a very warm welcome to "worldwide exchange." i'm wilfred frost. . >> and i'm carolin roth. these are your headlines from around the world. >> nowhere but down from oil. wti falls to its lowest level in nearly 2 1/2 years, significantly weighing on european energy stocks. slowing sales on europe. hugo boss falls more than 5% as it kits its profit outlook while revenue growth slumped to the lowest level since 2009. silicone valley is the command network for choice, from

terrorists. that's from britain's science chief as he slams u.s. tech company for turning a blind eye to misuse of their services. and u.s. voters head to the polls today with the key midterm elections deciding which party controls congress and whether there will be two more years of political gridlock in washington. >> you're watching "worldwide exchange," bringing you business news from around the globe. >> and we have to kick off with our top story, which is oil today. of course, it's down 27% since it peaked in 2014. >> june and down over 10% since the start of october, down 1.6%, as you can see so far today. really, quite an astonishing move yesterday. in fact, it was up at the start

of day when the saudis announced they were going to be increasing the price to the far east and then they announced they would be cutting to price to the u.s. seeing a sharp sell-off as we went through the course of the day. even though i think there's a bit of complacency in the long-term oil price, in the short-term, there's no sign of where the floor could be. particularly given the next opec meeting was until the beginning of the month. >> yesterday we had a guest on the show saying he's bullish on oil prices and there could away floor, yet right now it's difficult to see that floor materializing. at this point in time, the saudis opec is not talking about any cuts in oil production. and you would think going into that november 27th meeting, they would sound something along those lines. but they haven't. they've been absolutely silent, absolutely mum, and they're doing that by cutting prices. it's essentially a game of chicken between the saudis and

the u.s. >> absolutely. since the start of october, the correlation in all the different energy price commodities, brent down 10%, wti down 14%. to me, that suggested a little bit of panic in traders and that might suggest that in the short-term we had a bit of an oversell. >> but you know what we really don't talk about? we haven't talk about what this has been to the u.s. economy. if we're seeing the price of gas per gallon, this is now well below $3. this is significantly -- household income. i believe the number that was chucked out there was close to $50 a month. this is a significant thing to consumer spending, isn't it? and no one really talks about it. >> absolutely, absolutely. significant commodities down and i wonder what that means for equity markets.

>> well, this is what it means so far today for equity markets. we're in the green. we're up 0.4% on the stoxx 600. just been a bit of strength throughout the day. opened about flat and we're up best part of 0.5% as i just said. the one that is up for most is the one that was down the most yesterday. italy is up 1%. otherwise, just slight gains across the board. germany up 0.5%. the ftse 100 up 0.25%. we are looking for important data in about an hour aerps time out of europe. we have the economic price and nothing too significant ahead of those in an hour's time. let's look at bonds because we did get a decent enough move in the u.s. ten-year treasury yesterday. we're now at 2.33%. yields just ticking up. bond prices coming up. slightly bullish data coming out of the u.s. even though equities in the u.s. were broadly flat.

but bond prices just coming back, yields ticking up. a similar trend, we're at 0.3% in the german ten-year. that's a little higher than we were about three weeks ago. nonetheless, still those low yields suggesting there are fears about global growth out there. the ten-year in the uk, 2.24%. forex, we've just seen the u.s. dollar come off against a couple of currencies today. against the aussie/dollar, 0.5% of gains. the euro/dollar, 1.2505. that was touch ago two-year low. yesterday just bouncing back. also bouncing back today is the yen, bounced back 0.35%. yesterday the yen did touch a seven-year low against the u.s. dollar. unsurprisingly, it bounced back. what wasn't trading yesterday was the nikkei which today has

hit a seven-year high. 2.7% of gains. that follows friday, which had almost 4% of gains following the bank of japan's decision to ease unsurprisingly, given huge impetus to the nikkei friday and yesterday. will that put more pressure than normal on mario draghi to announce similarly surprising easing measures from the ecb later this week? >> u.s. tech companies have become, quote, the command and control network of choice for terrorists. >> robert hannigan says some social media firms are, quote, in denial about how their services are being misused. many of these companies are gathering in dublin at the webb summit and seema mody joins us from there. this is a very strong comment

from the head of that organization. what is the reaction in dublin, seema? >> absolutely, carolin. this comes at a time when several entrepreneurs as well as tech titans from around the world are here in dublin to discuss and brainstorm ways to use technology to make our lives more efficient. we talked about social media, a powerful way for individuals to interact with one another and basically consume information. what type of regulatory force is needed when good technology is being used by individuals who have bad intentions? is it the role of government or the role of tech companies that are creating and building these platforms for consumers to use from the two social media start-ups i spoke to this morning, they said the onus is really on the tech companies to take charge of their data as well as their platform to ensure that they're constantly monitoring the data that their consumers are building on their

websites as well as making sure their platforms are being used for good intentions, not bad. back over to you. >> seema, thank you so much for that. stay tuned from our ongoing coverage in dublin. up next, we'll speak with john sculley, followed by jay bregman. then at 11:45 we speak to john sculley. later on in the day, cnbc will be speaking to eva langoria, enda kenny and abigail disney. and staying on the tech theme, apple is preparing a new bond sale for the first nondebt ever issued. they're working on a two-part euro dominated deal to raise a

total of $1.2 million. deutsche bank and goldman sachs have been hired to handle the transaction. we have had some news out on the wire in the last hour or so suggesting the eight-year bond could be priced at roughly 1.2% and 1.8%. we might see global profits doing much more of this, issuing debt in other places where, you know, interest rates are much lower. >> it certainly makes sense for apple. does it make sense for the investors to come in and buy the paper at this point? because remember, back in 2013, we saw that massive dollar bond offering from apple. the timing was impeccable, it really was, because we saw a bond sell-off and some investors lost a lot of money on that purchase. will it be the same sort of timing this time around? do you really want to invest in that? because it seems as though apple seems to have a good neck in terms of timing. >> they do, indeed.

and it seems at the moment structurally the dollar is strengthening. i suppose they are protected because they have significant revenue necessary europe to offset any costs they have. but, of course, currencies have move very quickly when they issue bonds in different countries. >> and let's change tack. a series of polls show the republicans taking control of the u.s. senate in one of the most contentious and expensive midterm elections. nbc's chuck todd reports. >> that's what we want to change. >> as candidates around the country rush to make their final push, control of the senate hax in the balance. voters are conflicted. if i say washington, what do you say right now? >> fighting and poor performance. just a plain mess, an absolute mess. >> that feeling is why eight of the most competitive senate races are within four points and a whooping half of the nation's 36 governor's races are too

close to call. and voters tell us they aren't happy with the campaign. both parties catering to their base rather than focusing on the two issues that they say matter most. in our latest nbc news/"wall street journal" poll, washington gridlock and the economy are tied as the most important issues for voters. >> i would like to see both sides working together. there's a lot of division between the two. you've got to step across the aisle and work together on things. >> it's the president that is taking the brunt of voter anger. his approval rating in our latest poll, only 42%. >> this is what happens when you do not lead. if you're not going to be a genuine leader, whether you're right or whether you're wrong. >> republicans are using the president as a political pinata in just about every competitive state. despite president obama's lows, republicans haven't put this election away just yet. a late surge of democratic enthusiasm has turned this election into a surprisingly close contact.

>> gridlock is something that both parties own. the republican party in particular and that's hurt the republican brand and it's made these races closer. >> still, republicans are poised to have a good night tomorrow. the question is if it's enough to take the senate. >> so we talked about it at length yesterday, the huge coast associated with it. $4 billion. wow. and then it might be a tie, it might be a 50% vote been it might be a very slim victory for the republicans. so on those two fronts, it may just be a tight race. does it makes sense to invest into stocks based on the historical performance of markets on the back of that? and apparently it does. i've got some interesting data from here from credit suisse. they found out in the midterm election year the s&p has seen after average of 7.4% in the 100 days after a general election day or returning at least 17.8%

in the subsequent counting. >> it might be coincidence. i'm not sure. the thing i find interesting about this is how polarized the politics are in the u.s. that makes this vote and the upcoming votes we have across key markets fascinating over the next six months or so. >> all right. >> now, president obama met with fed chair janet yellen at the white house on monday. they discussed the outlook for the u.s. and global economies, as well as implementing wall street reforms. this is the president's first face-to-face meeting with yellen since she took over the fed in february. president obama leads to asia this weekend where he'll attend the latest g-20 summit. and still to come on the show, alibaba is due to report earnings for the first time since going public.

can the e-commerce xwient keep its magic touch with investors? connegligental profits hit reserve as the auto partsmaker takes a wipe down. we speak to the cfo first on cnbc. that's coming up in the next hour. and the race is on as u.s. polling stations open. we ask whether republicans will take control of the senate. we'll cross to washington for the whole story. synchrony financial partners with over two hundred thousand businesses, from fashion retailers to healthcare providers, from jewelers to sporting good stores, to help their customers get what they want and need. banking. loyalty. analytics. synchrony financial. engage with us.

bmw profits slipped slightly in the third quarter. but the company affirmed its outlook for the full year, forecasting a significant increase in sales and earnings. nonetheless, shares off 1%. continental is up 2%. it says it can still beat its full year target despite a drop nernings. we'll get the full story when we speak to the cfo of continental at 11:15 cet. so stay tuned for that. now, hugo boss off significantly, down 6%, after the german fashion group cut its sales and profit outlook for 2014, citing weakness in its home european market.

l'oreal down 2%, shares suffering after posting its slowest sales growth since 2009. now, stephane pedrazzi joins us from paris with the full story. good morning, stephane. >> good morning. let's have a look first at the region. l'oreal preferred weaker than expected sales in europe and also in north america, mainly because of the poor consumer confidence in europe but also because of the weather conditions last summer which had a negative impact on its sales. that is the case for the french markets. nine -- of product which is by far the main one. whether there was a weak performance on the quarter with a negative growth, down 0.4%. luxury segment was up 5% in the quarter, but that's much weaker than the performance in the second quarter. l'oreal believed the demand for the market will pick up in fact

last quarter of the year, which is going to be the strongest one for 2014. it's usually a strong quarter every year. but lori el believes the brand and the company will bounce back. the ceo says the trading conditions have improved since the end of september in europe and also in the united states. all in all, he believes l'oreal will absolutely outperformance the global cosmetic market this year, which will expend between 3% and 3.5%. l'oreal is looking for acquisition development, would boston its like for like growth. the announcement was made yesterday after the market closed. t the. gloen glencore has announced an 8% on its outlook.

the mining giant said its trading arm prvrms within forecasts. glencore up by 1.25%. let's get more discussion of those numbers with paul gates, senior analyst for metals and mining. good morning to you, paul. >> i think one of the inches is around thermal core reduction. just what the supply kind of profile should be from these mining companies into a weak commodity price environment. glencore has been critical of some of its peers. i think there will be some perhaps looking at the coal numbers here. yes, and of very strong production growth, but questioning whether or not they should be looking to reign in some of that growth, given where the thermal coal price is. i also think perhaps the ramp up of their flagship come pro project an asset they inherited

as part of the xstrata position, perhaps the growth has not been quite as rapid as some would have hoped, particularly given the comments that we've had from the grooul group over the last few months. >> and you say copper is also up about 8% largely because of operations in africa. is that significant or is that as expected. >>? >> look, i think it's hugely significant if you go underneath those numbers and look at the strategy of what's happening in the copper market and glencore's position in it. and for me, that is one of the key aspects of the story. but also if you look at peru, the peruvian production is also up. these are the new frontier locations that are going to have to offset some of the declines that we've seen in, say, chile, as the mining conditions get harder there. and it's to glencore's credit, i think, that they've taken that risk firmly and they've shown they can deliver production growth from regions that other mining companies would find too challenged to operate in.

>> i've got a copy of your recent notes here. we're looking at glencore q3 production. we're looking at numbers on copper production, zinc production, this is now a globing mining conglomerate. it's not a trading company any more. >> no. look, this comes from the mining business, from the hard commodities. the trading business, that's a third of the company's combined value. but really this is an industrial business focused on all three key base metals, copper, nickel, zic, and with a significant presence in coal, as well. it's also the lack of iron ore that differentiates this from the likes of rio tinto, bhp billiton, so on and so forth. >> you stul got an outperform rating on glencore. what if glencore never gets its hand on ire assets? what if that doesn't go through, can you maintain that rating?

>> look, i think the fundamentals for this commodity are very strong. it's just if you look at the relative performance of the commodities, that glencore is exposed to versus the commodity that's rio tinto is exposed to, there's a gap there. more people think there will be a greater recovery in the base metals than the opening of iron. that said, iron ore is a fabulously lucrative business to be in and it is generating huge cash flows for the likes of billiton and rio tinto. so when you combine the portfolio, they've picked up as part of that acquisition and they're going to continue, i'm sure, looking at ways they can get into the market. >> do you think there will be success to get hands on rio tinto? >> look, i think that depends, really. i think the fate of this is in rio tinto's hands.

if we get the recovery people are expecting in iron ore, that takes a lot of arguments away. if, on the other hand, the iron ore price continues to stay in the doldrums or loses more ground, you'll have a number of people, i'm sure, looking to a different strategy as a means of trying to create some strength back into that commodity market. and that mays, of course, squarely into ivan's hands. >> thank you very much. >> let's stay with earnings. santander has posted a 32% rise in profits. that is thanks to a drop in eurozone. net profit at its uk unit increased 3% on the quarter and the stock is up by 1.2%. >> jpmorgan says the justice department is conducted a probe on its stock trading activities. jpmorgan says it's kwording with

authorities. the company is raising the top end of its estimates for legal reserves to $5.9 billion. jpmorgan trading flat in frankfurt trade. former ubs executive has been acquitted by a florida jury in a tax cheating trial. he was accused of conspireing with wealthy americans to hide $20 billion in offshore accounts. the jury took about an hour to reach a verdict after a throw-week trial ended abruptly on monday when wells' attorney decided not to call any witnesses. now, nunkin doughnuts are rolling out a few doughnuts to help increase the roll on your waist line. we would like to know what holiday foods would you like to

see made into a hot drink? john tweeted in saying there is only one, it's eggnog. happy holiday toes all at "worldwide exchange" and cnbc. thank you very much, john, and the same to you. if you want to join the conversation, get in touch with us by e-mail, world would it@cnbc.com or@krns wex. carolin, what about you, what's your favorite holiday drink? >> i don't know. i want to see something with ginger or chili in it. >> how about a mauled rum? >> i can't really talk about that now because it's too early. maybe after the show. coming up, will investors be dazzled by the set of earnings out of alibaba? that's coming up next. stick with us.

no one but down for oil. wti is at its lowest level in nearly 2 1/2 years, significantly weighing on european energy stocks. slowing sales on europe weigh on the latest earnings releases. fashion house hugo boss falls

over 6% as its cut its outlook, seeing revenue growth slump to its lowest level since 2009. silicone valley is the command network of choice for u.s. terrorists. silicone valley is slammed for turning a blind eye. u.s. voters hel head to the polls today with the key midterm elections deciding which party controls congress and whether there will be two more years of political gridlock in washington. and we have got the uk construction pmi data, which have come in at 64.2 in september and has fallen to a five-month low of 611.4 for october. having been forecast to come in at 63.5, so quite a significant drop in that number. more than expected, as you can see. sterling/dollar is at 1.5986.

it's just off the back of that. it's not, in fact, at session lows with that number coming in at 514. >> still, it is the 12th consecutive month of the reading above 60 and that is very, very strong, compared to some of the other pmis that we're seeing across europe. so yes, it is a little bit of a blip. overall, economists aren't going to be too worried about it. >> this is coming in below expectations to a five-month low in october, but britain's construction industry is still certainly in positive territory. there is sterling. let's move on and look at some of the other currency pairs so far today. as we said earlier, the dollar has given up a bit of ground today. it hit a number of highs yesterday just given up 20 basis points today. hit a seven-year high against the yen yesterday, just given up 0.5% today. dollar/yen is at 113.52.

let's look at bonds. the u.s. treasury yields just ticked up yesterday. there was a bit of positive data out leading to bond prices to pull back a little bit. 2.34%. germany 0.83%. and in the uk, 2.25%. >> and in the equity markets, we're seeing a risk being add back to portfolio in terms of equities. ftse 100 is up by 0.25%. the xetra dax higher. this certainly is a rebound when european markets were off by around 0.8%. the ftse mib was one of the worst decliners yesterday. as we mentioned before, some of the energy plays, they're definitely underperforming because of that continued drop normally prices. the euro docks 50 is looking like this. we've got the index up by 0.4%. we're not too far away from session highs. now, the markets in japan are still feeling the rush from

the bank of japan's halloween treat last week. >> the yep is trading in the 113 range. the nikkei soared to another level not seen since 2007. the timing of the bank of japan's decision to unleash additional stimulus couldn't have been better. two days earlier, the fed decided to end its bond purchases. gpif, japan's massive public pension fund revealed its strategy. it should be noted that they want to see the plan consumption tax hike go ahead next year and positive market developments would make it easier for prime minister abe to make that happen. today, a government advisory panel began discussing whether to lift the sales tax rate to 10% as planned. the panel members come from a variety of backgrounds including

academia and business. five were in favor of the hike or three were against or argued for a postponement. back to you. >> thank you very much. staying with japan, japanese telco's softbank revealed it logged a one-time gain in the listing of alibaba. the company, which has a 32 stake in alibaba, revealed its first half results. alibaba's expectations are high, due later today at 12:30 cet. shares are up 45% from the e-commerce giant's listing price, giving it a market value of $246 billion. seema mody joins us from the webb summit in dublin now with a preview of those results. seema, it will be very exciting

to focus on the fist results from alibaba since it listed. >> absolutely, wilfred. as you were just pointing out, expectations are high ahead of alibaba's reportings of a public company. it hit an all-time high yesterday ahead of its earnings report. expectations again very high getting into this earnings report, aside from beating expectations, wilfred. from the investors i spoke to, here looking for ways or want to see if alibaba will continue to grow in china's fast-growth retail market. so can alibaba continue to grow in china's internet market? that will be the big question, especially given the economic slowdown that china is wpsing right now. is that impacting alalibaba's business or are consumers still logging on and using the platform to buy goods? that has been one of the questions. there's been reports that

alibaba's platform may partner with apple. but, of course, as we get clarity or comments on that, that will be a focus, as well. also something that you and i have spoken about before, alibaba's expansion outside of china, does alibaba have a brand name that resinates with customers here in europe as well as in the u.s., that's something that analysts say will be in focus, as well. not just alibaba's ability to grow in the chinese market but, again, what is alibaba's global expansion plans? that will be something to look out for, as well. wilfred. >> thank you very much for that. we want to discuss alibaba a bit more now. cynthia, i've been looking through some of the headline numbers. we all know that they've got 80% market share in e-commerce in china. yet they're still only selling to 25% of china's population. does that underline the huge opportunity they still have in their core business, in their core market? >> yes, of course.. that is our investment

alibaba. we estimate alibaba is selling to around 25% of the total population. in ten years, we're expecting they're going to be selling to well over 50%. of people in china. the potential is very high. as we see internet penetration right now in china is only 50%. that's going to go up to maybe 85%, 90% in ten years. this is going to take up a lot of players. >> cynthia, i get it. the fundamentals clearly are in favor. if we look at the trends, they're undeniably good. but what about some of the corporate governance issues that investors have fretted about? we're completely ignoring that. why is that, because now the stock is up, what, almost 50% from the ipo.

>> yes. we pointed out the risk to these investments, the corporate government related as with respect to the corporate structure of the company. but i -- based on my correlation with investors recently, i think people are still keeping an eye on it. especially in the future expansion plans that management will come up with and future m&a plans they will be disclosing that people would still be watching for it. it's not that we're shelving it because it's a good stock. and still have it in mind. >> cynthia, they chose to list in the u.s., at least for immediate comparison to amazon. how many eyes today will be on that key difference that they have from amazon, that they're mistaking money, and what are you expecting for that profit margin? >> in terms of margins, we are modeling year on year down because of expectations of their

aggressive shift from pc to mobile commerce this year and also some increase, the promotion as well as competition with other domestic players. and investment into international commerce cross border commerce opportunity, which we see has a very high potential for them. but in terms of comparison to amazon, actually, i think the two business models are entirely different. it's not very comparable. although sentiment would be looking at that, but i think this is a short-term. the real comparable is somehow -- >> i want to pick up on the point of international sxaengz. right now, its international business accounts for 9% of its business. do you think that this is something that they will simply accept going forward or do you want to see that proportion rise significantly? again, justifies some of the very losty valuations out there.

>> international i think has very big potential. but in terms of revenue categorization, there is a difference. we implicitly included the international commerce of cross border generated from their business in the china commerce. because at the moment, the high is potentially going to come from introducing international high quality products, for example, from europe and u.s. into china for consumers to buy. we see big potential there. that actually reduces the barrier for international vendors to sell into china markets but the revenues are included into china's commerce. so i wouldn't really literally take the categorization only 9% right now. because there are some in the domestic revenue. >> cynthia, i know you're

bullish on the long-term of the stock. the share price, does that put pressure in the short-term on the share price? >> it hasn't gone down much. i think it's a high quality stock. fundamentals remain strong. i don't think it will be a straight line up, but it should be steady growth. >> great. cynthia, thanks for joining us. going to bring smu flashes out of virgin galactic. it says it will continue to build its second spaceship and that second is 65% complete. it intends to move forward with its test program as planned. the head of the national transportation safety board le view the faa's oversight in the virgin galactic crash. the ntsb will investigate the

agency's involvement and licensing a vehicle for test flights. virgin galactic spaceship 2 broke up some 50 feet above california, that was auto froi, spreading debris across miles of the mojave desert. the faa is charged with ensuring the safety of space prices and promoting commercial space launches. meantime, virgin cited more stable conditions and says it will bring a new listing. virgin money operates in excess of the uk's capital lending requirements. let's get more analysis on this with helia. we know market conditions are more stable than we were at the beginning of october. what does that say about this somehow? do you think it will be somewhat lower? >> we're looking at a valuation around 1.5 billion pounds. they're going to raise in the

region of 300 to 400 million pounds. remember, we had that big news out of the bank of england on friday talking about leverage ratios. that's really the key here because the bank was unable to go forward until they knew the capital requirements demanded by the uk regulator hasn't been as harsh as people had feared, so they've come forward. it's an interesting model because, unlike tsb, other challenger banks, this isn't a company that has any branches on the high street. it is essentially a mortgage book, which was brought out of the failed uk bank northern rock from the government, and also credit cards. so it's got a billion pounds of credit cards, it has about 22 billion pounds worth of mortgages. it's small in terms of the uk market, but it's growth very fast. and those models have high margins. so i think there will be

interest in this deal. but lots of news for the virgin deal. they're looking at floating virgin atlantic. it's not bad news on the galactic side. >> and, of course, these smaller banks if they start doing better is facing lots of fines and if these smaller banks manage to come through with successful ipos, it would pose quite a big problem. >> yes. but maybe that was a good idea after all, right? hindsight. >> it's funny, you laughed ate because northern rock was this failed bank. it's actually done amazingly well. remember branson came in on his steed and bought a good bank, did a very good deal for it. and he'll end up paying more to the taxpayer in the uk, you and i. so after the deal, they owed the government 50 million pounds, have paid 40 million of that. this float will raise another 10 million. so we'll get some of it, but even the bad banks at northern

rock has done remarkably well. the reason for this, as we all know, is when you have interest rates at record lows, hardly anyone faults. the question will be what happens in a climate where interest rates do go up? >> helia, thank you very much for that. still to come on the show, the white house has vowed to tackle the threat from voice at home and abroad. but is president obama's strategy at odds with the pentagon? we'll discuss after this short break. cute little guy, huh? this guy could take down your entire company. stay with me. on thursday a hamster video goes online. on friday it goes viral - a network choking phenomenon. why do you care? he's on the same cloud as your business. the more hits he gets, the slower your business may get. do you want to share your cloud with a hamster? today there's a new way to work.

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a series of poll eggs show the republicans taking control in the senate. one issue on voters's minds will be washington's recent effort to combat the treatment of isis overs overseas. hadley gamble joins us on set with more of this. this is a pretty key issue, of course, and a lot of people are frustrated with what obama is doing on this front. what is the latest developments? >> we're basically hearing from not just the military, but civil yap officials, civilian officials at the state department are speaking to the media about this. but really, get in line. everybody is frustrated with the

prt and with the white house. but what you're having to look at now is how quickly things have been moving. and it's not that quickly. you're not really getting these magnificent results people were hoping for, oh, we're going to push them out of this part of iraq or this part of syria. it's been two months since the president announced his syria strategy. basically what we see are these 5,000 rebel forces that they'll be working with haven't been selected yet because the white house said we need new people. where are they going to find them? refugee camps. it's a question of timing, really. people are frustrated not just in syria and iraq, but also the military. >> hadley, what about the actual air strikes on the ground? do they actually make a difference? first, president obama admitted, we don't have a strategy that backtracked later. well, now it seems as though it hasn't been contained, even though we're seeing, what, an

average of 18 to 25 air strikes a day? >> yes. >> what does it really accomplish? >> the bigger question, the funny thing is that depending on who you speak to, they don't seem to think it's not making that much of a difference at all because it's not followed by troop movements. but the white house is planning on a strategy in the spring. they say the strategy involves 20,000 iraqi troops backed by usair power, essentially, and that they're hoping that these guys will be able to push isis out of iraq by tend of 2015. but we're no closer to a cohesive strategy on this than we were even two months ago. hadley, thank you for that, hadley gamble our middle eastern correspondent. u.s. tech companies have become the, quote, command and control network of choice for terrorists. that is a stark warning from the new director of the british

intelligence organization gchq. seem where a mody joins us now from the webb summit in sub-lynn with lots more tech news. >> that's right, wilfred. online payments is a big part of that story. let's welcome our next guest, john coulson, thanks for joining us. data security continues to be an important issue and something that investors need to keep in mind as they approach starter companies in that space. you run an online payment platform that is garnering a lot of attention from silicone valley. what are you trying to do to ensure that the data, your customers' data won't be breached and it can be secure? >> yeah. i think if you look at ten years ago versus now, it's crazy the difference where you as a shopper transact now that you're buying things online, it's easy to lose control of your credit card data. one of the things that merchants and payment companies seem to be most mindful of is how that's security. i think payment companies like stripe can use that as an asset

where one of the services we offer is storing credit card information on behalf of the merchant when you buy something off a merchant powered by stripe, your credit card number never hits that merchant service. that means your credit card data is not being spread across the internet. and then you probably saw apple pay, which was announced just a few weeks ago. there again, your credit card number is not stored on the phone and is not scored by the mer chas. so i think we're making great strides in terms of credit card security and how your data is treated. let's talk about the competitive landscape. we have the likes of apple pay, ali pay, as well. but you're partnering up with some of these big companies. >> that's right. we think how people transact is changing and we're find finally getting to the tipping point where people are spending a lot of money on mobile devices. one of the things that is allowing that change is making it easier for customer toes

transact. it meant having to cycle in your credit card details in every single app where you bought something. something like applepay means now you just touch your thumbprints on the touch i.d. sender to buy something. it's night and day difference. >> has that partnership helped raise your profile in silicone valley? >> for companies in silicone valley, it's one of the things they're focusing on. for their customers, it makes darchbs. we are very happy when apple pay launched that we saw a swrort of the apps in the apple store feature with apple pay were partnered. >> let's talk about the payment structure of stripe. you offer big pay as a point to transact. >> we think it's important for a payment company to allow consumers to buy with whatever instrument makes sense for them. you have to remember not everyone has a credit card. certainly ubiquitous in the u.s., but internationally that the that's not true.

our partnership with easy pay unlocked mer chass. the big coin scene is exploding internationally. that minutes if you don't have access to a credit card, you have another means by which to pay. >> and ali beside pay, how big is the chinese internet market an opportunity for a company like yours? >> we think it's huge, measured by the amount of u.s./china online commerce happening right now. and that, you know, china is very big right now, the u.s. is very big right now. but you don't see a lot happening between them in the online commerce market. part of that is the payment instruct that's available. if you're a consumer in china, you may be having an ali pay account. traditionally, you could not buy off u.s. sites. but our ali beside pay means for the first time american mer chances can sell to chinese consumers. >> let's step back and talk about being an entrepreneur.

you're 24, quite young, one of the youngest entrepreneurs i've met here. does your age work for you or against you when you're pitching to investors? >> i think it can be a little bit of both. as i pertains to the payment industry in particular, one of the issues before was all the products were being developed by industry insiders who had been in the industry for so long that they sort of lost track of the consumer experience. and i think it takes a bit of someone new to the describe to rethink the consumer experience and how it should work. >> lastly, you are irish, born and raised in ireland. yet in order to fulfill your dreams as an entrepreneur, you moved to silicone valley to start your company. do you think you would not have been as successful if you started it here in europe? >> we were in silicone valley. i think the silicone valley is

definitely leaps and bounds ahead of everywhere else in terms of the investor penetration, which you're starting to see at places like dublin, other places across europe spring up. if you look at -- more billion dollar companies were started outside of silicone valley recently than inside silicone valley. so i think, you happen, the people who say that you have to be in silicone valley a are exaggerating. >> and companies like dublin are trying to label themselves as the silicone valley of europe. thank you for your time. remember, we will be speaking to the halo finder coming up next on "worldwide exchange." >> thank you very much for that, seema. earlier we told you how dunkin' donuts is rolling out its festive menu that includes a snicker doodle and a sugar cookie latte. last year, it had red velvet coffee and assorted caramel on its menu. we would like to know from you

what holiday meal would you like to see made into a hot dreng? our personal handles are on the screen now. what do you think, carolin, what is the hot choice of drink? >> does it matter what i think? it matters what the rest of the consumer base thinks. i think they still like their pumpkin latte. i'm not a big fan. >> i don't think i've ever tried that. i do like the sound of the one that did well last year, red velvet. >> they're launching the cluster doughnut. but it is not a -- but just as many calories, probably. >> lots of holiday opportunities. coming up, u.s. officials launch a probe into jpmorgan's forex business. we cross to cnbc hq for the full story.

nowhere but down for oil as wti facilities to its lowest level in near 2 1/2 years, significantly weighing on european energy stocks. virgin galactic plans to move ahead with its space program saying its 65% complete, this as the u.s. has -- last week's fatal crash. silicone valley is the command network of choice for terrorists.

britain's electronic time blames u.s. tech companies for turning a blind eye to misuse of their services. we talk to top ceos at the summit in dublin. u.s. voters head to the poll today with the key midterm elections deciding which party controls congress and whether there will be two more years of political gridlock in washington. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. >> we have the french growth forecast in 2016 and said portugal is likely to miss budget targets and they've cut

growth for portugal. ireland seen as the fastest growing economy out of 2015. a lot of numbers coming through here. they've cut germany's 2014 growth forecast, as well. italy likely to seek -- in 2014. >> the devil is really in the details for these numbers. but the key here is to look at what the diskredsy is between what the eu is forecasting and what the national budgets are forecasting. that then raises the corrective action. and the eu. what else do you see? >> we were speccing, as you're saying, eurozone growth to be cut the forecast for today overall for the eurozone was 1.7%. and the likelihood that that was being cut to 1.2%.

we ever looking out at the produces price index that has come out. the number is coming in. let me find that for you now. the total industry numbers come in at 0.2%. for september. >> so overall, growth has been cut down. i want to talk about the auto forecaster, 1.2%. that's not that bad. that was in line with expect ages. they were saying that they expected gdp growth to be revised down to 1%. that was a very, very bearish assumption. so that didn't happen. maybe that's the silver lining here. >> absolutely. indeed, it would be the ppi number if, in fact, minus 0.1% month on month. let's have a look at euro/dollar. what does this mean for the major currency pair? it is 0.2% on the day. the euro/dollar, as you can see

it. it's range bound for the trading day. as expected, we were expecting a growth forecast for the quarter to come down. that was expected to come out today. confirmation it will be lower this year and next year than had originally been forecast. let's have a look at the market and show you what futures look like early on in trade. the s&p 500 taking fair value into account, it's modestly higher by 0.5%. the dow jones up by 10 points and the nasdaq is seen inching higher by 0.37. this is after we saw a fairley calm session yesterday. intra day, these indices hit record highs, at least the dow and the s&p 500. but then we actually inched lower at the end of the trading session. that was in part because we saw the big drop in energy prices and that really took some pressure on some of the energy stocks. maybe investors were tain taking stock after that fantastic rally that we saw last week.

remember the s&p seeing the biggest two-week jump since december 2011. let's have a look at how the ftse cnbc global 300 index is trading. modestly higher by 0.2%. i want to dive right into the european markets. we're seeing a nice rebound from yesterday's trading session. specifically the italian markets, up by 0.5%. a similar percentage gain for the xetra dax. but we saw some profit taking in yesterday's trading session. some concerns about some of the manufacturing data. so that is worse in today's session. the ftse 100 up by 0.2%. lots of corporate stories out there and some of them very disappointing. but overall, the sentiment. >> the color of my tie is working today. so those headline numbers we just had, eurozone growth is cut to 1 is.1% for 2015, 1.7% for

2016. those cuts largely as expected, nonetheless, the pressure is very much on mario draghi. particularly following that easing that we had from the bank of japan on friday. let's have a quick look at the bond yields. they've just been picking up. the second half of october and the first few trading days of november has come off a little bit. that's suggesting that people are a little bit less -- more confident about global growth outlooks than they were in the middle of october, but nonetheless, still very low yields. germany, 0.82% and the ten-year uk, 2.24%. let's looking at forex, and the u.s. dollar giving up a bit of ground today, but that's because it hit new highs yesterday, hit a new two-year high against the euro yesterday. that has now bounced back. the aussie/dollar is at 1.8.

that hit a new two-year low against the dollar at the start of trade today. it's just bounced back through the day. cable at 1.599. let's look at commodities. big movers in the oil price over the last couple of days, particularly yesterday. nymex at 76.73. brent at 83.6. we seemed to have declined from the start of october, down 27% since the peak in july. astonishingly big moves in the oil prices. gold is at 1166.5. >> and wti is back, but we'll talk about that more later on in the show. >> let's give you a rundown of what to watch this trading day. significant trade deficit numbers and orders are out at 8:30 eastern. alibaba reports its first results since its blockbuster

ipo before the opening bell. we also get earnings from adm, burger king, estee louder and michael kors. according to media reports, they're looking to raise $1.2 billion. the sale could be announced today and deutsche bank and goldman sachs have been higher. >> in the last month, they announced plans to -- the face of competition. however, hailo has launched a feature that allows you to pay for taxes on the streets in london. plus, it's been reported today they're ramping up their battle for market share with uber in ireland. >> and seema has been talking to a number of big hitters at the

webb summit in dublin. >> that's right, carolin. we have the founder of hailo. thanks for joining us. >> it's good to be here. >> the fact that hailo is exiting north america, is essentially being pushed out of north america important is that in your strategy going forward? >> well, basically, i haven't been operational for months. but it seems month me that the business is going where the biggest opportunities are. the biggest opportunities are in europe and asia. 1yu69 yet, i saw the number one app. >> but do you think hailo will ever consider entering the north american region? >> nothing is out of the question. right now, it's clear where the opportunities are and that's where you have to go. >> right now, europe is facing a series of economic challenges.

>> it makes it much better. and the reason why is because it makes the drivers much more eager for additional work. and additional volume and that's exactly what they provide. >> you're the founder of hailo. but over the last couple of months, you've been working on a new venture in robotics. >> yes. in tech i've been interested in the regulatory aspects and how to make robots safely integrate into society. we're building some systems with bearably rules for ro boats or regulations or regulators on them that allow them to preserve the benefit but without any of the problems. right now in the u.s., they're completely banned from commercial -- commercial robots are completely banned from operating, costing millions of dollars a day.

>> how. that impact me as a consumer one day? >> sure. look, i think my sister has a farm in new zealand and basically right now, you know, if she wanted to grow and maximize her use of input in growth oregganic form. vld have to hire a drone. agricultural is the number one business in the world next to manufacturing. but the first thing we're going to see is improvement in things like more stable. >> making our lives more efficient through use of robot ix. but the question is, will that be a threat to human capital? >> i don't think it will be a threat to human capital. i think it will be the greatest asset. i think basically robots are going to help us solve problems, help us learn more and the combination of row boats and

humans working together are going to be able to solve some of the biggest problems we have had in the world today. >> we've had talked about how virtual reality is the future of robotics. >> i think he's a brand new market that can create hundreds of billions of dollars more. >> jay breathman, thank you. guys, back over to to you in the studio. >> and stay tuned from our ongoing coverage coming up. we have former apple ceo jones sculley on to talk about tech security and the closing of ireland's passing polls. later on in the day, cnbc will speak to eva langoria, enda kenny and abigail disney.

still to come on the show, polling stations as cross the east coast begin opening their doors in less than an hour. find out what's on mind of the markets taking note. we cross to washington, d.c. later in the show.

welcome back. crude falls to its lowest level in 2 and a half year. virgin moves ahead with the space program as the ntsb expands the probe into last weeks's crash. and voters in the united states head to polling stations across the country. >> let me bring you some comments from german chancellor angela merkel. she says the eurozone economy has not developed how we would have wished due to internal factors and geopolitical ropes. and this comes on the heels of the eurozone, the eu commission downgrading its forecast for 2015 growth for the eurozone to just above 1%. angela merkel saying there's no reasons for a move of economic sanctions against russia. she said long-term we want to increase relations with russia.

let's stick with the german story. bmw profits slipped lightly in the third quarter, despite higher revenue, raising costs concerns for the premium automaker. the company affirmed its outlook for the full year, forecasting a significant increase in sales and earnings. >> meanwhile, bmw saw a dip in q3 profits. joining us now, the cfo of continental. wolfgang, thank you for joining us. we'll come to that issue with the power train division in a few minutes and wolfgang, hopefully you can hear us there. first of all, i wanted to kick off saying oil prices are down, rubber prices down to five-year lows. these conditions, are they perhaps as ideal as they could be for you? i think we haven't got that line

at the moment, so we'll come back to mr. shaffer in a few moments. they said things would be able to beat their margin, their profitability target by the end of the year. i believe they've looked at that twice already this year and this is after, for example, they said we're cutting cap ex. what's the big difference between the likes of continental and michela? continental is a lot more exposed to the premium car market in europe and this is a big advantage for them? we'll try and re-establish that line later on today. meantime, the national highway traffic safety administration has opened a probe as to whether honda failed to report deaths or injuries regarding takata air bags. u.s. lawmakers require -- defects must be reported. honda has recalled more than 5 million vehicles in the u.s. to fix air bags.

honda could face fines up to $35 million. and virgin galactic says it will go ahead and build a second spacex2 aircraft. it will review the faa's oversight. the ntsb will investigate the agency's involvement and licensing for vehicles for test flights. virgin ga lakt ic broke up spreading miles of debris and one of the two test pilots was unfortunately killed. the faa is charged with ensuring the safety of space operations and promoting commercial space launches. >> wolfgang, thank you very much for joining us. the first question is on a headline point. oil prices falling significantly and rubber prices are down to five-y five-year lows.

is that the success you want want as a tire manufacturer? >>el with, of course, we like the oil prices to be down because people tend to drive more and extend the usage for the car. if they are lower, this is advantageous for us and this is something which we have passed on already to the customers. so, basically, since the beginning of the year, they are down 3% to 4%. >> wolfgang, i was talking to my colleague before about why you were able to say, look, potentially we could be beating the profitability, the margin target again. this as those other companies, they're saying we are going to have to cut cap ex because the environment out there specifically russia, the emerging markets, is so difficult. what is it that sets you apart? is it really your high exposure to the luxury car market. >> europe? >> well, i think it's two-fold.

one is we have tires as part of our business. but we have the other automotive supply parts as another big part of our portfolio. this is a different development. in tires, we have the premium tire segment. this is less effective from those trench you were describing than other tire segment. and the others which specifically without products we are delivering called the mega trend products, which are increasing safety, reducing emissions, getting the connection of the car to the outside world or the digitalzation of the car. these are still products which are increasing faster than the worldwide car production. that gives some tailwind to our developments. >> yes, you are at the same time looking to reduce the dependance on this car market even though we have seen improvement of late. your cfos recently saying yes, you are on the lookout for act 60ss in the industrial space.

you want to spend up to 2 billion euros. what i want to know from you is are valuations still attractive out there? are you seeing targets that could be selling at a good price or is it too expensive? >> well, you know, before closing the index, we have time at the end of the first quarter. so this is already a bigger deal, 1.4 billion euro in additional for the group. still, our target -- i mean, this is not a contradiction. i said we are in a segment which is growing. these are the mega trends of the automotive industry. negative the less, the automotive industry is a cyclical industry. this will be one day or another, this will be different again. and this is why we want to come back to the 40% roughly business outside the pure oe business. carmaker business to get our top line -- more towards the volatility.

>> we appreciate your time today. >> as we head to break, we'll take a look at u.s. futures. we're now expecting a negative open, the s&p expected down 4 points, the dow down 23 points and the nasdaq down 9 points. opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances.

welcome back. we're seeing another partnership tuesday decline in oil prices. have a look at crude oil. down another 3%. that is a huge drop and the initial drop yesterday came on the back of saudi arabia cutting prices for the u.s. we're seeing brent crude at 82.51, down 2.68%. nymex light sweet crude is now at more than a three-year low and wti in contango. let's talk more about the oil markets. joining us now is carter worth. carter, good morning to you. what do you want to do with oil holdings right now? do you want to be a seller or do you want to be a buyer? >> well, so there are two obviously part of that. there's the commodity itself, of course, and then there are energy shares. but the bigger subject is energy

shares, right inspect the crude market itself is a fairley thin market in the sense that there are not a lot of players. there are few important people in the midwest and texas. but the energy shares market, as we can see here, have not really made incremental new lows, even as energy has made new lows. meaning the damage done over the last two, three, four months has started to abate to some extent. so if you look at the s&p 500 energy sector or other major individual components of it, the plunging of the last several weeks on top of the last several months has basically not continued. we've kind of gone flat here. and so we think a great deal of the damage done in crude has been discounted in the shares. so even as we make incremental new lows here in wti and, of course, brent, one can see that exxon, chevron, royal dutch or bp, they haven't made new incremental day-to-day lows even as the commodity has. we think a great deal is not all of the weakness in the commodity

is priced into the equity shares. >> we've seen that diversion between oil prices and energy plays. can the s&p actually continue to rally? >> well, smur. a small component, the parts comprise the whole. the s&p being ten sectors, ten parts, this is a fairley small one at 8%, 9 the%, all energy added up together. in a way, many people argue it's a good thing for the consumer. it speaks to make the macro subject at hand, which is there a disinflationary environment that continues and what does that mean about the ability for equities to continue to advance at the incredible rates that they've been doing. meaning we do know there's no way around this. on a trailing two-year basis, the s&p is up 50% and off the lows up some 200. so we still have a very steep and uncorrective market, despite the fact that we had a wonderful correction down 10%.

the problem with that correction is that it was reversed so quickly. we had this incredible ricochet and we're back to the scene of the crime, literally to the highs of september 19 where the first thing came apart in the first place. >> that correction and quick rebound, i think you described in your note as im putt ppetuou. what did you mean by that? >> hurried, ill considered, head strong, if you will. meaning one has to figure out, i suppose, we have this symmetrical move, back up, 10% down, 10% up. what was the impetuous part, was it the selling, everybody get scared about ebola, a right environment, or is the impetuous part the rebound, the quick buying up of stocks and taking them back to where they were. the issue with that behavior, we have volatility like that after a steep uncorrected two and five-year run is that it reflects sort of a weakening of

sentiment and conviction. the people can quickly move away from an asset, dump equities of all types. it wasn't just ebola-type names. it was things that shouldn't have been done, per se, in the fist place, quiet names like j&j and quickly reversed that judgment and went right back in. it's a zits friend ya, if you will, that is stop attic of not all is well as the price of the s&p would suggest. >> carter, thank you very much for that. >> thank you. and still to come on the show, a big story out there today. will investor be dazzled by a magical first set of numbers out of alibaba? we preview the e-commerce giant's earnings, up next.

welcome to "worldwide exchange." i'm carolin roth and these are your headlines. >> oil falls significantly on the back of the price from audi arabia to the u.s. energy stocks in europe weigh on the news. >> virgin galactic plan toes move ahead with its test program, saying the second spaceship 2 is 6/5% complete. this as u.s. officials the oversight of last week's fatal crash. silicone valley is the command network choice for terrorists, britain's electronic

science chief slams u.s. tech companies for slamming a blind eye for misuse of their services. we talk to top ceos at the webb summit in dublin. u.s. voters head to the polls today with the midterm elections deciding which party controlled congress and whether there will be two more years of political gridlock in washington. good morning, everyone. if you're just waking up and tuning in to "worldwide exchange," good morning to you. we are looking at the last 30 minutes, quite a bit on of a turn around in the futures. initially, slightly higher at the trading session. about 20 minutes ago, we saw that really turning around. the dow now seen off by around

12 points. the s&p, dow and the nasdaq expected to open modestly to the downside. this is after yesterday we ended lower, as well. very tough volume intra day. the dow and the s&p hitting an int intraday record. in this quiet session, we took -- from the fact that oil saw this steep decline and this continuing in today's trading session. this may provide more downward pressure from some of the energy plays in the u.s. let's have a look at some of the european markets this morning. we're seeing a mixed performance. initially were higher. that was a rebound from yesterday, officially were down by around 1%. but about an hour ago, we saw the eu commission cutting to forecast for eurozone growth. that's for this year and next year. next we're we're expecting growth of 1.1%. and that is putting some pressure on these european markets. the xetra dax slightly up, but the ftse and cac 40 down by 0.1%.

>> expectations are high for alibaba's results as a publicly listed company due later today at 12:30 cet. shares are up 45% from the e-commerce giant's listing price, giving it a market value of $246 billion. joining us now is sam poshrau. it's been a agree great run for the share price since the ipo, but we've seen some of these richly valued internet stocks like netflix and twitter as recently as last week when their results moved slightly. what are you focusing on these alibaba results today? >> good morning. thanks for having me. >> good morning. all the basic fundamentals are solid, the consumption is strong, all the basic demand factors are strong opinion.

so i think the numbers will be very good. we are expecting solid revenue growth on top line margins to stay steady above the high 40% range. the key thing here to focus on is to see how the mobile monitorzation is going. they need to close the gap because that's where the whole market is growing. so i think that will be a key thing to follow. other than that, the margins will be important, too. >> just want to pick up on those margins. we saw alibaba had a high ebitda margin of 43.4% in the last quarter. can that be sustained? if not, what sort of compression would be acceptable? >> well, i think they need to stay in the -- in the high 40% range. i think they will get the benefit of doubt. they are investing quite a bit

in international markets, in other areas, but the core business is still solid. the online marketplaces are still solid. they have a market to market high market share. the competitors are catching up, but they're still far behind. i think they are some runway before the others catch up. i think a high 40% in terms of ebitda margin and revenues will -- i think investors will be happy. >> and, of course, these results looking backwards will be very much based on their performance in their home market of china. do you think we're getting any statements moving forward about their plans for international expansion? should the likes of amazon and ebay be worried looking over their shoulders? >> no. i think international is still early. last quarter, it was 9% of their overall revenue. i think international will take a while to kick in. meanwhile, i think they're in a different business. i don't think amazon and ebay have to worry. this is still a china sent rick company.

more that 90% of their revenue comes from there. so i don't think they have to worry. and it's a different revenue model. it's not a very good comparison to compare it to amazon or ebay. even ebay might be closer than amazon. but overall, i don't think they have to worry. this is still a china centric company. >> thank you very much for joining us. >> thank you. now here is a look at some of today's other top earnings stories. sprint record a wider than expected loss. the company is warning increased costs tied to customer upgrades will hurt future profits. sprint fell 7% in after hours trade. it's down 3.4% in frankfurt soever today. >> aig reports higher third quarter profits beating forecasts thanks to the improved performance in its core insurance operations. this was the first quarter under peter hancock who took over for robert in september. aig is declaring a quarterly

dividend program in aig and germany is up by 0.6%. her ba life's third quarter profits plunged as they wrote down the value of its venezuela assets. shares fell 13% in after hours trade. in germany, they're losing another 12.73%. now, we've been talking about dunkin donuts, new specialty menu that includes a snicker doodle and a sugar cookie latte. we want to know from you, what holiday food would you like to see made into a hot drink? how about a nice hot caramelized buttered rum? that sounds very appealing, even though it's very early in the morning. and john tweeted in saying anything cranberry with a brussel sprout garnish. i'm not sure i agree with that one, john. if you want to join the conversation, get in touch with us, "worldwide

exchange"@cnbc.com or@krnsor @c. >> i don't usually count calories. but the sugar latte contains 450. if anything, i would go with the snicker doodle. >> i don't care about calories. >> you don't have to worry. >> why not. >> anyway, voters across the u.s. in washington, d.c. for a preview after the break.

no doubt about it, the big story out there in the commodity markets today and yesterday, of course, is the fact that saudi arabia is cutting prices for its u.s. customers and that has led to this stark drop in oil prices. wti down another 2.3% today. it's currently at 76.95. year-to-date, up 22%. and it's worth noting that from a technical perspective, the wti is in they are more expensive than a near term income tax and the return of wti is certainly

not helping the global sentiment. this is a cording to one of the research firms out there this morning. it will start to trigger exposure, that means hedge funds and they're seeking returns. that means there could be more forced selling. >> it does suggest there's a bit of short-term panic out there. now, moving on from oil prices, americans head to the polls today for the midterm elections. all 435 seats in the house of represents and 36 seats in the senate are being contested. the republicans need to gain six seats to win control of the senate. joining us now from washington is tony -- managing director at

hamilton place strategies. tony, as we were just saying, it looks like the outcome is likely to be a republican dominated congress. does that mean that the outcome for the rest of president obama's term in office is gridlock? >> yeah, look, it's interesting because myself included believe sometimes the u.s. governing system works best when you have congress controlled by one party, which i think we're going to have after today with ed republicans taking control of the senate and the president being controlled by the opposition party. it puts them in a good place to negotiate. i think ordinarily that would be true, but i don't believe that's going to be the case in -- with this congress and this president and at this point in the president's administration. i just think there's too much bad blood and they're not very close on a whole host of issues that i think we would like to see progress on.

so they're directionally different, not in a negotiating position, i believe. >> tony, this is carolin. always great to speak with you. good morning to you. >> good morning, carolin. >> why is it that voters are so dissatisfied with president obama and his economic legacy? because it looks from the outside, especially from the eurozone where we got that forecast once again this morning, your economy is doing very well. it's growing at 375% last quarter. this is very strong. so what is the problem here? >> it's really ironic, isn't it? this is a time for the administration where the u.s. economy is really the soul engine of growth in the global economy to the point where the fed is able to take off tapering and there's a great confidence in growth in the economy. but the electorat today see is it in a different way. it's in the sixth year of the recovery, but they have not seen wage growth, the return to job creation we're in a good place

and we're seeing a good annual -- or month on month job growth. but it's been a long time to get here and they're very dissatisfied with the pace of change. some of the foreign policy challenges that the administration has faced left them in a bad mood and questioning the leadership in washington. so there's an anti-washington view right now and a dissatisfaction with the pace of improvement in the economy sxp it's a real irony, i think, for the democratic party and the president right now. >> tony, it seems to me that american politics is perhaps more polar united statesed now than it has been for a couple of decades. would you agree with that and what do you think that means for the markets outlook? >> you know, i think it's been a trend, wilfred, over the number of decades as we've seen both parties get closer, more

extremes and they're counting themselves in the middle where we're seeing a tradition finding a lot of progress in negotiated solutions to the problem. so i think it's a correct observation. i can the consequences for it is a lot of ip action on a lot of really big issues. i don't think we're going to see solutions on tax policies. i would love to see some, you know, corporate tax reform. i'm not optimistic that we're going to get that. i'm not optimistic about the opportunities for immigration reform that's going to have implications for a lot of companies that are trying to secure talent, such highly skilled talent for their firms. so there are really big issues that we're going to be dealing with. the one change we're going to see is congress should pass a pujt. that would be one thing that we can work with. >> tony, that you can so much. always a pleasure.

>> jpmorgan finding itself under investigation. jackie, we knew about the investigation with regulators around the world. they keep on riding. >> the u.s. justice department has opening the regulation and controlled related to those activities. they need to cooperate with authorities and talks with regulators, although there's no guarantee that this will lead to a settlement. the company said in october it raised legal expenses by over $400 million and says the amount it may lose rt related to litigation could be as much as $5.9 billion. that's up from $4.6 billion earlier this year. "the wall street journal" reports banks and regulators in the u.s. and europe are stepping up to settle various probes.

the journal says they can hold their individual -- could range to be 500 million a$500 million billion. the justice department was handling the resolution. expect this to take several months. in just the past week, the legal costs, citigroup increased its legal reserved by $600 million above what it budgeted for the quarter. the justice department, the conduct authority are all investigating its forex business. on monday, hsbc saiz said it set aside $1.7 billion to cover one off charges, including nearly $400 billion to cover a potential uk probe of foreign exchange markets. so to answer your question, the stakes now getting very high for these companies. >> jackie, thank so much for that. as we head to break, let's have a quick look at u.s. foirchs fourchs point to go a

negative open. we'll be back in a couple of minutes.

now here at webb summit, we are speaking to several entrepreneurs as well as tech titans. on that note, let's bring in our next guest, the former ceo of apple. john sculley, i want to begin with a question on apple. apple just tapped the bond market to raise money. but it's sitting on more than $100 billion of cash. why is apple doing this? >> well, i think it's probably a smart thing for them to do. tack sess to capital is good. you raise money when you can. and i think it will give apple more flexibility for things they want to do in the future. they can buy their stock back, they can do other things with

it. >> and now let's talk about what europe -- on the tech world. it recently launched a smartphone that's attracting the emerging market audience. >> i normally focus on the emerging markets because the technology for smartphone sess pretty much commoditized. we have brought in a design team that worked with me at apple who most recently did -- and we think we can differentiate in a xhod sti commoditized market with great design and good marketing. >> but if your ob smartphone line becomes a massive success in emerging markets, will you become an enemy to apple or do you think tim cook will court you to work together? >> tim cook is doing a spectacular job running apple. apple has a lot of great years ahead of it. feef focused on markets in the u.s. young teenagers, into their

early 20s. they may aspire to expensive products like apple, but they don't have the budget. >> here at the webb summit, looking for perspective investments, what do you think are the hottest trends in tech right now? >> i think what i wrote about in my book, moon shot, is the power shift from producers in control to customers in control and it's all because of the exponential growth capacity. data and analytics. it means customers are paying more attention to the opinions and the referrals from other customers than they do to traditional brands. and it opens up opportunities for entirely new businesses and that's why i call them game changing strategies for new billion dollar businesses and i talk about a lot of examples. >> we'll lee looking to hear about what other tech investments you maybe, perhaps even here at webb summit. john sculley and an active tech investor. for "worldwide exchange," thanks so much for watching us. "squawk box" is next opinion.

good morning. welcome to "squawk box." the balance of power in congress is up for grabs. did you see oil prices again yesterday plummeting? crude dropping sharply after saudi arabia cuts prices to the united states. alibaba's fist report card, shares of the e-commerce giant soaring 45% now since their september ipo. today, the company set to post its first quarterly report as a public company and face judgment a wall street. it's tuesday, election day, november 4th, 2014, and "squawk box" begins right now.

♪ so wake me up when it's all over ♪ ♪ when i'm wiser and i'm older >> good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. and this is the perfect song for today. in case you've been living under a rock and have missed those campaign ads, the posters, it is election day. if you wonder why it matters, check out this chart from jpmorgan's anthony chan. it shows when the stock market sees things, it's not always a huge fan of change. two months after the election, the s&p rose more than 6%. when the incumbent white house party gained seats in congress. stocks rose less than half of that when the opposition picked up seats. the s&p jumped nearly 12% in the final two months of the year. probably not going the be the case this time around. they are expecting republicans to make some massive gains, at least in the senate, if not in the house, as well. we'll be t