you're watching "worldwide exchange." i'm ross westgate. here are headlines. china's bigger than expected trade surplus fuels the dow up. and fourth quarter profit more than 3 billion there are for toyota. strong sales in the u.s. helping. >> and there's a strong set of numbers from deutsche telecom. and disney may be the happiest

place on earth as the media giant reports better than expected second quarter figures. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. >> all right. welcome to hump day, middle of the week. as we coast through the middle of the global trading session as well just to recap the dow closing above 15,000 for the first time last night. the record 15,058. s&p also up for a record high 1,625. it follows the dax up record closes as well. that is the move in the last seven days as you can see up 1.5% in those last seven days. the dow nearly 15% so far for

the year. we'll talk about this and what investors are to do with these high prices. also on today's show, we'll bring you a first on cnbc interview with the finance minister of south africa and nigeria and get their views on what the future holds for the country's biggest economies. and find out what i was told about the social emergency at 10:40 cet. and it's been voted one of the top 100 ipads apps and one of three travel apps you should never leave town without. we'll speak to the co-founder of hotel tonight and find out what the san francisco based company's plans are. plus, sales look flat for the big global brewers. find out how smaller competitors are getting crafty. who writes this stuff? plus, we've got upbeat trade

data from the world's second biggest economy. china's exports beat forecasts by a wide margin up 14.7% in april from a year ago. economists were looking for a rise around 10%. imports were also higher than expected up nearly 17%. that's helped china return to a trade surplus in april after an unexpected deficit in march. many analysts are skeptical of the data. exports have been overinflate ing invoices. thanks for joining us. how much do we question this data because the exports to hong kong and taiwan do look overly strong. >> that's right. the exports to the neighboring countries do look strong and there are some other suspicious things going on in the data. we think that actually if you

control for discrepancies, export growth is more like 5% or 6% over the number that came out. >> exports for g-7, what is that telling us? >> exports to the bigger high income countries, those exports haven't caused a lot of headaches in term of data. they cause exporters data in that numbers don't look good and that they are painting a bleak picture. one message out of this chinese export data is the world economy at the moment in terms of demand out there is sluggish. >> what is going on with the chinese economy? >> i think when you net things out and try to put things together, we see the export picture is subdued. on the other hand, on the import

side, things look better and that's good news because the import numbers suggest that demand in china's own economy is holding up quite nicely and that's something that we can take a bit of comfort from. >> how much -- every country has these reports and we look around the u.s. and there have been reports in the u.k. about bringing manufacturing closer to home. how is china going to face that challenge? >> china is of course a major player in that bigger picture of all of these international supply chains. there are a lot of things going on at the moment. on balance china is losing some jobs but those jobs are going to some poorer neighboring countries like bangladesh, c cambod cambodia, those type of places. when we look at serious numbers, china is not losing jobs to the u.s. or other high income countries. on the other hand china is

actually gaining share versus those country. china is making inroads at the higher end of the supply chain as it is losing some market share at the lower end of the supply chain. >> what happens from a policy perspective for the government over the next six months? >> i think beijing is still pretty worried about that global picture and what it means for china's industrial sector and for the economy overall. at the same time there's a lot ofssurally moving ahead with reform and people are being asked to be disciplined in the sense of not caving in to calls for stimulus but rather stress the reform orientation and i think if things work well, we're going to continue to see reform steps coming out of china. if things don't go well, the

pressure will build up to start to stimulate the economy rather than reform it. >> thank you for that. now toyota posting a $3.2 billion net profit. that beat expectations as did operating profit of more than $13 billion. after years of cost cutting and holding the line on capacity, toyota is now reaping the benefits of higher margins. and the world's top automaker expects another year of record sales in 2013. always good to see you. >> hello. >> how much of this is down to a yen benefit and how much is down to toyota's own improved operational efficiencies? >> actually, i think that you

have to think long midterm as well which is beneficial. they did come off slightly below expectation numbers but let's not forget that as you just reported their assumption is 90 yen to a dollar which is more conservative than the street which is looking for 95 to a dollar including our analysis as well. there is more elbow room for upward revision to come and as you just reported north american sales, southeast asian sales and in particular the china which is now mitigated or minus 6.5% in april is showing very good signs in spite of the fact that we know domestic sales will decline by approximately 7% this year. >> was there any impact on japanese car sales to china because of disputes over the islands? >> yes. i think auto sales were the most evident. 70% of business in japan to china are basically b2b.

b2c wasn't hurt that much. auto sales was an exception. nissan turned to a plus in april and you're seeing crawl back by players which is an added bonus to growing sales in north america and southeast asia as well. >> what do you make of the figures in america? >> it's looking very, very good. very healthy of course. we have to cross our fingers that there will be a continuation of improvement. those two areas north america and southeast asia are supposed to support the decline in japan because we're not having the subsidies that we used to have but that said there will be a continuous upward revision likinglik likely to come. >> they are looking like they will hold onto their sort of low

risk growth strategy. they are trying to protect this 5% margin. do you think that's the right strategy for them and they are near recent past where they have big capacity and a boom and then a bust. >> let's not forget that toyota is a bit of a different animal than honda or nissan. they do have their own distinctive typical style which formulated themselves. and in that sense it might look a little bit lackluster and too conservative in comparison to honda. that's their group strategy to grow as a group and they are expanding quite eloquently from 8.6 to 9.2 this year in annual sales estimates. they have a bit of a different strategy. i know on the surface it looks dull but it's conservatism that they go for. >> i want this year to think about what competitive really means for toyota.

i suppose every company should think about that. who are they competing? where is their competitive advantage? they compete in size with general motors and volkswagen. >> they have a competitive edge which is quality over cost and basically sustaining a very good quality throughout their line of cars. basically with a very high level of quality control. that's basically the name of their game and i think they were trying to sustain that strategy throughout the areas and trying to basically mitigate any product quality differentials that may be seen over the c continent but they are trying to claw back that image of typical strong safe toyota. >> good to see you.

thanks for that. the lender reported a hit to first quarter profit. investment and consumer banking fell. a rise in bad loans in korea and high staffing cost cut into earnings. standard chartered expects a pickup and remains on track for an 11th straight year of record profit. stock off as you can see in hong kong 3.7. we'll look at it next time. 6.2% rise in pretax product which beat average forecast for sainsbury. they announced plans to take full ownership of the banking unit. earlier on cnbc, the cfo discussed that. >> we want to be competitive and

as was highlighted, we are very competitive. there's a real opportunity for banks like ourselves to increase our customer penetration into the market and to grow our business and the way you do that is by being very competitive and that's what we intend to do. >> both posted first quarter numbers on the same day. futures suggest that british retail sales dipped in april. at 10:30 we'll talk to an analyst on the state of britain's high street. it's also a mixed day for the world's second largest cement make r. they offset weaker sales in the first quarter mixing it up for us in zurich, carolyn. i didn't start this. it was in the prompt. >> i know. let me say numbers from holcim were a mixed bag. net profit level was boosted

like sales in the australia comment company. sales were down 18% and both levels missed expectations. there were a couple factors here. we had the harsh winter in april and northern hemisphere in general. on top of that you had early easter which impacted building activity in latin america. and that's why we saw this miss in terms of revenues but then again some analysts say the miss is not a big surprise because we knew that the first quarter was a tough one. that's what the two biggest rivals already reported and one is actually positively surprised by the performance in april. the company also confirming its guidance for 2013. that was scene as another positive. it sees better margins in 2013 and significant organic growth and it continues to cut costs and shares in holcim are up by

1.3% and one of the best performers. >> thanks for that. throw it into the mix. operating profit has been rising thanks to products like washing powder. he is still concerned about the crisis in europe. >> our consumer goods business is stable to slightly growing but we are seeing a deceleration of the global business. the picture is deceleration so we're not seeing stabilizing of that and we've seen a slight deterioration of the german side because of the euro impact on germany. germany remains strong but a deceleration of the current picture. >> all right. that's the view from henkel. let's show you the heat map. we're weighted to the upside once again around 6 to 3 advances outpace decliners. dow jones industrial average.

ftse closing at the best level since 2007. we're up two points. fresh high up .8% yesterday. as far as bond rates are concerned, keep an eye on u.s. treasuries. jobs report now at at 1.78%. heavy auctions through this week. the ones yesterday seemed to go fairly well. let's look at spanish yields. 4.1% on that. italian yields 3.82. as far as currency markets are concerned, aussie/dollar off two-year lows. 1.86 is where we stand at the moment. 101.50 roughly on the data we had out yesterday.

sterling, keep your eye on that one. we will talk about that. here we go dollar/yen, we haven't been able to get through the 100 mark which was that four-year high we hit in april and the key here will be german industrial production coming out in just under two hour's time at 12:00 cet. that's the session now here in europe. let's find out and recap asian session. >> thank you, ross. let me start with china. we saw a muted reaction on the back of the strong trade data. possibly due to doubts over accuracy. shanghai composite gained half a percent and media stocks surged on supported policies in shenzhen. the aussie market is the clear beneficiary of the china data ending higher by 1.1%.

commodity place did most of the heavy lifting thanks to 17% in china's import data. higher spot prices boosted miners with assets soaring over 12% today. aussie banks on the bottom row in the green today after the rba rate cut yesterday and shares gained almost 1% ahead of tomorrow's dividend date and we saw upward market momentum tracking more record highs on wall street. japan's nikkei gained 0.7 of a% hitting five-year high. as for the gainers, sharp shares jumped over 6% on reports that it would begin mass production of lcds for the next iphone 5 model. fuji film soared. in hong kong, the hang seng up

almost 1%. at the pretax profit nearly doubled and in south korea kospi ended higher. back to you, ross. >> thanks for that. catch you later. now the world famous economist says he expects to see a rally in risk assets for the next two years. it's what comes after that? speaking less vague, the looming risk rally could lead to a big market crash. he also said real economies remain weak and there's a gap between main street and wall street. at the same time the president told cnbc that bond markets will crash once global central banks stop buying debt. so you can get more of that interview online at cnbc.com. the quest we' asking today is what do you think is more likely. a crash ind

markets first? maybe we won't get either. that's the . e-mail us or tweet or direct to me. what's more likely a bond market crash or equity market crash? good discussion i think. scrutiny after first quarter results. we'll discuss the outlook for europe's telecom sector as soon as we come back. ♪ [ 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.

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all right. heads-up, i'm talking about manchester united that there will be a retirement at the end of the season as manager of the club. alex ferguson will be retiring at the end of the season. he did retire once in 2001 season. clearly of course didn't retire. this one will be slightly more final. we'll talk about that. a lot of speculation about it in

this morning's press. meanwhile, move onto telecom. deutsche telecom reported a 4% drop in first quarter profits. earnings came in just ahead of average forecast. it reiterated the full-year guidance. deutsche telecom up as a result 3.3%. they missed analyst despite 21% jump in net profit and results signaled slower than expected growth in latin america including brazil. sales were down 3.8%. joining us is director and lead analyst. thanks for joining us. they are reiterated what we see with spanish companies. latin america operation aren't what we thought they would be or delivering what we thought they

would. >> the whole story is latin america growth in long to medium term. the issues are debt pile. spain where a fixed line business is still going to kill and one will for a while and one has to ask what will happen to the management team? it's a senior management team. they have missed targets three or four years in a row. the saving grace for them is that they have managed their acquisitions extremely well compared to many other large telecoms and '02 is a great example for that but you have to ask the question will they be under pressure? >> i mean, it comes down to how much -- there are clearly a very tough environment for them. the question is are they doing the best they can do in that environment? >> well, it's a good question and the answer to that in our opinion is probably not. we think they can do more in latin america. >> what be doing that they're not doing?

>> we think they can improve the branding. this is latin america. the issue here for us is there are several elements to it. one of the key elements that's not that well handled by most of them is branding. these are commodity businesses. big volume businesses with a lot of competition and the way you protect and preserve margin in these businesses is with branding. they do have skills in this area because it demonstrates they understand a good brand when they see it. the question is why is that brand not necessarily rolled out everywhere. it's a question that's never been answered. there may be very good reasons for it. they've not been well articulated. it raises that question. the other issue is that within the spanish market they have to become more competitive on price. >> you mentioned brand. i think of everything everywhere. >> yes. that's an interesting brand element. it is difficult to explain in many respects in terms of why finally that was decided and all

of the elements of that brand and brand positioning because it's not meeting a brand promise at the moment. >> they had perfectly good brands. >> they had great brands. in fairness in that respect, france telecom brought that to service its debt and other aspects of its business and that brand was squeezed dry. they look to replace it. >> deutsche telecom reaffirming their targets. the stock is up. is that warranted? >> again, they're around 9.5, 10-year mark. they probably ought to be trading at about 12 euros if everything was being run properly and they could hit targets. the problem with deutsche telecom is sometimes they hit targets and sometimes they miss and that's going on for five years and before the current crisis so probably seven years they had that kind of reputation. they deserve a little bit of a

reward for having hit their estimates and having confirmed guidance but their fundamental issues include the workforce in germany. it's too big. it doesn't need that workforce. because of unionization and the way they have to manage these things, it's a long-term process. >> i'm guessing you're not currently enamored by any of them. >> there are more interesting opportunities out there. there's a satellite business that is a business to business operation but they are branding in their space is effective and they are coming to the end of a major cycle so there's cash generation going on. there's a very good and stable management team with whom we've been consistently impressed. they've down periods related to a couple satellite issues and a problem that wasn't theirs. they are coming out of all of

those. market is focusing on what's good about them rather than what's risky with them or potentially risky and focusing on growth opportunities one of which is penetration of the a-line industry which i'm sure we can imagine -- >> i have mixed feelings. >> as does my wife actually. >> we have mixed feelings about that. very briefly quick word. veriz verizon, do you think the deal will get done? >> i don't think it will get done. but they think something will happen that will please shareholders. >> interesting. nice to see you. thank you for coming in. just to remind you, we heard in the last few minutes that sir alex ferguson, the manager of

manchester united has decided to retire at the end of the season. he has two games left. we'll find out this information when we come back. plenty more to come on "worldwide exchange." we'll check in on the state of british retail. ♪

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okay. headlines from around the globe. china's largest than expected trade fueled the dow. it's double the amount it rose yesterday. fourth quarter profit for toyota of more than $3 billion. strong sales in the u.s. also helping. a mixed set of earnings from europe. s sainsbury beat but others disappoint. and sir alex ferguson is retiring as manager of mass united after 27 years at the helm of one of the world's biggest football clubs.

we'll talk about sir alex ferguson stepping down after 21 years in the job. i think it was 21 years. european stocks meanwhile are up again after closing at a record high yesterday. dax is now further up 8.91. ftse climbing up following a record close in the dow above 15,000. s&p in fresh record territory. debt markets, italian yields firmly below 4%. spanish yields just above. treasury yields 1.78%. we were 1.62 before the unemployment report on friday. in currency markets, dollar/yen steady. moved away from the 99.40 level we were at yesterday. euro/dollar we'll keep an eye on for data in an hour and a half. we look at retail sales in the u.k. an early easter holiday and cold

weather were blamed for the surprise drop. an accounting firm says april sales fell 2.2% from the same month a year ago. britain's second biggest clothing retailer next reported a rise in its quarterly sales. first quarter sales up 2.2% in three months to may. the performance helped by new store openings and the strong online performance. next shares to date up 2.6% in response. and also a 6.2% rise in the pretax profit announcing it will take full ownership of the banking unit. the firm says growth online and the convenience stores helped increase market share. and earlier cfo john rogers spoke about the decision to take control of the finance. >> we want to be competitive. as you already highlighted we are very competitive.

i think there's a real opportunity for banks like ourselves to increase our customer penetration into the market and to grow our business and the way do you that is by being very competitive and that's what we intend to do. >> let's talk about these companies. joining us is head of retail at cbre. thank you very much indeed for joining us. what do you make of the sainsbury update. >> very good results for retail. posted good results today. in terms of 4.6% up in terms of sales. a lot of that is driven by online sales. it's a good story. convenience growth. overall motoring ahead. market share up to 16.8% in the u.k. >> what they've done is brand development. is that helping them out during the weaker economy?

>> it definitely helps them. they've been able to move on with price promising which has helped them. i would say they also benefited from the lack of being involved in horse gate as it's called. >> they've been testing dna of their chickens. did that really impact? >> i think so. results weren't as stellar as they could have been. sainsbury has been testing for a long period of time and results are negative in terms of any trace of horse meat in their product. good results. >> the chief investor denied he's quitting. i wonder if he'll change his mind now that alex ferguson is stepping down. how much does it matter that he's at the helm? >> it's important. he has charisma and style.

he carries the retailer with him and he's been at the helm and they've done well. 33 quarters of consecutive profit growth. phenomenal really. >> 21 years the chief executive of next. that's experience. >> the whole board of next for a long period of time and simon is a great operator and he's been able to grow sales by 2.2%. overall i think one thing to think about next is that a lot of that is driven by new store openings. 1.5% if that's new store openings and overall i think they saw a decline in terms of like to like sales down 1.9% overall. it's interesting. >> they have done well combining directory online and store. is that their success that they've been able to combine all of those operations seamlessly?

>> they see it one brand. you shop one brand overall and if you look online and looking at stores and they see it seamless so you can see a next customer doesn't matter which challenge they use and they succeeded which is why they see positive results when the rest of the retail market sees mixed results. >> we saw the numbers out which was sort of a weak april. how much of that is down to easter? what is reality of underlying trend? >> easter was an issue and so was the cold weather. if you look at the correlation between the performance and weather, it's down at times when it was cold and people decided to stay at home and not shop. definitely an issue there. online isn't affected by weather in many respects. you can shop online and they saw 8.6% growth in that which is why they see positive results especially when the market is

negative. >> thank you. the earnings parade marching on through japan today. we heard from toyota. we get other highlights now from tokyo. >> reporter: hi, ross. a slew of earnings released by japan's major manufacturers today with strong forecasts for the current fiscal year and early report on toshiba sent stocks down. the annual operating profits fell 4% from the previous year due to sluggish sales but toshiba expects better things to come and operating profit will jump 34% in the current fiscal year. the strong forecasts stems from hopes that it can cut deficit in the tv business in q-1. the maker of subaru reported high earnings on the back of brisk sales in overseas market.

it is up 20% from the previous year and sales climbed more than 26%. for the current fiscal year, it expects to sell 34% more which would be yet another record. also, the strong yen is forecast to push up operating profits by nearly 50%. stocks rose more than 2% on the news today for fuji. back to you. >> thank you for that. weird side effect from the bird flu scare, factories in china facing a shortage of feathers. apparently the cullen of birds has affected supply. factory owners say some countries are restricting those coming from china. asia's biggest -- the

director is looking at my call on that. it's physically challenging. you don't stop on a batmitton court. revenue up 20% despite a drop in listings in the exchange. high costs at lme business weighed despite a beat in earnings hong kong shares were down today. india wrapped up the parliament schedule two days ahead of schedule without passing key reforms. two long delayed bills were up for debate but failed for get the green light from lawmakers because of the ruckus.

we get the story now from mumbai. what's going on? >> complete chaos in mumbai. the parliament session has been adjourned two days ahead of schedule without the passage of two important bills like the land bill and the food acquisition bill that the market was so keenly watching out for. the opposition led to chaos in parliament refusing to allow any proceedings in both houses. now, they adjourned parliament over a whole host of issues. the current government is undergoing a lot of allegations with regards to the scam and with regard to top appointments and bribery allegations, et cetera. all of that really has caused the opposition demanding the resignation of the prime

minister and they did not allow any proceedings in both house aforesaid the congress went ahead and won the elections in the state overthrowing the bjt. despite being under a whole host of allegations, the congress actually cruised through and in fact it won with a huge majority of 121 seats which was above the halfway mark and that actually frustrated the opposition and it did not allow any proceedings in both houses. like i mentioned going ahead it's a disappointment because the entire parliament session has been a washout. no key bills have been passed except the finance bill and the land acquisition bill and it was instrumental for the government to get mojo back. for now it's adjourned so lots of disappointments here in mumbai. back to you. >> we'll see what happens.

thanks for that update. just to remind you, if you just tuned in, alex ferguson confirmed he's retiring as manager of mass united after head of one of the most successful football clubs. in a statement ferguson said the decision to retire is one that i thought about a great deal and one that i've not taken lightly. we will be taking on the roles of both director and ambassador for the club. that will of course mean that there will be a furious debate about who takes over. we did have a chance to ask retiring chairman about the recent interview. here's what he said then. >> i'm leaving my current role. the thing in my mind is life is

all about adaptable and responsible capitalism. i think connecting so many parts of life with globalization is inevitable and you see it in the premiere league and you see it with manchester united but trying to do it in a more sustainable, healthier way is something that is inevitable and it's something i do believe in. >> what do you think it would take to take over? >> a lot of money i would guess. >> it's only money and not politics? >> it's a lot of money. >> okay. maybe jim is now free to become manager. or maybe they are doing something together setting up an investment business. who knows. the world is full of possibilities. the imf arrived in the u.k. today to carry out the annual

health check on the economy. it is thought they will call on the chancellor amid concerns over the weak recovery. retail sales down 2.2%. we heard there's due to the fact that easter came in march and we had a lot of cold weather. still to come on the program, a crucial parliamentary vote delayed in slovenia. more when we come back.

brazilian diplomat will be named the new head of the world trade organization beating eight other hopefuls to the role after a selection process that took six months. the first latin american to take on the new role. the eu must tackle disparities between the north and south to achieve convergence through fiscal transfers according to the european commissioner responsible for employment, social affairs and inclusion. he also said investing in human capital is essential to europe's employment outlook. i caught up with the

commissioner after his speech and asked him to explain what fiscal transfers entail. >> they are not going to be sustainable if the price of fiscal conversions is social divergence if the deficit countries need to pay the high unemployment and rising poverty outward migration of the young generation for delivering on the various fiscal rules and there's only one way to maintain these convergence of the fiscal rules and it's a discipline and support from countries that benefit most from the sin market and single currency to those who have been hit in recent years. >> joining us on the phone from ns is the ceo and founder at

t-4 action. she served as an adviser to the greek government. thanks for joining us. he was saying to get convergence we need fiscal transfers. i did press him and ask whether he meant is that in the form of loans or permanent transfers. do you -- say that again. can you hear me? >> i'm here. >> sorry. i was just saying it was interesting to hear him say we need fiscal transfers from north to south in europe. how do you think burden sharing should progress? >> i believe burden sharing should be to structural reforms and not fiscal transfers necessarily based on austerity measures. we haven't done any of that in the last three years for a variety of reasons, which is

pretty much if we keep talking about it, it is waterer bridge. in reality this is a euro structural crisis. it's been misdiagnosed. originally we blamed it to bad expenditure practices of the greek economy which has a very heavy weight to it but it is very much related to the lack of control that do exist with an economy with structural conditions if you will in the productivity model. so when this is not in place, no matter how much austerity you produce, you may need the targets as we met them in 2010. very, very high targets. in 2010 we reduced deficits by 6 percentage points. this is number one honorable target that we met. however, it wasn't sustainable because the structural basis are

very weak and that undermines productivity and what undermines the euro productivity. >> on the structural reform, what do you need -- structural reform can be ful.what would yo the impact of structural reform? >> it's not that painful. it requires strong leadership and political will to go against vested interests. it increases productivity so they are clinging to new productivity factors. for instance, we have huge unemployment. when someone loses his job today, tomorrow he would be or should be able to open some other type of small business. this is frankly very, very difficult to do in our countries in europe and very difficult to

do in greece because of the high level of transaction costs, high level of burdens, licenses, it takes six to eight months to open a small business let alone a big one. it's very hard to move an unemployed society to a fully employed society and moving into new types of jobs and new types of growth factor sectors. that's precisely where we should be structuring all our efforts in reforming our economies rather than cutting wages and pensions which will frankly we have done too much. >> a couple other stories i want to read. a grilling at the committee hearing at the european parliament over the group's handling of the cypress crisis. he refused to say who came up with an idea on bank deposits or

which minister was against the idea. >> we've been told by legal services of the commission that what's been done in terms of capital restrictions in cyprus is within the legal frame work of the treaty and the internal markets. >> the hearing at european parliament continues this morning with evidence from commission officials and a parliamentary vote has been suspended with a challenge to slovenia. when you look at what greece has gone through and you look across the border at slovenia, what do you think? >> i think slovenia is much more related to what's going on or went on in cyprus and i would be very nervous if i were living there because there is a precedent. there's a precedent of bad

banking management and a chop of people's deposits. i'm not sure. i hope this time the european union is going to come up with a little something a little less drastic to the savings of people and a little more responsible to the financial markets quite frankly and regulatory frame work of the country. >> thank you for that. we'll take a short break. still to come, we've got a warning of an equity crash. we've got a warning of a crash in bond markets. what's going to happen? scott evans will give us his view. ♪

[ 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 ]

you're watching "worldwide exchange." here are the headlines. china's bigger than expected trade surplus gives a leg up to equity markets. dow closing above 15,000 first time year-to-date. up more than double the amount it rose last year. helped by weekly rates a fourth quarter profit of more than 3 billion for toyota. strong sales in the u.s. helping. disney may be the happiest place on earth for investors today. the media giant expected better than expected second quarter figures. and alex ferguson is retiring as

manager of mass united after 27 years at the helm of one of the biggest football clubs. >> announcer: you're watching "worldwide exchange" bringing you business news from around the globe. >> all right. we closed above 15,000 for the first time on dow last night a fresh record high and s&p fresh record highs. will we get followthrough today? well, as you can see right now, the dow is below 15,000. we are a couple points below fair value. and half point above fair value and right now s&p 500 is also just ticking below fair value. a long way to go before the open and long way to go before the close of the session. european stocks on the front foot this morning just about ftse is flat. look to german industrial production coming out in an hour. that will be key for what

happens with euro/dollar. u.s. treasuries, 1.78%. worth pointing out we were 1.62% yield on ten-year before the employment report. start of big auctions this week not going too badly. spanish yields up a bit. ten-year ten yields still low. aussie/dollar we were down at 101.55 helped along by better than expected trade data but question marks about this. suspiciously strong numbers in terms of trade with hong kong and taiwan. g-7 exports looked weak as well. euro/dollar is that we wait. that's where we are here in european time. let's move over to asia and recap that session. >> plenty of news flow driving asia markets higher today. the dow crossed the 15th level

and better than expected trade data from china and all that helped push the nikkei 200 to five-year highs. australia miners had a good day after it hit the third highest level on record. earnings in play. heavy weight hsbc gained 1.7% today after the bank's q-1 pretax profit nearly doubled and index giant helped the hang seng extend a four-day rally. shares are under pressure despite posting better than expected profit. investors fear that the weak rate in april could persist in the months ahead. and a drop of over 3% today after a warning of lower q-1 ing profit due to higher costs and toshiba shares slumped

but a report that there will be mass production of lcd panels foapple's n 5 from two japanese o you. >> have a good evening in singapore. a world famous economist expects to see a huge rally in risk assets for the next two years. speaking at a private event in las vegas, he said while stocks aren't yet in bubble territory, the looming rally would place markets in danger of a huge crash thereafter. bond markets are facing a double. this is after the dow closed above 15,000 last night in fresh record territory. just to recap that's where we close. futures pointing a slight dip below that. joining us for more, scott evans head of equity sales.

good to see you. thank you very much for joining us. so look, are we going to -- first question. are we going to start grinding higher? >> i think -- my one-week forecast last week was for a much more strong short-term rally in equities and long-term are still the concerns. we have actually sort of similar views. i think definitely ultraloose monetary policy has one big impact and that is inflating asset prices and that's what we're seeing. >> there isn't that much to inflate commodity prices, has it? >> it hasn't because of what's going in. it's following through exactly as we would predict that we saw flows into equities and a search for yield. that's really what's been driving it. one of the reasons we've been keen on financials and asset managers and stocks which are driven by inflows of liquidity

and have yield and that's what's happening. remember, the reason the commodities aren't growing is because the global economy is not growing and so that's the reason. >> didn't stop them going up in the first bout of liquidity injections did it? >> we assumed we turned a corner and would get strong growth. in short-term we get strong rally in equities but longer term we have a problem because we have structural issues with growth. the u.s. looks like it turned the corner not just looking at the jobs figure last week but overall the u.s. is structurally much better place than europe. europe remains a very, very weak environment and it remains so for the next two to three years. china will probably be okay although we may start to see it slowing from here. >> heree go. you can look on that screen if you want. up nearly 15% for the dow. s&p up 14%. 12.5% for nasdaq.

we sat here january 1 or january 2, we weren't on air january 1, and said it may be up 15%. what would you do then? you would have gone i'll take it and shut up shop for the year. >> we thought the world had changed. we thought the whole european situation was over. then we had a very, very weak march. if you look at the results that came out today, there's an overriding theme. one of the issues has been that march was a weak month for just about every single sector whether it was banks or retail or whether it was industrials and we've seen a pickup in april. i think it's a short-term pickup and who knows if that will continue. >> 15% for the year here we are in may. what do you do right now? stick with it or lighten up? >> you have to be selective in terms of sectors. i'm certainly not piling into commodities. i'm not piling into the industrials. that's because i don't believe in the longer term growth path

of the european economy. i do believe that there's still further to go in financials, asset managers and these sorts where the ratings aren't that expensive. >> all right. we've been asking this question today for viewers as well. what is more likely? a fall or crash in equities or the bond markets? e-mail us or tweet. we'll also get your views as well in a second. he does have an answer on that. we'll get into that. also still to come, disney's return to oz helps drive second quarter profits past analyst forecasts and what investors will have to cheer about at the happiest place on earth when we come back.

disney reported better than expected second quarter profits after the close last night driven by a strong performance nearly across the board. cnbc's julia boorstin has more on numbers from l.a. >> disney stock trading at an all-time high the media giant reported better than expected second fiscal quarter results beating on the top and bottom line. the company grew revenue across each of the five divisions with parks and resorts showing the most dramatic growth. revenue up 14% in operating income up 73%.

ceo saying attendance and guest spending are higher. >> you have a steadily improving economy and that's clearly helped us. we made some good bets over an adventure and two new cruise ships and three new lands three open in hong kong. >> disney's largest business was driven by espn by higher ad are he ha revenue tracking 10% higher than last year. also weighing in on success of "iron man 3" announcing it grossed $711 million worldwide. >> this is great for us. it validates a strategy of big franchise films we tie into or leverage across our businesses but it bodes very well for marvel because we've got from

"iron man" or from "avengers" we have "thor 2" coming up and we hope to bring "iron man" back as well. >> shares grew 36% to 79 cents. two cents higher than expected. revenue grew greater than expected 10% to $10.55 billion. the one weak spot was nbc network. based on commentary, the media giant is poised to continue to grow. from cnbc in los angeles, i'm julia boorstin. >> alex ferguson retired after 27 years at the helm of the mass united club. he said the decision to retire is one i thought about a great deal and one i have not taken

lightly. man united shares traded higher by 34% since it listed in new york last year. the stock closed at $18.77 yesterday. on the phone now is alex donohue. a great record of success from sir alex. who is most likely to take over? >> a tough act to follow. it's been a busy morning of speculating. over the weekend we suspended betting. incredibly crazy morning here. as you would expect with such massive news. >> does that mean you are reopening him taking over chelsey? >> any second now odds on for united. it's incredible and exciting. everyone thought there was a

shoe in but maybe going to manchester now. >> i can understand why he may want to go to man u. what's the attraction for them to hire him? >> he's always said he has unfinished business in the premiere league. a manager of his clout and he's branded his appeal. he's a perfect fit for united. no disrespect to the premiere manager 0 er on a tight budget e looks like a perfect fit. >> there wasn't a clean departure. so here you have to have a clean departure. he'll become a director. you have to have someone that comes in and cleans out sir alex completely. >> he's the man to fill those shoes and take the club to even more success over the next few years. >> if you had to pick a surprise

nomination or european, a surprise package, who would that be? >> klopp was 22 on this morning's takeover. he's now 10-1. many think klopp may give it a go in manchester. >> do we have any idea on time scale? >> not yet. the way people are betting this morning, i suspect an announcement will be made soon because there are big bets flying around so people don't want to tie money up for a long time. we think it could come fairly soon. certainly that's what betting suggests. >> thanks for that. alex donohue. all right. reminder of the headlines if you just joined us this morning, toyota profits blow past estimates helped by weaker yen and strong u.s. sales. as you just heard, mass united's

alex ferguson is retiring from one of the biggest football clubs. disney lifts profits above forecasts and still to come with a shift from pc to mobile, how is the travel industry keeping up? stay tuned to find out how fast you can now book a hotel room on the app our next guest created.

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if you just tuned in, a record close for the s&p and dow last night. the dow through 15,000 for the first time. right now we're implied pretty flat start. we're implied down one point on s&p. nasdaq up 0.6. we'll have to wait and see what happens. no real indications there. moving on, hotel tonight, that's the name, is a phone app that offers last-minute room deals to tech savvy travelers with three taps and a swipe, you can book a hotel room in under ten seconds. soon to be able in over 100 cities across the u.s. and europe. it won't get sleep until it accomplishes global expansion. joining us is the co-founder of hotel tonight. thank you for joining us. what's the difference between this and lastminute.com.

>> this is a pure play for people who woke up this morning not expecting to stay in a hotel tonight and find they're out and about and need a hotel for some reason. plans are changed either for the better or for the worse and they need a hotel and want an easy way to do it on the go. there's no better way than hoteltonight. >> is it literally rooms that come up on each day? there won't be any rooms that are free for tomorrow night or the night after? >> there are rooms that are free for tomorrow night but your stay has to start tonight. it is literally rooms that have come free in the last few minutes. the sale doesn't go live until noon each day so hotels have an opportunity to assess their occupancy rates for tonight and can put out deals. >> what does that mean in terms of the hotels and pricing of them and managing inventory? >> it means there's great pricing. hotels rarely are sold out. generally run at 60% occupancy

each night. there are rooms for sale but they need a safe place to communicate that extra capacity to consumers where they're not c cannibalizing others. >> it's standard for the travel industry. how you get hotels to sign up for this? are big chains signed up? >> our users are trendy types. they look for hotels with personalities. we look at independent hotels or even chain hotels that have some interesting features. generally people who are out in town for a show and could drive home if they wanted to but why not make it a more fun night so looking for an interesting place to stay. >> do you have to sign up? or just download it or give information away? >> not much. download it and set up a profile. we ask for your name and e-mail address.

you can load a credit card to make it easier next time you book and it makes it so we store all that. you mentioned three taps and a swipe and you choose your hotel. tap confirm and trace your logo and you're done. >> how did you market it? how do i get to find out about it? >> that's an interesting challenge. as the world's first mobile only travel booking service, we can't market the way traditional online travel agencies market which is heavily online google ads. we have to find more creative ways to market because we have to get people to download apps. we've pioneered different strategies. if you play games on your mobile phone or if you use other apps that have advertising, we'll advertise through that. with he do social media. users are real connected online. 250,000 facebook fans and 30,000 twitter followers. we use those media substantially. and we also have built a

community that's really interested in the content we offer and as a result we allow them to refer friends and give credits to booking future stays to refer friends and that's been a successful channel for us. >> you'll get much greater on referrals. you get stickier business. >> absolutely. makes for really loyal customers for sure. >> all right. we'll see. >> i'm hoping for the best. >> this is a u.k. product or u.s. product? >> we started in the u.s. we're based in san francisco. we launched inhe u.k. last june and expanding across europe. >> thank you for that. some of the other stories we're following, jcpenney is warning of a bigger than expected decline. same store sales fell 16% in the quarter. analysts expected a 13% drop.

jcpenney blames lingering effects on ron johnson's marketing strategy including getting rid of coupons and sales in favor of every day low prices. the new ceo will be able to turn things around they believe. jcpenney up 1.6% in after hours. treasury secretary is blaming a dysfunctional washington on slow economic growth. he toured a factory that makes blending equipment for food and zeroed in on local impact. the cleveland air show was canceled this year. >> there are dangers ahead. one of the most significant speed bumps for growth is coming straight from washington where some political leaders continue to generation one manufacturing crisis after the next.

the standoffs and short sided maneuvers are a drag on our economy. and they undermine confidence which is a key driver of economic activity. >> lew says getting rid of the que sequester is something obama administration thinks is urgent but doesn't think raising debt ceilings will be disruptive to the economy because nobody wants to threat an default. a republican with a liqu libertarian view says the act imposes on privacy. he said his bill would repeal privacy protection. very little chance of success in a democratically controlled senate. the spring art auction season kicked off last night in new york. a large selection of modern art piece were sold.

that's near the high presell estimate. the highlight apples. a still life from 1889 that went for $41 million. a picasso topped estimates 9.7 million. and madonna sold her 1921 painting three women at a red table for 7.1 million. proceeds went to her ray of life foundation celebrating girls education in the middle east and south asia. coors missed expectation. we'll take a look at the battle of the brewers when we come back. i want to make things more secure.

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you're watching "worldwide exchange." headlines today, china's bigger than expected trade surplus fuels equity markets. dow closing above 15,000. year-to-date up more than double the amount it rose last year. disney may be the happiest place on earth for investors today. media giant reports better than expected second quarter figures. toyota raises past expectation. strong sales in the u.s. helping out. plus, sir alex ferguson retired as manager of mass

united after 27 years at the helm of one of the world's biggest football clubs. >> announcer: you're watching "worldwide exchange" bringing you business news from around the globe. all right. if you just joined us stateside, good morning to the start of your global trading day here on cnbc. fresh close record highs for the dow and s&p last night. the dow closing above 15,000. this morning the opening calls are fairly plate aflat and just below fair value. s&p is about a half point below fair value. we're indicated for a flat start. european markets nudging higher helped along by stronger than expected chinese trade data but some question marks about the the ftse 100 closed in the

highest since december 2007. firmer today. dax is up 8, 200. a fresh record high. and cac is up 0.4 of 1%. foo ftse up a quarter of 1%. here's a recap of some of the views for asset investors from cnbc this morning. >> we've had a big drop in aussie dollar in the last few days. we think there's a wonderful buying opportunity but not just yet. we're bullish on a two to three-month basis. you have to pick your levels. we think both economies are going to be high to what should be a solid second half of the year fingers crossed. >> if there is value, it's in local currency debt and you need

to look at those countries where interest rates are unlikely to fall like china probably chilly. you're going to have mexico not fall much and good value in short-term. >> currently we're looking at inflation and emerging markets bond which is interesting because you can get yield of 1.5%. maybe switching out of the u.s. whether it's a negative yield. we continually look at japan. >> those are some of the thoughts we've had. and speexpectations to see ralln risk assets in the next two years. stocks aren't in bubble territory but looming rally would place markets in danger of a crash.

and bond markets will crash once global central banks stop buying debt we're told by another analyst. >> you're looking at a massive capital loss for institutions in the world and for those that put savings into those bonds which will hit demand and hit the real economy because wealth goes down and then people's optimism about the world economy will fade. >> so with us to give us his views is scott evans. what we were asking today is what do you think will come first? a bond market crash or equity market crash or either? what's your view? >> ultimately it's the bond market which is driving the equity market. we've seen the impact that central bank policy has had on yield and bond market and driven it higher and higher and that's the risk. that's part of my thesis in

terms of short-term/long-term issue. we have seen at the moment low inflation. we haven't got fresh expectat n expectations picking up. when that changes, we have difficulties. >> so is the bond market -- everybody says that it's been very painful to keep suggesting that the bond market is going to fall out of bed. >> ultimately you can't have we have seen that central banks around the world -- >> doesn't have to be a crash. >> it could be. i wouldn't use the word crash. i think correction is a more sensible way of looking at it. the world economy doesn't operate well in a deflationary noninflationary environment. what we will undoubtedly as we have liquidity flows driving around the world driving asset prices higher and yields lower

has to change. >> that will lead to an equity market correction and that money would flow back into bonds. >> that's a really lovely circular argument that we could pretend is true but dynamics of it don't work that way. once you got a bond market correcting, we'll have a significant impact on the equity market and wiping out values which doesn't automatically reflate into bonds. you wiped out the value. >> got you. all right. stick around. meanwhile, lett let us know wha think. you can e-mail us or twitter. and a 55% drop in first quarter earnings missing estimates for coors. higher costs tied to recent takeovers and poor weather were to blame. group revenue rose 20% but fell shy of forecasts.

coors closing down half a percent yesterday. disappointing report comes after largest brewery in the u.s. had a 5% drop in first quarter volumes citing bad weather. this as many industry watchers say the growing popularity of smaller brands will shake up the industry. joining us for more is the european beverage analyst. thank you for joining us. is it just weather or is there something else going on for these guys in the states? >> primarily for this quarter it is the weather. you are right to say that over time big beers are losing ground to craft brands. >> how much of an impact are we talking about? >> it's relatively small. craft bands in total are 7% by volume of u.s. market. 10% by value and so it's nibbling away at big beer rather than catastrophic. >> how much is also moving out

of beer into other drink segments? what's happening to drinking beer as a trend? >> if you look at the u.s. over the last 15 to 20 years. you are seeing consumption rising. contrast to the u.k. where it's been falling, the u.s. is still rising but wine and spirits are taking a bigger share of that. beer volumes grow 1% and wine and spirits growing 3%. >> the interesting thing is we heard from coors and others, we had good numbers but was that driven from asia? >> you could divide the world in three. you have emerging markets which show very, very strong growth. asia, africa, latin america. you have europe in steady decline and u.s. which is flat and up a little bit. >> what do you think of this guys? >> i would be interested in your view in terms of valuation. the stocks have had a long run.

our thesis has been buy the spirits and not the beers. looking at it today if you came from another planet and looked at the sector saying it looks expensive, how will they buy especially the beer companies? >> if you look at growth over the last five years, both sets of companies have delivered similar eps growth and going forward you see similar trends beginning in different ways. i agree it's an incredible run. >> thank you very much for that. i was about to launch into another question but i can't. i've been forbidden. i'm being a good boy today. you don't have to laugh. okay in the control room for that. thank you. the world economic forum in africa kicked off. cnbc is there and on day one caught up with the finance ministers of nigeria and south

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the south africa rand is moving lower on news that there

could be a rate cut later this year. we have been looking at south africa's economy. she caught up with country's finance minister and asked if he was worried about the recent sell-off in commodities. >> the general slowdown which is from events in europe is worrying for all of us and it's a matter of major preoccupation in g-20 meetings and so on. and result in demand for commodities is also certainly for a country and continent like africa but even south america would be major areas of concern. so what we would like is a change in thinking, a change in direction and a greater focus on inclusive growth in jobs which imf is focusing on as well so we move away from this downward

spiral we're taking the world into whether you are north, east, west or south. >> we'll bring you the full interview on european closing bell at 1700 cet. nigeria economy is thought to be the largest soon. the finance minister says there's no race to be number one. >> we're focused on trying to get our economy stronger and doing the right thing and going in the right direction. as far as the relationship with south africa, we see that we have an excellent relationship. i just finished a meeting with a finance minister. there will be healthy competition between the countries. it's healthy. >> that's interview with the

nigerian finance minister available online. a recap of the headlines today. toyota profits blow past estimates. ferguson retires as manager of one of the world's biggest football clubs and disney proves it has the magic touch. the music studio and theme parks lift profits above forecasts. yahoo! searching for exit doors reportedly looking for a way to get out of the long web partnership with microsoft. for more on that, seema mody is at cnbc hq in the states. just not delivering for them? >> so "the wall street journal" is reporting that yahoo! has quietly been looking at ways to exit the search partnership with microsoft. under which the search results are powered by microsoft's bing engine. yahoo! disclosed on tuesday that

microsoft extended a revenue guarantee. the second extension since it took effect in 2010. yahoo! ceo marissa mayer is seeking to end the contract ever since taking over but microsoft isn't interested. yahoo! revenue per search has been worse under the microsoft deal than when it was going at it alone. the search deal was signed during the tenure of former ceo. yahoo! may be on the under for another acquisition. mayer met with executives from hulo recently. majority of content is free but it has 4 million members that pay for a monthly subscription. talks come in the wake of the failed offer to buy a majority stake in a french site named daily motion. that deal $300 million would have been the most significant acquisition since mayer came onboard last july. shares of yahoo! are up about

63% since she was named ceo. ross? >> all right. thanks for that, seema. "the wall street journal" reports that -- let's move on. that's the story that we just did. let's talk about toyota coming up with good numbers today. toyota flooring it down the final stretch. $3.2 billion net profit in fiscal first quarter. that beat expectations and a pretty big operating profit of more than 13 billion. phil lebeau casting his eye on what it means. he's on the phone from chicago with the latest. they've had a cautious growth strategy. have they succeeded in building up their margins? >> i think the interesting thing when you look at the fiscal fourth quarter for toyota is that they beat the street more than double the profits $3.2 billion. they did it in a quarter where sales actually fell in part

because of the problems they're experiencing in china and also because they saw weaker sales in the home market of japan. it's an unusual quarter in that regard. the focus with toyota's earnings is really less about what happened in the fiscal fourth quarter and more what they're projecting with the next fiscal year. the one that ends in march of 2014. they expect to make $13.8 billion. that's an improvement compared to $9.2 billion this year. as you mentioned, the focus is less on the raw growth and more on making sure that they have the profit margin growing as they should be or as you would want your profit margins to grow. they took great pains during their earnings report to say, listen, the weak yen certainly helped us over the last year. $1.5 billion profit improvement because of the weaker yen but they point out that sales were up $6.6 billion and that's really what was driving profits at the end of the day. again, the focus is always on the growth for the next year and

in that regard sales are expected to come in globally at 9.1 million vehicles for the next fiscal year up from 8.8 million this year. ross, real quick. toyota earnings this morning. the focus in the united states tonight will be on tesla earnings. this is the first profitable quarter. they announced this a couple months ago. the first time they expect to make a profit for a quarter. not a huge one. a slight profit. the focus for tesla is all about sales, how many model s vehicles did they sell in the first quarter. it will be more than 4,000. and more importantly, will they be on track to sell 20,000 this year which has been the target and also what's happening with the reservation backlog. those will be the focus of the tesla earnings after the bell here in the united states later today. ross? >> stocks doing okay. 60% gains. phil, good to talk to you. plenty more from phil throughout

the day on cnbc. still to come, disney's new attraction at its california adventure in theme parks are boosting attendance and boosting the company's bottom line. we'll break down earnings straight after this. we went out and asked people a simple question: how old is the oldest person you've known? 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. ♪ to enjoy all of these years. ♪

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(train horn) vo: wherever our trains go, the economy comes to life. norfolk southern. one line, infinite possibilities. electronic arts fourth quarter profit missed estimates. they expect another rough patch in the first quarter but the company thinks it will see a healthy bump in video game sales later this year during the holiday season. shares up 8% in after hours. at the same time, disney profits rose better than expected 32%. revenues jumped 10% driven by strong performance from the company's cable networks, movie studio and theme parks.

cable profits were up 15%. the movie studio did well because of the release of "oz the great and powerful." theme park attendance was up 8% thanks to a launch of cars california adventure and expanded fantasyland at disney world. joining us from new york is the managing director at the advisory group. thank you for joining us. significant growth at the theme parks. stability at the film studio. what happens next? >> ross, walt disney and espn are two of the most competitively entrenched businesses in the united states. what's magic about walt disney is not that it's the happiest place on earth but rather they take every piece of content and inele intellectual property. we look at it as costco wholesale.

it's a business that goes from strength to strength. three things we learned last night, number one, the cable networks and espn are enjoying benefits of multiple new affiliation agreements which are likely to drive double digit growth of distribution revenue. there are indications of an acceleration of margin recovery and lastly number three, given the success of film entertainment, the strength of "iron man 3" and potential for "star wars" we feel comfortable for the film slate. the one drawback is disney common stock is up 90% over the last 18 months and 30% year-to-date. disney and entertainment group are hot from an investment perspective and prudent approach is to be more cautious here. >> given that disney is a global company, given what's happened with theme parks doing better than i was looking at, is an

indication of the strength of the u.s. economy or am i extrapolating too much? >> our view is that the leading edge of media and advertising spending is the pace of growth of real personal consumption expenditure. over the last 18 months, real pc in the united states has slowed from 3%, which benefited from a snapback off the trough as a tailwind to less than 2% here. our view is that the consumer spending recovery at that level of 1.8% to 2% is modest. what makes media companies great is not that they are selling more shoes or opening more stores. what makes great dominant media companies good invest ypts and good businesses is their ability to implement price increases and our view has been and continues

to be that these companies will still implement price increases. >> so whether it's comcast or news corp or others? >> absolutely. in fact, in two weeks we're headed to the upfront season for television advertising and last week the ceo or media mogul at cbs came out and said he expects to get high single digit to double digit increases. that's where u.s. television networks sell 60% to 70% of their ad territory. we do believe that there is strong enough consumer spending recovery to generate mid single digits or better. >> thanks for that. that's it for today's edition of "worldwide exchange." "squawk box" gets under way next. we hope you have a profitable day.

good morning. today's top stories, the global markets. dow closing above 15,000 for the first time ever with a quick move from 14 crossing that up to 15 and europe and asia are following suit as they should on this wednesday, morning, may 18th. "squawk box" begins right now. ♪ good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. let's start with the markets this morning and another record close. the dow finishing yesterday above 15,000 for the first time ever. that's not the only record that got broken. the blue chip index finishing

higher. 17 straight tuesdays is the first time that's ever happened. that's a weird record but one we've been watching closely. the dow is now up 15% this year and that is more than double its gain from last year. meantime, the s&p is up 14% so far for 2013. that also exceeds all of its gains for the last year. tech, energy and materials have been the biggest winners in recent weeks. this is notable because the three sectors have been laggers since mid november and year-to-date. in the last two weeks, tech has outperformed the dow and s&p 500. we've been watching futures this morning and after new records we seem to knock out every day, you do see modest green arrows. these are very modest at this point. the s&p 500 is up by less than half a point. dow futures up by 1.8. we've watched european stocks and some early trading and right now you can see biggest gains are coming in france where the