good tuesday morning. welcome to world tps wide exchange. i'm susan li. >> i'm wilfred frost. here are your headlines from around the world. >> a fed rate hike would be positive for the global economy. leaving policy unchanged. investors are pausing for breath ahead of thursday's fomc meet. >> auto stocks shift up a gear as european registrations rise for the 24th month in frankfurt. gm ceo says a fiat chrysler deal

is not in the cards. >> we went into it in detail when the formal offer was put in front of us. >> but it's a no show. the fiat chrysler ceo buys a bit more time with the united auto workers union which says it will keep negotiating with the car maker. >> lift off for amazon's jeff besos as he brings his dream of launching rockets into outer space to florida's cape canaveral. >> we had the lowest volume session in a month's time. also the narrowest trading range that we have seen since august 18th. that tells us that everyone pretty much is on the sidelines right now awaiting that fed rate decision. let's check in on u.s. market futures. we're not going to see much movement at the open. the implied open. we're going to be down close to

3 points. dow jones industry looking for a decline of 20 points and nasdaq should be lower by 7 and a quarter points or so. >> let's also just quickly break the german numbers, current conditions came in at 67.5. the expectation was for 64. that's better than expected. expectations came in at 12.1. the expectation was for 18.5. euro is down by 10 basis points on the day. >> let's get back to the top story which is the rate debate and what central banks are doing this week. we heard from one already today and ahead of it, data out of japan had been soft so it was further easing going to be unleashed? well the answer was no.

>> as expected, no change from the existing policy later today given that the october meeting come with more releases if there is to be easing that is likely to be the date rather than today. what about the commentary, though? surprisingly upbeat, in fact, on the domestic situation. the assessment of domestic demand remained optimistic emphasizing that business investment continued to recover moderately while private consumption remained resilient. not in mind with the latest out of japan recently. as for the commentary on the external situation that was unsurprisingly down beat. the change was that export versus been more or less flat where as in august they have been saying that they had been picking up. from tokyo when the bank may be pushed to change it's stance. >> some are you starting to say that the bank of japan may have

to ease further possibly as early as october and some are saying that will come together with a fiscal stimulus package from the japanese government. for the time being they maintained their 80 trillion yen asset purchase program and some are starting to wonder how much fire power that has and whether or not that's triggering a dry out of liquidity in the market had a little bit of a knock on effect pushing it toward 120 and shaving off a few points. that's the latest on the bank of japan back to you it has the potential to ease further and talking about the federal reserve and what they'll do with interest rates. he says if they hike interest rates it's a good thing for the world's economy because it shows that the world's largest is recovering.

let's check in on what we're expecting. everyone has it marked in their calendars and if you're a market participant which is what they're calling them now most people are sitting on the sidelines waiting with baited breath as to what the fomc is going to do. it's a 28% probability they're going to hike interest rates. if you look at market derivatives they're pricing in an event chance now that the fed isn't going to do anything for the rest of the year heading into 2016. black rock the world's largest money manager, they're telling us there's a 40% probability they'll move this week. if not, 15% probability in october. the increase that to 20% in december. so here's what they have been telling cnbc.

>> when the federal reserve raises interest rates that means that the u.s. economic recovery is quite robust and strong so i think that you might think that u.s. monetary policy, monetization could effect adversity emerging economies and so on. i don't think so. because as i said, the fact that the federal reserve will raise interest rates reflect strong economy in the u.s. >> there's two possible that raising of this particular interest rate may have a gradual manner bearing in mind that the market players are expecting this particular event and in many ways they have priced it into valuation of their assets and in this case, they're not going to be any dramatic changes in the environment. but the second probability is also possible. the markets may respond in a

very nervous way and then generally speaking through an increased global turbulence that may effect the russian economy as well. >> my position over time has been don't do it when the world is in turmoil. everybody knows it has to happen but pick your time and i think if the volatility we've seen calms down, it could happen sooner rather than later. >> let's talk about it. an even call on the markets. let's go live in new york. joining us with his views, we have boris of bk assets. that's the call right now. some are saying with the market turmoil i think they have to put off the tightening for now since larry sommers says the market sell off has wiped out $600 billion worth. so it's already done the job for them.

>> i have always been arguing there's zero economic reason for the fed to hike rates right now. it's a symbolic gesture. they want to lift themselves away from zero interest rate bound and move themselves into traditional monetary policy but they're trapped because of all the global turmoil happening around them and in many ways they're not masters of their own fate at this point. it puts them in a very tough situation. if they do hike rates it's almost certain that they're probably communicate, this will be one and done in the sense that they won't do further tightening forward. whatever you have will be quickly he rquic quickly evaporated if they made the communication. you already see dollar-yen starting to slide below the level ahead of this if the market gets jittery. the economy while doing relatively well is not sustainable at this point for a

bullish rate. it seems the least likely at this point because of the global turbulence. so whatever happens i think it's not going to be a important event. it will probably be a one day event and after that the market will go back trying to look at figuring out where the global economy is going. >> some say it raises off the uncertainty in the markets. boris, one interesting theory you have thrown out there is that instead of hiking rates 25 basis points this week they could go 15 basis points as a signal right? some sort of symbol to the market. >> exactly. they could do something like that which is actually an interesting proposition because it does provide a symbolic rate hike and puts them on the path toward traditional monetary policy. it will be interesting to see if

they decide to choose something unconventional like that but either way i think it's just the beginning of the story. not the end of it in the sense that whatever they're going to communicate, the drama is going to resolve itself. we can see how the global economy is performing and we can see a consistent and conditional tightening going forward. >> they could just hike one basis point and go from there. >> i think that would be too symbolically too little. >> i agree. but 25 isn't even that big of a hike. if as an investor you are worried at the moment, there's a lot of fear in your mind and you want to buy some kind of protection, do you buy the u.s. bond market or the fact that we're getting closer to a hike, at some point, does that mean it's a stupid thing to buy? what is there to buy at the moment if you're a bit cautious? >> well, i think it's if we do

have a risk aversion move here historically it's been a great time to buy equities now because they tend to rally in october and november but over the last ten years unless you anticipate a 2008-type of event it's a great time to buy because equities rally into the end of the year. also assuming that the global economy stabilize which is relatively reasonable given that conditions everywhere don't seem to be in a stress mode as they were before. so ultimately it's probably going to be a great time to come in. >> we'll have to leave it there, i'm afraid. managing director from bk asset management. >> space really is the next frontier. jeff besos is bringing his dreams of launching rockets to outer space and the state of florida. the amazon founder is holding a

press conference at 9:45 eastern time with the orlando sentinel reporting that he'll probably announce plans to launch rockets from his company blue origin at cape canaveral and they'll set up processing or assembly operations in the state of florida as well. spacex launches rockets and space capsules. nevada is awaiting a nasa contract. blue origin aims to send tourists into space and carry scientific equipment for experiments in the future so yes sit the next frontier. >> it is. or rate hikes. so exciting. still to come on the program, legendary investor carl icahn is betting big on energy stocks. we'll bring you the details of his latest investment right after the short break.

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but that didn't stop the markets from ending in negative territory once again. >> no, that's right. try as they might, beijing continues to pull out all the stops to sooth the nerves off the retail investors in the stock market but we're getting mixed signals. they're moving in the right direction in terms of fiscal policy support and to back up the monetary easing but the sense of the markets is that it's too little, too late in the cycle and the economic data continues to scare the horses and we're down by 6% in terms of mainland equities so far this week. 3,000 is the critical major support level. we could break it tomorrow, once again. i want to talk about the nikkei 225 and japanese equities. the sell off in broader asia, many investors and money

managers including goldman sachs a couple of weeks ago says that's where the market is trading around 14 to 15 times earnings. the market still seems to be looking for more policy support there than the boj. you have been talking about the move to expand asset purchases. in terms of the corporate stories there's m&a activity around the food sector. that helped bolster the food shares so we're holding the line above 18,000. it's all about the fomc asian markets watching this one very, very closely. especially malaysia and indonesia. back to you now. >> thank you so much. i want to say that global markets are watching the fomc. let's check in on the european session on this tuesday. more pronounced declines, the ftse by close to .7. the cac down by 5. let's see how that's rolling

into the u.s. market open. futures in trade telling us the implied open, we'll be down 4.5 points for the s&p 500. the dow is pricing at a lower start of 40 points and the tech heavy nasdaq may be declining by 12 points. >> let's remind you of the headlines before we head to break. investors wait for the sidelines for the fed with futures just below flat. they move closer to a deal after extending the current contract and the u.s. senate will vote again on a resolution to reject the iran nuclear deal. worldwide exchange, we're back in a couple of minutes. &t and d which means you can watch movies while you're on the move. sitcoms, while you sit on those. and even fargo, in fargo! binge, while you lose weight! and enjoy a good cliffhanger while you hang from a... why am i yelling? the revolution will not only be televised. the revolution will be mobilized.

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>> 8 people are dead and five more missing following severe flash flooding in arizona. two vehicles carrying a total of 16 people. three people have been rescued so far. >> the u.s. senate will vote to move ahead on a republican backed resolution to reject the iran nuclear deal but the outcome is expected to be the same as democrats are poised to block this measure preserving a foreign policy win for president obama.

republicans are working on crafting new sanctions to maintain a hard lined stance on iran while they're planning to support them in next year's elections. >> cyber security will be there as they meet later this month. speaking to reporters the white house spokesperson said u.s. officials have been blunt and candid about their concerns. it comes amid reports the obama administration will not levey sanctions ahead of the washington get together. our next guest is the ceo of san jose based vetra networks which develops technology to protect data breaches as they are happening. a very good morning to you. >> good morning to you. >> thank you for joining us. i'd like to kick off with a story there, that meeting coming up between obama and there's lots of stories that the chinese are hacking u.s. companies.

how much truth is in that? >> very much truth to that but the bigger question is what are they doing to protect themselves because if it's not the chinese, it could be somebody else and anything that gets discussed but it's critical. >> is it a sense across all of the world that these types of attacks aren't as severe? they're not as serious as a military attack and the response of them is still underwhelming. >> when you have a massive data breach and you have personal data that gets there the economic consequences are pretty severe. when you've got a public loss of confidence that if i'm going to share my data with my health care provider or the retail company and that data is going to leak out that's going to

prohibit me from doing business with those entities so while it may not have the devastating consequences on the attack it's severe. >> since there are a lot of fingers pointed in the chinese direction some say that actually if you take a look at the whole scheme of hacking a lot more attacks come from u.s. originated groups than anywhere else. is that true? >> you have to separate, let's just call it war craft. when you look at it from a war craft point of view any advanced economy nowadays has cyber as part of their arsenal and then you've got hacking attempts. and from tha regard there's few countries that are more active in this regard than others are. i don't think the united states, in my view, at least, is out

there chasing economic intere s interests. they're probably looking out for economic progress for those in their countries. >> we know cyber security is an important issue growing in level of that importance. lots of companies have come on and talked to us. why would you single out your own company? what makes you different? >> if you put yourself in the customer's choose they have two fundamental realities. one is that a breach takes about 200 plus days to discover. that's number one. but if you want to have an impact on that it will require an army of people to address that. what we bring to the table is the ability to do this in an automated way. they don't have resources and they cannot find the people to go and deal with cyber security.

the answer has to lie in what you can do with the platforms and that is our core premise. >> let's talk about cars and we'll have a listen at the head winds they're currently facing in china. >> we definitely flexible to the market demand to we see good markets growing in europe and solid growth in the united states so there's other markets in the world where we're balancing the situation in china. overall bmw is following the strategy. if the market is normalizing in the recession we can compensate that with other markets. >> what we know is that the process is coming to a point. we see the so-called new normal in china. at least in august we saw that

they started once again a little bit. we are confident that we see further growth in china so at least coming to our point we don't change any strategic investments in china. >> in china we already have a stable market for us since three years. so there was a stop in the growth already some years ago and now we are going against the market because we have new products in the market so we will close this year better than the year before. risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances.

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welcome to worldwide exchange. >> here are your headlines from around the world. >> a fed rate hike would be positive for the global economy. the bank of japan leaving policy unchanged. they're pausing for breath ahead of thursday's fomc meet. >> auto stocks shift up a gear as they rise for the 24th month. a fiat chrysler deal is not on the cards. >> we went into it in detail when the formal offer was put in front of us and it's not in the

best for our shareholders. >> lift off for jeff besos as he brings his dream of launching rockets into outer space to florida's cape canaveral. >> good tuesday morning if you're just tuning in thanks for joining us finally on the program. let's check in on u.s. futures and what they're telling us ahead of the u.s. market open: we have the s&p 500. lower by four points or so. the dow jones industrials should open down and the tech heavy nasdaq also seeing losses of 7 points. let's check in on the rundown. august retail sales are due out at 8:30 a.m. eastern time.

traders watching to see whether consumers are pulling back on consumer spending last month after consumer sent lt fell to the lowest level we've seen in a year's time. and then at 9:15 we'll get august industrial production figure which is are expected to have slipped last month and then at 10:00 a.m. it is july business inventories. also we're coming off the lowest volume session in a month's time. narrowest trading range. a lot of people are sitting on the sidelines awaiting from the announcement from the federal reserve. let's check in on the european markets ahead of that. it's 16th and 17th fomc meet. we're looking at delines across europe. the ftse is lower by .5%. similar losses from the german dax. let's call it flat. down maybe .5%. not much movement across european markets as a whole. let's check in on the selling we saw in asia last night. pronounced losses we saw in

chinese markets coming off the 2.7% decline we saw to kick off this week but the story in asia was all about the bank of japan. boj ending it's two-day policy meeting not adding any more stimulus but they do leave the door open for expansion of the balance sheets in the future maybe possibly loosening policy further. we had a 2% rally into that announcement. that came off so we ended pretty much flat. maybe up a third of 1% or so. >> thank you and of course here in europe the auto sector is driving markets higher after european car sales accelerated again in august. gm's european division lead the way with a 14.1% increase. let's get out to nancy. she is live at the frankfurt motor show for us now. nan nancy.

those results are perfect for them and this is her first european visit for a major auto show so the timing could not be better and we'll really welcome this growth in europe given the continued head winds in china and concerns that momentum may be reaching a peak. now the ceo was also talking about rumors about the fiat ceo still wanting to merge but she continued to protect their approach. here's what she had to say. >> we look at the plan we have. this is a deal looked at in the past. we're constantly focused on providing for our shareholders and when we look at the plan that's very forward looking, that's where investing and where we plan to lead and that's where our focus is. we have the scale necessary to

build on with that foundation so what's in the best interest of our shareholders is executing the plan. >> you may not want to share in fiat's misery. is that a sentiment you feel? >> i have a lot of respect for bob but our focus is on the shareholder and doing what's right for the company and looking forward. when you look at the technology, there's going to be more change in the next 5 to 10 years than the last 50. we're excited to be a part of that and to lead that and i think it's going to be really important as we go forward. >> so not in the interest of gm shareholders. that was the very clear message from the ceo there and we didn't get a chance to get any rebuttal from the fiat ceo because he made a decision to drop out of frankfurt in order to take care of the uaw talks at home. gm has been a real beneficiary of the growth story in china for as long as now but we saw an

extended drop off in their sales there and we asked how concerned gm was and whether they'd have to scale back production in the market. >> we have a strong position. i'm proud of the team because early on they started to see changes and worked on driving efficiency up and making sure that we're focussing on the right products. we have an suv doing extremely well. the 560, again another very important product so we're focused on products that customers really want and then driving efficient sys and again it's an important market. we're staying committed and invested in that market. >> well, there you have it. the gm ceo really playing down concerns over the china slow down as we heard from many ceos today. it will be interesting to see whether the numbers continue to reflect the optimism from the ceos. >> thank you so much. still to come on the program, worldwide exchange talks between fiat chrysler and the biggest u.s. union are dragging on past a midnight deadline. we'll tell you what it means for both sides. that comes your way next.

>> let's check in on the world's largest company, apple. they're on pace to beat last year's iphone sales record according to the latest preorders. we have preorders of 4.5 million so far which exceeded apple's own expectations and this is ahead of the iphone 6 launch.

what does that mean for iphone 6s sales? it's a bullish sign. we have been on a three day winning streak and we have broken through the 50 day moving average. so all systems go. >> what do we always come back to focus on? it's the iphone even though we're on to model 6s now. >> he's on steven colbert tonight. >> i know. that will be an exciting one to watch. although pretty late from our perspective. let's talk autos. negotiations for fiat chrysler and the united auto workers union are burning the midnight early as they work through the night to try to reach a new contract deal.

she is optimistic her company will reach it with the union. >> we'll talk when we have an agreement we're ready to share with the world. >> let's get more on this story. landon has all the details for us at cnbchq. >> good morning. they will extend the current contract with fiat chrysler on an hourly basis. a sign the two sides are moving closer to reaching a tentative deal. the union's contract expired at midnight eastern time. the uaw will extend the contract indefinitely during talks. the union picked chrysler as it's target company means a deal with the auto maker could be used as a template for talks with gm and ford. they could call for a country-wide strike and limited walk outs. that could cripple their operations. it has 46,000 uaw employees

without forcing big place of employment -- payments from its strike funds. on monday ford and gm agreed to extend their current deals indefinitely meaning workers will continue to operate under the terms of their 2011 contract until a new deal is reached. with the pace of auto sales at a decade high he's under a lot of pressure from members. uaw veterans haven't received a raise in about ten years. as the smallest of the big 3, fiat chrysler has less room to grant wage hikes. 40% of its hourly workers are in the lower pay. he cancelled an appearance to focus on the contract talks. he wants to offer union workers

profit sharing or bonuses when the companies profits are high they're all trading higher. back over to you. >> thank you very much. >> ford and alcoa reached a new supply deal to expand the use in the auto makers f-150 pick up trucks and other vehicles. ford will stop using a new type of the metal to make some parts. the top selling us. truck later this year. it's about 30% lighter than high strength steal and is stronger than already been used in the f-150. that can be used in part such as fenders which hadn't been an option before. >> price action is flat in german trade today. >> let's have a look at commodity prices and how they're trading today. we have had a little bit of flat performance in oil prices over the last couple of days. in line with the lower volumes and lower volatility in equities

as well. wti 44.4. brent 46.6. now carl icahn is raising his stake from 8.2 to 9.6%. he's already the company's largest shareholder. the move comes less than a month after they named two directors ott board. it rose more than 2% yesterday but it is lower by 1.4% today in germany. now the thing i find interesting on this is if we look at the share price action year to date it's down 23% since it's peak so far this year, 3rd of march, down 33%. clearly that's a sharp decline but not anywhere near as sharp as some commodities outright and lots of energy stocks. still off 60% year to date. so this is not simply an i'm investing in the energy

sector-type move. >> he's not the only influential billionaire investing in commodities. we have warren buffet buying and upping his stake. is this a valuation play. these commodity shares and commodity companies have been beaten down so much that maybe they see an opportunity to make money? these guys are not charitable? >> no. if he was just doing some play to get exposure to commodities then there are other names that have fallen further than this. this is a story we haven't explored but they have the first licensed to export gas and despite the recent route prices in asia are still significantly higher and there's definitely an

arbitrage to be held there. >> he is an activist investor so he likes to roll in and make some changes at the company which is what he did at other companies as well. didn't do the same at netflix but i wonder what changes are abound. >> i don't know what we'll have to see but it's nice to revisit a long-term structural story in the energy market rather than the short-term cyclicals is it going higher or lower. that's what he's focussing on here. >> let's change the topic and talk about technology. the search is on for twitter's new ceo. might take longer than expected. this board didn't choose anybody at the meeting last week and the process could stretch into october and maybe even november, closer to the company's earnings report. jack dorsey remains a leading

candidate although there's one serious outside contender. the conference will take place on wednesday. let's check in on twitter's german listed shares and we're selling off by close to 3% or so. >> jeff besos is bringing his dream to the state of florida. he is expected according to the orlando sentinel that he'll announce plans to launch rockets from his company blue origin at cape canaveral in the future. spacex already launching rockets and space capsules from there. blue origin aiming to send tourists into space and to carry

scientific equipment for experiments as well. >> we'll take a quick break but before we do let's remind you of the headlines. investors wait for the sideline for the feds with u.s. futures just below flat. they move closer to a deal after extending the current contract on an hour by hour basis and the u.s. senate will vote on a resolution to reject the iran deal. baerk in a couple of minutes. it's more than the cloud. it's security - and flexibility.

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>> the great rate debate. it started in earnest this morning with japan. data recently out of japan was soft so was further easing to be unleashed? the answer, not yet. so largely as expected no change to the existing loose policy and the october meeting comes with lots more data releases. if there is to be easing most analysts were expecting it to

come then rather than now. what about the commentary? surprisingly upbeat. it was emphasizing that business investment continued to recover moderately while private consumption remained resilient so not exactly in mind with the latest data releases out of japan. that was down beat. the change in language was that exports have been more or less flat where as in august they said they had been picking up. the international weakness was put down to emerging rather than developed economies. now from tokyo, a look at when the bank may be pushed to change it's stance. >> some exists are starting to say that the bank of japan may have to ease further as early as october and some economists are saying that will come together with some kind of fiscal stimulus package from the japanese government. for the time being though they

have maintained their 80 trillion yen asset purchase program and some are starting to wonder how much fire power that has and whether or not it's triggeringly quiddiliquidity in market. it is shaving off a few points of the nikkei 225. that's the latest. back to you. >> so the bottom line, policy is already loose and the risk as it gets even further loose which is not the case for another important central bank we're watching this week he says it would be good for the global economy because it's a sign that the world's largest is improving. we're looking at the trade range. also the lowest volume session

since august as well and that's telling us investors would prefer to sit on the side lanes and wait to see what they'll do. we to have a maybe 28% possibility that they might go but then you have markets telling us that it's 50/50 call. even odds that they're not going to do anything at all for the rest of 2015 but we are waiting for that meeting. the ecb president, former president of the ecb advising the fed to ignore the ifm and world bank warnings and keep all options on the table it is not their mandate and chart to do that. they can can give advice on a medium term basis but not on a

precise decision. i think the fed will not listen to any good advice and will take it's decision with the options open. it kept options open wisely. >> the great rate debate. great title by the way. >> we should add great in. can we get that done for tomorrow. >> squiggle it in with our pens. that's kind of done the tightening for the federal reserve. the loss on markets is he kwif len -- equivalent to three interest rate hikes. >> that's a factor. the general strong dollar in recent longer term is a factor but the likes of the rally in the euro and the yen pointing to the fact that market that maybe had perhaps expected a september

rate hike isn't thinking that's going to happen anymore and i think that's what the market expecting so the risk now this week is that they do surprise by changing the rate. >> that would be a surprise. now people are throwing in this theory of an october lift off. not a quarterly fomc meet but an october move so they don't have to talk about it in the press conference afterwards. >> i agree october is in play. but not because they have to talk about it afterwards but because they could add a press conference if they needed to. bigger debate for me, we're always talking about a slow down in global growth and china, the bigger debate is what we're talking about. what's likely to happen in japan and what's likely to happen in jurors. clearly the dollar strength off the back of that would be hard for the economy to take. >> why do they need to care

about what's happening in china and the rest of the world? that's not part of the mandate. it's all about inflation and employment at 5.1% for the jobless rate we're there. so nine years without an increase, are you feeling asset bubbles like the previous administration? >> i definitely agree with that although you can of course import deflation as the u.s. is massively at the moment from europe because of strong correlation between sterling, euro and domestic inflation here. >> you have added conditions. we have to look at global markets on top of everything else we have been mandated to do. at what point do you move on your own and look at your own do mystic economy and situation. >> there's a chance of a hike this rate because of those factors that you're pointing out. >> this great rate debate will have to continue on the other side of the atlantic. >> thank you for watching today.

i'm wilfred frost. >> i'm susan lee. have a good day.

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good morning. we're all waiting for the big fed decision but today it's japan's turn. breaking overnight, the boj maintains it's huge stimulus program while warning that slowing emerging markets are adding to the pain. carl icahn raising his stake. and to infinity and beyond. jeff bezos will visit cape canaveral where he's expected to announce his private space company's role in a rocket program. now in a race to develop

commercial space flight. it's tuesday, september 15th, i think that's like the mid -- is it a tax day? it's some kind of tax day? it is. and squawk box begins right now. >> live from new york where business never sleeps this is squawk box. >> good morning, everybody. welcome to squawk box here on cnbc. i'm becky quick with joe kernen and andrew ross sorkin. at this point there look to be red arrow. dow futures down continuing declines from yesterday in the market. first, two developing