hello. welcome to today's "worldwide exchange." these are your headlines from around the world. >> falling crisis, and weaker retail sales in china all fuel expectations of more quality boosting financial rket >> gu, kai lai is accused of murdering a british businessman. >> nest lee posted better than expected first half earnings. they say the prices bleeds. >> standard chartered rebounds for the second day as the ceo

fights back. the group is exploring legal action against the new york regulator. you're watching "worldwide exchange" bringing you business news from around the globe. okay. welcome to the start of today's show. china focus. >> it's all data. whether it's the economy or politics, it's really about that country this morning. we're looking right now for any update we're supposed to get throughout today. the trial has been adjourned. this is what wires are currently reporting. >> more on that to come during the program. also of course just reminding you we've got some big corporate results. an analyst says he has a buy recommendation on the stock. >> and we will hear from the ceo of the winter 2014 games and what it's taking to turn sochi

from an exsoviet resort town into an olympic size destination. >> facebook may be sin nonmi mouse with steve zuk wereburg. we're asking if it's time more girls got in on the action. we'll explain that. >> we'll explain. >> wall street is in its biggest week of ipo activity since facebook went public. are investors interested? we'll get an expert view at 10:30 local me. >> it is about china consumer inflation data. that's dipped to a low. there's evidence that they need to. ppi posting its biggest drop since october of 2009 but the reason they need to is growth in the main land factory. output slipping to 9.2%, the weakest place in roughly three years. retail sales missed forecast at a fixed asset investment group in line with expectations.

all of that data combined so investors believe there will be movement. we have the chairman of global markets in china at jpmorgan. let's kick off you with, jay. john, i'm going to start with you. let's just start there. it's an interesting sort of place we're at. the data is weaker on sort of the output side and yet investors are applauding it because we think we'll get the stimulus. >> yes. it's one of these situations where it's so bad it's good, akin to i guess some of the expectations being placed in the european states. to be fair, there were lackluster. they missed expectations. there was some sign in my view of stability but little in the way of recovery. i guess to the extent the market is holding in there, they were possibly expecting worse.

>> yeah. what extra policy stimulus are we going to get? if that's what our hope is, how does it actually play out? >> well, look. i think that there's still going to be somewhat of a trade. we'll hear more of this but i think there will be more tradeoff between accelerated stimulus and the deceleration in the private industry. all eyes will remain on domestic consumption. to the extent wre expecting some sort of fine tuning, we as a house are expecting another rate cut soon and another couple of triple r cuts soon in order to support this underlying domestic demand story. >> gene is joining us. do you agree, another rate cut soon? what's your view? >> well, i think we've had some monetary easing in the last several months, however, the economy has yet to respond to the stimulus the central

government put in so, therefore, i think the policy makers will have to get much more creative to really boost the economy. the problem around the world is we have a synchronized slowdown. the problem is not just with china but it's a global slowdown. at this juncture we're seeing weaker demand for industrial production. we're seeing weaker demand in the consumer sector. a simple rate cut is not going to do the trick. therefore, i think policy makers have to really look in the tool kit and find other creative measures, such as more tax cuts and perhaps more direct stimulus for the consumer sector to really get the economy going. >> jing. what you're saying is fiscal policy potentially could step up to the plate where monetary policy maybe isn't quite as well positioned? >> well, you know, monetary policy has limitations as we have seen in the cases in the

u.s. and europe. rates are already very low, but consumer spending and the overall economies remain very weak. the case is similar in chinchin. we've had several rate cuts. at this juncture china should cut taxes much mora gres civilly. china is in a great position. they have a very strong tax intake. it can afford tax reductions where other governments cannot. >> jing, i saw food prices rising. that presumably also provides a bit of a boost for consumers? >> well, you know, inflation has been on a downward trend for the past several months. food inflation is down. also producer price index as you noticed is in deflation nar ri territory.

in the recent weeks we're hearing some stories about corn and soy bean prices rising to high levels due to the drought situation in the midwest and u.s. as well as india. food prices could go up sometime in the next three to six months, however, that doesn't change the overall picture for inflation coming down so with inflation in check, we believe the stage is set for the central government to release more stimulus into the overall economy. >> what's interesting is we just got an announcement at reuters that they're raising retail gasoline prices by 391 a ton. it was 370 u.n. a ton from friday. so on the one hand we're talking about easing pressures for consumers with tax cuts. if you're raising retail gasoline prices, are you giving with one hand and taking away with the other? >> well, this recent hike in the fuel prices that you just mentioned actually were within our expectations.

in the recent weeks we know that crude prices actually have been quite high despite the global economy because we have some geopolitical uncertainties in the middle east so therefore china does adjust petroleum product prices according to the input costs, i.e.,, crude oil costs. this is not out of the ordinary. now we have inflation on the downward trend, which is a plus. that means the central government can actually raise fuel prices without fearing reigniting inflation. >> jing, there is this trial which has apparently been adjourned though we have no decision yet. how important is this, if it is significant, in terms of broadly speaking how policy makers are going to manage the economy during this year? >> well, this trial doesn't have a direct relevance to the overall economy. as you know, the central government is very much focused on boosting domestic consumption

in view of the very weak global economic environment. so far this year we've seen a lot of measures coming from central leadership to boost domestic consumption including infrastructure spending, including tax breaks for the very low income families in china. so this trial that's ongoing in china doesn't have direct relevance to the overall economy. we believe in the coming few months we're likely to see a stabilization and gradual recovery in the economy. however, real signs of recovery may not be apparent until the fourth quarter of this year or first quarter 2013. >> jing, if we don't get recovery apparent until that time schedule jing's talking about, how do you act as an investor? >> well, i don't think we're going to substantially change our stance, russ, to be fair. we're pretty underweight as it stands. the chinese equity market has

been pretty much the standout underperformer across asia for the past 12 months. i don't see any near term capitalist given this growth trajectory that's going to change that. whether or not we see growth bottoming out in the second half of the year which, by the way, does seem to be pretty much a consensus calling, i can only assume that if they do roll out easing measures as jing has explained, one can only assume that will play through. not with standing that, there's obviously a close relationship with monetary growth and equity performance. once we start to see that money supply reaching throughout the economy and start impacting risk assets as well, then we'll look to change our minds. as it stands at the moment, we are really pretty cautious on the equity market as i say over the next six months. i can't see any capitalists to change our mind. >> john, you're with us for the

best partthe hour. jing, we'll let you go. day one of china's most sensational murder trial in decades has adjourned. there's no set date just yet on whether gu kailai is guilty of murdering britton neil hayward. there had been trouble with people dragging supporters away from the courthouse. this trial is part of the efforts to stamp out any political dissension ahead of china's leadership change later this year. with the reputation of communist party leadership at stake, we'll look at how we got here. >> reporter: thanks, kelly. up until february this year bo was a rising star. a member of the poll let bureau. it started to unravel. on february the 2nd news hit that the city's police chief was

demoted and rumors swirled. more than days the police chief sought asylum at a u.s. con so he late. the next day he emerged put on a stress indused holliday. the incident didn't go unnoticed by the communist party's top brass. the next month china's fear was full of rumors he had blown his chances of promotion. then premiere indirectly addressed the situation just one day before bo was stripped of his post. he then disappeared from public view. by march the 26th the u.k. was asking for china to re-examine the death of british businessman neil hayward. within days beijing announced that bo no longer held any party post and that was being investigated over hayward's death. the couple are now being painted

as money and power hungry. by the end of april "the new york times" allege the they were involved with wire tapping, including personal conversations with the president. so what the sentence will be is being closely watched. so, too, what happens next to her husband. back over to you. >> thanks for that. don't go anywhere because we'll come right back to you for a markets update in just a moment. >> yeah, we will do that. let's just remind you where we are now. european stocks over an hour into the trading day, pretty even stevens. we've just hit a session low. we were fast out of the gates this morning. and it's being called to markets and sectors that have been firm. pretty flat session yesterday for the ftse and the dax. they're up .2%. as far as bond markets -- there are some individual corporate

numbers here that are worth looking at. nestlee very much the focus. up 2%. they also talked about declining cost pressures as well, which is very good. huge buy, of course, of raw materials. over at nordisk, the stock up 4.2%. they're raising their full year guidance. aegon up as well. the dutch company is down 37%. as far as bond markets are concerned, we saw spanish debt late last night over 7%. below this morning, 6.8% and 5.8% respectively. those numbers are down. u.s. treasuries, 1.688%. about a two-month high. not the strongest demand yesterday for treasury auctions so we'll keep our eyes on how much higher that yield may go. as far as currency markets are concerned, the aussie dollar

today hitting the highest level since march the 20th. back with chinese date at that. we got up to 106.50. euro dollar, 123.51. still away from a two-month high we hit earlier. we've also seen oil a little bit higher. we were at 112, just below that. 111.83. nymex at 1373.22. spot gold slightly higher at 16.14. let's go back to more of that asian market performance. >> thank you, ross. asian markets continued their upward momentum on easing hopes from china. the shanghai is higher by about .6%. beijing's recent investigation into 16 provinces and cities

shows that most cities have been diligently carrying out property restrictions so that helped to calm speculation. the hang seng climbed 1%. stocks also cashed in after sj and holdings reported a 28% rise in first half net profit. the nikkei gained 1.1% on the day and now sits up 5% on the week. oil and coal companies as well as steel makers left the gate. over in seoul, exporters and manufacturers helped to lift the kospi higher on easing hopes from the bok. we'll hear more about that later. the aussie market was actually the market lager today, down marginally on profit taking. india's sensex down by abo about .3%. back to you. thank you. well, we've heard about

possibilities of a grek sit or a spec sit. we're highlighting the increased possibility of the u.k. leaving the european union. tony blair is also reportedly concerned about this possibility. for more head to our website. the story is there. you can weigh in. we want to know with all the brixit, grexit's flying around, let us know which one you think will happen. you can e-mail us or tweet us. you can reach us at kelly underscore evans or at ross westgtate. surely. later on the program as well we focus back in on the olympics, but not london 2012, winter's coming. 2014 olympic organizing committee joins us to look at how they're getting ready from

the games and what they've learned from what's being done here in london. you know what i love about this country? trick question. i love everything about this country! including prilosec otc. you know one pill each morning treats your frequent heartburn so you can enjoy all this great land of ours has to offer like demolition derbies. and drive thru weddings. so if you're one of those people who gets heartburn and then treats day after day, block the acid with prilosec otc and don't get heartburn in the first place. [ male announcer ] one pill each morning. 24 hours. zero heartburn.

well, it was another big night in olympic stadium here. it began with the final of the women's 400 meter hurdles.

the u.s.a. went up against russia's bronze medalist. russia crossed the line first to claim the gold medal with the american finishing in second. the men's 110 meters hurdles was against russia's runner and u.s.a. merit took the gold. >> it's a familiar picture. china is still ahead of the u.s. just barely there. total looks like 36 to 34 gold medals. >> more medals in total. >> i think we should flip that around. u.s.a. on top. >> golds get more points though. >> well, in any case. great britain not doing too badly there. the medal count has been impressive. >> we'd of taken that. it's the open water swimming that you know a lot about. in the serpentine.

i'm not sure i spent 4 hours in the water. that's what they're doing in a minute. today's schedule shows the final of today's women's football. we have the final of the men's 200 meters. i'm looking, there's a chance because it's a warm evening tonight, if we get no wind, it could go get something special. 7:19. >> you're thinking world record time with bolt? >> bolt. he's got the favorite lane. outside lane. he has the long legs. he needs the outside lane. he has his favorite lane. >> good temperatures, favorite lane. we'll see if bolt can pull it off. still to come on this program before we get to all the olympics stuff, the ceo of the 2014 olympic committee will tell us how ready the russian town is to host the winter games and what they've learned from their time in london. that's all still to come. the cf standard charter says

some of its dealings with iran are very damaging and factually inaccurate. peter sands said he didn't recognize the $215 billion figure as the amount of alleged illegal transactions. the bank received some support from the bank of england who warned them about issuing such robust statements. >> the u.k. authorities would ask is that the various regulatory authorities that are investigating the particular case try to work together and refrain from making too many public statements until the investigation is completed. that seems to be the appropriate time to make the judgment and what the punishment is. from one scandal to another, u.s. prosecutors are apparently offering several usb people immunity. they say the deal was offered to

former traders and other employees at relatively junior level jobs at the banks. reuters reports an rbs error caused a big spike in the frank. a spokesperson for the bank says an error was made by a u.s. based trader. the machines really are in cloel, aren't they? swiss posted a surprise rate increase. where does the surprise come from? >> well, we talked to the cfo of this business, george quinn, about an hour ago on "squawk box." he tried to explain. listen in to that. >> the market clearly expected the impact from the loss of the sale of the admin u.s. business. the performance of our other business have surpassed expectations. some of the commentary you're

hearing is correct. we have significant reserve increases on the pnc business and we have significant gains. the most important thing for me is renewal for us. july 1 and what that means for the future and the trend continues to be attractive in our main markets. >> so, again, part of that was reserve releases but also the strong investment result and the non-live business result which was excellent as well. that was helped by the fact that claims from natural catastrophes in the last quarter were very low. that also pushed the combined measure, measure of underwriting profitability down to 85.7% on the group level. >> adeco stock was well in focus. what were their numbers like? >> well, t look at adeco shares, they're down by 2.5%. having said that, the numbers weren't all that bad. yes, they were a little bit lower on the revenue side where revenues fell by 4% organically,

but the net profit number was actually a tad higher than forecast at 113 million euros but net profit did decline by 20%. what investors are really focusing on today is the variable outlook. because adeco said in its commentary that the revenue development in july was weaker in one of its main markets in france but also in japan, so this is the focus, adeco down by 2.7% now. >> we'll talk to jeffrey about nestle in a minute, but what's of most interest to you? i'll put an end to our interview. >> of course the most interesting thing is the growth in the emerging markets because the organic growth number there still very strong at 13%. what's also quite interesting is that despite it being down in southern europe, nestle showed growth in those areas. it was quite cautious about

growth in the developed markets in particular also about north america. that's worth discussing. >> i love doing research on air with our correspondents. very useful. thank you very much, indeed, for that. so caroline's pointing out what's going on with nestle. i'm now fully prepared. we can talk about nestle when we come back. >> i do like that. the beverage business strong. we'll ask about it. we'll be right back.

exchange" bringing you business news from around the globe. falling prices, slower factory growth, weaker retail sales in china. they've all fueled expectations of more policy easing. that's helped to boost financial players investments. >> one of the most watched trials in chinese political history has been a jurnd awaiting verdict. they tell reporters gu kailai has not denied the charges. nestle says its raw material prices will ease. standard charter rebounds for the second day as they fight back and they're exploring legal action against the new york regulator.

we have a little bit of trade data out of the u.k. as well. global goods trade deficit 10.18. it has widened. the biggest trade deficit since september 2011. with the public, the olympics, we've had easter, june byly, olympics. >> several bank holidays. >> we're not going to get any real sense of the underlying economy until we get into october. >> maybe that's for the best. >> yeah. nevertheless, having an impact on the panel as you can see. low at 156.48. meanwhile, back to nestle. the world's biggest food group. the company which owns brants such as nespresso and nesquick, it wants to meet expectations.

>> our guest host is still with us as well. simon, across the bored you like what you see in these results? >> yes. they were good results and i think the absolute key number really was that growth rate in the second quarter, which was their better, considerably better than the market was expecting. nearly 100 bases points at 6%. that in the context of the degradation of the eurozone in particular is very encouraging for the company. much of that was continuing to be driven by the premiumized product of nespresso nutrition. high margin areas which are favorable for margins. we're very pleased with these results. >> simon, we should remind people this isn't just a chocolate company. i'm surprised that the water segment did pretty well. you'd think that would be more vulnerable to the slowing european economy. >> yes, that's true. we'd actually expected a slightly better result there

than anticipated by the consensus in water and, indeed, also in ice cream because we've, of course, had slightly more favorable reads in those areas. the armageddon that we were expecting because of the dissaskatchewan trously poor weather patterns held up better and didn't affect them as bad as we had anticipated. that was a bonus. >> nestle one of the biggest buyers of sugar, milk and coco. they're keeping their prices in the low to single digit price range. how critical is that? >> very critical. in the first half we had expected margins to be down on an adjusted bases by 20 bases points. they expected it down by 20 bases points. it's in the context of raw materials price pressures which impacted the gross margin by 50 bases points negatively.

despite that 50 bases points negative impact because of inflationary raw material costs in the first half, they still managed essentially to achieve a flat out in terms of margins. in the second half the head winds in terms of inflation marry raw material commodity costs will turn into a tail wind and, hence, the high level of confidence of delivering this constant currency margin improvement for the euro as a whole mainly driven by this big swing in the second half. >> simon, it's john calling from asia. i have a question for you that relates to our own view to the broader sector consumer staples, an area that we're overweight pretty much across the region and one that's frankly comfortably outperformed over the last 12 to 18 months. it's turning very much into a momentum story. people are investing in this particular space. it's doing particularly well

albeit coming slightly more expensive, slightly more richer on standard valuations. is that a similar situation in europe, is the staple space crowded? is there the risk that at some juncture momentum may, i guess, seed in favor of value? how would you better position and answer that question? >> well, john, yeah, we've experienced the same thing in europe, of course. not only over an 18-month period but virtually any period you would like to look at, even in the run up to the peak of the cycle in 2007 the european staples were outperforming. there are some underlying structural reasons for that at work particularly in respect to category concentration which has been unprecedented in the last decade historically. but i think where it's critical in terms of the relative valuation of this very critical index is, of course, the relative demise of the financial

sector which still considerably explains the relative outperformance of sectors such as ours. so considering that i would say there was also a massive asset class quality towards the ultra blue chip dividend cash pairs within our area in europe and where you are actually locking in a yield on a five-year view -- average view or ten year average view, we've done the exercise here at jeffries benchmarking against the major sort of sovereign debt markets and what you're getting, of course, which is a piffling return in terms of cash coupon from the major bonds. auctions currently. you're locking in 3 to 400 bases points. it is growing in terms of growth, cash returns, best banner chief positions that they've had virtually in their history despite a difficult environment in material markets and they're delivering a

security in terms of cash yields, particularly for that part of the sort of i would say particularly the pension fund industry which is desperately hungry to find lock in income, a yield which it's not finding on the debt side of the asset classes. that is an area that i think is very important for us as well. >> simon, i feel like a pupil here. it's fascinating to sort of look at the sector as you're talking more broadly. i wonder with names like kraft also posting reasonably strong results if the differentiation there is something you would recommend people zero in on or if you just like the sector broadly? >> we do like the sector broadly. we think that really the lead indicator for a reversal or an adjustment in terms of positions, of course as john was saying, it is a crowded space in europe, john, of course, because of the attributes of what i just mentioned. if we look at the asset class

more broadly and there's such af -- we have very talented analysts in the united states whose doing great work on the name kraft, yes, we are favorable in terms of owning these. we think the pq in terms of the asset class, positioning within the much broader landscape of decision making, the various asset classes is proposing traditional portfolios is really the financial sector and the eurozone financial sector in europe. once that starts turning then i'm afraid we'll be on the back. as long as we continue going through this crisis there are very, very few places where you can put your money and have the returns, cash generation particularly considering that there are other traditional areas such as pharmaceuticals that are having much harder times. >> a report in the storm. simon marshall lock year, thanks so much for your time. amazing. you talk about how nespresso has

been doing. >> here in europe? >> yeah. he's obviously selling it. >> yeah. maybe he has a stake in the shares. that would be a smart strategy. moving on, japan central bankers have voted unanimously to hold off on anymore buying. we have more from tokyo. >> yes. as largely expected, the bank of japan kept its $890 billion asset buying fund unchanged along with its new zero interest rates. the central bank says the domestic economy is picking up at a moderate pace. when it comes to production and exports, it showed concern with the european debt crisis and u.s. recovery underlying the key risks. yet, fresh data shows machinery orders in june were on the rise jumping 5.6% from may. the yen climbed to 73.8%

reacting to the b.o.j. statement. as u.s. treasury ten year yields continue to rise, traders sold off the yen. bond traders bought back jgbs today because they agreed to ss a sales tax hike bill. that's all from the nikkei business report. continuing with our central bank watch. now to south korea where the bank of korea has taken a page out of the rba script. it's keeping its powder dry for now. like the australian central bank says, the bok wants to keep it there. they're thinking about another easing. we're joined from seoul. the market as usual jumping to conclusions here? >> yes. most columns here are factoring on more rate cuts in the second half of this year. the bank of korea warned that they will underperform for a

while. that's due to rising risk from europe and sluggish demand from major trading partners. they'll cut costs before december's presidential elections as the country's economy needs to rely more and more on consumer and corporate spending. all of this while exports remain sluggish. they sank 8.8% in july. it's the biggest annual drop since 2009. there is no supplementary budget set aside. official alzheimer's have hinted that the economy may not reach its 3% growth projection this year, which is the lowest level since 2009. meanwhile, the consumer inflation rate eased below 2% for the first time in 12 years of giving more leeway for policy makers to cut interest rates. economists say that will be useful for korea's fighting persistently high levels of household debt. kelly? >> thanks. lastly, there are no surprises from indonesia's central bank.

it left its policy rate unchanged at 5.75% for the sixth straight month. economists don't expect any stimulus after southeast asia's economy had higher growth. let's get back to john woods at city private bank. john, having reiterated all of these major asian central banks basically staying on hold, does it matter if it seems that china is going to be moving anyway? >> look, i think there's basically a common theme running through the central bank decisions. there's the view that export growth is diminishing and the growth kicker that stemmed from external sales will diminish for as long as the likes of the u.s. and the eurozone have a depressed consumption. and at the same time we're seeing some resilience in domestic demand thus far and, you know, we only need to look

as far as the retail sales for china to get some evidence of that. but nevertheless, i think the focus by central banks across all of asia is to support growth and to that extent monetary policy will be used judiciously, but increasingly we will expect to see some further fiscal stimulus and fiscal measures including tax cuts, etc., to support growth. now that is a theme that's common in china, common in korea certainly common increasingly in thailand or malaysia. for those countries with a robust components of the countries, the likes of philippines and indonesia are part of that, there is some leeway certainly. we've seen a bit of a growth pot in indonesia which has kept them somewhat cautious with growth risks on the up side as opposed to other countries around the region but nevertheless i think the underlying focus is on the impact of the deceleration of

growth across the developed markets and the impact specifically on external balances, how that will affect currencies, and specifically as far as we're concerned, how that will affect local assets. for that reason i think there will probably be a greater focus on local currency bonds, not specifically yet but i suspect into the fourth quarter of this year and into the first quarter of next. >> thanks, john. we'll have more in a bit. let's remind you what's on the agenda for asia. the next 24 hours. july trade and money supply numbers. hong kong's out with its second quarter gdp numbers. singapore will report the firm's third quarter earnings. >> the thai company is making a bid. winter is coming and russian officials are in london ahead of the 2014 games in sochi where they will host the world at the

olympics. we're joined by the ceo of the 2014 olympic games. welcome. it's great to have you here. having seen how things have gone in london, what momentum do you think you're carrying now as people turn their attention to sochi. are you ready? >> i was fortunate enough to participate in several olympic games, and now we brought here more than 150 observers to follow the success and the positive experience of our colleagues from london organizing committee. i should tell you that we already can call these games exceptional and congratulate both organizers and londoners of great britain with the great success they've achieved so far. >> what for you makes it exceptional? what is it the thing that stands out for london in that phrase? >> the organizers are modestly proud. they should be proud that they perfectly handled all the

traffic challenges, the security at the high level but still gently and smoothly and many other aspects that's behind the stage by creating the atmosphere but without national team on the podium it hardly would be successful. they showed the team of great britain performed very good. >> what do you take as you go back into planning your -- the two-year countdown to sochi, a little less than that really. what is it you take and say, okay, this is where we can tweak things? >> in sochi it's a bit of a different project. we started everything from the scratch using the opportunity that we were building from literally nothing. the dream project using the best process. it's like to build a new city of 150,000 inhabitants in one place.

the most complex and efficient infrastructure ever. we are learning from the experience that they're having here in terms of how to organize the biggest event in the world. >> the biggest construction site in the world is what some are calling sochi right now. are you going to be ready? >> we're well on track. in some area we're even ahead of our ambitious plan. the main goal is to deliver olympic-related infrastructure at least two years to the game. we already successfully tested our mountain cluster. this year when the indoor venues and the park will be commissioned, we will test the cluster. >> you've created, as you say, this place that didn't exist before, which will give it a unique central sort of everybody at the games will be there altogether as opposed to being spread out in london. what's the legacy?

what do you do with this center after the games are finished? >> before it was old style soviet resort. now we turn it into all year round resort first of all for the people of russia and into the international winter sport destination. it's all about legacy. without legacy it will be useless. >> the airport, when will that be up and running? >> the international airport has been recently commissioned. >> great. ceo of the sochi, thank you for joining us and good luck. >> best party you've attended so far? >> yes. we are quite busy here and we all regret -- >> jamaica, brazil? who's putting on the best? >> we're handling sochi park in the winter here in the very heart of london. >> okay. >> i did too. and on the skis at sochi park. i was over there.

it's impressive. the longest lines of any of the houses and one of the more fun ones as well. >> good. thank you. european stocks meanwhile, we've turned slightly. bouncing up earlier in the day. flat for the ftse. the dax down a third. up .10 for the ebit. it won't deliver much in the way of returns. >> we'll take a look at what's happening across the bond rate. 1.44 percent, up to 1.58. italy yields down to 6.78% and 5.58% respectively. on the currency markets, your dollar fairly steady. the aussie dollar has been the one to look at. 105.76. chinese data well over 106. preset at 78.50. still to come on the program, it may be quiet in brussels as august sets in, but

the eurozone crisis could be back in full force by september. we want to know who could exit first. that's coming up. [ male announcer ] this is the at&t network. in here, every powerful collabora 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. ♪

the newest term is brixit. the newest possibility of the u.k. leaving the european union comes after people are concerned about reforms on the british economy. exprime minister tony blair is concerned about this possibility. for more on the story you can head to our website and get involved in the discussion there. we want to know with all the grexit, brixit, we want to know which one of these is most likely to happen. you can e-mail us at cnbc.com. you can reach us on the e-mail or go to kelly underscore evans or at ross westgtate. >> we already disagree. i think it should be called brixit. we'll talk about that. the e.u. says the troika won't

discuss anything before october. the latest 31 billion euro was supposed to be disbursed in june but it was delayed on the back of general elections. what is going to be brought for investors. john woods is still with us. john, you talk about how cautious you are. you know, what's your own view of how the eurozone might continue to infect the rest of the world? >> well, i think the eurozone plays an extremely important part, but as important to our clients here in asia obviously is the effect of china and also the powerful effect of the u.s. taken together, it leads us to caution with our money as the global macro head winds impact risk assets. within asia we are noticing a clear bifurcation in terms of performance between southeast asia and north asia, the former

being a lot more domestic oriented, the latter a lot more trade dependent and therefore vulnerable and exposed to the global vol la tilts in the developed markets and away from the macro side and the country allocations we also have, as i highlighted earlier, have a much greater degree of focus on the defensives, the health care, discretionary, consumer staple names which have consistently outperformed. the risk is a momentum play and they're becoming a lot richer and we have to be a lot more concerned about whether or not those markets are going to turn around. a final point -- go on. >> i was just going to -- i was struck earlier, i was reading something this morning looking at the ftse over the last five years. it's five years into the financial crisis, john. the ftse is down about 9% but if you add in dividends reinvested it's up 8%. and talking about yield and

dividend pays, i just wonder where we are in the evolution of good, solid, regular asian companies paying dividends? where do you go to find that? >> well, if you look at the dividend stream or the investment strategy over the past five to ten years, dividend strategy has comfortably outperformed growth, has comfortably outperformed momentum. in fact, among local investors it's by far the preferred strategy. you're absolutely right, if we were to simply rely on this approach, i think our total returns would be a lot better protected, but away from perhaps equity yields and focusing more on bond yields we've had a much stronger response to the credit rally here in asia bonds are getting oversubscribed within a matter of hours as a sort of rally that we're seeing here that happens once in ten years. clearly there's a high degree of

enthusiasm and appetite for fixed income which i think appropriately reflects a general level of risk appetite in this part of the world. >> john, always good to see you. thank you for joining us. john woods, chief investment strategist at city financial bank. we'll take a quick break. first, china's government is out saying it doesn't seek a return to double digit gdp growth. it doesn't look like they'll get there this year anyway. news corp has posted a loss in the fourth quarter after writing down the value of its newspaper business. i might know a thing or two about that. we'll break down those numbers when we come back. ddd#1

welcome back to "worldwide exchange." i'm kelly evans. >> these are your headlines from around the world. falling prices and weakening sales in china all fuel expectations of further policy expectations boosting financial markets. red ink from news corp. revenues down in most businesses. plus the sweet stuff for nestle stock. the world's biggest food group posted better than expected first half earnings and says it expects raw material prices to ease. plus, one of the most watched trials in chinese

history has been adjourned. gu kailai has not contested the charges. you're watching "worldwide exchange" bringing you business news from around the globe. okay. if you've just joined us state side, very good morning to you. we've had data out of china which will bring us to the top. the central bank has all it needs to ease pressure. there are signs of little inflation on the factory side. ppi posting its steepest drop since october 2009. this is china's government. they're not seeking a return to double digit gdp growth. worth pointing out july industrial output, the weakest for three years, 9.2% year on year. it was forecast at 9.8%. speaking out, jpmorgan's chairman says it may be hard for

the pboc to boost growth than many think. we've had some monetary easing in the last several months, however, the economy has yet to respond to the stimulus the central government put in so, therefore, i think the policy makers will have to get much more creative to really boost the economy. well, let's take a look now at how u.s. markets are positioned as we head closer to the start of the trading day trying to make sense of these cross current. on the one hand, more stimulus from china. on the other, growth figures continue to disappoint. the dow jones industrial arge is inclined to open higher by 10 points. the nasdaq 4 points. look at the hand we've been dealt with overnight. ftse 100 is up just 0.01%. it's struggling to stay in the green. the sxetra dax is up .27%.

>> that's where we're going. we did see yields fall today a little bit in italy and spain. we popped over 1.1%. ten year yields at 6.85%. ten year yields, 5.83. keep your eyes on treasuries. the auction wasn't strong demand. 1.68%. the highest we've been on yields for two months. remember, we were 1.38% record low yield, what, two weeks ago or so? kurnsly markets, reaction to the chinese data we had out and hopes of more stimulus. saw the aussie get up to 106.15. below that 105.72. dollar yen around the 78 mark, 78.50. euro dollar, 123.40. we had been up to 124.44 on thursday which is a two-month high. commodities today very much a focus post china. brent at this 112 mark. we slipped down into the 90s.

we've seen steady climbs. nymex up .03%. how do chinese investors -- asian investors, sorry, respond? we have more in singapore. >> thank you. asian markets continued their upward momentum on the easing hopes from china. it's higher by .6%. property stocks continue to outperform. beijing's recent investigation into 16 provinces shows that most cities have been diligently carrying out property restrictions and that helped to calm speculation of a fresh round of curbs. hang seng climbed 1% led by developers and main land banks. the nikkei gained 1.1% on the day and now sits up 5% on the week. oil and coal companies will allow the steel makers to

continue. exporters and manufacturers lifted the kospi higher on easing hopes of the bok. the central bank decided to keep rates on hold. the aussie market was a market lager do you marginally on profit taking. india trading down by about .3%. back over to you, kelly. >> thank you. hank smith is chief investment officer at half very ford investments. hank, good morning. thanks for getting up for us. as we look over to china, do you take heart from the fact that there will be more policy easing on the way or are you worried about some of the signs here growth is slowing more than anticipated? >> no, we take heart because that's one of the major head winds facing equity investors, china hard landing versus soft landing. so the more evidence that comes out that they have room to ease here i think is a positive.

we still have the fiscal cliff issue in the u.s. and we still have the european crisis, although i think we're getting closer hopefully to a resolution there. maybe we need about three or four summits, who knows. >> do you take the china figures at face value though? given the additional comments about not looking for double digit growth, some of the anecdotal information, doesn't it show that the slowing is sharper than the headlines would suggest? >> well, look, china is slowing. a big slowdown for them is instead of 8, 9% growth, 5, 6% growth. the fact is they have the wherewithal, they have the fire power to come in and restimulate whenever they want to. i think that's important. >> they were saying earlier that what they should do is cut taxes more than anything else. you've followed how they use

their fire power, do you care whether it's monetary policy or fiscal policy? >> well, they have plenty of excess reserves to do it. i would say not just in china but in europe and in the united states we should start focusing on tax policy. whenever we talk about stimulus, spending is always associated with that. but we never talk about tax policy. so i think that is a very important ingredient globally, not just in china. >> also you made that point earlier about, you know, with maybe getting closer to something that investors can hang their hats on in terms of europe. here we are five years into the crisis. i mean, there is a point about how far through this crisis do you think we are? >> well, i think the answer to that is how far through at least in the united states but also in europe, how far through are we in the deleveraging cycle?

so i think in the u.s. we're probably 50, 60% through the deleveraging process and probably much less so in europe. we've done a better job at addressing our debt issues certainly with respect to consumers and our financial system. we still have a lot of government debt though. in europe they have much further to go. >> so the implication is, you know, at what point does it stop being an impediment for investors then? if we're in a long period of deleveraging, isn't that going to weigh then for even longer? >> well, i think it argues for slow growth at best, and we're seeing that clearly in the united states. we're just kind of muddling along. we think the risks of a recession are pretty low given the extraordinary monetary stimulus that's been in place for an extraordinarily long period of time.

we think the key at this point is better fiscal policy that will -- and particularly taking care of this fiscal cliff issue. that won't happen until after the elections but once it does happen it's going to really unleash a lot of uncertainty and we think the economy could have a nice spurt once they take care of that fiscal cliff issue. >> hank, good to have you on this morning. more to come from you. stay there. also reminding you what's on the agenda today. weekly jobless claims are out at 8:30 eastern. that rose by 5,000 to a. at 8:30 we get a total of trade deficit figures. and at 10:00 a.m. june whole sale trade numbers will be out. we have tim horton reporting earnings before the opening bell after the close. we'll hear from nordstrom and lion's gate. >> ross, there's only a few more days as you and i know of the london 2012 olympics.

earlier on the show we spoke to the ceo of sochi 2014. they're holding the next winter olympics. he remarked how exceptionally well organized the london games are. he said they should be extremely proud. many agree. peter from the u.s. says london has done a great job. i went to a football game last weekend and it was well planned. others seem to echo the sentiment. while we don't want to be premature here, do you agree that london has actually done quite a good job of organizing the games? e-mail us or tweet us or reach us directly at kelly underscore evans or @ross westgtate. >> still another 3.5 days to go before everybody can say job done. still to come on "worldwide exchange" how marissa's move at the top of yahoo will inspire more kids to go into jobs at

i.t. we'll take a look at teaching girls to code.

you're watching "worldwide exchange." you're watching "worldwide exchange" and these are your headlines. the latest string of data out of china shows weaker retail sales. >> red ink marches news corp.

>> nestle posts better than expected first half earnings and says it expects raw material prices to ease. news in the u.s. marissa may be making her news at yahoo. mayer is telling employees that the top priority at the struggling web company should be products. the journal says she's reportedly told yahoo workers, i want you thinking about users. marissa mayer is setting a good example for young women who want to break into computer science. there's still a glaring gender gap in the i.t. community. a new program is aiming to bridge that by helping young girls learn how to code. cnbc contributor natalie morris joins us with the story. natalie, good morning to you. how far behind are girls in wanting to be i.t. code programmers or anything else in the industry? >> well, it's not so much that girls can't do this.

of course women can do math just as good as boys, but you know there's not the encouragement. and so this program is a summer camp in the heart of new york city that aims to teach high school girls how to write code and computer programming. >> reporter: backed by big name technology companies like google, ebay and kputer. girls who code is an eight week program that culminates at google headquarters. >> the first week we used scratch so i learned how to program on that. this week we're using an application called python. >> reporter: they write programs for robots, websites, mobile apps and more. >> are your friends into this? >> no. none of my friends are taking computer science but i've told them about it and they're getting more interested. >> reporter: girls who code was started by a woman in congress. >> one of the things i learned was a huge technology divide in girls and really wanted to make

sure when we think of the jobs of the future that girls and women are not left behind in new york city. >> reporter: do you think this is a gender divide or socioeconomic divide? >> i think it's both. when there were technology tracks being offered, girls were not participating in these. >> reporter: the girls in class say they appreciate the fact that there are no boys aloud. >> since we're all girls i think we have a little bit more confidence and we just like expose our ideas out there. >> i'm rotating the model. >> reporter: in addition to classroom demonstrations there are also field trips visiting women at companies like facebook and four square. leading technology companies are quick to embrace the program. >> we've been talking about the lack of women in technology for a long time. we've been talking about the problem of contacts and girls who code offered a solution. >> the data does show that programs like this are needed. only 14% of computer science

degrees go to women and 25% of jobs in the u.s. are held by women right now. ross. >> natalie, good stuff. we'll see how that goes along. >> i entertained being a computer programmer in high school briefly. >> yeah? >> i did. i took some of the classes, but what was hard is you have to be so perfect. you get the code wrong at all. plus you're inside. >> you get the code wrong you might end up with a stock trading glitch. >> a glitch. yeah, exactly. >> big, important job. >> it is. >> you could probably code economic statistics. >> i would like that actually. >> feed that into it. >> i would really like that. let me handle jobless claims. coming up, news corp.'s fourth quarter profits get weighed down by a poor performance in the company's publishing business. will the upcoming split of its operations put the company on track. we'll go behind the numbers next.

welcome back to "worldwide exchange." this morning let's take a look at how the u.s. futures are trading. dow jones industrial average higher by 15 points. nasdaq 5. s&p 500. asia showed stronger gains on this hope of china stimulus. those aren't necessarily there yet.

>> we hit a session low an hour or so ago. it was a flat session yesterday, ftse, dax what we have. the ibex up 1/3 of a percent. >> news corp. posted a net loss reflecting a $3 billion writedown of its business. the media giant did earn 32 cents a share in line with estimates. revenues fell 7% as a strong performance by the company's cable networks was offset by declines in broadcast, publishing and film. news corp. plans to split its operations into two companies expects prove fit growth at a high single to low double digits number this year. joining us is james diks, media analyst at web bush securities. james, does what you learned from the company yesterday change your fundamental view? >> no, i don't think so. you know, again, as you indicated, you know, the fiscal fourth quarter results were generally in line with

expectations. i think you have some macro challenges which i think are going to make weigh a little bit more on the first half of their fiscal year than expected. so the guidance for the low -- you know, the high single digit, low double digit operating growth was pretty close to what i was expecting. i was looking for 11% before they gave their guidance. >> talk a little bit about the split, too. you know, this company is going to segregate the publishing assets. those didn't do well obviously, as well as some of the other parts of the business. so what's the outlook for those two businesses going forward? >> yeah. i mean, publishing, not only does it have some secular challenges, it also has some particular economic head winds, especially in australia. it looks like the revenue declines they were seeing in advertising over the course of the last fiscal year are going to continue for a good part of

the next fiscal year. obviously in the u.k. they not only have the challenge of an economy which is slipping back into recession but they have the disruption that's been caused by the closing of the news of the world and the need to right size the cost structure there. so there's a lot of moving pieces in the publishing unit and that undoubtedly was one of the things that contributed to the big writedown in the fourth quarter. >> james, i see the journal it sieve is speculating that the split actually could happen pretty soon. its we're getting towards the end of the financial year which makes it a logical place to do it. how quickly do you think it's going to happen? >> they're still indicating that it could take, you know, a good part of their fiscal year. again, their fiscal year ends in june so it still sounds to me like it could take the balance of fiscal 2013 for them to sort out all the things they need to sort out.

one of the things they need to sort out is what the capital structure is going to be of the two split up companies. i think there's some lack of clarity on that is one of the reasons why the company indicated they're going to slow down the pace of their stock buy back in the first half of the fiscal year, which i think is something which investors might have a little bit of concern about. >> james, is publishing a profitable business broadly speaking? is this an industry that you want to invest in? >> it's interesting. it can be fashionable to think that if you split up the company, that the most interesting investment will be the broadcast and the film and the cable assets because, you know, they're sexier in a certain way whereas publishing has had well-publicized difficulties for quite some time. oftentimes, however, you find that the company which appears

to be kind of the ugly orphan can actually be the stock which performs the best after a splitup. a lot of people who own news corp. right now will get shares in two types of companies. they may sell the print operation early on causing some price pressure on it. so if you p i can it up in that type of situation, it might actually be a good time to buy it. >> all right. interesting view there from james dix, media analyst at web bush securities. thanks for joining us this morning. in other corporate earnings release people are following is nestle. we'll find out what pushed the world's biggest food company to beat forecasts. the ceo says some of the accusations about its dealings with iran are, quote, very damaging and factually inaccurate. speaking at a conference call peter sands said he didn't recognize the $250 billion figure flagged up by the new york regulator as the amount of illegal alleged transactions.

the bank did receive some support from sir marvin king. i think all the u.k. authorities would ask is that the various regulatory authorities that are investigating the particular case try to work together and refrain from making too many public statements until the investigation is completed. that seems to be the appropriate time to make clear what the judgment is and what the punishment is. >> meanwhile, on the libor front, u.s. prosecutors are offering several former ubs employees immunity in return for information about the rate rigging scandal. that's according to the "wall street journal" which quotes sources close to the investigation, they say it was offered to people who had relatively junior levels at the bank. reuters reports that an rbs error caused a big spike in the swiss rate. they confirmed the error was

made by a u.s.-based trader. it set off a come to nor trader triggering a wave of algorithmic trades. if you can't say that anymore, it's computer controlled. >> maybe some of the girls who code can do that. >> as far as i can tell, that coding story, girls when i was young certainly talked in code. i have no understanding of them at all. >> there's no shortage of girls who code in your world? >> yeah. still to come, we'll talk ipos. and we'll preview the trading day on wall street. >> bringing you the latest on the trial in china of gu kaila ssi. stay tuned. gu kailassi. stay tuned. issi. stay tuned. .ssi. stay tuned. i. stay tuned. i. stay tuned. . stay tuned. gu kailai. stay tuned.

. welcome to "worldwide exchange." if you're just tuning in, i'm kelly evans. >> i'm russ westgtate. these are the headlines. weaker retail sales in china, all fuel expectations of more policies in boosting financial markets. red ink for news corp. revenues drop across most of its businesses. plus it's a sweet start for nest will he shares. they posted better than expected first half earnings. they say raw material prices are going to ease. plus, one of the most

watched trials in chinese political history adjourns. gu kailai has not contested the charges. you're watching "worldwide exchange" bringing you business news from around the globe. okay. all the talk about china slowing but china easing has left markets trying to digest the news this morning. flattish open implied at this moment. the dow jones industrial average looking higher by about 20 points. the nasdaq by 5 or 6. s&p 500 trying to add a couple of points. europe is a different picture. the ftse 100 is up just a bit. the cac out of paris is up by .1%. roughly the same for the ibex 35 out of spain, ross. so how are you supposed to make money and invest in the markets?

just a recap of what some of cnbc's guests have already told us today. >> the reason why platinum is heavily used in europe is that europe relies a lot on diesel driven cars and diesel engines tend to be more platinum intensive. >> right now i certainly wouldn't be piling into risk assets or making a very large shift from my fixed income investments to my equity or further other risk assets, but in terms of a long-term buying opportunity, i certainly think that equities here still have a lot of value. >> we think gold represents a store value. it's not been a great investment, but technically getting back to your technicals it's held in at 1600. a break of 1640 would be very, very attractive. our target is 2,000.

maybe by the end of the year but perhaps over the next six months. let's talk ipos. >> few of those going on this week. >> one is stirring up a bit of controversy tomorrow. they'll start trading on the u.s. stock exchange. they want to raise $300 billion. the glazier family joins the club. they'll keep half of the cash in the sale. the rest will be used to pay down the debt. there won't be anything going into the club. >> well, we'll have plenty more on this, i imagine, as we get ready for that listening tomorrow. flotation set to raise more than a billion dollars. that's the most since facebook went public back in may. blooming brands, the owner of outbeak steakhouse, closed up 13% after raising more than $170 million on wednesday. cke which owns carl's junior and

hard de's hamburger chains is set to earn $100 million. joining us is francis gaskins, president and editor of ipo desktop.com. thanks for being with us, francis. the ipos this week, what do they tell you about market sentiment broadly speaking? >> well, it's been a good ipo time since the five hp week hiatus after facebook. of the new ipos, there are five of them. four are coming from private equity companies that are bailing out into the market and selling at least 50% from selling shareholders and applying the rest to debt which is to probably pay dividends that the private equity people took out of the company. manchester united is one of those. as you said, they want to come public at a $3 billion market cap. there's no way that will happen. they have to mark it down.

i think they're living on, you know, last year or something or other because when they announced their june year earnings and revenue what i noticed was that the revenue was down 4% and usually if an ipo is going to be successful, what it does is it spreng boards into the ipo. i think man chester will belly flop. if you look at the operating percent of revenues, 22%, 19%, 10%, that's down, down, down. the net income has gone 75 million, 25 million, minus 10 million for a tax credit. definitely going the wrong way. if you look as a sports entity, the manager, alex ferguson is a genius. he's 70. he won't be around forever. a lot of people wondering what will happen when he retires. there's other big problems with the company that i haven't seen with others. they have a voting control issue where their class b shares have

more votes. when it's all said and done the insiders have 1.2 billion and the public shareholders will have 40. >> francis, if i can jump in here. while manchester united has its challenges, i wonder as you look back over the week how some of the other ipos have gone, what that tells you about investor appetite at the moment. we've seen such differentiation. facebook down 40% but then the likes of kayaks and an anies have done quite well? >> yeah. they came out and they priced something like 21% below the mid range and it's up 12% today. so if a company's profitable and if it's a big brand, well known, and the top line revenues are secure, it can be done. it has to be marked down a little bit. there was another one that came public yesterday. that was marked down and sold at the bottom end of the price

range. those companies that have revenue growth or profitability or brand can really sell. this company, manchester, you know, definitely has the brand but its financials are in trouble, i think. >> yeah. the interesting thing of course is on that they tried to float it in singapore and hong kong. looking at the recent ipos, what's the -- what's still a success and is still worth investing in? >> well, okay. this is so far since the last part of june there's been a couple really successful one. five below is up 93%. palo alto networks, that's a specialty retailer, everything is below $5. there's a couple that i happen to like. natural groeshers, fresh market and whole foods, that came public about a week ago. that's up 27% from the ipo price. i think that might be in the after market. another one that came public

last week was globus medical which is -- it competes in the specialty medical device area. and i think that one was up 12%. i think that might be interesting in the aftermarket. some of these are hard to chase. they're kind of on a high wire. another one that did well that came into public at the end of june was eqt midstream which is up 25%. they pay a dividend. there's been a couple of dividend paying stocks. the ipo market has been diversified and so i think what people should look at is companies that have good top line revenue growth and have a good pe ratio compared to the segment. >> thanks for joining us. president of ipo desktop.com. hank is still with us. hank, do you get involved in ipos or not? is it worth looking at these?

>> no. we focus on established companies that have long-term track records. it's not that there's anything wrong with ipos, but it's just a different risk level than our investors are used to, and i would say a healthy ipo market is reflective of kind of the animal spirit. so it's important to keep track of it. and i would say overall in the loost three years the ipo market has been fairly puncish and that's reflective of a lot of negative sentiment in addition to some regulatory obstacles like sarbanes obviously. >> describing the rally we've seen is kind of the one of the most hated stock market rallies certainly we've seen recently. do you expect it to snin and as people get back into trading mode this fall will that support equities or is that a risk factor? >> well, you're absolutely right, kelly.

it doesn't even feel as though we're up year to date in the u.s. markets. it feels like we're either break even or down and yet we have a decent return so far. yes, we think the markets do have plenty of potential because here we are 3.5 years removed from the bottom of the market, three years removed from the trough of the economy and sentiment is much more reflective of a market low than a market high. sentiment is so sour with high levels of anxiety and fear reflected by the tremendous amount of carbon the sidelines and money that continues to flow in to bond funds and out of equity funds. so there's plenty of fuel to power stocks higher and valuation's not a head wind. so if we can clear up some of these macro concerns that dominate the headlines every single day, this market could really move higher. >> hank smith, chief investment

officer at haverford investments, thank you for your time. one of the most watched trials in chinese political history has been adjourned awaiting verdict. we'll recap the story around gu kailai next.

you're watching "worldwide

exchange." one of china's most sensational murder trials in decades has begun and adjourned in one dap and is now awaiting a verdict. bo xilai is accused of murdering british businessman neil hayward. given china's conviction rate, a not guilty verdict would be highly unlikely. this trial is part of efforts to stamp out any dissenion ahead of china's leadership transition later this year. it's worth looking at how we got to this point. we're joined from singapore. the importance of this trial and i guess what it's done to the standing of the leadership or the transition to a new leadership. >> you're right, ross. actually, eyes are all now on this trial. up until february this year, in fact, bo xilai was a rising

star, a member of the communist party's branch. then it started to unravel. on february the 2nd news hit that the city's police chief was demoted. rumors swirled that that was because he fell out with bo xil xilai. he sought asylum at a u.s. consulate. the next day he immersed, officially put on a stress induced holliday. the incident didn't go unnoticed by the communist party's top brass. china's area was full of rumors that he had blown his chance of promotion. he indirectly addressed the situation. he then disappeared from public view. by march the 26th the u.k. was asking for china to re-examine the death of british businessman neil hayward after a leaked recording. within days beijing announced

that bo xilai no longer held any party posts and that was being investigated over hayward's death. the couple are now being painted as money and power hungry and by the end of april "the new york times" alleged that they were involved with wire tapping, including personal conversations with the president. what the sentence will be is closely watched. so, too, what happens next to her husband, bo xilai. bang over to you. if you're just joining us, you are watching "worldwide exchange" and these are your headlines. falling inflation, slower factory growth and weaker retail sales. red ink at news corp. nestle posted better than expected first half earnings saying it expects raw materials prices to ease.

focus on nestle today. the world's biggest food group beat expectations. falling food prices will help it meet its expectations. caroline, how have investors reacted to the figures? >> very positive reaction, ross. take a look at shares of nestle. they're up quite nicely by 2.5% at 61.15. you mentioned guidance. they cut the guidance by organic growth. it wasn't all that great. in terms of the outlook for the developed markets, nestle did strike a very cautious note. it said it expects the trading environment, particularly the developed markets and in particular, get this, north america, to persist in the second half of the year. so fears about a slowdown in the u.s.

in terms of the overall numbers, no doubt about it. those are very, very good numbers. excellent set of numbers as analysts point out. strong cash flow added to the organic growth number of 6.6% in the first half of the year. that is a little bit of a slowdown from the first quarter. still much better than expected number. if you look at the geographical breakdown, you'll see 13% in organic growth is coming from the emerging market. if you compare that to 2.6 organic growth in europe, that is certainly quite anemic. back over to you. thank you. news corp. posts a net loss in the fiscal fourth quarter. it has a $3 billion writedown of its publishing business. the media giant earned 32 cents a share in line with estimates. revenues fell 7% as a strong performance by cable networks was offset by broadcast, publishing and film. news corp. plans to spin its companies into two corporations. it will be in the high single to

low double digits this year. the commodity futures trading commission is set to unveil a proposal to create an insurance fund to protect people's monies. customers were left with a $1.8 billion short fall. the plan would give up to $250,000 protection for money. it would be funded by annual assessments on futures brokers. deposit insurance of a kind for these kinds of investments, ross. meanwhile, chevron says its refinery north in california is producing fuel at a reduced rate after a major fire closed its plant on monday. another fire broke out wednesday afternoon but was quickly put out. no timetable has yet been set for bringing the crude unit back on line although commodities traders expected it will remain closed for three months for repairs. chevron stock was up 1/3 of a

percent. what's on the agenda in the united states, weekly jobless rates along with june trade deficit figures. at 10:00 eastern we get wholesale trade figures. earnings, cole's, tim horton's, in order stron and lions gate. china's central bank, inflation dipped to a 30 month low in july. producer prices posted their steepest drop since october 2009. turning now to the u.s. more companies are returning cash to shareholders. "the wall street journal" citing data from s&p says the total number of dividend paying companies in the s&p 500 is 402 and that is a 13-year high. this year loans on 13 companies have started paying dividends including apple and dell. joining us is tom gogins. he co-manages the john hancock

strategic income opportunities fund and that apparently is up 7% year to date, tom. thanks for being with us. so is dividend investment a key part of your strategy? >> we're a multi-sector global fund strategy, kelly. we do have the opportunity to invest in dividend paying stocks. i think this is going to be a continuing trend as you cited as shareholders urge companies to return money from shareholders. as you mentioned a lot of technology companies such as apple are doing that. i think those stocks are best performing stocks in the s&p. >> does that support when you sit down and look at the market, where do you see opportunity and does a dividend paying company, for exampl get an edge over a growth company or traditionally a growth company? >> absolutely. i think given the amount of money that has flown into bond funds and fixed income in general, anything that is bond

like, such as dividend performing stocks, is going to get a lot of attention by investors. i think that's one of the reasons if you take a look why the s&p is up 11.5% year to date, most of that gain is from large multi-national dividend paying stocks. i think that trend is going to continue. i think it surprised a lot of people how strong the equity markets have been this year. >> yeah. is it sustainable, that strength, tom? >> i think so. you just did a segment about nestle. that's very much a typical global multi-national firm out there that's paying a dividend. i think people are going to gravitate to that steady, sustainable dividend paying type stocks rather than the growth area just because they're unsure about the macro environment, both here domestically and in the u.s. and on a global basis. having that consistent dividend i think is very important for investors. >> that sector is quite richly

valued on a historical basis. are the stocks going to get re-rated? >> i personally think so. when i take a look at some of the fixed income markets across the world when you have negative rates in germany and denmark and money continues to pour in there, you know, that's a trend that can go a long time before it reverses itself. i think, again, most of the money, most of the institutional investors, retail investors have been looking towards something that looks like fixed income or is fixed income and dividend paying stocks are certainly meeting that bill. >> how much is legislation going to have a play here? looking at the notes, dividend taxes were nearly tripled next year. is that going to have an impact? >> well, ross, i think it's -- the school is still out on that. certainly you have a lot of discussions, been around the fiscal cliff. i don't think anything is going to happen in terms of the fiscal cliff between now and november's

election and certainly after that there's going to be a lot of discussion. my estimation is that we're going to see an extension of the bush tax credits for another year until the new congress and new president are re-elected. president obama will get together and meet on that because that's going to be a very difficult situation if all of the tax increases go through. >> tom, good to see you this morning. thanks so much for joining us. >> thanks, ross. >> pleasure. that's it for us. we'll hand it over to u.s. "squawk box." more news coming out of the china. now four china police officials will be tried for an allege get gu kailai coverup. otherwise, that's it for the "worldwide exchange." the men's 200 meter is coming up tonight. something very special can

happen. >> stay tuned. >> "squawk box" is up next. [ male announcer ] this is the at&t network. a living, breathing intelligence helping business, do more business. in here, opportunities are created and protected. gonna need more wool! demand is instantly recognized and securely acted on across the company. around the world. turning a new trend, into a global phenomenon. it's the at&t network -- securing a world of new opportunities. ♪

today one of our favorites, david walker can talk so many favorite things. what the country is faces. >> taxes. >> also, oliver sarkozy. >> he's a banking guy. >> a big one.

good morning. among the top stories we're tracking today, chinese inflation data giving stocks a boost. standard charter wants to know if it can countersue a u.s. regulator. and record heat and historic drought conditions raising questions about a global food crisis. it's thursday, august 9th, 2012, and "squawk box" begins right now. ♪ rocking all over ♪ move over good morning. welcome to "squawk box" here on cnbc. becky's off today. she will be back very soon. let's get you up to speed on what's going on