hello. you're watching "worldwide exchange." i'm ross westgate. stocks in europe fall. investors awaiting the zew results of of girlny and ben bernanke speaks this evening for clues on monetary policy. carl icahn takes some of the wind out of wall street sales saying there's a chance the market could see a drop. >> for ezjets, the uk budget

airline outperforms rivals proposing a special dividend for shareholders. and european car sales continue to reboind. renault and toyota leading the way. daimler gains ground on its luxury peers. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. okay. a warm welcome to today's "worldwide exchange." we're an hour into the session here in europe. you can see stocks in the red, 9 to 1 decliners outpacing advancers just about on the dow jones stoxx 600. we are at the lows of the session, albeit only 60 minutes in. speaking at the reuterss global investment summit, carl icahn says valuations are rich. later on on his website, carl

icahn elaborated saying while he's concerned about market levels, it's almost impossible to predict what's going to happen in the short-term. so he says at times like this, he hedges his investment to some extent and icahn says picking up short-term moves is market is predicting how many sevens the hot dice player will continue to roll. european equities, therefore, narrow into the trading day, the ftse yesterday was up 30 and right now it's down 40, 0.6%. we saw the xetra dax with fresh highs. right now, down 0.4%. the cac 40 is down 0.7% as is the ftse mib. a number of stocks to look at. let's shift to dsm, shifting its focus away from pharma. it's going to spin off its fau pharma in a deal worth $2 billion. investors like that, the stock

up 3%. renault, we talked about this. up 1%. european car registrations in europe up 1.6%. renault enjoying some of the best gains this month. almost all of the automakers logged gaines in the last 30 days. fiat saw registration down over 7%. and one of the other big gainers today, easyjet, revenues are up and it's up 6%. take a look at bond yields where we stand at the moment, particularly with treasuries. 2.68%, we were yielding 2.71% yesterday on the ten year. we have seen a fall in the level of expectations for what a yellen fed will mean with her confirmation coming up, as well. the dollar today on the defensive.

dollar/yen, once again, we haven't held that break through, from 99.70. sterling back over 1.60 nearly to 1.61. that's where we stand right now. in europe, to recap the asian session, let's bring in sixuan from singapore. hi, sixuan. >> thank you, ross. treading markets today with a negative lead from the u.s. the nikkei 225 eased 0.25% after the 7..7% gain last week. the dollar/yen weakening to trade below the 100 level. so that adding pressure to exporter stocks. meanwhile, australia fell for the second straight session down 0.6% at the rba keeps the door open for further cuts. china markets pulled back after yesterday's strong gains. the shack high composite pulled lower by 0.2%. china enterprises lent support

to the hang seng indetective which ended on a flat note. seoul sales managed to end with a two-week high. automakers led the gains there. chinese banking shares came under some pressure, especially mid sized lenders. this on concern that financial reforms and interest rates liberalization. banks may face higher margin pressures. the media sector outperformed out records that beijing will make media and entertainment a pillar industry with support this year, encouraging more private enterprises to develop and expand in this industry. so a few thoughts limit up by about 10% today. so that is a look out of asian markets. back to you, ross. >> thanks so much for that, sixuan. that's the latest in asia. so let's move on and bring in

tim harris joining us today. the dow is up 22% for the year. carl icahn is wondering whether we've gone too far too fast. >> well, i think it's all about the gas that's been provided to markets in the liquidity rush. what i mean by that is the world is gradually progressing. it looks like a slightly safer place, but a liquidity push coming to markets is still there. we had a big debate last year, janet yellen in her hearings. what policy changes are we going to see from the fed? nothing substantial for a while. with most equity markets looking pretty good, european equities

paying at 3% to 4%. with this liquidity push still coming from policy providers, i don't think we're at the end of this party yet. >> are blue chips looking for attractive? they say the s&p valued closer to operating profit, price earnings ratios about twal equal to the long run average. >> i think collectively, the story is one of do i believe in cyclicals, do i believe in value. if you're a value investor, you're going to go with large cap, you're going to go with global plays. there will always be small caps which are the stock de jour. but if you're looking at the big board, where the markets leave, i think thee mattockly, you're still seeing some leadership being offered by value. consumer discretionary, for

example. the big caps seem to have leadership. >> buffett said he's finding it hard to find value. and then he went and bought some exxon. >> indeed. is he parking cash there or -- doesn't mean he's going to bit for tesco. he has his core business. i think he was telling you. the fact that he's putting money to work in equity markets. so he likes equities. yes, he's an equity man. the hurdle rates are low. >> that's the key point, isn't it? when you look at a treasury yields, you look at what commodities have done this year. >> yeah. that story has a way, yeah. and then you look at what you're getting for corporate debt and

junk bonds. planes and other equities. >> the premium has come back compared to a year ago. today, that story isn't the same. the second condition, which i think is interesting, is what we're hearing out of china now. really, over the last two to three years. yes, reform means a lot of corporates have to rise up, international accounting standards, demands many cleaner accounts, better cash flow characteristics, dividend payments to global investments.

but that is a cheap market. and if china begins to glourish, i think a lot comes around that and i think the asian diet is going to be very interesting in the next three months. >> all right. stay with us. every week, as well, cnbc is asking you to talk the trend by taking part in our online poll. this week with u.s. equities at record highs, we're asking where are you investing? u.s., european or asian stocks? none of them? head to traderpoll.cnbc.com, cast your vote. have your say on twitter using #traderpoll. talking about carl icahn, he's dropping plans about his plans for apple saying he doesn't want to fight with the ceo tim cook but has no plans to walk away from his investment, either. icahn is urging apple to buy back $150 billion in shares. he says he and cook are friendly, but says apple is not a bank and should not be run like a bank because investors doont invest in a bank.

some do. apple has all the money and they should be using it. >> he says he doesn't like apple investors metaling in the affairs of a company's management. >> usually, in my relationship with management, i defer to management and really and the objective is -- and having a shared back bye program or dividends or etcetera. public appearance is not something i follow. >> meanwhile, he says the real estate in the middle east is popular. the prince is still involved in news corp. and citigroup. tim, where do you stand on the activist versus not activist? >> oh, they pop up when things

are looking on the rosy side, so they're quite a good current indicator. i won't say lead indicator. right now, that tells you that market conditions are such that they can bite that cherry and there are always inefficient companies. so always underperforming companies and there are always companies that need to boost up -- >> there's a point about giving shareholders back money. it's been a big drive, a share buyback and now do investors want more cash or do they want -- because they wanted more cash out of companies. what do they want now? do they want to invest it or say no? >> ex investors are always going to be reinvestors. it's a very, very good point that appear sl a company which dilutes shareholder returns. which has the opportunity to go out and do chunky sized

acquisitions. but i'm not sure apple is about doing chunky sized acquisitions. it is a headwind to -- in terms of shareholder value, realizing that for shareholders. if you redistribute that to shareholders and say you guys, you can get a return on investment better than we can. from that, go in and invest it practically, as we do. you can grow and find officially this in the bank earning 1.5% in a good day, then i'm all for that. >> okay. good. inflows rose in october to more than $8 billion adding to steady annual gapes since march. more fund money is being put to work in the services sector as opposed to manufacturing. but the paper delay may have encouraged foreign central banks to stock up on longer term u.s. treasuries. in september, japan and china both added to their purchases to

the tune of nearly $56 billion. japan's treasury holdings are near the highest on record but china is still the top holder of u.s. debt. and according to the u.s. treasury, investors loved and hated u.s. assets in september. head to our website to find out exactly what they bought and follow us on twitter, @cnbcworld. stim, they upped their stakes in treasury holding. bad idea? >> good idea. what we mustn't lose sight of, ross, so much of central bank purchases of u.s. debt is the recycling of the current account of their respective nations through their foreign accounts. this tells you that in open trade for the world, they are competitive. the last thing the chinese want to do is raise the value of their currency. they're going to continue to recycle. japan, we know japan this year

has been a weaker yen with abe nomics and one manifestation of that has been the recycling of yen into u.s. treasuries. but this ain't going away in a blink. >> very briefly, treasury risk them going higher or do they become a -- >> when you're recycling flows suches as that, clearly you care, but it's much more a strategic central bank action. i think the risk is still the upside for all the reasons we know, taper. >> okay. i'll get your thoughts on one more thing. meanwhile, dropped almost 30% after touched a record high of $900 before rebound to go around 750. the value of bitcoin has surged yesterday. the u.s. senate risk risks the merit to the open currency. ben bernanke acknowledged the merit of central currencies, but has raised concerns over how the market will be regulated. the value of the bitcoin surged in the area of 5,000% this year

with some showing it valued in excess of $800. i don't know whether you know this, ben, but selfie was named oxford's word of the year. it's defined by the dictionary as a photo taken of one's self, typically with a smartphone, a web cam and uploaded to a social media site. even michelle obama and the pope took self-fys. runners up for the word including twerk and binge worth. what do you think? personally, i always thought that's what the photocopier was for at the office parties. you see, i thought that was the original selfie, wasn't it? >> well, it depends -- i don't know. i'm not going for the photocopy story.

>> we've just upgraded it for the -- well, i guess vincent van gogh. >> it took a little longer. for having watched my kids on vacation, you take a selfie and now you accepted it to all your mates by that medium that we're not allowed to mention and that seems to be taking off everywhere. good for them. >> yeah. actually, i know where the market opportunity here is. it's clearly they need better lighting and makeup and, you know, add all those add-ones for selfishes. here, take a portable little studio with you. >> you're plugging your thoughts already, aren't you? >> good stuff. tim harris, that you cnk you ve. we'll get some stock picks in the pharmacy sector. find out why our guest says

middle eastern hospital res top conviction buys. we'll get into making our own computer. apparently i'm going to be trying to make my own computer. i'll be sending it right here in the studio. that starts at 10:40. i'm not sure when it will finish. may take a little while. also, we'll hear why the banker of the year thinks scandinavian banks have weathered the financial crisis better than others. and as microsoft shareholders gather in bell view, wall perceived as obama aft last ha-rah, we'll find out why an inside candidate might be the front-runner for the ceo job. and before all of that, we'll talk to an airline expert to get his take on the dubai show and the rising importance as easyjet records a big jump in profit.

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we have some comments out from the u.n.

to achieve full interest rate liberalization in the media term is what their aim is. it will quicken the pace of the renminbi, but it will be a graut gradual process. easyjet shares are rallying pretty hard. this is after the low cost carrier reported a 51% jump in full year target. it said it plans to return 175 million pounds to shareholders through a special dividend of 44.1 pence per share. union groups for air italia have been preparing for a fight should plans come into action. boeing has boosted by record

orders at the event. boeing has maintained a slight edge over its european rival after emirates placed a order for new 777 mini airbuses in a deal. john strickland is director at jls consulting is and joins us for more. good to see you, john. it's easy. is it giving an advance in overriding? and if so, why? >> i think the key thing is they both have very different business models. it's not really a case of either/or, but there's room for both to succeed. easyjet focuses mainly on primary airports. that's why business travel where they offer competitive pricing, expectative frequencies. ryan air seems to be move focused on secondary airports, although we see recently changed in the approach to win more business traffic. we need to recognize both

carries atone for 5% of the market each. >> because ryan air earlier this month cut its annual profit for the second time in two months, admitted it needed to improve customer service. saying we're looking for organic growth, they're buying more jets, they're going to expand bases in naples, for example. it's a slightly different picture. >> yeah. >> why is that? >> i think ryan air is very much on the back of on an speshthed poor winter now. sta scanned flaf nave scann they want to put pressure on weaker competitors.

so they have a different focus in the short-term. but i think next year we'll see ryan air's profit start to grow again. easyjet is in a more favorable position. they've got the business traffic. >> legacy carrier ves cut their costs. how easy is it to do allocated seating? it seems as though we have to focus on service, not just cost. >> they said today that's given a rise in unit revenues. we're prepared to pay more and it's going to take you further. they're now going to do variable seating. so they won't be paying a standard price. but even ryan air now said they're going to bring it in. with recognition, people don't want the jostling or pushing on the plane. if that can be done, and these airlines will depend on it to have higher productivity, then

it's a win-win for both. >> we have news coming out of alitalia. center italian officials says the government has talked to important investment funds from united arab emirates about investment in italy. how big is the challenge facing alitalia? >> i think this has gone on for years. four or five years ago when berlusconi came to power, he made an election plague to save alitalia. we just heard from france klm, already a minority and indeed the key industrial shareholders. the company doesn't want to take part in a capital increase. the company is going to substantially reduce in size if not disappear completely at some point. it's a question of whether they can now get another investor.

>> of course, in dubai, they're building a new airport. heathrow is the biggest int international hup hub in the world. can they do that? >> in a matter of month, dubai will overtake each other for the largest in the world in terms of international traffic. but if we look at the growth, they're in exactly the right part of the world. that trend is going to continue. the evidence is there. while there may be a great deal of unease on the part of

european and american carriers, the geography doesn't make sense so they can't tap into this market. >> john, thank you. if you've got any thoughts or comments about anything we're discussing today, please get in touch with us. e-mail us, worldwide@cnbc.com or direct to me @rosswestgate. still to come, prescription for investor success as global health care is sending its debt to soar, jeffries joinsous set to talk pharma market trends and the companies he thinks are going to do better than the rest. new fedex one rate you can fill that box and pay one flat rate. how naughty was he? oh boy... [ male announcer ] fedex one rate. simple, flat rate shipping with the reliability of fedex.

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and the headlines from around the globe, stocks in europe fall wile waiting for zew results out of germany. carl icahn takes some of the wind out of wall street sales says there's a chance the market could be set for a big drop. but it's clear skies for easyjet. the uk budget airline outshined rival wes a jump in full year profit. it's proposed a special dividend, as well, for shareholders. and european car sales continue to rebound.

renault leads the way for mass producers. mercedes and daimler gain ground on its luxury peers. european equity res down today. it's off 0.5%. the xetra dax down 0.3%. cac 40 down 0.7% and the ftse mib is down 0.3%. on bond markets, yields are lower -- well, slightly higher, actually. ten-year treasury yields, 2.68%, lower than where we were this time yesterday. on the currency market, the dollar has been somewhat hemmed in as we wait for confirmation of the janet yellen fed president role at a senate congressional hearing. dollar/yen is currently just below 100. euro/dollar, just above 1.35.

new war registrations from europe have risen for the first time since october. stephane has more for us in paris. stephane, renault is not doing too badly. >> i think it's the best performer on the cac 40, indeed. on the back of strong numbers from september, renault increased by 14% with new car registrations. thanks to the success of its mini suv to its low cost car. 2.6% increase in germany, 4% in the uk and 34% expansion of the spanish car sector in the months of october. on the other hand, peugeot had a

disappointing september in terms of new car registrations. peugeot aet's market share fell to 11% on the first ten months of this year to compare with 11.8% a year ago. after months of decline, peugeot has lost its summit at the largest french carmaker which now belongs to renault. renault is the top gainer on the cac 40. >> stephane, thanks very much, indeed, for that. we have a statement out from the current chairman of co-op has stepped down following the revelation surrounding paul flowers, the former chair of the bank who was reported formerly buying drug and now the new chair of the banking arm has basically come out and essentially said in the -- this is a steemt from mr. wardall who has resigned. he said the recent revelations

about the behavior of paul flowers have raised a number of questions for the bank. i i feel that it's right i step down now ahead of my planned retirement in may next year. there is now going to be a review of the co-op led by the new chair to handle tin inquiry of what went wrong. that story continues to rumble on. away from the co-op, food and pharma dsm plans to spin off its pharmaceuticals division with firm jll. it is expected to have annual sales around $2 billion. the dutch company had been seeking a partner to help expand its pharmaceutical operations, especially in asia.

there's the stock, up 3% in amsterdam. global spending on prescription medications is set to rocket next year as they exceed $1 trillion for the first time according to the ims institute for health care. the annual review indicates the period is set for a period of growth after a number of drug patents in china expired. what is the perfect prescription for investors to take advantage of this spending? joining us is ingabor uead. i am not terribly good with pronounceati pronounceations. nice to see you. thanks for joining us.

you have your big jeffries conference coming up. how big does this chime with what your thoughts are. >> it's an interesting time tuk about health care. health care has had a phenomenal run share price performancewise. these bear markets and recovery we've come out with we've seen health care outperformance and markets and extend that we haven't seen in past markets. >> and the bear markets in pharma stocks have been pretty deep, right? >> absolutely. feeling that we've gone through the -- >> we've gone through the bottom of it? >> so the bottom of it we've seen and now we're start to go look at the price lines again. so it's a very interesting time. if we look at the conference we're hosting this week, we're

expecting thousands of people to attend. >> what are they looking for? i've had the view that the biggest pharma companies in a way have gotten too big. i can't make buying the blockbuster drug to justify the size of the company and the value that it's put on them. >> what we've seen is that income investors have been buying into the pharma costs over the last couple of years because it's been the yields which have been attracting them rather than the ability to grow the bottom line. now we're seeing a bit of a retraction. it's not really related to whether the drug market is going to become a $1 trillion market or not. >> but there are some stocks you think are worth looking at in the big cap size. run us through two.

>> so having seen this big run that the sector has had, we're start to go look more at where is the value now. and smith & nephew and fresenius are trading at low valuations because it's not been the sexy story people have been particularly investing in. we feel that these stocks have been left a bit behind. valuations are attractive. we should see good growth. and investors have some misconceptions about what is really the key concerns there. so smith & nephew, people think this is an orthopedics company. >> medical devices business, right? >> segment. they have some interesting products in key growth areas in wound care, in sports medicine, which people are kind of moving into the same basket as orthopedics. >> now, the problem with investors having misconceptions, misconceptions can stay around

for a very, very long time. but the rest of the market has to acknowledge it and it may not. so how much does that 20% increase in your health care conference go some ways to saying people are discovering this story? >> that's a very good question. the challenges, of course, investors are really looking for place toes put their money because there are so many things that have gone up. and we're seeing more people saying, it's worth having a stock that underperformed the market and if that's where we should now be looking. i think that's a trigger for looking at more of these stocks. >> the other area is middle eastern hospitals listed on the london stock exchange, mmc health. why is that so interesting? >> that is a structural story. we've seen in the emerging markets, the governments are turning to the private sector to

built the infrastructure that they need. in the uae, which is where they are waiting, there is the highest rates of ibt in the world. big problems with obesity. for those building with the group of people who really need health care, private sector is seen as solutions to that. these two companies have the capital to invest and the growth rates they're expecting are close to 20% on the top line over the next couple of years, driven by the fundamentals of the market. >> good to see you. thanks so much indeed for joining us. have a good conference, as well. >> thank you very much. >> joining us from jeffries. now, fake japanese products are becoming increasingly overseas, threatening the integrity of the japanese brand. fukisho is joining us from tokyo. >> hi, ross. a survey by the eacds made fullwide losses the trading

comes to $246 billion. japanese carmakers told the nikkei that many cars without brand logos are imported from china into dubai. those no brand cars are transformed into japanese branded cars by putting fake logos on them. those fake cars are shipping to neighboring countries. home appliances are big sellers in the recovering nation. a hitachi sales agent says business there isn't viable because there too many fake products. since myanmar does not have laws protecting trademark and designs, honda officials say they can never be sure whether they can win a lawsuit in the future in this situation. the japanese government, in trying to eliminate fake products by pressing other governments, but so far there's been little success. ross, back to you. >> thanks for that. have a good evening.

>> the aud australian dollar got a lift. mining investment has slowed more than expected in their november meeting. they also cited a stocked labor market and consistently high exchange rate. for those reasons, the central bank isn't yet moving out further rate cuts. it can be hard to say i'm sorry. australia's prime minister is finding that out in an alleged spying scandal with indonesia. tony abbott says he regrets causing any embarrassment to the indonesian president. leaked documents claim the phone conversation were tapped by australian intelligence. they have pulled their ambassador demanding a straight apology. but abbott says he shouldn't apologize for steps taken to protect australia. meanwhile, australian athletes have come under criticism from their olympic movement. they've now brought in new

guidelines, apparently, to suggest when they get drunk, they should avoid staggering, making loud noises or anything else. this comes after apparently in the london olympics last year those athletes who had completed their sports went out, and had a little bit of party, came back and disturbed their fellow athletes. now the australian olympic committee has brought in new controls to what happens when they get drunk. good luck with that. they had they also suspended six players from overdrinking before the irish game which they won on the weekend. scott will be happy because that team will play in scotland this weekend. in asia tomorrow, economists expect a big jump in japanese exports in october, which is

likely to narrow the trade deficit. bank of japan begins their two-day policy meeting and it's a light day for corporate earnings. we may get an australia drink shock headline, as well. meanwhile, the had a spanish auction which has come out, as well, and the six, 12-month t-bill that we've seen, not too bad, effectively. the average yield for 12 months, 0.678%. it was lower than the 0.9% in the previous auction and the six-month average yield 0.494% versus 0.672 in the previous auction. so they still continue to go lower, those yields. still no concerns, really. meanwhile, when it comes to diy, we're more than happy to turn our hands to constructing our furniture. who does that is in the?

knitting a sweater? would does that? or attempting mechanicses on our cars? who does that? but how about building a new computer? the cofounder of kano joins me on set and apparently i'm going to be challenged to build a computer during the interview. what could possibly go wrong? you really love, what would you do?" ♪ [ woman ] i'd be a writer. [ man ] i'd be a baker. [ woman ] i wanna be a pie maker. [ man ] i wanna be a pilot. [ woman ] i'd be an architect. what if i told you someone could pay you and what if that person were you? ♪ when you think about it, isn't that what retirement should be, paying ourselves to do what we love? ♪

now, how well do you really know how your computer works? when it comes to diy, we're adept at putting plenty of things together, but today a new company is launching a build your own pc and the team behind the $99 computing kit says it contains everything you need to make a computer and it's as simple as lego. apparently. joining us is aaxle cline, go founder. >> wow, axle is an amazing nickname for me. >> did i say that? >> yes. >> i'm sorry. it's actually alex. >> i would join a motorcycle gang. but yes, thank you so much for having me. >> alex, thank you very much. i also feel under pressure now. >> you feel under pressure? >> i'm apparently going to build

one, as well. let me hold this up. this is your kit. >> yes. so this is the kano. it's the first computer you can make yourself. it's simple and fun and plug and play. we've spent the last year going around the world, talking to hundreds of kids, students, teachers, and they've been building the prototype. >> why? what is the need in the market i think you're going to fulfill? >> i would expect that you have one of these. and it's an amazing time to be alive. 275 billion of us have computers in our pocket, we can get internet almost everywhere. the problem is, we have absolutely no idea what goes on under the surface. that's a big problem because the expressive medium of the future is technology. by locking people out, we're fought giving them the chance they would want. >> amlex, you've lost your mike

somewhere in your xiempt to build this computer. okay. look, behind the box. there. you see, when i open anything and i've got all -- what's all this? >> so in there, you have two project books and they're simple steps in their story telling, a bit like a lego book. but if you open it up, the first line of the book is this is your little computer. it looks a bit complicated, but you can make it yourself and you use all this power. >> can you make yourself? while we do this interview? >> yeah. the notion behind this is 99% if not more of the world's technology is designed by and for a very small fraction of people who mostly live here in london or in silicone valley. and we have lots of great off the shelf devices, you know, facebook machines, pin treft

platforms. but this amazing human accelerator, the computer, hasn't been put to use in all its creative capacities because people are afraid. >> i can't get the lead out of this thing. what the is that inspect. >> that's the speaker. >> can i -- >> as we say, it's your computer, you can make it however you want. >> i'm making it how you told me in the instructions. >> so you can start with the power, which is this. >> but it doesn't say that in the instructions. it says put the speaker in. okay. the power. where is that? >> if you look on page 4 of the book, you put some power in, plug your usb charger in the wall. >> hang on, hang on. >> so now on the cnbc set, i'm going to try to find some power. >> you do yours.

you're not going to find any power here. >> oh, easy. in that case, we can put all the pieces together and get it ready. >> okay. fine. i've done that. >> and light it up sort of like a frnken stein monster at the end. but it's meant to be accessible to everyone all over the world. we're releasing the contents in spanish, arabic, hin did i and mandarin. you got it. congratulations. there you go. now you're going to power it up with wireless. we've created an auto configuration wireless power for this computer. by the end of hopefully a productive few minutes, what we find is -- >> where did you get that from? >> the case. do you want it? we only have one prototype and that's why -- >> you're going to be the quick. >> we're going to kick start it because we want to make more of these. we're setting a funding goal of $100,000 and we're hoping people

will come out and support this because it's a computer that truly anyone can make given a little bit of time. and once you've made it, it's really up to you to control what it does. you can go on the internet, play and hack games, code music with a digital synthesizer. >> by learning this, you learn how computers work and then you're ready for the 21st century. is that the idea? >> that is the idea, yeah. >> the age that you're in. and it's not necessarily about making sure everyone in the world becomes a computer scienti scientist. it's a way of giving normal people a way of taking control of the world behind them which in some ways we've been locked out. >> how do you plug the keypad in? >> it's wireless, actually. >> so that's easy. >> so you basically take out the middle usb at the end, right here is the software, games, project, levels, dozens and dozens of hours of fun and learning in school or at home.

the wi-fi, in it goes. in goes the power. and then i'll unwrap this beautiful hdmi cable and plug it into here and if we can get power, i will be able to bring a computer to life on this screen. >> we aren't -- i'll tell you what we're going to do. we'll work out a plug to power that in. this is where i'm at at the moment. where are you at? just show me what you've got. hold it up. >> i'm here. i've got a computer with a brain, memory, wireless. >> i'm nearly there. give me a couple of minutes. >> of course. >> we'll find some power to plug that in and once we do that, let's go to annette. she's talking about sec and the ceo she's speaking to. annette, give me a few minutes. we'll talk about that and when you come back, i'll see if i can start my computer. >> i can tell you what happened this morning in frankfurt. we have the chief economist of

the european central bank giving us an update about his take on the economy. it didn't sound a lot different than mario draghi's comments earlier this month. there was a concern of cyclical upswing and at the same time we see moderate and even fragile growth. we are seen still continued deterioration and credit growth to the private sector which is a major concern to the ecb. the rates cuts were sduns discuss discuss discussed with that, ross, back to you. >> annette, thanks for that. i'm sorry, i'm a little bit lost at the moment bauts because i've trying to work out -- we have

power for you. right? >> so we now have a red light. hopefully we'll be able to see this come to life. the cnbc screen is -- >> if anybody has a remote to change the right channel -- >> it needs to be on hdmi and you should be on the screen -- >> 20 seconds to find that. >> let's see. >> ross. >> okay. well, while this is a computer that anyone can make and it's quite simple, this is a tv that perhaps not everyone can figure out. oh, here we go. >> we'll keep our eyes on that. alex -- it works! >> viola. >> keep your images on that. the second hour of "worldwide exchange" coming up.

you're watching "worldwide exchange." i'm ross westgate. the headlines from around the globe today, stocks in europe fall with investors awaiting the zew read now and ben bernanke's speech this evening for clues on the future direction of monetary policy. this after carl icahn takes some of the wind out of wall street's sails saying there's a chance the market could be set for a big drop. >> but it's clear skies ahead for easyjet. the airline outshining rivals for a full year profit proposing

a special dividend to shareholders. zew economic expectations, 51.6% versus 52.8% in october. 28.7 versus 29.7 in october. so the expectations were forecast at 55. there's a little bit weaker than we might have thought, but they are still the highest since october 2009. a jump up, not quite the level that we were expecting. at the same time, the oecd believes the global recovery is likely to pick up further next year and in 2015. but believes policy needs to address downside risks. in its latest economic outlook, the group has significantly lowered its growth forecast for

this year and next, citing the slowdown in emerging markets and the reaction to the announcement of the fed tapering. the oecd secretary general spoke to cnbc earlier and gave his take on the fed's easing mon policy and the pending appointment of new fed chair janet yellen. >> i think she makes a lot of sense. she's a good communicator and she -- i think helps people understand what is indeed a very complex tradeoff and accomplished situation. they have been supporting the economy by keep interest rates low and then by going and buying the debt. you cannot imagine this

situation and buying 1 trillion worth of debt or mortgage every year could last forever because, you know, you cannot be infla inflating the fed's balance sheet at a trillion per year forever. the other thing is, it was predictable and in a way desirable that they stop doing this because we're back to normality. >> mean wile, u.s. futures are still a bit lower this morning. this is after the dow yesterday was up, what, some 14 points above 16,000. right now, futures are 20 points below fair value. the nasdaq is 3 points below fair value. the s&p down yesterday post comments by carl icahn. at the moment, it's around 32 points below fair value. the markets could be in for a big drop according to carl

icahn. he said valuations are rich and earnings are being fueled more by low borrowing costs than efforts to boost results. on his website, he elaborated further saying while he's concern about market levels, it's almost impossible to predict what will happen in the short-term, therefore at times like this, he hedges investment toes some extent. icahn says picking short-term moves in the market is like predicting how many sevens the holt h hot dice player will continue to roll. as far as the cnbc ftse global 300 is concerned, we are down 0.2% and european equities are up, as well. currently off 37 points. 0.5% lower for the xetra dax, cac 40 is 0.8% lower. the ftse mib off 0.5%, as well. treasury yields, we saw dipping

down yesterday on the ten year below 2.7% and 2.86% yielding around 2.71 this time yesterday. right now, euro/dollar, back below that 100, haven't been playing the break in cable just shy of 1.61. that's the european session two hours into the trading day. >> thank you, ross. it's a mixed batch for markets. the nikkei 225 saw some profit taking down 0.25% after the 2.2% gain last week. the dollar/yen weakens the trade below the is 100 levels adding pressure to the sensitive exporter stocks. meanwhile, australia fell for the second session down 0.6% as the rba says existing cuts are

working, but keep the door open for more. china markets pulled back a bit, down 0.2% after yesterday's strong gains. banking shares came under pressure on fears that the country's financial reforms and interest rate liberalization will squeeze interest rate markets for lenders. but h-shares, which are hong kong listed lent support to the hang seng index on those reform hopes. shares managed and added a two-week high with automakers and financials leading the gains. in terms of sectors, some of these media stocks outperformed our reports that beijing will mix media and entertainment, a biller industry support this year so encouraging more private enterprises to develop and extend that industry. a few stocks surged almost limit up by 10%. investors looked at the asian mark markets. back to you, ross. >> thank you very much indeed for that, sixuan been richard,

good to see you. thanks very much indeed for joining us. >> thank you. >> i don't know if you saw the previous slot. i was building a computer. >> i was impressed. mine is not quite as impressive as the one that alex made, but he designed it. >> how are you folks going to deal with it? >> from what you've been hitting all morning, short-term is easy to call for a correction. most people have been doing that all year. >> as is mr. icahn. >> and yet had he stayed invested all year, he would have done much better broadly.

>> is there a difference between the valuation inspect. >> the answer is yes. the trick is fair value to overshooting and undershooting. markets use fair value as a proxy to feel good. yet, when they're euphoric and hot, we came in for this year writing the science we thought this was the year for rationale exuberan exuberance. so midcap, small cap expensive. probably stay that way. we're rotating out of it because we think it's overplayed. most people are looking at the international trade. >> one could look at the economic numbers here and say,

well, maybe the cyclical play in europe is already sort of rolling over a little bit. i know the ecb is cutting rates. but do investors care about the economics when they're investing in stocks? >> fundamentally at heart, i care a lot about what drives the opportunity set. markets tend to like stories. the fundamental issues, we've had three years of negative earnings in europe, so a cheap valuation has been a value trap. that's shifting. and someone had asked me, richard, you guys sound very excited about europe and european markets right now. i said excitement with a small e. the delta from negative growth to positive growth on the economic front with operating leverage in margins that can recover can get you 6% plus in growth and earnings. >> we'll get 1%. by the way, you're going to cap out there because your banks still haven't recapitalized. you see some credit extension.

but from negative 1% to 1% is enough to reengage the private sector. the story is what is attracting people outside of europe, they're hoping it is going to take four years to make up our two years. >> we could -- yes, we could. >> okay. more from richard from jpmorgan private bank. every week, cnbc is asking you to talk the trend, as well, by taking part in our online poll. this week, we're asking you where are you investing? head to traderpoll.com to cast your vote. you can have your say, as well, on twitter by using #traderpoll.

elsewhere, bitcoin drops today after touching a record high. the val of bitcoin has surged to a new high as the u.s. senate hearing assesses the merit of virtual currency. federal chairman ben bernanke acknowledged the merit of virtual currencies but has raised concerns over how the market will be regulated. the value of bitcoin has surged in the region of 5,000% this year with some exchanges showing values in excess of $800. and selfie was named word of the year by oxford dictionaries with its frequency of use increasing by 17,000 percent in 2013. it is defined by the dictionary as a photo taken of one's self typically with a smartphone or web cam and uploaded to a social media site. i was thinking more of a photocopier of the christmas party, but anyway, even michelle obama, i think that was the original selfie.

even michelle obama and the pope took selfies this year. runners up include the work twerk and bingwatch. i wonder if that's related to food rather than drink. richard, do you have children? >> 15-year-old twins. >> they're selfies -- >> not twerking, as well, i hope. >> anyway, what do you think should be the word of the year? join the conversation on "worldwide exchange." get in touch with us. e-mail us, worldwide@cnbc.com. tweet @cnbcwex or direct to me @rosswestgate. take a picture of yourself and post it. that seems the be the thing to do. hi honey, did you get the toaster cozy?

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the oecd cuts its global forecast citing weakness in emerging markets. stocks in europe fall with investors anxiously awaiting to hear from ben bernanke tonight. and billionaire investor carl icahn sounds alarm bells saying the good times could soon be over.

the senate banking committee is set to meet on thursday to vote on janet yellen's nomination. if approved, they would send her nomination on for full consideration. yellen will only need five republican votes to overcome any problem procedural hurdle. jpmorgan and the u.s. government have reportly agreed to terms of the $13 billion settlement. the deal is expected to be announced later today as part of the settlement, jpmorgan will create a $4 billion consumer mortgage relief fund which will pay for write-downs on loans, demolition of homes in blighted neighborhoods and regulation of homeowners. the bank stock is bucking the

trend today, up 1.5% in frankfurt. meanwhile, banks in the eurozone will be allowed to dodge the complex definition for bad loans when they go through their stress tests next year. the ecb says banks will be able to use simple definitions to submit data, instead. but when the final data gathered is assessed, the full definition for bad loans will be used. and staying with banks, sweden's based seb says while 2013 was not as strong as she would have liked next year, we could see a little growth. annette joins us from the forum in frankfurt with more. annette, the good news, i finish the computer. >> very, very good, ross. well, and my good news is that the annika, the ceo of sab was the first woman who was award the prize of being the first european banker of the year and

she has steered her bank quite stable and steadily through the crisis and has an impressive track record of getting banks through worst crisis which has seen since the second world war. take a listen to what she had to say about growth outlook in the eurozone and about her bank being dependent, as well, on the european neighbors. >> we cover mainly german large corporates and they, of course, not only grow in the eurozone, they have a lot of business in asia why and also in the united states. and i think if you look at the world today, you can say slowly but steadily getting out of the crisis, asia is growing. you can find pockets of growth at the moment.

>> are you planning on increasing your dividend payout which a lot of investors would like you to do? >> it's a bit premature yet. and we have higher capital ratios than the rest of europe. we can see how well we are doing and what it looks like and we are coming back to running dividends in the area. >> looking a bit ahead, 2013 was a so-so year. what are you thinking about 2014? what is your forecast in terms of business development? >> i think it was a year ago that we thought that 2013 would be better. and 2013 mainly -- yield. i think we are looking a little bit more optimistic regarding next year, hoping for a little bit of growth. so from that perspective, we hope we will see likely more talent and nofg crisis behind us. >> and later on today, we have panel here in frankfurt on the

banking restructuring where the ecb will be participating. so we'll have a lot of opportunity, at least to try to speak to these very important people. with that, ross wg, back to you. >> annette, thanks for that. >> i think as confused with regard to how quickly this gets resolved. and for better and worse, while the u.s. took the heat of the financial crisis head on, we very aggressively recapitalize banks. .i think the perspective outside looking into europe, you are going to take in on a protracted basis, so it will drive on for

another 12 months or so. but what you're going to see i think sassette die investment, disinvestment from the banks and a lack of credit extension. and i'm not word about the collapse of the banking system. large pockets of europe will nationalize. >> the lack of credit sxajz does what? that doesn't feed into a technical recovery. >> no. but you mentioned icahn and the timing of investments. what are markets worried about right now it's reflecting marketzation. europe is normally the delta between a negative 1% and a positive 1%. then you pop out to a cyclical trade. 24? i don't know.

>> more to come from you for the rest of the show. also still to come, dan loeb has gone long on nokia. but is the company's decision to hang up on its mobile unit into the firm? we'll preview it after this. opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances. 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. [ driver ] and it got his okay on treatment from miles away. it even pulled strings with the stoplights. my ambulance talks with smoke alarms

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shareholders would be asked

to approve the sales of the struggling group nokia to microsoft. joining us with his thoughts, james coalshaw from s&p capital iq. james, good to see you. nokia agreed to selling the hand set business to microsoft. so that leaves the network division. what are we left with? >> we're left with a network business which is the third largest globally. and then also a small sideline in mapping content. and there's a portfolio year looking to more advertise more aggressively going forward. >> you see network sales stabilized next year with market growth thereafter. what is reflected in the value of the stock? >> well, i mean, the performance of the networks division over the last year or so has been a

remarkable turn around. and, really, what is reflected in the stock is that nokia networks used to be -- continues to be a profitable business. i think there's a fair amount of expectation about this portfolio currently bringing in 500 million euros a year in profit. there's some expectation that that could be increased after the disposal of the hand set business. nokia will be freed up from a lot of bilateral agreements. >> how much shock do you think there is in finland at the sale of the business and at one point nokia would finish gdp. it was a brand of finland. >> well, i can't speak on behalf of the people, but finally pragmatic and it's been a huge blow for their psyche. but they're getting over et.

and then they're looking to the future. >> how do they compete with ericsson and wheywei? >> i think they compete pretty well. the great change over the last ten or so years in the infrastructure mobile business has been the interest of the chinese players. initially they were not regarded as very strong players, technically. but i think they've been proven over the last ten years that they have some market strategy. nokia made some head way in the united states with the acquisition of sprint. >> eric soon, they are the number one player in that

market. they don't tend to give a lot of forward guidance, but their tone recently has been slightly more cautious. there might be some scope for recovery on the mobile phone in europe. vodafone has had recent projects where they're looking to accelerate cap ex. maybe europe is slightly improving. north america slightly weakening. globally, the mobile infrastructure market is probably fairly flat. >> james, thanks for that. still to come, we'll turn our attention from nokia to microsoft. who is going to make the cut? 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.

welcome to "worldwide exchange." i'm ross westgate. the oecd cuts 2014 growth outlook for next year.

global recovery is still lagging. >> what you have is world economy that is today going at top speed and we can't really get it on second gear. >> stocks in europe still in the red after germany's zew jumped to four year highs. this after carl icahn takes some of the wind out of wall street sales. but it is clear skies for easyjet, the uk pujt airline outshining rivals after a 51% jump in full year profit proposing a special dividend for shareholders. the dow breached the 16,000 mark yesterday. the s&p falling a bit at the end

of the stage on the carl icahn moments. right now, as far as u.s. futures are indicating, reduced, lower this morning. the s&p currently trading some 3.5 points below fair value. the nasdaq at the moment is 5 points below fair value and the dow at the moment is some 17 points below fair value. so not huge deep down. the european equity b have been softer this morning. . the xetra dax is off 0.5%. the cac 40 is down about 1% and italy down around 0.75%, as well. meanwhile, plenty of focus of course on what people have been saying. the oecd believes the global recovery is likely to pick up further next year and in 2015. although it says policy needs to address downside risks. and its latest economic outlook, the group has loertd its growth forecast for this year and next, citing a slowdown in emerging

markets, and expectation the fed is tapering. the secretary general spoke to cnbc's first off the back of that report. we also asked him to weigh in on the nomination of janet yellen for the fed championship. >> i think she makes a lot of sense. she's a good communicator and she -- i think helps people understand what is indeed a very complex tradeoff and complex situation. but there are a number of things about so-called tapering. it means they have been supporting the united states economy and by doing that the rest of the world economy. by keeping interest rates low, first as a policy and then by going and buying the debt. okay? but you cannot imagine that this situation, buying 1 trillion worth of -- 1 trillion worth of debt or mortgage every year could last forever because, you

know, you cannot be inflating the fed's balance sheet at a trillion per year forever. and the other thing is, it was predictable, it was inevitable, and in a way desirable that they stop doing this because it means we're back to normality. >> now, mobility, meanwhile, is the name of the game for the telco stock which is holding its new products and attendees. josh lipton is at the conference and has more in this report. >> we're here at dream force, which is build as the biggest cloud computing party on the planet. they're here to network, to party, to listen to a who's who of silicone valley. yahoo!'s marissa mayer, sean

penn, alec baldwin and rock band's like green day all this a clear shot at rival oracle and its big event in san francisco. the two have been bitter rivals in the past, but are now partners. so sales force is not really seen as a poster for the cloud. sales recording wanted to turn in an eps. dream force, though, was the news yesterday. today, it's all about microsoft and that shareholder meeting. analysts and investors will be looking to see if we get any more insight and clarity about that ongoing ceo search. josh lipton, cnbc, san francisco. joining us for more is

daniel ives. daniel, good to see you. a lot of people look at sales force's growth, revenue or profits doing much better than oracle. they say they have a better business model. does that actually stack up in the long run? because oracle is still a big beast. >> yeah. at this point, sales force has proven again and again. oracle has work cut out for him specifically o cloud and i think it speaks to where guys like oracle and microsoft are going towards the cloud. that's where the growth is.. sales force has had the first mover advantage and now the key question is going forward, the success these companies have in the cloud. >> yeah. microsoft, you mentioned it's growth in the cloud. how big of a potential threat have they focused on that? >> that's kind of big the rock of gibraltar through microsoft.

the head kinds have been massive. the success has been in cloud. that's where they've found sort of secret sauce. i think as they put more resources into that, especially with a new ceo and some acquisitions, i think microsoft is going to become a bigger and bigger threat on the cloud and i think some vendors out there are listening. i think microsoft may sell off chunks of business either the xbox or the enterprise to see -- i mean, is everything said to be up for grabs for whoever becomes the new ceo? >> yeah. i think it's a clean is sheet of paper. the white boards clean what they can do. at this point, shareholders have been very frustrated. looking for a new ceo that's going to change things up. again, does the entertainment division make sense being at microsoft? it takes away resources. i think a break-up and/or potential selling off pieces of businesses are definitely potentially in the mix. and then that goes to who the next ceo is.

because, again, the status quo is not going to be, you know, satisfying investors. investors want an innovator, someone who is going to take this company back to seeing more growth than we've seen over the last few years. and, obviously, it's been very disappointing in terms of what they put on the top line. >> do you still think that mulally is the front-runner? is he still the best candidate as far as you're concerned? in my opinion, he's the clear best candidate. i mean, the turn around is what he's done for, you know, boeing. and, again, he's kind of what investors are looking for in terms of also bringing in an outsider. investors don't want the status quo insider that's going to continue to go down this path. they want to -- the vision that could definitely, i think, change the direction of microsoft, mulally in our opinion is that guy. obviously, elop starts to be

another front-runner given his experience in microsoft as well as nokia. but mulally is the one incident vesters cheer and want the horse to bet on here. >> daniel, this is rich afterward. i have a quick question for you. we've talked a lot about the cloud. higher levels for the industry, but we're not seeing the capital internet temperature and development. what's the upside if growth continues to move forward for the sector and the industry? >> well, i think it's been a bipolar industry, right, where you have the cap ex has been soft. you have a 1% to 2% iq spending environment. i think cloud is really the catalyst as you see more e enterprises going in that direction. that's why sales for has proven it, work day is another one. now it's oracle, microsoft, emc

where cisco, you could argue, that everyone is looking at, you know, where the growth opportunities are. and, again, i think it's ultimately going to translate into a massive m&a cycle as more of these companies look to get a piece of that cloud growth in a real tough i.t. spending environment. >> daniel, thanks for that. daniel ives. more to come from richard. as we've been saying, carl icahn has been weighing in on a whole host of market levels with apple raising its buyback. bill ackman, hear what he has to say. any action from another high profile billionaire investor, coming up next.

now, never once to mince words, carl icahn has been weighing in on a range of topics. let's get more. seema mody is with us in the stadz. a big reaction to mr. icahn. absolutely. icahn says there's a chance the markets could suffer a big drop. he made the comment at the reuters global investor outlook summit on monday. icahn says corporate earnings are being fueled more by low effort costs and he says stock

buyback res driving numbers, not profitability. that unnerved investors to the s&p 500 which had been trading flat since icahn spoke within down by 4%. later on on his website, icahn said he's concerned about market levels, it's almost to predict in the short-term. at times like this, he hedges his investments to some extent. taking short-term moves in the market is like predicting how many sevens the hot dice player will continue to roll. icahn dropped some hints about his plans for apple. he says he doesn't want to fight with the company, but has no plans to walk away from his investment, a nearly $2 billion stake. apple is urging icahn to bay back nearly 220 million of shares. but he says, quote, apple is not a bank and should not be run like a bank because investors didn't invest in a bank.

>> asking about icahn's comments on apple, he says he doesn't like apple investors metaling into the affairs of the company's management. listen in. >> usually in my relationship with management, i defer to management and really their objective and having shared buyback program or dividends, etcete etcetera. but i can as public interference in the management of companies is something i do not follow. so i do not side with that at all. >> now, icahn says he doesn't want to micromanage companies. he prefers to speak with management and set up performance parameters, such as return on equity. but he says boards should keep ceos accountable. icahn points to several activists investors who do things well, such as dan loew who force change and he still mthd to take a swipe at bill

ackman. the two have engaged in a public battle over herbalife. icahn says, quote, what we don't do is exactly what ackman does do. we have an idea, but we don't push it. >> ross. always good to hear from mr. icahn. >> it is always good. and he stirred up another hornet's nest, lt. seema, thanks for that. the oecd is cutting its global growth forecast, citing expectations for the fed's taper turmoil and weakness b in emerging markets. stocks in europe are down, investors waiting for ben bernanke's speech at 7:00 p.m. eastern time tonight. billionaire investor carl icahn sounding alarm bells by saying the good times could soon be over. still to come, home depot is

set to report third quarter results in just around 10 minutes. the u.s. housing market has been reboundsing. but there's head winds there. so will that knot the sector? we'll get some insight, next. [ male announcer ] this store knows how to handle a saturday crowd. ♪ [ male announcer ] the parking lot helps by letting us know who's coming. the carts keep everyone on the right track. the power tools introduce themselves. all the bits and bulbs keep themselves stocked. and the doors even handle the checkout so we can work on that thing that's stuck in the thing. [ female announcer ] today, cisco is connecting the internet of everything. so everyone goes home happy. ♪ ♪ you get your coffee here.

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how naughty was he? oh boy... [ male announcer ] fedex one rate. simple, flat rate shipping with the reliability of fedex. let's look at what's on the agenda is in the united states. third quarter employment index is out at 8:30 eastern. charles evans will speak at 2:15 p.m. and fed chairman ben bernanke at 7:00. he's expected to focus his remarks on communication. medtronic, best buy, campbell soup, dick's sporting goods and tjx all report results before the open. home depot is reporting its nird quarter earnings in around about 10 memberships.

the biggest u.s. home improvement chain may be helped by the recovery in the housing market as well as a drive by americans put more money into their homes. joining us with her thoughts, christina hooper, u.s. head of investment and client strategies at allianz global investors. richard megan is still with us, as well. christina, a very good morning to you. what is happening with housing? is the rollover that we've seen in housing going to feet back into the likes of home depot, or not? >> well, we're likely to see over the longer term an improvement in housing. that is going to be at a slower pace than what we've seen thus far. and we're also likely to see a big benefit coming from home prices risie inine ining amongs have not been able to avail themselves of low interest rates. there's about 35% of american homeowners today whose mortgages are either under water or under

equities. so they haven't been able to refinance in the past few years and get significantly lower rates. when they're able to, they're -- as home prices increase, they're lickly to have a lot of extra spending money. that could certainly go back into their homes or just be spent in general. >> christina, it's richard. i have a quick question, but i guess the framing of it is much more at a macro level. i think the one side, the good news is we've hit a trough in bottom .now have some stability. how do you think about what house sg doing to broader confidence? that has a direct impact in consumpti consumption, some of the savings we're seeing. that's a huge positive, isn't it? >> absolutely. but keep in mind that it's a chicken and egg situation with housing and consumer. we saw a big hit to consumer sentiment because of the government shutdown and debt ceiling debate. that seems to have trickled into a reduction in home builders

confidence. they're seeing a slowing in home sales so that while consumer is helping house, housing is not necessarily helping the consumer. that doesn't mean it's negative. it looks like janet yellen is going to keep quantitative easing on the table longer and that when she tapers, keep in mind, there is a distinct possibility that she tapers government securities first. and leaves mortgage-backed securities untouched because even the fed recognizes the impact that it has had on housing and the impact that housing has had on the broader economy. >> all right. let's just look at the futures, christina, this morning. we saw the dow up yesterday, the s&p down on the carl icahn comments. right now, the dow is just five points below fair value. the s&p is a couple of points below fair value. the nas dax is three points

below fair value. christina, what do you make of the icahn comments that we could be set for big -- for particularly chess comments that companies are fueled more by low borrowing costs than any efforts to increase the top line? >> well, we've certainly seen that born out in earnings reports. but that doesn't necessarily mean the future is bleak. for example, we anticipate an increase in earnings over the next few quarters just because we've seen an improvement in macroeconomic data. yes, there's been a slight downturn, like lay result of a decrease in consumer confidence because of the government shutdown. but, in fact, companies appear poised for some level of top line growth over the next few quarters. now, having said that, we do believe that there could be some kind of a slight pullback, certainly valuations are stretched at this point. but the longer term looks

positive for stocks. >> richard, at the same time, oecd just coming outs in the last hour and saying, look, we're lowering our forecasts for next year in 2015 because of a slowdown in emerging markets and because of fed tapering. how does that play. >>? >> it all plays into the same outlook we've been discussing and whether it's icahn, i think structurally, the most interesting thing for next year is the switch in leadership and growth. we've had six years where leadership has come from emerging economies and a little bit of catch up from the u.s. developed markets have lagged. and that goes back to our discussion on europe. the fact that you're watching developed markets in aggregate leading growth next year by definition they grow at a slower pace. emerging markets are still going to be the largest block driving gloeg global growth and they're going to grow 5%. the transition in this debate is the fact that growth is still low. inflation is still low. so qe still sits in place around there. but the question mark is can you

get enough top line growth from economic growth? >> can you? >> yes, you can. i think it's going to be very gradual. so our debate on the pace of how we got here versus the direction, short-term, vol ss low, people in terms of trading the market are hedging to the cheap. now through the end of the year into next year, 12 months out, we still think equity markets are higher. >> do you agree with that, briefly, kristina? >> yes, we do. and we think, also, because of this larger environment of financial oppression we're in, investors need to be adequately allocated to stock. so that should be another catalyst for the stock market. >> okay. kristina, good to speak to you this morning. thanks indeed for joining us. richard, great to have you on the set, as well. that's just about it for today's edition of "worldwide exchange." a little earlier, of course, you saw me trying to build a

computer, which i think we got away with. find out what's coming up on "squawk box." they're taking over the baton next to opening markets stayed site. whatever happens, we hope you have a profitable day. good-bye.

good morning. now some well known investors are starting to question the recent run. in corporate news, after weeks of negotiations and reports, jpmorgan's $13 billion settlement deal with the government is expected to be formally announced today. plus, quarterly results from dow component home depot due within minutes. t tuesday, november 19th, 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. kate kelly will join us from outside jpmorgan's headquarters with more on the story in just a moment. but first, we're going to start things out with the markets this morning. stocks retreating from record highs yesterday on bearish talkes from carl icahn. the activist investor said he had cautious on equities. he was speaking at a conference where he said he could see a big drop in stocks because earnings at many companies are driven more by low borrowing costs rather than strong management. the dow and the s&p 500 are both on track for their best year in a decade. the major indexes have soared by more than 140% since bottoming out over a year ago. in his third quarter letter to investors, jeremy grantham suggests we could see stocks explode higher than sink into a bear market. he