welcome to today's "worldwide exchange." news of headlines around the world. europe and asia call low in what analysts call a technical selloff. bhp billiton puts away $20 billion mine expansion after second half profit tumbles 35% from a year ago. the first annual drop in three years ago. heineken tells us they're looking to counter a slowdown in european demand. >> we have taken the view of investing in top line all over the world and also in mature

markets where demographics are not very helpful. i think investing in innovation also in our industry, it's what boosts market shares and also value shares. after a 1-year wait, russia enters the world trade organization. in an interview with cnbc, the director tells us it will be no big boost for the economy. welcome to today's program. guess where i was yesterday? >> dallas? did you go to texas? >> no. i didn't go to texas. "dallas" the new series is launching in the uk. larry hagman, patrick duffy, sue ellen, bobby and j.r. were all there. >> you went and i didn't get a hat.

>> this is your hot. i like the way you wear that. it's very annie get your gun. hair and makeup -- >> coming up on today's program -- the last time i'll be with you until september. we continue our focus on europe's aaa-rated economy and ask if austria will continue to weather the economic storm through the demand. >> we're joined from new york and we'll get views on tell us the state of the global economy. silicon valley's two biggest we get reports. we'll speak to one analyst who says membership won't translate into growth for the company. dell's second quarter

profits fell 18%, topping forecasts but revenues were 8% down from a year earlier. that was shy of analyst estimates. companies also projecting a revenue decline in the third quarter and cutting full year earnings outlook. shares were down more than 4% in after-hours trade. in frankfurt this morning, adding to those losses now down about 6%. heineken reported first half earnings falling shy of forecasting even as strong emerge willing market helped offset shares in europe. the dutch brewer says it expects full year earnings to be fairly flat over last year. an interview with cnbc earlier the ceo tells us they look to take over a brewer in singapore. >> at least 45 days. what we try to do is complete

the deal before the 15th of december. >> coming up later, we'll break down those results and take a look at broader industry with alcoholic analyst and he'll join us at 10:30. australian drinks distributor coca-cola says strong advertising paid off. the glass may be half empty. executives worry weaker consumer spending is proving to be a challenge. the company owned 29% of coca-cola says it's ramping up plans to re-enter australia's premium beer market. in china, geely drove up first half profit by 9%. a boost in exports offset drop in domestic sales. they have been hit hard by the economic slowdown, but geely, who also owns volvo, is expected to fare better than most peers.

continuing with china, china telecom dialed down first half profits by more than 8% but still beat expectations. phone companies facing higher marketing costs. telecom shares boosts after news it's buying 3g assets of parent company. they're up 4.5% now. so here we are. dominated by red, which makes a change for what's happened over most of the summer. advances outpace decliners -- or decliners outpacing advances. this is the likes of the european, the dax and cac closed off four-month highs yesterday. xetra dax are down. ibex the best performer in the

last couple of months, down 1.2%. we keep an eye on yields in spain and italy. spain we're down on with the lows we've been for recent months, 6.21%. ten-year yields are low, 1.77%. we're up to 1.863 tuesday near three-month high. today we keep our eyes on bundz, selling a new september 2014, no coupons, no yield on that. paying no interest to investors to demand might be slim for that. euro dollar, the two-year low we hit a month ago was 1.2040. dollar/yen, steady. aussie/dollar down at 1.0444. that's where we stand right now. in european trade, what about

events in asia today. we have more out of singapore. >> thanks, ross. it's a sea of red. investors remain cautious of the fmoc minutes and data out of the u.s. and china. weighed down by automakers, but green technology stocked surged on beijing's investment plan in energy-saving projects. the hang seng lost 1.1% as a stream of earnings poured in. china telecom gained despite a profit drop. shares of automaker geely also weakened almost 6% as earnings were overshadowed by a grim out look for the sector. nikkei dragged down by steel makers, slumping the most in six

months as sales to europe and china dropped. kospi dropped lower for the fourth straight session. ship builders extended losses as federation of korean predicted a loss in the second half. australian market ended lower by 0.2%. petroleum slipped the most in three months despite a 4.5% rise in underlying profit. sensex now on the move lower by 0.25%. >> as we're saying shanghai composite down more than 4% so far this year. the worst performing index in the region. what are investors to do? joining is lorraine tom, director of s&p capital. thank you for joining us. when you look at what's happened there, with the shanghai composite, is it now cheap enough for investors? are we still very dependent on

getting extra stimulus from the government? >> good afternoon. i mean, what's going on in shanghai is a market that we're mutual in. if you look at broad shanghai market there's a number of smaller cap stocks in there that i think a premium have been suffering and is being seen in the profits coming out with the slowdown in the economy. yes, it's going to be a little more sensitive to, with what the government does, but, you know, in terms of valuations are relatively attractive but we think it's better to stick with bigger cap names. we have a preference for the shares in the hong kong market. >> why? >> well, partly because of -- i think it's knowledge of the relatively lesser volatility in earnings we may see, a lesser risk in earnings we may see from the bigger companies. fiscal spending, i think, is going to come from the -- obviously, from the government. it's going to benefit the state-owned enterprises.

the soes will probably spend a little bit more and also be involved more in initial spend that's going to move up. your banks are going to be lending primarily to the bigger companies as well. >> lorraine, earning season for chinese companies in the first half of the year is okay. i think earnings are up 7% from a year earlier. the outlook going into the second half, though, seems cloudier. what's your own view on where things are headed and whether weakness is priced in. >> yeah, i think obviously there's been a fair bit of disappoint want in asian earning season. i think a lot was anticipated in valuations. but, you know, still some sentiment hits, and you are going to see downgrades because a lot of analysts hadn't lowered earnings prior to the earnings, although there was some anticipation that it was going to be a weaker second half. i think what that means, where that leaves us is that we're in a market situation that's still

going to be driven by global factors, what's going on in europe, what's going on with growth in the states as well as in china, for example, and i think that's going to be -- that's going to lead the market and we do think that things should be bottoming. >> what i'm interested in is you're overweight in a number of secto sectors. real estate is an interesting call here because so many concerns about real estate. how are you playing that? >> yeah. i mean, real estate is -- is in a situation in asia where i think you're still going to see pretty decent demand. the main reason is mortgage rates in a number of countries here, singapore, hong kong, for example, are relatively low. you're still getting positive yields. for as long as that's the case, we think people are still going to want to buy properties. against this you've got the governments trying to rein in speculative activity, of course. the underlying factor is that we

have seen decent earnings come through from developers. we still think transactions and interest in property is going to be there. >> all right. lorraine, good to have you on today. stick around, more to come from you there. have a cup of coffee while we take a break. we'll be back. forbes releasing the list of the world's most powerful women today. and that has us asking the question, who might be named at the top in ? in 2011 german chancellor, angela merkel. michelle obama also taking the prize. let us know what you think. e-mail us, worldwide @cnbc.com, e-mail us @cnbcwex. i wonder if j.k. rowling might not be up there. >> you make the list for under-30s, right? >> yeah, i don't know. >> 30 under 30, world's most powerful women.

coming up next, russia joins the wto. find out why our next guest says membership won't automatically translate into growth.

japanese exports have slumped. the 8.1% annual drop was well short of median forecasts of a 9.9% drop. lorraine tan is still with us. lorraine, i mean, today's export data, fairly disappointing. what do you do with it as an investor? >> yeah, i mean, i still think it's going to be a little while before we see the data improve. we're probably talking at least another couple months. even what's going on with the stimulus in china is not really filtering through to data and we don't expect it to do so until towards the end of the third quarter. as far as japan goes, it marks a softening trend in gdp expectations, you're a developed country and your assets are

being compared, for example, to what's going on in the state. on a relative attraction basis i think there are some investors probably shifting back to u.s. equities as well. >> basically, if you have to choose, in the u.s., do you think investors are getting better earnings growth? >> potentially a better chance of earnings growth coming through. in japan you have exporters that have been hit by the strong yen. you have fairly disappointing earnings that have come out as well. >> okay. stick around, we'll talk about resource sector. meanwhile, after 18 years of negotiations russia will join the world trade organizations. analysts say they could enjoy a healthy bounce. we caught up with the director and asked him when they could enjoy the benefits? >> it's not the big bang effect. it takes time.

the most immediate consequence of a country like russia joining the world trade organization, you usually see on the investment side, joining wto for a country is sort of getting quality labor, which investors worldwide reduce foreign premium. >> speaking on cnbc earlier, veteran investors jim rogers said he could be at which timed. >>. >> i've been a huge skeptic since they broke up. to my own astonishment, i'm looking more favorably. i'm not an investors there at all but i'm considering it for the first time in my life. >> joining can us chief

economist for subsaharan africa for hbc. despite russia's worsening political situation, are you one that's turning more positive on the economy? >> i think it's true. it's important and good news. you shouldn't expect miracles immediately. it's a long-term process. you'll see export and import duties coming off a transition period, three on five years, and expect to see intangibles like business climate, reduction of nontariff barriers, better investment environment, et cetera. they expect gdp to see an additional of 3%. good news. again, nothing major to be expected overnight but medium to long term. >> how much can you expect the business environment to be improving if at the same time the environment in russia is deteriorating as we've seen with the political trouble and the way there seems to be a tighter hold on the economy from its leaders?

>> well, russia administration also has goal of increasing bank in doing business. this is their medium to long-term goal. obviously is happening in the context of what's going on externally. if you remember when china joined wto, we were at the cusp of a trade boom. we don't have that situation and so we just have to leave it to time and see what the authorities will do. >> what spillover impact does it have, you know, into the other areas that you cover? >> russia is very important economy in my region. the largest economy. the other big economy is turkey, poland, and south africa. russia does a lot of trade with emerging europe, with turkey, so if russia is to benefit from this wto entry, there will be obviously repercussions to the rest of the region. i think turkey would benefit a

lot. i think emerging european countries, the big ones like poland, probably hungary, they will benefit a lot. we'll see it over time. >> can you talk about the business cycle? when we look across eastern europe, we've seen some vulnerability there as europe's own economy has taken a hit. where do you see the most opportunity? >> that's a good point. unfortunately at the moment, whole senior region are intertwined with what's going on in the eurozone. we have small economies and technical recession like hungary, czech republic. now we're seeing larger economies gaining speed. what's happening in the eurozone is impacting the region through deleveraging and export trade channel. that impact is still very much relative. we haven't yet seen major turn-around. obviously, you know, there are big expectations from policymakers in eurozone to stabilize the situation.

if that happens, hopefully we'll see a stabilization on downward m momentum. >> it seems destabilization is huge. are we through the worst of it? >> it's difficult to say. it is dweblg not happen as we originally feared. western institution -- clearly hsbc's has smoothed out this deleveraging process. it all depends on how the eurozone financial situation and economic situation stabilizes. i think that impact will probably continue over many years. it's a long-term process. >> chief economist for central and eastern europe and subsaharan africa. thanks for your time this morning. bhp billiton is pressing the pause button after reporting a drop in profits. matthew taylor is following the story. >> a slight beat coming through

the big mine at bhp. 17 u.s. billion dollars was the figure attributable excluding exceptional items, down 21% from a year ago but slightly better than what the market was expecting of a number around $16.9 billion. net profit over the year, sliding 35% on lower commodity prices to $15.41 billion. bhp grew revenue over the year by 0.7% to $72.26 billion. the big news to come out from the miner is that it was deferring some planned expansion, particularly that of the olympic dam facility in south australia worth $20 billion. bhp saying it's seeking a less capitaltive intensive expansion of the site and will not improve the expansion before the december 15th deadline. it also said no other major projects could expect to be approved over fiscal 2013.

when it comes to dividend payout, bhp delivering a final dividend of 57 cents a share against expectations we would see a number of around 55 cents. in terms of the outlook, the company saying there will be some volatility when it comeswh comes to commodity market. >> they have presented a challenge to the industry. i'm confident the cost-saving initiatives we have implemented will ensure we're very well prepared for the challenges that lie ahead. >> it did say it expects longer term outlook for copper to be strong. it did say that lower commodity prices reduced its ibit over the year by $2 billion. that's the bhp result and latest from sydney. back over to you. >> that was matt looking at bhp. lorraine is still with us as well. perhaps no surprise you're underweight materials. how long do you think it will be

before the cycle turns around again? >> i think for us, i mean, before we move materials higher, i think we want to see some certainty or some stability as to what's going on in terms of growth risk. what you're looking at is pretty slow global growth. u.s. economy growing 2% in 2012 and 2013. the eurozone in recession probably. just basically means china is going to do growth about 8%. so, you're not going to have much of a demand upside to selling prices on a commodity front. i think that's the main reason why we're under weight. share prices reflect a lot of bad news, we don't see the positive catalyst coming through and there's still risk out there. bhp has put off kpex plans for the rest of the second half of this year. so, i think that's an indication that, you know, things are going to be a little slow and uncertainty at least for the

next six months. >> >> that will just keep us where we're at, there won't be a positive response to that? >> china just wants to go back to where they were at the beginning of the year. let's say, where they're sure they're going to get about an 8% plus growth. they're not going to get deterioration in the labor situation. and i think they'll be happy with that. they're wary and worried about the potential of speculative bubbles. >> i want to bring these results crossing the wire from zte. we're waiting on these this morning. looks like net profit came in stronger than expected, 244.9 million yuan topping the market forecast of 2.63 million yuan, according to reuters. first half net profit for zte has come in 20 million yuan stronger than expected. first half earnings per share

were 0.7 yuan. shares down half a percent. lorraine, some context here on these results? >> i think on the whole if you look at what's going on, i think a number of these companies have warned ahead of time they were going to see strong declines or -- in their earnings. under china law, they're supposed to announce if they have more than a 50% drop, let's say, on year-on-year comparison. so i think the earnings are probably anticipated. therefore, you're still probably seeing a little selling pressure come through. again, the near-term outlook ahead of the -- some data coming out tomorrow with a flash pmi output for china, i think people will sit back and wait to see how that goes. >> lorraine tan, thanks for your thought, director of equity research.

still to come on the show, austria was dealt a below. they say the country is still pretty well prepared to weather the eurozone debt storm. >> we'll discuss that after the break. ddd#1

these are the headlines from around the globe. stocks in europe and asia trade lower in what analysts are calling a technical selloff. bhp billiton putting away the shovel on a $20 billion mine expansion after second half profit tumbles, the first annual drop in three years. heineken delivers lower than expected first half earnings but the ceo tells cnbc he looks to counter slowdown in european demand. >> we have taken the view of intesting in top line all over the world and also in mature markets where demographics are not very helpful. i think investing in innovation also in our industry, it's what boosts market shares and also value shares. and after a 19-year wait, russia finally enters the world trade organization. in an interview with cnbc, the secretary-general tells there will be no big bang boost for

the economy. so, here we are, an hour and a half into the trade daigle in europe at the moment and stocks are down, as you can see. you have to remember, we closed a five-month half for xetra dax and cac since the middle of march. ibex after a very good run the last four weeks currently down 0.8%. >> there have been big moves in bonds over the last couple of weeks as well. ten-year gilt is more than ten basis points below treasuries. a gap that hit 16 to 17 basis points yesterday. that was the widest since 2006. meanwhile, spain and italy continue to see some relief there as we mold the ecb's latest bond-buying schemes, 6.18 and 5.59 respectively. ten-year bund, speaking of things lower than treasuries, yielding 1.52%. >> two years coming out of

germany today. again, the second auction with no interest rate payable. as far as euro/dollar, 1.2477 is where we stand, seven-week peak, still up. we held on to gains. dollar/yen steady. aussie/dollar is weaker. >> consistent with selling we've seen across asia. greece needs more time to implement reforms, the message the greek prime minister is expected to give to euro group head jean claude when they maed in athens today. samarsa said the extra time would give the nation, quote, air to breathe. this week we're looking at ratings of countries in the eurozone. today we turn our attention to austria. now, fitch and moody's still

have aaa on austria. stable for fitch, negative for moody's. standard & poor's is the outliar, a aa rating for austria. a negative outlook. last revised at beginning of january this year. that's the credit ratings as far as austria are concerned. in terms of the economy, not so bad compared to some of the others. they did actually have a growth in second quarter. not much. but it was growth, up 0.2%. not many can claim to that. debt to gdp ratio, manageable at 72.2%. unemployment, just 4.5%, one of the lowest unemployment rates in the entire european space. how have the bond yields down? they have tracked bunds over the last year. ten-year austria tracking, 2.1%. the last couple month spreads have narrowed between the two, as you can see. austria at the moment, it's not completely aaa, but the economy

looks okay compared to others. remember, this is always a relative game. >> it is. let's take a look at one of the examples on the ground of what's happening. they've been warned difficult times lie ahead after the world's largest brick maker missed analyst forecast. the ceo told cnbc that austria is one country outperforming the eurozone trend. >> you can't see europe as one. you have different economies, different regional spots doing better. you mention germany, for example, but you mentioned earlier austria, for example, is doing much better. other countries that are suffering. for example, in eastern europe certain countries are suffering, with continuous austerity problems and debt problems. >> joining us for more by phone is head of group research,

fritz. what's your perspective on the state of the economy and how vulnerable is it to continued weakness across europe? >> we think austria is in much better shape. why that's the case? because austria is, of course, very much related to central and eastern european markets. and what was, perhaps, perceived as a threat in the peak of the crisis 2008, we got now the message that the opposite is the case. so, we think that there is still some growth in central and eastern europe, always in relative comparison. that's also good for austria. therefore, for example, we do also have much better unemployment rates than in the rest of the world. >> certainly, fritz, if anything, austria looks better by comparison but won't be immune. as european banks deleverage, importantly, austria and other

eastern european economies are going to be vulnerable. what if anything can offset that? >> in times like this, more or less everything is vulnerable but we think that deleveraging is also very moderate and only gradual and orderly. why that's the case? because we think that growth perspective are still intact, especially in central and eastern europe. of course, you cannot lump together central and eastern europe from an economic stand point of view but you have to differentiate from an economic point of view. therefore, we are estimating much higherrowth rates in this year and also for next year, then in comparison to other markets. on the other hand, there are, of course, fractional relations. especially, of course, in the banking industry.

and the banking industry and austrian banks are still committed to all the countries. they are not leaving the countries, because there are better growth opportunities. and i think in that respect also that financial integration is key in the upcoming years. >> what we did see, fritz, during sort of the depths of the financial crisis is the currency risk potentially in eastern europe. so, is that something you can negate with their investments there? >> we do not see a currency risk in central and eastern europe because, as you know, a lot of eastern europe countries are now also part of the european union, but they are not part of the eurozone. there is, of course, further convergence perspective for all

the markets. therefore, of course, central and eastern europe markets are now looking into the further development of the eurozone, but i think they still have the advantage that they are in maturity, not part of the euro. therefore, they are looking very carefully into the current situation. >> given what we've been going through with the eurozone, the strength in russia's economy we've been talking about earlier on the program, do you think this block is increasingly looking east not west for its future? >> we don't think so, because as you know, as you know, emerging markets are overall perceived with some threats and, of course, not everything is beautiful in central and eastern europe as well.

international groups and industries are still investing in central and eastern europe, especially for example in the technology sector, in the automotive industry. that's not only the case for germany and austria. germany, still a aaa-rated economy. in austria, some companies are increasing footprint in eastern europe. that's an advantage because they are, of course, benefiting from lower labor costs. that's, of course, a competitive van for all the companies. >> fritz, thanks for that. good to speak to you. speaking to us from vienna. >> could austria's banking exposure fall foul?

logon to cnbc.com if you want to read that story and find out more. ross, there's also intn interesting point people are making about the homeland of the famed austrian economist and taking a look at the impact. taking a look at the impact on its economy. >> yeah. it's interesting, clearly, fritz thinking exposure to eastern europe is a good thing for the banks. it's up to the jury to decide whether apple or samsung violated each other's patent. john ford has the latest on the case from silicon valley. >> that's right. this case has gone to the jury now. apple and samsung made their closing arguments. the jury got their instructions. quite a few instructions, 84. it took the bulk of the morning for the judge to get through them all. this was really the case for e the -- this is really the chance for the jury to get their final bits of information on exactly how they should parse through all of this detailed patent information they've been getting for a dozen days. make a decision about who's right and who's wrong.

in closing arguments, apple's lawyers were up first. she showed a picture of samsung's phone before the iphone. looked at the keyboard. then showed samsung phone after? trying to make the argument samsung copied the phone too closely, including the lighting on the icon. samsung saying, not so. we were inspired by apple but we did not copy. by the way, those big screens, the flat glass on the front, that's just how a phone needs to look in an era when people are looking at video. samsung countering, apple has misused our patent in wireless and interface when it comes to photo sharing. apple makes the argument, no, we did not misuse that. that was proper. or things samsung didn't really invent at all. the jury now has this case. they're deliberating. who knows how long it will take them to come back with a verdict. when it came to the google/oracle patent case.

they took quite a few days, not quite two weeks. this time, anybody's guess. we know no matter which way this is decided, there will be an appeal. this isn't nearly over yet. back to you. let's take a quick look at what's on the agenda in asia tomorrow. datawise, expect markets to react to hsbc's preliminary results from china. asia earnings from bank of china, china minsheng and ping an insurance. heineken is scrambling to seal the deal in singapore's apb. which is in the best position to win the emerging markets race? ddd#1

welcome back to the program. well, who is the most powerful woman in the world. how do you even define such a thing? "forbes" is releasing its list of the most powerful women today. last year german chancellor took the number one spot, angela merkel. two years ago it was michelle obama. who would you name this year?

e-mail us worldwide @cnbc, tweet at @cnbcwex. meanwhile, american platinum confirmed anglo sooez wage demands. jpmorgan reduced it from underweight to neutral. also, lowered its price target. at the same time, they could issue new shares to compensate for production and revenue losses incurred by strikes at its south african mine which has left 44 people dead. lonmin says they are doing all concerned to boost -- >> it's total speculation. >> total speculation. and on tuesday -- yeah, actually, maybe we will do something like that.

>> not the first or last time we've seen that kind of action. all of this happening as the price of platinum is hitting highest level since early may. take a look of 1.2% on the day to a price of 1525.7. pretty significant move. we hadn't seen much of a reaction before but now that we're seeing more activity, not surprising we're seeing a jump. >> yeah. meanwhile after 18 years of negotiations, russia is joining the world trade organization today. analysts predict the gdp woulden joy a healthy bounce. china has been a member for more than a decade now, but the trade success has brought rising challenges as well. >> reporter: american beef and aussie orange juice, italian handbags and french skin care. chinese consumers are choose from a myriad of goods, thanks to wto entry in 2001. >> china has gotten much more direct access to world export markets and the world has, thus,

gotten more chinese goods at a cheaper price. which would be good for consumers, especially at the lower end. >> reporter: china's trade with the rest of the world joined six-fold since joining the wto. that's benefitted many global companies, like maersk. they say there's room to open to more foreign players. >> if you look at eu, for instance, you're saying the eu is a little more open, giving access to foreign shipping lines. there is restrictions. you cannot do shipment of cargo, originating from china. you cannot participate in shipping in river trades, for instance. it's not different. there are restrictions we've seen from big markets. >> reporter: there are notable areas where restrictions still hold back foreign competition, like financial services. the recent u.s. case against china's union pay at wto may help foreign players make more in-roads in this market. >> i think primarily the winners

are chinese consumers and chinese businesses who are now going to have an option to china union pay. >> reporter: beijing's strong support is a biggest complaint by trading partners. the solution may come only in the form of economic reality rather than wto rulings. >> i don't think china's government would be willing to open them up to foreign investors. until you see a well developed, vibrant sector in those sectors. >> reporter: china is playing a more assertive role at the wto as well. >> over the past three years china has brought a lot of cases against the u.s. and eu and shows china started to use the rules of the wto to protect its own trading interest. >> reporter: as china embarks on its second decade at wto. beijing has unveiled a slew of reforms to open the economy further. including less discrimination against private investment and foreign capital. while corporations and trading partners may be more concerned

with faster market access. experts say china's priority on reforming the domestic economy may be healthier for long in the long run. well, heineken has reported first half earnings that fell shy of forecasts, even as strong emerging market growth helped offset slowdown in europe. shares are trading lower on the back of those results as the dutch brewer said it expects full-year earnings to be fairly flat over last year. we're now seeing shares down more than 4% this morning. in an interview with cnbc earlier, heineken ceo said the brewer continues to benefit from emerging markets. >> whoa are first to, i guess, prospectus and call for emg so at least 45 days, but what we tried to do is complete the deal before the 15th of december. that's the timeline. >> i mean, clearly asian growth is an area that will be be benefiting from this

acquisition. i look at the developed markets and i see your comments relating to the growth story there are going to rely on higher impact brand marketing. chasing high growth with acquisitions and high impact brand marketing in developed and pretty stagnant markets. is there a ram fiction for your longer term markets? >> we have taken the view of investing in top line all over the world and also in mature markets where demographics are not very helpful. i think investing in our industry it boosts market shares and also value shares. that's what we do now for, i would say, practically two years. it starts to yield its fruits. we see market shares moving as well as in developing markets as in already developed markets. market shares up in the uk, in france, in italy, but also in the u.s. and mexico and several african countries as well as in

asia. >> when i look at what your company has done over the last few years and combined that with what ab have done, sab miller, we seem to be in a perpetual decade-long acquisition cycle. you're talking to journalists today saying there is going to be a pause in your acquisition strategy post the apb deal. do you think we're coming to the end of this enormous phase of acquisition of four enormous players in the market? >> well, look, you can observe a lot has been done. four big brewers have over half the total market in the beer in the world. of the beer markets in the world. we have seen very, very large deals. i suppose there will be further consolidation ahead of us. the pace of it remains unknown. it's a factor of opportunity and timing and the appetite of the

various actors to move. >> joining on set is analyst for breweries. that must be a fun job. who's winning the global race? >> it's not clear at this stage. i would easily say apb because of their acquisition. they have seen sales in africa. and, of course, the apb deal, it will definitely provide a boost to heineken as well. >> how tough is it for the beer industry, generally, globally? >> it hasn't changed over the past couple of years. we have massive maturity in western markets, demographic issues as well. people are getting older.

most markets have put it all on millennium generation that are having trouble finding jobs. >> the cheaper ones as opposed to emerging craft beers. is that not helping them? >> no. greatest winners in western markets is the craft beer segment. this is the craft beer type is what they're trying to stop somehow. they're trying to rediscover what beer is supposed to be. it's not just the craft segment. it's also the fact that more people are interested in wine or spirits -- >> is that going to bolster more m&a activity as they look to acquire those more successful brewers? >> i don't see that happening in the immediate future. i think the immediate target would probably be to expand footprint in major markets.

if anything, stronger than before now. >> you mentioned the spirits business. how different is it for the global spirits makers? i mean, they're also splashing the cash. >> they are. i do believe spirit manufacturers and producers have proved to be much more dynamic in innovation. the addition of flavors, tying into the whole effect, the broadway empire effect, these prove to be extremely helpful for the industry. it's something the beer industry hasn't managed to do up until now to the same extent. >> people have described the beer industry as turning into the wine industry. >> and the wine industry doing the opposite. >> exactly, exactly. i wonder, with all of this

acquisitions, there's an oe g aligopoly. >> it was just said we don't know how well it will work out but definition there's not many players left. that's why apb is so important. it's probably one of the last major -- relatively major targets left. >> and you see this going forward. >> slowing down, but, yes, going forward. >> again, guy with a great job, industry analyst for alcoholic drinks at euro monitor international. thanks for joining us on the program. coming up, apple and samsung move a step closer to judgment day in long-running patent dispute. who will come up -- who will come out on top.

welcome to "worldwide exchange." here are your headlines from around the world. a rare day in the red. equities in europe and asia trading lower in what analysts call a technical selloff after stocks on wall street here four year highs. dell reports disappointing figures as a slump in the pc market continues. heineken delivers lower than expected first half earnings but the ceo tells cnbc he's focused on sealing the acquisition of apb as they look to count air slowdown in european demand. >> we have taken the view of investing in top line all over the world and also in mature

markets where demographics are not very helpful. i think investing in innovation, also in our industry, it's what boosts market shares and also value shares. bhp billiton expendz a mine project after second half profit falls 35%, first decline in three years. hello to our u.s. viewers who may be approaching. after a couple days where we've seen green in the morning flip to red, now the opposite appears to be happening, at least starting in the red. dow jones -- wait a minute f we add this together, we're actually slightly in the green so far this morning. this color may change. nasdaq and s&p 500, both when you take fair value into account are expected to open roughly flat. maybe a nose higher.

1410, the latest level on the s&p 500. chart is not necessarily pleased we broke out to four-year highs yesterday. we'll get into that yesterday. cnbc ftse global 300 gives you a sense of what's happening around the globe. weakness in asia on trade figures. 0.27% to the downside. european as we see how that is carried into europe. ftse 100 is down by nearly a percent. as you mentioned earlier, this following several weeks of gains. have you to wonder, is it a pause in the rally or something more? >> one day in the big move. you say we're at those interesting levels. we'll look and see. as far as bond markets are concerned, another auction today of new 2014 debt out of germany. second offering no interest payable to investor. we're not necessarily expecting greatest demand for that over the course of the next hour.

ten-year spanish yields are lower. yields continue to fall. good news for them italy down at 5.57. u.s. treasuries lower over the session, getting back up to 1.86%. 1.78% is the yield. currency markets, euro/dollar right now -- yesterday we got to a low and held onto the gains. we hit that two-year low back on july 24th of around 12040. substantially above that and we're back to the levels we hit at the beginning of july. dollar/yen, 79.31. aussie dollar against the u.s. green back, 1.04. what's happening in asian markets today? >> thanks, ross. asian vorcis as investors remain

cautious aed head of the fmoc meeting. hopes fade for another cut in the near term. developers in automakers esctch lower. shares of automaker geely tanked as upbeat earnings were overshadowed. china telecomlock in strong gains on acquiring 3g assets. nikkei dragged down by steel makers. south korea's kospi finished lower for the fourth straight session. ship builders extended their losses as the federation of korean industries forecast a 28% drop in exports for the sector in the second half. australian market ended lower by 0.2%. petroleum slipped the most in three months despite a 4.5% rise

in underlying profit. india's sensex higher by a touch now. >> thanks very much for that. some news just crossing the wire from the home building sector in the u.s. toll brothers reporting stronger than expected earnings, saying its third quarter earnings per share were 36 cents, roughly double what the expectation was. revenue coming in at saying they'll deliver between 800,000 homes in 2012's fourth quarter. ceo saying, seeing the strongest demand in years. toll brothers aimed at higher end of u.s. home builders. shares down yesterday 1/2 a percent -- >> another anecdotal evidence about what's going on. as you say, they're the more luxury end of the market. >> and this sector has done so well over the last couple of

months. it's been on such a tear, if anything, this confirms that move. it's not necessarily clear whether it will add new energy into that. nevertheless, much stronger than expected. >> i think it's safe to say, best demand in five years is saying something. on the corporate front, meanwhile, dell's second quarter profits fell 18%. that beat forecasts but revenue declines of 8% was shy of analyst estimates. the company is also projecting a revenue decline in its third quarter and cutting full year earnings outlook. dell says pc distributors are holding back on buying machines as they wait for launch of windows 8 operating software this fall. dell shares were down 4% in after-hours shade and this morning down 6% in frankfurt. the jury will begin deliberations today in patent infringement case between apple and samsung. in closing arguments on tuesday apple lawyers said samsung took shortcuts by copying designs features from apple after they

realized they couldn't keep up. samsung told the jury apple is saying that to hurt consumers. after the fact, samsung trading down over 8%. international paper is the world's biggest producer of paper products. as demand for its core white paper business has dropped, the company is looking to diversify in other markets. last week international paper reopened part of a plant in virginia it had closed three years ago. the franklin mill will now churn out fluff puchlt lp, used in diapers and bandages and hoping to sell to emerging markets like china and india. joining us is ceo of international paper. thanks for your time this morning. since your company is an on the ground gauge of what's happening, tell us what you see happening now. >> we see the u.s. economy going sideways. we're now 3 1/2, 4 years post

the recession and we've yet to emerge kind of on a footy that's sustainable. we can get to more than 3% gdp growth. i think the issue is consumer spending. this economy, 70% consumer spending. until consumers get back into the market, i think we're going to struggle with slow growth and high unemployment. >> does that account for the layoffs eve seen in texas? >> texas? >> i know you're adding positions in virginia, laying off people elsewhere. >> right. what we do is we respond to demand. i think the adding of jobs and reopening the franklin plant is a great example of what u.s. manufacturers can do. we can be globally present and it can be demand in the u.s. or elsewhere in the world and the franklin project to repurpose facilifa si sillties in export demand. the point you made earlier talking about housing is a key to the u.s. economy.

most recoveries housing leads us out of the recovery. this past recession that hasn't happened. housing starts are starting to recover at a slow rate, but once consumers believe housing prices have stabilized, i think you'll see a rebound in the economy as housing comes back. >> you say you'll see a rebound. a weak rebound? do you know how that might pan out? >> if you think about it, housing starts bottomed out at 500,000, which was 20% of what they were at the peak. people who were experts in housing say normalized housing should be 1.5 million. we're half of that. i don't think we're going to see a snap back next year. but i think it's going to be a slow and maybe frustratingly slow recovery. housing prices started to stabilize. that's important because homeownership is affordable if

people believe housing prices are firm or moving up. >>. >> is it going to take more than that? what do you base your future investment decisions on? investing in the business and hiring people. what happens is a collection of individuals like you deciding, i've now got the confidence to invest in future growth. >> it is about confidence but also about responding to demand. my view is that we're confident enough to invest where we see demand. we are investing in india. invested $4 billion in u.s. in corrugated packaging. that investment was really driven by the need to put two businesses together. we have the confidence to invest

where we see a demand signal. >> john will stay with us for more. >> thank you. >> also just got some comments coming out of people's bank of china. governor says all tools must be available. we are in a period with china where we're wondering what extra stimulus measures we'll get. whether we get extra stimulus measures or more policies in reserve requirements as well. he says you have to look at everything. let's remind you what's on the agenda in united states. existing home sales are expected to rise. also the congressional budget office releases economic outlook. and at 2:00, the key release today, we'll get the minutes from this month's fed meeting. also in corporate news american eagle reports results before the

opening bell. also numbers from chicos, toll brothers -- we just got those -- and express. after the close we'll hear from hewlett-packard and guess. who's the most powerful woman in the world? highway do you even define that? "forbes" releases its list of the most powerful in 2012. last year angela merkel took the number one spot. two years ago it was michelle obama. who should take the prize this me around? we've seen quite a few. worldwide @cnbc.com is the e-mail, tweet us @cnbcwex. >> and you can tweet kelly if you think she's -- >> no, god help us all. >> we just need to you recognize that. still to come as well as record droughts across america's heartland, find out how american firms are coping. the ceo of international paper is staying with us to weigh in.

you are watching "worldwide exchange." markets in europe and asia trading lower in what analysts call a technical selloff for stocks after wall street hit four-year highs. dell reports disappointing second quarter figures and is keeping a cautious forecast.

and platinum hits a three of my month high as angelo confirms it's received wage demands from workers. european earnings heineken reported first half earnings falling shy of forecasts as strong emerging market helped a slowdown in europe. shares are trading lower on the back of the figures. it says it expects full-year figures to be flat over last year. in an interview with cnbc earlier, heineken ceo says the brewer hopes to move swiftly on a brewer of singapore's apb. >> pros speck tus and call for ecg so at least 45 days but what we try to do is complete the deal before the 15th of december. that's the timeline. >> australian drinks distributor says strong advertising pays off hoping to post 65% in first half profits, despite the wet weather. the glass may be half empty, executives are warning weaker

consumer spending is proving to be a challenge. the company which is 29% owned by coca-cola also says it's ramping up plans to re-enter australia's premium beer market. bhp billiton has announced it will take a $20 billion olympic dam project back to the drawing board. the firm originally planned to spend billions of dollars expanding the australian copper and uranium mine but the ceo says current market conditions mean a less capital-intensive plan would now have to be drawn up. reversal comes as bhp reported a 35% slide in fiscal second half profit. its first annual profit drop in three years. shares down almost 2% this morning. and the world's major paper producers, meanwhile, including international paper, have announced to raise corrugated boxes in response to what they say is tight supplies and strong export demand. john is still with us.

this is interesting. we're talking about a global economy chugging along pretty slowly at the moment. yet in this segment you're in an environment where you can raise prices. how does that figure? >> we see a tight supply environment. export demand is firming up and improving. inventories are tight. box demand in the u.s. is stable. it's going side ways. it's not declining, not robust but stable. in that kind of an environment where supply and demand are in balance, we see, you know, the opportunity and a need to improve our pricing of margins. >> does any more capacity come on stream or not? >> you know, there's always capacity coming on stream. >> it's increasing 3% a year. a normalized economy going forward, this is a growing market. it's a business-to-business market. so, there will be supply to meet

that demand. right now of supply and demand are basically in balance. >> what about costs. you know, you talk about integration there. how is it managing input costs? >> we're in the manufacturing business. management of costs is fundamental to staying globally competitive. that's an everyday job for us. we work on that on all fronts, all the time. it's not just in down markets. it's in good markets and in normal markets. >> all right. john, stick around, we'll have a little more with you in a second. >> still to come on the show, it's black friday for the shipping industry. that is, the period when manufacturers export their wares to far-flung shores in advance of the holiday shopping season. will they face tight shaping lanes this year? we'll get an interview from a top industry analyst.

welcome back to the program. let's take another quick look at u.s. futures as we gear up for the start of the trading day in the u.s. mixed picture. dow jones industrial average is expected to add a couple points. s&p and nasdaq pointed lower following declines for two sessions now after what had previously been a bit of a string of gains. european stocks are down today. remember, we've had pretty good

runs. the xe it. ra dax and cac are down. >> we're now in what's considered black friday for the shipping industry. that peak time of year when companies get their goods shipped around the world ahead of the holiday season. will this be another tough year for the shipping industry or any signs of recovery? joining us is direct he of research at clarkson capital markets. what's your initial read? what are you seeing out there in the shipping industry? >> overall ship utilizations are good at the moment but that's because they've been rationalizing their tonnage for their actual number of -- and volume of containers moving at the moment. it's moderate. last year it was moderate as well. you saw a spike ahead of the holidays as well. that might occur again this year. there's more just in time inventory at this time. >> it's so interesting because

for so many companies, they don't want to over-order and then be disappointed on the demand front. at the same time, at last minute, air freight is so much more expensive. do you think that could happen again this year? >> air freight is going by sea so you think inventories and management that you would be able to move by sea. overall volumes around the world are not too bad for containers this year. it's closer to a 6% growth rate, historic average is 9%. it's not recessionary at this time. intra-asian growth is go. u.s. container volume is good. we would expect freight rates for containers themselves to improve as we head through september. and at the beginning it looks like a moderate start. >> a moderate start is what you call it. i suppose what's going to happen

with supplies of shipping. >> what's on the ship and supply and demand of ship, overall volumes are moderate of what what's on the ship, if you're looking at the container business in particular. ships are oversupplied. they last for -- very long-lived assets. the order book does take time to slow down, and it really does at the end of next year. and very little financing liquidity in place to do any new ordering. so, as we head through next year and into 2014, ship rates themselves should really improve. probably favorite name there would be cspan ssw, they have a lot of firepower to grow, a lot of dividend for you to wait and

the ability to grow is very attractive to us. >> a lot are loss-making round because we've seen declines in daily freight rates. we were just showing comparison between dry bulk and some other areas. what do you see most opportunity in, both in terms of the type of shipping and some particular names? >> just mentioning dry bulk. that's dramatically overbulk. the supply is not particularly bad, growing between 5% and 6%. slowed down this summer but we expect with lower iron ore inventories in china to improve as we go through the fourth quarter and first quarter as has happened in the last few years. really the best played sector overall in terms of demand, exceeding supply is lng transportation, a favorite name would be ticker tlng. they are reporting earnings on thursday.

next best supply demand scenario is product supply tanker and dirty product tanker space. these are moving jet fuel, gasoline and other products around. less and less refinery capacity in the west with more and more -- or gradually growing demand as far as capacity is growing in the middle east. >> let's bring in john, who's still with us. what's happening with transportation costs in your business? >> yeah, we see upward pressure on transportation costs here in the u.s. depending upon where you're shipping around the world, and we ship more than 20% of the product we make here in the u.s. is shipped somewhere around the world. depending upon the back hauls, number of empty containers coming back, that will drive container rates up and down. as pointed out, this is all

about utilization. neen a growing market where there's excess capacity there will be downward pressure on freight rates. where there's not excess capacity, upward pressure. generally speaking in the u.s., we see transportation costs moving up. our transportation costs are more than our labor costs. >> wow. >> it's a big cost. >> you're not getting benefit from the slightly cheaper rates on the exports? >> we are getting some advantage on lower freight rates on exports but i'd say on balance, our transportation costs, since, you know, 65%, 70% north america in terms of our cost structure and business miss, we see upward pressure on transportation. >> fascinating, transportation costs crowding out labor costs there. john from international paper and director of research at clarkson capital market, thank you for your time this morning. >> there's still plenty more to come on the program. find out who could be crowned the world's most powerful woman. >> and we'll look ahead to hewlett-packard earnings.

welcome back to "worldwide exchange." i'm kelly evans. >> i'm ross westgate. these are the headlines from around the world. another day in the red. equities in europe and asia what analysts call a technical selloff. dell reports disappointing

second quarter figures and is keeping a cautious forecast as slump in pc market continues to eat away at bottom line. the price of platinum hitting a three-month high as anglo says it's the latest to receive wage demands from workers. quick look at markets. don't let the red fool you. if you look at the dow jones industrial average, are looking to open higher by a couple points. nasdaq and s&p 500 are probably going to open slightly lower. it has broadly been a selloff across markets overnight. at leastover night for u.s. viewers. ftse is down. ftse now down 1%. xetra dax shedding 0.3%.

meanwhile, we had another two-year auction today of german bunds offer zero coupon. average yield set at 0%. the bid to cover ratio, 1.5. they sold 4 billion, 4.08 billion. the previous auction, yield was negative, minus 0.06% on july 18th. so, there we go, another notable auction year. notable for the fact you're not getting any interest payable. >> still negative yields even though we've seen a better tone in risk but this tells you the kind of environment we're trading in. >> how are you supposed to make money in these markets? here is what some experts have been telling us today. >> i think that prospect is for the next three or four years, at least. then the fundamental supply and demand balance will be to push the yen higher that's where we think it goes.

>> there's still potential in equities and the risk premium in equities looks as if it's very high compared to bonds. what i'm saying to our clients is, we'd all like to be defensive but it's a very expensive luxury at the moment. >> we've been short through the summer which will give us the opportunity to make some money in the next couple of months. but it's being squeezed completely, so, therefore, i cannot help the thinking that this is the time to start. if you haven't got -- the best thing to have for the moment in shipping is to have cash and no position. >> okay. some investment thoughts for you today. if you just joined us, this was a big thing in the uk last night. >> "dallas," the show. >> "dallas," the show, is launching this week. the new series is launching this

week in the uk. i know it's been running in the states for years. but i met last night j.r., larry hagman -- >> oh, did you? >> patrick duffy. >> yes, yes. >> and sue ellen, linda gray, all there. >> did the -- the original "dallas" was that on in the uk? >> yeah, that was a huge hit, which is why this is being talked about. i got this for you. >> well, thank you. yes. i think this will make me -- >> see, i like the way you wear that. >> i don't -- no. we're going to give this helena. >> it's very annie get -- i said that earlier. is that how they wear it in the northeast, the cowboy hats? >> awkwardly. >> it's a big thing, right? >> yes. "forbes" is releasing the list of the most powerful woman in the world. angela merkel last year came in at number one, just edging out hillary clinton.

joining us is helena from bank of mellon. welcome. how is the progress on that front? >> well, there's actually -- to be honest, surprisingly quick. we've had almost no change in four years up to the end of 2010. 12% of ftse board positions held by women and now nearly 17%. the rate of change is really quite pleasing. almost half new appointments going to women. you know, in the context of a lot else going on, i think that's about as much as we could have hoped for at this stage. >> who do you think is the most powerful woman in the world, these "forbes" list? >> it's always fascinating to read about them. ultimately successful women don't need a list. you know, in a way it's a badge of honor but it's not necessarily really what people are in day-to-day living --

>> do you think it's out-moded -- >> what about the most powerful men -- >> that's my point. i was short-listed in an award in europe. i am two minds about it. why do we need the category? my 7-year-old when i won it in 2010 said, is there a most influential man? i said, there's not. >> it's surprising because you need to raise profiles but then as you say, you want to get to the point where we actually no longer have to do that. >> exactly. >> precisely when we're talking about women on boards, do we still need to single out female participation or are there just reasons why this ratio isn't going to be much higher than, say, it is today? >> i think it is still an issue that needs a spotlight on it. i think there needs to be a concerted effort for a number of reasons. it's ultimately about women's issues, more effective issues. we keep seeing every week -- another incident where we're

reminded about the importance of oversight of good businesses. to break open the lid on the cozy club of one type of person that's been running boards and comprising boards, we've had to do a push about the women. >> how have you managed to do it as someone running a major fund as someone who has, what, nine children? >> nine children. i don't like that to come up in conversation. >> it's incredible. >> thank you. >> how do you make it happen? >> it's sort of how it's been working is been involving men. i think that's one of the other important things, that it shouldn't just be women talking to other women. it's been the leadership, the members of the club are the chairman of some of britain's largest companies. 54 have signed up to this voluntarily. it's not mandatory. it's not a quota. this is about them believing that -- they've seen the evidence of more balanced boardrooms on the dynamic. >> where do you go to get more balanced boardrooms?

clearly a lot of talented women will step out of the jobs market for a while to go back to their families. can you bring them back at board level or not? do they have to go back and forth on employment before they become a non-exec? >> you don't necessarily need technical experience or expertise in the business, so in a way -- and it allows more latitude. however, i like to increase executive pipeline, if we got to 30% in the pipeline. that's the big next issue, i think. it's the reason why a quota doesn't work as well. have you to keep building the environment to make it, you know, some place where women want to stay the course. >> we'll have more thoughts in a couple minutes. also to come, greek prime minister is seeking more time for painful budget cuts. have european leaders run out of patience, though? we'll discuss that after the

break. [ male announcer ] while many automakers are just beginning to dabble with the idea of hybrid technology, it's already engrained in our dna. during the golden opportunity sales event, get great values on some of our newest models. this is the pursuit perfection.

welcome back to the program. well, "forbes" today is releasing its list of the world's most powerful women. last year german chancellor angela merkel took the prize. two years ago it was michelle ambassad obama.

last year hillary clinton was just edged out. who would you name as the world's most powerful woman? brian has tweeted in to say, no one has unseeded angela merkel. the ir get in touch with us at e-mail or tweet us @cnbcwex or reach us individually. especially if you want to comment on the cowboy hat look that ross has gone with this morning. >> do i wear it in the right -- i want to know if you're from texas, was i wearing it right? probably wasn't enough gallon in that hat. probably a five gallon. i probably need the ten gallon. i'm presuming the gallon applies to the -- >> the size. >> -- the height of the bit in the middle. >> we'll have to find out. >> the crown. let us know. . meanwhile, more evidence of pressure facing global minors. from bhp billiton, the stock

down 1.16%. they've been suffering from chinese key attributes like iron ore. bhp saying they're going to delay expansion of olympic dam. now also going to -- there's no decision on that until december. also, no major projects now for -- until june 2013 because of higher capital costs as well. the numbers today, second half profit down to $7.16 billion from $10.98 billion year earlier. you can see the size of the profit falls for bhp today. softening demand from china being particularly painful as well. so, the loss of the big global minors backing up the picture they're in a challenging environment compared to where they've been for the last three years. >> that's for sure. if you're just joining us again, you're watching "worldwide exchange" and these are your headline. markets in europe and asia trading lower on what analysts call a technical selloff after

stocks hit four-year highs on wall street. dell reports disappointing second quarter results and keeps a cautious forecast. and platinum hits a three-month high as miner anglo american says it received demand wages from workers. wouldn't be a day if we didn't talk about the eurozone crisis. greece needs more time to implement reforms, the message the greek prime minister is expected to give to the euro group head when they meet in athens. samaras said the extra time would give the nation air to breathe. stell with us helena morris. good to see you. how much is the eurozone crisis -- how much more difficult has it made life for asset managers? >> i think it's a very profound challenge for everybody. people in the street, us, how to make money was an issue you were talking about earlier in terms

of the zero rate world, which this has been a very big ingredient behind. i think that is the ongoing challenge for asset managers and for our clients. how do we steer them through. no one has lived through a zero rate world. there are opportunities. i didn't think we could hide in a corner and say, oh, it's impossible. >> i was going to ask. we have asset management buying into greek debt at 12.5 cents on the dollar, for example. are there ways to be opportunistic in this environment? >> we try to spot big trends in themes. when i talk about zero rates and deleveraging that is basically the eurozone crisis. we think rather than trading greek debt we're thinking more, what are the themes that are going to happen and prevail and help us to make money. whatever happens in the eurozone crisis. with zero rate world, we're looking at equity income as a very -- income is always driven. people don't realize it.

they think in a 20-year time when we have a bull market, it's all about capital gains. if you look at long history, it's dividend -- >> and reinvested -- >> yes. >> morgan stanley said there's a dirth of hedge funds and found a way to play this. is this an area of emphasis for you guys? >> we have built up a suite -- we started off as uk equity income managers. that being the only strand of the offering but now we have a global version and our asian is very popular and also one we believe in, will deliver returns. notwithstanding the problems in china -- >> this is where you find the value -- if you think of the mul multinational cash-rich countries because we had this discussion this week. you take a company -- if it's done very well, it's performed what it's supposed to do, so i suppose the trick is to find companies that will deliver those performances over the next

five or ten years that are already too rich. >> you can apply obviously a yield discipline. that's the other beauty about this approach. because you can look and we have sort of screams, we won't buy into stocks, for example, less in the market for strategies. automatically those stocks by default or definition, somewhat cheaper in terms of people expecting higher income to make up for expected lower growth. we can generate a return and that actually some of those areas with high yield, can deliver quite nice growth over time as well. >> helena morrissey also discussing the dynamic of women in the boardroom. with nine kids at home, she gets my vote for super woman this morning. still to come in the program, shares of dell diving after the company posts disappointing results. will hp rival dell when it reports later today? >> we'll break down dell.

if you just joined us this morning, european stocks ahead of the u.s. open are down. we haven't seen many like this. . xetra dax down around 0.75%. >> we'll see if that infects the mood across the u.s. futures still a mixed bag. keep an eye on fair value figures because actually the dow jones is to add five points. the nasdaq and s&p still pointed lower. this follows four-year highs as we saw in the u.s. session. the jury, meanwhile, will begin deliberations today in the patent infringement case between apple and samsung. in closing arguments tuesday, apple's lawyers said samsung took shortcuts by featuring designs of apple's smartphone because they realized they couldn't keep up.

samsung countered saying a verdict in favor of apple would hurt competition and hurt consumers. taking a look at share response there. samsung lower by 1.5%, consistent with the mood across asia trade this morning. apple is defying the markets, adding 1.2% in frankfurt this morning. here's a quick look at what's on the agenda today in the u.s. july existing home sales data out at 10 a.m., expected to raise to 4.5 million homes. interesting in light of toll brothers earnings. also at 10:00, cbo with an update on budget and economic outlook. 2:00 it's minutes from this month's fed meeting. that's definitely the one to watch. american eagle outfitters will report before the opening bell, so will chicos and express. after the close we'll hear from hewlett-packard and guess.

dell's second quarter profits fell 18%, beating forecasts but revenues fell 8%, shy of analyst estimates. the company is projecting revenue decline in the third quarter and cutting its full-year earnings outlook. dell says pc distributors are holding back on buying new machines as they wait for the launch of the new windows 8 operating software this fall. shares were down more than 4% after hours. now more than 6% in frankfurt trade this morning. well, rofl winkler is tech reporter at wall street journal. thanks for getting up for us. tell us whether -- >> morning. >> -- these figures from dell should give people pause about strength in the pc market more broadly. >> or lack of strength, sure. it's just a reminder it stinks to be in a commodity business, which dell is still in. they still have over 50% of revenue coming from pcs, laptops. this is a very challenged market, right? you have tablets on the one

hand, starting to steal share and low-priced chinese rivals undercutting on the other end. by the way, speaking of tablets, you have microsoft now competing with dell and hp. so, dell is trying to move its business away from pcs to higher margin gear, but this is a process that's going to take years. i mean, they have to turn a battleship here. >> what about hewlett-packard as we turn our attention there today? >> people are going to be looking for signs of stability. they preannounced earnings, said they would take a large write-down. hp has its own set of challenges. a big chunk of revenue comes from pcs, which is challenged, like we said, 30%. they also have a printing business which has great margins. it's 30% of their operating profit but even that's challenged. in the age of facebook, who prints out photos with high margin ink anymore. a cell phone for your boarding pass at the airport. in services, that's another

issue. they're basically a body shop compared to, say, ibm, which has more high margin consulting. hp said they're taking a big writedown on the acquisition of eds and services, so they have their own set of challenges. >> so china changed the business miss, the reason behind buying autonomy and getting into the software business. you seem to take the view they're way overpaid for that. is there any future where that's the right strategy, even though it might have been done at the wrong price? >> it's i very difficult strategy. if you talk to sources in the industry, what they'll say is kind of glomming software business to hp is very difficult because they don't necessarily have the sales channels to sell those products. software isn't the wrong answer. when you think about hardware, businesses that do make money selling boxes, the emc, selling storage, the reason they make a good margin -- cisco in routers

and switches, because of the software inside the box, right? the difference with hp and dell, microsoft and intel are the guys who really have all the intellectual property inside the box. software isn't the wrong way to go. it's just how they do it. you make the great point, ross, they way overpaid for this acquisition. the old sceo is already gone. that's been a disaster. >> rofl winkler, tech reporter at wall street journal. >> i'm also thinking about meg whitman at hewlett-packard. she's probably still relatively high on that "forbes" list of women's most powerful, out later today. that's it for today. kelly, you're leaving me for like the next ten days or something. we'll see you in the states, right? >> that's right. next week. we'll find a way to link up from there, transatlantic. >> that's it for today's "worldwide exchange." "squawk box" is next.

good morning, everybody. profits in dell dip as investors punish the stock. candidate romney catching up with president obama in the latest wall street journal/nbc poll but it's a race to the bottom for congress. and tropical storm isaac may crash the gop convention. steve liesman and scott wapner are here to get us through today. "squawk box" begins right now. good morning. let's brin