china is trying to curb excessive credit announcing a new market driven benchmark. sharts in bbbh down despite a proper jump, spain's second biggest bank cutting the amount of cash for shareholders to strengthen its balance sheet to comply with central bank demand. and we can do better. stwiter gets set to meet wall street hoping a modest valuation of $11 billion will open in the face of the botched facebook ipo. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. all right. a warm welcome to you. we kick off the show today with the latest snapshot of the german economy as far as the ifo business climate is concerned. it's coming in at 107.4 in october. that's slightly weaker, not much than the reuters consensus of

108. the current continues index, 111.3 in october. again, versus the reuters consensus of 111.6. ifo expected index, 103.6, a little below the expected forecast of 104.5. there are no revisions to the september indices. the ifo index is probably the year's most important sentiment index, slightly lower than what we might have thought. not by much, but by a little bit. joining us in the studio for the first part of the show today, moo moody's analytics. frank, thanks very much for joining us. that's the ifo sentiment index. slightly lower than we might have thought. yesterday we saw from the pmis, as well, slightly weaker than we might have thought. is the economy, are things just softening slightly? >> i don't think so. the german economy is doing very

well. the pmi did slow down a little bit. they came weaker, but they still point to expansion this year. the unemployment rate in germany is 6.9% based on the national statistics and it grew strongly in the second quarter. it is likely to grow. it got hurt a little bit. the exports were hurt on a year ago basis because of the fiscal situation in the u.s. but the current account balance is still strong and the german economy is growing. >> we've heard from a number of german companies, lufthansa, sap, all talking about the euro. germany is a big export economy. how much of an impact is the euro at these two-year highs against the dollar having? >> well, it's going to have some impact. but for the sake of germany. >> we should have is a strong deutsch mark, yes? >> yes. however, it does have some

effect on the exports here. >> meanwhile, inflaigs flagz for the eurozone is very slow, running at 1.1% at the moment. there is -- we're a long way from the ecb's mandate. will anybody in germany be worry background the fact that we've got 1.1 is% inflation? >> actually, deflation would be a problem. >> it's a problem for the on peripheral. >> germany is not going to complain about 1.2% inflation. that being said, the ecb might actually consider decreasing the rate from 1.5% to 0.25% at some point. expectations are obviously under control. they are not a threat and they should focus on unemployment. >> let's pick up with that. should the ecb doing anything? >> it has introduced some

forward guidance, which we have seen with the bank of england and with the federal reserve. it does not participate in any sort of asset purchases as the fed has been doing. there's the possibility of the line factions, which is purchasing bonds, but it hasn't done that. and it could do perhaps a little bit more to boost lending in the economy, something equivalent to long-term financing equivalent. also on today's show, it might seem like a more settled picture, but coming up, we'll see why the region is far from out of the woods. a big earnings day for chinese financials, but is the world's second biggest economy set for a cash crunch? at 10:20, we'll delve into both of those stories. and it looked like we had a pretty solid quarter of growth. the uk will have the numbers. gdp figures due out in around 25

minutes. cnbc sources believe november the 6th ipo for twitter, as it goes on the road, what the does the ipo need to prove to investors? tune in at 11:30 cet. and microsoft has given information. no word on who will replace the outgoing cfo, steve balmer. allen mulally is right at the front of those talks. we are an hour and five minutes into the trading day. european equities are down. but it comes after, of course, being up ten out of the last 11 sessions. right now, around about 11 to 2 decliners outpacing advancers. we're down about 0.1%. xetra dax is off about 0.25%.

cac 40 is down 0.6%. french soccer players threatening to go on strike because they don't like the high tax rates. the ftse mib down 0.8el%. who has to go on strike because they don't like high tax rates, i ask you? here are the winners and losers, as well. elementis, up 2.8%. swedish stocks are down. as far as bond rates are concerned, this is where we currently stand at the moment. gilt yields continues to decline as we go towards that gdp number. 2.61 is%. treasury yields, just on the 2.5% mark. but really, the focus has one again been on currency peps euro/dollar, currently trading at 1.3816. we got up to 1.3850. haven't seen that since november last year. it was at 1.37 back in february,

but the ecb started talking about the euro. where is that pain threshold this time? certainly not at this level. maybe at 1.40. dollar/yen, down to 97.04. the aussie/dollar has just come back up to 0.9586. that's the trade right now here in europe. what about the last asian session of the week? >> investors basically shrugged off gdp data. a stronger yen and cash crunch in china are keeping asia in the red, so outweighing a positive handover. the nikkei 225 tumbled almost 3% with exporters broadly weaker. in china, investors talk profits into lofty valued and tech media sectors.

and the hang seng index down 0.6%. meanwhile, south korea's kospi lost 0.6%, weighed down by technologies and financials. but australia, once again, outperformed its asian peers with financials and energy stocks lending support. over in japan, softbank was amongst the biggest losers as shares tumbled almost 5%. alibaba group may delay its plan to go public. meanwhile, sales of a tightened camera will see its first dron drop since ten years ago and canon shares ended lower by 1.6%. ross, back to you. >> sixuan, thank you for that. catch you a little bit later.

as countries across europe report earnings, one major theme, it's the elevated level of the euro. right now, as you can see, euro/dollar is at 1.3814. you can see how we've steadily climbed, though, during the course of this year, particularly this bit up to the highest levels of the year and this morning hitting around 1.3833. renault is the latest company to come out and talk about the euro. its third quarter profits fell despite gains in pricing and value. they suffered from the depreciation of several emerging market currencies against the euro. and renault stock down today. this came out after the close, off today around 3%. axa off 1.6% today blaming the strong euro and sees a weakness for earning hes growth.

basf says demand recovery helped it offset the impact of a strong euro. this is the world's biggest chemical company by assets managing to beat forecasts in the previous quarter. we saw previous companies at the bottom of the dow jones stoxx 600. electrolux said it incurred a negative currency impact. markets outlined, as well, a cost cutting program. and a glovemaker, st. cobain, up 2.7%. it claims a 1.4% fall in sales, would have been a positive figure were it not for the euro's strength. finally, novozynes down 2.9%. just missing expectations. again, the company also narrowed its full year guidance to

reflect on favorable exchange rates. well, those are the companies all talking about the euro. at the same time today we've heard from bbva. its net profit up 86% during the first nine months of the year. cashobank revealed its bad loan ratio had jumped to 11.4%. stephane has moved from paris to madrid to look at the spanish banks. he joins us from the madrid bores, as well. stephane, run through bbva, as well. they're scrapping their dividend. how much pressure are they under with loan loss provisiones and pressure to preserve capital? >> there were plenty of numbers this morning. they were below expectations. the consensus was very wide this time. the real concern for the market, one is the nonperforming loan ratio which increased sharply from the end of the second quarter to the end of the third

quarter. it went from 5.5% at the end of june to 6.7% at the end of september. it's part of a broader strategy to clean up the balance sheet and to reclassify the loans as nonperforming loans. but it's very high compared to its main rival, santander, which yesterday announced a bad loan ratio at 5.2%. this morning, bbva announced a big change in its dividend policy to comply with the guidelines of the bank of spain. it will lower its payout ratio to a maximum of 40% for the coming here. it's higher than the 25% payout ratio recommended by the bank of shape, but it's much lower than what bbva used to pay to its shareholders. the payout ratio was at 132% for bbva. spanish bank didn't change their policy despite the fact that there are earnings were declining sharply. so that is the reason why the

shareholders will have less money. it will not pay a dividend in january. the payment has been delayed until april and the shareholders will get 17 cents per share. it sounds like a diet for the shareholders of bbva, ross. >> stephane, thanks for that. we'll catch new madrid a little later. spain's central bank says the country's gdp grew by 1% in the third quarter. moody's analytic sess advising that we keep the champagne on ice. the latest eurozone outlook warnings that the debt crisis continues to hit levels. bank loans are still underperforming and another u.s. debt crisis could keep the euro at elevated levels. still with us, the director of economics at moody's analytics. and peta.

we've heard from santander yesterday, bbva today. how concerned are you still by the ratio of nonperforming loans in peripheral, particularly in spain? >> well, the ratio is still high and the banking sector in spain has received the money from the mechanism over $40 billion. however, there's still a big portion of nonperforming loanes and those are related to the boom from early 2000. and this can still kraed create a lot of problems. >> is the ecb stress test going to get it right? are they going to result in banks having to move to capital? >> well, the european central bank is going to conduct the stress test for 130 banks, but this is some time for now. they will provide some kind of rate -- and a review of assets. this will be the most important part, which precedes the stress

test, conducted together with the european banking authority. now, the first time the bbva conducted the stress test, they were not very dependable. >> if you're going to get regional deposit insurance, i'm not quite sure about the windup mechanisms, how on effective can they be? >> not very. actually, the deposit insurance scheme is one of the key issues in the -- past the banking integration. this could help us to avoid banks exposure. if you have any sorts of comments about anything we're discussing today,

worldwide@cnbc.com. now, could another cash crunch in china be looming? we'll get into that right after this.

>> well, i don't -- i think it's interesting. i don't think they're too worried. i don't think it's entirely surprising. if you look at the overall trend of monetary policy, i think we've been on a slight tightening trend. with the evolution of monetary policy, now we are starting to use the interbank rates to tighten. and, you know, it's not entirely surprising because you saw a big inflow of foreign reserves in the country in the third quarter. while on the other hand, you know, you can see that the governments wanted to tighten because, you know, total social financing growth has peaked in may and started to slow down since then. you know, and if you look at money supply growth, i think it's about 14%, which is still slightly higher than the government's target of 13%. so, you know, the fact that they are on a slight tightening bias i don't think entirely surprises us too much. by using the bank rate, i think it shows the evolution of monetary policy. >> where does that evolution take us? >> i guess, i mean, it's related

to the growth of the nonbank sector. with reserve requirements, it will affect the banks. but by increasing interest rates, then you start to clamp down with the growth of wealth management products and funding, etcetera, because these nonbanks are basically looking at the interbank rate as a proxy for their funding costs. you know. so i think that it leads us to a more market based interest rate system which is the broad form for the financial sector. >> which is the reason for this new benchmark lending rate today. how long before they lift the ceiling on deposit rates? that would have a big impact. >> yeah. i think that's very hard to say. it would be very dramatic because the deposit rate feeling really, you know, pegs the entire cost of financing in the banking system which pegs the

cost of finance to the entire economy in that sense. so i don't think it's going to be that quick. we've seen them start to float the rates last june or july. i think you continue to see steps like that, slowly allowing banks to price not just 10%, but more and more about the bunch mark, eventually letting it go. i don't think it's going to be profit. it probably is going to be over a year or two years or more than that, even. >> okay, matthew. earnings from construction banks, this as many chinese banks are making write-downs because of bad loans. we'll hear from chinese insurers. ping an insurance says profits are up 20% in the third quarter. so, matthew, gives your thoughts on bad loans at chinese banks. loan provisions rising, how worried are you still about exposure to property? >> i think that, you know, we

think that earnings fwroeth is going to continue about low double digit rates. and, you know, that's because, you know, loan growth is still proceeding and we don't think margins are coming off sufficiently to offset the loan growth. the big swing factor is the credit cost and we've seen credit costs rise already. but that's because the possibility is so great. credit costs have risen so much that 20% are in that range. we don't think that it's going to -- we don't think it's likely that we're going to see a huge change in credit costs. we looked at about 200 companies and we looked at aggregate credit markets. and we noticed in the worst of those, the interest ratio was about three times in the first half. and if we compare that to our

database and credit sites of u.s. and european companies, you know, debt correspond toes a triple c rating and about a one-year probability of default of about 6%. it's not scientific to try and spoim it like that, but that sets the chinese numbers in context. so, you know, about 6% pd, assuming 50% recovery rate, maybe a 3% annualized credit costs. so that sets up sort of guideline as to where the credit costs could go. chinese banks are reporting the numbers in debt. there's a few reasons for that. one is they could be lend to go companies with superior credit quality, like the privately held soes or strong balance sheets. but we also think the banks have been transferring credit risk off the book end into the securities into the interbank loan as well as just off the balance sheet. the third factor is some of these corporate clients could be

seeing the forbearance from the government. we think there is going to be a rise in credit costs but, you know, from that data that we looked at, there was a sharp deterioration in 2012 and a continuing deterioration in the first half, but at the slower rate. and debt i think is possibly a deep indicator for bank npos, you know. and i think that would correspond to what we've seen on the economic data front. >> matthew, good stuff. matthew, analyst asia pacific banks, have a good weekend. sticking with china, star economists steven roche told cnbc that investors are failing to factor in the very real risk of china scaling back on its holdings of u.s. treasury. head to our website to find out what he says the consequences are. and don't forget you can follow us on twitter @cnbcworld. meanwhile, a chinese court

has rejected bo xilai's life sentence appeal. it comes less than a month after being lodged. the ruling, conducted behind closed doors was bo's only and last resort to have his sentence reduced. he will now spend the rest of his life in a jail in beijing. still to come, first quarter qdp for britain, will it's tnsd recover remain in effect? how strong and resilient is that recovery? we'll find out in just a few moments.

everyonings provide a little cheer with the likes of bsf, renault, lenovozymes all highlighting a stronger euro. in germany, ifo marking a fall in sentiment for the first time in six months. china looks to curb excessive credit announcing a new market driven benchmark to curb pbo lending once the market

holds tight on liquidity. the uk is now about to get the first present of third quarter gdp, running at an annual growth rate of 1.5% on the same period last year. that data is out now. and the o&s says the credit gdp is indeed up 8% on the quarter, in line with forecasts and on the year. 1 is.5%. now that compares with growth figures of 0.7% quarter on quarter for the second quarter and 1.3%, the annual, as well. so in line with what we were expecting. sterling steady at 1.62 in reaction to that. in terms of contributions, for the breakdown, they are saying

that the construction was growing up at 2.5% quarter on quarter. by the way, this is the strongest quarterly gdp growth since the second quarter of 2010. it's the strongest year on year gdp growth since the first quarter of 2011 and the strongest quarterly growth of construction which i just mentioned since the second quarter of 2010. joining us with his thoughts, martin mcmahon, economist at the commonwealth bank of australia. as we thought, martin, is this the high point in this bit of recovery? >> i'm not so sure. the uk is coming through strongly at the moment, roaring ahead, really. and you would expect growth to become more broad based from here, if anything, going through into the second half of the year. >> okay. that's going to require an uptick in business investment, isn't it? >> well, business investment. you can run through the various components of demand and you can see positive prospects across

various parts of -- >> okay. what about the consumer? yesterday, we heard inflation expectations are rising. average earnings runs at just over 1% for the squeeze on real wages is going to continue. where is an increase in consumer demand going to come from. >> other parts of household balance sheets are improving given what's going on in the housing market, for example, given what's going on in the stock markets. financial wealth elth is improving. household wealth is improving. real incomes is really the drag on household spending, but for other parts -- >> are you thinking of getting out of savings and investments? >> yeah. i mean, i think confidence is ticking up. we're seeing the fsk consumer confidence survey has picked up. the highest since 2007. so there is an improvement in sentiment generally going on across the economy. the balance sheet position has finances, maybe not the flow of incomes, per se. so i think we'll see a better

christmas on high street for this time of year. but really, consumer spending is not going to be bump sdmrerp when does this lead to business integration, which is the right type of recovery? one not build on housing and consumer prices. >> i think that is still a fair away off. the huge amount of capacity at the moment. companies can ramp up production without having to invest too much, without having to hire too much new labor. so i do think it's a swede spot in terms of profit for corporates, but they don't necessarily have to file into -- >> where does this leave the bank of england forecasts? are they going to be bringing it down? everybody is assuming we're going to hit unemployment rate at 7% earlier as one of the knockouts raising rates. >> yeah. it will be earlier than their august projections which is what they're sort of suggesting in

2016. i think it's going to have to be sort of mid 2015 by now. certainly some of the comments we've seen over the past month or so may be getting a bit ahead of the curb. people talking about 2014 rate hikes. that is way too premature. >> until it's spent, of course, on productivity and capacity question. and i suppose we don't really know, do we? >> that's the big uncertainty and if there's uncertainty, they will be cautious and monitoring the bate month by month. we have seen productivity pick up for a first quarter in q2. i don't think that's going to be resolved on that issue for quarters. >> one of the big things in the economy has been the british help to buy income. surveys show the number of new homes up by 20% in the same period last year, being described as one of the fastest

berths of growth in the past two years. construction, quarter on quarter, up 2.5%. the annual quarter, third quarter year on year, 4.9%. so it's the strongest quarterly growth of construction since the second quarter of 2010. mr. osbourn presumably will be happy. >> it's a start. the housing shortage construction will be a big contributor in the next four or five years. we haven't been seeing it over the past year or two. it's encouraging that we've had two quarters in succession of decent output crisis. we would expect that to kick on, as well, as the year progresses. construction, though, it is a relatively small part of the economy. we need to see services growth pick up. >> so we can do more services for chinese businesses, as well. martin, good to see you. have a good weekend.

now, the early economy with strong third quarter figures today, south korea tops forecasts with its 3.3% annualized growth rate led by solid private consumption figures. i hope you've been doing your bit to keep up consumg, shery. >> of course, ross. of course. i helped a lot. now, it's a happy day all around. the vast 3.3% year on fwroeth, that's the fastest annual growth in over two years. and like you pointed out, led by one private consumption. this is a nice change, actually. this is the very factor that led nomura to raise its outlook growth of the economy from 2.7% to 2.9%. it's cited the government's drive to perk up demand by increasing social welfare spending as well as invigorate

the property market that's been really slow for some time now. but, ross, exports, the backbone of this economy shrank by close to 1% in the third quarter. ross. yeah. and stay there, shery. i want to talk about samsung. operating profit one reporting a strong recovery in its memory chip business, but warning smartphone sales growth could ease sharply. we always get this when samsung reports. we get fresh records and then sort of underwomening reaction from investors. why is that? >> well, a record earnings, but it actually comes with that warning of a slower smartphone sales growth. so the chip business is operating profit jumped 12% on quarter. it did pretty well, driving the report earnings high. but the focus is really on its

mobile part of the business and it only grew about 3% on quarter. this would have give support to lower projections that we got earlier this year from names like jpmorgan and morgan stanley on mobile margins that really spooked investors earlier this year. and staying with mobiles a little bit, the key question to ask here is how much of an impact cheaper smartphones are having on samsung. it defended okay in the third quarter, but do note that its warning of slowly smartphone growth in q4, despite the fact that it's the year-end holiday season, ross. it's expecting 1.1 to 5% growth in the fourth quarter of this year. so the biggest earnings generator in the mobile division for samsung, sort of expected to plateau out here. so, ross, you saw how its shares closed today, very flat. it seems to show the thinking,

yes, it's record earnings, but we can't find any growth engines to get back its momentum from samsung electronics. so a very flat close for samsung electronics today. >> thanks for that. you have a good weekend. samsung beat revenue expectations. the net loss dropped to $41 million in the third quarter, down from $274 million which is what it reported in the same period a year ago. we have revenue increase of 24% from a year ago. shares from amazon are up 8.2% after hours. and also ahead of the holiday season, amazon's projecting revenue between 23.5 billion to $26.5 billion. the mid point of that range is currently below appear list expectations. microsoft reported earnings today up 17%. that beat forecasts.

the company says it saw strong business sales of its office and service software products, offsetting weakness in sales of its window system. shares jumped more than 5% in extended hours trading. there we go. and currently down slightly at the moment. zing ya shares soared nearly 13%.ynga shares soared nearly 1. that's about half of what analysts were expecting. this is the kch behind games such as farmville and words for friendses. it's saying it now expects a slim profit for the full year. away from games to games of a different sort. they would lead negotiations to

recreate after it was claimed angela merkel's person mobile was hacked into. >> i think the most important thing is to find a basis. trust needs to be rebuilt. trust is barely shaken. the members of the european council have shared those concerns today. >> speaking in brussels, france's hollande condemned the alleged access of the u.s. secret services. >> there are some behaviors and practices that cannot be accepted. considering the level and extent of surveillance that has been led by american services, as it happens, and given that this can be a rise to all citizens, we need to put an end to it and clarification is required. you might think a former member of the secret service would know better.

but when he was on a train he was overheard speaking to journalists by a blogger. the conversation was then live tweeted, who eventually ended up getting a selfie with his unsuspecting victim. this was spec'd to be a background briefing to journalists and it ended up being anything but. this time, it's footballers over francois hollande's super tax and high earners. clubs say their players paid $700 million euros in social contributions last year, more than they earned in tv revenue. despite spending money on transfers, the union argues that the 75% levy means other french clubs can no longer compete with their continental peers. as a result, there will be no top flight football during the final weekend of november. yep. the french players are going on strike. so we're asking today, should well paid athletes be allowed to

strike over things like high rates of tax? if you'd like to join the conversation here on "worldwide exchange," we would love to hear from you. get in touch. e-mail us, wordwide@cnbc.com. tweet at cnbc wex or direct to me @rosswestgate. is it outrageous that highly paid sports stars are going to get on strike over highly paid rates of tax? that is the sort of debate that we're having. european equities, we've been up for tenuous of the last 11 sessions. we are down today. the ftse is 1 is 00 is rather flat. xetra dax off 0.2%. cac 40 off 0.5%. ftse mib down 0.85%. uk gdp coming in as expected. the stoppingest year on year growth since the first quarter of 2011 is. gilt yield as a result, slightly higher on the back of that data. 2.64% the yield on the ten-year treasury yield at the moment 2.15%.

and on the currency market, the focus has been on the strengthening euro. 1.3823. just below the high we hit. plenty of companies today complaining once again about the strength of the euro. if you have any thoughts about that, please e-mail us. worldwide@cnbc.com. still to come on the show, the race through alibaba takes an apparent u-turn as the company is having another look at the hong kong stock exchange for its listing. we'll discuss its road to ipo next.

goovp gucci posted its highest revenue in four years the parent company says gucci still has more work to do to become a more exclusive brand. they account for more than half carrying valuation. carrying stock in paris down 2.3%. sticking with luxury, the

hamptons, still the best third quarter since 2005. cnbc's robert frank has checked on whether a bubble is brewing. >> the hampton's real boom is continuing to be so strong that some are worrying about a bubble. total sales increasing a little over 31% year-to-date. the average sale price sauce a rise of just over 3% to 1.4 million. the luxury market is really on fire. if you look at the top 10% of sales, the average sales price sought 30% increase to almost $7 million. the average sale saw a 20% increase year-to-date. what do you get for all that money? this two-story property, selling for $11 million. the four bedroom, two bath also has a tennis court. but there are some signs of caution. inventory in the luxury space more than doubled in the quarter

over a year ago. and one of the mansions still on the market is this ten-acre south hampton staept for $45 million. it has 12 bedroomes and amenities such as an indoor and outdoor pool and, yes, a tennis court. it remains to be seen whether there are enough wealthy people and enough confidence to keep this market going. back to you. >> we're heading into winter. g4s has revealed its chief executive is stepping down. richard morris has resigned as ceo for the uk and ireland and will be replaced by eddie achuthan. it comes as the world's biggest security company is trying to repair its image. and the man behind tesla has admitted that his car company is overvalued. you don't hear that very often. he said his market cap is higher than it deserves to be. the firm is now hoping to make a

mass market version of its green cards within thee years. tesla shares have fallen more than 10% in the last three days, but sure have moved higher after hours. since he came out and said it was overvalued, shares went up after falling. now, mobile messaging company line is planning to list on the tokyo stock exchange by next summer. when it goms goes public, the market cap is estimated to be around $10 billion. what do they do? what is it all about? fushiko koshido has more for us from the nikkei. hi, tushiko. >> hi, ross. messaging service smartphone app, the app is available in 17 languages and has seen its user base grow to more than 48 million in japan and more than 270 million worldwide. the companies's revenue for the third quarter his more than $70 million. as it competes with other similar services, such as viper

and skype, line is expected to invest its advertising dollars into the development of new apps. well, the nikkei dropped 2.8% today. shares related to line bucked the downward trend. media cobalt, which provides fortune telling surged 25% online advertisement rose almost 20% and engineer which provides virtual sticker sess traded up 19%. ross, back to you. >> have a good evening in tokyo. now twitter is kiging off its ipo road show today. that's when top executives meet with investors across the country trying to gain support going into its initial public offering. today, twitter executives will meet with company advisers on wall street that include goldman sachs, morgan stanley and jpmorgan. a source has told cnbc that a twitter ipo is expected to price on november the 6th. last night, we learned that twitter plans to tell shares

anywhere between $17 and $20 a share. it's offering $70 million shares, which suggests the deal could raise up to $1.4 billion. at the top end of that range, twitter would be worth around $10.9 billion. and another per expect i have ipo is alibaba. apparently it may not have ruled out a hong kong listing after pull. the ceo said the e-commerce giant is holding off on its listing plans for now. maybe it's to allow the hong kong exchange to come around for bending for companies like alibaba. he wrote thursday that new management structure could be considered for creative companies and their founders. on the telephone from hong kong, david webb. how likely do you think it is that charles lee will be able to change the rules for the hong kong stock exchange? remember, alibaba has this

structure where they want around 28 partners who control 10% of the company to basically be able to nominate the board. >> that's pretty unlikely. it's wishful thinking on charles lee's part. they won't change the rules to favor one particular company or even a group of companies. >> so how much are they going to miss out 12347. >> well, the alibaba is always welcome to apply and comply in hong kong with the rules that apply to all the other companies here. it hasn't stopped big companies listing in hong kong. and is, you know, there are plenty of companies who won't have a problem with the rules. but if it lowers its standards for one company, them that's a race to the bottom and it will destroy the quality of corporate governance here. >> charles lee says losing one or two candidates, that's not a big deal. but lose ago generation of china's new economy is and using it without a proper debate is

even more unacceptable. >> there's only one company that's ever had a problem so far by raising this issue. and will isn't a whole generation that is not going to come here. they can always go to america if they want to have second class shares or nonvoting shares like google is proposing. and they'll be subject to a different environment where the litigation system, quarterly reporting and so on. so what you can't do is is pick and choose the worst features of each market and write your own set of rules. >> okay. fair enough. where do you think alibaba will go? there's reports in the ft this week that they had been having discussions with the london stock exchange. well, london doesn't welcome duel share companies, either. but generally, they don't welcome it and that's i think why manchester united didn't

list in london. it went through america so it could have second class shares. i think america remains the odd one out. and in the end, alibab a might well choose to apply and comply with the hong kong listing rules. >> how likely do you think that is? >> well, they can make their own choices. if retaining control is so important to them, they can go to america and use an ab share structure. on the other hand, if they want to be in what is basically a market without the litigation overhead that you tend to get in america, then hong kong is the place to be. i can't make that choice for them. but i think it would be a welcome market for them if they're willing to comply with the rules. >> that may be why it will take a little longer before we see the listing of this ipo.

>> i think tier taking time to consider what those choices are and coming back. it is wishful thinking. >> thank you for that, david webb from webbsite.com. meanwhile, china will post industrial figures for september. on monday, corporate earnings takes into stage. we'll get results from kddi and komatsu out of japan. while sohu.com and chongqing rural report in china. maruti suzuki will be reporting in india. should well paid athletes strike over raising taxes? >> november, french football stars are going on strike in protest to the tax that francois hollande has imposed on them. we're saying, is that okay? have you got a problem with

highly paid sports stars going on tax against taxes? withdrawing labor as a result of it. worldwide@cnbc.com, @cnbcwex or direct to me @rosswestgate. are sports stars different from anybody else? i don't know. tell us your thoughts. all are welcome. still to come, it's the euro's fault. that's what ceos all over europe are saying as third quarter earnings flood in. stay tuned as we ask a currency export if exporting firms can expect anything any respite. and is it just an excuse for firms who aren't doing as well as they told us they would. let's take a look at the heat map. just down in europe. cked bag with my united mileageplus explorer card. i've saved $75 in checked bag fees. [ delavane ] priority boarding is really important to us. you can just get on the plane and relax. [ julian ] having a card that doesn't charge you foreign transaction fees

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this is "worldwide exchange." here are the headlines from around the globe. earnings providing cheer with the likes of bsf, renault, novozyme all highlighting the impact of a stronger euro. china looks to curb excessive credit. it's a new market benchmark. this is while the pboc is still

holding tight on liquidity. and we can do better. twitter getting set to meet wall street, hoping a modest valuation around $11 billion would help it avoid the mistake of a botched facebook ipo. welcome to the start of your global trading day. the s&p up around 5 right now. the dow just above fair value. not by much. around 5.5 points something like that. the nasdaq at the moment is about 20 points above fair value and the s&p 500 at the moment is pretty much on fair value. the ftse yesterday was up from 38 points. we are weighted to the downside today. we had been up 10 out of the last 11 session in europe. the xetra dax is just down 0.1%.

bearing in mind, quarterly gdp for the uk coming in best since the first quarter of 2011 as expected up 1.5% quarter on quarter in the year. the ifo index today dipping for the first time in six months. the cac 40 is off 0.3%. as we look to french footballer is outrageously striking against the 75% rate of tax. the ftse member down 1.08% at the moment. who would think about striking because you don't like the rate of tax? treasury yields have picked up today. 2.5% on the yield in the ten-year. gilt, 2.64%. higher than we were post that gdp number. looks fairly clear. the bank of england will probably have to bring forward its guidance on when rates will rise. they're currently talking about 2016. plenty of months.

they might have to come back in on 2015. so that's where we are. two hours into the session here in europe. let's show you where we are with currency rates. that's what a lot of companies have been pleading about this week. euro/dollar, 1 .3817. we did hit 1.3833 in the session today. japan and the nikkei not helping out. dollar/yen, 97.10. down fresh two week lows, as well. the aussie slightly weaker and the pound slightly firmer at 1.6210. let's get more on how asia wrapped up its trading week. sixuan with her last duty, i hope, for the week, joins us from singapore. hi, sixuan. >> yeah, thanks, ross. good to see you for the last time this week. japan's positive cpi numbers in the south korea solid gdp data not able to boost sentiment. a stronger yen and those cash frurchb fear necessary china

kept asia in the red really outwaying the positive u.s. handover. the nikkei 225 stomach tumbled nearly 3%. in china, investors took profits in some of those lofty valued media sectors. the hang seng index in hong kong lost 0.6%. meanwhile, south korea's kospi lost 0.6%. this weighed down by technology shares and financials. but australia, once again, outperformed its asian peers, pushing up to a five-year high with financials in energy stocks lending support. we're watching chinese banks. while the country launches a new benchmark lending rate to push forward interest rate liberalization, mainland listed mid sized bank as they gained traction today. ping an bank added 3% after a 7% value over the past two sessions. but banking majors listed in hong kong showed weakness today

as the central bank continued to tighten, push up money rates. the big four banks, they slipped over 1% in today's trade. meanwhile, in japan's softbank was among the biggest losers and shares tumbled almost 5% after reports that china's alibaba group may delay its plan to go public. the mobile carrier has a roughly 7% stake in the commerce giant. canon warned sales of its high-end camera will see its first annual drop since their launch ten years ago and canon shares ended down by 1 is.6%. back to you, ross. >> swish juib juan, have a grea weekend. thank you. meanwhile, as companies report earnings across europe, a major theme is emerging today. the elevated levels of the euro being cited as a major export pairier.

euro/dollar, 1.3817. it has steadily appreciated since the middle of last year against the dollar. 1.3833 is where we hit earlier today. but back over here to where the companies are currently talking about, they've all been bleeting about the strength of the euro. is it justified or not snp renault came out after the market close last night. stock down 3% despite gains in pricing volume. the company says revenue has suffered because of several emerging currencies goodness the euro. axa down 2%. it's blaming the strong euro as well as seasonal weakness in life insurance for a slow ondown in its earnings growth. revenues up by 2% compared to 3.4% in the first two quarters. basf, the stock is up 1% today. it says demand recovery helping it to offset the impact of a stronger euro. the world's largest chemical

company managing to beat sales in the third quarter. electrolux said it enduringed a negative currency impact across markets as it outlined a cost cutting program. and in france, another company highlighting the stifling impact in its reporting. saint cobain says a rise in sales would have been positive however, the stock is up, anyway, 4.6%. novozymes narrowed its full year guidance to reflect on favorable exchange rates. plenty of other chief executives this week have been complaining about currency impact on their earnings. have a listen to what some of them have been saying. >> the currency impact is larmgly the translational effect of just reporting,ed aing on the quarterly numbers and

consolidating. that's minus 6% on the top line, which is significant. >> we had 13% growth in our software and cloud business. if you have the constant currency view on our numbers, we can't take responsibility for the currency and we have seen a number of effects from the u.s. or the japanese yen, etcetera. currency makes expense on it. so without having more cost in the eurozone and in the danish cron ozone than we have sales, we have an issue with our bottom line because of the currencies. but we're making it and we're making our guidance on the bottom line, too. >> that's view of some ceos. and this comes as a measure of german business sentiment has fallen for the first time in six months. they want 104.7 readings ifo in secretary, lower than the consensus forecast of 108. the monthly based surveyed 100,000 firms falling from 1.7 in september. is that down to the strength of the euro slightly? joining us with his thoughts,

jeffrey eu from ubs. jeffrey, do you think all these companies are right to complain about the impact of currency? and in particular, the strength of the euro? we also heard this week from german firms, lufthansa, sap, adadas. >> well, it really depends on whether the firms' exposure into the eurozone exports are strong or not. coming from the eurozone, it's a bit rich. the vast majority of trade is in the eurozone. if you look at the underlying balance of traders numbers, at the end of the last year, it's 1.35% of gdp. it's gone above 2% of gdp. so a lot of other countries would say we would love to see these bop numbers. what's the big deal? what's the problem here? maybe a lot of european companies are looking at the valuation exchange rate. so they have a point there.

but overall, from the ecb's point of view, i think it's extremely secondary. again, we need to look at structural reforms within the eurozone to stimulate intraeurozone demand. at the enof the day, if it means easier funding conditions, then it's something cash strapped european countries should welcome, as well. it's only if a strong euro results in weaker headline inflation and that translates into deflationary impulse. but as far as they're concerned, they're more focused on lending rates. >> inflation is down to a 3 1/2 year low. they have a reference target of 2%. and i understand this because in february, they talked about the euro at 1.37. why is it different than in february? that's very true. it was a surprise that he that the ecb chose not to address the impact of a strong euro. so is the ecb telling us

something that we don't know about? for example, is the market still worried about liquidity within the eurozone? even though excess liquidity is shrinking, is there still going to be a headline inflation from that? again, they really do have a case for the ecb to start talking about further measures. but again, what do they address? about they can't talk about the euro directly. that's probably third or fourth in line. they can do something which can get us to a weaker euro, but directly, i don't think so that's going to be the case. >> obviously currencies trade in pairs. the dollar index at nine-month lows as where we've seen. and, look, where could the euro go? forget its owner for a moment. if the dollar keeps weakening, is it 1.40, 1.41 inspect what's the erp end of this trading ban? >> i think a move above 1.40 is possible right now.

i think it's generally knowledge as the pain trade in markets. anyone who tried to short euros over the past year or so has not made any money off that. so the month end fed decision i think is key here. if there's going to be a signal of prolonged accommodative policy. expectations taper and even beyond q1 next year, we could see a surge up higher. that's something that the ecb can't really do anything about. however, if the fed firmly says taper sg still on the table, assuming we get past the fiscal trap towards december or january, then we could get a correction, as well. much hinges on the fed rather than the ecb. >> jeffrey, always good to see you. thanks for that. that's the euro discussion. what's on the agenda today in the united states? at 8:30 eastern, wheat get a report on durable goods orders for september. at 9:55 a.m., an important report on consumer sentiment in october, as well. we'll see how americans are feeling about spending their money while the government was

not doing anything. and on the earnings front, procter & gamble and u.p.s. report earnings before the opening bell. mean while, amazon is ray easying its free shipping threshold in the u.s. we'll get more from the company and its numbers right after this. your financial advisor should focus on your long-term goals, not their short-term agenda. [ woman ] if you have the nerve to believe that cookie cutters should be for cookies, not your investment strategy. if you believe in the sheer brilliance of a simple explanation. [ male announcer ] join the nearly 7 million investors who think like you do: face time and think time make a difference. join us. [ male announcer ] at edward jones, it's how we make sense of investing. ♪ [ male announcer ] united is rolling out global, satellite-fed wi-fi

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possible signs of weakness in germany as the country's business sentiment falls for the first time in six months. and twitter gets on its bike as the company's road show moves ahead to its forthcoming ipo. i'm only in my 60's... i've got a nice long life ahead. big plans.

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sfwhoo some of the earnings stories dominating the news overnight. my row soft up 17% beating expectations. the company says it saw strong service sales offsetting weakness in sales of its windows system. the stock was up more than 5% in extended hours trading. right now in frankfurt, up 3.57%. zynga shares put in a pretty good performance after hours, up nearly 13% despite a fall in active users for the third quarter. but the game's publisher did beat forecasts for adjusted revenue with a loss of $2 a share. that's about half of what analysts were expecting. this is the if he can firm that has games such as words with

friend and farmville. amazon quarterly revenue beat wall street expectations with its quarterly loss meeting forecasts. let's get more on that. morning, court. >> good morning to you, ross. amazon's net loss did drop to $41 million in the third quarter. in line with what analysts were expecting. that's down from 274 million loss in the same period a year ago. that definitely gave the stock a boost in after hours trading. investors don't care so much if this company makes money so long as that top line is growing. looking forward to the all-important holiday shopping season, amazon is projecting revenue between 23.5 billion and $26.5 billion. now, the mid point of that range is below analyst current expect age webs but analysts brian pits and jeffries points out in his note that amazon usually guides

conservatively and has consistently been able to beat operating income guidance over the past seven quarters. now, remember, this is a company trying to expand beyond its internet retail business into a broader tech company, also a media company. many would consider amazon has been spending billions of dollars to get into gadgets. also trying to make a name for its in cloud computing for big companies. a lot to talk about here, always with amazon, ross, as we look at this very impressive stock growth for a company that has posted a loss now for three consecutive quarters. back to you. >> it totally depend where you are. if you're closer that if a that fulfillment center, you can wait

longer than us that are further away. you can experiment now and see how long it takes to get your presents before the holiday season kicks off. >> have to think about that. global head of media and internet research, yusef, good to speak to you this morning. what's your assessment here? amazon is trying to turn its from an online retailer into a broader tech company. are they pursuing the right path? >> well, we think they are. i think what's really important, and to highlight from last night's numbers is that, number one, amazon is by far the largest e-commerce player in the world. they have a 15%, 16% market share. but what's even more impressive is the fact that they're growing twice as much in the market. e-commerce in the u.s. is growing at 12%, 13%. not only are they the largest

gobbling up market share, who are they taking it from? they're taking it from everybody. they're tale taking it from smaller online players, but gobbling it up from the large guys like walmart, k-mart and all these others. so we do think they have the right strategy. there are some issues around margin and how thin they are and when we'll conveniently start seeing leverage. but i think the strategy is head on. >> having said that, the margin of worldwide sales did improve from minus 0.2 to minus 0.1. so it is going to the right direction. >> yes. but we're talking tiny improvements. i think if you look at the internet ecosystem margins, be they for e-commerce or service providers said to be substantially larger. and so the argument here is at what point will amazon start relaxing some of its investment

in technology, in distribution centers, in new initiatives and start, you know, paying back shareholders and realizing some higher roic. so -- but clearly, with the stock -- >> that's a good question, isn't it? because they're spending on distribution centers. they're expanding on markets like china. they're developing tech products. so when can they stop investing? when can they taper their spending to improve margins and have some extra cash? >> i think as long as they can justify growing materially faster than overall e-commerce, investors will give them a pass. .i think they will take it and they'll continue to aggressively invest. we deeply believe that at the end of the day, i think jeff beesels wakes up every morning trying to figure out how he can take walmart out of existence. not over the next two years, but over the next 30, 50 years. this is a guy that's build in a 100 year clock.

clearly his investment horizon may be different than yours or mine. so far, so good. he's being on the money and investors have been along for the ride. >> is that a realistic long-term goal? >> well, as long as the top line continues to perform the way it is, i think so. but it hasn't always been the case. about five years ago, you could have bought all the amazon you wanted tore about $15 or $14 a share because he spooked investors, because he's operating margins are going the other way negatively. so, you know, i would say he's -- they've conditioned the market right. clearly in, you know, the last recession we had amazon got hit pretty hard, as well. but they showed improvement in margin. so they're able to show that they can calibrate top line growth with margin improvement. as long as they can have fast growth, they'll relax the margin. they'll continue to invest. and if growth were to slow down,

then they'll turn on the monetization or they'll turn on the improvement in margin and deliver better roic. >> we're used to strikes in france, but this one is different because it's french footballers. high paid stars are going to withdraw their playing. the players paid $700 million euros in social contributions last year, more than they earned in tv revenue. and despite monaco spending nearly $500 million in transfers in recent seasons, the unions argue it means other french companies can no longer compete with their continental peers. as a result, there is going to be no top flight football during the final week of november in

france. so we're asking should well paid athletes be allowed to strikes over rates of taxes? hall tweeted everybody should be allowed to strike over high taxes. another tweet says everyone should be allowed to strike over taxes. it's fair point. >> so where do the fans come in with this? if you want to get in touch with us, e-mail us, worldwide@cnbc.com, @cnbcwex or tweet me directly, @rosswestgate. ♪ ...people noticed. ♪ the cadillac ats -- 2013 north american car of the year.

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novozynes all highlighting the effects of a stronger euro. germany marks a fall in business sentiment for the first time in six months. and we can do better, twitter getting set to meet wall street, hoping a modest valuation of $11 billion will help them avoid the mistake of the botched facebook ipo.

plus, microsoft stocks jumped in after hours trading on forecast numbers. the company still not giving away clues on who will be the next boss. >> you're watching "worldwide exchange," bringing you business news from around the globe. all right. if you've just joined us, as well, stateside, welcome to the start of your global trading day. this is where we stand with futures right now. the did on dow up 95. s&p up yesterday. right now, we are two points below or a point below fair value for the dow. the nasdaq is currently 20 points above fair value and the nasdaq is about 8 points below fair value. the ftse cnbc global 300 is up around 7 points at the moment. down around about 0.1%. and as far as european equities are concerned, we had a bit of data out today. the ftse 100 is flat after being up 38 points yesterday.

third quarter gdp coming in as expected, but it's the strongest quarterly growth year on year. since the first quarter of 2011. we were up 1.5% on the year, on the quarter, up 0.8% quarter on quarter. construction rebounding. the xetra dax down 0.1%. the germany ifo business climate index down for the first time in six months. probably europe anticipates most important sentiment index. it came in at 107.4. there was a consensus figure of 108. in france, the cac 40 down 0.4% and the ftse mib off 1%. on the currency markets, a lot of focus among european corporates on the strength of the euro. euro/dollar is at 1.3808. that is a fresh two-year high against the dollar. you have to remember in february, the ecb was complaining about the euro at 1.37. it's been pretty mum since then.

and that's despine inflation dropping to 1.1%. they've got a reference target of 1.2%. how much longer will they keep not saying anything about the stronger euro? meanwhile, twitter kicks off its ipo road show today. the company has revealed its plans to sell shares for between anywhere between $17 and $20 each when it begins trading on the nyc. at the top end of that range, twitter would be worth just under $11 million which is a little less than some had predicted. so that relatively modest ipo not repeating facebook's botched ipo. joining us now, ted murphy, founder and ceo of izea. good morning, ted. i hope things are warm where you are.

what do you think of twitter's ability to generate revenue? how does that help twitter earn any money? they're not earning any money out of what you do, are they? >> they're not earning money directly out of what we do, but they had their own offering through promoted tweets. and that is the primary driver of their business right now. they are seeing phenomenal growth and advertiser interests in that platform. their ad revenue was double what they did last year. >> how ready are pete people on twitter to accept promotional -- promotion in the middle of what is expected to be a social conversation? >> well, i think that one of the things that is really interesting about twitter is

that marketers and promoters always were a big part of that platform. whether you look at the media companies, the packaged goods of that company, everybody has twitter logos on their windows, on their packaging. i think people are comfortable with advertising on twitter and there's a tremendous amount that happens on the platform. it goes hand in hand and it's a natural fit. >> you said you think the twitter is maybe expensive compared to facebook. how much growth do they have in terms of revenue and user growth? >> i think that they are a little bit expensive right now. if you look at 2012 revenue facebook versus twitter, twitter

is looking at 32 times 2012 revenue for this ipo. they have a tremendous amount of growth. they could do $1 billion in revenue next year and facebook knot going to grow at a same clip. facebook is growing at a much slower rate. so i think that what twitter is doing right now is they are purposely pricing this where people feel comfortable. and twitter continues to deliver on the revenue growth. >> people are looking at what they're doing. they're going to the new york stock exchange and having a dry run. there seems to be an attitude, look, whatever we do with this ipo, we're not going to mess up like facebook did.

is that the right way to look at it? >> yeah. i think a lot of what they're doing is trying to distance themselves from the problems that facebook had. so whether that is the choice to go with the nyse over nasdaq or these dry runs that are happening, i think that they're being very methodical. i think they're being very cautious in the way that they're pricing this ipo. they don't want people to have that negative feeling that they had with the facebook ipo. >> just a question i've always wondered about here. if a celebrity makes a post on twitter, how much uplift in traction is there, right would be to a product or to follow? if you've got a million followers, say, and a million followers post something, what's the click through rate from that to people then going to look at a product or brand? >> it really depends on who the selecty is.

some celebrities have high engagement rates. others may have that same million followers and it's a much lower response rate for the advertisers. they can be incredibly valuable for brands and because of that, the brands are willing to pay more and more dollars per tweet. we heard $10,000 was a lot of money for a single tweet. now we are seeing those deals climb and they've gotten to the point where they're in the six figure range. >> six figures for a single tweet? >> six figures for a single tweet. >> what kind of click through is that? >>. >> it really depends. you're typically looking at 2% to 3% for some of those higher

engagement rates. >> okay. always good to speak to you. thanks for that. i'll give you a shout next time i'm in florida. all right. we'll take a short break. still to come, where will the oil price be a year from now? we'll take a look at black gold particularly after boone pickens latest forecast. nymex down at 97.31 at the moment. ♪ ♪ [ male announcer ] more room in economy plus. more comfort, more of what you need. ♪ that's... built around you friendly. ♪

last night, the red sox lost game two of the baseball world series against the st. louis cardinals. at home, no less. but the good news, a judge gave the go-ahead on the sale oovt new england media company to henry. the "new york times" company agreed to sell the preed ya properties to henry back in august for $70 million. the sale was held up because of a lawsuit since 2009 which involved some of the new england media group papers, but it now looks like he's got that. the man behind tesla has admitted -- refreshing -- -- that his car company is overvalued. speaking tat an opening of a showroom in london, he said the market cap is higher than it deserves to be. the firm is now hoping to mick a

mass market version of its green car in three years. tesla has moved higher in after hours trading. about the same time he was making the comment about the company being overvalued. and the average 30-year mortgage rate is now 4.13% down from 4.28 last week. that's the lowest level in four months. still, of course, historically very low. rates have been falling pretty steadily since september when the federal reserve said it would continue its bond buying program. at the same pace. a quick look at oil for you today, nymex trading below $100 a barrel. 897.34. the spread with brent over $10 a barrel. brent currently at 106.78. where will the ole price be a year from now? boone pickens. the legendary oil and gas executive gave cnbc his projection. >> you've got oil off in iraq.

you've got oil off in libya. sudan. and brazil is down $100,000 barrelses. and i've forgotten what the other one is, but it's an array of suppliers that are down. yeah, i think -- i'll say it will be $10 a barrel higher. >> all right. $10 a barrel higher for now. michael gurka from spectrum asset based management. mike, good to see you. what do you think of mr. pickens' forecast? >> well, you know, the momentum clearly has been the opposite way, but boone is looking a year out. so there's a lot of data that consume there. effectively, we've seen in the last 12 months, at least, a consolidation around that 91 level. i would not be surprised if you saw some support there. if we violated those areas, then all of a sudden it would be a global quandary because effect hely, the way demand is tapering off, and i hate to use that word, but in so many different

fashions as you're starting to see mortgage demand look lower, oil demand look lower. clearly the forefront of the way the dollar is looking over the next year is looking lower thanks to the fed. >> all right. mike, stay there. we'll come back. plenty more to talk about for us from chicago. more to come from mike. mean wile, the headlines, the strength of the euro blamed as european corporates host weak results. germa germany's business sentiment falls for the first time in six months. and is twitter gets on its bike as the company's road show kicks off ahead to its forthcoming ipo. plus, the earnings below expectations below the surface. there's some pretty big headwinds out there. we'll have more on that in just a few moments. [ driver ] today, my ambulance knew all about a bike accident, just by talking to a helmet. it grabbed the patient's record before we even picked him up. it found out the doctor we needed was at st. anne's. wiggle your toes.

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microsoft's earnings rose 17% beating analyst expectations after the close. the company says it saw strong business sales offsetting weakness in sales of its windows system. shares are up over 5% in extended hours trading. in frankfurt at the moment, they're up 4.3%. at the same time, investors were looking for clues on the ceo search with current chief steve balmer stepping down within a year. some of the candidates reportedly under consider include mark hurd, stephen elop, tony bates, kevin johns job, steven sinopsky and allen mulally, ceo of ford motor who in an interview with cnbc last month dodged a question about whether he was they hadded for the microsoft job. >> well, i clearly am focused on

ford and we have a great partnership with microsoft, as you pointed out. we look forward to continuing that relationship. i absolutely love serving our ford. >> daniel, good morning to you. is the search for a new ceo going to focus on the company operating or not? >> i think it is. and that's front and center for investors here in terms of who the next ceo is. you know, hopefully over the next three to six months. but, again, it was a pretty good quarter last night and it's really, you know, some good news from microsoft. you know, tech has been a tough earnings season and it was a good quarter for microsoft. even though the ceo surge is definitely what's on top investors' minds. >> out of that group that i went through there, allen mulally speaking at the end, would any of those that you would pick over anybody else?

>> mulally, in my opinion, is the horse that you bet on. investors are not looking for the status quo in microsoft. elop is viewed by some as the front-runner. but mulally is the guy that a lot of investors want to see. you don't want the status quo here. you want someone who is going to come in, change up microsoft. he's proven again and again, i think he's the one that a lot of investors would like to see in that ceo seat. >> meanwhile, look, jim cramer was talking a lot about microsoft a while back, talking about dividend hike, 20% increase in dividend hike. new $40 million buyback. it shows they're running out of ideaes and they want to get the stock price up or balmer does before he leaves. is there some merit in that or not? >> i think there is. i mean, you could put new paint on an old house.

it comes down to the fact that where is the growth coming from? and obviously, they were late to the game on mobile. surface has been, you know, very underwomening. and i think to some extent where are they going to get to growth from? cloud has been successful. and that's why you feel like there needs to be next stage of growth. they need to change it up. there is obviously optimism around microsoft with the new ceo blank sheet of paper. what could they do? could they break up the businesses. but at least at this point they need to do something different. it was a step in the right direction last night with earnings. but, again, one quarter doesn't -- you know, we won't call it a victory,ite? it comes down to what the next few years look like. at least right now, there's a lot of headwinds that they're facing. >> commercial revenue was fine. i mean, up 10%. quite a bit stronger than devices in consumer, which is up only 4. so how do they make the consumer -- i mean, they're suffering clearly in competition on that end.

>> part of it is a massively difficult pc environment, right? and enterprise and cloud, they've been successful. that's what i call, you know, the rock of gibraltar for microsoft. but on the consumer side, tablet is a massive issue. and, again, there, obviously, it's really about windows 8. so far out of the gate, it's been very underwomening. 8.1, the company is hoping that that could spur some growth. there is cautious optimism. to some extent, i think windows 8 there was a lot of hype and it's been pretty disappointing so far as the growth catalyst. >> the stock or not? >> look, in terms of the overall stock, i mean, look, there's just a lot of optimism on microsoft in terms of what the new ceo could do, you know, in terms of potential acquisitions,

in terms of the basically taking this massive tech bellwether and turning in the right direction. and that's where a new ceo as well as we'll call it a good quarter last night, you're going to see a lot of optimism in morning, especially given what we've seen in tech. soft ipm numbers, soft emt numbers, soft citrix numbers. it's a good quarter in a tough environment. daniel, thanks for that this morning. on the agenda in the states today, at 8:30 eastern, we'll get a report on durable goods orders for september. at 9:55, an important report on consumer sentiment in october. we'll see just how americans were feeling about spending their money while the government was closed for much of the month in washington. on the earnings front, procter & gamble and u.p.s. all report figures before the opening bell. u.s. futures right now, pretty flat generally. we've got the dow is, what, about 11 points above fair

value. the nasdaq at the moment is some 22 points above fair value and the s&p 500 at the moment is about a point above fair value. michael gur ka rejoins us from chicago and chicago based spectrum asset management. how do you see finishing the week off as we go into next week? >> well, i wouldn't be surprised if we continue to see at least a little strength here off of any downside in stocks. in other words, buying the dip that's been a very successful trade for quite a long time. and for the same reason as it being probably the most successful trade out there as far as yield is concerned. i think one of the prerequisites of watching that trade is how the ten-year yield reacts below 250 if we see more of that. wrins again, it's the outlook remaining so flat for so long. one of the reasons you're starting to see this antiquating the markets to the way equities have ponded.

clearly, they've answered the bell every time. >> meantime, the dollar is weakening. what do you think is going to happen with the greenback? now that we're putting tapering off the agenda until the end of the first quarter? >> you know what, ross? as you and one of your guests mentioned earlier, and i would agree with that, it's a to-fold scenario. clearly, the dollar has more room to ease off. maybe those projections you're seeing at 1.40 are clearly within range. i think it's the fact that the eurozone itself is getting its house in order structurally from a political side much more than you're seeing here and the uncertainty is a lot clearer. so that reason alone makes you think that 1.38 is looking actually rather cheap. technically, that chart looks like it's springboarding right here. it's kind of a break off top and, really, i would assume at least at this point that you're going to continue to see a lot more strength in the euro versus

the dollar. >> all right. and finally, what's your trade of the week right now, michael? >> you know what, ross? i still think at least right now that silver remains a good buy and on certain times it remains relatively cheap here, cheap to gold at 22 and 360 in lumber. we talked about that last time. look at that sucker go. >> we'll do that, mike. and the spurs result this weekend, totten ham hot spurs? >> clearly a win. we are coming back towards the top of the table. >> all right. good stuff. michael, thanks very much, indeed, for that. michael gurka joining us from chicago based spectrum asset management. they're still behind arsenal, their big rivals, of course. we'll take a break now for the week. coming up next, of course, "squawk box" and the countdown to the opening of markets stateside. a pretty noncommittal start today for u.s. trading. whatever happens, we hope you

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good morning. today's top stories, the bulls in charge. the dow and s&p 500 both on track for their third straight winning week. among the catalyst res quarterly results. this morning, we'll hear from procter & gamble and u.p.s. plus, tweet all about it the twitter says it plans to sell $70 million shares between 17 and $20 apiece. that could raise up to $1.4 billion. it's friday, october 25th, 2013, and "squawk box" begins right now.

good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. the dow is now just two points away from hitting a record high. it alternated between gains and losses for nine straight sessions. that is now up about 23% for the year. futures this morning, after all of this, i think they've barely budged if you want to take a look at where they are compared to fair value. right now, the dow futures up by fair value. s&p up by 1.3 points. we are on track for a winning week once again. joe talked about earnings central. dow component procter & gamble is this morning's headliner. among the market moving names after the bell last night, you had microsoft and am zone. shares of both companies giving a boofrt.