edition of worldwide exchange." i'm ross westgate. >> i'm kelly evans. these are your headlines from around the world. >> risk is back on, stocks rally for a third consecutive session as the anticipation of coordinated action by major central banks fuel sentiments. >> spanish economy contracts 0.4% in the second quarter. there's a surprise 2.2% jump in inflation. >> hsbc is to post a jump. >> u.s. investors are looking ahead to a busy week.

okay. so welcome to the first trading day of the week. we're weighted to the upside one hour in the trading session for europe. after of course big rallies on the last few trading sessions of last week. the ftse 100 down half percent last week but up 2% the last three trading days. up 4.68% in the last three trading days. ftse 100 up. dax up two-thirds. the ibex today up another 1.75%. italy has got an auction out this morning. the auction focusing on -- i was going to show you three. but we got five and ten years very much in auction as well.

5.97% is where the ten year is trading. auction last month, the yield was 6.19%, lower today. the italian five year trading 5.28 at auction last month they hit 5 policy 84. auctioning up to 5.5 billion. yields in spain remain at 6.649%. hundred basis points lower. ten year bunds up to 1.4%. treasuries hit a record low. big week with the fed and employment report and of course the ecb, bank of england as well. currency markets, euro dollar hit a thee week high, 1.2390. 1.2285 at the moment. the low last week was 1.2040.

aussie dollar 1.0471. tracey has the update for us on was happening in asia. >> asian markets are mostly higher today. eurozone optimism. but still, shanghai composite underperformed. shanghai stock is speeding up to deter speck layings. hong kong index started higher gaining more than 1.6%. and on very positive earnings outlook that pending fight over the money laundering scandal still lie limited further upside. nikkei firm. several strong earnings report

also outawayed sluggish factory data to push index to one week high. investors are not buying with a lot of conviction until they see ecb take some concrete action. india's sensex is fair gains at the moment up 1.5%. >> that's kicked us off for the start of the week. i can't remember the last time we had fed and employment report in the same week. >> big week. ecb meeting at the same time. >> expectations are high. you have the market pressing in secondary purchases on the bond market of some of this peripheral debt. if it doesn't happen what does. we've seen relief in the bond yields but they have not come down to sustainable levels. >> talking spain?

>> talking spain. spanish gdp came in line with forecast contracting, unfortunately, by 0.4% for the spanish economy in the second quarter. spain's economy has contracted by a full percentage point. julia chatterley has moved to madrid for us. despite coming in as expected, what does the figure really mean in terms of the deepening hole that spain is in? >> reporter: well we know the economy is very weak and likely to deteriorate in the second half. the imf reduced their growth estimate which is in line with other analysts. if you drill down to the details, domestic demand fell 3.2% in the quarter. that was significantly worse than the 3.28%. also the benefit that what we've seen exports have tended to support that and we saw that

again in this quarter. can that continue into the second half of this year given the weakness we're seeing elsewhere across the eurozone and of course for this economy the austerity measures we saw implemented are really going to kick in. that's the question. of course it comes at a time when the media hit says this is a critical week for pain to avoid a full blown bailout. the main date has been that the country would need a limited bailout for the financial sector and that would not come with additional commonality. so if we saw purchases that would undermine that. we also saw support is declining here. 8% of the respondents in this poll suggested they were unhappy with the prime minister's handling of this crisis. i noticed the sentiment change in the last two months, concern just about how he's approaching this crisis right now.

back to you. >> julia, thanks for that. eurozone leaders will decide what action to take. the ecb would work with the eurozone bailout funding order to quote see results. >> angela merkel and monti have pledged to do everything they can to save the euro. in an interview with robert zoellick he said he believes merkel will do everything to save the euro. >> these are people committed to europe. when they say they will do what it takes to support europe i believe them. their room for maneuver has shrunk in part because of the constitutional court, the german

court which delayed a decision on one of the mechanisms, the esm and that's why draghi had to step in to assure the financing to that point or at least suggest he would. >> joining us now is chief investment advisor for asia. andrew, thanks for being with us this morning on such a big week. looking ahead to that ecb meeting on thursday have markets run ahead of them or are expectations too high? >> quite possibly because i think it is unlikely they are going to cut interest rates at this stage having cut them already twice. and also it is very unlikely that they are going to have a bond purchasing scheme announced although draghi said he did a clint eastwood, go ahead, make my day. but i can imagine that potential schemes could be laid out although given the european

stabilization mechanism, banking license -- the ecb doesn't license money but the scheme does. so i suspect we might get more talk about potential additional increases of liquidity. ltro could be one way. the last one was dedicated to buying government bond. ecb didn't buy the banks to which give the money did. so that's another way to wiggle awrong. you're right. possibly there's a little bit of too much high expectations because ecb moves very slowly and so does the european union. >> what happens if we're disappointed? i can't see the merit of another ltro because the last one failed in the sense that all those banks who used that money to buy those bonds are heavily under water on them. >> well, one other way of doing

that is to utilize potential this as refunding of whatever else they have. so, yes, they are under water. no, they cannot sell them. but additional liquidity would allow them, for example to either sit on sums of money that they could use to wipe out any particular losses they may have. they borrow the money and do nothing. i'm exaggerating here. i don't know any other bankers who don't know what to do with additional liquidity. >> andrew "today" with us. we'll be back with more from you throughout the hour. >> ecb numbers are coming out. earnings expected to be over 12 billion. what will they set aside for u.s. money laund, and potential libor investigation. >> that report should be out in four or five minutes time. om#a#a39#a

. welcome back to the program. well the uk government is launching an independent review of the libor andal. which will also submit proposals for how the setting of the rate could be improved to avoid

manipulation in the future. uk finance minister has enlisted the fsa's martin wheelie to compile the report. the results of the review are expected to be released at the end of september with recommendations whether market abuse is relating to rates should lead to criminal sanctions. british bank rbs is readying for punishment over its role in the libor scandal. in an interview, they acknowledged the bank was expecting to face its day in the spotlight. take a look at the impact that's having on rbs shares. still up 1.4% so far this morning, up 6% over the past week. meanwhile in about 30 seconds we'll get the latest numbers out of hsbc. the first quarter, the profit 6.8 billion we expect it well over 12 billion for this first half. but will the numbers play second fiddle to what the bank may have

to set aside or talk about setting aside more u.s. money laundering scandal. the interest rate swap misselling and whether or how they might be dragged into any investigation into libor as well. at the same time the chief executive is midway through a deep overall to cost to shrink businesses. we're looking for loan growth in hong kong and asia and gaining market shares. let's bring you exactly what hsbc is saying this morning. the first half operating profit 10.89 billion, the first half pre-tax profit 12.74 is what we've got this morning. that is the sort of figures we're looking at. earnings per share 45 cents as well and uk -- every time i click on something i come up with the wrong -- it's jumping

around. uk customer provisions for uk customers $1.3 billion. provisions for law enforcement matches the u.s. around .7 billion. u.s. provisions for law enforcement and uk customer addressed provisions of 1.3. 2 billion in provisions already. >> huge number. that's a huge number. >> and global banking markets before tax of the u.s. investment bank 5 billion, up 5% compared to first half of 2000 which might be better than we might have thought. >> share reaction moving slightly higher not a huge reaction but up 0.82%. hsbc shares are moving higher before that report. those numbers out even despite showing pretty big provisions for u.s. and uk law enforcement action or prospects thereof.

>> let's get some reaction. welcome to you both. paul, first of all, your reaction to the numbers, the first half, the uk pre-tax profit over 12 billion but then 2 billion in provisions. >> hsbc is wonderfully well provisioned particularly on the u.s. side of its business, that provision over the next few years on run the out of their hfc business around 2%. there's feeling there could be quite a bit of upside surprise as those provisions are not required. this is a bank that's strong enough to be able to accommodate those positions in the airily stages. these pretax numbers reflect the fact it was a soft second quarter and i suspect that's driven more by the investment banking side. >> investors had a second to look through the results. while we were marginally up we're now lower.

you can see that decisive move lower. >> suspect at the moment this will take a couple of hours to digest not a couple of second. so much going on within hsbc at the moment. the key is about the provisioning, the level of provisioning and not necessarily talk about provisioning for scandals or libor concern. i'm talking about provisions on their loan book. hsbc has been in front of the curve and analysts are looking for potentially in '13 and '4 some upside surprise. the income cost ratio, the grand plan of hsbc is to bring that to a level of 52%. without seeing the numbers my suspicion is -- >> i'm looking for that. 11.3%. from what you've heard at the moment and we're getting more information what are your thoughts? >> well, i mean similarly, we were expecting hsbc to come in

at approximately $12.5 billion. i think that's on the liberal side. so as the person said earlier they may not need that much. they have been very astute when it comes to capital adequacy. remarkably good with nonperforming loans. hsbc surprised the market and plowed back in the next quarter some of the provisioning. >> let's be clear, the 2 billion in total includes for u.s. law enforcement and misselling in the uk of insurance, we have loan impairment charges and other credit risk provision, that is 4.8 billion dollars. 4.8. >> now, the provisioning aside,

that's the one. bad loans, nonperforming loans, their income ratio is an ongoing battle. that aside purely from the legalities, the ticker that you're monitoring for hsbc, anything that you see, you know, that feels a little jittery that's predominantly just the negative news that they've had to put that much in provisioning. i don't think they will dive that deep into their pockets. the npls will continue to be -- each bank continues to be dogged. hsbc will see a decent upsize, upside to its earnings and i think that's going to go well with some of the long term punters there. >> we can see to your point cyrus hsbc shares up, down now turning back up. markets clearly trying to get exactly the signal here and, you know, paul may have something to do with the fact these numbers

came in close to expected. trying to figure out what the swing factor is going to be is tricky. >> the thing with hsbc in terms of where the surprise comes from this stock trades like a bond. yield is 5.8%. in terms of the movement in the numbers, the key metrics are costing income ratio, how are they getting on top of that. it could be a number as high as 56, 57%. we got to see that down 52%. investment banking may have been down 20% during the quarter. you hold your cost on these businesses through cyclical downturn. but if it lasts for another quarter then should further action be taken on global markets. >> we've seen evidence of that. in your opinion, how does hsbc square up in this kind of environment against competitors

with negative press that it's had lately? >> i think it's a business -- you got to take your lead from what's going on in u.s. and the japan. you've seen the headlines of further job loss coming through, nomura recently that was front page news and also in the u.s. banking side of the business. hsbc has always been sub scale as a global market operator, it target its nitches. if it achieves the 52% the investment banking side of the business which will be the swing factor and where big decisions have to be taken if we don't the cyclical bounce back. >> we'll keep an eye on those figures. >> also just pointing out as well they have been named as defendants in a private u.s. lawsuit related to libor setting as well as libor as well. so, there's a lot coming out here related to that sort of

stuff. but we'll get to it. stock down on the session only half of a percent. thank you both. don't forget we'll get more on this reaction in 15 minutes of time. we'll have more detail. we haven't got that cost income ratio that paul was talking about. as soon as we receive that i'll tell you about that as well. you may notice the olympics is under way, gold medal in the woman's cycling road race. despite this netherlands went for the gold and dutch team set the standard fairly early. she managed to take the gold asaed of lizzy armitstead. >> what is out theed as the most exciting race, the men's free

style relay promised an encounter. nathan andrew an handed over to michaels pills, the u.s. had a expanding lead. lochte held the lead but then a search by the frenchmen. last 15 meters gave france an unexpected gold medal. >> that was a fantastic race. also despite taking home the gold medal, britain's didn't go into the 400 meter. camille sms muffat took gold. the other amazing thing was chinese -- >> but quickly, the fact that

these times are getting better even after these swimsuits were banned in 2009 shows you the level of competition. this chinese swimmer. >> she took gold. set a new world record in 400 meters immediately. her closing 50 meters was faster than lochte. >> which is incredible. >> the men took gold in the same event. >> can't believe that. >> first time it's ever happened. almost unthinkable. >> it really is. she's getting tons of press coverage for it understandably. we're looking ahead to another full day of olympics action. >> on the equestrian front, the cross country takes place in london's greenwich park. >> and dressage. i found the dressage component of the three day event. >> there's also the final of the men's team gymnasts to keep an

eye on. well guilty by association, basically sums up why two chinese companies finished the trading session deep in the red. we have details from hong kong. >> reporter: allegations of insider trading sent sarasota in hong kong listed ship builder into a tailspin hitting an all-time record low. property shares get knocked. this comes after the securities and exchange commission filed a complaint against the two companies chairman and also had a court order to freeze his assets. he was said to have profited on privileged information linked to $15.1 takeover billion. he with other traders made more than $1 million trading the news. barclays says the news surrounding the chairman comes on the back of operational and credibility issues and believes he presents significant company

specific risk and not helping the share price either, it was said on monday first half earnings would fall sharply as a result of the ship building downturn. back to you. okay. still to come on the program, u.s. treasury technical tim geithner heads to germany to offer his take on the crisis. will his advice fall on deaf ears?

and these are the headlines from around the world. hsbc says it will take concrete steps to resolve the libor scandal. >> risk is back on. stocks rally for a third consecutive session as the anticipation of coordinated action by the world's major central banks fuel sentiment. >> spanish economy contracts.4% along with forecasts. there's a surprise 2.2% jump in inflation. >> watching and waiting u.s. investors are looking ahead to a busy week topped by the two day fed meeting and friday's jobs report. we have some data out of the uk this morning. we got lending june net consumer lending, just up 300 million

versus may's 100 million. sterling down session low against the dollar. net mortgage lending contracting 400 million versus may's increase of 300 million. mortgage approvals 44,192 in june versus may's 50,000. weakest since december 2010 as well. consumer credit 600 million versus may's 800 million. that's pretty much what it was, forecast to be weaker. that was the only thing that surprised on the upside right now. sterling is weakening on that. kathleen, quick word about the pound at the moment. out of all the central banks we're not going to get anything from the boe this week? >> i think that's pretty much

consensus. we do fall into that camp. obviously we do expect them to wait and see before they do any other action bath the figures were so cloudy. now, the impact that has on selling, selling is pretty much no correlation. whatever the bank of england does. it moves overall with risk appetite. the eurozone crisis is getting worse. >> the total net lending on the fls measure, which we're now booking at because the boe has this lend to long scheme 93 million. >> i guess the big criticism with that is there actually demand for this kind of lending to funding program. we're in a deleveraging cycle. that means people don't want to lever up, they don't want to buy debt. whether or not that boosts the economy we have to wait and see. >> andrew, we want your thoughts. kathleen was just mentioning deleveraging. if there's no demands for loan out there how much more can you do on the supply side?

>> classic conundrum of all central banks. bank of england cutting their interest rates doesn't. central banks do the lending themselves. they go out and force feed the markets. they make them offers they can't refuse to the extent they will buy up paper or vary directly or sometimes indirectly buy up government papers and the major buyers are the governments. so there's no absence of demand from that side. >> that's true. >> most central bank has been directed. >> isn't this an argument in some way kind of for the old fiscal stimulus, writing people checks and handing them out and if you want demand do you have to give people money directly? >> yeah. it has been an issue of some

embarrassment of spreading it out. i'm not the first one saying that. the fed lend obama money, end of story. obama spend it in health care, defense or whatever it is. ditto for the ecb in their last efforts and the bank of england repeated efforts including the last one, 50 billion or something additional buying of bonds in the market. now some of it involves corporate bond, some involves mortgage backs but the majority of it is government bond. bank of japan hasn't done anywhere near as much proportionally as the ecb or the fed. the answer is yes. yes, it is a form of expansionary fiscal policy via the central bank lending the money. >> kathleen, just a word how you trade euro/dollar. we hit that low last week and a three week high on friday. with the fed, the jobs and the

ecb, do people take cautious positions? >> we'll see a little bit of profit taking as we lead up to the fed meeting. we have tons of events not just that but we have headline risk. we got everything going on this week. going to be trickey to trade euro/dollar for sure. it's a major resistance level. if we can get above that that would open the way to the 1.25 mark which pushes forward. we need to hear from the central banks. >> kathleen and andrew will stay with us for more. hsbc has posted pre-tax profit of $12.7 billion in the first half the year. the results were overshadowed by a number of scandals. in the results released the bank apologized for past mistakes in

relation to money laundering and hsbc confirmed it's been named as a defendant in private u.s. lawsuits relating to libor as well as libor. the bank assured investors it will take concrete steps to resolve the libor issues especially those regard tugs. let's look where the stock is trading. it's been fighting for direction ever since the release of those results about 20 minutes ago. we're now seeing shares up about .6 to the upside. chris, what do you think explains the positive reaction at this point? >> reporter: good morning. positive reaction. they are underperforming the bank sector as a whole. i think it sort of does deal with the push me pull you. you mentioned the opening of the session the numbers aren't great in term of the fact there was about 2 billion of additional charges put in there, 1.3 of which we only see 400 million in

the uk and 700 million has been put aside for issues with mexico. so, we've seen that push back. on the other hand, the asian businesses, 85% of the underlying profits performed well and the impairment on the bad debt charges came down 9% and the cost-cutting measures continue. a mixed bag as always. >> chris, what divisions in particular seem to be areas of strength in which our areas of weakness and concern for them >> the bank bangs on about their dna being commercial banking. no doubt. it's up 6% open global banking, their investment bank which is quite closely linked to commercial banking is not something that looks similar to barclays or jpmorgan. that's up as well 5% on half year and half year. where they are doing a lot of work they sold 36 businesses or

got out of 36 locations since last may or may of 2011. that's where most of the work is being done. these numbers include 4.3 billion gain on a number of d dispo disposeals. >> do these targets need to come down? >> you know, underlying on the return on equity they are looking for 12 to 15. can they get there? of course they can at some stage. they are doing a lot of work. they need better markets and someone was asking me this morning about barclays 13% target can they make it? i said yes. bob diamond before he left already pushed it out beyond 2013 to sometime beyond that. they are a slave to the market. they have low in their targets and keep coming up with even

weaker economic outlooks. >> getting cost down to below 52% of revenues. chris how tough is that? >> well, i think they are doing a good job there. the cfo has been doing things rather carefully. they have 800 million of savings under their belt. they are simplifying the way they operate. the problem is we have loads of confusion about numbers because of the rundown in the u.s. business, kind of gains of dispodi dispo disposeals we have. 80% of the earnings are coming from those location. u.s. putting nothing in the pot once you split down the items.

>> chris wheeler, thanks so much for calling in. >> tuck government is now publishing terms of reference for the investigation and review of libor reform. they say this will look how libor was constructed, the feasibility of using real trades and governance and also sanctions. make it a criminal offense. >> even as they are criminalizing this activity and sort of going back and looking how it was manipulated, would it move toni real rate it will be more volatile. until applications for the financial system for derivatives and whatnot are extraordinary. >> m4 down 5.2%. that's the sharpest fall since monthly records began in 1983. >> it underscores the degree to which, to kathleen's point earlier this is a deleveraging and in this situation if the monetary expansion isn't enough that's is what will happen.

>> 300 million people were left sweating in the dark after the country's largest ever power failure. 300 million people. we have the details for us live from mumbai. >> reporter: well this is one of the worst blackouts to hit the country in the past decade. primarily affected the northern part of india. the cutoff at 2:32 a.m. on monday and following the breakdown in the entire northern grid. the reason for the failure of the grid is not certain. but the main thing we have is that 60% of the supply has been restored in the northern part of india. services have been restored. remaining 40% will happen in the

next few hours. we've been getting a few comments. they changed the timing for punjab. air conditioning have been banned until power has been restored. back to you. >> and it was another big earnings day in japan. we have more live from tokyo. >> reporter: yes, we saw a lot of first quarter earnings today. among them mitsubishi motors posted a 22% increase in profits, in operating profits. and despite slight fall in sales. the automaker fought the strong end by cutting back exports by 13% from the same period last year mainly to european countries where the euro is weakening and profits are shrinking.

mitsubishi had four year profit outlook after writing off european car plant but operating profit is expected to rise 25% year-on-year. meanwhile nippon steel had an operating loss. nippon steel's exports. domestic sales were sluggic as reconstruction demand in quake hit areas were slow. so the steel maker will not be paying out dividends in september. and investors will have to wait until october for full year projection. that's when it measures with metal industries. back to you. >> now let's take a quick look on what's on the agenda in asia tomorrow. japan will post july household and spending data. honda and mazda will report

april to june quarter earnings. >> timothy geithner met with his counter part this afternoon. they will discuss u.s. and european and global economies. silvia is in frankfurt with the latest. how will this meeting go? i wonder if mr. geithner will ask him if he backs fresh ecb moves, whether he'll give his cooperation? >> reporter: whether they throw sand at each other. they are not meeting in berlin because he is on holiday. timothy geithner has been to poland last year as we remember and received a little bit of a cold shoulder at the time saying come on we don't need nyad vice from you, we know we're in a deep cry s-we're trying to handle it, have a nice day.

it quite won't go like that. what coordinated moves can they possibly put up there. there isn't an awful lot we can do in terms of international coordination. yes we can pump more money, what lines can be extended or expanded whatever it is. at the end of the day, however it will be left to temp cb to buy time until the germans not the least of all find out already their constitutional court even allows them to sign the treaty of the esm treaty as it stands. so there's a lot of things in the works and it doesn't matter how much mr. monti and merkel stand up we do everything to save the euro in brackets but maybe there's a lot of things we can do close brackets. no matter how much money they throw into the euro zone crisis at the end of the day they have to solve the banking and debt problem. >> that's a fair point.

wi let's get back to andrew and kathleen. are we setting ourselves up for a bit of a fall on the ecb hopes? >> probably a chance for a disappointment. the markets are used to disappointment these days. but it's whether or not -- i think it will be a fascinating meeting. you have draghi saying one thing. staking his credibility. on the other hand you have the bund bank -- >> don't know what he said he's going to do other than he said the transmission mechanism is broken that comes under our mandate. he hasn't said anything about what he's going to do. >> you kind of sit there and there's nothing concrete on the table. euro is rallying. one expects it to come off a little bit. he hasn't said he would do anything. he proposed to the market that he would do something. in the past that's been enough. definitely not these days because now spain is involved in the fray.

you're even hearing that the german bank doesn't like what they are hearing. >> i love this, andrew. draghi hasn't actually said, detailed anything he'll do but the bund bank does want him to do the thing that he said he isn't going to do. >> ultimately it's not a matter whether draghi wants something or the bun bank wants something it's a collective decision and i think it would have been a little bit premature if he said he was going to do something and then nothing happens. there are 101 ways of skinning a cat. bottom line they have to find a way in which they will lend money to individual governments, okay. and any institutions that would lend the money through individual banks without appearing so. as i said i can open up a box and suggest 500 different ways. perhaps not 500 but five or six

different ways. >> favored measure? >> my favorite measure is not going to happen ecb stop being hypocritical and buy bonds directly. fed has tone it. this complete nonsense central banks can't create money. each time i don't pay my credit card, personally, and doesn't pay the full 100%, i would create money. people just think it's such a shocking thing that andrew can do it quietly and not pay any attention. ecb can't do it. it's nonsense. the fact it's going to create inflation, come on we're light years away from theory. you create some asset inflation which is precisely what the markets want. it's not going to happen. i'm not here to give advice to

ecb. >> andrew has created a few fans. thank you both very much for your thoughts this morning. still to come, one expert says investors in the country is still solid for china. trade links is up next.

on today's trade links, direct investment to china dropped almost 7% in june. one expert said interest in this market has not evaporated but investors are adopting a more cautious approach. is it affecting investment? >> we're certainly seeing a slow down in the rate in which to deals are done and flow. there's been a reduction. not to say that there's lack of investor confidence in the market. we do see a lot of interest from institutional investors as well as strategic corporate investors who are putting money into the market there. but we do also see there's a

discrepancy between the vendors and purchase expectations on price level, for example and as a result of that we do see that negotiations are taking longer to complete and deals are taking longer to get done. >> we've seen a lot of policy initiatives. is there demand from foreign investors? >> certainly. one thing china has first of all very high savings ratio. and the current government incentive to push for domestic consumption which is one of the ways that government uses as a policy to buffer against the external environment, this domestic consumption is really the engine for growth for a lot of commerciality in the market

there, not the least of which it will generate a lot of demand say on logistics, infrastructure, retail commercial space and these are all areas wherefore rent investors are very, very interested in at the moment. >> you say real estate is an area that you're advising on a number of acquisitions pap lot of people are very worried about the real estate sector. why do you think it's an opportunity rather than a liability? >> okay. i think people are worried about real estate sector on a number of front there to begin with. there's a general consensus that because of the theory of investment activity in the past two years, shopping centers are being overbuilt and there can be an oversupply especially now in two years' time. and on the residential part there is a lot of demand for residential units, at the same time the government is trying very hard to suppress surprises,

especially in the taiwan cities. so there are obstacles. however, having said that there are two factors that work very much in favor of china one of which is, there's a lot of pent up demand and this will continue to be the case for residential units. that's not going to go away. secondly, because of the current tightening of credit in the market and taking steps to ease the interest rate and to improve credit liquidity, it is still very difficult for domestic developers to raise funds principally in the market from local banks. as a result of that a lot of them are looking for foreign investors who are willing to either buy out their projects outright or to co-invest with them as joint venture partners before the time limit for them to complete construction. it create as favorable

environment for foreign investors to go after good quality assets. the chinese government is also getting to appreciate the need for high quality investors who are able to manage first class shopping centers and retail commercial spaces. >> just a reminder about the trade link series. every week we look how the financial crisis is affecting global trade and the impact on how you do business around the world. every monday. for more go to the website. if you've been watching the olympics you might have noticed a few empty seats. despite the troubled londoners have had trying to get themselves tickets and a spoof twitter account has now been made at olympic seat is mocking the reported 12,000 empty seats reported across the venues. how do you think the olympics committee can solve this problem? let us know here on

worldwide@cnbc.com. >> these are credited seats not ticketed seats but accredited seats. that's media and ioc members. >> a lot of foreign olympic -- >> last night the swimming wasn't an all credited event. it was filled to the rafters. >> is volleyball on saturday had a lot of empty seats. >> italy face a test of identities volatile bond market. we'll bring you the results of the ten year auction in just few minutes. don't go anywhere.

hello and welcome to today's edition of worldwide exchange." if you're just joining us i'm kelly evans. >> i'm ross westgate. these are your headlines from around the world. hsbc posted 12.7 billion dollar pretax profit in the first half bust set aside $2 billion to cover uk miss selling and u.s. issues. >> most stocks rally for a third consecutive action. most central banks fueling sentiment. >> spanish economy contracted 4%. a surprise 2.2% jump in inflation. >> watching and waiting u.s. investors are looking ahead to a busy week.

okay. as we head closer to the u.s. trading session let's take a look at how futures are doing this morning. surprising to see the red behind me given the stronger tone. dow jones industrials average is pointed lower by 26 points. nasdaq by four points. the s&p 500 lower by a couple of points for its part as well. again let's take a look at the cnbc global 300 to get a sense of what's been happening across the global. up .1% for the morning. we've come back off of those to some degree. closer look at european boards to see where we're seeing most of the gains and loss. ftse 100 is up almost a third of a percent opinion seeing similar gains. ibex 35 better than 1%, ross, so tinting question will be whether

the stronger kind of risk on knee jerk reaction we're seeing in europe can carry over to the u.s. >> carry over the bond markets as well and suppressing yields. we have italian auction today. three and seven will be auctioned. the key focus will be on the five and the tens. we haven't got the ten. 5.84% was the last in auctions. lower. the ten year yield, 6.017% is where we trade at the moment. last tuesday we hit 6.017%. and 6.19 ist we had in auction last month. should be lower than 6.019%. spanish yields last week spanish ten year hit 7.75%. 100 basis points below that.

so mario draghi talking last thursday pulled that yield down more than hundred basis points. ten year treasury big week for the u.s., fed meeting on the job report. 1.54 is where we stand along with gilt. currency markets, aussie dollar has been trading up fresh four month high. just below that at the moment. euro dollar hit a 20 week high. 1.2268 pretty much in the middle of the band. that's where we stained european trade. tracey has an update on what's happening in asia. >> reporter: good morning to you again. asian markets rose for the most part. shanghai composite showing some weakness. shanghai stock exchange wants to speed up and simplify.

and we did get a report card just a bit earlier, hsbc made 12.7 billion in the first half of 2012. and elsewhere, seoul shares climbed to a four week hi. analysts worn investors aren't buying with a lot of conviction until they see the ecb take concrete action. australian being marked its highest closing since may. lastly india sensex is showing gains up 1.5%. ross, back to you. we had some business confidence picked up a little bit in july but the eurozone

july business climate don't deteriorate minus 1.27. the economic sentiment, if i got the economic sentiment. 87.9, weaker than expected, 88.9 declining in june as well. >> spanish gdp did come in line with forecast but contracting by 0.4% in the second quarter. on an annual basis spain's economy is about a full percentage point smaller than it was a year ago. joining us now is guest host for the next how is bethany mclean. great to have you with us. i guess the first question is we parsed through these figures, in your view just how bad, how deep the problem is there and how much policymakers are to blame? >> i think it's a really deep problem and funny it's a little bit similar to the u.s. financial crisis in that it's

slow moving. we keep having moment of crisis and then i want seems like it's recovering and we hit the skids all over again. you're seeing the same pattern. i think policymakers have definitely gotten it wrong by not taking bolder action early on. if you think about the u.s. and not that we did it perfectly but it took the government throwing all its might at the problem in order to fix it and even then stem the tide of disaster and it barely worked. europe is trying half measures and it's a problem. >> you covered that u.s. financial crisis and in your view how would this event in europe compare with what in the u.s. and what sense do you get from sources in the market is to how concerned they are about what's going to happen with european economy not even right now but in 12, 15, 24 months time? >> right. it's all a continue jagts of the u.s. financial crisis in some respects, it's all the same

thing. the entire world, entire developed world became far too indebt. it's all a question of this massive deleveraging process that needs to happen in both the u.s. and europe. i think what's happening in europe was sparked by what happened in the u.s. and is still happening and very much a continuation in both places. people i talk to are saying, i say they range from calm to panicked. the calm people sort of have the view well it would be an absolute disaster for the euro to fall apart so if policymakers are going to do something to save it. we don't know what it will be but they won't let it happen. we'll act as if it won't happen because it can't. then the other group of people are far less sanguine. in their view it end badly. one source says he doesn't know what it will be but it will end with a bank run. >> we'll get more thoughts on that and talk libor with you. stick around if you will.

julia chatterley is in madrid. you mentioned that the mood there on the ground has changed even relative to the last time that you were there. when you talk to the spanish do they now seem to have a real sense of how deep their countries run? >> reporter: definite sense of disappointment in terms of the way the prime minister is handling this crisis, they are concerned about the austerity measures that have been taken and concerned about the prospect of more. certainly a poll was done over the weekend that suggested 80% of the people that respond this were dissatisfied and were concerned about the prime minister's handling of this crisis and i've certainly felt that just change in the last two months. he does have a parliamentary majority so he can enact these process and push them through and that's what we're seeing. in terms of the response, we've seen 65 billion euros in addition to those brought in earlier this year and that gives

people a real dissatisfaction and concern about what more can happen. cy in the an article that they brought out last week suggested it's likely spain does see a bailout they don't anticipate any additional austerity measures to be applied. it gives you and idea of the scale of the measures. the imf lowered their gdp estimate for spain to minus 1.7% for this year in light of the gdp data we got this morning that's something too we'll continue to watch. be it bailout, getting involved in purchases of spanish debt, plenty to watch in spain this week. back to you. >> absolutely. julia, thanks very much for that. ross, you have to think what goodwill it do for another government fall out of power to bring in somebody new. >> so they will stay the course. hsbc very much in focus today and apart from the results, the amount they had to set aside for

miss selling and an investigation. they put aside 1.3 billion dollars for miss selling in the uk. surrounding a payment protection. they also set aside 700 million dollars for the money laundering issues to cover potential fines following a report by the u.s. senate which alleged of course global operations are being used by money launders. they are saying that could be considerably higher. they said it's too early to estimate any cost at the moment related to on going libor investigations. >> the uk government is meantime launching an independent review of the libor scandal which will also submit proposals for how the setting of the rate can be improved. "financial times" saying george osborn enlisted martin wheelie

to complete the report. the review may include recommendations as to whether market abuses should lead to criminal sanctions. >> and british bank rbs is getting set for punishment over its role in the libor rig scandal. in an interview, he acknowledged the bank expects to face its day in the spotlight. shares of rbs this morning are trading higher by 1.3%. let's get back out to bethany mcclain with us this morning from new york. as the libor investigation widens, it turns potentially criminal, just who may we start to talk about next? what are the broader ramifications in your view of now what we've learned, the degree to which the rate has been rigged over the years? >> i think the ramifications are broad. you already have a population both over there and here that's furious at the banks and holds

the banks to blame with some reason for everything that's gone wrong in our economies. when you add this libor scandal where it looks like the banks were once again just abusing the system, you just have this eroding of confidence and it makes me wonder, how long can you have a banking system where the customers hate and fear the banks. i think the ramifications are huge from a trust standpoint. it's not clear what the financial ramifications are in the case that some borrowers in the u.s. got a better rate because libor was being rigged. we don't know what the actual cost was but it's a trust fish. >> douglas flint has detailed this this morning. he said regulatory compliance events anticipateded to further public concern and distrust of banking sector. whether it leads toni action by customers. >> yeah. you know, it will be really interesting to see.

i guess my fear about this isn't fear but that you end up with a lot of junior bankers and traders bearing the brunt of any kind of criminal investigation. so you end up with a few relatively junior people getting hauled off to prison for their role in this thing that whether it meets the legal definition of a conspiracy or not is this far reaching global manipulation. at the end of the day people just shrug their shoulders. it might do it. it's interesting, bean lot of pressure on financial stocks over the past year and high-profile people calling for break up of the big banks. i wonder how much this libor scandal will add fuel to that fire. >> that's one thing we can expect. stay with us. we'll have bethany for the rest of the hour. >> still to come, a faceoff in a san francisco courtroom today.

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. you're watching "worldwide exchange." these are your headlines. hsbc sets aside $2 billion to solve issues in the uk and u.s. as it posts a pre-tax profit of

$12.7 billion. >> stocks rally for a third consecutive session. investors wait for coordinated action. >> spanish economy shrinks 0.4% in the second quarter in line though with forecasts. and top u.s. lawmaker say it's unlikely congress will hash out looming tax and spending issues before the november elections. democratic senator dick durbin tells cnbc a bipartisan group of eight lawmakers are in talks to craft a solution to the so-called fiscal cliff that will take effect in january the no budget deal is reached. >> here's the good news. with the president's leadership we can come together. there's a bipartisan answer here that will reduce the deficit and still create an environment for economic growth. >> the senate pass ad bill last week to extend the bush era tax cuts for a year for all the wealthiest americans. house is expected to reject that

measure. apple and samsung are facing off in a san francisco courtroom as jury selection begins in the company's patent trial. apple sudden samsung last year claiming its smart phones and tablets are knockoff of the iphone and ipad. the company is techniquing $2.5 billion in damages. samsung is claiming apple is the one doing the selling a. apple ceo tim cook is not expected to testify. apple and samsung shares this morning both higher, samsung, though winning the battle up 3.4% to apple's 1.2. coming up uk retailers are hoping for shopping gold from the olympics but just how much of a boost will the games provide? we'll discuss right after the break. [ female announcer ] want to spend less and retire with more? then don't get nickle and dimed by high cost investments and annoying account fees. at e-trade, our free easy-to-use online tools

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we have italian auction results. yields are low. ten year auction yield 5.96. it was 6.19% at the end of june. lowest since april. five year auction, the yield on that 5.29%. it was 5.84 at the end of june. also lowest since april. runoff as well on the 2000. five year was 1.34.

they sold 2.45 billion of the september 22 as well. that's versus the 1.5 to 2.5 billion plan. maximum a lllocation on that. pretty much sold the maximum they wanted to on the two main issues this morning and yields, indeed sharply lower. >> ten year is still over 6%. we saw it below 6% this morning. inched back up. these are better action results don't seem to move that position that much. that's a good gauge of risk and turmoil. >> a bid to cover on the 2015 is sharply lower. well, 1.89, 3.26 on april 12th. >> still people are showing up. >> yep. well it's often touted as

the most exciting race. the men's 400 was billed as that. by the usa' na taken adrian handed over to michael phelps. a late surge by the frenchman in the last 15 meters gave france an unexpected gold. >> women's 400 meters. allison schmitt held on. >> wet weather and lagging economy have caused a trying summer so far for uk retailers. they are hoping for a gold rush from an influx of people for the olympics. how much of a boost will the olympics provide. joining us now is president of sw retailers. stacey this morning it's very interesting, at first it was hard right away to get a sense

of just how crazy and incredible it was for the games. what are most people saying? it's kind of quiet, kind of empty. >> right. you know, london has emptied out, the locals are getting out of town because they have been afraid of transportation and traffic. but if you go out certainly to the westfield mall you're seeing the to tourists. 30% of sales in luxury going towards chinese tourists. is that sustainable. >> just the hoped for numbers of people going through that westfield shopping mall is that up to expectations? >> i think so. i think the mall so far is crowded. it's pretty early. the good news for westfield in that mall is 75% of ticket holders have to pass through that mall in order to get to the

olympic park. >> like duty free before you get on a plane. heathrow, terminal 5 is a shopping next buff get on flaen. now you have a shopping center at the end of which happens to be the olympics. >> they are hoping once you get through security and you see your olympic event you'll be relaxed, come back through, there's a casino get a massage, champagne bar and all new retailers coming in. >> i was so upset. i got to share this. on the opening ceremony champagne seafood park right on the site. only one shut opening ceremony. >> i was there the other day. >> why would it be shut for the opening ceremony. >> talking more broadly about the luxury sector, we heard from the concerns now with folks in some companies like barberry maybe the slow down in china is going more than we thought it was. >> most of the luxury retailers

whether it's barberry or coach, talking about a slow down in mainland china. the question is what's next? is that tourism that comes to europe that makes up such a huge percent here does it slow down. to tourist if mainland is slowing eventually tourism will slow. you've seen tourism to hong kong has slowed down. does that hit europe next. is that a double whammy? >> when we look ahead to back here at london as a barometer of spending, you know, are you seeing the strength holding up? is it still the foreign buyer who is there and who is opening the wallet or even there has there bean sign of softness >> very much still the foreign spender that's coming in, the chinese tourist, a lot of russian spending coming in. yesterday i was in the prada

store. one wanted a one edition limited bag. sorry it's taken. >> that is remarkable that it's still -- people will shell out for those high end items. >> that's what you're seeing. if the slowing down mainland is the next shoe to drop, you know, the tourism in europe. >> middle east crowd in august come to london. they escape the heat. >> still to come we have the latest on the corporate profit landscape, geithner is meeting. >> preview the trading day on wall street. don't go anywhere.

>> hello and welcome to today's edition of worldwide exchange." . watching and waiting u.s. investors are looking ahead to a busy week topped by the two day fed meeting and friday's jobs reports. >> hsbc posted a profit for the first half the year but had to set aside $2 billion to cover uk miss selling. >> risk is back on. stocks rallying for a third consecutive session as anticipation of more action by the world's major central banks fuel sentiment. >> spanish economy contracts .4% in the second quarter in line

with forecasts. surprise jump in inflation. can the risk rally extend into the u.s. trading day? that is the question this morning. take a look at what's happening in u.s. futures behind me. dow jones industrial average pointed lower by 15 points. the nasdaq and s&p 500 both looking to loeopen lower by a couple of points. ftse is now up .16%. most major european bourses are in the green. central dax up .68%.

so, plenty of folks wondering whether you need to stay on the rally we've had in the last three days. here's what the experts are telling us this morning. >> trade of the day, i would say, is just gradually getting long with the euros into the ecb meeting on thursday. i think there's a slow, slow grind. long on the euro is a dangerous trade. the gradual, a reallocation should be stronger. >> i would look at a tactical position in spain. the best value of all the staples i can see in spain is five seven. you're looking to buy 17, sell the july 19. >> we would say that we're not

seeing any signs of shoot the lights out growth. so what you're looking for is like sustainable yield. well could it be time for u.s. corporates to say good by to growing profits. slowing economies increasing consumer caution and ongoing fears about the state of play in europe are causing earnings by companies in the s&p 500 to shrink for the first time since just after the recession ended. this according to data from thomps thompson reuters. joining us is michael murphy and bethan any mclane. michael murphy have profits peeked? >> i don't believe they have. after you see a slow down this coming quarter the back half of this year, q4 could see a ramp up in the u.s. we have a saying that price is truth and you look at the performance of the markets here recently specifically the s&p

500 trying to get up towards the 1400 level i think the back half the year has the potential to surprise a lot of people. >> where is the surprise going to come from? what will drive that? >> ross, if you look at using a company like okay terrify pill jar, a dow component, caterpillar printed a high of 1.16 and came down $80 a share. they announced earnings last week that were good not great. they sold back down around 80 and back above its short term trading trend line of $86 a share. something like caterpillar a lot of negative news have been baked in from china and europe and there's a lot of thought that news could be overstated and any sort of peak to the upside, a peak that things aren't as bad as anticipated. >> we're back and we know this. what's happening is this central bank policy market where the question for caterpillar isn't so much and it's not necessarily

caterpillar specific but whether profits that have peaked or not. >> i think the market is telling you it believes what will come out of europe this week will be positive. not really sure how the u.s. is going to play into that. i think what the rally you saw thursday and friday of last week in the u.s. markets tells you what's going to come out will be a plan, not just word or talk of a plan but an actual plan that will start to put this behind us. >> because i still wonder if we look at this question ultimately, if you think the stock market is built on earnings and we can ignore the noise, the policy noise for now and focus on that issue how do you grow profits from here if we're in a world of slowing, kind of nominal gdp growth and we're at a point where we cut quite a bit on the cost side? >> i think that's the key, kelly. you look at these large corporations they are sitting on large piles of cash. they are doing a lot more with a

lot less. if they see some sort of stabilization a lot of that cash can go back in the market, a lot of money can be put to use, hiring can be done and you can see top line -- >> they won't do that unless they get some confidence in the environment. i think companies, because of financial growth, because of the financial system will hold more cash and the rules have changed. not only hold more cash than they have ever done in the last 20 years. >> they will. they have to really with what's gone on here recently. >> i wonder as we focus on the cash sitting at companies if there's more political pressure on them to put it to use. do you hear anything along those lines? >> do i. in an election season i expect to hear a lot more it. one of the interesting things people i talk to are frustrated because they don't feel like it's a fundamentally driven market they feel it's a market driven by policy decisions in

washington. risk on, risk off kind of thing. that said something that makes me a little bit optimistic is individual investors of course have been piling money into bond funds and individual investors have a good track record of getting it wrong. and that might go well for the stock market going forward. >> what do you make of that, mike? >> as a long short equity guy seeing all the money dmomg to the bond funds recently is exactly that. unfortunately i think people should be looking at taking their risk up a little bit. that was a great trade years ago. a lot of people on the retail side missed it. back to the other point a lot of companies will be able to expand earns in the near future. >> more with mike and bethany in just a bit. >> meanwhile, hsbc posts a profit in the first half the year. it was overshadowed by a number of scandals.

they set aside $2 billion to cover money laundering allegations. that was 700 million. hsbc confirmed it's been named as a defendant in private u.s. lawsuits in relation to libor setting the bank has assured investors it will take concrete steps to resolve the libor issues particularly in the united states. as far as the stock is concerned today swinging around a little bit. maybe we got hsbc stock. we'll talk about general motors, kelly is. do we have it? >> hsbc was up about .6%. >> up 1%. ftse is up .5%. >> it's outperforming banks. investors still searching for direction. >> a little more two years after

gm pulled ads from facebook and made the decision not to advertise in next year's super bowl. a spokesman said he failed to meet the expectations of the company and reports suingest he didn't properly report the details of gm's five year deal with manchester united airlines. we have that stock price. gm up 2% this morning in frankfurt trading. unphased by the news. >> a section of pipeline in wisconsin that spilled around 1,200 barrels of oil this weekend. the company re-opened three other sections. no timetable to stop the pipeline. enbridge is pushing ahead with expansion plans. enbridge stock in frankfurt up by a percent. >> 300 million people were left in the dark in northern india after one of the country's

largest ever power failures. the black cut hit new delhi and seven other states and it was restored only by the afternoon to many parts. massive outage snarled transport systems and left office workers sweltering. india's power minister has called on a panel to look into the grade failure with a report due in 15 days. 300 million people is roughly the population of the united states. just to give you a sense of how big that outage was. >> huge. still to come on the show -- >> u.s. treasury s.e.c. timothy geithner is due to meet up with his counter part later. what is on the agenda for them? we'll bring you a preview next. [ 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 --

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with the idea of hybrid technology... ♪ ...it's already ingrained in our dna. during the golden opportunity sales event, get great values on some of our newest models. this is the pursuit of perfection. you're watching "worldwide exchange." let's bring you the top stories. u.s. safety officials are investigating a safety issue with the boeing 787 dreamliner jet. an incident involved the second dreamliner built. it was set to deliver to air india. it comes less than a week after several 787s were temporarily grounded after corrosion was

found in the gearbox exponents. boeing shares responding to that with a gain of a quarter of a% in what is proudly a positive session in prank further. >> apple and samsung face off in a san francisco court. jury selection begins. apple sudden samsung last year claiming smart phones and iphones are a knock off of apple's products. sam junk claims apple is the one doing the stealing. tim cook is not expected to testify. apple and samsung as far as the stock is concern apple up a percent in frankfurt, samsung up 3.4%. i want to get your view on that as well. do you trade this stock, own it, shorting it? >> we're long apple. apple announced earnings and the stock came down to $570 range in the u.s. and we bought the stock right there. i think long term the stock is tremendous, with a boat load of

cash on the books. but, however, the question has been for a long time who can compete with apple, who is the potential iphone killer and samsung is the one if anybody is going to knock apple off their pedestal, there's room for both an apple and samsung. samsung is the real competition. >> short rimm? >> i would love to say i was short rimm. down in the $6 range rimm gets interesting. a lot of people believe their value is up around $9. so no missed the short there which was in hindsight pretty easy but there's upside in rimm. >> speaking of apple, apple and twitter held talks more than a year ago about a possible tie up between the two companies. reports say discussions involved in apple investing the popular micro-blogging service. no deal resulted though and the talks aren't currently active. twitter has a strong relationship with apple,

messaging service into the iphone and the ipad although that may be more by force than choice, ross, given its popularity. you're watching exchange." these are your headlines from around the world. . >> hsbc sets aside $2 billion to solve issues in the uk and u.s. as it posts a profit. >> stocks rally. investors waiting for coordinated action from the world's major investment banks. >> and spanish economy contracts in the second quarter. and you have just join us we had gdp numbers of spain. economy contracted .4% in the second quarter year-on-year. it shrunk by 1%. there's no time to lose to tackle spain's spain's troubled

bond be markets it was warned. the u.s. treasury secretary timothy geithner is meeting with wolfgang schaeuble this afternoon. they will discuss the u.s., european and global economies. geithner will then meet with mario draghi. silvia, mr. wolfgang schaeuble is on holiday. that's where he's meeting mr. geithner. what do you think -- how is schaeuble responding to any pressure in letting the ecb do more? >> reporter: in all honesty there isn't an awful lot more the ecb can do. they can start buying bonds again. we know what happened the last time they bought bonds. it lasted a half hour. it can be prearrived. the ecb said it's not dead we don't feel the need to lose it

right now because there was no turmoil in the bond markets even though yields were creeping up sponsorship the ecb will step in. but it can't do anything to really solve the issue. the bonds, they can keep a little bit of a lid on yields but they can't really bring them down significantly. they might prevent them from blowing up completely. okay. but we all know that on the other side we do have a problem with seniority because the more the ecb sucks up from the bond market the more we have a problem should there be some kind of a hair cut somewhere down the line because the hair cuts for the private-sector will get more severe. there's a counter productive element for starters. secondly the ecb just cut interest rates and give us a break they are close to zero. they can't do more. yes we can have another ltro in the markets but the last one didn't quite have the shock and awe effect. so there isn't an awful lot they

can do. there isn't the magic wand. whatever can to be done will to be done but i don't have to be fortune teller to tell you it won't be enough for the markets because the debt problem won't be resolved that way. >> great point, silvia. i want to get back to bethan any mclean. earlier you commented a source said the way he sees this ending is a bank run. we've seen a bank jog. do you expect the latest maneuvers to do anything to stem the degree of concern? >> i think part of the fundamental problem here is just this unhealthy relationship between banks and sovereign, right, where they are caught almost in this death spiral that the problems of the banking system become the problems of the sovereign nation, and then help make the sovereign nation lose access to financing, there by exacerbating the problems. you have toave some

restructuring of the banking system and some cutting of that disastrous linkage between the two. i don't know anything we've seen so far is really heading in that direction. >> we thought we seen it until the germans came out and said no, spain will be responsible for the bank bailout. >> it shows you how hard it is to actually accomplish this. then you have this issue it's not really layered on top of deposit insurance and what that might do in order to halt any process of a bank run. deposit insurance is itself an incredibly thorny difficult thing to actually accomplish. so i don't see an easy way out here. and i think there's going have to be tough choice around restructuring the banking system. >> makes almost a financial system look straightforward. bethany mclean thank you for joining us. still to come on the show,

hope for fresh stimulus for europe's major banks. we'll talk about u.s. indisand how do you trade this week? bear in mind all the event risks? >> stay with us. [ female announcer ] want to spend less and retire with more? then don't get nickle and dimed by high cost investments and annoying account fees. at e-trade, our free easy-to-use online tools and experienced retirement specialists can help you build a personalized plan. and with our no annual fee iras and a wide range of low cost investments, you can execute the plan you want at a low cost. so meet with us, or go to etrade.com for a great retirement plan with low cost investments. ♪

as we move closer to the trading session in the u.s. let's get a look on what's the agenda. no economic data but investors have a busy week ahead. we have a two day meeting by the fed that kicks off tomorrow and as for earnings look for results today from cit, lowe's, anadarko, enbridge, hertz and seagate. so, mike, quiet on the economy

front in the u.s. how do you set up for trading session. >> looking at today's session we're looking at more of a follow through. i think the fact that you don't have a major selloff coming in after the weekend is going to be taken as a major positive by traders and wall street. they see there wasn't anything majorly negative out of europe or say some of the news like the lsbc news could be negative. you look at our futures pointing to a slightly lower opening. that sets up as a positive trading day. >> how do you trade through all these events, the ecb -- >> you look -- you have -- i they the each cb is driving the car this week. the fed, i'm not in the qe3 camp with fed. with the s&p near 1400 i think it's hard to argue that the fed even though we got the gdp numbers last week that were not great i think would be hard for bernanke to step in and do a qe3

right now. that remains to be seen. i think it will be the ecb that's driving this market. anything lack of a major negative announcement i think this market wants to go higher. >> not lack of an announcement, lack of an announcement that may cause a problem. >> yes. maybe i misspoke. lack of anything majorly negative out of europe, out of the ecb. short of a negative event i think the market will push higher. >> have we put our lows for the s&p and have we quietly body. >> very quietly body. 12557 is the number. i don't see us getting back down near that level at all. if we do it will be driven by europe. it will be where they just can't, all the different parts like draghi coming out and saying they will do whatever is necessary. if there's nothing there, if there's lack of an announcement or lack ever clarity in which they can't afford, too much at stake here if that happens things can go a lot worse. >> what about the european

indices? >> we're focused on the u.s. markets. i think all of the european indices -- somebody mentioned spain and there's a lot of value in spain. i think there is but i don't see a reason to jump into that because you have the uncertainty. >> what are you shorting? what's on the negative side? >> on the negative side -- we're short on industrials because the balance sheets, the valuation of the companies is too lofty. on the tech side a company like apple with the cash they have and trading at less than ten times earns is hard to short that name. >> mike, hope you enjoy the olympics. >> thank you very much. >> that's it for today's program. "squawk box" is coming up next. >> i'm off to the olympics. we'll see you tomorrow. >> who isn't?

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good monday morning. today's top stories central banks on center stage. two key meetings this week the fed and ecb are gathering for policy setting talks and the stakes from the global economy have never been higher. saving the eurozone, italy holding an important auction, international investors extend their stay in greece and u.s. treasury secretary tim geithner heading to europe. apple and samsung due in court today. it's monday, july 30th, 2012. "squawk" begins right now. ♪ flirting with time baby >> i don't know what the song is. i like it.