you're watching "worldwide exchange." the chinese economic fears weighing on stocks. service growths on the two-year low and he calls the growth in china and his biggest concern. and the spanish numbers offer reasoner for investors optimism. british chancellor george osborne warns more pain is on the way. he's laid out a plan next hour to extend austerity. and there's signs of trouble

on the high street with them falling near the stock 600. and the prime minister tells cnbc exclusively the muslim brother is no longer welcome in his country. >> physically, they feel more and more excluded. they are in a state of denial, so they are really stuck. hello and welcome to the first "worldwide exchange" of the week. we kick off the data out of the eurozone, we are unchanged from the estimate, 52.1 in december. 52.1 in november. enjoying a fairly strong finish to 2013. so new orders in at the fastest

pace since june 2011. the employment index hitting the 50 mark for the first time in two years, that means employers are hiring people just as many as they are lagging off. but france seems to see the flash repeated. there's a better number out of spain as well. euro/dollar at 1.3601 away from the number we hit weeks ago. we'll get thoughts from kathy, is sturgon manager. happy new year. >> happy new year. in 2013 there were russian consultants in europe and core

europe. now it's really false for expecting italy underperforming. they are underperforming on pmi today, but gdp is down 0.1%. and looking inside gdp it is more import, less export, the worst combination. >> france is 40% of user gdp. >> yes, the key is for all of 2013, we know that this year we are looking for exchange followed by european exchange in may. >> how much of a head wind that isn't priced yet for investors into the eurozone. if marie la penn gets a big showing and gets a solid ball income the u.s. parliamentary elections as well? i mean, they are an anti-euro

party, right? >> there is now in europe, like the tea party instead, there's the anti-establishment party across europe. like what you keep or the five-star movement, which is really anti-european establishment and anti-party. if they don't compromise from a strong solution, it could make a policy decision much more difficult, but in europe. >> all right. that's the eurozone, china's sub sector slowing down sharply next month. hspc's pmi down to the lowest level in two years following the official reading of 54.6 for month low. joining me is steven, thank you for joining us. chinese stocks didn't do well last year down 7%. they are down 4% so far this

year. how much of a concern are these pmi numbers in that? >> well, the gross momentum is decelerating, i think if you look at the major drivers for growth, the investment consumption and also exports, certainly consumptionresilient,d be downside on the investment side given that cost in china is going up. in march we had the liquidity call to show that liquidity is slowing down in china. and in november of last year, the yield spike in the interbank market. and certainly the investors are heavily depending on the shipping liquidity, so that's a downside risk. in the meantime, i think that they are hoping that external demand could pick up to provide

some growth for this year. overall, this year, it could still be like last year, a stock picker's market. >> they are arguing that the nation's growth model has run out of steam as the biggest concern this year, what's your biggest concern about china? >> i think the fact that the new leader needs to balance well between maintaining some minimum level growth to generate 12 million jobs, while in the meantime they are facing a lot of challenges down the road in terms of rebalancing the economy, i think from overcapacity for deleverage in the interbanking system and controlling government debt as well as cleaning up financial sector. i think it is quite a high task for them to balance well all this challenging task.

>> yeah, i think what is happening in china is interesting because the stock market went up 30% and china is down. in the u.s. the price for both are at 25. and therefore there should be value investing going into china. having said that, the picture in china is not really improving. we have venues after venues, because news is on the surface of december, 56,000 in almost 400 cities in china. local government could have debt of 33% of gdp. we are talking about very, very large number. and what we have seen in 2013 is the economy having the lowest interest rate or the most in the entire policy. so therefore it's very important to add a very low cost of

funding because if you start doing your income bank lending rate is over seven days near 4.5%, it's probably going to go up again to us chinese new year and there's some structural problem meaning government funding and shadow banking that we push this interest rate higher, i think. >> do you see that happening, steven? and clearly compared to the rest of the world there must be some value in chinese stocks, mustn't there, or not? >> i think it's very tempting to look at the evaluation and saying china is a good buy at current level, but, in fact, if you look at the funds low, we see some moderate funds inflow in october/november last year, but unfortunately the funds are living the hong kong market, the china stocks in december.

fundamentally i think not only do investors have yet to be convinced that all the reform acts could be carried out smoothly in the coming year, and even if they could carry out those reforms as planned, usually in the short-term, that means more pens, more growth and more higher market valuetivety, which is not positive for the stock market. >> steven, thank you very much for that, steven sun at hsbc. we'll come back to you in a second. the hedge fund manager george soros says the slowdown in china is his biggest concern. he said three years of worrying about the eurozone should not give rising to the hard landing in they china. he argues they have run out of luck.

what is your biggest concern? tweet me @cnbcwex. your biggest concern? >> my biggest concern is seeing 3% growth in states, which is remarkable growth, but we see in europe, except france and italy, you see in europe things are improving. in japan the growth is there, in the u.k. we see quite good growth, so i think now the challenge is for a government policymaker not to be too much complacent and continue physical confrontation and structural reform. i think that will be the key. >> let us know what your biggest concern is by getting in touch with us. global equities, the dow jones stock 600, take a picture of this. pretty even stevens, really, between advances and decline. the decline has just about had it by a short nose, but dow 600

is down a quarter of a percent. ftse very flat in low volumes, right now it's down another eight points. we'll be looking at the retailers during the course of the week. we'll talk to mark spencer as we don't think the gross has done particularly well, but next week has done potentially well. the ftse is up a third of 1%. some italian shares have fallen at the open after telefonica denied a report it was looking to join telecom italia. comm bank up 3% as they look to sell their banks in germany. the opportunity to expand that

space and expand their management wealth business. and they have criticized deutsche's management into the probe of possible liven manipulation. in the next few minutes we'll go live to germany for that story. and we'll keep our eyes on yields today, we have sectors from the u.k. coming out in 18 minutes or so. the price of u.s. money at the moment just below the 3% mark we were at over the new year period. on the currency markets, euro/dollar has pulled away to 1.36. the dollar has also pulled away from the five-year high or low in terms of the yen at 104.58. and the aussie has pulled up as well while sterling hit 1.6592, the highest, and now we are currently at 1.64.

that's where we stand now in europe. it's time to say happy new year to the most important person we speak to out of asia every day. sichuan is with us. hi, li sixuan. the shanghai composite dipped early in the session. the index lost 7.6% last year and is down nearly 4% since the start of 2014. meanwhile, the hang seng index in hong kong lost .60% today. japan is also among the biggest losers hurt by the weaker dollar against the yen as you mentioned in concerns over china's economy. the nikkei tumbled 2.4% with mining and shipping companies seeing heavy sell-offs. and down us trail ya east a half percent, but south korea gained .40%. heavyweight sam sung electronics added to 1% ahead of the very

much anticipated earnings guidance tomorrow. let's take a look at chinese banks. they were broadly weaker while beijing issued wide-ranging new rules to strengthen regulation on shadow banking. meanwhile, heavyweight property developers also came under pressure of both the mainland and hong kong voices. this comes as authorities announced moves to streamline mortgage financing from the national housing provident fund. so that's a quick update of asian markets. back to you, ross. >> thank you very much, li sixuan for that. let's get a few more thoughts from yanik, what's the role of bcb going to be? >> well, first of all, it could be the picture in europe, not as good as the u.k. or in the states or as in japan. we are probably going to see a third euro, we might see negative interest rate. i don't really think so, but

it's possible. we could see the central bank in 2014. >> how does that show what happens to european stocks? >> well, i think it's a positive factor. i think what we have seen -- the problem was the fact that regardless of the interest rate set in the bcb, the rate of funding for most of company and a lot of banks and a lot of country in peripheral europe was very different. now we see some opposition. if we look at the ten-year in italy, it's been 3.5, so all we know is that we see the cost of funding is getting a bit more emergency in the eurozone. that should be positive for bank lending to start again and company overall. >> a couple stocks, you say sector performed last year was

big european oil and expiration companies. you said that may rebound again, why? >> venue, they are quite expensive and overall in terms of price it is still very high. so i think that instead of just doing index following, i think 2014 will be a year for relative value within the universe. i think the european company have been doing quite well. there's been no growth of production. they have been spending a lot of money in terms of cap x. we are probably going to see a small growth of prediction, better cash flow across the industry, and therefore a lot of large boring companies should do

very well within this group. i favor statoil because of the currency effect much better than it used to be. the investment in the sub quarter, we saw that sharply with capex, and on the other hand is the portuguese oil company that is moving from downstream to upstream with very good, very interesting prospects. so i think both companies could do well in 2014. >> we wish you to do well as well in 2014. come back and we'll see how you're doing with sturgeon capital, good to see you. you can e-mail us at worldwide @cnbc.com. the pollies of the new bank of england are doing well, according to the latest survey. we'll have a report in 15

minutes' time. toyota sold more than 20,000 cars in china last month, up 20% from a year ago. but could they struggle to keep this territory as the disputes continue? we'll get the latest from tokyo. despite 2013 seeing $40 billion of outflows in gold etp's, exchanged traded products, they are still the sixth biggest trader of the precious metal. we'll be joined by guests to see if etp's will still glitter this year. and finally, the egyptian prime minister says terrorism cannot be eliminated but warns the muslim brotherhood is no longer welcome in his country. more after this. honestly, as much as i love this job, i plan to do a lot more.

i needed a new laptop for my pre-med classes, something that runs office and has a keyboard.

but i wanted a tablet for me, for stuff like twitter and xbox, so my downtime can be more like uptime. that's why i got a windows 2 in 1 which does both -- works as a laptop and a tablet. so i can manage my crazy life, and also have a life. [ beep ] gotta go. ♪

last month he called them a terrorist organization, now the egyptian prime minister told cnbc in an exclusive interview that the muslim drear hood is no longer welcome. we've been speaking to the leader in cairo about the political uncertainty. >> as you probably know, this is a transitional government, and we are going through a transitional period. so when you are moving from one system to another, you can expect everything.

there is no doubt that we are going through a major change, and there is a political regime, which unfortunately mismanaged and created a lot of discontent with the population to the extent of that as you know. the people took to the street in an unprecedented manifestation. we are in a situation where by there is a minority, which is trying to create all sorts of problem to the present government in order not to proceed mostly to the next stage. >> so what information do you have to connect the muslim drear hood to terrorism? >> we have evidence from many leaders of the muslim brothers who said as far as the present

government is not changed, you will see all sorts of trouble, you will not be quiet, they will create all kind. so there were many declarations made by their leaders to the extent in as far as they go back to the government and will not rest. >> what are you doing specifically to combat the terrorist acts we have seen over the last several months? >> one of the most difficult things is to control terrorism because they are committing isolated action here and there. so one thing is to have precaution, to learn from previous experience, that is information, exchange of information expelled, but you cannot have a situation where there is zero terrorism.

this is a period which inevitably we have to go through, but the important thing is that it is being reduced. first of all, they are losing the support of the public opinion. this is very important. i think they are starting to lose their self-confidence. this is also important. and the government, i would say, is increasingly in command and so inevitably this will take some time. and i think what some events will have an important impact on the psychology, one of them is the next referendum. this is why i think i will not be surprised that they will increase the attempts to create this kind of uneaseness, to create this kind of fear. >> the egyptian prime minister

speaking exculusively to hadley. he is joining us onset now. he talks about the security situation. >> he's basically saying there he anticipates there will be more violence, he anticipates more attacks, and on the flip side you have the muslim brotherhood who see this as the greater struggle for political identity in the sense they are going to dig their heels in and are not going anywhere. we have seen some reports in recent days about basically they're being targeted by the government but they are not going anywhere. so you will continue to see political instability ahead of the referendum. >> you talk about the referendum, just remind us how we think that's going to play out. >> well, i did ask the prime minister what kind of outpouring of support he's expecting and he's seen the different political parties that nobody's come out directly in opposition to this constitutional referendum, so basically what you're going to see the referendum take place in the next week there, may be violence

around this, but what he's really gunning for is presidential or parliamentary elections going on in the next six months. it doesn't matter whether the parliamentary or presidential elections go first, but it's the security situation to make sure they have a plan in place to get the security situation under control. >> this all started in egypt partly because the cost of living went up, the cost of food, basic items, what has happened, what's happening now? >> in terms of the subsidies? >> food prices, subsidies -- >> the problem, too, with the economic situation, i asked the prime minister, is there a political will to cut the subsidies a problem for the last seven years and he said absolutely not any time soon because basically if you speak to economists and activists, they say this government is very afraid of the street. if they go after subsidies, there will be a reaction in terms of protest and that would add fuel to the fire, so to speak. so in terms of subsidies, he has a five to seven-year plan in

place and follow along as we get closer to the presidential and parliamentary elections, but no plan to control subsidies. >> thank you for joining us. in cambodia police have made their first arrest under a new ban on public protests. five activists calling for the return of those in police. four people were dead and dozens more injured. anti-government protesters planned off their protest for sunday following the crackdown. in thailand thousands of anti-government protesters marched through the streets of bangkok yesterday hoping to drum up support for the next rally monday to shut down much of the city. protesters are about to stop the february 2nd election and are putting pressure on the prime minister to step down.

well, we're going to get subsidy pmi data out of the u.k. in a few moment's time. then we'll talk about the risk appetite back in british boardrooms with a majority of finance chiefs saying now is the time to expand. we'll speak about the report and get the full cost for 51 in line for prior falling slightly from that level. 58.8 in december from november's 60. the lowest since june. and the u.k. services component up to 30.5. the composite pmi is down to 59.5 in december from november's 60.4. that's the lowest since july. still a very strong number, though. and markets suggest this pmi points to fourth quarter gdp

growth above 8% quarter on quarter. and therefore 2013 growth of 1.9% year on year. so u.k. subsidies pmi 50.8 in december from november's 60. and we thought it would stay around 60. it's still a strong number, but generally the december activity just slowed a bit. sterling dollar is at the low point for the session. we'll have more reaction on that and how confident sfo's are in the u.k. right after this short break.

the headlines from around the globe, eurozone pmi's are out with the u.k. services sector expanding at the fastest pace in six-and-a-half years. chinese service sector is down to a two-year low for december. george soros calls the slowdown in china his biggest concern. british chancellor george osborne warns more pain is on the way getting ready to lay out a plan in the next hour to extend austerity. and this with signs of trouble on the high street to mark a falling in the bottom of the

stock 600. and egyptian's prime minister tells cnbc exclusively the muslim brotherhood is no longer welcome in his country. >> politically, they feel more and more isolated. they are in a state of denial. so they are really in a corner. we start off the show with u.n. service pmis unchanged. we just had the u.k. number how. service pmis came in weaker than forecast, 58.8 down from 60. the expectation component is up to 73.5 in november. that's the highest since march 2011. markets show the fourth quarter gdp above 8% and 2013 growth for a whole around 1.9%. and this survey comes out at the

same time that business optimism in the u.k. is running at the highest level in more than three years, this according to the latest survey which shows this is a good time to take risk. joining us is chief economist, good to see you, thank you for coming in. your survey reflects the other surveys or your surveys reflect their surveys. >> what reflects this is we are looking pretty bullish. we are seeing the chief financial offices have a snapshot of risk, and the way they are running their balance sheets have changed significantly in the last year, so they shifted from the defensiveness to expansion. >> the cfo says we are prepared to take risk, does that mean they will invest? >> one would hope so, yeah. we also look at their balance sheet priorities for the next 12

months and the recurring theme from the last five years is building up cash, now the top priority is expansion. and i think there is clearly a premium on companies coming up with innovative ways for growing their business. >> expansion strategies have overtaken defensive strategies as the predominant thought process. is that what you're saying? >> exactly, yes. >> and how -- what kind of expansion strategies? does that mean investment in people? does that mean hiring more? what does it mean? >> yeah, well, we actually ask them about what expansion means and what we are seeing is very strong readings for capital spending, for hiring, for organic expansion both at home and overseas. there's also a bit of a tilt back towards doing stuff in the u.k. and europe. for much of three years, the focus has been on the growth outside of europe, so i think what's encouraging is they are thinking more about growing in

europe and the u.k. >> why is that? have they reassessed their estimates of where risk lies? >> i think that is the case. i think you have seen a decline in terms of the single currency, and significantly improved credit conditions. these guys are telling us they have very good access to all forms of capital. at the same time, you are seeing a slowdown in emerging markets, which maybe is taking some of the euphoria which is around emerging markets in recent years. >> clearly there's a lot more confidence about the outlook for the u.k. economy, what do they put that -- how much credence do they give to mark carney? >> we also question mark carney on how he's done since july and they are very positive about mark carney and banking policy, which includes forward guidance. interestingly, they are not

convinced that inflation over the medium term over two years is going to stay below target. they generally think inflation will run above target. they also think overwhelmingly rates will start rising. >> right. do they think they are going to be paying people more? it's going to be key, really, for what happens to rates. >> it's going to be very important. my -- we estimate pay and hiring, and they are bullish on hiring. and we obviously know from official data there's a strong rise in sector employment. it is consistent with the notion that earnings are going to start rising this year. >> did you talk to the chancellor about economic policies or not. >> we did talk some about that. >> fair enough. the reason i ask that is because it's only six days into january, but the chancellor today is giving a speech laying out the political battle lines for 2015. the chancellor will reinforce plans to cut government spending and reduce taxes. he will also highlight the conservative party's vision to slash immigration, cap welfare

and improve instruct. it comes a day after the prime minister david cameron said the state pension will also continue to rise by 2.5% until the year 2020 if his government is re-elected. we'll get further coverage of george osborne's speech when it starts a little bit later. jpmorgan is reportedly expected to pay slightly more than $2 billion to settle allegations it failed to warn about bernie madoff's ponzi scheme. the company was made a prime bank for years. reports say settlement could be announced on tuesday. the bulk of the fines expected to go to madoff's victims. reports say jpmorgan hoped to resolve this case before reporting fourth quarter earnings on january 14th. jpmorgan stock flat in frankfort. and germany's banking supervisor buffett has criticized deutsche's live manipulation according to a report in the nation's "spiegel"

magazine. we are joining now there live and happy new year to you. >> reporter: happy new year to you. they have done two different studies by the supervisors for the bank. and deutsche bank failed to clarify and thus investigate its procedures regarding the live or manipulation or alleged manipulation. and the other study found several insufficiencies. this doesn't sound good when it comes to the manipulation inside deutsche bank. also one of the studies found that there's no clear action in

terms of stuff. that means there are no clear layoffs regarding those who allegedly have been found guilty manipulate i manipulating live rates inside deutsche bank. and also these reports are showing according to "spiegel" that senior management is not yet cleared. that is something completely different than what we were hearing before from deutsche bank because they were saying all the time that their management board is totally cleared of any allegations regarding this, so that means andrew jane could still be responsible for the live manipulation inside deutsche bank according to bafin, but this is still up in the air. >> thank you very much.

meanwhile, the ftse was flat last week. we are barely moving high er as we are up two-thirds of 1%. the ten-year bond yields are lower that is you might expect. and ten-year treasury yields just under 3%. joining us with his thoughts, the head of the strategic corpora corporate, francois, we look at the exceptional 2013, we can't possibly continue in the same vain? >> don't be optimistic at the beginning of this year. happy new year to you, too. to be more serious, to the extend of last year we had a shot falling of what we call the

risk premium and now the market has adjusted to gdp forecast and earnings momentum. so to the extent that the earnings momentum will remain fairly strong and we expect about 10% earnings growth or so. we would expect the market to perform accordingly. so you're right, the risk premium now is not a story anymore. we will be very much focusing on growth in gdp and growth in earnings, but it was very interesting what has been cede earlier on regarding expectation in the u.k. because in france i would say we aren't expecting somehow to say move i.e., we do expect capex to go up. and let me tell you, that's not consensus at this stage, but we are starting from a very low level to financial situation of corporations that are very strong right now, and we are expecting them to start investing again. >> investing in france or outside of france? because you look at the pmis,

clearly the french pmis are of some concern. >> indeed. below 15. when i see that, you are disappointed in the u.k. because you are below 57.8 or whatever was expected. i wish we would break the 50 level, but we are expecting that pmi to improve during the year. so yes, eventually we will see capex also increasing in 2014. and even in france, but again, it's because we are coming from such low level that we are expecting capex to move up from level of sort of a decline of 2.3% in 2013 to being up about 0.4% in 2014. so we are talking about a very slow growth, but still a positive figure after a negative one. >> and where do you go on the stock spectrum, francois? >> well, definitely, we are looking at value stocks. that's clearly where you can see the evaluation remains very low.

and expectation earningswise are not overly optimistic, so things such as the current industry, which clearly has outperformed in the second part of 2013, we would expect the move to continue with the more positive momentum in france, but also likely to continue over 2014. stocks like michelin also linked to the industry will benefit from that move. on top of that, they have extensive cost-cutting program and we expect earnings gross momentum to accelerate in 2014. lafarge and the construction industry as well should benefit from the more positive move after the drastic figure that we're releasing in 2013 in europe, but also lafarge will benefit from the positive momentum in the u.s. as well. we have clearly seen the start of more positive momentum on

housing stocks. finally, the financial sector is likely to continue to benefit from the low level of risk and regard i regarding our top pick, the benefit from excess cash, yes, i'm talking about excess cash that could be used for acquisition, they have been buying out minorities in belgium at the end of 2013. they could look for an acquisition and why not in germany? >> ah. okay. that's an interesting thought on excess cash. francois, good to see you. we'll see you again over the course of the year. japanese automakers have revved up in 2013 as sales continue to cover both markets. we have more from tokyo. hi makiko. >> reporter: hi, ross. japan automobile dealers say the unit sales in the japanese

market were up nearly 19% in december compared to the year before. it was the fourth consecutive month that saw sales rise from 2012. hybrids and other eco-friendly car demand drove higher as consumers rushed to buy before the consumption tax hike in april. and toyota was up nearly 12% selling over 102,000 vehicles. honda doubled its sales to 38,000 as nissan was up 1% at 31,000. but for the whole of 2013, sales were down 3.8% from the previous year. the sales were also strong overseas and toyota says sales in china reached over 917,000 units last year, up more than 9% from 2012. honda jumped 26% selling nearly 757,000 units. but even so, japanese makers are faced with fresh challenges in the new year with china's auto market forecast to grow nearly 10% and increasingly competition among foreign makers.

there's also worry that prime minister abe's visit to the slooip last month could lead to anti-sentiment in china. that's all from the nikkei. back to you, ross. >> thank you. still to come, christmas bargains gave retailers a boost in december, but will discounts take a bite out of the bottom line? we'll take the pulse of global spending right after this. fifteen minutes could save you fifteen percent or more on car insurance. everybody knows that parker. well, did you know auctioneers make bad grocery store clerks? that'll be $23.50. now .75, 23.75, hold 'em. hey now do i hear 23.75? 24! hey 24 dollar, 24 and a quarter, quarter, now half, 24 and a half and .75! 25! now a quarter, hey 26 and a quarter, do you wanna pay now, you wanna do it, 25 and a quarter - sold to the man in the khaki jacket! geico. fifteen minutes could save you... well, you know.

there's nothing like being your own boss! and my customers are really liking your flat rate shipping. fedex one rate. really makes my life easier. maybe a promotion is in order. good news. i got a new title. and a raise? management couldn't make that happen. [ male announcer ] introducing fedex one rate. simple, flat rate shipping with the reliability of fedex. everything looking good. ♪ velocity 1,200 feet per second. [ man #2 ] your looking great to us, eagle. ♪ 2,000 feet. still looking very good. 1,400 feet. ♪ [ male announcer ] funny thing happens when you shoot for the moon. ahh, that's affirmative. [ male announcer ] you get there. you're a go for landing, over. [ male announcer ] the all new cadillac cts, the 2014 motor trend car of the year.

this cold winter weather is helping out asia's top clothing retailer. they saw sales rise more than 1% in december as they rush to stock up on winter clothes. parent company fast retailing down 6% in its 2014 debut. the stock nearly doubled last year. and in the u.k., shares in retail also take a hit after price targets were cut over clothing discounts took place in the pre-christmas period. according to a new report from moscow advisers, the retail

sales were boosted by black friday. overall, up 3.1% compared to total growth of 3.5% for the same month. and joining me is ceo of mastercard worldwide. sarah, good to see you, happy new year. >> happy new year to you. >> let's kickoff the u.k., how much have sales been driven by discounts running up to christmas? >> i think quite a lot. you actually saw this, both in apparel and electronics, which obviously we had new consoles out this year and new drivers there, but interestingly enough the discounting takes the overall retail number down, actually. >> what's extraordinary is that we're going to hear from retailers, there seems to have been some big winners and some big losers. next last week was stunning, it looks like the grosses have not taken the market share somehow. >> actually, that's not the

case. the strongest sector in spending pulse during the month of december was grocery. and that's where the u.k. consumer decided to put their holiday spend. and what we really see is this sort of needs versus wants. and so people really focused on needs and also the socialness of having a holiday period. and so people went to the grocers rather than -- >> i was hearing it was quite a tough christmas and there's this concept for retailers compared to their expectations it was tough. so we'll see what happens. how would you describe at the moment consumption or consumer confidence in the ability to spend? >> well, this is the real challenge here, we have obviously seen improving economic statistics and the government ministers talk about it all the time, yet the consumers actually are not coming along there. so the discretionary spending, jewelry was up over the holiday, but not robustly. and apparel was negative, furniture was negative, which is

surprising given you have seen the rebound in housing prices. >> yeah, but off the low base, though. >> exactly. so the overall sort of mood is positive. it took the overall annual growth rate to 2.4% better than the 2.2 in 2012 but nothing exceptional. >> the big stock market gains in the u.s. last year. any sign that has the feds through? >> the big change occurred in october where we saw the drop in gasoline prices. and that was the focus that caused us in spending to see people say, okay, i will go spend -- we saw this final move, i look for the discretionary spending, that you don't have to buy, so restaurants and jewelry and the like. and when we saw that pop in october and that carried through the holiday period, but again, holiday was only up 2.1% encompassing november and december. but what was interesting is that the consumer both here in the u.k. and in the u.s. really

figured out the online channel and used their mobile, tablets, their master pass, things like that to be able to execute their transactions. so we saw double-digit growth in both countries in terms of ecommerce sales. >> you composite stuff in the emerging markets and we keep talking about the consumption trends in brazil and emerging markets, is it growing as strong as we thought it was? >> it's been an interesting ride there. we better hope the consumer spend spending down there -- inflation was quite high, but as inflation subsided over the last few months, we have seen the increase in consumer spending. now that it's coming back, we'll have to watch that it continues. >> stay there for a second as i ask you one final question. we are asking what is your biggest concern for 2014?

concerns are in east china and in the west complacency. meanwhile, we are hearing a concern of a brick nation slowdown. sarah, what's your biggest concern to be? >> my biggest concern is if there isn't this sort of continued stable growth that we see to give the consumer confidence to go spend. that's my concern. so the unexpected. so when we have a government shutdown or we have, you know, some sort of instability around the world, that causes the consumer to grip up much quicker than they used to. >> that's sarah's biggest concern. we want you, the viewer, to e-mail us at worldwide@cnbc.com or tweet me @cnbcwex. sarah, thank you for joining us, president of mastercard adviser. and htv earned $10 million

thanks to an asset sale, but despite improving on the $100 million net loss, their profits stayed in the red hit by slumping sales. the stock shifted close to 4% today as htc dwindled to a mere $4 billion in stock. on the agenda tomorrow, we'll find out if last week's fears over samsung's are justified. corporate earnings are due from a couple japanese retailers, familymart and seven & 1. and we are expecting trade numbers out of australia and taiwan. so plenty to come through there. do you have thoughts or comments? please e-mail us, the address worldwide@cnbc.com. we are asking what's your biggest concern for the year ahead. that's going to be of key interest, this is after george

soros changed from away from the eurozone to the slowdown in china. that was by the market pmi numbers that came in 50.9 in december. new business is slow on the fastest pace in six months. so that's what we have been seeing. we'll take a short break. still to come, though, on the show, as investors prepare for the first full trade in weeks, we are watching both equity and credit. does that mean there's going to be a sell-off? we'll tell you when to expect the correction in the second hour of "worldwide exchange" continuing right after this. honestly, as much as i love this job, i plan to do a lot more.

i needed a new laptop for my pre-med classes, something that runs office and has a keyboard. but i wanted a tablet for me, for stuff like twitter and xbox, so my downtime can be more like uptime. that's why i got a windows 2 in 1 which does both -- works as a laptop and a tablet. so i can manage my crazy life, and also have a life. [ beep ] gotta go. ♪

you're watching "worldwide exchange." i'm ross westgate. japan could be facing another fine as they announce a settlement this week over failing to warn over bernie madoff's ponzi scheme. the pmi numbers are out with the service industry expanding on the fastest pace in six-and-a-half years. and sector growth was down to a two-year low in december. george soros is calling china his biggest concern of 2014.

and as clashes in cairo leave 17 day, the egyptian prime minister tells cnbc that the muslim brotherhood is no longer welcome in his country. >> politically, they feel more and more isolated. they are in a state of denial, so they are really in a corner. plus, residents from a midwest, northeast and midatlantic are being urged to bundle up as a deep freeze is set to hit much of the u.s. this week. you're watching "worldwide exchange" bringing you business news from around the globe. hello, warm welcome to you. if you are just joining us stateside, welcome to the start of the global trading week here on cnbc. we kickoff a look at the futures, the dow down 24 points. the s&p down half a percent right now. we are some 22 points above fair value for the dow, and the nasdaq is around 3.5 points

above fair value and the s&p 500 is about 1.5 points above fair value. we'll look at the ftse global 300 down a quarter of 1%. and european equities at the moment, well, they have been fairly flat in kickoff today. the ftse 100 was flat last week and is down a tenth of 1%. service sectors mpi, 58.8, a little weaker than the 60 we were looking for. the expectations component, the highest since march 2010. and it looks like we have had around annual growth near 1.9% in the u.k. we have the final comp pmi numbers coming in as expected, but there's divergence between france and germany up .60%. and treasury yields are 2.19%. and the euro is near 1.36 at the

moment against the dollar. the yen has pulled away from the five-year high near 104.55. and we are a little weaker on the session. the recent high was the highest since august 2011. that's trading here in europe. si xixuan is here with the latest. >> reporter: hsbc's december reading fell to the lowest level in over two years adding to signs of slowing momentum. meanwhile, hong kong's hang seng index is also dragged lower by china enterprises ending lower by .60%. meanwhile japan was also among the biggest losers hurt by a weaker dollar against the yen in concerns over china's economy.

the nikkei tumbled 2.4% with mining and shipping companies seeing heavy sell-offs. australia eased half a percent today on south korea's kospi gaining a modest .40%. heavyweight samsung electronics added nearly 1% ahead of the much-anticipated earnings guidance tomorrow. and let's take a look at chinese banks, they were broadly weaker on concerns of interbank financing reforms. meanwhile, beijing also issued wide-ranging new rules to strengthen regulation on shadow banking. meanwhile, chinese railway stocks also underperform today. china railway group tumbled 4% in hong kong and over 4% over in the mainland. this after news that the group's president committed suicide over the weekend after battling with depression in receipt years. and according to a report from the official agency, the heavy debts that his company has rung up may have him partly to blame

for his depression. the stock is also under pressure in todd's trade. back to you, ross. >> thank you, li sixuan. we'll have the readings coming up at 10:00. also at 10:00 we get factory orders expected to rise 1.5%. and the president charles plosser spoke at the american economic association on saturday and plosser said $25 billion is a hypothetical amount. he said there's no problem with the gradual end of the program, but he prefers it to end sooner rather than later. at the same time, the boston president ascented against this program urging patience because he says this risks a permanent

rise in u.s. unemployment. all this as the u.s. senate returns from its holiday break today poised to confirm janet yellin as the next chairman. her nomination will take place at 5:30 eastern. last month she cleared a procedural vote in the senate. she would be the first woman ever to lead the federal reserve. so joining us for the last part of the show today, frances francesco, happy new year. we'll kickoff with how the fed now plays in to you thoughts on investment from here on in. are there any tapering, we started tapering, we are comfortable with it, are there risks to investors? >> market is overvalued, so now over the course of 2014, whether the market is able to close the

g gap, so fundamentals can go out and close the gap, they are looking into the tech revolution and the showing in manufacturing is big enough to close the gap. in addition to that, the next question has become in the market we'll be able to close the gap and to watch the balance sheet expansion. because the biggest correlation between the market balance has been with the balance sheet expansion over the last few years. today we stand at $4 trillion. at the end of the year we are projected to be 4.5 when the data is compiled. so will we advance more or less on the balance sheet expansion, we have a few tricky -- we'll see what happens. >> just pause there because george osborne is giving a speech there laying out his thoughts for the economic agenda

for the year ahead. we'll just pop in to hear what he has to say. >> for some it feels abstract, remote, but there's nothing abstract about the 200 new employees this company has created in the last year. or the 400 additional people announced just now to take on in the next four years. and that's a vote of confidence in the workforce here. it's a vote of confidence in the midlands. and it's also a vote of confidence in the economic plan that is working for britain. this factory is a good place to talk about that plan. for here you know more than most that the world does not owe britain a living. car manufacturing is fiercely competitive. components can be sourced from around the world. and you know there are hundreds of companies in dozens of countries that would like to be manufacturing the products you

make here. and it's only because of your skill and your professional approach that the work comes here, here to this company. it's the quality slipped or if the company was badly run, then the jobs would go elsewhere. and what is true of this company is true of our country. it's because the rest of the world sees that britain is a country where we are now back in control of our destiny, a country where we are supporting businesses, the jobs are the ones here today are being created across the country. over 1 million new jobs. but if our country is badly run, if the finances are in a mess and the costs go up, businesses don't feel welcome, then jobs would quickly disappear from britain again. our country was in a real mess a few years ago. more so than almost any other major country in the world.

and hundreds of thousands of people lost their jobs, millions of families like yours have seen their incomes squeezed. britain was made a lot poorer, and that's the terrible price. people totally up connected with politics and politician's pay when you get the wrong economic policy. it's why getting the right plan and holding to it is so important. we've got the right plan now. it's a long-term plan for turning our country around. and i never promised it was going to be easy. i went out of my way to say the opposite. and to be open with you about the difficult sacrifices we have to make. and like the success of this company, it's been a team effort with a lot of hard work. and now that team effort is paying off. but the plan is working. for the first time in a long time there's a real sense that

britain is on the rise. jobs are being created, the deficit is coming down. and that brings its own risks. as we start the new year, i want to warn you about a dangerous new complacency around in our politics at the moment. you hear some of my political opponents talking as if -- >> so that's the chancellor speaking there talking about government spending and reducing taxes. we'll recap that later. at the same time, growth in china's service sector slowed down sharply last month. hsbc's december services pmi reading fell to 50.9. that's the lowest in more than two years following the official reading of 54.6, a four-month low. this comes after months of warnings of beijing limiting new rules for shall doe banking. their new cabinet guidelines

close for banks off-balance sheets. financial stocks have also been give a new role to clamp down on runaway credit, but expect an all-out war. documents by reuters say they see the benefits of non-traditional lending in growth. george what are your thoughts about the short-term? >> we have concerns for the next two years. we are positive for the next ten years because china in the last 20 years of their gdp multiplied by two-fold, and the stock market only went up 50%. if you do the same comparison with the u.s., they went up 1.7% times and the stock market went up 400%. so we are projecting the growth of the stock market. if you are able to weather the storms over the next two years -- >> what's the biggest storm? >> the storm is gdp growth. i don't think they are going to be able, and they don't want to be able to engineer growth of 7%

because they are exporting and being consumer driven, but the transition is going to be a bumpy road. it could go below 7% to 5% or 6%, and that's the potential to lit the fuse on the creative successes and unproductive investments. this is consistently higher than it used to be. and i think that has the potential to light the fuse on the potential successes. >> which we'll have to see what happens. the thing is, shanghai, the chinese market was down 7% last year, massive underperformance compared to global equities, is that going to continue in the short-term? >> i think we decided to be cautious about china, before

loading the track with stocks for china because we wanted to be patient. in the next year or two, it will be bumpy. the stocks are undervalued against gdp. gdp is unreliable, you cannot trust that number. also another statistic in there, by 2020 the middle class in asia will increase by 1 billion people. i mean, that is going to have an impact on stocks as well. so it is difficult to be that negative. having said that, given the huge balance sheet expansion as of 2008 when it was required to take care of the crisis, you cannot be going there light heartedly, especially now with so many successes. >> what you said earlier about u.s. stocks, you would think they are overvalued, the question is what -- it doesn't mean they can't go higher. >> no, they can go higher.

i think that maybe one of the biggest drivers of the performance, not rightfully so, because i believe it's a misconception, but it has been, as a matter of fact, a balance sheet comparison to what happened in japan, for example. when the market corrected, it was because the market had develop ahead of itself with the balance sheet expansion. there was a divergence there. so the same thing can happen in the u.s. if the balance sheet expands from $4 trillion to $4.5 at the end of the year, you could have the s&p at 200. so that could squeeze to the upside, for which you need to be positioned for. at the same time, what i con test is the valuetive ty. volitivity. for that reason, it doesn't make sense for equities like bonds to

dip down like last year. >> stay there. and we were just talking about china. as i mentioned, george soros says a slowdown in the country is his biggest concern for 2014. so we want to know what's your biggest concern for 2014? tweet me@cnbcwex or e-mail me at worldwide@cnbc.com. we'll get the latest from frankfurt right after this. ♪ [ male announcer ] this man has an accomplished research and analytical group at his disposal. ♪ but even more impressive is how he puts it to work for his clients. ♪ morning. morning. thanks for meeting so early. oh, it's not a big deal at all. come on in. [ male announcer ] it's how edward jones

makes sense of investing. ♪ amazon started in a garage. hewlett packard, and disney both started in garages. mattel started in a garage. ♪ the ramones started in a garage. my point? you never know what kind of greatness can come out of an american garage. introducing the 2014 motor trend car of the year. the all new cadillac cts. ain't garages great?

for the headlines today, another week and another fine for jpmorgan that could be close to a settlement for their role in the bernie madoff ponzi scheme. and spain has eurozone numbers that are set to impress. and china's service sector is looking to grow in their entities. france, germany and portugal will see jack lew later this week. how is this going to go down,

an anetta? >> we had this last year when timny geithner came over to germany with the same message. there was a report out of the u.s. treasury as well claiming germany to be partly responsible for the imbalanced in the eurozone because of its austerity-driven policy. again, berlin was furious and said it's none of their business to intervene in german issues. so the german stance is pretty much clear. they are happy the economy is doing well. unemployment is low, so why should they change anything? and the american perspective is pretty much clear as well. they want germany to boost domestic demand, i.e., to increase government spending. one has to be quite clear about that with infrastructure projects and other projects in order to yet diminish the surplus, the current account

surplus, which most likely won't happen. a lot of people are thinking here in germany that whatever likelihood that the new coalition will actually have a little bit of a bias towards more spending. looking at the coalition contract, actually, the minimum wage might boost at least domestic demand when it comes to the consumer, but from this side of the state, there's not a lot of spending, which could be a wait. back to you. >> we'll see what happens when he arrives. thank you, anetta. still to come, the egyptian prime minister says the muslim brotherhood is no longer welcome in his country. we'll have more after the break. as we do, though, i will remind you where we stand right now on the advances versus gainers in europe. it is pretty even stevens at the moment. 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. there's nothing like being your own boss! and my customers are really liking your flat rate shipping. fedex one rate. really makes my life easier. maybe a promotion is in order. good news. i got a new title. and a raise? management couldn't make that happen. [ male announcer ] introducing fedex one rate. simple, flat rate shipping with the reliability of fedex.

the u.s. secretary of state john kerry has raised his concern about the egyptian government's crackdown on the muslim brotherhood. the egyptian prime minister said the muslim brotherhood is no longer welcome. we are joined onset now with you as you talked to the prime

minister. what does this mean for egyptian and the muslim brotherhood? >> they are not going anywhere and certainly they will be digging in. that's what we'll see over the next few months, but the main point that the prime minister was trying to get across to me is they don't want anything to hinder the referendum coming up in a week, and they don't want anything to hinder the parliamentary and presidential elections happening in the next few months. but what's also interesting is the u.s. relationship. we saw the u.s. relationship become rather fragile with secularists and also with those who were not supportive of the muslim brotherhood. they came to power in the united states and didn't know what to do. they just felt this was the new face of political islam and they were going to have to negotiate and work with them on some level. and you saw many secularists taking this to heart, taking this pretty badly, including many members of the egyptian business community. so now what you're seeing from the united states is a hesitancy to get involved and you hear

this from the prime minister as well. >> long-term egypt is unimportant to this administration. and it is not in the interest in the rest of the world to have bad relations, and we are very aware of this. and the important thing is not what they think, the important thing is what is taking place in this country. and after all, what takes place in this country after all the dust will settle, i think everyone will have to dig into the new situation. >> the prime minister acknowledging whatever the u.s. thinks one way or the other about how they are running the government, it doesn't really matter because this is all going to have to shake out with the egyptian society on its own. >> meanwhile, how have they been dealing -- we've gotten into the problems because the food prices and subsidies, how is the economy performing at the moment? >> we have seen a rally since upgrading at the end of last week to stable, but it's

interesting when ski the prime minister about subsidies, what's he going to do, he called it the cancer of the egyptian economy, but he said we have no plans to take care of them in my tenure. >> okay, hadley, thank you. hadley gamble with the exclusive interview with the prime minister there. still to come, outflows in gold. we'll take an outlook on etp's in 2014. as we do so, a remind of where u.s. futures stand at the moment calling for modestly higher starts at the open today. [ male announcer ] this is the story

of the dusty basement at 1406 35th street the old dining table at 25th and hoffman. ...and the little room above the strip mall off roble avenue. ♪ this magic moment it is the story of where every great idea begins. and of those who believed they had the power to do more. dell is honored to be part of some of the world's great stories. that began much the same way ours did. in a little dorm room -- 2713. ♪ this magic moment ♪

you're watching "worldwide exchange." jpmorgan could be forced to pay another big fine. reports say the bank could announce a settlement this week over charges it failed to warn about bernie madoff's ponzi scheme. spain services pmi hit a six-and-a-half year high as new business returns to pre-crisis levels. they nechinese economic fea down to a two-year low in december. the biggest concern by george

solos is the downfall. and a deep freeze for much of the u.s. you're watching "worldwide exchange" bringing you business from around the globe. a warm welcome to you. the start of the global trading week here on cnbc. we saw a bit of a pause last week for u.s. equities. the dow down .2%. right now we are slightly higher at the start, 23 points above fair value for the dow. the nasdaq at the moment is 3.5 points above fair value. and the s&p 500 is currently 1.6 points above fair value. the ftse cnbc global 300 is pretty fat, down a quarter of a percent. a bigger sell-off in ashave, the nikkei down 2%. here in europe we have been turning slightly firm,er, the

ftse 100 is down .15%. the gdp growth is near 8.8%, the annual growth of 1.9%. the sector services is flat and no change in the composite numbers, but a massive divergence in terms of economic performance. and the ftse is up .70%. we get the full trading week underway. what are investors to do? here's a thought of some of the guests who have already been on the show or on the channel today. host going to do what he needs to do in april or earlier. so we see 115 or higher. we still like what we call

atlantic spread wider. so say germany short the u.s. i think the utilities could start to see this sort of thing. they are the ones cleaning up the balance sheet. they are cutting the dividends. there was a story earlier last week about them having to do the rights issue, but they cut the dividend in september telling you that they did that, so it was not a reddish shoe. they are selling off non-core assets and putting themselves in a position where if you start to see the pick up, the numbers could go up, but in the worst case you are looking at a 5% dividend. all right. we have some news coming out of boeing. boeing has announced a deal that will be worth $724 million at

list price. that's for 800 airplanes. francesco is with us again, what about credit? >> in which regions? in general? >> yeah n the united states, in particular. >> well, the united states, definitely yields are very, very tight still. if you look at the government bonds, we saw the rising interest rates, we thought 3% would be seen now, now we think 3.5% to 4% could be seen in 2014, especially if gdp picks up as it should be a wide expectation, and it goes from 2% to 4%, possibly. if you factor in inflation of 2%, then it is nothing special to see the interest rate of 3.5 to 4%. in terms of credit, it is very

tight. and it is not a good investment in our opinion. so you have a lot of things that make you think that it is -- including the insurance that is up 60% for the year 2013. it was only 5% in the year 2007, so now it is targeting 60%. you have a lot of bad data for bond issuance. 10% is for bond recaps, which are cash and gain, so that is important for those companies. so you are not buying valuable collateral, but you are buying it as the expensive price. so it doesn't look like a great investment. >> meanwhile, the global value of exchange products jumped up 20% to more than $2.4 trillion. our next guest says flows remain

strong despite volatility. they say the proper buy and hold of vehicles is going to continue. joining us is don kingsley, happy new year to you. what's happening is that ten years ago these never existed, but now the amount of money in them is phenomenal. this is patent investing, isn't it? so what's going to happen this year? >> well, we have seen just tremendous growth over the last ten years in exchange traded funds and weapon don't see that slowing down one bit. in fact, last year i think was a great example of how etfs are driving efficiencies in the marketplace and are being used by a much broader investor base. what we're seeing is more investors using etfs, using them in a bigger way, and they are using them to get exposure to a

very diverse area of the marketplace, whether it be gold, whether it be fixed income, whether it be equities and a variety of different strategies as well. >> gold, you know, was the sell-off from etps or etfs, do you think most of the selling is done? how much gold do they still hold? >> we have seen a moderation, now, exchange traded products actually hold over $60 billion still despite a 53% sell-off last year. so if they were to be aggregated, all exchange traded products would be the sixth largest holder still of gold worldwide. we do think that we have seen a real moderation here in terms of the sell-off. and an important thing to keep in mind is a lot of the exchange traded fund investors are strategic. it's not just for the tactical or those looking for market

exposure. our belief is that the remaining assets are largely and strategic investors. >> yeah, you also say strategic minimum volatility products are popular, what does that suggest? >> that's really been the story of 2013. and we think it's going to be a continued engine of growth for the industry. so these are exchange traded funds that hold a basket of stocks that have a particular characteristic investors design, whether they be high-dividend payer that is are high-quality stocks. that area grew dramatically last year, almost $30 billion over $100 billion segment of the industry. minimum volatility, which you mentioned, is simply stated a way of getting exposure to a particular equity market, say emerging markets, but screening out for the least volatile stock. so it's a way to get back into the market for investors who may

be a little concerned about volatility on a go forward basis. >> francesco? >> in 2013 you had a very buoyant market or the market went up and you mentioned a lot of people trying to participant through etf instruments. do you think that in the lateral market they can grow bigger? and what do you think could happen in the big correction, do you think the debt can accelerate as these come in? >> what we have seen is that efts have grown in good, bad and in flat markets. in fact, in 2008 used to be the largest year of assets going into exchange traded products. it took more in 2008 than we saw in 2013, believe it or not. what investors are recognizing is the benefits that etfs offer, they are low cost, low efficiency, the ability to trade them in reflective view really

resonate both in difficult markets as well as good markets. >> there is an interesting point there, francesco raises, when you get a sell-off, whether they accelerate the sell-off. because there's no manager or anything saying, hang on, i'll wait to see if things change. when people get out of the product, bang, the money hits the market and gold is a clear example. >> yeah, so we have done a lot of research on this. and we have found absolutely no evidence that flows into or out of exchange traded funds are driving the market. really what we're seeing is that efts are allowing investors to access the market even when liquidity is challenging in the underlying, so said another way, etfs are really being a vehicle for investors to reflect the view, but we have not seen any kind of material impact on the underlying market. >> okay. thank you very much for that,

dodd. francesco, you say you have to take a view where passive money is. >> you have to. the five biggest players around the globe including blackrock, they own such strategies for $10 trillion. so it's a staggering number. so my impression is that -- what i am most concerned about is that so much flows have gone into these instruments by the usual players. and there are view few shock absorbers in case there's a correction of that type, and i wouldn't be surprised if gold would go and something else. >> some of the other stories we are following, jpmorgan is expected to pay slightly more than $2 billion to settle allegations it failed to warn about bernie madoff's ponzi scheme. the company was made of a primary bank for years. reports say settlement that

includes deferred prosecution agreement might be announced tuesday. the bulk of the fines are expected to go to madoff's victims. reports also suggest jpmorgan hoped to resolve this case before it reports fourth quarter earnings due on january the 14th. jpmorgan's stock is not telling us anything at the moment, since it is closed in frankfurt. i'm not sure that's still the case, but still to come, liberty sirius is looking to buy xm. find out why a deal could pave the way for them to also make a play for time warner cable.

right now, he's busy earning 4 times the hhonors points... you did a great job. it looks good! ♪ ...no wonder he's fueling up. enjoy our free hot breakfast options and up to 4 times the hhonors points on your next stay. feel the hamptonality

you're watching "worldwide exchange." >> recap of the headlines today, another fine for jpmorgan. it could be close to settlement over the role in bernie madoff's ponzi scheme. serving economic success, spain says their pmi numbers impress, but china's service sector growth slows to a two-year low on news of china's equities. we just have some reports of another skiing accident, not as serious as that of michael schumaker, but it does affect angela merkel, who apparently was skiing and therefore has canceled some meetings, this is

according to a spokesman for the german leader. she has canceled meetings because of a skiing accident in which she has been injured. no further details at this moment. john malone is on the acquisition trail again. the media mogul is setting his sights on siriusxm. courtney trregan is here with more. >> good morning. john malone is offering to buy out the minority shareholders in satellite radio provider sirius xm holders. they would pay for the 48% of sirius it doesn't own. just 3% above sirius' closing price on friday. liberty became the largest shareholder in 2009 after extending the $530 million to avoid sirius going into

bankruptcy. it became a majority owner last january. since being rescued, sirius has rebounded with radios in 70% of vehicles in the u.s. and shares have skyrocketed up 2900% over the past five years. today in frankfurt as you can see shares are up about 5%. it is a small stock as far as dollar value goes, so that's up only about 13 cents there. on the buyout of sirius xm, this could give them a potential bid for time warner cable. one of the most potential takeover targets from last year. it's no secret that they have long eyed time warner cable. ceo greg moffett commented on this company when he appeared on "squawk box" last month. >> it is unique because it is not controlled by a family and it's large. they have a management transition going on, all the factors have led to a lot of speculation about transactions. and there's a lot of things to find attractive about those

consolidations. liberty bought a 27% stake in charter communications last year and has been pushing charter to acquire time warner cable. on a call with analysts on friday, maffei said the deal would enhance liberty's ability to borrow $27 billion up from about $16 billion nearly doubling its annual number while only adding $3 billion in debt to put more cash in the charter offer for time warner cable. checking liberty media shares today, we are up about 1% here. ross, back to you. >> thank you. are you wrapped up in your warmest coat? >> yeah, you know, the weather here is so weird, ross. it is really warm right now. i think it's going to drop about 40 degrees fahrenheit throughout the day, so then we're going to get the below zero temperatures. that's fahrenheit. so that's a weird, weird weather pattern we are in right now. >> it is.

courtney, thank you for that. last week's major storm in the u.s. may have been the opening act. much of the country is suggesting to be hit by the deep freeze in the early part of the week. reynolds wolf is the meteorologist with the weather channel joining us now from the studios in atlanta. reynolds, good morning to you. how cold is it going to get? >> good morning. it is going to be ridiculously cold, ross. it will be insane. what we are seeing across much of the united states is a change in the jet stream. and atmospheric barrier that separates sometimes the cooler air from the more mild air. in this case, the jet stream has dropped to the south to allow the cold air to come tumbling through. and for our goods friends across the u.k., these temperatures you see behind me, windchill is a measurement of how it feels like, what it feels like outside to the exposed skin. by the way, these temperatures like minus 45, this is in fair height, not sells you. translation? it is horrible, frigid out there. and windchill, you really don't want to expose your skin when you have these kind of windchills out there. so the idea is don't expose your

skin. plain and simple. dangerous cold is going to last for several days. these are just the basic surface temperatures for you across much of the great lakes of the united states tumbling down to 10 degrees in chicago. 9 degrees in indianapolis. 28 in st. louis. these are tomorrow's highs, but to give you more interesting numbers. roughly 80 million americans are under some kind of warning or advisory at this point all due to the cold. and as you might imagine, this is going to cause issues on many roadways and a lot of airports. in terms of travel, take a look as we wrap it up. new york city, not bad in terms of temperatures, but may have moderate delays. washington, d.c., same deal. chicago, for now, we expect some delays. atlanta, same deal. so we are shivering here in the u.s. we'll send it back to the warm u.k. >> thanks. those temperatures, reynolds, minus 45 feels like? that's unbelievable! >> it's unreal, indeed. >> okay. all right, well, i hope everybody wraps up.

thank you for that. we'll have more on that and the weather channel throughout the day. also, for our exchange, we have been asking, what's your biggest concern for 2014? it may be that you're going to freeze, but matt tweets, earnings and job come in weak and mild velocity. michael tweets retail spending. let us know your thoughts and get in touch with us e-mailing at worldwide@cnbc.com or tweet me@cnbcwex. friday's job reports are in and what else will traders have on their agenda? we'll get some insight from the cme. car insurance. yeah. everybody knows that. did you know there is an oldest trick in the book? what? trick number one. look-est over there. ha ha. made-est thou look.

so end-eth the trick. hey.... yes.... geico. fifteen minutes could save you... well, you know.

slim losses last week for u.s. equities. u.s. features this morning are

pointing to a slight tick higher, the nasdaq 3.5 points above value and the s&p 500 is 2 points above fair value. joining us from the cme, senior vice president for drifters at trin. scott, happy new year to you. what's going to happen as there's a huge risk this week? >> we have never seen anybody in washington, d.c. extricate themselves from a situation smoothly. so anybody that thinks this is going to go well has another thing coming in 2014. these justify where the prices are and those on the other side think the fed is the only reason why the asset prices are where they are. we'll watch the fed get out of this one, it will be an interesting ride. and the best headline i have seen the last few weeks is when is $10 billion not that much? here's what we've got. the binary event on friday is the jobs report. and we have a big grain report on friday as well, but the job number will give us data

dependency talk on whether the fed has done the right thing by starting the taper. i think it's going to be a bumpy ride. we have only had five or six decent economic numbers. the last two jobs reports only got us back to the average we started the year at with 185. we'll have ternings as well, but i guarantee you this will not be a smooth ride. >> everyone is saying their biggest concern is for the year, what's your biggest concern? >> that we increase the amount of loose monetary policy. we start to add more back into the economy we took away. yellen sitting in that seat, if we get a bunch of bad numbers or the job numbers don't go to fruition, ross, i think we are in a deflation in their cycle here. if we don't see the jobs numbers takeoff, we have been pumping in $75 billion a month and not hitting the cover off the ball. we need to see those things get better and there's a risk we add

to qe rather than take away by the end of the year. >> francesc snorks. >> i agree on the dependency. we need to see if venues now will be venues, just that. i think the values will be untapering. >> untapering. >> yeah. the corporate earnings are my biggest concern for 2014. i would be surprised if they are sustained where they are. with 11% gdp in the u.s., i think it is too much. it is unsustainable, the earnings are still at 8%, it's still high, and i think it is vastly underestimated. >> yeah. francesco, great to see you. thank you for joining us. scott, good to see you. have a good day there in chicago. that's it for today's edition of "worldwide exchange."

and "squawk box" is coming up next. [ male announcer ] nearly 7 million clients. how did edward jones get so big? let me just put this away. ♪ could you teach our kids that trick? [ male announcer ] by not acting that way. it's how edward jones makes sense of investing.

good morning and welcome to "squawk box." a big week shaping up for the markets with the release of several key data points, including the jobs report on friday. so we'll get right back into it. jpmorgan is reportedly near a $2 billion settlement. this one tied to the madoff scandal. i wonder how much jpmorgan has left at this point. and much of the nation caught in what is called a polar vortex as temperatures drop below zero in many parts of the country. it is monday, january 6, 2014. and "squawk box" begins right now. ♪

good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with andrew ross sorkin and the birthday boy himself, joe kernen. 6:00 a.m., we remembered already. here we go. among our top stories today, a dangerous arctic blast that is expected to be the coldest in decades. more than half of the continental united states is facing below zero temperatures. the dakotas and minnesota clocked temperatures of 20 degrees below zero yesterday. in fact, at its lowest point, the windchill in minnesota was a numbing minus 50. that's right, minus 50. as we were talking at last week, when you get down to temperatures like that, that's colder than life on mars. tracking website flight aware reports that 2300 flights were canceled yesterday. we'll have a live report from the weather channel in just about 15 minutes. and speaking of the cold, a less than stellar start to 2014 for the bulls. two sessions in, wall street started ne