good morning, everybody. welcome. you're now watching "street signs." i'm louisa bojesen. >> and i'm nancy hulgrave. these are your headlines. >> stocks in europe have been inching higher this morning as oil majors and minors have been rising, helped by a production boost seen at anglo american. >> well, deutsch bank posts its first annual loss, hurt by weaker trading and litigation costs. an investor press conference due to start any minute. >> an earnings miss for roche weighing on the smi. a major negative currency

impact. the ceo says he sees the effect waning. >> we've seen this leveling off. the dollar is also quite strong. probably we'll see less of an effect, but then again, who knows how the currencies will develop. >> defensive to the very end. japan's defense minister resigns, but he continues to deny allegations he accepted a bribe, saying it would lack dignity. hi, everybody. welcome to another "street signs." we're both very happy you're along with us for the ride this morning. shares in deutsch bank kicking off with one of the bigger corporates here in europe. they're trading lower after reporting a fourth quarter loss, hurt by weaker trading. so they're a little lower in trade. a press conference is taking place right now at deutsch bank

headquarters. let's just listen in for a couple minutes. >> translator: since november, we have also considerably improved our client onboarding processes. now, unfortunately, as a consequence of all the actions we took in the second half of 2015, the results for the year were hugely impacted. as a result, we have reported our first annual loss since 2008. over and above this in the fourth quarter, we lost some momentum in trading. i'm not so much concerned about

trading where we decided to exit some capital intensive businesses. our core franchise remains strong, however. we do believe, though, that we lost some grounds in equities. we are determined to invest in our people in research and sales so that we can recover market share. now, having said that, we should not lose sight of the fact, actually, that our businesses have all done well in 2015 thanks to the efforts of our employees. now in pbc, for example, in spite of continuing pressure

from low or even negative interest rates, revenues held up well. in asset and wealth management, we made good progress with an increase of 23% in terms of ebitda. ggb had a record year -- >> all right. so the press conference taking place here as we speak live in frankfurt. deutsche bank outlining what seems to be both a mix between their numbers and their strategy. just keeping in mind, they had prewarned us. they gave us this profit warning last week. we knew quite a bit about what to anticipate today. shares, nevertheless, trading off an additional 1.5%. write downs, litigation charges of around 1.2 billion for the fourth quarter, restructure costs. they made some tough decisions in the second half of the year. they're now essentially saying that's what is reflected in the 2015 results. it's not just them, of course.

we're seeing weakness for many of these bigger investment banks as they're having to deal with litigation costs, a big change to the regulatory environment, and the market turmoil. >> absolutely. i think the big concern here, the surprise, if you will, was the weakness in revenue from the investment bank division. a lot of it, the restructuring charges, litigation, some of it was priced in. when the co-ceo came in, he always stressed it would be painful. but some of the weakness was not expected relative to the peers in the united states. obviously the co-ceo speaking right now. >> the restructuring plans announced in october, very wide ranging. they're looking at pulling out of ten countries. they're cutting their work force substantially. they want to have their number of clients for global markets and investment as well. this is a big deal for the bank to kind of get on track in the right way in order to try to kind of reshape the institution that they are. >> i think that's exactly why we

hear the executives saying this could go on for some time. >> well, at 1300 cte, jeff will be talking to the deutsche bank cfo. >> we also want to bring you breaking news from france. a lot of anticipation over the last few days they would be announcing a deal with iran to get back into the country after sanctions were lifted. we're getting that official announcement. peugeot announcing a 50/50 joint venture to build cars in iran. the actual factory is to be located in tehran. not a huge surprise here, but nevertheless a bit of a first mover advantage. several automakers are keen to get back into iran. >> first vehicles to be produced in the middle of 2017. one thing is the announcement, but the other thing is when will

the oil start flowing, when will we start to see companies get in. >> of course. and it takes time to plan, the paperwork. nevertheless, that's why they're keen to get this under wraps so soon. >> let's move on. another big announcement this morning. less than an hour ago, japan's economy minister announced he's stepping down from his post over allegations he received bribes from a construction company. in a press conference, he said that anything that hampers japan's economic growth has to be eliminates, and he's no exception. akiko is live with this. >> certainly something to look out for, considering how the nikkei did today. going back to what you just mentioned, the economy minister a key figure in getting the economy turned around in japan with abenomics and also a key figure in the tpp, announcing he is stepping down amid a corruption scandal, though he

did deny allegations he took any bribes from that construction company. the question is, how will the markets react? i certainly could add another risk factor in a week where investors are already nervous, looking to the boj to see how mr. kuroda will act, whether he'll further ease monetary policy. the nikkei was down 0.7%. stayed above the 17,000 mark, but still ended the day in negative territory. the nikkei now down 10% on the year in bear market territory. looking to the other markets in the region, we're seeing weakness in main land markets as well. the shanghai composite and csi 300 all ended the day in negative territory. shares in china now down 23% this month, taking in losses totaling 12 trillion yuan, this despite assurances that the market volatility is not a reflection of the real economy. back to you. >> thank you for that update.

meanwhile, let's give you an update on where european markets are trading. it's been quite difficult here when we give you a picture in the mornings, it's not always a similar story at the end of the day. today investors digesting that fed announcement, taking a cue from those moves in asia. at the moment, we're off just about 0.2%. we finally decoupled the equity moves from oil prices. we'll see if that translates into the european session. at the moment, the ftse 100 is basically flat. a similar story for the dax. so flat to mixed here in the european session. let's look at the commodities to see exactly where they're having the influence here. brent and wti both continuing the trend in positive territory. spot gold, however, coming off that highest level for the year that we saw yesterday. gold investors were reacting to the dovish minutes, trying to

decide just how dovish they were. copper as well back in the red due to some of the rebound in the dollar we saw as well. meanwhile, we want to talk about exactly the impact on the dow when we talk about boeing and apple. they had a huge influence together. boeing was off on the day almost 9%. apple off about 7%. this really weighing on the broader tech sector. quite disappointing earnings we had from apple after the bell the previous day, concerns over china and particularly when it comes to t success of the iphone sales, whether or not demand is finally slowing down and what that means going forward for the company. overall, the dow was off about 1.4%. and of course, aside from the earnings picture, the big focus continued to be on the fed, and the fed says it is watching market moves and is closely monitoring the global developments following a decision to keep rates on hold. however, the fomc seemed to leave the door open for another hike in march.

>> all right. let's talk a little bit about electrolux. the group has posted a 202 million crown operating loss in the fourth quarter compared to a 1.4 billion profit in the previous year. costs associated with the incomplete acquisition of ge appliances weighed on earnings. keith mclaughlin is the ceo. he joins us now on the phone from stockholm. good to have you with us this morning. talk us through some of the main points in these numbers because i see you've swung to a loss. also, it does seem like a lot of analysts are looking towards what your future is holding with regards to potential m&a. just bring us up to date. >> certainly. thank you. and to your point, when you look at the results for the quarter and the reason why the market is reacting positive, of course, is they're looking for the one-time effect of the ge transaction costs. which was about 1.5 billion, 1.6

billion in a quarter. when you comprehend that, the operating results were quite good and up year over year. that's partly what the market is reacting to. a good healthy quarter, good strong performance in europe and north america in our professional group. exceptional performance in cash flow, which to your point, puts the company in a very healthy position relative to the balance sheet and the fire power. so we're looking at -- of course, we haven't slowed down our m&a processes. so we're up to date. let's put it that way. in terms of what opportunities are out there. >> sure. i mean, again, taking over ge's home appliances business would have made you a very large player in the u.s. it would have given you 34% of the market there. to then have hire group coming in and taking over the unit, where does that leave you in this important u.s. market with whirlpool also gaining ground? >> so as you know, we're not an

insignificant player there today. we're a relatively strong player as is, independent of the ge deal. so our expectations is that we'll continue to invest in that business and grow that business and bring more relevant consumer value there. so there's no slowing down relative to the u.s. it's a big -- it's a third of the company in terms of sales. it's a big important market that we intend to grow. >> and keith, no slowing down in that market, but you can't deny the disappointment here on the behalf of shareholders, your own disappointment when it comes to the failed ge appliance deal. so what went wrong here? was it a matter of poor due diligence when it came to not expecting the complications with the u.s. justice department, or do you think ge misled you, or was it simply just a misguided deal altogether from the start? >> actually, i think and the market certainly appreciated that it was a very good al. a very smart, transformative move that could have and would have liberated enormous value for the company and therefore

for the shareholders. obviously it ran into anti-trust issues that we knew were there. so we were looking and planning to see that all the way through. it's unfortunate that, you know, in the 11th hour, you know, ge decided to pull out. now, of course, with the sale, we understand why, given the price they got. it's siness. things happen. if you don't take prudent risk, you never transform a company. you never get a big return. so it was, i think, a smart deal and a prudent deal. but we knew there was risk associated from the very beginning. >> and just looking outside of north america for a minute, we can't ignore these headwinds in the emerging markets specifically. your company taking quite a hit from latin america due to brazil. how to you intend to offset this weakness going forward? >> to your point, in latin america and in particular brazil, the market is down 27% in q-4. it's a very difficult economic

environment. of course, you have currency devaluation. you have inflation. you have higher unemployment. it's a very challenging market. in the short term what we have to do is mitigate currency with price activities, but fundamentally, the primary task of the team there that they're on top of is reducing structure costs. so we maintained the earnings and cash in the black in that business until there's structural reform and until the brazilian economy comes back. it's good that for us in latin america, we're also quite strong in chile and argentina. >> just before we go, this is the last few days for you on the job before handing over the reins to the new ceo. what do you plan to do? >> first, spend a little time with my wife and kids. i have a deficit i need to fill up. i'll do some board work. we'll take it slow and see where the opportunities come. >> keith, pleasure to have you

with us. one of your final interviews here. >> very important to spend time with the wife. super important. >> family first. >> richard kelly, head of global strategies, joins us. he's at td securities. you're with us this morning. good morning. what we're looking at, markets. once again kind of treading water on the back of the fomc, ahead of the bank of japan. did we really take that much away from this fomc statement yesterday? was it that much more dovish than what markets had anticipatanticipate ed? >> i think it was more dovish. if the fed had a clear conviction they were not going in march, they would have said so. they also didn't have a conviction to really want to ramp up on market expectations. i think this is the rough environment. there was no conviction within the fed. that doesn't really give markets any real conviction. >> i'm very kind of on the fence with regards to whether or not

we're facing a new run of the recession or not. i listened to many analysts who say we're in a recession, you know, earnings actually aren't looking good, and then we had someone on yesterday who was saying, well, actually, things are looking rosy, don't worry about anything. the u.s. economy is a lot stronger than what we could have hoped for, and earnings season is going to be outperforming and we're seeing that already. >> we're still far from a recession, but we are extremely unbalanced. we're in a world -- you know, the fed didn't even want to give context on what's the economic outlook. usually they tell us we're going to grow at a moderate, modest pace. they couldn't even agree at aggregate. in the manufacturing sector, it's a recession. in the service sector, you're holding in. the jobs environment in the u.s. is improving. but there's still massive deleveraging going on around the world. there's a massive change going on in china that's exporting shocks and deflationary shocks around the world. the oil adjustment that's going on. that's just something that's going to take a year or two to work its way out.

>> one of the bright spots from the fed announcement was conviction of the job picture was improving. going forward, isn't it possible we'll continue to see additional layoffs in the energy sector? >> you're absolutely going to continue to see layoff there is. the dramatic collapse you've now seen again in the start of the year just accelerates that move faster. i think the point there is we're all trying to find the bottom nf that energy market. it's still an extremely small part of that market. it still doesn't have the same credit multipliers that go through the economy. that adjustment now looks like it will come faster. it perhaps means you start upgrading your assessments for oil by year end. >> that being said, if it's a bit too early to find the bottom in the energy sector, where do investors go? >> in uncertainty, it tends to support the dollar. i think that's still a problem for us right now. you wanted to say this was going to be a world that was

improving, inflation was rising, you'd look to emerging markets where there's tremendous value. as long as we have these risks on growth and inflation is still falling, that does not allow emerging markets to outperform. you keep looking at the value building there, and in the interim, you're looking to be very defensive. >> all right. >> richard, thank you very much. have a good day. richard kelly, head of global strategy at td securities. get involved here at the top of the show. we can use some of your e-mails. the address on screen right now. streetsignseurope@cnbc.com. we do check it. you can also follow us on twitter. find us @streetsignseurope or @nancycnbc or @louisa bojesen. >> let us know what you think about the fed earnings, oil. it's all coming together here. and still so much more coming up throughout the show. and it's an unwell set of earnings for drug maker roche.

we find out what the management is doing in order to medicate its ailments. meanwhile, facebook's impressive earnings stat us update gets plenty of likes from investors. and fiat shares in the slow lane after its business plans failed to rev up engines on the stock market. stay tuned as we bring you the details.

hi, everybody. welcome back. it's a miss for roche. the swiss drug maker posting income of 11.8 billion swiss francs. julia, what else do we need to know? what else did they tell us? >> reporter: well, that translates to the earnings per

share that was also then weaker than expected, louisa, coming in at 13.49 swiss. so that was a bit of a disappointment. if we look at the dividend, yes, they raised it to 8.1 swiss, but analysts had been hoping for more, around 8.3. so despite the fact when they pick this up with the ceo, he pushed back and said, look, we've had a successful year in both pharma and diagnostics. he kept pointing to the pipeline for multip . listen to what he had to say. >> we pay our dividend in swiss francs. in particular, the investors who are in europe, they benefit from the strengthening of the swiss franc. i think it is a good development

and i remind you it's the 29th consecutive increase. >> reporter: so currency not just about the impact on the dividend but more broadly on the business. the swiss versus the dollar. that's featured for all the health care stocks this year. but bernstein specifically on roche said, look, they're a great cancer company, but they've got a really big problem with the copy cat drugs that will likely eat into some of their revenues. you either have to be very optimistic about the pipeline, and roche are, or you look at m&a. he said valuations are way too high, but we've seen valuations come back down. i said, look, is there opportunity for m&a, some bolt on acquisitions to help the business? listen in. >> m&a strategy is very much focused on acquisitions. we do smaller, midsized acquisitions to bring in and

complement our product portfolio, bring in new technologies. we're not in the big m&a transactions to start with. yes, prices have come down, but don't forget how much they have gone up before hand. so i find it still very challenging from an economics point. >> reporter: we have to remember overall group sales came in a touch better than expected. in terms of the outlook and the guidance for 2016, they're saying sales will grow in the low to midsingle digit range in 2016. ubs came out immediately and said, look, consensus is going to fall by up to 10% given that conservative outlook. i think that's what you can see reflected overall in the share price today. louisa? >> julia, thank you very much for that. let's talk about h&m as well. they're trading more than 4% lower after the retailer saw fourth quarter pretext profits

falling amid weaker than expected january sales growth. the world's second largest fashion group says bigger markdowns on winter clothing especially alongside with the strengthening dollar will be weighing on its first quarter figur figures. >> fiat shares also down almost 4%, this after shareholders seem to be unconvinced with the medium-term plans. fiat has upped its 2018 operating profit forecast after seeing stronger than expected sales growth in north america and europe. that has been fueled by rising jeep suv purchases. i think the reaction here is despite a strong quarter, people wonder if this is as good as it gets because some saying those u.s. sales should have really driven fiat's performance. we've been talking about the stars align so far with lower oil prices and the currency tail winds fiat has been seeing due to the dollar move. >> absolutely.

anglo american shares trading higher after an upbeat fourth quarter production report. this thanks to the mine which produced more than four times as much iron ore than in the same period of last year. >> and shares in repsol are higher despite a near 3 billion euro writedown on its oil reserves. this translates to a 20 n15 loss of 1.2 billion euros. they said they would accelerate its cost-cutting plan. investors seemingly like the plan to get facing the reality of new lower oil prices. still to come here on "street signs," good morning, everybody. >> waking up now. >> traders are eyeing sterling as they await the u.k.'s latest fourth quarter gdp. will it be a pounding for the pound? puns. >> keeps on coming this morning. >> we'll break the data down for you next and see you on the other side of the break.

hi, everybody. welcome back to "street signs." i'm louisa bojesen. >> and i'm nancy hulgrave. these are your headlines. >> the stoxx 600 turns slightly negative. >> deutsche bank says it's investing in people to kick start the equity business. this after the bank posted its fist annual loss since the financial crisis. >> an earnings miss for roche weighing on the smi, citing a major negative currency impact. >> we've seen this leveling off. the dollar, as you know, is also quite strong. so probably will see less of an effect, but then again, who knows how the currencies will develop. >> defensive to the very end. japan's economy minister resigns, but he continues to deny allegations that he accepted a bribe, saying it would, quote, lack dignity.

hi, everybody. welcome back. u.k. gdp data just hitting our wires right now. fourth quarter growth looking pretty weak. we're looking here at a preliminary fourth quarter 2015 figure of 1.9% year on year versus what we saw in the third quarter of 2.3% year on year. the lowest since 2013. and by and large, skimming through, it doesn't look too good. >> you said that's the key here, in line with forecasts, which could explain why with e see the

sterling dollar trade moving up slightly. overall as you said, the weakest in nearly three years. but that quarterly came in line with expectations. >> they're saying fourth quarter growth driven by services, especially a pick up seen in businesses and financial services. i'd be interested in what they say on manufacturing since there's where we've seen quite a bit of the weakness out there. just jumping a bit highern sterling. >> let's bring in our next guest to talk more about this data. it's the director and strategist at citi. pleasure to have you with us. we're just dissecting the numbers on gdp data for the u.k. altogether really coming in line with forecasts here. and what does this do when we talk about the rate timeline for the bank of england here? we just heard from carney a few days ago that this is not the time to discuss raising rates. what is your outlook there for the bank of england? >> you know, when if comes to the boe, all the focus is on the qir next week. we expect them to talk about their expectations. in house, if we look at where the rates curve is priced, i

think september of 2017 is the first expected hike by the boe. it's going to be difficult to be more dovish than that in our view. so we look at the u.k. rates current as one that does have so opportunity, and for sterling, that does mean perhaps a little bit of short-term sterling strength. >> so we've got a bit of short-term sterling strength, but it's not just the bank of england we've been watching. we have the fed in focus. first, i want to get your thoughts on japan. japan's economy minister is going to resign. this is quite different from what we heard from the prime minister a few days ago. with him out of the picture, could we finally see a change in abenomics? no doubt the officials in tokyo are quite concerned with the level of the yen right now. >> absolutely. i think there's a lot of concern about it. with the boj on friday, it's kind of increased the market attention and focus. ultimately, abenomics has set some high bars, and it's been

moving towards them, but it's been moving at a rate most people feel is too slow. while it's not the base case view of ours in house or on the street, there are some expectations going in that the boj really needs to ramp up to help meet these goals that abe has laid out. that's kind of the event risk we're facing on friday. >> richard, in some of your recent musings, you talk about how fx investors are doing in general from the recent moves. which moves in particular, and what do you think the next month or so has in store? what's the next position here after the fomc is out of the way? >> sure. if we look broadly where the central banks have been coming in, whether it's the ecb, the fed, and perhaps the boj on friday, they've all been moving toward a more neutral, more cautious stance. ultimately, ifx has done well because investors were positioned for the short. when we came into the beginning of the year, i wouldn't say they were large positions, but they were in line with markets. i think that certainly helped fx

only investors. going forward, we're probably going to enter a period of stability. risk can't sell off every single day. with volatility kind of beginning to slow down and to wind down a little bit, you're seeing upward pressure on the aussie dollar. you're seeing upward pressure on the high beta currencies. i think we enter what i would call risk stabilization, a period where markets recover a little bit, but ultimately, this doesn't change the bigger term macro picture we started the year with. by the time we move towards mid to end of february, we re-enter that defensive bearishness. >> are there any of the big crosses where you would anticipate a breakout of some of the tight trading ranges we've seen? >> the one we're following quite closely is euro-dollar because it's moving to the top end of the range. it looks like some upward pressure on the cpi, or upward in terms of expectations, from germany today is putting a little upward pressure on euro. we're watching that one. certainly aussie dollar is

trading off the bottom of the range back to the midlevels. if you get into the environment where the u.s. data, whether it's durable goods today, gdp tomorrow, disappoints to the downside, you can see some dollar weakness. so euro-dollar and aussie-dollar are the ones we're following closest. >> richard, thank you very much. director and fx strategist at citi. meanwhile, let's bring you up to speed with the european markets because we have been kind of going in and out of positive territory. now we've got the xetra dax as the only major market in the red. the ftse 100 holding just barely positive but basically flat. we talk about the german market. we have deutsche bank weighing to the downside and also some german pharmaceuticals moving lower after roche disappointing w let's look at how the u.s. markets are set to open.

we are seeing a rebound on the dow jones. the nasdaq also called higher. this after tech was the worst performer on the sector yesterday. >> isn't that the ring tone for samsung? you know, the whistle. >> it must be. >> yeah, i think. >> i've never had a samsung, in full disclosure. >> you always hear that. well, shares in samsung closing lower after the company warned of weaker results in 2016 due to a slowdown in the smartphone market. this after apple predicting its first ever quarterly drop in sales. samsung also predicted earnings in line with previous forecast as well as a rise in revenue during the same period. >> well, it was a different story for facebook yesterday

because shares in facebook soared in after hours trade. after the social network powered st estimates in the fourth quarter. they posted revenue of nearly $6 billion. this as monthly active users hit 1.59 billion. well, julia boorstin has been taking a closer look at those earnings and wrapped up the details. >> facebook shares jumping higher on better than expected results, beating on both the top and bottom lines. the company's earnings per share of 79 cents coming in 11 cents better than expected, and monthly active users grew to 1.59 billion, while daily active users were 1.04 billion. for the very first time over 90% of both monthly and daily active users were on mobile devices. on facebook's earnings call, mark zuckerberg talked about facebook's growth around the

globe and the potential ahead. he even dropped a hint at the bigger role video is playing and could continue to play for facebook. >> now, 100 million hours of video are watched daily on facebook. we've been testing new experiences like suggested videos, which enables people to discover more videos they might be interested in. we're also exploring ways to give people a dedicated place on facebook for when they just want to watch videos. >> just before the earnings call, i spoke with coo sheryl san diego berg. she attributed the upside surprise to shifting more money into mobile advertising. as facebook delivers measurable results, the ability to buy across both facebook and instagram, and she also talked about the value of growing video. >> consumer viewing of video on facebook continues to be really strong on our platform. 500 million people are watching videos every day. in terms of our business, that creates real opportunity for us because we want the ad format to watch the format of what consumers are doing. so we have an ability for

marketers to use that format. >> facebook cfo says the price per ad on facebook increased 21%. and the number of ad impressions grew 29%. he also warned about a tough foreign exchange rate environment going forward and tough comparisons, considering just how fast facebook has been growing. back over to you. >> thank you very much. first of all, it is the ring tone for samsung. it's the whistle. i'm 100% sure. it's phenomenal when you look at what the tech sector is doing at the moment and what some of the biggies are doing. especially in mobile, which was underscored by facebook. 100 million hours of video watched daily. >> unbelievable. when you see that figure, you have to wonder what google alphabet -- we should say whether or not they're taking note. probably a bit concerned when they talk about their youtube product facing this competition from facebook. from the sounds of it, they want to expand their video offerings. >> well, yes.

also, they must be gearing up for more spending. their network is growing massively. there's a lot of speculation about their data centers, that they need to beef them up. talk about them being present in new areas, like artificial intelligence, being involved in all kinds of exciting projects like that. and they've got the money. >> they've got the money to spend. the other thing i found so interesting here is they did warn slightly on the global macro head winds that we're facing. they warned a little here on 4x. the cfo said if the dollar had held constant, there would have been 300 million additional revenues. it goes to show, if you have a product people like, it doesn't necessary matter. you can withstand these head wind. we hear from a lot of other companies saying blame the dollar, blame the head winds. that's not true with facebook. >> it's true. that's the after hours move. people really loving this. i'm still a bit flummoxed by how you make money off some of the apps they bought, like whatsapp,

for example. i get it. fantastic app. very fast to use with your friends. but how do they turn it into something money making? i know it's about data sharing and stuff like that -- >> and it's the breakout they don't actually release. instagram as well. people are curious to know where the revenue comes. it's presumed the mobile revenues from instagram itself are quite high. >> we're so lucky because we've got really smart viewers. if any of you know, how do you actually make money off instagram or whatsapp. >> it's the user growth. >> but they're not advertising on whatsapp, are they? how do you turn it into revenue? anyway, let us know if you want. you can find us both on twitter. we're also on e-mail. streetsignseurope@cnbc.com. now, ebay shares taking a nose dive in after hours trade as the group disappointed with its guidance and issued its

fourth straight quarter of declining sales year on year. is it all gloom for the commerce company? josh lipton sent this report. >> investors had bid up ebay some 13% over the past 12 months heading into this latest report. after results hit the tape, investors dumped the stock. ebay reported in-line results of 50 cents on 2.3 billion. active buyers climbed 5% to 162 million. the total of goods sold on the platform clocked in at 22 billion. guidance, however, a disappointment for both the quarter and the full year. the ceo emphasized that his company is aggressively pursuing strategic initiatives to create what he called a vibrant marketplace and to reposition ebay to compete more effectively over the long term. he also acknowledged these initiatives will take time to play out. he also noted the serious fx head winds that ebay is encountering and will continue to deal with in the quarters ahead.

60% of the company sales do come from overseas. some analysts, including piper jaffray's jean meunster think ebay will keep struggling to return to commerce growth. however, he says it's already reflected in the stock price, which is why he remains neutral. in fact, most analysts covering ebay, more than 60%, agree with that call and are on the sidelines for now. for cnbc, i'm jh lipton in san francisco. >> and we've been telling you this morning about the resignation of japan's economy minister. the japan minister is to name the xlpd. we'll bring you more developments on that. a confirmation as soon as we get it. but that's the story. he's a fmer executive of the ruling liberal democratic party. he will be the new economy minister. that's a report coming from the public broadcaster.

>> meanwhile, let's get back to the earnings picture moving stateside with shares in paypal only a few months on from its spinoff. the results marked 21% revenue growth and 27% eps growth on an adjusted currency neutral basis. the company sees tremendous opportunity to expand as money becomes more digital. >> alibaba is expected to report its weakest quarterly revenue growth on record. the chinese e-commerce group is due to release numbers before the u.s. opening bell today. what should we anticipate? >> well, we're going to expect to see some very weak revenue numbers, but the profit figures should hold up. we're expecting to hear that the earnings numbers rose by 69% to

$1.5 billion. that because analysts say alibaba has been tweaking the way it makes profits off of every single transaction. the company should stand to benefit. for the revenues, we're expecting a rise of 29%. even though that's a pretty good number, when you look at other quarters, it's the weakest that the company has seen for years. so most people -- you know, there are some analysts who are saying this is a very natural thing for alibaba because it does dominate the e-commerce industry here, but at the same time, there arey going on here. that alibaba does act as a proxy of the economy. right now there are a lot of fes about how quily the economy is growing. so if you look at alibaba as a long-term play, yes, the middle class is growing here. yes, e-commerce is exploding.

but at the same time, because there's so many concerns about the economic growth, the question is whether or not these concerns of the economy are going to start to affect consumption patterns how how wealthy consumers here feel. guys? >> thank you for that. with so many doubts as well about the validity of some of the gdp data, you can bet others will be looking at alibaba for a true picture. meanwhile, the th earnings continue after the bell today when amazon and microsoft report on what is the busiest day of earnings for s&p 500 companies. well, wilfred frost joins us from the u.s. after tech was one of the worst performers yesterday, what can we expect today? >> absolutely right, nancy. earnings continues a pace. amazon and microsoft really the focus in the tech space. of course, traditionally the focus for these two companies was on retail for amazon and on

pc software sales for microsoft. but they actually both really come head to head in the cloud space, which will be a big area of focus. for microsoft, that means it's microsoft azure. but also for microsoft over the last couple of quarters, we've seen improving trends for the traditional windows and office 360 products. if we went back to disappointing guidance there, it would be a head wind for the stock price. for amazon, of course its amazon web services has been a huge area of growth, its own cloud computing offering, which is a leader within the space and forecasts for 70% revenue growth year over year as it continues to add customers there. of course, for amazon, we also look at prime subscriptions, which following netflix earnings yesterday have a slightly tougher comp. we expect them to be able to buck the trend of the relatively

soggy retail outlook that we've had over the last couple of weeks relating to the holiday period. as you say, though, it is the busiest day of earnings. will that mean that companies can ignore the international environment at the moment and react in line with their earnings as facebook has done overnight? and of course as apple did to the downside yesterday. back to you. >> thanks for that. investors there taking a break. this is how u.s. markets are set to open ahead of that earnings slew. we're expecting to get a bit of a rebound here with the dow jones called higher by almost 100 points. stay with us. we'll be back after this short break.

hi, earn. welcome back to "street signs." the japanese government will be naming the ex-ldp executive as

the new economy minister, according to nhk. i he replaces amari, who's stepping down amid allegations he's received bribes from a construction company. it comes at an interesting time. people very much looking to see whether abenomics is working. >> that's right. we do know amari has said he did receive some money from the construction company, although he handed it over to the secretary. he's not suggesting he handled it improperly in any way. so denying those allegations at the moment. as you said, taking the decision to get out of the way amid separate from the corruption else allegations. we've seen some criticism surrounding abenomics, that it hasn't gone far enough. a lot of eyes will be on what the announcement of the new economy minister actually means

for abenomics. >> and keeping that in mind, the central bank focus also on the fed with the federal reserve saying it's watching market moves and is, quote, closely monitoring global developments, following a decision to keep rates on hold. however, the fomc seemed to leave the door open for another hike in march. joining us now for more reaction to that decision is the chief economist at stifle fixed income. a lot of back and forth over just how dovish the latest fed statement is. you were in the camp that said the fed never should have hiked in december even. and based on what the fed has said when it comes to inflation to job strength, are you sticking to that position? >> well, you know, it's interesting because it's a very big divide between what we expect the fed to do and what the fed should do. should the fed have lifted off in december? certainly not. and i think many committee members on the fomc actually recognize that with still very

moderate language around several key sectors in the u.s. economy, particularly household and business spending. but on the flip side, it's very clear that they're leaving the door open for a rate increase as early as march. focus now on expectations of where they think the economy is headed. still a generally, very optimistic overview of the u.s. economy in that january statement, particularly on the labor market front. upgrading that language surrounding job creation to solid as of late. so again, a growing divide between the lack of realize improvement in the u.s. economy and the committee members' expectation for growth one to two years hence, which will be driving that need for subsequent rate increases at this point. >> but really, the fed here is keeping the door open to a hike, which means they are keen to keep on this gradual path throughout the year. when we talk about the inflationary pressures to the downside, so much of it being on

the oil price. doesn't this suggest the fed is right to keep on going? >> well, certainly. as we heard from chair yellen following that december rate decision, she said essentially we don't need to see inflation rise to expect inflation to rise. so again, reiterating the fact that the focus of monetary policy is on expectations. although they continue to acknowledge the still very sluggishly low level of inflation as they have in every communication since december of 2012, the majority of committee members recognize that the two key variables keeping inflation at these low levels, a strong dollar and low energy prices, are expected to have transitory effects or temporary effects. so the committee is still beholding to that transitory language, expecting that as we move forward, as you mentioned energy prices stabilize, inflation will begin to rise. there's a question around the timetable surrounding that. the fed also removed their reasonably confident language. so really extending that

potential timeline for inflation to meet that target from a near term to possibly a medium term to longer term time frame. >> very briefly, we're just coming up to the end of the show, really briefly, is manufacturing really that weak state side compared to services? >> oh, it certainly is. remember, we're at a six-year low in terms of production at this level. the last time we were at these weak production levels, the fed was actually adding stimulus. we were actually implementing qe-1 rather than the fed beginning to take away accommodations. so certainly a very significant change in events with production falling into negative territory and the fed embarking now on a rising rate environment. >> thank you very much for your time. chief economist at stifel fixed income. we were asking you, how do you actually make money off whatsapp, instagram. people writing in. dean says instagram and snapchat

now have movie and local adverts. anthony says facebook, instagram, et cetera provide the link to content. content is king. and matthew, whatsapp does have a revenue stream. i've been paying a dollar per year. i did know that, but i thought they were scrapping that. >> the proof is in the numbers though with those facebook results. speaking of results, we will be speaking to the deutsche bank ceo coming up. an interview you don't want to miss. stay tuned.

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good morning. investors are liking facebook today. the social media giant's quarterly profit tops $1 billion for the first time ever, blowing past wall street expectations. it's your money, your vote. gop presidential hopefuls set to square off tonight in their final debate for the iowa caucuses. we know donald trump says he won't be there, but now tud cedz is raising the stakes. and the happiest, healthiest state in the united states unveiled. the new report this morning may have you planning a vacation to a warmer climate. it's thursday, january 28th, 2016. "worldwide exchange"