hello and welcome to cnbc's "worldwide exchange." we will be talking about health care reform and the impact of ted kennedy's death later on in the program. right now, though, we're turning

our attention to what's going with economic data. we're going to get the latest snapshot out of the release in europe. it has risen in august. the august business climate index, the 0.5. stronger than expected. we were looking for a figure of 88.9. no surprise to see the euro edging up on the back of that to its highest level of the day. the august expectations index, and that's where most of the gainers come from, 95 versus reuter's consensus of 92. the ifo institute, this service is probably the most important sentiment indicator that we get in europe. let's get some reaction to that. alexander, senior portfolio manager at investco management. the numbers were better than the consensus expectation.

how much more good data can we add in here to keep sending stock markets higher? >> that's really amazing to see how future expectations are driving positive sentiment years. we have seen other surveys recently. everybody is really bullish and expectations are extremely high for the future. so, therefore, as a result of that, i think when we look towards the end of the third quarter, there will be in particular pretty high expectations now on corporate earnings, on some industry production, with etcetera, so that overall, i think we are the safer expectations are high, people have become more bullish or less bearish than in the past. therefore, i think this can be quite difficult. >> yeah. on the basis, these expectations

are what have driven stock markets higher. we've got high expectations. presumably, it makes it easier to be disappointed. do you think we will be? >> yeah, i can that's exactly the right point. the risk right now is much higher than missing to the upside. >> go ahead. >> when we look at recent earnings announcement, etcetera, so much of the recent positive surprises was driven by cost reduction rather than top line earnings growth. so that is sort of the easy measure to give positive surprises to the market. what we need now is top line revenue corporations and this is only possible if it's a broad macroeconomic recovery. this remains to be seen.

>> thanks very much for that, with al ox ander. straight after that data, we have just seen markets come backside. the ftse cnbc 300 just dipped up one point at the moment. the nikkei hit fresh ten-month highs. but perhaps we had already priced in something that might have been a little better or even better than what we got. ifo saying german economy slowly recovering from its downturn. we just saw the euro hit its session high against the dollar. 1 much 4331. dollar/yen, 94.10. and sterling/dollar, 1.6330. interesting to note, euro continuing to make slim gains against the pound up near the 88. we have been down below 85, maura. >> of course, here in asia, we saw a rebound for stocks, ross.

we have the nikkei now closing at its highest level in 2009. we're at ten-month highs as big buy orders came from the market today snapping up the exporter stocks. i'll get more details on that for you in just a short moment here. for example, the electronics are gaining today on the fact that its joint venture partner may be getting aid, as well. shanghai stocks bounced up today by 1.8%. some earnings coming out, for example, some of the airline companies in china, air china, for example, coming up with better than expected results and that helped to improve market sentiment on this wednesday here in asia. as for crude oil prices, let's check on the numbers for you now and see how nymex light sweet crude is doing for you at the moment. a gain of 41 cents here. brent crude, front month contract, trading a bit higher, as well, currently standing at

$72.34. the weekly u.s. inventory reports coming out today, 10:30 new york time, a dow jones forecast is calling for oil to fall by 600,000 barrels, gasoline to drop by 1.1 million barrels and distillates to rise by 300,000 barrels. what does this wednesday have in store for u.s. stocks? for that, we'll check in with mike in the u.s. good morning to you, mike. good afternoon and thank you, maura. kind of an interesting move in oil after hitting $75 a barrel and closing lower. but here in the states, it looks like the dow, at least, could roll a lucky seven when the opening bell rings in, what, 5 1/2 hours from now? all of the three major indices pointing toward a higher open this morning. and interesting, i think worth pointing out, is that the nasdaq is up a whooping 660% off of the

march lows. even with stocks moving higher yesterday, we saw the price of treasuries going up, as well. let's take a look at what the bund is doing this morning. we have the yield on the bund creeping up ever so slightly at 3.26%. the yield on the benchmark ten-year t-note here in the states fell yesterday and right now it's ticking up ever so slightly at 3.44%. we have the government coming in today with yet another auction at 1:00 new york time. $39 billion worth of five-year t-notes. and finally, moving up on to the gold market, something similar to what happened in oil yesterday. it had a huge pop. it was trading as high at $954 yesterday before closing up $2 at $944.50 an ounce and this morning, it's up yet again at $948.40. maura. >> mike, before we get to our next guest, let me apologize to

our viewers in europe at the moment. we're having some problems technically with some of the data you're seeing on your screen right now. we're work on it for you and we'll get the accurate numbers to you as soon as we can. again, our apologies to viewers in europe at this moment. meantime, let's bring back alexander and norman chan joins us today from banyan asset management. gentlemen, thank for joining us. normal, let me start with you this time around. we are seeing a bit of a wild ride for stocks in china and today it seems shanghai was driving the rest of the sentiment across this region. is that your reading of how stocks perform in asia, as well. >> china has been the leader on the stock market this year. and the recent consolidations we are seeing in the market is

basically to the sharp gains on an interday basis. we have seen the shanghai market has a gate of over 90%. but so far, after minor corrections and the shanghai market seems like it would be able to consolidate, especially if the economy and the company continue to do well, i think there is still upside gain for the shanghai stock market. >> norman, this is mike huckman in the united states. yesterday we did see consumer confidence numbers come in way better than expected. this morning, though, we did see japanese ex ports come in weaker than expected. so what does that say, potentially, about the strength or weakness of the american consumer setting aside, of course, consumer sentiment and confidence levels? >> well, i think consumer confidence level is very important for asian exporters.

but the weaker news from japan is probably a time lag issues. when the government starts to rebound, i think it will take a few months before it will start to show some risk out in asia. but actually, in the past few months, we have seen, with you know, export recovery in taiwan, in korea and singapore and so the situation has started to stabilize. it's not as strong as 2007 or 2008, but it's improving. should the export sector continue to consolidate or do well or do better than what we have seen in the past two quarters, asian economists would have even better footing and that would help the stock market. recently, we have talked to some hedge fund managers that have started to pick up some -- in some good export or industrial firms in asia. >> and alexander, i mentioned a

moment ago that the nasdaq is up a whooping 60% off the march lows. since mid-july, the major indices are up more than 15%. have we come too far too fast? >> i think honestly, that's the case. especially when you look at which stocks really drove this. we always used to describe this low quality radio junk, really, so it seems cyclical speculative stocks, negative earnings, negative cash flows, very poor performance. they have rebounded so dramatically, purely driven by expectations. to some extent, asian, but from another point of view for many of those companies, there isn't much in terms of actual cash flows or earnings supporting this. and some of the more quality names are being sort of left behind in the recent rally, so,

therefore, i would be a bit cautious when i look at the coming weeks. >> norman, if you're an asian investor, should you be cautious here or are there still opportunities to invest? if so, where, if you're talking about stocks? >> well, i think on the stock market, it would become a more stock picking market. and i think the basic gain has been passed, really, although there are still some potentials. i would say looking forward, the fundamental will prevail, but on the macro basis, i think the global economy is still gaully, you know, recovering and the asian region is going to probably be able to enjoy a few moments of swiss bought before we see some tightening in the policies on policies. so in the medium long-term, we're still optimistic about the fiscal upside. >> norman, thanks indeed for

joining us. and alexander, thank you, as well. we seem to be having problems with our data, so apologies for that. we are doing our best to actually fix that. shares of wpp are taking a hit this morning after the giant took an 8% drop in like-for-like sales. this drop comes despite them telling cnbc that further cost cutting will improve profits in the second half. they say things have already become less worse. maura. >> a touch of retail therapy, meantime, here, ross, helping austral australia's west post group. it posted a 12% rise in the first half results. in the six months to june operating profits came in at $6830 million. shares of the world's biggest shopping mall operator gained nearly 5% in sydney today after the managing director sounded an

upbeat note about the year ahead. >> in the u.s., we're seeing signs of stabilization, particularly towards the end of the second quarter. and we're getting a higher occupancy rate. in the uk, we're seeing signs of stabilization, as well. sales in the uk are stronger than they have been in the u.s. and we're slightly positive. >> and despite reports to the contrary, toyota says it is now stopping output to watch weak demand. yesterday, the asahi newspaper reported that the world's biggest carmaker may hike production. it's considering shutting down its joint venture with general motors. toyota was earlier said to be cutting production by 10% and stop production lines at home as well as in the united kingdom. and senator ted kennedy, widely recognized as the liberal lion of the senate, has died

after battling a brain tumor. he was 77 years old. for nearly half a century, ted kennedy was a come the nant voins voice on nearly every social issue including civil rights, war and peace and health care reform. elected to the u.s. senate in 1962, when his brother, john, was president, kennedy served longer than all but just two senators in u.s. history. his death comes just weeks after that of his sister, eunice kennedy schriver. the fdic board will meeting today at 3:30 new york time in the afternoon to vote on whether to ease restrictions on private equity firms looking to invest in failed banks. last month, the fdic proposed rules that would require firms to maintain a capital ratio in banks that they aware. for at least three years, those banks have ratios lower than that. citigroup's is reportedly just 9%. the fdic could reduce that

requirement to 10 bers or lower in an effort to require more bids for banks that are seized and closed. of course, you can get nor news, videos and blogs on today's market-moving news at cnbc.com. ross. still to come on the program, german business confidence has risen for a fifth month in a row. but is there a risk that the economy could contract again next year? toyota has down shifted. the worl's biggest automaker plans to cut production by 10%. can it recover from its first year in the red? and the u.s. national dead will nearly double over the next ten years. we'll did you discuss whether that will threaten president obama's health care agenda.

let's find out where we are with this equity market rally we've had going on. we have sylvia in germany, with carolin in switzerland, adam in singapore and stephane in paris. first, becky, over to you. >> the ftse 100 has been negative to start out with and then we saw it turning positive. as we speak, we are pretty flat, really, certainly coming off the highs that we saw just a few

moments ago. let's take a look at the individual losers, as well. amongst the gainers, shares of c serco standing out. this is a british company which is in support services, they run various prisons around the world, air traffic control. they reported very strong figures, first half earnings that beat expectations and their confidence on the full year, as well. refs very upbeat about the outlook of the business. they've increased the dividends, as well, and are continuing to invest in new growth activities, as well. and the shares are moving markedly higher. on the downside, wpp is taking a hit. this is the world's largest advertising group. first half sales down by 8.3% on

a like for like basis. that's a figure analysts have been expecting and are looking for 7.8% declines. we have the ceo of that business, as well. sir martin sorrell, as well. while it has been hurt by the global economic downturn, they believe that the second half will start to improve. but still, it's the worse than expected sales figure which appears to be driving sales lower. let's get across to sylvia standing by in frankfurt. >> becky, it's not really a corporate story today. the dax is zigzagging up and down again. we're in consolidation mode and stock picking our way through there when the opportunity arises. what we're looking at this morning is clearly the ifo index. surprising on the upside but the reading of 90.5 is stronger than the market expected. current conditions slightly

improving, but it's the expectations that are still running away with the ball because businesses are expecting a strong third quarter and maybe a strong fourth quarter. why they keep doing this split whereas current conditions are still relatively glum, if you look at it, remains to be seen. but clearly sentiment is picking up. >> we had import prices picking up. it's a familiar scenario as the disinflation scenario continues. 0.9% on the month. so it still shows you how much we're in a disinflationary environment, but the figure doesn't seem to have rocked the market. carolin, what's up in switzerland this morning? >> we're probably trading flat here on the smi. swiss livestock is down more than 5% and now overall, net profit was $139 million swiss francs. that was worse than expected.

on an underlying basis, in switzerland, that's where we saw worse numbers. also numbers from the german part of the business, abd, those were weak. many analysts think that we'll see a good will impairment here for '0. a positive take away from the numbers, stronger than expected shareholder equity as well as the solvency ratio, up 155%. that's it from zurich. now over topoland with blah za. >> thanks. the index was over 14%, and so the number for the whole year, year-to-date return over 29%. the stocks lower today after a very strong rally in august and

it is stable at the moment after just touching its highest level since january 2009 against the euro yesterday. of course, we are waiting to this important monetary policy decision here in poland and they are expected widely by the market to keep the rates on hold at an all-time low of 3.5% and they're expected to do so because the numbers from the poll lish economy including retail sales from july are coming at much better than expected. so no decision to cut rates here in poland. maybe a decision to cut rates in september, but this will be determined by publication of q2 gdp numbers from the poll lish economy due on friday. that's all from warsaw. now let's go out to stephane in paris. >> thank you very much, blazej. in paris, it's about banks today. natixis is trading 34% higher after a loss of 883 million euro

for the second quarter. but it announced a guarantee from its main shareholder, bbcp, it's going to provide a guarantee for the toxic assets. it's worth 35 billion euro. natixis is expected to reach a profit for the second half of this year and it's estimating retailers of 12% in the second half of the year. the volumes are extremely important. still in the banking sector, dexia is trading higher. the banks is due to set quarterly results after the market close. dexia is up more than 3%. we have alcatel-lucent after natixis raised its recommendation from the stock from buy to neutral. however, the company lowered its guidance ford second half of the year. that's to compare with the

previous target of low single digit growth for sales. now let's have a look at the asian markets with adam in singapore. >> stephane, thank you very much. it was a robust session for asia today. china was leading the pack higher. there was a lot of volatility in this market and you can see it in the interday trading charts. investors are really concerned about the release of the annual report that came out yesterday, suggesting that they work on liquidity in the banking system. investors focused on the earnings. we had numbers out just a few moments ago. oil prices were lower. nymex light sweet crude numbers dropped substantially. 12.4 billion yuan versus 27 billion a year ago. you have to expect, of course, oil prices were lower, the

average selling price about 49 u.s. dollars versus 02 a year ago. so we'll take a look at the market reaction in that tomorrow. all of the markets got a boost in shanghai. on that note, back to mike in the u.s. good morning. >> thanks, adam. demand for big ticket items such as aircraft and heavy applians is expected to rise by 3%. new home sales are expected to rise to an annual rate of 390,000 homes. dennis hockhart will be in chattanooga, tennessee, to talk about economic and financial conditions. finally, we'll get earnings from the lakes of retail irs dollar tree stores and williams-sonoma and tivo, the pioneers of dvrs.

>> coming up on "worldwide exchange," we're going to talk about the rights of universal care and ask if it is economically viable. >> is a global economy on the verge of recovery or are we in the eye of an inventory storm? we'll get the results on that next.

i'm maura fogarty. here in asia, china's oil giants cnooc posts a first half drop nernings as plunging oil prices squeeze margins. >> i'm ross westgate in europe. german ifo improves for a fifth month in a row. >> and i'm mike huckman in the united states. we're mourning a patriarch here in the united states, senator ted kennedy. you're watching cnbc's "worldwide exchange" this morning. europe, an hour and a half into the session can't quite make up its mind. the ftse 100 down 0.1%. the xetra dax down 0.2%. the euro may have got a lift from the ifo number, which came in better than expected. the business sentiment in

germany. but the stock market actually hit its session high and dipped down after that figure. so maybe they would price in even more. and it was boosted by the expectation more than the current condition. so there might be a feeling here that our expectations are now getting ahead of ourselves. when you've got higher expectations, you're more easily disapointsed. euro --/dollar, 1.4316. dollar/yen, 94.07. sterling/dollar, 1.6312 and the euro is higher against the pound, edging up towards 0.88, maura. >> it's been a rebound for some of these markets. japan, in fact, at ten-month highs. that is the highest level for the nikkei 225 in 2009. it's ending at 1.3% to the upside. we had export rters today, some of them rebounding back again. also some of the optimism about

the economy with the consumer confidence numbers and the home numbers that came out overnight. on top of that, china's rebound helped to lift sentiment across the rest of asia, as well. the shanghai composite bouncing back by 1. % closing close to the 3,000 mark. we've been getting earnings out all week long. one that came out that helped to boost sentiment was air china when those numbers came in better than expected. as for the u.s. markets today, mike has a quick look at how the futures are shaping up early morning side. mike. >> thanks, maura. at this point, they're shaping up pretty nicely. we could have a seventh straight up day for the dow with all major indices pointing to a higher open. in about four hours time, we are going to get numbers on durable

good orders. even with stocks moving higher yesterday, we did see investors buying treasuries, and so the prices went up and the yields, which move in the opposite direction, went down. today, that's reversing course with the yield creeping up just a tiny bit at 3.45% on the benchmark, a ten-year treasury note ahead of, yet, another government debt auction later this afternoon new york time. maura. >> more details here on the chinese markets, you know, that close above or nearly 2% higher today wasn't quite as easy as it looked. the market slumped more than 1% at the open. traders are saying there's a lot of nervousness with the markets and are warning of a turn around in chinese stocks right now. cheng lei files this report from shanghai. >> reporter: even for a market known for big swings, losing 20% in ten sessions seemed

excessive. that's what the shanghai composite did in august. >> it was partly a market correction because the market had surged on 1700 points. on the macro front, monetary policy was going towards macro tightening.x the market reaction was a normal adjustment. >> for individual investors, it seemed like the bubble bursting for 2008 all over again. the correction was too fast. the market fell too quickly. for us latecomers, it meant losing money. >> now the volatility is very high. we don't know exactly what's going on. we just play the market according to china's overall trends. one of the catalyst of the shanghai composites was the shrink 74% from june, sparking fears a liquidity driven rally was over. >> the july data market confidence creating an opportunity to switch positions.

market sentiment also wavered. >> add to that ipos flooding in after authorities lifted a ten-month ban. since the resumption in july, more than a dozen companies have listed, raising more than $10 billion. at least eight more are waiting to list. although the debut performances have become relatively muted. securities regulators have since approved more funds seen as pass et support of the market. there were hopes that the stock market would be propped up by policies ahead of national day on october 1st, the 60th anniversary of the founding of the people's republic of china. >> the market may go up for narp national day. this is the 60th anniversary. it's a source of national pride. >> this has happened a few times. the market will definitely be good before national day and then fall afterwards. >> analysts are bullish about the second half for other reasons.

>> now monetary policy has switched gears, but liquidity will still support in the second half while earnings are expected to benefit from the recovery. so in the second half, earnings growth will really pick up. that, combined with the appropriate liquidity, will mean a more stable, healthier market. >> for now, the market guy ragdzs appear to be over, but with no option for shorting overseas, august may not be the only volatile month. cheng lei, cnbc. >> and from china to germany, the ifo index beats expectations, up to 90.5, the highest level in a year since september 2008. but the ifo institute is saying that the economic recovery may not be sustainable and the firms still see their situation as considerably worse than a year ago. joining us for more, the global

head of microeconomics, paul lee. paul, it lends sustainability to the thought that we're in recovery mode. . but how good is the indicator pointing to the strength of that recovery? >> well, it's difficult to tell how far we're going to go. we have seen a good recovery in the last few months, ross, as you said. but we're back to the levels we were in the last recession. so we come back from terribly awful to nearly bad. nonetheless, the momentum is up. it's clear at the turn of the year, end of the laugh year, early this year, orders were canceled globally. now some of those are coming back. that may give us a bunching of orders. also, we got tired of the inventory cycles. the upward momentum we're seeing may be overcycled. we're seeing it globally. global manufacturing is tightly interrelated the.one man's increase in production, several firms increase in august.

so i think this momentum will continue upward for some time. i wouldn't get too carried away with it. >> paul, just a few moments ago we had a guest on who called this a junk rally. >> you mean in the stock market overall? >> correct. >> i think what we've seen so far since the beginning of the year is a vast reduction in the equities. earlier in the year, people were pricing them in and getting out. to me, that's a real rally based on the fact that the future looks more optimistic than the past. credit growth is running at 35% in the first half when the real economy needs maybe 50%. so stocks have gotten ahead of

the real economy. and they've rallied on good news. i think that good news will continue for some time, yes. our own suspicion is that we will see a correction as we head into q4 that could be 15% or 20%. stocks are getting ahead of themselves. >> is it going to be business that leads us out of this recession rather than the consumer or is the recession over already as we speak? >> i think the recession probably is over already as we speak, you know. if you look at initial claims in the u.s., there are very reliable indicators for the end of recession and improving for a number of months. and that tells us that the economy concerned quite some time ago. i expect durable goods to be up. if you look at germany and you

look at the u.s. in particular, new orders in the index, what you see is that those new orders lead investment and equipment and software. and that equipment and software investment was slashed massively at the end of last year because people expected the skies to fall in. it doesn't mean that business and investment spending is going to soar, but it's much better than what it was. at the moment, that is giving the economy some momentum. firms, as we saw, slashed stocks massively. and that was a big negative contribution to gdp. that is likely to turn negative in q3 and q4. of course, we're seeing global trade, which was mass hely interrupted by discontinuities in trade finance build up at quite a rapid pace. in the u.s., we shouldn't expect the consumer with massive debt, the credit crunch and house

prices down to start contributing significantly until we see employment falling for some time. and we're somewhere away from them. >> yeah, and paul, it's maura here in asia. are you getting that from some of the data that we're seeing in asia, for example? japan showing a sharper acceleration in the drop in ex ports to the united states, for example? how do you reconcile that, then, with these consumer confidence numbers and housing numbers in the u.s. that seem to show an improvement in sentiment? >> yeah. well, i think definitely housing has turned and generally when it turns, it turns significantly and keeps going. it won't stay still. consumer confidence is seen from the different surveys rather difference messages. the basic story is we're going sideways. an export from japan could be volatile because of big movements in the auto sector.

as we go forward, we will see volatile data, but the overall picture particularly in asia is an improving trend. >> fall, thanks for that, good to see you, as always. the french waste utility posted a smaller than expected in first half targets. the group has been forced to trim its targets. the cfo joins us now from paris. thank you so much for joining us. >> good morning. >> how much pressure is this global recession putting on waste treatment and water -- and pricing? >> as you know, it's affecting two businesses. the first is water and water is not that much affected by the

current economic environment. we have experienced two difference periods. the first two months were particularly difficult where we had 457 industrial and commercial customers reduced production and some of them have shut down factories. from march to june appears to be better. the trend seems to be rather flat during the summer, which is, smak, rather good news because we could have been facing a slowdown during the summer period. overall what we can say is that the volume of wastes is down by 6% year on year which is rather encouraging compared to what we could have felt a few months ago. >> what's happening with prices from recycled materials? has that stabilized? >> yes. we are trading and recycling too much. the first one is the paper and

the second one is mittal. >> what we can see is that demand remains very low. as far as the pricing is concerned, yes, the pricing is slightly up as far as paper is concerned and prices were even negative in december and now are up to 25 europe a ton for paper, for instance. so stability for metal and a rather encouraging sign for paper, which is up since the beginning of the semester. >> and what are you expecting from the economy, the economic environment? what are you planning your business model to in terms of sort of the basic background? >> we are planning a regular improvement in the second half of the year. having said that, visibility

remains low. and comparison for the environment, q3 in 2008 might remain rather difficult, but we anticipate an increase in our activity in q4 and we expect, also, an increase, progressive increase in the price for commodities. >> when one thinks of water, one thinks of waste, what one views these as industries that are going to become even more important in the future. what sort of plans cuff to tap the need, particularly for recycling and a greater waste management even as we move into emerging markets? >> well, what is sure is what we call the cycle lar economy. and i think the government in

europe and the u.s. and china and the general political environment will help us in that respect. we are going to reuse the recycled water. as far as waste is concerned, it's very clear that the production of the waste that is recycled, that is composted, that produce energy, will increase over time and that will be a significant boost for our activity in europe because the environment is very clear in europe and also elsewhere in the world. we have based our assumption on the development in the u.s., in asia specifically, so three clear areas in the world where we see that the future will be very environment as far as the

environment is concerned and the fact that we have one very significant contract n with the state of victoria gives us the proof that systemic development will be key for the future. >> jean-marc boursier, thank you. thank you. >> in line with the rest of asia today, india is trading higher. we're joined now by ayesha faridi. thanks for that, maura. tale, it's been quite a choppy day. while it has struggled or tried not to hit the 4700 mark for the nifty, it isn't really being able to do that. it has made many attempts now for the trading session. all indices are in the green, but a big winner, indeed, or trade is indeed in force and the entire i.t. pack. clst is a brokerage which has been bearish on the entire i.t.

space in india and is upgraded and it has upped the price target, as well. and they do also believe that they may beat fy '10 guidance and that is bringing volatility to the space, including in the midcap space. another stock in focus is united which is down by almost 2% in trade today. here is the news why. they have now called off stocks for diaggio sizing high evaluations and anti-trust issues as to why it was called off. it's a sentiment and a dampener with knee jerk reactions coming into it there. meantime, of course, we have a couple of other counters mostly from the midcap space holding up in trade. with that, it's back to you. >> and thank you, ayesha in

mumbai. and still to come on "worldwide exchange" -- >> just say no! >> listen, i'm a registered democrat. >> you can't trust them. and never have. never have. >> we're on board! >> the health care debate in the united states has been fierce. could it get even hotter in the wake of the death of senator ted kennedy? stay tuned for a global perspective with the chairs of the uk democrats and republicans abroad, they're going to go head to head. also get the latest on the currency markets.

okay. on the currency markets, dollar/yen steady, 94.00 is where we stand. not a lot of the reaction in the yen. euro is mostly up against the dollar, but it has come back from its highs that were released after the ifo survey. sterling is a little weaker, 1.6310. adam is with us. adam, a bit of a spikup after a better than expected ifo. it didn't last an awful lot of

time. we seem to be very much until the ranges here. >> absolutely. we've seen a bit of a reversal. and that's causing pressure the other way. any real benefit from those good figures is not really being seen. >> what we are seeing is the euro day by day inching up on the pound. what is your target? >> i'm hoping it's reached the bottom end by now. the euro zone is obviously coming out with recession from figures from germany. but i think really, that's oversold at this stage and we're looking for a comeback certainly next week. adam, what about some of the riskier currencies? to what extent are you watching risk assets in asia, especially the assets to give us an example? >> the balance for risk is the key to this at the moment and the ones that we're watching

more than anything are the ones commodity driven. and the new zealand dollar, as well. that's the one to be looking for and i think they have a good few percentage points to run over the course of this week, as well. >> how much of that is predicated on the belief that we could see central banks in those particular economies, australia and new zealand being the first to act and pull back liquidity? >> yeah. australia says they have never felt the recession in the same way others have. i think they may be one of the first to exit it and they may be starting to look at their interest rate policy moving back up showing signs of relief, i think. >> adam, how much of the trading activity has to do with summer trading follow being relatively light? and are we essentially locked in this trading range until after the labor day weekend holiday here in the states, kind of the

official end of summer holiday weekend? >> in many ways, that could cause a bit more volatility if the investors don't like being slapped on the hands too long especially if they're scared of risk. i think, really, it may stay stable earlier this week, especially around cable. but of course, with gdp figures coming out, that may well start to move the market, as well, with unemployment back up again as the dollar slackens off. >> adam bobroff, thanks for joining us today. coming up in the next hour of "worldwide exchange," we are going to bring you all headlines that are making the top stories across the globe. >> and nicholas sarkozy is throwing down the doormat at the g-20 on banking bonuses.

can he lead the way?

i'm christine tan in asia. a plunge in crude prices squeezes margins. >> and i'm ross westgate here in

europe. business confidence gets an improvement for the fifth month in a row. >> and i'm mike huckman in the united states, which is maurning one of the great american patriarchs and the champion over health care debate, ted kennedy. if you are just joining us in the united states, welcome to the start of your global day with "worldwide exchange." which is broadcast live from the u.s., asia why and europe. and in the united states right now, we have the futures pointing toward a higher open, so it looks like the dow could roll, if you will, a lucky seven because it's been up for six straight trading sessions. the nasdaq and the s&p have been higher for five of the last six trading sessions. of course, the death of senator

ted kennedy will be in the media today. and then new home sales will be out at 10:00 new york time later this morning. in the meantime, let's take a look at the treasury markets because it was kind of interesting, even with the stock markets moving higher yesterday, we also saw investors rolling into treasuries. and the price of the t-bills went up and the yields which move in the opposite direction went down. that move is continuing with the bund, but not with the benchmark. it's creeping up at 3.44%. >> mike, thanks for that. i have to tell you, we're getting statements quoted by reuters from the uk government ahead of the g-20 meeting in pittsburgh suggesting the g-20 should ensure countries have exit strategies in place, that it's clear that stimulus, though, will need to stay in situ for as long as needed and

that the g-20 meeting has been made but more will need to be done and itwi of high risk b banks. so that is what reuters is suggesting ahead of the next again-20 meeting. meanwhile, the ftse cnbc global 300 has been volatile today. european stocks two hours into the trading day have been slightly mixed. we're flat, really, for the cac and the smi and down marginally for the uk and german markets. we did hit our session highs just before the ifory leased a better than expected sentiment survey, but that seems to be the trigger to sell. technology, food and beverages are all down. dollar/yen, steady at 94.03. maura. >> the asian markets today rebounded, ross.

we had tokyo, for example, closing here at ten-month highs. that would be the highest level in 2009 for the nikkei 225. up by 1.4%. shanghai stocks had a shaky start to the trading day, but the optimism carries through throughout the session and saw stocks rebounding by 1.8%. hong kong is essentially flat for the day. ross, back to you. >> let's get thoughts on was going on at the moment. joining us is loto. good to see you. we saw the ifo institute business sentiment up for the year high and up for the fifth month in a row. we saw the euro, which gained, but it seems to be a signal is for the stock markets to sell off slightly in germany. are we worried that we're getting ahead of otherwise and

that our expectations are perhaps getting too high? >> i don't think our expectations seem to be too high. but let's face it, we've come to a market that seems to be different. all the sentiment at the moment means sometimes we get nervous, that perhaps we did get ahead of ourselves and then retrench. and i think that is what we're seeing at the moment. >> not much of a retrenchment. we were up 20 points and we're now down 19. 4/so it's fairly meaningless, i guess, in this context. what does it mean to you to say we've come a long way since the summer? >> i've just come from my investment management meeting this morning and we've decided

that we'll drop our cautious in our cautiously optimistic. we are getting a bit more optimistic now because things are starting to brighten up. not so much necessarily in the investors. and the more that investors and the actors in the industry see this ending, wanting it to end, it has the probability to do so. >> so lotar, do you think when your colleagues get back from their summer holiday and vacations, they're they're going to take a look at things, determine this is a v-shaped recovery instead of a w-shaped recovery, have another double dip recession, if you will, and decide to put more money to work? >> firstly, there is a lot of money, as we know, significant on the sidelines at the moment.

the level of cash, for example, in the u.s. is much higher than it has been in previous recessions or when we were at this stage. and yes, as they are coming back from their summer holidays, they will need to make 245 decision. is it more of with a-shape or v-shape type? as you expect more of this square root shape recovery, stock prices are probably too low at the moment. they are still below in a lot of markets, below the lehman post premium levels and, therefore, there is quite a bit of room still for equities to rally from here. >> lotar, you're saying you're nearing the end of your neutral stint. but we have data to go through and signs to go through as to whether we get more agres degreesive or not, even though you expect equity markets to

rally. could it be argued that you've missed a large part of the rally that's happened since earlier this year? >> we are in a quite good position in that we have been overweight against our peers but underweight against our own internal strategic benchmark, which makes us even more overweight compared to our peers. so yeah, no, we've been riding this rally since march quite well already. >> lotar, thanks again. you're with us for most of the rest of the hour. we look forward to getting more comments from you coming up. in the meantime, right after this break, we will get the global perspective on the u.s. health care debate. stay with us to hear from the chairs of the uk democrats and republicans abroad. here is a taste of how the

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welcome back to "worldwide exchange." senator ted kennedy widely recognized as the liberal lion of the united states senate has died after battling a brain tumor. he was 77 years old. in a statement, president obama says our country has lost a great leader. elected to the senate in 1962 when his brother, john, was president, kennedy served longer than all but two senators in u.s. history. for nearly half a century, ted kennedy was a dominant voice on nearly every social issue, including civil rights, war and peace and especially health care reform. from his sick bed this summer, kennedy was still working the phones trying to make a final push for what he called the cause of my life in a reducing speech at the democratic national convention just last year. joining us now for a debate on public or national versus

private health care systems is bill barnart and tom grant, chairman of the republicans abroad uk, a couple of ex pats. first of all, the democrats abroad, do you speak officially for the democratic party. the republicans, however, are an autonomous organization with no connection to the republican party. gentlemen, i'd like to start by asking you if you think this will, indeed, be senator kennedy's legacy. accuse death, in a way, galvanize the senate to finally make a move here on getting health care reform accomplished or is that simply too altruistic a concept to imagine? >> i think it does feed into a debate and a sentiment on the issue. on the other hand, the real problem has been his lack of presence in the last few months. kennedy has had a record over the years and years and decades

that he's been in the senate of reaching across the aisle to conservative republicans and making common cause and that kind of negotiation, that kind of relationship with people on the other side of the aisle is not there this time and will be sadly missed. >> senator kennedy will be sadly missed. as a native of massachusetts, i myself had the honor of meeting the senator a couple of times. i can't claim to have known him, but everybody in a sense knew him. it's a sad day to see him passing. but at the same time, we're talking about now a piece of the american economy which constitutes 17% of our gdp. it's not about building a memorial to one man. it's about a series of changes and reforms that are going to affect hundreds of millions of people, not just today, but for decades and decades ahead. while it's important to keep ourselves focused on the substance of this debate, it's important to realize this isn't

something you can rush through the legislative process. it's going to be a long debate and we have to do this deliberately, intelligently, and with an eye on the prize. and the prize is a long-term impact on the american economy and on health care. >> yeah, but so far, it doesn't seem to be getting done that way. it seems to be filled with grand standing and rhetoric. in the end, do you think there will be a meeting in the middle? if so, how long do you think it's going to take to go there? >> there is cross eyed cooperation with people in both parties. senator mccain last week had discussions about how to move ahead in a way that is acceptable to the broadest spectrum to the american public and the public at large.

one of the things that we've been concerned about is essentially the so-called public option was all about building a new federal health bureaucracy. we're very, very concerned. when you look at the budget deficits that we're running up, when you look at the costs, the office of management and budget at the white house has just released its mid session report. it's late, but finally came out recently. the mid session report shows that the budget deficits that the u.s. will be running on are going to accumulate to over $9 trillion. that is, in fact, $2 trillion more than president obama's figures two months ago. that should concern people not just in the u.s., but everywhere. so the health care debate is -- >> but i do want to get bill in here. bill, i'm wondering if you think there is room for compromise. if there is, how long is it going to take to get there? >> it will take some time and neither kennedy's absence will

contribute to the time it takes in part because he was among the 60 that would guarantee the democrats' ability to cut off a filibuster. there is a question of how quickly he will be released from massachusetts. as far as a compromise, i think there is a possibility there, but the republicans are between a rock and a hard place in the senate in that there will be a bipartisan compromise in which the public option is not a major element, nor has it been the central element that democrats have pushed. it is one among many. but it may very well be that the legislation will be divided, that those issues that do not affect the finances and the budget will be decided by a normal vote, which requires 60

to close down debate if anyone wishes to filibuster. and in other aspects of the bill will be handled under reconciliation, which requires only 50 votes to pass. so i think there will, in the end, be a compromised bill that does pass, either with modest republican support or with total opposition. >> and most people in europe our age have grown up with a basic health care service. what do you think is the best aspects perhaps americans should consider and create their own system? >> i think it's undeniable that having a broad health care system will basic cover for everybody is immensely important for an economy, for the u.s. overall. but at the same time, the european modelled systems also teach you that firstly, if you make it all state controlled, it becomes a humongously big

apparatus and those things are never very efficient so you pray want to have more of a mandatory insurance solution and also because you have to recognize that demand for health care is pretty much unlimited. if you are the individual suffering, you need to somehow limit it otherwise it's going to eat too much into your overall economy. so those two aspects will be something that we, as investors, are going to look for in the u.s. solution to this problem. >> will the republicans support that model? >> i think there's an overall impact on the economy. if you have a large number of people who are deeply concerned about their health care, labor mobility decreases. one thing we've talked about is the need to have portability of insurance. so if i move from one u.s. state to another u.s. state, i might face a big question mark, do i

keep my health insurance? that impacts labor markets. we need a system where people are free to move and restaff and so on. so there is an economic impact that improves labor markets. >> i wish more republicans took the approach that tom took. there are basically three models. one is the british model is the government is the pder of services. the other is a german model and the other is the swiss model, which is regulation and required insurance, which is the way obama is going. obama is providing an american plan. it's a mixture that i would would achieve the goals that lother mentioned. but at the same time, while

controlling some degree of costs. >> gentlemen, thank you all very much for being here this morning. we do have to leave it there. i think it's going to be interesting to watch and see how senator kennedy's death possibly at least changes the tone of this debate going forward. bill barnard, uk chair of democrats abroad and tom grant, chairman of the republicans abroad uk and lotar mentell, chief investment officers of octopus investments. thank you all. still to come on "worldwide exchange" today, banks and bonuses. the french president says he can set an example for the world. what do you think? chloe is 9 months old.

she is the greatest thing ever. woman: one little smile, one little laugh.

- honey bunny. - ( coos ) we would do anything for her. my name is kim bryant and my husband and i made a will on legalzoom. man: it was really easy to do. - ( blows raspberries ) - ( laughing ) robert shapiro: we created legalzoom to help you take care of the ones you love. go to legalzoom.com today and complete your will in minutes. at legalzoom.com we put the law on your side. ahead of the u.s. open, we'll bring you up to speed on what's happening in the equity markets right now. >> we opened lower on the london markets and we moved into positive territory. now we seem to be back on the decline again. down by about 10 points or so.

0.2%. yesterday we had another closing high for 2009, so we are coming off a decent level. on the upside, we are tracking serco, for example, today, because there's a real decent amount of strength coming through in that stock. we spoke to the ceo of the business earlier here on "squawk box" here on cnbc in europe. they reported figures -- it's a support services company. they supported services for the first half that beat expectations. and see plenty of new business opportunities, particularly as government tries to become increasingly efficient and outsource more of their businesses. wpp, though, is one of the biggest decliners. sales missed expectations and that's one of the reasons we saw declines coming through there. sylvia, why is it looking in germany? >> well, the market has a couple of quirks. it shows relative resilience, even though we're in consolidation mode. we might have a reason for that

in the ifo index. the ifo index again came in better than expected. the market had expected an improvement on the previous month for five months in a row. we've seen that now, but the reading was the 90.5 or slightly better than the market had foreseen. the forecast 88.5 to 8 whatever, expectations still running away with the ball clearly even present conditions are picking up. so the macro story might be underpinning what's happening in the markets here. we're thin on the corporate front because earnings have more or less fizzled out. but there is a stock picker club going on here. financials aren't doing so badly, but it's more picking our way through here. and, of course, behind the scene of the opel story rumbles on with high level meetings in berlin sprinkled out throughout the week. stephane, and you? >> we have significant movers, including one in the banking sector.

natixis is up 32%, despite a loss of 883 million euro for the second quarter. the bank is expecting to return to profit in the second half of the year. it's also targeting retail and equity of 12% for 2012. but most important, its main shareholder, the new bank bbce is going to provide a formal guarantee for the toxic assets, a guarantee of approximately $35 billion euro. that's the reason why we've got a positive reaction on this stock today. also on good shape is an environment of 8%. the company beat expectations in the first half for net profit of 75 euro and we've got a very good session for alcatel lucent after natixis raised its recommendation to buy from reduce. now let's go to tokyo. with kondo-san.

>> thanks. the nikkei closed at its highest level in nearly 11 months. one notable winner of the day was nac electronics. its shares went up by 100 yen or over 11%. the nikkei reported that mitsubishi electric and hitachi have entered the final stage of negotiations over plans to provide financial aid of about 200 billion yen for the merger between renaissance technology and nec electronics. they are the nation's second and third largest chipmakers and the merger is slated for next april. shares in mitsubishi heavy industries gained about 5% of massive turnover after saying that it would mass produce batteries by 2011. and the nikkei has learned that toyota motor would slash its global production capacity by 10% as early as this fiscal year. the giant will implement its

first major capacity reduction by shutting down new united motor manufacturing, a joint venture between general motors and also by stopping some production lines at main plants in japan and the uk. by slashing capacity to 9 million, toyota hopes to raise the utilization rate at its plants about the break even point of 70% to return to operating profits in fiscal 2010. that was from tokyo and moving on to singapore. >> thank you very much for that, asuko. we're taking a look at the greater china region, the shanghai composite closing higher. in fact, the market opened down 1.5% at the opening. there was a lot of concern about potential credit tightening up as the central bank released a 2008 report yesterday. that seemed to take a back seat. investors sticking to the wrath of the biggest companies in china listed in hong kong and

the shanghai exchange. one of them coming out was sino, its profits more than half pp versus about 27 billion a year ago. but you have to note that oil prices, of course, were substantially lower. the average selling price about 49 u.s. dollars versus 102 a year ago. the stock price was down and oil prices were down on trade the previous day. we'll take a look at market reaction. overall, we have positive results out of most of the blue chip companies out of china to help fuel the gains. back to you in the u.s. mike. >> thanks, adam. investors get their hands on another pair of economic reports. demand for big ticket items such as heavy appliances and aircraft is expected to rise by 3%. at 10:00, july new homes sales will be released the an annual rate of 390,000 homes. right around mid day, atlanta fed president dennis lockhart will be in chattanooga,

tennessee to balk the economic outlook and football conditions. and later today, we'll get earnings reports from dollar tree, tivo. that is your global stock watch. >> coming up on "worldwide exchange," the summer rally refuses to die. what will the new homes data and durable goods do for trade today? and senator ted kennedy lost the battle due to a brain tumor. we'll look back at his life and achievements. 90s slacker hip-h. ♪ singer: buckle up, everybody 'cause we're taking a ride ♪ ♪ that can strain your relationships and hurt your pride ♪ ♪ it's the credit roller coaster ♪ ♪ and as you can see it kinda bites! ♪ ♪ so sing the lyrics with me: ♪ when your debt goes up your score goes down ♪ ♪ when you pay a little off it goes the other way 'round ♪ ♪ it's just the same for everybody, every boy and girl ♪ ♪ the credit roller coaster makes you wanna hurl ♪ ♪ so throw your hands in the air, and wave 'em around ♪ ♪ like a wanna-be frat boy trying to get down ♪

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it is 31 minutes past the hour right now. here are the top business stories from around the world. the united states is mourning the passing of the pat ree arc of one of the great political families and the champion of the debate over health care reform senator ted kennedy. >> here in europe, german business confidence has improved for the fifth no month in a row. the recovery might not be sustainable. >> and here in asia, chinese oil giants cnooc is posting a drop

in first half earnings as a drop in crude prices squeezes margins. >> welcome to "worldwide exchange." as the ftse has begun to trade lower again, we are seeing a little bit of weakness creep into at least the s&p 500 at the moment. but the dow appears to be on track to post a seventh straight up day. and even with the move in stocks up, that is, we are seeing the price of the ten-year t-note go up yesterday and the yield dropping and here today, ahead of yet another government debt auction, this time it's going to be five year notes at about $40 billion worth, i think, at 1:00 new york time. we are seeing the yield on the ten-year yield mark krooep creep up at 3.45%.

ross. >> thanks for that, mike. european stock markets ahead of the open, we've been a bit down here. ftse 100 down 0.2%. the xetra dax down 0.4%. euro nudged up against the dollar at the moment, 1.431. off session highs elsewhere. dollar/yen, 93.98. i think follows are pretty light, actually, today as far as the currency markets are concerned, maura. >> in the equity markets, we did see a rebound for this region. shanghai had a bit of a choppy start to the trading day, but management to gained about 0.8% by the end of the session. in japan today, we saw japanese stocks closing at a ten-month high. that would be a high for 2009, as w well, all of the back of

consumer data we got for last month. the nikkei 225 close at 10,639, again, the highest level for 2009. we're seeing nymex trade around that $72 level. brent also around the same levels, as well, $72.20 a barm for brent crude. mike. >> thank you, maura. senator ted kennedy has died after a battle with a brain cancer. senator ted kennedy was the leading voice on many issues, including health care reform. cnbc's bertha coombs looks back at ted kennedy's life and

legacy. >> ted kennedy called universal health care the cause of his life, the cause he championed. for over four decades in the senate, the reason he defied his doctors after brain surgery, to address last summer's democratic convention. >> and guarantee that every american will have decent quality health care as a fundamental right and not a privilege. >> his rhetoric was impassioned, but those who worked with the liberal lion of the senate say he was at heart a paragraph ma activity. >> a lot of people got hung up on the liberal philosophy and i don't think they understood how practical he was. >> gordon binder worked with kennedy on fda issues in the 90s, a time when kennedy cosponsored major health bills with republicans, establishing the children's health insurance program in the wake of the failed clinton health plan. >> without his involvement, i'm

not sure that we would have had a drug benefit at this point. >> the former chef of merck says kennedy would provide key support by being open to the industry's free market approach even though he would question parts of the 2003 bill. >> he raised the fact that we did have the larger public interest at the center of what we were doing, that that was very common ground with him. >> kennedy called working across the aisle the hallmark of his career. gordon binder calls it his gift. >> he always told the truth. he always kept his word and that's not that common in washington, unfortunately, for people trying to get legislation passed. >> bertha coombs, cnbc, business news. >> and president obama is calling senator ted kennedy the

greatest senator of our time. joining us now, lotar mentell is still with us and bernie now joins us. bernie, you are in the nation's capital. so before we move on to investment subjects, i'm just wondering, obviously, there is going to be a paul cast over washington today. your thoughts on the passing of senator kennedy? >> well, i think for the next couple of days, there will be a paul cast in washington, d.c. kennedy had a big impact here and his family, of course, has had a big impact on this country for the last, you know, 70 years. and i think he'll be missed in the senate. >> and meaning no disrespect moving on to the topics that our viewers are most concerned about, that being investments, earlier on in the hour, lotar said stock prices are too low, that they're sitting at

pre-lehman levels and he is prepared to drop the word "cautiously" from his outlook, saying he is now optimistic rather than cautiously optimistic about things. what's your take? >> well, my take is that we've had a tremendous rally in the last six months and the mood has gone from, you know, the end of the world type of attitude to, hey, you know, maybe things aren't so bad and maybe things are getting better. i fully expect that a year from now, stocks will be higher. in the meantime, i wouldn't be surprised to see a little bit of pullback. but i do think that, you know, we're getting set up for a pretty constructive -- or a continued constructive stock market. >> and will that pullback be because september and october are historically weak or do you

think we've moved too far too fast? >> i don't know about the september to october stuff. but i think in the last couple of months, we've gone from discounting everything that could possibly go wrong to getting to a point now where we're discounting everything that could possibly go right. and my sense is that we're ahead of ourselves and my sense is that there are actually some surprises here or a focus here in washington. i think that, you know, some bad news is going to continue to come out of these state budgets and i think investors haven't really looked at that. and i think that has the possibility to cause some concern and perhaps a pullback. i don't think people are wildly bullish as they were in past years. i think they're cautiously bullish, if that's possible. and i think that a lot of people will be long-term investors as long as it's positive, but they'll pull the trigger pretty quickly if things get a little rough.

>> lotar, despite your now optimistic nature, do you think we are set up here potentially, you know, just technically set up for, you know -- >> yeah, absolutely. i mean, i absolutely wholeheartedly agree. there will be setbacks on this course. we are all still shellshocked from what has happened over the last 18 months, so we are more perceptive to any adverse news and reacting to that, all investors are. but i think generally you will see a lot of investors returning to the market, risk appetite returning and it's not necessarily a full function of the economy recovering, but more investors returning and thinking, well, being in cash is more risky at the moment and my longer term perspective than being invested in the stock markets. >> bernie, it's maura here in asia. if i could get some specifics from you in terms of investing strategy, how are you

positioning your assets right now? >> well, we continue to like the financials. goldman sachs, bank of america, and we have a pretty large position in the retail sector, home depot, and target. you know, i expect that the financials will continue to get better as the financial system continues to get better. you know, they've go the come a long way, but you know, they have moved from a -- from a evaluation that indicates crisis to a more normal valuation and it seems to me as the system, you know, becomes healed, that they should trade back to old valuation measures and that would suggest that the financials still have plenty of room to go. >> bernie mcginn, chief investment officer of mcginn, mckeen and o'neal, thanks again. and lotar, thank you, as well,

for being our guest host this hour. still to come on "worldwide exchange," how banks are changing their contracts to the powers of the u.s. pay czar.

all right. so now here is a look at the futures here in the united states. as you can see, the s&p 500 looks like it's going to have a flat, maybe slightly lower open, but the dow and the nasdaq, the nasdaq just barely above water. the dow looks like it could have its seventh straight up day today. meantime, the fdic's board will meeting today at 3:30 new york time to vote on whether to ease restrictions for private equity firms looking to invest in failed banks. most banks have ratios lower than that. citigroup's is reportedly 9%. the fdic could reduce that to 10% or lower in an effort to bid more banks seized and closed. citigroup, bank of america and

aig have reportedly begun adding pay czar clauses into employee contracts. reports say this will allow the companies to void compensation agreements if they're challenged by the u.s. government. aig's offer reportedly includes a disclaimer that his compensation is subject to the review and approval of the president's pay czar, dan fineberg and other regulations. feinberg is currently reviewing contracts from seven companies that have yet to repay their federal loan peps a judge wants to know why it agreed to a settlement with the s.e.c. if it believes there was nothing false or misleading in its proxy statement. he's told the s.e.c. and bank of america to submit new papers by

september the 9th. in frankfurt this morning, b of a shares are up 1.25%. >> mean wooim while, german business sentiment rose for a fifth month running in august. the august ifo index got to 90.5%, the highest level for a year. but the institute warns that the numbers may not be sustainable and may be considerably worse than a year ago. maura. japan is stopping output of one of its factories next year. toyota is discussing the possibility of shutting down its joint venture with general motors. earlier, the nikkei business daily reported that toyota is plannin to cut production by 10% and possibly stop production lines at home as well as in the uk. >> just under 12 minutes away from "squawk box."

carl is with us to tell us what's coming up today. morning, carl. >> morning, ross. we'll have more on the passing of political icon senator ted kennedy. he was part of a dynasty, an early supporter for obama. we're going to talk about his legacy. his death comes less than a day after the president nominated ben bernanke as fed chief in martha's vineyard. our kefts include randy kroszner. plus an original "squawk box" rebel and icon, mow hamel el-erian, we'll get his take on the economy, the account, the fed and a lot more. we'll see what mohammed's latest take is on this ben bump and more when we begin in about ten

minutes. >> looking forward to it. thank you, carl. >> and up next, we'll look at the trading day ahead on wall discreet and see if that ben bump is going to continue.

welcome back to "worldwide exchange." let's get a look at the trading day ahead with bob eye cleano. he's the chief market strategist at lotus brokerage.com. bob, good morning. thanks for being here. >> morning. today we're going to get durable goods data, we're going to get new home sales. tomorrow, though, we get some job numbers, the weekly job numbers as well as revised second quarter gdp. are those this things that you'll be focusing on are the data more than anything else? definitely. i mean, you've seen the government stimulus plans be a done deal and feed their way into the economy and subsequently into the bid and the markets as you saw through the last earnings season. that's sort of winding down now, as we speak. and the data has been

stabilizing for the market. the only data that we haven't seen a ton of support out of is the jobs data, which is somewhat troubling. but we expect as things go forward and you see this cable stabilize from housing to consumer confidence and we expect housing data and durable goods to surprise slightly to the upside, as well, it's going to be databased now. >> speaking of data, then, bob, it's maura here in asia. what about the revised q2 gdp numbers come out tomorrow, do you expect any major revisions or changes there? >> you don't generally see major revisions in the second round of the data. i think the surprise usually comes in the first and the third, generally. so we don't expect a ton of movement out of that. but i did see some positive signs out of the german ifo numbers, as well. the zew numbers will help move markets today and you've got technical signals.

you've got a weekly close above retracement, looking for a target at the end of the week of somewhere around 1053. and if we can get up there, it also is a precursors to a start for a positive week next week. once again, these summer markets tend to trade more technically, but the data has been stabilizing, which is what the market has been looking for. >> and bob, on the treasury markets, the two-year auction yesterday seems to be fairly fair. we've got a five-year auction today of $39 billion worth. how do you think that will go? >> i think it should go fairly well. the last couple have been a surprise. and you haven't -- there's one more thing that we're looking ford and it relates to your point there, about a week and a half back, we saw a bit of a decoupling from the dollar and the yen as a flight to safety trade and especially with the dollar being more of a -- it caught a bit of a bid and we haven't quite seen that. we've seen a bit of the bid in the euro and the selling of the dollar. that seems to be the last

relationships. if you tack jobs on to that, you could see a reallily into the second year. we're believers of the double dip, but the dollar has to come back to its summer typical. do you think when all the money managers come back after the labor day weekend, that they're going to throw their cash back into stocks? >> well, they have to put it to work, and it's a little longer term than we can talk about in sth conversation. there's fewer and fewer contributions to i.r.a.s as jobless rates near 10%. we are at historical lows in terms of the amount of work being put to work in equity and it will all depend on how august ends. if we can get that weekly close above 1053 in the s&p and that

is a precursors to maybe a nice strong, december start, you'll have to see that happen to some degree. >> great, bob iaccino, from lotusbrokerage.com, thank you for joining us early this morning. taking another look at the futures here in the united states, now 3 1/2 hours ahead of the opening bell, they are a bit of a mixed picture. maybe we're not going to have them again. we are going to have continued coverage of senator kennedy's passing coming up next on "squawk box." that's it for today's show. i'm mike huckman in the u.s. >> and i'm ross westgate in europe. >> i'm maura fogarty in asia. my mother made the best toffee in the world. it's delicious.

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