hello. this is "worldwide exchange." i'm ross westgate. here are your headlines around the globe. earnings season in full season. phillips triples net profits. the ceo tells cnbc he's not pleased. >> you have to work hard and stay committed to our targets. >> sap confirms it's fully out. it told us it won't last. >> you can't take responsibility

for the currency. we have seen a number of effects on the u.s. dollar, the japanese yen, etc., but we're compensating in our numbers. >> and cleaning up the mess. jpmorgan's close to a deal to settle u.s. related problems. the bank could still face more legal woes. >> the edf is going to clean up the fukushima plant in japan. >> announcer: you're watching "worldwide exchange" bringing you business news from around the globe. hello. warm welcome to the start of "worldwide exchange" for the week. plenty to get through on today's show as ever. finally, it is u.s. jobs tuesday this week, but how should investors expect the bull market

to go. the treasuries we'll talk about at 10:20 c.t. the weaker than expected numbers don't really move the needle. we'll discuss that as we look at japanese exports at 10:30. as the new department gets set to protect data, we'll ask whether twitter and google are right to get concerned. that's 10:45 c.e.t. plus, it's being billed as the biggest auction ever. we'll hear from a latin american analyst and why the government has low expectations. plenty of earnings state side. how is mcdonald's new strategy to manage low u.s. margins fairing. we'll discuss the q 3 numbers later. if you've got any thoughts or comments throughout the show, you can e-mail us there

worldwide@cnbc.com. philips triples their net profits. improvements in all three of its major business movements. in a first of cnbc ever, the ceo spoke about the health care reform and said it proved to be an opportunity for the company. >> i've always said the health care reform in the united states causes uncertainty, but overall it will cause liquidation of the health care system. that's a distraction in the short term. hospital ceos are not doing as much capital expenditures as they did before, and we see opportunities to change the role of philips in the market. i'm very excited to become

technology partner in hospitals and want to drive efficacy. >> what about the share buy back program here. is that a reflection that as the board feels business markets may be improving the market isn't appropriately rewarding phillips for the work it's doing and you're trying to get the share pry higher? >> we have talked about our capital allocation policy and our capital market in september. we have outlined we see many opportunities to grow phillips 4 to 6% offer the next three years. we see opportunities to further boost opportunity by 300 to 400 bases points. we hope to invest more in innovation to the tune of about 200 basis points. net net this improves further the result of philips from 10 to 11%. we'll be strongly cash

generative and as such even accounting for some buy back acquisitions. it fits well into use of cash while also mitigating risks. this share buy back program of 1.5 billion will start in the month of october 2013 and run for the next two to three years. i think it's a sign of confidence that we have in the performance trajectory of phillips. >> take a look at phillips shares today. they're doing pretty well, up 6%, big move for a company like philips. meanwhile, sap jumped 23%. the software company is warning exchange rate effects could affect them in the fourth quarter. the third quarter had seen improvements in the company's

asian operations. >> we've actually with the numbers we're announcing today seen asia pacific japan returning from growth, which is of course a great news. there's lots of companies in asia who need world class software to grow business. they are choosing sap. the growth in china has been very, very strong in this quarter. china is the locomotion for asia. we have a good outlook for the year. we are reiterating our guidance for the full year to be a double digit growth for the company for the full year. we also see an opportunity to continue to expand our margin. >> can you talk to us, jim, about the pace of transformation in the company, this move away from people having the software on their own computers, instead accessing the service using your cloud.

has that transformed? >> as you look into the numbers, a good top line, a good bottom line, there's an industry with the world moving to the cloud. the companies don't want to deal with the infrastructure inside. the world is moving faster to this memory computing that sap invent invented. it can analyze large amounts of data and can analyze the future. we have 162% growth in the cloud. we have 90% growth and both of these businesses are becoming businesses of a billion euro size, which means they're a critical mass. >> sap shares doing well, up 5%.

equity strategist of btig joins us now. two really strong share performances from your biggest blue chips. >> the sap a month ago lowered the expectations and managed to beat them. >> people are talking about that. how big an issue is the euro? >> it's a big issue. q 3 moving up and q 4 higher than last year. you're seeing a consistent increase in the euro which is quasi tightening. mr. draghi is talking about that. >> we don't look at the currency. let's talk about philips for a

moment. he came in to turn things around. how's he doing? >> i used to like to call philips a gentomar hoping they would continue to improve it and they always came through. since mr. van hooten came in, it took a year for people to stop being skeptical. today is a great example. >> how would you compare it against siemens? >> two things to note. philips did well in the lighting business which siemens got rid of it. the short term aspects aren't very positive for health care. i'm seeing this more as industrialized. if you look at sort of when

philip ss was in its never doing anything right, it underperformed 50%. since thin it's only gained half of that. >> those of you who are looking at these equities, you are seeing big institutional flows back into europe. there's a cyclical recovery in europe. what's the risk of disappointment? >> i think in the cyclical terms, it's quite high. when the dax is underperforming, i think a combination because people are buying more risk which means it has been moved higher. the effects are hurting as well. on a cyclical side, at the beginning of the year if you said telephones would be up 30% on the sector in the market, you would have thought you were mad for saying that. it's been a big sell sector.

philips is in a category of self-help. >> what are the key earnings? do you think we're going to be meeting expectations, do you think? are we going to be lower? a lot of companies have said -- they've lowered in the first and second quarters. they're missing. they want to make it up in the second half. >> which is a classic example what's happening in the last two years. you had companies missing the first two quarters, don't worry, we'll make it up. the second the same thing. and they're pushing it out further and further. we've seen that this year. >> first quarter actual earnings and the second half and on average they were 10% lower. i think we're starting to see that come through. third quarter numbers aren't quite as good as people were hoping. companies are having to look at the four-year outlook. add in the uncertainty of what's

happening in the last four months. >> nick, good to see you. thank you from equity strategy btig. take this picture of the dax 600. hope you can see where we stand. around 5 to 3 on the dow jones. as far as ftse is concerned, we were up 46 points on frida friday, .7%. early earnings dominating. cac current is down slightly. down .4 of 1%. we looked at some of the leading stocks.

rbs down. a little bit weaker. the dutch company blaming adverse currency effects. again, another company coming out from that as well. self-growth for sap slowing in the second and third quarter. it's 5.2%. rbs, the worst performer, 5.5%. j.p. morgue gans reached a tentative deal to reach a prose. they could be close to a deal to split the bank. bond rates, treasury yields down here, 2.59%. we got down to 2.55% last week. post the non-taper decision.

yield is a little too high. get minutes out this week from the umptd k. the currency market we saw the dollar on the back foot on friday. this is where we stand. 136.67 for euro dollar. aussie dollar with a 96 handle. sterling cable around 1.60, 1.67. that's where we stand now an hour nood traiting week. we're having the day wrapped up from china. >> thank you for that, ross. let me start with some economic data. increasing exports slowed from the august level and imports

rose 16.59%. short of expectations. nevertheless, on the markets the nikkei gained almost 1% with the weaker yen gaining supports. investors are eyeing the all important jobs data due out tomorrow. china markets outperformed the china market gaining a strong 1.6% after the premier league ensures investors growth targets will be met. the hang seng added .4% to end about flat. over in australia minors pushed the asx higher. let me show you some individual stock on our radar. hutch chin son whampoa is calling off a plan to sell its park and shop supermarket chain and will focus on expanding in

china. the shares tumbled. >> thank you, sixuan. that's the latest out of asia. jpmorgan reached a tentative $13 billion deal to settle pending civil cases with the justice department. federal housing finance agency and the new york attorney general's office. it would resolve probes into the bank's handling prior to the housing slump. the deal was struck on friday between jamie dimon and the u.s. attorney general, eric holder. of that $13 billion, $4 billion will go to a consumer relief fund. jpmorgan tried to insulate it sieve from criminal prosecution, but the u.s. wouldn't provide those services. just half of 1%. umpt s. regulators are reportedly seeking more than 6

billion from bank of merck for allegedly misleading fannie mae and freddie mac before the housing bust. the fhfa is pursuing the penalty. it's cost the bank more than $40 billion in legal expenses and other charges linked to bad subprime mortgages. and deutsche bank is in discussions with 50 of its workers over the possible manipulation of the livor rate. the investigation is by ernst and young. the paper reported the staff was able to bring lawyers and witnesses to the meetings. tom hayes is expected to plead not guilty. serious fraught office has given anonymity to the former trader. he faces charges into the u.s.

into alleged fixing. he's not had the opportunity to enter a plea. umpt s. treasury yield, how will jobs tuesday move things along? we'll get into that straight after this.

>> announcer: you're watching "worldwide exchange." brittain has signed a deal with edf to help out with the cleanup. initial cost estimates for the two closed reactors are set to 40 billion pounds. under the deal the u.k. government will guarantee the price of 50 cents per megawatt hour. that will currently double the price of u.s. power. what's the best chance to provide the energy's policy. tweet us or go direct to me @rosswestgate.

nuclear doesn't generate any carbon but it has other risks associated with. u.s. treasury secretary jack lew says the u.s. economy has been bruised by the fiscal fight in washington. he's pretty confident america will recover. speaking on nbc's "meet the press" the country can't suffer another round of brinkmanship. >> i know the direction. the direction is that it took an economy that is fighting hard to get good economic growth going, to create jobs for the american people, and it took it in the wrong direction. >> and in spite that in washington, companies are mostly upbeat about economic growth. in the latest survey, they had growth. 27% of economists showed riding

in the third quarter. the quarter is expecting rising interest rates to drag on sales over the next year. u.s. treasury yields, we saw last week getting down to 12.5% -- sorry, 2.5%. we were yielding 2.74% before we got the resolution in washington. mark oswald joins us for more. mark, good to see you. we know -- we have a faulk of economic data. we have a potential wrangle at the beginning of the year. what's a conceivable or most likely i should say? >> i think the consensus will focus on march for the time being. i think how it pans out is dependent on a number of things. being in control of the fed is

fracturing. the not so dovish members, like mr. williams from the san francisco fed who is close with miss yellen have to look at the various aspects. the data and there is a threat of more shenanigans washington, they couldn't, could they? well, on the other hand, what's the benefit of more qe? i think this is the question which is vexing a number of those people who are moving to a less dovish start in the sense that they're worried that the more qe they do, the more that markets are chronically dependent on that flow of qe, not the stock of qe, the more the risks to financial stability, which is one of the arguments which was profit back in may and which seems to be swept completely under the carpet are becoming exponential. i think that's absolutely

correct. >> then we come back to this point, don't we? one of the reasons that they also didn't move was because they talked about the majority of qe. market rate went up to 3%. rephis stopped. economic advantage was impacted. >> yes. you've got that risk, but that risk is always going to be there. at some stake it's going to happen, and if we've got a recovery -- >> is the recovery strong enough to withstand the risk of that? none of us have fiscal timing going on. >> i'm not sure that's the issue here. the issue is whatever recovery we have, when it does have traction, it will threaten to stall it partially. we're now in a situation actually where the more they do, the more damaging it could become, particularly from two aspects. one is all the central banks can ever do is buy time for politicians to act. >> buy time for politicians to waste. >> well, in this particular case they've been wasting plenty of it.

we've been having the fiscal and budgetary discussions for 2 1/2 years. secondly, it's time for companies to invest and invest at low rates. that's not been happening to the extent they would have wanted. there hasn't been that much investment in people. that survey from the nab shows us still reticent to hire because of the uncertainties. if you look at it, actually people have been more focused on buying back their shares, paying out big dividends than actually investing in new products, in hiring people, in improving production facilities. so you've got to this point four, five years in to qe where you're actually saying, well, if we haven't got benefit that we're meant to have, what's the point of carrying on with it? but it's a difficult one for markets to digest. >> yes. mark, stick around. meanwhile, chinese rating agency degong recently downgraded the u.s.

sixuan spoke with the chairman earlier. sixuan, so, just explain more about this ratings agency. it won't be that well known in america. >> yeah, you're right. they're in fact one of the local chinese rating agencies and recently it downgraded the united states from a minus to a. also youchb graded some local chinese government bonds, dagong. they remain negative on the sovereign credit. i got to speak to the chairman and i asked him whether the debt deals dropping in washington last week puts america's credit worthiness on to firmer footing and have a listen. >> translator: the u.s. will try to resolve the debt ceiling issue over the next couple of months, but this won't change the substance of the matter, which is the country's

deteriorating ability to repay its debt. it doesn't rely on its income or wealth to repay its debt. instead, they borrow new debt to pay old debt. this is a very vulnerable relationship which can put the government on the edge of a debt crisis. this is a long-term problem and won't be fundamentally resolved by raising the debt ceiling. we remain bearish. >> ross? >> good stuff, sixuan. catch you a little bit later. that was part of sixuan's interview. i'm just wondering whether we think dagong -- we care of what dagong says. what's the validity? >> there's a lot of merit to it. the counter argument, the u.s. dollar remains the world's currency. it's effectively like gold was

100 years ago. >> in 2011 chinese and japanese treasuries went up. if they're accumulating it affects reserves, the pace they are, even if they're diversifying. their holdings will have to rise. in the long run we're on the whole for the dpie lem ma. the dollar's influence in the world ironically as its energy imports fall. the stock of dollar is going externally falls as well, it's going to come less. for the time being markets will lean against the idea. there's a big threat because the fed is continuing to buy. >> good article last week about companies in asia. if you have to post security for trades, you've got to post it in dollars basically. no one's prepared to accept much else in treasuries.

>> there you go, that's the other side of the coin, which is the failing of the big en countries. creates local financial markets which would then offer securities for people to offer against trade. nevertheless, you have the other side of the coin. there are a lot of cross border swap agreements where the government will post the security. in the long run, more and more trade is being done or settled not in the dollar. there is an increasing focus on it. that process is a very, very long-term process. you're talking about something that will happen over 5, 10, 15 years. the u.s. does need to address this problem of its fiscal problems because otherwise in the long run it may find itself on a -- trying to solve a problem in a more vexed situation. >> tonl morrow we have the jobs

numbers. we're going to ask you for your predictions for the payroll report which is due out on tuesday. go to trader pols.cnbc.com. you can have your say on twitter using #traderpoll. above 180,000, below or around 180,000. now we'll take a short break. still to come on the show, it's a 15 month record trade deficit for japan. can the nation meet its inflation markets and stay on the path to recovery? farmers presents: fifteen seconds of smart.

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around the globe, earnings season in full swing in europe. philips sets the tone. it's nearly tripled its profits. he's telling cnbc he's upbeat. >> we have to work hard in the first quarter, but we have confidence if we stay committed to our targets. sap confirms its full year outlook. the company ceo also told cnbc the currency impact won't last. >> we can't take responsibility

for the currencies, and we have seen a number of effects on the u.s. dollar, the japanese yen, etc., but we are compensating more in our numbers. cleaning up the mess, jpmorgan is reportedly close to a record deal to settle u.s. mortgage-related probes but the bank could still face more legal woes. brittain signs a deal with french utility edf to build a 16 billion pound nuclear power station amid reports that highly radioactive water has breached barriers at the fukushima plant in japan. we're deep in earnings all over the globe. china mobile has just come out with its numbers. it's talked about an operating revenue for the first three quarters of this year of 463 billion. up 9.4%.

the average revenue per user slipped slightly, 66 recommend b. get this, as of the 30th of september, the total china mobile customers 675 million which is 50 million up from 740 million in june. that's not bad, 755 million customers for china mobile. its operating revenue for the first three-quarters, reaching 463 billion which is the figure. there we go. that's a good number for you, isn't it? 4 -- no, 755 million customers. right. we should be so lucky. european equity market today, ftse 100 up .2%. xetra dax, up .1%.

and on the currency markets, dollars on the back on friday. similar sort of levels at the moment for the euro. dollar where it was. dollar yen has perced up slightly to 98. cable below the 162 level. now we also got some weaker than expected export numbers from japan. exports up 11.5% in september. that's down from the increase of 14.6% for august. imports are up 16.5% but also short of expectations. the trade deficit for the month $9.5 billion running a negative balance for the 15th straight month. joining us with his thoughts, chief investment officer and cio of perry international trading joining us from hong kong. ed, thank you for joining us. did the trade data move anything on the dollar today?

>> good morning or good evening, i guess, as it were. not really. 15 months of trade deficit were proceeded by 15 years of trade surplus. no big deal. >> so, look, you know, it's interesting because dollar enis sort of in a range at the moment, sort of -- let's call it 95 to 100 if we're amongst friends. equities are now trading in a range. what's going on? is there -- are we -- what's the next big move? >> i think we're -- there's been a pause for effect. really waiting to see how earnings season progresses. we're about to pass into earnings numbers and this fits our overall thesis at rogers investment advisors that we're starting to move away from an etf all market up, all market down time period where individual company earnings are going to become more and more important for individual investors and stock picking in effect will become a much more

important part of the portfolio rather than the allocation model to japan versus china. >> yeah. are we -- are overseas investors questioning the third arrow of abenomics? is that going to be a key figure to put money into the japanese market? >> definitely overseas investors are questioning the third year of abenomics. i don't think there's confidence that the third year is a lot of darts. hue do the five sacred items such as rice, agriculture, etc., get addressed under the auspices of the tpp. there's not one arrow, it's multiple, multiple darts. but there's less and less disbelief out there, let us say. you've had two straight quarters of gdp numbers. you have some of the best tonkin

survey numbers since 2006. it's almost pre-lehman. there's undeniably better and better economic data coming to japan so the doubters are shrinking. >> in terms of the challenges that japan faces, for getting the third arrow part, forget -- what about the other part, which is the biggest arrow -- the biggest hurdle of the lot, that not only a weak yen increases energy import prices, but japan is still actually getting nowhere with reforming its whole energy infrastructure and because it imports so much, a weaker yen is only a marginal benefit if the offset is so huge on the other side and to what extent is the lack of growth in the second tier of asia going to present the likes of the indias and the indonesias who have also

seen their currencies actually depreciate more than the yen, to what extent does that present a very substantial head wind to japan? >> second question first. we think china is the most important regional partner, in fact global partner for japan. china's been japan's largest trading partner since 2004. so a chinese recovery outweighs all the second tier markets going sideways to slightly negative. we do believe a chinese recovery is well in the works. so that's the second question. first question as far as energy policy is concerned, we all know that the trade data have been exacerbated by the fact that, you know, the dollar yen has moved against japan as far as having to import all of its energy sources. we think that the ultimate answer is going to be a combination of a certain number of nuclear power plants have to get turned back on here and abe

will spend political capital as and when he needs to in order to effect that. it's almost inconceivable that japan survives on external energy sources. we don't see how the math works frankly if that's where they have to go to. we think there are a certain number of nuclear plants that have to get turned back on. we think japan will be a leader with some amazing advances as far as tax structure to encourage solar power, for example. we think japan will be a real leader not only in tax policy but also in technology in that space. >> we'll see what happens. good to see you this evening. thank you for joining us. ed rogers. teppco says rainwater with toxic levels exceeding limits overflowed through 12 areas areas the the fukushima daiichi nuclear power plant. heavy rainfall this week sent contaminated water seeping into

the ground. it's unlikely to float into the nearby pacific ocean. it's following recent typhoons. brittain, meanwhile, has signed a deal with edf to build the first nuclear plant since the 2011 fukushima disaster. the project in summer set will be built by a consortium and include arriva. stefan is with us. taking quite some time for the british government to negotiate a provider or someone to build this power plant. what are the terms of the deal? what's going to make it profitable for the french energy companies in terms of strike prices and what they're going to get out of it? >> that's the $14 billion question, ross. actually, i've got a question for you. first significant contract in the nuclear sector since fukushima that could revive the whole industry in europe. how would you like, how would you expect the stock to react

today? >> well, yes, and it's not up, is it? >> it's not up. it's losing ground because there is a problem. edf will assume the financial risk for that project. it's a 14 billion pound contract but it could cost up to 16 billion pounds according to industry experts. that's roughly 19 billion euros. edf will take the financial risk even if the government in the u.k. is ready to guarantee a minimum price for electricity. it will pay at least 89.5 pounds which is twice the current price. it's a significant price for edf. what if there is a significant cost. what if the price is higher than the original plan. edf will have to face the burden. it happened already in france. edf built a new generation of nuclear plants in the north of france. the project is now four years

behind schedule. edf believes that it will start producing electricity in 2016 instead of 2012 and the final cost is now estimated at 8.5 billion euros. that's to compare with the original estimate of 3.3 billion euros. that's almost three times the original price and that is the reason why centrica decided to drop the project because there were too many uncertainties. for edf, yes, it's an ambitious project for us but it's a risky investment in the united kingdom. >> four years behind schedule on their current project. no wonder investors are a little bit nervous. one might hope they might be able to avoid some of the mistakes that have been made there. >> yeah. the french one was clearly a prototype. they've learned a lot from that project. hopefully they will not make the same mistakes in the united kingdom. one more detail, ross.

edf says 65% of the project will be financed with debt. edf has a big level of debt, huge level of debt and increasing it further may scare some investors. >> still, mark, it's not a bad time to be issuing debt, is it, if you're a company? >> no. it's very cheap. these are historically low levels. even if one says they might have to pay an extra 50 to 100 bases points, you have to look at it in terms of, well, that's all very well to say their spreads were, say, 150 and they go to 250, but you're still talking at current levels. >> for the 30 year project, issue a 30 year debt. >> they're making issues on the inflation debt because they are a utility and that's very popular debt which there isn't enough of for a lot of people. >> okay. thanks for that, mark. stefan, thank you. we'll come back to you. as a result of all of this nuclear news we're asking you is nuclear the best answer to provide a country's energy

security. is the british government going down the wrong path. they say a more than capable nation should be left behind with this type of technology. it's referring to the point that we've brought in other countries to make it for us. if you want to join the conversation on "worldwide exchange", get in touch with us. e-mail us or tweet or direct to me @rosswestgate. meanwhile, as far as the agenda in asia, the zte and smic will be reporting third quarter results. out of india, cain india numbers are due. they're working on economic ties and the disputed border between the two asian giants. we'll take a short break. still to come, twitter has

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germany has agreed to sit at the bargaining table with angela merkel to form a grand coalition. this is after the opening party opened the door to concessions. talks that could drag on for weeks as the spd tries to get its 470,000 members to back the deal or a deal. the opposition party sigmund gabriel says he expects a new government by christmas. a court has ruled that the former prime minister silvia berlusconi should be banned from public office for years. the process of enforcing this political ban will likely be lengthy as parliament still has to ratify. some 25,000 antiausterity protesters threw eggs and fire crackers at the building during a march on saturday. demonstrators clashed with

police chanting slogans with cuts to welfare programs. it comes as the prime minister tries to hold his coalition government together. and the foundation which owns more than 33% of mont monte de pasche is under pressure to complete the move as they need to meet eu conditions for state bailout. the stock is flat in milan. the european commission is saying that they're going to hit junior holders and it could undermine confidence in the region's banking system. in a letter leaked, the ecb president said the new rules are there. >> the european commission is

saying this is a template. mr. draghi is saying, given what happened inside, first i think we need to be a little bit careful. he's also in many ways admitting that the european banking sector is shaky and any new move which would undermine confidence are going to be adverse. given where lending is, still contracting, it's little surprise and also where growth is, it's little surprise mr. draghi -- >> yeah. do you think the latest tests will uncover more truth or be more of a wash? >> unfortunately there's no guarantees that they'll actually reveal anything more. it will be much of the same sort of people looking at exactly the same sort of data. so they probably will try to uncover this and that, but without upsetting markets too far or upsetting confidence that is there which is fragile? >> good to see you? got a good week coming up.

mark, strategist at monument securities. twitter says the e.u.'s data protection form is a specific risk factor for the data services business. the european parliament is set to vote on regulations to protect consumer data in the hands of private sector organizations. google, too, has listed privacy laws as the legal strategic issue it faces. christopher sythe joins us now. chris, thanks so much, indeed, for joining us. for i.t. firms and for social network sites, the ability to collect data on individuals and what they do in terms of their transactions, their buying habits is hugely, hugely valuable. is there anything in what's being proposed that threatens

the trading or handling of that data? >> i don't think there's a fundamental change in the way they hold data. i think a lot of the concern comes from the rhetoric that was around the first draft of the regulation where the people proposing the regulation challenged the american based social media for the data protection principles and the lobbying that's gone on and the amendments that have been proposed. we're not clear exactly the extent it will be adopted, but they've provided certain safeguards against aggregated or pseudonomized data to determine general behaviors in a way which won't necessarily compromise individuals. >> is there a difference between individual and group? >> yes. certainly the thrust of data regulation in europe is towards what they call personal data, which is defined as being data relating to an identifiable

individual. so once you aggregate that data and reduce it to trends without identifying the individuals, then there's less concern. >> that's safe. the interesting thing, of course, is cookie tracking in windows. now you can't now get on to websites unless you say i accept your cookies. >> that's correct. that's a separate strain of legislation in europe. i think it's symptomatic of the general principle, which is what the new regulation is aimed at. data subjects, individuals, should be completely clear about how their data is used, who it's seen by, whether it's transferred, whether it's exported, and just so they have transparency and control over that. the cookies rules, the new cookies rules are part of that general trend. >> the thing is if you don't accept it, you can't go to the website though. i wonder whether the commission

might go further than -- >> there's a balance to be struck. the other thing is that cookies are often sort of pithery. personally speaking i'm not sure they are. i'm quite glad that amazon know the books i read so if a new book comes out i don't know about they can tell me about it. >> which is what they would argue about. >> i don't have to put my payment details in. we shouldn't see cookies as all bad provided you know that. >> that's the point. christopher sythe. u.s. earning season away. it's in overdrive with a quarter of the s&p reporting this week. our next guest says the bar is low. the second half of "worldwide exchange" right after this.

this is "worldwide exchange." earning season in full swing. philips setting the tone with a tripling of net profits in the third quarter. the ceo of the giant told cnbc he's upbeat. >> we have to work hard in the first quarter, but we have confidence if we stay committed to our targets. investors also looking into sap as they talk about their output. >> we can't take responsibility

for the currencies, and we have seen a number of effects from the u.s. dollar, the japanese yen, etc., but we're compensating more in our numbers. and cleaning up the mess jpmorgan's reportedly close to a deal to settle a u.s. probe. the bank could still face more legal woes. and president obama is going into damage control as he expects to address the tech issues plaguing the rollout of the signature health care program as the white house scrambles to find a fix. >> announcer: you're watching "worldwide exchange" bringing you business news from around the globe. all right. if you're just joining us state side, a very good morning to you. a whole new trading week here on cnbc and as the start of your global trading day on "worldwide

exchange." the dow up 12 points, the s&p up 28 points. 2 points above fair value for the nasdaq and the s&p at the moment is a point below fair value. the ftse cnbc global 300 pretty flat during the session. the ftse is up fully up .2 and down .2 for the xetra dax. plenty of individual results. looking at s&p and siemens topping the list of gainers. on the bond markets, treasury yields, 2.59% or just below that, 2.58% is the yield. still below 2.6. pretty low still. the gilts yields just a tad higher. the dollar is on the back on friday. today, gains against the euro. pretty much where we were just above 137. up slightly against the yen at

98. at 1.6168. no major moves. no individual corporate stories. let's get a recap of what happened in asia. xisuan is in singapore. >> thank you for that, ross. we have japan's trade numbers. they're weaker than expected. running a negative balance for a record 15th straight month. increasing exports slowed from the august level and imports rose 16.5%. also short of expectations. nevertheless, on the markets the nikkei added almost 1% with a weaker yen lending support. asian markets higher coming off of wall street's strong lead friday. investors are eyeing the all important jobs data due out tomorrow. check of markets, the shanghai composite added 1.6%. fao schwartz investor growth

targets will be met. the hang seng added .4%. south korea kospi ended flat. in australia, the asx 200 had a fresh five year high. let me show you individual stocks on our radar. tencent jumped to a record high. shares of this chinese internet giant has surged over 80% this year so far. meanwhile, also on the hong kong wars, hutch chin son whampoa is actually trapping the plant to sell its parking lot supermarket chain and focused on expanding in china. the shares lost 1% in today's trade. back to you. all right. xisuan, thanks for that. corporate stories very much to the fore here in europe. philips was rallying. they saw net profits triple.

all three segments of the business showed pretty good improvements in operating results. the company says head winds will affect sales in the coming quarters. third quarter revenue just missing forecast. although the firm says it's still committed to reaching its financial targets for the year. stock in s&p getting a lift. the software group confirmed the guidance and it's largely in line with its forecast. there were some currency headlines. they've been warning that exchange rate effects could hit its fourth quarter revenue growth to around 5%. it's very much corporate news and earnings that's still on the agenda in the united states. around 1/4 of the s&p 500 report this week, to date we'll hear from mcdonald's and halliburton, netflix and texas instruments

and vmw. joining us is andrew from oppenheimer. very good morning to you. thanks for joining us. what do you think of this season? we've racheted down our expectations. a large number of firms are reporting early. what do you think? >> yeah. good morning. i think we're turning from the macro to the micro a little bit as we get past this dramg ma in washington, d.c. we're starting to see the flow of reports coming in. generally it's not the overall growth rates that are as important, but where they are relative to expectations. in this quarter, you know, we saw somewhat of a typical pattern which was coming into the quarter, expectations were racheted down pretty substantially from about 6.5% growth expected in the beginning of the quarter to the beginning of the quarter when the reports started flowing in, that was all the way down about 3%. that got cut in half essentially. we think when all is said and

done there will probably be your typical 65 to 70% up side surprise in companies. so far it's been predominantly financials have been the big sector underway. we know they've had some problems in terms of fixed income trading and some liabilities like in jpmorgan's case. but i think you'll get some more of the cyclical sensitive companies starting to flow in terms of industrials, technology. our sense is from the macro side what you're going to hear are things are improving and they've been improving through the quarter, not evenly in the u.s. but globally. it does seem to be the growth is bottoming and turning up. we do think that provides a catalyst going forward. >> yeah. you talk about this and it's more cyclical and globally exposed sectors. i suppose the question mark is whether that trade is going to bear more fruit. whether it's going to be backed up by the economics. we do believe it is before the

whole washington if i as could he -- fiasco started. we think it's turning. as we see the economic statistics flowing this week, we think that will continue. we'll have a little bit of a hiccup because of the hit to confidence that we saw over the past couple of weeks, but in general we do think things are improving. when we look at the overall market, it's still largely a valuation call as well. the overall market in the u.s. is about fairly valued, but if we look at different sectors, like the cyclical sector versus traditional, more defensive sectors, the cyclical sector is historically less expensive than they've been, especially with things bottoming and improving. we do think there's a bit of a tail wind there from the valuation side as well. >> we've cut the estimates down for third quarter. what happens in the fourth quarter? where are estimates there? are we expecting a ramp up? are we going to trim those back?

>> definitely need to trim those back as you look into the fourth quarter the estimates in our assumption are still too high. you know, analysts as a group are still forecasting earnings. they're going to grow about 10% in the fourth quarter, which is very unrealistic. earnings have been growing in the range of 3 to 5% for the last four or five quarters. there's nothing in the macro data that would suggest that's going to accelerate up to 10%. as the better than expected reports flow in this quarter, it's going to be very unlikely that the forward numbers are going to remain especially for this year. the analysts may push out the forward numbers but the near term numbers still look elevated. that's going to continue to drift in as we go through the fourth quarter. >> just stay there, andrew, because you mentioned financials. want to run some news behind that. cnbc has confirmed jpmorgan has reached a tentative deal to

settle civil cases with the justice department. the federal financing agency and the new york attorney general's office. that would resolve probes into the bank's handling of mortgage-backed securities prior to the housing slump. the deal was reportedly struck late on friday between jamie dimon and the u.s. attorney general, eric holder. of that 13 billion, 4 billion will go to a consumer relief fund. jpmorgan is reportedly trying to insulate itself from criminal prosecution. the u.s. government hasn't provided those a shurngss. they're up around half of 1%. at the same time u.s. regulators are reportedly seeking millions from bank of america for misleading fannie mae and freddie mac. the fhfa is pursuing that. it's cost the bank more than $40 billion in legal expenses and

other charges linked to bad subprime mortgages already. bank of america stock up 1/3 of a percent as well. andrew, you talked about financials leading the growth in the sector level. are you comfortable with all of these? jpmorgan gets a settlement, i presume that's a good thing. are we going to live with the fact that these guys are getting fines? >> yeah. i think especially when you're talking about the big u.s. financials, they're caught in that world of the balance sheet improving, activity picking up, mortgage statistics picking up. loan losses coming down. you do have that both regulatory and headline risk that continues to hamper them. so i think, you know, when it comes from the very big u.s. financials, that's going to be the case. the smaller regional banks that aren't as much in the headline risk, i think they're driving a lot more of the growth that we're seeing in the sector.

jpmorgan was a pretty big hit because of the big charge. >> fair enough. andrew, get a cup of coffee, tea, whatever is your poison this time of the morning. we'll come back to you fairly shortly. also still to come, could d day be looming for european banks? head to our website to see what mario draghi is outlining. you can follow us on twitter @cnbcworld. brittain, meanwhile, has signed a deal with edf today to build the first nuclear plant in europe since the 201 1 fukushim disaster in japan. the project in somerset, in the southwest, will be built by a consortium. arriva will have a 10% stake. initial cost estimates sit at around 40 billion pounds. under the deal they will

guarantee a strike pies of 89 pounds and 50 pence per megawatt hour. is nuclear the best answer for a country's energy security? has the british government gone down the wrong path? alex has tweeted the edf deal is shockingly bad. edf will get a 9% return. it all depends, of course, on whether they can build the reactor on time and on schedule. therein lie cost overruns. if you want to join the conversation, e-mail us or tweet us. we'll take a short break. still to come, can mcdonald's serve up improved numbers when it reports before the open today in the states? in around 20 minutes we'll preview the fast food giant's third quarter figures. mine was earned orbiting the moon in 1971.

afghanistan in 2009. on the u.s.s. saratoga in 1982. [ male announcer ] once it's earned, usaa auto insurance is often handed down from generation to generation because it offers a superior level of protection and because usaa's commitment to serve current and former military members and their families is without equal. begin your legacy. get an auto insurance quote. usaa. we know what it means to serve.

>> announcer: you're watching "worldwide exchange." a recap of the headlines. today solidarity for giants are securing equities. jpmorgan is looking at a $13 billion fine. and technical glitches on the health care exchanges are

unacceptable. let's get more on that. the president will speak at a white house event today at 11:30 eastern where he's expected to call the glitches of the new health care insurance websites unacceptable. of the president will have a long way for the consumers to set up for coverage while he tries to fix the problems. the department of health and human services says they're bringing in people to work on the exchanges. on saturday president obama said -- the administration said half a million people will apply for insurance but wouldn't say how many have enrolled. lawmakers have criticized the u.s. health secretary kathleen sebelius. they said she should testify but stopped short of saying she should resign. meanwhile, u.s. treasury secretary jack lew says the economy has been bruised. he's confident that america will

recover from the government shutdown. speaking on cnbc's "meet the press," it's important the country doesn't experience another round of brinkmanship. >> we know from the shutdown there was a loss of economic activity. i can't give you a number today of what it is. i know the direction. the direction is that it took an economy that is fighting hard to get good economic growth going, to create jobs for the american people, and it took it in the wrong direction. despite the uncertainty in washington, companies are still pretty upbeat about prospects for growth in the latest survey from the national association, 70% expecting growth. they're not as optimistic about hiring. 27% of congress reported rising employment in their companies during the third quarter. a quarter expecting rising interest rates and higher oil prices to drag on sales over the next year. we'll take a short break. still to come, the brazilian government is hoping that

today's massive auction of oil reserves will help revive a stalling economy. will this soothe public unease or not? is it the wrong strategy? we will talk to brazil's energy finance after this. [ horn honks ]

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auctioning off an oil field billed as the biggest ever sold. it's the latest with the control of state reserves. oil companies interested in the rights has been fairly muted because of concerns over extraction costs and the state soared by brazil. joining us to discuss this, they've talked about earning 400 billion over 30 years from this oil field to make brazil a lot richer, lift the country out of poverty. has it really got that potential? >> it tells you about the hopes that the brazilian government has to boost the economy and government finances than it actually does about what may happen from this particular auction. i mean, no doubt we're talking about a very, very large quantity of oil here. the reserve given the 8 and 12

billion barrels, that's probably around the best case scenario. the hope of the government is that it will double brazil's output. but the framework for investment is not friendly. as you noted, that's reflected in -- >> what have they done wrong? the problem is the size of this is also a problem because of the cost, i guess -- >> brazil discovered these major off shore deposits. we need to make sure the state takes as big as possible a revenue take. there were laws that were applied to these deposits which means that the state oil company has to be the sole operator in a joint venture and needs to have at least 30% stake. there are other strings attached. other fees. it's a very statist, pretty investor unfriendly -- >> disincentive to -- >> yes. >> -- others to come and actually bid to explore? >> exactly. particularly because of the political risk environment. that was reflected in the fact

that you haven't seen be any u.s. majors participating in this. european companies and chinese state owned companies because of all of the controversy over the nsa allegations that the u.s. was spying on petro and gas and the hostile manner. they were saying the u.s. companies are deciding the political risk is too much. of course more broadly the -- >> is petrobas the right company to take the lead on this? >> in the sense that it's brazil's state oil company and therefore it must. but there are concerns over the overall financial viability of the company. it normally runs at a loss. it effectively subsidizes low fuel prices in brazil and it's highly indebted. most of its debt is in dollars. there are already major problems in terms of the supply of rigs and necessary equipment, local

content is particularly problematic. petrobas is a difficult company. >> so the risks -- they haven't done this the right way is what -- >> they didn't have a choice. if they were existing in a vacuum chamber they could not be exposed to the interests and you would have a little more freedom. the companies are not happy about the investment in these assets. the government is essentially pushed into a position where it takes this status approach. also from a credibility point of view, i don't see the president rolling this back straightaway. it was just announced. >> there may be a lot of oil there, but the expensive oil, i guess, is difficult to get out of the ground. at the same time of course we're seeing shale oil, gas depressing energy prices in the united states. >> absolutely. that increases that.

these are very deep off shore assets that increases the operating costs. everybody who wants to invest in brazil will be looking at what happened and is monitoring the brazilian government's reaction. that reaction has typically been very hostile especially to foreign companies. there companies will be thinking, if we do anything wrong, if we have an oil spill, we'll be in serious trouble. >> let's bring in andrew very briefly still with us as well in europe. andrew, it's interesting. now that the u.s. majors are going for this development in brazil, i just wonder, how are investors treating oil majors at the moment? >> i think you hit the nail on the head when you talked about them being depressed. you have a big divide between crude oil prices and nat gas prices. you still see that.

for the big majors, the strength comes from the crude. the lower price in nat gas is depressing things. gasoline prices have been on the decline so the refiners have been hit from that. overall earnings season from the big oil majors not particularly strong this quarter due to those factors. >> okay. fair enough. andrew, stay there. we'll come back to you. james, good to see you. we'll take a short break. still to come, from oil to food. can mcdonald's serve up improved numbers when it reports before the u.s. open today? we'll preview the fast food giant's third quarter earnings coming up. before that, a reminder of how the futures are trading on wall street.

this is "worldwide exchange." i'm ross westgate. the headlines from around the globe, cleaning up the mess. jpmorgan reportedly close to a record deal to settle u.s. mortgage related probes. the bank could still face more legal woes. earnings season in full swing in europe as well. philips setting the tone with a near tripling of profits. the ceo has told cnbc he's upbeat. >> we still, of course, have to work hard in the first quarter but we have confidence if we

stay committed to our targets. also software sap attracting buys. they told cnbc that the impact won't last. >> you can't take responsibility for the currencies, and we have seen a number of effects on the u.s., on the japanese yen, etc., but we're compensating more in our numbers. and president obama's going into damage control. he's expected to address the tech issues plaguing the roleout of his signature health care program as the white house scrambles to find a fix. >> announcer: you're watching "worldwide exchange" bringing you business news from around the globe. all right. good morning to you. we had a bit of a rally on friday just about for the u.s. stocks. today it's a muted start it looks like for the u.s. dollar

trading this week. right now s&p 500 is just about 1.5 below fair value. the dow is some 6 points below fair value. the indication mirrors the ftse cnbc global 300. absolutely flat. also been a mixed session so far in europe. despite good numbers for the s&p and the ftse is up and the xetra dax and cac quarante is do down .28%. this is what the investors have told us on cnbc. >> long term, in terms of semi-automatsmall path, long paut, we've gained the instant growth by investing

in small caps in japan and the far east. >> that might lead us to some potential opportunities if we do see slightly better data. if they can find something around the 255 mark. i think there's some question marks about the validity of the rally. that looks pretty fully priced. if we can get up to 97 1/4, that will be a level that won't be inflating. >> at the beginning of the year if you had said telecoms would be up 30%, the best sector in the market, then you'd of thought you were mad for saying that. because it's been a big self-help sector, i think philips falls into that category of self-help. jpmorgan may be close to clearing up one of the big legal clouds hanging over the bank. the company's woes are far from

over. kelly is with us from the states. if you get to a settlement, you would think that would be it and you can move on. that may not be the case. why? >> ross, it's a giant price tag. the company hoped they would be able to move on. the tentative $13 billion deal confirmed by cnbc would settle civil mortgage cases by the justice department federal housing finance agency and the new york attorney general's office. the deal was reportedly struck by a late-night call friday between ceo jamie dimon and u.s. attorney general eric holder and lawyers for both sides. the probes relate to the handling of mortgage-backed securities that dropped in the housing crash in 2007 and beyond. of that $13 billion, sources say about 4 billion will go to resolving outstanding issues with the fhfa which overzs mortgage giants fannie mae and

freddie mac. another $4 billion will go to resolving issues. jpmorgan tried to insulate itself during criminal prosecution during settlement talks including at a high profile meeting between dimon and holder last month. sources tell cnbc the government was unwilling to provide those assurances potentially leaving the bank exposed to further criminal probes and lawsuits. those aren't off the table yet. "the wall street journal" is saying it's a model of other probes in the run up to the financial crisis. the justice department wants the deal to send a message that banks can't buy their way out of a criminal case and although some of that $13 billion settlement will go to help homeowners, this will likely be the largest fine ever imposed by the justice department. b.p., you may remember, was hit with a $4 billion fine last year for the gulf oil spill. right now jpmorgan says it's put a lot of that mona way in

frankfurt. if you look at trading, it's up by 3/4 of 1%. the financial times is reporting that u.s. housing regulators are seeking more than $6 billion from bank of america. that's for allegedly misleading fannie mae and freddie mac before the housing bust. same thing. countrywide financial, which b of a bought in 2008, has cost the bank already $40 billion in legal expenses and other charges all linked to bad subprime mortgages. right now in trading b of a up 1/3 of 1%. ross, they're nearly there on a lot of this stuff but not quite out of the woods. >> yeah. it is extraordinary. huge price tag. still not out of the woods. jamie dimon at the back of the que. >> that's right, ross. and you know it's interesting because a lot of people thought throughout the entire financial crisis he was one of the more responsible custodians of some

of these loans but now it turns out that because the company made some deals for companies that weren't as responsible and jpmorgan did have a few bad mortgage practices, but on the whole this is really coming back to haunt them. but the numbers are so large, ross, it just seems like funny money at this point. financial crisis related lawsuits at this point have cost the banks over $100 billion for a government that's having budget issues, you sort of wonder where some of those funds are going. >> that's amazing. yeah, all of the numbers are extraordinary. kayla, have a great day there. thanks so much. talking about banks this side of the pond. deutsch is in discussions with 50 of its workers over the manipulation of the libol rate. the paper so reporting the stock has been allowed to bring

lawyers and witnesses to the meetings. tomorrow hayes is expect expected -- tom hayes is expected to plead not guilty as the trial gets underway in london. the serious fraud office has given anonymity to the trader. he faces charges in the u.s. into alleged rate fixing but hasn't had the opportunity to enter a plea. now same stocks revealed a surprise in uptick in mcdonald's. data should help the fast food company avoid disappointment today when it releases third quarter figures before the u.s. open. in july mcdonald's announced a change of strategy as it looked at how the margins in the u.s. and stutering sales in asia. andrew berkley is still with us,

managing director of investment strategy at oppenheimer. jim, let's kick off with you first of all. what are you expecting? >> i'm looking for earnings by 1.51. that's up 6% from last year, $1.43. looking for revenue to increase 3%. we continue to see that europe is up slightly. i think the rest of the world is still struggling. >> what's the big problem for them? performance flat at home, down in asia. what's europe doing? >> i think europe has been somewhat stabilized and somewhat picked up. we think that's one of the bright spots. i think that europe is coming off a base and improving in europe. we think europe will be up going forward but probably 1 or 2% but the rest of the world i think u.s. is probably up 1%.

we'll continue to see weakness in asia. >> sales percent, 1% a long way from the 5 to 7%. why has it gone wrong, particularly in asia? >> well, i think there is some choices about what mcdonald's needs to offer. i think mcdonald's is continuing to offer its big mac except i think more people in asia prefer more localized food. so i think mcdonald's has to make a decision about a strategy. should they continue to offer more of a global brand or more localize the food? i think they're trying to change the strategy trying to be more localized. i i think that's one that might help. that's a couple years in the making. second, i think they're having trouble predominantly in china because of one of the increase in food prices and also, you know, the supply of the fear of chicken. >> andrew, bring you in.

mcdonald's stock hasn't done an awful lot in the last year or so. is this a sector or a stock that investors will continue to avoid? >> we believe so. generally the way we look at stocks specific is in terms of the trend of forward earnings and earnings revisions. mcdonald's has certainly been a name that has been under pressure for a long period of time here. overall group we don't particularly like either. you know, i think one of the big questions and what investors will be listening for is on the commodity cost side as well. are they still seeing benefits from that or are commodity costs going to be less of a tail wind? that's a big one moving forward. >> yeah. jim, i mean, even their competitors, even though andrew doesn't like the group. competitors have still been doing better. is it a point mcdonald's isn't cheap enough until we get an increase in sales? >> i think that's probably the catalyst i'm looking for. i think investors in this sector generally look at same source

sales. same source sales are flat or growing slightly. i think same source sales are the biggest driver. i think mcdonald's is simply struggling. they are trying to pull out this core of customers but meanwhile i think they're losing more people, after fluent who prefer healthier foods to the casual -- the fast casual. i think mcdonald's strugless. we have a hold recommendation of mcdonald's. >> jim, thank you. capital i.q. for now, andrew, thank you. shares in dutch health care royal philips is growing. nearly tripling. all three business sectors saw solid growth. head winds will affect sales growth in the coming quarters. third quarter sale just missed forecast. the company is still committed to reaching financial targets this year. sap sales getting a lift.

the software giant confirming an operating profit that was largely in line with forecast. a strong euro meant sales growth slowed and it's warning that exchange rate effects could still hit its fourth quarter growth to the tune of 5%. that's the earnings. meanwhile, has google found a friend in facebook? we'll talk about that in just a few moments. mine was earned orbiting the moon in 1971.

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>> announcer: you're watching "worldwide exchange." if you've just joined us here, jpmorgan looks set to agree to a $13 billion fine with the department of justice. solid earnings for dutch electronics giant philips. and the white house admits technical glitches in the rollout of the new health care exchanges is unacceptable. some other stories we're looking at today as well. at&t is selling the rights to around 9700 wireless towers to crown castle international for more than $4.8 billion. last month at&t said it was exploring a sale of the towers.

under this deal the company will release back space of crown castle for at least ten years so it can keep its communication equipment on site and keep offering service without interruption. at&t at 1.6% in frank furthfurr. dell will pay 13 cents a share. that payout will come out on the 1st. michael dell and other partners agree to pay it after their fight with carl icahn for control of the company. google is getting friendly with facebook. the search giants say if they buy an ad for i had double click service. it's a rare moment when facebook launched that. it didn't invite google to take part. they specialize in retargeted ads. they do that based on their

browsing history elsewhere on the web. as far as facebook and google are concerned, google up 1%, facebook up 1/4. get ready for a deluge of data this week as u.s. investors get flooded with reports delayed by the government shutdown and the s&p 500 are set to release earnings. we'll preview the trading week ahead next. ♪ ♪ [ male announcer ] more room in economy plus. more comfort, more of what you need. ♪ that's... built around you friendly. ♪

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all right. welcome back. the markets are ahead of the u.s. open. a little bit mixed this morning. had some strong revenue performances for the likes of s&p and philips. ftse is up .1.

xetra dax down .1. u.s. futures not really indicating anything very much. the dow is currently seven points below fair value. we are four points below fair value. meanwhile, president obama will speak at a white house event at around 11:30 eastern today. he's expected to call the glitches of the new health care insurance website unacceptable. the president will also outline ways consumers can still sign up for coverage whilst his team expects to fix the problems. the department of health and human services says they'll bring in a surge of people to work on the insurance exchanges. this is after on saturday the obama administration said nearly half a million people have applied for insurance but he wouldn't say how many have actually enrolled. the republicans criticized health secretary kathleen

sebelius. they said she should testify although they've stopped from saying she should step down. jack lew says the u.s. economy has been bruised by the fiscal fight in washington. he says he's confident they will recover. speaking on nbc's "meet the press," he says it's important they don't experience another round of brinkmanship. >> we know from the shutdown there was a loss of economic activity. i can't give you a number of what it is. i know the direction. the direction is that it took an economy that is fighting hard to get good economic growth going, to create jobs for the american people, and it took it in the wrong direction. >> and despite the uncertainty in washington, companies are upbeat. in the latest association by national association for business economics, 70% projected gdp growth. they're not as optimistic about

hiring. 1/4 also expected rising interest rates and higher oil prices to raise prices over the year. the agenda, september existing home sales are due out at 10:00 a.m. eastern. they're forecast to drop 3.3% to an annual rate of 5.3 million. around 1/4 of the s&p 500 report earnings this week. today we'll hear from mcdonald's, halliburton and h hasbro before the open. chicago fed president charles evans is on "squawk box" for an exclusive interview. on friday he said he didn't see anything that signals the fed should taper. so how do we view the session in the week ahead. we're being joined by scott bow and andrew berkley still with us. a lot to get through. more data.

lots of earnings out this week. jobs report tomorrow. how is it going to shape up for you guys? >> actually, everything, the base is set here to go higher. we're looking at coming off of just almost a catastrophic time here and we got through it. now we can focus on corporate earnings. we can focus back to the economy. i'm not saying the numbers are so great, but the fact that we were able to get through this whole budget debacle and washington's just inability to get together and create what is perceived to be a strong footing. the fact that we could get through that, i think we're going higher. earnings estimates have already been reduced pretty far, and like you said, we're going to see 1/4 of the s&p 500 companies report this week. there's not much down side here. there's only up side. the reason i say that, we saw the vix, the volatility index,

the fear index, that topped out at around 20, 21 last week and it has been steadily, steadily decreasing. we're almost all the way down to where we hit the lows in the summer, in the low 12 handle. we're not quite there yet but we're still trending down lower. i think we'll see a jobs number tomorrow which will pretty much tell everybody that tapering is off the table through 2013. we'll see decent numbers come out of these big s&p 500 companies. now i think we'll be back into that slow running back up. i see another 30 to 40 points in the s&p 500 before topping out. >> yeah. go along with that, andrew. to you support that general thesis? >> i think now that we're looking at washington, the focus is back on corporate earnings. if anything what we've gone through has pushed taper back

even further. we think it's probably back to the end of the first quarter at this point. the economic data is going to be pretty noisy. the unemployment report is tomorrow. i think what comes out of the companies is going to be important to hear in terms of what they're seeing, especially as the quarter ends. in general i think that is picking up. >> finally, scott. we saw a decline in treasury yields on friday. they're still below 2.6%. what happens there? >> i think we're going to see that pretty steady also. we're seeing the dollar index is below 80 now. the fact that tapering is off the table, it will keep the dollar weak. i think we'll see yields between 2.5, 2.7 for the near future here which may help things. you may see mortgage applications pick back up. you may see a spike back up in the housing market temporarily because we saw such a drop down when we saw rates just jump all the way up to almost 3%. >> thanks for that.

scott and andrew, thank you from oppenheimer. that's it for today's show. i'm ross westgate. thanks for watching "worldwide exchange." "squawk box" is coming up.

good morning, everybody. "squawk box." i'm becky and andrew is in hong kong. he'll be joining us in the next hour. the futures have been down about 9.5%. s&p 500 down 1.5%. in our headlines today, the good news, jpmorgan reaching a tentative $13 billion deal with the justice department and other government agencies. this will settle investigations into bad mortgage loans that the bank sold to investors before the financial crisis. part of that came from companies that it acquired. the deal will not release the bank from criminal liability. we will have more from kate kelly in a moment. also the fte is saying that they're looking to fine bank of america for its role. the fha is pursuing claims on behalf of financing agencies,