welcome to "worldwide exchange." i'm wilfred frost. >> and i'm seema mody. these are your headlines from around the world. >> a kick start rally after european equities post their biggest one-day gain this year after the fed states rates won't be hiked any time soon. so the ceo of royal dutch shell shrugs off the oil prices.

>> oil is at the moment in dekrien. but when it comes to the oil price, you have to look at it a different way, as well. it can be stable for a long period of time, as well. >> mario draghi will take center stage in washington, as well. an outspoken critic tells cnbc the central bank has far overstepped its mandate. >> according to its opinion, the -- is illegal. that is the promise to repurchase government bonds of problematic country. >> german exports posted biggest falls since the financial crisis and another sign europe's engine is stalling. webber defends germany's economic model. >> i'm more concerned that we are kind of have the wrong diagnosis of why the german economy is weak. if you as the medical doctor take the wrong diagnosis, you're very easy to give the wrong medication. >> you're watching "worldwide exchange," bringing you business

news from around the globe. >> welcome to the show. and we just had some flashes out from the european central bank. it said more would be done if needed. this is its monthly bulletin which provides a sort of porthole into ecb thinking and the central bank recapped the defense strategy to first buy covered bonds, safe investments up and back properly and later this year it says it will buy repackaged debt known as asset backed securities. that will include debt that has a junk credit rating. that perhaps is the biggest headline including debt credit rating. the euro jumped significantly off the back of that. it has been trading mostly flat for today's session is now up 0.4%. that's coming in ahead of

mario draghi's speech in washington after he unveiled that asset-backed security program next week. >> absolutely. and the quote here from the ecb saying the new measures will support specific market segments that play a key role in the financing of the economy, the euro jumping significantly off the back of that. we're going to be moving, talking more be tail about europe in just a minute. the top of the agenda today was the fomc minutes. >> absolutely. investors are getting a sigh of relief after getting method fed members. members of the committee had concerns that the rate guidance could be misunderstood as a commitment. most policymakers would prefer the timeline be data dependent rather than a mechanical date. >> global economic weakness in places like france and germany is starting to be felt here, at

the federal reserve's washington headquarters. and that could have an effect on interest rates. the fed in the minutes from its september meeting revealed concerns with floundering economies overseas saying, quote, economic growth over the long-term may be slower than expected if foreign economic growth came in weaker than anticipated. there was concern over the strong. the worries were that a strong dollar would reduce inflation since foreign goods become cheaper in long-term since the dollar is strengthening. fed staff economists said the central bank may not hit their target, quote, over the next few years. >> the dollar's movement showed the fed in its forward guidance and it's keeping to the timeline on rates is affecting markets which will affect the economy. combined that with oil and you

get a sense the fed will be worried about inflation being too low. it will want you to pull the punch away late, not early. >> all of that suggested to the market that fed officials won't be so quick to pull the trigger and raise interest rates. the market currently anticipates around a 15,000 rate hike, which would be the first in eight years. but there was concern of an earlier hike and the fed's concern about foreign weakness, it takes that off the table for now. >> all of this concerned mario draghi to come up with a plan to address the economic weakness on the confidence. the ecb is currently putting a program in place to lower rates for borrowing sectors. that could mean the fed keeps interest rates at zero until it's clear that europe is out of recessionary danger. draghi put the plan together that gains the confidence of markets. back to you guys. >> let's talk about those fed

minutes. that was the reason resaw a rebound in u.s. stocks yesterday. james ashley joins us now. really interesting to see what the feds said at its height and indicate that the stronger dollar as well as the slowdown in global growth could result in the fed keeping its monetary policy intact. do you think that that is actually the case that we might not see rates rise until late 2015? >> the pride of the minutes, june specifically of next year. and i think the more interesting factors about these minutes is the market reaction to it, the idea that you would see a 7% appreciation in the dollar and the fed would be coming from that? the idea that you would see all the warning lines flashing in europe and the fed would be coming from that. the idea forward guidance. these are, for me, blinding statements of the obvious. the idea that the market has reacted so sharply tells me more about how the market is

positioned and what the market is expecting than it does about the fed's reaction. to me, it says the market was complacent going into those meetings. the fed is doing what i think is entirely sensitive in response to its communication. >> let's look at that market reaction a bit more. this is quite a short-term line to take. but friday when we had the jobs number, including earlier this week, market seem to be positively correlated with the quality of the data coming out, i.e., good news being good news and bad news being bad news. >> there are increasing signs coming out of europe that there could be a fairley ugly slowdown coming now. we'll talk about that in detail shortly. i think the idea that the fed can continue to normalize in the economy if things get really -- in europe, then i think the markets are going to realize that that's probably not realistic. there is some connection there. sure, we can have policy

divergence. it can limit to do that. if europe is going to end up back in the mire, that's going to have a meaningful impact in what the fed does. >> stick with us, james, because we want to get your thoughts on what the fed does, as well. it's a busy day for central bankers, isn't it, at 11:00 a.m. eastern time. 1700 cet. the european central bank president mario draghi will speak at the bookings institute in washington and he will be followed by stanley fischer due to speak at the same event. e-mail us your thoughts on what you think draghi and fisher will say about the economic recovery worldwide@cnbc.c worldwide@cnbc.com. >> and as you can see, european markets in the green today following the lead from the u.s. yesterday bouncing back from the weakness we had earlier in the week. the stocks 600 up 1%.

the stoxx 50 up 1.2%. it's quite a comeback in european markets. we're back to a market where bad news yesterday, more dovish comments leads to good news in the markets. green across the board, the ftse 100 up 0.75%. germany up 1.5%. perhaps up 1%. italy up 1%, as well. you would think equities might sell off, but that hasn't happened. ten-year treasury yields, 2.3%. we saw both equity buying and bond buying over the last 24 hours. ten-year german bund has moved less despite having more macro data out in the last week. it's just below 0.9%, but record lows continue there. 2.3%, very, very low yields.

perhaps that is suggesting that we won't expect any significant announcement towards the likelihood of rate rises from the bank of england later today and seen again as a bit of a safe haven trade relative to the rest of europe, italy's 2.26%. forex, the u.s. dollar has just given up some of the gains over the last week or so that it's had. still, a very strong move over the last few months and weeks. the euro bouncing back today, 0.36% on expectations we won't get that rate rise in the u.s. for a little while longer. similarly, the yen continuing with quite a strong weak. but still touching around those low levels of the last five or six years, 107.67. the aussie/dollar bouncing back against the u.s. dollar, as well, .889. and sterling ahead of the bank of england meeting. let's get a look in on what's happened in asian markets overnight. sri jg jegarajah is standing by

for us as ever. >> hi there. wil, we're looking for a gain on the order of 1% or more. it's the banks that were the big gainers on the broad index. as you pointed out, the currency is ex eithering a strong correlation with the broader indices in japan. so any strengthening that we see in the japanese yen is going to encourage some selling of the big exporters and bifurcation. that's going to be very negative for the broader market and that is what you are seeing here, put quite simply. shanghai composite, we did see some profit taking earlier on the session. the banks also are strong performers there. all in all, we are seeing a strong turn around in the asian session. in the near term, what mario draghi has to say tonight in washington, what vice chair

stanley fischer has to say tonight at the same event is going to be pivotal here. we see the dovish comments from either of those bankers, central bankers, i should say, that that is going to put some pressure on the u.s. dollars and it would help this risk environment in the equities market. that could set the stage for further gains. that meeting is going to be very important. back to you now. >> sri, thanks very much. now, professor hans veteraner sims has long been a vocal critic of the ecb, criticizing central bank policies which create imbalances and heighten ricks for the eurozone's member state. as ecb's vice president will be, quote, significantly larger as a result of his latest measures and then struck a warnings including over outright monetary actions. >> according to its opinion, omt is illegal.

that is the promise to repurchase government bonds of a problematic country. >> and stay tuned. we'll bring you more from our interview with hans wernor sinn in the next hour. another man critical of the ecb has been jeff weber. >> what i was saying was there are sudden riskes still there and if you want to eliminate those, it might be a measure of caution to put in some protective measures so that listed companies are not in an adverse position to those companies that have fixed ownerships where you cannot do that. so in a way, it's adding to a level playing field if you put some of these provisions in place. it's not a criticism of the ecb or the way they conduct the

stress test. i think it's very complicated. i think they're very -- in the way they prepare that. they're really determined to do this asnce in the market. from what i've seen in the design measures, many of the weaknesses of the previous tests are not there yet. >> and yet the ecb continues to drift towards outright sudden buying. we've had this salami approach which has taken us down to abs now. is it time for a grand gesture from germany? you resigned. should there be some grand gesture from germany to expect its disconsent with the fact that neither the italians or the french apparently can balance their budget? >> one way forward is probably to firmly put in the hands of government the responsibility that they need to pay, first and foremost italy, but also france. others need to get control of

their budget. continuing to violate european rules or even indicating that they're willing to soften these rules yet again would be, in my view, a dentmental mistake. that was the -- of the confidence crisis in europe last time around and germany and france unfortunately violated those rules. doing it again would undermine, in my view completely and for good, the credibility of the fiscal framework that we have for europe. >> if the german data continues to weaken and we continue to see further euro weakness which has in germans are not particularly bothered about having a week in europe at this point, are you worried that some in the government might blink, might say okay, let the ecb have its head, let mr. draghi do what he feels they need to do here

because the german economy is seeing that. are you worried about that? >> i'm more worried about do we have the german diagnosis and if you as a medical doctor take the wrong diagnosis, you're easy to give the wrong medication to stay in the picture. one of the reasons we're seeing the weakness is because of the ukraine. there's a lot of political risk. germany has a 1.4% of german gdp exports to russia. now, most of the weakness in the german industry can largely be displayed by the direct impact. if we move to a full fledged sanction regime going faufrd, that's 1.4% of gdp which ultimately disappeareds and looks for an export confirmation. >> what have you made of the confirmation hearing for the commissioners?

you'll take his role but, obviously, there has been some pressure to remove some banking responsibilities from him. it's been like a circus at times watching the process roll through. a brit timely gets the job, but then there is a punishment handed down, if you like. >> i'm more concerned about the fragmentation that there is a different set of rules that applies to the uk. there's a different set of rules that the germans are implementing and the french are implementing and the germans have come up with their own set of rules for a global bank like us, such divergentsies in regulation are actually very hard to cope with because you need a different set of rules

you apply. we are looking for a pan european regulation that is giving us a level playing field in europe. >> james, how precarious of a position is the euro area? >> very. very precarious. if we look at this from an activity perspective or from an inflation perspective, the warning signs we were talking about earlier is clearly at issue. when you consider inflation at 3%, it's. of a slowdown. so the position is precarious. we have always gone back to the existential crisis and the

recovery is ae very long period of time. >> james, data this week has called into question the biggest robust economy. if the data out of dpermny continues to weaken, do you think germany has no choice but to give into spending and full blown quantitative easing? >> in terms of spending, it would be is sensible to have german stimulus and from the other that can afford the fiscal stimulus in the economy. the second part, i think that's conceivable. and if it continues, it probably

won't happen and even if it does happen, they're going further continuing to press sovereign yeel. it's not obviously going to do much good. >> james, let's talk about that. 6.5% on the greek bond, is that enough? >> well, i think the disturbance of running from the spread compression, we're in a different phase because of the recent data flow. for looking at our cross currency base, probably now isn't the time to be putting on risks. so within the euro area, i think the spread compression, it's possible we could see bunds a little higher as germany starts weak and gets more momentum. i think yields could drop, as well, yes.

coming up, no more pain at the pump. a drop in u.s. gas prices leave more change in consumers' wallet. he makes stuff up, he throws bonds and he acts like a 6-year-old. find out which legendary investor received the scathing review and what plans he has for apple. and red bull might not give you wings, but that line sure sticks. let us know your favorite commercial slogan. join the conversation on "worldwide exchange." we'll be right back.

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coming from the dovish statement today, suggesting there might be easing coming globally. the ftse 100 up 0.75%. germany up significantly almost 1.4%. france under 1%. >> and a check on the bond market, u.s. treasuries rose following the release of the fed minutes yesterday, which indicated that rates may not rise sooner than expected. you can see the ten-year yield at 2.3%. the ten-year bund yield at 0.89% right below 1%. >> and the dollar index is at a two-week low following the dovish fed comments. if you look at it against the yen, the yen has been quite strong this week, which has weighed on the nikkei. the forex rate on the way for you. and against the euro today, the

euro has strengthened, following the dovish comments, including the pound which was up earlier today ahead of the bank of england's decision. now, japanese companies are increasing their capital spending. this may suggest that the outlook for the economy is brightening. we have the full story from tokyo. >> thank you, wilfred. core machinery orders rose for the third straight month in august, climbing 4.7% from the previous month. this is far better than what economists were expecting. and it's good news will certainly be welcome by the government and the bank of japan. because recent indicators have been showing that the economy is struggling to recovery from the april consumption tax hike. at the bank of japan's monetary policy meeting on tuesday, governor koroda downgraded the boj's assessment of industrial production, saying it has been showing weakness. the questions dense index released tuesday indicated that the economy lost strength in august. the government said this may signal possible downturn.

now the upbeat figures of machinery orders offers room for optimism and the index is widely seen as an indicator of future investment by company. so given that it's climbed for three consecutive months, businesses may sense better days are on the way. back to you, wilfred. thank you very much for that update. >> shares in japan's largest restaurant operators skylark fell 5% in its tokyo debut. the company, which is owned by u.s. private equity firm bane capital raised 75.3 billion yen in its ipo. the group was delisted as parth of a management buyout in 2006. the industry has been under pressure the chairman said its customers have handled the tax priet well.

>> you've got wages growth and the ability to take some price helps a business like ours. coming up, we'll take a look at the markets ipo globally as volatility picks up. alex joins us at 11:45 cet.. and still to come on the show, a dovish fed helps emerging markets take flight. we look at which regions have the most potential, up next. i'm type e. my golden years will not just be gold plated. i had 3 different 401(k)s. e*trade offers rollover options and a retirement planning calculator. now i know "when" i'm going to retire. not "if."

islamic state fighters have advanced on the syrian border town. american officials said the town was still under control of the kurdish militia and we're monitoring the situation closely. washington and partner nations launched eight air strikes against militants overnight, but said air attacks alone would not be enough to defend the city. 21 demonstrators have been killed. proteters have criticized the president for failing to criticize the attacks by islamic state fighters on the border. turkey has so much avoided joining western campaigns and

they would only agree to commit if western forces will use force against president assad and jihadists. last week, royal dutch shell halted works on its works with gas promneft. my colleague sat down with the ceo of royal dutch shell. >> when there are sanctions in place, things become more complex, there is no doubt. but it often means we have to go through a process of clarification of what is possible and not possible any more, either. as far as energy is concerned, our energy product in the far east, the pressure hasn't been affected. i don't think it will become effective. i don't think the sanctions were designed to affect it. but, indeed, we have a small

conventional appraisal program in western siberia and in our appraisal program in the sanctions bracket and, therefore, we have to go through a process of clarification as to what we can and can't do. >> steve. >> let me just expand upon that, if i may. very good to see you again sir, as well. in terms of new -- like gazpron, rosneft and others, as well. can i take it, then, that all future projects in russia are on hold at the moment? >> well, steve, i wouldn't say all future projects are on hold. we continue to work on the extension projects of energy. we have two trains, we're looking at the third train. this is something that we have been working on at gazprom for many years. sometimes these projects take a deckade or more to develop. we have to take a long-term view.

therefore, we will take a long-term view, as well. the sanctions regimen requires us to do so. others will be exempt of sanctions because you have to bear in mind the sanctions program will be targeted. >> a dovish fed helped push the central bank higher. the minutes showed concern over deflationary pressures, lending to the idea that rates are likely to stay on hold for longer. let's talk about emerging markets. credit analyst at commerce bank now joins us. aposolo, given what we heard from the fed in its fed minutes now that rates will stay low for longer than expected, do you think we could see a rebound in emerging markets? illustrate has outperformed expectations.

the cost has fairley healthy returns, given better than the u.s. high yields. most of this part, actually, was because of the very low pressure of u.s. treasury yields. given that the fed has given -- they are still going to continue with a fairley easing monetary policy, this is going to be quite important. on the other hand, we shouldn't forget that emerging market credit up at year-to-date also that spreads particularly have -- significantly which do not leave significant -- for outperformance. it's going to be a more stable situation because the technical side, even if the fed changes the monetary policy and becomes a bit more aggressive, the technicals are still going to offer some support. the emerging markets are relatively underweight to the emerging market credit debt as well as a lot of the emerging market fans are still relatively

healthy, which are going, as i said before, to provide a technical support buffer and which measures are going to realize anytime soon. >> and only if rates don't go up immediately, we have the end of quantitative easing this mop it was talk of that happening that killed emerging markets. are we underestimating what might happen a little bit as we underestimate what it means this month? >> if the rates are starting to go up, it would start to be a reaction. the main risk is we are going to see liquidpy. obviously, we are going to see some devaluation and over the cost of funding for emerging markets is going to gradually rise. but we shouldn't forget that the rate rise process is going to be gradual, not really anticipating any major sharp interest rate rise in the u.s. and that is going to give some time for the

emerging market credit, corporates and banks who are just in the higher rate environment. what we also not fred is convergence on the emerging markets. the u.s. is going to raise rates first, but then the ecb is very clear that it's going to keep its rates for a very long time. what we have seen so far is a notable increase out of emerging markets, issuing under the euro denominated instrument. that instrument which obviously are more attractive pricewise and provides a better opposition. this trend is going to continue. also in asia, we have a more easing policies from chinese with the ongoing stimulus in china as well as the central bank in japan which may see a trend of emerging markets trying to top lower rates asia markets.

>> and let's move on to turkey now. the foreign policy they've got on their hands is pretty tough, isn't it? they have to manage their relationship with syria's allies. iran's russia is very important to them, with nato allies and indeed with their credit authorities in the country. >> on the threat of isis and the overall geopolitical turmoil in the middle east has so far not impacted severely the turkish -- and has been fairley sanguine. but we're not stopping to see signs of increased risk and further volatility. this volatility is has been intense phied, particularly if isis decides to make more direct attack on the turkish boarders. obviously, the situation remains unclear. foreign policy has been questionable. they have actually damaged a lot

of their relationships with their neighbors. but isis also may decide to enter into turkey just to provoke nato allies. and that will obviously is going to cause more volatility and we -- what we see today actually in the currency was the signs that actually are becoming more visible that we are perhaps going to go into such an event, which will have an impact on -- towards the border of turkish assets. but the good thing is fundamentally, despite increased challenges as turkey sees macro as well as corporate and banking position still offers some buffers to weight short-term headwinds. but clearly, the sentiment is going to -- within the next few weeks or so. >> thanks so much for that. credit analyst at commerce bank. >> the world bank thought the

economic impact could reach $33 the billion by the end of next year. the united states government has ordered five airports to start screening passengers from the region. this after the death of the first person diagnosed with ebola in the nation. >> this is a major new step the federal government is taking in order to try and stop ebola before it gets into this century. the five new precations will go into effect at jfk, newark liberty, d.c. dulles and atlanta hartsfield-jackson. the extra measures will start here at jfk on saturday. passengers arriving from sierra leone, new guinea or liberia will be questioned about their possible exposure to ebola. if they reveal possible exposure or reveal symptoms like a fever, they'll be taken to a separate room why they'll have further screening done by the cdc. if they are determined to be a

risk, they will be taken to the appropriate medical center. if they are not a risk, they will be cleared and they'll have to make a daily temperature log and give over their contact information. only about 150 passengers come here from those countries on a daily basis according to the cdc. they hope to get about 9 the 5% of their with the screenings. eye tall yap prime minister renzi has won a labor vote. a crucial leadership loss in parliament would have forced his regulation. european lawmakers have approved lord hill as the european commissioner in charge of financial services. the uk's candidate has been forced to face a second round of questioning with fears that he may be too close to the city of london.

>> it's quite a clunky process. it's not clearly what people have to do to fit criteria for these jobs. >> it's unfortunate. >> it tats a long time. they can shuffle around the powers and change it around. >> so far, tier in the green. bouncing back overnight, the u.s. led leading the charge yesterday as we had a more dovish sentiment allowing european markets to take constraints, as well. now, omts are illegal. the ifo's president and long time ecb approximated werner talks tough. we'll bring you more after the break. act i. scene 3.

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welcome to "worldwide exchange." i'm seema mody. >> and i'm wilfred frost. >> a kick start from the fed. european equities rally after european indices post their biggest one-day gain of the year. rates won't by hiked anytime soon. >> the fed minutes pushed the dollar lower. the ceo of royal dutch shell shrugs off the exclusive cnbc interview. >> oil is at the moment in decline. but, you know, when it comes to the oil price, you have to look

at it difficultly, as well. it has been remarkably stable for a long period of time, as well. >> mario draghi will take center stage in washington later today. an outspoken critic of the ecb tells cnbc the central bank has far overstepped its mandate. >> according to its opinion, the omt is illegal. that is the promise to repurchase government bonds of problematic countries. >> heavy metal alcoa kicked off the earnings season with better than expected results with higher than expected recovery in higher aluminum production. >> you're watching "worldwide exchange," bringing you business news from around the globe. >> and a big market rebound in yesterday's trade. the dow was down 275 points on tuesday, wilfred, but then a big come back in yesterday's trade. we had better than expected

earnings from alcoa. plus, fed minutes indicating that rates will not rise sooner than expected. >> and it's that aspect that really interests me. bad news is good news and it really begs the question, how positive, how supportive is the market dynamic if people are thinking, well, it's actually the policy that we need to react to, not the fundamentals? and that's quite a big change as we rewind four days to last friday and a positive employment report was positive for the markets. everything changed quickly. >> right. the fed keeping into account the stronger dollar as well as slowing growth globally. we did see that rebound yesterday. let's take a look at u.s. premarket trade. right now, implying a higher open. nasdaq up about 10, s&p 500 up about 5 and the dow jones up 22 points. it seems like that is a sigh of relief coming to the european markets, as well. we're looking at the ftse 100 up about 46 points. interesting to see the xetra

dax, the germ yab markets continue to move higher despite that negative read on trait on exports and imports in germany, currently up 107 points and a rebound in the german market after yesterday's fall. french markets showing a bit of green up about 28 points and italy's gain of around 86 points after we got that confidence vote. so a rebounds being fueled by earnings and the fed. >> absolutely. and i pointed out that the whole of this map in europe was red. today, it's all green if i discover portugal there in the corner. so equity markets very strong today like they were yesterday in the u.s. interestingly, that was also positive for bond markets. yields in the u.s. were pushed down. there was bond buying and equity buying yesterday. the yield on the ten-year 2.3%, that presumably a reflection of the fact that global growth is going to be bait lower. as seema said, not just u.s. conditions as to what they're considering at the moment.

the german bond has not kicked below that. 0.886%. ten-year gilt, 2.226%. we've got to greek yield, as well, 2.65%. not that much reward for one of the weaker economies in the eurozone. let's look at forex and the dollar just came back off a two-week -- comes back over the last two weeks from highs against the broader index, given that we're not expecting rates to go up as soon as perhaps we were a couple of days ago. the euro has bounced back 20 basis points today. the yen has strengthened more earlier in the week. it's not moved much today, but so far this week it's up about 1.3%. the pound strengthening a

fraction today, 1.619%. let's get an update on asian markets from sri jegarajah in singapore. good morning, sri. >> very good morning to you, wilfred. as you pointed out, a very broad turn around in the regional markets. we are seeing some sellers in the exporters. it has stabilized, modestly higher. i want to talk about hang seng. the market up by 11.2%. we got some news saying the occupy movement and the hong kong federation of students and scholarism are going to make an announcement around now, 5:00 local time about expanding their actions. it's being described as a new

phase. economically what form those are going to take we don't know at this stage. as to what mr. draghi and mr. fisher have to say tonight in washington, if we hear a dovish word from earth of those two, that could encourage more risk taking in the markets. members of the federal reserve open market committee have cited their concern that the phrase considerable time in the central bank's rate guidance could be misunderstood as a commitment. minutes of the september meeting show both to consider the timeline to be data dependent rather than a mechanical or fixed date. steve liesman wraps up all the details. global economic weakness in places like france and germany

is starting to be felt here, at the federal reserve's washington headquarters. and that could have an effect on interest rates. the fed in the minutes from a september meeting revealed concerns with floundering economies overseas saying, quote, economic concerns might be slower than expected if foreign economic growth came in weaker than anticipated, end quote. that was not the extent of the concern. they meb mentioned the appreciating dollar which has risen sharply since july. the worry is that a strong dollar will reduce inflation since foreign goods become cheaper in dollar terms when the greenback strength bs. this is troubling to a fed that has been struggling to hit a 2% inflation starting for the past five years and not succeeding. in fact, fed staff economists said the central bank may not hit that target, quote, over the next few years. >> the dollar's movement for monetary policies globally show the fed and it's keeping to the timeline on rates is affecting

markets which will affect the economy. combine that with oil and you get a sense the fed will be worried about inflation being too low. it will want to pull the punch away late, not early. >> all of that suggested to the markets that fed officials won't be so quick to pull the trigger and raise interest rates. the market currently anticipates around a mid 2015 rate hike, which would be the first in eight years. but there was concern of an earlier hike and the fed's worries about foreign weakness, it takes that off the table for now. all of this raises the stakes for the europe kwan central bank and its president, mario draghi, to come up with a plan to address the economic weakness on the continent. the ecb is currently putting a program in place to lower rates for private sector borrowers. but it's still in the works and the eurozone economies have weakened further since the plan was announced. that could mean the fed keeps interest rates at zero. draghi put the plan together to gain the confidence of markets. back to you guys.

and let's continue our discussion on the fed. greg mcbride, chief financial analyst joins us from new york city. greg, the dovish commentary we got from the fed, that sent u.s. stocks higher, global markets rebounding. do you think if the u.s. economy continues to strengthen, does the fed have no choice but to raise interest rates sooner than expected? well, i'm not convinced that it's going to happen sooner than expected. i think you saw from the minutes yesterday, you know, as well as other comments from the fed recently, that they're still focused on things like black in the labor market, the fact that inflagdz stays low. and we didn't really get any shockers out of the minutes yesterday, which is why you saw markets that have been addicted to the stimulus respond so sharply. they're going to have to raise short-term interest rates. >> were you surprised that the

fed mentioned the resilience of the dollar as well as the slowdown in rates as troens keep the rates low for the foreseeable future? >> not surprised about the mention of slowdown of global growth simply because that's been driving a lot of the volatility we've seen in equity markets in recent weeks and the fact that that has an effect on the health of the u.s. economy. i think it was surprising to see them mention the dollar at this stage. but, you know, it's certainly within their wheel house in terms of getting the economic landscape down. but the global growth issues have been driving the volatility in equity markets and keeping a lid on long-term interest rates. >> greg, how important is it that their increase is driven by growth and not inflation? >> i think that's critical. you know, if the fed is in the position where they're having to chase inflation, then we've got a real problem. and that is why -- that's really the position of the hawks. you know, the hawks are saying,

look, don't wait until you see inflation to start raising interest rates. you need to get out ahead of it. the doves kind of have the opposite view where they're saying, oh, there's still flack in the labor market, there's no hurry to start raising short-term interest rates. that's tug of war to start taking place. >> in the context of stronger economic growth, higher interest rates aren't necessarily a bad thing. a lot of people, particularly in the housing economic worry would higher interest rates put a further dent in housing? not if it's in the cop text of a stronger economy because it's the stronger economy that gets people to buy houses. when the economy stinks, nobody wants to buy a house. it doesn't matter how low rates are. >> greg, thank you. it's now time for wilfred's favorite time of the day. >> i really like this graphic. i think it looks great. >> it's an important day for traders. weekly jobless claims are out at

8:30 a.m. eastern, forecast to rise by 8,000 to a total of 296,000. at 10:00 a.m., we get august whole is a sale trade numbers. fed speak included includes james bullard, mr. fisher. as for earnings, pepsico, family dollar will report. parents waited a bit longer to finish back to school shopping this year. and later today, they will host the panel on the future of the eurozone live from washington. watch that live on closing bell as he speaks to the german finance minutester, italian finance minutester, david lipton and ian bremer. the on other top stories today, alcoa reporting

better-than-expected earnings as higher prices and lower costs drive the recovery in its business. the company is raising its 2014 outlook for the north american commercial transport market for the second time this year. >> we are firing, really, on all cylinders. we have the top -- the best performance ever really on all downstream business. on an absolute basis. and the best quarter since the start of the crisis. in the sikd half. >> right now, trading higher by around 6% in frankfurt. >> when was that? >> i think a couple of months

ago.. >> moving on, gap's ceo will step down. murphy is credited with reversing a long sales slump. the news comes as gap reports september same-store sales were flat and sales fell 3% at gap stores. shares fell maybe 9% in after hours trade and in frankfurt, they're down almost 6% today. >> amd is replacing ceo rory reed with coo effective immediately. the market share has been cut in half since reed took over in 2011 even as it expands into new markets such as game consoles and lower servers. some questions do remain as amd reports earnings next week. shares fell nearly 7% in after hours. right now, trading down about 4.6% in frankfurt. now, with the federal reserve will buy a californian

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energy drinkmaker red bull settled out of court for over $13 million after a consumer

took them to task over their tag line, quote, give new wings. the plaintiff acaused red bull of false advertising and said he saw no improvement in his physical performance or endurance since he started using it in 2002. it got us thinking to our favorite commercials and tag lines. we got a couple of your tweets. joe tweeting in my favorite commercial line, hungry? why wait. grab a snickers. and john tweets, one of my favorites is guts, glory, ram from a dodge truck ad voiced by sam elliott. sweet us,@worldwide@cnbc.com. you know what my favorite one is inspect it was in the 80s and it was part of margaret thatcher's campaign to get elected and it was labor is not working, a very clever one. >> she is highly respected. >> i tried to mention that to

someone else and they thought i was a nerd and perhaps that's more accurate. nowhere else picking up on it. anyway, let's give you an update on today's headlines. european equities follow the higher as fomc indicates it won't be hiked any time soon. alcoa kicks off u.s. earnings season with a bang in higher prices as they drive a recovery in aluminum production. >> its main asset is a 20% holding in portugal's banco espirito santo. you can see the portugal psi down about 0.1%. >> particularly for sentiment perhaps more than anything else.

british santo financial group used to have that 20% holding which, of course, bailed out a couple of months ago by the portuguese government which is a significant move over the summer. but this sentiment, given that it is a big name in portugal despite holing to anything to the bank itself. is that in part because it does hold some debt. that has filed bankruptcy today. portugal is the only market in the red on europe so far today. we're going to update you on another periphery country, and that's ireland which has sold 1 billion euros of ten-year debt at a record low yield. the ten-year funding cost, 1.63%. so now, ifo institute president

had long been a risk. >> the ecb has bought government bonds of inflicted countries. would the fed ever buy a californian government bond? >> no. or of any other state in america which is in trouble. the american principal is the possibility of bankruptcy and the bullish possibility of bankruptcy means that this shies away from states which overborrows. therefore, there can't be the overborrowing. so it's a correction of the market. we don't have thatgy giving these infinite guarantees.

and another man critical of the ecb and its role if bond buying has been the ubs chairman axel webber. he began by asking if he thought the european central bank has mishandled the central bank process. >> no, not at all. what i was saying is there are certain that are still there. if you want to eliminate those, it might be a measure of caution to put in some protective measures who are not in close companies that have closed ownership structures. in a way, it's adding to the playing field if you put some of these provisions in place. it's not a criticism of the ecb or the way they conduct the stress test. i think it's been very complicated. i think they're sorrow in the way they prepared that. they're determined to do this as

an important measure to gain confidence in the market. from what i've seen from the design feature, many of the weaknesses of the previous tests by the ecb are not there any more. >> we'll be hearing from mario draghi and stanley fischer later today on that note. take a look at u.s. futures after stocks rebounded in yesterday's trade. we're looking at the s&p 500, the dow and the nasdaq trading higher in premarket. mountain king"♪ the [beeping on the computer] peter come take a look at this. [beeping sounds are more rapid] [beeping sounds are even faster] mr. daniels? mr. daniels? look at this. what's this? the numbers they keep getting bigger and bigger. the clicks are off the charts. yeah the clicks are off the charts. yoshi, i'ts walt. we're back. yes sir! hi. [spoken in japanese] let's go! let's go! let's go! [spoken in japanese & english] i need more trucking. more shipping! more shipping! i need more trees! more trees? i'll get you more trees. hey! take a look at wood pulp.

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welcome back. you're looking at live pictures out of hong kong. a little bit of strength over the last four trading days. but that's been alongside other asian markets being stopping. >> it will be interesting to see if the protests escalate at all given this speech taking place right now. something we'll be watching. tim geithner will be back in court for a third day today in the lawsuit over aig's bailout. geithner, president of the fed in 2008 continued to defend the rescue of the company. he said the u.s. fought to avoid

creating a moral hazard. now at least 13 financial firms were reportedly targeted in the cyber attack to jpmorgan this summer. investigators believe hackers successfully stole data from a lease firm other than the jpmorgan. "the wall street journal" reports citigroup, e-trade, regional financial and adt saw inclusion attempts, but it doesn't appear any data was taken. president obama began getting periodic briefings on the cyber attacks this summer. let's bring in greg mcbride. how much of a concern are these banking attacks? >> this is the world we live in now. i think as consumers, it underscores why we have to be vigilant. maintain strong passwords, keep a close eye on your accounts,

your bales, make sure everything is in order and if you see anything amiss, notify the institution promptly. from a liability standpoint, as long as you do that, you're fine. that worry is more for the financial institutions and less for the consumers. we have to be vigilant. unfortunately this is a reality of the world that we live in now. >> greg, thanks very much for joining us today. much appreciate it. and still to come on the show, millions of american drivers are enjoying a surprise stimulus at the pump. will lower gas prices rev up consumer spending? we discuss that after the break.

welcome to "worldwide exchange." i'm seema mody. >> and i'm wilfred frost. >> rates will not be hiked anytime soon. >> the ceo of royal dutch shell shrugs off the lower oil prices. oil is said to be in decline. when it comes to the oil price, it has been remarkably stable

for a long period of time, as well. >> heavy metal. alcoa kicks off the earnings season as higher prices help drive the recovery in aluminum production. carl icahn has a new message for apple. he's pressured the iphonemaker over buybacks and dividends plans to send an open letter to tim cook today. >> 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 "worldwide exchange." it was a rally, a rebound, if you will, the s&p 500 and the nasdaq having their best day in a year after the fed said it does not plan to raise interest rates until the economy can support itself. so a sigh of relief across wall street. you can see the dow futures indicating a higher open by around 30 points. s&p 500 up about 5. the tech heavy nasdaq up about

14 points. let's take a look at the ftse cnbc 300 index, a good gauge of stocks around the world. interestingly enough, we've seen that index move lower in previous trade. but right now, it was up about six points. we'll move on to that to the european markets and get you a check on that index in a second. as you can see, those dovish commentary coming from the fed. that supporting european markets. we're seeing green across the screen with the ftse 100 up 41 points. interesting to see that the xetra dax, the german markets moving higher, this despite the weaker than expected economic data we got out of germany earlier this week. and to that, we also learned that a drop in exports were seen in the month of september for germany. the largest plunge since 2009. some analysts attaching that to the russian/ukraine instability. members of the federal reserve over the market committee have cited their

concern that the phrase considerable time in the central rate's bank guidance could be misunderstood as a commitment. the hikes are shown to be data dependent rather than a mechanicaler or fixed state. despite ongoing uncertainty for the u.s. economy, american consumers are enjoying an unexpected stimulus at the pump. a tank of regular gas now costs, on average, $3.27 a gallon. down 13 cents from a year ago. earlier this week, the average price in missouri dropped below $3 per gallon mark, the first time any state has dropped below that crucial price since january. >> seema, let's put that number in perspective, though, for drivers here in the uk. average uk petrol price stands currently at 1.27 pounds a liter which converts to about $7.80 a gallon, significantly higher than in the u.s. a lot of that comes from taxes

here in the uk. and let's have a look at those prices. $3.26 compared to $7.80. surely the u.s. should be stumbling up its tax rates on gas. i am surprise. $7.80 a here in the uk. i am an avid user of the cube. you were also complaining about how expensive taxes are. in an interesting debate, we'll bring in avery ash, the director of federal relations at aaa. avery, how correlated with the pump prices for gas to crude operators of oil? >> there is a pretty substantial correlation there. you know, we've certainly seen over the last several months that as crude prices have drifted lower, that we have seen gas prices fall. it's usually about a week or two lag between crude prices beginning to fall and gas prices

moving lower for consumers. >> do you think, avery, that will result in consumers spending more in the next coming months? >> well, we're certainly seeing a result in some consumer optimism. motorists, it's no surprise motorists don't like to pay more at the pump. as gas prices have risen each of the past several springs, we've seen that level of motorist frustration has price ves crept up closer to $4 per gallon. we haven't surpassed that since 2008. but as as prices move lower, we tend to see that consumer confidence rise. for every sustained drop of a pen knee per gallon, we usually see a correlation of about a $1 billion more in the economy over the course of the year. that's over the course of a year. we've seen prices drop about 40 cents since the beginning of july. that's a substantial savings for consumers. average household consumes slightly over a hundred gallons per year.

so when you translate this drop into a household basis, those savings may not be in the magnitude of hundreds of dollars, but we're talking about savings for consumers. and also it's a pain threshold. when you go to fill up your car, when you see those numbers ticking lower, missouri is now -- the average price in missouri is now below $3 a gal crone. that's a serious psychological point for many consumers. and i'm from oregon and i'm looking at the heat map with the average price of gas across the nation. the west coast seeing a pretty high price. why is the west coast higher than the east coast when you look at the price of gas? >> yeah. and a lot of that ties back to the state tax -- to state taxes and hire state taxes on the west coast certainly lead to higher retail prices for consumers there. we have also seen prices on the west coast being stubbornly high over the last several months.

that's in large part tied to some refinery issues we've seen towards the end of this summer that have been lagging and have caused some tightened up supplies. now, over the last several weeks, we've seen provideses falling in those regions, as well. so even motorist in oregon have seen prices ticking lower over the last several weeks and our expectation is that they will continue drifting lower towards the end of the year. >> avery, we're talking about tinny tax differences between the east and west coast when you consider europe and the uk as well as we've showed earlier. the huge differential in prices. if america is really serious about fuel efficiency and really serious about improving the economy, shouldn't they double the tax price and push consumers into more fuel efficient cars? >> i mean, if we're serious about improving the economy, i think the idea that doubling the gas prices would not be a particularly great way to boost the economy when you're talking about taking money out of the pockets of american consumers. >> verifying avery, thank you

very much. >> thank you very much. crude came off a 27-month low today. the fer could hold off on raising rates. sri jegarajah sat down with the royal dutch shell ceo and asked for his view on the current price of barrels of oil. >> oil is, at the moment, in decline. but you have to look at it a different way, as well. it has been remarkably stable for a long period of time, as well. when it comes to oil prices for an assessment planning, you basically have to take a long-term view. our assessments basically run deckads. and we see prices over the longer run still being very, very robust. and we got more flashes out of hong kong. the leaders -- the pro democracy legislators have announced a, quote, new era of

noncooperation. that is following on from the ongoing protests in hong kong. and although they've died down slightly over the last week, there is still a significant presence there. >> let's take a look at the other top stories on our radar. alcoa, third quarter werings as high he aluminum prices and lower cost drill away in the recovery business. revenues rose 8% beating estimates. the company is raising its outlook for the north american commercials transport market for the second time this year. >> we are firing, really, on all cylinders. we have the top -- the benefit performance ever really on all downstream business from an absolute basis as well as on a margin base. we saw an increase in profits year over year and the best quarter in the upextreme business and our commodity business since the start of the second half of '08 when it really started to get weaker.

>> alcoa shares rising 2% in after hours on the stronger than expected earnings report. right now we're seeing shares higher by around 6% in frankfurt. now, activist investor carl icahn has called on am in the past to spend its huge cash balance. now he has an interesting letter for the ceo. details on that after the break. with universities across the state. for better access to talent, cutting edge research, and state of the art facilities. and you pay no taxes for ten years. from biotech in brooklyn, to next gen energy in binghamton, to manufacturing in buffalo... startup-ny has new businesses popping up across the state. see how startup-ny can help your business grow at startup.ny.gov

apple, a big mover in yesterday's trade. carl icahn is not quite done with his relationship with apple just yet. the activist investor tweeted on wednesday, he'll be sending an open letter to tim cook today, saying he believes it will be interesting. apple declined comments. in the past, icahn has pressured apple to return more cash to shareholders by increasing its buyback and dividend. icahn tweeted it's been a year since his fund announced a large position in apple and the stock is up about 50% since then. so carl icahn, he's done pretty well with apple, wilfred. >> indeed, he certainly has. if he's sending this open letter, i can't believe he'll be criticizing him too much. up 50%. there's other news, as well, from apple that they will be having another meeting. they've invited guests to headquarters next thursday for an event a lot more than a month

after it unveiled the iphone 6 and the apple watch. there are few hints to what's in store with just the brief message, it's been way too long. analysts expect apple will roll out new ipads which may include an apple pay feature and the fingerprint feature. it may show off the oxs software for the mac. i want to see a significant improvement in apple tv, seema. >> interesting that we're getting launch event just after that iphone 6 event in early september. i'm hearing security may be one of the focal points for apple with their ipad given the recent concerns over leaked photos and whatnot. >> and the other big question is what unlike the open apple if whatever they release will be around for the christmas season. moving on, the cyber attacks that hit jpmorgan this summer was broader and as many as a dozen financial firms may have been targeted by financial

hackers. kate is at cnbc headquarter with more details. >> good morning. it appears the same group of hackers who struck jpmorgan compromising accounts of some 83 million u.s. households and small businesses tried to break through the virtual doors of other financial giants. in an s.e.c. filing, jpmorgan says the company's security was strong enough and the hackers weren't able to access more sensitive data, such as account numbers, passwords, user i.d.s or social security numbers. they also struck the likes of citigroup, e-trade, regents financial and adp. it doesn't appear the hackers were able to reach online defenses, despite repeated attempts. adp, which processes the paychecks of one in six americans, says its team watched incoming traffic and were hit by the same group that hit jpmorgan. fidelity investments was

targeted but the company says nothing was stolen and it has multiple layers of security to protect customers' accounts. the "new york times" reports president obama and his top national security advisers began getting periodic briefings on the cyber attack at jpmorgan this summer. but no one has been able to tell the president what he most wants to know, the source of the attacks and the motive. the fbi has begun a criminal probe and the secret service is involved. the financial industry was ranked fifth among the top ten hackers last year. security experts say it's possible the attackers had specialized knowledge about the system used by the financial firms and it is also possible they were svrmly trying to make a point. moving on, tim geithner will be back in court for a third day regarding aig's bailout. on thursday, geithner, president of the fed in 2008, continued to

defend the rescue of the company. former fed chairman ben bernanke is spec'd to also testify later today. and these are your other headlines. european equities follow the markets higher as fomc rates indicates will not be hiked anytime soon. help by driving slight rebound in crude, and alcoa kicking off u.s. earnings as priceses drive higher as a recovery in aluminum production. coming up, dave & busters gets ready to hit big. we look at the booming ipo market in the u.s. after the break. [ male announcer ] ours was the first modern airliner, revolutionary by every standard. and that became our passion. to always build something better, airplanes that fly cleaner and farther on less fuel. that redefine comfort and connect the world like never before. after all, you can't turn dreams into airplanes

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drinkmaker red bull has settled out of court after a mrr took them to tag over their wings. the plaintiff accused them of false advertising and said he saw no improvement in his athletic strength or enduring since he started using the product in 2002. so aside from giving us a good laugh, it got us thinking about commercials and our favorite slogans and tag lines? what's your favorite commercial? let us know. if you want to join the conversation here on "worldwide exchange," get in touch, worldwide@cnbc.com or via twitter @cnbcwex. slade tweeted in to saycommerci. >> i haven't seen any.ve you se? >> they're quite popular in the u.s. there's a duck and he says aflac. >> what are the other ones? what are your favorites? >> well, i want to quiz you, wilfred, what are some of the iconic tag lines and if you know which company it helps. melt in your mouth not in your

hands. >> m&ms. you asked me that one earlier. >> just do it. obviously. >> nike. what can brown do for you? >> gosh, i don't know. which one is that? >> that's u.p.s. the delivery -- >> get in touch with us. what are your favorite tag lines? funny one is or ones that have worked to make you buy the product. worldwide@cnbc.com or @cnbcwex on twitter. and let's take a look at u.s. futures. on the back of the fed minutes, pointing to a higher open, the nasdaq up 11. and let's get to a rundown of what to watch this trading day. weekly jobless claims are out at 8:30 eastern, forecast to drive by 8,000 to a total of 296,000. no less than five fed officials are speaking today, including fed vice chairman stanley fischer who is taking part in a

st discussion with mario draghi. >> watch that live from 1700 cet on closing bell as he speaks to the german finance minister, italian finance minister and larry summers. david & busters is set to price its ipo today and start trading under the ticker symbol dbal. it will offer 5.88 million shares priced between $16 and $18 each. oak hill capital attempted to go public in 2012 but abandon the plan citing market conditions. this as the u.s. heads for its highest activity since 2000. the reports suggest the listings could help create a quarter of a million jobs in the u.s. this career. let's bring in alex.

thanks for joining us this morning. we've been seeing a surge in the u.s. ipo market. how much has this been driven by the jobs act? >> we shall there are two key provisions of the jobs act that has stimulated this activity. the first one being the testing the waters and the second one being confidential filing. we believe that created an opportunity for middle market companies to take advantage of a surge in ipo markets. and, alex, i wanted to jump on another point you made in your notes. that is that ipos have been found to create an average of 822 jobs, ar cording to research. is that new jobs post ipo because of the capital raise or just referring to the fact that these companies already are doing well and helping the jobs market?

>> our research indicates that those are new jobs. 255,000 jobs is significant, especially when we're talking about stimulating the middle market. >> alex, alibaba raising about $22 billion in ipo proceeds. what is your forecast going forward? do you think there's still enough liquidity in the system to support ipos or did alibaba suck all the cash out of the market? >> well, our research indicates that they're in the third quarter of 2014. health care and technology represented about 60% of the corporate ipo activity. we believe that the ipo window is open. and will continue to remain open through the remainder of the year. so we believe there is continued opportunity in 2014. >> and what is exactly driving this big push for ipos in recent weeks and months? is it liquidity, strong valuations or the fundamental strength of the u.s. economy?

>> well, we believe it's a combination of factors. we believe that the market has improved. there are low interest rates currently and it's an opportunity for investors to get higher opportunities in the market. so when we look at the increase in middle market ipos, we're talking about putting a significant amount of money in the hands of middle market companies which further creates jobs and fuels growth in the economy. >> all right, alex, thanks so much for your to him. managing partner at cone reznick. do you think the best performing ipo this year? >> i don't. tell me. >> gopro. up about 240%. >> i didn't know it was that much. let's have a look at u.s. future. what are they doing ahead of the open? expecting an open up of 9 points on the dow, are youly flat on

the s&p and up about 12 points on the nasdaq. that's all we've got time for today. i'm wilfred frost. >> i'm seema mody. "squawk box" is coming up.

good morning. welcome to "squawk box." if fed, they've still got it, don't they? the dow having its best day of the year, surging 274 points. this is, you know, your mother, your sister, you're up, you're down. five major airports are going to start screening travelers from ebola ravaged countries while the first death of the dallas patient, the first death n united states is raising questions about a delay in treatment.

and carl icahn, tweeting something about apple in an apparent open letter he wrote. it's thursday, october 8th, 2014. "squawk box" begins right now. good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen. andrew is off today. let's get right to the markets. the latest fed minutes fueling a rally on washington street yesterday as stocks turn in their best day of the year. it was a broad surge. the yield of the ten-year t note falling to its lowest level since june 2013. take a look at where the u.s. stock futures are this morning. they are indicated higher once again.