you're watching "worldwide exchange." i'm ross westgate. the headlines, the last day of trade for the quarter and first half of european stocks on shakier ground than asian wall street where the dow logged its best three-day winning streak in three months. unemployment, reportedly fighting over the terms of the opec sale.

it is another privatization program. what's happened in turkish markets is nothing but a hiccup. >> announcer: you're watching "worldwide exchange" bringing you business news from around the globe. we kick off with a look. we're weighted to the upside. could be four days of gains right now. 7 to 3 advancers outpace decliners. june, the first down month in 12 for european equities. as far as breakdown is concerned, slim gains is probably the way to put it. the ftse 100 after being up 1.3%, a third high, 0.2 high of the xetra dex.

treasury prices gained. treasury yields at the moment lower, 2.46%. yielding 2.4 is and spanish, we hit 5.1, just below that, we still keep our eyes on commodities. persian gold being down a three-year low and hilt a low of one point of 1180. back over the 1200 mark. we'll talk about this precious metal later in the program. brent is just up around 103. far less impacted as far as oil markets are concerned. on the currency market, seen dollar continue to rise against the yen just shy of the '99 mark. the aussie dollarer is weaker. all fans keeping their eyes on australia as they attempt to win the series and that's where we

stand in european trade. joining us with the update of the final trading session for the first half of the year in asia here we have an update. >> most asian markets wrapped it up in the green. nikkei is ending higher by 3.5% thanks to strong industrial production and inflation data while quarter and window dressing might have helped the rally. although the index dropped about 14% from its 5 1/2 year high reached in late may it has chalked up an over 30% gain year to date. stronger u.s. dollar against the yen boosted japanese exporters. panasonic jumped 6.7% after raising $1.4 billion to repay its debt and sharp soared over 8%. meanwhile, market jitters calmed a bit in china after the pboc

chief said they'll maintain prudent policy and use flexible tools to manage the liquidity. merchants bank had a strong showing gaining 6.2% and properly developers outperformed. will relax financing rules. but gold miners lost shares. speaking of the mining sector, alwa kingsgate tumbled by 7% after the company expect a $300 million write-off over challenger gold mine. and b hchhp led in the red. >> we'll catch you later. joining us for the first part the managing partner of founder of park square. good to see you.

we were ending this month of june and this half, of course, with massive confusion over, well, not confusion, i don't think there's much confusion. people have reinterpreted the fed and a couple speakers yesterday that said we are data dependent but have seen a push-up in bond yields and a blowout in credit, as well. how do you work out where we are right now? >> sure, ross. i think this is basically just a little bit of an injection of reality on the part of the fed, there was an underlying recognition by the fed that the unintended consequences created by this massive easing that's gone on now for year, these unintended consequences have been very severe. in the high yield market we saw the single b index tighten to inside of 5% meaning for junk

bonds, the yield they were getting was less than 5%. on the single b index the definition of a single b bond is one that has about a 36% chance of defaulting over a ten-year time horizon so investors had lost sight of the underlying fundamentals. this most recent warning shot across the bow to investors has pushed spreads back up from 5% to about 7%. in our view that's just the beginning and expect to see a lot more carnage in the high yield market. >> just the beginning. but the carnage not necessarily coming in the next few months. >> no, not necessarily in the next few months, i think the precise timing is difficult to call. from a fundamental value perspective, junior credit is not really a spread business that as these bonds were quoted as spreads to ten-year

treasuries or ten-year boons, we believe an incorrect way to view the risk/return trade-off. this is somewhere between equity returns and debt returns should be priced accordingly and if you take a long-term perspective looking back 25, 26 years in the high yield market, the appropriate return should be more 10%, 11%, 1% and so we still have a long way to go. >> good example, bank of ireland bonds, the last time they issued them, the yield -- you were quoted saying investors would get thshellacked. >> almost unfair to fixed income investors. the zero interest rate environment we were in was forcing pension funds and pensioners to move out the risk curve looking down the barrel of the fed's gun and saying, dance. investors, you have to move out

the risk spectrum to get any yield pickup whatsoever and created an extremely dangerous situation for investors who are unintended victims. >> you call it unintended. wasn't that the whole point of qe was to float all boats. wasn't this the entire point of how it was supposed to work when you do it on a large scale and focus, you know, on the assets they focused on. >> on a large scale i think that's right. the consequences were deliberate to force risk back into the system, to force risk taking on the part of companies. unfortunately, the unintended consequence is for pensioners especially it's very difficult to get yields that they need to make the pension system viable and the result is a global search for yield where the big money is resident which is really in the pension funds. >> and in corporates there's been this push for corporates to

return cash is income rather than necessarily reinvest. i mean you look at the p/e ratios and they have buy-backs and dividends, a lot higher than those investing i suppose which is not necessarily what they wanted. robin, stick around. more to come from you. brussels, eu leaders arriving for the next part of their summit. plenty to come on today's show, turkish finance ministers told cnbc it's business as usual despite recent protests. we have a guest from eastern bull with that interview. cairo, ahead of planned demonstrations. and as brazil battles its own case of popular unrest we'll hear from a former secretary of the national treasury on whether the government can stave off an investor shock. dr. joachim levy will be here with us at 10:40 cet.

gold prices down again. how low can the precious metal go? hsbc's charlie morris will be with us in around an hour. before that, down 5 1/2% in shanghai after the u.s. justice department accused china's biggest of stealing software from the american firm amsc. the indictment alleges it was taken through to china. it was then allegedly exported back to the states and a u.s. attorney said nothing short of a corporate homicide which apparently robbed them of $800 million. meanwhile, chip starnes is now back home. arrived at newark released after settling a pay dispute with

workers. in an interview with cnbc he says there is a dirty underside to doing business in china and upset the chinese government did nothing to help the situation. >> i felt like i was an animal in the cage getting peanuts thrown at them. be happy living here with everybody in the same cage and work it out and having, you know, them having open access to me 24 hours a day and the first 2 1/2 days being brutally to tortuous and no one seeming to care. >> he's done business in china for over 20 years and despite his ordeal he said going back to china is a must. >> going back to china is a must, you know. i've been there for ten years. we've got millions of dollars of equipment there. we've got a large investment

there, so we've got to see it through and make some decisions and figure it out. at the end of the day, i said several times pretty optimistic guy. any bad situation you got to figure out how to make the good out of it. the good out of this one is i'm out. now i have the ability to meet with my team and my partners and figure out the resolution of how to move things forward and that's exactly what we'll do. >> asked about his next move he'll be back in the office today signing new contracts with people who want to come back and work at the company's plant in china. all right, still to come, turkish finance ministers said they don't expect to settle from the assets to continue much. we'll have more from that interview right after this. i want to make things more secure.

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widespread protests in turkey have taken 15% of the stock exchange by may. barton in an exclusive interview with cnbc the country's finance minister says it is business as usual. hadley has been speaking to them and joins us from instand bull. hadley. >> reporter: they're keen to

tell me it is business as usual in istanbul. we're going on as everything as if nothing has happened but i think that the most important thing i got out of this, you know, i was asking him about the l lira. the central bank had to intervene and there's a significant rise in borrowing costs, a major problem for them. i asked the finance minister if this is a permanent damage to the economy. >> market reaction or market volatility is partially attributable to the political unrest but is largely attributed to the fed's change in, you know, policy direction. or at least a change in authority so one has to really, difficult to decompose the impact but it's very clear that political unrest is the reason why. having said that, our basic

analogy is now that the political rest has subsided and ee s.ally come to an end chances of permanent damage is very low, but the risk from fed policy change is meaningful. >> how confident are you about hitting that 4% growth target? >> clearly 4% growth was on the basis of certain assumptions, include i including not a meaningful recovery in eurozone but obviously not banking on a deep recession so eurozone is still a wild card for us. but looking at the first quarter, first half numbers we still think we'll be close to 4% so 4% is still plausible. still achievable but clearly there are some downside risks both in terms of fed policy as

well as the relatively deeper eurozone recession. >> reporter: what's happened in turkey increased borrowing costs. you need 160 billion of u.s. over the next 12 months. what plans are in place to address this issue? >> in every democracy, you occasionally get problems. you know, look at brazil. i mean some other issues but you still have similar issues. you know, you sometimes experience that in the u.s. in the uk, et cetera, so we do have issues, we'll sort them out. now, as far as investors are concerned, from our perspective, it's business as usual in the sense that we will continue to implement structural reforms. we will continue to implement sound macro economic policies. we'll stick to fiscal discipline, sound monetary policy. we continue to communicate with the investors. we'll continue to improve investment climate in this country. this country has very strong long-term prospects. we do have a rough spot and

that's the deficit. we've been managing debt. we have a lot of structural reforms in place already, but there are no quick fixes. we are looking the a long-term solution. >> reporter: if that foreign cash flow dries up, what is the plan to deal with the current account deficit? >> well, we've accumulated a lot of reserves so those are for these type of days. so what's first. secondly as you know we do have a flexible policy framework. we have a flexible exchange rate regime but also we usually allow prices to adjust. thirdly, we do have a strong fiscal position, that gives us some room for whatever, meaning we've got some fiscal room to play around if needed to support the economy. fourthly, clearly, i think the long-term prospects matter. you know, despite as i said the hiccup of the past few weeks and despite, you know, the relatively less favorable global

backdrop in terms of global liquidity, we still think that turkish economy has a lot of building resilience. >> good interview, hadley. what else is going on? i understand that the government has been challenging twitter and facebook to try and calm things down. >> reporter: well, basically, ross, what i'm hearing from the finance minister is twitter and facebook will continue to go on as normal. there will be no security clampdown on them, per se but the government has asked twitter for some security information on the people they say are fringe groups, the people they say was causing trouble as well as facebook and this speaks to a larger issue which is what the erdogan government is doing. a man about to run for president in 2014 now looking like he's in the pit fighting amongst even people within his own country because you also have the government going after these local conglomerates like coming

holding and guaranty bank owned by the doje group. you have the government on the defensive giving international investors cause for pause. >> hadley, good stuff. president obama says he sees mandela as a hero. whether they are able to meet or not it would serve largely as a tribute to the souformer south african president. joining us from pretoria, career simmons. >> reporter: president obama is expected here tonight and whether or not he will visit nelson mandela in the hospital is an open question. one of his daughters gave an

interview where she seemeded open to the possibility but hasn't received any formal request and would need to get the doctor's okay for it to happen. we do know that president obama will visit robben island where, of course, nelson mandela was imprisoned for 27 years but whether or not he will come here is still an open question. his doctors continue to describe nelson mandela as critical. there was some good news yesterday in news that he was looking a little better. some of his families saying that he was responsive when they attempted to talk to him and there were really happy scenes out here in the street outside the hospital, perhaps a thousand people dancing and singing nelson mandela's name but the president's office says nelson mandela is still critical. >> thanks very much for that. that's the latest from pretoria. care keir simmons. 8 billion euros over the

next two years and speaking in the early hours of the morning, ministers outline measures to help small and medium-size businesses. joining us from peter spiegel, brussels bureau chief at "the financial times." if you follow him on twitter, you've been tweeting saying we can see your new crappy haircut live on cnbc. what's wrong with it? it looks okay to me. >> apparently my belgian hair guy works for the u.s. marine corps and decided to just take shears to it. >> we have tweeted it looks much nicer today so it's okay. >> thank you, thank you. >> it's all right. >> away from the important news of your haircut, peter, what's the biggest takeaway from the summit? >> it's sort of the dog that didn't bark. there is some movement on this youth unemployment. 8 billion euro, sounds like a lot but it's a drop in the bucket. this was supposed to be the

summit where we made progress on further integration of the euro. and frankly because of the german elections in two, three months, angela merkel doesn't want anything to do with it. they don't want to rock the boat. the social democrats are hitting her hard on her role in europe so basically everything we thought would happen at the summit was taken off the table, the draft, sort of leaked conclusions we've seen already, says we'll get back to it in october, after december. pushing it off the elections. we tried to push chancellor merkel on it but she denies it's the case but every senior leader said we can't do anything for the next to or three months. we have to wait till it gets over before we do anything on that. >> what might happen after the election then? >> well, i mean there's two or three things we have to watch for, one is this idea of the bank bailout mechanism. you know the commission here in brussels wants to create a

centr centralized bailout fund that can reach into national financial systems and shut down banks, force losses on creditors and equity holders and even depositors in some cases. they want a more decentralized and network of auditor -- of regulators, resolution authorities than a central body. that's going to be a big fight coming up in autumn but the real one that has gone away that i think a lot are nervous about because the markets have been quiet is this idea of a fiscal union, turning the eurozone into a federal system that is a properly functioning monetary union. remember, these were the hot topics a year ago when spain was about to go over the cliff. there's a bit of complacency setting in that we don't have to do these hard choices of transferring authority, transferring sovereignty interest/centralized authority in brussels. i think depending on how things go in greece, italy, we're probably going to have to address these again in six

months. there's a lot of nervousness here that we're not addressing these things. they will move back to the table. >> all right, peter, good stuff. thanks for that. peter spiegel at "the financial times." a good haircut, peter. don't worry about it. it's okay. give him confidence. there he was tweeting about it earlier. let's bring you back in robin doumar. let's talk about the banks. trying to get banking resolutions and we failed spectacularly to separate them from sovereign debt so far and that was a year ago that political leaders said they would do that. we still haven't done it. how much of a problem are banks in at the moment? how much pressure are they in. >> the banks continue to be under a continue amount of pressure in europe. eu regulators under basel iii are increasing it from 2% to 7% over the next several years and that's putting enormous pressure

on banks to both shrink their balance sheets and raise common equity. at the same time, the risk weighting of the assets, which regulators are forcing on banks is making the burden for risk capital to small businesses even higher, more burdensome for the banks. the regulatory capital charge is 150%, whereas it's 40% or 50% or italian or spanish sovereign debt and so it's forcing the banks to shift asset as way from lending and into buying. >> and as we know, you know, banks provide a vast majority of credit in europe. does that mean now alternative sources of financing are starting to make headway? >> it does and means that the alternative capital providers need to play an important and increasing role in europe. and this is the fundamental trend that we see taking place similar to what's happened in the u.s. >> the problem with that is, of course, at the same time brussels is talking about

clamping down on what it calls secondary banking. >> it has. it's a paradox. so, for example, the new eu regulations on clos make it virtually impossible right now to form new clos in europe. we saw a few form since the credit crisis and that trend has been nipped in the bud by additional eu regulation and so what really needs to happen is long only forms of capital formed to properly institutionalize the lenning markets. >> all right, we've got one more thought from you, robin. i want to read it about greece scrambling to save another deal to privatize its state gaming -- according to reports, "financial times" said a key bit of opac. it could see them fall below 1 billion euros, well short of the target for privatization revenue

set by international lenders. shares in opac amongst the -- among topap. there was a risk, you know, from the euro. investors would have been hard pushed to put any money into greece. do you think we are comfortable that it isn't going to happen or whatever space you're investing in? >> investors are now view the likelihood of a greek exit as extremely low. i think there is an increasing realization that actual economic performance in greece is much, much more difficult than originally envisioned that the greek economy is literally on its knees. and the result of that is a number of the promises that were made by greece in terms of privatization look very unlikely to be fulfilled and i think what we're seeing is again just expectation management issues in terms of what's been promised by

greece. these are going to be enormously difficult transactions to get done given the current state of the greek economic situation. >> good to have you today. thank you very much for joining us. robin doumar. though japan battled deflation and the cpi stopped falling, yep, stopped falling first time in seven months, a roundup of that data. the first edition of our sectornomics. >> here's what to look for in the tech sector in the quarter ahead. lots of rumors to move stocks when it comes to large screens from the likes of sharp or samsung could head to apple or others. look to back to school numbers in pcs, a chance for intel and microsoft to show the initial numbers can be turned around. finally we have tablets for the holiday season.

expect in september new ipads, iphones and kindles. that's your sectornomic. ♪ 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. ♪

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and these are the headlines from around the globe.

last day of trade and european stocks are on shaky ground. dow logged its best three-day winning streak in 11 months. leaders agree to fight youth unemployment standing above 50% in spain and greece as another program in athens looks to be in danger with them fighting over the terms of the opap sale reportedly. the u.s. catches wind of ip theft. it accused sinovel. we've been speaking to the turkish finance minister and told cnbc what happened recently in turkish markets is nothing but a hiccup. the ons says services output

was up 0.2% compared with march when it was flat and was 2% higher than in april last year. the sector makes up three-quarters of the british economy so any signs of momentum in that will be fairly positive, of course, first quarter gdp when we get it through and had a revision yesterday which did two things, showed not only did we not have a triple dip, we didn't have a double dip but the initial downfurnish was much steeper than previously thought. edging down 1.5239. it was up in the june peak. european equities, we are flat at the moment. did open up a little bit higher when we looked at this half an hour or so trying to make it four days of gain, a little caution setting in on the last trading day of the week. the composite in greece is doing

better, up 1.5% despite problems with the latest privatization. now, indian oil and gas companies have rallied after the government approved a doubling in domestic natural gas prices from next april. let's get more. s sonia shenoy is there with that. >> reporter: that's the big story. the government after a period of three years has gone ahead and doubled natural gas prices from 4.2 dollars earlier now to 8.4 dollars for mmbtu. it opens up a lot of opportunities for investment into various sectors like fertilizer, power, et cetera, remember the gas prices in india kept very low for strategic industries like fertilizer and power and that really deterred investments into this particular -- these particular sectors so it will help in terms of improving the investment situation, not just that because

oil imports will go down now. remember, the production will go up significantly for gas prices rising so we won't have to import that much oil and that will help reduce our current prices as well. it has ea positive impact and will boost revenues for ongc oil. ongs believes there could be an addition of 8,000 crude oil -- because of the hike of $4 a barrel. a sentiment positive for the oil and gas space all in all particularly for names like ongc. back to you. >> sonia, thanks, have a good weekend. more signs of improvement from the japanese economy. they posted a strong 2% gain in may. cpi also stopped falling for the

first time in seven months. pretty good news for japan battling deflation for two decades but analysts say there is still some way to go after the bank of japan can hit its 2% inflation target. joining us from hong kong. steven schwartz. thanks for joining us. how confident are you that the turnaround in japan is real and sustainable? >> well, we're confident that the economy is picking up. we've seen growth indicators and as you pointed out, the cpi indicators are turning in the right direction through most of this year and particularly after the april 4th announcement of the aggressive easing by the bank of japan and expect this pickup in momentum to continue for full year growth of 1.7% but still a long road ahead and we have mixed signals because we haven't seen investment picking up quite yet so we're watching

for that but signs are with improving business confidence that should not be too far behind. >> i mean there's a good chance presumably if inflation is still considering to be well short of the 2% target. if that continues to be the case at some point do you think the bank of japan might step up even their purchases from what they've announced? >> well, we our severals do not expect japan to hit that 2% inflation target any time soon, probably beyond the time horizon that the bank of japan is aiming for. they've had 15 years of entrenched deflation so it's really an uphill battle. whether they step further on that gas pedal and expand more remains to be seen. we do not expect that in the near term. i mean, their announcement on april 4th was very large, exceeded expectations by a very wide margin so we think it'll be steady as she goes but i want to highlight a couple of risks to

the strategy that still need to be addressed. first the third arrow, structural reform agenda, the most critical thing for unlocking growth and achieving the aims of this new government. the second is medium-term fiscal consolidation, investors know that these things are important. they're given the benefit of the doubt right now to the government but we expect those -- that third arrow and the fiscal consolidation to fall into place and if it doesn't, there are clear risks to this strategy going forward. >> yeah, and, of course, that's what everybody is looking for. stephen, meanwhile the nikkei up 30 odd% for the first part of this year and, look, there's been an expectation among investors that at some pot japanese investors would start putting money abroad. if the nikkei continues, i wonder whether they might prefer to bring their money home and invest in the equity market and get a much better return than

anywhere else. >> yeah, yeah, good point and i think the data is bearing that out actually. we've seen net in flows into japan. we've seen sales of bonds by japanese residents repatriating that money, some of it's going into the stock market. foreign investors seem to be selling japanese bonds and either exiting the country altogether or as you say putting money into the equity market so there's a lot of portfolio shifts going on and it appears that the nikkei is once again on a rise after that very severe sell-off of the past month. >> stephen, good stuff. thank you for that. stephen schwartz, chief economist from hong kong. thanks to the slew of sturdy skwapz data. head to cnbc.com where analysts say robust numbers show the government's policies are working and the recovery isn't losing steam. and you saw the performance for the first half.

the nikkei up to a one-month high boosted by the economic data but it was an unlikely group that led the pack. we have more from sachiko kishida. they were rising for a third consecutive trading day. the electronics giant sold 60% of its holdings in other areas. though sales are set to be about 1. billion and the company uses the money to repay its debt. under the struggling electronicsmaker, it jumped 8%. the company said it plans to tighten up with the major electronics firm and investors welcome the news as an attempt by sharp to expand profit but keeping capital investment under control.

chipmaker renaissance electronics also rose 3.4% after deciding to terminate most of its lossmaking opportunities in india and finland and china at the end of the year. the company will now concentrate resources on its main business operation such as automotive chips. back to you. >> sashika, thanks. have a great weekend. not looking so upbeat in south korea. fourth drop in five months, economists were looking for 0.9% jump. iron lick the weak data comes a day after the government raised its gdp forecast to 2.7%. and there have been more reassuring words from china's central bank. governor -- the governor today promised that the pboc would ininsure ample liquidity and keep lending rates stable. this is the central bank's chief first public comments since the

panic run in china's money markets last week when bank rates jumped as much as 28% because of a cash crunch and the pboc's refusal to ease the tightening supply and analysts say they want to send a clear message to financial institutions to shape up their credit practices and curb excessive lending. as far as the agenda in asia monday, bank of japan's survey, a pretty big day to do it. taiwan, south korea, india and indonesia. a recap and an analysis of all that. meanwhile, the vatican probe has increased. the vatican's finances are being investigated. a prelate broker and member of italy's secret service were arrested following an order from the public prosecutor's office in rome.

same time, the church of england joined a consortium to bid for 353 rbs branches. according to "the financial times" the church commissioners have agreed to become an investor in a consortium lined up by the former standard charter chairman lord davis. rbs must sell the branches under the terms of its 2008 bailout. so we want to know what would you expect from an ethical bank if that's indeed what they set up? join the conversation on "worldwide exchange," get in touch with us, e-mail us, world worldwide@cnbc.com. while we mull that, protesters are looking at the federations cup. we have dr. joachim levy and ceo of asset management.

egypt is bracing itself for mass protests to mark the first anniversary of mohamed morsi's

presidency. two have died in clashes. yousef is in cairo speaking to some of the key members. yousef? >> reporter: ross, good to see you. make no mistake when it comes to the tranquility in the background this is the most serious threat to the government of mohamed morsi and that could result in violence and in clashes. we've already seen some of those examples in the last few days and taken our position, our usual spot of 400 meters away from tahrir square. we could see clashes and protests and more escalated situation where you have a lot of violence and clashes and that will either force the government to make a move or would force the military to react in response to the situation. so that is a little bit of a wild card. the economy is in tatters. it's unable to really deal with the political disarray, expect

economic growth to be about 2% this year, far from enough to deal with the growing number of jobs that are needed and the growth that's needed to recover from the damage that has been caused over the last 2 1/2 years. last time things got violent the stock exchange closed and i spoke to the minister of investment and asked him whether he was worried about this weekend. >> i actually not worried on the securing of the investment. i have agreed with his excellency, the minister of interior about full security model that we will be outlining over the security -- over the industrial and the free zones across egypt and i can assure all investors in egypt their business will be 100% secure along with hot line with the ministry of investment that will be available 24 by 7 with any problem that we'll be having that businesses that they will be calling us and will be available 24 b/7.

>> reporter: it dropped from 6 billion before the revolution to about 300,000 at the moment. ambitious to turn it around to 4 billion to 5 billion within the next fiscal year. where are the opportunities exactly? >> we are having 120 projects, 20 major projects we are having something goes by the swiss canal, the mining triangle in the red sea like the one that we've bidded for yesterday in suez canal before the developers like the 250,000 acres in the canal for agricultural like the two major power stations in prchlt rina and for producing around 4 gig of power supply. a lot of projects that the bigger -- the big 20 megaprojects equivalent to 60

billion u.s. dollars. >> reporter: now, all of the gauges here are really sending out alarm signals. egyptian pound has depreciated 9.3%. foreign reserves are pretty much depleted and stock exchange lost significant value over the last few weeks. those default swaps are widening. we'll keep a close eye on it but that's all from here for now. ♪ yep, 5,000 protesters have been clashing outside a football stadium hosting a confederations cup match between spain and italy. police responded with tear gas in the latest. just ahead of the 2014 world cup. brazil's central bank has slashed growth forecast to 2.7% from an earlier estimate of

3.1%. the bank has also raised its inflation outlook to 6% signaling a fresh rate hike might be in the cards. so far this year they have raised its bench mark twice to reach 8% as inflation has crept in. this after cutting rates to an all-time low. so what is the investment outlook for brazil at this point? joining us is dr. joachim levy, former secretary of the national treasury of brazil. good to see you. >> good morning. >> thanks for joining us. now, we arrive at a time where we've seen a lot of liquidity out of all emerging markets, brazil, south africa, everybody has been caught up in this. how many more bumps in the road do you think there are going to be in this phase? >> well, we have to see how the road toward normality in the u.s. and in the developed world really goes on and if we see all

these spikes like we saw last couple of weeks in interest rates in the u.s., it's normal to see also some withdrawals in emerging markets, so it will depend a lot on how this normalization happens in the u.s. i think the important thing is that in brazil we are prepared for that. you know that price as you move, that's natural, that's part of the framework. as you mentioned, the central bank is ahead of the curve. it started to get in a more defensive mode since the beginning of the year first because of inflation fears, because of unemployment so at some point the central bank has to step in and also because it is perceived the world landscape was also changing. >> it's been the volatility in exchange rate. only a year ago the government was complaining about the weakening dollar and the strength of the real and here we are with the real vastly weaker.

how are you persuading people to say, look, you want to put money into brazil when we're getting huge volume hit, not necessarily brazil's fault. >> the volatility is the fact that last year the world situation is one that we had to take measures to respond to that environment, now the environment is a different one and taking the adequate measures there. the reason to invest in brazil, the fundamentals are still there. you still have an economy that is bringing a number of people to the middle class and out of poverty. if you look at the last ten years, it would be like 30 million people. mind you, it's like half of the population of the uk. like taking half of the britons out of poverty in the middle class and spending and so on so and the companies so service this parke are there and many of them are now listed so that it creates a very broad market to invest. >> the interesting thing is a lot of investment in brazil has

still been in fixed income. are we going to see even under your funds, are we going to see a greater development of equity in brazil? >> yes, and also in the fixed income started to see a change which is out of government bonds and more in corporate debt and as you continue on the road to price stability and so on we start to see corporate debt that gets longer maturity, now you have the prospects of bonds for infrastructure, so it'll be like 15-year bond with the returns of, say, inflation plus 8, inflation plus 5 so, yeah, the landscape is changing. >> are you getting any questions about what's going on with the disturbances around the confederation cup and world cup in the olympics. big events for brazil. >> well, i'd say with the world cup that the business model of football has changed and the one that fifa and i think most of the developed worlds around the

country is one of a today yum that is expensive to go and so, yeah, there are questions why to spend something that actually most people will continue to watch the games from tv. the olympics i think is different. i think the olympics, the focus on the legacy is also stronger. >> good to see you. thanks very much indeed. joachim levy, good to talk to you. sorry we're out of time. still to come on the program, we'll be talking to hsbc's charlie morris. what is going to happen to gold? where is it heading after being below $1200 an ounce overnight today. second hour of "worldwide exchange" continues. ♪ [ agent smith ] i've found software that intrigues me. it appears it's an agent of good.

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this is "worldwide exchange." a recap of the headlines. last day of trade for the quarter and the half. european stocks have been trying to gain some ground. a little shakier than asia and wall street where the dow loggeded its best three-day win streak in three months. leaders try to fight youth unemployment standing above 50% in spain and greece. this is another privatization program by athens looks to be in danger fighting over the terms of the opap sale. the u.s. is caught wind of ip theft accused china's sinovel

of stealing software and robbing an american firm of hundreds of millions in revenue. plus making the list, checking it twice, of course, president obama is drawing up a short list of candidates to replace the fed chairman ben bernanke. if you've just joined us stateside welcome to the start of your global trading day. things just turned around a little bit for european equities, we were up, we're now down. you have a short while ago advancers being outpaced by decliners. right now after gains they point to an upward start. the nasdaq is around 9 presenoi around fair market value and

yesterday had a gain of 10 point, as well for the s&p. the ftse and cmc global is up 17. a little mixed for european equities at this particular juncture as well. the ftse yesterday up 1.3%. now flat. see whether we can have four days of gains. xetra dax down three. the ftse mib is down 103 up three-quarters of 1%. bond markets, well, we'll keep our eyes on treasuries, 2. 5% roughly is where we stand. monday, we hit 2.66%, the highest since august of 2011 and saw treasuries gain after a fairly good seven-year debt sale. ten-year, 10.238. better numbers suggesting we've had a fairly good second quarter in the uk. spanish yields nudging higher. 4.81%. keep our eyes on commodities, of course, as well.

really the focus has been on gold. you can see at the moment, 1202 is where we stand down to around 1180 as well which is the low for around three years but trying to tick up during the session and talk more about gold in a few moments. on the currency market, 98.93, the yen and euro dollar has bounced up off that 1.28 to be at 1.3051 currently. we'll recap what happened in asia on the last trading session of the half. li sixuan has the report. >> the stellar outperformer ending by 3.5% thanks to strong industrial production and inflation data. while some quarter and window dressing might have also helped

the rally. although the index dropped 14% from its 5 1/2-year high reached in late may it has chalked up 30% gain year to date. a stronger u.s. dollar against the yen boosted japanese exporters. panasonic shares jumped 6.7% today after raising $1.4 billion to repay its debt. and sharp soared over 8%. meanwhile, market jitters also calmed a bit in china after the pboc chief said the central bank will maintain prudent monetary policy and use flexible tools to manage liquidity. midsize lenders such as merchants bank had a strong showing, shares gained 6.2% today and property developers also outperformed on news that beijing will relax financing rules for some real estate firms and vanke jumped over 8%. gold miners lost ground with gold shares tanking over 4%. speaking of the mining sector,

australian resources stock lost. kin kingsgate tumbled by 7% after the company expects a $300 million write-off against its challenger goal mine and fortescue and bhp billiton also ended in the red. >> thanks for that. that's where we stand at the moment. views from hsbc global asset management. good to see you. let's pick up with gold. all right. it's extraordinary. let's recap some of the performances, worst quarter since 1968, down 25% in the april to june period or 15% since the fed statement. >> yes. >> what happens now? i mean presumably all the speculative money has gone out? >> unfortunately, it's not even close. >> really? >> not even close. where should we start? what gold loves more than

anything, the relationship with the stock market, beating it generally speaking that's a good thing. you know, it's a safe haven if you like. real interest rates falling, that tends to be good. and i suppose the final thing is the dollar. is the dollar rising or falling. most would agree the dollar is in some sort of bull market and all three factors have turned negative quite savagely over the last six months so i think that's the case. we are in a gold bear market. as we said today, the prices are incredibly oversold. whatever measure you care to choose, we don't see it this low very often, two or three times in 30, 0 years. the case for a short-term bounce is there but levels in a big way but the 180 was the first retracement level. that ought to mean something for a ten-year bull market to retrace to and it's come trait through that. the only explanation i can come

up is short-term panic selling and very much the speculators coming out but i think it might be coming from china because these wealth management products we've heard much about, there was a story in "the wall street journal's" very recently saying someone invested in gold and other precious items and given they have to -- exhaust liquid assets by the end of the quarter. you can see why there's been a rush. >> okay, so if we've only just started how much lower can it go? >> as i said in the short term it's oversold. >> but longer term. >> there have been five bear markets in gold since 1970. since the modern era of free market pricing in the gold market and of those, the average was down by 48%. and so this market is not at 48% yet. that would take us below a thousand dollars. around a thousand. and the average time that have would take us into about october this year so it's 112 weeks, 50% of correction. approximately is the average situation. now, we've had the second

biggest bull market of all time so the biggest was the second half of the '70s, that correction was 65%. so i think that, you know, it is a very speculative asset and takes a long time. >> has been the biggest danger here, the biggest problem for gold been that everybody was viewing gold as an alternative currency. everybody assumed all this easing was going to be inflation and debase the dollar and actually the biggest problem that hasn't proven to be the case. >> no, it hasn't but i think, you know, gold will live to fight another battle in a few years' time. it's not over. this is a bear market and it will bottom at some point and it will go back into a bull market. i think the case is long-term gold matches inflation. that is the simple story. and so, you know, a basket of goods cost the same amount in gold over time and so it really is protection and, of course, we always measure it in dollars but if you were living in venezuela or something where the currency isn't worth very much, this doesn't register and you still have real wealth.

that's the whole point of this story. >> okay. all right, meanwhile, this sell-off in gold a talking point when lloyd blankfein spoke to our own maria, this is what he said. >> gold has its moment when people lose all confidence in all currencies and other places to store value and also when interest rates are very low so that gold is relatively cheap to hold compared to where they can have their alternatives. as people get more confidence in the currencies and as rates start to rally it's not a very favorable market for gold. >> that is the -- you touched on, as well, his point that when rates are incredibly low and no yield in anything, the cost of owning gold is pretty negligible but if you think that turns then the cost of owning gold doesn't yield anything, it becomes higher. >> sure, and, of course, the impact is different depending on the price you have to pay for it, for $250 gold was incredibly cheap. people who didn't like it would ago knowledge it was cheap.

$1900 clearly wasn't. hard assets. oil, house prices or what have you and really we've only just started to come back towards fair value now so 1200 or so against the basket of stuff we're about there but it's not cheap? no, gold along with everything else, of course, being tainted by the dollar which was dictated by what we think is going to happen to treasury yields so which is dictated by views of the fed so, look, i mean we saw treasury yields back up 2.66%. do you think that's a peak for the moment? what do you think is going to happen in this market? >> me like everyone else this is the big question. i wish i knew the answer to that. you know, the bond market really has been the biggest conundrum. i went into this year and saw inflation in march thinking expectations have come too high and bought conventional and really inflation did fall, dropped back a stone yet the markets turned anyway. i think most of us were scared of inflation to kill the bond

parke but actually it's been something else and not entirely clear what that is yet. i think it will come out in the next few months why we're seeing this. tapering has been the excuse. all that selling pressure for something that won't happen for a long time. >> seems odd the market, you know, just because the fed said we might start easing the -- easing back on the easing and they've immediately tried to jump to the end game which is, you know, which is two years down the road. >> i think the other point you mentioned earlier was about the speculators, where are they? so the futures market was long 30 million ounces at the peak and it is now long from memory 5 million or 4 million. they're not negative. the futures market is not short. in 1999 when we had the big gold squeeze, you know, the market from plus 10 million to minus 9 million so we had a shortage in nearly the same as the previous proceeding long position so

today that would mean 35 million ounces to sell to have the equivalent impact. the etfs started at nothing in 2003 and grew to 85 billion ounces, now down to 65. not much gold gone from places an the world when they're looking and saying why aren't i owning the s&p instead this thing is killing me so you can see there is an awful lot of gold that could be sold before the bear market has ended but i do reiterate that at this moment in time if i were a day trader which i'm not i wouldn't be selling on this day. >> charlie, always good to see you. charlie morris from hsbc global asset management. president obama is reportedly a short list of candidates to replace ben bernanke expected to step down when his term ends in january. treasury secretary jack lew is running the search. possible candidates may include fed vice chair janice yellen, timothy geithner and larry

summers and alan blinder and roger ferguson. reports just the white house has spoken with the senate about identifying a nominee to begin the vetting process you about the president may wait until the full to make a selection. meanwhile, reminder what's on the agenda today stateside. final reading on june consumer sentiment due out at 9:55 eastern. 10:00, the june chicago pmi and four fed officials are speaking point economy and monetary official, fed governor jeremy stein, jeffrey lacker, cleveland's sandra pianalto and john williams. that will all be very important, plus, blackberry reports results before the opening bell as does the shaw group and retailer finish line. we're going into break. before we do so here's another edition of our sectornomices.

here's what to watch for. the fundamentals for oil are bearish. the u.s. has a record level of supply and that supply may only grow as global demand for oil and refined products slows down. with oil prices under pressure, gasoline price fears may fall by the wayside only to perhaps reappear as we head into the middle of hurricane season. drivers should be weary prices can vary widely depending on where you live. meanwhile, natural gas prices could slide if temperatures are below normal. reducing air-conditioning usage and therefore cooling demand. energy prices can be just as fickle as the weather. that's your third quarter energy sector nomm sectornomices. i'm sharon epperson. im up. it found out the doctor we needed was at st. anne's. wiggle your toes. [ driver ] and it got his okay on treatment from miles away.

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if you just joined us a recap of the headlines. final trading session for the quarter. european stocks fail to follow wall street's rally. eu leaders pledge to fight youth unemployment and boost lending. and the white house reportedly draws up a short list for fed chairman bernanke's successor. okay, eu leaders have agreed to increase the budget to fight youth unemployment to 8 billion

euros over the next two years. speaking in the early hours after a night of talks ministers also outlined measures to help small and medium-size businesses. earlier yesterday policymakers ended mondss of disagreement over the budget agreeing to spend 970 billion euros between 2014 to 2020. greece meanwhile, is scrambling to save a near 700 million euro deal to privatize its state gaming monopoly. this according to reports. "the financial times" said a key bidder for opap was threatening to change the terms of the deal last month. failure to sell it could see fall below 1 billion euros. that figure would be well short of the 2.6 that was targeted for privatization revenues set by international lenders. shares of opap among the biggest losers, sharply lower around 4%. meanwhile, during the eu summit the german chancellor

angela merkel added her voice over anglo irish bank. executives were caught on tape joking about a bailout deal and mocking germany. she said the actions damage democracy and were hard to stomach for working people. and the vatican probe has escalated. italian police arrested three suspects as part of an investigation into the vatican bank's tie to allegations of money laundering. officials said a prelate broker and a member of italy's sequans service were amongst those arrested following an order from the public prosecutor's office in rome. staying with the church, the church of england, it's joined a consortium of financers to bid for branchs that belong to rbs. the church commissioners have agreed to become an investor by

mervin davis. the news raises the prospect of a new ethical bank coming to the high street so we've been asking you today, if there was an ethical bank what would you want from it? join the conversation on "worldwide exchange." get in touch with us through e-mail. tweet us also. time for musical festivals. can they make money? london's olympic park. our next guest, chairman of hard rock international says yes. i want to make things more secure. [ whirring ] [ dog barks ] i want to treat more dogs. ♪ our business needs more cases. [ male announcer ] where do you want to take your business? i need help selling art. [ male announcer ] from broadband to web hosting to mobile apps, small business solutions from at&t

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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. ♪ now, sold out in one hour and 40 minutes and for the 135,000 ticket holders the wait is over. the green fields of glastonbury are open. if you fancy firmer ground hard rock calling is the headline of london's outdoor concert scene. this weekend, bruce springsteen will take to the stage in the first music festival to be held at the olympic park in east london. that's since, of course, the olympics. joining us is jim allen, chairman of hard rock

international. jim, thanks for joining us. this is -- after the paralympics the olympic park has been closed. this is the first thing going on there. >> we're very excited obviously. >> your main business is hotels and cafes, of course, so where does hosting music festivals fit in. >> the brand is synonymous with music. when we think about this event, hard rock calling our eighth year of doing it in london, a great brand positioning for the hard rock brand been around for over 40 years starting in london back in 1971. >> yeah, i remember up in the cues, the cues down piccadilly. >> they're still there today. >> well, still going on. look, how are you developing the brand now? you've got new hotel properties that you're launching daytona beach, abu dhabi and china, as well. >> we look at the brand based into a couple of category, the original cafe, hotels and

casinos and certainly the cafes are still the foundation blocks of the brand but when we see the brand growing from a ebitda standpoint it has tremendous traction for us. >> are you rolling those out? are you managing them or rolling them out in a franchise -- >> hotels and ka seen no -- casinos, majority equity holder. cafes, 50% is franchise operation so as we look forward to the future there, the global footprint will probably be more franchise based interest a financial viewpoint. >> yeah, and, look, we're measuring the sort of global economy. how do you find the hard rock consumer at the moment in terms of the amount they're spend had gone they visit you? >> certainly we're coming off a three-year run that's been amazing but the first quarter we have seen some peaks and valleys. we're seeing great foot traffic but frankly we are seeing some

reduction in spend specifically on the retail and merchandise side. so in february frankly was a rough month specifically out of the u.s. operations, but on a global basis it's more about what crisis are we dealing with? one of the nice things about the brand the ability to obviously if there's something challenged in one part of the world there's usually another part where things are rebounding and doing well. >> you mentioned merchandising. how big a part of that when people -- >> the cafe business, that can be excess of 35%. >> okay. that's pretty meaty. >> so certainly the goal is certainly the amazing food we've been offering forego over 40 years but the conversion to retail merchandise, go in an airport and see someone without a hard rock shirt. >> when you've got the concert this weekend, of course, you're trying to retie in the merchandise back into that. >> yeah, but it's also a business opportunity for us because what we find is a lot of our global partners from all over the world come in and we do a lot of strategic sessions just learning how we can expand the brand in other parts of the

world. >> the thing you're looking forward to most. >> bruce springsteen and the e street band. i'm from new jersey. >> enjoy the weekend. he literally just got off the plane. still to come, back berry reports first quarter reports in 90 minutes. investors wondering whether their new phones are a hit or miss. a look at futures ahead of the open on wall street. we are indicated higher, once again this morning.

. this is "worldwide exchange," i'm ross westgate. last day of the quarter and the half. the dow logged its best three-day winning streak in 11 months. the greek market doing better despite another privatization program that could be in danger with bidders reportedly fighting over the terms of the opap sale. and the u.s. is caught wind of ip theft and accused china sinovel of stealing software and robbing an american firm of hundreds of millions in revenue. plus, making a list, checking it twice, reports say

president obama is drawing up a short list of candidates to replace the fed chairman ben bernanke. and if you're just tuning in welcome to the start of your global trading day, the last trading day of the first half of the year and after 114-point gain for the dow yesterday we are caught up higher at the moment, the dow is currently some, what, 43 points above fair value. the nasdaq is about 11 points above fair value, the s&p with a near stand, european equities have been a little mixed. ftse is up about a third of 1%. show you where we stand with the european stocks. ftse had gains up 0.2. xetra dax, both have been flat.

ftse mib is down a third and cac 40 down, as well. also, of course, had lots of viewpoints on what investors should do as they begin to seize up or size up even the second half of the year. here's a recap of what they've been telling us. >> recommending clients with the euro dollar, however, against some of the commodity currencies so the aussie, the kiwi, think the dollar could sell off. and that's really driven by the outlook of the global economy in particular for china. >> we haven't had the capitulation in emerging markets or gold or in u.s. high yield, we think it's to come, spain, italy is very vulnerable. all of the eurozone equity

markets including southern europe and european credit is vulnerable in july. >> really going to take that risk of a 50%, 60% high difficult send stock correction down the line when we have to stop the sim lust so i think that's exactly the question people are asking. you've got to look at your own investment requirements. if you can't afford to take that amount of equity risk this is a great time to jump off into those yields. >> blackberry reports results at 7:00 eastern. revenue of 3.4 billion and the big focus though is going to be on shipments of the new 10 and q-10 smartphones. joining us is david garrity. quarter of shipments to the u.s. how do you think they'll stack

up? >> well, i think in terms of expectations, anything that comes in north of 3.5 million shipments for the blackberry 10 devices will be well received by the market. on the other side, though, if we look at a contraction on the subscriber base which has been set at 75 million currently if they can hold on to those subscribers i think overall the market may be encouraged but one thing to bear in mind, ross, is that the setup for blackberry going into this trade promises to bring us some early fireworks for july 4th, namely 36% of the float is sold short currently so to the extent that their numbers come in to the high side you could see a significant spike in the shares preopen today. >> i mean they're already up 15% so far this year so has their fear that it's saved the company. >> i don't know that they can necessarily say they've saved the company but crossed the

chasm for blackberry 10. obviously there's a great deal of doubt as to what the long-term success of blackberry 10 devices will be for a number of reasons. first and foremost you have a trend to consider which has been called bring your own device to work. enterprise customers, the historic core for their business have been saying to their employers, you know, whatever device you have, come, bring it to work. we don't need to spend money on the device and if we can integrate it the fundamental past rational for having the blackberry devices in the enterprise gueoes away. >> i mean the q10 seems to be getting -- the we saw last month alluding to this, suggesting they'll shift away from hardware sales and into software and other streams. messenger could be available in apple and android phones. what do you make of that? >> certainly, you know, it's a recognition of the reality and

how it's impacted their overall business but the thing to also focus on, even though they say they'll shift into software and services, you have seen the company actually account their pricing earlier this year in this critical high margin recurring revenue area. and so from that standpoint even though they say, yes, we will become device agnostic there is a question as to how readily it is that enterprise customer also say, fine, this is a solution we'd go with rather than go with other providers. >> yeah, what do they need in terms of hardware sales -- is there a point where they come to -- if we don't get substantial hardware sales we give up on this space? >> well, i would argue, i mean, you can say you give up on blackberry as a stock. i mean obviously it's something that's trading at 165 times this year's fiscal earnings of approximately 10 cents a share isn't cheap by anyone's stretch of the imagination and from that standpoint if we don't see, you know, strong uptick going into

the august and november quarters, if we see that these low purchase intentions that are seen in the uk, less than 2% of consumers based upon google trend data, if we don't see anything start to pick up there, obviously you do have to say that this stock isn't something that should be held long but quite the opposite. >> good to see you this morning. see what happens later. david garrity. nike's profits are up which beat forecasts on high sales of shoes and apparel. margins expanded for the second straight quarter. they're forecasting first quarter results that meet analysts' estimates. sales will be helped by the world cup in brazil. the company warned that sales in china will drop in the first half of fiscal 2014. nike stock down 2% after hours and off 1. %. president obama is making his way to south africa today hoping to visit nelson mandela in hospital. the president has said he sees

mandela has a hero. officials say whether they are able to meet or not, his trip would serve largely as a tribute to the former south african president. nbc's keir simmons is in pretoria with the latest. what is mr. mandela's position described as at the moment? >> reporter: hey, ross, good morning. nelson mandela's condition is still described as critical. president obama arrives here in south africa this evening to be honest whether or not he sees nelson mandela in the hospital behind me here is an open question. what some family members seem open to the idea but have said it might be up to doctors to say whether or not it is okay. president obama has met nelson mandela before. back in 2005 when he was a senator but he has never met him while he has been president, but clearly nelson mandela is still in a critical condition.

there were some jubilant scenes here. you can probably see the crowd behind me growing. yesterday it grew to some thousand strong because, well, partly because of news that nelson mandela was -- seems a little better. some family members saying that he is responsive had they talk to him, that he looks better than he has. at the same time, he is still in a critical condition, ross? >> okay, keir, thanks very much for that. the latest from pretoria with nbc's keir simmons. other stories we're looking at today on cnbc.com. how did the region's indices perform? you can find their score card online. plus, emerging market currencies have taken a bit of a beating since concerns first arose. head to our website to discover which currency is now the most likely to bear the impact of the tapering tantrum. don't forget, of course, follow us on twitter @cnbcworld.

safe and sound, the american businessman held by workers is back on u.s. soil. his thoughts on his ordeal and whether he still plans on doing business in china. "worldwide exchange" continues after this. ñ

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shares down in trade of sinovel. this is after the u.s. justice department has accused the wind turbine maker, china's biggest, of stealing software from the american firm asmc. it is alleged they were taken from computers in wisconsin to china. it was exported back to the states and what a u.s. attorney said is nothing short of attempted corporate homicide which robbed amsc of more than $800 million. there has been a happy ending to another story that sounds like ail hollywood movie. chip starnes, the u.s. businessman held captive for a week, by workers at his company's plant in china is now back home on american soil. bertha has more for us from hq stateside. hi, bertha. >> ross, this has been one surreal drama that has played out. chip starnes arrived at newark airport in new jersey thursday

evening ending seven days of really bizarre captivity. the 42-year-old was released earlier in the day after settling a pay dispute with the workers at his plant in the suburbs of beijing. in an exclusive interview with cnbc he says there is a dirty underside to doing business in china and he is upset the chinese government did nothing to help or resolve the situation. >> i felt like i was, you know, an animal in the zoo sort of like you throw the peanuts at the guy in the cage, say, hey, you're fine. you know, you're getting food every single day. be happy living with everybody in the same cage and just work it out and having, you know, them having open access to me 24 hours a day, seven day a week and first 2 1/2 days being brutally tortuous and no one seeming to care. >> yeah, it was very strange to witness and doing live shots from behind his barred windows

starnes is the president of florida based specialty medical supplies. despite his ordeal says he's going back to china and it is a must. >> going back to china is a must. you know, i've been there for ten years, we've got millions of dollars of equipment there. we've got large investment there and so we've got to see it through and we've got to make some decisions to figure it out. at the end of the day, like i said several times, pretty optimistic guy. any bad situation you got to figure out how to make the good out of it. the good out this one is i'm out. now i have the ability to meet with my team and my partners and figure out the resolution of how to move things forward. that's exactly what we'll do. >> that's optimism indeed. asked about his next move starnes says he'll be back in the office today seeping new contracts with folks who actually want to come back and work at the company's plant in

china. i would imagine, ross, that those negotiations will be a little bit easier than they were outside beijing. >> one would hope. isn't it an extraordinary story. bertha, thanks very much for that. that's the latest on that. recap on the headlines, mixed final trading session for the first half, european stocks fail to fall wall street's three-day rally. the u.s. accuses the china wind turbine giant sinovel of corporate homicide for allegedly stealing trade secrets from an american supplier. and the white house is reportedly drawing up a short list to replace fed chairman ben bernanke. still to come, fed tapering fears have led markets on a roller-coaster ride this month. what's in store as we close out the quarter? and as we head into break we bring you another edition of our sectornomics, this time it's rick santelli's look ahead to q3. >> here's what to watch for in treasuries for the quarter ahead. i would watch, "a," data, watch how interest rates respond to

good and weak data, two, i would look for the deleveraging trade and signs of it whether it's through the carry trade, monitoring the dollar yen or keeping a very close eye on what portfolios at major institutions and banks are doing and last but not least volatility. high volatility in the marketplace tends to be associated with higher rates. that's your treasury sectornomics, i'm rick santelli. i want to make things more secure. [ whirring ] [ dog barks ] i want to treat more dogs. ♪ our business needs more cases. [ male announcer ] where do you want to take your business? i need help selling art. [ male announcer ] from broadband to web hosting to mobile apps, small business solutions from at&t have the security you need to get you there. call us. we can show you how at&t solutions can help you do what you do... even better. ♪

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. ♪ all right. just some of the other stories we're following. the u.s. president has drawn up a short list of candidates to replace ben bernanke who is expected to step down when his term ends in january. treasury secretary jack lew is running the search. reports suggest there is no front-runner. possible candidates may include fed vice chair janet yellen, the

former treasury secretaries timothy geithner and larry summers as well as former fed officials alan blinder and roger ferguson. reports say the white house has spoken with the senate about identifying a nominee to begin the vetting process. but the president may wait until the full to make a selection. the same time, president obama is hailing the senate vote to pass a sweeping immigration reform bill. the measure which got bipartisan support offers a path 0 citizenship for illegal immigrants, tightens u.s. border security and increases visas for highly skilled foreign workers. the bill faces a tougher climb in the house as republicans don't like the senate version and want to write their own legislation. jon corzine has responded to the civil charges filed by the trading commission against the former cfo. he says the lawsuit is based on meritless allegations. corzine did nothing wrong and

looks for vindication in court. they accuse edith o'brien of being key actors in the collapse and the misuse of customer money. cnbc learned the s.e.c. is investigating the relationship between thomson reuters and supply management. they are reportedly examining whether anyone got advance access to the manufacturing data. last year thompson and ism signed a deal over high speed line and investors willing to pay for quick access to the information. the many s.e.c. probe is in the early stages and may not result in any action. thomson reuters stock up a third of 1%. google is looking to branch out beyond smartphones and tablets. "the wall street journal's" suggests the company is working on a video games console and digital wristwatch powered by

sell the devices itself and released at least one of them this fall. google's stock just down slightly. meanwhile, european equities, mixed session today. the ftse 100 yesterday was up about. %. right now it's absolutely flat. xetra dax off 1% and the cac 40 down a third. u.s. agenda, final read on june consumer sentiment due out at 9:55 eastern. at 10:00 we get the june chicago pmi and if you like a fed official speaking you've got plenty to look at out. there are four of them, fed governor jeremy stein, richard fed president jeffrey lacker, cleveland's sandra pianalto and john williams. blackberry reports before the opening bell as does the shaw group and retailer finish line. as far as futures are concerned

we are caught a little bit higher at the moment. the dow is currently up around 40 points above fair value. the nasdaq around 10 points above fair value and s&p 500, 6 points above fair value. how will we win the half after recent volatility. todd is here with us. todd, actually in the scheme of things it's not been a bad week. >> good morning, ross. it's been a very solid week after hitting a low on monday of 1560 in the s&p we've done nothing but go straight up and, of course, yesterday with william dudley coming out explaining that everything is going to be okay and they'll bring some more punch to the party and today with more of the many fed the markets love it and they're flying and right up against a resistance level at about 1620 and if we can get through here it looks like we can probably go higher. >> a lot of echoing dudley's comments and four more speakers today so presume that's what we'll look at most closely. >> i think that's really -- you know, the street wanted to have

a better explanation. i guess ben bernanke wasn't clear enough when he said exactly what they're now repeating a week later, but, you know, the market was due a little bit of a bounce. the rally is not as surprised. a real key point at 1620. i think we stand the correction. we are in a downward trend since may 22nd since the key reversal so i'd watch for that. if we can't break through here i think we go a little lower. end of the quarter, could be some marking today. also got a holiday week coming up so could be a little bit of weird trading because should be on very light volume. >> what do you think about gold? we're down below $1200 an ounce. had the worst quarter for gold since 1968 and i saw dunn at a 5 5 52-week low. >> once it broke through 1320 extremely weak. i don't think it's time to buy it yet. i think you want to look for it to stop going down.

i mean last night overnight at one time it was down another $30 rallying back a little now. i would wait until it hits a base. i think it's probably has a chance to hit probably 1100 or something before it probably stops coming down so i would look but right now there would be no reason to buy it here because it's certainly going down almost every day and going down hard every day. >> yeah, and also dictated by guess what happens to the dollar, todd. what do you think is going to happen to greenback? >> well, i think that the greenback is going to become a little stronger. i think there's a lot of underneath fear here and money is going to come to the treasury market and to the u.s. dollar. i think the dollar is going to gain some strength here as it's been doing all week because i think there's still a lot of concern and not everybody is so convinced that everything is going to be okay and that we're actually are going to come out of this so good and i think there could be some problems so i think you'll see strength in the u.s. dollar. >> todd, have a good day. thanks for that. todd horwitz of average joe options.

we've been asking you what would you expect from an ethical bank after the church of england announced plans to bid for 315 rbs branches as part of a c consorti consortium. dan tweeted "atm machines should spritz holy water." yes. fair enough. i'm not sure if the church of england will get involved in that. we'll see what happens. that's about it for today's program. coming up next, of course, we get "squawk box." the count down down to the last trading day of the first half. we hope you have a profitable day. from the team that put "worldwide exchange" together, thanks for watching. i'm ross westgate. [ kitt ] you know what's impressive? a talking car. but i'll tell you what impresses me. a talking train. this ge locomotive can tell you exactly where it is,

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good friday morning, today's top stories, u.s. stocks are rallying to end the week. could it be too little too late to extend a multiple month winning streak? we'll talk about it. commodities also being crunched in a big way. gold prices dropping to their lowest level since 2010. gold bugs will talk about that and back on u.s. soil, yep, the american executive who was held hostage by his own workers in china has returned home. we talk to him over there and now he's going to share his story. it's friday, june 28th, 2013. "squawk box" begins right now. welcome. joe will be back on monday. today is the last trading day of the month of the quarter and the

first half and stocks have been rallying into the end of the week. right now the dow is on its best three-day winning streak in 11 months, now recovered more than half of its recent steep losses, but with just one trading session to go, the major average's monthly winning streak is in jeopardy. the s&p has been up and the dow is down 0.6% for the month, the s&p is off by 1.1% and the nasdaq has lost 1.6%. don't let that bother you, though, when you start looking at the year to date at this point, the dow is up nearly 15% for the first half of the year. that makes the blue chip index poised for its best first half since 1999. yeah, nothing to sneeze at here if you can at least hold on to those gains you'd still look at