tv Worldwide Exchange CNBC April 28, 2015 4:00am-6:01am EDT
hi everybody, good morning. welcome you're watching worldwide exchange. >> hi everyone. i'm seema mody and here are your headlines from around the world. >> shares are slumping near the bottom of the stock 600 after plans to raise 1.4 billion euros. >> earnings manage to beat expectations despite a tip from lower crude prices. investors cheer the results. >> apple delivers with an 11% dividend hike as earnings beat estimates thanks to iphone six sales, especially in china.
>> violence erupts in baltimore after the funeral of a man that died in police custody. his family calls for calm as a mayor imposes a curfew and calls in the national guard. welcome everyone. >> good morning. >> welcome to the smurf show. >> we digit plan this. >> we did meet last night. >> we did bump into each other. did you buy anything good? >> i did. a lot of fruit and things like that. >> i am known for being the worst cook but i'm trying to cook. that's the reason you saw me. >> i have seen some of the pictures. >> i'll have you at my place and we'll eat blueberries. >> that's a great start to the show. all right. well, there are a lot of stocks in focus on the move. so let's give you a look at the big movers and the european banks on the move after
earnings. commerce bank shares with their worst day in a year after announcing plans to raise 1.4 billion euros. this despite first quarter operating profit. more than doubling. let's get out to annettea live with that story. >> it's not really one that the shares are so much lower as this 1.4 billion euros is 10% of their capital. they're actually surprising everybody here with that capital increase. even analysts had not expected such move. the bank had series of capital hikes behind them and looking at the operating profit or operating results in the first quarter it's looking quite well. but they decided to do so to increase the leverage percent.
so it's a raise to raise capital. so when it comes to operating earnings they're better than expected first quarter and even market solutions were better than expected. the results were boosted by capital markets. the shares as we have seen biggest loser in germany currently. talking about losers in the banking sector one should also talk at least a little bit about deutche bank. we had them reveal their new strategy. the shares were down tremendously because investigators were really disappointed and nobody understood why management made such a decision to opt for that lean banking model and not for the completely revamp of the bank now reuters is citing
sources that the ecb conducted a stress test on a model like a goldman type investment bank stand alone type of thing for deutsche bank and this stress test revealed it couldn't with stand a severe downturn in the markets and that's why the bank has allegedly reportedly accord according to reuters opted for that model they revealed yesterday which is disappointing. deutsche bank shares are losing today. >> thank you. glad you got the memo as well to wear blue. we're hoping the thread will continue. >> it's color coding isn't it. >> what can you say? favorite color, blue. color of the sky, color of the sea. top stocks today on a positive note. santander reporting $7.3 billion net profit. this thanks to an improving economic picture in spain as they focus on deleveraging.
standard charter also today. we're looking for release in the first quarter statement that could come through in ten minutes time. md and global head of financial research joins us. good to see you this morning. what do you make of these results that we've had so far for these banks? >> what's interesting is the message since the beginning of the year has been that capital build up remains a big priority for many european banks. we've had the ecb taking over as forcing supervisor for the banks in november of last year and clearly it is applying pressure on the weakest links so we started the year with the rights issue that was a bank that was a bit light on capital and slashed it's dividend and raised $7 billion in the market. now we're going to germany and at some point to austria which
is also banks lagging on capital. that's where you're seeing the likes of deutsche bank deleveraging. another capital increase. the fourth one over the past five years so there's still a lot of pressure on banks to improve their capital ratios. >> on that point, phillipe, because it feels like over the last five years that banks have been trying to sure up their balance sheets and make sure they have enough cash. when do we reach that level when it happens? when can we stop worrying about that? >> it's been a moving target for sure. look at the u.k. and switzerland now well ahead of the game compared to the euro zone. you've seen as well in the u.s. that some of the largest banks despite being very healthy like jp morgan was forced by the fed basically to increase it's
capital target from 10% to 12%. so i think a lot of regulators are now more powerful. they're looking to self-ensure and the best way is to ask for more capital and see the shares have been going up and they feel this is a bad time to apply extra pressure. so there's no magic number where this is going to end i'm afraid. it's going to be with us for a number of years going forward and we'll set off with significantly higher ratios santander is a bright spot. the focus on deleveraging seems to be working for the spanish bank. >> yeah, they have done a good job of navigating the crisis. they're looking reasonably
healthy. now you're looking at banking systems are structurally low profitability and they are struggling to generate capital organically and that makes a huge difference. >> you have the spanish recovery also working for the bank. santander stock up. stay with us. we'll get your reaction to standard charter's interim results due in a few minutes. >> also stay tuned. later we'll speak to the ceo of bankia bank after their first quarter results out yesterday. that's coming up as well. apple. let's talk apple. apple's second quarter profit rose 33% to nearly $3.6 billion. easily beating forecasts. revenue rose 27% to $58 billion.
also topping estimates. the company sold 61.2 million iphones up 40% from a year ago. most of those sales came from emerging markets, especially china where they rose 72%. now apple's mountain of cash is just growing and growing. it had more than $195 billion as of the end of march. the company is announcing plans to return more of that money to its shareholders. it's boosting it's quarterly dividend. it's stock buy back to $140 billion. in all apple is pledging to return $200 billion to investors over the next two years. a lot of money being handed back. apple shares up to close to 1.5% in german trade. it's astounding the chinese numbers. sales rising 72% as you said. the average selling price is also higher. up by more than 60% year on year. $659. >> which tells you that
customers aren't just buying the lower end iphones, they continue to buy the top end ones like the iphone 6 and iphone 6 plus. >> what do you think of ipad sales? they were weak. are we going to see a come back? >> you take a look at apple and they revolutionized the tablet market with the entrance of the ipad in 2010. >> but from consumers i speak to once you buy an ipad there's no reason to upgrade within two or three years because you're seeing them down year over year. it's a crowded market. you have samsung, blackberry even microsoft with their own versions of a tablet that gives consume consumers more to choose from. >> absolutely. and it's pretty astounding the dividend rise and they're the biggest dividend payer topping exxon mobil even. >> think three years back apple didn't have a dividend and now it's the biggest dividend payer. shows how much they made dividend and share buy backs a core part of the growth strategy
due to the pressure they have been receiving from activist investors. >> massive. get involved here on the show. you can find us on e-mail. what's the e-mail email@example.com. or you can find us on twitter as well. >> absolutely. we are on twitter. we want to get your thoughts on apple. do you think the stock can continue to move to the upside after hitting an all time high after those better than expected earnings yesterday? get in touch with us. we're on social media and we're quite active. but for now a market update. >> the markets are also active this morning. remember yesterday on the close we were looking at an all green screen except for a little bit of red. a flat to slightly lower market coming out of norway but by and large a positive close in yesterday's session. this morning we recalled a couple of points lower. a bit of a dip despite the fact
that we have these massive earnings through to contend with -- also many of them pleasing still. that's one thing that we continue to watch. but we have the sell off state side though largely lead by the bio tech sector. a number of earnings out but that has lead to a bit of feed through here. of course also now we're looking toward the fed and what they have to say. they have ruled out any type of a rate hike this month. and the bank of japan on thursday. no change anticipated there although some think there's a slight chance we could be seeing easing coming through. you never know. ftse 100 lower. xetra dax off. the cac off by around .25% and athens seeing slight gains. when it comes to the bond markets, we have been very focused on the very low levels and low yields and it very much continues. today a little bit of a reversal
in that with the ten year in the u.s. seeing it's yield popping a bit. 1.9%. still below the 2% level. in germany a yield close to 0. .16% and yields rising by 1.6% as well. we saw a bigger move in euro dollar trade on friday. we hit 109. saw 109 in yesterday's session as well. 10873. it's a big week when it comes to some of these central banks and what they have to indicate to us. we have to read through tlienhe lines. we also need to check in on markets in asia. sri joins us to get jiggy out of singapore. hi sri. >> i can tell you about the markets. let's rap about that. you'll know it but we did see 7 year highs for the msci asia japan.
it was the halo effect from am but we saw a lot of sellers selling into that rally earlier today and that's why a lot of markets are coming off those highs. nikkei 225. that was the stand out today and it was really the earnings because the message there is that shareholders are expecting a bigger dividend payout. we certainly saw that with one of the heavyweights on the index. the industrial robot maker and it doubled it's dividend payout ratio so the investment community liked that and are expecting more from corporate japan this earnings season. on the flip side shanghai composite retreating from the 7 year highs we've seen previously. not a big correction in the greater scheme of things. down by 1%. it was the start up board, we saw some weakness there as a sense that valuations are a bit toppy so that south mood on mainland china equities. i want to talk about the australian market. that came off.
the 6,000 level is so elusive for australian equities right now. it's a tough hurdle. tough upside threshold to get through despite the fact we did see that balance in iron ore prices. we saw investors taking some chips off the table after they did run up in the past couple of days. the other is the fifth day of losses in the benchmark. associated with disappointment related to the earnings season in indonesia. that's where we stand. later on this week the big test for the market in mainland china is the official pmi number. manufacturing for the month of april. that's where we stand. back to you now. >> always a pleasure. coming up on worldwide exchange dupont faces growing pressure to impress nelson peltz. and we're tuning into the itunes store celebrating it's 12th
hi everybody. welcome back. you're watching worldwide exchange on cnbc. we're getting a statement standard charter has anticipated. they're on schedule to deliver common equity tier 1 ratio between 11 and 12%. they talk about an operating income of shy of $4.4 billion. they're looking at trading conditions that remain challenging. underlying business volumes remain strong as well. they are looking at loan impairment of $476 million. 80% rise year on year and they say trading conditions remain challenging. underlying business volumes remain strong. they're well advanced on their plan to take out 25 to $30 billion over the next two years. first quarter headline income minus 4% at $4.4 billion. and they're on track for productivity improvements over the course of 2015.
standard chartered off by 2%. a number of bank earnings out here within the last couple of days or so. phillip is with us still. md and global head of financial research at pimpco. so we're looking at standard chartered. they're on track for $400 million productivity improvement and equity tier 1 ratio between 11 and 12%. how does that sound to you? >> that's one bank that the numbers are what they are is the last set of number from the management team and i think that the whole story will be what is the new management doing to turn it around? this is a story where they have fallen out of love with that stock for the last couple of years now. it is on the capital story as
well as the earnings turn around so the job of bill winters which is someone with a strong pedigree and well liked by the market is going to be first to tackle the capital debate around the bank and it's quite likely that you'll see a capital core reasonably soon after he starts in his new job. the second one will be to pass identify the relationship with regulators and that's obviously very well positioned and it's going to be to navigate an environment where this is operating euro zone or u.k. banks in a pretty bullish market and emerging markets. and pretty rapid loan growth and the economies are slowing. it will be too fast in wholesale banking and now you're seeing some pressure in asset quality and provisioning levels. he has quite a lot on his plate.
the franchise is a strong one but certainly there is to be a new narrative there on capital regulation and, you know as well as the vision for that company. >> you know were you expecting the company to reference the head winds related to trading conditions? because standard chartered is saying trading conditions remain challenging and the actions we're taking to derisk cut costs and capital are having an impact on performance. >> obviously they have been through an environment of fast growth over the past four or five years so if you think about them versus european banks which have been derisking and taking lots of losses they have been in part of the world that have been much better behaved and they have grown quite fast and now that those economies are slowing down they're seeing some pressure on the asset quality and the need to adjust to that new environment and also adjust
their cost space in accordance as well. so i think that's what they are referencing when we talk about trading conditions. they are talking about the environment that's deteriorated for them. >> just getting back to bill winters, we're still seeing a lot of banks that are streamlining and focussing in on core business and getting rid of or shutting down or selling off assets that aren't considered core. do you think they're having to go through something like this as well? >> i think there will be rationalization. they'll take a good look. it's in the same way that hsbc is existing a number of countries. they'll have to take a good look at whether the presence in so many countries need to refocus on those that are most profitable. so i think it will be a combination of deleveraging
exiting certain countries and raising capital as well to put that debate behind it. winters is someone part of the u.k. commission on bank regulation and the e is very well atuned to the thinking of regulators so i would expect him to take fofrsrceful action on that front pretty much head on. >> thank you for your banking insight. that's m.d. and global head of financial research at pimco. >> first quarter profits came in at $2.1 billion. keeping the results in context, however, that figure is down from 3.4 billion just a year ago. now along with all the energy majors, bp has been hit by slumping oil prices although i have to say that over the last month or the course of april we have seen a huge reverse in the price of oil. they have also been topping estimates although like bp it reported fallen first quarter
profits down to $2.6 billion. it was a similar story to bp on production with higher output helping to offset falling oil prices. he's an oil and gas portfolio manager and analyst. welcome. >> good morning. >> good morning. bp. talk to us about bp. >> these were a pretty good set of results in context. they did beat expectations. a lot of that was down to refine chg is excellent and they're saying we'll continue. i think here we're starting to see the real signs of cost control in the industry which is what we need to see in the new world of $65 oil and not the $10 plus we saw a year ago. >> and that cost control is not just bp. they're still having to deal with the deep water clean up. >> the disaster. >> yeah exactly. >> the important point i think is to get their own controllable cost under control.
it has had all of these issues of cost inflation and cost broadly speaking have quadrupled spending on what you're spending the money on in the last ten years. now for bp management we're seeing the first signs of what they're doing to actually deliver for shareholders those cost savings both at an operating cost level but also in the cap ex and cash flow to shareholders. >> you say they're good in context with what they're dealing with but wouldn't you say a lot of oil companies should have had hedging strategies in place to ensure they defended themselves against the dramatic drop in oil prices we've seen the past couple of months. >> hedging works for 3, 6 months. what management have been trying to do for the last six months and need to do more is attack the cost base in this business. oil needs to be run like a manufacturing company. not like an oil company and that means driving down unit costs where possible.
look at total first quarter results. fabulous cost control for management i think. cost per barrel down 24%. that is a brilliant performance. we need to see more of that and that sustained to give shareholders further confidence in this industry. >> a couple of other earnings coming out this week including stat mobile exxon mobil, chevron. what do you expect to see? >> we'll see the theme we have had outlined today. refining is strong where ever in the world you are. particularly in the u.s. but elsewhere in europe and asia. that's because of the falling oil prices and the improving demand picture. secondly we also start to see management take a grip on costs. six months into the industry reset and the cost control efforts are really starting to show through. an example from bp just versus last quarter, cap ex is down 20% year on year. those are the kind of actions we need to see and we will see this week from earnings. >> chris i'm curious to hear
what you make of this massive rise that we have seen in oil prices over the course of april. we're up by somewhere in the region of 20%. we're halfway through the month. it's nurtts, no. >> all the oil price is doing is responding to supply and demand. i thought the oil price decline was overdone because it was based on oil demand forecasts that seemed to be far too bearish. if you looked at the shape of the futures curve it wasn't showing you that demand was that weak. we're starting to see those historic data demand revisions showing that the world economy isn't as weak as people thought. secondly we have a strong macro tail wind. generally speaking economic surprise is positive and lastly because the oil price is falling, demand is up. so we're seeing a really good amount of events that are really driving oil prices upwards. >> but chris with the rebound we've been seeing over the past month has come a lot of
volatility in the intraday price action in oil. does that suggest this bull run won't continue? and we could see another significant drop in oil prices. >> we could. we're going to have to live with volatility. >> that's the new normal now for oil. >> completely. anyone that thinks that oversupply of $500,000 a day against global demand of 92 million should cause the oil price to half doesn't understand the meaning of the word volatility. are we going to see a steadily rising trend over the next two to three years? yes i think so. because the cutting cap ex in the oil industry is going to drive higher declines. that will solve the supply-demand balance. oil goes higher. it's that simple. is it going to be volatile? you bet. >> do you have an end of the year target for 2015. >> the oil price. i would say oil prices will be between 65 and 75 by year end averaging low 60s.
>> pleasure to have you on worldwide exchange. thank you for joining us. it's been a great debate. >> i'm very focused on this gdp print from the u.k. we're just sitting pretty waiting for that to come out. the question is whether or not it possibly could disappoint and if it disappoints what that would mean for the bank of england's mpc monetary policy in general. just looking at it through here first quarter gdp coming in 0.3% on the quarter. plus 0.3 on the quarter. plus 2.4% on the year. it was forecast to come in higher than that. the average forecast was for a print of plus .5% on the quarter and 2.6% on the year. so we missed the forecast on the preliminary first quarter gdp print and questioning what it means for the bank of england's monetary policy. we're looking at sterling dipping a bit after that data coming through. so you're seeing that on screen right now with cable at 151 at
the moment down by .3%. first quarter gdp 0.3% growth as opposed to the 0.5% expected on the year. 2.4% versus 2.6%. nine days ahead of the general election. >> that's why this number is particularly important given that the election of course coming up on may 7th but this number coming weaker than expected. britain's economy slowing more sharply than expected in the first three months of 2015 and a set back for david cameron and the conservative party. right now sterling at 15181 against the u.s. dollar. off by around .4%. >> when it comes to -- we'll be talking a lot more about this later on on the show. >> you were just pointing out how this impacts the bank of england. the mpc voted to keep rates on hold for the foreseeable future but perhaps this will continue to result in it. there's no reason to raise rates
if it's growing. >> often times you have a bleep. weather bleep or seasonal factors. >> plays into it. >> so i wonder how much of that they're going to blame? we need to wait and see what they say, right? >> absolutely. we'll keep you up to date on the gdp and how markets are reacting. still to come on the show nine days and counting until the u.k. election and the race is still too close to call. how will the latest report impact prime minister david cameron? we discuss after this break.
u.k. growth ticking up 0.3% on the quarter missing forecasts for q-1. it's the final days before the u.k. election happening in nine days time. >> commerce bank near the bottom of the stock 60 after the german lender unveils plans to raise 1.4 billion euros. >> down but not out. they manage to beat expectations but despite the dip from lower crude prices. investors cheering these results
results. brief recap of the data that just hit our wires within the last five minutes. preliminary first quarter gdp saw growth of 3% quarter on quarter. it was for growth of 0.5%. we missed on that front. the slowest growth since the fourth quarter of 2012 is what we're seeing and on top of that also for the year it was also lower than forecast. 2.4% year on year growth 2.6% was forecast. a dip in sterling on the back of this. at the moment on top of that u.k. futures turning positive after this u.k. gdp data fell short of expectations. so that's just hit the wires let's get reaction from gdp. how important do you think this preliminary miss is for gdp
data? >> it's quite important. this is a genuinely disappointing data point. i wouldn't get overly concerned necessarily at this point though. it's out of line with the pmi surveys pointing to something more resilient. weak construction might have been behind the data today. they might expect a correction some of them. so for the rest of this weak i have been watching in particular the pmi survey at the end of the week and after the bank holiday for a bit more context and how much to worry about the figure. >> a agree. there's a lot of seasonal factors for the mpc they must be looking at the growth data closely in conjunction with
inflation. >> as of the february inflation report they were expecting 0.6 for the preliminary numbers i recall. would have been a disappointment. going forward as we think about how they'll vote for us it's more about inflation and what's happened to pay settlements in april. what happens to pay growth going forward. >> there's an interesting dynamic in the mpc right now because they voted unanimously to keep rates on hold but if you read the mpc minutes they reference improving performance in the euro zone and the exceptionally flat market pricing of the yield curve. to me those two comments are hawkish. what do they mean to you? >> we have been expecting one or two members to switch thaer vote in the next couple of months but for us we don't expect to hear a first rate rise from them
until q-1 next year. not until 2016. i still think there's more of a burden of proof needed before you can even think about the majority of them switching the u.k. index at 7,034. thank you for joining us now these are the final gdp figures before voters head to the polls. in nine days the polls are still too close to call. wilfred has more on that story. >> we can certainly expect labor to jump on that during the course of today. all in all i think of course the economic performance has been
pretty good even despite the slight decline at the margin. they struggled to get that message across anyway and this certainly won't help. another crucial area of policy with regards to the economy. of course they have committed to a referendum by the end of 2017. they do actually want to stay in europe and they argue they'll be able to reform europe and they'll want to stay in the european union. i caught up with william yesterday and began by asking him what meaningful reforms david cameron is likely to be able to achieve before any referendum in 2017. >> that can be done in 2.5 years and we have given a lot of warning of that. >> there's many people that don't want negotiations but
david cameron has a strong track record of outperforming expectations and overcoming resistance in negotiations. he was the first prime minister ever to come back home with a reduction in the total eu budget. something already saving the british taxpayer hundreds of billions of pounds. he got us out of being liable for euro zone bailout. he vetoed a treaty. all of these things people said were impossible but he did them all in european negotiations so i believe he can come back with a very important deal for britain. an important change in our relationship with the eu. that is the lock behind it all and they get their say whether they're happy with it or not. >> that fact in particular is what scares a lot of our viewers. the business community. investors are terrified with a prospect of the grexit and what it would mean for the british
economy. are you concerned that it is offered on the conservative party manifesto? because it calls into question whether they're good for business. >> those businesses have to think about a couple of things. one of them is a lot of what we're asking for in europe will make the whole of europe better for business. europe is a shrinking -- collectively is a shrinking part of the world economy and we need to make the whole of the european union more attractive for investment. woe want a union let bureaucratic. so businesses can benefit and on having a referendum it's much better for us to have that on a timetable with a clear program of bringing improvements in europe than it is to drift into it one day because the british people do want to have their say about europe and i think just
refusing to listen to that what is labour's approach will lead one day -- would lead to a referendum in less planned circumstances. so businesses should support the conservative agenda on this. we have known britain a great place to do business over the last five years. >> so that of course the tori point of view on europe. i caught up this morning with susan evans. they want to have a referendum straight away and are committed to getting the u.k. out of the european union. i started by asking her what reassurances she could give to business leaders who are terrified about the prospect of britain leaving the european union. >> first of all i want to question that business leaders are terrified because business leaders should have the economic advantage over most of us and they would know that you don't need to be in political union
with the european union in order to trade with it. there's more than 60 countries worldwide that are not members of the eu but have good free trade agreements with it. if you look at the top ten countries, sorry, six of the top ten countries that actually export to the eu some of them don even have trade agreements at all. we're talking about brazil china, america, they don't have any trade agreements so you can still trade with the european union without being a member of it. we haven't had to become the 51st member of the united states in order to trade with it successfully. so i question whether business leaders are really concerned about grexibrexit or more concerned about a labour government or that the conservative government will put forward a genuine referendum. >> well, the phillips ceo said he couldn't imagine a europe without britain and tesco is one of the big u.k. based companies
to question what it would mean for british business and i suppose over the last few months we have seen europe and germanys lack of middle ground in discussing anything with greece. what guarentees can you give that we would be able to maintain our free trade agreements if we left the european union. >> so the former head of the cbi, confederation of british industries said that if britain left europe we'd probably have a free trade agreement within 24 hours. that's a man used to dealing with big business that knows his stuff. of course we're going to have a trade deal. jurors needs us far more than we need them. they are actually their biggest market because they export to us far more than we import to them. why would they cut their nose off to spite their face? second issue, of course once we leave we take back our seat at the world trade organization so we can make free trade agreements for the first time since 1975 on our own terms. not only is that a good thing in itself as part of the world
trade organization the eu will not be allowed to not trade with us. they will have a legal obligation to trade with us as a world trade organization partner. >> now they continued to poll in double figures although people questioning whether their seat numbers will be in double figures. most suggesting they may only win 3 or 4 seats. that's a massive swing factor because it effects how many seats they're likely to win. nine days to go. europe immigration with it still a massive issue for voters and one we'll see a lot of movement on as we go into the final stages. >> nine days and counting wilfred. thank you very much. we'll see you very soon again for more coverage. now moving back to the banks. bankia shares moved lower after a first quarter miss in net interest income. overall lending was down in the period as the spanish bank continues to cut it's real estate sector exposure.
joining us on the phone from madrid is the cfo of bankia. we actually did see a rise in first quarter profits though. you have set aside fewer funds to cover loan losses as well. would you say that you're turning a corner with regards to the spanish financial crisis in banking in particular? >> thank you, good morning. things are improving in spain. they have been improving for the last at least i would say 18 months. and we're beginning to see things getting better in the real economy. there's a lot of indexes with regard to this. for the first time the house prices have gone up 2% last year from the minimum. we are in record sales of cars. since the beginning of the crisis. tourism. it's at its big -- i think consumption is beginning to pick up. >> i'm assuming that businesses and individuals that they're still trying to pay off some of the loans that were taken out
during or before the financial crisis. am i right in assuming this and how difficult does that equation -- how difficult is that equation currently? >> yes, that's also true. at the beginning of the crisis it was mostly related to the leverage of the private sector and not so much to the public sector. unfortunately during the course of the crisis it's only grown because of the deficit. the private sector has been deleveraging on the household side and sme side. things are beginning to improve. we're beginning to see people willing to get more leverage. especially in small smes or not big smes and as consumption is picking up people are beginning to ask for new loans. >> reoccurring income is down sharply as is net interest income. what are you doing to bring your nii up to par? >> well the problem that we had, and this was a long time ago, we had bonds we inherited
when we transferred our real estate assets. these funds are reprised to the current levels and because of the evolution the last two years these bonds were reprised on the first after january. they have contributed about 54% less than last year. it excluded this impact nii would be up more than 8% year on year. >> thank you very much for being with us this morning. leopoldo alvear. the ceo of bankia. >> we get under the hood of honda to see how the yen is putting the auto maker in reverse. coming up after the break. more strategy more analysis here on worldwide exchange.
welcome back. nepal's prime minister said the number of those killed following saturday's deadly earthquake could hit more than 10,000. so far officials say more than 4,000 people have died. the united nations has projected that more than a quarter of the country's entire population has an affected by the disaster. now international aid is slowly starting to arrive in the country. all the rescuers are struggling to reach more remote areas. >> now honda has beaten estimates on fiscal 2014
earnings. the story is live from tokyo. more on honda. >> thank you. thank you. well other auto makers are expected to report strong performances for the 2014 fiscal year. honda's earnings have turned out to be weak. though revenue increased operating profit dropped by 18%. now as for its outlook for fiscal 2015 honda expects revenue to trend up by 10% but projects operating profit and net profit to remain flat and these come much lower than market expectations. now a major factor has been honda's inability to leverage the favorable conditions from the weakening of the yen. honda has been shifting it's production basis at the points of demand. this was well received when the yen was strong but now this is working against honda. another big reason for its figures has been the brand
appeal. quality control issue including the air bag fisaco has plagued the auto maker over the past few years but keep in mind that from june the current managing executive officer will become honda's new president and ceo. this is an exceptional leap in promotion and he is expected to use his extensive international experience to hopefully steer honda out of the frail position in the industry. that's all from the nikkei. back to you. >> thank you very much. >> the u.k. was a bright spot for atos when they posted revenue of 2.4 billion euros for the first quarter. the u.k. was the only market to show growth rising 15% year over year. business process outsourcing contracts, particularly from the public sector were the main drivers of the increase. let's talk more about atso and their growth strategy with the ceo of atos u.k. and ireland.
>> pleasure to be here. >> we have been seeing over the past couple of years a decline in i.t. spending by corporations and various governments as well but has the recovery in the economy helped corporations put more money to use when it comes to technical infrastructure? >> we see more investments by our klines into technology in the public sector i must say we see continued ambition to drive cost efficiencies into the public sector which is our key client base here in the u.k. and really making sure we are helping our clients to use digital technologies like the cloud. like social technology. like mobility. it's really at the heart of our strategy. >> one sector that you focus on our service i should say is cloud. there's been an active discussion about whether the cloud overtime will become comod tiezed since it's becoming a crowded market with the likes of amazon microsoft, google among others. that could lead to pricing cuts
and commoditization of the cloud. is that a concern? >> it's definitely a concern. we have really been able to invest in secure and protected cloud. so we are for example running our cloud operation acredited -- government acredited organization because security and data protection is in europe specifically still a concern and we see the difference in buying behavior between the united states and here in europe. >> what are you seeing just in terms of general trends in the industry now? and are you also seeing clients coming back? are they willing to reinvest in this cycle? >> we definitely see clients coming back. it's still an uncertain outlook. klines are cautious with how they spend significant funds and projects. we're seeing that companies have experimented with digital technology and now they're wanting to align themselves strategically, align technology
to their business strategy and saying okay how do we run the digital transformation in line with our business strategy. so we see a much broader engagement of our client base. >> one thing is wanting to do it but another is rolling it out successfully and not getting ahead of yourself right? >> and it's a real change for the it department and the business. the business really needs to understand technology nowadays and the i.t. department needs to learn really to understand business which we see a real change in how digital transformation is impacting i.t. >> they're playing our song. we have to go. >> very nice to be here. >> the ceo of atos u.k. and ireland. >> the fed kicks off it's two-day policy meeting keeping an eye on housing. more coming up after this break.
welcome everyone to worldwide exchange. i'm seema mody. >> welcome. these are your headlines from around the world. >> apple delivers with an 11% dividend hike as earnings beat estimates thanks to a surge in iphone 6 sales in china. >> twitter is set to steal the show. reporting after the bell today. investors are honing in on growth from mobile advertising. >> markets pause for a breather keeping an eye on the fed as it begins it's two-day policy meeting. >> violence erupts in baltimore after the funeral of a man that died in police custody.
his family calls for calm as the mayor imposes a curfew and calls on the national guard. hi everybody. welcome back. >> welcome. >> welcome back seema. >> welcome back lou. >> smuf day. >> it's interesting when looking at fund flows at the moment. >> okay. >> i have been speaking to a couple of people that invest in u.s. equities but for other countries. so they place clients money in germany or italy or places like that and they place u.s. equities and a number of them are saying that their clients are thinking that the market might have topped out stateside. however when you speak to people in the states they don't think that. >> it's interesting because you would think that maybe stocks are getting overvalued especially if you look at the u.s. major indices, the nasdaq at the fresh record high. s&p 500 flirting with it's record high as well but the question is if you're not going to invest in equities where else
are you going to put your money when we're looking at negative yields on bonds here in europe. the u.s. ten year not to great. we're at 1.92 last time i checked. and you're not seeing that type of relative income as well. so you have no choice but to put money into equity because rates don't seem to be rising any time soon. >> i feel like a broken record but i have to agree. it's interesting to see the moves we have seen in gold and oil as well and i'm wondering whether or not we're going to see a follow through impact from this. especially this 20% rise we've seen in the price of oil here just over the course of april alone. it's astounding. >> that must be short covering. because the supply-demand equation hasn't changed a lot. >> the saudis seem to think different differently. >> right. >> but you never know. what would you like to invest in or what are you thinking about investing? you can find us on e-mail worldwide at cnbc.com and we're
both on twitter at seema cnbc. >> take a look at u.s. futures. what we're expecting here. s&p 500 down about 4 points in premarket trade. the dow jones trying to hold on into the green but again this is just premarket. we'll have to see how wall street does kick off at 9:30 a.m. eastern. now looking at european markets, markets have been rangebound over the past two days and we're trading in negative territory. a lot of focus on bp oil and gas earnings. ftse 10 down. the xetra dax was the underperformer. it lost about half a percent and the move to the downside continues. a quick look at the french markets at 5,225 down slightly as well and we'll keep an eye on the on going discussions between greece and it's international acreditors. a lot of concern or story around whether the finance minister is getting sidelined and what that could mean for future negotiations and talks with it's
creditors. the greek equity index is up slightly by around .3%. but of course the greek story. you talk about a broken record. i feel like a broken record. continuing bailout crisis default, grexit. >> but there has to be an end to it. we have the imf payment coming up. the 12th of may and then another date in june as well so we'll continue to keep up you abreast on the greece story because that's where the focus is. exactly. >> absolutely. when looking at the bond markets we have been looking at the greek bond yields with yields having moving quite a lot higher in greece looking at the other paper throughout including greece we're seeing the yield close to 12%. 11.5%. in the u.k. we're seeing buying in the ten year bond. the same in germany and the same in the u.s. so yeelsd being pushed lower across the board. we've been look agent the cross rates heading into a week. heading further into a week where we have the bank of japan
on the agenda. some anticipate we could be look potentially at easing coming through for the bank of japan. the fed starting it's meeting today. do watch the euro dollar here over the next couple of sessions. we're hanging on to 109 as you see in the corner. of course we had that u.k. gdp data out. we saw a little bit of a dip in sterling and here we have sterling against the green back as well off by a couple of points too. >> let's check in on markets in asia. >> that will be an important for one european markets. especially if it strike aces one european markets. especially if it strike aces a dovish tone. it could be constructive for asian equities to a certain
extent. we did see seven year highs, fresh ones for japan but a lot of investors selling into the strength. as you can see, nikkei 225 is the exception though. closing .4% to the good. it's earnings season and expectations that we'll see greater shareholder returns in the index heavyweight. the industrial robot maker doubled the dividend. and it was the start up board. the chinese that was really the origination of the weakness for chinese equities. the australian market is finding it tough to crack this 6,000
level on the upside and the fifth day of declines there's question marks associated with the earnings and the expectations there which seem to be too high. disappointment associated with the earnings season. let me stress that the macro data will be quite important coming out of china toward the end of the week. april, official read manufacturing pmi is going to be very crucial. next big test for the market in the mainland. back to you now. >> keep it on our calendars. thank you so much. the fed does begin it's two day meeting today with a decision due wednesday at 2:00 p.m. eastern. the central bank has already ruled out an april rate hike so not much is expected with a string of weaker economic data recently and first quarter gdp expected at 1%. many economists are convinced that the fed will wait to start raising rates until september at the earliest. fed policy makers will get a fresh check on the state of the u.s. housing market as well with
the february index due before the market open. what can you expect? let's talk more with director of the group think tank and author of foreclosure nation. blackstone's chief told cnbc that housing is a good investment even though prices are not rising as much as after the financial crisis. do you agree with him? of course you have to remember blackstone does have about $90 billion in real estate assets under management so they want the housing to work. >> right. absolutely. >> well no question we'll see them continue to rise at a slow and steady rate. we have such low inventory and that's expected to continue for the next couple of years particularly if rates rise because we know that folks experience what we call rate lock in meaning that they stay put because they don't want to lose that good rate. already we're seeing low inventory because of slow new
construction over the past years years. folks have hundreds of thousands of rentals. it will continue as the rates go up. >> what needs to improve the amount of inventory in the u.s. market. >> that is making sure that they are given the loans they need to build more essentially? >> a big part of it is going to be new construction. the builders are building for higher end buyers so we need to increase that credit box so builders are confident if they build entry level homes folks can get financing for it. a lot of it is the entitlement process. they're not as willing to give up those entitlement rights as they used to be but a big part of it may be there. folks take 250,000 for single person 500,000 for married person and not pay taxes on that
when they sell their home. those rates were set in 1997 and have never been indexed for inflation and we know that a lot of boomers are actually aging in place in part because they don't want to have to pay that big capital gains hit. we also know a lot of folks invested in real estate from 2007 to 2010 and will probably free up that inventory if they can get their money out without paying capital gains. so surely as we move forward toward tax reform again we want to make sure that policies stay in place and maybe even increase the caps and free up some of the inventory because the inventory is freed up from the top down. sellers won't list their homes unless they have a place to buy and move into. >> good morning, i'm just wondering what do you think will happen realistically once the fed starts to hike rates? >> well we're all singing off the same song sheet. the fed is look at the same indicators that reflect consumer
confidence and increase housing demand and we know that any increase is going to be slow and incremental. they're not wanting to lose their low rates more so than on the demand rate. at least for the next few years. >> thank you for being with us. the director at the group and think tank and author of the book foreclosure nation. listen lots of you writing in with tweets and things like that saying good morning. good morning to jeff linda, scott. >> scott, it's good to hear from you. any interesting tweets? >> scott says we were talking about markets at the beginning of the show he says i like to trade the volatility of earnings. he is using apple and twitter options to allow for leverage with margins. so it's some interesting trading tactics shared with us on social media. >> pictures of sharks and things
like that. fantastic pictures that you're sending through everybody. we also have linda writing in. investing in u.s. transparent and experienced markets however risk money can dabble short-term in asian markets. >> will apple take their cash literally by the world and turn everyone into shareholders to aachieve world peace. the types of tweets we get in the morning. creative. >> i like it. very creative tweets. keep them m coming. apple blows past earnings estimates once again boosted by sales of the iphone 6. meanwhile tim cook unveiling plans to buy back $50 billion of shares and increased it's dividend by 11%. it is the biggest dividend payer topping exxon mobil now. they're really -- their cash pile is ever growing. ever growing. they have something like more than $195 billion worth of cash
now. >> even though they're putting cash toward the dividend and share buy backs the cash on books is still rising. >> zechbtdefinitely. we were talking about the ipad. people don't need to renew an ipad every two or three years. >> no reason to upgrade as much. the competition is becoming a crowded market with the likes of amazon. samsung among others. my vo soft they're doing well. there's other companies that consumers can choose from. >> the last launch of their mac book was pretty successful. we haven't heard a lot about it lately but very very thin. >> mac air. >> different colors. i mean very clever stuff that they continue to do and the average selling price is up by more than 60% year on year. $659 now selling price. >> some analysts were expecting that asp number to go down because consumers are buying lower end iphones but that's not the case if the number is going up. listen, all around this company did well in terms of earnings.
the stock actually hitting an all time high in after hours trade after reporting earnings. it will be interesting to see how the stock plays out today and what that does to the nasdaq which has been at a record high. >> i don't understand. why is it only up by just over 1%. >> a lot of the positivity is already priced into the stock. the stock has been on a tear in 2014. >> massively up by 16%. >> over the past one year but we should point out bio tech one of the reasons the nasdaq didn't outperform as much as many people were expecting because we saw a significant sell off in the ibb. the bio tech was down about 3%. we'll discuss that coming up on worldwide exchange. we want to get you the details behind that. still to come though the itunes store celebrates it's 12th birthday. we speak to the creators of an app topping the rankings. that's coming up.
custody. >> and apple may have sold more iphones in china than the us. for the first time ever but it's also celebrating another milestone. itunes is 12 years old today. on this day in 2003 apple launched the music store with 200,000 songs at 99 cents each along with a third generation ipod which held 7500 songs. itunes sold 1 million songs in it's first week. how about that? now joining us from new york city is a company that has been benefitting from the apple ecosystem and the platform. we're now joined by the co-founder and creator of the face tune and light photo editing apps. thank you. am i pronouncing your name right? >> it's right. thank you for having me. good morning. >> good morning. help us understand how does your app differ to some of the other photo editing apps out there right now? why is it doing so well on the apple platform?
>> well we have been very fortunate on the platform we published about a month ago. it's been the number one ranked paid application over 90 countries. i think you can say that's probably the most powerful mobile editing suite on mobile right now. there's a platform shift but the software is catching up with that, right? the more high end industrial grade software is just beginning to come to mobile from desktop and that's what we did in the first app published and has already been the number one paid app in 112 countries by now. >> but you mention the shift from desktop to mobile but now they're expecting a shift from mobile to wearables. you have the apple watch among other smart watches there. what are you doing to make your app usable on a wearable device? >> so you know that's a great question. it's really platform shifts are
really about timing. another big platform shift is the one that augmented a virtual reality that we're more curious abas a company. so it's really about capturing the right ecosystem and right now mobile is you know it's a huge place. it's where apple paid out over $10 billion in the last 12 months to its developers on the ecosystem directly from the app store. with wearables there's a big promise of course but the ecosystem is not quite there yet for developers such as ourselves. >> so explain a little bit about the virtual reality part that you just mentioned. >> well i happened to be at facebook last month in california and i got to see the new oculus demo. it's impressive stuff. a lot of people in our ecosystem
and technology space are seeing that as the next platform. where it could very well be used for a variety of things. maybe it will start with gaming and stuff like that as many things in technology tend to start but you can see a lot of stuff being built on that which is as disruptive and important and kind of you know alters our lives the way that mobile did. >> you know lighttricks is 100% boot strapped and you have scaled up to 20 employees in under two years. do you plan to raise money from the venture capital world? >> so that's a great point. i mean that's another as a result of the shift of mobile. you don't have companies able to scale mobilely and scaled to the entire world quickly through the app stores. that's how we were able to get to double digit run rates with
24 employees without ever raising any money. there's a good chance we'll, you know, do a deal at some point. we obviously have been in conversations with many of these potential capital partners but the testament to the power and scale of mobile is the fact that we were able to get to where we got without raising a cent. it is kind of -- it kind of changes the way that companies can be built in a way. >> absolutely. listen we have been seeing more money go into the private market. uber at 40 billion so it's a conversation to be had about what's taking place in the venture capital world. we'll leave it there. >> i've never air brushed a photo app. i haven't. >> come on. >> i'm not on instagram. >> get with the program. >> i'm real baby. i'm real. >> filters improve everything. >> but when you meet people in real life i don't want them to be like oh my god. >> i hear that's a concern for those on the dating websites.
>> baltimore is a city on edge as widespread rioting forced the governor to call a state of emergency. violence erupted in the wake of a man that died from injuries suffered while in police custody. joining us with the story is darcy spencer from nbc news. >> good morning. it was a night of devastating violence here in the city of baltimore yesterday. i'm sure you saw the images of rioting, looting, arson, just devastating this city. it was a little bit quiter in the overnight hours but still numerous fires were set. businesses were broken into. people breaking the glass. going into these businesses. taking what they want and running away. police are saying that they made about 2 dozen arrests but there were a lot more people than that committing crimes in the city and looting and setting the
fires. this morning when we were driving in from the nation's capitol we could smell the smoke still in the air as we enter the city and right now just blocks away from where we are there's a three alarm fire going on now. we believe it's a warehouse fire in an apartment complex that was under construction for senior citizens went up in flames last night. so definitely a lot of devastation here. there's going to be a curfew instituted starting tonight at 10:00 and it's going to last until 5:00 in the morning. the mayor here trying to institute calm in making sure we don't have another night tonight like we did last night. >> for now, thank you so much. >> it's a scary day after a night of riots, fires and heart break. darcy spencer of nbc news. >> now we're heading into a bit of a break. more analysis coming up here on worldwide exchange. we're all enjoying your tweets this morning by the way. you can still find us on twitter @seemacnbc. find us on e-mail.
you'll figure it out. you can find us. we'll leave you with a look at the futures and how they're trading ahead of the open on wall street. we're a couple of hours away but that's what we're seeing. 't collect killer whales from the wild. and haven't for 35 years. with the hightest standard of animal care in the world, our whales are healthy. they're thriving. i wouldn't work here if they weren't. and government research shows they live just as long as whales in the wild. caring for these whales, we have a great responsibility to get that right. and we take it very seriously. because we love them. and we know you love them too.
dividend hike as earnings easily beat estimates thanks to a surge in iphone 6 sales in china. >> twitter gets set to steal the show reporting after the bell today. they're honing in on growth from mobile advertising. >> markets pause for a breather keeping an eye on the fed two-day meeting which begins today. >> violence erupts in baltimore after the funeral of a man that died in police custody. his family calls for calm as the mayor imposes a curfew and calls in the national guard. >> welcome to the show if you're just tuning in. thank you for joining us here on cnbc. nasdaq indicating a higher open by around 3 points. positive earnings from amazon and my vo soft provide a catalyst to move to the upside but after three years of double digit gains u.s. markets have had a considerably difficult time staying in positive territory.
now here in europe we have been seeing a bull run and we're mostly higher. actually only higher in spain right now. down about 84 points. a lot of focus on energy and oil earnings. later we'll hear from stat oil, chevron and others. we'll hear how the oil giants are fairing given the dramatic drop in oil prices we have been seeing over the past couple of months but in the month of april oil prices up about 18%. ftse 1009 days to go. some political uncertainty being priced in right now. we're looking at the index down about 56 points. i want to get back to one sector we were talking about at the top of the show. bio tech. we did see a significant sell off in the bio tech sector yesterday. the ibb which is what you're
seeing now sitting at its 50 day moving average. tracking for its worst day in a month. it did lose about 3.8% in yesterday's trade. some analysts say it has to do with mixed earnings from the bio tech sector. others say it has to do with it given the run we've been seeing in stocks over the past year. >> thank you, seema. u.s.pharma giants in focus today. we're set to report first quarter results. what should we be expecting? revenue and profits are set to be lower as the company grapples with inspiring pattons among other things. merick also with a falling first quarter revenues. their treatment has been under pressure amid stiff competition and safety concerns as well. let's talk more about these companies. the program manager for life sciences at frost and sullivan. good to have you with us. what are your expectations in
our own words for pfizer and merick. >> let me start with pfizer. it's not going to change dramatically but we've seen how the sale of the top brand is doing. as well as other products. >> before you get to merick i want to talk about pfizer. it generates about 60% of its revenue overseas. how much do you expect the stronger dollar to over the quarter. >> it will have a strong impact. it's coming from outside the u.s. which means this is the same level of the u.s. dollar is going to maintain and almost $2.8 billion could be shaved off of the top line. >> what about merick given it's international exposure. >> the same as well. >> but if you had to pick one company over the other which one do you think has more positivity going forward given pipeline and
mna we have been seeing? >> i would say merick has a strong pipeline in terms of the growth prospects compared to pfizer because they're strong in some of the segments. it could lead into the market share and that is -- koul generate $4 billion over the next four years. >> we always talk about these patnents expiring. the stock is trading near a 10 week high. we're close to ten year high. we were talking about whether or not companies are overvalued and a viewer e-mailed through and said you have to bear in mind when you're talking about the stock market highs that we seem to forget that 5 to 7 years have passed since these highs were made and earnings have increased significantly since the earlier
high so to make the statement without adjusting for the changed earnings is wrong. absolutely correct to this viewer that writes in. are we hitting highs that are sustainable or will we have to see it from pfizer in particular. >> they had a good last two quarters so i don't really see this trend to continue for this year. we should also see it's in the last quarter and that will certainly help it have a strong presence. it could have a good impact in the oncology space because the big thing that happened is the launch and that could be a game changer for the company in the breast cancer segment. >> all right. we'll leave it there. i want to point out that so far
if you look at year to date performance of the ten s&p sectors health care is the best performing sector and this is coming after a big run in the sector last year as well. so a lot of bulls in the health care space. we should point out mna has been a big factor. larger pharma companies buying smaller bio tech companies. as you point out it will be an on going head wind. it's not going to go away. i think they're the two catalyst helping fuel the health care sector. the question is at what point does valuation become a concern. >> i know but just because we hit highs it doesn't mean that we necessarily have to adjust immediately, right? some say we still have more to go and if you're looking at mna and new drugs and we have been
talking about this for years but if they get it right, they get it right. if it's wrong there's always an adjustment. >> even mna, if you pick the wrong company you spent a billion dollars on a company that doesn't add value to your core growth. you take a look at a company like gilead that made a key acquisition for $11 billion a couple of years ago. at that time investor was like why are you spending so much money on this smaller company but now hepatitis c is such a big part of their growth portfolio. for some companies acquisitions paid a big part. >> also other drugs as well. >> generics. >> twitter. >> love it. >> twitter. >> i thought you were going to say tweet us. >> i was going to say you already said that a couple of times now. no, i'm prompting you. >> a lead in. twitter reports earnings today after the bell. analysts are expecting an increase in earnings from the
previous year. the big focus will be on mobile ad revenue shares and they're up nearly 45% year to date. >> on top of that we'll be talking about dupont because it faces off with a well-known activist investor ahead of the company's annual meeting. the latest on the battle for control of the board straight ahead. you're watching worldwide exchange. you can find us on twitter or on e-mail. go online. you'll figure it out.
hi everybody. welcome back to worldwide exchange. good morning dupont is locked in a con ten shl battle over board seats with a prom nlt activist investor that just two weeks before the company's annual meeting is making noises. kate rogers is at cnbc's headquaters with more. >> they're reportedly open ahead of the annual shareholders meeting scheduled for may 14th. peltz pushed for changes at companies including heinz and kraft foods. on monday influential advisory form iss recommended shareholders vote in favor of
him joining the board. it backed a second nominee and not two others. in it's report they said the presence on the company's board might be not simply desirable but necessary. due upon's director and management use slight of hand to inflate the companies competitive strength. iss has the ability to sway the minds of institutional investors but 30% of shares are held by retail investors that don't receive recommendations. they built a nearly 3% stake making it the company's 5th largest shareholder. the chemical giant has fallen behind rivals and might be better off splitting up it's businesses. the presence on the board would be disruptive and plans to cut costs would hurt vital spending on research and development. in january dupont announced it would speed up it's cost cutting plans which are now saving $1 billion this year. >> kate good seeing you this morning. thank you very much. >> let's look at the other top
stories at this hour. citi group shareholders will vote on a proposal today demanding more information about those that leave for government jobs. citi came under fire when jack lou was picked to be u.s. treasury secretary. >> now the u.s. department of agriculture and iowa officials say initial tests found five possible new case of bird flu at commercial poultry sites in the state. if confirmed they would an estimated 6 million birds. more than 9.5 million in total would be culled. that's 20% of the state's egg laying chickens. >> the mayor of baltimore is imposing an overnight curfew starting tuesday night following violent protests that plunged the city into chaos. rioters clashed with police and set cars and buildings on fire and looted local businesses hour
hours after the funeral of freddie gray. at least 15 officers have been hurt and two dozen people arrested. maryland governor has declared a state of emergency and called in the national guard. >> this is not protesting. this is not your first amendment rights. this is just criminal acts doing damage to a community that is challenged and doesn't need this and doesn't need to be harmed in a way we have today. >> a reminder of the headlines this hour. china bears fruit for apple as the tech giant beats the street with second quarter earnings. twitter gets set to report after the bell and investors, they eye the fed as it begins it's two-day meeting.
welcome back if you're joining us on worldwide exchange. we saw european markets called slightly lower this morning. all equity markets were trading down by a bit except for athens. just higher by .6%. the rest are are somewhere in the region of .5% to 1%. >> investors are slightly cautious ahead of the two-day policy meeting which kicks off today. s&p 50 down about 4 points. the dow down off about 9 points in premarket trade. keep in mind yesterday we did see the bio tech index. lose about 4%. it's biggest daily percentage loss since march 25th while the s&p health care index losing about 2%. the biggest drag on the s&p. >> now as mentioned the fed starts this two-day meeting today with a decision due on wednesday at 2:00 p.m. eastern. the central bank has already ruld out an april rate hike. so with the economic activity data being weaker recently.
>> let's get you a run down of what to watch, the february home index is out at 9:00 a.m. eastern. an hour after april consumer confidence. bristol myers, murick pfizer and ups before the opening bell and after the bell we hear from go pro and twitter. analysts are expecting it to report an increase from earnings the previous year. the big focus will be on mobile add revenue shares. quite the rebound up about 44% year to dalt. of course this is an important quarter for the company. the social media company. we should also point out that over the past couple of months they have been making some strategic acquisitions. one company in india named zip dial to help strengthen the
company's presence in indiana state yand and periscope. perhaps we'll get more clarity as to how they'll be integrated into twitter's core strategy going forward. >> they have been very smart with some acquisitions and they realize the importance for them to keep developing. they still have a lot of growth pedestrians ten shl and they haven't at all reached penetration rates so twitter on the move as well as share price but over the last six months not a lot of activity compared to other tech stocks out there. >> better than last year when they lost about 40%. what's interesting is a facebook versus twitter chart you'll see facebook was up about 40% in 2014. >> but it's all about longevity for these companies? and renewing themselves. whether or not they can reinvent the tomorrow of what they're using. >> twitter has been differentiating their ad product. mobile app downloads and
providing advertisers more tools to really promote their product out there which is key to their revenue growth going forward. >> definitely. >> twitter earnings on tap later today revenue rose 27% also topping estimates. the company sold 61.2 million iphones up 40% from a year ago. most of those sales came from emerging markets. particularly china where they rose 72%. >> now apple's mountain of cash is growing. it had more than $195 billion. they're planning to return more money to shareholders. it's boosting it's dividend by 11% and it's stock buy back by $50 billion to $140 billion in total. in all apple is pledging to return $200 billion to investors over the next two years. how do you like them apples?
>> there you go. >> apple shares rising by 1% in after hours trade neil. the figures are pretty astounding. investors are already pricing in the good news in apple. >> to the extend. am doesn't move substantially on the numbers itself. prehap as what you have to look at is underneath the drivers of the stock and the detail but one thing if you think of what we're seeing in the earnings season many are talking about significant head winds and massive problems from the currency and the dollar strength. for me what's interesting is am put out a really strong set of results only impacting by currency by 100 basis points on the margin which tells me one thing in particular for us and that is this is a company that has pricing powder. >> but is that growth sustainable? particularly in china where you
have other players fiercely competing in the smartphone space? >> sure. if you thought to expand the addressable market that you have to lower your pricing, that's not happening. you look at that asp strength you'll go over $60 of asps. also chinese growth i'll go back two quarters chinese growth was at 10% year on year in revenues. it's gone above 70% growth. so apple has had 45 beside of revenue from china. so even despite the lure of large numbers there's still fantastic growth. >> they're returning a lot of cash to shareholders. boost in the dividend 11% now. the biggest dividend payer now is apple. topping exxon mobil as well. they're still sitting in with a lot of cash. we're always talking about this massive cash pile that am has. when do you think people will get impatience with what they're doing with the majority of the
cash? >> they were impatient two years ago before they took on the policy. they have taken advantage of low interest rates given the strong credit rating and 11% growth of the dividend will appeal to income growth investors. so r for us apple is an income growth stock and growth stock in itself and value stock because it trades for 20% discount to the nasdaq market itself. >> what was interesting is apple's cash pile continues to grow despite the company's aggressive efforts to buy back shares and also boost it's dividend. but is that concerning that the company is the biggest dividend payer out there? that there's too much versus growth and innovation? >> the good thing is if you look at the record highs whand they said on the call last night which is we have more cash than what we need to invest in the growth of our businesses. >> when does it reach a trillion dollar market cap? what will be the next growth opportunity? is it the apple tv or the watch? >> most people underestimate the
opportunity for the watch. i'll give you one example. the ecosystem people talk about as being sticky for the ecosystem itself. we have 7.5 or 8 times more apps at the launch of the watch than the iphone. three times more than the ipad. so there's a big ecosystem there waiting for the launch. if you look at the overall smart watch market last year we're now looking at am expanding that market by 10 in one year alone. whether you have an estimate on the low end there's a huge upside for potential. >> what about the ipad? because they were weaker. >> you had the mac book air before and the new mac book which really -- the ipad was filling a gap in between product innovations or certainly at the moment and the company themselves expected the cannibalizations. they always had a lower gross margin. as a matter of fact the financials are concerned and as far as the overall stack of the
company is not a negative. >> so you would be a buyer of the apple shares now even at these highs? >> we would. if you look at the scarcity of yield. high quality growth companies as well. which is another thing that we like and we have been very bullish on the chinese consumer and the view is that app ael also fits into that theme too. >> certainly going to be a stock in focus today. thank you for joining us talking about the apple story, partner at aviate global. >> that's it for today's show. we're all done. >> that went by fast lou. >> it's amazing how time flies when you're having fun. back tomorrow. >> back tomorrow. thank you for joining us. you did watch worldwide exchange. we are back at the same time but stick around squawk box is next. >> tune in for closing bell later on this afternoon. i'll see you again. buy for now.
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good morning, dow component, yes. dow component apple does it again. earnings beating the street on strong iphone sales. even raised prices and sold a lot more. now the tech giant is boosting it's stock buy back and raising it's dividend. but the global markets are on high alert as the fed is in focus today. janet yellen gathering the fomc for a policy meeting. plus a bird flu outbreak. new cases now in iowa. millions of birds are affected. it's tuesday, april 28th 2015 and squawk box begins right now.
>> live from new york where business never sleeps, this is squawk box. >> good morning and welcome to squawk box here on cnbc. i'm becky quick with joe kernen and andrew ross sorkin. baltimore burning. injuring 15 police officers. angry crowds were pelting police with rocks as they walked down the street in full protective gear. the violence broke out hours after the funeral for freddie grey that died after suffering a spinal injury while in police custody. maryland called in the national guard and declared a state of emergency. the baltimore mayor calling last night one of baltimore's darkest days and saying the destruction in no way represents the peaceful protest of many. >> i understand anger but what we're seeing isn't anger, it's destruction of a community.