>> the nikkei 225 is up 1.3%. the shanghai market, this particular market tanked more than 3% on speculation that the pboc could try to reign in liquidity. we had earnings in focus, lenovo in focus and the bombay sensitive index up 0.3%. in terms of crude oil picture, yesterday it was slower. nymex light sweet crude is trading up 34 cents, $72.31 a barrel and brent is putting on gains as we speak. brent is right now trading at a level of $75.86 a barrel. bertha, always good to see you. >> you, too, christine. we should let people know we didn't color coordinate this morning. it's a happy accident that we're

not clashing. very interesting. a little bit of a pullback yesterday here in the u.s. we snapped a four-session winning streak. this morning, it looks as though the futures right now are looking to the upside. we've got dow futures up by fair value by about 30 points or so. nasdaq futures are a bit below, dragging down cautious comments coming from john chambers at cisco. he says he thinks the economy is turning the corner. there are questions about cisco's organization and how they're managing the company these days. as far as the bond market is concerned, today it's all about the fate of quantitative easing. we're waiting to hear from the ecb, the boe and, of course, we do have here in the u.s. the jobs picture that we're going to be watching. the ten-year bund is at 3.38% and we've got the ten-year note coming back down in terms of the

yield. a little bit yesterday having reached a high of 3.76%. we now know how much the quarterly funding is going to be. we're going to see at least $23 billion in ten years next week being auctioned. gold is easing off despite the weakness in the coral right now. it is flat at $963.90. >> thank you for that, bertha. let's try to put some perspective on to it and talk about market strategy. julie mayer joins us in the studio and ashisha goil and jim from asset prudential joins us, as well. the u.s. rally, do you think we have enough to go on to see the market continuing to trend higher? >> well, you know, americans are

optimistic and people in general. i think there's a tendency to want to restore confidence. i think the world is awaiting signs of that and i think americans recognize there is a trend towards a new kind of business paradigm emerging, as well. is it sustainable? i think there's a big change under way, but the american economy is embracing that change. >> what do you think of the pullback we're seeing in the markets right now? could we see the risk of an equity bubble bursting in china and what could be the implications for the rest of the region or the rest of the world, for that matter? >> shanghai has been the best performing market in the world. the authorities, because they're scare of what is going on in the global economy had a very pro growth policy. bank lending was up 90% in the

first half. so there is a risk that the valuations are high and recently there was some ipos trying to suck out liquidity from the market. ipos have very high valuation and they still went up, 80%, 90%. but since it's not a risk to the rest of the region, what goes on in china, you saw h-shares didn't move as much, sos premium for h-shares expanded. so the bottom line is there is a risk with the expensive markets, that they collapse. >> julia, it's bertha here in the u.s. you talk about the optimism here in the u.s. we heard from john chambers and rupert murdock. both of them they're they're at a bottom here and they're not willing to go out on a limb and

say when they see things turning up at this point. what is it we're getting from earnings? now we seem frustrated because we're not getting any outlook. >> you know, first of all, murdock did make a -- whether it was an announcement or a comment that he's looking to charge for all online comments. that is the way the murdock media center is going. people know this is a time of change and i think that's because they're trying to position themselves for this next paradigm which is coming through and so forth, so interpreting the tea leaves between what the ceos of the large technical companies and media companies are doing and saying behind the scenes is an art, not a science. but i think there's a lot of activity pulling some of this innovation of the last couple of years into the larger corporate

where it's going to be bedded down and become part of the new reality and how those media and technology companies service our customers. >> you see, the new reality. in your notes, ashish, you were saying you think the next five years will be subpar. you think the next five years, the new normal will be what we have now? >> yeah, i think so. this is going to be a long adjustment. at the moment, we have a massive injection of liquidity. you have to remember that in unemployment levels are very, very high. some of the earnings gains we've seen in the first half have been done on the back of cost cutting is sustainable. you have to also remember

today's cost cutting is tomorrow's income. so i see a fickle adjustment period for the world in aggregate. i see a happy situation in emerging markets, many of which don't have the same balance problems or geared consumer problems. that's what we've seen going on in investment behavior, as well. >> and, again, i think one of the major trends that i see is it used to be out of europe that a lot of companies were backed and hoping to get acquired by large american technology companies. one change we see is that the world globalization means global buyers are looking in different markets. infosys made an announcement this week that they're looking to acquire hl having previously bought axon in this market. yesterday google announced that it snapped on to videos and

production. $100 million. but i think the level of activity, maybe sheer not huge acquisitions, but it's there. then you have to look at a broader patch and to say more global buyers from all continents, lots of small deals means that the people with the money are using this period of, you know, confusion, consolidation to position themselves well. >> yes, i was surprised because i anticipated that global markets are highly correlated like that for a long time now. my expectation was this year that asian markets would be very similar to take the queue from the u.s. market and be in a similar way and the next two or three years you would see the growth in the asian economies or

developed economies where the asian economies would grow faster and then the market would, you know, start getting more interested. it's happened rather quickly. this year itself asian markets have grown quite a lot. what that meant is they've gone from deep valuation to fair value now. i think one of the questions, maybe, is the first half has been so strong. what does the second half deliver? i don't think the second half can repeat what we got in the first half, but i still see a healthy environment investing in asia >> and emerging markets. i think valuations are reasonable. so you could get another 10%. the confidence is there but it's not to the point where people are happily investing. they're watching data points carefully on the economics side and also on the earnings side.

so far, so good. you should expect some more positive data points on the economic side. on earnings, it's trickier. because of the reason i mentioned earlier, which is that some of the earnings have come from cost cutting. you need to see top line growth now. >> ashish, thank you for that and thank you in studio to jerusalemly meyer. has anything that these two people have said wet your appetite to get involved in or discussions? e-mail in and let us know yao your thoughts, worldwide@cnbc.com. europe's major central banks are expected to leave benchmark repo rates on hold today amid an economic recovery.

economists are split on whether the bank of england will expand its quantitative easing program. silvia wadhwa is live ahead of decision. it's down to whether or not we get any indications of a potential easing in qe or whether or not we see any type of indications of where the ecb is going next. >> there are encourageble optimists out there, but i would say no way jose. we've seen what the ecb can do, provided we stay in the baseline scenario of where we are now, with a slow recovery, but a recovery all the same with an easing of the money market positions of the bank situation. we will not see another rate cut, period. we won't see quantitative

easing, period. what we see from the ecb is enhanced bond growth. the covered bond purchases, that's what we see. the question will be how optimistic are they on the economic outlook? so far they've been relatively optimistic for 2010. will we see something like that? and the other question, of course, somewhere down the road, but we won't hear anything in the process conference is exit strategy because that's what is the buzz inside the ecb at the moment. how are we going to get out of this money easing policy at some stage? when we see at some stage, it's sometime in 2010, not now.

>> sylvia, thank you very much for that. the swiss insurer's earnings fell on an annual basis because of write-downs and gains. but zurich says it's capital investment is strong and it's poised to take advantage of market opportunities. >> we have to be careful that we don't get too optimistic in terms of where we are. realistically, we look at run ups in the capital markets. but it's taking us back to the 2008 year-end levels. so we haven't seen any real growth in the capital markets. we saw a big dip in march. balance sheets have been extending credit relative to what might lie ahead. >> unilever which makes dove soup and ben & jerry's ice cream

acknowledge conditions may we main difficult in the second half. the ceo says the economy still has a long way to recover. >> i've always said and i will continue to see we're in for a long recovery. there's a lot of deleveraging to be done in the economy still. for us in our industry, the most important driver is consumer confidence. it's very important still in europe, unemployment is still going up and consumer confidence doesn't show yet significant changes. so we will be closely watching  that. the markets have come down a little bit, but we have 50% in the developing markets of our business and that business is growing. those markets are growing. the americas for our business is still growing and europe needs to be a top environment. >> we know you want more. we'll bring you a lot more from paul polman within the next 30 minutes or so. christine. >> louisa, lenovo swing to a

first quarter demand and falling prices. it lost $16 million down from $110 million in net profit a year ago. revenues slumped 18% to $3.5 billion. the company says the pc market remains cautious. lenovo says it is considering listing in china, but no timetable has been set. el and still in china, an influential government think tank predicted that the domestic me may grow about 8% this year. the staim state information center says china remained a key driver. the report added cpi should begin rising by year-end.

china central bank said it would fine tune its policies as needed but will maintain its loose monetary policy for now. bertha. >> christine, fiscal fourth quarter profits if you will fell 46% as companies are still cutting back on i.t. spending. results did manage to beat forecasts. that is roughly in line with expectations. ceo john chambers says business conditions are changing but it's too soon to call a recovery. >> to be more optimistic would be irresponsible, but we clearly said we're seeing an upturn. but it was a pretty aggressive call for us. >> cisco's shares fell more than 3% in after hours in the states and frankfurt at this hour, down just about that much. meantime, the obama

administration is reportedly considering a plan to split up the good and bass addses of fannie mae and freddie mac. no final decisions have been made. other options could include keeping the companies private or winding down their operations. earlier this week, robert finmosh was picked to be the new ceo. coming up here on "worldwide exchange," after the country's central bank says it will begin to fine tune monetary policy. plus, the ceo of union lever plans to increase volumes. and do you have ya telecom

confirms their outlook and we'll be speaking to the ceo. 5,5,5,5,,

hi, everyone. welcome back to our global roundup of the equity markets.

we're joinedly charles watts from citi index to talk closer about the activity we're seeing on the uk market. in focus today, you've got unilever, for example, some of the bigger banks in the forefront. what are you looking at? >> we've seen a broad rally in the ftse this morning. this market is underpinned by a bit of a mixed bag. equally we've seen improvement in lloyd's. there will probably be an indication tomorrow that possibly we're through the worst of it. across the board in the banking, utilities and miners today, we're seeing strength. >> do we buy in on this rally or do we sell and take some profits anticipating a dip because the

consumer we're hearing isn't part of this recovery story? >> i think there's a bit of caution in terms of the levels on the story. i think that it's worth being mindful of a little data that came out yesterday seeing that things possibly aren't quite as steady on the recovery terms. what we're looking at is individual stocks, particularly in london indicating that we're perhaps the worst. there's talk of a lot of short covering. aig up 60%. so i think what we're seeing potentially is that for august maybe we'll see these levels remain and perhaps in september when the volumes come back in there will be a little profit taking and we may see more realestic selling coming in at those levels. >> jiles watts, head of dealing from citi index, thank you. patricia joins us to talk in more detail about henkel leading

the way higher. >> absolutely. where is commerzbank? it was among the main gainers after a good set of results. however, they're very ambitious to pay back whatever they owe to the government. hahnover is coming through with very good figures coming through. cnbc talked to the ceo earlier. lufthansa and thyssenkrupp being mentioned this morning in a positive away. the only sell yaudown is nabsf being downgraded by one of the brokers. deutsche telekom is coming through with their second quarter numbers. some analysts are very happy about the numbers and seeing

that the inclusion of otc, the consolidation of the numbers is working quite well and that the costs of including them into their own business for 2 billion euros for 2009 more or less was expected and not taken negatively by the market. not good this is numbers and on the weak side. over to singapore with adam. >> thank you very much, patricia. the asian markets were fairly resistant today. the dow jones industrial average the previous day and the japanese equity market was a top performer in the region. honda announcing that they're going to be procuring motorbikes from thailand and selling them on the japanese equity market. that helps to give the stock a boost. the tech stocks are fairly strong because we saw some weakness in the japanese yen.

and the chep stocks in particular were in focus. elpida memory managing to run ahead and wipe out losses from yesterday after jpmorgan upgraded the company. today it's up 7%. >> investors today will get their second peek at the state of the u.s. jobless market. the forecast is for a rise of ,000 to a total of 585,000. we'll get numbers today from comcast, blackstone, dollar tree, sirius xm and cbs. retailers will be reporting july same store sales results through the day. a cooler weather, a we're job

market had choppers picking through the clearance rack instead of paying full price for back to school items. that's your global stock watch. >> coming up on "worldwide exchange," shanghai stocks at this point dip on speculation. >> and also, all eyes are on the european central banks ahead of interest rate decisions. can we expect any clues on exit strategies?

i'm christine tan. in asia, shanghai stocks take a hit on speculation the central bank may tighten policy. i'm louisa bojesen in europe. markets get a massive boost today from more companies beating expectations. >> and i'm bertha coombs. in the u.s., a cautious cisco could drive on tech today. the company says it's too soon to call a recovery. >> hello, everybody. welcome back again. glad you're joining us. we've seen a slight bounce on the open in the european indices despite the fact a little bit of money came on the u.s. trade in yesterday's session.

we've had pleasing numbers across the board. commerzbank, unilever, a couple of the companies that have been trading higher. the dollar cross rates, we're waiting on monetary policy tightening from the ecb and the bank of england. and you've got the nonfarm payroll data out tomorrow. christine, hello. >> hey, louisa. here in asia, a positive session with the exception, of course, with china. we have china, australia. let me give you the gist of what's happening in the markets. the nikkei 225 is up 1.3%. kospi is up 0.3%. the shanghai composite, down more than % at one stage and now regaining a little ground, but ending 2% lower. and the hang seng is up almost 2% and the bombay sensitive 30

index is up but marginally. liquidity is hampering sentiment in the shanghai market. on that note, over to you, bertha. >> thanks very much, christine. here in the u.s., the futures have been mixed this morning. we've got the broader averages, the dow and s&p futures trading to the upside and that's where we stand. right now we've got toy futures up about 30 points above fair value. the american express ceo ken schnault saying things seem to be pretty steady. meantime, john chambers was cautiously optimistic. he thinks we've turned the corner, but is not ready to say we're in a recovery. we're likely to see quite a bit

of hesitation this morning. taking a look at the ten-year note, yesterday that yield closed out the session at 3.76%. some technicians saying if we breach that today, watch out to the up side to somewhere at 3.88. we have the unemployment numbers out today and, of course, the big jobs number tomorrow. retail sales are expected to post their 11th straight monthly loss. >> 1 e straight monthly loss. that's -- well, what can i say? we're hoping it will turn around at some point. retail sales, the consumer, consumer goods guidelines unilever saying it's encouraged by an underlying jump in all of its regions. here is someone you might recognize. >> good day. i like this show. i might have to come back and host it some day. >> tomorrow? >> i'll give that a shot. >> that will be absolutely fine.

i'll watch it from outside. >> i recommend you do that, louisa. the stock was up, as you can see quite sharply this morning. it opened up around 5%. it's interesting unilever is saying with proctor & gamble. proctor & gamble had a fall in its underlying sales of around 1%. consumers have been moving to their cheaper, private label brands. what is interesting, of course, here is that we had underlying sales jump up and it's due to innovative. this is what the ceo who i spoke to earlier today had to say. >> the man driver of the growth is clearly the innovations we've done in all of the categories we're in. there are good innovations coming in the market. our a & p is up by 50 basis points of the quarter. so i would say all in all,

quality growth. >> so you have some growth, but is there any translation from that at all into the wider economy? are we seeing economic stabilization? >> no. i have always said and i will continue to see we're in for an economic recovery. for us in our industry, the most important driver back on consumer confidence and unemployment. it's very clear, especially in europe, unemployment is still going up and consumer confidence, that is showing significant changes. and so we will be closely watching that. the markets definitely have come down a little bit, but we have  50% in the developing markets of our business and that business is growing. those markets are growing. europe continues to be that you have environment. >> you do seem to have pressure on margins. what is the outlook for that in the next six months? >> there is a slight margin decline for the quarter. we are 50 basis points up in a&p

and then 30 basis points. we're still in the first half of the year sug suffered from the high input costs that we're seeing that we think will ease all indications. some of that will go to the bottom line and ease our margins. and some of that will go to a&p to produce growth. the economic environment is fairly volatile, but more importantly, i think some of the issues that we've seen in society are due to the fact that we probably started chasing our tails and trying to make the quarterly forecasts that we put out there. businesses need to do the right thing for the long-term. that's the strength, he think, of companies like ours and we will focus on that and i've made a clear commitment that we will deliver, talk about what we do,

but rather deliver the numbers. >> even if you're in base that perhaps more than others could deliver those forecasts? >> some analysts, if i may be frank, prefer exact numbers for the future. i come from a part of the country that we rather deliver than talk and that's what we're focused on. we obviously have forecast internally in the company that you understand very well but i don't see any need to go out and issue guidance into the market. there's absolutely no need for that. >> you can catch more to of that. where else, cnbc.com. >> did you bring back any ice cream? >> no. no ice cream. >> we all like ice cream. >> do you? what flavor? >> new york super fudge chunk when i'm feeling very, very -- new york super fudge chunk? >> yeah. it's like everything but the kitchen sink in there. and then sometimes i go back to cherry garcia. >> i don't even know what that

is. is that something that's regular and normal and i don't even know what that is. >> louisa can fill you in on ben & jerry flavors. >> what happens to vanilla? >> i like vanilla. our next guest is anything but vanilla. you go off to eat your lean quisine. sarah hewin, our ice cream -- our economy worldwide seems to be super charged, super fat on ice cream with all of the quantitative easing we're seeing around the world. we're expecting to hear from the boe and the ecb. what's your thought on quantitative easing. is it time to wean ourselves off of it? certainly all the data suggests that the economy is improving and we could see this sort of globally. so i think that probably central banks are coming towards the end of their quantitative easing processes. the question is did it have to

do a bit more or does it bank of england today, for example, have to call a hold? i think that probably they will say they want to keep something in reserve. there's a chance they may go for an insurance move in terms of additional asset purchases being announced today. but certainly we're sort of getting towards the tail end, i think, of the qe process. >> but here, for example, in the u.s., we still are very much in the debt issuance process. can this market continue to support that? today we've got some debt, as well. how are those going and are you watching those carefully? >> obviously, there's a huge amount of debt being issued. there's a lot for the market to absorb. central banks need to do

something. they need it to respond to the serious situation in which economies have found themselves. this is obviously in the right move so far. the problem is what happens when we get to the tail end of this process. what happens as we are finding now when economies start to look as if they're recovering. i think it's important to remember, of course, that inflation is still very low everywhere, that monetary policy is going to remain very easy. policy rates are going to remain low for a long time. so we think that there is still going going to be a market out there for the huge amounts of debt that will be issued but central banks will have to stay a very careful gain on this. >> sarah, this is christine here. more data showing australia is on the road to recovery. today we have employment data looking strong in the country. does it look more certain now that australia will be the first in the world to hike rates sometime this year? >> it is certainly indicated that they were ready to pause and hence that they may start to

take rates higher at some point in the future. but having said that australia is still struggle i think the economy is struggling and it will be some time before we see any rate hikes taking place there. >> sarah, a viewer has written in, jeff, and he says here are some comments that have been making headlines, businesses still believe inventories are too high. about half of u.s. mortgages seen under water by 2011 and he says that things are going to get worse for the american consumer a year and a half from now been 2011. how is two-thirds of u.s. gdp going to get better before then? >> it's a very good point and we are very concerned about how weak the u.s. consumer is going to be, the levels of debt that the u.s. consumer is still holding. so i think that the outcome is going to be for a sluggish recovery. what we may well see in the second half of this year is quite a strong rebound for

technical reasons as inventorie@ get rebuild. but our concerns are that come 2010, that recovery may well start to fade again so a w-shaped recession and recovery. >> and it is more w shaped versus the kind of l shape mikey swo is on h slow recovery? >> yes. i think we shouldn't be too surprised to see growth reported in the later months of this year and markets may well feel that actually the worst is over, tha we're on the road to recovery. but you know, we have to bear in mind, as you say, that consumers are going to be struggling for some time, unemployment is going to be rising for some time and there is a risk that you could get a dip again early in 2010. >> thank you very much, sarah, for talking to us.çl let's move on to our next story

now. shanghai stocks, fell more than 2% today. for more, let's go to jing ulrich. is there a risk that the equity bubble in china might actually burst? >> well, you know, not yet. we are still seeing very strong momentum in the chinese economy. we're seeing invest hes returning to the equity markets with a vengeance. so far this year, the shanghai market has almost doubled and we are seeing investors opening new accounts. trading volumes are a little high these days. so melt yumm remains very positive. of course, in recent days, we're seeing a bit of consolidation. that's both necessary and healthy. >> still a lot about what the central bank might do. what tools do you think the pboc might use to try and reign in

liquidity? >> well, in the recent days, the central bank has been issuing more short-term bills to commercial banks. that obviously is going to take away some of the excess liquidity. in addition, down the road, we could see monetary bank tightening policy by hiking interest rates, raising the reserve requirement ratio for commercial banks, as well. but now, so far, we're getting pretty much guidance from the central bank to the commercial banks tightening policy, especially with regard to second home mortgages. >> hi, it's louisa in london. how worried are you that the stimulus is just a very big package, but that's the reason why we're seeing this turn around essentially and that once that glitz of it wears off, then we're back to growth numbers

that simply aren't high enough? >> i don't think the current rebound in the economy is purely a result of the government stimulus program. the stimulus package was extremely important earlier in the year to get the economy going. confidence had returned. we're seeing private consumption picking up. home sales have been reaching record levels in recent weeks. car staels sales are also very strong. so i think the government's stimulus program was the mere catalyst to get the economy going. i do not think we're going to see a major dip in the economy in the second half of 2009. >> all right, jing, we'll have to leave it there. good talking you with you. thank you very much. let's head out to india right now. mumbai for the latest on the india bit report. ayesha faridi joins us.

hello, eayesha. >> thanks for that, christine. after a very tough day, more action seen for the broader market. while the sensex is a shade odd in the green, the crucial point, i think, is that is standing above that 4,700 mark. and it's the broader markets which have seen more. meantime, of course, a lot of things are really playing up. banking is one such bank. this led to the kind of recovery that we have seen today. so a couple of these counters and not just the heavyweight counters, development credit bank amongst the midcap banks had been showing you gains of about 5 odd percent. you've got axis bank is holding up by about 1.5%.

icici bank, over a 3% move. l&t is doing out quite well. in the meantime, we have got a couple of news reports, still unconfirmed, that india plans to sue the euro union at the world trade organization at the wto for allowing big pharmaceutical companies to detain engine nettic drugs in transit to developing countries. that is one important development. meantime, more reports coming in. capital major has written to the power minister to impose a duty. get actually a cost advantage over indian suppliers. so that is one thing which is really playing out in the market right now.

they have, indeed, asked the company to offset high sales tax on volumes. meantime, it's back to you. >> ayesha, thank you very much for that. well, whether it's india, china, anything moving markets, news, videos and blogs, with you can find them all in one spot, cnbc.com. still to come, u.s. jobs and services data fuel concerns about the strength of the recovery. so just how difficult will it be to get off the bottom? plus, also the dollar is somewhere bopping around the nine-month low level against the pound. we'll get the latest on the currency market. eeeeeeee

the dollar is nearing lows to sterling. let's talk more about the currency markets. bob roth is trading manager at foremost currency. adam, welcome.

what currency pair is kind of the main one that you're focusing on at the moment? >> i think cable has to big the big move, obviously. that's had a huge move over the past several weeks. now we're looking for 1.73 at the next key marker. apart from that, really, we're looking for kad u.s. the question now is not what to sell the dollar against. >> and as we've been asked across the channel, why is it that we continue to see dollar falling when the u.s. is supposedly recovering? >> we don't have the traditional way of trade any more. now it all has to do with risk. now you've got those starting to unwind and turning into outflows coming the other way. when you see positive news in

the u.s., then you're going to see the dollar. >> always so confusing when they change the rules midstream on how you should look at this. that said, what should we watch for today? we've got weekly unemployment claims and retail sales out, neither of which is likely to be too much of a cheerleader for the market today. >> yeah. i think it will probably remain fairly stable today. the figures aren't going to exactly rock the market. we're looking for nonfarm payroll up and coming, as well. dollar/yen is looking range bound and certainly for cable, over the next couple of days, fairly range bound through 68.5 and maybe the 70.58 marker, as well. >> adam, this is christine. we saw fueling low of expect ages that rates will rise this

year. do you think the aussie dollar has factored in that move by the rba? >> yeah, absolutely. commodities seeing a huge surge and the aussie has been gaining off the back of that and announcements coming off the back of australia saying they never felt the same pinch as the rest of the world. but he think it's probably still got a good way to run. as i said a moment ago, really, sterling/u.s. dollar against aussie dollar has to be a good play at the moment. adam, the nonfarm payroll data tomorrow, anticipating volatility up to or right after this barrel data or is that priced in already? >> i think the forecast is pretty much spot on. it will be slightly better than it was the last time around. we'll maybe see cable up to 1.70. again, fairly brief. we'll hit that 1.70 marker and get profit taking and they will be less bullish on the market

the next couple of days. >> adam, thank you so much for coming in. coming up on "worldwide exchange," we will bring you up to speed with all the top stories making headlines across the globe. >> also, european shares are trading higher on better than expected earnings. we'll have to keep asking, is a correction imminent?

i'm christine tan. in asia, lenovo reports a smaller than expected first quarter loss and joins dell in warning about weak corporate demand. >> hello, everyone. i'm louisa bojesen. market are getting a boost from another massive earnings day and more companies beating expectations. >> and i'm bertha coombs. a cost at cisco could drag on earnings today. the company says things are getting better, but it's too soon to call a recovery. hello. 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. this morning, we've seen u.s. futures, well, a mixed picture. in part because of those cautious comments coming from cisco's john chambers about the economy. we've seen nasdaq futures have

been below fair value just a bit for most of the mornings. right now, s&p futures are pretty much flat and we've got dow futures about 30 points above fair value. a lot of economic news that we're going to be focusing on today, both in europe and here in the u.s. first in europe, taking a look at the ten-year bund, we are going to hear this morning from both the boe and the ecb. not likely to change rates, but the expectation is they'll talk a little about quantitative easing so a lot of folks will be listening for that. we've got the ten-year bund right now at 3.35%. the ten-year note yield this morning will likely move in reaction to that coming out at 8:30 and then when we get those weekly unemployment claims as we lead up to the july jobs report tomorrow. we've got the ten-year yield at 3.73%. we've got technicians saying, watch to see if we move past 3.76. the next area of resistance is going to be somewhere near

3.88%. as we move closer to that 4%, louisa, a lot of folks get very nervous. >> they do. they do, indeed, especially is the case when there is that volatility added to the mix. let's check out our ftse cnbc global 300 index this morning. for viewers just joining us, you'll note we have opened at a higher level. the main indices fairing a little better than this and we're being led higher in europe by the banks. food and beverage higher by 1.5%. insurance, also up there by 1.5% or so. so it's positive across the board on the back of these earnings figures that have been better than anticipated. the dollar cross rates, we know just talking about them, slight wait and see mode. the question is whether or not we'll see the bank of england give any more indication toes changes in their quantitative easing strategy that they have on at the moment.

christine. >> hey, louisa. overall, a very good session with the exception of china. lots of concerns there about what the central bank authorities might try to do to reign in liquidity. the nikkei 2251.3% higher. the kospi up 0.4%. the hang seng up 0.2%. earnings obviously in focus. lenovo surging after the company reported smaller than expected loss and the bombay sensitive trading down 0.7%. in terms of oil, this is how the picture is looking for nymex light sweet crude trading higher 7 cents, $72.04 a barrel. and brent is also trading higher as we speak. brent is trading around the levels of $75.59 a barrel, up 8 cents. >> of course we have brent and of course we have andy, as well.

andy heartwill, joining us in the studio. hi, andy. >> hi. >> i'm a bit confused. these days, you come in in the morning and read up on what's been going on overnight and the market is supposedly reacting to data earnings. yesterday in the u.s., the adp data was supposedly hurting the u.s., and in europe, we're having none of it. we're continuing on our own. >> we need to be a little careful. this is the summer doldrums. there's a lot of people away. europe had a little more catchus to do, obviously, than others. some of those earnings numbers are coming through better than expected. let's get real about the outlook here. right now, you're looking at the united states, unite kingdom sxaul three of those are in the firing line for the moves

following on from the sentiment indicators, getting into the reality of bank lending. so far, it ain't happening. we've been traveling easily, comfortably, hopefully since the marleaus. we're 50% up on western indices. but they started back in october. what we need to see right now is more bank lending coming through. and we see commerzbank and blessing says he expects loans to be down. sooner or later, the market is going to stop it. >> with that in mind, why is it that we're seeing this massive rally in the banks still? yesterday in the u.s., bank of america higher by 7%. even if you take away some of those silly trades like aig brought that stock up by 60% plus. commerzbank, 2% rise.

the list continues. that is their job. that's the function of it. given that the banks led on the way down with the write-downs and subprime in all of the crisis indicators, go back to november and december, you saw the battlic rates start to move up. then the ism numbers, as well. some people in the real world were having to make betts into '09 or 2010. sooner or later that was going to take hold in the bax, especially given the amount of support that they've had from central banks. now people are going to start looking harder at that now to see signs of translation into the real economy and you're not getting it.

banks lending into the uk economy contracted 10% compared to this time last year. and the consumer sector is at a 15-year low unless somebody sometime soon starts getting money into the real economy, this v-shaped recovery is going to turn into w. >> andy, speaking of the real economy, we are going to get a bit of a pulse on that today here in the u.s. we get retail sales and we'll get the unemployment report. you know, those weekly jobless claims, a lot of folks have started looking at the fact that the continuing claims have turned down, which is often that indicator for a lot of people that maybe the recession is coming to an end. but maybe i'm too new at this. it doesn't feel that way. >> and bertha, i think you're absolutely right. it doesn't feel like that to people who are out there in the real world. if you're walking along the street worrying about your job as the jobless rate rises to nearly 10% here in europe and

double that level, maybe 20%, unemployment rate in the age group under 25, then, of course, it doesn't feel like that. you walk down the high streets of the uk and europe where i just returned from and the windows are strewn with signs for sale, discounts, bargains, etcetera, etcetera. the real economy takes time to start exhibiting those signs of confidence people so clearly and desperately need. we're seeing positive indicators coming up and looking forward. personal savings rates are rising, as, in the united states, in the united kingdom, also in continental europe. taking those two factors into account, plus the enormous debt in the personal sector as well as the corporate sector. the debt fuel rallies from the 1990s are parts of history. they are not coming back to drive the markets forward as you

go into 2010. what you've got is an insipid recovery in sight. so the recovery we've had so far has been a relief rally in equities putting valuations back to where they should be in line with that insip yid recovery. >> andy, this is christine. you think things are looking better here in asia? in china, we've got expectations that the country will post a strong 8% growth this year. do you think asia will be the first to come out of this crisis, will be the first to recovery? >> well, you're already seeing it, christine. my expectations for china leading the way. the equity market rallies have so far translated into up to 50% gains in the west starting much

earlier back in october, november when the chinese markets and others around asia hit their lows. growth rates clearly will be higher and i still believe that the asian economies, particularly china if a will be the new engines of growth for the 21st century as you go beyond 2010. given all of that, there is no surprise at all that there are now signs of some monetary tightening coming out of the chinese economy. why wouldn't you? if you're looking at 8% growth rate, if you've dumped 9 trillion yuan through bank lending into the chinese economy, you already met your full year target for that, of course you're going to start tightening up. it doesn't mean to say that there's a bubble about to burst. >> andy, there is an e-mail on screen right now for viewers to use. they're sending through questions, i see them as we speak and we'll get some of those questions here in the next hour. up after the break, we will be talking about the rate decisions that are taking place across

europe today. can we get knit crews on future exit strategies? we'll be live from frankfurt in a couple of minutes.

hello, everyone. welcome back.

the ecb is going to be leaving its repo rate unchanged at 1%, so analysts say, but economists are split on whether the bank of england will be expanding its quantitative easing program. sylvia is joining us with more on this decision. sylvia, what do you think are the key elements that we should be looking out for? will we hear any more details about this ecb bond program? >> they might tell us about how the bond purchasing program has gone so far, how much they've fought, in what markets they might. what we hear from the market here is that unusuallily it did have quite an impact. but now that the market has turned to a risk appetite. the ecb and its purchases are no longer needed, so you can't say how much effect it's having in the market. the ecb doesn't call this

quantitative easing. they call it enhanced credit support. how is that for a euphemism. but that as it may, qe, as much as we're going to see from the ecb, that chapter is more or less close unless it's something that rocks the body in these markets again. more skeletons in the closet somewhere, another lehman like situation or indeed, an economic scenario that turns around sharply. other than that, we're done with qe from the ecb. we're also done with rate cuts from the ecb. we're at a level when even within the ecb council there was a lot of discussion whether they should go below 8%. we had the zero interest rate decision that wasn't quite pull offble, as it were. the only thing we want to hear is how optimistic or not is the ecb on the economy. sylvia, thank you for that, joining us ahead of the ecb rate decision. we need to just check in on the markets, though, and talk a little more about the ftse.

charles watt, head of dealing at citi index joins us for that. charles, what has changed within the past hour since we last spoke? >> we're seeing resiliency from the sector at the moment. rbs pushed through 50 pete, lloyd's up at over a pound at one stage this morning. really, we're seeing no let up in this covering of short positions, but buying into optimism that the numbers will be an indication tomorrow that perhaps we're coming through the worst of it. >> jiles, what would you anticipate that we'll be seeing in terms of the rally continuing or petering out? i mean, a lot of the money is put on the banking sector at the moment as well as the miners. will this continue? >> yeah. i think that the money that's going into the banking sector, if you look at the beginning of july, that's put on significant gains. i think we have to temper that with caution going forward now and i would anticipate over the next couple of weeks we'll see

that the sector will perhaps hold its ground a little bit. but i would think that clients anticipating at the moment that we're going to struggle to push above 47.50 and we'll hold these levels for a while yet. >> jiles, thanks for that, head of dealing at citi index. on to the german market, patricia joins us once again. same question to you, patricia, what's changed or not changed within the past hour of trade in germany? >> well, we have gotten a little weaker. we were much stronger at the beginning of the trading session. however, volumes look decent for this time of day. 33 million shares have traded. watch out for volkswagen, down about 4% as we speak. the latest news out there, i want to point out vw to you at the moment, down about 4%.

audi just came through with their sales figures for the month of july, actually, up about 2%. year-to-date, down about 8%. the stellar performer is not europe, it is china up about 42.5% for audi sales in china. very positive, indeed. watch out for bmw, being mentioned this morning by goldman sachs, upgrading the price target and advertising market. watch out for all the media stocks out here. he do expect the advertising market to fall this year. that's frankfurt. over to adam now. >> thank you very much, patricia. the asian markets managed to pull themselves into the green today. one of the top performers getting a boost up by 1.3% in terms of the nikkei 225 and lighting the fire underneath

stocks. as you can imagine, that boosted the auto stocks and the consumer electronic stocks and the chip plays in japan. take a look at some of these. elpida memory wiped out all of yesterday's gains after jpmorgan up graded the stock and hiked its price target by 60%. meanwhi meanwhile, lots of earnings to tell you about after the bell in japan, including consumer electronicsmaker pioneer. there now was expected to report operating losses for the quarter and it did, indeed, come down to 8.7% billion yen. on track now for its sixth losses. back to bertha in the u.s. >> thanks very much, adam. today is thursday and at 8:30 new york time, we're going to get the weekly unemployment claims. they're forecast to be up about 1,000 to 585,000.

meantime, we'll get a few earnings trickling in from the likes of discount dollar tree, satellite radio operator sirius xm and cbs. retailers will be reportling july same store sales throughout the day. costco came down 7% because of the strong dollar. we are expecting to see overall the 11th straight monthly decline in retail sales. that is going to wrap it up for your global stock watch. >> still to come on "worldwide exchange," we will speak with the ceo of deutsche telekom in a few moments after the group confirmed its outlook.? we're shopping for car insurance, and our friends said we should start here. good friends -- we compare our progressive direct rates, apples to apples, against other top companies, to help you get the best price. how do you do that? with a touch of this button.

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hello, with everybody. welcome back. deutsche telekom has confirmed its results. second quarter revenues rose by around 7.4%. the company is taking measures to boost its performance in the u.s. and poland and the uk where it saw heavy depreciation in the volume of its t mobile unit. the ceo of deutsche telekom

joins you now. rene, there was a bit of a strued sense because of the ete numbers. how would you characterize the numbers this time around? >> second quarter results are encouraging because of all the measures we took after a disappointing q1 show impact primarily on the cost and efficiency side in the u.s., in the uk and poland and other markets. also very important in the success in germany. we've expanded our market share of net gains in dsl. we've introduced new products. altogether, i'd say the trend of q2 is better than q1. we can confirm our overall revised outlook. but there are challenges ahead of us and the overall market crisis, i don't think it's over yet and we will have to continue to stay hard on the cost side and keep our efficiency measures

intact and in place in order to reach our targets, but we will. >> and with that in mind, with your comments in mind, one thing that analysts have been pinpointing this morning is that potentially when you look at your free cash flow, does that look a little bit on the weaker side of things. do you feel confident in your cash flow position when you are still meeting uncertain markets? >> sure. the special effects of q1 were visible and q2, we had special effects, higher interest rate tax and so forth so second half of year should look significantly better and we confirm our free cash flow basis which is around $7 billion this year, including o.t. >> rene, it's bertha here in the u.s. where i must say your visibility has increased. i enjoy your new commercial

featuring catherine za da jones. how much would you at t-mobile like to see market share growth here? >> we do, mid to long-term need to continue to grow our share. q3, i have to say, doesn't look in terms of growth that encouraging yet. we have to regain momentum. and most importantly, in order to regain momentum is the market complains, but even more important is the better 3g coverage. we're enhancing our portfolio and enanswering our distribution. altogether, we should see new momentum, but it will take a while before we're back on the growth path. but long-term objective is to increase share. >> but it's got to be very difficult here in the sense that at&t has locked up the iphone, sprint has locked up the new palm pre and one would say you have the dark horse in this race with the google phone. would you like to get your hands on the iphone to try to get people be on your network? >> the google phone is a great

device. i don't know whether you've had the chance to test it, but it offers a high variety of features. it has the advantage of being a nonopen system android and we're introducing new devices based on this operating system. so application development is being promoted by that and by the end of the year, we'll expect to have around 12 different 3g devices. so we are going to broaden our device range and that is very important to gain new shares and attract new customers. what you see also is when the 3g network is being switched on in new york, you see significant growth in other markets. altogether, mid to long-term, we're optimistic. third quarter is not promising in terms of growth, but midterm is going look better, i'm sure. >> rene, what's going on with your uk t-mobile unit?

are you going to be selling it? are you talking to vodafone or telefonica? >> louisa, you will not expect me to answer this question, i suppose, but it's a good question. as usual, we can't comment and we do not want to comment on m&a speculations. we have a great new management team in place. these are very experienced people and i've been in the uk last week. i've had a good discussion with richard and i'm pretty confident that richard understands the need, what we need to do to reposition our business a bit more aggressive in order to get more share in the marketplace. we improved on margins in q2. i'm not suggesting it's rosy, but in the uk, this business is more difficult and we will have to do more aggressive cost cutting in order to improve our performance. >> rene, this is andy hartwill sitting in the studio with louisa. i'm very encouraged to herd your

outlook and guidance. i was wondering what your feeling is for rpu and when or where you see the opportunity for rpu for growth? >> there is an opportunity to grow the data side of it. in the u.s., we had more than 40% year year growth in mobile data. also in europe, strong growth. so that side of it is the positive side. on the other side, there is heavy competition and also on the other side, additional regulatory impact, which is not needed for this industry whatsoever, given the high investment we need to make. so i think on balance, there are opportunities also with regard to voice usage, but there also some challenges. so bottom line, i think we may have seen the stabilization of our development in the u.s. at around 41 or so currently in voice and data is growing very fast. altogether, i think it's a balanced picture. >> rene, we're going to leave it on that note.

you told us during the break that you've been very busy. we're so glad you made time to speak with us this morning. rene obermann, ceo at do i ya telecom. >> thanks. coming up, the ism services was bad. what shape is the economic recovery going to take? drop us a line.

a little more than half past the hour, here are the top business stories from around the world. in the u.s., a cautious cisco could drive on technology today. the company is saying things are getting better, but it's still too soon to call a recovery. >> hello, everybody. in europe, markets get a boost from another massive earnings today and more companies beating expectations. >> and here in asia, shanghai stocks take a hit on speculation that china's central bank may tighten monetary policy.

>> hello and welcome to "worldwide exchange." futures this morning have been mixed, a bit of caution. we are forgetting a bit of jobs data. we've got dow futures data right now just about 15 points or so above fair valuable. on the cisco call yesterday, being a bit cautious. he thinks we're at an inflexion point. s&p futures at this point are flat. we are going to get that all important weekly jobless claims data. they're expected to be flat from last week. but the thing that people will be watching for is the continuing claims. taking a look at the ten-year yield, yesterday we spiked up to 3.76%. this is the ten-year bund. in germany, we are waiting there to get information from the ecb and the boe on quantitative easing. they are expected to keep rates unchanged.

the technicians say if we push through that 3.76% today, watch out, we could be up to 3.88%, the .9%. louisa, how is it looking in europe this morning? >> i was just playing a game with myself called best the performing blue cheps out of our companies. and i was wrong. rbs is the best performing stock out of our blue chip players. european markets are up across the board. we've moderated some of the gains that we saw initially, but we're only, one, an hour, hour and a half into trade? the best performing sector being, well, banks, food and beverage. we've seen relatively flattish gains this morning.

christine. >> hi, louisa, earnings seems to be in focus. china, we had a big sell-off in china. a lot of talk there about the authorities trying to reign in liquidity. that is putting pressure on the shanghai market, 2.11% lower. the hang seng is up 2%. the bombay sensitive 30 is down almost 3%. oil is trading lower by 42 cents, $71.56 a barrel and brent is pulling back a little bit, down 4 cents, $75.10 a barrel. bertha. >> thanks very much, christine. so much going on in the markets these days. paul schatz is the principal at

heritage capital. andy hartwill has been with us since the top of the hour, strategist at quasar. paul, let's start with you this morning. the economy doesn't seem to get any better in toerchls jobless claims. we've got retail sales. it seems as though we've got the corporate part of the economy kind of getting its act together, but the real economy, the consumer is still very much down in the mouth. >> can you really be surprised? corporations have been doing it by cost cutting, cost cutting, cost cutting, cutting inventory. the banks may be flushing cash from the government and leveraging it out and lending it

out to small businesses. >> that said, the market has moved higher knowing this. how much longer can the market move high er even if we know th consumer and end demand will be a drag. is this a chicken and egg confidence building process? >> let's remember that four or five months ago, market were pricing in literally financial blowups. once that does not happen, you've got the biggest rallies come from the biggest declines and vice versa. so that's why you have this huge rally. bernanke said it several times, he didn't want to sit over the second great depression. so they've been flushing the system with cash. this is the biggest liquidity-driven ral of of all

times. it will continue until the fed pushes the punch bowl. >> andy, if the fed continues to coordinate stimulus packages around the world, if all currencies remain relatively at the same time as to amounts, where will the inflation be? only if one country or the other doesn't participate will inflation be present. if you have four different people, four different countries and you increase what they have, they'll still all be relative to each other. >> he's right in principle, absolutely right, but of course, all players aren't equal in this particular game. the game is a game of rescuing the crisis in the financial sector clearly in the western economies, u.s., uk and the euro zone. those economies at various stages are recognizing the debts of their own misfortunes and follies.

the euro zone notably late in reaction to all of that. on this particular playing field, you would spec'd them to move farther and faster in the western economies compared to those in the east on all else being equal, that would suggest in the end eastern currencies would rise compared to the western. but that is kind of where i would see the answer to that question. >> okay. >> paul, this is christine. just to follow up on what you said, what kind of recovery are you looking to see, will it be a u shaped, w shaped, l shape? are you running out of alphabets? >> i don't see any of the alphabet letters that suit what i see. i think we've seen probably the worst of the worst and we'll probably get a quarter or two of

positive gdp growth. that's fine. the problem i see is that if you look out beyond two quarters, the fed is pulling the punch bowl, the obama stimulus plan i don't think is going to work. once the economy has to stand on its own two feet, i don't think it's going to be able to. and that's the problems i see md 010. i don't see the l because i don't think it's this bad, but the u implies that we're going back to the trend growth rates. i don't see it happening. i think we're going to plug around around plus % gdp. mrib r maybe a period of years. it's going to take a while. >> paul, can you see this? our viewers can see it. this is a danish letter. maybe that's the type of recovery we may be seeing. it's an extra letter in our alphabet. paul, you're staying with us for

a while. andy, we feed to get your final thoughts before we let you go. and i would add, as well, leslie writes in and asks whether we'll see food inflation if commodities continue to increase and the viewers noted that sugar has risen over the past 60s months. >> and you expect that because inventories are being rebuilt. absolutely right. redon't have any data yet to see this is anything other than restocking ahead of insip yid growth. i said in march of this year that we would get the rally, that my mark was around 10 on the dow and one on the s&p. after that, that's what's interesting to me. whether it's v, u, w, anything else like that, i'm afraid that i still see a long period of secular consolidation exactly as we had in the 1960s, exactly as

we had before the second world war. ten years or more cycling plus minus 15%, kind of picking up the same thing that paul was saying. gdp growth coming in about 2% in the u.s., swinging between 2% and negative 0.5%. this is not the beginning of a bull market in western equities. this is secretary ewe lar consolidation. >> andy, we'll come back to you later. maybe i should come up with some sort of a chinese character. maybe there would be some symbol that we can use. we'll check in with paul schatz later on in the show. for now, let's cross in to tokyo and check in on the trading day there with ken moriyasu from the nikkei. >> hi, christine. tokyo stocks bounced back from yesterday's losses and marked a ten-month high. the nikkei 225 gained 1.3% to close at 10,388.

also in the auto industry, lon da plans to counter the rising costs of manufacturing motorcycles by importing them from thailand. they produce three times the number of motorbikes compared to its japan operation. starting next year, it will ship 250 models. in the april to june quarter, the sixth largest gentleman japanese life insurers reported an average return of 2.11%. thanks to the stock market rebound, that's the first pop result in forty quarters. after the bell, olympus outdated it outs look. finally, away from business news, today is the 64th anniversary of the day the atomic bomb was dropped today.

>> thank you very much for that, ken moriyasu. christine, we still have more to come on the show. a little more on that in a moment. before that, take a look at how viewers futures are shaping up here.

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of the world's largest airline. welcome back to "worldwide exchange." the obama administration is considering splitting up the good and bad assets of lenders fannie mae and freddie mac. the white house says it's just an idea in the early stages of developments. no financial decision has been made. among the other options they're talking about including keeping the companies private or winding down operations. meantime, the financial times reports that aig is close to naming former american express ceo harvey golub as its new chairman. golub is currently on aig's board.

a lot of folks says goldman sachs is the 800-pound gorilla in this market. it's breaking down exactly how it made its money in its second quarter. the firm logged in at least $100 million in trading revenue, on other days it made at least $50 million. that's huge volume. a federal judge, meantime, will not approved monday's $30 million settlement between the s.e.c. and bank of america. the judge says the proposed settlement cannot specify how if fun was determined. and mary schapiro should be able to fund itself directly

from peas it collects from other banking regulators for the year. schapiro tells the financial times that being able to spend the money freely would help the s.e.c. christine. >> china's biggest pcmaker slumped to lower demand and low prices. it lost $16 million down from $110 million in profit a year ago. but the losses were smaller than what revenues were predicted. the company is showing signs of improvement, but remains cautious on the back of challenging operating environments. lenovo says it is considering listing in china b but no timetable has been set. in hong kong, shares of lenovo trading up 3.5%.

>> might be interested if you like ben & jerry's because unilever says it's encouraged by underlying sales in the second quarter thanks to all of its benefits. >> the dr eo paul polman says the economy has a long way to cover. carl quintanilla, i'm guessing he's an ice cream fanatic, as well. >> once you said ben & jerry's, i can't get that out of my head and it's only 6:00 in the morning. weekly jobless claims, the most up to date number on the labor market we'll get that at 8:30 a.m. the ceo of adecco is going to join us, the sectors that are

doing the most hiring right now. monthly retail sales will start to pour in over the next couple of hours. dab na telsey will tell us about the winners and the losers. the senate plans to vote today to extend the cash for clunkers program. and the ceo of fair isaac, that's the company that handles your fico scores, they will a report coming out. we'll see you at the top of the hours. >> fap tastic. >> ice cream for breakfast, one of my favorites. eeeeeeee

let's take a day ahead.

paul, of course, jobs, jobs, jobs are the headline this week. also those retail sales numbers, so far, not looking so great. costco coming in down 7% in july, blaming the strong dollar. what's your outlook for today? >> well, today it's going to be up to positioning for tomorrow. we've got cisco last night. at first blush, better than spec'd. i think today will be more of a trading range market. maybe up to down 0.5%, 0.735% max. i don't think today is a bust out today in either direction because tomorrow is the big jobs numbers. >> paul, it's louisa in london. he says, suddenly the banks in a historic time frame goes into crisis. who is bhog warm air?

why is it that we're still seeing positive bains in the business index. ? no, we don't. but keep in mind, it's almost like giving them a license to pint their own money. that's why you're seeing this rejuvenate. the banks had big runs from the marleaus. they went to sleep for a month 1/2, two months. then we realized, hey, there's even more money in the system that we thought. the banks can't help but make money right now, the bad and the good. that's going to shake up more importantly probably the enof the year, early next year when some of this liquidity is zapped and the banks are forced to write down more loan peps that's when i would be more concerned about the banks. >> paul, this is christine. at this stage, why would you be putting your money? where are you invested? well, let me go to the alternative side, number one.

i think the dollar is putting in a intermediate if not even a longer term lower rate now. the dollar put in a low in march of '08. after we saw the crisis, after we saw this flood of money, the dollar still has held its march of '08 low. i think the dollar is a surprise investment to the next two to four months. so i'm getting pretty positive about the dollar, number one, and in terms, i'm getting very negative gold, number two. on the ek at the side, i think we have to thick with financials since '06 and i don't think you have to. >> paul, we are going to leave it right there because we're running out of time. we'll get your thoughts again next time. thanks so much for joining us, paul schatz. >> thank you. >> that's it for our show. these days, wouldn't it be great

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good morning. shopping for sales, the nation's retailers reporting july reports and becky is on the case. rates heard round the world, key decisions from the ecb and boe expected within the next few hours. refueling cash for clunkers, the senate set to green light a $2 billion extension this morning as "squawk box" begins right now with my mike on, finally. >> good morning, everybody. welcome to "squawk box" right here on cnbc. i'm becky quick along with joe kernen and carl quintanilla. and we hope you hear us now.

key factors here include unemployment, gasoline prices, cooler weather than normal and consumers trading down that whole idea of trying to buy cheaper brands. all of this is happening while they're focusing on staple items, as well. also, you've got a later start to the back to school season and that likely means the parents are waiting for that tax free holiday to kick in this month as opposed to going ahead and buying all those items like they did in july. september is the month to watch because stores will be facing notably easy comparisons to watch. stores say they're not even stocking up on heavy inventories when it comes to christmas this year. a drop of 7% in line with expectations for costco. guys, we'll be getting these numbers through the day.

the expectations are that the teen retailers are going to be seeing some of the biggest drops. the discounters have been some of the areas where we have seen consumers drop. they're expected to see drops of 6% to 6. 5%. you're talking about tough comps this time around. >> meantime, a busy day on the economy front, as well. topping the agenda, weekly jobless claims will be out at 8:30 a.m. eastern time. at 10:30 eastern, watch for weekly gas inventories. natgas prices jumping almost 15% during the last five trading days alone, not to be forgotten in the data shuffle this morning, two key interest rate decisions out of europe. both the ecb and the bank of england expected to keep market rates on hold.