of taking over vodafone. and shares of banco populare are lower due to the rights issue putting pressure on the entire land. >> you're watching "worldwide exchange" bringing you business news from around the globe. >> a very good morning to you. we'll kickoff with the latest germany january info survey out. we have seen the german economy tick up a little bit stronger. haven't quite got that data for you, but we'll show you that it is coming better than expected. euro dollar up to 1.37.

at the moment we hit 1.40 on friday. the climate index, 110.6, so a little better than the forecast 110. we have seen the dollar weaker against the yen, but the euro seems to become more of a safehaven currency than the dollar over the last week or so. so plenty more to come on that. joining us with his views, chris watley, good morning to you. nice to see you. >> good morning. >> the germany economy is chugging along rather nicely. the question is how much of a benefit it is to the rest of the eurozone. >> europe is in a clear recovery phase. that's been ongoing for 12 to 18 months. we have seen terrific flows over the last 12-plus months into the equity market. the question now is whether you can start creating credit in

europe. that is the last piece of the growth puzzle that we're waiting to see, which we think may come this year as we see the credit expansion. >> are you concerned about france or not? pmi was slightly better than we thought. >> yeah. it's the one that hasn't really embraced structural form in a significant way. and, yeah, i mean, it's not a world performing economy, but i wouldn't be concerned about it until money starts to get really tight. and that's quite a distance away for europe. so it will chug along. >> you say money is tight, what do you mean? >> i mean as we get towards the end of the economic cycle and central banks start raising rates or tightening up liquidity markets in a meaningful way. they are starting to do that now and we see the effects in the markets. when we get to the end of the cycle when the u.s. and europe have up nation pressures, i'm talking two to three years away, then i think france will standout as having a significant

problem. >> okay. stick around. more to come from you. straight off the back, jules is not here as she's on her way to brussels to speak to policymakers. she'll be with us tomorrow from the business europe conference to speak to more high-profile guests including emma masaglacia and the president of medeff will be here as well. investors are eyeing the fed's decision later this week and the potential for more tapering. we'll ask if the un currency is here to stay. and we'll speak to the chairman and ceo of instan bull in around 15 minutes. robert de niro's resort is

set to open later this year. we'll hear from the acting legend at 10:45 ct. and the cambridge satchel company that started with a 600-pound budget now armed with 21 million pounds of budget is targeting children. we'll speak to the woman who started it all at 11:20. and apple is reporting after the quarter today with updated ipad and a global release of iphones all set to fall within sales figures. we'll preview those figures at 10:45 cet. first, though, we'll be up to speed with global equities. on the dow jones heat map, weighted to the downside at the moment. equities decline around 7 to 2. we are not quite at the session low, we hit that half hour after the open, but plenty of red.

the s&p is down 2.5%. the biggest loss since june 2012. ftse 100 down 1%. t the cac is down .06%. and a number of stocks to talk about. motorfo motorfone, we are hearing at&t deny that they are possibly taking over vodafone. they can't do anything for six months or so. and there's a deal for erickson claiming they should boost their swedish crowns. and merck has left the company to rejoin their rival in

mid-may. and lanxess is up 8%. italian banks are under pressure this morning. they will post a bigger than expected loss of 600 million euros in 2030 due to loan loss provisions. bmps is down 3.5%. u.s. bond treasury yields hit two-month lows on friday. down to 2.0%. the guilt yields are heading up to 2.9%. on the currenty market, the dollar is a bit weaker across the board. we hit 1.37 on friday. the dollar/general is at 102.33.

aussie, we are at .87. and sterling, 1.65 on friday. we hit a two-and-a-half year high on friday. that's where we stand in europe trading. joining us for the first time this week, i'm happy to bring on board li sixuan. >> good morning. these assets came under pressure and selling currency such as indonesian rapia. the dramatic composite trading lower by 2.6% in india. over in japan, the nikkei is dipping to a two-month low ending down by 2.5%. and hong kong's hang seng broke look for the first time in five months ending down by over 2%.

so profit taking hit recent outperformers and the growth stocks also continue to lose ground after they posted a profit warning. but over in china although the fears linger, the markets were doing relatively okay compared to the rest of the region. the shanghai composite ended down after the chinese new year holiday, but do note ipos remain pretty strong. trading eight stocks debuting on the shenzhen was suspended after they hit their upper limits on their first day moves. and there are nine to come online tomorrow. and in corporate news, we are watching shares of foxcon. they see revenue growing to 10 trillion over the next decade while it considers manufacturing to the u.s., in hopes of garnering more business from apple. this is also focusing on

indonesia to design phones with blackberry, but the group shares ended in the road. so that's the recap of the asian markets. ross? >> thank you for that, li sixuan. i want to get your views, interesting the dollar here, you want expect it to fall against the yen but it's also falling against the sterling and the euro as well. the euro is more of a safehaven than the dollar. >> straightly strange, isn't it? it surprised me. and actually, if you look at the trade against the dollar, not just against the currencies you mentioned, it was weak on friday as well, which is quite bizarre in the sell-off. normally you get it rallying. >> i just wonder if the dollar is switching to becoming a growth currency. >> well, that may be part of it and it may also be, in fact n europe, you have slightly tighter money anyway. the balance sheet is shrinking faster, so maybe that's become more of a safehaven the last 12

months. >> what's the figure for the emerging markets this week? >> i think it will be embarrassing for the fed if they change their move on the one week's movement because it is heightened in the media over the last few days. so i think the fed will carry on as usual. i suspect as we get into the march meeting it may well change the way they behave. i argue this has just begun. >> in what sense? >> in a sense this is a way of risk aversion, so all the models were pretty close sellers coming into mid-january. >> you put this note out saying sell it, buy bonds, right? >> exactly. longer term portfolios we positioned in late dis, more into bonds now of u.s. equities and beginning the shorter term ones we were trimming as well. we would be looking for a pull-back. we are short in our trading models as well.

and yeah, i mean, if you look at our models, it really shows you everyone is positioned the one way. equity often was at a 27-year high. i couldn't find anyone that liked bonds running around the base, so everyone hated bonds, as you know. and, of course, a 3%-year-old at the end of last year isn't a disaster. almost 4% on the 30-year. if you worry about deflation, it is quite attractive. so it is interesting to me, so that's why i said, i think it is about positioning and a way for risk aversion as we unwind the overly bullish positions. and i think we'll see a bit of stability perhaps this week. you always get that after the initial sell-off and then more downside into february. >> but you think that more downside will interrupt the fed in march? >> yeah, i think there's every chance. it's very difficult at this stage to know how significant the pull-back will be, but there's plenty of macro with it this time, it is not just

positioning. the event is a macro event. and this is affecting emerging markets. and there's every chance significant enough -- >> but it's not the tight anything of the liquidity, how meaningful is that, more in the mind -- >> it is all in the margin. we forget, markets work in the margin. so we've gone from we never knew when they were going to tighten reduce qe in december the first one, now we are on a set path. and i think that's -- there's a lot of leverage based on the fed trade, this unwinding. and so the market says, look at the margin with time and liquid did. a ten-year bond model is backed up significantly in seven months. if you look over the last 30 years, when they back up that much, something normally happens in the world of finance. and that's what we're seeing. >> volatility stays, essentially. where does this wash out then? when does this -- >> where does it wash out?

>> how long for it to wash out? >> very difficult to be precise, but best guess, into mid-february, late february, possibly a bit longer. it may be a brief flutter here, we rally and then pull back significantly, but until we see our models move back towards buy signals, we wouldn't want to be putting money back to work. it may be that you need a crisis moment to mark a low. >> always good to see you, chris. chris watling at long view economics. we have been seeing the currencies continue to get crushed forcing central banks to intervene and send them low. we have your currency markets coming up.

google has snapped up intelligence company deepmind technologies in a reported $500 million deal. the british start-up was funded in british in 2012 and they use ecommerce and games.

they are also focusing on machine learning. tech companies are placing a greater effort on ai, we want to hear what job would you gladly hand over to your computer? join the conversation and get in touch with us, e-mail us at worldwide@cnbc.com or tweet me @rosswestgate. what would you hand over to a daily job to a computer or robot or whatever it is? those little chores we don't like doing. shares of vodafone slumped after at&t ended months of speculation they won't take it over. the press was suggesting the telecom giant was looking to take a 60 billion pound bit, this was after the ceo randall stevenson met with the eu telecom chief last week. but they made their position clear following the review of the takeover panel.

the u.s. company is ruled out from buying vodafone for the next six months. shares of vodafone have been up 30% over the last few months. at&t is up 1.75%. liberty owns 20% of ziggo. this is a big move to expand liberty's reach across europe. and the world's biggest bank by assets may be expanding in britain. dow jones reports that icbc is in talks to take a 60% stake in standard banks commodities for an exchange trading business. sources have said the deal is now worth around $700 million but could give the chinese bank the option to boost to 80%. last week the chairman of icbc cold cnbc they are announcing a

major acquisition this week. the icbc today is down 1%. and the u.s. attorney's office has investigated whether a trader at bank of america engaged in improper activities by doing their own futures trading ahead of putting in orders for clients. they disclosed the investigation in a regulatory filing and said the cftc also launched its own probe. shares of bank of america are up 41% over the last 12 months. on friday they closed down near 2.5%. staying with banks. most of citigroup bankers in europe will receive half their bonuses in cash this year. this is due to competitiveness of the european banks hit by tougher rules. shares of citigroup are down with a decline around 1.5% in the last three months.

up 2.7% on friday. nasdaq omx is set to take a 5% fall in istanbul. joining us is ibraham, thank you for joining us, why is it important for you to sign this agreement? >> thank you. and have a good day. this is really very important for istanbul borsa, this will improve our i.t. infrastructure and bring state -- and also have

them partner in a lasting relationship will help in various aspects and various angles to anchor borsa inst instanbul. >> nasdaq's suite of technologies, how do you think that will help you attract more business? >> integrated technology will enable us across market collateral management and very smooth transaction between markets and it will be, of course, fast, efficient and sound technology.

so, for example, high frequency trading is not possible for the time of being, at the time of being, and infrastructure hft will be possible. we will have location services, we will be able to host investors or even other exchanges in the region. so those are the very first points that come to my mind. and also since we'll be able to connect in financial centers through nasdaq financial network. again, this will contribute sizably to the availability of borsa. >> the markets just hit a record

low of 2.38 of the dollar against the lira. how worried are you? >> well, you know, ups and downs are something that may happen, especially in emerging markets, and this is the very reason why investors put their money in emerging markets to enjoy, to benefit from high volatility sometimes. but i would say that if you look at a longer horizon, the physical outlook of turkey has been high. only for the last year the public sector as a whole was less than 1% or 1.2% of the gdp. the banking sector is really very solid, sound and resilient. and the growth prospect is still

there. so this kind of, you know, volatility can happen at any time, but i think it will be settled in the very near future. what will remain will be the general outlook of turkish economy, which is great. and i think this kind of, you know, temporary depreciateuations are relatively cheaper. >> it does indeed do that. thank you for joining us. congratulations there and our apologies for a bigger delay therein that we might have expected. and we are talking about emerging market currencies extending losses from last week down for the sixth day in a row.

the filipino peso hitting its lowest as well since 2010. joining us is the head of global currencies at usb. thank you for joining us. >> thank you. >> how much further has this got to go? chris watling says it may stabilize, but he thinks we are only at the beginning of a shakeout. >> yes, the figure has happened yet, so emerging markets is more fixed income trade than an equity trade. for the last five years we have seen fixed income come in more than equity money. this hasn't left yet, so while there has been underperformance in em currencies, there's been underperformance in the equities. you haven't seen these rates perform in a big way as of yet. there's been credit worsening, so they have been widening out. so i can see why this stabilizes in the near term. and so far this has been entirely an em trade. we have not seen the dollar leg

of the movers yet. in fact, euro has held up throughout the course of the last year. so when the u.s. front end begins to move as it inevitably will over the next two to three years, em will be compromised in that move as well. >> what's the exact trade for this latest -- argentina decided to give up the peso, is that it? because everything else, the fact that china's pmi is slow -- >> yes, number one, argentina said europe and china were getting very unhinged. china is a very big deal. everyone expects 7% to 8% growth, i think they are going to be disappointed because china wants to deliver. and that means it comes at a cost. but also in mainstream em, a place like turkey is just not following the right policy, so central bank of turkey is

meeting where they completely missed to make a bold statement is compromised confidence in the emerging markets. these three figures have been the approximate figures. for all the talk about balance of the crises when you look at the markets and volatility, when you look at what the options cues are, it is actually reasonably priced. it is not priced for distress at all. >> well, stay there. we'll have more from you in a few moments. still to come, profit warnings for the last day of 2013 kept the fourth quarter high with earnings alerts. we'll get into that as soon as we come back.

u.s. stocks closed lower after the fed makes a decision later this week. and at&t denies rumors of vodafone takeover this week. and google is in a reported $400 million deal. it is the biggest acquisition in europe to date.

and ericsson in the green after joining with samsung to increase sales in britain. european equities are down at the beginning of the trading week. the ftse 100 over 1%. vodafone is low. the ftse is down 1%. bull market yields have gone lower. ten-year bond yields are down to 2.93%. the guilt is down up 2.78%.

the real focus is on emerging currencies. in tushish lira this morning, a record low against the dollar at 2.38. you said turkey is getting it horribly wrong, what's going on? should the central bank raise rates? >> let's think about what turkey's problem is. their problem is low savings rate. they are competitive and their leverage has increased and they borrowed money from abroad, but low savings rates, how do you fix those rates? grow aggressively out of it and we are improving very slowly. to fix the rate, you need to hike real interest rates. and i think they have completely missed that opportunity so far. and perhaps a change in the future for the situation is alarming enough for them to have done it previously. local demand for dollars, remember, this is a dollarized economy, it has had periods of high inflation, is going up. and once that is out of the bag,

it becomes very difficult to control. so i think the ice is already extremely thin. in fact, it has been for a while. i'm surprised the cb has not reacted more aggressively. >> this is -- em generally, you can't capitalize this as one player, presumably each world investors pick countries individually rather than sweep across the board. they are very different stories. >> it is a big world between here and indonesia, but once you get five stories going, investors do tend to panic. and panic can be an assumption, over the medium term, investors get good levels to come in. mexico is one, korea is another, but in the near term investors will probably book profit. and the most liquid ones, perhaps. so those good fundamentals ironically are in harm's way in the near term, so i think right

now as volatility goes up, revenues do not work. but for long-term investors, that gives you the opportunity to come in. korea, asia, mexico -- >> maybe the philippines? >> philippines perhaps. it has good fundamentals but assets are priced for it. philippines has not sold off in a big way yet at all, so you need to see further cheapening of that. >> it could be discriminatory. >> to say that em is going to blow and you get a series of balance payment crises, it is simplistic and wrong. >> thank you for joining us today. managing director at ubs. for more coverage of the em, we'll ask whether the sector is on the bring of another crisis and look at the three main culprits behind it on cnbc.com. you can also follow it on twitter @cnbcworld. egypt, meanwhile, is holding a presidential election before it goes to the ballot box very

parliamentary poll. this announcement came at the third anniversary of egypt marred by violence. we are joined now with more from egypt, what's going to happen this week? >> well, we have a reversal of the road map. he sat down with various political forces and they came to the decision, that was the more prudent thing to do. given the difficult conditions in terms of national security that the country was going through, that means we are looking at march, possibly april for the presidential vote. and that opens the door now to presidential contenders. and the big question will be, is the head of the army here in egypt going to run himself, and what does that mean in terms of the larger share or the larger way of dividing power.

a lot of unanswered questions there. and also coming off the back of a very difficult, very violent weekend that has shaken the country and left a long shadow. clashes between supporters of the muslim brotherhood and those opposing the military bracket transition and the security officers have left at least 49 people dead, ross. that is a number that is still hard for egypt to struggle to digest. and it will be interesting to see how the government moves forward. you have the perseverance in terms of the transition, but whether that will go well and whether they can maintain national security after the bombings we saw over the weekend that shook the capital. again, the sinai fundamentalist group taking responsibility for those attacks, in the meantime, investors are looking at the egyptian stock exchange trading to the upside, but of course we understand very well that any

further violence will have an imminent impact on economic drivers like tourism and foreign investment. ross? >> yousef, thank you for that. see you later. that's the latest from egypt. meanwhile, protests in ukraine have spread out across kiev. fresh clashes were reported in the capital. this weekend the opposition rejected to join the president and stepped up demands calling for an early election. thailand's planned election for this sunday is looking increasingly tenuous. over the weekend protesters blocked the polling stations in bangkok. classes between pro and anti-government protesters and one was shot dead. election officials will meet tomorrow. and from our november to dividends in december, just days before poor retail sales came

out, a number of profit firms issued profit warnings at the end of last year. according to a new survey, the last three months of the year came out with profit warnings. joining me is pete mcgregor. keith, good to see you. profit warnings down to a three-year low last year and then this pull off fourth quarter, what was going on? >> it came as a bit of a surprise for most people. particularly give as you eluded to, we saw some great momentum through the first half of 2013 on fundamentals. but then the fourth quarter came along, and i think the roots were in the third quarter and the beginning of the fourth quarter. so we had the beginning of the emerging market. and we had the u.s. debt ceiling and shut down talks were two big factors. we also saw perhaps good news

stories from the u.k. expected, so we have people sighting the strength of sterling and we have 10% of warners mentioning cost runs in research and development. so it's good that companies are investing, but it's investing ahead of perhaps expectations. >> sterling is the reason why we had more warnings in aerospace and defense, one of the sectors in high proportion? >> nearly half of that sector warned in the final quarter, that was one reason, the predominant reason was contract delays. so heavy u.s., it is heavy government, heavy defense under which you are under pressure right now. >> interesting was the high streak in the u.k. noticeable winners and losers, but what does that mean for profit warnings? relatively low number in the end? >> tiny number, two in the quarter, nine in the year, that's the lowest in years from that sector. the dog didn't bark, if you like. a number of factors play in here, one is they are persistent

warnings from the sector. so expectations were pretty low. secondly, although we had a pretty bad october/november in terms of spending, december was very good. so those retailers got it right. those who held their nerve on pricing, didn't go straight to sales and discounting, those who got their bricks and clicks together, those who got their volume profits together did well. those who didn't on those three fronts suffered as a result. >> we got an improving economy here, and yet it didn't help the support services sector. ftse's support service, why not a large number of warnings there? >> first off, it's the largest single sector in terms of population. secondly, it's dominated by smaller businesses who in turn have largely business to business and business to government contracts. and they tend to be disproportionately large compared to the company. so any delay, largely fixed

contracts, has a disproportionate impact on the expectation. and you see it every quarter. >> we've had data come in consistently stronger in the u.k. than last week, the unemployment data came in stronger, now people are happy that the rate rises at the end of this year. the economy is trying to smooth that down a bit, but clearly people are thinking about the market changing. how will that feed in, do you think? >> the first impact is back to retail and consumer related. we saw very low retail warnings. we saw no housing construction, building material warnings in the quarter. we had a webcast for our u.k. retail clients just before the year end. and 41% of those clients cited disposable income. and that's single biggest concern for the year ahead. and the interest rate and the fiscal environment goes a long way into that story. >> you can see if that changes. keith, good to see you, thank you very much. keith mcgregor, capital

transportation at ey. don't forget, if you have thoughts, e-mail us at worldwide@cnbc.com. and robert de niro is going to check in to asia later this year when his luxury hotel group opens a property in manila. the actor, director and producer spoke first to cnbc about the venture. hear what he had to say after this. fifteen minutes could save you fifteen percent or more on 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.

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japan's trade deficit nearly doubled from the year before. here's more for us from tokyo. hi makiko. >> this is the third time they fell into the red after the massive tsunami in 2010. exports grew for the first time in three years up 10% to $680 billion. but it wasn't enough to make up for the ever-increasing imports of fuel, essential due to the continued expansion of the country's nuclear reactors.

imports of semiconductors were up to nearly $800 billion. a breakdown of figures show imports from china were the largest with over $170 billion in clothing and mobile devices bought by skra pan. on the other hand, china was surpassed for the first time in five years. economists say with more japanese manufacturers shifting production overseas and exporters in electronic makers are facing competition globally. that's all from the nikke ireport. >> thank you, makiko. emerging market currencies come under pressure. at the same time, china releases industrial profits for december. corporate earnings still in focus. we are seeing third quarter numbers release d among the big

steel makers. robert de niro's luxury hotel is said to open later this year in manila. the hotel will become the second major hotel brand in manila's 1.3 billion city of dreams hotel and casino complex due to open in mid-2014. cnbc' susan lee sat down with co-founders to find out how this expansion came object. >> the first noble was in new york, and that was a couple years after i went there with a friend and met nobu. i said, if you want to open a restaurant in new york, just let me know. and that's how it started. we didn't think it would grow into what it was, what it would be. so it wasn't an intention to be international.

that happened on its own. >> now, i have to tell you that those members of my crew are disapointed you are not opening a nobu hotel in their markets. when is that going to happen? >> we are looking in singapore to do a hotel and a restaurant. and mccow, after manila, maybe we'll do one with the city of dreams in mckau. that would be a great thing to do. but we'll see. >> do you think that's going to happen pretty soon? >> we don't know yet, but maybe you can ask james pack and lawrence hote. >> that was a time when i spoke to james about doing one in mccow, but in the beginning it was a little early. now it becomes more of a food destination, not just gambling. so it's like what vegas many

years ago was just gambling and now it's also a place where you can have good food. >> how did you come one the concept of turning it into a boutique hotel? >> over the years what i would notice, these hotels would be asking noble restaurants to be put in them. and i was -- i said, to give them a certain cache and credibility, so i said, why are we not just trying to do a noble hotel ourselves? why do we have to -- we got resistance, stay where you are. it will be nice to have a little restaurant there. and i kept saying, no, there's no reason we shouldn't try this. everyone starts somewhere and let's see where it goes. >> robert, what about your interests in asia? you're part of the shanghai project as well, project 179? >> yes. >> that's a hospitality center, what does that mean? >> we were approached to do this project 179, and it excited me

just to be involved, my partner and myself, we had the greenwich hotel in new york, to do this, and we are still involved in working it all out. i don't know what's going to happen, but we're working on it. and shanghai is a great city to be part of doing something, creating something in that city, and restoring the traditions of, in this case, the boon, was exciting to us. >> is asia is exciting to you? >> yeah, of course, sure it is. >> okay. joining me with more is andrew sykes. what are the pitfalls of going into that market? >> there are a number of

changes. it's already the second biggest market for the biggest hotel operators, such as intercontinental hotel and marriott. and short-term, for example, right now there's a hit on luxury hotels. the anti-graft drive is happening with the government. that's impacted luxury hotels, but long-term they look fantastic for the chinese market. the economy is one of the big drivers. >> a lot of the big westin hotels don't own properties, they are just a brand and a management contract. is that the way you're going, sort of boutique or big, is that the model that still works? >> yeah, i don't think it's actually -- >> a local property there. >> there's a huge advantage to the asset approach there. you can expand much quicker, you don't have to use your own balance sheet and rollout through management contract and franchise, and crucially you can mitigate risks because there's a significant political risk in those sort of markets.

and that's the route that the big global operators are all choosing to expand. >> and this rise of a boutique, all the big changes have their own boutique. i'm not sure of a big chain owning a boutique chain means it is a boutique chain. >> i wouldn't go into what's a boutique, people aren't even sure what a hotel is because there are so many ideas of what constitutes a hotel. essentially a boutique is about, is it quality of service or being a little more tailor-made and more personal. and you can attempt to deliver that within a big box with several hundred bedrooms. but typically most punters with guests out there, they are looking for 50 rooms, something more cozy. that's the idea of a boutique. >> and i suppose a restaurant and a hotel, is that what nobu is? >> that's a very high-end, scary end for most investors, that high fashion element, because easy come, easy go.

and so the real money, if you like, in terms of where their funds are tend to be in the big market and the economy hotels. >> switch that over to london for just a second, because we understand london is generating huge sways of money from investors around the globe because it's a place to mark money. so london property is safe, particularly in this emerging market sell-off. does that also apply to investors owning hotels? we talked about management structure, but on the commercial basis, our foreign investors are saying we have to park something. why not make it a hotel? >> it's one of the scary things of investing in the hotel luxury marketplace. crucially it's having a safe place to park the money. in the arab spring, we saw a lot of cash out of the middle east, not just impacting tunisia or egypt but the gulf states as well. people were jittery and wanted to be secure.

if you buy a big lump of real estate in paris or london, you know it's going to be there. whereas perhaps if you had a home, there's a risk you may lose it. >> a core interest is looking to challenge, though, the idea that you shouldn't own property, the hotel company shouldn't own the property. what are they doing? >> well, this is a fascinating story. it's one of those things where don't do as i say, do as i do. if you look at the new ceo there, when he comes in after eight years on the board having pushed the board to sell-off their real estate, he gets there three to four months in and announces a new strategy. guess what? we'll hang on to our real estate and drive it forward. i think it's a smart move. >> why? >> what he's done is created two entities within, accor, and he's looking to drive the business forward by keeping the two together. >> all the hotels they own,

accor, do they own properties or other bands? >> no, they are just accor brands, but they have to stand up on their own two feet in terms of the investment proposition. but it's quite different from if you are a marriott or intercontinental, you haven't got that property opening entity to push your expansion forward. >> for all the guys that have property, they have been flogging it and getting a little bit of a cash dividend, which is going to stop, right? >> absolutely. if you look at intercontinental, those sort of investors, you have to move on somewhere else. >> which hotel to visit this year? if you have one to go to, not for business, just for -- >> i'm looking forward to the morgans, which is in the old containers building. >> here in london? >> yeah. >> andrew, good to see you. thank you. he's the editor at hotel analyst. now, foxcon made in the u.s.,

that could be a possibility. the chairman says the electronics assembly giant could set up a u.s. plant to make large display screens. the move may help save on lodgist call costs of shipping from asia. they also say the taiwanese-based firm wants to double its revenue to around $330 billion. staying with the u.s. tech giant, google and samsung have announced a deal to cover patents currently owned by the firms as well as those in the next ten years. this will lead to deeper collaboration on research and development. south korea's samsung uses google's android software on the smartphones. and as tech companies place a greater emphasis on artificial intelligence, google's buying out deep mind today, we want to hear from you. what daily job would you hand over to a computer or a robot? one tweeted saying the federal

reserve and the presidency so we don't have to listen to them. that's one idea. would you really want to trust a computer, though? join the conversation at worldwide exchange and get in touch with us. e-mail us, worldwide@cnbc.com. tweet us @rosswestgate. let us know. do you want computers to run the world or not? or in some minor capacity. we'll take a short break. still to come, fed, if it's not the word every week, it certainly is this week as investors countdown to wednesday's decision. will they pull the trigger on more tapering? we'll talk about that in the second hour of the program coming right up.

you're watching "worldwide exchange." . u.s. stocks close out the week with sharp losses as investors embrace this week on the latest fed decision. at&t hangs up on vodafone for now. they deny rumors of a takeover sending shares to the bottom of the london market. but google does snap up the u.k. artificial intelligence deep mind for a reported $400 million. which will make it europe's biggest acquisition to date. and the fed might be the word of the week.

the u.s. investors also have a slew of earnings to digest beginning today with heavyweights like caterpillar and apple. >> you're watching "worldwide exchange" bringing you business news from around the globe. >> and very good morning to the start of a new trading week here on cnbc. particularly if you just joined us stateside, the best end to the week for equity investors with the dow down 3.5%. most of the losses coming on friday. 2% losses accord the board right now. right now the dow is above fair value to the tune of 15 points. the nasdaq at the moment is around 5 points above fair value. and the s&p 500 is just under three points above fair value. european equities in the red. slim losses for the cac and dax. the ftse 100 is off 1%.

tracked low today by vodafone. they sold out from verizon and many people thought at&t would take it over after months of speculation. ericsson is up 3.4% after they reached a deal with samsung over patent disputes. they should boost fourth quarter sales by three crowns. and the cfo of the german company merck has left the company to rejoin its rival. and lanxess outgoing chief is being replaced in mid-may. time for the bond markets, the yield is high during the session. the treasury is 2.74% after we hit a yield of 2.706. the lowest since november the 26th. and on the currency markets, the dollar has been weaker across the board. over the last 48 hours, the

euro/similar below 1.37. we hit 1.40 on friday. dollar/general down to 101.37. that was the low, just back up to 102.58. aussie dollar is down and cable we are at 1.65, the two-and-a-half year high. that's where we stand right now in european trading. quite a bit of red in asia on the first day of trade this week. li sixuan is here out of singapore. li? >> reporter: emerging assets came under pressure and selling assets intense fit. they ended lower by 2.6% and the sas is down by 1.8%. the nikkei dipped to a two-month low ending lower by 2.5%.

and the hang seng ended lower by 2%. profit taking hit recent outperformers and growth stocks also continued to lose ground after a profit warning was posted. but over in china the crash crunch fears still linger. the markets were doing relevantly okay compared to the rest of the region. the shang composite lost 1% and do note that demand for new ipos remain strong. trading all eight stocks debuting on the shenzhen today was suspended after they hit upper limits on the first day boost. and they have nine more set to come online tomorrow. we are watching on that front. in corporate news, we are watching foxconn. the apple supplier sees revenue growing to $10 trillion over the next decades while it's also considering expanding manufacturing to the u.s. in hopes of garnering more business from apple. it's also focusing on indonesia this year to design and market phones with blackberry, but the group's shares join the sell-off

in the region ending the session in the red. back to you, ross. >> thank you for that, li sirks, li sixuan. a pretty big day for earnings. caterpillar are reporting today and apple and u.s. steel report after the closing bell this afternoon. at the same time, investors are already looking ahead to wednesday. that's when the fed wraps up its two-day meeting amid speculation we should get further tapering of its quantityive easing program. and now joining us, you have made your way back from dallas, department break anything? >> no, i didn't. they already called last orders, and the world is starting to recognize what that means. whether it is 85, 75, 75 to 65,

65 to 55, potentially rates are going up next year. what we're seeing is the financial process where people are realizing that you don't have the flush of liquidity to paper over all the problems of the world. whether it is turkey's budget deficit or venezuela's myriad problems or argentina's not very credible economic statistics. all these things are happening so investors have to make choices. and i think -- >> the rate is going up, right? and when the rate goes up, you have to reprice everything. >> right. and that's going to apply to companies, markets, economies, it will apply to governments, so this is why you see people saying, last week, mexico department do so badly, right? columbia, another good example, yet brazil, the rial plunged, and so did the peso. why? people are having to be

concerned. >> people are using much more discretionary wondering whether it is a country stock or a bond. >> money is not free anymore. i mean, it's still kind of free, but not free in the way it was. not as free as it was, so therefore you have to start making these difficult decisions. >> if we kept too much volatility as a result, is there a chance the fed come march might think, hang on, we could have a big sell-off, but then they would have a cause to taper. >> i put that as a low probability. it would go up if we had an actual systemic crisis. something so severe where it was not just an emerging market having a little bit of a bad year. something where it really looked like the financial system was threatened. and i just don't see that happening. i don't see that happening. so, i could be wrong, but the fed has got to hold the line and say it's last order the way it really is, unless the u.s. economy freaks out or something, which doesn't seem likely.

>> do you think steady meeting? you don't see it speeding up? >> i think so. if they don't do that, it suggests a weakness. like the bartender opened the door for another hour. >> you can't lock it. >> no. >> if we had the lock, is that what we have had? we have the locket? >> no, we are closed. >> the thing is, when you pay the bill, do you come back in the morning to pay the bill? >> yeah, and it hurts a lot in the morning after you pay the bill after a long night, or so i've heard. >> that's the way it works. and so we look at this dislocation of the moment and volatility as well, you have just come back from dallas, it is always slightly rare. >> i hate to say i'm not far off from the davos consensus as it were, most people think the markets, particularly the u.s. market is priced for absolute

perfection, but we have had systemic problems like a euro breakup doesn't seem to be on the table. hard landing in china doesn't seem to be on the cards. >> if you've been expecting chinese growth at 7.5% to 8% and it comes in 6.5% to 7%, is it a difference? >> it's not a hard landing but it's a crummy landing. >> it is something that has to be priced. >> right. that's what's happening, we are repricing markets around these things but we are not expecting this great big problem, whether it's the euro breakup, china hard landing or the u.s. double-dip recession. >> interesting, at the beginning of the year everyone hated bonds, but what's happened? >> they go to treasuries because they are a safe harbor. >> stick around. more to come from you. don't forget, is the fed really to blame for the emerging market sell-off? head to our website for more, cnbc.com and follow us on twitter @cnbcworld.

google dipping into its deep pockets to buy an artificial intelligence start-up here in the u.k. we'll tell you more after the break. mine was earned in korea in 1953. afghanistan, in 2009. orbiting the moon in 1971. [ 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.

a recap of the headlines.

european equities follow asia low diving into the red ahead of this week's fed decision. google brains up artificial intelligence with the acquisition of the british start-up deep mind. and investors prepare to dig into a slew of earnings reports. first up, construction giant caterpillar. a deal of ziggo is valued at 10 billion euros. this move is seen as a big buy to expand the reach in europe. shares of vodaphone have slumped that at&t doesn't intend to make a takeover bid for the british mobile phone ending months of speculation. the stock is up 30% today. the u.k. press reports suggest that the telecom giant was looking to take a bid of around

60 billion pounds. this is after the ceo randall stevenson reportedly met with the eu telecom chief in davos. but this morning at&t said it was making its intentions pretty clear following a request from the country's takeover panel. the statement from the london stock exchange rules the u.s. company out from buying vodafone for the next six months. shares of vodafone are up 30% but today they are down 2%. there has been a deal in the u.k. google snapped up artificial intelligence company deep mind technologies making it the biggest european acquisition to date. according to tech site recode, a partner of cnbc, the deal is valued at $400 million. the british start-up was founded in london back in 2012, not that long ago. it uses general purpose learning

algorithms for ecommerce and games. google is becoming increasingly focused on artificial intelligence and machine learning. what do you make of this deal? >> this deal makes google sense. so i can't imagine -- any other company, it is really hard to fathom you would spend $500 million or $400 million, but when you step back and think about google, i mean, they are trying to move this whole idea of artificial intelligence and the algorithm, they want to apply it to more than just the internet, they want to apply it to -- there's this cliche known as the internet of things, or the internet stuff, but basically the idea of applying it to kinetic machines and products. they have bought boston dynamics in the states, to make these creepy robots out of "star wars" and they have applications for the military, but they also have other applications. they bought nest for $3.2

million, which is an extraordinary nerm. this is the maker of a thermostat that you can control via your iphone and it starts to -- it has an algorithm as well, so it learns the patterns you have for heating your home. >> dennis hasselby sorted this out, but this is a company that went out of its way to sort of find the best out of the u.k. they said come and help change the world. so google buying -- larry page led this acquisition himself, so is this aboutal incident. >> again, google sense, it makes google sense. it's about buying talent. these are two guys who basically came out of stanford and created their business. they understand that in these universities, whether it is cambridge, oxford, that you have incredible minds, incredible resources, incredible assets that can be applied to actual real business, to real problems. and so they've got these guys that now have an opportunity to

syphon out incredible talent. and put them to work on whatever it is google's going to do with all this stuff. >> they had to make a race to beat out facebook, apparently. who knows if that's true. >> if you were these guys, this seems so much more -- they seem so much more google-like. but the reason facebook -- that makes sense, facebook is doing it because they want talent. so google also gets talent and can thread in some way this -- what these guys are doing with the other things they have been doing in the states. >> a deal that hadn't happened is at&t and vodafone, were you there, was at&t talking about this? >> i was not in the room. >> that's a shame. >> i have not bugged the nsa. but that is a a deal that i know we have been talking about ever since the verizon/vodafone deal was finally announced, but i don't see the strategic logic for at&t owning a huge european

telecom company. it doesn't make sense to me. the fact that for the next six months or so suggest to me they don't know how it makes sense either. >> no. maybe just inquiring about it as well. do you think we got more -- what we are seeing at the top of the market -- >> i think everyone gets out at the beginning of the year and the investor bankers come out to say it will be a great year for m&a, but it has been flat the past few years. i think it will be higher. there's a lot of folks out there with big -- look at the stock prices on these potential inquirers, they are strong. the equity markets are robust despite the latest hiccup. they will tried to do things to justify these prices. and the only way to do that is m&a. >> good to see you, rob cox. tech companies like google place

a great emphasis on artificial intelligence, and we want to hear from you. what daily job would you hand over to a computer? let us know the conversation, worldwide exchange. e-mail us or tweet me. if you could hand over any task to a computer or robot to be done -- >> well, thankfully you can't hand off financial commentary, so i still have a job. scheduling. just scheduling. if i could say, call this person and set up a meeting, that would be great. >> how would it know you wanted to call that person? >> it would have to be voice activated, i would think. does that sound reasonable? >> you just say, leave a message, call this person. >> then it calls that person and they work it out. >> it's probably better than sending 15 e-mails trying to confirm. >> and having two assistants doing it all, that kind of stuff. >> the day of the assistant. >> the assistant becomes more value added. >> i like that.

that's rob's view, scheduling. let us know, send in your answers as well. still to come, the story goes that the cambridge sachele company started with just a 600 pound budget, about $1,000. a few years later they are at 21 million pounds of funding. the retro bag maker is now setting its sights on china. more on that story right after this. i need proof of insurance. that's my geico digital insurance id card - gots all my pertinents on it and such. works for me. turn to the camera. ah, actually i think my eyes might ha... next! digital insurance id cards. just a tap away on the geico app. could save you fifteen percent or more on car insurance. everybody knows that. well, did you know that when a tree falls in the forest and no one's around, it does make a sound? ohhh...ugh. geico. little help here.

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a british company which started in the kitchen with a budget of 600 pounds, a thousand bucks, is now basking in the multi million cash injection. they received the backing from index ventures. the co-founder of the satchel company is here. big news. >> huge news. >> you have brought in an outside investor. >> i have. >> do you feel like you have given things up and handed the reigns over? >> no. i'm too much of a control freak of my third child, this company, to do that. and it wasn't done quickly. i've been speaking to index now for two years, so -- >> why then?

why now? >> i think that we've done very well to get to 13, 14 million pound turnover, when it is just me, my mom and three in the management team. to take it to 100 million, i think we are probably going to need more. so i wanted somebody that i felt knew how to grow a company quickly. and index has a fantastic track record. >> yeah, who are some of their other investments? >> they backed asus, the notebooks, netporter, nasty girl in the states, skype. so on the digital front, i don't think there's anyone in the country that can touch it. >> perfect. are they going to help take you into china? is that part of the strategy? >> well, going into china in december with the prime minister in that delegation was so helpful. and i feel like i met enough people that i've got a strategy that i feel that will work, but the money from index will certainly help us.

>> you've got to be careful, haven't you, because it is -- you have taken in a cash inject, how much have you taken in? >> $21 million. >> that's based on you will achieve a certain amount of growth, right? >> they are hoping, yes. and i'm hoping. >> but you've got to -- there's always a risk at this point, isn't there, with any firm that actually what happens is, you don't hit the numbers, you change the things that made you successful to achieve new growth targets. >> i think that's why it took two years to find the partner that i felt really understood. we are a bit of a quirky brand, but it's our personality and heart that keeps us so loyal. and i need to take that into other markets and keep it tight. >> keep focusing on the product. >> right. the product, the product, the product. >> will you develop other products? are you -- >> well, we have been -- we worked on a handbag and then

some small leather goods, and that's been going really well, but it is important to keep the signature of the brand, the satchel, and keep that really clean. >> okay. good to see you. thank you very much. does the strength of the pound impact you or not if you go for the export market? >> we are fine at the moment. we are mainly in u.k. at the moment. >> good to see you. judy from the cambridge satchel company. here in europe, take a look at the heat map. you can see we are now not far off the session low around 8 to 1 decliners outpacing decliners. as far as individual equities are concerned, vodafone is dragging down the ftse down 1.25%. u.s. futures earlier were trading above fair value. they have turned around slightly. the dow is now below fair value by ten points. the nasdaq's on fair value. the s&p is also on fair value as

well. the dow down 3.5% last week. a lot of the falls were on friday with 2% falls. the ten-year treasury yields, we were as low as 2.760 on the ten-year. the lowest since november 26th. and on the currency markets, the dollar has been a little bit weaker across the board. euro/similar 1.3680. we'll take a short break. still to come, another big earnings week stateside, but find out why the fed is also the word on most traders minds. we'll be back.

you're watching "worldwide exchange." the headlines from around the globe, europe equities follow asia's fall into the red. they close with sharp losses as investors brace the fed decision this week. at&t hangs up on vodafone. they deny rumors of a takeover sending the shares to the bottom of the u.k. market. google does snap up a british company, artificial intelligence snapped up deepmind for a reported $400 million, making it the firm's biggest european acquisition to date.

and as we say, the fed might be the word of the week. u.s. investors also have a slew of earnings to digest today with heavyweights caterpillar and apple. >> you're watching "worldwide exchange" bringing you business news from around the globe. >> very good morning to you if you are just tuning in, not the best end to the week last week. not a great week for u.s. investors, well, for global investors, the dow down 3 president 5%. the s&p down 2.3%. second straight week of declines for that. and the biggest weekly decline since june 2012. down right now is another 16 points below fair value. the nasdaq is on fair value. and the s&p is a point above fair value. we may get a small bounce later on. european equities down 1.4% for the ftse 100.

vodafone is contributing to the bigger fall in germany and france, which are up .40%. the ftse is down .10%. the stock of vodafone is down 5.37% after at&t denies the rumor of a takeover bid. and ericsson says their fourth quarter sales should be near 4 sweetish crowns. and merck down 10.3%. lanxiss is up 8.4%. that's where we stand right now in europe. what are investors doing at the beginning of the new week? here's a thought of some of the guests we've already had on cnbc. >> one of the things when you

get a risk of movers is when investors are holding big positions, there's room for it to be squeezed out. we have seen that already in the likes of euro dollar. we could start to see the continuation this week in terms of cable. so sterling is a currency where investors are buying into the long sterling story. this market turmoil does increase. >> if you look at emerging markets increasingly selective, there's a house of markets over emerging markets, but there's some emerging markets that will benefit from the companies, look at taiwan. there are good examples of where they expect good returns from these markets. >> we like higher electronics, which is listed in hong kong, the subsidiary of hyatt that

makes the washing machines they sell out in the west. they have a fabulous distribution model, 30 points to the sale. they have several cities in china. >> some thoughts we have already had today. joining us is piers this morning, you made a bet on u.s. bonds. not clearly consensus. >> indeed. it's been a bit -- the end of last week was carnage, and we had the biggest sell-off in stocks for over six months. i think what's happened is we have kind of hit this year and just have fallen over the first few hurdles that have been put in the way. so we've had a number of factors coming together. so bad payrolls number, earnings season so far has been pretty tepid. when the s&p is trading over 1800, you need earnings that are

strong. just fine doesn't cut it. then we've had some bad manufacturing numbers from chi in. so this kind of just brings in that china concern again. and obviously the argentinian move triggered what was already kind of nervous in the entire space anyway, so you've had pretty heavy downsides for the emerging market currencies. all these factors have just come together. >> at a time when the markets were at all-time highs. >> right, exactly. if you think about the subpoena, the last time the s&p had a proper correction, 10% correction, was may 2012. so it's kind of overdue. >> we are long in the -- is it now? >> a 10% correction will take us down to the 1660s area. do we get there? i think so. i think it's possible. i think what we'll need is continued weak earnings into the end of the earning season.

what will definitely get us down there would be perhaps another bad payrolls number next week, but if you think about what happened last year to drive the upside was qe plus good news. >> yep. >> now, here we are all of a sudden with the exact opposite. we've got tapering and bad news. and i don't think this bad news is bad enough to prevent the fed from continuing to taper. so on wednesday we've got the big fed meeting and they will say another $10 billion. so investors are kind of struggling with this dynamic of tapering and now all of a sudden bad news. >> what happens when you get to march? >> right. so i think you need to be very defensively positioned for the first quarter one, if not take money off the table and just -- do you look to commit this capital into safehaven, like government debt or maybe gold, i quite like gold still. >> well, two-month highs this

morning. >> yeah. do you position in it or keep yourself liquid ready to go in again once the correction has happened? i think the best trade of the year will still be equities off a dip. and that dip is happening. the dip is -- >> it builds a pattern is what you're saying. >> yes. i'm bearish now, certainly, q1 unless things change dramatically, but i'm bearish for q1 and you can pick up decent bottoms in a couple months' time. >> sounds good. as far as the dollar, it is kind of interesting, because we would expect in a risk phase for the dollar to be weaker against the yen and up against everything else, but that's not the case. the dollar is weaker against the euro. i kind of understand sterling is a separate story. >> the euro-dollar trade is one of the hardest trades of this year. and in many respects, one of the hardest trades over the last few

months because it is just macro fundamentals to suggest the u.s. is in a much stronger place than the eurozone, and therefore you should get dollar strength, right? and if you look at monetary policy, the fed and the ecb are looking at additional monetary policy. but the problem that the ecb has is they don't have control over eurozone policy, in that what's really happening is we're getting tightening in the eurozone because banks are paying back the atro. this is critical in the money market because short-terms are elevated and that means the currency is staying buoyant. but it's the banks that are really controlling that liquidity situation, not the ecb. so while the ecb are more dubbish than the fed is actually policy because of the banking activity. >> okay. explain why the euro is resilient.

it doesn't explain why this a safehaven trade. >> i don't think it is safehaven, i think it's a unique situation in the short-term -- >> friday was a classic mode for the last five years we would have seen the dollar up against the yen. that hasn't happened. >> it was not a straightforward session on friday. to start with, you've got dollar weakness, so the euro will rally. by the close, we were back to actually just down on the day. and back below 137. it was absolutely not euro strengthening against the dollar. yes, for parts of the day but not all of it. so that's what i mean by that being a hard trade. i think it is hard to call where it goes for the next month or so. >> i know what happens. we say in the ranges we have been for the last year. >> and when it's the hardest trade, don't trade it. that's my advice. >> that is very good advice. that is very good advice.

just becaused the liquid doesn't mean you get it right. i like that. always a pleasure, piers. some of the other stories we are looking at today, more big retailer layoffs. this time sam's club is laying off 2% of its workforce around 2,300 workers. and royal caribbean cruises is reporting earnings today after 281 passengers have fallen ill on board one of its ships the cdc reports. it is unclear what is causing the illness. the explore of the sea ship is docked in st. thomas. we'll have more at 11:40 eastern today with more on that. and still to come, we'll preview today's biggest earnings story caterpillar. what will the construction company say about the growth in 2014? we'll try to assess it. mine was earned in korea in 1953.

afghanistan, in 2009. orbiting the moon in 1971. [ 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.

a recap of the headlines. european equities follow u.s. and asia lows diving into red ahead of this week's fed decision. google gets smart in artificial intelligence with an

acquisition of google's deepmind. and we hear earnings from construction giant caterpillar. yep, it's a big week for corporate earnings once again stateside. bertha coombs has more from cnbc hq in the u.s. good morning, bertha. >> good morning, ross. we are expecting to hear from a quarter of the s&p 500 this week. and one of the big ones on tap this morning, caterpillar, the heavy equipment maker seen as a global bellweather. results due out before the opening bell. the big focus in this report since many look at caterpillar for independent growth when it comes to china. and last week we saw disappointing data out of china. the largest producer of mining equipment as you may well know. analysts are looking for $1.28 per share. on the top line, revenue is expected to come in at 13.6 billion dollars for the fourth quarter down 15% from a year

ago. that's the consensus, but analysts over at morgan stanley are much more bearish. they are actually forecasting a 50% drop in revenue for the quarter compared to the same quarter a year ago. the analysts at morgan stanley cite cat's resource sector as the low global demand for money equipment as a big concern. last week cat's worldwide retailer sales were down 9% last month. we'll see how that factors in to the overall results. between that and cat's share price, investors are hoping the company will announce some significant restructuring plans today. shares are down more than 10% over the past year. seriously trailing the s&p 500. jpmorgan analysts say any indication that caterpillar is becoming a self-help story could drive upside to the stock from its current levels. folks always want to see they are ready to turn things around.

as for other big earnings today, royal caribbean cruises also reports before the bell. apple and u.s. steel after the close. and later in the week, we'll hear from boeing, facebook, exxon mobile and google. and we're certainly going to want to hear from royal caribbean about yet another incident on cruise ships. seems kind of scary that you go on a cruise and could come back with some pretty distasteful experiences. >> 280 passengers now ill. they are in st. thomas in the u.s. virgin islands, 280 now ill. >> the norovirus -- >> when the virus gets on a boat, it just seems to go. >> it's got a captive audience, so it can spread quickly. that concerns me slightly. bertha, stay there, you have another question for you. because google snapped up a british artificial company called deepmind technologies, it's a deal valued around $400 million. now, according to tech site reco, a partner of cnn, this is

a british start-up founded in london in 2012 which uses general purpose learning algorithms for simulations, ecommerce and games. and as tech companies therefore are placing great emphasis on artificial intelligence, we are asking what daily job would you hand over to a computer or indeed a robot? bertha, what would you have a computer replace for a daily task? >> i don't know. i don't know about that one. i guess it would be sort of scheduling e-mails. >> that's exactly -- were you listening to breaking view's rob cox earlier? >> no, i wasn't. >> that's exactly what he said. >> yeah, that's really the thing i find sometimes just keeping a hold of everything and remembering everything, remembering to input it into my phone or my calendar. >> he said to set up meetings, he would say to his voice activated, i want a meeting with

bertha and then everything would just be worked out instead of -- >> and maybe it could go to the meeting for you. >> that would be handy. >> i always find meetings go on far too long. >> i would get the computer to answer the questions i keep asking in this session. that might be helpful. >> this intelligent computer learning system is really, that's sort of the next wave. that's what watson is all about, ibm is really pushing that, and all sorts of spheres. now when your computer can actually learn, although everybody says that we're not going to get to the point where you get hell 9000 where your computer says, sorry, ross, can't do that. >> i don't want watson, i want holmes. i don't want the watsons, he's the sidekick, i want holmes. thank you, bertha, talk to you later. if you have thoughts, e-mail us at worldwide@cnbc.com. we'll take a short break. still to come, a closer look at the global smartphone market.

a preview of apple coming right up.

as far as the agenda stateside, on the economic front we get a report on new home sales for december. a big day of earnings, caterpillar and royal caribbean report before the bell. and apple will report after the closing bell. we'll pay close attention to find out if the current share price is justified. the stock sold by more than 20% in the last six months. and lists are still pretty bullish with the consensus price target of $607. joining us with his thoughts, lawrence lundy. thank you for joining us. in terms of sales like ipads and

iphones l this stack up, do you think? >> i think this will be the best quarter apple has had. i think we'll probably see around 55 million iphones and 25 million ipad. >> and the average selling prices? >> it would depend on each line. i think with the iphone the real thing to see is the mix between c's and s's. across the ipad, we are seeing pent up demand for the ipad because of the different release schedule. so it could be different. >> we'll have to see what the total effect is on the margins. >> and it is definitely seeing the proportion between the ipad and the iphones. they have lower operating margins than iphones. >> that would be interesting. this comes after they finally made the announcement to china mobile. so is that exciting or is there risks? >> we won't see any of those,

but we'll see china telecom. that's why the sales have been boosted. the china mobile deal is of course fantastically important. and there's 1.2 billion mobiles in china, the market is huge, but it's worth looking at the china market a little bit more detailed in regards to the smartphone market will be around 400 million units next year. now, it sounds like a lot. >> but that was down a fifth or sixth in terms of the share market. >> the competition for the high-end market is greater than any other market. we see shaoming, in china that's one of the most popular brands. and samsung, lenovo, a lot more companies are really driving and tapping into apple's marketshare. also in china, the top 10% of the market where apple's aiming

is over 300 u.n. but actually, apple sales, the lowest price was 500. so some of the phones just as good are half that price. apple will struggle to maintain the margins in the market. >> in the west, if you are into an ios operating system, you kind of stay -- it's a pain to take a phone out and have your computer and everything else different. isn't it? >> yes. that's the key for apple going forward, to try to get the ecosystem locked in. and that's essentially how they sell their phones and products. they really want ios to be the operating system for your life. and i think that's where we go. >> is that going to help them -- all hardware eventually gets commercialized, it looks great and is designed well. >> this is the real difficulty. we are talking really long term stocks in the next year or two. the internet in terms of everything be connected and on the network, we have a real problem here because google

wants everything to be connected. google is the internet, essentially. for apple that's not the case. apple still sells products for a profit. that's going to come increasingly difficult if the more products are sold to the network. what will apple sell for the profit across the board? it's difficult. they will have to find a new product category and where is the next big product category of selling the device for $600 at 37% operating margin in a billion dollar market. it's difficult to find. >> yeah. because they invented these markets. >> they found a market fit for these things and were the first to bring them to market. we may see that as we watch the tv, although arguably i don't think that's the case for tv, but the question is, what is worth apple's investment? because apple maintained growth by selling 25 million units. and where is the next category? >> you can buy smart people.

i suppose that deepmind acquisition is buying smart people, isn't it? >> you can argue that was the same with nest. they bought some of the best people in silicon valley. so apple and google's structures are completely different and need a lot of analysis. >> lawrence, thank you for joining us. before we go, recap of the european equities at the moment. we are red across the board up 1.4% for ftse. the cac is very slim fall down .27%. the u.s. futures have turned down during the course of the show and have turned back up again. they can't make up their mind. the dow is now ten points above fair value after being down 3.5% last week. the nasdaq is currently three points above fair value and the s&p is above two points fair value. that's it for today's edition of "worldwide exchange." the countdown to the u.s. markets opening is next on "squawk box."

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good morning and welcome to "squawk box." u.s. futures are flat to just slightly lower after friday's sell-off. the european markets, as you would expect, are lower, but we'll set the tone today for what happens the rest of the week over there. emerging market currencies remain under pressure, all this as the fed will be the last meeting for ben bernanke as chairman. what are they going to do? i hope they don't get too scared. it is monday, january 27, 2014. "squawk box" begins right now. >> when it's one country specific, it's like credit, if it's name specific and we're at that part of the world, how is this country doing, that country

doing, but at some point it becomes kind of a macro event. when all these countries very far apart in a globe are very close together in an investor's mind. good morning and welcome back to "squawk box" here on cnbc. we are back in our headquarters. i'm andrew sorkin along with joe kernen and sarah eissen is here this morning. he talked to us about the investor tension level and our global markets story is the top story today. the heavy selling across the merging market currencies that started late last week and continued overnight. take a look at what's going on. the malaysian hit a fresh four-year low against the dollar. the philippines peso hovering close to the four-year low. and the indonesian rupiah hit a