market reaction. i just want to see the dollar. euro/dollar is around 1.4007 at the moment on the reaction to this particular piece of data. so a slight revision upwards. we've got euro zone retail sales coming out a little later. a slight upward revision. that's where we stand with that. we'll get more reaction on the uk number coming out. christine, good evening to you. >> hey, good evening, ross, or good morning, i should say. here in singapore, it's evening here in singapore. 5:00 p.m., to be exact. it was a good session overall generally for the markets today. the nikkei 225 up slightly. some of the resources seen in these sectors kind of was kept. that continues to be in focus. shares of toyota continue to lag because of concerns about its recall. the hang seng doing nicely, up

2%. concerns about tightening over in china kind of easing. and bargain hunting is really coming back to the markets today. in south korea, this market up 1.2%. bombay sensex up 2.1% and the australian market up 0.9%. overall, with a nice session here. the ftse cnbc global 300 index getting a nice list, 4,417, 18 points higher. >> and edging a little higher for those euro zone numbers. the ftse 100 off 0.75%. i feel like i'm going to sneeze. all right. just about avoided it. 0.2% higher for the xetra dax and the cac 40 and the smi slightly lower at the moment. and services sectors are weaker, travel and leisure. autos, basic resources and construction are all slightly firmer. it was a short run thing,

nicole, but you can stop the sneeze. >> in and out. bless you just in case. >> thank you. >> let's see if stocks will be blessed today. stocks could be put to the test after the best three-day gain. dow down about 20 below fair value at this hour. about 4 below value for the s&p down slightly, as well. we have a big adp number coming out. we will we watching that as dow component pfizer is reporting before the bell and cisco after the bell. >> joining us for the next hour, we have douglas aisles. good to have you with us. you say in your notes we are at an inflexion point after 2009. are the good times over for the equity markets? >> as i said, it's definitely an inflexion point. we'll have to decide whether the good times are over. it's interesting, the china autos market peaked back in

november and december. going a couple weeks back, there was a big die vergence beginning to open up for the expectations of the rest of the world. what was actually going on in china and the bank and so on and the property stocks fall off. so the die vergence was starting there and now people are starting to reassess the pog of the markets to try and work out where we go. >> tell us about this decoupling story. i mean, the asia decoupling from the west or is asia more coupled with china these days? which one of these stories do you follow? >> the decoupling is very interesting. over the last few days, the asian markets are done quite well. in many ways, it's been ironic that people get up in asia every morning and look to what's hapg happened in the u.s. for a lead.

we were starting to move lock step again. the fundamentals are asia are very strong. but in the short-term, the developed markets should have opportunity. >> how does china play into this? >> china is always the biggest story in the world. it's the biggest country in the world. i think what is interesting is the chinese market peaking before everybody else. if i read the commentary for the rest of the world, people are looking for the china stoish, whether it be in the u.s., australia and japan, whereas in china itself, people are starting to question the market, where it's going. >> it's interesting, doug. it's ross here in london. >> hi, ross. >> if you take a look at what's happening with the capital markets, we've made peaked here in the near term and what we've had is copper being supported last year by unprecedented

stockpiling, which has now come to an end. what is your view on that? >> i think the commodities sector has done extremely well. there has been a die vergence and an early warning sign that commodities continue rising. one of the big concerns if you look at the growth numbers for china for 2010, the most vulnerable part seems to be the fixed asset investment. the policy is tending to focus on the slowdown in housing. you know, asian governments don't want to have property bubbles. the chinese property market has been very hot and we're starting to see policy markets slowing that down a lot in today's headlines. so that doesn't go so well for the commodity markets. and if we look at the cargo pricing, as well, here cargo is starting to ship to high tech goods performancing better than the bulk commodities. so i guess it's something we do want to watch out for. >> this is nicole lapin in the

united states. you talk about the exit strategy in the united states. what type of does this massive western deficit putting on future growth rates globally? >> it definitely puts a huge burden on the growth rates that we see going forward. what we've had is a very, very sharp recovery from, you know, basically paralysis in the economy about 12 months ago. now the question is how the economy loogs loose going forward. that is going to be a big burden on growth, when it's 1% or 2% against rates. but more importantly is the difference speeds are moving at. if we look at talking in china, australia's risen rates, japan on the other hand is starting to see some loosening of their economy. the economy is now moving a lot less synchronized than it has been in the last 12 months and that creates opportunity for investments. >> douglas isles, our guest host

for the hour. stay with us if you don't mind. be we're going to come back to you for more of your insight throughout the hour. in the meantime, in the united states, aig is set to pay another round of bonuses today arou around $100 million. most of them recently agreed to take a 10% to 20% cut in their bonuses if they could get them a month early. aig is still due to pay out tens of millions in more bonuses next month, mostly to former employees who didn't agree to those concessions. we're following top lawmakers concerned today that president obama's new bank rules may complicate efforts to pass a financial reform bill which is working its way, of course, through the u.s. 123450e9. republican senator richard shelby says the volcker rules are being air dropped into the senate's already year-old

financial regulation debate. >> i believe that a strong regulator, if the regulator is alert, they can handle this, these kinds of problems if they think that a bank is not doing right, they think a bank may be jeopardizing the safety and soundness, they can step in. >> former fed chairman paul volcker, though, offered few details on the president's plan at the senate banking committee hearing on tuesday. senator chris dodd who chairs the panel says while he supports the proposal, piling on too many new ideas would be a mistake. ross. >> nicole, now, the european commission will today signal its approval of greece's plan to slash its ballooning deficit. the commission president says the plan is feasible, but the risks remain. last night, the creek prime minister outlined additional measures to cut spending, which included a sector salary and a hike in fuel practices. greece has promised to bring its

debt to ge ratio below by 2013. at the moment, it stands around 13%. >> and guess what is my top story today, ross? it's toyota once again saying its north american and japanese dealers have received several complaints about the new preyumm hybrid. people have experienced difficulty when breaking or driving or bumpy roads. the company first heard of the complaints in december, but there were no accidents related to the matter. separately, the wall street journal reports that toyota will be sending checks to its dealers in the u.s. to help cover the cost of fixing faulty gas pedals. in tokyo, they reported a 16% drop in january u.s. sales. well, it's dr. doom no more. nouriel roubini said that he no

longer cared for his long running nickname. so falling a poll on cnbc.com, we can reveal that a new suggested nickname with 25% of the vote is roubini the realist, dr. freak a lot, dr. real and dr. no came in third and fourth respectively. interesting, ross. >> you can't miss it. there's so much on there, you have to go and have a look. roche shares are lower today after they missed estimates. find out what else is moving in european stocks right after this. plus, we'll give you a quick view of where oil is trading. 

it's sort of a mixed day in london. it's a quarter past 9:00 in the morning. as far as the bond markets are concerned, they'll be looking ahead. the bund data is nudging up, 3.22%. focused in greece for the euro zone. u.s. treasury notes inching higher, 3.657%. the adp data is coming out.

we'll have to see how we go. we've got uk services pmi coming out fairly shortly, as well. christine, how are we doing on the currency markets? >> as far as the dollar is concerned, it's looking pretty mixed once again. the dollar is weaker against the yen. but it is stronger against the euro. the euro is being impacted by the uk data coming out. sterling, is 76060. euro/sterling, 0.8727. nicole, over to you. >> and we could see u.s. investors today get the first of three reports this week on the labor market. the adp employment report is out at 8:15 new york time. the forecast is calling for a loss of 30,000 loss of jobs last month. at 10:00 a.m., the ism services index will be released. analysts are looking for 51. any number bofs 50 denotes

growth in that sector. treasury secretary timothy geithner is calling the house ways and means committee about 10:00 this morning. the u.s. weekly inventory data is out at 10:30 in the morning. a dow jones survey calls for oil to remain unchanged, gasoline to build by 1 million barrels and we are looking for over tidbits out of that report, as well. fed governor kevin worst speaks about the regulatory reform to the new york association of business economics at 1:00 p.m. as for earnings, we hear from dow component pfizer as well as time warner, international paper and polo ralph lauren. after the close, we'll hear from vi visa, yumm brands, parent of taco bell and kfc. >> i have all of those for breakfast every morning. it keeps me in shape, nicole.

look, we're into the first day of february and we haven't had any losses in european markets. we're higher right now, up by about 0.3% for the ftse 100. a little more for the xetra dax and cac 40. let's take a look at the london market with becky. >> the big eft gainer is standard life. and the shares of today life are pretty strong today, up by over 4%. they're an insurer. they came out with figures today. sales for 2009 fell by 7%, but that was better than had been expected. we anticipated sales down by about 11%, also. also saying that in their core domestic market in the uk, prospects could be pretty good. consumer confidence figures out, probably helping a little optimism, as well. nationwide, these figures tell us that consumer confidence

increased in january. a little less incline than usual at the start of the year, but still better than previously. there is some caution about the speed of the recovery and that could be limiting to the outlook, but overall, not a bad picture, ross. >> is that the reason astrazeneca was up this morning? >> farmers are declining. that's certainly the case here in the uk where astrazeneca has had a rough ride recently and has losses by over 3% today. roche is one reason. a couple other things to bear in mind by astrazeneca specifically. one is that the company is trading ex dividend today. the analysts at morgan stanley say there could be some negative data due from the experiments of a drug from astrazeneca. >> we'll look out for that.

patricia is in frankfurt. what's higher there? >> it's looking good, isn't it, ross? a lot of the car and truck stocks are doing very well on this wednesday morning, especially m.a.n., up about 4.7%. you a couple of reasons here. we had very good data coming through from swedish truckmaker ganya. there is increasing talk, of course, that vw may take over m.a.n. and that is pushing that stock higher. by the way, skania was up as much as 9% the last time. carmakers like daimler, up. on the down side, daimler down after getting a downgrade from morgan stanley from overweight to neutral. siemens is falling suit into the red. >> and we've done some research.

do investors like them or not? goldman sachs had a good look at the solar stocks and renewable energy in general. as you can see, we have quite a bit of a reaction there. for example, conergy trading down quite a bit. it's interesting to see that they're downgrading the stocks. we had obama talking more and more about clean nuclear energy in the future. that could feed into goldman sachs research. the rest, all of them are being tagged as the tail. >> patricia, thanks very much indeed for that. stephane had a late night flight back last night but he joins us now. eads and airbus once again in focus, stephane. >> absolutely. the commercial director of airbus generally indicated that the global air traffic will recover in 2010 with 25% to 5% of new orders coming from asia.

he also indicated that airbus is going to increase its prices by approximately 6% in order to reflect the increasing price of raw material and also he repeated that european countries should reach soon an agreement on the a400m military aircraft and that would be a positive agreement. that's what generally he indicated this morning from singapore, ross. >> and we've seen construction still being pretty anemic. most places in the oecd countries, stephane. what is versi saying this morning? >> they announced a 4.6% decline in sales figures. the company managed to offset the decline of the construction sector in europe with its concession unit. the company is running some parkings and highways in france and europe and that sector wants up 2.4% over the last year. the company remains outlook in terms of global economic

environment but is not confident with its order book, which increased by 4% last year. and that was a good performance. that explains why the stock is up 2%. >> stephane, thanks for that. we've seen pharma, that is weaker this morning. a lot of that carolin schober has the updates on that this morning. what doesn't the market like? >> the market doesn't like earnings per share for 2009 came in below expectations. we saw sales for some key drugs lower. tamiflu droefr pharma sales. the company said they're expecting tamiflu sales to hit 1.6 billion in 2010 and that is higher than previously guided.

in 2009, r&d investment was up 12% and we did get a chance to talk to the ceo of roche earlier on and asked him what the companies plans were for investment in 2010. >> we will continue to invest in our business. we will continue to invest in ee search and development, ae vong pipeline. we are moving into late stage development. >> moving on to some of the other stocks we're watching in europe today, ubs up after jpmorgan upgraded that stock to neutral from overweight. julius baer, lower. there's still a lot of speculation to which bank the german data could be long to and julius baer was mentioned in

relation to these reports. ross, back over to you. >> carolin. thanks for that. still to come on the program, we've got the services pmi data coming out in the uk. how will that play into the bank of england's rate decision tomorrow. plus, is the credit rating at risk for the united states? moody's sends a warning to the obama administration to come up with further austerity measures.

this is cnbc's "worldwide exchange." the headlines from around the globe. >> here in asia, toyota reels from falling sales and complaints about the prius while honda has its best quarter in 2 1/2 years. and pmi gets a boost up. investors are waiting for similar revisions right now. >> in the i'd, we'll search for clues about friday's big jobs report in today's data and private services report. >> just got pmis out for the uk and growth services sector. growth slowed more than expected. pmi down 54.5 from 56.8. we were looking for a figure of 56.5, the weakest since august.

the new business index fell to 53.7, coming down to 160.38. it was the last major piece of data whether the bank of england decides whether to extend or not extend quantitative easing. to the fall from pmi services index contracts with a sharp rise of the manufacturing sector that we, of course, got out on monday. and we were looking -- just a reminder, we were looking for a readling of 56.5. so it still looks like we're getting growth on one side of the economy. maybe we might have peaked in that pick up. we're still at about 50 and that's suggesting a contraction. we've got reaction from this in a few moments from peter dixon. let's just show you where we are in the stock market, whether that has dented us slightly in europe. the ftse cnbc global 300 is coming off the peak that we got

from the euro zone services pmi. we'll get to peter and the data reaction in just a few moments. christine, what's happening, though, with the markets in asia. >> it's a nice session across the board. we've got good earnings numbers, good economic data. the nikkei 225 is up 0.3%. toyota continues to slumber. honda earnings being reported today. best quarter in 1 1/2 years. the hang seng he surging up more than 2%. worries about tightening over in china, kind of easing, as well. a lot of bargain hunting happening in the greater china markets. over in south korea, the kospi up 1.2%. the bombay sensex up almost 2% and the aussie market up 0.9% in terms of sectors, energy and the resources sector doing as well here in asia. nicole. >> good morning, christine. we were looking at futures down slightly, just about a half an hour ago. let's take a look at the dow trading around fair value right now as is the nasdaq.

a little bit below fair value at this hour. we, of course, are waiting for adp to come out later today and big dow component pfizer before the bell. >> nicole, thanks for that. january services pmi, weaker than expected in the uk. 54.5 from 56.8. we were looking for a figure of 56.5. many firms in this poll are citing january's snowy weather for the slowing in new business. hotels and restaurant sector particularly hard hit as roads became impossible. it has endured one of its coldest snaps in years. doug isles is still with us from pangana capital. doug, how much do you think are global investors looking at what the bank of england does 20e78 and whether it extends qe or not? how significant is that for other investors outside of the

uk? >> i think the uk's importance has declined, obviously, grew up in scotland myself. but i think in terms of the global stage, the balance of support has shifted. the uk came out of recession with 0.1 growth. so seeing a number like this does make you question the strength of the recovery and given the dominance of services and particularly financial services in the economy, i think it's maybe a concern for my homeland, but not necessarily something that has wider significance for the markets. >> just wondering if there's a wider significant. they decided that they wanted to extend qe, whether that would have an impact on how they were viewing monetary policy generally in the west, in oecd countries. >> i think i mentioned earlier that there is a multi speed thing going on here and that different countries are definitely at different stages of the recovery. and i think the uk is at an earlier stage in any recovery than many of the countries are over here in asia.

so yes, it plays to a broader theme. some of the western markets look technically stronger than the eastern markets. while it may not have the significance, there's some money to be made in the developed markets right now. >> and where does australia central bank stand in there? >> australia is interesting. i'm also australia. >> you're multi country. >> the australian interest rate was interesting yesterday. they were raising rates before anyone else and all of a sudden, that was put on hold. that was an interesting signal, perhaps concerned with the wobbles we've seen in market in the last couple of weeks. perhaps a little concerned about the importance of china, australia and the bakts of tightening in china. but i think that was a bit of a surprise that china's rate hikes were stopping.

>> and will you be surprised? this is nicole lapin in the united states -- at the jobs number coming out on friday, reading that you're expecting that to be flat, but that's still a major improvement after a drop of 85,000 last month? >> yeah. i think in the u.s., we're now looking for -- we're looking for positive data in the u.s. the u.s. market is looking technically strong. the relative momentum of the u.s. against the rest of the world is starting to look quite compelling in a market sense. and yes, the headwinds are there, the deficits, tun employment situation as it is. but any good news in the u.s. is something ta i think markets will be looking for. and if you look at the valuations of some of the largest stocks in the u.s., they look attractive at this point in time, some of the world's strongest companies in that market. so i think it's interesting that the outlook for the u.s. market is quite positive. >> any good news you're looking for in the jobs report? also, we had some good news out of the ism manufacturing report.

today we're looking for ism nonmanufacturing survey coming out this morning. what are you looking for in that? >> again, looking for increment yaptal signs that things are moving forward. we've gone through alternatings season now in the u.s. and rather than just earnings surprising positively, this time we had sales positively. that's a constructive data point. when it was only earnings and sales were not yet come through, it was a sign that costs were being cut. now we're seeing sales come through higher than people expect and that will have an impact and a positive impact on the economy going forward. >> douglas, we'll have to leave it there for you now. but you continue to stay with us, of course. and douglas isles is our guest host for the next half an hour. coming up next on "worldwide exchange," autos in focus. honda reports a stellar quarter and raises its annual outlook for the first straight time. but will honda's own car recall cast a shadow on future sales?

we'll talk about that. >> just a couple of minutes. before that, here is a quick look at how gold is trading. up $16, $1,121.20 an ounce. 

welcome back to "worldwide exchange." you can see that's a shot of the hong kong harbor. 20 degrees celsius and looking pretty cloi cloudy for a wednesday night. let's cross live to tokyo and check in on the trading day there with ken moriyasu. moriyasu-san. >> hello, christine. tokyo stocks gained for the third straight session. but it wasn't a good day for toyota. toyota usa reported a 16% decline in january sales following the massive recall. toyota, today, falling leader lost close to of% today in trading. toyota stock prices have dropped 18% in nine sessions since the recalls were announced the others in the toyota group like denso and aisin seiki were hit.

the market was tough on fast retailing, operator of casual wear chain uniqueklo after hearing january sales dropped 7%, the first decline in six months. but 21 banks led by the development bank of japan have decided on the largest syndicated loan this year. 85 billion yen will be lent to tokyo railway. the 634 meter tower, which should be tokyo's new landmark will open in the spring of 2012. that was the nikkei all right for today. >> gives me good reason to come visit you. moriyasu-san, thank you for that. now we have a special report on the carmakers. >> a tale of two carmakers in tokyo today. toyota suffered another blow.

this time, the company says preyumus drivers in both the u.s. and japan are xlaping about the inconsistent brake feel when driving the hybrid car in certain conditions. push shares down 576%, the lowest in two months. turnover today is three times more than usual. its rival, honda, meanwhile, is three for three. honda expects to post an operating profit of $320 billion yen this year, its third revision in as many quarters. honda, too, recently announced a recall of its own, but had this to say about its competitor. >> translator: as far as we are concerned, the recall has not affected us that much. in the context of confidence in japanese carmakers, we are a little worried because toyota has been the front-runner of japanese cars. but i can't say more until i take a look at the situation a little longer.

>> honda's projection for u.s. auto sales this year, 12 million. all eyes are now on 6 gmt thursday. that's when toyota reports its quarterly numbers and we want to hear how the number one carmaker in japan is calculating the cost of the recall. back to you. >> that was cnbc's tokyo bureau chief. for more, now we have our guest from tokyo, the senior analyst at shinsei securities and staying with us is douglas isles. let me ask you, honda best quarter in 1 1/2 years. honda raising its outlook. to what extent do you think honda can benefit from toyota's problems? >> the current program has just been limited to toyota. so that why are you people going away from toyota?

they prefer and still prefer to stick to the japanese carmakers. so that is why honda can get a benefit from the toyota. >> matsumoto, we know toyota is reporting tomorrow. obviously, the numbers won't reflect the control. how wleek of a number do you expect to see from toyota? >> actually, i don't believe toyota is going to lower its full year earnings forecast. we think that some improvement for that last quarter result so that i think that by keeping in the current earnings guidance, toyota will be able to have additional costs associated with the recall. so financially speaking, i think the recall will not affect toyota so far. >> matsumoto-san, we believe many of the parts manufacturers are beneficiaries of china upgrading and moving to higher

quality manufacturing over time. but in the short to medium term, what other opportunities does this throw up for an investing perspective among some of the group manufacturers? >> well, actually, i think many of the providers in the toyota group provide products to the other company outside of toyota. so i think that there shouldn't be suffered from the current problem. so i think there's opportunity for the investor to buy opportunity to the vendors. and those for the chinese carmakers, it's a good time for them to penetrate into the u.s. market since people try to shift away from toyota and that there should be a narrow differentiation in the quarter of toyota and its chinese competitors. >> this is nicole lapin in the united states. you were just talking about the opportunities within the toyota group and with vendors.

yesterday we saw a big boost in u.s. auto sales, specifically with ford and gm. to what extent will the rivals continue to win after toyota's woes? >> well, actually, how long that the current recall problem will continue is fully depending on toyota's attitude toward the public communication. so since we are not so satisfied with the toyota experiments on the recall problems so far. so they have the top executive of toyota should go to the public to explain the real cause. what seems to be the cause of the problem at this point so that otherwise toyota cannot regain confidence from the public. so for the time being that current opportunity for that chinese and other japanese peers

will continue. >> matsumoto-san, it's ross here in london. the line that toyota is putting out is look, we know how to fix this, it's a quick fix and it's fairly simple. but the scale of this problem suggests they may have a deeper issue in the structural manufacturing. what do you think? >> yes. i think the size of the recall is so massive, i believe there should be some structure problem so that it takes a long time for the company to fix this kind of problem. that seems to restructure, structural. over the last decade, china has been rushed, you know, by its expansion so that they have a fundamental problem on the global strategy. so it takes time for them to review their global strategy and to fix a problem. >> matsumoto-san, quickly from me, christine, how soon do you see toyota recovering? can they bounce back from this?

>> well, i think, yeah, it takes three months or six months for toyota to fix it and a top executive to explain to the public. >> all right. matsumoto-san, thank you very much for your views. thank you. >> thank you. >> of course, douglas is will he s, our guest host, will continue to stay with us. let's head over to adam for a look at some of the other markets we're watching in asia. >> it was a good session particularly in the greater china markets. if you take a look tt cross straits 500 index, which measures the top 500 corporations from shanghai to taiwan, all of these markets had solid gains driven by primarily what happened in shanghai. the index knocked on the door of the 3,000 level, managed to close just above that, up by 2.4%.

the hang seng was with up basically 449 points. the banking, financial stocks and brokerages, fears seemed to have subsided once again. so investors were jumping into this sector in general. take a look at the energy stocks, particularly sinoc after the market closed yesterday. they're going to hike oil and gas productions for 2010 and a cap ex expenditure by 2009. meanwhile, the kospi closed higher by 1.2%. lots of stocks gain there. but within the tech space, hynix semi conductor did come under more pressure today, christine. >> why was that the case? why did hynix suffer today? >> yeah, well, there's lingering concerns about the ability to get this company sold off. the major creditors, which including korea exchange bank having to sell their 28% stake in this world's second largest chipmaker. now, they had a deadline last

friday for companies to submit their bids and nobody came up. they extended that to february the 12th and then there was speculation that a couple of other companies were going to step in and make a bid. basically, the korea exchange wanted to clarify that speculation yesterday. they had no, they're not interested at all. so the result of that, shares basically came back up but there's concern that we've reached pretty much, christine, the top of the cycle in terms of the chip sector. in q1, we tend to see prices coming off and it's a difficult business because it's capital intensive. so you have to put a lot of investment into this. and if we see a double dip in the global economy, you never know what could happen. it may be a tough sale to get this off the books. >> thank you very much for that. moving on, asia's largest exhibition of aircraft and aerospace technology is happening here in singapore. martin soong has the latest from the air show. >> it's day two here at the singapore air show and the cautiously optimistic thought

continues, this time from airbus. the european plane making consortium reaching the press and talking separately to reporters. by the hard numbers, this is what they say. orders, 310 units, same as last year. deliveries, 498 units, same as last year. what is key here is orders are lagging deliveries because this is an industry which is still struggling with overcapacity at a time when demand is still fragile, even though it's starting to creep back. on a longer term view, airbus is optimistic about asia saying it's going to account for about a third of all aircraft orders. it's especially optimistic will planes like this behind me, the a 330-200f. cautiously optimistic thought continues. but again, it's january. there's still 11 months to go. it's martin soong at the singapore air show. >> don't forget, all of our interviews at the air show can be found in one spot, the website. just go on to cnbc.com.

you'll find everything there. let's give a final thought now from douglas isles, executive director of pangana capital. douglas, investment strategy. talk about things being multi speed. are you adopt ago multi speed investment strategy? >> certainly. if we start off with japan, japan is one of my favorite investment opportunities. i think what has happened in japan, for once you've seen proactive behavior by the companies last year in the downturn and that means there's much more leveraged to recovery. so the market is cheap. the yen looks like it's formling a head and shoulders partner against the u.s. dollar. falling currency, this should transmit itself into rehiring and that should flow through to domestic economy spop positive on financials, domestic exporter in japan. cautiously on the jgbs with such huge exposure of the individual japanese to their bond market and also the need continually for the government to raise funds as they continue to

stimulate that economy. >> do you like the automakers? we've seen toyota tanking. as an investor, do you adopt a quick trade? is it down further? would it be a buying opportunity for you? >> toyota has been one of my favorite companies, and the group, fantastic companies within the group. when you get the opportunity to fall off like we've had in a company, it's a realtime to dig under the bonnet to find out if things are impaired and if not, i think it's a potentially good buying opportunity for that company and for its components. >> douglas, what's your biggest risk? you've obviously collected a little bit. what's the one thing you would avoid right now? >> i think exposure to the chinese fixed asset investment theme is something to be weary of. if you look at the policy, the policy is trying to shift the chinese away from that kind of investment construction focus towards more consumer-led economy. and that's something -- it's not being reflected in the materials prices. it's not being fully reflected

in the machinery price at the moment. so just be careful of buying in too much to that story of china continuing to build at accelerating rates and that's something that probably poses one of the bigger risks at the moment. >> douglas, if you don't like china and you like japan, what about australia? the energy, tremendous sources, the mining stocks doing very well, is that a sector you're looking at potentially? >> i think, as i say, i'd be nervous and weary. the australia dollar looks like it's probably due a pause. and the rate pause yesterday says the interest rate differential is not expanding. globally, i think that the mega caps are very interesting. we focus on asia ourselves. but if you look more broadly about the scope to invest internationally, i'd be looking at the biggest 50 companies in the world. they're looking cheap. they've gone fantastic brands. that's why they're already there. >> give me a couple. >> pick a name, bick the pfizers, the general electrics,

the jpmorgans, just work your way down the top of the list, apples and so on. strong brands, strong roes and well positioned and they take away some of that risk. as i say, we focus on asia. >> give us some disclosure. do you have any connection with these companies you just talked about? >> no. they're just the first names that come to mind. >> douglas, we'll have to leave it there. appreciate you coming on to the show. >> thank you. >> thank you. appreciate that. douglas isles, pengana capital. in the i'd, newscorp swung to a profit in its second quarter, boosted by a recovering ad market. media companies have benefited in recent months as marketers rezum spending on tv commercials which particularly help local stations. newscorp owns 27 fox affiliates. strong dvd sales from the latest ice age, x-men films, as well,

lifted the company's movie studios. newscorp will see avatar box office sales in this current quarter. right now, up almost 7%, raffle. >> and they've got a new show. simon cowell, who has a show on eye idol -- >> is he your favorite? >> no. i'm just saying, he has a show called x-factor and he's launching it in august. talent shows, do they do it for you or not? >> i would say i don't want to quit my day job. >> yeah. i just wondered whether you -- you know, there's a sort of thing over here in the uk where start night, everybody you know ends up watching it, whether you hate it or like it. so a strange phenomenon. you've got another one of those coming your way soon. s&p, nicole, has cut across the corporate credit rating from aaa

to a minus. kraft got almost 72% of acceptance votes on the british confectioner shareholders and the british secretary in the hoouk said the manufacturer would boost manufacturing in this company, but said he didn't get any commitment from kraft that cadbury's global business would be managed from britain. >> yooir making me hungry, ross. it's dr. doom no more. knew reeel roubini said that he no longer cared for his long running nickname. so following a poll on cnbc.com, we can reveal that the new suggested nickname with 25% of the vote is roubini the realist. dr. forget a lot, dr. no, dr. real came in second, third and fourth respectively. go to the website to see the other suggestions. what suggestion would you have, ross? >> i like dr. forget a lot. it appeals to my pison humor, i

think. dr. forget a time. >> we didn't know you had a high thon humor. i think another suggestion was dr. feel good and contrarion the barbarian. >> dr. feel good sounds like a mike myers character. >> if it's not forgetting a lot, ooet he's probably sleeping a lot, too. >> exactly. we'll take a short break. still to come, we'll wonder whether we're forgetting about retail sales in the euro zone. and andy hart will join us from quasar, as well. [ ellen ] hey! [ receptionist ] hey!

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welcome to "worldwide exchange." the headlines making news today, in the united states, investors will search for clues about friday's jobs report in today's data on private sector barrel. >> here in europe, the euro is rising on better than expected pmi data. but sterling is falling after uk figures were worse than forecast. >> and here in a issue ya, toyota continues to reel from falling sales and complaints while honda has its best quarter in 1 1/2 years.

>> you're watching cnbc's "worldwide exchange." we saw pmi come in better than expected earlier on. euro zone december retail sales, flat on the month. 0.0% minus 1.6% on the year. that is weaker than expected. we thought they would rise 0.4% on the month, minus 2.4% on the year. november retail sales revised to minus 0.5% on the month. so indicating with unemployment on the rise, consumer spending yet to provide any support. sales volume down in 2008, although we did look for a stagnation. probably won't quite as bad as exactly what we were looking for. andy hart is a market strategist at quasar. andy, the view from this is obviously we had a strong december, as well.

st view from this is doing look for support from the consumer any time soon. >> yes, that's right. clearly, the weather affects would have been somewhat progressive. recessing unemployment prompting rapidly rising savings ratios across europe, across the uk and in the united states. put all of that against a background of a total debt in the economies and these sorts of numbers are not surprising. i don't think top line growth is the story for this year. the story for this year is cost cutting. >> yeah. nonfood sales. nonfood sales down 0.2% on the month. where it rises is food and drink. >> what sustains is the greatest leads into the durable goods sector, as well. no one is making big commitments from personal through the private sector in terms of cap ex. >> andy is with us for the entire hour. two hours into trade, european stock markets are trying to

prove that we've had a good start to february. the ftse 100 is up 0.3%. the cac 40 is firmer at the moment. so that is a better start continuing. is it feeding into the u.s. futures, nicole? >> not so much right now. we are pretty flat on the futures coming after the best two-day gain in about four months, ross. the best performers yesterday, health care and industrials. we are looking pretty even on the dow right now. ism nonmanufacturing survey was going to be reported, closely watched after, of course, surprising jumps in ism manufacturing. christine. speaksing of data, let's get the boards out for you. 90.30, euro stronger against the dollar. euro zone retail sales planned. sterling, 1.609.

we got new pmi data. all this is being reflected in the markets right now. euro/sterling, 0.8744. >> thanks for that. andy is with us. we're going to hear from the european commission about the greek debt plan. andy, there's been so much focus over the last few weeks. we've recovered from euro/dollar at 1.38. is it a major concern for you or not, sovereign debt? >> sovereign debt is, absolutely. >> all of the so-called economies are running debt positions in the u.s. yeah, absolutely right. kraft debt is getting downgraded come cadbury's acquisition, but downgrades threatened across the uk, as well, for sovereign debt later on this year.

debt reduction is -- >> how are you supposed to -- if you're concerned about it, what are you doing and what are you not doing? >> one of the things you're looking at at the moment is the depressing effect of the quantitative easing program, keeping bond yields lower than they might otherwise be. it's going to be a massive policy constraint for both the u.s. and the united kingdom policymakers as to when they start pulling back on qe. if they get the timing wrong, yields start to rise massively. this is not a bond market. >> andy, this is nicole lapin in the united states. moody's came out saying that the u.s. budget is all well and good but the deficit is huge and the united states could even lose its aaa credit rating. now, it's unlikely to happen, but how significant is it that they're coming out and saying that? >> well, i think it's stating

the obvious to the other people. the emperor has got no clothes on that front. sovereign debt has been rising. morgan mckinley came out with data earlier last week and had that total debt across the u.s. economy now measured at 300% of gdp. by the way, the same number in the united kingdom, 400% of gdp. that's public debt as well as private sector debt. all of that has to get repaid sooner or later. by the way, within all of those numbers, bank leverage is pretty much back to average. so guess where the burden is going to fall? it's going to fall on the public sector, both in the united states and the united kingdom. it's going to fall in the household sector in those two territories, as well. so no surprise that those downgrades across the united states and the united kingdom. >> andy, until we get some clarity on how the picture is looking, how will it impact

foreign investor foreu.s. treasury? >> that's the thing. they're going to look carefully at the u.s. fed and what is being done at the u.s. fed. they're looking at the timing of the qe program. don't look at the interest rate policy. look at the qe program. as long as that stays in place, bond yields will be pretty much dpresd as no big shocks coming down the surprise for investors. the moment the qe program gets pulled, that's the opportunity again for downside risk on bonds. so yeah, that is a very cautious counter i think looking at the back end of this year. >> okay. andy, you're going to stick around. we'll delve into the u.s. bond markets coming out later on today. still to come, let's remind you of some of the other stories we're following. euro sector expanded in january.

meanwhile, here in the uk, just a little bit more disappointing. the market pmi number was 56.8 in december. it fell to 54.5 in january. well below forecasts. some of that probably was due to the fact that we have the fear, weather-affected economy particularly around the leisure and retail sector. so we may not react to that as much as you might have thought, nicole. >> all right. and we are looking at a couple of big headlines today in the united states. aig is set to pay out another round of bonuses today worth about $100 million. the payments go to current and former employees in aig's financial products unit. most of them recently agreed to take a 10% to 20% cut in their bones if they could get them a month earlier. and aig is still due to pay out tens of millions of dollars more in bonuses next month, mostly to former employees who didn't necessarily agree to those

concessions. bank of america has approved a pay for its investment bankers brokers. the wall street journal says that's about 19% of the $23 billion in revenue that the company made from those divisions. each employee will collect an average of $300,000 to $500,000. the fd reports that b of a wants to add up 2,000 more brokers this year, mostly in the united states. in frankfurt right now, b of a is slightly down about 0.8%. christine. >> nicole, honda has posted its biggest profit in six quarters and raised its annual forecast for the first time in six quarters. they posted aed 2 billion operating profit for the kwarter ending december. for the year ending in march, honda sees a profit of $3.5 billion. meanwhile, the carmaker is playing down the potential impact of toyota's recalls on its bottom line.

>> translator: as far as we are concerned, the recall has not affected us that much. in the context of confidence in japanese carmakers, we are a little worried because toyota has been the front-runner of japanese cars. but i can't say more until i take a look at the situation a little longer. >> honda shares are gaining 2.3% ahead of the results. 3,140 japanese yen. ross. >> the commission is getting ready to announce backup plans just in case. but does the greece government have the trust of the eu? we'll find out after this.

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on cnbc.com now, one strategist tells us investors just had to buy the cheapest nastiest stocks around. this year requires a more measured approach. and the chinese government lending clamp down begins as the bank of china raises mortgage rates. wall street waits for clarity on president obama's proposed banking curb. big banks are going to be in pain for most of this year according to some. all that and morning on cnbc.com.

ahead of the u.s. open, equities are a little firmer here. becky is here to tell us what is happening if london. >> at this stage, we are higher by just about 0.3%. we seem to be steady during that level now. we are watching a few stock else in particular. standard lies remains about the biggest gainer on the ftse. basically, it's an insurer. they came out with figures this morning. sales for 2009 down by 7%, but that was a much smaller decline than the markets had been expecting. so they beat on that front and that sending the shares higher. standard life is telling us the prospect for the domestic market here in the uk, but good wile the rest of europe looks a little difficult. on the downside, though, astrazeneca has been one of the underperformers today.

trading ex dividend today, also, there were the earnings from roche for a start. specific to this company, concerns after some comments from the analysts say that morgan stanley, there could be some negative data on the way from clinical trial results experimental bowel cancer drug, the company not commenting on that, but say they expect data later this year. patricia, how is it gorm in germany? up about 0.3%. m.a.n. and daimler are up, so the car folks are doing very well, indeed. m.a.n. is react to go scan ya that bw might be b interesting in getting that troublemaker together with scania earn one hood. interesting, of course, the talk in the market that there are some chip companies that might get fined for some price fixing. it did have a little bit of a reaction with our chip stocks

out here in germany. however, they are back up on their feet right now. infineon marginally down on the low side, flat lining a second ago. the entire chip sector, that is a deep down fall but now we're starting to level out a little bit with regard to infineon. good numbers coming through from exxon. that stock is up about 2.3%. over to switzerland. >> thanks a lot, that trisha. we're barely higher on the smi. roche is still one of the biggest decliners here, down by 178%. the company is missing expectations on the earnings per share level for 2009. also, a bit of disappointing sales. however, pharma sales were up 11%. also, a couple other positive take aways, the company is probodying a dividend of 6 francs for 2010. and the company said it is confirming the 2010 guidance for

double digit growth of earnings per share. moving on to some other stocks that we're watching, ubs haas has been the biggest gainer all morning long, up 3.5% after an upgrade coming from jpmorgan. credit suisse is higher by 0.8%. let's take a look at julius b r baer. that is under speculation. let's go to adam in singapore. >> thank you very much for that. well, it was a strong day for the asian markets here. let's talk about japan because it certainly was the focal point of the market today. we saw a pretty solid session coming out of the exporter stocks in japan, thanks to a weaker yen and also versus the u.s. dollar and the euro. honda coming out with stellar numbers after the market closed, smash ago analyst expectations and the automaker hiking their full year forecast for the third time to 320 billion yen

operating profits from 190. the automaker was higher during the trading day. but take a look at this stock when it does trade tomorrow. meanwhile, we'll be waiting for the numbers from the big one, that's honda, and the shareholder expanding on the recall. and the auto sales for the month of january didn't stock up too well for toyota losing 16% and their market share dwindling to 14.5% for the month of december. now back to the u.s. with nicole. good morning. >> good morning. thanks, adam. coming up, will the u.s. have to say good-bye to its aaa raiding? moody's is warning that the government better take steps to curb the deficit if it wants to maintain its top status.

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welcome back to "worldwide exchange." it is just after 5:20 in the morning. in new york, you're looking at a beautiful picture of the manhattan skyline where it is the second week, actually, of restaurant week. 260 restaurants participate in this and you can basically get a sampling from each. let's get a sampling of how the u.s. markets are likely to open

on this wednesday. the dow has narrowed in terms of futures just over the last hour or so, about 4:00 a.m. it was down about 20 below fair value. but we're coming off, of course, the best two-day gain in four months. and here is what we're looking forward to for today in the i'd. oouts investors are getting three reports, the first of three reports, actually, this week on the labor market. the january adp report which measures private sector jobs is out at 8:15 new york time. forecasts call for a loss of 30,000 such jobs last month. at 10:00 a.m., january ism services index will be released. analysts are looking for a reading of 51. that is up more than a point from december. any number above 50 denotes growth in that sector. and timothy geithner is talking to the house ways and means committee at 10:00 a.m. about president obama's budget plan. the oouts inventory data is due

out about 0:0 in the morning. the dow jones survey is calling for gasoline to remain unchanged, gasoline to rise by 1 million barrels and distillates to fall by 800,000 barrels. fed governor kevin warsh will speak about regulatory reform about 1:00 p.m. we'll hear from pfizer, comcast, time warner, international paper and pole low raffle lauren before the closing bell. christine, i know i'm making you hungry. >> you are, indeed. and i know what? i love kfc. so you're right, i'm starting to get hungry. toyota continues to be in focus. toyota says its north america and japanese dealers have received several complaints about the brakes on the prius hybrid.

people have experienced difficulty when driving over bumpy or icy roads. there were no accidents related to the matter. toyota will be sending checks in its dealers in the u.s. to help fix faulty profiles. there was a 6/0% drop in sales in january. nicole, back to you. >> also in the i'd, aig is expected to pay bonuses worth about $100 million. most of the employees recently agreed to take a 10% to 20% cut in their bonuses in they could receive them a month early. aig is due to pay out millions in bonuses next month to employees who didn't agree to those concessions. >> nicole, the european commission is going to, today, snap signal its approval to the

command to. last week, the greek prime minister including a hike in feel taxes. greece has promise to bring its debt to gdp ratio to 2% by 2013. it's a tough job, though, because it almost stands at the moment around 13%. that of course has been weighing on the euro zone. it's been weighing on the spread between greek debt and the bund level. this is where treasuries stand ahead of all the u.s. data we com got coming out today. the yield is tick up 3.66%. ten-year bund yield is ticking higher, 3.23%. andy hartwill is still with us. we focus very much on the i-370

b. if we go good data, will really respect to it positively, or not? >> no, i don't think so. it seems that the lows in 2009, who would have thought that. and the yield depression between equity and bonds has been 10%. equity yeeltdz within earnings yields, 10% points higher than backhand yields. quite remarkable. we're anticipating this kind of recovery. it's weak as far as we go. only until we get data are we likely to see any positive reaction on these sort of data woints. >> as we withdraw liquidity to this part of the air, what happens? is the weak economy going to make them a buy, you know, halfway through 2 year. >> make your mind up time around

the middle of the year. you have the inflation trend lines somewhat 306. i wouldn't get overexcited about it, but they're somewhat positive. high, very high levels of public sector debt. bond yields rise should all else being equal on that. the risk of the double dip, i think, kind of puts a natural lid on that. but the key point will be the credibility of the united states as in greece of deaf sigz reduction plans. >> andy, this is nicole in the i'd. some think taxes will go up to pay down the he did sit. i don't know if you have a crystal ball over there or if ross is perhaps hiding it for you, but when will that benefit treasury? >> well, as soon as you see the reality of, you know, tough measures being taken, that's all very well for the bond owner and others in the administration teg

us that they face a special. it's not just the health care bill, but also the opportunities to take hard, decisive action deficits. fravnl, you do a quick calculation. they they approved around about 7%, if they imposed that for four years, the balance of this term and into it a bit more, then i calculate you'd get the deficit down to about 3% of gdp. not bad. how likely is that, a federal level v.a.t.? i think very small. >> yeah. try getting that through congress. >> exactly. >> that is a task that we're all going to -- >> that's the measure of the problem, yeah. >> and we will, of course, continue to keep you with us, if you don't mind staying a along. andy hartwill, strategies.

stay with us. in the meantime, let us know what you think. will the volcker rules help curb excessive risk or are they just political of the posturing from the obama administration? e-mail us your thoughts, worldwide@cnbc.com.

the dow around fairlue, just about an hour ago, it was down below 20 points below fair value. this is coming after the best two-day gain in four months. we are watching four our ism number coming out today. perhaps we can see momentum from what you guy just saw three days ago. >> you've been with us three days, nicole, and we have yet to have a down day here in europe. i don't know if the two are connected, but it is a fact. the ftse 100 up 0.2%. autos, basic resources, construction slightly firmer. we have some weakness at the moment, financial services, travel and leisure and health care. what about the currencies? christine has got those. >> i do, indeed, ross. as far as the dollar is concerned, looking pretty mixed so far against all the other currencies. dollar/yen, 90.37.

euro, of course, with some data coming out. we had the euro zone pmi data. we are seeing a spike as a result of that. sterling had some data coming out from the uk where uk pmi data, as we1.599 against the dollar. euro/sterling, 0.8753. nicole. >> christine, joining us now is steve weebl. and still with us is our guest host, handy hartwill. steve, we have seen a break in recent patterns reporting better than expected earnings then selling on that news. monday, we saw exxon, though, and then dr horton on tuesday. people are buying on the news. what is going on? can you make some sense of this for me? >> yeah. as you say, nicole, so far it's been kind of interesting. and up until the last couple of days, we've seen some good earnings reports.

i think the policy surprise ratio was 80/20 or close to that and yet the market had been dominated by patchy macro data and that's been weighing on the stocks. we were greatly encouraged by market action yesterday where the market was up and was late by some of the morning's corporate earnings reports. emerson came through with good numbers as did dl horton and those stocks were up strongly on the back of it. so what we're hoping for from here on in is that microdoes dominate. even though the fourth quarter was strong, rates are still on hold, people have been poking some holes in that saying it's an inventory restock and we're starting to put that together and the market after this very strong rally, it looks like it's taking a bit of a breather and maybe a pullback. >> so with some of that strong data that you just mentioned,

are you seeing more groekt on the cost side, not necessarily the demand side or are you trying to look through a lot of this headline data to see if the u.s. consumer is coming back? >> well, that's right. i think what took the market higher is what we did see from the demand industrials is that the demand cycle was coming back. that was driven by companies managing to keep costs well under control and one of the key costs of being controlling has been their wage costs. that's why we had high unemployment and that's why we're not seeing the consumer pick up yet. and the market has been skeptical of the sustainability in this rally. but yesterday, we saw with comments and with emerson, the industrial demand. looks a little stronger within. within emerson, we saw air-conditioning demand in the u.s. was strong and that's quite a good read for economic activity across the market. but we're still in this sort of slight twilight zone. we don't know whether this is inventory restocking or whether this is ignition of demand.

we'll be looking for more of the consumer orientated names to give us the steel on that. but at the moment, until unemployment comes down, we're unlikely to see that this morning. there will still be skepticism that this is a self-sustaining rally. >> steven, hi. it's andy over here in the studio. i want to pick up on the phrase that you used, the twilight zone, i agree with you completely. from where you sit right now, is the portfolio buyers more defensive or are you still running aggressively cyclical positions? >> i would say that we are running cyclical, but not aggressi aggressive. we are farply aggressive through most of that last year and part of that was on the back of -- you know, we knew the policymakers were behind the market. the reflationary stimulating policy was a strong tailwind for the market. we're starting to see that come off. we know there's some concerns about how the u.s. addresses the

fiscal deficit. we know china is maybe touching the brakes a little bit. and on the back of that we're less cyclical. we think yield are sustainable. but we still witness a recovery is taking hold. we still think that the market will be able to get itself going as policy comes off. and to be honest with you, some of the last few days, we'll pick up some of the cyclicals that we favor. we think that is a name that is genuinely tight. we're more concerned about things like free copper price right now. but yes, we are -- we're sort of selectively picking up cyclicals where we think the end markets are actually positioned. >> and is there, within that cyclical more towards domestic counters, domestic u.s. consumer related or are you still

basically export driven? >> yeah. i would say probably more of an export buy just now. we think there are some decent valuations still in consumer world. but, you know, we're still concerned about u.s. retail. unemployment is remaining stub bornly high. every company we talked to just now is the ones reporting good earns are very cautious about adding jobs. even some of the headline data we have seen, such as growth, is being driven by private sector wealth and labor strength. we stay cautious there. we think ultimately that sector will take hold, but we're not seeing it yet. >> hey, steve, our previous guest, douglas isles, a says china is not playing an

increasingly larger role when the comes to influencing investors. are you concerned about the tightening we're seeing in the mainland? >> we're quite concerned. douglas is a good friend of mine. he's a lot closer now to what's happening in asia than i am. clearly, the whole world is watching what's happening with chinese policy. that has been accommodating and stimulating. whenever we see chinese authorities getting concerned about potential overheating, clearly, the markets do take fright. ultimately, we think trading growth will be strong in china, but there will be some ebbs and flows and right now maybe they are pulling back on some of the strength in the economy. they don't want things to get too overheated. >> steve, we are all about bringing good friends together.

steve weeple, head of general investments and his good friend, andy hartwill from za sar. both of you stay with us. after the break, we will discuss newscorp reports a strong quarter and that is not even including most of avatar's $1.9 billion in box office sales. find out what is behind newscorp's profits right after the break.

welcome to cnbc's "worldwide exchange." here are some of the top stories we're watching from around the world. in the united states, the s.e.c. is asking paulson and company for information about complex securities at the heart of the financial crisis. the hedge fund firm profited by the subprime crisis by shorting ceos. the s.e.c. subpoenaed several firms. paulson isn't the target, necessarily, of the probe which is examining whether or not banks shorted cdos at the same time that they were selling them to investors. and newscorp swung to a big profit in its second quarter. media companies have benefited in recent months ago marketers resume spending on tv

commercials which particularly helped local stations. newscorp owns 27 fox affiliates. x-men ice age films lifted the company's studios. newscorp will see a bulk of avatar's box office impacts, though, in this quarter. news corporate is trading up about 6% or 7%. ross, i'm probably the only person on the planet who hasn't seen avatar yet. >> i haven't. we can see it together. >> two people! okay. there you go. >> you sit in your house and i'll sit in london and we'll text each other, right? that's how we'll do it. exactly. >> pmi in the euro zone came in at a slower pace than the previous month, but the euro ticked hard because the pmi was still better than previously forecasted. in the uk, slightly different story. more disappointing. the fixed market number down from 86 to 84.5.

the sterling lost any zip it had against the dollar on that. christine, have you seen it? >> i have. i have seen avatar, ross. and i was just about to say, should i tell you and nicole the ending? >> i don't know the story. >> i could tell you the ending. >> go ahead. >> but you know what? i'm not going to ruin it for you. but it is a long movie and, you know, you should rm enjoy it. >> does the 3-d work? is that what it's all about? >> you have to wear these glasses. and, you know, i had a massive headache just coming out from the movie, seriously. it was totally out of this world. but you know, it's definitely worth watching. >> there we go. >> well, we are watching here in asia toyota. toyota motors says its north america and yap niece dealers have received several blaings complaints about the brakes on the hybrid prius.

customers have had difficulty when trying to use the brakes. there was no accidents related to the matter. separately, the wall street journal reports people will be sending checks to its dealers of fixing 40 gas pedals. toyota is at 3,400 japanese yen. honda has raised its annual forecast for the third time thanks to a recovery in global sales and the weaker yen, japan's number two carmaker posted a $2 billion operating profit for the year ending in december. for march, honda sees a profit. meanwhile, toyota is downgrading the recall.

>> reporter: as far as we are concerned, the recall has not affected us that much. in the context of confidence in japanese carmakers, we are worried because toyota has been the front-runner of japanese cars. but i can't say more until i take a look at the situation longer. >> and toyota shares, meanwhile, gaining 2.3% ahead of the results, 3,140 japanese yen. ross. >> final thought from andy hartwill, market strategist from quay czar. andy, what do we do for ee emergency can markets right somehow? >>. you take the household consumption expenditures across the brick policies. i heckon they're going to double their share by 2013. it's as easy as that. >> in house hold sxentd

temperatures in 2011, that is where we look for growth. >> we've seen a bit of a falloff in the chinese markets. >> i think that's right. they've had an extreme surge through 2009. safer to play those through companies with exposure into those territories, rather than operating from there or quoted locally there. >> good to see you, andy. thanks for that. andy hartwill from quasar. good morning, ross. we'll get challenger grand christmas at 7:30. then at 8:00 p.m. eastern time, adp for january. we'll get the numbers and instant analysis. pfizer is expected in the next hour. we will check out which drug

compani companies. also, we'll cover the bank secretary. and the latest bonus backlash, we are talking about folks at aig and their bonuses. that's going to raise some hite heat today. we'll start the conversation at the tomt top of the hour. >> carl, we look forward to that. plenty to get through today. >> yes. >> now, let's get through today and we're going to try and continue to make our way through the adp jobs report due out later today. we're going to try and get a preview on that and everything else you can expect ahead for today's tradeling day.

and dr. doom, nouriel roubini said he no longer cared for his nickname. so a new nickname has been

assigned, ruboubini the realist. go to the website and check it out. see some of the other suggestions. >> i like dr. forget a lot. that sounds good to me. >> we've had comments out from mr. almudia from the european union. he says greece creates problems for the union tear monetary union but he appreciates their ambitious direct ir. they're trying to get the gdp deficit down from 13% to 3%. they share the ambitious target to cut the budget deficit. there's been a lot of freting, nicole. >> it's fret a lot. i like that one, as well. here in the united states, investors are looking for the first of three reports this week on the labor market. the january adp report, which, of course, measures private sector jobs is out at 8:15 mshg

time. the forecasts call for a loss of 30,000 jobs last month. at 10:00 this morning, the january ism services index will be released. analysts are looking for a reading of 51. any number, of course, above 50 denotes growth in that sector. let's bring back steve weeple, head of u.s. securities at standard life investments for a couple of quick thoughts before the markets open. moody's report, i'm sure you saw this. it was out on the u.s. budget deficit. they're talking about a threat to u.s. aaa credit rating. are they just stating the obvious? >> yes, i think they are stating the obvious. we know that the budget deficit is a problem here. we know how the authorities are dealing with it. there has to be a concern, but i think the concern now is how the authorities deal with it over the next few years, whether that is a cap and growth, whether tax rates have to go up, whether government spending comes back significantly. so over the longer term, i think it may be an issue in terms of

the trajectory of the growth. i don't think anyone is under any illusions that the government finances are in anything other than a shaky state. >> speaking of waulg, a lot of news out of washington hearings. volcker rules. obama stated the union. is that still dictating market sentiment? >> sorry, i missed that, nicole. can you repeat that? >> do you think washington is still dictating market sentiment? >> yes. well, clearly, over the last couple of weeks, we've had lots of uncertainty in the equity market on the back of the volcker rule. bajs came off sharply. and i think what's happened maybe a number of times now is that washington has come out from announcements and hasn't necessarily put too much flesh in the bones in terms of details. and the markets like to fret over what this might mean, how severe it might be, over what time frame it will take hold, and that uncertainty isn't great for equity markets, especially when it affects big sectors like

financials or health care. on top of that, we have got questions about the budgets, we've got questions about defense budget. so yes, i think washington is definitely a cap on equity market enthusiasm right now. the microreports are trying to support things on the other side, but we have got that push and pull of policy and microearnings. >> steve, though, where are we getting real revenue growth? >> it's still pretty patchy. we are -- i guess we're seeing some growth out of the emerging markets, as andy hartwill talked about earlier. the emergeling markets are still pretty running along on reasonable cylinders. the imports in the emerging markets is driving exports at a good clip. we saw from emerson yesterday that there are areas of industrial demand and maybe

things like data centers, air-conditioning, and some of that does come through with corporate cap ex. but we're industrial struggling a little bit. steve, thank you so very much. we appreciate you being with us. >> thank you very much. >> and that's all for "worldwide exchange." right now 1.2 million people are on sprint mobile broadband. 31 are streaming a sales conference from the road. 154 are tracking shipments on a train.

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good morning. bonus watch from aig to bank of america, washington to wall street. news of payouts. and i guess outrage this morning. good work if you can get it. two major employment reports set to hit the tape today before the opening bell rings. u.s. equity futures are bit below fair value this morning as "squawk box" begins right now.

good wednesday morning. welcome to squawk here on cnbc. i'm carl quintanilla along with joe kernen. becky is off today. lots happening this morning. jobs and the economy, two key releases out today ahead of friday's government employment report. 597:30 eastern time, john challenger will release job cuts numbers live. then at 8:15 eastern time, the adp employment report polled economists expect a drop of 30,000 private sector jobs last month. macroeconomic advisories joel praken will break the news to us. then looking ahead to friday, forecasters predict that non farm payrolls were unchanged in january. remember we saw a worse than expected drop in earnings in december. time warner is releasing an

adjusted share, 55 cents, and a 51 cent number from continuing operations and the estimate on first call at this point is 49 cents. 49 cents. so either number is slightly above expectations. the regular quarterly dividend is being boosted and i wonder if we're ever going to get into a period where we start seeing that again, where you start to see companies boosting payouts again. quarterly dividend at 0.2125. the old dividend was 75 cents for a full year. so four times 21, you're talking about -- what is that, 85 cents? >> yeah. a lot of people think that this will be one of the big dynamics for the year. >> it's yielding 2.6% from where it was. that's up 14% or so. they're calling it strong results for 2009 and for the fourth