welcome to "worldwide exchange." headlines around the globe -- china's factory output strengthens to a 13 month high in april, but misses expectations the data suggests there is room for further stimulus. >> bp profits fall after despite high crude prices. australia central bank slashes interest rates by on

soft inflation. the rba's biggest cut. >> and many stock markets are closed for may day. we're live amid the rallies in th madrid and paris. >> lots coming up. the murdochs under fire once again. we're live outside of westminster where a uk parliamentary committee is ready to give their verdict. and the long and short of it at 10:45 cet and we'll look ahead to pfizer's earnings. how is the drug maker dealing with the biggest ever pat tent expiring in the industry. answers at 11:40. >> it's really only the ftse

trading today. closed down half a percent first trading day. you can see 15 points higher here. there are a number of corporates worth focusing in on. bp down 2.69% this morning, reported a bigger than expected drop in profits despite the increase in crude prices. forced to pay for the gulf of mexico oil spill. lloyds up 1.7%. quarterly profit roughly in line with expectations setting aside about another 375 million pounds to cover compensation. they had a 45% drop in the amount of money that they borrowed from the british

government. they had to increase by around about the same amount, 11 billion pounds so far in three year loans. tobacco company upbeat for 2012. saw a return to sales growth. copper production down 18% in the first quarter. now, data coming out of the uk today, so we'll take a look at what's going on with manufacturing and pms later. sterling dollar pulled away are from the eight month high we had yesterday. 1.6218. aussie dollar certainly under pressure morning, post had surprise 50 basis point. aussie dollar falling sharply this morning down to 1.03. dollar weaker against the yen.

79.71 is where we stand at the moment. and euro-dollar, most markets shut, but 1.32. pretty steady. show you the guilt yields actually. ten year gilt yields 2.11%. and ten year treasury yield, 1.91. also those pmis state side, as well. >> and also asia's side, china's latest gauge calming fears of a hard landing. but april's pmi data came below market expectations. it showed rising export orders which points to stable demand, but signaled weakness on china's domestic front and economists warn over overoptimism. final revised pmi is tomorrow. the official one at 53.3 still

seems to suggest quite a bit of softening .flash came in at 49.1. remember will this index has been below 50 for the past mine out f nine out of ten months. let's talk more about what this really means in terms of market strategy. our guest host is chief economist at independent strategy. so bob, the number one question a lot of people are wondering is whether the bottoming out process happened at the end of the first quarter or it stretches in to the second quarter. what are your thoughts? >> obviously china is lowing. we'll see much slower growth. i think we'll probably see much slower growth than markets are still expecting. could be 5% by the autumn.

so i expect those pmis will continue to exhibit that by being pretty close to 50 or perhaps a little below at the next few months. and that will mean that the authorities have to look closely at trying to simulate the economy, but they have the bubble they're trying to control. so the slowdown is happens domestically perhaps even more than on the export front. which i think that they've gone to a 50 basis point cut. the slowdown in australia has been quite significant and they're also worried about the prospects for australian exports if abo into china, a key area for growth in the australian economy. >> so ultimately does the notion sell in may and go away does it really hit home given that it's not only the economic data that we're getting, even if you take a look at chinese earnings, they

haven't been looking all that great whether looking at the banks or major sectors. the picture is contrary to what we've seen. >> it is. chinese index is not the environment for good investment internationally and you've been wanting to stay away from it at least for the next couple of quarters. which is exactly what the authorities can do to bottom the economy at a lower level of growth but perhaps start turning it round. but it will be a difficult period and it's not a market that global investors want to be in for the moment. >> a lot of people saying that this year is different, we're not going on do what we did in 20011 and 2010, which is get optimistic about recovery hopes and then real leez the day it take all starts turning south and we're going into recession once again in the eurozone.

which appears to be exact thely what's happening again. so is this time different or not? >> i think it's pretty much the same. the u.s., suggests something between 2% and 2.5% real gdp growth, but think ahead. some of the consumer figures were weak. housing market has bottomed. and above all, we have a big fiscal clip coming up after the presidential elections which has to be dealt with. if there is no action by congress to provide easing on the fiscal front, you'll knock something like two percentage points off the gdp growth rates in 2013. that's something the u.s. economy can't afford to have. >> plenty more to come from you over the next hour. meanwhile, officials bracing he themselves for the traditional may day protests. bec

beccy, you're in madrid and youthen employment is up over 50%. what's going to happen today and will there be any lasting impact? >> today we're expecting protests, it's labor day, a public holiday, a lovely sunny day, so likely to draw people into the streets for sure. if you cast your minds back to our reports, we were telling you about protests in madrid and in 55 cities in the pouring rain. so on a sunday any public holiday, we are expecting tons of people in the streets. the protests kick off at noon local time. they're just setting up. there is a stage being built for union leaders to address the crowds when they come a bit later on. and obviously the big issue here for the labor unions is this issue of austerity. tens of billions of euros of

cuts due to it take place during the year here in spain. and that's calling a lot of pain for spanish people. we have over 50% unemployment for youth, almost 25% unemployment for the economically active population as a whole. put that in the context, as well, of the down turn which has been in place since about 2008 when the property bubble burst, property prices have been falling, retail sales have been down for the past 21 months. so things are tough for the man on the street. the government believes clearly that these cuts are required, but the population finding it very stuff and will be out in force on the streets later to put their point across. >> let's go over to stefane. these rallies come in the middle of the last week of the presidential elections. >> of course ross ahead of the vote on sunday, could even be a

regular may day in france. what's usually the annual labor day will probably turn into a plil battle today. unions will defend social rights, unemployment. they've been doing so for the last 60 years. they'll demonstrate and they'll send up a strong signal to the next president even about if it's a socialist once, they want to show that they will keep the pressure to defend unemployment and social rights in the light of those crises. swing right voters are also part of the game today with the annual celebration of joan of arc. they've been doing so every year since 1988 and it's also important because political leader going to give a recommendation for sunday. she's unlikely to endorse any of the remaining candidates, but she will vote blank on sunday. what's really unusual today is that nicolas sarkozy, the french president, will be part of the the celebration, is going to organize in the afternoon just

behind the eiffel tower his own version of the labor day. it will look like a political rally. it wouldn't be a protest and that's the reason why unions are accusing him of hijacking this this event for his own political event. behaving like he's already the nextrd. >> if the polls are correct, and hollande wins, how should investors treat that? he's talking about changing the

fiscal compound, a growth agenda, and it this might be a good thing. >> investors should be worried because if we can take mr. hollande at his word, it will pose a major fiscal coal pampact. it's causing austerity at a time when most of these economies are struggling to deleverage both public sector and some of their private sector debt when you apply that, it's difficult to get yoet and if you don't get growth, your debt ratios don't come down. the way to break that is to get growth, but the issue is what sort of growth and how can it be achieved. hollande says by fiscal spending, public sector spending, by boosting the size of the state. i'm sure the germans and other northern european governments disagree a. and in fact the position

presented is the way to get growth is through increasing the competitiveness of those economies through structural reform, whether in the terms of pensions, flexible labor markets, perhaps product labor market, deregulations, an opportunity for expansion particularly small businesses. perhaps backed up with some structuring investment support. so the debate between mr. hollande if he's going to be president and chancellor merkel being what sort of package for growth. >> would it be metz of help have the right idea? >> i think it's fair to say that's probably right. austerity alone won't solve the problem sxecht over the most painful period of several years. perhaps that's too long a period. and just simply imagining that you can increase government spending across the board is going to solve the problem is also equally beyond the march. so somewhere in between based on a program of structural reform,

some infrastructure spending and sticking to the fiscal targets is the way forward. >> interesting what might do for german politics. we'll come back to that. also still to come, disappointing results from bp, group continuing it to struggle with the cost of the 2010 gulf of mexico spill. spill. 

bp ended the quarter with a larger loss in profits. kru crude production down 6% after forced to sell as sets including oilfie oilfields. robert, thanks for joining us. what's your own key takeaway this morning there bp? >> as you said, really disappointed the results this morning. the markets were expecting a little bit better performance from the upstream and downstream. we saw the asset sales since the

spill really hitting upstream production. downstream, bp is like all the major oil companies suffered from weak refining margin, but they haven't been able to deliver particularly well on the promises that they made. they made significant spending in the last few years making more profitable and hasn't really dised this quarter. >> output number, operational miss is something of a disappoint compared to royal dutch. >> bp is a recovery story. shares still about 30% below where they were gulf of mexico spill levels two years ago. a part of that as we've mentioned is really reflects the lower asset base of the company.

selling assets to help pay for this bill. but a big part of that really is the overhang in core cases in the u.s. that bp is still exposed on. in terms of production, bp production says will yethis yea likely be flat until 2013. >> so they're expecting production levels to be flat or even slightly weaker, but also planning more asset sales, as well. and if brent prices retreat from the $118 per barrel level, what does mean for bp's earnings next quarter? >> certainly like any other major, earnings are sensity to oil and gas prices.

such a significant production of oil production, as opposed to shell has more gas part of the portfolio. so obviously they will do worse. bp has guided towards around $100 a barrel expectations, average oil prices going forward. if prices do drop below that, they will suffer and the markets will have to take it if to account. no easy way out of that for bp. >> robert, do you think bp shrunk too much and now it's sort of got into a different rac range as a company and it won't be running behind them for some years ahead? >> without a doubt bp is behind in the sense that it's had to shed as sits to pay for the gulf oil spill which is still present in terms of investors minds

because that issue hasn't been cleared yesterday. whether or not it can rougher to catch up with its peers is open to debate. bp believes it has a number of key projects off stream. which will start to lift its key upstream earnings division. the real driver behind their profitability in the company. so it will hope to catch up with its majors, but i9s's taken a significant hit due to the gulf of mexico and outstanding fines. >> having to sell further assets, will that erode even further? >> around 23 billion sold so far, so you have a significant chunk of potentially production,

not all of it is upstream, so there will be a hit on output. but as i say, these new projects coming on stream should offset that and bp has said that it does expect to see production turn around at the end of this year starting next year when a new project will start to make up for these asset sales that have really dented output this quarter and in the previous quarters. gulf of mexico is a key issue there, for example. delayed a lot in the gulf of mexico. bp still the biggest producer there and that was one their core areas. we still should start to recover the end of this year, next year. >> and they say they will add more drilling rigs in the gulf of mexico, as well, budgeting about $4 billion in spending in that area. thanks so much for that, robert. and staying in the energy space, wood side petroleum sale to a

japanese consortium triggered a strong surge in its share price. the stock running up close to 4% there. australia's largest pure play oil company has given the thumbs up to sell a 14.7% equity interest. the deal potentially values the project at around $13.6 billion. analysts say the figure is roughly 35% bigger than their estimates. the deal's price tag underscores the small demand for l and g among asia's fuel starved economies. still much more to come. a stunning move by the reserve bank of australia slashing its key lending rate more than expected. we'll take a look at the implications on bonds and current ci currencies. >> and uk manufacturing pmi due. cturing pmi due.

welcome back. in the headlines today, china's factory output strengthens to a 13 month high if april, but misses expectations, the data suggests will is further room for more stimulus. and australia central bank rba slashing interest rates by 50

basis points on slowing growth and soft inflation p about their biggest cut since the global financial crisis. >> shares of bp fall after a bigger than expected fall in profits despite higher crude prices. and it's may day in the continent, many stock markets are closed. we're live at the rallies. >> manufacturing pmis out of the uk. 50.5 in april, weaker than the 51.5. lowest since december. new orders index contracted, the first since november. and the explanation, eurozone weakness. new export orders posted the steepest fall since may 2009.

so eked out some growth in april. slow down curbing demand for goods made in britain. as we see the pound also getting stronger against both the euro as well. the euro just putting on some meat this morning against the pound and that data not helping either. bob, with that flash negative print gdp, there was a big disconnect between the pmis in march and that figure. pmis certainly go back down to the gdp figures. >> i'm a great believer that the pmi is accurate look ahead. this is april, so it doesn't really refer to the first quarter. gdp figures will be revised up probably above into positive territory when we get the next revision during this month sometime. so the pmis weren't that far

away. what i think the uk economy is really operating on, pretty slow growth, pot deeply into recession, slow growth services sectornd at manufacture ear sector not showing much signs of accelerating. i don't think we'll see too huge a difference from here at all. >> it clearly is painting the picture of eurozone weak fs spilling over. your view is the eurozone weakness only going to spill over more? only get weaker and in pact more? i think what we'll probably see is this sort of figure for manufacturing activity and services activity over the next quarter or two. so we won't see any sign of improvement and we still have to remember that the government is

planning quite a fiscal contraction this year in terms of spending. the austerity package is really only about 15% to 20% through at the moment. so for the next two year, it will be quite severe on the government front. so unless the private sector comes through strongly, then the uk economy will continue to have below par growth. and par will be something around about 2.5% in real terms and we'll be lucky to get one it ye year. >> so this number pilling it down slightly. >> the aussie dollar under pressure, as well, as investors were taken back from by the central bank's aggressive policy move.

this report from sydney. >> you can certainly see from the immediate market reaction in the aussie dollar just how much of a surprise the 50 basis point rate cut was. it dropped three quarters right after the cut was announced to 3.75%. and government beyond yields hit 60 year lows. in terms of the central bank's commentary, the move came because of mainly weaker than expected conditions and low inflation. australian treasurer wayne swan has welcomed the move. >> this is an interest rate cut that house holds and small businesses have been hanging out for it's very welcome, it is well deserved. and it is certainly much needed. >> central bank also said it's knows deliver appropriate borrowing rates and that inflation is likely to remain low for the next two years. this leaves the door open for further easing should it be

required. >> let's's get some views from senior economist at west pack and joins us from london. james, thank you so much. you like many others were expecting a 25 base point cut, but they delivered far more. what do you think was behind the move? >> i think it was clear they should have moved earlier in year. we were expecting them to doubt in february. they did not. what the bank has said is that monetary conditions prior to today's cut were actually tighter than they were when they last cut in december. because the banks have been pushing up tear mortgage rates because of higher funding costs. and the saucy dollar has been particularly strong. and because inflation was weaker than expected and the domestic economy or some sectors had been underperforming, it was appropriate that policy or monetary conditions be easier than they were back in december. to get them easier, the bank judged that they needed to be moved by more than just a quarter of a percent. so they moved by 50.

we thought they would do it in two steps, but they decided just to do it all at once. >> ask this mean there is very little room for the rba to act further or is there further kurts down the track? >> when bill evans made the gutty call that rates would be at 3.75% by the middle of 2012 when the market perceived the rba had a tightening bias, that was on the basis of the view that there would be weakness in the domestic economy and inflation would slow. what's actually happened is than nation has slowed even more than we were anticipating and some of the domestic sectors are even weaker. so we're expecting more cuts before the end of the year. there's plenty of room for rates still to be lower. and it could be also that the reserve bank would move more than they otherwise might

because of the funding cost issue again. one of the banks has already announced just a 35 basis point cut in the mortgage rates. so that illustrates the point that the cash rate is not the only driver of monetary conditions. so their 00 trying to offset the impact from higher funding costs by doing a bit more. >> do you think the rba is trying to send a message out to the big banks that they need to follow in tandem with the rba cash rate, even after the rba left rates unchanged? >> it's absolutely the opposite point. what the reserve bank is doing is recognizing funding costs of the bank are not just driven by the cash rate. there's a lot of competition for deposits. banks are still dependent still on international wholesale markets. so recognizing that, the reserve

bank is cutting its cash rate more than it wants monetary conditions to ease. so it basically offsets the from funding. so it's making it clear that it understands why the branks are not necessarily passing on the full cuts for the reserve bank to lose. >> james, this is bob. i know gasoline stevens spends a lot of time looking at global situation particularly what's happening in asia. do you think that the reserve bank is considering the external problems for the australian economy, as well, if china will slow down significantly and he's trying to anticipate ntithat? >> yes, but i think it's more europe. if you you read the statement, you'll see there's more mention of europe in there than there is of china. china is slowing as the authorities have been intending is the way the reserve bank looks at that part of the world. but in europe, they say there's a lot of hard work still to be

done. if the global environment deteriorates further, and we think it's gog to ing to. >> and terms of trade have peaked,s as well. thank you very much, james. >> and so just more reaction on the ftse after that manufacturing pmi number. remember, we dropped down to 50.5. forecast around to be a number of over 51, so weaker than expected. big drop in export orders

component down to a contraction matter number. and foot city just dropping a bit as you can see on the back of that. suggesting getting weaker after that flash print of gdp, so as bob says, he put more into pmis than he would have done. it has also just taken sterling down a little bit, as well. sterling has been on something of a good ride recently, but now sterling-dollar below 1.62. chloe. and take a look at the picture that we have here. australia and japan among the key markets open for trade. australia ended somewhere around session highs especially after the surprise 50 basis cut move will. japan ended at somewhere around session lows, as well. some of the china plays also sold off on the market aside from the impact from dollar-yen moving back below the 80 handle. and remember even after the boj 10 trillion yen easing move

expanding asset purchases and also even extending the maturity of bonds that they're buying, dollar-yen has completely reached -- not only retraced its way back, but the yen has strengthened against the u.s. dollar, as well. ten year government bonds currently yielding at 3 abo.5%. and in fact a 60 year low. meanwhile take a look at the contrast. yield moving further south to below 0.9%. goes to show how much risk aversion is really out there in the markets. >> absolutely. and i don't know if you're planning to fly over to heathrow any time soon, but about if you are, get ready for a lengthy cue. now assessing when higher landing fees might be used to fund additional immigration border control staff. financial times says the planned scheme has the backing of david cameron. newspaper also says discussions could start as early as this week when airline meets with the

british interior minister. there we go, pictures taken. those were before you got the this to the passport control area and i was suck in one of them, as well. two hours. >> it's true then, they were saying it was just bad weather. >> no, absolutely not. i've experienced it personally. and, no it's happening. and you actually only have to look at twitter. how much damage economically potentially can this do? >> i think it's a very acute example of the situation that the uk economy is in. we've got a shrinkage of the public sector, so border staff disappear by huge amounts over the next year as part of the program of slinging the public sector and getting the deficit and debt down. that's supposed to be replaced by a boost in the private sector job growth in order to replace that shrinkage.

and here we see a class he can classic example. maybe more funding has to come through fees or in some other way for the airlines on ensure their sufficient staff to handle the sort of people coming into the number of people that will come into the country over the olympic period coming up. and i'm sure that it will be very damaging internationally if that issue isn't solved. >> i remember post-sort of 9/11, going to the states, i it actually thought unless i have to go to america, i'm actually not going to go because i don't want -- it does have an impact. >> jfk used to be just an impossible place to enter the u.s. from. go try to find some small mid western airport to land in. >> maybe we should fly to birmingham. but it certainly has an impact, as well. let's read on some other stories we're focusing on today.

rupert and james murdoch expected to be sentenced for their conduct over the phone hacking scandal as the findings are published in to the affair. an awful day's of weather, katherine. what sort of shelter will be given to james murdoch from in in committee? will they go hard at him or not? >> my sources in the committee tell mina this report is likely to be highly krcritical, even damning. however the key point is that james murdoch is unlikely to be se censured for misleading the committee. they have been much criticized from the closeness to the murdochs to turn the debate around and put the focus right back on the murdochs and their role in phone hacking. the report is released to

reporters at 10:00, but unfortunately yarks tell but it until 11:30 when i'll be back here on tell you all about it. >> all right. thanks for that. and of course we can follow you on twitter,s as well. we'll also take a look at which u.s. and european companies are the most shorted in the run up he earnings releases. says watch out for energy and biotech stocks. biotech stocks.

lids lloyds banking group says it's confident it can achieve targets. bank is to make further provisions for customer sold payment protection issues, but able to cut back debt to 1.7 billion pounds p we also heard are from lloyds, they had about 11 billion in loans from the ecb on the ltro scheme. this is sort of as they cut their uk borrowings from uk taxpayers roughly by around 10 billion, they substituted one from the other. how important is the ltro money? >> it's a bit of carry trade. how can you get it any cheaper.

perhaps earlier at one year. you're getting quite a lot of money not at the short he said, but the long end. and you can carry that into the market and make quite a nice little net income margin. >> none of it is going into the real qui and other measures appear to suggest they're going -- bank funding is getting more scarce. is there 234i way out of this? >> if we look at the data both from the eurozone which we had yesterday, the bank lending in to what we call the real economy it's either flat or slowly increasing or contracting in a lot of countries. so there is no way that this

money is getting in to the real economy. you could say it's an example of two things, one that either central bank liquidity injections or quantitative easing or a combination is not delivering what it's supposed to do in terms of boothsing the real economy. could you say he's keeping interest rates low. but all-time lows and short term rates are very low, on the gain is really just helping the banks to rover a bit on their balance sheets and not much else. >> let's bring in jackie. she joins us state side. a whole hour, more than an hour, still to go. what are we focusing on in the u.s. today? >> good morning. well, the april ism manufacturing index is out at 10:00 a.m. economy mists looking for a reading of 52.9. also we'll get march construction spending forecast to rise half a percent. meantime several fed officials speaking today, including

chicago fed president charles evans. and atlanta fed president dennis lockhart, both taking part in a panel moderated by steve liesman in california. also pfizer reporting results before the opening bell as do archer dan yae er daer daniels. after the close, cbs. >> and some u.s. energy related and biotech companies are apparently among the most heavily shorted ahead of their publication of results from this week. joining us for more, will, good to see you. you don't necessarily analyze the results but ship holdings reporting earnings, what does that tell us about how many people they're short something. >> a staggering inin ining 40%

borrowed. it's expensive to be shorting that much. there are two themes there. commodity group slowing down. one due for a major fall. it could get taken over, is there any consolidation. short selling a also fraught for danger. but you at the moment -- >> at risk of a huge squeeze. >> if there was spectacular results tonight, you might see momentum to the upward side, buts's a high conviction view. >> they won't see any particular pick up at up a in shipping trade and, therefore, there's a --

>> as you say, it's quite a crowded trade to be in. there must be other ship holders that you could short that aren't so short where your risk of a squeeze is not so prevalent. >> if i could jump in, when we're looking at some of the sectors seeing a lot of short interest, we're talking about energy. you mentioned biotech. also the u.s. home builders. are some of these trends something that we see on a yearly basis at this particular time or is it all stock specific right now? >> gr question. i think some of the themes regarding say the house bill has been around for a while, although we've seen some redoubling of the shorts in things like kb homes, short interest ticking up again, but it's not new news. in the biotech company maybe that didn't come lieu. you could see spectacular shorts

by a company that fails to get approval for a drug. elsewhere, energy, resource is a big short in james river coal. changes in the epa and licensing of carbon emissions. i wouldn't say america is off coal in any way shape or form, but it's getting who are expensive to be a coal -- >> it is when you see where nat gas prices are going. >> what about open table? >> 25% of its shares short. they've had to run for the hill wills nursing heavy losses as the price has gone up and up. it's into years floated and been a spectacular success so far, but one of those business molded molds that some of the analysts don't totally adapt to because

they can't see bricks and more tur and strong assets. what's interesting is that it was shorted. they've gone away again and the shorts have come back in with some convictionses. sometimes they're right too early. >> will, just picking up on that shipping segment that you were talking about, some argue that there is a genuine pick up in the container shipping space. so if you are an investor and you want to see protection, how do do you it that as you short some of these stocks? >> it could be some kind of a hedge on people who have suddenly turned to be very long. on the other hand, the size of the short position and the duration of the short bets means that it's probability on balance, people being negative rather than hedging a long position. >> you you look at the european names and you you talk about the

perennial short, i'll put the problem with sort of aller in a difference energy, a lot of these companies don't survive really without government subsidies. is that what investors are -- >> you have to be careful shorting companies where will is m&a risk, but not much risk in a business with a huge market cap, but all of the value is based upon subsidy. investors as you say, no new story. what's interesting is shorts coming in to siemens. share prices underperforming, they're very well diversified. quite a lot of money in to wind and they developed a lot of turbines and we've seen a little bit of increase in the short in siemens. >> overwinded these days. >> well, yeah. will, good to see you. thank you very much for joining us. i think you mentioned in terms of the effective fs of tness of number of shorts.

how often does the number of shorts tell you, yes, they've got it right and the stock price has climbed over a six month period? >> we have a research section on our website to get to that question. there is no black and white answer. but on balance over a long period of time, you avoid the short squeezes, it's a profitable thing to follow. >> good. >> no pressure. >> absolutely. bob, let's get a final few thoughts from you. more pmi numbers. elections coming up. it's a busy session. what is the key for you? >> i think we're still in a risk off environment. markets are very concerned about the state of eurozone economy, the ability of governments to meet their fiscal targets and the desire and commitment of both electorates and governments to do so. and we'll have some key elections, not just the french

election, but the greek election on sunday, and then we've got the referendum in ireland coming up at the end of the month, we have two regional elections in germany which could give mrs. her kell something to think about. she may not have a coalition partner worth mentioning. so the political issues will increase the pressures on the difficulties. i think europe continues to be the dominant feature. >> what does the u.s. employment picture do for investors? >> as the u.s. economy is moves forward as sort of a 2% pace, that's better than anyone else, but unless we see -- >> but not enough to take away the fear that there will might still be qe. >> it won't save the world and therefore the issue down the road if things begin to get worse particularly in europe is that qe could be switched back on by the third quarter. >> still a wild hanging in the

air. bb, thanks very much. >> lots more coming up on the show. of course everyone can go the question is it time to sell in may and go away. our next guest has again cut his equity market exposure and is recommending reducing cyclical exposu exposu exposure. find out why after the break. [ male announcer ] whoa, megan landry alert. and she's looking directly at your new lumia,

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welcome to the show. the headlines from around the globe this morning, here in the united states, investors decision on whether to sell in may could be swayed by today's key ism manufacturing data. >> china factory output strengthens to a 13 month high, but misses expectations. data suggests that there is room for further stimulus. >> and new export orders post a biggest fall in six years.

and bp posts a bigger than expected fall in profits despite high crude prices. >> good morning. you're watching "worldwide exchange." great to have you with us this morning. 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 on wall street. pretty much looking at a flat open. the dow could be higher by 9, nasdaq lower by 1 and just over the flat line for the s&p 500. a slightly lower day yesterday to end the month of april, the last trading day. the dow managing to eek out a positive return for anticipate. the nasdaq and s&p negative for the month despite the fact that april is historically the third best month of the year for the major averages. >> take a look on the shot of the peripheral countries. you can see the difference between the likes of the ib event x down 12% compared to the dax down 2% in april.

clearly it was the weaker eurozone countries underperforming. do you sell in may and go april? richard cookson, nice to see you. a lot of people saying it was different this will time and now we're sitting here wondering if it's that different at all. >> a lot of similarities to last year and the year before. some of the same reasons. you have the eurozone problems escalating again, you have a whole bunch of other stuff not to mention the middle east. >> if you look what happens in q

he '44 '08 and '09, the bar for numbers is very slow in q4 and q1 and goes up the rest of the year. so you you find that the numbers tend to come in better than expected and then come down again. and we're seeing pretty much a rinse and repeat of what we saw last year and the year before. so that's in the background of sort of that japan-like deleveraging of the private sector. so i do not think it's different. i think we'll still have these problems and that of course from an investment point of view has rather interesting implications. >> does that mean you took money off the table and if you took money off the table, where did you stick it? >> we've taken quite a lot of money off the table. we've been underweight this year. but we've increased the underweight a few weeks back. so what you find is that the activity surprises come in

weaker than expected and probably the ism this afternoon will be similar. they have the seam sort of problems, although less than last year. all that means is that you up your credit quality of your portfolio, more government bonds. it means from a an equity perspective, you switch out of the cyclicals into the defenses. so consumer staples, telecoms, utilities, that sort of stuff. >> richard, we're really seeing soft data all over the world. but it wasn't welcomed all that much by the few markets that were open for trade today. so in this kind of environment, would commodities actually be a better bet or does that story not hold given that china, too, is slowing down? >> no, it doesn't is the short answer. speaking of seasonal adjustment, looks like the official chinese pmi also suffers from those problems as you look over the past few years, you find that the pmi tends to peak in china,

the official one, in april. and that might help to explain the difference between the market pmi and the official pmi. still quite a big differential there there. china accounts for 41% of global demand for industrial commodities. if china slows even further, commodity prices will fall. it's as simple as that. and from our point of view, china is will in a difficult position. if you were speaking to rather more bullish people at the beginning of the year that said china would have cut policy rates already by now and further ease reserve requirements, they haven't done it. i suspect the reason is it's not growth per se that matter mis-china, it's distribution of that growth. in other words, you're seeing a very, very big difference in wealth for the poor and the rich. and that is the problem especially given you've got the change over of the government in oskt. so i'm not at all bullish about

industrial commodities. rather the reverse. >> richard, if i could just jump in here. i agree with your thesis generally that things are similar to some of the aspects of the picture that we saw last year. but things are a little bit different here in the united states. the data does seem to be a little bit more encouraging. not saying that it's great, but we're picking up at a slow and steady pace. so does that impact your me sis at all? >> no. i heard exactly the same at the beginning of last year. basically, listen, we're getting over this nasty deleveraging by the private sector and we're off to the races again. and the u.s. is doing very nicely thank you very much. listen, you've managed to eek out in the u.s. the slowest growth, slowest recovery since the 1930s with the loosest fiscal and monetary policy you have ever seen. private sector is still deleveraging because you still have massive debt to pay off in the private sector. so from my position, i'm not

quite sure why you'll be so enthused by the economy. the economy is only one problem. the other problem for the u.s. is that its stock market is fantastically expensive. the reason we say that is of course if you're looking at a forward or trading pe, that means something very different depending on where you are on the private cycle. profit share is at record highs. therefore given it's a strongly over time, you would expect to be reverse. u.s. stocks on that basis are twice as expensive as european stocks. so he i look at that and think how can i be so bearish about italy on the one hand and so bullish about the u.s. on the other. it doesn't cut the mustard to me. so, no, i don't think that that's correct and i think that actually we still have an awful lot of problem today. >> a lot of interesting points there, richard. particularly about whether the stocks can keep their share of gdp. so we'll come back to that. plenty more from richard. if you have any thoughts, e-mail

us worldwide@cnbc.com. so while you're worried about the selloff, don't worry just yet. head to cnbc.com to find out why stocks might be supported. and plenty to come as far as may day rallies are concerned. jackie. >> absolutely. we're live in paris and madrid where thousands are expected of course to take the streets today for may day. so stay with us.

good morning and welcome back to "worldwide exchange." time for your global markets report. we'll start in the united states. looking like it will be a mixed open. hovering just around the flat line. the dow could be higher by 7, the nasdaq by 1 and change and the s&p 500 just under the flat line. this after stocks ended slightly lower on the day for the last trading day of april. yesterday's trade hampered by a handful of mixed economic reports here the u.s. and the spain falling in to recession not helping things along. s&p sectors that we were watching yesterday, the only three sectors crowing on the up side. the worst performer, technology.

ross. >> no heat map today because most of the markets are closed for heyday holiday. there's ireland, the uk, and in copenhagen trading today. so we'll focus on the uk. ftse 100 just up 16 points at the moment. we've had some stocks to look at this morning, first of all, bp, oil producer shares down 2% earlier, reported a bigger than expected drop in profits despite an increase in crude prices. production falling, they had to sell out. supposed to pay the gulf of mexico oil spill. lloyds bank up 2.38%. the part government owned company today reporting quarterly profit in line with expectations setting aside to cover compensation for people missold insurance. imperial tobacco, fourth biggest tobacco company today, set a 500

million pound share buy back and also return on sales for growth. exstrata untouched this morning. we did see half an hour or so ago disappointing manufacturing pmis out for the uk. came in at 50.5. many looking for a figure over 51. a sharp fall off in new export orders because of eurozone weakness. the biggest drop since may 2009. so the pound against the dollar had been over 1.63 yesterday. down to on 1.6219. aussie dollar after the rba unexpected cut rates of 50 basis points. dollar down, as well, at around two euro-dollar, 1.3268. just a quick look at where we stand with bond yields today. as far as gilts are concerned, the gilt yield a little firmer,

futures perked up post the pmis. chloe. >> in terms of pmi, a little bit of disappointment asia side given take we were looking at closer to 54. we didn't get it. pretty much stood where it was the month before at 53.3. ultimately if you take a look at some of the key indexes, new orders going down while manufacturing output goes up. if you take a look at how the japanese markets traded, a lot of the china related play aside from some of the other exporter plays given where dollar-yen stand, quite a bit of risk aversion. but quite a bit of a pop over in australia. surprise 50 basis point cut from the rba, the big question is going to be whether some of the banks actually pass on that to their -- in terms of mortgage rates, as well. had quite a bit of momentum play on the australian markets. aud currently hovering at about two month lows against the u.s. dollar and also australian ten

year bond, interesting given that the yield is at 60 year low. something that we haven't seen for quite some time. just before i go, a quit note that hsbc will be coming out with a revised and final read of its pmi. it focuses on the small and medium sized companies. that's been sitting below the key threshold of 50 for nine out of the past ten months and section consecutive months, as well. so whether that number continues to stay below 50, that will certainly trigger a lot of concern about the extent of the chinese slowdown. probably not a hard landing, but certainly the conditions not looking all that great either. and that will do for me here in asia. thanks so much for joining us and we'll be back tomorrow with much more. have a good evening in singapore. here in europe, the traditional may day protests.

public and private sector unions marching in ath thens. you're looking at a live shot of the square. barely quiet at the moment. in made krirmadrid, we have bec. lots happening in spain. ecb meeting in barcelona on thursday. what's going to happen today? >> well, today is obviously labor day, a public holiday in spain. and protests, rallies planned across the country. here in madrid at noon local time, the rally will kick off and it will culmination in the square behind where they're just setting up the stage for some of the speeches that will be given later today by union leaders. and just behind me, if you look at the stage, you you can see there's a slogan right across the stage which says work, dig any ity dignity, rights.

gdp figures showed another contraction in the most recent period. so things are pretty tough in the real economy. and people are growing discontents at the way will has been handled by the new government. he obviously came out with an austerity budget recently and he's planned to cut tens of billions more euros off the budget over the course of the year, as well. the issue is the balance between austerity and growth. add to this the percent of investors watching yields of the spanish ten year debt hovering around 6% impact of the three year seems to have faded from the markets. and there's real concern about the state of the big spanish banks. not only did we get s&p downgrading spain recently, we've also had negative actions

on all the big spanish banks, as well. and there are concerns about what happens with property exposure because many say there's still some moves to the down side to come in rot prices here in spain. back to you. >> that's one of those other feedback loops. thanks for that, beccy. it is the last week of presidential election in france. stefane is there. provides a different backdrop to these may day rallies. >> plenty of tourists here, but in a few hours time, sarkozy will host a meeting just behind the eiffel tower. he's decided to order their own version of the labor day. not of course a regular situation. french people will vote in five days to choose their president and sarkozy using to flex his political muscles and organize

his own version of the labor day. the first time a french president has decided to attend the labor day as if he was not president anymore. of course we will have the regular protests from the trade unions. they've been doing so for the last 60 years, they will probably unemployment and social rights in france. but also send a strong political message to the next president even if it's a socialist president. unions want to make clear that they will keep the political pressure in ht context of crisis and also that we're having insist eent rumors like a warni from unions. also we need to pay attention to the extreme right. they will analyze the annual celebration of joan of arc. why we care, but marine le pen

is going to announce today her position for a tthe second rounf election. she's unlikely to endorse any of the two candidates sarkozy or hollande. they will probably recommend supporters to vote blank on sunday. so plenty of events will take place today in paris. it looks like we will have a political battle five days ahead of the french elections. >> stefane, thanks very much for that. jackie. still to come on the show, our guest host is recommending to go overweight on high yield cooperates. we ask him why. hey, heard any updates on the game? i think it's final seconds, ohh, shoots a three, game over. so two seconds ago... hey mr. and mrs. harris, where's kevin? say hi kevin. mom, put me down. put...the phone...down. hey guys. did you hear... the choys had their baby?

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you still think you still think there's not that much government debt that's really risk free. so how is that impacting the corporate dead mar debt market? >> that's a scramble for yields, but the way in which you look at that time is different. merd, the further done the credit quality curve you go, the more you actually need more

equity like return. so you see this huge scrabble for yield in the high yield market. we're a bit more nervous, we're still overweight, but less overweight than we were. and the reason is when you get a high yield, you're exceptionally selling a put on the stock market. so implied volatility in the stock market and high yield spreads are tightly related. much less true for domestic grade corporates. if you look at nonfinancial investment grades, spreads are still relatively high, but our view given that we have a japan like scenario for most of the developed world is that those spreads will come down over time. so a spread of 200 basis points is something very different depending on the percent. so we're much more enthusiastic about the investment great part of the curve than we are about high yield. >> will this this search for yield, will the demand lessen

anything? are we moufing back for less for yield? >> that is your big question. you have the risk free rate, government bond yield and the spread above that. we don't think long rates will go miles per hour and actually in a period when risk aversion rises, i i guess we probably would expect over the summer because of disappointing data and expensive markets, if that's the case basically you buy insurance options or you you buy government debt. so although nominal yields are low, our bet is they'll probably go lower. doesn't mean you hold them for the long term, but -- >> or you buy puts. >> right. the trouble will is that although near term volatility is

low, volatility is quite high. the longer you go out, the higher the price of volatility and the higher the price of that insurance. >> you talk about risk aversion. we just had the reports from beccy and stefane. how are you seeing the results political scene changing particularly about it we get hollande being elected? >> we've been saying there's a sort of austerity poised on europe, it's just impossible to pull off. the pain is just too great for the political systems to deliver. that's why government after government after government is being replaced. and now of course it's probably going to be hollande coming in in france, we've already -- but when hollande talks about having pro-growth measures, that's nice

in theory, but it's not the same -- it's the wrong ones. so we ease off. but if it you're the ecb and germany, that's not what you're -- if hollande does become elected, i'm assuming the bond markets won't react too well and spreads are likely to rise. and probably quite a lot. so in general terms, if you look at the periphery of europe, it's in a depression. i don't think there's any question about that. it's getting worse. the economic numbers are basically falling off a cliff at the moment. and the question is what is the likely policy response. is germany likely to adjust, i don't see that. >> all right. stick around. jackie. still to come, april wrought lots of showers to the markets, but that may not necessarily read to may flowers for investors. we'll chart the month ahead.

headlines from around the globe today, here in the united states, investors decision whether to sell in may could be swayed by today's key ism manufacturing data. >> china's factory output

strengthened to a 30 month high, but missed expectations. data suggests there is more room for stimulus. >> and shares of bp fall to the bottom of the uk market after the energy giant posts a beggar than expected fall in profits despite higher crude prices. nice to have you on "worldwide exchange." let's take a look at the u.s. futures and see how the markets are poised to open on wall street. no clear conviction. just hugging the flat line. dow could be higher if the markets were to open now by two and change. the nasdaq lower by 3 1/2 and the s&p 500 just under the flat line. >> you won't get much of a lead today from europe because most of it is crowed in terms of stock markets for the may day holiday. so there's only really three talking about. ftse really the only one worth talking about for international investors. you up 16 points. bp a notable decliner this

morning. production numbers missed expectations. other companies doing okay. while it's may the 1st, european officials are bracing themselves for the traditional may day protest. in degrees and france of course, that comes in election pre-election periods. marching in athens. crowds expected to build through the course of the afternoon. >> and we'll keep our eyes on that. meantime u.s. market cans defy the trend in april. historically the third best month of the year for socks. the dow just managed on end positive for april eeking out a small tiny gain, 0.01% gain extending its monthly win streak to seven. nasdaq turning it first negative month since december, the s&p

first since november. after april showers, may may not bring the flowers for the markets everyone is looking for. historically the third worst month for the dow and s&p and joining us to talk more about the markets and more strategy is jason lilly from rock land trust investment group. and richard is also still with us. jason, in the past few day, we've had a lot of bears on the show as we talk about the u.s. markets here. but you're a bull. so why is it time to get into the markets. >> we are a bit more optimistic. certainly if we look back over the last two years, that reference bias would suggest sell in may and go away. but we're a bit more optimistic. corporate profits continue to surprise to the up side. we're halfway through the earnings season first quarter. and 70% of the s&p 500 companies

have outperformed or have beat expectations. and we expect that trend to continue. >> i'll challenge you a little bit on this. again, as i said, we've had many bears on the show with a different point of view who have said we're looking at an earnings season that have beat expectations, but the expectations were so low, the only thing that you can do is to beat. and when you combine it with mixed economic data, it looks like things are picking up, but pot at the rate that the in-est investors were expecting. >> true. if we look at expectations mine months ago, this most recent is ahead, but well below those expectations from nine months ago. and we don't necessarily expect to see severe increases in those earnings, but we do expect some consistent single momentum.

margins are high, but if we've learned anything, they can continue to remain elevated and consistent. and we've seen a little bit of top line growth. gdp is growing. >> this is richard. if i look at the year on year growth in s&p profits, five sectors have increased profits, five haven't. and of those five, of course financials and tech are are the big ones. and when it comes to financials, an awful lot of that has been credit write backs and it week have been negative were it not for apple. so that's the first question. second question from my point of view is that you're talking about nine months ago. if i look on the year on year, 12 months board, i thinks consensus was far more optimistic about will this year than it's actually turned out. and the third big question, so they beat expectations by a

little bit. you're buying the long term earnings and from an investment point of view, isn't that pretty relevant? if you're a betting man and they're at record highs, quite a long way above record highs, surely you're more expecting them to go down than to go up. in other words, if you have a very strong reversing data series, why would you tip to expect that corporate profit margins would go from one record high to another? >> if you look at labor costs, they're down about 30% over the last five years. capacity utilization still has plenty of room there. so from a marginal cost standpoint, things still look

attractive. no reason to suggest that margins can't remain elevated for some time. consumer spending has picked up, up 4% year over year. certainly from a u.s. government standpoint, that spenkd has drop spending has dropped. disposable income up a bit, so consumers do have capacities to continue that spending. if you look at the debt service levels here for u.s. households, it's the lowest it's been in 20 years. so balance sheet is much stronger than certainly five years ago and a arguably in the last 20 years.

>> jason, we'll have to leave it there for the moment. meantime, stay tuned to cnbc. later today, steve liesman will be speaking to chicago fed president charles evans and atlanta fed president dennis lockhart. that's at 10:00 a.m. eastern time. don't want to miss that one. and we still also whether be talking to robert zoellick at 8:00 a.m. meantime coming up here on "worldwide exchange," pfizer set to report first quarter results in a little bit more than two hours. what do investors want to hear from the drug giant.

welcome back. pha pfizer forecast to earn 56 cent as share. the company is likely to focus on sales prospects for newer drugs. stock up 6% this year. joining us to preview the numbers is eia director and partner at frost and sullivan. great to have you with us this morning. a lot of issues to talk about when we're looking at pfizer,

but start with the call today. investors looking for sales growth from the newer drugs and creative ways of dealing with the named drugs competing with the generics. >> biggest news is clearly this is the first quarterly earnings report after lipitor went off patent protection. obviously this is not new news. the contingency planning around this has been will place for years. but nonetheless, this is the first earnings report after that happened at the end of november. so we'll see how sthat shapes u. paramount in invest ors minds when looking at phase epfizer i are they doing for not just the short term, but for the long term. how will they spend that amazing war chest of cash that they've got, will they do stock buy backs, will they potentially

acquire small bioteches. or will they look for a massive acquisition along the lines of the $68 billion wyeth deal. it's always interesting to watch. in many ways it's a bit of a dinosaur, on the other hand, it's a dinosaur with teeth. and it can go and gobble something up in a big way. so always interesting to see what their earnings reports will reveal. >> we also have the recent sale of the resin fapt nutrition business to nestle. is there any chance we could hear there will be a dividend hike? >> my understanding is that the dividends will be held constant at 22 cents. i'm not sure if it will go beyond that. it could. one would hope to see the dividend mc. i think shareholders would be

delighted to see take. personally, i would love to see it. i think it would be the smart thing for the company to do. but we'll see whether will they hold stable or not. >> highwthey had a 44% big drop profit, failure to bring new drug it is to the market. all the big pharmaceuticals are facing patent cliffs. do you try and just do a lot more r&d, do you diversify if in over the counter prescription drugs? are they just too big? >> great question. deutsche bank did a very interesting analysis in september of the net present value of pipelines, of seven of the biggest phrma companies in europe and only one of those had a net present value on their pipeline halves more than their r&d spend. so the r and didn&d spend is no.

nor know vnovartis is a bellwet watch. diversification and focusing on core research. so their r&d spend has been around good science. and 15 new drug approvals as a result. so in my opinion, when i look at the space, pfizer is the largest, the most massive, and it makes massive movements, but novartis in many ways strateg strategically is the one to watch. >> but it's not just about spending money in r&d to get new drugs. it's how you spend it and where you spend it. >> exactly. >> those are big decisions. >> and just in those seven companies that deutsche bank looked at in september, they spent over $100 million in five years. and they've gotten negative roi.

it's a horrific a fair i don't in every case except for novartis. gsk is kind of second. not so bad. but astrazeneca and others are very -- >> when you look at the numbers, sort of makes you kind of wins. 100 billion and no roi. >> yes, the great advantage, and we all know about this, it's not as we were saying earlier it's a huge shock and it's still a bit of a cash cow. so defensive market is okay, but you're right, there's big questions going toward about where do the blockbusters come from and how much do you have on spend to get there. that's the question. >> to me the issue is what phrma must address is genuine innovation. i mean, phrma has been one of the slowest moving industries in four years. i'm a former silicon valley guy, now living in europe. and when we look at the pace of new product introduction, it's

light years away from what phrma does. it's a very slow moving industry. but it must change. and it must change around the area of genuine innovation. not just at the product level, but the business model level, the process model level. the pricing level. there's got to be some new thinking. and with will this kind of money, with this kind of intelligent human capital, as well, we should see great innovation coming out of phrma. maybe it's time to get new consultants in. i don't know. but we need to get different innovation in the phrma space in my book. >> good to see you. thanks very much for that. just some other numbers we're looking at today. bp's end of the first quarter, larger than expected paul fall profit. 700 million less than what bp had earned in the first three months of last year. crude production down 6% after the oil major was forced to sell assets to help pay for the gulf of mexico oil spill.

and the government owned lloyds banking group says it can achieve full year pretax profit of 288 million pouns. the bank is to make a further provision for customers missold payment protection insurances. banks in focus state side, as well, jackie. >> slully. there could be more job cuts on the way at bank of america. the wall street journal reporting that b of a plans to shed up to 400 people from its investment banking, corporate banking and also sales and trading ultimates. they could also him mate up to 2,000 jobs if it sells it nonu.s. weallalth management business. aiming to cut 30,000 jobs over the next few years. and the u.s. treasury is considering whether to issue floating rate notes for the first time ever. the "wall street journal" reporting that this would be the

first new government debt product in in 15 years. the idea was first reported in february and treasury south public comment last month. the journal saying they would be used in place of short term debt with maturities in less than two years. and finally, dallas fed president richard fisher says he's against any further easing, but also not yet time to begin raising interest rates. speaking in california, fisher repeated his view that the fed shouldn't extend operation twist. he says until the fed stops buying bonds, congress will have little in-is incentive to tackett the debt. and coming up next, ism data. looking at the trading day ahead. >

welcome back. group on is shaking up its board replacing howard schultz. they'll be replaced by robert bass and dan henry. in march, groupon revised fourth quarter results admit to go a material weakness in internal controls. groupon down nearly half since its ipo price. >> meanwhile coca-cola is denying a report in the "wall street journal" it's been in talks to buy monster beverage. the journal says coke walked away and angry shareholders

question the potential deal price. coke spokesman denies that account. . monster controls around 35% of the u.s. energy drink market. its stock up 20% on monday, but gave it all back to close down nearly 1%. so quite a session. >> and delta air lines getting into the oil business. buying a refinery near philadelphia from phillips 66 for $150 million. phillips is beingnocophillips t. they will get sub city days from the state for job production. delta will exchange gasoline for jet fuel. the refinery will supply 80 respect about of its jet fuel needs in the u.s. delta rose 1.3% on monday. ceo richard anderson will be with us on u.s. "squawk box." so make sure you stay tuned for that. meantime let's see what else is coming up on our calendar. the april ism manufacturing

index is out at 10:00 a.m. eastern time. economists looking for a reading of 52.9, down half a point from march. also at 10:00, we'll get march construction spending forecast to rise half a percent. charles evans and dennis lockhart will be speaking in part of a panel moderated by steve liesman in california. so of course we will be watching for that. and pfizer reporting results before the opening bell as does archer daniels, avon. bio again. and after the close, cbs. automakers reporting april u.s. sales. while they may slow for rnlg made, analysts still expect them to continue at a strong pace. chrysler forecast to lead the pack with sales up about 19%. still with us of course is jason lilly, the director of portfolio management at rockland trust investment group. when we talk about the trading day ahead, this april ism number

definitely in focus today. >> expectations are for a bit solder number. so as low as we're firmly bowl th before that, i don't expect a major reaction from the stock marketperspective. >> and we'll have data out on construction spending, as well. it's been mixed when it comes to the housing sector. any indications in the near future that things will start to rebound faster than we thought? >> we think so. the data has been mixed, but biased to the positive side. we would expect to see single digits year over year and an annualized number of greater than 800 billion. >> jason, you talk about margin

s cans sustained. what's the longest? how long can they keep that? >> how long can they continue to keep elevated margins? >> yeah. >> well, with the current sort of monetary policies, the pro-growth, pro gdp type policies this place, i think they can continue that. the big key will be productive and as long as productive continues to remain strong, they can continue to produce and keep the margins elevated. so the question is when they need to start hire new workers. that will start to put pressure on those margins. >> jason, thank you. richa richard gave his views on that earlier. that's it for today's show from

both jackie and i. have a profitable day.

good morning. it's the start of a new month. i'll be darn. it is. so are investors taking positions to sell in may and go away some we've already been talking about if a that for like the last two weeks. makes no sense. empire under at taking. a key report on the murdochs due within the hour. and a day of protests planned in many countries. we have all your news covered as "squawk box" begins right now. good morning, everybody. well could to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. the et