hello. you're watching "worldwide exchange." i'm ross westgate. the headlines today from around the world, turkey sparks a global rally, surprising investors with a global rate hike leaving equities here in europe. deutsche bank's ceo is due to step into the limelight at any moment to justify their immediate outlook as sunday's profit warning cast a shadow on today's figures. we'll see the change later today. a 7% fall in christmas sales force tess british fashion how mull bury to lower its earnings

forecast. that sent shares down by more than 20%. and president obama seek toes jump start his agenda pep told lawmakers he's eager to work with them, but he'll go around them to get things done. and america does not stand still and neither do i. wherever and whenever, i can take steps to expand opportunities for more american families, that's what i'm going to do. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. >> all right. warm welcome to today's show. we're going to kick off with a look at deutsche bank. we're waiting for a press conference of the co-ceos of this morning. we're seeing general european shares a little bit firmer on the back of what happened in turkey overnight.

deutsche bank preparing to hold the press conference, of course, after that rather short profit warning when they brought forward earnings ten days early because, of course, they've seen big declines, a lot of one off and declines at fixed income trading in particular. we're going to get the breakdown for the press conference right now, as well, from -- who are in frankfurt. so we'll listen into that in just a few moments. that will be getting underway. don't forget, of course, we'll be speak to go ashley jane a little bit later and bring you an interview at 13:30 cet is the time that that will start. as far as markets are concerned ahead of that, this is where we currently stand at the moment. european equity res much firmer. the ftse 100 is up from 20 points from yesterday.

there's around about 30 stocks in negative territory. we're well over 9/1 advancers outpacing decliners. the xetra dax is up 1%. the cac 40 up 1%. the ftse mib is, as well. we saw treasury yields at 2.106%. we're now back up to 2.78%. the fed will conclude its meeting. it's widely expected they'll continue tapering at around 10 billion a month. and on the currency markets, dollar has rebounded against the yen. we're back up to 103.15 after hitting that seven-week low of 101.77 earlier in the week. sterling not far away from its 2 1/2 year high that we hit at the end of last week. and euro/dollar steady at 1.36 at the moment. as we watch that deutsche bank press conference, resources are having the best of it this morning and indeed they are. up 2%. there are no sectors at the

moment that are in negative territory. technology, telecoms, banks all doing fairley well. the weakest are industrials and oil and gas, they're up 0.5%. we'll get to sixuan in just a few moments. it's full speed ahead for sub-saharan economies in africa. let's find out why economies are lagging behind the emerging market race. ukraine's president accepts his prime minister's resignation, but the pressure is still on as moscow plans to review its bailout bill. we'll get a wrap up of the latest in around 30 minutes time. and ahead of china's lunar new year celebration, find out who plans to benefit. eunice yoon has the story from

beijing. plus, all eyes are on the federal reserve later this morning. find out what it could mean live from new york at 11:30 cet. on plus, as we've heard, president obama is vowing to push on with economic reforms that congress has failed to support, including a higher minimum wage. we'll have analysis from washington with the economist greg ip. that's coming up in the second hour of the program today. meanwhile, we'll wait for that press conference with deutsche bank. we'll have it right after this.

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hanes bury's ceo justin king has decided to step down this year in july. he will be going. the group director with skreed here as ceo. he's going to step down on the 9th of july, 2014. investors don't like it an awful lot. initially, we gapped down around 5% on that news. so the sainsbury ceo justin king stepping down the 9th of july. we've been listening to deutsche

bank press conference this morning. they say 2014 will be a further challenge as they reaffirm the 2015 target as they had done when they brought their numbers up. they will take steps towards a leverage reduction target around 500 billion euros. deutsche says they expect further costs from settles major outstanding litigation matters, but they are well positioned to lead the european sector consolidation after 2015. joining us with his thoughts, from keppler, dirk. everything we've heard over the last week or so, how do you think they're managing it? how will do you think they're doing, the co-ceos? >> clearly, when they presented the financial target 2015 we got hoping it would go quicker and the burden would not be quite as bad as it now turns out to be. i think there are probably many

think it already considering the amount of work they have to do. so i'm probably pretty happy. as long as they now make 2014 the last fed year and get better results in 2015, that's the way to duck them, i guess. >> do you think they are going to be able to do that? >> i don't think they will fully reach that target. after all, they want to get net roe for the group. i think that is fairley ambitious and i can't see them doing that. but what i firmly believe is that they can make the bank much better, they can earn between 4 and 5 euros per share and this would be the cause for much higher share prices. >> it's very difficult toupd banks when they release so many numbers, you know. deutsche is a very complex business. should we be concerned about we had the pretaxes of on 26 million, 11.3 billion in adjusted profits for the core business? which numbers are we supposed to

be focusing on? >> yeah. i think we should leave 2013 behind and not try to overanalyze this. the number i was most focus on was this 8.6 billion which they claim is the operating underlie pretax profit for the core bank. because this is what will be left once all the legacy items are behind us. and if you calculate this on a net basis per share, this would be around six euros. and i think the more we progress towards 2015 and beyond, the more we see the results getting cleaner and the results per share moving towards their six euros. >> yeah. i suppose we should applaud them. it costs to cut costs. we've learned that, haven't we? >> yeah. cutting costs is probably one of the big things that shareholders always wanted them to do.

the costs to achieve and impairments and intangibles and what have you. i think on an underlying basis, they are probably doing okay. can they really cut 4.5 billion costs compared with 2004? i'm not sure. but certainly, they are doing the right thing. >> thanks for that. good to see you, dirk. and doimt don't forget the deutsche bank ceo will be speaking to cnbc as soon as the press conference includeds in frankfurt. turkey's central bank has built a series of lending rates. the lira rates were lifted sharply higher. michelle has moved over to istanbul to join us for more. michelle, good to see you.

raised effectively the corridor. what does that mean in terms of effective policy tightening on the interbank rate and i wonder how this government are feeling about it? >> well, basically, all interest rates went up, right? the policy regime here is what you would call unorthodox and within central bank terminology, that's the kwif lend of saying, you know, your mother wears army boots. it's a confusing monetary policy scheme that they have here. they set four different interest rates. bottom line, ross, all of the borrowing and lending rates went up sharply, anywhere from 400 basis points to more than 500 basis points. as you say, the stem the decline in the currency to try to keep foreign capital in the country. offer them a more attractive investment based on what is perceived to be higher risks. the prime minister before he left for ran says he was against the rate hike. but now we've just seen with an exclusive on cnbc in turkey the finance minister getting on the

air saying that this was good for the economy, they don't think this was necessarily going to hurt growth, but that it was important that the central bank was independent, that it stabilized the currency and that would be good for the economy. we've spoken with several business owners this morning who said to us they import a lot, they export a lot. we don't care if it's higher or lower, be just need it to be stable. making purchasing decisions has been incredibly difficult because of the decline in the lira. >> michelle, thanks for that. joining us in the studio, jesse sherman. good to see you. >> thank you very much, ross. >> are you surprised that the decisiveness? just what investors wanted, right? stop messing around, do something concisive? >> yes, i would agree that it was unexpected. we clearly saw overnight the currency tightening by the 4%. i think it's softening a little bit right now. but there's been a clear signal. i think as michelle just said,

the central bank has had a very unorthodox policy. and this is bringing it much more into an orthodox system. that definitely underpins the market. and so what we expect is short-term there's going to be a bit of a relief rally because valuations have become so discounted. but the other question here is with rates going up so high, what you are doing is on one hand controlling inflation, but the other side of it is growth is going to be impacted. when we entered the year, the expectation was about 4% growth noup we're probably looking at 2%, the.5%. >> they still have a large current account deficit, an external debt burden limited to foerp exchange reserve coverage. what does the government have to do to back up what the central bank has done? >> well, i think what has been happening for the last two months, you've seen this in the currency and the markets, there has been a crisis of confidence.

this is the first signal that the cet does have independence and it gives us a signal of institutions in turkey have independence. but clearly when you're looking at the market, you have to look at it in the medium term. there's a lot of volatility in the market. what we need to do is we are in an election cycle. march is going to be a very important time period. our expectation is despite the near term kind of support, they're still going -- >> it is interesting, we got this action just hours before they announced it. so that's pleasing? because if you want to know that the institutions can stand up and be counted, that's one way of doing it. >> some people would argue that maybe the -- >> he said it on purpose. >> yes. it was staged to give them

credibility. that being said, it is a true signal and it is a big shift in policy. you know, this cbt has actually been in this very unorthodox policy for a very long time. and even last week we saw a small move in the corridor. they were clearly small steps, not enough to stem the tide. i think this will start a signal. >> we hit the 239 was the record low on the lira against the dollar. we hit, what, 218. the important thing is how this announcement has rippled out. why do you think that is? >> i think there's been a crisis of currencies, and this has been one of the leading lights, especially in the context where

countries with large current account deficits with funding shortfalls, this has been the leading light. so to see this come through and to see such a strong policy move by a central bank, you know, i think sends a signal that we might start to see that ner on countries. >> we will wait to see what happens with this. thanks so much. justin king, the ceo of sainsbury, is stepping down. he is going to be replaced by mike coop, currently the commercial director.

sixuan has the latest on asian markets for us today. >> thank you, ross. gold markets responded to the turkish central bank's massive rate hikes, lifting asian bourses up, as well. the nikkei 225 snapped a four-day losing streak posting its biggest daily jump since october. in china, the shanghai composite gained 0.5% today. and the hang seng index in hong kong rebounded nearly 1% from its five-month lows. but a luke warm for hong kong electric's ipo ending down by 2%, despite shares being priced athe lower end of this range. australia gained 1% after bargain hunting.

shares of advantest fell 4.4% after the company slashed its guidance. an lenovo revealed the plan to buy ibm, this chinese business giant has decided to restructure its operations. creating an enterprise product and one for software and cloud services division been shares jumped almost 5% nearing a 14-year high. mulberry, heavy discounting have led to a deteriorating environment. now, antofagasta reported a

surprise jump in full year copper production, which includes a 4.3% jump in the fourth quarter. the firm confirmed the record performance of banks with strong shoers across its operations. novart novartis, up 0.6%. it expects competition for its blood pressure pill diavan to kick in in the second quarter. reporting a 2% jump in sales in the fourth. he said the firm would not change its emerging market strategy, despite currently fluctuati fluctuations. >> there are definite currency headwinds. and you can see from our fourth quarter results in terms of the constant currency relates versus the actual reported u.s. dollar results that we did take a currency hit. but at the same time, we have to think about this in the

long-term. we're in the business of discovering and developing new and innovative medicines and helping those emerging markets improve the health of their populations. so there is going to be currency fluctuation. but this is something we're going to live through. if we pull back in those markets and try to get back when currency goes the other way, it's just not going to work. we have to have a consistent strategy and continue to drive our business in those emerging markets. and in the u.s., yahoo!'s fourth quarter earnings beat forecasts. revenue fell 1.7% excludeing fees from parter ins to webb traffic. it's the fourth straight quarterly decline in revenue. display ad revenue fell more than 5%. also a concern, alibaba's revenue is slowing. ma ris is sa mayer says she'll become more involved in growing sales. she says the recent decision to oust the coo was regrettable, but had to be done. she says his position will not be filled. it's actually trying to tick

slightly higher. at&t has swung to fourth quarter profits. the firm has added more wireless subscribers and benefited from a big tax gain. but the free cash flow target fell short of estimates. the cfo says the u.s. buying scandal is hurting business, regardless of any effects it may have on oversees prospects. at&t is down 2% in the states, off around 0.6% in frankfurt. and ea is cutting its outlook as new video game sales are hurting games for older devices. ea says it's been surprised by how quickly demand has dropped for games made for the xbox 360 and play station 3. staers down 2.5% after hours. also in the united states, president obama is vowing to act

alone on measures to help u.s. economy. in his fifth state of the union address, the president stressed he'll no longer be content to wait for congressional approval after a year mostly marked by inaction on capitol hill. he's challenging lawmaker toes work together on large scale initiatives by boosting the minimum wage and increasing a new retirement savings program called myra. the president outlines several ways in which he intends to use executive power toes bypass congress altogether. >> the cold, hard fact is that even in the midst of recovery, too many americans are working more than ever just to get by. let alone to get ahead. and too many still aren't working at all. what i offer tonight is a set of concrete, practical proposals to speed up growth, strengthen the middle class and build new ladders of opportunity into the middle class. >> as president vows, income inequality wants to hear from

you. is a higher men mum wage the answer? join the conversation here. get in touch with us. worldwide@krn worldwide@cnbc.com, @cnbcwex or direct to me @rosswestgate. still to come, canan has falling camera sales in 2013 as it try toes focus on european equity markets this year. we'll cross to tokyo after the break.

>> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. the headlines from around the globe, turkey sparks a global rally, surprising investors with a huge rate hyme hike to stem its currency. basic resources are the best performance sector. deutsche bank warnings of ongoing challenges this year. this raises further litigation costs, although it has reaffirmed 2015 targets. sainsbury shares dropped, the retailers announced the surprise departure of ceo justin king after its decade at the helm. he's leaving on july 9th. president obama seeks to jump start his agenda. he told congress in the state of the union address that he would like to work with lawmakers,

bull ego around them if he has to get things done. >> america does not stand still and neither will i. so wherever and whenever, i can take steps without legislation to expand opportunity for more american families, that's what i'm going to do. european equities are bouncing up today. we did climb 211 points yesterday. about 0.6% for the german and french markets. the ftse mib up just under 1%. the bond markets, a little high. treasury yields, 2.77%. further away from that two-month low 2.706% with which we started the week. and on the currency markets, dollar/yen s has bounced off the low of 101.77. we're back to 103, just about. and euro/dollar steady at 1.3676. sterling/dollar not far away from its 2 1/2 year high, just

below 1.66. now, deutsche bank this morning has been speaking about their profits and their forecasts in the 2014 annual conference in frankfurt. theco ceo is currently speaking. they've reaffirmed their targets for 2015. they say 2014, though, is going to be a year of more challenges. and they will take steps towards leverage reduction target of 500 billion euros, as well, over the course of the year. they expect further costs in 2014 from settling the major outstanding litigation matters. but the firm says it's well positioned to leave the sector consolidation after 2015. we'll have more on that after that press conference finishes. there is also a wee bit of disappointment from nintendo earnings today. i didn't know they were scottish. the gamemaker racks up a 15

billion loss from april to december after eu console sails flopped. investors have been more interested in nintendo's new strategy outline tomorrow. the firm failed to push games like zelda and pokemon through apps. shares of the japanese bank rose 2.7% ahead of its results, pretty much in line with the broader nikkei 225. the lender steeped up in the third quarter as bond trading returns took a hit and that dents quarterly profit by some 9%. joining us for more is ed rogers, ceo and chief investment officers of rogers investment. he's on the line from tokyo. ed, good to see you. do we have this -- or good to speak to you, anyway.

we had this drop in bond trading revenue, which over-shadowed the tick up in stockholders and fee income. which is the one we need to focus on the most? >> good morning. thank you for having me on the phone. i think many other securities firms, you're going to see a drop in the bond trading activities and related revenues. i think that drop in revenues will be symptomatic. the overweighting of the bond trading unit to the equities business is going to suffer. >> okay. got that. talk about anyone tento. they need something fresh. what do they need to do? >> they desperately need a product that will sell well. they need a game that will win.

they are not really meeting anyone's expectations in this relment. the one i think very positive thing they're doing is they are going to be giving money back to shareholders through a buyback program and that's a central thing to do to help support the stock price while they figure out what the game plan is. we're all keen to see what the new business plan will look like. but it's hard to get excited about that stock, to be honest. >> also we had -- i'm not sure how you say it, but poor results out of those and komatasu, as well, which you say highlights the theme of abe-nomics. which theme do you want to highlight? >> i think komatsu is the world's second largest constructionmaker, has seen extraordinary profits in q. this is all directly related to the japan rebuilding story and the ongoing china building story. china is, in certain segments,

anyway, in nowhere near as bad shape as you might believe just by reading the newspapers. japan is going through a significant rebuilding, restructuring and that involves a physical rebuilding and restructuring after, still, recovering from frankly the 20111 earthquake we expect to see that more money will be spent in a vital area to build a better economic environment. and just a quick word about canon, what do they have to do? >> the most commonly handheld device right now is your smartphone. you're taking pictures off your phone. the independence of people having a separately handheld camera is clearly going to be

decrease going forward. so to the extent that canon's business model is revenue dependent on a separately held camera, that's not good. are they adjustments and focusing more on the tabloids, the smartphone? lenses for those type of device webs that's a great business model going forward. so it's up to canon to get that right as far as which product in that mix they're supporting and where they would potentially close down or retrench the size of certain business units, such as in the individual camera space. >> ed, good to speak to you, as always. have a good evening. meanwhile, bad loans and write-offs are taking india's biggest private bank, icici, just over $400 million in the december quarter beating expectations for a 30% gain was the lender's slowest profit pick up in four years.

shares peared back some gains on the news. joining us with more details, from mumbai, ekta. >> thanks for that. extremely dismal -- coming in from the bank this quarter and that is possibly an herb in the reversal of the bank stock in today's trading session. now for the first half of the day's trading session, they're trading higher because the numbers were pretty much in line. so we have the nii or the net interest income, on an adjust the basis was up. and we have the asset quality ratios which are maintained this quarter. restructured loans are much

higher than what they were working with. it's much higher than what the streets have anticipated. and the restructured loan pipeline around 3,000 for banks and that is exactly what destroyed the markets a little bit. and as you can see, it's in case you have an interdate day -- it's the story of how it's fallen from the day's high post the numbers down to the lowest of the day. lenovo is breaking up its business. there will be four businesses, pc, enterprise and a software and cloud division. this was announced days after a deal to buy ibm's low end

services. meanwhile, ibm is looking to keep slimming down a week after selling that business to lenovo. rico reports big blue is exploring the sales of some networking assets and may be taking as much as $1 billion. ibm has approached several companies, including dell, hp, fujitsu to gauge their interests. nbc universal has a content partnership. ibm stock in frankfurt flat. if you've got any thoughts or comments about anything we're talking about today, please send them in the address as always on the screen right there, worldwide@cnbc.com. still to come, are western multi nationals losing the battle for business in africa? we'll hear what companies need to do if they can hope to try and succeed on that confidence.

president obama is vowing to work around congress. he's challenging lawmakers to

work together on big scale initiatives such as addressing income inequality by boosting minimum wage and creating a new retirement savings program which is called myra. the president outlined several ways in which he intends to use executive power toes bypass congress altogether. the fact of the matter is, even in recovery, too many americans are working to get ahead. what i offer is a set of concrete practical proposals to speed up growth, strengthen the middle class or build new ladders of opportunity into the middle class. >> so as the president vows inequality, we want to hear from you. is a higher minimum wage the answer? the way to do it? worldwide@cnbc.com, tweet @cnbcwex or direct to me @rosswestgate.

the fomc is expected to wrap up their two-day meeting today. some economists expect that the fed to note the improved momentum of the u.s. economy in the second half of last year. but they may say the unusual cold weather across the country may cause some temporary disruption. all that, of course, will be covered on cnbc when the pretty releases its results.

moscow is reportedly planning to review a 15 billion bailout detail agreed to last year when it says it would drop a plan with ties for the eu. ian williams has been following the latest from kiev. he's filed this report. >> thecades are quiet this morning. the atmosphere on the square behind me, pretty subdued. the numbers well down on what we have seen in recent days. once again, the action will be in parliament, which will be considering constitutional amendments reducing the power of the presidency. also will be talking about amnesty for arrested protesters. this comes on the heels on the resignation of the prime minister and the scrapping of tough anti-protest laws. the question is whether that will be sfusht to end these protests, calling for the resignation of the president himself which as of now is not on offer.

their credibility among the protesters is not high. but as of this morning, all eyes will be on parliament and this city remains very tense. ian williams, cnbc news, kiev. the overnight lending rate raised by a massive 425 basis points. as a result, the lira has clawed back some of the loss it suffered over the last 30 days. 2271 is where we currently stand. we did get to 2.18 post that announcement. 2.39 was the record low that we hit in the last 24 hours. at the same time, south africa's rand is still falling against the dollar. more than 1% again today.

staying in africa, this year's world economic forum in davos saw africa retain its position as a major theme. they were key to point out both the british prime minister and images of africa's helpless are misleading. >> our resources are -- for asia to invest. we have much more freedom. the answer is in the private sector. that's where the resource res. the question is how do we channel those resources? there's more than enough money, even in africa. there's enough savings in africa. >> also in davos, one of africa's richest men claimed the continent was the only place offering investors huge returns.

>> for the last 10 to 15 years, africa's economy gdp has been growing to 557%. and, you know, i've done quite a lot in terms of macroeconomic stability. we've done quite a lot in terms of political, you know, stability. when you look at the risk, you also have to look at the other side, which is the benefit. that is nowhere and they can make, you know, 20%. that's what you get in africa. >> but amid the potential, our next guest says multi nationals are now losing the african battles for emerging market competitors. joining us is anna rosenburg. nice to see you. thanks for joining us, anna. what is going on? by how much are we losing, are western countries losing out in africa? >> well, companies in emerging markets are growing much faster than western multi nationals in

the continent right now. when we look at the figures, we see projects from emerging markets have grown by about 21% from 2007 to 2011 compared to only about 8% growth from developed markets. and they're grog faster because they're less scared of the risks and they're more flexible to adapt into the reality from the grounds because oftentimes they are simply more similar to the realities they're facing in their home markets. >> are regulations impeding things like buyback, raising concerns about how they do business and, therefore, they're losing out? >> yes. markets don't face similar compliance regulations. they are scared about the fcpa and the uk bribery act. but it's not the only thing. it's simply that emerging market companies adapting the product much more to the local market.

so just to give you a couple of examples here, a chinese company higher, they sell home apply yapss. and they're the number one brand in nigeria right now. their products are able to resist to the frequent power blackout necessary nigeria. these are the way that's emerging market companies are reacting to realities on the ground. >> it's interesting. there's an awful lot of chinese infrastructure investment. they have gone in and said, look, we'll build you a port, we'll build you some housing and the road and a railway and all that sort of stuff. have chinese info come in the back of that and made it easier for them? >> yes, of course, it has made et much easier. high-end investment has changed quite a lot over the last decade. in italy, the was driven by government. but now it's shifted slightly away from that and it's more and more chinese enterprises that are moving into africa and they're taking advantage of the preferential relationship that chinese governments have with

african governments. >> and where is this? there's questions about flows into resource. has it changed, then? >> absolutely. that's a fascinating story here. when we look at the data, we see that 90% of all fdi projects from the bric's economies have gone into manufacturing and services and not into fm resources. and that's really massive here. because what this tells us is that these economies, they believe in the long-term opportunity of africa, much less the short-term returns. >> so what can western multi nationals do to get back in the game and compete better? >> well, there's various strategies they can implement. what western multi nationals can do is highlight the service continent. caterpillar has done that successfully in mon goal la. if a truck breaks done in rural mongol

mongolia, they can fix quickly. that gives them an advantage. there are products that are -- in the market, not just what they would sell in the west, anyways. for that, they should take advantage of the technology revolution that is currently conforming development in africa. samsung has been doing as they've produced a whole range of devices made for africa. for example, medical devices that allows doctors to conduct remote patient diagnostics. so if there's someone sick in the village, a doctor can see that from the city and that's quite remarkable, i think. >> anna, good to see you. thank you for joining us. analyst at the frontier strategy group. millions of chinese have hit the road to make the annual trek home to celebrate the new you with family and friends. transport officials predict strategists will make more than 3 billion this travel period. some are using this travel holiday to go abroad. eunice yoon has this report.

lunar new year is the biggest travel chance of the year for china. expect people here to make 3.6 billion trips over the holiday period. that's three trips for every person in this country. most travelers are going to be heading home for family reunions, but some people are going to be heading overseas to indulge in a new found travel bug. research firm csla expects the number of chinese tourist aes abroad to double by 2020. popular destinations? the asia pacific, macau and singapore and good places to shop. tours around american schools are as attractive as ever. despite the recent diplomatic disputes with china, japan ranks at the top. the japanese yen are cheap and so, are they say, the luxury handbags. eunice yoon, cnbc, beijing.

>> that's a lot of trips. now what's on the agenda for tomorrow? the lunar new year will close many markets across the area. but we'll get earnings from nomura, toshiba, fujitsu and many more. thousands of passenger are expected to have flights delayed. stephane, what is the problem this time? >> in madrid and barcelona, there are some slight discorruptions today. the spanish haven't been able to join the movement. the main union for the spanish traffic controller is supporting the process, but they haven't been able to go on strike because they didn't have enough time to follow all the legal

process that would eventually allow them to go on strike. the low change a year and a half ago in the country. there are massive strikes from air traffic controllers, the traffic for several weeks and that's the reason why. there's the prime minister decided at the time to change the laws. still, there are some discorruptions. the main one will come from france. the air traffic controllers will be on strike for a full day tomorrow. perhaps it's something that french authorities should think about. >> we'll see what happens with that. stepha stephane, meanwhile, you're there to cover the growth numbers we're getting out of spain tomorrow. what are we expecting?

>> we are expecting the economic growth to be significantly higher in the last quarter of the year. it's not the -- forecast from the spanish finance ministry. he also indicated the spanish finance minister indicated yesterday that the economic growth in spain would be around 1%, perhaps even more this year in spain. so that is a very ambitious forecast. that seems to contend the spanish economy is under way to the recovery. and also, of course, on the agenda for the end of the week in spain, we'll have tons of earnings in the banking sector starting with santander, the largest european bank that will report tomorrow morning before the bank opens. on friday, the second largest bank in spain will report before the bank opens. we will have the numbers from bankia after an expected loss of

19 billion euros in 2012. over to you. >> yeah. the youth unemployment rate is still -- what is it, around 70%? >> over 55%, even in spain. and the unemployment rate is at the 26%. so spain is far from being out of the -- all the problems. but we are getting signs here on the ground that the economy is improving, thanks to the deep reforms that have been implemented in the last two years. but there are a lot of things to do in terms of unemployment. of course, but also in terms of public deficit because we talk a lot about the french public deficit, but the spanish juan is even wider than the french juan and it's something that needs to be addressed urgently. >> plenty more to come from stephane. we've been hearing from deutsche bank this morning. they've been holding a press conference, currently taking answers. deutsche bank says its 2013 dividend proposal is 4.75 euros. but they do not yet have

regulatory approval to issue new tier one capital. they've come out this morning and reaffirm the 2014 will be another year of challenges. but they're confirming once again the 2015 target. they are going to take steps towards the leverage reduction target of 500 billion euros in 2014. but they expect more costs this year from settling major outstanding litigation matters, which one was of the reasons that they had a 26 million euro pretax loss of the core bank when they brought those numbers forward. still to come, meanwhile, it's all about the fed today. they're expected to keep their asset purchases on hold. we'll get more into that when we come back.

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you're watching "worldwide exchange." i'm ross westgate. a recap of the headlines today, turkey surprises investors with a huge rate hike. that currency starting to give up some of the gains. stocks around the globe rally. basic resources are the best in the sector. sainsbury numbers have dropped after the ceo announced he will step down in july.

>> profit targets, the co-ceo later today. and president obama seeks to jump start his full agenda. he tells congress in the state of the union address that while he's eager to work with lawmakers, he will go around them to get things done. >> america does not stand still and neither will i. so wherever and whenever i can take steps without legislation to expand opportunity for more american families, that's what i'm going to do. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. >> if you've just joined us stateside, welcome to the start of your day on "worldwide exchange." the dow snapped a five-day losing streak yesterday, up 90 points. the s&p and nasdaq snapping a

three-day losing streak. it's the fourth time in a month that all indices are closed higher. this morning, futures are once again indicating a higher start. the dow at the moment is called higher by 53 points. the nasdaq is some 18 points above fair value and the s&p is around about 6 points above fair value. european equities have been ticking higher, back up around 0.3% on the ftse cnbc global 300. european equities, the ftse yesterday was up 21 points. it's up another 47 this morning. basic resources doing fairley well. pretty good updates from the likes of angelo american and others helping that out this morning. xetra dax is up 0.8%. the ftse mib is up about 1%, as well. sainsbury, justin king, the ceo is stepping down. the group's commercial director will take over the helm.

basically stocks down 2%. and deutsche bank in focus, up 1.5% this morning. that press conference is warning of ongone challenges this year. that's further litigation costs hit home. at the same time, the group has reaffirmed the 2015 profit targets and claims its well placed to lead consolidation in the banking sector. that is where it stands with the corporate shares. let's show you where we are with the bond markets. come back to the treasury yield. 2.775% is where we stand ahead of the fed decision later today. dollar/yen is back just around the 103 mark. the euro/dollar, 10.3672. kind of where we were this time yesterday. that's european trading in singapore sixuan tells us what's been going on today with

singapore. sixuan. >> thank you, ross. a list in asian bourses, as well. and the nikkei 225 snapped a four-day losing streak posting its biggest daily jump since september last year. so ended higher by 2.7%. in china, the shanghai composite gained 0.5% today and the hang seng index in hong kong rebounded almost 1% from its five-month lows. but it's a luke warm start for hong kong electric's $3 billion ipo, ending down 2% despite being priced at the lower end of its range. south korea's kospi gained 1.3%. australia's asx 200 earned 11%. jakarta composite added 1.7%. shares of adventest plunged after slashing the company's full year guidance.

but on the other hand, chinese pc giant lenovo has decided to restructure its operations, creating two new business groups, one for enterprise products and a new software and club services division. so shares jumped over 4% to near 14-year highs. that's a recap of the asian markets. ross, back to you. >> thanks for that, sixuan. now, sixuan was talking about the reaction to turkey. let's remind you of what's happened in a bid to protect the country's currency. the central bank revealed a series of central bank issues last night. the lending rate was raised. the refi rates listed sharply higher, as well. in fact, the rates up by 550 basis points. following that, the lira regained a lot of the ground it lost against the dollar. we're back to around 2.21. 2.29 was the record low in the last 24 hours.

we've got policy tightening on the rates about 400 basis points. a lot later, michelle crusoe cabrera will talk to us from is at all t istanbul. president obama is vowing to help the economy. the president stressed he'll no longer be content to wait for approval. he would like to work together but will work to increase minimum wage and he intends to use executive powers to bypass congress altogether. >> the cold, hard fact is that even in the midst of recovery, too many americans are working more than ever just to get by, let alone to get ahead. and too many still aren't working at all. what i offered tonight is a set of concrete, practical proposals

to speed up growth, strengthen the middle class and build new ladders of opportunity into the middle class. . >> so as the president vows to tackle income inequality, we want to hear from you. is a higher minimum wage the way to do it? one tweet, if you want to make it more difficult for the young and unskilled to get a job, raise the minimum wage. matt says no, a higher minimum wage will drive up prices and in a couple years purchasing will go down. we would like to hear from you, worldwide@cnbc.com, @cnbcwex or direct to me @rosswestgate. ben bernanke's last fomc meeting will be wrapping up this afternoon. his reign is coming to an end. the central banker is widely expected to taper its bond buying program reducing it to

another $10 billion to $65 billion a month. some expect to note the improved -- they may have to say the usual cold weather may cause temporary dits disruptions. joining us with her thoughts, julia from bnp paribas. >> good morning. >> mr. bernanke's last meeting as fed chairman. where are they going to put the emphasis and the comments on this? >> i don't think they have to make a lot of changes. right now, the data are kind of tracking their forecast. they're relatively happy with how financial markets have absorbed the first taper. i think right now they just acknowledge that the data has gotten a bit better and they taper another 10 billion and don't do a whole lot. less is more today. >> how about that week december jobs report? >> right. so they might know, as you said,

that winter weather might be disrupting both the data and economic activity itself. so that could make it hard to read the tea leaves. but they never overreact to the source of noise in the data. and so they might acknowledge it and then just move on. as far as inflation, that's a trickier issue for them. they already have emphasized, they've acknowledged inflation is running below their mandate. they've indicated that they're not going to raise rates if inflation isn't picking up. so they've given us that commitment. they're probably going to have a lot of discussions about what to do with inflation doesn't accelerate. and right now, i think they just lean on patients on interest rates. >> and what do they say about the fact that unemployment rate is now 6.7%. they had this threshold target of 6.5%. but they've got a declining participation rate. how are they going to steer us through all of that. >> well, i think they are eventually going to have to take that bull by the horns.

but today, they already bought themselves a little room in december. they said the committee now expects they will be on hold well past the time we hit 6.5%, acknowledging that the progress towards 6.5% hasn't been exactly the way they had imagined it. bernanke had said in november that once they get to 6.5%, they're going to be looking at a broader set of labor market indicators and bottom line, again, if inflation doesn't pick up, if wage growth doesn't pick up, they're not going to be raising interest rates. so they will be on hold for longer if progress is made with falling labor. >> the fed has set policies for the u.s. will they talk about emerging market fallouts or, you know, will they talk about the market fallout that we've seen in the last couple of days before the rally, of course? >> you know, right.

i don't think that it's risen to the level that they're going to acknowledge that is a risk. in fact, if anything, certainly taking some steam out of the u.s. stock market isn't a terrible thing for those worried about financial stability. and i think overnight what we saw from turkey and what we saw yesterday from india, that's exactly what the fed would want to see. if countries have issues, domestically or are facing challenges because they have macroeconomic imbalances, then they need to take action. the fed needs to first and foremost respond to what's happening in the u.s. and what's happening in the u.s., so far, so good. >> julia, we'll come back to you shortly. a reminder about what's on the agenda today in the united states, there's plenty of earnings reports. boeing is out before the opening bell, as are numberes from chrysler. we'll get results from biogen, idec, dow chemical and jet blue.

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sainsbury appoints a new ceo to take over in july 2014. and in his fifth state of the union address, president obama takes a go it alone approach to pushing through economic reform. okay. still with us is julie coronado. what did you make of the state of the union address and these ideas on minimum wage? what impact might, you know, raising it again. what impact might that have? >> well, i'm going to struggle to not be depressed by the state of the union. i think the good news in american politics is it's not as contentious as it was before. but if that's a policy agenda,

that's pretty meager. the president is talking about raising the minimum wage for federal contractors because he knows he can't get a minimum wage hike through congress. and that affects a few hundred,000 people by our calculations. so this is not really anything that's going to move the needle in the u.s. economy and, really, in any direction. >> yeah. it did mention sort of the rollout of obamacare, although it did defend what the health care program has been doing. how much has that eat nn terms of cost? >> you know, the effects of obamacare, we're going to have to really wait and see. i mean, in the near term, obamacare has led to an increase in premiums for people who have employer sponsored health care coverage. over time, it should lower costs for those who -- or at least offer reduced costs for those

who have to buy their own insurance on the open market. so how that all settles and what the impact is on sort of the health care marketplace, it's going to take some time to work out. there's been a lot of technical issues, a lot of the complime implementation has been delayed. it will take years to see how this health care system affects coverage in the united states. >> just going back to this point, he was talking about the stock markets have done well. let's come back to this point on wages, though, because it's going to be very key, i guess, for fed policy. and, you know, do you have any expectation that we'll get any wage increase at all over the next year? >> you know, i still think there's -- we still have a lot of people in the u.s. who are working part-time and want to work full time who are on the sidelines, sort of with their

hands up in the air waiting for a job. that tends to put a lot of downward pressure on wages. we seem to have a floor under wage growth around 2%. so we're not terribly worried about outright deflation in the u.s. but it still seems like progress on real wage growth is going to be slow in coming just because there's so many people and relatively credible people who want to work and don't have jobs still. >> thanks for that, julia. good do you see. have a good day. >> thank you. fiat's stock which is now basically including chrysler down 3.6% after forth quarter results at the moment. trading profit of 931 million euros, but that fourth quarter net profit included some unusual 1.5 billion euro gain, which would have dragged down the fourth quarter net profit, 1.29. so take the usual game has made

a small loss. revenue, 24 billion euros. we'll dig into that in a little bit more detail. also, you may be aware of the group mulberry. that stock down fairley heavily today, down 26% after warning its full year profit will fall well below expectation. they had a lot of christmas discounting. now, basic resources having the best performance in terms of european sectors. antofagan, the chilean firm reporting a rise in copper production. the firm confirming record performance with banks to pretty good performance across all operations. angelo american similar up 6% today after the mining firm also reported a record copper out despite continued labor disputes at a number of its mines. and novartis, confirming its 2014 sales growth forecast. it says it expects competition

to its blood pressure pills diavan to kick in in the second quarter. and the ceo said to cnbc he said the firm is not going to change its ee memorying market strategy despite problems from currency fluctuations. >> there are definite currency headwinds. and you can see from our fourth quarter results in terms of the constant currency results versus the actual reportsed u.s. dollar results that we did take a currency hit. but at the same time, we have to think about this in the long-term. we're in the business of discovering and developing new and innovative medicines and helping those emerging markets improve the health of their populations. so there is going to be currency fluctuation, but this is something that we're going to live through. because if we pull back in those markets and then try to get back when currency goes the other way, it's just not going to work. we have to have a consistent strategy and continue to drive our business in those emerging markets. still to come, yahoo!'s fourth quarter earnings beat forecasts. revenue is down 1.7% excludeing

fees fort par ners with webb traffic. it's the fifth straight quarterly decline in revenue. online ad prices dropped and display ad revenue fell more than 5%. alibaba's revenue growth is slowing. the ceo marissa mayer says she'll become more involved in sales. she says the decision to oust -- was regrettable, but had to be done. yahoo! is off 0.3% in frankfurt. at&t added more wireless subscribers and bchted from a big pretax gain. but at&t subscriber growth and free cash flow targets fell short. the cfo says the u.s. buying scandal is hurting business regardless of any effect it may be having on overseas acquisitions. at&t down 2% after hours, down

about 1.4% in frankfurt. electronic arts first quarter net loss widened and revenues fell. the company is cutting its 2014 revenue outlook as new video game consoles, the xbox 1 and play station 4 are beginning to hurt games of older devices. it's been surprised about how demand mass dropped for games. shares down 2.5% in after hours tradeling. turkey's central bank has outstripped market expectations. the lira, faced a comeback last night. will it last? we'll get the latest with michelle caruso cabrera in istanbul right after this 37 . nouncer ] the new new york is open. open to innovation. open to ambition. open to bold ideas. that's why new york has a new plan -- dozens of tax free zones all across the state.

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snapped five days of lows for the nasdaq last night. it's only the fourth time this month that they closed up. today, that trend looks to continue. the s&p currently about 5 points above fair value. the douse is 45 points above fair value and the nasdaq is up 15 points above fair value. we've been helped out today, as well, by turkey. the central bank has revealed

drastic lending hikes. the repo rate raised by 550 basis points. joining us is michelle caruso cabrera. she's on the phone in is tab bull. a nice place to go. michelle, good to see you. we have seen the lira. we saw immediately after that decision, the lira hit a new high of 218 after being at record lows. come off a little bit at the moment. .how much of a signal was this? also from the central bank about we are independent. >> huge on both counts, ross. first of all, clearly, most economists we spoke with were expecting 2.5%, but hoping for 4%. they got somewhere between 4% and 5%. this was definitely meant to be a signal to the market. also, of course, the prime minister of this country had been saying repeatedly that he did not want the central bank to raise interest rates. so for them to do so and do so

so aggressively in the face of that, clearly, is an exhibiting -- or trying to prove their independence. at the same time, business owners here are watching to see and are very anxious to see whether or not the lira will stabilize at these levels. we spoke with several business owners this morning who said, look, higher or lower, we rm don't care. we would just like it to stay stable so that way we can be more predictable about our buying, our selling, etcetera when we buy import products. so as you mentioned, huge rate hikes. what a lot of economists were hoping for was some kind of orthodox policy framework to get away from setting literally five different interest rates. it seems now that they've decided that the benchmark policy rate will be the one week repo rate. it used to be the overnight rate. we'll see if that continues. >> have a good trip. thanks. plenty more from michelle in istanbul.

still to come mean whole on the show, gold is -- a smooth exit from the central bond buying program helps calm volatility for the precious metal. we'll be back.

. welcome to "worldwide

exchange." i'm ross westgate. turkey comes out with some big increases. surprise stocks around the globe rally. investors now turn their focus towards the fed later today. expectations in fourth quarter figures, it told investors it's not going to be paying a dividend. that stock down 3%. deutsche bank has reaffirmed its profit target and kept its full year dividend unchanged despite suggesting a price loss of 1 billion euros in the fourth quarter. we'll be hearing from the co-ceo a little later. and president obama seeks to jump start his stalled agenda. he told congress in his state of the union address that while he's eager to work with lawmakers, he will go around them to get things done. >> america does not stand still and neither will i. so wherever and whenever i can take steps without legislation to expand opportunity for more american families, that's what i'm going to do.

>> you're watching "worldwide exchange," bringing you business news from around the globe. >> very good morning to you if you just joined us in north america. u.s. stocks closed up across all three major indices for the first time -- sorry, for only the fourth time in the month last night. the dow snapping a five-day losing streak, the dow up some 90 points right now. our futures suggest we're going to open higher at the moment by another 48 points above fair value. the nasdaq at the moment is some 16 points above fair value and the s&p 500 at the moment is around about 5 to 6 points above fair value. the cnbc ftse the 00 has been higher during the session. the nikkei doing pretty well up over 227%. the ftse 100 closed up yesterday, up around another 40 points at the moment. the basic resources doing pretty well. angela merkel is coming up with some bullish production update.

xetra dax is up 0.75%. and the ftse mib is up 0.5% despite coming down because we're not quite happy with their numbers. so ahead of the fed later today and this turkish interest rate rise, what are investors to do? here is a recap of some of the thoughts of some of the guests we've had on cnbc today. >> korea's current account numbers are doing very, very well. the export sector assuring some signs of life. this is one economy that is well adept in exporting a fairley inward looking recovery and a chinese recovery that's quite focused on luxury goods with its career. so korea is one place that we would be looking to buy the dip. >> in the emerging market phase, we've seen some heavy interventions now by central banks. i think, you know, it's unchanged as strategy. we remain in developed markets.

which has a global and it's on emerging market closures. we think we'll stick to that. there's trading opportunities, though. . >> it's any in europe, merger. shares are down after a fourth quarter trading profit. it's not going to pay a dividend. and including an usual 1.5 billion euro gain, the group managed to beat on net profit, though. but in the states, the dividend is really hurting.

>> the adjusting net profit, 1.8 billion revenue, 72 billion. it says it's 2013 worldwide vehicle sales for 4.2 million units. earnings beat forecast, revenue is down 11.7% for yahoo!. it's now the now the fourth straight quarterly decline in revenue. online ad prices dropped and display is down 5%. something of a concern. alibaba is slowing. on the call, the ceo marissa mayer says she's become more involved in growing sales. the recent decision to oust the chief operating officer was regrettable, but it had to be done. his position will not be filled. yahoo! after hours is up about

0.3% in frankfurt. the company added more wireless subscribers and benefited from a pretax gain. but at&t subscribed growth and precash flow targets fell short of estimates. the ceo says the u.s. buying scandal is hurting business, regardless of any effect it may have on overseas acquisitions. at&t, down 1.32% in frankfurt trade. electronic arts quarter net loss wind and revenue is down 12%. the company is cutting as a result of its 2015 revenue guidance because the new video game console xbox 1 and play station 4 are hurting game sales for other devices. maybe the xbox 360 and the may station 3 the. stock in ea is down after hours, a similar performance in frankfurt. still to come, president obama lays out a number of

proposals he would like to implement in the area ahead with or without cooperation. amongst the way americans can save for retirement. we'll look at the nuts and bolts next. 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.

in his state of the union address, president obama addressed several issues, among them raising member mum wage and a retirement plan. >> i will direct the treasury to create a new way for working americans to start their own retirement savings. myra. it's a new savings bond that encourages folks to build a nest egg. myra guarantees a decent return with no risk of losing what you put in. >> morgan brennan is on cnbc headquarter with more. i was pronouncing this wrong earlier this morning because we had something called myra, mortgage rate relief. >> say it three times fast. the my ra, which rhymes with

i.r.a. is designed as a starter account to help investors avoid the common pit falls of retirement savings. they note that many private sector providers don't let so-called smaller balance savers to open retirement accounts. that that often charge fees that can take up a significant portion of their balances. the myra account would be structured by a roth i.r.a. which allows people to put money away on a tax deferred basis. there are people who are just starting to save for environment and eventually could be rolled over into a more traditional i.r.a. it's unclear now how the accounts would be marketed to investors and what responsibility they will have in getting workers to sign up. employees wouldn't be automatically enrolled. they would have to choose to participate. the u.s. government has several programs designed to help older americans save for retirement. studies show many people are

still unprepared for their golden years. a survey by the employee benefit research institute shows about two-thirds of all workers put money away last year, but more than half say they have less than $25,000 in savings. outside of their homes and pengs. and 28% have less than $1,000. treasury secretary jack hayes is expected to play a big role in the launch of this program which president obama says he may enact without congressional approval. the president will outline more on this plan this afternoon at a plant in pennsylvania. >> greg, is the myr.a. account going to take off or not? >> what's interesting is it's one of a number of initiatives that the president talked about in that speech and that he

talked about that are meant to address widening credibility. but on closer examination, it's difficult to see how these things are going to make a huge difference. the myra will be helpful to a lot of people, but a lot of low income people are struggling to make ends meet. that is fundamentally the problem. it's not the lack of vehicles to do so. and if you look at the issue of the minimum wage, the president has proposed ragz the minute among wage for people who work for federal contractors. we're talking at the moment 500 those to 1 million people. if you go through all the initiatives that he talked about last night, things you can do be executive action which are generally quite small, and things that are more ambitious

that would unfortunately require legislative action. there isn't a lot of hope that he's going to get the runs in congress to go along with those this year. >> as far as the economy is concerned, the government or congress and president is still going to be out of it. it's still more about them not hurting it rather than helping it. >> well, that's right. the federal government austerity knocked about 1.5% off economic growth last year. this year, if you look at those things that are still about to bite, you're talking about less than half a percentage point. what we're talking about is that the government may be shooting itself in the foot in terms of the economy by just using lower caliber ammunition. and if you go to the president's speech again, when he talks about things that might actually help the economy this year, there's not a lot there.

the only big thing is perhaps asking for an extension of emergency unemployment insurance benefits. and democrats and republicans were working on trying to develop that extension and basically negotiation is fell apart over the question of how to pay for it and add to some miraculous break through, i don't see that happening this year. bigger ticket stuff, the president would like a big infrastructure bank to repair roads and railways and airports and to fund that through a corporate tax reform that easy raes additional revenue. again, ambitious. there are hopes among republicans for corporate tax reform, but very little appetite to do it in a way that raises new taxes. >> greg, thanks for that. we'll get a cup of coffee. following a massive rate hike, uk growth appoints a new ceo set to replace justin king in july of this year. as we just heard in his state of the union address, president obama takes a go it alone

approach to pushing through economic reform. >> as pb vows to tackle minimum wage, is a higher minimum wage the answer? jeff tweets, income equality and minimum wage are not related. people need to make enough. let us know your thoughts. join the conversation here on "worldwide exchange." worldwide@cnbc.com, tweet @cnbcwex or direct to me @rosswestgate. as i said to greg, coming up, investors taking a break. we digest the latest fed decision later today. will the taper timeline stay on course? that and the impact of gold prices. see you in a moment.

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global investors have cheered their decision by turkey's central rates. the overnight lending rate was raised by massive 425 basis points. the refo rate was raised by more than that, 550 basis points. that's left rates sharply higher. bank lending rates up 2% to 4%. helped out investors sentiment, the ftse 100 today has just come back from where it was overnight. remember, the ftse 1100 is up 21 points right now. the ftse 100 is up 0.3%. the xetra dax is up 0.5%. the cac 40 up 0.2%. we are lower than where we were an hour ago. now, the ftse mib dragged down, you can see that stock down 4% hit by trading profits that came in well below expectations.

the italian carmaker said it will not pay a dividend. it's reported a jump in car sales for 2013. as far as u.s. futures are concerned, after snapping a five-day losing streak, the dow up 90 points. these features have come down from where we were half an hour or so ago. the nasdaq futures are currently 10 points above fair value and the s&p 500 is now just two points above fair value. we've seen futures about cut in half in the last hour or so. and there will be some nervousness ahead of the fed. it wraps up a two-day meeting this afternoon. ben bernanke's last as chairman. the fed is expecteded to reduce its borrowing to $65 million a month. it's thought gold has priced in a smooth exit from the accommodative policy, but joining us from new york, michael duda.

michael, why will it not be a smooth exit? at the moment, we think we'll get 10 billion a month. do you think that's going to happen? >> oh, i don't doubt that you'll get the 10 million and everybody will be smooth as expected type of meeting. but, you know, we are in an unprecedented period of monetary policy expansion and experimentation. and between now and, you know, getting the excess reserves off the balance sheet of the fed, there could be some choppy roads ahead. >> it has been a bit choppy, hasn't it, this month? >> absolutely. it's interesting, you know, gold is -- you know, for the first month since august has outperformed the s&p, outperformed a lot of other indices. and investments.

gold is finding a bit in this environment. >> what do you make of michael's thoughts? how xoppy is it going to be as we continue down fed tapering? >> it's interesting, ross. i had expected the kind of churning we've seen in the market. a month ago when we initiated the tapering program, we were sort of wide eyed saying, wow, they pulled this one off. it went smoothly. maybe it was just a delayed reaction. there's a lot of reasons why emerging markets were taking it on the chin in the last week. but certainly there was this background concern that this period of unprecedented monetary support was about to be withdrawn, not just in the united states, but in the uk, as well. where unemployment was falling surprisingly quickly. so the forecast would have to be that, yeah, i agree that i think that the tapering will continue.

number one, are they telling us something about the economic outlook that we have to pay attention to? i think the answer to that is so far no, it is not forecasting slowdown in the economy. the second thing they have to ask is this, the front wave of some kind of systemic financial crisis like we had in '97 or '98. again, i think the answer to that is no. thus far, i don't see the case for them to deviate from that. but if some of the economic data in particular, friday's payroll report come up disappointing, that will give them pause for concern. >> how does that reflect back into what you expect, as well? we did hear two-month highs before the stocks rallied? >> greg made a very good point. i think the economic data, talk about being data dependent regrettably, we'll be forced at looking at the data. and i do think with regard to

the gold market, in 2013, gold cracked pretty hard, as you know. 400 or$400 or $500 decline. that move, to me, had discounted the taper, back in the ten-year bonds from 150 basis points up to 3%. and a 30% move in u.s. equities. and i think to repeat that in 2014 is very unlikely and that should, at least at 12, 1250 provide support for gold. >> the interesting thing is i suggest what -- if we're changing sort of the risk free rate, right? if u.s. rates are going to go up slowly, that does it for gold, right? are we going to get more liquidation out of ets, which is going to outweigh the fiscal demand that we have? >> good point, ross. but i think a couple things, we've seen a big liquidation in gold already. much of that has been exported to asia.

chinese demand for gold record in 2013 expect to be very strong, especially going into the chinese new year. and so the fundamentals in the gold market itself, a lot of fwnl gold has been moved towards physical buyers. and i think that gold going into asia and china is not coming out in the market anytime soon. i think the jury is still out that we're going to see positive interest rates in the long-term. >> what is happening to the treasury yield? is this just the fact that nearly all the consensus was stocks keep going higher and yields will go higher. but if you had gone short stockes and long bond, you did really well, right, in january? and not many people were on that trade. i wonder whether it was the transitioning. >> i think that's the big part identity, ross. isn't that the old saying, that

the market will may have in such a way to embarrass as many people as possible. the fundamentals seem so lined up against it this year that exactly that, i think that a lot of people have shortened duration and we're not prepared for the kind of rally that we had. and also the sell-off that you've seen in emerging markets, it's a classic risk off type of thing. whatever people thought the fundamental pass was for interest rates and tapering at the federal reserve, that was overwhelmed by the flight to safety trade going on. now, interestingly enough, you haven't seen much movement in the two-year yield, if anything, a modest rallying. so even though you've got unemployment rapidly falling towards the rate at which the fed said they would start to think about higher interest rates, you have not seen that translate into fundamentally different expectations. people still think it will be 2015 before the fed starts to raise rates. >> greg, it's always good to see you. greg ip, thank you. michael, thank you. that's it for today's show. the co-ceo of do you have ya

bank is speaking on cnbc when that pretty conference finishes. right now, "squawk box" picks up the schedule.

u.s. futures are higher this morning. we'll check in with michelle caruso cabrera. she's where the action is in istanbul. and yahoo! shares are lower. and president obama calling for a year of action with or without congress. it's wednesday, january 29th, 2014. "squawk box" begins right now. >> what i offer tonight is a set of concrete practical proposals

to speed up growth, strengthen the middle class and build new ladders of opportunity into the middle class. some require congressional action. and i am eager to work with all of you. but america does not stand still and neither will i. soherever and whenever, i can take steps without legislation to expand opportunity for more american families, that's what i'm going to do. good morning, everybody. i'm becky quick along with joe kernen and andrew ross sorkin. we have another big lineup today, include dow chemical's chairman and ceo andrew live ris. plus, we have senators rob portman, heidi height camp and paul ryan.