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021f274b2f0a269eebeb5a6e3e672c8d | https://www.cnbc.com/2015/10/01/your-first-look-for-friday-october-2.html | VIDEO1:0801:08Final Trade: Ford, Twitter, & Bristol-MyersFast Money
The "Fast Money" traders revealed which areas they're watching into Friday's trading.
Tim Seymour was bullish on Ford.
Dan Nathan was looking at Twitter.
Karen Finerman had the Market Vectors Oil Services ETF on her radar.
Guy Adami was watching Bristol-Myers Squibb.
Trader disclosure: On October 1, 2015, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders:Tim Seymour is long AAPL, BAC, CLF, DIS, F, FCX, GE, GM, GOOGL, INTC, JPM, KO, LGF, T, TWTR, Tim's firm is long BABA, BIDU, MCD, NKE, NOK, SBUX, YHOO. Dan Nathan is long PYPL Oct call calendar, BA Oct put spread, INTC Oct put spread, QQQ Oct put spread, UAL Oct/Nov put spread, XLU call spread, TWTR, PG. Karen Finerman is long BAC, C, FINL, FL, GOOG, GOOGL, JPM, KORS, KORS call spreads, M, URI, she is short SPY, Her firm is long ANTM, AAPL, BAC, C, DIS, FINL, FL, GOOG, GOOGL, GPS, IBB, JPM, KORS, KORS call spreads, M, M calls, SUNE, URI, URI long puts, M call spreads, her firm is short IWM, SPY, MDY, USO, Karen Finerman is on the board of GrafTech International. Guy Adami is long CELG, EXAS, INTC, Guy Adami's wife, Linda Snow, works at Merck.
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aa63377c222b1bda5b15727c31b0ba96 | https://www.cnbc.com/2015/10/02/4-ways-to-trade-the-big-jobs-miss.html | VIDEO1:3901:394 ways to trade the jobs reportFast Money
After a disappointing U.S. jobs number Friday, "Fast Money" traders chose assets that could rally if the Federal Reserve stays put on interest rates for the foreseeable future.
The U.S. economy added 142,000 jobs in September, far fewer than economists had expected. The number reduced market expectations that the Fed would move off of near-zero interest rates this year.
Read More
In that environment, traders Steve Grasso and Dan Nathan looked to utilities stocks, which they perceived as defensive plays with little exposure outside of the United States. The Utilities Select Sector SPDR Fund, for instance, rose more than 1 percent on Friday.
"Utilities work on both sides of the argument" on the Fed raising interest rates, Grasso said.
A melter casts an ingot of 92.96 percent pure gold at a procession plant of the Olimpiada gold operation, owned by Polyus Gold International company, in Krasnoyarsk region, Eastern Siberia, Russia.Ilya Naymushin | Reuters
With a rate hike possibly delayed, trader Tim Seymour believes rate-sensitive financial stocks could fall to appealing entry points. He said they make a "great opportunity" if weakness on Fed uncertainty continues.
Trader Guy Adami, meanwhile, would look to profit from gold. The dollar could fall if the Fed does not raise rates, which gives gold prices a good chance of rising, he contended.
Read MoreJobs miss is the 'worst case scenario' for markets
He pointed to the Market Vectors Gold Miners ETF, which rose 8 percent on Friday.
Disclosures:
Tim Seymour
Tim Seymour is long AAPL, BAC, CLF, DIS, F, FCX, GE, GM, GOOGL, INTC, JPM, KO, LGF, T, TWTR, Tim's firm is long BABA, BIDU, MCD, NKE, NOK, SBUX, YHOO.
Dan Nathan
Dan is long PYPL Oct call calendar, BA Oct put spread, INTC Oct put spread, QQQ Oct put spread, UAL Oct/Nov put spread, XLP Nov calls, XLU call spread, TWTR, PG
Steve Grasso
Steve is Long AAPL, BA, BAC, CC, DD, DIS, DECK, EVGN, FIT, KBH, MJNA, MU, PFE, PHM, STRP, T, TWTR, GDX firm is long BP, COP, CVX, FCX, NE, NEM, OXY, RIG, kids own EFA, EFG, EWJ, IJR, SPY
Guy Adami
Guy Adami is long CELG, EXAS, INTC, Guy Adami's wife, Linda Snow, works at Merck.
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0b91ecf914277062f17b593a0e57bb0a | https://www.cnbc.com/2015/10/02/auto-sales-can-go-even-higher-yes-say-some.html | Auto sales can go even higher? Yes, say some | Auto sales can go even higher? Yes, say some
VIDEO1:2201:22Auto sales surge
When the research firm Autodata reported the pace of U.S. auto sales for September was 18.17 million vehicles, the reaction was immediate.
This is as good as it gets for the automakers, observers said.
"Every contractor I see has a new vehicle. New cars on every block. Demand can't last too much longer," said Joseph Greiveldinger in Marietta, Georgia, in a tweet to CNBC.
Maybe, maybe not.
A salesperson (left) shows vehicles to a shopper at a Toyota dealership.Getty Images
"Yes, we see auto sales getting stronger next year," said Mark Wakefield, managing director at the consulting firm AlixPartners. Wakefield, who runs the firm's automotive practice in the Americas expects U.S. sales to increase by another 300,000 vehicles next year. "We see sales next year at 17.4 or 17.5 million vehicles."
Six years into this current up-cycle for the auto industry, he said he believes many of the ingredients that fueled the steady growth are still driving people into buying a new car, truck or SUV.
Employment: Despite softer numbers in September, unemployment is expected to remain relatively low. Old cars/trucks need replacing: The average age of vehicles in the U.S. is still climbing. It's currently over 11 years, according to IHS Automotive. Gas Prices: Most project them to remain relatively low, giving consumers a sense they have more money in their monthly budget.
Wakefield admitted conditions could change quickly. He pointed to interest rates as a perfect example. Right now, the average auto loan interest rate is 4.77 percent, according to Equifax, but that will likely change in 2016.
"Unless something dramatic happens with the Fed and interest rates, we see sales remaining strong," he said.
Traffic at Volkswagen dealerships 'quite good': AutoNation CEO
While business has seldom been better for auto dealers around the country, this is a cyclical industry and at some point there will be a drop-off in sales. Wakefield sees a gradual pullback in 2017 and 2018 followed by the biggest decline in 2019 when AlixPartners estimates annual auto sales will slip to 14.9 million.
"There will be a downturn someday and it will hurt," said Wakefield. Veterans of the auto industry know that day will eventually be here, but for now they are savoring a surge in sales the industry hasn't seen since 2005.
"If you would have told me five years ago that this level of auto sales and profits were possible, I wouldn't have believed it," said Wakefield.
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d9a920c62c7898b9fcc961d396239fd1 | https://www.cnbc.com/2015/10/02/california-roars-back-but-theres-a-dark-side.html | California roars back, but there's a 'dark side' | California roars back, but there's a 'dark side'
VIDEO1:4801:48California's economy fearsPower Lunch
California was hit hardest by the recession, but the Golden State has come roaring back with a vengeance. A new tech boom, the housing recovery and a temporary tax increase approved by voters under Proposition 30 have led California out of a deficit and into a budget surplus. Unemployment has fallen from a peak of 12.4 percent to 6.1 percent.
Now for the bad news.
"There is a dark side for the jobs and the budget," writes economist Bill Watkins, who runs the Center for Economic Research and Forecasting at California Lutheran University. The dark side, in Watkins' mind, is the state's continuing reliance on the fortunes of its richest residents, especially since capital gains in California are taxed as regular income. "With recent stock market losses, California's major taxpayers will likely have a bad year," said Watkins. "Look for California's surplus to disappear quickly."
Workers assemble a floor to a house being constructed at the BLU Homes production facility in Vallejo, California, Sept. 11, 2015.David Paul Morris | Bloomberg | Getty Images
Under Prop 30, the highest tax bracket in the state moved to 13.3 percent, and capital gains are taxed as regular income. The state says an estimated 10 percent of total personal income tax revenue comes from capital gains, or about $12 billion this year.
"So far we have not seen a big drop (in tax revenues), but there's a real risk," said Jerry Nickelsburg, senior economist for the UCLA Anderson Forecast. He added that the risk could increase if Prop 30 is extended past its 2018 expiration date, "because it extends this extraordinary dependence that we have on high-income earners."
H.D. Palmer of the state Department of Finance said tax revenues in the fiscal year that started July 1 are "so far, so good." However, he is keeping an eye on the stock market: "Just 1 percent — about 150,000 of the returns — are responsible for more than 45 percent of all the personal incomes taxes paid in California."
However, Palmer pointed out that, unlike during the recession, California now has a rainy day fund. Any capital gains tax revenues above 8 percent go into that fund as a sort of hedge against the markets. "We know that the economic expansion that California has enjoyed is going to come to an end at some point," said Palmer. "We just don't know exactly when that's going to be."
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Kansas budget woes could hit small businesses hard
The good news is that California can expect to see more people earning more money. The Los Angeles Economic Development Corp. predicts the state will add over 386,000 jobs this year "with the biggest gains coming in administrative and support services, professional, scientific and technical services, and leisure and hospitality." California contributes 13 percent to U.S. GDP, with an estimated output of $2.3 trillion last year. The UCLA Anderson Forecast predicts the state will see employment grow 2.7 percent this year, before starting to slow.
As hiring slows, however, housing prices will continue to accelerate. The median price for a home in San Francisco is now $1.25 million, up 18 percent in a year, according to CoreLogic. Prices have topped $1 million across the bay in Berkeley. In Los Angeles, median prices are closing in on $500,000. "Affordability has become a real issue," reports the UCLA forecast, which added that California's drought in affordability will only get worse over the next two years.
Job and revenue losses mount in parched California
This is bleeding over into higher rents. According to UCLA's Nickelsburg, the percentage of renters spending at least 30 percent of their incomes on rent has grown from 40 percent to 46 percent. H.D. Palmer in the state's finance department said California continues to see a greater increase in construction of apartment buildings over single-family homes. "That's a trend we've seen for a number of months."
As if that isn't enough, Watkins at CLU threw in one more worry: "China … is a major concern."
There is a silver lining, though, just not in the economic forecast. It's in the weather forecast.
Rain is coming: storm clouds, which California will welcome after four years of drought. Whether it rains or not, Watkins points out the state's massive agriculture industry has been adapting for years, boosting production with less water. "This is a story of fabulous innovation," he writes, "one that producers in other industries can look to for inspiration."
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40d1ecd72044d71c134d9a6f497ae7ce | https://www.cnbc.com/2015/10/02/cramer-game-plan-get-ready-for-earnings-playoffs.html | VIDEO11:0311:03Cramer game plan: Get ready for earnings playoffs! Mad Money with Jim Cramer
Earnings season starts next week, and despite the fact that most investors seem to think that only the Fed matters, Jim Cramer knows that corporate sales and earnings are key.
"12 weeks a year — the three weeks each quarter that I regard as official earnings seasons — can matter. Consider them the playoffs and all the rest are just regular season games," the "Mad Money" host said.
With this in mind, Cramer shared his game plan of stocks and events that he will be watching next week:
Monday: ISM non-manufacturing report, The Container StoreISM non-manufacturing: Just as Friday's soft nonfarm payroll number mattered to Wall Street on Friday, Cramer will be watching for the ISM non-manufacturing number. In fact, he considers it to be the lone number that has remained strong. The U.S. is a service economy, so if it shows a slowdown, it could be completely nuts for the Fed to even consider tightening.
"You know my new view, though: the Fed has to fish or cut bait. Either raise rates this month or shut up about them until next year. Anything else is just torture," Cramer said. (Tweet this)
The Container Store: Cramer is watching this one because it's one of the biggest disappointments out there. Can it pull a rabbit out of a hat? Cramer's not a fan of the stock, but it has now gone so low that maybe at last there could be something positive to say.
Either raise rates this month or shut up about them until next year. Anything else is just tortureJim Cramer
Tuesday: PepsiCo, Yum Brands, Adobe analyst meeting, Germany's industrial productionPepsiCo: This consumer product company has done miraculous things lately, but the stock has done nothing. Could the tides be changing? Cramer thinks eventually something good is bound to happen with all of the right moves that its CEO has been making.
Yum Brands: This stock will prove to be a bargain, and Cramer says to buy it if it gets hammered on Monday.
Adobe analyst meeting: The meeting might prove to be the best thing that happens on Tuesday. Cramer wants to own this stock ahead of the meeting, because he thinks the story is fantastic.
Germany industrial production: Cramer is paying close attention to this number and to the trade balance figures on Thursday because 70 percent of Germany's business is related to cars and exporting. Given the turmoil with Volkswagen recently, Germany has a few problems right now that could impact the health of Europe.
Wednesday: Constellation Brands, MonsantoConstellation: This company has been nothing short of miraculous, Cramer said. It has the hammerlock on the two fastest growing beer brands in the U.S., Modelo and Corona. Cramer recommended doing some buying both before and after the quarter.
Thursday: Domino's Pizza, AlcoaDomino's: Cramer considers this to be the most forward-looking tech play in the restaurant business, which is the secret to its growth. He expects good numbers but suggested waiting until after the quarter to buy it as there could be a sell-off after it reports.
Alcoa: Its recent announcement that it will break up into two companies, a higher value-added products play and a low-cost commodity maker, didn't get the attention it deserved, in Cramer's opinion. He thinks there is one point of downside and four points up, and he likes the risk-reward.
Read more from Mad Money with Jim Cramer
Cramer Remix: Trust this market move? How to tell Cramer: Cash in on stocks due for a bounce Cramer: How to detect phoney-baloney market moves
Friday: Stratasys shareholder meetingCramer thinks this 3D-printing company is among one of the most disappointing stocks of this era. 3D was once a craze, as there was so much excitement around it that the stocks kept driving higher. Then, it ended suddenly, and shareholders were left whimpering. This story reminded Cramer of what is happening with cult stocks such as GoPro and Mobileye.
"It's a cautionary tale that must not be overlooked because it's pretty much what this market has become for so many highfliers," Cramer added.
Ultimately, investors should brace themselves for a busy week. Despite the recent turmoil in the markets, earnings do matter. They always have, and they always will and next week is the playoffs for earnings.
Questions for Cramer? Call Cramer: 1-800-743-CNBC
Want to take a deep dive into Cramer's world? Hit him up! Mad Money Twitter - Jim Cramer Twitter - Facebook - Instagram - Vine
Questions, comments, suggestions for the "Mad Money" website? madcap@cnbc.com
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edfea4659669b8635dd1bd79c200641a | https://www.cnbc.com/2015/10/02/cramer-remix-the-theme-this-earnings-season.html | VIDEO1:1501:15Cramer: The theme this earnings seasonCramer Remix
Earnings season starts next week, and despite the fact that most investors seem to think that only the Fed matters, Jim Cramer knows that corporate sales and earnings are key.
"12 weeks a year — the three weeks each quarter that I regard as official earnings seasons — can matter. Consider them the playoffs and all the rest are just regular season games," the "Mad Money" host said.
With this in mind, Cramer shared his game plan of stocks and events that he will be watching next week:
Monday: ISM non-manufacturing report, The Container StoreISM non-manufacturing: Just as Friday's soft nonfarm payroll number mattered to Wall Street on Friday, Cramer will be watching for the ISM non-manufacturing number. In fact, he considers it to be the lone number that has remained strong. The U.S. is a service economy, so if it shows a slowdown, it could be completely nuts for the Fed to even consider tightening.
"You know my new view, though: the Fed has to fish or cut bait. Either raise rates this month or shut up about them until next year. Anything else is just torture," Cramer said. (Tweet this)
The Container Store: Cramer is watching this one because it's one of the biggest disappointments out there. Can it pull a rabbit out of a hat? Cramer's not a fan of the stock, but it has now gone so low that maybe at last there could be something positive to say.
Friday: Stratasys shareholder meetingCramer thinks this 3D-printing company is among one of the most disappointing stocks of this era. 3D was once a craze, as there was so much excitement around it that the stocks kept driving higher. Then, it ended suddenly, and shareholders were left whimpering. This story reminded Cramer of what is happening with GoPro and Mobileye.
"It's a cautionary tale that must not be overlooked because it's pretty much what this market has become for so many highfliers," Cramer added.
Ultimately, investors should brace themselves for a busy week. Despite the recent turmoil in the markets, earnings do matter. They always have, and they always will and next week is the playoffs for earnings.
Read More Cramer game plan: Get ready for earnings playoffs!
Cramer does not get up out of bed at 4 a.m. every day just so that he can dish out the hottest stock picks to the "Mad Money" audience. He does it because he is passionate about educating investors on the ultimate insider's perspective for the market and how to make money.
"What I'd really like to do is empower you, and that starts with me teaching you all the many tricks I use to pick out great stocks and trade them like a pro," Cramer said.
These are the same methods that have served him well for his four decades of investing, and allowed him to generate a 24 percent annual return at his hedge fund.
So what does the "Mad Money" host look for when picking a stock?
One of the easiest ways for Cramer to identify the stocks that should be on his radar is to look at the new-high list. These are stocks that hit a new high in trading for the day, especially on days when the market is in bad shape. If it is hitting a new high on a down day, then obviously it has something good going for it.
However, that doesn't mean Cramer recommends chasing after every stock on the new-high list. That would just be completely ridiculous. The list is merely meant to be used as a jumping off point for stocks to start looking at. Then, the time tested method of doing your homework comes in to play, to ensure that the fundamentals of the company are sound.
Read More Cramer: My top tricks to picking stock sizzlers
So, now that you know the basics of how Cramer picks a stock, what if you really, really, really want to buy a stock that is hitting a new high?
Cramer has one exception to his rule, which is that if you see insiders buying a stock when it is already up a lot that is a green light.
"It's a rare thing to see happen, but in my experience it is rarer still that this method of picking stocks doesn't work out," he added.
When insiders are getting in on a stock, it is a great sign that they have confidence that the stock is about to take off, or that it will be long lasting.
Keep in mind that most insider trading in small quantities is meaningless. Sometimes an insider will start buying stock because they want to give the impression of confidence. That is why when there is a colossal amount of buying, then Cramer wants you to take another look at the stock.
However, Cramer warned that these signals alone are not a good reason to buy a stock. At the end of the day, there is no avoiding doing the homework on a company. That means checking the fundamentals and making sure the company has a story that you can get behind.
Tetra Images | Getty Images
In Cramer's opinion, knowing proper strategy for trading will make you a better investor. That is why it is so important to know how to trade around a core position.
So, what does it mean to trade around a core position? Cramer outlined the steps below.
First, pick a stock that you both like and believe will go higher in the long term. Think of a company with solid fundamentals that can stay strong when the market becomes volatile and will go higher with a little patience.
Cramer recommended establishing a position in the stock through buying in increments. Buying it all at once is just plain arrogant, in his opinion. However, he does not want investors to feel discouraged that only professional traders can trade. Home-gamers can make money, too, if trading is done right.
If you wanted to start trading on your core position, then every time the stock jumps 5 percent, you should sell 25 shares. Keep shaving a little off the top to bring in some profits. This is called scaling out of a stock, though Cramer always likes to keep the last 25 shares if he loves the stock.
Then you wait until something happens to the stock that knocks it down to the same price when you bought it initially, as long as the news isn't specific to the stock. Then when the stock comes down, you start to buy it in increments again.
This might appear to be small potatoes, but over time the profits add up. Up 5 percent and sell 25 shares, then buy it from where you started; the cash in your pocket will start to accumulate.
Read More Cramer: Trading like a pro in a volatile market
"I want to talk about selling, which, along with when you buy, may be the most important and undervalued tool in your home arsenal," said the "Mad Money" host.
So, how do you know when to sell a hot stock?
Just like when you attend a party, you have to know when it is the right time to leave. When dealing with stocks, there is a lot of money to be made by owning a hot stock with a lot of momentum. The trick to making the most money is to know when it's time to get out.
A trick that Cramer uses is that once a hot stock has at least six analysts covering it, then the love may die down for the stock. That's because it is about to be too big and too well known, and the stock cools off when everyone who was interested in buying it has already done so.
"This formula has worked for me as long as I can remember. As far as I can tell, it works because the number of analysts on a stock is a good gauge of how much awareness and interest there is in a name," Cramer said.
Read More Cramer: Hot tamale! When to ring the register
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c42adc6cd1e24553d20ca8ba39e32f33 | https://www.cnbc.com/2015/10/02/defaults-most-on-student-loans.html | Who really defaults on student loans | Who really defaults on student loans
VIDEO0:5800:58America's next big crisis? Student debtSquawk Box
Stories about staggering loads of student debt are everywhere, from the business school alums with loans worth six figures to the college graduate who faces $800 monthly loan payments.
But dig deeper, and a very different picture of the student debt crisis emerges. Those most at risk of defaulting on their loans turn out to be those who borrow the least, according to a recent study for the Association of Community College Trustees.
The report focused on Iowa's community colleges, but its authors point out that it reflects in general "the complexities that students face when trying to repay their federal loans." In the Iowa institutions, more than 1 in 4 of students who entered repayment between Oct. 1, 2010, and Sept. 30, 2011 — officially, the fiscal 2011 cohort — defaulted on their loans by January 2015. Almost half of those borrowers borrowed less than $5,000, and most borrowed under $10,000, the researchers found.
"Although community college students typically borrow less than students at colleges and universities in other sectors, community college borrowers frequently struggle to repay their loan debts," wrote Noah Brown, president of the association, in a foreword to the study.
The high economic and social costs of student loan debt
What's going on? It's the demographics.
Overwhelmingly, the people borrowing the largest amounts are attending graduate school, often in preparation for lucrative careers in law, medicine or business. Some 86 percent of law school graduates in 2011-2012 had borrowed, and their average debt load was $104,400, according to the Department of Education, while 85 percent of graduates with medical degrees had borrowed an average of $126,500, and the 62 percent of MBAs who had borrowed took on an average of $43,200. These heavily indebted people may live on ramen noodles for a few years after graduation, but they are highly likely to be on track to soon earn more than enough to pay off their loans.
Just 17 percent of community college students borrowed in the 2011-12 school year, according to Department of Education data.
Community college students tend to be a rather different group. At an average age of 28, they are older than typical students at four-year colleges and universities, and about one-third are part of the first generation in their family to attend college. They are also more likely to attend part time: 59 percent do so, compared to 22 percent of students at public four-year colleges.
Older students are more likely to be working while attending college, and almost two-thirds of full-time community college students have jobs, as do 73 percent of part-time students. In addition, 17 percent are single parents. All of those attributes can make it much harder for community college students to complete a degree in a linear progression, leading to what Brown describes as community college students "swirling in and out of their institutions."
11 strategies to avoid student loan debt
Perhaps most important, community college students' finances are more fragile. About one-third receive Pell Grants, federal awards reserved for low-income students. The relatively small size of their loans also indicates how tight their budgets are. And when these students stop going to college before completing their degrees, as many do, they are contending with their loans on income from jobs that probably pay far less than those for graduates.
Indeed, a report published in April by the Federal Reserve Bank of New York concluded that "borrowers from lower- and middle-income areas as well as borrowers who originated loans in their 30s are also at greater risk of default and delinquency."
Brown believes community colleges can do more to help their indebted students.
"You have to do way more than a one-time counseling service," he said, noting that a large share of defaulting students do not take steps to ease their problem like obtaining a loan deferment or forbearance. "There are many, many options, but what we are saying is students don't know what they are, and institutions need to step up and do a better job with students while they are in these institutions."
Gen Y parents plan to save more for kids' college
Default rates for the fiscal 2012 community college cohort declined to 19.1 percent from 20.6 percent the year before — though that remained stubbornly higher than the national average of 11.8 percent.
Brown remains concerned. "We are lending capital to students, many of whom are vulnerable for a lot of reasons and may not be able to repay those loans on the basis of the value of the education they get," he said.
"If you default, your financial life is ruined. You have to deal in cash for the rest of your life. It used to be death and taxes were the only certainty," Brown said. "You can throw in student loans now."
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56462c7e84094f2a79cb11ac259b3471 | https://www.cnbc.com/2015/10/02/early-movers-dnkn-mdlz-mu-amd-jwn-tmus-s-qcom-more.html | Early movers: DNKN, MDLZ, MU, AMD, JWN, TMUS, S, QCOM & more | Early movers: DNKN, MDLZ, MU, AMD, JWN, TMUS, S, QCOM & more
VIDEO1:3201:32Wall Street looks ahead to Sept jobs reportstocks
Check out which companies are making headlines before the bell:
Dunkin' Brands—Following the stock's biggest one-day drop ever Thursday, CLSA upgraded the stock to "outperform" from "underperform". CLSA cites valuation after the big drop, and notes that the doughnut chain has plenty of cash as well as opportunities for growth.
Mondelez—The snacks maker is exploring a sale of several European businesses, according to Reuters. The cheese and grocery businesses in Europe could fetch around $3 billion in a sale.
Micron Technology—The chipmaker reported adjusted quarterly profit of 37 cents per share, 5 cents above estimates, with revenue also beating forecasts. Micron said it expects demand for its memory chips to stabilize in the near term and then improve next year.
Advanced Micro Devices—AMD plans to cut its workforce by 500 jobs, or about 5 percent, and take a restructuring charge of $42 million. The maker of semiconductors expects to save about $58 million next year as a result of the cuts.
Nordstrom—Nordstrom announced a special dividend of $4.85 per share, and the retailer also unveiled a new $1 billion share repurchase program.
T-Mobile US—About 15 million T-Mobile customers are victims of a data breach at credit reporting agency Experian. The breach occurred from September 2013 through last month, and affected customers who applied for T-Mobile device financing or postpaid services. Separately, D.A. Davidson began coverage of the wireless carrier with a "buy" rating, saying its role as industry disruptor continues to help it gain market share.
Barracuda Networks—Barracuda announced a $50 million stock buyback program. The data security company's new program will last through September of 2017.
Sprint—Sprint will cut as much as $2.5 billion in costs over the next six months, according to the Wall Street Journal. The paper quoted an internal memo, which said jobs would be cut and that an external hiring freeze would be put in place.
Novartis—The drug maker received FDA approval for a biosimilar copy of Amgen's best-swelling Enbrel rheumatoid arthritis drug.
Qualcomm—Qualcomm chips will be used in some of Samsung's upcoming Galaxy S7 phones, according to the Electronic Times.
Bank of America—The bank's Merrill Lynch unit must face a class action shareholder suit for the firm's role in the 2014 buyout of jewelry retailer Zale. The suit claims shareholders were short-changed in the deal, which saw Signet Jewelers buy Zale for $21 per share or $690 million.
FedEx—UPS is lobbying to hinder FedEx's proposed acquisition of European delivery service TNT Express, according to a Bloomberg report. European regulators are currently reviewing the deal, nearly three years after regulator concerns led UPS to abandon its own takeover deal for TNT.
Supervalu—Chief Executive Officer Sam Duncan announced plans to retire at the end of February. The supermarket operator's board has begun the process of searching for a successor.
Questions? Comments? Email us at marketinsider@cnbc.com
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049d0a52f3362b39bd8abe15b6c692fc | https://www.cnbc.com/2015/10/02/european-markets-us-jobs-report-nonfarm-payrolls.html | Europe closes higher despite US jobs weakness | Europe closes higher despite US jobs weakness
VIDEO1:1001:10Europe closes higher despite US jobs
European equities pared losses to trade higher on Friday, after official jobs numbers from the U.S. came in way below expectations.
The pan-European STOXX 600 pared losses to close up around 0.5 percent on the day, but 0.4 percent lower on the week.
London's FTSE 100 index also reversed losses, closing provisionally up 0.9 percent on the day and 0.3 percent on the week.
The French CAC ended provisionally up 0.7 percent on the day and the Germany's DAX was up 0.4 percent.
The big news for global equity markets on Friday was the disappointing non-farm payrolls data from the U.S. The country created 142,000 jobs in September, way below the 200,000-plus expected, bringing into question whether an interest rate hike by the U.S. Federal Reserve is still on the cards this year. The unemployment rate remained at 5.1 percent.
U.S. stocks traded sharply lower on Friday on the news, before halving losses and leading European stocks in their wake.
"The data were as weak and as fragile as it can be and it has thrashed all the expectations for the U.S. rate hike not, only for October, but the odds for December are also gone much lower," Naeem Aslam, chief market analyst at Ava Trade, said in a note.
Read MoreJob creation misses big in September
VIDEO7:3907:39What jobs report means to FedSquawk Box
It was another challenging day for scandal-hit carmaker Volkswagen, which closed down 3.7 percent on the day. Shares slipped after Credit Suisse slashed its price target for the stock and rated it "underperform." The bank said the emissions scandal could cost Volkswagen up to 78 billion euros ($87 billion).
Meanwhile, shares of Glencore, which tanked 29 percent on Monday over debt concerns, continued to recover on Friday, closing up 4.4 percent on the day. The mining giant has attempted to reassure investors with debt-cutting plans and reports have emerged that Singapore's sovereign wealth fund is interested in buying a stake in the Glencore's agricultural business.
Oil prices suffered after the U.S. jobs report was released, with Brent down at just over $47 a barrel, and U.S. crude trading at a little over $44 per barrel. However, most European energy companies closed in the green, with strong performers including SBM Offshore, which ended the day more than 3 percent higher.
Credit-checking firm Experian announced Thursday that one of its business units had been hacked, potentially exposing the personal information of about 15 million users in the U.S., including some T-Mobile users. London-listed Experian shares closed down around 3.8 percent, while T-Mobile shares traded down 2.1 percent.
VIDEO1:0301:03Week ahead 5th Oct
Investors await the results of Sunday's national election in Portugal, to see whether the incumbent government that implemented widespread austerity measures as part of Portugal's financial bailout is reelected.
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f5fc746c671a90dd0542ce137563fcd8 | https://www.cnbc.com/2015/10/02/fed-funds-futures-now-pricing-first-rate-in-march-2016-after-weak-jobs-data.html | Fed funds futures now pricing first rate hike in March 2016 after weak jobs data | Fed funds futures now pricing first rate hike in March 2016 after weak jobs data
Fed funds futures plunged after the weak September jobs report, with the market now pricing the first better-than-average chance of a rate hike in March 2016.
According to the CME Group's FedWatch tool, markets are now pricing a 2 percent chance of a rate hike this month, versus 14 percent previously; a 29 percent chance in December versus 44 percent beforehand; 39 percent in January versus a prior 52 percent; and 51 percent next March.
The U.S. economy created 142,000 jobs in September, a number that badly missed expectations.
Read MoreWhat's the real unemployment rate?
While the FedWatch tool pointed to a March rate hike, RBS said swaps data suggested the market was pricing the first rate hike into June of next year.
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36d3a52740f2286383d0efbc130da958 | https://www.cnbc.com/2015/10/02/feds-fischer-no-acute-risks-to-stability.html | Fed's Fischer: No 'acute risks' to stability | Fed's Fischer: No 'acute risks' to stability
Federal Reserve Vice Chairman Stanley Fischer on Friday said that no "acute risks" threaten short-term financial stability.
But in prepared remarks, he made no direct reference to the U.S. central bank's current monetary policy plans or the state of the economy. Investors watched Fischer's comments for indicators of when the Fed may move off of near-zero interest rates after a disappointing U.S. jobs number earlier in the day.
Read MoreFutures vote: No rate hike til March at least
The U.S. economy created 142,000 jobs in September, while the unemployment rate was unchanged at 5.1 percent, according to the Labor Department. The number came in well below economists' expectations, which could affect the Fed's decision to possibly start raising interest rates soon.
Stanley FischerBrendan McDermid | Reuters
While Fischer did not directly address current policy, he noted that it can be used to combat financial turmoil.
"I also struggle in trying to find consistency between the certainty that many have that higher interest rates would have prevented the global financial crisis and the view that the interest rate should not be used to deal with potential financial instabilities," he said.
Read MoreJobs report signals Fed on hold until 2016
Fischer noted that U.S. financial regulators lack some tools needed to address problems, while criticizing the number of regulators in the country. He expressed concerns that money has left regulated industries to so-called "shadow" banks.
Fischer's remarks followed comments from the St. Louis Fed's James Bullard earlier in the day. He said that arguments that the U.S. or global economy have changed are not adequate to keep the Fed from raising interest rates.
Bullard stressed that officials should focus on cumulative job market progress and not month-to-month developments.
Read More
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02b7101bd79f7d3ea1ec183e44b369ae | https://www.cnbc.com/2015/10/02/glencore-to-sell-metals-byproducts-unit-cut-debt-by-10b.html | Glencore scrambles on asset sales, debt concerns | Glencore scrambles on asset sales, debt concerns
VIDEO0:2800:28Glencore seeking buyersFutures & Commodities
Its stock still wobbly after hitting an all-time low on Monday, commodity giant Glencore fought this week to reassure investors, employees and counterparties, with mixed results.
Conscious of a self-imposed goal to reduce its net debt to $24 billion from the $30 billion it reported in late June, Glencore officials are scrambling to complete the sale of their metal-byproducts business at two mines in Peru, said people familiar with the transaction, with an eye toward announcing a $1 billion-plus deal in October.
At a director's meeting scheduled for October 9, Glencore executives also plan to discuss their upcoming production report and whether to reveal more details to investors than usual, these people added.
Read MoreGlencore shares financing deals with investors
Also high on the company's to-do list is a partial sale of its agricultural business, a deal Glencore's management hopes will bring in multiple billions of dollars, said a person familiar with the matter. That transaction, which would ideally involve one or more sovereign wealth funds buying between 20 and 30 percent of the grains unit, is in the works but unlikely to close until early next year, this person added.
Taken together, the metal-byproducts business, known as streaming, plus the partial sale of the agricultural unit and other recent measures will amount to a debt reduction over time of at least $10 billion.
A Glencore spokesman declined to comment on status of the various moves.
Wall Street presents the case for buying Glencore
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Bad quarter for stocks; dire one for commodities
It has been a brutal week for the large trading and mining concern, which dominates copper, coal and other base metals trading, as well as having a substantial presence in energy and grains markets.
On Monday, after a negative research note and rumors of both short-term financing hiccups and margin calls on Glencore executive stock holdings that had allegedly forced internal investors to sell shares - rumors company insiders have vociferously denied - Glencore shares hit an all-time low of 67 pence on the London Stock Exchange.
Some analysts rallied to Glencore's defense the next day, helping the stock recover somewhat. Analysts at Citigroup, one of Glencore's chief advisers and lenders, pointed to a balance sheet that was stronger than the market perceived; others argued of a possible bottoming in thermal coal prices. At the same time, Glencore issued a statement that it had no financing issues and that its access to credit was unchanged.
Later on Tuesday, chief executive Ivan Glasenberg acknowledged the turmoil in a note to his employees in Baar, Switzerland, and beyond.
VIDEO5:3405:34Defending GlencorePower Lunch
"You will be aware of the recent share price weakness and the associated negative press headlines," he wrote. However, he noted, a recent new-equity issuance to which management had contributed some $550 million was "a strong vote of confidence in the fundamentals of our business," adding that "our core business remains operationally and financially robust."
Glasenberg also noted that under Glencore's current credit structure, the company would not need to tap the banking system for new financing until 2017.
In a meeting with credit analysts held Wednesday in London, other Glencore officials reiterated those points. They also noted that the firm had access to $50 billion in short-term financing that backed its so-called trading business, in which materials like oil and coal are shipped from one location to another, through letters of credit.
That fact, as well as additional details on Glencore's relatively low cost of capital in its revolving bank-credit facility, reassured some attendees, according to a person who was at the meeting.
As Glencore shares, which fell again on Thursday, continue to fight for stability, hedge fund short-sellers have been widely blamed for pushing the stock down. Glasenberg himself criticized shorts for pressuring both copper commodity prices and Glencore shares in August, and traders quoted by London media outlets blamed shorts again this week for the recent tumbles.
Two hedge funds, London-based Lansdowne Partners and San Francisco's Passport Capital, have publicly acknowledged large short positions in Glencore, and analysts and traders say that using the company as a proxy to express a bearish view on mining and commodities more generally had become a popular move of late.
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71386898ce6696f396ba7c374e7e37fc | https://www.cnbc.com/2015/10/02/halftime-desk-what-to-watch-next-week.html | VIDEO2:0202:02Top trades for the 2nd half: CRM & moreHalftime Report
The "Halftime Report" experts weigh in on what's most important for next week.
Steve Weiss is watching the levels and the Fed funds futures.
Jim Lebenthal is keeping an eye on all of the big earnings reports.
Michael Block is awaiting the Fed Minutes due out on Thursday.
Trader disclosure: On the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Halftime Report" were owned by the "Halftime Report" traders:
JON NAJARIAN: Long BABA, FTR, NBL, PFE, PG, PPG, RAI, SCP, TEVA, WBA, XOM, ZSPH, ZTS he is long calls AAL, ABX, ADXS, BAX, BBY, BMY, F, FEYE, FL, GE, HLT, HZNP, ISIL, QCOM, MAR, MCK, MDLZ, MU, NBL, NKE, PBR, PMCS, RAI, PFE, PPG, SWFT, TAP, YHOO he is long puts SCHW
MICHAEL BLOCK: No conflict
STEVE WEISS: Long AAL, C, CVC, GNRC, JD, LULU, NCR, THC he is short X
JIM LEBENTHAL: Long AAPL, BA, C, CSCO, DCO, EEQ, GAIA, GM, IBM, INTC, JCP, MPC, OA, ORBC, PFE, QCOM, SJT, SPLS, TGT, TIF, TRN, WGO.
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efa2f00e93f4bf7e047b247ba1152d6a | https://www.cnbc.com/2015/10/02/has-america-finally-hit-peak-pumpkin.html | Has America FINALLY hit 'peak pumpkin'? | Has America FINALLY hit 'peak pumpkin'?
More than a decade after Starbucks helped make "pumpkin spice latte" a household name, there is some evidence that "peak pumpkin" may finally be coming to restaurants.
The country's 500 biggest restaurants launched just 45 pumpkin flavored limited-time offerings, such as Dairy Queen's Pumpkin Pie Blizzard Cake or Krispy Kreme's Pumpkin Spice Doughnut, from January to September. That's down 61 percent from 116 a year ago, according to data from Technomic.
Raymond Truelove | E+ | Getty Images
"Although many consumers are still interested in pumpkin spice, recent years have shown heavy saturation with beverages and although the flavor is likely here to stay, the growth of the trend is starting to flatten showing we have reached maturity," wrote Darren Tristano, executive vice president at Technomic, in an email.
Overall promotions are shrinking as well, falling 11 percent as operators adopt a "less is more" attitude borrowed from fast-casual restaurant hits like Shake Shack and Chipotle.
"Brands are starting to discover the fact that consumers are experiencing new menu burnout," Tristano wrote. "This year marked the first year in a decade that top chain restaurant menus declined in total menu offering."
At the retail level, growth is also showing signs of slowing.
Read MoreA pumpkin spice...burger?!
For the year ending July 26, sales of pumpkin-flavored items rose 11.6 percent, the slowest growth in at least three years, according to Nielsen data. Declines in pumpkin-flavored coffee, milk and frozen waffles, pancakes and French toast were especially steep. Still, pumpkin-flavored item sales remain a large market, clocking in at $360 million at retail outlets, including grocery and convenience stores.
So if pumpkin has reached saturation, which seasonal item will start to take share? This is difficult to predict, Tristano says, adding it's possible other seasonal flavors like gingerbread, molasses, peppermint or eggnog could increase.
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9575836a562f5fed1d2bc077735e2862 | https://www.cnbc.com/2015/10/02/hot-water-dishwashers-recalled-over-fire-hazard-reports.html | Dishwashers recalled over fire hazard reports | Dishwashers recalled over fire hazard reports
A Bosch dishwasher and serial numberSource: CPSC
The Consumer Products Safety Commission has recalled 149,000 dishwashers over concerns about a fire hazard.
The dishwasher were sold under the labels Bosch, Gaggenau, Kenmore Elite and Thermador between January 2008 and December 2013, the agency said.
In addition to the 149,000 sold in the U.S., about 45,000 were sold in Canada, the agency said.
Half a million pounds of chicken recalled by Sanderson Farms
The agency said the power cord can overheat. Ten reports of fires have been linked to the dishwashers, the CPSC said. No injuries were reported, but five of the fires caused property damage, it said.
Owners were urged to stop using the appliances immediately and to call a hotline to arrange a free inspection and repair. The phone number is 888-965-5813.
The commission declined to comment to CNBC beyond its press release.
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2c76bb211077c9f615148cd9cf2fa481 | https://www.cnbc.com/2015/10/02/how-to-get-microsoft-to-mentor-your-big-idea.html | How to get Microsoft to mentor your big idea | How to get Microsoft to mentor your big idea
Fred Dufour | AFP | Getty Images
Getting a leading tech company to help you jump-start your big idea isn't as far-fetched as it sounds.
Microsoft is one of many companies that have created a global accelerator program to invest and mentor seed-stage companies in the U.S. and all over the world. The company's activities span all corners of the globe, including Bangalore, Beijing, Paris, London, Seattle and Tel-Aviv.
The idea is to get back to its entrepreneurial roots and help support start-ups in a host of areas — from cloud computing to mobile gaming.
Here's a look at how some entrepreneurs have managed to get a foot in the door and get adopted in Microsoft's Ventures Accelerator program. The coveted benefits: help to fast-forward product development, garner financing and catalyze growth.
Read More Meet the 2015 CNBC Disruptor 50 companies
Huan Ho's experience in the corporate world led him to found his own start-up in August 2013. Called Rallyteam, it is a matchmaking platform for managers looking to assign internal company projects to employees with skills and interests relevant to the work. Too often, Ho said, managers outsource office work instead of recruiting their own people. But to know if what he designed was a good fit for large companies, Ho needed a large company to pilot his platform — something that unexpectedly happened last March when the San Francisco-based Rallyteam headed north to Seattle to begin its four-month stint at the Microsoft Ventures Accelerator.
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"Within three weeks we got a pilot going in a team within Microsoft," Ho said. "For them to get a pilot going within three weeks was amazing."
Microsoft provided feedback on the Rallyteam platform during the pilot program, helping Ho refine the start-up's product, which in turn helped Rallyteam raise a round of Series A funding — an amount the start-up is keeping private for now — midway through their time at Microsoft's accelerator.
"Being part of the accelerator and piloting with Microsoft definitely helped with our fundraising efforts," he said.
In other cities where Microsoft has set up accelerator programs, early stage start-ups are having similar sorts of opportunities. Microsoft set up its first accelerator program in Tel Aviv in April 2012 and has since taken its accelerators to Beijing, Bangalore, London, Paris and Seattle, which accepted its first accelerator class in 2014. (Rallyteam was a member of Microsoft's second Seattle class.)
This is Microsoft's way of reclaiming its entrepreneurial roots while connecting promising seed-stage start-ups with mentors, developer resources, potential customers and a business curriculum analogous to what an MBA student might receive.
To date, Microsoft has mentored 410 seed-stage companies in its accelerator programs worldwide; 54 of those companies went through Microsoft's U.S. accelerator in Seattle.
"It's helping create the next era of great start-ups that will turn into great companies … with no strings attached," said Hanan Lavy, director of the Microsoft Ventures Accelerator in Seattle. "We're here to help start-ups on a long-term basis."
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Aside from relocating, start-ups don't exchange much in return. Microsoft takes no equity in start-ups that participate in its accelerators, and generally provides a stipend to help start-ups cover living expenses. Out-of-town start-ups that participate in Microsoft's Seattle accelerator, for instance, receive a one-time check of $25,000.
So what does Microsoft get out of it? Access to top early stage technology that it can potentially license or acquire in the future.
Three and a half years into running these accelerators, the success of the programs' 410 graduates has validated Microsoft's move. According to Lavy, 79 percent of start-ups raise an average of $3.7 million in follow-on funding the first year after graduating.
Weekly seminars on go-to-market strategies, funding and financing, product development, customer interactions and more prepare start-ups for what they do once they leave. Ho, who dropped out of the University of Houston's MBA program to pursue Rallyteam, said what he learned during his time in Seattle mirrors a semester in graduate school.
"They give you a plan for the next four months … [and] every week I knew exactly what we were going to learn," he added.
About 10 to 15 start-ups participate in each four-month class — in China the accelerator lasts six months — and Microsoft will look at start-ups that have raised up to $1.5 million, although start-ups don't need to have raised any venture capital to be eligible, Lavy said. Other parameters, like what the product is, who a start-ups' customers are and how long a founding team has worked together are also weighed.
Occasionally, accelerator classes follow themes: For its next Seattle class starting in February, Microsoft is looking for start-ups doing machine learning and other predictive analytics. Lavy said the accelerators are "open to anyone in any domain," but a Microsoft accelerator is probably more beneficial to software start-ups than hardware start-ups.
VIDEO2:2702:27Startup incubators in Silicon PrairieSquawk Box
Prior to joining Microsoft's Seattle accelerator last March, Dorin Rosenshine was skeptical about how much an accelerator could help her New York-based start-up, Outleads, which creates software that enables businesses to expand the reach of their tailored, online advertising by incorporating customers' offline activity — for example, integrating data from a phone call a car buyer makes to a car dealership into the dealership's existing customer relationship management platform.
At the time, the Outleads product was the "bare minimum version," she said. But Rosenshine applied and was accepted, and then it was Microsoft that helped her find her first beta users. Not only was Bing Ads a beta user of Outleads but Microsoft also connected Rosenshine to Outleads' largest customer to date.
"There was a huge effort to bring in all of their partners to have us network with them one on one," she said. "That was something that we needed, because we had the product and had no idea who would use this. The challenge also was, we needed a large organization to deploy this — there needed to be the volume of phone calls, the volume of leads coming in — and Microsoft helped with that."
The ultimate benefit for Microsoft, though, is being close to interesting new technologies from small companies that might become advantageous business partners in the future.
"Being part of these ecosystems all around the world is something we wanted to be in," said Lavy. "These start-ups will turn into tomorrow's partners that we want to work with."
—By Andrew, Zaleski, special to CNBC.com
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88a7eebddcbcbd510a4a8409b6ff19ef | https://www.cnbc.com/2015/10/02/howard-marks-we-dont-have-free-market-in-money.html | Howard Marks: We don't have free market in money | Howard Marks: We don't have free market in money
VIDEO2:0402:04Howard Marks: We don't have free market in money Closing Bell
With its ultra-low interest rate policy and massive bond buying, the Federal Reserve has diminished the role of the free market in determining asset prices, according to one investor.
"I believe that the free market is the best allocator of resources, and we don't have a free market in money and I'd like to have one," Howard Marks, the chairman of Oaktree Capital said in an interview with CNBC's "Closing Bell" this week. He added that the Fed needs to get out of the business of regulating money and stop and penalizing savers and lenders with near-interest rates.
Fed's Evans: Later rate hike better for economy
The U.S. central bank delayed a rate hike at its September meeting in the face of uncertainty about the global economy, a market sell-off in the U.S. and concern that inflation might fall further away from the Fed's 2 percent target.
With the global economy on the backfoot and U.S. job creation slowing — on Friday, Labor Department data showed that the economy generated about 142,000 jobs, far below consensus estimates — the case is growing for the central bank to preserve the status quo on monetary policy. Marks, however, disagreed.
There will always be reasons not to hike, but "what about the reasons to do it?" Marks asked.
"I don't know if you're ever going to find a perfect time to do it, I think it's desirable and it seems that there is always some reason not to do it," he added.
Marks' argument echoed those of Fed critics like analyst James Grant, who told CNBC in an interview this year that the central bank's "radical monetary policy" was like a "virus," and that interest rate normalization "will not be wholesome."
Howard Marks, co-chairman and co-founder of Oaktree Capital ManagementVictor J. Blue | Bloomberg | Getty Images
Last month, the International Monetary Fund urged the Fed to wait until at least next year to hike rates. At least for now, the central bank is proceeding full steam ahead: more than a week ago, Fed chair Janet Yellen cautioned that a tightening of policy was in the offing before year's end.
Still, a debate is raging over whether the worsening global economy will force the Fed to stay its hand. Marks told CNBC a rate hike was "a good idea in principal ... [but] I'm not talking about the specific timing" — that's the Fed's job.
Fed's Evans: Later rate hike better for economy
Some investors say the Fed's decision to hold off on rising has increased market uncertainty, but Marks said "investors have to know that it's their job to bear uncertainty."
His advice for investors: Have a balance of offensive and defensive assents in your portfolio and favor caution.
Similarly, Karissa McDonough, a fixed-income strategist at People's United Bank, is telling her clients to reposition their fixed-income portfolios and to scale back on risk. With its involvement in the markets, the Fed has, effectively, set a floor on valuations, but that put will soon go away, and investors — especially those investing in fixed-income assets — should prepare for that to happen soon, according to McDonough.
When the Fed does decide to lift off, "we're going to go back to historical volatility level and returns are going to be compressed," McDonough said.
"In this environment, the Fed is affording us an opportunity with this delayed hike cycle to reposition portfolios and to exit or reduce exposure to riskier asset classes," McDonough said.
"This is certainly not the time to bottom fish; this is a time to upgrade the quality, even within the risky high-yield space."
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e2e15a23ffe28c70c2357a4bc4ab0a74 | https://www.cnbc.com/2015/10/02/hurricane-joaquin-and-rex-block-to-bring-life-threatening-floods.html | Hurricane Joaquin and Rex Block to Bring Life-Threatening Floods | Hurricane Joaquin and Rex Block to Bring Life-Threatening Floods
VIDEO0:4100:41Hurricane Joaquin hits the BahamasHurricanes
VIDEO2:3002:30Where is Hurricane Joaquin?Squawk Box
VIDEO1:4601:46Hurricane Joaquin approaches mid-Atlantic
As Hurricane Joaquin battered the Bahamas early Friday, the East Coast was bracing for a potential double-whammy linked to a separate storm that could bring life-threatening floods.
The National Weather Service said the "extremely dangerous" Category 4 Hurricane Joaquin was "pounding" the central Bahamas overnight, with maximum sustained winds of around 140 miles per hour. Storm-surge floods and torrential rain also were hitting the islands.
Forecasters said the hurricane could intensify further as it drifts west and is expected to turn north at some point later on Friday.
Category 4 Hurricane Joaquin is seen over the Bahamas in the Atlantic Ocean in this NOAA GOES East satellite image taken at 08:45 ET.NOAA | Reuters
While the odds of Joaquin making landfall on the U.S. mainland are "dwindling,"according to The Weather Channel, that doesn't mean the East Coast won't feel some of the storm's wrath. Dangerous coastal and inland flooding could still hit several states, forecasters warned.
Regardless of how Joaquin advances, several East Coast states will face "potentially unprecedented rainfall and life-threatening flooding," according to The Weather Channel.
The Weather Channel tweet
The historic floods would be thanks to a weather pattern known as a "Rex Block," where a high-pressure front is above a low-pressure front, that will bring downpours for days.
These stocks are rallying amid Hurricane Joaquin worries
A swath of the Eastern Seaboard — from Washington, D.C., to Charleston, South Carolina — will be deluged, and the area's already-saturated grounds raise the risk of floods through the weekend. Charleston could get more than 10 inches of rain by Sunday, according to the National Weather Service.
The Weather Channel tweet 2
The heaviest downpours are expected to hit the Carolinas — with some areas forecast to get between 1 and 2 feet of rain, according to The Weather Channel.
Flash flood watches have been issued by the National Weather Service from Maryland southward into most of Virginia, the Carolinas, northeastern Georgia and eastern Tennessee.
The governors of Virginia and North Carolina have declared states of emergency.
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ca3dd2cdf61d4de37e771f1f79df6dff | https://www.cnbc.com/2015/10/02/india-rejects-pakistan-peace-plan-calls-for-revival-of-terrorism-talks.html | India rejects Pakistan peace plan; calls for revival of terrorism talks | India rejects Pakistan peace plan; calls for revival of terrorism talks
Wu Hong | Pool | Getty Images
India on Thursday rejected a four-point peace plan for Kashmir proposed by Pakistan but said talks among officials of both countries on terrorism that collapsed in August should be revived.
Pakistani Prime Minister Nawaz Sharif announced his proposal at the annual United Nations General Assembly on Wednesday, saying the two nuclear-armed countries should formalize a cease-fire in Kashmir and take steps to demilitarize the divided region.
India issued a swift rebuttal, accusing Pakistan of claiming to be the primary victim of terrorism while "in truth, it is actually a victim of its own policy of breeding and sponsoring terrorists."
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On Thursday, Indian Foreign Minister Sushma Swaraj told the General Assembly that India remained open to dialogue, "but talks and terror cannot go together."
"We don't need four points, we need just one: Give up terrorism and let us sit down and talk," she said.
Swaraj said the talks between national security advisers on all issues related to terrorism should be held, as well as an early meeting of senior military officials to address the situation on the border.
"If the response is serious and credible, India is prepared to address all outstanding issues through a bilateral dialogue," she said.
Planned talks between national security advisers from India and Pakistan were cancelled in August hours before they were due to start, dashing hopes the two might tackle the violence that many fear could one day spark a nuclear showdown.
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In the talks, India had wanted only to discuss terrorism-related issues. Pakistan sought a wider agenda, including the status of Kashmir.
India and Pakistan have fought three wars since becoming independent countries in 1947, two of them over the Himalayan region of Kashmir, which both claim in full but rule in part.
Sharif, elected in 2013, promised to improve relations with India. But since then domestic troubles have forced him to cede more control over foreign and security policy to Pakistan's more hawkish military.
Indian Prime Minister Narendra Modi has taken a hard line with Pakistan, insisting he is unwilling to discuss other issues unless Pakistan admits its role in terror attacks in India.
India's Ministry of External Affairs made it clear that Sharif's proposal was a non-starter. "To de-militarize Kashmir is not the answer," ministry spokesman Vikas Swarup said in a tweet. "To de-terrorize Pakistan is."
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b4dc59fe76e6f715412fb878323b661b | https://www.cnbc.com/2015/10/02/indonesias-haunted-offices-create-niche-industry-in-exorcisms.html | Indonesia’s ‘haunted’ offices create niche industry in exorcisms | Indonesia’s ‘haunted’ offices create niche industry in exorcisms
Getty Images
In a towering modern office building in central Jakarta, some of the employees are ready to call in a shaman. They say they have seen disturbing shadows and heard the sound of a woman sobbing in the deserted staff toilets.
"It has had an effect on the people, who are really scared," says one, who blames spirits and feels it is time to act. "If people are not happy working there because of the boss or the other people that's normal, but if it's because of something else . . . it's a simple step [to call an exorcist]."
Businesses around the world spend time and money making sure employees are happy in the workplace. For many, that means open areas with beanbags, free snacks or organising their dry cleaning. In Indonesia, it also means keeping the jinns at bay.
The world's largest Muslim-majority country, Indonesia is a nation where traditional belief systems, including animism and shamanism, have been fused with mainstream religions. Attempts by parliament to outlaw black magic have met with opposition from some who see the supernatural as a crucial part of Indonesian culture.
These beliefs also permeate the workplace. From cosmopolitan Jakarta to pious rural communities, most Indonesians have a story of a haunted office or a co-worker plagued by spirits that are affecting morale and productivity.
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An industry has developed around the men who profess to ward off evil in workplaces, from small, locally owned businesses to household-name multinational corporations with many expatriate workers. Numerous office managers in Jakarta have a shaman in their phone book. And Abu Aqila, who has been charging for exorcisms at factories and offices for some 15 years, says his business is growing every day.
The 44-year-old has trained more than 100 people in his trade. They operate in and around Jakarta, billing businesses between Rp7m ($480) and Rp15m a visit. A small team of four or five turn up at office buildings in a smart uniform of black trousers and blue shirt emblazoned with Mr Aqila's company's name: "Bengkel Rohani", or "spiritual workshop".
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The process can last up to five hours. Mr Aqila starts by helping to pacify workers, before looking for supposed signs that evil spirits are haunting the building. These include cracked walls and broken lamps, as well as suspiciously strong odours. He then explains the cause of the "apparitions" to the workforce, before reciting verses from the Koran to drive away the spirits.
"Jinns like stuffy places — the engine room, dirty places, dark humid places that are empty," he says, speaking in his spanking new mansion, kitted out with slate flooring and a flatscreen television. "Or crowded places where there is a high stress level, where people are working under pressure."
Business is booming for the likes of Mr Aqila, who is called to at least one workplace every week.
With office workers approaching shamans of all faiths, the industry is also an unexpected reflection of religious tolerance in Indonesia, where some 87 per cent of the 250m population is Muslim but small Hindu and Christian communities coexist largely without conflict.
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One employee at a factory in Jakarta says her Christian boss invites a Balinese woman to perform Hindu rituals if there are signs of paranormal activity: "My boss has tried an ustad [Islamic shaman] before but in the end he is more comfortable using Hindu rituals."
Although dealing with evil spirits may be routine for executives in Indonesia, there are signs that younger, urban workers are rejecting belief in the supernatural. "The younger generation of people is busy with technology — the way they think is different," says one 51-year-old worker who has seen apparitions in his office. "In the big cities like Jakarta, Surabaya, Medan, I think, in 50 years this will all be finished."
But for now, business continues to grow as ever more offices pop up around Jakarta, providing custom for the shamans.
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6b0d65adc849ddd57a24ad1fa6cc27cf | https://www.cnbc.com/2015/10/02/investec-warns-on-glencore-financing.html | Don't rule out more Glen-gore: Investec | Don't rule out more Glen-gore: Investec
VIDEO4:0904:09Amid stock's wild ride, what does Glencore need to do?Capital Connection
The investment firm that triggered a massive share price crash for Glencore this week with a gloomy report believes it's too early to relax over the commodity giant's financing.
On Wednesday, Glencore reassured investors that it had $50 billion in short-term credit lines from over 70 lenders to back its trading business. But Jeremy Wrathall, head global natural resources at Investec, warned the Anglo-Swiss firm's good relationship with banks can't be relied on to obtain financing.
"In other situations, we've seen banks lose confidence very quickly. That's the key issue facing companies like Glencore, where suddenly bank confidence evaporates overnight. That hasn't happened yet, but if commodity prices continue to fall, we'll see what happens," he told CNBC on Friday.
A note released by Investec analysts on Monday questioned whether there was any equity value left in Glencore as a result of its high debt load. The widely-circulated report saw Glencore's London-listed shares crash 29 percent on Monday, followed by another 27 percent slide in Hong Kong Tuesday.
"Our report hit a raw nerve with a lot of people since it highlighted how heavily indebted some of these mining companies are," Wrathall said.
Read MoreShould you fear a 'Glencore' moment?
He notes that many companies borrowed heavily when cash was plentiful in the years that followed the global financial crisis. Now that borrowing costs are on their way up, these companies are feeling the strains.
Gianluca Colla | Bloomberg | Getty Images
"That is having a profound impact on companies with very large debt positions. Glencore seems to be the one that everyone is focused on; there are others out there as well. If you look at other resource companies, their credit default swaps (CDS) are telling you there's a big problem."
It now costs $829,490 a year to protect $10 million of Glencore's debt for five years, up from $210,520 earlier this year, according to Reuters data. The corresponding cost for BHP Billiton is $129,350.
Analysts have rushed to Glencore's defense this week, citing factors such as the firm's ability to sell assets, but Wrathall warned that even those sales would be "extremely painful."
"It's all too fine to say that we'll pay down debt by selling assets but with asset sales goes loss of earnings. Analysts are battling as to what out what effect that will have on Glencore and other companies going forward."
As to speculation whether mining rivals such as Rio Tinto may sweep in to buy Glencore's businesses, Investec was skeptical. A year ago, Glencore attempted to merge with Rio for $150 billion in what would have created the world's biggest integrated commodities company.
"Rio has always prided itself on having low cost operations, Glencore's operations tend to be higher cost so it would be unusual for Rio to acquire Glencore's businesses in my view, but nothing is out of the question now. We are seeing a cathartic change in the mining industry."
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9b79c245df5d75fd751d1000f75dfcc6 | https://www.cnbc.com/2015/10/02/is-there-an-earnings-recession-looming-why-one-measure-says-yes.html | VIDEO1:5101:51Into the futures: Earnings approachFutures Now
It's been a tough start to earnings season, with Yum Brands and Adobe Systems falling sharply after reporting their disappointing numbers. And that appears to be increasing the concern of a so-called "earnings recession."
Analysts in aggregate expect earnings to fall more than 5 percent compared to third quarter of last year, according to FactSet. Following the year-over-year earnings decline in the second quarter, this would actually mark the first two consecutive quarters of falling profit since 2009, FactSet reports.
Analyst earnings expectations tend to be overly bearish, and the average company beats estimates.
But if earnings do register the second straight year-over-year drop, it would represent a so-called "earning recession"—a parallel to a regular recession, which is marked by two straight quarters of negative GDP growth.
Read More 'Extraordinary' market volatility hitting Yum China
Before investors head for the bunker, they should note well the deleterious effect of the energy sector on overall numbers. Energy earnings are expected to plummet 65 percent versus the third quarter of last year, due to the sharp decline in oil prices.
According to RBC Capital Markets, expectations that exclude the energy sector are for earnings growth of 2.8 percent.
"Ex-energy trends appear more robust," RBC's equity strategy team writes, perhaps understating the market's growing worries.
Yet the expected weakness extends well beyond energy. Actually, six of the ten sectors are expected to log earnings shrinkage, per FactSet.
Just two sectors, telecom and consumer discretionary, with expected growth of 18 percent and 10 percent respectively, are expected to report earnings worth writing home about.
Revenue, too, is expected to sink in the quarter. And with U.S. growth in focus, that could actually be the larger concern if it transpires.
Earnings season kicks into high gear next week, when giants including Johnson & Johnson, Intel, JPMorgan Chase, Netflix and GE are set to report.
—By CNBC's Alex Rosenberg.
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7660cc1da45baca6d0fb074a2262d299 | https://www.cnbc.com/2015/10/02/jobs-being-created-through-the-winds-of-change.html | Jobs being created through the winds of change | Jobs being created through the winds of change
Sweetwater, Texas, 225 due west of Dallas, made its mark in the late 1800s as a railroad hub. Today, it's known for the power of wind that blows in off the prairies.
Sweetwater is the county seat of Nolan County, home to 1,371 turbines, according to Sweetwater's Chamber of Commerce. It is also home to Texas State Technical College (TSTC), which has offered an associate's degree in wind energy and applied engineering since 2006.
"If my students get through the program and graduate with no background issues, I can pretty much guarantee they will get a job," said Heath Ince, chairman of the college's wind energy technology program and applied engineering department.
The Bureau of Labor Statistics expects the number of jobs for wind-techs, as they are known, to increase by 24 percent from 2012 to 2022, well above the average growth rate for all jobs of over 11 percent. Still, it's starting from a small base. In 2012, there were 3,200 wind tech jobs; by 2022, it is expected to jump to around 4,000.
Ron Widup, Shermco Industries CEOSource: Guy Morton
"We have the jobs, but we can't find the people," said Ron Widup, CEO of Irving, Texas-based Shermco Industries, which provides maintenance and repair services to the wind industry, among others. "There's a tremendous demand for that classification of technician and engineer."
Behind this growing demand for wind technicians and engineers is the growing demand for wind power. From 2008 to 2012, the amount of electricity generated by wind increased by 154 percent. Wind is now the fifth largest source of electricity in the U.S. While wind only accounts for 4.4 percent of the total, it could generate 10 percent of all electricity in the U.S. by 2020, according to the Department of Energy.
"I think it's got a big future" said Harold Perrigo, a 33-year-old student in TSTC's wind program, when asked why he wants to be a wind technician. "It's a young industry and it is something that's going to grow exponentially over the next 10-15 years."
The history of wind power has not been without its doubters, or its stops and starts. In the past, its development and growth have relied heavily on federal and state tax incentives. As the incentives expired and were renewed, the industry's growth waxed and waned.
Still, the American Wind Energy Association said the cost of generating electricity from wind has been cut in half in the last five years, and the investment bank Lazard points out that producing electricity from wind is almost as cheap as traditional sources like coal and gas, even without the subsidies.
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Shermco, which counts wind power as 20 percent to 25 percent of its business, has had to work closely with colleges like TSTC to assure it has the workers to repair wind turbines and service the industry's substations. Widup said his company is always looking to hire a couple of technicians a year, at competitive salaries.
"You are coming in as an entry-level job probably $40,000 to $45,000 a year and with overtime very quickly can get to $60,000 to $80,000," he said. "Then in a few years it's not uncommon to get to six figures pretty quickly in this field."
Students in Wind Energy program at Texas State Technical College in Sweetwater, TX.Source: Guy Morton
Thirty-four-year-old Jeremy Brackenridge joined Shermco a few months ago. A veteran of the oil and gas industry, he is going through in-house training to become a wind technician. It is a job that pays him more than he was earning fixing gas turbines.
"I'm making about 10 percent more than I was," he said.
Brackenridge also expects to make a career at Shermco. He bounced around after high school working odd jobs, and in manufacturing and oil and gas before landing in wind. He hopes to become a project manager.
Jeremy Brackenridge, Shermco Industries wind turbine technicianSource: Guy Morton
For others like Perrigo, school is the path to getting into the industry. He relocated to Texas from Pennsylvania, where he worked in retail. He has a semester and a half to go before he graduates from TSTC with an associates degree in applied science degree in wind energy.
Ince said the industry is looking for people who can read schematics and have good electrical and mechanical skills. He said he meets with industry representatives once a year to make sure he is teaching his students what the industry tells him their future employees need to know.
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"We start off with them with just a basic introduction to wind energy," Ince said. "And then we elevate from there. We start talking about hydraulics, we teach them hydraulic schematics, we teach them some industrial automation."
The school also makes sure the students can handle a critical part of the job, working a couple of hundred feet off the ground. You can't have a fear of heights if your career takes you where the wind blows.
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0b1e54a634a19175028e2e94c55e1666 | https://www.cnbc.com/2015/10/02/keeping-a-tally-of-job-cuts-at-major-companies.html | Keeping a tally of job cuts at major companies | Keeping a tally of job cuts at major companies
Pedestrians walk by a sign outside of the Hewlett-Packard headquarters in Palo Alto, California.Getty Images
There is a scary trend happening this fall: A series of job cuts at several big-name public and private U.S. companies, most of which began in September, are continuing into October. (Tweet this)
U.S.-headquartered companies put 58,877 jobs on the chopping block last month, up 43 percent from just more than 41,000 in August and the third-highest monthly total this year, according to a report from global outplacement firm Challenger, Gray & Christmas.
HP spinoff to cut up to 30K jobs
Wal-Mart to cut 450 jobs at headquarters
Whole Foods Market to cut about 1,500 jobs
It all began in September when Hewlett-Packard announced its spinoff could mean up to 30,000 job cuts. Other companies to follow that month were Chesapeake Energy and Whole Foods.
The layoff announcements have continued thus far in October. For a running tally of major job cuts so far, see the chart below:
—CNBC's Tom DiChristopher contributed to this report.
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15168084c1c9d4e3f5fc59db3ba8bf1f | https://www.cnbc.com/2015/10/02/mcdonalds-coke-call-for-ouster-of-fifa-leader-blatter.html | Sponsors call for ouster of FIFA leader Blatter | Sponsors call for ouster of FIFA leader Blatter
FIFA President Joseph Sepp BlatterMurat Unlu Anadolu Agency | Getty Images
FIFA sponsors McDonald's and Coca-Cola have called for the soccer organization's chief to resign immediately.
In a statement on Friday, the soft-drink producer and long time World Cup sponsor said FIFA President Joseph Blatter should "step down immediately so that a credible and sustainable reform process can begin in earnest."
Coca-Cola said the world soccer body "needs comprehensive and urgent reform" that can only be achieved through an independent approach.
Spain has axed the end of its soccer season. Here’s why
For its part, McDonald's said, "We believe it would be in the best interest of the game for FIFA President Sepp Blatter to step down immediately so that the reform process can proceed with the credibility that is needed."
Fellow sponsor AB InBev agreed, calling Blatter's presence "an obstacle in the reform process."
The beer maker has been actively engaged in the FIFA reform process as part of a sponsor group that includes Adidas, Coca-Cola, McDonald's and VISA, as well as on an individual basis through continued conversations with the organization, AB InBev said in a statement on Friday.
Blatter said he will not resign as it would not be in the best interest of the organization. Visa and Adidas did not immediately respond to CNBC's requests for comment.
The calls come amid probes by the U.S. Department of Justice and the Swiss Attorney General's Office into corruption at FIFA after the indictment of 14 senior soccer officials and sports marketing executives in May.
Last month, FIFA put its second-ranking official, Jerome Valcke, on leave after an ex-footballer raised allegations he was involved in a plan to resell 2014 World Cup tickets for a lucrative profit.
—Reuters contributed to this report.
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898007571be92dc879b09ef861e7269b | https://www.cnbc.com/2015/10/02/michigan-farmer-uncovers-mammoth-bones-in-soy-field.html | Michigan farmer uncovers mammoth bones in soy field | Michigan farmer uncovers mammoth bones in soy field
A Michigan farmer found bones from a woolly mammoth in his soy field this week, the Washington Post reported Friday.
A digitally-generated image of a woolly mammoth.Science Picture Co. | Getty Images
According to the report, Bristle mistook the remains for a dilapidated fence. "We knew it was something that was out of the norm," the article quote him as saying. "My grandson came over to look at it, he's 5-years-old, he was speechless,"
University of Michigan professor Daniel Fisher said that the animal died more than 10,000 years ago. Fisher said that discoveries of mastodons are more common than finding woolly mammoths, which are more closely related to elephants. It is also one of the more intact specimens compared with those found in the surrounding area.
Robotic hand from MIT can recognize objects by feel
The find may provide evidence of the animal's interaction with humans. While Bristle owns the bones, Fisher hopes to gain further access to them in the hopes of unlocking the mysteries of the extinct creature.
Get the full story from the Washington Post here.
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ee40c7a67935b93bbde69c00d36a6af2 | https://www.cnbc.com/2015/10/02/new-york-city-business-outlook-raises-yellow-flags.html | New York City business outlook raises yellow flags | New York City business outlook raises yellow flags
Men working in construction move debris in New York City.Getty Images
New York City's business activity in September contracted for the first time in eight months, according to a report released on Friday. (Tweet this)
A survey by the Institute for Supply Management-New York showed that the city's business "weakness was widespread" and all but one index posted sizable declines compared to the previous month.
The report's market of current business conditions fell to 44.5 in September, a six year low. Job growth contracted by the most in 17 months while purchase volume abruptly stopped growing and shrank by the most in that same period. Readings below 50 indicate contraction.
Manhattan real estate hits new price record
According to the report, competition, the cost of benefits and the cost of labor were the biggest obstacles to businesses. On the other hand, occupancy, domestic demand and energy costs presented opportunities.
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b57193bbfb4376c0bc0ad24f3fbfe706 | https://www.cnbc.com/2015/10/02/no-guys-immigrants-are-not-taking-all-the-jobs.html | VIDEO1:4301:43Futures Now: 10-year note yield tumblesFutures Now
After the release of a miserable jobs report Friday, some have seen fit to claim that employment is rising only for immigrants, and plummeting for native-born Americans. But a closer look at the numbers reveals a different story.
It is true that, according to the household survey, employment among native-born Americans slid from 124,314,000 in August to 124,052,000 in September. This came as the number of employed foreign-born American rose from 24,914,000 in August to 24,928,000 in September.
But there's a problem with the "they took our jobs" storyline.
Read MoreJob creation misses big in September
The number of unemployed foreign-born Americans also rose, from 1,142,000 to 1,204,000. Meanwhile, the number of unemployed native-born Americans fell from 7,021,000 to 6,423,000.
For that reason, the unemployment rate for foreign-born Americans rose by 0.2 percent, while the unemployment rate for native-born Americans actually fell by 0.4 percent — exactly the opposite of the shift some see occurring.
(Native-born Americans do still have a slightly higher unemployment rate, at 4.9 percent versus 4.3 percent. But at 61.8 percent versus 64.8 percent on the participation rate, fewer native-born people are in the labor force at all.)
Chart: What's the real unemployment rate?
So what's going on here? Are all the jobs going to foreign-born Americans, or not?
Quite simply, the overall number of native-born Americans in the labor force is falling, while the number of foreign-born Americans in the labor force is rising. That's why both employment and unemployment are falling for native-born Americans; it's the total group that is shrinking. This comes as more immigrants are in the labor force.
The numbers, then, should be taken as an indication of shifting demographics, rather than a shifting employment situation.
Watch "Futures Now" Tuesdays & Thursdays 1 p.m. ET exclusively on FuturesNow.CNBC.com!
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a54da3de79e8f7e0ffb6734e867de6d6 | https://www.cnbc.com/2015/10/02/obama-politics-hurting-job-growth-education-secretary.html | Obama: 'Still a path' to budget compromise | Obama: 'Still a path' to budget compromise
VIDEO3:0803:08President Obama: 'Still a path' to budget compromiseClosing Bell
VIDEO2:2302:23President Obama: Congress holding back economy, job growthClosing Bell
VIDEO2:0502:05President Obama: We cannot cut our way to prosperityClosing Bell
VIDEO2:5802:58President Obama on guns: Politics has to changeClosing Bell
VIDEO2:0702:07President Obama: Gun law challenge requires single-issue votersClosing Bell
President Barack Obama on Friday urged Congress to work through the next several weeks to come up with a reasonable budget.
He said that "messing with the debt limit" could put the financial system in a tailspin similar to the financial crisis of 2008. Obama urged the next House speaker to understand "that our system of government requires compromise to pass bills."
Obama said, "There is still a path for us to come up with a reasonable budget agreement to raise spending caps that maintains prudent control of deficits."
In a broader news conference on Friday, the president spoke about several issues including education, Syria, gun control and Congress.
Earlier, Obama said that he was going to continue to talk about the issue of gun control "on a regular basis."
"I will politicize it because our inaction is a political decision that we are making," he told reporters.
Obama denounces Oregon shooting, urges gun policy
Obama said that although the long-term trend of job creation was positive, even more jobs could be created if "we didn't have to keep dealing with unnecessary crises in Congress every few months."
He called the Friday jobs report "good news" but also said that U.S. growth could slow if Congress does not take action.
Obama urged Congress to approve a bill to fund the government for the current fiscal year to avoid doing damage to the economy at a time when global growth is slowing.
"I will not sign another short-sighted spending bill," Obama told a White House news conference. He said a short-term spending bill passed by lawmakers this week set up an opportunity for a new crisis before Christmas.
Obama started the news conference by announcing that John King Jr. would serve as acting education secretary through the end of the president's term.
Earlier in the day, White House officials said that Education Secretary Arne Duncan would be leaving the post in December. Duncan is one of the longest-serving members of Obama's Cabinet.
Duncan said he was stepping down to move back to Chicago to be with his family. "It's with some regret and sorrow that I've accepted his decision to return to our hometown of Chicago," Obama said. "While I will miss Arne deeply, he has more than earned the right to return home."
Fed's Fischer: No 'acute risks' to stability
King currently serves as deputy secretary. He oversees preschool through high school education and manages the department's operations.
— The Associated Press and Reuters contributed to this report.
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c4423f4273e4ac063a6dc27ca4a4e2c2 | https://www.cnbc.com/2015/10/02/oil-rises-as-syria-fighting-intensifies-us-worries-over-hurricane-fade.html | US oil settles up 1.8%, at $45.54 a barrel | US oil settles up 1.8%, at $45.54 a barrel
Gas is flared off at an oil well site outside Williston, N.D.Andrew Burton I Getty Images
Crude prices erased early losses to rise nearly 2 percent on Friday after a report showing the fifth weekly decline in the U.S. oil rig count renewed the debate over falling production in the world's top oil consumer.
Softer-than-expected U.S. jobs data and other economic statistics had weighed on oil earlier, along with reduced threats to oil installations in the U.S. East Coast from Hurricane Joaquin.
U.S. energy companies this week cut the number of rigs drilling for oil by 26, a weekly survey by oil services company Baker Hughes showed. It was the largest number of rigs idled in a week since April.
Read MoreOil might have hit the bottom: Analyst
The data turned around oil prices that had been down about 1 percent earlier.
U.S. crude closed up up 1.8 percent, at $45.54 a barrel. It had slid 77 cents at the session low. Global benchmark Brent was up 50 cents, or 1 percent, at $48.90 a barrel, after falling as much as 76 cents earlier.
VIDEO1:4801:48Options Action: Bullish bet on oil Options Action
Oil prices were still down on the week, though, with Brent down 1 percent and U.S. crude off 0.6 percent.
The Baker Hughes data showed drillers reduced the number of oil wells in all of the nation's major shale basins this week, cutting seven in the Permian in West Texas and eastern New Mexico, five in the Eagle Ford in South Texas, two in the Niobrara in Colorado and Wyoming, and one in the Bakken in North Dakota and Montana.
Despite drilling cutbacks, U.S. oil production edged up to 9.4 million barrels per day (bpd) in July from 9.3 million bpd in June, according to the latest U.S. Energy Information Administration's (EIA) 914 production report.
Read MoreOil set to balance, natgas may surge in Q4: Analyst
Earlier data showed U.S. employers slammed the brakes on hiring over the last two months and wages fell in September. U.S. factories shed 9,000 jobs in September after losing 18,000 in August, according to the Labor Department's survey of employers.
Separately, U.S. factory orders fell 1.7 percent in August, data on Friday showed.
On the storm front, Hurricane Joaquin pounded the Bahamas for a second day with powerful winds and waves, but was not expected to be a major threat to the U.S. East Coast, the U.S. National Hurricane Center (NHC) said.
The U.S. East Coast is home to the New Jersey coast and New York Harbor, where several oil refineries, pipelines and other energy infrastructure are located.
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e946da4bcbbe6f748d03de3258c98e3e | https://www.cnbc.com/2015/10/02/performance-food-rings-new-york-stock-exchange-opening-bell.html | Performance Food rings New York Stock Exchange opening bell | Performance Food rings New York Stock Exchange opening bell
VIDEO0:4100:41Opening Bell, October 2, 2015
Food distributor Performance Food Group rang the opening bell at the New York Stock Exchange on Friday.
Read MoreGym operator Planet Fitness rings NYSE opening bell
The company marked the start of trading at the exchange to celebrate its initial public offering Thursday, according to the NYSE.
Performance Food's president and CEO, George Holm, and other company executives were in attendance.
Brendan McDermid | Reuters
Read MoreEnergizer Holdings rings NYSE opening bell
Performance Food trades under the ticker symbol "PFGC."
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873e8386609730f6cc3252a01dacd1d8 | https://www.cnbc.com/2015/10/02/pokerstars-comes-back.html | Karen Bleier | AFP | Getty Images
PokerStars, the world's biggest online poker site, will be coming back to America. More than 4 years after it was shut down on poker's "Black Friday" and 2 years after regulated online poker launched in two states, PokerStars has gotten regulatory approval to come back to New Jersey.
Shares of Amaya, the parent company of PokerStars and FullTilt, soared 18% in Thursday's trading.
Jason Somerville, a PokerStars sponsored player calls it, "a step in the right direction," towards bringing legal, regulated online poker back to the United States. Somerville often tells viewers of his popular "Run It Up" web show that they can play with him on PokerStars unless they live in "Iran, Iraq, North Korea or the United States."
Amaya CEO David Baazov said in a statement that the company will soon be releasing details of its New Jersey launch. But we already do know that New Jersey players will not have access to PokerStars's worldwide player pool, they will only be able to play with players in that state.
Protections stay in place for New Jersey's brick-and-mortar casinos in struggling Atlantic City. In order to gain approval, all online poker sites in New Jersey must pair with an existing casino. PokerStars has a deal with Resorts casino.
Somerville thinks online poker will help land-based casinos. "You need online poker to have a healthy poker economy. People need to practice, to play for pennies online so they gain the experience and the confidence to go play live," he told his viewers.
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2c0df8e69358539130ee5f00d75bb783 | https://www.cnbc.com/2015/10/02/portugal-election-sees-pro-austerity-alliance-win.html | Is Portugal about to back austerity in Sunday's election? | Is Portugal about to back austerity in Sunday's election?
VIDEO2:4402:44Confident of support: Portugal Economy secretarySquawk Box Europe
VIDEO1:5601:56Why Portugal’s election bucks the trendWorldwide Exchange
VIDEO0:5300:53We’re in a really scary market: GamblesSquawk Box Europe
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Portugal is set to back widespread spending cuts and tax rises as the country center-right ruling coalition is on course to win a general election on Sunday.
The "Portugal Ahead" alliance (PaF) of the PSD and CDS-PP parties, led by incumbent Prime Minister Pedro Passos Coelho, has a much as a 12-point lead according to one opinion poll ahead of the election.
By 4pm local time, 44,38 percent of the 9,6m voters had cast ballots, implying a 2.4 percent increase from a similar vote the country held in 2011.
While a poll by Grupo Marktest of 1,607 people published Thursday gave "Portugal Ahead" about 41 percent of the votes to the opposition Socialist party's 29 percent, most polls give the alliance a more modest lead.
The largest poll published on Thursday by Catolica University gave the conservative coalition 38 percent of the vote with the Socialist party (PS) garnering 32 percent. However, 15 percent of the 3,302 people surveyed were undecided, however, Reuters reported.
If voter apathy or indecision remains and the poll is borne out in the election result, the coalition would still fall short of gaining a majority of seats in the Portuguese parliament. Yet the Socialist party has vowed not to work with the conservative coalition, with the party's leader saying recently he would only consider a grand coalition "if there was ana alien invasion" of Portugal.
One stand-out aspect of any re-election of incumbent Prime Minister Passos Coelho would be the fact that he would be the first prime minister in the euro zone to implement the unpopular austerity measures required by the country's 78 billion euro ($87.1 billion) financial bailout in 2011 and yet be re-elected.
Having implemented some of the largest spending cuts in the last 50 years along with swingeing tax rises, Portugal's government appears to have got the country back on its feet. The country exited its bailout program successfully in 2014 and is seeing some of the best growth rates now in the 19-member euro zone, expected to grow 1.6 percent in 2015, according to the European Commission.
Leonardo Mathias, Portuguese assistant secretary of state for the economy, told CNBC that he was proud of the conservative party's record in implementing the country's financial bailout and austerity and reforms required by lenders.
"We feel very excited about the job we've done. Over four years we had a very deep and quick austerity program, we changed the structure of out economy and now have a completely different macro-economic landscape. We enacted over 450 reforms including business reforms, labor reform and competition reforms," he said.
"We got the country growing again and we have export growth, investment growth and foreign direct investment," he said, adding that it was a case of "mission accomplished."
Read More Austerity a vote-winner? This poll could be a shocker
A surprise result cannot be ruled out, according to Deutsche Bank, although most analysts are agreed that the center-right is likely to retain power.
"In September the formal coalition has been achieving 35-40 percent of the popular vote in most polls, giving it a lead of around 5 percent on PS," economist Peter Sidorov, and strategist Jack Di Lizia said in a note Thursday.
Portuguese Prime Minister Pedro Passos Coelho waves a Portuguese flag at a rally in September.FRANCISCO LEONG | AFP | Getty Images
"(But) this is still short of the slightly over 40 percent likely required to achieve an outright majority in parliament but given the uncertainty of the polls and the large share of undecided voters, neither a centre-right absolute majority nor a better performance by the PS can be ruled out."
Meanwhile, Antonio Barroso, vice president at risk consultancy Teneo Intelligence said that, barring any last-minute upset that leads to an absolute majority for the coalition, "the most probable scenario is a plurality for the center-right."
"Although government formation might be tricky, incumbent PM Pedro Passos Coelho has a good shot at being re-appointed," as a result, he added in a note Wednesday.
Paul Schefelhout, president of Portuguese investment firm Finangeste, said the two main conservative and socialist candidates had policies in common -- mainly that of maintaining Portugal's economic momentum.
"Both candidates are very moderate, both are pro-investment and both are standing for the growth of Portugal so the electorate has a hard time choosing between two platforms that are very similar," he told CNBC in Lisbon, Portugal.
"Both want to keep Portugal in the limelight of international investors and want to give markets (the belief) that nothing's going to change and that the cycle of growth is going to continue," he said.
- By CNBC's Holly Ellyatt, follow her on Twitter @HollyEllyatt. Follow us on Twitter: @CNBCWorld
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38ddffd1bde38fe19b7e9f1c0d559231 | https://www.cnbc.com/2015/10/02/power-play-earnings-season-will-look-like-the-last-one.html | Traders work on the floor of the New York Stock Exchange.Getty Images
Earnings season starts in earnest in two weeks, but we may get a few clues on the state of the economy next week when PepsiCo and Yum Brands report quarterly results on Tuesday.
Bill Stone, chief investment strategist at PNC Asset Management tells CNBC's "Power Lunch" on Friday "it might be helpful to finally have more fundamental data to discuss rather than the macro fears from the Fed, China and policy."
Read More What's next for stocks after worst quarter in four years
In terms of numbers, Stone believes Q3 earnings will be similar to what we saw in Q2.
"Sales poor but earnings much better excluding energy. Sales ex-energy are likely to remain uninspiring given the global economic picture," Stone said.
PepsiCo is down slightly during trading, while Yum Brands is up one percent.
Disclaimer
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844f1ba0b2e9f4d7946e0885fcd76c3a | https://www.cnbc.com/2015/10/02/putin-brings-geopolitical-risk-back-into-oil.html | Putin brings geopolitical risk back into oil | Putin brings geopolitical risk back into oil
Vladimir PutinMaxim Shipenkov | Pool | Reuters
Russia's military buildup and bombing campaign in Syria this week rekindled the security premium in oil prices.
Crude futures are the place for many traders to hedge their portfolios against geopolitical risk, especially when it concerns the Middle East.
While the supply and demand fundamentals of oil remain overwhelmingly bearish or negative for prices, Russia's involvement caused prices to surge higher the past two weeks.
Last week, the mere news of the Russian military buildup caused the oil market to rally and hold onto some of those gains even in the face of bearish inventory data from the Department of Energy in its weekly report.
Prices rallied again earlier this week, on news of the initial bombing sorties carried out by the Russian air force.
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4c7121cfe27839db125b6338232be0b4 | https://www.cnbc.com/2015/10/02/rocktober-risk-appetite-is-fighting-back.html | Rocktober? Risk appetite is fighting back | Rocktober? Risk appetite is fighting back
VIDEO2:5902:59Signs point to year-end equity rally: StrategistSquawk Box Europe
A modest start to October for the world's stock markets and a rally in hard-hit commodities suggest risk appetite may be resurfacing after a quarter marked by fear and risk aversion.
After suffering their worst quarter in four years amid fears about a China slowdown, U.S. rate uncertainty and emerging market risks, equities have crept up at the start of the fourth quarter.
The , a broad gauge of U.S. shares, is up more than 2 percent from a low hit on Monday, while Asian shares closed Friday with a weekly gain of just over 1 percent and stock markets in London, Frankfurt and Paris all traded over 1 percent higher Friday.
Read MoreWhat the charts are saying for Q4
"Monday felt like the end of the world was coming with commodity prices (falling); then we had a couple of good days and yesterday was a bit all over the place," Stephen Cohen, chief investment strategist at Blackrock, told CNBC's "Squawk Box Europe" on Friday.
"Overall we are still cautious, but we are seeing one or two signs that would point towards a rally going into year-end," he said.
Traders work on the floor of the New York Stock Exchange.Brendan McDermid | Reuters
Investors were still expected to tread warily until there was clarity on the timing of "lift off" on U.S. interest rates from record lows and the outlook for China's economy. And Friday's key non-farm payrolls report could be another source of volatility.
Risk-on
Still, having fallen so far and fast in recent months, there was a case to be made for a slight recovery in risk assets, analysts said.
"Markets do feel a little more risk-on and confident than they did earlier this week," Bill Blain, a strategist at Mint Partners in London, said in a note on Thursday.
"Despite the rising concern levels, I've been seeing courageous accounts selectively dip their toes back into risk assets," he said.
In fact, the rally in most stock markets Thursday came amid further signs of weakness in the Chinese economy, with the purchasing managers' index data suggesting that China's manufacturing activity shrank again last month.
China, the world's second-biggest economy, has been a key driver of risk aversion this year as weak data and concerns that policy makers have not done enough to manage the slowdown hit a broad range of countries and commodities that have depended on China growth in recent decades to drive growth.
Too harsh?
"Markets have been too pessimistic on China," Julian Jessop, chief global economist at Capital Economics, told CNBC. "We think real economic growth bottomed out earlier this year and should stabilize thanks to stimulus from Beijing."
Copper, one of the hardest hit commodities this year, looked poised to snap a two-week decline and end the week higher.
Traders work on the floor of the New York Stock Exchange.Brendan McDermid | Reuters
Three-month copper traded on the London Metal Exchange was 0.4 percent higher at $5,117 a tonne on Friday – just over 2 percent above a six-year low hit in August.
Read MoreGlencore scrambles on asset sales, debt concerns
The CBOE Volatility Index, also known as the VIX index, meanwhile has pulled back from four-year highs struck in August at the height of China and U.S. rate-hike worries.
The index, widely viewed as a measure of fear in markets, is trading at about 22.55, down from just over 40 in August.
"We've been thinking that after those August lows (in stocks) we could have a bounce which we saw, but we could also have a retest as we've seen in the past week and many markets have hit new lows," Shane Oliver, head of investment strategy and chief economist at AMP Capital Markets told CNBC on Friday.
"But U.S. markets didn't (hit new lows) and if you're worried about valuations, Fed tightening, that is the market you'd be worried about," he said. "I think it's 50-50 right now that you see one more leg down in U.S. markets before we move higher."
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80fc8011f8b546ee6f7e46cd10048499 | https://www.cnbc.com/2015/10/02/sa-now-harbinger-for-battered-commodity-economies.html | SA now harbinger for battered commodity economies | SA now harbinger for battered commodity economies
Waldo Swiegers | Bloomberg | Getty Images
South Africa, one of the emerging market's biggest success stories in recent years, is rapidly becoming a canary in the coalmine known as the commodities washout.
A deepening tumble in commodity prices — a fast moving train wreck that's been barreling down the tracks of the global economy since last year — has been linked directly to China's economic slowdown. For the first time in nearly a decade, investors are yanking more money out of emerging markets than they are putting in, a new report from the Institute of International Finance stated on Friday.
With the emphasis being on China and other Asian countries, investors have largely ignored developing economies such as South Africa, the continent's second-biggest economy and one highly dependent on natural resource demand. Sub-Saharan Africa is a net exporter of primary commodities, according to the World Bank, which becomes a mixed blessing when major markets that account for much of global demand stagnate or fall into outright recession.
Meanwhile, South Africa is becoming an exponent of the sell-off hammering global markets. Tumult in the world economy—and the G20 country's own structural challenges—recently sent its currency, the rand, to a record low. The rand's swoon is part of what Bernd Berg, a portfolio manager and strategist with Societe Generale, recently called an "unprecedented" tumble in emerging market currencies.
Read More El-Erian: Emerging markets are 'completely unhinged'
Table Mountain, Cape TownGetty Images
Economists note that the swift deterioration in these currencies stems from a worsening of domestic fundamentals and a weak external backdrop. After growing in the first three months of the year, South Africa's economy shrank by 1.3 percent in the second quarter, heightening fears of a full-fledged recession.
As a result, a perfect storm could very well be brewing for South Africa and its cohorts in the BRIC economies, which include Brazil, Russia, India and China. Last week, the International Monetary Fund warned that South Africa and other commodity-lined economies would likely see nearly a full percentage point shaved from their annual growth over the next two years.
Developing market capital flight "is most dangerous for the currencies of countries that face a sizable current account deficit and rely on short-term capital inflows," Berg said, issues that bedevil South Africa's economy.
South Africa's markets have not been spared from what has become a significant slump in the demand for emerging market bonds and equities since late July. According to investment bank Barclays Africa (Absa), the threat of a potential rate hike from the Federal Reserve and China slowdown fears have hit South Africa and other emerging markets hard.
Coupled with China's slowdown, analysts say there has been a growing loss of confidence in the big emerging market success stories of the last few years, which is now feeding into South Africa's woes. The downward spiral in Africa's economic powerhouse is dovetailing with the seeming demise of the commodities "super-cycle" that may get worse if the Fed follows through on a threat to tighten monetary policy.
"On a year-to-date basis, [South Africa's capital] inflows are still up on the year, equity inflows remain at six-year highs and SA's current account deficit has narrowed in recent quarters," Mike Keenan, a Johannesburg-based economist with Absa said in a research note last month.
"However, South Africa still has relatively large external funding requirements, which is why these waning portfolio flows remain a concern for both the country's balance of payments and its exchange rate outlook," he added.
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8d98b8cbfee2245b5b7513c1cd4d18b6 | https://www.cnbc.com/2015/10/02/scottrade-data-breach-affects-up-to-4m-customers.html | Scottrade data breach affects up to 4M customers | Scottrade data breach affects up to 4M customers
Source: Scottrade
A breach of discount brokerage firm Scottrade has potentially compromised sensitive data of millions of customers.
Federal and internal investigations did not determine exactly how many clients had data stolen, so Scottrade plans to notify and offer identity protection services to about 4.6 million clients whose information was in a breached database, the company confirmed Friday. The incident took place around late 2013 and early 2014.
The affected database contains Social Security numbers and email addresses of clients, but hackers appeared to target names and addresses.
In a notice on its website, Scottrade stressed it had "no reason to believe" that its trading platforms or client funds were affected. The company said it has taken "appropriate steps" to boost its network security after the incident.
"We take the security of the information entrusted to us very seriously and are fully cooperating with law enforcement in its investigation and efforts to bring the perpetrators to justice," Scottrade said.
Read MoreExperian data breach hits more than 15M T-Mobile customers, applicants
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6078dc78b86ac8af2fca757a469bdd5a | https://www.cnbc.com/2015/10/02/sprint-to-cut-jobs-reduce-up-to-25-bln-in-costs-wsj.html | Sprint to cut jobs, reduce up to $2.5 bln in costs: WSJ | Sprint to cut jobs, reduce up to $2.5 bln in costs: WSJ
VIDEO0:3200:32Major cost cuts on the way for SprintMobile
Sprint plans to cut an unspecified amount of jobs and about $2 billion to $2.5 billion in costs in the next six months, The Wall Street Journal reported, citing an internal memo. CNBC confirmed the report on Friday.
The wireless carrier has frozen external hiring and all expenditures require the approval of the finance department, WSJ reported, citing the memo sent to staff by the new chief financial officer.
"We have begun an effort to significantly take costs out of the business so the transformation of the company will be sustainable for the long-term," Sprint spokesman Dave Tovar told Reuters in an email on Thursday.
Pedestrians walk past a Sprint store in Washington, D.C.Andrew Harrer | Bloomberg | Getty Images
The company has been under pressure to cut costs because of concerns that it was spending too much to acquire and retain customers.
It is likely that some jobs will be impacted but it was "premature" to discuss the details due to the early stages of the process, Tovar said.
In the race for subscribers, Sprint, which had 57.7 million customers at the end of the first quarter, slipped to fourth place among U.S. wireless carriers, falling behind rival T-Mobile US.
—CNBC contributed to this report.
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e452b74fb65d9f8d5d202470e911096e | https://www.cnbc.com/2015/10/02/stock-picks-for-a-slowing-economy.html | Stock picks for a slowing economy | Stock picks for a slowing economy
VIDEO2:1302:13What to buy if growth slowsTrading Nation
Amid weakness in emerging markets around the world, a disappointing jobs report on Friday topped off concerns that growth in the U.S. could be slowing.
The report showed 142,000 jobs were added in the U.S. last month, steeply short of economist expectations of about 200,000.
Read MoreUS Treasury yields plunge amid jobs report; 10-year yield under 2%
However, one strategist says that some stocks are safe from the slowing of the U.S. economy, namely the health-care providers.
Erin Gibbs, chief equity investment officer of S&P Capital IQ, said several health-care names like AmerisourceBergen and McKesson are at "really attractive entry points," from being oversold.
"We still have good expectations for health-care growth, they're still going to do well regardless of what the GDP does," Gibbs said Friday on CNBC's "Trading Nation."
AmerisourceBergen and McKesson have both taken a tumble in the last three months, and ended the week down 5 percent and 3 percent, respectively.
Alternatively, Phillip Streible of RJO Futures said he's watching for commodities, such as metals and agriculture products, to get a boost.
Read More Does the weak jobs number point to a gold comeback?
If you're truly believe that growth is slowing, "you start looking at the 'world's gotta eat'-type premise," Streible said Friday.
That would make corn, soybeans, wheat and cattle several safe bets.
"There are a lot of commodities out there that are going to benefit, regardless of what the economy does," he said.
Want to be a part of the Trading Nation? If you'd like to call in to our live Wednesday show, email your name, number and a question to TradingNation@cnbc.com.
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c82e94ed2714f56f2eae797e52badcae | https://www.cnbc.com/2015/10/02/the-martian-gets-a-real-life-boost-but-it-may-not-matter-in-the-long-run.html | 'The Martian' gets a real life boost, but it may not matter in the long run | 'The Martian' gets a real life boost, but it may not matter in the long run
Source: © 2015 Twentieth Century Fox Film Corporation
After getting stranded on Mars in the new movie "The Martian," Mark Watney—played by Matt Damon—vows to "science the [expletive] out of" his attempt to extricate himself from the barren planet, and the dire conditions in which he finds himself.
That solemn promise, uttered with strange jocularity by Damon's character, becomes the modus operandi for "The Martian," a science fiction vehicle that almost prides itself on technical devotion to science. In a twist, the movie actually sheds itself of most of the special effects wizardry and suspension of disbelief that are the mother's milk of most sci-fi movies nowadays.
It's just one of several reasons why industry watchers have high hopes for the movie's box office earnings potential, notwithstanding the recent discovery of water on the Red Planet that has some viewing the timing of the movie's release with some suspicion. Whether by circumstance or design, "The Martian," which cost $108 million to make and is based on a 2011 book by Andy Weir, functions as a tribute to NASA and the extraterrestrial mission it's sought to fulfill since 1958.
Read MoreEvidence found of 'flowing liquid water' on Mars: NASA
At least a third of the film's action takes place at the space agency's headquarters, with NASA bureaucrats playing a prominent role in advancing the narrative.
So will audiences go for it, or might they be put off by what one critic called the "spookily appropriate timing" of the movie's release and NASA's big discovery on Mars? Analysts noted that the movie was the top advance ticket seller on movie ticket website Fandango prior to its release—even before NASA dropped its Mars bombshell.
"When real life events coincide with and dovetail perfectly with the release of a film, it can serve to raise the level of awareness, and also enhance the desire for moviegoers to see that particular film," said Paul Dergarabedian, senior media analyst with Rentrak. He predicted "The Martian" would top the box office this weekend, with "strong buzz" likely to propel it to a take above $40 million.
"Given the pedigree of the film including the star power of Matt Damon and the vision of famed director Ridley Scott, who is in his wheelhouse in the sci-fi realm … all of these elements are coming together for one of those rare occasions when a non-sequel, non-franchise film will top the box office," he added.
Matt Damon on Mars and microfinancing
In "The Martian," life on Mars is far from the pleasure planet movie goers once saw in 1990's "Total Recall." Like Arnold Schwarzenegger's character, Douglas Quaid, Damon's marooned astronaut is locked in a desperate struggle for his survival.
Yet the circumstances are entirely different, and more similar to 2014's "Interstellar" — another outer space tearjerker that hit it big at the box office last year by grossing nearly $500 million worldwide. "The Martian" is suffused with a science nerd's appeal and aims more for emotional payoffs instead of the explosions and computer-generated graphics that often prevail in big-budget productions.
At a question-and-answer session this week at "The Martian's" New York premiere, director Ridley Scott insisted that despite taking place on Mars, the movie had a more universal and optimistic message. "The power of the movie is in the characters," Scott said, adding that "the parable of the story is to help each other."
Scott made his remarks a day before NASA announced the discovery of water on the Red Planet—an irony lost on the wayward astronaut in "The Martian," who at one point struggles to synthesize water from literal nothingness. Box office analysts, however, insist the movie will sink or swim on its own merits.
This week's Mars discovery "is completely coincidental," Doug Stone, president of tracking firm Box Office Analyst, told CNBC. "If there's life on Mars, that's great," he joked, but predicted "The Martian" would do brisk business regardless.
"A few people may have their interests piqued, but … it's going to stand on its own," he added.
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db37f9395bc490336d9f76aec9fa2814 | https://www.cnbc.com/2015/10/02/toll-brothers-ceo-housing-comeback-in-5th-inning.html | Toll Brothers CEO: Housing comeback in 5th inning | Toll Brothers CEO: Housing comeback in 5th inning
VIDEO1:4401:44Homes of the futureSquawk Box Next 20
VIDEO2:1802:18Health of American consumerSquawk Box Next 20
VIDEO3:3403:34Save energy with a smart homeSquawk Box Next 20
With the four-year housing recovery in just the "fourth or fifth inning," the real estate market may take longer than expected to really fire on all cylinders again, said Doug Yearley, CEO of homebuilder Toll Brothers.
"Four years in, I would think the housing market would be further along. I think it means we're going to have a longer, slower recovery," he told CNBC's "Squawk Box" on Friday. He described the 2007 to 2011 period as the "worst housing depression we've ever seen."
While characterizing current housing conditions as "healthy," he said factors such as an improving economy and extremely low interest rates should be providing more juice to the real estate market.
Low borrowing costs have translated into historically favorable mortgage rates for homebuyers.
"[But] we don't worry about the Fed raising rates as long as it's done intelligently and slowly," Yearley said, adding the real estate market can handle mortgage rates of 4.5 percent. "I'll take a 4.5 percent rate in a better economy any day."
Appearing with Yearley on CNBC, Home Depot Chairman and CEO Craig Menear said the housing market has been more robust this year than he had expected, and that's leading to additional residential renovation and improvement projects.
"We're getting a tailwind from the housing environment that helps our business in terms of home value appreciation and housing turnover. Those are two key drivers of projects," said Menear.
"Both of those have been a little bit stronger than how we thought about as we planned 2015," he said, estimating turnover at about 5 percent and appreciation 4 to 5 percent.
With housing doing better, Menear said homeowners see improvement as an investment rather than an expense, which makes them more likely to take on projects or hire contractors.
Besides talking about housing as it relates to the economy, both CEOs said the notion of the "death of the suburbs" has been greatly overstated.
"Certainly more and more people are living in cities. But [in] the American Dream when you settle down and your kid hits kindergarten, most people are moving to the 'burbs," said Yearley.
Millennials, loosely defined as people born in the early 1980s through the late 1990s, "absolutely want to buy homes" in the suburbs, Menear agreed, saying his company's research shows it's "just a delayed purchase."
The trend of young people shunning the suburbs in favor of the hustle and bustle of city life has been well documented in dire predictions about the "reurbanization of America" from real estate billionaire Sam Zell and others in recent years.
But Yearley said millennials are getting married later and having families later. "Therefore they're moving to the 'burbs later."
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f80da291d19c7eaf48804a84357bb25e | https://www.cnbc.com/2015/10/02/traders-bet-the-bottom-is-in-for-oil.html | Traders bet the bottom is in for oil | Traders bet the bottom is in for oil
VIDEO1:4801:48Options Action: Bullish bet on oil Options Action
It seems that some traders are seeing a bottom for oil.
On Thursday, the United States Oil Fund ETF (USO) saw four times its average daily call volume, indicating bullish bets from traders. One trader bought 60,000 of the December 20/21 call spreads for $0.06 each, paying a $360,000 premium on a bet that USO breaks above $20 by December expiration.
So far, the trade hasn't been working very well. On Friday, USO fell 2 percent, trading around $14. The ETF has fallen 30 percent year to date.
Read More The $5 million bet that oil ETF goes back to all-time lows
According to CNBC contributor Dan Nathan, the options market is indicating little likelihood of this trade being profitable. For USO to get to the $20 level, it would need to rally more than 40 percent by December.
"The options market is placing a very low probability that this trade is in the money," Nathan said Thursday on CNBC's "Fast Money." However, "it could be a leveraged trade for an existing long."
Crude oil has also tumbled this year, down 17 percent year to date.
"It's obviously trying to put a bottom in. Some of those guys think it has bottomed," Nathan said.
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375fe4e77d3919f8f9927eb73e2a1eb8 | https://www.cnbc.com/2015/10/02/traders-watch-for-imported-earnings-weakness-data.html | Traders watch for imported earnings weakness, data | Traders watch for imported earnings weakness, data
VIDEO2:2602:26September jobs report disappointsUnemployment
Traders will be on the lookout in the week ahead for any signs of overseas weakness seeping into the U.S. economy, after surprisingly soft job growth in August and September.
Trade data Tuesday and ISM services sector data Monday will be important as will the weekly jobless claims and Fed minutes Thursday.
The markets will also be looking to the start of the third-quarter earnings season, with Pepsico, Alcoa and a few other companies reporting in the week ahead. Earnings are expected to decline 3.9 percent for the , according to Thomson Reuters.
Traders on the floor of the New York Stock Exchange.Getty Images
"I think for the next week and the following week, the market is dealing with a lot of uncertainty," said Ron Sanchez, chief investment officer at Fiduciary Trust. "(The jobs) number was not well received in terms of it being a surprise. Sentiment is weak here. I would describe it as fragile. … The focus is on growth, and clarity regarding economic data."
September's 142,000 jobs and a downward revision in August's number to 136,000, instantly rocked the stock market and signaled that the Fed may not be able to raise rates this year, as it would like. It also raised concerns that the Fed may have been right when it held off a rate hike in September, saying it was worried international developments, like China's weak growth, could hurt the U.S. economy.
"I think there's been some economists out there saying it shows real slowing in the U.S. economy. I don't really buy that," said BlackRock co-head of Americas fixed income, Rick Rieder. "What our collective eyes will be on for the next month is outside the U.S. It's data that has to do with Chinese growth and it's data that has to do with manufacturing around the world. That's what we're going to be watching. U.S. growth, I don't think, is a big concern."
Read More Jobs report signals Fed on hold until 2016
Rieder said the miss in the jobs report was not surprising since employment growth has been running at a high level for the past two years. Rieder has said he believes the Fed could have raised rates previously, but now it faces a period of slower jobs growth. Fed officials, backed by a strong job market, have said they want to raise rates this year, even though inflation still lagged their target.
"This makes the Fed's job trickier," he said. Futures markets immediately shifted after the report, putting higher odds of a rate hike next year.
Economists are watching trade data Tuesday after a preliminary report on August exports provided some of the first clues that overseas growth was impacting the U.S. China does not have a big impact on U.S. exports but the countries that depend on China have relationships with the U.S., and a slowdown in activity could come via those economies.
"We know trade was a disaster in August, so this will just reconfirm it. Economists, myself included, have whacked their GDP forecasts in the third quarter based on the widening of the trade balance that we got. This will just be another shot across the bow with a tremendous widening of the trade balance, which will knock a good half-percent off of real GDP," said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi.
Read More Why the jobs picture is even worse than you think
Growth in the second quarter is now tracking at sub-2 percent after 3.9 percent in the second quarter. The question is whether the sluggishness is just transitory. In the Treasury market, yields fell dramatically with the 10-year dipping below 2 percent Friday.
"I think you just have to wait and see what happens next Monday or Tuesday. I doubt the economy is as weak as the bond market is painting it. I don't really want to take December off the table (for a Fed rate hike)," Rupkey said. "There's 18.1 million cars (being sold a year). There's got to be a reality check somewhere here." September's strong car sales Thursday showed the fastest pace of annualized sales in 10 years.
As for the stock market, some strategists have been looking at the 1,871 level the S&P 500 hit Tuesday as a test of a low reached in August. There are some who say the recovery from that level, including a rally to close at session highs Friday, is signaling a bottom in the equities correction. The closed at 1,951 on Friday, up 1.04 percent for the week.
The upcoming earnings season could be a deciding factor in terms of determining whether a bottom has been reached and whether there will be a year-end rally.
Read MoreDow, S&P post biggest reversal in 4 years
Bob Doll, chief equity strategist with Nuveen Asset Management, said there could be a year-end rally but he also says stocks may not surpass last year's level and there's a good chance the S&P 500 could be negative for the year.
"Earnings are clearly important, and my guess is earnings will be ho-hum, but the big differentiator will be geography. I think the domestic will do reasonably well and multinationals will struggle again," he said.
The worst-performing sector is expected to again be energy with a 64 percent decline, followed by a 14 percent drop in materials earnings. The best performers should be consumer discretionary, financials and telecom, all up about 11 percent, according to Thomson Reuters data.
Read More Cashin: This is not going to be a pleasant Christmas
Wells Fargo Securities institutional equities strategist Gina Martin Adams said technically the market could have reached bottom but she sees the real shakeout coming when companies begin to discuss their outlooks and analysts chop forward earnings. She said analysts will finally bring down their earnings estimates so that stocks can find a floor and move higher with better valuations.
"I think the 10 percent correction we had so far probably holds, unless you get further weakness in oil prices," she said. "I think this earnings season could present an opportunity for analysts to finally kitchen sink 2015 earnings estimates. We had the valuation drawdown. I don't think valuation is any longer a strong impediment to stock prices. Now we're worried about the earnings risk. … I'm looking for October to be a pretty volatile month but maybe it will finally allow for a clearance of that last leg of concern."
Adams said she views the current period as being similar to 1998, when the U.S. market corrected because of overseas concerns that did not make a big impact on the U.S. economy.
Monday
Earnings: The Container Store
9:45 a.m.: PMI Services Index
10 a.m.: ISM non-manufacturing
Tuesday
Earnings: Pepsico, Yum Brands
8:30 a.m.: International trade
1 p.m.: 3-year note auction
5:30 p.m.: San Francisco Federal Reserve Bank President John Williams speaks
Wednesday
Earnings: Monsanto, Constellation Brands, Acuity Brands
7 a.m.: Mortgage applications
10:30 a.m.: Oil Inventories
1 p.m.: 10-year note auction
3 p.m.: Consumer credit
Thursday
Earnings: Alcoa, Domino's Pizza, Ruby Tuesday
8:30 a.m.: Initial claims
9:30 a.m.: St. Louis Fed President James Bullard speaks
10:30 a.m.: Natural Gas Inventories
1 p.m.: 30-year note auction
1 p.m.: Minneapolis Fed President Narayana Kocherlakota speaks
2 p.m.: FOMC minutes
3:30 p.m.: San Francisco Federal Reserve Bank President John Williams speaks
4:30 p.m.: Fed Balance Sheet/Money Supply
Friday
8:30 a.m.: Import prices
10 a.m.: Wholesale trade
11 a.m.: New York Fed President's William Dudley speaks
1 p.m.: Baker-Hughes Rig Count
1:30 p.m.: Chicago Fed President's Charles Evans speaks.
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73c7b7fafa0215eb28163dab4a8963ef | https://www.cnbc.com/2015/10/02/trading-the-drug-price-controversy-hitting-biotech.html | Trading the drug price controversy hitting biotech | Trading the drug price controversy hitting biotech
Ingram Publishing | Getty Images
Indexes representing the biotech and health-care sectors are down 15 percent and 7 percent, respectively, compared to an S&P 500 off 3 percent since the news was released Sept. 21 that Hillary Clinton plans to regulate drug pricing.
Investors are wondering which health-care and biotech names are most at risk from potential drug pricing regulation. Or at the very least, the companies that could come under scrutiny from both parties in Congress over the practice of extreme price increases on older or rare drugs.
Morgan Stanley analyzed the issue and found the companies that were the best and worst positioned in a note sent to clients Thursday.
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c6bfbcf1bbd15345dcb8e5d563a2bf00 | https://www.cnbc.com/2015/10/02/traffic-at-volkswagen-dealerships-quite-good-autonation-ceo.html | Traffic at Volkswagen dealerships 'quite good': AutoNation CEO | Traffic at Volkswagen dealerships 'quite good': AutoNation CEO
VIDEO2:5502:55AutoNation kicks off Breast Cancer campaignSquawk Box
Traffic at U.S. Volkswagen dealerships remained "quite good" in September even after the German automaker became embroiled in an emissions test cheating scandal, AutoNation CEO Mike Jackson said Friday.
Last month, Volkswagen admitted to installing so-called "defeat devices" in about 11 million diesel vehicles worldwide. The autos' emissions exceeded federal regulations, but software embedded in the vehicles was engineered to adjust those emissions during tests.
Read MoreUS auto sales total 18.17M in Sept; highest since July 2005
Jackson said Volkswagen's sales were flat last month, compared with a 21-percent rise in September new vehicle sales at AutoNation, the country's largest auto dealer chain. That underperformance is to be expected given that Volkswagen has put a sales stop on all 2016 diesel models.
"If 25 percent of your business is on sales stop, then of course the sales are going to be down. But the customers are still in the showroom," Jackson told CNBC's "Squawk Box."
He added that the scandal has not yet spilled over to Volkswagen's Audi or Porsche brands, which saw September sales rise 16 percent and 22 percent, respectively.
Read More Volkswagen's US boss faces grilling by lawmakers
Jackson told CNBC last month Volkswagen needs to take full accountability and responsibility. The same day, then chief executive Martin Winterkorn stepped down. He was replaced by Porsche CEO Matthias Muller.
"Volkswagen still needs to take all the right steps. I think that's in the works. We need answers for our customers, but if they take the rights steps, they can get through this," he said Friday.
Read MoreWhat you need to know about the Volkswagen scandal
Correction: This story has been updated to reflect that the number of vehicles with defeat devices is 11 million worldwide.
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4286016f0defa4077410dec89eec4755 | https://www.cnbc.com/2015/10/02/ups-sued-for-repeatedly-blocking-new-york-bike-lanes.html | New York man sues UPS for blocking bicycle lanes | New York man sues UPS for blocking bicycle lanes
One New York City bicyclist says he's tired of United Parcel Service trucks getting in his way, and he hopes the courts will make the parcel giant change its ways.
Alex BellSource: James Fanelli | DNAinfo.com
New York City resident Alex Bell has reportedly filed two new lawsuits against UPS that accuse Big Brown's trucks of repeatedly blocking Manhattan bike lanes by double-parking in them during deliveries.
"I am trying to annoy UPS," Bell told the news site DNAinfo.com, which first revealed his Civil Court complaints Friday. "If you annoy them enough, they'll change maybe."
Bell told DNAinfo that he is frequently brushed off by drivers when he asks them not to park in the lanes he wants to use, being either told to "Talk to corporate," or sometimes getting much-saltier dismissive responses.
The Harlem man said he rarely sees cops ticketing UPS trucks for double-parking in the lanes set aside for cyclists.
A UPS truck parked in New York City bike lane.Source: Alex Bell
A previous, similar small-claims case that Bell filed in June was dismissed after he agreed to go to arbitration. He was reportedly unable to give the arbitrator proof of complaints he had made to UPS, or MetroCard receipts that would have backed his claims of taking the subway instead of riding his bike to work. Bell had demanded $999 in damages because of the double-parking drivers allegedly making his bike commute dangerous.
Since then, Bell told DNAinfo, he has geared up for his new lawsuits by collecting such documentation, which includes photographs he has taken of double-parked UPS trucks.
A UPS spokeswoman told the news site that the company's drivers look for appropriate parking spots for commercial vehicles, but face a shortage of them in the Big Apple.
She also noted that state law allows trucks to briefly double-park in bike lines if the driver is making "an expedited attempt at delivery," the article said.
Read the full DNAinfo.com story here.
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622142d634bbb0e3895b4a6a43cdfada | https://www.cnbc.com/2015/10/02/vw-scandal-spells-danger-for-these-economies.html | VW scandal spells danger for these economies | VW scandal spells danger for these economies
Christophe Morin | Bloomberg via Getty ImagesChristophe Morin | Bloomberg via Getty Images
The fallout from the emissions scandal still simmering in northwest Germany has engulfed policymakers, regulators and some of the largest automakers in the world.
However, analysts are warning that it could also hamper growth in an emerging part of Europe that is already dealing with the prospect of a slowing Chinese economy.
Data from statistics agency Eurostat indicate how exposed countries like the Czech Republic are to the autos sector. The carmaking industry contributes more than 4 percent to the country's gross domestic product and that's not taking into account indirect contributions that the auto companies add.
Countries like Slovakia and Hungary are also highly tuned into the sector with a sizeable proportions of the total workforce working on car manufacturing.
"For the small and export-oriented economies of central Europe which rely heavily on the car manufacturing industry, the Volkswagen scandal is a major threat to growth," Nicholas Spiro, head of Spiro Sovereign Strategy, told CNBC via email.
Billions of euros have been wiped off Volkswagen's value following the revelation last month that the company had used software to change its diesel engines' performance under U.S. test conditions.
Volkswagen produces engines in Hungary and owns the biggest Czech carmaker Skoda. Skoda said last week that 1.2 million of its vehicles had the engine that manipulated emissions data and nations are starting to ban sales of cars with the technology. However, local media report that Skoda has not registered any deviations in the production, sales or orders of its models.
Volkswagen: Further risk investors may be overlooking
Speaking last week to CNBC, Luis Costa, head of CEEMEA FX and rates strategy at Citi, said that the whole auto sector "has been massively affected."
"I wonder what that means for the whole sector and in terms of net exports dynamics out of eastern Europe. Eastern Europe being Slovakia, Poland, Hungary, Romania. These are absolutely important centers of growth, net exporters to western Europe," he said.
"It's difficult to quantity but let's see how widespread this crisis is."
Despite the concern, the Czech Republic could be nicely buffered by some surprisingly good growth in the country this year. The Czech economy accelerated by 4.4 percent in second quarter and is currently the best performing country in Europe.
Spiro told CNBC that domestic demand, and in particular private consumption, has been growing at a relatively brisk pace this year which should help offset the damage to the country's export industry.
"Extremely loose monetary policy and low oil prices should also help underpin growth," he said.
The euro has edged higher against the Czech crown since the scandal first emerged in mid-September with one euro now worth around 27.1606 crowns.
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8613affbda600f40b8d2cc4c9e53b157 | https://www.cnbc.com/2015/10/02/wal-mart-to-cut-450-jobs-at-headquarters.html | Wal-Mart to cut 450 jobs at headquarters | Wal-Mart to cut 450 jobs at headquarters
VIDEO0:2500:25Wal-Mart to cut 450 jobs at its headquarters
In a letter sent out to employees on Friday, Wal-Mart CEO Doug McMillon announced that 450 employees would be cut from headquarter operations. (Tweet this)
"As a leader, these are some of the toughest decisions to make," he wrote. "While difficult, I believe changes will help us become a more nimble organization that serves customers better."
Shares of Wal-Mart were down more than 1 percent after the news.
Big layoffs may signal end of expansion: Challenger
The cuts at the Arkansas offices are part of a reorganization of the retailer's management structure, the memo said. Due to "changing customers and retail" the CEO said "we must change."
"We are grateful for their service," McMillon wrote. " Taking care of therm is a priority, and we are providing these associates access to services and resources that will help them find their next opportunity."
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5f5f6e97a857dfe071ad4e07b5e02f12 | https://www.cnbc.com/2015/10/02/west-and-mideast-slam-russia-over-syria-airstrikes.html | West and Mideast slam Russia over Syria airstrikes | West and Mideast slam Russia over Syria airstrikes
A coalition of Western and Middle Eastern states have denounced recent Russian military action in Syria as the Kremlin announced it was making plans for a prolonged campaign in the war-torn country on Friday.
Speaking to French radio station Europe 1, the head of Russia's foreign affairs committee said its airstrike campaign in Syria could last three to four months and was likely to intensify, Reuters reported.
French President Francois Hollande welcomes Russian President, Vladimir Putin prior to their meeting at the Elysee Presidential Palace on October 02, 2015 in Paris.Thierry Chesnot | Getty Images
Russia's defense ministry claims to have hit 12 ISIS targets after sending out 18 deployments over 24 hours, destroying terrorist camps, command points and communications hubs in the regions around Idlib, Hama and Aleppo.
Meanwhile, a joint declaration by the U.S., U.K., France, Germany, Qatar, Saudi Arabia, Turkey called for an "immediate" halt to all Russian military intervention which they say have yielded civilian casualties.
"These military actions constitute a further escalation and will only fuel more extremism and radicalization," the statement posted on the Turkish foreign ministry website read.
"We call on the Russian Federation to immediately cease its attacks on the Syrian opposition and civilians and to focus its efforts on fighting ISIL."
Russia has coordinated its attacks with the Syrian army — a move that's pitted the country against Western allies which have backed Syrian rebels and called for the resignation of President Bashar Assad, who's been accused of launching chemical attacks on his own people.
Russia strikes in Syria: Why you should be worried
But a Thursday press release from the Russian Ministry of Defense claims to have taken significant precautions in avoiding strikes against civilians.
"To prevent engagement of civil population, the targets for the Russian aviation are assigned only outside inhabited areas and only on the basis of confirmed reconnaissance data received from multiple sources," the ministry's release read.
The statement was accompanied by a video purportedly capturing a number of strikes that killed terrorist "staff," destroyed an ammunition depot in Idlib, as well as a three-story headquarters in Hama.
The news was set to cast a shadow over talks between Russian president Vladimir Putin, Ukranain President Petro Poroshenko , German Chancellor Angela Merkel and French President Francois Hollande in Paris Friday.
Some analysts suspect Russia may be using Syria to distract international attention away from Ukraine and could eventually bargain its way towards an easing of sanctions, which have held strong since Russia's annexation of Crimea last year.
VIDEO3:2703:27Russia is a ‘master of dissembling’: ExpertWorldwide Exchange
Alan Mendoza, executive director on Russia and Syria from the Henry Jackson Society told CNBC's Worldwide Exchange Friday that the Russians were outright lying about their operations in Syria, which is targeting everyone opposed to President Assad's regime rather than ISIS alone.
But what's perhaps more worrying is what could go wrong between international forces.
"The idea of coordination is going to prove increasingly difficult," Mendoza said.
"I think we run the risk of a terrible accident happening where one allied nations if you like takes out another who's engaged in fighting terrorist activities," he explained.
It's unclear what sort of retaliation a military "accident" would spark. But coalition forces are unlikely to back out and have a "responsibility to protect" Syrian citizens facing "genocide," Mendoza said.
Reuters contributed to this report
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1382be48b404577c382163859b08c88a | https://www.cnbc.com/2015/10/02/what-to-expect-from-the-september-jobs-report.html | What to Expect From the September Jobs Report | What to Expect From the September Jobs Report
VIDEO1:3201:32Wall Street looks ahead to Sept jobs reportstocks
At 8:30 a.m. Eastern, the Labor Department will report its latest figures on hiring and unemployment for September.
After employers added a disappointing 173,000 new jobs last month, analysts are hoping that gains will at least top the 200,000 mark as the economy heads into the final quarter of 2015. The jobless rate is expected to hold at 5.1 percent
This is what you should watch for:
A "Now Hiring" sign is shown at an exhibitor’s table at the Columbus Career Fair in Columbus, Ohio.Ty Wright | Bloomberg | Getty Images
More from The New York Times:Putin Plunges Into a Caldron in Syria: Saving Assad Obama Condemns 'Routine' of Mass Shootings PopeWasn't Endorsing Kentucky Clerk, Vatican Says
■ Significant wage gains have remained hard to come by.
The best evidence of a tightening labor market is rising wages, but despite the steadily falling unemployment rate in recent months, significant wage gains over time have been hard to come by.
The 0.3 percentage point increase in average hourly wages in August was a welcome bright spot given the anemic growth in jobs. That showing pushed average hourly wages up 2.3 percent from a year ago.
Why the Fed may raise interest rates in October: Strategist
Maintaining that upward momentum would make the Federal Reserve, which is considering when to raise its benchmark interest rate, as well as American workers feel a lot better about the economy's direction.
■ Despite the previous month's sluggishness in hiring, there could be bright spots.
Hiring has been particularly strong, said Andrew Chamberlain, chief economist at Glassdoor Economic Research, in industries like professional and business services, health care, and travel and leisure (where automation cannot take the place of servers and maids).
The need to collect, manage and report information, along with the expansion of mobile apps in health care and other sectors, is also fueling job growth in the technology sector.
■ Chances are also good the previous month's figures will be revised up.
Because of unpredictable seasonal variations, the Labor Department has historically tended to lowball the initial employment estimates for August only to revise them up later on.
Over the last five years, the revisions have on average added another 77,000 jobs, according to High Frequency Economics. That pattern also holds true for the September figures, although the revised increases have tended to be much smaller.
■ Jobs in the private sector do not necessarily translate to public sector hiring.
After a pickup in public sector jobs in August, several labor economists are continuing to look for additional increases in September.
There are roughly 381,000 fewer public sector jobs now than there were before the start of the recession in 2007, said Elise Gould, an economist at the Economic Policy Institute, a labor-oriented research organization in Washington. Add in the normal growth that would be needed to keep pace with an expanding population, Ms. Gould said, and there is a public sector jobs gap of 1.7 million.
The generally sluggish recovery in the public sector — the result of continuing austerity in many cities and states throughout the country —has particularly hurt blacks, who occupy a disproportionate share of those jobs.
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5057ee94debcd917bf5472c40573de2a | https://www.cnbc.com/2015/10/02/whats-next-for-stocks-after-disappointing-jobs-report.html | Trader Talk | Trader Talk
VIDEO2:5902:59Pisani's market open: Banks weak after jobs
So much for bad news is good news.
S&P futures dropped 20 points, and bond yields slipped as nonfarm payrolls came in at 142,000, well short of expectations of 200,000. But the real killer was notable downward revisions in July and August.
Read More Jobs report signals Fed on hold until 2016
Not to mention, hourly earnings were flat.
So what do traders do? They will likely do what they have been doing for the past six weeks or so: nothing. After lowering exposure dramatically, most traders have exhibited no interest at all in increasing exposures, even though the is down about 13 percent from its high on May 21.
My friend Jeff Saut at Raymond James highlighted exactly the dilemma investors are facing in October: "The portfolio managers basically wanted to be 'flat' because if they make a 'big bet' right here and they are wrong, not only do they have performance risk, but also bonus risk and ultimately job risk at year end."
This has led to many days where I have complained of a lack of bids, days during which the market sees normal volume, but stocks drift lower because there is not enough buying interest to sustain even normal selling pressure.
Read MoreDow falls triple digits on jobs miss; financials down 2.5%
A market where buyers are on strike has a different "qualitative" feel than a market in which there is a sellers' panic, but regardless. The old trader saying is right: You can go broke on low volume.
So this report will only add to the unwillingness to increase exposures.
Remember, one of the arguments for the bulls was that the United States was an island of modest growth in a global economy with relatively flat growth. This may change some of that dynamic.
Bears are already out arguing that the Federal Reserve should not only hold rates steady, but that it may have to begin QE4 if the data doesn't improve.
Read MoreJobs report signals Fed on hold until 2016
That's certainly premature. The consumer is doing well, with strong growth in housing and autos. And consumer confidence has been strong.
As for the idea that the Fed has failed, I tend to believe that the limits of accomodative monetary policy have already been reached. The Fed never claimed that accommodative policies would cure all the ills of the world.
I'm in the camp that the Fed missed its chance to raise several months ago.
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9bd1c3451a7d29239b3093dca62ed1d9 | https://www.cnbc.com/2015/10/02/why-a-weak-jobs-report-could-jar-stocks.html | A positive Friday could put stocks near breakeven for the week, after another series of volatile swings. A gain by the would give the index a four-day win streak for the first time since January. (CNBC)
Bill Ackman's Pershing Square Holdings fund , pushing the hedge fund down about that much for the year, after one of the major holdings Valeant (VRX) tanked. (Reuters)
Oil prices were higher this morning, after surging 4 percent in early trading Thursday before giving up those gains. The volatility can be partly attributed to a strain on U.S.-Russia relations over Syria. (Reuters)
Joaquin was stalled over the Bahamas today. But the powerful hurricane appears to be on track to head out to sea afterward, likely missing the East Coast. But another storm is set to bring heavy rain anyway. (NBC News)
At least 10 people were killed and seven others were injured when a gunman who demanded to know his victims' religions opened fire Thursday on a community college campus in southwest Oregon. (NBC News)
During a televised statement following the school shooting, President Barack Obama took those who oppose gun limits to task, saying their answer to such tragedies is more guns, not fewer. (NBC News)
T-Mobile US (TMUS) customers, some 15 million, were victims of a at credit reporting agency Experian. The hack occurred from September 2013 through last month. (Reuters)
Over a billion Android devices could be at risk of being hacked by listening to an audio file or watching videos, because of a new bug in Google's (GOOGL) mobile operating system. (CNBC)
Sprint (S) plans to cut as much as $2.5 billion in costs over the next six months. The Wall Street Journal quoted an internal memo, saying and an external hiring freeze would be put in place.
The top U.S. executive at Volkwagen is set to testify next week before a congressional panel about the German automaker's emissions cheating involving 11 million vehicles worldwide. (Reuters)
With its stock still wobbly after hitting an all-time low Monday, commodity giant Glencore fought this week to reassure investors, employees and counterparties, with mixed results. (CNBC)
Health insurers because patients covered through Obamacare last year were sicker than expected, according to new government figures. (AP)
Treasury Secretary Jack Lew said the federal debt ceiling is expected . In a letter to lawmakers, he wrote the government would likely have less than $30 billion in cash at that point. (CNBC)
In his new memoir released Monday, former Fed Chairman the September weekend in 2008 when regulators sought desperately but in vain to save the investment bank Lehman Brothers. (AP)
Bernanke joins CNBC's "Squawk Box" for one hour on Monday, starting at 8 a.m. ET, to talk about the extraordinary measures taken in the aftermath of the financial crisis and the exit plan for the current Fed.
In addition to the jobs report, the government releases August factory orders at 10 a.m. ET. Economists see a 1.2 percent decline, following a 0.4 percent increase in July.
Seven Fed-related speeches are scheduled at various times today and tomorrow, including Friday addresses from Philadelphia Fed President Patrick Harker, Boston's Eric Rosengren, Minneapolis's Naryana Kocherlakota, Cleveland's Loretta Mester, St. Louis's James Bullard, and Fed Vice Chair Stanley Fischer. On Saturday morning, it's New York Fed President Bill Dudley's turn.
No major companies report earnings today, but late Thursday, Micron Technology (MU) beat on profit and revenue estimates. The chipmaker expects demand to stabilize in the near term and then improve next year.
Advanced Micro Devices (AMD) plans to cut its workforce by 500 jobs, or about 5 percent, and take a restructuring charge of $42 million. The maker of semiconductors expects to save about $58 million next year.
Nordstrom (JWN) announced a special dividend of $4.85 per share, and the retailer also unveiled a new $1 billion share repurchase program.
Bank of America's (BAC) Merrill Lynch unit must face a class action shareholder suit for the firm's role in the 2014 buyout of Zale by Signet Jewelers, with investors claiming they were short-changed.
Novartis (NVS) received FDA approval for a biosimilar copy of Amgen's (AMGN) best-swelling Enbrel rheumatoid arthritis drug.
Moon Express, a startup that wants to mine the lunar surface for rare and precious metals, took one step closer to making its plans a reality, signing a deal for three robotic moon craft launches starting in 2017. (CNBC)
The U.S. Postal Service released today new "A Charlie Brown Christmas" stamps in celebration of the upcoming 50th anniversary of the classic TV special, which originally aired on Dec. 9, 1965. (USA Today)
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74be194099a20656bdd80258ff2fda25 | https://www.cnbc.com/2015/10/02/why-the-fed-may-raise-interest-rates-in-october-strategist.html | Why the Fed may raise interest rates in October: Strategist | Why the Fed may raise interest rates in October: Strategist
VIDEO2:2602:26Safer to hike rates sooner: ProSquawk Box
Market conditions and stabilizing economic data could lead the Federal Reserve to raise interest rates this month, JPMorgan Asset Management's David Lebovitz said Friday.
Few investors are betting the Fed's policymaking committee will begin lifting its benchmark so soon, in part because there is no press conference scheduled following its October meeting. The CME FedWatch tool—which tracks market reaction to potential changes to the fed funds target rate—showed an 11 percent chance that the Fed will hike in October.
Lebovitz said the Fed could be comfortable acting if it sees some stability in U.S. economic data.
"When I think about the Fed and the way they're going about this is it's much more about rate of change than the level that we're sitting at, and coming into that September meeting, the U.S. data was decelerating, particularly the data that's exposed to international markets," he told CNBC's "Squawk Box."
Read More
At its September meeting, the Federal Open Market Committee left rates near zero, where they have been since December 2008. Chair Janet Yellen said the committee wanted to see further evidence of labor market improvement and progress toward the Fed's 2-percent inflation target.
She also cited concerns about economic slowdown elsewhere in the world.
Lebovitz said he believes the Fed is mostly concerned about slowing growth and monetary policy overseas because they are putting upward pressure on the dollar, which in turn puts downward stress on inflation.
He also warned that market liquidity is typically low in December, so it could be safer to hike in October. Market reactions tend to be more dramatic during periods of low liquidity.
The Fed has not historically begun a tightening cycle in December, Citi Private Bank Steven Wieting said on "Squawk Box." He added that it would be hard to imagine central bankers will get all the ingredients they want in December that were not present in September.
Read More
The global chief investment strategist said an October rate hike is possible, but probably unlikely. Given the uncertainty around the world, he questioned how much clearer the economic picture would be for the Fed by the end of the month.
The fact that the central bank has expanded its focus beyond inflation and employment to overseas economic conditions has created uncertainty, he added.
"Unfortunately, the Federal Reserve can tell us everything about how they will react to domestic economic data, but they have this issue of elsewhere, which is completely open," he said.
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369a9f2ac861a69e95d27d86d0df0f70 | https://www.cnbc.com/2015/10/02/your-first-look-for-monday-october-5.html | VIDEO1:1301:13Final Trades: Citi, Tesla, energy & more Fast Money
The "Fast Money" traders revealed what's on their Monday watch list.
Tim Seymour had Citigroup on his radar.
Steve Grasso was looking at the Energy Select Sector SPDR Fund.
Dan Nathan was bullish on the .
Guy Adami was positive on Tesla — a stock he thinks will rally next week.
Trader disclosure: On October 2, 2015, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Tim Seymour is long AAPL, BAC, CLF, DIS, F, FCX, GE, GM, GOOGL, INTC, JPM, KO, LGF, T, TWTR, Tim's firm is long BABA, BIDU, MCD, NKE, NOK, SBUX, YHOO. Dan Nathan is long PYPL Oct call calendar, BA Oct put spread, INTC Oct put spread, QQQ Oct put spread, UAL Oct/Nov put spread, XLP Nov calls, XLU call spread, TWTR, PG. Steve Grasso is long AAPL, BA, BAC, CC, DD, DIS, DECK, EVGN, FIT, KBH, MJNA, MU, PFE, PHM, STRP, T, TWTR, GDX firm is long BP, COP, CVX, FCX, NE, NEM, OXY, RIG, kids own EFA, EFG, EWJ, IJR, SPY. Guy Adami is long CELG, EXAS, INTC, Guy Adami's wife, Linda Snow, works at Merck.
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a7dd65d99d03c79344144916220034e1 | https://www.cnbc.com/2015/10/03/brazils-president-takes-steps-on-austerity.html | Brazil’s president takes steps on austerity | Brazil’s president takes steps on austerity
President Dilma Rousseff of Brazil announced Friday that she was cutting her salary by 10 percent, reducing the size of her cabinet and slashing thousands of coveted jobs for political appointees in an effort to build support for broader austerity measures as she grapples with calls for her ouster.
Dilma Rousseff, president of BrazilUeslei Marcelino | Reuters
The moves by the beleaguered leader, which reduce the number of cabinet ministries to 31 from 39 and extend the pay cut to the vice president, Michel Temer, and all of her ministers, reflect how Ms. Rousseff is scrambling to reassemble a fragmented coalition as her governing Workers Party reels from a bribery scandal involving Petrobras, the national oil company.
Economists contend that Ms. Rousseff's actions will result in largely symbolic savings, because Brazil's budget deficit has ballooned amid a severe economic crisis. After the pay cut, her salary will be about $90,000 a year. Other presidents in the region have pursued similar reductions, with President Evo Morales of Bolivia cutting his salary in half after taking office in 2006.
With Ms. Rousseff facing dismal approval ratings and calls for impeachment, the overhaul might buy her some time to rebuild influence, political analysts said. Behind the scenes of the shuffle, her powerful predecessor, Luiz Inácio Lula da Silva, is reasserting his sway by placing a confidant, Jaques Wagner, as Ms. Rousseff's chief of staff. At the same time, the centrist Brazilian Democratic Movement Party, which controls both houses of Congress, is boosting its own power by now occupying seven ministries, up from six.
Where next for Brazil as real hits new record low?
The party, a pillar of Ms. Rousseff's frayed coalition, is "110 percent satisfied" with the changes, Kátia Abreu, the conservative minister of agriculture, told reporters. "There's even some fat left," she added, emphasizing that more cuts could be made.
By ceding more power to the party, called the P.M.D.B., Ms. Rousseff is seeking to build support in Congress for the approval of contentious spending cuts sought by her finance minister, Joaquim Levy. Leaders of the P.M.D.B., which is also grappling with fallout from the Petrobras scandal, have tried to obstruct austerity measures on several occasions this year.
More from the New York Times:
Brazilian protester shot for knocking officer's cap off Guatemala: Hundreds missing after landslide Mexico, signaling shift, extradites drug kingpins
Ms. Rousseff's standing in Brasília, the capital, may have also been strengthened after Eduardo Cunha, the conservative House speaker and a leading critic of her government, found himself on the defensive this week after Swiss officials confirmed the existence of secret bank accounts controlled by Mr. Cunha.
Moody's cuts Brazil rating but says investment grade is safe
Mr. Cunha, a leading figure in the P.M.D.B., is battling accusations that he accepted as much as $40 million in bribes for himself and his allies. While Mr. Cunha has rejected calls for his resignation, he has the power as House speaker to decide on requests to start impeachment proceedings against Ms. Rousseff. Mr. Cunha declined to comment on the reports of his Swiss accounts on Friday.
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fb8a0f5092e13d89be0528330746b0dd | https://www.cnbc.com/2015/10/03/imf-mission-to-ukraine-promotes-eurobond-sale.html | IMF mission to Ukraine promotes eurobond sale | IMF mission to Ukraine promotes eurobond sale
The International Monetary Fund (IMF) logo is seen at the IMF headquarters building in Washington.Yuri Gripas | Reuters
An International Monetary Fund mission said on Saturday after discussions with Ukraine that authorities look forward to broad participation of eurobond holders in the recently launched debt exchange.
The mission chief for Ukraine, Nikolay Gueorguiev, said due to a larger-than-expected economic decline in the first half of the year, the mission revised growth projections for 2015 to negative 11 percent.
Growth is expected to reach 2 percent next year, Gueorguiev said in a statement.
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3e0dc71bf9be49f062d2bb7e3e0dd904 | https://www.cnbc.com/2015/10/03/jack-dorsey-is-ready-to-save-twitter.html | Why Jack Dorsey Is Ready to Save Twitter | Why Jack Dorsey Is Ready to Save Twitter
Jack Dorsey, CEO of Twitter.John Chiala | CNBC
On a fall day in 2010, Jack Dorsey stepped before his staff at Square, his payments startup, to deliver a pep talk at its weekly all-hands meeting. He was dressed in a rakish dark Prada suit and tie that was much more Don Draper than Silicon Valley wunderkind. Just two years earlier, Dorsey had been ousted from his CEO role at Twitter, where he failed to delegate effectively, motivate sufficiently or inspire trust in his leadership. Now, he appeared to be a transformed man, not only in appearance, but in vision.
Dorsey waxed on about the Golden Gate Bridge — its flawless design, its remarkable engineering and its unwavering utility. He contrasted it with the pedestrian Bay Bridge and its narrow lanes — an eyesore compared with its more charming neighbor.
"A lot of people in our industry, this is what they're building," he said. "It's terrible."
"We want to design the beautiful," he said with a nod to the Golden Gate, "and build the impossible."
He then laid out in clear and confident terms, according to those who attended, what his role was in making sure that happened.
Read MoreSacca: I expect immediate Twitter board turnover
"I think I'm just an editor, and I think every CEO is an editor," he told the room of about 30 executives, engineers and staffers. "I think every leader in any company is an editor. Taking all of these ideas and you're editing them down to one cohesive story. … We have all these inputs, we have all these places that we could go — all these things that we could do — but we need to present one cohesive story to the world."
Several former employees of Square point to that talk as the birth of a new Jack. Not a final version, but a coming-out party of sorts for a brilliant design and technical mind who was re-energized and ready to transform into a leader after a humiliating ouster from Twitter.
More from Re/Code:
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Now Dorsey, at 38, finds himself leading not one but two big companies. He plans to remain CEO of Square, which is slated to go public this year even as he is expected to be named the CEO of Twitter, a role he has held on a temporary basis since June. What some think is crazy, Dorsey believes to be fulfilling.
"It's exhilarating for him," one long-time confidante said. "He draws energy from how to think about both companies."
Whether by coincidence or design, Dorsey's comeback closely resembles the Steve Jobs Narrative — a modern myth Silicon Valley entrepreneurs hold up as a map to absolution. Like the Apple co-founder, Dorsey was the impetuous, petulant CEO pushed out by his allies. And after a soul-searching exile, he's welcomed back as the savior to a troubled enterprise. Even his line that every CEO is an editor is said to have been borrowed from Jobs.
What's so different about Dorsey now?
This time, the bitterness that marked his brief return to Twitter in 2011 as executive chairman and product czar appears to be gone. This time, he comes with the pedigree of having built from scratch a company — Square — that is on the precipice of an IPO. This time, according to more than 20 current and former colleagues Re/code interviewed over the past few weeks, Dorsey has grown up.
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From the start at Square, Dorsey was intent on smoothing over some of his rough edges, and perception, he learned, was everything.
In his first stint at Twitter, Dorsey would piss off some employees when he would leave ahead of them at night for yoga or drawing lessons, according to Nick Bilton's book "Hatching Twitter." Dorsey supposedly got back to work later at night, but people didn't know that. So at Square, Dorsey made a point of arriving early and staying late, especially when his employees were grinding away into the evening.
"He realized if it's perception, it becomes reality," a former employee said. "So he made sure the perception changed."
Also gone were the nose ring, the casual jeans and white T-shirts he rocked while at Twitter, replaced by sleek suits from Hermes and Prada. No one in Silicon Valley wore suits.
Some things changed slowly. Dorsey would become engrossed in a particular project and obsess over the smallest details, frustrating employees. These days, he picks his obsessions more carefully.
But over the next few months, Dorsey did something even his most fervent supporters weren't sure he had in him: He hired superstars and then delegated immensely.
And while he edited out some faults, others crept into his repertoire. When Dorsey saw star potential in a new employee, he pulled them into his inner circle quickly and rewarded them with a ton of responsibility. Such confidence can serve to build up young employees and inspire them to accomplish things they wouldn't have otherwise even attempted. But in several cases, the moves backfired, multiple sources said.
"It made people feel like Jack had a revolving door of his favorite people," one former employee during this time said. "They would say, 'You're Jack's favorite now, but it could change tomorrow.'"
And it did. Dorsey set expectations so high, and made them so widely known, that there was sometimes nowhere for these people to go but down. At least two of his one-time favorites left Square within a year of joining.
Over time, Dorsey has learned from these episodes, sources said, and has been helped by the recruitment of a team of senior leaders who sit between him and most divisions of the 1,200-person company. Twitter, Square and Dorsey declined to comment for this article.
A pope for the social media age
In some respects, Dorsey was backed into this position. In 2013, he faced one of his biggest crises at his new company when the COO, Keith Rabois, left following a sexual harassment claim from a co-worker. Rabois denied any wrongdoing and Square backed him on it, but he had become a distraction and was asked to leave the company despite how much Dorsey had relied on him. Rabois was seen as Dorsey's right-hand man, and many wondered how Dorsey would cope with the loss of someone who many viewed as the company's day-to-day operator.
But over the next few months, Dorsey did something even his most fervent supporters weren't sure he had in him: He hired superstars and then delegated immensely. He snagged Francoise Brougher, an under-the-radar but high-powered executive at Google, to build a sales team and push new revenue-generating products into market, and Gokul Rajaram, a highly respected Facebook product boss.
A year later he would add Alyssa Henry, from Amazon's AWS, and eventually handed over all product and engineering to her for the core merchant products business. Add that group to existing execs like CFO Sarah Friar, a former analyst with Goldman Sachs, and hardware boss Jesse Dorogusker. Suddenly, Dorsey had assembled perhaps Silicon Valley's deepest bench at a private company.
Hiring a top team — and trusting them — has had other benefits. It has given Dorsey time to burnish a reputation as a big thinker — the person who can predict a trend from 30,000 feet.
Whether intentional or otherwise, this approach freed him up to spend more time on the projects at Square that he was most passionate about — like the money-transfer service, Square Cash, and a new version of Square's flagship credit card reader that works with the chip credit cards that are becoming mainstream in the U.S.
In recent months, this structure has also allowed him to spend significant time at Twitter, even as Square has filed confidentially to go public. Execution, it's now clear, no longer halts when Dorsey is away from Square's office.
Dorsey has also learned to stop dallying too long on favorite projects that don't work, an issue that plagued Twitter during his time leading product in 2011. Square Wallet, Dorsey's dream to transform the way shoppers pay for stuff in stores by telling cashiers their names, never took off because there wasn't a good enough reason to use it instead of more traditional payment methods. A partnership with Starbucks also failed to distribute the technology as widely as Square executives had hoped. But it lived on for a few more years because it was Jack's baby.
When it was clear that Square Wallet's next incarnation, Square Order, an app that let people order things like coffee for pickup, wasn't working, Dorsey and the team killed it within 10 months.
Although Dorsey has not given up on the consumer market, he has also come to the realization that Square is a company primarily focused on building products for business owners, not shoppers, sources said.
He still pushes people hard, but not to a breaking point. One of his favorite words is "Why?" which can flummox employees who haven't worked closely with him and make them think he instantly doesn't like an idea. He loves to debate and challenge the answer to the "Why?" even if he agrees with a decision; one Twitter employee described Dorsey as liking to stir the pot. And when he eventually gets you to come around to his thinking, he will — often with a smile — let you know that he was right.
Beyond the slick suits and the trendy haircuts, flashes of the old, more impulsive Jack still remain.
In the spring of 2014, a Wall Street Journal article about Square raised questions about its financial footing and set off a wave of negative stories about Square burning through tons of cash. At the time, Re/code reported that Square was not looking for a buyer — Apple and Google had sniffed around — and any talks did not move further.
By August, with bad press piling on, Dorsey had had enough. He pushed the company to publish a screed titled "Top 10 Myths About Square." The move backfired, setting off another wave of bad press.
And then suddenly, Dorsey left San Francisco the next day and was discovered on Twitter to be on the ground in Ferguson, Mo., near his hometown of St. Louis, where riots had broken out after the shooting by a white police officer of an unarmed black man. There was Dorsey, the billionaire CEO, marching with protestors and tweeting Vine videos along the way. Some employees were furious with his decision to skip town in a moment of crisis. But a surprising amount of the company was understanding, several insiders said. The feeling among his supporters was this was Jack doing what Jack thought was the right thing, no matter what anyone thought.
"A lot of people work at Square because they really believe in him and the ethics of the company," one long-time former employee said. "I can't say I joined Square because I wanted to save the world. But there are hundreds of people at Square right now who could be working anywhere, and they choose to stay because Jack is the kind of CEO who was tweeting from Ferguson."
VIDEO2:5002:50Dorsey right guy for Twitter but...Squawk Alley
Since June when Dorsey stepped back in to lead the company he co-founded, he has owned the role despite the "interim" in his title. There is no single explanation for why Dorsey's current run at Twitter feels like the real deal, but it does. Insiders are swept by the way he talks about the product. Dorsey emails frequently with the entire staff, sometimes multiple times a day to talk about what he loves about Twitter and where he sees things going.
He seems to be a completely different man than the one who returned to Twitter in March 2011 as executive chairman and product czar. Former colleagues recall a man looking for payback for his 2008 ouster; loyalty was key, and many who were loyal to Twitter's other co-founder, Ev Williams, were booted from the company. Back then, Dorsey would routinely sit in on meetings without saying a word. When he did speak, his contributions were so abstract that few understood what he was talking about. In some cases, he'd simply write a single word or two up on the whiteboard.
He no longer sits silently in meetings — current colleagues say he provides the kind of direct, constructive feedback you'd expect from someone with Dorsey's reputation as a product guru. There's still some fear that Dorsey will send people packing, but the chip on his shoulder appears to be gone. Even Twitter co-founder and good friend Biz Stone said something has changed with his friend in the last few years at Square.
"I feel like he went into a time chamber and studied for 40 years and came out after one," Stone said. "It's like, what happened? Where did you get all this confidence and great answers and specificity? He seems to be much deeper now. It's like talking to a much older person."
Beyond new communications skills, the new Jack Dorsey has also demonstrated a willingness to make big shot calls. People within the company have discussed the idea of tweaking how Twitter measures its 140-character limit by removing things like links and user handles from the count, according to sources, a discussion that has been ongoing for years but has resurfaced in recent months. (Dorsey is a supporter.) He even signed off on a separate project that would allow Twitter users to publish content longer than 140 characters, either in a tweet itself or appended to it in some way.
Taken together, these moves, which may appear subtle to outsiders, symbolize a radical departure for a company born a year before the launch of the first iPhone and in an era when text messaging was the dominant form of communication. It's clear Dorsey is not tied to the company's legacies, even one as sacred as Twitter's 140-character limit. Many insiders believe that only someone with the confidence of a founder could make these decisions to break from the past.
Dorsey is already acting the part in other ways, too. He restructured Twitter's product team just two months into his new role, promoting former Crashlytics CEO Jeff Seibert to ensure there was someone responsible for the core product day in and day out. Ownership over projects has been an issue at Twitter in the past. The company has more than 4,000 people and some believe it has grown too fast. Insiders say that it isn't always clear who is responsible for what. At times, it can feel scattered, like there's a lack of focus.
"Twitter had a massive lack of accountability or decision-making structure under the CEO level," according to one insider.
Dorsey has brought with him a sense of urgency as well, giving Seibert a matter of weeks to decide which 10 product ideas Twitter will pursue and which will be shelved. "He loves constraints," a source said. "He loves the creativity and thinking and simplicity that comes out of it."
Juggling two gigs didn't work out so well for Dorsey the first time around in 2011. At the time, Dorsey was splitting time between Twitter and Square, which had just launched its first major product. He was also overseeing Twitter's major redesign known as T1 that introduced the Discover tab. It wasn't seen as a success. His role within Twitter ultimately didn't work, and he left in late 2012 to focus on Square full-time. "[T]he pace was exhausting, and he alienated some Twitter employees," is how a 2013 New Yorker profile put it.
This time, the stakes are even higher. Twitter is clearly in danger. Since going public in 2012, it has suffered numerous executive shuffles and stagnant user growth while its stock has fallen 40 percent from its close on IPO day. That's why Twitter's board once demanded that whoever took over would need to do so full-time.
Meanwhile, Square is gearing up to go public, and Dorsey will soon be on the road, leading Square's IPO roadshow, a potentially multi-week process where he will need to convince big-money investors to back a company in a notoriously tough sector that faces formidable, well-financed foes, including Amazon.
The good news for investors is that our sources — and we mean almost all of them — believe that if anyone can run these two companies, it's Dorsey.
He has always been meticulous about his schedule, and that has not changed in the last three months. Dorsey has a routine: mornings are spent at Twitter, afternoons at Square, and frequent stops at Blue Bottle are sprinkled in between, a small coffee shop nestled between Twitter's two lofty office buildings on 10th Street in San Francisco, less than 500 yards from Square's headquarters just down the block.
The proximity certainly helps, but it's Dorsey's skill set that gives most colleagues confidence he can do the job. Twitter has long struggled with user growth and adoption, issues that many believe stem from two things: The product and the message. These are two areas where Dorsey thrives.
No one has been thinking about the Twitter product longer than Dorsey, current and former employees say. He has transformed into a skilled communicator of a vision for Twitter from a product and corporate perspective. He has shown an ability to construct a strong management team, which he will need to rely on as he splits his time between the companies.
Back in 2010, Dorsey told his employees at Square that every CEO is an editor. Now the world will soon see how the Jack Dorsey Narrative plays out.
—By Kurt Wagner and Jason Del Rey, Re/code.net.
CNBC's parent NBC Universal is an investor in Re/code's parent Revere Digital, and the companies have a content-sharing arrangement.
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98044132914bef35eb0e64a3d9763f0a | https://www.cnbc.com/2015/10/04/asia-stocks-react-to-us-jobs-report.html | Asian shares rally on dovish Fed expectations | Asian shares rally on dovish Fed expectations
Asian equities kicked off the trading week on a positive note after a weak U.S. employment report on Friday cooled expectations that the Federal Reserve will start raising interest rates soon.
Markets in China remain closed until Wednesday for National Day holidays.
September's closely-watched jobs report showed the U.S. economy created 142,000 jobs, far below the expected 203,000. Unemployment held at 5.1 percent while the participation rate plunged to 62.4 percent, according to the Labor Department. Indications of softness in the labor market mean the Fed is unlikely to begin tightening monetary policy soon, analysts say. Fed funds futures are now pricing the first rate hike to come no earlier than March 2016.
Read MoreWill jobs miss push Fed back to easing mentality?
U.S. stocks closed more than 1 percent higher following the report, with major averages ending the week up more than 1 percent.
With China closed for holidays, there will be no [trading] direction for Asia for a couple more days, said Evan Lucas, IG market strategist, in a morning note. "But the conclusion from the U.S. nonfarm payrolls is that the China slowdown is spreading across the Pacific. This will only add to expectations that the People's Bank of China or central government will move monetary policy this year."
Traders also dismissed news that the World Bank downgraded its East Asia growth forecast to 6.5 percent for 2015, from 6.7 percent previously.
Nikkei up 1.6%
Japan's benchmark Nikkei jumped to a more than two-week high above the key 18,000 level, rebounding after posting a 1 percent loss for the week ending Friday.
Read MoreA rare Baer-ish call on Japanese stocks
Airlines benefited from higher crude oil prices, with Japan Airlines up 2.4 percent and All Nippon Airways ending 1.8 percent higher
The auto sector was in focus on expectations it could benefit from the Trans Pacific Partnership talks that continued over the weekend. If a deal is inked, it would give automakers a freer hand to buy parts for vehicles sold in the United States from Asia; Mazda Motor jumped 1.4 percent while Mitsubishi Motors lost over 2 percent and Toyota Motor inched down 0.1 percent.
VIDEO4:4104:41TPP deal will boost Japan: UBSCapital Connection
ASX rallies 2%
Australia's clinched a two-week high, recouping all of Friday's 1.2 percent loss thanks to a rally in the resources sector. However, volumes were 61 percent below their 30-day average due to the public holiday in New South Wales, IG warned.
BHP Billiton rallied 4 percent while Newcrest Mining and Evolution Mining surged 7.5 and 9 percent respectively on the back of higher gold and metal prices. Oil Search gained 1.5 percent after Woodside Petroleum CEO Peter Coleman said the firm was sticking to its $8.2 billion takeover offer.
The Reserve Bank of Australia holds a policy review on Tuesday but no action is expected.
Read More Asian central banks to hog this week's limelight
"The RBA is fraught with the dilemma of China/global headwinds amid spots of asset market bubbles. But despite persistent pressures on commodities, the RBA will not jawbone the Australian dollar given sharp corrections and risks skewed to more downside volatility," noted Vishnu Varathan, senior economist at Mizuho Bank.
Hong Kong adds 1.4%
Hong Kong's Hang Seng Index also rose to a two-week high, rising as much as 2 percent, as investors engaged in bargain hunting.
Casinos were the top gainers; Melco International and Galaxy Entertainment rallied 6 percent each while Wynn Macau added 5 percent.
Banks also outperformed, with Standard Chartered 2 percent higher while HSBC and Hang Seng Bank rose more than 1 percent each.
VIDEO4:0104:01Hong Kong shares pop 2% on MondaySquawk Box Asia
Kospi 0.4% higher
South Korea's benchmark Kospi index pared gains in afternoon trade but still ended at its highest level since September 18.
Automakers declined despite a survey from market researcher FnGuide predicting improved earnings for the sector during the third quarter; Hyundai Motor and Hyundai Mobis fell more than 1 percent each while Kia Motors lost over 2 percent.
Emerging markets gain
Indonesia's Jakarta Composite surged nearly 3 percent to a two-week high, while stocks in India, Thailand and the Philippines added 1 percent each, tracking Asia-wide gains.
—Evelyn Chang contributed to this report.
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79cd2913e2cd4cbd30f7bbf6f90461c0 | https://www.cnbc.com/2015/10/04/australia-us-agree-on-pharma-bringing-tpp-deal-closer.html | Late delay as Pacific trade talks near landmark deal | Late delay as Pacific trade talks near landmark deal
Shipping cranes sit idle at the Port of Oakland on February 6, 2015 in Oakland, California.Justin Sullivan | Getty Images
A dozen Pacific nations closed in on a sweeping free-trade pact on Sunday in Atlanta but failed to finalize terms on the fifth day of round-the-clock talks, dashing hopes raised by an earlier breakthrough on protections for new biotech drugs.
U.S. officials, who are hosting the meeting, delayed a planned joint news conference until early Monday.
That pushed a resolution of the Trans Pacific Partnership (TPP) talks beyond the deadline set by Japan's economy minister Akira Amari. On Saturday, Amari had said the next 24 hours would be a make-or-break period for the talks.
VIDEO7:2107:21CABA: SEA businesses hope TPP, RCEP can co-existSquawk Box Asia
After five years of negotiations, many officials had described this round as the best chance for an agreement, so failure to strike a deal in Atlanta would plunge the future of the talks into uncertainty.
Australian Trade Minister Andrew Robb said the delay on Sunday came as other TPP partners reviewed the proposed terms of a compromise on the monopoly period available for drug companies that develop new drugs known as biologics.
New Zealand negotiators also pressed on Sunday for greater access to overseas markets for its dairy exports, people involved in the talks said. "The thing that's missing is (an agreement) on dairy market access," one official said.
The sudden stall in the pace of talks came after organizers had set up a platform in the conference center decorated with flags of the TPP delegations for the announcement of a deal. By Sunday night, a U.S. government website that had been scheduled to livestream the ministerial news conference was carrying a banner saying "delayed pending further notice".
On Sunday morning, Amari said he had called Prime Minister Shinzo Abe to notify him that a deal was within sight.
The TPP would lower tariffs and set common standards for 12 countries that represent a combined 40 percent of the global economy.
U.S. President Barack Obama has pushed for a deal as a way to open markets to U.S. exports, including financial services and pharmaceuticals. U.S. officials have also promoted the deal as a counterweight to China.
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The issue of protections for new biologic medicines like Genentech's Avastin cancer therapy has pitted the United States against Australia and five other countries.
The United States has pushed for longer monopoly protections for pharmaceutical companies to encourage innovation. Australia has countered that such measures would strain national healthcare budgets and keep life-saving medicines from patients who cannot afford them.
The United States provides 12 years of exclusivity for biologic drugs.
Australia has insisted on five years of protection to control healthcare costs.
A two-track compromise hammered out by Australia and the United States would set a minimum threshold of five years during which drug makers would have exclusive rights to clinical data behind new drugs while adding an additional protection of several more years as applications for competing drugs are reviewed, people involved said.
Under a second track, pharmaceutical companies would have eight years of exclusive rights to a new product outright in some countries, they said.
It was still unclear how that set of standards would influence pricing for future drugs. It was also unclear if other delegations, including Peru and Chile, would endorse the proposal.
Separately, the United States and Japan had reached agreement in principle on trade in autos and auto parts in talks that also included Canada and Mexico.
Read More
That agreement is expected to give U.S. automakers, led by General Motors and Ford, extended tariff protection against low-cost pickup truck imports from Asia, people briefed on the talks have said.
But it would also give Japan's auto industry, led by Toyota, a freer hand to source parts from Asia, including from plants outside the TPP-zone like China, on vehicles sold in North America.
A "rule of origin" would stipulate that only 45 percent of a vehicle would have to be sourced from within the TPP, down from the equivalent ratio of 62.5 percent under NAFTA, officials have said.
The announcement of a deal on Monday would mark the start of what could be a close-fought battle to ratify it in Congress.
Many Democrats and labor groups have raised questions about what the TPP would mean for jobs in manufacturing and environmental protections. Meanwhile Republicans, including Sen. Orrin Hatch, the powerful chairman of the Senate finance committee, have urged the administration to hold the line on intellectual property protections, including for drugs.
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43cc89b50a5a5d79e69708fe5f30b106 | https://www.cnbc.com/2015/10/04/chinese-still-spending-on-luxury-just-not-at-home-piaget.html | Chinese still spending on luxury, just not at home: Piaget | Chinese still spending on luxury, just not at home: Piaget
VIDEO0:4000:40Chinese spending big overseasWealth
China's luxury sector might be reeling from the twin blows of the government's anti-corruption drive and a weaker yuan but wealthy Chinese consumers haven't lost their urge to splurge, according to the CEO of high-end Swiss watchmaker Piaget.
Whereas in the past, China's well-heeled would have flocked to their usual haunts in Hong Kong and Macau, they are now heading elsewhere to shop, Philippe Leopold-Metzger told CNBC.
"Today's Tsim Sha Tsui has become Tokyo, Seoul and Taipei," he said, alluding to Hong Kong's famous shopping district.
VIDEO2:4902:49Change is in the air at Ralph Lauren: ProStreet Signs Asia
Hong Kong and Macau, traditionally the playground of wealthy Chinese, suffered from Beijing's anti-corruption crackdown on expensive gift-giving. Rising anti-mainland public sentiment and the pro-democratic protests in September last year also dimmed the allure of Hong Kong for Chinese tourists.
"The [Chinese luxury] market overall continues to grow, but it has shifted away from purchases in Mainland China and Hong Kong to foreign markets like Europe, Japan and Korea," said Brian Buchwald, CEO of consumer intelligence firm Bomoda.
Buchwald adds that 75 to 85 percent of Chinese consumers luxury spending originates outside of China.
Richemond Group, the Swiss luxury goods group that owns the Piaget brand, reported a 4 percent increase in sales at constant exchange rates for the five months leading to August. The boost to sales came largely from Europe, and was driven by Chinese tourist spending while abroad, reported Reuters.
Read MoreLuxury fashion puts on a brave face about China
According to a Bomoda report, Chinese consumers preferred to shop for luxury goods overseas because they were more confident of the branded good's authenticity. A belief that luxury goods sold abroad were superior to locally sold merchandise, as well as prices that were up to 40 percent lower due to the lack of Chinese import taxes, also helped spur purchases, Bomoda found.
"The challenge today is to track where [Chinese consumers] travel," said Leopold-Metzger, alluding to the way retailers must respond to the change in spending patterns.
Despite the decline in luxury goods sales, the Piaget CEO said the mainland remained one of the brand's priorities.
"There is a lot of wealth created every day in Asia, China and everywhere across the region," Leopold-Metzger noted, adding that Piaget was opening new stores in China where there was demand, and using sharper pricing strategies to attract domestic consumers.
"We have to create excitement," he said.
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c754cd83d535a5556f1c5d14e5b95928 | https://www.cnbc.com/2015/10/04/emerging-market-turmoil-flashes-warning-lights-for-global-economy.html | Emerging market turmoil flashes warning lights for global economy | Emerging market turmoil flashes warning lights for global economy
Emerging economies risk "leading the world economy into a slump", with lower growth and a rout in financial markets, according to the latest Brookings Institution-Financial Times tracking index.
Released ahead of the annual meetings of the International Monetary Fund and World Bank in Lima, Peru, the index paints a much more pessimistic outlook than the fund is likely to predict later this week.
Martin Barraud | OJO Images | Getty Images
According to Eswar Prasad of Brookings, weak economic data across most poorer economies has created "a dangerous combination of divergent growth patterns, deficient demand, and deflationary risks".
Christine Lagarde, IMF managing director, said last week that the global economic patterns were "disappointing and uneven" with weaker growth than last year and the forecasts published on Tuesday showing only a "modest acceleration expected in 2016".
The fund's reasonably sanguine view stems from an expectation that China will succeed in transforming its economy slowly from investment and manufacturing towards consumption and services.
By contrast, the Brookings-FT index, which summarises the latest figures, suggests the downturn is more serious alongside "sharp divergences in growth prospects between the advanced economies and emerging markets, and within these groups as well".
The Tiger index — Tracking Indices for the Global Economic Recovery — shows how measures of real activity, financial markets and investor confidence compare with their historical averages in the global economy and within each country.
The extreme weakness in the emerging market component of the Tiger growth index shows that data releases have been significantly weaker than their historic averages.
Divergence is almost as important as a new trend highlighted in the index, however, with India emerging as a bright spot and commodity importers such as Brazil and Russia mired in recession.
Because emerging economies are now much more important in the global economy and growth rates are still higher than their developed counterparts, global growth is still hovering around 3 per cent, close to its long-term average.
The concern, according to Mr Prasad is that the slump in emerging economies' confidence will infect advanced economist in the months ahead.
Despite weak employment figures on Friday, the US still appears a bright spot in the world economy alongside the UK.
More from the FT:
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Elsewhere, there are increasing calls for more stimulus from central banks to stop the slide in growth, whose impact is being felt more widely than in commodity exporting countries. But there are increasing concerns that monetary policy has become ineffective in providing the necessary boost, Mr Prasad said.
"The impotence of monetary policy in boosting growth and staving off deflationary pressures has become painfully apparent, especially when it is acting in isolation and when a large number of countries are resorting to the same limited playbook", he said.
Financial markets have begun to lose confidence in the ability of central banks to restore demand to the global economy, with equity markets in the third quarter posting the biggest losses for any equivalent period since the eurozone crisis of 2011.
While the IMF will recommend that countries maintain policies of cheap money, careful deficit-cutting to minimise the contractionary effects and deep structural reforms to boost the longer-term potential for expansion, such calls have been falling on deaf ears. Ms Lagarde is concerned that promises made at the G20 summit last year have already been broken.
"Few lessons seem to have been learnt and absorbed by national leaders, who continue to rely largely on the convenient but wobbly crutch of monetary policy," Mr Prasad said.
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fcb9e793a3ff3caa92595abf40726b79 | https://www.cnbc.com/2015/10/04/invetors-focus-on-boj-rba-policy-decisions-china-markets-closed.html | Asian central banks hog the limelight this week | Asian central banks hog the limelight this week
VIDEO0:5300:53Week ahead: All eyes on Japan, IMF, Fed
Central banks are back in the spotlight in the week ahead, with decisions on monetary policy due in Australia and Japan, amid expectations of a looming U.S. interest rate hike by year-end.
Policymakers down under will meet on Tuesday and analysts expect the Reserve Bank of Australia (RBA) to stand pat on its benchmark interest rate. All 23 economists polled by Reuters see the RBA's cash rate unchanged at a record low of 2 percent, as a weaker Australian dollar provides support for the economy.
"Services exports, including tourism and education exports, have picked up and the lower currency is also beginning to discourage services imports. Net services exports have contributed more to gross domestic product (GDP) growth over the past year than resources exports, in a clear sign that the lower [Aussie dollar] is working," Paul Bloxham, chief economist for Australia & New Zealand at HSBC, wrote in a note.
Analysts at Moody's Analytics agree, adding that a further rate cut might no longer be necessary if the local currency remains on a downtrend.
"Financial markets have at least one more 25-basis-point interest rate cut priced in for the next 12 months. We think that as long as downward pressure on the currency remains, alongside continued improvement in the non-mining economy, further interest rate cuts will not occur," Moody's said in a note.
Read MoreJapan needs extra stimulus, says Abe adviser
Meanwhile, the Bank of Japan (BOJ) will likely maintain its expansionary monetary stance at the conclusion of its two-day meeting on Wednesday, despite a mixed bag of data releases in the previous week.
Industrial production unexpectedly declined 0.5 percent on-month in August, data unveiled last Wednesday showed, missing expectations for a rise of 1.0 percent.
Retail sales rose 0.8 percent in August from a year earlier, also below market consensus for a 1.1 percent annual increase. On the other hand, household spending increased 2.9 percent for the same month from a year earlier, beating Reuters' estimates for a 0.4 percent rise.
"I think all of these do not bode well but Japan is coming to a point where it is not able to do much easing in the next 6-12 months because of the lack of supply of bonds. There may be some calls for the BOJ to take action with another quantitative easing or a secondary budget on the fiscal side [but] either of those have a negligible possibility of happening," Jay Nelson, senior editor of Success Stories: Japan, told CNBC last Wednesday.
Torin Boyd | Bloomberg | Getty Images
Data on tap
Australia's trade performance is expected to deteriorate marginally in August, on course for its 17th consecutive monthly balance of payments deficit. The trade deficit, due Tuesday, likely widened to 2.55 billion Australian dollars (about $1.8 billion) in August, according to a Reuters poll, from 2.46 billion in the preceding month.
Japan's machinery orders, scheduled for release on Thursday, are seen rebounding back into positive territory after unexpectedly easing for two straight months in June and July. Core machinery orders likely rose 3.2 percent on-month, a Reuters poll showed, recovering from July's 3.6 percent slump.
Compared with a year earlier, core orders which are seen as a highly volatile but useful indicator of capital spending in the coming 6-9 months, are expected to gain 4.2 percent in August, way above the 2.8 percent increase in July.
Meanwhile, Japan's current account surplus is estimated at 1.22 trillion yen in August, narrowing slightly from July's 1.81 trillion yen which marked the country's largest current account surplus in five years.
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d6b44470d5e3109433a5ea7b6cfc14c7 | https://www.cnbc.com/2015/10/04/julius-baer-cuts-japan-stocks-to-neutral-says-no-more-boj-stimulus.html | A rare Baer-ish call on Japanese stocks | A rare Baer-ish call on Japanese stocks
A pedestrian holding an umbrella walks past an electronic board showing prices of Japan's Nikkei average in Tokyo.Yuya Shino | Reuters
Japan's efforts to kickstart its long-moribund economy spurred a nearly three-year-long stock rally, but some see signs that's hit its limit.
Julius Baer has taken its call on the market to neutral from overweight, with its investment bank last week saying it was selling its currency-hedged position in Japanese stocks, reducing the exposure in the discretionary portfolios the private bank manages for institutions and individuals. A hedged position would seek to counter the effects of a weaker yen on investors with a different home currency; a U.S. dollar investor, for example, would see a dent to unhedged yen-denominated gains when they were converted to the home currency.
Read More Japan's Q2 GDP revised up but pressure on Abe, BoJ remains
"After having been one of our favorite markets since Prime Minister Shinzo Abe and Bank of Japan Governor Haruhiko Kuroda took the helm in 2012 and 2013 respectively, the market is up 50 percent. The move in the yen from 95 to 120 over the same period of time has created positive earnings revisions, increased competitiveness, and increased dividend payouts," Mark Matthews, head of research at Julius Baer, said in an email Friday.
But in a research note also released on Friday, he noted: "There is little political desire to weaken the currency further." The bank believes the U.S. dollar reached its peak at 125 yen and its 12-month target is for the yen to strengthen to 118 against the dollar. This will bring an end to the earnings boosts from forex.
In addition, Japan's market is vulnerable to profit-taking, with foreign funds likely carrying profit there that they can use to offset losses in other markets, Matthews said. The risk aversion spurring those losses could also push up the yen, he said in a note last week. The yen typically benefits from fund flows seeking safe havens.
That's a view that runs counter to many analysts' expectations that the Bank of Japan (BOJ) is likely to introduce further stimulus, helping to weaken the yen.
Japan needs extra stimulus, says Abe adviser
In 2013, the BOJ launched the first "arrow" of Abenomics, or Abe's plan to push Japan's economy out of its decades-long deflationary slump, with a massive quantitative easing program that sent the yen sharply lower and boosted interest in stocks. With the country's economic data still painting a mixed picture, many analysts expect the BOJ will announce further asset purchases. Japan's wage growth has stalled, rising just 0.2 percent on-year in August adjusted for inflation, data released Monday showed.
"The immediate road ahead is rocky, due to external factors such as the uncertainty surrounding the Chinese economy and also internal factors such as a deterioration of consumer sentiment caused by the consumption tax hike" in April of last year, Societe Generale said in note last week. "We expect the government to re-accelerate its monetary and fiscal policies as soon as possible."
Others expect stimulus will boost Japan stocks.
Bernard Aw, IG market strategist, told CNBC last week that Japanese equities could be among the best performers within Asia in the October-December period, citing expectations of more stimulus, low valuations and solid corporate earnings.
But Julius Baer isn't alone in predicting the BOJ isn't preparing for another round of stimulus.
"A BOJ easing is highly unlikely," Kentaro Koyama, an economist at Deutsche Bank, said in a note last week.
Koyama noted that the BOJ already has its "hands tied" trying to maintain its existing quantative easing program of 80 trillion yen-worth of asset purchases per year.
"The BOJ does not have a wide range of options for a further easing," Koyama said, noting the BOJ may start having difficulty finding additional Japan government bonds to continue its asset purchases.
- Nyshka Chandran contributed to this report.
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13b2f436814d22386dd79e95b39e4c6e | https://www.cnbc.com/2015/10/04/junk-bond-market-like-a-slow-moving-train-wreck-strategist.html | VIDEO4:2104:21Junk bonds, slow moving train wreck: Pro Fast Money
Billionaire investor Carl Icahn has long warned about the dangers of the high-yield market. Now, those sentiments are being echoed by a top strategist at a major bank who called the market for riskier bonds a "slow-moving train wreck."
In an interview on CNBC's "Fast Money," Michael Contopoulos, head of high-yield strategy at Bank of America, called high yield credit a "big, big problem," and laid out the reasons why a turn in the credit cycle is currently underway.
The dramatic rout of commodity prices is having a spillover effect on corporate bonds, especially those linked to energy. Last week, ratings agency Standard & Poor's said the speculative-grade corporate default rate jumped to 2.5 percent in September, its highest level since 2013. That figure is expected to rise to nearly 3 percent by the middle of next year, S&P added.
Read MoreThe party is over for junk bond investors
"You're going to see defaults pick up," Contopoulos said. "This isn't just a commodity story, this isn't just metals and mining and energy. It's broader than that. And the fundamentals are as poor as we have seen them."
The has dropped nearly 5 percent in the past month, and is down more than 10 percent so far this year. On Friday, the ETF hit a 52-week low on an intraday basis.
Investors cut junk bond holdings as debt fears mount
The lower oil prices go, the more stress is being placed on the high-yield bond sector. Evidence is mounting that the outlook is unlikely to improve anytime soon. Last week, ratings firm Moody's said its high-yield Liquidity Stress Index fell in September amid a rash of energy company downgrades.
Meanwhile, in a recent note, Contopoulos wrote that 50 percent of sectors in Bank of America's high-yield index have had negative price returns for the past five months in a row. "That's the longest such streak since late 2008," he said.
A large part of the weakness over that period, he said, can be attributed to the end of the Fed's quantitative easing program.
The excess liquidity from the Fed's massive bond buying and super-low interest rates "have created an environment where high yield corporates have been able to gather funding at incredibly cheap levels," Contopoulos said. "At some point, unless you have meaningful earnings, you can't sustain incredibly high leverage indefinitely."
Since the Fed started tapering its bond purchases, Contopoulos said about $30 billion has flowed out of the high yield bond market. "Many of the weak hands have already been flushed out to the market, but that doesn't mean that you can't still have price loss," he said.
However, Contopoulos contended that the problem is much bigger than retail cash leaving the junk bond market. "This is fundamentals, and that actually, I would argue, is much worse, because it takes it from a technical story to a fundamental story."
As for when the train wreck could turn into a full-on catastrophe, Contopoulos said it's likely to be a slow-moving process. "I don't think this necessarily turns into a disaster overnight, it's probably death by a thousand cuts and a multi-year weakness in the asset class."
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88c68bbda0b3f32b5eb7b8283eb6acca | https://www.cnbc.com/2015/10/04/portuguals-center-right-party-wins-vote-but-shy-of-majority.html | Portugal's center-right party wins but uncertainty looms | Portugal's center-right party wins but uncertainty looms
Pedro Passos Coelho, Portugal's prime minister, greets a supporter during a political rally ahead of the election in Braga, Portugal, on Sunday, Sept. 27, 2015.Paulo Duartes | Bloomberg | Getty Images
Portugal's center-right government won an election that was a test of its tough austerity stance, but its failure to win a majority in parliament raises the prospect of political uncertainty.
Prime Minister Pedro Passos Coelho would be the first leader in Europe to be re-elected after imposing hardships on voters under international bailout packages that followed the start of the sovereign debt crisis in 2009.
Yet a minority government could unnerve investors in the Iberian country of 10 million. Not one minority administration has survived a full term in Portugal since the 1974 overthrow of the fascist regime installed by dictator Antonio Salazar.
Read MoreAusterity a vote-winner? This poll could be a shocker
VIDEO3:4703:47Why Portugal needs change
With 99.1 percent of parishes in the country counted, the ruling coalition had around 38.5 percent of the vote while Socialist challenger Antonio Costa had 32.4 percent. The final count will not be available until late on Monday.
Passos Coelho said he was ready to form a new government but suggested he may to have to compromise on policies.
"We interpret the results with a lot of humility," he said. "We failed to reach a majority in parliament."
The results showed the government with just 100 seats in the 230-seat parliament - well short of the 116 it would need for a majority - although the tally could rise slightly with the final result.
Costa, who has promised to ease austerity and deliver more disposable income back to families, said his party had failed to meet its goal of victory but he would not resign and the Socialists would stick to their policies.
"Nobody can count on the Socialists to support policies that go against the Socialists," he said. "There was a large majority of Portuguese who voted for change."
VIDEO2:4402:44Confident of support: Portugal Economy secretarySquawk Box Europe
The small Left Bloc increased its share to about 10 percent of the vote, while traditional Communists obtained 8.2 percent.
Antonio Barroso, senior vice president at the Teneo Intelligence consultancy in London, said political instability was set to rise.
"The good result of the extreme-left Left Bloc will force the Socialists to harden their stance towards the government, which does not bode well for political stability over the medium term," Barroso said in a research note.
The first hurdles could come with the presentation of the 2016 budget in coming weeks.
Passos Coelho's coalition raised taxes while cutting public spending, but argued during the campaign that the country was now finally beginning to see the fruit of the measures with a gradual return to growth after three years of recession.
The general election was the first since Portugal exited an international bailout last year. Victory for the government was unthinkable just a few months ago with polls giving a solid lead to Socialists who promised to ease back on austerity and give more disposable income back to families.
It comes amid signs that voters elsewhere in Europe appear resigned to austerity. In Greece, voters gave Alexis Tsipras a new mandate last month to implement tough measures he had once rejected; and in Spain, Prime Minister
Mariano Rajoy's People's Party leads polls before a Dec. 20 election.
Nicholas Spiro of Spiro Sovereign Strategy said the election underlined the weakness of the Socialist Party (PS) challenge in a country where unemployment remains high at 12.4 percent and many Portuguese have felt no benefit from the fledgling recovery.
"This election was a defeat for the PS more than anything else," he said.
President Anibal Cavaco Silva will have the task of naming the next prime minister after talking with all political leaders, which he is expected to start in coming days.
The constitution does not specify how the president should pick the winner, whether by the number of votes or the number of lawmakers elected to parliament. The son of a country doctor who grew up in Angola, Passos Coelho has once acknowledged that he wanted "to go beyond the Troika", that is demands by Lisbon's bailout creditors, to swiftly reconquer investor confidence.
Portugal's economy returned to slow growth last year after a three-year recession and is now expanding by 1.6 percent. Going into the election, investors were broadly confident that Lisbon would pursue its reforms. Portuguese bond yields held just above seven-week lows on Friday.
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9b596e1dce0ed94e60276f751e00b406 | https://www.cnbc.com/2015/10/04/us-crude-edges-above-4550-on-russia-overtures-us-rig-count.html | US oil settles up 72 cents, at $46.26 a barrel | US oil settles up 72 cents, at $46.26 a barrel
VIDEO0:3900:39Russia is ready to talk oil pricesOil
U.S. crude oil about 2 percent on Monday, bolstered by a rally in U.S. gasoline and Russia's willingness to meet other major oil producers to discuss the market.
Higher stock prices on Wall Street and a softer dollar provided further support to oil and other dollar-denominated commodities.
U.S. crude closed up 72 cents, or 1.6 percent, at $46.26 a barrel. Brent rose $1.20, or 2.4 percent, to $49.95 a barrel.
Read MoreRussia ready to meet OPEC to talk oil prices
Gasoline surged about 3 percent, helping drive up prices for both crude and other refined fuels.
"Fuel products are leading the way today though they also seem to be deriving their strength from the broader risk appetite contributed by the equities rally," said Pete Donovan, broker at Liquidity Energy in New York.
VIDEO2:0702:07Crude stuck in the mudPower Lunch
Russia, one of the world's top three oil producers, said it was prepared to meet OPEC and non-OPEC oil producers to discuss the market if such a meeting is called. A separate meeting between Russian and Saudi officials was being planned for the end of October, Russian Energy Minister Alexander Novak has said.
Moscow had been unwilling in the past to cut its oil output to support prices. Last November, it declined to cooperate with the Organization of the Petroleum Exporting Countries to defend market share.
Russian oil output hit a new post-Soviet monthly high of 10.74 million barrels per day in September, despite a drop in global crude prices to 6½-year lows in August.
Despite Monday's rally, some analysts braced for renewed pressure on oil prices from U.S. government data this week that could show further builds in crude inventories.
Read MorePutin brings geopolitical risk back into oil
Market intelligence firm Genscape reported a modest drop about 150,000 barrels on the week for inventories at the Cushing, Oklahoma storage hub for U.S. crude, traders who saw the data said.
That sparked concern among some that there would be builds instead of draws in Cushing when the U.S. Energy Information Administration reports weekly storage data on Wednesday.
The EIA said U.S. oil stockpiles in total rose nearly 4 million barrels the week ending Sept. 25.
"We still are bearish on oil given the excess in the market, and the time required to clear all the excess crude and oil products supply," Abhishek Deshpande, London-based analyst for French bank Natixis, told the Reuters Global Oil Forum.
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0bb946ba6f5c0ab4ce49cd97e931f5fe | https://www.cnbc.com/2015/10/04/volkswagens-uniquely-awful-governance-at-fault-in-emissions-scandal.html | Volkswagen’s ‘uniquely awful’ governance at fault in emissions scandal | Volkswagen’s ‘uniquely awful’ governance at fault in emissions scandal
Volkswagen's decision to nominate a long-serving executive as chairman has once more highlighted the carmaker's corporate governance and culture, which some experts argue were a root cause of the diesel-emissions scandal.
Top directors on Thursday announced that Hans-Dieter Pötsch, VW's chief financial officer since 2003, would become chairman in the coming weeks, filling the spot vacated by patriarch Ferdinand Piëch, who resigned in April.
Hans-Christoph Hirt, a director of Hermes Equity Ownership Services, an adviser to pension fund investors in companies including VW, said the appointment created a "serious conflict of interest".
"[Pötsch] was a key VW executive for more than a decade and under German law the management board has a collective responsibility . . . The lawyers will surely demand that he recuse himself from any supervisory board meetings when management's role is discussed," Mr Hirt said.
VW's response has been compared with the way Siemens dealt with a huge bribery scandal in 2006. For the first time in its 150-year history the German engineering conglomerate appointed an outside chairman (Gerhard Cromme from ThyssenKrupp) and chief executive (Peter Löscher from Merck in the US).
Together they transformed Siemens' culture and Mr Cromme took legal action against former Siemens executives for not stopping the bribery. "How is Mr Pötsch supposed to do that?" said Mr Hirt.
VW has admitted installing software in engines over several years so they passed laboratory emission tests but belched out dangerous nitrogen oxides when on the road. Martin Winterkorn resigned last month as chief executive, insisting he knew nothing of the cheating, which analysts fear could cost VW billions of euros in fines, lawsuits and recall costs.
Assisted by a US law firm, VW has launched an internal investigation and reported the wrongdoing to prosecutors.
However, governance experts argue the cheating was predictable because of VW's lax boardroom controls and peculiar corporate culture. "The scandal clearly also has to do with structural issues at VW . . . There have been warnings about VW's corporate governance for years, but they didn't take it to heart and now you see the result," says Alexander Juschus, director at IVOX, the German proxy adviser.
Even before the diesel scandal, VW's shares traded at a discount to other carmakers partly because of governance concerns.
A former chairman of a large German industrial company says "Germany has corporate governance problems but VW has long been uniquely awful".
A key weakness at VW remains the lack of diversity of opinion and expertise on the company's supervisory board, experts say.
The 20-member council of directors — whose membership is equally divided between shareholder and worker representatives — is responsible for hiring and firing executives, providing advice to management and monitoring their actions.
Yet 17 of the 20 members are either German or Austrian and the board of directors has only one truly independent voice — Annika Falkengren, chief executive of Swedish bank SEB.
VW emissions cheating scandal heading to Congress
The German carmaker is engulfed in the worst scandal in its 78-year history after it admitted to manipulating emissions test data on its diesel vehicles in the US and Europe.
Many of the remaining directors are representatives of the three largest shareholders — the Porsche and Piëch families, the State of Lower Saxony and Qatar.
In 2012 VW appointed Ursula Piëch — a former kindergarten teacher and the wife of Mr Piëch — to its supervisory board. Both have since resigned.
"VW's supervisory board is short of people with relevant experience and skills and — significantly — independence," Mr Hirt says.
External investors have only 12 per cent of the voting shares and therefore "can't change anything", according to Mr Juschus.
Directors at other German companies often meet investors but their access to Mr Piëch was very limited.
Volkswagen: Further risk investors may be overlooking
It wasn't always that way. Ten years ago VW's supervisory board still boasted external luminaries including Mr Cromme, the author of Germany's corporate governance code.
But Mr Cromme quit VW's board in 2006 when Mr Piëch used votes from workers to push through a trade unionist as head of personnel, against the wishes of some shareholder representatives on the board.
The influence of employees at VW remains far greater than at any other big German company.
The carmaker's response to the diesel scandal emissions crisis has been steered by a small committee of top directors and three of the five members are labour representatives.
More from the FT:
US extends diesel probe to other brands Strike fear as Fiat Chrysler deal spurned Müller straps in to save VW's reputation
Ferdinand Dudenhöffer, automotive expert at the University of Duisburg-Essen, describes Bernd Osterloh, VW's chief labour representative, as a kind of "co-manager" who now "dominates the supervisory board".
Because of a lack of suitable candidates among the shareholder representatives on the board, VW's interim chairman is Berthold Huber, a former head of the IG Metall trade union.
Although these cosy relations have some advantages — in times of crisis, management can more easily get the backing they need to push through changes such as cost cuts — critics say they represent a Faustian pact in which managers protect German jobs, in return for support.
VW has almost 600,000 employees but its management board is staffed entirely by men. Under Mr Piëch and Mr Winterkorn, decision-making at VW was highly centralised and more junior managers were frightened to speak their mind.
In the aftermath of the diesel-emissions scandal, Mr Osterloh has urged VW to create a culture where problems are "not concealed but are openly communicated to superiors".
Following his appointment as VW chief executive, Matthias Müller pledged to "develop and implement the most stringent compliance and governance standards in our industry".
Others recall that previous crises at VW — including a prostitutes and bribery scandal in 2006 — did not deliver real reform. "If VW doesn't change now then they will never do it. It really depends on the three big shareholders — whether they are willing to reform," Mr Juschus says. "I have my doubts."
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60d9d188dfb1e0bb6c01f83dcdd274ed | https://www.cnbc.com/2015/10/04/vw-board-meeting-wednesday-amid-emissions-cheating-scandal.html | VW to hold extraordinary board meeting Wednesday: Sources | VW to hold extraordinary board meeting Wednesday: Sources
VIDEO0:3000:30VW board huddles upBusiness Practices
Volkswagen's supervisory board will hold an extraordinary meeting on Wednesday at which finance chief Hans Dieter Poetsch is expected to be appointed as new head of the 20-member controlling panel, two sources said on Sunday.
Europe's biggest carmaker faces the worst business crisis in its 78-year history after it admitted cheating diesel emissions tests in the United States, with 11 million vehicles affected worldwide.
As well as appointing Poetsch, the board meeting on Wednesday will discuss the latest findings of VW's internal investigation which has already led to more than 10 suspensions of senior managers, a source close to the board said.
Poetsch was originally due to be named to the supervisory board at an extraordinary general meeting planned for November 9 but Volkswagen said on Thursday that would be pushed back.
At an internal company meeting last week at the VW headquarters in Wolfsburg, Poetsch described the situation as an "existence-threatening crisis for the company" albeit a surmountable one, the Welt am Sonntag newspaper reported.
Volkswagen took out full pages in the Bild am Sonntag and Frankfurter Allgemeine Sonntagszeitung newspapers, replacing what it said should have been an advert celebrating the 25th anniversary of German reunification with this message: "We will do everything possible to win back your trust."
VIDEO0:3800:38VW executives in the hot seat with CongressCongress
A survey by German market research firm Puls showed 41 percent of consumers see the brand as damaged for the long term, while 11 percent say they no longer want to buy a VW, the Frankfurter Allgemeine Sonntagszeitung reported.
Martin Schulz, the head of the European Parliament, said that the scandal would hit the German economy hard but the carmaker was likely to survive the crisis.
Chancellor Angela Merkel said she expected a limited impact on the German economy. "I believe that the reputation of the German economy, the confidence in the German economy is not so shaken that we do not continue to count as a good business location," she told German radio.
Read MoreVolkswagen's 'uniquely awful' governance at fault in emissionsscandal
Bild am Sonntag reported that several engineers at VW have confessed to installing the cheat software in 2008 when Ulrich Hackenberg, the suspended head of research and development at premium brand Audi, was still head of technical development at the VW brand. VW declined comment.
VW provided the first information on Friday allowing customers to find out if their vehicles are affected, and it needs to tell Germany's KBA watchdog by Wednesday when and how its cars will comply with emissions standards.
The day before, new Chief Executive Matthias Mueller will have his first opportunity to explain to an expected gathering of about 20,000 workers at a closed-door factory event how he aims to steer VW out of the scandal.
British Prime Minister David Cameron said he did not rule out re-examining subsidies for diesel cars, The Sunday Telegraph newspaper reported, while Italy will test about 80 diesel models produced by eight leading carmakers, financial daily Il Sole 24 Ore said.
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de1591f5823b091ea4c7a0d5dae4345e | https://www.cnbc.com/2015/10/05/10-global-hot-spots-hit-by-water-crises.html | The world's biggest risks | The world's biggest risks
Tippapatt | Getty Images
The combination of two hydrogen atoms and one of oxygen, H2O, is the elemental key to life on Earth. Yet global issues related to water — whether too much or too little of it, its quality and its accessibility, along with its impact on gender and geopolitics — have never been more critical to our planet and its 7.3 billion inhabitants.
Earlier this year the World Economic Forum declared water crises the greatest international risk. Worldwide, 2.5 billion people don't have access to safe water. Every day nearly 3,900 children die because of dirty water or poor hygiene, according to the World Health Organization.
Read about 10 hot spots across the globe that are being devastated by the most urgent water crises.
—By Bob Woods, special to CNBC.comPosted 06 October 2015
Dried mud and the remnants of a marina are seen at the New Melones Lake reservoir in California.Mark Ralston | AFP | Getty Images
Throughout California, its worst-ever drought has dried up lakes, parched farmlands, restricted water usage and contributed to massive wildfires that have incinerated wilderness and property while upending lives. A group of scientists recently published a report stating that along with cyclical weather, global warming has most likely intensified the drought by 15 to 20 percent.
Upon touring smoldering towns in northern California this month, Gov. Jerry Brown made the climate change connection. "There is no doubt that we need to de-carbonize our modern economy," he said. "This will smoke it out. Fires are not political. Climate change is not political. It is real."
A waterfall tumbles into a natural pool on the island of Raiatea in French Polynesia.Velvetfish | Getty Images
This hot spot — comprising nearly 4,500 islands across the southern Pacific Ocean and representing 11 countries, eight territories and Hawaii — has been dubbed by Conservation International as the epicenter of the current global extinction. Twenty-five of its 292 native bird species have gone extinct since European settlers arrived 200 years ago, and today 90 birds are threatened, along with scores of its 5,330 plant, mammal and marine species.
Worldwide, while fresh water holds more than 10 percent of all life, between 1970 and 2000, populations of freshwater species declined by 55 percent, compared with a decline of about 32 percent for both marine and terrestrial species, according to UN-Water, a United Nations agency.
2015: A boy carries a pot on his head as he moves through floodwaters in the Pura area of Nowshera District, northwestern PakistanFayaz Aziz | CNBC
In 2010, unprecedented monsoon rains flooded nearly one-fifth of Pakistan, killing close to 2,000 people and impacting 18 million overall. Since gaining independence from India in 1947, the country has witnessed more than 20 major floods, including last year's, which claimed at least 280 lives following the strongest post-monsoon-season storm ever recorded in Pakistan.
Beyond this fragile hot spot, from 2000 to 2006, a total of 2,163 water-related disasters — floods, tropical storms and tsunamis — were reported globally in the Emergency Disasters Database, killing more than 290,000 people, affecting at least another 1.5 billion and inflicting $422 billion of damage.
A Turkana woman carries water on her head before attending a drought and peace meeting in Lobei village of Turkana district in northwest Kenya.Thomas Mukoya | Reuters
In many parts of rural Kenya, women remain traditionally responsible for food preparation, care of animals, crop irrigation, personal hygiene of households, care of the sick, cleaning, washing and waste disposal. Such gendered division of labor, UN-Water states, deprives women and girls from opportunities to escape the vicious circle of poverty and disempowerment.
"Water challenges go beyond questions of access," said U.N. Secretary General Ban Ki-moon. "In many countries, girls are forced to drop out of school owing to a lack of sanitation facilities, and women are harassed or assaulted when carrying water or visiting a public toilet."
A man looks down over a pile of garbage along the banks of the Riachuelo River near Buenos Aires, Argentina. (File photo).Diego Giudice | Bloomberg | Getty Images
Argentina's Matanza-Riachuelo River, which flows 40 miles through Buenos Aires, is one of the world's most polluted waterways, ravaged for years by industrial waste, sewage and everyday garbage, creating a variety of serious health problems for the city's poorest people. A full cleanup, Greenpeace said, could take 30 years.
Access to safe, clean water for drinking, food preparation, agriculture and recreation presents a major global risk. According to UN-Water, every day 2 million tons of sewage and other effluents drain into the planet's waters, and every year nearly 3.5 million people die due to inadequate water supply, sanitation and hygiene.
Four-year-old Manjunath takes a bath while sitting inside a bucket outside his house in a slum in Mumbai May 23, 2014.Danish Siddiqui | Reuters
Nearly half of India's 1.2 billion people don't have access to toilets, especially in rural villages, UN-Water reported. The lack of sanitation there is the cause of 1 in every 10 deaths. The World Bank estimates that more than 20 percent of communicable diseases in India are related to unclean water.
Much of the world has made great strides in recent years to improve water sanitation. Since 1990, almost 1.9 billion people have gained access to an improved sanitation facility. Nonetheless, the U.N. estimates that 2.5 billion people — 15 percent of the world's population — still do not use an improved sanitation facility, and more than a billion practice open defecation.
Kuwait City, Kuwait.Planet Observer | UIG | Getty Images
Although Kuwait is one of the top 10 oil producers in the world, it has the least renewable water resources in the world and has experienced a more than tenfold increase in water consumption since 1970, according to the Kuwait Institute for Scientific Research. Desalination is becoming an unsustainable solution, estimated to cost a third of Kuwait's GDP by 2025 unless new technologies and energy sources reduce costs.
The tiny nation is hardly alone among its neighbors in facing water crises. At the recent World Water Week conference in Stockholm, Sweden, the U.N. Food and Agricultural Organization reported that all countries in the Near East and North Africa currently suffer from severe water scarcity, with extreme consequences for irrigated agriculture and food production.
Syrian refugee children drink water at Azraq refugee camp near Al Azraq city, Jordan, August 19, 2015. Azraq is the second largest Syrian refugee camp in Jordan with over 21,000 refugees.Muhammad Hamed | Reuters
At this month's World Water Week in Stockholm, Jordanian Prime Minister Abdullah Ensour said that his country — one of the most water-scarce in the world—is now under even more pressure due to the dramatic influx of refugees from its war-torn neighbors Syria, Iraq and Yemen. Solving the problem requires tapping into water sources shared by neighboring countries, not always an easy proposition anywhere.
There are 276 transboundary river basins in the world — 64 in Africa, 60 in Asia, 68 in Europe, 46 in North America and 38 in South America. With contentious issues around water quality and scarcity, so-called hydro-diplomacy is increasingly crucial but achievable. Nearly 450 agreements on international waters were signed between 1820 and 2007.
Labors connect the pipeline of emergency water source located under a street in Liuzhou, Guangxi Zhuang Autonomous Region of China. (File Photo).ChinaFotoPress | Getty Images
The ongoing building of megacities throughout China points to the stressful relationship between water and energy, which can lead to conflicts as demands for both intensify, according to research by Washington-based World Resources Institute. For instance, desalination, transferring water over long distances and treating wastewater significantly increase the energy requirements associated with providing fresh water to urban dwellers.
"Because of the strong linkages between water and energy, public- and private-sector decision-makers need to better understand water-energy dynamics and learn how to manage these resources in an integrated manner," WRI stated.
Villagers collect water near Nandom, Ghana.Andrew McConnell | Getty Images
Looking toward the future of water usage, the food-plus-people math doesn't add up. Right now 70 percent of the global water withdrawals go to agriculture. With the world population predicted to rise from 7 billion to 9 billion people by 2050, that equates to a 60 percent increase of the food needed globally and a 19 percent increase of agricultural water consumption.
Northern Ghana's persistent food shortage is exacerbated by recurrent droughts and the deleterious impact on farming in a rural area already characterized by extreme poverty and malnutrition, particularly among children. Ironically, the southern part of the west African nation has lately experienced steady economic growth and poverty reduction, thanks to a U.S.-backed agricultural initiative, Feed the Future, which is now focusing its efforts northward.
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76e25ef0176fc607ad69ab0f9d1ea0d3 | https://www.cnbc.com/2015/10/05/after-hours-buzz-illumina-dupont-container-store-more.html | After-hours buzz: Illumina, DuPont, Container Store & more | After-hours buzz: Illumina, DuPont, Container Store & more
Traders work on the floor of the New York Stock Exchange.Lucas Jackson | Reuters
Check out the companies making headlines after the bell Monday:
DuPont shares jumped more than 5 percent after the chemical company said its CEO and chair, Ellen Kullman, would retire, effective Oct. 16. DuPont also lowered its operating earnings outlook for the full year, citing a strengthening dollar and weaker agricultural markets.
Shares of health technology firm Illumina plunged 15 percent in extended trading after the company projected lower-than-expected revenue for the third and fourth quarters.
Arena Pharmaceuticals shares were up nearly 5 percent after announcing that CEO and President Jack Lief will retire at the request of the biotech company's board.
General Mills shares inched lower after the packaged-goods producers recalled 1.8 million boxes of gluten-free Cheerios cereal because they could contain an undisclosed allergen — wheat.
The Container Store slipped about 4 percent after it missed second-quarter earnings and revenue estimates. Its comparable-store sales surprised to the upside.
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51297baa09d003d046d583e8579556e8 | https://www.cnbc.com/2015/10/05/amtrak-train-derails-in-vermont-injuring-7.html | Amtrak train derails in Vermont, injuring 7 | Amtrak train derails in Vermont, injuring 7
A southbound Amtrak train derailed in central Vermont on Monday morning.
The train apparently struck rocks that fell from a ledge onto the track near the town of Roxbury at around 10:30 a.m. ET. Five cars derailed, two of which went over an embankment, the Montpelier Fire Department told NBC News.
"This was a freak of nature," Vermont Gov. Peter Shumlin said in a news conference Monday afternoon.
One injured person was flown for treatment in New Hampshire, while six others went to the emergency room of the Central Vermont Medical Center with injuries that were not life-threatening, The Associated Press reported. At least several dozen passengers were taken away from the accident on school buses.
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Emergency personnel and investigators from the Federal Railroad Administration were traveling to the scene. The train is part of Amtrak's "Vermonter" service, which runs between Washington, D.C., and St. Albans, Vermont. In 2014, the line served about 88,000 passengers.
An Amtrak train derailed in Vermont. Four people were injured when two cars went over an embankment, according to the Montpelier Fire Department.Source: @BrianABell1980 | Twitter
Passenger Rodger Bell told NBC that he and his wife "felt something hitting the train" before the engineer applied the brakes. They were "tossed around a bit" but were not hurt.
Read MoreAging Amtrak tunnel is a reminder of crumbling America
The derailment comes after a tumultuous period for Amtrak, when it dealt with the aftermath of an accident near Philadelphia that killed eight people. The incident, caused by the train speeding around a turn, led to a national conversation on the state of U.S. infrastructure and the presence of safeguards on railways.
Source: @BrianABell1980, Twitter
This is a breaking news story. Please check back for more updates.
— NBC News contributed to this report
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d9bfeb6cf10505818bbb5fae95490970 | https://www.cnbc.com/2015/10/05/as-oil-stocks-rally-traders-weigh-in.html | VIDEO1:4601:46Top trades for the 2nd half Halftime Report
The "Halftime Report" closed the show with their top thoughts on what to watch in today's market.
With crude oil rallying, Stephen Weiss says this is a bottom picker's market.
Joseph Terranova is watching the dollar index for signs of what's ahead.
Pete Najarian says it's time to start buying protection.
Trader disclosure: On October 05, 2015, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Halftime Report" traders: PETE NAJARIAN: Long AAPL, AMAT, BAC, BMY, BP, CSX, DIS, DISCA, DKS, FOXA, GE, KKR, KO, MRK, PEP, PFE, PHM he is long calls AA, ABX, BEE, BMY, COP, DAL, ETFC, F, FL, GPRO, LM, MPEL, PFE, SWFT, TNK, UAL, XLF, XOM, ZIOP, he is long puts EWW, FCX, MRO, X. JOE TERRANOVA: Long VRTS. STEVE WEISS: Long C, CDK, CVC, GILD, LULU, NCR, THC
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07e7792c4decfdec9ae5c1de2b18f094 | https://www.cnbc.com/2015/10/05/australias-august-trade-deficit-widens-to-a31b.html | Australia's August trade deficit widens to A$3.1B | Australia's August trade deficit widens to A$3.1B
VIDEO4:0804:08Will a weak Aussie deter the RBA from easing?
Australia's trade deficit widened in August to 3.1 billion Australian dollars, data released by the country's statistics bureau showed.
A Reuters poll had forecast a deficit of 2.4 billion Australian dollars, and the number came after a 2.8 billion Australian dollar deficit in July.
Total exports came in at 26.5 billion Australian dollars and total imports at 29.6 billion Australian dollars.
The Australian dollar slipped to $0.7078, from $0.7093 prior to the trade data release.
The Reserve Bank of Australia will make its monthly monetary policy announcement at 11.30am SIN/HK. The central bank is expected to keep rates unchanged at 2.0 percent.
Only one third of 25 economists polled by Reuters forecast more easing in the medium term, but future debt markets are fully priced for a cut early next year.
Currency dealers said if the RBA were to reinstate an easing bias, as expected by some investors, the Aussie could drop below 70 cents. Should the statement be similar to the September review, however, the local dollar could test the September 22 peak of $0.7159.
- Reuters contributed to this report.
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4c533bbb12347ae0328826e3dc6cfbf2 | https://www.cnbc.com/2015/10/05/beam-me-up-zuckerberg-to-launch-internet-into-orbit.html | Beam me up: Zuckerberg to launch Internet into orbit | Beam me up: Zuckerberg to launch Internet into orbit
A rendering of a satellite called Amos-6, which Facebook says will provide internet coverage to large parts of Sub-Saharan Africa.Source: Mark Zuckerberg | Facebook
Mark Zuckerberg is really determined to bring free internet to the world.
The CEO announced via Facebook that the company is working on a project to deliver internet to the people of earth from space.
Zuckerberg has partnered with Eutelsat, a French-based satellite provider, to literally launch this project into the stratosphere.
The satellite, dubbed Amos-6, is expected to provide internet coverage to parts of Sub-Saharan Africa and is slated for launch in 2016.
No, Facebook is not going to charge users a privacy fee
Facebook unfriending considered in office harassment case
"Over the last year Facebook has been exploring ways to use aircraft and satellites to beam internet access down into communities from the sky," Zuckerberg wrote. "To connect people living in remote regions, traditional connectivity infrastructure is often difficult and inefficient, so we need to invent new technologies."
Zuckerberg has been a vocal proponent for free internet, having developed Internet.org, a Facebook-led initiative which aims to bring affordable access to select internet services to less developed countries.
"Connectivity changes lives and communities," he wrote. "We're going to keep working to connect the entire world — even if that means looking beyond our planet."
Correction: This story has been updated to reflect that Internet.org is a Facebook-led initiative.
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c09bebfbd8d9e3e0e87f3d9d22234313 | https://www.cnbc.com/2015/10/05/ben-bernanke-heres-my-worst-moment-as-fed-chief.html | Ben Bernanke: Here's my worst moment as Fed chief | Ben Bernanke: Here's my worst moment as Fed chief
VIDEO1:4801:48Bernanke: My worst momentSquawk Box Next 20
VIDEO5:1005:10Bernanke: Wasn't a way to save LehmanSquawk Box Next 20
VIDEO3:2303:23Bernanke: We had to intervene with AIGSquawk Box Next 20
Former Fed Chairman Ben Bernanke told CNBC on Monday the worst moment of his eight-year tenure leading the central bank was the weekend before Lehman Brothers failed.
Reflecting on the 2008 financial crisis on "Squawk Box," he said he was most troubled by the "knowledge it was going to fail and the fear and uncertainty associated with that."
But that was only the beginning. "Then the next couple of days ... we had to deal with AIG and talk to Congress," he recounted.
Read MoreBen Bernanke: This is what's slowing USeconomy
Bernanke has often been called the "right guy, at the right time," because of his extensive study of the Great Depression as well as past financial panics and their effects on the economy.
Facing what he called the "Grand Daddy of all financial panics" in 2008, the former Fed chief said he was concerned the "consequences would be tremendous."
Bernanke appeared on CNBC as part of a promotion tour for his new memoir, "The Courage to Act: A Memoir of a Crisis and Its Aftermath," which went on sale Monday.
On the flipside, he said the best part of being Fed chairman, a job he left last year, was leading the central bank through the turmoil.
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0fee467237d41c6754108986f5221723 | https://www.cnbc.com/2015/10/05/ben-bernanke-slow-productivity-growth-is-weighing-on-us-economy.html | Bernanke: No hurry to hike | Bernanke: No hurry to hike
VIDEO2:4002:40Fmr. Fed Chair Bernanke: We rely too much on the FedSquawk Box Next 20
VIDEO1:0401:04Fmr. Fed Chair Bernanke: Come close to full employmentSquawk Box Next 20
VIDEO2:5602:56Bernanke: Long-term low or no inflation has riskSquawk Box Next 20
VIDEO1:2401:24Bernanke: The Fed did what it couldSquawk Box Next 20
VIDEO2:0302:03Bernanke: More help needed from fiscal policySquawk Box Next 20
VIDEO3:1703:17Bernanke: Rate hike should be last resortSquawk Box Next 20
VIDEO1:4901:49Bernanke: Wouldn't worry about China's stock marketSquawk Box Next 20
VIDEO1:4801:48Bernanke: My worst momentSquawk Box Next 20
VIDEO5:1005:10Bernanke: Wasn't a way to save LehmanSquawk Box Next 20
VIDEO3:2303:23Bernanke: We had to intervene with AIGSquawk Box Next 20
VIDEO1:0701:07Bernanke: The goal post has not movedSquawk Box Next 20
Former Fed Chairman Ben Bernanke told CNBC on Monday he sees no reason why central bank policymakers should rush to increase interest rates.
With the Fed considering a rate hike that would be the first in nine years, he said it's not evident that monetary policy is too easy because inflation is so low and full employment is only starting to emerge.
"[The Fed] has a 2 percent inflation target. It needs to get inflation up to that target," said Bernanke. "Easy money is justified by the need to get inflation up to the target."
In a wide-ranging interview on "Squawk Box," he also addressed criticism that the Fed keeps moving the goal posts for raising rates.
"As a form of forward guidance [in 2012], we promised we would not tighten until at least, at least until we got to 6.5 percent [unemployment report]. We didn't say we would tighten when we got to 6.5 percent," he said.
Reiterating the importance of the inflation target, he stressed: "The goal post was 2 percent inflation. We're not there yet."
Bernanke refused to second guess current Fed Chair Janet Yellen on her decision not to increase rates at the Fed's September meeting. "It is a tough call," he said, adding Friday's weak employment report for last month was a negative.
The debate on Wall Street has turned to whether the Fed might move at its next meeting, Oct. 27-28, or in December. But the futures market has basically ruled out this month and puts only 30 percent odds on December. The likelihood of a rate hike increases into next year, according to the CME FedWatch tool, which tracks daily market reaction on potential changes to the fed funds target rate.
Bernanke said slow productivity growth is weighing on the economy, and there's too much reliance on the central bank. He said other policymakers in the government need to step up.
The lower growth in the U.S. economy is not a hangover from the Great Recession, Bernanke said, noting that more capital investment is needed to boost growth.
In the long term, low or no inflation has risks, he warned. "If inflation is so very, very low that it's close to deflation, the risk is that ordinary interest rates will be low all the time. ... What happens where there's a recession, there's no where to cut."
However, he insisted that the Fed should not have hiked already. "That doesn't make any sense. If you raised rates too early and kill the economy, that doesn't help you," he said.
Read MoreBernanke: More execs should have gone to jail
Bernanke was interviewed as the current Federal Reserve faces new challenges from a slowing China and whether the economic freeze there might put a lid on U.S. growth.
The China slowdown has been "broadly anticipated," he said, because of Beijing's move to more of a consumer-driven economy. He said the open question is whether the economy there is slowing more than one would expect from such as transition.
Investors shouldn't get too worried about the recent problems in Chinese stocks, he argued, because the market there doesn't relate too much to the economy.
Growth has certainly been slower around the world, but the U.S. economy has been doing better than others, Bernanke said, evidence the Fed's monetary policy since the financial crisis has been correct.
But he said no one can guarantee the Fed will foresee future bubbles.
"The Fed has been using easy money because the economy has needed a lot of support," he argued. "A better policy would be a better mix of monetary, fiscal, and other policies. The fact that the Fed is the only game in town means the Fed has to do too much."
The Fed has two mandates for monetary policy to keep inflation in check and promote maximum employment. Creating an environment to foster stability in the financial system, that's the third object, he said, but one that should be pursued on the regulatory and supervisory fronts, not monetary policy, "and to be tough about that."
Bernanke, now a distinguished fellow at the Brookings Institution, left the Fed in January 2014 at the end of his second term, after serving eight years as chairman during the turbulent times before and after the 2008 financial crisis. He's also a senior advisor to hedge fund Citadel and bond powerhouse Pimco.
He's on a promotion tour for his new book, "The Courage to Act: A Memoir of a Crisis and Its Aftermath."
Looking back at the financial crisis, he told CNBC there was no way to save Lehman Brothers, despite best efforts to prevent the investment firm's demise. He said the Lehman weekend and subsequent failure was the worst moment of his tenure as Fed chief.
Read More Ben Bernanke: Here's my worst moment as Fed chief
By contrast, he said, "It was a very difficult decision to intervene with AIG. We felt we had to, given Lehman had failed."
"They got all they needed in order to survive," he said, but the insurer was "charged a high interest rate" and equity was taken on behalf of the taxpayer. "In being tough" he continued, "we were doing something for AIG that we weren't doing for ... thousands of firms in the country that were going bankrupt without any help."
It was a "moral hazard," he said, "we had to do everything we could to minimize the windfall that we were giving to AIG stockholders."
When Bernanke took the Fed helm, stocks and the housing market were soaring to record heights, but not long after that he had to help rescue the nation from the brink of financial collapse.
Charting the course of Bernanke's tenure at the Fed, from the day he took the reins from Alan Greenspan until the day he passed the torch to Chair Janet Yellen, the Dow Jones industrial average gained about 45 percent. But from the depths of the Great Recession in 2009 until Bernanke's departure, blue chips more than doubled.
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716f2d93af8116f472dd204512150f1f | https://www.cnbc.com/2015/10/05/bernankes-legacy-a-fed-that-did-too-much.html | Bernanke's legacy: A Fed that did too much? | Bernanke's legacy: A Fed that did too much?
VIDEO2:0302:03Bernanke: More help needed from fiscal policySquawk Box Next 20
Former Federal Reserve Chairman Ben Bernanke believes the central bank has been asked to do too much heavy lifting in getting the U.S. economy back up and running.
What perhaps will define his legacy, though, is whether the Fed did too much under his stewardship, going far beyond its central mandates and in doing so laying the groundwork for peril ahead.
In a high-profile promotional effort for his book, "The Courage to Act," Bernanke on Monday visited CNBC for a one-hour sitdown to explore how the Fed under his tutelage saved the financial system from certain disaster in 2008 and 2009, then used unprecedented expansive monetary policy to try to goose the subsequent recovery.
Focusing on the post-crisis measures, Bernanke, as he did on multiple occasions during his eight-year tenure, bemoaned the lack of coordinated fiscal policy to go with the ultra-easy monetary policy in place during his time at the helm.
"Clearly one of the issues is that we've have been relying too much on the Fed," he said. "The Fed is the only game in town. It has been doing much of the policy heavy lifting for the past few years. We need to see more action from other policymakers."
There can be little argument that the Fed has done some serious "heavy lifting."
Ben BernankeKatie Kramer | CNBC
Seven years of zero interest rate and a balance sheet at $4.5 trillion attest to that. In fact, there's an argument, pervasive in monetarist circles, that the Fed took its desire to buttress fiscal policy a little too far.
Read More The Fed may be 'losing grip on market prices'
"It's certainly true that the Fed was doing all of the heavy lifting. In fact, most of the fiscal policy was awful," said Fed historian and Carnegie Mellon professor Allan Meltzer. "What I would criticize is why he did it. Why did he continue to do it for years to finance the debt at very low interest rates, knowing that when interest rates rise the people who bought those bonds would take a big loss?
"Why didn't they say to the administration, say to the government, 'We did our jobs, you do yours?' "
Instead, the Fed plowed ahead on its policies, despite mixed results.
While the stock market is up nearly 200 percent — as measured by the — from its crisis lows, economic movement has been considerably less impressive. No calendar year has registered gross domestic product growth of more than 2.5 percent, wage increases have been anemic and inflation, at least by the Fed's favored data points, remains below target.
Debt, though, has soared.
Read More John Boehner just made Janet Yellen's life harder
Total national debt outstanding is at $18.15 trillion, nearly double where it started 2008. Corporate debt has jumped to $8.1 trillion, a nearly 50 percent gain over the same period, and household debt has passed $14 trillion for the first time ever, despite consumers deleveraging following the Great Recession.
"When they talk about fiscal policy, are they saying they want us to increase the national debt? We've increased the debt by $12 trillion. Do you want more of that?" said economist and Fed critic Michael Pento, founder of Pento Portfolio Strategies. "The central banks are the worst offenders. They take down interest rates artificially, and what does that encourage but for people to take on more debt."
To be sure, Fed critics such as Pento and Meltzer incorrectly predicted that Fed policy would create runaway inflation.
It's a bit of a Pyrrhic victory, though: The Fed, in fact, has been trying to drive inflation at least up to its 2 percent target, but with little success. The culprit: Much of the money it "printed" digitally hasn't gone anywhere.
Banks, which were the biggest direct beneficiary of the expansive monetary policy, have $2.46 trillion in excess reserves parked at the Fed now, compared to the required level of $107.1 billion required.
Where that money goes, and not whether Washington finally decides to pick up the policy ball, could be Bernanke's real legacy.
"I was wrong in predicting inflation. It was wrong because the reserves that he was producing with such abandon ended up on the balance sheet of the banks, so he never got the money growth that would have produced the inflation. But the reserves are still there," Meltzer said. "Until we get back to a normal banking system, we won't know whether (the Fed's) program was a success."
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4822236238cfa9e945446b896adc19ac | https://www.cnbc.com/2015/10/05/boj-meeting-could-bring-surprise-rate-cut-says-goldman.html | Will the BOJ spring a surprise this week? | Will the BOJ spring a surprise this week?
Getty Images
Be on guard, the Bank of Japan (BOJ) could spring a surprise at its monetary policy meeting this week, according to Goldman Sachs.
The BOJ, which has stood pat since expanding its vast bond-buying program last October, faces a less sturdy economy. Industrial production has tanked, business confidence has worsened, and wage growth has been sluggish in recent months.
The central bank kicks off its two-day meeting on Tuesday with a decision due on Wednesday at 0330-0430 GMT.
"We maintain our base-case for the BOJ to take additional easing action on October 30, although we do not fully rule out the possibility of an earlier move this week," Goldman economists led by Naohiko Baba wrote in a note.
The central bank will hold a second monetary policy meeting on October 30, when it is scheduled to publish its biannual outlook report on the economy and inflation. It is expected to unveil downward revisions to both growth and prices.
"We think Japan's economy can narrowly escape a technical recession, but the current state of the economy is far below the BOJ's outlook," Baba said.
"Expected inflation rates, on which the BOJ place large importance as a QQE [quantitative and qualitative monetary easing] transmission channel, have been on a downtrend almost across the board with the corporate outlook in the Tankan Survey providing the latest clear evidence," he said.
Last week, the BOJ's quarterly Tankan survey of corporate sentiment showed big manufacturers' confidence worsened in the three months to September, underscoring the lackluster state of the nation's economy.
VIDEO3:4803:48Will Japan data prompt further BOJ easing?Street Signs Asia
Japan has been struggling for two years to lift the economy out of deflation despite monetary and fiscal support. The world's third largest economy shrank an annualized 1.2 percent in April-June and some economists are warning that the economy could contract again in the third quarter on the back of slowing exports and weak factory output.
"Without additional easing at all in October, we believe Mr. Kuroda's commitment would be seen as wavering considerably, and this could prompt market volatility," Baba said, referring to BOJ Governor Haruhiko Kuroda.
Not all are standing on guard for a surprise move this week, however.
"Fact is, there is no urgency for the BOJ to act at this meeting. What's more, for some, BOJ easing at this point could constitute a very abrupt turnaround in BOJ stance," said Vishnu Varathan, senior economist at Mizuho Bank.
Last month, Kuroda played down the need for further action, saying that the central bank sees a gradual recovery continuing in the economy.
Read MoreFeeble wage growth raises odds of BOJ stimulus
"But after a less than stellar Tankan and arguably dismal industrial output numbers last week, fact of the matter is that the case for BOJ easing is building solidly," Varathan said.
HSBC agrees the BOJ has more time to buy before it makes a decision on further easing.
"The string of downbeat September data releases have increased the risks of Japan slipping into a technical recession in Q3 15. However, as our base case we continue to believe that the Bank of Japan will maintain the status quo and keep policy on hold for the time being," said Izumi Devalier, economist at HSBC.
"First, unlike last autumn when CPI components were decelerating across the board, ex-energy core CPI measures have been rising as of late," she said. The "core-core" CPI, which excludes both food and energy prices, accelerated to 1.1 percent on year in August, from 0.9 percent in July.
"Second, despite the fact that economic growth has remained sluggish since last year's VAT hike, implying a slower improvement in conventional measures of the output gap, there has been no let-up in the pace of labor market tightening," she added.
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2b3c24c2cade1f322ccc03fd467a12a9 | https://www.cnbc.com/2015/10/05/can-robots-close-the-retirement-savings-gap.html | Can robots close the retirement savings gap? | Can robots close the retirement savings gap?
VIDEO1:2301:23Can robots close the retirement savings gap?FA Hub
Can robots help Americans be better prepared for retirement?
Online investment services that provide automated, algorithm-based portfolio management advice have attracted millions of investors over the past few years with their low fees and minimum requirements.
The so-called robo-advisors had an estimated $8 billion in assets under management as of July, a 34 percent increase from last year, according to financial research firm CB Insights. By 2020, assets in these services could grow to nearly $2.2 trillion, management consulting firm A.T. Kearney estimates. (That's still a relatively small piece of the overall investment asset pie — Vanguard alone has about $3 trillion in global assets under management — but it's not insignificant.)
Established financial services companies have taken notice. In August, BlackRock, the world's largest asset manager, acquired FutureAdvisor, a robo-advisor with more than $600 million in assets under management, in a deal valued at between $150 million and $200 million. Venture-backed robo-advisors, such as Betterment, Personal Capital and Wealthfront, are competing with new automated investment advice services launched earlier this year by Charles Schwab and Vanguard.
How to draw down your retirement savings
Robo-advisors aren't just for tech-savvy millennials. Personal Capital, which offers a hybrid model combining online services with financial advisors, targets high net worth individuals and FutureAdvisor's average client is a Gen Xer, according to market researcher Aite Group.
"The entrenched view that these digital advisors are only for millennials is no longer accurate," concluded Sophie Louvel Schmitt, a senior analyst at Aite in her March 2015 report on the industry.
A big part of the appeal of robo-advisors is that they charge less than the traditional 1 percent fee many financial advisors charge. For example, robo-advisor WiseBanyan, which has $35 million in assets under management, offers basic portfolio allocation advice for free based on to a brief survey of risk tolerance, but charges for customized advice. SigFig, another online investment company, charges an annual fee of 0.25 percent for its managed accounts. Personal Capital, which manages more than $1.5 billion in assets, has fees that range depending on the size of the account, sliding from 0.89 percent of assets down to 0.49 percent.
The willingness to take clients with low account balances is another draw. Wealthfront has a $500 account minimum and Betterment has no account minimum at all.
How much do you really need for retirement?
Several robo-advisors plan to offer their services through employer-sponsored retirement plans, such as 401(k)s. Last month, Betterment announced the launch of a 401(k) product, saying it will offer both investment management and plan administration services. Start-up Blooom and Financial Engines, the nation's largest independent registered investment advisor, provide automated services that manage asset allocation in retirement accounts for a fee.
Retirement experts hope that robo-advisors can also help more small employers offer retirement plans at a lower cost. An estimated 78 million Americans, or half of American workers, don't have access to an employer-sponsored retirement plan.
Size can be a costly issue for participants in small retirement plans. FeeX, a service that calculates the fees in retirement plans, found that retirement plans with fewer than 100 participants have average fund expenses that are three times higher than those at plans with more than 100,000 participants.
Yet robo-advisors, many of which have sprung up in the last few years, have never experienced a bear market.
"How are they going to fare in different market conditions?" asked Chad Parks, founder and CEO of Ubiquity Retirement + Savings, which provides retirement plans to small businesses. Parks said Ubiquity is in talks with several robo-advisors to provide them with help on handling the administration of retirement plans for small businesses.
Investors will still need human advisors to coach them during periods of market volatility, said Wesley Gray, CEO of Alpha Architect, a quantitative investment firm. "The robos make good advisors better and will cause the bad ones to be fired," he said.
Whether robo-advisors can close the retirement savings gap remains to be seen. However, they will continue to put pressure on retirement plan providers and financial advisors to lower their fees, said William Boland, a senior analyst at Aite, and robo-advisors could offer more tools to produce personalized advice that improves how workers engage with their retirement plans.
In the future, Boland sees the lines been traditional advisors and robo-advisors blurring. "Robo-advisors can help clients with the on-boarding process of joining a retirement plan, manage their investments and rebalance their portfolios," he said. "That frees up human advisors to provide more holistic financial advice to their clients."
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e81f385034f19007e53ac984a92582a0 | https://www.cnbc.com/2015/10/05/china-huarong-am-and-china-reinsurance-roadshow-hong-kong-ipos.html | Big HK IPOs roadshow as market confidence improves | Big HK IPOs roadshow as market confidence improves
Hong Kong Stock ExchangeGetty Images
China Huarong Asset Management and China Reinsurance have started pitching Hong Kong IPOs worth up to a combined $5 billion to investors on Monday - a sign of improving confidence in market conditions after recent turbulence.
China's biggest state-owned bad debt asset management firm and its largest reinsurer had received the nod for their initial public offerings weeks ago but pre-marketing was delayed due to volatile markets around the world.
After falling for five straight months, Hong Kong's benchmark stock index started October on a positive tone, indicating investors may be ready to dip back into IPOs even though uncertainties about the health of China's economy remain.
VIDEO4:3304:33Hong Kong IPOs: Watch this spaceSquawk Box Asia
"We're not out of the woods yet. I wouldn't view it as a bull signal for the economy or for the stock market, but they must be confident enough to reach this phase, which is positive," said a Hong Kong-based equity capital markets banker who was not authorized to speak publicly on the matter.
"They've taken a view that these deals will get done and will be supported by Chinese pools of capital. There's no shortage of institutional money in China."
Huarong and China RE did not reply to Reuters requests for comment on the pre-marketing of their IPOs.
Huarong is seeking to raise up to $3 billion in its IPO. The offering will consist of 6.31 billion shares, equivalent to a 16.4 percent stake in the company, and Huarong is slated to start taking orders from investors on Oct. 15, according to a term sheet of the deal seen by Reuters.
Read MoreWhat's worrying Hong Kong's wealthy right now
The offering will include no more than 607 million shares from China's Ministry of Finance and no more than 17 million shares from state-backed grain trader COFCO, the terms showed.
Huarong plans to use 60 percent of the proceeds to develop its distressed asset business and buy more debt from financial and non-financial companies, while another 30 percent will be set aside to expand its financial services businesses.
China RE plans to raise up to $2 billion. It is set to offer 5.77 billion new shares, equivalent to 14 percent of its enlarged share capital, and to start taking orders from investors on Oct. 12, Thomson Reuters publication IFR reported.
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441fbe730ee3418635f3b753ec16debb | https://www.cnbc.com/2015/10/05/cramer-why-im-rethinking-my-view-on-the-market.html | VIDEO11:4711:47Cramer: Why I'm rethinking my view on the market Mad Money with Jim Cramer
It was only a few weeks ago that it seemed impossible to Jim Cramer for this market to stage a miraculous turnaround. The Fed, oil, China and Volkswagen all seemed like a dark clouds over stocks.
"Suddenly, good news is busting out all over, and we can't not talk about them. I have been bearish for a while now, but if the facts change, I have to change with them," the "Mad Money" host said.
Monday brought a plethora of good news, and the Dow jumped triple digits in response. Stocks rallied when it appeared that the Federal Reserve was actually on hold for the rest of the year, oil bounced back and things started getting better in China. Additionally, the issues plaguing Volkswagen seemed contained, which allowed other auto companies to benefit.
Just a few weeks ago, it seemed completely ridiculous to suggest that these issues could be contained, yet, that is exactly what happened. So, to shed light on how the market pulled of its big turnaround, Cramer explained each topic.
For the last week I have been saying that when everyone's bearish, it is time to rethink your viewpoint. That is exactly what I am doingJim Cramer
Traders work on the floor of the New York Stock Exchange.Getty Images
First up was the Fed. A few weeks ago, the Fed issued a statement saying that it was on track to tighten, unless facts got in the way of a bullish economy. Sure enough, Friday's weak employment number proved that the economy is weakening fast and an immediate rate hike moved out of the spotlight.
Then there was oil, which Cramer thinks led the market turnaround on Friday. The Baker Hughes rig count confirmed on Friday that it had dropped a staggering 29 rigs in the United States. That cut will directly impact the amount of oil produced in the U.S. It was also a sign that the weak hands are being flushed out.
"We may experience a dramatic decline in the amount of oil we produce next year, which will send the price up," Cramer said. (Tweet this)
Third, is the sudden change in Chinese mortgage rates, which was a welcome change in Cramer's perspective. It meant that the Communist Party has realized it has been more of an impediment to growth in China, than its recent behavior and stinginess when it comes to building and buying new homes.
Additionally, since copper is an important element to new homebuilding, Cramer found this to be a welcome change. Ultimately, this could even help Glencore, a gigantic mining and trading company that is perceived to be on the verge of blowing up.
Read more from Mad Money with Jim Cramer
Cramer Remix: The theme this earnings season Cramer game plan: Get ready for earnings playoffs! Cramer: Hot tamale! When to ring the register
Finally, there is Volkswagen; it was confirmed that a few of the engineers who were concerned about the high diesel emissions could be behind the scandal. Cramer thinks that while VW will owe billions in reparations, the company might just fade away. Meanwhile, the stocks of other automakers are starting to creep up, a good sign for the group.
So, while Cramer certainly understands that things can't just go from bearish to bullish overnight, there is no denying that a bullish October after a bearish September has happened before.
"For the last week I have been saying that when everyone's bearish, it is time to rethink your viewpoint. That is exactly what I am doing," Cramer said.
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57517da83d5b5bd316ef909797733361 | https://www.cnbc.com/2015/10/05/cramer-why-jack-dorsey-as-twitter-ceo-is-good-news.html | Cramer: Why Jack Dorsey as Twitter CEO is good news | Cramer: Why Jack Dorsey as Twitter CEO is good news
VIDEO3:4003:40Jack Dorsey officially named Twitter CEO
Jack Dorsey's appointment as Twitter's permanent CEO is good news for the company for one simple reason, CNBC's Jim Cramer said Monday.
"Dorsey is a uniter," Cramer told "Squawk on the Street." "This is a man who has great respect internally; I think you can start seeing the big turmoil being over."
The social media company made the appointment permanent earlier Monday, about three months after former Chief Executive Dick Costolo stepped down.
Twitter shares were up 1.5 percent midmorning Monday, but are down more than 25 percent in 2015 and more than 50 percent in the past 12 months.
Dorsey will also remain as CEO of Square, a mobile payment start-up.
Tweet
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3171e5ea37c4416cff5444fd08995457 | https://www.cnbc.com/2015/10/05/crude-up-slightly-in-early-asian-trade-russia-mulls-oil-talks.html | US oil settles up 4.9%, at $48.53 a barrel | US oil settles up 4.9%, at $48.53 a barrel
VIDEO1:2001:20US, Iran deal is great achievement: OPECWorldwide Exchange
VIDEO3:2703:27OPEC is as strong as ever: Secretary GeneralWorldwide Exchange
VIDEO0:3900:39Russia is ready to talk oil pricesOil
U.S. crude closed at nearly a three-month high after a new U.S. forecast showed tighter oil supplies next year, while Russia, Saudi Arabia and other big producers hinted at further talks to support the market.
Global crude benchmark Brent returned to above $50 a barrel, breaking range-bound trades since early September that have largely seen the market trade in a $5 band.
A weakening dollar added support for oil, as did bets that the U.S. oil rig count could tumble again this week after last week's unexpectedly sharp decline of 26 rigs.
Read MoreRussia ready to meet OPEC to talk oil prices
U.S. benchmark West Texas Intermediate crude settled up $2.27, or 4.91 percent, at $48.53 a barrel — its highest close since Sept. 16.
Brent crude, the global oil benchmark, rose $2.50, or 5.2 percent, to $51.80 a barrel, after rising as high as $51.99, it's strongest level since Sept. 3.
Traders also cited technical buying for Brent at above $50 a barrel as it headed for its first three-day gain in a stretch after Monday's rise of more than 2 percent and Friday's climb of nearly 1 percent.
David McNew | Getty Images
"We have reduced the probability of a return to the $37-38 area per nearby WTI," said Jim Ritterbusch of oil consultancy Ritterbusch & Associates in North Wabash, Chicago. "We will maintain a long standing view that price declines below this support level are virtually off of the table."
Global oil demand will grow by the most in six years in 2016 while non-OPEC supply stalls, according to a monthly U.S. energy report that suggests a surplus of crude is easing more quickly than expected.
Total world supply is expected to rise to 95.98 million barrels a day in 2016, 0.1 percent less than forecast last month, the U.S. Energy Information Administration said in its Short-Term Energy Outlook.
Demand is expected to rise 270,00 bpd to 95.2 million barrels a day, up 0.3 percent from September's forecast due in part to an outlook for stronger demand growth from China.
Read More
Russia's energy minister said Russia and Saudi Arabia had discussed the oil market in a meeting last week and would continue to consult each other.
"The market is possibly moving on speculation that OPEC and non-OPEC countries will find an agreement to cooperate," said Carsten Fritsch, senior oil analyst at Commerzbank in Frankfurt.
OPEC Secretary-General Abdullah al-Badri said at a conference in London that OPEC and non-OPEC members should work together to reduce the global supply glut.
"There is one problem we are facing: the overhang," Badri said, adding there were already signs of higher crude demand and of a drop in supply growth from non-OPEC members.
Iran's chief negotiator for new oil contracts told the conference the country will introduce more than 50 exploration and production projects to investors in the near future.
Read More
Iran's crude oil sales were on track to slip to the lowest in seven months as its main Asian customers were buying less than before.
The drop counters expectations that Iran's crude supplies to the global market will rise sharply once nuclear-related sanctions against the country are lifted.
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5fb15cd01f6d23fbdf28d1dc66a23812 | https://www.cnbc.com/2015/10/05/despite-weak-jobs-report-feds-rosengren-still-sees-2015-rate-hike.html | Despite 'weak' jobs report, Fed's Rosengren still sees 2015 rate hike | Despite 'weak' jobs report, Fed's Rosengren still sees 2015 rate hike
Eric Rosengren still expects the Federal Reserve to raise interest rates this year despite what the head of the Boston Fed called a "weak" September jobs report, which could signal a more significant economic slowdown that delays the policy tightening.
In a Reuters interview, Rosengren said the slowdown in hiring last month effectively heightens his sensitivity to the economy's performance the rest of the year. If it grows at less than a 2 percent pace, or if unemployment rises from 5.1 percent now, he would probably prefer to wait until next year for the much-anticipated rate hike.
Eric Rosengren, president of the Boston Federal Reserve Bank.Jill Harding | CNBC
The straightforward comments could help clarify what the U.S. central bank means by its "data-dependent" approach to deciding when to tighten monetary policy, an approach that has caused confusion among investors and economists since the Fed delayed the policy change last month.
Rosengren, a dovish Fed official who regains a vote on policy next year, said he does not need to see actual evidence thatinflation or wages are rising in order to back an initial rate hike. But the labor market, which is much improved since the recession, is key.
"This was definitely a weak employment report," he told Reuters over the weekend at the Boston Fed.
"We need to understand whether (it) was an anomaly or whether it was symptomatic of greater weakness in the economy than we were expecting," he added. "One report alone doesn't tell us that, so we'll have to see the incoming data."
Job creation misses big in September
The U.S. economy added a lower-than-expected 142,000 jobs in September, according to a government report that also slashed August employment growth and that showed little in wage gains for workers. Factories were hit particularly hard, reflecting a global economic slowdown and the strong dollar.
Investors reacted Friday by cutting the perceived chances of a Fed rate hike in December to only 30 percent, this despite repeated assurances in recent weeks from Chair Janet Yellen and other Fed policymakers that they expect to act this year.
Asked whether he would back a rate hike if the market probability remained at 30 percent, Rosengren said: "Yes, if it was the appropriate action to take."
"I don't think the markets have veto power over what we're going to be doing," he said, adding that those probabilities would likely rise if economic data improves.
The Fed has kept its key rate near zero since the depths of the financial crisis in late 2008.
The question now, Rosengren said, is whether U.S. consumption and other pockets of strength can offset weakness among exporters and other sectors of the economy hurt by weak commodity prices and global activity.
While the decision is for the committee to take, Rosengren said he would delay hiking rates until 2016 "if it looks like the data is weak enough that either the unemployment rate is going up, or that growth looks like it's going to be less than 2 to 2.5 percent, over the second half of this year."
But "if we wait too long then we run the risk of raising rates more abruptly, and I think that just increases the probability that we make more mistakes," he said.
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f7c85db61f86034e427ae62d020048d0 | https://www.cnbc.com/2015/10/05/does-australias-economy-need-same-sex-marriage.html | This could give Australia’s economy a fillip | This could give Australia’s economy a fillip
Torsten Blackwood | AFP | Getty Images
Australia's economic engine has sputtered as the commodities boom loses steam, but the country could get a fillip from legalizing same-sex marriage.
Malcolm Turnbull's ousting of Tony Abbott as prime minister last month sparked speculation the issue could be revisited: Turnbull has made his pro-marriage equality views known.
So although Turnbull has said he would stick to his predecessor's timetable of holding a referendum on the issue sometime after the next election -- which must be held by January 2017 -- calculations are already being made on how same-sex marriages could benefit Australia.
"In an economy that is challenged for fresh sources of domestic demand, a rush of same-sex weddings would have a small positive impact on activity and confidence," ANZ said in a note Tuesday.
"There would be an economic benefit from increased expenditure on weddings, honeymoons, and the potential improved image of Australia as a more tolerant and progressive country."
Read More RBA trims Australia's growth outlook
Australia's Marriage Act currently specifies marriage must be heterosexual, although some states allow same-sex partnerships, which provide access to some, but not all, of the government services available to heterosexual couples.
ANZ estimates the additional expenditure on related to weddings alone would be at least 500 million-550 million Australian dollars ($354 million-$389 million) in just the first year, assuming that half of the current same-sex couples marry within 12 months of legalization.
To be sure, that figure is modest for a near $1.5 trillion economy, but ANZ's calculations do not yet include the impact of a favorable decision on travel both in and out of Australia.
Read More What a new PM could mean for Australia's economy
"This figure does not include honeymoon expenditure, which would add to the stimulus – especially if foreign couples come to Australia to marry or if Australians are encouraged to stay at home (a trend that may be encouraged by the depreciating Australian dollar)," ANZ said.
The economy is badly in need of fresh engines as a slowdown in China has dented demand for commodities, among Australia's primary exports. Quarterly economic growth fell to a two-year low at 0.2 percent during the April-June period, slowing from 0.9 percent in the previous quarter, fueling predictions Australia may soon experience its first recession in more than two decades.
ANZ's estimates of the economic boost aren't terribly out of line with figures in the U.S. In an analysis issued in December of last year, before the U.S. Supreme Court struck down same-sex marriage bans in June, the Williams Institute at the UCLA School of Law, in partnership with Credit Suisse, estimated that legalization would unlock around $2.6 billion in a same-sex wedding boom in the first three years, with around $733 million coming from sates in the South and Midwest.
Figures from the Williams Institute in 2013 indicated that around 30 percent of same-sex couples in a state get married in the first year after that state legalized.
Not all of the economic benefits will be easily quantifiable, ANZ said, noting that it creates a "welfare safety net" as spouses insure each other against job losses.
In addition, "We could also envisage Australia becoming a more attractive destination for businesses, with several corporations who support marriage equality preferring to do businesses here," ANZ said.
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dd68b88d03cd479c22bc417f3fee6085 | https://www.cnbc.com/2015/10/05/dollar-climbs-vs-yen-as-central-bank-meetings-come-into-focus.html | Dollar slips on expectations for later Fed rate hike | Dollar slips on expectations for later Fed rate hike
The U.S. dollar has regained some strength in recent weeks.Getty Images
The U.S. dollar slipped against a basket of major currencies on Tuesday on continued expectations that the Federal Reserve will not hike interest rates this year, while uncertainty over the outcome of a Bank of Japan meeting capped the yen's gains.
Commerce Department data showing the largest expansion in the U.S. trade deficit in five months in August reinforced expectations that the Fed would delay hiking rates for the first time since 2006 until next year. A weak U.S. jobs report on Friday has also driven expectations of a later Fed rate hike.
That outlook hurt the dollar, which is likely to benefit from eventual rate hikes as they are expected to drive investment flows into the United States.
"People are still very skeptical about the Fed raising rates this year," said Thierry Albert Wizman, interest rates and currency strategist at Macquarie Ltd in New York.
VIDEO2:4502:45Euro dollar to hit $1.05: UBSForeign Exchange
The Bank of Japan began its two-day policy meeting on Tuesday. Uncertainty as to whether the central bank would hold monetary policy steady or hint at expanding its stimulus program limited the yen's gains against the dollar.
The dollar was last down 0.14 percent against the yen at 120.26 after hitting a more than one-week high of 120.575 yen early in the U.S. trading session.
"There's definitely a school of thought that believes that the possibility that the Bank of Japan will ease tonight is slightly greater as a derivative of weaker U.S. economic data," said Richard Scalone, co-head of foreign exchange at TJM Brokerage in Chicago.
Euro and Swiss franc gains against the dollar remained within recent trading ranges. Scalone of TJM said expectations that the Fed will not hike rates this year have reduced volatility.
Read MoreA Fed decision could hinge on the dollar: Larry McDonald
The was last up 1.02 percent against the U.S. dollar at $0.7157, near an earlier two-week high of $0.7139 after the Reserve Bank of Australia left interest rates unchanged. The central bank's relaxed message on threats to growth also quelled speculation it would cut interest rates further this year.
The euro was last up 0.7 percent against the dollar at $1.1272. The dollar was last down 0.91 percent against the Swiss franc at $0.9669 franc.
The dollar index, which measures the greenback against a basket of six major currencies, was last down 0.66 percent at 95.47.
On Wall Street, the benchmark S&P 500 stock index was last down 0.51 percent.
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4bdab5249cec91e439de78e107eb2c9a | https://www.cnbc.com/2015/10/05/draftkings-fanduel-issue-statements-as-scandal-erupts-in-world-of-fantasy-sports.html | Scandal Erupts in Unregulated World of Fantasy Sports | Scandal Erupts in Unregulated World of Fantasy Sports
VIDEO0:4700:47Insider trading hits fantasy sportsCollege Sports
A major scandal is erupting in the multibillion-dollar industry of fantasy sports, the online and unregulated business in which players assemble their fantasy teams with real athletes. On Monday, the two major fantasy companies were forced to release statements defending their businesses' integrity after what amounted to allegations of insider trading, that employees were placing bets using information not available to the public.
Last week, an employee at DraftKings, one of the two major companies, admitted to inadvertently releasing data before the start of the third week of N.F.L. games. The employee — a midlevel content manager — won $350,000 at a rival site, FanDuel, that same week.
"It is absolutely akin to insider trading," said Daniel Wallach, a sports and gambling lawyer at Becker & Poliakoff in Fort Lauderdale, Fla. "It gives that person a distinct edge in a contest."
The episode has raised questions about who at daily fantasy companies has access to valuable data, such as which players a majority of the money is being bet on; how it is protected; and whether the industry can — or wants — to police itself.
The leagues have been swelling in popularity, their advertisements blanketing football game broadcasts.
The industry has its roots in informal fantasy games that began years ago with groups of fans playing against one another for fun over the course of a season. They assembled hypothetical teams and scored points based on how players did in actual games.
But in recent years, companies, led by DraftKings and FanDuel, have set up online daily and weekly games based on a similar concept in which fans pay an entry fee to a website — from 25 cents to $1,000 — to play dozens if not hundreds of opponents, with prize pools that can pay $2 million to the winner. Critics have complained that the setup is hardly different from Las Vegas-style gambling that is normally banned in the sports world.
VIDEO0:3100:31Fantasy market revs up
On Monday, DraftKings and FanDuel released a joint statement that said "nothing is more important" than the "integrity of the games we offer," but offered few specifics about how they keep contests on the level.
A spokesman for DraftKings acknowledged that employees of both companies had won big jackpots playing at other daily fantasy sites. Late Monday, the two companies temporarily barred their employees from playing games or taking part in tournaments at any other site; they already had prohibited their employees from playing on their own company sites.
More from the New York Times:
Poor Odds: Daily Fantasy Sports and the Hidden Cost of America's Weird Gambling Laws An Ad Blitz for Fantasy Sports Games, but Some See Plain Old Gambling Yahoo Will Enter Daily Fantasy Sports Market
"Both companies have strong policies in place to ensure that employees do not misuse any information at their disposal and strictly limit access to company data to only those employees who require it to do their jobs," the statement said. "Employees with access to this data are rigorously monitored by internal fraud control teams, and we have no evidence that anyone has misused it."
Industry analysts said the episode could leave the leagues open to further criticism that they are too loosely regulated.
"The single greatest threat to the daily fantasy sports industry is the misuse of insider information," Mr. Wallach said. "It could imperil this nascent industry unless real, immediate and meaningful safeguards are put in place. If the industry is unwilling to undertake these reforms voluntarily, it will be imposed on them involuntarily as part of a regulatory framework."
Already, there has been intensifying discussion on social media and among lawmakers over whether daily fantasy games are pushing the boundaries of an exemption in a 2006 federal law that has allowed them to operate. The law prohibited games like online poker but permitted fantasy play, deemed games of skill and not chance, under lobbying from professional sports leagues. The games are legal in all but five states.
But because Congress did not foresee how fantasy sports would explode, one member, Representative Frank Pallone Jr., Democrat of New Jersey, recently requested a hearing to explore the relationship between fantasy sports and gambling. "I really think if they had to justify themselves at a hearing they wouldn't be able to," Mr. Pallone said in a recent interview.
Read More Poker vs daily fantasy: Which requires more skill?
The data that DraftKings acknowledged was released by its employee, Ethan Haskell, showed which particular players were most used in all lineups submitted to the site's Millionaire Maker contests. Usually, that data is not released until the lineups for all games are finalized. Getting it early, however, is of great advantage in making tactical decisions, especially when an entrant's opponents do not have the information at all.
A spokeswoman for DraftKings said that Mr. Haskell simply made a mistake and that the company was certain he did not use the information improperly. She declined to go into specifics about the safeguards or the company's auditing policies.
Read MoreA league of their own: Fantasy sports craze takes a Wall Street turn
Representatives of both companies acknowledged that many employees of daily fantasy companies were players first and had continued to compete on other sites. Ben Brown, a founder of Daily Fantasy Sports Report, was first to disclose that Haskell had posted the information.
"There's a significant amount of crossover," said Chris Grove, an industry analyst and editor of legalsportsreport.com. "The nature of the industry is so specialized and so new that, at the speed which they grew, they relied heavily on the player population."
Many of these employees set the prices of players and the algorithms for scoring. In short, they make the market.
As daily fantasy sports has blossomed into a multibillion-dollar industry in the past year, DraftKings and FanDuel have become cherished sponsors of M.L.B. and N.F.L. franchises.
Eilers Research, which studies the industry, estimates that daily games will generate around $2.6 billion in entry fees this year and grow 41 percent annually, reaching $14.4 billion in 2020. So high are the potential financial rewards that DraftKings and FanDuel have found eager partners in N.F.L. teams, even as league executives remain staunch opponents of sports betting.
Read MoreFantasy sports vs. illegal gambling: Where's the line?
Jerry Jones of the Dallas Cowboys and Robert K. Kraft of the New England Patriots have stakes in DraftKings, which recently struck a three-year deal with the N.F.L. to become a partner of the league's International Series in Britain, where sports betting is legal. In addition, DraftKings has tapped hundreds of millions of dollars from Fox Sports, and FanDuel has raised similar amounts from investors like Comcast, NBC and KKR.
Adam Krejcik, a managing director at Eilers Research, said early missteps were often part of booming growth in a new and often misunderstood sector like daily fantasy sports. He said whether Haskell, the DraftKings employee, made an innocent mistake or not, the damage was done.
"Certainly does not look good from an optics standpoint, and it strengthens the case for additional oversight and regulation," he said.
Mr. Grove, of legalsportsreport.com, said this may be a watershed moment for a sector that has resisted regulation but now may need it to prove its legitimacy.
"You have information that is valuable and should be tightly restricted," Mr. Grove said. "There are people outside of the company that place value on that information. Is there any internal controls? Any audit process? The inability of the industry to produce a clear and compelling answer to these questions to anyone's satisfaction is why it needs to be regulated."
Disclosure: Comcast and NBC are investors in FanDuel.
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f9ec9e5e9b6b43250f515534bc2d03b2 | https://www.cnbc.com/2015/10/05/drones-can-steal-data-off-wireless-printers.html | Drones can steal data off wireless printers | Drones can steal data off wireless printers
VIDEO0:3500:35Hackers with drones targeting wireless printersCybersecurity
Of all of the devices users attempt to secure against cyber-thieves, few might think of their wireless printer. And even fewer may think of the hacker operating through a drone.
A smartphone mounted on a drone can steal data by intercepting signals computers send to wireless printers, even from outside an office building. So goes a recent experiment by researchers in Singapore, demonstrating that people can exploit an often overlooked vulnerability in network security from a safe distance, according to an article Wired.
Many printers come with open wireless connections, meaning anyone can access them. Many customers don't realize they can be exploited. The video above shows a drone outside an office snatching a signal that an "employee" inside the building is sending to a printer.
The researchers had two apps on the phone: One was a conventional cybersecurity app that looks for unsecured wireless connections. The second tricks computers nearby into thinking the phone is a nearby printer. Instead of printing, the document is sent to the phone, where it can be uploaded into the cloud.
The drone's wireless range had a radius of 26 meters, but, the article noted, hardware modifications could allow it to extend that range.
Read the full article in Wired.com.
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5332c5b7e8d6cccd8ec9c626347e480e | https://www.cnbc.com/2015/10/05/early-movers-ge-once-pot-tsla-vip-lmt-fdx-azo-more.html | Early movers: GE, ONCE, POT, TSLA, VIP, LMT, FDX, AZO & more | Early movers: GE, ONCE, POT, TSLA, VIP, LMT, FDX, AZO & more
Trader on the floor of the New York Stock Exchange.Lucas Jackson | Reuters
Check out which companies are making headlines before the bell:
General Electric—Activist hedge fund Trian has taken a $2.5 billion stake in GE, the largest in the fund's history. GE said it welcomes Trian's involvement, while Trian said GE is in the midst of a bold transformation that should enhance shareholder value.
Spark Therapeutics—The drug maker's experimental eye disorder drug met its goals in a late stage study. The treatment is designed to improve vision in patients who had been at risk for blindness.
FireEye—Piper Jaffray downgraded the cyber security company's shares to "neutral" from "overweight," citing increasing competition and other factors.
Tesla—The electric carmaker reported deliveries of 11,580 vehicles during the third quarter, 49 percent more than a year earlier. That gives Tesla sales of just over 33,000 vehicles for the first nine months of the year, meaning that it could need a major push to reach its goal of 50,000 to 55,000 vehicle sales for 2015.
Vimpelcom—Norway's Telenor wants to sell its 33 percent stake in the Russian telecom company, with that Vimpelcom facing a bribery investigation by regulators in the U.S. and in the Netherlands.
Applied Materials—RBC downgraded the semiconductor equipment maker's stock to "underperform" from "sector perform," pointing to an overall drop in capital spending in the industry as well as what it considers an overly optimistic outlook by the company.
Toll Brothers—The luxury home builder was upgraded to "positive" from "neutral" at Susquehanna, saying current valuation and estimates don't accurately reflect Toll's potential 2016 results.
VIDEO1:3101:31Stocks seek to salvage Septemberstocks
Twitter—Axiom upgraded Twitter to "buy" from "hold," pointing to optimism over the hiring of a permanent CEO and solidification of future strategy.
AutoZone—Oppenheimer upgraded AutoZone to "outperform" from "perform," saying the auto parts seller is among the best-run and most disciplined retailers.
Potash—Potash has pulled its $8.9 billion offer for German rival K+S, after its rival potash producer resisted the offer and amid the overall commodity and equity market decline since the offer was first made in May.
Ford—The automaker and the United Auto Workers union reached an agreement that will avert a walkout at the Kansas City, Missouri factory that builds Ford's F-150 pickup trucks.
Lockheed Martin—The defense contractor is looking into merging some of its information technology and services businesses with those of an unnamed rival, according to a Reuters report. Those businesses have a value of about $4 billion.
St. Jude Medical—The medical products maker received an FDA warning letter regarding the manufacture of some devices at its Atlanta plant.
FedEx—TNT Express chairman Antony Burgmans expects European approval for FedEx's deal to buy TNT. He told Bloomberg that he expects the deal to be completed in the first half of next year.
Walt Disney—Disney is considering implementing variable pricing at its theme parks, according to a report in today's Wall Street Journal.
Exelon—Exelon has reportedly reached a tentative agreement with Washington, DC mayor Muriel Bowser on its bid to buy rival utility Pepco Holdings, according to a Bloomberg report.
Deere—The heavy equipment maker said members of the United Auto Workers Union approved a new six-year labor agreement that covers workers in three states.
Questions? Comments? Email us at marketinsider@cnbc.com
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b6302afa933409c952669fdfbf741f22 | https://www.cnbc.com/2015/10/05/earnings-edge-can-the-colonel-fry-up-gains.html | VIDEO1:5801:58What to watch amid Yum! Brands earningsFast Money
When the fast-food giant behind KFC, Taco Bell and Pizza Hut reports quarterly earnings Tuesday after the close, Wall Street will be watching to see how the China factor could impact results.
Yum Brands, which has a massive presence in China, is still coping with a 2014 food scare and a challenging economy. Just this year, same-store sales have fallen by more than 10 percent versus a year ago.
"This is the first quarter that the company will report comps in China excluding the impact of the supplier incident," said Karen Short, Deutsche Bank research analyst Karen Short on Monday's "Fast Money. She believes overall profit in that region could return.
Short, who has a "hold" rating and a $90 price target on the stock, said the stock should move favorably on the results because expectations are reasonably low.
"We expect Taco Bell to perform extremely well. We expect KFC to be in-line and fairly positive. And we expect Pizza Hut to continue to struggle, " Short noted.
Yum Brands' KFC and Taco BellAdam Jeffery | CNBC
Shares of Yum Brands are down more than 9 percent in the past three months, but the company's shares have traded positive four out of the past five sessions.
The Street is forecasting Yum Brands will report earnings of $1.07 per share on $3.67 billion in revenue, according to FactSet.
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8504986af2f96e7a2aa1032d63af315c | https://www.cnbc.com/2015/10/05/el-fargo-cargo-ship-carrying-28-americans-believed-to-have-sunk.html | El Fargo, Cargo Ship Carrying 28 Americans, Believed to Have Sunk | El Fargo, Cargo Ship Carrying 28 Americans, Believed to Have Sunk
A cargo ship missing since Thursday with 33 crewmen aboard was lost at sea and believed to have sunk in the teeth of Hurricane Joaquin, the U.S Coast Guard said Monday.
The families of the crew, including 28 Americans, have been notified. The Coast Guard will continue to search for survivors, said Coast Guard Captain Mike Fedor.
U.S. Coast Guard Captain Mark Fedor speaks to the media, at U.S. Coast Guard Station Miami, about the sinking of the 790-foot container ship El Faro on October 5, 2015 in Opa Locka, Florida.Getty Images
One body had already been found during the search for the ship Sunday, but it was "unidentifiable," Fedor said.
The 735-foot ship, the El Faro, was likely swallowed by the Category 4 hurricane at its last known location Thursday on the way to San Juan, Puerto Rico, Fedor said. The remnants of the ship are likely 15,000 feet underwater, he said.
On Sunday afternoon, a Coast Guard search vessel had found a 225-square-mile "debris field" of wood, cargo, other items and the human remains, which were in a survival suit.
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The Coast Guard said it had scoured 70,000 square nautical miles of the Atlantic as the search resumed at daybreak Monday, but Fedor said the revelation that the ship likely sunk allows crews to "really hone in on where survivors might be." He said two debris fields close to the last known position of the ship would be searched Monday.
The Coast Guard would "focus more on potential people in the water," Fedor said. "We are not looking for the vessel any longer."
The El Faro left from Jacksonville, Florida, on Sept. 29 when Joaquin was just a tropical storm. The crew on the ship reported on Oct. 1 that the ship had lost power, was taking on water and was listing at 15 degrees. That was the last contact made with the ship.
"If vessel did sink on Thursday, and that crew was able to abandon ship they would have been abandoning ship in a category 4 hurricane. Those are challenging conditions to survive," Fedor said.
But he pointed out that the crew of the El Faro were trained mariners. "We're not going to discount somebody's will to survive."
"As the search for the El Faro mariners continues, our thoughts and prayers remain with them and their families. said Michael Sacco, the president of the Seafarers International Union, which represents American merchant mariners. "In this age when we are all accustomed to instant information and quick answers, it has been an agonizing wait these last few days."
Tim Nolan, president of TOTE Maritime, the ship's owner, said the "the entire TOTE Maritime Puerto Rico family is distressed that it now appears the El Faro sank at or near its last known position."
"We continue to hold out hope for survivors," he said.
Three more Americans were identified among the 33 people on board the container vessel.
South Florida men Jeremy Riehm, 46, and Steven Shultz, 51, were named by their families as among the missing, according to NBC affiliate WBBH. A third American was identified as Keith Griffin.
Shultz's mother told WBBH that she believes her son, a Merchant Marine for 30 years, is alive along with the rest of the crew, but is worried that supplies are running out.
Other missing American crew members include 51-year-old Mariette Wright, engineer Mike Holland and Second Mate Danielle Randolph. "
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722e203be6d9f7749efb61407d5b61c2 | https://www.cnbc.com/2015/10/05/european-markets.html | Europe closes sharply higher; Glencore jumps 17% | Europe closes sharply higher; Glencore jumps 17%
VIDEO0:5900:59Europe closes sharply higher; Glencore jumps 17%
European stocks accelerated gains into the close on Monday, after a weak U.S. employment report dampened expectations that the Federal Reserve would start raising interest rates soon.
The pan-European STOXX 600 closed up around 2.8 percent, slightly building on gains after U.S. markets opened higher.
London's FTSE 100 index and the German DAX both closed provisionally 2.6 percent higher, while the French CAC saw a pop of around 3.3 percent.
The latest official jobs data from the U.S. were the focus for global markets on Monday. September's report, out on Friday, showed the U.S. economy created 142,000 jobs, far below the expected 203,000. Unemployment held at 5.1 percent, while the participation rate plunged to 62.4 percent.
Many investors now expect the Fed to hold rates at record lows for the rest of this year, even though several officials have said in recent weeks that a hike could be appropriate before 2015 is out.
"After a couple of weeks spent focusing on the bad news reasoning for the Fed holding fire in September (emerging markets slowdown, market volatility, commodity price rout, etc), the prospect of looser monetary policy lingering for longer is dominating and benefiting risk appetite once again," Accendo Markets said in a research note.
VIDEO3:1303:13How should you invest if the Fed raises rates?Worldwide Exchange
Glencore shares surged to close well over 16 percent higher on the London Stock Exchange on Monday, having gained as much as 72 percent in Hong Kong overnight. This came on reports that the embattled mining giant was in talks with a few parties, including Saudi Arabia's sovereign wealth fund, to sell a stake in its agricultural business. This would likely be with the aim of cutting its debt load.
Glencore however said "it is not aware of any reasons for these price and volume movements", in a statement on Monday morning.
In general, basic resources companies performed well on Monday. Lonmin shares leaped over 20 percent into the close, while Arcelormittal closed well over 8 percent higher after Citigroup raised its outlook on the stock the "buy" from "sell."
Only a cluster of European stocks closed in the red on Monday. The worst performer on the STOXX 600 was German agricultural chemical company K+S, whose shares closed nearly 25 percent lower after Canada's Potash Corp withdrew its 7.9 billion ($8.9 billion) bid.
Underperformers also included French airline Air France-KLM, which closed 0.7 percent higher. The carrier is expected to cut around 2,900 jobs and a meeting discuss the matter was stormed by angry staff on Monday.
The expansion in euro zone business activity slowed last month, according to closely watched surveys. Markit's final composite purchasing managers' index (PMI) for September came in at 53.6, below August's figure of 54.3. Still, it was above the 50 mark which separates contraction from expansion.
In separate data, euro zone August retail sales were flat month-on-month, but rose 2.3 percent year-on-year, according to Eurostat.
The U.K.'s composite PMI hit 53.9 in September, its lowest since April 2013, raising concerns about the country's recovery path.
In continental Europe, Portugal's center-right government was re-elected on Sunday but failed to win a majority, raising the prospect of political uncertainty.
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3c5216c6767f95e41a9a5aa5823dd44d | https://www.cnbc.com/2015/10/05/expert-a-fed-decision-could-hinge-on-the-dollar.html | A Fed decision could hinge on the dollar: Larry McDonald | A Fed decision could hinge on the dollar: Larry McDonald
VIDEO2:4102:41Figuring out the Fed's pathPower Lunch
Wondering what the Fed will do next? Risk from a strong dollar could change the central bank's policy path, one expert said.
"The credit risk deterioration we saw in July only happens at that speed right around or before recessions," Larry McDonald, head of U.S. strategy at Société Générale's macro group, said Monday on CNBC's "Power Lunch." "If you look at the major credit indices, whether it be high-yield bonds, investment-grade bonds, emerging market bonds ... credit markets could impact the Fed policy path going forward."
For months, financial markets have eyed the timing of a Federal Reserve rate hike amid concerns of global volatility. But some key indicators, including a strong dollar, could push the rate rise out to 2016, or even spur quantitative easing in the U.S., McDonald said Monday in a note.
Bernanke: No hurry to hike
"Eighty percent of analysts, strategists, economists a year ago said the Fed was going to hike in June or September," McDonald said. "The whole world has been waiting for this rate hike, that's why the dollar surged."
A survey of Global Asset Managers found that 67 percent see the U.S. dollar strengthening next 12 months, McDonald told CNBC in a note. In addition to hampering trade, the strong dollar has particularly hindered the manufacturing sector, measured by indicators like the Institute for Supply Management (ISM) manufacturing index and the purchasing managers' index, he wrote.
With job creation already tepid, McDonald told CNBC in a note that wage growth could be too soft to counteract the weakness in the manufacturing sector.
"I really feel the Fed has to contain the dollar to put out this global fire," McDonald said on "Power Lunch." "The dollar has made a 27 percent move in the 19 months and it's really behind lot of this credit risk."
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10e6fc13ae3a187ef6f98858b662abc6 | https://www.cnbc.com/2015/10/05/fast-food-drive-thrus-just-keep-getting-slower.html | Fast food drive-thrus just keep getting slower | Fast food drive-thrus just keep getting slower
VIDEO0:3100:31AMZN moves up in global brand rankingE-Commerce
Fast food is getting slower ... again.
The average drive-thru time has jumped to just shy of 222 seconds, according to QSR Magazine's annual study of drive-thru orders. This represents a slowdown from 203.29 seconds a year ago.
The slowdown is "pretty significant" the QSR said, as chains continue to grapple with the impact of menus that offer more ways for customers to craft their own meals, said Sam Oches, the magazine's editor
"I think the trend has continued. What we started to see a couple years ago is increased times. Customization and enhanced menu items are slowing things down," Oches said.
A customer receives an order from an employee at the drive-thru of a McDonald's Corp. restaurant in San Pablo, California.David Paul Morris | Bloomberg | Getty Images
This year's study included results from 29 chains and data from 1,882 different visits at 890 different restaurants. The time is also much slower than results in 2011 to 2013, although fewer chains were included in those earlier years.
Read More Fries get a cheesy new twist from Canada
There is a silver lining for fast-food diners. Order accuracy is improving at chains — great news for anyone who has had to make a U-turn on the highway to retrieve missing fries.
Orders are now accurate 88.8 percent of the time, up from 87.2 percent last year, QSR found.
VIDEO1:4301:43Futuristic restaurant replaces cashiers with iPadsThe Pulse @ 1 Market
So what's a fast-food diner in a hurry to do?
"Here's a general rule of thumb: The later in the day, the longer it's going to take," Oches said.
"What the restaurants are telling us is they're staffing their best people for breakfast and lunch," he added.
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275478b973920533808bb45ef9fe8c36 | https://www.cnbc.com/2015/10/05/fed-is-now-abject-follower-of-the-market-sri-kumar.html | Fed is now 'abject follower of the market': Sri-Kumar | Fed is now 'abject follower of the market': Sri-Kumar
VIDEO1:3501:35Don't expect rate hike 'anytime soon': Sri KumarSquawk Box
The Federal Reserve will not raise interest rates any time soon because it has fallen into the trap of following the market, rather than leading it, strategist Komal Sri-Kumar said Monday.
The president of Sri-Kumar Global Strategies noted that markets rallied after Friday's disappointing September jobs report, which showed weaker-than-expected gains in net nonfarm payrolls, flat wages and a falling labor participation rate.
"That is saying the markets believe that the Fed simply cannot hike rates," Sri-Kumar told CNBC's "Squawk Box."
"If they do go about and do the increase in rates in October or December, it is going to be a major shock because all the people positioned in fixed income and equity markets will have to reverse their positions because the Fed did something totally unexpected by the federal funds futures."
Read More Job creation misses big in September
Sri-Kumar said the Fed is an "abject follower of the market," and that's the last place investors want the central bank to be.
A greater percentage of market participants now see the Fed's policymaking committee raising rates in 2016 than this year, according to the CME's FedWatch tool, which measures 30-day fed funds futures prices.
The Federal Open Market Committee has held its benchmark fed funds rate near zero since December 2008. The committee's next meeting is Oct. 27-28.
Sri-Kumar told CNBC he was sticking by the call he made last month on "Squawk Box" that the Fed would not raise interest rates until 2017.
Read MoreNo Fed interest rate hike until 2017: Sri-Kumar
VIDEO2:0602:06Fed rate hike unlikely this year: ProSquawk Box
Also on "Squawk Box," Mark Grant, managing director at Hilltop Securities, said he saw Friday's spike in stocks as "a sign of tremendous instability in the equity markets."
There was no technical evidence that suggested the jump was due to the market hitting a low; instead, it reflected the market's belief that the Fed will step in and save investors, he said.
Grant does not expect the FOMC to raise interest rates this year.
"Raising interest rates just is going to cause havoc in both the equity markets and real estate markets and anything connected to borrowing money," he said.
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3794889a7a15472641875f8616970a22 | https://www.cnbc.com/2015/10/05/flood-hit-south-carolina-set-for-more-rain-after-record-setting-downpour.html | Flood-Hit South Carolina Set for More Rain After Record-Setting Downpour | Flood-Hit South Carolina Set for More Rain After Record-Setting Downpour
VIDEO0:3000:30South Carolina hit by '1,000-year' floodsSquawk Box
Soaked South Carolina residents still knee-deep in deadly floodwaters early Monday were warned it was going to get worse before it gets better after an historic drenching.
Parts of the state were being told to expect as much as another three inches of rain before the storm which triggered flash flooding and smashed rainfall records moved offshore by the afternoon.
The Weather Channel tweet
At least seven people have already died in weather-related incidents across North Carolina and South Carolina since Thursday, according to authorities. The victims included highway worker Timothy Wayne Gibson, whose truck swept away by "rushing flood waters" on Sunday in Columbia.
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The conditions prompted officials to warn residents not to leave their homes for any reason — even on foot.
NWS WPC tweet
With 20,000 homes and businesses without power across the state early Monday, the National Weather Service also warned people of winds gusting to 30 mph, increasing the risk of falling trees.
Local officials counted several hundred water rescues by mid-morning Sunday before Columbia Fire Chief Aubry Jenkins said that there were too many rescues to keep count.
Authorities in Columbia told all 375,000 of its water customers to boil water before drinking because of water line breaks and the threat of rising water to a treatment plant.
Among the rescued were 90 people — including several elderly people and dozens of pets — who were forced to evacuate their homes in Irmo, 10 miles northwest of Columbia, NBC station WIS reported.
Local fire officials said the Irmo flooding was due to the rainfall, as well as the decision to open a nearby dam in an attempt to control rising water levels.
"We didn't get the word that they were going to open the dam until 7 p.m. [Sunday] on the news," local resident Cindie Denning told WIS. "Nobody told us."
The all-time state record for the most rain in 24 hours was 14.80 inches, set during Hurricane Floyd in 1999. This was broken in several places over the weekend, with gauges registering 21.66 inches of rain falling in Dalzell, 30 miles east of Columbia, as of 9:46 p.m. Sunday, according to The Weather Channel.
Nick Wiltgen tweet
Experts said parts of South Carolina experienced a "1000 year flood event," meaning in any given year there is a 1-in-1000 chance of observing such rainfall totals.
Myrtle Beach was "ground zero" for the storm Monday, with the heaviest rain expected there, although the precipitation could move through Charleston before heading out to sea, Weather Channel lead meteorologist Kevin Roth said.
Why Miami is mostly unprotected from hurricanes
"After [Monday] morning, the end is in sight," he said. "This should be the last of any kind of rain [in the region] for the next seven days."
Areas of southeast North Carolina could be hit by more downpours in the afternoon but the region would otherwise be dry, Roth added.
NBC News meteorologist Bill Karins said that "95 percent of the damage has already been done in South Carolina and waters levels in most cases are beginning to recede."
But he added: "Rivers all through South Carolina are running exceptionally high and will cause further damage into Wednesday even though it will be sunny by then."
NWS WPC tweet 2
The storm was super-charged by the effects of Hurricane Joaquin, which battered the Bahamas on Friday. It was 125 miles north of Bermuda at 5 a.m. ET on Monday.
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4e7db3b6e299b1c9371e900e61cf1ce0 | https://www.cnbc.com/2015/10/05/full-cnbc-transcript-former-federal-reserve-chairman-ben-bernanke-speaks-with-cnbcs-squawk-box-today.html | Full CNBC Transcript: Former Federal Reserve Chairman Ben Bernanke Speaks with CNBC’s “Squawk Box” Today | Full CNBC Transcript: Former Federal Reserve Chairman Ben Bernanke Speaks with CNBC’s “Squawk Box” Today
WHEN: Today, Monday, October 5th
WHERE: CNBC's "Squawk Box"
Following is the complete unofficial transcript of a CNBC EXCLUSIVE interview with former Federal Reserve Chairman Ben Bernanke in his first TV interview since leaving office. Following are links to the interview on CNBC.com: http://video.cnbc.com/gallery/?video=3000428942, http://video.cnbc.com/gallery/?video=3000428944, http://video.cnbc.com/gallery/?video=3000428947 and http://video.cnbc.com/gallery/?video=3000428952. Additional links are available here.
All references must be sourced to CNBC.
BECKY QUICK: Welcome back to Squawk Box everybody, this is CNBC, first in business worldwide. I'm Becky Quick along with Joe Kernen and Andrew Ross Sorkin. And a lot has happened here over the last 20 years with Squawk Box. Today, for the first time in our 20 year history, we are honored to welcome former Fed chairman Ben Bernanke to our set, in the financial capital of the world. Sir, thank you so much for being here today.
BEN BERNANKE: Great to be here. Thanks for inviting me.
BECKY QUICK: We have a lot to talk about. Obviously, your book is what's kicking this all off, The Courage to Act. We're gonna talk about that in just a moment. In the meantime though, this is, we should mention, his first live television interview since leaving Washington. We're gonna get to all of that in just a moment, but first, Joe has a roundup of this morning's top stories. Joe.
JOE KERNEN: We really need to do these while he is here okay. News just breaking. Twitter offes-- officially naming Jack Dorsey, the guy with the-- like, the Grizzly Adams beard-- he thinks it looks good, as CEO of Twitter. He will remain on the board-- but will no longer act as chairman. Dorsey will continue-- oh, now see? See what I mean? That's so much better. He will remain a chief executive of Square. Maybe we can look at one of the other ones to show you--
STEVE LIESMAN: Way to talk to our guest, Joe, with a comment on beards.
JOE KERNEN: His beard is nice. He's got the hipster-- heget past any velvet rope in the city. Here are--
BECKY QUICK: Jack Dorsey has the ZZ Top going almost
JOE KERNEN: It's, like, a ZZ-- it's, like, the-- almost-- anyway-- other stories-- investors will be talking about today-- Nelson Peltz building a $2.5 billion stake in General Electric his Trian fund-- is calling on GE to step up cost cutting-- consider getting rid of even more of its finance arm, and be more cautious on acquisitions. GE CEO Jeff Immelt says his company maintains an open dialogue with all of its shareholders. Trian's Ed Garden will join David Faber on Squawk on the Street-- later this morning. We were gonna talk-- maybe we will, to Jeff Sonnenfeld at some point. He says he's very positive about this. That not all activist's moves areyou know, not a good thing. And that he says Jeff Immelt is, in fact, quoting no Carly Fiorina. Anyway, Potash- was throwing its offer for German rival K+ S, which had refused to negotiate on the bid. Potash says it's now giving up, blaming the big decline in commodity prices and the lack of management-- by K+ S Management.
ANDREW ROSS SORKIN: Okay. Now, let's turn to our newsmaker of the morning. Ben Bernanke served as chairman of the Federal Reserve from January, 2006 through January, 2014. He took the helm as stocks and the housing market were soaring to record heights. Not long after that, he had to help rescue the nation from the brink of financial collapse. Charting the course of his tenure at the Fed from the day he took the reins from Alan Greenspan till the day he passed the torch to Chair Yellen, the DOW gained about 45%. But tracking the markets from the depths of the great recession in 2009 until his departure, and you find that the blue chip index more than doubled. That eye popping performance has earned the chairman legions of fans and just as many critics. Nearly two years removed from-- leading the Central Bank, the question, of course, is are many of the problems now facing the global economy the result of years of easy money from the Federal Reserve? China's slow down Europe's debt crisis and the income inequality we keep talking about. They're all issues we are ready to tackle this morning. And so, Steve Liesman is here to begin this conversation with the chairman. Thank you, Steve, and thank you Mr. Chairman for being here.
STEVE LIESMAN: Andrew, thanks. He has been praised by presidents, savaged by critics. Joining us now, former Fed chairman Ben Bernanke. His new book published today The Courage to Act: In Memoir of a Crisis and its Aftermath. Details what he calls the darkest days of the financial crisis, when he, "Stared into the abyss." And the behind the scenes struggle to enact the innovative policies that he believed saved the economy. Thanks for joining us, Mr. Chairman.
BEN BERNANKE: Thank you glad to be here.
STEVE LIESMAN: Let me ask you-- it's the crisis and its aftermath and I wanna focus right now on the aftermath. Are you surprised and are you disappointed that, after six years of 0% interest rates, a $4.5 trillion balance sheet, that this economy still struggles with 2% growth?
BEN BERNANKE: Well, the low growth is coming not from the recession- per se. I mean, we've come back quite a bit. Unemployment's down to 5%. So we've come pretty close to full employment. The slow growth is coming from slow productivity growth. You know-- output for workers has not been growing quickly. And why that's happening, it's not fully understood. It doesn't-- I don't think it has much to do with monetary policy. It has to do with the ways of innovation. We saw slowing in productivity growth even before the crisis. So I think that's part of it. But-- clearly, one of the issues is that-- we've been relying too much on the Fed. The Fed has been the only game in town. It's been doing most of the policy heavy lifting for the last few years. We need to see more- action from other policy makers.
STEVE LIESMAN: But when you think about six years of 0%, wouldn't you have expected at some point in time that there would have been this pop? That we wouldn't be doing what we did, for example, in the first quarter. 0.6% growth and concerns almost every quarter that we're going back into recession.
BEN BERNANKE: Well, we're in a slow growth, low real return economy. Not just in the U.S., but everywhere. And, compare the United States with Europe, compare us with Japan, other industrial countries-- we've been making more progress. I'm not saying things are great. I--don't mean to say that at all. But monetary policy can only do basically two things. It can keep inflation low and stable and could help the economy come back from recession. And both of those things are happening. More growth. It's gotta come from productivity, it's gotta come from capital investment. Those things need some help from other policy makers.
STEVE LIESMAN: Let's talk about--
BECKY QUICK: Just very quickly, a follow-up on that. Is that a suggestion that this is kind of the new normal? That-- it's gonna be very difficult to fix this trend?
BEN BERNANKE: Well-- if you look around the world, it's not just the United States. Real interest rates are low everyplace. And we've got, you know, what I used to call the global savings glut. There's a lotta savings looking for return. There's not that much, you know, in terms of really high return investments available. I think that's not Fed policy. I think that's just where the world is now--
JOE KERNEN: Could be-- could be QE over there too though.
BEN BERNANKE: Well, if--it were true, if there were lots of high return investments available, then you'd be s-- you know, you'd see more capital investment than you're seeing. So I don't think it can be QE, no.
STEVE LIESMAN: Let's talk about where the Fed is right now, there's-- been a lot of talk about this is the year the interest rates would rise. And along comes a jobs report like last week, 143,000. Much less than expected, down with revisions to the prior two months. How would you, the policy-- as a policy maker have processed those-- that report?
BEN BERNANKE: Well-- you know, the Fed's plan to raise interest rates-- depends both on continued progress in the labor market and also inflation moving up to target, which-- it also depends on progress in the labor market because reducing slack, creating pressure on wages and prices is, you know, the source of inflation-- in their thinking. So-- the bad numbers or mediocre job numbers last couple of months certainly is a negative for that plan, no question.
JOE KERNEN: knowing-- people know you as a very-- great public servant and very, very humble. And-- I read that headline-- on the-- the op-ed of-- of The Wall Street Journal this morning, How the Fed Saved the World, and it was so uncharacteristically you, that—I was never a print reporter, but the editor came up with that, right?
BEN BERNANKE: Right. And your viewers should know that, not only does the op-ed writer not have a chance to write the headline, but I couldn't even find out what the headline was until it appeared in the paper
JOE KERNEN: And what was your response when you saw it?
BEN BERNANKE: Well, my response was, "This is not what I wrote about." What I wrote about was that the Fed has done what it can. Things are not great, but the Fed can't be expected to solve all problems. It's time for other policy makers to join in.
JOE KERNEN: But-- I'd hate to be quoted on that in the future as you Sying that 'cause you remember the cover of the magazine--The Committee that Saved the World was Rubin--
BEN BERNANKE: What can I--
JOE KERNEN: --Greenspan--
BEN BERNANKE: --what can I do about it? I mean-- but again--
STEVE LIESMAN: Write letter to the editor.
BEN BERNANKE: And I'll go on the record here-- I'm on the record saying that it wasn't my headline, it wasn't my intent.
STEVE LIESMAN: I wanna ask you about current policy. There's--a debate out there and I wanna know where you come down. Some people say, as you just pointed out, they've not hit their inflation target, we're in a low growth environment. We need zero percent interest rates. That's what the market would set, even by itself, or something close to that. The other one says, "You know, how can you argue 5.1% unemployment-- -- 2% growth, that there's no rationale at all for emergency level interest rates such as you set in the most dire moments of the financial crisis." Where do you come down in that debate?
BEN BERNANKE: Well, I would just point to the inflation rate. You know-- even if the Fed had no interest whatsoever in growth and-- employment, which, of course, it does, but it has a 2% inflation target. It needs to get inflation up to that target. And-- you know-- easy money is justified by the need to get inflation--up to the target.
JOE KERNEN: Was growth good in the '50s and '60s with inflation under 2%? How can we possibly know what an optimal inflation rate is
BEN BERNANKE: Well, we know that--
JOE KERNEN: What was it in the '50s and '60s?
BEN BERNANKE: It was low.
JOE KERNEN: And they had great, robust growth?
BEN BERNANKE: Yes. But there's many factors involved. And, you know, there's-- you're probably gonna tell me next that-- deflation happened in the 1870s too, which is also true.
JOE KERNEN: I just wonder if we know-- if we actually know what--
BEN BERNANKE: Well, we do know-- we do know, in a world where there's low demand and low real returns, the risk happens that, you know, if inflation is so very, very low that it's close to deflation. The risk is that ordinary interest rates will be low all the time. With very low inflation, ordinary interest rates will be very low. What happens when there's a recession? There's no place to cut. That's part of the problem.
JOE KERNEN: Now you're makin' the argument a lotta other people make about where we are now--
STEVE LIESMAN: Should we raise in order to have some ammunition to cut.
BEN BERNANKE: No no no that doesn't make any sense. If you-- if you raise rates too early and you kill the economy, that doesn't help you.
ANDREW ROSS SORKIN: But the flip side-- and we were talking about this-- this morning, with Trian making investment in GE and suggesting, for example, that they borrow some more money so that they can do more buybacks. You look at what's going on in corporate America, is-- has the policy itself perverted the way businesses act?
BEN BERNANKE: No, I-- don't think so. It's low return economy. Low return, low cost to capital. There's not-- as much capital investment as we'd like, but you've seen housing coming back. You've seen autos being very strong. You've seen the economy-- using up slack, you know? I mean, compare us to Europe, where they didn't do QE --and there's a big difference in unemployment.
JOE KERNEN: But people say that corporations-- at this point, the reason they're not making capital investments is because they're able to buy back their stock at low rates and reduce the outstanding shares, earnings to share growth up. They're compensated on stock prices going up. So instead of doing the long term things like hiring and capital-- investment, that they're financially engineering results because the… And then they also said they're-- they're doing mergers and acquisitions, where-- when you cut employment and you cut manufacturing you're not expanding plans. Okay, so-- so all these things end up being-- a misallocation of where capital would normally go. And that could be part of the problem of why we're not growing.
BEN BERNANKE: No, I don't think so. There's no reason. If you could do mergers and acquisitions and you could also do capital investment, there's no reason why they're, you know, mutually exclusive. And-- it looks to me that again-- you look across the whole range of interest sensitive spending, including capital investment equipment and research and development, by the way, which has come back very strong. You look also at autos and houses and other interest sensitive spending. And it's been enough to help bring us back to 5% unemployment.
STEVE LIESMAN: Ben, I wanna ask a question about-- the critics. They-- appear repeatedly in your book w-- with the antagonists, there's not a single person. And you talk about the crisis giving rise to certain extremism in the political system. When you look back and think about how you handled the critics, are there things that you would've done differently?
BEN BERNANKE: Well, I mean, I did my best to make my case. That's-- really all I can do. I think the one thing that-- as I go back and think about what-- you know, what we did during the crisis, we were so engaged in trying to deal with the, you know, the weekend emergencies and-- the chaos in the markets and in the economy, I don't think we did as much as we could have. We did a lot, but we didn't do as much as we could have to explain to the public what we were doing and why we were doing it, you know? And I went on 60 Minutes, I did a bunch of things to try to explain what we were doing. But still out there was a lot of view that, "Oh, the Fed is just helping Wall Street. They're not helping us," and so on. And I-- you know, I think we had done more of that, maybe some of that-- some of that-- criticism would've been diffused.
STEVE LIESMAN: For the record you didn't do Squawk Box—just to be clear about that
BEN BERNANKE: Well-- well--I wanted to talk to, you know, everybody in the economy, not just investors, so--
STEVE LIESMAN: Viewership is wide-- here. We have a lotta people who watch.
BEN BERNANKE: Yeah, I know.
STEVE LIESMAN: We'll talk about the critics-- a little bit more in the next block.
BEN BERNANKE: Perfect.
JOE KERNEN: That's right because when-- we've met before and you said, "Oh, I thought maybe it's just from watching on TV," which means you do watch is
BEN BERNANKE: Oh yeah, of course. Yeah, I do.
STEVE LIESMAN: And there's a lot-- we'll talk about this later, but there's a lot in the book, Joe, about how the role the markets play in the decision making--
JOE KERNEN: Now—how did you get an embargoed copy. You know, Andrew went sneaking around
ANDREW ROSS SORKIN: I went-- I went--Independent bookstore over the weekend.
JOE KERNEN: Well, you know, I don't think I don't-- I don't approve of either one of your actions. Anyway, we will- be back we're gonna ask the chairman if the people who helped cause the financial crisis paid a heavy enough price. Should more CEOs and bad actors be sitting behind bars? And maybe policy makers, congressmen, Fannie and Freddie officials. But we'll tackle-- a lotta things--that the critics have said. Should the Fed have done more to save Lehman? Did the government come down too hard on AIG, and has the era of easy money put the world at-- somebody worked really hard-- on this. And I have to read it because they-- really did a good job. On another major financial crisis, our special conversation with Ben Bernanke continues when Squawk Box returns.
BEN BERNANKE: Yeah, thank you.
JOE KERNEN: Thank you.
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RICK SANTELLI, RECORDED: This is America. How many of you people wanna pay for your neighbor's mortgage, that has an extra bathroom and can't pay their bills, raise their hand? How about we all right. President Obama, are you listening?
MALE VOICE: How about we all stop payin' our mortgage? It's a moral hazard. This is, like, mob rule here. I'm gettin' scared.
RICK SANTELLI, RECORDED: We're thinkin' of havin' a Chicago tea party in July. All you capitalists that wanna show up to Lake Michigan, I'm gonna start organizing--
JOE KERNEN: I'm just glad I was-- I was there, but I wasn't really there. I'm like Forrest Gump. I'm looking at everything while You know, the turning down kids at colleges, you know anyway, that was Rick Santelli's famous-- rant from February of 2009. In Fed Chairman Bernanke's new book, The Courage to Act, he talks at length about the withering criticism he feels that he endured from the pundits, the politicians and Wall Street. And at one of our delivering alpha -- conferences, one of the louder-- voices in the crowd was legendary investor Stan Druckenmiller, who said Mr. Bernanke back then-- in his words, was running, "The most inappropriate monetary policy in history of the developed-- world." We're gonna talk about-- this-- and other things. And I'll approach it this way-- Mr. Chairman. Just back to-- to buybacks just real quickly-- I've been told that-- for non-financial companies, that now 50% of their EBIT, of their earnings before income and taxes is now being spent-- on buybacks. And it's doubled in-- in the past couple of years. And they're able to--borrow more money. Previously, when you get to this level, it's possible that-- that it's coincident with another top in a business cycle because -- it's a law of diminishing returns for what they're trying to do. And it's just financial engineering. You have taken issue with the Journal saying you're taking a victory lap and--you've saved the world because at this point, we're not out. And the $4 trillion-- we don't know how we're gonna get out. And we're in the early innings of your-- of your legacy. When will we know that everything's gonna be okay in terms of-- if we were to go into another recession right now, what would we do?
BEN BERNANKE: Well, that's the point. I mean, the Fed has been using easy money because the economy's needed a lotta support. I mean, we had done what Druckenmiller and others wanted in 2009 and raise interest rates, we would still be at 10% unemployment--
JOE KERNEN: Well, Delivering Alpha year and a half ago, so--
BEN BERNANKE: Well, whatever. I mean, you know-- you know, the policy has been right in the sense that the economy clearly needs the support from monetary policy. It could use help from other parts of-- and Druckenmiller's-- protégé Kevin Warsh, my good friend from-- from the board-- you know, he wrote the same-- he's made the same point many times-- that we need to see more help from fiscal policy, from other parts of the government. The Fed can't do it all. That's basically-- you know, that was the argument I was trying to make in the--
JOE KERNEN: I know for a fact that-- that-- that-- that Kevin thinks that part of the continuing sluggishness-- in this sixth or seventh year of a recovery is because of the Fed, not their-- it--
BEN BERNANKE: No, I don't-- I don't really see it. But I would agree that a better policy would be a better mix of monetary, fiscal and other policies. And the fact that the Fed is the only game in town means the Fed has to do too much. The Fed is being relied on too heavily by--
JOE KERNEN: But-- when you--decide that you're going to conjure animal spirits and hopefully the fthe underlying economy catches up with-- the asset-- the price of assets going up from-- easy money, and I understand that rationale. But you must think in the back of your mind that some people are doing things, taking risks, moving out the curves that they shouldn't have done. And-- and there's no way to gauge how much, how big, how-- whether that comes home to roost in a horrific way.
BEN BERNANKE: So financial stability, obviously after what we've been through, is-- a huge concern. The Fed is very, very engaged in this. Under my chairmanship, the Fed restructured itself internally to put lots and lots of staff and resources into-- you know, monitoring the whole system, looking for ways to, you know, address risks. And that's the right way to think about it. I mean, I'm not saying there's not risks. You need to address them. But then the question is, in order to address those risks, would you do the wrong monetary policy for the economy?
STEVE LIESMAN: So-- so would you weigh in on what Stan Fisher spoke about just last Friday, which is this notion of -- should monetary policy be used to create or to worry about financial instability in the sense that you would raise rates now in order to ward off some of the excesses that Joe was talking about?
BEN BERNANKE: Well, it should be a last resort because you have to raise rates an awful lot, for example, to have the kinds of effects, you know, Joe was concerned about. And we don't even know very much about what the linkages are. I mean, you know-- arguably, if the economy's really weak because you raised rates too soon, that could cause financial problems as well. So the right thing to do first is do everything you can on the regulatory, supervisory, macro prudential front. And then, if nothing else works, then you can think about monetary policy. But it's really self-defeating to use the wrong monetary policy--
STEVE LIESMAN: Except there's an assumption in there, which you've already proven wrong and you were at the helm when this happened, which is you missed the bubble. You missed it-- '07. Eventually, as the book chronicles, you come to see the seriousness of what's happening. What assurances can you give anybody in the public that the Fed will see the next bubble coming?
BEN BERNANKE: Well, you can't. You can't. But it wasn't-- you know, I think that misrepresents, you know, what we saw and what we didn't see. We knew house prices were really high. We knew that subprime mortgages were a problem. What we didn't see was the extent to which the financial system was endangered and driven into panic by that problem. Subprime mortgages were a relatively small asset class. But what happened was that they created distrust by investors in all the securitized-- you know, in-- all different kinds of-- of securitized assets. And caused a panic that caused money being drawn out of all different kinds of assets. And that panic is what really created the crisis. So it wasn't the fact we didn't know house prices were high. We knew house prices were high. But what was the problem was the weakness in the financial system itself. And there, the first line of defense has gotta be more capital, tougher oversight. Those sorts of things to make the system more resilient to whatever shock comes along.
BECKY QUICK: Mr. Chairman, can I ask you though-- one of the things you talked about is how you were looking at so many different arenas. How the Fed changed to be looking at all these issues. One of the criticisms has been that the Fed used to have two mandates, a dual mandate. Chairman Greenspan has told us he only paid attention to one 'cause he figured the other would take care of itself. He paid attention to inflation, didn't worry about unemployment. The criticism is that now the Fed has a lotta different mandates, 20 or more if you start looking at the global economy, if you look at what happened with China's stock market, if you look at our stock market, if you look at the strength of the dollar. And those are some of the things that Chairman Yellen has cited for why they didn't raise rates last month. Are we right to be concerned about the idea that there are a lotta different mandates?
BEN BERNANKE: No. No, no. So all those things you mentioned, like the strength of the dollar, are only important because they affect the fundamental mandate. The mandate of monetary policy, given to the Fed by Congress, is maximum employment and stable prices. That's what monetary policy should be aimed at. Now, financial stability, the Fed was actually created in 1913 precisely for the purpose of ending financial panics and promoting financial stability. That is also-- that's the third objective I think. And-- but that's one that shouldn't be pursued, at least in the-- in the first instance, by monetary policy. But should be pursued by regulatory, supervisory and other kinds of actions. And-- and to be tough about that. And I think that's our best chance, really.
JOE KERNEN: Mr. Chairman-- in-- in passing, we just talked about the securitization of things was a natural-- inclination for Wall Street with all its easy money and subprimes seem low. There was demand around the world for product. Yet, you also-- the U.S.A. Today decided to run with your-- populist comment about, "There should've been a lot more individuals go to jail." And-- I'm just not sure that making investments, inflating a bubble-- tryin' to take-- d-- being wrong about-- whether the party's gonna continue forever there, or Chuck Prince, you know, that we're gonna keep dancin' while we're dancing, I'm not sure that's fraud. And-- the populist notion that-- that a lot of these people should have gone to jail. I think it's-- it's counterproductive both to the-- the actual narrative of what happened. Like, who specifically? Which firms--were housing-- AIG maybe because they didn't back their CDOs? I don't know if you can just-- by securitizing and giving product to people that are looking for yield-- when you've got the whole world-- basically caught up in a housing bubble, I don't see how the-- that's not fraud.
BEN BERNANKE: I think that's the first time I've ever been called a populist, I have to say.
JOE KERNEN: Right. But isn't that a populist idea okay-- okay, who-- okay, so which action should people
BEN BERNANKE: So what I'm talking about, what we do know is that, for many big banks, for example, the Department of Justice assessed billions and billions of dollars of penalties--
JOE KERNEN: Whoa.
BEN BERNANKE: --against the firms for, you know, bad behavior of various kinds.
JOE KERNEN: But a lot of them haven't admitted they did anything wrong—they did that because it was a shakedown that doesn't mean criminal culpability for any individuals
BEN BERNANKE: I wasn't saying that all I was saying was that seemed to me like the wrong strategy. If you think there is criminal culpability, then why-- (BACKGROUND VOICE) th—
JOE KERNEN: Where was it though
BEN BERNANKE: well, there was-- look at the LIBOR, you know--look at the dollar--
JOE KERNEN: That's-- that's--
BEN BERNANKE: Well, I-- I-- Joe--
JOE KERNEN: That's not financial--
BEN BERNANKE: I'm talkin'-- yeah, I'm talkin' about traders. I'm talkin' about people, you know, in the whole structure. Not necessarily the CEO.
BECKY QUICK: I think he's arguing your point.
BEN BERNANKE: I'm-- I'm--
BECKY QUICK: He would rather see them go after the bad actors--
ANDREW ROSS SORKIN: If there are bad actors, he should go after them--
JOE KERNEN: making bad investment decisions and losing money and being----bubble is not--
BEN BERNANKE: Making bad investment decisions is—not criminality
JOE KERNEN: Securitizing CEOs is not fraud. And--
BEN BERNANKE:, No, no.
BECKY QUICK: No, but I agree with him. If they think there is criminal activity they should go after them
ANDREW ROSS SORKIN: Yeah, but--gonna continue this conversation. We gotta sneak in a quick break. We're gonna have a lot more-During the break. We have a lot more coming up from Ben Bernanke when we return. He's got a new book out. We are back in just a moment.
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ANDREW ROSS SORKIN: Welcome back to "Squawk Box." We have a very special guest with us right here on the set this hour, Ben Bernanke, the former Federal Reserve chairman. He's got a new book out and I spent the weekend reading it. And there's one part of it, of course, that I'm fascinated by which, of course, is the Lehman weekend. We were just talking during the commercial break how everything always leads back to what happened to Lehman. Could it have been rescued? Could it have been not? What really happened? And I think that your book, for the first time, articulates really what happened in a way that I don't think anyone has ever said, and kind of ends the debate. Which is to say that you think there was no way to save it.
BEN BERNANKE: No, I don't think there was. I mean, we tried really hard. And I say, you know, at the time, conventional wisdom in the media, elsewhere, was let it go. Let it go. We knew, we were afraid that it wasn't just the company itself, but the fact that the markets were already in panic. And the failure of that company and all of its, you know, ramifications would raise the level of panic to a whole new level that would be extraordinarily destructive. So we tried very, very hard to avoid it. Unfortunately, the tools that we used in other cases were not available.
ANDREW ROSSS SORKIN: But not only that, you've suggested in the book that some of the view that's taken hold that it could be saved was your own doing. That you and Hank Paulson agreed to purposely be vague about what you actually had done and what you could or couldn't have done. And that that may have led to the misimpression.
BEN BERNANKE: Well, in the few days, I mean, not permanently, but in the few days following the collapse and remember, that week was you know, Merrill Lynch was taken over, AIG was rescued. You had pressure on Morgan Stanley and Goldman Sachs, you had Wachovia. It was an enormously tricky week. And it was our decision, our agreement that we would be reticent about being completely clear that we had not been able to save Lehman because we were afraid that that would create even more panic. That may not have been the right decision. I certainly admit that. But that's what we did.
STEVE LIESMAN: Ben, one of the great values of this book is, as my opinion anyway, is a kind of blueprint for the next crisis. So do me a favor. Go back in a time machine. If you could set up the Lehman weekend in a perfect way for the next policy maker, obviously you don't want it to fail. And you go back in this book to Bear Stearns and say, "They didn't pick up, they didn't get the hint from Bear in time over that six month period." How would you do it differently so that you don't end up with this awful result on Monday morning?
BEN BERNANKE: Well, I mean, as I talk about in the book you know, Lehman was not – it was not a bank. You know, it was a separate investment bank, a broker dealer. And we had no – the FDIC could tell a bank, "Raise capital or we'll close you down," you know, and pay off the depositors, you can't do that. We couldn't do that under the legal structure we had in the summer of 2008. So there's a lot of verbal pressure. I mean Tim Geithner talked to Dick Fuld 50 times. Paulson was always on the phone talking to them, "Raise more capital." They did raise some capital. But we didn't have really the tools to force them to raise more capital. They were trying. They didn't have much luck. And then when the time came in September and they were at the brink of failure, you know, we didn't have the tools to save them. There's been some progress on that, by the way. I mean, there's new tools that were added in Dodd-Frank that we could use in a future circumstance.
BECKY QUICK: But there were also limitations.
STEVE LIESMAN: There are more limitations, too.
BECKY QUICK: Which Buffett and others have been concerned that the Fed would not be able to do a lot of the actions they did the last time around.
BEN BERNANKE: Yeah, no. There's no – that's right. I'm not saying the solution is completely perfect.
ANDREW ROSS SORKIN: When you look at Lehman's assets today, by the way, a lot of them have come back into the positive. Were there numbers or models that you looked at that weekend that – specific numbers where you said, "Okay, we just can't do it"? Where you knew and numbers that were built by the Fed, as opposed to the other banks? I mean, this has been one of the other debates about that period.
BEN BERNANKE: Well, there was a lot of – I mean, the New York Fed, which was where the work was being done – I was in Washington. The New York Fed was where the work was being done. The staff and leadership of the New York Fed was conferring closely with other financial institutions because they had the expertise to look at all these assets and they were all working together to try and evaluate it. But in the end, it wasn't some kind of legal decision are they solvent, not dissolvent. The question was something we could identify. How much do they have in the way of assets that we can lend against? That you know, that are collateralizable. And would that be enough to stop the run? And the judgment was no. If we lend to them, all that's going to happen –
ANDREW ROSS SORKIN: But people will always say it was a judgment, right?
BEN BERNANKE: Well so the judgment was the following. That it looked very likely to us that if we lent to them against the collateral they did have, all that would happen would be the other creditors would pull out as fast as they could and just leave the government with this hulking – you know, smoking hulk.
STEVE LIESMAN: But Andrew, the book doesn't make it close. It wasn't, like, if the Fed put in a billion here or two.
BEN BERNANKE: No, no.
STEVE LIESMAN: It was a $60 billion or $70 billion potential hole.
BEN BERNANKE: That's the point. It was – the firm was, you know, I think clearly insolvent. And certainly, under the pricing that was going on at that time. And for that reason, of course, Bank of America said, "Look, there's a huge hole here. We can't buy this firm." And we didn't have capital. So it's important to understand the timing. Fannie and Freddie, there was a special act of Congress to put capital in Fannie and Freddie. The TARP, which came after Lehman, allowed the government to put capital into other firms. Lehman was in the middle. There was no provision to put it in capital.
ANDREW ROSS SORKIN: To Joe's question about though, crime—
JOE KERNEN: No, let's talk about AIG. Was AIG treated differently in a punitive way because there was a notion that there was – that they were even worse actors?
BEN BERNANKE: No, it had nothing to do with their – what kind of actors they were. I mean, it was a very, very difficult decision for us to intervene with AIG. We felt we had to, given that Lehman had failed and the system was in crisis.
JOE KERNEN: But you didn't open the Fed window for AIG when other non-commercial—
BEN BERNANKE: We did open the Fed window.
JOE KERNEN: The Fed window—
BEN BERNANKE: $85 billion dollars we lent them.
JOE KERNEN: Did they get the access to all the liquidity that—
BEN BERNANKE: Absolutely. They got all they needed in order to survive.
JOE KERNEN: Why did the court rule in favor of AIG?
BEN BERNANKE: The court objected to the fact that we charged a high interest rate and that we took equity for the taxpayer in doing that. But in making those decisions – so we gave them everything they needed to survive. But in being tough, it wasn't because we said, "Oh, these are bad people. We need to punish them." It was because we were doing something for AIG we weren't doing for the, you know, there were thousands of firms in the country that were going bankrupt without any help. Here we are, intervening to prevent this company from failing. And we had to do everything we could to minimize the windfall that we were giving to AIG stockholders.
JOE KERNEN: There're so many – it was a perfect storm because you had the ratings agencies thought that there was, you know, credit default insurance. That allowed them to give AAA. So everybody had plausible deniability for what they were doing.
BEN BERNANKE: Absolutely, yeah.
JOE KERNEN: It was, like, a perfect storm
BEN BERNANKE: It was a horrible week, I have to say.
ANDREW ROSS SORKIN: Do you, you know, talking about crime or the criminal element in this, do you look at a Dick Fuld or any of the CEOs that were involved in this and say, "That was a crime," as opposed to stupidity?
BEN BERNANKE: No, I mean, I wouldn't say that. I think that there was, you know, very irresponsible behavior. For example, as you well know, Lehman just blew through all of its missed parameters. AIG was really betting in tremendously irresponsible ways on the subprime market, not only by ensuring all this subprime all these CDOs, but they were also you know, through the security lending arm, they were also basically doubling down on RMBS, on MBS—
JOE KERNEN: But they weren't supposed to have collateral for all the credit default swaps? Or was it—
BEN BERNANKE: No. They didn't.
ANDREW ROSS SORKIN: No.
STEVE LIESMAN: No. But that really raises –
JOE KERNEN: They didn't, but were they by law a requirement—
BEN BERNANKE: No, no.
STEVE LIESMAN: No, they were not.
BEN BERNANKE: I didn't say – I have no reason to say it was criminal, but I think that it was very, very irresponsible.
STEVE LIESMAN: So Ben, this raises the question, when you read the book, it's a chronology of interventions. And I don't know, I'm sure you didn't start out there. I'm sure that you started out with the notion, appointed by a Republican president, that the market should take care of itself. And yet, you go in and you guarantee the commercial paper market. We raise the FDIC thing. One after another, an intervention. Do you look back on this and say, "Is there a way to get back to a better place where the market does more of its own regulation? Or is there now ingrained in the American financial system this notion of Uncle Sam to the rescue"?
BEN BERNANKE: Well, that's what we want to avoid. So first of all, I mean, part – one of the criticisms we get is, "Oh, the Fed was too slow to act and to intervene." And one of the reasons that it took us a while, you know, in 2007 to begin to get aggressive was precisely because we were concerned about this. And we didn't want to create a Bernanke put. We didn't want to, you know, tell the markets that whenever something bad happened, the Fed would rescue. So we were trying to balance those things when the panic got so bad that, obviously, it needed, you know, drastic intervention. And, of course, we threw everything we had at it. Now, after the fact, we want to do everything we can to make the markets – to get rid of the moral hazard. To reduce the too big to fail problems and to make markets self, you know, self-regulating. And some of the ways we do that, lots more capital for banks. Banks are much better capitalized than they were. They have to have not only capital, but they also have to have loss absorbing bonds. So the more that the losses – say of banks, for example, fall on their owners and creditors, the more market discipline there's going to be. So that's kind of the direction we're trying to go or they were trying to go.
ANDREW ROSS SORKIN: Talking about politics, he called you Republican. In the book, you talk about how Washington has put you off of politics and that, to a large degree, the Republican party has moved too far right for you.
BEN BERNANKE: Well, there's this, you know, there's obviously a populist wing on both sides, on both the Democratic and Republican side. But a lot of the anti-Fed, you know, let's audit the Fed type legislation, not strictly from the Tea Party, but some – a lot of it's come from there. Some of it's come from Occupy Wall Street as well. So, you know, I took a very nonpartisan perspective when I was Fed chair. I think that's what's appropriate. And I've tried to stay very much in the middle and stay away from the extremes on both sides.
JOE KERNEN: Do you think there should be some rules based decision making from here on out? More so because you do kick it around here. It's, like, you know, if the island of Cyprus has a currency problem, we're not going to raise. I mean, that's one person in charge of a lot of stuff. If they're wrong or subjectively wrong, we're all at risk.
BEN BERNANKE: Well, you want to have a government of laws, you know rather than men, as they say, as much as possible.
JOE KERNEN: Right, right. A lot of discretion the Fed chair gets, though.
BEN BERNANKE: But there are circumstances when, you know, you just need to have a dramatic response. And I would say some people don't appreciate entirely that – and this is something I try to explain in the book – that this crisis was very similar in structure and in form to crises that took place 150 years ago. And we know from there how central banks respond to those.
JOE KERNEN: You told me not to go back to the 1950s and 1960s. Now you're going back 150.
STEVE LIESMAN: 1870.
BEN BERNANKE: Alright, so I won't go to the 19thcentury. 1907 was a great one. JPMorgan intervened as a private citizen to stop a panic. That's what led to the creation of the Fed. The Fed's job is to intervene and stop panics. But you also have to have strong regulations so that panics are not, you know, common occurrences.
JOE KERNEN: I was actually talking about the current Fed chair. It seems like there's a lot of discretion on when to do what now. And I'd like a couple of rules.
BEN BERNANKE: Well, this is much, you know, there's targets. There's – when I was there, we put in the 2% inflation target. That's a very clear, quantitative guideline.
ANDREW ROSS SORKIN: Okay, we've got to slip in a quick break. Mr. Chairman, thank you. Appreciate it. We've got to talk about Paul Giamatti too. He never saw him.
STEVE LIESMAN: You never saw it?
JOE KERNEN: I haven't seen it.
ANDREW ROSS SORKIN: Good for you. I think you came to the premiere –
JOE KERNEN: No I did not.
BECKY QUICK: When we come back we will have much more from former Fed chairman Ben Bernanke. In the meantime, take a look at the futures. You're going to see that the DOW futures are up by about 120 points above fair value. S&P futures up by 14. The NASDAQ up by 30. Stick around. "Squawk Box" will be right back.
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BECKY QUICK: Welcome back, everybody. We have a special guest with us on set this hour. Ben Bernanke, the former Federal Reserve chairman who is out with a new book today. It's called The Courage to Act. Mr. Chairman, we talked a little bit at the top of the hour about how you think that this is an economy that is not necessarily one that fits with the idea of raising rates. But six years in, is it an economy that still fits with zero interest rates?
BEN BERNANKE: Well, again-- so these are--we're at this point, obviously, the Fed is looking at--this. And they're tough calls. And I certainly don't wanna be second guessing. But it's not evidence to me that policy is too easy because-- again, because inflation is very low. And, you know-- we're just now approaching sort of a full employment level of output. So-- it's a tough call. But, you know, again, there-- the folks who--were arguing a few years ago that the Fed was, you know, creating this radically expansionary policy-- you know, they were predicting high inflation, we haven't seen it. So that's an indication that policy is--not radically easy anyway. And-- we'll see-- you know, and again, obviously, the-- the Fed is looking to normalize over time. And they're gonna make some tough calls about how to do that. But, you know, it's-- again, inflation is very low.
BECKY QUICK: We had one market watcher who joined us earlier this morning, Mark Grant. And he suggested that the Fed should sell down or let run some of its balance sheet-- a trillion dollars. Let that run off before they raise interest rates. What do you think about an idea like that?
BEN BERNANKE: Well—Joe had an earlier comment about how are we gonna get out of $4 trillion, that kind of thing. That-- that's actually not a big issue. You know, when the time comes, the Fed is just gonna let the balance sheet run off. And I don't think--that's pretty straightforward. I don't think that's gonna create any particular problems. But I think that the concern is that, you know, that they have less knowledge about how that would work, how that would affect the markets than they do about how short term interest rates would. And so the plan-- and the Fed has been very clear about this, is to begin by raising short term interest rates, which they can absolutely do, even if the balance sheet is still $4 trillion. And then, if the economy is still, you know, making-- forward progress, then they can stop reinvesting and the balance sheet will passively run off over time.
JOE KERNEN: What was the first goalpost for when the accommodation was end?
STEVE LIESMAN: Six and a half and two--
BEN BERNANKE: No, no, no-- that's—not a goal post
STEVE LIESMAN: hold on, hold on, hold on, let's hear it, yeah.
BEN BERNANKE: That was not-- that was not a trigger. That was not-- we never, ever said that we--
QUESTION: But the goalpost has moved?
BEN BERNANKE: No, it has not moved. Nothing-- it has not moved. The goal post is 2% inflation. We're not there yet. The-- what we s-- 6.5% was we promised as a form of forward guidance, we promised that we would not-- tighten policy at least until we got to 6.5%. We didn't say we would tighten when we got to 6.5%. And I said that many, many times. And it was very clear in the statement. And it's just wrong to say it was something else--
BECKY QUICK: Yes, I mean--
JOE KERNEN: But it's hard for-- you know, with inflationary expectations, maybe you can look at some future-- indication of it. But it's really hard--when-- inflation is being conjured up. And so you-- we had this great-- fracking revolution here, which may be one reason why inflation is so low. But isn't it-- if we're one six or one five-- and, you know, we're probably not headed back down the other way, is there anything wrong with being-- slightly preemptive, not a lagging
BEN BERNANKE: Well, that's the debate. I mean, the debate is that-- you know, given that it takes-- you know, that market policy takes time to work, those people who would like to raise rates now are saying, "Well, we don't see inflation yet, but we need to move sometime soon in order to anticipate it"
JOE KERNEN: Because that's the only thing we hear, from you, from them. It's all inflation, everything else indicates we shouldn't be at emergency measures in terms of--
BEN BERNANKE : Why do you use the term emergency measures. Zero--
QUESTION: Zero--
BEN BERNANKE: Yeah. But-- well, zero—
JOE KERNEN: we've never been here before at 5.1%.
BEN BERNANKE: --is-- so zero is 3.5 percentage points above what the-- below, sorry, what the Fed thinks is the long run Fed policy rate, right? In-- 2003, we had a 1% rate and we ended up at 5.25%. So we were able to go 425 basis points from 1% to 5.25%. so that's 75 basis point more emergency
BECKY QUICK: Yeah but zero you can't go any lower.
BEN BERNANKE: You can't go lower than zero. And that's-- that's a reason--Actually, that's a reason to be cautious.
STEVE LIESMAN: Can I just shift gears here real quickly? Ben, how would you process China right now? There's a lotta people who say-- the Fed chair. Janet Yellen said it was essentially a reason not to move rates. Other folks say that the danger's overblown. How do you process it?
BEN BERNANKE: Well-- you know, I don't see in China-- and I'm certainly no expert on China, but what I see following the, you know, the-- information that I can, is that China's slowing down. But it was something we broadly anticipated-- to happened because it's making a transition from a heavy industry, infrastructure, construction export led economy, to a more market oriented retail services type economy. And that necessarily is gonna create a slowing pace of growth. Now, is this slowing more than that would indicate? It's hard to tell. I mean, what all we know is that the-- is the heavy industry part is slowing. And that has implications for other emerging markets. The-- question that-- I think that-- the Fed was talked about was that, you know, we knew China was slowing. But then in August we saw a very sharp market reaction to the economy news that we should've known already. And so the question arises, is there something happening that the markets are telling us that we don't know? And when in doubt--
BECKY QUICK: Which is funny 'cause the markets are saying, "Is there something the Fed knows that we don't know--"
BEN BERNANKE: Yeah-- I know. There's a little bit of a game there. But--given that-- you know, the-- Fed was, you know, trying to avoid taking action, you know, and then learning right after the meeting that, oh God, there's something happening we don't really understand. So it's just a case of waiting to learn more.
STEVE LIESMAN: But is there systemic risk here?
BEN BERNANKE: Well-- the-- IMF has talked about some risk in emerging markets. And that would-- and the-- effects would be from-- a weaker China affecting commodity prices and exports from emerging markets putting pressure on them, causing their currencies to weaken, causing pressure on their dollar borrowings which, you know, then become more expensive. So there's a bunch of mechanisms that have to be paid attention to for sure. China, hard to-- you know, we don't have a lot of information about what's going on inside. I wouldn't, for example, get particularly worried about their stock market problems. I mean, they--don't relate too much to their overall economy.
JOE KERNEN: M-- one more try. This-- this is the last one.
BEN BERNANKE: Promise?
JOE KERNEN: Yeah. (LAUGH) If-- if--
BECKY QUICK: Lying.
JOE KERNEN: Can we kind of agree that the benefits of-- and all this accommodation, it's hard really to know whether we're seeing anything great happening at this point. And therefore--if we're not getting any-- anything positive from it, just the notion that there may be some unknown dislocations. Bubbles that you're-- that you admittedly said that we view the Fed can't even identify. If we're not getting anything for it and we're possibly conjuring up future problems, doesn't that mean--that it's time--
BEN BERNANKE: When you say we're not getting anything for it, what you're saying is that you think the Fed could raise rates 100 basis points, it wouldn't hurt anything. That's not obvious. I don't think everybody would agree with that--
STEVE LIESMAN: Then maybe the dollar. But I know they've quoted-- all the CEOs don't-- don't want the dollar-- is that the third mandate? We have to make sure the dollar
BEN BERNANKE: No, no. It's relevant only in so far as that-- if you kill U.S. exports - a very strong dollar, that's obviously gonna have effects on domestic-- output and employment. That's-- the reason it matters.
JOE KERNEN: It's also possible the uncertainty of when they're gonna raise that's keep companies from doing things and--
BEN BERNANKE: Do you really think that's-- really think-- you take that seriously?
JOE KERNEN: I don't know.
BEN BERNANKE: I--
QUESTION: He's tryin' to think of--everything
BEN BERNANKE: If I'm a guy producing, I don't know, widgets, I'm much more interested in what's happening in the overall economy, in what's happening in the widget market. I'm not fixating on the Fed, I don't think.
JOE KERNEN: I don't think we make widgets-- anymore.
BEN BERNANKE: No?
JOE KERNEN: I don't think—
STEVE LIESMAN: We make it with chips now though.
BEN BERNANKE: Chips?
STEVE LIESMAN: Yeah, virtual widgets.
BECKY QUICK: Very quickly you've said several times that this was a tough call, what the Fed had to decide last time. What would you have decided?
BEN BERNANKE: Oh, I'm not gonna second guess it. I'm sorry, but it is a tough call. And I have every confidence that's Janet's been-- and her team are gonna do the right thing. But-- lots of issues there.
BECKY QUICK: We'll be back with more from former Fed chairman--
STEVE LIE: We're almost done.
BECKY QUICK: --Bernanke right after this.
STEVE LIESMAN: Almost done. Five minutes.
(BREAK IN TAPE)
STEVE LIESMAN: Let's get back to our exclusive interview with former Fed chairman, Ben Bernanke. By the way, out with a new book today called "The Courage to Act." Ben, one of the remarkable things about this book there – it's a recounting of all the things that happened – it is a factual recounting, it's also an emotion recounting. And tell us your worst moment during this crisis.
BEN BERNANKE: Well, I think the worst moment I think won't shock you, was the Lehman weekend and the knowledge that it was going to fail and the fear and uncertainty that was associated with that. And then the next couple of days, as we, you know, had to deal with AIG and talk to Congress, very tough.
QUESTION: What does that mean though, worst moment for a Fed chair? Does it mean you worried that the economy was going to blow up?
BEN BERNANKE: Oh, I was – yes, I was very worried. I mean, my whole background as an academic was studying the Great Depression, studying financial panics, their effects on the economy. And I saw we were, you know, having the granddaddy of all financial panics about to explode on us. And I thought the consequences would be tremendous.
STEVE LIESMAN: Was there a good moment? Was there a great moment you could think of?
JOE KERNEN: Besides today.
BEN BERNANKE: Besides today.
STEVE LIESMAN: Right. The crowning –
BECKY QUICK: Handing over the reins?
BEN BERNANKE: Well, you know, I think there was generally, there was a lot of – I mean, as an economist, what better job could you have? I mean, you had all these people helping you think about what's happening. And you're providing leadership for the global economy. It was in many ways, very satisfying.
STEVE LIESMAN: Does Janet Yellen call you for advice?
BEN BERNANKE: No, she doesn't do that. I think it's a good idea for me to keep my distance from that.
ANDREW ROSS SORKIN: I want to know about a different moment, which I thought would actually have been his worst moment. When he got the job, in the book, he calls his wife to tell her. And she says, "Oh no."
BEN BERNANKE: She was always more insightful about this. When I called her to tell her, she broke into tears and they were not tears of joy. She understood that it was going to be a tough road home.
STEVE LIESMAN: Ben, thanks for joining us today.
BEN BERNANKE: Yeah.
ANDREW ROSS SORKIN: Thank you.
BECKY QUICK: Thank you very much.
STEVE LIESMAN: Hopefully it won't be your last time here, but the beginning of a great relationship.
BEN BERNANKE: Thank you. Thank you.
ANDREW ROSS SORKIN: Good luck with the book. It was really terrific to read.
BEN BERNANKE: Thanks a lot.
STEVE LIESMAN: Wait, I've got to give you this right here.
JOE KERNEN: She must be happy now though because, obviously, people must thank you.
BEN BERNANKE: Oh, yes. She's much better off.
ANDREW ROSS SORKIN: Oh, here you go. A party favor.
STEVE LIESMAN: Party favor. "Squawk Box" bag.
BEN BERNANKE: Oh wow. Thank you.
JOE KERNEN: For the man who has everything.
About CNBC:
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d68906b2396188f55e92d69860ceea3c | https://www.cnbc.com/2015/10/05/glencore-shares-surge-in-hk-on-agriculture-asset-sale-hopes.html | Glencore shares surge in HK on agriculture asset sale hopes | Glencore shares surge in HK on agriculture asset sale hopes
VIDEO0:3300:33Glencore shares soar on asset sale newsMetals
Shares in beleaguered trader and miner Glencore rocketed as much as 72 percent on Monday in Hong Kong on hopes it would be able to cut debt with a sale of a stake in its agricultural assets.
In London, the company's shares followed on from the excitement in Hong Kong, surging to close urged to close well over 16 percent higher on the London Stock Exchange.
Reuters reported on Friday that Glencore is in talks with a Saudi Arabian sovereign wealth fund and China's state-backed grain trader COFCO, along with Canadian pension funds, to sell a stake in the assets.
In an announcement to the Hong Kong stock exchange, Glencore said that it was not aware of any reasons for the price and volume movements.
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Should you fear a ‘Glencore’ moment?
Glencore wants to sell some assets as part of a wider plan to cut about a third of its $30 billion in net debt, including raising $2.5 billion through a share sale, suspending its dividend and cutting costs by trimming its copper output.
However doubts grew last week that it would be able to pay down debt fast enough to withstand a prolonged slump in commodities prices. Its shares sank to a record low last week, down 87 percent from when it listed in 2011.
On Monday the stock rebounded in Hong Kong to a one-month high of HK$18.36, then eased to trade up 40 percent at HK$15.00 in its biggest one day gain, partly helped by higher copper and oil prices.
Follow us on Twitter: @CNBCWorld
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96a02afb987525160ec910c694439be5 | https://www.cnbc.com/2015/10/05/gold-near-highest-in-a-week-as-traders-see-us-rate-hike-delay.html | Gold gains 1% on softer dollar, views on Fed rate outlook | Gold gains 1% on softer dollar, views on Fed rate outlook
AP
Gold rose to its highest in nearly two weeks on Tuesday as the dollar fell in the wake of disappointing U.S. economic data that raised doubts over a Federal Reserve interest rate rise this year, while platinum rallied 3 percent.
rose 1.4 percent to $1,151.20 an ounce, the highest since Sept. 24, and was last up 1 percent at $1,146.91 an ounce. U.S. gold futures for December delivery settled up 0.8 percent at $1,146.40 an ounce.
The gains added to Friday's 2.2 percent jump, the biggest one-day rise since Jan. 15, which followed data showing U.S. employers had slammed the brakes on hiring over the last two months.
VIDEO3:3803:38More upside coming for gold: ProCapital Connection
Then on Monday, data showed the pace of growth in the U.S. services sector decelerated in September, though some analysts said a U.S. rate hike in December could not be ruled out entirely.
"The Fed is worried about the implications of continuing low inflation or even outright deflation because of low oil prices, but a December rate hike is still possible," Mitsubishi Corp strategist Jonathan Butler said.
Analysts also cited increasing international political tensions after Russia's warplanes violated the air space of alliance member Turkey at the weekend.
"Increasing tensions between Russia and Turkey are helping gold today... That should continue in the short term, but then the focus will be shifting back to what the Fed is going to do and the dollar," Commerzbank analyst Daniel Briesemann said.
The dollar was down 0.7 percent against a basket of currencies and global shares rose.
Read MorePrincess Leia gold bikini fetches $96,000 at auction
Platinum rose 3.1 percent to $940.25 an ounce, having hit a near seven-year low of $888 on Friday, offering industrial buyers a relatively good price, said James Steel, chief metals analyst for HSBC Securities in New York.
"Its ability to get over $900 has led there to be some modest revaluation of auto diesel demand going forward and may not be as dire as the knee-jerk reaction to the auto diesel issue," Steel said.
SPDR Gold Trust, the top gold-backed exchange-traded fund, saw its first outflow in two weeks on Monday.
Silver rose to the highest in more than three months at $16.08 an ounce, extending gains above its 200-day moving average. It has gained nearly 10 percent since Thursday's close.
Palladium reached its highest since June at $712.50 an ounce as it continued to benefit from expectations that demand for gasoline cars, where the metal is used in catalysts, would rise due to the Volkswagen diesel engine emissions scandal.
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