of the payment of dividends. it's been agreed by the management.

the second request coming from the government is the review of the restructuring plan. you know the commentator is planning to cut 8,000 jobs in europe and close one of its major factories next to paris. >> this is interesting. it's state aid -- it's not state aid. it's state support. i'm trying to work out what the difference is. >> probably to please the european union and to get the approval. but in practical terms, the state will give its guarantee for some bonds ammunition -- >> trying to leverage the french balance sheet without actually writing a check. >> yes. everyone seems to be happy, for the government it's a way to have its say because, you know, it's definitely -- >> the thing is i suppose, okay, so they get cheaper loans. does anybody still want to buy the cars? >> it's just a matter of

rescuing -- >> the financial arm, how is that going to support selling cars? do people still want to buy the cars? >> that's the problem. with loans. you've got the answer. but it's not addressing the main problem, which is the cost of labor in france and the competitiveness issue. it's a short-term solution, definitely. >> thanks for that. talk to you a little bit later. there is some good news in corporate. s&p trading higher. the group now expects revenue to increase by as much as 12.5%. speaking earlier on cnbc, jim was up beat about his prospects for the coming weeks. >> there is proockets of growth opportunity and it's about having a global portfolio that allows us to manage well in these competitions. don't forget, competition came out with negative growth rates

this quarter and we're coming out with very strong growth. so it shows that we have the right strategy. >> and shares are falling after company posted its fourth straight loss in the third quarter. the chip maker blamed a large write down of its joint venture and consistently weak demand. the ceo had this to say about the plans for the wireless business. >> we have announced a strategy plan -- a new strategy plan in april. they are executing the plan, and also i think improvements are important. if you look at the results, comparing q3 and the ceo, their losses have been cut by two. still, there is a lot to do. but the progress is visible.

>> meanwhile, yahoo! japan are out with fresh earnings report after the market closed. now we have the breakdown. >> the earnings season is now in full swing. here are some of today's highlights. nintendo posted an operating loss of $363 million in the six months ending september 30th. that's half of what it was a year ago, but diminished sales of its wii game consoles is still weighing on the bottom line. for the fiscal year ahead, the firm lowered its operating profit forecast to $250 million, from $438 million forecast in july. meanwhile, yahoo! japan group increased by nearly 12%. japan's most popular internet profit site operators cited growth in ad revenue. the firm forecast as much as 1.4

billion in net profit for the full business year. the net profit for the fiscal first half dropped 43% on the year to one billion dollars. japan's second biggest mobile carrier booked losses as frequency changes led to facility cuts. it kept its outlook mainly unchanged. sales of iphones along with its newest batch of android hand sets are expected to drive earnings over the medium term. back to you, ross. >> that's the latest from tokyo and the nikkei. central bank watch, policymakers in new zealand and the philippines are holding their respective rate setting meetings. on the earnings front, in greater china, tmc, all turn in report cards as well. we're just over an hour and a half into the european trading day. we hit the lows 40 minutes or

so, we are flat right now. the ibex down about a quarter of a percent. ten-year spanish yields, 5.96%. we started around 5.59. we're actually slightly better than we were. just above that at 129.36. a long way off that one-month high. meanwhile, the dow had its worst day since june 21st on the back of disappointing earnings. it's been a disappointing earnings season so far. 61% of companies missing revenue expectations. you can see at the moment futures are just indicating a shie slightly negative start.

good to see you. we're going through disappointing earnings. you look at pmi, particularly what's going on with the german economy. >> it's what we've been saying for quite a while. coming into the q3 earnings season is always going to be quite difficult. volvo has very interesting reporting, given that it's showing something which is happening across the board. you had weakness in europe, as we'd expect. we've got weakness in asia and strength in latin america, and if you look at the q3 earnings season in the u.s., especially with dupont, caterpillar, it's a very similar story, where domestic demand is okay but not great. >> and we've got this question we're running today, the likes of whirlpool, upi. the businesses are pretty much

the u.s. consumer outperforming, doing much better than everybody else. is this the time to buy america and forget everybody else? >> we've just come through another large scale round of quantitative easing. we saw what happened ahead of that market rally. they really wanted quantitative easing. this has been cheap money for the u.s. because we needed employment and consumption to start getting back on track again. and in fairness, that has started coming through. the u.s. is a large component of u.s. companies. it needs the growth from china, from asia and it needs europe as well. >> we might now be srt of a growth bottom in china. is it too early to tell? >> who knows. we've been debating this for years. >> it doesn't look like a hard landing. >> it does look like a hard

landing. the chinese are particularly good at managing their own economy. my gut feel is we'll get more downside, we'll have more slowing, especially in china and asia as a whole before we start to see it picking back up again. the risk is if we don't start seeing the u.s. picking up, which i've talked about a lot, is that we need to see a robust, a strong rebound in the u.s. >> what do you categoryize a strong rebound as? >> consistent quarter on quarter growth. which we're not having. >> meanwhile, europe remains -- >> europe is between the two. we're right smack in the middle of the q3 season for europe as well. we've had actually not a bad start. you had electrolux on on monday. s.a.p. slightly different in terms of dynamics which drive s.a.p.

tomorrow is actually a very big day for importing. that will be very interesting. this is the weakness. >> the stocks have had a lot of support because they've been good cash generators. they've had growth from emerging markets. >> we will probably see some more sector rotation. it was interesting looking at what sectors have done this year. year to date, you've seen insurance, you've seen banks, consumer travel and leisure, real estate all significantly outperforming the telcos, the utilities. going into next year, i will be very wary about some of those

sectors. >> you're not building a positive picture. what in particular, if you're going to go short -- >> for me, i've been saying this quite a while. i think the financial sector are black box still. it's very, very differently. they've had a rally. we don't quite know what's going on inside. we've come against tighter and tighter regulatory environment. the insurance sector had a very long run, a very good run. we're coming into a much weaker rate environment. evaluations are no longer supported. none of these insurance companies get any returns. for the first time in ages, looking at some of the dull stuff, looking at telcos, which i consider a utility anyway. even tescos. it's had its collapse. it's had its issues. but now it's time to have a look at the ones that are really

underperformed. >> all right. scott, good to speak to you. thanks for joining us. ups is banking on a round of cuts. it could slash 400 jobs today. additional job cuts could then be following soon after. carolyn is in zurich with a look at this. the stock is up. >> not sure if the stock is up because of that story. wwe seen a number of these job cut stories pop up, especially local media over the last couple of weeks. let me just focus in on "the wall street journal" story and the ft story, which have a similar story. basically, the two stories say the same. they say that ubs, as you mentioned, would embark on a new round of massive job cuts in the investment banking unit, which is still pressured by cost and by falling profitability and falling revenues, and these job

cuts could be announced when the bank reports numbers next tuesday. "the wall street journal" also says the first round of job cuts could be announced starting today, and that would hit fixed income and equities trading. on top of that, it writes that there could be a reorganization or restructuring of certain units that it wants to get rid of or units it wants the keep. at this point, it didn't say how many jobs in total would be cut. both the ft and "the wall street journal" merely said that it could be in the thousands. so as you see, there's still a lot of speculation. no comment from ubs at this point. so we really have to wait until next tuesday to get more detail on that. some have said that credits was, for its part, would hold off on

announcing any massive job cuts tomorrow. >> thanks for that. commerce bank on review for possible closures, according to "the wall street journal." it is down 1.5%. now there's three top stories on cnbc.com as well. donald trump is promising to reveal a political bombshell concerning u.s. president barack obama. log on to cnbc.com for that. also, major airports are now removing x-ray machines, deemed to be too invasive. keep up to speed on the new mini ipad and cnbc's live blog, could it be another winner for apple or not? will the price put people off? all on the website, cnbc.com. we'll take a short break. still to come, iran's warning that it will stop all exports if western sanction get any tighter. we'll be in tel aviv to hear

exclusively what the israeli finance minister has to say about those sanctions.

a few companies, whirlpool, harley davidson, and ups bucked the trend in registered gains. what all those companies have in common? they did most of their business in america and have limited exposure to the likes of europe and china. so what we're asking today, is it time to buy america? you the e-mail us or tweet us. israel's finance minister said the current sanctions against iran are not sufficient to bring the country's nuclear ambitions under control. that comes amidst a new threat from iran that it will stop oil exports if sanctions are tightened. hadleigh joins us for more.

both reaffirming in the debate that they will stand behind israel in the event of an attack. teheran did threaten to halt all oil exports in the event of western sanctions being tightened. they've sent the iranian rio. i asked israel's finance minister if those sanctions have pushed iran's economy to the bring of collapse. take a listen. >> i think the sanctions are very effective and important. and this is a positive, and looking at the economy, i am not at all envious of the iranian finance minister currently. so far, they are not sufficient.

and the determination to produce nuclear weapons -- so you have to add something. that something is very strong. you have to combine two things. the sanctions, which are important. we already see. initial doubts maybe within iran. then you make it clear to the iranians. the united states will not allow them to have nuclear weapons come what may. so this together might be a way to change their minds.

you have to choose a big enough stick and to wave it wild enough in their face in order not to use it. the sanctions are a big stick, but maybe not big enough yet. >> do you think that the refusal from the white house, from president obama to draw that red line when it comes to teheran's nuclear ambitions, does that represent a failure to your government in terms of the relationship? >> i agree with prime minister netanyahu that a clear red line with a clear timetable would be instrumental, but it's up to the united states to decide exactly what they announced and when. i was encouraged by the statements of both president obama and governor mitt romney,

that iran, that they will do everything and they will consider everything, including if necessary the military option in order to prevent a nuclear possession of iran. >> now, of course, we also spoke at length about the israeli economy, especially in light of these geopolitical tensions, and the finance minister reiterated the projected growth for 2013 is at 3%. unemployment is at 6.9%. of course, he's also saying that direct investment in israel is up 40% over precrisis levels. of course, most of that trade between the u.s. and europe and israel. but they've also been looking to china and india over the last three years for an increase in international trade. so again the israeli finance minister in an exclusive interview with cnbc reiterateding his support, but also keeping that possibility open for military action over teheran's nuclear ambitions. ross? >> okay, hadleigh, thanks for

that. we did nudge down from an up position to a down post. the eurozone weaker than expected, particularly in germany. we're just nudging back after those early losses. ibex down .2 of 1%. did see bond yields in spain and italy nudge higher as well. italian yields 4.89%. on the currency markets, euro/dollar got down to 1.29. just off those lows that we hit an hour or so again. dollar/yen. auss aussie/dollar is slightly higher. we'll take a short break. still to come, volvo has missed

estimates that it's warning a flat demand in 2013. we will be out in stockholm to speak first to the coo. he'll be joining us in 20 minutes. we'll also be looking at what the fed might be talking about and all those corporate results state side from the united states. plenty more still to come on today's edition of "worldwide exchange."

this is "worldwide exchange." the clouds are darkening over the german economy. flash pmi data also points to further weakness across the eurozone. contraction too in china, but the manufacturing sector does signal a turnaround. it's a three-month high in october. new orders improving. investors like facebook's third quarter figures. shares jumped 14% after hours. the company shows it's able to make some money off mobile devices. it's now banking on sales of its latest wii consoles to revive

growth. if you just joined us state side, very good morning to you. after the falls that we've seen yesterday, we're trying to see if question get a small rally going this morning. futures are trading above fair value. not by much. ten points in the case of the dow. we're about six points above fair value on the nasdaq right now and the s&p 500 is trading just two and a half points above fair value. pretty flat right now. 1.4% for the ftse. 2% for the dax. we swung to negative territory about an hour ago. came in weaker than expected across all measures. now saying firms aren't investing. they're talk about a stagnating

fourth quarter. it was also backed up by the german pmis, which came in weaker than expected. 45. versus 48. that's had an impact. there are some stocks to be in focus this morning as well. volvo down nearly 3%. there are some standouts. s.a.b. this morning up 4%. the software maker after its full revenue outlook looks pretty good. the chip designer makes all those chips for apple and other mobile devices up nearly 3% as well. take a look at bond rates. we've seen yields in italy and spain continue to decline 4.9% for italian yields this morn. we started around about 4.85.

5.95% when we started around 9:00. on the currency markets, euro/dollar has been down this morning and we're pretty much on that. aussie dollar benefiting from that china pmi number. sterling dollar steady. but it is below 1.60. been a few weeks since we've been below that. had that chinese flash pmi number out from hsbc. sixuan has more from singapore. >> thank you, ross. hsbc's flash data shows china's manufacturing activity hit a three-month high of 49.1 in october, well above september's final rating. that's thanks to solid growth in new orders, but the gain wasn't enough to stop a 12th consecutive month of pmi contraction in the mainland. analysts say that means china's economy is still in need of a much awaited boost. the data helped support gains in shanghai and hong kong.

power plays also rose on the back of the stronger third quarter earnings report, but other voices slipped. taiwan skidded for the fourth straight day with pc makers leading the losses. the nikkei snapped a seven-day winning streak. nintendo released its earnings report after the bell. it lowered its operating profit forecast on the strong yen and tough competition from smart phones. south korea closed in the red despite improved results from lg electronics. energy majors took the shine out of the australian market, finishing at a one-week low. india is closed for a holiday. ross, back to you. >> here in europe, warning that clouds are darkening over the german economy. this after its index fell unexpectedly in october. well below economist's

expectations. the current conditions gauge also below estimates at 107.3. the business expectations index steady, 93.2. also the latest pmi readings out of the eurozone signal there's no respite in sight. all the three main indicators were below analyst expectations in october. much of that due to the weaker readings in germany. robert joins us for more. rob, this data that we've got out this morning, what is that pointing to in terms of hard economic numbers, growth figures? >> well, still negative, basically. the eurozone is in technical recession, if we look at these fig figures. the bizarre thing is why you wouldn't have expected germany to be pulled down by the rest of the eurozone. i know there's been a sort of market sentiment pickup on expectations. at some stage, the ecb is going to unleash the mechanisms it's

talked about. we've seen stock markets rallying and so forth. but actually, i think the answer is clearly no. germany is being pulled down by the periphery. that shouldn't be a surprise. that's probably going to continue for a while. >> talking about stagnating fourth quarter. could be worse than stagnation. >> well, let's hope not. germany does go into stagnation. really you've got issues. it begs the question why is germany dragging its heels over these reform measures? >> well, if their economy starts to suffer more, does it have policy implications? >> i think it does. i think actually it makes it easier in some ways. right now it's been germany against the rest. if germany has been pulled down with the rest, then all of a sudden all these measures that are supposed to be really only for the dogs of europe, if you like, that really need some help, well, actually, germany becomes one of those or starts to look a bit like one of those, then those measures are going to seem less ridiculous. >> fed wrapping up its meeting.

decision due at 2:15 eastern. no major changes are expected. they only launched qe-3 six weeks ago. does that sum it up well enough for you? >> pretty much. personally i don't think they will. i know the yields are up a little bit, but it's early days yet. it's actually very similar to what happened back when we had qe-2. almost the day after that happens, all the data starts to look remarkably good. they say this is going to be the state of affairs for years, there's going to be no policy until 2015. the data suggests it's going to be earlier than that, but we've been through this before. you have a mid year lull. you put stimulus in place.

all of a sudden the data pops up again. who knows, could be back down again. >> interesting look at what the corporate statements we were. we were talking about this. coming out and saying that the rest of the world is not as good as we thought and therefore the earnings aren't as good as we thought, revenues aren't as good as we thought. the likes of harley davidson and whirlpool, who are a pretty u.s. centric customer base. outperforming. is the u.s. the place to be? >> the u.s. does stand out at the moment. there's a thing going on in the u.s., which is a resurgent housing market. okay, it's tiny. the residential construction in the u.s. is 2.5% of gdp these days. >> it's tiny, but it's booming. >> tiny things can boom. it's growing very rapidly. at least in the sense from a very low basis. but it's more the prices that i think are important here. people are beginning to think that housing isn't just a major

sap on their household. a big drag on the labor market has been negative equity. a very small component of the growth component of gdp. i think it's quite important in terms of psychology and spending. >> you have to look at those things, yeah. >> good to see you. thanks very much, chief international economist at ing. just a reminder of what is on the agenda, we've got the market flash u.s. pmi for october due out at 9:00 a.m. eastern. an hour later, we get september new home sales forecast to rise 3.5%. look for numbers before the open from at&t, boeing, brings tall myers, eli lily, delta airlines, u.s. airways, lockheed martin, and if that's not enough for you, we get results after the bell as well. and apple has unwrapped the

ipad mini. it's a smaller version of the popular tablet but not at a smaller price. john fortt was at the apple event. he's got more on the company's latest innovation. >> apple unveiled the ipad mini, also an entirely new ipad, which wasn't expected. same price, faster processor. that was interesting. but the ipad mini is a really interesting product here because the question is does this just extend apple's momentum in tablets, keep the road going, or does it take it to an entirely different level? i talked yesterday about the difference between the mac mini, which really filled in the mac product line when apple brought that out in 2005, and then the ipod nano, which put the ipod on an entirely new trajectory, even though it was just a smaller, more fashionable product. this has the potential to be that, but we've really got to see how consumers react to it when it really gets into their

hands in a couple of weeks. apple is going to phase out the new ipad that's really only been on the market for seven months now. they're not saying exactly what they're going to do in terms of the price of that. they're keeping the ipad 2 around at $400. this gives them a full, very interesting touch lineup from the ipod touch, just a couple hundred bucks at the high end, to the higher end touch at $300, the ipad 2, the ipad mini, and now this fourth generation ipad, a very formidable holiday lineup. going to be in stores heading into the season when they're facing competition from amazon with the kindle fire and fire hd, from barnes & noble with the nook. now microsoft coming on this week with the surface. google with the nexus 7. and who knows what other touch devices we might see from them before the season is over. quite the battle royale among these huge tech companies. but apple, the biggest and strongest taking quite a swing yesterday. back to you. >> the stock down after hours,

but there's one company that was outperforming. facebook earnings beating the street. after a tumultuous ipo, is the world's number one social network now a stock that investors can start liking? more on that when we come back. plus, we'll be out in berlin where draghi is set to testify at the bunds back. speaking direct to germany's political heart. man these guys are slow. reminds me of our network before cdw virtualized it. how? cdw and hp networking implemented a virtual application network that reduces the time to deploy cloud applications from months to minutes. with fewer bottlenecks like this. finally. charles! client golf. aim for the lake. really? oh, hey alex. just picking up some, brochures, posters

copies of my acceptance speech. great! it's always good to have a backup plan, in case i get hit by a meteor. wow, your hair looks great. didn't realize they did photoshop here. hey, good call on those mugs. can't let 'em see what you're drinking. you know, i'm glad we're both running a nice, clean race. no need to get nasty. here's your "honk if you had an affair with taylor" yard sign. looks good. [ male announcer ] fedex office. now save 50% on banners.

yesterday was the worst day for the dow since june 21st, but there were some companies which bucked the trend and registered gains. what do they all have in common? they do most of their business in the united states and have limited exposure to europe and china. so what we're asking today, is it time to buy america, investing companies with mainly a u.s. exposure the place to be. the u.s. economy will not pick up until romney wins november 7th. should he not win, it will not pick up at all. europe and the market may love qe, but american business does not. if you want to join us in those conversations, e-mail us worldwide.

mario draghi facing lawmakers in a closed door session in berlin. silvia is there. he's got a two-hour grilling today, as i understand. what's going to be on top of the agenda. >> i think inflation is always something us germans are concerned about. that might be called paranoid by others. the other part of the question is clearly accountability. the ecb's role has changed since its inception. it's become more the crisis manager in the eurozone. stepping up to the fray with actions and measures and instruments that weren't

originally maybe in the tool kit, including omt, including bond purchases, including, as we move on, if the ecb is taking on the role as bank supervisor. more lawmakers in the relevant committees, but also in the general sessions saying that there must be more transparency and there must be more accountability. the ecb has to explain not only broad strokes of actions, but if there's a billion euros flushed into the banking system, which banks are getting what? who is getting the money, to which countries are they going, which banks are they going? but also, of course, how much time has the ecb bought or not bought to politicians? we caught up a little earlier with the deputy finance minister, the number two, and asked him about one of the myths and rumors that are going around

in brussels, etc., ie that the germans are not going to move on greece until the german elections are out of way. absurd, he said. here's the man himself. >> angela merkel is not the head of government who usually is doing his job very smoothly. she is working hard and tough, and the election is somewhere in the next year. so these accusations are ridiculous. they reveal an anti-merkel aspect, but they don't reveal the truth of the action of this government. they are keen to g o on with th european stabilization. >> elections always have their own agenda. i always maintain that it's a bit. a fig leaf. it's convenient to say nothing's going to happen until the german elections because then it becomes a self-fulfilling prophesy and nothing will

happen. >> no, apart from the german elections. silvia, thanks very much for that. these are your headlines today. darkening clouds over the german economy. meanwhile, china's manufacturing sector signals a turnaround pmi reading, hitting a three-month high. facebook jumps in afterhours trading, it is able to make some money off mobile devices. we'll take a short break. volvo's stock is taking a hit. we'll find out what the group ceo has to say. he speaks first to us when we come back.

u.s. futures this morning are -- trying to see if we'll get any kind of bounceback. the applied open at the moment is just up three points. the nasdaq currently up six points. european markets have been in and out of the red this morning. we tried to get a rally going. right now we're back in the green. the ftse and ibex up around a quarter of a percent. the business software group raised its 2012 sales outlook and now expects revenues to increase by as much as 12.5% to

reflect the acquisition of ariba. speaking earlier on cnbc, the co-ceo was up beat about the prospects. >> there is pockets of growth opportunity, and it's about having a global portfolio that enables us to manage and maneuver well in these conditions. don't forget competition came out with negative growth rates this quarter, and we're coming out very strong growth. so it shows that we have the right strategy. >> volkswagen seeing its profit fall, and the worsening outlook for the european car market. but the german auto maker still thinks its revenue will rise in 2012, and then operating numbers for the full year will come in at the same level as 2011. ford's european management team

is set to meet the belgium prime minister and employment minister later in the afternoon. the plant currently employs more than 4,000 workers. according to the firm's cfo, will be finalized in the coming days. peugeot has agreed buybacks whilst the state guarantee is in place. volvo's stock is down around 4.5% on the day. also warned investors that it expects no growth in its main european and north american truck markets next year. joining us for more is the ceo of volvo group. thanks very much for joining us.

you had operating earnings a year ago, 5.8 billion for this period, 2.9 billion swedish crowns now. what exactly is this market like, just describe it. >> the third quarter for us has been characterized by two different things. lower demand that really came about in september. september is normally a month when our orders start to peak up in order to prepare for the q4 production. it didn't happen. therefore we decided to really break and put our foot on the brake and thereby making sure we didn't overproduce. and by doing that, we created the underabsorption cost and moved very quickly on that. that's one part of the low demand. we had had cost items in the result this year. one is a restructuring of our japanese business, and the

second one is an adjustment to warranty provision that we have done as well. if you take those away, the underlying profit in the track business was reported around 6%, which is a -- i would say giving the breaking we have done, a decent result. >> yes. what happens now to your -- the key european and u.s. markets and how are you going to respond with production levels? >> well, i think we're going to be extremely observant over the next weeks and months to come to see where this goes. because in europe in particular, there's a lot of uncertainty in the markets. and that also reflects our 2013 forecast that we have put forward where we say it's flat. but it is combined with a lot of uncertainty. then if you look at the u.s.,

there is also uncertainty, and the uncertainty there is of a little bit different kind. it's also a budget discussion uncertainty coming up in the u.s. in the u.s., you see that our customers are moving, our customer is making money. we do see spare parts holding up well. and then finally if we look at south america, we have had a tough first year in growth, but now we definitely see that it has sort of cut the corner and we see more stable positive signs. so all in all, i would say that we are calling the 2013 market equal to 2012. talking about the united states, if we have a clear cut election result and this may be a big if, we get some certainty around the fiscal cliff, what would that do to business confidence in the united states, and how much would that change the market there, do you think?

>> i have no opinion or any views on that. i think we have to wait and see. i think that that process has to have its course right now, and then we would see what comes out of it at the end. >> because you say these uncertainties are holding back clients from spending, i just wonder if we remove those uncertainties what things would look like. >> the fact is if you look at the retail in the u.s., it has been holding up quite well, but they have sold off from dealer inventory and the dealer has not placed orders into the industry. that is also part of the

uncertainty there. we are following it very quickly and we will see what will come next here. >> okay, thanks very much for joining us. we appreciate your time. we'll take a short break. still to come on "worldwide exchange," we'll look at the fundamentals behind yesterday's u.s. selloff. plus, we'll break down facebook's third quarter results and see if there's still an opportunity here to investors in emerging markets. plenty more to come.

this is "worldwide exchange." the clouds are darkening over german economy with a surprise fall in business confidence. pmi data also pointing to further weakness across the eurozone. contraction too in china, but the manufacturing sector does signal something of a turnaround. hsbc's reading has hit a three-month high in october thanks to improvement in new orders. investors like facebook's third quarter results. the company shows it's able the make some money off mobile devices. >> welcome to the start of your trading day. after the selloff we saw yesterday, we might get a very small bounce at the u.s. open, but it's not exactly big. we're only caught up about two

points. the nasdaq and the dow is currently up some two points. european stocks have been either side of the flat line. they were dragged down an hour or so ago, hour and a half ago by weaker pmis out of germany. you can see that fall there. we've bounced back, but nevertheless it is pretty flat right now. european stocks mixed either side. we're pretty flat for germany as well. here's what some of the experts have been telling us this morning. >> i'm looking to buy at the 128 level. as soon as the spain bailout is announced, i'll be looking to look out for those really.

>> turkey, indonesia, sub saharan africa is getting a lot of attention. and in latin america, colombia, peru, mexico, i think people are really looking for potential investments in these markets. the pricing isn't as high. >> must be a bit cautious. what we do right now is we pick up solid companies, which we also intend to hold for a longer time and i think there is still plenty of opportunities around. >> just getting a report here from reuters, which suggests that eu antitrust regulators are set to charge microsoft today for breaching a 2009 ruling, which ordered it to offer a choice of web browsers to consumers.

it could be the first step in what might be a possible hefty fine. so this is coming out of reuters this morning. the eu regulators may well charge microsoft over the browser choice. microsoft is expected tomorrow to launch its new windows 8 and a new tablet as well will start being sold. also got germany just coming out with some auction results. they've sold their ten-year to the bund average yield, 1.56% higher than september. that is the highest yield at auction for a ten-year since april, despite the fact that we have pretty poor pmi numbers. china's manufacturing activity up to a three-month high in october. it was thanks to some solid growth in new orders. suggests we may get something of a recovery. the game wasn't enough to stop a 12th consecutive month of pmi contraction in the mainland. many analysts still see the need for further stimulus. joining us to talk about china's other emerging markets is

morgan. good to see you. thanks for joining us. there's a lot of questions about whether we're now sort of bumping along the bottom of the low point of growth for china. i guess the thing is that the chinese equity markets, whatever has happened with chinese growth has been a pretty dismal performance compared to the rest of the world. is that going to change now or not? >> look, i think we hit the trough truly in china in the first half of this year. these data are the continuation of a gradual sequential recovery in china. what we haven't yet seen is signs of real turbo charged growth that would drive consumption of commodities and activity in heavy industry to support broader growth across the world. that would take faster activity in the property sector in china, and that is not yet evident in the data. >> so what do you do with chinese stocks?

>> i think the reaction has been pretty muted. that shows that this type of sequential activity has been baked into opportunities. i think there are opportunities for stock selection within china, but i think the way you play china in an emerging market strategy is more broadly -- not just looking at stocks listed in china, but thinking about companies as far up field as brazil that sell iron ore to china and others throughout the world that are dependent upon that chinese demand. >> that's interesting, because to play the global china plays, it depends on whether you think there is going to be greater demand, whether we priced in the slowdown. for example, also in resource stocks. >> that's right, so you have an iron oher producer that sells a substantial portion of its output to china. you have companies like rio in australia. all of these companies are directly dependent upon that strong demand from china, which

is not yet evident to the degree that it was just a year or two ago when the chinese authorities were providing massive stimulus. that stimulus is now largely worn off. there is still some. but the capacity to provide additional stimulus this time in china is more limited because authorities are worried about inflation pressures, and i think also authorities want to set themselves up as a new administration comes in later this year to show some early progress. so i think you still could see additional stimulus coming in china early next year. >> your biggest sector hold is brazil, 15%. this is a country that has been intervening this week once again because they're worried about appreciation of the real. how much of a headwind is that? >> i think the real has actually been regulartively stable lately. authorities could benefit from a gradual appreciation from here of the real in order to contain local inflation expectations, but they're trying to balance that with a need to keep their companies competitive.

the brazilian job numbers have been dismal lately, and part of that is because local costs have become so inflated that it's difficult for companies in brazil to compete. what the brazilian companies need to do is in turn support profitability for their companies. >> why is samsung your biggest holding? >> look, here's a company that's done very well in recent years. i think it has more room to run. obviously there's controversy about the conflict with apple over intellectual property, but the glax product line has done extremely well, beating expectations, grabbing huge market share. and i think there's more room for that to grow, particularly in emerging markets, where many consumers can't afford a $600 iphone. >> fair point. thanks for getting up early as well. morgan harting joining us from alliance bernstein investments.

yesterday one of the worst days for the dow, the worst day since june 21st. there were some companies which bucked the trend and registered gains. what do all these companies have in common? they do most of their business in the u.s. and have limited exposure to china and europe. what we're asking today is buy america right now good investment advice or not? join the conversation, get in touch with us. you can e-mail us, tweet at cnbcwex or direct to me. as global growth slows, so does american equities. more or less a positive effect here. so saying buy u.s. dollars. don't miss out on the conversation. get involved with us. we'll take a short break. plenty more to talk about. facebook doing pretty well after hours. they can apparently make money. we'll get into that when we come back.

pretty rough session for u.s. stocks, disappointing, the dow down 233 points, the third worst decline of the year, the biggest since june 21st.

jim joins us for more. jim, good to see you this morning. put some context around yesterday's move. what does it mean? >> well, i think we're still in the early innings of volatility event here, so the biggest mistake would be for investors to take too cavalier a view of what's happened over the last week and rush in on the long side of equities. >> okay, so you think -- do you think these are early tremors? how is this going to play out for the rest of the year? >> we do think these are early tremors. just the setup into the last week, the volatility trough that began in june, we thought would last about four months based on historical precedent. when you layer on the fact that the seasonal annual peak for volatility is typically this week, that's over the last 20 years, and the fact that over

the last five years, that's actually pushed out to november. we think that defines the period -- essentially the bull's eye, if you will, of when this volatility event will play out. if it's a relatively low volatility event, that's happened eight times since july 2007, it will play out over about a month period. the s&p 500 will come in about 8%, which suggests another 5% to go. we've had two volatility shocks, though, over the last five years, that got vicks into the mid 40s. that's a much more severe event in both cases, the s&p 500 declined about 16% over a two-month period. that equates to around 1,200 in the s&p 500. so we're thinking more moderate, but people should be mindful that this could be a more severe volatility event. >> okay, so you think that the low number is the more likely target. but nevertheless, volatility is going to pick up more still is

what you're effectively saying. so what will be the quality with how weak stocks might get? >> again, if we're looking at a peak, around 8% historically and about twice that with a more severe event. >> how much downside protection have you seen investment houses buying in the last couple of weeks? >> a decent amount. if you look at vick's open interest in options the last month or so, it's at an all-time high. the call ratio there which actually historically has been very predictive of these type of events is at or approaching historical lows, so certainly in that product alone, it suggests that investors have gotten positioned correctly. that said, overall option flows and stock flows certainly in the u.s. did not suggest that -- at least our clients, investors are

protected i think to the degree that they should be. >> jim, good to see you. a reminder of the headlines if you're waking up today. darkening clouds over germany as business confidence posts a surprised fall. the chinese manufacturing factor has signaled a turnaround. facebook's jumped in after hours trading. the company showed it is able to make some money off mobile devices. and still to come, do analysts like what the social network had to say? we'll get into that when we come back. bob...

oh, hey alex. just picking up some, brochures, posters

copies of my acceptance speech. great! it's always good to have a backup plan, in case i get hit by a meteor. wow, your hair looks great. didn't realize they did photoshop here. hey, good call on those mugs. can't let 'em see what you're drinking. you know, i'm glad we're both running a nice, clean race. no need to get nasty. here's your "honk if you had an affair with taylor" yard sign. looks good. [ male announcer ] fedex office. now save 50% on banners. on the agenda today state

side, markets week early version. in september, new home sales. that's forecast to rise 3.5%. earnings, plenty to focus in on here. before the open, we'll hear from at&t, boeing, bristol myers, eli lily, delta airlines, u.s. airways, lockheed martin. we'll get results from ameriprize and zinger. facebook did beat analysts forecasts by a penny. here is a report from los angeles. >> facebook reported better than expected results, earnings per share of 12 cents, a penny more than projected. the stock soared on this news, up over 10% after hours, because of two key factors. facebook advertising revenue is accelerating again, growing 36% from a year ago, compared to just 28% growth in the second quarter.

and mobile advertising is working, growing from zero earlier this year to 14% to facebook's ad revenue. it's over $150 million in the quarter. mark zuckerberg put mobile front and center saying he wants to dispel the myth that facebook can't make money on mobile and that facebook will monetize better on mobile than it does on the desk top, noting that people who use facebook on mobile devices engage with those apps more often and that those ads are more effective. the company also said that average revenue per user increased 4% as the average cost per ad increased 7% globally. chief operating officer sheryl sandberg said that new targeting tools are working well. as for new revenue opportunities, zuckerberg said he's excited about the launch of facebook gifts, saying it will help the company find opportunities to bring commerce to the service over time.

>> joining us on the phone with his thoughts, daniel, thanks for joining us. with this report, is mobile now less of a threat and more of an opportunity or not? >> well, the public is at seay, right? 14% of ad revenues this quarter, but they only started with mobile ads in the third quarter. i think it's very early in the cycle. we still have to see how it's going to work with user experience and mark also talked about how previously ads was an aside. it sits on the side bar in the facebook desk top and talked about how it's sort of a fundamental change for them to design the experience, more like television, where ads are part of the experience. you're constantly in a linear flow. so i think that's kind of a big change for facebook. i think it's kind of early to tell. the numbers were good.

they're a bit better than expected. but to me, the most interesting thing was zuckerberg's discussion around modernization. in their s-1 filing, mark wrote that i don't wake up every day trying to figure out how to make money. those of us in the market who do the exact opposite of that, it's a little bit jolting. so to have him discuss repeatedly during the conference call his modernization plans around mobile, around commerce, i think that to me is a fundamental shift. that's something to be excited about. >> okay, so how long do we then give them before they start to prove what they can do? >> well, you know, they're only a quarter in. they're only a couple quarters in to being a public company. they launched a lot of new products in the last quarter. one is the facebook ad exchange, which operates a lot more like a traditional ad network on the

web, which ads are kind of following you around no matter where you go. not really all that socially oriented. but to me, they also launched a mobile ad network where they're taking some of their data around what you do on facebook. i think that's a lot bigger opportunity. but these things will take time. i think we'll see some lumpiness around results over the next year. certainly macro concerns. growth rate by about 600 base points, a similar kind of number to what google reported. you continue to have advertising macro in europe. so it could be a bit lumpy. i definitely like what i heard. >> we've bounced back a little bit from the lows. what do you think of the stock? >> that's kind of the rub. even though it's down well-off the ipo, i think earnings expectations overall came in, and so it's still trading at,

you know, 40-ish times our earnings estimate for the year. earnings were up better than expected, but really only up 2% year over year on an income basis. so you've got some growing earnings, 2% trading at 40 times. apple will report earnings growth later this week. about 60% year over year. they traded 12 times earnings. so i think that there's a lot better opportunities in technology on growth rates relative to valuations. >> well, we're going to hear from zinger later today. what do you expect them to say? >> yeah, zinga is going through a massive transition. i don't think that the draught that they experienced in the past quarter is going to go away any time soon. i think the fundamental problem for zinga, and this also impacts facebook's ability to grow their revenues, is that social games

addresses generally a casual user. someone who it's not their favorite hobby to play video games. they don't have a big part of their budget. so i call it selling games to nongamers. i think that's kind of a limited market. zinga not only has to worry about the transition to mobile, but i think they fundamentally have to change all of their content to focus on people who actually play games and like to spend money on games. i think that will take a very, very long time. >> good to speak to you this morning. looking to see if we can get any bounceback for today's selloff. that's it. "squawk box" will be joined by warren buffett. how can you miss all of that today on the channel? keep it tuned here. have a profitable day.

good morning. today's top stories, stocks slide. the dow coming off its worst one-day drop since way back in june. the main catalyst, disappointing earnings reports. it's the economy, the fed is set to wrap up a two-day policy meeting with a decision on interest rates this afternoon. going global. new numbers suggest global manufacturing output in europe. here we're seeing more signs of a turnaround in china. it is wednesday, october 24th, 2012. "squawk box" begins right now. good morning, welcome to