hi, everybody. welcome. you're watching "worldwide exchange". >> i'm julie boorstin. >> central bank is delaying the audity of the country's bank being sector saying it needs more time. a ruling greek coalition could be formed today with reports the moderate democratic left party will join a broad coalition government. >> and the eu is expected to get its act together on the fiscal union within the next year or two. oracle jumps the gun and

releases results three days early. hi, everybody, good morning. welcome. you are indeed watching "worldwide exchange". we're very pleased to have you with us for the next two hours. what we've just heard is pretty important from the spanish authorities namely that they are delaying the findings of the audit report until september. they need more time. by looks of things markets coming off on the back of this particular news. we're higher by 0.3%. so we'll have to wait until september for that. we got a couple more weeks to go. the ftse 100 higher. the ibex 35.

remember when we spoke late last night it was down close to 3%, we're flat lining on the back of pretty big loss we saw in equity markets for spanish equity markets yesterday in particular. now, the bond be market still very much in focus. today it's all about a t bill auction. you would assume it's not good news for people to invest in spain if we look at this audit process being pushed out to september. the 10 year spanish yield at 7.1%. we've been holding on to that level in the past couple of sessions. since the greek election where it seems focus has shifted from greece to spain with regards to the market moves. so we'll continue to watch the sp spanish yields today. the italian yield above 6% still, 6.1% to be exact. let's show you the currencies, the euro/dollar rate.

the key there is really whether or not they will push ahead with some type of stimulus. there's also going to still be quite a bit of focus on germany in today's session as we have the publication of data and forward indicator could be important there as germany still is europe's largest economy and the most important one you could argue as well. let's talk a little bit more about spain and just recap what exactly is taking place. stefan joins us from madrid. stefan, we're hearing we won't know any details about the audit results of the spanish banks until september. >> reporter: we'll get the full report about this banking audit. it was the plan originally for the end of july. it's definitely not good news because the market was asking for more indications about this

bailout plan for the banking sector. that being said we're expecting an indication on thursday, in two days, about how much the banks would need independent auditors. these are preliminary conclusions about how much will be needed. we don't have confirmation. from what i understand from the bank of spain this is not concluded. what's been delayed is the report originally planned for the 15th of july. we have to wait until after summer to get the full report. the ecb and bank of spain took this together to get enough information about the banking sector. today we are focusing on the bond market. with this bond auction from the spanish treasury will issue 12 and 18 month bills.

for the last auction, at the last auction about a month ago spain was asked to pay 2.895% for 1 mobile. we're expecting the yield to raise sharply from that. until which level the question focuses on the ratio. the spanish banks so far have been the primary buyer for the spanish debt. well think continue to buy? so we'll have the results in 55 minutes. >> we'll be giving you those results fully here. thank you very much for that. let's just switch from europe to asia if you're just joining us now might be very useful four. in asia, we go singapore for that. >> reporter: good morning. well asian markets mostly traded to the down side as greek

election relief was replaced by g-20 indifference. in china, they lost slipping back below their one day moving average and hong kong ended flat. italian and spanish bond yields spooked investors and kept them away from taking big risks. the nikkei lost .7%. the kospi finished unchanged as investors were unmoved. australia the afx 200 retreated slightly, down .3%. central bank showed eurozone fears are still alive and kicking. a much better picture in india. .7% at the moment and after on that surprising pause from the rbi. >> given the news out of spain,

the full audit will be delayed until september. we're joined now by our guest host in the next hour, charlie morris. so, charlie is it time to buy europe? >> europe is cheap. if you look at the long term, the answer to that is yes. the value is there. >> wouldn't it have been yes all year more or less if you bought into it even at cheap levels a couple of months ago. >> not all of it is cheap. northern europe is not as cheap as southern europe. if you go for ten years you have one trade to do you wouldn't buy bunds when you have treasury. you look at southern europe and say there's value. >> how did you buy europe when we don't know how much money the spanish bank needs to recapitalize. >> the valuation speaks for itself. imagine a large forest fire. it recovers. how you look at it. there's a bullish line you can

put on these things. it doesn't matter how big the national disaster, it will grow back. the ten year view it will grow back. >> the attention is off of greece. now we're look at spain. i was speaking to someone last night who said i bet you anything that if yields go 7.5% ecb will be forced to step in and do something and if we see that you have to question whether the italian yields will start as well. >> i think long term, value is a different statement. thailand was in that situation in 1998. >> when you look back at the asian financial crisis they were able to adjust via their exchange rate. in this case these countries can't. >> the stock market, except in

the case of thailand you had things down. it's about the productivity, equalizing over time. as we look around the world the value is there. the stock market you have to divide it into three segments. the first is the global brands which show no signs of stress. second group is the sliliccals. it's quite cheap. the stock market will go worse from here it's the good stuff that needs to turn down. >> we'll have more in just little bit. >> on today's show, could greece get a new government today. we'll be crossing live to athens as the conservatives edge close enough to forming a coalition. >> we'll talk to the deputy head of spain's leading industry body about how the eurozone is

impacting spanish corporate. we'll have that interview live from madrid. >> we'll head out the singapore where we talk about how to assess the prospect for the indian rupee whether the yen is over valued. >> we'll be live on the floor of the frankfurt stock exchange. that's out in just about an hour's time. >> as per usual get in touch with us right here on the world, worldwide@cnbc.com. that's the e-mail address. i remembered it this time. >> tweet us at cnbc too. >> or find us. >> greek politicians look set to form a coalition government later today. up to a third of the new cabinet can be made of nonpolitical leaders. julia chatterley is in athens. how significant are these reports if greece can form a government this time around?

>> reporter: well i think all the positive how crucial it is for greece to form a coalition. it looks like we'll see at least a coalition between the new democracy and the pasok party. that's 162 out of 300 seats. they can do it alone. they might get the democratic party to join that coalition with an addition of 17 seats. it would be a broader coalition and better representation of the public vote. this is a leader or party who said to me in the last few weeks there can be no more austerity for the greek people. so consider pro bailout parties, there's things that need to be negotiated to form a coalition. what it comes down to is europe's willingness to keep greece in the eurozone and what it means for other countries like spain and italy. this is what i discussed with the former greek prime minister.

>> success for greece is a success for europe. failure for greece is failure for europe and we'll see the dominos fall. just think of it. the world is looking at what 2% of the gdp of the euro? elections in one country with 11 million people, could we be the problem of a new world recession? the problem is that we are a paradigm or a precedent or we're bringing out some difficulties of an architecture of the euro. that's what we have to focus as europeans, creating economic union, social union and democratic union also. >> a paradigm or a precedent for europe. that's the unanswered question. clearly this coalition needs to move quickly. they need to find away to find additional 11.5 half euros. we've heard various reports they will run out of cash by early

july. plenty of demands on all sides. the question is can they all meet in the middle? kelly, back to you. >> speaking of running out of time i want to bring you some comments that we're getting in here about the german constitutional court saying the government did not inform parliament sufficiently about the configuration of the european stab built mechanism. this is the permanent bail out fund that will replace the temporary bail out funding europe and meant to help fund these struggling governments. germany has to approve this, ever i eu member has to approve this but germany will be convening parliament i believe in early july so they have to do this before leaving. euro is trading lower. it seems the bottom line is simply this calls into question how quickly or easily their approval of it might be. >> you have to go back and reconfigure some of the underlying mechanisms.

but regardless of greece's new government going back to greece many investors are still worried that europe may be imploding. that's the question that cnbc lisa put to the executive chairman of templeton. >> if europe imposed in the sense of going towards a depression and of course europe does that u.s. will also because u.s. is very dependent upon europe, as you know, lots of the exports from the u.s. go to europe. the good news is that the percent of exports from emerging markets going to europe has been declining so they are less and less dependent, same thing for the u.s. but if there's a real depression or even a severe recession, everybody is affected, no question about that. >> do you think europe will survive? >> definitely. what we have is the game of

chicken where the greeks, for example, will say no we're not going to do this, we won reform. the other europeans will say europe will either reform or you're out. then they say okay i'll change my mind and let's negotiate. this will go on back and forth for a long time. because you got -- you must remember this is a basic change in the way these countries are governed because they have to agree on a fiscal responsibility program. and, therefore, adhere to certain principles which they have not been having to do before. so, it's a big, big change but i think they all go through it. they will make these reforms and europe will emerge much stronger than ever before. >> how much time that going to take? >> take one or two years. take about that long. you know, for all this process to go through. doesn't mean all the debts are paid off in one or two years. i'm saying the process will be

under way and the structure will be formed for a fiscal union. >> so although it's taken a couple of years. piecemeal. >> that's right. >> what have you seen that makes you think that yes they will get together in one or two years. >> it's beneficial for everybody. the euro has been an incredible boom to europe and the world. also it gives europe one single currency without all the expense and hassle of foreign exchange. so, you've got -- you know, the benefits have been just very, very great. >> all right. mark mobius liked emerging markets. charlie morris with us. are you also favorable with regards to emerging markets? >> some are more attractive than others. he takes on what's going on in

stride. he's seen these crises in these countries. i think we got a small position in china because it's cheap and because we think the stimulus activity will work to some extent. i think the risks to the down side are very low. we look elsewhere, other nations we're not convinced. russia is an alternative market. i think a lot of emerging markets do hang off of that. importers it could be good. >> in fact, we have a guest in the next little bit who argues that there's a strong correlation between commodities and emerging markets. you have to be bearish on both or bullish on both. >> it's about one. price relative of emerging markets is there. so, you know, i think that the brics after the last ten years

you expect something between them. so we have a small position in china. >> india, a lot of people saying india doesn't deserve to be in the brics any longer because their reform progress hasn't headed the same way the other brics have and back there on taxes and things like that. should india come out of -- >> i think when jim o'neal coined the phrase it was about populations and surface area. unless you can come along with a country, it's very difficult to replace it. india has a declining currency because it has a current account deficit. >> charlie, you're with us for the rest of the hour. very good thing indeed. i want to bring you up to date with what's coming through the wires. reuters saying s&p is reporting they expect 2012 european corporate defaults that they could double if the recession is deeper than forecast. they are looking at company defaults to rise in 2012.

that will be quite drastic if you see corporate defaults double. >> some markets are pricing that in but we'll see to what extent. microsoft unveiling its latest offering, the surface tablet. but is it a case of too little too late. in the meantime join the conversation and let us know what you think. earn mail us at worldwide@cnbc.com. >> people have already tweeted us. fix your wire. >> i have a wardrobe consultant. >> coming up does beijing need to think beyond monetary measures. our next guest will be sharing thinks ideas in just a couple of moments. s. [ male announcer ] this is genco services --

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welcome back to the program. china's central bank and commercial institutions took in almost $3.7 billion last month. it's triggered by beijing's monetary policies. the first five months the year still sharply lower from last year. analysts say this could property

the ecb to drop the reserve ratio. >> our next guest says beijing should push ahead with fiscal stimulus. why is that a solution? why is fiscal stimulus a path in which they should go down? >> well, they can't go down the path of least monetary policy. they tried that in 2008/2009. they have a headache now. there's concern about nonfalling lines. there's a limit from that perspective on how much they can do monetary policy. and also, i think, china is adjusting to a slower growth environment. i think there's probably weak demand for credit in china at this point and the bank themselves are unwilling to lend. if you do sharply cut the triple arm or cut the interest rate further it's not is going stimulate demand that much. on the other hand on the fiscal side, now, budget deficit for this year is looking like 1.5% of gdp, debt is very low.

from that perspective it's good for fiscal stimulus. >> it sounds like the g-20 would love to have china bail them out. europe would like to have a strong china. as you say credit demand is weak. are we pushing on a string? >> sorry, with regards to -- >> china. >> didn't quite catch that. as i said -- china has significant cuts to boost the economy through fiscal stimulus. with regard to the debt crisis they are not going to engage directly with the sector supporting european bond markets or anything of that nature. they will sit back and watch the europeans hopefully get their act together.

>> yeah. we talk about kind of where the hot money is going if people don't want to be invested in europe and they think the euro/dollar is too risky. the yen sees value. i know you think the debt levels of japan are also unsustainable and you wouldn't advise people to put money in japan. >> the yen is a strong currency. the government has been able to make steps towards raising the consumption tax in japan, a key development over the past week. looks like hopefully it will pass with the opposition and incumbent party and double the consumption tax. but with public debt at 220% of gdp or something of that magnitude, you know, you would be concerned, you know, you still have concerns placing your funds.

if you're concerned about debt elsewhere japan is not the first country that comes to mind when you want to park your money as a safe haven. >> wouldn't you say that japan is inherently one of the richest countries in the world. they have a large debt but a maul government. their ability to raise taxes is there that's not there for other countries. the japanese economy offers something different. there's some merit to that? >> well, yeah. as i said, the consumption tax is a welcome development but you'll be concerned, normal concern in these times is that the consumption tax will choke the recovery than what we're seeing more recently. the currency is very extensive. i'm not saying that you'll see a crash in the yen, but it's not a place to put your money. >> thanks. sorry for jumping in on you there. we want to bring our viewers

breaking cpi data which we'll have just after the break. stay tuned.  hi, everybod.

welcome back to the program. spain's central bank delaying the second stage of the banking

sector audit until september saying it needs more time to gather information. >> at that ruling greek coalition could be formed today with reports the modern democratic party will join a cross party movement. >> and mobius expects the eu to get its act together. >> oracle delivers results three days early. welcome back. you are watching "worldwide exchange". i was watching the cpi data. minus 0.14% on the month plus 2.8% on the year. this is the lowest year increase since 9.1% in may of 20 oat. may cpi since records began in 1996. we were anticipating a cpi

record of 73% level. anything weaker than this it was expected we would see a drop. that is happening. dollar lower by a quarter of a percentage point. 1.5631. cpi forecast 2.2% on the year. uk may cpi was plus on the year as well. but by and large it does look slightly weaker than what was anticipated. let's talk a little bit more about this. joining us now is alan clark. hi, alan. so, again, it looks a little bit weaker than anticipated. may cpi falling short of expectations. does it surprise you or was this what you -- >> it does. second consecutive month we had a downward surprise. last month we were surprise because tobacco should have gone more because of the tax hike. it will be delayed for this month. but to get a 2.8, we're

surprised. half a percent below where the bank thought it would be. first quarter for many months, had such an undershoot in the bank's forecast. >> what about the bank of england and the stimulus as well? >> it will cause more speculation. gdp, that's disappointing activity. surely disappointing. whether more qe will work or whether it's need in addition to the extra measures is more debatable. >> it's still friendly and there's been this raging debate in the uk as to whether people are fundamental lui misinterpreting what's happening with the economy. it would suggest that, in fact, this inflation concern isn't necessarily an ingrained one and perhaps the bank of england should have been more stimulative. >> it's a sigh of relief at long

last we're back within that one percentage point margin. a lot of the downward pressure in inflation is getting exhausted. so it's harder to get down to the 3% target let alone undershoot it. >> do you agree? >> that's the point. the short term the cpi is irrelevant. the long term expectations in the market is what matters. the break even rate around the world, whenever they've gone low that triggered stimulus more than anything else and right now those numbers are low. >> there has been a falling uk where they may change their methodology because we have the close component in the cpi -- >> but they have been falling every where. >> nowhere has a 10% gap.

so you're showing two. i don't think it will get away. that will depress expectations. >> i think we'll be looking quite closely at the minutes tomorrow. have to see what they say on those. >> absolutely. they had the cpi numbers. what we see tomorrow we'll have to take what's happened since. >> alan, thank you very much. alan clark, economist. let's recap for you what european markets are doing at the moment. maybe you're just waking up. this is what we're seeing. ftse and dax a little bit higher. cac and ibex a little bit sluggish. >> let's look at bonds. 10 year german bund is up. spain a little bit of relief, 7.15. italy moving higher, 6.09. gilt is benefiting.

we should mention given that weaker inflation data sterling has fallen to a session low. >> besides that to look at those rates the sterling reaction coming on the back of this data relatively flat trade. euro/dollar 1.2583. >> that's the question. as soon as it climbs to 1.25, 1.27 range this could be a short. here's some of the other top stories we're following this morning. the fed begins a two day policy meeting today with their decision expected tomorrow at 12:30 p.m. eastern, following ben bernanke's press conference. many economists believe fed will be compelled by europe's debt crisis to announce a signal of an easing program. the best move is to extend their current bond buying program called operation twist.

cnbc's full coverage of the fed decision will begin tomorrow at 12:30 eastern. jamie dimon back on the capitol hill as there's a hearing on the bank's trading loss. that will begin at 9:30 a.m. eastern time. dimon is on the second panel in the afternoon. in the first panel the u.s. regulators will be heard from. and mary shapiro will sketch out a road map leading to jpmorgan's losses. as jpmorgan shares are trading in frankfurt lower by 2.25% but given pressure on stocks across the region. maybe that isn't too much of a surprise. >> yeah. kelly, the mystery is now solved. microsoft unveiled its own line of tablets called surface in los angeles last night. there are two versions, a lighter one that's like the ipad

and a heavier device known as ultrabooks. both come with a detachable keyboard and kick stand. set it up on a table top and type away. no pricing has been given but windows 8 goes on sale this fall. microsoft is flat in german trade higher this year by 20%. oracle surprises investors by reporting its fourth quarter results three days early. that may have been prompted by reports that a top executive was leaving and that would confirm north american sales keith block is resigning. he was critical, one of the key people of oracle's hardware business. and mark herd in instant messages that became public. as for the earnings profits rose by 8% topping forecasts and/oracle expect software sales to be from to up by 10%. oracle higher by 5%.

>> j.c. penney marketing chief is leaving the company, months after he was hired away from target. it comes months after j.c. penney reported a first quarter loss. he was responsible for implementing the store's every day pricing strategy. that backfired with consumers. j.c. penney said it would introduce more aggressive sales. their shares were down 6% in after hours trading. >> well, you can find us at worldwide@cnbc.com. it's right there. use it. find us on twitter. julie boorstin -- >> or kelly evans. >> charlie doesn't have twitter but we're trying to get him on it. >> i tried it. >> do you follow people? >> i follow people. >> you don't tweet? >> i get spammed so there was a lot of stuff coming out, getting

free i.t. services for my account. >> i'm shocked by how much you're here on twitter before you are here on anywhere else. >> modern day rumor mill. >> a quick look on what's the agenda. in asia exports in japan will come out with all-important trade figures for may. that's before 2:00 p.m. central european time and also be watching out for the impact of a rising yen. thailand reports may trade mayors while india, malaysia release may consumer price index. >> gold continues to rise as investors, further stimulus from the federal reserve. we'll be talking about gold. what's your opinion. will you be investing commodities? let us know.

federal reser hi. welcome back, everybody. still watching "worldwide exchange". spain has sold 3.04 billion euros in t bills. what we're looking at here is 2.4 billion in 12 month treasury bills. maximum yield 5.2% versus just over 3% that we saw back in may. very healthy cover ratio on the 1 month t bills, 2.16 is the cover ratio. again versus around 1.4 we saw back in may.

18 month t bill covered ratio 4.4, a lot higher than what we saw back in may and here we're looking at an 18 month t bill amount of 639 million and just looking for the maximum yield on that. >> 5.3% versus 5.4 on may 14th. >> very high. >> more than two percentage points in just over a month's time. >> charlie, what do you make of results like this? >> it's well covered. and only a few years ago you would have considered these prices to be cheap. >> yes. >> i just wonder if spain has to pay that much to pay for 1 months. it's not necessarily -- it's going to need funding at a lower rate from one of these stability funds as soon as possible. >> one hopes they will get it. >> what stand in the way of that, do you think? >> what's in the way of that?

politicians. politicians need to discuss matters and come to an agreement and i think that's under way. >> our next guest is saying covered bonds now are gaining in popularity as a way for investors to gain exposure to debt issuance with less risk. before we talk about covered bonds, a comment from tim lord on auction results such as what we're seeing out of spain. >> i would reiterate it's good to see something was done. but at the same time i think the anxiety level still seems to be pretty high around government debt which is why we see in covered bonds increasing demand because covered bonds have been around since 1769 without a payment problem and we've even had cases where covered bonds have paid where the sovereign defaulted. in spain the first covered bond came out in 1869 and three years later in 1872 spain defaulted but people who invested in the spanish covered bond got their

money back in full and on time with interest. >> when we're talking about covered bonds what are they covered by? >> excuse me? >> what are they typically covered by >> there are two types. the mortgage backed bonds which are residential mortgages. then the public sector type which is backed by public sector loans. >> those are the older forms. so when we talked about spain a couple hundred years ago -- >> those were covered by mortgages. >> no kidding? >> that's right. this has been around for a long time. >> you are safer now? >> what's happening and what we see in the market and just staying on the topic of spain, for example what we saw in the covered bond market when the announcement came of 100 billion euros to recapitalize the spanish banks we saw a lot of activity from investors buying spanish covered bonds in the second year market.

i think there's just a general trend among investors to go to this ultrasafe side of the fixed income asset class because of the rules that surround issuie ing covered bonds. >> that may being a great but it doesn't say a lot about investor confidence around the world. if more and more lending issuance is secure, people are less and less willing across all types of assets classes to lend money to one another without that collateral. >> that's a big issue. see, again, investors do a lot of homework before they buy and one thing that they do look at is for example, for banks, is doing most of its funding with covered bonds and not doing funding on an unsecured basis. as an investor they would tend to feel more uncomfortable with that name. in covered bonds we have over 10 different issuers from different countries so you can pick and choose. it's a big issue with a lot of

investors and monitored very closely. >> what's the difference between covered bond and asset backed security. >> i can go on for hours. the main issues are, first of arlington usually governed by legislation. so there are very strict rules what can and can't go into a covered bond and more importantly for investors if you buy an asset backed security or traditional one the assets that go into them in the beginning stay. in a covered bond if an asset deteriorates under the rule it has to go out of the covered pool and be replaced by something that's performing. >> you have to acknowledge the aaa status of covered bonds has come in to doubt in this day and age. >> on that point many people think about spain, for example. you're talking about spanish covered bonds and people assume because of the spanish housing market is pretty rough at the moment. how does it work then if you're looking at a covered bond market? >> let's look at two things on this issue.

first of all in spain to point out is that some of these covered bonds from spain are heavily over collateralized. so you need to have a widespread deterioration in, you know property prices throughout spain before you even start getting to a level where people might be concerned. the other thing too about downgrades it's hard to completely divorce the covered bond from the unsecured rating. one thing that's very interesting in iceland you had a total meltdown of the banking system which toledo a total nationalization of the banking system, the government stopped payments on bank debt but the only debt that was repaid during this period in iceland was a two covered bond issues. so even though they had gotten downgraded still the investors got paid back in full and on time with interest. >> where is the most value at the moment in the covered bond market? >> depends on your risk

appetite. for those that want to be ultra safe in the asset class, we tend to say look at strong banks with strong businesses, also from countries with good balance sheets. we've seen a lot of activity focused in on countries in the nordic region like norway or germany. however, for those that feel comfortable about the asset class you can do some cherry pick being by looking at different banks. there's a lot of opportunities, even some of the banks in spain i find triangular couple that have not borrowed any money at all. >> thank you very much for coming in and visiting with us. let's take a look at how commodities are trading here at this morning's session. you're seeing both nymex and brent trading off. spot gold a little bit hire 1629 and copper is just a little bit lower too. speaking of commodities we asked mark mobius if he thought that

investors should be buying gold now. >> i do. i continue to buy gold as well as platinum. i buy my own shares as well. these are the biggest. people should have some gold, yes. >> for more on this, charlie morris is still with us. so, gold, charlie, do you like it? >> love it. i've owned gold for a very long time. nothing has changed. with commodities it's not quite so clear but the case is a good one. it's interesting to say that in the last decade or so investment in gold is up five times. you got a stock price and can achieve that. the commodity index is up. basket of commodities total return has really doubled. >> what happened to gold this year? >> gold is up marginally. sneeps in the first quarter maybe moving into the second one where there's talk from stimulus. we don't see that big reaction.

>> gold was too good to be true last august and 1920 and there's a cooling phase. it's happened twice and lasts between 14 and 18 months. >> which is, in your view -- >> i think we have great expectations from this metal, and continues to do so. >> $5,000 enough? >> in real terms, seriously, that question is very important. how will gold do the next thing. one way is the dollar goes down. that's easy. unlikely because everything faces the same problems. another one that makes real returns, i think that's unlikely as well. you get $5,000 or big numbers is because we generally get a step up in inflation because of the loss of money, picks up at some point and printed. >> i hear what you're saying and we hear the argument. we haven't seen it.

>> you are. if you are in venezuela then you have seen that. that's been the case. when gold fell in the '80s and '90s in dollar terms, countries had hyper inflation. gold made sense as part of your portfolio during those times as did land, as did foreign shares and so forth. it's part of the basket. >> i would have anticipated that during this time when equity markets were falling substantially in the first quarter and we saw this big fear movement every where, we would have seen more of a bump in gold. >> when there's hope there should be fear. i think people were looking to gold for the solution whether it was in the natural corrective phase. it's had some problems this year but had some problems last summer. during that first-round gold was a safe haven. >> still a question on commodities, but the broader

spectr spectrum, food inflation. >> i can see how the index might bounce but we're in a commodities bear market for the past year and doesn't look like it's finished to be. there's a bit more to go. i don't think it's right to put those position on. plenty of other things will go up first. it's wrong to say commodities are crowded but certainly not -- certainly not cleansed from speculative money. there's quite a lot of investors who shouldn't be there. >> can't blame them because nobody wants to be in stocks any more. >> they came in five or six years ago. they didn't come in recently. >> charlie morris, thank you for joining us. >> thank you. >> spain's central bank says the second stage of the country's banking audit has been delayed

until september in toward gather more information this as the spanish prime minister says there needs a clean break. he told the g-20 panel in mexico said it's been damaging for madrid. it's in talks with bank of america to buy the nonmerrill management. baer could pay up to $1 billion for the unit. >> defending european champion spain left it late to win group c against the battling croatia. croatia stretched the spanish side all over midfield and unlucky not capitalize in the

second half. but hopes were dashed when there were substitute hits which set up a quarter final with the runners up in group d to be decided tonight. i love doing sports. italy also, they progressed to the last eight after 2-0 defeat, already eliminated ireland. the italians are in front. ireland failed to score the equalizer which would have knocked the italians out at the group stage. and the score was settled in the final minutes. do you follow football, charlie? a little bit. >> i could have done that. >> yeah. all right. obviously watching every single minute of it, kelly. >> you did all right with those

pronunciations. we asked our viewers of is it a case of too little too late. is it something you buy. one viewer said microsoft's tablet isn't too late if it's not too little in terms of functionality. price point has to be less than the ipad. another says my sources say surface c for development so it's a flop. as usual, microsoft fails to grasp proprietary control. >> and coming up we're live in madrid for the very latest on that delayed bank audit in spain. stay with us. i.

welcome back to the program. if you're just joining us i'm kelly evans. >> these are the headlines. >> spain auctions 3 billion euros of short term paper. >> greece is edging towards a coalition government. politicians working on the finer details as the democratic left is saying that there's still some differences to iron out. >> oracle jumps the gun and delivers a strong set of results

three days early in order to calm fears amid the departure of a key executive. hello, everybody. welcome back. you are watching "worldwide exchange". we're sitting tight looking at data. zw institute telling us june german economic sentiment is down minus 16.9 points versus 10.8 we saw in may. we were anticipating a level of four. so that is quite a bit worse than anticipated, current conditions 33.2 points versus 44.1 in may. again, quite a bit lower than what was expected. we were looking for a figure somewhere in the region of 40. let's go to frankfurt for a closer look. i gave the headline reading.

still coming through on the wires. but net-net, this doesn't look good if europe's largest economy also continues to slow down. >> reporter: yes it has started to slow down. so we see them coming off of fairly high levels and cpi from last month also did not help. what we're seeing is the euro is taking a bit of a dive falling to 1.2580 on the worsening situation as far as the investors are concerned, zew is saying worsening in security over greek election is likely to have contributed to this very sharp drop and the numbers are really very much below expectation when it comes to headline numbers but the current conditions which have been holding up for a couple of

months when the overall index was going down. but the german environment seemed to held up quite substantially. but the zew has worsened and trading partners are very clear and as i just said the euro dropping on the back of that one. so all in all the picture that we are seeing is no, of course. even the german economy, even after substantial restructuring reforms over the last ten years, no wage inflation, good employment numbers, 20 year high we're seeing also the leading indicator are starting to come off. so i think the resolution hopefully as a circuit breaker perhaps at the eu summit at the end of the month will do some good. >> i want to show you what happened behind me. as soon as that zew confidence

data hit, the nasdaq ported down four. we're still in the green. nasdaq and s&p marginally higher. that confidence data clearly having a negative impact. ftse cnbc global 300, take a quick look. we were up much higher during earlier in the trading session now just barely in the green. looking across european markets be interesting to see how this shakes out. ftse 100 is up three quarters of a percent. the dax is holding up. up about .2% there. we'll go right here to the german bund 1.457% sinking after the data. spain is higher. italy is higher. ten year gilt 1.66%. let's get more on this from tracey chang. how are markets doing overseas? >> reporter: good morning. asian markets mostly traded to

the down side as greek election relief was replaced by g-20 indifference and more spanish debt headaches. hong kong shares ended flat pulling away from one month high closing higher hit yesterday. italian spanish bond yields spooked investors and kept them away from taking on risks. nikkei finished lower retreating on tuesday from a one month high hit on monday. the kospi finished unchanged. and in australia, down .3%. and europe's fears are very alive and kicking. a much better picture in india with the sensex trading on the up. back to you. >> again, welcome back to the

program this morning. louisa is sitting in for ross. also joining us on set is the global chief investment officer at citi private bank. what is your take on the german zew. super sharp contraction. they say it has a lot to do with what's going on in spain. >> so europe has some problems, right? you need to be very careful about zew. it's a volatile index. it's not good as a predictor. it rings up a bunch of people like me and see how they are feeling. they are far more, when you look at the zew those that are participating in financial

markets it's basically -- it tracks quite closely. >> this is what we do. we ring up a lot of people like you guys and ask how are you feeling and you tell us. you tell us how you're feeling in the market. same story. confidence is waning. >> confident is waning. it's volatile because it will be correlated with what's happening in the stock market. >> two reasons why we're not seeing a sharper increase in the stock market. confident is weak. second is look if confidence is weak, going to make it easier for the ecb to act. >> that's true. people are more interested in what is being said than the zempb -- zew.

so look at far more closely. >> richard, what are your thoughts? coming in to this weekly we have a greek elections. we know now that probably some type of a pro bailout coalition will be formed probably, a lot of people are crossing their fingers on that one. worry is moving to spain. sorry whispering italy. how are you reading europe at the moment? >> it's a mess. and different meetings, we have not come up with a solution because the solution really involves some sort of fatalism. that's the sticking point. so, really not very much has changed. the greek election results could have been a lot worse. but in a sense that really just postpones things because as things stand greece can't afford to do what it's being asked, even if hit the will, greece is

in a depression and it's doing very, very badly and that, of course, is not just a greek problem it's a spanish problem, increasingly a problem for other countries. so austerity has bitten very, very hard and it doesn't seem to me that really you got a solution yet. now it will be interesting to see what happens at the end of the month. i suspect it will come up with some more banking union type proposals, how detailed those are is a different question. >> if the solution is some form of federalism that could be five, ten years away. what can an investor do in the meantime? >> there's your problem which is of course why european equities have been so weak. now the good thing about all of that is of course they are phenomenally cheap. i could have said that six months ago. >> right. >> so, your question is how much do you want to be paid for those sorts of risks. the question is if you look at the multiples, do you want to be

in something that's very cheap or something like the u.s. is expensive. >> speaking of the u.s., the fed will begin a two day policy meeting today with a decision expected tomorrow at 12:30 eastern fold by ben bernanke's press conference at 2:15. it will announce a signal of a new easing program. many think fed's policy is to extend operation twist. just glancing at our wires we had the spanish auction, a very healthy bid to cover ray show, higher yields. greece now selling 1.3 billion euros in 13 week t bills as well. uniform yield of 14.31 versus 35 we saw back in may. and it includes 30% noncompetitive charge as well. i think many people, again,

baking everything into greece that needs to be baked in. richard, with regards to -- we were talking about federalism and whether we should be moving towards this in europe. i'm still thinking ecbism and whether or not the ecb will be forced to or want to step in because yields are so high in spain and yields creeping higher in italy too. >> with very much doubt. unless it's a prelude to, you know, more cooperation. so they've not done it for a long time now. i think they will be very disinclined to reactivate that for the moment. no i don't think they will be in there. not say they won't come up with another one. there's other things they want to do. we think they will cut rates from the present level, 1% may not sound much. it isn't much. in relevant terms it's quite a

lot. the ecb is running a tight monetary policy. so, what you really need is a lower euro. and that seems to be almost no good reason for them not to cut rates. >> why is the euro holding up? 125 at the moment. >> so we know that the world and the dog is short underweight jours and when everyone leaves the one side of the ship it does the opposite. don't forget there's not a lot of european banks in order to replenish capital selling overseas assets and bringing it back. that's a big contributing factor. as i said you got the situation where relative interest rates and monetary policy take into account like qe is tighter in the eurozone than elsewhere. >> i just wonder, we talk about

what can be done and to me it doesn't seem like 25 basis point cut necessarily would do a lot. >> very, very little. but at least provide some sort of signal and at least reduces that interest rate differential. >> let's get a check now, we'll have more from richard in a little bit. let's take a look at today's other top stories. president obama and russian president vladimir putin called for an end to violence in syria. the two leaders metaphor the first time in three years. >> also about whether or not more sanctions need to be imposed and that's one of the things that they are at logger heads at. you could argue you really don't want to go down the rouft imposing huge sanctions if it end up hurting the majority of the civil population, the innocent people and especially after it's been done in the past with iraq as well.

accusations that europe's turmoil is responsible for a global slow down has prompted a backlash saying european policy leaders didn't need lessons on how to run their economy. he's saying don't point the finger at us, we're pointing the finger back authentic. subprime caused europe's problems, taking a shot. >> weak in the u.s. as well. >> the u.s. has it's own problems. we tend to concentrate europe because it's such a mess. but the fact is that the u.s. itself is in a japan like situation. private-sector -- >> ultimately that's what germany was doing. that's why interest rates were too low. i digress. the italian notebook maker is planning to list on the milan stock exchange. they were favored by vincent van

gogh and ernest hemingway and plan to file papers in september. >> i love when it they have that elastic on. you write something and put the elastic on. >> the little snap. >> i got a whole ton of them. >> i have a bunch with one or two pages used. >> burn my diaries. >> uncertainty continues to surround around egypt's first presidential election claiming victory. the muslim brotherhood said it would convene parliament later on today. >> another story given everything that's happening around the world, important for stability in egypt and across the middle east. >> headlines today let's get a quick check. yields soaring as spain auctions 3 billion euros of short term paper. >> greece edging towards a coalition government. >> will the fed twist again as

it starts its two day meeting. we'll have all of these stories and more. stay with us. ♪ but they can also hold you back. unless you ask, "what's next?" introducing the all-new rx f sport.

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hi, everybody. welcome back. you're watching "worldwide exchange". >> spain has been forced to pay the highest yield on its 12 month note since the launch of

the euro. demand proves strong for the auk show, up 3 billion euros of 12 and 18 month t bills despite continuing anxiety over the country's public finances. stefan, pretty healthy auction "all things considered"? >> reporter: we can say that the yields hit nearly a record high this morning for the auction, 12 and 18 month bills for the 12 months, the average yield was at 5.704% up from a month ago. for the 18 month paper the average yield was at 5.107% up from 3.3% a month ago so the yields are sharply higher. a level which will become unbearable for the spanish government. this raises the question of how much time until the spanish government will have some international support.

yesterday already there were some rumors here in madrid the spanish government could request some international support when the ten year, yield on the ten year paper at 7.28% is widely considered as a limit for a government from which the debt burden becomes unbearable, also the level which triggered up the international for greece, ireland and market speculation on spain. regarding this auction, the bid to cover ratio was higher than the last time. it was a 2.4 for the 12 mobile and 4.4 for the 18 mobile. who is buying spanish debt. i got a question from a viewer on twitter. obviously the spanish national bank. the domestic banks in spain are the primary buyers of sovereign debt. >> thank you very much. greek politicians are set to

ko form a coalition government today. for more do we have our athens reporter? we'll get to julia as soon as we can. richard, greece is forming a coalition government. is it because of the yields? >> the spanish, the coalition story? >> the coalition government. not hugely. i suspect that they will form a coalition government. may even last longer than people think but it still begs the question of whether they can do that they need to do. they need more flexibility and timing from the rest of the eu but not very much and the conditionality will be very hard. so, you know, i don't really think that that solves your problem.

doesn't solve anything in spain. >> you put out this fantastic research all 249,000 billion pages it. >> splendid stuff. you're lucky to read it. >> i know i'm a very lucky woman. sum rise what you're overweight and what you're underweight at the moment. >> sure we're underweight stocks. not maximum but getting there. overweight as we have been since time immemorial, particularly u.s. investment grade credit. and because we don't think call will rise and the spread is still very high in percentage term. we're underweight emerging market equities and not the least china which we think has lost of problems. we're a little bit underweight in euro and equities but more underweight in u.s. equities. so european is staggeringly cheap even if you strip out

financials and everybody has been going into the u.s. because that is seen as a safe haven. the trouble with that argument the bond and currency but if you push up u.s. valuations to the extent they have been, you're not going get the safety because your implied return will be much lower. >> there's a string of read thread to what you're saying called debt. >> absolutely there is. we still like debt. yields have fallen a lot. but that's exactly what you would expect to have seen in that japan situation that afflicts most of the developed world more so than the eurozone because of the single currency and because you have the public sector. still very much, in fixed income or fixed income like stocks. cyclicals is part of the same story. >> we got to go because we have a date with the break. >> groupon will be sitting down

with shareholders and investors have been unable to get a deal on this stock which is down 50% from it's ipo price can the company get beyond it's accounting symbol and prove it's still a great site. we'll preview that meeting after this. 

s. shares of s. shares of groupon got a big

boost monday jumping more than 10% after morgan stanley analyst upgraded the company saying the daily deal stock has improved market share. the stock is more attractive. the company holds its annual shareholder meeting today so for more we have max wolf on the line. so, max is this the time to buy groupon? >> i think it certainly is more appealing here than it was at 20 or 26. we're getting to a point of fair value for groupon. we think it was a bit oversold when it was down under $9. it's now in the $11 range. it's fully valued in the $11 to $12 range. i wouldn't go gang busters but there's reason to believe they can continue to cutback on their customer acquisition costs and grow revenue. whether or not that puts them on a track to meaningful and profitability remains a gigantic

question mark. >> what do you expect to be the main focal-foot? >> people will be intens to see if they can lower their customer acquisition cost without seeing the revenue fall off and what people are excited about is their newer programs, groupon rewards program that tries to solve one of their main problems. take a user who buy as single groupon and make them into a loyal repeat customer for the merchant, something they haven't been terribly good at and that's alienated a significant number of merchants in going back to groupon. they are looking to extend at mobile. some trouble for zynga and facebook some colleagues in the space have suffered the transition. they have been able to stay front and center in the move no bill. >> eve seen groupon losing 6

billion, $5 policy 8 billion in market value since the ipo. what they need to sort out is whether they can manage to finally target their deal offer. do you see a turn over in their technology systems. are they getting that on track? >> certainly is a major improvement from their early phase. they've done a pivot which is common in the earlier stage. after a highly unsuccessful ipo which means lots of scrutiny, lots of naysayers. that being said, they are going from a dumb system, really a web 1.0 e-mail list and moving towards groupon now product aware, rewards products, trying to become sort of targeted. they are not there yet but they have made meaningful strides in that direction. people will continue to watch that. the other reason that that's important there are low barriers to entry in their space.

if they don't mast ear technology there's no reason to believe that groupon can remain dominant in this space especially with google and amazon as competitors. >> max wolff thanks for your time this morning. as we head to break let's take a quick look at how futures were positioned in the u.s. they were lower but we've made up some of those gains. we'll see if we can hang on and we'll be right back. optionsxpress, where you can trade your favorite products,

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welcome welcome to "worldwide exchange". if you're just tuning in i'm kelly evans. >> these are your headlines. >> spain auctioned 3 billion euros of short term paper as the country's central bank delays the second stage of a banking sector audit. >> greece going towards a coalition government. the democratic left say there's a few issues to iron out. >> oracle releases earnings three days early ahead of the departure of a key executive. >> all right. hello to our u.s. viewers who

may be waking up. let's take a look at what's happening up this morning. we have green in terms of u.s. futures. dow is up 30 points, nasdaq higher by about eight, s&p 500 up a couple as well. we were in the red briefly earlier after the german confidence zew confidence came out, minus 17 versus expectations for plus four that hit stocks immediately but we've seen some relief since then. across europe, ftse 100 up. dax is up. cac super. and spain back in the green up 1.23%. >> so the question as always is how do you make money in these markets? this is what some of the experts have been telling us this morning. >> you could perhaps trade the bailout bill such as we're doing, long one year.

it simply is best on higher long and swap yields. >> closing lows, we closed just above that yesterday. below that we have 81.20. we had three baskets of that in the last week, three days running. that's very key support. >> europe is cheap. if you look at the long term, the value is there. really constant where you can say the value is there. well, bank of america is in a deal to buy the wealth

management. baer manages assets worth around $90 million. >> jamie dimon back on capitol hill as a hearing is held on the bank's trading loss. dimon is on the second panel in the afternoon. first the bank's u.s. regulators, mary shapiro will sketch out a regulatory road map leading to jpmorgan's loss but stop short of any specifics. jpmorgan shares trading in frankfurt are down about 2.25%. let's get more with our guest host. richard, let's talk briefly about bank regulation for a second here. we've seen people trying to point to weakness across the globe for regulators not to push forward. is that a mistake? >> it's difficult question because if you tighten

regulation, in other words, if you tighten capital standards in particular that acts as a very procyclical force. it's exacerbates it weakness that's there because banks are less willing to len. >> but if you wait too long -- >> that's right. if you go back to japan in the 1990s should they have done more earlier to boost the regulation of the japanese banks. if you think you'll be in that position for a very long time you need to do it. but then it's a question of how quickly you introduce those changes, there's capital changes. there are probably good reasons for delaying that but whether they can do that is a different question. >> coming back to the spanish audit process that's taking place now how important is that for you that that gets done and there's a number on the table that you believe and that we

bring the bad debt that spain is dealing with. is that something that's detrimental to the rest of europe? >> having some decent numbers certainly helps. you can say that. but there's a dynamic at work here because the spanish economy is deteriorating the whole time. we have the whole problem about mortgage debt. yes, it's good to have a number but, of course, if the economy is deteriorating so are the banks. and, frankly, it's probably only a matter of time before spain is forced to seek a proper bailout from the troika. i'm not sure it makes that much difference to the position of spain over the next few months and therefore what happens in the eurozone. >> speaking of bailouts we're getting some news here on the wires. eu official is being quoted by dow jones stating there needs be a discussion on the greek bailout terms.

finance minister discuss the terms of the greek deal this week. strong preference for the esm to be used the spanish banks. a german constitutional court is upholding a lawsuit against the esm as well. finance ministers discuss financial challenges on thursday. and they talk about how they anticipate to sign a revised plan with greece this summer, a new mou. >> what's interesting too with regard to this, this same official is saying spain's formal application is after the bank audit. we're in this question of what is the timeline, how quickly can they go for aid and to richard's point how much do we believe about the levels they are asking for. >> spain has been forced to pay the highest yield. demand proved strong for auction of 3 billion jours of 12 and 18

month t bills. we're joined by the representative of spanish business community. how would you characterize the situation that spain is in at the moment. do you think that there's a new term solution at hand to essentially help the spanish banks and bring forward some of the issues? >> you know the situation could be defined as delicate. so we have to do whatever we can to separate. i think steps taken by the spanish banks and european union are going in the right direction. the big question now is if we

have time, steps will be taken soon enough and how to develop the whole procedure. in order to provide funds for the spanish banks. >> what reforms would spain's business banks like to see? >> sorry? >> no problem. what would spain's business community like to see in order to boost the country's vitality. >> the reform has already begun. the economic policy is going in the right direction. we're increasing labor reform. the question is that we have to go farther. we have to have outperformance in the energy sector. we have to change completely the public administration.

we have to make improvements in the education system and at the same time we need some help from the european union. efforts are not enough, and what we need is a clear stop to create a new monetary union much more sustainable than what we have now. >> albert jobs are you related to rafael nadal? >> i'm sorry? >> i was joking. i assume the answer is no. thank you for joining from us the madrid stock exchange. >> you never know. maybe it's a long lost uncle or brother. >> is microsoft simply scratching the surface of the global tablet market. we'll take a look at what the new device has to offer in a second. . [ mechanical humming ]

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mcallen, texas. in here, heavy rental equipment in the middle of nowhere, is always headed somewhere. to give it a sense of direction, at&t created a mobile asset solution to protect and track everything. so every piece of equipment knows where it is, how it's doing or where it goes next. ♪ this is the bell on the cat. [ male announcer ] it's a network of possibilities -- helping you do what you do... even better. ♪ welcome back. earlier we asked welcome back. earlier we asked viewers is it a case of too little too late as microsoft unveils its surface tablet and is that device something you would buy. david tweets, the ability to create a content that will be beneficial for those in

corporate setting should far exceed ipad. and another tweet, microsoft is always behind the curve. it's always trying to emy late a product that's already established. get in touch with us. e-mail us at worldwide@cnbc.com. reach us directly at kelly underscore econvenience at loui louisa. >> keep your twits coming. always nice to hear you. i'm standing here in front of a euro dollar chart. there's a lot focus on currencies. it's fun to show you. despite the fact that we have all the worries about the greek elections, we have worries about

what's taking place in spain with yields there above 7%. we had very week zew data out earlier today. we're still looking towards the potential of more stimulus to be inserted into the markets but year-to-date what we're seeing the euro/dollar lower. 1.26 we're in the range bound trading pattern for a very long time. in fact we just change on. i show you a five year chart as well. financial crisis some would argue broke out in 2008. since 2008 yes we have come off the euro dollar trade and there's been volatility but over the past five years we're only lower in the euro versus the dollar by 5.5 percentage points. 1.26 is where we are. kelly? >> you're watching "worldwide exchange" and these are your headlines today.

yields soar as spain auctions 3 billion euros of short term paper. greece edges towards a coalition government. and julius baer is in talks with bank of america to buy its nonwealth management business. the federal reserve has a meeting today followed by an announcement tomorrow to be fold by ben bernanke's press conference at 2:15. richard is still with us our guest host. do you think we'll see more operation twist? >> i suspect. there's a little noise around it at the moment. a lot of people are expecting it around the qe2. i don't think we got the blocks in place yet because the domestic zone is a bit weaker,

but not hugely weaker, inflation expectations are still high if you look at the five year forward. and the fed itself, something we've been bleeding on in the last few months has been talking about seasonal and seasonal adjustment problems for the data. the data is not quite as weak as it looked. but still not as strong as it looked before. do they need to take out some big insurance now because the eurozone, because the em world is slowing quite fast or do they want to keep it in receive. my best guest they want to keep some of it in reserve. whether that has any result in financial markets i would doubt. it would come as a disappointment. >> are expectations are high? how high are we talking? >> look at the five year five year forward, they were still about 2.46%. so, a lot higher than the last

two occasions when they did qe. so, again, it's something that the fed itself looks at. so, it certainly -- inflation is coming down because energy and commodity prices are coming down. long term inflation expectations i think are still higher. even if they did do that the question is how much? >> richard, lovely to see you this morning. great to see you. now, oracle has surprised investors by reporting its fourth quarter results three days early, prompted by reports earlier on monday that a top executive was leaving. that was confirmed. the north american sales chief is resigning. he was critical of oracle's hardware business. earn mail messages make public.

sales are expected to be flat up to 10%. oracle in germany trading higher by a shade of 5%. the mystery is solved. microsoft unveiled its own line of tablets called surface in los angeles. there's two versions. a lighter one and heavier device called ultrabooks. these would run on the news windows 8 operating software and both come with an attachable keyboard and kick stan. sit them up on a table top and type away. windows 8 will go on sale this fall. still to come on this show our next guest says despite all the doomsday talk companies are doing okay and like jack and the candlestick we'll ask how businesses are being nimble and quick. more on that when we come back. >

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welcome back. welcome back. take a look at how european markets are trading. we have seen a bit better tone across the board this morning although we've been choppy to use my favorite word. the cac 40 in paris is in the red. xetra dax up about half a percent. >> let's give you a look on what's on today's housing agenda. may housing starts is out at 8:30 eastern. building permits expected to rise by 1%. fedex reports before the opening bell, package delivery giant is seal as a bellwether for the global economy. adobe systems and la-z-boy

reports. >> the very thick and plush and cozy. u.s. futures are in the green still, trying to hang on to gains. dow jones up 33 points for the open. for more we're joined by new york by ryan gibbons. what's driving the day? >> another day of let's see what's going on in cabo san lucas and the fmoc. >> do you think that the expectation of big announcement from the g-20 or fed moving tomorrow is helping what's support markets today? >> it's a little bit of a wait and see mode today. we're just off the greek vote, and we're wait on that next batch of news. >> okay. ryan so, what do do i? how do i position myself? >> this is one of the markets

where the key word is diversify. you need to make sure you're good across different sectors and international as well. >> i hear that. give us something network with. where should i position myself in. what would do you? >> i like technology. i'm not -- i wouldn't tell you i'm a real big fan in what i saw out of microsoft but i'm a big, big apple guy. always have been. and i like -- i like where they are going and what we're seeing out of them. >> aside from apple, who else do you like in the space? we were speaking with an analyst earlier who was bullish on groupon ahead of their shareholder meeting today? >> groupon is interesting. they are a company that has an ebb and flow there. there was a time when it was e-mail only and then hit and disappeared. we'll see what they've done to upgrade their technology, give them a boost.

let's find out what they say. >> ryan, do you buy facebook? >> no. i'm one of the few people, i have a facebook account so i can watch my daughters. >> excellent. your daughters know never to write anything on facebook because their father is watching over them. >> that's part of the problem. people don't want their parents looking over their shoulder. >> thank you very much. then you always have the parents trying to be fun with their kids. >> and the parents' friends. it's a little bit awkward. in any case thank you for your help this morning. >> we'll see you later tomorrow. >> yes. head up to u.s. "squawk". stay tune. >> good-bye everybody. have a lovely morning. that's it for "worldwide exchange".

good morning. today's top story, microsoft launching its first-ever computer. can its tablet called surface take on the ipad. another key spanish debt auction this morning. yields jumping to highest level since the birth of the euro. >> fed convening a two day fsom meeting. economists say we could see a the week to that chubb engineer checker move. it's dattuesday, june 19, 2012. "squawk box" starts right now. good morning, everybody. welcome to box here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. we'll have much more on spain,