i'm ross westgate. the headlines today. top of the mountain for moncler. the luxury ski maker will be up 40%. we'll be joined by the chairman in a few minutes. deutsch is saying that it's getting its new deal. shares in asia drag lower as hsbc flash pmi data shows output

in the sector slowed to a three-month low. and india's headline inflation up at a 14 month high increasing expectations that the rbi will hike rates again this week. >> announcer: you're watching worldwide exchange bringing you business news from around the globe. well, welcome to the first "worldwide exchange" of the week. we kick off the latest survey for business activity out of europe. the eurozone december flash composite pmi up 52.1. stronger than the reuters poll of 51.9 and it's stronger than the 51.7 in november. but when you dig into that, there's once again sharp divergence here between germany and france. these are two countries that we will individually detail.

the composite for december 5rks 5.2. november, 55.4. it was again very strong. then you break down the french number. the french pmi number down to a seven month low. 47.48 in november. rob is a senior economist at market. he joins us now. good to see you. is france in a recession? >> it very well could be. it fell in the third quarter. definition of a recession, two quarters with a decline. >> the gap in germany is getting wider. how wide do you think it can get? >> well, germany in itself is continuing to pick apart. we've seen that in the numbers. it's still amongst the highest rates of expansion two and a half years. france has a lot to restructure. the domestic market, that will keep it well below germany.

i expect it to stay similarly placed behind germany for quite some time to come. >> how does the ecb deal with this. in the core of europe between germany and france. italy looks to still be in contraction. spain just above it. how does it deal with these sharp differences. >> if they have a situation where they try and support weak economy such as france, italy, spain as you mentioned, then the problem is they're creating a circumstantial journey. we've had the situation with europe and the central bank and other central banks and the world supporting economic growth. this is causing this. when you put a lot of additional cash and constant easing into the system, it creates divergence and the imbalance. that's what we're seeing. >> do you think the ecb will be doing more next year or less? or staying where they are? >> i think they'll stay where

they are. interest rates already at, you know, record lows. they've got a little bit of movement. they could go down. there is talk they could possibly move into quantitative easing. if conditions don't pick up outside of germany, then we could see that happen. islands come out of its bailout. again, they still have spain, portugal, cyprus who is still in the bailout situation. there's a lot for the european central bank to consider. a lot which they can still do. i don't think interest rates will be the answer to this. i think they'll be on to something else. >> as you say, we turn to the capital markets. stick around for the chinese number as well. first, investors have warmed up to the luxury ski jacket maker moncler. its shares are up 40% as it began trading for the first time in milan this morning. the share supposed to be 27 times over subscribed. they're big fans there, claudia,

of moncler? >> yes, it looks as though they are. we saw plenty of jackets here this morning starting at 7:00. they were all lined up. very scenic graphics here for borsa as moncler was set to go public. they did, as you said, come in at the top of their pricing. they were 30 times over subscribed. strong request also from the retail investors which is a strong signal that italians have the strong appetite for the ipos in italy. it looks as though 2014 may be a year in which italy will get more ipos if this is any indication. the way that this stock took off was quite surprising. we were here. we waited for minutes because it was not trading, it was suspended limit up. the stock came in at 43% higher at 14 euros. a very strong start here for moncler. we'll see how things pan out. i have with me as my guest.

ramo fini. he was the ceo of the group. he bought in 2003 a portion of this group and he sold some to carlisle who sold to eurazao. he's been guiding this company for the last ten years and has brought it to this day. he still has some snow in his hair because it even snowed here inside this morning when the stocks started trading. very successful ipo this morning. what is your first feeling here? >> feeling? i'm very satisfied but, you know, i always work -- i never work in numbers. i always work on product, on quality. really i've already worked on talking to my customers. this is, i think as you say, we have private equity in our portfolio. i think the major shareholder for me is always my customer. i really care about them. i want to stay very close to them. i think it's very important for us, you know, not think about numbers and the number on the

boards today. always care about our product, the quality that we really care and our market, our stores. that's the place when we talk directly with the customers. i think this is the most important thing for me. >> is that the key to the success of what happened here this morning with this listing? is it the product? >> i really don't know. you know, as you know, i'm not very familiar, you know. this is first day. i can't say, you know, before when they talked about private equity guys, i never think about top line, whatever it is. i always say to my people and my people in the company say we have to do a good job. we have to really work on product, do the best, you know, and then the numbers came. again, see, i don't know what's happened today. i want to see what's happening next ten years. my vision is long term. i don't care about today. the share is 1, 2, 3, i don't know. i want to see what's happening in ten years. >> so to get to these ten years, what is your plan going forward?

i mean, these multiples mean that for moncler you have to sustain your business. the first nine months for the year you came in with 329 million oeuros. >> i think the strategy is there. i think we have to work. we have a technical problem there with the chairman of moncler. let's talk about what's happening in china. hsbc's flash pmi for december fell to a low. it was 50 poi.8 in november.

we'll get more on that with rob. right now we have re-established connection back to the milan. claudia. >> talking about product. we are very concentric on the down jacket. it's another couple of categories as shoes. they're very moncler. our founder was with a down jacket. definitely were behind these. they have very good mountain shoes. i think we have a couple of categories that we can improve this. as i say all of this, i want to improve this, build up the company, the company to build a special. i want to make really something very interesting for my customer and not put the label and the logo in any product. this for me is very important. all sorts of technical problems coming out of milan

this morning. we've lost the picture and claudia's lost hearing us. let's talk about that china pmi. maybe we'll go back to claudia. rob, the chinese number, a little bit weaker this morning, but it is still above the third quarter average. so what does it tell you about this section of the chinese economy? >> china, we're not seeing any sharp slowdown. the number did come down a little bit, but what it's suggesting is growth of gdp still hovering below the 8% mark. that would be an eight year low but on the other hand china is supposed to have a slow growth going forward. these numbers are suggesting that it's moving down but not anything severe and nothing to be too concerned about. indeed, new orders index hit a nine-month high. there's a chance that coming into next year we're going to see a slight acceleration in growth again. >> what's the concern you have about china? we've got this reform program coming in. there are still those that are worried about the banking

sector. what do you think? >> i think i would probably be most worried about the shadow banking sector. we've seen it in other countries across the world. when you get a lot of debt coming from shadow markets, this can cause an unnecessary instability in markets. it can cause problems when debt is unwound. also, you don't know how much of that debt is going to companies if their conditions aren't as strong might struggle to pay back that debt and what the chinese government would have to do to support them. job creation in china is not as strong as we're expecting. know in china the two big things it's always been based on, exports and growth for jobs. >> that was the point, right? it was a job-creating machine, the head of jobs. but as they transition where the growth is supposed to come from, that is going to have an impact, isn't it? >> it is going to have an impact. you have to remember that this is going to be a massive structural shift for china.

they're moving away from being an export focused low end manufacturing economy to being more of a value added and service driven economy with more spending and less dependence on business investment. obviously the chinese government has a lot of tools at their disposal to aid that structural reform but, again, i don't think we've ever seen such a shift in such a massive economy for many, many, many decades. >> rob, thanks for seeing you. senior economist at market. i think we've solved some of the technical issues in milan. let's get back out to claudia speaking to ruffini. more padding than a moncler jacket, claudia. >> yes, we are back here. and we were talking about the strategy going forward. i mean, these multiples are quite significant. what are you going to do? what are your projects especially for 2014 and the next years in order to keep up your business. we were talking about 389

million euros is what your first nine months revenues came in at. what's the future for moncler. >> as i said before, as i always say, never think about numbers, top line, bottom line. i always try to stay close and stay tuned to my customer. try to make the best product, try to work on the quality. distribution as i said before is everything. i think, you know, where the possibility to open new stores, direct stores. as you know, we don't have any filter between us and the market. we don't have anyone represent us. we don't have anymore distribution. we don't like franchising. we are really directly, no filter. we want to continue our strategy. i think we have many, many ways to improve our distribution thinking of eastern europe. we not have one store yet. i think our russian customers is very strong for us. we have a strong kickback from milan, paris, london stores. it's not only russia. think about ukraine, kazakhstan,

they are ready to build other stores. >> by that standpoint, italy represents 25% of your sales. there is a lot more out there. but in terms of products, what are your plans? because as some say out there, it's just down jackets. i mean, are you going to expand and go into other products as well with this moncler brand? >> i think you say a lot. down jacket is -- the company was founded in 1952 was the first down jacket. they are really i think the best one. since the beginning, say, with the people in my company say, guys, we have to stay really close to the rules. very important. as you know, you know, i bought the company in 2003. work really -- i was very concentrated on jacket. i think since the beginning say it's better to be the best in the world to make a down jacket than make everything. having said that, you know, we have another couple of category that we can really -- moncler talking about knit wear. i think is something very us.

shoes especially in winter i think is something very us. >> thank you. thank you, the ceo of moncler in boras. back to you, ross. >> claudia, thank you very much, indeed, for that. and we're looking at our global equities right now. just an hour and 15 minutes into the trading day. we are waking up with the best position in the trading day. advancers outpace the decliner. ftse 100 is down. u.s. equities having their worst week for around three months. today the ftse is up. it's trying to claw back those losses. the fed will be the main drive. there is lots of data. the fed the main driver coming out at 7:00 london time on

wednesday. xetra dax, tapered decision. cac quarante. rsn insurance facing pressure from shareholders to put itself up. this comes after the ceo signed a lease last week following the third profit warning in six months. stock down another 1.8%. today deutsch telecom is up 3 point poip 6%. there's a report that sprint might be interested in buying its t-mobile u.s. brand. they have argued more consolidation is needed in the american wireless market. they have to compete with the likes of verizon and at&t. attire may have something to do. up 4.5% in milan. one of the best gainers in europe. they're confirming that they've raised its stake though it didn't break its rules by not disclosing it earlier. as far as bond markets are concerned, we keep our eyes on

treasury yields as we go towards the fed. ten year treasury yields 2.85%. sort of in the middle of a recent range of 2.7 and 2.9. on the currency markets, dollar yen, we hit a five-year high. just below 1.04. manufacturing confidences in japan at the highest around six years although it did go down capital spending. 1.3759. the euro, a little bit lower of 138.30. that's where we stand right now in europe. let's check in on that first trading day in asia. plenty for them to react to on the get-go. xisu sixuan is with us. >> the fed, the b.o.j. and the

rbi, bank of india. the nikkei lost a 1.6% today despite an upbeat survey. the fall in the dollar to 103 handle dragged exporters stocks lower. over in china, yes, we did get disappointing pmi numbers. if you look at the breakdown of those numbers, it's reduced output that lasted a pickup in new orders. the forward looking new orders numbers suggest that the economic recovery may remain on track next year. so we may be seeing profits before holiday in the shanghai deposit. 1.6% to a four-week low. the hang seng index in hong kong slipped .6%. the losses on the kospi were capped by a rebounding in shift builders and tech shares so it ended down by just a touch. in australia, it slipped .2% in india sensex still in action flirting with a flat line.

the inflation number, wpi, came in higher than expected. china's transportation sector sold off after beijing released the business tax and value added tax for the sector. a lot of these railway stocks and shipping companies took the brunt of the selling. so that's an update of the asian markets. back to you, ross. >> sixuan, thanks for that. catch you a little bit later. meanwhile, on today's show, consumer spending pushed confidence to a six year high. sixuan has been saying companies have been noting a note of caution. the new year could bring another reason to celebrate. the global economy is well on the path to recover. how do we have the move to normalization. we'll have the fund managers at 11:20. the ecb is watching the european banks. it could lead to new competition

for u.s. lenders. we'll assess the claims at 11:30. the grand plan is coming together. germany's new government is coming together as they endorse a coalition agreement. we'll look at the key people alongside angela merkel in just a few moments. and to learn more about the german chancellor's third term in office and the impact in the eurozone, find out more, where else? on cnbc.com. you can follow us on twitter @cnbcworld. after the break we'll be in copenhagen who can turn your iphone into a hearing aid. it's all part of our innovation cities series. see you in a few minutes. [ male announcer ] the new new york is open.

open to innovation. open to ambition. open to bold ideas. that's why new york has a new plan -- dozens of tax free zones all across the state.

move here, expand here, or start a new business here and pay no taxes for ten years... we're new york. if there's something that creates more jobs, and grows more businesses... we're open to it. start a tax-free business at startup-ny.com.

innovation city, we're taking a global city tour to bring you the innovations that happen to shape our lives. we're in copenhagen to look at technological devices in the health sector. louisa is joining us. nothing like being home, is it, louisa? >> reporter: it's wonderful being back. i've had loads of danish pastries. we're standing in a beautiful

area. originally copenhagen was founded in the tenth century. this area, very old from the 17th and 18th century. used to be the harbor where all the vikings used to come in because it's a viking city. that's originally how it was founded, a fisherman city. we are talking about innovation from old to new and how about some hearing aid innovation? i'm putting my earpiece back in as i say that so i can hear you, ross. but did you know that half of the world's hearing aids are produced by this very small nation. many people don't know that. i'm with the ceo of resound to talk about the hearing aid technology. lars, good to see you. >> good to see you. >> so we were just talking in the studio about this tieup between apple and resound. what is it that you're working towards? >> i wouldn't call it a tie up. it's a collaboration and it's a technology collaboration. you should see this from apple's

point of view probably. they want to be in the technology forefront and it's from their point of view a corporate technology resource. they want everybody to use an iphone. >> it's also kind of about making hearing aids cool from what i understand and being able to do things like potentially stream the music from your iphone to your hearing aids. >> absolutely. and, remember, we are making products that a number of people need but nobody wants to wear them because it's related to a stigma. we tried to destigmatize it. with the technology we have, we have been able to eliminate the body worn device without this dongle around your neck. what we have done lately is you're able to stream this from tv, radio, stereo. now you'll be able to stream

directly from an iphone so you can pick up the call on your iphone and use your phone as everybody else uses their phone. >> fantastic. you've brought an example of some of your latest devices. >> that's not the mfi product. it's actually to show you how small the devices are and you should actually look at this as a small computer. >> okay. maybe if you can lift it up a little bit higher so the camera can catch it there. they're colored as well. >> they are colored. and you can get them in basically around ten different types of colors. >> are we moving towards a product now where glasses, reading glasses, you can walk into a drugstore. you can say i'm minus 2 and you can pick up glasses on the go. is the same going to happen with hearing aids where it's standardized? you don't have to have them fitted to you? >> you need them fitted exactly to you. i think that we are far from

being able to pick them up in the drugstore. >> my father was saying -- he wears hearing aids and he was saying they're experimenting with some technology where you can pick them up kind of easier than what you used to. >> yeah, but i think -- that could potentially work for very minor hearing loss. with more moderate to severe you need a fitting process, but the good thing with the new products is actually that you actually adjust your hearing aids with the iphone so there's also an app coming. if you look at the innovation in hearing aids, you obviously need as a base case very good hearing aids and then i think the next where we will see that is connectivity. the third one will be the app for it. we are clearly moving into the app first. you will in the future get the number of apps that will be meaningful to you. >> very, very interesting. thank you very much. lars viksmoen, the ceo of

resound. we'll be back with more innovation in the nation here on innovation cities. >> innovation in the nation. great stuff. thanks for that, louisa. plenty more on the line as well. now it was one giant leap for china's space program. talking about innovation as the nation carried out the first self-landing of a moon robot for nearly 40 years. they're set to deploy a rover named j. rabbit, very chinese to photograph the moon surface. the landing marks a first step to try to land an astronaut on the moon by 2025. at the same time, google is taking a giant leap of its own. they've acquired boston dynamics, the military engineering firm who engineers the fastest running robot, the cheetah. i don't think that's it, or is it? the massachusetts company is the

eighth robot maker snapped up by google this year. so we want to know if you could make your very own robot, what would you want it to do? if you had a robot, what would you want it to do. you can join us on the web or tweet us. this one caused an awful lot of discussion already amongst the production team today. i won't go into the details of that discussion. still to come on the program, japan's business confidence has hit a six-year high. does that mean the first two hours of abenomics have hit the mark? we have more on the survey after this. hi honey, did you get the toaster cozy? yep. got all the cozies. [ grandma ] with new fedex one rate, i could fill a box and ship it for one flat rate. so i knit until it was full. you'd be crazy not to. is that nana? [ male announcer ] fedex one rate. simple, flat rate shipping th the reliability of fedex.

yep. got all the cozies. [ grandma ] with new fedex one rate, i could fill a box and ship it for one flat rate. so i knit until it was full. you'd be crazy not to. is that nana? [ male announcer ] fedex one rate. simple, flat rate shipping with the reliability of fedex. every weekend worked, every idea sold... ♪ you deserve a cadillac, the fastest growing full-line luxury brand in the united states. including the all new 2014 cadillac cts, motor trend's 2014 car of the year.

now during our season's best event, get the best offers of the season on our award winning products, like the 2014 ats and srx.

headlines from around the globe. top of the mountain for moncler. shares of the luxury ski maker up more than 40%. telecom stocks also rallying. deutsch telecom is saying sprint is looking at t-mobile. telecom italia unveils it has a 10% stake. shares in asia are lower after the flash pmi data shows output in the factory sector down to a three-month low.

india's inflation had a four month high saying the rbi may hike rates this week. we're an hour and a half into the session here in europe. european equities are up after being down 1.7% for last week. the xetra dax up half a percent. telecom italia up 4.5% there. on the bond markets, yields okay. we'll keep our eyes on treasury yields. in the middle of that, 2.7 to 2.9% range that we've been in. much depends on what happens with the fed when it comes out with its decision on whether to taper or not. that's going to shape everybody's thoughts. as far as currency markets are concerned, dollar yen just under that five-year high that we hit on friday. just below 104.

coming 103 euro dollar far away, half a percent away from the year's high as well. 137.7 for the year. now 138.30. germany's spd members have voted strongly in favor of grand coalition with angela merkel's conservative block. 24 hours later the coalition has revealed who will take key ministerial posts. most surprising is the former ecb member gaston will leave the role in the labor ministry. annette has been looking at this. annette, what reaction have we got? >> actually, a little bit of a surprise is that angela merkel in a last-minute deal has actually shifted a little bit the personalities and there is more buys with younger members as well. there was a lot of discussion that this coalition agreement is a coalition agreement against the young in favor of the older

people and probably she wants to make sure now that the young generation as welling is having a responsibility during the next four years when it comes to decision on policy making. so when we look at the personalities, one could from the first glance say that's hey big win for the social democrats, but the win as welcomes with risks. the head of the social democrats who is heading up the economy ministry is now responsible for turning up the messed up energy politics. so this is a big risk because it might be a make or break when it comes to potential -- yeah, when it comes to the success of the social democrats because all eyes are of course on the next election in 2017 because the big aim of the social democrats is then to have a coalition with the greens and the left and to kick angela merkel's party out. in germany discussion has

already started what angela merkel wants in terms of legacy during the next four years. it seems that she just wants to have a stable next four years, but there might be actually some surprise but we don't know them yet. ross? >> annette, it seems to be a lot of fascination around the promotion of vanderlai in the post. is she the future? >> she has said quite often that she doesn't want to run for chancellor because she's the same age as angela merkel, but you don't really know because angela merkel is most likely not going to become a false period in 2017. so with the defense ministry now, this is actually quite a tricky one. in germany we have a tradition that this poll might mean the end of your career. on the same side, she's known to be quite diplomatic and she has

a huge international experience and her english is brilliant. we've interviewed her a couple of times. >> we do like that here. annette, thank you very much. that's the breakdown of the new german government. meanwhile, data out this morning in japan showed that the big japanese businesses improved for a third straight quarter. it went up to plus 16. the most upbeat reading in six years. with us for the next half hour is francois savoy, chief sbc officer. thanks for joining us, first of all. >> sure. >> we're up at a six-year high at the moment. firms have revised down their capital spending. are they still expecting needing the bank of japan to act further? >> well, capital spending was

stronger previously, that's true. i think just to jump ahead is that the first two hours of abenomics, you made some comment earlier, have hit the target. in fact, they could be close to a bull's eye looking at the weakening of the yen, the equity markets. but also related to the gdp figures, but going back to the time can, another noticeable development although fixed investment may soften a bit was that the small and medium enterprises have turned the corner and they've moved into positive territory. the large enterprises have been in positive territory for a while. so abenomics is having a deep effect and i think that's particularly important because most of the employment and therefore the wage increases are generated by smaller enterprises, not by the large enterprises. for abenomics to work the corporate profits have to filter down into wages as well as

investment. >> any sign that that's happening yet? >> no, not really. we're still waiting for that to happen. there's some analysts making commenta commentary, but we should know in the coming months. >> francois, just bring you in here. japan's nikkei up 50% in abenomics and the weakening yen. pretty difficult if your a a foreign investor. hedge out the yen. what do you make of japan's foreign investments in 2014 for foreign investment? >> we remain very positive. abenomics is working. the first steps are going exactly the way we expected them to go and that's why it's mentioned. it's very key that we see wages in 2014 making a turn for the better and we are going to be very, very careful about what is going to be -- to happen with wage negotiation. but in general japan is one of the countries we favor in our determination in terms of

equities. >> thomas, do you see the yen weakening further and what delivery are we going to get on the third hour? >> well, the first question, we don't have our rx trading desk. it's got a very loose monetary policy with the qke. that's the key question. japan's economy, the third hour, the consumption, investment, they'll all hit a head wind from the con sujts tax increase next year. to offset that japan needs a tail wind from the third hour of the growth strategy which really hasn't been implemented yet. so there's -- we don't know whether that will hit the target or not, but that will be key for the outlook, not just for next year but really for the years ahead, 2015 and the outlying years. >> i thought the stimulus plan on its own which they've announced, the extra spending, won't offset the rise in the

consumer tax? >> no, not from an overall gdp. the expectation is that overall gdp growth will slow down next year, next fiscal year compared to this fiscal year but still be positive. >> okay. thomas, thanks so much for that. thomas byrne, regional credit officer for the middle east joining us from singapore. francois sticks around. meanwhile, the heads of japan and the association of southeast asian nations met over the weekend putting out a joint statement to strengthen cooperation. we have more from tokyo. hi. >> hi, ross. yes, the statement did not name any nation in particular but clearly implying china's recent claim of an air defense reidentification zone over the east china sea. shinzo abe expressed strong

concerns over the claim saying relationships by countries should be governed by law rather than force. abe stressed the international law alluding to the territorial disputes in the south china sea. china has lashed back saying it was strongly dissatisfied with the comments through a foreign ministry statement. abe at the meeting pledged to extend around $20 billion of aid over five years to the region to help upgrade public transportation and other structures. that's all from nikkei business report. back to you, ross. >> thank you. thailand's military is taking center stage in the country's crisis. this time as a mediator. the government hosted a forum on sunday. the military offered to hold a fair and clean election on february the 2nd next year. the forum comes a day after army chiefs hosted a meeting with antigovernment protestor leader who is urging the military to join his movement but so far at least the military has had a

neutral stance in the country's current crisis. 200,000 protesters gathered in central kiev as the u.n. said they had stopped working on a deal with the ukraine. they're saying they're no longer serious about signing an agreement. john mccain has been addressing demonstrators and met the daughter of the imprisoned opposition leader. they will meet with vladimir putin on tuesday. ruthless, reckless, insecure. that's how u.s. secretary of state john kerry is describing north korea's leader, kim jong-un. he said he's concerned about the impact of north korea on the region. >> this is not the first execution. there have been a significant number of executions taking place over the last months which we're aware of, and most importantly it underscores the importance for all of us of

finding a way forward with north korea in order to denuclear rise the peninsula. it's an ominous sign of the instability and the danger that does exist. still to come on the program, what are the top five global risk events you need to be prepared for in 2014? stay tuned. we'll run through them. [ male announcer ] the new new york is open.

open to innovation. open to ambition. open to bold ideas. that's why new york has a new plan -- dozens of tax free zones all across the state. move here, expand here, or start a new business here and pay no taxes for ten years... we're new york. if there's something that creates more jobs, and grows more businesses...

we're open to it. start a tax-free business at startup-ny.com.

we went through a lot of potential global risks. u.s. political stalemate, but what are the major events we have to plan for next year? joining us is matt and francois. matt, thanks so much, indeed, for joining us. you've gone through these in order of importance, and the number one event or risk we have is currency volatility. >> yes. look back to 2012 we saw that usb was a trading.

>> 2013 was no different. >> 2014. >> 2013 we don't know what the final number is. >> i see what you mean. >> and 2014 either. there's a lot of commentary that we have the fed tapering but we don't know the breadth. >> we don't know that. it was the thoughts on the fed tapering that caused a huge volatility in the summer. >> that's going to continue. how quickly and by how much will go into next year. >> francois, as an investor do you try to mitigate currency impacts? >> yes. we don't take too much risk in foreign exchange exposure. we had -- >> you have the position and it gets blown out, right? >> yes. if you are very good you are making a huge return. if you are very bad, one year can cost you a lot. we are very careful. >> which highlights your

thoughts particularly. compliance crackdown. when you look at that and let alone the regulating clamp down in the west particularly in the financial sector. >> yes, as the governments cool they go after western markets. sometimes it's about populism, doing something popular at home. sometimes it's simply because standards are higher quality, but once a local emerging market government goes after a western company, that company's home government may go after it as well. you're looking at big fines which obviously impact earnings massively as well as damage to the brand. >> the one i'm most interested in is chinese -- potential for chinese financial crisis. this is centered around concerns everybody has around the chinese banking system. this is his biggest concern. how are you assessing the chances of something blowing up? >> well, history, you know, doesn't tend to repeat itself but it rhymes, right?

china's banks right now are a lot what the u.s. banks looked like. capital ratios are low, 6.5%. you have a lot of interbank digestion. we saw shibor rates go up. we saw npl rates rise. private banks operating in the region are estimating them as high as 10%. we've seen this story before. there's reason to plan for it this time around. >> we tend to agree. we need to be very careful on this issue in china. nevertheless, the new government is dealing with this. it's been very pro active. for the last few months it's dealing with this issue. we believe they have the kind of mix that is potentially the good mix for the coming quarters. >> the other one i find interesting, a reduction in oil prices. >> yeah. >> now you would tend to think, you know, low oil prices are

fairly good for the world. >> yeah. it's an event to watch. it's an opportunity. definitely the most positive thing we're looking at. right now the supply/demand don't necessarily reflect the price. energy oil is trading much higher than you would expect, over $100 a barrel. a lot of that is the political risk in iran. there's the tant between the united states and iran. we think that risk will dissipate. as that dissipates, the price will come down. the u.s. is set to be the world's biggest oil producer. what that means for an emerging market's household where most of that is spent on energy. you can take a country in africa. if you model it out, 50% decrease in energy prices would mean a 300% increase in discretionary spending for the household. >> i'd like to get 50% decrease. >> that may be optimistic. >> probably. great. thanks so much, indeed, for coming in and highlighting that.

matt analyst at frontier strategy group. india's strategy is up to a 14 month hide thanks to a soaring food prices. it was up 7.5%. it was more than the 7 p e% anas were expecting. cnbc has more for us from mumbai. hi. >> hi. thanks for that. we like to mention the wbi detail which came out for the month of november was extremely disappointing for the markets which came in at a 14-month high. to add to that it was revised higher for the month of september to 7% versus around 6.5% earlier indicating that we have been running at an inflation figure at 7% for the past three months. that would mean that it would definitely be a 25 basis points

hike reported on the wednesday policy and that would be basically predicated on inflation and the fact that even the ppi detail has been trending in double digits. doesn't leave too much room for the rbi to act or even the possibility of a 50 basis points hike might even be on the cut. wbi inflation data extremely disappointing. back to you. >> ekta, thanks for that. reminder what's on the agenda in asia tomorrow. we get minutes from the reserve bank of australia. meanwhile, north korea will mark the second anniversary of kim jong-il's death. francois, we're up 25% for the s&p this year. japan's up 50%. europe has rebounded fairly

strongly. what happens next? we can't repeat those performances so how are you thinking about 2014 from an investment perspective? >> you see that remain because when you look at interest rates, they are going to remain where they are, which is close to zero. when you look at bonds, we believe that there is some kind of bubble in safe haven bonds. there is no -- >> if interest rates stay where they are -- >> yes. >> -- then what's the trigger for -- to prick the bond bubble? >> i would say that if you have confirmation that the recovery is on task and that it's going to go stronger and stronger in 2014, considering the fact that you have a very low level in terms of inflation, both higher inflation and stronger growth can promote more equilibrium level of interest rates and we believe in the u.s. it should be at a 3.5%.

you have the risk of losing money in bonds. >> if you have stronger growth and high inflation, how long before rates have to respond to that? >> that's the big question. this is the reason why -- the main reason we can see -- the main reason we can see that is monetary policy in 2014. it will be key to watch what was going to happen with mrs. yellen coming as the head of the fed in january. we believe tapering is not so much the issue. the big issue is how is that going to stop foreign guidance. tapering isn't tightening. are you confident that we're not going to repeat what happened in the summer? >> yes. i believe that for the time being that it's not policy restriction, that it's just a limitation ofly qu liquidity injection. for the time being it's not working. >> european equities, u.s. equities, emerging market equities. >> we don't want to fall in love with european equities.

we believe there is a significant rise. yes, more european equities. don't sell all of your u.s. equities. we keep our assets in japan. we believe japan remains a good story. we believe emerging equities are interesting because of valuation ground and because of other measuring grounds in macro economy. we believe europe need not be on the way. >> final story, francois. get your views on this. if you could make your very own robot, what would you ask it to do? join the conversation on worldwide exchange. get in touch with us on e-mail, worldwide@cnbc or direct to me or tweet. the chinese apparently have landed a robot on the moon and we're not quite sure what this one is. this is sort of a dog -- not a dog, a horse really.

anyway, what would you -- if you could invent a robot, what would you get it to do? francois, this is the hardest question you've faced today. if you had a robot, what would you want it to replace or do for you? >> i would like the robot to sleep for me. >> to sleep for you? >> yes. to be able to make me fit but without sleeping. >> okay. if we could do without sleep we'd get more done but then we'd miss out on fabulous dreams that we have. >> yes, true. >> thank you very much. francois, thank you. we'll take a short break. still to come, all eyes on the fed. will strong u.s. jobs convince bernanke to scale back economic stimulus? the second hour of "worldwide exchange" coming up.

>> announcer: you're watching "worldwide exchange" bringing you business news from around the globe. and a warm welcome if you've just joined us this morning here on cnbc "worldwide exchange." welcome to the start of your global trading day. the worst fwheek three months for u.s. equities last week. the dow down. the nasdaq down a similar amount right now. we are caught higher at the moment for the dow at some, what, 25 points above fair value. the nasdaq is just around 10

points above fair value. the s&p 500 around 2.5 points above fair value. european equities, ftse last week was down 1.7%. currently up over a quarter. half a percent high for the xetra dax. the latest flash composite pmis out for europe show the french number weakening. the german number holding steady, 55.2, 55.4 in november. but a big effort on economic divergence. it looks like france may be in recession. the ftse mid is up nearly 1% at the moment. as far as bond markets are concerned, we keep an eye on treasury yields. 2.85%. in the middle of that 2.7 to 2.9% we have been in. currency markets, dollar hit a high.

currently at 103. no major reaction to the tankin survey. euro dollar 137.67. around about half a euro away from the year's high of 138.30. that's where we stand in european trade. let's recap all the reaction to the data out of asia. sixuan has more for us in singapore. >> thank you, ross. asian markets lost ground ahead of central banks namely the fed, the b.o.j. and reserve bank of india. despite an upbeat tankin survey. over in china hsbc's november flash pmi numbers came in at a three-month low, but if you look at the breakdown of those numbers, it's reduced output that has a pickup in new orders. so these forward looking new orders numbers suggest that china's economic recovery may remain on track next year. it may also be profit taking

before holiday so the shanghai deposit ended lower by 1.6%. the hang seng index in hong kong down by .6%. elsewhere, the losses on south korea's kospi were cut by a rebound in shift builders in technology shares. australia's asx 200 down by .2% and india's sensex lowered after the wpi numbers came in higher than expected. in terms of sectors, chinese broker rag brokerages. that is also known as the new third board. analysts say this may contribute 10 to 15% profits for these brokerages. we are seeing profit taking in the sector after the strong rally we saw last month. back to you, ross. >> thanks for that, sixuan.

that's where we stand right now on global asset prices ahead of u.s. opening. joining us is brad mcmillan, chief investment officer at commonwealth financial. falls last week. have we decided to lock in gains? we've had a good year and there's too much uncertainty with what the fed may do this week? >> i think that's a big part of it. i think the other thing we're seeing is retail investors who have really started to move into the market decided last week to pull back a little bit. i think that's going to be one of the determinative factors going forward. what do you think is going to be the driver for them? >> well, i think you're going to see institutional investors. they're largely fully investors. you're absolutely right. they are starting to say, okay, we'll start to take a look at what we've got, re-evaluate. retail investors have been very

enthusiastic. they've been putting money in all year. when you get to all-time highs, they start to ask themselves, you're hearing about the taper. maybe we should be more cautious. i think that's what's going to matter is what the retail investor does early next year. >> do you think institutional investors, because i don't know the retail investors will take a view of this, institutional investors have decided they can make a distinction between tapering and tightening? >> i think they will get that distinction, i really do. but the problem is as of the end of the year no institutional investor can afford to be out of the market at this point. they just can't. next year when we book the games, when we finalize, when they re-evaluate where they want to be, that i think is what's going to be interesting because the reality is, interest rates are going to go up. they'll continue to go up. tapering is not tightening, they understand that. tapering is reducing stimulus and you've seen interest rates ticking up towards three for the

past several months. i expect them to go to 3.5 by the end of next year. >> 3.5 by the end of next year. on what, on the ten year? >> yes. >> what happens to the shortened? >> ten year, yes. excuse me. we're going to see rates continue to rise. you look at u.s. economic growth, it's accelerating. it's been accelerating all year. you look at employment and wage growth. that also has been accelerating. u.s. economy is about to take off and i don't think yellen is exactly the dove that people think she is. i think she'll be quicker to make a switch that people expect. >> we'll ask how quick. senate majority leader harry reid invoked closure on the u.s. budget bill this week setting up debate for tuesday. a working security has to prove the two-year deal. they expect it to pass by a slimmer margin in the house. the procedural vote required 60

votes. brad, one argument that's been put forward, not the least by me, if we have less concerns about congress, what's to stop a taper this week effectively? >> i don't think there is any reason why you wouldn't have any taper this week. what stopped it in september, i believe, was exactly the political uncertainty. on an economic front, every -- all of the conditions have been fulfilled and it wouldn't surprise me at all to see a taper this week. that said, i don't think so because i think there's still going to be an abundance of caution going forward. next month i think if we don't get it this month is quite possible. >> for it to be this week, would you prefer as someone who's advising money, investing money, would you prefer if they didn't make an announcement and you came back and you could start preparing for 2014 without this

happeni hanging over us? >> i would like to see the taper start this month. i think the market is prepared for it. i think it's actually a sign of economic strength and i think the market would receive it favorably at this point as opposed to september when everyone asked, well, why didn't they taper? i think they were expecting it, it didn't happen, that was bad. this time i think we're expecting it and i think it would be good. brad, let's stick around. more to come for you. have a cup of coffee. it's early. meanwhile, what's on the agenda in the united states. rising productivity out at 8:30 eastern. growth is upwards of 3% from the previous estimate of 2.3. unit labor costs are expected to drop 1.5%. just before 9:00 we get the december manufacturing pmi. by 9:15, november industrial production. some of the other stories we're also following. telecom eye talg yeah has until the market to open to tell the

regulators to say when it was informed blackhawk had raced its stake. they're considering fining the money manufacturer for not revealing that it had doubled its stake to over 10% in the telecom's operator bank in november. the italian regulators also told black rock to make a statement on its exact holding today and its intentions at the forthcoming telecom italia shareholders meeting. sprint is reportedly mulling a bid for smaller rival t-mobile and could make a bid next year. they've long argued that more consolidation is needed to better compete with verizon and at&t. a tariff could run afoul of u.s. regulators. they've blocked the u.s. takeover of t-mobile. it said the market needed four national competitors. sprint and t-mobile stocks are

up 7% for sprint and 9.5% for t-mobile u.s. in frankfurt. aig's reportedly in advanced talks to sell its aircraft lease business for around 3 billion in cash. "wall street journal" says they would take a minority company valued around 2 billion. it would create the biggest aircraft leasing company by size with around 1300 jets and an order jet with 1400 more from air bus, boeing and others. they spent the last six months trying to sell but they bought at the asking price. aig was down 2/3 of 1%. holdings up in frankfurt trade. it was one giant leap for china's space program this week end. the nation carried out the first soft landing of a moon robot for nearly 40 years. the spacecraft is set to deploy a rover named jade rabbit which will photograph and study the moon's surface.

it will be landing a significant step for china's intentions to land an astronaut on the moon by 2025. at the same time, google is taking a giant step into the world of robot particulars. the california company has acquired boston dynamics. they're famous for developing the world's fastest running robot, the cheetah. i still don't know what this is in this picture. is that the cheetah? i'm not quite sure. anyway, google snapped up eight robot makers this year. so we're asking if you could make your very own robot, what would you like it do do? anything within reason. join the conversation on worldwide exchange. e-mail us or tweet@cnbc or tweet me directly@rosswestgate. >> what's interesting about that is robots do very well in

trending markets, you know, mechanical models. it's when things get strange that mechanical models break down. so most of the time, yes. sometimes absolutely not. >> okay. and maybe they could make you a cup of tea or coffee. that might be handy in the break. see if we have any robots there to do that. also, he's leaving the ecb to join germany's new coalition government. we'll be over in frankfurt to discuss the new move and the new look of german politics. [ male announcer ] how can power consumption in china, impact wool exports from new zealand, textile production in spain,

and the use of medical technology in the u.s.? at t. rowe price, we understand the connections of a complex, global economy. it's just one reason over 70% of our mutual funds beat their 10-year lipper average. t. rowe price. invest with confidence. request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully fore investing.

>> announcer: you're watching "worldwide exchange." recap of the headlines. the ski wear makers wig jump. moncler jumps. shares up 40%. asian shares dip on china's pmi. a taper in the reaction of the market regardless of what the fed announces at this week's meeting. so germany's spd voted strongly in favor with a grand coalition with angela merkel's conservative block. they've reported who will take key ministerial posts.

former ecb member kneel gustafson will leave for a role. annette is here with his decision. annette, what's he been saying about it? >> he was saying it's a purely private decision because his life as an ecb central banker doesn't fit together with his family life. the family is located in berlin. so this is the official story i would say probably there is some truth but i would as well say it makes a lot of sense for him if he's still planning to have a career in german politics to move now and have a post now with that government. suh what he's going to become is the deputy labor minister. he is eager to form what he says a modern european labor policy.

most likely he is just waiting until the next election because then the likelihood of the social democrats with the left and the greens might be higher. he might become the finance minister. that's one narrative and for now he's leaving the ecb. the deputy head of the bundas bank is said to become his predecessor. we'll see what's going to happen. angela merkel made it pretty clear she wants to have a german being a successor to him. with that, back to you, ross. >> thank you for that, annette. that's the recap of the new german government. still to come, could the end of fed tapering send both bonds and equities higher. we'll have the discussion on how this might be positive for asset markets in 2014. [ male announcer ] the new new york is open.

open to innovation. open to ambition. open to bold ideas. that's why new york has a new plan -- dozens of tax free zones all across the state. move here, expand here, or start a new business here and pay no taxes for ten years... we're new york. if there's something that creates more jobs, and grows more businesses... we're open to it. start a tax-free business at startup-ny.com. we're open to it. stick with innovation. stick with power. stick with technology. get the new flexcare platinum from philips sonicare and save now. philips sonicare.

last week was the worst week for u.s. equities in around three months or over three months. the dow and s&p down 1.6%. right now the thought is it will go up. the dow has caught up 78 points.

the nasdaq 17 points higher. a lot can change between now and then of course. let's get a final thought on all of this from brad mcmillan who is chief investment officer of commonwealth financial. you said institutions have to be fully invested. why do they? why wouldn't they put some of the cash off the table at this particular juncture? there's a lot of risk this week. we've had a good year. it's now thin markets. why do you have to be fully invested right now? >> well, i think there's career risk in place. when you look at the end of the year you've seen very strong performance up until the past week or so and nobody wants to miss a last-minute rally so i think right now people probably are starting to think about pulling some money off the table. certainly the retail fund flows report will make that a little bit more urgent, but at the same

time most people are just looking to close the books and any significant changes are going to be something that might result in even more risk rather than less. >> okay. now to bear in mind what you were saying earlier about your tenants for the market and the macro theme as well. what do you do on an individual basis in terms of sectors or groups of stocks? >> i think you have to look at the different sectors that are going to benefit from the ongoing u.s. recovery. consumer discretionary, for example, is an area that should be looked at. some of the areas like materials that are going to depend on the rest of the world doing well, i think that might be an opportunity as well. on the fixed income side, right now if you look at spreads, municipals are really probably the best area to be in. i do believe going forward taxes are going to be more of an issue. i think munis are worth a look. now today is also the

busiest pickup day of the year for ups. the company expects to pick up an estimated 34 million packages worldwide with 29 million of those to be delivered tomorrow. overall ups expects to deliver more than 129 million packages the week before christmas. the company hires 55,000 seasonal workers in the u.s., leases 23 additional jets to handle their extra volume. today is also the busiest mailing day for the u.s. postal service. it's got an estimated 607 million letters, packages and cards being processed. i one der how many of those are going to santa claus. the sounds of the season filled the air in mid town manhattan. dozens of tenor and bass tube ba players were gathered by the ice skating rink at the rockefeller plaza. merry tube a christmas.

you know it's getting close when you see the tuba players in rockefeller plaza. still to come, will increased confidence in the european banking system lend more to the u.s. lenders? we'll have more from the big apple when we come back. ♪ ♪ i wanna spread a little love this year ♪

♪ i wanna spread a little love and cheer ♪ [ male announcer ] this december, remember -- provocative design and exacting precision come together in one powerful package at the lexus december to remember sales event, with some of the best offers of the year on our most thrilling models. this is the pursuit of perfection.

this is "worldwide

exchange." i'm ross westgate. here are your headlines. top of the moun tape for moncler. the luxury ski maker shares are up more than 40%. he says forget the price, his focus is on the future. >> my vision is long term. i don't care about the detail today. i mean, the share is 1, 2, 3, i don't know. i want to see what's happening in ten years. telecom stocks also ringing in rallies in europe. deutsch telecom on reports that sprint is eyeing its t-mobile u.s. unit. telecom italia, they have a 10% share holding. shares in asia down. the pmi numbers are down to a three-month low. a big divergence again between germany and france. and focused on the fed. investors wait for the central banks to predict a reaction whether or not it decides to scale back on asset purchases.

>> announcer: you're watching "worldwide exchange" bringing you business news from around the globe. and if you're just joining us in north america, welcome to the start of your global trading week here on cnbc. u.s. equities having their worst month in over three weeks. futures are indicating we're going to go higher at the opening. s&p 500 is currently 8 points above fair value. just about the nasdaq at the moment is around about 18 points above fair value and the dow at the moment is some 78 points above fair value, something like that in my quick math. european equities up. the ftse 100 was up. up 1% for the xetra dax and the cac quarante up. they are economically going in two different directions.

france very well might be in recession at the moment. with the start of the big week, what are investors to do? here's a recap of some of the thoughts we've already had. >> clearly we feel markets would stabilize and advance. we like those that are close to the gold story. at 2% will be the developed markets. no doubt the trend is equities. in amongst all the noise we've got to, you know, remember that that they, you know, the bull market in fixed incompetent be come is over and the incremental pound is going into the stock market. i think against that back drop it absolutely has a place. i'm very excited that we're able to find be a crack in the values especially at the smaller end of the market.

there's choppy jerp markets as we've experienced in the last six weeks. if you look at the dollar, dollar is very likely to come full growth and it's mainly driven by the fact that you have a lot of slack in the economy and that slack is very likely to go away successfully. it's not going to go away in 2014 but that's going to help the dollar. that's the thoughts of some guests. let's get some more. normalization in equities seems inevitable as u.s. employment numbers come in stronger which would send fed tapering speculation higher ahead of this week's meeting. they argue that at the end of the cycle triggering knee-jerk reaction. it would drive equity and bond markets higher. joining us is the ceo of the fund managers. thank you for joining us. >> thank you for having me. >> to you think they should

taper this week? would it be better for all of us? >> who knows. >> would you personally not like them to get it out of the way? >> it doesn't matter whether they start this week or next week. we know that the economy is stronger than people have been anticipating in the united states. that means at some stage tapering will have to start. i think the market is getting around to understanding that that is an inevitability. in terms of employment numbers, in terms of consumer numbers, house building in the states have been strong. that has been the surprise for the last year. we've argued this for the last year. the u.s. is more on the up side. you said in the introduction that i said that both will go up, bonds and equities. i said in some markets it might happen. in some markets both might go up. i'll explain why. >> yes, go on. >> particularly in the u.k. if you look from the u.k., we have a situation where the economy is stronger than what people anticipated. i anticipated the u.s. growth.

i did not anticipate the u.k. growth. you will see the equivalent of tapering in the u.k. essentially shutting off quantitative easing. in the u.k. you have a lot of pension schemes that will be looking to lock in the liabilities by buying more index, bonds or equivalents, therefore there will still be demand. therefore, in the u.k. you might have an amazing thing happening where there's monetary policy tightening. the equity markets are going up because they're responding to the earnings cycle. in the u.k. the bond market is holding steady because people are buying and the big investors are buying to lock in their liabilities. >> which they have to do. >> which they have to do. >> that is strange but not unusual. there are times in history where both bonds and equities move in the same direction. >> what's the chance that here in europe we get swamped by whatever the fed does? >> i think if you speak to the

mpc they will say to you, the friendship between europe and the u.k., the timing between the u.k. and the united states is coincidental. it so happens that both economies are doing better than expected. europe is in a better place. the numbers you've quoted are very interesting. we clearly see very strong numbers from germany. much weaker from france. the problems in europe have not gone away. the problem is the other way around. what if whatever the fed does gets swamped by something that happens in europe. >> really? >> well -- >> hang on. are asset prices going to be driven by what happens in europe? i know we did in the second part of the financial crisis. >> that sounds -- would there be others? i don't think so. i think we're going to see in europe, the fish showers will be smaller fissures. >> it will be driven by the fed? >> basically. that might have link to go your

other story which we're leading on which is about asia, that might have a somewhat negative effect on to asia because even in chinese companies dit appear that some have been having looser markets. if you start seeing essentially bonds going up ormon tear ri policy tightening in the united states, then you might see that beginning to affect some of the credit markets even in china. it's a good story for the united states. i think it's a good story for the united kingdom. it's less of a good story for the united kingdom. >> good to talk to you. i think we could do this an awful lot longer. come back quickly in the you year. >> we'll catch up then. >> great. thank you so much. sprint, meanwhile, is reportedly mulling a bid for t-mobile u.s.a. and could make an offer in the beginning of next year. they've long argued more

consolidation is needed in the u.s. wireless market but a tieup could run afoul of u.s. regulators when the government blocked at&t's proposed takeover. it said the market needed four national competitors. sprint and t-mobile stocks today are both firmer. sprint up 7.5 mers percent, t mobile up 9.6% in frankfurt trade. aig is talking about selling its aircraft business. they say they would take a minority stake in the dutch company values about 2 billion. it would create the world's biggest aircraft leasing company by size with around 1300 jets. aig shares are down slightly in frankfurt. holdings up 1.4%. and the european central bank has begun its asset quality review of 124 lenders as it moves towards assuming the role of single supervisor to

financial institutions towards next year. the year long review includes risk and balance sheet assessments as well as a stress test. it's designed to increase confidence in the european banking sector. john garr have i is the u.s. advisory leader at price waterhouse coopers. john, good to see you. is the asset quality review going to achieve its prime objective, which is actually to reassure us about the system and the exposure? we know what the risks are? >> well, certainly the aim of the ecb is to replicate what the fed did in 2009 and what the bank of england did very recently in their reviews and that's to really establish transparency and confidence in the system as a howhole. if they accomplish that, they will in fact cast a positive halo on the european banking system as a whole and that

translates into a stronger system and individually in the banks stronger competitors. >> what would the ripple effects for capital markets and investors be? >> well, you know, it's hard to say what the result will be at this point, but certainly from an overall confidence perspective, a positive result will be very good for the capital markets. it will be very good for bank stocks in europe i would say and from the -- in terms of the financial system as a whole given the interconnectivity, it should be good for financial stocks more broadly. >> yeah. we still won't have necessarily broken the link between banks and sovereigns in europe. will that matter? that was seen as a big problem. >> well, the first step is actually the creation of the whole single supervisory mechanism. in fact, the back stop which exists, the european stability

mechanism and the view is that if you bring them into the banking union, a single banking union under single rule set with some type of a back stop, you start to break that fundamental link between sovereigns and financial institutions on a country-by-country basis. >> what does this mean for european banks in competition with the u.s. we're looking at this in the united states? >> right. well, two separate things. i mean, one of the things that's important is the european banks in terms of where they compete with the u.s. are still subject to the vocal rule as well. so we don't see -- we at pwc don't see a great advantage or disadvanta disadvantage. the vocal rule discourages regulatory arbitrage. the groups and certainly individually they seek to

strengthen them in their global competition as well as regionally against the u.s. and other non-european institutions through this exercise. again, if the exercise takes place and is as successful as the fed ex err sies and the u.s. and the bank of england exerc e exercise, that should be the result. >> john, thank you for joining us. >> thank you. still to come, out with the old, in with the new. the nasdaq announces changes to its benchmark 100 index. we'll look at the impact this annual rebalancing may have on the new members coming up next. hi honey, did you get the toaster cozy? yep. got all the cozies. [ grandma ] with new fedex one rate, i could fill a box and ship it for one flat rate. so i knit until it was full. you'd be crazy not to. is that nana? [ male announcer ] fedex one rate. simple, flat rate shipping with the reliability of fedex. [ male aavo: thesales event fedex one rat"sis back. drive"

which means it's never been easier to get a new 2014 jetta. it gets an impressive 34 highway mpg and comes with no charge scheduled maintenance. and right now you can drive one home for practically just your signature. sign. then drive. get zero due at signing, zero down, zero deposit, and zero first month's payment on any new 2014 volkswagen. hurry, this offer ends january 2nd. visit vwdealer.com today at bny mellon, our business d. is investments.

managing them, moving them, making them work. we oversee 20% of the world's financial assets. and that gives us scale and insight no one else has. investment management combined with investment servicing. bringing the power of investments to people's lives. invested in the world. bny mellon. 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. you can fill that box and pay one flat rate.

i didn't know the coal thing was real. it's very real... david rivera. rivera, david. [ male announcer ] fedex one rate. simple, flat rate shipping with the reliability of fedex. and a recap of the headlines. ski wear makers big jump, moncler jumps. its shares getting more than 40%. asian shares dip as china's pmi drops. it is a big divergence between germany and france. and taper talk keeps up with experts predicting a reaction in the markets regardless of what the fed announces at this week's meeting.

now just like father time and the new year baby, every december -- new year baby, every december the nasdaq rebalances its benchmark 100 index ushering in a few new companies and saying good-bye to others. sema mody has the latest. am i being ignorant? what's the new year baby? >> we usually refer to that as stocks being added to these different indexes we have out there. the one we're talking about is the nasdaq 100. >> fine. i've never heard it called that before. there you go. i learn something every day. >> there's a new term you just learned. there you go. >> yeah. >> as we were just describing it, many call it rebalancing. what we are learning right now is nasdaq announced the annual changes to its nasdaq 100 index this past friday and the rebalancing will take place after the close this coming friday, december 23rd. that's the same day as the

triple expiration of futures and single stocks. the nasdaq 100 captures the largest 100 nonfinancial stocks and serves as a basis for the nasdaq 100 etf or known as the qqqs. it relies on a market cap. stocks are added and deleted once be a year. now this year five companies are going in and five are going out. the additions include dish network, lumina, nxp semiconductor, trip advisor and tractor supply. trip advisor is thriving on an increase in travel with 260 million unique monthly visitors. tractor supply has been a hot name. the retailer was recently tauted by cnbc's jim cramer and has been a top add. the stocks leading the nasdaq 100 this year, fossil microchip

technology, nuance communications, sears holding and dense buy. eddie lampert's efforts to restructure the company has been disappointing. the only real value of the stock is the real estate. nuance could draw fire from carl icahn over its removal from the index. just last week the speech recognition software had disappointing fourth quarter results. for people who don't want to invest in individual stocks, the nasdaq 100 through the qqq's offers through the tech sectors that track the index will have to rebalance the portfolios now that we have these changes coming in. back to you, ross. >> stick around, sema. i want your view on this next story we've been doing. we've had a leap for china's

space program. it's carried out the first soft landing. the spacecraft is now set to deploy a rover named jayden rabbit. pretty big step for china's mission to land an astronaut on the moon by 2025. at the same time, google's been taking a big leap of its own into the world of robot particulars. the california company's acquired boston robotics. the massachusetts company is the eighth robot maker snapped up by google this year. they do look weird. if you could make your very own robot, what would it do? larry deluca would teach congress to budget their in come and pay off the debt. let us know your thoughts. e-mail us or tweet us or direct to me @rosswestgate. sema, big question, if you had a

robot. >> if i had a robot. >> what would you want it to do? >> it would make me a cafe latte every morning and maybe a whole weight bagel with jam. that would be amazing. how great would that be? >> perfect use of robot technology would think. simple. >> may i ask, what would your robot do, ross? >> simple repetitive tasks. what would i -- i'd probably get a robot to swing a golf club for me when i was feeling a little hung over. that might be -- >> okay. >> you know, something like that. >> i could see that paying off. >> domestic chores. that's what we want robots for, domestic chores. >> sure. >> ironing, making the bed, doing the washing. you know, cleaning up after dinner. that sort of stuff. >> absolutely. >> all right. thanks for that. have a good day there state side with your coffee. yahoo's marissa mayer posted

an apology. she said the outage happened from a storage system problem. while engineers thought the problem would be quickly fixed, many still didn't have access for several days. some accounts blocked incoming e-mail. meanwhile, a management shakeup has happened at blackberry. the head of mna are the latest to leave. their departure comes after the cfo and coo all stepped down. still to come, the focus this week of course squarely on the fed. we'll look at why trading could be volatile no matter what the central bank does. ♪

[ male announcer ] how could a luminous protein in jellyfish, impact life expectancy in the u.s., real estate in hong kong, and the optics industry in germany? at t. rowe price, we understand the connections of a complex, global economy. it's just one reason over 70% of our mutual funds beat their 10-year lipper average. t. rowe price. invest with confidence. request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing. 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. [ male announcer ] this december, experience the gift of unsurpassed craftsmanship and some of the best offers of the year at the lexus december to remember sales event. this is the pursuit of perfection. open to innovation. open to ambition. open to bold ideas. that's why new york has a new plan -- dozens of tax free zones all across the state. move here, expand here, or start a new business here and pay no taxes for ten years... we're new york. if there's something that creates more jobs, and grows more businesses... we're open to it. start a tax-free business at startup-ny.com.

investors this morning have slightly warmed up to the luxury ski jacket maker moncler. its shares are up 40% as it started to trade for the first time in milan. the share price is set to be 27% over subscribed. claudia is with us from the milan area. claudia, what happened here? did they not realize the level of demand? >> you know, there really was a surprising effect here this morning. you know, that stock was up 40% already when, remember, the raeng range was 8.75 to 10.2. it was 30 times over subscribed by institutional investors, 14 times over subscribed by the private investors. obviously there is a lot of

appetite. this is considered the biggest success for ipos in italy. this morning it was all lit up. there was a big show in every sense of the word. there were models dressed up with all of the moncler clothes. once the chairman of the group started speaking after the stock started trading, it snowed inside. so it was much of a show. it was a show for also how it performed. it came in at the top of the range so it was not surprising to see it do so well. the company has also in terms of its numbers performed quite well. 35% rise in revenues in 2013 versus 2012. this is what the chairman had to say when i spoke to him just minutes after the stock started trading. >> when we talk to the private equity guys, i never think about top line, i always say to my

people, my people in the company say we have to do a good job. we have to really work on the product, do the best, then the numbers came. i don't know what's happened today. i want to see what's happening next ten years. my vision is long term. i don't care about the detail today. the share is 1, 2, 3, i don't know. i think i want to see what's happening in ten years. >> so is it the sector that it comes from or is it just that there's a lot of appetite? that's still the question. looks like 2014 the italian borst may be seeing more listings because it looks like that's what this market wants. >> claudia, thank you. still a debut for moncler. u.s. futures are indicating who might get a jump up this morning after the worst week in three months for the likes of the s&p and the dow. michael gerkin is with us from spectrum asset management. michael, we can't go quietly

into christmas with this fed meeting this week. what are people going to do ahead of it? >> i think there's going to be a common theme this week, ross. normally what happens if you just take a step back and look at the market, you have a nasdaq 30% higher and the broad market over 20. you would expect to start seeing some tipping here in equity markets, not just taking profits but maybe a pull back. with the fed, like you saw the german two year this morning, more importantly what we're starting to see in long yields in the ten year is expectations are eventually with the fed going to be higher rates. there will be a tightening a year away with the implementation of tapering it could be very soon. january, maybe march and you'll start seeing this bump up in rates. then expectations start to move. this is the time where you're starting to set the table, ross. >> are we going to get a lot of volatility? we have expires at the end of the week, haven't we? >> if we get volatility at all in december, it's going to be just on a couple of days and i clearly think one of them is

going to be this week and then probably one more before we close the books here but it's not going to be volatility from opening bell to closing. i'm not looking for that expectation being met. >> michael, would you prefer it if they did make an announcement this week on tapering? would it be nice? my view is it would be nice to get it out of the way so we can plan for january. >> well, there will be a hint in some of the vernacular regardless, but in that being said, i think the chances or probability of implementation or any of that happening with the fed is zero. to get it out of the way, we are so close from one meeting to the next, what will happen is we'll get one more employment number before the jarnuary meeting and that's important. >> michael, thank you. i've avoided the spurs and their loss. you'll be happy i didn't mention it. thanks for that, michael.

that's it for today's "worldwide exchange." "squawk box" coming up next.

good morning. the central bank's final meeting of the year this week. will they or won't they. most americans see the stock market either flat or lower by the end of 2014. and it's traditionally the most wonderful time of year for the retail industry, but now some fear that rough winter weather could spell trouble for many of the nation's biggest stores. it is monday, december 16th, 2013, and "squawk box" begins right now. ♪ it's the most wonderful time of the year ♪

♪ with the kids jingle belling good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernin and andrew. the fed is likely to dominate this week's market conversation. policy makers will gather tomorrow for the start of a two-day meeting. an announcement is due wednesday afternoon. chairman ben bernanke will then hold a news conference. some economists are looking for the fed to announce the start of a taper with the back drop of a budget deal. steve will have more in the next half hour. by the way, stocks are coming off of their second loss. the stocks this morning look like they're up pretty sharply. right now the dow futures up by 87 points above fair value. s&p up by