you're watching "worldwide exchange." i'm ross westgate. a recap of the headlines today, banks hsbc reports in 15 minutes. it should post a doubling of profits. socgen shares rise in savings and commerzbank slips into the back. >> allianz insurance, one trader calling the figures amazing. a 20% rise in profit. post better than spec'd numbers. the ftse 100 loses one of its longest standing executives.

paul walsh stepping down 13 years after he's been in the job. he's been succeeded by ivan manendez. and australia's central bank chops interest rates to a record low while keeping its economy in check. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. >> welcome to the start of a new week here. "worldwide exchange" was on yesterday, but it's a new week for me. kelly has now sadly gone back -- well, she's in hong kong at the moment, but she's on her way back to the other side of the pond, as well. so i'm afraid it's just me for now. we've got new car sales up 14% on the year in april in the uk. just another bit of evidence suggesting that maybe the uk

economy is doing better than we thought and potentially decoupling from the rest of the eurozone if such a thing can happen. maybe. on today's show, we focus in on numbers. we will speak to paul rasmussen from copenhagen. and with earnings out after the bell last night, we have the top picks in the solar space. find out what socks are set to shine at 10:20 ebt. the rba takes markets by surprise. we could see further action from the central bank as early as june according the our guests at 10:45 cet. and we're going to be in tokyo. shares continue to rally on strong earnings expectations. the latest market reaction, all of that coming up. and baine capital teamed up with

golden gate in a multibillion dollar deal to take bmp private. find out why the news could be a rebound for private equities, coming up at 111:30 cet. banks so much in focus today following other reports, we had hsbc coming out with its first quarter results in just over ten minutes from now. profits are expected to nearly double to around $8 million thanks to a drop in bad debt. investors will be looking for the group's cost cutting plan. the stock today just ahead of those results, pretty flat. joining us for more, paul cabinet. good to see you. what do you want to hear from hsbc? >> first of all, the focus is going to be on costs. over the course of the last two or three years, revenue growth has been flat at best in areas struggling on the market side. we're going to see possibly a 10% decline year on year. so it's how they're attacking the cost base of the group and

we're expecting them to have taken up around about a billion from costs. so getting towards a 10% cut in the operating costs of hsbc. you'll see just last week, the announcement there. the other issue is they have the strategy there on the 15th of may and the focus here is going to be on equity within the business. there's a growing feeling at the moment to achieve their 12% to 15% return on equity targets, which is a key barometer for their own success. they probably have too much capital in the business to meet those targets, particularly in the light of head winds towards growth. so the focus there will be whether some of the capital with now start to be released. >> the banks -- >> surely. they may focus on dividend pes.the 7:has maintained good levels of payouts through the financial crisis. we're looking at a 5% yield. they may flush out in 15 today. good to have you on board.

commerzbank today swung even to a $94 million net loss in the first quarter. construction costs and layoffs weighed on its bottom line. reuters forecast was looking for a 125 million euro loss. the german lender warned results could be undermined by pressures as well as an uptick on loan loss provisions. commerzbank shares up 1% just about. socgen has pledged to cut an additional $900 million euros in costs. the french lender says the savings plan will help reach its return on equity targets of 10% by 2015. with more reaction, the stock doing very well. with more reaction and because he's been speaking to the man in charge, stephane is in paris. >> that's indulgence. they are almost in line with expectations. if you look at the net profit for the first quarter. down 50% of societe generale because of some one up charges.

but also -- and that's the main reason -- because of the economic slowdown of its domestic market in france. societe generale is facing difficult economic conditions. its economic retail business had a 21% decline in profit. in terms of main announcement, this cost production plan. nearly 125 billion euros over the next three years. societe generale, a part of the plan has been implemented. it started at the end of last year. at the time, societe generale did not give any indications because it was still negotiate, trade unions. it's what the deputy ceo told cnbc. >> we are decided to launch a global cost cutting plan of 111.45 billion euros over a day at a time from 212 to 215. the outreach, 550 million of euros has already been achieved last year.

we continue to -- during this time are first of all. so streamlining of the group organization around our three core businesses, return bank in france and corporate investment bank. so -- would be synergies, cost synergies, means, resources between the different businesses. and the third, the continuing cost on our expenses. >> as part of the plan, societe generale will cut up to 700 jobs at its headquarters in paris. that's fort first part of the plan. then it will cut some jobs at the banking unit, but the bank is negotiating with trade unions. some other banks have announced some cost reduction. credit agricole. 15% of cost reduction at the investment banking unit over the next three to four years, but we don't have the precise details about the road map for this cost production plan. share price is flat. over to you.

>> stephane, thanks for that. plenty more to come. meanwhile, the german shares allianz says all of its business segments reveal a 24% rise in quarterly net profit during the same period last year. samsung avoids a full quarter it won't be adjusting guidance. despite the reaction of one analyst, not doing what you would have thought from that result, up 2.4%. we have re-insurancers wsh off set by a low number of damage claims. munich re rising premiums and low claim numbers provide a boost to hannover re, as well. the net profits fell less than expected, 2211 million euros.

paul walsh will retire after 13 years in the role at diageo. in a at the same time, mr. walsh said it had been a privilege to lead the company and referring to his successor ivan menes said the role he played in the business made his the right person to lead diageo on the next stage of the journey. he's privileged to lead the team and it's a great time of opportunity for diageo. paul, the other paul was going to step down and ivan is the right man to lead? >> absolutely. this looks like a model handover because ivan has been running some fairly key parts of north america diageo. he's had time in that role and time for management to get comfortable with his ability.

the 1st of july, the handover officially takes place. paul walsh will stay around another year to hand over some of those key relationships for the group. it feels like a model handover. >> but that ten-year performance chart is quite interesting. >> it is. when you're comparing against the ftse, you're comparing against a lot of mining conglomerates. but where diageo has scored most successfully is building its business in emerging markets. now the group is so international, it's tapping into those growth teams taking place around the world well away from europe. it still has its european problems, but never these, it has been able to -- >> most of it has come in literally in the last year and a half, two years. >> there has been a bias of the investment theme where you have control of your own pricing and control over your own cost base. >> australia's central bank has ventured into unchatered territory to a record low of

2.75. the most came as australia grapples for falling demand for its resources. the rate has never been below 2.75% even during the crisis. the rba tried to justify this by referring to the strong dollar. we'll be over in australia for reaction a little later on the program. also on cnbc.com, is george soros shorting the aussie dollar? check out the website fob more. meanwhile, it's time to bring you up to speed with what's happening in global equity markets. let's kick off in asia with li sib wish. doing very well, indeed. hi, sixuan. >> indeed. the markets got a chance to

react to last week's updeet jobs rally. the nikkei 225 broke above the 14,000 level for the first time in nearly five years. while the weak yen fueled a rally in exporter stocks. as for the market gainers, heavyweight fast retailing rally today. sony was the most traded stock on the board. and automakers on the bottom here jumped at between 4% to over 7%. lots of focus is on australia, lower by about 0.2% after record breaking cuts. we saw a picture between modties and banks. exports in china jumped to a record high the. a weaker aussie/dollar set to make exports cheaper and improved by their earnings. export banks were under a bit of

pressure today. this despite the national australia bank passing on the first bank to pass through mortgage cuts. the sector had a strong rally last month and they gained between 40% to 45% during the past 12 months, so we could be seeing some profit taking here. elsewhere, the china markets eked out some modest gains after yesterday's rally. the shanghai composite gained 0.2%. the hang seng up 0.6%. and in south korea, the kospi eased up 0.4% today ahead of the boj's rate decisions. later this week, automakers hurt by the yen's weakness. that's a look at our asian markets. back to you. european equities a little firmer today. the ftse 100 is back from yesterday. up 60 points on friday. xetra dax up 0.25%. cac 40 up 0.11 is%. ftse mib up 0.8%. bond rates, keep those focused

on the yields in italy. 3.85%. back over 4% for spain. u.s. treasuries, 1.46% up at a three-week high. 1.26% for the unemployment jobs rate fell on friday. 7.5%. got a big week of auctions and issuance in the united states. and on the currency markets, focusing on the aussie/dollar, 1101.95 is where we stand. we have been down to a two-month low of 1.011811 after that record rate cut by the rba. euro/dollar steady at 1.3081. more comments from mr. draghi about we could still do something further with rates. dollar/yen, 99.09. we were up 99.45. we still have big problems pushing through 100 mark. meanwhile, the dow has had 17 consecutive rises, paul. the s&p is up at a record high.

actually, reporting the perfect result for investors. then we had the suggestion there was still weakness in the economy. so job creation, but no reason for the fed to taper. >> absolutely. and i think really what equity markets are responding to at the moment is not necessarily good news, but continuing weak news. because what equity markets are enjoying, if i can put it in that phrase, is the fact that central banks continued to become more accommodative, having to put more money on the table to continue to sort of keep economies stable. i don't think anybody at the moment is really thinking about inflation or growth. those nonrates and interest yields reflecting more about deflation than reflation. in that environment, you've got passette class of equities trading on earnings yields which do look very attractive. businesses are navigating their way through this recession better than they planned and can take a fair degree of shock

absorber to the revenue line, then you'll only cash now. in previous bouts of central bank liquidity, you saw central banks go. we've got hsbc coming up. let me bring you that if i can. right. i haven't got quite the right report here. hsbc, performance in april continue the trend they saw in the first quarter. operating expenses, $9 the.347 million. underlying profit for q11, 7.6 billion, up 34% compared with a first quarter 20 -- >> that's a bad number. >> does that look right to you? depending on how you define underlying. there have been a few drops and changes during that first quarter, but i saw numbers

around about 6.7 billion for a true underlying number, $8.2 billion. >> the performance is 8.4. so the pvt number would include a number of exceptionals in there. you're looking for the underlying number. i think that's 7.6 billion. >> and the shares are ticking up slightly, paul, so the initial is that other analysts agree with you, as well, on that. >> operating expenses about $9.3 billion. again, that looks pretty good compared to what was anticipated. i saw again numbers around 9.4. >> they're saying they expect mainland china's economy to accelerate after further starts to the year. the one risk on hsbc is what happened to china. >> it is. but i think analysts are prepared for a fairly tough revenue statement, a fairly tough sort of how growth is looking. thefb indicating and certainly some of their core markets in asia have been slowing lately. and there's some readiness there. i think it's been slightly more

optimistic. there would have been reason for a share price pop in the up side. it's all about costs. it's all about how you can manage your costs and your return on equity at this point and have some optionlty over growth. >> cost efficiency ratio, 53.2%, up from 56.9% in the first quarter of 2012. core tier one capital ratio now 1112.7%. >> which feels pretty inch line because that's the point we were talking about. a lot of capital in this business to generate the return on that capital. they are targeting is 12% to 15%. so maybe it's just a little bit too capital heavy at this stage. >> yeah. what else would we look for here? >> the cost income ratio is one which they've set their stool house achievings. i know that number went really quite far and away from target in the q4 number which was around 63%.

i don't know if we're looking at the same number here, but that is the number that may well please. >> very much in line with what we've heard from other banks coming out. it's been a good quarter for loan impairment charges and they're taking less hits. of course, that's increasing the pbt number. b but. >> prudential coming out. i'm actually looking for the numbers themselves at the moment. i've got a statement. the asian new business profit up 18%. q1 asset management net inflows up 66% to 3.5 billion. they're on track to achieve 2013 growth in cash views.

total group insurance new business profit 563 million. any thoughts on prudential? >> only if you look at the relative performance of this group to say of either in the uk elementary in general it has shown a clean pair of heels to both of those. prudential shares up at their all-time highes and it's all been driven by the growth in the asian business. but they're really tapping into a fast growth market there. they're a dominant brand. they would have been even more dominant if they had completed that acquisition last year that caused some -- to investors at the time. but clearly the motivation was the right motivation to increase that behavior. they have discussed about whether they pull out of the uk and become solely focused on that. but the uk generating profits of around 63 million pounds. so it's a pretty flat market

here. it's reflecting the fact of its maturity. >> okay. good. what do you want to do? do you want to just -- so let's just recap hsbc earnings again. and the numbers are doing fairly well. hsbc, underlying profit this morning. for the q1 is 7.6 billion up compared to the first quarter 2012. before tax, 8.434, looking better than expected. when you look at a stock like this now and the financials generally, do you want to own them ahead of anything else? >> no. they're certainly not the priority at the moment. what we're talking about here are cost management. we're not particularly arguing for much top line growth at the moment, and that's the headwind that is going to be created. if your assessment over the next five to ten years is going to be continued tough economies,

particularly europe at the moment, and that's to me what a lot of markets tell you, why commodity res down 25% this year, it's why we see these numbers coming out of europe at the moment, and we're looking at long interest rates hitting new record lows. it's telling you we're in for a long period, 25 years of tough economies to wade through which will require more and more stimulus from central banks. in that environment, i think there are better play owes that than necessarily the banking sector. i think the draw of the banking sector is largely behind us at the moment and they've put themselves in much better shape to manage their way through. and you can argue for hsbc that the stock may have some upside potential if they were to give back some capital at this point, raise dividends by a slightly higher level. but i think there are better plays away from the financial sector at the moment ta for me have a much further up side. >> paul, good to see you. thanks so much for joining us, senior market strategist. now, a para sigparasite on

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u.s. energy took profit in the first quarter. it follows a near 450 million loss in the same quarter last year. solar energy maintained its outlook for the full year. jason has provided a recent piece of analysis in the solar industry and joins us now. good to see you, jason. thanks for coming in. solar, what is the growth trajectory of solar? >> it's stalled a little bit in the recent years. and that's largely because growth up to this point has been driven by subsidies schemes. were obviously put in place by governments. obviously in this age of austerity, what you found is the subsidy is relaxed a bit. so in terms of overall global growth, we think there will be growth of about 5% in terms of total installations. and then that should start to recover against next year where we forecast and go through about

17% for the world. >> as an investor, where do you look at this? >> that is absolutely right. if you look at the way returns have gone, it's a classic tech sector. so in the early years, you have companies earning returns of 40%, 50%. that's obviously the problem that's happening because those returns are so attractive, it attracted so much extra capital and in terms of manufacturing, the returns have been squeezed exactly as we saw in the dotcom boom and now you have companies coming out on the other side of of it. exactly the same way, manufacturing has moved over to asia. it's very, very difficult for the sort of europe ya and u.s. companies to compete in manufacturing with the asian companies simply because of lower costs. so wa we're seeing typically with the u.s. companies is they're moving more into project development which is where we think the returns are at the moment. >> project development, what do you mean? >> people building solder farms

and that's one of the companies which does that at the moment. so the returns there are still quite high. we've seen buffett in the u.s. buying, you know, two very large solar farms of there. that gives smu idea of how attractive the returns are from these projects. but you're right, in a manufacturing sense, there's tremendous overcapacity. compared to demand this year, you're still looking at capacity of about 55 giga watts. >> it's the sorry here, as with most renewable energy, the key thing is to store it so that it's on task, you know, you certainly need a boost. >> you've hit the nail on the head. that's what we are most excited about at the moment, because you could argue to an extent that from an investment perspective the solar game is played out. there will be a resurgence identity again once we've had the shakeout of the manufacturers.

but once we think the next boom is coming from would be the storage area. that's because something fascinating is happening in the german market. if you look at the german demand curve, all the peak demand and where utilities make all their money, all of that on sunny days has gone to solar. so there is no peak demand for utilities left in germany. that's why we've seen the big german utilities profit warning over the last year, 18 months. people look at solar and they say it's a tiny sector of the markets. but actually, if you look at it and you call the other stocks that are affected, then you can avoid -- >> and you mentioned one of the long-term fixes for development. the other two stocks we've got on this board here, if we pull that up, are either of those in storage? >> they're not really entered into storage. where in storage, the main players so far have been the automotive manufacturers for electric vehicles.

but you're starting to see a lot more of -- it's mainly asian, but the japanese tech companies are all start to go put a lot more money into this. but where it's fascinating, and we think all the investment is going to come from, is because actually although the peak has gone in germany now, as solar keeps being installed and the fact that it's a parity of the residential level now means you don't need any more subsidies, it will start to regain a base load now. that's the generation that has to run all year-round. this is going to cause more problems for utilities. you will end up having to make capacity payments for utilities just to give it the return on that effort. >> jason, thanks very much. director at city investment research analyst. still to come, we'll be joined by the folks here on a cnbc interview. see new a few moments.

socgen shares rise while

commerzbank swipgs to a smaller loss than expected. and in the insurance sector, allianz investors looking at what one investor calls an amazing rise in profit. and munich re has better than expected results. plus the ftse releases one of its longest standing executives. and australia's central bank chops rates to a record low. they're trying to take the heat out of the aussie/dollar. as far as bond yields are concerned today, spanish yields are back over 10%. they were yielding 11.62 before the employment report on a friday. up at three-week highs. we had a heavy week of issuance in the states, as well.

italian yields, 3el 835%. the aussie/dollar is at fresh two-month low today. dollar/yen, 99.15. we had been up to 99.45. european equities, meanwhile, the ftse 100 back after a 60-point gain on friday. it's up 0.25%. along with the xetra dak, the cac 40, ftse mib up 0.8%, as well. hsbc is further up today after its first quarter profits almost doubled from a year ago and they're reporting a pretext profit of 8.4 billion. the underlying profits looked a little better than expected, as well. for the first quarter, 7.6 billion up 34% compared with the same period last year. and the stock is up 276%.

the belgium chemicals and plasticmakers will report one of the world's biggest pvcmakers. all this after the company lowered its full year forecast. g4 security has warned over margin pressures this year and cited ongoing pressure necessary europe as part of the group's q1 update. carlsberg, trading sharply higher after beating estimates boosted by double digit growth in asia. the company signaled further acquisition in the region. joining us for a first on cnbc, jorgen asmussen, the ceo. thank you very much for joining us. what's the main contributor here to you beating the forecast? >> i think in general, we're off to a good start. so i'm pleased about the performance in q1 is. for me, a key word is what we do

in terms of execution, where we are getting extremely focused on prioritizing and really do well on those priorities. and i think that's a theme that you see coming true also in quarter one this year. >> so, look, where do you go now? >> we go into quarter two and now we're going into the more important quarters. quarter one is a very small quarter. it's only about 6%, 7% of our total annual profits. so the big season we have in front of us, we continue to deliver on the agenda. we have set for ourselves. that is aiming at growing market share across our key markets. keep working on the efficiency agenda in western europe. >> you say q1 is only 10% of the normally expected full year earnings. sales in asia are nearly 20% of the group key revenues right no and india doing fairly well. how much bigger share of revenues are going to come from

asia over the next year or two? >> i believe in asia we will continue to benefit from the strong growth we see in general in the category in a lot of the markets. not some of the mature markets, but in most of the markets in asia. so underlying growth in the category and i also believe we can continue doing what we have done so well for the last couple of years, gained some share in a number of our key markets. our business is doing extremely well. we're going to talk china, india, cambodia, vietnam, etcetera. >> yeah. what about -- you recently launched a partial takeover bid to launch stakes in companies. what is the latest on the strategy with your m&a? >> we always look for opportunities in asia. we launched this partial takeover process. that process is ongoing and probably will take up to a year to hopefully finish and finalize.

and we always look for other things and, of course, i cannot and you would not expect me to be specific here. i cannot be specific on any of our opportunities. but m&a is a big part of ur agenda in asia. but certainly as important if not more important to make sure we keep doing well in our current business, so grow organically in asia. >> yeah. and just run me through the russian markets. because you brought up sort of a market leading position there to try and take the pressure off western europe and the government introduces various measures. wa do you now expect from russia? >> we expect if you take the market to be more or less in line with what you saw in 2012. so flattish. underlying is still a growing economy. it's maybe not growing exactly as fast as expected two, three months ago, but it's still a growing economy. the consumer and the middle class is growing.

so we have some short-term disruptions based on the kiosk closure taking place based on new legislation coming in on january 1st and combining all this, that makes us believe that the underlying assumption for this year, a flattish market in line with last year is a good assumption for the russian beer market this year. >> meanwhile, europe will be the lagger, i presume. >> western europe is challenging from a market point of view in terms of consumer dynamics and that's why, apart from trying to grow share and do well in terms of innovation, get new products out there to consumers and appeal to more consumers, that's important. but we have to always look at our business model and try to make that more efficient. in particular, when you're looking at a market not growing and has not been growing for years now and i don't think will be growing for the next year, two years, so changing business model is a big part of what we're doing in europe and we are

very significant project ongoing right now integrating, in items of lighting into one-year -- and then also doing a lot of business an naturalization in terms of processes and i.t. systems. >> all right. thanks very much. good to speak to you, mr. rasmussen in a first on cnbc interview. elsewhere, expecting employment conditions to improve in europe after the first start of the year after missing analyst estimates in q1. carolin has that first in zurich. >> good morning to you, ross. actually, the headline numbers both from the top and the bottom line, they were weaker than spec'd. you mentioned that 40% drop in net income. that was definitely below forecasts. shares have seen a bit of a turn around over the last hour. adecco shares starting off in negative territory, now one of the best performers on the smi

up by 2.3%. actually they're looking at is the more positive outlook for the rest of the year. the ceo speaking on a wire saying stalled recovery in the second half of the year and that europe is bombing out. let's talk more specifically about some of the regions. we know it's a difficult issue with the environment. the ceo says that situation in france will continue to be challenging well into 2014. but it's not all that difficult and challenging because in the u.s., he actually says that the recovery is sustainable. that's pretty good news. isn't it? and he says that north america, even in the first quarter, has held up relatively well. he sees solid growth in the emerging market and that could be one of the key drivers going forward. another bright spot according to analysts is the better than expected margin picture and the cost control and the company will continue to cut costs throughout this year. so overall, a mixed set of numbers, even though revenues and the bottom line disappointed, but the outlook is

the big, bright spot for this morning. back over to you. >> thanks for that, carolin. meanwhile, as japan enjoyed a national holiday, the market is back and playing catchup. so why are carmakers accelerating? more for us from the nikkei. hi, toshiko. >> hi, ross. the nikkei 225 has climbed above the 14,000 mark from the first time since june 2008. investors bought a wide range of stocks supported by the weaker yen. carmaker shares were especially higher. toyota rose more than 5%, sue zuky up 7% and nissan climbed 4%. these carmakers all plan to report their earnings. the nikkei is expecting toyota to post an operating profit of $13 billion for the fiscal year-ended in march which is over 3.5 times more than the previous year.

the weaker yen making japanese cars a better value for the money. a favorable market conditions for japanese carmakers are likely to continue. while the domestic market remains weak, positive outlook for the u.s. car market is helping. toyota helps this around 2.2 million cars in the u.s. this year, the highest level in five years. honda also forecasts a 4% rise in its u.s. sales to 1.8 million cars. back to you, ross. >> toshika, thank you. hong kong dock workers finally accepted a 9% pay increase ending a strike on one of the world's busiest ports. after accepting less than they originally wanted, workers continued to camp outside his tower until 100 crane operators who lost jobs are offer worked.

south korean president park yunhi has moved on to washington. she's holding discussions today with u.s. president barack obama. tensions appear to be easing from a recent escalation. pyongyang has moved two missiles away from the east coast launch site. the u.s. pentagon is telling congress that china has taken its warfare activities to a new level the. >> china's military continues to explore the role of military operations in cyberspace as the future of modern warfare. in addition, in 2012, numerous computer systems around the world, including those owned by the united states government, continued to be targeted for intrusions, which of which appear to be attributable directly to prc, government and military organizations. and the pentagon, of course,

china's main military wants to make sure it wins any potential conflict over taiwan. but cyber activities continue to push it further abroad. china calls the allegations groundless. a reminder of what's on the agenda tomorrow. we'll do that in a second. meanwhi meanwhile, let's talk about australia. there could be more rate cuts to come in 2013. we'll talk about that when we come back. an tell you what's coming up on tomorrow, as well. ♪

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one of italy's most prominent politicians has died. miss andriotti entered the italian parliament serving. the 94-year-old suffered heart and respiratory problems in recent years. and the italian and spanish prime ministers say europe must unite on issues such as growth and unemployment. speaking yesterday, enrico letta said it's crucial countries work together. >> we must be a europe which fights against up employment and

making a great common effort. i am sure germany will understand this common effort will be made for europe and also for germany. australia's central bank cut its main cash rate to a record low of 2.75%. it's the first easing since december. matt taylor filed this report. >> australia's bank cut interest rates to a record low of 2.75%. the lowest level since 1959. the market was split 50/50 on what the central bank would do with the rba saying a 25 basis points reduction was appropriate saying global growth was below trend and growth is not up to scratch with credit growth remaining subdued.. the rba making reference to the strength of the australian dollar, saying the exchange rate strength remaining unusual. the australian dollar, though,

falling sharply on the news and australia's iasx 200 rallying off the session lows. attention returns to australia's big banks and whether they'll pass on the full rba cuts to consumers in their mortgage products. the australia national bank is the first to make the move lowering rates by a full 25 basis points. that's the latest from sydney. back to you. >> and joining us for more, ivan is joining us. we saw did saucy ---er dollar down we saw the aussie/dollar down 2%. >> the rba looks at the trade weighted index which is close to 40-year highs. it has come down a little against the u.s. dollar, but still very high in overall terms against all currencies.

>> so what do you think will happen next? >> look, i think the interesting thing about this statement was that it was hardly any different from the last few months. the thing that was really only the last sentence where the bank said, look, we've decided to act on our scope and take and cut rates a little bit. so the way i think most people will interpret it is that they weren't quite as confident that the other sectors of the economy that they've been hoping will strengthen, particularly housing, nonmining investment, will actually strengthen and they know the mining investment profile is weakening. so i think a lot of people would describe it as something of an insurance move. obviously, the currency is part of the equation. and, look, i think if you had your choice in australia, you would prefer the aussie/dollar to drop five or ten cents at the

moment. that would be the best thing that will happen for our economy. that has, obviously, not been happening. the aussie/dollar has been subbornly high. >> yeah. so when you look at it now, are they going to -- if the aussie space doesn't get much weaker, will they go again? >> yeah. i think they didn't give much indication of their forward outlook and even where they cut today. i think you have to make inferences. so the first inference was that they're not happy with the speed of recovery of the nonmining sectors. the second was they used some of the scope to ease. that does still say that they've got some further scope. i think it will depend on demand indicators. the indicators so far have been saying that the economy is not going to -- is not picking up enough speed to offset that mining. so we've still got another cut

in after the election. and i think that still is highly likely. we're seeing job advertising in australia continuing to remain quite weak. so there's not a lot of suggestion that interest rates are going to do anything but fall here at this point in time. and the economy -- i mean, unemployment is still quite low. we're still getting growth, but most of the indicators are saying there's still downward pressure on interest rates. >> you think 2.5% after the election? >> yeah. i think that's definite -- i'll be very surprised if we don't see 2.5% rates this year. next year, i think the bias of pressures on the australian economy are still lower, interest rates. the big mining boom that everyone would have heard about is beginning to wind back. it winds back on our research much more quickly in 2014 and 2015 and i think that's going to keep a lot of pressure off

interest rates from rising in any sense. >> good to speak to you, ivan. thanks for that. chief economist at australia anz. i'll just point out that the dax has hit a record high of 8160. there we go. equities continue to go move forward. talking earlier with paul, a personal environment, plenty of central bank liquidity. the central banks actions. reminder now, what is on the agenda in asia tomorrow? china slowing export growth will be under scrutiny. we've got trade figures. it's a big day, as well, for japanese corporate releases. toyota is putting out full year figures. other companies include key tech earnings out of taiwan with q1

is numbers from umc, tegatron and asa. francois hollande has announced a 20 billion euro spending plan to try and drag out of the economic malaise. the economic program will be aimed at the country's infrastructure and comes less than a week after brussels goes to an extra year to bridge its budget deficit to under 3%. and there's a franco german meeting going on today. and there we go, german finance ministers saying the nation state losing the sole regulatory authority. the german finance minister speaking there. also, the yahoo! ceo marissa mayer continued to stir controversy. this time it's about her fashion choices. spiced up her blond bob haircut with blue and orange streaks as she made an appearance at the annual costume gala hosted by new york's metropolitan museum

of art last night. this year, the so-called oscars of art celebrated what was termed punk fwlamer. in the spirit of the fashion police, her blue and blond streaks, is it a hit of a miss? we'll try and bring that picture up for you. it will be slightly easier for you to -- there we go. where is it? where is it? oh, there. good. okay. okay. from the description, i thought it would be much worse. is that a hit or a miss? e-mail or tweet us. still to come in the second hour of "worldwide exchange," hsbc's profits doubled over last year. more on that when we come back. we went out and asked people a simple question:

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welcome to cnbc's "worldwide exchange." i'm ross westgate. a reminder of the headlines today from around the world, hsbc delivers a near doubling in first quarter pretax profits of $8.43 billion. impairment charges fall. socgen shares rise after cost savings. allianz had what one investor is calling an amazing

jump in profits. australia's central bank chops interest rates to a record low and wants to take the heat out of the aussie/dollar. microsoft is reboosting windows 8. it's beam blamed for deepening the slump in pc sales. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. all right. if you've just joined us stateside, welcome to "worldwide exchange." u.s. stocks putting on more gains yesterday, pretty flat for the dow. but it's still actually into 17 straight days of gains. fairly unprecedented. the s&p up at another record high. this is where we stand. the dow at the moment is 10 points above fair value. the nasdaq pretty much on fair value and the s&p at the moment

is, what, half a point above fair value. indications are for a fairly flat opening. the cnbc ftse global 300 has been meandering a high of 0.2%. over 14,000. the ftse 1100 back in the game after the holiday yesterday, up 60 points on friday. up a 0.25 point yesterday. the xetra dax hit ago record high moments ago, 8,146 is where we stand. the cac 40 is up 0.3% and the ftse mib is up 1% so it's the outperformer in italy. treasury yields, they have a little bit. treasury is 1.76%. we were 1.62%. that was before the employment report on friday. heavy week of auctions out of the u.s. spanish yields, hire today, 4.095%. ten-year high tallan yield trying to head lower again, 3.83%.

and on the currency markets, the standout has been the aussie/dollar. surprise cuts in the reserve bank of australia to a record low 2.75%. they're trying to engineer the aussie weaker. we got around to about 1.0180. dollar/yen, 99.0. we were up around 99.40 earlier on. we're having trouble, of course, getting anywhere through that 100 mark on dollar/yen, euro/dollar, 1.3078. that's where we stand right now in european trade. let's recap that asian session. sixuan is with us out of the singapore. sixuan. >> thank you, ross. finally, it's >> pan's turn to shine. playing catch up after a long weekend broke, the nikkei 225 broke above the 14,000 level for the first time in nearly five years. exporters, especially electronic firms and the automakers were the big gainers on the stocks today.

sony climbed 6% and toyota up 5% today. that's partly due to a report saying toyota would be up compared to recent years. the australia asx down by 0.25 mers after the rba's record breaking rate cuts. but we saw the picture between miners and banks. commodity plays continued to rebound while the company's exports to china jumped to a record high. australian banks were under pressure today despite the national atrailan bank became the first one to pass on mortgage rates to customers. do note that the sector had a very strong value last month and they have gains between 30% to 45% during the past 12 months so we could be seeing some profit taking here. elsewhere, the china markets eked out some modest gains ahead of the key trade data tomorrow. and the shanghai composite gained 0.2% and the hang seng in hong kong up 0.6%.

in south korea, the kospi eased 0.4% today ahead of the bok's rate decision later this week. back to you. >> all right. sixuan, thanks for that. a reminder of what the on the agenda in the united states, we've got march consumer credit figures due out at 3:00 eastern. look for numbers from detectivev and molson coors. we'll hear from disney, electronic arts, mon did he lez, whole foods, live nation and zillow. microsoft doing an about face on windows 8. the firm will release an updated version of the operating system called windows blue in time for the holiday season. microsoft says it will make the software easitory navigate and use and has been the biggest complaint by consumers. the decision could be a major setback for the system.

disney believes the force is strong. electronic arts, the media giant is teaming up with the company to make a new star wars video game. the move comes weeks after shutting down its previous star wars division. disney up 0.5%. electronics art, in fact, up 6.8%. disney reports earnings this afternoon. the ceo bob weiger will be on "closing bell" in the states at 4:00 p.m. eastern. bank of america has a long running dispute with mbia over mortgage costs. bank of america will pay mbia$1 is.6 billion and provide the bond insurer a $500 million credit line. in return, bofa gets a right to

buy a near 5% stake in the company. mbia has been seeking damages from bank of america for failing to buy back ineligible loans the bank had passed on to the company. bank of america is down at a session low, but it's flat. mbia up 45%. and we've had numbers out of hsbc today. they report a near dublg of first kwafrt either pretax profit. $8.4 billion just ahead of forecasts. the banking giants results were boosted by results in embarrassment charges in key markets in the uk and hong kong. they made hsbc the lead gainers. now up over 3%. at the same time, commerzbank had a net loss in the first quarter. the first still beat a reuters forecast looking for a wider 125 million euro loss. the german lender warned that full results could be undermined by pressure on revenues and a

slight uptick in loan loss provisions. commerzbank up 1 is.2%. societe generale has pledged to cut an additional 900 million euros in costs. falling shy of forecasts. since lender says the savings plan will help reach its return on equity targets of 10% by 2015. socgen up nearly 5%. to the banking sector, cort has seen the results, rushed out and is now joining us. nice to see you. what is your key take away? >> loan losses is a massive beat, actually. coming in at about 1.1 billion. and the vast majority of the beat, which is getting the market excited is loan losses. in terms of top line revenue webs they missed by about 2%. they were a good cost performance, but if you look at the results, excludeing loan

offices, there's actually a slight miss. so what's driving us higher here is much lower -- >> what about the underlying? >> slightly disappointing. when you dig into the detail, there's a sneaky 1.5 billion debit adjustment on derivatives which most people won't have picked up immediately because it's not listed as an audible item. you take that away, then actually they're more or less in line. so i think as people dig into the detail here, they might get slightly disappointed, actually. so i would be advising to switch into -- >> really? why? >> rbs, i think the first quarter is deceptively weak. i think there's a certain amount of dumping assets to hit the capital improvement target because they're trying to avoid doing a capital -- and trading on 1.6 tangible. so you have an opportunity to switch out of hsbc on 1.4 and switch into rbs which i believe can be a 10% rbe at 10.6. >> and hsbc, they've said, look,

we feel pretty confident about china. you have in your notes deceptively risky for hsbc. >> that the. the timing on predicting a hard landing our material slowdown in china is difficult to call. but from a risk/reward point of view, i think it starts to become attractive to start playing it, you know, up from the shortside. you know, from the data points in china, residential profit yields are about 2.4%. capital investment of gdp is, depending on how you measure it 50% to 70%. in the first quarter of the last three months, credit grew in china by about a trillion. that's a 50% annualized growth in credit. so, you know, there's a lot to be concerned about in china and, you know, hsbc management in the first quarter, they did a nouns -- >> they're now saying they expect that to get better. >> they do, but the latest macro

data is not encouraging for china. hsbc's own pmi index for china is indicating a bit of a slowdown issue. >> and you mentioned rbs and reuters. are we now comfortable that the more stock the government is going to get out of the stakes in the uk banks? >> i'm sure you saw the press conference over the weekend. there's been increasing chatter where they distribute the shares to everybody request an nhs number. that potentially set the floor under the price. there's a clear route to floating lloyd's rbs. so i think a lot of the reasons why rbs is more investable to some extent have abaited and i think at current levels, they're attractive. >> good to see you. thanks very much indeed for coming.

>> meanwhile, carlsberg shares are higher today, the first quarter earnings beat estimates, boosted by double digit growth in asia. the firm reiterated its guidance for the year. i spoke to the ceo in a first on cnbc interview and asked him to elaborate on the m&a strategy in asia. >> we always look for opportunities in asia. we launched this partial takeover process. that process is ongoing and probably will take up to a year to hopefully finish and finalize. and we always look for other things and, of course, i cannot and you would not expect me to be specific here. i cannot be specific on any opportunities, but m&a is a big part of our agenda in asia. but certainly as important if not more important to make sure we keep doing well in our current business so grow organically in asia. >> meanwhile, diageo announced paul walsh will retire after nearly 13 years in the role.

the stock is up over 200% versus a 13% gain for the ftse. walsh said it had been are a privilege to lead the company. he said refers to go successor the pivotal role in which ivan played in the business makes him the right person to lead diageo. and the yahoo! ceo marissa mayer continues to stir controversy. this time it's about her fashion choices. she's spiced up her blond air cut with blue and orange streaks. she made an appearance at the annual costume galla hosted by the new york metropolitan museum of art. this year, they celebrated punk glamour. in the spirit of the fashion police is marissa mayer's streak a hit or a miss? share your feelings. e-mail us, tweet us or direct to

me @rosswestgate. check out the website for the latest investment calls on the aussie surntsy after the rba cut rates to an all-time low. plus, warren buffett says stocks are reasonably priced. how much higher can equity prices go? plenty more on investors and whether they're becoming increasingly comfortable. all that on the website and more to come. see new a moment. nouncer ] this store knows how to handle 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.

hsbc nearly doubled its pretax profits in q1. shares rallied. the rba cut its benchmark rates on all all-time low 2.75%. and microsoft does a u-turn on windows, blaming the continued slump in pc sales. also still to come, the german insurer allianz stun tess market with first quarter numbers and the world' biggest re-insurancers have pushed past expectations. we'll find out hoe they managed it after the break. ♪

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okay. this is where we stand after another close yesterday for the s&p and record high. and the dow 17 straight days of gains unprecedented. right now we're implied slightly higher up 0.8%. the nasdaq implied up about a point at the moment. a firely quiet start to the day.

european stocks are fairly quieter. 0.5% is the xetra dax up at fresh record highs at the moment and the ftse near 1% higher. other stocks in focus today include prudential. it's the demand from asia helped boost first quarter results as sales jumped 8% from a year earlier to more than 1 billion pounds. asia new business profit was up 18% softening the blow of a weaker european market. and potential stock up 2% in london. that's right, down 2% in london, i should say. the german insurance company allianz says first quarter numbers have been boltstered by first quarter numbers across its segments. and although the company says it enjoyed a strong quarter, it has no need to adjust full year guidance. alliance stock up 2.3% in frankfurt. re-insurancers have beat

expectations. a double digit fall in investment in munich re was offset by a number of damage claims and the german company posted a net profit of 972 million euros. that topped forecasts. at the same time, rising premiumes and low claims numbers provided a boost to hannover re. the firm says net profit had fallen less than expected to faring of 221 million euros. joining us for more, tom costa's analyst at burenberg. your reaction to munich re? yes, there were lower claims in the period which they can't do anything about. what do you think about their operational performance? >> yeah. i think the operating was good. it was in line with expectations. the company had guided at adm recently to a specter and that income result was close to a billion. we knew what we were expecting. as you said, the low level of large losses meant very strong results, but actually operating results were good, as well.

so yeah, an increasing set of numbers from munich re. >> where do they go now? what happens to rates? >> well, rates in re-insurance, i mean, generally, we've seen quite strong rates in response to catastrophes. what i would say is looking to june and is july renewals when much for u.s. business renewed, we would expect to see some pricing pressure. we've seen a lot of third party capacity coming into the sector. so increase supply pushing down rates there. >> yeah. and does the story spill over? i mean, if you're going to -- you've got munich re and hannover, does the story spill over for the whole sector? >> sure. i mean, we've seen very strong results across the board from fellow european re-insurancers, but re-insurancers reporting in the last couple of weeks. like i say, across the board low level -- exceptionally low level of major lows, meaning a very

good start to the year. so, for example, with munich re, you've got net income guidance of close to 3 billion dport year. they've done one billion after the first quarter with, so they're well on the way. being re-insurancers, they're obviously heavily dependent on what happens with the weather over the course of the year. 3q would be the main quarter of that with the main hurricane season. >> as an inest haver, bearing in mind you have that big swing factor. how on earth do you approach these guys? it's just something you have no control over. >> well, yeah, they -- obviously, they will be looking to manage their ultimate exposures and things. but no, in terms of whether we don't -- we can't control it, so any kind of forecast and expectations, you know, are subject to change. i mean, we saw that with hurricane sandy last year or superstorm sandy, as it was, impacting things when it looked like it was a quiet year for

catastrophes and along comes sandy and the changes everything in the fourth quarter. so the companies can manage their businesses, but they can't determine the weather at the end of the day. >> and what's happening with the capacity industry as a result? >> well, i mean, like i said, we've seen lots of catastrophes over the last few years. what we've also seen, it's likely to impact the june and july renewals is third party capacity coming into the sector. nontraditional re-insurance capacity from the financial markets, from pension funds, from hedge funds, attracted by and correlated potentially high returns from catastrophe related business. so attractive as an alternative performance investment for them. >> tom, thanks for that. now before we went to the break, we had some stories to follow on cnbc.com. one of them is billionaire investor george soros shorting the aussie/dollar.

we've got the latest investment calls on the currency. and a reminder, warren buffett says stocks are reasonably priced, but how much higher can equity prices go? on cnbc.com. why investors are becoming increasingly comfortable owning cheap cyclical sectors like industrials and energy. plus, the ecb chief mario draghi's latest comments is possible is apparently making bulls think twice. find out what experts have to say only on our website. follow us on twitter, @cnbcworld. still to come, bnp is going private in the first pure leveraged buyout this year. is that a sign that private equity is making a post crisis come back? more to come on "worldwide exchange." all stations come oveo mission a for a final go. this is for real this time. step seven point two one two. verify and lock. command is locked. five seconds.

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you are watching cnbc's "worldwide exchange." a recap of the headlines, hsbc reported a doubling in first quarter pretax profit as impairment charges fall. socgen eyes 900 million in fresh savings. xherz banks moves up on better than expected results. but dax reaching all-time highs. allianz looking at all-time high

in operating profits. and plus australia's central bank chops rates to a record low. they're trying to take the heat out of the aussie/dollar. and microsoft is reducing windows 8, which is being blamed for the deepening slump in pc sales. >> announcer: you're watching "worldwide exchange," bringing us business news from around the globe. >> all right. if you've just joined us stateside, welcome to the start of your global trading day. we have had 117 straight days of gains, unprecedented for the s&p. we are called modestly higher, indicated just about up on this start this morning. the s&p 500 up about 1.8 points above fair value. the nasdaq is about 2.5 points above fair value and the dow at the moment caught up about 25 points higher at the moment at the implied open.

the cnbc ftse global 300 is at session highs today. the ftse up about 14,000 for the first time in eight years, over 3% gains today. as far as european stocks are concerned, we are also firmer. the ftse 100 back in play after the holiday yesterday. up 18 points. we're up 60 points, of course, on monday. we're about 0.6% higher for the xetra dax. the ftse mib is up 1% and the cac 40 is up about 0.4%, as well.. so with equities continuing to move higher, here is a recap of some of the thoughts from some of our guests already today from cnbc. >> we do favor the dollar over a period on time. we think that the dollar will be a beneficiary. qe is a big positive for assets generally. it will help put money into vehicles, as well.

>> it's a fantastic couple of weeks for the periphery. for the last couple of days, it's been very strong returns. i think it's been very painful for investors to have been short the likes of italy, spain, portugal, ireland this year. they've all returned between 6% and 8% which is fantastic. >> some of these speaking out, you mentioned gold and other things. from that point of view, i think there is real downside risk if you're worried about it. so just taking asset values, they're unlikely to put new money into effect. i think that's why certain stocks are falling and it's undervalued. >> meanwhile, microsoft is doing an about face on windows 8, which is being blamed for the continued slump in pc sales. the company released an updated version of the operating system called windows blue in time for the holiday season. microsoft says it will make the software easier to navigate and

use, which has been the biggest complained by consumers. and the decision could be a major public setback for the microsoft ceo who called the last launch of windows 8 a beat or bet moment. and microsoft stock is down in frankfurt. disney believes the force is strong with electronics arts. the media giant is teaming up with a new company to make a new star wars batch of video games. the move comes weeks after the company shut down it's lucas arts division. ea runs a line already called star walks the republic. disney and electronics art, disney up 0.5% in frankfurt. ea up over 6.5%.we're now at a session highs. disney reports earnings this afternoon. the ceo bob iger will be on closing bell right after the results at 4:00 p.m. eastern. meanwhile, golden gate

capital and zane capital are leading a deal to take bmc capital private. the takeover values bmc stock at a slight premium, $46.25 a share. this marks the first pure leveraged buyout this year. it's improving financial markets, ease appetite for leverage. and according to a recent report from the bladery, confidence has finally returned to the industry helped by the improving macro environment. they're optimistic about u.s. growth prospect and an impressive 70% of confident on their own company prospects. joining us for the findings of that report is the managing partner national private equity at medadery. thanks very much indeed for joining us. when we see this news, as well, this morning about this deal around bmc, if we had had that

one you were compiling your survey, what impact would that have had? >> you know, i think wa we're seeing right now is a morrow bust marketplace for private equity. 2012 had a lot of deal activity, but not as much as i think was expected. in the fourth quarter really spiked as the deals rushed to the altar trying to beat out the recent tax law changes. i think we'll see there's a lot of components in place that will see fairly robust m&a activity in the private equities space. >> what sectors do you think will we see this? will it be more sectors specific? >> i think you're seeing over the last recent history b to b, b to c. tech has been robust and health care has been very popular. >> yeah. look, the other thing, what's

interesting is what impact have we got on external factors on portfolio company performance? sglas it relates to company portfolio performance, our survey identified a number of facts critical for private equity to value their value creation model. in particular, obviously, a competent management team, active participation by the private equity firm in developing short-term and long-term strategies. and very important, critical is the availability of valid information. the robustness of the i.t. system to provide information to enable the p.e. firm and that management team to determine whether or not the strategy is being successfully executed upon is most critical. there's -- there is a lot of trueness to information equals

power. >> and you talk about this potential surge in m&a. how much of a problem is the challenge from i.t. infrastructure? how does it impact them? >> well, you know, i think wa we're seeing is pe funds are embracing more and more as they're doing their preacquisition diligence with an valuation of the i.t. systems, realizing that oftentimes the system is not quite as robust as they need to be in order to successfully execute on their strategy plan. and that's critical. >> yeah, look, have you got any views of the sort of leverage part, as well? access to cash and raising money? >> well, i think what you're seeing right now is you saw in 2012 a little bit of a return to increase in the ability to raise capital. although not nearly what it was

pre-2009, 2008, '7and '6. i think what you're seeing contribute to go what i believe will be a surge in activity in '13 the. although the first quarter components in place that will enable pe to see a significant amount of activity, including nearly $350 billion of try powder or uninvested committed capital. almost 100 million of that to vintage funds in '07 and '08. access to credit through the debt market seems to be easing a bit, as well as multiples, median multiples in 2012 from an ibad multiple perspective came in to about a little over seven times from off their highs of the mid eight. so i think there's a lot of components in place that will see a robust back three quarters of 2013. >> thanks for that, donald at

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all right. the news coming out surrounding the oil market, turkey is going to attend a sed export 240,000 -- sorry, i've got the weak trade. it's not what i want. israeli air strikes on syria are unacceptable is what trushgky is saying about these israeli air strikes in syria unacceptable. now, here we go, it's a quick spot at oil for you, 95.62 is where we stand with nymex at the moment. meanwhile, the days of online shopping for most consumers in the u.s. may be numbered as the senate passes an internet sales bill. hi, sima. >> hi, ross. the bill passed the senate last night by a vote of 69 to 27, getting bipartisan support. it would allow states to force internet retailers with more than a million in out of state sales the collect taxes on all

online purchases as well as products sold on catalogs and radio and tv ads. the taxes would be sent to the states where consumers live. major retail chains like best buy and local stores would benefit in the bill becomes law. they complain that there's simply no room for shoppers who browse items in person and use their smartphones to find lower prices and buy online. chains say they're at a 5% to 10% price disadvantage by having to charge sales tax. states would also benefit from new revenues. analysts estimate they missed out on $11 billion in potential sales taxes on online purchases last year. web retailers will likely feel the biggest pinch. they say it's too burdensome for them to collect taxes from multiple states, even with the state provided software that's called for in the bill. ebay has been leading the charge against the legislation and has

vowed to bring grater balance to the bill. the measure has some high profile supporters, including microsoft chairman bill gates. appearing yesterday on "squawk box," gates says it's a matter of fairness. >> it's very unfair to the person who has got a physical store but not only do they have those expenses, but that the other person isn't collecting the sales tax. so this is a -- it's a good thing for state budgets. it's a good thing for fairness in terms of the competitive framework. >> now, consumers could be hurt by the bill. they're supposed to pay tax on online purchases when they file their state tax returns but almost never do. experts vow they're change their buying habits. the bill faces tough opposition in the house where republicans see it as a tax increase. back to you. >> have a good day there stateside. meanwhile, a new survey finds

companies under so much pressure to meet growth targets that many are resort to go cooking the books. in its annual report, ernst & young says 36 countries, 20% say they've seen some type of accounting manipulation in the past year. .42% of board directors and top managers say they're aware of irregular financial reporting. nearly 10% of employees say their companies understated costs, overstated revenue or used unethical sales tactics. re nst & young says companies are under pressure to increase performance. hsbc nearly doubles its pretax profit in q1 and shares rally. european bank stocks helping the dax for a record high. plus, the rba cuts its benchmark rates on all-time low 2.75%. and microsoft does a u-turn on windows amid a continued slump in pc sales.

still to come, u.s. markets trading in a tight range on model. the s&p 500 is managing to edge up to new highs. do investors stick with it or do they sell in may or go away? ♪ [ 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

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the first technology of its kind... mom and dad, i have great news. is now providing answers families need. siemens. answers. bank of america has settled a long running dispute with mbaa. bank of america will pay $1.6 billion to mbia and provide the bond insurer a $500 million credit line. in return, bofa gets the right to buy a near 5% stake in the company. mbia has been seeking damages from bofa for failing to buy back intelligible loans.

to stocks, mbia up nearly 50% and bank of america flat. california my fine pg&e 2.25 billion over a gas line explosion from 2010. it's the largest penalty ever imposed by state regulators. the blast, just south of san francisco, destroyed a neighborhood and killed eight people. the ntsb later blamed pg&e's lax -- on public safety. pg&e down 1.4% in frankfurt. the commodity futures trading commission is considering whether bitcoins should be subject to u.s. regulation as a derivative. the cftc commissioner bart chilton has told the cftc they're looking at whether consumers need more protection.

in march, bitcoin would be governed by the same money laundering for transfer companies like western union. >> and the californian jury store owner who gave this man to scott london cash and gifts in exchange for inside information has pleaded guilty. brian shore who took tips from london on herbalife. london, who was fired and arrested last month is set to be arraigned next week. as far as european stocks are concerned, ahead of the u.s. open today, we're knees near the session highs. the xetra dax is one to focus on there 8,164. the ftse mib is up 1%, as well. banks are in focus. earnings across the board today, hsbc up 3%. good numbers out of socgen to 4%. commerzbank up 1.2%.

so pretty good reception. rbs is the only slight weakness. as far as the agenda in the united states, march consumer credit figures are due out at 3:00 p.m. eastern. look for numbers before the open from directv and call. after the close, we'll hear from disney, electronic arts, whoet whole foods, live nation and zillow. u.s. futures are calling a slightly higher stock once again. it will be 18 straight gains for the dow jones industrial average. unprecedented and the s&p is also at fresh record highs at the moment. it was a mixed week, mixed start. the dow -- despite the fact that it was up, they only traded at the tightest range in months. the s&p 500 did adjust at the close above that 1600 mark. that index closed higher in 10 of the last 12 sessions. joining us for more is david lutz, managing director ahead of

etf trading david nicholas. good to see you. what do you do now? do you stick with these gains each day, we're just grinding a little bit higher. do you just stick with it with may now under way? >> ross, i'm going to tell you, you know, we are continuing to see a lot of money coming into the market. whether it's coming off the sidelines in the mutual funds, $150 billion come out of the money market funds so far this year. so that's driving things. you know, we continue to have the central banks cutting. as you know, australia cut overnight. that was relatively expected. now that's got a big bid going into the mining stocks and a lot of the cyclicals. so i would be telling investors out there, yeah, we might be having a pullback at some point in the tape, bit should be rel ofly short lived. and i'd be watching for a rotati rotation. it seems like a lot of those dividend utility stocks, underperforming sharply and we're starting to see a rotation come under way in these cyclicals. and, of course, the banks that you had mentioned earlier. >> yeah. i was wondering if the data on friday sort of goldie locks for

equities. we saw slightly better unemployment rate, but then the ism showed the economy still isn't weak, isn't strong enough. therefore, we get slightly better employment rate. is that the perfect environment? >> you know, it's definitely a big tailwind for the equity market. and, you know, what happens is that we saw a lot of money moved out of trernryes on friday. the 10-year yield this morning is gaining some legs above the 200-day moving average. so the first time in a little bit that we've seen that happen. and what that's forcing is a lot of the people hiding in these dividend stocks are going to rotate out towards a lot of these cyclicals that we mentioned. one of the things we've been paying attention to is gasoline prices in the united states continue to come down. so our refiners here in the united states keeping more gasoline ashore. what does that do? that's a big tailwind for the u.s. consumer.

consumer confidence came out at five-year highs. yesterday, we heard that bank lending standards are lood loosening up so it feels like more credit is flowing into our economy. that is a very strong tailwind for a lot of on consumer discretionary stocks. a lot of the restaurants are benefiting off that trend. >> yeah. and then we got the rba, reserve bank of australia cutting rates today to an all-time low. how much of a tailwind are the central banks providing? >> well, you know, of course, they're providing a very solid tailwind to the market. you know, we're going to be hearing from the bank of england. they're not necessarily expected to do anything this week. but, of course, they have a dove coming in in mark corny from the bank of canada in a couple of months. we have the bank of accuracy on thursday. korea may cut rates, as well, because they're trying to deal with the depreciating yen and how they're impacting their exports. they're continue to go put a bid under the asset classes. specifically, equities getting a

bit of a tailwind. you see gold off the bottom of the flash crash it had a couple of weeks ago. and we've seen copper. everyone has been negative and bare yesh on copper. that was the best performing commodity last week and it's up against this morning and it's continuing to get more and more of a tailwind. a lot of the central bank printing that we have going on, definitely a benefit. we see the yen trafficking towards its lows right now. japan just opens after a four-day holiday. any investor in ja japanese equity is really happy because the nikkei is up 3.5% this morning. we're going to be sitting here watching through the states, can the dow get through that elusive 15,000 rejected tt last few sessions and a lot of the smart guys on the street think sooner or later we're going to go through that level. >> david lutz, managing director. earlier, we showed you pictures of the yahoo! ceo, marissa mayer spicing up her bloond blond bubble. we've move that page up a bit.

blond bob haircut with blue and orange streaks. i think the orange streaks must have been on the other side. we've been asking you was that a hit or a miss, that particular hair style? john tweeted sxdz the ceo's fashion statement was a hit. she looked good with streaks in her hair. and it's a fearless attitude needed at yahoo!. i think they have to be happy to -- i don't think so. i think it was tongue and cheek. anyway, that's just about it for today's show. coming up next, of course, "squawk box" will have the countdown to the opening of market space. an interview with disney's ceo, as well. whatever happens, we hope you have a profitable day. bye. ♪

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good morning. today's top stories, the global markets. the nikkei topping 14,000 overnight, the highest level since the lehman crisis. australia cuts its key interest rate to a record low in somewhat of a surprise move. in the u.s., equity futures are pointing to a higher open. on wall street, it's tuesday, may 7th, 2013 and "squawk box" begins right now. good morning. welcome to "squawk box" here on cnbc. i'm andrew ross sorkin along with joe kernen. we've got michelle caruso cabrera with us this morning. we should say that becky is

traveling back from omaha today. they will be rejoining us tomorrow. let's begin with the markets. it's folt only good to see you, i was about to say we spent the night together last night, which is probably the wrong thing to say at this hour on television. >> it's cable. it's good. >> but we were -- we did -- we spent dinner together. i don't know what that -- anyway, with paul krol volcker and we can maybe talk about -- >> so there was more than you there? >> it just so happened i moderated this session with volcker last night. >> okay. >> and michelle came, was in the audience. >> but helped out by asking a lot of great questions and then we went off to dinner and she asked more questions.