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tv   Worldwide Exchange  CNBC  April 16, 2013 4:00am-6:00am EDT

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you're watching "worldwide exchange." i'm ross westgate. >> and i'm kelly evans. these are your headlines from around the world the. >> the toll rises from monday's bomb blast in boston. three dead, more than 140 injured. the president vows to bring those responsible to justice for the incident. the u.s. is treating it as an act of terrorism. gold is stabilizing this morning after suffering the biggest one-day sell off since 1980. atop the french market with strong growth leads to higher
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than expected q1 is sales. the group's fashion and leather business. and softbank shares tumbling 7% as the japanese telco giant defends its spring bid in the wake of a rival offer. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. all right. warm welcome to today's edition of "worldwide exchange." >> that's right. three people are dead and more than 140 injured after two explosive devices went off near the finish line of the boston marathon yesterday. nbc's katie davis joins us now with the latest from the scene. >> this is the scene as it happened. four hours into the race, two explosives detonated near the finish of the boston marathon. >> it was loud. it was really, really loud and
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then chaos everywhere. >> the devices exploding 12 seconds apart, sending shrapnel into the crowd. >> these explosions occurred 50 to 100 yards apart and each scene resulted in multiple casualties. today was patriots day in boston, a holiday in this city when the annual boston marathon is run. the governor told shaken residents to remain calm and vigilant. >> this whole community has been dealing with a horrific event today. two explosions on boylston street. >> witnesses say they saw victims who lost limbs. today it was announced the fbi is taking the lead in the investigation. >> it is a criminal investigation that has the potential -- is a potential terrorist investigation. >> addressing the nation, president obama vowed to bring anyone responsible to justice. >> we will find out who did this and we will hold them accountable. >> counterterrorism officials tell nbc news that multiple explosive devices were found at
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the scene. security remains tight in and around boston. residents being told to expect a continued heightened law enforcement presence as the city tries to come to grips with a violent attack in the heart of boston. and that was katie davis there with that report. now london's metropolitan police are reviewing security plans for this sunday's marathon after the explosion in boston. the minister told bbc the best way to show solidarity with boston is to continue the race as the french president has stepped up security around public buildings in this country and raised the threat level to red. speaking earlier, it was said the long lasting impact of terrorist attacks are low. >> research into terrorist incidents over many, many years, their economic impact, their direct economic impact tends to be very, very small, indeed. a lot of good research done on this in israel.
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what i would say is yes, of course, very often the economic cost is largely in how we react. what new measures are put in place to counter this sort of thing often i'm afraid a certain amount of closing the stable door after the horse has bolted. i'm afraid we live in a world where terrorism incidents are always likely to occur. they're always going to take us by surprise. if they weren't taking us by surprise, they wouldn't happen. we did see markets in the u.s. taking a leg down yesterday. as alistair indicated, it's not usually the market reaction that shows much of an impact. >> no. because of the economic impact. yeah. there's just not much to say about it. the real question here becomes, again, there's very much information about this incident. it's unusual because there have been no -- nothing has been nailed to news agencies, none of the kinds of behavior we've seen in the past when it's a lone
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individual or even an organization that would come forward and claim credit. a friend of mine, as you know, is here in town visiting. she was in boston. and it was this time last year that i was visiting her and they always, on patriots day run the boston marathon. the boston marathon is not just a marathon that has to be in boston, it's the premier sporting event for the running community. >> in fact, people do the double, some do boston and london. >> but qualifying for boston i a huge deal and there'sen participants. there events happening in and around boston, as well, on patriots day. >> the thing about marathons, as well, is actually the american marathons are a unity event. companies get involved, donate a lot of money. it is one of those events for the greater good. >> it's not the kind of event that you would think would typically attract -- it's not a
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shopping center, it's not the capitalistic enterprise. again, still very little information. and the timing is 26.2, but the timing, as well, coming when the bulk of people, a little over four hours into the event would have been finishing suggests, again, a high degree of forward planning. but, again, we do not know the details yet. >> plenty more to come, though. we'll be in boston, as well. also on today's show, we'll be on the ground in soeul. north korea is making new threats to on the day of its founder's birth. we're previewing numbers with u.s. equity strategy alicia sanchez at 11:20 cet. >> and we'll continue to keep you updated on the situation on the ground in boston. we'll hear from the former director of terrorism studies at west point. that's about 11:30 cet.
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meanwhile, we're just one hour and nearly seven minutes into the trading day in europe and we're down at the session low. once again, from the pools yesterday, decliners advance in by 8 to 1. not big falls yesterday for the european markets. the ftse off 0.6%. currently down that amount again. the xetra dax off 0.7%. it was off 0.4% yesterday. and the ibex, off 0.8% as well as the ftse mib. danone off 3.8% growth. different story in lvmh. this stock down 3.6%. q1 sales are slowing down. in fact, they've showed the weakest quarterly sales growth for the company since 2009. as far as bond markets are concerned, we'll show you where
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we stand on that. we've just got a t-bill auction out of spain today. yields in italy lower. on the currency markets, the aussie/dollar, we got down to 10291. it's all about commodities. let's show you where we stand the with commodities. spot gold, 137111. the biggest two-day fall in 30 years for gold. remember, in new york for the june delivery, we got up to 1355. october rebounding, 2319. brent is weaker again, but below 11 100. 99.41. nymex is down, 87.52.
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that's where we stand right now in europe. let's get over to singapore. sixuan joins us for the update on the trading there today. hi, sixuan. >> thank you, ross. the shanghai composite turned positive in the afternoon session, ending higher by 0.6%. that is as a small rally and property developers and nonbank financials offis he the losses in commodity counters. meanwhile, weakness in mainland oil and power majors dragged the hang seng lower by 0.5%. lenovo shares added 1.9% on rumors of a new release tomorrow. miners lost seam. softbank tanked 7% today after a
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competing bid for sprint/nextel was announced. elsewhere, seoul shares managed to end in the green after the new government unveiled a modest stimulus spending plan. decreean telcos extended yesterday's rally ahead of preorders of the latest samsung galaxy s4 smartphone starting this friday. in australia, the asx 200 lost 0.34% after yesterday's sell-off. crude prices sharing india's accept sex gaining a strong 1. % at the moment because the country is a big importer for both commodities. back to you. >> sixuan, thanks for that. so we've been looking at the price of gold. it's leveled off above the 1350 mark following yesterday's sharp sell-off. the $125 decline, the second biggest daily fall on record.
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the metal down now 20% on an official bear market construction and follows 12 years of consecutive gains. last night, the chicago america tile exchange raised its gold level. investors are looking to see whether gold will hold a key 11,200. joining us now, mark tyche. ross, how would you describe the move? have we seen liquidation of major long positions as well as people now shorting? >> more the latter than the former, really. the nature of the selling is not an exit by investors. it's more a case of speculators shorting the market.
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that's not an investors market. that's a speculators market. and i think they were aiming for certain important technical figures, which when hit would cascade the market lower. >> it's breaking the pound or something. >> exactly right. so we saw that again on yesterday's trading. so the narrative of the investors getting disenchanced with gold is not something i recognize. it's one more of a shorting of the market. >> are they hoping, the short sellers, to persuade or encourage them to drive the prices lower? >> absolutely. that's how you make the money by getting others to join your cause to send the markets lower. to a modest extent, they've been successful. there's been some selling on the etfs. >> spider gold. >> we saw 400 tons of selling on
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friday. in the terms of scale, it's still a fairly large number. but by and large, the investors are holding tight. the shorts are shorting the market. now you have a polarized market where you have a large number of on longs and a large number of shorts. they can't both by right. >> martin, do you agree the gold market, is it that easy to push around? >> well, i do absolutely agree. it's basically speculators in the paper market that have driven down the price and they try to create havoc in the market to know where the stop losses are from technical traders and try to hammer through to cause the market -- i would go one step further, though. there have been suggestions that to less than the government itself has been supporting or has been behind this scheme. they are apparently trying to prevent investors from exiting the u.s. dollar currency, the bond market tool prevent yields
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tr rising. the debt problem hasn't improved at all in the united states and the same in the eurozone. it seems that just before the gold price has been increasing and the appetite in the fiscal market for gold for investors, as angela merkel was saying, any deposits in the eurozone, including germany, there's no have started to look seriously longer any form of protection pore those and a lot of people whether it's better to take all the money from the bank and then what to do with it and one of the options is obviously gold. so they try to give the impression that gold is no longer -- scare people, but what you should do in this environment is don't get distracted from there, don't go for fear. >> ross, if what you're saying suggests, perhaps, gold still is a safe haven, why do you think so? >> let me qualify that. it's an imperfect safe haven. it's an imperfect safe haven, particularly in the short run. >> against what?
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>> against financial meltdown or inflation or politicians not doing what they should do, in that case. so it's an insurance plan, if you like. >> is the reason we have this down move is because people are now -- is the gold pricing in the fact we're not going to get more qe out of -- >> it may be. and it's part of the story dwr the shorts have hit gold is not because of what has happened, but because of what hasn't happened. we haven't had hyper inflation. we didn't have the euro collapse. certain things didn't happen. i think that would have aggravated the gold market. fundamentally, it still remains in the short-term a long haven and imperfect. >> if nvs the kind of move, you know, that indicated that if gold were going to respond to more quantitative easing, then yesterday with the growth we saw, if anything, it should have
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kept a floor beneath the price. that would suggest gold is not responding to these moves or perhaps there's a liquidity situation out there. >> in short, we'll always be an imperfect hedge gold. in the long run, gold has supported itself very well. it's performed very strongly. it's worth pointing out that the current gold price, a significant part of gold production now is being made at a loss so these levels can't be sustained forever. >> okay. we'll leave it there. thanks very much. martin will stay with us. >> mean while, the super cycle in commodities has come to an end according to citi. it downgraded several stocks on monday. find out why on also on the site, one analyst says why he thinks we could see gold at 1200 in a few weeks. isn't that where we are now? >> not far from it. >> what do you think, will gold fall to 1200? go to our website and give your
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opinion,, and follow us on twitter, @cnbcwex. also, let us know if you think this is now an opportunity to buy gold, as martin thinks, or whether you should -- we were asking this question yesterday, whether you think you should get out. e-mail us or tweet us directly. north korea has issued fresh military threats today after celebrating the anniversary of its founder's birth. continuing the standoff over its nuclear program, pyongyang gave an ultimatum to south korea. jim maseda joins us from seoul. hi, jim. >> reporter: hi, kelly. well, the past 24 hours have been a pretty good example of the unpredictability of kim junk union and his scene. after all of those signals, it turned out to be a very quiet
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day in north korea, focused entirely on those celebrations around founding father kim jong il's birthday. but then last night, there was a sudden new threat from the north korean military, which said it would strike south korea without warning if there were another anti-north protest in the south. so this was in reaction to a very small demonstration yesterday here in downtown seoul where a couple of effigies of kim jong un were burned. in the same message, he said the south must apologize for its undig phied acts before talks could happen. despite the angry ultimatum, there does seem to be a shift now towards what they call offramping or tamping down the volume and talking rather than confrontation. that said, those two medium
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range missiles are reportedly on their launchers in the eastern part of north korea ready to be fired. the south is maintaining a threat level just below all-out war and always unpredictable kim could give the orders to launch in the days or weeks ahead when it's much less anticipated. there was a reminder today of the dangerous environment that u.s. troops operate on here every day. a u.s. marine helicopter crash landed this morning during a routine operation along the border with north korea. it was a hard landing. it triggered a fire. luckily all 21 mariness on board escaped with minor injury. >> jim, thanks very much. and just a softbank could see the finish line, plenty more to come on "worldwide exchange." the rates of sprint now on. we'll bring you the latest on the $25 billion bid fortover.
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on budget and on time, rio tinto says it's on track to expand iron ore output to 390 million tons this year under its
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$90 million project. the company is making good progress in its cost cutting drive, coping with the sharp fall in commodity demand. shares are higher this morning 1.74%. i want to get a thought here from martin hennecke. martin, what do you do with iron ore here despite the declines we've seen across the board for the commodity complex? >> it's a great time to manipulate because it has been monolithic growth on those metals and you see the physical buyers really moving in very strongly, for example, in china there because of, really, jewelry sales and it's taking
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off these days. that's vary clear buy. iron ore, the picture is somewhat more difficult. on the one hand, you have still reasonably strong economic numbers out from china, although they've weakened a bit. we are relatively optimistic about china and a number of other emerging markets, relative to the rest. and inflation, if inflation was going to increase dramatically, which is still expected going forward, is the qe policies need to continue if only to prevent the debt meltdown of countries because the debt is still uncontrollable. now for iron ore very specifically, though, there are a number of downside factors. china itself has been ramping up production as have a large number of miners, the big three miners are said to have increased production of a hundred tons alone. and if you look at all the miners across the board, that picture is about 300 tons increase and china alone can buy
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up all of debt at the time when the other western economies are not looking good at all and many of them are in contraction. so it's a bit of a mixed picture. we're not that certain. investors have money to allocate to right now go for gold and silver first before looking at other commodities, except, perhaps, natural gas equities and they're extremely trading, many of them trading well below book values. that's another dpesed opportunity. >> always good to have you on. martin hennecke, associate director at type. shares of softbank after someone made a competing bid for sprint. but softbank remains determined says it is still the best on the table. fashuiko has the story for us
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from tokyo. >> hi, ross. dish may be giving them a run for their hone, but softbank is still confident of its $20 billion bid for strength. softbank said its choice to invest in sprint is superior to the offer made by dish. it expects to close the deal on july 1st with its original plan. softbank's $20 billion deal to acquire 70% of sprint reached agreement by the two companies in october and is now under review by the u.s. federal communications commission. becoming a global company is a long-time dream for softbank's ceo. the japanese mobile carrier sees acquiring sprint as crucial to gaining a foothold in the global market. many analysts think that the soft ddz bank ceo will not give up the deal, so its possible
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there could be way toes seal it. investors welcome the possibility of pushing up softbank's cost and the shares dropped 68% today. >> thanks for that. >> a big hit there for the company. still around. straight ahead on the show, spain looking to sell 45 billion euros in short dated paper. we'll bring you a preview when we come back.
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in boston, three dead and more than 140 injured. president obama vow toes bring those responsible to justice. gold is more stable after suffering the biggest one-day sell off since 1980. stocks are down ahead of germany's zew release. atop the french market, danone has higher than expected sales in q1. >> but lvmh is dropping as january to march numbers showing weakness in the group's fashion and leather business. >> all right. uk march inflation is held to its highest level since may
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2012. cpi, the annual rate at 2.8%. the month on month in march points three is forecast at 4.7 in february. core cpi has picked up and a 4.2% the annual rate in february. rpi, which is what we take wages to, 3.3 the versus 3.2 in february and rpix, which used to be our old target, held steady at 3.2%, as well. the biggest contribution from books, newspapers and stationary. and the downward pressure from furniture, motor fuel and meat. >> books, newspapers and stationary. i think that would be news to the printing establishment that those prices are on the rebound. >> well, you know, there we go. what does that mean? does that mean anything for the bank of england, more qe?
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michael gallagher is director of research global. michael, as we expected, what is the inflation? are the banks moving away from caring about inflation? >> i think it does still care, but it's balancingel it a little bit more than the growth outlook. i think that's the key message that came out. that's the key action that we'll see from carney sort of going forward. we're a little bit in limbo at the moment, though. we're sort of not quite there to july the 1st and carney is taking the reigns of power. the market is debating whether we get 25 billion extra qe. it's a close call for the may meeting. markets probably looking up 40%. and that's probably sort of fair. whether we get it or we don't doesn't revolutionary change the uk. >> might we get more funding for lending? there's indications now the mortgage market is picking up a little bit. >> i think that is definitely coming, that we will get sort of a deepening and an extension of the funding for lending.
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and that is something that will be evident, but more likely to be announced come carney's leadership rather than in the may meeting. so i think we're in that little bit of limbo for uk markets and uk markets generally following the global trends. >> which is interesting because how vulnerable is sterling here in particular? there's a lot of concern about britain's exposure to commodities, for example, which had been hit hard. but sterling has held up well today and again it's roughly flat, 1.52, even. it's not necessarily consistent with what we've seen going out across the commodities complex. >> i think the early sell-off in sterling has been completed now. we're in a sell-off phase more generally. i think that the current phase is more likely to see some general risky assets hurt and that's more likely to hurt the euro rather than sterling. and the euro can backtrack somewhat further against the yen. we can see a move to 1.2360 on
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the euro/yen. sterling, a little bit out of the spotlight in this environment. >> and also it goes back to what is the macro picture for britain. how strong is the economy relative to the eurozone? and when we get data like this, it makes things sticky, certainly not going to spell relief from consumers. >> i think the uk picture is similar to the european picture in terms of growth, but with a little bit of extra growth. and, you know, as far as the bigger picture sort of is concerned, that isn't sufficiently differentiated compared to what you're seeing in the u.s. or asia. i think for the foreign exchange market, it's more a question of policy action. and now, because we're in this limbo, that leaves sterling a little bit of limbo. >> meanwhile, the treasury there is targeting sales of 4 to 5 billion sales in six-month and is 1-month t bills. yes, same with italian yields, as well, michael. are we now at the low point in
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the cycle for spanish and italian yields? who is going to drive them lower from here and why would you? >> i think the market has seen a lot of liquidity expansion. first from the fed and then lastly from the bank of japan. and combined with the renewed commitment from the ecb to protect the euro, this has depressed yields to these kind of levels. i think it's difficult to see us going dramatically further. and if anything, strategically, we think that the three major problems in europe, the recession, inconsistent crisis management and rising political and social backlash against austerity are likely to come through and that leaves spain and italy very vulnerable to a sharp increase in yields. we're looking, for example, for 10-year italian yields to be up to 6.75% by the autumn. >> wow. >> because we think we'll see a new phase in the crisis emerging
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once again. >> is that feeding out of or into the political situation in italy, if you know what i mean? >> it's feeding off a number of things. it's feeding off the italian situation and the prospect that we'll have ongoing political instability and at some stage this year that we'll have a second election. secondly that we'll have increasing political and social unrest in spain, which would cause major tensions. thirdly, that we've got inconsistent crisis management is being made on the hoop. northern european taxpayers don't want to pay as much as previously. and that means that somebody else has to be bailed in, whether that's slovenia or a second portuguese package. so all of these issues, we feel, will sort of combine in the summer to produce another crisis. >> and still there is some good news.
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greece could get back in growth next year. >> wishful thinking? >> do we listen to that forecast of -- i don't know. >> michael, thanks for now. european stocks are down on the session lows at the moment. off 0.6% on the ftse. 0.75 lower for the xetra dax, cac 40 and 0.8% off on the ftse mib. >> yesterday, the declines across the major indexes were almost exactly -- i mean, there wasn't much differentiation between the core and the periphery. >> over the biggest sector decliner, the ftse was in line with the others. >> exactly. now take a look at the bond space, as well. here is what the ten year is doing in italy. we're seeing a bit of a rally still in that debt, 4.3 %. the u.s. ten-year, which i think at a low of 1.68% yesterday is
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up a bit, 1.71. look at that ten-year bund yield, 1.25%. there are those that think maybe it could go lower. the german bund is probably one of the top ten performing assets of the year. extraordinary. >> i would believe that. you tell me that, i believe that. just a reminder, sterling barely moved on that inflation number. it was pretty much as expected. sterl/dollar, 1.5279. 99.95 on dollar/yen was the four-year low against the dollar. >> if you were long gold in yen terms, which i think was the gartman called -- long yen in gold terms, you would be doing quite well? here is what's happening with the gold spot right now, up 1 is.4%. this has been an extremely volatile one this morning, as well. we've seen it anywhere lower to up. jumping around 1.5% so it's certainly one to keep an eye on,
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trying to add about 20 bucks there. not seeing a rebound, michael, shaping up in crude. now we've got brent below the $100 mark. >> yeah, this move, we've had a guest on already. look at its traders. but what they're trading on the back of is a theory that we're not going to get any more qe out of the fed. it's go going to wind up at some point and it hasn't produced any inflation. >> i think if you look at what the fed are actually telling you, the fed are telling you that they're thinking of slowing down the pace of qe later in the year. and that's autumn or winter. in reality, that's not anytime soon. and even if they do actually slow down, they're only going to slow down from 85 billion a month to 70, 65 billion. so they're still going to be the largest buyer in the market. >> is that ben bernanke on the line now? >> who is that, plosser? >> sorry.
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>> from a market standpoint, you're still going to get the fed being the majority buyer in the market and that will mean that you get underlying support for asset prices. about probably safer asset prices. things like u.s. treasuries are going to continue to be very well supported. the european story that we talk about can actually prompt a shake out and a correction in riskier assets, not just in europe, but globally. >> if italian yields are back up to 3.6%, great calls, by the way, not that necessarily i agree with it, i just like the thought of making calls. will that support gold? >> gold i think is a little bit more tricky in this kind of environment. because the shake out that we've seen will sort of dent sentiment on a multi month basis going forward. so i think we sort of tend to prefer things such as bunds where we see 10-year bund yields
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coming down to below 1 is% in the next six months. treasuries where we sort of see this combined with the continued fed qe purchases producing a move down to 11 is.3% yield. so i think those are the kind of clearer plays that exit in this type of environment. and just talk about spanish bond markets. six-month t bill, it's 0.82 on march 12th. i'm looking for the 12-month yield. 1.274, 1.4%, so t-bill is still coming lower, michael. >> that very much reflects current market conditions and the liquidity phase that we've been in in global markets. this can probably carry for another week or two, but then i think increasingly as we sort of get into the spring and see the economic data continue to remain completely stuck in recession for europe, questions are going to start to be raised and i think that that's when we start
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to see momentum being lost and we start to see a turn. >> the interesting thing about the european discussion is -- i mean, you talk about austerity and clashes in the -- in spain, of course, it's the increasingly with the election coming into focus in germany, we now have the anti-euro party in germany has 3% of the vote. they think they'll get more support. is that clash going to grow? is that what's lead to go dysfunctional on the policy making? >> i think the problem is that germany is quite cautious ahead of the election. it doesn't want to take any big sort of gamble. so it will do whatever is necessary to avoid a disaster. but it's not going to be proactive. so the body language sort of coming out of the eurozone finance minister's meeting was no sort of real fast track in terms of institution building. come to crisis management, we'll have a look at bailing in sort of critters as need be.
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it was probably a mistake to even discuss insured depositors, but they haven't ruled out depositors over 1100,000 in any future sort of bailout. and i think northern european taxpayers are saying, we just can't keep on funding all the time and that caution in germany is adding to that in terms of the kind of crisis management response. which overall is -- >> how about standing up and tell them, if you want to keep the euro, you are going to fund it one way or the other? >> well, not necessarily. the northern european view is that, you know, partly we need to involve the critters. we've got visit countries -- >> no, i know, but the reality is the ones with the money will pay. michael, thanks for joining us. shares in lvmh are down almost 4% after the company posted less than 1% revenue growth in its fashion and leather goods division. it's down from 9% growth in the same quarter last year.
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following the story, stephane joins us from paris. stephane, is there a sense that there's lagging demand from europe, from china? who is not buying these leather goods any more? >> in europe, it's not new. the country is facing the economic slowdown. but at the self glance this morning, revenue up 7% on the first quarter on a like for like basis. but if you read between the lines, actually, the main component of the earnings or the revenue, the luxury, the fashion division was weaker than expected in the first quarter. organic growth, 33%. the average forecast was 5% on that period. and that was the weakest in the fashion and is leather division since 2009. in response to the weakening growth, lvmh has announced it will do more to attract the high end of the market. that means more prominence for leather goods. it's not going to open as many
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stores as it was planning to preserve the exclusive side of the brand, make the product more up market. so that's the market. lvmh is the biggest decliner, down 3.9% right now because the market believes it could be the warning of a slowing trend in the luxury segment, which was really resilient so far to the economic slowdown. >> raising a lot of concern on that. stephane, thanks very much. meanwhile, the french government has published a rundown of assets held by minister necessary a bid to curve public outrage over the scandal involving the pormer budget minister and we gain trust in president hollande's government. there are 8 millionaires in the cabinet. is there a chance that this might back fire? i know in france there's sort of a strange relationship with wealth or knowing people are wealthy. >> especially when it comes from a socialist government. eight minister res millionaires, including the prime minister who
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claims that he enjoys going on holidays, doing camping. he could afford something more comfortable because he has a personal fortune of 1.5 million euro. he's not the richest one. the foreign minister is the one with the biggest level of assets. 6.5 million euros for its fortune. excludeing the art collection. yes, there's a risk that it could back fire because the announcement of this transparency process was made last week by the president francois hollande. he wants to avoid a stimulus scandal to the former budget minister who admitted that he had a secret bank account in switzerland. but it may not be the solution, because if he had to do the same thing, he wouldn't say probably that he had a bank account in switzerland. therefore, there's a question mark in france about this decision from francois hollande because it may not be the right solution. now, it could, of course, back fire during a time of austerity.
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saying that eight ministers are millionaire in this government. could be a problem. that being said, ross, i've got a survey from ifo published last sunday, 70% of french people say it would not be shocked to discover some great fortunes in the socialist government. >> this is a list of assets, right? presumably, if you have a property worth $1 million euros, that is included? >> it takes into account properties, yes. >> that's not hard, is it? >> properties, jewelry, not that much. >> yeah. i mean, you won't get much from euros in central london. >> would you be a millionaire? >> like i said, you don't get much for a million euros. anybody owning a property in london pretty much is going to be at that. >> the art collection, that's the important thing. >> the wine and the art, the classic cars. >> if you are a millionaire, then you could buy some leather goods or something luxury from
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lvmh and we can probably cover two stories in one. >> it's not cash. >> that seems somewhat low to me. thanks, stephane. we'll keep talking about the millionaires tax and more coming across europe if you listen to some of the chatter in markets. in any case, still ahead on the program, we will speak to the ceo. he'll talk about his plans for global growth and how ee raiders can compete against tablets. welcnew york state, where cutting taxes for families and businesses is our business. we've reduced taxes and lowered costs to save businesses more than two billion dollars to grow jobs, cut middle class income taxes to the lowest rate in sixty years, and we're creating tax free zones for business startups. the new new york is working creating tens of thousands of new businesses,
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at leave the three people have been dead and over 140 injured after two bombs explos at the boston marathon. chris joins us now. do we have any more understanding of who might be responsible? >> yeah. we haven't gotten that far as to who might be responsible, but there are certainly several avenues that we can see this investigation going into. for about seven hours overnight, investigators were seen at an apartment complex not very much
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from where i'm standing right now. investigators are gone in there. they were seen question ago couple of people in there and then early this morning, they were seen bringing out bags of evidence to their police cars. they did leave, however, without making any sort of arrests, it looks like. we've been told that police were investigating and talking to one of the apparent victims in the bombing where they were questioning this person. it seems like his information is checking out all right. right now, they're reluctant to say that he's either a person of interest or a suspect. but we know he has been questioned, a 20 yield student from here in the boston area. investigator ves told us they're looking for a couple of things right now. they're looking for a rental truck that tried to get into the area around the marathon finish line sometime before the race ended. he was turned away. now they're looking for that rental truck. also looking for somebody who was seen running from the scene in dark clothing wearing a hood. we're starting to see how this investigation is being pieced together as the moments continue
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to pass by. i'm sure we'll see a lot more as the day continues. >> thanks very much indeed for joining us. cobo has unveiled a new high definition model at the london book fair that offers more pixels than amazon's kindle. joining us now is the ceo of kobo, mike. >> should you be here for the london ebook fair or something? >> it's becoming that. four years ago, there was an area site of ebooks. today it's the story of the fair. >> show us your latest product. >> this is the new ereader, the kobo hd. it's the closest thing to reading real print on paper. >> here is the thing. i myself am not a big fan of ee readers. so i'm going to give it the old look test. it's got the page numbers on it. it is very easy to read, very easy to use, but is the moment for the ereader, has it passed?
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i think according to one of the trade firms, down almost 30% year on year. tablets can accomplish the job that any ereader can. >> what we're seeing is the contrary. this last december, we had sales of ee readers triple year over year. we saw growth over emerging markets. we launched in japan, brazil, south africa, around the world and ee readers continue to grow. customers use both. they use ee readers when they want to dive into that next grad great read. they use their tablets for e-mailing, when they want to dive into that book. what about the investment here, how has that transformed your company which is a canadian company and what's next? >> we've accelerated since rack 10 invested. we were doubling year over year. we're now tripling year into year. >> is that because you're inv t investing into new markets? you're moving towards a more multi function device. >> it's both the growth and new
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markets as well as growth in new categories and something that we've always had in our corner is that we have the most passionate book lovers because we partner with bookstores like smiths here in the uk, bookstores around the world. so we get the people that love to read ask buy a ton of books worldwide. >> are you going to develop a more tablet like device? kindle with doing it. are you doing the same thing? >> we are absolutely doing the same thim thing. we have our kobo art tablet, which has the best screen for a seven-inch screen on the market. last night we announced new magazines, kits, comics, new color content categories and we'll continue to innovate in the space. >> what do you think a potential business will be on that as opposed to an original ereader. >> we see room for both in the markets. certain customer segments want to dive into their latest
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fiction novel. some want a multi function device where they can do everything. >> just wondering by region what the hottest part of the world is right now for reading device peps. >> really, this whole phenomenon started in the u.s. and started coming into the uk and europe. europe is last year's big growth story for us. it's going to continue this year. we launched in japan last year. we're excited about india and china. in india, you've got a billion potential readers and like what happened where they skipped into mobile from not really having a landline infrastructure, there's really not a big fiscal book infrastructure there. so digital is going to help them reach more readers than ever before. >> it would be great if it meant more people reading books than ever before. mike, thanks very much. >> between that and, you know, trying to get after -- you're going to be a busy guy. >> very busy. >> you can't have too many eggs
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in different baskets. >> no. still on the agenda tomorrow, we're expecting more updates from big minersous of australia. and we've got third quarter numbers from hgl technologies. producer inflation data coming out of south korea. >> earlier, we asked is the dip in gold prices an opportunity to buy the pressure metal or are the freeing the market? aaron in chicago tweeted in to say, gold bugs are forever. i'm not sure that's an answer. >> that's for christmas. >>. >> here is another one, i can't think of anything in recent history that's so silly and stupid, full of hype and baloney. continue to send us your thoughts.
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welcome back to "worldwide exchange." i'm kelly evans. >> and i'm ross westgate. a reminder of your headlines from today around the world. >> the toll rises from monday's bomb blast in boston. three dead and more than 140 injured. president obama vows to bring those to justice. gold stabilizes after suffering the biggest one-day sell off since 1980. stocks fall with zew figures hitting the wires right now. madrid selling just over 5 billion euros at its lowest yield in three years. and softbank shares tumbled
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in three years. it suspends its bid in the wake of dish network's rival offer. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. >> all right. we've got a little bit of news out for the zew. the euro declining after this. the current conditions -- or the expectations, economic expect ages, 36.3. it was 48.5 in march. current conditions, 9.2 versus 13.6 in march. the decliners of the zew indicate consistent with poor data. >> much weaker than expected. we were expect ago drop by about 6 points and say we got a drop of about 12 points. about twice as bad as expected. >> bear in mind, it is the zew is a snapshot investor. it's an investor survey so it mirrors how investors are feeling. >> although i have to say in the last couple of months, we often
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see the zew confirmed by the ifo index when that's out a couple of days later. the question is really whether this becomes whether the sentiment indications point towards further weakness and equities. >> it has taken the euro down to a fresh low on the back of that zew survey. turning now to boston where three people are dead and more than 140 injured after two explosive devices went off just seconds apart near the finish line of the boston marathon monday afternoon. area hospitals say at least 17 of toss injuries are critical. sk scott is on the ground in boston and joins us now with the latest. good to see you this morning. the biggest questions remain as to who is responsible. is there anything that we've learned? >> there's actually more questions than answers still at this point, kelly. and you know in this age of twitter and tablets, the morning
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papers are still the historic record here and they are just out in boston now. i can show you the headlines, "terror at the finish line" in the "boston herald." these articles are accompanied by pictures of a dprizly scene yet after the first finishers crossed the scene at the boston marathon. a scene that's about two blocks away from here. and just the scene of real terror. as you said, 140 people injured, many of them seriously. three people dead, including an 8-year-old child. as i said, more questions than answers at this point from the authorities. they are saying that they are on the lookout for a couple of things. a man seen in dark clothing near the site of the explosion yesterday and a rental truck that apparently tried to get into the area toward the end of the race but was turned away.
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we don't know exactly what the connections are and we're several hours away from the next police briefing. authorities converged on an apartment building in suburban boston in ra veef, massachusetts. but we do not know what connection if any there was to the horrific incident yesterday. they were seen carting away bags of what could potentially be evidence, but no arrests according to reports at the scene. kelly, ross. >> thanks very much, scott. scott will be following that for us all day in boston. the fbi has taken the lead on the investigation, but authorities have shed no light on a possible motive and there are no suspects in custody. aman is in washington following the heightened security measures being put in place. wa can you tell us? >> you're right, kelly, the fbi has taken over this investigation. we're expecting at 9:30 this morning the fbi will have a briefing for the media and give us more detail on what they have found overnight so far. but as of now, no real new information on who may have done
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this, except for this, nbc news got a statement from the pakistani taliban, who are denying any responsibility as part of this attack at this point. we haven't had anybody taking credit so far for this attack, but the pakistani taliban telling nbc that they deny responsibility for the attack in boston. the united states navy is sending an explosive ordinance team to boston to assist in some of the wreckage there to figure out wa this can about the forensics on this attack. throughout the country, we'll see increased security at major eventes and major data points. here in d.c., they have the emancipation day parade. officials here in washington said that parade will go forward, but it will be met with increased security, security that you can see and security they say that you cannot see. and within a couple of hours of the attacks yesterday, president barack obama addressed the
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nation from the white house. he told people that he would track down who was responsible for this. but he said to be careful not to jump to conclusions about who was behind this attack. >> we will find out who did this, we will find out why they did this. any responsible individuals, any responsible groups will feel the full weight of justice. >> and the president promised the full resources of the federal government would be put behind this investigation. so far, though, guys, leads seem to be few and far between, at least as are being publicly disclosed at this point. but you can imagine a massive federal response is under way. back to you. >> aman, thanks very much for that. turning our attention to the market this morning, we're getting news out of goldman sachs. the firm defending its views, ross, generally speaking with the result of the prices they have seen. >> they have lowered that gold forecast last week, haven't they? >> now they're lowering their stock loss targets, as well,
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saying, of course, that there are now significant head winds to its near term price targets for crude. it's before the 110 brent call and for copper, as well, but sticking by them. they also by the way are raising questions as to whether natural gas may be the new safe haven. >> the mentals complex is likely close to a bottom than oil is what they're saying. at some point, do you have to -- the market goes against you, do you have to say, maybe our call is not -- >> when the facts change, your mind changes. >> when the facts change, i reserve the right to change my mind. >> and the market is consistent with wa they're saying this morning. we're seeing further weakness in brent and nymex. a little stabilization in gold and some of the other meltings the. >> according to citi, they've downgraded several mining stocks. also on the website, one person tells us why he thinks we can
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see gold at just over $1200 in just a few weeks. what do you think, will gold be down at 1200? it's not a huge way to go from here. go to our website to give your opinion at follow us on twitter@cnbcwe can say. >> right now, let's bringing you up to speed with where we stand with asset prices. >> looking for the dow to shed -- or to add something in the range of 30 points this morning. small rebounds taking shape for the in addition dak and is for the s&p 500. 15 49 is the level for the s&p. we're just about the 14,500 mark for the dow. of course we had a really weak session yesterday, especially at the end of the day when the explosion at the boston marathon hit. this morning, a little bit of a rebound. not the case for oil. perhaps giving a pause to the extent investors want to see a turn around today. weakness coordinated a across
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most of these major markets. nevertheless, tin decks generally down 0.6%, same for the xetra dax. the cac 40, one of the weakest performers of the morning, ibex 35, too. this is the kind of activity that we saw yesterday where it was bigger declines in the range of 1%. >> show you where we stand, we had yields lower again at a t-bill auction for spain. italian yields are lower on the day, 4.31 is 9%. slightly higher across the board. extremely low for 10-year bonds. on the currency markets, let's show you where we stand with aussie/dollar, 103.50 at the moment. just up to 0.3%. broent, 99.62. it's the lowest sings july last
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year. let's recap that spot price. slightly higher, 23.39. the biggest two-day fall we've seen in years in gold. that's where we stand right now in europe. sixuan has the recap of the asian trading day for us out of singapore. sixuan. >> thank you, ross. asian markets kicked off the day on a sour note, but most managed to pair their losses by the end of the trading day. the shanghai composite turned positive in the afternoon session, ending higher by 0.6%. this as a small rally in property developers and nonbank financials offset losses in commodity counters. meanwhile, weakness in mainland oil and power majors dragged the hang seng lower by 0.5%. lenovo shares added the 2% today ahead of the rumored laushing dates for its latest smartphone tomorrow. japan's nikkei 225 slipped 0.44% on concerns about global growth. and news of the boston bombings
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not helping, either. dish network announced a $25 billion competing bid for sprin sprint/nextel. in australia, the commodity heavy asx 200 lost 0.4%. gold, in fact, recovered in asian trading today, but that didn't stop gold liner newcrest from losing 5% of its value. weak gold and crude prices lifting india's sensex higher by almost 2% because the country is a big importer for both commodities and a lower current account deficit will leave the rbi more room to cut interest rates. back to you. >> sixuan, thank you very much indeed for that. lower oil and gold boosting the inn market.
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>> precisely and significantly. there wasn't much else throwing life into the market. >> there's always a different correlation somewhere. >> a silver lining? maybe. the dow s&p 500 and nasdaq tumbled to their lowest levels yesterday since november. joining us now, gina sanchez. welcome. >> hi. >> so is this it, is this a buying opportunity? do you look at all the declines that we've seen and decide that this is now a pivot point? >> well, i've been calling for consolidation sometime, you know, generally around april is when you start to see a consolidation and then you sell in may and go away. i actually think that is probably going to be what it's going to work out to. obviously, we're getting the signals that have been driving some of this consolidation have been growth. obviously, the bad news at the end of the day with what happened in boston, that wasn't what was driving the markets. what was driving the markets was that china was we advising down their estimates for growth and that has an enormous impact on sentiment. >> so you think there's more
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weakness to come, then? >> probably, yes. we're seeing a slowdown. if you think about what's happening in the u.s., the u.s. has yet to see the real impact of the payroll cut. that was a delayed effect. yet if you look at analyst expect ages for earnings, they're expecting minus 0.3% loss in q1 and then, you know, you start to see gains of expectations that are at 10% to 14% for qthe 3 and q4. that doesn't jive with what's happening in growth. >> almost a return for a second to what we're seeing in oil across a lot of the commodities. certainly a cautionary sign. it's interesting that for as much as the tension of gold has gotten, it hasn't just been gold. whether it's gold, whether it's iron ore that we were discussing earlier, silver taking it on the chin. >> and i think also a place where we haven't seen it is in
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the industrial metals, there's significant weakness in some of the industrial metals that hasn't been taken into the price yet. so there's more room for downward price movement there, as well. >> all right. nice to have you on. stay with us. more to come. the flood of u.s. earnings continues. goldman sachs reporting before the closing bell today. will it be able to match citi's successful figures yesterday? we'll go through that with gina in just a few moments. acceler-rental.
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a flood of u.s. earnings had it weekend, hoping to mirror citigro citigroup's successful supporters. we'll hear numbers from coca-cola and j&j before the bell. after the close, then we turn to intel and yahoo!. gina, a ton happening. any in particular that you are watching today? >> i'm curious to see what happens with coca-cola. obviously, the expectations, the consensus is 45 cents per share. whisper number is 47 cents. but it's interesting, that comes at a time when coca-cola has been giving negative guidance and softer guidance and analysts have been revising down their estimates. the consensus estimate has lost two cents in the last two months. >> is that indicative in some
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ways? >> obviously, what the corporate guidance has been talking about has been the slowing growth environment and how that is going to have an impact on coca-cola. so it isn't kind of an issue of coca-cola's competitiveness. it's something that would affect mcdonald's and other large internationally exposed -- >> you know, there have been people saying that they would like consumer stocks here because of what we've seen in the declines in oil, for example, that it will help discretionary spending cuts. the trouble is, these companies, a name like coca cola, as well, the valuation are not cheap. >> no. and coca-cola has another challenge, too, which is that coca-cola has seen a trend we've seen across beverages, which is that we've seen a decline in carbonated sales and a rise in still sales and that's a place where coca-cola doesn't have an obvious brand leader and that's a challenge for them. but coca-cola as a safe haven stock is still probably one of the strongest stocks out there. it has a 2.7% dividend yield that is pretty healthy.
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it's one of the best out there. and they operate in every country in the world except cuba and north korea. >>. >> what douveng of the earnings season so far? >> you know, i think the earnings soap, obviously, there's still heightened expectations that we're in a recovery and everything should be okay and we're probably going to see a ratcheting down of expectations. i mentioned earlier, analysts are right now calling for a negative on 0.3% earnings growth in q1. but somehow, that's all going to turn around. but q2, it will be 4.7. by q4, it will be 14, 14.7. that's pretty healthy. >> yeah. so if you don't buy that, perhaps you don't buy the market here. >> exactly. >> that if s if earnings matter. i would argue they haven't quite so much. >> there's rerating. >> and corporate buybacks, as well. >> if you think about what the news is and the cass list are in the market, we know a lot of the
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downside catalyst that come from the policy space. if you're looking for positive or negative news, it's what comes out of the corporate market. so i'd say earnings are probably going matter a lot. >> if you don't like commodities or you don't like bonds, i mean, there's a lot of asset classes here that a lot of people don't like. equities comes out de facto, maybe. >> right. and my view is that there's general lay positive drift. right now, the sentiment is fairly positive in equities. except we are at a point when naturally the market tends to consolidate and we're getting a whole lot of data that supports that. >> the fourth year in a row. a spring swoon. gina, good to see you. thanks so much for that karm and founder of chan at this co. we wish you well with that business. three people is have died and more than 140 left injured
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after yesterday's explosions in boston. >> gold is back after suffering the biggest one-day sell off in nearly 20 years. and softbank shares take a dive after dish makes a competing offer for sprint. and still ahead on the show, cyber crime shows no signs of stopping. we'll speak with symantec's chief to find out where the risks lie. welcome to the new new york state, where cutting taxes for families and businesses is our business. we've reduced taxes and lowered costs to save businesses more than two billion dollars to grow jobs, cut middle class income taxes to the lowest rate in sixty years, and we're creating tax free zones for business startups. the new new york is working creating tens of thousands of new businesses, and we're just getting started. to grow or start your business visit
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all right. after the falls we saw yesterday, right now we are called higher for the u.s. markets at the open. the fass dak up 6 of points, dow jones up 40 points and the s&p up 3 points. yesterday, the dow down 1.8% and the s&p down 2.3%. it was the worst individual day that wee seen for u.s. markets since november. >> and we have word out of moody's saying it has affirmed china's government bond rating of aa3 but cut the outlook from stable to positive. but this follow tess move from fitch, which i believe was last week and they cut the country's credit rating, as well. look for an impact there across the markets. yesterday's tragic events in boston led to severe cell phone service disruptions, prompting speculation over mobile security after early reports that concerns over a remote debt
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nation of an explosion. these reports were soon after denied. but it does highlight increased concerns over mobile security as cyber criminals move away from the web and towards mobile. that's according to symantec's latest internet security reports. joining us to talk about it now is steven trilling. thank you very much for your time this morning. look, what happened in boston yesterday, can you talk about the vulnerabilities in mobile networks? >> yeah. certainly, mobile networkes and mobile devices are the next frontier for targeted attacks. certainly the amount of malicious software we're seeing on these devices is very small compared to what we see on traditional laptops and desktops, but it's growing rapidly. we saw an increase in what we call malicious mobile software more than 50% in just the last year. certainly that is the next frontier for these attackers. >> steven, is it easier to hack or disrupt mobile networks than
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it is traditional fixed lines? >> i wouldn't say it's easier. i think it's different. i think the challenges are different. and it's still early in that world. i think that how it eventually plays out in the mobile world is still yet to be seen. but just to give one example of something that would be interesting to an attacker, something you can do potentially when you attack a mobile phone is to know exactly where your victim is at all times. so that's the sort of thing that an attacker may want to know and may likely take advantage of in these next wave of attacks. >> yes. the location tracking, location based services are the ones that are most vulnerable. it will have a vulnerability that might be exploited. >> yeah. well, the fact that on a mobile device there is software that will tell you at any time where that device is and so where the person holding that device is is something that an attacker can
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take advantage of. it's not the same sort of thing you could get from attacking a pc. that's the new element that comes in with attacking mobile. >> what one -- generally in terms of security, you know, web security right now, what is happening to the business? what's the -- you know, you talk about obviously we're going to get the growth in mobile, but where is the focus and what is happening to the business generally in terms of money being spent on it? >> right. so we saw actually a 42% increase in targeted attacks last year. and what's particularly striking is that there was a 3x increase in attacks on small businesses, businesses less than 1500 employeeses. this is in part because those small companies tend to have less security personnel that can make sure they're locked down. but it's also because attackers are moving up the supply chain. in many cases, attackers are looking to attack much larger companies and the way they're
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gathering information and intelligence about those larger companies is by going after the smaller companies that are doing business with them, getting that information and then going after the larger companies as their final target. >> all right. steven, good to see you today. thanks so much for joining us, steven trilling, joining us from symantec. still to come on today's show -- >> gold has rebounded slightly. is it time to buy or sell? bank of america's merrill lynch's neal curly will join us to talk about key levels to watch. we'll be right back.
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welcome back to "worldwide exchange." i'm kelly evans. and i'm ross westgate. >> the toll rises from monday's bomb blast in boston. three dead, more than 140 injured. president obama vowing to bring those responsible to justice for the incident that u.s. authorities are treating as an act of terrorism. gold stabilizes after suffering the biggest one-day sell off since 1980. stocks fall and germany's zew index suggesting sentiment is weaker than we expect approximated. and spain's t-bill auction not impacted by market jitters. madrid just over 5 billion euros in three years. softbank defending i ining
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for sprint in the wake of dish's offer. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. for the latest out of boston this morning, as we said, three people are dead, more than 140 are injured after two explosive devices went off just seconds apart near the finish line of the boston marathon monday afternoon. area hospitals say at least 17 of those injuries are critical. counterterrorism officials tell nbc news other devices were found at the scene, but safely disarmed. the fbi has taken the lead on the investigation, but authorities have shed no light on a possible motive and there are no suspects in custody. white house officials say the attack is being treated as an act of terrorism. president obama is vowing to bring those responsible to justice. and speaking to nbc last night, former boston police chief bill bratton said one of the remarkable things about the
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explosion is they occurred in the highest security portion of the race. >> most of the security would be focused on the finish line area where the bombing occurred. that bombing occurred within 25 yards of the actual finish line. the bleachers, the finish line, so the terrible irony is that it occurred in the most secure portion of that 26-mile race. >> for more, we're now going to hear from james boris, director of security studies. thanks very much for calling in. look, what additional measures might we now expect at events like these? because this is the first time, at least in memory, that a marathon in particular has been targeted. >> well, whoever is responsible for this kind of attack clearly wanted the kind of media coverage that they got. so maybe we'll have some different kinds of media coverage. maybe the cameras won't be fix odd one particular point of the race so much that guarantees them this kind of coverage. >> well, the trouble, as know, if anything, given the likes of twitter, social media
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and the proliferation of media online, it's gone from text to picture to a video world, we know these events are only going to have more coverage going forward. in fact, it's probably not going to be just the finish lines, it might be the duration of the race. it's almost an inevitable part of the future of these events. >> i agree. especially these event that's have large gatherings of public audiences. >> yeah. and james, the fact that, you know, there's no group has claimed responsibility or individuals, does that tell us anything or not? >> well, in terms of the perpetrator, there's really kind of three streams of thought. if it's international, if it's inspired by an kraed or an affiliate group like al shabab, we have some history there. it could be a lone wolf who is just inspired the ideology or it could be a domestic inspired attack. if it's domestic inspired attack here in the u.s., i'm kind of leaning away from that because it's not a government facility.
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it's not an abortion clinic, it's not a courthouse. it's not the kind of facility that they've usually attacked in the past. because it's an indiscriminate target in this instance, i think this might be more internationally focused than domestic. >> presumably, we'll have to learn more from the sophistication or not of the devices that were set off. >> yes, exactly. there's full indicators about who is responsible. there's the tactics, the targets. there's been to claim of responsibility yet, which is kind of odd in my view. and then there's, you know, the usual arrests and confessions, as well. >> james, it is unusual that there hasn't been a claim of responsibility. as you say, just given your past experience, what does that point to? and how unusual is it that there hasn't been any motive, apparently? >> well, it's usually -- if it's a terrorist event, lead to some organized movement or network or group. there's usually a claim of responsibility relatively soon. they want to get ahead of the news coverage so that no other
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group tries to compete for attention regarding the attack. right now on the jihadist web forums, the al qaeda linked groups that have been talking about this, no one is claiming responsibilities. they're just trading photos and clips. usually if there's an kraed related attack, someone is going to claim it quite quickly. >> james, thanks for that. >> now, let's check in on markets which did take a leg lower yesterday after the boston bombings, but there were plenty of other things going on, as well. global growth concerns, for example, we're not seeing that much of a rebound shaping up across europe today, but the dow jones futures are trying to add something in the range of 50 points at the open. nasdaq and s&p pointed towards a similar rebound. we're not seeing it play out across crude oil and european markets which are deeply -- i should say broadly in the red if not deally.
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the ibex paring its losses. >> meanwhile, north korea has issued fresh threats concerning the standoff over its nuclear program. jim maseda joins us now from seoul. jim, just run us through the latest. >> hi, ross. first of all, a little bit of i think interesting perspective here. my colleague, richard engle, spoke with a u.s. official here this morning who says that his sense is that jim jong unis in charge now, fully in charge, and he's trying to figure out a way of offramping or de-escalating the tension whereby kim can do that without losing faith.
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the past 24 hours, after all those signals yesterday suggesting a missile launch, well, there wasn't one. then last night, a brand new threat saying it would strike south korea without warning if there were one more anti-north protest in the south. this, ross, was in reaction to a pretty small effigy burned. but in that same message, king jong went on to say that the south must apologize first for its so-called undig phied acts before talks could happen. so there seems, despite the angry ultimatum, there's a shift there of toward talking and away from the tension. now, this could mean a missile could still be launched. a nuclear test could still take place.
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the south is still maintaining a high threat level just below an all-out war. anything could happen, but the sense is it's moving away from confrontation. back to you, ross. >> jim,nk let's take a look at what's on the agenda today in the u.s. it's a busy day for earnings. we get march cpi at 8:30 a.m. eastern. same with march housing starts and building permits. at 9:15, we get march industrial production figures. as i said, we get lots of earnings. goldman sachs, coke, j&j, blackrock are among the companies reporting from the open. after the close, we'll turn to intel, csx and yahoo!. we'll be right back.
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welcome back to the program. a couple stories online to draw your attention to. the super cycle commodities has come to an end, at least according to researchers at citi. find out more on our website, also, one chartist tells us why he thinks we could see gold at just over $1200 an ounce in the nmt next couple of weeks. what do you think about where gold prices are headed? head to the website and cast your vote there. this morning, looks like a bit of a rebound shaping pup.
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>> no surprise after the biggest fall we've seen in nearly 30 years in gold. this is where but stand at the moment. you can see the price, 1385 on the spot price. it's worth pointing out in new york, of course, we got down to 1355.50 for june delivery. caution remaining, though, as investors continue, really, to worry about the health of the global economy. joining us now for more, our very own mary thompson. hi, mary. >> hey there, ross. of course, yesterday it was a stunning sell-off here in the u.s. both in the precious metals. the rest of the commodities complex and, of course, equities, commodities and stocks pulling back on concerns about growing global growth. as far as the appreciatus metal goes and the expectations, the near term is going to remain under control. as you were mentioning earlier, gold is up slightly this morning after posting its largest one-day dollar decline in yesterday's session and its largest two-day dollar decline
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of $203. a broad spectrum of factors said to be behind gold's decline to a nine. month although he. among the reasons, weak demand for the indian wedding season and physical inventories held by gold. etf suggesting, of course, retail interest in the metal is beginning to wane. of course, of course, a renewed interest in riskier higher yielding assets, including equities. now, that decline, attracting some who turned bearish on gold including bill gross. in a tweet, he said he would buy at these levels believing with all the central banks practicing easing monetary policy, the world eventually will be reflating. silver dropping 11% this morning, recovering a bit, as well. even as some sighted a renewed interest in riskier assets, as the reason for gold's decline, the stock market reporting its biggest decline of the year. that weak economic data out of china and home builder sentiment and manufacturing here in the u.s. behind the broad-based sell-off in u.s. equities. the concerns about china, of
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course, also spurring a decline in industrial metals, including copper and is oil, as well. of course, many traders saying the pullback in energy prices long overdue given the high inventories here in the u.s. and, of course, china's weaker outlook. as kelly noted earlier, goldman out defending a gold call babb on april 10th. right now saying the precious metal res closer to a bottom than the energy complex. goldman also, of course, becoming less optimistic about the energy complex. guys, back to you. >> great to see you this morning, mary thompson out of hq. for more, let's turn to neal curry. neal, thanks so much for joining us. look, i have to imagine the charts are just ugly. what do you think now happens with the gold price here? >> well, i think as you've highlig highlighted, we could see a bit of a consolidation and the bit of a bounce. but at this stage of the game, at least in the near term the medium term trends are still to the downside.
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still could see a push down to about is t 1300, 1260 zone before the next meaningful level of support tran expireses. that said, and to follow up i guess on that tweet that was mentioned earlier from bill gross, if you do take a step back and you look at what we've done from 1999 when this bull market began in gold, and obviously a very long-term bull market, it is still very much an ongoing bull trend. really, we need to make a move below the 1035, 1050 area before we can say this long-term trend has turned course. so at this stage in the game, for those who say, you know, that the long-term trend has turned, i'm a bit more skeptical the trend is -- the long-term trind is still to the topside. it doesn't mean we won't see further weakness over the next several weeks or months, but certainly from a long-term perspective, this is still very much a bull trend. >> just in terms of the weakness, you say actually the place to watch could be silver. explain that. >> yes. so there will -- especially when
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we were -- last week when we were start to go break down with gold taking out those year and a half range lows at the 1533/22 area, silver was still holding above its equivalent levels at that 26. when that broke, you saw a significant acceleration of the downside in precious in general. but also, silver tends to be high beta gold. when gold catches a cold, silver tends to catch pneumonia. so when it starts to you ever, you can see oftentimes gold come under pressure, as well. >> and what are the correlations here. what was interesting about the actions yesterday, it wasn't happening because people suddenly decided the global growth outlook was going to provide more quantitative easing or something like that. you could argue that perhaps if anything, we would have seen gold holed up better if the other industrial metals were selling off. what is it in your view that is driving these asset classes now? what is the new correlation in trade? >> well, witto gold correlations, it tends to be
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quite mixed, actually. historically, people think of gold as a safe haven asset and in certain instances, it can act as a safe haven. but that correlation goes back and forth and, in fact, really since we've fallen in this range, since september of 2011, you've seen the correlation shift back and forth with gold trading alternatively as a risk asset and as a safe haven. so it's not by any means a hard and fast rule that gold always trades asterisk off or as a safe haven asset. in fact, prior to the weakness that we saw over the past two days, the biggest one-day percentage decline that we saw in gold in this long-term bull trend was back in october 2008 when this trend wag falling apart, gold fell 10% on a high to low basis, on a one-day return. so the correlations tend to go back and forth. i think right now it's more a momentum and really a break of key technical levels, which is driving gold as people are -- as
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part start to liquidate. and you can see if you look at the shares outstanding in the gold etf, you've seen that falling pretty aggressively, especially as we've started to break down and took out those range lows. so it would seem to me that it's more -- if anything, it could be trading more as a risk off. but i think, again, that correlation is ee femoral. and standing by the longer call there, neal curry, technical strategy at bofa merrill mcneal. thanks very much. >> and as we were told at the beginning of the show this morning, he's very much of the opinion that this is concerning speculators who wanted to drive the price through technical barriers. >> we asked him about breaking the pound piling into that extent. was interesting, if it were just gold on a day like that happening, fine, but with everything else -- >> yeah, but you know, they chose the right time to do it, right? >> but did it affect liquidity across markets to that extent? if you look at the size of the
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declines, it's an extraordinary statement. nevertheless, as he said, people are pushing this price around moving on fundamentals alone. if you are just joining us on the program this morning, these are your headlines. three people dead, more than 140 left injured after yesterday's explosions in boston. gold bounces back, as we've been saying, after the biggest one-day sell-off in nearly 20 years. >> and dish makes a $25 billion competing bid for sprint. still to come, goldman sachs is set to report first quarter results in around 90 minutes. we'll preview the numbers when we come back. it's as simple as this. at bny mellon, our business is investments. managing them, moving them, making them work. we oversee 20% of the world's financial assets. and that gives us scale and insight no one else has. investment management combined with investment servicing. bringing the power of investments to people's lives.
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invested in the world. bny mellon.
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as we said, goldman sachs for its first quarter earnings just about in 90 minutes time. the investment bank is expected
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to earn $8.30 a share. tore more, let's hear from marty mo mossby. marty, it's always the topic of much scrutiny and debate. goldman and then morgan. what do you expect to hear out of them in about 90 minutes' time? >> so far, we've had four banks report and all four banks have beat estimates. so earnings season has gone well so far. on average, it's about a 5% in excess of what the market expected. and goldman, we're in line with that. we do think that they can earn $4.05. that is a full, you know, 15 to 20 cents above what the street expects. so a 5% bead is pretty much in line with what we've seen so far. wa do you like better here, generally speaking? the likes of goldman and morgan and the investment banks or do you like the cities of the world? >> well, if we were looking at the -- between goalman or citi,
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we would look at citi in the sense of what they're being able to do. they're still trading at a discount to tangible value with a catalyst to close that gap. that citi holdings is rolling off as the losses in citi holdings are coming down. there's a near term catalyst that would drive it towards his tangible book value, which it trades at 15% below at this point. if you're looking between those three, citi would be the one that we look at. goldman is a whole other story. to return more than hreshold of it's coasting equity. so it's returning around 12%. cost of equity is around 12%. that's why it's trading at a little bit of a premium to tangible book value as they continue to produce greater returns, they'll push that premium higher and that's why we like gold mapp in the sense of the higher quality trade there. >> marty, you're talking about 20% return over the next year. where is that coming from? >> well, when we're looking at it, there's about 10% that you get out of the improvement and
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possibility. so right now they're trading at a 5% premium. if they can push their returns up another percentage points, which we think they'll do as the economic activity continues to at least stabilize and customer flows begin to improve, then they should be trading at somewhere around 15% premium to tangible book value. over the next year, their tangible value grows at 10% and then you add in a 2% dividend and you end up with a 20% return toward goldman over the next year. >> marty mosby, thank you for that. >> thank you. earlier, we asked you is the dip in gold price an opportunity to buy or is it time to get out? market intuitive from chicago tweeted that gold hasn't been a safe haven for a long time as nothing correlates. jeff says he'd rather buy goeld gold cover chocolate coins. >> a 57% yield paid in chocolate.
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>> who would consider gold when asset prices are better and rising by continued relaxation in government policies. >> so mixed reaction there. >> a lot of negative reaction on gold. maybe this isn't the time to get back in. just a reminder, three people are dead and more than 140 injured after bomb explosions at the boston marathon. counterterrorism officials have told nbc news other devices were found at the scene but disarmed. authorities have shed no light on a possible motive and there are no suspects in custody. white house officials say the attack is being treated at terrorism. vowing to bring those responsibility to justice. >> good-bye for now. welcome to the new
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good morning. boston is on edge today following deadly blasts at yesterday's marathon. meantime, security is on high alert in other major cities across the country. on the global market front, stocks in asia and europe are trading lower following yesterday's sell-off on wall street. a commodities are coming off their lows, but still under pressure. it's tuesday, april 16th, 2013 and "squawk box" begins right now.


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