hello. you're watching "worldwide exchange." i'm ross westgate. >> and i'm julia chatterley. these are your headlines from around the world. >> the sell-off intensifies european markets following asia lower. the nikkei off 4% pb back at its lowest level since october. ubs shares outperformed, springing back to profits in the fourth quarter thanks to a larger tax benefits warned from current to market turmoil. >> the volatility out there is quite huge, a lot of unresolved matters. you see what's going on in the last few days or in emerging

markets and overall. i just think that making prediction about stabilization of this environment is quite hard. the latest -- to stop from refining weakness. the firm upping the amount of cash it's putting aside, as well, to deal with the gulf of mexico spill. and toyota shares fall lower in japan despite the carmaker raising its forecast. the firm now expects a record profit this year. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. warm wake to today's program. we kick off with where we are an hour into trade in european equities. 8 to 1 decliners currently outpacing advancers on the dow jones stoxx europe 600. here we are, this is where we stand right now. love the prices on for you. we're not quite at the session

low. we hit that about a half an hour ago or so. ftse 100 off 0.4%. the xetra dax off 0.75% and the cac 45 off 0.25%. ftse mib is up 0.36%. the nikkei down over 4% today during the session. the yen actually didn't continue to strength. hang seng back after its holiday, down 2.8%. the kospi down 1.7%. the asx in australia off 1.75%. hasn't done much for the stock market. the vix, over 20 for the first time since october. 21.44 is where we stand right now at 16%. as you can see in the last few sessions. and volume yesterday, extremely high, as well. as far as bond markets are concerned, the stock market losses have been treasury gains,

ten-year treasury yields below 2.6% at the moment. the first time we've been down there since the beginning of november. that is a three-month low. gilts today, construction pmi coming out in around half an hour. gilt yield back down to 2.68%. not too long ago after the unemployment numbers we had out about two weeks ago, that yield was heading back up towards 3%. taking a look at the currency market to date, dollar/yen, the lowest since november 21st on monday. just over 101.28 is where we stand. the saucy/dollar, we're back up to 0.8885 because of that change in rba. sterling, a little weaker because of the dollar. and euro/dollar, just above 1.335. 1 is.3479 was the recent low we hit on friday. that's where we stand with currency markets. plenty to come on today's show, as well. chip designer arm just missed

forecasts with fourth quarter number webs but managed to maintain its outlook. yumm brands has had an earnings beat, but sales in the fourth quarter drop. we'll check in on that story. toyota raises its outlook, telling investors it speblths a record outlook this year. we get all the details live from tokyo in the next hour. and happy birthday facebook. social media trail braiser turns 10 years old today. later, we visit how facebook became so popular and what the next steps are for that business. >> yes. i should probably set up an account at some point. >> but you're not a facebook? >> no, no. you've avoided it for ten years. >> dallas normal way to get ahold of people. >> it's a utility now. it's the best way to get in

touch. >> what's wrong with the phone or any other way of communication, text messaging or a thousand other ways of communicating with people. >> it's the cheaper way? >> is it? i don't know. some of these stats are ama amazing, right? treasury yields back to 2.5%. copper, longest losing streak in 27 years. >> yeah. you were talking about the vix volatility index, but it's a broad based pick up in volatility here, isn't it? >> yeah. vol at 20 is not a big deal. >> no. but relative to where we were in may of last year -- >> may of last year was just a blip on a continuous straight line. so even if we're only back, what, 5% in the stocks? >> how were we in may of last year? >> we were always worried about

china. >> it's a perfect storm. >> it is. >> concerned about growth in the u.s. >> we've always had those concerns. we've had those concerns last spring. we've had those concerns three springs in a row. we've gone after awful long way. you have to have a pullback at some point. >> how about 15% for the s&p? >> it would be fine. it would be a tremendous buying opportunity. >> we could do it. why not? anything is possible. we'll take a short break. when we come back, we'll look into bp. its shares down after the latest oirnlgmaker to report a weak set of results. see you in a moment.

bp shares are down, they became the latest oilmaker to post negative results this quarter. they posted a 37% drop in profits after output from its production and refinery units fell. bp said lost income from asset sales and weak recessions on mining have dented their profits. elsewhere, ubs shares jumping more than 4% today after the

swiss bank posted a larger than expected fourth quarter profit of 917 million swiss francs, driven in part by a better performance of the lenders investment bank. now, carolin is in zurich to run us through the numbers. a better performance overall, carolin. but there's a lot of caution about this statement that he made about concerns about emerging markets, about tradesing over the first quarter. this is no different from what we've heard from him for the last several quarters, is it? or am i wrong? >> it's nothing different from what we've heard over the last nine quarters, julia. so yes, he's right to be cautious because we've seen a fair amount of volatility in the markets in the first month of the year, but who knows how the rest of the fist quarter is going to play out. of course, there is concern that the first quarter which has a seasonality is usually very strong. may not be seeing that boost that we usually see in the last years prior to this. again, we've got two months to go before this quarter wraps up. i want to bring you a note from

goldman sachs this morning. they call the numbers mixed result. as you pointed out, they say the investment banking results, that was very strong partially because revenues outside the fixed income units, they held up better than expected. i pointed out the advisory business revenues, up more than 70% of the quarter. also ecm revenues up substantially, up by more than 50%. and keep in mind, fixed income only accounts for some 15% of investment banking revenues going forward. so even though that was flat, that's not too much of a concern for the bank. now, the other point of strength that i would point to is the fact that capital and the balance sheet metrics, they were very, very strong, as well. and coldman sacks says this was partially because of lower than expected risk weighted assets, but also because of that partial reversional of the operational risk add on which is required by the local regulator.

and this had been a big concern for investors going into the numbers, part ideally because there have been rumblings about a higher than expected leverage ratio here in switzerland, but also because of this ubs take risk out of. when i spoke to the ceo of ubs, he tried to reassure investors about these two issues. >> i think the underlying elements that drives the value for our franchise are still intact. i think in respect of the leverage ratio, we have a clear path. we are already well ahead of our minimal regulatory requirements by continuing a discipline executional of our reduction of risk weighted assets and the balance sheet in general. we will achieve our targets in a permanent manner. i look at our overall -- the overall environment. i would say that, you know, by excusing that we will be able to have a good capital return for our shareholders. so i think continue to execute

is going to be very important. >> but is it still possible that you could be paying a special dividend in 2014? >> we say that when we achieve our 13% target ratio, which clearly we expect to happen this year and we have a possible stress 10% ct-1 ratio, then we will pay at least 50% of our net profit attributable to shareholders to them. >> we saw 28% increase in your bonus pool for 2013. i'm wondering, why did you feel you had to do that? how difficult is it to attract talent out there? >> first of all, it's very important that on an accounting basis, the cost of our valuable compensation for 2013 is basically flat. i think that we took down our compensation in the last two years quite massively, also absolute and related terms to competition. we had a very strong year this year and this is now reflecting

our compensation framework that we want to retain and attract the best people in the industry to serve our clients. >> and julia, let me tell you why goldman sachs believes this is better results. because the profit in the all-important private banking business came in below expectations, partially because of the cost and the gross margin is still stuck at 85 basis points. julia, in an hour's time, we'll be speaking to an analyst and he says with the return on equity of just about 7%, maybe shares at ubs not too compelling right now. back over to you. >> thanks, carolin. we look forward to that coming up. let's move up and round up our earnings reports. shares up 4.3% after the firm lost in the last quarter. fourth quarter numbers disappointed investors due partly to -- and apple as a smartphone market slows.

he told cnbc he still expects growth to continue. >> we're expect to go deliver that. we're expecting everything that we've been going through the last few years to come to fruition and more units to share. we're clearly seeing some slowdown in the groekt in the high end of smartphones. but overall in the markets, we're supposed tom other end products. >> joining us now, christine. thanks for joining us. good jump in full year revenues. still playing in the right space? what's your outlook for them? >> definitely, if there had been a slowdown in q4. overall, 2013 had been a good -- you know, the company saw 22 person with crossing 1 billion better on $11,1117.7 million in

2014. and the first three quarters, the company had around 26% and it's just quite a fall which had a marginal decrease compared to the previous quarter. around 15%, so -- >> you're talking about 80 billion connected devices worldwide with the sullivan forecast, right? >> yes. >> which suggests is a big pie for arm to be involved with. >> yes. that would be a key driver for arm when we talk about the internet of things. very -- arm is potentially one of the strong companies in the market. and we are talking about 500 billion internet users by 2020 and -- they move away from just mobile and smartphones. >> yes. >> it becomes things like tvs, i mean, anything. >> absolutely, yes. we can talk about, you know, run

by the pentation of tvs, microcomputers and even the wireless chip sets and so on. >> what about the networking market? i've seen a number of analysts say this is going to be one of the key royalty growth drivers over the next two to three years. do you agree with that? >> absolutely. if you see aluminum and royalty revenues drew by 18% in 2013. which is trimming -- tremendous. and when you talk about the process of royalty, specifically, it grew by 19% in 2013. the physical life she tried to draw back, it is definitely a driver. and we can see through arm's results, as well. >> talk to me about valuation. i've seen the price ratio 38 times. a lot of analysts saying their expectations are baked into the

cake here. it's difficult to see further good news as far as the stock is concerned. what's your judge here on market valuation? >> you know, i know why this question is coming from, but i would expect the first quarter of 2014 to pick up. especially because of the pipeline of olympicss that they have and the royalty revenues that they are expecting. i think it should be fine. >> we're going to get your view. >> i think the valuation is an interesting one. we think the stock is attractive. i think it's going to be a stock particularly in the current market that investors will start to stiff around at these levels

with today's sell-off. which actually, it's not the headline revenue over on 38 sometimes times forward earnings number. that's notice really what people are investing in. this is a stock after today's corrections people will be looking to pick up. back to you very quickly, chris. this sell-off, dennis gartman is talking about a 15% potential correction. what do you think? >> i think we're in a environment where we've got through considerable volatility. you could do a google search and say volatility is going to pick up in 2014 and guess what? volatility is -- >> this is lower, isn't it?

>> the structural reality of the whole zero interest rate federal reserve intervention had meant that we're in a very low environment for a considerable period of time. the big shift is that people are now beginning to look at the fact thrather than just holding all my exposure in risk assets or riskier assets, i can say actually now the trashry market isn't terrible. people are beginning to use treasuries and more than risk hedge and equities, global equities, more than the return geared growth opportunity. and against that backdrop, the momentum of last year have run out of steam and started to reverse, all at the same time. but the news flow hasn't region changed. so what we're seeing, this is about people repositioning for 2014. treasuries, equities, i don't

have to take that political risk as much in some of these countries which actually i've defer -- and the momentum trade. massive flows out of emerging market etfs, headline etfs in particular. i don't think it's a crisis, i don't think it's panic. i think it's a readjustment at the beginning of 2014. >> but if you look at what happened in the implied rate, they fell off by about 12 basis points yesterday. that's not a flattening of the yield curve. we saw them turn significantly or take out any pricing rate hike we've seen. is it too much? >> well, look, i mean, the ism figures come out. we know it's weather related. but the minute it's relate related, we know the data isn't

going to be as visibility, as it had been quantifiably. can we rely on that data point to trigger all those algorithms that keep buying and keep selling? they should clearly by earning equities. emerging markets have taken a big hit. emerging markets last year were people's favorite asset class. this is a very different back drop here. >> what do you do, do you sit on your hands? >> we had a guest yesterday telling us cash was king orb doctor. >> no, i don't think cash is

king. treasuries are your investment risk management tool. in markets like this, when you see share prices correct quite sharply, it's when you go start to look. look at the banking stocks out there that have now become quite attractive. >> they might be mo attractive in a few weeks, credit. >> we could have the most hated rally because it was going away from them and they had been waiting for something to happen. if you had been making money in investment markets in the last three or four years, you can and look at a stock like performance today, you say is this really what i should be doing? should i be taking this big step back? i think if you start to look at the message coming through

through the likes of ubs, these are stocks that you can step back into again and say, look, i can pick it up at these levels with very little real risk. i think with a breakdown of the u.s. equity market in particular, that would be where i would be going to look around. i would be looking at good policy stocks u.s. side to see that value side. >> this change in the flows out of etfs, when does it stop? >> it's not a predictable process when you had the flows going in that people didn't anticipate in terms of the volume. these have been very big macro orientated moves. they had been going into spiders, short positions. money has been moving very, very

quickly. what wir looking at is the second-guesses that are start to go occur now. and if you go into a set of results, there's a big short story for people. do i close out my shorts before the numbers? if the numbers are weak, do i then double up? we're not in a here is a -- you can get on board and go to sleep. these flow numbers are telling us right now that the market flow is going against those situations. that's when you get your opportunity. you don't get your opportunity when the market is going up 50 basis points, 1100 basis points every trading session. >> you get a momentum trade, you end up not buying value.

these are varmts where you can get value on board and that's really important. >> great. equity strategist at lieber investment services. meanwhile, the fed dallas president richard fisher says monday's sell-off doesn't affect his support of the tapering of the bond buying program. he says he's focused on real economic performance and what happens in the bond markets. >> so speaks the hawk. elsewhere, the australian central bank dropped a reference to the australian dollar being uncomfortably high. the rbi kept its main cash rate unchanged at a time record low of 2.5%. the rbi started lowering rates in november of 207 and its last month was december last year. you can see up around 1.8% been

taking it to just above that 89 figure level. china's opposition democratic party is heading to court. it's calling for the dissolution of the thai party. separately, the commission is looking into several campaigning irregular layerties leading up to the election. china has pulled out of the deal to buy 1.2 million pounds of thai rice, adding to the interim administration's financing problems. now, happy birthday facebook. the social media giant celebrates its ten-year anniversary today. but is it all downhill from here? is facebook so yesterday? ross -- >> i saw the trend when it launched. >> you just didn't bother at all. >> yeah. >> if you want to join the

conversation here on "worldwide exchange," get in touch with us by e-mail, or via twitter @cnbcwex or -- >> you see, no one is asking anybody to face them, are they, to talk about this story? tweet, e-mail, no one says face me. >> face me, baby. >> or whatever -- do you face each other? what do you do? i joined in the beginning. >> is that what it's called? >> i have no idea. we're so yesterday. still 20 come, the nikkei tumbles to a performance low. will the leasing streak continue? we'll have your analysis lives from tokyo, coming up.

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>> ubs shares outperform in the fourth quarter thanks to a large tax benefit. the ceo warns on current market turmoil. the volatility out there is quite huge. a lot of unresolved matters. you see what's going on in the last few days in emerging markets overall. i just think making prediction

about stabilization of this environment is quite hard. >> bp, just the latest big oil firm to suffering from weakness, lower profits in the fourth quarter. it's upped the market avenue cash it put aside to deal with the gulf of mexico spill. and toyota now expects a record profit this year. sterling has just risen after strong construction numbers. it's coming in 64.6 versus 62.1. the strongest since 2007. sterling bounced off, it was below is 1.63. gilt futures have turned negative. they're down on the session low.

nearly down at the session low, as well. widened more than a basis point, as well. not a bit of -- for the mpc when they meet to discuss their latest thoughts on thursday. not that they're going to do night, but it will be interesting to see how they digest to go with their coffee. european equities are down, not by a huge amount. it compares rather favorably than japan today, which is down rather 4%. >> volatility continues in the bond market. we saw the u.s. ten-year taking yields to 2.60, as you can see there.

>> and on the currency markets, talking about sterling, dollar/yen, 101.33. just off at the moment. euro/dollar, 1.35. 1.37 is where we were on friday. >> the nikkei closed down over 4%. this is the fourth day of losses for the japanese market and the largest percentage decline since june. now kaori enjoji joins us. kaori, what extent is this about volumes in the market and b with of course, the chinese new year holiday that we're seeing? what's the impact of that, too? >> i think partially that explains the situation. but when you take a look at the trading volume on the tokyo bores tod borse today, it is the highest

it's been since 20097 i think we're seeing very extreme swings where the equity market here in japan is now down 14%, the worst performing market in the world after a 57% run in 014 is which makes us the best performing market in the world. this is the momentum that started ten days ago. you have to really question whether or not this has changed the fundamental reason that people have been bullish on the equity markets. i talked to a whole bunch of people today and very few people -- yes, they tell me it was a phrenetic day, but no one is characterizing to me, at least, that this was a panic sell-off day. so when you see numbers like 6 00 points, when you see 14,000, it seems like panic sell-off, but to me, people aren't talking about the huge fundamental shift. i think toyota highlights that.. we're in the thick of earnings.

88 of those corporations have revised upward for earnings. this is three times more than the number of companies that have revised down toward. i think you need to get perspective here. $150 billion of foreign capital went into the japanese equity market in 2013. a lot of that money came in at the tail end, particularly from retail investors and i'm hearing that that part is getting liquidated as part of the sell-off that's been going on for the last couple of days. >> just to get a little bit more into toyota, kaori, in items of, you know, clearly we've been looking at the yen cross rate a lot. it has got a little bit stronger after dipping down to 105. how much of a swing is that? >> well, the yen is really the linchpin, i think. especially in the situation we're in right now. and i'm glad you pointed out the numbers. it's all about the yen.

when toyota says today they are the largest manufacturer in japan that their profits are now going to be $2.4 trillion at the end of this fiscal year, which is a error for them, this tops the number they had before the lehman crisis. this is a 16-year high for the yen. they're going from $2.2 billion to $2.4 billion. 140 is coming from the forex. so everybody has to do with the currency. but right now, they seem fairley confident of the situation, the mild recovery in the u.s. is going to continue. let's take a listen to what they had to say at the press conference. >> what started from concerns about fed tapering has spread to the emerging markets and the financial markets are now very unstable. it's hard to tell how much of an impact this will have on a real economy or to judge whether this is a one off event or not. we're keeping a very close eye on the emerging markets.

>> and to answer your first part of the question, you know, why isn't the market responding to these record numbers from toyota? we would had a big recovery in pan stonic where we continue to hear the record recovery processes in many of these corporations. i think that's because it has been fully factored into the share price. i think medium to longer term for japan, i think the question is how much of this is going to impact the domestic economy? that is 8el 5% of the economy. if this smo gets in the way of the scenario that the government has been trying to implement, then we have a major problem. >> thank you so much for updating everything about asia, talking about the japanese markets in particular, you say the japanese markets in particular are needed to provide a bit of stability going what's going on in the end. we're not getting that right now. >> absolutely. the short-term focus is, of course, alternatings numbers coming through from japan are very good.

but when you look at the big headline stocks, we don't like toyota. we certainly didn't like nissan. the we're looking at where growth in value is across the markets. you've got the three lines there, the green line in europe, asian blue and the u.s. market in red. the only part of asia that's able to give value support is japan. and so the price selection is -- value is part of price, as well. the price corrections we're now seeing in markets like japan are going to be where markets close out that party, look at the price equity and enough is enough.

that's what you'll seated for those growths because there isn't enough outside of japan to give you support. we are looking for japan, it's not slavishly following a headline flow out of retail, momentum crazy in asia. we are going to need, however, the japanese corporates to continue to deliver the strengths that's come through the earnings report so far this season to put that floor in place. the floor in the u.s., the floor in europe, much, much easier to see with much more visibility. but in asia with that emerging market overhang, the japanese market needs to be the one to help steady the ship. >> talking about the europe and the stoxx 600, is there enough growth to sustain, to add more momentum to stocks? >> this issue, on that same chart, you can see we're at annualized growth somewhere

around 15%, 16% in terms of value. that is fine, that is a stage environment. you're hearing banks talk about giving dividends back. the opportunity is always going to be growth plus value. you can see on this chart showing where the trend is value is, we're just beginning to see tin decks climb right there. you can see on the green line, the fair value, we calculate that by adding up all the value, on the prices of the stocks to generate the index. that is just beginning on the flattening out. but for the most part, we're trading at a valuation. it doesn't always have to be about growth, growth, growth. when you've got risked priced

in, you're downsized very low here for companies reporting and we've got a lot of those opportunities out there looking at the retailers, for example, that would be where i have my focus this week. >> thank you so much. >> let's get back out to tokyo. two companies revised up their full year fiscal numbers. sachiko kishika from the nikkei has more for us. hi. >> hi, ross. mitsubishi reported a 26% jump in net profit to $3.5 billion for the april to december better. thanks to abe-nomics and the weaker yen, car related sales drove higher in asia why and the strong financial segment helped the top line. up 15% on the year to $2.3 billion. the second largest trading company in japan suffered from the falling commodity prices,

but strong sales from nonresource fields like foods, cars and machinery helped. mitsubishi & and itochu updated their earnings outlook for the full year, ending in march. itochu expected to increase 11% to $3 billion. and both companies announced plans to hike their dividends. in the meantime, the fourth largest semitomo posted a net profit, down 4% on the year. resource is like coal have put pressure on its bottom line. >> chinese markets continue to be shut for the lunar new year holiday. meanwhile, alternatings parade conditions in japan with mazda and takeda pharmaceuticals. on the economic front, we'll get

fourth quarter gdp numbers out in indonesia. and checking in on metal prices, they're not holding up, really. the metal is set to post the longest losing streak in 37 years. currently trading at 7,038. i'll giant bp has fallen given a weak performance in its shares and bonuses. it follows in the footsteps of exxon and mobile. both of which posted lackluster figure as the cost of extracting crude rises and oil prices, as we know, have been fairley stagnant. neal, thanks for that. we've spoken about this before, old empires struggling to find a

role. what do now investors want? >> of course we would. >> don't go out and try to pump more oil or explore more oil, just pullback and be more -- >> well, i think the two old empires, to use the phrase that i use. shell, in some respects, could be criticized for perhaps having been too ambitious. that's very technically challenging and very, very expensive. and it is pulling out of certain areas. the alaskan arctic. and very strategic pullbacks is making to give money back to shareholders. bp, though, is an entirely different case. unfortunately, all the analysis about bp has to come back to one simple fact that since april 2010, it's been playing with its

shoelaces tied together or its arm twisted behind its back. there is no certainty with bp as a company until we can get some kind of idea what the final bill is going to be. >> i thought things would be going bp's way, though, in that respect. >> bp has reached a stage where it was getting more confident. it started to go out to people where it felt were making fictitious claims. we're still in a situation where we do not yet mow the final scale of the build. nobody is entirely clear. that is bp's fundamental problem. >> one of the things they pulled out was cash flow is going to fall short of the dividend cover. seen a couple of analysts saying that we may only see to be able to achieve between 65% and 75% of their dividend coverage of

the next couple of years. this is more broadly across these oil names. is this an issue that you identify in terms of value in the stock? >> well, no. i think as long-term value stocks, they are still on trend to find and develop the market. we're fairley sure that demand for oil .oil products will continue to rise globally. as long-term value investments, i still think those companies represent a very, very good thread. >> and that's the biggest value for 2014. >> well, i always say prices goo go up, could go down, could stay much the same. to the last two years, they have been very -- in 2014, the likeliest change in the direction of oil prices is going

to be down if a very large volume of additional oil production from countries such as the united states, canada, brazil, kazakhstan, on the presumption that some or all of that comes to the market. so the problems that the oil companies are attributing to at the beginning, those problems are not going to go away in the short-term. >> some major markets are left quaking in their boots. thank you so much for being on the show. now sticking with the theme, one particular bright spot is neste oils. they reported a stronger than expected rise in its full year profits, operating profits in the fourth quarter rose to 164 million euros, up from 77 million euros a year earlier.

shares in neste oil topped the stoxx 6 of 00 this morning with shares up nearly 11% in the last seven days. >> that makes them an pretty good outperformer, doesn't it? >> yeah, it does. >> they've done quite well. still to come, is it a grocer or a tech firm? we'll speak to ricardo about its out recording earnings.

welcome back. assessments annette joins us from frankfurt. it was said while these banks have been busy deleveraging, their emerging market exposure is staying the same. do you think that's changed? what's your sense here? >> well, actually, i don't think for those banks their emerging market has exchange substantially. the most exposed banks among

other, santander, bbva, standard chartered and unicredit. during the eurozone crisis, essentially those banks who faired pretty well because they have 12% of their assets in emerging markets, but 25% of their revenues. but watch out for those stress tests to come. and if that exposure is stress test, that might be actually bad for those lenders. with that, back to you. >> thanks, annette. the question is how are they going to be stressed? >> yeah. uk online growth ocado posted a wide honor loss, but says its positioned to post its first ever profit for 2014. >> this is a company that's really divided opinion in the city because it came to the market in 2010 is. it missed analyst expectations.

it had to go back to the market to raise money. but then look at last career. shares up nearly 400% as shareholders bet that the company is actually ahead of the game when it comes to online retail. i spoke to the chief executive yesterday and asked him whether profits really mattered or whether the technology was all that counted. >> we did a great job last year and we turned our new facility online which is the first big thing for us and we focused on carrying out -- up in a very difficult market. obviously, the deal with morrison, is something we're very happy to do, a first customer of our intellectual property platform. is it a vindication? yes, of what we do, yes. but i don't think we see it as more than that. we always planned to monetize our intellectual property. obviously with the likes of a customer working very hard,

we've launched or business in january this year and we're now working with him to scale it up. >> to collide black of shore capital said it effectively meant that they were admitting defeat, it wasn't possible to have a single propry tear online growth there. has mr. black missed the point? you know, collide is obviously rewriting history. if you look back at our business plan, we talked about monetizing ip back in 2000, 2001. we talked about monetizing ip in our perspective in 2010 when we listed the business. so to suggest when we start creating revenues in 2013 with a change of business direction, it's just, frankly, incorrect. >> so some of your former colleagues at goldman, analysts there are suggesting that ocado could have about 15 billion of sales by 2030 and about 24 warehouses. is that likely? >> look, i think it's very difficult to say. you have to first say what are we referring to?

ocado as a customer business or ocado as an ip and the logistical services business. are we talking about the sheds we're going to build together with morrison in that particular contract and future contracts or just the sheds that we're going to build for ocado.com. are we talking about the uk or just about the globe? i smile because i have no right answer to this question. we currently see a niche coming. we see no reason why we can't have a growing market share and we think we're in the mid to high teens in terms of market share today. so there is a need for more share. the lead share has 150 million to 1 billion in sales. if we build a business the size of the mid market players today, we'll need a dozen plus in the uk. >> essentially, investors are very keen to see another deal like morrison. that was a massive deal for them. and as tim was saying there, the question is is this, ricardo, a

single online grocer or a technology company that will be able to sell its ip to lots of different grocers around the world? >> much higher pe. >> much higher pe. no need for profits. >> no. it would be a mistake if they make a profit this year and they want to be a tech company. plenty more still to come. >> it wasn't exactly a warm welcome for janet yellen on her first day as u.s. fed chair. we'll talk about that after the break. >> second half of "worldwide exchange" coming up.

welcome 20 "worldwide exchange." i'm julia chat erly. >> and i'm ross westgate. >> back to profit in the fourth quarter for ubs thanks to a tax benefit. although they're still worried about the current market turmoil. >> the volatility out there is quite huge. a lot of unresolved matters. you see was going on in the last few days in emerging markets and

overall. i think making prediction about stabilization of this environment is quite hard. >> bp, upped the amount of cash it's putting aside to deal with the gulf of mexico spill. and investors have an appetite for yum brands. the shares of the fast food giet jump after expected earnings. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. let's take a look at how the markets are fairing ahead of the u.s. open. up to 2% or more losses in trading in yesterday's session. we have green across the board today. we are seeing the dow futures indicating higher by around 40

points so far in trading this morning. we've got the nasdaq indicating higher by around 10 points and the s&p 500 gains of around 5.5 points. so green across the board, a welcome change. what we're seeing authorities at european markets are concerned, we've got the ftse 100 relatively unchanged. so lessening some of the losses that we saw in earlier trading today. we've got the german markets down by around 0.7%. the cac 40 actually just dipping into positive territory here, relatively unchanged and the ftse mib up around 0.1%. all changed again when we look at the picture that we got from the asian markets. we had a couple more of these open yesterday. we've got the hang seng losing around 3%. a bit of catch up after the new year china holiday. we had the nikkei 225 already in correction territory, down a further 4.2% in the trading session overnight, too.

ross, a bit of a mixed picture. >> the vix volatility index has also benefited. up 21.44. first time we've been over 20 since october. so up at a seven-month high, as well, for the vix. and very high volumes, as well. bond markets, take a look at this. u.s. treasury yields at -- sorry, i thought we were going to do bond markets. bond yields, down 2.6%. thank you very much. that's the lowest we've been since the beginning of november. gilt yields did spike up over here. we saw construction pmi come in stronger than expected in the uk today, as well. a very strong number, indeed. for that, we have a bank of england meeting later. sterling just appreciated against the dollar. it's outperforming up to 1.6333. that 0.5% number posted higher.

the aussie/dollar has bounced off its 3 year year back up to 0.8895. dollar/yen, 101.37. 100.77 was the low we hit on monday. euro/dollar, just around the 1.35 mark. 1.3479 on friday. jules. >> thank you very much for that. now let's get straight to our next guest, matthew beesley from hinderson global investors joining us now. good to have you on the show. do you think the correction is over or do you think we still have more room to go here? >> i think it's hard to tell because, quite simply, we're in a period where markets have moved from being the glass half full, the data, to being the world of the class half empty. we knew some of the problems underlying the fragility of this recovery are long duration in nature.

there's not enough in there, i don't think, to change people's sentiment, swing it around and focus purely on corporate earnings and away from these challenge necessary emerging markets. >> isn't it decent because expectations have been lowered significantly so that we manage to get half of the s&p 500 beating in terms of top line in particular? but actually the lack of upgrades to forward looking earnings that is not underpinning this equity market right now and allowing us to recover. >> yeah. a lot of people talk about how last year was driven by multiple expansion, driven by the expectation that corporate profits would rise. for markets to go higher from here, we need to see those estimates, the expectations for corporate profits to indeed rise. the challenge is as we sit here in january is that your typical corporate is going to be pretty conservative in the way they view the world. we speak to many businesses as part of our bottom line process and all the management that we interview all telling us that the outlook for this year is better than it was last year, how there are threats and challenges to that outlook and, therefore, with 11 months of the

year ahead of them, corporate management are setting expectations for profitability growth for this year are being conservative. >> you can have structural issues in emerging markets. is that what we see in 2014 once we get through this period of a correction given, as ross made the point earlier, that we've gone a long way over the last year? >> three years. >> three years. >> it's absolutely right. there are some businesses that will be better placed as we look forward than last year whereas last year lots of stocks were beaten up, beaten down because of top down concerns about the macro, whereas this year we are looking forward to a world where that difficult that changed the macro are largely behind us. it is the fragility of the market that is up for debate. >> let's talk about europe. potentially more action from the

ecb this week? does that matter or is this value irrespective of what the ecb do? >> no. i think it's an interesting place to be invested right now. after four or on five years of dramatic economic malaise, aggressive cost cutting with the sharpest of the corporate across europe. you've now lost opportunity to a meaningful bottom line growth. we're going to be concerned about inflation, concerned about growth, i think europe is where there's lots of room for that stock specific action that you allude to. >> you're staying with us, so we'll come back to you on that point. for now, let's give you a look at what's going on today's agenda in the u.s. forecast dropped 1.8%. we've got the richmond fed president jeffrey lacker and chicago fed president charles evans speaking about monetary policy. we've got adm, color rocks, cme, delphi, mcgraw-hill, michael

kors, siriux xm before the opening bell. after the bell, we'll hear from aflac, buffalo wild wings. yum brands fourth quarter beats profited. the president of taco bell and pizza hut says it expecting 24% growth this year. same-sale stores in china were down 2% in the u.s., 4% in china. the senate judiciary committee holds a hearing on the massive data breach of target today at 10:15 a.m. eastern. hackers stole debit and credit card information up to 110 million customers during the holiday shopping season. the target ceo is testifying today. he says the company is speeding

up a $100 million program to implication the use of chip smard cards. he says the goal is to have the technology in place by early next year. and disney plans to lay off several hundred people from its interactive unit. it will start making the cuts after it reports figures tomorrow. disney it interactive has around 3,000 employees. apple is buying up lots of bandwidth, raising eyebrows among analysts. "the wall street journal" reports speculation is the company may be laying the groundwork for an upgraded video delivery system. jobs told him that he had cracked the code on a tv interface that works seamlessly with other apple products. on the company's earnings call

last week tim cook said apple is on track to break into new categories this year. then he talked about a new television and video service. and it's happy birthday facebook, believe it or not. the social media giant is 10 years old today. but is it all downhill from here? is facebook over? surely not. you look at what's going on with mobile it just started. is poking passe? i'm not sure, whoever put that in, that they quite understand what they've written. if you want to join the conversation here on "worldwide exchange," get in touch with us, worldwide@cnbc.com, tweet @cnbcwex or direct to us @rosswestgate or @jchatterley. you know a pick and a poke. a poke is a bag. >> really? >> you know the phrase. >> i actually don't. >> it's a scottish frame.

poke is the scottish word for bag. >> okay. on that note, we're going to move on. >> i wanted to be very clear about that. ubs brings back profit thanks largely to tax boots. we'll cross to uric after the break. [ male announcer ] the new new york is open. open to innovation. open to ambition. open to bold ideas. that's why new york has a new plan -- dozens of tax free zones all across the state. move here, expand here, or start a new business here and pay no taxes for ten years... we're new york. if there's something that creates more jobs, and grows more businesses... we're open to it. start a tax-free business at startup-ny.com.

u.s. futures indicating a hire open after asia's sell-off. ubs is back in the black but as warned of bumpy signs ahead. and yum brands serves up an earnings beat and plays down china's slowdown. right. futures right now in the u.s. after another poor day yesterday, suggest we might get a bounce on the stock. the s&p currently up 5 point. the dough dow up 36. the nasdaq is around 7 points higher. we've had -- it was the worst day for the dow since june the 20th. the worst start to february for the dow since 1982. the worst start on record for the nasdaq. that goes back to 1973. the worst start for the s&p.

since 1933. that takes us back just a little bit. i remember that. european equities, by contrast, are okay. pretty flat, really. just down 0.8% for the xetra dax. elsewhere, just down around 0.1% after that fall we had in japan overnight. ubs is still in focus, as well today. shares jumping on the open after the swiss bank posted a bigger than expected fourth quarter profit. driven in part by a better performance of the lenders investment bank. carolin has been speaking to the ceo and joins us from zurich. a rather outperformer today, carolin, ubs is. >> yes, absolutely. shares definitely getting the thumbs up today. if you look at the underperformance of equity markets in general today, that is a pretty good outperformance.

it's the investment banking business, especially revenues in the advisory business and in the equity capital business. fixed income didn't do so well, but no one expected that going forward. secondly, we've got a very strong capital position and a very strong balance sheet. the company hiked its dividend more than expected. that is a whooping 12.8%. that's almost 100 basis points more than what an mists were expecting. despite that, a very good performance in the fourth quarter. when i spoke to the ceo, he was still fairley cautious about the outlook for 2014. obviously, it's clouded by a lot of events in the market. the volatility out there is quite huge. a lot of unresolved matters. you see what's going on in the last few days in emerging markets and overall opinion i think making prediction about

stabilization of this environment is quite hard. so we are now counting on markets to address our targets. we are working very hard on that and clients' confidence will come back only over time. >> let's talk more about ubs's results in the fourth quarter w. dick becker, thank you so much for joining us today. what do you make of the numbers? >> i think the numbers themselves don't really blow out the lights. what is probably the big news here is that they can return much faster than what was expected after q3 with a capital returns and i think that the investment banking business is doing okay. >> now, going into the numbers, this is exactly something that you were quite cautious about. you said that investors were quite optimistic and the fact that capital returns not looking too great resolved these ongoing

discussions about the leverage ratio, about the operational risk out. what is the news today, are you retracting some of those concerns? >> yes, i probably would have to. the picture looked like this in november when they presented their third quarter results. it looked unlikely that ubs would be able to increase the dividend now and it certainly looked almost impossible that they could increase the amount for shareholders in 2014 and this also looks much more likely today. so i have to walk back from those views and -- but overall, we still need to stay with our feet on the ground. still only less than 8% roe and the need to improve much more to deserve the valuation that they currently have. >> the issue i have with ubs is it wants to be a dedicated wealth manager. but if you look at the results in the fourth quarter, they're not driven by the investment bank. if you look at the wealth management business, the gross

margin is stuck at 85 basis points. it's 10 basis points away from the lower end of the target. >> i think ubs will be successful. i think the worst management profits will never go back to where they came from before the the crisis. this was including the bank and this was with profit margins from asia and emerging markets. this time for not coming back. i think the bank secretly business will be going away and the margins in asia are probably like 20 basis points below where they in europe and rising significant off asia and emerging markets. i think this is here to stay. >> all right. how are the numbers on thursday going to stack up to what ubs reported? >> i think the cross rates should be a profitable one. i believe we should see positive

new net money inflows. i believe credit suisse l a hopefully even better result in investment banking because they're a big player in equities and they should probably also have benefited from the trenton advisory. and a little bit more in fixed income than ubs, of course. >> but then there still those litigation issues with regard to u.s. mortgages and u.s. tax, right? that's an overhand for the shares, wouldn't it? >> for ubs? >> for credit suisse. >> we will see how far they go there. they believe the burden is not so much as everybody believes. >> thanks so much. guys, back over to you in london. >> thanks so much, carolin. still to come on the show, ross, do you hear him every day saying i love my job? >> i do. >> i love my job. >> i have said that on many occasions. >> well, we're going to be finding out just what makes a good leader. the different between leadership and management. >> lying in the quality of a

firm's leadership. i don't tend to lead anybody, though. meanwhile, we'll get into that. let's show you where we stand with european stocks. we're up at about the best levels of the session so far. 7/3. more to come. earn double hilton honors points with the 2x points package and be one step closer to a weekend break. doubletree by hilton. where the little things mean everything. doubletree by hilton. some brokerage firms are but way too many aren't. why? because selling their funds makes them more money. which makes you wonder. isn't that a conflict? search "proprietary mutual funds". yikes!! then go to e*trade. we've got over 8,000 mutual funds and not one of them has our name on it. we're in the business of finding the right investments for you. e*trade. less for us, more for you. the fund's prospectus contains its investment objectives, risks, charges, expenses and other important information and should be read and considered carefully before investing. for a current prospectus visit www.etrade.com/mutualfunds.

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welcome back to "worldwide exchange." now, do you go home every day saying i love my job? our next guest says it's all about placing a successful leader at the top of the chain. just what makes a great leader? simon joins us now. you make a distinction between great leaders and great managers. i kind of feel like you're splitting hairs. what's the difference? >> no one wakes up in the morning want to go be managed. we want to be led. as human being, we're social animals. >> explain the difference between being led and managed. >> when were led, it's somebody who gives us a sense of belonging and asks us to contribute to something bigger than ourselves. somebody who manages us is somebody who looks over our numbers and makes sure we complete our tasks. it's not fulfilling when somebody is capitally looking

over us and not giving us some sense of responsibility or accountability. >> so the success -- the point of being a good ceo, therefore, is to the former. of course, companies are full of managers. >> companies are largely full of managers, yes. and this is win of the reasons -- >> leadership is a skill like any other. some practice and learn and learn. some have a natural capacity for it. many of the very good leaders that we've seen throughout history usually had some sort of experience that there was some sort of transition where they realized what they thought would work won't work. again, managers are looking to sort of get some sort of goal done in the short-term. leaders are looking to advance something for the long-term. >> the name of your book is "leaders eat last" and the analogy was with the u.s. marines where the most senior go and get dinner last. >> that's exactly right.

>> if we take a look at the case of the barclay's ceo, he's decided not to take a bonus, is that leadership. >> action? it could be. having a conversation with a marine general, i asked what makes the marines so wonderful? and he said, officers eat last. he's entirely right. if you visit any marine chow hall anywhere in the world, you'll see the marines line up in order. the most junior person always eats first and the most senior person eats last. it's not in any rule book. they don't view leadership as a rank, they view it as a responsibility. so when the ceo sort of takes no bonus, you know, in isolation, it might mean nothing, it might just be a pr thing, it might be who knows what. but if it's a regular occurrence, this ceo when there's danger, whether there's a threat to the people that they would sort of suffer, sacrifice for the good of their people,

absolutely. >> briefly, who would you say right now in the last ten years has been a great ceo leader? >> we all talk about steve jobs. there's some truth he gave people something to belong to. sadly, there are fewer and fewer great leaders today than there used to be. most ceos seem more responsive to wall street demands than they are to -- >> and the leaders, i find leadership a problem. >> well, i mean, it's kind of weak today. >> no statesman. >> good to see you. thanks for that. author of "leaders eat last." >> matthew, one of their standout points in your note is there's a lot worse to come in emerging markets. is that in 2014, you're talking? >> yes. i think that's right. when you look at emerging markets right now, u.s. tapering led credit withdraw, higher

rates, credit easying cycle. it takes a while to feed through to the real economy. >> does it influence what the fed do? >> the governor of the u.s. federal reserve cares about one thing and one thing only. that's the economy. you has to just get on with it. >> matthew beesley, thanks for that. >> a man who always eats last. after a big sell-off yesterday, futures suggest we might get a sell-off this morning. right now, the s&p is called up 5 and the dow around 33. we'll be right back. ♪ [ cellphones beeping ] ♪ [ cellphone rings ] hello? [ male announcer ] over 12,000 financial advisors. good, good. good. over $700 billion dollars in assets under care. let me just put this away. [ male announcer ] how did edward jones get so big? could you teach our kids that trick? [ male announcer ] by not acting that way. ok, last quarter... [ male announcer ] it's how edward jones

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welcome to "worldwide exchange." i'm julia chatterley. >> and i'm ross westgate. >> the sell-off intensifies, but futures are indicating an open in the green. ubs boosts profits thanks to a tax benefit. >> the volatility out there is quite huge. a lot of unresolved matters. you see what's going on in the last few days in emerging markets and overall. i just think that making prediction about stabilization of this environment is quite hard. >> bp, the latest firm to suffer from refining weakness. it's posted lower profits in the

fourth quarter. the firm ups the amount of cash it's putting aside to deal with the gulf of mexico sales. and investors have an appetite for yum brands. shares of the fast food giant jump after better-than-expected earnings. it says there's been no bird flu hit to sales in china. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. if you're just tuning in, thanks for joining us on the show. let me give you a look at how the markets are faring in the open today. after more than 2% of losses yesterday, the worst since june 20th of the last year for the dow and the s&p, we are seeing green across the board. dow futures indicating higher by around 30 points. we've got the nasdaq higher right now by around 5.5 points. and for the s&p 500, right now indicating higher by around 4 points, too. and that's the trend we're seeing as far as the european

markets are concerned. pretty much red across the board. we've got the ftse 100 now down by around 0.3% today. we've got the german markets off by just shy of 1%. the french markets down 0.3%. and the ftse mib down, too, around 0.3%. so losing ground over the last 30 minutes or so. ross. >> just turning around. meanwhile, one top market watcher says markets could be in for an ugly correction. dennis gartman ace has told cnbc the s&p 500 could fall 15% from the highs that were reached last week. >> you can't say a bear market has started until you've broken the trend lines, until you've rallied back. i'm not willing to say this is a bear market at all. i think you're going to have a very severe, very substantive and ugly correction that will

probably make a lot of people wail and mash their teeth before it's done. >> sir richardson joins us now. it's possible, isn't it? we've come a pretty long way and a very straight loonk line for a long time. >> absolutely. in the last two, three years, every time we've had that sort of correction, we've had the authorities, whether it be in europe or the fed stepping in and doing whatever it takes. and this time around, we have the fed in the december minutes quite clearly. they've been very consistent now. our impression is to not do 10 million pem meeting now, something has to go wrong. >> yeah. they're not going to worry, we had this not to worry about equity asset prices. look, they've to the stopped tapering.

ten-year yields back down to 2.6%. they will be happy with that and there's no real inflationary figures yet. >> it's not the inflationary concerns that the fed would be worried about in the markets participants to worry about. it could be deflation concerns. what we've seen in every single cycle with qe is bond yields start to come down once the fed stops because the market is shifting assets back to defensive assets. we know the global economy, the u.s. economy is facing headwinds. we're get to go a very important junction in the bigger picture whereby last year the markets had performed fundamentals. earnings growth of, say, 6% in the u.s., and markets up 30%. now we've come under a bit of pressure and the fed have told us they don't want to move away from the tapering. they say we need to do something

else here or they say no, we're happy to do something else. >> what's the point there, then? if they do decide to pull back on some of the tapering, that's a massive figure and the markets are very concerned about the recovery. do the markets rally on that or sell off from that? >> that's a interesting juncture. our view is that the market is overvalued at the end of the laugh year and we're now beginning to get a full things cropping up which is questioning. >> everybody said we needed -- people were saying this for a long time, we need to clear out, we need to clear out. in the greater scheme of life -- >> to us, if you had sat there living through a 15% clear out, you could be a bit worried. ernings growth isn't come through, then the valuation is pretty rich here. corporate profit margins are at

record highs. valuations are keeping richer. our view is that there's a lot of headwinds out there and selling begets a bit more selling. supports get taken out. living through a correction might be now less comfortable. >> speaking of sell-off, the nikkei closed down over 4% on the back of weaker than expected u.s. data. this is the fourth day of lows for the japanese market and the largest the percentage decline since june. kaori enjoegy joins us for more. a bit of pullback here to be expected? >> he think the size of the pullback has caught most people by surprise. but i wouldn't characterize it as a panic, even more the market is down 14% on the year. as you pointed out, now japan is the worst performer globally in terms of equity markets. last year, it was the best

prmper and by a wide margin because it was up 57%. i think right now people are concerned about the possibility of a slowdown in the u.s. concerned, of course, about the ripple effect of a possible slowdown in emerging markets, particularly for corporate japan, which is counting on that demand base to fuel profitability over the longer term. so i think most people are bracing. trading volume was very, very heavy. the earnings have been relatively strong. that might be the linchpin, over, over the short to mead why term. >> kaori, great to talk to you. still to come, the bull's eye is on target as congress gets set to grill executives about the latest breach of the

retailer. what they may be selling is lawmakers, straight ahead. [ male announcer ] first the cookie at check-in... then a little time to kick back. earn double hilton honors points with the 2x points package and be one step closer to a weekend break. doubletree by hilton. where the little things mean everything. afghanistan, in 2009. orbiting the moon in 1971. [ male announcer ] once it's earned, usaa auto insurance

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welcome back to "worldwide exchange." these are your headlines. u.s. futures indicating a higher open. european markets still trade

lower after asia's sell-off. ubs is back in the black, but bumpy markets are ahead. and yum brands serves up earnings and faces down china's new fears. congress gets its first chance today to grill target executives over the massive data breach that affected millions of customers during the holiday hopping seen. for more, kayla touchy is hesch joining us from the states. >> the senate holds a hearing today on that breach at naeemus marcus and other u.s. retailers. it's expected that that breach affected up to eight retailers in the u.s. and affected up to 1 million customers. naeem yam marcus says more than a million commerce may have had

their information compromised. john mulligan has written an op-ed piece in the hill newspaper pep says the company is speeding up a $1 left lane million program to enable the use of chip enabled smart cards. those contain tien noo chips that encrypt data. the goal is to have that technology in place by early next year, six months ahead of previous plans. he says requiring the use of four digit pin numbers to complete that purchase price an extra layer of security for consumers. he says we know the attack created significant concerns for millions of customers. we will learn from this incident and we will work to make target and the wider business community more secure in the future. the u.s. secret service, meanwhile, is urging congress to do more to prevent the types of cyber steps that have hit target and other major retailers.

the agency is the lead investigator on the case but congress has been wrestling for years. there's currently no u.s. standard to regulate how and when businesses must advise customers and federal authorities. of course, it was weeks after that target data breach that customers even became aware from a blogger that that breach had even taken place. now washington wants to figure out how can we fix this in the future. >> thanks for that. good to see you, kayla. have a good day. >> thank you. yum brands beat fourth quarter forecasts, but revenues came up just shy of estimates. it still expects 20 pergs earnings growth in 2014 and a resurgean of china is not hurting sales in its top markets. joining us on the phone from chicago is r.j., global director of equity research and consumer restaurants and retail analysts at morning star. r.j., investors seem pretty convinced by the numbers, but what do you think about their

outlook for china? if we look at what tyson foot food said last week, there were real concern about a slowdown for profits. >> i think part of the story, we're coming off the comparisons with the difficult year they had in china, particularly for the kfc brand. i think it will be a bounce back, but i think the pizza hut/casual dining brand which is more for that middle income consumer, we could see some pressure there. we've seen comparable store sales come down in the last couple of months. that could be some difficulties in that brand, but i think you'll see that kfc brand stabilize in 2014. >> mcdonalcdonald's is going toh end coffee drinks. what is the winning strategy here, do you think? i think having an expanded beverage platform, period, is a smart move. that's an inherently higher margin product.

i think taco bell has a lot of opportunity there because they're starting with a lower bid. they have a lot of opportunity to fill in some of the day part, some of the afternoon and other parts of the day with some of those beverages. i expect that to be a more global phenomenon when it's all said and done. >> what do you want to hear from the company today on the calls? >> i want to hear the company has been able to sustain its turn around in china. comps have reached positive territory. whether the company is going to continue that is for investor sentiment. the other thing is whether or not the company expects the profitability to remain where it is in china. the company had resorted to a lot of discounting to bring people back into the fold. they also had been investing in a lot of other parts of the infrastructure and china making sure the supply chain is where it needs to be. and i think that's important to make sure that there's still

targeting 40% operating growth in china. i think that will be key. >> absolutely. r.j., great to chat with you, h.j. hottovy. now, the snowball is just beginning for the u.s. as forecasters warn a series of storms will punch much of the country over the next week. punxsutawney phil looks to be right. jennifer, tell us more. >> oh, yes. we are talking about a big mess out there. anywhere you're looking behind me in blue, winter weather alerts and warnings out there for nearly two dozen states. a lot of this still is targeting to kick off right now. we're showing you on the rarity what is happening. across parts of the plains, oklahoma city as well as wichita. blues, purple is the wintry mix. all this has to go somewhere and it's going to be traversing parts of the midwest as well as eventually hitting parts of the northeast.

once again to give you an idea of what we're talking about, we're going to be looking at the heavier snowfall. the wintry mix and purple icy conditions set up for the midwest, this is going to be messy travel. once again, new york, we're going to be looking at more snow, as well, as well as some of that wintry mix. we're going to see that moving into new england. as we talk about these totals, we're going to give you 8 to 12 inches of snowfall. this is anywhere between 20 to 30 meters of snowfall. the heaviest part is in the dark purple. chicago, you'll get roughly around 15 centimeters of snowfall. nothing in comparison to what you've seen over the past couple of weeks. again, we're talking 8 to 12 inches. again, we're talking nearly 20 to 30 sent meters of snowfall. this is not going to be done until tomorrow. it looks like in the late afternoon, so a lot of problems will be setting up to have for

travelers as well as for motorists out there. guys, back over to you. >> thanks, guys. facebook, believe it or not, is 10 today. after a decade of outstanding growth, can the social media trailblazer stay on top? we'll talk about that right after this. [ male announcer ] the new new york is open. open to innovation. open to ambition. open to bold ideas. that's why new york has a new plan -- dozens of tax free zones all across the state.

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welcome back to the show. let's give you a quick look at how the u.s. futures are trading, futures trading around 13 points higher for the dow, nasdaq higher around 3 points and the s&p 500 higher by just over 2 points, too. losing a bit of a momentum as we head towards the open today.

facebook is celebrating a major milestone and it's 10 years old today that mark zuckerberg launched the social networking site from his harvard dorm room. banks to surge in mobile ads. the senior editor joins us now. bridget, as we pointed out there, they're managing to monetize mobile. but what next? how does facebook continue the momentum here? the facebook of today is a lot different than it was from years ago. as you have a younger generation using it, you're finding that they have to be more than just something where you connect to friends, but rather a place you

can get all your information and make money from there. >> i love the discussion about how facebook is no longer cool because older generations are using it to a greater extent. yet you look at the advertising spending and i think 85% of it, according to some surveys is done by the over 25. this is great for them, isn't it? not cool, it's great. >> you know, they're noticing that they're getting more user engagement across the board. in their latest earnings reports, more people are liking and spending more time on facebook. that's important to them. they had a few mobile adventures that didn't work out so well. remember the facebook home or the facebook phone. now having facebook take over your phone doesn't work, so maybe we'll have a bunch of different apps. >> yeah, because what one

generation of teenagers doesn't want to do what the last generation of teenagers did and they want to create their own infrastructure to communicate on. how does facebook make its an everyday utility must use vehicle? >> well, first off, they bought instagram, so that hits on that target of, like, all right, a younger generation wants to make communicate with just photos. that's why instagram is very popular. but they just came out with a brand new app called paper. that's more of a news reading app where it pulls in a bunch of different news sources and makes it want to check it in a day. having it be that utility, i'm left out and i don't know what is going on today unless i check facebook. now i want to check paper if perhaps facebook is getting too annoying for you. they're hitting different angles. >> thanks so much for joining us. >> thank you. >> we've been asking a number of questions about facebook today.

>> we have. we asked you whether facebook was over. joanne tweeted to say the future is definitely bright for the site. but others say facebook is just yesterday's news. >> i was so ahead of the game by not -- >> by just not joining in the first place? >> exactly. got to see where the future is. >> dallas fed president richard fisher says the market sell-off doesn't take his support from the central bank tapering his bond buying program. in a cnbc interview, fisher says the fed is focused on real economic performance and what happened in the bond markets. he says as long as the decline doesn't destabilize the financial system, he's happy with the fed's current path. how long does that last? >> how long does the decline -- >> there have to be -- >> it doesn't matter. they're happy, aren't they? >> i think if you look at the december taper, the fed has been delighted as they took their first baby step, equity markets

went up, bond yields were steady in the upper part of 2.5% to 3% range. what wasn't there to like? >> is it the perfect storm? we have emerging markets, tapering, we've got some weaker data in the u.s. this is a perfect storm right now, plus valuatiovaluations. >> it's a perfect storm. a lot of what went in the crisis and massive expansion of central bank balancing sheets. not addressing the online problem with head wins. maybe we've pushed the envelope to the degree that all of the inflation people were looking for were called into asset prices. the central bank around the world recognized this. it's not just fed reducing qe. they're not going to accumulate reserves and the economies are still subvelocity. so this is a real problem. >> we have to go. thank you for joining us.

>> "squawk box" coming up next. we hope you have a profitable day. good-bye.

good morning and welcome to "squawk box." the global markets, they are selling off in japan. the nikkei sliding 4% overnight. lowest close since last october. this news is not good. u.s. futures trying to rebound this morning after more than a 300 point tumble for the dow on monday. now yum brands sticking with its profit forecasts despite worries about bird flu in china. it's tuesday, february 4th, 2014 and "squawk box" begins right now. good morning, everybody. welcome to "squawk box" here on cnbc.

i'm becky quick along with andrew ross sorkin and scott wapner. joe is off today. the nikkei getting slammed overnight as the yen moves higher. stocks in japan following wall street's lead after the major averages dipped more than 2% here. the nikkei dropping to a four-month low, losing 4.2% overnight. the 600-point drop is part of a four-day losing streak. the index slipped into correction territory just a day earlier after yesterday's decline. but keep this sell-off in perspective. the nikkei added 57% in 2013. still, you're talking about a 14 pins drop since the beginning of the year and that is catching some attention. take a quick look at the rest of the asian markets. the hang seng tumbling on its first day of trading after the chinese new year. this is the first chance it was getting to go ahead and react to what's happening around the globe with markets. take a look at what's been happening with the dollar right now. at this point, dollar up against the