all right. you're now watching "worldwide exchange." i'm ross westgate. >> and i'm kelly evans. >> these are your headlines from around the world. >> bank santander sees its profit down. bad loans rise coming from where a zill and britain slows. strarg down the barrel of a triple dij recession, figures from the uk are out in 30 minutes time. south korea grows the first

time in two years. >> astrazeneca's first quarter sales miss forecasts. germany lowers its out llook. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. >> all right. welcome. we are reunited. >> back together. >> that's what my agent says. >> and how was it? i was worried about you with the bird flu. yeah, so was i. but i think i'm okay. >> not a carrier. >> i didn't get any forehead temperature taken or anything. >> they just had the first case in taiwan and it was from a guy who was in shanghai. >> people are worried about it. >> being in hong kong, as well -- >> we did not sync that up very well. >> that's okay. you're back now. >> i can't wait to hang out with bernie. i think that's going to be a lot

of on fun. >> he's great. you know what i'm saying. >> yeah, yeah, we'll leave it there. i won't harass you yet this morning. >> too low interest rates for too long can lead to distortions and capital markets not very helpful in the eurozone. there's a debate about whether the ecb is going to cut rates next week or not. meanwhile, plenty of things on today's show. fresh off the back of a twitter market scare. you'll hear from a silicone valley about why companies need to start paying more attention to social media. >> yeah. market moving to the right reasons this time. uk gdp is also out in just about 30 minutes time. companies are looking to narrowly escape a triple dip recession, but the forecast ranges are pretty wide and frankly so are the gdp figures. we'll bring you analysis from

jeffrey dicks when those cross at 10:30 cet. and find out why the warren buffett china thinks the middle class is the key to the country's survival. >> i'm looking forward to that one, in fact. and as italy taps a new prime minister, find out what that leader could mean for markets. we'll be live in rome shortly. it is all about spain, though, this morning. and a mixed bag of earnings for spanish banks. the country's biggest lender, san tabbeder post add 20% drop in net profit coming in shy of forecasts. meanwhile, bango santander and caixabank saw returns to profits.

santander swung from a record loss in 2012. let's get straight out to stephane pedrazzi following ought of this for us. what's the message here? >> all the banks are facing the same problem. they're in recession for the second consecutive year. their bad loan ratio is rising as a result of the economic prices and they're also facing some lower interest rates which in terms of profitability. but the surprise this morning came from santander because it's much different. it has a limited exposure to the spanish market. it's only 15% of its total revenue. therefore, it was supposed to be more resilient to the crisis than other banks. it was not the case. yes, santander was really profitable on the first quarter, 1.2 billion euros. but it was below expectations. roughly 100 million euros below

expectations. ask one of the problems is that the bank is facing losses from its latin american sector. talking about the spanish market, the united states has seen an increasing level of bad loans. 4.7% for santander at the beginning of the first quarter. it's below the average of the spanish market. briefly, we had members from caixabank. earnings this morning were much higher than expected. >> the spanish banks are going to restructure the economy. spain's unemployment rate hit a new record of 27.2%. it means more than 6 million people are currently out of work. stephane, let's look at q1. it is interesting. it's only slightly less than the

unemployment rate we got for greece, which is in january. are there any signs of any measures having any impact? >> not yet. not yet. the government was targeting at the end of the year of the contraction of gdp of 0.5%. the finance minister wleefs that the gdp will shrink by probably 1.5% this year. we don't see in that situation how the labor market can improve in spain. you're right, it's nearly as high as the unemployment rate that we've seen in greece. now, remember a few months ago, i was reading the report from barclay's saying that the unemployment rate in shape could be as high as 30 the% at the end of the year. at the time, that seems to be excessive, but looking at the increase on the first quarter, really, the situation is worrying and perhaps barclay's was right about this forecast until the end of the year.

something for sure is that the unemployment report this morning will probably -- and some angry people tonight will protest at the congress. they want to bring down the congress and they want to force the government to change its economic policy. and it comes just 24 hours before the government is expected to announce some measures. they will be probably stimulus measures trt economy and probably more austerity measures to reduce the deficit process. >> thanks for that. plenty more to come from stephane during the show. dennis, thanks for joining us. when does the spanish economy get better? >> well, i think there is surely a contractive medium term story. you hear a lot about the weakness of the job market, which is unsurprising in my view. you hear a lot about the public finances having not been stabilized yet. that's all true and actually stays time.

but its debt sector, it is more in tune right now, but it will become bigger. why? because current sectors are shrinking, at least the construction sector as an example. so the export sector will be a bigger share of the pie. that is why growth will come from. its exports have been strong and structurally they are getting stronger because spain is recovering. it is tough, it is a difficult process and i think it will happen. >> it's quite a cost to pay, isn't it? the unemployment rate is over 27%. youth unemployment well over the 50% mark. where is the unemployment going to peak? >> i think at this point, this figure represents the true state of the job market. certainly it's not surprise the joblessness is high and rising. one out of four of more than that of those who want to work,

need a job, doesn't strike me as the right figure. that is because in every economy where the shadow or underground economy represents the fair share of the pie, the true figure might be lower. and, in fact, you can see that such a very high fever doesn't translate in economic contractions and extend gdp around up a percentage point which hits further reprieve, with but not really sharp from first through the fourth quarter of last year as an example. >> and stay there. to italy now, the prime minister will begin to transform a government today. the central left politician is expected to pick a mixture of politicians and technocrats. speaking of his appointment yesterday, he said he would form a government at all costs and

win his party's compromise or he would withdraw. thanks for joining us. nicola, what -- >> good morning. >> what sort of government is going to be formed? are you confident that it's actually going to hold together? >> well, i think that the government will get the vote of confidence sooner and there's going to be a bipartisan majority. the question is how long this government will last. because it is very clear that especially on economic issues that is not bipartisan support for any specific measures. so i think this government will likely bring forward first

constitution forms as a form of electoral law where i think it is possible to find that some shorter growth agreement, bipartisan agreement. on economic reforms, i'm a little more pessimistic. >> if they do get the electoral law through, how big a difference will that make? >> well, i think it -- you know, the problem is that with the current electoral law, we found ourselves in a dead lock because we basically had three parties that share evenly the parliament. so i think it would be very, very important to change electoral law and probably also the way the parliamentary -- the way the power of the senate is reduced to ensure that as it is likely, soon the majority will support hopefully this government will sort of break

down. we can go to new elections and we will be able to have a new majority with -- that can bring forward its own political and economic agenda. today, in these papers, we are reading about sort of vetoes from each party's own different possible members of its government, of the policies with the new government should pursue. so it's already clear that the life of this government will not be easy. >> all right. daniela, just to bring you in here, as well, electoral change or no electoral change, where do you think berlusconi reemerges in all this, either in this round of elections or next year? >> the party was fragmented. that is true before and it is true now. to the extent it will form a government, whether all this marks a period of lower political volatility remains to

be seen. there are reforms across the board, really, from institutional to economic ones. who knows. on the grand scale that is necessary to boost italy's economic fabric remains to be seen. this might be a positive development, but i stay cautious because the party remains -- anyway. >> can i just ask you both, you see pimco lightening up on their holdings of spanish and italian debt. would you both -- i'll start with you, daniela, would you at this point say italian bonds are too rich? >> well, i think there is a reason why italy's government is well supported. it might not have that much to do with domestic economics, but investors, number one, behavior

as if there is a policy back strop which they perceived to be as credible. that's the ecb. because of that systemic risk has declined. investors don't find economic any longer to buy all the risk-free assets. they will want to shift towards risk assets including italy's debt market. the policy back stop, the one that have been supporting. and might continue to support italy's debt market more than before. currently, lower volatility would help, as well. >> and nikolay, briefly? >> yeah. i agree. let me add two things quickly. one, the reduction in the yield also depends on the fact that markets are already discounting a reduction in the ecb policy by 25 basis points in the next week. second, i think investors are aware that monte's government

has done a very important reform for the long-term sustainability of the economy, mainly the form of the pension system. and so i think that they believe that some sort of short-term volatility related to the political ip stability, it's over that with respect to this major effect from the pension system. >> nicolai borri, daniela, senior economist at morgan stanley. thank you. first quarter gdp figures will be released at 10:30 this morning. reuters says they think the economy may have just avoided constructi contraction. what do you think the uk should put austerity? the debate is reaching globally and you can cast your own vote at cnbc.com. and on that note, let's see

how markets are trading before that. ross. >> thanks very much for that, kelly. we just hit a session low, hour and 15 minutes into the european trading day. pretty even stevens on the dow jones stoxx 600. if anything, slightly weighted to the down side. we had a 25-point rise yesterday in the ftse 100. this is where we stand right now. as if by magic, there you go. thank you. just down 11 points. we've got a lot of earnings. we'll get to those in a second. the xetra dax off 6 points. the ibex is down nearly p 8%. stephane mentioned already, the biggest bank missing forecasts, q1 profits dropping to 1.6 billion from a year ago. here, unilever sales growth missing forecast. european numbers are sluggish. margarine and ice cream sales

disappointing. astrazeneca, pharmaceutical in the uk, down 2% today. sales down by bigger than expected 13%. loss of exclusive products weighing on there. just got back to randstad, up 7% there. bat, the tobacco company up 2%. pretty good revenue at 5%. the global driver, the brand cigarette volume was up 11%. no surprise southern europe was the biggest market. and finally, bayer up less than 1 is% at the moment. they did miss analyst forecasts. strong demand for pesticides off set by high raw material costs at its plastics and chemicals unit. we will all be speaking to the ceo at the end of worldwide -- we're extending the show

slightly, fought long, five minutes, just enough time to speak with marijn dekkers. italy, 4.056%. on tuesday, we hit that low we hadn't seen since 2009. spanish yields are ticking higher, as well. and we'll keep our eyes on this in the next sort of 13 minutes. 10-year gilt yields, 11 of 68%. pretty well contained. did britain officially get a triple dip recession or not? we'll find out. and quick look at the currency markets, firmer at 1.5290. can't quite break through the hundred level there. euro/dollar, 1 is.3041. that's where we stand in europe.

let's get out to singapore. sixuan is with us. thank you, ross. most asian markets in the green today as higher commodity investors helped risk appetite. sentiment getting a list from south korea's q1 gdp which hits a two-year high topping expectations. financials lent support. the hang seng gained 1%. oil majors higher ahead of earnings. up nearly 5% topped by the higher gold price. the tagger was the shanghai deposit to drop lower by property in cementmakers. meantime, the earnings season in full swing. china's bank lost 2% today in shanghai despite the company reported slightly better than expected first quarter profits.

we're rating for report cards from china's top players today and tomorrow. this helped lift shares in hong ko kong, but it's under a bit of pressure today. hyundai motor jumped nearly 6% after earnings came in line with forecasts. back to you. >> all right, sich win, thanks for that. now european banks remain focused on post crisis krigz. chinese leaders have been plowing ahead with double digit earnings growth. today, a potential slowdown in china. keep the sector in check. we'll take a look at that as soon as we come back. welcnew york state, where cutting taxes for families and businesses

is our business. we've reduced taxes and lowered costs to save businesses more than two billion dollars to grow jobs, cut middle class income taxes to the lowest rate in sixty years, and we're creating tax free zones for business startups. the new new york is working creating tens of thousands of new businesses, and we're just getting started. to grow or start your business visit thenewny.com

. welcome back to "worldwide exchange." we're getting results tr one of china's biggest banks, bank of communications saying its first quarter 2013 net profit was 7.7 billion yuan. china's top lenders are posting profits in 2012. many have set aside higher

provisions to hedge against bad debts. shares of chinese banks, generally speaking, are higher. bank of communications up about 2%. chinese banks need to grapple with deregulation which is hurting margins. let's get more on this from singapore. david joins us now. initial thoughts here on the bank of communications numbers? >> well, i think what we're seeing from the banks is reasonably good numbers. they're seeing profit growth. what we're going to see is the results. how people view them depend on what you want to see in china. the china bulls will argue what

we're seeing is loan growth still running at about 15% year on year. they will say banks are under pressure and that will continue as liberalization continues in china. i think it will raise questions about some of the income fees the banks are regulating. some of them pose risks for the chinese banks which haven't been fully factored in. i think potential risks and asset quality are still there. i think that debate is ongoing. you look at the valuations, the fee ratios are, what, about five, six times. the equity investors are still pricing in something in terms of a train wreck in spite of earnings. but the other thanni iearnings e

well. >> how strong is the chinese economy and how much pressure are they taking on to help get to this point? if banks had been under pressure to make so many loans, isn't there a risk that it's top line and the quality of those loans will deteriorate? >> yeah, that is a concern. to be fair, a lot of analysts have been worried about chinese banks because of the rapid loan growth that took place after 2009, after the financial crisis. people expected a lot of bad loans to come out from those. but it hasn't actually happened. that's probably because the economy has been quite strong. one of the things that concerns us that the chinese economy appears to be slowing, even at a time when credit growth is accelerating the. the banks are varying loans around the 15%, 16% level year on year. but the knot nonbank lending and the seconder by the banks themselves indirectly to the off

balance sheet lending is growing at a much more rapid rate. total credit growth in china is around 22% i think is the most recent number. it does worry somewhat that china appears to need more and more credit growth to achieve a slower rate of gdp growth which has to raise concerns about the potential credit quality over time because it suggests inefficient investment that will lead to poor returns and eventually to some bad loans to the banks. >> just listen to this. >> there are four chinese banks that make more money than any bank in the united states makes. they're growing rapidly. they're supported by the government and they're showing enormous growth. you've got four big banks in the united states and all the united states congress wants to do is rip them apart. if you rip apart all the big banks in the united states while

the chinese banks are growing rapidly, then the chinese will take over the global financial system. >> what do you think of that, david? >> he has a point that the u.s. banks are under pressure because there's not much revenue growth there whereas the chinese banks are enjoying strong growth. i think it will take a long time before the chinese can be stronger. there is so many going on behind the scenes which i think can partly account for the low valuation. you know, for example, i mentioned the wealth quality products. we also hear stories about how banks are disguising some of their lending. if you get around regulations or rules on concentration risks, for example, getting a borrower who has a loan to list a bond, then the bank will buy that bond. it can now report securities on its books rather than loans.

you put that loan into a wealth management product and sell investors. >> david, the other thing, what happens when china starts reporting under their new capital ratios? i mean, when will you get a clearer picture? >> they're hovering at the medium limits they need to maintain. it's the mid tier lenders that look as if they will need to raise capital at some point to comply with the stricter requirements of basul 3. >> david, good to see you. thanks so much for that. now, we are some 30 seconds away from finding out whether britain

has ended a triple dip recession or not. first quarter gdp is expected -- this is the consensus forecast of 0.1% versus the 0.3% contraction previously. there's been a lot of weather will have related affected numbers, of course, in this quarter. >> look at sterling. >> sterling up to 11.50. it was below 1.52. we've moved up about a cent on sterling/dollar. so up 0.3% on the quarter.. and the annual change is up 0.63%. let's get the breakdown. find out where the biggest annual rise in gdp is for 2011.

>> we had a huge fall in 2012 which is one of the reasons for the underperformance at the end of the year. we're getting a bit of a rebound. construction down by 2.35%. uk gdp still remainses about 2.6% below its prerecession peak. sterling is loving it. >> let's get quick reaction tr jeffrey dibs. the headline writers, i don't know that they'll be pleased. george osborne will be pleased, i know that. >> we asked and thank goodness for that. today's numbers, plus 0.3. it could be zero or it could be plus 0.6.

>> how much difference does it make on sentiment? we hear reports of how much investment is being held back. >> well, plus 0.3 after minus 0.3, that's a nice number. it means that the economy is not yet -- it was flat over the last six months. it wasn't any sort of dip. and that will boost, give us a little bit of confidence. i also agreed with what you were saying, kelly, about the energy output. it was a very, very cold three months. that has provided a significant amount of gas and electricity output. >> what material difference does this make to end policy? >> there's a big question over what the bank of england does next month. there are some economists who think therll be another round of qe. i'm not in favor of another

round of qe and i think a number like this probably means we won't get it. in terms of physical policy, well, we've had the bucket. we've had marginal announcements yesterday on the on funding for lendings theme. but the policy is really on hold. >> will that have a meaningful impact or not? >> no, no. all of these things are marginal. any measures to improve the supply side of the economy or to boost credit, they have a small effect at the time. and the poeshlly large effect over a long period of time. but right now, the economy needs a little bit of demand. we got it in the first quarter partly because of the cold weather. the economy needs demand and that won't change. >> stick around.

sterling is a little higher. >> we're up 1.54. we've been talking about sub-11.50 for quite some time. so a lot of technical damage being done here. >> when we come back, more from jeffrey. we'll talk about the austerity debate.

into no triple digit recession. britain avoids a third quarter decline. >> and spain also front and center this morning. unemployment there hitting a record 27.2% in the first quarter. while the country's biggest bank santander saw profits drop. >> south korea grows at its fastest pace in years despite warnings from the north. and astrazeneca's first quarter sales miss forecasts. germany's bayer misses its expectations. we'll speak to the ceo in about two hours' time.

>> all right. we've moved more than one big figure on cable in the last seven minutes or so. sterling/dollar, 1.5401. we are certainly well below 1 is.53. up 0.3% on the quarter is down 0.1. and oil and gas input helping the economy to do better than expected. lots of revisions. as far as the rest of the currency markets are concerned or the rest of the cross rates, not all of them, some of them, the main ones. dollar/yen, still below 100. 1.3035 on euro/dollar. kelly, yields in italy and spain. >> yields have been a big story this week ahead of the italian elections where we now have a

prime minister named with final approval. it's pretty much buy the rumor/sell the fact in italy today. 4.08% in italy. that's quite bait higher, i have to say. we are at 3.9% two days ago. still low by the standards of last year. european stocks, do you want to recap that? >> yeah. we've been seeing a move to the up side, about 2% earlier. now were seeing red arrows. the yen is strong he her again this rng month. speculation of what the ecb may do. always more hawkish but saying, we're not necessarily going to

pursue a fed-style qe program here. >> growth fears are have given rise over the merits of deep cutting of deficits, whether it may be time for government toes loosen the purse strings. david lipton says our view is that the case of consolidation ought to be reconsidered. mark carney, the new bank of england governor has drawn comparisons to the united states suggesting there may be lessons to learn from washington. jim o'neill, chairman of the goldman sachs asset management suggests osbourn's austerity plan represents a lost decade for the uk. finally, the european commission president is making headlines with his outspoken claim that the era of austerity has

potentially run its course, it's running up to the limits of what is politically possible. >> joining us on the line from new dehli, specializing in the eurozone crisis, and jeffrey dix is still here with us on set. sony, first to you. we're clearly in the middle of a reset when it comes to the global rhetoric about austerity. that decisive action can strengthen growth and avoid economic stag fashion. and the spanish figures this morning would only seem to underscore the need for that now. >> that's correct. i think saying that we're in the midst of a global reset on the merit of austerity may be a little bit stupid. if you just notice what's happened within the eurozone, them the president came out and

he does not say austerity was working, that it was a wrong idea or based on faulty evidence. what he said was that it seems that it is socially and politically reaching the limits. and then, of course, he was wrapped on his knuckles by perhaps my assumption is germany. and if you've heard recent statements both tr ollie rehn as well as his office, he has been retracting what he said, at least partially. so we are in the middle of this game where the evidence simply just keeps mounting up, the evidence of the economic cost, the political cost, the social cost of austerity. and yet the red line drawn particularly by the likes of germany continue to become ever more deeply entrenched because policy is so close, even if people wanted to. so close to the german election would be considered to be very

risky by -- and the fundamental german thinking on this issue has not changed. so i think that we will see an increasing disconnect where the debate on austerity will change, the tone will become more denying. but the actual policy on the ground will continue to be inappropriate and the eurozone -- >> sony, right, look, on that note, i just want to bring these comments here from angela merkel. to your point about whether this is actually changing anything on the ground, she's saying they're going to make sure that the europeans aren't the only ones limited from basel 3. but they're rejecting dmoft insurance for the foreseeable future saying germany has interest that europe also does well. common deposit insurance will be a key tenant keeping this monetary union together. so there's obviously a lot of politics and she has a lot to manage here when it comes to her role within germany and, of

course, within the european monetary union, i should say. but there's not necessarily a sign for this most important economy that there's going to be a change in policy. >> that's correct. i think that if you look at the various red lines that have been drawn in europe, both on banking as well as on fiscal union, it is unlikely that we will see any improvement in the economic situation. and the political device between the north sxt south will continue to grow. the social fabric will continue to fracture. and the slupging political space combined with the reeing economic problems will mean that any solution to the crisis will become harder and harder if not all outright impossible. and possibly it will be too late for claw back. >> good to speak to you. thanks for that. sony kapoor, managing director at re defidefine.

has any good been -- >> well, we saw what he did in the budgets, the obr. just three months off to the statement told him the public finances had deteriorated by 600 billion. what did he do? he said i can't type in fiscal policy, i can't ease fiscal policy, i just have to borrow another 62 billion pounds. i think criticizers of the government would say they're wrong. the timetable have slipped enormously. the budget deficit is 8% of gdp and it's pretty well stuck there, at least for the last year and this year. so we're going pretty slowly at austerity so far. >> good to see you. thanks very much, indeed. and if you want to weigh in on the debate, we are hosting a pole online on. is it time for george osborne to change his course? perhaps time implemented at your website. cnbc.com, cast your vote and

participate. viewers so far seem to think that britain is on the right path. 49% says the uk should stick by austerity. 18% say a partial roll back is what should happen here. a couple hundred people voting there, perhaps some multiple swrees. no funny business, people. keep it clean. >> bank of china says its q1 interest was at 2.2%. it's forecasting a 2013 net profit for q1 at 39.8 billion yuan. their nonperforming loan ratio was at 9.1%. as we heard earlier, it's pretty steady. >> and it's in the range of 5%. so a tale of two economies. encouraging signs, as well, from south korea's economy despite competition from the weaker yen

and military reports from the north. gdp growth from the first quarter of the year beat expectations. bank of korea held off on a rate cut earlier this month. today's advanced figures could underline the need for its wait and see approach. let's get more from sherry kang. what's the reaction there? >> well, mostly came from recovering exports and facilities investments. so we were happy at first. exports of the bad bone of the economy added in 3% and a similar range of growth for investments, as well. the maybe this will give the bank of korea next month to hold, as well, rather than this month where it was under all sectors to carry out rate cut. export growth mostly came from pet roe chemical sales rather than its usual strong spot of

manufacturing, like cars. not too good on that front, actually, like what we saw with hyundai motors earnings. year year, exports grew about 1.5%. consumers didn't spend much, either. they actually spent less from the quarter before. some are saying it's too early to call this a turn around just yet. back to you. >> sherry, thanks very much for that. an impressive performance given the headwinds. >> meanwhile, in japan, we're not seeing any signs from monetary easing. net sellers from bonds for six straight weeks. >> hi. in april's third week from the 14th, japanese investors sold a net 862 billion yen or .7 billion dollars of long and

midterm foreign bonds. there had been speculation that the bank of japan's massive bond buying scheme will push institutional investors such as insurers to move their assets from japanese government bonds to foreign ones. the boj is set to buy 70% of jgbs and lower yields. but at this point, it appears that the the -- is a more encouraging sector for them to sell their foreign assetes and lock in profits. analysts say that the sovereign risks in europe are keeping investors profits. as the boj accelerates its bond buying, you'll see a gradual shift start from may. that's all from me. back to you. >> thank you. still to come, he'll been called the warren buffett of china, but what does the man himself, the chairman of fosson group make of this? we'll find out more of that exclusive interview from my trip to china over the weekend,

coming up.

on my weekend trip to china, i sat down with him and asked him what he thought were the biggest challenges facing the world's second biggest economy. >> translator: i think china at this stage is full of challenges. we are fait fashion many accumulated problems, such as air pollution, the aging pop laying, higher labor costs. but we also have more opportunities. i think chinese people are making a lot of effort and especially chinese entrepreneurs have great entrepreneurial spirit the. so i think we can achieve a 5% to 7% annual growth rate over the next ten to 20 years. >> so what needs to be done at a regulatory level to enact toss changes? or would you just stop back and let the private sector get on with it? >> i think it's a joint effort from the whole nation. from the government's perspective, they should establish a society with more democracy and a rule of law. from a perspective of private

enterprises, we should not ohm focus on growth, but should care more about the environment as well as employee development. >> you've made a number of proposals to the government. they include setting up something like the bank of silicone valley, building an insurance system, approval of generic drugs that are close to expire. why are these important? >> first, i'm responsible to run my business well. in the meantime, i'm a member of the national committee of the chinese people's political consultive conference. from a business perspective, we're trying to propose some suggestions for the country. it will help establish a rule of law to help small and medium sized company. >> let's talk about fosun itself. you've made a couple of international investments in trans, in greece, as well.

are you looking to make further investments overseas? if so, what will guide your decision making? >> our investment in club med has accelerated its growth in china. our investment in folley has helped the company grow fastener china. our position is very clear. we are an investor from china, but want to invest globally helping international companies to grow in china. we add the china element to a global growth story. what guides your investment policy? >> i think we are warren buffett's students. we have our own specialties. as the students, we need to learn from his discipline and making investment decisiones and learn from his philosophy. also, we're learning from his

investment methods. so now we have increased holdings in the insurance sector, hoping to utilize the capital base from the insurance businesses to improve our investment capacity in the future. >> fosun has changed the areas that it's investing in now with growth emphasis on consumers, tourism and the media. is that just a reflection of where you see the future growth in china? >> translator: we're focused on china's growth drivers using global resources. the growth engines of the country's economy had been changing. in the past, it was about meeting people's basic needs like food and clothing. but now it's about the need to improve the environment. and as people get more money, they need better education, travel experiences. so we are focused on these areas. >> china's warren buffett. >> i love that you asked him about that, as well.

and he said, we consider ourselves buffett aplentyises. we're increasing insurance. >> wouldn't everyone. >> it's amazing, they don't have a direct sort of setup in china. but they are actually starting to get out of poem's money now to join -- what i thought was interesting is he said i think china can achieve a 5% to 7% growth rate. that's what stuck out to me. slowing is definitely the case and he confirms that. stick around. still ahead on the program, we're going out to madrid. welcome to the new new york state, where cutting taxes for families and businesses is our business. we've reduced taxes and lowered costs to save businesses more than two billion dollars to grow jobs, cut middle class income taxes to the lowest rate in sixty years, and we're creating tax free zones for business startups.

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welcome back to "worldwide exchange." i'm kelly evans. and i'm ross westgate. >> first quarter gdp rising 0.3%, the data prompting a spike in serlg. a record 27.2% in the first quarter. bank santander's profits are down 6 of%. plus, a slew of earnings out in europe. health care stocks are down. germany's bayer lowering its

outlook after lowering its expectations, as well. we'll speak to the ceo in the next hour. reports are suggesting vire rison is preparing an offer to convince vodafone to give up its stakes in verizon wireless. >> announcer: you're watching "worldwide exchange," bringing you business news from around the global. >> it was a mixed session for u.s. stocks yesterday. today the nasdaq, the s&p 500 a little higher, as well. earnings at this point start to go shift a little bit away from that. we will be watching for amazon results after the bell today. plenty more happening before that, as well. we'll talk later about exxon. the cnbc ftse global 300 is up about 0.3% yesterday. take a look at this.

may have something to do with the figures out of britain. showing the economy did expand in the first quarter. a 0.3% increase makes you less worried about major revision toes that figure. european markets, toe, show the ftse now slipping into the green, although just barely higher. the xetra dax up 0.25%. it's 0.2% for the ftse mib in italy as the new prime minister awaits his final approval and the ibex 35 is the underperformer, down 0.9%. we learned today, spanish unemployment, 27.2%. >> not far away from the greek unemployment numbers that we had in january and worse than expected, as you say, kelly. wa impact did that have on spanish and italian yields? italian debt, 4.089%. we hit that 2010 low, 3.89%. spanish yields, 4.37%. ten-year gilt, 1.7%.

yields have risen. we probably won't get any more qed next meeting. 6-3 is how we voted for the last few meetings at more qe. that is reflected on what's happening to sterling, as well. we were trade, a 1.52 handle on cable before those gdp numbers came out. now 1.5432. certainly one big figure and a half is where we've moved up since that gdp number came out. dollar/yen, 92.28. we'll have real problems getting through the 100 barrier there. and euro/dollar, still in the ranges, just hugging the 11.30 mark at the moment. that's where we are in european trade. we will recap that asian session for you. sixuan is in singapore with us. >> asian markets mostly higher on hopes of more eegz from global central banks. we had two spots, the shanghai

composite lost nearly 1% today due to a heavy sell-off in property stocks and cementmakers. gentleman pap's nikkei 225 continued to trek higher ending at a five-year high but sentiment was dented by the sharp declines in canon, nintendo and shiseido on the back of poor earnings. the company has doubled its annual net profit outlook to $400 million thanks to asset sales and a weaker yen. hong kong enjoyed will it from positive earnings. china's minshen bank grew 4.8%. stock up nearly 5% today for zijin mining.

auto stocks drive higher. hyundai soared nearly 6% today and its affiliate kia motors gained over 4% after hundred die's results came in line with expectations. this despite the fact that they gave a net to their japanese rivals. back to you. >> thanks for that. >> yeah. what are we discussing today, earnings, economic data, uk gdp figures. but you know what's within more interesting this week? i know you've been in china coming back today and is getting back in the saddle, we've had meltdown in stocks, generally speaking. italy may be getting itself a new government, etcetera, etcetera. but for the most part, people are sitting at their desks and is trying to figure out whether there's anything fundamental about this rally. when you come in on a day like today and see the 27% spanish unemployment figure, you worry

long-term about the damage being done here. >> cb is going to -- >> but are they? >> it's part of the same rally. >> are they. the interesting point, as well, is it time for europe's t.a.r.p. program, basically? are we not at a point where -- look at what the uk is doing. it's not out of the realm of possibility. we think that kind of a program, structure on the fiscal side of europe could help them. better late than never. >> i know it. i know it. and banks are in focus, as well, today. had a mixed bank of earnings for spanish banks. santander posting a 26% net drop in forecasts. that was below forecasts. at the same time, barcelona, bank satadel beat estimates for the first quarter.

posting modest earnings of 74 million euros for the first three months of the year. had a record loss in 2012. now, as banks scramble to restructure, kelly mentioned, the real economy is very much under pressure. the unemployment rate hits a new record high of 27.2% in the first quarter. it is worse than forecast. it now means more than 6 million people apparently out of work. stephane is with us in madrid. and he joins us for more reaction on the economic and the banking needs, as well, stephane. how is it being received? >> for the bank, there was a big disappointment. it came from santander. they're all facing the same situation. the spanish economy is in a recession for two years. they are also facing a an increasing level of bad loans. that's the result of the economic crisis and the interest rates are lower, which doesn't help in terms of profitability. but some of the spanish banks,

more because they have a limited exposure to the spanish economy for santander. it's only 15%. and they have some significant operations somewhere else in the world, for instance, in littin america. but the profits for latin america were 18% for santander. that was a big disappointment. the total numbers, the first quarter net profit is down 26%. that was below expectations for santander. in terms of the chairman, they remain confident and believe that the bank will be able to improve significantly its earnings this year from last year. but the market is very skeptical about it and if you look at the reaction, santander is really badly compared to the rest of the banking sector. very briefly, we had numbers from caixabank. you mentioned the numbers is due to some acquisitions. loan ratio is higher. 9.4% slightly below the spanish banking sector.

santander offsets the impact from the spanish recession with higher trading days and lower operating expenses. we'll have more detailed analysis on the spanish banking sector at 11:40 central european time. it's with banking and nomura with this counter opposition in half an hour. >> all right. stephane, thanks for that. plenty more to look at those. of course, on line, despite the global economy, stock markets have been slugging off growth fierce. kelly knows about this, as well. >> some investors are ignoring the bad news. others say the real focus is on central bank policies. you can read up on that before we talk about it. >> that's right. good luck with that. i just want to bring you some news, as well.

putin has been talking this morning and earlier was making comments about central bank policy, in fact, saying he didn't necessarily think -- or that he was okay with the tight stance of policy. but now in the wake of the boston bombings, he says it shows the need for more unity and counterterrorism that russia's policy proved correct and it is helping to spur u.s. and russian cooperation. a bit of a nice note there. joining us now for more as we turn our attention back to markets is shawn darby. he's global head of equities strategies. it's great to have you with us this morning. we were just raising this question. i'd love to hear your view. is there anything fundamental about the rally that we've seen across europe? is it vulnerable because the fundamentals remain weak? >> well, i would concur. i think globally economic numbers have been disappointing pretty much from the end of q4. we're seeing that trade tradition in china and asia and

emerging market data. globally, we're in a verbus cycle now where economic data continues to weaken. paradoxically, the equity markets have actually done very well over the last three quarters, mainly because of central bank action are more prominently because of numbers more recently from japan. and japan's central bank action is producing a carry trade which is pushing down global bonds yields and, therefore, once again providing a lift for equity markets. paradoxically, the worse the economic news gets, the more the central banks are forced into doing more outright qe or unorthodox policy measures. >> if that doesn't sum up these measures, i don't know what does. it's not necessarily the u.s. liquidity that's driving the situation even if the ecb doesn't act right now, the main point remains that japan's extremely aggressive policies are behind a lot of this. >> well, that's really -- the japanese are throwing the kitchen sink to the problem now,

purely from the fact that 220% public debt to gdp, there's little other options tore them now in terms of monetizing the debts. so it's a very blatant program. everyone looks at it in terms of a yen movement. what we're going to see is a very, very large scale monetization of the japanese public debt. .i think longer term, what that really means is we're going to get this financial repression being pushed into all of the global financial markets and that i think is the ultimate gain in europe, as well. at some oint, they're going to have to monetize a large part of that public debt because austerity by itself is not going to be able to allow these economies to grow out of their debt problems. >> but explain what you mean by that, what kind of policy response, then, from europe are you expecting here? >> well, ultimately, they're still getting to the end of the rate cutting cycle, as everyone is now debating. but ultimately, there's got to be some form of a euro bond

pushed into the system to allow the debt to be homogenized and allow these companies some form of debt relief. the irony is that everybody is trying to use the.flagz tool in terms of liquid with the public debt as the outspoken meshes of japan are adopted. you've got real rates negative in the united states and you've got to somehow induce some inflation into the system in europe to allow that public debt to be liquidated, as well. we're going to see a much more prominent feature to promote growth rather than austerity by itself. >> and what will the impact of those programs be? >> well, i think you will end up with a -- the mostly developed world running negative real rates, pushing out as much of their public debt along the

yield curve and suppressing rates as much as they can. and as i said, the irony will be that you will end up as you've seen in japan with actually fiscal stimulus programs being put in lace to encourage growth alongside the debt liquidation. so i think japan's kitchen sink approach is ultimately the end game for cubs like europe and possibly even in the uk, as well, in which dave is still struggling to balance the budget. >> okay. good to see you there. i was sitting in that seat two days ago. it's very comfortable in hong kong bureau. great team. thank you, guys, by the way. >> such kind hosts. >> terrific hosts. i appreciate it, bernie and everybody there. stick around. we'll come back to you. >> he's still fired up about what he's saying. it's fascinating. at a time when just this morning, what are we hearing again?

reiterations from germany saying no euro bonds, no euro bonds, no euro bonds. if you put it off any longer -- look, that's the real damage from the cyprus issue is the way in which it's turned public opinion against it, as well. we'll pick this up after a quick break. if you're just joining us after the break, these are your headlines. >> santander say profits tumbles as unemployment rates hit a record high. and a bid to take over verizon wireless from its partner vodafone. welcome to the new new york state, where cutting taxes for families and businesses is our business. we've reduced taxes and lowered costs to save businesses more than two billion dollars to grow jobs, cut middle class income taxes to the lowest rate in sixty years, and we're creating tax free zones for business startups. the new new york is working

creating tens of thousands of new businesses, and we're just getting started. to grow or start your business visit thenewny.com

earnings out of europe today, bank san tappeder missed forecasts. q1 profits dropped to 21.6 billion from a year ago. as you might secretary, european sales sluggish, down 3.4%. no surprise in ice cream, it's been awful with spring coming late. >> and margerine's moment has

passed. i'm glad britain never really got away tr butter. america really came of age during the margarine era. such a mistake. >> randstad up 7.5%. bat, up 2.18%. and bayer is one we'll focus in on. stock down 1% today. earnings edged higher. pesticides off the set by higher raw material costs. we will speak to bayer's ceo in a first here on cnbc in a slightly extended "worldwide exchange" today. not extended if you're in america, but if you're extended in the rest of the world, well, in europe, you will get to watch the marijn dekkers interview.

moving on, sony is raising its profit outlook or the last fiscal year. it expects net profit to double for $400 million. japan's stellar stock market has bostoned returns from sony's life insurance unit. and here is a look at what's on the agenda in the u.s. bristol myers reports before the open and is we'll hear from conco philips, exxon mobil and 3m. u.p.s., harley davidson, hershey, southwest airlines, united continental turn in their reports today. after the close, it's amazon and starbucks. quite a busy day on the earnings front. we will preview ex job results. so are twitter ask facebook friends? friends to business, i should say? stay tuned. [ driver ] today, my ambulance knew all about a bike accident,

just by talking to a helmet. it grabbed the patient's record before we even picked him up. it found out the doctor we needed was at st. anne's. wiggle your toes. and it got his okay on treatment from miles away. it even pulled strings with the stoplights. my ambulance talks with smoke alarms and pilots and stadiums. but, of course, it's a good listener too. [ female announcer ] today cisco is connecting the internet of everything. so everything works like never before. waib to the program. a female tweet sent stocks tumbling on monday and raised concerns about social media.

one firm that's been profiting from the rise in social media is the company hearsay social. the company is opening its first international office in london this week. here on set with us now is its ceo. welcome. >> thank you. >> so why london? well, i think we've seen the uk be a very forward adapter for social media for several years now. much of our u.s. investors are multi media companies. i think initially, a lot of companies would just understanding what was social media? how do they react? we've seen most organizations evolve from reactionary. >> this is more traders using

twitter for information, etcetera, but it means there's such an importance of having the right strategy online. what do you suggest they do? >> i think the incident this week underscores the power and the importance of social media as the communications channel. one that it's a really easy way. if you're a big corporation, certainly if you're a business, you're a nonprofit government or media, you need to have policies and systems and technology in place. >> how do you utilize social media to sell? how do you utilize tight make money? >> well, there's so many different ways. it depends on the business you're in. but there's two important foundational aspects of social media that are important. one is the proliferation of information that's out there. and making sure that businesses

take this data and tweet about it over a period of time. here hearsay social works with banks and insurance companies. >> how would you work with them? you our company focuses our software on sales reps. we think today's sales reps need to sell the way customers want to buy. this means being informed, it means being in the channels where a billion plus people are every day. >> so this conversation is going on in the social network. explain to me how that actually works this practice. the salesman has to engage in social online conversations. >> that's right. >> that's what you're saying, right? >> today and -- >> so how do you convert conversation into money? >> that's a great question. so today, 57% of online purchases -- sorry, 57% of purchases decisions are made

before the customer even engages with a salesperson. so that means whether you're a corporation or certainly the your a salesperson, you have to get out there and be a subject matter expert. you have to share information about your product and create demand so that people want to take the next step and send you an e-mail and pick up the phone. >> do you have some examples on of that? >> absolutely. again, if you look at the space where we operate, insurance and banking, many of these customers want to ask their friends who they should work with before they agree to work with that person. we're seeing all these organizations, whether it's in the u.s. or europe, using the social media as the initial for ray into growing their customer base. >> thank you very much for joining us. featured best seller, the facebook ir ra. >> we'll leave but a look at how futures are trading ahead of the open on wall street.

the dow trying to add about 36 points. european stocks have flipped into the green. just barely, though. can they hold their gains? we'll be right back.

welcome back to "worldwide exchange." i'm kelly evans. >> and i'm ross westgate. here's your headlines from around the world.

no triple dip recession, the uk avoiding another quarter of negative growth with gdp rising 0.3% in the first quarter, prompting a big spike in sterling. spain's unemployment hitting record 27.2% in the first quarter. bank santander sees profits fall and bad loans slowing. >> reports say verizon is preparing a $100 billion offer to try to convince vodafone to give up its stakes in verizon wireless. health care stocks fall as astrazeneca's forecast, bayer has lowered its outlook after missing expectations. we'll be joined by the ceo in around 30 minutes. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. >> we're drifting higher for u.s. futures. the nasdaq and s&p moving a

little higher, as well. we're going to get a ton of earnings out today. we'll preview exxon earnings shortly. nominal gdp is wa we're talking about. in any case, watch for amazon after the bell today. moving on to the cnbc ftse 300, we're up about 0.3%. the uk data came in better than expected, showing the avoidance of a triple dimth recession. the ftse did jump into the green after that report. we're now back below town by about 0.1%. xetra dax is trying to hold.

this is the one that's taking it hard today. down in the range of 1.2%. spain's unemployment rate is over 27%. you can understand the concern. how do you make money in these market? here is what our guests have been telling us all morning. >> we're seeing those shorts being squeezed. but sterling in general, like cable. >> default rates are low. you're seeing pretty good total returns. last year it was up around 16%. or if you're in our funds, this year, you're up 4%.

>> that means government is well supported. it might not have that much to do with the domestic dynamics. but investors, number one, behave as if there is a policy back stop which they perceive to be as credible. because of that, systemic -- has declined. so the numbers combined economic any longer to buy only these assets. >> let's get back out to shawn darby, head of global equity strategies at darby's. it's emerging markets that have been such a story this year. and examine it's their underperformance, fankly, whether you look at those nations and some of the smaller ones, as well. why do you think there's been this underperformance?

>> two reasons, one is the quality of markets has been exceptionally poor. that's led to enormous buybacks and dividend payouts in the u.s. and europe. in contrast, the emerging markets have found inflation levels difficult to overcome. therefore, cash flows have been very poor. part of the trade now has been investors appear to be much more concerned about the quality of cash flows. i think as the global economy slowing in unison, there's been a much greater sensitivity by investors towards the cash flows of companies. >> at the same time, it's interesting because if you look, and is maybe it's not fair to develop in emerging markets in this regard, but if you look at the u.s., if you look at some of the weaker growing nations that are still some of the bigger one

webs a lot of this isn't necessarily about the quality of the earnings, it's about share buybacks. it's about liquidity. is there a sense that perhaps the central banks aren't able to respond more? because they're not pursuing these buyback strategies? the kinds of things keeping afloat in the markets where i wouldn't expect is the very reason why we're not seeing them do well, as well? >> ironically, it's been very successful in lifting inflation rates and emerging markets. that's been the difficulty. countries like china would like to be raising rates. the underlying inflation rates in some measures are at double digits. and similar themes have been running through in brazil and also of course in some of the southeastern asian economies. so i think the bottom line here is that these central banks and emerging markets would like to

be much more sensitive towards dealing with inflation, but they can't because they've got this growth angle which they are trying to pursue, as well. that's where you want to produce this murky number in inflation markets. >> does that explain the significant underperformance of chinese stocks since u.s. stocks in 2010? the fact they're the complete opposite. >> i think you're right. i think the contrast has been with her record share buybacks coming through in the u.s. as well as dividend payouts and the quality has been very good. in china, the contrast has been, of course, the quality has been very poor. in that case, companies are still trying to raise money to boost their balance sheets because of the deterioration in working capital. so, again, i think everybody has

been brought up about top line gdp and it would naturally get transmitted to the bottom line in earnings. but since 2010, the inflation picture in emerging markets has created a hazard for equity investors. that is those margins have disappointed significantly and is that's what a cash flow has correspondingly equalled, as well. >> thanks for that. >> the building has now reached 200 according to police on the dow jones news wire. this collapse initially was reported to have killed at least 123 people and injuring more than a thousand. it was an eight-story building collapse on webs in the outskirts of the bangladeshi capital.

verizon is prepping a big -- by verizon wireless. l they be able to deal this time around? we'll be right back. ♪ [ agent smith ] i've found software that intrigues me. it appears it's an agent of good. ge has wired their medical hardware with innovative software to be in many places at the same time. using data to connect patients to software, to nurses to the right people and machines. ♪ helping hospitals treat people even better, while dramatically reducing waiting time. now a waiting room is just a room. [ telephone ringing ]

[ static warbles ] [ beeping ] red or blue? ♪

if you've just joined us,

news out of the uk today is we avoided a triple dip recession relief. george osborne, the chancellor and david cameron saying it's coming in better than expected. in the end, it was plus 0.3. we contracted minus 0.3 in the fourth quarter, which means for the last six months, the take home is flat maply due to strong oil and is gas in the and the service sector doing fairly well. elsewhere, manufacturing was weaker. but it did enough to shift the dial on cable. sterling/dollar, we were below 1.53 before that data came out. we've moved at least a firth and a half on sterling/dollar. 1.5436. it makes it less likely we'll get more qe. the bank of england vote has been 6-3 to vote against more quantitative easing. this figure suggests we won't get anything else. the last meeting, kelly, of the current bank of england says mr.

carney takes over in june. >> and he's been joit voted. we also want to know what this will mean for austerity versus stimulus. if you want to weigh in, by the way, on our website. cnbc.com is the place to vote. meanwhile, a mixed bag of earnings for spanish banks. santander posting a 26% drop in net profit. well below forecasts. at the same time, caxiobank beat estimates for the quarter. sharing the first signs of recovery, they need to, they have modest earnings of 74. but the cool thing and they've swung from their record loss tr 2012. joining us now is derek. good to see you. look, we see spanish

unemployment at a record high. 27. 2% this morning. i mean, no surprise to see earnings of santander weak as they're on the back of that. >> yes. no, earnings are very -- at the moment in the domestic spanish business. in addition to that for santander, they are facing revenue head winds from brazil where volume growth is low in the context of the brazilian markets and interest rates are a little higher versus the eurozone or the uk for the brazilian market are relatively low. we're seeing some head winds on margines and revenues in brazil, as well. >> brazil is interesting because it's a quarter of its profit. the whole point of santander is it's supposed to offset, you know, the sluggish european economy. why is brazil not performing as we thought? >> well, i think it actually turns the profits from brazil to offer quite a significant push

into profitability at the group level for santander. but in terms of trends, you know, brazil have a relatively weak 2012 expectations for the gdp now have stabilized to improve for 2013. but given the recent history of growth in brazil, 2012 was a weak year in that sense. the contribution is weaker. the expectations are that things in 2013 should improve, but still a risk there given, i would say, low volume growth and a weak revenue environment. >> just a word generally about the banks. we continue to see yield this week in italy, you know, lowest since 2000. yields have been lower in spain, as well. how much is that going to help out the view of the bank, bearing in mind they've loaded up on so much spanish and italian debt. >> well, it's important that the

levels don't have a lot of breaks. and the yields for getting off this bond portfolio will fall as their portfolio lowers into yields and bonds. i think the banks would see it as a vote of confidence. that's a positive indicator. i think the technical impact on their p&l is likely to be negative in terms of the paao. >> good to see you. thank you for that. and if you're just joining us on the program, these are your headlines. the uk economy growing march expected. san tan tand he's profit

declass ae their check partner voted for it. so the telecom industry chock-full of details in the last month. courtney has more for us at the headquarters in the united states. >> hey, it's great do you see. i haven't seen you in so long. it's nice to be with you on "worldwide exchange" this morning. verizon has rt roedly hired advisers to prepare a possible $100 billion cash and stock bid to buy very rison investments from vodafone. voters reports the company's board is expected to discuss the matter at a regd scheduled next week. verizon could take the bid fun if voda phone is selected. it did repeat its long standing

statement earlier this month that there will be a willing buyer of vodafone stake. verizon is confident it can raise about $ 5 billion in bavt control. as for vodafone, a sale would allow it to return cash to shareholders or buy more fixed line assets in europe. reports say one big sticking point to a deal has been the per session vodafone will be stuck with a huge tax bill, as much as $20 billion, if it sells. verizon would have to pay a high price to make it worthwhile want a verizon/vodafone deal could come at a time of revitalization in the mobile economy. last week, dish network offered $25 billion to buy sprint and neck deal. ver rideson came close to a deal

in 2040, that's when rand's actions would have voted for him to sell his stake in verizon wireless. the wireless business is vastly outperforming its u.s. rivals. vodafone is up about 26% this year on renewed investors hopes on that it will finally decide to sell. >> it's going to be interesting. verizon wireless at over $200 billion. >> how far back is that? >> it's an astonishing valuation to put on a company. >> and as you say, you've been following this deal or lack thereof. >> for 15 years, i've been talking about vodafone verizon and their stakes. anyway, court, thanks for that. still to come, we'll talk about exxon. it's set to report its first

adequate either results in around two hours. >> oil price ves fallen recently. we want to see what that does for energy and the earnings giant. welcome to the new new york state, where cutting taxes for families and businesses is our business. we've reduced taxes and lowered costs to save businesses more than two billion dollars to grow jobs, cut middle class income taxes to the lowest rate in sixty years, and we're creating tax free zones for business startups. the new new york is working creating tens of thousands of new businesses, and we're just getting started. to grow or start your business visit thenewny.com bny mellon combines investment management & investment servicing,

giving us unique insights which help us attract the industry's brightest minds who create powerful strategies for a country's investments which are used to build new schools to build more bright minds. invested in the world. bny mellon. it's lots of things. all waking up. connecting to the global phenomenon we call the internet of everything. ♪ it's going to be amazing. and exciting. and maybe, most remarkably, not that far away.

we're going to wake the world up. and watch, with eyes wide, as it gets to work. cisco. tomorrow starts here. welcome back to the program. this afternoon, the financial stability oversight council meets to vote on and release its third annual report of potential risks to the u.s. economy. the company is made up of heads of u.s. financial regulators and the report is expected to focus on computerized trading. new rules went into this effect this month aimed at preventing another slash crash to shift markets back in 2010.

meanwhile, park says reuters the situation is as untenable as it is, the faa is reducing the number of controlses by 10% a day as it deals with budget cuts under the sequester. hundreds of flights delays, they've had to space out the number of planes on the runway. 10% a day sthp. >> and there's a lot of talk about how much politics this is, like canceling the white house tours, how much it's really needed. and i think i heard the other day, as well, they canceled sweep week in new york. oh, the stories we could tell. yes. here is a look at what's on the agenda today. lots of earnings and weekly jobless claims out at 8:30 a.m. eastern. bristol myers is among those reporting before the open. also bristol myers, conco philips, exxon mobil and 3m. u.p.s., harley davidson,

hershey, southwest airlines and united continental turn in results. amazon and starbucks after the bell. herbalife could name a new auditor after an insider trading scandal. and it's unfair whether bell akman or carl icahn -- i can't do this. >> you were right the first time, herbal life. >> a few more months in the program and you'll be complete. >> exxon mobil does report results at 8:00 a.m. eastern. the company recently regained its title of the world's top company. the oil giant is expected to all right smaller profits due to lower production, but let's more or less get straight out to chris kettering. exxon is far from being just an oil company these days. what are you expecting them to see to say in terms of results here?

>> good morning. look, you know, we're looking for 118 billion in top line revenues from the company this morning. that should translate to about 9.3 billion in net income to the company. upstream results are always the main performers. we're looking for about 6.1 billion from international from exxon and upstream this morning. 1.1 from the u.s. and then 1.18 billion in downstream with 745 million from the chemicals segment for 1g 2013. >> what's is the story for exxon? where do you see the shares going from here? >> the thing this i'm watching for is timing on pearl. it's the company's in canada. it's been delayed for several quarters now. production growth basically

equates to stock price performance. i think we saw some commercial production in march. the outlook will drive the reaction the stom stock has to the earnings call this morning. >> just finally, look, buybacks mean such a big sparter for the wider market. what will exxon say about their buyback program and dividends? >> you know, i -- well, look, we had the 10.5% dividend announced yesterday taking, you know, dividend returns to shareholders from 10 webillion in 2012. we'll see a bump there. it's definitely below the q2. but i think the big question for a large cap oil and gas investors is how sustainable these company buybacks are. exxon is on pace to do about 5 billion in share buybacks a quarter. you know, i think that's hinged on oil and is gas prices. there's some risk there, i think. >> thank you, chris. chris keterman from phoenix partners. stick around.

ross will be speaking with the ceo of bayer in just a few moments time.

earnings central. quarterly results from a parade of companies, including dow components exxon mobil and 3h. plus, the state of the u.s. economy, a key read on jobs and delayed by uncle sam, the travel industry warnings that a furlough-induced shortage in air traffic controllers is starting to be more than just an nowance. it is thursday, april 25th, 2013. take your kids to work day and "squawk box" begins right now. all righty then.

>> hey, good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin and all the little squawkers this morning. yeah, they're here with us for the day. so this could get interesting. we go on to u.s. equity futures. at this hour, you could see some green arrows. right now, s&p futures up by just over 3. of course, the dow is coming off the a losing session. this came after three straight days of gains. we're going to call this a gain even though the s&p 500 was up by 0. 1%. wait, 01? i don't know if i've ever seen a gain like that. >>