tv Worldwide Exchange CNBC August 20, 2009 4:00am-5:59am EDT
>> the chinese market seems to be positive. nikkei 225 is up 1.8%. the kospi is up 2%. shanghai composite, up 4.5%. the hang ang, get ago boost as a result, 1.9% and the bombay sensex is up 1.6%. this is the last time we checked, trading around the ranges of -- do we have the board for oil? there we go. $73.84. up 1.42. and brent is trading the other way, opposite direction, down 13 cents, $74.46 a barrel. bertha, over to you. good to see you. >> thanks, christine. interesting to see the die veteranence there. yesterday was the day to lead the market higher on an up note as we saw the surprise
inventory. we've got dow futures pointing to another higher start at least. they are about -- let's call it close to 60 points above fair value. nasdaq, s&p futures looking higher, as well. we've got a bunch of data coming out today. of course, it is thursday so all eyes will be on the weekly jobless claims. we had a surprise build last week. this week we are looking for a drop. take a look at the ten-year bund yield where it is trading at this hour. right now at 3.28%. we have bonds rallying just a little bit right along with stocks. take a look at the ten-year note. we have back below 3.5% at 3.49. all eyes are going to be looking forward to tomorrow as economists and the fed meet in jackson hole, wyoming. our steve leisman is there and he'll be reporting live on "squawk box" following this program. taking a look at gold, up just a frangz at $942.95.
joining us this morning to talk about what's been going on in these markets, quite a roller composter week so far. martin dean marnek and alexis dewann fund manager at global cap xa. alexis, i want to start with you. it seems as though these are the unsyncopal markets. everyone has been saying there is a lot of money on the sidelines. it seems every time we have a dip, folks come back in and put a floor on the market. is this sustainable? >> i think you're right. there's tons of money out there, especially in the money market funds. bur yeah, almost when you look at the big systemic risk, it's off the table currently. you look at indicators and ted spreads are trading at the same levels they used to at the beginning of the credit crisis. so this is encouraging.
the problem is on the economy and is it sustainable. it's interesting to see that most of the of the revenues from the company were slightly below expectation, although most of them beat on the earnings line. through a lot of cost cutling and a lot of layoffs. that may not be good for unemployment going forward. we believe it's a very difficult environment that many companies are going to face. finally, when you look at the insider trading, it's interesting how in august you see so many corporate insiders selling for almost $3 billion. and they only bought 19 million shares. so this is a ratio of 33, 32 to 1. so this is interesting to see corporate directors and insiders are not that above and they're selling currently, as we speak. >> so martin, if insiders are selling, should we be selling,
as well? >> well, i've been a bear for quite some time now. i certainly agree with alex's comments when he was talking about the earnings results coming through and the profits have been in expectations through cost cutting, not through growth. we've seen that in the u.s. and probably throughout the world. goldman sachs has been through headline growth here. china, we've seen two breakdowns in the prize. we've seen more or less a dead cap boun bounce today, which has been a recovery. it's giving you a warning sign already that these markets are overinflated and too high and china should not be directing the way the world market should be moving up or down. >> martin, that is exactly my question. this is christine here. why is china having a big impact on market sentiment these days? it never used to be in the past. >> i think it's more to do with fund shifts in that in the summer months, we've seen volumes decrease dramatically,
as they normally do. but we've seen a lot of funds flow into asia, into china and into hong kong especially. and with the stimulus packages coming through, they are not necessarily going into the right areas. we've seen an overspill into the stock market and into the property markets. so we've seen the asset bubble that's been talked about many times. you can see this coming through in the ipo side where you've seen concrete companies, shampoo, chemical companies on many times multiples that they shouldn't be trading on. microsoft, gold, these are traditional companies and they shouldn't be trading as witch as what we've seen. so the markdowns that we've seen over the past few days, for instance, proves that there's no substance behind the actual greed on cheap money. >> alexis, i want to take
advantage of the fact that you're speaking from zurich where we've had earningses out today which i think have been characteristic from this earnings season. and koroni, the travel company telling us that the global downturn has had an impact on their business and they are beginning to see tentative signs of recovery. two things we've heard from pleasant of companies. what do you take away from this earnings season? sorry. i don't think you can hear me particularly well. martin, why don't i put the same question to you. the cost cutting has been a big part of the earnings sorry this time around. how long can those cost cuts today to prop up margins for those companies in the next few quarters? >> that's a great question to ask, becky, and it's something that people should be asking
right now. what's going to happen in october when we see the third quarter come round? you've seen exceptional from your swing-ometer, from what you've been showing over the last couple of weeks. it's going to prove a point. you've seen low ball analyst estimatations and it's been knocked out of the park. how has that come through? and this is companies around the world. are analysts now increasing their earnings forecast? are we going to see growth? i tend not to think so. i think that this reporting season that's going to come up, this next one is going to be critical. are we going to see these same movements going forward and i just don't see it? there's very few companies with real headline growth and this is where the buyer should beware. i think september/october are going to be terrible months for the markets globally and this
just moves a point with the asian markets, it's like the tail wagging the dog, if you like. this should not be happening and the reason is the markets are overinflated. >> martin, i'm delighted that you've been enjoying our onometer. lots of science has come into the construction of that. alexis, i think we've resolved our sound problems now. let's get to some strategy. how do you think investors can best position themselves for what we'll see post earnings season as we move into the next phase of the year? >> yeah. i think investors have to position themselves by buying leaders in industry at a reasonable price. that's probably a good way to play this market. but i think investors have to be cautious on buying quality stocks, especially the ones that have rallied the most in the last few months.
one name we like, we believe it's calloway golf. the company stock went down almost by 60% since the stop and now it's a cheap company and it has a lot of interesting, new product and we believe it's a potential takeover target. and finally golf might become one of the new disciplines during the next olympic games and it's cheap and it's a leader. they're number one in golf clubs, number three in balls and we believe this is the type of company that we do like at these the prices currently. otherwise, we believe that you have to do relative trades and pair trades to avoid market impact. >> alexis, thank you so much for that. i'm not so sure that golf is an olympic sport, but that's a discussion for another day. we have to leave it here i'm afraid.
>> let's move on to some of the top stories of the day. clarity and a fresh start. that's how markets seem to be viewing the news that ubs has settled its dispute with u.s. tax authorities and that the u.s. government will sell its 9% stake in the bank. earlier, they said they expect the shares to open lower. but the market defies those expectations higher by more than 2%. switzerland agreed yesterday to reveal the names of about 4,500,000 clients. this will help the company move forward. although the u.s. authorities won't say which institutions are now in the spotlight. rio tinto has reported its biggest half year profit slump on record. they were hit by a collapse in aluminum prices and in demand. prices fall in line with analyst
expectations. rio tinto has managed to ease its debt with recent asset sales but says it's cautious about the recent rally in metal prices. >> the ceo of rio tinto will be speaking with cnbc later today. catch it with him on closing bell at 5:00 p.m. cet. christine. >> well, rebecca, we're waiting on fist half earnings coming from icbc, the world's biggest lender by market value. the company will post a 2% rise in its first half profit to about $9.6 billion according to a new york reuters poll. this despite china banks pumping out a record $1 trillion in new loans during the first six months of the year. now, ahead of the results, icbca and h-shares, this is how they're looking. h-shares 5.27 and a-shares, trading up 3%, 4.75.
rambles say full year earnings fell 30%. net profit came in better than expected at $452 million. down from last year's $648 million. revenue, meanwhile, fell 8% to just over $4 billion but it was up 1% in constant currency terms. ceo mike eleen says the company is well positioned to start up growth once customers start restocking. >> we're seeing quite good winds in terms of consumer sectors. this is grocery market products right across europe, the u.s., asia pacific and i expect that that continue to be there for a while. >> and that was brahambles ceo speaking with cnbc earlier. bertha. >> thanks very much, christine. the white house has plans to
announce next week the federal budget deficit is about $26 billion less than what was predicted earlier this year. the obama administration will update forecasts for fiscal 2009 on tuesday. reports say the deficit will total $1.58 trillion which is still three times bigger than last year. the changes reflect the lower cost of the financial sector bailout. republicans say the forecast masks a deterioration in the fiscal situation because of lower than expected tax revenues. the fdic will meet next week to vote on rules for private equity investment in banks. rules would impose strong capital requirements and force private equity groups to hold their investments for three years. investors and other government regulators have criticized the guidelines as too harsh. fdic chairman sheila bair says
she's open to the rules. if you've missed anything on cnbc this morning, over the last couple of days or, of course, whenever you want to catch up with the latest in business news, check ow cnbc.com. videos, blogs, and while you're there, drop us a line at cnbc.com. >> coming up on "worldwide exchange," what now for ubs? has the swiss bank done enough after resolving its dispute with u.s. tax authorities? plus, is a nation of shop keepers no longer a society of shoppers? plus, reports suggest the u.s. deficit estimate will be trimmed to $1.6 trillion. dddddddd
but realistically, as expected, the miners are up there along with the banks and oil companies. >> rio tinto, as well, is one of the stocks we've been watching closely. we were expecting a big drop in the numbers. what did you make of the share price reaction? it does seem to be up by 2% or so? >> yeah, that's correct. they ever so slightly missed estimates. the reason for that, you've got a couple of things going through at the moment with rio. they're in talks with chinalco and china regarding possible corporation and operations over there and also you've got talks of ancor, which is buying their alcan packaging unit. so, therefore, the other news has been the stock up to date. however, if you just take on the back of the profits, they had an
assessment and therefore should have been done but there are other things that people have taken the positive things out and therefore, along with the market, it's ahead of the stock today. >> and what do you think we should read through from what rio told us for the rest of the sector? clearly, the metals and mining stocks are real important to the ftse 100 to make a big weighting. >> certainly, yes. you've got two things. regarding china entering into a bear market, you've seen the stock get hit. indooet deed, they have been the worst hit in the last trading sessions or so. oil will be the first ones to react and they're going to be the first ones to react to the economy should they start to get a revival again. yesterday, just don't forget that oil has led this rally from the u.s. after the numbers that we got from the states regarding the supplies and that is what is carrying on again today. >> ashraf, thanks so much for that and we'll speak to you a bit later on for more on what's
going on in the uk. around europe, cannon schober is with us to tell us about what's going on there and some earnings report, as well. >> definitely. let me start with the market. we are seeing a lot of green here on the smi. we're higher by 1% now. let me start with the biggest gainer on the market. that is cement producer holssome. the company reported a relatively higher set of second quarter figures. outlook for the emerging markets, especially for india, that was very reassuring to investors. but holcim says it doesn't see a recovery before next year. are a part from that, we're watching ubs after the swiss government says said it will sell its ruffle 9% stake in the
market until august. that will probably be somewhere around 70 so it will leave the swiss government with a nice profit here. overall, analysts are a bit more bullish especially that we heard the u.s. sacks has been signed yesterday and two major obstacles for ubs are out of the way. before i let you go, let me mention the swiss access data, we saw a drop of 27% from july so a small improvement compared to june when we saw a drop of 28%. that is it from zurich. >> thank you very much, carolin. the volumes are very low today. the french mngt is bouncing back after a flat session yesterday. total, the largest french oil producer, is up 2.3%. oil services, they are doing well on the back of increasing oil prices yesterday. also in good shape today, almost
% higher, the dugmaker is boosted by a decision in the u.s. to soon start two trials on its a-flu vaccine on kids. the announcement was made late yesterday. a test will be performed on a 6-month-old baby and the second one on a child of 17 years old to check to see if that vaccine is efficient on human beings. sanotis is trading higher. also trading a bit lower despite the confirmation that the ceo of the company is still the most influential french woman. the second one is christine lagarde, the finance minister would is 17th in this ranking. that's the story in paris today. now over to saijal i believe in singapore. >> that's right, stephane. nice rally here in asia. a lot of it had to do with that surge on the shanghai composite up 4.5%, bouncing back from a
two-month low. i would say, though, that the volumes were pretty low, so it still shows that there's a lot of caution there and a lot of these gains due towards resource related stocks. petrochina was very heavily weighted on that index. we saw gains there. that's what pushed the market higher. we did see the spillover effect to the rest of the markets. the hang seng index closing up around 9% higher. the h-shares, chinese stocks litted there up 3 to 3.5%. china mobile, the world' largest chinese mobile operator, results down a little weak. missing expectations. it wasn't a big surprise given the weaker economy and the fact that competition is intensifying its shares down about 2.0%. we're still waiting for results from icbc, which should be out in the next half an hour's time. looking for a 2% rise to 65 billion yuan.
now back to bertha in the u.s. good morning, bertha. >> good morning, saijal. watch out for those icbc numbers. here in the states, it's the busiest day of the week when it comes to economic data. weekly jobless claims due out at 8:30 new york time. then at 10:00, the conference board will release its monthly index of leading economic indicators. they're expected to have risen by 0.7% in july. also at 10:00, the awe august philly fed survey of manufacturing conditions will be out and the mortgage banker's association releasing its quarterly report on delinquentsies. after the bell at 4:30 this afternoon, remember they watched closely, the government will release its foreign debt holdings by foreign central banks. and with all of the issuance that we've seen over the last few weeks, it will be interesting to see who has been buying. on the earnings front, it's all about shopping and food, two of
my favorite subjects. sears holdings reports results before the opening bell as to ketchup king h.j. heinz and hormel foods, the maker of spam. after the close, we'll hear from arrow positive tail and the gap. then the kansas city annual symposium starts today. the highlight will be friday's speech by ben bernanke. although i suspect fishing will be the highlight for steve leisman and a few others. he'll be talking about the lessons learned over the past year from the global crisis. absolutely stunning. why aren't we there, ladies? >> what a view, bertha. what a view. coming up next on "worldwide exchange," the polls are open in
likes of icbc bank and rio tinto. >> i'm rebecca meehan in europe. equity markets are heading higher across the continue negligent. >> and i'm bertha coombs. mind the white house. the white house is expected to announce the federal deficit will be smaller this year than previously forecast. >> we do have retail sales data out here in the uk. uk retail sales some months adding 0. 4%. that is a pretty decent performance. actually, out strictly on what the analysts have been expecting. the year on year figure, as well. we are looking at the biggest gain since may of 2008. let's get straight out to peter dixon, senior economist at commerzbank for a bit more on these figures. peter, the july figures coming in ahead of expectations, it doesn't seems like retail sales have dropped in the way that you may expect from a recession.
>> that is right. if you look at sales overall, over the last 15 months, we've been flat. it's not such a good story, however, for nonretail systems where spending has clearly collapsed. i guess you could argue that the temporary cut has helped a little bit and remember that employment has not hasn't collapsed at quite the extent we have anticipated and maybe that would help sales to more or less hold flat. >> an interesting note, as well, that the main driver on month on month growth has been from furniture and electrical stores. that would be odd as i would have thought with people worried about losing their jobs because you would think those individuals would hold back from buying things like furniture and electrical goods. could we see, if unemployment does continue to res increase, retail sales could lag further out?
>> it's entirely possible. but normally they're the first things to get hit. if they haven't been hit so far, my guess is they would hold up reasonably well over the course of the next few months. that's not to say we can expect consumers to start splashing out in a big way. it's entirely possible, of course, that sales will, you know, head higher relatively slowly. i'm not worried about a magical up at this point. >> okay. thank you very much and stay with us because we'll come back to you for more on what's going on in the economy. let's check the major markets and see what's going on. the ftse cnbc global 300 index is managing to sustain the gains that we had a half hour ago. over 0.7% higher now. let's take a check on the european bourses. the ftse cnbc 100, sustained gains of over 1% that and the dax. the cac is moving higher, too.
the swiss markets are have gained a bit of ground, pushing over that 1% level. let's check on forex, too. sterling is moving higher against the dollar, 1.6576 is where we currently stand on that metric. euro/sterling, as well, 0.8585 is where we are at the moment. dollar/yen, 94.34. and also staying pretty steady rates on the euro/dollar, as well. 1.4232 is where we stand there. increase teen, the asian markets are pretty strong today. >> it is. let me go through earnings coming out. icbc coming out with first half and q2 earnings as we speak. first half net profit coming in at 62.42 billion yuan. a little bit more than expected. in terms of q2 net profit, coming in at 31.27 billion yuan. so a little more than expected.
if you take a look at net interesting comp, 116.04 billion yuan compared to 131.7 billion yuan. so interest margins fell as a result of giving up lending. a lot of attention once again focused on the shanghai markets. direction was dictated by what's happening in there. the nikkei 225 is up 1.8%. kospi is up 1.9%. shanghai composite surging at 4.52%, rebounding from a two-month low. the hang seng is up 1.8% as a result and the bombay sensex is up 179%. oil is getting a split picture. we're not showing the oil charts right now, but that is a snapshot -- well, we have. nymex light sweet crude up $73.68. bertha, over to you.
>> thanks very much, christine. it will be interesting to see, last week we had a surprise increase. they are expecting a decrease today. also, we're going to get the leading economic indicators and the philly fed and delinquencies on mortgages. it will be a busy day with the likes of earnings from hormel and heinz before the opening bell. it looks like we're going to continue the bit of momentum we had at the close yesterday. taking a look at the ten-year yield, it will be a busy day for data and people will be focusing on the fact that central bankers will be checking in in jackson whole wyoming, just a stone's throw from yellowstone national park not just to discuss the scenery, but to discuss what's going on in the global economy. the ten-year note has edged up
to 3.5% to where it was just an hour or so ago. still with us is peter dixon, senior economist at merz bank securities. peter, i wanted to ask you about the jobless claims, the unemployment picture and the employment pictures have been critical to these markets. so a certain extent, that's what's gotten us that far with the surprise number on the jobs front earlier this month. the fact that we saw that earnings number last week, does that concern you? >> if we get another increase this week, clearly that wouldn't do market confidence any good. but the fact of the matter is, these initial claims numbers are fairly noisy on a week to week basis. i think the general perception is that the labor market is beginning to bottom out. you know, we've had a massive collapse in employment over the course of the last 18 to 20 months.
and i would expect at this stage of the cycle that the job shakeout bros would start to level off. that's not to say that we'll see a big rise in jobs any time skoon. my guess is that it will be sometime in 2010 before barrels stop contracting. but at least the hope is that we are past the worst point. >> we've got central bankers meeting in jackson hole, wyoming. i would imagine you would have liked to have been on that gig. what do you expect to hear from them over the next couple of days? >> well, there's so much to talk about. but i think the big topic of conversation certainly in the markets is what's the deal with quantitative easing? that's a big issue here in the uk. is it effective? does it work? what lessons can we learn from the japanese? those are all issues which i think the central bankers will be discussion at quite some length. of course, the federal reserve is very much a big mrafr in this qe story.
and i think we'll see central bankers swapping notes. my guess is there will be some very interesting material delivered on that particular front. >> pete we shall this is christine. there's some comments coming out from a boj policy member saying the export in the country may slow from august's global growth. it seems to suggest the boj is not ready to remove some of its policy measures. >> absolutely not. we've got an economy which despite the favorable q2 gdp numbers remains fairly fragile. the economy is still in deflation. so that is not a situation in which the boj will be in any position to take back the monetary easing measures which are currently in place. >> we have china's account surpluses falling 32% in the
past year. we have fdi falling, trade falling, china is not commune to the global slowdown. do you think this will continue into the second half? >> well, i think it broebl will. to the extent that the demand remains elsewhere at this point, you would expect china to suffer. but to be fair, a lot of the fiscal and monetary easing measures which have been put into place are helping the domestic economy to form quite well. what we're seeing is a rebalancing of chinese growth and after all, the chinese gdp numbers are point to go a solid something like 9% gain in gd pr for 2009 and that's more than we were expecting six months ago. >> net lending for businesses in britain is down for the third straight month. if lending to businesses is
still on the wane and mortgage approvals are still at these very low levels, that doesn't seem to underpin a proper return to growth that we're looking for, to me. >> no, you're right. i think what's rather concerning is that the bank of england has come through with the lending numbers. so i think that is something which the markets are going to get edgy about in the course of the next few weeks and months. in terms of lending, of course, the question is is it a supply problem or a demand issue? and certainly on the corporate side, my guess is it's a bit of both. in an environment where they're not quite sure what their future demand prospects hold. >> peter, we'll have to leave it there. thank you very much for your insight. good talking to you. let's head over to another
market, and in other earnings, we just got earnings from icbc, the world's biggest lender. the company saw a profit of 66.4 billion or $9.7 billion. that's compared to last year's profit of $64.5 billion yuan. net interest fell, though. for more, peter joins us to make sense of the numbers that just came up. net profit up and net income is down? >> well, it's interesting. the chinese banks are the most popular banks in the world right now. basically in asia pacific last year, the chinese banks have 67% of all frovt. it's probably going to be like that in the first half of this year, as well.
now, icbc's numbers are quite interesting, actually. they're showing that money earned from interest income is dropping. but their total income is not dropping. that means that it's being compensated by fee income. fee income is something that we watch carefully because it's a stabilizing factor. it's steady, it doesn't rise and wane with the cycle. so it's actually a good indicator for us. >> so that's the positive side. what about the negative side? we have net margins falling, we know lending is getting nor negative. should we be watching npos carefully? >> definitely. while the fees looked quite good, chinese banks have low fee income. the strongest bank, bank of china has 28%. it goes downhill from there. npos, as you mentioned, they're coming up. but this is what you would expect with this massive wave of lending, policy lending, they're being pressured, of course, by
the central government to lend and keep the economy going at a rate of 7% gdp growth. chinese banks will see more bad loans on the rise. however, we feel they're in a better position than we were the last time there was a huge rise in bad loans. they have had foreign banks come in and take shares with them and icbc had goldman sachs and american express, probably two of the better ones in that regard. so are you saying there isn't a credit rating that would derail things there? >> i would certainly think there is a credit bubble growing in china. i can't say how big it is. i'm not overly concerned about it because i think the chinese
banks are better off than they were in the past. they are very strong and very well managed banked in general. agricultural bank of china, perhaps, they've reduced their bad loans from probably over 30%. now they're down to 4.5%. this is going to grow, of course, but we don't expect to see the sharp jumps that we saw years ago when they had to write off billions and billions of bad loans. >> peter, it's beck could heky here. tell us where you think the global banks will stand particularly with the banks that seemed the most established and the biggest before we went into the downturn. >> i think they'll come out very good. none of the strong banks have
really taken advantage of this downturn to acquire. that might still come, of course, but i think we see the chinese banks taking modest steps into other markets. perhaps other emerging markets, africa, around asia, but i don't see them as really taking advantage and penetrating sort of, you know, the oecb markets the way you would expect them to. >> peter, we have to leave it there. thank you very much. good talking to you. from talking about chinese banks, let's go over to india. ayesha joins us for the india business report. >> thanks for that, christine. part of the global rebound today, 4473 for the nifty right now. good gains coming in. 15,000 plus for the sensex, as well. that was a disapointing and
dance because most marketmen were expect ago lists at 110. so adani power is one of the stocks in focus. almost 22 times is how the ipo was subscribed. besides that, sterlite industry sess one particular focus in stock today. sterlite has now matched a group of mexico's pay to about $2.1 billion is the exact figure over there. when we spoke to the company, they say they're upping the cash component by about $500 million from the previous bid. so both of these stocks in focus. with that, it's back to you. >> ayesha, thank you very much for that, live in mumbai.
missing analysts forecasts. for the six months to june, net profit eked out a gain of 1.4% as revenue rose 8.9% from the year before. and taking a look at shares of china mobile, down 0.2%, 82.58 in hong kong. becky. >> ahold profits beats forecasts. they said the total sales in its key market rose to 2.8%. and it's all down to cost control as the retail environment continues to reflect weak economic conditions. the ceo told cnbc that it's benefitting from a rebound of its u.s. operation thes. >> we've been leaner for years
and we're going to td continue to do that. next week, we'll be launching another major program in the uk which we're confident will continue to be very, very attractive to our customers and will lead us to stronger, good results in the future. >> bbva has been warning that it's on the verge of collapse. reports say the purchase could be announced by the end of the week with the fdic seizing guarantees and handing it over to bbva. it would be the first time a foreign institution has taken over a failing u.s. bank. in madrid, bbva shares are trading up just over 2.25% at this hour.
german chancellor angela merkel tops the list of powerful women in the world. but sheila bair holds on to the number two spot. the ceos of temasek, dupont and sunoco are also in the top ten. first lady michelle obama joins the top ten list at number four, just ahead of oprah winfrey who is just ahead of queen elizabeth. the list is based on factors such as economic impact, media reach and career accomplishments. for some reason, there are three women missing on that list. i'm not sure why. >> and they all have short hair. i don't know. it's so busy because they don't have time to blow dry their hair.
let's focus on the currency markets now. we are looking at dollar/yen, 94.38 roughly is where we stand right now with the dollar gaining a bit of ground against the dollar. 1.4237 is where we stand on euro/dollar. we're joined now by adam voith. thanks for coming along and speaking to us from the states. let's start with sterling. retail sales in the uk seem to be holding up really well. in fact, continuing to gain. what's your outlook for sterling? is there is bit of upside still to come? >> we are getting some confirmation of that in the data. but i think for sterling to keep appreciating, particularly against the euro, you will need to be surprised on the upside continually now through and to the end of the year. and i think the risk is that the
data continues to turn weaker in the uk. for mine, i think the data i'm more likely to turn down in the uk, but just as importantly, you've got an extremely dovish bank of england. >> i noticed this morning the german finance minister was kaush why you in its monthly report today about the prospects, highlighting the possibility that growth, continued growth or sustainable growth is not assured at this stage. should we be bracing ourselves for not so positive news a bit down the line for the euro zone countries? >> i think the real risk is that the those economies that have seen a solid bounce back in the data are really just saying, i
guess, what you could call a dead cat bounce. for mine, i think the risk is that the places where you've had rapid bouncebacks in the economic data there on the back of temporary stimulus measures, as we move into next year, some of that stimulus comes out of the economy. i think that's why the global situation there looks a little softer than elsewhere. but i think when you do start to get recovery in the euro zone, it should be reasonably solidly based. obviously, though, the fact that the european economy is still weak and does not mean that the ecb will not hiking rates any time soon. >> adam, this is christine. how much pressure will japanese companies come under pressure after japanese companies start to their risk back home? >> ripg there's risk that we do
push forward on the yen. in my mind, i'm still yen positive. typically it's very difficult for the dollar to rally against the yen in a sustainable fashion whenever u.s. yields are around the same level as japanese yields. dollar/yen has moved incredibly tightly with the u.s. yield. so given that the u.s. economy isn't likely to be in the zone, i'd likely still favor over the medium term dollar/yen to move lowerer. >> adam, we'll have to leave it there. as always, great talking to you. adam boyton, senior strategist at deutsche bank. >> thank you. coming up next, we will bring you up to speed with all the top stories making headlines across the globe. >> and on the other side of the break, our next guest likes
first half results. >> and i'm beckimy had an. equity value are turning higher across the continent. >> and i'm bertha coombs in the u.s. the white house has announced the federal deficit this year will be smaller than previously forecast. >> good thursday morning to you if you're just joining us in the united states, hello and welcome to the start of your global day with "worldwide exchange." we broadcast live from the u.s., asia and in europe. and here in the u.s., futures are point to go a bit of an stangz of yesterday's late-day rally. we saw energy shares lead the way higher after a surprise drop in inventory peps this morning, we've got futures right now at the highs of the morning. so far, we've got them about -- let's call it 66 points above fair value as far as the dow is concerned. nasdaq, s&p futures higher, as well.
we're going to hear from the likes of heinz and sears ahead of the bell and, of course, it's thursday so week going to get weekly jobless claims. right now, the ten-year bund is at 3.27% and the ten-year note, of course, all eyes will be moving toward jackson hole after we get a lot of the data that we're going to see this morning as we've got central bankers gathering there. but becky, you've had some data this morning in europe and the market seems to be responding fairly well. >> it certainly was. things have calmed down a bit now, though. the cnbc ftse global 300, up 0.8%. european bourses, gaining ground, 1.4% higher for the ftse 100. the dax is 176% higher. the cac 1.8% higher and smi is not far behind. dollar/yen, we're looking at 94.35. euro/dollar, 1.3423.
sterling is looking steady after gains initially on the back of that retail sales data. christine. >> rebecca, china is playing a big role, big part in dictating how markets performed today. asian markets did a lot better. nikkei 2251.8% higher. the shanghai market up 4.52% and that gave the hang seng index a big bounce up, as well. and the sensex index in india trading up 2.2%. so a pretty good session overall here in asia. in terms of oil, we're seeing a die vergence as far as nymex is concerned, $1.18 to the positive, $73.60 a barrel and brent, let's see if it's still die verging away -- it is. down 42 cents, $74.17 a barrel. rebecca. >> thanks for that. james bevan is with us now.
let's get straight into the markets. we've seen huge amounts of volatility, particularly in the asian markets this week. but it looks like another strong day today. what's your impression on where we're going at the moment? are we just lang wishing in the low volumes of the summer? >> low sorls are clearly an issue, but i think the underlining tone is surprisingly good both in terms of the kornt market and in terms of the economic backlog. there is a real concern. i think you can have more alternative and more optimistic perspective that the costs have been cut so low.
>> james, it's christine here. does it makes sense to you that shanghai is dictating the market conditions? >> there's a reasonable linkage between the movement of the market and subsequent real economic progress right back to 2007. therefore, people should rightly take account of what's been happening. i would think that if you look at second quarter growth, china has accounted for roughly 290 basis points, 2.9 percentage points of overall global growth against the gloebls growth of 2%. in other words, we take china out of the equation, we have a difficult second quarter for the rest of the economy. china, therefore, is center stage in everyone's mind for what is happening. i think the equity news is that
china appears to be more self-sustaining. this whole issue as to whether or not there could be any dekumg has become the route. china is now able to follow policies which are domestically capable of sustaining themselves and i think the global emerging markets remains surprise going good value. i would say the rally has been modest in the context of prior declines. >> james, i want to pick up on your note about a change of leadership. does this mean that it will finally pay to be a little more defensive, pay to actually bet on the companies that really are seeing earnings growth based on revenue growth? >> i think that the values undoubtedly, the way it is unlikely to be. the only question in my mind is the time frame that leadership reverts to companies that misvalued and high quality.
one of the toers going around london is there's been after avalanche of money with high beat plays including less well researched credit risks. that does worry me. there's a wall of money driving prices as opposed to detailed research and fundamentals, then accidents will inevitably recur. >> james, you will be with us throughout the hour. still to come on the program, is it a fresh start for ubs? that's what markets seem to think as the markets move on with tax disputes in the u.s. and government. we're going to take a look at what's next for the major swiss banker. after the break, we're going to focus in on africa as we discover whether the continent is the new frontier in investment in our virgin markets.
welcome back to "worldwide exchange." the white house plans to announce next week that the federal budget dif set is about $262 billion less than what was going to update forecasts for fiscal deficit will be up bigger than last year, but the change reflects the lower cost of the financial secretary he bailout. the administration had anticipated more bank failures.
but republicans say the forecast mask aes deterioration in the fiscal situation because of lower than expected tax revenues. christine. we got better than expected first half earnings from icbc. the company saw a profit of 66.4 billion yuan or $9.7 billion. thanks to a higher fee base of 18.9% surge in new loans. net interest income fell, however, to 116 billion yuan from 131 billion the year before. icbc shares ended flat ahead of the results at 5.27. meantime, in shanghai, shares closed up 3.3%. >> well, time now to focus on a continent often described as the
last frontier when it comes to investing. i'm talking about africa. as part of our emerging markets week, we're going to speak with our guest who says areas like angola are proving to be the real thing now as far as investments. marion mulberger is from deutsche bank and joins us from frankfurt. people have been talking about africa being the next frontier, africa getting ready to explode for some time now. given what we've seen with the global crisis, has that sort of dahntayed that picture? >> i think it has maybe interrupted the african nation, but i think it has not reversed it. i think it's time for them to show that they have done their
homework, that they have restructured their banking sectors to start off again from after the crisis is over. >> james, any interest in africa? any comments or questions to our guest? >> i find africa a fascinating opportunity. not the least because i find it variability. i look at egypt, telecommunications companies, in africa, very advanced financial services and mining. when you look at the region, where are the most interesting newly emerging opportunities and how do we deal with the corporate government challenges which have always been an issue? >> there are a lot of issues and barriers to what could be a great opportunity. what are the challenges that you identify and how do we deal with those? >> i think the main challenge is the ill liquidity of the markets and their small size. in the analysis we did, we found
that south africa, of course, is far off so there's no other market in southern africa that could reach south africa in terms of liquidity and accessibility. but there are these new frontiers, as you said, which look promising and especially in nigeria, gaun ya and kenya. they try to take those challenges i mentioned, think tried a regional integration of the stock market like kenya does so we get to bigger size and they try to restructuring the banking sectors and the government is trying to issue externally in order to create the bond markets for entities and i think those are the main initiatives we've seen. >> marion, what about africa's link to china? to what extent does africa benefit from the emergence over the last couple of years?
>> i think it's helped them because their trade patterns have changed. so now -- i mean, europe is still the most important trading partner. but this has come down and the chinese share in total trade with africa has doubled in the last 13 years and i think this trend is going to continue. and this makes africa less dependent on business cycles in europe and it gives them also the possibility to not only to sell commodities, but maybe other manufactured products to china. but i think it has brought them more interest again that now people think are we going miss out something in africa if china is so active there in terms of publicity it has been good. >> any thoughts on what more specifically the opportunities that exist in avenue exam and how investors can get around those hurdles that we talked about? >> well with, i think a traditional approach to global investment has been to think
about global companies that operate in markets that are fast growing and that has been a useful strategy for people wanting to play in emerging markets. i suppose what i'd like to learn from marion is what are the domestic competitive advantages that africa presents to investors and how are they best accessed? it's still the vast amount of land to some extent which is underused, a huge young population and education enough with huge potential and i think many markets are conservative. we have seen a huge boom over the years because they leapfrogged and went to mobile phones and now this penetration level has increased a lot. i think there are opportunities.
>> thank you so much, marion, for talking to us all about africa. james bevan will continue to stay with us. coming up next on "worldwide exchange," it's election day in afghanistan, but a fresh spate of violence puts the country on high alert and threatens to disrupt the polls. we'll get the latest on the ground in kabul after the break. tdd#: 1-800-345-2550 if i'm breathing, i'm thinking about trading. tdd#: 1-800-345-2550 i always have my eye out for a stock on the move. tdd#: 1-800-345-2550 doesn't matter if a company sells computer chips tdd#: 1-800-345-2550 or, i don't know, fish and chips. tdd#: 1-800-345-2550 i'll look at all kinds of stocks before i settle on one. tdd#: 1-800-345-2550 if i think i'm onto something i'll check it out, tdd#: 1-800-345-2550 you know, see what other traders are up to. tdd#: 1-800-345-2550 when everything feels right though, tdd#: 1-800-345-2550 that's when i get serious. tdd#: 1-800-345-2550 and the minute i get into something, tdd#: 1-800-345-2550 i already know when i want to get out. tdd#: 1-800-345-2550 of course, every now and then i'll talk with somebody tdd#: 1-800-345-2550 who knows what i'm trying to do.
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welcome back to "worldwide exchange." turn youout appears to be low in afghanistan as citizens worry about their safety. the taliban is expected to disrupt today's voting, but most stations have been able to open throughout the morning. the current president is expected to win the election. but a runoff election in october looks likely. john, how is it looking this mosh? how much violence have we actually seen as today has gone on? >> reporter: in terms of gun violence, we have reports of violence out to the east of the city, police saying they killed two militants and captured a third. down to the south, reports of rocket attacks down there. very, very difficult to give you precise details of any of these
attacks because, of course, it is so difficult at the moment to get around the city. in terms of what has been happening on voting day today, i don't know if it is fear of the taliban or what happens perhaps indifferent to the outcome. but certainly in kabul, it has been very, very quiet. we drove out early this morning through streets largely deserted except fort many, many checkpoints. later in the day, things started to pick up at the polling booths that we visited, a steady flow of voter egg saying they weren't put off by the threats of taliban, that they thought the elections were important for the future of this country. we bumped into a couple of the election monitors from the european union. i asked them, how effective is your operation down in the south where the taliban is so strong? they said, listen, we can't go there. we're not on a suicide mission. the other one said, if i was an
afghanistany and i was faced with voting or staying alive, i would stay at home. >> let's move on from those political issues to see what's going on with the equity markets today. we are going to check around the global markets. starting off in the uk with ashraf el goodsgarf, since we l spoke, we had the retail figures out in the uk which are better than expected. any impact you've seen from those numbers? >> yes. we've broke continue narrow trading range that we've seen this morning by another 0.5%. so we're trading around the 47, 57 level. it will be very interesting to see throughout the day whether this trend will continue and indeed will make new highs or higher highs than we have seen last week, which is around the 4794, 4800 level. it will be interesting to see whether that continues or not.
>> in the mining sectors, metals and mining stocks are looking pretty strong on the uk markets. we did have results from rio tinto, as well. what have those earnings told us? are they helping the sector in general? >> they certainly are. i don't think it needed any help today, anyway, purely because of the strong asian markets and the bounce in commodity prices. they did have them a lot. rio has been reducing debt over the last 18 months or so which is very useful to see. like i said, the mining sector today is specifically does not need that and it has pushed on since maybe 1%, 1.5% just given support to the ftse. >> ashraf, thank you so much. let's get out to the other european markets. carolin is standing by in zurich to update us on what's going on with the swiss companies. ubs always on her top list of companies to watch, but also some earnings reports, as well,
carolin. >> yes, definitely. let me give you a quick view of the market. we're higher by around 1.3%. seeing nice gains here on the market. the biggest gainer is holcim, a cement company. we did get a relatively solid set of numbers for holcim for the second quarter. top line, that was a bit disappointing. profitability, that was way better than expected. the outlook for the emerging markets, that was reassuring, especially for asia. but the company said that for the developed markets, especially for the u.s. and is europe, they don't see a recovery before next year. also cost cutting measures at holcim, those were seeing very positive. apoort from that, of course, we are still looking at ubs as far as the swiss government said it will sell its roughly 9% stake in ubs. that will probably happen in august, around the 25th of august. and with the u.s. tax fund, we heard a lot of news about that. roughly h lly 4,500 names will
handed over to u.s. authorities. with those two obstacles out of the way, they're more bullish. now they say the worst is over for ubs. let me quickly mention this data that we saw, another drop of 27% in july. that is very small improvement to the 28% drop that we saw in june. that's it from the swiss market. now let's go over to saijal in singapore. >> thanks, carolin. it was nice to see some green back on the boards here. nice rally for the asian markets. really out to the shanghai markets which surged up 4.5% from two-month lows. volumes are still fairly low and a lot of those gains are due to the resource related stocks like petrochina and sinopec, but still, pretty good gains there. you saw that spillover effect in hong kong. the hang seng index up 1.9%. h shares up 3.5%. i want to talk about icbc,
reporting results and beating on q2 net as well as if first half net. the first half net up 279%. 66 billion yuan is where they came in at. of course, benefiting from new loans. we saw new loans up for the first half about 19%. we did see the net interest income drop a bit. icbc saying they are seeing signs of stabilization and they expect a recovery in that interest margin for the second half of the year. as for japan goes, nikkei closing up 1.8% higher. we saw a good rally in a lot of the oil stocks as well as the resource related trading firms there. also a couple of upgrades for isuzu motors or hyno motors. both those stocks closing up more than 5% higher. and then the kospi closing up 2%, strong gains in the banking stocks. now back to bertha again in the u.s. >> thanks, saijal. very busy day for economic data. of course, it's thursday.
we can keeply jobless claims 8:30 new york time. they're expected to be down by 8,000. we're going to get the leading economic indicators expected to be up about 0.7% for july also at 10:00. we're going to get the august philly fed survey of manufacturing mortgage conditions and after the close, we're going to watch for foreign holdings of u.s. debt. ahead of the bell on earnings front, we're going the hear from sears. we're also going to hear from heinz and hormel. after the close, more retailers, we're going to be hearing from the gap and aeropostale. and that's your -- oh, wait! one more thing. i forgot. the world's central bankers are gathering in jackson hole, wyoming. our own steve leisman will be reporting live there on "squawk box" which you'll be able to hear from asia, europe and the united states. the highlight will be on friday
>> it's half past the hour. here are the top business stories from around the world. in the u.s., the white house is expected to announce the federal deficit will be smaller this year than previously forecast. >> i'm becky meehan in europe. the summer rally is staying strong. >> and here in asia, china icbc hands in better than expected first half results. >> and hello and welcome. right now, dow futures are about
60 points or so above fair value. nasdaq s&p futures are higher. we're going to get earnings from the likes of hormel, heinz and sears ahead of the hope. and it's thursday, so we've got weekly jobless claims in focus and a lot of economic data on the calendar. taking a look at the ten-year yield, we've been hovering at about 357% or so. we've got nice data out of europe this morning, rebecca. how are the markets fairing there? >> let's take a quick check. we have seen a pretty positive session so far for the european markets and they continue to be very strong right now with the ftse 100 up 1.3%. over 1.5% for the dax and the cac. is smi adding 1.25%, so moving higher. as far as dollar rates are concerned, let's take a quick check on rates. dollar/yen, standing at 94.29. euro/dollar, 1.4232. sterling got a bit of a bump up
after better than expected sales data, but that's dissipated, really. 1.6522. as far as sterling is concern, it's pretty flat there again. 0.8610 is where we're standing. christine, asia, how is it going there? >> asian markets getting a boost out of china bounced back. nikkei 225 up 1.8%. the kospi up almost 2%. the shanghai market rallying today, 4.52%. and the hang seng getting a boost as a result up 1.9%. and the bombay sensex is up 1.6%. in terms of oil, we're getting a split picture in how nymex and print are showing in terms of prices. nymex light sweet crude is up $1.10, to $73.52. brent crude, 41 cents lower wbdz 74.18 a barrel. rebecca. or bertha, rather. >> thanks very much, christine. we're having problems with the names this hour. joining us now for a little
strategy and hopefully to straighten us out, robert padlick and james bevan, who has been with us since the top of the hour, he's in london from ccla investment management. robert, you know, these markets appear fairly resilient. monday's big downturn notwithstanding, it seems as though all those folks who say there's money on the sidelines waiting to come in at every dip may be right. >> i think you're right there. the market seems to be climbing a wall of worry. there seems to be all these outside factors trying to push the market lower. people want to get back into the stock market, but they're not all that comfortable at these current levels. i'm trying to figure out whether or not the current economic data justifies the market trading at this level. however, i think if you take a step back and try to figure out, you know, what's going to help this market move continually higher, first of all, china is helping this morning. but i think if you can get past some of these resistance levels
on the s&p and then again at about 1014, that's one bit of helping us move forward. also, if we head into september and we don't see any kind of major market correction, that could help the market move forward, as well. >> james. >> robert, i'd be very interested to know what your advice is to people who are fat in cash, who are wanting better news and discovering that the market is much, much higher. what are you saying to those investors? >> i think you have to take a step back on that aspect of it and look at where we are right now compared to december 2007. if you're going to try to time a market bottom, i mean, you just sort of make a jack out of yourself. i think if you look at where we are right now in what potentially lies ahead of you, there's still a lot more gains to be a had in this market. the economy is going to continue to improve. if you take a look at some of the economic data that's been released so far, it sheets an
improvement and it shows the beginning of a real turn around. look at the manufacturing data, the ism index, the durable goods orders, the philadelphia fed manufacturing index, the empire state manufacturing index. all these are pointing to a return to growth. you look at the consumer spending, personal spending is increasing. so if you take a look at all that and you put it all together with the leading indicators, you're seeing a real potential for growth to continue in q3. so you start to get into this market. you do it a little bit at a time. i would recommend looking at the early cyclicals, the industrials, consumer discretionary, technology, financials, basic materials. i think that's the place you want to be going forward. >> robert, this is christine. it's interesting you mentioned china just now. is it increasingly so now that the tail is wag the dog? >> you know, i think bob pasani nailed it yesterday. i think some of the stimulus money, the loans that china was making actually went into that
market. i think that market got to a bubble point. it still may be at a bubble point. it's up about 54% on the year. as a long-term investor, i'd be very mindful of that and i'd be leery of putting money into that market. i think there's a lot of speculation going on here. i hope it continues to some degree, but i'd like to see it done at a little bit more reasonable rate. i don't see those kinds of gains continuing to extend throughout this year. >> okay. let's come up to james for a second. i'm interested in what you think about the sustainability of the gdp growth that we've seen in some countries, mostly because we had -- what was it, japan, one of the members of the boj this morning highlighting that it could be -- it wasn't sure, put it that way, that we were continuing to see growth in the coming you a item, that things could slow down a bit. then in exactly the same day, we
heard recovery in that country is not assured, either. should we be a bit more cautious about the seemingly upbeat figures that we've seen in gdp from some of the major economies? >> well, i guess, the most important thing to do is to determine why the problems were there and therefore what actually the going on right now. i think if you said what we have been experiencing is a deleveraging process, as opposed to a conventional recession, which would fit with the policy initiatives that we've seen with the very substantial reductions in interest rates plus the very significant pick up in government funding, the critical issue, then, is looking at the levels of indebtedness and see where that takes us. i think what's interesting if you look at the u.s., for example, is there has been a substantial net transfer of indebtedness from the personal sector to the government sector. so there's a real issue about how governments prepare their sheets at the end of this process. it will mean currency devaluations and the shift from the developing economies, but i think the personal sector is in
a better position and, therefore, although a trajectory of low overall growth looks likely, i think there are still solid quality big cap companies, meriting consideration which currently are still at depressed prices. >> recently, wa solid companies? >> i'd be looking at walmart, amgen, companies that have demonstrated the capacity to do very well. we're looking at companies reporting positive earnings. i'd be looking at the government facts of the world, for example. >> robert, let's come to you. some big names there that james believes holds some value for investors. what are your thoughts on those? >> i think james is right with disney. and i think he's right with freeport. i love those names. we own them. i think they're going to continue to do well. they're leaders in their market. but i think if you take a look at some of the sectors that i mentioned, consumer discretionary, home depot had a
blowout report and i think home depot will be a place going forward. in the industrial sector, like floor, it's an engineering and construction company. i also like navastar. they're a big mac truck-type manufacturer. i think as the world starts to move into new fuel ee firnt models, navastar is going to lead that area. in the basic material sector, i like cliff natural resources. and in the tech sector, i like visa. visa never gets mentioned, but it's a leading debit card market share controller and so i take a look at visa here, as well. >> thanks for that. do stay with us for a bit longer. we're going to come back to you both for a few more starts before we get to the end of this show, robert pavlik and james bevan, coming back to both of those shortly. christine.
>> rebecca, let's cross live to tokyo and check in with ken moriyasu from the nikkei. moriyasu-san. >> thank you, christine. the surging oil prices pushed up the nikkei index by 1.8%. japan airlines shares also rose, making the airlines sector the leader for the day. the rise in prices for lcd panels used in televisions is having opposite effects for electronic giants. companies like sony, which have to procure the material from outside sources, are feeling the blow. while the trend is benefiting firms like sharp, who produce the panels in-house. in financial news, nomura holdings will enter stock trading in malaysia. including those in the middle east. and at the time when a growing number of companies are curbing
overseas business trips, ana aims to attract first class travelers by offering a free helicopter ride from the airport to downtown tokyo. the 30-minute ride will be available to customers on its european or u.s. routes. and that was the nikkei business report. back to you, christine. >> moriyasu-san, thank you very much for that. ken moriyasu from the nikkei. bertha. >> still to come, powerful women, forbes publishes its list of the world's most influential women. the stop spot hasn't changed. can you guess who is number two? is it christine? we'll we veal all that in a minute. before that, let's take a look at how the u.s. futures are shaping up. my mother made the best toffee in the world. it's delicious. so now we've turned her toffee into a business. my goal was to take an idea and make it happen. i'm janet long and i formed my toffee company through legalzoom. i never really thought i would make money doing what i love.
welcome back to cnbc's "worldwide exchange." in the u.s., the white house plans to announce next week the federal budget deficit is about $262 billion less than was predicted earlier this year. the obama administration updates its forecast for fiscal 2009 on tuesday. reports say the deficit will total $1.58 trillion. that's still three times bigger than last year. the changes reflect the lower cost of the financial sector bailout, less t.a.r.p. money. the administration had anticipated more bank failures. but republicans say the forecast
actually masks the real deterioration in the fiscal situation because of lower than expected tax revenues. german chancellor angela merkel tops forbes list of the most powerful women for the fourth straight year. sheila bair held on to the number two spot. the ceos of peppily soy, angelo american, temasek, wellpoint, dupont and sun know toe round out the top ten. first lady michelle obama joins the list for the first time at number four, one slot ahead of oprah winfrey who is spot one spot of queen elizabeth. hillary clinton and sonia sotomayor are also on the list. part of the criteria are career accomplishment and the media reach. so i think, christine, you should be on the list. probably behind michelle obama.
>> you're so kind. you're so kind. i need to pay you some money for that sort of statement. i think becky should be on it, too, and so should you, bertha. all right. guess there's no comment on that. we're getting first half earnings from icbc the world's largest lender by market value. the company apparently saw a profit of $9.7 billion thanks to higher rebates, income and an 18.9% surge in new loans. net interest income, however, fell to 116 billion yuan from 131 billion the year before. icbc shares in hong kong ended flat ahead of the results at 5.27. meanwhile in shanghai shares close up 3.3%. christine, they took away my box too early. i was going to tell you that
they did call me to be on that list, but i declined to do the interviews. >> you're on the air six time a day. obviously, you don't have time. >> let's get on some final thoughts from james bevan, from ccla management. james one mentioned some of the big u.s. names you were interested in earlier. disney, walmart, freeport, some of the big u.s. names. >> big names with reliable growth prospects. i think probably that is a strategy that plays out well in europe, too. so i would be looking at companies like nestle and the underlying fundamentals are robust in contrast to asia, i'd be looking at much more interesting secular and cyclical growth opportunities. i'm looking at taiwan, honghi precision, china mobile, and those are the sort of companies which i think are very well priced, have attractive long-term growth prospects and i suspect we'll look back and see,
those are the top picks of the day. >> and how should we get into those? we're seeing volatility in the asian mountai asian markets at the moment. are you looking that far ahead? >> these are companies which i think are fundamentally cheap and therefore, i'd be happy to buy today. the only issue i'd put in front of investors is if you want the income yield, bear in mind these companies only pay one dividend per year. >> james, thanks for being with us today. we have to say good-bye to you now, but we appreciate the hour you've spent with us. bertha. >> up next, will wall street follow europe and asia higher today? we'll preview the trading day ahead. we'll be right back.
she'll with us early to tell us what we can expect. becky, what have you got going on today? >> good morning, becky, good morni morning, everybody. the economic recovery, job education, health care reform, those are all op hot topics. new jersey's governor, jon corzine will be our special guest today. we're going to talk to him to get his plan to try and put the garden state back on track. what he is expecting from the obama administration and what he thinks needs to be done on a national level, as well. plus, the sticker shock of stimulus. a debate over sharing. congresswoman swartz, we're going to get her take on that. we'll be speaking with republican congressman scott garrett. our lineup today includes our guest host, don marron. we'll be speaking with bill isaac, as well, together his take on what financial regulation is right now and we're going to be talking about
how the luxury motels are making it through the economic downturn. johns ubeross will give us the pulse of the high-end consumer. weekly jobless claims coming out at 8:30 eastern time. becky, squawk is coming up at the top of the hour. back to you. >> wasn't it corzine who was badly injured in that car crash a couple of years ago? >> it was. he wasn't wearing his seat belt at the time, but he has come out and been a strong advocate in favor of seat belt safety since that time. but he's doing great. he's looking really good. >> that's when i was living in the states. he looks great, fantastic. we look forward to that show. bertha, let's send it back to you. >> thanks very much. we still have more on this program. we're going to take a look at the trading day ahead. right now, let's bring in robert pavlik. you know, it's an interesting headline that we've got today
with the government expected to say that the deficit is a quarter trillion less than they thought, 176 trillion as opposed to 1.8 trillion, but it says quite a lot, that the reason is that the t.a.r.p. money, they didn't have to lend out as much as they did. didn't that say a lot about the resiliency of what's happening with the banking system? >> you know, i think it's surprising that the banking system didn't collapse like everybody was expecting. but i think if you take a look at some of the prices in some of these stocks, it was reflecting absolutely the worst case snasho and it really didn't pan out that way. there was a lot of fear in the market in september and october of last year. nobody really knew what was going to happen going forward. paulson and bernanke created these various programs and is put a floor under the market and under some of these stocks.
after getting through the review of the banks earlier this year, we seem to be in a much better position. some of the banks have been able to repay the t.a.r.p. money. jpmorgan and goldman sachs. and i think the conditions will continue to improve. there's going to be some bumps along the way. especially as the economy is concerned. but i still believe that the economy is going to gradually improve and it's not going to be a v-shaped recovery, but i kind of liken it more to sort of like a hockey stick. if you put a blade of a hockey stick on the ice and you see a gradual uptrend, i think that's what it's going to look like. we're not going to have tremendous growth, you know, going forward, but i think it's going to be gradual. >> quickly, let's talk about one of the bumps in the road last week. we saw that surprise jump in jobless claims. let's get another variation like that this week. will that make you a little more concerned about this recovery?
>> not so much. there is going to be, again, bumps along the way. especially as far as employment is concerned. it might put a bit of fear into the market. some of the bears out there may be using that as fodder to try to push the market lower so they can get back into the market. i think there's a lot of cash sitting on the sidelines waiting to get back in. i think if we have sort of a mild pullback or a mild correction in this market, you're going to see a lot of money coming in off the sidelines and entering those areas of the market which i had mentioned earlier, those early cyclicals. >> right. robert, we'll leave it on that note. thanks so much for joining us, getting up early this morning and joining us from stanford. robert is the chief market strategist at banyon partners. one quick look at futures, continuing to show a nice bounce at the open if those jobless claims come in. that's it for us. ladies, it's been wonderful working with you this week. i am off on holiday. >> lucky, lucky you.
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good morning. let's try this again. u.s. equity futures trading higher this hour as the bullets try to make it three straight sessions for stocks. working for a living, weekly jobless claims top the day's economic agenda. they've been increasingly important to watch. and a bailed out budget, the deficit said to be revised lower as the government decides not to set aside more money for failed financial firms as "squawk box" begins right now.
good morning, everybody. welcome to "squawk box" right here on cnbc. i'm becky quick along with joe kernen and carl quintanilla. u.s. equity futures are pointing to a higher open this morning. you're talking right now those dow futures up by about 66 points above fair value. this continues a two-day winning streak for stocks right now. on the agenda today, we have a number of important economic reports. at 8:30 eastern time, we get the weekly jobless claims. polled economists see claims falling by ,000 to 550,000. continuing claims are expected to fall by 141,000. at 10:00 a.m. eastern, watch for economic surveys. >> meantime, fed officials will continue gathering in jackson hole today. fed chairman ben bernanke will be speaking tomorrow morning and we'll be looking for other officials to be speaking out. our steve leisman is on the
scene and will be hosting a live one-hour event tonight at 8:00 p.m. eastern time. if there's a nature backdrop, if there's fishing going on and economic speak, you know leisman is there. >> kansas city fed in welcome. >> it's chopped up. >> they don't havehotels in kansas city? there's no football or great baseball? they've got to go -- seriously, kansas city fed has to go to jackson hole, one of the most beautiful places? that's where the allen and company people go, too. >> no, that's the valley. >> same difference. what's the story, seriously? >> it's easier to think when you can get away from -- you know. >> these aren't junkettes and perks and everything else? >> for leisman it is. >> and this two-day winning streak we're talking