this is "worldwide exchange." i'm ross westgate. here are your headlines today. up against the clock, congress votes to end the government shutdown and avoid a default threat. for now, enning the fiscal drama that put the u.s. economy at risk. buy the rumor b wbl sell the news. away from washington to corporate news. ktm plunges nearly 10% after plunging. but they could reconnect.

sab miller does see solid growth in africa. >> you're watching "worldwide exchange," bringing you business news from around the globe. >> all right. a warm welcome to today's edition of "worldwide exchange." well the markets had it right all along. crisis has been averted on capitol hill. and now the senate and house voting to pass the deal nearly at the 11th hour to raise the debt ceiling and reopen the government for now. president obama signed the bill shortly after midnight. steve handelsman wraps it all up from washington. >> good evening, everybody. i want to thank the leadership for coming together and getting this done. hopefully next time it won't be in the 11th hour. hopefully next time it won't be

be -- >> and raised the debt ceiling through february 7th but america came close to default. >> this was pain infliktd on a nation for no good reason. >> reporter: the plan easily passed the senate. >> the motion is adopted. >> reporter: and the house, where most republicans voted no and the tea party vowed to keep targeting obama care. >> we indeed will continue to fight. we're fought going nowhere. >> moderate republicans vowed to prevent another crisis. >> early on targeting the one guy who caused it all, ted cruz. >> but the texas senator loves the obama care light and the spotlight. i am encouraged by the millions of americans who want to get back to the constitution and stop this train wreck of a law that is the biggest job killer in this country. >> after 16 days all of government will be open. debts will get paid. but the partisan fight will go

on. >> i'm steve handelsman nbc news capitol hill. but the reaction has been -- investors believed at the 1 is 1st hour there would be something signed so they haven't fallen off all that much. but this morning, this is where we stand. the ftse off 0.5%. the xetra dax off 0.75%. the ftse mib off 0.8% as well. take a look at the asian reaction. slightly more mixed. nikkei closing up 0.8%. the s&p asx up 0.3% and the s&p index in india down about 0.3%. on the bond markets, the reaction was in u.s. treasury. the debt kreeld 2.6158%. that is pretty much where we were preshutdown. so a big rally in the ten year. as far as currency markets are

concerned, the dollar/yen got up to 99 earlier. asian session right now, dollar/yen back down to 97.90. euro/dollar, back over the 136 mark. later in trade, we were down to 1.3472. the pound back over 1.60 is where we were yesterday. what happens now? we're joined by john hardy head of fx strategy at saxo bank and with me on set mark castillo chairman of the bankers group. john, let's kick off with you first of all. there had been some thought about whether we would see a slowdown in demand long-term impact for u.s. aspects. do you actually see that happening? >> well i think what we see here is a case where because we've nearly seen a temporary delay of a few months the market is very uncertain on whether wire going to see this fight crop up again in a few months time.

and, of course it keeps the fed on hold. we're seeing the dollar weaker across the board, although it didn't seem the market was fearing the market all along. risk assets were up sharply. it's simply a question now i think of the dollar being weak as the fed is anticipating being very much on hold as we get clarity around january and february. >> in a way, the debt ceiling expires, what, february the 7th but with extraordinary measures we might actually see a resolution if we go to the wire again. it might be april or something. there is no fed tapering until at least the back end of the first quarter. >> yeah. you would certainly think is unless we see pronounced progress in the political hard. hard to believe that with several years of not being able to create a budget and merely doing these continuing resolutions time after time. again, the market really saying

here that the fed is very much on hold. >> mark, have you asian comments had any impact or not? >> i am sure that there are very active discussions between the holdings. there's an enormous amount of concern about the unknown, if the united states did default, if the virtual free haven disappears. people didn't have a frame of reference going forward. everyone is relieved. people expected this outcome. the market really only reacts to real event it is status quote for a while. >> they're saying china and japan now own about 67 more treasuries than it did during the previous round of sparring over the debt limit. at the end of the day, is there any substitute for the dollar? particularly bearing in mind they used these as collateral

for trades. what else are they going to use? >> in terms of major currency blocks in terms of the euro the u.s. economy has a way of coming out of problems faster than europe. so i think some people are looking at baskets of currencies stronger smaller countries currencies and people using commodities as virtual currencies for long-term savings and value preservation. but the dollar is still the dollar and there's no major currency threatening that on the horizon that we can see so far. >> john do you see that? there is for all the talk at the end of the dollar the dollar will stay the world currency for quite some time. >> yes. you have seen a lot of steps lately from china move forward with eventual liberalization imploding with its currency. the big swap with europe. in a world where the reserve is so much larger than another, it's going to be there for at leave the a decade to come i

would guess. >> and as far as trading until the year-end does dollar/yen stay in the 95 to 100 level? euro/dollar between 1.30 and 1.38, for example? >> i think we could see the dollar weakness peter out rather quickly. we may see something like 1.38 or slightly newer highs for euro/dollar. but we'll see an anticipation of a november ecb meeting where draghi needs to come out and reach into the toolbox and stop the de facto monetary policy. i see that coming. dollar/yen could see a pretty deep correction. that's been a latent stale trade. and as well can risk appetite continue higher from here? the dollar/yen comes back in either as a safe haven currency if we get risk off or data proves more supportive we get the fed taper back into the cards. >> what do you think dollar/yen could go down to?

so for dollar/yen in terms of volatility, it's high to the down side because i think a lot of stops, a lot of old long positions. 95 could certainly possibly be even lower. but i see these as long-term attractive levels to accumulate dollar/yen. i think there is short-term risk of some down side. >> what do you think martin? if the yen isn't going to weaken any more what happens to institutional flows into japan? >> i think what we'll see is pretty much the economies in asia muddling through where they are, europe and the united states muddling through and trying to get through these obstacles. we saw a big drop off in vix today, too. there is some activity around that. but it's basically within the expected events, i would think and no major corrections unless there's a political risk event which could happen in asia which is getting spaceyer. >> mag, you stick around.

john, thank you very much. the s.e.c. says it has no plan to change u.s. treasury holdings. there you go it confirm what we were just talking about. for more on the debt ceiling, head to cnbc.com. also on the website, has treasuries still in favor? follow us on twitter@cnbcworld. with the prospect of being in the same situation again in just 11 weeks, we're asking do you think it might be any different next time? the president says it would be but is he going to be right? e-mail us, worldwide@cnbc.com, tweet @cnbcwex or direct to me @rosswestgate.

american mobile is rethinking its expansion plan. the company has announced it's not going ahead with its takeover of kpm. american movil owns 30% and says it has not made a decision on what to do with its remaining stake. plenty more to come on the program, as well. the holidays are coming. we'll get reaction from paul caber, chairman of billick. john harwood will be wuls with us at 11:00 cet as investors prepare for a slew of economic data to hit the wires. and is gold just so last year? the precious safe haven stad status may be dented by debt diagram in. fiscal policies in gold have skyrocketed. could they preview the numbers. if that's not enough, as reports suggest chocolatemaker nestle could prepare to by nutella. we'll have a view of the swiss multi national stock, as well. plenty more to come from "worldwide exchange."

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sales in china are up 23% for the first nine months of the year. the world's biggestmaker of cancer drugs said the u.s. health care reform will help extend its market penetration. >> nestle today is up 2.25%. it recorded a 4.4% rise in nine-month sales. it did confirm its annual growth target of 5% in line with a previous forecast of 5% and 6/%. some relieved that they kept that. investors might be eyeing a report into the italian newspaper. we'll keep our eyes on that. catch the interview on european closing bell on 1700 cet. there's more stocks here that are in focus, as well. bskyb reporting a right in fits

quarter revenue, helped by growing customers. profit fell slightly. the company's warning the rest of the year is going to be fairly challenging with uk consumer spending squeeze. we'll find out more. retail sales stock up nearly 5%. diageo down marginally this morning. it's, again, warning over a slowdown in asia. first quarter total sales up 3.1% impaired to 5% in the same period last year. with american growth still fairly solid, head winds as you might expect in europe. sab miller on the other hand stocks up today 4% as well. solid growth in latin america for the global brewer. pretty much in line with forecasts. but the markets still like it. and carrefour in france is up just under 2%. talking about a turn around in its domestic stores reverseing a multi year sales slump. stephane is in paris with more

details. ste far. >> that was important because carrefour makes 48% of its revenue out of france and the company confirmed this morning revenue in its main domestic market. revenue was up 2% organically in the third quarter. that's a contraction for its main rival. the new ceo of carrefour has xwlekted a new strategy with less products and lower price and it gives local managers more availability to adjust their prices. in that part of the globe, the company has been affected by a negative currency fx with the depreciation of the rio in brazil against the euro.

in asia, sales are up nearly 4% due to the recovery of its business in china and in the rest of europe excludeing france. organic sales are down nearly 2%. that's because of the weak economic environment, especially in italy where the sales dropped nearly 5%. in terms of what you say three months ago is confidence with the growth of everything profit of 2.2 billion euros this year at carrefour. so it's a strong set of numbers and that's the reason why the stock is performing well this morning. its top gainer ross on the cac 40. >> stephane thanks for that. now, our next guest meanwhile is under way consumer staples. he thinks the sector is one of the worst places to invest. kevin, good to see you. >> good morning. >> thanks indeed for joining us. we're talking about the likes of unileaver, we've heard this morning.

these guys generate a lot of cash. >> they had exposure to asia which is what investors previously wanted. >> the price in the current environment. these companies have done exceptionally well over the last few years, which has been a climate of fear. we've come through, the lehman's crisis the eurozone crisis fears about the u.s. tapering and, you know various budget implications etcetera. what that means is those companies do very well in a fear based environment. we're now in a situation where some of those elements are behind us. the environment in europe is improving. economic growth in europe is improving. arguably in the u.s. people are being desensitized over there because they're coming so frequent. if we were return to go a better growth environment and we're at the early stages of economic growth globally these aren't the kind of companies that are going to outperform going forward. they will probably do okay. but relative to the market i

think they'll underperform. so my portfolio is very underweight this area and very overweight the more cyclical and financial -- so they've had their day. >> exactly. they've done exceptionally well for numerous years now. these companies were on the nestles, the diaggios are on pes. as opposed to a credit suisse. i think that discretion will close over time as the european economy starts to pick up. >> does that make sense to you, mark? >> i am a bit more bullish coming from the emergeing markets. i have no position on the thoughts that have been described here. but with the growth in africa or the growth in asia the growth in latin america and the growth world population from 7 billion to 9 billion which continues to pay, i think the growth in gdp per capita and the growth in populations will meet the fmcg businesses can be very attractive. but they'll be differentiated by

strategy. someone in alcoholic beverages and they do better in recession can be very different from someone in organic foods which would be less attractive. so i would look at the company, the sector the strategy and the usual factors. >> the interesting thing is they have spent the last couple of quarters. asian growth hasn't been quite what we expected right? and actually they've been damaged by that because you had some growth and it's not quite delivery. unilever has been the same as well. india is one of the world's -- maybe the world's largest brown spirits market. and when these businesses were put together in the 1980s with a combination of deals on the guinness platform a lot of growth opportunities were dramatically underexploited. some of them had been exploited. there's still some to go in the sector if people say focused. >> what you're saying, kevin, is

i'm more interested in leveraging return to growth in europe than you are interested in leveraging growth. >> i think as european companies come out of session into recovery investors will focus more on the domestic markets rather than the emerging markets because that's been the game that's been played for the last four or five years. the growth is still there, don't get me wrong. it's priced in at the moment. >> it's essentially where the pricing is. you mentioned back eurozone. uran banks, yes? >> european banks. the capital ratios are now strong. they can start to return to normal banging. >> if we get some tests that tell us the underlying picture.

>> on a limited basis. i think the major banks in europe know they've done it. you get a few peripheral banks that have to raise some capital. i think that's more than in the price again because you're looking at companies peripherally that are priced at values of 0.6. so it's a very slowly values. >> for a reason. >> for a reason yeah. >> kevin lilley fund manager at old mutual global investors. good to talk to you. let's turn our toengz back to china. the u.s. debt crisis is pushed off until next year. the trade minutester industries are warning its trade may be challenged in the third quarter. still, capital is still going into the country unabated. fund direct investment into china up nearly 5%. >> september. what do you expect from the

growth number? how important is it going to be whatever it is? >> i think you always have to take the official numbers with a small grain of salt. not a medium size out of china. i think the real growth numbers may be around 7, not 7.6. that may be high if you look at the rates of development. it's stale strong story, it's very attractive compared to the developed world. it is slowing, they have environmental issues, some productivity issues, they have some issues to deal with going forward. but i think it will be strong, it will be at the 7.5 %, 6.5%. it's really good going in a world that's mired in problems these days. >> some people are talk about how the vix is now -- if you want to hedge one use the vix much more than you would goal. do you go along with that? >> i don't think i'd substitute playing the vix on a portfolio for gold.

gold hay has played a role in people's portfolios for a long period of time. it's something you buy with deep understanding of the market and whether it's physical or even coins, which is a 5% or 10% premium if you want to keep the coins at home. it's played a significant role in the savings of indian families where women wear their savings as gold. there's a lot of factors that drive the gold market that are unique that you need to understand. i wouldn't substitute vix for gold and i would think about having some small portion of gold in a portfolio. >> there's a big dip in the volatility index poster. mark, good to see you. thanks so much for joining us. still to come on the show bskyb has warned that british consumer spending remains weak and analysts are calling for a pick up in british retail sales today after august's big dip. we'll break that data right after this.

buy the rumor, sell the news

as investors turn their attention away from washington to corporate stories. kpm plunges nearly 10% after american mobile hangs up on its bid to buy the dutch telecom. but the ceo says they could reconnect. and it's a mixed emerging markets consumers staple ss sab miller sees solid growth in africa. we have retail sales out for the uk for the month of september. up 0.6% for the month, up 2.2% on the year. that's stronger than the forecast to rise 0.3% on the month, up 1.9% on the year. that's the fastest growth since first quarter 2008. the september figures come off a bit of a dip in august. joining us with his thoughts paul cavener.

thanks for joining us. a bit of a rebound in the economy. people have been wondering, bear in mind they have no average earnings increase. what is consumer spending based on? >> first of all, that is a good number. there was the potential for september to be a rather good month. if you pick up on some of the stocks likes next and marks & spencer, they have a wobble towards the end of the month in their share prices. and that was on the basis, particularly in the uk it's a critical time for these retailers as they're start to go stop new goods. >> and it's a very warm september. >> and as a result of that there was a fear that many of these stocks were seeing the numbers. at the moment the savings ratio in the uk is certainly on a down

trend. i think during the recession and during the financial crisis it was notable how consumers started increasing the savings ratio of money and putting money aside, repaying debt. but over the course over the summer months of 2013 it's been notable that the savings ratio has started to dip back down again. so it's a sign that consumers i don't think are necessarily spending this money out of wage increases. >> yeah. which is going to be interesting for how -- you know what happens in the future. uk sales down 6.9% over the first half to 7.5%. this used to be roadway occurring theme where the national markets are doing well but the uk market is tough. >> it is tough. when you analyze the number we're not necessarily talking about volume growth in terms of selling more. it's the fact that there is inflation in the system inflation data earlier this week

was indicating that area on year we're up around 2.7% at the moment and, therefore, it's 0.6% month on more is indicative more of the price increase. >> so from an investment point of view, what do you do with the exposed consumer in the uk at the moment? do you avoid? and if you are leveraging that is there somewhere to go or not? >> yes. well, the consumer at the moment is still a stable area of the economy. as a result of that if you can go with a well managed brand operating competitively in this market at the moment we know on high street there are certain business models becoming unstopped. they're finding life quite difficult at the moment and it is good management that is sort of able to navigate the down term. >> who are now a distribution center for ebay. right? >> absolutely. so the way you manage the business model, the back drop is stable. you have got some strong brands. you've got some weak brands in there at the moment. so there are ways of playing

this market. i think when you look more internationally, where the opportunity lies at the moment particularly when we're going to be talking about diaggio and unilever, is that the emerging markets has been a story and there's a view there as to whether emerging markets are slowing down permanently or whether there is a blitz and if it's a blitz, it's up side. >> we'll look at that. let's bring you up to speed with nestle. there were reports that nestle was looking at buying the nutellamaker. dallas release that came out that says nestle is not planning any big acquisitions at the moment. he says he sees 5% to 6% growth next year. seems fairly doable and acceleration should continue in the fourth quarter. as for the earnings paul mentioned diaggio. first quarter total sales up 3. %. north american growth is solid. head winds, though still in

europe. it's different emerging markets story for sab miller, the brewer. it's reported solid growth in america. overall net sales up 4% in the first half of the your largely in line with forecasts. he says europe continues to drag where sales are flat. interesting. kevin was on earlier saying companies like diaggio are very rich on price. are investors now looking at a cyclical growth story? >> essentially. essentially. i think the area i would disagree with kevin on his analysis is why are they on 16? from an equities standpoint they have become quite rich. but what is in the back drop is the fact that plantive money has been pushed out of bonds. it's found its way into the equity markets at the moment. you've got long bond yields now down at 2%. what's happened is there's been

a crunch in the earnings shield on very stable consumer stocks. they may have a bit of weakness in asia. the north america base is bubbling up at the moment. i think the aurm whether it's back is more akin to whether it starts to suck the money back out of the markets and back into safe haven assets. i think it will continue to expand in these core consumers. >> whether investors -- you know, what is it they're going to want? are they going to want growth or are they going to want cash generation? i don't know what the answer is to that. >> with unilever we're not talking about a business going into reverse.

where corporate res so much better positioned, we have a handle on that slowdown is they've got the ability to cut costs. and they've been able to do that very successfully. and it's that cash flow that earn eggs shield which has been attracting investors, the stability of it and compared to pay high prices for it. >> let's look at bskyb, as well. it had a rise in its first quarter revenue. profits down slidely. the company said the rest of the year will be challenging because of that squeeze in uk consumer spending. what do you make of bskyb? >> it's been forecast for about ten years. >> it should never have been this successful right? >> it's a platform telling. and you think in this day and age of streaming, video have been tv how successful can that plant form prove to be? but what these numbers prove today, and really the recent story is entering the sports markets, trying to undermine the

key pillars support for bskyb, wa damage will that do? and the numbers that we saw today, particularly new subscriber numbers were way ahead of expectations. what that does mean is that the profitability for the first quarter means full year expectations are now very much i think, looking firmed up and room for upgrades i suspect as you go through q2 and q3. inverse that. put it on an earnings shield. look at the stability of the income. that's why i think it's an attractive investment in the near term. longer term it does continue to face challenges the way that people access consumers. okay. all right. stick around, paul. meanwhile congress voted at the 11th hour to pass a bill ending the 16-day u.s. government shutdown and lift the debt ceiling, the there by averting the threat of default. the senate voted 81-18 on the measure crafted by marry read

and mitch mcconnell. the house followed. it passed the bill by 285-144 margin. every democrat in congress voted yes. a majority of house republicans voted no. the deal will fund the u.s. government through to january the 15th. it will raise the debt ceiling until february 7th. that's not that far away. lawmakers are required to try and hammer out a long-term deal through a bipartisan committee. democrats have weighed in following their vote. >> averting this crisis is historic. let's be honest. this is pain inflicted on a nation for no good reason and cannot make cannot make the same mistake again. >> this is not a happy day. it's a somber day. because at the end of the day, we never should have gone through wa we went through.

joining us from washington is tracie potts. they say we shouldn't have gone through what we've gone twlu what are the chances of it repeating again? >> fairly good chance that we'll see some back and forth, but in terms of a shutdown that lasts this long, likely not. there was serious damage done here on damage to the economy, $24 billion loss in the course of this shutdown and very much damage politically to both parties. but especially the republican party. poll after poll has shown that the american public more so than the democratic party blames the republican party for this shutdown and for coming so close to the debt ceiling. so will we see this repeated again in december when that more permanent plan is due? unlikely that we'll see a shutdown, but certainly a lot of back and forth, especially about health care which is the one thing that this deal did not

really address. >> how quickly are things going to get up and running? how quickly will we get economic data? >> there may be a backlog of things to deal with when these workers comes back. but they're coming back to work this morning. the office of management and budget put out a statement late last night literally for people to watch the news and if this passed, they were due at work this morning. president obama said it yesterday, that when this passed government would reopen immediately. so you'll see people back on the job today. but depending on you know which services halted during the shutdown, it may take a while to work through that bag lock of work that piled up the last few weeks. >> and the president will be speaking this morning. what do we expect him to say? >> well he's likely going to be looking forward and talking about what happens between now

and december 13th. and in just a few weeks, they're going to try to do frankly what congress hasn't been able to do in the last forefour years, which is to come up with a budget. if they don't, then we're in the very same place in a few weeks, in the middle of december that we were just a couple of weeks ago. what is going to be the path forward? that is likely what we're going to hear the president talk about today. these negotiations over health care. now, the white house, president obama, democrats have gotten what they wanted. government reopened first. he promised to talk about health care after government reopened. people are going back to work today. now they have to have very difficult discussions over where republicans want to scale back and severely scale back a health plan that they don't think is working at all. >> tracie good to speak to you. thanks very much. you're pulling long hours in washington. tracie potts from america's capital. >> tokyo stocks were higher on the news that the u.s. congress

passed a deal and didn't default. yukako has more for us. >> hi. the nikkei 225 closed up 119 points on a relief rally is and is now in a seven-day winning streak for the first time in seven months. the yen was around 98.8 yen against the dollar. this pushed up exports in shares. now that the u.s. debt issue has settled, the market interest is moving towards corporate earnings later to start in about two weeks time. backed by the weakening yen, we could be seeing much companies revising forecasts up towards for the full year through march potentially sending the nikkei to its way to its highs. the news is likely to provide comfort to the abe government. earlier this week, japan's finance minister warned u.s. legislaturemakers that a potential default has great global implicationes and could harm japan's economy.

that threat is removed, at least for now. that's all from the nikkei business report. back to you, ross. >> thanks for that. paul is still with us as well. all the way through this process, bearing in mind how closely we got, incesters are quite sanguin, i think. >> yes. >> i don't think the market dshg it never had a deal not priced into it. hence today's slippage back. but what it tells me at the back drop of the moment is that we're going to continue to go through a spin cycle. we're going through this area of increased optimism around the economy at the moment. but i think the most telling comment from ben bernanke at the september meeting was how the move in long yields had started to impact on economic growth on some of their forecasts. and it just goes to highlight

how sensitive the whole issue is around interest rates. we mustn't lose sight of the fact that there's still lots of debt out there at the moment and, really the economy has been sort of -- it's a confidence issue at the moment. and i feel confident it's going to come in waves and can be knocked. the net result of that, of course is what happened to yields and what happens to the equity market. my suspicion as a result of the process that we've been through over the last few weeks is we're going to move now to a period of jumping what impact that had on the short-term economy, what impact that has on the risk premium associated to the u.s. securities, and then priced out accordingly. >> our suspicion is it didn't have too much damage and, hence the data will start to pick up the economy next year. but for my money, i don't think we're off to the races yet. >> and it's interesting what the page book talked about, employment remains modest. >> it is. with janet yellen coming on

board, she does not see the inflation risk that others potentially do. >> we just had a spanish auction out. 2.081%, lower yields from 2.24% on september the 19th. the 2018 maximum yields dipped from 3.16%, as well. appreciatory yields also down with the preshutdown. and european equities, as paul was alluding to are soft they are morning, get ago do happen deal done was always the base assumption, of course. we'll take a short break. still to come we'll talk about ibm in a few moments.

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revenue, though came in light. $23.7 billion versus 24.8 expected. a big part of the problem here was in wa ibm called growth markets. particularly in china. there was a big part of purchase of hardware in china ahead of the government developing a new economic development plan. they expect to see that in mid november and then they'll have to adjust to it. but apparently the sales team saying there's a big slowdown until china figures out how they're going to reconfigure the way they buy and do things. ibc's ceo saying it will take a couple of quarters before they get back on track. saying that the five point decline in growth markets will -- to that china decline, which was down more than 20%. now, as far as ibm specific units, global technology services was definitely amiss

under the close to $10 billion that the street was looking for. global businesses services higher end services did a little better, but still a little bit under what wall street was looking for. software came in shine of the $5.98 billion that the street wanted. hardware, though in part because of that china problem well off the target that china was looking for. but ibm saying they still expect to meet their full year epfs targets trying to reassure the street on that. but after several quarter of revenue misses disappointments now in china. analysts were giving ibm a difficult time on the call wondering whether to readjust their models for cnbc i'm jon fortt. mean wile the world's top chipmaker sees a decrease in sales. tsms says fourth quarter revenue will likely fall in the fourth

quarter. the taiwanese firm holding a record $1.8el billion in its first quarter, rising 2% on the year. a pick up in i.t. spending in developed markets is paying dividends. india's major outsources hcl beat earnings estimates taking in more profit in the september quarter than last year. but hcl shares slipped today after recent gains. it beat estimates earlier this week and it's considering a big boost to hiring. the ceo says stronger demand to the u.s. and europe makes a difference. >> the u.s. will continue to grow into our longest market. the euro is picking up momentum for us. and i think what markets will do well. >> and shipments are up and debt is down at the world's number

four iron ore producer. it ships 61% more iron ore in the september quarter compared to last year. with prices up australian firms start to go pay down debt as it finishes off a $9 billion expansion. the shares slipped nearly 3% in trade after recently hitting a 17-month high. fresh off the report the chairman and founder spoke to cnbc in a first on cnbc interview. >> what you have is a 50 to 100 year demographic change where the peoples of the emerging markets will drag themselves kicking and screaming. there will be no way to ever start into standards of living which you enjoy, which i enjoy. and that will bring a long-term demand on resources. you'll see prices go down and prices go up. you'll need to be at the bottom end of your cost curve to survive when they go down because they will. but you are in a 50 to 100-year

growth cycle. >> that's the latest from fortescue. basic resources have been a big underperformer over the last couple of years. is that going to change or not? we're starting to see chinese demand for iron ore up at a record last set of numbers and production for the majors looks to be okay. >> it does. there's certainly potential for a rating on these stocks. two main things happening here at the moment. foifrt all, crisis and demand is not collapsing quite the way i think the fears were earlier this year. secondly, most of the major mining groups responded with cost cutting initiatives, so they're not increasing investments at the moment. rio tinto this year set out to take the $750 million out in terms of costs. and by q3 had already achieved at least $729 million. so the scope for the cost cutting initiative of rio tinto. glencore when they bought xstrata did exactly the same. there's been a real down on investments at the moment and,

of course, at the same time, prices holding up and production holding up better than expected means that the profitability is coming through for the businesses. the rating has collapsed and that is part of the reason why the sector has been an underperformer of late. but i think it is a sector that potentially is the play the swing factor over the course of the next six months. >> yeah. it will be interesting where we go. let's -- with that let's see what happens. a couple of other things we're looking at as well. we're going to be talking about gold the second half. do you think gold has lost its luster? >> yes. i think for the near term i think gold is still unwinding as a trade. it always was an asset class that played to fears. and as a result of that it's very hard to base it with substance as an asset class and, therefore, it becomes the ultimate motive trade. and if you feel the reason why it's tracked higher you can see

that begin to go undermine. i don't think that necessarily unwinds at the moment but i think it has further to fall back before one would be tempted back in with further exposure. >> paul good to see you today. thanks very much, indeed. we'll get retail sales and output data. three of china's major banks coming out with data. we'll get a quarterly activity update from the aut australian energy major santos. and the latest deal by congress to avoid a u.s. default was not enough to avoid a debt

downgrade from china's degong cut its u.s. sovereign dut rating to a minus from a previous rating of a. it said the latest deal failed to change america's rising debt issues and it kept its negative outlook, as well saying it didn't see any solution to the problems in sight. coming up we're asking how the government can avoid a repetition of the dead lock. the second hour of "worldwide exchange" is up right after this.

this is "worldwide exchange." i'm ross westgate. your headlines today. up against the clock, congress has vote onned to end the government shutdown and avoid a default. and in the political drama that put the u.s. economy at risk. buy the rumor, sell the facts. stocks in europe come off their high as investors turn their attention away from washington to the corporate agenda. and talking of which, kpm is down nearly 10% after they hang up on their bid to buy the dutch telecom. the ceo says they could still reconnect. and it's a mixed emerging markets picture. nestle and diaggio warping over asia's slowdown. sab miller the brewer seeing solid growth in africa.

>> you're watching "worldwide exchange," bringing us business news from around the globe. the senate acted first to pass a motion. the house followed passing the bill by 285-144 margin. every democrat in congress voted yes while the majority of house republicans, including budget chairman paul ryan voted no. the deal funds the u.s. government through january the 15th and raises the debt ceiling until february the 7th. lawmakers are required to try to hammer out a long-term budget deal by december the 13th through a bipartisan committee. senate democrats have weighed in following their votes.

>> averting this crisis is historic. this was pain inflicted on a nation for no good reason and we cannot make the same mistake again. >> this is not a happy day. it's a somber day. because at the end of the day, we never should have gone through what we went through. >> now, the president quickly signed the legislation shortly after midnight. he spoke at the white house wednesday saying the u.s. can now begin to lift the cloud of uncertainty for businesses and the american people. >> once again, i want to thank the leadership for coming together and getting this done the hopefully next time it won't be in the 111th hour. one of the things i said throughout this process is we've got to get out of the habit of governing by crisis. >> isn't this going to happen all over again in a few months? >> no. >> all right. joining us now is our very own

john harwood. john, the approximated said no we're not going to do it all in a few months. but bearing in mind 144 republicans voted against this bill, what are the chances we will be back here? >> yeah that's a big unknown, ross. the president's goal in taking a hard line not having a negotiation about the weigh out their goals some republicans have pushed defunding obama care repealing obama care delaying obama care he took that hard line because he was making the point that just to keep the government over and just to pay our bills, which is what raising the debt limit would do is not going to cause me to have to give a whole lot of ground. he thinks he's established that principal and can repeat it when we hit the debt ceiling in february. we don't know the answer to that question. it is possible that he succeeded but it's possible you'll see the

same fashion come back and attempt to do this again. if we see one this round, and he is hoping that he set a precedent for more which does not mean he's going to win on over legislative fights immigration or on the kind of budget deal that he wants. >> and they could have put together this bipartisan committee now. what are our hopes for that. >> i think the best that is likely to come out of that bypartson committee, ross a small budget deal that replaces some parts of the budget sequester. there's across the board cuts that members don't like. replace some of those with longer term savings and entitlement programs. now, the question is if you have a large deal that goes after the largest of those entitlement programs medicare

and social security, democrats are going to insist on some tax increases to go with that. if republicans say no and every indication we have is that they will say no the speaker said so at his news conference yesterday, that means we're like willing to get a smaller deal out of that not the far raining changes to medicare and social security. but that's the issues facing that committee. >> you always characterize that as john boehner facing down the right wing of the party. where has this skirmish left him? >> well john boehner got a lot of support yesterday from members of his caucus. i was told in the final caucus meeting before they took their stance on the vote and came out and decided that a significant number of republicans would be for it there was a rally around the speaker. but it's plain that john boehner doesn't really have control over his caucus. he has governed by letting them

have their voice. what that means is the most intense voice, the most extreme voices tend to push the rest of the caucus around. the other members, the other 180 so members of the republican majority decide they're not going to put up with the shenanigans of that extreme group and they if they make that decision, could help boehner achieve some things or take a different stance a more reasonable stance, that has a greater likely hoof of success. the problem is when you have a republican majority and you try to get your priorities passed with only republican votes, you've got to have everybody with you and that group, by withdrawing their support, can push the speaker in directions he doesn't want to go. that's what happens in this case. he hopes it won't happen the next time, but we don't know. >> john good to see you.

good stuff. thanks, john. >> i do. >> yeah, good. i think you're going to need it. let's see where the futures are right now. remember the u.s. dow is up five points. closing down right now. we are some 2 points below fair value. the nasdaq at the moment is what, ten points below fair value and the s&p 500 is about 5 points below fair value and about 100 points below fair value for the dow. tracking what's happening in european markets the ftse mib down 0.6% cac 40 down 0.6% as well. it's very much a case that market beliefs believed a deal would always be done. they effectively priced that in by and large.

asian markets slightly more mixed. the sensex in india off 0.3% as well. so the australia up a third, i should say. on the bond markets, a big move in treasury yields. 2.7%. we saw the yield on the ten-year right now, we're trading at 2.62 years on the treasury. preshutdown, we were up around 2.611 is%. so nearly back down to the preshutdown levels. currency markets, euro/dollar is up modestly. yesterday, euro/dollar is trading at 1.34. the dollar has weakened during the session today. at the same time the u.s. government is up 6% off. the s&p which cut the u.s. credit rating during the last debt ceiling crisis in 201 1 says the short turn around for congress to negotiate a longer

term budget deal will likely weigh on consumer confidence going into the holiday season. joining us with his thoughts, brian gardener senior vice president washington research analyst. brian, thanks for joining us. what damage do you think this episode has done? >> good morning. i think it's temporary. a lot of this is timing. i think a lot of americans, they sit back are going to wonder you know, how much value was added by government? a lot of people just went on unaffected. they didn't like the stories and the pictures of national monument life being shut down. now, a lot of that economic activity that wasn't going on because of the shutdown will get pushed off for a few months. i think the damage is minimal. >> we don't know was going to happen next. we might be back here.

so is the -- maybe the key take away here is that the fed isn't going to do anything for quite some time. >> i think that is the key take away ross. i think skeptic yag that the fed was going to act until next year, anyway. and if you take the logic that ben bernanke laid out in his september press conference which is the fiscal situation and the impact on congress going to put the fed on hold for a few months well if we're on hold back in the fall i would expect them to stay on hold in the winter. so assuming that janet yellen comes in and is confirmed, i don't expect any action on tapering at the january meeting, which could be her first meeting depending on when she's confirmed. that gets us into march. as we've talked about this morning with your other guests the new timeline suggests that

we're looking at the march meeting being affected by a debt ceiling debate and the government funding debate throughout the winter. so the fed may be on hold longer than people have factored in so far. >> and the one deal we did get out of facebook is that you know, is a key things for the fed. if that's the case brian, what happens to -- how are asset prices going to reaction? >> you know i think the equity markets have become you know addicted to tapering. we've seen the swings going on and you -- over the last couple of months. anytime a fed official has opined on the outcome of tapering and the timing of tapering, you can go back over the last three or four years. and you see anytime the fed acts on qe mentions qe in a positive

light, you see the s&p react positively. i would expect that to keep happening, although i think as qe has kind of -- it had diminishing returns in its iterations as we've gone from qe1 to qe3 the. i think it will have less impact on the market. one thing i would look for, too, when they go to qe to tapering is how they taper. the composition of the tapering. i think some people are focused in on the overall number. i think the fed will keep the pace of purchases on a mortgage backed security side. even despite what has been going on in washington for the last couple of months before that ever started, i think there was growing concern about where the ten year was going, where mortgage rates are going. >> yeah.

wool see what happens. brian, stick around. you can get a coffee like john is doing in washington, as well. thanks for now, brian gartner. >> will do. >> and for more on the debt ceiling debacle, head to cnbc.com. read up on whether emerging markets are going to rally in the wake of the deal too void a u.s. default. also on the website, we're investigating the american credibility. how much american credible has been damaged to the point that perhaps big holders of treasury might look to rude their demand. you can follow us on twitter, @cnbcworld. so with the prospect as well as being in the same situation again in 11 weeks, we're asking do you think it might be different than next time? get in touch with us. worldwide@cnbc.com @cnbcwex or direct to me@are @rosswestgate.

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a debt deal in the final hour. and necessarily is circling nutella, according to reports. quite a few stocks today in focus here in europe. let's kick off with those in switzerland, first of all. full year earnings will disappoint after they revealed it's taking a write-down on stocks. the stock is up 1.5%. roche posted an 8% rise in its third quarter sales. that topped analyst sales forecast. sales in cheeven na are up 30%. it says the u.s. health reform would help extend its market penetration.

a slowdown in emerging markets and price pressure owes europe weighing on results. the key thing is the company confirmed its annual growth target of 5% in line with previous forecasts as some relieved about that as well. investors have been eyeing a report in the italian newspaper republica. in a post selling conference call, the ceo said that he had no plans for a major acquisition at this time. and carolin roth will be speaking to the ceo today. catch that grew on european closing bell from 1700 cet. now, away from switzerland, other earnings in focus particularly in the uk bskyb having a rise in q1 revenue helped by growing customers and additional deposits sold to existing subscribers. the stock up 5% despite profits

down slightly and the company says the rest of the year will remain fairly challenging. diaggio today, that stock up 0.5%. it's again, warned over a slow yun in asia. north american growth is still pretty solid, although there are still headwind necessary europe. sab miller the brewer its stock up 4% at the moment. solid growth in latin america and africa. overall net sales up around 4% in the first half of the year. that's largely in line with forecasts. and the french super market with carrefour, up 2% at the moment. it posted a turn around in its comparable stores. at the same time, we've got our eyes on cpm. he says he can't comment on whether american movil will

remain a shareholder. the phone company has announced it will not its takeover of kpm. america movil says it has not decided what to do with its current stake. that's corporate news right now out of here in the european trade. still to come gold may have shrugged off the recent u.s. debt drama, but our next guest is telling us fiscal trade volumes have skyrocketed in recent week. as we do so a recap of where stocks are right now here in europe.

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the next guest says fiscal trading volumes have skyrocketed. joining us is michael hanes of the ceo pressure metals exchange. michael, good to see you. look investors have lost faith in gold as a store of value. >> well if you look at their recent history, our physical trading volumes have been up somewhere between 200 to 4 had 00% over the last ten days. and remember that the physical buyers have a longer term interest rather than the short-term buyers who are often looking for day trading. but the physical buyers have a longer term view and they're certainly been buying on the down tick or the uptick recently. >> yeah. why doesn't that translate into into -- if that's true we have more physical buyers why

doesn't that translate into the short-term investors has a bigger impact on price? >> i think this is just economics 101. there's more trading in the short-term than there is for the long-term. so those short-term buyers tend to dictate current prices a lot more. but the physical buyers have been taking product off the market here. quite heavily. really, since the first of the year. you've got demand for, say, the u.s. american eagle or the u.s. consumer eagle both up about 40% year over year. so the physical side like these coins over here the u.s. one ounce gold american eagle, the demand for these types of physical coins has been skyrocketing. >> who is buying that? where is that nand coming from?

>> well again, beside tess fact that these buyers have a long-term view we have a lot of high net worth individuals are looking to diversify away from etfs where they can't get their hands on the physical necessarily if they happened to. so they're taking a portion of either their gold etf or their silver etf, maintaining their exposure to the metals markets, but converting that position into physical, like i have here with the one ounce gold of american eagle. they're converting part of that position into fg. we also have people on the other end of the spectrum the millennials and only 30s who are buying a lot of silver because they don't trust the direction of what's happening in the u.s. currency, that those governments

don't have control of their own currencies. >> what are you holding in your hahn, about $26,000 in gold there in that hand? >> yeah. this is about -- these are one owns gold american eagles up about 30 bucks or so in the last hour. this is a 00 ounce silver bar. i knew you would like this one because it's flashy. this is your kind of thing, ross. a lot of people like those. it's a nooid night handful of silver. thanks for that michael. always good to see you, michael hanes from american pressure metals exchange. nice to just carry around the physical stuff with you, isn't it? we'll take a short break. we'll talk more about the implications of the political agreement in washington. is it going to be different next time or not? we've been asking that. they will never slow down the spending until it's too late and they don't care, anyway. what do you think? e-mail us.

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than any other airline. [ thai ] which airline do you fly? [ passenger ] united. [ male announcer ] that's great, big world friendly. ♪ ♪ this is "worldwide exchange." i'm ross westgate. the headlines today, up against the clock, congress votes to end the government shutdown and avoid a default threat.

ending for now, the drama that put the u.s. economy at risk. buy the rumor, sell the facts. attention now away from washington with a corporate agenda. and on that front, kpn is down nearly 10% after american movil hangs up on its advice with the dutch telecoms group. they could reconnect. and it's been mixed emerging markets picture for sab miller. they are talking about pretty good growth in africa and latin america. all right. if you've just joined us today stateside, welcome to the start of your global trading day. it's been all about the reaction to what happens in washington. congress voting at the 11th hour to pass a bill ending the 16-day

u.s. government shutdown and lift the debt ceiling. futures, you can see, are pointing down right now. the dow is about 1111 points above fair value. the s&p is 7.5 points below fair value. the senate acted in the drama yesterday. and minority leader mitch mccoppel and harry reid drafted a agreement. every democrat in congress voted yes. a majority of house republicans, including the budget chairman paul ryan voted no. the deal will fund the u.s. government through to january the 15th. it will raise the debt ceiling until february 7th. lawmakers also are required to try to hammer out a long-term budget deal by december the 17th with a bipartisan committee. >> averting this crisis is

historic. let's be honest this is pain inflicted on a nation for no good reason and we cannot make the same mistake again. >> this is not a happy day. it's a somber day. because at the end of the day, we never should have gone through what we went through. >> cnbc's john harwood rejoins us from washington. john, what happens now? >> what happens now is that we have a negotiation between the house and senate republics and democrats, to try to come up with a budget for the rest of the year. remember this spending plan which reopened the government runs through january 15th. and that budget plan both side hope, will involve rearranging some of the sequesting cuts the across the board cutsry placing

them with more sensible long-term entitlement cuts. and if they can do that that will be a step forward out of this committee. there's no certainty that they will reach a deal .there's no certainty of the size of the deal. the larger the deal that is possible, the more democrats are going to insist on tax increases and that's sort to have trading range we're looking at. the follow on question is going to be when we get to mid february and we run up against the debt limit again, are we going to have the same sort of bring usmanship that puts uncertainty in global markets and threatens harm to the economy? the president is betting no but we're going to have to wait and see. >> and this all started because the gop wants to repeal obama care. presumably they still want to do that. and the president said i'm not going to talk about anything like that until the government is reopened. so where does that debate now go?

>> well it really goes deeper than obama care ross. i think it's increasingly daunting on people on the right that that's going to be an impossible goal as long as the president control tess white house and democrats control the senate. but it really runs deeper to the idea that this republican majority in the house was elected in 2010 with the belief that they had a mandate to cut back government to stop what they consider excessive government spending. the problem is they haven't adjusted to the fact that the president two years after that was re-elected and that he's got a say in this as well. so the balance between their view of what their legitimate role is and the reality that they only control one half of one-third of the u.s. government is the recognition that is at the heart of whether or not we're going to make problem from

here on out. >> and, john maybe the polls might help them realize, you know, the reality a little bit. i mine how big of a factor is that going to play over the next few months? >> well the problem is that members of congress in their individual districts, many of which are very lopsided in favor of one party or the other, insulates members from national public opinion. the people would care about national public opinion and those numbers are terrible for republicans and would cause the republican party as a whole to want to change course are those who are going to run for president. because that's the only national election we have. to some degree people running for the senate and republicans are trying to recapture the senate in 2014. but the -- so the poll ves an impact, but they have a limited impact. ross, i have to ask you as somebody watching from across

the pond are you impressed with the efficiency of our political system? just like the manufacturers, congress believes in just in time delivery and that's what we got last night. >> the thing is that's what everybody thought we would get. so in some ways they have fulfilled the expectations. i wish we had better expectations. >> exactly. that's their strategy set expectations at rock bottom .meet those rock bottom expectations. >> just like some of the best corporates do. john, good stuff. thanks for joining us this morning. plenty more to come from you as well. >> you bet. >> later on cnbc and on "squawk box." brian gardener is also joining us from new york. george concalvis at nomura. george, let's kick off with you, first of all. we saw u.s. treasuries up around 2.7%. this morning, they've been down to yield on the ten-year 2.62.

what happens now? we've got this deal but hey, we could be back here in 1 1 weeks. >> that's right. if you were to give this news ahead of what actually happened and we asked what would happen to the bond market you would think the opposite. you would think it would be a relief sell-off and that equities would do better. but the follow on we saw the knee jerk reaction in equities but this morning we're not seeing any follow through there. but the bond market kept rallying. it tells you that the bond market has seen this and they're realize there's been a lot of damage to the economy. 2013 was a year of write-off. it started with fiscal crisis it looks like it's going to end with the fiscal crisis. >> and we were talking about it earlier with brian and we'll get his few in a moment as well. how far back are you now pushing any expectation of u.s. tapering?

>> so we actually you know before the news actually broke, we moved it back to sometime in the first quarter of next year. if the stars line up if the economy starts to improve, if we get a fiscal deal that's longer than every three months. i think the fed will be in a position to slowly start to reduce some of its easing. but the proof is in the pudding. we've been at this all year long. until we get something that's more substantial, i think the markets will remain skeptical. you have the change in fed leadership that potentially is going to be coming. i think all those things suggest to us that slow and steady and it's one of the reasons why the fed will do the right thing by not tapering in september. so all this is kind of lining up for a bond market that should stay within a very stable range. >> brian, let's bring you back in. what's the best do you think we can hope for politically as far as investors are concerned? >> you know i think a modest

deal on the budget which funds the government through the rest of the year as john was allude to go earlier, maybe you trade some of the sequestration cuts for some modest entitlement cuts. i think a larger deal is un unrealistic. we've tried to get these large budget deals since 2011 since the original kind of debt ceiling crisis that we've been through. and we go through these efforts every few months and they don't do anything. then on the debt ceiling, i think that's a tougher one. look conservative republicans who ran in 2011 can never raise the debt ceiling without concessions. kind of you know bit the bullet on this one. .i think they're going to come back and look for deeper concessions as part of the debt ceiling list in february and probably march. so we're really not talking about february, we're talking about march again.

they can they get out of this? i think their strategy has been wrong the last few months because they got in the way of the unveiling of obama care which from all instances seems to be unsuccessful and i think it's going to be quite unpopular. once they get out of the way, and that becomes one of the lead stories in the press, i want to see how public opinion towards obama care changes and whether they may actually have an opening to make changes to obama care as part of the debt ceiling. but i still think that's a stretch. so i think the best outcomes are just modest changes in the budget, funded for the rest of the year and getting longer term debt ceiling that gets us through the midterm elections in 2014. that's a pretty good outcome and, really the best that the market can home for. >> bribe, good to see you this morning. thanks for joining us in washington. george, you stick around. we'll come back to you. also still to come goldman sachs rebuilds third quarter

earnings before the bell. our next guest has downgraded his rating on the bank. we'll find out why right after this.

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get back to business after congress seals a debt deal in the time hour. the news fail toes deliver equities as a slew of earnings takes center stage. and goldman sachs is up with quarterly results expecting the lowest revenue in more than a year. ibm's third quarter earnings beat forecasts, but revenued missed. big blue's cfo says the third quarter is historically difficult, but he added that the company faced particular challenges this time around blaming china for the slowdown in the hardware business. he also expects the division to return to profit growth in the second half of 2014. ibm stock was down 6% in after hours. in frankfurt, it's matching that fall. american express's third quarter profits is up 9% beating forecasts and higher spending by card members.

a am ex has a more affluent customer base. it says it hasn't suffered any direct impact from the u.s. government shutdown and it's seen a pick up in spending after more than a year of sluggish growth. am ex in frankfurt is down around 0.8%. as far as the ifo is concerned, its third quarter earnings beat forecasts. the online reaction site gave a disappointing outlook for the holiday season. it's citing un -- outlook in america. ebay is sticking with its full year forecast. its stock is off after hours and down 5% in frankfurt trade. goldman sachs continues a busy week of earnings. analysts are paying close attention to the investment trading arm, which produced more revenue than expected in the last quarter.

mark moosby joins us from memphis. always good to speak to you. we have disappointment so far from the big banks. is goldman going to be any different? >> well, what we've seen is a lot of what we expected though. revenues from the brokers/dealerside size. but then what we've got is a favorable appositive coming out of the asset quality. charge offsets continue to improve. at the banks, we've seen a 50% cut over the large of last year. goldman will be very particular in the sense it's different than what we've seen. it's the first pure broker dealer that will releel. they don't have the benefit of asset quality. we'll see the pressure on the revenues from the broker/dealer side without some of the off set that's we saw from jpmorgan and wells fargo early on in the season. >> it gives us a cleaner look

as you say. what do you think is the impact that we've gone through, a bit of volatility and gone through the discussions in washington? and then you thought that the fete would taper and not taper? >> well, a lot of what we've seen in the capital markets broker dealer revenues fixed income, equity the customer activities kind of went to the sidelines as you went through the seasonally low july and august. but also as the anticipation of what the fed decision was going to do in september. we're past that decision, but we turned the calendar into october sort of had to deal with the fiscal cliff and all the other things we're looking at in raising the debt ceiling. hopefully we'll get to see these capital markets activities start to come back. we know what the third quarter was. it was, like you said a

disappointing revenue quarter. but as we started to see the first trends of some rebound that we can anticipate in the fourth quarter. >> we had talked before about them, you know, incremental revenue being created with higher margins. is that -- can they still do that? is that story still in play? >> well one of the things that we're looking at today is we have about 50 to 60 cents reduction from last quarter. the market is expecting closer to about 90 cents of reduction in eps. the big difference can be expenses. make some adjustments to what you're looking at in the sense of commissions, looking at what you would look at. year-end types of bonuses and accruals. so we might see a lot bit of that this quart he hoping to soften the month on the revenue side with expense savings that maybe you wouldn't anticipate typically in the fourth quarter. >> monte, good to see you this

morning. still to come, as yuan investors cheer the debt deal yesterday, but a brief rally looks as though it's already petered out. what happens next? we'll get into it. ♪ ♪ ♪ ♪ [ male announcer ]

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we have september housing starts production that have been punished off because of the shutdown. we have jobless claims at 8:30. we have dallas's rush ard fisher esther george in addition to goldman sachs, we have earnings from verizon

before the opening bell. after the close, we'll hear from google amt. within minutes of the house vote thursday night, the wheels of the u.s. government started to turn again, as well. the director of the office of management and budget said furloughed employees should report back to work today after going two weeks without pay. museumes and monuments should reopen today. the national zoo wasn't open until friday. but the popular panda cam is going to be back online. thank goodness for that because i had missed that. mean wile s&p governments saved at least 6% off of forty quarter gdp. s&p, which if you remembered cut the u.s. credit rating during the last debt ceiling in 2011 says is short turn around for congress to negotiate a longer budget deal is still

likely to end consumer confidence as we head towards the holiday season. george concalvas is still joining us. the dollar didn't do an awful lot during this process. people have wondered whether people might -- china made lots of noises about maybe we'll try and ease up on our holings. funny enough i was reading breaking views today. since the last time we had this problem, back in 2011, they now owned 16% more of u.s. debt. >> that's a great point. and it goes to show you that there really aren't you know, other viable alternatives at this juncture. the more we go down this road of always having to govern by crisis as a put, there will be time where people challenge the dollar and challenge the treasury market and more from a credit standpoint. but at this juncture there are

very few alternatives and that's that's one of the reasons why we're seeing stable markets. i think it goes down to fundamentals. at the end of the day, the u.s. is now -- like i said earlier, this year is probably a watch. the s&p has downgraded growth of the fourth quarter. we also downgraded growth for the fourth quarter. the fundamentals don't look that great. it's not fully resolved in terms of what's coming down in washington. the uncertainty lingers into a crucial time of the holiday shopping season. it's nothing to really hope for in the next couple of weeks and months. >> what is trading now for the ten-year? >> so we know for the better part of the year had a forecast of just the ten-year treasury would end somewhere around 2.5% 2.6%. we overshot that throughout the

summer and that caused a lot of damage, too. in mind side they probably didn't want rates revised that quickly and that's why they did not taper in september. what we were witnessing was analogous to open heart surgery. you don't want to hear all the gory details about how you fixed the problem. there was too much information perhaps about how they would slowly pull back on easing. that caused enough damage for rates to rise too quickly. i think we still end the year around 250, not a major rally from here but whenever we do see rates back up people will be buying them. and that's a different psychology than we had earlier this year. >> george, thanks for that. that's just about it in today's edition of "worldwide exchange." coming up next a countdown to markets stateside. more on what's happening in the fallout in washington. good-bye for now.

good morning from the nation's capital within the government is officially reopening for business today after congress passed a last minute budget deal and president obama signed it into law. but don't get too excited. it's only a short-term first. a, as we say, kicking of the can. washington has just months now to get a real deal done and win back the trust of the american people if it's possible. it's thursday, october 17th. that's the name -- that's the day we've been talking about. we're here it's done but we're going to do it again. it's 2013, "squawk box" begins right now. >> good morning, everyone. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. today is such an important day for the country and the global

markets that we've made our way to the capital and we stand out across washington. i'm at the cnbc headquarters here in d.c. joe is spending the morning on the senate side on capitol hill. andrew is holding court on the house side. our guest list this morning is a virtual who's who of power players in town. we'll have more on that in just a moment. but first, let's get you up to speed on what happened late last night. if you are just waking up this morning, congress passed a temporary spending bill. also a temporary increase in the nation's borrowing authority. this legislation permits the treasury normally through february 7th. and it funds the government through january 17th. >> again, i want to thank the leadership for coming together and getting this done.