the shanghai market is down 1.6%. a lot of concerns about a big ipo coming on to the market. and the bombay sensex is at the moment down 0.7%. in terms of crude oil, let's see how that is stacking up, as well. nymex light sweet crude is trading up $1.17, $65.4 is continue to go climb. right now brent is trading along the lines of -- there we go. $66.35 a barrel. a bit flat. not moving in tandem with nymex as i thought. >> patience is a virtue. hi, christine. here in the u.s., we've got the futures point to go a bit of a retreat right now. we've got the dow down 26

points. the nasdaq yesterday we saw gains on cisco, disney, and caterpillar. caterpillar will report today a full vote of earnings today but, of course, the big headline of the day may very well be ben bernanke testifying in a semi-annual testimony before congress that's likely to influence bond markets. so far, though, we are seeing a bit of enthusiasm with regards of bernanke's comments. he has an opinion piece in the wall street journal saying it won't be all that hard. right now, we've got the ten-year bund at 3.04%. german officials saying they think the downturn is pretty much near an end. the ten-year yield in the u.s. for the ten-year note has moved up to 3.62%. gold at this hour is trading to the upside, as well, up nearly 1.5% at $948.70.

fed chairman ben bernanke is set to deliver a fresh report today before congress. on wednesday, bernanke will go before the senate banking market. in an op-ed piece in the wall street journal, he says the huge amounts of money that the fed has pumped into the system will not undercut its ability to raise interest rates when the time is right. he says it's like an easy policy will be needed for some time, but as the economy recovery takes hold, the fed will need to tighten monetary policy to prevent, quote, an inflation problem down the road. joining us now is christian blaabjerg, market strategy at saxo bank, and steven davesys, the ceo at chaplain wealth management. we're having a bit of a round table of sorts. gentlemen, i'm not sure if you got a chance to read better

bernanke's piece in the wall street journal, but he essentially says, we're going to need to keep interest rates very low and we understand the risks of spurring more inflation here. but we have an exit strategy. a lot of banks are keeping their reserves at the federal reserve right now. what we'll do is raise the rate that we pay them in order to keep them from lending out too much money. does it sound like a good exit strategy, christian? >> well, it does. it's obvious the short-term interest rates need to be kept low. because the funds flowing to customers like you and i and ordinary companies are still very low and we need to get banking lending out to customers again. bankings are hoarding reserves at the federal reserve and the point is that we need to see this flow starting again in order for the economy to pick up. because what you initially also said in your introduction is that the german officials are

now starting to believe a recovery in germany. we have a negative stance on this issue simply due to the fact that the german banking system is due to a very, very troubled water right now. >> steven, what's your thought on this? do you think bernanke is right saying it's going to be relatively easy to turn off the spigot? >> well, i think what we've all learned is that we're learning as we go along. we're in unprecedented territory as far as the measures that could be used to work our way through this crisis and therefore, we're learning as to how the mechanisms will function when we try to come out the other side. i think the key thing is that demand still remains relatively anem anemic. we're looking at relatively weak

levels at global trade growth. until those key issues begin to turn around, it's difficult to see there will be any room for tightening for the foreseeable future. >> christian, how does this sort of tie in at the moment? and steven? how does this tie into what we do with strategy? because we've seen this rally the last six days. if it goes on for much longer, is it going to make money managers think i need to be a part of this? could there be a self- saving money? steven, you can start. >> in a word, yes. i mean, certainly -- it's been very interesting and slightly ironic to listen to lots of different people over the last couple of months claiming that the easy money has already been made. well, i don't know about you, but i found it pretty hard, actually, for the last couple of months. we went into this march the 9th. march the 9th, we had a 25% recovery on markets on relatively thin central.

i think if we continue to see rallies going through into a traditionally quiet summer, then yes, some of that money will be tempted off the sidelines. >> christian? >> i totally agree. my point is that currently markets are looking at earnings expectations and realized earnings and they're coming out massively better on average than expected. so this will drive equity markets higher. but what you remember is if you sort of take a deeper dig into these issues, you'll find that earnings are still very low compared to last year, for example, and what's even worse is that most of these benefits have been realized by the cost cutting and eventually when cost cutting these people who are out of work or will be out of work, there's a man who will disappear

from the market and subsequently we believe that equities in the early fall will deteriorate somewhat from current levels. but we do believe that we'll see a rally on sustained hope during this summer. >> steven, where are you investing right now? obviously, it's hard to time the rally or to get into the market to time it perfectly, but where are you investing right now? i understand from your notes you still like asia and emerging markets. >> yes. if you look at the rate of recovery, obviously, asia and emerging markets have done spectacularly since the beginning of march. nevertheless, they were the ones hit hardest in the second course of 2008 and obviously the whole of the laugh year. to those have a little bit left to go. but really, it's relatively indiscriminant. the beat for that of the u.s. is still extremely high. if you're looking to get a weighting in markets, it's a

question of dribbling it in right across the board. we have allocations to the u.s., the u.s. i.t. which i think has quite a lot of spoeshl. asia in specific, markets such as singapore, hong kong and so forth. so it's fairly well spread and fairly broadly spread and at the same time, we have quite an allocation towards high yield, which is still benefiting from the risk trade. >> christian, it's interesting because in your notes, you say for the short-term invest in china. why? >> well, in short-term, i believe china has huge potential due to this massive stimulus package that the government issued. the companies that are exposed to internal demand will experience high sales and potentially a few years back -- i'm sorry, a few years ahead of this time. but on the longer term, we're more worried about china because the shift from the demand-driven economy to more of a consumption based economy will take time and it will take sacrifices for the

gdp level. and as you know, on long-term gdp growth is closely correlated to earnings growth. >> do you not have any concern, christian, about investing in a market that's up over 70% this year? >> well b i'm fully aware of that. but still, i mean, if you look at intel without a few days ago with their earnings and listen to the conference call, they had some very interesting commenced. first of all, enterprises in the u.s. and in europe we're pretty much not spending any money on investing any money. and also the broad asia but especially china. and according to intel, their belief is that this demand could continue for a while and we actually believe in that story simply due to the fact that these stimulus package, the one issued last year, is around 14%

of the yearly gdp in china so it will have a massive impact on the chinese economy. >> steven, what about you, do you get excited about china? >> china, i would admit, i find it to be a rather difficult market. like ross, i kind of feel, you know wibt has power to head very strongly. it's moved by factors which are slightly different from those of other glove markets and at the same time, it has a huge domestic component, as well. i think it does have potential. yes, it's up 70%, but it was down 65% in 2008. so on a percentage term, it still has some ways to go. >> stephen, we'll leave it there. stephen davies, of jevelin wealth market. christian, thank you very much for your views, christian blaabjerg of saxo bank. volvo is warning of a sharp drop in demand for its trucks in the second half of 2009.

volvo, which manufacturers heavy duty trucks said bookings in the period more than halved. elsewhere, shares in actillian are trading in the swiss market after raising its full year guidance. net profit rose 48% thanks to surging sales of its flagship lung treatment tracklear. actiion says this could drive future sales. >> despite competitions, we are growing. we are growing 27% and all our evaluation of the market tell us that we can continue to grow and this is where we have upgraded our guidance to 16% to 19% increase of our top line and also our bottom line. >> and in asia, according to the minutes from the bank of japan, or the boj meeting this morning, the economy had stopped worsening. policymakers are now expecting

economic stability in the months ahead. meanwhile, one bank suggested the central bank should start thinking of ways to support corporate finance. the way is being paved for the election on august 30th. elsewhere, china's state construction corporation has set the way for cseec. who has priced 12 billion yen denominated in a range per share. the pricing will allow the state-owned company to raise as much as $50 billion yuan or $7.3 billion making its the world's biggest ipo so far this year. cscc is one of many chinese firms that have been given the go ahead to raise funds through the shanghai equity markets which has surged more than 76%

this year. bertha. christine, president barack obama is lashing out at what he sees as unrepentant wall street banks. in an interview, he says those companies haven't shown enough change since the financial meltdown that helped spur the u.s. recession. >> the problem that i've seen, at least, is you don't get a sense that folks on wall street feel any remorse for having taken all these risks. you don't get a sense that there's been a change in culture and behavior as a consequence of this, what has happened. and that's why the financial regulatory reform proposals that we put forward are so important. >> the president says his financial reforms will prevent wall street from taking the wild risks it did before the financial crisis. asked if he was concerned about the giant profits reported by goldman sachs and jpmorgan, the

president says the government has less leverage over them now that they have repaid their t.a.r.p. money. governor arnold schwarzenegger and the california lawmakers reportedly have a deal to close the budget shortfall. that agreement came after more than five hours of closed door talks on monday. the plan will include billions of dollars of cuts. the rest of the deficit will be made from borrowing, shifting money from other government accounts and speeding up the collection of certain taxes. >> this should make government more efficient and we are cutting the waste, fraud and abuse in some of the programs, and so all around, i think there is a great, great accomplishment. >> the agreement is the first step in ending the i.o.u.s that california has been issuing this month. the plan must still be approved by both houses of the state legislature. coming up on "worldwide exchange," we're going to find out what's next for opel after gm receives three bids.

plus, china gets ready for the world's largest ipo, but with the shanghai market up more than 7% this year, is this a bubble waiting to burst? and just how soon should we expect the u.s. economy to rebound? we'll look ahead to ben bernanke's testimony on capitol hill today. lllllllllll

right. time to bring you up so speed with what's going on with the global equity markets. there's six of us today. there's sylvia in germany, st fan in paris. we've got carolyn in geneva. there's christine. nice to see you, christine. first, we'll kick off with becky in london. >> thanks, ross. that spot is ridiculous, isn't it? you can't see anyone in there. in the ftse 100, we have a positive session, about 0.5% higher overall. a real run of positive sessions running into the second week, as a matter of fact. so plenty of optimism in the market. amongst the biggest gainers today, helping us to the green arrow that we have overall, morrison is higher by about 7.9%. this is a uk super market

company. they came out with a statement this morning in which they said they expect profits for the full year to be ahead of their previous expectations. they're cutting costs and making sales and that has sent the shares of morse jrison higher. we've seen the likes of sainsbury shifting higher. tesco, which is the biggest player in this sector is higher by about 7.75%. as we mentioned next, another company which came out with a statement this morning but one that's reacting negatively, shares of next on the ftse 100 after that fashion retailer told us sales could be down as much as 6.5%. sylvia, how is it looking in germany? >> not so bad. we don't quite see the dynamics that we've seen in the last week. we've taken very big sips out of this stock exchange bubble, as it were. it looks like a relatively comfortable session right now.

we're around the pivot point for the dax, around the 50/50, 5060. that is something that the charts want to clear and leave behind them to open up the door for that. we've had this play in the future and cash market for quite some time. ten days now or so on the upside and we're clearing playing the upside. 5,100. the technical highs we want to take out, not necessarily today, but it would be about for the market. bmw, basf, you see motley crew out there. none of these companies have any real stories out there to float us. bmw, they're still talking about cooperation with something, possibly with daimler, but this is all very hazy. in the metro s.a.p., you see some profit taking. we still play the auto story. we still play porsche and

volkswagen on thursday to see who is going to take over whom and who is goes to take a leave. beyond the dax, the opel/gm story is still interesting. stephane, what's up in paris? >> renault is one of the top gauners on the cac 40 this morning. posting to the net plus of 365 million euros for the first half of this year, reported a 33% decline for its revenue for this period. in a statement, the kre o of the company claims it has good chrisbility for the third quarter, but still expects a lower level of activity for the fourth quarter of this year. renault and peugeot with higher. an interesting session today for the chipmaker, st microis one of the best performers on the back of the numbers from texas

instrument. they posted a 27% decline of its sales in the second quarter. the company still doesn't want to make any forecast for the full year because of the lack of visibili visibility. strotech is still trading lower from yesterday's session. that's the story in paris today. over to carolyn for a quick view of the markets. >> the smi is trading a little higher this morning, up by roughly 0.2%. but the biggest gainer on the smi, that's europe's largest biotech company, actelion. they posted much better than expected second quarter figures. net profit for the period rose 27% and that was largely because of very strong sales in its key drug, shaclear. apart from that, actelion raised its guidance numbers and the

only slightly negative number we see is that there's a delay on two of its three key phase tests. and the drop in sales, that was especially visibility in hong kong. and for a little more priceyer segments, that means watch that's cost more than $500. switch is just barely in the positive and henrismo is down by roughly 0.2%. now over to christine in singapore. >> markets are trading higher this morning. japan's stocks are playing catchup after a long weekend. the blue chip exporter such as cannon, they surge in optimism about the economy. the nikkei 225 ended 2.7% higher. we had shares in seoul closing

higher. fuelmaker cospo getting a lift. shares in greater china didn't do so well. china mobile was one of the biggest drags in hong kong after the tellry come operator added fewer new users in june. the hang seng in the end closed flat. the shanghai composite closed down 1.64%. finally in australia, the fx managed to eek out a small gain thanks to mining stocks. and on that note, let me send it over to you, bertha. >> thank you very much, christine. we've got no economic data here in the united states today. investors will be focusing their attention on earnings and big ben. fed chairman ben bernanke begins two days of testimony on capitol hill.

caterpillar, coca-cola, dupont, merck and united tech will be out today. others include schering plough, blackrock, continental, southwest and state street. apple and yahoo! will be out after the closing bell and there are many, many more. ron bloom goes before the house judiciary committee at 11:00 a.m. new york time to answer questions about tremendous structuring of general motors and chrysler. that is your global stock watch. coming up on "worldwide exchange," we'll have analysis of the information out of the uk. and china is getting ready for another ipo, the world's largest. but is now the right time to invest in the market? 

i'm christine tan. in asia, china's state construction plans to raise more than $7 billion in the world's biggest ipo this year. >> i'm ross westgate in europe. swedish truckmaker volvo warnings of slumping demand after a quarterly loss. >> and i'm bertha coombs. ben bernanke outlines a fed plan today for the policy of

quantitative easing. >> right. we're just getting data out on public finances in the uk. i can tell you that june public sector net borrowing $13 billion pounds. that's up 7.5 billion from a year ago. it was expected to be a little bit worse at 16 billion. public sector debt versus gdp, 56.6%, the highest on record. the public sector net borrowing is the highest june figure on record, as well, and the government tax revenue, the annual decline is the lowest since october 2008. joining us, sterling/dollar, what is still on the downside at the moment, heading down 1.6433. sarah hewin, senior economist jones us now from standard chartered. sarah, it wasn't quite as bad a figure as we expected. how much, how big a figure could

we be so he in total borrowing by the end of the year? some are talking about 190 billion. >> i think it's feasible that we could be there or possibly even pushing up towards the 200 billion level. the problem is, of course, revenues have fallen sharply and spending is rising as a result of the recession. and it's if fiscal year that takes the biggest hit as the effects of the recession really start to come through. we're sort of seeing the delayed response in terms of falling tech stakes. >> which means there will be more pressure in terms of next year to come up with fiscal consolidation. >> yes. i think even on the government's forecast, the problem is that public sector net borrowing figure settles out and doesn't decline rapidly on future years each on the anticipation of strong rates of growth in 2007.

there's a severe structural deficit which is going to take quite some time to work through. if we don't get stronger recovery as the treasury has forecast from 2011, then that's going to hold that's borrowing figures quite high. whichever government takes power next summer, they're going to have to do quite a lot to try to reign in the deficit. >> stick around. we're going to take a look at mr. bernanke in a little while. the ftse cnbc global 300 is up about 14 points. in europe, up 0.5% for the ftse 100. we are trying to build on six straight days on gains in europe. xetra dax up 0.6%. cac 40 up 0.5%, a as well. on the currency markets, we've just seen the euro and the bound come off slight lit against the

dollar. we're still above 1.42 euro/dollar. sterling, back below 1.55 and the yen is steady around the 94 mark. christine. >> hey, ross. we had a mixed finish here in asia. the nikkei 225 was up 2.7%. this market was closed yesterday. the kospi is up 0.7%. is happening high composite is down 1.6%. the hang seng has managed to close flat. the bombay sensitive down 0.4%. overall, a mixed picture here in asia. bertha, over to you. >> thanks very much, christine. we look like we are set for a pullback here at the open. we've got basically dow futures modestly below fair value, down about 10.5 points or so. the nasdaq is low, as well.

the dow up six straight days. it's the longest winning streak since april 2007 and the nas dax up nine straight days. chris swis is now upping its forecast for the s&p full year target from 1050 to 920. that's when we have a lot of earnings ahead this morning. as far as the ten-year note, we are going to be hearing from ben bernanke on capitol hill, the first of two days of testimony. he is expected to say that things might be picking up. he's also going to talk about the exit strategy on the fed's quantity tafbl easing straight stratgy. joining us now, sarah hewin is back with us from standard chartered. sarah, ben betteranky basically assures that the fed is going to keep rates low, it's important

that they do that now, but when the time comes, they will be able to turn off the spigot and control inflation. do you buy his exit strategy argument? >> yeah. and i think it's clear that they know what is required for the moment. the economy is still very weak, own though there are signs that it's perhaps starting to emerge from recession. and bernanke has made it clear at the moment. our view is that core inflation is going to continue to decline and that there may be emerging deflation concerns next year. at the same time, bernanke has to be very clear that the fed is not going to allow inflationary pressures to reemerge at some point in the future. so i think that, you know, it's sort of very clear what their ames are. not quite so clear how they intend to achieve it. and i think the key thing to look out for in what bernanke

says today is at what point do they envision having to stop quantitative easing and starting to reverse the process? >> is there basically a time clock on that? i mean, essentially once you start seeing a bit of stabilization perhaps let's say even a bit of growth in terms of gdp, is that the time to start? >> well, it depends on what type of growth. we think that the second half of this year is going to see some reasonably solid gdp growth from the u.s. but that may need driven by the turn around in the inventory cycle and the fiscal easing. once those two factors have disappeared from the equation, there is uncertainty about how solid, how durable the economic recovery could be. so i think that the fed will want to be convinced that final demand is strong enough to with stand a reversal of quantitative

easing before it starts to take those steps. >> sarah, speaking of exit strat by, in a boj minute the policymaker is calling for ways to come out of this quantitative easing, as well, as far as japan is concerned. do you think there's a risk that japan might end its support measures too hastily? >> well, they're very aware of the problem that happened last time around that, in fact, they did tighten too quickly. so i think there's going to be a lot of care and attention paid this time around that the move doesn't happen too soon. and again, inflation pressures are very much nonexistent. so there's no need for any move to happen in a great hurry. i think time is on their side now. >> we are expecting a national election, taro aso is calling for one. could that somehow impact

economic policy? >> well, i think we need more clarity on exactly what the opposition's economic plans are. so far, they've been rather light on details. so to the extent that there's -- you know, obviously we are watching the situation closely, but we are looking for clarification on what an alternative approach might be once the election is over. >> sarah, good talking to you. thank you so much for that global tour. sarah hewin, senior economist at standard chartered. from the global economy, let's move over to china. the world's biggest initial public offering could soon get under way in the country. what does this mean for china's equity market? dara examinis joining us.

do you think this will do something based on the massive ipo coming online? >> investors' appetize has been wet by the results of the four ipos we have seen since the ban was lifted. on average was those stocks, which listed, gained 100% in the first day and the entire secondary market is almost 100% up this year. there will be a lot of players who are hoping for the same in terms of this ipo. i don't think it will be that large, but it's going to still be substantial. that's why i anticipate that the ipo will be oversubscribed by about 7200 times. >> what can you tell us about the quality of these ipos coming

on to the market? would you invest in them? >> i believe it's close to the public territory. however, the drivers of the emerging bubble such as huge liquidity and fast gdp growth are still there and, therefore, it does make sense for short-term players to participate. >> how much of that sort of bubble territory fear applies to the wider market, darius? we've got a market up 77% this year. how much more can we put on there? >> chinese market now are at the level and reflect the fact that this is the fastest growing economy in the world and likely next year and also the fact that

the central banks have boosted sentiment substantially. i do suspect that if the case bubbles, they will grow to levels that we have not anticipated. but i'm too afraid of current valuations. china is trading at 25 pe ratio this year compared to the u.s. and i think it's close to excessive levels. >> yeah. i mean, the growth rate, though win presume the government will maintain the growth rate and they will do everything they can to maintain that. that provides sort of an underlying support. >> obviously, china gdp growth race is accelerating. it will grow to, i think, 7.7%

for the entire year, over 9% next year and the government will do anything to sustain that. but again, there is so many risks, in particular external risks. and next year, china will begin to face a third of inflation which will end next year at almost 5% year on year. so i believe all the good news is already priced in and it's only the speculative bubble induced by huge liquidity provided by the central bank that is driving us higher. and because it is a bubbling environment, it's too risky for investors to plan on at this point. >> dariusz, looking longer term, which would you get back in? do you have an expectation that the central bank and china has an exit strategy there to try and curb inflation?

>> i believe that they do. as a matter of fact, observing their actions recently, it seems they've begun to tighten policy. unlike the u.s., they don't have an equivalent to the fundamental funds rate market. and the rate at which they've been withdrawing money has been increased by them over the past few weeks. clearly, today, they are trying to increase the money markets rates for the purpose probably not of limiting lending, but making sure that the banks do not lower irr. this is a sign within maybe six months the official borrowing and lending rates are going to begin to increase and china may be the first major economy to start monetary tightening. >> wow, we'll have to wait and see. thank you so much for that, dariusz.

>> asia, we have u.s. secretary of state hillary clinton saying both s&p 500 sides have agreed on a defense packet. clinton sealed a $10 billion deal that will allow u.s. companies to build nuclear power plants in two sites in india. clinton is wrapping up her first trip to america as america's top diplomate. wynn plans to raise up to $2 billion in the ipo. the reports adds that morgan stanley, jpo and ubs have been appointed to seal the deal. this all comes after interest

was expressed in on possible ipo that could be worth $the 3 billion. volvo is warning of a sharp decline in demand for its trucks in the second quarter. >> volvo said bookings in the period, more than half. and general motors has now officially received three binding offers for its opel european business. magna, beijing automotive corporation and have put their final bids on the table. gm hopes to make its bid by october. the u.s. government is expected to have significant influence over the decision. the germ yn government made it clear which bid this could prefer only if gm accepts magna's offer. ig group said profits were

up 17% last year. as a result, though, ig has lifted its full year dividend by 0.25 to 15 pence and says it's upbeat about the outlook for '09. >> towards the back end of the year as equity markets tb to rise, it's shifting back into shares and some of the strongest periods we've had for shares in the last couple of months. and i think that demonstrates the fact that our business model is very -- in the market cycle. >> business lenders cit has confirmed that it has secured $3 billion in rescue financing from its bondholders aimed at helping the lebdzer try to avoid bankruptcy. $2 billion from the loans have available now with the rest coming within the next ten days. cit has anounded a tender offer for debt coming due next month. the company says it will pay creditors about 82 cents on the dollar. reports of the rescue deal sense

cit soaring nearly 80% on monday. meantime, late monday, texas instruments second quarter profits reported a fall of about 50% to 60% on margins. revenues rose from the previous quarter on strong sales of analog chippes and calculators. ti says demand has increased in asia, although the u.s. and europe remain weak. the company says it's encouraging that the revenues continue to bottom, but it does not see a significant strengthening in the broader economy. despite the upbeat reports, ti shares fell about 1.5% after hours this morning. in germany, they're trading up about 0.25%. and for the right price, you could own an infamous piece of history. the watergate hotel, part of the complex made famous by the scandal that brought down president richard nixon some 35 years ago, it's going on the auction today. the watergate burglar slept in

the hotel before breaking into the democrat national headquarters in the watergate offices. the hotel has been empty since it closed back in 2007 for renovations. now the owner has defaulted on its $40 million loan. and several developers say they're interested, including a group from the middle east and another from london. boy, do you remember back when. watergate. amazing. coming up on "worldwide exchange," ben bernanke signals that he's in no hurry to tighten policy. but will the fed chairman give us any clues in his testimony on capitol hill today? >> it's going to be absolutely important, as well, for the currency markets.

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before mr. bernanke speaks today, how is he going to play into the session? >> well, i think what we've seen in the wall street journal from bernanke already today is pretty much all you're going to get. it was a very lose yid statement in the wall street journal today. he laid out the options they will take when the eventual monetary tightening policy comes from the fed. it's going to be a long way before we get to that stage. but basically, bernanke is saying, look, we have all the tools to handle it and we'll make sure that it doesn't get messy. >> does that comfort you, stephen? i think you're fairly worried about the inflation prognosis. >> listen, ross, the whole fact that the bernanke had to write the op-ed piece to lay his claim to an orderly unwind to this fed that the strategy has adopted is a clear sign that they are

potentially worried and they don't want, you know, the economic agents on main street and wall street to get overly concerned. we don't want to have a repeat of the vymar republic. they know it's a dress policy, but they're hoping they can unwind it when they need to and as quickly as they need to. >> stephen, you know bernanke is under pressure from congress. they've ordered an audit of the fed, particularly it's auctions with the banks last fall. would it be something that the market would handle if it looked like bernanke were on his way out? i mean, regardless of the fact that you may have questions about the admit strategy, does the market still have confidence in bernanke? >> i think by and large, you know, bernanke came in on the sort of -- on a lower note than greenspan did a few years ago. and over time, the markets have gained some confidence in bernanke. of course, the markets have confident in his back of his background in depressionary

economics. and i think, you know, the best thing possible as far as the markets were concerned were should there be continuity, because hopefully the person that got us into this strategy was the right person to get us out. but i think there will be a shorpt term confidence play if bernanke was under pressure. i think he will. ultimately if you're referring to the merrill lynch and bank of america situation, i think it will come back to haunt bernanke potentially and there may be issues when it comes to his renewal next year. it's a good question. >> stephen, this is christine. depending on what bernanke says, how is all this going to impact the dollar? >> like i said earlier, there's no risk of bernanke to tighten any time soon today. really that would be the only major impact you would see on the currency markets in that regard.

i really don't foresee much playing out on the markets today. in the wall street journal piece today, he was very specific about accommodative policy for an extended period and that's basically a repeat of the statement we saw at the fomc. >> steve, what about the major market momentum that we seem to have shifted back towards an appetite for risk? that has to be bad for the dollar. where are you placing your betts now if we continue to see that extended run, particularly on the equity side? >> potentially. i think that, you know, we could be headed for a pullback in equities. that's what my intieition tells me. the q2 earnings season, the majority of participants are short-term speculators looking for headlines to trade.

the k-2 earnings season, whether it's the financial firms or the nonfinancial firms, that doesn't tell us much about what's going to happen in q3 and q4. if q3 and q4 are not the same, you could see a pullback later on. the point is, the importance for the currency market is that any kind of pullback might strengthen the dollar, but we are well past the period where we're going to see aggressive dollar strength. i think really, the only thing that would push us much higher on the dollar would be a relapse in financial conditions. >> we're going to leave identity that note. thanks so much for joining us, stephen gallo at sch in the ider foreign exchange. coming up in the next hour of "worldwide exchange," we will continue to monitor headline stories and bring you up to speed with all of them. >> plus, can coca-cola adds more boosts to earnings seasons?

should investors be more weary headed into the second half? we'll have analysis after the break.

i'm christine tan. in asia, japan's prime minister dissolves parliament and calls for august 30th elections, possibly setting its party up

for a historic defeat. i'm ross westgate. here in europe, stocks have traded to the upside as credit suisse follows goldman by raising its target for the s&p. and i'm bertha coombs. in the u.s., ben bernanke gives a fresh report on capitol hill today and outlines an exit plan for the fed's policy of quantitative easing. if you're just joining us in the united states, welcome to the start of your global day with "worldwide exchange." we broadcast live from the u.s., asia and europe. and in the u.s. this morning, if futures are more or less flat. we've got a ton of earnings before the bell. we've got caterpillar, dupont and coca-cola, united technologies, as well. the dow futures right now, down just of ten points or so. of course, as far as the bond market is concerned, it's all

about bernanke today. ben bernanke talking about an exit strategy, but saying these a long ways off. nonetheless, he does say, we do have one. the ten-year bund at this hour, the yield is at 3.14%. and on the ten-year note here in the u.s., we are at 3.61%. things likely to stay around that range until bernanke testifies later this morning in washington. ross, how is it looking in europe at this hour? >> i think what you just said probably is going to be the case for markets everywhere. but stocks are just inching up again. the ftse cnbc global 300 is up 13 points ahead of the u.s. open. european stock markets two hours into the trading day. the ftse 100 up 0.5%. a little more for the xetra dax. the cac 40 up 0.6% and smi up 0.3%. insurance, construction, chemicals, basic resources are

the biggest sector moves on the up side. currency markets, as you were earlier, really. dollar/yen, trying to claw back from lows earlier last week, not really holding on. eu euro/dollar, down 0.15%. asian markets are mixed. yesterday's rally prompted the markets to take some turns today. the nikkei 225 was closed yesterday and playing catchup, up 2.73%. kospi is up 0.7%. the shanghai composite is down 176%. the hang seng managed to close flat. and the bombay sensitive down 0.5%. nymex light sweet crude continues to climb, $64.99 a barrel. and brent, let's see how that is trading because the last time we

checked wibt was kind of in negative territory. still is. 18 cents lower, $66.26 a barrel. ross. >> yeah. so joining us for the next part of the best part of the hour is andy hartwell. andy, thanks for joining us. interesting. reading your june notes, we're talking about we might slide lower, bang, we're up at the moment seven days in a row here in europe. how long can this go for? >> we're traveling hopefully and i think there's every reason why you should. given the leading indicators as we've seen them, starting to point upwards and that following through so far this year, back up now by the second quarter earnings season coming through from the street. valuations from equities relative to bonds, still under water, not as much as they were. all of those conditions are there for the equity rally. what puzzles me for the time being is to go through the summer and get into the fourth quarter season, sickly, we're

going to look more and more for hard signs from the real economy coming through. and that's going to bring the question as to the effectiveness of quantitative easing back into focus. that's why i think we're going to go flat over the summer. >> are the earnings as good as we're responding to them or are we seeing the glass half full? >> i think it's the glass half full, for sure, but there's a more fundamental point in your question, as well. what we're seeing is earnings beating expect ages which themselves were beaten down hard. we've seen an awful lot and anticipated an awful lot by way of kitchen sinking talk to any finance officers around the globe at the moment, what a great opportunity to bury bad news. that is what we're seeing now. we're getting earnings numbers coming in ahead of those depressed numbers. but the fault earnings 125i789s are full of hope, which is what you would expect. leading indicators pointed in the right direction, we need to

follow through in the real economy and the key to that is bank lending and that's what we're not seeing at the moment. >> speaking of bank lending, andy, let's talk about ben bernanke and his defense of the fed, saying we are going to maintain quantitative easing, which will likely tell congress today, but we do have an exit strategy. in the wall street journal, he outlines the things, all of the tools that are available to the fed. do you feel confident in his explanation? >> yeah. and i think you have to figure where he's coming from, as well. number one, he's coming from a position of being up for re-election coming into 2010. i know it sounds cynical, but everybody likes to play out their term and is to get a second term confirmed. that's part of his motivation. secondly, i've had a number of commentators saying so far today that he's playing with the numbers on wall street and main street. they need reassurance.

but he's playing to a wider audience, as well. china has made very clear their concerns about their investment in the united states, their bond holdings in particular. so bernanke is clearly, now, part of a program to reassure the external investors as well as the domestic consumers in the united states. so of course he's going to say what he's going to say. do you have confidence in that? in a way, there aren't too much ways out of what he's proposing to do to wind out the program from quantitative easing. of course, he has to talk about it, as well, from the point of view that you're staring there at 2 trillion or is it 28 trillion of fiscal stimulus and support strategies? >> does he need to give a timeline for when that exit strategy would kick in? the next 18 months, the next two years? >> no. i've never known a central bank

governor give anything like that, let alone a market strategist. no timelines on that. it will be what it will be. people are expecting the real signs of recovery to come through back into this year into the early part of 2010. if those are right, you can start to anticipate the exit strategy being put into place sometime during 2010. but no one is going to say that for sure at this stage. it's traveling, hopefully looking like that at the moment, but we need to see the confirmation of that from the real economy from bank lending. >> andy, this is christine here. what does all this mean for the bond market, then? >> well, we're starting to see some anticipation that inflation creeps back into the system. but hey, you know, the gap between bond yields and tips is telling you that the market is currently anticipating inflation rates less than 2%. it's not galloping inflation coming back down the pipe. and, in fact, i go back to points i've made here on previous occasions. if quantitative easing is going to work, if bank lend sg going

to finally get through into the real economy, you have to have an expectation of rising inflation. if you're sitting there with t.a.r.p. money or other money coming in through the fiscal stimulus program to rescue your balance sheet, if you're sitting there with that sort of cash on your balance sheet and you're in a deflating environment, you have no incentive to get the money moving. that's why you need a bit of inflation coming back, rising inflation expectations. those will, in due course, take bond yields higher, towards 5% in 2010. >> all right, andy. we'll leave it on that note for now. but andy is going to stay with us. andy hartwill, he is our guest host in this hour. still ahead coming up after the break, we're going the take an indeposition look at government bond markets ahead of ben bernanke's testimony. d#: 1-800-0 "i'm rethinking everything...

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welcome back to "worldwide exchange." fed chairman ben bernanke is set to deliver a fresh report on the economy today on capitol hill. he gives a semi-annual testimony on the economy to the house financial services committee at

10:00 a.m. new york time today. tomorrow, bernanke goes before the senate banking committee. in an op-ed piece in the wall street journal, bernanke says the huge amounts of that the fed has pumped into the system will not hurt their ability to raise interest rates when the time is right. he says an easing policy will be needed for quite some time. but as economic policy takes hold, the fed will night to tighten monetary policy to prevent an inflation problem down the road. joaning us is peter schaffrin. peter, do you think bernanke has it right and do you think that the market will be satisfied with his exit strategy explanation? >> well, i think it's not necessarily new what he said. he just outlined it very neatly in that wall street journal piece. quite frankly, i think that's what the central banks have to do, not only the fed, but also

over here in europe because they have to give, a, the market and b, the general public, an assurance that they won't let inflation out of their box. that's what they have to do. what he didn't say is when that strategy is going to be applied. in fact, he said it might be quite some time down the road when they start to apply it. and i think that's crucial information he gave us. >> and peter, perhaps with good reason. i haven't seen the figures out in the united states, but in the uk yesterday, we saw annual lending to firms and households very weak, slowing from 2.6% to 2.4% in may. that's despite the quantitative easing here in the uk. there's an argument that for all the quantitative easing, the amount of money getting out in the system is even less. is there an argument forecentral

banks maybe like they're doing in sweden having a negative rate of interest? >> quite frankly, if you look where real years are in the market, they're already very, very low or even negative. whether or not the central bank has the ability to cut rates even further, say particularly over here in europe in the case of the ecb, i think it's an arcane discussion because at the end of the day, it's not slutdly the level of key interest rates which is the problem at the moment. it's just, as you said, the transmission mechanism. i think andy mentioned it before, that's the thing that needs fixing. so far at the moment, we haven't seen -- >> but that's my point. if you make banks pay to hold their money with the central banks, surely they'll find something better to do with it. >> yes and no. on the other hand, the alternative could also be just -- because at the moment, all they're doing with it, they have all that money sitting with

the current accounts of the central bank. you could easily scale that down, if you want to, without increasing the lending to the general public. certainly, it could be one attempt that might be tried. i don't necessarily think that's going to pull the trigger. >> this is andy. i think going back on to that point, as you rightly say, the key to all of this finally is getting that money moving back out into the real economy. if it isn't something like the negative interest rates of the central bank are holding it, what's is it? what's going to change the behavior or the mind-set at retail banking level or corporate banking level? >> well, you see, the way i see it, certainly it's the banks which have problems on lending out. on the other hand, i also think it's a problem not only on the supply side of credit, it's also a problem on the demand side of credit. we all know that a lot of the people and corporates out there are struggling to find new

projects to finance or new credit to take on. so it's not only a question of the banks supplying the credit if they want to. it's also a question of demand coming in. quite frankly, i don't think there's a near term fix for this thing. i think it takes times to follow through the system. >> how much of a problem, do you think, how much of an impediment to get money flowing into the real economy, how much of a problem is it that european banks seem slow so far to recognize the sail of that asset and write-downs? >> i think with europe, you can't take a wholistic view. again, if you see the supply and demand side of things, their areas in the euro zone in general where problems are more acute say in spain or in the uk for that matter or where they're less acute say to germany or to lesser extent france in the household sector, so i think it depends really what area you're focusing on. you can't have a wholistic view

of the euro zone as a whole in that case. >> peter, thanks for joining us. andy, of course, is sticking around a little longer. >> president barack obama is lashing out at what he sees as unrepentant wall street banks. he says those companies have not shown enough change since the financial meltdown that helped spur the u.s. recession. >> the problem that i've seen, at least, is you don't get a sense that folks on wall street feel any remorse for having taken all these risks. you don't get a sense that there's a chaeng in culture and behavior as a consequence of this, what has happened. and that's why the financial regulatory reform proposals that we put forward are so important. >> the president says his financial reforms will prevent wall street from taking the wild risks it did before the financial crisis.

asked if he was concerned about the giant profits reported by banks such as goldman sachs and jpmorgan in the past week, president obama says the president has less leverage over them now that they have repaid their bailout money. europe, volvo is warning of a sharp demand for its trucks in the second half of the year. the group posted a bigger than expected operating loss of $886 million. volvo, which manufacturers heavy duty trucks said bookings in the period have more than halved. the british financial regulators warn that banks that have guaranteed longer term bonuses could face heavy penalties. in a letter to more than 40 of the top financial institutions, the fsa says any compensation deals longer than a year will be barred by real remuneration code. the watchdog plans to implement the new rules retroactively dating back to last march.

>> ross, wynn resorts is ready to spin off its macau assets. wynn plans to raise up to $2 billion in the ipo. the report asks that jpmorgan, ubs and morgan stanley have been approved to regulate the deal. the deal could be worth $3.5 billion. final ties between the u.s. and india. u.s. secretary of state hillary clinton says both sides tr v agreed on a defense packet allowing sophisticated u.s. weapons to be sold to the southeast nations. this will allow u.s. companies to build nuclear power plants in two sides in india. clinton is wrapping up her first ties to india and allows the prime minister to make a state

visit to washington in late november. and still to come, will apple's decision to slash the price of iphones push sales above 5 million in the second quarter? we'll look ahead to all of today's major earnings. do you think expectations are too low? e-mail us.

okay. ahead of the u.s. open, we'll bring you up to speed with what's happening on the global equity markets. besides christine and i, there's sill vee cha in germany, becky in london. >> thanks, ross. the if it is presidents 100 is up by almost 30 points. looking at the biggest movers today, morrison is very strong so far. that's one of the biggest super market chains and shares of morrison are higher. that company came out with a trading statement earlier on telling us they are expecting the full year earnings to come in ahead of their own expectations. that company gives a boost to other markets. tesco is looking pretty strong on the back of that news. now over to sylvia for a bit

more on the german trade. >> nothing wrong with frankfurt, because that's what we say, of course. after the sort of slow start we started clawing our way back up again almost 1% up here at the moment. we did zoom through these technical points around the 50, 50, 60 level, which the charters and the futures traders have seen as a pivot point. we've gone through there and seem to have defended that. now they're looking of course a little further up on the technical side. the dax seems to be reasonably well supported. on the corporate side, we are slowly heading into earnings season. yesterday we tell quantitative and today with the kuka out with figures and we're going to head into the next week when we get the likes of deutsche bank, etcetera. but at the moment, the market is driven by technical sectors more than anything else. stephane, what is up in paris?

>> the cac 40 is higher today. renault is going to step up its plan to produce electric motor vehicles in europe. a new factory will be dedicated to the production of batteries. renault has been confirmed the information, but they believe the french state would give financial support to the carmaker. peugeot, despite a report from its unit, froisha, is lower for the first time this year on the 33% of its decline for the revenues of prices. the company has decided to raise its cost savings target from 600 to 700 million euros. smi is trading higher on the back of texas instruments in the united states and still in the tech sector we've got soy tech, themaker for the semi conductor in this industry announced a 27%

decline in sales for the second quarter and the stock is down more than 3% right now. now over to the asian market. let's cross to singapore with christine tan. >> stephane, thanks for that. asian markets are trading mixed today despite a strong release from wall street overnight. japan stocks playing catchup after a long weekend. we had blue chip exporters such as cannon. the nikkei 225 ended 2.7% higher. over in south korea, seoul finishing at a ten-month high. the kospi ended 0.7% higher. shares in greater china didn't do so well, however. china mobile was one of the biggest drags in hong kong after the telecom operator added fewer users in june. meanwhile, the shanghai composite closed down 1.6% to the ,213. liquidity concerns on a big news

of ipo coming on the market. finally in australia, the s&p/asx closed marginally higher. of to you, bertha. >> we have a heavy calendar for today. investors will be focused on earnings and fed chairman ben bernanke beginning the first of two days of testimony on capitol hill. and the stream of earnings will be a deluge ahead of the opening bell. we've got caterpillar, coca-cola, dupont, merck and united tech among others, other notables out, sleerg plow, plaquerock, continental, southwest and state street bank. after the close, the titan techs will do battle. we have apple and yahoo!. we'll want to know what's going

on with those iphones and yahoo! and the never ending talks with microsoft. chipmaker amd and sally made along with starbucks will be reporting. and ron bloom, the new head of president obama's auto task force will be going before the house judiciary committee to answer questions about the government's restructuring of general motors and chrysler. and that is your global stock watch. >> still to come, bertha, they're talking about yahoo! earnings are expected to dip. but could a newly branded phone be enough to jump start the economy as it searches for market share?

it's half past the hour. here are the top business stories from around the world. in the u.s., ben bernanke gives a fresh report on the economy today before congress and outlines an exit plan from the fed's policy of quantitative easing. >> i'm ross westgate. here in europe, volvo warnings of slumping demand after post

ago second quarter loss. >> and here in asia, japan's prime minister dissolves parliament and calls for august 30th elections, possibly setting his party up for a historic defeat. >> welcome to the start of your day. if you're just joining us in the u.s., the futures have been pointing to slightly lower open, but have been fairly flat most of the morning. right now we have dow futures about 10 points or so below fair value. nasdaq and s&p slightly below, as well. but you've got the nasdaq on a nine-day winning streak, the s&p at its highest level since november 5th with credit suisse saying they say the s&p at 1050 by the end of the year. taking a look at the ten-year note, bond market and have the rest of the world today will be watching and listening for ben bernanke's testimony on capitol hill. we've got the yield right now at 3.62% just shifting down a

skoesh. ross, how is it looking in europe? >> we've got six days of gains already. we thought we would see some profit taking at first. it was sluggish. but as you can see, we're up by over 0.5% for the ftse 00. xetra dax up 0.75% and a little less for the smi. on the currency market, dollar/yen, 94.17. euro/dollar, 1.42. we saw evidence of how much borrowing the government is having to do in the uk. what knocked sterling back, christi christine. a, ross. the nikkei 225 up 277%.

kospi up 0.7%. the shanghai composite down 176%. the hang seng managed the finish flat. nymex light sweet crude is trading around the range of $65.13. >> brent crude, now it's about flat, $66.45. bertha, over to you. >> thavngs, christine. alexander is joining us from investco asset management and still with us, andy hartwill, market strategist with quasar. alex, i want to start with you. we've got the call out of credit suisse. they now are seeing the s&p 500 at 1050. yesterday we got a similar call out of goldman. the last couple of weeks, what

we were talking about was the head and shoulders pattern and what was headed down. what has changed? >> it's not a big sprooim surprise to me that after the market rallied for quite some time that we move that target upwards so that's too big a behavior. in the downturn, it tends to be a bit behind the curve as they are on the up swing. some underlying fundamentals have changed. the second quarter earnings season, before the earnings announcement came through, we haven't seen much warnings there. therefore, it's not a big surprise that the earnings are coming in quite as a positive surprise. so therefore, it has been seen probably as a trigger point for these positive comments. for my side in general, we are a bit more cautious here because

when you look at the asians of the recent bull markets or bull market rally, if you like, variations savp start to look stretched and we need significant improvements before we can justify any further movement. >> andy, you sort of share that caution to a degree from here. but why can't we keep sort of harolding on this rally? >> i think alexander is absolutely right about the caution in the shorter term, needing to see the follow through from real fundamentals in terms of earnings numbers coming along. i think you can have it both ways. my own forecast for 010 is kind of the strap line. perfectly happy with those numbers on the basis that we get some of the stuff coming through from the real economy. but alexander makes a very interesting point, as well, on valuations. if i can, i like to skim, which valuations measures are you looking at that currently look

stretched? i'm looking at relationships between bond yield and earnings yield and they're looking, you know, not as exciting as once they are, but still, by historic standards, pretty low. >> we look at several measures. bond yields are one thing, especially when we talk about equity variations. we compare the premium for being invested in equities with the expected premium for the purpose corporate bonds on the other side. and then combined are valuations more from the bottom up and it is cash earnings, expected earnings year for forcing the companies and then basically combining this on index levels. so in general, wh awe ply the positive forecast, it continues development of this recent development. then markets look okay. but when you may price in some,

say, more cautious outlook over the next 12 months or so after you've seen the first positive dip, i think then there's variations look less attractive. >> alexander, this is christine here. when you decide what to do with the u.s. market, do you also look at what ben bernanke has to say about his exit strategy? >> strategy be not so much focused on any short-term news flow to rather combine fundamentals earnings announcements overall. certainly also impact from important policy drivers, but i think no single statement should guide the direction here. >> all right. alexander, we'll have to leave it there. andy hartwill, you will continue to stay with us, of course. right now, let's go to the

nikkei and speak with asoak ka condo. >> thank you, christine. financial shares got pa boost after learning that cit has avoided bankruptcy. the house of representatives ended its session today and taro aso's plan to call a general election on august 30 with campaigning to start from august 18th. this would be the first lower house election since september 2005 when the former prime minister obtained a huge support for his reformation plans. at a meeting with ldp lawmakers, aso apologized for a series of defeats including the metropolitan assembly and

declining support. investors continued to chase after sectors that are likely to benefit from the dpj policies as speculation spread that main opposition dpj would rise to power in the upcoming election. these sectors are those related to child care and farm transporterses. the nikkei reported that contracts for two nuclear power plants in india will likely go to westinghouse electric and the other to a joint venture between general electric and hitachi. that was the nikkei business report today. back to you, christine. >> kondo-san, thank you very much for that. still to come, texas instruments beats forecasts in the second quarter, but remains weary on the economy.

will it set the tone for other companies such as apple and yahoo! which are reporting today? businesses more efficiently,

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governor arnold schwarzenegger and state lawmakers have a deal to possibly close the state's $26 billion budget shortfall. the agreement came after more than five hours of closed door talks monday. the plan will include billions of dollars in cuts. the rest of the deficit will be made up with a combination of borrowing, and speeding up the election of certain taxes. >> this should make government more efficient and also we are cutting the waste, fraud and abuse in some of the programs and so all around, i think this is a role great, great accomplishment. >> the agreement marks the first step toward ending those ious that california has been issuing this month. the plan, though, must still be approved by both houses of the state legislature. texas instrument second quarter profits fell 56%. still, the company still beat forecasts.

revenues rose from the previous quarter on strong sales of anna lol log chips and calculators. t.i. says demand has increased in asia, although the u.s. and europe remain weak. the company says it's encouraging that revenues appear to have. despite the report, t&i felt about 0.5% in after hour earnings trade. >> well, with talks between apek begin today. an official has told reuters that members have agreed to stop protectionist measures and to promote free trade. the governments that were unfairly blocking trade in response to the global downturn were criticized early this month. don't miss a one-on-one interview with pascal lamy

tomorrow. >> andy, what's the key plank right now for the viewer investment strategy? >> oh, the assumption that the traveling hopefully signs the leading indicators translate into the leading economy to that bank lending. >> today, 10-10, further gains on from the equity markets. but the longer term where i continue to position have been from the backend of last year on wards is out east. i buy or propose the argument that -- >> do you buy that market directly or plays on that? >> it depends on your risk appetite and it depends on what you're allowed to do, of course.

if you can buy directly, sure. but advertiser way to do that may be through exchange-traded funds. why not. those engines of growth have moved east and are likely to democrat nate over the last several years. we're about 12 minutes away from "squawk box." let's find out what's coming up in that in a few moments' time.

okay. we're ten minutes away from "squawk box." hey, joe. >> hey, ross. so many dow components, earnings central this morning will be in full swing. quarterly results from three or four dow components, as least. plus a mreth ya of other companies. plus, southwest airlines landing its second quarter results and we have the ceo to join us from the cockpit with his outlook. fed chairman ben bernanke heads

to capitol hill today for a semi-annual economic forum. and do you know where your billions in bailout funds have gone, uncle sam t.a.r.p.? expect inspector general neal borosky says he doesn't and he doesn't like what he sees. he wants more transparency. a busy tuesday morning on "squawk box" which will start right at the top of the hour in about ten minutes. ross, back to you. >> thanks, joe. let's get a look at the trading day ahead in the u.s. david buick, thanks for joining us. lots to talk about. we've got five dow components today. we've been hearing fairly good news on earnings season that seems to have refueleded some optimism in the markets. >> you are absolutely right. but we had a crushing week last week, didn't we, with the s&p rallying about about 3.6%. the dow did particularly well.

i think you have to look at the type of stocks that posted results last week. and it was the banks which obviously haven't had trashed assets on their books rallied dramatically. there were wonderful figures from goldman, jpmorgan, citigroup had rubbish. and then on top of the wonderful results from ibm, google, and to a lesser degree intel. some week, before the mixed bag, you might describe it as a bit of a -- we've got 30% of the s&p 500 companies reporting. today, i mean, you've got really a broad section from bj services to blackrock, honey well, merck, schering plough and apple. i think most people are looking at positive results from apple, not quite from yahoo!. they want to know more about what's going to happen with them and microsoft. but the earnings per share forecast from most of these other stocks have somewhere around half of where they were

last year. whether we're going to get any significant improvement in that area, i don't know. because in the past, the u.s. economy is extremely weak. aide an july grate from caterpillar, but you worry about the merck and the schering plough. i thinkco cocola will be very positive -- >> i thinked to say about that issue, we've got goldman sachs and jpmorgan upping their forecasts for the end of the year. everybody was talking about a head and shoulders pattern forming in the s&p and the fact that we were going to crash through that 877 level. do you think that we have now turned a corner and are the earnings proving that out? >> having just two comments on that, gold mapp has been ahead of the pack for 2009.

but there are -- i personally think the next three months is going to be quite choppy and we will respond to good and bad news whether it's in corporates or a daily basis. we could be banishing around on a fairly corporate range. but i see the third and fourth quarter earnings being extremely positive. as we get towards 2009, i wouldn't be surprised to see the s&p up between 7% and 13%. >> hey there, this is christine. are you hoping that you might see more of what the u.s. exit vatgy as ben bernanke testifies on capitol hill? >> well, i think he is one of the great unsung heroes. he's done a fantastic job. interest rates are going to stay low for a significant period of time. i think this reminds everybody that perhaps we're not out of the market and the fact is that the banking sector has recovered

in terms of stock markets. lending is still at a premium and very difficult to come by and obviously, the taxpayer wants to know about the exit strategy. i think we'll be around that sort of basis. whether we'll get any encouragement, the last time we spoke on an potential basis, he felt that this was over. i expect today he will say much of the same thing. i think it's too early to say how quickly there will be a recovery. so i think most people believe any recovery away from asia is likely to be much quicker in the united states than perhaps it's going to be in europe and the uk. >> congress today may pressure him to talk about when he sees that exit strategy starting to play out. should he try to get a timeline? >> no. i think it would be crazy to do that, i really do. until you can say that they have stopped lengthening, and let's

face it, few people expect to be below housing by the end of the your, let's hope they offer a little bit of encouragement. i think those two issues are out. i can't see mr. bernanke saying it's all over at a specific date until we see the improvement in those two pieces of data. >> david, thank you as far as for joining us this morning. and that's going to do it for us this morning. ae we take a look at the futures, we have a lot of earnings. that's it. i'm bertha coombs in the u.s. >> and i'm ross westgate here in europe. >> and here in asia, i'm christine tan. thanks for your company on "worldwide exchange." you have questions. who can give you the financial advice you need?

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good morning. five times the dow component, five times the results. quarterly results from cat, cat pill, merck, all before the opening bell rings. and ben bernanke delivers his testimony on monetary policy before congress. and the bulls are back in charge. the dow rallies again. six straight days moving back into positive territory for the year. "squawk box" begins right now. ♪ good morning, everybody. welcome to "squawk box" right here on cnbc. i'm becky quick along with joe kernen and carl quintanilla. and our top story this morning

takes us to earnings central. we are expecting quarterly results from five dow components before the opening bell. talk about a day. we're ready to go. we're expecting a number of other noteworthy names today. we'll be watching for numbers from dupont, merck, caterpillar, united technologies and coca-cola. over the last 12 quarters, d dupont has surpassed earnings 75% of the time. analysts are forecasting caterpillar will earn 22 cents a share, down 87% from a year ago. shares of the equipmentmaker are down $8 since january. coke, meantime, is expected to post a 12% drop in profits. we have dupont coming out right now. >> i'm seeing dupont. it says the second quarter include net share charge for items. so the 46 cents, i think you may

need to add 15 in there to 61 versus expectations of 53 on sales of $6.86 billion which is, like, flat with last quarter sequentially, but below the $7.15 billion that the street was looking for. that's a 22% drop in sales. and, you know, when you sell commodities or commodity-based products, you might figure that that would happen. i'm sure there's huge forex effects, as well, probably as a reason. i don't know what the actual organic drop in sales will be after we back out foreign currency and its effect. there it is. the nongap is indeed 61 cents, way above that 53 cent number. at this point, dupont is unclear where it's going to open. i think we did it so quickly that there hasn't been a trade