headlines from around the globe, fresh data shows unemployment still on the rise, retail sales have fallen compounding the pain after the s&p 500 cuts the country's credit rating. >> boj easing monetary policy more than expected. central bank expects inflation to continuum 2014. >> and in the u.s., today's first quarter gdp data could show the economy is plugging along in a steady yet

unspectacular pace. >> and samsung posted galactic size profits and calling for even stronger returns ahead. welcome to today's program. jackie will join us later from new york. still to come as well, italy's testing the market with a 6 billion euro auction. but how much will they have to pay to borrow money this time some they'll bring you results in around an hour's time. we'll tell you what online shoppers have been snapping up, plus you normally go to costco to stock up on your pantry, but the retailer is selling something a little more unusual to customers. and it's of a financial mate. we'll bring that to you a little later, as well. but first of course all the

focus once again is on europe. yield in spanish ten year government bond, just below 6% at the moment. ibex down merely #%, dragged low are by bank stocks. and this follows of course the move overnight from s&p and day take which shows spanish unemployment continues to spiral up to 24.4% in the first quarter, 22.8% in the previous three months. government spending cuts and deterioration of the housing market all taking it toll. retail sales have dropped for the 21st straight month. and this comes on the back of s&p down grading the country two notches to bbb overnight. a sign to the struggling banks and deficit concerns, at least one notch more than many might have expected. and of course they still have spain on a negative outlook. karen has been in madrid all week and just as well you stayed until friday, isn't it, karen.

>> indeed. we started out the week and those bond yields were spiking. it seems as though we got a reprieve midway through the week where the confidence started it return. beginning of the week, the s&p ratings downgrade, and you can see the reaction first out of the gates this morning on the stock market was an absolute ta tanking. but now we have got some buying returning into the market. a few stocks are trading positively and the ibex has trimmed some of its losses. we've heard from the three biggest banks. latest was banco popular, 100 million for the quarter. down 46%. but that's up against the hikes of bbva.

more than a billion euros for the quarter. so still in positive territory. where you're starting to see negativity come through is on provisions. these were extremely high at 4.75 billion euros, up 81%. and more to come in terms of provisioning. it's because we have the real estate loans rather worsening, we have financial reforms requiring provisions, as well. so more and more pressure coming to bear on the banks. but whether it spellses the case for a banking rescue, i certainly don't know about it does. and that's the thing, we're seeing all this economy and all the bad news chumped in together. it's been very hard for international investors to wade through what's negative news and what is good news. there is no doubt that the unemployment rate was very negative. 24.4% is where we're sitting. youth unemployment, that's at 50%. so takes lot worse. and it makes you one kerr and this is what s&p was stating.

ratings's downgrade, just how the government can keep its targets on track when you have an economy contracting at half a percent this year so far. that's meant to get a lot worse. so you've got to wonder just how the government can achieve that. but if you take a look at what the banks have been saying, there's recognition that there's mounting market tension on these banks because everyone keeps looking at these numbers so negatively. the banks are saying they want that ltro, just in case. take a look to what the ceo of santander said yesterday. >> translator: i personally believe it would be very good if the ecb didn't say so bluntly that it is the last of the last and will never be again because we think they should not be that clear there. they should say if the conditions in the market for bank funding condition to be the same, that is markets are closed without the possibility of making any issues, then the ecb

would consider the possibility of another window. >> ceo of santander saying the ecb should keep an open view to further funding because keep in mind this market has been a little bit closed for banks. the top two have had access to international funds, but as you get further through the banking sector, you know the ability to raise money in capital markets haslimited. >> absolutely. and we'll bring in guy with us. you've talked about how we've got a glraduatl return to fundamentals. how do we deal with that from an investment point of view? >> there's nothing new. spain has been trading as on bbb

plus and most assume it would be a negative outlook. if you look at the s&p report, falling dispose able income, private sector deleveraging, fiscal consolidation, all global weakness in and around them. so i think there's a feeling that this growth dilemma, which is of course at the heart of the french elections, et cetera, coming out of this story is going to be the main driver of stability and i think financial volatility in europe. that said, we've had a lot more earnings. and some surprisingly robust guidance against this backdrop. so i don't think these big mac crow factors are really hitting the market like they were six to nine months ago. >> we've now loaded up, we've made it alan spanish banks so much more vulnerable to any upper pressure in bond yields.

if we get another rise, then that will punish the banking sector and that must roll over to equity investors. >> in the s&p report, they have put a richks number of only 3.75% of gdp. either eat economic growth numbers that they're really focusing on. so i think the volatility you've seen a year ago from the announcement, will this is pretty well pea nuts morning. >> as a foreign investor looking into the scenario in the eurozone, what does the spain down grade mean for foreign invest ors somewhat's the potential fallout? >> i think what's worrying foreign economists is something

called the miss cal multiplier. this is a mum which measures how much you take out of the company if you take say one euro off public spending, in spain because it's a small export sector and because there's very little employment and activity elsewhere, for every one euro the government cuts, it takes 2.1 out of the overall economy. this is isn't going to bring it all down testimony. they're well funded. running up cash balances and liquidity and funding position is quite good. but for foreigners looking outside, they said just get the academic picture right and unless the growth agenda. >> all right. good to have you on today. ability we're looking at hollande have averted a crisis by agreeing on the country's 2013 budget ahead of the eu

deadline on monday. still scheduled for elections in september. >> lackluster session here in asia. spain downgrade and of course fresh easing by the boj, all that putting in together. and this is how the picture is looking. a lot of caution still in the quit i markets today. nikkei 225 is down 0.4%. the bo squchlt has moved to boost asset purchases by 10 trillion yen. double the usual amount, fail to -- kospi up 0.6% all because of samsung electronics. shares of the company at an all-time closing high after the company reported a record quarterly profit thanks to strong sales of its galaxy smart phones. australia down 0.3. so you can see a bit of a mixed picture going on. greater china markets. earnings big focus.

hang seng failed to get any lift will. down 0.3%. a lot of cautious in this market. sinopec weighing on sentiment after posting quarterly earnings worses than expected. these would markets are closed monday and tuesday for labor day. what does your heat map say? >> we opened at the session lows and just over an hour now into the trading day, we're up near the session highs. we're weighted to the up side in terms of stock numbers in the stoxx 600. 6:4. we had gains yesterday, ftse up around 30 points, same for the dax. right now the ftse just tip towed in to positive territory, up 7 points. the cac down 4 points. ib even x down about a percent at the moment, but a lot better than we were earlier. in terms of how that's impacted the bond market, we saw yields

just head over 6% earlier on. keeping an eye on italy, as well. bond auctions today. the focus will really be on the 5 and ten-year auctions that we've got this morning. 5.2% was the yield in march. you can see where we're raiding at the moment. five years in march, we were looking at a yield of around 4.2%. currently around 4.8. we also have other issues. 7 year btp and 4 year, as well, coming out. it's 2019 issue i think we've got coming out. as far as current city markets are concerned, the dollar index up against most things this morning. we just did see the yen weaken after bank the japan came out with bigger sort of beyond

expectations with their bond buying. extending to three years the maturities which they can buy. aussie dollar at the moment 10385. sterling a little firmer incidence the dollar. more on japan, christine. >> well, japan central bank eased monetary policy for the second time if just over two months, the boj says it will boost government bond purchases by a larger than expected $124 billion as it reinforces its fight against inflation. the surprise announcement pushed it lower against the greenback. it will take a while before japan can free itself from deflation. boj says the economy will miss its 1% in-plaks target for the next couple of years. let's get analysis from nicholas smith. good to have you with us. looks like the markets are having a tough time believing the latest purchase will do anything to help the japanese

economy. >> yeah, this was quite frustrating. the boj has done a head fake with malice forethought. i was away from my desk when the news came out and the headline says that it's 10 trel i don't know yen of bond purchasing and your first thought is we were expecting 5 to 10, we got 10, that's good. and then you pull down that press release and you go that's interesting, they're sterilizing half of this. so the total is not ten, it's five. and then you're reading through the press release and you're going they're intentionally doing this, they didn't really believe in what they were being asked to do in the first place. they're under intense political pressure. so that pretending to do more than they really are. so it looks like a lot. it's actually rather less than it looks. >> so under a lot of political

pressure is what you're saying the boj is under. what will it take to reverse deflation then in your opinion? >> bernanke has always said you cannot get inflation from deflation, that all that happens is you print the money and the consumers save the money, corporates have got plenty of spare capacity, so they won't spend money on cap ex. but would it would go is into asset priced inflation. they've seen that movie before and at the know how it ends. you have as massive bubble. and we could do with a bit of a bubble in japan right now. i understand why they're frightened of that. so they've countered the political pressure as if looking as if hr's doing something, but

actually doing as little as they possibly can. so you can see why the jen market and stock markets spiked and then dropped back immediately. >> so we have domestic consumption, business investment weak. the boj doesn't look like it can influence credit anyway with interest rates virtually at zero. what will it take for the japanese economy to start firing up again? >> well, when we first started in the financial industrial, you're taught when you get in a taxi, talk to the taxi drive, ask how is business. whenever you go to the restaurant, you ask the guy somehow business. and the bank of japan has the economy watchers in that which looks at all these highly economically sensitive areas. and the message that comes out of that is actually that the economy is coming back really quite nicely, thank you. so the bank of japan actually doesn't need to do a whole lot.

sure, we've got a little bit of deflation, so when you take out the rise in energy prices and the fresh food, core inflation is still negative. what i think you need to do for that, there are two causes. it has too much capacity so it needs to take out some of the zombie companies. two, the strong yen has been causing some of that deflation. and we just had a sizable move of the weaker yen, so we were pushing on 75 and how we're at 08 1/2. so that's a sizable, what is that, 8% move. so i think we should be quite happy with that. i think the bank of japan sooner or later, the politicians will be working out that they've been hoodwinked and they'll give the bank of japan do what we told you to do. >> it's guy munson here. at the bottom of the press

release is always those admittedly quite modest amounts of qe that are targeted, etfs on the japanese stock market and japanese real estate investment trusts. both of those have consistently been among the best performers among global real assets this year and the only central bank in the world to be buying its own equity market. do you think it's significant? >> obviously there's a limit to what can do, but the jret said i won't buy any of these things that are low quality and most have very poor credit ratings. but, yes, i think they've bought across a recently wide basis of asset classes and that's more created than many central banks have. but they're still very, very concerned about inflation.

the u.s. has a trauma from 1989 that deflation is a really bad thing which that comes with depression. japan is the other way around. it's had horrible inflation immediately after the war and of course the 1980s, massive price inflation. and that's japan's trauma. it's understandable the central bank's quite cautious now. >> okay. ne nicholas, thanks very much for your insights. good to have you on the show. on japan's earnings front, a couple impressive profit reports. better than expected 86% rise in fourth quarter profit thanks to a pick up in japanese stocks and mutual fund sale, but analysts say the bank is still vulnerable to losses and faces the risks of sanctions. meantime japan's third largest automaker honda has reported a

fourth quarter profit and sees a near trip link of operating profit in the year ahead on strong asian sales. ross. >> and still to come on the program, daimler has shifted up again posting a surprising increase on profit. we'll get more on that and all the other earnings out of europe. pe.

ross.

total's warned that production in the second quarter will be hit by leaks and planned maintenance costs, they posted a 1% paul if in first quarter adjusted threat income. the stock down 2%. sanofi had strong sales. earnings could fall back to 15% this year as drugs previously protected by patents are hit by competition from cheap generics. wpp saw first quarter revenues up 7.6% on the back of growth in asia pacific. the group reaffirmed its long term star get

daimler confirming its full year outlook despite a softer pricing environment in china. let's go over to frankfurt where daimler's major trading as place. patricia has more. >> great numbers. outlook also looking quite good, however the stock this morning was down by as much as 3% earlier on. now recovering, but still amongst the main losers. i have to say, looking it at the details of the number, there were more positives than negatives, but perhaps the negatives are weighing out the sentiment out here. so what we need to raise is the issue of operating margins falling by almost 1%, but again, less than expected that fall. operating margins now at 8.4% expected 8.3%. also the free cash flow dropping by about 2 billion. the comment by the cfo earlier on in the call, he said that the pricing environment in china in

the first quarter has softened somewhat and that of course is a big issue going forward because you do still have a very growing market, revenues are up. however, the pricing needs to stay stable in order to continue to increase profitability going forward and keep those margin levels. now, also interesting comments made in terms of the main big shareholder fund, they said there's not going to be a change in the shareholder structure. they're happy with the share shoulder structure in terms of other regions in the world. we do have brazil still being a very difficult market, however, they want to try to keep hair market share. numbers definitely better than expected. >> earnings also in focus in south korea. samsung raking in profits that are out of this world thanks to rocketing sales of its galaxy smart phones. and as margins rise with a new

version of the phone set to be released, samsung expects even bigger returns in q2. >> shares closed up about 2.5% touching an all time intra day high. the market cap which already takes up a hefty 18% weighting on the main kospi index, 7 # $60 billion for the first time, and this was on the back of its smart phone sales which masked a falling profit in the dip division. its mobile yunts generated more than 70% of the company's operating income. according to strategy analytics, samsung saw more than 44 million hand sets blowing past apple's 35.1 million in the first quarter. and the company is launching either all-new galaxy rumored to

have an improved screen and faster processor. it will hit the shelves for most customers sometime in june. and i have to tell you that management is pretty confident about the second quarter, as well. back over to you, chris team. >> thank you very much for that. and we'll be digging a little deeper in to these blowout earnings in our next half an hour, so stick around for that. >> francois hollande has increased his lead in the latest poll. two candidates appeared separately on the same talk show. sarkozy trying to court the far right. railroad it's a problem for the right wing, but for me, it's a problem fro france. there are 6.5 million french people who voted for mrs. lapel. they're not from the far right. it's not a protest vote, it's a

crisis vote or a vote in favor for some of the ideas proposed by the national front. it's not a problem specific to the right wing, but to france in general. >> francois hollande turned his attention on international relations. asked about regosh yaeting the fiscal righty, he said the german chancellor can expect him to propose changes if he's elected. >> translator: mrs. mar kell will undoubtedly challenge a number of the propositionses that i present, but that's what a negotiation is about. it's not germany that will decide for the whole of europe. >> economists ran a piece that this could be a big problem for european investors. do you see it that way some. >> i do think that the new holland/merkel alliance as opposed to the mercozy alliance will hold a different tempo of european discussions.

it was interesting to see the ecb also came out in support of a component of a growth agenda within the fiscal compact. now, we can't know what this is. second containing to the constitution in 25 years. so to add another element will be difficult. but it could be the transition out of us a stairity into the growth agenda. >> i would like a growth pack that cuts government spending and cuts taxes, but i doubt if we get hollande, i doubt it would be along those lines. >> you might get an element that you can access the eurozone firewall funds. and apply those to growth agenda and restructuring moves. what we saw in spain in these unemployment numbers for example this morning was a j curve effect. the numbers have gone up.

and you must have some stabilization. so i think could be more positive with a hollande/merkel allianc alliance. >> we'll have to change it to the merlande relationship. what do you think of that, m event rl achmerlande? >> it will be a tongue twister. you figure it ut. we have to practice it. >>hollkel doesn't do it. coming up next, yuan at a fresh record high of. more on that when we come back. ck.

headlines from around the world, fresh data from madrid shows unemployment is still on the rise. retail sales have fallen again, this compounds the spain for spain after their rating is cut bay another two notches. >> tokyo socks lob their worst april in seven years. central bank says deflation to

continue until 2014. >> and it's gdp day in the u.s. first quarter data could so he the economy is still plugging along in a steady if unspectacular pace. >> and samsung electric ron he cans post galactic size profits powered by smart phone sales and calling for even further runs ahead. let's kick off it this half of worldwide with change with a check of asian markets. downgrade of spain and pressure he'ding measures by the bank of japan, all that putting it together. investors still staying cautious nonetheless. nikkei 225 down 0.4%, the boj move to boost asset purchases by double the amount failed to ease concerns about a fragile japanese economy, will particular market trading to the down side 0.#%. kospi up 0.6% all because of samsung electronics. shares at a closing high.

record quarterly sales thanks to strong sales of the gallon lakts city smart phone. elsewhere, india says raiding down 0.1%. australia up 0.4%, greater china markets earnings continue to be if focus. hang seng is lower 0.3%. early gains as investors turn more cautious. pet taro china better than exped earnings. sinopec weighing on sentiment after the refiner posted quarterly earnings worse than expected. these two markets are closed monday and it tuesday for may day. ross, what does your heat map say? >> we're at the session high, which is the good news. we out today we'd be focussing on bank of japan, quantitative easing announcement ahead of the u.s. gdp, and ens&p came out with the downgrade of spain. so we opened sharply lower. but you can see advancers outpacing decliners 7:3 and we are up at the session highs. follows modest gains yesterday.

ftse and dax both up around one-half of 1%. spanish yields did breach the 6% mark once again. just below that at the moment. 5.95% after moody's downgrade. unemployment data. still got a negative outlook along with fitch, of course, and the s&p downgrade. in italy, we're concentrating of course on auctions today. about 3.25 to 6.25 billion euros will be auctioned. keep our eyes mainly on the 10 and 59 year auctions today. 5.2% is the ten year yield previously at an auction and 4.2%, you can see we're trading at 4.9, so yields will be higher. demand should still be okay. we did see dollar up across the board earlier. things changed around a bit.

euro dollar thousand back to where it started. the yen certainly weakened after the bank of japan, sterile liding half of it, so again the dollar just come off again the yen. aussie dollar has regained some of its losses. and now the pound is up against the dollar, as well. christi christine. >> here in asia, we're seeing several chinese banking heavy weights reporting q1 results. tracey chang is watching out for these. >> we are expecting results anytime now from big lenders like ag bank, icbc and china construction bank. analysts are expecting earnings growth for the whole sector to decrease actually to 17% this year from 38% in first quarter of 2011. icbc chairman says a slowdown in profit growth for the bank industry is inevitable trend. the key factor behind the deceleration, earnings growth,

is that net interest margins are getting squeezed due to higherly liquidity in the system on 2012 compared to the year before. approximately 08% of the operating income came from net interest income or the revenue generated from their loans. have i experts say all hoe the sector's red hot profit growth this if recent years are expect to slow sharply, lenders see it as a good opportunity given cheap valuations. back to you. >> central bank has set a central high mid point for the dollar yuan exchange rate. u.s. treasury secretary geithner says china has not gone far must have in its efforts to open its economy to allow its currency to strengthen. >> a strong are more market oriented renminbi will help

reinforce china's reform objectives of moving toward higher value added and encouraging stronger domestic demand growth. >> the pboc record yuan fixing also comes ahead of next week's economic talk high school beijing. cnbc will be there with live coverage of the breaking events. let's get reaction from guy. typically when it comes tos these high level talks, it's understandable china will do something to edge its currency higher. >> it's expected, right. and it's an election year. so we will look for a little concession on both sides. but not too much. but overall, i think the chinese surplus is not really taking position in the u.s. electoral campaign. seems to be more unemployment and local issues related to it. so i don't see that being a 34r5urly heavy topic. i think more interesting will be to see in a leadership change

here in china several, will the liquidity picture going forward and certainly there are many who say another cut in the reserve requirements would be useful to stave some of the slowdown. >> and the rumor of course that maybe we could get that happened this this weekend. so we'll leave it there for now. let's talk more about china. this week we've been telling you about how top automakers plan to dual it out over in china. the world's biggest car market. but one chinese auto manufacturings has it focus firmly on developing markets. its strategy is symbolic of china's economic transformation. this report from beijing. >> reporter: number one in suvs in the world's biggest quarter market is just a stepping stone for great wall motor. like vw, gm and toyota, it wants to lead the industry and serve

china's ambition to create a global brand ready for export. >> translator: we would like to win reputation in market share globally. only then can we call ourselves successful. >> reporter: great wall is now a low cost manufacturer, building affordable cars for china's mass market. despite explosive growth, just 60 out of every 1,000 people own a car. to move up the food chain, it needs access to technology. stable and practical management puts great wall in pole position. >> what's different is it's surrounded by global suppliers that now send parts to the japanese, americans and europeans. great wall can go to the same suppliers and say we like that part, bring it to us. that makes their job a lot easier. >> while auto industry executives descended on beijing for the motor show this week,

premiere wen was in europe securing new deals with vw and vol company to encourage investment in china, deals that will ultimately benefit its home grown brands. great wall was the first automaker to assemble cars in europe, buying this plant in bulgaria and starting operations in pen. >> translator: we are planning to have five more plants overseas by around 2015 in south mrk, southern asia and other areas. a complete lineup of suvs by 2015 and by 2020 doing what the south korean automakers have accomplished in sales and reputation in these markets. >> reporter: by honing its product, she says great wall can raise prices by more than 30% in three years. dominating in the home market

and going after the developed markets from the trick and china's rebalancing will depend on whether a company like great wall can succeed. >> from cars to phones. samsung electronics is raking in profits that are out of this world thanks to rocketing sales of its galaxy smart phones. and with the latest version set to be unveiled as margins rise, samsung executives are predicting a bigger even returns. one weak 123spot is that chips down. still, the overall blowout quarter propelled shares to new highs. up 2.5%. joining us to talk everything samsung, daniel kim. daniel, what is it about samsung's galaxy that's outselling apple's iphone last quarter? >> i think there are a few

reasons. first of all, apple has a single model strategy. samsung electronics, a few models and samsung is addressing the low to median smart phone market. so that's why they're out selling apple in q1. but the best is yet to come because, first of all, samsung galaxy know the global launch is under way and secondly samsung galaxy 3 will be unveiled next week with a global launch. their flagship model galaxy 3 will be selling in to major markets almost simultaneous with second quarter. >> so does that mean they'll not just be pulling in the volume, but also can increase margins in a big way, as well? >> absolutely. you have to bear in mind that there is a huge scale effect

temperature if you look at the q1 numbers, the hand set sales are actually almost doubling, but s and j costs is declining quite sharply. that will all boil down toed modern expansion. >> when you look at how mobile is contributing to overall income, chips are down, what does it say about the company's business model in the next two to three year, do you see a change there? >> well, yes, hand set brs three-quarters of their profit. but q1, the semicon was the bottom of the cycle. over the next two to three year, i think the company strategy is

definitely selling consumer product like the tv and hand set and gaining more market share. especially in the high end premium segment. at the same time, the company will become more dominant in key component space such as dram and lastly, their key focus is moving in to the logic semiconductor. so that means their new competitors will be like intel. very different company landscape compared to the past. >> we're holders of the stock. how do you think that the business shifts you've been talking about and the positioning in phones versus chips will influence the cyclicality of earnings sf because we're really interested about this seeing that multiple

expand and we're also interested in the progression of dividends. so how volatile will earnings be and what will this mean for dividend flows? >> because hand set generate lions share of profit, samsung's previous notorious volatility has greatly been reduce which had is good news and that warrants the much bigger expansion. the company is paying cash dividend maybe not big enough, but at the same time, the company regularly keeps buying shares. i think that there's another way to return the money to the shareholders. but lastly and more importantly, samsung tell requires heavy cap ex. so investors should look for more capital gains rather than

dividend income. >> interesting. daniel, thank you very much for your i'm today. daniel kim, analyst at mccory equities research. >> the world's biggest phone maker in terms of volumes. we've also had bruno today, issue price 10.03, we do like a bit of cash. editor of class cnbc joins us for more. why are investors getting behind will one? >> basically because this small company based in a spaul town in the hills is renewed for either high quality cashmere and the market is putting the bet on the potential growth in this brand in asian market and all the new markets. they're up 30% this morning on its ipo price, they had a good skerns in creating unique story.

convinced the market that his values together will give them a return. basically the multiples if you look at the price today are very high, higher than hermes. so first of all, investors basically believe that the handcrafted cashmere will get larger market share in the asian market in the tut. and also the fact that some of the biggest brand names here, they bought in to the ipo stakes which is a symbol of trust in the brand. so this is basically the reason why this is a bright sar in a very dark night in the ftse mib which is trading down here today. but we have the luxury sector

which has a promise. hard to maintain having seen that these multiples are very high. market cap of 752 million euro. >> presumably scarcity of the shares is to reflect the scarcity of their product. keep it rare and exclusive. good stuff. thanks very much. v neck or crew neck, what would you go for? >> i'm sorry, i didn't hear. >> v neck or crew neck sweater? >> what do you think? or a cardigan. >> i don't know. >> i'd go v neck. still to come on worldwide exchange -- i floored him with that one. you may usually go to costco so stock up on your pantry, but the retailer is selling something a little more mush to its

customers. it is in the financial space. more when we come back. ck. >> i don't know. more when we come back.

guy, we've heard about

samsung, daimler and this great ipo in italy, as well. good names all of them. and if you've been invested this either japan, the nasdaq or germany this year, that's where you would have made your best money. where does will this leave us as we move through the second quarter and into the second part of the year? >> very fertile ground for a thematic equity. they have extraordinary intellectual property and innovation. almost can't keep up with the r&d spread. a completely global spread assisted by their governments in all three cases in korea, japan and export numbers are phenomenal. cash flow continues to pile up. in all three cases we're talking

sovereign ratings. so you get an enormous bite at the cherry and i think that's the trend for the remainder of the year. and they seem to be selling through the volatility of europe with no impact on the under side. so this is a very high quality large cap growth stock. tec tech wretch market and i think we're just seeing the beginnings of the returns. >> nice to have you back, guy. still a big hour to go. we have lots of focus on state side. jackie joins us. >> good morning. bargain hunters may normally stock you to costco to stock up on pantry item, but costco teaming up with 11 lenders to

provide home loans to customers, just one of the latest moves. store already offers health and auto insurance as well as stock brokerage services. mortgages now? i'm not sure how much i can take from costco. it was one thing when you told me someone could get an engagement ring, but now to get my mortgage there some sxwh a? >> and you can get plenty of cashmere will. mortgages at costco. you're supposed to buy in bulk, so i don't know how you bulk up in mortgages. but maybe could i get ten mortgages for ten different properties. >> i'm stunned by the fact that you can get ten different properties. how much are they paying you, ross? >> what's the loan to value came? these things, will they give me 100% loan to value, costco some is that sort of the bulk deal you can get? >> it's a good question. we'll have to look into it more

certainly if any of our you viewers are really interested in getting hair mortgage there is. meantime, coming up, u.s. investors getting the first report on first quarter gdp today at 8:30 a.m. eastern time. first quarter employment cost index also out at 8:30 expected to rise by half a percent. 9:55, we'll get the final report on april consumer sentiment. economists looking for a reading of 75.7. 

here if the united states, today's first quarter gdp data could show the economy is plugging along at a steady but unspectacular pace. >> and unemployment in spain still on the rise. retail sales have fallen again compounding the pain for spain after s&p cuts the credit rating by another two notches. >> boj he'ding policy more than expected. but says inflation to continue until 2014.

let's take a look at the u.s. futures and see how we're setting up for trade on wall street. looking like a slightly lower open at this point. lower by two points, nasdaq just under the flat line and the s&p 500 down by 1 1/2 points. the dow 60 points away from a new four year high. so we'll be watching that very closely today. of course we have hopes for more quantitative easing helping to boost the market, that overhad doughi shadowing some of the concerns about the job data, as well. we had tepid earnings from exxon and u.p.s., but still managing

to see a rolly. >> if you you look at he's european charts, you won't find them inspiring, but they're a lot better than they were when we opened. opened at session lows. now pretty everyonely paced. the reason we opened down on the lows, we've recovered from it, is the yield on the unemployment continues to spiral. much bigger rise than expected. this as the government spending cut and deterioration in the housing market are taking their toll, and retail sales down by 3.7% in march for the 21st straight month. and this is after s&p down graded the country another two notches to triple b plus

overnight. speaking tomorrow, the man who helped to downgrade that a little later in the hour, but first carolyn has been in madrid and joins us with more reaction. what do you pick out in particular for that s&p report? because i know the government has already sort of come out and said they're not taking everything into consideration. >> which is somewhat of a fair point because it was only several weeks ago that the government announced his massive austerity plan and takes time to work its way through the economy. they will raise taxes on large companies and these effects don't happen straight away. one of the concerns the s&p pointed out and it does have a point is that achieving he's targets might be difficult as the economy worsens. we've had confirmation that the company is now in a technical recession sliding by half of a% year on year. so it's one of those circular

arguments it if we start to see unemployment keep on rising 24 plus%, that gets worse and worse. taxes coming into the government. so there's no doubt that the government has very little whig he will room when it comes to those numbers. the other part of that argument about bailing out is the banks kicking in further fund ifs. let's just take a look at that baut numbers that came out of the major banks this week were in fact strong. three major banks here are profitable, two majors earning more than a billion euros just in the first quarter alone. that's not even taking into account what they will earn over the course of a year. and there were huge provisions in those numbers, as well, as they set aside funds to cover bad loans. the third biggest bank here reporting today, it had a 100 million euro profit. so the badges are profitable and you can see why the major lenders do not want a bailout of the banking sector.

it's hard to differentiate and pull out a few banks and say we're going to kick in funds to those particular banks but not touch the others. that just causes mounting pressure on the troubled banks. and it's not just bad loans we have to contend with. a lot of the banks have taken on those real estate assets directly on to their own portfolios. what was good about this yesterday was they were providing color around that selling back into the marketplace, but starting to see an interesting tipping point where they do expect to start selling more stock than what they're taking on board. and that is really important. a lot of international funds have come in here and santander calling help vulture funds.

so they were not doing deals because it wasn't worthwhile selling. but there are other investors coming in to this market wanting to buy spanish real estate starting to cause some movement. many of the banks are just not offering as many mortgage products and that's reducing exposures p bnk funding costs are certainly key and the pressure you've seen on the banks today is important and that's why the banks want access to the l it chlt ro just in kcae nus this case the markets remain frozen. take a listen. >> translator: i personally believe it would be very good if the ecb didn't say to bluntly that it is the last of the last and will never be again. because we think they should not be that clear. they should say if the conditions continue to be the same, that is markets are closed without the possibility of making any issues, then the ecb

would consider the possibility of another window. >> santander parked those funds back with the ecb as some sort of insurance policy. they're saying they put the repo to do that. so a lot of color around the numbers that we get. >> okay. good stuff. we'll be speaking to the s&p 500 director, cramer, in around about 20 minutes time. we'll get his own views on why they've done this and why -- his reaction to spanish government suggesting they haven't taken their latest actions into account. same time, former president of the bundesbank told julia chatterly spain has the chance to make good, but the politics could get yet in the way. >> if the government of spain

takes the right measures and are able to follow the conditions made by the eu commission to their budget but spain is a country we have had the bubble in the past, youth unemployment is a huge problem in this will country, and if euro break down, it's not a problem of the monetary union. it's a problem of social unrest in many countries. political tensions. >> he was at the bundesbank when they launched the euro. joining us is managing director at roubini. good to see you. what's your own reaction to we had the economic -- i think -- once you impose austerity, the data gets worse. no surprise the unemployment

getting worse. just worse than we thought it might have been. what's the every implications of the s&p downgrade? all the other neglect testify ratings. >> we'll have to continue to downgrade spain. i don't think we're done with that process. the balance sheet of the coun y country -- fiscal adjustment, structure all reform, all these things are necessary, but as we're finding from the day a, they're proceed cyclical. it becomes harder to close your fiscal deficit as you cut your budget. actually all these things are very well-known. it happens in every case, the idea of this expansion contraction. it's an internal contra kicks

doesn't work. >> you have to have bigger reform, right, to get the growth coming from somewhere pels. i suppose the question is what would be the right. >> what would be the right growth formula about. >> a bunch of us were down for the imf meeting and this idea of the growth compact was making the rounds there and sort of listening to people talk now about growth two years into will this fiscal and structural adjustment process, struck me that talk is cheap. there isn't a growth strategy. and simply saying that we'll have one isn't good enough. and really the only way -- let's assume for a second that we won't have the devaluations and exits. the only way to generate growth is to have in an environment where the private sector and the household sector, the corporate sector will be deleveraging because the banks are deleveraging is for the public sector to leverage out.

there's potentially too much public in some places. so the only way this will works is to reduce spending by a lot so that countries in the periphery can about port to them. and the other problem is that there's an internal contradiction with which the euro is riddled. the heavy debt countries of the south need some inflation to reduce their debt burden or at least they need price stability so the debt burden doesn't go up, but they need deflation given the single currency to improve their competitiveness and restore growth in the long run. so nobody has a good answer that doesn't involve some other form of pain. so what ideally should be done is to flip the sequence, have a credible comment to have a lot of back loading instruct all reform and a lot of back loaded fiscal adjustment, booth in the

short term by stoking up demand in the authority so that retrenchment in the south doesn't become the depressionary force that it is how. >> eurozone debt crisis has been on our radar for quite some time. the s&p downgrade not impacting the u.s. futures here that much. so is it pretty much priced in to the markets the troubles in spain? >> i think a certain amount of trouble has been priced in. what we had was a powerful short squeeze and a bit of euphoria in response and now that's fizzled. and we've had some very truf trading conditions for a couple weeks. so it's martially priced in. but you what's happening now is partly priced in. the trouble i think is that we'll have more pressure in spain and eventually in italy, as well, and i don't think that's quite priced in. and maybe the catastrophe --

>> more pressure on the banks, more deposit flight, more need as the gentleman from santander was saying, conditions that require maybe another ltro or ela for spain and so on. >> we'll hold it there it for just one second because i want to bring up the fact that richmond fed president jeffrey lacker says he believes the fed will have to raise rates by 2013 . he's the lone dissenter for the past three meetings. he says the earlier rate hike may be mess to present the emergence of inflationary pressures. he's a voter on the mfoc this year, but not in 2013. so your take on the fed in the united states and how it's been managing our issues here in terms of further quantitative easing and the interest rate policy. do you agree that we might see interest rates go up sooner than expected?

>> it would be nice to live in a world in a way where that could be the case. our take on it is that we're more likely to have a variant of qe-3 by now and that probably will will be in the form of this idea of sterilized quantitative easing because the housing market still remains a big problem. and so the bernanke dovish wing of the fed will still want to try on do things with monetary policy to target the housing market and make things there a little bit less painful so that we can have a bit more of a floor there. and allow the rest of the which i economy to continue to heal and also defend against the potential confidence hurt wills and wealth effects from the situation in the eurozone and spain as well as the fact that we have emerging markets led by china slowing down. the general situation is that there's a shortage of aggregate

demand in the world. so the u.s. in our view is pot going to tighten, it will ease a little bit more at the margin. >> while the fed you talked about is likely to ease more at the margins, the boj today of course started to ease monetary policy, boosting its asset purchase program. a lot of doubts about whether that will work to drive the economy out of deflation. what's your thought on that? >> well, it will help, right? they probably won't do everything that's necessary. the forces of deflation in japan are many. the demographics, the fact that the population is aging as well as shrinking implies that it's likely that nominal gdp will continue to fall unless they really step on the accelerator. the strek of the yen, the fact that japan is still a big net creditor country and that every time there's a big problem in the world or even a small problem in the world, the yen tends to strengthen. that of course a reason for help to intervene and they may start to do more of that.

so like i say,le help, but they'll really have to pedal quite fast to really get inflation up significantly. >> all right, we'll have to leave it there. we'll get more insight from you throughout the show. you'll stick around. but still to come, starbucks reports a sharp rise in profit, but europe is not feeling the coffee buzz. more on that coming up next. ext.

results out of the italian debt auction. 2.41 billion of the five year, the yields at a 4.86. they've sold 2.5 billion of the ten year. the yields at 5.84, again, 5.2 in march. bid to cover on the five year 1.34, bid to cover on the ten year, 1.48. so between the two, they've sold in in total nearly 5 billion, which they were looking to raise perhaps 6.25. we've had two other issue which is we haven't had yet out, so they've sold so the benchmarks 4.9 billion. on the benchmarks her planning 3 to 5 billion of them.

yields probably what we expect. quick reaction. yields are going higher, but if we're market players, it's versus what we might have expected. still getting demand. >> i think that's right. the banks both in spain and italy are capable of buying more government debt, so you can keep the show on the road for quite a while yet. >> it's a question of whether they were willing to buy any more. >> ultimately they don't have that much choice because if the government goes down, ultimately so do they, right? so this will go on for a while. i think the bigger problem is that yields will continue to rise and as they should, right, because the risks are rising. and that of course is a vicious circle. and if you just look at the shape of the yield curve, it's very steep, right, so in a sense, the ltro accomplished a lot because it brought a level of yields down, but the slope was so high, that it was telling you that the market expected

more difficulty in the future. and there we are. >> of course we've load the banks up with more. >> european stocks opened down on the session lows. we've rebounded. a lot will depend on the gdp number out of the states. >> if you take a look at the futures, it will be a slightly higher open. dow by 10, nasdaq by 2 1/2, and s&p 500 just above the flat line. yesterday we closed with stocks here in the u.s. near their best levels. dow 60 points away from a new

four year high, so still a positive session on thursday. interesting to see about we can continue that know men up today. as you said it will depend a lot on that gdp number. >> downgrade of spain, fresh easing measures all investors staying cautious as a result. boj's move to boost asset purchases by 10 trillion which is double the usual amount but markets not buying that story at all. the kospi is up 0.6%. the big focus there, samsung electronics shares at all-time closing high after the company reported a record quarterly profit thanks to strong sales of galaxy smart phones.

greater china markets earnings continue to be about in focus. hang seng moved down 0.3%. shanghai market off 0.4%. and these two markets are closed mother and tuesday for the may day holidays. that's it for me. i'll be back on monday with news moving markets in asia. have a great weekend. >> you, too. still to come on the show, yieldses on italian government debt rise to their highest levels since the beginning of the year at this morning's auction. so how worried are investors will southern europe? we have more from an italy expert coming up next. >

yields on italian government debt have risen to the highest level since the beginning of the year. yield on italy's ten year debt in the cash mark is 5.74, the yield in auction 5.84. the bid to cover on that 1.4. on the five year, the yields at a 4.86. bid to cover on that 1.34. you've got to remember last time around in march, the yields were around 4.2 and 5.2 respectively.

they've also solved 1 billion of nonbenchmark. in total maximum they were looking for was about 6 and a quarter. your reaction to those numbers, marco? okay? >> yes. why not? they sold. even in a high yield. doesn't matter at the moment, right, because i don't think that one is in better health. >> why does the high yield not matter? >> it would matter if the high yield would be a jump like 2 1/2 points. at the end of the day, they raise up receipts say the same where it was the previous auction. so in other maturities. so we know the hauflaunching is cost a little bit more in this

environment. >> and you're happy with the bid to covers? >> well, yes. why not. >> a lot of why notes going on. why will the banks keep -- how much more guy power have the banks got? how much longer -- how long are we okay for? >> it really depends it's more a matter of what's happening in france. so we are in quite limbo politically speaking. >> well, let's assume hollande gets elected and he says i want to complete the miss cal pact, he wants to -- maybe we get a growth element to it. what happens then? >> well, welcome to france then.

to my personal opinion, hollande is just selling his seat as a presidential elected president. he cannot deliver what he's saying, but at the end of the day, this is just promising. this is just their job to be elected or reelected. >> promises but not deliver. what's the eventually indications then for investors? >> it's a catch 22. let's say he gets elected and that he somehow completes the fiscal compact with a growth strategy. what's the possible growth strategy? if you're going to cut your budget deficit, you can't have a fiscal stimulus by definition, right? so you're not going to deliver on that one. if you don't complete this, you've overpromised and underdelivered. so you kind of backed yourself

into a corner here, lose/lose. so the best cases scenario it seems is that the status quo prevails. people continue to worry about what's happening to the banking sector, the discussion that we're having, do they have enough fire power. when they run out of collateral, what do we do next to get refinancing from the ecb or do we try to ghesity indicaghesit indicate the market. >> 6.25 in spain? >> no, i don't have the crystal ball. it's country by country. a certain yield against the rest of the peer. now it looks to me that they're

moving like in a front. there's a kind of -- germany and then -- >> a weather front. >> exactly. it's more like the sort of a christmas creep. >> okay. i like that. >> and the base is getting wider and wider. >> the question is does spain need a program. in rin, there's enough money, but its he unfunded. >> if we put all the money together in europe, we wouldn't have a financial crisis. but we can't. >> this means you're knocking the door to someone else. everyone is knocking the door of mrs. merkel anyway. >> merlande is the future phrase. thank you very much. nice to see you. come back. why not. still to come, we'll be joined by s&p's managing director of sovereign ratings right after he

downgraded spain's credit rating overnight. why doesn't he believe more about spanish referring. ing. great shot. how did the nba become the hottest league on the planet? by building on the cisco intelligent network they're able to serve up live video, and instant replays,

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here nat in the united states, first quarter gdp data could show the economy is plugging along at atacular plac.

>> italy yields jump to their highest level since january. and fresh data out of madrid shows unemployment is still on the rides. retail sales are down again. compounding the pain for spain after s&p cuts the country's credit rating by another two notches. tokyo socks log their wous april in seven years despite the boj easing monetary policy more than expected. central bank says deflation to continue until 2014. >> cutting spain by two notches. citing budget deficit worries. they've maintained the meg testify outlook, the other would agencies have a negative outlook, as well, this after we had data jumping to 24.#%, a bigger jump than expected.

joining us, the spanish government in relation to your actions have said they have you haven't taken into account their latest reform efforts. have you or have you not? >> we have. you won't be surprised to hear that. i think actually in the statement that we put out overnight, we make expolilicit reference to those reforms. however, it is our view that while the government has began to tackle those issues, the challenges have increased even faster and those challenges are mostly concentrated in three areas. the first area being the economic outlook. we now believe that the downturn will be longer and deeper than we had previously assumed. it owing with that, you have secondly sort of a weaker

budgetary outlook and higher trajectory for the debt ratio of the state. and thirdly of course the risks in the financial sector and the banking sector in particular rising in tandem with the weak economic outlook. and that in turn could lead to additional funding needs that state would have possibly to provide adding those additional liabilities to the government's balance sheet. >> the economic secretary in spain has said spanish banks could need more public money, although he's ruled out using eu fund ifs. your reaction to that. p. >> it's not upon us to advise what the best course of action for the government would be. our statement was clear and we think that there is considerable risk and it might need additional resources given that it is quite difficult for spanish banks right how to fund themselves in the interbank

market. you might owonder where those resources would come from. so we think there's a probability that the spanish state might be called upon. >> i didn't see in your road, if you wrote about it, forgive me, i didn't see whether you mentioned anything about if spain took euro area loans, what the risk of subordination would be. and what is your view on that and how would that then go to impact future ratings? >> the risk of subordination would partly depend on when spain would take official money assuming that they would, which is not currently we understand the government's view that they would. but if they would do it before july this year, the debt that they would take on would be with

senior bond holders so no subordinati subordination. but if they wait until july and borrow from the esm which will replace any future funding, then you would have subordination and that might have detrimental impact for recoveries or for probability of default and we would have to reassess the situation depending on the size of the official funding. but let me be very clear right now, the government is making very strong statements that this is not their intention. >> it's not just the timing but the amount. and at this moment, both the esfs and the esm not unlike the spanish frob are unfunded. so we're going to be -- about

conditions continue to deteriora deteriorate, we'll be heading toward a program which will immediate to be funded and will cross that threshold into the second half of the year and from the esfs into the esm just because of the potential size of the problem and the way it's being handled at the moment. >> i think spain under the right circumstances is entitled to make a request for official funding. again, i repeat the government doesn't intend to do so at this point. and we also need to i think take into account that they're more flexibility than they used to be. so there more options on the table right now. whether or not the spanish

government will choose to go down take road is entirely up to the spanish authorities and we take no view on that. >> i guess that is a bit of a palliative. it seems that the central issue is that going that route under a program or just for the banks, if the sovereign is the one preparing the borrowing out, then it starts to go in the direction the kiss of death that these programs have been in in the past because then everybody starts to worry about the subordination that we've been talking about, everybody also starts to recognize that the parcel is being passed from the banks to the sovereign rather than going this route of directly using resources from the esfs and esm to recapitalize the banks which would be a step closer to a fiscal union. that would give a lot more

confidence you can right? >> you seem to suggest that having a program is stigmatiziig a sovereign in a way that makes it even harder to solve the problem. but we also did affirm the righting of ireland at the same level as that of spain and of course ireland is now sort of in a program for over a year. we could assume all sorts of scenarios whether this is helpful or negative for the continuous access to capital markets. but we need to understand the banks in spain right now are simply with maybe few exceptions able to actually access the intra bank market. the private funding has dried up for spanish banks if additional resources were to have to be

mobilized. it's very difficult for the spanish banking system to mobilize them in the private sector and the clearest indicator for that that you can see is if you look at the central bank balances between the central banks, so-called target two balances where you can clearly see to what extent the spanish financial system has been excluded from regular market financing. so whether it's desirable or not, if additional capitalization were to be called for, we think it will be pretty challenging to say the least for spanish banks to find that money in the marketplace. >> good to talk to you today. thanks for joining us. >> hathank you. >> s&p responsible for a two notch downgrade of spain late last night. and they still have the country on a negative outlook. now, european stocks in relation to that this morning opened down on the session lows. but we've had a fairly okay

italian. yields have risen to their highest since january. but stocks are at the best levels of the session as we how wait for the gdp numbers to come out state side, of course, as the markets get under way as well a little later. >> and taking a look at the u.s. futures here, we have also turned a corner looking at a positive open right now. the dow could be higher by 12, the nasdaq by three and the s&p 500 just above the flat line. and as you mentioned, the key indicator will be that gdp mum. investors will be eyeing morning that number. in fact it's the first quarter gdp figure due out at 8:30 a.m. eastern. frft to rise. if it that meets expectations, it would be the best period of back to back growth in two years. joining us to talk a little bit more about it is ben liechtenstein. ben, i want to come to you on the gdp figure. we've already taken into account that wield be less than that fourth quarter pig. so if we come in around that range, how are the markets going to react?

>> i think right now we're seeing seeing the market have a favorable reaction to the anticipation of that number. leading into it, we saw a sprtrg bid to rally and we were able to get up a couple key levels of resistance. right around the 1390 level about s&p. up above it. now we've pulled back a little bit and very narrow type range trading is he low volume type trading over the last couple weeks. and again in the overnight session, even a mid the situation in spainnd at down grade there, but very little reaction. again, pretty much unchanged headed in to the number, but we're at a key mum right now having breached the upper extreme of will balance that was forming in between that 1390 and 1350 level on the s&ps. we're now trying to seek value to the up side. so again, we're breaking out of the value zone to the up side right now. we're in measure difference type fashion. we should see some follow through on conviction associated with this up side activity, but

really it all rides on the shoulders of gdp data. if we see anything below 3%, again, you epgs inned we're looking for 2.6, but i really feel like and i think a lot of investors feel like with everything that we've been throwing at this market, everything in the stimulus that we provided, we should be seeing something up above 3% at this point. i think the 2.6 is really a disappointment. >> all right. a good point. ben liechtenstein, traders audio.com. we'll get more insight later in the show. as college costs continue to rise, the issue of interest rates on student loans as become a major battleground topic. currently the interest rate stands at 3.4%. but that's set to double to 6.8% on july 1st. later today, the house is set to vote on a republican bill which would keep rates at the lower level for another year. so are student loans the next bailout? head to cnbc.com for that story.

amazon's first quarter profit fell 35%, but results still beat forecasts as revenues jumped 34% on higher demand for

ebooks and online video. amazon launched three new versions of the kinder in the quarter. and zynga posted a first quarter loss, but revenues topped forecasts. sales boost eed by new games. monthly active users rose 24%, but analysts were disappointed by the number of people playing zynga games on facebook. joining us to talk tech is a tech sxermt aexpert. larry, great on have you with us. tech has had a great run up this year. if you want on get into tech now, how do you play it? >> you can he have areally want to get into tech and the companies that are driving the marketplace. what i love about amazon yesterday is only 6% of commerce is e-commerce. so there's huge up side. everyone says it's 76 times earnings, but you have to look

at the future. their revenue is up 32%. only reason the profits were down is you because of some fulfillment centers that her building and some exchange rates. but if you look to the future, it's about content apps in hoebl. and no he is are the plays that you want to be in. >> if i want to play tech, is it too late to get into apple or is there up side? >> there's a lot of up side. apple right now, everybody says, oh, no, apple's going down, that's just because people are taking profit. it will continue to rise. i have it at a $700 within year target it, but i think that's very low compared to other estimates. so apple continues to bro it out, but once again, you want to be where the users are going, which is the mobile space, the content space and app space. and as we saw in the facebook s-1, we were talking about the up side being in the mobile.

so it's all about the mobile play and that's why apple's driving it and these other kept plays are where you want to be with that. >> and speaking of facebook, an upcongress ipo. investors probably not getting in right away, but what's your take if we should be looking at this as a solid investment for this year? >> long erm solid investment. what other product has 900 million users and growing. and the's incredible. we saw with zynga, 15% of their profits was coming from zynga. so i see facebook will go out now, i'm looking to see them buy met fliks to get into streaming video. i think it makes i'm for them to buy zynga. so you want to be a n. a play like that that will continue with the acquisitions. $550 million in patents that they bought from microsoft. so it's all about the r&d and the cash reserves.

and to continue to buy the patents and i'm looking at them buying these other large companies, that's where you want to be. >> so with facebook looking at more acquisitions as positive momentum. larry, thank you so much for joining us. meantime, coming up on the show in the few minutes that we have, we're looking at the trading day ahead on wall street.

let's go straight back out to ben. obviously gdp crucial, but what else are we watching for? >> we also have consumer sentiment coming out. but this week really has been scarred with just multiple divergences across the board. so we're looking for something definitive from the gdp number and raiders a ertraders are foc.

something up above 3% would really fuel the market higher. we're in a position where we could see big gains to the up side. >> just really quickly, your take on the s&p downgrade. priced into the markets? >> it doesn't seem to be having much of an impact. yes, appears to have been. you're seeing s&p 500s fairly unchanged. and definitely have it set on the 1400 level today. we haven't pulled back any and it seems to be very little reaction from the most part. so, yeah, i think it has been priced in. >> fair enough. thank you so much to ben liechtenstein. that wraps it up not only for today's show, but for the week for us here on "worldwide exchange." i'm jackie deangelis in the united states. >> and i'm ross westgate in in europe. we hope you have a profitable day whenever it starts a really good weekend.

european fears. s&p down grades spain and warns of more trouble ahead. the u.s. goes for growth. a first read on first quarter gdp, that's due at 8:30. and the week finishes off with another flurry of quarterly reports. we'll hear from merck, p&g, ford, many others. it's friday, april 27th, 2012. "squawk box" begins right now. welcome to "squawk box" here on a friday morning. i'm andrew ross