Skip to main content

tv   Worldwide Exchange  CNBC  May 5, 2010 4:00am-6:00am EDT

4:00 am
debt prbs in greece. joining us for more is kirby daily. kirby, we're all concerned about contagion on the debt side. the leading indicators suggest we have a nice recovery on the way. so which one are you supposed to put more focus on? >> well, i don't put much focus on any economic indicators at the time, because as i've said in the past, they have all been bought and paid for. everything that we're seeing in the terms of economic numbers in the u.s., in europe, around the world are the result of monetary, massive stimulus and fiscal. they mean nothing in terms of self-sustainability going forward. certainly, the greece issue and the contagion that we're seeing should be the focus of markets, should be the focus of the world. i've been nothing but a broken record over the past month saying risk aversion is coming back. it's probably not going to be a straight line.
4:01 am
markets probably don't how to digest this. certainly they're starting to wake up to the fact that this is a major, major problem and it's not going away. i'd like to say one thing. the word contagion to me implies there's a healthy body getting sick from someone catching something next to it. this isn't contagion. these are all sick bodies. let's look at what's happening in spain deep down. let's look at the fact that that's not going away. let's look to portugal itself. this is not going to go away if each country is dealt with. each country has to be dealt with on the merits of its situation and that is a problem. >> does that mean you discount completely any good corporate numbers? >> again, corporate numbers are the result of implementation of the massive stimulus. the types of revenue now, retail sales are up in the u.s., it's from government transferses,
4:02 am
it's from the first time home buyer's checks arriving in mailboxes right now. we're seeing a lot of this revenue growth, not top line, but from cut. they can't continue to cut to the bone. revenues right now are strong. the crux of stimulus implementation that is leading to a bump in consumption that i don't believe or suspect will be sustainable until 2010. therefore, corporates look great right now. let's look at them in six months to a year and look at where we're pricing in future projections. that's the key. when you're buying a stock, you should be looking at future growth. what i'm seeing is not a lot of self-sustaining in the economy. that's why i'm saying equities will adjust down plus risks are not properly priced anywhere in global markets. and we're going to start seeing them priced in now and that means equities will fall. >> that sets us up. you're with us for the rest of the hour, kirby.
4:03 am
let's remind you where we are with equity markets. one hour into the trading day here in europe, we are down 0.8%. xetra dax down 0.68% lower. cac 40, lower by 1.1%. there is a big disconnect between those markets and the sort of the club med here. the assets composite down another 3725%. spain, the ibex down 2.5%. italy down 1.5% and portugal down 2.5%. we are seeing a greater degree of selling in those markets where there is more focus on the debt problems, christine. >> speaking of selling, we have selling here in asia, as well. trade was thin with japan. korea was closed today to mark respective holidays. elsewhere, much of the action happened in greater china. shanghai managed to recoup heavy losses to close higher 0.8%.
4:04 am
banks were the key focus, lots of fund-raising exercises. the hang seng is down 2.1%. kirby mentioned risk aversion. this particular market seeing risk aversion. sellers really selling out of the positions. the australian market continues to push lower, 1.3% and the bombay sense sex trading down 1. %. the indonesian markets getting rapid today. composite is down 2.8% on news that the finance minister has tendered her resignation after being tapped to become managing director at the world bank. so the market is not liking the views at all. how is all this impacting the ftse cnbc global 300 index. let's check it out and see how the index is doing. pulling lower by 24 points,
4:05 am
4,3431. we're watching kooep key data coming out in the u.s., and the adp report is going to be key. it is a precursor to the day of trading, but also a precursor to the jobs report on friday. dow futures, we're figuring out our footing. we're down about 14 below fair value at this hour. nasdaq futures about 5 below fair value. s&p 500 futures are flat. not only do we have the adp report, we have inbev, time warner and ism numbers coming out at 10:00 this morning. >> nicole, joining us now to talk about all these issues, our guest host for the next hour, kirby daily. kirby, markets are a justing down here. how much move of a sell-off dow expect to see? >> i didn't want to imply that risk averge has come back. we're starting to see it because
4:06 am
i do expect a lot more. again, the key is this. risk is not properly priced in almost anywhere. spreads are far too tight. they've come in to a point where asset prices are reflecting a recovery that is self-sustaining, that is going to continue without any major problems. that's where investors are going to get into trouble. we are going to see a slow rebalancing of risks around the world. the problem is, with all the liquidity and all the mixed signs that we're seeing, again, from the above signs of implementation that aren't sustainable, investors don't really know how to price risk right now. so the risk aversion that comes back isn't going to come back as quickly as it did post lehman. yesterday was rapid. it's going to be moving in one direction over the next three to six months and that is to properly price in. that means the u.s. dollar will gain and treasuries will gain and equities will adjust down. go ahead.
4:07 am
sorry. >> i want to ask you about this risk aversion that the markets are having trouble pricing in. how do you think china is going to see this risk? is that somehow going to delay the currency reform? are they going to use that as a good reason to do so? >> well, they certainly could use it. they say it is a factor on their implementation process on how quickly to implement a resumption of the yuan strengthening or let it go. even if china implements this and allow tess yuan to move and strengthen against the dollar and other currencies, they can at any time arrest that process and reverse it if they feel that the global situation has changed. they will not be bullied or pressured. they haven't in the five years that this process is going on. they will continue to assess the global situation and i believe that they are worried about the sustainability of demand for exporters. if they allow the yuan to strengthen as everyone is calling for, they get the double
4:08 am
whammy when consumption drops off dramatically. they're watching what is happening around the world with risk aversion. that will affect their decision. >> kirby, nicole lapin in the united states. obviously, we are looking at the china situation. these days, we're more concerned about the euro zone. but the sell-off yesterday, is that going to trigger a true correction or are we looking to buy in dips here in terms of strategy? where should we put our money? >> i absolutely wouldn't buy on dips. i'm willing to give up the upside because risks are not properly priced. up theside risk in equities to me is far too high. so i -- but i have said i will not short them on the way. i think taking money off the table is prudent for investors.
4:09 am
getting exposure to the risk aversion trade. i'd like to make a very important point here. i have said risk aversion trade is five legs nicely, buy the yen, buy the dollar, buy treasuries, sell commodities including gold and to sell equities. look for a place to get out of dollar, out of the treasuries, out of the yen and into hard assets like gold and commodities as this process reverses. i want to say that the yen is not participating in this and that's a sign. as soon as the yen stops participating in risk aversion as a safe haven currency, we get the feeling that the reversal that a lot of the carry trade that's been implemented over the last ten years might be petering out. there is no reason to be in the yen. i would be re, very careful about exposure to the yen right now and look for the safe haven of the currencies to outperform in this risk aversion. >> and when we get a stronger dollar, we see a sell in for commodities. kirby daley, we will continue
4:10 am
this conversation. stay with us for the hour. that's the good news. senior strategist at new edge group. let's get stories we're following for you around the world today. specifically out of the united states, bp is expecting to plug one of three holes where the under water well is leaking into the gulf of mexico and install a containment device within a week. the 70-ton dome is seen as the best home to contain the leak. roughly 276 million gallons of oil have spilled into the gulf since april 20th. that blast, of course, sank the deep water horizon rig. now congress has raiseded the measure to lift the liability limit for economic damage to the spill for $10 million. bp is responsible for all the cleanup costs. company executives met with lawmakers behind closed doors on tuesday. >> bp is now known as british petroleum. if this leak is not shut off
4:11 am
soon, it will become known as bayou polutta. and they will be known that way forever. whatever resources are needed, they must put into this effort with no month object. >> and a hearing has been scheduled for next wednesday in london. bp is now trading up about 0.5%. ross. >> it has lost around 20 billion of its market capitalization since that disaster truck. turning our attention back to politics in the euro zone, chancellor angela merkel says europe's future depends on the success of the greek aid package. the country must live up to its responsibility and will help to prevent damage in the future. her address comes as the parliament meetings begin today. germany is contributing the lion's share, more than $28 billion. >> ross, chinese banks in focus.
4:12 am
agricultural bank of china has filed with regulators on tuesday for its $30 billion dual listing. the listing is expected to be the world's biggest ever initially listed offering that bank has so far declined to comment. we'll see how shares are reacting in our stock watch right after this. just a reminder where oil is trading, the nymex contract just down .55, $82719.
4:13 am
4:14 am
4:15 am
risk aversion is in the market and that is benefiting the aaa bond. the 10-year bund yield down, 3.92%. gilt has rallied, despite any concerns over what's going on with the uk election. and we've seen spreads continue to wind with the remember rifales. there will be plenty to focus on portugal, the yield up and spain the yield going up as the
4:16 am
spreads, as i say, widen over german bunds. as far as the treasuries, the market is ready for more of a crisis. the 10-year bond yield, 376%. the space above it suggests there may be concerns that the u.s. -- sorry, the greek crisis may curb some u.s. growth. but of course, we have the employment number out at the end of the week, which is going to be very important, as always. it's amazing how quickly it comes around, christine. there's only 12 a year, but there seem to be a lot more. >> it's amazing how currencies are shaping up, as well. dollar/yen, 94.57. euro/dollar, 1.2958. sterling/dollar, 1.5131. euro/sterling, 0.8560.
4:17 am
japan is closed today for a public holiday. nicole. >> christine, the april adp report will be released at 8:15 in the morning new york time. this, of course, tracks private jobs and the forecast calls for a rise of 20,000 last month. at 10:00 in the morning, april ism services index is out. and the weekly inventory data is out at 10:30 in the morning. a dow jones survey calls for a build across the board. on the earnings front, we hear from media giant time warner, devin energy. before the opening, cbs and prudential after the close, ross. >> i'm just getting comments out right now, nicole, from mr.
4:18 am
vaber, head of the bundes bank. talking about threats of serious contagion effects from other states. he says the greek financing on capital markets is greatly endangered and the greek default will be in financial sablt for the euro zone. i'm not sure these comments are necessarily helpful. because it's firmly saying policymakers accept there is a serious policy affect and talking about greek default. it's putting in the mind-set we're considering about it. we'll so he get some comments coming up. mean time, european markets are down approximated. the ftse 100 off just a little less than .5%. xetra dax off a little less and the dax off a little more. anna. >> we have the mining dockses
4:19 am
doing pretty well. bouncing a bit from there. big selling the last couple of days. peru tental is very much in focused. they've delayed their rights issue in relation to the takeover of aia that they were planning for $35 billion. the rights issue was going to total $21 billion. is this to do with regulation or is this to do with shareholders not liking the deal? we understand reports have suggested, at least, that many shareholders connected with prudential have not been in favor of this deal and would have liked some kind of a break-up or asset sale instead. the reasons we have been given by prudential have not been said. people are putting two and two together and saying this is regulatory concern. this is just one day ahead of a uk election that could see the conservative party election to at least some powerful position within some kind of coalition and it's the conservatives who want to skrab the usa.
4:20 am
prudential paying the price, but the share price, in fact, is down now. it was up in the early part of the session. now it is done. we are, of course, focusing on bp, as well. that stock bouncing a little bit after recent selling. >> it's a 20 billion cap, though. right. thanks, anna, for that. annette is in frankfurt and we've had a number of companies there under focus. bmw and lufthansa, how are we performing, annette? >> the losses are diminishing a bit. bmw had very strong data and bmw, as well, is among the biggest gainer. they essentially have beaten the market expectations across the board in terms of net crop and as well in terms of ibid. and analysts show themselves quite surprised about that strong data set for the first quarter. and as well, looking forward to the full year, bmw is sticking to its guidance and they're saying they want to sell more
4:21 am
than 1.3 million vehicles. >> okay. annette, we'll have to leave it there. annette will be back in frankfurt. stephane is in paris. we'll be focusing on numbers out of societe generale. >> we are looking at the french market, ross. despite stronger than expected numbers from societe generale, that was the first bank to report quarterly earnings in france, revenues of 34%, stronger than expected. the bank confirmed its full year guidance, targeting 3 billion euro net profit for this year. the ceo of the bank believes that the risk of a greek contagion in europe is low. it says so in the next exclusive interview to cnbc. >> the economies are in a very different situation. and you cannot compete with the other countries. so i think there is clear overreaction from that perspective. >> and still in the banking sector, we've got bnp paribas,
4:22 am
the largest french bank, to report tomorrow morning. we are expecting a 5.1% increase in the q1 net profit. also in focus today, lefarge posted stronger than expected numbers for the first quarter of this year, but it's not expecting any major recovery on markets before the second half of this year and the stock is off more than 3% right now. ross, back to you. >> thank you very much, stephane. for more on the wider swiss markets, carolin joins us in zurich. >> swiss com is one of the main gainers up on the smi. a pretty sizable act session of a u.s. software company was announced for more than $1 billion here. but apart from that, we've got similar pictures yesterday. not as big as a sell-off, but a
4:23 am
lot of the financials are trading lower here. now, i want to move your attention to transocean. this is the u.s. offshore drilling company that is now listed and based in switzerland. that company is out with first quarter earnings after the closing bell tonight. any outlook for the industry, any statement concerning that oil explosion, that will be closely watched tonight. transocean is the company that owns the deep water horizon rig that exploded and sank in the gulf of mexico around two weeks ago. we know bp has blamed transocean for the technical malfunction here, but of course, bp will have to bear most of the cleanup costs here. now, it's still not clear what transocean can actually expect in terms of future payments, claims and futures losses here. we know the company is ensured against a loss of the rig in terms of $950 million. the total cost could be a lot higher. fitch estimated that quarterly losses in terms of revenue would
4:24 am
accrue to around $47 million per quarter here for that specific rig. so as it is also the case for bp, the market value in transocean, that has plummeted over the last two weeks. we saw the share price dropping by a third since that regular exploded. ross, let me send it back over to you. >> carolin, thanks very much. still with us, our guest host, kirby daley. kirby, a while back, a couple of days ago, we saw risk aversion piling up and investors putting a lot of money in a save haven. jgb has to benefit. are you surprised? would you be a buyer of jgb? >> no, i couldn't. however, trading floors around the world, especially here in asia, are littered with the bodies of those that have tried to short jgb waiting for that trade. i wouldn't be in that market. right now, japan will be going over a transition period over
4:25 am
the next 12 to 24 months. it sounds like thak is a long time period but it's not. the transition it will be going through is a metamorphosis. that is when japan will not be able to fund itself internally, may have to go to the international markets. we will have a major readjustment of the situation in japan and we will be talking about japan as we talk about greece today in the not too distant future. >> are we seeing a bailout for japan, quickly? we can't afford a bailout for japan. the only thing we would see is a potential default and try to control it as much as we could. >> kirby, thank you very much. we'll leave it there for now. >> begs the question why the japanese will start buying their own debt. we'll talk about that plus talk about the greek aid package. debt contagion is driving the euro to new one-year lows. more to come.
4:26 am
4:27 am
4:28 am
welcome to "worldwide exchange." china ever bank looks to set agriculture bank of china has looked to raise funds in the mainland. >> and in europe, angela merkel tells the parliament their
4:29 am
future depends on the success of the greek bailout. and in the i'd, red ink may flow for a second day after wall street sees the biggest drop in six months. you're watching cnbc's "worldwide exchange" with christine tan, nicole lapin and myself, ross westgate. markets today are a little lower. not quite the fall that we saw yesterday. but european markets are down. compare those markets with the club med and you'll see there is a disconnect and we've got bigger falls in the likes of spain, portugal, and greece. so the composite is down 2%. actually, they rallied! i see that they have rallied back a little bit off their lows. but they are still down a little bit more than we have with the euro zone markets.
4:30 am
when you take a look at the bund markets, you will continue to see spreads against the peripherals. there is a risk appetite trade going on and basically those who are risk averse are piling into bund and gilt and treasuries at the expense of peripheral debt. the ftse cnbc global 300 today is just down at the moment. you can see 20 points, up 44.36. what kind of session have we had in asia, christine? >> one word for you, ross. pretty rough today. bear in mind, japan and korea are closed today for public holidays. shanghai composite, recouping much of the losses in the end to close higher, 0.8%. the hang seng falling more than 2%. risk aversion is at play in hong kong here. we're seeing the same picture in south korea. this particular market, taiwan
4:31 am
also falling rapidly. the australian market, pulling up the chance for you there, 1.the 3% lower. the bombay sen sense down more than 1%. so a pretty rough session here in asia, nicole. >> good morning, christine. we're hours away from the u.s. open and whether or not it's going to be a rough trading session here may hinge on that adp report that comes out at 8:15 in the morning and the consensus is that we gained 20,000 jobs last month. but for right now, at 4:30 in the morning, dow futures are down about 10 below fair value. this, of course, ross, after we saw this major sell-off yesterday. i think it was the worst fall since february of 225 points on the dow. >> yeah. and joining us now, neal mckinnon, still with us, kirby daley.
4:32 am
the greek government has promised comprehensive consolidation. the situation should never be repeated. he talked about financial default would be stability for the system. very strange that he should use those phrases. isn't it? along with the imf and the finish finance minister, third policy mistaker coming to talk about contagion effects. >> it's not a surprise given that national parliament has yet to agree with the eu fiscal package. and i think german parliament heirans will in the nd, i think, give their approval. >> what does it do for market players? he talks about greek default.
4:33 am
he's trying to say, look, we want to avoid it. it's not going to happen. but the mere fact that he mentions it -- >> well, for sure. >> is that just a bad way of talking about it? >> maybe. maybe. i think the financial markets understand that greek debt reinstructed temperaturing is on the cards, which is an implicit default. if spain and portugal are next in the firing line, it's a wherewithal to provide forward for those countries. the answer is no. i think the euro zone debt crisis does rumble on. but i think the end game in all of this is a debt restructuring for the greek government.
4:34 am
>> kirby. >> yeah. in the il, i heard you say they would have to rewrite the rule book. but what is wrong with that? >> well, they probably will. the ecb, for example, has rewritten the rules in terms of the minimum eligibility requirements for greek government bonds. and i think the markets fear that the ecb will have to do the same for all the fiscally challenged economies within the euro zone, which is effect itchly an indirect monetization of debt with consequences further down the road. so yeah, for sure, rules are being rewritten. i think the whole crisis has exposed the design floors in the monetary union and i think it's a very serious situation which is why we're seeing the euro weakening on the currency markets at the moment. >> in the il, do we need
4:35 am
convergence? budget deficit. we need some sort of conversion here. if so, what does that mean for german and french debt? >> well, convergence was the buzz word at the inception of monetary union, as you'll probably remember. but, of course, what's actually happened is die vergence, whether it's in terms of economic growth rates, die vergence in terms of budget and fiscal experience, die vergence in terms of inflation rates. and, you know, leading common taters, economists have understood that there is a serious imbalance within the monetary union between trade surface economies like germany and trade deficit economies like the so-called club med economies. and germany plays an important role in all of this. you know, the up shot could be that we're prepared for stagnation depending on what's happening with the outcome of
4:36 am
this dead crisis. it brings into play the prospect of monetary union in its current format being completely changed. we can't disregard those scenarios, i think. >> neil, this is christine here. we talk about stagflation, default, do you think china will use all of these reasons as an excuse to delay any currency reform? >> well, i think the weakness in the euro is certainly a factor here. i think that china, chinese authorities don't seem to be that keen on any drastic revalue iegz of the currency. i think the best we can hope for is a modest revaluation. and i think that, you know, for china, the economy has been pretty strong. chinese authorities correctly have been implementing measures to try and cool down hot spots in the property market. but i think the underlying picture is still pretty good. global car production is up nearly 60% year on year in the
4:37 am
first quarter. global steel production is at a record high. and i think that any moderation in the chinese economy, whether it's result is modest increases in interest rates, reserve requirements or even a modest revaluation of the currency will bring about much more sustainability economic picture for china, which i think is of a long-term benefit for the global economy. >> speaking of sustainable economic recovery, neal, we're going to switch gears for a second to the united states' economic recovery. because everybody is, of course, focusing in on jobs friday as, really, the linchpins and see whether or not we are going to continue to fall we saw yesterday or turned to the upside. but of course, we're getting the adp report out today. do you think that there is going to be a correlation or is it going to be a precursor to jobs pri? >> certainly, the market will be looking at the adp numbers today for what happens to the nonfarm payroll figures for friday. i guess the underlying picture
4:38 am
is that there is some tentative evidence of fresh hirings, certainly hours worked have the low in the u.s. economy, productivity gains have been pretty strong. there is an incentive for employers to hire people. whether it's enough to make any inroads, currently 9.7%, remains to be seen. but i think the underlying jobs picture is slowly but surely improving and hopefully the u.s. economy will continue to grow above trend rates, which is a very good chance of bringing the unemployment rate down to much more acceptable levels. >> neil, thank you very much for your insight. good talking to you, neal mckinnen and derby daley, our guest host, will continue to stay with us. coming up next, we'll turn our focus to chinese banks. they've been scrambling to raise capital. we're looking at more than $60 billion in ipo plans sxp will
4:39 am
investor appetite be equally massive? here is a quick look at how the chinese yuan is trading at the moment.
4:40 am
4:41 am
4:42 am
welcome back to "worldwide exchange." it's 443 in hong kong. winds blowing south, 19 kilometers per hour. humidity, 17%. chinese banks are in focus. they're hoping to collect $60 billion from investors there after banks in the mainland doled out a record $1.4 trillion in new loans last year. and the urgency is hard to ignore. in recent months, we've seen lenders rushing to raise funds mrp they succeed? joining us to talk more about it, paul ramscott and kirby daley is still with us. paul, let me start with you. china bank agriculture is rushing to get to the market here. will there be enough appetite to
4:43 am
soak up on these new issues? >> is it waning? we are dealing win investors who are still out there looking for investment and we're still actively investing into china. i would not totally disagree with you, but i would say that the risk -- the risk appetite is slightly fading, but i don't think it's waning altogether. so i think i stand a pretty good chance of raising this capital. >> we've got two things going on here. we've got liquidity tightening. we have a curb on property lending. all this you don't think is going to impact investor appetite at all? surely something that to give at the end of the day. >> sure. but look, this has happened before. when they start to curve in the lending on property, then you're going to see a massive flood of people going back into the equities market. so we feel that this is just what is normal and part of the
4:44 am
normal monetization process in china and we believe that we're gearing up for another bull run on the shanghai markets. and we're still investing there because we believe over the next few months and towards the end of the year, we could see significant movements on the asia market in particular and it's not unusual to get swings to the upside of up to 15%. so let's see. >> hey, paul, on that note, it sounds like you're looking for very much a liquidity and sentiment driven rally in shanghai. i don't mean to put words in your mouth. in that case, talking about the banks in particular, there's increasing concern about npls. we know they can put that issue off for a long time. but are these banks really a value inspect should investors look long-term or short-term for the play that you're talking about this year? >> i think we should look medium to lung term the. we believe that there's still some significant way to go. it wouldn't surprise me if we
4:45 am
beat the previous record of over 6,000. as i mentioned just there, i think we're gearing up for a significant amount of cash to pile into the asian market. i would say the course of this year. it could happen quickly. it could take some time. but i think definitely, we could see 10%, 15% to the upside. that's not unusual to see those types of swings when we see these curbs on property we see a significant in-flow of cash going into the asian markets. >> kirby, what do you make of that, kirby, your risk averse feeling, kirby? >> well, i'll tell you, ross, china sort of exist necessary a vacuum of world of its own when you talk about the share markets. there's not a lot of transparency. it is liquidity driven. am i a buyer of that? i'm not. i'm more risk averse. i'm playing the stimulus situation in china, but longer term, fundamentally, i think we
4:46 am
have major issues to deal with. that will be reflected in the share prices. probably 2011 is the year we start to see that. >> what are some of those major issues, kirby? >> as i was alluding to in the question to paul, the main one is npls. of course, the measures that the government takes to slow growth. but the two major issues are npls and the bursting, the inevitable bursting for the property bubble. whether it's massive bubble or a smaller bubble, it is a bubble and all bubbles will burst. that will have tremendous detrimental effects to the economy if they don't get it under control auto sooner or later. and the cost of repairing that will be economic and financial in nature. so there's no way to avoid it. >> paul, let me jump in. christine here. you seem terribly bullish. are you ruling out a bursting of the property bubble that kirby is alluding to? >> just to go back to something
4:47 am
derby said there, the npl, the government has enough cash to wipe those under the carpet and forget about those in regards to the property bubbles. the question is, are we in one? the property prices in china over the last year or so are up about 20%, so that's not a huge jump. so i'd have to disagree slightly with that. but i think, you know win do trust in the chinese officials to curve the lending and actually get this under control. >> a feisty discussion there, gentlemen. thank you very much for that. paul, thank you very much for your time. paul ramscott and kirby, thank you very much for your thoughts. we'll come back to you. >> just a little bit. let's go to see how the other markets in asia are performing with adam bakhtiar. and you're looking at what, banks -- >> there's a lot of volatility in these markets, folks. the th ai ex was one of the
4:48 am
steeper falls today. we had the nasdaq and the philadelphia semi conductor index off by 4.5% in the u.s. market's previous day. that did drag that index lower. meanwhile, as i was alluding to earlier, this market drops almost 2% this morning and then we saw a dramatic recovery in the benchmark index, largely because we had investors swooping in badder stocks because of a debate we've been having here on "worldwide exchange" with the property space. we did see recovery in the chinese a shares in terms of the banks and property stocks. but what was really interesting, take a look at the h shares of the chinese listed banks and also some of the property developers that do business in china. not all investors are convinced that maybe they overreacted yesterday. we did see hefty falls across the board there. finally, one stop that continued to get punished in today's trade, take a look at esbury
4:49 am
holdings which is a retailer listed in hong kong. of course, we are still concerned about the fallout of the greek debt problem and whether that will be contagious across some of the other economies in europe. and what would it mean for overall growth in the european economies? with the euro losing more ground, it does curtail profits to some degree, not to mention, christine, what might happen further down the line with the euro zone economies and how that might affect earnings and clearly the share price is telling you something. >> so negative sentiment there. what's happening with the aussie banks? they're down today. >> we had great results out from west bank. corporate profits were up 30% in the first half of this fiscal year, largely because they had a wh 45% reduction in nonprovision loans for that. but the bank did flag it will be a second half challenge partly
4:50 am
because they rely on warehouse funding heavily. they could see that go up. this could affect the net interest margin. we saw the bank slam dunk heavily in the australian market. they have higher loan to deposit ratios and they rely on the offshore markets to fund those gaps. >> i see contagion happening. adam, thank you very much. ream na tendulkar joins us live from mumbai to the india business report. reema. >> thank you for that. if you have to find a silver lining today, it's perhaps that we have some support around the 5100 mark for the nifty. the still fairing at nearly 1% decline, but we have managed to recover nearly 50 points on the nifty. the sensex has dipped below the 1,000 mark. and you are seeing pressure gain into the entire metals bag, real estate, but on the flip side,
4:51 am
the rupee weakness has provided some interest to the buying pack. the broader markets have not performed too well in trade. we have the midcap index, small cap index, both of them showing some deep cuts. so the advanced decline ratio stands about 2 to 1. until then, trolls have been quite high. all this weakness has come to a reasonably high volume. a couple of the metal counters are looking quite weak. with that, i'll hand it back to you. >> ream na tendulkar, live from mumbai, thank you. reema. kirby, two commodities you pointed to were buy gold and buy commodities. is that still true? and how would you select these commodities? >> yeah. actually, i need to correct that quickly. as we move into risk aversion, you want want the safe haven of the dollar and the treasury.
4:52 am
i'm taking the yen out of my usual investments. interestingly, gold isn't falling as much as some other commodities in this. so i would be looking for a place to get into equities longerer term as we go around the world and are led to asset price inflation. in the risk aversion, however, you'll see falls in those prices and you don't want to necessarily be enjoying that if you can sit back and wait for the time to get in. >> kirby, why are the japanese going to stop buying japanese bonds and what are they going to do with savings, instead? >> that's the point. they don't have as much money as they've had in the past. the savings rate is dropping at alarming rates, coupled with the demographics of the country and the worsening fiscal situation. the increasing need for the government to finance it
4:53 am
locally, domestically. simply put, they're not going to have the money to keep buying them and that's going to be a problem. the government is not arresting the issue. they're not turning around the fiscal situation. they're not even addressing the issues. and with an upcoming election, they're likely to exacerbate those issues going forward, trying to spend their way into keeping their seats. >> what do us, kirby? he's make me very nervous about japan. >> i'm sorry about that. >> thank you for your thoughts today. kirby daley, senior strategist, new edge group. nicole. >> we don't want nicole nervous. meanwhile, let's get some big stories we're following for you around the world today. a giant funnel is near completion in louisiana and is expected to be on place in thursday to help the rate of oil leaking. the giant iron funnel weighs 98 tons and will be lowered to a depth of 1.5 kilometers.
4:54 am
the project is unprecedented. it is also costing bp, along with the cleanup, $6 million a day with shares falling by 15% since the oil rig exploded on april 20th. luckily, the weather has meant only sheens of oil haas has reached the u.s. coastline so far. something totally different, the appetite for fine art is still very high. a pa casio painting not seen in public for 50 years sold for a record $106 million at chistie's last night. the grief green leaves and bust was bought by a anonymous buyer. some more sculptures got strong prices out. a neuro bust sold for $55 million. this edward munch painting, f
4:55 am
fertili fertility, went unsold. despite that, the goal of $50 million was met. christine, wow, that makes you happ happy. >> small change, a couple million here and there. small change, right, ross? >> yeah, yeah. coming up on "worldwide exchange," are we looking at a traditional case in sell in may and go away? we'll discuss it after this break. >> the risk aversion is to the benefit of the treasury market at the time being.
4:56 am
4:57 am
4:58 am
welcome to "worldwide exchange." the headlines making news today, out of the united states, the tide of red ink may flow for a second day after wall street sees the biggest route in three months. >> mean while, european equity markets are lower as angela merkel tells her parliament that our future depends on the best of the greek bailout plan. >> and here in asia, bourses plunge on risk aversion, triggered by fears the europe yap debt crisis will spread beyond greece.
4:59 am
>> we just got euro zone february sales. the revision is flat on the month, minus 0.1% on the year. the march retail sales forecast is up 0.3% on the month, so very disappointing, indeed. and the february revision was minus 0.2% on the month, minus 0.2% on the year. so retail sales in the euro zone, basically suggesting consumers are cautious amid this slow economic recovery. they'll be looking at what the bailout plan potentially means for them, as well. euro/dollar is firmly below 1.30. 1.2970. it's a fresh year low. european stock markets two hours into the trading day are down.
5:00 am
and that includes the club med countries, as well. there was a sharp die vergence between these markets and the main ones i showed you earlier. but again, they've closed up the ground, nicole. >> and ross, a very good morning to you. it's 5:00 in the morning. in the united states, we are, of course, hours away from the open of u.s. markets. but we are likely to open lower now here, as well. this is after the vix went up 18%. at one point, it was 27%. actually, we flipped around a little bit just in the last half hour or so. dow futures are up, 10 above fair value right now. but of course, we're looking ahead to the adp report that comes out at 8:15 in the morning. not only is it a precursors to jobs friday, but we're expecting that to set the tone for the day of trading here in the united states. and that is something we're
5:01 am
going to be watching here in asia, as well, that adp report. meantime, here in asia, this is how the markets are looking. we have japan and korea and thailand closed for the respective holidays. elsewhere, risk aversion is taking a lead. the shanghai composite recouping losses to close higher, 0.8%. the hang seng closing down more than 2% at this stage. elsewhere in australia, this particular market is trading lower, down more than 1%. the banks getting hammered. the bombay sensex up 0.8%. now, i want to quickly pull out the jakarta market in indonesia. we are watching this market get hit today. why? because of a change n le form. it has tendered the finance minister's resignation after being tapped to become a manager at the world bank.
5:02 am
we have japan closed today for a public holiday, so gentleman japanese trade, yuan trade. dollar/yen, 94.63. euro/dollar continues to hover at one-year lows, 1.2977. the euro is slightly picking up right now, sterling/dollar by 1.5159. euro/sterling, 0.8558. a lot could change, ross, depending on the adp report. >> we'll get a view ahead of that and what is going on with europe. nick parsons, thanks for joining us. a great deal of risk aversion yesterday. the stock markets have bounced off their lows in europe. what's going on here? is this greek medicine not working or are we still dealing with the technical ramifications of the debt downgrade of greece to junk and banks and investors having to get rid of it as a result? >> i think when investors look at the situation, they say there are three ways in which you could be derailed.
5:03 am
one of them is by the german government who so far appears to have given it their blessing. the other one is by the ecb, who have thus far given it their blessing by relaxing the rules and the general strike has been called in greece. if greece becomes literally ungovernable, despite the majority position of the current government, if the people are simply not willing to accept the austerity package that's there, then the conditionality that the eu and imf rightly insists upon cannot be met and, therefore, the bailout page will not go ahead. so i think today is a big test and markets are rightfully worried about this. because really, the fate of this is not in the hands of the european parliament or the imf, but it's -- >> but have we not priced in, whichever way you look at it, some kind of managed default, a
5:04 am
haircut, whatever you might want to call it? actually, isn't that what we've priced in? >> yeah, we have priced in and managed default. if you look atwo-year bonds yeeling 25%, if we're talking about a 25% haircut, which is roughly the magnitude that the imf has traditionally insisted upon then -- >> what is the risk that we haven't priced in? >> the risk that we haven't priced in is not that greek restructures its debt and defaults on 25% of it, but it simply can't support the other 75% because the country becomes ungovern blg because there are no taxes to collect and grease descends into anarchy. so that really is the risk. given that today is the general strike day in greece, we have to be hopeful that those risks move not to materialize. but i think they're understandable, at least, ae we start trading this morning. >> so, then, nick, why would
5:05 am
anybody touch the euro these days? >> well, to start with, it's down 14% from its high in january. so we're starting to look at some valuation levels where it becomes quite interesting. and the other point to remember is that if the weaker members -- and i'm using the plural. it's not just about greece. but if we look at europe and what's around them and say there is a possibility that one weak country might lead which might lead to domino effects elsewhere, you would be left with a euro dominated by strong economic countries. and if you then look at the two largest of those country webs that's to say, for instance, france and germany, here they are with export led growth with world beating export industries that have just been handed a 15% deval ewation. what i'm not trying to do here is call the bottom or suggest in any way that we should be minimizing the risks and the
5:06 am
problems, but i feel near term that there's a possibility, at least, for some tactical relief rally because i think the market is a little overpes mittic now. i'm not suggesting that ultimately this is a alternative were certainty to play out well, but short-term, we could be on the cusp of a technical rally here. >> how much of euro's problems, the debt situation over greece is benefiting the u.s. treasury? >> clearly, i think it is. we have to remember that the greece greek deficit to gdp ratio is around 14% on current calculations. the u.s. is running double digits. and double digit debt situation would be unlikely to be sustained, were it not for fears of global asset market declines. it's that in particular which is keeping treasuries where they are in the u.s. and the gilt yield where they are in the uk. so the two biggest major country
5:07 am
debtors outside these peripheral mediterranean nations are still the united states and the united kingdom and their two bond markets have seen yields fall by up to 20 basis points over the last two or three weeks. so i think we have to say that it is problems in greece and only those fears about a widening sell-off in asset markets which is keeping yields low in the developed world. >> nick, you're sticking around. plenty more to come from you. some of the other stories that we're following right now, it's less than 24 hours to go before the uk goes to the ballot box. a hang parliament is still the most likely outcome. the opposition conservative party has 35% of the vote. gordon brown leaders labor up 30% and democrats, dropping back down to 24%. >> elsewhere, the british issue of prudential has delayed its $2
5:08 am
billion rights issue as it ierps out issues with the british regulator. prudential says it didn't expect the delay to affect the overall timing for the transaction and it still anticipates the complete will occur during the third quarter, nicole. >> progress is being made, ross, on progress reform. the deal is expected to include proposing dropping that $50 billion fund to help cover the costs of dismantling the companies. another contentious plan to force banks out of the swap trading business appears to be losing steam, as well, and maybe dropped from the bill altogether. senate majority leader harry reid hopes the senate will finish that bill next week. the financial inquiry commission is now holding their hearing.
5:09 am
they're going to do it at 9:00 in the morning with testimony from allen kain and in some prepared remarks, he also says that management did all it could to keep the firm afloat before it fell victim to an unstoppable run on the bank, christine. >> nicole, aus traltan banks are in focus, particularly west pac bank. help by lower charge force bat debts. but the bank, the country's second biggest home lender, warned of rising interest rates and higher costs due largely to europe's debt crisis. that together with disappointment over a lower net interest margin and news it was giving out dividends sent off for market expectations. and westpac bank shares trading down 4.5% today. nicole. >> and still much more to come on "worldwide exchange."
5:10 am
malani trump has teamed up with qvc with her new venture in jewelry. she says, though, she's trying to come up with a more manageable market. ♪ well, look who's here. it's ellen. hey, mayor white. how you doing? great. come on in. would you like to see our new police department? yeah, all right. this way. and here it is. completely networked. so, anything happening, suz? she's all good. oh, my gosh. is that my car? [ whirring ] [ female announcer ] the new community.
5:11 am
see it. live it. share it. on the human network. cisco.
5:12 am
5:13 am
on cnbc.com today, german rescuers discussed the greek bailout plan. investors ask if the german public and the european union have the stomach for a rescue package for portugal, spain, ireland and even for italy. the correction in stock markets has already started. the head of research at bnp paribas fortis global markets tells cnbc on wednesday, he believes the technical picture looks plain horrible with nasty die vergences over all time frames. however, in other strategies, some in the united states believe the real construction will start in june. take your pick from all that at cnbc.com.
5:14 am
welcome back to "worldwide exchange." the last time we checked, gold has a safe haven status. $1.69 lower for goal. $1,171 an ounce. nymex light swede crude, $82.52 a barrel. brent is trading around the ranges of $85.66. pretty flat, ross. >> yeah. meanwhile, global equity markets ahead of the u.s. open a little later have bounced off their lows in europe. we're down just 0.25% for the ftse 100. less than that for the xetra dax and the cac 40. off the lows. >> that's the good news, yep, off the lows. it's been worse today and we've been down lower. prude prudential, as you say, ross, is very much in focus. they delayed the documentation regard thrg rights issues. there are undissolved issues, it seems, with regulators. peru tental saying they're in discussions with the fsa.
5:15 am
share holder, though, have not been in favor of this. a number of shareholders have been calling instead for a break-up of sale on the part of the business. this comes just says before -- one day before the election in the uk and if the conservative party gain a majority or a great deal of influence, at least, in the coleg, then we could see the end of the road for the fsa. so i wonder if there are any political elements here. but essentially that is the big story we're watching in london today. now over to frankfurt to annette. >> it's pretty much the same picture here. we are off the lows, but still trading in negative territory. above all, it is due to
5:16 am
corporate releases, which are prescheduled. alliance came out with preliminary figures for their first quarter and they were beating expectations with an operating profit of 1.7 billion euros for the first quarter and a very strength in the life and health insurance and as well in the asset management business. but certain kind of weakness in the property business due to heavy winter storms and the earthquake in chile. nevertheless, the figures are well received from the market. bmw, as well, came out with figures a lot better than expected, according to analysts. and as well, the guidance is looking in reach as there are some very favorable demand trends for bmw. above all, because they introduced the new model of their five series, which is very much in demand with corporate cars. that's all from here at the moment. we're heading over to paris. stephane. >> annette, it's all eyes for the banking sector after societe
5:17 am
generale has stronger than expected numbers for the first quarter. net profit is up 1.6 billion euros. the bank confirmed its guidance for the full year and the ceo, frederick udia, believed that the risk of a great contagion in europe is low. he gave an sclooes exclusive interview to cnbc. >> the economies are in completely different situations. i think there is clearly overreaction on that perspective. >> bnp paribas is due to report tomorrow morning. the forecast is for a 5% increase for the net profit for the first quarter. the stock is off nearly 1%. also trading lower, lefarge, it's the biggest decliner today in france. the company beat spicketations for the first quarter of this year, but it's not expecting any recovery in the seven sectors
5:18 am
before the second half of this year. the company believes that the volume, the demand in volumes will increase by 5% this year. the stock is off more than 4%. it's time now to have a look at the asian markets with adam in singapore. >> thank you very much, stephane. it was a fairly negative session in the asian trading session here today. having said that, we did see a huge amount of volatility, particularly in shanghai with that market recovered to being down by close to 2%. we had bargain hunting going on in the banking stocks and the property stocks. that had been hit hard the previous day on concerns about tightening, both in those two sectors. but it was a bit down the middle in terms of reaction. we take a look at the mainland banks listed in hong kong. and one of the other biggest losers on the hang seng is
5:19 am
esten. we did see weakness in the euro. that's a problem for e dd sprit. the real problem is what is going to happen on the economy if the notes continue to spread back to greece? >> we had pmi today relatively good from a services sector, revised up. still to come, chancellor angela merkel is dchding the bailout today of greece, but says stricter regulations are needed. meanwhile, it's another national strike in greece. we'll focus very much on a that, as well.
5:20 am
5:21 am
5:22 am
welcome back to "worldwide exchange." it is 5:23 on the east coast of the united states. we are expecting markets to open higher now. we have turned around after fueling some of that momentum from europe in the last hour or so. dow futures are looking like they are going to open higher now, about 17 above fair value. we have to get that board up quickly. nasdaq futures are, though,
5:23 am
slightly lower and s&p 500 futures are a little bit higher. so ross, a little bit of a mixed picture. we're still really early here in the i'd, but this is after the nasdaq was down 3%, the dow was down 2% yesterday and we ended withen an 18% on the vix after hitting 27% at some point. >> we have rallied off the low, but not by much at the moment. german chancellor angela merkel says the euro zone's future depends on the success of it. with europe standing at a crossroads, germany must live up to its responsibility and will help prevent damage to the euro zone in the future. sylvia joins us now from berlin. nick parsons is with us in the studio. sylvia, mr. vaber says financial help to greece is a leap of
5:24 am
faith. interesting choice of words. >> yes. we've had a very strong speech from angela merkel, this is about europe, this is about germany and living up to responsibilities. mr. vaber is speaking to parliament right now saying this aid is problematic, it's a leap of faith, but with all things considered, we have to do this in the interest in the stability of the euro land as a whole because there are clear dangers of contagions. so everybody is saying yes, but. but the yes is something that will have to come up front. or is it? we faired, also, the leaders of the opposition already speaking in parliament. the debate is still going on as we speak. and they clearly said, look, what you've told us here now has not convinced us. we don't want to be putting europe at a risk, but we need
5:25 am
something from you. we need, for example, a financial transaction tax. we need a european rating agency. we need to have certain financial derivatives, hazardous financial desievives simply banned and banned outright. and we caught up with one of the leaders of the opposition, andrea nallis, and she indeed put in doubt whether her party will vote yes on friday, unless merkel puts more on the table. here is what she says. >> i think there will be maybe no yes from the social democratic party on friday. >> so you still think to make this clear that you could vote for no if angela merkel doesn't put more offers on the -- yes quarterback for sure. after this speech from bang la merkel today we were less convinced than we were yesterday. >> finally, what do you want from her to still give us a yes on friday? >> we have to regulate the
5:26 am
finance markets and germany not only also international regulation is necessary. >> okay. well, that's obviously the opposition suggesting they still may vote against this package. meanwhile, sil, we've got ongoing strikes in greece, which we're showing pictures of. and just a leap of faith, do you think, relates to the faith that the greeks will be able to deliver the austerity package? >> there ask a clear danger in there that the greeks will not deliver or there's a risk on the table that it may not be enough. we were talking about $110 now and there's $22 billion that it has precaughts. earlier on, it was said that we know about the hippo real
5:27 am
estate. i think angela merkel will have to go to brussels and really put some demands of the germans on the table and that is things like a european rating agency. that is things like chapter 11 for euro zone countries and there will be some tough choice toes make for europe in the next month to come. >> sylvia, it's nick parsons. i wonder if you could remind us what the parliamentary risk is looking like in gerchlny there and what probability do you think ultimately there will be, what likelihood that these measures will pass? how are you reading it here inspect. >> well, let's put it this way. first of all, angela merkel and her coalition have a comfortable majority in parliament. they have a majority in the upper house, as well. so they can pass this through even if the whole opposition votes against it. but i think she needs the whole opposition on board. she would end up with a bit of
5:28 am
egg on her face if the open is it sigz voted against this. angela merkel can come out of this quite bruised. >> sylvia, thank you very much indeed. nick is going so stick around for a while, as well. cheap money may have helped bring us out of innation, but it's leshging just around the corner.
5:29 am
5:30 am
welcome to "worldwide exchange." the headlines making news today out of the united states, the tide of red ink may flow for a second straight day after wall street sees its biggest drought in three months. >> here in europe, angela merkel tells the parliament our future depends on the success of the greek bailout plan. and here in asia, stocks fall on fears the european crisis will spread beyond greece. >> great to have you with us here on "worldwide exchange." it's 5:30 in the morning. on wall street. welcome to the start of your global trading day. yesterday we saw a major
5:31 am
sell-off with the dow down about 2%. with the nasdaq down about 3% now. we have turned around in the last hour and a half or so feeling the momentum from europe. dow futures run now about 23 above fair value. nasdaq futures are slightly lower, still, and s&p 500 futures are up slightly right now. ross, of course, we are looking ahead in about three hours from now for that adp report coming out at 8:15 in the morning. of course, the private sector report, we're expecting gains there as a precursors to big jobs friday. we're expecting a couple of earnings here, as well. how are you guys fairing a couple hours into trading? >> we are down after being down an hour or so ago. slim gains now for the german and french markets. basic resources, energy and insurance are the best performing sectors here. that is part of the peripheral markets there. there's been a sharp die vergence in performance. but as we head towards the u.s.
5:32 am
open, christine, looking a little better if you're long in the market. >> well, here in asia, a pretty rough session, ross. trade is a little bit thin. much of the focus was on greater china. we had the shanghai market falling as much as 2% earlier on. take a look at the close. closing higher, 0.8%. the hang seng is down more than 2%. the risk aversion is really at play in the hong kong market. elsewhere in australia, the banks came under pressure. the euro zone debt crisis increasing and hurting the net interest margin. the bombay sensex off 0.5%. as far as dollar rates are concerned, japan is closed today, so the yen trade a little bit thin today. dollar/yen hovering at 94.68. euro recovering a little bit against the dollar right now, 1.2981. seeing a pick up there. sterling/dollar, 1.5148.
5:33 am
euro/sterling, 0.8571. >> joining us now is j.j. burns, president of j.j. burns and company. and still with us, nick parsons. you've been following the show as we've been focusing in on the greek situation. is that just an excuse to sell in play and go away? >> we have certainly, as a firm, been taking profits. with you i think it goes beyond the greek potential as a contagion. it really rests more on what's happening in global markets. we find there is a significant am of clients who are very yield hungry. so with the impending problem of greece, it exacerbates the issue that people want to buy credit even more. they feel interest rates potentially could drop a bit more. >> we were just talking to nick in the last segment. he was saying this can be about
5:34 am
for the euro. would you buy that or is this still going to benefit the dollar significantly? is that still the play? >> yeah. i think that there's much more of a flight to quality towards treasuries. and the credit markets of the united states. i would not be a buyer of the euro. however, i do agree with nick's statement that that could ultimately be left over in the euro zone could be really great denominations of countries with good sovereign debt issues and a positive euro going forward. i think we're due for some type of bounce here from where the euro has gone to. >> i was interested to hearing about your clients searching for yeel. is 14% two-year in greece not yet attracted to them? is it the sovereign space or more in the corporate space that they're doing that? >> easy it much more in the corporate states.
5:35 am
especially in the states, we feel -- i think they feel that the worst of the financial armageddon is behind us. although i'm not as positive as that statement may be. there are really good solid corporate debt issues that are 8% or 9% or 10% rake that are considered high yield or junk bonds that you can probably sit back and collect a nice coupon and watch things play out. also, i think that we're still in this deflationary scenario. and i think this deflationary scenario is going to continue to play out. but ultimately, it's going to lead us to a set up for the potential of inflation going forward. >> yeah. what's the timing on that, though? deflation for the moment may possibly lead to an uptick in prices, but is that a story for the third quarter of this year or is it more the second half of 2011? >> i think we're looking more towards 2011. i think we're looking much more
5:36 am
towards the second half of 2011. and i think that we're going to find, especially with the contagion that's happening in greece which could exacerbate the other countries -- although i don't think the likelihood is there. i say and itly's debt and the spreads here, and 1% to 4%. if you try to crossover,ite been relatively contained. so i think you're still getting some pretty good yield not only in some of the sovereign debt nations, which look to be healthy, but really getting good yields on bonds in the high yield area. i think that's where a lot of investors are looking to play the game in. >> is it also a buy on dip? >> is it a buy on risks, did you say? >> buy on dip w, j.j. >> yes. we have been buying high yield on dips. but keep in mind that we have
5:37 am
been very percentagewise smaller allocations towards small cap, midcaps and large caps. as a firm, we're only about 35% to 38% long on the stock side. so most of our returns have happened in 2009 as well as 2010 in the debt markets. >> j.j., stick around. we'll come back to you in a few moments. search for yield, you cannot pick up a good deal of venezuelan debt. they all earn dollars. what about the high yield in commodities at this stage? >> i think they've proved resilience in the course of this year over the sell-offs that we've had. we're concerned about the weakness that we saw in the australian dollar last night because that was a standout. previously, the aussie to recall has proved more resilient than one might have expected.. i think there are nerves showing
5:38 am
on the part of investors. we have one group which we call the ninja currencies. that is to say india and non-japan/asia. and we have the other peripheral asset currencies. now, what we saw yesterday was a big sell-off in the peripheral countries, which suggests ininvestors are taking money off the table. but what we did observe, quite strongly, was that other group managed to outperform the u.s. dollar as a blog. and it's that group that we like and we think the new world against the old world will be a trade that we would look throughout the rest of this world. >> okay. i like that, nick. thanks for that. good to see you, nick parsons, head of strategy at national australia bank. up next on the show, a new
5:39 am
collection of watches and jewelry to add luxury to your leigh. the model and entrepreneur joins us live on the set, coming up.
5:40 am
5:41 am
5:42 am
welcome back to cnbc's "worldwide exchange." mastercard says u.s. consumers opened their wallets in april, bought more electronics, major appliances and lux goods. now shoppers have a new line of luxury items to choose from. malani joins us live from the studio, beautiful, bright and early this morning. when people think valani, people don't necessarily think low in. why did you want to focus on affordable pieces? >> well, i wanted to reach women across the country and offer them affordable luxury jewelry. to be affordable, it's everything under $200. and why not spoil yourself and buy yourself jewelry and have fun with it? i designed three collections.
5:43 am
they are new york, paris. the new york collection is more for the business office and palm beach delivers more sporty, when you're golfing and going on the beach and things with your child. and then the paris collection is a little bit more stones and more glamour so you could wear it to any of the outfits that you want. >> and you also have a replica of your own wedding ring. >> that's right. >> people should buy that, of course. you have replicas of a lot of your pieces, as well. >> i got inspired by my own jewelry box, my own pieces, as well as three places that i live, new york, paris and palm beach. >> how about your husband, is he driving this? >> no. he's busy with his own stuff. my son is now in school.
5:44 am
it is really exciting to see the samples and the collection coming out. but you know, i just told him that i'm very excited to work with the designs and he was very supportive. i said to me, go ahead and, you know, i know you will do very well. you have a great ideas and great design sense and here is the collection. >> great design sense because people don't realize that you also studied architecture in school. so you are the thought behind this. this is not the donald show, this is the melania show. >> correct. i have involved in everything from a to z, from design, meeting with the design team, what is in the materials, so it's really completely behind the collection. it's very dear to my heart. it comes from me. and i would wear every piece. i'm wearing, for example, earrings. i can tell. but this one is real.
5:45 am
>> yes. so -- >> christine has a question all the way from asia. >> hey, melania. i'm wondering whether you're planning to sell any of your checks here in asia. >> well, we are in talks for the next collection, but i don't know yet. everything is possible. i would love to. i love asia. it's a great place. so maybe in the future. we hope so. >> and look at these. you sold out recently. you're selling on qvc. why did you decide on qvc? >> it's the best of the best, what they do. and it's outreach to women across the country and men, as well. they could tune in and buy the piece for women. mother's day is coming. so they could buy for their mom, for their wife, for the mommy of their baby. and it's really a great choice to tune in and just to buy it and see what they're really
5:46 am
like. because you could find many pieces. i design for women that they have a role as i do, being a mom, being a wife, being a daughter, sister. so i could wear many pieces to the day. and you could wear one piece from morning through the night. >> ross, did you hear that? for mem men, too. get your jaw off the floor. what do you think, would you wear one of these? >> no. i don't even -- i haven't got any jewelry on, let alone a wedding ring. so -- >> it's a great watch for a man and a woman could wear. it's unionny sex and you could wear it, as well, or buy it for the wife. >> i might buy it for us misses. i might fit it into my pocket. >> very good, melania trump, always nice to see you. this is your first time here? >> this is the first time. i did some other shows, but this is the first time --
5:47 am
>> and you're now a entrepreneur! excellent to have you with us. as always, very beautiful in person. we have much more on "worldwide exchange" to come as the west of the men here take their jaws off the floor. they are looking ahead to the adp report coming up at 5915 this morning. we have a preview on what to expect for the rest of the day.
5:48 am
5:49 am
not long to go on "worldwide exchange." joe is with us to tell us what is coming up. >> "morning joe" partnership even like the way you say that, ross. "morning joe." >> it's a different program, that one, right? >> it is a different program. they think they compete with us. anyway, the squawk team is back. becky and carl, they're standing
5:50 am
right here, return just in time to talk about yesterday's sell-off. their absence probably didn't cause it, but it certainly didn't help and it didn't make it any easier on people yesterday. there were worries about greece and the ongoing debt crisis that sent a shock wave through the global markets. everybody owes everybody money over there. i think, ross, even you owe or they owe you or you're all interconnected and there's euros and there's a mess and we bramer for what happens yesterday. we have a full time open market watchers. >> well, the uk -- >> but we put more money net into the eu than we've taken out. that's a fact. >> right. well, it's a mess. socialism land, finally some of the chickens are coming home to
5:51 am
roost, as it were. but we're going to try to put it all in perspective from stocks to bonds, currencies in oil saying we have two key reports when the labor markets will be released. we've got the adp report at 8:15. we'll have those numbers and the instant analysis. and then the crisis on the coast, we're going to have a live report on the efforts to stop the oil spill. also, louisiana senator mary landreau will tell us about the early impact on her state sxp and pulte is checking into earnings central. "squawk box" will com come right at the top of the hour. if you see a bad car wreck, if it's an accident w you don't stop driving. becky is the person i know with a windmill on the back of her car. >> is carl putting a solar panel on?
5:52 am
is that -- >> carl is working on that, i'd say. >> vegetable oil. >> vegetable oil. that's tmi. we don't need to know much about your personal life. >> looking forward to it. good to have you back. thanks, joe. let's bring. >> j.j. burns for a final thought on the program. we're talking about retail, we're talking about spending. you say you're concerned about people talking too much. do we need spending to get us through this recovery process? >> we do, but this recovery is only as good as how much stimulus that the government is giving the system. and, you know, the hope that we have here is that the stimulus ignites the consumer, ignites more jobs and we've jump started ourselves. we don't believe that is really quite happening. i'm just full of good news today, aren't he i? but you know, it's important that when you look at the data, nicole, it's clear that consumers are spending but they're spending at the cost of
5:53 am
their personal savings. so as they spend, which is great for the economy, the cost of it longer run is a personal savings. we're not getting the organic growth and salary, nor much in the jobs -- the way jobs are moving along and hopefully igniting in this country. many jobs actually have been lost and they probably won't be replaced. so it's important to know that going forward and at best we have a modest recovery. with what is happening globally, it's likely to be a jagd recovery at best. >> j.j. burns, we're going to have to looed leave it there, we're out of time. quickly, let's bring up the futures board. we saw a turn around in the last three hours. that's et, that will do it for the program. i'm nicole lapin in the i'd. >> and i'm ross westgate in
5:54 am
europe. >> and here in asia, i'm christine tan. thanks for your time on "worldwide exchange."
5:55 am
5:56 am
5:57 am
good morning. stocks suffer their worst decline in months. european debt fears spreading throughout the markets during tuesday's trading. volatility spiking more than 20%. this morning, though, european markets are showing signs of a bounceback. the imf chief now sees a risk of greek debt problems spreading to other euro zone countries while the international airport shuts down in athens due to a strike by protesting workers. are we in the midst of another or the next global crisis? and teams of oil spill workers helped by some good weather, thankfully, as they
5:58 am
continue to fight to contain the huge and still growing oil slick as "squawk box" begins right now. good morning, everybody. welcome to "squawk box" here on cnbc. it is cinco demay crow, so happy 5th of may, everybody. we're going to start off with a look at the futures today. five of the days have been triple digits swings. this morning, futures are indicated up higher. but obviously, it has been a heck of a ride. >> yeah. markets off their lows following yesterday's big sell-off. here are more of the notable numbers from tuesday's trading. the vix is often considered the best gauge of fear in the marketplace spiked 20% to about
5:59 am
24. here is how the vix has been moving over the last week. on the docket for the markets today, the boe holds a monetary policy meeting, weekly mortgage apps will give us a glimpse how the housing market is fairing. looking ahead to friday's numbers, challenging at 7:30 eastern and the adp report will be out at 8:15 eastern time. hard to say how much -- jobs are going to get a lot of attention, but with greece, on the oil slick, with times square, there's so much going on. >> today is the day that a million greek workers are expected to take to the streets for a strike. you've got germany facing two parliamentary votes. >> uk elections tomorrow. >> uk elections tomorrow. sunday, there is a regional vote in germ fee. there's a lot of things that are rolling around that are going to keep the focus on whether or not that package goes through. >> you know who i spoke to at home yesterday. >> at your home? >> at my house. >> who?

227 Views

info Stream Only

Uploaded by TV Archive on