good morning, good morning, good morning. welcome to "worldwide exchange." i'm louisa bojesen. these are headlines from around the globe. european stocks trading lower, but thin volumes with the uk closed after a week of milestones on wall street where the dow and the s&p hit all time interday highs. still relief on the data for us that the services pmi in france recovering from a four-year slump in italy seeing the highest level in almost two years. and the malaysian stocks are

soaring after the vote, but the government now faces a radical device and allegations of voting fraud by the opposition. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. >> hi, everyone. business news and data news, just looking at our wires. you've got the eurozone services pmi data for april, better than anticipated, a reading of 47. the flash figure was 46.6. we saw a figure of 43.4 back in march. so 47 is quite a bit better than anticipated. german pmi data, 49.2 for april. this, of course, being europe's largest economy. so very, very closely watch this particular one. 49.2 in april, which is slightly worse than spec'd. we were looking for a figure above 50, above that level that separates contraction from

expansion. but the eurozone business downturn, though, is pointing according to many analyst toes a continued recession taking place in the second quarter, given that we still are in this contraction level. regardless of whether the number is slightly better or not, it's still below 50. steve jacobson is a chief economist at saxo bank and he's with us for the top of the show for the first half hour. good to see you. we're looking at potentially a deeper recession in the second quarter for the eurozone. i guess we're here to stay for the time being. >> so unfortunately no change. and i think the whole discussion about easing up on the austerity only makes the business people more confused. just about the time that we were going to see some sort of structural reforms going on, which we've seen slightly as the data indicates this morning in italy, and now they're going to give up for political reasons because, of course, the main reason behind the lag of consensus area is the

politicians have a hard time selling the austerity program. >> i guess the issue is whether or not we're going to see an actual pullback in austerity measures or whether it's just going to be some jaw boning at the moment in order to win political favors potentially, as well. >> you saw the defense minister over the weekend declared a victory for france in delaying the austerity. but at the same time, it was merely a case of declaying more austerity right now than actually fulfilling the 3% target rule. we are more than two years before the country is back in shape. in my opinion, we were looking at minus 1% growth for this year on this path. >> do you think the ecb is doing right in keeping a very, very loose monetary policy at the moment and in lowering rates last week, as well? >> i think the monetary policy

is a sharp tool and i think it's becoming intelligent at these levels. it's very, very difficult to maneuver and i think the ecb has used all its ammunition. they are hoping and praying that the politicians will take over. but as i just stated, that is very unlikely into a german election and into a political environment where any sort of austerity or plain talking about the future is impossible. i think both politicians are down to taking it almost day by day if not day by day, then week by week and that is the worst thing you can give for the small and medium sized enterprises, for the business as a whole. it's ironic that the business owners in their pension funds are buying a lot of stocks. but as business owners, they're not investing into their own business. i think they need to change back. >> it's still amazing for me to see how much of a recovery we've seen stateside in equities. we're not quite there in europe yet despite the fact that the

data continues to be so weak. i just wonder how long is this discrepancy going to continue? is it going to continue throughout the rest of the year or are we going to wake up one day and say we need to show that in how we're trading the various asset classes? >> i think it's, of course, overtime. so either the economy will improve or the stock market will have to come down. i agree with your consensus here that you need to reconcile the rising unemployment, the lack of growth, which ultimately will impact margins and leverage and volumes for the companies. but right now, i think it's almost logical and rationale that people are buying paper stocks because the alternative of buying governments who has more responsibility and more ability to reform, of course, is not one that any investor wants to take. but you think we're training a lot of momentum relative to

value. to ignore the go away in may feeling is very, very difficult and should not be done. >> sthaus, which you are for this next half an hour. i will encourage viewers to get involved. you can find us or e-mail the show, worldwide@cnbc.com if you have questions for steven or any of our other guests. in the meantime, there is more evidence that growth in china is slowing. hsbc's april services pmi fell to 51.1 in april. the property curves and the scale were partly to blame according to china. growth in india's all important services sector are

slowed significantly, too. india's apr services pmi fal fell to 50.7 versus march's 51.4. gn, find us on e-mail or on twitter if you want to get in touch. now, coming up, karen cho and stephane pedrazzi join us live from paris as the french president hollande is celebrating his first year in france. we hear from a pollster whose latest survey shows the socialist loot leader is one of the most unpopular in recent history. from paris to madrid, italy's prime minister is pair a visit to rajoy with job and economic growth at the top of the agenda. more analysis in a couple of

moments on that. also, we'll be heading out to malaysia as the front part extends its 56-year rule sending the stock toes an all-time high. what does it mean? answer at 10:30 cet. and we speak to the ceo of the data analytics provider, nanex, who says the electronic trading brought down costs, but high frequently trading brought down ethics. don't miss that debate, 11:20 cet. for us, the latest scandals making headlines on almost a daily basis, we get an analyst view on the food industry giant tyson and sysco. that's at 11:30 cet. so you have a lot that you won't want to miss coming up here on the show. let's recap what we're hearing out of italy. istat, we're looking at a 2013 gdp down 1.4% in 2014, seen up

by 0.7%. wow. so 2013 gdp down by 4%, a year later it's up almost 1%. italy's unemployment rate seen at 11.9% this year, 12.3% in 2014. so it's heading in the wrong direct according to the state agency and the italian government payment of commercial credit is to help the 2013 economy again, according to istat. talking about italy and italy's new prime minister is saying that he has a job boost plan. he has outlined his proposal to other eu leader. steve, just looking at the data from istat, the italian agency, 2013 dw dp seen down 1.4% this

year and then a year later, seen up by 0.7% while at the same time unemployment is set to head more this year and less. i don't quite get how the two go together. >> i think it's various engineering, getting the balance to budget inside the demands from the eu and the troika overall. the ecb has been in every single press conference saying the next six months will be better. every year, we get stats from the eu commission. but that is the mechanics of the mass. when they do these projections. of course, if you have a negative growth number for 2014, which i think is re, very realistic for italy, then the debt gdp ratio goes up, the tax revenues go down and vice versa. this is reverse engineering a

number which will make the data look okay in terms of the projecton for next year. it's not about an actual science and it's never about actually being realistic. and i will add that i think the istat and everybody else will be much better off by actually for once overshooting the negative signs because it will be nice to have the surprise on the forecast, not always knowing that it's 1100% wrong. >> where do you think growth is for some of europe's more core economies, like germany, for example? can we continue to see recovery in places like the german market or is it inevitable that the weakness is going to be across the board? >> it's unfortunately inevitable. they, in terms of changes, net changes to export, it is almost exclusively driven by what happens in china. china growth is coming down and it's probably going to continue to come down for a number of years.

so the impulse to german export will have in velocity terms coming off. and i think the big lessons we've taken out of 12 into '13 has been that in q4 we saw germany in a negative qdp environment. i think germany like the rest of europe will have a hard time breaking zero as we go out of this year. and in terms of getting and paying the unions is paywise in the range of 3% to 4%. >> stay with us. we need to update people on where the european markets are. what an end to last week, huh, when we spoke, you and i on friday, everybody was high on equities, at least. we saw new all-time highs being hit in the u.s., both on the dow and on the s&p 500. it did translate through to some

extent to our european equities. but a lot of people refocusing on the euro/dollar trade. i was so sick to my stomach. we didn't quite see the same levels as we did stateside. today, given that it is a bank holiday and the uk trade, we're seeing hie lighter volumes. cac, xetra dax, ibex holding on to slightly higher levels. the ftse mib just a couple points lower. so the bond markets were super interesting last week. the spanish yield you would have noted at the end of the last week fell below 4% for the first time in vary long time. of course, there's the entire discussion about whether or not they're heading towards negative deposit rates.

my own take is i listened to every single word that draghi said out of that press conference. there was a question that was asked and he responded to the question and the markets went netty. it does have huge ramifications if it were to happen, negative deposit rates. the forex markets, currency markets, euro/dollar, flat to higher, 1.3115 right now. dollar/yen, still shy of 100, that level that everybody is watching. let's check in on markets in asia. always helpful to see what's been happening overnight. li sixuan is in singapore. what's the focus in asia? >> asian markets kicked off the week on a positive note, taking the queue from wall street. as you can see behind me, chinese and australia miners are shiny as the u.s. jobs market

boosted hopes for demand for raw materials. the hang seng up 1% today. banks, developers and resources placed lent their support, ending ipo news. a unit of china no peck group and a brokerage controlled by china's sovereign wealth fund are planning to launch ipos in the hong kong. the two raised up to $5.32 billion in total. elsewhere, japan is out of action today and the clear outperformer is malaysia. note that malaysia is the underperformer this year, up less than 4% including today's rally. that's way below the best performer, the philippines

climbed more than 25%. but it's under pressure today. in australia, the asx 200 up 0.5% ahead of the rba's policy decision tomorrow. back to you. >> thank you very much. it's good to see you. on cnbc.com, a lot of stories if you go online. the legendary investor jim o'neill, i spoke to him and he offered one last bit of advice. he told me that the yen will continue to weaken. it will hit 1.20 over the next 18 months. catch the full investment call on cnbc.com. it's worth it. a real interesting interview. also, t historian ferguson has more on our website. don't forget, follow us on

twitter, @cnbcworld. e-mail us directly. we'll happy to take your questions and comments through all of these interviews. thousand is take to the streets to protest against francois hollande's first year in offers. we cross to paris right after the break.

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hi, everybody. welcome back. francois hollande's one-year anniversary as france's president was marked on the streets yesterday. demonstrators of the far left leader were told that they should not accept the austerity that resulted in endless sufferings across europe. however, it was insisted that there was no austerity in france and that the protest had been a propaganda expedition. it's interesting, guys, when you talk to the generation, a lot of them say the same thing. they say you haven't seen austerity yet. if you think this is austerity,

you have no idea what you're talking about and it's hotting up the debate. >> indeed, it is. a year ago when hollande was carried into office, this was the premise of change. and this was a political time across the eurozone. since then, hollande himself has faced even stronger head winds than he expected. we've seen growth falling away, unemployment is an issue. even know, he's having to step away from many policies and go towards some policies that he didn't expect to have to bring into office. >> about if you're calling austerity the sharp cuts in spending, no, it's not austerity. but if you take into account the freezes this year, yes, we are in austerity. >> but the package of taxation does lack one key one, and that

was the headlines, 75% tax on wealthy individuals. those making more than 1 million euros a year. the court ruled this is unconstitutional. this is one of the key pledges that was scrapped early on. >> that was a symbol, but it wasn't supposed to raise so much money. that was a political signal sent to the extreme left. honestly, the government was expecting to raise 200, 300 million euros from this tax. >> we've heard a lot this morning. many want more growth and nishltives out there start to go slow the government by its own suggested growth and be closes to the european commission has been suggesting instead of the 0.8% that it had hoped for. wee spoke to the mp of the finance commission. she was saying the second year would be about resetting the economic policy towards growth.

>> we need to -- the second year growth. first year, to cut this incredible public debt and to try to stop public finance i would say. but in doing the second year of the mandate, we need to focus on growth and let us think that it's been decided already to focus on growth. reform a big reform of the labor market. and a big reform on competitiveness issue. >> let's talk about hollande standing in the polls. as a result and violation joing us is the director of political studies and opinion way. nice to have you with us this morning in paris. we're talking about how badly hollande has dropped in the polls since his election in the runoff, almost 52% of the vote now less than half of that. describe the situation as you see it.

>> yes, it's clear that hollande has decreased the ledger in the first year. he began to decrease very early in the year, just after the summer. his popularity rating become negative. the first act of his decreasing was -- the people from the left voted for him on the second round of the election. and the second part of the beginning of this year was coming from his own water on the first round of the presidential election. some of them are seeing that not at -- they're seeing that nothing is changing now after one year and they vote for change against nicolas sarkozy. >> he's attacking deficit reduction, labor flexibility, competitiveness and these are

antisocialist policies, many would say. >> that's one of the difficult as fron what is now as a president, he's unpopular on the right side because many people on the right thing that the socialists are not serious, they are dangerous for the economy and for the economy. and satisfying people on the left because they think that his policy is not a socialist policy. and i think that it's very difficult to keep operating which is giving him trends to prevent the country. >> 58% of french people think that the situation in france is getting worse. but 47% believe that their position would feel better. what do we know from that? is it an extreme right and extreme left, peter? >> it's clear now that the

dissatisfaction president is not in favor of the right. of course it's the right, if -- was re-elected, so it could profit to people from the extreme. but i think it's not possible for the far left to really gain on that. because the left is in power. and so it's the far right when lefties run the country that will profit from this situation. >> there are concerns about hollande standing across the eurozone, as well. and there was a suggestion that he was leaning more towards the club. how hollande said it would take place in germany, the election coming up later this year. is hollande using the lies?

>> it's clear that i think that at the beginning, it could gather south of europe against germany to change the way the european policy is made. and you realize very quickly it's possible because it's not so easy, for example, in spain it's a conservative government and he doesn't want to really go against germany so strongly. and we thought maybe -- would disappear in the next fall on the next general election in germany. what we're seeing now is the action is in four months and angela merkel will probably be re-elected. i think that's where we saw this debate inside the socialist party last week to a game of contra decision with germany. but the president has chosen not to do that.

and you that you need the support of germany for the french economy. >> i think one of the parallels is that there shouldn't be a lot of social moment movement, a huge social movement in the next few months. but if a relaunch of the economy, at that time, it could be very dangerous because people could drem straight to ask to have the benefits from this -- of the economy. >> thank you very much for joining us here. we will have more from paris discussing hollande's fist year in office and we'll talk about that on the way to the studio, louisa. >> we'll see you a bit later on,

guys. thank you. waiting in the curtains, lisping to these discussions, as well, steen, looking at the record low yields here and the number of the ten-year debt notes in europe, do you think that's going to continue given an inflation period now? we're kind of off the agenda by the look of things. >> it could very well happen. but don't forget, this is a totally artificial market. and the only real buyer in the marketplace are banks buying on half of pension funds and governments. then you have the ecb always on the dates in this market. i see the bond market has lost its total integrity in terms of telling us anything about the status. if you want to look at how the crisis is evolving, i think you need to look at cds on the banking side across the

geographic area. that's the only market that has some sort of real market sense to it yet. but even that market is limited. and i think that is the sad thing about this monetary experiment, is that we are just experimenting with state intervention and government system. >> we've got to go. thank you very much. we appreciate it here on this bank holiday in the uk. i think we're the only ones working here. got some nice smiles. still to come here on the show, the malaysian markets are breathing a sigh of relief after the country's ruling party win tess hard fought elections. find out why the government faces obstacles ahead. keep your questions or comments coming in. find us on twitter. ♪

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hi, everybody. welcome back. european stocks turn positive on thin volumes for a uk bank close on the holiday. a reversal of fortune for europe's data picture.

germany's sector shrinks in april for the fist time in five months. this as the pmi in france recovers from italy hits the highest level in almost two years. and malaysian stocks soar after the national ruling front party clings to power in the front vote. the government now faces a radical divide and allegations by the opposition. before we moch to the european markets, we're following closely what's taking place in the middle east, in israel in particular. given that it seems that israel damascus. we're hearing over the weekend israeli officials apparent wanting to intercept missiles

they claim were heading to hezbollah. we're hearing the strike killed at least 15 soldier webs according to the ngo being quoted by dow jones news wire. so at least 15 soldiers killed following the strike on syrian soil. back to european markets and business, we're seeing the markets flattish, given that the ftse is off for the holiday today. there's a bank holiday so a lot of people enjoying the 20, 21 degrees in the park. feel free to call me and tell must how nice it is outside. bond markets, we're got spain, italy and the u.s. heading north. the ecb cut rates on friday, leaving the door open to intervention. the ten-year bund seeing numbers lower today.

thursday sxb friday, we watched the euro jgyrating like crazy. the dollar rallied initially off the back of that and reversing as if nothing had happened. the euro/dollar, 1.31. back to where we started. so we're still in that tight trading range. big gains today from the malaysian stock market ruling. the national front party won -elewith a reduced majority. the race was the tightest seen in malaysian history which saw vast numbers. the government still has its work cut out for it with corruption. adam is in qualampur and he sent

us this report. >> while the opposition coalition fell short of winning the election, all signs point to greater support for change. not only did the ruling buy less parliamentary seats n than in 2008 electric webs but the three states won by the opposition were all won by two-thirds majority. >> i expected it to extent. i didn't expect it to this extent. none of us expected it to this extent. but despite the extent of the swing against us, national do not fall and we continue. >> the opposition, though, continue to alleged election fraud with the leader refusing to accept defeat. >> the commission to give satisfactory answer to why this fraudulent done and they are clearly or they were conflicted

to the crime. the election commission said it received complaints that the ink to prevent repeat voting did not last. anwar called the controversy by prematurely declaring victory on twitter. >> this has been one of the tightest race necessary malaysian history. according to the political observers in the various opinion polls, the issues central to the heart of the electorate remain the same as the previous election in 2008 and include issues such as the economy, the income divide between the rich and the poor, the rising cost of living. but this time around, a greater emphasis on issues like the crime levels and also corruption. all of which have drawn in a record amount of voters totalling more than 13 million. >> even 2.6 billion in handouts

to the poor just before the polls failed to mobilize more support for the government. this would suggest the prime minister would need to safely address the perception of inequality. as far as the markets are concerned, though, analysts say the outcome has been largely factored in and they believe not just investment policies will remain. >> joining us now is nico tawyer. nico, good to see you. let's start with malaysia. the election, a big surprise to many. we thought it could be a very close call and in the end, it wasn't. were you surprised, as well? >> well, the extended events probably take some people by surprise. but the good thing about that is probably the transformation program and some of the investment program that was

brought from the earlier government is likely to continue. >> and is that why we saw such a bounce in markets? i mean, the malaysian market was up, what, some 8%? we saw multi month highs on the back of these results. >> yes. that could be the key factor in driving debt. i moon, you have the $3.4 billion investment plan by 2020 and then, you know, from the currencies perspective, as well, it is kind of a laggard. you have the philippine peso and thai bott. also with the incumbent staying in the post, that will be a key driving factor for the equity market, as well. >> what do you think the growth prospects are for malaysian over the next year? what are you anticipating? how strong do you expect the economy to be? >> well, i think 5% to 6% range is kind of viable for economy.

but we have to bear in mind that the bulk of the driver are domestically driven. that includes the government spending. which means that we probably have a medium term concern over the budget sustainability. >> stay with us for a moment. i want to include indonesia into our discussion, as well. and just to update viewers on what's going on there, private consumption and the shrinking miner sector are hurting understand near ya's economy. the company's first quarter gdp grew at its slowest pace in two years. the reading missed analyst forecasts that came in below indonesia's central growth target. the economists warned they're looking at difficulties as the government is plannin to cut fuel subsidies to tackle its budget deficit. enrico is still with us.

indonesia is super interesting to me because a lot of economists are saying they think the indonesian market is overheating. what are your thoughts on indonesia? they bring a very good point. as you can see, credit growth is apparently not slowing as much as compared to imports growth. if you look at the march number, actually, there were hopes with what we're seeing in the credit markets. one possible conjecture is that, you know, some of this credit that's not actually going to investment but instead into consumption. that's why we've seen slowing investment growth from 8.6% in the second half of last year into barely 6% in the first quarter of this year. so clearly, you know, consumption does slow, but probably it's only a temporary effect because we have, you know, subsidies still in place. >> yeah. and speaking of subsidies, and

the government cutting fuel subsidies to tackle the budget deficit, how much do you anticipate that the fuel prices could jump as a result of this? >> well, some people say 33% which amounts to about 6,000 or 6,500 per liter, the subsidized fuel that is currently standing at 4,005. whatever the savings, the rupee is enough to cover up for the increased consumption of the fuel subsidy. and then you have the effect of the weakening opiate that is affecting the increased burden of the economy. and then the slowing export sector would mean that the tax ref knew would be reduced. all in all, i'm not surprised if they run slightly higher than the assumed budget deficit for

2013. >> what should we think of inflation at 8.5%. >> inflation? >> yes. i mean, should we be -- worried about it? it's a high level compared to what we're seeing in europe, but a low level compared to other emerging market economies. >> definitely. i mean, there is a key effect, for example, the fuel price increase does not affect transportation price, but all other components like food or clothing, because everything is so dependent on transportation and with the lack of road infrastructure and other transportation infrastructure, that will be passed on to consumers. so the natural response would be for the bank of indonesia to start tight.ing the monetary conditions within the domestic economy. >> thank you very much for being with us, enrico, economy for southeast asia at rbs. we appreciate it.

moving on, the south korean president is visiting america this week. on tuesday, she'll be meeting with the u.s. president barack obama to discuss how to deal with north korea. so far, any attempts have been met with threats and unpredictable behavior. north korea recently shut down an industrial zone worked jointly with the south. with more is chery kang out of seoul. again, the rhetoric continues to be quite heated. what should we be thinking of the latest developments? >> well, yeah, exactly. like you said, what's drawing the most attention from this visit and her summit with the u.s. president barack obama that is set for tuesday is the tone that the two countries will

decide on when it comes to the north korea issue. how much of a coordinated and united front will they put on to north korea and open to the idea of talking to north korea will be some of the talking points after the summit, i believe. she has arrived in korea first. how much of this will barack obama embrace will be in focus, as well. now, on north korea's part, in time for her visit just yesterday on sunday, north korea said the 15-year sentence does not affect the u.s. and once again has put the south on suspension for the joint operation. so it sounds like another line

the north will put out there. another highlight is the fact that president park is being accompanied by a massive, over 50-member delegation of business leaders, probably the biggest so far, including chairman of companies such as samsung and hyundai. louisa, back to you. >> chery kang live out of seoul. thank you. 20 people have died in clashes between police and israeli activists. the latest unrest is adding to political instability following the april collapse of a government building. now, vigils are still being held for the 650 people confirmed dead and still missing, as well. one widow has filed a complaint against the building owner.

he's been arrested along with the owner of the clothing factory in the building. more supply troubles for the fast food chain operator yum brands in china. authorities in shanghai reportedly looking into a food mislabelling case which involves a wholesaler that supplies mutton to restaurants. food safety inspectors found package packages. but there were no production or ingredients list on the products. the incident came as chinese police cracked down on a crime ring that reportedly passed off more than $1 million in fox and mink meat as mutton. order up, underwriters are busy signing us new investors today for china's top ipo deals this year. reports said that sinopec engineering could raise more than $2 billion ahead of its may 23rd listing. china galaxy securities is a smaller ipo reportedly set to

raise $1.3 billion. the deals were both welcome in hong kong. they fell shortly since losing the top spot last year. it's nice to know what's coming up so you can plan a bit. this is what's on the agenda in asia tomorrow. the global central bank watch shifts to australia where markets and economist res split over whether or not we'll see a 25% basis cut the. we'll get a statement from hsbc and malaysia airlines reports first quarter earnings out of quala lumpur. still to come in "worldwide exchange," relations between france and germany may have strained over the best move forward for europe. francois hollande insists that his relationship with angela merkel remains healthy. after the break, we cross to paris for the franco-german

friendliness. more to come here on the show.

hi, everyone. yes, you are welcome back. the french government appears to be softening its stance on the ownership of one of its websites. yahoo! had been in talks to

acquire a 75% stake in a video sharing website, but the industry mip sister scraped the deal regarding ownership. however, french foreign minister said that france was open for business. >> daily nation -- case, it was something different. because the question was not to say yes or not, but the proportion. and i understand the minister, i've been minister of the economy. and the question was what is the percentage? and my understanding is that they wanted to buy 75%. which would mean that they have -- they can the control of it. >> of course. >> and we're in favor of 50/50 and it's the reason why the business has not been possible. but we are quite open. >> meanwhile, the french president francois hollande insists it's business as usual

between french and germany. der spiegel quotes a conversation on friday in which the french president insisted that there was no personal animosity between himself and angela merkel. >> stephane and karen are in paris today looking at the debate heating up all over the place in europe, guys. >> yes, indeed, just how key this is for growing the eurozone and having a policy in place. a year ago when hollande was elected, the wonderful cozy/not cozy relationship with nicolas sarkozy and angela merkel had very close ties. hollande pushed forward with policy and less austerity. yet there's been enormous criticism that perhaps hollande didn't carry through to the

austerity than usually planned. this hasn't improved the relationship with germany. why are relationships to thorny between the two countries? >> because hollande, even before he was re-elected, claimed that france could have -- on the european decision. he wanted more growth insistive measures, less austerity and this is exactly what he's saying today the. the problem is that france cannot avoid the crash with germany. it's not the only one. also compared to southern european countries and in spawn, the cost of labor is much lower than what it is in france. so that is another problem for france. and if you look at absolute ratings, well, imagine if you're french people and -- but this is the point, it would say this is about pandering to the local voter here.

we've got the election coming up in germany in five months' time and germany toeneeds to prove t it still maintains a fiscal discipline here in france. there are so many issues on the ground, ridesing unemployment, this is hollande trying to recapture the vote that he lost -- >> and the need to delivery. the majority of french people are rejecting his policies. 74% of people are unhappy with hollande. 58% think the situation is getting worse in france. 6% of french people think the situation is improving. >> it's good to see a little bit of optimism, even if it's tiny. the ump party, the former agriculture minister for nicolas sarkozy was talking about the need to reshape the vision for the two countries to come closer together than where they

currently stand. >> the french/german relationship which are the core of the construction are not in good shape for three main reasons. first, the battle from the elements. we need better economic reserves if we want to rebuild a trust between the french and the german government. the second reason is a lack of common vision between france and germany about the future of europe on which basis should we have built europe for the future? and, of course, the third reason, which is a very bad one, are the very last negative declarations and statements from some socialist leaders in france. >> more "worldwide exchange" coming right up after the break. ♪

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hi, everybody. welcome back. you're still watching "worldwide exchange." i'm louisa bojesen. european stocks slight lit in the green right now. very thin volumes after a week on wall street. a reversal of forchs for european states. germany's servicing sector shrinking for the first time in five molz. this as activity in italy is at the highest level seen in almost two years.

malaysian stocks have been falling. the government now faces a radical divide among voting fraud allegations among politicians. >> announcer: you're watching "worldwide exchange," bringing you business news from around the xwloeb. >> hi, everybody. welcome. if you're just tuning in, we have a whole bunch of things going on. we're a couple of points higher across the board. the dow higher somewhere in the region of five points. nasdaq implied to open higher. the s&p implied to open higher around 0.5 points or so.

that's what we're looking at when we look ahead to u.s. markets. the european markets are a bit flattish. we have a bank holiday here in the uk. and when it's a bank holiday, we're working in here and, of course, the weather for the first time in a bazillion years is beautiful. so if you're watching from outside somewhere, enjoy yourself. have a nice cup of tea for me. the cac 40 a little lower right now. xetra dax flat to higher, and the ibex slightly lower and the ftse mib off by 0.25%. the bond markets, it was super exciting at the end of the last week. we saw the yield on the spanish ten-year note falling to below 4%. we're a little bit above 4% right now. we have in general been seeing yields pushing to new record lows on a number of the big bench mark note in europe. analysts are speculating whether or not we're going to see more of this trend continuing.

currency markets, again, i don't mind saying it once again. very exciting currency markets in terms of the volatility. at the end of the last week, we had the ecb rate decision cutting rates by 25 basis points. we had draghi being asked about whether or not he was ready for negative deposit rates. he answered the question as you would. another ecb governor coming out only having to say that he was surprises and he was surprised by the markets. on friday, the u.s. payroll data was very good, leading to a rally. so net/net we're back where we started, right around 1.31 after that trick. super exciting, though. li sixuan is in asia joining us to get us up to speed. by the way, very nice necklace. i almost bought the same one, but i went for the blues this

time. great minds think alike. >> yes, thanks. i like it, as well. after a rally on wall street, chinese and australia miners, they had a strong rally today at the u.s. jobs data. boosting hopes for broader demand for raw materials. the shanghai composite outperformed, gained 1.2% today. the hang seng up 1% despite the soft hsbc china services data. ipo news, the hong kong borse will see two new listings. sinopec engineering and galaxy securities are planning to launch in hong kong. that will help revive hong kong's slowing ipo market where deals are more than halved in the first quarter of this year. elsewhere, japan is out of action today. it's malaysia, soared over 3% to

an all-time high on news that the national front coalition is extending its six-year rule. and note that malaysia is, in fact, the underperformer in southeast asia this year, up less than 4% including today's rally. that's way below the best performer, the philippines which climbed more than 25% year-to-date. in australia, the asx 200 up 0.5% today ahead of the rba decision tomorrow. but in south korea, weakness in automakers and technology shares dragged the kospi lower by 0.2%. back to you, louisa. >> li sixuan, thank you very much. we'll see you very soon again. let's move on and talk about the jobs market that we saw on friday, the jobs data. a lot better than anticipated. the u.s. markets closed last week at record highs. the s&p 500 finishing a new milestone, finishing up 1600 and

the dow topping 15,000 for the first day ever on interday trade before settling at that level. borno, i was watching, pretty amazed on friday, i have to say, wondering whether or not it's going to continue into may, whether we're going to go back to the sell in may and go away come back after st. ledger's day. saying this year, whether it's going to be different. >> good morning, louisa. i believe it will, mainly because the circumstances are different. valuation are still reasonable. these fundamentals of stocks and economy are growing slowly. it will fall off after the fl fiscal cliff adding the fiscal drag to continue. but that seems to be quite moderate. it is at this stage proved by asia and the u.s., europe is still in quite a depressive mode

mainly because of the austerity measures taking place. but nevertheless, the numbers we saw today were improving slightly, albeit still contracting. i think all in all, the mood is good. if you have a bond retiring and you need to replace it, the yields on quality bonds are negligible. so on the other hand, you see the markets going up, the equity markets. so no one is serving some -- in the market and you create kind of a vacuum which can continue for a while. >> the only thing is, volumes aren't really there yet. and i always look at volumes and it's super important to see what type of a market it is. it does make a difference if you have a jump of 2,000% and it's two people buying as opposed to a jump of 2,000% and the entire world is buying. it does make a difference. and i wonder whether or not we're going to see volumes coming back in full over the

next couple of months or whether investors are still cautiously dipping their toes in. what we see now is a small rotation. we believe the value still has some length to go. i think most of the geopolitical, maybe not. yields are coming down. so i think on that front, as well, there's not much unexpected that was last year that could occur this year. >> what's your preferred trade of the day? >> of the day? or at the moment, of the moment. >> we believe that -- of the

moment, i would say japan, i would hedge the yen, but i believe there's still some room to grow. it's picked up a lot, i believe in a historic context and looking at value, it's still a good buy. >> so you still think that there's more room for the nikkei to keep bouncing? >> that's correct, yes. i believe that if you look at it in historic perspective, we are free above levels at this stage that companies in japan have changed, more profitable, more international and less vulnerable to all the effects that took place at the crash in japan in the '90s. i do believe that they still have some way to go next to, of course, the stimulating from the central bank in japan. >> good speaking to you on this beautiful monday. thank you very much.

as i was saying, it's nice to know what's coming up. so you can plan it. you know whether to come back. we just have reports out on consumer credit, whole is a sale trade and jobless claims. all of those are in focus. fed chairman ben bernanke is speaking on friday. it's a slower pace this week. now thousands have taken to the streets to protest francois hollande's first year in office. keep your tweets and comments coming through. we'll see you in a second. ♪

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hi, everybody. welcome back. francois hollande's first year in office was marked with protests on the streets yesterday.

it was said there was no protests in france. karen is live in paris with stephane. guys, still early there. we were discussing last hour whether or not you have austerity even to begin with now. and in the past 12 months, we've seen policies and, in fact, more leaning towards austerity than the germans were wishing for. this hasn't improved relationships between the two countries. and the numbers themselves in france have told a story. if you look at the unemployment, 10.5%, debt to gdp, 108%. growth is stag nating.

this is why there's so much pressure out there and hollande's standing in the community and after such a sweeping victory has been eroded. >> and if the election were to take place today, francois hollande wouldn't be re-elected, he wouldn't even make it to the second round. according to a sur vaf, francois hollande would get 90% of votes. nicolas sarkozy, if he were to come back into politics, would get 34% of the survey. >> if you look at the polls now, there's been almost no consensus at his time in office. they take their assessment on hollande's time in office.

this is what aaron chaney had to say earlier on. >> they were all wrong in terms of what could be positive for the french economy. the first decisions were to raise labor on capital and capital gains and risk everything that was creating value in the economy. >> but in the end, the real issue behind this is its cost competition. and we have lost so many market shares over the past year. so the correction is correct. the problems that the tax credit, 25 billion ur rows on the table, this is too small to -- practices in the economy. >> a rather mixed report card

there from our two experts. stephane, we're talking about in this morning. the labor markets have more competitiveness. this seems to be the key to steer the french economy back on track. >> yes. the average cost of labor is 34 euro 20 in france. 34 euro 20 in germany. you see the problem. and also with spain adding performance labor market now, we are facing in france a competition from southern european countries. >> and not the fact that china was stealing away business from the lack of france. france needs to have a goal to direct its focus towards competing more with the likes of china. >> it is crucial for france to reinvent itself into the 21st century. >> well, the challenges have just been started. this is what hollande is dealing

with. the question is whether he can turn around and the election promises and deliver what voters had hoped for on the data. >> guys, great stuff. we'll continue to listen in for the rest of the day and what is taking place out of paris. it's an interesting discussion. our headlines today if you're just joining us, hurpan stocks hugging that flat line in thin volume trade after the u.s. equity boosts global sentiment. germany, showing signs of weakness in europe's latest service is sector report while france and italy postpone rebounds. and malaysia's ruling party securing a victory in weekend election wases, but seeing support wane. still to come, the flash crash that sent stocks tumbling in 2010, are markets any safer three years on? we'll discuss this after the break, as well. see new a second.

hello, everybody. welcome back. you're still watching "worldwide exchange." a very popular man, warren buffett held a shareholders meeting this omaha, nebraska. thousands filled the convention center on saturday as buffett walked around the floor, played a few hands of bridge as he would, oversaw a 5k run and

answered investor questions for six hours. wow. many were worried about what berkshire might look like without him. he said as his successor may organize things differently, it will remain unchange. in an interview with becky quick with cnbc.com, he weighed in on banks and relagz. >> leverage has enticed people to do crazy things since memorium. bankers have an ability to attract money because they offer guarantee deposits this year. you've got a government guaranteed security. so unless there are limits on them, there will be great temptation toes overleverage. and they did some of that and you do it through other instruments, you know, of balance sheet, derivatives or that sort of thing. so you really need limitations on people.

>> and you can hear more from warren buffett when he joins becky and the "squawk box" team for all three hours today, 6:00 to 9:00 a.m. eastern time. they'll have several special guests including the microsoft chairman, bill gates. at 8:15 in the morning eastern time, as well. meanwhile, buffett's right hand man, charlie munger, spoke to becky, the berkshire vice chairman known for his blunt comments weighed in on the recent debate about high frequency trading. he called it legalized front running and he said it never should have been allowed to reach the size that it has. >> well, any long-term investor is not much effective about things like the flash crash. that said, i think it is very stable for half the trading is a bunch of short-term. people trying to get information. now ahead of somebody else.

>> now, the comments come as wall street looks back on the third anniversary of the flash crash when a technical dlirchb essentially triggered a dramatic fall in stocks thigh years ago today. the dow joins industrial average recorded its biggest one-day decline losing and regaining about 600 points in a matter of minutes. remember? it was nuts. joining us now from new york is erik hunts data, also at cnbc's headquarters, edgar pers joins us. he is the author of "speed traders." gentlemen, welcome. let's start with you. do we need high frequency trading? is it a good thing for the markets? >> it is a good thing for the

markets as long as they follow the same rules as everything else. >> and why wouldn't they? >> why wouldn't they? >> follow the same rules. >> i mean, they're supposed to, so why is it we keep talking about whether it will happen again. >> that's a great question and one i ask often. i would like the answer to that. >> edgar, what are your initial thoughts? which perspective are you coming from? >> well, high frequency application and technology in trading, billions of share trade every day in the exchange always participating to that. so, obviously, trading has been, of course, experience application for technology there and that will continue.

>> is it the rel lagz that needs to change? if you look at history, they've had a system forever. also, there was that monetary, as well. i think try and focus now on these incidents with capital. actually it's not part of the reason and most people will agree that indeed there's a human component behind this. a fear at the same time. >> erica, i know you argue that electronic trading brings down cost, but it brings down ethics. why do the two necessarily have to go hand and hand?

the markets have crashed and nothing where the market falls apart on 12 words. >> i spoke to somebody who was very much in the middle of the flash crash when it happened. he said, look, it doesn't matter how many systems you put in place, it can still happen again. as long as it's computer driven, glitches happen. it's part of our computer-driven live, unfortunately, that we need to get used to. so it's more about figuring out how to be deal with the glitches rather than assuming that we can put them august together, eric.

>> absolutely. >> edgar, do you think that high frequently trading kills liquidity? >> i wouldn't say that. let me take the following point that you go about added incidents. if computers have these issues, we talk about that happened almost last year. it's a signal error in the installation. so it's a technology issue there, something there was a human and that is always happening in the past and will continue happening there. so eric mentioned regulation has to play an important role. regulation play aes role in developing high frequency trading by allowing competition, allowing to participate, the markets, technology to play a bigger role there. and i think that's what needs to continue. in the same way, the regulation

based on what is creating, regulation will use monitor in this case. the kill switches. so we're able to stop incidents from happening again. >> gentlemen, thank you very much. edgar perez is, eric hundstadder, founder of nanex. still to come, yum faces new allegations in china that some of its restaurants are serving up rat disguised as mutton. we'll discuss this with a panel of foot food safety experts coming up after the break. also, we want to hear from you. are you fed up with food safety scares from horse meat to mink? is it time for demand to change? swroin the conversation here on "worldwide exchange" by e-mail, via twitter. we are going to be leaving but a look at how the futures are

looking ahead of the open on wall street. a couple of hours to go yet. e a saturday crowd. ♪ [ male announcer ] the parking lot helps by letting us know who's coming. the carts keep everyone on the right track. the power tools introduce themselves. all the bits and bulbs keep themselves stocked. and the doors even handle the checkout so we can work on that thing that's stuck in the thing. [ female announcer ] today, cisco is connecting the internet of everything. so everyone goes home happy.

hi, everybody. welcome. you're still watching "worldwide exchange." i'm louisa bojesen. glad you're with us. european stocks in the green, very thin volumes today with the uk closed for a bank holiday. after a week of milestones on

wall street where the dow and the s&p hit all time intraday highs on friday. germany's service sector shrinking in april for the first time in months. and activity in italy hits the highest levels seen almost in two years. and malaysian stocks rally after the government now face aes radical divide and allegations of voting fraud by the opposition. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. hi, everybody. if you're just tuning in, thanks for joining the show. perhaps if you're stateside and just waking up, it's still very early to grow eyes and see what's taking place on our markets. we're a couple of hours ahead of the u.s. open. right now, we're looking at the

indicators point to go a slightly flat to higher open net-net. that's wa we're looking at with regards to the u.s. future. the same story here in europe as we're seeing flattish markets in europe. the ftse 100 is not hif tt given that it is a bank holiday in britain. a lot of lucky people enjoying a lie or a walk or a lie in the park. it's beautiful weather outside. you have the ibex 35 off by a couple of points in spain. the ftse mig off by 0.5% and the cac 40 in france off by 0.25%. flat to slightly lower in these markets. how do you make money in these markets? this is what some of the experts have been telling us this morning. >> even if indeed you have -- as you have said, sell in may and go away, i wouldn't do that now because so far i think the

market is very well supported by the banks. >> given the improvement in profit, given interest rates which carry on falling, given dividend yields which are three, four, five, 6% depending on where in the world you're playing, this is a fabulous deal. who wouldn't want to be in equities in this situation? >> i would have the end, but i believe today it's picked up a lot. but i believe in historic context and looking at the value. >> now, u.s. food service giant cysco reports earnings today along with tyson. several analysts scaled back figures for both companies amid fears that cost pressures could

squeeze margins. so two biggies to look out for later on today, tyson and cisco, both on a six-month basis, higher by quite a bit. sysco higher by north of 10%. sysco and tyson, they're likely taking notice of the highened food scares around the world. this as the fast food giant yum brants brands faces a fresh set back in china. authorities in shanghai are reportedly looking into a food mislabelling case. mutton, which is older lamb. the food safety inspector found packages rated new zealand mutton, but there were no production dates or ingredients list on the product. yum brand officials could not be reached for comment. the sentiment came as chinese police are cracking down on a crime ring that reportedly

passed off more than $1 million in that and small mammal pooh meat as mutton. joining us now is helen botamiller. also joining us is christian coya, food and retail analyst. welcome, ladies. let's start with you, kristin. and what to anticipate out of sysco and tyson today. what are you expecting? >> well, i think that both of these companies have been doing well over the past two quarters. .i believe that both of these companies are the leaders in their respective industries and as a result seem to be ahead of the curve in terms of, you know, food safety and the documentation of their procedures. they're forthcoming with information and both of these companies have a solid based leading into today's announcement. >> these reports, though, and indeed these findings concerning food safety, how much of a hit

do we anticipate it will bring to big companies sump as sysco and tyson? even if they're not involved in the other food companies scandals, how much does it hurt the reputation of the food services industry? >> it can be quite significant. .i think all food companies, especially ones that operate in china, are going to be watching this situation closely. i think it's important to remember that, you know, when it comes to china, they really have a developing regulatory system. and so companies operating there are at the mercy of that regulatory system. but it is really tough to regulation in china, to get a decentralized food safety system. as you can see, some very well established companies are getting hot in this tricky

situations and they rarely need to take extra care to verify their supply chains. >> do we think that this has been happening for quite a long time and we're only discovering it now, or is it an issue of the suppliers being squeezed with regards to the inflated food and energy costs and that's why it's coming to the forefront now, helena? >> i don't know that it's really clear. china has been having a constant food safety scandal. i think the only thing shocking about this rat meat passing off as lamb is that it's actually not shocking. chinese consumers have been facing food safety headlines for years. and the 2008 melamine scandal was the high profile one in recent years. six infants were killed and that was -- you know, it shook the confidence of chinese consumers.

since then, we had steady headlines about excessive pesticides and revenues in products. i think a few weeks ago there were thousands of dead pigs found floating in rivers in shanghai. each one of these interaffects consumer confidence. >> we're seeing new headlines with regard to another strain of bird flu. how do you think the authorities are handling it this time around? do we have more confidence in the way that china is handling it now? >> i think suppliers have done a good job of getting ahead and taking initiative in getting ahead of avian flu and the suppliers in china hopefully following it. but i think that they have -- scares in previous years and how that affected companies and their sales.

i think this time around, they're absolutely getting ahead of it. >> you just wonder, though, whether or not suppliers are in control at all of the supply chain or whether we're finding out the system actually doesn't work and we need to unfortunately put more red tape and more control necessary place in this ecosystem of food from start to end. >> well, i think in china they're trained to crackdown. i think they've made 2,000 arrests in the last year. they're prosecuting a lot more of these case necessary an effort to create really a situation where consumers and companies feel more, you know -- feel more comfortable and have more confidence in the food supply. i think, you know, going to the avian influenza issue, this will be a big test of, you know, whether or not chinese health authorities can manage this in a way that, you know, consumers don't get very concerned.

i've seen some initial reports that chinese consumers in some areas have reduced poultry consumption out of fears that they get sick even though health authorities and international health authorities are assuring consumers that cooked poultry is not a risk. i think the situation could prove to be a test for the regulatory system. >> thank you very much to you both. today on cnbc.com, the legendary investor, jim o'neill, i spoke to him. he offered one last bit of advice before bidding farewell to his 18-year career at goldman sachs. he told me the yen will continue to weaken and it will hit 120 over the next 18 months. catch the investment call from his final preretirement interview on cnbc.com. also, the historian lance

ferguson has had to backtrack on controversial comments about john miaynard king. don't forget, you can follow us on twitter either at cnbcworld or find us individually, at louisabowyerson. still to come, jamie dimon faces a potentially difficult shareholder meeting later this month. we'll look at how he plans to address the issues with the powers that be this washington, next. ♪

[ agent smith ] i've found software that intrigues me. it appears it's an agent of good.

♪ [ agent smith ] ge software connects patients to nurses to the right machines while dramatically reducing waiting time. [ telephone ringing ] now a waiting room is just a room. [ static warbles ]

hello, everybody. good morning. welcome. you're watching "worldwide exchange." that's the name of the show. i'm louisa bojesen. these are your headlines. european stocks had he hugging the flat line in thin volume trade after a record week for u.s. equities boost global sentiment. germany showing a rare sign of equities while france and italy post solid rebounces. and malaysia's governing party wins elections over the weekend, but sees support waning quite a bit. now, jpmorgan is coming under increased scrutiny from

u.s. regulators who just weeks before management faced shareholders at the bank's annual meeting. siema joining us now. jamie dimon is once again in focus. >> that's right. jamie dimon is feeling heat from washington and among the bank's shareholders. dimon is set to meet with bank examiners from the office of the comptroller this week. the company faces scrutiny over possible market manipulation in michigan and california as well as increased scrutiny. so the events la led to last year's london wales losses that totaled $6.2 million. diamond has been bombarded with

questions about his leadership since last may. jp morgan holds its shareholders meeting in tampa, florida, on may 21st. dimon faces a nonbinding vote on whether his role as chairman and ceo should be split. iss is recommending voting against david cote, james crown and ellen futter. since early 2012, nine executive ves left jpmorgan's operating committee and now some analysts are wondering how long dimon plans to remain at the company. several people insist he could stay on for the next three to five years. taking a look at jpmorgan's stock, nearly a year after the

london/wall losses were unvei d unveiled, shares were up about 14%. >> thank you very much, good to see you. staying in banking, barclay's capital has been reportedly named in a lawsuit over hewlett packard. it's claimed that barclays was conflicted with hp's board. now, google is reportedly close to unveiling a prescription version of youtube as it looks to generate more revenue from the popular shares sites. the move, which has been in the works for months now could be announced this week. it will subscribe up to 50 youtube channeles and people will be able to subscribe for as little as $11.99 a month. the owners of neiman marcus,

tpg and pinkus are talking to bankers are department switching. "the wall street journal" says these include a possible ipo or sales. but neiman marcus for a possible $5 billion back in '05, they plan to hold the company for years and then exit. but that was delayed by the recession. up next, the u.s. markets are eyeing even loftier highs after the dow .s&p 500 hit record territory on friday. we preview the trading day straight ahead here on "worldwide exchange" on a gorgeous monday. you've known?rson we gave people a sticker and had them show us. we learned a lot of us have known someone who's lived well into their 90s. and that's a great thing. but even though we're living longer, one thing that hasn't changed: the official retirement age. ♪ the question is how do you make sure you have the money you need to enjoy all of these years.

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welcome back, everybody. the eurozone private sector contracted further in april, but

at a slower pace than originally suspected. germany proved to be a rare weak link with activity shrinking for the fft time in five months. meanwhile, further south, italy was one of the bright spots as pmi contracted at the slowest rate in almost two years. you're log at our european market flow. remember, there's no trade coming through in the ftse today because of a bank holiday in britain. so a lot of people out lying under trees in parks enjoying the beautiful sunshine. we're glat to a little lower. but the fresh data comes as italy's new prime minister prepares to meet his spanish counterpart rajoy. spain was a natural ally to team up on his agenda. he said it was possible to boost growth without taking on additional debt. they would also take up the issue of social unhappiness and youth up employment, which sa huge issue in the eurozone. so we're, what, 3 1/2 hours

away from the u.s. market open. right now, we're looking at a relatively flattish open. the s&p 500 and dow jones implies they open lower by one or two points. nasdaq opening higher a little lower. not taking away from the fact that on friday, we were gyrating all over the place. michael gurka joins us. good to see you. the day after the session after the new all-time highs being hit on the s&p 500 and the dow, do you think it's sustainable? do you think it's a real market rally? do you believe in it? >> actually, i have believed in it. only for the reason that the countertrend has been one heck of a bad trade. still to this day, as we expect, until we see about 16, 20 or 25, we just keep raising those

numbers. long story short, buying these dips has always been a successful trade. but a lot of weariness in the markets. >> and what in particular are you focusing on now to see whether or not we're continue to go move higher? i mean, are we looking at the markets being valued correctly? does it make sense given the underlying earnings weakness that we're seeing in many cases? >> well, to be honest with you, i think that the valuations here or at least the way the pricing has come into the stock market and the s&p in particular, it is fairly valued because the topping nature of this market is continuously been kind of overrun with more buying. and, again, even though it's light volume in particular to the past, there's still a lot of bullish momentum. so one of the things that we started to at in particular was maybe a global slowdown in using copper as an example. but we blew right through 320 and there was another head fake

in the metals market, not necessarily precious, but some of the industrial measures that matter so much in this market. i'm a little concerned that that won't continue, but for now, at least, louisa, it's the fact that the consumer strain here as we watch crude oil particularly take another run here on the 100 west texas intermediary. >> especially given that we're seeing things heat up a bit or we saw that over the weekend in the middle east. >> michael, very quickly, what would you advise people to look for value? >> i think the value in the market as a whole is still broad based. i know that at least technology seems to be underperforming, so i believe at least there's more upside there. and i think your tip of the hat would be continued dollar weakness. watch some of the other currencies perform very well against the u.s. rate. michael, thank you very much. good to see you, michael gurka, joining us from spectrum asset management. >> you are definitely fed up of food scares.

jeff tweeted in, he wants to know what he's eating. also telling us his cat prefers chicken, but it would eat a rat, but not by choice. see you very soon. ♪ roomba, roomba ♪ roomba, roomba ♪ got a robot vacuum ♪ cleaning up my life ♪ and it's gonna cut through ♪ filth and funk ♪ just like a knife ♪ dirt won't come back again ♪ thanks to ♪ my brand new friend ♪ got a robot vacuum ♪ cleaning up my life

>> announcer: the oracle of omaha. now he sits down with "squawk box" for a three-hour long conversation. the economy, the markets, the business of berkshire hathaway. a special presentation begins right now.

good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick reporting live from omaha this morning. joe kernen and andrew ross sorkin are back at headquarters on the east coast. we have the man of the morning with us, warren buffett. obviously, we have a lot to talk about with him including stocks, records, runs, the fed, bonds, the dollar and his deal for heinz. but first, before we get to all of that, joe and andrew have a wrap-up of the morning's top headlines and, guys, i'll send it over to you. >> okay. good morning. hi. >> hello, good morning. >> hi, warren. >> hi. >> i keep hearing you talk about me, warren. no one knows what the heck you said. so i don't know, it's like -- it's like one of the answers you give to a lot of questions. >> no. i was sitting right next to him and i heard him mention your name, too, and i'm not entirely sure -- >> nobody knows. >> he said what did he is and i said, i'm not sure and i actually said to becky, what did he say? >>sa