bigger say before they cough up more cash. france gets ready to vote. hollande and sarkozy are neck and neck ahead of the first round of the presidential election on sunday as they continue to battle out ways to fight the debt crisis. olympus shares surge after they say yes to 11 new board members, but its former ceo and whistle blower still demands an answer to why he was sacked. >> and the u.s. will focus on a trio of dow earnings. so the april business confidence index is out. first piece of breaking news we have for you on the show today. the april business climate index rises the number for april came in at 109.9. that was slightly ahead of

consens consensus. current conditions index 117.5 in april. the expectations index a rise in the headline figures from ifo, that makes the sixth straight month of gains for the ifo index. the revisions, as well -- there are no revisions to march indices, so it does end up to the sixth month of gains. this is how the markets are reacting to the news. euro-dollar is taking a bit of a spike higher. euro-dollar is just over 131. and this is how the european markets are reacting -- equity markets are reacting, as well.

the tax dax is up by 0.6%. some of the commentary, as well, ifo saying that the german economy is showing some resilience because clearly we are seeing headwinds for different parts of the eurozone, particularly in the peripheral eurozone countries. we'll talk about spain plenty during the show. but a little bit better than expected ifo numbers out. our guest host, eric britain. so section months of gaiix mong. but is this enough strength for germany? >> we need germany to be strong particularly in terms of its domestic consumption and domestic demand more so than production. it's been strong in production terms somewhat, but production ultimately depends on finding a market for that.

it's interesting thes c distincn between the current conditions versus the expectations. expectations depend on do we find manufacturing in the future and that's much less clear than whether we've found them today. production has been strong, what we need to do to lead it into recovery is for its consumption to be strong. >> is germany able to do that, are we likely to see germany lead that recovery? >> i fear the answer to that is no. i think the prospects for the eurozone economy are really rather bleak and part of that is because the german consumer just isn't doing enough to be the locomotive for growth. >> we'll come back to many of these topics in the show. certainly eurozone is core. coming up, too, olympus

shareholders finally say yes to a new board, but can the move on from its accounting scandal? plus mcdonald's due to report first quarter earnings just two days after yum brands beat forecasts thanks to strong growth in china. plus is argentina's decision to nationalize ypf continues to cause wave. we speak to the ceo of a firm that operates a large silver mine. find out what he feels about doing business in the country. >> on a friday like this, asian markets a little bit mixed. weak disappointing data from the u.s. casting doubts about the recovery we're seeing there, also renewed and continued worries about the eurozone. so this is how the picture is looking. but hang high composite managing to tick higher because we are have more opens of further policy easing helping to lift the financials in this particular market on hopes there will be another cut in banks reserve requirements ratio.

the hang seng was a little bit capped by what's going on externally, outside of greater china, u.s. and the eu. some of the concerns weighing on sentiment in this particular market. nikkei down 0.3%. investors still worried about the currency headwinds. they need a strong yen. the kospi in south korea down 1.3%. australian market pretty much flat and the sensex trading down 0.1%. so overall it's a mixed picture. this friday lots of head winds for investors. >> european markets, we're seeing gains coming through. certainly on the equity markets. the stoxx 600, certainly we have more gainers than losers. up by 0.2%. looking across the region, the ftse 100 is a bit of a laggard, up by 0.2%. in germany, we're looking at gains of nearly 0.7%. in paris, the cac is also

trading higher by roughly a third of one 1%. and in spain, we managed to edge up to those levels today. but what's going on in the currency markets? as far as the euro is concerned, we've been trading in will this narrow brand for practically as long as i can remember. just over 130. we're moving up by 0.2%. we did see a spike come through, but within the narrow trading band. so 1.3164. dollar-yen flicking between unchanged red and green. fairly steady around the levels at 81.59. aussie dollar pretty steady 1.0338. and sterling still above this . 1.60 level. moving up against at 0.1%. so 1.6073 roughly is where we

stand against the dollar. so on to the bond markets. this is where some attention is focused this week particularly around the very low yields on the ten year debt and the increasingly high yields on the spanish ten year debt. particularly focused on the ten year because the longer durations tell something of a story about perceptions of the underhighing economy and relative risk. in germany, we've seen record lows on the bund. we're barely above 1.7% on the yield. very much perceived as a safe haven. different picture when you look across to spain. a little bit earlier this morning, we went back above the 6% level, currently trading just below that level, 5.98%. yesterday the spanish two and ten year debt did get away fairly successfully. the bid to cover was very strong for both. the yield crept higher. in italy, we've seen yields creeping up again. previously the italian debt yields were above the spanish

yields. that's flipped around in recent weeks. but we are looking at elevated levels nonetheless. and here in the uk, relatively low, 2.15% on the ten year debt. christine. >> the big story bric nations led by brazil are demanding for more voting power at the imf in exchange for fresh cash injections. so far the fund has received pledges of support amounting to $320 billion from europe and japan. the imf would like brazil, russia, india, china and south ever came to further strengthen its war chest. still even without them, the imf is well on its way to meeting its $400 billion target. in fact japan's finance minister is telling the media that firewall funding could even exceed that amount eventually. if not by the end of this meeting. but doubts remain as to when the imf can actually solve europe's debt problems once and for all.

joining us is steven schwartz, steven has had over 16 years of experience as a senior resident representative for the imf. steven, welcome to the show. thank you very much for being with us. got to ask you, we have bric wanting more power, but they want more say. having been at the imf for some team, can you give us a sense of whether you see any changes to the structure of the imf that will actually give these emerging economies more say? >> well, that process has actually been going on for several years now. an agreement was reached in 2010 to do just that, to increase the voting power of emerging market economies. the problem is that it's going to take some time to implement that because these changes require in many cases ratification of individual parliament. so that will be a process that's going to play out over some time. but the good news is it's in tran. >> but what happens in the in

the meantime for much needed cash injections for countries like china and russia? >> as you said, it looks like the imf's target of 400 billion will be met at these upcoming meetings about terms of new pledges to increase the fire power available to the fund. the bric nations certainly want an increase in voting representation in exchange for that money, but i think it's really at the margin that they make the case that they are playing such an important role today in the global economy, they deserve an mcin that share. but i don't expect any breakthroughs in the coming days on this issue. as it i mentioned, it should take some time. >> eric, these kind of world events, requests for assistance, is this the kind of thing where we expect to really turn the

tied with the squauld developed world? >> absolutely. i think when the imf was set up after the last war, it wasn't in anybody's mind but the purpose of it is that developing nations, it should be an intermediary between the lenders from the developing nations to the borrowers. we need funds rather than the other way around. but absolutely has shifted as the balance of growth has shifted and the balance of the global economy has shifted. you were rejecting earlier on spanish yields and italian yields. spain is a massive global borrower. and spain is a developed economy. and what's happening is more and more of the bric nations are recognizing that it's their money that's going to come to bail out the countries like spain, portugal, ireland, et

cetera. demanding and quite appropriately so that they have more say over how that money is used and with what conditions and all that kind of thing. and it's reversal of roles really compared to what we grew up with. >> everyone without the so-called bric nations, the imf says it's well on its way to meeting its 400 billion target. will it come to a stage where it's a missed opportunity for emerging markets to have a greater role in helping out the recovery? >> the bric nations already are helping the global economy by sustaining very high growth. we estimate that asia alone will account for almost 60% of global growth in the coming decades. so with or without these contributions to this round of financing, the emerging market economies are already playing a

major role in supporting global growth. and in return are seeing a graduate you'll increase in their voting share in these sfug institutions. >> all right, steven, thank you very much for your time. interesting topic. well, we are going to go for a quick break. but we'll come back and run through what's going on in paris. we have the first round of the presidential election coming up over the weekend. [ male announcer ] this is corporate caterers, miami, florida. in here, great food demands a great presentation. so at&t showed corporate caterers how to better collaborate by using a mobile solution, in a whole new way. using real-time photo sharing abilities, they can create and maintain high standards, from kitchen to table.

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after a heated meeting, olympus shareholders finally said yes to a new board made up of 11 new members. shares surge as relieved investors hope the outcome would signal a fresh start for the disgraced japanese camera and medical device maker. olympus was found guilty of hiding $1.7 billion of investment losses in japan's biggest corporate scandal in will decades. but ousted chief michael wood

ford says the claims are mere mockery. wayne, you say today's outcome is not -- wayne is not there yet. what do you make of today's outcome, is it ideal in your point of view? >> to have two of the ex-members of the board still the executive officers and i remember i recall that there was an ir head being appointed. all these things basically gives the message that everything is what they're playing for, which is to regain trust. this is almost like appointing, i don't know, ex-nazi officials as the head advertising agents for new germany after world war ii. they're giving the wrong message

and shows they haven't sorted out their internal problem which basically lies in the negative side of japanese especially in the consensus management area. >> so you're saying today's rally will not be sustained. let's go to wayne now. what is your view, do you share the same views? >> i'm not quite as bearish on the stock or the story. today's solution was not ideal, but they appointed a new ceo from someone outside, a professional who could come in and did do the work that woodford started. they're not doing that. they appointed a veteran. not great, but a company has a great business and in the long run it will probably surprise on the up side. stock's already gone up 180% since november in its darkest days and i think as the global economy recovers that medical business will just do better. >> appoechinting could be a goo

start, but what else does the company need to do to ensure the public they're taking corporate governor ma governance seriously? >> they've already sent the messages that they're going to take a banker led restructuring, that means probably getting new capital at the behest of their banks. and then we'll see from there. it's not an ideal story from a corporate governance point of view. i'm not entirely sympathetic with the shareholders who complain about that they were along for this ride, they should have been looking at the books to find these irregularities. and a lot of the share shoulders squawking now are people who bought in very late in the game and now have really just a lot of up side and have already seen a lot of that already. >> so do you think all this political corporate governance, will this be distracting the board and the ceo from really

doing his job? >> i think there's already misinterpretation which is very typical amongst the western sue. the fact is that japan is still led by banking-led governments. in other words, in order to sustain financing, especially for a troubled company like olympus,s quite a norm to appoint these bankers as one of the top executives. it it's not in a they're necessarily running the show, but it's a message adopted in order to get a long term capital. and this is one of the strong points of the japanese government style. one of the reasons why we are good at making the goods. in restoring the trust of the government's style, i certainly think they came out with a very bad start. i'm not talking about the investment perspective, i'm talking about long term company structure and also the trust that they should be regaining or trying to regain at this moment. >> from an outside perspective, what impression do you think

this gives to people outside of japan, maybe people that aren't that familiar with how business is done in that country? >> i'm not an expert in any means in olympus specifically, but it seems it's an example of the kind of tangled interaction between the banks, the government and the top corporates in japan which has been the problem on a macro level for the last 20 years really and across the board really in high levels of even lon echelons of japanese business. it's a hurdle forget over. and this seems like a symptom of that. >> for olympus, people listening to this discussion, what would you say to them for them to get their act together, what would convince you on turn your views to be optimistic about a company in the long term?

>> i think what you need to do is basically sweep up, clean up the mess in the consensus board room. increase the polarity. and basically as the gentleman said, start restructuring the business side. that way it would give a very positive image that they're on the right track. again, this is a very bad apple in the whole pie and i'm just saying that there are positive thingses in the japanese government style and to depict olympus as typical i think is quite wrong. so this is a pretty bad apple in the case and that should be remedied as we go along. >> interesting. thank you very much for your views and your insights. and wayne, thank you very much, as well. >> great debate. well, let's move on to what's going on in france where campaigning in the presidential election officially ends today. media blackout will be enforced from midnight ahead of the first round voice on sunday.

latest polls show the socialist candidate leading by just one point. stefane is back in paris. how does it look with just a few hours to go? >> it looks like nicolas sarkozy could face one of the most severe defeats in the post-war political story in france. accordinged according to a survey, only 43% of votes in the second round, which means francois holland would get a significant gap between the two candidates. francois yesterday evening say it will reform the french community to dominate the financial world and this morning he made some comments about the european central bank which seemed to question the political independence of the ecb. francois hollande believes the

ecb should rate its interest rates, he also thinks that the ecb should lend money straight to the european states and he made clear france might not be able to reach its deficit arrest get without economic growth in europe. one of the reasons why he would like a growth target to be set in the european fiscal pact. now, the view on the ground is that whoever win this is election in france will have to face the market's reality very shortly. france could face a downgrade of its credit rating from one of the major augusts and that's why one of the reasons sarkozy warned that france could be treated like spain, could be sanctioned like spain if it makes the wrong choices on sunday and also at the next round of the election. and about it clearly stops reducing it public spending.

>> thank you, stefane. let's get back to eric. we've heard pretty inflammatory comments from both sides of the french presidential campaigning. pretty truetal about the banking industry as a whole. are you concerned about the outcome of the presidential election on the rest of the you're rowe zone or these very anti-finance comments just politicking which will fade away after the election has passed? >> yes, i am concerned about killing the goose that lays the golden egg. there's other sectors that are important in growth in europe besides the banking sector of course, but the banking sector remains an important one. and it just smells to me like it's been scapegoated. it's very convenient arrest get. i'm not saying the banking sector is without flaws. of course has flaws. but which it's been picked ons

as the target pop which all the sins of the past of europe will be loaded and it will be, you know, the risk is it will slain in the style of scapegoat. so it's not good for growth, hot good for europe. i hope that it's more in the words than in the deeds, that it's just something that they're talking about rather than that they'll do. but one never knows. >> we will talk about it more later in the show. coming up, voters will be deciding who will be the best candidate for france. but the best candidate for europe is a top he can we'll discuss in an hour's time. when we come back, we'll be live in madrid where the government is reportedly considering setting up a bad bank to clean up the country's lenders.

headlines around the globe, the imf seeks to increase its fire power confident it will hit will the $400 billion target. but the bric nations say they want a bigger say before they puff up more cash. >> business climate posts an increase in april, but concerns about spain's ability to service it debt continue to grip the

markets. >> in the u.s., investors will focus on a trio of dow earnings looking ahead to numbers today from ge and mcdonald's and reacting to microsoft's better than expected results. >> and hollande and sarkozy are neck and neck ahead of the first round of presidential elections on sunday. so march retail sales figures here in the uk have hit the wires. march retail sales are up by 1.8% on the month. that translates to an increase on the year of 3.3%. the month on month and year on year retail sales highest since january of 2011. the forecast on the month was an increase of 0.8%, so an increase of 1.8% is well ahead of expectations, as well. sterling is being impacted as a result of this as we can see.

seeing another spike higher sending it before 1.61. was already higher today, but pushing further up after that data has hit. let's get a quick which event from eric. so better than expected retail sales. always a bit of caution. >> it looks positive, but i think the caution should be the main note. retail sales figures are notoriously the serieses which is hardest of all to make any sensible inference from. it means very little. marginal good news. >> let's leave it there and move on to some of the other optics, particularly this issue of spain. central bank reportedly looking in to separating toxic from healthy assets. quoted as saying the move is an

attempt to restore investor confidence, but he ruled out the creation of a bad bank that would hold he real estate assets. >> the spanish banking situation needs to be broken down largely into two parts. there are the leading major global banks of spain which are generally well capitalized and well positioned to withstand the pressures on their balance sheets. there are unfortunately the savings banks of spain which are under greater pressure due to their exposure to the housing market. i think we need to keep those two separate as we look at what needs to be done. the overall problem in spain is not a housing or banking problem problem. >> so another plan.

give us some analysis if you would. >> a popular presentation that was given in london and separating out these toxic assets, not a bad bank scenario, but just some kind of segregation is one of the options being considered. spanish banks do not they'd more capital. they've been told to mcprovisions by 50 billion euros but some suggestion that not all of that is new. if you look at the data that we've seen this week, the bank loans here have increased to just over 8%. an increase of 27%. so it does hook like the situation is increasing. also we know that there still has to be write downs on housing loans and the value of house prices here. the question is whether the deleveraging that we're seeing in the banking sector and will continue to see has an

exacerbating effect on a potential credit crunch in this country and at what point that makes them adjust their approach they're taking to the banking sector. if you look at some of the data, socgen points out that mortgage lending has fallen 5 billion euros, lend to go corporate has fallen to 20 billion euros. that will have an effect to jobs and growth. another key thing not to miss is the reaction we saw in the equity markets yesterday. the banking stocks under pressure with concerns about just how much sovereign debt these banks are taking on board with plenty of questions. we do have to wait for the data to come through, but we do have interesting on the take in the climate here in spain. >> julia, thanks. let's get out to silvio. hopefully you could hear some of that from julia, the latest plans in spain. start by outlining for us your

view on how bad or gr the situation is in the underlying spanish economy. >> i think the situation is very severe i would say. and i will go back to the growth story which for me is the most relevant element. makes the spanish economy a very dear situation and i think the story is pretty clear, we're facing a situation where there is a break in the pre-crisis period, so the economy is readjusting to a substantially lower let's call it run rate and obviously the rebalancing in this environment is difficult. all the rest i think is -- but that's the main factor in which we're focusing at the moment. >> the bond markets and what they're telling us. when we had that auction yesterday, lots of people were looking at it, seemed to get away okay, but the commentary that we got here, what the viewers were saying to us was

that the spanish auction was very much stage managed, it doesn't reveal the truth about perceptions of the spanish economy. where do you stand on that? >> i think these events are obviously shall microment wills of the bigger story. but they've got a huge potential in terms of capitalizing market attentions to the spanish situation. now, yesterday i think the auctions have managed to achieve the target that spain had set, but the problem remains the borrowing costs for the country are extremely elevated and borrowing costs, implications also for the private sector. so i think the market uses these auctions as a way to pin point where it's evolving and i think that given that we expected domestic economic situation to deteriorate going into the second quarter of the year and the second part of the year, i think that any indication that the borrowing costs continue to

trend higher will repeat again the fear of contagion. >> this is christine here in ace i can't. putting the details of the bond auction aside, there is the imf story trying to build up its firewall. with a are the implications if the imf gets involved, will the us a terry measures get more austere? >> i think the fact that the imf manages to increase substantially its resources has got two stories going. the first is that maybe you've got at the margin a little bit more of cash to help countries about it they require conditions deteriorate being substantially. but the imf has a substantial element of attached to it. it brings about the real subordination that we've seen at play in countries like greece

for example. but realizing something was wrong, the imf is senior toward the bond holders. so the imf may forcibly be involved is not necessarily good news. i think it's a fact of bad news with the margin. so take it with some caution. >> so we've seen the ecb with its three year ltro, most of that money seems to end up back to the ecb every might still even after all these months. now we hear that spain is trying to divide up its good and bad assets. what's it going to take to draw a line under the deterioration for spain, any of these measures going to do it sf. >> no, i don't think it will. it cannot pay back the levels of did debt by which it's accumulated.

unless and until a large proportion of that debt is written off, spain can't get into a long term growth proper jeker to. the measures this place so father don't come anything do a address that problem. we've seen the model of how the debt will be dealt with from the greek default and what the greek default told us is that domestic banks in the country defaulting will be recapitalized by the government so we're seeing them

buying up their own government debt on the expect station that they'll be protected just like the greek banks were. people who should be very concerned are the people causing the bond yields to pop in spain are foreign holders of spanish debt. >> eric are stay with us at the top of the hour. silvio, thanks for speaking with us take. well, asian markets are mixed here. a couple of things happening as far as sentiment. did you tells on the strength of the recovery. culminating together and weighing on sentiment. but in greater china, what is lifting this particular market higher is hopes of more policy easing from the pboc. remember that was the topic last couple of days and financials are getting a lift as a result. hang seng up side a combination of all factors, worries about china slowdown, the eurozone,

capping the up side in the particular market. nikkei third straight weekly loss. investors are worried about the headwinds coming from the currency side, the yen, and wha corporates. australian market pretty much flat on a friday and the sensex 0.3% lower after three straight gains after the rbi cut interest rates by 50 basis points. beccy. if you've been watching the show for the past 41 minutes or so, you'll have seen a couple pieces of breaking data, the ifo climate survey and he r retail data. markets have turned around and are now trading lower with the exception of germany. ftse 100 is losing four points or so, the dax trading around the unchanged level.

ibex trading lower by about 11 points or so. a bit of negative sentiment seeping back in to markets. euro-dollar has seen a move to the up side, which is hanging to hold on to but still in this narrow band, up by 0.2%. sister hinge has taken a pop up to just after we got that better than expected retail sales data, we saw a continuation of will this trend to the up sight for sterling against the dollar which is now sent us above the 1.61 level. christine. >> thanks very much for that. there is money apparently in state controlled media. the website apparently of beijing backed newspaper says it's raised more than $220 million in an ipo ahead of its

listing on the shanghai stock exchange. tra tracey chang has more details. >> people got the state run news portal nearly tripled the amount of money that was planning on raising initially. it may be partly due to people.cn and its unique status as the first government backed online portal to go public. beijing has been promoting the cultural industry including news media publishing as well as education related businesses as a growth and for the domestic economy. the people's daily says it wants to use the cash to expand into mobile content, beef up its editorial team. the deal is benefiting from the improved stock market conditions. the shanghai composite has risen more 9% so far this year. well, they may have a leading position in the industry but market watchers still warn that

a shared debut performance will depend on broader market movements. >> beccy. >> to bring you a bit of breaking news, we've been following this situation in argentina very closely after the government announced plans to nationalize ypf. now we've been looking to see what other companies have exposure to these markets have to say about doing business there and we have the dhar man coming out saying that while their exposure to arrest again tee made is lim argentina is limited, they don't have any problems with existing businesses in that country. we'll have more later on in the show. over to south korea now

where steam maker released numbers that were slightly better than the market forecast, still bleeding a lot of red ink. >> yeah, christine, the world's third largest steel maker by output dropped a whopping 42% on year and what squeezed their bottom line were basically lower product prices and higher raw material costs. the company cites the closure of a blast furnace as a reason behind will the drop in forward. going forward, they have a cautiously optimistic outlook saying expects demand to pick up. they also plan to cut and control costs by using cheaper raw materials and a hedging program. posco is targeting $33 billion in sales this year, which is 4% less than last year. the company has also slated $3.6 billion for capital spending.

back over to you, christine. thank you very much for that. also a big earnings day in india especially for energy companies. >> thanks for that. with the newspapers, they'll be out both markets today. to put things in perspective, reliance, revenues expected to be flat. margins expected to come in around 8.1% versus 8.56%. so that's expected to be a little bit flattish on a situation basis. to put things in to perspective, even the profitability is expected to decline around 3% for reliance industries this time around. key points to watch out for will be the kgb 6 volume, it's been declining progressively, so there an expectation that the management is going to make some amount of commentary on that.

and we also have the buy back where there are more indications with regards to the buy back which reliance industries has announced some time back, as well as grms. grms are the gross refining margins this time around expected to be flat on a sequential basis. to put things in to perspective, expecting to be flattish on a sequential basis. team i said i can't expected to go up around 14.5%. margins expected to be above that stellar and profitability expected to fall 0.5% to be around flat of a half a billion dollars. so this is what we can expect from the two energy majors. >> thank you very much for that. >> let's get to some of the earnings news. nestle has posted better than expected results.world's biggest food group got a boost in

emerging markets. and general electric reports. forecast to earn 33 cents a share. investors remaining focused on the health of ge capital and continued the overhang of bad mortgages and delinquent credit cards. mcdonald's reports first quarter numbers at about 8:00 eastern forecast to earn $1.23 is share on $6.5 billion in revenue. investors will listen for comments on inflation and commodity costs. mcdonald's said it would hike prices to offset those costs. let's it take a quick check for you on shares. mcdonald's german listings, stock up by 0.4%. just a drop of 0.4% or so for

general electric. microsoft makes the x box and other revenues. revenues topped forecasts. consumer sales were flat, but corporate pc revenues rose by 8%. microsoft getting set to launch windows 8 which is exacted to be a tablet friendly version later this year. microsoft rose 2% in the after hours and this stock up as well, 1.9%. it's time for another quick break. still to come, argentina's decision to nationalize ypf continues to cause waves. we'll speak to the ceo of a resources firm which operates a large silver mine in argentina. wñwñwñwñwñwñwñwñwñososososvycyíy

the london marathon gets out of the blocks this will sunday. 23 o i've done it a couple times before.

how many are wearing your products? good up to 50%. there's a major presence. >> in terms of the proportion of runners who wear acics shoes, you don't see a huge number of ads running, but there are lots of people wearing your shoes compared to nike, for instance. what's the business model? >> i think we've been in the business for 60 years perfecting product in our r&d center. so we have 100 scientists working on the shoes and they evolved is, the approach of each product getting better and better and better. so we're in the 18th version. so six shoes doing different things for different runners. and it's word of mouth

marketing. however now we're spending money on tv advertising in five countries. so it's all about getting not just the runners to know the brand, but the broader public. >> just a matter of disclosure, i do own a pair of acics shoes, but as a matter of a distinction, i'm just wondering, has the crisis in the region made pricing a little bit more difficult for you in the sense? >> wire the most premium performance brand in the marketplace, so we've always been the most expensive. and as a result, we've actually seen those shoes sell more than ever before. we're up 15%. the running market is boom willing and we're taking share from our competitors. so it seems we're recession proof to an extent, which is great. >> who do you view as your

competitors? >> our competitors are really nike and adidas, but their broad sports wear brands now and we're a true performance brand. so in the los of different categories like running or tennis or hockey or rugby or critic, the better performance should yous from acics are delivering the needs of those athletes and enhancing their performance. >> we've had lots of guests on cnbc talking about their efforts towards london 2012 and how various brands are using sponsorships. just explain to us in the broadest erms how do you use sponsorships of big events like the new york marathon to translate in to profit for the company? >> it's about brand exposure and also connecting with people like you and me. so if we can give a perfect experience as the sort of undisputed leader in running and everything around the marathon is an experience, then it's all to do with running services and

that increases the brand loyalty and attitude to make people love the brand. so we're really leveraging everything about the experience around the marathon. >> and the experience of not having blisters, which is the best thing. thanks very much for coming along. we've talked about lots of topics, eric, but what's the big issue that you want to leave us with? >> the big issue is the same big issue it's been for the last several years. debt and how we'll deal with debt. so to make a segue from the previous piece, we're in a marathon. it's a long way to go. the hope is that we'll make to the end, but it's a long, long hall, extremely tough as people might have anticipated. but it's that way with debt recoveries, too. so don't be looking for growth

to return in the sort of 3%, 4% range as we enjoyed previously. it's a long haul. >> thanks very much for that. jackie is here now from the u.s. >> good morning, guys. coming up on the show, mcdonald's due to report first quarter numbers before the bell today. but will investors be loving it? we'll preview that as well as earnings due for the market ge. [ male announcer ] this... is the at&t network.

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welcome to the show. headlines from around the globe, here in the united states, investors will focus on a trio of dow earnings looking ahead to numbers today from ge, mcdonald's and reacting to microsoft's better than expected results. >> germany holds on to its status as the healthy man in europe as business climate posts a surprise increase in april. >> the imf seeks to increase its fire power confident it will hit the $400 billion target, but the bric nations say they want a bigger say before they cough up more cash. >> and france gets ready to

vote. francois hollande and nicholas sarkozy are neck and neck as they continue to battle it out over ways to fight the debt crisis. >> let's start here in the united states and take a look at the u.s. futures, see how we're getting set up for trade. the dow could be high are by 12 it, the nasdaq by 2 and the s&p pp up by just about a point at this early hour. of course after a see saw session in the markets yesterday, we saw the dow closing down 68 points, closing below 13,000 important to note. some disappointing data out in the u.s. we had jobless claims and existing home sales, also declining and looking at some of the sectors on the s&p in terms of the losses and declines that we saw there. tech and industrials leading the way lower. >> equity markets, we started off with markets up, but at this

stage, we're moving lower. better than expected data out, too. retail sales in the uk, the ifo index in germany were both pretty strong, but the ftse down by 0.1%, nearly 0.2% lower for the dax right now. the cac low are by 0.4%, the ibex losing 0.3%. so having had a positive start to trade, looks like things have turned rather negative now. >> a lot of important things to watch out for today. starting with general electric. reporting first quarter results at 6:30 a.m. eastern time, ge's forecast to earn 33 cents a share. investors remaining focused on the health of ge capital and the continued overhang of bad mortgages and delinquent credit cards. also mcdonald's reporting first quarter numbers at about 8:00 a.m. eastern forecast to earn $1.23 a share on $6.5 billion in revenue. investors will listen for

comments on inflation and commodity costs. it will hike prices to offset those costs. mcdonald's trading higher about half a percent this. general electric trading a little lower at 14.53. >> joining us for the next hour is jenna godfrey. i wanted to pick up on the earnings story which jackie was just running lithrough there. do you believe we're seeing a return to a recovery particularly from the u.s. earnings that we've had out? >> definitely showing that the u.s. is picking up on its strength. however, at the same time, cash levels of s&p 500 can hes are all time highs. so what that is showing is although things are improving, there is still nervousness will.

in terms of the way investors are reacting to that we've seen a lot of volatility in the markets. but what they're using is profit taking or using dips to actually buy on to corrections. there's a fear of missing out. >> i suppose for us to really get a proper recovery, we need companies to start spending that cash to invest in the recovery. what will it take to drive things forward? >> on the u.s. side, they're waiting for clarity on policy. and that will determine their cost base. and then they can understand how much budget they have to be able to spend. therefore all eyes will be on the election at the end of will this year. >> sticking with concerning, we've seen some good results out of the u.s., but are we seeing the expectations low on the bar is set low and then the mums come in high in to the up side

and make investors feel good about what they're seeing or are we seeing real accurate numbers and getting a between read? >> expectations are driving the markets at the moment. what happens is a lot of investors are positioned pessimistically and if anything comes out that actually is ahead of expectations, they have this fear of missing out and actually buying in to the markets. so the earnings were actually potentially quite punchy. but people do use this as an opportunity to actually try and catch up on markets momentum. >> which sectors offer that opportunity right now? >> the sector rotation has been very interest being because actually we've seen a rotation towards defenses. they're in more defensive sector which is shows that there still

is the potential for a correction at least over the shorter term. >> as far as the european situation goes, and we've been talking a great deal about the spanish auction yesterday, let's get your view on you how successfully that auction went. >> it did go well in terms of demand, however, you saw yields increase which shows the fear that spain is the next country to request a bailout. three things are still needed for europe to survive in the way that it's constructed at the moment. first of all, you need to focus on growth as opposed to austerity. and we started to see that with italy. you need to have more fiscal consolidation. and this is where it's created a bit of an impact when you've seen french and german badges off loading exposurexposure.

and finally, you need greater support and that's why all eyes will be on the imf, the g-20 conference this weekend to see if we can get a shoring up of the fire power. >> okay. you'll stick around for the rest of the hour. she's an avid tweeter. let us know what you think about some of the comments and topic we're discussing on the show today. we like to hear from you. would he read a we read all the tweets that come through. >> and we like putting your questions to our guests. meantime, it's the final countdown for the french presidential elections. good morning, stefane. >> good morning. nicolas sarkozy set to be heavily defeated according to the latest opinion poll.

stay with us, i'll tell you more after the break.

cam panning in officially ends today. a media block out at midnight.

latest polls show hollande heeding in the first round by just one percentage point. stefane is in paris and has an update on all the latest. >> sarkozy has never been in the position to win this election, but this time the gap with the socialist is widening. according to surveys, hollande would get 57% of votes in the second round of the election and sarkozy would have 43% of votes only which means that he could face one of the most severe defeats in the post war french political history. but meanwhile, started to make some comments on the ecb what the ecb should do. he believes that the central bank should raise its interest rates. he believes also that the ecb should be able to lend money straight to the european states, which the comments seems to question clearly the political

independence of the ecb. and also along this morning say that france could miss its deficit target. without economic growth, it's not a big surprise we know that hollande would like growth target to be set in european miss cal bank. he would like larger investment to be financed to fuel the can growth. >> stefane, thanks. onset with us is professor in paris and we were talking about the issues with a previous guest and the extend to which we've h had -- how much is this politicking? >> about 60% is genuine and 40% is politicking in my estimate. in other words, there is a

strong current of opinion which does not like being pushed around by the financial markets. whereas here we tend to be somewhat fatal list it tick about. the french really do resist that. but they also know that there's only a certain distance in which you can push that resistance. there are views which are not ridiculous frankly. i think us a tirity does not look like to deliver results and it will push it for more growth policies and for an ecb to take a more balanced view.

>> he's getted quoted as sayingb should cut rates and lend money directly. here is a candidate telling the ecb what to do. does that fit with what the french people want to hear? >> frankly, those two points, the cut in interest rates and directly buying government bonds would be assumed by a majority of the economics profession at this point. they believe the policy line that we are on is leading nowhere. and also i think the arguments about the ecb and its political independence are also quite serious. as we know, the ecb was set up in a particular way just like the bundesbank as a very, very independent institution. more interest than the bank of england. the bank of england has the government setting an inflation target and the bank implementing it. the ecb can do exactly takes

pleases. so although rhetoric sounds in-temperament, in fact the substance of what he's saying is something which many people would support. >> will the outcome have an impact on what happens next? >> i believe it will. if you suppose hollande does win by the majority they're talking about and he turns up at the next summit and he says i think we need a more growth oriented strategy, monti will support him, he'll have a big majority in one of the two big runs in the eurozone. will better m i think there will be a change result of the french elections and i think people are not focusing on the political reality of the impact of that election. >> that's one of the first

points that i mentioned, what people are looking for as the eurozone crisis and that's a focus on growth owe owes body to austerity. austerity is damaging country's ability to deal with their own debt. it's making it harder. and if you actually get to a situation where you have a greater growth, they have a better capability to actually grow out of this problem. so it fits in nicely with what people are looking for. >> how closely are the economic fortunes of france are tied into the success of the next president? sarkozy when he started campaigning seemed to distance himself from the problems that france got into economically during his own presidency. is next term determined by the economy or do you think other issues will come in once the election is over? >> there are clearly other issues around in france that you

haven't mentioned. the bridget bardo factor so there are other issues kicking around in france. but i think the economy is cheer will he decisive. arrest k sarkozy decided he would position himself by angela merkel and he would have her come and campaign for him. gradually i think the mood has shifted during the campaign such that being tied to germany and its very strong focus on austerity does not look like where the center of gravity of french opinion is. i think they want to see a slightly different focus and that's what hollande is offering. i suspect a rockery period ahead. >> the european crisis has been

based around the relationship of merkel and sarkozy. if we get hollande, any impressions of what the relationship might be like? >> i think it will be very difficult at the start. rather surprisingly, both angela merkel and david cam rop refused to see hollande when he went to berlin and then to london. i thought that was a great mistake on both parts because there was at least a 50/50 chance he would end up being president and you'll have to talk to him. so i think things start rather badly and i think that we could well see a slightly different kind of constellation of forces in the european council with france more lined up with spain and italy than with germany in the future. and that could alter the balance of policy. >> thanks so much for coming on and sharing your thoughts. it's that time of the morning. time for your global markets

report. let's start here in the states. looking to a slightly higher open. dow by 3, nasdaq by 1 and the s&p 500 just under the flat line by a hair right there. a choppy session yesterday. s can disappointing data adding to the pressure. concerns about these first quarter numbers that we'll get out this morning. tech and industrials leading the way lower on the s&p, but then we got positive numbers after the bell. and not a bad day for ipos. >> let's take a look at the european bourses. ftse lower by 0.3%. in germany which did manage to hang on toits gains t its gains

down, also. and in spain, the marketsi shifting done by 0.2%. ifo index in germany and retail sales data out this morning. after the ifo figure came out, we certainly saw an impact on the currency markets. euro enl dged higher. a narrow band, 1.3150, around that level. the dollar is edging up slightly against the yen. aussie dollar pretty steady, 1.0326. and sterling just about manage to go hang on to its moves to the up side, above 1.61. so on to the bond markets, where spain has been very much the foc focus, earlier we did see yields on the ten year below 6, but now

they have moved back above. the eight year at 5.63, but it's the it ten year where the focus has been on this number here, just over 6%. so concerns about the sustainability of that kind of level. chair thcompare that to what's going on in the uk and italy, too. fp elevate straight ee ee eed i germany, this is the other big nuf. of great interest with record low yields on the ten year german debt, we're 1.697% across in germ aany. >> in asia, a mixed picture. concerns about the recovery in the u.s., pot to mention knot t

continued concerns about the europe. hopes of more policy easing help to go lift the market. hang seng gains were capped on concerns of slowing growth in china, u.s. and euro, all that capping the up side in this particular market. investors worried about currency headwinds coming from the yen and what that means for koornt japan. elsewhere, south korea down 1.3% as risk off clearly in this particular market and the australian market pretty much flat. sensex trading down, so pretty choppy session. that's it for global market report. i'll be back on monday with news moving markets here in asia. have a good week end, guys. >> you, too, chris team. we'll see you monday.

still to come on the show, microsoft manages to beat expectations with first quarter profits, but one division is dragging on the numbers. find out more on that next.

today is gonna be an important day for us. you ready? we wanna be our brother's keeper. what's number two we wanna do? bring it up to 90 decatherms. how bout ya, joe? let's go ahead and bring it online. attention on site, attention on site. now starting unit nine. some of the world's cleanest gas turbines are now powering some of america's biggest cities. siemens. answers. microsoft could get a boost

today. third quarter results topping forecasts. shares rose 2% in after hours trading. >> mike yoe soft turned in fiscal q3 earnings that could shake tech out of it funk both revenue and eps outpaced an lists expectations, revenues were at $17.41 billion. that's better than analysts expectation of 17.17. e about ps earnings perare at 60 cents, better than the 68 expected. and microsoft only gives operating expense guidance, but says expenses will be lower than it had about $200 million lower. so let's talk about revenues. why were they better than the street expected? division by division. windows, lots of talk about a pc sales slow down. and while that's true, it got sale where is it counts. they got $4.62 billion in sales,

that's better than the 4.3 billion expected. why? because enterprise sales were strong. also sales of high end pcs were strong. they tend to get pirated versions of windows less, so microsoft makes more money off of those. going down the line, servers and tools good quite well. the business division which sells office also did well. office share point exchange link, that business did better than a lot of analysts expected. the online business which had been a money loser actually continues to lose money, but the operating loss was cut by $300 million. microsoft saying they're focusing more now on profitability in that business than they had before. the one business unit that was below expectations ways the entertainment and devices division. usually a slow quarter for them anyway and it housed the lower margins of any microsoft business. so it actually helps eps. that came in at $1.62 billion

below the $2 billion some expected, but that's just because console sales were lower than expected. microsoft is still maintaining its market share of about 40% in consoles. it is leading sony and nintendo in that business right now. overall, mike yoe soft set business is outpacing consumer, and they mentioned an interesting stat, 100 billion minutes of skype calls in q3, that's up 40% year over year. the value of skype isn't just in those calls themselves, it's in how it plans to integrate skype with its other products over time, but still an encouraging stat. >> so the tech side of the story, microsoft is the cheapest of the tech stocks. what are investors looking for

from these figures? >> microsoft is altering the dividend game. what they're showing is starting to pay a dividend isn't a sign that the company going ex-growth, but that it's cash rich. and this could play well into their favor. >> jackie, back to you. and still to come on the show, as argentina's decision to nationalize ypf continues to cause waves, we speak to the ceo of a resources firm which operates a large silver mine in arrest agagentin argentina.

welcome to the show. headlines from around the gleb this morning, here in the united states, investors will focus on a tee owe we trio of dow owearn. >> the business climate index posted surprise increase in april. >> and imf seeks to mcits fire power confident it will hit the $400 billion target, but the na bigger say before they cough up more cash.

earnings after the bell having positive sentiment. >> when we came in, equity markets were higher, but we've taken a turn for the worse. in the past like 30 seconds, we've turned higher again. the uq markets as i try to salvage myself respect are still down as are the french markets. the ftse is leaving 0.2%, but the german market has shifted back into positive territory very slightly. smi up by just about 1.1%. we've had decent data in the

form of better than expected retail figures. the ifo sentiment index was better than expected, too. six months of gains for that ind index. a moment ago, we did see the the spanish yields on the ten year above 6%. . we were hovering around the 1.7% level right now in some of the bailed out european country yields are a great deal higher, but spain and italy where lots of focus has been as those yields have been at what are perceived to be unsustainable high levels. let's check in on gold and silver. this chart compares them to each other and their movement year to

date. we can see certainly that silver haas risen faster than gold over that period. why do you believe that silver's been outperforming gold? >> i think silver is a metal that has a duality. now it's moving with the markets in terms of the response to the economic situation. industrially, it then starts to play in its uses about so that when the economy is going good, it behaves like an industrial metal. and just now i think it's fundamentally positioned as a metal in pricing followed good position coming in q3, q4. >> i know you believe we'll see volatility continuing. how does this fit in to your economic view of the world? >> it will remain volatile while data remains conflicteded. and at the same time, investor

demand will be overshadowing supply and demand characteristics until we gain more clarity. so that's why the volatility will continue. and what i'd be interesting in hearing is from an investor perspective, the concern is that cost price inflation, especially wage in-nation in emerging markets might ease the bottom line and actually erode margins. is this something you're concerned about? >> we operate in argentina and that country is typically a high inflation environment. so we're continually managing costs. and it's something we live with all our life, that day to day management of cost issue. certainly labor rates is where we see it most. i think you're seeing in the capital market when people are building mines and buying equipment, those costs go in the rise of steel. but i think the margins are strong and healthy. i think the demand is being driven by investor september

the. u.s. is a big driver. >> and speaking of gold, when there is a lot of uncertainty in the market, we do see investors pile into the caommodity. but why are investors staying away from gold at the moment? >> because they're not sure of the markets. really the sent thamt we're getting from investors is a wait and see. people are unclear as to whether the u.s. will pull through. we've seen signs it's not coming through as strongly as we would like and the second quarter will determine third and fourth quarter. so i think for gold and silver, well positioned for a strong third and fourth quarter. >> as you bring up the

uncertainty is the key issue, wouldn't that be more of a reason for them to be hedging some of their investments and picking up some of these commodities now? >> i think that's true and the discussions that we had with them, you can see them walking through that almost as you sit down in front of them, they're trying to see which way to go. but most of i got a sense that they're just working on a strategy 120 sto where the markets go dictate how that he place their money third and fourth quarter. >> obviously the nationalization has been a big story this week. it must raise the risks for you. >> we've been there since 2006 we have the largest silver mine. the current does work with an unorthodox economic model. you have to learn how to work with the bureaucracy.

ypf is quite a specific issue around energy. and when you look at what the government's been doing, it's trying to manage the peso to u.s. dollar exchange rate very hard and in some respects it's different. almost trying to stop their dollars going out. so what's happened with the ypf is quite specific. i think in 2011, it switched from being arre net importer of energy. that's really what's driven this situation. >> give us real world insight. you talk about the bur rock creation. how does the relationship work between a company that does business there and local bureaucrats or national bureaucrats on a day to day basis? >> in truth, it's not that different. it's much a similar country.

you have to understand motives and what you have to do to get business done. so for instance, last year they introduced an import restriction, so we could import parts in to the country. you had to apply for a license. rationale was if we can stop parts being imported, we can grow our domestic business, and then a much better position. and that was immediately put in place without the support of building the domestic positions. we had to work hard to get our license. but it's just that difficulty of timing. once you understand fundamentally, fundamentally,s's not different than other countries. >> lots of countries where many people have said that's the same way. okay. john, hangs for coming on. appreciate it. just want to update you on the latest ypf story. spain says the european union will make representations on its

behalf the nature remains in-clear, but the trade secretary says he expects additional backing if from memb of the g-20. jackie. >> meantime madrid has also won the backing of the united states against argentina in the tussle over ypf. after talks on the fringes of a m nato meeting, they'll assess how institutions such as the world bank and imf can be used to excerpt pressure on bay knows airies. we'll leave you with a look at the u.s. futures.

welcome back. you're watching "worldwide exchange." the bric nations led by brazil are demanding for more voting power in exchange for fresh cash injections. so far the fund has received pledges of support amounting to $320 billion from europe and japan. the imf would like brazil, russia, india, china and south africa to further strengthen its war chest. the imp is still on its way to beating it target p. japan's finance minister is

saying it could exceed the amount eventually. dows remain as to whether the imf can off europe's debt problems once and for all. >> the christine lagarde says she's pot concerned about needing immediate help. she said spain in particular has taken serious membasures and wot need any aid for the time being. a report says the government could create a bank that would hold toxic property assets dollar to the model adopted by germany. i know we have a graphic to show about the bad loans and bad

debts in spain. wi bad debts up to 17 year highs. it looks like the fundamental problems in the spanish economy is still yet to be worked through the system before spain can get a line drawn under it. >> it's highlighting the fact that debt dynamics are deteriorating. and the reason behind that, we have incredibly elevated levels of unemployment. austerity will just increase the risk going forward. the phrase that kind of sums this up is that debt has been the open i can't tell iat. and you can see this very well with bad loans as a percentage of spain's overall debt reaching these high levels. >> the three year -- cheap three year money, the ltro, was one of the issues that was really cited as help to go assume the

markets. still even today, the overnight ghoss for the ec bchb -- anyway there any point to more support from the ecb? because they're increasingly forced in to apgs where expected to kind of keep things going. >> ltro did not solve the structural problems. the banks have still been remained cautious. and instead of reducing yield which is it did do initially and provide a level of support, what's happened is over the last month, effects are fading and yields are rising by a percent over a month. so what that shows is that the effects are fading and they need to look at a different way to provide support. the concern is the ecb's mandate was for price stability. instead of propping up the

banks, what they've country is funded a carry trade. so they've been offered cheap fund to go buy their open debt. >> i want to bring the foe causcuss back to the ltro and what we're seeing across europe. reminds me of the situation in the u.s. that brought us to potentially three rounds of quantitative easing. where does it end? >> what's needed is to have -- to see europe actually start to grow again and to see structural reform. so again, that's been focus on short term stop gaps, the term kicking the can down the road is very much overused now for good reason. instead of tackling the issues if place and trying to deliver a europe that's stronger, what's

happened is that money has been pumpeded in, and not tackling the problems. so another round of ltro, will that really help. short term, it might boost confidence. longer term, will solve the problems. no, you need to see from a government to go. perspective structural reforms. and. >> coming up next on the show, we'll preview the day ahead on wall street where traders are getting ready for earnings from ge and mcdonald's. 

ge forecast to earn 33 cents is hair on $34.7 billion in revenue. investors remain focused on the health of ge capital and the continued overhang of bad mortgages and delinquent credit cards. moody's done graded ge earlier this month. mcdonald's reports at about 8:00 a.m. forecast to earn $1.23 a share. this january mcdonald's said it would hike prices. mcdonald's and general electric both trading higher. meantime, microsoft's third quarter profits slipped 2% on weak performance from the country's entertainment unit which makes the xbox and other devices. but revenues topped forecasts as sales of windows 7 are holding up. consumer sales were flat, but corporate pc revenues rose 8%.

microsoft is getting set to launch windows 8 which is expected to be tablet friendly that's later this year. microsoft rose 2% in the after hours session. >> sun disk first quarter profits fell 49% on higher costs and lower revenues. it's reported weak earnings for five straight quarters now. its second quarter outlook will miss analysts forecasts. is an dusk shares fell 9% in the after hours trade in frankfurt. the stock is down by 14%. >> let's's turn our attention back to what's on the agenda for today here in the states. apart from general electric and mcdonald's, we'll also get numbers there honeywell, kimberly clark. and joining us is the director of portfolio management. chris, great to have you with

us. so we've been seeing a should you of good earnings coming out from the corporates. my question to you, also seeing mixed economic data at the same time and that's sort of been weighing the markets down a bit. so why is the data taking a longer time to catch up? >>. >> i think you're seeing a technical trade. 1420 level, a series of higher lows and high are highs all the way up to the beginning of april and then all of a sudden, we've got it this pull back to the 1370 level. a little bit of support there in the s&p, but we're not above -- we can't get fwhoabove that psychological barrier of 1400. >> and when you talk about those sort of psychological levels, very key, closing below 13,000

on the dow yesterday, nasdaq nearly 8 points above 3,000, another psychological mark. how long do we whoever around these levels? >> it's a matter of pick your poison. asia is slowing. europe, we have the spanish bonds peaking above 6%. i think that it's really no yields in the treasuries here in chicago, so it's a matter of with things bad in housing and as far as the jobs claims go, it's really about where to go and people really don't mona right now. so people are looking to the u.s. to lead to be the engine of growth and right now just doesn't seem to be happening. >> we have seen great strength in u.s. equity markets. what do you make of those levels? >> the main market pendulum has been the outlook and the

possibility of qe. what's needed for qe to be agreed is a weakening economy, but for it to be off the table completely, you need to see 200,000 jobs created per month. so while bernanke remains very cautious, the outlook is still being hotly debated and is driving market swings. >> all right. our thanks of course to you both. a and that's it for today's show. i'm jackie deangelis in the united states. >> and i'm beccy meehan in europe. thanks so much for watching.

jet begins engines and hamburge hamburgers. key economic barometers. microsoft beat the street as pc sales look to be holding up better than expected. but european questions once again hang over the global markets. finance leaders meeting in washington, hope to change all that. right. it's friday, april 20th, 2012, "squawk box" begins right now.