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tv   Worldwide Exchange  CNBC  April 10, 2012 4:00am-6:00am EDT

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headlines from around the globe, post holiday gloom in european stocks. equities trade firmly in to the red as investors still shift out of risky assets. a surprise trade surplus in march as exports grow and imports ease signally weak domestic demand in china. >> and germly had strong trade with countries outside of the euro son. in the united states, the
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calendar says it is spring, but earnings could be chilly as they expect the slowest growth level in three years. hello there, welcome to "worldwide exchange." i'm chloe cho alongside ross westgate over in london. does the new york plaza have a price tag? indian conglomerate made an offer to buy the famous hotel and coming up, we'll just see how much they are willing to pay for the luxury landmark. earnings season kicking off today, as well. one of our guests expects a sunny qe as he says the economic climate surgically guarantees record reported earnings. but is there a chance of rain in forecast and do you have trouble waking up in the morning? one man has especially vented the cure, an alarm clock that forces you out of bed. even the price tag will have you losing sleep. so can you imagine what that
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kind of clock will cost? >> extraordinary. $350 apparently if it goes into protection. but i think that's just because the guy is making it himself and if you put it into for beinger to in eye with an or something, i'm sure the base prize would come down pretty quickly. but you sort of admit you have a problem if you have on buy that. one hour will to the trading session, we're certainly weighted to the down side. only 40 odd stocks up at the moment. so how does that translate? have to pay catch up to the u.s. the ibex down 1.4% and really the gauge of sort of investor on that tight for risk or fear very much being played out in bund and spanish yields. ten year 1.702, getting down toward the september lows. so not far away from the record
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lows. getting back towards it on today's price. and of course in spanish yields, we saw them rise 25 basis points last we're. now well over 400 basis points. takes us back to the spreads that we saw in november. today yield going higher. 6% being eyed up here and people talking about 6 as a key psychological mark at the moment. so big falloff in in yields. started creeping higher in the last pew weeks. as far as euro-dollar is concerned, we've been eyeing up the 1.30 level. just above it at the moment. but the point is euro-dollar tried to break up to the up side at 1.34, it failed. dollar-yen down at a one month low, 81.13. bank of japan refrained from expanding its loose monetary
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policy. aussie dollar, 1.0289 is where we is an. sterling-dollar pretty steady where we finished last week. >> and plenty of red arrows across the board here, as well. shanghai market fell to as low as about a percent or so, but managed to crawl its way back up to close up 0.9%, while some of the trade figures out today are surplus instead of a deficit, which was really the widespread view out there in the market. there are a couple of concerns here, china does tend to post a deficit in the earlier part of the year because there is a lot of front loading that happens. but in the end when you get a strong surplus, it actually raises the question of what is going to happen in the second quarter. that is when manufacturing activity gets ramped up. what about the fair value of the renminbi? because the tag line we've been hearing is that because china's slow down is going to be
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permeating for much of the year, maybe the renminbi is at a fair value and much of the appreciation that we've been seeing for the couple of years past is done it and over with. so it opens up a can of worms and if the u.s. goes into a softer slump, will that benefit china. the domestic demand factor also not as strong as possible. so part of the reason reversed here only in the final 45 minutes or so may be because there are easing expectations. remember, there have been a lot of bets about easing. that hasn't happened yet. easing expectations, maybe are is jen wh genuine end user dema. elsewhere you can see quite a few red arrows. take a look at the kospi. and take a look at japan. just off fractionally. so over quite a bit of loss of momentum. we'll delve into what actually chinese trade numbers will mean and we get more clues about the extent of the chinese slowdown
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throughout the week. lending figure and first quarter gdp. >> and greek banks are up this morning. a notable outperformer on optimism over recapitalization plans that are being put into market. joining us for more for the first hour, managing partner at armstrong investment managers. pat ri patrick, thanks very much for joining us. in the last few weeks, stocks have been sold off. bond yields, despite the knefeeg everybody out it was over, bond yields have come back. what happens from now? >> i think you'll see the market continually push peripheral yields up higher. you'll see buying of spanish and italian bonds indirectly in the market. you're seeing earnings plateauing. you won't see much earnings growth. and the question is how much time it will slow. we're in the camp china will have a soft landing. we're not worried about the hard landing. but we think risk assets will
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have a dekt part of it in the coming three months. >> we'll recap the trade data and get your your views of that. how closely do we need to watch yields in spain some itali tsom? italian yeed yields have risen, as well. >> you have the ltro finance buying. and austerity right now with recession,s it is going to be very difficult on i think force investors to see 5 1/2% yields. italy being very attractive. >> patrick, even the u.s. treasury market just when a lot of people were betting that yields would back up, somehow they keep on coming down. is the trade getting crowded by the fact in there? >> it's difficult to tell right now. we're short german bunds. u.s. is around 2% on their ten
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year bond rates. no way you'll make a real return at these levels. as a trader, yields may fall somewhat in the short term, but in the long term, you're not going to make money right now. so it depends on your i'm payroll. i think with risk aversion probably will pincrease this quarter, but you'll destroy the real value of your wealth if you're putting money into holding these bonds. >> the fact that investors are in there when they know that they're losing money, whether german bunds or even jgbs or u.s. treasuries, that's probably a telling sign of the dangers out will. what are they really worried about and what are the risks that those dangers will materialize? >> i think they're worried about a lot of things. the end of the year is the big crisis people are worried about. but you're seeing corporate earnings grow slowly. profit margins at levels where you can't see them expand.
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only way you'll get earnings growth is through economic growth. you're in a deleveraging environment which is bad for economic activity. and you've got to consider bonds, you're getting no rush. destroying real value of your wealth. equities, you're facing short term headwinds. but probably looking at compelling long term valuations, i think what you'll need to see is some earnings momentum happening and then you'll see a very big switch out of bonds in to equities. but don't expect that to happen in the near term. >> well, thanks so much. lit delighted to have you on this program as our guest host. we'll talk more in a bit. let's get back to the topic of china's surprise $5.35 billion trade surplus in march. certainly a big turnaround from that shock $331.5 billion trade deficit we got in pen. and tracey chang bass has been looking into those numbers. >> the trade surplus came as a total surprise and since most economists were expecting a deficit. exports grew 8.9% in march from
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the year before surpassing expectations for 57.2% increase. but import growth eased well below what analysts were expecting and that's raising questions about the strength of chinese domestic consumption. and of course remember that beijing has reiterated its determination to booth domestic consumer spending. the government has made it very clear that increasing domestic demand is china's long term growth plan sees the strategy of exporting cheap manufacturing goods abroad as no longer sustainable. still the price trade surplus reinforced expectations of a soft landing for many and some veteran market watchers remain bullish on china's prospects. >> the growth rate will be closer to 9% than it will be closer to 7%. and while there may be some easing of policy from china to support the economy, it will fall well short of the massive
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stimulus actions that were required three years ago. >> the big question mark, of course, is europe. weaker eu demand for chinese goods could refrain a growth track on the world's second largest economy for some time to come. >> certainly if the the u.s. holds up, that could also act as a counter balance. plenty of things to discuss. let's get out to research fellow at the east asian institute here in singapore. thank you so much for coming into talk to us. these numbers are really confounding everybody out in the markets today. number one, if there's a positive, maybe investors market watchers have been getting too fearful about the 7.5% growth level that premiere wen highlighted earlier in year. what is your take on what exactly is happening to china one month after another, these mums are just confounding us. >> i think the chinese economy
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is no doubt slowing down at the current moment. and we can see from this trade figures that you willy china's economic fundamentals are deteriorating month by month. this quarter's trade pigs actually on the surface is not that bad. but actually will this is probably because people's expectations are too low. most people expect that the chinese will have trade deficit in first quarter. but please remember china is beneficiary from the globalization is the largest, the world's largest exporter. it has benefited a lot from its -- >> put it into numbers for us. >> in 2008, the chinese raid surplus reached its peak almost $300 billion. but now we're talking about $5 billion trade surplus. it's very small compared to its
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peak. >> so if china has come off the hot and cold days and it is undergoing restructuring, judging from the numbers that we have so far year to date, it seems like economic rebalancing act is facing a few speed bumps. and in terms of q1 gdp, that's the next big number we're looking out for, the market expectation is 8.3% or so. is that what you're expecting some based on these numbers, it looks like china could be closer to 9%. >> no, i think this year china's g did tp growth at most could reach about 8.5%. but next year definitely it will continue to slow down. the next two years, it will reach about as low as 7% or even lower. if we look at chinese economic fundament fundamentals, we can see most factories in the coastal areas are closing down largely because the high rise of labor costs achd energy costs, as well.
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so what is happening in china is that most factories companies do not make money as before. >> we're seeing the very low levels of imports and higher level of exports, doesn't seem to be any sign of that occurring. what are your thoughts on that? >> if you look at china's consumption,s's still very low. most of the policies from the chinese government are not effective must have to boost the domestic consumption. if we look at the upgrading of the industry, it's another failure. most of the china businesses are still in the low level manufacturing sectors. so i don't think in the near future will this kind of fundamentals will change fundamentally. >> a lot of catching up to do
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for china and a lot of adjustments to go through. thank you so much for sharing with us your insights. >> it wasn't just china had trade data out today, we also had numbers out of cherm in a. patricia has been analyzing number. we've seen of course in the engineering order segment and pmis manufacturing new orders have been weaker than we might have out. what does this trade data today? >> it counter acts it a little bit meaning that the export data is looking up for the second consecutive month, up 1.6%. so that is quite good. but it also shows the kind of export areas that germany has at the moment. the uk, u.s. and china. within the eurozone, biggest trading partners really of
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germany looking a little more muted. industrial production as well for pfebruary, the reason it wa softer was because of the weather. the cold weather can put done the construction side of the business. and that distorted the numbers. 3.9% showing the german economy is not only selling out, but also importing consuming. so that should give us quite a positive indication for the first quarter gdp, not getting germany into a technical recession. seems that germany could be really get off the shook when it comes to a possible technical recession. so all in all, it looks very perky, record numbers also, but it comes to the amount exported and imported in general. all in all i think what is very
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important to note about the data is where the ger pan companies are very competitive, at that level, though, at some point that needs to end. so again, the export day it take can continue to come in higher if the growth outside of germany continues to be there. >> still to come, alcoa expected to kick off earnings season on a down beat note. we'll look ahead to the numbers.
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spanish government may consider a tax on the rich to help resuscitate its health care system. a debate should be open in parliament over whether the service, which has wrapped up 15 billion euro wills in debt, should remain free for the highest earnings. estimates have suggested 10 billion euros could be saved from health care and education budgets. at the same time, the reforms are not sufficient and he expects more mergers between lenders in the coming months.
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patrick is still with us. what's your view of the consolidation still needed in the banking sector? >> the smaultller banks will ha to be eaten up by the larger banks and the government will have to finance that. so you will see that happening throughout this year. you'll need to see the government force the issue a bit. >> what's your base case for spain and italy and what investors are -- can they part the story or not this year. >> i think you'll need some form of economic growth. but you won't get any real economic growth. >> it's not forecast. >> it's not. you need the euro around 1.20, but you're seeing already germany -- >> i suppose what i'm asking, what is the the biggest impact here on investment decisions?
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we were happy you could sort of ignore the eurozone to it a degree and just invest your money. is that still going to be the case cot the end of it year, we get no growth and yields keep heading higher? >> i don't think you'll see a real bailout of italy and spain. they don't immediate it right now. if you do see yields move back towards the 7%, you can go to the market and have a sustainable market. but without economic growth, there's no way long term and you'll see the periphery get out of the debt troubles. you have to engineer it somehow. i think you need a much weaker euro to do it. you need more stimulative actions and austerity is a big headwind, as well. >> and the pact that if you take a look at spanish three year bonds, ultimately even with a three year ltro operation, you're ending up -- you're
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losing money. how long can they keep it going and what sort of bullets do the banks me to come up with some is the ecb work done and over with? >> no the market will force the ecb's hands. it will come back in to the booifer's last resorts and buy the bonds. i think the market will get more and more frustrated with the lack of economic growth, and you will see yields spike up back to where they were in november at some point. you need a weaker euro, as well. it's really important for the periphery to have a weaker euro and nonconventional measures will help facilitate that weaker euro. so i don't think you're worried about insolvency. you'll probably require a bailout for them.
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so it will be a difficult year for them and i don't expect any big interventions until you get yields again. >> from spain saying if the economy worsens, banks need more capital, spanish reforms found so far insufficient and he says spain will not need -- ecb discussion about reform is not a bailout. you don't think spain will need a bailout? >> they won't need an pishl bailout. >> they'll get assistance before they ever get into that. >> you'll get assistance and market interventions without an official bailout. >> okay. transocean ceo saw his pay jump despite the costly litigation with bp. do investors think he's worth it? >> probably not. if you look at the share price reaction in transocean last year, it was down 45%. let me just give you a little
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more background on what we saw in the annual report last night. ceo compensation rose by 57% to $9.9 million last year. and that really does seem like a very significant jump especially as you pointed out if we keep in mind that there's still one big unknown hanging over the company and that of course is litigation costs for the macondo well explosion. costs could be as high as $1.2 billion. and that seems to be roughly in line with what the market had been expecting. very quickly just want to remind you that this isn't all in terms of what's looming for transoc n transocean. last week a brazilian federal prosecutor has said he's seeking a combined $22 billion in damages for both chevron and transocean for hatheir role in oil leak off rio. that seems to be a little bit overblown according to analysts, but still transocean could be
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facing yet another fine. back over to you. >> okay. thanks for that. chloe. >> and, ross, coming up on "worldwide exchange," do you have trouble waking up in the morning some one man has envented the cure, an alarm clock that forces you out of bed. even the price tag will have you losing sleep. [ male announcer ] this is the at&t network. a living, breathing intelligence helping business, do more business. in here, opportunities are created and protected. gonna need more wool! demand is instantly recognized and securely acted on across the company. around the world. turning a new trend, into a global phenomenon. it's the at&t network -- securing a world of new opportunities. ♪
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host holiday gloom in european stocks. investors shift out of risky assets. >> beijing announces a surprise trade surplus in march as exports grow more than expected while imports eased signaling weak domestic demand in china. >> and germany also sees an unexpected rise in exports thanks on strong trade with countries outside of the eurozone. >> and in the united states, the calendar says it is spring, but earnings season could be quite chilly as companies are expected to report the slowest growth in three years. >> german bund yields heading
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lower. spanish yields continue their rise higher. treasury selling $21 billion about will ten year debt, $13 billion in 30 year bonds on thursday. joining us for more, director of research at ida global. thanks for joining us. three weeks ago, a number of analysts saying we have a big asset allocation shift out of fixed income into treasuries and stocks. since, treasuries continue to decline, down another chunk last week post the employment report, as well. what's your view? >> what we're seeing is a return to the kind of yield levels that previously existed over the last six months. and that's because the numbers
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in the u.s. economy have lost some of the momentum. you've also had after a phase of risks on people questioning where the new liquidity will come from, what the global economic picture looks like. so we're really seeing yields coming back towards the levels of -- >> has the rally been a liquidity rush more than based on good hard data? >> well, we had a trillion euros of ecb money, we had operation twist which is still going on from the fed. bank of japan, bank of engrand easing. overlaying with that, you did have some better u.s. numbers, but we still have a sick likely weak position in europe. globally, it's a model through year. >> so bunds have outperformed. a record low of 1.6340.
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at the same time, spreads with that in spanish yields, back over 400 basis points. what's your target and where do we get worried again as a signal of sort of fear and disinterest in the market in buying spanish debt? >> i think the target in the near term is 450. >> so the spread. >> on the shred. which is 635 on the ten year. and that is predominantly sort of technical. people won't really buy until you've got a very large risk premium. should we get worried about that some pot at the moment. we don't have the crisis flash points that we had last year. you'll see rising tension, but you won't see necessarily august or november style mini crisis in the eurozone. >> and you thought it was time
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for the yields to go back up, but what you look at what trade and fund managers think, a lot seem to think it's a sure thing that we get qe-3 from the fed once june is over, once operation twist is over. isn't it a sichb things to come? >> i don't think the consensus is that we will have qe-3. i think it's data dependent. you will sea economic weakness and probably a qe-3 from the united states, but we're short bunds right now and i don't see an economic environment where 1.7% yields will work out as a good investment. if you see economic strength, you'll see inflation in germany and you'll have to see higher interest rates. if you see economic weakness pricing in, you'll have to see germany bail out the rest of the periphery. so at 1.7% yield, i don't see a compelling value right now. >> for longer term investors, i
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think that's certainly the case. current yield levels, there is no value whatsoever. however, as this spanish widening sort of continues in the next couple of weeks, we are likely to see the safe haven bid remaining in bunds and that can keep yields at very low levels well into may. >> the target for ten year spanish yields, you think 635, did i hear that right? >> 635 i think is what we're looking for. >> okay. have a good week. thank you for coming in. >> over here, quite a bit of negativity. a couple of factors here. some of the markets playing catch up after coming back from an easter break. elsewhere, we certainly have quite a bit of negativity and investors were con founded by the trade surplus, as well. and it's a surplus for q1.founde
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trade surplus, as well. and it's a surplus for q1. china is it tend to be a little bit of soft nest fness china is it tend to be a little bit of soft nest fne for the fi three months of the year because of front loading. so it raises the question what is the fair value of the renminbi and ultimately if the u.s. undergoes a little bit of softness, do we see softness translate manage to chinese demand, as well. just when we thought rebalancing was going along smoothly, you throw in the political transition under way, it's really getting hard to tell. the shanghai market did manage to close up at the end of the day. seems to be a couple of factors. maybe easing will come. maybe the property sector may have hit bottom. nikkei down six sessions in a row. of course the easing did come are from the boj.
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a lot of people putting their money on the 27th of this month. >> and we are lower after losses last week. ftse 100 down nearly a percent. it's off around three quarters this morning. we have bounced off the session lows. the question now is whether it can break through the 130 level on euro-dollar. >> speaking of the bank of japan, once again, it looks like it will wait until it next meeting in two weeks time to decide whether or not it is going to implement further easing. boj chief says the bank will wait for more information on the state of the economy and price conditions. that comes after the boj kept current policy on hold as widely expected.
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it ten year yield slipping to a six week low in anticipation. and remember the boj has an inflation target of 1%. whether it can beat it is the million dollar question. let's talk more about this adam gilmore. he is head of fx and derivative sales at city asia pacific. thanks so much for coming in this. i think a lot of people are putting their money on easing on the 27th, but we need to know what easing will help japan beat deflation and actually get growth momentum back. >> we're thinking there's a reasonable chance that there is in a couple of weeks and we think it will be reasonably successful. we're more optimistic than a lot of the market and we position there is a reasonable degree of success that they've had and they probably can turn it
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around. >> i don't think there has been as much pressure for the japanese central bank to ease given that the dollar-yen pair is not going this line with general consensus forecasts. it's actually been strengthening and that's roiled equity markets about japan. so what happens if they don't ease or if it's not enough, how much of an impact does that have on the japanese economy and inflation? >> i think a little a easing would be good, but the know mmo is already there. >> what's also interesting is in terms of jgb yields, quite a few traders who have come on cnbc have told us that they are betting on yields to back up. their time frame could be even as early as june because the
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changing demographics in japan, the pact that the ecb has a bigger balance sheet than the fed. bow actually see that happening. >> there has been a lot of conversations about the changing demographics and people are betting that the yields will sky rocket and there will be a massive problem. but one of the interesting things on that was they were talking about the value added tax and that was a good way for japan to get a lot of the money back that they need to reinvest. the numbers i've seen they need to do is 20%. this is a good step on the way to that. >> i'm wondering why you don't don't think it's almost a certainty they'll be easing. with the bank of japan not expecting any price rises. they're targeting 1% inflation.
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why isn't it a lock and load that they will be easing? >> i think they're worried about spending before they really need them. i think they've seen a lot of the other central banks around the world cut rates to almost zero and then have on throw a lot more money at the system. there's a lot more other bad effect has come out of that, you have rising asset prices, rises housing prices. i'm not saying that's going to happen in the japan economy, but i think a lot of the central banks away the world now are in a bit of a wait and see mode and they're waiting to see if there's been more of a pull back in the economies before they pull the rigger on something like this. >> so whether that sales tax that they've been talking about for years is another discussion. thank you so much. we'll save that for another day. and moving over to korea on the
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eve of parliamentary collectiel north korea is ramping up the rhetoric. a joint statement conjures up the threat of war under south korea's current government. the statement urges voters to strike a pro at the pro u.s. war like forces. speaking of those parliamentary elections over in south korea, that takes place tomorrow, largely going to become a bipartisan battle between the ruling frontier party and the dup united party, issues that have popped up in this competition. >> politics has turned colorful this april. red for passion from the party which ditched its long standing blue to go more liberal. while the democratic united
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party adopted a mix of yellow and green to symbolize democracy in a spirit of policy icons. while colors may seem frivolous, either's all part of a reimaging aimed at attracting younger voters. the outcome will well set the tone for december's presidential elections. for the first time in 20 year, voters will head to the polls twice in a year. still seeing entrenched in scandal like the recent water gate case. ruling party has been accused of illegally tapping up to 2,000 politicians and just after a vote by scandal in february. >> this is impeachment material.
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the president is maneuvering all of this behind the doors. >> to refew its image, they're pinning a 27-year-old female candidate against the 59-year-old liberal heavy weight. also accused of opposition of overlooking the greater good. >> having those that can sacrifice national benefits for votes is a scary warning. >> the main opposition, liberal democratic united party hasn't been without its problems. opposition candidate came under fire just a week before the elections for making remarks against women, senior zit zens and churches. but they're cashing in on the backlash enacted by the current government.
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>> the fate of the economy can be of the people or the privileged few depending on who you pick. >> the can good news for voters is that was a presidential vote with just eight months away, they could see more beneficial policies even after polls close tomorrow. >> we'll certainly update you on the voting results. kospi just closed down fractionally today. certainly quite a bit of an impact once the chinese trade numbers were out p. and election fever all around the world. >> and the most important the french presidential election. first round kicked off or campaigning kicked off yesterday with candidates airing the first of their radio and tv advertisements and posters appearing throughout the country. stefane, what's been marked of course in the last pew weeks is this sarkozy is on a bit of a
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know men up change. >> no, not at all. if you look at the first round of the election, they would be basically at the same level. but at the second round of the election, which is two weeks late every, sarkozy would be heavily defeated with 45% of votes, that's according to ipso. ten advantage points behind the social list candidate. sarkozy has been able to reverse the trend. he seems to be the victim of the chris sis a crisis. french voters are more attracted by extremist leaders.
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the left would get nearly the same score, 14.5% of votes the big surprise is a new income tax, 100% for all salaries above 360,000 euros per year. he wants to buy sock options. will his program would be extremely extensive and unre unrealist unrealistic. most would vote for the socialist candidate at the second round of the election and that's the question would he be powerful enough to ask for communist ministers in the next government. that's really now the question for the french election. >> let's bring in patrick. how big a political event about terms of european politics, how much might it change the game for investors?
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>> you've got -- i think in general the elections coming up, you've seen spain already going back on commitments it made to the ecb and imf on its fiscal targets. >> the question is whether with the new lieder they would side more with the peripheral and sort of an anti-german policy than the currently taken. >> with those numbers, it's very much in the balance. i don't have a good thought on way things will go on this. >> it's hard for investors. we dough no i know investors ar for yields. so we'll get more thoughts on that in a second. >> it will be a fascinating
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election coverage pretty much all over the world will year. and moving over to india, a conglomerate is making an unsolicited bid for new york's hand mark hotel for a reported $600 million. let's find out more from mumbai. >> we're pick reports that an unsolicited bid of $600 million to acquire the landmark plaza hotel, but the problem is that they need the approval of israeli and u.s. holding and that are partner, which is controlled by a prince. and the latest communication which we are picking up from the prince is that he is not planning. he wants to retain it and he looks at it as a long term investment. but it is very interesting that an indian company is looking to
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apply that landmark hotel. and it won't be the first offer that they're making. previously they had acquired the london luxury hotel in 2010 and as of now, what we're picking up is that there is another bid for the plaza hotel. but it has to go through the complications from the israeli prince. but apart from that, just a quick word the market is absolutely flat on account of the petroleum and natural gas regulatory board authority which has increased the tariff and compression charges by 60%. consequently the gas itself is down about 35%. other oil and gas companies have been under treasure pressure. so that's the space you need to watch out for. but all in all, a flat start.
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back to you. >> thanks for that. still to come, you'll find out why our guest host is long term bullish on crude and short u.s. natural gas and where patrick thinks we can go to get dividend. úú]úñ 
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alcoa reports first quarter reports after the closing bell. a loss of 4 cents a share down from 12 cents profit a year ago go due to restructuring prices and a drop in aluminum prices. analysts suggest growth of 3.2% s&p 500 companies. 1.8% if you exclude apple, the slowest growth in three years. your own view of how earnings -- did we get to a point actually when we were sort of priced for perfection and we're just seeing a readjustment? >> i think so. an lists were forecasting 5% and now you're saying it's down to 3%. i think you'll see something in the range of 1% to 2% and you'll see every ceo saying input
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prices were higher, sales were low, and that's theme from every company in the reporting season. >> with bond yields back down so low, where do investors go to find some yield at the moment, where do you find it in the corporate landscape? >> you get about a 6% yield, with no defaults, 6% yield with a short duration is very attractive. also the big multinational companies that aren't price takers, that aren't just accepting higher costs, but with pass that on to the consumer. is it a pricing power. those are good companies. health care providing very good yield, very special cash flow within the equity space. while you're waiting for that rotation, getting paid handsome. >> and what happens to the price of oil, the economic impact of it. we see present still trending
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away the 120 level, 121, so we've come down from the 125. nymex from 106 starting the european week at 10219. you want to be long oil and short natural gas. natural gas has been an extraordinary performer. >> more produced than consumed. and when that you get to the end of july, unless you have a very hot weather, there will be nowhere left to store is. we think there will be continued downward pressure on natural gas and it's a very expensive contract to be long. so when you're rolling your futures on natural gas that's costing you 10% a year. if it stays flat, you'll lose from that consequence. >> why go long oil?
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>> on oil, we're longer dated contracts on oil. we think the consequence of the quantitative easing, you are going to see demand for real assets, just monetization of debts. growth of 3.3% this rear, which is quite healthy globally. and this will continue to drive demand. costs will continue to rise because all nominal prices are rising. and with longer dated crude contracts, jackie, there were apparently some people working
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on easter. >> that's correct. happy he's it ter easter. i'm glad you enjoyed your day off, but yes we were hard at work yesterday. and mean time we're focusing today on earnings. they're on the top of the agenda ear in the u.s. we have alcoa kicking off the reporting season after the bell today, so everyone will be watching that. and more analysis on that in the next hour and as always, keep your e-mails and tweets coming in. we'll put your questions to our great lineup of guests.
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headlines from around the globe this morning, here in the united states, the calendar says it's spring, but earnings season could be chilly. companies are expected to report the slowest growth in three years. >> certainly post holiday gloom in europe. stocks trade firmly in the red. german bund yields have hit their lowest levels in nearly six months as investors shift out of risky assets. and beijing announces a surprise trade surplus in march signaling weak domestic demand in china.
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>> let's take a look at the u.s. futures. it looks like a little bit of a change in direction. the dow looking to be higher by 18 1/2 points. the nasdaq by one and change, the s&p 500 higher by 1.7. and i really can't say anything other than it was a rough day for the markets yesterday. we saw that 130 point loss on the dow. the dow dipping below 13,000 pot first time since march 12th. also closing before below its moving average since december 20th. we saw investor reaction to the friday unemployment report as well as the anticipation of earnings season. but interesting to see that we're seeing a little bit moore positive sentiment right now. >> volumes are low, though. so it was a down day, but volumes are low. so take what tfrt you can.
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we're keeping our eyes on the bond markets. ten year bund yields, 1.7%. not far away from the record low we hit september of 1.63. and the spread key so we'll keep our eyes on those yields. >> yields so important right now. meantime, we're watching alcoa because it officially kicks off the u.s. earnings season today when it reports first quarter results after the closing bell. forecast to put a loss of four cents a share down from 12 cents profit a year ago. decline due to restructuring charges and a drop in aluminum prices. analysts are expecting earnings growth of 3.2% and 1.8% if you
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exclude apple. villes, consumer staples and technology are expected to be some of the best performers. joining us to talk more about that and to give us his insight is kit jukes at societe generale. so great to have you on the program with us. let's pick up on earnings season. we had a little bit of a rough day in the markets here in the states. part of it was the jobs number, but part of it is anticipation of the first quarter earnings reports that will kick off today. what are your thoughts when you hear some of those growth expectations? >> people are expecting earnings to grk increase is still someth. if you think about the last six months, we've had decent employment growth, modest economic activity and higher energy prices. so put those in a pot, you have much lower productivity growth, so profits come unit ter pressure and earnings will be weaker. what we have to figure out and what i don't know the answer to
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this morning is, okay, how high can price earnings ratios go, how much does cheap money excess liquidity and u.s. monetary policy offset the undeniable reality of slower economic growth plus weaker earnings. and i don't know the answer to that. but from where i'm sitting, if earnings aren't falling, i'm looking at places to buy risk assets be they equity or high yields foreign exchange. >> and it's interesting that you mention it's a little bit of a balance there that we have to watch for. but a lot of investors have been hanging their hat on the fact that we'll see more growth in the united states and they keep saying even if the unemployment picture isn't fantastic, we're seeing the corporate picture remain really strong. so if for some reason the earnings come in even worse than expected, i think that's a bigger sign of problems here to come in the united states. so does that bring qe three back on the table? >> i think qe-3 is the carrot that dangles in front of donkeys
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like me every day of the week.u.s. economy is generating on last week's jobs numbers 1% employment growth, productivity somewhere between 1 1/2. so gkp running at 1 to 2 and change growth rate. that's new normal. don't expect 3%, 4% growth rates. we're not in the go-go years anymore. against that backdrop, we've had very strong earnings. they'll weaken a little bit. the fed's on hold for as far as i can see. if growth was a slow back towards 1% to 0 that would scare them, we would get qe-3. if it stays at this will point, we'll get nothing. we'll always have the carrot hanging just in front of us and i think that pattern remains in place for a long time and it's navigating that that's actually quite difficult for markets. but qe-3 won't get taken off the table until the unemployment rate is way lower than it is today in the states.
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>> and of course as i like to say, the drug of choice for wall street. meantime, more analysis on earnings season during the show, so stay with us. at 5:40 a.m. and 11:40 cet, we'll be speaking to a guest who says that investors should expect record results in the first quarter. meantime ben bernanke says banks immediate a bigger capital butcher to ensure stability in the financial smg. speaking at an atlanta fed conference on monday, bernanke said that the u.s. economy hasn't fully recovered from the financial crisis, so regulators must find new ways to strengthen rules for the banking industry. >> national stability policy has taken on greater prominence and is now generally considered to stand on an equal footing with monetary policy. >> kit, your take on the comments from bernanke there. >> ben bernanke has done such a good job, it's hard to ever criticize him. but financial policy, making sure the banks had enough money,
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that's what we needed to do in 2005, 6, 7 and 8. we do need to do it now into the recovery because the banks are still too big to fail. we haven't solved that problem. and because we're feeding -- we're seeing banks fed with cheap money. but the more money the banks have to put aside as a buffer, the less money they're going to lend and the slower the economic recovery had been. so this focus on bank regulation is just another of the things acting as a drag on global economic recovery or on developed economy anglo-saxon and european recoveries. because the banks are being held back with brakes on them in order to make the world a safer place, then we won't get a strong recovery. >> what sort of signs do you think we'll get from bank earnings some we have jpmorgan kicking off later this week. do you think investors will get any signs that they are being able to say more profitable in this kind of leg taker to
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environment? >> i know little about individual bank profit outlooks. but the cheap money that's being fed to the banks, the collapse in defaults across the corporate space, looks to me like a recipe for the banks to make good money in the quarters ahead. and what they're doing is still writing off old bad loans as they get through the old problem loans, i think you'll see bank earnings start to pick up significantly. the one offset is banks are being asked to put more and more money aside not to be used productively. so the long term earning picture for the the banking sector is maybe not quite what it was, but surely this monetary policy stance of the fed's is designed to help banks make money generically. >> also one of the reasons why you're short dollar against the canadian dollar and mexican
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peso. trading in a tight range. we might have another go at 130. but is another doing to change here shall. >> if i had any, i'd pull miy hair out. but i vice president. i think we go to 125 next and then up to 150 and beyond. so i'm a down and then up person. >> but not a big enough adjustment really to help peripheral out in europe? >> no. europe has got a set of policies which look more like japan's. so lots of austerity on the fiscal side trying to get labor costs down offset or compensated by easing mob taker policy up to a point. but we'll have a european economic eurozone economic with big current account surplus and strong currency in two or three years i'm if nothing changes. we've seen it this movie before. it's called japan. >> kit, good to have you on today. we've talked hair, carrots and
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donkeys. plenty more to come. can't wait. >> indeed. kit, we want you to keep your hair. we like you looking the way you are. and when we come right back, we'll talk with that surprise trade surplus for china in the month of march. that came thanks to a pick up in can ports particularly from the u.s. so is that did negood news for investors some
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time to take a look at your global markets report. we'll start in the united states. u.s. futures, we were a little lower before and how it looks like we're hugging the flat line. no clear direction here in the united states of course after our big selloff yesterday with the dow down 130 points. and we are seeing a little bit of mixed sentiment across the board this tin the european an markets. >> 9:1 decliners outpacing advancers for the stoxx 600. 2.5% for the german market, 3% for the cac. continued those losses beginning of this week. ftse 100 down around 0.75%. ibex in spain down 0.9%. this market is back to levels that we last saw in 2009, below
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7600, but we'll keep our focus really. the best gauge of really where investors feel at the moment, keep your eye on the spreads between bunds and spanish ten year yields. german ten year bund yields below 1.7%, 1.699%. we hit a record low in september last year, 1.634%. this is the record low here. we're nearly back down on it. that means the spread between these two is well over 400 basis points, around 415 basis points as the yields in spain edge up ever close to 6%, 5.87%. quite a long way off those lows, we hit 4.5% around about beginning of february. you can seat big dropoff. we already had a guest on this morning saying he expects around a 450 basis point spread with yields in spain going up to about 635. so as we watch that, and you are
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row dollar, we'll see if we can having failed 134 on the up side, will it break through 140 on the down side. dollar-yen down one month lows. aussie dollar still pinned around these near short term lows at 1.0284. it's really just a play on what happen mis-china. sterling-dollar where we were this time last week, 1.5844. chloe, how have we faired in asia? >> the aussie dollar that you highlighted is a clear illustration of how markets were unsettled by that surprise trade surplus for china. quite a few red arrows throughout many of our markets. the shanghai composite, some easing expectations and also that programs the property sector may have bottomed out. that seems to have assumed tsupe market. no easing coming from the bank of japan. but a lot of people putting their bets on perhaps more he'ding on the 27th this month.
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>> and let's go back to china, that big story. china returning to a trade surplus, $5.4 billion in march, beating economists forecasts of $1.3 billion of deficit. tracey chang has been looking into this. >> that's right, chloe. although import growth he'sed from a 13 month peak, a pick up in orders compensated for a slow down in domestic demand. between january and mafrrch, th value of trade with the united states rose 9.3% on $107 billion while trades with the european union grew 2.6% to $127 billion. but import growth eased well below what analysts were expecting and that's raising questions about the strength of
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chinese domestic demand. and that's the long term growth plan since the strategy of exporting cheap manufacturing goods abroad is no longer sustainable. still, the surprise raid surplus reinforced expectations of a soft landing for many and some veteran market watchers remain bullish on china's process spenkts. >> the growth rate this year is going to be closer to 9% than it will be closer to 7% and i think while there may be some easing of policy from china to support the economy, it will fall well sho short of the massive stimulus actions required three years ago. >> the big question mark of course is whether europe -- the eu import growth from china slows, it could bring a growth strap on the world's second largest economy for some time to come. ross, over to you.
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>> we'll get kit's view on it will just a second, as well. i'll bring you up to date, greece, although it's in a bailout program, still selling chlt bills. 26 week t-bill yield a little bit lower than the previous auctions. they raised around $1.3 billion on that. socgen your company saying imports only surprised on the down side. >> yeah, i think the bottom line when you get through the distortions of the data from the chinese new year in january and february, look at the first quarter overall, the surplus is running at an annualized rate of $160 billion, but exports are doing okay to the states because that's doing okay. imports are looking as if they're trending down. and that reflects weak chinese demand. >> and the aussie dollar is clearly the currency leverage
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play on what happens with china, so what are you doing with the aussie dollar? >> still trying to find ways to stay short. as long as zero rates and rising equity markets and china is okay and raw material prices aren't high and the world's a wonderful place, the aussie dollar stays here. if anything goes wrong, it's the most overvalued of the major currencies i think on most of our long term models. and it looks to me like a currency that could fall 10% and frankly that would be good for rebalancing the australian economy if anything was to go wrong in china. so i don't like owning it. >> so actually it's the way -- will it's a good way you think if china is going to weaken, aussie dollar is the way to have that in your portfolio. >> yes. and you can be short of it it something else with yield, the mexican peso, if you want to not lose money on interest day to day to day and it will probably stay flat while everything's okay. >> i like that. that's not a trade we have every day. short aussie, long peso.
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there you go. >> yeah, but i don't know if you can be that confident because judging from the numbers that we got and the next big hurdle is going to be the q1 day it take release on friday, are the market participants getting it wrong, the consensus forecast 8.3%, which would be a three year low, but judging from these numbers, there's got to be some positive contribution. what's your preview? >> i think the gdp mum itself can be slightly stronger than that, but the chinese economy will have a bumpy landing. and more particularly, not much of a advance after that. china doesn't look set to me to collapse and indeed current policy settings with interest rates being cut with policy being eased, why would you have the chinese bubble burst. you burt bubbles when rates are going up. so i think that's unlikely and on one day to the next, you might get some feel good from a gdp number, but chinese domestic demand is slowing and chinese
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growth isn't going to go back to the 10%, 12% rates that we had in the unsustainable go can -go years. as china refocuses towards domestic demand, i think some of the support that they've given to some economies for example like australia is going to solve then. so quarter to quarter, you might get okay data, but the chinese economy will be growing at a rate closer to that 8% than 9% for ages. >> and also what's going to happen to the u.s. growth, i think that's also going to be key is the united states going to carry the world and also china judging from the latest data. thanks so much. great to talk to you. coming up right after the pause, do you have trouble waking up in the morning some one map has invented the cure. an alarm clock that forces you to get out of bed.
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transocean ceo pay packet jumped despite the company still waiting for the outcome of potential costly litigation with bp. carolyn, do invest ors think he's worth the money? >> probably not. his compensation in 2011 rose by 57% to $9.9 million.
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that's despite the fact for the fourth quarter transocean did post a pretty big loss on impairment charges. if you look at the stock performance over the last year, the stock was down 45%. so in that respect, maybe that increase in the compensation is not justified. but as you pointed out, the biggest concern of course is still the litigation costs with regards to the macondo well exposure. that still hasn't been setted yet. in its annual report, ratransocn said potential losses could be as high as $1.2 billion and that's pretty much in line with what analysts have been expecting. but there's another headwind that i do want to make and you wear of. last week a bazzalian federal prosecutor said he was seeking damages worth $22 billion from chevron and rans ocean. and analysts say that this $22 billion mum is definitely overblown. but still it could mean more headwinds for transocean to
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come. on that note, i'll send it back over to jackie. >> thanks so much for that, carolyn. meantime here in the states, scott thompson is holding an all hands on deck with yahoo! employees today. he's expected to discuss the next acce next steps in restructuring which includes streamlining in to three core businesses. the meeting comes after yahoo! noufrpsed last week in a it would cut 2,000 workers. taking a look at shares, they are down about half a percent at 1146. meantime a question that impacting everybody, do you have trouble waking up in the morning some one man has invented what he says is the cure. an alarm clock that can only be stopped by getting out of bed. the clock has no snooze button. if unplugged, a battery takes over. the only way to make the alarm clock is to go into another room and type the day's date into a
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telephone-like key pad and at $350 a piece, even the price will have you losing sleep. i don't know about you, but i'm a notorious snoozer and i certainly don't need to pay $350 to be more inconvenienced and annoyed in the morning than i already am by my cheap alarm clock. >> you don't get up in the morning, you get nupt middup in middle of the clock. and presumably you could cheat and about put your key pad anywhere. what's to stop you from putting the keyed pad on your side table? >> exactly. >> or you just get a $10 alarm clock and put it in every room. >> you could get $35-10 alarm clocks and put them all over your house. >> you could have children who do things like ice skate. >> i might consider it if they had a few diamond specs and gold plating, but not this one. sorry. got to pass. >> i like the way he's feigning
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ireness. does anybody walk around doing that? >> i wonder what the margins are. must be huge. it doesn't seem like it's got anything of major substance in that gadget there. >> a lot of wires. >> anyway, we won't tire you with more talk. it's time for me on go. thanks, everybody. s ross, jackie, have a fantastic show. i'll be back tomorrow with much more. >> see you tomorrow, chloe. meantime, coming up on the show, the s&p 500 had been up more than 30% before last week's pull back. so the question, will the hangover from friday's disappointing job report and the prospect of a so-so earnings season set the markets up for a spring correction. [ male announcer ] this is lawn ranger -- eden prairie, minnesota. in here,
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welcome back. headlines from around the globe today, here ht united states, the calendar says it's spring, but earnings season could be a bit chilly as companies are expected to report the slowest growth in three years. >> a bit of post holiday gloom for european stocks. equities trading firmly in the red. investors still looking on stay out of risky assets. >> and beijing announces a surprise trade surplus in march as exports grew more than
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expected while import growth eased signaling weak domestic demand in china. nice to have you here on "worldwide exchange." if you're just checking in, let's take a look at the futures. we were looking direction a bit before, but now looking like we'll have a hire open with the dow higher by 25 1/2, the nasdaq higher by nearly 3 and the s&p 500 up by 2 1/2. seeing mixed sentiment from the global markets. but overall looking like it's shaping up to be a better day than what we saw yesterday with that 130 point loss on the dow. >> and european stocks have to play something of a catchup. but we're about on the best levels of the day, losses around two-thirds of a percent after losses of 1% and 3% last week for the indices. cac 40 down a little bit more
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than that. german bunds heading below 1.7% this morning, down near to the record low we hit in september of 1.63. spanish yields have edged higher again. >> monday was the worst day for the u.s. markets in more than a month with the major averages all falling about 1%. keep an eye on the s&p 500 today and in particular that 1371 level. the index is just 11 points away from dropping below its 50 day moving average. so we are going to be continuing to watch that. and joining us on talk a little bit about the markets is margaret towel, managing director and hightower advisers. margaret, great to have you with us and haas we talk about strategy, you're looking long term but there probably are a lot of folks who still aren't in the market. as you're adding to your positions and taking in everything that you see globally, how are you
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positioning yourself right now? >> right how we're positioning a portfolio to look out several months in advance. so i agree that investors are finding difficult places to invest right now. but we are looking out longer toward a more inflationary environment. so we're looking at real assets for the portfolio and just trying to get through will volatility in the market right now. if you look at investors, the two biggest things that investors need to deal with is volatility of portfolios and also the effect of inflation to preserve their real purchasing power. so when we look at what secretary are will do well and what aren't, it's always with the eye how do we edge against some xft possess sures or add to them. >> so it sounds like it's a little bit of a defensive strategy. and certainly you mentioned the vo
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volatility increases. but for the folks who don't have a portfolio in place, is it too late, is there buying opportunity out there for them? >> i think from a global perspective, a couple things that i would do. one, emerging markets longer term are a great place to be because of the growth. and we have an opportunity now to see a slight correction. so i would buy into the emerging markets and any type of correction there. if we look at the global equity markets, i think the u.s. market is probably the best of the worst so to speak, and so there are opportunities in the u.s. market, but you have to be careful about where you're going. so we see the market shifting from what has been a risk on-risk off macro view where we haven't necessarily had the highest quality performing well in the market to one where investors need to be discriminating in what they're looking at. so we still like the high yield dividend plays in the market. but then would be more defensive
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in looking at companies that are more defensive in this market environment. >> when you're investing in emerging markets, are you looking to take emerging market currency risk and get out of dollars or are you just looking for better companies, better yields and preferably stick in dollars? >> there ofrom our perspective, term we do find that getting out of dollars is a good strategy. from the perspective of just where to invest, we've seen an evolution over the last several years from more of what we would call a beta play to investors discriminating in individual companies. so we're looking at both the debt and equity market in the emerging markets. >> did you get a sense a few weeks ago we were priced for perfection a little bit in the stock market and do you sense
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any pull backs we have now as an opportunity on get back in at a lower level? >> there's always an opportunity. we always have a commitment to the market in terms of our long term strategic allocation. and so we were rooking for will pull back and we do think will is an opportunity here to get in to the market in terms of at these levels. we expect a little bit more of a correction here. >> we'll leave it there for now, but margaret of course will stay with us. so is kit in the uk. mean i'm still to come, alcoa kicks off earnings season when it reports after the bell today. our next guest says investors should expect a record earnings season. all energy development comes with some risk,
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exclude apple. a staggering figure. that would be the slowest growth that we've seen in three years. industrials, consumer staples expected to be some of the top performers. margaret, i want to come to you on the question of earnings. looking at the data points along the way, some of the analysts are forecasting the growth will be tepid. what's your thought on that? >> i would agree. we think that earnings season will be a difficult one. companies have done a terrific job in terms of cutting hair costs and they're just about at the point that we can't come much more. the other thing that's often overlooked is the affect of the very long interest rates of company's ability to kind of get cheap financing. so looking ahead, we expect a difficult time for the companies as far as this earnings season. >> so to put it in perspective
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and in context of the scheme of things, if the earnings are not as robust as some were predicting last quarter and we do see a tepid scaling back, how important is it in terms of the market, is it a little blip, should investors react with the negative feedback or should they take it as a blip on the radar and see more systemic growth going forward? >> i think it's going to be difficult. earnings are just one part of the picture and if we look at what people have been talking about quite a bit, which is the whole unemployment situation, the question is are companies going to be able to hire more people and increase production. and i don't think we'll be seeing that. so i think it is a longer erm situation rather than just this this particular quarter. >> meantime i want to bring in bill barker. he takes a little bit of a different point of view when we're talking about the earnings. in fact, bill, you're saying record earnings are expected and
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you're also saying it's going to be a big shock to the markets if they don't appear. do i have to tell you, you're one of the only people i've spoken to thus far that says that. why? >> well, this is according to the data that the s&p is collecting off analyst reports. certainly the case that record growth is not going to be part of that, but we're already operating after the last couple of quarters at close to record earnings, close what we had at the peak in '07, '08. so a slight bit of growth on top of that is what is expected. and there could be some sort of shock, some sort of big write downs. but absent that, you're going to get record trailing earnings after this this earnings season. >> and do you see some sector strength that you're honing in on, are there certain areas that you think could potentially be stronger than others? >> i don't think there will be
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any big change. the consumer sector has been the one that has been the growth driver out of the s&p for the last several quarters. and, again, that's what we're seeing in the early results, some of the companies that have already reported in this earnings season. there are i think 27 companies out of the s&p 500 which have already reported. and 22 of them have beaten expectations. a lot of those -- all the consumer discretionary and consumer staples companies have performed well out of that small data set so far. so the consumer sector continues to be the strongest. >> sort of picking up on that, we saw the weather playing a key role for the economic data in january and february in particular. who will have benefited in terms of the earnings, where will the weather have are come in with good q1 numbers? >> some of the home builders are
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seeing because of macro issues things have started turning around. but the good weather in the united states has allowed them to get off to a better start than otherwise would have been the case. and again the consumer saw better numbers in march for sales than a lot were expected to have. so people are enjoying the weather, going out and spending money or at least they were during the good weather up over the last hospital. so i think that the passion companies will probably have a good start to the the season. >> i have a question in that regard. we're hearing that a lot of the foreclosures have been put off and a srn part certain part of retailers good performance has been due on people having extra income. i think the number i saw was
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something like 4 hrs % of the retailsers. what's your thoughts in terms of the retailers looking ahead? >> looking ahead, of course if things really do changeers. what's your thoughts in terms of the retailers looking ahead? >> looking ahead, of course if things really do change in terms of power cloforeclosures, and t story developing over years, but certainly if banks have the ability to foreclose in a more meaningful way on a number of properties, that would definitely impact the pocketbooks of a lot of people. so it hasn't happened in a meaningful way yet. it has to happen eventually inned to clear that part of the market and that will be a healthy development for one sector. but it's not going to show up i think in the first quarter
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numbers. >> we'll leave it withere for t moment. meantime, when we do talk about earnings season, we have alcoa kicking it off this afternoon and we have an exclusive interview with klaus kleinfeld at 4:00 p.m. eastern time on the closing bell. and apple nearing another lofty milestone. if the stock hits $643.54, apple will become the only second company to ever reach a $600 billion market cap. microsoft topping take mark in 1999. apple could conceivably become the most valuable company of all-time about it hits $664 a share and it's only taken six weeks to go from 500 billion to 600 billion. fueling reports that the new apple tv device will be coming out this pafall. bill, let's talk about apple's impact on the s&p 500. we were reading before if we take out their impact from the
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earnings, the growth will be even less. >> yeah, well, as i said, the total growth for earnings is not terribly impressive. the growth rate is not terribly impressive. apple's growth rate of course continues to be amazing. and it's an amazing figure just what percentage of the earnings apple is providing to the total market. whether apple is going to pull off the tv the way they have with the tablets and the phone remains to be seen. certainly ll be lots of people betting that they could do it and it would be fascinating about about they could. so that's a story that i'm sure we'll hear rumors about for several more months. but apple's earnings itself, they've had a very good launch of the new ipad and i expect
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that hatheir earnings will imprs a lot of people. >> kit, you buy apple products. it's an interesting thought about whether they can maintain their market position. >>. >> if you find the right product, you can push on. if you told me two years ago that today i wouldn't go anywhere without an apple laptop and an apple tablet, i wouldn't even have known what a an let was and that i have paid quite as much as i have done and thinking that i'll upgrade them when there's a new one, i probably would have laughed at you. so they've very rapidly done for the technology space what swiss watchmakers did for watches that cost $100 to make and that people pay thousands of dollars to stick on their arms. in that sense, i'm just in awe of a company that can make me want their products so much. >> if the tv comes out, would
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you be interested? >> of course i am. i shall never know how i lived without it when i've got one. >> there's one answer for you. okay. thanks for that. bill, thank you. more to come from marmargaret, well. >> of course plenty more coming up on the the show. we'll take a look ahead at the trading day on wall street as the commerce department is due to release whole say inventories for pen fp february.
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let's take a quick look at the futures. does look like it will be a higher open.
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the dow looking higher by nearly 16. nasdaq by about 1 1/2 and the s&p 500 higher about 1.2 points. as well of course maybe the market setting up to erase some of the losses we saw, the 130 point swing on the dow. meantime there's just one piece of economic data out in the u.s. today. that's february wholesale trade at 10:00 a.m. eastern time. inventories forecast to rise about half a percent and there also are several fed officials speaking today including fed governor on bank stress tests and richard fisher on the economy and too big to fail. also the usda puts out its monthly grain report. corn prices fell 1% on worries that u.s. supply could fall to a fresh 16 year low ahead of the fall harvest who could spur higher food prices. margaret towel is still with us. and i want to get your final thoughts. we have some of the fed speakers coming out and everyone very closely listening to what they
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have to say and if there's any impact on question. e qe-3 and fed action. >> i think qe-3 is still an unknown. last week i would have said no, but with the unemployment numbers, i do think the twist will most likely be extended in that regard. so i think the fed's in a very difficult situation. the market is so used to the actions of the fed and we have an election year, so pretty much an unknown. >> a tough time to sort of yank it away. >> exactly. >> kit, what's the lasting impact from that employment report? >> i think it puts quantitative easing back on the table if needed, but more particularly, says gdp growth is going to find that employment growth gets back in line with it rather than catching up, so we had 2% employment and 2% gdp, that wouldn't make sense. 1% employment, they look more in
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line. and it keeps the fed on hold for as far as the eye can see with an option on more easing if ever needed really as far out as you'd like. >> and the dollar in that environment? >> it's negative for the dollar to the the extent that they can weaken it. so the europeans with a like a weak yen, but if we can get global economic recovery to happen, u.s. investors will be forced as they look to preserve the value of their investments to buy foreign currencies and the dollar will go down. >> and just one quick final thought from margaret. the key thing to focus on in your opinion as we move forward over the next quarter. what would it be? >> i think right now it's just to hold your position and buy on weakness. but i do agree with the comment on the dollar. there's a potential for a currency war growing. we have brazil in town visiting with obama and the discussion about countries will be compelled now to try to keep hair currencies low to boost their exports.
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so that would be what i'd want. >> absolutely. all right. thank you so much to margaret towel and also to kit jukes. it was a great show to have your insights. before we leave you, a programming note. stay tuned for the first interview with bubba watson fresh from his master's victory over the weekend. that's coming up at noon eastern on "power lunch." >> i did make the honest area call that phil mickelson was going to win. that wasn't too bad. if he hand found the stand, i would be all right. bell bubba is an amazing shot maker. he should brand market his drink. we'll say good-bye for "worldwide exchange." coming up next, "squawk box" with joe, becky and andrew. see you tomorrow.
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let's play ball. alcoa set to throw out the first pitch of earnings season today. china challenges a bigger than expected trade surplus. plus finding out where it all went wrong. that's been bernanke's goal. but the fed care man is warning new risks will emerge as the financial system evolves. it's tuesday, april 10th, 2012. squawk box begins right now. welcome so "squawk box." i'm andrew ross sorkin along with joe kernen and kelly evans. becky

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