i'm maura fogarty. in asia, markets are on the tear. stocks at their highest in 13 months, a host of global recovery is strengthening. >> i'm ross westgate here in europe. shares saw today in irish banks after a bad bank planned was unveiled to revive the country's ailing financial system. and i'm julia boorstin in the united states. investors will be watching the housing starts and weekly jobless claims.

will bernanke be right that the recession is likely over snch. hello and welcome to cnbc's "worldwide exchange." stocks continue to rise and the dollar continues to weaken. that seems to be the story as we look toward the u.s. open a little bit later. the ftse cnbc global 300 is currently up 23 points. not quite percentage gains on the bourses, ftse 00, nearly up 1%. xetra dax up 0.7% as well as the cac 40. smi up 0.5%, as well. the ftse 100 is aiming to post its best quarterly performance since the index was set up back in 1984. on the currency markets, the dollar is down at a one-year low. the euro hit a fresh one-year

high above 1.4738. at the moment, 1.4743. dollar/yen is back down in the 90s. don't go below 90 at the moment. sterling/cable, 0.8899, continuing to focus on that weakening dollar, maura. >> in asia, we saw all of these markets rallying. ample liquidity with some of these pushing stocks to a higher close today. let's see how the nikkei closed. nikkei 25 cloed 1.6% higher. banking stocks were a bit of a downer. in the meantime, exporters rallied today. steelermakers rallied, trading houses rallied because they're the ones making a lot of money off the rise we're seeing in commodity prices. meantime, the shanghai composite

closed up 2%. the hang seng pulling up by 1.7% and that rally that we saw in commodities, helping to push the asx higher with resources leading the way. the kospi, by the way, 15-month highs again. oil, nymex light sweet crude trading at $72.53. so we're about $2 above where we were during yesterday's trading session. brent crude is at $71.60 right now. over to julia for an indication of how the futures are shaping up in the u.s. right now. good morning. >> thanks, maura. we're going to look at how the market is shaping up. it looks like it's heading higher ahead of the open. nasdaq and s&p futures pointing up. this, of course, after yesterday's gains. on wednesday, the dow, s&p and nasdaq continued to hit their highest levels of the year. continuing that rally and we'll see if that continues today on

the jobless claims numbers and the housing starts. let's take a look at some bond yields. 3.47%. down 0.006. joining us now for market strategy is enzo von file. >> thank you, maura. >> if you look at how asia is performing on this optimism about the market, at least in this region with the global economic recovery, would you say the money is in the right place, in the right type of assets? >> i suppose it isyou believe markets are run by

nothing else. what i mean by that is that nobody believes in a economy that's actually recovering. people believe in pair chutes, not in green shoots. i do believe money has to go with the flow. i can't make a lot of sense of this because i can't see the economic recovery being as strong as people think. >> right. enzo, today the boj upgraded its assessment of the economy in japan, still dire, but better than it was before. and we had before p mr. bernanke suggesting that, at least for now, the worst is over. the question is, what will the recovery look like? you could argue that the markets maybe have it right. >> they may, but if you talk with the millions of unemployed

people, they may disagree with that. the excess supply of goods would suggest that the unemployment rates will remain structurally high for a very long time. and how you can build a recovery off rising unemployment just confounds me. i just don't see how this happens. >> enzio, a few months ago, you pointed towards an october crash. do you still think we're headed towards a crash in october? >> yes, i do. and i think that where it's going to come from is curiously, perhaps, curiosity, it will probably come from china. once they have got through their 1st of october rallies and through their parades for the national day, then i think you may find a bit of a hangover setting in. so this is something and next to the other, perhaps, less learned reasons, if i may say, which is

that october traditionally tends to be a bad month. i can't tell you why. but i think there's a likelihood that we could see something nasty coming out of october. when i say crash, it just means it's a big thump down. >> enzio, we said september was a bad month, didn't we? we're shaping up, the ftse is shaping up to have its best quarter since it was created. >> yes, of course it is. where i'm going with you on this is i just don't understand how recovery can be built off the back of unemployment so all you can be left with is the excess supply of money chasing profits. but if it's true stock markets value profits and profits aren't going to rise as strongly as

hoped for at present, then there may be a bit of an after shock coming in. >> i don't disagree that we can't keep going up forever. and it's a marginal gain. all we need is profits to be a little better than what we've priced in, i suppose, and therefore, it justifies the rally. therefore, it's not in absolute terms, is it? >> no. but perhaps what has changed these days certainly is the internet which has made trading faster so that the news travels faster than it used to so every twitch on profits is going to lead to some overshoot on the stock market. but i would also suggest that once people decide or perhaps once the major banks decide that they can make more money off shorting stocks, then you will

find the usual suspects coming out saying, well, actually, the valuations are very stretched. we don't believe in them any more on the profits front. >> enzio, we have to leave it there, but thank you very much for joining us today. >> thank you. the boj today upgrading its assessment of financial conditions and the economy saying ex ports in output have picked up. the central bank had forecast a moderate recovery early next year on the consumer inflation front, the boj says the declines in core cpi would likely narrow in the months ahead. now, the boj governor said that the yen's rise would benefit the economy in the long run, his

comments helping to lend support to the japanese trading, a bit higher against the dollar right now. meantime, japan's new transport minister has said japan's airlines must not the be allowed to fail. he said he would review turn around plans for the airline and would replace the recently formed panel formed under the previous government. his comments come as american airlines and is delta airlines hold talks to invest in the japanese carrier. jal is looking to reduce its pension benefits. shares were flat in tokyo today. hong kong's biggest ipo this year. last week, the construction company raised almost $2.8 billion in its shanghai, the

domestic offering. the combined dual listing makes it the second largest ipo in the world this year. the chairman of the french banking federation says the impact would be unjust as the crisis originated in the united states as a lack of consumer protection. in ireland, banking shares are higher as the company unveils its deepest ever financial bailout. the states will pay $7.9 billion to take over loans. there's been some criticism of the plan from trade unions and others who believe the country is overpaying. >> ross, chrysler is back in the leasing business. starting today, the u.s.

automaker will make some of its 2010 models for lease. chrysler stopped leasing its cars more than a year ago after credit dried up and credit plunged. but now it plans to offer leases on many of its vehicles. it's looking to reverse its 39% drop in sales since the beginning of this year. and toyota plans to spend $1 billion on marketing this year in the u.s. it will be expanding its prius line, a brand that has dominated the market for hybrids since 2001. toyota reported a rise in sales last month, up 9% in the last three months. still to come on today's program, is the uk in for more high street blues? find out at half past the hour. we'll continue our coverage of

the anniversary of the week that shook the financial world by looking back at british bank hbos. we've been speaking to the man who lost his job trying to warn hbos of the impending collapse.

european leaders are gathering in brussels to try and shore up the g-20 meeting in pittsburgh next week. they include spreading payments over a free years, making them conditional on economic performance. differences still remain between britain and france over demand to cap bonuses. carolin, what is at the nub of this discussion? there's a feeling that it's the uk and the u.s. sort of push for higher capital requirements for banks, so the response from france and germany to link that to a curb on bonuses is a way of stalling is. >> that's right. the european politicians feel

very much that it's a popular discussion to cap and discuss the payment practices in banks right now. it's like a moral issue while the economy is starting a very little recovery for the moment. we are going to see a little bit of a battle. here this evening during dinner, it's only a three-hour meeting for a long agenda. we are going to see a bit of a battle again. gordon brown, the uk prime minister against many europeans, like angela merkel, french president nichololas sarkozy, should europe go to the g-20 asking for an international cap on bonuses, or should they discuss this and concentrate on other topics, on capital requirements, on regulation reform, on international supervisory for the financial markets? in any case, it's not only about this topic this evening. they are going to talk about global trade, they are going to talk about climate change and how to finance climate change

projects in developing countries. there will be some domestic issues for the europeans since the bell gum government decided it's going to be the restructuring of opel to the table. they want to talk about the german state aid for opel. they want to hear what all the other europeans think about that since belgium has a one to give state aid to opel's factors here in belgium. and uk prime minister gordon brown is going to have some half an hour to give a briefing on the latest developments of the european economy since he's the chairman of the g-20 at the moment. so a lot to talk about on a very short meeting. it's only a dinner meeting. there's only going to be a small letter at the end of this meeting. everybody is expecting to see what is going to be on the bonuses side if the europeans are going to be asking for a cap

on the bonuses or not and we are going to be covering that. >> carolin, thanks very much, indeed, for that. we'll get a view of where we are on the global stock markets continuing today. currencies are very much a part of that dollar index. and the euro is at a one year high at 1.4738. richard, suspicion is that central banks are pumping liquidity into the system. >> yes. >> and now it's easier for investors to borrow in many other assets. >> yeah. it's taken time for that to come through. for whatever the catalyst has been, i think that fear is gone. now you've still got quite cheap money, provided you can get access to it. you're getting paid for only a stock crime now and you're getting capital appreciation quickly. you're also getting dividends. which are set to continue and improve. so really, the currency is benefiting from that, as well.

so this risk aversion has gone to a decree. whether it continues and how far it goes is another situation. >> let's take a look at if your dollar is your funding currency, what's your major euro/dollar target and what's your target on, say, the ftse or something? >> currencies for me, anyway, but technically and fundamentally are less easy to call as to how far we go. i.e., do we see euro at 1.55? it's feasible. i don't think that's the main game in town to manage their risk and exposure and export risk. i believe cable might defy the skeptics. i think they're expecting sterling to move back to 1.60. i don't buy that. i think we've held on to sterling levels at 1.60. it looked a bit wobbly about two or three weeks ago. i think we resume the bigger trend picture putting cable back to 1.77, 1.78 by year-end. what is more exciting, certainly

has been more exciting has been the equity markets in general. and there we've seen some very clear technical breaks. we talked on this program about six weeks ago and it's time we send the bear markets over and i've been surprised myself about how quickly they've moved markets up. but nevertheless, those people that are saying it's not underpinned by fundamentals, it's a major correction at 15%. i don't buy that. we will see corrections in equity markets. if you look at 2002/2004, where you had the big rally after the pre-iraq and post iraq war, you saw a one directional move peppered with about 7%, 8%, 9% correction. we've got 50%. >> and we're pretty much at the same level. just because we've gone a long way from a low level doesn't mean we don't have a long way to

go. we are not up to the 200-week average. so what i'm saying, believe it or not, i still believe we'll be trading at 5.7% by christmas. >> we're just below 5.2 at the moment. >> i think we'll get up there, yeah. >> richard, good to see you. thank you so much for joining us. there you go. richard is talking about 5.7 on the ftse 100. let's get more with where we are with our team of global reporters kicking off with becky. >> adding about 0.75% to the ftse 100. let's talk about some of the movers behind those gains. british airways has been very strong this morning, higher by 2.4%. a couple of reasons for that. they say ba has a relatively good fuel hedging policy in comparison to air france klm, for instance. they are, therefore, increasing the price target, too. 315 p they're saying now. the evening standard reporting

they had a conversation with the ceo of british airways in which he said he's been talking about the lufthansa about the possibility of buying bmi, a smaller airline. they have plenty of slots. ba, the strongest performer of the ftse 100 today. stephane is with us for the paris markets. >> eads is still leading the markets stronger. raised its price target from 14.5 to 19 euros per share. morgan stanley has noticed a surprisingly stronger trend from airlines which obviously is very good news for the planemakers. the eads leading the cac 40. we had a good performance for the banking sector today after the ceo of bnp paribas would be penalized by new capital rules to be discussed at the g-20

meeting. in other words, they believe the french bank doesn't need capital increase since they have a lower risk profile for the u.s. banks, for instance. natixis is in very good shape. the stock is up 6% right now. now, over to patricia for a view on the german market today. >> yet a very good day, stephane out here. i have to say volumes are looking fairly healthy, as well. we're up about 0.5%. our rally is continuing and it seems risk aversion is not on the table at the moment. frazinis medicine are the main movers at the moment. 4.5% is the main medical stocks. man up 3.6%. vw is planning to consolidate and bundle their truck business. deutsche bank, up about 3%. but bmw is showing a little bit of weakness, about 1.8%.

there was a lot of interesting news coming through from the german car show. however, bmw has had quite a nice rally over the last two trading sessions. at the moment, down about 2%. and s.a.p., it is an impact, perhaps, from oracle, oracle coming through yesterday with a little bit disappointing numbers. s.a.p. is down about 1.5%. b a sf is interesting because they were bulis about the autobonn, looking at extending working hours at a couple of plants in germany. that's germany for you. >> we're a little higher on the smi, up around 0.5%. the biggest gainer is constructionmaker wholesome. but on the bottom of the index, abd is lower by about 1% after a downgrade coming from deutsche bank. the big issue here in switzerland is the s&b coming

through later today. we may also see the bank continue to intervene in the currency markets, if needed, to keep the swiss franc from depreciating further. roche says its cancer and arthritis drug, known as matsera in europe, showed very good results in late stage lymphoma. as a result of that, shares are only up by 20 points. that's it from switzerland. now over to maura in singapore. >> thank you very much, carolin. asian markets had a fantastic day as we see more hopes about a global economic recovery continuing to boost markets here. across the region, japan closed higher by 1%. 1.7% to be exact. look where the hang seng is, up by 1.7%. shanghai saw a lot of liquidity.

and the rally that we saw in commodity prices pushed the asx 200 up by 1.4%. i want to mention cathay pacific airways because this stock surged today the after the run's biggest airline companies says it was selling shares in its aircraft maintenance unit as well as selling back six planes on order from boeing to deliver its capital base. >> thanks for that, maura. we'll get the latest snap shop of consumer spending in the uk right after this.

i'm maura fogarty. in asia, the yen gets a boost after it's said a stronger japanese currency may support the economy in the long run. >> i'm ross westgate in europe. >> and i'm julia boorstin. investors in the united states will be closely watching the housing starts and weekly jobless claims. will the numbers prove bernanke right, that the recession is likely over? >> okay. we're just getting retail sales figures out of the uk. uk august retail sales flat on the month, up 2.1% on the year.

0.2% on the month, up 2.6% on the year. basically closing sales had been biggest impact. july's gain of 3.4% was revised down to a rise of 2%. food sales had a monthly impact. we've got some inflation expectations for the year ahead, steady at 2.4% in august, the same as the reading in may, according to the bank of england surv survey. as far as retail sales numbers are concerned, 1.6511. joining us now, richard cunningham is still with us and marc, your reaction? we've been surprised about how resilient retail sales has been.

is this a sign of reality as we perceive it setting in? >> i think probably the correction, the previous two months we are very strong. and even with a downward revision to the previous month that we've just seen, the number remains quite healthy. so this is taking stock a bit of a correction. it reminds us that while the momentum we're seeing right now in these few months in terms of the global recovery is very strong and we will remain strong in the short-term. there are weaknesses we have to be releasing. there is not going to be a v-shaped recovery. >> the interesting thing is, we heard from john lewis today, auto good barometer in the british high street and said, look, this year, we're okay. we think 2010. this is a company that's coming out and saying 2010 is going to be tough. >> yeah. in a sense, it makes perfect logical sense because 2010 is the period when the policy stimulus will gradually fade out and is then you expect private

investment and private demand to pick up the slack. but the problem is, consumption is facing higher employment and lower incomes and corporate sales very high on utilized capacities. so yeah, 2010 is definitely going to be the place. >> marco, here in the united states, we're awaiting the news on the housing and jobless numbers. what do you think we'll see out of those very key numbers? do you think we're due for a leg down in this rally so far? are we going into the downward leg of the w? >> no, not yet, not yet. short-term, we're still going to see strong momentum. we would expect jobless claims to be broadly flat from the previous month and housing will come forward, we're beginning to see some stabilization, which is a positive factor. right now you're seeing the impact of market confidence coming back with a vengeance

after a long period of ward stimulus. short-term, it looks good. it's into 2010 that we're going into the second leg of the vw. >> the comments out this week from mr. bernanke in the united states and the bank of japan in tokyo, you think that's very premature, right? >> actually, no. i think they are trying to strike a balance both in the u.s. and in japan. they're pointing out that the worst is over, and it is over. at the same time, they are cautioning that we are not out of the woods and therefore policy stimulus must be contained and i think this is exactly correct. >> richie is still with us. what do you make of sth? you came out with a bulis forecast for the ftse 100. >> yeah. >> as bulis as i've heard. what about 2010? >> god knows. and i don't see that flippantly, or maybe i do.

>> it sounded flippant. could we see a big -- even if i'm right about it moving up another 10%, could we see a big corrective move on equity markets globally? yeah, probably. will we? i don't know. i could look at things from a charting aspect. we're very strong as well as the fundamentals and the sentiment probably as much as anything else to see whether we're going to go through a decent 15%, 20% correction. it's quite likely. >> it would sort of be very short-term. >> very short-term. i'm talking about several months, to me, is quite a long time. >> okay. all right. marco, thank you so much for joining us. he does a whole lot at uni credit.

we talked about the stock markets. there we go. this is where we currently stand. just on the session low right now, the ftse 100 up 5153. the xetra dax up 5717. cac 40 up 0.2%. smi up 0.32%. we were firmer than this on the open this morning. dollar/yen, 90.76, although it's still down on the day. euro/dollar, 1.4727. we hit a one-year high earlier on. cable dipping back, 1.6502. maura has a recap of where we've been in asia today. >> yeah. we really had strong, positive momentum here, ross, really helping to boost the markets across this region. in japan, even though comments coming out from the new banking minister is saying he wants to be a moratorium on some of the payback loans for smaller companies on japan. that hurt the banking sector in tokyo today, but was not enough to hurt the markets overall.

the nikkei 225 up 1.7%. kospi is 0.72% higher. analysts still say the market will rally up until national day at least and we saw hong kong rally, as well. the raltly we saw in asian stocks helped boost the australian markets up by 1.4% overall. what does thursday hold for trading in the united states? julia has a look at the futures right now. >> thanks, maura. the futures are now pointing higher. dow is up about 5 from fair value. nasdaq futures are pointing lower and s&p futures are pointing lower. so a little bit of a reversal. this, of course, we're waiting not only for the jobless claims and the housing starts, but we're looking for earnings from

fedex coming out before the bell and ge is holding an analyst meeting. so we'll be getting news from those two bellwethers. taking a look at the 10-year t-note yield, 3.47%. maura, over to you. >> well, the bank of japan today upgraded its assessment of the economy, the japanese economy. it also kept rates on hold by 0.1%. meanwhile, the boj governor said a stronger yen could boost japan's economy. luca, thank you for joining us. boj is well known for being very, very cautious and very, decree conservative. do you think their upgrade on the economy today was warranted? >> i don't think it's a real upgrade. i think, yes, it's a slight upgrade of their forecast, but the situation remains very green and their statement was -- it must have been a very

responsible one saying, look, what we're seeing in countries is probably a good result for the third quarter of this year, but we are definitely not out of the woods and what japan is saying, what the central bank of japan is saying is be careful because a recovery in some countries can be bizarre and the real bet, the real important thing is 2010 when the recovery could not be helped any more by public stimulus. that is why the bank of japan, although saying that the situation got a little bit better than before, remained very cautious and i think that any other -- any other statement that was not this one would have been irresponsible from the part of the bank of japan. >> luca, the japanese government does have various plans to help boost the economy and monetary

strategy. what do you think about the economy and do you think it will work? >> i think there are two things here. the strategy in the short-term, much of it has been done. by the previous administration, fiscal stimulus and by the current nutrition for central bank for monetary policy. this government has promised japanese a change in those -- in long-term economics. so how to improve the structure of the japanese economy. and as far as -- there are two main problems we can see in this program. the first one is on labor law and the second one is demographics. those are very important problems for the japanese economy, which suffers from very low potential growth because of very low demand due to the fact that the wages are very, very low nominal wages are very low. and also, demographics, because, of course, population growth impacts your potential growth. on those two problems, i -- what

i can see from the government or from the program, electoral program after winning coalition, there is no satisfactory answer yet. >> luca, is there a satisfactory answer, period? i mean, you know, are these problems just too intractable to solve? >> well, you know, i think that when there is such a big change in a government, there is something always going on. and i think that this coalition is going to slowly come to terms with what the real situation is as far as government in japan -- as far as governing japan. and i think that something good is going to get out and i think that political programs, of course, are very useful when it's time to go to vote and it's time to change. but then they will have to be blended with the reality. and i think there is enough energy in this new coalition to

be surprised on the upside, not from -- no by economic data, but by change, a slight change in the program -- from the programs through which this coalition can do a -- can do good to a japanese economy in the long-term. >> luca, we have to leave it there. thank you for joining us today, luca silipo with natixis. staying with japan today, the new transport minister says jal airlines must not be allowed to fail. he is reviewing the turn around plans for the airline and will replace a structuring panel created under the previous administration. jal plans to reduce its pension benefits. the carrier hopes to generate a profit of about $1 billion through these lowered pension obligations. shares today closed flat in

tokyo. metallurgical corporation of china priced the hong kong portion of its ipo at the lower end of the indicative range. $2.3 billion u.s. offer is the territory for hong kong's biggest ipo this year. last week, the construction company raised almost 2.8 billion u.s. dollars in its shanghai offering. the combined dual listing makes its the second largest ipo in the world this year. >> in ireland, banking shares are higher today after the government unveiled details of its largest bailout. the finance minister says the state will pay $79 billion to take over toxic loans from some of the biggest banks. there's been some criticism from the books of trade unions and others who thinks the country is overpaying. meanwhile, profits from kingfisher have jumped 35% in the first half of the year.

the owner said favorable weather and cost cutting helped it make 288 million pounds before taxing items. that was broadly in line with analysts' forecast. but kingfisher was pretty cautious on the outlook and it's planning on difficult conditions ahead, julia. >> thanks, ross. first quarter sales missed analyst expectations. oracle saw profits rise 4% for the first quarter of the fiscal year, but revenue was down 5% due to a plunge in its sales of its database programs. the company said it saw slower orders overseas, especially in europe and asia. google is acknowledging that electronic readers haven't entirely replaced old fashioned book. the tech behemoth is now putting 2 million books in its digital library a chance to be reincarnated in paper back.

it's made an announcement that it has come to an agreement with a printer. this is equivalent to the book atm. >> let's check on markets right now. anichya joins us now. >> thanks for that. momentum is strong in the indian markets. there were celebrations earlier in the morning. we're doing this after may 2008, so about 15 to 16 months that we've touched the psychological level. you saw that key reading between 4,000 and 5,000. that was the key, domestic trigger that pulled markets up. the trend has been very positive. a lot of leverage being added on the futures space.

rtx and marti is holding up. reliance industries has been a bit of a spoiled sport today. 15 million shares changed hands. they did sell a bit of their treasury state to raise about $650 odd million already. it was expecteded and it has transpired and maybe they have a bit more treasury stock to unload. nonetheless, good day and a historical day in terms of psychiatric loblgal levels. >> thank you, anichya. >> still to come, we'll take a look at the currency markets. the dollar is at a 12-month low against the euro. can the euro go up to key technical levels and carry on to $150? we'll talk with that when we come back. xwxwxwxwxwxwxwxwxwxwxw

[ quacks ] okay. as far as the dollar is concerned, the dollar index hit another fresh year low today. dollar/yen, 90.71. it's bounced off its lows. euro/dollar, that hit a one year high, earlier, as well, above 1.4737. sterling dipped a little bit after retail sales were slightly

weaker than expected. up around the 1.65 level still. nick hastings is with us as well as richie cunningham. nick, how fundamentally has the dollar changed with the dollar seeming to take over from the yen as the funding currency? >> i think it's quite important in that respect in the sense that i think up until now people were still hoping that at some stage the dollar would actually recover in the sense that the recession would come to an end. but what we've seen this week are two very important turn arounds. one is bernanke's comments that essentially economic recovery is here, but at the same time suggesting that there are no plans for interest rates in the u.s. to go up. we saw the cpi figures yesterday. inflation prices remain subdued. also the fact that the japanese could have been expected to come in and stop the yen -- or the dollar from falling too far here against the yen. it's pretty clear that the new administration is not into that sort of business.

so the two things that might have led people to suggest that, okay, we can stop selling the dollar, those have been taken away. and the fact that we have u.s. interest rates remaining underneath those of japan and others, as well, means there's no reason for people to buy into the dollar based on the rates alone. >> nick, it's julia boorstin in the united states. if we're talking about the dollar to be the new yen, how long do you think that will continue to be the case? >> just the perfect question. it's not going to last more than a few more months. it really is going to depend at what stage people are going to start worry about inflationary numbers coming from the u.s. and speculation beginning when interest rates are going to start rising. this certainly is the play, but don't expect it to become the norm. certainly not the way the yen was the carry trade for so long earlier on. >> what about comments coming out from officials in japan, nick, saying that essentially

they're comfortable with the yen at the current strength as it is right now? would you expect to see further strengthening in the policy there? >> oh, absolutely, because of this. it's basically what we've seen here is that the dollar/yen is close to the 90 level. the last time the japanese, i think, came in and the dollar got down to 87, 88 here against the yen and i think this is a level that's certainly going to be tested now that the japanese have suggested that they're really not that concerned about incidenter veng or they're not going to rush in and do it. sure, their new japanese finance minister suggested that they would do it if needed, you would expect that, but the thing is, it's always been the case that the japanese have been quite keen to ensure that their ex ports remain competitive. for many years, the japanese did intervene significantly. it seems willing to step back at

this point. >> richie, what do you think of the moves? >> i'm not really an expert in terms of the yen, but carrying on from our theme that it seems like hours ago about the general picture of the dollars and the currencies, it places into what we were saying as much technically from what we were saying from our perspective that there is a trend there as a result in most of the currencies. all of them are basically dollar negative, clearly. the degree of dollar/yen movement is probably a little too far, too fast, but that doesn't mean it doesn't go further. >> what about the pound? maybe the pound will trade more with the dollar than -- >> yeah, well, it's feasible. you have got a slight carrydown. the days of three or four years ago of the big carry trade, it's the main driver for currencies in the near term. that's going to, i think, perhaps drive currencies and liquidity from the banks.

i think all in all, we'll see -- of all the skurntsys i would buy, i would probably still actually buy the euro. >> based on what? >> well, probably -- it's arguing against the sterling again because we had a big correction in euro/sterling after last year. we almost got a parity, right? we saw a decent correction within the trend back to about 84. and we seem to me -- i mean, i've been watching it very closely. we seem to be breaking back to reasonably important levels. >> apparently it's equivalent to where we were on sterling/deutsch mark post the -- >> that is absolutely true and it's not spicy and people are expecting further losses in terms of the pound. just as the dollar is being looked at very much as some sort of funding currency, the pound is being looked at in a sympathy

lar way. uk interest rates are staying low. also, the fact is, let's admit it, the uk is actually pretty benign in terms of intervention. they're not likely to walk into the markets at this stage and do anything about the pound's weakness. so two reasons here that people certainly will continue selling the pound just as it is, they're likely to continue selling the dollar for the time being. >> we'll leave it there. thanks, nick, nick hastings, dow jones. richie, basically, the next few months you're bullish. what's the best place to get exposure to that? how do you play that? >> well, i think i have a few stocks. >> what do you guys do? >> we try to get into things and try to trade every stock over a two-day or three-day period. we're not just going to sit on stocks and hold them.

but in terms of things that i've been talking to people about, buying and sticking away, a few stocks. wolseley is one. it has a lot further to go i think in the next three months. liberty international, land securities, those stocks just off the top of my head, i think, have all made technical breaks and have a lot further to go. and another one which is less exciting, united utilities. a utility play, obviously. they're all stocks doing what they're meant to do. >> these are all stocks that you hold? >> we've been -- >> all right, fine. richard, thanks very much, indeed, richard cunningham at alecto financial. >> thanks, ross. in the u.s., we will get insight on two economic fronts before the opening bell, housing starts and weekly jobless claims. housing starts could be a real market mover with levels reaching 600 million units, up

over 3% in june. housing starts could boost gdp by 0.5% according to some estimates. and weekly jobless claims will be released at 8:30 a.m. new york time. the prior week showed claims dropped to 550,000. many economist believe that number was a fluke due to the shortened labor day week. forecasters predict the number to rise to 560,000 for the week ending september 12th. that's your global stock watch. ross. still to come on today's program, one year ago today, lloyd's banking group bought hbos in what's been a turn ewe lebt deal. carol, when you replaced casual friday with nordic tuesday,

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i'm maura fogarty. in asia, signs of a strengthening economy. >> and i'm ross westgate. the government unveiled a $79 billion bad banks plan to revive the financial system. >> and i'm julia boorstin. investors in the united states will be closely watching the august housing starts and weekly jobless claims. will the numbers prove that bernanke ranks and that the

recession is likely over? >> you're watching cnbc's "worldwide exchange." stocks are once again higher this morning. we just got trade data out of the euro zone. euro zone's trade surplus hitting a seven-year high in july. ex ports rose significantly, making it increasingly likely that the economy is growing in the third quarter. so trade surplus, 12.6 billion, versus a deficit of 3.5. the trade balance was forecast at 9 billion, so substantially better than some had expected. euro/dollar has been up at year high today, at the moment, just ticking back from there, 1.47 is where we currency trade. let's find out where we are with the rest of the european stock markets right now. it's been another day of gains. the european stock market two hours into the trading day, not

quite at the session highs, up 0.6% for the ftse 100. xetra dax, cac and smi up 0.3%. it's autos, resources and insurance doing better on the bourses. dollar/yen, 90.71. euro/dollar, is 1.4729 we just talked about. uk sales were just a little weaker than we were expecting in the uk. how are you looking to the futures? >> the dow is point to go a slightly higher open. let's take a look at where the futures are now. let's see if we can pull those up. there we go. dow is pointing to a slightly lower open. the futures had reversed earlier today. they were pointing higher, now they look to be point to go a slightly lower open. this comes on the heels of yesterday's gains and the markets have been closing at their all-time highs for the

year. so the markets are making massive gains. maybe we'll see a bit of a correction based on where the futures are point to go a slightly lower open. let's take a look at the bund yield. that's at 3.63% and it is up 0.018. and the ten-year t-note is at 3.46%, down 0.017. mauer are, over to see to say how it's looking in asia. >> yeah. you know, 13-month highs here for the entire regional index here in asia. some of these markets are at highs even beyond that. the kospi, for example, in south korea, at a 15-month high. we saw ample liquidity in the shanghai regional markets today helping to lift those two markets. the optimism here is that we could be seeing on the back of comments coming out, u.s. officials, japanese officials and economic data worldwide a strengthening of the economic recovery picture and that lit a fire under asian stocks today. the asx 200 getting a 1.4% rally

helping to push higher. that was a banner day for markets in these regions. julia, back to you. >> thanks, maura. joining us for the next hour of "worldwide exchange" is lotar mental. thanks so much for joining us. >> good morning. >> so here we are. the dow has been flirting with a key 10,000 mark and you've said in the past that there's still a lot of money sitting on the sidelines. as we get in these retail numbers from the uk, we're looking towards big key economic numbers. what are you expecting? do you think we can maintain this rally? >> i think we will not be able to maintain this rally indefinitely. eventually, some better earnings figures needs to come through because otherwise, markets are going to be quite expensive. there's more fear that markets

may rise than fall. whenever there is a correction, investors are happy to pile in and buy that dip. what worries me a little bit at the moment is that we're not quite so clear how much the monetary easing liquidity is part of this. in other words, are we seeing a repeat of what happened to china on the surplus liquidity that isn't trickling down where it should be, i.e., the credit markets. >> so lothar, it's maura here in asia, then. if there's all this money on the sidelines that needs to be put to work and the concern is they don't want to miss out on any more of a rally, how much of an upside can we expect to see, then? >> i think asia is a slightly different environment because in asia, the economy has already turned. it is very strongly decoupling from the rest. whereas in the g-7 countries, we're still seeing negative growth rates for the year.

asia is clearly very positive. so i think there is potentially -- there is more in asia than i would expect from g-7 countries. >> yeah. do we know, you raised the point, this is a liquidity driven rally here. we have had good earnings out that were the base of it, i guess, in the second quarter earnings season. how long cuff a disconnect for this per expect storm weather? the central banks are telling you we have to keep liquidity in the system, earnings are improving slightly. it is an encouragement for everybody to say, right, there's the cash and put it to work, whatever that means. >> there's every reason that they should be back to where they were pre-lehman's. >> we're getting closer and that was s&p around 1,200, the ftse at around 5,400, however you look at it.

i think to get there that's relatively easily explained. from there, a lot harder because the improvements that we saw in earnings in the last round was predominantly cost cutting. if we don't see some real revenues coming through, then i think this rally will falter. >> we've got amendment a picking up. >> that's fueling markets a lot and that's very encouraging to see because it means that the shell shockness of those people in the industry is a bit behind us. they are looking more confidently in the future and not just all fear and doom and gloom. >> you're going to stick around for the rest of the show. still to come, one year ago today, lloyd's banking group bought hbos for $20 billion in what's become a turbulent deal. after the break, we'll hear from the man who lost his job trying to warn hbos trying to warn them of the impending collapse. you've worked all your life.

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hbos was forced into the arms of lloyd's a year ago and it seems the troubles for british banks are far from over. guy johnson has been taking a look.

>> a cocktail party at spepser house in london. it's where the impossible deal in british banking became possible. hbos was teetering on the brink. brown saw a solution and the consumer saw normal competition rules go out the window. >> i think you have absolutely nothing to fear. this is an extremely competitive market and it's a well regulated market. >> as it turned out, daniel had something to fear. by mid october, management had to accept a massive recapitalization and a government stake of 43%. the former risk officer at hbos says the situation was out of control. what was happening in lloyd's when they took the decision to make the acquisition? it's beyond belief what's happening here. and there should be and should have been a proper forensic investigation. >> but on the 5th of august,

lloyd's dramatically announced that the worst was behind it. the news leading to talk to the government could soon sell its stake. how and when the british government exits its position remains unclear. but it's now looking unlikely that a fair share of rbs or hbos could take place before next year's election. northern rock might be a little easier. the conservative opposition party has already indicated that it's considering a mass sales share to the public. but when i spoke to alistair darling, he indicated to me that he would rather use any sale to reintroduce competition. >> my pain interest at the moment is to make sure that we have more competition in the uk market. so one of the things that will drive us as we come to sell off these shares is how do we get new entrants? we've got a lot of the competitive capacity not just in

our country, but in other countries, too. >> but only talk of disposals might be premature. so when the chairman took over on tuesday, still having to negotiate a probable cash call and more losses. but its competition commissioner may have the last word and she may decide to smash the whole deal apart. guy johnson, cnbc, london. >> discussions, of course, indeed. geoff cutmore had a chance to catch up with paul moore. he repeatedly warned the board of the company about the excessive risks undertaken by the bank and was then fired. >> in the banking market, the more saturated the good quality credit risks became, the more focused and enthusiasm there came for everything else. you don't need to know anything about credit risk management to

know if you lend money to somebody who hasn't got any asset, hasn't got any income and hasn't got a job, you've got a high credit risk. and what the rating agencies were doing, i've got no idea. >> let's just revisit there. what do you fundamentally think has gone wrong with the system of risk and oversight? >> i've said it, that the fundamental can all cause was a total inadequate separation and balance of power between the executive on the one hand and all the control functions and all those trying to reign them in on the other. the the cause was a liquidity crisis, the closing down of the wholesale markets when people realized that actually subprime lending wasn't worth anything. but it was basically about the executive being able to do what they wanted to do.

internal control, nonexecutive director and shareholders and ultimately politicians. >> we've had the walker review. does it go far enough in your mind? >> no, it doesn't. i've made one very simple but profound recommendation. i understand why at first people don't understand it and it's this -- those people who have to challenge the executive should not report in to the executive. they should report in to the nonexecutive. risk management comply eggs with internal order, it should all move out from reporting to the executive and reporting in to the nonexecutive. that way, they will be freed up institutionally to raise the challenge which currently they feel too frightened to raise because it's not a natural thing to speak truth to power. >> do you have any optimism at all that the system is going to change in the way you'd like it to, given the suggestions for the recommendations that are being made currently?

>> my issue -- no is the answer to that question. my issue is that it's pretty much all the same sorts of people who are making the decisions about what the new system should be. so that is one big problem. so it's the inmates looking after the asylum point. the other thing about this is there's never been a proper and thorough investigation into what happened in the banks. until you know what did happen and what didn't happen, you don't know what new rules or systems you need. you can only suspect. so the answer is no, i don't. >> that was paul moore, the former head of risk at hbos. you can catch more of geoff's interview with him on the website, cnbc.com. julia. chrysler is back in the leasing business. starting today, the u.s. automaker will make all of its 2010 models available for lease.

chrysler stopped leasing cars more than a year ago. but now it's offering special low rate deals on many of its vehicles. chrysler is looking to reverse its 9% drop in sales since the beginning of the year. meanwhile, toyota is planning a huge marketing blitz in the united states. the company plans to spend $1 billion in marketing in the last quarter of the year, a dramatic jump from its typical budget. the automaker is looking to capitalize. it's dominated the market for hybrids since 200. toyota reported a 2.6% rise in sales last month, aided by the cash for clunkers program. ross. >> in ireland, banking shares are higher today after the government has unveiled details of its biggest ever financial bailout. the finance minister says the state will pay $79 billion to take over toxic loans.

there has been some criticism from particularly trade unions and others who believe that they're overpaying. >> well, ross, the metallurgical corporation of china price today hong kong portion of its ipo at the lower end at 6 hong kong dollars, 35 cents a share. now, the offering is hong kong's biggest ipo this year. last week, if you recall, the construction company raised almost $2.8 billion in its shanghai offering. the combined dual listing makes its the second largest ipo this year. coming up on "worldwide exchange," singapore sovereign wealth funds recouped most losses from the previous financial year. is the worst over? welcome to progressive. how may i help you? i'm looking for a deal on car insurance. i think i might have a coupon in here. there's an easier way. we've got the "name your price" option. you do?

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ahead of u.s. equities today, becky starts off our global trip starting in london. >> yes. about 0.7% today, extending that run of gains we've had runtly. tullow oil is adding to the gains in that company. they told us this morning they've had another oil fight in

ewe gand ya. so the shares are obviously react to go that news. goldman sachs, their conviction buy list says they have a relatively good fuel hedging policy compared to their peers pb. plus we had the ceo of british airways speaking to the evening standard newspaper here in london late yesterday suggesting that he's been speaking to lufthansa about the possibility of acquiring bmi, that bmi and klm with lots of expensive slots at heath row airport. shares of bt are moving higher this morning. this is a construction engineering county. they announced advanced talks that could be funded by a rights issue, so keep your eyes peel on that one.

how is it going in germany? very well, i have to say. about 40 million shares have traded. we saw yesterday on a closing level, 5,700 has been reached and, of course, today, gone over and frezenia is one of the main outperformers. m.a.n., of course, in the spot line because of comments made from volkswagen that he's looking at bundling their truck business as well as scania. with regard to lufthansa, it's not being picked up in a positive sense from the actual stock. for now, becky has mentioned the interest in british airways in bmi. i've been talking to the company in the past few weeks about this issue. they're looking at a kind of strategy, what to do with it. one of the possibilities is no to be excluded. there's always a question about

the price. lufthansa, not reacting strongly to this. big reaction, though, comparatively. two oracle numbers yesterday is s.a.p., the entire sector getting a bit of a damper here. down about 1.6% in that particular company. that is frankfurt for you. over to paris and stephane. >> and in paris, still eads trading higher on the back of positive comments. morgan stanley said that a notice, some positive trends in growth intentions from airlines, which is very good news for the planemaker. morgan stanley raised its recommendation on the stock from equal weight to overweight and raised its price target from 14.5 to 19 euros per share. eads is still the best performer on the market. on the back of comments, the ceo of bnp paribas by new capital

rules to be discussed at the next g-20 meetings. in other words, he believed that french banks don't need more capital because they have less ex ports, they have a lower risk profile than the u.s. banks. bnp paribas, up 32%. the whole banking sector is doing well today. renault is now trading lower despite precise targets in terms of electrical cars. the ceo of renault wants to sell at least 100,000 units of the new electrical vehicle by 2012. the stock started higher, but now we are trading lower like the rest of the car sector in europe. now let's have a look at the asian markets with them. maura in singapore. >> temasek holdings was out today with its annual review. adam has just rushed back from the press room with the details. >> still sweating from rushing

back, mauer are. glistening. >> there's good and bad in this report, as you know. 2008 to 2009 was a bleak year for the equity markets. as you can imagine, for any investment firm, they saw deep, deep losses across the board. temasek managed to make money in terms of profits for the previous financial year. a net profit of $4.2 billion, less than a year ago. in terms of the bad part about it want naturally all the contributions from its major corporations and also a lot of foreign firms lifted offshore, they contributed a significant amount less this year and also from its investment activity, temasek did lose quite a bit of money from those investments, including bank of america. in terms of its portfolio, it

shrank down 0%. as you know, in the last few months, we saw a swift and fast rebound of the equity markets. so a lot of those losses have patched back and their equity portfolio is right now worth $121 billion. i did speak to ho ching and asked in terms of what went wrong and how did the economic crisis affect the temasek operations. this is what she had to say. >> we made the assumption that particularly the large economies are well managed and that the regulatory risks are low and hence, we did not pay that much attention. so if you look at going forward, i would say today we pay a lot of attention to what is being said and done in the u.s., even when we don't have large exposures to the u.s. because

that can affect the rest of us. >> now, in the past fiscal year, temasek made sizable investments. while the markets were bad, they purchased about $16 billion in terms of at ets. they are looking less at the developed markets and more toward the emerging markets both in asia and across latin america. this is what she had to say. >> when it comes to the developed economies, that still remains open. we are open to investing in financial institutions. even when the right opportunity comes, if and when the right valuation comes. >> and on the issue of finding a new ceo, maura, they are quite guarded and receipt sent as to whether they were in the process of looking for one. they did say there is an annual

review and the board plans to conduct and they are always on the lookout for new ceos, whether internal or external. coming occupy "worldwide exchange," flirting with the market 10,000. some investors who left their cash on the sidelines are now worried about continued gains. these days, when you have to spend, shopping online can help save. doing it with bank of america can help save a lot more. up to 20% cash back from over 300 online retailers with our add it up program. just sign up and use your bank of america debit or credit card when you shop online. it's one of the many ways we make saving money in tough times a whole lot easier.

i'm julia boorstin. investors will be watching the housing starts and weekly jobless claims. i'm ross westgate. in europe, shares in bank soar after the government unveiled a $79 billion bad bank plan to revive the financial system. >> and i'm maura fogarty. here in asia, it's said a strong japanese currency could boost the economy in the long run. >> we're going to take a look ahead of the u.s. open.

dow, futures are pointer higher. nasdaq futures are lower and s&p futures are marginally higher. there's a lot of attention as they neared that key 10,000 mark. just a couple hundred points away from that. we're going the take a quick look at the bonds. pull those up. the ten-year note yield is down 0.21% at 3.45%. t-bill prices have been falling and yields have been rising pass money has been flowing into stocks. ross, over to you. >> the ftse 100 up 0.75%. 5163. xetra dax up 0.5%. banks, construction, oil and gas, health care is the best performers right now. and it comes at the same time the dollar index hit another fresh year low. dollar/yen at the moment, 90.62. sterling/dollar, a little firmer at 1.65. just dipped back after retail sales come in weaker than expected.

maura. >> the asian markets, ross, had a banner day on this thursday. we saw a lot of liquidity and momentum on the optimism that we could see this economic recovery globally gathering steam here. japan today did see some leaders in the banking sector, but the nikkei nonetheless with the help of exporters and trading losses closed higher by 1.7%. we saw shanghai rallying by more than %. many expect shanghai to go higher until we get past the october 1st national day in china. in australia, the resources went higher and turned the asx 200 up by about 1.4%. overall, a very good day for asian equities. julia. >> thanks, maura. joining us now is hank smith of haverford.

hank, let's start with you. give us your perspective on where we are in this recovery. are the fundamentals of the economy strong enough to maintain the run up in equities that we've seen? >> we think so. twael, we think a lot of the bounce so far is a make up from the psychological blowoff from mid january to the beginning of march. and we agree that a lot of this is the fear and pessimism from early march having segued into anxiety. anxiety, of all this cash on the sideline, missing in a bull market and worse, getting paid nothing to be in cash. compared that to another general issue, but then the cash on the sideline was earning double digit returns. today, that is not the case. where we slightly disagree with lutar, that we think that the fundamental picture looks strong and is going to get stronger and

that this recovery is real and that top line growth will be coming to the corporate income statements and it will have an outside effect on the bottom line due to all the cost cutting and productivity enhancements, which we think are for real and not one time in nature. >> hank, it's ross here. where is the top line growth coming from? >> well, look, we have a -- just as -- we had a global contraction, we're having a global recovery. it's not just in the u.s. and it's not just emerging markets, but even europe is starting to show signs of a recovery. with all of the extraordinary monetary policy that's been -- the stimulus that's been put into place and the fiscal stimulus that's going to continue to feed into the economy over the next year and a half, i think you can make the case that this economy is not going to roll into a double dip

recession any time soon. >> what do you think, there is a view, of course, that that is what we priced in already. >> i would agree with hank that the double dip is not highly probable any more. it's more probable that we would have a sustained recovery. but how steep that recovery is going to be is very much the question. and compared to hank, i'm a little bit more concerned at the moment about the consumer because unemployment outside the u.s. is feeding through more. in the uk, i don't think we've seen everybody yet because not everybody has signed up for the benefits because you don't get much, anyway. germany is having an election. i would see unemployment there rising after the election and that would put stress on to the consumer and that will undermine earnings potentially. so, you know, i want to see the money before i really believe in this carrying very much further. >> lotar, it sounds like hank is bullish on that next round of corporate earnings.

what do you think are sector that might yield more during the next quarter? >> i think at the moment there's a lot of uncertainty. if you look at the vix future looking forward, there is an expectation that something will surprise, whether that's up or on the down. i think that's really something to watch and i wouldn't really want to be too specific on the sectors. although i'm a bit worried that the bank price res getting truly ahead of themselves, even the regulatory backlash is really going to happen. >> hank, it's maura here in asia. what sectors or companies do you think will lead the next stage of the rally in equities? >> well, so far, the current rally has been led by the same sectors that decline the most. basic industry, industrials and financials. but as this recovery goes into the next stage in the expansion,

we do agree that the odds favor a blow average muted recovery. and so we think that that is going to favor the more defensive areas like consumer staples and health care and not coincidentally, that is probably where you have the best values today right now and in large, high quality, defensive names that have not quite participated at the same level over the past six months. >> all right, hank, thanks so much for joining us. hank, of course, from haverford investments and lothar will be back with us in just a moment. meanwhile, let's check in with tok tokyo. hi there, makioko. >> it's a great day and the nikkei 225 rose 1.7%. among gainers, resource related stocks stood out. nikkei reporters at jfe steel

will restart a scrap steel plant which halted operations last year. the company said relations with car ex ports had improved. nippon steel gained over 4%. on the flip side, though, banking stocks declined. at the tokyo stock exchange out of the 35 stocks which hit year-to-date lows, over 20 were footballs. mostly regional banks and consumer lenders. the minister for financial affairs yesterday has impressed his intention to propose a moratorium for debt payment by small businesses. investors were worried about the impact it could have on the sector. japan's newly appointed transport minister said that bankruptcy for japan airlines is not an option. japan airlines is currently under state supervised rehabilitation process. jal is in talks with delta and

american airlines. meanwhile, data shows that business sentiment among japanese and asia companies improved for the first time in eight quarters. and that is all from nikkei business report. back to you, maura. >> makiko, thank you. still to come, barclay's sells over $12 billion of credit market assets to a new vehicle. we'll have more on that story after the break. and before that, here is a quick look at how u.s. futures are shaping up. as washington continues the debate

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welcome back to cnbc's "worldwide exchange." here are some of the top stories we're watching from around the world. >> barclay's has found a way to rid itself of tock ix assets. this is a newly created hedge fund regularstered in the cayman islands. the move effectively brings future losses and a group of former managers from barclay's will manage those assets and they're being paid $450 million over a decade to do so.

lothar, it's a strange deal for barclay's, because they sit on the barclay's money, they're lending the money, what are they getting out of it? >> it smells of window dressing, really, to be able to account for these assets differently. they don't have to mark-to market. they lose the volatility. but thaimt, while they're not losing the downside, they're losing the upside. >> this is similar to what others have done, right? >> absolutely. this is what the determinan government did. so it's not completely new and bizarre. that is exactly how the german government plan worked a couple of months ago. nevertheless, it makes me a bit nervous. it's either that barclay's thinks they can use that money elsewhere or they're worried about the regulatory clampdown and they'll have to put up a lot more capital for anything

volatile in their balance sheets. >> it seems now no one has any concerns about the banks at all at the moment. do you have any concerns at the moment? it's forced to raise the capital requirements in the u.s. and uk as well as european banks, which they don't seem to be keen to do. >> i've got two concerns about the banks at the moment. firstly, there's d disintermediation going on, that the industry generally, banks the banks are not lending, are finding new channels to get to the capital. on the other hand, we're still not at the end of this recession. there will be more bad loans coming through. that will put more pressure on the banks. let's not forget the regulatory backlash from the government could put quite a dampening on the banks. >> thank you so much for joining us. >> thanks, ross. shares in oracle fell more than 4% in after hours trade after they said first quarter sales

missed analyst expectations. oracle saw profits rise 4% for the first quarter of the fiscal year but revenue is down due to a pledge in its sales with its database program. the numbers suggest the economy is still weak and that companies are reluctant to invest in new technology. google is acknowledging that electronic read eggs haven't entirely replaced old fashioned books. it's giving over 2 million books a chance to be reincarnated in paper backs. it's made a deal with on demand books which owns the expresso book machine. it can turn out a 300 page book in five minutes. on-demand books says this will be the book sfri industry's equivalent to the atm. >> and french bankers say that had that the new capital program will unfairly penalize european

financial institutions. the chairman says the impacts would be unjust for europe as the crisis impacts in the united states back of a lack of consideration and a lack of consumer protection. at the same time, eu leaders are gathering in brussels today to shore up a hedge fund. the leaders have agreed on a range of ideas for curbing excessive bank and mistaking them conditional. but differences still remain between britain and france to put an overall level of cap on bonuses. >> ross, met lernlgal corporation has priced at the lower end of the indicative range. now last week, if you recall, the construction company raised almost $2.8 billion in its shanghai offering.

the combined dual listing makes it the second largest ipo in the world this year. staying with china, geelly automobile is reportedly in talks with magna international about a potential partnership on opel. discussions include the possibility of geelly taking a stake in opel.y taking a stake in opel. in hong kong today, geely shares have been suspended, of course, since wednesday pending an announcement on a bond issue. >> all right. we are just under 12 minutes away from "squawk box." carl is with us to tell us what's coming on today. >> hey, ross, a couple of these numbers we live for jobless claims and housing starts kwoj out today.

the ceo of retina, ronald warrens. dr. toby cosgrove and senator grassley on this new baucus hell care plan. from health care to hotels, ross, the chairman and co-founder of fair lodge b, fred malik and ceo of mayor yok inner national can talk all about where we're headed with commercial real estate. this market, ross, you talk about up 8 out of 89 sessions, at least here in the u.s., positive breath for nine in a row. we'll talk more about how long this gain can last and why people still come on and say that we are due for a pullback. >> we're supposed to have that, right, like two weeks ago, right, at the beginning of september. what happened to september, the month we all feared? >> where is all the bleeding? that's the question.

>> it could be around the corner. we've got, what, quadruple witching on friday yes, that's right. could be treacherous. >> carl, looking forward to it. thank you. >> okay. >> up next on "worldwide exchange," flirting with 10,000. will the dow close above the punch mark level it hasn't seen in a year?

welcome back to "worldwide exchange." still with us is hank smith, chief investment officer at haverford investment. hank, today we have big news on jobless numbers and on the housing market. what are you expecting to see from these reports in just a few hours? >> well, we think the trend is going to continue and that is improvements over expectations in both data points. and that has really been the trend all summer. regardless of the economic data point you're talking about, they have come in for the most part

better than expect ages. and going back to what carl and ross were talking about a little earlier with the market up 8 in the past 9 days, look and see whether the market opens lower or on a positive note, by the end of the day, the market is higher than where it began. this is the anxiety of the cash on the sidelines wanting to get in. and we think that's going to continue for a while. >> so, hank, where do you recommend investors put their money right now? are there certain sectors? are you interested in commodities? >> well, as i said earlier, this rally off the bottom so far has been characterized by lower quality higher perform higher quality. that is very normal in the stages of an economic recovery because it is being led by more

cyclical issues. but as the market advance matures, we think higher quality stocks are going to take a leadership role and in terms of sectors, the higher quality, more defensive areas such as staples and health care should start to do better as we end up this year and go into 2010. >> hank, around back in march, a lot of investors were, you happen, tipping. what do you do with those invest hers? >> well, i think that the equities are going to be a interior place than the corporate credit side. particularly if we see a rising rate environment, not due to inflation, which we don't think is going to be a problem over

the next couple of years, but due to these massive deficits that we are undertaking. so right now you can get attractive yields in equities and get growth in income due to dividend increases. we think it's a very good place for investors. >> hank, quick final question. some of our guests on the show today have been concerned that when we see the next round of earnings reports that we could see a pullback, say, around october. do you think that's a possibility? >> well, there's always that possibility of the old adage, you buy on the rumor and you sell on the news. and perhaps this market has already priced in profit. it does not price in the second quarter profits earlier in the year. and we still think that by and large third quarter profits will come in higher than expected. >> hank, thanks so much. we have to leave it there, hank smith, thank you so much for

joining us for "worldwide exchange." we look forward to seeing you tomorrow. - ( classical music playing throughout ) - wireless can bring even more freedom to the freest country on earth. so why should you be penalized for talking to someone, just because they're on another network. shouldn't you be able to call any mobile... on any network, at any time? it's a free country. knock yourself out.

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