hello. welcome to "worldwide exchang.". falling produces prices bring weak demand for factories. the central bank cut its benchmark rate to another record low. recent data boosts confidence. and big assets fall off.

will a weak yen and growing smart help keep the tech giant profitable? stocks fall after better-than-expected earnings and a box office blockbuster. but the company's publishing business continues to be a drag on results. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. >> they say the adjustment by deafsy sit countries has been both cyclical and adjustable. banking union progress would help reduce the target balances, risks for the economic outlook are to the down side, though. the risks for economic outlook are to the down side. insufficient reform could delay the recovery and they may have misjudged the potential output in recent forecasts.

so as you might expect, a slightly more dovish tone and the bulletin. plenty more to talk about on today's program. china's growth is picking up at a faster than expected pace. cpi climbed a tad more than forecast for april. what's more worrying, food prices were up way more in april, way more than the 2.7% we saw back in march. ppi dropped 2.6%. eunice is with us in beijing and joins us for more. how do we combine this data, eunice? >> most people are focusing on the producer price index. we were all expecting to see a decline in the producer price index by not as steep as the one that we saw. down by 276%. people have been talking about how this highlights the capacity issue that we have here in china

and it really highlights the fact that it hasn't worked well, the inventory and that demand is still weak. now, on the consumer price index, people are more in talking about how the numbers, though they dare to come in slightly higher than people had expected, still relatively mild set of numbers at 2.4%, just a bit higher than what we saw in march of 271%. most people are talking about the food prices. part of that is because a lot of people have been choosing to eat more vegetable necessary china noo away tr meat products, such as pork, such as chicken and even eggs. one of the reasons for that is because of the fears that we were continuing to see here about bird flu as well as other safety issues involving pigs. as you know, there's been a massive story here about pigs that have been floating in a river in shanghai.

so all of that has been feeding into the food safety concerns and why people are choosing to eat vegetables. >> we also have a story on why the eu is imposing chinese solar panels. how is that going down? >> it's not going down very well. the chinese government has overreacted to that plan. saying they oppose the eu plan and that they would protect their own local companies. one of the reasons why this is such a significant development is because it would have a really massive negative effect on the chinese solar panel industry here. this move by the european union would follow washington's move to slap tariffs on chinese-made solar panels, solar panels coming into the united states. and one of the things that a lot of solar panel companies have told me is that any move by washington or by the eu to block

chinese solar panels into the country would have a really big effect on their sales. the reasons why they say that is right now the eu and the united states are the two biggest markets for them, even though the chinese government has said they want to have a better green energy policy and to have a lot of demand here for solar panels. the truth is at this stage really isn't the market for them. so they're very concerned about this. >> yeah, okay. eunice, thanks very much indeed for that. we'll follow this story, as well. steven isaacs, welcome. we had the trade data out yesterday and ppi today. i wonder whether we actually read too much into the trade data because do we trust it, i suppose, is what we're saying.

>> right. i guess the short answer is no, we don't. this is what happened when you try to control capital flows for too long. that part of it, because of the capital controls in china is expressed over invoicing of exports. so the trade data in that sense is probably quite inflated. >> yeah, okay. what is the true picture as far as you're concerned in the chinese economy right now? >> well, i guess on the trade fund, we actually saw the data so far and we're down on the average either way. they're in ae are very tight position. i don't envy the policy of the chinese policymaker at the moment because this global search for yield has sent

liquidity out discusseding back into china. one of the representans of that is to push up the em minimumby and exacerbate this on chinese prices. having a deflationary on product prices as we see in the ppi an separation of acceleration. probably weaker growth to come from that aspect. on the other hand, because of the search for yields and because of the inflows adding excessive liquidity, we're seeing property prices and asset prices picking up in china, overheating and potentially the blowing of bubbles n bond market. >> steven, the fact that we've got the stock market rally but actually no move in commodities, tell us what will investors think about chinese growth at the moment. >> we're trying to ask ourselves why the stock market is

rallying. >> out of the sector? >> exactly, why particularly is the stock market rallying and it's hung for yield. so the hunt for yield is because bond yields are being depressed, particularly government bond yields by various quantitative easing programs. in other words, policy and that's forcing people to look for dividends and so on and so forth. so it's almost set put to what's happening in the real economy. if the real economy were to pick up strongly, which is our view, in other words, bond yields would start to pick up, then perversely, the stock market would go down. so we were trying to understand what's driving the stock market. and this staggering on, limping along of the economy unless there's a sudden serious problem somewhere, which we haven't seen so far, the central banks seem to have got a handle on it. and what happened in the real world and what happens to commodities is largely

irrelevant. if anything, one would argue that weaker commodity prices is helping because, exactly, it helps diffuse concerns about inflation. >> so what is likely to happen in terms of chinese policy and the government and pboc over the next six months? >> in the short-term over the next six months, we're going to see them trying to control again through administrative control rather than raising interest rates because they're afraid of exacerbating those inflows. on the other hand, they're worried about waning growth. so administrative control for the asset price considerations. and then potential ly more help to the economy through other measures to try and boost growth. but perhaps the nicer thing coming out of the overvalue of the renminbi is the authorities are now start to go sound more proactive about opening up the

capital account. that would be one sure fire way in which this is obviously over over a much longer time frame, but in which they can have a devaluation of the depreciation of the renminbi without any political criticism. >> thanks for that. have a good evening there. meanwhile, we're just an hour and ten minutes, just about, into the trading day here in europe. after more gains yesterday, you can see just weighted to the downside at the moment. the dow jones stoxx 600 about 5 to 4 advancers outpacing decliners. we are at the low point of the session. we just got the ecb monthly bulletin out. they have just cut rates to a record low. flat for the ft. if it is 100 right now. up 0.4% yesterday. we closed at another record high for the dax last night. 21 points below, 0.25 below the

cac 40. a 1% weaker and the ftse mib down 1 is.25%. there are a number of stocks worth taking a look at today. a 26% drop in its first quarter net profit. recessions in italy and spain weighing on the italian utility. snam is down 4 % today, shares opening lower. they said they would take a 12% stake in the group. and italy's telecom italian said net profits fell 1.4%, but actually, that was okay as far as tin vesters are concerned. and finally, media set also in focus, its shares up -- down in relation, 1.9%. as far as bond markets are concerned, we keep our eyes today on spain. we're auctioning up 4.5 billion euros. yield today, 4.12% in italy.

3.85%, as well. and on the currency market, the aussie/dollar was a bit of a focus post ppi numbers. actually, slightly stronger today, the aussie/dollar. we'll keep our eyes on cable. no change expected today. 12:00 noon london time. dollar/yen, 98.82, still in that range, unable to break through the euro/dollar 1.3167. that's where we stand right now in europe. let's recap that asian session. sixuan joins us for the first time today from singapore. sixuan. >> thank you, ross. asian markets began the day on a positive note, following the strong lead from wall street. most hang on to their gains and finish in the red. markets in china and hong kong came in higher than expected. japan's 225 slipped from its

five-year high ending down 0.7% off property taking. but there's one bright spot in asia. that's korea. the kospi gained more than 1% after that surprise rate cut for the boj. financial stocks were the big gainers jumping about 5% to 10%. elsewhere in australia, the asx 200 ended just a tad weaker despite the encouraging job status. the aussie/dollar gaining about 0.6 of%. most aussie banks were under pressure today. anz slipping almost 3%. take a look at national australia bank, shares down by about 2% despite reporting a 3% increase in cash profit in the first half of this year. back to you. >> thanks for that, sixuan. now, the s&p 500 has closed at a

fifth record high in a row. the continuous prices pushed the effort into the hedge fund industry firmly into shape despite the fact that the equity is on court for its best returns in a decade. read on cnbc.com why some think the industry is ready to shake its negative image. steven, has it had a negative image? >> i think there were complaints about combination and all this other, you know -- >> why am i paying so much when you can't beat the indices? >> that as well, fees, look to allocations for hedge funds they tend to continue and have gone up nicely. even when last year you say they were under a lot of pressure. >> with about the rest of the industry. what fej funds do is reduce volatility.

>> there's lots of regulatory concern. our own fsc going in there and actually raiding asset managers instead of looking at all the fee structures, things like that, costly arrangements and so on and so forth. the regulatory intrusion that all of us face is certainly there and not just excuses, the hedge funds. but the point about hedge sfundz slightly higher than the pace of the headwind we had last year. coming into this year, although performance against something as simple as an industry such as the s&p 500 isn't that great. >> if you said that on january 1st, you would thank you very much. >> you would. but there are very few managers with any strategy that can be

compared favored with the s&p 5 500. that's a problem for a lot of people. hedge funds are no exception to that. so that's what they are. >> as soon as it comes back to the hedge fund, it's the risk adjustment return. how much risk have you taken to achieve the return. that's the point. >> in theory, hedge funds will hope to give you a decent return in all different market cycles. here we are, we have an extreme bull market. it's not as attractive a cycle. >> and we'll come back and pick on that phase. how extreme of a bull market is it? what are you supposed to do with a bull market? the aussie/dollar might be temporary higher, but find out why morgan stanley is bearish on the strategy. what cross rate he suggests shorting. plus, we'll medicine out to washington with fannie mae set to report strong numbers and freddie mac with expectations. does that put a damper on attempts to reform the mortgage

providers? >> and the world's leading qualitymakers are in london for the global investment conference. david cameron is giving a headline speech at 11:10 cet. they will bring you that. and also on "worldwide exchange" tomorrow, our very own editor steve liesman is speaking exclusively with the u.s. treasury secretary jack lew. we will take that right on "worldwide exchange" at 11:30 cet. plus, if that's not enough, it's the bank of england's rate decision today. most expect the bank to hold back on further qe. andrew told us today the british economy is doing well. okay. >> the economy is altering the personality. the fact is that actually we've

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over in south korea, the strlt bank surprised with a 25 basis point cut rate.

it's another central bank that now set its interest rates at record lows. it's the bank's fist cut in seven months. the bok conceded the country continues to struggle with a weaker won. chery kang is in seoul with more. >> hi, ross. south korea jumped on that rate-cutting bandwagon on, too, this morning. for the most part, they were not expecting that to happen, at least this month. because of the boj's governor that the recent comments that the two cuts we had last year were already accommodative and it was time for the government to act. so the cut this time is admitting that the economy is dragging its feet. >> remember, we talked about the

first quarter gdp growing 3.2% and we were saying, not bad given the situation, but some of the strong headline figures, we saw private consumption falling. some are now attributing this to the government. do know that this rate cut comes just two days after the south korean government national assembly gave a go ahead to the 17 trillion won of supplementary budget for that very goal. ross, back to you. >> all right, chery, thanks very much indeed for that. meanwhile, the bank of england is likely to hold off on expanding its qe rate decision later today. the gdp figure better than expected. this will be mervyn king's penultimate meeting before marvin carney takes over.

polls suggest a policy change won't happen until carney takes over. last month, the bank of england announced it's extending its findings to get more cash flowing through businesses early this morning. >> i think the funding for lending schemes is in the housing market. it hasn't been affected for lending. in terms of these general attempts to push money into the economy, i think there is knowledge that there are othes.s as we crank up these special measures, i'm not sure it helps with confidence. >> confidence is an issue. what would help with confidence?

>> the healing process has been going on since the financial crisis. if you look at other periods of deleveraging and bursting of bubbles, it's always taken a long time. and i think they're all impairment. but i think the other thing is financial markets. the and i think it's fair to say that the fantastic strains of equity markets will sort of allow corporate toes borrow better rates, allow them to tap the equity market and so on and so forth. and that is part of the central bank's policies. qe feeds directly into the economy -- >> are we going to get more qe in the uk or when carney comes in are we going to get -- we've got slightly more expanded funding. could they start buying other assets, doing other things? >> i don't think anybody is going to happen in terms of today's meeting and the next one, i think, to be honest, mervyn king is taped out. i have a slightly controversial view that, you know, karn flee got the job by being the candidate that had the sort of biggest balls, if you excuse the

expression. in other words, the one that was going to do the most. the aggressive proactive player. that was a few months ago. he's gone rather quiet since then. in fairness, you don't want to rain on mervin's parade. i have a feeling there's a bit of horse trading going on behind the scenes between him and osbourn. they know that if the economy doesn't arrive, doesn't revive in the next two years, it's a pretty short time taim table and they're going to be toast in the general election. so there is real pressure on osbourn. >> you think he'll raise the mandate? >> i just think what carney must be saying to osbourn is you want me to do something. at the moment, my mandate is an inflation target mandate only largely.

the expectations are at 278%. perhaps with commodity prices dropping a little bit, we can argue, as mervyn king did, the flexible inflation target. but he doesn't have a lot of room and if he did, he wants someone to hit the ball out of the park. >> stephen, we've got to get some data in. stay around. still to come, don't forget the bank of england decision at 12:00. we'll be back if a few moment.

an upswing in chinese room prices means less room for pboc to eat. more easy money, the bank of korea joins the liquidity fest. it's cut its benchmark rate now to a record low. the bank of england has reported new confidence in their new governor. earnings big assets helps pull it back in the black. but will a etn and growing smartphone sales help keep the tech drive possible?

plus, corporate bonds are better-than-expected earnings boosted by cable channels and a box of blockbuster. but the company's publishing business continues to be a drag on results. also in london today, louisa join us for more. what's going to happen here, louisa? >> hi, ross. it will be a super exciting day today, a whole host of people showing up. we have a number of global leaders, christine legarde, david cameron just arriving behind me. mr. cameron, what do you expect from today's conference? we tried. we knew that he was going to be

rushing inside. he was going to be talking to delegates inside. we are also going to be attending and listening in to how it is to invest and promote investments to continue to come into the uk, given that we're looking at such very low growth numbers recently. many people ta we saw first quarter gdp data better than expected. others are saying why are we celebrating which numbers are so low? remember the imf is saying the uk needs to become more flexible and maybe pull back on austerity measures. george osborne has laid out his plan. the issue is whether we need a plan b to spur growth and to spur jobs. ross. >> thanks so much for that. you'll see sterling spiking up

at the best levels of the day, not because david cameron just turned up at that conference, but because we've had more better than expected data. this time industrial production output up 0.7% in the month of march. it was forecast to be 0.2% and manufacturing output for march, 11.1% higher on the month versus forecast of 0.3, as well. so another bit of data. remember, this would be part of the -- part of the gdp numbers we had which are better than expected in the third quarter. steven, just a quick note. look, all the data in the last few weeks of the uk coming better than its spaces? >> not retail sales. >> that was the brp and that was through march in the gold weather and the underlying trend was okay. >> i think it's difficult to read too much into individual data. what we like to do -- >> no, that's what i'm saying, it's a trend. >> i like to look at what some of the corporates are saying. and if you look at stains bury's results that came out this week,

pretty good on earnings, pretty good on common sales. their forecast the rest of the year in 2014 was very muted. >> for retailers, they say the environment is tough, it's tricky. it's actually not. >> their guidance was lower than it had to be. you think the uk economy is corrugated up and down a lot bit. you can argue perhaps things are not quite as bad as they were a few months ago or a few weeks ago. spring weather and a few other seasonal factors.

>> is there a sentiment issue that's important? >> i don't think so. if you look at the international scene -- >> it will lead to investment. >> yes, over a period of time. that's the policy. if data in the eurozone is getting worse. that affects the uk economy. we are in europe geographical. >> thank goodness the numbers were better geographical. that is the key phrase. corporate news, british investment group old mutual has reported a 7% rise in investments. the company cited progress with its nigerian life insurance business, but in an exclusive interview on cnbc earlier, the group was still facing challenges in its uk market. the uk is still tough.

so if you look at the market statistics, retail sales are half of what they were in 2012. so the retail investment sales, you know, are still struggling in the uk. now, i think that is quite clearly the impact of regulation. they are coming through the turmoil that is going through the adviser market. the banks have pulled out of the adviser market. in my view, this is the bad side of regulation. >> as far as european stocks are concerned, after gains we've seen slightly softer today, off 0.1% for the ftse and the xetra dax. the cac 40 off 1% as well as the ftse mib, as well. keeping our eyes on spain, they're just concluded an auction up to 4.5 billion for three and five-year debt. yields in italy, meanwhile, 3.86%, very well contained. on the currency market, sterling spiking higher again on that production data. 1.5 580, coming back to 1.56.

might be a block there, but coming a long way off that 1.50 low. meanwhile, the ecb has weighed in with its monthly output saying there are downside risks to economic growth. the central bank said the eurozone should learn from japan's example on financial reform. despite that monthly bulletin, eu euro/dollar went to a session high. it did knock equity markets down to a session low. and an italian appeals court upheld the conviction of sylvia berlusconi on tax charges related to its company media set. the conviction comes at a four-year jail term and raises the possibility he could be banned from holding public office. what we want to know is is the party finally over for berlusconi or can he once again make a comeback? i presume he can have a -- whenever he likes.

e-mail us, worldwide -- i think we're talking figuratively. worldwide@cnbc.com. tweet as cnbcwex or direct to me, @rosswestgate. if you want to tweet kelly, that's fine. she's not here, she's gone back to the states. but tweet her, as well. the consumer electronics giant posted a net profit of $950 million and forecast another profit for this year. the earner from the nikkei has the story. more details from tokyo. hi, yukako. >> hi, ross. soapny saw a net profit of 43 billion yen crawling back into the black for the first time in five years. the weakening yen also helped in group sales grew by nearly 5% year on year to 6.8 trillion

yen. its main businesses, however, remain slow with both electronics and tv units still stuck in the red. however, for the current fiscal year, the electronics giant hopes to make profits in both businesses. sales are projected to increase by 10%. operating profit to stay flat and net profit up 16% to 50 billion yen. earlier this month, the company announced that all board members will return their bonuses at the ceo had promised a turn around in its electronics business when he took the helm a year ago. sony afounsed today that ex ceo howard stringer, currently chairman of the board and a former president will retire in june. that's all from nikkei business report. back to you, ross. >> okay. yukoka, thanks for that. operating profit jumped 23% to $218 million in the first quarter for rakuten.

the stock fell nearly 3% in the regular trading today, partly because of profit taking. rakuten shares saw more than 10% yesterday after deutsche securities upgraded the stock to a buy. joining us from hong kong, the managing director of and head of research at financial markets. ube, thanks very much indeed for joining us. what do you make of where we stand now? >> well, i don't know. if they -- if they could do as well with their smartphones as they do with their movies, i'm not really crazy about the company. i think they're obviously doing better as you can argue with their stock performance. they're up 80%. you know, the stock this year

alone. but on the whole, the company, i think, still has to get -- well, find its footing again. it's not back yet. >> is it -- is it as simple as they've got to make -- they've got to make some smartphones that people want to buy? is it all down to them getting a bigger smartphone sales? >> well, i mean, that seems to be the space that they're in and that they have to be in. there is, of course, the playstation stuff, playstation 4 coming out. you know, they have a variety of different products, but i think that unless they can increase their spending, research, if they don't make it there, it's

difficult to see how they're going to make it as a company overall and regain the position that they held. >> we also heard from rakmuten, this morning, as well. when do you make of the trend they're talking about? >> this is one of the companies we're very excited about. it's also a company whose ceo is one of the people who is advising prime minister abe very closely on the competitiveness council. they have done very, very well in almost every respect. it's a different kind of company. it's for japan, an unconventional company, the type of company that has to actually come more to the forefront in the japanese economy. and i think that's what's happening. so that company, that's a definite buy for us. >> okay. all right. thanks very much, indeed, for

that, joining us from the orient financial market. we have the spanish bond auction results out. they sold 1.8 billion euros over 2016 and 1.55 billion of the 2018. what is that? it's about 4.5 -- 4.25, isn't it? just about. perhaps not quite the full 4.5% they were looking for. no, sorry, they have got the 4.5% they were looking for. forgive me. there was a third issue there that i've missed. as far as yields are concerned, let's take a look at the maximum yield. the maximum yield on the three-year, 3.26%. 2.811% in april. on the five-year, 2.87%. it was 3.82% on april the 18th. it was the july 2026 that i missed earlier. there, the yield 4.3% versus

5.5% on january the 10th. so that long yield actually we saw yield coming down quite a lot. 11.20 basis points or more. steven, there we go. yields keep going lower. how much is it being helped by the fact that they're playing a far different political game with hopes about a change in political processes? >> i think there are two reasons. drajy gave us the bailout language last year and we're still seeing that follow through.

we all knew it was slightly unrealistic. so the pressure and the concern that some might be a moment are true is no longer there. we're in this benign environment where people are hunting for yield, anyway. there's no pressure any longer from the european commission or from the imf for that matter to actually do anything serious about financing. >> well, because they have there are numbers wrong. >> and in fairness to spain, their budgetary deficits are actually coming down. it's fairly slowly, but they are going in the right direction. there you are, that's the back drop.

>> meanwhile, more australians are on the job in april, working longer hours, too. unemployment was knock to 5.5% surprisingly given the jobless survey. in asia tomorrow, japanese earnings are set to steal the spotlig spotlight, panasonic, nissan are just a few of the companies reporting. and let's have an update on hong kong's growth. q1 gdp, as well. go away and sell in may, the mainland record highs this week,

find out why on cnbc.com. although the sell in may adage, it doesn't actually savior the sell on may the 1st or the end of may or anytime you like in the middle of may. it might still apply. you only know when to come back. plus, if you're lucky enough to own a ferrari, you'll be happy to hear the luxury carmaker is cutting production. the chairman says it wants to protect the exclusivity. some analysts say the real problem for ferrari is weak demand. catch the full story on our website, cnbc.com, or follow us on twitter, @cnbcworld. still to come on the show, oil prices are holding up, but the pick up is just a distraction. that's according to our next guest. we'll get into crude when we come back. ♪

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you're watching "worldwide exchange." >> shares of spain's biggest oil company announced a 47% jump in profit boosted by higher production and strong refinery margins. the earnings easily beat an average forecast. repsol said it was boosted by

oil and gas production outside its home country such as in brazil and russia. at the same time, you'll see brent today trading at 104.02. nymex at 96.30. spot gold slightly weaker, as well. bill atkins, good to see you. >> morning. >> yeah, so a bit of recent strength from where we were in oil prices. in fact, geopolitics, is that just the fact that it's risen slightly because equities have gone up, is it? >> there's a little bit of that, but i think the underlying fundamentals at that time to quite the reverse. the only situation is global oil demand growth is going to be less than it originally thought for 2013. and so that growth, about 40% of it is derived purely from china. so any signs that chinese overall economic growth might not be as strong as was first thought feeds through a course into low expectations for

overall demand growth. meanwhile, the u.s., the european union countries, japan, they have no oil demand growth at all. so we call the main outlook. on the production side, you were talking about repsol with higher production from brazil and russia. we've got higher production from the united states. we have higher production from canada. in opec, we've had more oil from iraq, higher than expected shipments from saudi arabia. so the picture here is sluggish demand, lots and lots of production, and short of a geopolitical intervention, it's hard to see how prices can sustain the levels they are now, at 105 or so for brent. i think they're going to go lower. >> the interesting aspect, as well, is how much the spread -- you know, forecast the spread between nymex and brent would widen a lot. in fact, top sit. >> there's slightly some special factors involved in that. when we talk about the brent price these days, we're using present as essentially the proxy for the international oil price if you look.

wti, the spread in august was $25 below brent at one point during 2012. what we've seen in 2013 is some of the infrastructure problems there are in the u.s., which has meant that it's very difficult to move crude oil around efficiently to get it from where it's been produced to where it needs to be refined, to more it's held in stocks, some of the stocks have been broken. you haven't got massive amounts of oil sitting in one place. so to some extent, the narrowing of the differential was predictable. but even thouso, the -- >> but what impact is shale going to have? >> shale is part of the overall growth story from the united states. and the issue will be if production continues to rise and if demand remains as sluggish as it is, it may well be that we start to see the differential between wti and brent start to widen out again to some extent. wti may go down a bit, but brent

is likely to go down, as well. again, lots and lots of production. more than expected from russia, from central asia. the big story i think is rapidly rising supply and demand growth not keeping up. >> also with the inventories in the u.s., record highs, as well. so, yeah, i think that's right. the sort of peak oil theory is being turned on its head, you know? >> completely inverse. we're talking about peak oil demand and u.s. oil demand peaked about seven or eight years ago, european demand peaked to about the same time. japanese oil demand has peaked and we're now looking at a situation where we are not going to be in a world of everlasting rapid growth in oil demand as far as the eye can see with a struggle to produce the oil to meet that demand. now we've got an end in sight, if you like, to a peak oil demand scenario unfolding. but loads of supply gushing out from all over the place. so you're quite right, we've now

inverted that wisdom from just a few years ago. >> thanks very much, indeed, for that. china just about oil and gas, the mdr pieces are going to hike gasoline and diesel prices by 95 yuan. got a view on that? put your mike back on. >> yeah. the price was hiked, wasn't it? >> yeah. hiking gasoline prices. >> this is the new system i think they've introduced quite recently in terms of having a more flexible adjustments to prices both up and down. and i think they're reflecting market realities rather more closely than before. demand in china, you know, the thing about chinese demand is we get situations where one set of monthly numbers looks bad or relatively weak. and the next month we get

another set of numbers which look relatively strong. yesterday, we were talking about high crude import figures for china in april, which everybody got excited about. but then you look at the overall picture from the year-to-date, january through april, it's not quite as strong as that. so there's conflicting signals and we'll have to wait and see how the picture evolves. >> thanks for that addition. >> no problem. meanwhile, wolfgang scheuble scheubl scheubler, francois hollande has been given two extra years to reach target demands. and ahead of the g-20 meeting this week, steve liesman will speak exclusively with u.s. treasury secretary jack lew on "worldwide exchange" tomorrow at 11:30. and a final thought now with stephen, as well. big question for investors,

stephen, is do you just -- whatever the reason for this rally, do you stick with it for now? >> the reasons for this rally are simply what the central banks are doing. and if you believe, as i do, that if anything there's more coming down the line, then i'm afraid you have to stick with this rally. the power of low interest rates, i'll give you one example. bp issued 3 billion worth of bonds this week. the five-year bonds were yielding less than 2%. the ten-year is less than 3%. yet its dividend is yielding around 5%. we used to be you go back even a few years, it's only for decades, texts revealed less than bonds because they had higher prospects for growth. now the dow has been turned on its head. that gap will be closed one way or the other. noe not by lower bond prices, but by higher equity prices. i'm afraid you've got to go with it. >> all right. fair enough. stephen, good to see you today.

thanks so much for joining us, stephen isaacs. >> thanks very much. earlier, we asked if the party over for berlusconi after an italian court upheld a prison sentence that could see him barred from politics. jp tweeted, berlusconi may be a thorn under the nails, but italian politics would be nothing without him. well, it would be quieter, i suppose. keep your opinions coming here on "worldwide exchange." e-mail, tweet. still to come on the program, british prime minister david cameron is due to speak in a matter of minutes at the global investors conference in london. we'll bring you his speech and pollen more.

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we're watching "worldwide exchange." a reminder of the headlines. an upswing in chinese food prices leaves less room for the pboc. there is even more easing money, the bank of korea adds to the global central bank's liquidity, saying its now cut its benchmark rates to record lows. the bank of england, though, will probably keep its holding pattern as recent data boosts confidence with a new government

beckoning, as well. and sony's new assets helped put it back in the black. but will a weaker yen and growing smartphone sales help keep the company profitable? for the company's soon to be final publishing business news corporation continues to be something of a lag. if you've just joined us, we have a look at the start of your trading day. we are slightly higher. -- no, slightly below fair value. the nasdaq is about 2 points below fair value, the s&p 500

about a quarter of a point below fair value. the ftse cnbc global 300, down about 0.1 is%. we had the s&p not far behind and european markets today are showing -- actually, completely back up, 0.4% yesterday. the dax closed up at a record high yesterday. 8/,237. the french market is down nearly % and the ftse mib is down 1%. the focus this morning has been on spain, another very solid auction. they raised 4.6 billion euros. they're looking for 4.5 across three issues. yields on those three issues, we have a three, a five and a bond in 2026. much lower than they were previously in april. so once again, yields coming lower in spain and this as a search for yield helping that down, plus the fact it's now part of this country at the moment is looking and having to ask for assistance.

so they're combining, helping to push yields lower. and in the currency market, it's a very pessimistic from the gdp. they had we got our outlook wrong. didn't really impact euro/dollar. 1.3154. dollar/yen, 98.73. and sterling, 1.5564. industrial production and manufacturing output for the month of march coming in stronger than expected. another piece of data uk, but better than expected. another reason why we don't expect any further action today from the bank of england. that's where we stand in european trade. let's bring in sixuan from singapore once again to update us on that asian session. sixuan. >> thank you, ross. it was a positive day for asian bourses in early trade. detracting the strong leads from wall street and ended the day in the red. markets in china and hong kong

reversed earlier gains in china's cpi data came in higher than forecast. lower producer prices lower with prices. lost 0.6% and the hang seng down a modest 0.1%. japan's nikkei 225 slipped from the five-year high ending down 0.7% on some profit taking. property developers took the brunt of the selling. but the stellar outperformer today is south korea. the kospi gained more than 1% after the bok jumped on the easing bandwagon, cutting rates for the first time in seven months. financial stocks were the biggest gainers, the gains between 2% to 5%. korean tech majors gained momentum on the prospects of a weaker currency. elsewhere in australia, the asx 200 ended ju just about flat because most all these banks are under pressure today.

the anz traded dipping nearly 3%. take a look at national australia bank down 2% despite reporting a 3% increase in cash profit in the fist half of this year. aes all from me. back to you. >> sixuan, thanks for that. david cameron is due to deliver the key note address of the conference in london any moment now. more than 300 business leaders and policymakers are attending the event, including the german finance minister wolfgang scheubler. as soon as he steps on to the podium and starts speaking, we will go there i am assured. so i am assuring you. china's inflation data is picking up at a faster than expected pace. cpi claimed 2.4%, a tad more than forecast. more worrying was the jump in food prices, up more than 4% in the month. way more than the 2.7% we had

back in march. ppi did pick up. let's get out to beijing. for more analysis, no better lady than other very own eunice yoon. hi, eunice. >> hi, ross. these are the people mainly on the ppi and the producer price index because they're so concerned about the steep decline. a lot of people were expecting us to see a fall of the ppi, 2.3%. but instead, we had basically a negative picture by 2.6%. so people were talking about how that really highlights the problems that we have here in the chinese economy with excess capacity, a lot of factories aren't really working too well, their inventory. and overall the demand hasn't been as strong as people had hoped. so that was one concern there. in terms of the consumer price index, people are focusing on prices. a lot of activity in investable prices there.

we saw prices ridesing in double digits in the month of april. a lot of that is because of the cold start to the year, but also because people were not eating as much meat product, mainly pork and chicken products because they were so concerned about bird flu as well as other concerns about foot food safety. >> okay, eunice, thanks very much indeed for that. that's the latest out of beijing and the chinese data, as well. we understand david cameron will start speaking in just a moment. if he does, we'll go to him. let's bring in hans reddeker from morgan stanley. and if the prime minister starts speaking, i will just cut in, so i wanted to let you know. looking at this chinese data, the aussie/dollar has become the leveraged play on china. in fact, the prime minister is coming up now, so hold that thought. we'll come back to you. >> thank you very much, steven, and good morning and welcome, everybody. absolutely great to have you back in london for this

investment conference. of course, last year we had the olympics. i'm afraid we haven't been able to put that all on for you again, but it's great you have to back. since that investment conference last year, there have been around 1,500 major investments into the uk and we want to keep up that pace of work. we have some great speakers here today and i'm proud of the fact that the debate about global investment is taking place here in london. now, today i could give you the standard speech of why you should invest in britain. it's easily done and every word of it is true. you can look at the natural advantages we have, english language, a very handy time zone between east and west, brilliant universities, the city of london, the rule of law, so important my colleague often says if you want to know how fair a country is to invest in,

ask how many times its government loses a court case. and i'm proud to say my government lose escort cases all the time because frustrating a bit as it sometimes can be. and the rule of law is one of the greatest valg advantages they can have. all the natural advantages to all the things this government has done to welcome business and investment. i think we are probably one of the most welcoming countries anywhere in the world. we're theory rowly relaxed about foreign investors investing in utilities, transport, nuclear power, and we pride ourselves on that openness. i would argue that this government has done almost everything that business have asked for. business wanted lowered corporate taxes and we have cut our rate of corporation tax down to 20%. business want their personal taxes. we've addressed that issue. business wanted our planning system reform. easier to build, easier to expand. we cut our planning guidance

from a thousand pages down to just 50. business said run more trade missions in the fastest countries in the world partnership personally led trade missions to every single g-20 country apart from argentina. but instead of making that speech, which is absolutely true, absolutely right, and easily made, i thought today instead i would just download, if you like, the five things at the top of my mind about how we get economic policy, how we get trade policy, how we get investment right. so less of a speech, more of a download. first, countries like britain should be absolutely clear about playing to our strengths. one of our strengths we should be clear about is finance and the city of lopped. and i think it's clear that this is an industry where we have a

massive international global advantage and we should be proud about that and speak up about that. that means that we shouldn't spend our time and policy endlessly bashing banks and institutions. we want the economy to recovery and you want the economy to grow, you have to play to your strength. i think these are two quite important things. we need to make clear to our european economy. ideas for a financial transaction tax, in any view, are not a good idea. introduced in the same way all over the world, this is a mistake for europe. and we will speak up very clearly about that issue. not just because we are a financial center here in britain, but we actually account for 30% of europe's financial services. this is an industry that serves not just britain, but serves europe. i think some european -- were

surprised that we were prepared to stand up and speak on bonuses and remuneration. so the first point, we should play to our strejts and stand up to those assets we have. second point, not in contradiction to that, but we should have and we do have a proper industrial policy here in britain. while our financial services are strong, we need to rebalance our economy and build up manufacturing, technology, aerospace, life sciences. to me, an industrial policy does not mean hitting winners or massive government intervention. it just means working out industry by industry what can government to help? what framework can we review

help to create? and just to give you a few examples where i think we're making progress, one is the car industry. we have massive investment taking place by toyota, nissan, wag war land rover. i'm very proud of that. government is right behind that industry. another example is the life sciences. we have an incredibly active strategy to help pharmaceutical businesses invest in britain. we are introducing the patent box so if you invent something here in britain and manufacture it here in britain, you will take a 10% rate on corporate industrial taxes. >> all right. the prime minister outlays the advantages of doing business in britain. it comes on the back of, again, slightly better than expected data.

sterling is up at the best levels of the day. hans rediker, thanks for pausing before you got started there. what do you think about the pound right now, bearing in mind the sort of data that we're having? >> well, the data are certainly improving and there is a cyclical complicate which has been supported for sterling. you have to make sure that you are seeing the anti-environment in the uk and that i think is still pointing towards a weaker

sterling. when you look at how much deleveraging has to be done here, it has taken place, but there's much more to do. that means the private sector and the fiscal side is going to create savings. and the banking sector is still running two big balance sheets and that means the lending site knot working very well. and in all circumstances, it's very clear that the uk does need the support from income from abroad and that actually requires a weak exchange rate. so i think it's currently running. we failed three times now to get a better level. the message which i've been given by the central bank earlier this year, namely in january where it was saying, okay, we have a flexible

interpretation of the inflation target, that left the market with the interpretation that rates are going to stay low for a longer period of time. so you know that real rates are a main sector driving. i think that statement was a clear manifestation that the monetary authority wanted a weaker exchange rate. .i think that the market is going to understand that very, very clear and the next move in sterling will be down. >> and stay there. we'll come back and talk about that and talk about texts rally. currency markets seem to but undecided about what to do. we've got coverage of the bank of england rate decision. it is at 12:00 london time is the rate decision. the program will start at 12:00 london time. in the united states, job

lts claims are out at 8:30. at 10:00 a.m., we get march wholesale trade figures. the philly fed president and richmond fed president both speak today. on the earnings front, look for amc networks, cablevision, dish network and priceline.com. there are only 111 chains to release monthly numbers. analysts say they could feel the impact of the falling temperatures in the last month. steve liesman will speak exclusively with u.s. treasury secretary jack lew here on "worldwide exchange" tomorrow at 11:30 cet, 5:30 eastern. the g-7 finance minister's meeting is taking place in london if you wonder why it's happening here. that's the reason. "worldwide exchange" continues in just a moment. it's lots of things. all waking up. connecting to the global phenomenon

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a recap of the headlines if you've just joined us today. china's food prices in april saying factories in are struggling with oversupply in weak demand. sony is back in the black posting a net profit for the first time in five years.

and news corp. beat estimates leading with its cable channels and entertainment unit. more australians were on the job in april. they were working longer hours, as well. more than 50,000 jobs were added, easily topping forecasts of just 12,000. the numbers were knocked unemployment to 557% level were a surprise, giving sluggish high services that we've seen. the data likes to curb potentially central bank deficits. hans redeker is still with us from morgan stanley. the aussie/dollar rallied. what do you make of the aussie? you don't particularly like it? >> no, actually, i dislike it. when you look at the funds into australia, there has been a substantial change taking place. so it was long regarded as the quasi china trade was supported, as well, by bond related flows, looking for a huge pick up in

australia. what you have seen as recently is that those flows have completely turned against the australian dollar. so this investment taking place. so in the third and in the fourth quarter last year, it was international bond investment in australia that was the second strongest inflow after the commodity related. so i guess that the turn around there is very strong indicative of the weakness in the australia dollar. both thinking about the changes taking place globally. two years ago, you would regard china as an opportunity and the united states as a risk. now markets are questioning if this is now not the other way around. is this now china and risk in the united states an opportunity. and i think that the ultimate result of this is u.s. dollar strength. it is going to be broad u.s. dollar strength against many currencies. now, you would rely, well, there

might be one exception. you see that the dollar renminbi is sharply lower, but that is part of china's strategy to rebalance its economy. it's a slow part of the strategy to curb of money inflows into the country. so china wanted to get desperately to a -- an exchange rate which prevents this hot money inflow. that means, as well, that credit in china is going to weaken, which is negative for the australian dollar. >> and you mentioned the u.s. dollar. what is interesting is we've seen this yield driven liquidity driven rally in engts. it doesn't appear to be risk on risk. the major cross rates in currencies are holding fairly steady at the moment. so how does this move get reflected, then, in currency

sales? what do they do? >> we actually think that the bond related flow which dominated the market for more than a full decade, that this bond related flow is declining. it's going to about be replaced by an equity related flow. according to that, you have to trade the fx market. i think when it comes to the fdi and equity related flow, you have to look at where is specific industries have been overcapacity crazed. before we were talking about the australian dollar. there's a clear indication there that the mining industry has built up over substantial capacity. but when it comes to an equity and fdi flow in the past, it always used to be hugely supported for the u.s. dollar. i just remind you, '96 to 2000, that was a high tech environment. it wa an equity related environment. it did lead to a huge overperformance of the equity environment. the u.s. dollar was a start in

the fx market. >> fair enough. good to talk to you. thanks. maybe here is an argument for a slightly weaker euro. yen's -- the ecb is saying the central bank can take further action. this was in a report. they must be aware the risk for negative real rates, but also suggesting that low rates are no permanent solution, but the outlook has dimmed price pressure has eased and it is right for monetary policy to be expansive. and that may just -- the euro is slightly weaker as we get those comments coming through, as well. even from the bundes bank, the ecb and more importantly from the bundes bank saying effectively that the outlook has dimmed those right for monetary policy to be expansive.

and the ecb can take further action. meanwhile, jpmorgan is putting out the help wanted signs. the bank is looking for more directors to serve on its risk committee. this is amid calls by changes for its corporate governs. it could include marketing experts. separately, jpmorgan says it received a wells notice from the federal regulatory commission in march. this means it could face an enforcement action over bidding practices in certain markets. the fdrc had found evidence the bank manipulated trading in the california and michigan electricity markets. jpmorgan in frankfurt just offer marginally. and microsoft has named amy hood as its new cfo. she's currently the head of finance for the company's office division. she'll replace peter cline who announced his departure last month. she's the first woman to hold the cfo job. microsoft acquisition ves skyped and business networking company

yammer. her appointment is seen as a surprise. teammy with a potential front runner. microsoft stock down 0.5% in frankfurt. and jeff skilling could be a free man sooner rather than later. the former enron ceo will be resentenced next month after striking a deal wednesday to shorten his current prison term from the current 24 years to between 17 and 14 years. skilling has agreed to drop the appeal of his 2006 conviction on 19 counts of securities fraud, conspiracy, insider trading and lie to go prosecutors. skilling has been in prison since december 2006 with good behavior. we reckon he might be released in 2018. an italian appeals court has upheld the conviction of is sylvia berlusconi. this raises the possibility he could be banned from holding public office.

so we're asking today, is the party finally over for berlusconi or can he once again make a come back? keep your responses coming here on "worldwide exchange." e-mail us, worldwide@cnbc.com or tweet, @cnbcwex or direct to me, @rosswestgate. reforming the mortgage market remainses one of the few unfinished pieces of business. we'll talk to a former executive at lending giant fannie mae, next. we went out and asked people a simple question:

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you're watching "worldwide exchange." a recap of the headlines, an upswing in chinese food prices means less room for cpes, supplying weak demand in mainland factories. more easy money from the bank of korea. they've joined the central bank liquidity trend. they've cut their benchmark rate to a record low. recent data improved confidence and a new government beckons. the big asset sell-off helps sony get back in the black. will a weaker yen and growing smartphone sales help keep the

tech giant profitable? news corp. had better-than-expected earnings, boosted by its favorite channeles and a box office blockbuster. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. >> all right. if you've just tuned in stateside, welcome, a very good morning to you. we had another record close to the s&p and the dow last night. right now, futures are indicating a slightly more muted start. we have just below fair value for the s&p. not by much, about a point, 11.7 points. the nasdaq is currently trading 5 points blow fair value and 4 points below fair value for the dow. the ftse cnbc global 300 is down at the session low at the time moment, off 8 points. as far as european stocks were concerned, the xetra dax closed at a record high. again last night, right now,

it's just up 16 poivents. the ftse 100 is at the best ever results since 2007. again, better data today out of the uk. manufacturing output, industrial production for march coming in better than expected, continues to run in better than expected data for the uk. so we expect no change in policy today from the bank of england. the ftse mib down 11%. the cac 40 down 1%. we did get again low auctions for spain and raised more than expected. across lower yields across the board of that auction. that hunt for yield and the high equity prices helping once again auctions doing better in the peripheral in europe. so, what are investors to do at this particular moment? here is a recap 06 what some are saying on cnbc today. >> the rate cut earlier this week and, really, what matters here is that in those countries around europe is the weakness in the economy going through, all the central banks the coming

rate we're expecting to see some further weakness in those currencies. >> the defiance in the banks like lloyd's, rbs as you mentioned has still a bit of catching up. you get the call option for very cheap and almost the freedom and it's those types of outliers and optionlties and we're actually looking for. >> backed up by a company that can give you an inflation hedge, that has cash in the bank. while we're here, it might be a month to stay away. on a thee-year yield, i will tell you not to be in cash, i would tell he to be in financial assets.

>> meanwhile, freddie mac posted the second biggest quarterly profit in its history boosted by the rebounding housing market. both companies received government advances in 20308. $108 billion in taxpayer aid. it has less than that in the urgency that congress felt to wind them down. edward pinto chief credit officer in the 1980s, he's now a fellow at the american institute in washington. a very good morning to you. thanks for joining us. back with the recovery recover is sort of gathering steam and these guys are now profitable, does that mean we're less likely to get reform? is it less needed?

>> it's no less needed, but it's perhaps less likely. it requires some action by congress, and it's going to be difficult because there are two different visions for the housing market. one would call for privatizing the market. the united states has one of the most socialized housing finance markets in the world today. over 90% of all mortgage credit is guaranteed by the federal government. and it's been that way for a number of years now. on the other hand, there are those that want to keep the government's role fairly large, in particular to push an affordable housing agenda, which is what got us into the problem in the first place going back about 20 years. so it's a very fracturus issue in the united states.ious issue in the united states. >> the government has the

mortgages or we haven't actually dealt with at some point in the future we might have to bail them out again? >> right now, they have over $5 trillion in obligations, which is over half of all the outstanding mortgages. there are other entities in the united states that guarantee large parts of the mortgage market in the united states. the problem is that lending with the government involvement gets poe lit sized and that's what happened in the '90s and the early ott years. and there's a push for that to happen again. we're seeing it in stories and comments that are being made. "the washington post" had an article a month or so ago about the push to have the federal housing administration, another arm of the government, have lenders expand to the full extent of their credit box which goes down to loans that failed about a 1 to 4 rate, which is

terrible. there's also a push to have fannie and freddie expand and fulfill what's called their affordable housing mission. and these are all things that potentially would return the market to the -- some of the go-go practices that brought it down and brought fannie and freddie down. it's hard to see right now, but it was also very hard to see back in 1992 and 1993 when the seeds for the future problems were sewn. >> when people look at a problem at the moment, they say, look, the design flaw is we socialize the risk and privatize the profits. how would you restructure this? and actually, should you be -- i know it's -- should you be pushing mortgages, affordable homes for those who can't -- that really can't afford them? >> that's the problem. there's been a push in the united states for many years to

put people in homes they can't afford. what i think needs to be done is three things. one is the insurance premiums that fannie and freddie charge need to continue going up. but at the same time, congress needs to lower their loan limits. right now, they can ensure loans in certain areas that are over $600,000. the average house in the united states sells for about $180,000. and finally, they should be restricted to making very, very high quality loans, which by and large they're doing today. but the push will be coming in the next few years, i would expect, for them to start loosening their underwriting standards. there are calls today for that to happen. and if those three things were to take place in the private sector, bringing in private capital, would be able to push that 85% to 90% government involvement down further to, perhaps, 60%, 50%, eventually

bring it down to where it needs to be, which is 25% to 30%. >> edward, good to speak to you this morning. thanks very much indeed for joining us. >> thank you. still to come, some companies made in the usa isn't just a marketing tag line. it's also good business sense. we look at which american base res generating more revenue from stateside helping them outperform the s&p 500. [ driver ] today, my ambulance knew all about a bike accident, just by talking to a helmet.

it grabbed the patient's record before we even picked him up. it found out the doctor we needed was at st. anne's. wiggle your toes. and it got his okay on treatment from miles away. it even pulled strings with the stoplights. my ambulance talks with smoke alarms and pilots and stadiums. but, of course, it's a good listener too. [ female announcer ] today cisco is connecting the internet of everything. so everything works like never before. i want to make things more secure.

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what do we know about business in the u.s. versus the rest of the world? there's only one person that can do that for you. sima joins us from the united states. >> listen up, thompson rights has compiled a list of stocks that generate revenue in the united states. they're calling it the sold in the usa portfolio. the serve in the usa is outperforming the s&p. it beat the s&p 500 by a 115% to 20% margin.

what are the names ta made up this list? the biggest companies by market cap include at&t, wells fargo, verizon, altria and cvs caremark. apple only gets about 39% of its revenue from the united states. in terms of sectors, financials, telecom services and utilities made the list. these sectors are known for their high dividends and have been on a tear this year as investor, of course, hunt for yield. thompson reuters says there are several reasons why these stocks remain popular. europe is still in recession and china's economy is slowing. and earnings for the united states focus companies may be seen by investors as less volatile. >> all right. we'll see what happens from there. seema, thanks for that. jpmorgan is pulling out the help wanted sign. "the wall street journal" reports the bank is looking for more directors to serve on its

risk committee amid calls by investors for changes to its corporate governance. it could include audit and marketing experts. separately, a notice from the federal regulatory commission meeting in march and this means it could face an enforcement action over bidding practices in certain markets. last week, the new york reported there was evidence the bank manipulated trading in the california michigan electricity market. jpmorgan traid chase stock down 0.2% in frankfurt. microsoft has named amy hood as its new ceo. she'll replace peter cline who announced his departure last month. she's the first woman to hold the cfo job to help oversee microsoft's acquisition of skype as well as yammer. her appointment was something of a surprise. the cfo microsoft windows unit

was a potential front-runner. microsoft stocks up 0.5% in frankfurt. and a reminder of the headlines, as well, today, china food prices fell in april. bank prices are struggling with pride over weak demand. sony crawls back into the black posting a net profit for the first time in five years. and news corporate sees wall street expectations boosted by growth at its cable channels, as well as its entertainment unit. we'll take a closer look at the news corp. when we come back. plus, find out why analysts are going mad as we preview the well out later today. ♪

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addressing the future of finance in the 21st century. we have extended programming today in europe for the bank of england's rate decision. we'll have more on that when we get there. meanwhile, european stocks are up slightly. pretty flat, driesly, for the xetra dax. the ftse mib and the cac 40 down around 1%. we had a monthly bid from the ecb which got its output forecast wrong. the governing council came out and saying there was room to do more if we need to. meanwhile, china's inflation is picking up at a faster than expected pace. cpi climbed 2.4% in april. but more worry is the jump in food prices. it was up 4% in april. that's a lot more than 2.7% rise we had in march. on the other hand, ppi did drop

2.6%. this is a view of chinese factories are grappling with excess capacity because of the weak demand. on the dow and the s&p again last night, we are called slightly lower at the open at the moment. not by much. in other words, all to play for. as far as the earnings are concerned today, groupon reported a narrow first quarter loss as revenue raised a better than expected 7% due to strong performance in north america. weakness overseas, especially in europe. around 45% of groupon's north american transactions now from mobile devices. the board fired the ceo in february and has formed a special committee to find a new chief executive officer. shares did just 10% in after hours. they're up 40% since mason was ousted. also, toyota motors reported its first ever quarterly prot in fact company's ten-year history.

trouncing analyst forecasts. the electric carmaker delivered nearly 5,000 modelf sedans in the first quarter. it will deliver nearly 21,000 vehicles this year, 5% more than previously stated. tesla auto recently launched a deal that could make a model "s" more affordable. shares up after hours, currently up nearly 16% in frankfurt. and news corp.'s third quarter profit tripled beating forecasts. the company's network saw profits around 15%. especially from american idol. the publishing unit which includes the round of house posted sharply lower results. that division is still due to be spun off by the end of june. the stock up 3% in after hours. and the cable and entertainment group amc networks

has picked up the earnings before the u.s. open today, as well. sheena, good to see you. thanks for joining us. what's your own view of what you heard from news corp. today? >> well, i think what we said, the overall results were slightly better than expected. they had some weak spotses as we alluded to with fox network, the australian division, but other than that, i think the cable network, which is where the company generates two-thirds of its outall earnings, businesses continue to outperform expectations, fox news, fx channel, international fox network, etcetera, i think they've been able to consolidate a lot of the off-balance sheet assets that they have and i think that overall we were generally pleased. >> yeah. they still say, you know, their publishing spin-off is on track to be completed next month. do they need to provide more clarity on the longer term strategy and what they're doing

with their capital? >> well, i think that, yes, they did confirm that they're on track to spin it off with a shareholder vote early next month. i think a lot of questions around will actually come up when you have an investor day. you know, for the new publishing company later this month. but i already think that investors really know what to expect in terms of, you know, you've guided entertainment in the operations, which are much faster growth and the publishing business, again, has a lot of secular issues. we saw that in the earnings results again. clearly, you've got a growth and kind of another business in decline. so the bifurcation in business model is going to become more opperant to investors after the spin-off. and the other issue there is the capital allocation in terms of how much debt the new publishing company is going to have. i think they need some filings to address that issue, as well. >> and a steady rise in the stock has sort of gone with the market up 21% this year.

hat this price, what would you do with it? >> well, we're still recommending a buy on the shares. which we reiterated after the earnings. and a lot of the rally that you have seen actually has to do with unlocking the value in the publishing, which i would argue a lot of that is already baked into the current price action. but beyond that, the businesses, the fundamentals of the company have continued to seem strong, as i said earlier. so, you know, the company has paid a relative ly lower dividend. they've got most of $9 billion cash on the balance sheet. yesterday they said they would continue to buy back shares as they are committed to investors. what are you expecting from amc? >> well, amc also would have a -- frankly, this has been a

spectacular investment story since the spin-off. amc i think should have pretty strong results, margin expansion. talking dead, returning to ratings. they're returning to greater ratings. and i think they've been able to monetize that in the advertisement affiliate front. and all the networks like the wu tv, ifc, all of those house very, very -- you know, very busy developments. so that is why you see, you know, the rally in the shares that are so dramatic since the spinoff. >> thanks for that. have a good day there in new york. now, besides amc, other things to focus on the u.s. agenda today, we've got weekly jobless

claims out at 8:30 eastern. forecast to rise 11,000. kelly will be tuned into that. there she is. at 10:00 a.m., we get march wholesale trade figures. and on the earnings front, besides the amc networks, look out for dish network and priceline.com, as well. and retailers report april same-store sales with their only 11 chains still release monthly numbers. and just a reminder, a number of the world's business leaders and policymakers are in london today. moments ago, british prime minister david cameron delivered the key note address. he suggested the british government had done almost everything that business asked for. we've been asking, do you agree? one of our viewers said cameron has done everything he could. and he's done that. so we'll take a break here.

the u.s. view of "squawk box" gets under way in just a moment.

stocks continue to rally to record highs yesterday as some of the world's most powerful hedge fund managers unveil their latest investment ideas at the conference. and in global news, chinese economic data raising a few red flags again this morning. it's thursday, may 9th, 2013. "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. we've been fachg the future and after another big day of gains and records, you can see this morning futures are mixed. right now, dow futures up by 7 or 8 points above fair value. s&p futures are down, but by less than half a point. the nasdaq and the s&p are on five-day winning streaks. the dow industriales and transports both closed at record highs once again yesterday. on today's economic agenda, we have weekly jobless claims due out at 8:30 eastern time. we've been watching the jobs numbers. the jobs numbers last week were better than expected. for this morning's numbers, first time filings likely rose by 11,000 to 335,000 in the latest week. also on the calendar today, you have wholesale trade coming up at 9:00 eastern time. meantime, some of the nation's retailers will be reporting their sales.