hello. you're watching "worldwide exchange" been i'm ross westgate. >> and i'm julia chatterley. >> comcast and time warner set to reveal a $44 billion takeover that could rackel the regulators a bit. a mixed picture for banks, shares in lloyd's and bp paribas both drop. and investors don't like the taste of nestle.

the food group warning it could miss targets again this year we'll be speaking to the ceo in just over an hour. and italy's prime minister fights for his political future. a challenge from within his own party destabilizing the country's coalition government. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. >> and warm welcome to the show. we'll be out with jules in rome in just a few seconds. first of all, let's get the latest on the ia's incident every national report, the international energy agency. there's bitterly cold weather pushed up demand for heating fuels. total oecd industry stocks plummeted by a further 66 million barrel necessary december. global supplies are falling to 92.1 million barrels a day on

lower nonopec output in january. supply from opec rose marginally in january. growth rebounded the second half of 2013, but non-oecd countries still accounted for more than 90% of global growth of 1.2 million barrels a day as a whole. that's the latest on the ia report. right now, though, in italy, the prime minister has called on any challenges openly if they want to replace him. speaking in parliament yesterday arch, he reacted to two suggestions that democratic party leader and coalition partner renzi was looking to displace him as prime minister. >> you don't step down because of hearsay because of power plays and behind the scene activity. i think that respect for institutions means that everyone

has to say explicitly what they want to do. especially whoever wants to take my place must tell me what they intend to do. >> italy's deputy prime minister, meanwhile, has placed his support for prime minister letta as long as his coalition government continues to back him. letta is clinging on to power amid speculation that he will soon be replaced by rhenzi. jules is with us in rome. why would mr. rhenzi want to take over at this particular juncture? it looks like a poisoned chalice. >> i couldn't agree more. it would make him the third nondemocraticly elected prime minister of this country and basically he would be in the same situation prime minister letta finds himself in right now, unable to enact the laws that this country needs. i think you're right, now he

finds himself in a very uncomfortable position. everybody here that i've spoken to is 60% to 70% sure that what we're going to see is a baton passing, a relay race between prime minister letta and rhenzi as they hand over the prime minister's cap right now. but i agree with you, i think rhenzi is in a very uncomfortable position. he has to play this carefully. he's been very tight lipped over the last 48 hours. he set the deal, set the record straight today and that's now what we're waiting for. we're waiting for a stomach of the democratic party to decide just where we go from here. prime minister letta has basically thrown down the gauntlet to renzi and said, look, if you want to run the country, come out and see it. we have to see now if renzi will step up to the place. but i agree with you, poisoned chalice is a great phrase for

the situation right now. >> i'm just wondering, jules, the way that you've made a snap decision to get on the plane yesterday and leave me and go to rome, i'm just wondering what the best thing might be to pass the electoral law and then have a snap election. >> i don't think anybody in this country wants an election. but you mentioned the point here. what needs to happen first is passing the electoral reform. right now, if we have election, the same thing will happen again. so my question here is if renzi steps up and says, fine, i'll lead the party, will he makes it contingent on passing that reform and passing on early elections. someone would have to happen very quickly. this is italy and i don't think

we could get electoral reform happening that quickly. i think many analysts out there right now saying what's most likely is letta stays on and we see some kind of coalition reruffle. but i don't think renzi would want to be involved in that right now, either. >> no. we'll see what happens. it's a beautiful city. it's not raining there, right? it doesn't look like it's raining. >> unlike the last three times i've been in rome, ross, it's absolutely beautiful. it's sunny. i'm used to getting drowned. but yes, i'm in the right country today. >> if you stay there long enough, england will be turning up to play italy in the last day of the five, six nations. see if you can stay out there until then. >> i think we would rather have a decision in the next 24 to 48 hours. thanks, ross. >> i know. there are worse places. now, the other big story we're following today, cnbc's david faber reporting that

comcast has reached a deal to buy time warner cable for around $159 a share or $44 billion in stock. the deal is expected to be announced this morning. it would create the big aeft cable provider with more than 36 million subscribers and will face a tough review by the fcc. comcast previously held talks. charter's latest offer for $139 a share was rejected. supporters said comcast may be willing to make rescissions to appease u.s. regulators. comcast cable is the acquiree, up 16%. earlier, stephane pa drady caught up with the advertising firm lezi and asked him his thoughts on the deal.

>> concentration is the name of the game nowadays. we are showing this with the merger with omnicom. i think what comcast is doing is sensible. and is right. and when you look at the size of the platform, the size of the media onus today, i think the trend will not stop in the next few years. it will continue and that is a necessity for the new world. >> for your business, is it a good thing, for the advertising market? >> you know, we have to adapt to this new world. i think that concentration has some merit. it has also some drawbacks. when you look at the bottom line, at the end of the day, it is extremely positive that we see some great layers in this world and i think it is the sense of the history.

>> that was morris levy. the comcast ceo, brian roberts, and time warner cable's ceo rob marcus will be joining david faber in a first on cnbc interview at 7:00 a.m. eastern, that's 1:00 cet mid day if you're gmt. that's all to come. right now, we're an hour and eight minutes into the trading day here in europe. we've snapped the winning session, as you can see. decliners out-pating advancers by 8/2 on the dow jones stoxx 600. the u.s. market snapping their up day streak. this morning, the ftse 100 down 0.75%. xetra dax down 0.3%. can iraq 40 off 0.4 had% and the ftse mib is off about 111%. checking in on the bond markets, treasury yields, 2.75%.

just off the slightly elevated levels. 2.72% is where we were before the jobs report last week and we went down 2.66% on the yield. italian yields, just worth pointing out, yesterday we hit 3.66% on the ten-year yields, the lowest since april 2006. we have this talk about mr. letta and renzi, a big upward push in gilts yesterday. and a suggestion, a hint yields might go up next year. sterling moving a lot higher, as well, against the dollar. back over 1.66. still there, 1.6637. not far away from the three-year high which we hit about a month or so ago. the aussie/dollar has fallen back below 90. jobless data came in weaker than

expected. dollar/yen, a little weaker against the yen this morning. and euro/dollar, bag over 1.3622. pushed down yesterday after it was suggested well, yeah, it's possible, it's feasible we might look at cutting overnight rates into negative territory. that's where we stand in european trade. let's bring you up to date on the asian markets. no better lady than sixuan. >> thank you, ross. the shanghai composite slipped 0.6% ahead of more daddy, including money supply and loan growth numbers later this week. and the hang seng index in hong kong pulled back from its three week highs. and we saw profit taking in japan with the nikkei 225 ending lower by 1.8%. brewers fizzled after providing lackluster profit outlooks. meanwhile, seoul shares snapped

a six-day winning streak at korea's central bank sits pat with policies for the ninth straight month. australia finished flat today as strong earnings offset weak jobs data. and the jakarta composite down by just 0.1%. as for individual movers, lenovo warned that its earnings in the short-term could be hurt by the motorola acquisition deal, but promised to restore motorola to profitability within six months of the deal's closing. and the chinese pcmaker did beat on earnings with profits jumping nearly a third but shares ended down by 0.6%. in other earnings, prada shares took a tumble in hong kong after an earnings miss. the drop of earnings was due to store closure necessary hong kong and weakening spending from mainland customers. shares dropped almost 5% today,

ross. >> thanks for that. catch you a little bit later. still to come, lenovo posted record third quarter numbers while the next guest says investors should be in no rush to buy the stock. we'll find out why, right after this. [ male announcer ] the new new york is open.

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george osbourn is currently speaking in edinburgh. he's currently saying that it wouldn't be possible for them to stay in a currency union with the rest of the uk. in particular with england, wales and northern ireland. the british chancellor suggesting that it wouldn't be possible for scotland to keep the british pound as their currency with full independence. keep our eyes on that. meanwhile, plenty of other earnings. global miner rio tinto surprising investors with a dividend hike. the earnings beat could put in a position to fund their big capital return sooner than expected. the stock is still down 2%. the ceo is speaking to "squawk box" around 8:40 et, that's 14:40 cet.

carolin will have the latest from nestle about an hour from now. and citing a weak global economy, abb had orders down 5% in the fourth quarter. earlier, "squawk box" asked the ceo, ulrich topper for his take on the global landscape. >> on the early cycle, we see a rebound in some of the markets. it's too early to call it. but we are quite optimistic about a medium to long-term future. and rolls-royce exceeded expectations with a jump in full year profits, but forecasting this year's figures will be flat before growth resumes again in 2015, which is why the stock is down fairley heavily, off 1 1%.

elsewhere in europe, stephane and annette join us to round up the numbers. stephane, let's kick off with you. >> let's get number toes digest indeed start, bnp paribas. 26% decline for the net provtsd because of some exceptional items. 661 million

outlook seems quite benign for invest investors. they are saying they have already reached a 9% capital ratio and a fully faced -- of 9%. the bank has a smaller balance sheet since 2006. so it's a clear sign that the bank is heavily preparing for the asset quality review this year and also, of course, for the stress test. looking at the operational numbers, net profit in the fourth quarter came in at 64 million euros. they managed to reduce noncore assets more than expected and also their target for noncore asset production in 2016 is now higher than previously. now they're aiming at reducing their noncore assets to 75

billion euros. so all in all, it's a good number set from the bank. in terms of profitability, it looks -- the bank is saying 2014 will still see revenues, not down, but revenues perhaps a little bit impaired by low interest rates and also low client activity, investment activity. so the problems for the banking industry are here to stay, but the bank itself is managing to increase and accelerate its restructuring process, ross. and that's why the shares are trading up today by 2.7%. with that, i'm sending it back over on to you. >> thanks for that, annette. good to see you. george osborne is currently speaking in edinburgh. he says the pound is not an asset to be divided up if scotland votes for independence. there's no legal reason why the rest of the uk would need to share the currency with an

independent scotland. and in zotland walks away from the uk, it walks away from the british pound. scottish nationalists offering to walk away from the debt would mean punitively higher interest rates for scottish debt issuance. so a major threat from the british chancellor last night. looking to see what the labor you video is on that, as well. now, staying in the uk, lloyds banking group has announced a return to profit. the ceo says he believes the lender is ready to return to private ownership. and because of that, helia, he's paid himself a nice bonus, as well, 1.7 million pound bonus. >> 1.7 million. he was absolutely convinced that he deserved it. he said he came here three years ago to repair the bank and that

it has performed exceptionally well. share price up 70% last year. he said in the last 24 months that lloyds has performed better than any of the of the big 50 world banks. and that the company and the employees deserve the bonus. this is despite the fact -- >> why are we adown 4% today? >> this is despite the fact that over those three years lloyds has amassed a really hard 10.3 billion pounds in costs. that's the ppi claims and interest rate hedging costs. so it faces huge kind of litigations conduct costs for customers. >> what's the fresh numbers? we've known all about these numbers. is there a fresh number today, another set of -- >> well, two weeks ago, the company had to announce that it had 1 .8 billion of provisions f qe.

that took everyone by shock. no one was expecting that. and the share price went down 4%, 5% then. they tried to manage that by saying, look, we're going to look at the dividend. i think today if you look at the statutory profit number, because two weeks ago, they announced the underlying profit of 6.2 billion pounds. but today, they say that the profit, because of those ppi costs, is only going to be around 415 million pounds. so a really small number. and i think people are starting to worry, is the stock expensive? are they going to be given permission by the regulator to give this dividend? they said they're going to request this dividend second half of this year, but it's going to be very hard. >> and maybe investors are targeting a dividend in the spring. >> and the results were so good that ppi, those legacy costs were tailing and that dividend would be an easy thing to gain because of these profits. but actually, it's going to be

very hard for the regulator to allow them to release capital. >> and quick word about george osborne, this really might i mean, if labor supports the move you can't have the pound, that's scary for voters. it's one thing to vote for independence, another thing to vote for completely different currency. >> one of our colleagues at cnbc reminded me that the pound doesn't just belong to england. so i think it's a stark warning for the chancellor, but i don't think it's just for him to decide. it's actually -- the lloyd's chief executive was asked about what happens if there's a yes vote, would he support it in terms of the bank? remember, one of the biggest issues alongside the currency is the banks, the two biggest banks in the uk, rbs and lloyd's both headquartered in scotland. what happens if their scottish regulator is the bank of england

still the lender of last resort? lloyd's said today that was a decision for the scottish people and that lloyds would do everything it had to if there was a yes vote. >> rbs is owned by lloyd's, a uk english-based bank, isn't it? >> rbs? >> sorry, hbos -- >> no, what i meant, is that hbos is a unit of -- so, you know, if you had santander earnings, santander, if you know what i mean. thanks very much, helia. third quarter profit jumped nearly a third beating estimates saying buying motorola will have a short-term impact, but it expects to turn around the business in around three to five quarters times. richard is in dubai.

you haven't got much rain at all there, richard. >> no, know rain at all, i'm happy to say. >> good. i'll come out. richard, lenovo, have you had some concerns about it? >> my only concern is that right now, you look at lenovo's margins right now, they are wafer thin, around about 3%. now, if you look at what motorola is doing at the moment, that company is basically losing $200 million a quarter. when you stick the two together, margins are going to go to 1%. that leaves lenovo very little room for maneuver. what i think is going to happen, for the balance of this year, you'll see low profitability from lenovo. it's going to take a while to turn this business around. >> so since lenovo's fragile profitability is effectively what you're going to say, i thought it was a good play on and resid

android, isn't it? >> well, again, if you look at the relative size of the business, this is still going to be a company dominated by the pc. but the reason being is together they will be number three in the smartphone market. just ahead of wahwei with around about 3% market share. the problem is, if you look forward this year, smartphone growth is going to slow down and that means competition gets tougher. so they are going to need to gain a substantial amount of market share to really turn this business around and that's going be tough. >> what about samsung? are you worried about a lot of momentum? >> well, yeah. i mean, this is the other thing, also. the smartphone market overall is going to grow much more slowly this year compared to last year. the other thing that worries me a little bit is the fact that, you know, samsung's profitability starting to come under pressure in q4 and i fear what could happen in the balance of this year is that margins could come down even further as

competition gets tougher and tougher. >> do you think they have to move more into the echo system, they have to do more than just having a great-looking screen because you can replicate that. >> exactly. that's becoming a commodity. this is exactly where i think you'll see samsung going over the next five years. you look at where they're investing. they're hiring software people in silicone valley like crazy. this is all about investing in the user experience. they want people to start using samsung software, samsung services, and that's where the company can actually really get some value from the user. but again, samsung's history in software is not exactly great. it's historically a hardware company. so again, tough proposition, but they have the money and they

have heavy interest in this issue. >> stay warm. i'll do my best. still to come, nestle predict apr predicts a challenging 2014. our next guest says price risks on the soft commodity remain to the upside. [ male announcer ] how can power consumption in china, impact wool exports from new zealand, textile production in spain, and the use of medical technology in the u.s.? at t. rowe price, we understand the connections

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the headlines from around the globe, a mega deal in the making, comcast and time warper set to ae veal a $44 billion merger that could rattle the regulators. we'll hear from both ceos on "squawk box" in the u.s. a mixed shares in banks, bpb paribas and commerzbank are both down. if scotland walks away, it walks away from the pound. and here in italy, the prime minister fights for his own future among a destabilizing coalition government.

european equities, meanwhile, are down. slim gains yesterday, the ftse was up just 2 points. it is currently down 0.6%. the xetra dax and cac 40 down 0.2% and 0.3% respectively. ftse mib is down 1 %. the yields, up 3.77% in italy. treasuries up to 2.75%. gilt yields hurt after yesterday's big jump up in growth forecasts and a hint that maybe rates could drop next year. on the currency markets, that lifted sterling, of course, back to near three-year highs at 1 is.36 -- sorry, 11.6639. 11.36 euro/dollar has rebounded

after hearing we might consider cutting rates into negative territory overnight. rates have rebounded from that. dollar/yen steady at 102. jules had enough of eating out with me and decided there was a much better meal in rome. hi, jules. >> hi, ross. i would never leave you just for food reasons. it's the political reasons in italy we have frequently. what we've seen over the last 24 hours, prime minister letta throwing down the gauntlet to renzi, the head of the democratic party saying, hey, if you want to lead this country, then you have to step up and say it. and mateo renzi has promised to speak today and see what his vision of the future is politically here for this country. what we're expecting is a summit of the democratic party at 3:00 p.m. today. we'll then hear from both letta and renzi and then we'll make a

decision here. the question is does it come down a confidence vote for prime minister letta and whether or not he continues to lead the party and the party right now? we have to wait and see. there's a few scenarios that we could see right now. do we see the prime minister remain as the prime minister? we see a coalition reshuffle. do we see him hand over the hat to renzi? people here are telling me they're virtually assured that we see a leadership change for the country right now. interesting to see, analysts say that the more likely option here is a coalition reshuffle. and as, ross, you were saying earlier, why would mateo renzi want to take over right now? he's better off as an opposition right now from within the democratic party, throwing barbs at the prime minister saying why aren't you addressing the crucial issues of this country? the question is, is he going to be any more capable than prime minister enciro letta in reform

if he takes the leadership now? i don't think he is. we've got three, seven and ten-year market sales today. very little is going on here in terms of reforms. a leadership change could be a continuous change as far as the party and the coalition is concerned. but things aren't getting done here and that's the problem. but we're still waiting for that summit today of the democratic party. >> jules, stay there on the roof of your hotel. in the studio is vincenzo on scarpetta. address some of those points julie has raised. surely what we want is a change in the electoral law.

>> i think julia made a very good summary of the situation at the moment. i personally agree with her that renzi is probably better off outside the government at the moment, being seen as the guy who gives new momentum from the reforms starting with the electoral law first and bolstering the reforms in italy from outside the government .maybe go to elections next year. but at the moment, pressure is mounting. it's very interesting how the usually quiet enrico letta yesterday took the gloves off and said if someone wants to replace me, please say it openly. >> what about getting electoral law changed? >> yes. >> we can't really do anything until that happens, can we? >> exactly. there is another one on the table. it's been discussed by the parliament. it's not perfect, but at least that one, the electoral currency

being discussed would guarantee that whoever wins the elections will command a stable majority in both houses of the italian parliament, so that would be a necessary first step to consider the prospect of new elections. that said, once the electoral law has changed, i think new elections shouldn't be a taboo in italy because the risk with italian politics is people confuse political stability with political paralysis, which are two very different things. >> jules. >> i think you make a great point there. but i want to ask, we know that the deal right now that they're trying to agree on electoral reform is an agreement between berlusconi and renzi. what is the risk if renzi becomes prime minister here? do they back away from the negotiations they made on electoral reform and we have a real problem passing anything? >> well, there is a risk, actually. there is a risk because if renzi takes over power now, it would

expose himself to political attacks from the five-star movement, but potentially from berlusconi's party saying it's the third consecutive prime minister who has not won an election and it's there because of negotiations we've seen is on party because of a part of a party power struggle. so there is a risk that berlusconi's party at some point just walks away from the negotiations on the electoral law. we know how unpredictable berlusconi's party is. >> good to see you. thanks for that. jules, where are you, actually? i said you were on the roof on your hotel. which bit of the city are you in? >> you know, if i threw a stone, i would hit the fountain. so i am actually bang in the middle of rome right now. >> my favorite part. very good. all right. see you later. good stuff. thanks, jules. now, how is the political instability in italy impacting the corporate sector?

we'll get a view from the ceo of eni. he'll be on closing bell at 17:15 cet this evening. italy, meanwhile, says it expects challenges to earnings to continue this year after the company told investors weak demand and price pressures have all weighed on income. carolin, no signs of things getting better, then? >> not really. i mean, ross, the emerging markets have long been a source of growth and outperformance for nestle. now, they're simply not helping as much in terms of that growth. keep in mind that growth from the emerging markets in 2013 wasn't all that shabby. it was still 9.3%. it's simply not growing double digit any more. full year organic growth, 4.6%, that came in bang in line with expectations. and it does point to a slight acceleration in organic growth

in the fourth quarter. having said that, this is the lowest growth the company has had in four years. they said 2013 was challenging and 2014 will likely be the same. so not a whole lot of optimism and visibility out there for nestle. keep in mind, nestle in the headlines earlier this week. on tuesday, it announced it's selling its 8% stake of l'oreal back to the cosmeticsmaker. but to be honest, the market was slightly underwhelmed. they're wondering what is nestle going to do with that 23% stake in lori el and wh'oreal and wha to do with the cash? we'll get the answers when i talk to the ceo in about 45 minutes of time. >> we won't miss it.

there's probably better weather up there. thanks, carolin. we'll look forward to the interview a little later. now, tate told investors it's expecting a dramatic drop in prices of its splenda sweetener. shares down sharply on that news, as you can see, currently off 15%. and will stay sort of in the sweetish sector. cocoa hitting 2 1/2 year highs on wednesday on fears el nino weather issues could curb output. johnson, good to see you. cocoa futures up, what, 45%? >> since last march, yes. >> since last march. so we've priced clearly a lot in. what is the swing factor now, then? >> so one of the most unusual

elements of this particular moving cocoa is that it seems to be demand driven. if you looked at the results overnight, both of them, although on the surface they weren't reporting great results. if you looked at the chocolate segment of each of those, you can see that across the world, they had outperformed the chocolate segment has outperformed. so this was underpinning cocoa price rally during most of last year. and now we are threatened with a global outlook. if we would get normal weather, we would find the price is enough to balance off demand. >> i was going to ask you, if you get the strong price rideses, normally that encourages a lot more planting and production. is it that easy in cocoa or not? >> it's not that easy in cocoa because of the lead time. cocoa comes from a tree. and it takes four to seven years before you get production.

but you can increase quickly by increasing inputs, fertilizer. at the moment, it's generating a small amount of crops. but in order to stimulate further production, we probably need to continue these price rises a little further in order to encourage greater input. >> and you said the key thing earlier, if we get monormal weather patterns. but the fear is that is not going to happen. >> the latest fear is a potential el nino. it's suggested there is a strong link between el nino and underperforming global output on cocoa, somewhere between 4% and 13%, depending on the type of el nino. now, before we get too frightened, the el nino is by no means certain. some of the independent weather forecasters are more certain than, say, noaa or even the australian weather bureau who follow these things closely. so it's not certain we're going to get an el nino.

but if we did, then the consequence -- >> the issue here for investors is after a very big run upwards, going long on an uncertain weather pattern is a highly speculative trade. >> it is. it is. the level of investment in the cocoa market at the moment is close to record high levels. that was really premised by the demand story, which i mentioned earlier. now, this potential weather threat is coming on top of that demand story. with cocoa, stocks against consumption looking as if they're going to fall to the lowest levels since the mid 1980s. this seems to me to be a rally built on a fairley fundamental solid foundation. >> good to see you, jonathan. jonathan parkman. now we'll talk about el nino potential there. old man winter isn't taking a vacation, either. the major snow and ice storm that hit the southern u.s. on wednesday is now making its way into the northeast. the government offices are closed in washington today.

philadelphia, new york and boston could see up to a foot or more of snow. causing major headaches for the mortgage and evening commute. weather.com says more than 3,700 flights were canceled yesterday and nearly 4400 have already been canceled today. and in britain, a most severe weather warning has been issued with more than 100-mile-per-hour winds battering the country. flooding issues are apparent with the river thames. extraordinary footage of the flooding in england. so we want to know, how has the weather been affecting you? let us know. join the conversation, worldwood@cnbc.com, tweet us, @cnbcwex or direct to me @rosswestgate. how has the weather been impacting you? whatever the experience is, let us know. we'll take a short break. still to come, the bank of

indonesia says it will keep one eye on the fed and the other on china's slowing growth. we'll be in southeast asia market and bring you the latest on the central bank's rate decision.

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yukako ono has more for us from tokyo. hi, yukako. >> hi, ross. the u.s. administration has now approved all four shale gas projects run by japanese firms. the largest is the cameron project in louisiana led by mitsubishi and mitsui co and is expected to ship 8 million tons annually to japan. with all nuclear power plants shut down, japan's independence on power generation is increasing. lng import ves doubled in the two years since the fukushima nuclear power plant accident and accounts for nearly 50% of the record high trade deficits in 2013. shale gas is assumed to be 20% to 30% chaer cheaper than conventional gases. hopes are not only will it lower

gas fees for firms and households but help shrink trade losses. japan hopes to import 22 million tons of shale gas annually and u.s. operations and another project in canada. it will be generating the same amount of electricity as more than 20 nuclear power plants. that's all from nikkei business report. back to you, ross. >> yukako, thanks. have a good evening in tokyo. indonesia's central bank has holding firm. it's kept its key lending rate unchanged at 7.5% as expected. the central bank hiked rates 175 basis points the second half of last year to shore up its currency, the rupiah. many analysts expect there could be more to come. nice to see you, bakresi. how much pressure, because they did that big 175-basis point

rise last year. how much does that take the pressure off them? the current account deficit under 2%. i presume investors will look at that and think, okay, maybe we'll leave them alone for a bit. >> yes. and i think the 175 basis points is sizable. we are gradually seeing that passing through into the real economy. lending interest rates have risen by about 70 basis points. and given the depositit competition among banks, banks are tightening credit conditions. >> yeah. and is that the reason that we saw a better deficit because of lower imports because we've got softer demand? >> we have seen, actually, a capital being fairley soft in indonesia given the momentum investment remains weak. this is a scott function of unfavorable terms of trade and some caution ahead of elections in april this year.

i think it's also fair to say that last year we had mineral ores and manufactured related exports have benefited from improving related growth. >> the economy up 5.8% in 2013, the slowest pace since 2009. how slow will it go this year or how fast? >> so we're expecting the economic momentum to moderate to 5% in 2014 from 5.8% last year. so we think that is going to come through. and, in fact, softer growth is good because if it allows accelerate the adjustment in the current account, that deficit itself. >> and with that bring inflation down, it was still cpi, 8.2% is well above the target rate of 2.5% to 3.5%. >> yes. i think in the near term inflation, up until middle of this year would remain in the range of 7.8% to 8.2%.

last year in the summer, the government had to raise fuel prices. but we are expecting inflation to end 2014 at 6%. but still above the central bank's inflation target. and i think that's why we are maintaining its tightening bias. >> so how does all of this play into the rupiah? especially as the fed continues to taper. >> i think we see last year, clearly closer to what we would think is consistent with fundamentals. but in the near term, there could still be pressures on account of fed tapering, em related concerns, and importantly a high honor political risk meem yumpremium,. there were three-month horizon forecasts is 12750. let's give you an update on what the agenda is in asia tomorrow. china and understand use both

report benchmark inflation figures for january. and we've got key corporate earnings on tap which includes rakuten, and big banks will report along with australi trai australia's mining. zuma will take the podium later for the last time before elections on the 7th of may this year. south africa's also battling higher inflation and last month high interest rates to 5.5%, which has sent the rand considerably lower. now, just to show you the european equity markets ahead of the u.s. open a little bit later are down today. we had a snap on the four-day win streak in the united states. right now, advancers being outpaced by decliners around 7/3 on the dow jones stoxx 600.

banks are lower today, as well. the session was just off the session lows slightly. but there's a bit of m&a activity. we had the ftse down 0.4%. the xetra dax and cac 40 down about 0.2%. and the ftse mib down 1% at the moment. comcast, the biggest cable operator has reportedly agreed to buy rival time warner cable. can the maker mergers go through? what would be the cost as far as the regulators is concerned? we'll get into that the second hour of "worldwide exchange" coming up in just a few minutes. [ 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...

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the headlines from around the globe, a medical ga deal in the making. time warner and comcast set to reveal a $44 billion takeover that mielths just rattle the regulators. we'll hear from the ceos on "squawk box" coming up. blame it on the weather. today's u.s. retail sales data could show more evidence of the impact of the harsh winter and its impact on the economy. signed, dealed, delivered. the u.s. senate passes the bill to raise the nation's debt ceiling. but the bill didn't come without

some last-minute drama. and british chancellor george osborne rules out any prospect of a currency union if scotland decides to go independent. >> it simply does not add up to the s&p. scotland walked away from the uk, it walks away from the pound. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. and a very good morning to you. jules today is in rome. there's a lot of pressure on the italian prime minister today. we'll get more from here in a few moments. but first, our lead story, our very own david faber reporting that comcast, a parents of nbc universal has reached a dye deal to buy time warner cable for around $44 billion in stock. the deal is expected to be

announced this morning and it would create the biggest u.s. cable provider with more than 33 million subscribers. it's certain to face something of a tough review from the scc. the deal comes months after charter communications and media approached time warner cable. comcast has held talks with the firm, as well. charter's latest offer of $139 a share, that was rejected. sources report david faber comcast may be willing to make concessions to appease u.s. regulators. time warner cable up some 15% this morning. joining us from new york, ken kamen. ken, i know you're not a sector expert, but give us a sense of what this m&a might mean.

how would folks view it as investors? >> well, i think that, you know, the trend has been for big companies to continue to get bigger. here is another example of that. i think comcast, as it looked to get into the new york market and other large markets are flexing their muscle. i mean, it certainly makes sense they're probably going to have to divert some subscribers somewhere to get regulatory approval, which is not necessarily a lock. but we're seeing a trend towards m&a right now. i mean, it's kind of euphoria in the streets right now on wall street and they're using their stock as currency, which makes sense in a market environment like we have today. so i think you'll see more of these types of deals as we go forward. >> an all-stock transaction is what we think it's going to be. do you think we'll get more deals like that despite the fact the companies have quite a bit of access and cheap rates if they wanted to finance it? >> that is a great point.

we're basically at highs even though we've been off a recent correction. so the currency of stock is a very attractive currency for boards to look at to try to do things in the acquisition world. so i think it's a trend that would continue. i would like to see some of this cash on all the balance sheets being distributed around a little by more than ordered, but i think it's a trend you can see as long as the market stays as strong as it's been. >> will investors reward companies for buying growth, which is what comcast is doing? >> yeah. we currently see that. stocks and equity res more frustrated than ever about this longer lower cycle of interest rates as chair yellen just said recently. this is going to continue for a while. the search for equities remain all over the place. as companies -- you know,

equities remains that dulling spot, companies are thirsting to kind of juice or justify the multiple expansions that they're getting. and i think you're going to see stock being the preferred way of paying for a lot of these things and they're chasing growth. and i think it makes a whole bunch of sense. bull markets are environments to do that. >> ken, stay there. we'll come back to you in just a second. the comcast of ceo and time warner are going to join david in a first on cnbc interview on "squawk box" at 7:00 a.m. eastern. meanwhile, u.s. futures, we snapped a four-day winning streak by the close. the down down 30, the s&p off 0.5 and this morning we're called off another 77 points below fair value. 15 points below fair value on

the nasdaq and the s&p is currently 6 points below fair value. the xetra dax down 0.25%. the cac 40 down 0.3%. the ftse mib down 1.2%. ten-year treasury yields, 2.75% is where we stand. slightly lower than where we were earlier this morning. 2.72% was the yield on the ten-year br joefore the jobs re last week. on the currency markets, euro/dollar, we got down to below 1.65 after ben came out late last night and said we are thinking about the possibility of cutting interest rates. that pushed the euro down.

back up to 1.3670 this morning. dollar/yen has just come back below 102. weak jobs report overnight after hitting a one-month high in yesterday's session. and sterling, not far away from the three-year highs at the moment. 1.6637 getting a really big boost from the bank of england's quarterly report. they raised forecasts much more than expected, up 3.4% from this year. and there's a hint that rates might go up. although inflation has certainly become fairley calm. talking about the uk, as well, george osborne stated that if scotland dissolved its unit for england, northern ireland and wales, it can't keep sterling as a currency, either. that's not been put into the mix. scotland has independent, but it has to decide whether it wants to pull away from the european union by the end of this year. that's where we stand at the

moment. as far as the currency markets are concerned, the nikkei is back trading today. what happens? sixuan will bring us up to speed. >> thank you, ross. asian markets took a breather after the recent rally. the shanghai deposit down 0.5%. and the hang seng pulled back from its three-week highs. we saw profit taking in japan. meanwhile, south korea and indonesia's central banks both stood pat with policies as expected. and australia finished about flat as strong earnings off set weak data. as for individual movers, lenovo warned that its earnings in the short-term could be hurt by the motorola deal but prommed to restore motorola to profitability within six months.

in other earnings news, prada shares took a tumble in hong kong after an earnings miss. the drop of earnings was due to store closure necessary hong kong and weakening luxury spending in hong kong. ross. >> sixuan, thank you. have a good evening in singapore. old man winter certainly isn't taking a vacation. the major snow and ice storm that hit the south on wednesday is now making its way into the northeast. the u.s. government offices are closed in washington today. new york, philadelphia and boston could see up to a foot or more of the wet stuff causing major headaches for both the morning and evening commute. more than 3,700 flights were canceled wednesday. nearly 4400 have already been canceled today. as far as the agenda in the states is concerned, we've got

weekly jobless claims out at 8:30 eastern. they're forecast to droch p by 1,000 to. also at 8:30, we get january retails sales. sales are forecast to slip 0.1% and rise 0.1% when you exclude autos. at 10:00, business inventories are out. pep pepsico reports results before the opening bells. after the close, we'll get numbers from the likes of aig, kraft foods and trulia. ken kadmen is still with us. you have a couple inches of the white stuff in new york, ken? >> yeah. it's a coating out there pretty good. >> the fact that we're going to get a lot of date data impacted by these storms, how do investors look through that?

>> i think you just said the key. you have to look through that. in the northeast, we've been through this polar vortex. the key is where are you not going tonight? people aren't going to the malls. i think if you're getting too crazy about what the retail sales are for december, january and february, you're going to miss the big per, which things are improving. and i think you see that in the jobs numbers, too. that we're getting the weather adjusted job numbers. >> if we get a third number of weekly numbers, might you change your tune? >> yeah. it depends. if february goes out like it's coming in right now with this cold weather, then maybe not so different. i think it will be up in the 100,000 plus range. but i think if you get three months in a row, you've got to start recalibrating a little bit. >> do you still think the s&p is going to end up 7% or 1 1 %

higher for the year? what's that based on? >> yeah. i think it's very much a possibility and what we're calling for. i think it's -- you know, when you look, things are really doing well. most companies have been beating. equities can be the place to be if you're searching for any kind of after inflation adjustment yield for long-term assets. i think as you see europe continuing to come out of recession, japan coming on strong is certainly with abe-nomics. there's a lot of tailwind to equities here and i mean, at some level, i'm thrilled if we just consolidate the gains from last year. but i think we're going to see the momentum and all this money still kind of not wanting to be in the bond market, you know, keeping equities in favor and i

think you'll get high individual range. it's human nature to see let's book some profits and then we'll take a look at it. so i wouldn't be too concerned about the current environment. >> thanks for that this morning. good to see you. now, snow in new york and it's raining in switzerland. we'll go there in a few minutes aannette warned it could miss targets this year. [ children yelling ]

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despite the tea party's best efforts, a deal on the debt ceiling scrapes through the senate. and the british government tells scotland if it goes independent, it will lose the pound as its currency. first, though, nestle says it expects challenges to earnings continue to this year after the companies told investors price pressures in europe and weak demand from emerging markets have weighed income in 2013. carolin is in switzerland with the ceo.

carolin. >> thank you so much for that, ross. i'm pleased i'm now joined by paul, the ceo of nestle. you recorded the slowest full year organic growth in 2013 in four years. just how disappointing is that? >> it is actually not. i feel this is a good growth figure. it is slow on very low pricing. there is no need for it. and it has to be reflected in an environment where growth is not really far off. we have grown in europe and that -- and in europe, that is not growing. so showing the inner strength of that growth. we are growing also in the emerging markets that do show slower growth. i see this as a sole on lid set of figures in the environment. >> paul, do you have any indication of how the start to the year has been? is there any improvement in underlying sales? and what is your visibility like for the rest of the year?

>> europe is pretty much as expected. it's not rebalancing as we used to have. the markets are developing further, but on another pace. i feel this is more sustainable, i think. there is some volatility in the markets, so currencies. so we have all the ingredients of seeing 2014 pretty much in line with 2013. let's talk about the emerging markets because they've long been a source of outperformance in growth for you. and you've long been investors darling because of that. but now it seems as though that exposure, almost 45% of your total revenues, that's coming back to bite you. what do you want to do with that exposure? do you want to scale back a little bit or do you just want to write through that volatility? >> not at all. first of all, the acceleration of growth in the emerging markets was last year. before we had them growing, but

not as fast as and it was the contrast versus the nop not developing that gave them that perceived image of that's the growth engine of the world. 50% of the growth over the years to come of the gdp is still -- they've lost markets. so on we play on both. and that's why we have kept focused on the developed parts. that's why we are growing in europe. we were growing in europe. and that is thanks to innovat n innovation, thanks to more resources behind the brands. we have these results and more efficiencies, that is the virtue of circle as we call it in europe, also the united states. but playing into a higher growth figure, not as high, and ee memorying markets. >> you mentioned the united states. 25% of your sales come from that part of the world. we've seen some improvement in the economic data as of late. if you account for the weather, maybe it would have been even better. is that reflected in the underlying sales? >> well, it is. united states didn't give us the growth that we would have liked

to see. a big part of our growth is linked to a category that is subdued. we have lean cuisine is suffering. we work on innovation there. the category is down. but there we have to work. we have to make that category vigorous because it's such good offering of products. so that combined with lower figures, is culminating. it is all based on innovation. >> you've made some headlines earlier this week. on tuesday, you announced you're selling an 8% stake in l'oreal back to the french cosmetics company. the market is a little

underwhelmed. one analysis said is that all he has to offer? why didn't you sell a bigger stake in the company? >> well, look, people want more. what we did make strategic sense in that we do that through nutrition. with our food and beverage products. we have extended the boundaries are nestle health science. what we do here with nestle skin health is extending the boundaries for health and well innocence. research and development driven. we have kept our stake that is quite sizable. >> it's not really fitting your strategy, is it, because it's not wellness, it's not health. >> we have been with l'oreal for a long, long time. we have been a loyal and

constructive partner in our business. we stood at 3%. so this is going well for us. >> paul, unfortunately we're going to have to leave it there. thank you so much for your time once again. always a pleasure to speak with you. briefly, tomorrow is valentine's day. how are sales of chocolate going? >> well, it's a little bit overwhelmed by the east. so you see it's never one reason. >> all right. never just one reason. now, guys, on that note, i'll send it back to you to you, ross, in the studio. >> thanks, carolin. great stuff. that's what mr. bulke had to say to carolin this morning. now, we had auction results out from italy. we're going to join jewels. a lot of thoughts mr. renzi might replace mr. letta. we've had auction results. the three-year, yield 1.4%. that's about 0.1% below.

the seven-year yoeld, 0.2%. that's about 15 percentage points below and the 30-year auction, 0.4% below after 4.59% the yield is what's out. the reason we're talking about it is we're going to go to rome for the latest political drama a little later in the show. as we go to this break, let's remind you where europe i wouldn't known equities are trading at the moment. we've a little bit of red across the board. huh, fifteen minutes could save you fifteen percent or more on car insurance. yeah. everybody knows that. did you know there is an oldest trick in the book? what? trick number one. look-est over there. ha ha. made-est thou look. so end-eth the trick.

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lease the 2014 ct 200h for $299 a month for 27 months. see your lexus dealer. the dow down 53 points, the nasdaq lower by 14. this is after we snapped the four-day winning streak on wednesday. japan today was down 1.7%. while we wait for that to happen and the snowstorm to hit the u.s., plenty more going on where they do want snow, in sochi. there was more drama in a historic first on day five of the 2014 winter olympic games. tom mackenzy has all the details.

>> for the first time ever in the winter games, the top of the podium was shared in the women's alpine downhill. suter recorded a time of 1 .7. laura guter finished with bronze. germany continues their dominant in the luge events. the pair sets a course record time of 49.373 seconds. tipping austrian brothers by more than half a second. latvia took bronze. germany now moves ahead of canada and norway to the top of the medals board going into day six. still to come on the show, did retail sales dip along with temperatures across snowy albany, new york? next after the break, find out on if the winter weather could snow in retail profits.

welcome to "worldwide exchange." i'm ross westgate. comcast and time warner set to reveal a $44 billion takeover that could just about rattle the regulators. we'll hear from both ceos coming up on "squawk box." signed, sealed and delivered, the u.s. senate

passes the bill to raise the nation's debt ceiling, but the votes didn't come without some last-minute drama. and investors don't particularly like the taste of nestle. the food group has warned it could miss targets again. but speaking first on cnbc, the ceo has defended the company's performance. >> we have grown in development. we have grown in europe. and in a europe that is not growing. plus, italy's prime minister fights for his political future. a challenge from within his party could destabilize the country's government. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. and a very good morning to you if you've just joined us stateside. i hope you're not battling too badly with snowstorms. you may be stuck at home.

we'll have an update on the weather in the northeast in just a few moments time. right now, u.s. equities after snapping a four-day win streak yesterday are called lower this morning. the s&p is currently trading around five points below fair value. the nasdaq at the moment is around 13 points below fair value pt and the dow yesterday down 30 points is currently called down another 50 points at the open. still a way to go, of course. european equity markets have been in the red this morning. the ftse 100 off 0.6%. lloyd's not doing particularly well. the government came out with its first statutory profit. the xetra dax down about 0.1%. cac 40 is down 0.2% and the ftse mib is down 1%. enric os 0.letta basically stood up and said if anybody wants to replace me as prime minister, come on and let us know about it.

meanwhile, our top story today, cnbc's david faber reporting that comcast, the parent of this channel and nbc universal has reached a deal to buy time warner cable for around $149 a share or $44 billion in total in stock. the deal is expected to be announced this morning. if it happens, it will create the biggest u.s. cable provider. it will have more than 33 million subscribers. it's certain to face a bit of a tough review from the s.e.c. this comes months after liberty media first approached time warner cable. the latest offer, roughly $139 a share was rejected. now, a little earlier, stephane caught up with the ceo of the advertising firm publicis. and he asked him for his thoughts on the deal.

>> concentration is the name of the game nowadays. we are showing this with the merger. i think what comcast is doing is sensible and is right. and when you look at the size of the platform and the size of the media onus today, i think the trend, which will not stop in the next few years. it will continue and that is a necessity for the new world. >> for your business, is it a good thing for the advertising market? >> you know, we have to adapt. i think concentration has some merit and this drawback. at the end of the line, it is extremely positive that we see some great players in this world and they think it is the sense of the history.

>> the cfo is currently trying to close a merger with omnicom. that's being held up by regulatory concerns. and comcast may be willing to appease regulators with this deal through -- comcast is currently up 0.4% and time warner cable currently up some 14%. plenty of things to look around on this deal. we'll get the analyst view on that in around 15 minutes. don't forget, comcast's ceo brian roberts and the time warner cable ceo rob marcus will be joining david in a first on cnbc interview on "squawk box" this morning at 7:00 a.m. eastern. besides that, we've got retail numbers out later today. they're expected to be flat month over month. but if you strip out auto sales, they might eek out a mere 110.1

gain. not being able to get out to the mall could put a real chill to those figures. if you look at another storm, what are your thoughts? >> well, i think, you know, a lot of people in the northeast are getting sick of it, but for some of us, it's just a typical winter. it makes it hard to get to the stores when you can't drive on the road, so you stay home. >> yeah. does that -- when people are staying home, are they doing more online or are they just not spending the money they would have spent by going out? >> yeah. they are shopping a little bit more at home. if they're shopping at all. but, you know, we've spoken with some of our members about this and they talk about how things like the polar vortex and all the freezing -- people just don't feel like shopping. and january is a slow month, anyway, for retail because, you

know, you're just coming off the christmas shopping season. people are spent out on. when you multiply that by the super cold weather and the ice storms and the snow and just the general gray that january can bring, it tends to drop people's moods a little bit and they don't feel like going out and shopping. >> yeah. and i'm presuming that, you know, sales of winter clothing and apparel has been pretty good. but that trend is probably over, right? >> that's true. well, yeah. at this point, you know, it's not necessarily over because people still do rush out on. and actually, the prices are very good this time of year because what the stores are doing now to stay one step ahead, one season ahead is they're putting their spring clothing and for those of us who want to go to warmer places in february and march, a lot of the cruise clothing and the vacation clothing like bathing suits that you wouldn't expect to see in a place like albany in the middle

of february when we're going to get another foot of snow. but it's out there and it reminds some of us that warmer days are coming. but, you know, prior to this coming out on the shelf during the christmas shopping season, for example, we had a whole number ooh -- we had some very good sales for the colder weather gear simply because we were reminded that we do live in the northeast and it gets cold around here this time of year. >> weather is such an enormous spring factor for retailers. i can't imagine because we're sort of psychological creatures, i can't imagine if you're wading through a snowstorm or you've been in a snowstorm and the weather is cold, that you think about buying it or any spring clothing for that matter. >> well, we do a little bit because, you know, in one hand, we've got the clothing and in the other hand, some people are lucky enough to have plane tickets if the planes can get out to get us down to florida

and the bahamas and places that are a little bit warmer. and, really, you know, like i said, retailers do, of course, have to stay a season ahead of everybody so that we start thinking about buying when the weather does break and things do get a little bit warmer. so, you know, there is a little bit of a psychiatrological boos it if you go out and buy a bathing suit after you trumbull through two or on three feet of snow. >> thank you so much for joining us. i hope you stay warm up there in albany. >> thank you. >> good to see you. >> we will. thank you. let's take a look at some of the other stories today. the senate has passed a bill to extend the u.s. debt ceiling barring the president's nand to raise the limits without conditions. there was an hour-long procedural tally forced by tea party republican ted cruz and it appeared there might not be enough votes to advance the bill. several republicans switched their votes after gop leaders

mitch mccoppel and john cornin voted in favor. now, comcast and time warner cable is not the only take of the story today. berkshire hathaway is continuing trading in its holdings of graham. the ceo is including several tv stations in the new site. berkshire's investment in graham was around $1.1 billion. now, consumer and health care giants expected to put in bids for merck that could top $10 billion. it includes product such as copper tone sun tan lotion and claritin allergy bills. the firm will reportedly meet with possible buyers next week.

still to come, could italy soon have another new prime minister? the third in a row that would be unelected? we'll be in rome with the latest, but it's still drama. jules is there. see you in a few moments. welcome back. how is everything?

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the british government tells scotland if it goes independent, it will lose the pound as its currency. washington and new york both braced for more weather worries today as a massive ice storm causing chaos in the american south moves up the eastern seaboard. more than 250,000 people have already been left without power. around 3,000 flights have been canceled. kate parker is a meteorologist at the weather channel and joins us now. kate, it doesn't look pretty. >> well, it doesn't feel all that pretty whenever it's blowing in from the side. we've got heavy snow. i'm currently in pennsylvania and the significance of pennsylvania with this particular system is the fact that they were hit hard not just

once, not just a couple weeks ago, but a few weeks before that and a few weeks before that, as well. bringing them 30 inches above average for snowfall this year. 30 inches above average. really significant year. they had icing just a few weeks ago, which is why this tree is down, like you see behind me. folks are still trying to recover from the power outages that lasted far to long with this system. this one is just jumping snow for now, but later today, we could see a bit of that ice dumping in. and it is going to be another major event. we've already seen snow totals approaching the foot range in several spots. so 12 inches. that's quite a bit. and we're going to continue to mon for for those accumulations as we go throughout the day. reporting here in pennsylvania, very cold. meteorologist kait parker. back to you guys. >> kait, thanks for that. stay safe for everybody who has to work through those storms, as

well. some of the heaviest tech hitters are getting together this week. >> we're here at the goldman sachs technology and internet conference in san francisco where over 100 companies from yahoo! to ebay are presenting on the latest trends. i sat down with goldman sachs president and chief operating officer gary cohen who talked about the global impact of the company's presence at these events. >> these are great products. great companies. we're willing to pay for these. these are not symptoms of bubble companies. they companies understand their product, they understand what you and i want, and they understand our pricing. >> i also spoke with mark andriesen who has been a supporter of bitcoin. take a listen. >> it's a huge on opportunity. bitcoin is an open technology, open source, everybody can

freely anticipate. so everybody that wants to take advantage of it can do so, including western union. >> we'll have to see whether other companies get involved in bitcoin. in the meantime, everybody here is trying to figure out what could be the next big thing in technology. >> that is melissa on the west coast. still to come, comcast has reportedly worked out a deal with time warner cable. can the major merger go through? stay tuned. we'll talk about it. [bell rings] [prof. burke] at farmers,we make you smarter about your insurance,because what you don't know can hurt you. what if you didn't know that home insurance can keep your stuff covered,even when it's not at home? or that collisions with wildlife on the road may not be covered. and what if you didn't know that you could be liable for any accidents on your property? the more you know,the better you can plan for what's ahead. talk to farmers and get smarter about your insurance. ♪ we are farmers bum - pa - dum, bum - bum - bum - bum♪

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down 0.6% for the ftse 100. about 0.1% for the debt kra dax

and cac 40 down 0.2%. weekly jobless claims are due out at 8:30 eastern. forecast to drop to a tonight of 330,000. as 8:30, we get january retail sales which could well feel the impact of the january storms. sales of forecast to slip 0.1% and rise just 0.1% when you exclude autos. at 10:00 a.m., we've got december business inventory. on the earnings front, pepsi co reports before the opening. would he have we'll hear from avon, discovery communications, goodyear, molson on, nielsen. after the close, we'll get numbers from aig, kraft foods and trulia. after snapping a four-day winning streak last night, the dow is currently called lower by 47 points, the nasdaq is currently 13 points below fair value and the s&p is around about 5 points below fair value.

now, major media is merging also be struck today involving the parent company cnbc that could change the face of the u.s. cable industry. bertha is at cnbc hq in the states. she's got the details. morning, bertha. we're adding to the empire. >> perhaps. perhaps. it looks like it. there is a deal. comcast, the parent company of nbc universal has reached a deal to buy dime warner cable for about $159 a share or roughly $44 billion in stock. that's about a 17% premium to wednesday's closing price. the news first reported by our own david faber, the deal expected to be officially announced later this morning. it would create the nation's largest u.s. cable provider with more than 33 million subscribers. and it's certain to face a tough review from the s.e.c. the deal comes more than eight months after charter communications and liberty first

approached with months of talkes and comcast and time warner cable. charter's latest offer of about $133 a share in cash and stock was rejected as time warner cable held out for a higher bid near $160 a share. there's no formal cap on the amount of subscribers a cable company can have in the united states, but sources tell cnbc comcast will signal its willing to divest about 3 million customers from the combined company to alleviate regulators concerns. that would give it just under 30% of the cable market. it will be thought that comcast wasn't keen on a deal to buy all of time warner under concerns about being subjected to a burdensome objective. the deal could be a major coup for time warner cable ceo rob marcus who just took the top job last month. checking shares of both companies in europe at this hour, comcast is up fractionally, about 0.4%.

while time warner cable shares have surged more than 14%. this is a very big deal. and, of course, even though we will have the ceos of both companies on "squawk box" here in the u.s. this morning. back to you. >> yeah. plenty to get through with that. bertha, for now, thanks. let's get some thoughts from alex. there we go, brian roberts and rob marcus on "squawk box" this morning at 7:00 a.m. eastern. here with me in the studio, alex cruz. your reaction to this deal? >> it's a very big deal. $45 billion, stock deal, reminds me frankly of the heyday, 1999/2000 when we were seeing lots of deals of this magnitude and a titan in terms of u.s. cable. >> 18% premium over the company's latest stock price.

we could view this as -- do you see this as clearly a friendly deal? >> it looks like a friendly deal. it looks as though both boards will recommend it. critically, it's not hostile. that's the basis from which the deal can proceed. but the premium is very tasty from investors point of view. and i've got no doubt that the two guests you'll have on the show will do a very good job of talking up the potential synergies of putting these two businesses together will generate. >> the federal communications commission rules, as bertha is leading to, it doesn't appear to run foul of those, but nevertheless it's going to get -- regulators will have to look over this fairley intently. >> absolutely, yeah. there will be a fairley lengthy period of due diligence by the regulator now. but ultimately what may happen is many divestitures may be necessary to satisfy the overall deal taking place. i've got no doubt the deal will complete and i'd bae maized

if -- >> yeah. they want to try and keep the national footprint below 30%. >> absolutely. in any media industry, you tend to find a deal like this, but there are a few concessions made by the players, but ultimately the deal gets through. >> craig aaron from free press is the media with watchdog said this will be a disaster for consumers. no one woke up this morning wishing their cable company was better. is that true or not? >> i'm not sure. i'm not sure if consumers frankly really know or care who the provider is as long as they don't feel it through their pockets. if this -- if this merged entity has more bargaining power with content providers then frankly consumers could end up getting better content. >> yeah. because the fear is it means it could jack up the prices. it doesn't necessarily play out in that way. remember, these guys are part of a supply chain. their supply chain is owning content. if a consumer can watch more content for the same price, he's

not having a bad deal, i don't think so. >> do they fit? >> i think they are and i think critically they're culturally a good fit pup previously mentioned that there had been another approach, that that approach was not necessarily welcomed and that that was a smaller player. this marriage seems more even handed, more balanced, so the cultural fit will be critical in terms of as i say getting these synergies through. >> good to see you. it's an 80% premium in stock in frankfurt. cable up nearly 15%. alex, thanks for that. comcast's ceo and the time warner cable ceo will be joining us on "squawk box" in just over an hour's time at 7:00 a.m. eastern. do not miss out on that, ladies and gentlemen. coming up next, the first hour of "squawk box," the countdown to the opening of markets staid stateside. whatever happens, have a

profitable one. good-bye for now.

good morning and welcome to "squawk box." it will take more than snow and ice to keep two cable giantes from connecting. comcast striking a mega deal to acquire time warner cable. and cisco shares getting the cold shoulder from investors after the forecast from this company shows a chill. i know andrew is going to tie this to the nsa. and oh, yeah, it's snowing outside. february 13th, 2014, and "squawk box" begins right now.

good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. our top story today, comcast is set to buy time warner cable. david faber reports that the all-stock transaction is worth roughly $159 a share. that's about $44 billion. the tie-up would create the largest cable provider in the nation with more than 33 million subscribers. although i think they were looking at divesting some of those so that he would wind up close to 30 million subscribers at the end. the deal is expected to face a tough review from the federal communications commission, potentially from the justice department, as well. >> i'm of two minds about this. >> i was an anti-trust voyeur and i've given you grief in the past. i want to see you step up to the plate here and investigate these. really? >> i'm happy to talk about it. >> in this case, you don't think