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>> everyone is buzzing about this guy that went to apple. i said brilliant. what i care about with apple is growth. i don't care about who is going there. who is coming there. i need growth. i am jim cramer. i'll see you tomorrow! hi. welcome to today's "worldwide exchange." i'm kelly evans. these are your headlines from around the korworld. this after lawmakers reject the terms of the european bailout by voting against a bank deposit tax. sterling is trading lower as they get ready to set out this year's budget expecting to redirect spending to revive growth and deutsche bank lowers
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its earnings due to mortgage related lawsuits and/ regulator investigations. plenty still happening as we follow the cyprus story for you and explore just what it means for investors across europe and around the world because the market reaction has been relatively muted if you consider the extraordinary nature of these events. cyprus' president is meeting with party leaders this morning after lawmakers last night unanimously rejected a proposed tax on bank deposits. this was crucial to unlocking a $10 billion bailout. the house speaker said the decision had been made for all europeans. >> this decision of the house of the republic of cyprus is
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protecting all the people of the countries of the european union and this is the main message i want to send tonight to all european citizens. >> now meanwhile cyprus' finance minister is appealing to moscow for help fresh from his talks with his counterpart this morning. discussions were constructive but no deal has been struck for a loan. i think we have steve on the phone from moscow. stay there for one second. steve, you just left this meeting where we are potentially looking for cyprus to maybe get some kind of deal here from the russians to help solve their debt problem. sounds like they are coming away empty handed. >> absolutely. there are more talks ongoing. i caught a couple of words with him as he was walking out.
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as you rightly quoted he said talks were constructive. they were ongoing. he told me he was on his way to a different location and that there would be more talks ongoing that have been constructive and then i asked him very specifically about the loan agreement that had been agreed between russia and cyprus in 2011, that's a 2.5 billion euro loan, 4 1/2 year loan. there were question marks in the press about whether this would be a loan which would be extended in terms of term and interest rates lessened. he said to me in response to my question about that loan we are looking beyond that. i'm not sure if we're looking at an extension of loan. people talked about a 5 billion euro figure. what he has done is he's dangled the carrot on the prospect of much larger russian
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participation in some form of rescue package for cyprus. that would be a real bloody nose for the eu which of course had its own deal first agreed and then turned down by parliamentaryians in the last 24 hours. >> we want to get out to carolyn. here's what's interesting. the reason why they are doing this deposit tax in the first place is in order to get a sovereign bailout because the debt level is too high, they have to contribute. they are trying to contribute by basically saying we can't -- there's not enough bonds out there. we can't make bond holders contribute and solve this problem. they need to raise 6 billion euros. they may double this loan with russia. that still doesn't solve the problem even if they get that, does it? >> absolutely. there have to be other ways to find that money whatever the shortfall is to those 5.8 billion euros. you know what i think is very remarkable is the fact that the
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finance minister said that he's going to be staying in russia as long as there is an agreement and that tells you that really this is the only alternative for cyprus right now. everything that's happening here at this point is really a side show. what we can tell you though is the president has been meeting with political leaders for the last two hours and they are looking at a plan b. let me tell you what economists think is most likely. they think that a significant haircut for depositors over 100,000 is still a very likely option and they would be taxed around 15,000 and those below 100,000 would go tax free. on top of that, bond holders would have to be bailed in and there's talks that cyprus could sell state assets in banks and gas reserves most likely to russian investors but at this point all of the hopes are being pinned on what's coming out of
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russia and if all of this fails here's an interesting twist to the story. the archbishop has said that we're happy to give the state all of our resources which would be at least 3 billion euros to help the economy. maybe a little bit of help from heaven. back over to you. >> the archbishop, this is something people should go look up this piece of the story. this is a fascinating piece. he's seen as this spiritual leader there who has been quite vocal. he's been out there talking saying let's get out of the euro and go back to the pound. do we have carolyn? can i briefly ask what it's like on the ground there? we understand that it may be several more days, not just thursday, before people can access their money in cyprus. >> absolutely. initially we know that banks were going to be closed up until tomorrow but at this point there's a lot of speculation that banks will be closed up until tuesday because monday is
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another bank holiday and at this point it's very, very uncertain that we'll get a viable plan b to get the bailout deal in place at this point it doesn't look like we'll get it by tomorrow. at this point we are expecting that banks are going to be closed for a little bit longer. of course that increasing the anxiety on part of depositors here in cyprus. >> absolutely. thanks very much for all of that. i want to introduce liam. steve is on the line. what carolyn is saying about the time frame with banks in cyprus underscores the urgency for cyprus to reach a deal with russians or someone. how likely do you think they come away with meetings with putin saying we got the debt relief we wanted? >> we have to remember the big deadline for cyprus is the 3rd of june when they have to pay back an international bond of 1.5 euros. the eurozone will blink and give cyprus the money. the key phrase i heard is from
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steve there. the european commission, the palace structures in western europe they don't want a bloody nose from moscow. the reality is that moscow is heavily involved in the bailout of western europe in recent years. we all now know about the loan that cyprus was given of $2.5 billion in 2011. we had negotiation winot that lg ago. russia is involved. it will be involved. this country has $500 billion of reserve. third biggest reserves in the world. it has 10% of gdp as total sovereign debt. it's completely natural culturally that they are looking to russia. >> very valid points.
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understating the role of russia in this. the flows of money into cyprus and from cyprus transferred back to russia are absolutely enormous. many are taking advantage of low corporate tax rates around 10% in cyprus. i want to draw on liam's knowledge of russia particularly and especially the administration of putin. i'm just wondering they have questions over capital flight. we lost $60 billion of capital out of russia last year. how happy or unhappy is putin with the situation where the biggest provider for russia is coming out of russian money in cyprus. surely he would prefer that money to stay in the country and be invested domestically rather than being offshore and coming back in. >> the capital flight is a complex issue. a lot of the flight is russian companies reinvesting companies abroad. russian companies buying up
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foreign companies. all of these things labeled as capital flight. they want to use that notion in the markets to keep the lid on and stop appreciation without having to do a brazilian style tax. >> why does that investment in russia have to go out of russia first of all and we know according to moody's that $120 billion went out of russia into cyprus in 2011 and then $130 billion in the same year went back into russia. what i'm saying is from a government perspective in russia, addressing this in a broader issue and not just capital flight, do russians want 120 going out and 130 going back in. it underlines the fact that putin doesn't control a lot of money going out of the country. >> that's a good thing. it's a capitalist society. the situation between russia and
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cyprus is partly rich russians using cyprus. that's one thing to say. the second thing is the way russian companies are structured is the legacy of the fact that 10 or 15 years ago russians wanted to do business with the world but their own structures were so underdeveloped because they were so young because they had to use russia and they had to use cyprus. it isn't sustainable in the medium term. more and more of the market is coming back offshore. a major initiative to make moscow an international financial center. apart from that, you have to look at the diplomacy of this. it looks as if the deposit grab is being deliberately designed in order to tax russian companies and relatively wealthy russians. about a third of the deposits in cyprus we know are foreign. a large chunk of them are
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russian. russia didn't get the eurozone into this mess. russia has been there to help. >> cyprus knows having turned to russia for help, it's policy makers who are opposed to higher tax on higher earnings in those banks and it is to some extent an ironic legacy because it was russia's bank failures that made cyprus a part of russians keeping their money in safer places offshore and reinvesting when the appropriate time came and now it's the same crisis in the eurozone which is driving the pendulum back the other way. steve, can you give us a sense of what happens now in moscow? >> well, there's many, many ways that the russians could lose out on this under the current plan. the risk of default. risk of changes to domestic tax rates that we have been alluded to that are attractive for those russian companies in cyprus. in terms of the broader solution, whether it is just the
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changing of the terms of that 2.5 billion euro loan, an extension, another 5 billion which is sensibly would cover most of the money which would have been raised by the deposit tax. i'll put this forward. the more risk there is now associated with companies, countries, individuals holding money in cyprus, surely those companies and countries and individuals will not want to keep their money in cyprus and you're going to risk capital flight the minute those controls come off whether they are russian investors are global investors and more money that leaves the system, the larger the bailout has to be and there is the problem unluck unlocked eu proposal. >> thank you very much. appreciate your time. here's a look at what's happening in markets as we digest news flow. it's green behind me. this goes back to the point people are making when it comes to the crisis. despite the extraordinary nature, we're still looking at a
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market reaction that views this as more negative for cyprus and more negative for greece than it does for risk sentiment more broadly. dow is looking down about 45 points at the open. nasdaq and s&p 500 are pointed higher. if you look across european markets consistent with early trading even ftse in italy one of the countries seen as most vulnerable seeing equities higher. spain is adding half a percent. ftse 100 rallying as well. here's a look at sovereign bond space. more of a checkered pattern. we're seeing it sell-off ahead of the budget today. italy is seeing a debt rally. we see more pressure on spain. it's back above the 5% level today. this will be an important one to watch. for more on market reaction across the world, let's get out to asia. let's get a summary of how a tiny island of 1 million people
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is affecting asia's population of a couple billion. >> a couple billion with chinese population there. today is the first ever international day of happiness and chinese investors indeed enjoyed the cheerful momentum with shanghai composite rallying 2.7%. best day in two months. banks made strong gains ahead of earnings kicking off this friday and this on news that it may ease rules on deposits and free up more capital. property majors also up for the third straight session after details of china's property curve show the situation wasn't as bad as expected. many developers announced plans to expand the footprint in commercial real estate. there was support in hong kong with hang seng rebounding 1% today. china telecom gained 0.8% after earnings topped expectations.
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let's not forget that investors are looking out for tomorrow's hsbc pmi data for more trading cues. asian markets traded cautiously on cyprus concerns ahead of today's fed meeting. cost eased 1% with europe sensitive financials and ship builders leading the losses and in australia weakness in resources dragged it lower by 0.4% and in india trading down by 0.7% on lingering concerns in terms of the country's political events. back to you. >> okay. thank you very much for that. coming up, speaking of political events, president obama makes his first official trip to israel as a u.s. president. this after a recent poll shows only 10% of israelis view him favorably. we'll be live in jerusalem with more when we come back. don't go anywhere. zap technology.
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now the tiny island of cyprus' finance minister is appealing to russia for help. fresh off talks this morning, negotiations were constructive but no deal has been struck for a loan or further aid at this
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time. steve sedgwick spoke with the finance minister after that meeting. here's what he had to say. >> a very good first meeting. very constructive. very honest discussion. we underscored how difficult the situation is and we'll now continue our discussions to find a solution by which we will get -- we hope we'll get some support from russia. >> in terms of that support, are we talking about a change of terms for the current existing 2.5 billion euro loan and an extension of 5 billion loan in addition to that? >> we are talking about things beyond that. >> in what way would this be beyond that? >> we don't know yet. we don't know yet. we don't have any details. we just continue the discussions and they're waiting for us now to continue the discussions in another place.
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>> how long will they last? >> for as long as it takes. we'll be here until we get some agreement. >> great work by steve. it's not easy. you can hear more from that interview in we speak with steve coming up in the program. in the meantime, president obama is expected to arrive in israel later today to meet with prime minister benjamin netanyahu on a broad range of security issues. it's the first time he's visited the country as president and only the second time he's been to the middle east since taking office. we are joined now from jerusalem. what's the mood there ahead of this visit? >> hi there, kelly. both israelis and palestinians aren't expecting much from president obama's visit. the obama administration made it clear that it's a listening tour and he'll speak to israeli and palestinian officials to get the lay of the land of where they see the future of the region but that being said, secretary of state john kerry is also here at the moment in jerusalem. he will be making these meetings
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and these rounds as well. he'll stay in the region after president obama leaves. he'll come back to jerusalem, speak to israeli officials about possibly starting peace talks -- starting peace talks again to find resolution when it comes to israeli/palestinian issue. it will be interesting to see what president obama says tomorrow when he speaks in front of hundreds of israeli students. he's made some strong words in the past condemning settlement construction in the occupied territories of the palestinians in the west bank. interesting to see what he has to say to these israeli students tomorrow. kelly? >> great stuff. thanks very much for that. straight ahead on the program, the internet isn't a vending machine. that's according to our next guest. he's the ceo of e-commerce giant. find out why he thinks you should check out with more than just profit in your basket. ♪
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[ male announcer ] how could switchgrass in argentina, change engineering in dubai, aluminum production in south africa, and the aerospace industry in the u.s.? at t. rowe price, we understand the connections of a complex, global economy. it's just one reason over 75% of our mutual funds beat their 10-year lipper average. t. rowe price. invest with confidence. request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing.
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welcome welcome back to the program. rakuten is the biggest retailer. they have expanded across southeast asia and now global domination is on the agenda.
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we're pleased to be joined by the ceo of rakuten. welcome. how can you afford to grow so much in so many different places when they call this an global internet vending machine. >> we are growing our business inside japan and from five years ago we decided to go global and we globalized our business. we believe our business model is different from our global competitors. we are trying to enable small to medium size merchants to sell products online and make a marketplace in a collaborative manner. i think we are a combination of franchising and not only provide the traffic and system.
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we advocate to small to medium sized merchants who have a good product and good sense of service mind on how to sell a product online. >> almost like a or something. not exactly. the point being what's the most profitable part of this business? ultimately you can't just compete on price. that's just a race to zero. >> of course we invest in many of those companies and are trying to enable the small to medium sized merchant to sell against the giants by enabling for logistics as well. we provide the service in france and in japan and we are trying to globalize our services. not only just providing i.t. and expertise but we're providing entire platform and our merchants are energetic and unique and attractive.
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that's how we compete. >> how much does the weaker yen help when it comes to this global expansion or just profitability overseas? >> we personally prefer the stronger yen because we can buy more companies. merchants in japan love the weaker yen because they can export and sell to the global customers. >> that's a fascinating point though. you are aggressively expanding. where do you prefer to see the yen here? >> the exchange rate? >> yes. >> well, i have no preference. i think that maybe 80 yen was a little bit too strong for japanese yen. the current level seems perfectly fine. and the right exchange right right now. >> what about policy changes that have been happening in japan? you've got the prime minister after a series of years attempting to fight deflation and factors.
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politically, economically, are policies supportive for you as ceo of this business that's trying to expand globally? how do you feel about the current state? >> i'm on his council of the japanese competitiveness. i'm one of the ten advisers. and the fact that he chose me to be one of the core member to revitalize the japanese economy tells how different he is from his predecessor. he's of course young. he is extremely pro-internet. he decided to allow the diet members or the candidates to use internet communication tools, which was not allowed in japan, but we are so behind. >> you're not the only ones. president obama had to get special approval for his blackberry. it seems we're sort of slowly dragging government into the
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future. >> in japan you couldn't basically edit your webpage or you could e-mail during an election campaign. now the government is trying to change that and they're willing to change i think. >> we will have to leave it there. breaking data coming up. fascinating point about the yen how stronger yen helps if you're the buyer of some of these companies. thank you very much, sir. the data is out as we wait from the u.k. today is a huge day in britain. we have the budget. government under pressure because they haven't met the targets they initially laid out. still the economy on the employment side holding up reasonably well. the question is whether that has continue. we'll see if we get unemployment figures out here in a second. from looking at the bank of england minutes there was a 9-0 vote to keep rates unchanged. 6-3 vote to keep the program at the current size.
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again, governor king, fisher and miles wanted a $25 billion extension to the quantitative easing program. king outvoted yet again. let me see if i get the employment data up for you here. it looks like the three-month average hourly earnings including bonuses for britain here are at the lowest in three months. unemployment level rising. unemployment rate 7.8%. the level rising by 7,000. that's the first increase in a couple months time. let's get analysis here from melanie baker. i'll try to continue to pull up more figures. what's your initial reaction to the minutes, the employment data and all of this ahead of a critical budget statement later today. >> i think rising claim of unemployment is a disappointment. we hoped to see a four on the
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data today. perhaps it isn't surprising that we see a bit of a rise this month. if we see that happening again over successive months that will become quite a concern. on the minutes we were hoping to get closer. it's still a relatively close vote in terms of qe. we think qe whether they do more will be a close call in the coming months. that said if they're not doing qe now and we're in the forecast that the economy improves in the second half of the year, we don't expect them to do more qe ultimately. >> we see reaction. sterling gained after the minutes showed unchanged vote for more qe. stay there. we want to get more thoughts from you and we'll hear from ross westgate ahead of the u.k. budget release. what do we expect from george osbourne now on twitter by the way? stay tuned. we'll also leave you with a look at how futures are trading ahead of the open on wall street and they are reflect what's happening inside cyprus and
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russia today. 50 points almost for the dow. we'll be right back.
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welcome back welcome back to "worldwide exchange." cyprus pinning hopes on russia. the finance minister says talks are constructive and tells cnbc he will not leave until an agreement is reached. >> how long will discussions last for?
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rest of today? >> for as long as it takes. we'll be here until we get some agreement. >> and this after lawmakers reject the terms of a european bailout by voting against bank deposit tax and sterling trading lower as the u.k. chancellor george osbourne gets ready to set out this year's budget. he'll direct government spending to invest in the economy and deutsche bank lowers its earnings on mortgage related lawsuits and regulatory investigations. okay. big day in britain today. u.k. finance minister will walk a fiscal tight rope. the first budget since the country lost the aaa rating.
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the government isn't expected to unleash any extraordinary measures to jump-start growth. ahead of all that, ross westgate is down in front of the house of parliament at westminster. melanie baker also still with us. so, ross, first to you. what do you think we'll hear from george osbourne later today? >> no change in the overall strategy. we're only three years into an eight-year plan of austerity to try to put public finances back in order. he's blown off his original targets when he got into the power because of lack of growth and tax receipts lower than expected. headline borrowing we expect to be forecast to be high for this year taking out extraordinary measures of interest back from qe of course. it was going to be 80 billion as well. there's not going to be any planned deviation from where they want to go on the fiscal side. they have been talking about -- we heard this report they'll get departments to cut another 2% of
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budgets. that may free up 2.5 billion. some i have seen 10 billion may go into infrastructure spending. that's small change. i heard one person describe 2.5 billion as three days worth of borrowing. so it's not big money. it may prime a few pumps but not more than that. of course we get the forecast out that will be downgraded because they are pretty much above average consensus. that may not have meaningful impact on where we go deficit reduction. you saw minutes 6-3. there was expectation we had noises out from tucker that perhaps there might have been a bigger number voting for qe. what we will look at today is to see what osbourne does with the bank of england and there's a bunch of things he might do from amending the target, inflation target to changing the bank of
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england act saying we'll put in a jewel mandate. that may be more of a focus than anything he says about borrowing figures and growth numbers. >> absolutely. you can look at the sterling reaction here, ross. we're spiking above 151 now on the back of those minutes. melanie, over to you. i guess investors would have liked to see hints of a more accommodative bank of england here during the last meeting. might there not be more of a policy shift under way perhaps as ross said related to even changing the mandate? >> in terms of what we're expecting today, we do think that it might be the more interesting of the budget to watch. i wouldn't expect any big changes today. i think what he may do is announce a review of the policy fra framework to look at this in more detail. we may get wording changes.
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some smaller wording changes but in the area of about flexibility about how long the bank of england can leave it before inflation returns to target. the wording at the moment is pretty tight on that and could match wording better to what bank of england is doing at the moment. >> we'll leave it there. if you want to follow this, george osbourne is on twitter. >> i have been following. i think one of the other interesting things very briefly as we saw that tick up in inflation yesterday it will be interesting whether he says we'll move away from rpi. what he's going to want to do is see if there's anything to take pressure off real wages because of inflation in the system. >> and we're only seeing a small rise in those wages. okay. we'll have more with ross from cnbc as we bring you special
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coverage for u.k. budget day. i'll kick that off at noon here local time. here's a look at futures. again in the green. even as the saga continues in cyprus, the dow points up by better than 50 points. nasdaq and s&p small gains. ftse is higher. so cyprus turns to russia for help after lawmakers strike down a key bank tax. is moscow feeling the love? we'll hear from the finance minister when we come back. ressive? a talking car. but i'll tell you what impresses me. a talking train. this ge locomotive can tell you exactly where it is, what it's carrying, while using less fuel. delivering whatever the world needs, when it needs it. ♪ after all, what's the point of talking if you don't have something important to say?
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just note your mileage and zap ! you're outta there ! we'll e-mail your receipt in a flash, too. it's just another way you'll be traveling at the speed of hertz. cyprus' finance minister is applying to russia for help. following talks with his russia counteart t this morning, he called negotiations constructive but says no deal had been struck for a further loan at this time. steve sedgwick spoke with the finance minister earlier this morning. he joins us now from moscow. great work chasing him down. it sounds like there's a lot of work to do if cyprus wants more help from russia to pay off its debt. >> a lot of work to do.
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we're outside of the kremlin earlier and finance minister and now outside the embassy because we're chasing this story down and trying to find out if there's any clarity on the request from cyprus and what they are asking the russians and what russians are offering and they would love to sort out something and give a bloody nose to the european union which excluded them from earlier talks. let's listen in one more time to what he said to me earlier. >> a very good first meeting. very constructive. very honest discussion. we underscored how difficult the situation is and we'll continue our discussions to find a solution by which we hope we will get some support from russia. >> in terms of that support, are we talking about a change of terms for the current existing
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$2.5 billion euro loan and extension 5 billion loan in addition to that? >> we are talking about things beyond that. >> what way would this be beyond that, sir? >> we don't know yet. we don't know yet. we don't have any details. we just continue the discussions and they're waiting for us now to continue the discussions in another place. >> how long will the discussions last? >> for as long as it takes. we will be here until we get some agreement. >> so just as mario said last summer, as long as it takes, those are the words from cyprus' finance minister in russia trying to get help for the country paying down debt. these are headlines. cyprus turning to russia for help. will the u.k. government back down on austerity and u.s. investors cut down to the fed's latest policy decision waiting for news from the press conference this afternoon.
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fedex reports earnings in just a couple of hours. we'll tell you what to expect from the packaging giant and why the company sees long-term rebound for the u.s. economy. that's all coming up when we 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. tomorrow starts here.
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[ male announcer ] how could switchgrass in argentina, change engineering in dubai, aluminum production in south africa, and the aerospace industry in the u.s.?
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at t. rowe price, we understand the connections of a complex, global economy. it's just one reason over 75% of our mutual funds beat their 10-year lipper average. t. rowe price. invest with confidence. request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing. welcome welcome back to "worldwide exchange." here are the top stories we're following. jpmorgan chase reached a settlement with mf global to replace cash that was misplaced with trader accounts in 2011. jpm will return $29 million relating to other agreements. deutsche bank the biggest
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gainer this morning after the group received 2012 earnings to reflect revised costs. profit has been cut by 600 million euros while provisions for legal costs have risen to 2.4 billion euros. analysts focused on the fact that the bank reaffirmed its target of 8.5%. and freddie mac is suing more than a dozen major global banks alleging they caused the backer losses. the lawsuit names defendants major u.s. banks including b of a and global lenders and british bankers association which was responsible for calculating. the banks are accused of acting to hold it down to hide financial problems and boost products.
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extraordinary move. here's a look at what's on the agenda today in the u.s. the fed releases its decision on interest rates and its economic projections at 2:00 p.m. eastern. that will be followed by a quarterly press briefing with fed chief ben bernanke at 2:30 p.m. eastern because we all love that. shipping company fedex due to report fiscal third quarter earnings in just a few hours time. fedex expects earnings at 1.40 a share compared to 1.65 a share in the same period a year earlier. joining us now, senior analyst covering the sector. scott, i understand the weather there has been crazy. we're glad that you made it. i understand the weather may have affected earnings in this quarter. >> thanks. good morning, kelly. that's true. the weather was impactful recently and during the february ending quarter. we think it could -- we're estimating $1.35 for this quarter announced in a couple hours versus the street a few
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pennies higher. we think there's downside but we think it will come in within the range of $1.25 to $1.45. that's guidance range. as long as it's in that range, we think the stock will be in good shape because investors are looking forward to the years where we expect accelerated growth in fedex. >> you see 15% earnings growth for the next couple years. do you want to hold a fedex even a u.p.s. at a time when base metals are underperforming. >> on the fedex story we see there's a realignment program that's going to improve profitability over the coming few years and we do believe that there's going to be an improvement in the u.s. domestic and global economy over the coming few years. with that both fedex and u.p.s. are powerful stories in our opinion. >> it's interesting to go back to this point. one of the points that i love is that both u.p.s. and fedex when
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they benefited for the last couple days, global trade growing faster which itself was growing quickly now we're seeing a regime shift and global trade is not growing as quickly and neither is global gdp. that's the fundamental argument for holding these companies as we have slower demand for this period now. >> sure. you're right. the dynamic between global trade and global gdp was much higher for global trade twice as high historically and then this past summer we saw that we went to parity and we anticipate that's going to separate that global trade will again grow faster than global gdp and that bodes well for fedex and gps. we're at an inflection point. we see initial trends as that global trade picking up and some asia volumes picking up in recent months so we do feel good
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looking ahead to the next couple years we'll see global trade outpacing global gdp and good for these names. >> fedex outperformed by ten percentage points over the last six months up 25% versus 15% for u.p.s. is that outperformance justified and do you expect it to continue? >> u.p.s. was in the process of looking at tnt for an acquisition. that did not pass. so we think that disrupted that story slightly. fedex -- both names are levered to improving u.s. and global economy. a little bit more leverage in fedex. and investors are excited about this realignment program. largest in history that has the opportunity to bring operating margin from the mid to high
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single digits to double digits over the coming two to three years and i think that's probably something to do with it as well. >> should they are worried about cyprus? >> you know, the past couple of summers we've seen disruption from european issues. i don't know if this is going to be enough to really disrupt these two names. we'll see where it leads. at this point i don't think it will be too impactful to either. >> markets do look to shrug it off. numbers due from fedex in a couple hours time. scott, thanks very much. european markets as we mentioned shrugging off to some extent the latest news out of cyprus even as we get comments saying that cypriot banks need solvency only if they recapitalize through a bailout process trying to get a deal in place potentially with russia so banks can reopen in
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cyprus. you look at european reaction. sovereign yields were slightly higher but italy is falling and here's a look at the u.s. looking to open up by more than 50 points on the nasdaq and s&p 500 also pointed higher. for european viewers, don't forget we'll have special coverage of u.k. budget day. i'll be joined by jeff for that kicking off at noon local time. the question is whether there could be any change to the policy mandate for the bank of england ahead of the governor taking over this summer and the federal reserve later today. that does it for us here on "worldwide exchange." thank you so much for tuning in. i'm kelly evans. up next, u.s. "squawk box." hope it see you later. have a great day.
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today is gonna be an important day for us. 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.


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