welcome to "worldwide exchange." i'm julia chatterley. these are your headlines from around the world. equities in europe fall after the dow suffers its worst drop since september. tech stocks and bank he is weigh with earnings with jpmorgan set to kick off the season. japan's nikkei 225 leads the losses in asia, tumbling in a catchup session as a stronger yen punishes exporters. m&a has time warner

rejecting an offer from charter communications saying it will only be interested in $160 per share. and can francois ohland deflect attention from his love life? the french president is due to present reform for the ailing economy. but will affairs of the heart get in the way? >> announcer: you're watching "worldwide exchange," bringing you business news from around the world. well, it was a far more decisive start to the equity trading session this morning. the unfortunate thing is it's in the red. as you can see, 9 to 1 reds to greens taking the stoxx europe 600 down by around 0.6%% so the in the first hour of trading today. let's take a look at the individual performance of these markets. red. red across the board. the ftse 100 down 50%.

remember, we're going to be looking out for cpi data shortly for that. german market down 0.7%. and the cac 40 taking their lead from both asia. i mentioned the nikkei there, but also the u.s. session far weaker as investors likely paired some risk ahead of earnings season, getting started with the financials today. let me give you a look at some of our key stocks that we're watching today. the first one, ashmore is taking a tumble after reporting a 4% drop in asset from the management well below forecasts. the group's founder blames the trend on uncertainty surrounding u.s. monetary policy and the resulting volatility in emerging markets. so their analyst did say that that can bring gains this year, too. let's move on to the german drug distributor celesio taking a hit after a deal with mccommitteesen fell through. that stock losing around 6% so far in trading this morning.

and time warner up 1.5% after charter communication went public with its long awaited $34.7 billion takeover offer for time warner cable, which was privately rejected. final one, google heading lower by around 0.4% in trading after announcing it's buying nest labs, the maker of smartphones for $3.2 billion. it's the biggest deal the company has seen with motorola mobility in 2012 for $12.5 billion. we're going to be talking all things m&a later on in the show. strange to see the underperformance of the equity market despite all those deals that were going on. and let's take a look at the bond markets in particular. first, i want to point out what's going on with the u.s. market. perhaps most surprisely, u.s. treasury yields a gain under a bit of pressure in yesterday's session. 2.84% ahead of that session on

the ten-yooe year gilt. it should hold in pretty well here. keep a check on that. and france, we're going to be talking all things francois hollande later as he try toes present his policy for a reboost for the french economy. quick look at the foreign exchange market. a mixed bag for the dollar. dollar/yen, adding back gains, up around 0.6%. record high deficits for the japanese and perhaps a bit of a bid to dollar based on the deal activity in japan, too, which we are going to hear more about. li sixuan is always in singapore for us. sixuan, tell us more. >> thank you, julia. both asian markets followed wall street lower afterdy play catchup with disappointing u.s. jobs numbers.

>> on a technical rebound. we do know that the shanghai composite was down seven out of the past eight sessions. it managed higher by about 0.9 the%. the shenzhen gained almost 2%. the hang seng index down by 0.4%. if country's largest suvmaker announced a three-month delay in the launch of a new model. elsewhere, large cap technology shares capped losses. banks continue to slide. over in japan, heavyweights retailers, exporters, utility stocks and some telcos, heavy sell-offs. but shares held up despite debt concerns, this after its decision to buy out a u.s. whiskey company beam for $6 billion. the stock gained 0.6% today.

back to you, julia. >> thank you so much. now, talking about what's on today's show, we'll go live to orlando where some of america's biggest retailers are gathering to discuss 2014's biggest consumer trends. the net 1050 cet will cruise the cat walks in milan. fashion week taking place where outlandish things like cowboys and cape crusaders will top the headlines. wow, ross will have hated missing those. very much his trend. investors will continue to have flooded the streets of bangkok. find out how the president of the exchange is reacting to that threat. u.s. bank earnings season kicks off in earnest with jpmorgan and wells fargo reporting before the bell. we'll discuss results with an analyst at around 11:30 cet. and finally, bitcoin's value

slides amid concerns over further crackdown measures in china. we speak to the ceo of btc china about the fate of the currency. that's coming up at 10:45 cet. so it's an absolutely jam packed show, as always. send me your e-mails. i want to hear from you. worldwide@cnbc.com. of course, you can tweet me @juliecharterlycnbc2. francois hollande has been battering away inevitable questions about an alleged affair with the actress julia sheate. hollande has hoped the event would be a chance to detail just

how he intends to turn around the economy, stimulate business and reduce taxation while boosting employment. instead, of course, the focus could perhaps be dominated by personal matters with the first lady remaining in hospital after being admitted on friday following the magazine report of an affair. now, phillipe fector joins us in paris. and here in the studio we have nicholas burrough. phillipe, what we heard in the speech from francois hollande is a huge shift in strategy. he wants to restrain spending, see less taxes, he wants a responsibility pact with businesses. how much of this can he actually achieve? >> well, you happen, in the mid '90s has done the same thing.

after two years as president, they change their economic policy. and that's probably what we would have this afternoon. the point is how to -- how to regain some momentum in the french economy. and for the moment, the french economy is not doing well. so the point fran what hollande wants to put into pages, how to change the french economic profile and to regain some momentum. and the point is that the fed probably go through companies and we have to somewhat companies margin and that's what it will probably propose happening. that's what would be very interesting. besides that, the fed, of course, we have to change the way the states government is

working. probably there are too much expenditures, so we have to think about that. in the coming months and the coming years. and that is two things we have to be very adventive to. one on margin and one on expenditures. >> nick, comment here because phillipe has outlined a lot of the problems. he's asked a lot of questions there. but how capable of francois hollande to enact these policies? is this just smoke and mirrors? we know he's the most unpopular president there's ever been. >> he is. i expect him to strike a rather liberal tone. .he's been doing that for the past month. that's part of the problem is that he is being castigated by the left of his party for being too liberal. the problem is he's been talking about talk and for quite some time.

but he's patently failed to walk the walk. this is the first time since the eurozone crises ka lated dramatically in the summer of 2011 that there's more concern about france than there is spain. and even to some extent italy. although i would say italy is the thick man in europe and france is a close second. >> is the criticism perhaps not justified? are they doing some things right? how quickly can they address the zigzag policies? a crucial issue here is a lack of competitiveness. >> when we look at two of those, we see there is some competitiveness in spain or in other countries and we have to improve our competitiveness.

the question we would have to manage is to know what will be the delay, francois hollande will speak about this afternoon. you want to do something. when we do that, that's vary important issue. and who will drive this policy? will it be -- will it be the prime minister or maybe someone else? that would be a very important question. surely if we gain competitiveness, how will it be silenced? because we see these issues, we want to reshort considers margin. but how to manage this issue with the -- within the social model of france. who will finance and how? that will be one of the answers we are looking at this afternoon. >> what's your advice, phillipe?

how does he fund this? if he's going to reduce the tax burden on businesses, he's going to have to cut spending, isn't he? is that stage one of this process? >> the point is to -- we can have a kind of tradeoff, saying we'll reduce taxes on companies, we'll reduce expenditures. the question, the main question in france currently is to -- how do we have to rethink again the social model? can we continue with the same social model wv before the crisis? we have to do something on companies, we have to improve competitiveness, to improve investment, to have higher employment. but at the same time, we have to think about the social model. can we have the same social model? probably not.

and that is something we have to -- that's an answer. we have to hear this ash. if we just hear to increase taxes, it will not work. yes has a lot of work to do. phillipe, can i ask you very briefly about the risk the speech is overtaken by questions on his alleged affair? >> well, it will probably have a quick on it, but probably will -- he will not answer. that the party want to management the economic situation today and probably he will have a press release later. but i don't think we will speak about it as this press conference. >> if he gets only one question, he'll consider himself a very

lucky man. we have to leave it there. thanks for chatting to nick. can the social fabric remain the way it is? >> well, the fundamental problem in france, obviously, and not only in france, also in italy is a conspicuous lack of appetite for any kind of meaningful reform. phillipe is right. fiscal reform and structural reform is very much incident elect. it's how you finance that. if you finance that be kretsing taxes, the worst thing. so far, since missour hollande came to power, he's realized he has to switch gears. in order to move forward aggressively over labor market

reform. but i don't see any kind of meaningful fiscal reform in france. it looks like france is politic politicallyly polarized. >> will they back him if he does try to reform the economy? now we're moving from france to spain because their economic recovery picked up pace in the last few minutes of the year according to the country's finance minister. the economy is said to have grown by 0.3% in the country's fourth quarter. as international investors return to spain attracted by the economic improvement driven by growth and the value of the country's exports. still with me, of course, nick spirro. this is a huge dichotomy, isn't it? they don't need to reform. look at their borrowing costs. look at the bid we're seeing in

economic policies. >> that's part and parcel of the complacency and argument. spain clearly does need to reform. spain is very much, as far as we are concerned, a tale of two hearts now. its bond market is on a tear. but if you look at the real economy, in order for there to be growth, there needs to be a recovery in domestic demand. but there's no two ways about it. this is a different spain in the perception of many investors. and what is interesting is that corporate borrowing costs now are die verging between spain and italy. and there does seem to be, certainly on the corporate debt side, a die vergence between spain and italy.

>> i want to talk the political dissent dpragz will be a major issue in 2014. i can't not chat about that. but we have to take a quick break. still to come, will the fed's largest acquisition on the record be the toast of the m&a town or will debt lading -- leave japan with a bit of a hangover? we'll cross to tokyo right after the break. stay with us.

welcome back to the show. japan's suntory holdings is buying u.s. whiskey company beam. >> suntory decided to take a shot out at transforming into a global liquormaker. suntory has shifted focus overseas since price competition is stiff in the domestic market. it bought two nutritional drink brands from glaxo cline last year. overseas sales through 30% of its total sales.

the main business at home is beer and mostly makes its whiskeys in the u.s. and japan. this is expected to bolster its presence in the u.s. market. moody's said today it will put beverage and food under review for downgrade. featuring a significant increase in debt for suntory. suntoyy shares are up 2.4% but ended today's session with just just 0.3% rise. thank you so much on. i want to give you some information from that dealing. it's the second largest spirits and liquor deal targeted m&a on record. actually, the third largest japanese outbound m&a deal. can you guess number one in that? that of course is the

softbank/sprint deal. number three we've seen overnight from japan, which is very interesting. sticking with the theme, australia's dairy sector is attracting more takeover action. its australian subsidiary action is looking at the financial terms which are not yet disclosed. asia's appetite grows for further dairy imports. australia's -- is still the tarlth of a fierce bidding war. price up 130% in the last six months. elsewhere, charter communications goes public with its long awaited $34.7 billion takeover offer for time warner cable, which was privately rejected. charter, which is backed by john malone back in december, is offering to pay $132.5 a share

with $83 in cash. the stock is up 40% since charter's interest last june. time warner cable quickly issued a statement rejecting the bid as too low. charter and time warner cable stocks, i'm sure you time warner cable up 1.5% there. charter com, we're not seeing that open right now. now, google is already on your pc and in your pocket. and now the company also wants to be on your wall. yes, that's right. google is buying nest labs, a maker of smart thermostats and smoke alarms. how exciting. for $3.2 billion. yes, it's the company's biggest deal since it bought motor oh la in 2012 for $12.5 billion. it gives google a high profile executive in nest co-founder and ceo tony fidell, a former apple

employee, who is credited with creating the ipod on. perhaps that sheds a bit of light on why they're interested in doing this. let's take a look at google shares, down 0.4%. google has long been indeexpenseble for millions of online resources as well as the producer of electronic hardware. going the has scooped a handful of robotic companies with many suggesting the firm wants to position itself as a major military contractor. however, mystery floating barges, do you remember that? and a shop purchased firms specializing in smoke alarms have further confounded the watches. so we want to know what kind of company really is google becoming? if you want to join the conversation here on "worldwide exchange," get in such with us. worldwide@cnbc.com or @cnbcwex.

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equities in europe fall. japan's nikkei 225 leads the losses in asia, tumbling 3% in a catchup session as the stronger yen punishes exporters. m&a, the other big market story, time warner cable rejects a nearly $35 billion offer from smaller rival charter communications calling the bid too low. and can francois hollande deflection attention from his love life? affairs of the heart might just get in the way.

let me just give you a brief look at the european markets as we await the cpi data. underperformance in the general market today down just shy of 0.7%. and we now have uk cpi data. we've actually got rpi data coming out here, too. so let me bring you that as quickly as we can. cpi rising 0.2% on the month. 2.1% was the estimate. the december goods, 1.7% year on year. all services 2.4% year on year. let's have a look at the rpi readings. coming in at 0.5% month on month

with 2.7% year on year. that's bang in line with forecast in particular. the rpix coming in 0.5% month on month, too, and 2.8% year on year also. let's quickly bring in robert woods and, of course, nick spur is still with us. talk me through these numbers. we spent a lot of times talking about the issues with reducing unemployment in the uk. but the real trickiness is we still have an inflation rate here that's bang on target. >> that's right. so we've got a nice downside surprise today in inflation that comes out 0.11 below expectations. so we're bang on the target, which is obviously an awful lot better than the uk was a year ago. but it's very different from where the fed is. they're approaching their unemployment threshold but have inflation well below target whereas we are much closer. in a sense, the bank of england

has a bit of room still to wait before it hikes rates because inflation should probably fall a bit further over the coming months, but not as much room as the fed has. >> what about the outlook? we know the labor market is tightening. we're spurring the housing recovery that we're seeing. they don't have that much time, do they, on the inflation front. >> i think what we're seeing through the rest of this year is that weak wage growth targets to feature slow inflation. we're seal sterling start to feed through. i think we'll see inflation go lower before we see it go higher. which i think gives the bank of england a good six to 12 months before they need to hike rates. >> just maybe what does all this say about the credibility of the bank of england's forward guidance?

>> well, i think forward guidance seems to me like it was designed for a period of stagnation rather than a period of decent growth that we've now got now. starts off with fresh unemployment which didn't seem that unreasonable. that's far away from an unemployment rate that might be 6 1/2. so a reasonable target. we're getting much, much faster. i think the best thing the bank of england can do is probably to get past this forward guidance threshold. use some words like the fed has used that we will watch inflation carefully and probably raise in a year's time. >> get past it, robert, do you mean let it wither and die and forget all about it? >> yes, those are the words i've used. let it wither and die a quiet death. i think that would be a dangerous option if they lowered the threshold to 6.5% from 7%. i think that's too close to a rate that's going to generate inflationary pressure.

so the best thing to do is say we had a threshold. we got to it. we've got a bit of time before we can raise rates, but not a couple of on years, which is what the bank was saying just six months ago. >> very quickly, the key date we're now looking for is february the 12th. they can lay out just where they're headed now. >> yeah, absolutely. i think we may see some discussion in the bank of england minutes in the middle of this month from their policy meeting just last week about their options. but i think they won't decide anything until that february inflation report when they have new forecasts for the economy and for unemployment. >> the prospect of scottish independence is continuing to raise uncertainty over the uk's outstanding debt. the daily telegraph newspaper claims some traders believe the uk's debt to gdp ratio are will

rise as much as 10% should scotland choose to go it alone. the treasury has confirmed it will stand by all uk debt in the event of a union on break-up. robert, weigh it in here. because we're making it sound like the uk has to do this. but scotland isn't just going to allow the uk to take on their debt when there's things that they want to negotiate for, don't they? they want to remain part of sterling. they also like to hang on to some north sea oil assets, too. >> that's right. this announcement is good in the sense that it reduces uncertainty about bond payments and who is going the take responsibility for this if scotland voted for independence. but i don't think going forward to the uk, the rump uk is going to have to pay all of this remaining debt. as you say, the negotiations with scotland will involve them taking on some of these debt repayments in return for some concessions, as well. i think the key point this comes from is the uncertainty that

would come from that decision. that uncertainty would be really bad for uk growth for at least a year or two. it's so uncertain what commentary they're going to use, how the fiscal arrangements could be set up and so on. i think that's the really big point coming up. >> great to talk to you this morning. nick, i want to get back to our convergence in bond yields, die vergence in economic performance. how does this play out in the eurozone? >> well, what we're still faced with in the eurozone is basically a standoff between a french led group of member states which are reluctant to see so muchty over 50 in economic matters. and a german-led group which are reluctant to share the risks. now, when it comes to banking, banking union, we've got the worst of the world. germany is not only reluctant to share the risks, it's reluctant

to see sovereignty over its banks. so it's the governance of the eurozone that is still the fundamental problem and, of course, begs the question is the single currency project shored up? as far as we are concerned, it isn't. >> and yet investors continue to buy. nicholas, i have to let you go. nick spur, managing director for the sovereignty, that's a conversation for another day. i saw you ready to say something. let's move on. global food giant nestle, the emerging market chief says they goofed by ignoring consumers in favorite of mass market. nestle is now working on a strategy that includes the upper classes who are less vulnerable to inflation spikes and down turn. india's auto market has hit bumps in the road recently.

ford is building a new plant set to open next year. asia pacific chief david hutz says he's very confident that the indian market will pick up. meanwhile, exporting indian made suvs to europe. shares of great wall motor tumbled 12% in trading today. the chinese automaker is delaying preorders for its new haval h8 suv. a long list of issues including brake systems, seat builts and noises are delaying the release for three months. it could dent the brand's reputation among chinese consumers. still to come on the show, egyptians take to the polls in a widely expected approved referendum to approve the way for military rules. yusef joins us live in cairo

after the break.

you are looking at a live shot now of cairo, where egyptians are voting on a

two-day constitutional referendum that could pave the way for a presidential bid by the army chief general. the election is the country's first since mow ham he hhammed ousted from power. egypt continues its political transition. yusef has this report from cairo. >> it's been three years since the egyptian revolution. the country's former vibrant economy is still struggling in the shadow of political uncertainty. this salesman says the market is not moving. and this gentleman says it's clear the country is in stagnation. economics have been on a downward slope. the oust of mohammed morsi last summer has seen a new wave of violence and that means important drivers of economic growth such as tourism, foreign

direct investment have only seen as sporadic recovery. net foreign direct investment was just $3 billion last year, half of what it was n back in 2010. >> the key issue is economic growth is low, inflation is high, and as a result, the governments are still suffering and will have a high budget deficit. so it's a fine balancing act for any government because there are so many crises to happen at once. >> there are glimmers of hope. the central bank's acute shortage of foreign currency reserves appears to have eased for the most part due to billions of dollars in aid from the oil rich gulf states. the international monetary fund projects economic growth to accelerate to 2.4% in 2014. equity investors appears to be bullish about the prospects of the transition. and the last six months, the egyptian stock exchange has risen 45% to the highest level in three years. >> definitely, they led

scrimmages here and there. but if you ask me as a foreigner living in egypt, the sentiment is -- what happened in june. >> the referendum on the new constitution will be a political test of the army backed transition. and will set the stage for parliamentary and presidential elections later this year. until then, the uncertainty about economic policy is likely to remain. yusef, cnbc, cairo. now, we have yusef live in egypt for mr on this. yusef, so is this transition the amendment to the constitution looking like it will herald a new area of political stability? because as you were pointing out there, the investors in the egyptian stock sdhaexchange hav taken it to a three-year high. is there too much baked into the cake here? >> well, the analysts that i've spoken to, julia, tell me that the successful completion of the

transition is actually already priced in partially at the current levels in the egyptian stock exchange. this morning, extending that rally, then, and going above 6% year-to-date. it has been very stellar rally since the ouster of mohammed morsi. and that really reflects how investors feel about how this transition is being handled. what is important to point out here is that this rally is driven more by local investors, retail investors and the constitutional investors a bit more on the sidelines. investors are not back yet to the levels we saw before the revolution. this is, of course, a vote of confidence. but there's still some time to go in this process. again, we understand that this referendum is won on a new constitution and could be a proxy indicator about the popularity of the army, possibly open the door for a candidacy by the army chief, general abdul

rafici. the government not leaving a lot of space for a lot of the posters and banners as i was walking through the streets of cairo yesterday, really encouraging to vote yes and human rights watch put out a report criticizing the lack of tolerance of opposition in this process. again, this morning, a lot of anxiety on the streets of cairo. we had one blast in central cairo already with no casualties so far and other reports across the country from tensions there. we'll keep a close eye on this developing story. this matters a lot, not just for the possibility successful transition to a new democracy or a military dictatorship, if you want to call it that, but has implications for global policymakers around the world and from the united states. >> yusef, great to talk to you. thank you so much for keeping us updated and the crucial point about the fact that yes, the egypt may be at three-year

highs, but it's domestic investors rather than international investors getting involved. for more on our coverage in ewe gi egypt, head to our website. thousands of thai anti-government protesters continue to occupy the interceptions in bangkok after yesterday's mass demonstrations. the hard line says they plan to seize key buildings like the stock exchange. the president of the exchange said a true test of their operations may come tomorrow. >> as of today, we still have service for our individual clients. for example, share transferring. so it is operational at normal. however, the target that tomorrow they'll be surrounding our building tomorrow. >> change of pace now, bitcoin bites the dust today at alibaba.

the chinese e-commerce giant will no longer accept the currency at its ebay-like marketplace. it bans the equipment and software used to mine the virtual currency. it seems alley ba ba is eating the proceedings next month as it looks to ipo this year, an attempt to rid its marketplace site of fake goods. we've spoken to you about this before back in december when the chinese central bank was making their move. you've highlighted that they've not made bitcoin illegal. but there's a significant risk, isn't there, going forward that they actually do this? >> yes. so taobao decided that they don't welcome bitcoin on its websites any more. just to be clear, it never allowed bitcoin as a form of

payment although they did indeed have some sellers that took bit coin. now they say the bitcoin cannot be accepted as a form of payment and they disallow all bitcoin related merchandise on the website, as well. so it doesn't affect our business. as you know, btc china was the very first bitcoin exchange. we've had running for the last 2 1/2 years. when the pboc issued the statement clarifying bit kind in china and subsequently on december 16th they clarified some of the third-party processors were no longer allowed to -- with bitcoin exchanges. so our business is unaffected by the recent taobao decision today. >> it's not affected by the decision today, but more broadly, you've seen volumes significantly drop. you said you were the largest at the beginning.

you're now third, i believe. and you're charging fees unlike some of the others. why are you charging fees? is there a risk here that you continue to lose business? >> absolutely. through our knowledge of what the pboc sort of is worried about is the high volatility of bitcoin prices. indeed, when we were the first company, bitcoin exchange to eliminate trading fees in september, we saw volumes spike up. when there's no trading commission, what happens is a free for all. people can essentially buy, sell left and right with no -- with no friction whatsoever. and that caused a lot of volatility in the prices. the price did go up a lot, as well, in the last few months. and what we realized is that the chinese government is concerned about the high volatility because, in the end, people who invest in bit coins want to make sure the investments are safe and sound. so that is why we decided to do a more prudent approach to have a trading commission to sort of more moderate the market and

bring less volatility to the bitcoin prices in china and worldwide. >> do you accept that your business is built around a bubble asset? >> yomg bitcoin is another more a bubble class than real estate, stocks, equities, you know, currencies and all that. so bitcoin is another asset class that's been clearly defined in china as a new digital commodity asset class and people are allowed to buy and sell it. there's a legal standing. people are allowed to buy and sell and trade it. however, there's warning. even myself, i had want people, if you do buy and sell, it is a volatile phenomenon. don't put all your eggs in one basket. >> are you basically saying you would prefer speculators to stay away from this and thereby allowing this to become a better, more stable currency to be used going forward? >> yes. we're certainly -- whatever we

do, speculators will still be in the market. that's a notion what speculators come in and try to make a quick profit. so by having some commissions, it adds a little bit more friction to the market and we think that's healthier for bitcoin development in china and will allow bitcoin to have a more successful sort of situation in china. if we continue with a free for all policy, very much the central bank or the government may come down even further. so as a leader in this economy for bitcoin, we decided to take the leadership role to set some basic trading commission toes that. and certainly speculators are having a more difficult time where there's a trading commission and so hopefully there's less volatility in prices and less speculators action in bitcoin prices. >> bobby li, we hope you succeed there. let's give you a look at what's on the agenda in asia tomorrow. december data releases include foreign direct investment in china, south korea's jobless rate and india's benchmark wpi

inflation. of course, that follows today's cpi inflation. meanwhile, it's an important day in hong kong as chief executive sili yung gives his projections on policies. google has been an online resource as well as hardware. many are suggesting the firm wants to position its as a major military contractor. however, mystery floating barges inspect and the purchase of thermometers has people wondering what kind of company is google becoming? steve thinks the company might end up putting a rover on mars. if you want to join the

conversation here on "worldwide exchange," get in touch with us by e-mail worldwide@cnbc.com or tweet us @cnbcwex or directly to me, @jchatterleycnbc. now, cowboys, nordic conquerers and batman. any guesses? no. it may sound like the recipe for a roar strange fancy dret dress party, but according to the world's leading designers, these are the top three trends male fashionist yas will be donning in 2014. the likes of prada have been taking to the runway. claudia is in milan with all the details. it doesn't sound like great fashion to me, claudia, but please, tell me what's going on there. >> well, you know, you always --

when you talk fashion, you always want something strong to come out, some strong message. so some of the things that you just saw on the screen there, some of those ties and those accessories that are put on those jackets are actually just for the show. that is what fashion is. a lot of it is the show and that's what we've gotten here in milan in the last four days for these men's cat walks. and yes, cowboy, that's one of the looks and the conquerer that dulche cabana serchbt out there with some armored suits on top of the suits. that's not exactly what men are going to be wearing on the streets. but, again, it's bringing buyers to milan and they did show up. as far as the organizers are concerned for this event, it has been a successful event. and what's successful is what their expectations are for 2014. they were expecting growth of revenues of 2.5 billion by -- excuse me, of 2.5%. now they have raised those expectations up to 5%.

so for some of these italian producers that do sell all over the world, 2014 is going to be an important year. we do know italy has been in a big crisis and, of course, in europe, consumption has declined. but there arements out there that are still growing and the ceo spoke to us about this. >> we see a growth in opening of new airports, new airplanes, no noties. so this will keep being the adviser of the luxury goods. when i believe they will have stronger opportunities in united states where the economy is giving good signs of recovery and probably there will be, as usually, some new fast developing economy in east asia or in north america. canada would be a good example. every year, there are surprises.

>> so there is optimism, but we've seen some pullbacks in some of these stocks. this has been a sector that has run a lot on m&a activity. as well as recent ipo in montclaire. some annist wills are saying it's better maybe to invest on the larger names where the small caps have grown a lot in the last month. so as far as the market is concerned, there's more opportunity out there. back to you. >> claudia, thanks for getting to us and giving us all the details. i think i've become mentally scarred by some of those images i've seen there. i'm glad ross wasn't here. it could give him ideas. anyway, more to come after the break. stay with us.

welcome to "worldwide exchange." equities in europe fall after the dow suffers its worst drop since september. jpmorgan is set to set off earnings season. meanwhile, tokyo tumbles as a stronger yen punishes exporters. m&a, the other big market story. time warner cable rejects nearly $35 billion offer from smaller

rival charter communications, calling the bid too low. and can francois hollande deflect attention from his love lye? the french president is due to unveil a plan for the ailing economy, but affairs of the heart might just get in the way. >> thank you for joining us on the show. let me give you a look with how the u.s. markets are faring ahead of the open. the dow indicating around 25 points higher. indicating just shy of 5 points higher and for the s&p 500, we're indicating here just over 3 points higher. tough trading session yesterday

after these major averages ending the session at these three-week loans. let me give you a look at what's going on at the top stocks in europe and asia. it was a weaker session in asia led by what's going on in the nikkei. so a bit of catch up. that index ending sdun down around 1% and weakness into european sessions, too, leading that index down around 0.2%. let me give you a look at the reds across the board as far as the european markets are concerned. german market down 0.7%. the cac 40 down 0.5% and the ftse mib down 0.3%. let's take a quick look at the markets here while we've got the ten-year gilt trading around 2782%. back in line with 2% today on

target. a welcome surprise here for the bank of england. slightly lower to 85 yeerdz. fisher and plosser will be talking today, so watch out for them. tapering will continue. for now, euro/dollar, rates are unchanged at 1.3671. record deficit for japan. but perhaps a bit of a bid here in dollar terms because, of course, we've had that m&a talk in japan in particular. let's check in with the broader markets in asia. give us some of the details across the asian session. >> thank you, julia. it's a sluggish session in asia with japan being the worst performer. as the index came back from yesterday's dropping 3% after disappointing u.s. jobs numbers. china shares gained ground

possibly just on the technical rebound given the shanghai composite was down seven on out of the past eight sessions. it managed to end higher by almost 1%. elsewhere in south korea, seoul shares ended just a bit lower with large cap technology shares capping losses. in australia suffered its biggest one-day loss in over three months as banks continue to slide. let's take a look at some of the individual movers. in japan, heavyweight retailers, exporters, utility stocks and major telcos, heavy sell-off. but shares held up despite debt concerns after its decision to buy out u.s. risky company beam for $16 million including debt and the stock gained 0.3%. and we're watching chinese automakers. great wall motor the eased but tanked over 12% in long on congress after the country's largest suvmaker announced a

three-month delay in the launch of a new model. given it's not their first delay, it raises concerns of a bottleneck in their production line, but the company's competitors made a strong rally today. faw car jumped 5% and guangz with hou auto up 0.3%. jonathan tepper, founder of various perception, joins me now on set. jonathan, great to have you on. goldman sachs came to this week suggesting that we could see up to a 10% pullback for these markets. but the futures are bouncing in the u.s. what are we seeing here, do you think, a bit of consolidation? >> stocks are very stretched throughout bonds. if you're looking at valuations, they're not cheap. particularly in the u.s. and developed markets. so if you're looking at, you know, price of sales, price to earnings, everyone is very excited because the forward earnings appear reasonable.

in fact, forward earnings have rarely been higher. the only time they've been higher is in the late '90s bubble effectively. forward earnings are not the best guide to valuation, given that earnings tend to be revised. then you low in investor sentiment, you know, which is near a 27-year highs. if you look at margin debt, it's new all-time highs. so there's loads of on sentiment and positioning data points that tell you that investors are very come place ept and the markets are euphoric. >> why have we gone nowhere fast so far this year? are you expecting to see a pullback? you're talking about complacency here. right now, i'm not seeing the rally continuing. admittedly, we're not pulling back, we're just chopping around. what do you see going on here? >> well, i mean, you can't read too much into any one day's trading. i think if you're looking at, for example, microcaps in the u.s. and small caps, they were

up over 50% last year by technology. looking at a lot of media names, even large media companies like viacom, cvs, companies that iron out spin-offs or have doubled in the last year. so it's certainly not every single sector in the stock market is overvalued, but there is quite a lot of frostiness. >> do you think we continue to rally despite all the concerns that you just raised? >> markets can do a lot of things in the short run. i hate to guess what would happen in the next day or two. but i think that the odds are against you if you're betting on another 30% year. and the other thing beyond equity markets, if you're looking at debt and the you're looking at, for example, the issuance of triple t bonds, if you're looking at the issuance of leverage loan market and you're looking at, you know, companies issuing covenant light loans, payments in kind toggles

essentially is very poor quality or poor protection, in fact, for the lender. we've seen a lot more private equities, and secondary equity issuance from backed companies. the there is a lot of things to happening is for an m&a wave. we're starting to see some. you just announced santory and beam. what tends to happen is you get an orgie of acquisitions and capital. >> you've given me a brilliant way to talk to you about m&a. charter communications goes public with its long awaited 4 the.4 billion takeover offer for time warner cable, which was privately rejected. charter, which is backed by

media mogul john malone made the bid back in december. it offered to pay $132 a share and $83 a bat in cash. that's slightly above time warner's closing price. the stock is up 40% since charter's interest first surfaced last june. time warner cable quickly issued a statement rejecting the bid as being too low. now, in frankfurt, charter and time warper cable trading 2% higher as far as time warner cable is concerned. so a bit higher for that index outperforming what we're seeing typically lower for the german markets today. now, google is on your pc and in your pocket. and now the company wants to be on your wall. google is buying nest labs, a maker of smart thermostats. it's the biggest deal the company has done since it bought

motorola mobility in 2012 for $12.5 billion. it gives google a high profile executive in co-founder and ceo tony ferrell, a former apple employee who is credited with creating the ipod on. let's take a quick look at google shares this morning, slightly lower, 0.3%. a gain outperforming the german market over the last three months up 30%. jonathan, we just mentioned this one. moody's rating agency has put beam under review as suntoyy bid to buy company at $13.6 billion. suntory's offer saw beam shares surge almost 25%. it could turn out to be one of the bigger winners in the deal with the billionaire investors hedge fund holding an estimated 12% stake in beam. combined portfolio arranged to

yamasaki whiskey. now back to jonathan. we were just talking about m&a there as being one of the signs of euphoric investors sentiment and complacency. is this what we're looking at here? >> well, we haven't yet seen m&a volumes that approach 2007 levels and certainly not '99 and 2000, which was the all-time high for m&a. but we are seeing an increase. some of this is driven by higher stock prices. if you're a ceo, you can use your own stock as currency. some of these deals are being done in cash, funded by debt. but it's not to say that anytime you see m&a it's generally at market tops. what will be interesting to see is you see a lot more of this. if you see people paying crazy prices, you know, the ceos are very good at destroying their own capital. they tend to overpay for companies, you know, when if going is good.

and they tend to issue shares when the market goes down. so, you know, it's quite rare that you see smart ceos buying when everyone is depressed. when markets are low, some people don't want to sell. generally, ceos, they buy back their own shares at a high price. they buy other company shares at a high price. rather than buy their own shares cheaply when markets are low. share buyback, as well, or near 2007 highs. so there's quite a lot of elements that look very much like late 2006, early 2007. but we haven't seen something as crazy as the equity offers deal which is in commercial real estate, that is market top for commercial real estate. >> when we see one of those, we have to -- what about private equity? we'll talk about that later on in the show. >> well, there are very many

capable private equities operators. any central bank kept rates very, very low. so private equities, you know, they're doing quite well given that they can fund themselves cheaply in the debt market because the fed is buying so many treasuries, they're forcing people to chase yield. and effectively investors are not only accept ago low yield, they are assessing very little protection if you look at the covenant. so right now, it's a wonderful moment to be in private equity. i'm not sure it's -- for the people managing private equity firms, i'm not sure it's a great moment. >> it's great to see there's an article in forbes magazine saying the six reasons why 2014 will be a strong reason for m&a activity, and all those reasons still qualify in their mind as reasons why it will continue to grow. but we have to leave it there, jonathan. you are saying with us. we want to move on .i'll talk to you again about google. it's long been indispensable for

an online source. going the has scooped up a hand. of robotics companies with many suggesting the phone wants to position itself as a major military contractor. however, mysterious floating bargers and a shop purchase of firms now specializing in smoke alarms have further confounded watchers. so we want to know what kind of company is google really becoming? if you want to join the conversation here on "worldwide exchange," you can get in touch with us by e-mail. that that's worldwide@cnbc.com or tweet us, @cnbcwex. now, let's give you a look at what is on today's agenda in the united states. december retail sales are out at 8:30 eastern. forecast to rise to 0.2%. and by 0.4% when you exclude autos. also at 8:30, we get december import prices expected to rise 0.3%. and at 10:00 a.m., november

business inventories are out. we have philly fed president charles plosser and dallas fed president richard fisher. both voted this year about the economy this afternoon, too. expect them to reiterate that tapering will continue. now, new jersey governor chris christie delivers his annual state of address at 3:00 p.m. europe, just days after the scandal broke over members of his administration ordering lanes closed at new york george washington bridge as political payback for a local mayor who didn't endorse his re-election campaign. ouch. still to come on the show, despite new found optimism, jonathan tepper says all signs still point to another year of sluggish growth for the eurozone. we'll get the full story after this. [ male announcer ] this is the story of the little room

over the pizza place on chestnut street the modest first floor bedroom in tallinn, estonia and the southbound bus barreling down i-95. ♪ 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 ♪

welcome back to "worldwide exchange." a sea of red in europe follows asian markets lower as earnings season kicks off in the u.s. time warner cable rejects a $35 billion offer from charter

communications. and as hollande prepares to re-ignite his economic strategies, will affairs of heart trump matters of the state? francois hollande faces the biggest test of his career today when he attempts to outline his economic vision while backing away inevitable questions about an alleged affair with actress julie gayet. stephane pedrazzi is live in paris. stephane, i have to admit i really don't care what he does in his personal life. i want to understand how he's going to underpin the economy because he has a real problem here, doesn't he? >> hopefully you're right. the love affair will not over-shadow the economic announce many today and that's important because after increasing taxes for two years and targeting mainly businesses and rich people, francois hollande is about to change his policy. he wants to build a better relationship with entrepreneurs and is likely to take a more -- direction something similar to

what has been done in the past in europe. and it looks like french people are ready to take it because they feel very pessimistic about their outlook, according to a survey. 60% of french people think that their economic situation will at the tier rate over the next 12 months and 65% think that the situation of the country will de-kline over the next 12 months. francois hollande wants too nouns today some pro business policies. he's expected to lower taxes and labor, probably around 55 billion euros to improve competitiveness in exchange for job creation. the main business will be that -- feels that there is room for 1 million of jobs to be created in the country, but doesn't want to commit to any specific targets. so we'll have the details of this announcement later in the afternoon. the press conference will start at 4:30 central european time. over to you, julia. >> thanks, stephane. we'll be watching.

spain's economic recovery picked up pace in the last few months of the year, according to the country's finance minister. the first official estimate of q4 gdp figures show the economy grew 0.3% on the previous quarter. now, still with us, of course, jonathan tapper, a partner at variant perception. of course, they were raising cash last week. it all sounds so positive on the one hand, but at the same time, the deficit is still sky high. they've got a debt situation. and we're looking at disinflation in spain. how much of a concern is that for you? >> well, the big problem is spain and the countries in the european periphery can't devalue the way they used to. so they've obviously enjoyed quite loose monetary policy and ample global liquidity over the last year, which has cyclely been helpful. so they're starting to see some upturn or at least a slowing contraction and some economic data. the big problem is, if you're cutting your wages and your debt stays the same, then your debt

income ratio is going to go up. effectively, you're seeing the spanish government deficit about 7%, debt to income ratios are rising. so in a deleveraging, what you should be seeing is debt to income ratios go down. what you're seeing in spain is debt to income ratios going up. it's what you could call an ugly deleveraging. >> what is the situation in europe that turns investor sentiment? because we can dig into these issues of debt dynamics, but what is it actually that could turn investor sentiment? >> well, investor sentiment has turned. they're extremely positive about europe right now. almost all the rise in european stock markets come from multiple expansion rather than earnings growth. so the thing that they actually need is real growth and job creation. >> very, very important. we're also going to talk about the big banks in the u.s. something we are very much focused on. still to come on the show, egyptian security forces clash with the forces of ousted

president morsi as the country looks set to approve a key referendum. we'll get out to yusef in cairo right after the break. stay with us. 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 kn

welcome back to "worldwide exchange." we are seeing implications of a higher open in the s&p 500 and implied open around 3 points. the dow jones around 30 points and the nasdaq higher by 5 points according to these futures. now, violent clashes between supporters of ousted supporters of mohammed more sis and security forces have reportedly left one man dead. this as voting on a two-day referendum is under way. yusef is on the ground there. tell us what's going on. what are you seeing? >> well, julia, the central bank of cairo is still fairly quiet. the reports of the fatality comes from around area in a different part of egypt. but that's not to say that it's all been peaceful in cairo, either. we had that explosion a few hours ago. but, between, a considerable sense of anxiety on the streets of cairo. this is not just a referendum on

a new constitution which is in theory part of this larger road map and the transition to democracy. this is a proxy skaj of the popularity army backed transition as a whole and could possibly open the door for a nomination or a candidacy by the army chief general. it's important to point out that just a few days ago, on sunday, the army chief made it clear that if the egyptian people wanted to see him leave the country, he would not say no to that. so he kept that possibly open and it has worried some other people, policymakers around the world, that this could see a return of an army strong man rule that we saw under the time of ousted or former president hosni mubarak. in any cases, the lines are getting longer. extending the rally then in the new year to over 6%. > .

still to come on the show, ten out of a11 preearnings announcements have lowered forecasts. come up, we preview a bigger week of the major u.s. banks. in my world, wall isn't a street. return on investment isn't the only return i'm looking forward to. and my parachute definitely isn't golden. [ male announcer ] for some, every dollar is earned with sweat, sacrifice, courage, which is why usaa is honored to help our members

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welcome to "worldwide exchange." i'm julia chatterley.

these are your headlines from around the world. equities in you'll fall. tech stocks and banks sway as attention turns to earnings season. jpmorgan kicks it all off as banks report fourth quarter results with some clouds still hanging over the company. m&a, the other big market story, time warner cable rejects more than 37 billion dollar offer from smaller rival charter communications. calling to bid too low. the french president is expected to unveil his reforms for the economy, but affairs of the heart might just get in the way. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. well, u.s. markets ended the session yesterday at three-week lows.

but it doesn't look like the sell-off is lasting long. dow futures indicating around 28 points higher for the session today. for the nasdaq, we're indicating just over 5 points higher. and for the s&p 500, indicating just over 3 points higher. for that stock, ending the session down 1.2%. this is the performance that we're seeing with some of these top global tocks, an underperforming session in asia, led by the nikkei over being closed yesterday and in europe, the equities under pressure this morning. you can see them here. the uk market is down 0.3%. the german markets underperforming today down 0.6%. french down 0.5%. and the italian markets down 0.3%, too. so bucking some of the gains that we saw in yesterday's trading session. but just how do you make money in these markets? well, here is what some of the experts have been telling us this morning. >> bank trading along with --

excessively strong economic data will be the call of the day for us. and for that reason, the ten-year treasury looks expensive at levels low to 80, i would say, and it looks cheap as levels somewhat higher than 3%. >> i do think that a lot of those from the reserve management communities will taper off. and i think it's back to the fed and locked into this program this year will gently move the euro. i don't think it's going to be a dramatic shift. >> the most exciting growth in the world that we believe in the next five to on ten years will come in the developed world. so we talk a lot about the 18 to 37-year-olds in the united states being 86 million people

and their lives have been postponed by the meltdown the last five years. >> the leverage coming forward from having your largest population group moved from 28 to 38 over a ten-year stretch is enormous. >> it's a big week for u.s. earnings reporting season kicks off in earnest at jpmorgan before the u.s. sell today. the first dow component to report. we've also got wells fargo releasing earnings today followed by bank of america tomorrow. thursday, goldman sachs and citi lead the bank earnings and we've got intel reporting, too. on friday, general electric, bank of new york mellon and morgan stanley will be rounding off the week. kay kayla tausche has been looking at what we can spec'd. >> with alcoa out of the dow, it will be the banks that kick off earnings season in earnest. analysts and investors alike

will be watching with revenues slim, banks have been pumping up profits by cutting costs and storing away monies for bad loans and litigation strategies. those strategies are wearing out. in an improving economy, growth comes from loan growth, especially for consumers with mortgage refinancing all but dried up, banks need this in a big way. what is the effect of the fed taper announced in mid-december? in the third quarter, trading sharply fell off a cliff when the fed cut the status quo on qe. but rising yields in the wake of that announcement should spur more activity and it should improve interest economic. while that could lift earnings, they're not expected to be blockbuster. jm morgan is expected to post 1.25 per share on roughly $23.8 billion in revenue. that's down slidely. it's better than a q3 loss.

but the bank will take a settlement over its dealing with bernard madoff, the famed ponzi schemer. in october, wells fargo said its mortgage pipeline would be cut by half. that hurt since it's the bank's single business unit. but that interest income will benefit wells. higher yields could benefit them and investment banking could be a bright spot for the bank. analysts looking for slightly higher revenue on 20.9 billion in revenue. later in the week, citi's shrinking bad banks turns five and bank of america with a lot of big ticket legal items behind it and less housing exposure could sxries to the upside. that's according to a lot of analysts. but the tone will be set from jpmorgan and wells fargo and time will tell how those companies do. back to you. >> now joining us on the phone is gerard cassidy at rbc capital markets. there's a lot of expectations on the financial sector in q4 to

drive some of the biggest, the best earnings growth. what's the risk adisappointment here? >> i think what you're going to see is that the bar is set quite low for the banks going into this corner, as your colleague just reported there's a number of concerns on residential mortgage lending this quarter, also the litigation costs. so i think we're going to see the borrow set loan, i'd be surprised if there's a real big disappointment today or for the entire earnings season. sfwh what are your expectations for jpmorgan here? >> i think what we're going to see with jpmorgan is they're going to have continued lower credit costs. on top of that, their lending division, their commercial lending division all year has been breaking records. we expect to see strong commercial loan growth, as well. but you have the issues with the lower residential mortgage refinancing activity and the impact that will have on revenues this quarter. >> it's had a strong value, though, hasn't it, since november? what's the risk that even if they don't disappoint, there's a real top side of expectations

not to see weakness in the share prices here, surely? >> i think you're right. since the big settlement of $13 billion, the stock has rallied very nicely and i think investors are now understanding that the credit -- or the legal costs are starting to finally be put behind them and that's a real positive for 2014. you also have capital markets at jpmorgan as you know are very important and that's going to be a tough quarter this quarter. >> perfect. and talk me through wells fargo. sh what should investors be looking out for there? >> wells fargo has 16 consecutive quarterly increases in earnings. i think they're going to continue with that this quarter, but they may need to use gains of mortgage servicing to do that. as you pointed out, the revenue -- the mortgage organizations are going to be down materially this quarter due to the lower re-fi bits, but we should expect to see the write-ups of mortgaging this quarter, as well. they have a very strong management and brokering division that should report good numbers this quarter.

>> is that going to stop feeding into the numbers here? >> they are certainly a very large player in this business. and they've been able to manage their costs in the mortgage business so they're going to continue to bring down those costs. they're going to continue to be cutting the head count and that's going to help offset the lower re-fi activity that you're seeing. and we expect that to continue in the first half of 2014, as well. >> gerard, thank you so much for keeping us informed, gerard cassidy, lead banking analyst. gentlemen, how do we make money in 2014? >> i mean, i think the best way to make money is to try to buy stocks that are cheap and, unfortunately, now there are far fewer that are cheap so it's a much harder task. >> buy low. >> obviously, you want to buy good valuations. there are companies out there. but part of the problem is that, you know, it doesn't matter what you're looking at. like almost every index is much

more expensive than it was a year ago. if you look at, for example, great value investors getting cash back, if you look at buffett, he's sitting on his cash. it's not to say there aren't opportunities out there, but they're fewer and far between. >> great to have you on the show, jonathan tepper, variant perception. coming up, charter communications is trying to schedule an appointment for the cable guy to come and connect with a merger with time warner cable. the latest on the back and forth in the bidding war between the media rivals, coming right up. ♪ ♪ stacy's mom has got it goin' on ♪ ♪ stacy's mom has got it goin' on ♪ ♪ stacy's mom has got it goin' on ♪ [ male announcer ] the beautifully practical and practically beautiful cadillac srx. lease this 2014 cadillac srx for around $319 a month with premuim care maintenance included.

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over the pizza place on chestnut street the modest first floor bedroom in tallinn, estonia and the southbound bus barreling down i-95. ♪ 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

♪ welcome back to the show. carter communication is seeking a connection with time warner cable with a long awaited takeover offer. seem ma mody is at cnbc hq with more. >> this is the third time it's made an offer for its bigger rival. charter, backed by media mogul and liberty chairman john malone made this latest bid in december. it was disclosed in a letter from charter ceo tom lutledge from rob marcus.

charter is offer to pay $132.50 a share in cash and stock. of that, $83 a share would be in cash. $49.50 in charter stock. that's slightly above time warner's closing price on monday. the stock is up more than 30% since charter's interest in the company first surfaced last june. by making the offer public, charter is seeking to enlist time warner shareholders to put pressure on management and the board to negotiate a deal. it comes at a critical moment for time warner cable, just about two weeks after markets replace long time ceo glenn brit. in a statement, rutledge says, quote, our intent is to talk to time warner cable shareholders and convince them that putting the companies together and putting the company back on a growth trajectory will create enormous value for shareholders. time warper rejected the offer

as grossly inadequate. in his own statement, marcus calls the bid a nonstarter and says a significant portion could be in stock, the value could be substantially lower, given the valuation, operational and significant balance sheet risks embedded in charter stock. the market says time warner cable is willing to accept the price of $160 a share with at least $100 of that in cash. time warner shares rose nearly 2% in after hours on monday. today, we're seeing the stock up, as well. now, a program note, charter ceo tom rutledge will be on "squawk on the street" for an exclusive interview at 9:00 a.m. eastern. you don't want to miss that. julia. >> seema, we won't, don't you worry. thanks for keeping us informed. google is our your pc and in your pocket. now the company wants to be on your wall. google is buying nest labs, a maker of smart thermostates and smoke alarms for $3.2 billion.

it's the company's biggest deal since it bought motorola mobility back in 2012 for 12.5 billion. it gives google a high profile executive in nesco founder and ceo, a former apple employee who is credited with creating the ipod. so we've been asking all morning, what kind of company really is google aiming to become? google might want to develop implant chips, right, so they can buy on us even more, one viewer says. fair point. if you want to join the conversation here on "worldwide exchang exchange", get in touch with us by e-mail, world would it@cnbc.com or @cnbcwex. all your comments very welcome. now, let me bring you up to date with our top stories. a sea of red in europe followed asian and american markets lower as jpmorgan kicks off the u.s. earnings season. time warner cable rejects a

$37 billion offer from charter communications. and hollande prepares to re-ignite his economic strategy, will affairs of the heart trump matters of state? coming up, many u.s. retailers didn't get a visit from santa this season, but heavy promotions and budget conscious consumers cut sales. top executives will be facing tough questions from analysts and invery fasters today. live from the retail conference in florida. that's coming right up.

well, m&a is already in full force in 2014. but private equity firms have

already been among the key players in corporate takeover activity. a deal, though, makes a steady comeback from prepsoriasis loans. but our next guest says that the sector has room to improve in order to keep investors happy. jason happ, principal consultant at investrom joins me from new york. a very good early morning, jason. isn't this part of the deal for investors when you invest in a private equity company, they don't have the ability to provide the same level of information as a private company would. >> no, absolutely. and we certainly don't think that we're going to get to a place where the industry is providing the same level of access as the public market. but at the same time, we certainly think that there's room for improvement. and providing information in a more timely manner and providing access for the investors so that they can self-service their needs i think is certainly something that we expect to see a greater demand in the coming years. >> it will be a differentiating

factor, i.e., give me the information or you don't get my cash. >> yeah, no, absolutely. what we've seen in the past couple of years is that the increase in the investor demands and the sway that the investors have over what the general partners are are providing them and the act of the information that they're getting has certainly increased. and that is one of the top things on all general partners minds is they go through the due diligence process. how can we be a differentiator? how can we provide a better level of service to their investors? as we said, we think that the self-service portal is a way that's going to start to improve that. >> how quickly are they going to be able to make some of these changes? in your report, you say 77% of firms don't provide enough access for investors but 77% realize they probably should do. how quickly are those things going to change? >> i think that you're going to start to see some changes in the very near term. i think the focus right now has

been around just getting the access to the information, getting the data in a fashion that they can manage and then provide those on demand questions quickly. what we think is going to happen is over the next couple of years, you're going to start to see firms go beyond that leap. take that data and now start to publish it in a controlled environment. so, again, we don't think that we're going to get, you know, daily valuations and daily -- directly from the private equity companies, but the ability to better slice and dice your portfolio on the investment you have is go the going to be critical in the near future. >> i guess the kooem key problem with that is it's going to cost more. that's going to compete with returns. jason, great to chat with you. now, the holiday shopping season is over, but the dust is still settles on many retailers results. several executives will speak at

one of the biggest gatherings of the year. courtney reagan is live in orlando. courtney, what do we expect to hear today? >> good morning to you, julia. i'll admit, i get a little blue when the christmas holiday season is over. but it is nothing compared to the sadness that retailers and investors alike are feeling now that we're hearing some of those holiday sales numbers. these special retail company numbers are using the conference to try to talk to investors and mitigate the damage and the holiday season and explain how they're going to fix it in to 14. if we look at lululemon, express, five below and american eagle, those are just among some of the names that have reported some disappointing earnings results, lowering earnings expectations. what went wrong? we know we had a lot of san antonio snowstorms during the holiday season. that is worrying goo going into this new year.

we'll see exactly what the companies have to say today. even though lululemon's ceo is not going to be here, the company's presentation is among the most anticipated. expect standing room or maybe even them to run out of on standing room only in the conference if it's anything compared to years past. this year, they have even more questions to answer. at one point, lulu's share price was skyrocketing. in the last six months, it's down 27% compared to under armour which is up 40%. nike which is up 18%. the ceo has a lot of questions to answer today about what is going forward with the brand and the brand image that has been a bit tarnished. interestingly, aeropostale pulled out of the conference a couple weeks ago saying there was too much noise surrounding the company and that would make it very difficult to present here. noise meaning speculation about what happened during the holiday and speculation about whether or not the company will go private.

but when aeropostale pulled out of the conference, shares moved higher because folks think that is a sign the company is close to going higher. among the questions being asked here today, what happened to margins during the holiday season? we happen it was one of the most promotional on record. what are retailers going to do to wean consumers off those 40% and 50% sale levels they may well have become accustom to. >> can i ask you about the secure breaches we have seen and the likes of naeemal marcus? what do you think will be among the retailers today and do you think there's going to be any more information about just who has been affected? >> so it's interesting, julia, is it was really the second big retail conference of the week. i was at the national retail federation korns in new york city the last two days where there were a lot of technology companies that had booths there. i'm talking microsoft, oracle, intel, cisco, the big, big name players and they were all there

reassuring retailers, look, we're doing the best we can that we have for you. you have to use all of us sort of together in tandem. there is no one solution. there is concern and retailers are just getting out there, assuring their clients and consumers alike, look, we're doing what we can. and if disaster strikes, we're prepared to handle it in the best way we know how. >> so very much a pr exercise and doing the best they can. courtney, great to chat with you. thank you very much. >> thank you. >> have a great day. >> thank you. let's give you a final look at the european markets this morning. lower across the board here. the key underprmper there, the german market down 0.6%. a real feeling now that we're treading water ahead of the open of the u.s. market. bucking the trend, it seems, versus the losses that we saw in yesterday's session as you can see. higher by the futures on the dow up around 30 points for the dow. tends to watch out for retail sales on the data front, i'm

julia chatterley and thank you for watching "worldwide exchange."

good morning and welcome to "squawk box." earnings season kicks into high gear with jpmorgan and wells fargo. time warner cable rejects advances from charter communications calling the offer grossly inadequate. google lands a deal buying nest labs for $3.2 billion and maybe most importantly, a big sell-off yesterday in the market on the eighth day of the new year. we'll see what that pore tens. it's tuesday, january 14e, 2014 and "squawk box" begins right now.

good morning, everybody. i'm becky quick along with joe kernen and andrew ross sorkin. we're going to start things off with the markets this morning. the s&p is coming off its hardest hit in two months. consumer discretionary and stocks were the biggest losers yesterday. the dow shed more than 1 % with 29 of 30 components finishing in the red. as for rates, this would be the reason you saw a lot of that sell-off. rates yesterday fell to their lowest level in about a month. today, the ten-year note is at 2.851%. yes, joe, i've been thinking about this and our bet. the bet was engineered around the taper and what the reaction would be to the taper. >> i wanted to go longer. and you said no, i'm going tout of town. >> you wanted to go