welcome to welcome to today's edition of "worldwide exchange". i'm ross westgate. >> i'm kelly evans happen >> european stocks tread water ahead of a crucial meeting. german unemployment jumps more than expected. >> fate of obamacare is to be decided today. u.s. supreme court will pass down its vote on whether the president's health reforms are constitutional. >> world's second biggest ipo fell but soars in malaysia. >> jpmorgan's trading loss could soar as high as $9 billion, four times as much as the bank had

estimated. okay. welcome to today's barack obama. let's recap the german unemployment numbers. ticking up to 6.8% in june not a tick up because they revised up the may figures. pay was originally 6.7. it's 6.8 in june. unemployment seasonally adjusted also jumped by 7,000, it was supposed to jump by 5,000. it brought the euro/dollar down on the session to 1.243. we're down below the three week low. so that's just the backdrop for this -- i won't say crucial summit. >> not even going to go there. we had expectations and walked back from the critical element

of the summit which by the way, it was supposed to be today and tomorrow, could go into the weekend if they need more time to firm up. i think they need more than four days. angela merkel says she has no illusions -- excuse me one second here -- angela merkel says she has no illusions that the eyes of the world will be on germany as eu leaders meet for a crucial summit. the german chancellor is refusing to budge on the idea of euro bonds. however speaking after a meeting with francois hollande, merkel says she will use the brussels gathering to push for greater integration. >> translator: we need more europe. we need a europe which functions, that's what the markets are expecting, and we need a europe where its members help each other. >> meanwhile, the eu faces disaster if they don't support

the struggling economies. speaking at an award ceremony the italian prime minister said this. >> if the public opinion sees that bad signals not good signals are coming back from the markets, well then people may be discouraged and political forces which say let european integration, let the euro, let large companies go to hell might prevail which would be a disaster for the countries concerned. >> that's one match happening between germany and italy. that's in brussels. another one today in poland. silvia is at the match in brussels. we're more likely to get results in the football version than the one you're attending in brussels. >> reporter: yeah. i think i rather be at the one in poland. first it will be shorter. even with extra time and penalty kicks. the second one, we will have a

result out of poland. as far as the polish match is concerned there's a chance germany will be kicked out of the euro. hopefully here in brussels there's a chance of anybody being kicked out of the euro. we have one week to save the euro, you can't let one of the larger countries go hell. so, the bottom line is we always have these drama drums the moment we get into this crucial summits. but ultimately all we can do is play into deep space. angela merkel's game if that's the right word is deep space. more institutions for the eurozone. institutional framework. for miss cal union. more budget control. she is kind of right because if you look at it the markets for ten years have always admonished the eurozone for having done the

impossible, for having put this eurozone up, for putting fiscal union up, for putting monetary union up without a fiscal framework for it. that doesn't work. the markets say that didn't work you didn't have an institutional framework but you don't need an institutional framework either. the bottom line is often it's not we want more solidarity first, we want more money first or much safety for the banks. but don't want to swallow those bitter pills. >> yeah. fair point. let's bring in tina, political analyst at citi and with us for today's program the head of economics for europe. tina, the german position here is that you can't have any kind of debt mutualization -- given some control of the german credit card.

the question is, is that an entrenched german position or tactical bluff at some point that will be called? >> well, i don't think merkel is bluffing. she certainly is signalling quite strongly to her domestic audience. we heard 9-9-9 and over my dead body. but she's serious. germany doesn't want to be on the hook for an open ended fiscal transfer union. >> what are market investors do? they keep telling me, germans are bluffing, don't worry when push comes to shove the eurozone is about to break in and they will cave in. >> the costs of this is fairly huge whatever happens and germany has run a current account surplus since joining the euro with an undervalued exchange rate. and so there is some money there that germany could possibly give. now german taxpayer was told when the euro was started you'll

never have to pay southern europe. you can see this might happen. you can see the negotiation position starting to emerge. germans want spain and greece to go for some sort of euro oversight. >> you talked about a negotiating position. you say it's not. it is a position from which they will not pedal back. >> they will move on some short term measures to ease the pain. merkel is a political animal. she understands that she needs to send francois hollande home with something as a newly elected president of france, we'll have a growth back. so there will be some gestures towards this mood for growth in contrast to austerity but it isn't going to be a german santa claus with a pot of money. >> wonder if there isn't a certain logic to what we've seen played out. the worst the crisis gets for

portugal, spain, greece the more likely they may ultimately have to be simply out of desperation give up some sovereignty to get some help. so we're still one crisis away from getting to that point, we haven't reached that point where the leverage really makes it more appealing for some of these countries to give up sovereignty. do you expect worsening of the situation from here will push them into the arms of a fuller fiscal integration? >> it's certainly possible you may need a trigger in order to coerce countries into making those hard choices and a bank run could focus that. what we've seen when leaders don't have bond markets on them or loaded guns they don't make the painful decisions on structural reform that are warranted. they take their foot off the

pedal. >> how is politics going to play into this? in the netherlands, they are saying we need to pull out of euro. he's launching his next come back saying the euro is not for italy any more. i'm wondering how those fors are, what's the momentum there going to gather and support they might generate. >> this is a critical point. all year i talked about the investment environment and that's popular sentiment. you are seeing an erosion of support for the eu and the core for bailout and periphery for austerity and this is dangerous. it hasn't posed a threat to mainstream political parties but as you mentioned in finland, also in the netherlands where we have an election in september, opposition parties whether on the left or right see an electoral advantage in pushing back on europe and that's going to make anything requiring, for

example, voting in a referendum or treaty change is that much more problematic. we don't just need a strong signal to markets electorate needs to see the eu has a plan for moving forward. >> this is what i find most disappointing is actually for all the talk of, you know, economic policies, there is no one talking about what the -- i mean surely political should come first and then you work your way backwards. you should say what is the europe we want to create in 20 years. no one -- surely the political -- you have to lay out your political force first and get the people behind that vision and then say if that's what i want to achieve these are the thing we do to get there. no one laying out a grand european political vision in that way, a political leader. >> a single national level leader because there's no electoral advantage in doing so. this has been the function of

the eu institutions. remember what we had for the last 20, 30 years has been this incremental progress towards more integration and it has worked very well and particularly when it comes to big bank enlargement that was a successful policy. crisis management is not necessarily going to be the strength of a consensus based organization which is what the eu is, hence the disconnect with markets where markets are expecting answers in the short term which will take longer. you saw for example germany talking about the need for a referendum. there's been interesting public opinion data out of germany which suggest physician a referendum were held on today in staying on the current currency. when asked has germany done enough 37% germans think germany has done enough. merkel is facing elections next year in 2013, the case in italy. it could be that in the german

case the spd they are campaigning on doing more on europe to your point. no one is talking about comprehensive solutions but i think that there is openness and we really don't need full fiscal and political integration, we need a blueprint or road map and i want needs to happen soon. >> well we'll see if it thaps weekend. tina, appreciate your thoughts on that. >> on today's show, we'll be out to tokyo as japan releases its retail sales figures. will the slow down continue. >> in rome, italy is set to release the results of its sovereign debt auction. >> plus the malaysian number got a boost from ipo of palm oil. >> finally the u.s. supreme court is expected to vote on obama's health overall today or deliver its decision. we look ahead to a crucial day

in washington and start from about 5:00 a.m. eastern. okay. just over an hour into european trade. we hit a session low. a little bit worse than expected. more than 82 declines out pacing advances. we did have some gains yesterday. ftse up 1.5%. currently down half a percent for the ftse. the ibex down two-thirds. here's what's going on with the debt markets. bund yields low half a percent. match between germans and italian spread. 10 year italian bonds are high, 6.2%. spain over 7%. we keep our eyes on that.

auction coming out today for italy, talking about with spain the need to try to get their borrowing costs down. we'll auction up to 5.5 billion of five and ten year debt. a lot of pressure on the shorter end of the curve. three year italian debt at 5.37% as well. so we keep our eyes on the short end. remember when we got rid of busconie in november. we're currently down to 1.2425 is where we stand at the moment. pretty much down near the thee week loss that we hit at the beginning of the week. dollar/yen lower. bit of export. aussie/dollar, 1.5541. final gdp coming out.

that's where we stand here. what's happening in asia so far? tracey has more for us in singapore. >> most asian markets traded mix with some gains on a bit of bargain hunting ahead of the eu sue mitt but the china market landed in negative territory. showed some softness closing down 1%. hong kong shares flipped between positive and negative finishing down .8%. the companies expect full year profit to grow by 10%. nikkei hit the highest closing in six weeks on improved sentiment as selling slowed ahead of mid-year reviews but analysts warn gains could easily be erased if investors are disappointed with the eu summit.

south korea finished around the break end point as well as foreigners continue to unload automakers, tech and financial stocks. australia afx 200 ended flat. a lot of watching from the sidelines ahead of the eu summit today. back to you. here are some of other top stories we're following. a history u.s. supreme court decision is due later that will decide the fate of president obama's health overhaul. the decision is expected to come shortly after 10:00 a.m. eastern and will answer the question, perhaps as to whether or not congress can require americans to carry health insurance or pay a penalty for not being insured. according to wall street insiders the uncertainty behind the ruling isn't having much of an effect on the health care sector which has seen the best performance among stocks. jpmorgan's trading close be much higher than initially estimated according to the "new york times" which said the bank's total loss could be as much as

$9 billion. they quote unnamed sources. that figure four times higher than jpmorgan's initial estimate of the loss. jpmorgan shares in germany are trading down more than 1%. there's been some talk of the losses of being of this size. we have to see how this impacts. >> an analyst estimate whether they are going -- they have been trying to make their own estimates whether this makes any move. talking about that, barclay has agreed to pay $150 million u.s. to and european authorities that the banking giant manipulated liable between 2005 and 2009. not the only bank under investigation. damon, thanks for joining us. first of all, another thing

that's happened out of london isn't it? we talked about jpmorgan, we talked about aig trading, ubs trading, what is this doing first of all for the status of london as a financial center? >> what it's doing is it's damaging it without a shadow of a doubt, libel isn't called the interbank for nothing. it's a historic interest rate that began in the mid-1980s. london was exploding as a great global financial center. so the reputation is not great and certainly politicians and regulators who say they value the financial services industry in the uk clearly need to get a grip and they will be looking for leadership here and that's one thing when it comes to london and its reputation, there is a bit of a lack of leadership in terms of restoring its reputation. >> how much worse might it get because barclays is the first

bank to settle. others are under investigation. i mean how much bigger do you think this is going to get? >> it will get a lot bigger. tip of an iceberg. barclays has gone to first and tried to mitigate some of the pain around what they've done. their fine could have been much bigger if they hadn't cooperated with inquiries. other banks are still to settle. those fines may be bigger but one or two i've spoken into the past 24 hours say they are emboldened but not the same degree as barclays. as you say a few minutes ago barclays has been find just over $450 million. by the time we're through the fines could well top a billion dollars in total, when you consider some of the size of the banks involved on both sides of the atlantic. >> i'm just curious give end $360 trillion of derivatives is

priced only bore what the market implications of this decision are. >> clearly we had some problems. now we know during the financial crisis basically libor was very difficult because there was no retail funding available. most of the, you know, if we look at what went wrong it was essentially the financial crisis. during that it looks as if no one knew where the market was. in terms of the uk we had selling on ppi, now there's a discussion whether people were missing which were linked to libor. >> mortgages a lot of those based only bore. we'll keep following this story. thanks for now. we'll catch you again very soon. still to come japanese retail sales may beat expectations for may but plenty of reasons why consumers may not be breaking out their wallet socs so much in the future.

>> more on that. stay with us. [ male announcer ] this is the at&t network. in here, every powerful collaboration is backed by an equally powerful and secure cloud. that cloud is in the network, so it can deliver all the power of the network itself. bringing people together to develop the best ideas -- and providing the apps and computing power to make new ideas real. it's the cloud from at&t. with new ways to work together, business works better. ♪

. . welcome back to the program. japan's retail sales climbed 3.6% in may from a year earlier. that was a bit higher than the median forecast but lower than the 6% seen in april.

consumer spend is likely to lose momentum in japan as the effect of government subsidies fades. joining more on this is our japan strategist. this move by japan to increase its sales tax over the next three years is aimed at getting information spend now. is it going network? >> well, it's my opinion that if it doesn't work then we might actually see a delay in the imposition of the sales tax. i think that this is more a political coup for prime minister noda than anything else. but if we do have growth running substantially below 2% and if we're still in deflation come march 2014 i really doubt that they will step in and actually enforce the legislation that they've just passed. >> the corporate sector in japan is really the source of a lot of

its weakness over the last couple of decade. you point out now that have of topix listed companies have no or negative debt. they got yen strength. will we see a return to the 1980s where japan starts snapping up -- showing its strength all over the world? >> well, in my report actually one of the things that i discuss is the potential that japanese firms are actually overpaying for their overseas acquisitions. if you look at the premiums paid for overseas acquisitions they are larger than their domestic acquisitions and if you look at those overseas acquisitions three years on, return on equity actually declines not improves. while it improves mildly for domestic acquisitions. so, while we know that japanese companies are using the strong yen to go on an acquisition spree abroad we have to be very careful about whether those high

premiums they might be paying are really worth it. >> the japanese government have actually encouraged japanese firms to invest abroad as part of the strategy to pull down the yen exchange rate. on that want basis is it worth them paying a premium for investing abroad if it means the yen is weaker and domestic margins might be protected when it comes to domestic production? >> well, from a macro economic perspective certainly it is because if you look at japan's current account especially now that trade has gone into deficit it's all income. some of that is portfolio income, the larger part is portfolio income. we've seen a steadily growing direct investment income. so, i don't think by any means the idea is for japan to stay domestically because of demographic reasons growth at best is likely to be slow but i think maybe revisiting the

decision-making process, consulting shareholders a little bit more, looking at whether those acquisitions are number one worth the money and number two likely to enhance shareholder value might both help bolster japan's balance sheet as a whole and enhance those returns on equity. >> all right. plenty of food for thought about the corporate sector. in the meantime we'll talk to a guest coming up after the break who says different per senses of the eurozone's integration process may be at the root of the region's current troubles standing in the way of a solution now. stay with us. acceler-rental. at a hertz expressrent kiosk, you can rent a car without a reservation... and without a line. now that's a fast car. it's just another way you'll be traveling at the speed of hertz.

these are the headlines from around the world. european markets tread ahead of a crucial meeting of european leaders in brussels. german unemployment jumps higher than expected. >> fate of obamacare is to be decided today. the u.s. supreme court is to pass down its vote. >> world's second biggest ipo fell among investor caution but soars in malaysia.

>> jpmorgan's loss could soar to $9 billion, four times as much as the bank had originally estimated. right. gdp for the first quarter was confirmed to contract in minus .3% on quarter on quarter. q1 gdp revised on an annual basis to be a little bit worse down 2% on the year. q4 gdp was revised to minus .3% on the quarter. in fact what we've just decided is the slow down was worse than we thought. >> the current account deficit was worse as well about 11 billion pounds versus 9 bill estimate. shoeing weak pes. >> bank of england saying spread are wider in the second quarter and don't widen in the third

quarter. spread on lending in the second quarter, spread to all firms will widen. another reason why the bank of england again has come out with reducing liquidity restrictions on banks and tom let's bring you in on this. there's no doubt we'll get more qe here. every time i look things are getting worse. we're only halfway through this financial crisis. >> indeed. that's the global way. in the uk we're slightly ahead. i think in europe where bank recapitalization hasn't started yet. we're about halfway through. within the be uk spread are widening. that's where we'll get the funding for lending program. the banks lend there will be reduction. we don't know the mechanics of the scheme yet. we'll get there and the extended collateral term. the question we have now the banks expect the spread will widen. does it justify a rate cut next

week which is unexpected but if they want to get bank lending out of reserves a rate cut may be the way to go. >> to what >> 25 basis cuts. >> european stocks meanwhile are down near the session lows ahead of the european summit off one and one-third percent. >> spanish yield back up over 7%. in italy 6.27, that's the figure to watch. the german bund is benefiting, 1.51% and the gilt as well 1.64%. on the currency markets, euro/dollar is down, 1.22. three week low. u.s. sterli euro slr sterling below 80. >> we'll see if the aussie

dollar slips back. watch risk sentiment. our next guest says divergent perception has toledo the region's current problems. professor you were involved in the original discussions, the committee that led ultimately to the euro. what problems were one appreciated at the time that are now emerging as a road block to moving forward today? >> good morning. i think the most evident one is financial stability was not really discussed, who would take responsibility for that in an integrated currency area. this took place, these discussions, ten years before the euro was put into the market and simply not appreciated to what extent interdependence between countries in a financial sense would increase and

particularly at a time of crisis. so there was no discussion about that. government felt that giving sovereignty over bank supervision, for example, and more firm european regulation was too much to ask of the political system now that monetary system was being centralized. >> there was a split as you emphasized between the german and french view on what the euro was about and that split continues to be hurdle today. >> we can see it on the agenda in today's meeting of the european council. the germans see the main purpose of the monetary union as consolida consolidating. the french sees it more taking more discretionary decisions from time to time in the council of ministers and imposing some adjustments in the strong countries in the surplus countries. >> do you foresee, in fact, that in some ways the difficulty in terms of giving up something

might be harder for the french than the germans? the germans are talking we may have a referendum on changing the constitution. they would maybe be prepared to go towards greater political unity than perhaps the french are? >> i agree with that. yes. the germans have always been keen on political integration. it's not well defined what it was. it means more political collaboration. the germans are prepared to discuss that seriously. the french are much more sensitive to encroachments on national sovereignty. >> silvia, to what extent is that differing attitude we're discussing between the german and french way forward emerging as a key problem in the summit this weekend? >> it is emerging. >> don't know whether it's emerges as a key problem. but it certainly is something that we focus on more and more.

it has been as was just said at the heart of sort of the divergence of the road map to europe as it were. the germans want institutional framework, they want rules and regulations to set up everything and maybe move to a more integrated europe. the french also laissez faire approach. everybody should put money on the table. the french and a lot of the other countries in the periphery as we say but the countries of southern europe say put the money on the table first and we can talk about european integration later and the germans are saying give us more integration, give us more budget control first and then we put more money on the table. we limp from one summit to the next avoiding the heart of this discussion and unless one or the other gives we'll not get to a real solution because all the fiscal compact and everything we talk about could be a figure leaf if it hasn't both the kind

of constitutional framework that we need for that. >> how do we combine the long term goals that we've got as far as what's needed for eu political integration and the short term need for spain and italy to get their borrowing costs down. >> we haven't solved that problem yet. the rules that the germans have proposed but ignored largely over the past ten years certainly have been revised and they provide now a solid framework as long as you can hope they are enforced as intended. that doesn't solve the problem of spain and italy, which is more of a shorter term liquidity problem markets reacting too pessimistic pessimistically to the problems that are different in the two countries. it's more legacy of an old large debt in italy and failure of a

banking system which they have been unwilling to admit. >> looking at the short term fix we've been told from the road map the ecb ultimately will become the banking regulator of the eurozone. where does that leave them for the day. it's going to take those powers lender of last resort officially for the eurozone and if it stands behind the spanish and italian banks then does that not remove pressure on the sovereign. we're trying to break up this sovereign banking, you know, loophole and we're looking for a quick fix from the summit the ecb ending up on sunday or friday evening as lender of last resort and banking regulator might do it quickly. the long term stuff we can leave for now. >> ecb is already a lender of last resort for banking system. their long term operations in december and february were seen as that. but they objected to in my view in line for the intentions of

the ecb to be part of the government. you can't separate the two. the ecb has to have an arm's lent relationship to the government. it's a more complex problem than simply just buying government bonds. >> do you think they would have a mandate if we've got -- i mean just look at m1 deposit numbers. under their mandate they could set up quantitative easing. do they've mandate to do that if conditions are right? >> quite true the growth of the money stock in the definition they use is their longer term assessment of what's need. it's not easy to put out the growth rate of the money stack as we see in this country in the

uk. you can raise central bank liquidity but whether it gets lend on to the economy is very doubtful. >> i was just thinking it would in the short term, maybe that's one thing that would in the short term alleviate market stresses. i'm not saying it would happen by any stretch of the imagination. >> it would be a help. whether, again, if it's a sovereignty problem then liquidity measures in the short term. certainly greece still has a sovereignty issue. italy and spain where issues are left clear. sovereigns have weak banking systems, can't raise capital at the moment because the ratios are too low. sovereign has to stand behind them. the banking crisis becomes a sovereignty crisis. >> if you can. right. tom for now thank you. silvia thank you.

neil, thanks. >> moving on, in japan troubled utility tokyo electric power is looking to the outside. we have more on this story. >> reporter: hi. te pc o's new president said the utility firm is looking to partner with other energy companies and financial institutions. he said te pc o lost its ability to raise funds after last year's nuclear disaster and has to change its going alone policy. starting nuclear reactors are essential for the firm's reconstruction.

the japanese government says it will carry over some $10 billion from last year's quake reconstruction funds into this year's budget. that's all from nikkei business report. >> in china looks like the government is going into their telecom sector. tracey has more. hi, tracey. >> hi, again. china business news report that beijing wants more private capital put network in the telecomations sector. the report still has to be confirmed but under a draft private firms are reportedly encouraged to set up mobile communications, web hosting service, telecom systems and even base stations. china's telecommunications industry is monoliftic in nature with three carriers dominating the sector. this program if implemented

could pose serious challenges to serious players. back to you. >> india's prime minister is vowing to restore confidence in asia's third largest economy. he's taking control of the finance ministry at a time when growth has slowed to india's weakest in almost a decade and the rupee among the worst performing. shereen bhan has the latest from new delhi. >> reporter: hi. thanks very much. the prime minister has took control of the finance ministry and got down business right away. there was a slew of meeting between the prime minister, his advisors, economic advisory council and of course ministry officials ask them to stake stock. there was a detailed statement put out by the prime minister late last night and the message is very blunt and clear there's too much pessimism with regard to the indian economy and the

indian economy needs to divide its animal spirit. prime minister making it very clear that whatever the obstacles are to attract foreign direct investment specifically tax related, remember this has to do with that retrospective tax amendment that came in which impacts deals like the vodafone transaction and created a furor among investors. we already heard from some global foreign players talking about investing in india, ikea will remember putting in 1.5 billion jour billion, coca-cola is talk about another 5 billion invested. the mood is turning around but we've seen this happen in the last couple of months in india where we've seen this policy back and forth if the prime minister can translate his message into action that's a big deal as far as markets and

investors are concerned. back to you. let's just remind you what's on the agenda in asia. household spending, jobs and cpi released at 1:30 then industrial output and in malaysia gauge of inflation with the latest ppi reading. >> i'll be glued to the screen for that one. newscorp board has approved a plan to split the media conglomerate into two units. what does that say about the future of the newspaper business. leapt us know. shoot us an e-mail as worldwide@cnbc.com or tweet us. reach us directly at kelly evans. we'll did you say what's up for the sector when we come back.

welcome back this morning. the world's second largest ipo this year after facebook made a strong debut on the yes malaysian stock market today. shares of palm oil company fell to global surged as much as 20% in early trade before settling a

bit lower. the company raised 3.1 billion from the listing. it was priced to sell and will the momentum last? we look at feld a's pros be pebts in this report. >> reporter: the world's third largest palm felda is looking at emerging markets to drive their growth where palm oil is a staple cooking ingredient. >> the economy is reflected in ipos like felda which are distributing incomes across a whole wide area of agricultural communities. >> reporter: the outlook for felda is compelling. market outlook is reverse. formula one is to be put on the back burner. some market experts are optimistic citing the over subscription and heavyweight

corner stone investors like aia, fidelity and several malaysian state-run pension funds. >> it's a sustainable business. it's for modern investors being greener as we look forward. as long as it hasn't crashed as facebook did then it just goes its way at the moment. >> reporter: but the frn elda ipo promises to be a politically charged affair in a run up to a general election which could be called by next april. the opposition claim the ruling party is trying to ensure it's re-election by offering palm oil farmers a windfall from the ipo. analysts have raised concerns about declining palm oil yields asthma during plantation wrgs the average age of oil palms are about 20 years compared to 12 for others. >> some report, there's some bits about the palm tree use of this felda, some concern about the use and futures prospect.

agricultural commodity price have seen a steep rise as investors worry over dry weather condition. but our next guest said more fundamental issues will keep prices high and rising. thanks so much for joining us. big difference between short term fluctuations and entry points and the long term story. when you talk about a long term story for an investor what's the time horizon? >> you're right. short term is all about weather. the long term is all about drivers like population growth and all about changing consumption habits which we reforeas the wealth effects. people especially in emerging markets when they get additional income they invest that or spend that on a richer diet instead of buying a consumer product think will eat a richer diet.

>> my concern is i know this is -- we talk about this story for quite a few years. i could buy that story and i probably do but i could get burned in the short term quite badly even waiting for that story to sort of be reflected in prices. >> this is absolutely true. it's part of the difficulty investing in agriculture. you have to have a long term perspective. you have to be somewhat visionary. they trends are well established. over the long term, the fao is saying they have to increase food production to meet demand by 50% by the year to 30. that growth is there. to capture it it's true not easy go through physical futures, vest in equities opinion when you vest in equity you have equity risk. >> what's your favorite trades for the soft? i assume there's ones you like and don't like not an a case where the entire sector will benefit.

>> the economic outlook is generally slowing i would avoid more sensitive economic crops like cotton but i would go definitely into crops that are feed crops like soy, like corn which are driven up by this protein consumption growth. how to get exposure. if you believe like we do in the future crop prices will remain higher because in the last 60 years they declined in real terms by 40%. if going forward crop prices stay high, we want to be on the upstream of the market where food is produced. >> does that square with your view of the world? >> the interesting thing is i agree. by 2050 we need to double crop production. but most of that can be done if we had 2% growth in agricultural output. that means the investment needed doesn't need to generate this very high price. what i worry at the moment is soft commodity is having a massive rally because you're

looking for an inflation hedge and every where central banks are printing money which will lead to inflation. don't need to buy sovereigns at the moment. >> soft is the new gold? >> yes. >> by and large, somewhat of a contrarian play. soft commodities like gold are at the end. day an inflation hedge. these are tangible assets. >> original hard assets or soft assets. >> digestible. >> how does an average investor get exposure to farms? >> well, actually i just came from a farming conference and believe it or not a lot of investors are practically strapping on boots and going out and farming. >> i believe it. we hear about it all the time. >> without actually doing that how do i get a share in a farm without becoming a farmer. >> we launched the first global farming index and that's a step in that direction to

institutionalize the liquid investment in farming communities. >> it will push up real estate prices for farming and won't that hurt returns? >> as farming income in crease, farmland prices will increase. we're not banking on speculation. there's speculation in farming. in the last ten years there's sources that say 80 million hectares of farmland which has been transacted. there's constitutiinstitutional in the space. >> thank you very much. we'll see what happens. let's hear from tom before we let you go. give us your call here on your dollar and main currency call. >> i think there will be disappointment today. i think after new york opens -- remember eu summit today when actually they start talking it's about 4:15 after they had the photograph. in the run up to all of this we'll get some wire reports out. everybody will get very

disappointed. the euro will come under selling pressure the whole time. what we think it goes down to, silver 78, holiday in europe this year as well. >> do we maintain the break below 80 on euro/sterling. >> i hope so. any euro weakness. >> anxious wait for the white house and the markets as the supreme court prepares to rule on president obama's health overhaul. details next.

welcome to "worldwide exchange". this morning. i'm kelly evans. >> i'm ross westgate. european stocks are down ahead of a crucial meeting of european leaders in brussels. german unemployment jumped. >> the fate of president obama's health care reform is expected to be decided today. the supreme court will vote on whether the new rules are constitutional. >> second largest ipo has soared on its market debut in malaysia. >> jpmorgan's trading loss could total $9 billion. four times as much as the bank had originally estimated.

good morning to our u.s. viewers who may be tuning in. let's look how futures are pointed. it's a red day in markets. we got the dow slated to open lower by 70 points. nasdaq pointed lower by 1 or 13 and s&p 500 by seven or eight points. not surprising given the tone we've seen across global trading. ftse 300 has weakened in the last little while down .1% after trying to find some gains this morning. of course comes ahead of a crucial meeting of eu leaders. it would seem given we won't have many details until end of the day, tomorrow, weekend, traders are taking position off going into expectations pulled back. ftse 100 down .7. dax down 1.4%.

cac down .85%. ibex in spain trying to hold on to the green up .2%. the spanish ten year does reflect rising concern. >> we'll see where we are. mario monti made the mistake saying we got to save the eurozone. his slip up. >> this is where we stand right now. bund yields are low, 1.15%. italian yield, spanish yields over 7%. recession worse than we thought for the third quarter and year on year basis for third quarter. the focus will be on italy yields above 6%. auctioning up to 5.5 billion of five and ten year btps. five year trading at 6% as well. a lot of stress to emanate in the shoernt.

maybe three year italian yield up over 5%. though we quote the benchmark 10 year much more stress in the short end which is rather concerning as well for the italian government. just remind you as well where we stand in the currency markets. euro/dollar on their three week loss. dollar up across the board against other things. yen benefiting the most. aussie back down, sterling dollar steady. euro/sterling is below 80 this morning and we heard some said it may sustain a move below 80. >> angela merkel says she has no illusions that the eyes of the world will be on germany as eu leaders meet today for a crucial summit. she's refusing to budget on the idea of euro bonds unless the eurozone gets greater oversight on budget. merkel said she will use the brussel gathering to push for

greater integration. mario monti says the eu faces disaster if leaders don't act struggling economies and help keep their borrowing costs down. we've managed to wrestle in here during her time. bill, mario monti, how much bargaining power does he have heading in to this summit? >> probably less than zero i'm afraid. he's painted himself into a difficult position. no money will be thrown at him by the germans. he's facing a political crisis looming within italy. that's why i really do think that in the next week or so italy is going to being the epicenter of the euro crisis. spain the wind is blowing, the

trees are falling down but hurricane is about to hit italy. i think it comes on monday when monti comes back with nothing from this summit, all his ministers have been put on stand by to try to come up with something that they can say at the beginning of next week but at the same time we got the political support that was behind the coup that put monti in place last year, that's evaporating. we have the ongoing problems with italy's economy slowing and we now got other political parties including the berlusconi fraction talking about an early athletic. >> if we have no major steps taken this weekend will italy trade above where spain is? >> i have a horrible sneaky position that 6.26 will have a much higher second number next week, we'll see a rise in italian yields. >> should we look at the short term more closely? >> well, we saw earlier this

week that the short term italian auctions almost doubled in yield. not quite doubling but a severe increase in yield. i think we may see more of that coming. it will hit italy as well. >> we were discussing this earlier. i was in italy yesterday. they don't think they should be in this position, the situation in italy is so different in spain and greece. what do you think? >> of course if you're an italian politician or italian treasury spokesman you'll say why? look at all the good thing. our bond market is largely domestic so we don't need to worry about the fact that foreign investors are no longer buying. we have a small budget surplus. huh. stop and nonsense to you i say it does not matter. the fact is that the market has very little certainty. and the reasons for that are long term and they are structural. bit the fact that italy over the last ten years has posted a growth rate that makes zimbabwe

a high performer. we have a political structure that's completely nonfunctional since the new government came in almost nothing has been done to restructure or reform the economy. and it does look now that the italian banks are sitting on that literal cash and no longer investing in the bond market. >> you seem very skeptical for italy to institute the reforms that are necessary. is that warranted? you also made the point about their poor demographics which i was surprised to hear. are these countries, that's a pretty significant statement if you think the odds of them tumly passing the reforms that are ultimately necessary are pretty slim. i think that's a pretty damning indictment on where this is headed. >> we need to look at the structure of italian politics. we that have this government for all intents and purposes was encouraged into place by an unholy mix of vatican radicals and the eu elites putting it one

place. now it has not been empowered to deliver the kind of reform. if we look at the kind of labor reform that it tried to achieve it caved into everyone from truck drivers to taxi drivers whom ever says no we won't accept that the government has caved. nothing has changed. >> the italian labor market has a strong signal for the country's determination. >> if the someone from the eu elite says that must be true. i withdraw my accusations unreserv unreservedly. no i don't. it's that lack of power, that lack of mandate that the government has is one aspect. what replaces it, what we're seeing in italy is a very fractured developing italian situation where you got i'm not sure how you describe these people, economic fundamentalists are actually getting elected to take over municipality roles as

mayors and in charge of small towns. the powers that be, the mainstream parties are terrified they will be replaced by this new political movement. >> given all this and we know how deep and structural these challenges are, what's an investor to do? what do you do knowing these are long, long term problems? >> this is the very interesting side of this equation. ultimately we do -- there does seem to be a mood in the market and i think it's discernible by the fact that even though nothing is going to be given away at this week's summit we've not seen the market collapse. what is it that's been keeping the market high? i think it's the general expectation that in the long term germany will stay behind the euro and continue to support it in some way. at the moment that's difficult politically for merkel and she's playing this long game of reform your economies. so investors are saying there's a long game to be played with economies like it so in the short term it remains very volatile and that's how you play

the markets. you can play the ups and downs in the cds markets or in futures very easily. >> you can try to be a market timer basically. some will do it better than others. while this goes on i wonder how the u.s. economy will suffer collateral damage. >> the uncertainty is weighing on confidence. it explains some of the slow down we've seen in the employment situation. we're watching financial conditions because that is really the transition mechanism to how the european struggles really impact the u.s. and to date they are not really tightening, certainly far looser than they were, for example, last summer. so so far, i think the economic short fallout from the intensifying crisis here on the u.s. economy has been limited but the risks are rising. >> it was 1%. >> to some extent that's the benefit, you know, we got the fed trying to bring long term interest rates down but who

needs the fed to be buying in here when everybody else in the world is because it's the least contest as we were discussing earlier. we are seeing to some extent. but, you know, clearly we've seen a weakening in global activity, a weakening in u.s. activity, and, unfortunately, i don't really see anything on the horizon that suggests that's a short term event. >> michelle stick around. we're looking ahead to this italian auction as well. see what we get on that. let's look at the other stories. german unemployment up for the third month in a row in june. it is up from 2.87 in may. it's the first sign germany might be getting impacted. >> absolutely. strada is' merging.

they will come back and reignite the deal. >> if they think they will get a better deal down the road they will wait until then. >> barclays has agreed to pay $450 million to settle claims. george osborn will make a statement at the house 12:00 london time about the report. and there are many others under investigation. >> 16 banks, something like that. this could have tons of litigation. jpmorgan's trading loss could be as much as $9 billion. four times higher than the bank's initial estimate. jaime dimon talked about that loss making position. >> yeah. our estimate, what the analysts put in their estimates, 9 billion if that's true or not. >> the risk is something in that range. the real question is ultimately what hit does this mean for the

bang's second quarter profit. let's take a look on what's on the agenda. key economic data. 8:30 atm latest jobless claims report is due. also at 8:00 a fresh revision to first quarter of gdp. at 1:00 p.m. eastern the u.s. treasury will auction off seven year notes. on the earnings front we get reports from family dollar and after the "closing bell" results from blackberry maker research in mocks, one to watch. and nike. >> billionaire warren buffett joined force with bone jon jovi at a charity effect in new york. bon jovi joked buffet would live the musician's lifestyle hearing these girls yelling. >> i hardly think bon jovi is that much more advantage than oracle from omaha.

>> really? all the economic students you studied with. >> they are groupies. they are buffet groupies. >> i want to hear buffet sing. >> pour some sugar on you. ♪ ♪ that's the glory of love ♪ love a little ♪ cry a little ♪ let the cloud roll by a little ♪ ♪ that's the story of and kept turning the page, this is the next chapter for the rx and lexus. this is the pursuit of perfection.

>> ten erbond auction yields 6.19%, 6.03 at the end of may. highest since december, the five year bond auction yield 5.84%, it was 5.66 at the end of may. they raised 5.42 billion, the target was 5.5 bond auction and bid to covers on the five year 1.54 versus 1.53 previously and ten year cover 1.28 versus 1.4. perhaps at this point. bill blaine is with us. your reaction to the italian auction. >> a couple of takeaways. bond boards that focus in on that ten year which is around the same level we saw when the first literal rescue-package was

launched last december that's not a good thing. that bid to cover, 1.28 and the fact they got less than 3 billion done, that's not a great thing. otherwise i would clarify these option results as pretty much in line with expectations. >> who is buying? who is buying? we've heard a lot about spanish banks buying spain? >> this is largely italian banks buying italy. what we've seen in all the problem bond markets is what we call now the repatriation spiral where it starts off with international investors starting to get a little bit worried, decide to lighten up. the domestic investors see the bonds cheaper because as soon as you lose part of your demand the price is bound to move. so they start buying more and more. people see the yields we manger low so you see continuing selloffs by international holders. domestic holders thinking my own

domestic bond market that i one best looks cheap so they buy more and more. you end up with a leslie quid market which, again, encourages yet more international selling. now what's worrying me most just now is that has already happened in spain, clearly happened in italy and beginning now i think to happen in france as well. >> if all your banks are buying your debt and you bail out your banks that's debt mutualization. >> all the banks are exposed domestically. morgan stanley summed this up wonderfully yesterday. the balkanization of european banking. classic. >> also a problem too, right, because this is what makes this simplify rent so intertwined with the banking system. the banks are big holders of the bond it undermines the strength of the banks and feedback

through in terms of the sovereigns. you get into this vicious cycle that's being created. so while it may be good to have more debt owned domestically the truth of the matter is it's really feeding in to the problem. >> it's worse than that. there is a chronic co-dependency between sovereigns and banks. now the banks are discovering not only that they are subordinated to the central bank because of course the ecb buy, they then become more deeply subordinated. that affects as well. >> that's going to be one issue to watch this weekend. >> exactly. in some ways i think it's better to do nothing and not make these unintended consequences worse. sometimes stepping back, letting the market find a certain level will be better. >> bill, thanks for that. michelle sticks around. let's recap the headlines. >> if you're just joining us european markets treading water ahead of a crucial meeting of european leaders in brussels.

fate of obama's key health overhaul is set to be decided today. jpmorgan's trading loss could total $9 billion according to source at the "new york times". careful, pringles are bursting with more flavor.

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exchange". let's check in on u.s. futures ahead of the open there. we're still in the red and significantly so. dow jones down by 69 points. s&p 500 seven points. nasdaq 12 or 13. oil prices have risen slightly from their recent loss. brent crude rallied to $93 a barrel while u.s. crude is up just over $80 this after positive data from states and cut in oil supply due to a strike in norway. is this is start of a neutrally. joining us now is head of commodity strategy. harry, oil prices? >> reporter: oil prices just like a number of other risky assets are treading water. we're going in with low expectations. i don't think we risk being disappointed. as you i don't see the oil price moving much lower from where it is now.

i think we found a bottom and we're now balancing whatever happens in the eu with positive upside risks to oil in the second half the year. >> what are the positive upside risks? >> reporter: certainly, as of first of july we have full implementation of eu embargo on iranian oil. it's not just stopping the importing of iranian oil but lack of insurance for cargo to ship this oil. clearly the more iranian oil that comes under embargo by the eu or asian countries such as japan, korean, india wanting to avoid u.s. sanctions the more oil that comes under embargo the lower the sphere of production we'll have. that's supportive for prices in general. >> you know in the states we're so focused on the shale revolution and the impact that that will mean in terms of energy costs coming down. what do you think this big decline in oil prices has been

about? is it just, you know, worsening global outlook or is there something more under lying structurally things are changing that may keep actually some downward pressure on oil prices even away from the global situation? >> reporter: i think, you know, in terms of oil coming from shale that still in its infancy. clearly it has the potential of shaping energy trends five years from now and reducing u.s. import dependency. a lot of the correction we had since early may is due to risk aversion and that's reflected in the strength of the u.s. dollar that's way down on commodity prices and lower treasury yields. when you look at the price of oil and its correction a lot to do with risk aversion and right now that risk aversion is being put on hold while waiting for the outcome of this eu meeting but nonetheless i come back to the fundamental of the oil market. we're going to have stronger growth in the second half the year as china stimulates its economy and we'll have to live

with lower spare capacity production. that kbags is good enough to push prices higher and recover above 90 for wti and above 100 for brent. >> harry, thanks for that. we're going to break. quick reaction on the italian bond auction. yields high for the ten year but on the whole the market reaction not too bad. a little bit lower on those yields on the ten year and italian market. we'll be back with just a bit more in a few minutes.

welcome welcome to "worldwide exchange". if you're just joining the program i'm kelly evans. >> i'm ross westgate. >> jpmorgan's trading loss could total $9 billion according to sources at the "new york times". four times as much as the bank originally estimated. >> european stocks trading ahead of crucial meeting of leaders in brussels. italian yields climb to the highest in six months. >> fate of obama as key health overhaul is set to be decided today. supreme court pass down its vote whether the new rules are constitutional.

hello. welcome back to the program. good morning toni u.s. viewers who may just be joining us. dow jones trial is average still pointed lower for the morning now by about 6 points. trimming its losses a bit. nasdaq pointed lower by 11 or 12 points. some story for the s&p 500 marginally negative. take a look what's been happening across the globe. really this drop in the last hour. that's weighing on sentiment now. this comes with the ftse cnbc global 300 trading down .1%. maybe something to do with a muted italian bond auction. footprint so 100 down by .75%. revised gdp figures shows going back uk growth hasn't been as strong as perceived raising questions what may happen.

xetra dax down. and cac down. ibex 35 trying to hang on. it's up 0.07%. ten year yields have climbed above 7% you have to wonder if that positive sentiment can last. >> meanwhile we've already had a number of guests on cnbc this morning talking about what investors need to focus on. here's a recap. >> one of the issues that people need to be mindful of is great potential in our view of further weakening of the egyptian house. if you take a position on public markets and expect short term gain you'll also potentially see a weakening of the egyptian pound. >> got to shift a very basic investment strategy. first thing to do is buy assets.

>> i would say if we have the economic growth that's generally slowing i would avoid more sensitive economic crops like cotton but would go definitely into crops that are feed crops like soy, corn which is driven up by this protein consumption growth i was mentioning. some of the thoughts already this morning. we've been taking a lot of reaction earlier in the show of the libor investigation of barclays. george osborn will be giving a statement to the house. >> this is fun to watch. >> in about an hour and a quarter. >> this isn't just a story about these interbank lending rates it's also a story about barclays role and london's role at the center of all this, the bba's role. >> not just barclays. >> yp morgan's trading loss.

it could be much higher than initially estimated at least according to the "new york times" speaking with sources says the bank's loss could total as much as $9 billion and that figure is more than four times higher than jpmorgan's initial estimate of loss of $2 billion. take a look at how jpmorgan shares are trading. they are down 3% from earlier this morning. frankfurt markets down. newscorp board of directors unanimously approved a plan to split the media conglomerate into two pieces. under the new plan one company will house entertainment businesses like 20th century fox, the other will house the publishing assets. those of course include the "wall street journal," my former employer. the entire process is expected to take about a year and the board must give final approval to the detailed plan.

we can speak with the media analyst for more on this. alex, i would imagine you want to be in the 90%, you want to be in the arm of newscorp that makes 90% of the profit not the 10% that the publishing business represents. >> that's where the margin is, the prospects. publish is a less clear cut path going forward. >> what's going to happen with that division then? >> a lot of this wrapped up with what goes on with the on going investigation into news international. it's hard to say what happens. >> you think this is as much driven rather than realizing value of the company, much driven by a desire to distance itself from it's uk print audiotape sets. >> value number one, second objective. >> is it going to work? >> yes. you can see that the board has more or less approved the process. the process will take some time. let be year -- >> will it work in distancing

murdoch from the print? >> yes. he's physically moved back to new york. the assets are more distant by the day. i'm on record he won't have any involvement. >> shareholders may like this. we've seen newscorp shares rally. viacom is in positive. what does it mean for the business model? >> i don't think they will be turning over owners. the "wall street journal" probably has different prospects because it has more of a clear cut payroll model. most investors would rather have exposure to entertainment. >> what happens to many of those print titles? let's face it for murdoch he did support the press and the "times" in the uk is a good example if it wasn't subcy diub.

>> you wouldn't need to put a dividend on the growth stocks because it's all about growth. i want would enable two, three years down the line to come back. >> how does it impact other companies in the sector? >> i think all conglomerates are up for grabs. we saw last year mcgraw-hill, standard & poor is breaking itself up. others will follow. >> you mentioned bskyb. you think the long term area, the bid for them trying to buy bskyb. this will enable home to come back and get their asset. >> that's right. assuming all the investigations show no serious wrongdoing, yes. you're distancing the current management and distancing the audit trails. >> that could have a significant impact on the uk media landscape. >> the regulator in the uk here

isn't that silly. time heals all wouldn't. >> who end up owning the british titles? >> newspaper titles. >> they have them in a separate company. is somebody else coming into the snap up those titles will we see a sea change of ownership. >> absolutely. the assets will be held in vehicles. >> what about the "wall street journal"? >> that's different because that has more of a clear cut business strategy. probably quite dear to newscorp's spirit. so i would differentiate wall street from "times" and "the sun." the uk is selling their property assets. this was announced yesterday. >> what does it do "wall street journal" tv. >> the news hub. in guess the news hub to the competent it's successful helps protect the "wall street journal" brand. >> alex, thank you.

>> michelle stays with us. meanwhile a historic united states supreme court decision is due later that will decide the fate of president obama's health care reforms. the decision expected to come shortly after 10:00 a.m. eastern. we'll answer the question as to whether or not congress could require americans to carry health insurance or pay a penalty for not being insured. michelle, on this point about obamacare, such a political issue, you know what are the economic implications? >> i think from a perception standpoint requiring small businesses to provide health care was seen as burdensome if this was to be overturned the perception would be on the margin. good thing for small business. you know, companies in the u.s. are facing so much more uncertainty around the fiscal policy outlook for taxes and for spending. i'm not sure that, you know, even if this were to be overturned it would be a green light for small business and put them in a much more positive, you know, situation going

forward because, again, we're still dealing with so much of the uncertainty around a lot of other fiscal designates that need to be made. >> there are also just broadly speaking concerns about how much health care is weighing on the u.s. debt, how much it's weighing on our notal share of government spending, how much it's crowding out other type of consumer spending. >> we've seen spending on medical care, medical care services coming down so that's kind of a little bit of an interesting development. of course more of the burden is being pushed on to consumers as opposed to, you know, businesses. but even in terms of speaking about the share of spending that we're seeing in the government sector on entitlement spending like health care, i mean that's exactly the point. when we talk about the designates that have to be made at the end of this year in terms of spending and deficit reduction, you've done all you can do in terms of cutting spend ago way from entitlements.

you need to crack that nut. >> there's sort of a depression about the upcoming fiscal cliff. i wonder and you wrote about this, could 2013 be much better than anybody thinks it might be. >> we're all worried about down side growth risk and the prospects for a version in 2013. but, again, we're at a very defining moment here. certainly in the eurozone the intensification of the crisis. if we can move past that. in the u.s. if policymakers recognize the responsibilities that needed to be made and actually were able to come up with some kind of the so-called grand bargain, to remove the uncertainty over tax rates and spending cuts, we would have, the u.s. economy in a position to really, i think, grow for the first time unshackled by the uncertainties that plagued us ever since the recession began. we lived with the tax rates going up and uncertainty what would happen on the policy front.

we could get that resolved if congress could come together under an administration or in the wake of the election with that issue decided. we could actually set ourselves up for 2013 having these uncertainties both domestic and globally removed and it just feels like the situation -- >> that would be nice. >> everything has come to a head. needs to be decided. >> you don't know. i don't know it will happen. >> something to keep in mind among all the pessimism. >> we'll leave it on that note. take a short break. still to come stocks keeping an eye on europe ahead of another crucial summit. that was in italics. we'll head out to brussels in a moment.

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zagat just gave hertz its top rating in 15 categories, including best overall car rental. so elevate your next car rental experience with the best. it's just another way you'll be traveling at the speed of hertz. welcome back to welcome back to the program. a quick check of the headlines. jpmorgan's trading loss could total $9 billion. this according to source at the "new york times". european markets treading water, moving quite a bit lower ahead of a crucial meeting of european leaders in bruise sells. fate of obama's key health overhaul is set to be decided you later today.

ahead of the summit today, angela merkel the german leader said she has no illusions that eyes of the sworld on germany. she's refusing to budge on the idea of euro bonds unless the eurozone gets creating oversight of national budgets. after speaking with france's hold, merkel said she will use the brussels gathering to push for greater integration. >> translator:e need more europe. we need a europe which functions. that's what the markets are expecting. we need a europe where its members help each other. >> mario monti said they need to have some action or it will be a disaster if europe -- silvia is out in brussels. we have two football matches. germany and italy tonight. and germany, italy and spain today in bruise sells.

where we going to end up at the end of this summit? what, if anything, will have been agreed? >> reporter: well let's put it that way in terms of the results the market can trade on not an awful lot coming out not the least of all because angela merkel is halfway through the first leg of the summit is bringing it back to berlin where she has a crucial dare i say the same word vote in two houses of parliament where in fact the germans have to wade through, have to approve the legislation for the fiscal pact and important the esm, which will go through for all intents and purposes but after that there are works because the federal president has been asked by the constitutional court no not sign it until the constitutional court decides whether this is in breach of the constitution. this tells you how complicated europe is. what outcome can there be if at

all they can agree on two little thing, one of course which essentially already agreed on gang of four meeting in rome the other week where they said okay we need a growth pack. 130 billion was the price tag. that they can agree on formally. the other thing they could agree on but there's a question mark over it how exactly we're going shape this european banking union and european banging supervision. that is something the markets would be interested in. let's wait and see. >> all right. silvia thanks very much for that. german unemployment up for the third mine row. standing at 2.88 million up from 2.87 in may. >> unemployment rate a little bit higher as well. estrata bowing to pressures from its measure with glencorp.

>> barclays has agreed to pay $550 though authorities to settle claims. this is the tip of the iceberg. >> an iceberg that can touch on everybody from london to other banks that may have been involved to u.s. regulation to derivatives. >> george osborn making a statement at 12:15 london time. >> jpmorgan's trading loss could be as much as $9 billion acco according to the "new york times". four times higher than the initial estimate. still to come on the show we'll get a preview of the trading day on wall street. blackberry research in motion is a company set to report results. much more on that ahead next.

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right. right. just quick word from the british prime minister about barclays management. he said it's got serious questions to answer after the libor. barclays has 550 million equivalent after admitting to falsely setting libor rates. >> we'll hear from george osborn later. in the meantime let's take a look at how the u.s. is looking ahead of today's open and here's what's on the agenda in the united states. at 8:30 a.m. latest read on jobless claims. we'll get a final revision to first quarter of gross domestic product. we'll see if that follows the figures here at ub. at 1:00 p.m. u.s. treasury will auction off seven year notices. family $, after the close results from blackberry maker research in motion and nike.

here's how u.s. futures are looking. still pointed lower. moving morton the down side now dow would be opening lower by 80 points. nasdaq and s&p pointed down as well. joining us more, rich nash, equity portfolio manager at the westfield group. is this people taking risk off ahead of this eurozone meeting? >> certainly there are other factors at play. the supreme court is expected to make their decision at 10:00 this morning. we have had a pretty nice run up here over the last couple of trading days. >> what do you expect or what your telling clients to do to position around these key political events? >> politics is certainly trying the markets, but we try to guide clients to focus more on the economic fundamentals that continue to at least in this month deteriorate but we think as the year progresses we're seeing, you know, some strength in the housing market. we're seeing commodity prices

come down and we're seeing, you know, governments and central banks around the globe continue to promote a stimulative policy. rich, the volatility here is so extreme. how do you hedge that risk out? >> well, we continue to focus on income producing assets much like a lot of folks but right now we continue to favor dividend paying stocks with about 60% of the stocks of the s&p 500 paying a yield more than the ten year treasury and about 30% paying more than the 30 year treasury. we continue to like to hedge that risk with some income producing assets. >> rich, you're in cleveland. what conditions do you see on the ground there? to you see strength? what are your clients saying? >> well, i mean from our corporate standpoint some of the

corporations particularly in the industrial sector continue to do fairly well, but there's a lot of nervousness out there. we kind of have seen this story before where in 2010, 2011, the markets start the year off strong, stall mid-year and then kind of need a boost from the federal reserve to get things going again in the fourth quarter so there's some cautious optimism. >> at what point do you then start to add risk. how do you sort of tell when we've gone through the correction phase and started to enter a more constructive period? >> well, you know, we would like to see some of the leading indicators on the economy start perking up one today being the employment numbers at 8:30 as well as some of the manufacturing numbers, some of the leading indicators of the economy are what we're watching to determine when i want to put more risk on the table. >> yeah. what's the most important piece of data for you, rich? >> the most important piece of

data today would probably be the jobless claims number at 8:30. we would like to see that number gravitate back down towards the 350 level from the 380ish level that it's hit right now. >> rich nash from cleveland, wekt portfolio manager from the westfield group. watch those jobless claim numbers. >> i love them. they are weekly. they are revised but not hugely they often give you a sense of what's happening in the economy right away. can't ask for more. >> no. i love it. that's great. that's just about it for today's edition of "worldwide exchange". plenty more coming up with joe, becky, andrew and the team on the box. silvia will be out there in brussels all day. >> we'll be back here tomorrow. we'll see what news if any we get out of the eurozone meeting tonight.

good morning. eu leaders meeting in brussels and more openly divided than ever before. the supreme court set to rule on health care today should be game day and we could get that decision impacting everything from hm o's to hospitals to say nothing of the presidential election plus we got two huge corporate stories, newscorp operation set to split itself in half, meantime a new report out that mounting losses at jpmorgan could be worth $9 billion. it's thursday, june 28, 2012. "squawk box" begins right now. >> good morning, everybody. welcome to box here on