tv Worldwide Exchange CNBC March 12, 2013 5:00am-6:00am EDT
who didn't believe in novak? how could you not? like i say, there is always a bull market somewhere. i promise to try to find it for you here on "mad money." i'll see you tomorrow! welcome to today's "worldwide exchange." these are your headlines from around the world. financials in focus again with italy's biggest retail bank expected to post a fourth quarter loss. sharns in munich re trading higher after they issue a higher than expected profit target for the year. and more power for germany. angela merkel calls for the country to have greater voting rights. and to super size or not to super size, a judge tosses new york city's ban on sugary drinks just as it was set to take effect today.
we've had a seven-day win streak for stocks. we managed to flip into the green and as a result, this is a seven-day win streak. identities the s&p's longest winning streak of the year. so if there's some caution creeping into the markets, you maybe kind of understand why. we are pointed lower this morning, looking to give up some of the gains we've had which has been an impressive week. a quick look at what's happening across europe, we're seeing green across the major index, the ftse mib up 0.7% despite the
fact we get relentless client notes out from major banks. in fact, in just a little bit later today, we're going to see whether we get a new pope elected in italy or at least the beginning of that process. the ftse 100 trying to add about 0.1% this morning. but it's been an uphill battle given what's happening overnight in asia. you saw green mind me in europe, but li sixuan joins us from singapore where it's mostly been red where you are. >> you're right, kelly. asian markets hurt by worries of the recovery. after a volatile day of trade, the shanghai composite give back gains of nearly 1% to finish lower by 1%. the shenzhen tumbled 2.4% today. the markets are down for the fourth strayed session partly due to worries about share fly. we saw profit taking in environmental and agricultural
stocks. mid sized banks took a beating over liquidity concerns. the hang seng extended losses in the afternoon session, ending lower by almost 1%. china life lost over 3% today on trade consumption after the insurer clarified that as chairman comments on better profit for only personal instead of a forecast. but there was a market debut in hong kong. in japan, the nikkei snapped its eight-day winning streak, ending marginally in the red. exporter stocks ended mixed. while the yen has weakened against the green back, the financial stocks retreated earlier on mormon tear easing. south korea's kospi eased 0.5% weighed down by a weaker yen and a geopolitical risk on the peninsula. tracking the losses reversed early gains to end lower by
about 0.6% with resources lagging behind after goldman sachs downgraded the sector. india's sensex is still on the move, but reversing early weakness now trading along the flat line. back to you. >> sixuan, thank you for that. the dow has extended its winning streak for eight days now. where does it go from here? let's ask gina sanchez. are you still bearish? roubini, maybe not the most -- maybe not the guy that's going to tell you, yeah, stocks are going to the moon from here. >> newerel has been positive on stocks here at the beginning. he's been warning of some disappointments later. but you've had a couple of things, sentiment and money flow. money flow has been extremely supportive of stocks in the u.s., and particularly in europe where it's been recovering from
a really, really low level. >> it's been impressive, the performance of european equities and a lot of people are asking how much longer can the fundamentals and market levels continue to disconnect or is there a disconnect? >> there is a disconnect. obviously, in europe, you've seen the lost earnings season was a disdisappointment. and that's not surprising. i'm expecting continued recession. there's going to be a recovery, obviously. i think, you know, roubini's economics is estimating that there should be a recovery by next year, 2014. so from here to there, that's a positive story. but we're still mired in very high unemployment in europe. it's really hard to paint a good picture there. and i think earnings -- forward earnings estimates versus actual estimates that are coming in are still way off track. >> what about buying italy here? not a guy typically bullish on equities. you would think after the performance we had last year, which is a strong one, perhaps
people would start to see no, we can it's super cheap, all of this political turmoil notwithstanding. what is your take? >> i agree with him that it's still hael cheap but it's not as cheap as it used to be. especially particularly in italy where you're looking at banks that are going to have to raise provisions. generally rising npl provisions and earnings don't go hand in hand. >> not usually the most positive situation there. >> definitely not. >> we've seen the mi b sometimes on this board disconnect from other markets. but at the same time, they appear to be rising and falling together. at this point, is it still a case where the ecb backed up in place, that's all we care about? why isn't there more of a sense of concern across these markets? >> well, i think there's an enormous faith that everything is going to turn out okay. the omt is in place and,
therefore, there's a box top. the problem is, you have an italian government that's failing to form. and will say one that is threatening to short of go in the other direction and start to reverse austerity measures. if that happens, then we'll never call on the omt, the back stop. >> all this is getting complicated. as an investor, if you were to say italy is going to roll back on austerity, you would almost need to applaud that, right? italy needs some fundamental growth to convince investors longer term, but if they're not pushing through measures that would hurt growth now, is that not a positive? >> a certain amount of pain has to be felt. the question is, do you feel it now or do you feel it later? and if you don't take the structural reform soon, then at what point do you get more negative repercussions in the future as a result of not taking your medicine now? that's generally the balance. the markets are saying, you know
what? it's all going to be fine. in the end, there's going to be a backstop and everything is going to be okay. i think there's some disappointments later on in the year or early next year. i would say that that's coming down the road. for now, you know, i see a strong sentiment recovery and cash flow. as long as that cash flow is flowing in, that's going to be a big positive. >> we have seen italy and is shape, at least the spread between those ten-year rates narrow considerably during the italian elections. now you're looking there, yield is about 4.611 is 4% for italy and 4.72% for spain. more widening today, about 11 basis points between them. it's interesting to see prices up across the board. it's not just sovereign debt. we're seeing a lot of influence. it's not just equities, it's really across 2 the board allegations are taeg place.
the euro/dollar is down about 0.3%. interesting to see that happening even though we've seen risk across the place generally picking up now. city points out the australian dollar is seeing more volume than the euro trade today. sterling is a little bit weaker. the dollar/yen has been moving quite a bit overnight as sixuan mentioned in her hit. plus turkey, we're seeing some deterioration in the current account situation. that's speeding in. there is also some sign of concern for a lot of these emerging markets. now, two senior members of germany's coalition government approaching for the country to have more voting rights on the ecb's governing council. ryan buderi said the current system is unfair as germany is the biggest contributor to ecb
capital that has the same voting rights as the smallest contributor. coming up on cnbc, our very own julia will be speaking to the president of germany's bundes bank. catch the interview right here coming up later in the day. gina is still with us. you said gina antico is the god of fire. yes. >> symbolic? >> naming a company is not an easy thing to do, but i chose the aztec goddess on of fire because she rules the fires of the volcano. she rules pressure things because they're formed from the fires of the volcano. and the ancient aztecs would bestow upon the households -- >> do you like latin america here? >> there are some interesting consumer stories. that play is a very long-term
play. i think there's robustness to that. >> typically you focus on equities, do you not? >> right. >> but we have seen gold recently starting to bottom out, start to go show signs of moving higher. do you buy into that? do you watch that as a sign of anything? >> well, gold lately has been moving with the forex market. one thing worth noting, you m mentioned forex markets are making headlines this morning. it is interesting that you've seen the euro/dollar start to pile on and net short. >> it's like the question is, is it a good euro fall or a bad euro fall?
gina will particular around for a couple more minutes. in the meantime, it's crunch time in athens as samaras meets with troika to discuss civil service. and it comes as greece's privatization agency launches a tender for the sale and lease back of two dozen state-owned properties including the athens headquarters. greece's privatization fund so far has raised about 2 billion euros. this year, it has a target to raise 276 billion. italy has asked the eu to ask regions that come close to hitting budget targets more flexibility to achieve their balance budgets. with the lingering recession and last month's inconclusive results, some officials want austerity measures imposed to meet the target. today, catholic targets begin in
rome to begin the process of choosing a new pope. a man from iowa has created a basketball playoff bracket game to determine the new pope. and there's a catholic group, youth 2000, which has set up a website to choose a candle who you can play for during the conclave. anyway, long on to adopt a cardinal.oral right now, i should say, right now, math is getting under way. you can hear there and see the shots from the carpals. it's only been a couple of years
you are watching "worldwide exchange." all eyes turn to milan with key italian bank earnings later today. two senior lawmaker res pushing for more new on the ecb governing council. and a state judge has put the lid on mayor bloomberg's sugary drink plan. mayor bloomberg vows to fight on. india's industrial output beats forecasts, but the rate cut is still seen. cpi out earlier showed prices
continued to increase in february up nearly 11% from a year earlier. and it's been a sterling debut for hong kong's largest pawnshop. shares trimmed as much as 30% today. 1.31 versus the issue price of 0.98. that's not surprising while pawnshop shares were oversubscribed more than a thousand times. the company managed to raise $112.5 million. that is at the top end of its ranges. china galaxy securities is reportedly willing to raise -- in an ibo. beijing based company had originally planned to list both the hong kong and the shanghai bourses but skrabd that plan. there are reports that the china galaxy is looking at bringing the total number of underwriters to 16. after that strong debut, you
can't blame them for looking to the market in hong kong. results were bolstered by the lunar new year holiday and easing worries about a food safety share last year. kfc, pizza hut, taco bell with, if you want to pick one? >> yo kiero taco bell. >> you can see investors are pretty relieved. a judge has truck down new york's ban on sugary drinks. it was expected to take effect today. the ban arbitrarily applied to
some beverages and places that sell them. convenience stores were going to be exempt because they fall under state jurisdiction. the judge said mayor bloomberg's board of health intruded on the city council's authority when it opposed the plan. bloomberg has vowed to appeal. >> i don't think it will hurt your bottom line, but even if it did, we're talking about lives versus profit. nobody can make the case that serving 16 owns cups versus 32 ounce cups could cause anybody any appreciable amount of money. i would argue it doesn't have to cost you anything. regardless, i think we all have an obligation to try to do what we can to help each other. >> take a look at shares of coke, pepsi, starbucks and movie theater chains. coca-cola as 0.11 ers this
morning. we want to know what you think about the move. e-mail email@example.com. do you think it's a smart move? >> do i think it should be in place? yes, i do. >> really? >> part of -- >> but you're in the market. >> i guess the point about free market, the problem is the health care costs that go with that down the road are sizable. and i think the point isn't necessarily to reduce sales. the point is to reduce how much you get in one serving. the there is an argument that people eat .drink in excess simply because they're given proportions in excess. >> it will be more time before that ban on sugary drinks goes into effect. still to come on the
the lenders are expected to post losses for the period as the sector continues to struggle with large provisions. and italy's recent sovereign downgrade. for more, phillipe, managing director at pimco, joins us now. it doesn't sound like it will know a pretty picture in the fourth quarter. is there any sign that this is the bottom? >> i don't think this is the level. they will candidate that, you happen, they're all. i don't think you'll continue to see that, especially in light of the recession. you know, they trade at a significant discount. i think partially it is quite savings. but really, again, the pressure on the levels of structure on
the provision in italy is something that's been a bit under the radar. but i think it's coming through, as well. >> there's a negative feedback here and is a lot of the italian banks have been buying italy's debt. have they not? >> right. but i think that's the least poorly performing port follow he yos. the concern here is the level of s&p around 15% and the level of provision in the nfls is very low and it can be adjusted. so i think the pressure is coming from the real economy in italy, not from the sovereign side of things any more.
>> we've seen a rise in bad debt in italy. that tends to harm the small and mid sized banks far more. to what degree is that priced into or sort of the small cap and midcap banks versus the large cap banks which have more liquidity? >> the large cap banks, you're right. i think you will see some pressure there. >> phillipe, are there any names you like here or do you just shy away from the sector altogether? >> so i think it's clearly a high quality play in italy and the one to sick to. when you look at the smaller
lenders, especially looking at the bottom of the cappal structure in the stock, i think that's that. >> but still looking at intessa, shares are up 0.5%. thank you, sir. a little battle over credit derivative losses is headed for a london court. nomura investment bank is looking to defend its role in the risky trades under uk jurisdictions where latitudes more favorable. shares there, as you can see, have been hammered. they were up about 0.1% today. straight ahead on the program, it's two years on from the fukushima disaster. where does the energy sector lie? apparently at the bottom of the ocean. stay tuned to find out more.
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trading higher after the world's biggest re-insurancer issues a larger than spec'd for the year. we'll speak to the head of the bundes bank later on cnbc. and to super size or not to super size? a judge toes new york city in,'s ban on sugary drinks just as it was about to take effect today. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. >> it's going to be eight straight days of gains for the dow and for the s&p 500, not from the looks of things this morning. although, in the past, most of the last phase of this rally we have seen stocks start off in the red, futures, as well. we'll hold our breath and see what happens. but it does look at this point, taking fair value into account, the dow will shed about six points. the nasdaq and the s&p 500
looking to give up a couple of points. the cnbc ftse 300 gives us a fraction of a point. there has been selling across most of asia, what better attitude in europe. the uk being an exception as we just got data showing industrial production was surprisingly weak last month. the ftse is just barely, the xetra dax has just turned enough. it's now going to be an uphill climb. industrial production fell about 1.2% versus the small uptick that was expected month on to. manufacturing production down 1.5%. it was supposed to be flat. how do you make money in these markets? here is what our guests have been telling us all morning.
>> political risk generally tends to associate itself in weakness in sterling against the dollar. we've still got some ways to further fall, probably back towards the 1.45 threshold. now investors are start to go price in pretty extreme negative scenarios for the uk. not to say the uk is going to have a terrific and significant bounceback. but there's a huge amount of pricing in. >> from flattening of demand from the metal companies is going to continue for a while. the rally is probably a short-term one. you should sell into the rally rather than buying into the dip. that would be how i would read the mining industry. i would argue that it will only get positive against by january '16.
so i think it would be -- to be very scared by that prospect, although markets will have to come around the idea that at some point qe stops which from a -- perspective is bad news. from absolute, it's like, okay, it's still very easy. turning now to the u.s., the senate has rejected president obama's request to improve permanent funding to the imf. it's a setback for imf. those reforms require congressional approval because they involve shifting ads 65 billion contribution to an imf treasury fund. the u.s. tried to send that bill. congressman paul ryan is set to unveil the federal today.
ryan says his plan will build approval for the controversial keystone oil pipeline. the proposal will privatize medicare and it's certain to face opposition from senate democrats. paul ryan will be talking to larry kudlow later in the day. gina sanchez is still with us. gina, i want to go back and -- well, before i do that, let's talk about the u.s. since we're on the news. do you buy into equities here inspect do you think the s&p 500 can be next to claim that level? >> he think it's hard to want to buy in here. and if you look at forward earnings, those are going to have to rationalize. average expectations is
somewhere around 108. >> i kraelz this is a redeck yuls mart, but you've done well. i think the jobs report is a little behind. is it the fed who is dictating things here? >> well, obviously, the buy has been to basically -- the markets have had plenty of faith. it's even more so in the u.s. there is a tremendous amount of faith that everything is going to work out okay. fiscal cliff? no problem. now weir headed towards the government shutdown and the markets are saying, no problem, it's going to be fine. >> after seven straight days of gains, usually we see that behavior towards the end of trading, not the beginning. >> and i would say once you get past this next issue, we think
that the market is going to give you the effects at the time. they're there, and i think the markets haven't priced that in. >> and you need someone to tower the second that's. >> gina, thanks very much. >> thank you. still struggling after the fukushima disaster, japan's energy policy needs reviving. they might have found the answer at the bottom of the ocean. >> hi, kelly. the future with energy policy could be about to change as the resource poor country embarks on a new drilling program. the government said their
company has taken out large amounts of methane, which is a key component of natural soils. so it's a promises can cte as a new generation energy source. japan has been struggling to deal with energy short aemgs and increasing costs after fukushima nuclear crisis three years ago. japan will try to create meth yan hydrate policy by 2013 and start production during 2016. coming up, john paulson may be thinking about trading in his
verify and lock. command is locked. five seconds. three, two, one. standing by for capture. the most innovative software on the planet... dragon is captured. is connecting today's leading companies to places beyond it. siemens. answers. i be on to the program. we're just getting news out of spain with its debt auction as it continues to furntd itself for the end of the year.
more on the 12 month. the yield coming in at 0.2% versus 0.88% on february the 12th. coming in at 1.4% versus 1.5%. it's just shy of 2 billion for the six month and about 3.8 billion of the 12-month. bid to cover ratios on the shorter dated paper were higher, the.2% versus 3.9%. and for the 12 month, a little lower, 1.25 versus almost two the last time around. you can see the reaction here across the bond curve. we're seeing yields falling this morning, consistent with what we're seeing with other sovereign paper. the ten-year in spain, 4.72%. if you're just joining us on the program, we'll get to your headlines in a moment. first, the biggest insurer in europe has forecasted a profit of 3 billion euros this year.
stell, the insurance giant it could she additional losses in its unit. up about 1.2% right now. and coastco reported second quarter results this morning. profits better than expected 39%. same-store sales were up 5%. boosts of higher gas prices and stronger foreign currencies. costco, which has about 650 locations in the u.s. plans to open 14 new warehouses by the end of september. addsing about 0.2 outperformancing the program. if you're joining her --
and a state judge puts the lid on new york city's sugary dling ban. and here is a look at today's other top stories. hewlett packard is looking at a takeover of autonomy. reggie gupta said the board laid a solid foundation for hp's turn around. hp has disclosed the uk serious fraud offer as joining the justice department. hp took a massive write-down on the deal last year, accusing mike lynch and others or accounting fraud. h 3/shares up about 0.16 over the last month. quay close slim and the yun's market.
the bill would reign in media giant televitsa, which holds 60% of the broadcast market. and it stipulates any company with the market shares above 50% will be deemed dominant and force sanctions, including forced asset sales 37. >> biven urt better than 2% this morning. and john paulson may be willing to move. u.s. citizens are normally taxed under their income no matter where they live, but under a new law, new immigrants may be exempt from capital gains taxes after they move there. you must spend 183 days a year in puerto rico and prove you have family and social connections there. so he guess everyone is going to
have on move at once if they want to take advantage of the deal. and could washington, d.c. affect the koosh keel talk about this when i come back. [ female announcer ] what if the next big thing, isn't a thing at all? it's lots of things. all waking up. connecting to the global phenomenon we call the internet of everything. ♪ it's going to be amazing. and exciting. and maybe, most remarkably, not that far away. we're going to wake the world up. and watch, with eyes wide, as it gets to work.
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in spain is trying to stay to the upside. we have seen sovereign debt up across the board. u.s. futures now suggesting that it's going to bre hard to continue eight straight days of gains. we've been pointed lower and futures for most of the trading sessions over the last couple of weeks only to reverse and move higher. the questions is what catalyst might help us get there today? at the moment, the dow is looking to fall about 26 points above fair value. today, catholic karnts read in rome to give the chance to be creative. you can tried for a cardinal of your choice or try to gauge the output of the new pope. it will know milan as al tian
banks get results in about an hour tower's times. it was set to take effect today. jackie, are is there huge queues of the 7-eleven? >> that's right, this commute is getting under way. there are a lot of people in new york city. the sugary ban is not going into effect today here. it was struck down by a judge yesterday. the american beverage association issued a statement on this. they said that the court ruling perhaps a slew of business business. and let's talk about that business a little bit.
where we're standing right now is a prime example of how ka prieshus this ban would have been. you have a gourmet food restaurant that would have been affected but it, but right nkts door you have a 7-eleven that wouldn't have been. the concern was that consumers would start to leave the mom and pop stores and they would go to the convenience stores. not only would you have the business impact on the bottom line, but then you have a procedural business. now, mayor bloomberg, of course, does not take this leaning down and he sees this in the best interest of the city and people's health in terms of the relation between sugary drinks and obesity. he is going to do a tour starting on the "today" show and hopping around the city to address this issue. he was on letterman last night,
kelly. >> you're standing in front of a 7-eleven. this is part of the problem with this law. countri countries will to figure out whether it was last night or at another time. they said they weren't, but at the same time there was a concern that there would be a shift in the city as to how consumers would spend their dollars on the sugary drinks. >> thanks for that. in a rare reversal of fortune, the united states has seen its credit rating fall. it's not all rosy for europe as nearly 75% of respondents think a default for greece is likely
or very likely within two years. tom berkeley, author of that report and international editor, time. this is basically your own sovereign ratings gauge. >> it's not unchartered territory to be in 12th place. but the absolute ranking, the rating is -- we rate on a scale of zero co-100. the united states scale is around 88 points and that's the lowest its ever been in the history of the survey. >> when is this information conveying to investors? >> the survey reflects a range of economic and political factors. the u.s. credit rating is a result of the debt increase since we said nurse aren't there
any more, are they? the risk creators at major banks to form the basis for this survey are relatively upbeat on the u.s. economy. they expect growth to continue at a relatively moderate rate. what concerns them is the continued dysfunction. there's a commonality with issues with the government not cooperating well. >> and compare this with norway. >> a small poll lagz, tremendous oil reserves. they now have ads 600 billion sovereign wealth fun for a population of under 10 million people. they're buying tr there some
list where actually lessons can be learned? well, there was a country 40 years ago, few national resources except its people. singapore is, today, one of the most prosperous countries on earth. it's not just a question of natural resources, i think. >> 75% stolen. and some of the are up. there's a history sense that the debt crisis isn't been resolved.
we'll see you tomorrow. you ready? we wanna be our brother's keeper. what's number two we wanna do? bring it up to 90 decatherms. how bout ya, joe? let's go ahead and bring it online. attention on site, attention on site. now starting unit nine. some of the world's cleanest gas turbines are now powering some of america's biggest cities. siemens. answers.