welcome to the program. headlines there around the globe, european stocks recover ahead of three key bond sales in italy, spain and the netherlands where analysts are zeroing in on the dutch auction after the collapse of the coalition government. >> australia softer than expected cpi data gives its central bank more room for a potential rate cut as early as next tuesday. >> james murdoch faces the cry in london and his father will give evidence tomorrow. >> and in the u.s., investors

may split their focus between the fed and apple, earnings after the close. you're watching world watch exchange with ross westgate and christine tan. coming up, will nicolas sarkozy's latest swing on the right payoff some we'll continue our election coverage from paris in about 15 minutes. we'll also have an exclusive interview with volvo as they sign a development deal with china. and how much is mark zucker man's instragram deal weighing on facebook's profits? we'll break down the numbers for you. all that and much more. meantime, something more interesting. ross, with how european stocks are doing. >> one hour in to the trading day and trying to claw back some of those losses. a heavy day of selling of course

yesterday. as you can see, green on the board beside me. stoxx 600 up 0.7% of one%. ftse 100 down over 100 points, 1.8%. xetra dax fell over 3%. currently up around 2/3. contact 0 up 0.8% after falling 90 points yesterday. we'll be looking at a spanish auction a little bit later. let's just remind you where we is an as far as the key auctions that we're focused on. in italy, that's the last one coming out today. we've got a inflation linked btp sales. the real test will be on friday, but yields you can see 5.73%. just coming down a bit from elevated levels. in spain yesterday, apologies for the fact this isn't working, but we did see yields back over 6%. they've got 2 billion in

t-bills. average yields expected to almost double in both the lee and the six month t-bill from the auctions that we got in march. so about 0.75% on the three month and six month trading around 1.6%. you can see the yields just below that 6%. we managed to recover that board for you. we know moodys came out yesterday and said there is a credit negative effect the fact government had to resign because it couldn't agree on austerity measure, but they have maintained a stable outlook on the aaa rating. there is a dutch auction going on right now. 2.5 billion of debt between two and 25 year. should get pretty good demand bearing in will mind the small size of the auction. bund yields still you will are a low levels of 1.67%. as far as the currency markets are concerned right now, euro-dollar 1.3176. the yen has benefited from the sort of safe haven dollar-yen.

aussie dollar undoubtedly weak. we'll talk about will. inflation weaker than expected, now seems certain that the central bank will cut rates on may the 1st. and sterling up 20 month highs against the euro and dollar. 1.6142. public finance data coming out in under half an hour. here in asia, a little bit of risk aversion not willing to dip in to the markets. more concerns, more worries about whether eurozone can actually push through austerity measures. also we have also news coming out that the boj meeting later this week, ped meeting, holding the markets a little hostage. very choppy session in shanghai com positi composite, up and then down, up and then down. hang seng investors using weakness in this market to accumulate some stocks. nikkei 225 is down 0.8%, boj

meeting this week kept trade cautious. central bank expected to set up its fight against deflation and also increase the size of itses asset purchase program. that weighing on sentiment there. kospi off 0.5%. australian market as ross mentioned, cp about i data coming in more benign than expected, all building up the case for a rate cut coming up as early as next tuesday. the aussie dollar sliding a little bit as a result. and the sensex trading 0.6% higher. so a little bit of mixed session, but in a lot of wait and see as to what's happening over in the eurozone. >> just remind you, as well, moody's has warned that the netherlands chance of the government is killing credit negative for the dutch sovereign as the rating agencies says the rating is under threat. queen of the netherlands is considering the resignation request of the cabinet. finance minister says holding on to the prize rating is important for the country's image. >> the perception in the financial markets is always important. we do not refer because we do

not pay also for our rating, but perception of financial markets is important and that's why also i have the message for financial markets that through decades, the netherlandss always have shown fiscal solid budgetary policy. and this will not change. >> and joining us today is now senior economic adviser at pwc. andrew, good to see you. we had a combination of factors of course during the last 24 hours. more depressing data in terms of eurozone pmis and then the politics coming on not only the french election, but also the dutch cabinet resigning. how much more difficult is the politics making the economics? >> well, i think the financial markets are very nervous about the euro area in any sort of political disturbance i think reinforces that. of courses as you mentioned, we had relatively disappointing growth figures.

i'm not sure the growth figures are that sort of big news in the sense we expected the first half of this year to be difficult to the euro area. i think the challenge are will be do we see better new as we go through the year, do we see germany and some of theoriented continue to pick up. it's that core of europe think that people are looking towards and that's are probably why political problems in the netherlandss, that's the core european country, the french election, france are seen as part of the core of europe. that's why the financial markets are nervous. >> are we seeing unraveling already of the fiscal compact which was trumpeted so much back in december and what does it mean for investors' nerves? >> i don't think we're seeing an unraveling. governments are trying to keep the fiscal policies on track. but it's very difficult.

again, the current economic environment. one thing that people don't notice is that the aggregate position of the euro area and the european union is not too bad. i think deficit to gdp ratio is about 4.5% for the euro area as a whole. >> that's the whole point. it's all very well if thing a agree xwat is great, it's just that we can't count it as an aggregate because there isn't one debt issuance central bank. there isn't one sort of country. s . >> that's right. and some of the highest debts are in in the countries with the weakest position. but i think they'll stick to their policies and try to weather the nervousness and we have to get through the french election and the period of uncertainty in the netherlands. >> andrew, this is christine. clearly a period of uncertainty it for the eurozone, but is there something that investors can hang on to that progress is being made somewhere, somehow? >> i think what european governments have got to do is

try and take a leaf out of the uk's book. i think one of the things that's help willed the uk in its fiscal program is basically we've stuck to the plans that were september out by the coalition government a couple years ago. and i think what markets are looking for is governments to sick to their plans. when they see political uncertainty, i think it causes them to worry that the plans will change. and it that's what market is most nervous about. >> okay. andrew, good to have you on the program. any thoughts or e-mail, send them in. or you wican tweet, as well. the czech prime minister has called for a vote of confidence this bring after in-fighting amongst the ruling coalition has threatened to cut the budget and implement their own plans. thousands have taken to the

streets to protest over the government's austerity measures. and plenty of stocks in focus today in europe. michelin shares you can see trading much higher after a string of analyst upgradeses. those moves on the back of strong first quarter sales figures. we saw first car revenue up over 5%. nordes also in the green. bank posting profit in line with expectations because of cost cutting in the first quarter. the bank has warned of regulatory uncertainty. and kpn says it sees improvement in the home market. shares also higher on that news. we'll get on to know var ris in a second, but first let's bring you the results of the dutch auction. it sold 1 billion euros of july 15, 2014.

and just under 1 billion of the 2037. the average yield this 2.78%. so they raised the money they wanted. i haven't got a comparison for how the yields compare. euro-dollar just under the session high post that. we thought they would probably get the auction away fairly easily. initial reaction is, okay, got it done. wasn't a huge amount of money. let's come back to that. we'll keep our eyes on that. meanwhile novaris shares trading lower. swiss drug maker reported first quarter results slightly below forecasts. she's made her way back from the netherlands to switzerland. carolyn joins us in zurich. i know you're keeping an eye as well on the dutch auction. >> definitely. given that it was a relatively

small, it was well covered so we didn't expect too much of an issue with that. now let's move on and and you can about novartis because shares as you mentioned are done by more than 1%. the biggest decliner on the swiss market, that's after it the company posted mums which were worse than expected. even though the ceo said, yes, we noouf it was going to be a difficult quarter, but still net income for the the first quarter dropped by 17% and sales were also down 2% at $13.7 billion. there were a number of factors hitting the bottom line specifically. there was the manufacturing stoppage in one of its plans in the u.s., that was for otc products. the ceo said that operations will be resumed in may. but some analysts have pointed out getting back to full capacity may take longer than expected. we did see weakness specifically in its generics business. but let's not forget there were also a couple of bright spots.

phrma sales coming this better than expected at $7.84 billion. and i should point out that newly launched drugs did very well. share of revenues of new products in phrma was actually up to 33%. >> this dutch auction, trying to raise 2.5 billion. so they're in the middle of that target. they didn't raise the full amount that they were looking for. so about 500 billion shy on that. christine. >> and of course we're keeping our eyes on what the australia central bank is going on do next. the rba could cut interest rates as early as this upcoming policy

meeting next tuesday. expectations for a cut have intensified after the country released the nine inflation data much softer than anticipated. wayne swan treasury says no risk of inflation. and underlined the goal of returning to budget surplus. >> with growth returning to trend, it's appropriate to return the budget to surplus despite all the challenges that we see with an economy in transition. rushing returning to surplus gives the reserve bank maximum flexibility when it takes its decisions independently of the government. >> australian dollar dropped to a two week low against the greenback. the rba signaled it might flash 4.25 percentage cash rate provided inflation numbers were soft. let's get analysis. scott has them from sydney.

good to have you with us. is it signal that the 25 basis point rate cut at this next meeting is really a done deal? >> i think it's nearly certain given that the rba's forecasts have a number like 0.625 in their forecasts. and this came in at well below that. sort of 0.4. so, yes, i think it is a near certainty that the rba will trim by a quarter percent. >> what are the chances of a 50 basis point rate cut or could we expect another rate cut at its next meeting in june? >> given the way the rba has aektsth acted over the next few years, it's made it clear that outside of emergency operations, 25 basis points move is the more traditional response. so we would be looking for a quarter point cap next week. and then a follow-up move in june. but you couldn't completely rule out a larger 50 basis point move. >> of course the underlying

concern is inflation. australian treasurer wayne swan has signaled the risk of inflation is unlikely. do you agree arrest and what's your inflation outlook from here? will it continue to moderate into the next quarter? >> i thinkle moderate, but even though it had not much inflation over the next quarter or so, we're not really a long way away from the bottom of the rba's 2% to 3% target range. so if you look at underlying inflation, a little over 2, could go a little below that's still a long way away from deflation. so we'd be looking for the rba to cut 50 basis points over the next few months before going on hold because we think inflation will drift a bit lower, but in the second half of the year, we'll see it moving up again. >> i think one of the -- this is an indication that some of the pressures that we saw in inflation last year are beginning on abate and that will help purchasing power in number

of economies including australia. i think one of the concerns in the uk is that our inflation appears to have got stuck at a much higher level at 3.5% and that had been perhaps quite a challenge for the mop taker policy committee. >> why is uk inflation stuck higher? and has consistently during the down turn -- >> when i was on the monetary policy committee, i argued that the underlying influences on inflation were stronger than the committee was acknowledging. they were always expecting inflation to come down to 2%. i think the delayed impact of the big fall, persistent services inflation and global pressures were contributing to the higher rate than acknowledged. soe so i think it will be difficult to get it down below 3% as we go through this year. paul tucker was warning about that. and this seems to be a bit of a

shift of opinion in the monetary policy committee of getting a bit more concerned about the inflation outlook. now, if you see a big strengthening of the pound or we see a big fall in global energy and commodity prices, maybe those concerns will abate. but apparently with the oil price still around 120ed a barrel, the pound hasn't appreciated a great deal, i think it will be hard to get inflation down to 3%. >> getting back to australia, outside of the mining boom, other engines of the economy appear very weak. we saw retail sale, consumers are reluctant to spend. would that rate cut be must have to get people to feel good about their economy and start spending again or should the government be doing more? >> i think outside of the mining sector, i wouldn't say things are disastrous, but they are running a little bit below trend. i think if we do get another couple of rate cut, probably will start to lift consumer

confidence a bit more and we'll start to see spending. but retail has been very weak because people are spending on other things. but generally, yes, i think it will be enough to help the economy into the second half of the year. >> scott, thank you very much for your time and insights. the other story we're watching happens to be in china markets ended flat after a very volatile trading session. small and mid-sized caps fell after a report triggered delisting fears for the country's poor performers. tracey chang has the details for us. >> that's right, thank you very much for that. took quite a roller coaster ride today, composite briefly in the money this morning, lifted by major property plays after local media reported that beijing is likely to make preferential policies for first home buyers permanent. mainland indices turned sharply lower in the last hour of trade with small and medium sized companies reading the market

fall. investors sold the shares on concerns about growing delisting risks faced by these companies. they are more vulnerable to china's economic downturn and also the smaller bourses amended its delisting rules tightening trading criteria. and the foreign exchange regular late tore said the government will strengthen supervision of hot money and they will fight against any unnormal fund flows. but in the end, the shanghai composite did manage to reverse earlier losses ending the day just right above the break even point. now over to ross in london. >> okay. still to come on the the program, james murdoch prepares to testify in london over allegations of phone and e-mail hacking at british newspapers a day ahead of his father. r.

first round of the french presidential race, can sarkozy win any of those 18% who voted for the far right? stefane has more in paris. >> as expected sarkozy is now trying to convince the extreme right voters to choose him.

speaking this morning on television, sarkozy says that france cannot keep on receiving so many foreign people and that bringing down the borders was a mistake. he also proposed to implement a french language test for all people willing to settle down in france. so clearly sarkozy is campaigning very much on the extreme right. not a big surprise. it was very much expected after the result of the first round of the election. according to an opinion survey, french people about first round were mainly focused on spending power, unemployment and social protection. immigration and security were only in the seventh and eighth position. but for the extreme right voter, they were the two main concerns. so nicolas sarkozy has decided to bring it to the top of the list to please the voters from the extreme right.

ross. >> okay. thanks for that. james murdoch is in court in london within the hour.former chairman of bskyb preparing to testify in the press ethics hearing. katherine is covering for it online. what are the essentials of today? >> well, what we think is going to happen today is that james murdoch will be grilled very closely on just when he knew that phone hacking went beyond that one rogue reporter at the news of the world. has previously said that he failed to read a key e-mail from news international legal and the editor because he was looking after his children on sunday morning and of course he's also look lick to be grilled of whether he knew about alleged payments to public officials and of course just how far the

political reach of news international went. >> so we'll take live stream of this and he's expected to begin his testimony what time? >> 10:00. and i'll be live blogging and tweeting. so do follow for more updates during the day. >> we look forward to that. >> tomorrow and thursday definitely going to be steamily interesting. >> all right. we'll take a short break. still to come, we'll get the latest borrowing figures ultimate of the uk.

headlines came, key bond auction ps if spain, italy and the netherlands in focus. dutch bonds hold on to gains. >> and australia softer than expected cpi day it take gives central bank more room for a potential rate cut as early as next tuesday. >> james murdoch faces questioning in london. his father gives evidence tomorrow. >> and in the u.s., investors split their focus on the fed which begin as two day meeting and apple which reports earnings after the close.

>> we're about to get march public borrowing figures out of the uk. for most of the year, public borrowing is significantly undershooting last year's total. a drop in receipts, so where have we finished up for the year? net borrowing x financial sector intervention, 18.174 billion. that is bigger than the 16 billion polled. and slightly more than the 17.9 billion march 2011. so the cumulative april to march 2011/12 public net sector borrowing, 125.974 billion. which funny enough is bang on, andrew, the 126 billion that the rba were forecasting.

>> maybe they had some early data in when they made hair foreca their forecasts. but the fact that it's broadly in line i think suggests that we're on track to gradually get the deficit down. january was generally a good month. departments trying to spend their budgets by the end of the year which contributes. so it's the handle figure we need to concentrate on. that's in line with the budget forecasts. so i think not anything to get airbly worried about. >> public sector net debt has still risen. that is the highest since records began. so it's worth pointing out even with all the talk of austerity, total debt is still rising. >> it's not higher since all records began because i think debt to gdp ratio at the second

word war w word war w world war was 250% of gdp. so it's happen manage all countries. if your deficit is above a certain threshold, you can't avoid the ratio going up. so you have to get it down below 3% to 4%. >> part of the offsetting of course government austerity has been the bank of england keeping rates very low and of course implementing qe. you came out this week and said you think actual willy it was significant adam posen didn't vote for more qe for the first time in a long time. you think -- you've always been a hawk. you said interest rates may be rising sooner than we think. how much sooner? >> well, i think what you said about inflation going back to the first half of last year has turned out to be correct. i think i said that inflation would prove more stubborn and the underlying forces were

stronger. and this is now something that's beginning to trouble other members of the mpc. adam posen has dropped his call for qe. i inflation could stay well before 3% for the rest of this year. other members have made a few cautionary comments about in-nation. so i think it's going to be a bit of a challenge for the monetary policy committee about they find that inflation once again doesn't come down below the 2% level or to the 2% level. the forecast for the summer was around about 1.5%. we're a couple percentage points above that which is a big difference in the low inflationed worinflation world that we're in. >> despite suffering set backs, novartis numbers affected by production output. chief executive says sales

should support numbers of 2012. he expects multiple blockbuster state tuesday this year. head of parma oig and research from zurich, andrew, thanks so much for coming in. they've had delays in production. generics aren't going as well as they thought they were. is this tempt area or is this something rather more permanent? >> no, actually, some of these elements are temporary, some of them are permanent. so the ones in the otc business, that's a temporary one. it's a problem with one of the manufacturing sites that should be up for production by mid year and then revamp and have output going out as of next year. manufacturing hammers it, that's temporary. but the constant pricing pressure does slow down the business that for permanent basis. >> does their model work, the fact they're in both gentleman miles per hour ricks and trying to do block busser, as well, how well is that model working for

them compared to others. >> it is a unique model that this they have both skra miles per hour ricks and the brand of drugs in one basket. it makes them -- giving them a better offering in some countries where they say they can offer cheap knockoffs on the one hand and hundred they'll get t branded price for the new drugs. but it is a somewhat mix willed mod model and it gives you the indication that their trust in the brand and r&d is somewhat tantsed. >> what's your thought on this stock compared to others that you cover? >> we do prefer roche over novartis. we think the r&d cape aabilitief roche are powerful and they're showing that they actually can execute that. so we're looking at their revenue basis being able to revamp growth while novartis

with the more diversified business model, it is doing the right thing by taking gentleman miles per hour rick generics and vaccine business to slow down the pressures on branded products. but they need the diverse i to try to cover up the slowdown that they have in phrma. phrma has some support. there is some r&d innovation going on there. but it needs more. they have a lot of products going generic this this year or next year. >> andrew, i'm just wondering, how much consolidation is there in the phrma sector as an a investor? is it an opportunity to get in at some stage because of consolidati consolidation? >> yeah, that's an excellent point. the consolidation is a theme that is a paired theme.

it comes together with the r&d or the lack of r&d productivity in the far made business and also the phrma companies because they're under pressure from all these patent expirations. they're losing revenues and therefore cash flows. so they're trying to bolster their r&d capabilities by doing acquisitions. we also see pfizer digesting things that they don't think are core anymore so they have more opportunities and more cash to go after then more core associated investments. so we do expect this theme of m&a to continue. we saw it with roche, with i will lum in a oig. that deal didn't work out, but it doesn't. but that theme will continue on. cash flow is still very between wi good with these companies. >> so certainly a sector to watch. andrew, thank you very much for your time today.

>> ecb policymakers have been reinforcing the rationale behind the bank's nonstandard measures. the ecb's liquidity operations present a window of opportunity for reform across the eurozone. silvia is still in berlin. and looking at those comments. it's a window of opportunity to which the politicians don't seem to be taking advantage of, silvia. >> it looks like it at least if you look at the political environment that we have at the moment. we look at the political vibes out of france, the government crisis in the netherlands. germany still a sort of safe haven in that respect and that's what you you also see with yields. but there's a great fear that once again politicians might pay lip service to the need for reform and they might actually decide on reforms in brussels, but before it turns in to law in will berlin, amsterdam or the

hague, rather, paris, rome, athens, and other countries of of the eurozone, that's a different question. this is also the fear that you hear for example from angela merkel's council of economic advisers. we caught up with one of the down sers, one of the so-called wise men, and he also said the ecb has bought time, but not more. and be aware that playing with the idea of breaking up the eurozone is a very dangerous thought. here we go. >> the ekb has bought time and has very effectively bought a little bit of time, but during that time, the european governments must come to their minds and get a good solution plan going and a good solution plan would be one which balances model problems on the one hand and refinancing problems, acute problems on the other. >> do you think the breakup of the eurozone or some maybe

countries like greece leaving the eurozone is, a, on option or, b, a danger? >> i think we should be very afraid of the european area that is the euro area breaking up in an unstructured fashion. one country leaving a weaker country that faces refinancing costs which are high leaving the euro area would be quite dramatic. and also a strong country like germany leaving the euro area would be a dangerous endeavor. i think we can't really foresee the economic consequences, but the political consequences are dramatic and i would rather see a rescue plan for the euro area than that happening. >> ex-bundesbank chief economist and ecb chief economists, one of the creator of the euro so to speak, he's said it all along over the year, everybody who joined the euro must know that this is a one way street. there is no exit point. it would be economic fiscal and

political suicide. and i think that's pretty much the line that we still have to take. doesn't mean it won't happen, of course. >> absolutely. silvia, thanks for that. andrew, what's your thoughts of what's going on at the ecb? potentially the internal divisions, in-fighting there. >> yeah, i think the statements there are correct. the lrto is a window of opportunity. doesn't solve the problem. and so that governments do need to demonstrate to the markets that they are on a declining trajectory for debts and deficits. they've got the benefit of extra liquidity from the european central bank to help the banking system in the meantime, but that won't run indefinitely. and then obviously always different emphasis within a central bank -- >> if they had to come back, they would, this they don't have a choice if they had to accidentally liquidity operations? >> i think central bankers will always say we'll assess the

situations at the time. so we'll have to see what happens help. >> all right. christine. >> in india, parliament kicked off its budget session today and of course just a couple hours ago, the debate expected to get heated as the opposition slams the government over price pressures among other things. what you can tell us? >> you're absolutely right. it promises to be a stormy session of the indian parliament which did reconvene today for the budget session. this is an important session because we'll see the finance bill being passed. it finance bill has seen a lot of controversies specifically with regards to the amendments that have been proposed and that's something that foreign investors have been crying foul over that something that has been brought up in the conversation between timothy geithner and the finance minister of india. so far the government standing its ground saying that they'll go ahead with the retrospective

amendments as is. also expected to be clarifications as far as the general anti-avoidance rules because this is again something that foreign investors were seeking clarity from the indian government. so it's an important session of parliament and we'll keep you posted here. >> thank you very much for that quick update. ross, breaking news? >> yeah, i have the result of the t-bill auctions. shouldn't have a problem getting the three and six month t-bill, but they are indicative. testify's sold 1.9 billion in total. 0.72 billion of the three month, big jump in the bid to cover, 7.6 versus 3.5 at the previous auction. and i can't see if and i have yield on that. the yield is set at 0.72%. the six month, they sold on the six month t-bill just over 1.2,

i think. and it was 1.08 previous auction. a bit more money gone into that. bid on cover 3.3. 5.6 previously. the yield on the six month, if i can find it, has gone to 1.62%. again, sort of what was the cated in the gray market. so yields have effectively doubled on the three and six month money, christine. >> in sweden, chinese premiere formalizing a deal with the china development bank. chairman of volvo cars has spoken with cnbc. >> and we've been talking about the pill har of economic growth here and one of those being auto industry. and on the other hand, nothing highlights the importance of that economic development and the auto industrial in tandem

than premiere wep's four day visit to europe. we started off with a freshen investment if voks washington on a volkswagen and today he'll be at the headquarters of volvo. volvo will be signing a memorandum of agreement with china development bank, one of the biggest financial institutions in the world. i talked first to the chairman of volvo cars here in beijing about the deal. >> it will be also first agreement we sign with china development bank. it's the largest bank of the world with the help of the chinese government. they have been supporting us and we'll sign the agreement together and getting support for not only all of china, but globally. we'll have a good management team and good marketing, and

with support, we're looking for good growth in the future. >> for a lot of foreign carmaker, china is already their biggest market. when will it be the biggest market for volvo? >> we're looking at 2014. and once we have local production and selling the local cars, nobody else in china can be successful if you have no local productions. today we have -- >> the government has now put out the number 50 million cars hybrid or electric by 2020. the number keeps going out. how is volvo going to play into this ambition shall. >> we have about 480 in shanghai right now, some focused on education and looking to localize hybrid into the chinese market. >> when can we expect that kind of localization? >> we're still working on that. do not have a time right now.

>> you c >> you can tell me about the new brand that you'll have to come up with as a result of the regulations? >> that's one of the requirements, we have to do the local plant, the electric vehicles. those are planned also to meet the government's requirements. but at this moment, we have no detail to announce. >> how would you position the brand, what would make sense for a company like volvo some and of course -- >> for us volvo a luxury car. ge is mass car maker and now focused on chinese market. so for us, it's very clear positioning and we have not an issue for us. >> volvo's success in china of course seen as a litmus test because they're owned by a chinese company. they bought the company back in 2010, and that was a $1.8 billion deal. back to you. >> okay. thanks for that. still to come, spain eye borrye borrowing costs have nearly

doubled. we'll be in madrid for the the latest. latest.

yields #%. it is worth noting post that auction result from holland the dutch bond market held on to the gains that it had already this morning in relation to the yield sort of widening out to the widest in three years in terms of spreads against bunds. cds have come in as well on the result of that. and we've just had the spanish auction, as well. t-bill auction, they've sold 1.933 billion versus the 2 billion targeted. yields, though, about double what they were a month ago. karen has more reaction for us in madrid. hi, karen. >> yes, just taking a look at the stock market reaction first up, pretty much tracking where it was before the bond auction results came out. so not a huge reaction.

also most of the banks also holding on to most of the gains. as you pointed out in these news items, we saw the yield a lot higher than what they were a couple weeks ago, but we did see yesterday that with pressure and coming to bear from the dutch political crisis as their operation marks is about about the commitment to austerity, that caused the ripple effect right through spain and we did see the increase on the ten year yield above that 6% mark, so there has been increased pressure on the borrowing costs here in spain. we must report that spain was one of the first to break ranks about meeting its deficit targets and it was just in the 24 hour window when the fiscal compact was signed. so there has been fresh concern. but what is key is the banking sector because this very much is a banking crisis playing out. so no surprise sweden's finance minister is saying will is a dark cloud overhanging the eurozone. in terms of the plan to try to fix up the situation, one is

housing in a special holding company. this is very separate to a good and a bad bank. it's about taking these assets and many of the banks have converted on to their balance sheets and putting them elsewhere without a contribution over the spanish government and that is key in terms of helping the government meet its deficit targets. ross s ross, back to you. >> thanks for that. andrew, just wondering whether the model in spain can work. they have to cleanse the banking system. they're implementing austerity when they don't have any freedom of their currency. how do you escape a debt sort of deflationary spiral? >> i don't think you can look at the situation in spain and italy and greece in isolation from what goes on in the rest of the european economy. i thinkle it will be much more difficult for those economies if the core european economies don't pick up. and hair growth prospects improve for this year. that would then bring more life back into the european economy more generally, so that will be

to my mind the key issue. >> the question is whether hair economies are impacting the core, right? there seems to be a suggestion from the german data that that's the case. >> well, off why youly it has some impact, but the majority of the european economy is the core countries plus eastern europe and scandinavia, they've been looking more positive. >> what about the uk? big gdp number coming up tomorrow. the consensus is only for 0.1%, so we avoid technical recession by the skin of our teeth here. is that too pessimistic? >> they're affected by quite a few erratics. difficulty measure willing construction output. if you look at the core section tors of the economy, manufacturing and services, you would expect a growth figure of 1.4, 1.5. so i think the underlying picture is going to be stronger than perhaps the gdp picture suggests and we've had evidence of that from business surveys and indeed from the labor market

where unemployment stabilizing has begun to fall. >> all right. we'll talk more about the prospects for the uk coming up. jiames murdoch preparing to testify in the press et you c cannic ethics hearing. kayla tausche is there. what's the key take away for came? >> luckily the rain hasn't set in just yet. we are awaiting the arrival of james for what could be six hours of questioning. remember, the inquiry has gone on for five months, but this is the first time the murdochs have been in the hot seat. they're facing mounting regulatory issues. we'll tell you what they're expected to say after the break.

>> we have slightly more time with you, so i'm going to use it. what in particular are you going to be looking out for? >> well, i think that the inquiry took a turning point in february when police dep pew it i assistant commissioner sue acres took the stand and said there was a culture of illegal payments, not only the news international media problem, but all across the uk media industry. and that's after testimony in 2003 where rebeckah brooks did admit they did bribe police to get certain stories. i'm interested in hearing whether it is widespread, what the totals were and what implications that could have not only here in the uk, but potentially as far as breaching of the foreign corrupt practices act go in the united states. now, the endemic hasn't really used the u.s. shores quite yet. there are lawyers who are representing phone hacking victims who are trying to make

some of those claims saying that either their clients phones were hacked while on american soil or other types of instances where american law could have been breached. i want to know all of those things and we'll definitely have what will look to be an unrelentsing day of questioning as james murdoch takes the stand. >> kayla, thanks for that. you can follow all her thoughts on twitter. and also on line at cnbc.com. european markets are up two hours in to trading session. more when we come back. we come back.

investors may split mayor focus on the fed which begin as two day meeting and apple which after a tumultuous two weeks reports earnings after the close. >> bond sales the focus in europe. dutch bonds hold on to gains despite the treasury raises half a billion less than targeted. and james murdoch face in-choirry and his father

tomorrow. >> and a potential rate cut as early as next it tuesday. nasdaq higher by 11 and the s&p 500 with a 4 point gain. political and economic concerns bringing the markets down. also walmart taking about 22 points off the dow. the dow closing 102 points lower. apple also closing lower ahead of that earnings report this afternoon. ross, how does it look in europe? >> after they hawill heavy sell yesterday, trying to recover this morning. currently up around 0.6%. follows an okay dutch auction

sale this morning. james murdoch is now taking the stand at the world courts of justice. we'll hear the opening statements for this. he's really the hor d'oeuvre for rue further tomorrow. >> the one change, the one correction that i'd like to mayor is to paragraph 3.21. . paragraph, i mention a meeting with david laws, a member will of parliament, who is described as the chief secretary to the treasury. in fact, i now realize that at the time of the meeting, in laws no longer held that position. i apologize for it that. >> he resigned on 29th of may, 2010 just so would we're clear recall when the meeting was? >> i don't. it was the sum are mer or autum 2010. >> i've made that correction and i'm grateful for the the obvious work that's been a put into the statement that you've made.

>> thank you. >> in terms of your personal career history, mr. murdoch, i can deal with it quite briefly, you were born in 1972 in the united kingdom. studied at harvard between 1992 and 1995. your early career was in new corp oig asia. 2003, you were appointed ceo of bskyb. december of 2007, and this is particularly material for our purposes, you resigned as ceo of bskyb and appointed nonexecutive man, but rejoined news corp as chairman and ceo of europe and asia and became executive chairman of news international. is that correct? >> yes, that's correct. >> and to at that time story up-to-date, in march of last year, you were appointed deputy chief operating officer and chairman and ceo international of news corp. which took you back to new york

beginning of this year. and on the 2nd of april, 2012, you resigned as nonexecutive chairman of bskyb. is that right? >> yes. >> and was your resignation related to your return to new york or was it for some other reason? >> as i stated at the time and announced at the time, it was for the simple reason that i wanted to avoid really becoming a lightning rod. some people were trying to conflate issues that had happened in the past at news international with relevance to my role at chairman as bskyb and i thought it was better not to provide a distraction for the board of bskyb and to resign my role as nonexecutive chairman. i remain a director of british sky broadcasting. >> thank you. and the other general point, as deputy chief operating officer

of that yous corp, you report to mr. chase carey, the chief operating officer, and not mr. rupert murdoch, your father, who is the chairman and chief executive officer? >> that's correct. >> that said, were there discussions or are there discussions from time to time with your appear about news corporation's business? >> yes, we discuss in time on time. quite often various business issues. >> i'll come back to that in due course, if i may. i'll invite you now to summarize what you say in answer to question six in your statement. this is page 02965 about your own objectives, philosophy and practice and the way in which you've undertaken your business role particularly in the you

united ki united kingdom. could you sum prize that fmariz? >> question six i think relates to general philosophy and practice, to summarize i would say that with respect to operating a business when i was chief executive of businesses, i tried to foster two things really. one was a real focus on the customer of the business, a real focus on viewers, most of my career has been in television and the majority of it remains so, and customers in a broad sense and really have a management culture that is both transparent internally, but also really working together to focus on the right issues. there's quite a lot in the witness same as well in that question with respect to governance, with respect to the role of business. do you want me to go into all of those things here? >> no, thank you. i do have a specific question,

though, about paragraph 6.6, 02966. about two-thirds of the way through, you saw you south sought to foster an open management culture in which sto executives would share information. >> yes. >> when you arrived here in december 2007, did you find an open management culture in news international? >> when i revved in 20 arrived 2007 the business had a handful of priorities to be tackled. one was the question around the business's general growth with declining reader ship and flat revenue, but also i wanted to have a tight management team that met regularly and that shared regular information about

the business and we instituteded regular executive meetings. i think the new part of it that i started when i was there was really to include in those meetings some of the editors so that issues around the newspapers and the titles themselves, programs, promotions, marketing, et cetera, could be discussed in the open amongst everyone. and we had monthly what we call title meetings in addition to the more commercial meetings where we met regularly. >> did you fear in december 2007 that you were being confronted with an open management culture or was that something which took time to instill? >> i think it always takes time. eve phase that a business goes through with different leadership at a different time will adjust to it. i did think thats of very different from british sky broadcasting which i had been running before. and i wanted it to be more collaborative. >> in your discussions for

example with mr. milo, did you feel he was generally open with you? >> at the time, i had no reason to believe otherwise. >> okay. 6.10, this is page 02967, you refer to the changes which have taken place since the summer of last year, the creation of a risk register -- >> could be facing around six hours of this so we'll leave it. if you do want to follow it, it is online. you can catch a live feed of the entire testimony online. or you can just follow kayla's tweets. she's been listening in where this is taking place. clearly he changed his testimony, but only because david laws was no longer in government. that's about it. >> yeah, and, ross, we should note that the last two times that james did appear in front of a committee of any sort was in front of a parly willment

taker committee in november. of course that -- heat wasn't laid off of him at that time with tom watson calling him a mafia boss, but he has yet to face an inquiry which is unrelenting. more than a dozen members and five months of testimony. no doubt those testimonies have gone into james murdoch's statement this morning which they are of course starting with as their opening material. you heard him first address the pact that he just recently resigned as executive chairman of bskyb. he remains director there, but resigned because in his words, he was a lightning rod as far as everything going on with news international. the last time that he faced a hearing of this sort in front of parliament, he was chairman of british sky broadcasting, chairman of news international, still on the boards of the sun and the times, even though he had relinquished some of his other nonnews corp affiliated board seats. so this is interesting to get

the picture of sort of his management style and why he has decided to step off of these boards and to remove himself from some of these situations. right now what they're talking about is the fact that when he joined the company in his most current role, we should say, will in 2007, that he did open up some of those executive meetings to editors. that will be a key issue as far as what he knew, whether any of those editors in any of those meetings which he proctored brought any news to the table about whether some of these hacking practices were going on, whether e-mail or phones were concerned. buts ross, we'll head into the press annex and have more for you a little bit later today. >> all right. thanks for that, kayla. present more plenty floor to come from there. and rupert steps up to the plate tomorrow. we've had some auctions this morning out in the uk. first dutch auctions this morning. pretty straight up test bearing in mind the dutch government has resigned. they raised half billion less

than the total amount they were targeting. the yields were okay. in fact cds narrowed a little bit on dutch debt and also we pulled back from the three year spread over german bunds. as far as the spanish auction was concerned, three and six month t-bills, yields did double pretty much as expected. they sold about the total will terp looki they were looking for. uk public borrowing 18 billion, which basically meant the target of 126 billion for withis fisca year was essentially met. andrew, when i look at this quota we have between borrowing targets, auction results, austerity measures and growth, as well, where are we all sitting here in europe compared to the u.s. and china? how is the rest of the world going to help or not help us?

>> the u.s. has done probably a bit better than most expected. there was some nervousness about the latest jobs figures. but i think the real powerhouse of the global economy these days is the asia pacific region. the ten largest including japan and australia have more global gdp. and that's been actually the engine that lifted the world economy out of recession in 2010. it's weakened a bit. some of the asian economies have been weakening. but there we're seeing interest rates being cut, speculation in austral australia. as we go through this year, we should get a bit more impetus from that part of the world economy. the big european economies like germany in the core, they're quite export focused. so that's going to be a key issue for europe whether asia picks up the emerging markets pick up. and if the u.s. continues to be reasonably stable, growth there is not spectacular, we should

see an improving global -- >> is that your u.s. -- >> actually what's happened in the u.s., i think it's the labor market in the u.s. that people are looking at as well as unemployment gradually edges down. whatever growth will seem to be satisfactory. >> andrew, good to have you on today. thanks for joining us. economic adviser to pwc. another auction result out this morning is the italian auction. they saw index linked btps. gross yield 3.355%. and the bid to cover ratio on that 1.796. so okay. i think okay. but we have seen a sharp price higher in italian yields. they have just dipped this morning from when they started. we'll be back with more when we come back.

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welcome back. time for your global markets report. we'll start here in the united states. looking like the dow will open higher by 41 points.

nasdaq by 14. and the s&p 500 by just about 6. this after we stau some losses in the session yesterday, but we trimmed those losses before we closed with the dow down 102 points. of course political, economic worries in the eurozone pressuring the markets here. concerns over an investigation into walmart knocking # 2 poin s 22 points off the dow. all the s&p sectors were lower. consumer staples and materials leading the way lower. >> ftse 100 down 100 points yesterday. xetra dax saw the biggest losses over 3%. up nearly a percent today. we'll be focusing on bond auctions which on the whole have gone fairly well. latest out of italy, 2014, the

yield okay. bid to cover 1.8. in spain this morning, we saw yields more than double on three and six month t-bill, but they did get the amount of money they were targeting. the good news really being in the netherlands, dutch bond sales this morning about 500 billion short of their maximum targeted amount, but we did it see the dutch market hold on to its gains after spreads yesterday widened out to these year highs between the dutch and bund benchmarks here that we've got. but they held on to the gains. we did see public borrowing more than expected in march. it meant there was no undershoot of the office of budget responsibilities targets. we did borrow 126 billion. euro-dollar a little firmer.

aussie dollar is weaker. inflation came down in australia more than we thought. and sterling continues to appreciate against both the doll dollar. >> here in asia, a mixed finish. once again worries about whether the region can push through with austerity. fears it could trigger cash strapped companies to go delisted. hang seng, a lot of people using the opportunity to scoops shares to prop up this particular market. boj expected to step up its fight against inflation and increase the size of its asset purchase program. kospi down 0.5%. of course the big story in asia, c chlt about i coming in more

than expected. all of this building up the case for a indicate rut next it us. so overall, a butt of a wait and see coming from the eurozone. that's it for me. i'll be back tomorrow. >> thanks, christine. >> let's bring you the latest on one of the top stories state side 37 mexican government saying it sees no need to investigate walmart over allegations it paid bribes to speed the permit process to build new stores. president calderon's office says if the actions are true, the issue is a local matter as bribes would have been paid to to state and local officials, but the government will help the u.s. in its investigation. reports say the just tig department has been conducting a criminal probe for months. michelle caruso-cabrera has been on the ground in mexico checking the pulse of how the walmart story has been playing out there. >> shares of walmex fell more

than 12% in trading on monday. in response to the article in the "new york times"ss alleging wide scale bribery. but here in mexico, many mexican business leaders shrug their shoulders and say they're not surprised to read that mexican government officials would accept bribes in order to speed up permitting processes. they are surprised that walmart would be accused of such a thing and even more surprised that when the allegations were presented to walmart of united states, that they were allegedly covered up. if indeed thesations prove to be true, this could be completely expensive for walmart in terms of government fines. the company is deeply concerned and are conducting an internal investigation. still to come, results of the bond auctions today out of the eurozone with a guest who says the euro could being much more sensitive to political

strains.

italian economics minister said effectively there is no room for any tax cuts after an

italian auction thorn which saw them raise pretty much the amount that they were looking for. if i can pull it up here, they sold 3.44 billion at auction versus their target. steve, yields spreads have come in today versus bunds. is that sort of a reaction to the widening out yesterday? >> yes, i think so. just a correction perhaps in the dutch case moody's may have helped a little bit overnight. reaffirming the aaa status and saying that starting off of a position of strength as it were. so that plus the auction, another auction this morning having obviously upset the apple

cart too much. but i still firmly believe spreads will continue to widen and reducing any periods of contractions in spreads. >> does that include dutch and french spreads, as well? >> the core in the eurozone is germany and nowhere else really. and i think that will continue to be the process going forward. so france, netherland, other countries, as well, i think you'll continue to see the spread pressure increase. >> we've seen spanish yields over the last week in and out of this this 6% -- 5.91% at the moment, over and above 6%. how much further above do spreads have to widen before the ecb -- data last week said they still had to step in to the market. where do they have to go before they say we'll go back into the secondary market? >> i think spreads have to get up it to the wides that we saw hate last year. so sort of -- which in yield term mis-spain at the moment would probably imply about another sort of 30, 40 basis

point increase in yields to around sort of 6.3, maybe 6.4%. so still actually some distance. i think that it's not necessarily just that sort of 6% that will be the tipping point. i think the yields will have to rise a bit further from will before we see the ecb back in. >> the euro holding up pretty well. what are your thoughts on the currency and where do you expect to go? >> i'm still expecting weakness down to 1.20 this year. i think what's particularly important for me is not so much the sort of political problems that we have within any country, we look at the netherlands most recently and the government falling over, it's more the political interactions between countries that i think is important. and in that p regaregard, the f elections for me are very important. it seems likely hollande wins that. because then i think that really

affects are perhaps quite significantly the interplay between france and germany and perhaps fraps aided by some of the other southern eurozone countries that are really calling on germany so sort of ditch hair sort of austerity at any cost type view. so that for me is the key interplay going forward. so post may the 6th if hl land oig wins and if he does some of the things that i think he will do and is suggesting in terms of relations with the eurozone, then that for me maybe a point when the euro might start to fall back. >> and here in the u.s., obviously working on a recovery, but things have been slow and steady at best. obviously bernanke dekicking ofa two day meeting at the fmoc. what do you expect to hear from him? >> not a great deal different. i expect the market's interests may be more in the broadcasts that the fmoc members come out with. i think market correctly interprets bernanke as being on the more dovish side of the fmoc

consensus. there may be some scope for perhaps some of that dovishness to pair back only very slightly, but the market is very sensitive to any are the of those sorts of hints. we saw back in march their same really didn't change very much, but we did see ten year yields in the u.s. back up and bond yields in sqgeneral back up qui sharply over the course of very short period of time. and we are vulnerable to that sort of reaction again if bernanke tilts things ever so slightly to the hawkish side. >> all right. our thanks to steve barrow at standard bank. coming up, our next guest saying if you're searching for yields outside the comforts of a home in the u.s., you might want to look at investment itinerary way south of the border. 

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headlines from around the globe this morning, here in the united states, investors may split their focus on the fed which begins a two day meeting and apple which of it ter a tumultuous two weeks for the stock reports earnings after the close.

>> spain apsitly s and italy ses jump. and jiames murdoch has begun answering questions. rupert gives evidence tomorrow. if you're just joining us, let's take a look at the u.s. futures and see how we're setting up for trade. looks like some of the positive momentum we're seeing in the international markets trickling here if to the united states. the dow could be higher by 46 points, nasdaq higher by 14, and the s&p 500 higher by 6. this after we saw 102 point loss on the dow yesterday. walmart taking 22 points off the dow. s also seeing apple close lower ahead of that earnings report today. in terms of our sector respect consumer staples and materials hit the hardest yesterday. >> just trying to recover some

of the heavy selling we saw on monday. the dax bearing in mind we had a 200 point loss and 3% in terms of -- back nearly about a percent of that. so not quite half. would he have been focusing on the auctions this morning. yields are higher both italian and spanish auctions. spanish t-bill auctions more than doubling, but they raised amount they wanted. same in italy. but they got the money that they wanted. an early test for the dutch today posted government offering its resignation late yesterday. but we have seen cds spreads come in a little bit post those auctions. but you have to bear in mind we saw spreads widen out quite a loss yesterday and there was a sense of taking profits today.

>> texas instruments first quarter profits fell 60% respect but still beat forecasts. sales grew in segments such as t.i. chips. the company expecting revenue growth to resume this year as demand has improved after several quarters where customers were cutting inventories. shares rose nearly 4% in after hours on that earnings report. right now up about 2.8%, 25.09 in frankfurt. and also netflix could be a big loser today. shares of the company dropping more than 16% in the after hours session on monday. netflix reported a first quarter loss that wasn't as bad as analysts expected. but the company is warning that subscriber growth for its key u.s. video streaming service will slow in the second quarter. it's expecting to add 7 million streaming customers this year, the same level as we saw in 2010. and facebook's revenues jumping 45% in the first quarter. more than a billion dollars.

but profits fell 12% as costs are soaring. the results included an updated ipo filing that was show has gone 82% of revenue is coming from advertising. facebook has 901 million active monthly users. the company confirming that it will list on the nasdaq, but isn't releasing details on the date or the price range of its ipo. we did learn more of course about facebook's billion dollar acquisition of instragram. it will pay $300 million in in cash and $23 million in shares for the web photo sharing service. joining us now to talk a little strategy, more about tech and also a little bit about bonds, kyle harrington, founder and managing partner of harrington capital management. and i want to start on bonds. when we were talking about searching for yields, if you're a yield unit hwill hunter, wher be looking? >> right now we focused a lot on the international markets. we've put money to work in kill lay. some of the yields, i don't know if you noticed the average

dividend yield is about 2%. when you look outside and you go to the international markets, you can find 200 or so companies that we like from a value growth orientation that are reasonably priced with a good credit rating, no sovereign debt, or no high debt to equity ratios within each individual company. and you can get 5%, 6% did ha d yields. so we're looking outside the united states for the return for our clients. >> and let's talk about tech globally. now some of the earnings reports have come out, we've seen a little bit of a mixed picture. are you bullish on tech? >> i'm bullish going forward. biotech and he can are the two areas in the domestic marketplace that we'll focus on. we believe in the entrepreneur and we think biotech knowledge and technology are the growth areas going forward. >> and we just briefly recapped some of the news coming out about facebook and some of the

latest details that we've been getting. are you worried about a slow down in growth? >> recently paid $1 billion for instragram. so that will definitely hurt profits going forward because you have to pay for this. but ad revenue being a big representation of the overall revenue, i still believe it's here to stay. i think it's a generation that has bought into this and makes a lot of sense going forward. >> you talk about being the growth, you have to stump up quite a lot if that growth. is it worth it? >> yeah, i mean, the way we'll look at this is from a valuation perspective. after the ipo is announced, we'll wait to see how this settles in and from that perspective, find out where we come in and invest in the security. i think it is a security that needs to be held in it your overall portfolio going forward. >> and obviously walmart dominating the headlines. we're talking about a lot of issues when we look at this

story. regulation, doing business outside of the u.s. borders. obviously 5% loss on the stock yesterday. do you think that declines will continue or that will be priced in at this point and investors will move on? >> i think it will be priced in. walmart's another example, once you get outside the border, there is some expectation of things being dealt with in a different way. however, i think long term walmart is again another staple of the economy and for a portion of your portfolio makes a lot of sense. >> kyle will stay with us, harrington capital. we'll get more insight from you. but more to come on the show of course. coming up next, investors have taken a bite out of apple with the stock down about 10% in the past two weeks. on concerns about iphone sales. but will the company restore some of its shine when it reports its earnings this afternoon? we'll preview those numbers straight ahead. straight ahead. >

welcome back. apple reporting second quarter results after the closing bell today. forecast to earn $10 a share on revenue of $36.7 billion. now, the stock is down more than 10% since hitting an all-time high two weeksing a go on some concerns about iphone sales. joining us to talk more about

apple is eric bleaker. great to have you with us this morning. let's kick it off with the earnings expectations this afternoon. are you expecting to seat the numbers i mentioned or are you expecting to see a shortfall on the reports of potential losses in iphone sales and a little weakness in the ipad? >> i'm expecting a strong quarter. you see analysts and people in a the media anchoring on the verizon story, that being that iphone sales were down 25% from last quarter on verizon. but people are for getting that apple is now a global story. if you're listening to this conference call tonight, you have to look for two words from tim cook. that's china and brazil. will is the number one and number three pc markets in the world. they're growing like gang busters for apple. and either didn't have the iphone or released the iphone at the end of last quarter. and i think with analysts overlooking this international growth story, i think have a

tremendous quarter once against beating analysts. >> and as we look forward, the growth picture is an important part of the story, but as well some analysts worrying that you'll see a little bit of can any balancization. do you worry about that? >> not really. first of all, where a lot of the worry comes from is the pc trackers. that strength comes from the asia pacific market. let's say they miss on mac sales and had 4.4 million instead of expectations of 4.5. that's the equivalent of selling a few hundred,000 less iphones than expected in a quarter where they'll easily best 30 million. so i think the max story line is definitely there.

it's interesting. but grand scheme of thing, it's just not very important. >> let me ask you a question. don't you think it makes a lot of sense that apple is sold off after this huge run up and do you think any part of it has to do with the fact that with the passing of steve jobs and new management turnover? >> well, i think what you saw with apple's rally, a lot of people talk about it becoming almost a momentum stock, but i think the idea here is that its analysts with them catching up with them having what i saw at greatest quarter in american history that i can remember. and sometimes adjusting expectations to that takes a while. at the same time, some of these stories that you see for selling off, you almost can't say it with a straight face. so when you have a stock go up 50% a quarter, it's entirely reasonable for there to be a

selloff. i don't think management is a concern quite yet. tim cook is doing a great job. he's an operational genius. and that's really what apple needs right now just because of ha their saz and scasize and scale. and the fact that we have seen a selloff, nothing to worry about, but we are expecting gloet on the apple forefront, is it time to potentially buy the stock? pretty outrageous price targets out there. >> yeah, it's almost become a battle of one upping each other in analysts world. i still think apple is a buy. i think they have a great story coming forward. i still think they have a huge catalyst towards the latter half of the year with the iphone 5 release and i think there's a lot of demand still to be had. still 5% market share in china. they're not on the largest carrier there. china mobile. tons of growth to be had. i think a continuing story line throughout 2012, that's still

stronger than any analyst expects. >> eric, size in itself particularly in terms of market cap becomes a problem eventually for a stock. and you just talked about the blowout quarter that they had. it's going to be really hard for them ever to repeat that. and the bigger you get, the bigger the ghk in revenues totally have got to be to justify that size. so i suppose the question is at some point the company has to mature just because it's now so big and it gets harder to get the sort of percentage increases. >> definitely. and that's what's kind of holding apple back despite their growth rates. it's hard for a company of this size to trade for much higher than the general market right now. but it's unprecedenced for a company of apple's size, also unprecedented for the smart phone market, for a product like the ipad which completely

disrupts the pc have krchlpc i. i think apple has a road map that still includes a lot of growth and if they perform up to that point and let's say their stock wasn't to move, you might have a company trades at about $11 to 12 times earnings with 150 billion plus in the bank. >> okay, eric, thanks. all will be revealed later on. james murdoch is facing questions for the press standards in london. he's told council that he was at sured employees were adhering to codes of conduct. murdoch has also said that newsroom governments was an issue for editors and legal managers. katherine boyle is listening in and tweeting on those

statements. @catboyle01 is her tweet. and you can watch it online. we have the live feed up. >> and in some of the other story has we're watching, the trustee overseeing mf global's bankruptcy case saying that he assumes civil fines for executives of commodity brokers who lose customer money even without evidence that they knowingly broke rules. he tus guys today at 10:00 a.m. eastern time. he also urges u.s. regulators to close a loophole for the cans held overseas saying that may have increased the short fall in customer funds when mf global collapsed. >> and a judge for the international raid commission says microsoft infringed patents for motorola mobility when building its xbox video game console. microsoft saying it will press on with the case, the full itc will review the judge's ruling and make a final decision in

august. meantime looking at the stock prices of microsoft and motorola abroad, slightly lower. microsoft 24.42 and motorola 29.05. meantime, coming up on the show, we'll look at the trading day head on wall streets as the federal reserve kicks off its two day meeting. investors awaiting indications of further easing on the way. all the details on that after the break. the break. [ male announcer ] this is genco services --

mcallen, texas. in here, heavy rental equipment in the middle of nowhere, is always headed somewhere. to give it a sense of direction, at&t created a mobile asset solution to protect and track everything. so every piece of equipment knows where it is, how it's doing or where it goes next. ♪ this is the bell on the cat. [ male announcer ] it's a network of possibilities -- helping you do what you do... even better. ♪ >> the fed beginning a two day policy meeting today, the decision due wednesday at 12:15 p.m. eastern time. the fmoc will release its updated economic forecasts at

2:00 p.m. and fed chairman ben bernanke holds a press conference at 2:15. investors may be looking for signals that the fed will stepped its asset purchase program dubbed operation twist, but many analysts think that the fed won't make any changes and will only tweak its economic projections. the fun starts wednesday afternoon when you can follow it all here on cnbc with special coverage at 12:15 p.m. eastern time. for today, the case shiller home price index is out at 9:00 a.m. forecast to drop 3.3%. we get march new home sales expected to rise #.2% to an annual rate of $320,000. also at 10:00, april consumer confidence. economists looking for a reeadig of 70. and before the opening bell, at&t, 3 m and united technologies. we're also get results from coach and hershey foods. after the close, we'll hear from apple of course, amgen, aflac

and southern, as well. kyle, let's talk about the fed for a second. we were discussing it during the break. do you see them extending twist, abandoning twist or doing nothing? >> i think it's a combination of qe-3 and an operation twist. in the 20 years on wall street, this has been the most interesting time that i've seen with respect to the fed really being on the hot seat especially going into november election. so i think that they need to be accommodative, they need to make sure that they're still involved in the market place and keep the marketplace going in an effort to make sure the current administration doesn't go into the november election with the dow down significantly. >> and do you think they'll announce it during will two day meeting or do you think they'll still continue the wait and see

approach and just take a little while longer to figure it out? >> in my mind the latter. i think they'll see how the markets shake out a bit. big earnings coming out. i think they'll be patient, they'll wait and see and they'll be smart about their actions going forward. >> a great point. kyle harrington, great to have you with us. but it that wraps it up for us on "worldwide exchange." i'm jackie deangelis here in the united states. >> i'm ross westgate here in europe. coming up next, "squawk box" with andrew and becky. joe might be back. i'm not quite sure. but they're up next. whatever happen, we hope you have a profitable day.

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good morning. it is earnings and the economy. quarterly reports from three dow com poe thentss before the bell, plus a number of releases on the state of housing. plus the empire under attack, the murdochs, they face another firing squad of legislators in london and another round of key european debt auctions take. it's tuesday, april 24th, 2012 and squawk begins right now. good morning, everybody. i'm becky quick along