tv Worldwide Exchange CNBC April 13, 2010 4:00am-6:00am EDT
lts tuesday, the 13th of april. china's president says beijing will not be swayed by external pressure after meeting u.s. counterpart obama in washington. in europe, greece puts its toe in the water as it agrees to go into short-term debt. >> in the united states, the dow closes above the 11,000 mark for the first time in 18 months, but futures are under pressure to hold that line today. >> welcome to "worldwide
exchange." it is christine tan in singapore together with nicole lapin and steve sedgwick. on a quick note, the beijing markets are closed for three days. let's get a view where asian markets have trayed or are trading. we got close to 11,000. the impact on the markets here, not much. take a look at it. 0.8% of profit taking going on there. the stronger yen really weighing on the exporters. the shanghai market, one of the few markets to open to the upside. ahead of the launch of the index futures on friday. the hang seng, 20 points lower. a little bit of pessimism there. and the kospi in south korea, also flat, but managing to close on the up side. the aussie market within down 7.7%. the ftse cnbc global 300 index, down 9 points, 4,702. earnings season continues to be
focused. and you know what, steve? a lot of investors here in asia are nervous about that. >> should they be? i don't know. the numbers have been pretty good, but is it about revenue growth or cost cuttings? that aside, the european market, they've been trading for just over an hour. we'll take a look at how they are at the moment, all down moderately. it's the higher beat effect of the banks which rallied yesterday and indeed, the miners under pressure this morning. but it's earnings season we look at. alcoa, of course, one of the big names. nicole, good to see you. >> great to see you, steve. you're right, yesterday, we had intel after the markets today and the markets are likely to open lower across the board. dow futures are down right now about 25 below fair value, nasdaq futures are down about 4 and s&p 500 futures down about 4, as well.
we were mentioning the dow closed above the 11,000 mark. that's the highest cloef close in 18 months. i should note that the s&p is slightly off the 1200 mark, 1196 from yesterday. >> all right. nicole, let's talk more about that, why the markets are under pressure despite the dow closing under 11,000. simon grose-hodge, our guest for the next hour and director of lgt bank in singapore. simon, any idea why the markets are getting a lift and the 11,000 is more or less factored in? >> yeah. we don't see it particularly as any great level. we think we're going to have another good earnings season. we've seen over the past few quarters, earnings have exceeded the expectations. we think that's very much the case. we're looking for quite positive earnings in general. if you look at economic data,
the data has been improving and if you look at the numbers, the revisions have been almost under positive. and at the same time, you've got to fed very much on hold, still providing accommodations to the market. we think 11,000 is nothing that's going to stop the quarter. >> but you don't think investors are going to buy on this news? most of the positive earnings have been factored in. so are they looking for any excuse to take the markets here? >> well, no. they keep talking about waiting for pullbacks to get in. and even those those earnings are expected, we think the market is very much going to beat those expectations, which will give positive sentiment to the market. >> simon, in many ways, this is the start of the recovery. if companies are going to show us they're growing top line growth. rather than brof improving the earnings on the back of cost cutting? is that going to be conclusive?
is that what investors need to see, real growth rather than the cost cutting story? >> yes, certainly. i think cost cutting has pretty much run its course and we need to see improvement and revenue in top line sales. the one thing that's been miss is a return of jobs and better employment. that is a long-term issue in terms of unemployment. but on the plus side, the fact that we're not able to create very many jobs is one of the key factors keeping the fed on hold. that in the absence of is good to keep the economy going. >> simon, another thing that is missing right now, this is nicole lapin in the i'd, we see individual investor and we're crossing the 11,000 mark for the first time in a year and a half. but that's largely driven by hedge funds and other
professional investors. when is the individual investor going to come back into the rally? >> that's one of the big mysteries. normally, they tend to come in fairly late and they get out too late. a lot of them have missed the big rally for the second half of the year. the job situation at least stabilized. they might be prepared to take on more risk. we think in the past couple of months, some of this talk about fed removing stimulus has been far too aggressive. once retail starts to realize interest rates are going to be at zero, they're going to start to put that money to work and we think it will start coming into the equity market. >> simon, we'll leave it there. thank you very much indeed at the moment. simon grose-hodge, investment strategist and director of lgt bank in singapore. today, greece will be turning to the markets to try and raise $1.6 billion through a sale of
six and 12-month treasury bills. this comes after euro zone finance ministers agreed on an emergency aid package to help the debt-stricken country. for more on this, guy assumed his usual position in athens. carolina is there in brussels. why on earth are the greeks going to the market, taking all the risks that cover by going to the market for investors and in raising such a small amount of money? >> because they have to, steve. this is short-term paper. we have $1.2 billion euros going out today. it's not being confirmed by the dmo, but we think we'll have another short-term auction taking place later in the week. it's a liquidity situation at the moment. they have to get this done. they also want to take the temperature of the market following the news coming out over the weekend. notwithstanding the issues of germany and whether it's willing
to stump up the cash. we'll get on to carolina in just a moment to talk about that. they don't really have a choice. the only positive thing you could argue is it's very short-term duration. i think the risk of default is off the table. you'd be willing to lend maybe greece money for a year. longer than that could she a problem. but that's maybe a problem for tomorrow. it kicks off in 55 minutes time. we'll have all the announcements for you later on. carolina, the mechanics of this, whether it's triggered or not, remains a critical part of the equation, as well. >> absolutely, guy. this is what i'm watching here. there is a growing difference of views on what the german government is saying and the european commission. and i have to say all the other euro zone companies are saying. basically, to trigger this rescue plan for greece in case and when greece asks for this plan, what is needed.
the european commission says this conference is something like that, okay from the finance minister should be okay to trigger this rescue plan. the german government, instead, is saying no, no, no, no, whenever greece needs it, we need to convene in a summit with all the heads of state and we have to all say okay to this plan. so it's a much more complex situation that germany is trying to say it's not the end of the road, this is not an automatic deal yet. so don't worry, basically, angela merkel needs to wait when to have the lessons in germany, she risks losing her majority in the parliament so she can't announce that before that date. of course, knees needs to feel the temperature of the markets right now with these t bills today, but it's important for greece to show that it can hold until mid-may before asking for my rescue from the european commission, from the eu, from
the imf. steve, back to you. >> carolina, we're going to let you go. guy, if you can hang around, if you would, let's get back to our guest host, simon grose-hodge of lgt bank. simon, i want to switch across the mediterranean from comments from the perhaps one of the best central bankers out there. he says this morning markets are far from normalizing. he says there are still enormous risks to these companies. my only problem is, when you have such extreme austerity, not only in spain, but in greece on the back of this fiscal bailout, which will mean they have to tighten their belt, high unemployment is going to be a real risk. hence, this crisis is going to remain with us, isn't it? >> absolutely. you're right, steven. this is not a solution. this is merely a crisis. people were talking about doom's day scenarios and that has forced the eu into coming up with this package.
but one, it has to be one of the most reluctant rescue packages you've ever seen. and the second thing is, judging from the way they're saying it's going to be enacted, greece has to absorb almost every other opportunity, which means we're going to have to get a greek auction failure before we're going to the eu. so there has to be a lot more bad news before they're able to tap into this and get some relief. we might have avoided the worst case scenario. it's going to be a very, very long road for the european economies. all of them are going to have to have pretty drastic austerity measures. as we've seen in greece, the possibility of civil unrest. if those start biting too hard. this is definitely not a positive. it's simply an avoidance of the worst case scenario. >> simon, we're going to leave it there for the moment. thank you very much, indeed, simon grose-hodge. guy, i'm afraid we haven't got
time to get back to you now, but we'll speak to you throughout the morning on this story. we're watching the thailand situation very closely. the government there has accused the former leader of stalking weekend unrest. let's get the latest from chloe cho on the ground now in bangkok. chloe, what's the latest? what can you tell us? >> christine, it's a precarious situation. the sounds of protests and sounds of up country music are becoming a primary feature here in bangkok and really uncertain when a sense of normalcy can return to the city. of course, the embattled prime minister is saying they're going to try to fight talgzs that they had received unlawful donations from a company here and the alleged misuse of political funds. this comes after the election commission urged the
constitutional court to review the party over these two separate cases. what's going to happen next is that the attorney general is going to review the case within a time frame. if the attorney general agrees with the election commission, then the case moves up to the constitutional court. if the attorney general doesn't agree, that joint panel has to review the case again. all in all, the process could take a few months, several months, already the local media looking at naming a potential successor, a former pn. he served as pn twice in the early '90s and late '90s. the key issue here, christine, is that regardless of who is named that this country is going to really need to work to resolve the deep emotions of the political divide. that is just leaving this country in shambles. >> thank you very much for that.
chloe cho, reporting live on the ground in bangkok. nicole. >> out of the united states, a senate subcommittee today holds the first of two hearings this week on the role risky mortgages played on the financial crisis. today's focus is on washington mutual, the biggest u.s. bank failure. seven former top executives, including ceo kerry killinger will testify. the senate panel says wamu became a main street bank in search of wall street profits. that simply went bad. in the years before its collapse, lehman brothers reportedly had a so-called alter ego company to shift risky investments off their books. the "new york times" says the company appeared to be independent, but its board was controlled by lehman, which
owned a quarter of the firm and several former leem i can't know employees worked there. the times says that lehman never disclosed this relationship with hudson and hudson is now one of lehman's biggest creditors. christine. >> nicole, china's president hu jintao said that china would stick to its own political reform. he also said a stronger yuan will not solve the world anticipates economic problems. but there is little change right now in the yen against the dollar. nicole. the day has finally arrived. the dow has closed above 11,000. our very own rally tortoise will get a name. you have e-mailed in your suggestions, many of them, and our team has worked tirelessly to pick some of the most creative ones. but it is your turn again.
e-mail your vote to see the names of the screen. sir walter rally, roadkill, schlo-mo. we'll announce the winner by the end of the show. again, it is your turn to chime in. vote with us, if you'd like. firstname.lastname@example.org, christine. we are already getting in some e-mail responses, not only commenting on the ones we have, but suggesting new ones. tortoise, torturous. i don't know. everything is coming in. send them in. >> we have a whole slew coming up. thank you for that, nicole. coming up, apart from naming the tortoise, the world is looking to emerging markets to help boost the recovery. how would how will the earnings season compare to the developed world? we'll get first indication later today right after this break.
in the 340r7k in london. just an hour after that in frankfurt and paris. >> luxurious like a nice morning there. here in asia kra, we're watching earnings. the company has reported a 0.9% fall in market earnings to $361 million as a stronger rupee hurt demand for outsourcing. but india's second largest reported more than a full year's growth. eskopola christiansen is now joining us. you're giving out a stronger forecast. would that be enough to give out any stronger pressure you might be feeling from the stronger rupee? >> we are forecast ago 16% to 18% growth in revenue and about 5% to 9% growth in earnings per
share. this is impacted by two factors. one is, of course, as you said, rupee. rupee is impacted from 6% to 12% last year. that has an impact of 2.5% margin. we're giving a compensation in frooes of -- the impact is about %. that has an impact on earnings. in spite of that, the earnings drop as early at 1.5% or 150 bastes points because of scale benefits, cost control. we believe that we would be able to enhance the margins throughout the year and things like that. so the drop is only about 1.5%. >> sir, any comb lapin in the united states. how much does currently fluctuation concern you? >> through the rapid change in currency, you know, the moment that currency becomes volatile,
then it's challenging for any company, any exporter especially and rupee has been appreciating, as i said, with 6% in the last 12 months. that is quite challenging. >> you tell us that you're looking to grow your revenues by 16% to 18%, pretty much doubling the global technology increase in spending in the coming year. how are you going to manage that? >> clearly, there is a model of delivering shares to our market and our market is very small. today we're looking at about $60 billion whereas the total spending on services is $800 billion plus. so there is a market share movement as well as, you know, a shift towards the model. that is what is driving our
growth. >> i understand you added 47 the clients in january to march's stronger pace in seven quarters. have you been able to do it by increasing prices? >> no. our pricing actually declined in q4, the last quarter. we are looking at pricing for the next 12 months, in the guidance for the next 12 months. pricing will be challenging in the immediate future and we hope that pricing power will return as unemployment comes down, as inflation inches up, with as the economy starts to grow again. >> good morning, sir. it's simon goes hodge in singapore. image has a cash position. what is your strategy for using
those funds? will you be look at dividends, shares buybacks or overseas acquisitions? >> two things. one is this cash will help us look at acquisitions and we can move fast if we find the right company. second, in the past, we have given -- you know, we have given dividends, special dividends and things like that. so when we believe that, you know, we don't have a good use for the cash, we will look at special dividend. we don't look at -- shared by banks. >> sir, thank you very much for being here with us on "worldwide exchange." it's good to have you. >> thanks for having me. steve. >> yes, excellent. let's move on and take a look at the big income markets. we have 10-year bunch trading at 318 is the yield at the moment. of course, all eyes on this very
short-term raising of money from the greeks. 600 million euros of 12 on t bills, 600 million euros of six month papers, as well. let's take a look at the 10-year yield in the u.s. just around 4% last week. you just saw it there with 384. and the foreign exchange rates, how are they looking, christine? >> through is looking steady right now, paring up some of these losses with that greek rescue package. right now, trading is limited on the downside against the dollar. 1.3582. sterling, 1.5353. euro/sterling, 0.8845. for greece, the dollar/yen continues to hover around that 93 yen level. sterling/dollar, 1.5354, steve. >> excellent. it's time to revisit the european equity markets, as well. they were slightly lower the last time we looked at them. they are still in the same area,
but they're not retreating too far away from levels achieved yesterday. let's update us on the action. we're joined by joshua raymond, market strategist at citi index. joshua, a little volatility in the market. where are we going next? >> in the next couple of minutes, we're looking at the gb trade balance that's coming out for february. i think that's where the market will be looking for for the next couple of minutes. from a sector point of view, it's the miners that have been lagging a little bit so far. you also had a couple brokers down maply because citigroup cut their stock from the stock to a hold. the miners are dragging us down. most of the market is now looking towards the u.s. earnings season. we've got intel to announce later on. later in the week, we've got jpmorgan to announce, as well. >> in terms of something, i
don't want to boar our international viewers with, but we're all wrapped in this election here in the uk for the better part of a month.the is there a real reason why people wouldn't do stuff ahead of an election? >> oh, no. there's a hesitation there. i think everyone is actually looking to do something, but they're not going to put all their eggs in one basket because there is a degree of uncertainty. we don't know who will be the next government. that's why a lot of investors are looking at these daily polls and you're seeing those results specifically. >> i remember the good old days when the market used to swing about 200 points in the back of elections. it's so boring now that there's a middle ground, isn't it? thank you very much, indeed, joshua. let's get out to patricia. patricia, the banks are focused
to the downside in london. is that the case in germany? >> well, yes. nothing boring about our market, i'm afraid. the volumes have been subdued, about 90 million shares only have traded so far. everybody is waiting for the u.s. open and especially for that big bellwether with the numbers, i think the market is a little bit nervous, doesn't know, really, whether to now take profits on some of these really good rallies they've seen or to just hold the stock and wait for a little bit more upside to come. farth fresenias is up by 1.6%. infineon managed to keep up its head, up 0.6% amongsted the top gainers today after a weaker day yesterday. weaker stocks right now, kns and lufthan lufthansa. stephane.
>> the first quarter of this year was much higher than expected. all the businesses of the company are performing well. lvmh, not only a strong rebound in europe, but also in the united states. it remains cautious in terms of cost control because of the economic recovery and the uncertainty about this recovery. that's why the company announced this morning. this is driving the stock higher, but pbr, the owner of gucci or air mass international, which is trading 076% higher on the french market today. so that is the main story out of paris this morning. still, send it back to you, steven. >> thank you very much, indeed. we saw the currencies earlier. and the pound is trading above the 1.15 level. has the lower pound meant a lessening of our trade deficit? if you have a cheaper currency,
then you actually get more trading? is that the case? we'll find out. there has been a bit of a line in the sand around the 1.49, 1.50 level. longer term, some are calling it down further from right here. i've got some figures for you now. on the uk deficit, let's go through it, february, total goods export month on month, the highest since january 2003. that would add to the logic that the lower pound has benefited. global good trades deficit, 6 billion pounds. balance forecast, 7.3. actually, it is much better than expected. non-eu trade deficit is still quite hefty at 3.3 billion.
s. here in asia, it's all about the asian development bank. a 7 pergs boast for the asian economy this year and warns of pit falls. >> in europe, greece puts its toe in the water post the rescue announcement package as it prepares to go to the market to auction short-term debt. >> and in the united states, the dow closes above the 11,000 mark for the first time in anterior use and a half, but futures are under pressure to hold that line today. >> welcome do "worldwide exchange." let's take a look at the cnbc
ftse global 300. it's down a lot, down 0.16%. christine, what else is going on in your neck of the woods? >> it's under pressure today. you would have thought the dow hitting 11,000 would be offered something in the markets today. it didn't. take a look at the nikkei 225. down 0.8%. investors took the opportunity to on chipmakers. we saw institutions buying to large caps. we have the index futures launch on friday, so ahead of that, there seems to be a lot of trading going on. the hang seng is down 1.02%. same picture in india, as well, down 0.3%. australian market is off 0.6%. overall, we have jittery. investors hear that about earnings season and what that might mean.
nicole. >> exactly, christine. good morning to you from the united states where it's 4:30 in the morning in new york and we're expecting markets here to open lower across the board with dow futures down about 24 below fair value. nasdaq futures down about 4 and s&p 500 futures down about 3. u.s. investors get a pair of economic reports before the opening bell. march import prices are out at 8:30 new york time. at 8:30 also, trade deficit numbers will be released pd. fed governor dan turino speaks about financial regulation at 10:45 in the morning. at 7:00 p.m., fed chairman ben bernanke talks about financial literacy. and at 7:15 p.m., with rich mod fed president jeffrey lacker gives his economic outlook. intel reporting first quarter results after the closing bell. the tech bellwether is
benefiting from sales of server chips. companies jup are upgrading to new machines, steve. >> i wonder, christine, when you talk about financial lift who is in the forefront of that. the global trade numbers were 6.18 billion pounds sterling, that was the deficit compared to the january figure of over 8 billion. kevin, are these figures unambiguous evidence that labor has got it right, that the government is on the right track with our economy. >> i don't know about that, but i think it shows what we've known for a while.
we know foreign conditions are improving. that's good for uk exporters. we know sterling is depreciating quite significantly. it's an improving trend, i think, but as you mentioned before, it's still quite large. >> it is still quite large, kevin. this is nicole lapin in the united states. if the u.s. trade balance will stay with china growth, could beijing come back and say, okay, exchange rates don't really matter then? >> well, i don't think they do. there are lots of other things going on. it seems like only a matter of time before the yuan becomes more flexible.
>> kevin, let me ask you, in lieu of what we've just talked about with china and the u.s. and the united kingdom figures, as well, can you devalue your way out of a recession? because if you can, isn't that very sad state of affairs, when the peripheral is under pressure, european countries can't do so? >> yeah. i think the key point there is some countries can, but not everybody can. because clearly, the rise in somebody's exports through a cheaper currency is an increase in somebody's imports. so you need to have a balance across the world. one of the issues that has come out is that the balance isn't quite right. we all know that a number of countries, japan, germany, they're exporters and they need demand. some countries, though, need the help of the weaker currencies.
that is probably not going to happen any time soon. >> okay. >> simon, we've seen pretty much most countries are keen to have a few sectors ahead of the economy. but the one country that has never said that is the u.s. dollar. >> well, i think you're looking at a long-term situation where the u.s. is probably going to grow on the slower track compared to what it was able to grow in the 1990s. you're looking at the situation in the 2000s where the u.s. consumer is going to take a long time to rebuild their balance sheets. you're looking into the situation where the financial sector in the u.s. has got a long way to go to return to health. so a relatively low growth rate in the u.s. going forward, we
suggest that u.s. interest rates are going to stay low and i think over a medium to long-term, you will get a weaker dollar. that said, though, i think cyclely one may get a stronger dollar over the next few months or so. that's not because, you know, the u.s. is looking particularly great, but there are problems elsewhere. i think in the near term, the problems in europe look more severe than the u.s. the problems in japan, probably given the fiscal side of things there, are given more in the u.s., as well. >> does that mean you're expecting a stronger chinese currency? >> absolutely. i think it's only a matter of time before they allow the appreciation trend to continue. we think it will be a small increase. where it is now.
but i think over the medium to long-term, you know, a stronger yuan against the u.s. dollar and that is going to be a tide. i think it will lead to significantly stronger currencies against asia, as well. that's not simply because of what china is going to do. it's also because the economic upswing in asia is going to stay far stronger than the economic upswings that are developing elsewhere in the world. so i think from a structural perspective, you're going to get stronger currencies across asia. >> interesting. we'll talk more about that after the break. kevin, good to have you with us. thank you very much for your insig insights. and, of course, our guest host, simon grose-hodge is still with us for the next 20 minutes or so. going for a quick break. coming up next on "worldwide exchange," looking at the asian development bank, the adb, out with its mixed growth report.
welcome back to "worldwide exchange." take a look at the hong kong harbor. winds, heading south at 26 kilometers per hour, humidity, 79%. a little weather forecast for you. speaking of weather forecast, you're getting some temperature of the health of the asian economies here. china's limited yuan flexibility means other asian currencies will have little reason to allow their currencies to strengthen. a good idea will be for developing asian companies to coordinate in tackling this issue. it comes with a strong cautionary note. joining us now to talk more about the report, we have lee shangwau. you've given us a rosy forecast for the economy for 2010 saying
developing economies in asia will rebound. how much of that will be about rebalancing, in other words, away from the export sector towards domestic growth? >> we forecast a robust growth of 7.5% in 2010. this is due to the decisive government and has stim ewe liezed domestic demand. the real question is how to repair domestic demand. but if the picture of asian companies is to strengthen domestic demand is to make sustainable growth. >> sir, nicole lapin in the united states. we have peter fisher, vice chairman of blackrock with us on the network yesterday. listen to a portion of what he said about the trade deficit and then talk out of it. >> what i'm worried about is too much hype. the japanese yen used to trade at 360 to the dollar and it's
come down to 80. a couple of years ago. now we trade around 93 where we are today. that didn't do much to adjust our trade imbalance with japan. so we can overhype how much we can get out of exchange rates when they move. i'm worried about it more on our side than there side. >> sir, would you agree with that? >> well, i think the importance of the issue is the exchange rate, should it reflect market fundamentals. increasing the flexibility of the exchange rate will have to align the exchange rate in line with market fundamentals. and the great exchange rate to have shift to resources to the domestic economies. strengthening domestic demand and domestic industries will help to repair the growth. that helps to sustainable growth.
because asian countries really rely on the export sector, maintain export competitivety. but now is the time we need to reduce the exchange rate and a concerted appreciation of currencies to prepare regional growth debt or to help the global community. >> sir, it's steve in london. in this report, you're talking about moderate inflation, really. southeast asian inflation, 2010. the imea came utah with a report and they're talking about some of the biggest refining processing we've seen in the last couple of years. brent trading 84 plus. if it carries on in that trajectory, this could carry on enormous break in economies and an upside figure in terms of those inflation numbers.
>> is in the short-term, we think that the commodity price may be in stable conditions. for example, the oil. but if you look at nonoil commodities, for example, rise and other irons and couples, an increase, there is a risk coming from the inquiries in commodity price. but also now, as the economy is improving, as always, given the pressure on inflag, but i do mention about the 4% in 2010 and 2011 for the region as a whole and only 6.3% of china. but this is a good price. there is an increasing pressure. there is increasing risk over the asset price forward. so this is a time for financial regulatories to carefully monitor at the price development
and take necessary measures to regula regulate. >> so key risks to watch out for. thank you very much for being with us, le jong-wah. we're going to watch the situation in thailand very closely. we continue to monitor what's going on there. we have the thai government now accusing the former leader of stoking deadly weakened unrest. let's get the latest now from the ground. cnbc's chloe cho joins us on the phone from bangkok. chloe, what is the latest? what can you tell us? >> christine, it's seem a growing number of redshirts gather where i am. i've noticed in the past few days during my time here that these red shirts tend to reground as temperatures fall into the evening hours for a
huge rally. that tends to carry on into the wee hours. it's hard to tell when a sense of normalcy will return. who knows, it could be that the ruling whether democrats have to resolve or not could come down to the supreme court and it could take months to resolve it. they haven't laid out ways to form a new party. it occurs to me that the current pm's days are number. it's really a matter of when he'll go rather than if he'll go. here, i think how tun rest is going to play out is critical. whether there will this will turn into a complete state of anarchy, the impact is going to be severely felt when the new year festival comes to an end at the end of this week, christine.
>> chloe, what happens next amid all this political uncertainty? >> you know, the local media is already looking forward. they're saying, whoktd be the next form in political government? they're suggesting that the man that can do that has served as pm in the early '90s. the problem here is with the yellow shirts seizing two main airports just about a year and a half ago and the redshirts basically paralyzing bangkok city now, i'm not sure if thailand has a leader who can sustain the government regardless of which political spectrum he comes from. the question here is whether the will premier or intervene. that said, the key problem here is that over the past several years, since the ouster of talks
in late 2006, so many key figures have been given political banter, one reason to another by the constitutional court, by another court that thailand is simply running out of people. to govern the nation. and as for whether a toxin will return, it's way too risky and he will be a physical danger, christine. >> thank you so much for that. let's look at how the markets are doing today. >> i think a lot of people are sitting on the sidelines as we see herbings reports coming from the u.s. let me start with the shanghai composite. we saw some gains there. there was a sell-off in currency-sensitive stocks like the airlines, paper companies because they import raw material.
speaking of airlines, china southern airlines, which is the country's top carrier said if the chinese yuan rose by about 1%, it would record about a $73 billion exchange rate. but we did see some weakness in some of those airlines. meanti meantime, mainland banks weakened a bit. the top four bank face a capital shortfall of some $70 billion over the next five years, christine. that's pretty big. we did see some from those lenders, as well. >> postco's strong numbers, i see, what about the outlook? what is the company saying? >> yeah. pretty big numbers. in terms of the outlook, looking pretty positive because they did raise their sales target by about 8% for 2010 and now looking for about $28.5 billion. the key thing here, though, is
they do face a big challenge, not just postco, but another of the asian steel melts. a lot are saying it's going to be difficult for them to pass on these costs. set to increase prices twice this year. analysts are saying it's unlikely to cover those higher material costs. >> thank you very much for that, saijal patel. let's get a final thought from simon grose-hodge. i get the sense that you're overly bullish on the equity markets. what would temper some of that optimism? >> well, really, the biggest risk is that if we can tell too much of a big thing, one of our reasons for being bullish on the equity markets in particular is
the economy is not improving sufficiently for the fed to make any change in policy. as long as they're is it still putting money in, a lot of that money is going to go to the stock markets. we start to see credit growth rather than credit contraction, anything like that that could make the fed put the brakes on, but we don't think the situation is good six months ago and we should see further gains. along with what the adp said, we're favoring the u.s. market over, say, china and even japan looks likely better on evaluations. >> do you have a name for the tortoise? >> maybe ray bans. that's what he's going to end up being. >> thank you very much for that. >> you heard that, nicole. rayban. that could be a name.
attention medicare recipients! the following is important news from hoveround. with medicare and your supplemental insurance, a power chair costs you little or nothing out of pocket. that's true for most power chairs. but when you choose hoveround, you get a better power chair. how is it better? just ask these questions: is it round? hoveround is the only round power chair. that makes it easier for you to get around the tight spaces in your home... "i love how easy it is to maneuver." is it reliable? at hoveround, we make your chair, deliver your chair for free, and service your chair right in your home. no one else can say all that!
welcome to "worldwide exchange." the headlines making news today, outside out of the united states, the market closes for the first time above 11,000 in more than a year and a half. >> and in europe, greece puts its toe in the water as it goes to markets to auction short-term debt. >> and china's president says beijing will not be swayed by external pressure to reform its currency after meeting u.s. counterpart obama in washington. >> great to have you with us here in the united states.
i'm nicole lapin pt thanks for joining us on with was. dow futures are down and they have been lower for the last hour or so. about 32 below fair value right now. >> yeah. i think that's good. the only part of this european market is moving forward. we've given up the highs of yesterday. we traded near the lows today. banks and commodity stocks which, of course, are higher, to the upside, pulling back a little bit. christine. >> well, in terms of the markets, we are under pressure today. the currency side, this is how the picture is looking. we are continuing to monitor the
euro against the dollar right now, given what's happening with greece. the package after that big spike we saw yesterday right now, trading a bit flat. 1.3584. euro/sterling, 0.8822. dollar/yen, hovering around the 93 level. and sterling/dollar, 1.5392, steve. >> thanks so much for that, christine. joining us for the next hour is phillip mandusa. looking at these moves with some of these indices, i know the nasdaq is up, the dow up 5.5%. the european markets are pretty much in cha range. we've had a decent rally. they haven't gone mad this year, but is it the right move that we've had so far? >> it's been climb ago wall of worry and everyone is terrified of sovereign risks, they're terrified of economic collapse, they're terrified of every competition that's out there.
is a lot of fear out there and it's the biggest fed in terms of what's holding this market back. but i keep saying to all of these bears, show me why. where is your problem? right here, right now. could, should, would, those aren't what winners talk about. at the moment, all that is happening here is the markets continue to climb on a wall of easy money. >> nicole lapin in the united states. along with investors, individual investors are feeling that fear and they are holding out of the market. when do you think the individual investor is going to jump back in? should the individual jump back into this rally? >> i think they've been walking back in for quite a particular period of time. pushing it out into fixed income
and in particular emerging market equity funds has probably been the right place to play. my view remains the same. in the absence of anywhere to really put your money, they are going to continue to gradually walk higher into this wall of worry. the only thing i can really see that is a threat to the equity markets and a threat to the global economy as such is going to be, for whatever reason and i can think of one or two, a ride in medium to long-term rates. and by that, i mean, taking the benchmark treasury, one of which is an economy creating significant inflationary pressure us down the road and two and more probably and almost certainly at some point over the course of the next 12 months, sovereign risk beginning to impact on the american's ability
to continue issuing debt at this point. and either at that stage we get more qe, which is fabulous for gold, or, of course, we get fiscal contraction forced by gold. that causes economic contraction, that causes equity markets to start closing downward. one of those two things is likely to happen in the next 12 months. >> this is christine here. what are the high oil prices? how much headwind could that post for the equity market? >> the oil prices are such, it is a huge problem. yes, it's a problem at the margins. consumers are, of course, on a buying strike at the moment. they're not getting any more money in their wage packet.
that is why at some point in the next two to three years, you're going to get the globalization, more protectism, just to protect the domestic labor markets overpriced relative to the new worl. but that's tomorrow's problem. i don't think higher oil prices is necessarily a bad thing. >> nil, stay with us for the hour. let's get some big stories we're following four from around the world, meanwhile. out of the united states, the a senate subcommittee holds the first of two hearings on the financial crisis. today's focus is on washington mutual. seven former top executives, including the ceo will testify. the senate panel says wamu became a main street bank in search of wall street profits. an investigation found with a
mix of high risk lending, lax controls and destructive compensation, wamu flooded the market with subprime loans that went bad. and in the years before its collapse, lehman brothers reportedly used a so-called alter ego company to shift risky investments off its books. the "new york times" actually says that the company called hudson capital independent. but its board was controlled by lehman, which controlled a quarter of the firm and several lehman executives worked there. lehman never disclosed this relationship with hudson and hudson is now one of lehman's biggest creditors. there was a narrower first quarter net loss which matched forecasts, although revenues came up shy. the company benefited from higher prices and said markets are improving. but alcoa's ceo is raising the expectations of strikes. the company recently lost a
major can happen customer for beverage cans. in frankfurt, alcoa is lower by 3%. christine. >> sinopec has agreed to buy a 9% stake from conco phillips in canada. and the price tag is higher than what markets were expecting. the acquisition underscores china's hunger for global energy resources to fuel its moving economy. sinopec said the deal is expected to be closed in the third quarter of this year. checking shares of sinopec, up 1. % higher in hong kong and in shanghai, 237%. elsewhere, watching shares of macarthur coal, lower by 3.r5%. it's focusing on acquiring
glouster coal. its second and third largest shareholders have not decided whether to support the acquisition. meanwhile, new hope is standing by after a bid by macarthur. right. the day as finally arrived, i'm told. the dow has closed above 11,000, which means our very own rally tortoise will finally get a name. why don't you e-mail your votes in and your favorites. yes, we have been getting some last minute new names coming through just to confuse things, but we will have a name by tend of today's show. jeffrey? >> too much commentators from "squawk box," don't you think? >> i know. it's the wrong show.
on cnbc.com now, lvmh had a strong fist quarter. the news that the louis vuitton maker shares up to a decade high. for today, $1.2 billion euros in t-bills said pimco would not be participating due to greek bond auctions. plaquerock's bob doll tells cnbc investors should be overweight greek assets. find out what the other investment calls are on cnbc.com. hello and welcome back to "worldwide exchange." let's get to our global roundup of equity markets. the ftse is down 1.3% because the miners and the banks, the high stocks which led us higher are taking a bit of a rest
today. there you can see, miners down to the low side. let's now get out to germany and patricia. thanks very much, indeed, steve. at the moment, if you look at the main gainers and losers, you can't really pinpoint what sector is being trade up as such. it's a mix of everything. they are amongst the main gainers. perhaps profiting a little bit from the lvmh announcement. infineon is trading up head of the numbers. lufthansa, volkswagen and siemens are lower ahead of the announcement. that is a reaction to the conditions given by the german government when it took a 25% stake in commerzbank. today, it has announced the sale of adb. adb is basically a building
society they took over with allianz. they are getting about 120 million euros for that, which is good, as well. they are bagging about 90 million for the second quarter of 2010. all in all, it's interesting news coming out. the midcap index down 0.4%. volumes are very muted, indeed. that is frankfurt. over to stephane in paris now. >> and in paris been the global picture is weaker. we have a very good session so far for the luxury sector. 11% rise for the sales in the first quarter, which was much better than expected. all of the company's divisions are well into the first quarter with a couple digit growth,
according to the company's statement. activities were weak over the last quarter. lvmh has noticed a strong rebound in the u.s. and also in europe. still want to replay a cautious cost management strategy because the recovery is not down on the strength of the recovery. that is the official statement. and the lvmh is trading two persons higher. gucci is higher. another french luxury group is in good shape today. quick look at peugeot citron after more speculation with an alliance with an international carmaker. peugeot citron will be the next carmaker to look for a merger, not surprising after the last announcement. peugeot is up 1.4%. let's have a look at the swiss markets with carolin in zurich.
>> the smi hasn't moved a whole lot this morning. we have a couple gainers on the index. but switch group, the luxury catchmaker is one of them, up 0.4%. lvmh had a better than expected organic growth number in the first quarter. rose has announced that it was buying madingo for up to $2.2 million. with that, it's effectively expanding its diagnostics business with a set of a new diabetes product. the launch of a new insulin pump is expected for 2012. analysts expect that this product will reach annual sales of around $300 million. analysts believe it's a very good fit. roche is trading to the down side by 0.4%.
saijal. >> carolin, we have positive news coming from wall vote, but it looks like a lot of proovt taking ahead of us in earnings. japan's nikkei closing down 0.8%. we had some strength in the yen so that the sell-off in some of those exporter stocks, as well. samsung electric bucking the trend after recording its profit is likely to rise to 45 billion yen. panasonic bought the majority stake back in december, if you recall. the shanghai composite did come back and close 1% higher. we did see a sell-off in the yuan sensitive stocks. this is as the chinese president hu jintao is suggesting that appreciation wasn't imminent and the stocks that were hard hit were the airline stocks, mainly. south korea's kospi, basically
flat. we did see gains in some of those exporter stocks. after the markets closed, putting in pretty good numbers. operating profits coming in at $1.3 billion. raising its sales target for 2010 by 8%. so a bit of a positive outlook coming from costco. on that note, to guy in athens. >> reporter: thanks very much, indeed, saijal. we are getting details of the first auction results. we've got the yields around 4%. we'll have details when we come back on "worldwide exchange."
welcome back to "worldwide exchange." the result of greece's bond issuance are out. let's get on to guy johnson in athens who has the details, plus carolina can look at it from a brussels point of view. guy, did they get away with it? >> they did get away with it, but they had to pay up for it, steve. the bid to rate issue was very, very high. the yields was 4.85% with a 6.5
times base to cover. in january, they paid 2.2%. in 26 weeks, they had to pay 2.455, the yield. the coupon, again, much higher than anticipated. but again, very strong bids to cover. so very high participation, but also a very, very high yield. greece has to pay up to give this money away and that tells you a lot about investor sentiment at the moment, despite the fact we've got this bad drop of the greek story and the brussels story, we are obviously watching the market, still having a lot of nerve, still having a lot of concern about this. and we're only talking about six-month paper and 12-month paper. you would have thought the risk of default is off the table at this point in time, but greece is having to pay up even in that time frame. >> guy, thank you very much, indeed, for that.
let's get out to carolina in brussels. any idea what this could mean for future bond rates? i know it looks cheaper. >> well, steve, everybody here is watching what is happening in the markets right now with a lot of attention, i have to tell you. but that is what the european commissioner for monetary affairs told you. they were going to watch this tuesday auction in the markets before they took any new steps. but he told me that on sunday. yesterday we started hearing about these different views that germany and brussels have over how to start this mechanism to help greece. so let's say greece says, yes, it is too much, we now need your money, it's going to be very interesting to see what is going to happen. because the commission and almost all the countries say that almost all the finance ministers need to agree and give an okay.
the 30 billion euros to greece is straightaway while germany says they need to have a unanimous vote by all the european leaders before this is done. so this second method is also pushing the markets the a little bit against what greece would like to pay for this auction. >> i'll tell you what, guy, you have to think about this. this is 12-month paper charged at nearly 5% makes you wonder what the coupon is going to have to be on what has been charged for three-year paper, five-year paper, 10-year paper. it's still going to be above that 5%. so i would have thought, as a result of what we've seen in the market in the last few minutes, continuedcations are that greece is going to go well over that side of money. once you go faurth out, this is a duration beyond the banking of this package, you could argue greece is simply going to be paying too much. it would rather pay the 5%. i think we're going to see the
greeks fairly soon and it could come within the next few days. we need to get this done fairly soon. we need to get this done in advance of the election. that is going to put merkel in a very, very difficult situation. >> yeah. our guest host is still with us, phillip manduca. phillip, why don't the greeks just say, this is ridiculous. we want this meeting now and we want our 40 billion euros at 5%, thank you very much. >> they're going to say that. and the market is the truth and the market is saying sometime over the next 6 to 12 months, the greeks are going to, a, come and get the euro crap money and b, they're going to have to do it in scale. and c, ultimately, there isn't going to be enough eurokrat money for greece, spain and everyone else. and greece will create a partial default situation and the eurocrats are going to say, we
haven't had enough of this continu continuum. the greeks can't reduce spending, can't raise taxes and there's only one other way that you ever historically get out of this, and that's default. cut spending, raise taxes, you can't do three of those, you will end up in default. the markets are pricing to that. it won't be enough over time. eurocrat money to cover the other peripherals and i'm absolutely sure of that over the next 12 months. >> tease a gloomy picture of the sovereign debt situation in greece. phillip manduca, head of investment for ecu group. and thank you to you, two, as well, carolina in the office in brussels and guy johnson in the sunshine in athens. coming up next on the show, what does the greek crisis mean for the euro? will the common currency be weaker after it's emerged stronger than ever?
welcome to "worldwide exchange." the headlines making news today out of the united states, the dow closes above the 11,000 mark for the first time in 18 months. but futures are under pressure to hold that line. >> in europe, the euro is holding the rally after greece manages to cover its short-term auction, but at a high price. >> and here in asia, the asian development bank calls for a 7.5% growth for asian economies this year, but also warns of pit falls. >> great to have you with us here on "worldwide exchange," brought to you live from the u.s., europe and asia. u.s. markets are likely to open lower across the board after the dow crossed that 11,000 mark, that psychological level, even though it was just 11,005
yesterday for the first time in a year and a half. dow futures are down, though, about 32 below fair value. s&p 500 futures, also down about four after the s&p closed at 11,096 yesterday, steve. we are kicking off earnings season. we have intel, big bellwether reporting after the bell today. you guys are fairly flat at this hour, right? >> we are. we're basically sitting with bated breath. certainly for the short-term. but we are down and we're impounding those losses a little bit just before this session month to date. we're off about a mean 1.7% on those indices, you can see on the screen. christine, what about the dollar, is it falling back after this greek auction? >> no. let's see. let's see the charts. we are monitoring that very closely right now. the dollar/yen, firmer against the yen as well as against the euro right now. right now, 93.08. euro/dollar, 1.3575. we saw the euro climb to
four-month highs yesterday. sterling/dollar, 1.5383. nicole. >> and christine, as we get into earnings season, global companies can't ignore and are concerned about the emphasis. let's dig into currency for this last, next segment. still with us, our guest host, phillip man did you ca. both of you have opposing views on the euro. malcolm, you believe that it's going to stay at low levels. why? >> well, i think that europe still has a lot of issues behind it, not the least of which is greece, ireland, italy and portugal and spain with their currency issues and their financial situation. we think the united states will global grow faster than europe will which should allow the
dollar to strengthen relative to the euro. the united states is not without its problems, but those are well known and the bigger issues are largely behind it. we think that will give strength to the dollar this year relative to the euro. >> malcolm, let me get phillip's view about this. once upon a time, the fashion was that europe would be a beneficiary of sovereign wealth funds, diversifying into currencies. that was the fashion. people still knew that there was a big deficit of public debt in europe. now the fashion is to concentrate on the latter rather than the former. >> my fashion was when you wanted to diversify, younied a place to do it without paper and that was into gold and i still have that diversification. i don't think there is a natural diversification out of one currency into another.
we've discussed why the euro is going to do that and it's hard to argue with anything that malcolm said. the problem is, fx is a relative game and everyone else has the same problems, too. and god forbid if over the weekend you'd have the imf develop into the uk and it was amazing that the greek and euro didn't get hammered because it was a multi nation currency. but if it has happened to the uk, sterling would have been cremated on monday morning. i agree with them, you're going to get better growth for much of 200 in the united states hahn you are in europe. therefore, you have to favor the dollar over the euro. but it's not by a significant degree. and the big issues coming forward is it's not about economic growth. it's about budget deficits and sovereign risk. in that regard, the united states probably has an even bigger problem over the medium term than anywhere else.
>> malcolm, this is christine over here in asia. from your side in the u.s., how much focus are you placing on the yuan in the u.s.? there's a lot of surrounding the yuan. this is a sound bite of what he had to do. please listen and give us your comments. >> what i don't think it's likely to do is really make a difference in our trade relations, our trade deficit. as long as we in the united states run a current account deficit, we're going to have a trade deficit with somebody. it will shift to somebody else. it used to be principally with japan. now it's shifted over and it's with china. >> malcolm, do you think there's too much hype surrounding the chinese yuan? >> well, i think there is a lot of hype. we have a trade deficit with somebody. it used to be the primary trade deficit with japan. now it's moved to china. and the issue as to whether or
not the chinese currency should be -- they should change the valuation vis-a-vis the dollar rests on whether or not it's in china's best interests to do so. we can talk about it all we want. our government can job own the issue all at once, but the reality is china is not going to do anything about their currency until it's in their best interest and what is going to cause it to be in their best interests is if their inflation rate can't be tackled strictly through monetary issues within their own borders. so at that point they may have to turn to revaluing the yuan relative to the dollar. >> very good. even with this debate, both you gentlemen keeping it classy, staying with us, malcolm pollie, and phillip manduca, staying with us for the rest of the hour. still to come on "worldwide exchange," advertising come to twitter? find out how the site is hoping to turn a profit, after the break.
>> the nikkei was down to 0.8%. >> the strengthening yen triggered a weight on the market. general contractor katayama lost nearly 3% after the nikkei reported to expect an operating loss of $100 million in the year ending march rather than the $226 million profit it had previously forecast. it was their first operating loss since going public nearly who years ago and was due to losses in overseas deals. meanwhile, batterymaker gfuasa was one of the notable gainers. it rose nearly 5% after the government announced to raise sales of hybrids to around 50% of all new car sales by 2020, up
from the current percentage. that's the nikkei report. >> thank you very much for that. other stories in asia, hu jintao said china would stil stick to its own path for currency reform. and the sidelines have a nuclear summit in washington, d.c. hu said a stronger yuan will not solve the world's economic problems. spot yen was little changed. right now, trading around 6.83 to the dollar. nicole. >> and christine, treasury secretary timothy geithner says the u.s. is at a defining moment for financial reform. in an op ed piece in today's washington post, he urges the senate to pass legislation and addresses the too big to fail issue. president obama is pushing congress to pass financial reform by september, of course, and geithner says the administration will fight any attempt to weaken the senate bill which goes to the floor for debate this month.
gmc ceo said he expects operating results to show the automaker is moving faufrd to profitability. he has predicted gm will be profitable this year. sales are up from a year ago and gm has slashed costs and shed billions of dollars in obligations through bankruptcy. gm will release q1 results in mid-may. twitter reportedly plans to start rolling out ads today in the company's first attempt to profit from its microblowinging service. twitter has outlined a strategy called promoted tweets at the ad age digital conference in new york city as apparently will appear at the top of search results similar to google's search system. over time, ads may show up in a steam of posts users see while they log on. there were reportedly be tin ten initial advertisers including best buy and starbucks.
steve. >> the aftermath of the whole credit crisis continues to be with us in many forms. now the fsa, uk regulator, fining and banning former northern rock debt chief executive and doing the same to the credit director for misreporting mortgage arooe rears. david baker, who is the former deputy ceo of northern rock is being find 504,000 boundz pounds sterling. richard barclay being fined 140,000 pounds. let's get a final thought now from phillip man did you ca, head of investment ecu group. let's talk about something you like at the moment. that is gold. ever since i've known you, you've been an ex pone end of the virtues of the yellow stuff. why is gold going to be a beneficial investment? >> because it doesn't have debt associated with it and it can't be controlled by any one central bank or government that wants to play with it. you are going to get a situation
and you are getting a situation where budget deficits continue to expand. political world contraction isn't there. electoral will to receive the cuts or the necessary rise in taxes isn't there. people do not want to take the pain anywhere. there's a lot of talk about let's cut this and let's raise that. but watch what people do, not what they say. even the conservatives in the uk have had to back off. so you can see the world to deal with effectively debt. this debted is going to be the single biggest driver in my opinion of bond yields and sovereign risk over the course of the next year or two and the only way to deal with that, because, of course, property markets and all kinds of other things are dependent on where interest rates go will be quantitatively to keep them down. >> the fact remains, a lot of people have gone on back ovptd gold story. a lot of etf investors, all those fundamentals, while they may seem absolutely correct, i'm
slightly concerned that the financial investor has skewed the upside picture for the product. >> i've heard about this crowded trade and crowded trades always bother me. but the real driver of gold, beyond the fundamentals in terms of the investor play, is not going to be you, steve. it's going to be the guys out in asia who are suffering from rising unemployment rates, which again, they are refusing to deal with by the necessary higher interest rates which will, of course, begin a higher currency and impact upon their trade. so everywhere, you've got stagnation of property and there isn't a lot to talk about in markets at the moment because not a lot is happening. and they're dealing with the various problems and they're different on both sides of the world, the developed world against the emerging world. but on both sides, you've got fundamentals forcing upward pressure on the gold price. there's always a risk we can get down to that 950, 1050 level on gold. here we are at 1150 and my information is that the asians are buying gold like crazy and i think there's a lot of asians still to come who haven't bought
gold yet. are we a saturated market? not a chance. there's a whole new guy out there who wants to buy it. >> phillip, it's been a nice pleasure speaking to you partnership haven't spoken to you in a long time. phillip manducah, investment for ecu group. coming up next on "worldwide exchange," we're expecting trade balance data today. after the break, we'll let you know what to expect and what else is likely to move markets.
okay. finally, it is time to name our tortoise. is this a guy or a gal? now we know it's a gal. after lots and lots of debate, the winner is becky slow. becky slow is our mascot. steve, i understand we have late breaking reaction from the lovely and talented becky quick who served as the inspiration for our mascot?
>> i think. i think that was a complicate to you, becky. >> i have to say, idea, you know, it was crawl kintny ya that i thought that was the best name. that one works. i guess since it's a girl, it doesn't work quite as well. i will gladly take this title from this. it's an awfully cute tortoise. yeah, wow, okay. i'll go along with that. this morning, we have a lot of things going on. you guys have been talking about how the dow is closing above 11,000 for the first time since september 2008. the bulls have a lot more to deal with right now. we have a lot of economic data on the plate this week. we have the start of earnings season. we're going to put it into perspective for you with our lineup this morning. that includes jim paulson, chief investment strategist. we have ed kion of quantitative management associates and bill dunkleberg with a much awaited
report on how small businesses are feeling right now. also, state of pain, governor chris christy is in charge of getting new jersey back on the right track. so far, his methods have generated a great deal of controversy. the governor will be giving us a progress report coming up at 8:00 a.m. eastern time. this is something that's happening in a lot of municipalities, states, cities across the country. we'll talk about what is happening in the state of new jersey and how this is happening, as well. we're going to find out how the texas roadhouse remains strong with the struggling economy. i'm pretty sure there's no tortoise on the menu, but we'll make sure when they come up. >> i think it's tortoise soup to start. >> no, no, no! way too cute. we can't do that at all. no way. >> especially now arthritis called becky. becky, lovely to see you.
>> thank you. see you later. bye. >> u.s. investors get a pair of economic reports before the opening bell today. march import prices are out at 8:30 in the morning new york time. at 8:30, trade deficit orders will be released and the gap is seen widening to $39 billion. so still with us for a closer look at today's trading day is malcolm polly. malcolm, you say a lot of this data we're getting in is just okay. are we over feeling gaga over this because they are now okay versus terrible? >> i don't know if we're feeling gaga over this. the markets seem to be extrapolating the data we've had soever and saying this is a normal post war, post recession recovery. we don't believe that. we think that, you know, the
data we've had is largely, if you compare it to the bad numbers that we've had a year ago for most sectors of the economy, it looks wonderful. but if you look at it relative to where we have been, we've got a long ways to go. we think the consumer is tapped out. the consumer really doesn't have the ability to grow spending at the level that you would like to see or has historically been the case. and so we think that the growth for the full year is really going to be relatively subpar. so we're not getting that excited about the data other than the to say that -- >> so far in terms of any corrections? a lot of people are calling 5% to 10%. >> that wouldn't surprise me all that much because the move we have so far expects that we have a formal recovery. we think as the market realizes this is not going to be a normal recovery, the markets will correct a little bit. 5% to 10% wouldn't surprise me.
>> what would surprise you in terms of earnings? we had a wimmer with alcoa. we're hoping to end with a bang. intel reporting after the bell today. >> intel will probably show reasonably good numbers. companies like alcoa who don't have a lot of control over their own cost structure don't have control over their own destiny, so to speak. intel has a little more control. so i think it's going to be a bit lumpy in terms of the earnings announcements that come through. by and large, you're not going to look too bad. >> malcolm poly, president of stewart capital advisers. we appreciate your time. let's take a look at how markets are likely to open, lower across the board as we're nearing 6:00 in the morning. dow futures have been lower
about 26 below fair value at this hour. that's going to do it for today's show. i'm nicole lapin in the united states. >> i'm steve sedgwick in london. >> and here in asia, i'm christine tan. thank you very much for your company here on "worldwide exchange." >> let's leave you with some live pictures of where the conservative the officials uk position will basically underline their 130-page conservative manifesto where they to form the next government. david cameron will give us his manifesto at the top of the hour. he's talking about giving more evolution of government all fitting in with the spirit of austerity regardless of who wins the next election.