welcome to "worldwide exchange." i'm kelly evans. and i'm ross westgate. these are your headlines from around the world. >> slowdown in germany wore worse than expected. annual gdp came in at 4.7%. urging for actions, president obama and tim geithner say congress must raise the debt ceiling or cause irreparable damage to the u.s. economy. and jump t to the top of the ftse 100 after third quarter revenue beat the forecast,

burberry had earnings higher than expected. all right. sorted out my mike issues. "worldwide exchange" is slightly different today because we're analyzing the first german gdp numbers. >> and i come to the u.s. where it's all annualized and we stick to the european data and it's quarter on quarter. given the context, we're still working through what all that means. >> exports in november, down 94.1 billion is where we essentially went. 98.4 billion was the october numbers. so exports in november driving down. and that gdp number is worth pulling out. exports for the year, up 4.1%.

as far as production is concerned, it was up 2% in november. but the forecast were for it to rise up 1%. it was a very weak october, as well. it was this production and that production number. when that came out, it essentially made people put a pretty fourth quarter in the whole, kelly. what we're trying to do is derive what the annual figure was. >> exactly. and before we get to that, let's look at where we've come from. the economy, in fact, traced by more than 5% in germany. 2010 we say a pretty strong rebound compared with some of its western compatriots. 2012 is where you can see the pain start to hit from the austerity crisis, the german economy growing just .7%. that is a bit shy of estimates. that leaves us in 2013 with an

expectation of growth roughly 0.8%. the real question is whether we can continue to pace given the disappointments that we've recently seen in these figures. we're looking at the fourth quarter in particular. the figure is apparently -- and sylvia will help us out in a second, but a decline of 0.5% from this quarter which means about a 2% annualized decline. so a pretty large drop and much larger certainly than was expected. >> so let's get over to sylvia in frankfurt, as well. sylvia, people are talking about this means a .5% decline for the fourth quarter. how will that be viewed in policy circles? >> i wouldn't be a bit surprised. estimates went for the fourth quarter up to or as bad as a decline of 0.75, 0.8%. so it might be slightly better than the worst expectations. in terms of where we landed for the full year, 2012, the -- a

noez note of caution in there. you can't own look at the seasonal lai just had figures. you also have to look at the seasonally end calendar adjusted figures. why? because german bank holidays move throughout if year and are not automatically ending up on a monday. we have some of the religious holidays the. and when the holiday ends up on a weekend, you don't get the monday off for that. so 2012 was particularly bad. good for employees who had more time off, but particularly bad in terms of production. if you look at the seasonally end calendar adjusted number, it's actually 0.9%. so slightly better than spekt expected. somewhere we're around expectations, so no big surprises in there. i think the big clench b will be

is that just a bump on the road? and maybe stagnation or slight contrast in the first quarter of this year. this seems to be what the bundes bank, what the ecb and the german economics ministry think, that we only have a couple of bad quarters and after that stock picking up again, that wouldn't be so abysmal. that would be something that certainly the overall german economy can handle. we haven't got an inflation problem. we've got real inflation rising. but if, of course, this drags on, then we could drag the rest of europe down with us or rather we could not help europe to come up again. >> sylvia, we'll come back to you. for now, let's bring in analisa. so, look, sylvia is saying it's within the realms of expectations.

what's interesting as far as policymakers are concerned, very weak eurozone economy, very weak german economy. it needs to be decided it doesn't want to do anything because it's more concerned about funding stresses or, you know, misapplication in the bond market, not the economy. >> well, at the end of the day, the ecb has done enough to purport gdp growth. it's cut rates down to the minimum. so at the moment, they see that -- >> you're saying the economy got worse? >> it goes worse, but it's not as bad as it was in 2009 when interest rates were higher than that. the problem at the moment or at least in the last two quarters was more on funding in the trading market. so it's where the ecb is more concentrated on. they've started to the facts of their monetary policy manager after having the facts on the

credit market. they cannot do anything now for in demand or development in the business standing or something more on personal consumption because interest rates are very low. and if the credit market beats the stock at the levels we've seen in 2011 or 2012, the ecw cannot do more rather than increasing their fundamental measures. >> we've seen the dax underperforming so far this year after a strong 2012. how much does it matter if the german economy is risk on in thought? does it change the tenor in europe? >> germany is kind of catching up the rest of the eurozone. we've seen the eurozone going into recession in 2012. and germany now was -- you know,

investors start to realize that germany is not completely untouchdown in the recession. so markets affected, they're starting to price in. >> do you think this is going to weigh on markets? >> i think it's going to, like, be priced in more in the markets in a very short time. what i mean, in the next couple of months. but bad numbers in germany will continue to probably weigh on the markets. obviously, you know, once the markets start to, like, understand that the economy is going to recover in the second had a of the year, the consolidation will be stronger and stronger. >> we'll see if sentiment turns around. stay with us. treasury secretary tim geithner is urging congress to raze the u.s. debt ceiling or risk causing irreparable harm to the

economy. he says the government will run out of tools to avoid a default by late february, early march. the u.s. credit rating is not a bargaining chip or hostage that can be taken to avoid any political agenda. president obama again rejected any negotiation with republicans over the debt ceiling. i love the debt clock. it's almost as fast as the amount of money they're going to earn tr nike. >> and is we'll talk about that. >> meanwhile, fed chairman ben bernanke speaking monday warned the u.s. economy isn't out of the woods yet and is still at risk from political gridlock. >> raising the debt ceiling, which congress has to do periodically, gives the government the ability to pay its existing bills. it doesn't create new deficits, it doesn't create new spending.

so not raising the debt ceiling is sort of like a family trying to improve its credit rating saying, i know how we can save money, we won't pay our credit card bills. not the most effect of way to improve your credit rating. >> ben bernanke says the u.s. economy appears to be willing to raise the debt ceiling. it's downplaying fierce that this could lead to higher inflation. >>. >> what do you think? >> well, i think, you know, what we've seen in the beginning of the year, like the solution of the fiscal cliff for the fist time in the more global renegotiation, what bernanke

know and the government is they don't want the economy to be in another recession. probably it's going to be a slow process, but the final aim is there and everybody knows where we need to go. >> all right. let's remind you what's on today's show. we take a look out at the auto show. 5:30 eastern. spain is set to tap the bond market today. it's going to tell 12 and 18-month t bills. analysis is due in about 30 minutes' time. and we'll head out to new york for discussions about dell going private. we'll have that discussion at 5:20 eastern time. before that, we'll head over to singapore to talk iron ore as rio tinto says it's boosting production by 15% this year. meanwhile, just over an hour

and 10 minutes into trade in europe, on the dow jones stoxx 600, 50/50. or 300/300, depending how you want to view it. we had a pause last night. right now, we're down .04%. the ftse 100 down 0.0 %. the xetra dax down 11 points, ibex down 71 points and 40 down 1.5 points. italy slightly higher on the bund yields. sannish yields back over the 5% mark. on the currency markets, euro/dollar is at 1.3361. dollar/yen pulling away from its nine-month highs at 88.70th at the moment, as well. that's where we stand in europe. sixuan has more for us from

singapore in the asian session. >> sure. thank you, ross. asian markets were a bit of a mixed bag. the shanghai composite gained .6% after yesterday's 3% job. since then, numbers were boosted by china's top security official who said beijing could lift the quota for investors to invest in the mainland markets by as much as nine times. environmental stocks surged. aerospace stock took off on an upbeat industry outlook. the hang seng finished marginally in the red. oil majors and telcos were the market laggers. persisting weakness in the yen boosted exporters. meanwhile, in technology shares wait on south korea kospi ending

lower with 1.2%. in australia, the asx 200 ended just a touch below the line. miners were weaker. more on that from our guest later in the show. back to you, ross. >> thanks for that, swish won. catch you later. here are a couple of things to check out online as we head to break. as washington continues to bicker over the debt ceiling, global markets appear to be shrugging off the inside. meanwhile, has president obama just taken the u.s. default off the table? the white house is looking at several measures in the event the debt ceiling might be weakening, find out why a rebound in commodity prices could help to keep the aussie --

dollar strong. and coming up on the program, what will this year bring? we'll be in asia to look at how china's rebound in demand will be key.

welcome back to the program. some potentially big deal news, dell has reportedly held recent talks with private equity firms about taking itself private. "the wall street journal" reports ppg and silver lake partners have talked with the company in the past two to three months and could team up on a bid. jpmorgan is reportedly involved in the process. any possible deal would likely emerge within six weeks. dell declined comment on monday after the news was first reported. the pcmaker, of course, has struggled in recent years amid falling prices and demand, shares jumping almost 13% on that news. the stock had been down more than 30% over the past year. heavy losses for apple's asi asi asian suppliers today. south korea's samsung electronics, lg display and sk

hynix were also hurt by the news. rio tinto says it will increase production by about 15% this year en route to a new record in 2012 that beat its own guidance. it's strong chinese demand which droe drove prices up around 80% since september. rio tinto shares declined early in australia. here in london, we're currently up .76%. >> interesting. meanwhile, china stands accused of illegally subsizing it's steelmakers. the steel producers are said to benefit from subsidized land, water, electricity and loans. that will help. the financial times reports that the european commission wants to strike back by slapping a duty of 50% on chinese coated steel. >> and for a look at asian commodity demand, we're joined

by chung yang. good to see you. thank you for joining us. we had that strong china trade data out. what was interesting was quite a lot of stockpiling and rebuilding. i'm wondering whether they are doing that with commodities. >> i think for the euro for 201 is definitely the year of china play with the return of a china play again, especially with the view that, okay, we have seen the china economy has -- from -- and they're coming to stabilizing the space in the q4. for this coming friday, we're going to receive china gdp data that's going to be pro to be substantially important, especially for the commodities currency for australian dollar, for example. so it's going to be the play of china again for 2013.

>> okay. what is driving that? if it's real demand as opposed to, you know, some inventory, if it's real demand, what's driving it? >> i think the real demand coming from china, especially with the stabilizings of economy is a government that's willing to help with the government that's willing to spend the money on the infrastructure. i think that is the best of one of the reasons that we have seen the iron ore prices down from the low in the reason september and up by 80% and to current level around $150. but, obviously, i would like to highlight that we are still far, far apart from the $192 level and i don't think that we are going to reach that level in the year 2013. >> so you actually think iron ore price res going stabilize at about $140? is that right? >> yes, yes, i agree with that.

$140. so we are not going to reach $192 level that we've seen in the past few years. >> and explain a little bit. where are you fallen in the range of consensus here? is it possible, does anyone think it's possible that we get back to those levels? it's perhaps suggesting there is some upside expectation. >> i think the expectations is small, for example, for this week. the expectation is small on this coming friday, the china gdp data. but when we look at the australian economy, that by itself is proving to be deteriorating for the australia economy itself. so there's a possibility for a rate cut in the first week of february and that is going to be proven for another weak australian dollar. >> that could be a big one. thank you very much, investment

analyst at philips futures. sounds like february will be the time to watch china. now, turning to retail news this morning, bur berry has reported a 9% rise in revenue to 13 million pounds, above the forecast. same-store sales outperformed. they were up 6%. that was significantly better than the 2% estimate. burberry's home sales revenue did drop by 5% underlying. the group struck a down beat note warning that the global environment would remain challenging. let's take a look at shares. they are trading up nearly 4% in trade in london, up better than 7% in the last seven days. what's interesting, too, this is a company that last year just in talking about chinese sales saw shares get walked. >> after a really big run. there was a lot built into expectation owes that. >> this time, investors seemed happy about beating the last time.

>> meantime, the 2% drop for same-store sales for h&m showed total sales up 8% last month, outperforming stims estimates. coming up, we'll take a closer look at burberry with. >> inny carlisle, joining out at so is 10:45 a.m. central european time. set your alarm clock. >> something even more important is going on. for all of those who like a strong pint of bitter, the british beermaker has announced that it is reducing the alcohol content in its ale because of rising costs and lower demand. apparently watered down beer allows the parent company, heineken, to pay a lower rate of duty. so they're going to reduce the alcohol content and put up the price. >> it's one thing to reduce the alcohol content.

you can question, heineken claims customers will notice no impact going from 3.8% to 3.6%. but by the way, they will definitely notice the impact on price. i also think there would away taste difference. i know it sounds like a difference, but it can't not make an impact. >> .2%? >> every 0.2% of a pint, right? >> it doesn't matter what size. >> 0.2% less alcohol in my pint. and would we notice the difference? >> we should do a taste test. >> bitter, lots of bitters have their own strong taste, anyway, and flavors. it's less like a lager where the alcohol -- it's the alcohol gives lager a taste where bitters have a -- >> alcohol at 3.5% or almost 3.8% before this change, it's still not very high, at least by american standards, my standards, anyway.

>> your standards, yes. anyway, hot costs and a weaker beer, what do you think about that? e-mail us, worldwide@cnbc.com, tweet us. i was trying to think of a beer simply, but i couldn't think of one. >> after the break, we are breaking inflation data. >> it's getting frothy. what are you doing?

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and these are the headlines around the globe. the slowdown in germany worse than expected compared to a 3% gdp reading the year before. urging action, president obama, fed chairman bernanke and treasury secretary tim geithner all say congress must face the u.s. debt ceiling or face irreparable damage to the u.s. economy. the third quarter revenue beats forecasts, h & m's top sales estimates, as well. reports say the pcmaker has been in talk wes several private equity firms in recent months about a possible buyout. right.

we're just about to get the latest cpi numbers and producer price figures out for the uk. just to remind you, month on month forecast we're looking for a rise of .5%. there's a lot coming out at the same time. >> it's hard to grab these. >> cpi up. for once, it's hit the forecast, up 0.5% on the month, the annual rate 2.7%. that's exactly as forecasts suggested. the highest rate since may. rpi up 0.5%. the annual rate of rpi slightly less. rpx, the old measure we used to look at which includes housing but not mortgage costs, up 3% as expected. the biggest contribution to cpi came from utility bills. the biggest downward pressure on cpi was from transports. >> and we should mention, too, the core cpi was up 2.4% on the year. that was shy of estimates. so core cpi softer, cpi in line,

rpi stronger. what's going on? >> well, we see like in the last couple of months, i think it's inflation in the uk is driven by opposite forces. what we see in october is that led to a market acceleration in headline inflation. what we've seen in november and today's number confirmed that is that if cdc prices keep going up, on the other hand, we have lower transport prices, which is maybe reflecting the decline in food prices. >> do you think that's going to get reversed in january? the place is going to go up in january. >> well, but these are seasonal adjusted. so probably a year on year basis, you don't see such a jump. it's everything which is seasonal doesn't lead to acceleration of deceleration. what we see at the moment is that headline inflation is going up and core inflation is slowing

down. that probably reflects lower prices on closing and footwear in december because retailers have been struggling to keep up with demand and they had to lower prices effect hely. >> there was a great note from hsbc out just the other day pointing out that we've seen so much spending towards discretionaries, that in fact consumers may be spending and not 10% more in real terms. britain, like maybe a lot of the westerns are getting less and paying more. >> definitely. the and what we see at the moment is core inflation going down, the bank of england already acknowledged that there is nothing they can do with the monetary policy to, like, lead to a sharp decline in inflation because it's mainly due from one source. and the good effect today is that core inflation is going down and -- which is driven but

basically weaker demand. >> and we'll have a bit of producer prices and output in -- anyway, down 0.1% on the month, up 0.2% on the year. a little lower than the poll of 2.4% and december core producer output prices up aspect dollars. input prices running at plus 0.3% on the year. again, as expected. i would say, actually, that this is pretty much as expected, but the ipi is slightly lower with these numbers pretty much as everybody expected. >> and sterling jumping initially at least to session highs 16101 against the dollar, but then slowing back. so the market reaction appears to be -- >> ppi numbers, they confirm the picture of, like, no underlying pressure in terms of, you know, core inflation. if you look at, you know, the development of pti and you, you know, project it in the next

couple of months, i mean, unless there is special -- but utility prices are already increased. i think december was the last -- >> the last question year-end 2013 inflation rate, what is it? >> well, it's probably going to be down 2.3%, 2.4% on average. >> and senior market economist, thank you very much. >> thank you. and just in case you're getting wiser, 2013 and the financial crisis slightly and you haven't got enough acronyms, don't you worry, folks. the bank of england has come out, the beo, spc -- >> following a report on the cpi, ppi, rpi and -- >> rpij, which we haven't looked at yet, the spc of the boe has come out with two act trough anymores, its financial policy committee. sxli sxlimts you'll like this. the government has the

countercyclical capital buffer, the ccp, and the second toral capital requirements, the scr. there you go. >> and this is what we're going to hear from mervyn king in a little bit? >> yes. >> he could do an entire show in acronyms. >> on cnbc. an auction for ireland, keeping an eye on ireland as it looks to remain market access. >> cnbc isn't an acronym, by the way. >> i don't mind if it's backed up with something, but i hate when they do away with it altogether. anyway, european markets. let's check on the dax and the ftse and all the other good stuff. >> i was thinking you would hate the name.

i think that's what you just said. >> no, no, i don't -- >> i'm talking bibex down .75%. bond markets. >> bond markets, let's take a look as to preserve my job. the spanish ten-year, this is interesting and probably the one to watch today, poking back up over 5.7%. italy is at 4.2%. the gilt is staying firm at 2.05% but there's definitely an attitude you're seeing on the bond curve that suggests more risk off and perhaps it's something to do with weaker german output figures. >> and not much impact for the euro/dollar. euro/dollar, 1.3374. dollar/yen, pelg away from the fresh 29. month highs that we hit during the session yesterday. our next guest of 2013 says it will be a year of austerity for the united states. bruno, thanks for that. i suppose if they don't agree on

the debt ceiling, they'll get a big kick in of austerity. >> yes. good morning. well, i think that's for sure. it might draw the attention a bit away from europe, however, because it's becoming clear to the investors that u.s. might have a big political problem and, of course, a huge debt problem that they need to solve, as well. so far, they have taken a strategy of growing themselves out of it, which has not really worked, but now i think they will need to save a bit, increase taxes, but now it's clearly showing that their budget can be taken under control, as well. because if not, i think the market is going to punish them, either with a credit downgrade or with higher yields. and that seems to be the trend for 2013. that's higher yields are almost a given. >> sorry. people are going to stop buying u.s. treasuries. what had are they going the buy instead?

>> well, i would like an acronym on that one. it's call tiana. there is an alternative and the alternative would be equity. what we've seen is there's a rotation within the fixed income sector going from, let's say, the save bonds cash, save bonds and up the scale on the corporate level. first investment grade to now we see many investors buying high yield and emerging market debt. but i think they haven't crossed the bridgette towards equity. and that's just a matter of time. if the yields on, the high yields are at the same level. i think you actually make an upgrade on your credit policy and you have the same -- the same level of income. but i think that is clearly an alternative. it will start with the defensive sectors and gradually move on to the more -- let's say exotic sectors and the more volatile sectors. >> i just wonder, you know, from jpmorgan yesterday, which is

actually aggressively underweight u.s. relative to japan as well as emerging asian markets. and it says the u.s. has been underperforming since last summer. with the debt ceiling looming, now, in fact, is the time to pair positions. so even if you like equities maybe longer term, you know, are there not reasons here to be a little bit more cautious? >> well, there is. i think contrary to 2012, which was really a year of buy and hold and it performed well in all asset classes, volatility on the fixed income, for example, was at historic lows, i think this year is definitely going to be different. and it will lead to have a very dynamic strategy. at this stage, we have 30% equity and it will go up gradually according to the economic cycle. one should not forget -- and i think that's the big mistake that the analyst made in the beginning of the year is that the fiscal cliff discussion will not have been biggest reduction in gdp in the first half of the year. but it will come as of the end of qthe going into the end of

the year. so this should be the best performing economically period at this stage and then moving -- slowing down a little bit in u.s., at least, towards the second half of the year. >> okay. >> so economically, it would make more sense to be cautious now. >> bruno, staying with this because you want to get your take once we get the results from the spanish auctions that we're expecting in just a few minutes. >> absolutely. >> and now center right coalition led by sylvia berlusconi appears to be gaining ground with a few weeks to go before this key vote in italy. according to a poll conducted by emg, the lead over berlusconi's group has shrunk and it's now just 9 1/2 points. whoever wins the elections may not be able to -- and, ross, this is probably key for markets, at least, to hold a stable government. >> and we'll have have to deal with reform programs.

>> meanwhile, the regular number of political row goes have been committed for approval ahead of next month's election necessitily. they have received 215 applications from an array of national local parties, movements and associations all pushing a variety of causes. these include the black rose movement for right wing game, the poets in action party which advocates representation for poets in the italian parliament, why not for the first time in italian history. they will have a chance to support their favorite football teams in italian government, as well. >> look, just the idea of having more poets, i like. but before continuing on that theme, i want to bring you the results of spain's auction. it is out. the country has sold 3.25 billion euros of 12-month bills and 2 1/2 euros of 18-month

bills. roughly in line with what we saw the last time, 2.2% and 2.7% respectively. it's still waiting for the yield to come through on the 12-month. it is down significantly, 1.25% versus 2.65% on december 11th. and, ross, you see the 18 month yield there? >> no. >> when that comes through, we'll read it out for you, as well. let's get some initial take on this. bruno, these 18-month yields below 1.8 pefrs versus almost 279% the last time. so we're seeing this auction, a key test ahead of thursday has gone off reasonably well. >> yes, it has. it's clearly something that the investors are looking at because if you look at the correlation of both the euro/dollar and the market, on the verses express of both spanish and italian yields, i think it is very important to have these filled up quite consistently. of course, the short end of the

curve is giving an indication it's a very volatile part of the curve. the end of the curve is a more important one because that's clearly showing the long-term credibility of the country and that would show how has stainable it is to have current debt levels and how markets are reacting to it and how confident they are. i think the short-term is clearly more of an opportunity trade than a real vote of confidence for spain. clearly, with these bid to cover ratios, it looks as if the market is quite relaxed about the situation at this stage. >> wa a difference a year makes. bruno, thank you so much for your time this morning. we'll see if markets continue to relax through the remainder of the first quarter as a lot of these countries front load their issuance for the year. let's take a look at what's happening in asia. hong kong stock exchange is set to reform its ipo rules earlier this year. in a bid to accept up competition with global

investments. earlier, bernie lowe stock to charles lee about china's recent signals that it will open up accounts markets to more foreign investments. >> when we talk about all these new measures, we initially talk about the permission to either permit funds to flow into china or permit funds to flow out of china. that's really what it's all about. the real challenge and the real interesting issue is how to make sure the flow happens. because it can take many shapes and many forms. and how to find a way where the flow can lead the investor demand, investor need, and is market driven. and at the same time, it's convenient, it's easy to do. at the same time, also, make sure that the risk managementwise that it does not create undue issues for the yen and particularly in reforming policymakers to feel that this is something they can do without having to worry about creating undue and unwanted, unintended

consequences. >> now, there's a lot of expectations that we're going to see more and more b shares listed on the market. this comes with risks. what kind of risks do you expect and how are you preparing for it? >> i don't believe that b shares per se is a particularly more risky or less risky asset class. you know, we have about a few dozen quotes, about a hundred b shares. not all of them will qualify to list in hopping congress. and to the extent that those qualify, they will have to go through the normal process and they each go through their listing committee. >> now, with a slow, somewhat slow chinese economy and all exchanges growing reliant on china, how is that going to impact your business? >> yeah. i think that we are not -- we are not a company whose businesses depend whether or not the pace of china's growth.

all business is largely depend on how they open. we are not on the margin of the growth. we are on the margins of change. and the structure change of china, it's overall capital markets has a much greater impact than any particular up and down for a particular time. so we're really much more focused on the overall structure change of china rather than the actually pace of the growth. >> now, in a bit of news out of the u.s. this morning, or at least pertaining to the u.s. this morning, fitch is saying any debt ceiling delay would prompt a formal u.s. rating review. while it expects congress will raise the debt ceiling and there is a great risk for the u.s. of default, nevertheless, failure to raise the debt ceiling in a timely manner would trigger a formal review of the u.s. sovereign rating. in similar news, in japan, there's been a lot of high level discussion over who the next bank of japan governor should be.

fushiko joins us now. >> hi, kelly. abe invited economic advisors including academics hamana, known for aggressive monetary easing to the prime minister's residence. the experts supported abe's opinion that the boj should ease more aggressively. the current boj governor ends his tenure in april. the meeting didn't cover possible candidates yesterday, but abe has been saying that he wants a boj chief more in line with his views. the economic minister suggested that the next governor should be open to mormon tear easing. so when the boj meets next week,

it's expected to roll out more measures and reach a new inflation agreement with the government. back to you, kelly. >> fushiko, thank you very much for that. japan, meanwhile, saying it's going to, as we've just learned, issue more than 5 trillion yen in new bonds to finance more stimulus. >> yeah. meanwhile, toyota can start producing its prius model in north america. that's what the head of toyota operations have been telling cnbc. the hybrid has been selling well. the news comes, as well, that the carmaker regains the crown as the world's best selling car company. it sold 9.7 million vehicles compared to gm's 9.3 million last year. and at 11:30 cet we'll be in detroit for the latest on the auto show plus analysis with jeremy of edmunds.com. in the meantime, let's take a quick look at what's on the

schedule for asia for tomorrow. kurt campbell, the u.s. diplomate in east asia is due to arrive in japan to help ease tensions with south korea. in the meantime, cy leung will deliver his first policy speech. meanwhile, i'm work the on the pronunciation of his name. it looks like cy young. >> in the meantime, burberry reports high revenues. is there more demand? we'll talk about it when we come back.

welcome back to the program. we're waiting for figures on china foreign direct investment and china saying net for ex purchases in december were 146 billion yuan. it also says -- and where did this go? it was saying something else here, ross. china's commerce minister says the 2013 total will likely be similar to what we saw in 2012. >> and italy launching a new

50-year syndicated bond, they're selling the pricing on that about 30, 35 basis points over the 4.5% in 2026. so it also says the 15-year bond is also going to be over 6 billion euros. so it looks like they've got enough demand for that. meanwhile, swiss chocolatemaker lynds shrugged off economic fears saying it expects solid profit growth. carolin has more for us in zurich. >> those are excellent numbers and the share price reflects that. common shares moving higher by almost 3%. we're seeing very high volumes in lindt today. let me remind you of what the numbers look like. full year sales up by 7.3%. but the organic growth number, that's what stood out to investors.

came came in at 6.4%. that was in large part due to the performance in the north american markets in the second half of the year where we saw double digit organic growth. in terms of the other areas, europe was split between the weakness that we saw in italy and encouraging performance that we saw in its key market, germany, its biggest market, france and the uk, for example. as a result of these good numbers, lindt and 0.pruengli did raise operating profits for the year. >> thanks for that chocolatey news. burberry jumped in revenue to 13 million pounds. joining us now is julie carlisle, head of retail at ernst & young. julie, welcome. >> thank you. >> what is icaew? >> the institution of charles

and finish for charles and wales. >> welcome. can you tell us about the burberry numbers? revenue was impressive, but more importantly, there are fingers about triple wa we saw. is this a most important point for retailers? >> like for like, there's a real problem for kpi and retailers. and something that we just brought out in our report, the like-for-like sales aren't always comparable because there isn't a consistent method of calculating them. >> what are some of the flaws? >> what is included in like-for-like sales could not be distant. almost, the time periods are used. solo they're important as a relative measure in terms of ease of comparability, it's not always there. >> are there any figures you can give which will create confusion? >> i think the most important example to give in today's market is that the like-for-like sales measures aren't always an understand occasions of reliable

profit blth. we've seen strong like-for-like sales last christmas and this krils. that doesn't always mean a business is doing extremely well at bottom line levels. >> is it true the other way around, then? if you don't have great like for like, you could be performing better than your like for like? does it go the other way? >> it can. but in terms of driving top-hein sales -- >> what will be a better way of on giving us a trading update to tell us, you know, is there a better method than just to go for like for like? >> it's two things. one, is that you have more transparency around your like for likes and a more standardized way of looking at them so you can compare them. the other thing is to spend more time looking at major yip. if you look at the stocks recently come out, there has been more focus on the margin than we've seen in the past. >> that's the bottom right is that we've been protecting

margin, right? >> right. i think a time of people have been focussing this year compared to last year on protecting brands and protecting margin peps so we're not seeing such early and deep discounts as we did in 2011. >> does that mean a better 2013? >> 2013, more of the same, i think, in oerchls consumer spending. >> high utility bills are still going up and squeeze on real pay continues. still to come, we'll look ahead to the u.s. trading day. what are you doing? nothing. are you stealing our daughter's school supplies and taking them to work? no, i was just looking for my stapler and my... this thing. i save money by using fedex ground and buy my own supplies. that's a great idea. i'm going to go... we got clients in today. [ male announcer ] save on ground shipping at fedex office.

welcome back to "worldwide exchange." i'm kelly evans. >> and i'm ross westgate. here are your headlines today from around the world. >> urging action, president obama, bernanke and geithner all say not raising the debt ceiling will cause irreparable harm to the u.s. economy. and burberry said growth came in at 2.7%. it was 3% the year before. dell has been in talk wes several private equity firms in recent months about a possible buyout. and burberry's third quarter revenue beats forecasts. h & m's top december sales estimates. >> you're watching "worldwide exchange," bringing you business news from around the globe.

>> all right. if you just joined us, particularly stateside, welcome to the start of your global traiting day. bank of england officials including the governor former vin king just started a testimony in front of the treasury select committee on the bank's latest financial stability report. these are on westminster, the pictures. first, kelly, let's bring you up to speed what we're calling the u.s. open right now. >> that's right. the dow jones industrial average, the fass dak trying to add a little bit here at the open. the s&p, though, at this point roughly flat. now, this follows a mixed trading session yesterday whereby interestingly enough apple weighed on shares, particularly of the nasdaq. so a mixed picture as stocks give a bit of a pause to the rally, the strong rally we saw at the beginning of the year as we get closer to that debt ceiling which we just talked about. now, the ftse cnbc global 300 gives us an insight as what we've seen overnight.

we are up off session lows. asia did reasonably well. europe, ooefb trying to make sense of a lot of data this morning. bourses still mostly to the upside. the ftse 100 adding .1% there as inflation has been just about as expected for the month. the xetra dax is fractionally higher, this despite the fact that german gdp was weaker than expected in the fourth quarter. the cac 40 adding .25%. the ibex 35 down 0.3%. ten-year yields are back above r5% this morning, although they have come off session highs, ross. >> just to remind you with where we stand with bond markets ahead of that. we had a t-bill auction, yields continue to go fall below 1.8%. so that just perks things up. spanish ten-year yields just above 5%. now just reverses 4.16% is the yield and inflation data out of the uk coming in exactly as

expected, really, on the cpi measure, rpi slightly weak. on the currency markets, euro/dollar, 1.34%. dollar/yen, also just pulling back from its 29-month highs. that's where we stand in europe. sixuan has the recap for you of the asian trading day in singapore. sixuan. >> dhaung, ross. the shanghai composite jumped after yesterday's numbers. beijing could lift the quota before investors invest in the mainland markets by as much as nine times. environmental stocks surged as they hoped beijing would take more action to address solution problems. aerospace took off on an upbeat industry outlook. the hang seng finished marginally in the red. oilmakers and telcos were the market laggers.

elsewhere, the nikkei ended higher by 0.7%. persistent weakness in the yen boosted exporter stocks. sharp shares ended lower after reports that apple lowered iphone orders. that sent parts suppliers lower in south korea. the kospi ended lower by 1.2%. australia's asx 200 ended just a touch below the line. miners were weaker despite opposing outbeat figures. but still shares soared 16% after receiving a second takeover offer for the company. india's sensex ended higher by .4%. back to you. >> all right. sixuan, thank you very much, indeed, for that. mervyn king, i'll just remind you, is currently testifying in front of the bank treasury select committee on the financial stability report. we'll keep our eye on that. and german economic growth slowing in 2012 amid a deepening

recession in the eurozone. full year gdp for europe .7% which missed analyst expectations for 0.8% growth. just remind you, one of the contributing factors in the last quarter has been industrial production for november coming weaker than expected, up .3 2% versus forecast up 1%. it's very weak in october, as well. exports for november, weaker than the october numbers, as well. so these are some of the contributing factors. >> exactly. as soon as this data started coming, you knew the fourth quarter wasn't going to be strong. before we revealed weight was, let's first tell you where it came from. we started with the financial crisis, putting gdp down by more than 5% in 2009 in germany. after that, a snappy rebound. up 4% in 2010. slowly to 3% in 2011 is and just 077% last year. that was a little softer than initially report. 2013, the forecast is 0.8%. still not exactly that strong.

so what does this all mean for the german economy? for the eurozone's future? silvia wadhwa joins us now with her take from frankfurt. sylvia, we've had some time to go through these numbers. any sense now relative to early this morning as to what the real weakness is inspect maybe the achilles heel for the german economy? >> as far as the german economy is concerned, there's always a balance between what the domestic side is doing versus the export side. the domestic part of the economy has been stronger over the past year or year and a half than it has been historically in the past. so it's not as if consumer confidence is completely in the dump as if nobody goes out buying, but compared to the strength of exports, they simply couldn't keep up. this year we'll see a slight reversal of that with exports slowing down and the domestic economy continuing to pick up. there might be some factors that speak for that. first of all, the labor market is still going strong. we have the lowest level of

unemployment since unification or just after unification for over 20 years, anyway. we're at the highest level of employment because we're creating or germany has been creating jobs, 60,000 jobs or more per month. there are a lot of one euro jobs as they call it in there, but the number of real jobs, of serious jobs is also rising in that equation. and we have a shortage of labor in the whole pocket of the industrial part of the economy. so there is a certain demand/push in there in the labor market that should keep prepping wages up to a certain extent. not a real inflation problem, i'll bet. so there are a lot of factors that speak for what the bundes bank is saying, what the economics numbers are saying. but from the second quarter onward of this year, we should be picking up. maybe not dynamically so, but picking up and not falling off a

cliff. and in the eurozone crisis that we are in, that has to be good news already. >> sylvia, thanks for that for now. fill i didn't know is joining us in the studio, as well. what is the chance the first quarter is negative for germany? >> there's a fair chance. it's not our central view, but we're seeing stabilization over q1. particularly i think if you have a look at some of the indicators from the german surveys are suggesting perhaps even an upturn, particularly in the service sector. and that to me suggests that there is probably a better than even chance of another negative quarter in q1. >> and another recession for germany which implies a recession for the eurozone and yet the ecb is standing pat. >> it is standing pat, but the refinancing rate is 0.75% which is an all-time low with a plethora of nonconventional measures there, as well. so the start of monetary policy is extremely loose right now. and this is relatively little that the ecb can do to push it

forward. >> i guess you can say that they have done what's needed in terms of the source of the acute part of the crisis, but i guess the question is in doing all this and trying to get at the fact that its markets frankly weren't functioning, is it not being responsive enough to just the general weakness of the corn? i know you say yields are at a historic low, but is it the rate of change that matters? even at this level, does that not imply they need more help? >> well, recently wouldn't argue with another 25 basis points off the rate. but in the grand scheme of things, it wouldn't make an awful lot of difference for the eurozone economy as a whole. what's more important is reducing the tail risk in financial markets, which number one has allowed banks to refinance themselves and, number two, is at least enenglander some sort of confidence in the industrial sector. as we heard from sylvia, you've got german employment and unemployment and relative lows and highs respectively.

so you've got to build from the bottom, if you like, with a crisis of this stat and the ecb has done that very well over the last several years. >> and with problems at the high. >> absolutely. and it does justify monetary policy remaining very, very loose for quite some time to come with another 25 basis points off the rates. yes, it would help a little bit, but that's marginal. >> this is some divergence. meanwhile, in the u.s., treasury secretary tim geithner is urging congress to raise the u.s. debt ceiling causing irreparable harm to the economy. he says the government will run out of tools to avoid a debt default in late february, early march. geithner says the u.s. credit rating isn't a hostage and at the final press conference of his first term monday president obama rejected any negotiations with republicans over the debt ceiling. at the same time, fed chairman ben bernanke has been pressing the case for raising the debt ceiling.

speaking at the university of michigan on monday, he warned the u.s. economy isn't out of the woods yet and is still at risk from political gridlock. >> raising the debt ceiling, which congress has to do periodically, gives the government the ability to pay its existing bills. it doesn't create new deficits. it doesn't create new spending. so not raising the debt ceiling is sort of like a family trying to improve its credit rating saying, oh, he know how we can save money. we won't pay our credit card bills. not the most effective way to improve your credit rating. >> we're getting strong words from fitch saying that any delay would prompt a formal u.s. ratings review. and that the congress and the discussions themselves are undermining the otherwise strong u.s. growth outlook. now, former obama administration members are weighing in on the debate. larry summers, a top white house economics adviser as well as

secretary under clinton spoke with cnbc's bernie lowe just today. >> everybody should, before meeting the debt obligations of the united states, and then there needs to be a vigorous and active discussion around what is a very real problem. the sustainability over the long-term of the u.s. financial position, which surely needs be addressed in a balanced way with both measures on the expenditure side and measures on the revenue side. >> phillip, how are you? >> i'm fairly cynical about the whole process. >> about u.s. politics? >> well, the other side, as well. i think you can make a pretty good case for abolishing the debt ceiling completely. that's not go to happen in the short-term. we've seen this time and time again. we know that these negotiations are being conducted across polarized camps in congress and

the administration and that the likely event is that nothing is going to be agreed at until the 11th hour, right at the last minute spop i would have thought it's very likely that we'll get an increase in the debt ceiling at some stage. likewise, there will be some sort of compromise later on during the day on spending cuts, as well. >> what kind of compromise? i mean, yeah, what -- i suppose what would the economic be of the spending cuts? >> well, that's a very good question. i think it's only reentered markets minds that any more fiscal policy, you potential le get a slowing of demand and the example here is the tax increases that were agreed which involved a reduction of the payroll -- sorry, a reverse of the payroll tax reductions. people now saying, well, actually, that reduces take home pay. so perhaps this congress also looks at the potential economic implications of spending cuts

and it makes it easier to get on a compromise at this stage. >> evans is talking about 2.5% this year, 3% next year. are those achievable targets? are they too optimistic? >> no. that seems about right. the same order of numbers in the federal reserve, central tendency, as well, for this year and next year prosecute we are seeing some momentum in the u.s. economy, most notably in the housing market and we're getting more regular increases in nonfarm payrolls, as well. there is upward momentum there and that would be, we think, partly checked by tightening and fiscal policy, of course, provided that you get an agreement on spending reduction. >> you didn't stay in, but that's a pretty big if, still. we can read that from what you said there. >> in bold type. d did. >> exactly. phillip, thank you very much. in the u.s., we will get

same-store sales. at 8:30, the december ppi producer price res expected to pal by 0.1% and 0.2% when you strip out food and industry. at 8:00 eastern, boston fed prt rosengren will speak, minnesout kocherlakota will speak at 8:50/50. >> so i'm disappointed that you don't have weekly job localses today. >> i am, too. i always look forward to that one. >> fitch warns any delay to raise the u.s. debt ceiling will prompt a ratings review. and germany sees the economy transacting 0.5% in q4. >> and dell is eyeing the private life. the pcmaker is in talk wes private equity firms for a potential buyout. now, facebook gears up for a

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welcome back to the show. the rumor mill has been spinning for much of the past week since facebook had a big announcement planned for today.

cnbc's julia boorstin previews just what the company may have up its sleeve. >> facebook is making a mysterious announcement at its headquarters, sending invitations to the press to, quote, come and see what we're building. though the announcement is unlikely to be about a new phone hand set, it is likely to involve facebook's mobile platform. considering the priority mark zucker berg and cheryl sandberg have made mobile. it could be something like a mobile video chat app. there's speculation that's in the you could involve a social search engine or a change in the facebook timeline. we expect ceo mark zuckerberg to make an appearance. facebook shares pulled back about 2.5% on monday. but between when the invitations of the event went out last tuesday and friday, shares added about 9%. facebook's mysterious announcement comes on the heels of a slew of analyst upgrades.

monday, deutsche bank upgraded from hold to buy and oppenheimer raised itsdz its earnings outlook and price target for the company. from cnbc los angeles, i'm julia boorstin. >> log on to that. still to come on the program, as well, dell is in talks with private equity firms about going private. what are the chances the pcmaker will be able to reach a deal? wheat go inside the numbers, next. what are you doing? nothing. are you stealing our daughter's school supplies and taking them to work? no, i was just looking for my stapler and my... this thing. i save money by using fedex ground and buy my own supplies. that's a great idea. i'm going to go... we got clients in today. [ male announcer ] save on ground shipping at fedex office.

dell haas reportedly held recent talk wes private equity firms about taking its private. "the wall street journal" says ppg and silver lake partners have talked to the company in the last few months and could team up on a bid. jpmorgan is involved in the process. any possible deal would likely emerge in the next four to six weeks. dell declined to comment on monday. the pcmaker has struggled in the past few years. dell down is 30% over the past year, but jumped almost 13% on monday. joining us now is forecastin fritzen. good morning. thanks for joining us.

if this dell deal goes through, what does it mean for leveraged buyouts? is there a wave of these coming to market? are conditions in place? is this going to be the theme for 2013? >> it's going to be a bigger year based on where we are right now. the real driver for the leveraged buyout volume is the borrowing costs. this isn't necessarily the story that the private equity firms put out, but there's a really strong correlation between the cost of money for the buyout firms in the high yield bond market which is currently about 5% over treasuries. last year, it averaged about 6% over treasuries and the global lbl volume was between 100 and 125 billion. at the present rate, it would be consistent going up to 165 billion. so a far cry from the peak back in '06 and '07, but we're not

getting back there anytime soon. >> so it sounds like both in total terms were well shy and even in the individual deals were well shy. although this deal would be a big one. help tie this together for people. what does this potential deal have to do with this frothy, some would describe it as high yield markets which goes back to fed policy? >> i think you've put it together exactly right. it's one more way in which the ultra low interest rate policy, the easing money policy by the fed is distorting a lot of the things in the system. they're trying to achieve some worthwhile things through the real economy, but we are seeing some distortions in the financial markets. and the borrowing costs right now, about 5 percentage points over the treasury rate. by my calculation could be more like 6 1/2, given the credit availability, default rate, the economic conditions. so the fed really is keeping those rates, those borrowing

costs very low and that gives a big edge to the private equity firms which would ordinarily be at a disadvantage really to the corporate buyers who have a better chance to gain sinner i to gain an acquisition. >> it's not necessarily those discussions between two ceos bringing their firms together, but it comes from this industry? >> yeah. well, if they raise the money, they have it in the fund, they want to spend it. they don't want to give it back. and in the worst case scenario you get deals that are overpriced and create credit problems down the road. now, i don't think we're on the verge of anything as extreme as that and all this may change if the risk premiums go up, if that borrowing costs goes back to where it should be if the fed is not able to hold the line. then i think that would take

some of the heat off, some of the wind out of the sails of the lbl market. >> or maybe the debt ceiling kills the dell deal. marty, last word, do you think it will happen? >> it looks like a stretch. it's a big deal. you would have to have several lbl firms involved in it. they have to raise a lot of debt. it's a stretch. >> marty of fridson vision, thank you. it's a stretch, he says. >> and the fundamentals don't go away, either. still to come, the new corvette scores a win for general motors.

♪ [ male announcer ] some day, your life will flash before your eyes. make it worth watching. introducing the 2013 lexus ls. an entirely new pursuit.

welcome back to "worldwide exchange." if you're just joining us, i'm kelly evans. >> and i'm ross westgate. >> urging action, obama, bernanke and geithner all say congress must raise the u.s. debt ceiling or cause irreparable harm to the economy. fitch joins in and saying any delay will cause a formal review. dell eye tess private life. reports say the pcmaker has been in talkses with several private equity firms in recent months about a possible buyout. >>. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. and we're in the red for u.s. futures.

trying to hold some gains earlier in the session this morning. but now for the most part, major indexes are pointed lower. the dow is looking to shed about 14 points here at the open. declines similarly seen for the nasdaq and the s&p 500. it was a mixed session for these bourses yesterday. i think only the dow was in the green. they were roughly flat. european markets, same kind of activity where it's hard to discern a real strong trend. they are trying to digest inflation and growth data. largely disappointing, especially on growth. the ftse 100 barely higher. still holding the 6100 level, but coming off the highs. the xetra dax is down a negative after a very disappointing set of gdp figures. and across the eurozone in the coming months. the cac 40 still up 0.011%. but the ibex is down 0.4%. >> that's where we stand ahead of the open. there's a parliamentary committee testimony from mervyn king and other officials at the bank of england to talk about

the new financial policy committee that's being set up to regulate banks. it's a lot about what they're going to do with capital requirements. they could have capital requirements for banks and to reduce at the current time. and we've got a couple of news names out for that, as well, which we'll talk about later. but tifrt, toyota could start producing its popular prius model in north america. that's what the head of toyota says. the hybrid has been selling well in the u.s., up 7 % in 2012 year on year. the news comes as deutsche retains the crown of the best selling car company. it sold 9.7 million vehicles compared to gm's 9.3 million last year. mean wile, gm has been pulling out all the stops at the american international auto show in detroit this week. the stingray has been coughetted as the company's star.

joining us on the phone from that very event is our own phil lebeau. phil, good morning. i guess your thoughts here as we work through the conference. is gm, despite losing global market share to toyota, potentially winning hearts and minds here? >> well, they're definitely winning hearts with the corvette stingray. anybody who saw the stingray the night that it was unveiled, immediately you said, wow, look at this car. it has the styling queues of the '63 stingray. it is such an iconic brand. and it's a brand that, with this new version, they haven't ruined it. sometimes you have a classic brand and they bring out a new model and you go, what? what were you thinking? that's not the case here. so clearly, that's generating a lot of buzz. you add to the fact that cadillac for the first time ever has won the car of the year award, which is hard to believe given how long cadillac has been around. you can see some momentum there.

that said, anybody would was attending this auto show, all of the journalists, were all well aware of the challenges facing both cadillac as well as general motors. so it's nice to see the momentum when you're in detroit that general motors is generating here. at the same time, everybody's eyes are wide open to the challenges they're facing. >> well, and also, we know that detroit is emphasizing this is the international auto show, not just an event for the whole market. wa about some of the global brands? >> well, you know, it's interesting. when you look at some of the global brands, bmw yesterday unveiled the four series coupe. and it got a lot of attention because the styling cues on that four series coupe, they've done a nice job of differentiating that coupe from the three series. they've said, hey, here is the four series, but the styling cues are different enough that it made a lot of people step back and say, wow, i think this

is going to be very successful. you talked about the toyota mention the possibility of building the prius in north america. they are story at this auto show. they're not getting a ton of attention, but you start to see that momentum that we saw, oh, four or five years ago with toyota before they ran into all of their problems. and by the way, they sold 238,000 toyota prius models in the united states last year. they're going to be a quarter million volume vehicle line here in the u.s. so i'm not surprised to hear that they probably will be building the prius here in the u.s. >> and a reminder, too, phil, that for all the news about them regaining the top selling crown there, it's as much about production in the u.s. and that is employment and to some degree economic output in the u.s. as it is about japan and some of these other markets. so phil lebeau calling in for detroit. phil, by the way, what's the event to watch today? >> we're going to see the

cadillac electric extended range vehicle. i think a lot of people are anxious to see how different this was going to be relative to the volt and relative to the styling cues where cadillac has been indicating over the last year. >> i'm still trying to picture that one. >> phil, what kind of extended range are we talking about? >> well, i haven't heard the details yet. but i think the range is going to be similar to what you get with the volt. remember, the first 40 miles, all electric. and then you can get the next 240 to 300 with the extended range capacity of the vehicle. >> all right. phil, good to talk to you. thanks for that. there's plenty more coming up from phil on today's cnbc. >> are you in the market for the new cadillac? potentially? >> i'm trying to think, i'm not really changing cars yet. >> maybe next time.

>> yeah. joining us for more, jeremy from edmunds.com. jeremy, i'm just picking up on that toyota move there with the novelty and the extended hybrid, as well, for gm. how much of a growth sector is this part of the car market? >> well, actually, a really interesting question because vehicles like the prius and basically all the hybrids and electric vehicles generate a lot of buzz. but they don't generate that many sales. we talked about the prius earlier this morning and say, well, that's a successful vehicle. toyota made it work. but the other hybrids, electric range vehicles in the united states sell in very small volumes. and the prius right now is the king of the alternative power train vehicle. >> yeah. the lead seems to be the poster child for this, jeremy.

how does this change things in the industry about how to shift things going forward? >> well, i think the car companies are torn. there's a lot of regulation activity around the supermiles. but commercially, i think to be to be careful. there's a dichotomy, a lot of buzz and excitement about vehicles like the corvette. this corvette was more efficient than the previous version corvette. it's still not considered a high efficiency vehicle. on the other hand, car companies are feeling an obligation to sell more of the fuel efficient vehicles as they possibly can. >> what's the inhibiter to broadening the sales success? some of it is pricing. some of it is new technologies. we tend to be fairly conservative as consumers are making major purchases. we want to sort of see how new technologies play out in the marketplace. but at the enof the day, i think a lot of it is that americans

love larger high performance vehicles. when you think about the interstate highway systems, you look at the parking lots that we have, garages. the infrastructure here really supports larger vehicles. we have active lifestyles, families with kids. there's a lot of logical reasons why people would prefer larger vehicles, yet we also feel on a more social level an obligation to conserve. so we're really torn. >> and jeremy, how are economic conditions changing the vehicles being made here? and what dynamics, if any, are you seeing manifest at the auto show? >> well, one of the interesting things you note in the marketplace is there's a lot of activity at the high end. so we hear a lot about economic distress around the world. the economy in the united states is doing better, but it's still not as robust as we like. but there is a lot of activity with mercedes and bmw. they're achieving record sales. and it's a market that's full of lots of contra decisions. there's pressure, competition, but there are some folks out there that apparently have the

money to spend. and they are spending it on expensive vehicles. >> good news for some in the industry. jeremy, thanks for inning us from detroit this morning. did you know detroit is actually in the eastern time zone in the u.s.? >> is it? i had gone one time. >> so early, but not that early. dell shares have jumped on reports that private equity firms could be circling the trouble pcmaker. >> will a buyout save the day? we'll have more on this when we come back. ♪ [ male announcer ] how do you turn an entrepreneur's dream... ♪ into a scooter that talks to the cloud? ♪ or turn 30-million artifacts... ♪ into a high-tech masterpiece? ♪

whatever your business challenge, dell has the technology and services to help you solve it.

welcome back to the program. you may be watching us on the tele, as they say but check out our website particularly as washington continues to bicker over the debt ceiling. global markets are for now shrugging off the political infighting. mrs., has president bush just taken the u.s. default off the table? the white house is looking at several measures in the event the debt ceiling isn't raised. our website has more analysis on what could happen in that event. and while the global economy might be weak.ing, find out why a global rely in equity markets keeps the aussie dollar strong.

i know ross wants all the details on that one. >> meanwhile, retailers are very much focus again here today. retailers in europe in focus. we saw them coming in better than people had expected. now, hmb, not trading. this is a high street retailer for music and dvds. it's called in the administrators in the uk. so they're going to try and find out whether they can get anybody to take the company over. that's basically protection from critters. they're saddled with high debt. but beyond that, it's looking gloomy for the survival of this company. and burberry stock, mixed bag of numbers, but investors focusing on the fact that retail revenue up 13% in total, 164 million with like for like stores sales growing. andrew lawrence saying the week before christmas was particularly strong in what

europe described as a very difficult quarter. but after the big share fall prices last year when he they talked about chinese sales slowing, stocks make a comeback today. >> the house of representatives will vote this evening on a second package of aide for hurricane sandy victims. the base package totals $17 billion. although lawmakers from the tri state area will try to add an additional $33.7 billion. they face roadblocks from republicans who want spending cuts to help pay for recovery efforts. and vice president joe biden said monday the white house is readying 19 recommendations for president obama on gun control. this comes as new york is said to pass one of the most restricted gun laws in the country. the measure, which passed the state senate monday called for tougher inventives for gun crimes and bans internet sales

of weapons. lance armstrong is set to come clean on oprah. last year he was accused of master mining a long running doping program. that interview is going to be -- >> one to watch. we've seen other news agencies in the u.s. wish that they had gotten it. but you know what bothers me in all this? what's the lesson? there might be a lance armstrong biopick? it's hardly punishment for someone who is potentially fueled by all that attention. >> it will be interesting to see what happens with the foundation. that would be the key and he's plead, i'm sure. >> he can use the foundation as a wie of arguing his case,

bolstering, look at all the good i've done despite this. >> yeah. >> more lance later in the week. these are your headlines. pressure growing on lawmakers to raise the debt ceiling as fitch warnings any delay will prompt a rating review for the u.s. germany sees a worse than expected slowdown in 2012. the economy contracted 0.5% in the fourth quarter the. and dell eyes the private life. reports suggest the pcmaker is in talks with private equity firms for potential buyout. now, dell is being tight lipped, not commenting on reports of several private equity firms include tpg and silver lake par ners have been in talks to take the company private. cnbc's john forte has the latest. >> guys, it would be a huge deal ranking among the biggest private equity deals of all time, market cap north of $20 billion. rumor has it that several large banks have been contacted on the possibility of taking dell

private. dell says it won't comment on rumors or speculation. the stock, meanwhile, was up 13% in the close. the underlying issue here is the pc ecosystem. dell was the poster child for the pc in the '90s. the ecosystem somehow falling apart, thanks to smartphones, tablets and just a general decline there. general sales were down 8% in q3. gardener estimates they were down again nearly 5% in q4. at dell, pcs are half of revenue as of last quarter. both laptops and desktops are shrinking quickly. laptops down 26% last quarter. desktop revenue down 8%. the consumer business actually lost money. what's the road map to turning things around? networkering, serves and storage are doing pretty well for dell. although it's not clear how taking thinks private would grow those faster. it's worth noting that dell is not alone in its current buyout.

hp stock has done worse. amd, the chipmaker is suffering. lots of companies that grew in the pc era have to reinvent themselves anyhow. >> jon fortt, thank you. it really isn't market conditions, it's not the business cycle, it's just the business model. nobody wants a company with declining cash flows or questions about its future. but we are in a period where, despite the fact of the deal, financing could be in place. >> and it's cheap, right? and that's the big driver. >> and the question is are we at the beginning of another presume era move here. and i know brian reynolds and martin and some of the other guests would argue, yes, maybe it wasn't be quite as the last time. >> we'll take a short break. still to come, we'll look ahead at the trading session as fed chairman bernanke warn toes

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choose unlimited rewards with 2% cash back or double miles on every purchase, every day! what's in your wallet? here's your invoice. just remind you at the moment, the british parliament, the secretary from mervyn king, the governor, and other members of the new financial policy committee. that he is they're trying to explain essentially how that play work. new regulations for banks are going to have the power toefkively ask banks to raise capital requirements which would restrict borrowing. that's about potentially the issue of communicating that to the public when they suddenly say, sorry, you can no longer give that credit card loan effectively is what they're going to say. >> well, the whole experiment being watched by central bankers around the world as they explore how to navigate policy from here

and is what mistakes could have been avoid in the past. in the u.s., december retail sales are out at 8:30 a.m. eastern, expected to show a small gape. at 8:30, producer prices. the core is seen up 0.2% stripping out food and inventory. at 10:00 a.m., business inventories expected to show a small increase. and a trio of fed official l speaking about the economy and that includes boston fed president rowsen gren at 8:00 eastern, minnesota fed pet kocherlakot at at 8:30 a.m. and philadelphia pet pretty plosser will be speaking at 12:30 p.m. the dow currently is looking to shed about 18 points at the open, similar declines in the nasdaq, and s&p 500. joining us now, dan greenhouse. >> good morning to you. >> now let's talk about the nasdaq in particular, way down

by apple. let's start with apple, then. what do you see happening with shares from here? >> well, just for starters, we rate the stock a neutral right now and have for several months. i think our advice to investors at this point is probably to stay away. there's a lot of uncertainty. there's a lot of unknowns. the company hasn't saying any about "the wall street journal" article or concerns more generally. so i think it's probably a wise decision to hang out and wait until the company reports and see what kind of guidance they provide. >> and apple, you're looking at a 501 quote there. it is potentially set to open below $500. but, dan, how much of a problem is this going to be for the nasdaq and the indexes more broadly? >> certainly it's more of a problem for the nax das, that's for sure, where it's a considerable portion of the index. it's less, though, for the larger indices like the s&p 500 and certainly the dow. but i think this gets back to what doug cass has called the

nab market, the nothing but apple market. i think while apple has had that's troubles since the fast of last year, the stock market continues to appreciate. so it does underscore the idea that while people look at apple as the market as a whole, the fact remains the stock market has gone up as the stock has done down. >> i would argue it's an nba market and it's moving beyond apple to some extent. is that possible? >> i guess you could make that case. i don't know that there is an actual mba like there is an nba. but yes, we are to some degree moving beyond apple, yes. >> earlier, we talked to a guest who said when you start to get junk yields down to the levels of dividend yields on investment grade companies, you are then going to get a switch, dan, and people will start moving out of fixed income into equity. are you going to see that

happening? >> this is -- this has been a story and an argument that has been on cnbc every day for the last four years. quite frankly, i have no idea when this waited for great rotation into bonds and equity would occur. but i would ask a larger question, and i would implore you to do the same, which is who cares? the stock market, the s&p 500 is up 120% or something off the low. it's up 60% since the end of 2008, give or take. and it occurred while hundreds of billions of dollars has been withdrawn from stock funds in the united states. i'm not sure why this would matter. >> i guess it only matters to you. maybe hoping to catch what we missed the first time around. dan, thanks. >> "squawk box" up next. >> we'll be back tomorrow. what are you doing? nothing. are you stealing our daughter's school supplies

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