# a very warm welcome around the globe. i have my numbers out of germany and france show that industrial activity has shrunk at the fastest pace in three years. here in asia, the worst may be over for china's factories as hsbc's read gives more evidence of a bottoming out product. but the manufacturers remain vulnerable to inflation risks.

they see their price fall but the stock rallies. the balance sheet is looking strong. and in the united states, who's hieshing in the private sector. investors are hoping indy p's data will a's concerns about friday's job report. hello and welcome to "worldwide exchange." i'm steve cedric joined by chloe cho. the final figure falling to 45.9. the flash estimate came in at 46. the march figure was 47.7. this is the lowest figure we've han since june 2009. the output index. 46.4. march data came in at 46.7.

employment index again dispiemting. 47.6% as opposed to a march figure of 48.7%, but i'm afraid this was the lowest figure since february 2010. all right. let's get some analysis on this. ricardo bausrbiari and our chie host. the pmis out of china have been encouraging. they've been encouraging the market to go on the front foot. is this going to send risk investors running for cover again? >> i don't think this should come as a surprise because we already had flash estimates for europe suggesting that manufacturing at tbt contracted in april. i think the surprise was the u.s. numbers which came in better than expected.

there's bln surprise, but clearly not in europe. >> what about working through the european countries as well? clearly we're hoping for strength out of the center, the north as well. is there anything that says the recession environmental we're findi finding ourselves in is going to be a temporary one? >> no. i think it's going to last for some time because we have some of the largest economies in recession, mainly italy and spain plus some smaller countries. the moment the support for europe comes from no european markets particularly in germany where it's shown some resilience. we've soon positive trading services in retail trade. there's also growth for the economy. >> let's get a view from james on this. in terms of the performance of

european equities versus the u.s. counter parts, clearly there is a divergence of any time period you want to look at. i was looking at the s&p versus the euro stock's index. there's always an s&p performance. does that mean that the european macroeconomic data is in the price? pr>> i don't think so. i think what's happening aet the moment is we're getting tail end of the ltro effect. it obviously stimulated banking activity. particularly the way the first wave worked, we receive an uptick in the eurozone m3 for the first moptd of the year. as a consequence i think what we're really seeing now is the beginning of european banks beginning that proper credit crunch and drawing back on

lending. so i expect to see my supply growth in europe for the rest of the years start to slow down quite appreciably. it becomes to throw things like the pmi numbers. >> so ricardo it means the process hasp when? >> beg your pardon? >> the process happens when given the given facing europe, especially spain? >> well, i think at least on my forecast, the pace of contraction should ease later in the year. of course, there are risks that this will not happen. for example we discussed the quarter. so things obviously could worsen further. my own forecast is that actually, as i said, the pace of contraction will decrease for the rest of the year leading to

stabtization in the area. but there's no denying that we have some downside risks from that forecast. one of them stems from the banking system which has seen a more enkulging survey from ecb last week in terms of credit standards. on balance, the effect is still negative for the economy. >> james, we've seen the number even worse than the flash estimate we got. what are your thoughts on where we go? >> it's more than passing the thoughts on to the rest of the economy. if the banking sector deals with its own deficit issues there are capital assets, particularly loan s loan assets. they will be looking to contract loan assets. and although the imf's report was very optimistic on the size

of the deleveraging that the banks will impose on europe, i think history and the irl evidence suggests that they'll actually be doing a rather more aggressive deleveraging. >> we're going to stay with you for rest of this hour. and riccardo, we're going to say good-bye to you. thank you very much. riccardo barbieri. it suggested that the opportunistic may have bottomed out. what's also interesting is that compared with the official gauge hsbc highlights how small china's base may be in the month of april compared to co the kbrt we see in the larger state-run counterpart. remember, hsbc's gauge, in fact, reporting to below 50 level for six months in a row. on a brighter horizon, we're looking at nine in the last ten

months. it's certainly pointing to an expanding manufacturer as we. the picture quite well over in india. let's get a detailed picture of exactly how both countries fair in terms of pmi numbers. tracey chang has the tr tracey. >> thank you. this is still the sixth straight month of contraction. there's still a divergence, like you said, between hsbc's reading and china's official pmi what the reading of 53.3. it focuses more on smaller and private companies while the official index actually surveyed many large and state-owned enterprises. so the differences between these two readings could really reflect the difficulties smaller

companies may have accessing credit, therefore, a smaller recovery. but most still expect to free up more lending by cutting the reserve requirement for banks. it bodes well for chinese growth. over to ekta to talk about the bmi in india. >> it came in at 54.9. this indicates there has been an expansion in april as well. anything above 50 indicates an expansion whereas it has also expanded at a faster read or a faefrt pace than april, vis-a-vis, march. now a couple of key points which are highlighted is the output growth has upgraded. capacity remains the same as well as inflation costs have

inched up a bit. what does this mean? it got around 50 basis points which took place earlier in the month. according to economists could now have been premature and too aggressive. inflation risks still remain to be extremely high for our markets. so the manufacturing pmi came in stronger but inflation news to be a concern. the rbi cut of 50 basis points might have been too premature and address. they're probably done for now. back to you, chloe and stephen. >> thank you for that. certainly signs that asia is picking up momentum. they expanded for a third straight month in april as new businesses continue to flow into asia's fourth largest economy. but asia's growth was at a slightly lower pace.

and over in tyron. let's try to get a closer grasp of what's exactly happening here in light of also the pmi numbers. going back to our guest host james. if the european banks need to get their house in order, that's going to have an impact. asian economies have had their wild swings every time they've pulled bam. what is this going to mean for how vulnerable asia is at a time when the recovery seems to be taking hold? >> it's going to have a mixed effect in asia. about 20% comes directly or indirectly from european banks, so as they retrench, they're going to retrench more aggressively. that's just the way these things work so that would have a negative effect on asia. having said that, it's opening up opportunities that already

the american banks are at a much closer to a recovery stage than the european counterparts can move into. so we've heard reports of banks like jpmorgan and citigroup moving in on the sorts of opportunities that some of the european banks have been forced to pull out in asia. i think the real worries should center around eastern europe on the one hand and latin america on the other. they're going to get, by the looks of things significantly more negative fallout than asia and have the compensating interest of the u.s. banks. >> how should invests price in the risk of the european delever ranging story and also even the political story that is playing out in many parts around the world in europe, asia, the united states? >> i think the political story is already fairly visible. we can quite clearly see democracies don't like to see a vote for austerity. so as soon as you get an electoral candidate stand up and

say this isn't happening, they probably stop voting for them. i think it's largely in the price. i think the sovereign peripheral debt stories are really very old hat now. therefore, i think the one unknown investors have to deal with is this new deleveraging. it kicked off around november of last year. we know how widespread and aggressive that's going to be. so that is the big risk factor going into the summer in europe. that's the thing which is not arguably in the price already. >> that's certainly a huge concern. we'll chat in just a second. james ferguson at westhouse. it could be a bit of a problem as china goes through its wave of reforms as well. that's actually what's been giving a lot of these markets quite a bit of a hick hup. today the hsb krl bmi, even though it was below 50 we saw a

bit of an improvement and there, were a handful of other markets under way. it will be cut by 5%. absolute terms the figure is not bag deal given that we're talking about fees around 0.7%, will go down to 0.5% from june. interesting point to note, it's more about the sentiment, what the beijing authorities intend to do and ultimately a lot of market participants took that as a soon that they're using bias. hsbc told us they expect about a 100-basis-point cut in terms of bank reserve requirements by the end of june. on the fiscal side they expect tax breaks for small and mid-sized company because this is where the pain is in china and they expect more sectors to be opened up to private capital and that's going to stabilize demand and investments and the overall picture as well.

because of that these markets had a decent run. you notice how japan and australia, the gains were actually muted. >> let's take a look at how the european markets are trading. what is interesting that despite the fact that we had pretty poor pmi data out of europe again, the positive momentum from out of the yrs means that by and large we're about 5% higher than the european indices. what is interesting is the massive divergence. let me draw your attention to the biggest gainer in the euro stoxx 600. that's currently trading as near as high for the recession. that's despite, we were saying, half their profit figure. this is due to shares of the likes of deutsche.

not the case at the wind systems. the biggest decliner in that. 7 07 or lower now over the lasts two months is where they're trading. it's the largest wind turbine mack maker. we'll speak with the ceo later. he mentioned how difficult it is to get the costs down. let's take a look at the prodder market. we've come right off the highs of the session. we are trading high even on indices such as the cac 40 that got a lot of attention recently. not only problems domestically, concerned about the economy, but you have this latin threat as well. they're facing appropriation fears of assetses. what an amazing turn around that is because latin america were

seen as a pottive, offsetting factors. not so in recent days. xetra dax is up. .77%. there in chattanooga they're putting more bodies on the mind because they're selling huge numbers of vw passats. the ftse was down. next is the home retail group down heavily after more disappointing data from this group. let's take a look at the currency. we've currently got the euro/dollar down half. the dollar/yen is trading up as we speak. the aussie yen is flat and the sterling is trading at 169.90. moving on, such a paltry market. spanish yield, 5.8%. italy, 5.10%. let's tell you what's coming up

on this program. ubs shares jumping to the top of the market in zurich after a strong set of first quarter numbers. we're going to get detailers plus later we're going to speak to the cfo of the bank charter. that's coming up in 15 minutes' time on "worldwide exchange."

in the first quarter. that's thanks to more than one billion swiss franc charged. that's down from 1.8 billion in the same period of 2011. ubs announced last year it was scaling back its investment banking business to focus on the banking side of the business. we're going to hear from the ceo sergio emotti. that's coming up later in the show. we'll try to get you some of that in this show as well. now we have carolyn schober. are you suggesting that given the market shares are down, the market has factored in the negative news?

>> well, first of all, years to date, shares are up by some 8%. yes, they may have fallen somewhat over the last couple of weeks but still it's been a good performance. also i would point out that it's got to be looking at the underlying performance, ie, the suggested tax profit which was 2.2 billion swiss francs. steve, there was this 1.2 billion swiss franc laws because they have tightened during the first quarter but, yes, the market knows how to look past this. this is why shares are up more than 6% at this point. fixed revenue incomes were up by some 45%. quarter on quarter. so this is a vd goor improvement. there. also i should point out. this is what a lot of the analysts have been stressing. kroft control is better than expected. it's 70% and this is a big improvement from the last quarter. and finally, remember -- and as you said, steve, this bank wants to focus on the wealth

management unit, way from the risky capital intensive banking unit and the inflows into the core business were quite strong. 6.7 billion francs in the first quarter. the only drawback in those numbers is the rather cautious outlook because ubs it rates there's uncertainty around the global market and that could hurt revenues in the interest margins. steve. >> thank you very much. we'll have the story. our guest host is james folks. james, we were talking off scam rah about ubs and you think there's an understood lying story which you think is quite interesting. >> yeah. whenever we quote full year

interim results we deal with that. really what we're dealing with is a bank blabs sheet process. these things could take several years, usually about 5 to 6 and during that time the banks concentrating on dealing with legacy loan assets. so it's really refreshing to see a market look at a weaker earnings. it's mainly weekly because of that. concentrate on the wlans sheet. actually the balance sheet is looking much more solid. >> they're trying to increase their ficc. you've got ubs is trading back. i'm just wondering if they're seeding ground in what will be very profitable fruitful areas if and when the economy turns around. >> it depends. they're looking at what sort of business they're going to have at the end of all this. so the first things you must concentrate on, first of all the

profit incentive gets replaced by the survival imperative. you've got to repair your balance sheet, deal with the bad debts and make sure you have a banking business at the end of it. hopefully at the end you haven't disposed of the jewels in your crown. and one of the crowns in ubs's crown that it has not had to dispose of is the wealth management, asset management businesses. they'll be looking at some that are faced with the prospect of selling off their wealth and asset management business. they say we've still got it. our balance sheet is fixed. >> there's a motive stock for the swiss francs and the swiss state generally of course, so the balance sheet all important to them as well. james, thank you very much for that. let's read off. i mentioned shares in wind turbine maker. that's much weaker than the 1.5 billion that was expected in the reuters forecast.

bskyb has posted a profit in the nine months to the end of march, that thanks to surging demand. bskyb whose main share horder, of course, is rupert murdoch's news corp. they had to withdraw a bit by the rest of the company last year following its phone-hacking scandal. >> let's tell you what's still to come on wor"worldwide excha." social unrest looms ever larger. thousands across europe joining mayday rallies. "worldwide exchange."

your headlines today -- more evidence of pain in europe's manufacturing sector. pmi numbers out of germany and

france show that industrial activity is at its fastest pace in years. for asia the worst may be over as hsbc's final read gives more evidence of a bottoming out but they remain vulnerable to inflation risks. ubs falls. analysts point to the swiss banks' stronger than expected wealth performance. and in the united states, who is hiring in the private sector. investors are hoping today's adc numbers will ease concerns about friday's job report. all right. we've got a lot of data out d o united kij dom as well. let's take a look at the april construction pmi numbers. 55.8 versus the march figure of 56 preside 56.7. that's better than expected.

activity is growing faster than april. apparently driven by commercial work and new orders. this is what the survey is saying. this conflicts with some official data about the sector as well. we've got some other data coming through as well. net consumer lending in march in the uk was 1.48 billion pounds sterling versus the february figure of 1.3. that is lower than expected. we were looking to 1.5. we go to a 1.4 billion figure and net mortgage coming in at 100 billion pounds sterling versus the february figure. sometimes, james -- and james ferguson is with us, chief strategist at westhouse securities. some look and say they've got the same problems as us, same recession, same influences. does the data today give you any clues? >> the answer to that is it's not necessarily the euro bank being stronger and the euro bag

weak. we had a terrible news globe really with all the greek crisis and how that's moving on. now we're worried about spain and italy. so all of these things should have been pushing the euro down. but euro was unlt going down because those that were dealing with their problems at the u.s. and the uk were busy diluting it. the euro was relatively speaking holding up. we're now moving into a face where mario draghi is not cutting rates. he's cut rates already down. he's got further to go. if the bangs keep contracting, lending in europe, he'll have to consider more diluted policies. so i think that's what you're seeing here. the euro being weak. >> okay, james. thank you. let's focus on the bank's

profit in knew zealand. improving over the same period last year. missing expectations with domestic growth and australia subdued. the bank was helped by a larger gain. with that in mind anz's ceo says they're hoping to have it by the end of the year, steve. >> right. the banks listed in uk, london, of course, and hong kong, says the euro income grew at a low percentage pace. that's slower than the 10% target. i'm delighted to welcome richard meddings, the cfo to standard chartered. thank you for joining us today. you mentioned your double growth targets are still intact. why is it not believed that it's slow activity going on. >> i think the q1 has been a very strong performance. actually you'll have to forgive me.

we have a loud speaker announcement going on on an alarm going across the bank. so i don't know if you can hear me, steve. to your question, we've got high single digit income growth, suffered negative impacts of between 1% and 2% and we had a very strong first quarter last year as a comparable datas there. we're tracking to double-digit income growth to one year. >> rest assured, we can hear you. we know you have this dreadful fire alarm going on in the background. if you can carry on, we can carry on. of course, you're looking at growth in china, india, and elsewhere, but there has been concern about the softening in the pace of growth. are you happy that those markets can still perform for you? >> yes, we are. i think the -- many of our markets are still showing very, very best growth. so china is still within 8%. india, 7%. if you look at indonesia and

malaysia, very strong underlying growth rates of 4%, 5%, 6%. so the underlying gdps that we see are strong. i think the area of question will be global trade and thing that has already, we can see, slowing. standard chartered trade is slowing. i think eurozone issues if they continue to deteriorate could cause a negative surprise, i think, to global trade volumes. >> with that in mind how are you skewing your business away from those eurozone risks? >> they have minimal eurozone risks and disclosers in any event some of the extent it does go into further difficulty, it's only the second order of consequences that would concern us. ie, how does that impact us on the asian economies that we serve. but we as the bank have minimal exposures directly to the eurozone. >> richard, and even as you plan to boost the presence in china,

how are you planning to take advantage of this government sponsored break-up at the leading banks at a time when growth is moderating? >> i think standard chartered's balance sheet is around $15 billion. it's about $10 billion to the wholesale business, $5 billion or so to the consumer banking business. we're seeing good growth. we target particular markets. we target the affluent customer segment in the consumer bank, and then much of the business we do for chinese corporates is in relation to the international trade opportunistics. so standard chartered's the main bank and we help our chinese customers to import commodities and other raw materials and to export their underlying manufactur manufacturer. so as china continues to grow as a strong opponent to asia, our business will grow with those customers. >> and recently there's also been some talk and speculation

as to whether singapore's state farm could be unloading. this has also triggered talk that maybe there could be a swapping of shares. would a bank like icbc, for instance, be a great fit for standard chartered? would it be a win/win? >> standard chartered ised cleay a strong franchise with a great momentum in actually the growth markets of the world. they have strong underlying momentum. our relationship is excellent. singapore is a key hub to our operations. our two businesses head office in since a pore. so the relationship between the banks and the singapore economy remains very strong and we're very pleased to have a strong supportive shareholder like them. >> we can still hear your fire

alarm, but you're doing very well, so we'll continue on. as complex regulatory requirements. i was reading really stinging requirements from the bank of eng and indeed from elsewhere in europe at a time when they're trying to gal van nuys more trade as you point out. are they too strenuous or complex? >> i think it's a mention tur. what we can do is an effect of pry or station of regulatory changes. there seems to be little focus on an insing of the cumulus of impact of multiple changes to multiple regulations all coming at the same time. the consequence of that is it's making much less able the banking industry to provide credit. so it's not a question that the banks should deleverage. of course, they should be deleveraging. it's the pace at which that

deleveraging is happening, around think what we're seeing in europe is actually the consequence. there was an eba report suggest 2g.6 trillion euros of deleveraging required to meet the new capital and deleveraging. the pace is what's adding to the stress in the european markets. so i think it needs a much more coherent and regulatory change. >> i a presume the europeans have to be careful. capital can be redirected anywhere globally and your aspirations is great example of how capital can go elsewhere. yo even got great hopes for africa. >> yes. so we have a business where we have many choices where we can invest, both capital and understood lying cost investedment in the infrastructure of our business. we're accelerating investment into africa and china, exc accelerating in hong kong and

indonesia and malaysia. so i think there is a clear evidencing of higher appetite for asia involvement by many businesses including actually many banks. the competitive challenge to our positioning in asasia, actually there's more coming now which is interesting. >> richard we're going to leave you but i can bet you your bottom dar lar your fire alarm will end as well. we got what we needed out of it. thattic you very much. richard meddings. the cfo at standard chartered. let's take a look at it. the pmis weren't grarkts let's face it. much weaker than expected for april. way tonight run through the uk figures as well. slicely better figures but it was a lessingening of it. as you all know anything below

50 signals contraction. i guess that's not -- why you're not getting a big move. 8.118. >> yeah, isn't it amazing how sterling has been the mode lately. he'll meet with the ceos of several banks. they're pushing back against the fed's proposal to limit their credit risk to other companies. lit could cap exposure at 10% of the firm's regulatory capital instead of the 25% of limit set under the dodd frank rules. they say this could hurt it. it was set up by ceo jamie dimon. he's expected to attend along with goldman sams chief blankfein. they'll be meeting in

brussels to increase capital ratios for the banks. they need to push through an agreement by the end of june. it's unlikely today as they're seelking to maintain some control over their own banking sectors. james ferguson at west house securities is still with us. are we aiming for the wrong things in terms of how we're look aket the banks and the financials for the moment. we want regulation. regulation didn't work. i'm thinking at a time when europe is perilously close. are we wrong to limit the amount of capital available to the banks to lend to the broader market? >> we've got twoishes, both of which we're looking at and both of which may be wrong. the first is maybe the right time to force banks to raise capital isn't the same time that the governments have been forced

to pursue austerity programs in europe. the banks are raising capital and they have to cop tract lending which means they're forced to run a surplus. otherwise we'll have a recession. this is exactly what we're seeing across europe. because the banks are unable to let the private sectors' animal spirits run free, as soon as the austerity programs bite, suddenly we're headed back into recession territory. this is a balancing act that's hard to maneuver. having said that, we do allow the banks to get to a highly lever ramged point. really where the meeting in brussels makes it wrong, if we come up with a guarantee or we fix a specific limit of capital for banks, all the banks were pushed to the very edge of that boundary. all of them will be trying to follow the same rules and what happens is if we get a calculation wrong, a zero risk weighted asset turns out to be highly risking, all the banks are at a risk a and we have

another systemic crisis. >> james, we'll leave it there for a moment. another side sign of the problems in europe is the jobless figures. it will i has seen a jump in march. it rose to 9.8%. that's almost half a percentage point higher than economists had estimated. the youth unemployment rate has climbed to a record high. tragic figure, 35.9%. the over in germany unemployment has posted a surprise increase in april. let's go now to patricia. we can study this in some detail. is this an erroneous figure or should we worry about none? >> neither is right it's increased by about 19,000 or decreased as analysts were expecting and also we should not worry because at the end of the day what we're seeing is a stabilization of a labor market that's been roaring ahead for the last two years. so all in all, yes, there's a

bit of a slowdown and a resilience as the market is starting to crack open, but at the moment nobody does seem to be that worried. so what we're seeing right now is the actual percentage point of the job else number at 6.8%. which is level. we are below the mark of 3 million people. 2.9 million people are actually unemployed. all in all i don't think it's necessarily a number to worry about, however, we're starting to see a little bit of a slowdown in germany as well. not only in the labor friend but the pmi as well. chl chloe. >> thanks so much. appreciate it. they set the mid point at another historic high. take a look at 6.3. that marked third consecutive record fixing so far. it comes as washington dignitaries including u.s. secretary of state hillary clinton arrive for the two-day strategic and economic die lodge

which opens in beijing tomorrow. but the stronger fixing failed to trigger prices to move up. many say that symbolic gesture hold nos concrete significance as evident in the moves there. let's talk more about this and many others. adam coal, head of current strategy at rbc join us along with our guest host james ferguson, chief strategist at west house securities. all of a sudden they seem to be making these moves but ultimately the market participants with are not really buying it and it seems to reflect how they're taking it as well. if you take a look at three, six-month and one-year charts. ultimately is there a way for investors to make profit out of the discrepancy? >> i think the market's cynical interpretation probably has some foundation in that we tend to cease these moves spots ahead of key political events and guy

geithner's visit is a indication of that. the long-term trend is for it to continue strengthening and probably more sew that the ndf rate implies. opportunistically, we still think the right way is to look longer in the forward market relative to a fairly flat forward cover at the moment. >> yeah. we know that the rmb at some point will become a global currency and we know that it is on its way up strengthening. but if you take a look at the near term horizon, a lot of people are talking about a flat move or even depreciating currency. >> i thoirk get to that kind of currency would need a blow up. the last time the pboc went back to the poll soif stability is when global markets with under

strains. we don't see that bottoming out. >> tell me about the dollar. one thing that was good was the markets really, really reacted to nice figures on the manufacturing front. it was the forward looking data i thought they got excited as well. i guess we need more convincing payroll figures to make this convincing. >> absolutely right. nink you look at everything the fed has been telling us it's the data driving from here. last month was disappointing. we think the risk is we get a run of disappointments on the payrolls as favorable weather conditions start to drop out of numbers. so we see the risks going forward. we see several months of payrolls lchlt actually against that background, thing you have to say that the implied probability of the fed easing further is more likely to rise and fall from here.

i tlink are still understood lying concerns on the labor market. >> i think we all agree the u.s. doesn't have a strong youtd look. it's whipping the ugly contest with so many other currencies out there. do you think the most important factor going into the end of the year is dollar strength or more accurately zero weakness? >> i think it's still a dominant trnld but within very, very moderate ranges. the trend is a very, very weak one and the volatility around it will be quite high. if you want to play a trend to weakness, my way to play it at relatively levels here is sell it to the dollar/yen. i think the pressure on dollar/yen is still downwards f we still have some residual of the rallies in february and march and i think that's a more

efficient way. >> yeah, that seems to be the trend even with the boj easing last friday. thank you so much for that. skr nbc will be covering live. stick with us for the live and breaking news. >> as if life on "worldwide exchange" susn't enough. con traiting on rocking the economy. find out more nikt.

we need a final thought from our guest host james ferguson. they said we're making way too much of this decent ism manufacturing data out of the united states. he said, look, it's meaningless to consider when you consider how consumer-focused the u.s. economy is. has that correspondent got a point? >> it's not so much as it's making a big deal out of any of these sort of monthly data points which are very volatile by their nature. the most important thing about the u.s. going out of this year is what happens to the bush tax cuts. if they keep them going they'll

be significantly stronger than if they let them die their death. what we're looking at in the margin as far as manufacturing or the services data could possibly be overtaken by politics anyway. >> big question. what should we invest in now? >> i think the outlook for the dollar does look -- i was trying to lead your guest there on that, but i think the outlook for the dollar going forward on a short, medium and even long term basis does look very compelling, but it is really about selling the euro because the euro is going to have to dilute the currency. >> if i was buying dollars and assets in the u.s., would it find its ways in equity? >> if you wanted to play the long-term contrarian, you'd look at the property. it's through the roofs. you've about got a currency play and a residential property play. >> james, we'll leave it there. it's been a real pleasure. you should come on "squawk box." they're upset about me trying to post guests.

moving on we have one hour of great programs to come. it's even better because jack can deangelis is here from the u.s. jackie, nice to see you. >> nice to see you, steve, and good morning, chloe. we've got the report out at 9:00 a.m. eastern time. calls for 27,500 private sector drops. meantime fed government dan tur rue low speaking to the foreign relations in new york at 8:00 a.m. both speaking about the economy as well later in the f an. meantime comcast reporting reports. still to come on the show iron maiden front man bruce dickinson. he's planning to open an

aviation support senn never the wales. that's going to create a lot of jobs. the new company cardiff aviation will provide new services, training and maintenance to boeing. he's expected to create these jobs within the next 18 months. i don't knowing you guys but sounds like it's a good even dever for him to pursue. jobs are always great. >> it's fantastic. it was way before my time as well. uplifting song as well. i was looking at some of their biggest songs. "fear of the dark" "dance of death," democrat run for the hills." chloe, what about you? are you an iron maiden fan? >> oi, yeah, you can imagine me head banging and listening to

the tunes. all these celebrities are out there flying. i would attend classes. would i hitch a ride, i'm not so sure. jackie? >> i agree with you. not about to hop on myself. as we said they're set to report results today. we're going to tune in and hone in on these numbers at 5:29 eastern time. don't go anywhere. we're going to be right back after the break.

good morning and welcome to the show. >> more evidence of pain in europe's manufacturing sector. the strongest pace in three years. here in asia, the worst may be over for china's factories as hsbc gives more evidence of bottoming out but manufacturing remains vulnerable to inflation

risks. a bit of a double whammy for europe today. we had the pmi figures for manufacturing. now we even got the march jobless rate number for the eurozone. it's at 10.9% versus the previous figure of 10.8%. this is in line with expectations. i'm afraid it does represent the joint highest rates since records began in 1995. jobless rose by 169,000 people in march to reach a record high of 17.4 million people. let's take a look at how they're performing. don't forget, for many indices, this is the first trading of the week. the uk was in business as was the u.s. for a lot of the indices, they're playing catch-up. we had a strong session on the dow, a strong session on the ftse. we can see the extra dax was up. the contact core rant. the ibex suffering from the double whammy of concern over

the appropriation aspects in america plus the concern about the recession there and the con strakz of the economy. the ibex 35 down 1.37%. let's move on and take a look at what's going on in the futures with jackie. >> well, steve, we are looking at a little bit of a lower open in terms of the markets right now. the futures hovering around the flat line but again slightly lower. if you take a look, if we can get our board up, you can see if the markets were to open now, the nasdaq by 6.25% and the s&p 500 lowered by 1.5. stocks finishes off higher. kicking off the may trade on a positive note. the dow up 65 points, at its bette closing high since december, 2007. pretty good number there. as you said, a better than expected april money manufacturing report helping spur some of the momentum of the

day, calming some of the wors that a slowdown in the u.s. in recovery is not, in fact, taking place but making some feel, in fact, like we're seeing the growth and what we need to see here to indicate a positive recovery. steve, back over to you. >> interesting to see the role out of technology late. let's move on. the contraction in manufacturing activity in the eurozone continues. it fell to 45.9 as missed estimates hit the lowest level since june 2009. chloe. >> thanks so much for that. meanwhile asia's factory sector shows steady growth in april but face as choppy recovery ahead. hsbc's china suggests that the opportunistic may have bottomed out in the first quarter. over in india they continue to expand their output. over in south korea and taiwan. mvging staying above the 50 boom level. a bit of a patchy figure, jackie, but seems to be they we

have certainly moved away from a bottoming out process. >> absolutely. and that surprise pickup in manufacturing activity here in the u.s., giving a boost to the dollar and equity market this morning as well. the ism index rose to 54.8 in april, the highest level since june last year and beat economists' estimates and beat the markets yesterday. steve. >> let's get to our next guest, steve wattling of long view. it's simplistic but you can present the idea and break it up. europe is in its own bubble. the rest of the world not only has policy tools available to it but is providing much better negotiating the global storm. >> yeah. i'd characterize it slightly differently. the whole of the west is deleveraging, america, uk, and europe. and there's two ways to delever ram. you either take the pain with the deleverages and the forces dominating on the economy,

which, of course, is spain or you prinl and try to offset the broad money in the economy. >> it remains to be seen. europe has no growth. in fact, in many cases it has contraction as well. it is much easier to reorg nice your economy if you have growth, isn't it. so are we doing this the wrong way around in europe? >> i think in europe you probably need to print some more money basically. we have bun phase of printing and stood back and within europe itself as well. of course, there are parts that are weaker than other parts. so places like spain increasing to hole lard, greece, france, italy where you're trying to attract fiscal deficits in a deleveraging economy. you need more stimulus. you need to print money and so on. we need to currency lower in

europe. >> what about the chinese perspective here? they seem to be in a soft spot, probably will avoid a hard landing but at least they're introducing market reform measures. how much support can that give global equity markets? >> china's not going to give as much as they had two or three years post financial crisis. it's in a soft landing. i would completely concur with that. it's not going to waste away. my impression is policy makers as we get into the new leadership next year don't want to reinflate the speculative element of the economy. we're seeing that with house price. they're not rushing to deflate that or destabilize that. they're looking to clean up the element of the speculative element that we see in house prices. so the chinese economy is going to grow. probably the same next year or even less if they decide with the new leadership to really clean it up quite aggressively.

so i don't think china is going to add so much zip to world economy as it has in the last two or three years post the global financial crisis. hey, chris, it's jackie there. they would like to see quantitative easing, another round of it at least on the table. do you think that's something we may potentially see or do you think the signs here are encouraging enough where the feds are going to pull back and take a wait-and-see approach and hold that a little bit longer before it make any definitive decisions? >> i think the debate around the states is getting increasingly complicated because there's a very strong argument that the housing market has reached its bottom and is now starting a new slow -- it's not a fast uptrend but it's an up trend that's under way. so that to my mind complicates the whole u.s. debate.

because clearly parts of it are deleveraging. they still need to reduce their debt levels. there are headwinds and there are challenges. and i suspect the outcome would depend probably on the market. and if we see the market pull back 10, 15%er of the course of the next few months, i think they'll step back. >> chris, we'll leave you there for the moment. of long view economics. argentina taking over those ypf assets. now bolivia, the president of the country has basically used may day to appropriate yat the access of an electrical called which operates 1900 kilometers of power lines in bolivia basically saying they hand invested enough. the europeans as you can mags are up in arms once again. dow jones is reporting that the eu is concerned about these actions and the action sends a negative signal to the

international investors and they trust they will uphold investment agreements with spain and join prompt. but as if spain doesn't have enough headaches, the stories they have got has now been called into question. jackie. >> absolutely, steve. and still to come on the show, the ceos of four of america's biggest banks set to meet with the federal reserve later but what's on their agenda? we've got all the details coming up next.

good morning. welcome back to "worldwide exchange." let's take a look at the united states. looking slightly lower. coming back a little bit now hugging the flat line. the dow would be oh lower by 1.3, the nasdaq by 3.7. meanwhile stocks higher yesterday. kicking off the first day of may with a positive tone. the dow up 65 points at its best closing high since december 2007 and it was that better than expected april manufacturing data helping to drive the sentiment yesterday. all s&p cap sectors closing in

the green. how are the european markets close after the may day? >> it's the first night because a lot of them took a monday off. many call it the make the bridge from the weekend. it's kind of catch-up really and i eat pretty good that e with are catching up, ie in positive terms from the big move we saw because the data on a macro fund is poor. the jobless figure, maxed extendation, but a record 17.4 million people unemployed in the eurozone. that said there's some interesting corporates. first of all let me show you the ubs. it's up over 6% and that's no mean faeeat. their profits were high. it's the underlying business, the balance sheet which is looking pretty good. the same, i'm afraid, can't necessarily be said for vestas

wind systems. down 8.6%. this is a company that has low expectations anyway. it's down over 70%. 7-0 percent over the last year. take a step back. this is a wind system company that's competing with traditional energy sources and we have high oil prices over $100 a barrel and still they're not turning around the kind of figures they want. real problems on cost as and when i spoke with the ceo today he was very evasive about the possibility of a tie--up with one f the big chinese players. i'm afraid to say spain. when they sort out the domestic problems, shares down 1%. the cac 40 in france is up over 1.3%. in germany it's higher. regarding the u.s. for the last month. i think they're over 31% factories in tennessee and elsewhere. good news there for the xetra

dax. london, don't be dismayed to see the ftse 100 flat. that's pretty much because we had the gain yesterday. we come off it a little bit today. one of the decliners was the home improvement chain. real problems over there. home based unit and there are multiretail units as well. euro/dollars trading down. not unexpected when you see the good pmis out of u.s. dollar/yen up 3.1%. we'll take a little bit of a quick look at the sovereigns. you get 1.567%. the safety trade very much still in tact. the spanish yields creeping up dangerously creeping in. italy, you get 5.5% for your money and the ten-year gilt has given you a return. let me hand you over to chloe to hear how the indices traded.

>> plenty of gains on the asia side, steve, but the focus was on pmi numbers. the number was above 50 but still slow with march's level. hsbc's pmi continues to slow discrepancy with the number. but at least the consensus means the bottom out could have hopped probably sometime in the first quarter. policy implications. we talked about this. hsbc said they're expecting 1-point basis cut. perhaps some tax breaks for s&ps and as china tries to restructure its economy, thiel probably open more sectors and that is going to level the playing field and that's going to create a sense of stability for china. and part of the reason the markets shot up 1.8% on the seven-week high were the market helping measures. in fact, cutting, trading fees. in absolute terms it's not a big deal.

0.7 to 0.5, 0.55. it's more the message they're sending out. they plan to make it a more invefment playing field. that's why we saw quite a bit of decent gains. given that they were trading yesterday. and sticking with china. the country's state media reports that dissident chen guangcheng has left the u.s. embassy out of ssy his, quote, volition. he had been there for six days. according to "the washington post," chen left the embassy by car with gary locke. he was taken to the hospital where he was report lid doing fine. china has denounced the u.s. in interfering. this comes as top usually officials including secretary of state hillary clinton arrived in beijing for u.s. talks. remember that we'll be bringing you live updates and in-depth analysis on the economic

dialogue throughout torl and friday. our emily chan will be on the ground. that's going do it for me and the team here. thanks for joining us. and, guys, have a fantastic show. >> thanks for that, chloe, and have a great night in asia. meanwhile fed governor dan tarullo is going to push. the fed plan with cap exposure at 10% of the company's 10% capital instead of the 25% said under the dodd/frank rules. the meeting was reportedly set up by jpmorgan's ceo jamie dimon. he's expected to sit with chief blankfein. with us, of course, is our guest for the hour chris watling.

in the wake of the financial crisis, do they have the kind of lefrmg to be pushing back against regulation right now. >> well, i think they have a lot of political power, the ceos and the banks themselves, the u.s. and the uk have provide add lot of money to political party, which gives them a lot of lobbying power, and we receive that over the last few years since the global financial crisis. the dodd/frank bill didn't come through. it was diluted heavily because of significant lobbying and that is a continuation of that from the banks who obviously wish to retain their profitability and their pair on wall street and so on. >> all right. chris is going to stay with us. we're going get more of his insight on the show. meanwhile coming up on "worldwide exchange" finance ministers meeting in prusles as the threat looms ever larger with thousands across the globe joining may day rallies yesterday. [ male announcer ] this is the at&t network.

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good morning. welcome back to "worldwide exchange." shares could price on the 17th and trade on the nasdaq on the 18th. reports say ceo mark zuckerberg will be involved but the bulk of it will be headed by other executives including cheryl zuckerberg. steve. >> there's a profit nine months to the end of march. thanks to surging, they say revenue grew by 5% in the period. news corp. owns 39% of the group and had to withdraw a bid to buy the rest of the company last year following its phone-hacking scandal. meanwhile rupert mer dock's phone hacking scandal continue

review continues on. they concluded murdock was unfit to run an international company, although conservative members of the panel refused to endorse the judgment. the news corp. chief judge says the company's working hard to rectify mistakes. jackie. >> and cbs's first quarter profits jumped 80%. boosted by revenue showing to online video soots like hulu and netflix. strong advertising growth and higher fees charged to cable operators to carry its channel. taking a look at cbs and seeing how it's doing in trade, slightly higher by about half a percent. 25.55%. and still in the media sector as well, comcast reporting first quarter results at 7:00 a.m. eastern time. the parent of cnbc and nbc universal is forecasted to earn. time warner also reporting first quarter results at 7:00 a.m.

the company which owns channels like hbo and cnn and publishing magazines like times and sports ill nated is up. i'm joined now by david joy. let's go ahead and talk about some of the earnings we're expecting today. we're looking at comcast and warner. you're fine-tuning your estimates. tell me why? >> we had to adjust time warper for a write-off of one of the shows they had to cancel for hbo called luck wc eed "luck" and h the expenses. we took that down about a week or so ago. they benefit as a number of other cable network-oriented companies do from the compression of the nba schedule. so there are more nba games and

therefore tooidsing year over year in this first quarter versus last year. so that should help advertising be about a 5% grower for the company. >> okay. and we're looking in the media space as well. we read the facebook story. we're looking at that ipo coming out. when we're looking at facebook and looking at how they resh lugsallized social media, how is thank go to impact the traditional media copes as we move forward? >> it seems like they've been embracing the new digital evolution. it seems like the social media and twittering and using facebook and using facebook is really getting people interested in particular shows. it veps a lot of buzz and people don't want to miss out on story lines for script or reality programming. it seems like it's helped, you know, some of the better programs. it's helped traditional tv viewing for example by making it more of a social event. >> david, i'm very interested in

why we still talk about media companies than broader companies that broadcast media and quadruple play. you mentioned time warner. if every there was a company that had a rocky road on media play, i'd guess it was time warner. how do they get that from multi-media platforms? >> well, they have the ability now to sell their -- the content. if they're making quality premium content, they can sell it on multiple outlets. you have netflix paying up and amazon paying up for the digital streaming. those are called over the top or video distributors. now consumers know they can demand the content on an ray of platforms at any time, so content is becoming more of an on demand kind of a content.

therefore they're getting paid more time for the same piece of content. so they're getting higher margins out of it. they do have to thoughtfully adjust in what windows and sequence the contents are available on these different platforms but it's getting more and more confusing for the consumer but making it more available to them. >> speaking of that, i do want to talk about comcast a little bit as well. you're indicating your buy rating. your price target of $39. you say you're hiding the fact that there's a wide array of assets highlighted in the portfolio. >> we do think it's one of the cheaper stocks in the media universe. we still think there's a lot of upside. $35 at least, i would say, in the next year. the stock has done well since the fourth quarter report because they surprisingly lost only 17,000 video subs then. about 100,000 less than people were expected. we expect that they'll continue to show improvement on that line. so they are getting a grasp on markets more of their products,

array of products to the customer, the triple play. also from the nbc side, which comcast owns 51% of, they have -- they have a lot of upside from trying to turn around the nbc part of the equation, the broadcasting part. it's still unknown how much they're investing truly in the program. that is, in the short term, hindering, you know, the margins. but i think long term that's bringing more viewers in to both the broadcast companies as well as the cable properties. we do like that they've also doubled down on the theme parks. that's actually a pretty high business for them when think bought out the other side of blackstone. the cable networks and on the comcast cable side, the main driver, when you think of those -- those are the higher margin businesses, it's good that those are the ones that are growing the best and those are the value drivers for comcast? and we're going to get more for

comcast as well. we've gottet the the ceo on "s box." thank you very much. david joyce from miller tabak. a judge in manheim has ruled that xbox gaming consoles and windows 7 on rating systems infringe motorola's patents and has ordered microsoft to withdraw their product from the jaer man market. coming up while the u.s. markets may touch the new highs don't be surprised if they retouch the lows over the next two years. we're going to ask him what's behind his predictions straight ahead after the break. stay with us. stay with us. >

good morning and welcome to the show. the headlines around the globe, who's hiring in the private sector. investors are hoping adp data will ease concerns about friday's job report. the jobless rate in the eurozone rises to the highest level on record. it shrinks at its fastest rate in three year.

they slump to a new two-year low. and in asia, the worth may be over for china's factories as hsbc's final reading gives more evidence of a bottoming out. but india's manufacturing remains vulnerable to inflation risks. and usb falls. stronger than expected wealth management performance. good morning. nice to have you here on "worldwide exchange." if you're just tuning in, let's go ahead and look at u.s. futures. looking slightly lower. if the markets were to open at this point, the dow would be lower by 14, the nasdaq by nearly eight points lower and the s&p lowers by a quarter. the dow closing at a new 4 1/2-year high. yesterday on the back of the positive ism data. in fact, the dow and s&p 500 have now closed up on the first day of the month each month this

year. the nasdaq streak has now been extended to six straight months. joining us now is t. dale. still with us of course our guest host. teague, want to go ahead and start with you in terms of the performance we saw on the first day of may yesterday. slightly some em couraging data that we're seeing and the markets are taking that as a positive sign. yet you say there are still some headwinds and we should be concerned there may eventually be a pullback. >> sure, yeah, there is economic data that's positive that continues to come out in the united states in particular. the one thing i would simply observe is that the level of positive data is beginning to slow with the growth rates we're watching are starting to slow. our expectations is you're going to see the data as it begins to slow you're likely to see earnings disappointments coming out through the. going quarters through the rest of this year.

a lot of it thoos do with the debt crisis. it continues to weigh on our growth rates. it's really within that context you have to be careful as the equity prices are still within the 2007 highs this year. >> okay. so what would your strategy be, then, in terms of investment right now? if you can't really invest in europe because we'red about the concerns of the european debt crisis. if we see growth slowing in china as well and we're worried about what's going on in the united states, are you putting money in the ee americaning markets. >> right now i'm starting to move up into the capital structure. by that i mean i'm reducing overall equity exposure. equities that are going to be more defensive, paying high dividend yields. then i'm going to be looking at corporate bonds. then we'll be looking at treasuries as well as the merging market bonds and some high yield bonds as well.

it's in that context really where what we're trying to do is the return of our clients' money. again, the risks that we see is that there's sim already more downside from here than there is upside. >> t. doug, i would come in at this point. why do we need to take a position on it at all? when i look at the performance of the euro stoxx 600 versus -- pretty much any time frame you want to look at, there's been a significant outperformance. why continue to play that one if you want to be a little bit more risk averse? >> well, you could. i would just simply say that, you know, again, the risks here are -- right now, i think, are not being recognized in general in stocks globally. if you think back to where we were back in this time, 2011 as well as 2010, the data was doing the same thing. the data was looking like it was improving and then what do we have in the next two quarters.

you have 20% selloffs and equity markets that call the executive banks come out. it could very well be the expectation we see in 2012. >> all right, t. we're going to have to leave it there for now. t. dale, chief investment officer at security blue. >> meanwhile they're hoping they will ease concerns about friday's jobs report. we're going to discuss the upcoming data next. make sure you stay with us. u stay with us.

a very warm welcome back to "worldwide exchange." the profit up thanks to more than 1 billion swiss franc charge on its own debt. let's go out to chair lynn shar who's been speaking with the ceo. >> you have to look at the adjusted pretax profit. that was definitely better than expected. that beat was driven by revenues in the investment bank, fixed income doing very well. but also better cost control of the investment bank plus the wealth management unit which saw strong margins and inflows. i got a chance to catch up with the ceo. he was, as you would expect, quite pleased about these numbers as well. >> i think it's clearly the in

fact we achieved good results across all our business lines and at the same time we lead on our strategy objectives. that's very important for us. >> what about the second quarter and the start to it. has the activity in the past couple of weeks give any indication this you're able to carry over that positive momentum you saw in the first quarter? >> the situation is still very volatile. it's still very dull. it's not dissimilar to what happened in the first quarter. that's our outer outlook for the second quarter. it's exactly the one we had back in january. so it's going to be still bumpy. but, you know, clearly we do see that the lines are still fairly conservative. >> but what would you say are the biggest risks to your business, declined activity, flows in the wealth management and investment bank. what are the biggest issues here? >> well, the biggest issue is

there's something happens and we'll distort the situation, but, you know, from my standpoint at this point in time, all the risks we have is that we defocus from our strategy to be honest so that that we are focusing on further increasing our leading capital position across in the industry. we want to further reduce costs and we want to reduce our operation and risk framework. >> and, steve, let me focus in on the wealth management unit. it has suffered greatly because of the sub prime losses, because of the rogue trading scandal. but i asked sergei err moty whether the company was able to restore the confidence and based on the inflows we saw in the last couple of quarter, it seems like it's on track here. he pointed tout me last year the bank saw very strong inflows of more than 40 billion swiss francs. this quarter alone, 6.7 billion

in its wealth management. wealth management america sees inflows of $4.6 million. that was also very, very strong. it is on track toward reclaims that top spot. steve? >> excellent work, carolyn. thank you very much for that great report there. the bank listed in london and hong kong said the income grew at a low single digit percentage pace. that is slower than the 10% target. speaking earlier to cnbc. the cfo was pretty cautious about the prospects for growth in europe. >> it's not a question that the banks should deleverage. of course it should be deleveraging. it's the pace at which that deleveraging is happening. and i think what we're seeing in europe is actually the consequence. there was an eba report suggesting, think, 2.6 trillion euros of deleveraging required to meet the new capital and liquidity. the pace is what is adding to the economic stress in the european markets. >> i hope you're all sitting

comfortably. something i didn't think i'd be reading this year. s&p upgrades greece, but, i mean -- it's measured but it's still a positive move. razing it to aaa from sd. racing long term rating. it says the outlook is stable in greece. now, that is a massive boost for the country. admittedly, still incredibly low ratings. for instance it's a c from an sd. the foreign rating is a c from an sd. but i would suggest to you any form of stabilization is potentially good news. so there you go. i'll read that flash again from dow jones. s&p upgrades greece. let's move on. jackie. >> those are some words i didn't think i with us going to hear any time in the near future. as you said, a little bit of good news iffer greece there. many n the meantime mark your calendar. shares could price on may 17 and start trading on the nasdaq on the 18th. reports say ceo mark zuckerberg

will be involved in a road show but won't attend all of it. other executives like cheryl sandburg will work on the bulk of it. it could be the largest silicon valley ipo ever. and a virginia state judge has dismissed a lawsuit against bank of new york mellon. the suit accused the bank of overcharging state pension funds on currency trades. the dismissal is a major victory for the company which is facing similar situations in other states. meantime broadcom's first quarter profits fell 61% on higher costs and weak margins. results still managed to beat forecasts. revenues were companied by the chip business. the second quarter numbers are roughly in line with analysts' expectations, taking a look at those shares 25% this year fell 2% in the after hours.

right now they're down 1.2% at 7.29. the adp april report is out at 8:15 eastern time. forecast calling for an increase of 175,000 private sector jobs. then at 10:00 a.m. we get march factory orders expected to drop 1.5%. still with us, of course, our guest host chris watling. chris, i want to get your take on the adp numbers, hoping to get a little bit of insight on what we're going to see on friday with the nonfarm payroll numbers. your thoughts. >> it's key. better than last month's softer than expected number. they haven't done that much in the last few weeks. it a's good pointer of where we may end up. on the one hand weak housing seems to be a little bit better. there's probably a little but more employment associated with that. but equally there's a sense that the -- certainly if you look at the economic surprise index, the data's surprising to the downside relative to expectations in the states at the moment so i think this is absolutely key. if it's a poor number today and

friday, i think the market's vulnerable anyway at the moment. so if you put in a poor payrolls number, i think we can see the market pull back. it's also key, of course, to what the fed does as they get to their june meeting when we see the operation twisted run out at the end of jeunune, whether we more stimulus. right now it doesn't look like we will but if we get weak data, it's possible. >> the unwinding of the problems in thougs report. one of the keys in europe to overcoming the sovereign crisis is the full unwinding of the housing bubble. way tomt do a compare and contrast if i may. some of the things regarding the house price data has been moderately drks -- i say moderately different. >> i think they're doing something very different. i think two big picture key things. firstly, they're picturing money to offset the deleveraging forces upon the economy.

and secondly they're doing more to sort out the mess and clear out the mess. there's greater acceptance that there was a bubble. there was a greater acceptance that they needed to clean out the system. we're seeing foreclosures which you're not seeing in europe at all. and if you look at the house price adjustment in the states, the bubble's fully unwound. and, in fact, you see here the u.s. house prices and inflation in adjusted terms. they're back below what i would regard as the long-term uptrend. there's a 45-year chart. in fact, if you look at a 100-year chart they're fully on the bubble from '87 to '05. whereas in europe in contrast, house prices remain significantly above trend. in fact, you know, if you look in spain, we have spain, back to trend. it's about a 48% fall in real terms. the uk's not much better. the italian house prices are above trend. french is high, although they're actually been moving higher again recently bizarrely. so i think europe has still got all sorts of problems.

and that -- that, i think, speaks to the heart of it. the price bubble in housing is deflated in the states, not in europe. and they're dealing with the problems in it. they're dealing with the indebtedness and working it through. >> really encouraging floee ini foreclosure figures. thanks very much. very interesting. for now we'll leave it there. jackie. >> coming up next on the show, with ee go ing to look ahead at the trading day on wall street as we gear up for earnings from media company like time warner and tom cast. make sure you stay with us. stay with us. [ male announcer ] this is genco services -- mcallen, texas. in here, heavy rental equipment in the middle of nowhere, is always headed somewhere. to give it a sense of direction, at&t created a mobile asset solution to protect and track everything.

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welcome back to the show. the april adp employment report

is out at 8:15 eastern. forecasts calling for an increase of 175,000 private sector jobs. then at 10:00 we're going to get march factory orders expected to drop 1.5%. fed governor dan tarullo speaking at 8:00 a.m. eastern time. richmond fed and philly feds both speak about the economy later in the afternoon. meantime, comcast speaks before the opening bell. also comcast, time warn, mastercard, baker gold and clorox. still with us, of course is. the dale. still with us t. dale and also chris watling.

chris, i want too get your take on the numbers an what they tell us on friday ahead of nonfarm payrolls. >> sure. those numbers are in line with what we were looking for, which, again, is showing modest improvement. one thing i think is something you want to take into account. we just had the warmest winter in over a hundred years which makes me concerned. did we start to borrow from some of our future job growth in earlier months this year. so i'm going to be watching very carefully about how those job numbers look in coming months and quarters to see if growth rates in those numbers are showing some concerns that relats to -- are we still keeping up or not. >> okay. even though we receive a strong earnings season here for the reports that we've gotten thus far, you said there may be a potential for some negative reports to come out in future quarters. what about some of the earnings that we're expecting today. any worries for you. >> not really. you know, again, i'm more of a

ma mackerel view. if earning are to the down side, i'm going to be looking at that. some above in certain sectors but the bottom line is we are at all-time earnings in earnings and profit margins and those are often the times where you start to see market tops start to build. >> t. dale, i'm looking at this. if the u.s. finally does have a debt reduction strategy post the election in november, do you think that is going to affect the other problem you mentioned which is the joblessness in the united states? >> absolutely. i mean when you look at what we're spending in the united states versus the what the government is spending you're talking 7% of our gdp right now. if the government is going to

start getting its house in order financially speaking and starting to reduce its annual deficit levels, never mind if they decide to try and reduce the absolute level of debt, that's going to be a major headwind to our gdp growth as government represents 25% of our gdp right now. >> all right. t. dale, we're going to leave it there. chief investment officer of security ball security ballew. of course that wraps it up for today's show. i'm jack can deangelis here in the united states. >> i'm not ross westgate. he'll hopefully be here tomorrow. we'll leave you with a sliev shot of the port's ka thee dal.

ja the dow closes at its highest mark. today's test, the adp employment report. slipping further in into decline. new signs that trouble now seems to be taking root among core members france and germany. plus the social offing facebook set to kick off its road show in what will likely be the largest silicon valley ipo ever. it's tuesday, may 2nd 20urks 12. "squawk box" begins right now.