i'm christine tan. here in asia, china's industrial output sharped up in july, but trade data shows lack of external demand is creating a drag on the chinese economy. >> and i'm ross westgate in europe. there's no material pick up in activity after the world's wiggest staffing firm posts a surprise loss for the second quarter. >> i'm bertha coombs in the u.s. the fed kicks off for a two-day meeting. >> hello and welcome to cnbc's

"worldwide exchange." global equities are trying to nudge higher at the moment. the ftse cnbc global 300 is up 7 points this morning. an hour into trade, we have gains after slim losses yesterday. we hit ten-month highs on friday. we'll see whether we can finish back at the highs today. european stock markets one hour into the session, we're up 0.4% on the ftse 100. xetra dax up 0.6%. cac 40 up 0.6% and smi nearly flat. the chinese data shows below forecast factory expansion, as christine was talking about. dollar/yen, 96.85. euro/dollar, 1.4160. sterling/dollar is below 1.65 at the moment. euro/sterling is very much in the ranges.

christine. >> here in asia, a positive showing across the board here. in china, we had that industrial production number arising for the month of july, but coming in below expectations. this particular data, really, the key focus. the nikkei 225 up 0.6%. the kospi up 0.2%. the bok kept rates steady there, as well. the shanghai composite up 0.4%. data showed lending slowed sharply for the month of july, taking away any concerns of monetary tightening. the hang seng is up 0.7% and the bombay sensitive 30 index up 1.1%. in terms of nymex light sweet crude, crude oil is trading up 0.43 cents, $71.03 a barrel. brent also trading at these levels, as well. brent right now trading across the lines of $73.83 a barrel, up

the 33 cents. bertha, over to you. >> thanks very much, christine. this morning, you'll want a double shot of expresso in your la ta. we're going to get productivity up, we'll be watching the start of this two-day fed meeting and bond auctions this afternoon. so plenty to focus on. so far we've got furchd slightly above fair value, taking a look at the ten-year bund yield, the ten-year bund had been higher this morning. we've got the yields now moving higher to 3.5%, a bit of caution lady of the fed meeting this morning. landlords, we've got the auction, the $37 billion of three-year notes at 1:00 new york time. part of the quarterly record, quarterly refund taking part this week up to 3.79%. taking a look at gold at this

hour, we've got gold trading just a bit higher, up about 1.3 to 946.95. we're joined by christian blaabjerg and brian turner from turner investment. gentlemen, it seems as though all eyes will be turning to washington this morning. the fed is going to meet today. we're not expecting them obviously by tomorrow to tell us anything about rates moving, but that statement is always the important thing. what sort of note do they need to strike as far as their outlook for the economy and as far as their strategy going forward? >> i think the strategy going forward is actually the important issue here. there is a wild belief that we

have seen a recovery, whether the bottom is here in september, and the v-shaped recovery is sort of priced into equity markets. so what they will be looking at is the statement as to how they'll exit this method stimulus of money into the system and drag it slowly out so we don't see a double dip in the economy, but at the same time, you know, we do not -- at the same time, we're not going to see any deflation -- sorry, inflation worries. the point is that the statement is a very important issue here. >> let me turn to you, bob. how do they get it right here? in a sense, which is the market going to cheer, that they would extend their quantitative easing, they're on track at this point, they're two-thirds of the way through their bonds expected to end at the end of september? do they extend the the way the

boe did or do we think things do not need to extend it? what's the reaction going to be? >> well, i think the market wants to hear that it will be extended. i don't feel as if the market fully feels comfortable that the economy can sustain itself. we've had a lot of structural issues such as an inventory rebuild, the cash for clunkers that has allowed this economy to stabilize, but i think clearly people want to hear that the fed is going to stay the course to do as much as they can to allow the economy to have more than just a bounceback, to have a real sustainable sort of recovery. >> and speaking of recovery, bob, we did get some mixed data coming out of china, but most particularly, industrial production rising and still below expectations. does this somehow support your view that china can lead the world out of a recession? >> yes. china has done a nice job of leading this growing even without the help of ex ports.

and now that the rest of the world is stabilizing and improving, plus the fact that the ex ports have been so low, you should see that as the next boost to chinese growth. >> christine, what about you, we had goldman sachs updating its forecast. how billish are you on china? >> we are quite bullish. that's mainly due to two factors. first of all, the stimulus package of $585 billion. that will do something on an internal demand. second of all and in our view more importantly, is that the debt of household sale will subside. the government side is quite low compared to both europe and the u.s. we actually see this debt issue as the one thing that sort of makes china's growth be able to boost even higher from here because simply they don't have to pay interest rates. >> so christian, as an investor, what's the best way to sort of

get exposed to that story there? >> we would definitely advise our clients to go into emerging markets on a broader scheme and stay off from the u.s. and europe and long-term because basically we don't think that the u.s. equity markets or the european equity markets are going to rise significantly from this level given what's priced in in regards to gdp growth, both in europe and the u.s. >> bob, would you say broad exposure to those asian emergeling markets or would you be more specific? >> the exposure is good. they potentially could settle back a little bit. actually, we feel the market has lagged. overall, broad exposure should be okay. >> what about the financial sector, bob?

is that something we've had better numbers and financial firms, things seem to look better, do you like financial as a whole or do you think it's too early to get in? >> the broader quality are the financials we like. the investment banks are in great shape. there's been so much more activity. so i would say that financials have had a nice move off the bottom, but actually could establish somewhat of a leadership position as we continue to move forward. >> christian, it's bertha here in the states. we're going to get a lot of data this week on the consumer here in the u.s. and we're going to hear from retailers, as well. do you have any feeling? you believe we're in a v-shaped recovery. is the consumer going to come along on that recovery? >> well, we have our doubts. we hope so because then we are going to have a sustained recovery, for sure. but we have our doubts. there are certain data points

that at least indicate that the consumer is cutting back on their spending. consumer spending is down. it seems that consumers are saving and paying off their loans instead of the consumption. we'll be especially looking for the u.s. retailers this week because the data we usually look at dates back in time while these u.s. retailers usually have a good indication or a good feeling for where the sales is going to come from and how it's going to develop. so we will be calling in for some conference calls, especially for companies like walmart and massey's and jcpenney. >> christian, thanks for that, christian blah fwerg from saxo bank and bob turner, from turner investment. the group sees no material pick up in activity and that conditions remain demanding. the world's biggest staffing firm missed forecasts and swung

into a surprise second quarter loss. adecco says it will be taking more restructuring measures. british insurer french providence has come to a resolution. the management of friends has backed the $3.1 million bid. insure reported a first half underlying profit of over $60 million. the outlook for the rest of the year, though, remains challenging as trading conditions are pretty tough. >> ross, we've got lots of data from china today grew at its fastest rate in nine months, but fell short of expectations. investment growth, meanwhile, slowed last month, underscoring beijing's view that the country's economic recovery is still not solid. on the consumer front, we have retail sales growing a touch to

15.2% on the year to 15% in june. meanwhile, consumer price inflation reported its sixth straight monthly decline. trade surplus, however, came in higher than expected at $10.6 billion in july. ex ports fell a smaller than expected 23%. imports also fell by almost 15%. still on china, australia has brushed off a chinese report accusing rio tinto of overcharging and spying on chinese steel mills saying it has not been officially sanctioned. rio tinto's iron ore chief executive is still not aware of any evidence to support detention of its employees. >> down 1.1%. it's up 1.7%.

bertha. >> thanks, christine. a congressional watchdog panel says banks are still under threat from docksic assets that remain on their books. more banks could fail if the economy worsens. smaller banks are especially vulnerable, since they hold greater numbers of commercial real estate loans. owners of shopping malls, hotels and office buildings have been defaulting at an alarming rate. for the second time in a week, a federal judge is refusing to sign off on bank of america's settlement with the s.e.c. b of a has agreed to pay $33 million to resolve charges it failed to tell investors about merrill lynch's plans to pay billions in investments. the judge says he has misgivings about that settlement. he wants more information about who is responsible for the

alleged wrongdoing, the basis for the settlement and whether further court hearings may be needed. bank of america shares are trading up just over 1.3% to $11.89. and if you want to know more about what's going on in today's news, be sure to check out videos and blogs. if you missed anything at the top of the hour, it will be there at cnbc.com. while you're there, drop us a note at worldwide@cnbc.com. testing with u.s. bond investors, we'll assess demand for notes. china's industrialout put has jumped less than expected in july. so has beijing's 8% growth still within reach? global stocks could be face ago hefty correction. could he be right?

let's take a look at where we are on our global equity markets. good to see you. the future is bursting this morning calling us low but we have opened up higher. what's going on? >> a bit of pessimism in the market the last couple of days.

we've soot seen a bit of commodities. crude prizes rise about 0.5%. the miners are up, as well, thanks to riser that we've seen in copper prices, too. a couple of the stocks making the main gainers today obviously is international power on the back of those h1s, 12% operating price. that 19% potential hike in the interim dividend is pleasing shareholders there. so we have seen some buying with international power. smith and nexium has graded their price target to about 504 pence, as well. the main faller we've got at the moment is lloyd's again. that is firmly resting in investor's minds about a potential cash call. lloyd's is still up well over 60% from where it was on the 30th of july. but in the last few days, continues sins thursday's close b it has fallen about so 10%.

we are thinking there's more people looking to buy. we're looking for buying opportunities and selling at the moment. that's going to be a positive for us. >> that's what i was going to ask, whether there's still an appetite to buy. >> there is an appetite to buy. we are still getting the feeling that people are looking to buy, not so much for now. >> thanks for that. let's find out what's going on in frankfurt. patricia. >> it does look more positive, that's for sure. we have turned around from negative territory, but there's really nobody playing in the market. only about 10 million shares have been traded and more normally we see about 20, 25 million shares around this time of day. is volkswagen is trying to

recuperate from the losses. watch out for a couple of stocks i want to point out to you. a hugely traded stock, coming through with huge numbers for that quarterly report. that stock is up about 7.8% as we speak. and also they raised their sales and earnings forecast going forward also at the moment, profiting quite a bit for testing demand for the swine flu. watch out for continental, up about 6.5%. that is that tiremaker, there is a huge amount of confusion going on with regard to that power struggle between continental. however, it seems there might be a compromise looming. as for tomorrow's report meeting, we should see a little more ahead of that hope that

stock is trading down 6.5%. that's frankfurt. over to switerland now and carolin. >> investors seem to be taking a wait and see mode here. insurance stocks are doing well. swiss life is one of the biggest gainers. swiss re is trading higher here. we're seeing adecco trading in red territory. that stock was down more than 5% in the first hour of trading. now the shares seem to be paring some of its losses. the company missed expectations with its earnings in the second quarter mainly due to impairment charges on good will and other assets and that's why we saw a net loss of 147 million euros for the quarter although analysts were expecting a slight profit here. the ceo of the company says he sees no material pick up in business conditions and he also says that the environment will remain demanding. however, we did get positive surprises from adecco, as well.

first of all, analysts like the cost cutting efforts of that company and adecco said it's making a cash offer worth $108 million boundz pounds for uk staffing firm springer. we're watching biosphere. that company is out with earnings tomorrow. today they disappointed investors with a weaker than expected top line base and the company also said that the bottom has been reached for the dental implantmaker. and that's it from zurich. now over to stephane in paris. >> thank you very much, coralin. the situation has improved on the french markets since the opening today, but the volumes are extremely limited, 320 million euros have been traded since the opening this morning, which is still well below this average we have today. natixis is still trading 9% lower after its main

shareholder, bpci says it has no intent to delist natixis. and the shares were up 84% in just 10 sessions. trading lower after a lexington newspaper reported that they're planning to buy gz. the negotiation within however, could fail on a price issue. also in focus today, snyder electric, one of the top gainers on the french market after the company is trying to take advantage of the new credit

conditions in europe. reuters is reporting that snyder electric has approached a group of banks to lower its interest margin on a three-year loan. the stock is one of the top gainers. snyder electric up 1% right now. now over to saijal for a wrap on the asian markets this tuesday. hi, saijal. >> hi, stephane. we had the markets here higher, but putting on fairly modest gains. of course, news dominated by interest rate decisions as well as economic data out of china. in china, of course, we had the trade day, retail sales output. bottom line is that the recovery is recovering, but perhaps not as strong as was originally thought earlier in the year. lending from chinese banks fell sharply in july from june, shows that banks are a bit more mindful when it comes to credit risks. rates were expected to tick up in the second half of the year so a lot of these loans were

pushed forward. and perhaps this drop in loans means that we could see a stop in sort of these credit tightening. as for japan, the nikkei still closing at a ten-month high, up 0.6%. not a lot of reaction to the boj, holding rates steady at 1%. that was pretty much expected. we saw light profit taking happening as the yen edged up. remember, there was a 6.6 magnitude earthquake this morning that hit tokyo and the surrounding areas and the thought is we could see reconstruction and so a lot of investors were picking up construction stocks. quickly on korea, as well, the kospi closed slightly higher and the bok kept rates steady at 2%. that was also expected. now back to bertha in the u.s. hi, bertha. >> thanks very much, hi, saijal. here, investors pick up the waiting game with an announcement expected wednesday

afternoon, as usual, around 2:15 new york time. but today we get a pair of economic reports on the calendar that the fed watches closely. second quarter productivity numbers will be out at 8:30 a.m. new york time. analysts are looking for productivity to have risen at an annual rate of 5.5%. that would be the biggest increase in nearly two years. unit labor costs are forecast to have dropped by nearly 3%. at 10:00 a.m., june wholesale inventories will be released, expected to fall by 0.9%. at noon, white house economic adviser larry summers is speaking at an event in washington. the group, well known for calling the beginning and end of recession cycles. summers will speak for about 30 minutes, then he'll take questions. that's always the interesting part. applied materials posts results after the opening bell. they posted a wider than expected loss in the previous quarter, but analysts believe it

is improving. second quarter global chip sales rose 17% from the second quarter. we'll be watching for that one. and that is your global stock watch. >> coming up on "worldwide exchange," china's ex ports in new loans fall in july while industrial output jumps less than forecast. we'll assess whether the stimulus effect is wearing off. >> plus, in july for the uk, one of the wettest months on record, boosts sales of furniture and household goods. is the great british shopper bouncing back? 5,5,5,5,5,5,5,5,5

2%, the biggest rise since july 2008. we'll get some reaction on that in a few moments. as far as the markets are kernd, stock markets, ftse cnbc global 300 just up 8 points. it's mainly due to a bounce in european stock markets. an hour into the trading session, we've just about hit the session highs, up 0.75% right now. the ftse 100 up 0.4%, just over 0.5% for the cac 40 1k3 smi is fairly flat because adecco is dragging that down. a bounce this morning with utilities, construction resources, oil and gas a little firmer, as well. on the currency markets, the yen during the asian session was up across the board. it is still up against the

dollar. the chinese data just boosting the yen. elsewhere, euro/dollar still at levels below where we were yesterday. sterling is just below 1.65 at the moment. christine. >> hey, ross, the focus seems to be on china. we had mixed data coming out there in particular. we had industrial production for the month of july growing at it fastest pace in nine months. take away any signals for monetary tightening, that seems to be the focus for investors in shanghai. the hang seng is up 0.7%. the bombay sensitive index up 1.3%. and the boj kept rates steady in japan and south korea. overall, a strong session here in asia, bertha. over to you. >> thanks very much, christine. futures are modestly higher this

morning, but investors are pretty much on hold. the fed begins that two-day meeting. the expectation is keeping rates on hold, but right now everybody wants to know what they're going to do with kwaupt tafb easing. we've got futures above fair value. we're got quarterly funding today kicking off with three-year notes being kicked off, $37 billion worth. right now, the yield is at 3.8%. as i mentioned, kicking off its two-day meeting in about four or five hours, what can we expect? joining us now to discuss, david page is an economist with

investec. david, everyone is expected they will keep rates on hold. the big question is what they will say about quantitative easing. would it be a good thing for them to extend their quantitative easing or would it be a better thing if they thought the economy was in such great shape they wouldn't have to? >> we think there's very little chance that they will extend their treasury policy beyond the fourth quarter. i don't think there's any chance of them extending that, at least at this time, despite the surprise coming from the other side of the atlantic. but at the same time, we think the fed is going to be desperate to avoid any signs of suggestion about talking of exit strategies. the markets have been pricing in rate hikes from the fed, six months out. market rates will start pushing up in expectation of what it

might do, particularly at this stage. i think the fed will still consider it a very early day for recovery. >> early data and there's still the consumer. there will be a lot of data this week for retail sales and retail earnings. they're reduced their debt by about 5% and then continue to save. that's not a very good outlook for growth in the economy, is it? >> no, not at all. of course, in the longer term, one can argue that a less leveraged consumer will give the u.s. economy a foundation to push forward from. but we've got to get in the longer term before then and every time we see quarterly savings rates starting to pick up a little bit, that's a little less consumption that's going on. really, the rise in q1 was because of gains made in other areas of income. i think as we go into q3, though, we will see some pick up

come through, but of course, what we're seeing here is a slightdy authorization. cash for clunkers really looks like it's boosted auto sales in july. and q3 as a whole could well stay positive come assumption growth. but it will be very hard to x the fiscal stimulus out of that. >> we're talking about the consumer and the uk have brc out overnight which suggested that retail sales bounced on comparison. what do you make of the figures? >> it is a little bit of a rise. what we've seen since may is a slightly trend in the values. >> is this sustainable? >> we think in the short-term. the consumer has made a significant recovery from the downturn we saw in august 2008.

from august 2008 through to about three months ago we were seeing a flat profile. we're now seeing a consistent pick up. as we're looking now toward the end of the year, that could last. we're not going to see a change in interest rates, unlike seeing tax changes in the very short-term. and that is basically helping the bottom line for households and they're now feeling a bit more confident. the real question is, you know, as we move further into 2010, interest rates probably will rise then. we think taxes are going to increase over that period and there will still be uncertainty over the level of unemployment, as well. so i think the medium outlook remains unsure, but for now, it looks like the consumer is in a slightly firmer footing. >> david, this is christine. the bank of japan as expected kept rates unchanged. does the outlook on inflation, does deflation look less problematic in japan?

>> it does in as far as the rest of the economy seems to be picking up. the unlikely event japan is one of the first economies to emerge from recession. that creates less of a downward threat. but i think, you know, for the short-term, even the bank of japan is recognizing that the inflation rate is likely to worsen, get further into negative territory as we get towards the financial year, march 2010 and that's going to create continued uncertainty about the side of the japanese economy, particularly the inventory led recovery starts to fade. the bank of japan is looking for growth in the economy continue to pick up over the next six months. but if we see some back sliding, some retracement early next year, that might spark concerns about exactly what the deflation

rate outcome concerns is over the coming years. >> all right, david, thank you very much for being with us. good talking to you, as always. david page, investec. let's zoom in on china and talk more about the economic data coming from the country today. we had industrial output coming in lower than spec'd. let's get some analysis from glenn mcguire. glenn, good to have you with us. how would you read the data coming out of china snap? what does it tell you about the state of recovery in the country? >> the data makes me soft for today, the period of july was very mixed. i think there was something for the pessimist and the optimist in almost every relief. but it's important to remember the china reports its data on a year two basis and we were looking at figures, industrial production, fix dollars asset investment for july. if we look back last year, in the three months before the

august 2008 olympics, we saw industrial production running at very high levels pb so it would have been very difficult to get an acceleration in july 2009 numbers. we are seeing them holding steady and we are seeing consistent evidence of policy stimulus starting to work. at this stage, the recovery is probably a little bit more fragile than people expected. what this has done is portray some of the remarks of an early removal by the bank lending on fiscal policy as having been premature. >> speaking of bank lending, we had a sharp slowdown in the month of lending in the month of july. does this somehow alleviate any concerns for mormon tear tightening? >> it's interesting to look at the details of the bank lending

numbers. a key feature of bank lending in the first half of the year was very short-term lending. so three-month financing bills. essentially this was a credit easing measure by the peoples bank of china. what we saw in july was net negative of around 200 billion yuan. in short-term lending. so it suggests we're seeing refinancing of these bills. i think what we're going to see in the second half of the year is a continued rolling over of these financing bills and that naturally will suppress the net lending figures. but even assuming we see 500 billion yuan of lending for the next six months, four-year lending will still end up being around 10.5 to 11 trillion yuan or about 25% to 30% of 2008 gdp. it's still an enormous amount of

liquidity. >> glenn, explain to me, then, how it is that some people are so bullish on the chinese economy, particularly if the end demand isn't there from the likes of the united states, we have goldman sachs upping its forecast for growth to 9.4% of the chinese government thinking it's going to be 8% growth. that would mean an economy operating on al cylinders around the world, wouldn't it? >> it does. and i think today's data has highlighted some of the more optimistic forecasts for the chinese economy are misplaced. and it's important to remember that ex ports, they were down 23% over the year for july. imports were down 15% over the year. we're moving into a situation where import growth in value and volume terms is going to pick up very strongly in the second half

of the year, given commodity price effects. the economy will move into trade deficit and trade will make a substantial detraction from growth of at least 2 to 3 percentage points this year and next. and you have to have the domestic components of growth growing around 0% to get a net figure of 8% and i think that's next to impossible. and to see domestic demand that strong, i think, is unlikely. so i think at the most optimistic ends of forecasts, we should still be looking around an 8% figure maximum for chinese growth this year. >> thank you very much, glenn, for putting things into perspective for us. glenn mcchoir talking to us live from long congress. from talking about china, let's talk about india. ayesha faridi joins us live from

india for the indian bit report. >> thanks for that, christine. the markets have picked up. 4,500 is back for the nifty. similar is the case for the sensex, as well. so you do have those pockets which actually give up their gains in yesterday's trade. for example, the entire auto basket is holing up strongly. tata motors is notching a 6.5% gain and you have the entire sugar pack on the kind of prices forming up. the entire sugar sector is picking up very, very much. we are picking up reports that the government has indeed chosen strife arkalap to be the generic formulation of tamiflu. they haven't got an official

word from the government in terms of the kind of orders that they may actually bag and what sort of price appreciation or rather margin bump up it may lead to, but the stock itself is holding up very, very strongly in trade. meantime, 161 strains have been confirmed. with that, it's back to you. >> ayesha, thank you very much. in asia, yanzhou coal has agreed to buy felix. the deal is likely to be struck below 20 aussie dollars per share and up to 20% premium to felix's trading price. shares of both companies were placed on a trading halt today. yanzhou coal traded at 12.12.

this begs the question if commodity plays are still a good buy for investors. mark mobia shares his strategy. >> china alcoa and aluminum is an obvious resource pick for us. we're looking at the coal companies. iron and steel, we're in that in the larger companies. now more and more we're moving into some of the banks, but more cautiously because we think some of them might have bad loan problems down the road. >> intercontinental hotels has posted a 38% drop in the first half profit. the british group says it doesn't expect future bookings to get worse, but has acknowledged trading will be challenging this year when the

economy repounds. the kre o says intercontinental will be well positioned to take advantage of the situation. >> we think we're going to be in good shape when it does come back. we're still opening hotels and we've got big relaunch brands with the holiday inn brands, our biggest brands. in our brands and products, we're ready for when the uptick comes. here in the states, you don't usually think of wall street traders looking for government work, but they might do it now because the new york fed is going to a hiring spree. the branch plans to double its staff in its market group. the new york fed is aggressively hiring traders many from private equity firms as it seeks to manage its greatly expanded security holdings.

its assets have more than doubled to $2 trillion in the past year. >> facebook failed in its efforts to buy twitter last year, so it's doing the next best thing, it's buying up a similar website. friendfeed was started by a group of ex google engineers. friendfeed is a microbloging service that allows users to share online content across multiple networking sites such as facebook. still to come, china's iron ore imports hit a record high in july. is this due to demand or simply speculation? >> the yen was up today. we'll get more on that when we come back. llllllllll

we turn our attention to the currency markets. the yen has been up across the board today. dollar/yen is back down to 96.76. it did particularly well against the aussie and the kiwi dollar

on the back of that chinese data we were just talking about which is below forecast in factory expansion. elsewhere, euro/dollar below 1.42. sterling is below 1.65. euro/sterling is steady around 0.86. stephen gallo, good to see you. we'll talk about the chinese impact in just a moment. before that, we've got the fed meeting starting today. probably a bit of covering of positions haedz of that. but i wonder whether coming out of this, it will confirm whether the dollar relationship towards risk appetite has broken down. >> the short answer to that question, i think, is no. i think by and large going forward, if we do see some sharp declines in equity markets or on the reverse side of that, we see any large rises in risk appetite, the dollar will start moving. there is a big feeling, though,

ross. there is a big feeling coming off that nonfarm payroll number in a week. potentially the dollar will begin to do well now on this motion that the united states is emerging on recession and outperforming a lot of its peers. since q1, we've seen a big die vergence is how the u.s. is confirming compared to places like the euro zone, the united kingdom and japan. the point is markets are not trading at this point relative to growth differential. the most important thing in this day and age is capital flows, risk flows. so we think that will continue to have a net negative impact on the dollar later this year. >> how would the fed, then, play? if the fed came out with an okay assessment at the end of this meeting, would that be dollar supported? >> i'm not so sure about that because, you know, i think the nonfarm payroll -- a lot of the q3 data culminating with the

nonfarm payrolls numbers last week show they're probably going to sit on the sidelines. i don't think they're going to ramp up treasury purchases. but at the same time, they're not going to do anything in the statement to signal that a near term tightening is imminent. that is is the last thing they want to do. what i would say is that the august meeting of the fed is going to be one of those meetings where the internal discussion might even think that we don't hear about are going to be far more interesting than the statement. they'll be talking about things like sterilization, exit strategy, all sorts of things that had market would find juicy. unfortunately we're not going to get too much more clarity. >> we'll have just have to wait a couple of weeks, then, for the fed minutes. but one of the things that might cloud the picture is we've got this record quarterly refunding auction this week today with 37 billion and tomorrow, the ten-year just one hour ahead of the fed announcement, how is

that likely to impact currencies? >> i'm not so sure about a currency impact. clearly, the market is still looking for what the demand picture looks like for u.s. treasury data if there is any extended decline, i don't think it would bode too well for the dollar. i don't think that's too much on the radar screen right now. i think the treasury would much prefer that the refundings did not come on the same day as fed meetings because clearly, with expect ages that the fed may let the treasury purchase program run off, there's going to be probably a lot of anxiety or volatility around the treasury meeting. >> hey, stephen, this is christine. we have chinese data showing that factory expansion came in below forecasts. it looks like the yen is being

impacted as a result of that. >> yeah, a little bit. what i would say on the chinese data as a whole is that it generally paints the picture of the relatively robust but albeit, you know, somewhat more modest growth in china. the new loans data was interesting because it did fall sharply for the most recent month that we have available. and what i would say is that by and large, that should cool some of the speculation we've seen recently about fears over a liquidity bubble in china. we know chinese authorities are looking heavily into stock purchases, things of that nature. they're probably checking to a degree the rate of loans to the private sector. so, you know, i'm not concerned at this point about an early chinese tightening because of some sort of liquidity bubble. maybe 2010 there might be renewed fears over that, but not at the moment. >> stephen, thank you very much

for that, stephen gallo, head of market strategy schneider market strategy. >> and china's voracious appetite for iron ore looks unstoppable. we'll get the analysis after the break.

i'm christine tan. in asia, china is making more, but exporting less. and i'm ross westgate. in europe, adecco sounds a sour note on the jobs outlook. >> and i'm bertha coombs. in the u.s., the fed kicks off a two-day meeting with many looking for its exit strategy on efforts to prop up the financial system. if you're just joining us in the united states this morning, hello and welcome to your global day from "worldwide exchange." we broadcast live from the u.s., asia and europe. in the u.s., futures are bouncing back after markets closed modestly lower yesterday.

the fed is starting its two-day meeting and starting its quarterly efforts. $37 billion of three-year notes will be auctioned today. the fact that those two things are happening together has the markets pretty much watching. it will be a key week for bond sales. taking a look at the ten-year bund, they are higher this morning, but at this hour, we're still a little higher. yields are at 3751% for the ten-year bund and the ten-year note here in the u.s. has been covering somewhere in the range of 3.80 and it's exactly there right now. we get the ten-year auction tomorrow, ross. that's 23 billion dollars, ten-year auction. one hour before we expect to hear from the fed. so that's really going to be a very interesting auction to see whether there's any appetite for that without people knowing what the fed's outlook is going to be. >> yeah, exactly. but i think there are a lot of

maturing, as well, of issues, so maybe that will be freeing up money to go for these new auk auctions, as well. the ftse cnbc global 300 is up seven points. most of that rise is due to european stock markets. two hours into the session, gains around 1%. 0.6%port cac 40. the smi is flat maply due to the fall in adecco. the world answers biggest staffing company came out with better than expected surprise on the markets. gains from the chinese data was as strong as some had hope. the austy and the kiwi today. elsewhere, the dollar is weaker against the yen. sterling against the dollar, below 1.65, christine. >> hi, ross. here in asia, a strong session. big focus, of course, coming from china. we had big showing recovery is.

investors in shanghai really looking, instead, at bank lending data. that showed a sharp drop in july. people are saying that kind of takes away concerns about mormon tear tietdenning in china. the shanghai composite up 0.5%. hang seng is up 0.7%. the bank of japan kept rates unchanged, nikkei 225 up 0.6% and the bank of korea kept rates steady in that country. in india, the bombay sensitive index up 0..%. overall strong session here in asia. nymex light sweet crude, given the data we're seeing coming from china, china is a big -- what do you call it? commodities seems to be rising, up 41 cents. and brent putting on gains, as well. up 27 cents, $73.77 a barrel. ross.

>> okay. a gape of stocks, more on commodity prices, joining us now is julian panhost. we've got slim gains this morning. what are you doing at this particular moment? are you engaging or taking profit? >> we've sort of trimmed a little bit. but mostly i'm doing not very much. i don't mean i'm sitting around not doing very much, but in items of trading, first, obviously, we have the markets. secondly, we have the debt issuance, the fed meeting and people are focused on that. but thirdly, i think people are waiting for the next big clue. and the market seems to be bifurcated. i think what people need to bear in mind is that second quarter earnings are a lot of beef. but a lot of that was from cost

cutting. that was the one off. what people sneeze to see is stabilization. >> it's all very well saying i can explain away the earnings season on the cost cutting. but the reaction is that we've had, you know, a big move up in the equity markets in the last four weeks. >> it's been great, yes. >> so it's ae all very well explaining it away. so do you keep playing it, or not? >> well, i think you have to be sensible. but remember, there are a lot of people i speak to who have zero weighted equities at all. so they're hoping for a correction. >> that would be an awful place to be. >> but what they're actually hoping for a correction so they can get a second bite of the cherry. and so i think what we will see that could support equities in the third quarter results season is obviously this time last year, the beginning of the third quarter 2008, the world fell off a cliff. and so for the next two years, the company earnings and all about gdp, it's all about base

effects. because the third quarter gdp is very weak, we could start to see stabilization in the revenue line moving forward because 2009 has been so weak in most countries globally and everyone is talking about inventory restocking, talking to companies we're startling to see that. you can see 2010 gdp looking healthy and everyone saying that's great. then 2011, you have a higher base effect global gdp plus industry stocking plus all the governments have to start reigning in their budget deficits. so public sector spending will be kaushty in the worst. that is why it is highly possible you can get a double dip in 20 1. but for now, we're playing quality and we don't have any banks, actually, either. >> julian, you mentioned the fed and the debt issuance here in the u.s. what are you looking for to give you a little bit more clarity this week? >> well, once again, the fed and central banks globally are in a

difficult position. they get one statement wrong and you only have to look at ecb press conferences. mr. trichet says one thing and then he says another. looking at the currentsy, they're all over. so you have to be careful. and my personal belief is that as some of your guests have said before, central banks have to be very careful and the fed will be very to be careful to strike a balance. on the other hand, if they say we're utah of the woods, everything is fine and damagedy, then there is a risk that pooi people start pricing in a rate hike. yields blow out the long end of government bonds and that makes their job harder because they have to sell a lot of debt in the next two years. so they just have to strike a very -- walk a very thin line and basically keep people slightly pessimistic. ironically, to be able to get them to buy their debt. >> julian, this is christine

here. in my neck of the woods, we're all looking at china data. what are you factoring in as far as china is concerned? do you think china can still lead the world into a recovery? >> no. just a -- nothing about china specifically, but just the mag taught, the mathematics of it. if you have a country that accounts for 9% of global gdp, to be generous, 8% if you believe all the numbers, there's a lot of debate about that. that gives you less than 1% incremental growth on gdp. most on that demand is fixed asset investment, as we know. the economy is basically being force fed by the economy package. the total money supply expansion of china is greater than that, according to some things i was reading yesterday. of europe, the u.s. and japan combined. now, so out of the bottom of that, all that money is going

in. what are they doing with it? they're building roads and shopping malls and skyscrapers by local government and that's great. >> shopping malls always are the best place to put your money. julian, we're going to leave it on that. you'll stay with us throughout the hour. julian pendock, partner pen house capital. still to come, we're going to dig deeper into the outlook for metals with our next guest after chinese iron ore imports reached a new high in july. 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. can i try that? [ chuckles ] wow! good luck getting your remote back. it's all right -- i love this channel. shopping less and saving more. now, that's progressive.

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welcome back to "worldwide exchange." australia has brushed off a government report accusing iron ore producer rio tinto of spying on officials. the executives said the miner is still not aware of any evidence to support detention of its employees by chinese authorities. rio tinto shares is trading in sydney and london at this point in time. in sydney, it is down 1.1%. in london it's up 0.9%. meanwhile, iron ore imports in china have reached another record. the new highs were held by an

expanding output from automakers, steel producers and builders. imports of iron ore were up almost 32% compared to a year ago. the chinese economic stimulus helped drive demand. for more on china's appetite for commodities, let's talk to caroline bayne and julian pendock is still with us. caroline, good to have you with us. when you look at china data coming out, does it somehow feel to you that china demand can rise to commodities? >> it has been the driving for us in the first had a of this year and primarily the fundamental factor that we have seen. but it seems most likely that from production data and from export data that most of the imported commodities are going to stocks by producers or the state reserves bureau. and i think the big question at

the moment is china stocks are probably getting pretty full and when that's going to feed through into higher rates for production and higher external demand for what they're producing. >> buying out resource companies, this time pursuing a $3.3 billion call deal with phoenix resources in australia. i would have thought that problems would have somehow -- you know, would have hurt its acquisition strategy in australia. >> you would have thought so, yes. but they have an acquisition strategy and perhaps rio tinto is slightly a big fish to try and snap up and it still remains to be seen how far they will get with this bid for the share in phoenix. there was a lot of opposition in australia to -- from both the shareholders of rio tinto and also from the states themselves against chinese acquisitions. so it will be interesting to see how this bid develops.

>> cher >> caroline, going back to the stocks resource, if you combine both elements, the chinese seem to be killing two birds with one stone. a lot of these raw materials and commodities is at a faster clip when everything was firing on all cylinders, which suggests it is stockpiling because the demand is not there. secondly, it seems to be a good hedge against the t bills. and thirdly, it seems a good parallel strategy if they think they're going to run into resource nationalism issues themselves in terms of m&a, then just by the end of production, stockpile it several years worth if necessary because it's not like it's going to go off. >> so what do you -- there has been rumors in the market that the stockpiling is coming to an end. what do you think investors should be looking for as clues,

apart from the battlic dry rates and import data, which is trading? when do you think they will stop their stockpiling? >> i think if investors were looking to impart into metals now. because i think now is the point where we need to see the revised signal. and some of that industrial production rates is mining is coming back. refining mentals has become more confident. this is a question mark of whether this is the final demand and the end uses of these models. so certainly from our point of view, we're looking for people to stabilize as people look to see what's happening. >> killer even, you know, we did

see record demand or imports for iron ore, but at the same time, we saw a 15% drp in copper imports. usually china is the main driver in car ports, that canary in the coal mine telling us what's really going on? >> well, copper imports have gone through the roof in the first half of this year. it's hardly a surprise that growth in copper imports has started to slow. partly from what i've been saying, that you come up to capacity constraints when you're stockpiling. if it's going into an end use then, of course, you can go on importing at a higher rate. that's what we secretary to see with most metal imports. >> you're sort of hinting that you're not taking commodities on the imports stage. >> we have a bit of exposure,

but just because you could see from the data it was stockpiling. and it's all very well to play in inventory rebuilds because i think that's what's going to drive gdp in the west next year. and that's before that came out talking about base effects and so forth. but just because it's difficult to get very excited about companies where, you know, the list, chinese officials, government officials say, that's enough, cancel the rest of the orders. you can get rm caught in a very tricky position and, you know, get whipsawed by equity prices on that front. >> thanks for that. carolyn, nice to see you. >> in the u.s., a congressional watchdog panel says despite signs a financial system is stabilizing, banks are still under threat for toxic assets that remain on their books.

it was said more banks could fate in the economy worsens. smaller banks are at a greater number. owners of hospitals, commercial and residential exits. b of al has agreed to pay $43 million that it filled to tell investors prior to the merger last year. but the judge says he wants more information about who is responsible for the alleged wrongdoing and the basis for the settlement, along with further court hearings are needed. in frankfurt at this hour, bank of america shares are trading up just over 1.3%. >> still to come on the show, european markets are following asia higher and it's mining

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ahead of the u.s. open,

let's take a look at worldwide markets. joshua, how do you measure appetite the morning? >> we've got a little pessimism in the market. and the last hour when those greater british trade figures came out, obviously, the deficit had widened more than the market had expected. from that, we saw equity markets coming off a little bit. sprets have begun to cut their losses a little more, as well. so we have seen a fair bit of start to come in maybe and cut their lungs a bit. but they are still looking for buying opportunities. >> okay. joshua, thanks for that. that's the view in london. patricia has more in frankfurt. >> ross, we have very close to our interday session lows at the moment. the momentum at the moment is downward. through thyssenkrupp g off 1. 5%.

s.a.l. and lufthansa down about 1%. the car sector is outperformancing a little bit the market. interesting to see a couple of shares here. we have kayagen coming through with very good numbers, up about 8.35%. i think that is preparing for a positive opening for the u.s. market. the other thing is carmakers in germany up 6.6%. there's speculation that they might have come up with a come mize between continental and shaffer. the companies didn't want to comment early on. that's thanks further. over to stephane. >> in paris, volumes are still very low. it's off the usual volumes, but the trend is now positive.

danone is still one of the top gainers. in roadway search note, said that the recovery should continue in the second half for the company especially in the diary product division and on the second biggest gain of the cac 40. snyder electric is in good shape today as the company is going to cut its borrowing costs and trying to negotiate with a group of banks to lower the interest margin on its thee-year loan. that's the report from reuters. snyder electric is up 1.2%. on the down side, natixis, down more than 10% after the main shareholder of the bank confirmed that it has no plans to delist natixis over the last few weeks. the speculation boosted the share price by 84%. the announcement was made yesterday after the market closed. that's the reason why we have such a negative turn on the markets this morning. now let's look at the asian

markets are eye eewith saijal. >> we saw the hong kong market hit near a 12-month high after recovering losses earlier this morning. the shanghai composite starting in the red, but closing up about 0.5% higher. we have a slew of economic data there. i want to zone in on the lending data. this is the lending by chinese banks. now, that fell sharply in july from june. something that a lot of analysts have been watching and it shows that these banks are concerned about credit risks. analysts were saying that because a lot of banks were expecting rates to particular up in the second half, that a lot of these loans were pushed forward. we saw chinese banks, the a and the h-shares rally. the boj kept rates steady at 0.1%, which was pretty much expected. now back to bertha in the u.s.

>> thanks very much, saijal. here, investors are waiting to see what the fed has to say about rates as it kicks off its two-day policy meeting. announcements expected wednesday afternoon about 2:15 new york time. ahead of that, we're going to get a pair of economic reports this morning. second quarter productivity numbers will be out at 8:30 a.m. new york time. analysts are looking for productivity to have risen at 5.5%. unit labor costs are forecast to have dropped at 2.9%. at 10:00 a.m., we'll get june wholesale inventories expected to have fallen by 0.the%. at noon, larry summers is speaking at an event in washington, hosted by the national bureau of economic research, the group well known for calling the beginning and end of recession cycles. summers is going to speak for about 30 minutes and then take questions. after the bell, we'll hear from applied materials. the chip equipmentmaker posted a

wider than expected loss last quarter. last week, it was reported that second quarter chip sales are up 17% from the f quarter. that will be one to watch today. that is your global stock watch. >> and still to come, we'll be asking, is it premature for the fed to start winding down its government bond buying program? what do you think? e-mail us your thoughts. welcome to the now network. population: 49 million. right now 1.2 million people are on sprint mobile broadband. 31 are streaming a sales conference from the road. eight are wearing bathrobes. two... less. - 154 people are tracking shipments on a train. - ( train whistles )

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it is half past the hour. here are the top business stories we're following from around the world. in the u.s., fed kicks off its two-day meeting with many looking for signals of an exit strategy in efforts to pop up the financial system. >> in europe, adecco found lows on the job outlook. >> and here in asia, china is

making more, but exporting less, create ago drag on the chinese economy. hello and welcome to "worldwide exchange." if you're just joining us from the u.s., you're seeing a bit of a bounce in the futures after yesterday's close. that was modestly lower. we've got dow futures up about 25 points above fair value, but we've got a lot of data here in the u.s. this morning, we're going to get productivity numbers. the fed starting a two-day meeting. on top of that, we have a $37 billion three-year auction at 1:00 new york time. so lots for investors to digest. we've got the ten-year yield at 3.80. so a little lower than we saw yesterday. a little bit of caution ahead of the fed's two-day meeting. how are things going this morning in europe, ross? >> stocks are generally a little firmer, not quite at the session highs, but we've had gains of --

i was going to say we had gabes of just over about 0.3% at the moment, but we're even less than that now. the ftse 100 and the xetra dax is back. we'll see whether we get any meaningful improvement or not. on the currency markets, you saw the commodity kurnltsys weaker, the kiwi and the aussie dollar 96.79. ur euro/dollar, is .4154. cable, still below the 1.65 mark. >> hey, ross. we saw recovery is perhaps moderating. the key focus is industrial production coming in less than expected. investors in shanghai focusing on bank lending which slowed sharply in july.

this particular market up 0.5%. the hang seng is up 0.7%. in japan, the nikkei 225 is up 0.6%. the bank of japan kept rates steady and the kospi is up 0.2%. the bombay sensitive index in india is up 0.2%. nymex light sweet crude, this is how the picture is looking for oil. nymex light swede crude is way below the 72 highs we saw on friday, $70.89. and brent is down, trading at $73.70 a barrel. bertha, over to you. >> thanks very much, christine. joining us now for market strategy is art hogan, managing director. and julian pendock is with us. arty, i want to start with you. today everybody everyone will be focused on the fed. but let's start more widely. we've had a really nice move in

july. the markets are at new highs for the year. is this kind of as good as it gets for a while? have we maybe stolen a little momentum from the fall? are we due for a pullback? >> you know, it's interesting. that's the $64,000 question. everyone wants to know how we got to where we are on news that was less bad. second quarter earnings season came in better than expected, but still not where we have not them to be. i think what we've effectively done is priced in the now, priced in sustainability. nobody is predicting economic growth in the second half of 2009. it's really the first time for 2010 when we start looking forward to multiples. it's still reasonable. but it's going to take a vith catalyst to keep us moving ahead. the other thing here is we've got a dichotomy of events happening.

the fed is, at some point in time, will have to start upgrading the economy and talking about an exit strategy. there will be a lot of supply, putsing pressure on treasuries. the yield starts creeping up 0.4%. that's never been good for equities. >> julian, you touched on that earlier in the hour, as well. what is going to be the key factor to work through here in the next couple of weeks? >> well, exactly. the volumes in the u.s. were reasonable. so i think we have to look forward and further ahead. we're coming off the back of second quarter results. and to put it directly, epf has been driven by cost cutting. that's a trailing indicator.

because this was a horror show for the global economy, we should get some stabilization. but at the moment, if you take china, for example, you know, the cynics will say perhaps like me say, you know, just coming of the back of this with all the statistics being unreliable, which has always been the case, frankly, now they come out with numbers less bad and china bulls say, this is great, therefore, it's even better news. so there's a lot to come whichever markets you look at. so yeah, there are a lot of people out of the market and there are a lot of people who have taken money off the table and are waiting to see what happens next. so i think we're range bound at the moment.

>> and if stocks aren't particularly cheap or expensive at this moment, what do you to? >> well, a couple of things. i think this will be significant spectat spectators. some of the lows were basically indicative that they weren't all going out of business. so if you've been on the financials that have been on the mend, you want to get out of that space and start cycling in to early cycle industrials, things that start to benefit. energy stocks, basic materials and also technology. technology is going to have a plethora of m&a activity. we've seen that in the last month or so. there's going be more. if you're looking for data, i think those two sectors will be believers over the next 12 months. >> this is christine here. is there anything the fed could say that could possibly change that strategy? >> well, you know, it's interesting, christine. i think everyone will be on pins and needles over the next couple

of days. if the fed goes too far in terms of upgrading the economy and talking about the fact that, you know, which they haven't done as of yet, talking about the fact that they're going to have to change their monetary policies. i think that could slow that down. and certainly, we haven't seen any clear signs of inflation in either the cpi or the fpi. if the fed starts speak to go inflation, that means they're ready to start moving interest rates higher and i think that would tip the apple cart over for the time being. >> art hogan, thank you for talking with us today. julian, you will continue to stay with us. let's pop over to tokyo and check in on the trading day there. kondo-san. >> thanks, christine. the nikkei 225 marked a new closing high since october 3rd. a strong appetite for dip buying among foreign investors erased

selling of recent gainers such as exporters. major gainers were insurance and construction issues. after the nikkei reported that the japan's revised manifesto for the upcoming lower house election includes a vow to support the green sector. japan wind development and meidensha corp. gained over 5% each. the overnight coal rate was unchanged. and the government left its overall assessment of the economy unchanged for the first time in four months in its august report. the report points out that production and ex ports continue to improve, but worries employment conditions are deteriorating quickly. finally, a strong earthquake with magnitude of 6.5 shook

japan's capital and its vicinity including the tokyo metropolitan area this morning. two nuclear reactors were shut down, more than 70 people were injured and two sectors of neglia are closed today and tomorrow. yamaha motors is headquartering here but employees are off line for the week. thank you for that. still to come, while big wall street banks are firing, guess who is hiring? it's still the financial sector, but it's quite a surprise. we have more on these job opportunities in the big apple after this break.

before that, take a look at how u.s. futures are shaping up. i'm robert shapiro. over a million people have discovered how easy it is to use legalzoom for important legal documents. at legalzoom, we'll help you incorporate your business, file a patent, make a will and more. you can complete our online questions in minutes. then we'll prepare your legal documents and deliver them directly to you. so start your business, protect your family, launch your dreams. at legalzoom.com we put the law on your side.

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the financial times reports that the central bank branch plans to nearly double the staff in its markets group by the end of the year. the new york fed is aggressively hiring trader hes, many prosecute from private sector firms as it seek toes manage its securities holdings. the fed plans to buy mortgage backed securities as we all know. as ets have more than doubled to $2 trillion in the past year. facebook reportedly failed in its effort to buy twitter last year, so now it's doing the next best thing, snapping up a switer like website. it has acquired friendfeed.com, which was started by a group of ex google engineers who helped develop g-mail. friendfeed allows users to share their status, updates and online data in realtime across a number of network sites including facebook. >> in asia, we've got lots of

data from china. industrial output for the month of july grew at its fastest pace in nine months, but fell short of expectations. from 15% in june. meanwhile, consumer price inflation recorded its sixth traid straight monthly decline while producer prices fell. trade surplus came in higher than expected at $10.6 billion in july. ex ports fell a smaller than expected 23%. imports fell by almost 15%. ross. >> okay. time for a final thought with julian pendock. it's dubious of the chinese story. >> well, as you know, i spent quite a lot of my working career in that part of the world. the statistics are getting better. but the comment in the financial times the other day from which international body of statisticians was saying how can

they possibly get a handle on gdp imports and ex ports, a country of that size lacking in the i.t. technologies. in a record 15 working days? it's just -- you know, that's the real problem with that. of course, all statistics are somewhat political. >> it's whether or not people believe the statistics and act on them, right? >> yes, they do. absolutely. i worked one asian economy where your economy who had worked for a central bank was told to make statistics a bit more helpful because that way it would encourage investment and be self-fulfilling. you can sort of see the logic there. again, everyone calculates gdp in different ways. >> so the impact, if you're wary of that for investors, what are you doing? >> very much bottom up. i mean, there seems to be restructuring, the inventory cycle. shifts in consumption patterns is always a good one.

so again, it's a company i've talked about on here before that we go and we've watched before the results which is much better than expected was unileaver. it's products that people want. shift in consumption patterns for the u.s. >> and they had a total increase of sales in relation to proctor & gamble had a fall in. >> yes, yes. they were up 2%. even though they were negative asset wes b they were growing when global gdp is shrinking. so you have to do the homework, model them yourself. don't go by brokers because they have their own issues and just be sensible about it. >> julian, have a good day. thank you. bertha. still to come, we are going to look at the day ahead on wall street. the jul u.s. government is having the first of its three big bond auctions due this week. what's the appetite for

treasuries? stay tuned. hi, may i help you? yes, i hear progressive has lots of discounts on car insurance. can i get in on that? are you a safe driver? yes. discount! do you own a home? yes. discount! are you going to buy online? yes! discount! isn't getting discounts great? yes! there's no discount for agreeing with me. yeah, i got carried away. happens to me all the time. helping you save money -- now, that's progressive. call or click today.

ten minutes away from "squawk box," let's find out what's coming up. >> ross, we're going to talk about a lot of different things, the economic recovery, meshlg's health care -- we always call crisis. i prefer situation, conundrum. we'll talk cash for clunkers, all of the agenda today for our guest host, former senate majority leader and medical dr. bill frist. and the fed meeting is kick off. it's a perfect day to talk to the former director of the national council larry lindsay is on set. and another question, what does the future hold for fed chief ben bernanke? steve looed lease man got some answers while in the woods of maine. and general motors showing off the new volt. we will get news on how it performed in the government's mileage test. and bernie madoff is now behind bars and his cfo is apparently singing like a canary.

we're going to talk to the author of too good to be true, erin aldeman. she has some major feelings about madoff. we will be starting at the top of the hour, 6:00 east coast time. east coast of the united states, ross. >> makes sense to me. looking forward to it, joe. now let us get a look ahead at the trading day here in the u.s. with rob morgan, president of deardrom, mcguire, weaver and barritz. morning, rob. >> morning. >> everybody is looking at the fed and it seems as though once again they have to come up with the perfect statement and the perfect balance of what they're going to say about quantitative easing. what's your expectation? >> well, bertha, i think when chairman bernanke testified

before congress back in july, he telegraphed a lot of what he'll say today. he the did talk about unwinding some of these programs, curtailing some of these programs that were put in place when the whole financial crisis hit. so i would expect the statement is going to give more definition to exactly what that means. >> now, the timing this week, you get the quarterly refunding, another record batch of debt issuance. today we've got the three-year, $37 billion. tomorrow we get $23 billion worth of ten year an hour before the fed. is that going to cloud appetite? >> yeah. i think the treasury probably would have preferred not to have all that happening with the fed meeting this week. but like i said, on the positive front, the recent auctions have been reasonably good, given the sizes because we've had some massive auctions going on. as you said, continuing this week. so one of our themes, though, is

that the dollar is going to continue to sag and if we do hit a hiccup there, that would play into one of our investment themes. >> and so what does that mean as far as the rest of the market? we've had such a fabulous run, it looks like we're taking a pause. is this a pause that refreshes or maybe a time for people to start pulling back? >> well, we are market weight on stocks right now because even though we have a lot of positive underpinnings, earnings revisions just turned positive for the first time in two years. 85% of the s&p 500 is above its 50 and 200-day moving averages. so that's slashing a caution. so we think being in the right sectors would be important here. we like technology, we like materials and we like energy. those are our favorite spots. being somewhat neutral on stocks overall. >> although those sectors are the ones that have led this rally. >> yeah. well, as you said, technology

has been a big leader. it, too, is seeing rising earnings estimates. one of the few sectors that is definitively seeing that and then next year, as the market watchers start to focus on 2010, energy and materials should see two of the biggest earnings boosts from a sector standpoint. so they've done well, but we think the anticipation is going to drive them up even more. >> all right. thank you very much, rob. we're going to leave it on that note. thanks for getting up early and joining us this morning. rob morgan, president of deardro, mckwiert, weaver and barrett. taking a look at u.s. futures this morning, they're higher after we closed modestly lower yesterday. we've got dow futures right now about 35 points above fair value. nasdaq futures are about 5 or 6 and s&p futures are up about 3 points or so. ross. >> european stock markets, we had a firmer session and we've just gone flat.

the ftse 100 flat. xetra dax down slightly, cac 40 up slightly and smi down mainly on the back of the world's biggest staffing agency coming out with an unexpected loss saying things are not great on the employment front. so no pick up or stabilization as far as that company is particularly concerned, bertha. >> all right, ross. let's end it for today. i think we've had a full one, a pretty good one. thank you for joining us. i'm bertha coombs, in the u.s. >> full one, as always. i'm ross westgate in europe. >> and here in asia, i'm christine tan. thanks for your company on "worldwide exchange."