hello, everybody. welcome officially here to "worldwide exchange." i want to take you through some data that's just hitting the wires, first of all, before we do anything else. and glance at the euro zone pmi sfirgs hitting the wires. euro zone factory cpi at its best since 2006. we're seeing services picking up of 53.7. the forecast was for 52 even. that's better than anticipated, the highest since november 2007. we're getting news here on the flash manufacturing pmi higher

than anticipated for the euro zone 3756.3. ifo is hitting the wires. march german business climate index, patricia, the data? >> stronger than expected. >> and welcome, by the way. >> thank you. it is stronger than expected. we did expect an increase. last month was the first drop in ifo in 11 months. german business climate index, 98.1. here, the consensus was 95.8, so stronger. and also the current conditions at 94.4 is much stronger than expected at 91 points from the market expectations. and the revisions, there are no revisions as february. so it was as bleak as we did see it. it is all in all, very positive news, indeed. fold that in with the earlier pmi data we had from germany, better than expected. in there, we had another expansion. >> which is key, because

services accounts for such a big part of the economy. but unless we get manufacturing rolling, we're not going to get it rolling underneath. let's introduce our guest who is joining us here on the desk. chris william son is chief economist at markets and our guest host today is julian pendock who is with us in the sdooud studio, as well. chris, let's get your reaction to the ifo data and the euro zone pmi data. >> both surveys showing a similar thing, stronger than analysts were expecting. but what you have to put this in context with is it was january and february with adverse weather that hit us. so you're seeing a bounceback. it was far more normal in terms of weather conditions in the last four weeks. so where was up the ward with momentum being hit in february? so that's where they are.

manufacturing and export-led trade is booming. >> exports is a really good key word here, because even though we had a very big strength in exports, the latest data we saw was about one year, the one year in february. how does that come about? is that only based on the weather and we expect that will change? >> we expect so. official trade figures, export figures in february and january and we think that's the weather disrupting the actual deliveries. but underlying orders are strong and gathering momentum. >> julian, how close do you follow the euro zone daent data at the moment? >> yeah. i mean, i would agree with chris, it's quite noisy, offset by various things, weather and if you have a look at other parts of the world. chinese data is always upset by the chinese new year. it tallies by what we're seeing in some selective countries.

the auto books are strong and the visibility is quite good, but i think, again, you have to be selective and secondly, we know that, you know, at the moment, as inventory rebuilds going forward and the west has not yet felt the pain, we've had the stimulus shot in the arm, government spending has only started to be cut in the west and i think there's more pain to be come. one has to be worried about extrapolating this forward and seeing ever higher numbers coming forward. >> chris, are you surprised by, i guess, the -- let me reword that. the confidence we've seen out of germany has been quite good, quite strong, all things considered with regard to greece for what's taking place. do you think that business, are they able to come and dismiss themselves with germany's overall role or will it be a direct impact on the german operating environment? >> i think what the data are showing is that this expansion is very little to do with what is happening in the euro area. it's a global trade pick up in

germany as either the first or second. the largest exporter in the world is benefiting from that. you look at the french numbers today, their exports are booming. the service sector was growing at a slower pace. in germany, the service sector remains pretty mundane. what that is reflecting is high unemployment and weak confidence amongst consumers, households, and of the euro situation and it's being hit further by the problems in greece and the upset there. >> chris, thank you very much for being with us. chris lance, chief economist from for markets and thank you so much, patricia, for helping us with that data. let's talk about our european markets and what we're looking at here one hour or so into trade in europe. we're seeing our european markets are higher across the board. basic resources, financial services as well as some of the travel stocks out there.

briefly on the down side, retail, chemicals and some utilities coming off just a bit. christine, how are you and how is asia? >> asia is doing well today, creeping higher. but we are focusing as far as the currencies are concerned. dollar/yen right now hovering around 90.0. the dollar, of course, being kept on watch. a lot of data is coming out of the u.s. today. the euro continues to be weaker against the dollar. lots of concerns there about greece's fiscal situation, a lot of people are cautious about whether the euro zone can fix the position. sterling is weaker against the dollar. but of course, a lot of data coming from your neck of the woods. nicole. >> indeed, christine. we have durable goods, more housing data today. great to see you on "worldwide exchange" just after 5:00 in the morning. on wall street, welcome to the start of your global trading day. dow futures are down about 16 below fair value right now.

this is after what we're calling a stealth rally. we're trying to figure out what is behind the stealth rally with the dow hitting the best day bump since march 5th. s&p 500 up to 1,174. that is the best close since september 25th of 2008. we're going to dig into u.s./signo relations. the house ways and means committee is holding a hearing into the foreign trade policy. this comes ahead of next month's report that could labeling china as a currency manipulator. >> china's vice commerce minister is in washington today for talks with treasury, commerce and the u.s. trade rep's office. let's check back in with our guest host, julian pendock, who stays with us. julian, let's say that the yuan is revalued.

you say be careful what you wish for? >> well, yes, in the sense that i don't think overnight the yuan, renminbi, whatever, strengthening would make the u.s. more competitive in xas comparison with china. when you look at industrialized wages, certainly, it's more comfortable with unionized jobs in the u.s., wages are 40 times higher than they are in china. that is not really going to change the terms of the trade. and on the other hand, a lot of wall mark, remember a lot of the chinese factories, pretty much the u.s. companies have outsourced to china over the last however many years and they'll still ro have to buy the goods that come in from china and immediately you'll have inflation on the shelves hit the wallets of u.s. shoppers. and where the u.s. shoppers are buying essentials, that's almost inflationary in the sense that they can't get around from

having to pay those higher prices. it's quite difficult to separate this from all the politics surrounding it. i would also say that china -- there's a lot of skepticism about veracity and accuracy of their numbers. if china wants to show they have a trade deficit, they can show it and what would the u.s. be able to do about that? they could hardly second guess the figures. i would be very interested to see what the next trade figures of china look like. >> u.s. investors are interested to see developments on a couple of fronts right now in terms of u.s.-sino relations. what do you think is more important for the u.s. investor to trying and figure out what it's like to do business in china? >> one has to be cautious. you see increasing signs that, you know, when times are not so good for china, there's quite a high profile in the "wall street journal" with a lot of chief expectants, many of whom didn't

want to go on the record a week or so ago saying it is more difficult in china, chinese kchs becoming more protectionist and tariff entry versus nontariff, if you like, secondly, the google case getting headlines as is the rio case. but there is a case that there were a couple of examples in yesterday's press which caught my attention. that is that within china, not just foreign doing business there, but major shareholders of private airlines being arrested and detained on various economic crimes and basically given quite a rough treatment because the chinese safe airlines wanted to buy their stake. so i think one has to tread carefully on a bit like russia, drawn by companies that are not going to upset companies within china with political connections or somehow, you know, the share prices have to reflect high equity risk premium for its

increasing uncertainty both domestically and on the international stage with the u.s. >> right. julian pendock, stay with us. i know christine wants to jump in on both of those issues, partner at fenhouse capital. meanwhile, all eyes are on westminster today where the chancellor will unveil the budget just weeks before the general election. >> reporter: that's right. alistair darling with walk a tight rope. can he deliver for his boss, the voters and the all-important financial markets? we'll discuss it ahead on "worldwide exchange."

hello, everybody. welcome back. in the uk, chancellor darling is preparing to release his final budget before the general elections. with the deficit in focus, he has promised so far no generous giveaways, but is likely to say that it's the budget to invest in britain's industrial future. he's going to forward a global tax on banks now as shown before the break, steve sedgwick is outside of westminster for more on what we can anticipate today. steve, no change in most of the things that they've laid out in the prebudget report, apart from maybe a couple of small surprises here and there snm. >> yeah. they're politicians.

they can't help themselves and it's only six weeks before an election. we may see extending the threshold where no one pays on it. past delaying prices. but by and large, he has very little room for maneuver. 170 billion pounds worth of net borrowing is the good figure. so he has a little bit more money to spend, but he has to mind what the markets think, as well. bearing in mind, he has to raise between 170 and perhaps as high at 190 billion pounds next year and beyond. clearly, he can't upset the guilty investors and go too far with the spending, especially when we know spending cuts have to come later on after the election no matter who wins, lou. >> julian, i want to get your thoughts on this, 170 billion pounds deficit currently. the question is, what type of measures we're going to hear

today as steve says as he indicates we're balancing this tight rope with this election coming up. >> sure. first of all, these numbers are catastrophic, whenever way you look at them. secondly, i think people are getting confused. harboring the deficit, a lot of people are forgetting they're going to carry on more and more. the national debt is continuing to build up. so all this talk about giveaways or windfall taxes from banks and, therefore, having spending head room and can chuck a little bit of money at this and that is the economics of the mad house. >> julian, the fact remains, though, that this is better than some had expected. the economics of the mad house may be, but whether it's conservative, a hung parliament or the labor party, the economics are going to be similar and the austerity has to be very similar, whether they start right after the elections or delay it somewhat as labor wants. the delays have to happen to see that the uk is put on stronger

economic footing. given the fact that the inflation figures were better, given the fact that net borrowing is down more than expected and the fact that the economy appears to be growing longer trajectory especially in 2010, the fact remains, things are slightly better. i know it's not in your nature to be optimistic, but they are slightly better than you had previously thought. >> steve, i think that's a bit unfair, but i take the point that it's not as bad as the worst case scenario. but as you pointed out, then the governments have to get real and tackle the government spending. if you take, for example, in the uk that the government accounts for about 50% of gdp, the government has this percentage of gdp, british airways, british steel and all the nationalized industries make up part of the government expenditure. so you have to wonder where all the money is gone, really. and secondly, yeah, you could also say that the gilt markets,

a lot has been priced in. so i'm not that bearish in terms of the gilt markets, given if you look at the 10-year gilts, italy is worse than greece, etcetera. so losing the aaa rating is overdone. and if you have a look at canada's and japanese bund yields of today lost their aaa crown, yields continue to decline for years after. but i would say, however, that in terms of economic growth, you know, take out 5% of takeout 10% to 50%, that's 5% of gdp that has too be mruld plugged by the sector. >> julian, we'll come back and talk more about these issues. steve, thank you very much. wooep we'll come back and revisit with you throughout the entire day. write in and tell us what you see as being dire about the economy as of now. the largest ever pralgz

against insider dealing in the uk has sent shock waves through the city of london and banks around europe. the british financial watchdog, the financial services authority or the fsa has raided the london headquarters of deutsche bank and bnp peraribasparibas. the raids involved more than 140 fsa officers and 16 residential and commercial locations. they led to the arrests of six people and the seizure of documents, as well. the fsa suspects that the people were involved in a, quote, sophisticated and long running insider trading ring, nicole. >> the san francisco fed president janet yellen says with unemployment high, the fed is no no hurry to raise interest rates. there may be a bump in the jobs market, but only expects unemployment to be at 8% by the end of the year.

>> when the time has come, am i going to support raising interest rates? you bet. i don't want to see inflation kick up and we have to take the punch bowl away. >> yellen says that she's open to serving as fed vice chairman if asked by the president. the white house said last month that she's a leading candidate to replace done al kahn who is retiring in june. christine. >> nicole, the three-day rio tinto trial in shanghai has come to an end, even though it could take some time before a verdict is released. so far only one of them is pleading guilty to stealing

secrets. rio tinto shares gaining 2% in sydn sydney. in london, they are currently up 0.78%. still much more to come. german daimler is in trouble with the u.s. find out why after the break.

welcome back to "worldwide exchange." it is 5:23 on the east coast of the united states. you're looking at a dazzling sight of times square, reminding me of the dazzling sight on the stock mblth yesterday as stocks rallied with all three major indexes ending at 18-month high webs following the release of an existing home sales report that was better than expected. but today, markets are likely to open slightly lower with dow futures down about 11 below fair value. of course, u.s. investors do get a pair of economic reports today. february durable goods out at 8:30 in the morning new york time. demand for big ticket items, forecast to rise 0.7%. 10:00 in the morning, february new home sales will be released, expected to jump nearly 2% at an annual rate of 315,000 homes. the weekly u.s. inventory data is due out at 10:30 new york time. a dow jones survey calls for a build of 1.4 million barrels of oil but a drop of 1.3 million

barrels of gasoline and 600,000 drop in distillates. done all kohn will be speaking at davidson university, north carolina, at 8:00 p.m. after the close, we hear from paychex, red hat and cke restaurants, the parent of hardee's and karl's jr. lou. >> thank you. we need to round up our equity markets, the ones trading now in europe and briefly glancing at the ftse 100. we're seeing likes of thomas cook trading up travel, leisure group by sbc, lloyd's banking group is one of the main gainers. and m.a.n. group is down after posting fallen assets. let's talk, though, about the german markets. kicking off to patricia, what is going on in germany today?

>> today is a lot of ifo on the index. really good news. it seems that the businesses are feeling a little bit more perky about the outlook as well as the current conditions. so all in all, beating expectations climate in 98.1. business current conditions, 94.4, much better than the 91 expecteded. and also the expectations are still very firm. if you look at what the ifo institute had to say today, first of all, they recommend the ecb to keep the level of the interest rates level, i.e., at the same level they are right now, plus where they do not see any firming of inflation. so all in all, very positive news. also by the way, on the pmi. apart from that, the market is trading higher on good volume. up 0.3%. now over to paris with stephane. hi there. >> hi, patricia in paris. eads is trading higher. despite the ruling from the

world trade organization to stop illegal subsidies to airbus, the document is still confidential. but according to a source familiar with the ruling, europe will have to stop from of its financial support to airbus within 90 days, including part of its financing for the airbus 380. airbus confirmed that the world trade organization found some subsidies but say that it rejected 70% of the u.s. claims from the european union, says that the decision is only a part of the parcel and that it's too early to claim victory. the wto is due to rule by tend june on another part of the fight between airbus and boeing. christine, back to you in singapore. >> this is how the session is looking in area. take a look at the nikkei 225. up 0.4% after hitting a two-month high earlier on in the

session. we had shares of nintendo soaring after they said it has plans to launch a new model of its handheld that will allow users to play the game without use of special glasses. in the greater china region, this is how the picture is looking. shanghai composite hang seng major yeaally higher, both adding 0.1%. financials actively traded following better than expected results from bank of china on tuesday. that is giving a boost to financial shares. down in australia, the s&p 200/asx closed at a two-month high. on that note, let me wrap up your global stock watch. louisa. >> yes. coming up here on "worldwide exchange," our next guest believes that the stock market rally is running out of steam and is in the later stages. we'll discuss strategy after the break. what do you think? write in and let's your thoughts

be heard.

welcome to "worldwide exchange" a top fed official says there's no rush to raise rates as unemployment stays high. >> germany's ifo index surges to a 21-month high, beating analyst forecasts. >> and here in asia, china's vice minister visits washington amid tensions over beijing staples and policy. >> great to have you with us here on "worldwide exchange." it is 5:30 in the morning on the east coast of the united states. markets are slated to point lower, slightly, akrod cross the board, waiting for new housing numbers out this morning. the mblths are likely to open lower if we could pull up the futures board. about 15 below fair value right

now on the dow. s&p futures are about two below fair value. how is europe die guestsing the europe and ifo numbers? >> kind of seeing a little bit of buying this morning, although i hasten to add a little bit, flat to slightly higher. in the uk, we're all waiting for the budget. alistair darling's last budget before the general election in a couple of weeks. hugely important to see how he balances the austerity measures put in place in the uk to rairn in the deficit with growth, of course. that's one thing in the uk. we're looking at the buying in some of the bigger basic resource companies, the financial services stocks, some of the travel stocks, as well. christine, how are the cross rates mixing into this? >> dollar/yen seems to be holding stable around the 90 level. but you know what? the euro zone, we did get better than expected ifo numbers and pmi numbers, but that is not having any impact on the euro right now. still lower, 0.8% against the dollar. why? because of all these concerns about greece, the debt situation

there. sterling, like you mentioned, louisa, we are watching the uk budget. and euro/sterling at 89.37. nicole. >> christine, san francisco fed president janet yellen says with unemployment high and inflation low, the fed is in no hurry to raise interest rates. speaking in tlaengz, yellen says there may be a bump in the stock market in the coming months. she expects unemployment to drop by 8% next year. yellen disputes the notion that she's the most dovish member of the fed and more concerned with economic growth and keeping inflation at bay. >> when the time comes, am i going to support raising interest rates? you bet. i don't want to see us have to take the punch bowl away. >> joining us now is bill

fresillo. still with us, julian pendock. bill, i want to start with you. is the market slated to go higher, in your opinion, or is there still more room to grow? >> yeah, i think in the short-term. look, we've had a target of 1,100 to 1150 in the s&p for months. i talked about that before we even hit 1,000. we're there now. now we're trading above 1150. that said, the short-term momentum is still bullish. we had our clients looking to move from 1200 to 1250. i think in the short-term, there's room to move here on the upside. the march rally is probably winding down now, whether it's here, 1200 or 1250. and then once that happens, you're more than likely to be much more in a two-way range trade where the upper end of the range is 1200, 1250. fair value comes in at around

1,000, 1050. so if you're somebody with a longer term time arising, six months to a year, we think you should be taking advantage of this rally to begin to pair back your equity exposure. >> and how do you take advantage of this rally, though? this is christine here, by the way. >> well, i think what we did with our clients in the shorter term was basically, i think it's pretty straightforward. we had the buy in front of 1150 in the s&p. so far, that's worked well. we'll take profit around 1150, 200, maybe catch the ride to 1250. but if you're telling me from a bigger picture standpoint, we're going to maybe it stand higher, i think what you're saying is with the economic improvements we've seen, they're going to evolve into an economic recovery. you have to put this move in the context of the fact that we've already rallied 70 plus percent. if you think we're going to make another move higher from here, i

think we have to see the private sector, not just in the u.s., but around the world be able to stand on its own two feet. and that's not the case right now. >> bill, it's louisa in london. i hear what you're saying. i want to bring julian into this, as well. what worries me about this, we're at 18 months highs or whatever, the volumes. the volumes aren't there. the volumes aren't backing up. >> they're not. the volumes have been missing. i'm a fundamental investor rather than a trader or a charter from what i understand, that means that the rally is more -- is less stable than if it was backed up by real volumes and real directions and, therefore, can correct far more easily and far more quickly. if you have a look at the big picture out there, i agree with bill, the economy is not yet globally certainly in the west and certainly in china self-sustaining, it's more built on government borrowing and the markets are complacent. if you have a look at the s&p 500, the cyclely adjusted pe

ratios are 21 times, that's above the long-term average. the vix is down to 16, which i know there's a lot of debate about what this means, but they're suggesting a degree of complacency. to do speculative money, the amount of speculative long positions in nymex crude are now back up to the levels they were in 2007. and if you want something to worry about, some of the 2007 people said subprime will be a contained issue. it wouldn't really affect the rest of the markets. people are saying now the same about greek national debt and southern european debt. so yeah, there's quite a lot built into these markets and quite a lot that could go wrong. so i would be cautionus. i agree with bill. >> a area ago, late spring/summer, we were bullish. the you had the wind at your back in every respect. there was nowhere to go except up with the economic data and earnings data and we had liquidity pumps primed around

the world. every central bank was printing money, you know, 24 hours a day. you fast forward to where we are now, the markets have rallied, 60%, 70%, 80% depending spon upon where you are in the world. we're up a significant amount. the markets are no longer cheap. in terms of monetary policy, we're starting to see interest rates be raised. we're seeing it in india, we're seeing it in china. so it's a different set of circumstances now. the markets have rallied significantly. they're no longer cheap. the monetary policy situation is going to be a headwind, not a tailwind. so you have to look at this from a risk/reward basis. at these levels, we feel that there's a -- as much to risk or lose as there is to gain. so in that sense, we want to begin to, you know, pair back our equity exposure. if you're a short-term trader, that's a different story.

stay in the game. you're more nimble. we'll buy in front of 1150. but somebody with a bigger picture time horizon, six months or a year, should, in our opinion, start scaling back their equity exposure. >> bill, very good. let's continue that conversation and more strategy in just a little bit. bill strazillo stays with us as does julian pendock, our guest host for the hour. still much more to come on "worldwide exchange." while your investments may not pay, crime doesn't, either. more after the break.

welcome back to "worldwide exchange." let's cross live to tokyo and check in on the trading day there with asuka kondo from the nikkei. kondo-san. >> hi, christine. tokyo stocks closed slightly higher today as broader sentiment was encouraged by the broader seas strength. nintendo shares jumped 8.7%, traded about 30,000 yen for the first time in over 11 months. the company said it will launch a 3d version of its portable game console next fiscal year which will not require users to wear any special glasses to see the 3d images.

nintendo affiliates benefit from the news. shares in hosiden, mitsumi electric gained around 3% each. on the other hand, seasonalny financial lost ground. investors are trying to include daichi financial in their portfolios. meanwhi meanwhile, the government has decided to make major changes in the postalzation plan. the state minister in charge of postal reforms said today that the government should retain more than one-third of its shares in ya pan post holdings. the new plans include doubling the maximum amount of investments per person. the government aims to submit the bill by next april. but the plan is strongly criticized from private sector

groups as it sets back the efforts of previous administrations to privatize the huge financial organization. that was the nikkei business report. back to you, christine. >> kondo-san, thank you very much for that. nicole. >> let's get you to the top stories we're watching from around the world right now. in the united states, the government's top watchdog agency is criticizing the obama administration's mortgage program. white house officials said that the plan would help up to 4 million homeowners avoid foreclosure, but so far, only 170 borrowers have completed the program. barofsky says numerous rule changes have caused confusion and not only that, dallas delay, and the government didn't do enough to advertise the program, christine. >> nicole, the three-day rio tibtso trial in shanghai has officially come to a close, even though it could be sometime before a verdict is reached,

according to lawyers nor the four separate dfbts. so far, only one of them pleading guilty to stealing commercial secrets. all four of them have built of accepting prescribes, but it is being disputed as to the amounts. louisa. >> well, four german pensioners have been sent to jail now for kidnapping their financial adviser and holding his prisoner for days in a basement. the four people, ages 61 to 80, wanted to get back more than $3 million in savings that they lost in the financial downturn. the two women were given 21 and 18 month suspend sentences. not a recommended thing to do, julian. >> no. what is recommended that

investors do these days? you just mentioned to me that you're looking much closer at a yield, a dividend yield. >> yeah. it's more important that we invest in companies rather than just the broad market otherwise you might as well go and buy an etf. so we invest very much on companies that are continuing to grow, attractive valuations. but they're getting a lot of their excitement in parts of the world that are growing when it can be a smaller company like piagio, they get 20% of their volumes in india. they're now selling well into the states for the first time, all the mega giants by nestel and unilever. over the long-term, 80% of return in trade and equities comes from the deal. it went out of fashion as everyone looked at trading stocks, capital gains in greater fool theory, i suspect because of the demographics and the

greater funds they will, therefore, keep a closer, tighter range on management and say, excuse me, we want some of our income payback in dividendes and not to fund your add ventures going around the world buying up other companies. i was very interested to see the reaction of the share price prudential sell by 20% raerchb going up by 20%. and i think this is a sector trend that used to be the case and will come back to investors. >> julian, as always, thank you for coming in and spending time with us. nicole. >> lou, so much more to come. we're expecting u.s. durable goods orders, new home sales today. we want to know your thoughts. do you have any questions for our guests? e-mail us, worldwide@cnbc.com. 

welcome back, everybody. "squawk box" follows "worldwide exchange" for viewers in asia, europe and the united states. hi, becky. >> good morning, louisa.

we're going to talk about a lot of things today, but our first focus is the china challenge. google's showdown with beijing over censorship is causing great concern back in washington. representative sandra levin will talk to us today before the hearing on this matter. levin is also the new chairman of the house and ways means committee. also, jon corzine has a new job. he's going to head up mf global and he is talking to us at 7:00 a.m. eastern time. jon corzine, before he was governor of new jersey, before he was senator of new jersey was the head of goldman sachs. so he's getting back to his roots with a financial company. also, president obama signed the health care bill into law yesterday. texas senator greg abbot will tell us why he thinks the law is

unconstitutional. all that plus we've got breaking economic news, orders for durable goods is coming up at 8:30 a.m. eastern time. "squawk box" is coming up at the top of the hour and i got criticized the other day for wearing pirate shirts and i realize i'm wearing another one. >> i say bring them on, bring them on. anybody that wants to criticize, you try doing this every day. >> thanks, louisa. >> always looking lovely, let's continue with what becky was mentioning. bill fresnillo is still with us. what do you expect there snipt looks like according to futures that investors are almost holding their breath to see what these new housing sales numbers are going to show us. because we had better than expected numbers out just yesterday. >> yeah. i think the housing numbers are

critic critical. there are two weak spots right now in this recovery. one is the labor market and the other is the -- both residential and commercial real estate market. so we'll see what february new home sales brick. you know, i think you're going to see a print around 315,000. but we're going to have to see, i think, several months of data that show some stability in the housing market before we can breathe a sigh of relief. i don't think we're there yet in housing. i think, you know, part of the problem is that there is a big shadow inventory that's putting pressure on prices. i don't think that situation is going to change any time soon. >> you know, bill, another soft spot some may say is the u.s. consumer. we had the ceo of sachs on. i want to have you take a listen. >> the markets are a heck of a lot better than they were at 6,500.

the consumer is starting to feel more flamboyant. we're starting to get into a bit of a checkmark in terms of overall attitudes, they're starting to feel more economist. you're tarting to see them come out of their shell in terms of shopping. >> bill, is that a silver liking that the u.s. lux cury consumers still holding back? >> i don't think you'll see the luxury consumer turn around until the jobs situation gets better. i don't think that's going to happen any time soon. i think the biggest trend as far as the consumer is concerned is the consumer is saving more than they have in the past. and that's not a good thing for any companies that rely on discretionary spending. so i still think, you know, the consumer has a way to go here. the labor markets are still

soft. the housing market, which has been another big source of wealth, is still weak. and until those two parts of the economy begin to stabilize and turn the corner, i think consumers are going to be conservative in their spending. >> well, this is also coming, bill, as you know, janet yellen was speaking yesterday. we just got comments in from charles evans speaking in beijing. both are saying that they're in no rush to raise interest rates. what's your reaction to that, do you buy that? >> well, i think we got the fist shot across the bow of the hike of the discount rate not that long ago. so, you know, there was a whole question of what does this extend period mean? how long is that going to last? and i do think that the fed will err on the side of lower rates until we start to see unemployment coming down, but the fact of the matter is, the

next move in interest rates is going to be higher. that's obviously not a good thing for the equity markets. and so, you know, again, we don't have that monetary stimulus at our back like we did last year at this point in time. >> yeah. so briefly, bill, it's louisa, do you think that people should be taking some profits now or should we be hanging on in equities? >> well, like i said, i think in the short-term, the key is holding the 1150 level in the s&p. as long as you're above that, i think the short-term momentum stays bullish. we had our clients stay long in that level. so i think in the shorter term, you stay with it, stay on the bullish side, stay warm. but bigger picture, i think we are getting to the upper end of this march rally. so if you're somebody wa longer time wore ridon, use this money to take healthy and put it back.

>> bill, thank you so much. for everybody coming up on "worldwide exchange," we have much more to come. so stay with us on "worldwide exchange."

good morning. bank of america is ready to start forgiving mortgage principal for troubled homeowners. debt threat, i guess. a harsh warning from a top eu official. face the music on greece now or fear the impact on the euro later. greece, you can tell it immediately. the markets at this hour, green arrows across europe and asia. wall street try toes keep its rally alive today. picked up steam yesterday, didn't it, at 100 as "squawk box" begins right now.