you're watching cnbc's "worldwide exchange." i'm ross westgate. >> and i'm kelly evans. these are your headlines from around the world. first quarter gdp today in the u.s. likely to show a rebound after the stall at the end of the last year. the bank of japan suggests it will hit its cpi data within two years. the fight against deflation will be a difficult one. over-shadowing samsung's sixth straight profit gain.

nomura has its best earnings in a year. and the spanish prime minister is expected to shift his emphasis to growth when he lays out fresh budget reforms today. >> you're watching "worldwide exchange," bringing you business news from around the globe. okay. >> all right. >> welcome to the start of the show. we've got a little data to kick off with. >> the ecb is out with some figures, showing 276% growth. >> minus -- >> yeah. >> minus 0.8%, which was what apparently reuters were expecting was minus 0.8%. the annual growth at the n3 annual growth versus 3%. which may get some more room if

they're word about m2 and m3 to cut rates. >> i was just quoting bill blain who said they should cut. will they? s it's a different question. will they try to get funds flowing to periphery. also important is what they're saying about holdings of italian and spanish debt. so a couple of these numbers coming out needs to be saying that spanish banks bought about 15 billion euros in government bonds in march. italian banks bought a net about 11 billion in government bonds for the month. >> the good news is they made money on those purchases. >> literally, we've seen a massive rally. >> they've done okay. because a lot question whether you're buying at the top of the market. >> what i'd really like to know when we get the results is less about what spanish banks are

buying from their own governments and more about what central banks in those countries are having to borrow effectively from the bundes bank. so if we get any more out of the ecb on any of those funds, we'll bring it to you. >> let's remind you of what else is coming up on today's show. starbucks, secretary quarter, they're in line with forecasts. we'll take a deeper look at the company's expansion plans at 10:40 cet as the coffee giant closes in on a thousand stores in china or japan. is that a thousand each or combined? i'm not sure. >> good question. we'll look it up. el bull is going to give us a sense of what vintages people are after. and samsung has poked its sixth straight quarters earnings growth will be out. we'll talk to a guest who thinks the company is outpacing apple

on innovation. >> we'll continue our own austerity debate here in a couple minutes' time. >> i don't think we should have austerity on the desk, anyway. plus, the final exclusive interview from our week with "worldwide exchange" in china. i sat down with new ceo michael yew, but what does he think of the decade to come? find out at 10:45 cet. he was one of those companies listed on the new york stock exchange. it's the subject of the muddy waters attack. do you remember that, kelly? >> absolutely. >> he had to face that head on, as well. he spent a lot of money with outside offices and accountants, as well. >> a little more news here from the european central bank says private deposits at cyprus banks, and we are looking at this after the events of the last couple of months, fell 3.9% on the month in march. that's obviously huge. >> they rose in greece.

>> but they rose 1% in greece. >> so some of that money out of cyprus went into -- >> private deposits in italian banks were up 3.1% for the month. so the question is how much cyprus was affected, but what percent italian banks throughout the rest of the periphery reacted by moving some of their own money, i should say. so we'll look for the number. here we go. private deposit of spanish banks rose 1.2% in march. but what was the timing? so this would have been -- i'm trying to get back and remember when that announcement about cyprus actually came through as to whether that was fully captured by these figures. and i would imagine, as well, that the april figures will be quite telling, as well. >> at the moment, money came out of cyprus and the deposits elsewhere went up. >> up 2.7%. >> there we go. >> interesting. >> clearly, earnings coming up from china. >> let's move on now. the earnings trade from chinese companies is in full swing.

we're waiting on results from a number of top lenders today. most analysts expect the earnings growth to slow amid the climate. banks are missed. the bank of china missed expectations. you can look at chinese banks today, rallying in the range of about two-thirds, better than 1.5%. other companies put the results on tap, including ping an insurance and zte. that will be one to watch. baidu missed profits on the line. this from a company that turned out double digit earnings growth last year. higher marketing costs were partly to blame in the quarter. there are concerns about the ability to gain revenue from mobile. meanwhile, in japan, the abe rally, profit at nomura

holdings, surged 2% to 3% in the january the march period. it's the highest quarterly earnings in years. it blew past consensus estimates on both top and bottom lines. stock sales, mutual funds helped by gains in resource operations. nomura has been trying to trim costs in profitable regions like europe while building its reputation at home in the wake of an insider trading scandal. jim mccafferty with cib securities, good to see you, jim. thanks for joining us. look, good numbers at nomura. it's all on the back, of course, of the abe trade. is everyone made the same sort of numbers, you think? >> well, i think if you think about nomura's domestic decision in japan, it is the biggest provider of retail stock broking services. it has a huge distribution network. it has cut its operations in new york, cut its operations in institutional business and for

the jab niece market up 40% this year, it hardly surprisingly is making money. >> yeah. as far as the sort of momentum indicators on earnings, as well, what do you -- what do you focus on? how do you see it going? >> well, what we've seen right now in asia and cimb covers a thousand stocks in asia ex japan including australia, we track every week something called an earnings momentum indicator. across these nine geographies, we saw it last week for the first time in 12 weeks, we saw positive earnings momentum. what that means is more upgrades than downgrades. when we did have downgrades, the downgrades were modest. cimb is a good place to look for this because we have such a big rate of coverage. we are seeing some positive news. that's the first time for ten weeks the. >> we talk about in korea, you saw three upgrades to one downgrade. you've increased your earnings estimate for samsung, as well. what's behind that? >> well, it's interesting.

samsung, we got q1 today. we have lg electronics with the results. yesterday we had a couple of other suppliers to lg and samsung with very strong earnings. korea has been a bad motorcycles for the first quart either of this year. it's down about 4%. but korea is beginning to come right in terms of some of the tech operators. and i guess it has to do with smartphones. with smartphone demand it has to do quite strong in terms of the korean suppliers of the samsung market. then the news is actually quite positive. >> yeah. okay. we'll come back to samsung in just a second. let me show you the data on that, as well. look, one of the things we have seen, of course, is this underperformance, as well, jim, of china earnings between china earnings and, you know, u.s. stock performance. it had been a sharp

underperformance of u.s. stocks, as well. is that going to continue for emerging markets in asia? >> we're actually quite optimistic about china. yes, it's been a laggard in the first quarter. but being mineful of what's going on in the u.s., we have a u.s. housing recovery coming through. as u.s. house prices go up, that means consumers in the u.s. have an opportunity to refinance. they can refinance on better terms. that means more money in the pockets of the u.s. consumer. if that does happen, then that would tend to mean higher export demand for countries such as korea, taiwan and china. now, historically, china has arrived the exports to make up this gdp competition. now through more fixed asset investments. so if china can be a beneficiary of exports, assuming the u.s. recovery continues, then look at the banks, q1 from the banks is coming through. they are not dreadful. i think a lot of people estimated these results would be bad. but, in fact, share prices are moving up. i think if confidence does

actually start continuing with china, then we should see china pick up in the second quarter and towards the second half of this year. >> you have had some downgrade. you talk about this, in your most severe hong kong china earnings downgrade, by 26%, what's the thinking behind that? >> well, one of our analysts was up in shanghai this week. he visited the shanghai motor show. what we're seeing is we're seeing a lot of new products coming through. but we're also seeing some squeeze on margins. and i think in terms of pricing, some of the suppliers of luxury cars are seeing prices being squeezed. and i think some of the measures which the chinese authorities are putsing in place in terms of luxury goods and luxury products which don't go too well in terms of the social manifest of the chinese authorities are coming under pressure. so that's really, i think, causing some stifling of the luxury goods products. >> jim, good to see you. thanks for joining us. have a good evening in hong kong.

over in korea, samsung electronics has posted a sixth straight quarter of earnings growth thanks to demand for its smartphones. operating profits were down from the previous quarter for the first time since 2011. is samsung/apple debate rages on. shery is joining us from hong kong. >> operating profit coming in at 8.8 trillion, up 54% in line with its guidance and market forecasts. and it was mostly thanks to, what else? the galaxy selling some 70 million units of smartphones in the past quarter. but its businesses and ships, paddles and consumer electronics, including tvs, were down given that first quarter is sent to be slow. highlighting even more now that

the fact that samsung is heavily dependent on its mobile business. the galaxy is accounting for about 74% of its overall profit sometimes. in terms of the stock market performance, today, though, it did lose money. traders are likely to see the sales figure for the new flagship smartphone galaxy s4 that started selling this morning starting here in the south korea market. by the way, speaking of the new phones, some comments out of this conference call this morning, the galaxy s4 is expected to do better than its predecessor, s3. that's according to samsung electronics. and some of us talked about the surprise snags and samsung did address this issues this morning saying this was because of overwhelming demand for the new product and that will be addressed and there will be no problems there. guys, back to you. >> thanks for that, chery.

in the meantime, alternatings parade continues. >> bbpa posting a 72% profit in the first quarter. mostly driven by asset sales in latin america. it had a bit of margins, as well. the stock is trading lower because the bank made less income than expected. stephane has more on the reaction in madrid. it's no fun boosting sales from asset income, is it? >> that's the thing. if you look at the top line, it was better than expected 72% increase. but it's due to the significant plan that the company has in latin america. the if you remember, we talked about the story earlier this week. it solves its business in plenty of south american countries including chile and columbia in mexico for 1.7 billion. earlier this week in peru for nearly $550 million. but, of course, this is boosting

supply, but it doesn't mean the situation is getting better for the banks. net profits for the first quarter is down 17%. >> stephane, stay there because we want to talk about that drop. spain has unveiled its latest plan to stimulate growth today. will unveil, i should say. mariana rajoy's plan is expected to move in favor of growth. yesterday, trouble erupted in anti-austerity demonstrations near the spanish parliament. for the second round of protests has reportedly been called off today due to a lack of support. stephane, what's the move there? what can you tell us about the streets of madrid today? >> first of all, i went to the protests yesterday because it's very close to here, close to the

madrid stock exchange. i saw more policemen on the ground than protesters. that seems to confirm what you say, that it was a failure from organizers. actually, plenty of people wanting to demonstrate, but they were worried about the violent clash that could happen with the police. it's what i've heard from spanish people here this morning and actually on my way to work this morning, i parked next to the congress. and this, yes, that was a failure. the siege to the congress has ended late yesterday. now, what rajoy is going to announce today, because that's really the most important piece of news, according to the spanish newspaper, there is some fiscal review to reduce, for instance, some dax rebates for companies and individuals which india is going to increase their tax bill and hire someone to accelerate the reform of the electricity sector to reduce the debt between the regulated price

of electricity and the products and cost. that's a significant debt. 5.6 billion euros last year. that's for the state and rajoy wants to share the burden with electricity companies. and also, he is expected to announce some serious measures we've been talking about. from small and medium sized company, for instance, he wants to ease the credit access, the access to credit for small companies and is going also to announce some administrative issues which means you will be able to create the company with at least one euro in capital in less than 24 hours. >> one euro of capital in less than 24 hours. that could -- stephane, how does that compare with what it takes now? >> annoy it takes a couple of hundred euros to create the company, not tntio capital needs.

if total cost to create the spanish company would be below 40 euros. what the government wants to do, it's to push people to create their own company, to get a job, but also to avoid the -- economy which is increasing in spain. it's very difficult to estimate the size of the black economy, but one-third of the spanish company is now of taxes because plenty of people here were unemployed as a small business to survive. the plan from the government is to bring these people back on track and make your business official. >> that is a fascinating point. stephane, thanks very much for that. the growing austerity debate playing out front and center.

they've been insisting their work wasn't meant to be taken as pro austerity. at the same time, paul crudeman writing alongside reinhart and rogoff saying the tool was really just a tool for people to police their own political agenda. who is right in the great austerity debate? e-mail us, worldwide@cnbc.com. tweet us, @cnbcwex. reinhart & rogoff have been under tremendous pressure so they're coming out now with a joint editorial. and they're saying it's politicians fault using it for their own agenda. but i have to say, reinhart and rogoff thems themselves were pretty vocal when it comes down to what the austerity meant and the need to be austerity minded. i understand what they're saying, but it's still an

incredibly difficult situation. >> yeah. and as you say, the uk actually really done a lot of cutting. they cut a lot of investment spending. they cut the wrong -- and exactly. and even though it hasn't been that austerity, there has been a net shift towards -- >> yeah. cut growth drivers in the future instead of spending that day. >> yeah. on that note, as you said, sending your thoughts on the program, who is at fault here? who is right? what side of the department are you on? does it depend on the circumstances? you can e-mail us, worldwide@cnbc.com or tweet us. let's check in on markets now. ross. >> thanks for that. 8-2, 7-2 even decliners outpacing advancers. it comes after a pretty good five-day rally. cnbc stocks 300 down in the past five days. the ftse mib off 0.7%, ibex down

0.9%. put into context what we've seen in the last five sessions. we want to take a look at some ft of the other asset prices, as well. 4.12% for italian mib. we got down to 3 the 3.92% on tuesday. gdp, we were up to 1.56% on the year. on the currency market, we saw cable at 1.54. we are still there holding on to the gains we saw during the session. dollar/yen, 98.64 is where we stand at the moment. we got that data suggesting that far from the yen carry trade getting into swing post the bank of japan action, the reversal happened and that is being pulled back into japan from overseas. aussie/dollar below 1.03. euro/dollar, just above 1.30.

that's where we stand right now on this last trading day of the week. let's recap that session in asia. sixuan is with us from singapore. >> hi. thank you, ross. asian markets wrapped up the week on a negative turn while earnings is still very much the play of the day. in japan, the nikkei 225 closed down 0.3%. exporters were under pressure as the yen regained some lost ground. but japan tobacco jumped 277% today after its record profit forecast. in south korea, the kospi eased up 0.4%. samsung electronics lost 0.5% despite the tech giant posting another record quarter. and shares in hong kong outperformed as the rest of asia with the hang seng ending higher by 0.7% as it has rallied over 5% since last thursday when that index tested the 2013 low. shares of byd, the chinese carmaker, backed by warren buffett jumped over 12% today after its q1 profit more than

tripled from a year ago due to the release of new models. but mainland bourses extended losses in late trade ending down by 1% ahead of a five-day long weekend. airline stocks all under pressure today. china southern fell 1.99% due to ticket costs and the bird flu weighed on the sector. cole costs tumbled. . yanzhou coal tumbled 3%. miners in australia, bhp billiton and rio tinto both gained over 2% and newcrest rallied 3.6% today. back to you. >> all right, sixuan, we'll catch you a little later. still to come, our next guest says the dollar rally might soon come to a pause.

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cnoc, i don't have a forecast for you pb but the first quarter 2013 net

production up 17.3%. oil and gas sales revenue, 55.31 billion yuan. kelly. >> i want to pick up with norway. this is one of the world's biggest investors in sovereign fund and interesting stuff this morning. first of all, the ft is talking about how they're going to become more of an active investor. the fund itself coming out after saying it had no major change in strategy in sight saying it is going to decrease or has seen its holdings of european power falling from above 9% to below 80% as of the first quarter. it has increased its holdings of u.s., netherlands and germany, bond holdings, that is, and cut the holdings for japan, austria and france. interesting there, we look at potentially what moves we're seeing with regard to jgbs and what moreway does can have a major influence. their fixed income investments just over 1% in the first

quarter. the total value of the fund wag over 4 trillion, but that's in local currency. they would turn 5.4% on their investments generally in the first quarter. 8.3% on their equity investments. interesting, as well, that the biggest contributor to that first quarter performance was blackrock and the worst performer for them was apple. but they certainly didn't get out of that before the sell-off. >> no. no. the bank of japan expects inflation in the country will hit 3% in the two years and is likely in the second half of the period. the bank of japan said easing monetary policy will help it. it's vowed to print money as long as necessary. today it kept its policy unchanged. the new data showed the country still stubbornly stuck in deflation. core cpi down 0.5% in march from a year ago. >> okay. meanwhile, former can he cb

executive board member shared his view on japan with us earlier. >> what are the japanese doing with the money they receive from central bank in exchange for foreign assets? so the exchange rate is going down dramatically. is it any better in the other economies of the world? they're buying new assets, new risk. so this is having a big impact. >> getting away from the 100 mark. joining us for more, ian from morgan stanley. ian, people feel we're going to get through 300 and then we get the data suggesting there's been repatriation back into japan. what's going to happen now? >> yes.

i think as far as the yen weakening trend is, that concern, we are likely to see a bit of a pause taking place over the course of the coming weeks. longer term, we are still expecting the yen to continue weakening, although the pace of that weakening might be to slow somewhat. but in the short-term, i think we're likely to see a bit of a correction taking place. i wouldn't be surprised to see a short-term pullback in the data yen and even in the euro/yen. and as far as the flow data is concerned going into the beginning of april and the end of margining of april, there tends to be a bit of a repatriation around that time given the fiscal year-end. but by the end of april, you wouldn't expect to see in this data your outflow starting to take place. once again, a reallocation of their capital for overseas investments by the japanese fund managers. asset, that hasn't shown up in the data and when you look at the amounts we've seen from many

of the japanese fund managers over the course of the past week, they have announced fairly tumultuous and cautious investment strategies for the coming year. so it looks like the allocation to overseas assets will be far more moderate and cautious than the market was initially expecting. and then as far as their hedging ratios are concerned, again, any reduction in the hedging ratio looks to be quite moderate at this stage, as well. so pulling this together, that suggests that the outflow from japan the market was expecting could be far more moderate than the initial assumptions. >> yeah. may i suggest the speculators are front running the story in rather than the facts. thanks for that. we'll come back to you still in just a few moments. straight ahead on the program, former ceb governing council members saying the european central bank might have to follow the example of their overseas peers and respond to aggressive monetary policy.

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investment res bounded in the first quarter after stalling at the end of the last year. >> the bank of japan expects it will hit its inflation target in

more than three years. signalling the flight against deflation will be a difficult one. >> banks in spain, italy and amazingly -- perhaps putting to rest fierce of contagion effects from the cypriot bailout. plus, as the austerity bailout rages around the world, spanish prime minister mariana rajoy expected to lay out fresh budget reforms today. european stocks today are down. the ftse 100 down 0.3%. xetra dax, as well. cac 40 down 0.76% and the ftse mib is down 0.6%. first quarter profit, 4.7 billion yuan. the operating revenue, 77.82 billion. the bbva ceo out talking

about how two-thirds of their first quarter new nonperforming loans are in spain. not a big surprise but, of course, that company hit by weak credit demand across spain. take a look at the bond yields this morning. we're seeing italy continue to back up a little bit. 4.09%. japan edging higher despite that waeshg cpi figure perhaps looking at the bank of japan can't meet their goal by this year or next. german bunch getting a bid, as well. much in the markets has to do about an ecb rate cut. angela merkel has suggesting to a banking conch ecb is in a difficult situation. she said theecb probably should increase rates for germany, but needs to do more to be available for business necessary other states.

people might be making too much of the extend to which she was making that kind of statement. nevertheless, karen caught up with the former executive board member at the ecb in an exclusive sit down. she asked him if, in his opinion, the u.s. does need to kick start growth. >> if you take asia, the u.s., europe, europe is in a weaker spot. so one would expect the euro to be weaker than the others. that's not what we're seeing. we're seeing voices which are very aggressive in other parts of the world compare to europe. europe has to react to that president. >> wouldn't an interest rate reduction makes a difference to europe? >> well, it would not be counterproductive, certainly. so i don't think it would hurt. that might be a first step for trying to align conditions for what is happening in the rest of the world. >> the main argument against it is that the concerns of the

transmission mechanism is still working effectively, the likes of germany, but many of the smes are not seeing the borrowing costs. so what is the point of reducing interest rates? >> first, also the core,s a you call it, is having problems. so i think the benefits will be there. the transition mechanism is not working that way. if you cut rates, probably part of it will be transmitted. of course, it's not enough. it cannot solve our problems, so the reason needs to solve the transmission mechanisms which partly needs to the failure of the banking system is deaf leveraging. so i think the authorities in this country needs to do something with the banking system to stop it deleveraging. >> what you're saying is this is not necessarily a jog for mario draghi. the omt did the first step, the next step is down to local authorities. >> the next step may be also for the ecb to some extent. but not all of it. clearly, the local authorities have to do something in terms of stopping the deleveraging and

trying to avoid the credit crunch. >> they were talking about further extraordinary measures that the ecb may have to embark on today. do you think that is going to be the case? is mario draghi going to have to get into the path of further stream measures? >> no. some additional measures, i think will be needed. i think it depends on the economy, how the economy conditions are. but clearly, affected other central banks are taking further steps. it is a challenge for the cb. you have to look at monetary conditions not only in terms of what is happening in europe, but in what is happening in the rest world. you cannot just be the more conservative central bank. without taking into account the rest of the world. otherwise, the impact will be on the exchange rate and this is recessionary for europe. >> if you want to hear more of what he had to say to karen in that interview, head over to the website.

check out the piece titled "europe should weaken its currency." speaking of which -- >> let's show you where we stand with european rates right now. euro/yen, 128.50. euro/dollar, 0.8436. euro/franc 1.2299. we started off that interview saying should we try and weaken the europe? it doesn't look like it's going to happen. >> as far as the euro is concerned, there are two very distinctive riding forces which are giving conflicting signals at the moment. you have the underlying fundamentals there which have been start to go deteriorate once again within europe, particularly the core of europe. and on top of that, you had the liquidity story, this prospect of a huge amount of liquidity coming into the eurozone and providing support for european assets and the euro. now that we see that liquidity story starting to lose some of its rates and it is going to question how much liquidity may

well start to be reago indicated into europe, that could now lead the euro increasingly exposed to those underlying fundamentals. as we've seen over the course of the past week, we are starting to get some quite negative signals, even from the core. many of the leading indicators are now starting to turn lower once again. so that is certainly now starting to hint up the ecb debate once again and the market consensus has shifted towards another rate cut. so i think the euro will now become increasingly exposed to that fundamental become and i think that's going to put the euro under increasing pressure as the market starts to question the amount of support it will get from the reallocation. >> ian, at the same time, it might be checked that the dollar weakens. what we know recently is that given the way the u.s. data has turned over, the fed might shift from talking about an exit to maybe talking about more accommodation or at least the markets will push them in that direction. what is your expectation for the dollar here, especially with

that first quarter gdp coming up? >> as far as the dollar is concerned, it will stay quite positive on the dollar. we believe that the composition of flows into the u.s. provides quite a positive signal, as well. the composition flow does suggest that there is investment inflow taking place well within the safe haven or inflow taking place into the u.s. so it is changing its behavior. it is becoming more pro cyclical with regard to its trading activities, becoming far more correlated to asset markets and into the equity markets. so that does suggest if we continue to see monetary policy stimulus and other growth supported measures in the u.s., that could actually seep through into being a supportive back drop for the u.s. rather than the more traditional negative impacts. so i think the dollar will continue to hold up extremely well in these market conditions. >> that's an interesting point. as you say, perhaps some of the

headwi headwind. we'll leave it there, ian standard for morgan stanley, thanks. and we've got numbers out from icbc, as well. it's 2013 q4 net profits 68.7 billion yuan. slightly better than the 66.1 that had been forecasted. ratio pretty low, 0.87%. meanwhile, in italy, the prime minister enrica letter for talks held yesterday on forming a government had been encouraging, but he admitted there are significant differences remain, berlusconi's central right party and month meetings are needed. and capital controls have been extended, but officials eased some of the restrictions, including allowing businesses to transfer up to half a million euros abroad. individuals leaving the country can now take up to 3,000 euros on their trip. that's up from 1,000. next tuesday, sip sri yot

lawmakers begin debating the country's layout. banks deposits increased in countries last month including italy, spain and slovenia. deposits of cyprus did fall 3.9% in march. >> and japanese car measuremakers honda and mazda report earnings today. did the weaker yen help push profits into the fast lane? fushiko has this story. >> hi, kelly. yes, it did. japan's third biggest carmaker honda posted a net profit of 3.7 billion for the fiscal year ending in march. profits up 74% on the year. sales grew 24%, helped by the strong sales with civic and accord in the u.s. as well as in asia. the automaker forecast its global car sales would rise 7.7% to 3.7 million vehicles and

projects 58%wide in net profit for the current fiscal year. japan's most reliant exportmaker mazda posted a 308 million profit for the fiscal year through march. it was the first time in five fiscal years for mazda to return to the black. mazda gets a large boost from a weaker yen says it exports 80% what it makes in japan. these reports show a strong comeback with the japanese carmakers with the help of a weaker yen. the yen has lost 14% since the start of the year. toyota and nissan will release earnings in the coming weeks. back to you, kelly. >> thanks very much for that. picking up with the automakers, renault says it will make nissan's new contact car in france. the company under huge pressure like all the other automakers to make sure it is employing people in france. not sure investors love it, shares are down almost 2%. getting any thoughts or comments, e-mail us,

worldwide@cnbc.com. still to come on the show, wine seller in new york today. how do you invest in wine without giving your wallet something of a hangover? and why is this wine collection in particular more interesting than others? we'll talk about that when we come back.

welcome back to the program. india's icic says q4 net profits were 23.04 been rupees. net nonperforming assets at the end of the quarter, a bit of a deterioration, but unlikely to raise too much concern here. india's sensex just fyi is off about 0.5%. now, we're going to bring you the final exclusive interview from my weekend in china, "worldwide exchange." >> it was a quick trip. >> it was a very quick trip. we got a lot down. i sat down with michael yew, founder of -- and i want to know

why he listed stateside and how he dealt with those muddy water accusations. >> so these go through united states and nyc to get listed is that i think i should bring my company to the world and let the world understand my company and let the world buy my company. and i hope that through doing this i can show to the world, people, china has good companies. so even though we go through a lot of uppes and downs and a lot of -- from like the muddy water, i am pretty still sure about the company. so we have to prove to the world that we are by all the rules, all the regulations, step up by the world, buy acc and also we have to let our investers totally have confidence in us. >> are you confident that you've

done enough? >> i'm trying to make my best t and make our company a good company for all the investors who want to buy the stocks and the shares. i am pretty sure we have that list almost eight years and there are still a lot of investors still being our company. that means we have china to try out that. but i am pretty sure we can do it better. >> i think a number of people said surprisingly to me that the last decade has been something of a very lost decade for chinese private citizens. do you agree with that? what do they mean? >> not really lost decade. it's still decade. we are still developing. and they're still growing. actually, fast. but the problem people are talking about this is because state own the business is also developing and they occupy lots of the resources that should be occupied by private businesses. i'm pretty sure that our new

leaders understand this. so i have full confidence that for the next decade, the resources, most of the resources will come back to private businesses. >> so how important is this grouping here, the china entrepreneur in promoting and advising on the reforms that are needed? >> we have ifos to tell people, tell other private business owners that what we think about, how -- what we should do about our spirits, our entrepreneurism. and what is right, what is wrong in private business in china. how to cooperate with government officials, with government toes push the chinese develop the forward, in the right way, not through the wrong way and also to combine our forces together to do better things in china. that's into each other's business and we support each other when the business is in crisis and we -- together, we as

a group, we go overseas to other countries to learn from the world businesses outside. >> it's fascinating stuff there. i just wanted to bring you some news, as well, out of the uk here. commerzbank has lost its court appeal over banker bonuses. it slashed pay in some cases by 90% in the wake of the financial crisis, got in trouble with that, was trying to appeal the decision and now the news out of london is that it has lost that appeal. all right. meanwhi meanwhile, it was built as the world's finest restaurant. having closed the door, the head chef is now opening up the wine seller. it kicked off in hong kong making $1el 82 million. tonight, he will be on the closing bell. good to see you. thanks so much indeed for joining us. what's the new york sale? is it going to exceed sort of yesterday? >> yeah.

the recession seems to indicate that. and i can it's dependent on whether the chinese market gets behind the sale as much as they did with the chinese sale. >> what is it about this collection that is so attractive? >> well, i think, as you said, the restaurant is just significant and for the chinese and for the market, it is a significant collection. so, you know, it's 30% over their highest belief of what the wine collection is going to make is really quite something. >> how much of a difference that they're buying bottles of wine as opposed to buying for the entrepreneur. >> that's why they're booilg buying bottles. it could be a trend. it could be a trend going to bottles rather than the entrepreneur. >> what different would that make as an investor? >> interestingly, in the last few days, la-fitta margot who

cut their prices significantly over last year, their reaction to the devastating -- >> wine cellars are bursting. >> what is that a reaction to? >> it's a reaction to the 2011. all the -- in france are still holding the 2011 vintage. the last time i was on the program, i said 2011 wasn't going to sell because the price is too high. they've actually reacted to that. it is price over quality now in markets. >> is this just repricing or is there something more fundamental going on where wine prices are falling because this asian buyer is more than it was 18 months ago? >> it's a really good point. the market is much more sophisticated than maybe three, four, five years ago. so they're really looking for the bargains. it's really important that bordeaux reacts to that trend.

i think it's a positive step and there's real value within the market. >> we might ask a stock picker, is this the bottom, is this a place where people can get in after this sell offor are there concerns that if asia doesn't rebound that the price res going to stay down here? >> absolutely right. and it's called the market correctly in the middle of the last year and now it's up 10% this year. >> very briefly, 2012, what does it look like? because you've got smaller supply, i think, and what's the key here? is it supply or quality? >> if you like your whines, obviously, you've got your lasers now. you're absolutely right, ross. the supply is less now than it was last year. so, really, it is making sure that the grapes that they're choosing are the right grapes. they've got this technology now that gets the right grape size. so if the quality is good and the supply should hold up. >> good to see you. >> yes. >> nice to see you. thanks very much, indeed, for

that. there we go. ago bank says its q1 net margin is at 2.78%. >> first quarter profit figure coming in at 47 billion yuan. all morning we've been following chinese bank earnings so far, the message is narrow beats, but profit beats nevertheless. >> and who has been winning the austerity debate? aaron tweeted he couldn't have said it better than krueger, but he's the egghead economist. so there you go. >> i want to know if people are buying into wine here. can i pose that question, as well. when we come back -- >> we'll talk about amazon. >> that's right.

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welcome back to "worldwide exchange." i'm kelly evans. >> and i'm ross westgate. a reminder of the headlines today. >> u.s. investors wait for initial first look at gdp today, likely to show the economy rebounded in the first quarter after growth stalled last year. the bank of japan expects to meet its inflation target within three years. march core inflation retraktd. banks in spain, italy and slovenia seeing deposits rise in april and martha is perhaps putting to rest fears of

contagion effect. and the u.s. austerity debate rages around the world. french prime minister is expected to shift his emphasis to growth when he lays out fresh budget reforms today. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. . >> got to take fair value into account here. the dow looking for perhaps a three-point increase at the open. the nasdaq and the s&p are searching for direction here as we look from a session yesterday that was also pretty mixed. and the trade around the world isn't really helping. take a look at the cnbc global 300 for a sense of what we've seen overnight. we're down about 0.1%. steadily drifting lower here. european bourses yesterday taking a pause after five straight days of gains. what where he seeing today? the story pretty much depends on where you look. regardless, we're seeing red chips. the ftse down 0. 5%. the xetra dax 0.8%. the ftse mib in italy after

rallying into the elections and the selection of -- re-election of george napolitano as president and the prime minister now selling off. down 1%. the ibex down 11%, as well, after spanish bank earnings disappointing and concerns remain about that 20% unemployment level. we will get budget details from rajoy today. >> yeah. what can they do on the growth side? what rooms for maneuver do they have, kelly? you mentioned about italy saying negotiations will be tough. europe, higher again today and italy, 4.01%. we hit that 2010 low on tuesday, around about 3.94%. spanish yields just below the 4.3%, as well. ten-year gilt yield lower after posting the jump yesterday. looking ahead to the u.s. gdp number. ahead of that, the dollar is not doing a huge amount right now. dollar/yen is weaker at 98.611. the yen is stronger.

we had these stats out, of course, which suggested that in fact what was seen over the la month or so as the bank of japan announced its policies were repatriation of funds back into japan and people felt that the opposite would be happening. euro/dollar, steady 1.3016. kelly. >> we watched that dollar. here is what's on the agenda in the u.s. it's the first glance at first quarter gdp. 8:30 a.m. eastern, growth forecast to 3.2% in the official forecast, but we'll talk in a couple of minutes about how those expectations have fallen somewhat. it would be a pick up from 0.4% if the fourth quarter, helped by the housing market, consumer spending and inventory bills. prices expected to rise 1.3% by the way in that report. keep an eye out for that, as well. at 9:55, we'll turn our attention to april consumer sentiment. chevron is among those reporting results before the open. we'll hear from dr horton, simon property group, tyco, vf

corporation, weyerhaeuser and goodyear t >>ident obama is expected to meet with business lead eers from hershey, adm and p&g. >> we have growth numbers coming out today. and yes. >> what's interesting is the conversation we were having earlier where asking about whether the dollar was weakened and how people are starting to re-evaluate, whether there might be more easing or less tightening on the way from the fed. but the point being made -- but the dollar strengthening was always based on whether it became a growth story, right? >> it's the same thing, but the argument that ian standard was making was that now that we're seeing investment flows into the u.s., there's capital flows there, as well. the dollar may not be quite as weak as you would expect. frankly, to the extent that other parts of the world look

worse, it's probably going to reinforce that trend. exactly. exactly. >> now, we have numbers out today, as well. analyst first quarter profits fell. revenues are up 22%. but that was down from 34% a year ago. came in slightly s o estimates. the online retailer continues to spend heavily on expansion with new consensus, new technology, more original video content. analyst second quarter outlook is below analyst estimates. the country has long been ultra conservative with its guidance. amazon stock down 3% in after hours. at the same time, starbucks second quarter profits grew 26%, in line with forecasts. revenues came in slightly shy of estimates. global-store sales up 6%. starbucks is raising its full year earnings outlook and affirming revenue guidance. sales are down 2% on that revenue, about 1.5%, 1.6% in

frankfurt this morning. for a company like starbucks that frankly is pretty mature at this point and there is certainly no lack of outlets, it's amazing they could still put in a 6% sale-store sales figure and that they're still standing by their growth. i'm impressed with their performance, nevertheless. italy tests bull markets again after the euro fell to lows earlier this week p we'll bring you the breaking results when we come back. 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

we've got t-bill auctions out of italy. just bringing you that, sold 8 billion six-month bills, lower than the march 26th. so that is a euro era low, six-month funding costs. there we go. that is amazing. >> it's amazing because we're talking -- >> six month of t-bills. >> and look at what happened to the ten-year in the last couple of months. not only going up since last summer, but it's just been amazing. they're benefiting from that. even though the bid to cover 1.4 versus 1.5, so 8 billion euros worth.

interesting stuff. >> portfolio manager nicholas, joining us stateside. good to see you, chet. we're trying to form a government now in italy. here we go with very cheap italian borrowing costs. which some people are saying doesn't really know what the situation is. what's your view? >> it certainly doesn't mirror the situation in italy also in spain. you've had this wave of liquidity courtesy of all the central banks across the globe, the bank of england, the bank of tokyo now as well as the federal reserve and the ecb. so, you know, there is a distortion among the sovereign debt and the credit markets and it's bleeding into the equity markets. >> does the european central bank next week have to cut? do you think they're walking back expectations a little bit is why we're start to go underperform on the equity side?

>> you know, if they cut 1% down to 0.5% or a quarter of a percent, it isn't going to mean anything. it's not about cutting the rate on the low end of the yield curve. what you're probably going to start to see over the next six to 12 months is the ecb come in with additional type of quantitative easing to perhaps try to weaken the euro in comparison to perhaps the dollar and the yen. >> i'm not so sure, though, because at the same time we're hearing a lot of comments out of the likes of germany, obviously, just important from the politics point of view about how unhappy they are with all the various measures and whether the omt might be constitutional. it sounds like if that's what you're expecting, if the ecb doesn't deliver, we could continue to see equity underperformance here. >> well, kelly, you bring up a good point. that's the political issues a the friction among the european

monetary union and their agreement. and structurally, at our group, we believe that in the next three to five years, the european monetary union is going to look fastly different because of this political friction there. in particular in italy as well as in spain. so i do believe, though, that the ecb will come in and be much more aggressive as the central banks r cross the globe become more aggressive. so, for example, you see what's going on with the bank of japan. they are very, very aggressive right now. we believe that the yen to the euro as well as the yen to dollar will continue to weaken opinion that will, in fact, bring in additional inflexz. >> how much is what we're seeing in markets globally yen story, a japan story in your point of view. >> right now, it's absolutely, you know, it's given a shot of caffeine to not only the credit

markets and the sovereign markets, but also the equity markets. and we believe that is going to perhaps continue for a short period of time. let's not be delusional about it. what we need to see happen because we've had this credit-driven rally, you'll have to see the handoff to the baton pass to more of an economic and earnings driven outlook. i know we've had a strong q1 showing here in the united states, of probably around 3% on the gdp number, but right now, you can see things are starting to weigh and be lackluster. when you look at learnings, the quarter for earnings is year over year, even though it seems like they're beating expectations is roughly up about 11 is.7%. and revenue hes are, in fact, abysmal at a negative 0.6% type of print.

>> leave it there. bright and early this morning, thanks. >> thanks, kelly. >> thanks very much. rajoy's government is expected to turn away from the previous austerity, although it was slightly imposed in favor of slowing growth. this is after the unemployment rate jumped to a new record high of 22.3% with more than 6 million out of work. yesterday, trouble erupted as an anti-austerity demonstration near the spanish parliament. a second round of protests is being called off due to lack of public support. interesting. stephane is in madrid. >> hi, ross. we are expecting from this announcement from the prime minist minister. according to the press report, from the tax hike, real life from fiscal adjustments is going to review some tax rebates from companies and individual which in the enwill increase their tax

bill. rajoy is expected to accelerate the reform of the electricity sector in spain to reduce the regulated price of electricity. and he's expected to announce some stimulus measures to boost the economy and hopefully to review the unemployment rate which was a high 27.2%. to help them get some final things, they have better access to credit.

you need only one boost of capital and under 40 euro. that should help more people to create their own job by setting up a new company. >> it's a great point, stephane. we'll be interested to see how that plays out. speaking earlier on cnbc, wppo sir martin sorrell weighed in on the austerity debate saying criticism regarding the uk has been overblown and the government is still spending. >> i don't think that the government has been cutting spending in the uk to the degree that people think they have. in money terms, government spending is rising. if you track it through to 1415 in money terms, government spending will rise perhaps from 700 billion to 750 billion the last time i looked. so this austerity that people talk about is not a real cut. in normal terms, it's rising. when you adjust for inflation, as i think the treasury does,

they claim that it's the cut. >> and you can read more about the comments on our website, cnbc.com. >> rogoff and reinhart are respond to go criticism in recent weeks insisting in an op-ed that their information was to be taken altogether. at the same time, paul krugman says it was always to push their own political agenda. so he doesn't sympathize too much with reinhart and rogoff, but he says to some extent these are people looking for an excuse to push the measures that were in their best interest. they just put the data out there and politicians use it for their own purposes. i think there's probably an element of truth in both sides.

>> you apply it to europe and the uk zone. in the likes of spain and greece and the imf -- >> and your monetary union is where this is -- >> and there's no austerity with the currency, right? so that's clear. and in the uk, all the talk, wa we count was a lot of investment spending. they're trying to change the wealth around a little bit. normally what you would do is cut spending and cut taxes to promote growth at the same time instead of cutting one thing. the point is they cut and you try to make the stimulus instead of the supply side. >> on the fiscal side, there's been no agreement partly because of research like this to pursue

those kinds of policies like this after the crisis, or do you do it on the monetary side? the central bank will step up when no one else can decide. anyway, we'll want to hear from you on this. who is right in the austerity debate? who is at fault for the way the whole matter tweeted out? jeff tweeted in to say, it doesn't matter who wins the austerity argument, only who loses it, and that is unemployment workers. yes. keep your poresponses here comi on "worldwide exchange." tweet us or reach us individually in full confidence. if you're just joining us on the program, these are your headlines. a look at how the u.s. economy has performed in the first quarter of 2013 when gdp figures cross at 8:30 eastern. the bank of japan is sticking to its 2% inflation target. march core cpi shrunk more than expected, suggesting deflation price is on. >> bank in italy, slovenia see profits rise in march.

straight ahead on the show, we're going to take a look at samsung and apple. one company taking a bigger piece of the smartphone pie as profits jump in the first quarter. we'll break down those results when we come back.

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we are, in fact, down at the open for once. the s&p down 3 points. the dow jones currently down around 21 and the nasdaq currently down 6.5. >> samsung electronics has posted its earnings growth thanks to demand for smartphones. that was slightly above expectations. still, operating profits were down in the prior quart either for the first time since 2011. as a result, shares in samsung selling off a little bit, ending down about 0.5%. but for more on what this means for apple in particular, let's ask steve harding, vp at antenna here in london joining me now. >> hi. >> still, samsung made a miss on the profit side here. but if you look at the numbers and strategy analytics here, 69 million shipments in the first quarter, 33% market share. apple had just 37 million at

18%. do you think that do you think it's pretty clear, i guess, who is winning? >> yeah. i mean, it's impossible to comment on samsung's results without referring back to apple. there seems to be so much contrast, apple hovering around the $400 mark on their share price. meanwhile, samsung reporting really strong growth. and i think it comes down to some simple facts, actually. i think samsung are innovating faster. they're addressing their products at the market very much. they're hitting a broader range of cross points. >> do you think samsung is overtaking appearing? >> yeah. i think it's interesting that

samsung controlled the components supply. apple control the software, but not manufacturing. samsung, they control manufacturing, but they don't control the software. they could build a broader range of devices, they can respond to fluctuations in demand, they can flutter their capacity and production and they can manage that through the supply chain. >> samsung basically played copycat catchup to apple here and now it's going to be much more difficult for them to drive innovation going forward, especially at a time when the smartphone market itself is maturing. having gotten to this point, what is going to be that next big product? how do you just avoid effectively a price war? >> well, i think you're right. and they've done a good job. they can second in the market. they were second in terms of the apps store. and how 800,000 applications in their respective apps stores.

800,000. that means consumers are not doing that based on the apps that are available. they have confidence that the apps will be there. it's almost come full circle. they've gone back to developed features and i think with samsu samsung's ability to diversify with some of their other products, i think that's what's causing the increase in their results. >> it's interesting, as well within to see this increase in lg. 10 million shipments during the first quarter. do you think that there are -- the markets overlooking some of those newer entrants? i think hg that's a great, new device, but it's struggling to get people's attention. >> yeah. i think it's interesting. the market traditionally has been a volatile one and consumers are very fickle. we've seen the demands of nokia. i've been in this market 20 some years and i've seen a lot of

change. >> was the change? apple's defiance of a decade after what was going to be hot, what happens now? >> they're focusing on my area of expertise. i think it's certainly a place for enterprise mobile. ty. increasingly, individuals are taking these devices into the enterprise and the business. they want applications that are enterprise growing on those applications. companies are going to have challenges about how they secure those devices, how they operate business content from consumer content. >> thank you very much indeed for that. >> still to come, we'll check on the u.s. economy with the first quarter gdp numbers coming up in a moment. [ driver ] today, my ambulance knew all about a bike accident,

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welcome back to exchange." i'm kelly evans. and i'm ross westgate. >> u.s. investors get a look at first quarter gdp today. and above forecasts, growth appears to be slowing as revenue comes in shy of estimates. banks in spain, italy and slovenia see deposits rise in march, putting to rest fears at least for now contagion of the cyprus bailout. and the spanish prime minister is expected to shift his emphasis to growth.

he's laying out the first budget reforms today. >> you're watching "worldwide exchange," bringing you business news from around the globe. >> looks like we could be wrapping up the week on a -- photo. 3.2% is the official estimate now dow jones. let's check out what's been happening overnight, as well. the cnbc ftse 300 shows a sell off about 0.2% here. the japanese stocks were a little bit weaker after the yen strengthened after the bank of japan reiterated what it had done with its extraordinary plans last month but made no additional move. here is what's happening as we turn our attention here to the european session. the ftse 1 4u7b off 0.5%. the bourses are generally

speaking in the red today, giving up some of the gains that we've been seeing over the last several trading sessions. it was ecb's rate cut speculation may have helped cut stocks now. and, of course, as i said, the yen strengthening that's keeping liquidity from driving these markets ever higher, at least for the time being. how do you make money in these markets? here is what our guests have been telling us all morning. >> it's already very crowded. we wait for more snams on perhaps seeing more signs that deflation is picking up in japan and the real rates in japan can come down a bit further. so there is a lot of resistance on the dollar/yen at the moment. >> still quite bullish in the u.s., bearish. europe as a whole. the european companies and they were investing it.

otherwise, our theme since the beginning of the year continues. but things are slowly normalizing and i think the goal, there's some evidence for that. >> we're making a conscious effort to switch some of the defenses safe haven equities that we think are now getting quite a spent works very well for us. and the look for companies is nice. >> we've seen a massive sell-off, interestingly enough, we've seen the same themes for crude oil, as well. just as we were starting to talk about the sell-off, they come in with strong rebounds. >> still, it's sort of like a signal down, snap back move.

as we turn our attention to the u.s. today, the economy likely expanded by about 2.3% in the first quarter. that's ard cording to the dow jones forecast. the whisper number has come in. helped by rebound in the housing market, consumer spending, as well. but for more and what it all means, let's get straight out to joe from deutsche bank. joe, good morning. what actually is the official -- or not the foibl take, but what's your take as to what the headline number is going to be today? >> we have it at 3.4, which is

obviously better than the 0.4 reading in the fourth quarter, which was distorted we think a lot about hurricane sandy. we saw a massive drop in utilities spending because people couldn't get electric nor could businesses. that should lead to a pretty big snapback in utility spending. but the key number to focus on, really, is what we call private final domestic demand and that could be upwards of 4%. >> i was just going to ask you, actually, how real the strong growth in the first quarter is, if it has to do with the rebound in energy or electricity utilization and with an inventory swing. >> we believe it's for real. if we're riding at 4% private final demand growth in the first quarter, that follows about a 3.5% gain in the fourth quarter. so you'd have the two best back

to back quarters since '05. and led by housing, as you suggested at the outset and higher home prices, these really should be very positive over time for u.s. households as well as banks that are going to be much more willing to lend against the rising collateral which their loan is benchmarked. we think the outlook is not a great economy. it's pessimistic on u.s. growth. >> is it sustainable? as you say, if you look at this underlying gauge and say we still did have a couple of strong back to back quarters, will we be able to carry that on into the rest of the year? especially with reports like the flash pi falling, confirmed to some extent by that soggy durable goods figure the. >> sure. absolutely. look, what we tell people is even in years when the economy is very strong growing, over 4%, and we think this year will be 3%, which in and of itself will be good, you always get these soft patches. it's not unusual to have gdp

slowing for a strong year. but given housing, given the fact this tremendous pent up demand for things like motor vehicles, the fact that inventory positions are still below their previous '07 peak, we think the economy has a lot more cyclety than what it's given credit for. and the fact that household balance sheets are much happier. household income is at a ten-year low. the corporate sector is healthy. i think housing will give it to it so i do believe there's more sustainability than wa we've seen in the past. >> how much of a spark does it give? >> for house, ross? >> yeah. >> so the most people make the mistake of saying housing is only 3% of gdp, it's down from its peak. if we look at total economiwide spending, so it's not just the construction, but it's the money

spent on rent, it's the money spent on maintaining a property, the furniture, the appliances, all those things that are directly a part of the sector, it averages about 20% over the long-term. we're only at 17%. so the ability of the economy to add at least a point or so to growth next year and the year beyond i think is very high. the we've only been growing at two and now it's finally better, i don't see why growth can't at least get to 3%, which again is not great in a historical context, but certainly is very good relative to the trend we've seen over the past couple of years. >>o, it's just worth pointing out with the ten-year 1.7%, it's clear that markets don't expect this is sustainable. even if housing is strong, construction is such a small part of gdp. >> well, kelly, part of it is the markets don't believe it's sustainable if you look at yields. but this is really i think a qe story both here .globally where central banks have been able to force investors to buy assets

elsewhere. so i believe if the fed eventually backs away from qe, which it will, yields look normal and given where they're starting from, even a rise in yields shouldn't hurt housing very much because yields are so below where we deem fair value. so i think, again, higher yields will be a good thing. it will mean the fact that the aim for capital is high, people are spending, and i think, again, people need to recognize that the housing story, even in terms of what prices are doing, very positive relative to what people's mind-set was a year ago. >> all right. we can leave it there. first quarter gdp, a major one in terms of end isment for the u.s. >> and there's a lot of revisions coming down the pipe. >> and at least when we got that data in on the quarter not annualized, it gives you some comfort it's not going to be an entirely -- story. verizon wants to buy vodafone's 20% stake in verizon

wireless. journalists suggest verizon thinks the stake is worth $1100 billion. vodafone thinks it's closer to $130 billion. it's worth at least 270 billion. verizon hasn't made a formal offer and the company is in talks on a potential deal. >> cboe is saying a software glirch caused the outage at the exchange yesterday, the latest in a string of tech-related problems in u.s. markets. the outage lasted several hours, preventing trading and s&p 500 and vix options which are two of the most closely watched indexes. and the cboe says the outage wasn't related to a cyber attack, but it comes as u.s.

regulators are acquired to a new rule. in case of technology errors or natural disasters. it seems like a pretty good idea. >> yeah. and the u.s. senate passes a bill to put a stop to the faa, furloughs of air traffic controllers which has led to travel delays this week. it could act on the measure today for week-long earc the bill would give the department of transportation which oversee tess faa more budget flexibility to reduce the number of furloughs. passengers and airlines have watchetted up their complaints as they have decreased delays at major hubs in new york, chicago and atlanta. jet blue weighed in on cnbc's fast money. >> if the government would just let us run our airlines, i think this is a really good time to be in airlines. >> yes. maybe it is a nonpartisan issue. >> if your congressman is sitting there stuck on the

tarmac with your constituents -- >> but this is the point. this is why they're trying to make such visible obvious cuts, it's the only way you can get people to overcome the object behind it and says we don't want these things to happen. anyway, coming up, starbucks, jcpenney and a new high profile shareholder. we'll let you know who is committing major dollars to the retailer, next.

today on cnbc.com, how about this for a baesh injury outlook? socgen's albert edwards says gold will top $10,000 an ounce. the stock market will tank and treasuries will yield less than 1% in the near future. get his latest investment calls and read more about his strategy online. >> don't miss out on that. at the same time, one of the biggest investors, oil norway has posted its returns for the first quarter. what was interesting about it is apple as no surprise was the worst performing equity investment during the period. you can see in the last three months, the stock off some 7%. and we've been comparing it already on the show the performance of apple versus samsung. already, an lives are saying that samsung is being more innovative than apple, as well,

in the last six months or so. if you're just waking up to join us this morning, a look at how the u.s. economy is performing in 2013 when gdp figures are released in just a couple hours time. japan's core cpi down more than expected in march. the fight against deflation has a long way to go. and banks in spain, italy and slovenia see deposits live in march despite contagion worries from the cypriot crisis last month. now, americans may not be feeling incredibly confident about the health of the me xb but they still need their daily caffeine fix. they're turning to starbuck toes crew their morning latte. hey, court. >> good morning to you, ross. the world's biggest coffee chain reported fiscal second quarter profits rose 26%, which is actually in line with forecasts. you can tell it's quite bullish. revenues were 11% to 3.6

billion. a bit shy of what analysts were expecting, though. management is helping starbucks will become more of a lunch destination, noting traffic is growing during afternoon hours. in an effort to get people come back more often and spend more, the company is making a big push for its customer loyalty program, a recent offer giving a $5 gift card for joining resulted in 1 million new members. global same-store sales was 6%. that matched forecasts, including an 8% increase in asia where starbucks is focusing expansion efforts. it helped to open thousands of new stores in china. europe, however, continue to lag. same-store sales falling 2%. to combat that, starbuck sess shifting to more of a license model there, lowering costs and handling control to local partners. the company is raising its full year guidance efforts and affirming its full year guidance

outlook. starbucks isn't experiencing the choppiness like rivals like mcdonald's and dunkin down nuts. >> this is a roughwonderful tim starbucks to continue with global retail stores. secondly, the opportunity we have around the world to create new channels of distribution with starbucks coffee, evolution juice and the acquisition of tivanna. .lastly, there's no doubt the leading consumer brand in the world in terms of social media and mobile. >> positive comments, investors seem to be focused on the future revenue miss, shares falling 2% in after hours. they've been on a tear lately, up nearly 3% in the past five days and about 12% year-to-date. not bad for a little coffee. kelly and ross. >> no, a little coffee and tea and juices, as well. we were talking about this earlier, they're diversifying

beyond just the traditional beverage. other stuff happening in the retail space, as well. >> court, thanks for that. >> can we ask her -- >> wa did you want to ask about inspect. >> jcpenney, there's a story out, as well, about jcpenney get ago shot in the arm from sorros. shares are up 7% after hours. courtney, just want to get your sense here as to how important this is. are we expecting any major changes to come from the soros investment here or do you see it as a vote of confidence? >> yeah, it doesn't steam be that it's going to be any activist type of role for soros as far as we know. it's a very passive stake and he is investing 8% basically in that company now. and that really is what jcpenney needs right now is confidence. lost a lot of it on the street, of course. you know ceo ron johnson is no longer with the company. and board member steven ross

filled up nearly half of his company's stake in the retailer. he remains on the board, so that was unnerving to the markets, of course, to have a board member say forget it and sell off 50% of that stake. there's other issues going on so there's some wording if it has more to do with that. still, it's exactly, i think, what jcpenney was hoping to have, a vote of confidence from someone like george soros that is very respected in the wall street community. >> now they need better products, pricing and execution. >> there is that. >> courtney, thanks so much. great to see you this morning. >> did a lot of study on that. still to come, the nasdaq and s&p 500 look to extend their winning ways to 600 if they can. we'll preview the trading day when we come back.

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it was a mixed quarter for amazon, shy of market expect age egz. our own jon fortt has more. >> amazon once again turned in support that investors after hours couldn't seem to make up their minds about. was it a beat, was it a miss? a little bit of both? revenues came in 16.7 billion up versus 16.61 expected ps came in 18 cents versus 8 cents. a lot of people couldn't figure out what to make of this amazon-guided 16.2 billion in revenue for the next quarter. wall street wanted 15.94. definitely guided below the mid point. wall street wanted 22% in eps,

amazon's mid point guiding to an operating income loss. negative 340 to plus 10. that had wall street, you know, a little above, a little bit after hours and then down 4% or 5% by the time the call was over. so how did the quarter look when you dig in a little deeper? north america actually a bit stronger than expected. international weaker because of europe. north america stronger because of media sales. partly spurred by the kindle. amazon saying they continue to be in investment mode with the kindle. read that as being they're not making really any money on it yet. still investing on growing the base of users for the kindle. but a number of other metrics also looked good. for instance, percentage of revenue spent on shipping costs. that was down to 4.7% from 5.1% a year ago. amazon is growing on the cost line up from 39% from a year

before. this is still a growth story for amazon. on the fulfillment side, they don't have any more plans for fulfillments to announce beyond what they had announced already. they continue to be in investment mode in china, italy and spain. some say priced for her infection, but still not far off its peak in after hours trading. guys, back to you. >> great stuff from jon fortt. let's get out to todd wore wits. todd, great to see you. first of all, wa do you make of this disruption? >> good morning, kelly. good morning, ross. the disruption was a failure in the computer system. not a real big deal. that market is a professional's market mostly for hedgers.

if they weren't hedged coming in, there's other ways they could use it. they could have used the s&p futures, the etf. although it was a black eye for the cdoe for one day, they'll get it fixed, it will be done .we'll move forward. >> looking ahead to the session today, wa kind of activity do you expect around this gdp report? how important is it? >> i think it's real important. i think the market has priced in somewhere between 3.1 and 3.4%. anywhere north of that, i think the market has a chance to possibly start the next bug leg up. but i really believe it will be a miss based on the earnings that have been coming in, based on what's going on. i think we may get a miss here and might see a little bit of selling pressure here. because the market itself is priced for perfection. >> but we're in this up is down market where if it misses, the central bank stays accommodative. we'll see how it all shakes out. todd, thank you so much for your time approximated. that does it here for us on the program today. >> coming up next, the countdown to that next u.s. gdp.

"squawk box" takes up the reigns next. we wish you a profitable day. >> and great weekend. >> oh, yeah.

good morning. the economic data everyone is talking about. it's the first read on gdp for the first quarter. get your rally caps ready. the s&p and nasdaq are on their best winning streak in five months. and taking flight, the senate moves to end faa delays related to the sequester. it is friday, april 26th, 2013 and "squawk box" begins right now.

good morning. joe talking about it, first quarter gdp, the government data set to be released at 8:30 eastern time. forecasters say the economy likely grew at an annual rate of 3.2%. the catalyst, an improvement in housing, steady consumer spending and most importantly, a big increase in stockpiling by businesses. are you okay there? >> squeaking a little. it's my back. it's weird. >> it happens when you hit 30. is it about to rain, joe? is that what's happening? >> let me check my lumbego. i don't know. and i can tell you, andrew and becky, there is nothing going on there. they are definitely -- >> because they're both off on the same day.