welcome to "worldwide exchange." these are your headlines from around the world. when ben bernanke speaks, global markets listen. european stocks are higher mirroring moves in asia as they get ready for his testimony today on monetary policy. novartis says it is not part of china's probe into alleged bribery in the pharma sector after the chinese state paper demands a crackdown on foreign companies. the swiss drugmaker raises its outlook on the back of the strong q 2 sales. foreign companies continue to pour money into china despite

rising scrutiny and slower growth. june fdi rises 20%, its fastest clip in more than two years. and the u.s. energy regulator finds barclays and its traders $453 million for allegedly manipulating energy prices in california. investors shrug it off as analysts call the amount not material. hello and thank you for joining us. let me tell you what's coming up on today's show. glaxosmithkline says it knew nothing of the alleged bribery of medical staff in china. but are other companies equally as blind to the practice? we discuss the scandal at 10:20 cet. we're talking of bribery, spanish prime minister mariano rajoy faces ongoing questions from his own party on allegations he received cash payments from his former party treasurer. we'll go to madrid for the

latest on whether he can ride out the storm. how did mark carney vote on qe? we'll find out today at 10:30 cet as bank of england minutes are released. this will be key for gilts and the sterling trade. a revenue slide for yahoo! but internet company sees profits rise. so is marissa mayer's turn around on track? jon fort will go through the earnings at 11:30 cet. federal reserve chairman ben bernanke is set to testify before the house financial services committee later today as part of his semiannual presentation to congress. he will likely face a grilling over plans to wind down the central bank's bond buying program. on may 22nd, bernanke rattled markets with his first indication that tapering could begin if economic conditions stabilize. >> if we see continued improvement and have confidence that that is going to be sustained, then we could in the next few meetings we could take

a step down in our pace of purchases. again, if we do that, it would not mean we're automatically aiming towards a complete wind down, we would be looking beyond that to see how the economy evolves. >> but after last week's fomc minutes, the policymaker back tracked from his hawkish stance and said easy money was here to stay for now. >> the overall message is accommodation. there is some perspective, gradual and possible change in the mix of instruments, but that shouldn't be confused with the overall thrust of policy, which is highly accommodative. >> here is a look at how the stock market has performed during his comments. it has been an extremely volatile ride, may 22nd, we saw the peaks on the market saw some fresh highs and then a retreat for stock prices down 5% since then. but the market as you can see in the last couple of weeks after bernanke sounded less concerned

about bringing tapering forward, that's when the markets started to rally again. we had fresh peaks about three straight sessions of increases for the s&p to the lofty highs just in the last session. we came off a little bit. you can see a fairly similar trajectory too for the u.s. dollar. we had the declines on suggestions that tapering would start and you can see that dip there and you can see the steady increase from that point .2% firmer. so we're almost back to where we started in may, aren't we? has been choppy there anywhere. to piers kernen. what are we going to hear from ben bernanke today? >> i think it is going to be a similar story to last week. although i felt he made a bit of an error last week, not an error, i think he was too dovish. i think they spent a lot of time trying to get argument out in the air, we're going to taper, it is going to happen, stimulus can't last forever. so, you know, took the markets a couple of weeks to get used to

that. and then prior to his speech last week, you know, the s&p was beginning to recover, we had the dollar beginning to give back some of those gains, and i think there was no need for him to be quite so dovish. i think the big problem for bernanke is his committee, which are massively divided. if you look at the statement from all the minutes from the last meeting, half of the fed or half of the fomc want qe to end by the end of this year. but then several don't want tapering to begin yet because they feel over market conditions haven't improved enough. so you have a huge divide and yet half want qe to end this year, so therefore i'm definitely still in the september tapering camp. >> you have to bring up the minutes because the comments were so mixed. inflation was raised by some, wanted to some support for the inflation rate being maintained. the employment rate was raised as well. how does the fed chairman compute these different numbers

and get the timing right to keep everyone happy? >> i think the -- he's a wily old badger, bernanke, he's great at speaking and saying nothing. he tries to appease everybody by being dovish, by being hawkish, by being bullish, by being bearish, you know, all in one speech. i think the -- bernanke's dovish. he's on the side of the committee that wants to maybe just wait and see, perhaps want to see a little bit more labor market momentum, particularly before he wants to press the button on tapering, but i think ultimately the majority is going to rule and i think that whilst in his individual speeches he'll be more dovish than the fed statement, for example, i think generally you got to go with that fed statement more. the other issue to point out, and which perhaps doesn't get discussed much is what was the reason for qe 3 in the first place. a big part of the reason why they went ahead with qe 3 is perhaps because of the political

deadlock in washington. the fiscal cliff risk, right? and so that's been dramatically reduced with sequestration and so on. that fiscal risk, you know, long-term fiscal risk for the u.s., still needs to be resolved, but nowhere as big a risk anymore. i think that's a big factor here that needs to be considered, and that's why i still think tapering in september, despite the fact bernanke will be dovish tonight, i still feel we're going to get that. >> labor day was raised in the last testimony, i wonder if it will come up this time, which gave us the september date. i want to ask you about market positioning as well, but we'll come back to the discussion. cnbc will speak to the u.s. treasury secretary jack lew at 8:25 et. interesting to listen to as well. jack lew's swirly signature famously caused concern as to how the u.s. dollar bill might appear on this side of the atlantic. mark carney must help decide who should replace charles darwin's

face on the british ten pound note. want to hear from you on this. head online to have your vote. does jane austin deserve a spot or what are some of the other cnbc suggestions that you can come up with? we also chose margaret thatcher, dame judi dench, jk rowling or posh spice is a couple of names. you want to throw in a name? >> ross westgate. >> ross westgate. i'm sure he's at home on the couch at the moment enjoying your suggestion. ross westgate, one noble cast for the anchor for wex. if you have an alternative, get in touch by e-mail at worldwide@cnbc.com, by twitter, @cnbcwex or direct to me @cnbckaren. swiss drugmaker novartis raises its four-year outlook after posting sales just ahead of expectations in the second quarter. earnings per share fell 4% to

$1.30. nordea posted a second quarter net profit of 772 million euros, slightly bigger than expected drop a year earlier while being weighed down by lower net interest. the swedish bank maintains its credit quality is stabilizing. also on the earnings belt today, the world's largest money company, bhp billiton recorded another record rise in output. production was an increase of 9%. billiton is plowing ahead with plans to increase output further and said expansion of its operations in australia is running ahead of schedule. consistent with rio tinto yesterday on the output side as companies try to chase economies of scale now. uk commercial property company land security says 97.2% of its retail portfolio is occupied with 52% of the latest city skyscraper nicknamed the

walkie-talkie already prelit. stay tuned for a uk business editor interview with the ceo a little later on the show. it is a mixed back for marissa mayer and her one year anniversary as yahoo! ceo. the second quarter profits rose 46%, beating forecasts, but revenues fell short. down 7%. missing expectations. display ad revenue which accounts for 40% of sales fell 12% on declines and the number of and prices for those ads. yahoo! also has got in lower on third quarter and four-year targets. yahoo! initially fell 2% in after hours trade, but then recovered when management assured investors that they'll continue buying back stock. in a unique move, mayer and ken goldman hosted a video conference call on yahoo! finance. she focused on other items such as increasing hiring and acquisitions made in the past year. there have been a string of them. now, the earnings day ahead

looks like this. before the u.s. open, we have got bank of america reporting numbers with ebay, ibm and intel the ones to watch after the close. thursday, it is the turn of the tech giants and microsoft and google who relay second quarter figures. and at the end of the week, numbers from general electric. pretty heavy on the earnings season, piers. it is interesting because we're trying to gauge the stock market reaction at the start when we got the first peeks in may, whether this was earnings driven or stimulus driven. so this sets us up for the next season. what do you think? >> i think that it is going to be quite a mixed bag. i think we have seen a lot of the big banks already. we're going to get bank of america today. i think that's going to be the best performing sector in this earnings season. i think you're going to probably find other struggling tech sectors, probably had another fairly weak quarter i would say. ultimately, well, there is two ways to increase earnings.

you either -- either from global growth or economic growth within the environment you're operating in, or lower margins. and companies can't lower margins anymore. they're operating at such a ridiculously efficient level. so really it is about we're gettiget ing flat growth in terms of revenue. there is no volume. and so really, i think everybody's geared towards this economic recovery, globally, i mean. it is just not quite happened yet and so you're getting earning -- well, revenues slightly declining, but profitability still up around -- i mean, up around record levels. but we haven't really seen any momentum on earnings. so i think the guidance perhaps this earnings season guidance towards quarter three and maybe 2014 will be perhaps even more important than the numbers about the quarter that just finished. i think that at the moment there is a certain amount of optimism

about the second half of the year, but i think now we're in the second half of the year, that optimism is just tailing down slightly. >> got to see numbers come to fruition, don't we? speaking of markets where investors are cautious, china has been volatile out there. these numbers were fairly interesting out of china of late. 5.7% growth is good enough it seems for most foreign investors. in june, they poured 20% more money into china than a year ago. that's the fastest pickup in more than two years and it shows investors are still optimistic about china's potential. the first half data shows steady gains in fdi from the u.s., japan, and europe. let's check on the market action in asia today with li sixuan. >> it is a mixed day of trading in asia. it is very much about cautious ahead of bernanke's speech. south korea's kospi was the best performer today closing higher by 1.1% with automakers lending support. japan's nikkei 225 gained a modest 0.1% in light volumes.

also in wait and see mode before the upper house elections this sunday. in china markets lagged behind. the country's finance minister said beijing is unlikely to launch any major fiscal stimulus this year, but will mack a greater effort to press ahead with reforms. the shanghai composite lost 1% in today's trade. let me show you some bright spots in the region. hong kong listed jewelry shops outperformed as they benefitted from the gold rush. after the stunning sales report last week, same store sales soared 83% in hong kong and macau and more than doubled in mainland for the june quarter. and shares jumped 6% today and some other major jewelers such as tse sui luen added more than 6%. in australia, bhp billiton gained over 2% after the world's number one liner reported record output. and higher metal prices also boosted other miners such as

fortescue metals gaining 6%. billabong shares skyrocketed 34% after the struggling surf wear company reached a lifeline deal to refinance its debt. back to you, karen. >> thank you very much, sixuan. up to speed with the european trading pattern this morning. we're seeing green across the charts. modest increases for the ftse, the ibex one of the better performers. you can see both up half of 1%. modest increases too for the german market. dax put on a quarter of 1% and the cac is ahead by .4%. we're recovering some of those losses. let me show you what is happening on bond markets. not a huge amount of supply, but we're seeing bonds offered 4 billion euros of may 23 bonds rather and that's due out this morning. and you can see how bonds are trading before that. we have the yield about -- just over 1.5%. across on the charts, spain is seeing a rise to 4.71%.

treasuries in focus, of course, as we wait to see what bernanke will say about tapering. will we have any clearer time frame? will it be september when tapering starts? 2.5% is what treasuries are at. we come back in recent weeks from some of the highs, about 2.7% we got to. come back from that level. also going to be some interest in the trade in gilts today as we see what the bank of england minutes look like and whether mark carney and his first meeting as the governor voted for qe. that will be the big question for markets. did he cast a vote yes or no. and we'll get to see too whether the market pricing on interest rates has been warranted and this is what mark carney said, there were concerns about in that first statement issued. a lot of trade around that. also in the sterling too. you can see coming up to releasing the minutes in a short amount of time we're tracking weaker on the sterling trade, down .3%. australian dollar on the back foot as we look at it, down half a percent. it has made some strong gains of late.

it climbed through the 92 mark. dollar yen rates supported .6% firmer, but still not clearing 100 and eurodollar rates on the flat line today. we're going for a break. as china comes under pressure to crack down on corruption in the wake of gsk's bribery probe, we find out what is at stake for other big pharma firms. we'll be live in beijing after the break. [ 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, what it's carrying, while using less fuel. delivering whatever the world needs, when it needs it. ♪ after all, what's the point of talking if you don't have something important to say? ♪ if you don't have something important to say?

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china's top state newspaper wants to crack down on bribery by global firms. the people's daily says multinationals are exploiting a lack of oversight and beijing must do more. the editorial comes days after chinese police detained four executives for allegedly bribing doctors to boost drug sales. and fresh media reports citing a hong kong lawyer says china's expanding the probe to at least four global firms. today's swiss drugmakers roche and novartis clarified they had not yet been contacted by chinese officials. let's get out to beijing, eunice yoon tracking the investigations. what is the latest? >> well, karen, just to give a little bit of perspective, when the government wants to send a message here, they usually go

after a big fish in order to scare all the little fish. so what the speculation is is that glaxosmithkline could be the big fish. the government has been pushing through a national campaign to try to root out corruption. you see that in the way that they put in place a very powerful technocrat to head up the anti-corruption team. they have been rooting out corruption within their own ranks, in the system, and trying to cut out some of the excess. now we're starting to see more people believe that this corruption, anti-corruption campaign is meant to include international firms. you mentioned the people's daily, the people's daily commentary, people were really talking about that, because of the fact that it was really targeting multinational firms, saying the crackdown in commercial bribery needed to take place among multinational firms to bring order to the market economy. also, one of glaxosmithkline's executives who has been detained appeared on national tv here for

the chinese people. so chinese people saw him allegedly confess to these crimes. and so, you know, we don't really know the circumstances around his confession, we don't really know the -- we don't really know exactly what glaxosmithkline did or didn't do, but the fact that this is going on, and it is being so public within the state press as well is making a lot of international companies very nervous. >> certainly raising good points. let's dive into the conversation a bit more and bring in professor willie lamb, politics expert from the chinese university of hong kong, joins us on the phone from japan, just north of tokyo. eunice staying with us with piers. give us your perspective. eunice raised a good question about the message this sends out there about catching a big fish. how widespread is the practice of bribery and corruption across industries whether it is pharma or some other big industries? >> well, i think the

pharmaceutical field is a big disaster zone because for the past ten years we have read many articles in the media regarding kickbacks and other advantages offered by multinationals to chinese doctors, hospital administrators and so forth. and it is likely that this will be the largest well orchestrated campaign to go after multinationals now that the anti-corruption campaign is getting into high gear. it is likely that more such multinational companies, pharmaceutical feels or other arenas are involved. this looks like something very serious affecting foreign companies in china. >> willy, this is eunice in beijing. do you get a sense at all this could become or already is a market access issue? it is really interesting they're targeting or appears to be targeting the pharmaceutical industry, which is a very contested industry, where a lot of the big pharma companies have been trying to get into and have

been complaining that they haven't actually had the same type of access to as some of the local firms. >> well, suddenly this doesn't look like a level playing field. and i have heard foreign companies executives complaining they're being unfairly targeted. of course, we also have this case of baby formula powder manufacturers and acquisition in the chinese media they have been unreasonably raising prices. so what the administration is doing seems to be to appeal to the public, telling the public they're doing something about this and also gaining popularity, now that this is beginning of the jinping administration. i think the government has to act very carefully to avoid being accused of putting the -- for problems which they cannot solve themselves. because after all, we understand

that the anti-corruption agencies have been going after the petitioners in the medical field for at least ten years and they have not much to show for this. that is a possibility they are blaming the foreigners so as to include their popularity with the chinese public. >> willy, what do the doctors think about this? because they earn about 5,000 to 6,000 a month, about $900 a month, and yet there is reports of some of them getting up to $100,000 a month -- or a year in kickbacks. so this is a vast majority of their annual income being threatened here. what do the doctors think? >> certainly, if you talk to members of the middle class and professional classes in china, they say that they have to pay so-called red packets, that means bribes to doctors or particularly surgeons. and then also on the other hand, doctors have been persuading them to take expensive medicine or expensive medical treatment

and scans and so forth, which they don't really need. so what is happening is that even though the base salaries are low, medical petitioners are getting quite a high income because of all the kickback and so forth. this is certainly a serious and endemic problem and it is interesting that before he became prime minister, he was deputy prime minister and one of his major areas was precisely to -- >> we must wrap item, though. just out of time. willy lam, eunice yoon, thank you for joining us. still to come, which way will mark carney go for his first ever vote on qe? find out when his comments are released. [ male announcer ] it's time.

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but we can't really tell bears what to do. moooooommmmmm!!! then one day, it was just gone. mom! [announcer] you are how you sleep. tempur-pedic. when ben bernanke speaks, global markets listen. european stocks higher as investors await the fed's testimony today on monetary policy. novartis says it is not part of china's probe into alleged bribery in the pharma sector after the chinese state paper demands a crackdown on foreign companies. the swiss drugmaker also raises its outlook on the back of strong q 2 sales. and the u.s. energy regulator

finds barclays and its traders $453 million for allegedly manipulating energy prices in california. but investors shrug it off as analysts call the amount not material. we are just looking at the early minutes crossing from the boe. this is the important one that we had with mark carney's first as the bank of england governor. the mpc voted 9-0 to keep the bank rate unchanged. that we know we didn't see any move. unanimous in voting to leave the bond purchases unchanged. so unanimous vote on that. carney voted to leave policy unchanged in his first meeting. that's the headline that he did not vote for qe and the market has been expecting he may have

kept his powder dry on this note. in terms of the other information coming through, fisher and miles changed their vote on the need for bond purchases. some mpc members believe that further stimulus is still required. here's the early reaction we're seeing across on the sterling dollar trade. we're a little firm, .3% firmer. so got to build on the sterling trade, enough to push it through 152. we're tracking it at 151.13 before the bank of england minutes hit. so this has been curious, the sterling trade has gone up. the mpc members will discuss alternatives at 2 qe overcoming months. perhaps qe isn't the only method that the members will adopt. a quick look at the unemployment rate as well. we got the jobless numbers crossing. the uk june claimant count is minus 21,200. expected to be minus 8,000 in

terms of some of the other key parts to this component. the average weekly earnings were plus 1.7% year on year. the market expected this to be a little lower at plus 1.4%. this has been interesting too because when people are looking at the prices of houses over here, many are saying that the weekly earnings are not justifying some increases. we have seen already the pricing on sterling. >> that's a big surprise. i don't think anybody who is thinking the vote would be 9 million on whether to extend qe or not. i think it was 7-2, kind of just considered to be a definite, so the fact fisher particularly has now gone back into the no extension of qe camp, that's big news. >> why the change, do you think, has the data been strong? >> i don't think we need more qe because of that fact. we had some seriously strong data, and, you know, the best data out of most developed economies of late. i think they're starting to be

early signs of some real momentum. i think carney's forward guidance was -- perhaps a bit disappointed when he said that, you know, markets pricing in a rate hike in 2015 have got it wrong. i think that took a while to filter through. we have seen curves steepening now, two weeks later, where we saw shorter duration yields dropping. but the longer term stops staying up there, aligned with the treasuries because of qe related issues and uncertainty in the u.s. >> on that point, the reaction has been to drive up the curve right across the board on the 2s, 5s and 10s. we have seen movement higher. melanie banker is in the camp that we would see the bank of england governor vote against qe. did you expect the rest of the board to go with him? >> no, i didn't. we were in the camp looking for a 7-2 vote. it is certainly a surprise in that sense. but i would be interested in the

overall tone of the minutes. you said some of them still thought some stimulus would be necessary. what alternative measures are they looking at? and i would still think we are going to get some form of forward guidance from them in august. >> some of the commentary says they're a group of members open to further qe believe it is not required now. what do you think would change to make the board vote in favor of qe? >> i would have to be a deterioration of data. the income data has been quite strong in the uk. the one thing that has been apparent has been higher bond yields, that's been increasing risk to the outlook going forward if you like. so in terms of more qe, i think it would either have to be a very sharp rise in bond yields accompanied by perhaps some worsening in some of the data, i think. but on the incoming data, we have seen quite strong numbers. >> there is a line in these minutes that i think is quite curious, in particular as we

come up to ben bernanke speaking as well. the minutes are saying some members believe more qe would complicate the return to more normal policy when warranted. and this is interesting, isn't it, as we have the market reaction on wall street, as there is talk of tapering started. we saw dramatic reaction on the stock market. does this suggest the mpc is concerned about the bubble being fueled here and being put down the track? >> i think the mpc and the fomc are now getting much more worried about cost of exit, and the damage the exit from all this wild stimulus is going to create. will it destabilize what has been a hard fought global recovery? >> i just want to pounce on that comment, because what was interesting when carney first came to office, it felt like he was trying to break the correlation between gilts and treasuries, but you've just mentioned the two in the same basket, about this talk of exit. so this damages that theory urks

doesn doesn't it. >> the links are correlated. i think the gilts, ten-year guilts would move as much relative to u.s. monetary policy expectations as they would to uk. what mark carney managed to do was engineer a detachment at the shorter end of the curve, like, for example, four-year yields dropped from .84% to .48% in the last two weeks. since this forward rate guidance. there has been a curve steepening, which is what he was trying to engineer. i think it is impossible to attach gilts from treasuries, they're always going to be highly correlated. >> melanie, come in here. >> you could argue as well what we saw in the statement, maybe the reason why it was dovish and the reason why we saw a market guidance in the statement was because they knew the vote was going to come out it a couple of weeks time. i think it increases the risk we'll see a uk form of forward guidance in august. >> thank you very much for the instant analysis there, melanie

banker. curious, i wonder whether they'll have to clarify the statement, because it seems somewhat mixed. we have our uk editor with us. to me it felt like there was a mixed comment, we don't want qe now, we may want it down the track, but we're worried about the exit. we have to see some clarification. >> i think people were looking for the 7-2. i think there was some speculation that it would be unanimous because carney's role is all about carrying the mpc. so i think if he had stuck his head out early, and voted for more qe at this point, it would have been very damaging for the kind of message he's trying to put out there. and same for the mpc. i think what you've seen there, a turn around in some of the members who voted with him, and i think that is key. but it is in line with -- we have got work to do. the new governor is here. we're going to look at this over the summer and then we have got

forward guidance coming out in august. and more clarity. and i think it is not surprising that much really that he's done what we have all been expecting him to do, which is come in, be more diplomatic than his predecessor and really carry the mpc with him. >> it feels to me, though, this could swing either way. the bank of england governor mark carney will discuss with the policymakers today who should replace charles darwin's face on the british ten pound note. former chief king said the writer jane austen is in the running to take the honor. you've been looking at this story. what do you think? >> i think although it is a very emotive subject, should we have women on the bank note, should we ensure they're on the bank note, i think it goes to the point of carney wanting to create a line between him and his predecessor, king, and what he came in and said immediately

on his first day on the new job, said, look, i know jane austen has been suggested but i will look at it myself and i'll report back and tell you who i think is worthwhile. i think the key here is not that we have to have women on the bank note, but that it is important in a modern, more transparent bank of england that we know that women are being considered. and how that decision-making process is carried out. i think that's the key here. he's committed to being more transparent. >> jane austen, she's been popular and enormous interest in her novels over time. is that the best female to put forward to highlight on one of the notes? >> having the figures on the notes is a very subjective thing. i don't think we're saying -- churchill, many of us think he's the best briton to have lived. but i think it is a subjective choice of historic figures in the uk that have been -- that have been worthwhile to keep part of popular culture.

so i think there is a lot of women we can draw and doesn't have to be jane austen. >> piers went for ross westgate. >> he's a strong candidate, you know, i think. important to get some cnbc exposure on those notes. >> did you have your own preference? >> no, but i am a backer of, i think, emily planker would be great. but i generally don't. i think it is important that we consider, i like the move towards transparency, that there is a consideration, just like in the board room, are we making sure we are looking at why there aren't women? and if it doesn't merit it, fine. we have better candidates, fine. but please consider. >> we also with a tonight hear from you on this. head online to have your vote. who should mark carney choose to put on ten pound note. the options are jane austen, margaret thatcher, posh spice, jk rowling, dame kelly holmes or dame judi dench. or e-mail us and get in touch on

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uk commercial property company land securities says 97.2% of its retail portfolio is

occupied with 52% of its latest london city skyscraper nicknamed the walkie-talkie. it looks fairly solid when you look at those numbers. this is indicative of the uk economy? >> i think we're seeing as you said good data out of the uk economy lately, but also you need to realize that land securities, 70% of their assets are in london, where commercial property has had a bottleneck. we haven't had a lot of investments since 2009 and land securities interestingly has done a lot with their portfolio. they have bought huge amount of properties in london, all of which are coming online at the moment, which is very interesting, just as the economy picks up. and demand here has been huge, especially given the interest from foreigners. their retail portfolio interestingly has remained constant, despite a huge number of administratives. i spoke to the chief executive

earlier at the top of the walkie-talkie. here is what he had to say. >> we're pretty happy with our trading results. i think what we said in may was that we entered the part of the cycle with optimism, tempered with a bit of caution. we take up in london -- take up office space in london is still running below the long-term average, but demand is increasing and, of course, there is not very much space being built relative. so we're very happy to see increased interest in our schemes, which is as we expected. half our business is also in the retail markets, retail markets remain very, very challenging. but as you will see, we maintained occupancy, absolutely, so despite more talents going into administration, we have been able to let at the same time and letting ahead of our rental value. we're pretty pleased with the results. retail is not dead. it is changing. 60 million people in this country that need to eat and clothe themselves and have fun. and the consumer -- the way the consumer behaves is changing. and as you say, what is happened

is we're moving higher up the retail hierarchy. people shop less often. when they go, they spend longer doing it. they want more choice, they want to be fed and watered. most of the retailers are concentrating now on locating in areas where we can provide an environment that shoppers like to come to. >> do you foresee more administrations, though in default? >> i think the administrations are still continuing to come through i'm afraid. but retail, you know, like anything else, something has come in and out of fashion and seen the numbers out of abercrombie and fitch which show what can happen when things get tough. >> what do you see going forward in the next year? are you positive in your outlook? >> i think we have seen increased confidence in the office occupiers and people have -- who have been delaying moving decisions and now taking their foot off that brake pedal which means we have been increased interest in our sights as i said. in the retail markets, we maintained occupancy and still

have interest in our schemes, so we're pretty chipper. we're virtually full, 97% full in our portfolio. >> you took a pretty big hit after comments from the fed about tapering. how does that affect you and why did it affect your share price so much in. >> well, as you know, interest rates have been kept low we bithe supply of money into the markets. when the feds -- when the markets suddenly think that supply is not going to continue, the interest rates come up, and property yields are related to the risk free rate. while there is a cushion, that cushion, when that cushion gets narrowed, people get worried. as you see, that expands out again as soon as the right messages come through. it shows you the world is still in a fairly precarious state, why our optimism is tempered by caution. >> do youtally think there is for the uk? >> ask the new governor for the bank of england that. >> what would you do?

>> i have a very good look at business rates which i think are hampering the economic productivity in this country a lot more than he realizes. >> good to see you safety conscious there with the hard helmet on. what is the walkie-talkie building for those not aware with it? >> it is one of the new london skyscrapers f you're working in london, you'll see this. there is a huge number of cranes at the moment, a lot of development. walkie-talkie is going to have a massive garden with about three or four different restaurants, which is open to the public so we can go and enjoy a tropical setting high up in the sky. >> good reason for us to go and check it out then as well. we'll talk about the next story in a bit, but let me flush it out for our audience and come back and have a conversation about it. a u.s. watchdog has confirmed that barclays and four of its traders will have to pay fines totalling $453 million for allegedly manipulating energy prices in california. the case dates back to october

with regulators saying last night they are appealing the fine. barclays has 30 days to pay. shares entered the session lower yesterday, but we can see currently this is how they're tracking on the markets. let's recap what has been playing out across on the markets after these bank of england minutes. interesting, 9-0 voted against further qe and that was not expected. and we did see a pop in the sterling trade through 152. we're at 151.13 prior to that. also move higher in gilt yields as well. a final comment from piers. interesting across the charts as we wait for what ben bernanke will say. we had a taste of how mark carney is feeling. is now the right time to be buying equitys? >> no. i think while the s&p was pretty much at its all time high back to the may high, i think there we're about to get some tech earnings that might not quite hit the mark and that might just take the momentum out of the earnings side of the positive

drive. i think that bernanke will be dovish tonight, which will lead to much more movement in the dollar and treasuries. >> dovish means more time to trade the u.s. market, doesn't it? >> that's right. the markets in -- now that we're back up at the high for the s&p, for example, bernanke being dovish has driven the move to the high. i think driving the move above the high really you need to start having momentum in the labor market. i think you can't have stimulus driving this move forever. i think if things align, stimulus, you know, strong earnings, good data, but not too good to warrant tapering, that's the perfect cocktail. >> sounds look a goldilocks scenario. thank you for joining us today, piers curran, head of trading at amplified trading. reuters sources say china has plans to list in hong kong. but it is only if it succeeds in

buying u.s. property smithfield foods. the sources say a $4 billion ipo would give the merged company more access to investors and a higher market value. under hong kong rules, new owners of merged companies have to be in place for a year before listing. nec decided to hang up on the smartphone business. the move follows the failure to bring china's lenovo group on board to salvage the mobile phone operation. we have the story live from tokyo. >> hello. nec asked pc business partner lenovo to take a majority stake in its money losing subsidiary, nec casio mobile communications. but the two parties could not come to terms after more than half a year of negotiations. the japanese electronics company now plans to focus solely on conventional hand sets. nec's decision underscores intensifying pressure for further industry consolidation. this comes amid competition from

foreign rivals like apple and samsung. nec wants the domestic mobile phone leader has fallen to number eight with the market share of only 5% or so. number one apple controls about 25% of the market. with the scale of business being essential requirement for survival, the remaining 5 japanese cell phonemakers were also under increasing pressure to merge or retreat. back to you. >> thank you very much for that. tech is going to be in focus on asia tomorrow with numbers due from tsmc, and tata consulting services. also numbers out from mahindra bank. in singapore, others reporting. how strong will the numbers be from singapore? credit card companies were hit after hours. this after a proposal by the european commission that would cap transaction fees on cards.

it is part of a 20-year saga which brussels argues that consumers have been harmed while banks generate large profits. according to the financial times, visa europe offered to charge no more than 0.3% on a credit card transaction. i'm sure you've all faced international transaction fees as well when you headed abroad. the european justice chief called for the troika to be resolved, saying the partnership between the eu, imf and ecb has run its course. speaking to an audience in germany, vivian reding added they need to resolve their own problems and could manage without the imf. the european commissioner who does not have responsibility for the eurozone said more power should be given to the directly elected european parliament. meantime, spain's socialist party has called for a vote of no confidence against prime minister mariano rajoy if he refuses to appear before parliament to answer questions of allegations of corruption. meanwhile, the number of reports

suggest that senior officials within his pp party are questioning how long he can remain in power if the scandal spirals out of control. out to stephane in madrid this week. what do you think is going to happen here? the vote of no confidence is fairly rare. >> yes, it is quite exceptional. only two times since the return to democracy in 1975, but the interesting question is that growing opposition within the popular party, strong to talk about a revolution, but clearly the question of the leadership has been raised within the party. earlier this week some leaders who requested not to be named told reuters the situation was now beyond repair and the best option for rajoy would be to organize a soft transition. probably these people would not vote against the prime minister in case no confidence vote would be organized at parliament, but obviously the scandal has made rajoy weaker, both inside and

outside the political party. yesterday, poptler party rejected the calls for the prime minister to appear for questioning before the senate. next week on wednesday it will discuss whether or not he would go to speak before the lower house of the parliament, the congress, depending on the outcome on the discussions. then the socialist party will go for a vote of no confidence as you were mentioning. this would be more symbolic than a real threat for rajoy, it would be the third time since the country returned to democracy that such a vote would be organized. and not a real threat because obviously the popular party has absolute majority of the congress and therefore is very little chance this vote would be passed, if organized, by the socialist party. >> stestephane, there is theory through the that perhaps changing at the helm could reinvigorate the party's fortunes. do you think that would make a difference at this point, because unemployment is something that the party still hasn't been able to tackle.

>> yeah, well, it is true on the ground people are asking the popular party to divert, it wants results. but the crisis is quite tough in spain on -- the labor market is not improving yet. the economic growth is not improving either. country is still in recession. yes, if rajoy would step down, which is not an option at this stage, it could bring some fresh blood and therefore give the popular party a new direction, some perhaps more support and new energy. we had a survey earlier this week showing that only 25 of spanish people are supporting the popular party, that's to compare with 44% two years ago. but in the meantime, the socialist party doesn't have so much approval, only 22% of spanish people would if the election -- some elections were organized today. >> thank you very much for that. elsewhere, in european commission ollie rin has struck

down reports saying greece could be facing a 10 billion euro financing gap. spokesman talked to twitter to say the bailout program was fully funded for the next 12 months. he also said any subsequent gap in the funding for athens will be addressed in due course, based on facts, not speculation. are we going to go for break? still to come, an expanding range of services for investors to manage portfolios online. how do you find a product to match your goals? our next guest thinks he's cracked the problem with nutmeg.com. stay tuned to find out more. also coming up later, john paulson head funds manager is due to speak. we'll find out how his bet on gold stocks is playing out.

welcome to "worldwide exchange." i'm karen cho. these are your headlines from around the world. when ben bernanke speaks, global markets listen. european stocks are now mostly in the red, despite policy moves in asia and for u.s. futures. as investors await the fed chairman's testimony today on ma monetary policy. novartis says it is not part of china's probe into bribery in the pharma sector. this after the chinese cracks dune on foreign companies. the swiss drugmaker raises its outlook on the back of strong q 2 sales. the u.s. energy regulator fines

par clay barclays and traders for allegedly manipulating energy prices in california. investors shrug it off as analysts call the amount not material. and it is a mixed picture for marissa mayer as yahoo! reports better than expected second quarter profits but revenues slide yet again. if you're just tuning in from states, thanks for joining us today. let me get you up to speed with some of the market movers we're seeing. we have seen a change of sentiment in the markets in the past half an hour, in fact, across all the u.s. markets and u.s. futures. we're seeing a little red creeping in here, softening up a little bit as we come up to the early morning session. on the dow, the nasdaq and s&p, these markets tracking weaker yesterday, but coming off the record pace enjoyed for a couple of days on u.s. markets.

let's move on to what we're seeing. still firmer on this. only marginally across on the positive side of the ledger, coming back from some of the early intraday highs. european markets are where we haven't seen this change of sentiment in particular. the ftse, firmer on this trade, to the tune of half of a percent at one stage. now underwater by a tenth of a percent. you can see we have retreated fairly sharply in what is shaping up to be fairly choppy morning session. xetra dax down a quarter of 1%, giving up some modest gains as well. the ibex 35, which has also been one of the solid performers, swings has been on the order of 1%, also trading up more than a half. let's move on to bond markets. one i want to show you is ten-year gilts. we're higher after the bank of england minutes, i wonder if this what had been on the impact out there on some of the

investor sentiment across europe. we saw the unanimous decision by the boe, mpc to vote against further qe at this stage. this is all important because it is market very much waiting to see what ben bernanke is going to say about tapering. so i just wonder whether the markets are very jumpy about the move towards the exit by central banks. 2.33% is what we're trading on gilts currently. treasuries still above the 2.5% mark. on spain, 4.71%. we're higher on all the yields across the charts. ten-year bounds getting close to 1.6% mark. foreign exchange rates, the eu o eurodoll eurodollar, close to the flat line for most of the morning session. dollar yen rates were supported and remain so. the australian dollar is still hovering above 92 u.s. cent mark, but it is weaker in session. sterling dollar is where we have seen the trade today. we were weaker at one stage, before the boe minutes came out and saw mark carney's vote against further qe and carrying

the rest of the board with him. now through the 152 handle and we're hanging on to these levels as well. well, let's check on the asian trading action today and get out to li sixuan in singapore for more on some of the sentiment there. sixuan. >> thank you, karen. asian investors also in a cautious mood as they await bernanke's speech. nikkei 225 modest gain as kospi managed a 1% higher led by gains in autos and i.t. stocks. china's shanghai composite finished in the red, down 1% despite very strong june fdi data. financial stocks let the losses while the country's finance minister said beijing is unlikely to launch any major fiscal stimulus this year, but willmake a greater effort to press ahead with reforms. in hong kong at the strength in coal and cement stocks helped hang seng end in positive territory. the top gainer was china shin

with a shinhua, can we have the board, please? the stock surged 5% after posting a solid increase in revenue last month. and a gold jeweler higher by 6% thanks to a big jump in the same store sales in hong kong, macau and china in q 1. this come one week after they posted higher numbers after investors swept in to buy gold on the cheap. to australia, billiton shares up more than 2% today after posting a record production report. surf ware maker billabong surged more than 30% on news it has clinched a rescue package to settle its debt. back to you, karen. >> sixuan, thank you very much for that. fed chairman ben bernanke goes before congress today to deliver luckily for last time part one of his semiannual testimony on the economy and monetary policy. he testifies in front of the house financial services committee at 10:00 a.m. eastern. the fed will release his

prepared remarks at 8:30 a.m. bernanke is expected to tread carefully, balancing a message of the fed's continued support for the u.s. economy, also reminding the central banks easy money policies can't last forever. joining us now in the studio is shawn port, the cio at nutmeg.com. shawn, tell us about this balancing act. just how delicate is it because the markets have gotten a little bit more comfortable with the tapering talk. >> i think markets have adjusted to the tone of the fed and also coming back a bit from the quite strong rhetoric we had in may. i think the difficult act for bernanke is really balancing the end of bond buying, so tapering most likely this year. and actually differentiating between a rate hike, not likely until 2015, so a difficult balancing act, do i think he can do it by emphasizing these were emergency measures and the economy is growing quite strong enough. >> these testimonies have proven fairly important for markets because last time around it was when we got the time frame of will we see any move to the exit

before labor day, which, of course, is september, that's how the september time frame came up. what more could bernanke say that would just flag post this for investors? he's not actually going to give a date, is he? >> he's not actually going to give a date. now that we signaled the end of qe or bond buying, the fed should move on with this. jumping back and forwards, september, december, next year, this is unproductive. i think the fed needs to move away from emergency measures and concentrate on rates. rates will stay near zero supporting economic activity. that's the main thrust that investors need to talk about. >> there has been suggestions you can stop the 85 billion purchases a month by taking 5 billion off the table. how much is it going to be? >> i think it should be material. i think we're looking for a move down to 40 or 50 billion. that's still a significant amount of liquidity going into the economy. you have bear in mind the bank of japan is doubling its monetary base over the next two years which will more than compensate for the fed stepping

back. >> the japanese equity markets, one of the only ones that managed to produce a small return for the month of june. the nikkei is about 14,600 currently. we are off the 6,000 levels we nearly reached in may. are you telling us that if the fed is going to start tapering, then as an investor, you keep following the money, you move the money over to japan, is that the way to invest? >> i think the key reason we're looking at end of tapering is domestic economies are doing very well. the u.s. housing market is red hot. we saw data yesterday that showed activity at 2005 levels, quite amazing. in the uk we got very strong domestic growth coming through now from the service sector and japanese economy also recovering quite nicely. the call is performing quite strongly now. the end of bond buying is more of a good sign rather than a negative sign. >> we'll continue the conversation in a moment. shawn port, ceo at nutmeg.com. also coming up today, cnbc will be speaking to jack lew

from delivering alpha at 8:25 a.m. et. jack lew's swirly signature caused concern as to how the u.s. dollar might appear on this side of the atlantic. the boe's mark carney must now help decide who should replace charles darwin's face on the british ten pound note. want to hear from you on this, head online to have your vote on who mark carney should choose to put on the ten pound note. does jane austen deserve the spot? or what about some of the other cnbc suggestions. choose from margaret thatcher, dame judi dench, jk rowling, dame kelly holmes or even posh spice. also asking viewers for some other ideas, one of our viewer tweeted in to say kate's baby bump or richard branson. and mike davies also tweeted, churchill, atly, somebody famous? keep your responses coming. keep in touch. we're on e-mail at @cnbcwex a

worldwide@cnbc.com and a couple of twitter handles out there, @cnbcwex or direct to me @cnbckaren. a bunch of earnings out from a whole varied amount of sectors. let's delve into the big ones. swiss drugmaker novartis raises its four-year outlook after posting sales just ahead of expectations in the second quarter. earnings per share fell. nordea posted a second quarter net profit of 772 million euros, slightly bigger than expected drop from 820 million euros a year earlier. the stock price is still up .2%. all weighed down by lower net interest income. and bhp billiton soaring today, another record rise in iron ore production. output reached 187 million tons,

increase of 9%. the world's biggest mining company is plowing ahead with plans to increase output further and said expansion of its iron ore operations in australia is running ahead of schedule. back over this way, land securities says 97.2% of retail portfolio is occupied. we have 52% of its latest city skyscraper nicknamed the walkie-talkie is already prelit. the share price just over 4% today. and the earnings day ahead looks like this. before the u.s. open, bank of america will report numbers with ebay, ibm, and intel the ones to watch after the close. thursday, it is the turn of the tech titans, microsoft and google, they'll both release second quarter figures. while at the end of the week, numbers from general electric. coming up next, we discuss managing your investments online with nutmeg.com. you can set up a portfolio in under ten minutes and reap the

rewards of nutmeg. what is a nutmeg? stay tuned to find out.

these are your headlines. the world waits on ben bernanke, markets in europe moved to the downside ahead of the fed chairman's testimony on capitol hill. china gets tough on bribery

and its pharmaceutical sector as swiss drugmaker novartis says it is not part of the probe. and barclays and traders fine $453 million following allegations of electricity price manipulation. let's give you a look at what's on today's agenda in the united states. june housing starts are out at 8:30 a.m. eastern, forecast to rise by nearly 4%. building permits are expected to rise 1.5%. 2:00 p.m., the fed's latest beige book report on regional economic conditions. meantime, it is a busy day for bank earnings again with bank of america, bank of new york mellon, northern trust, pnc financial and u.s. bancorp reporting before the open. sticking with the financials sector, nutmeg.com believes investing online should have the same ease and tran paresparency ordering a dvd from amazon. you can set up the portfolio in ten minutes and transfer or

withdraw whenever you like. still with us is shawn port, the cio at nutmeg.com. it sounds like a different way of investing for the retail investor. >> if you look at wealth management in the uk, over the last 200 years there has been no innovation. traditional wealth managers are carrying out the same service in the same way as they have done over many, many years. we're looking to deliver really high quality investment proposition to a wide range of clients but with the same clarity on fees, transparency and ease of use you get across the internet in other sectors, not just the financial secretarier. >> how important are lower fees now? >> in a lower return world, lower fees are crucial. if you pay 2% or 3% total fees, that's a massive drag. >> that was how we started out. if you look at the stock market fluctuations, is it really a lower return? >> you think about bond yields at 2%, actual ten-year or five-year will be low over the next few years.

equity is a different story. look at broad asset classes, we're in a lower term world and you can't afford to subtract 2 or 3%. >> you call yourself an active asset allocator, etfs have been considered passive. how can you be active using a passive tool? >> lots of vars have shown that outperforming large cap uk u.s. stocks is a fruitless task. should be looking to deliver the asset class. you can get a great range of asset classes within etfs, do the emerging market bonds, different regions, a great range of asset classes that will deliver that market return. >> etfs have been so volatile with the market volatility, enormous outflows. how do you avoid that? >> you have to choose your asset classes carefully, think about valuation, flows. etf gives you access it a lot of asset classes you can't get access to easily as an individual investor. great deal of diversity and cost

and exception, transparency is low, we can show what is in the por portfolio at any one time. >> shawn port, thank you. a u.s. watchdog hasc confirmed that barclays will have to pay fines. the case dates back to october. barclays has 30 days to pay and investors have largely shrugged off the news. here is a look at shares in barclays currently, how they're tracking on the share market. they are down a little bit, but we are in a broadly weaker market now as well. heller joins us with more on this. this is something the market has been aware of. flush it out for us. >> look, barclays is refuting this. they're saying that folks challenge about the manipulation is completely wrong and they have to take them to court to make them pay. they're saying they didn't manipulate these energy markets,

they're not responsible and they have cherry picked some of the data to make these ludicrous claims against their traders. now, if that works, then it is no big deal. i think the wider question is how many more bank scandals are we going to see? that's what investors are worried about, though we have provisions for ppi and libor, interest rate swaps, the fear is how much more benchmarks may or may not have been manipulated. has there been misselling in other categories we don't yet know about. libor, it took years and years for us to get to this point. i think that's what investors are concerned about. >> investors are saying this is not material. i wonder whether this is not material if you look at power trading for the likes of barclays. does it impact their activities and the way they generate profits in the future? >> absolutely. the further attack on trading profits at the banks. bigger fine than we saw in

libor. it is a really tough decision for management to decide whether to fight this or not. new management, should they move on or fight this? it is a difficult decision. >> barclays is saying in the past, when we feel like we have done something wrong, be it libor, be it ppi, we have put our hands up and said, fine, fair enough, we are settled. in this particular case, we do not agree that there was any manipulation of prices and we will go to court to fight it. there is a slight difference, we had a fine on deutsche bank for the same manipulating energy prices in california, that was only 1.7 million pounds. much smaller. they settled with regulators over there. but, again, the question is what else is out there on a bank's balance sheet that could be affected by potential scandals going forward? >> you're right, when this one first came out, it felt as though investors go, wow, what is this for, you know, where is this fine coming for, for the power trading? that's one that people didn't

expect. >> absolutely. where else are these sort of cobwebs, other issues in bank activities that we don't know about. could electricity, gas trading, what other activities do we not know? >> other commodity prices, remember the fca is currently investigating which other benchmark rates have been manipulated, and that's going to include a lot of things that barclays trades in. >> thank you very much for that. thank you for joining us today. still to come on the show, yahoo! ceo marissa mayer takes to the airwaves to speak and to explain the company's latest earnings report to analysts and investors. we review the highlights and low lights of yahoo!'s second quarter numbers. and we leave you with a view of the heat math. you can see we're weaker across the charts and tracking do down .4%. and what is turning out to be a fairly cautious session. coming up to ben bernanke's testimony later today.

marissa mayer marks her first anniversary as yahoo's ceo. cnbc's jon fortt breaks down the good and bad news in the numbers. >> last night yahoo! turned in

some q-2 numbers that were not all that exciting. not to yodel about anyway. revenue missed while looking for $1.08 billion in revenue. they got 1.07. epfs was better, 35 cents versus 30 expected. and yahoo! guided down for q 3 in terms of expectations and for the full year. the previous midpoint of expectations are where yahoo! had guided anyway was $4.55 billion in annual revenue. that's now the high end of the range that yahoo! was guiding toward, the midpoint of the ebitda range was 1.65, that is now the high end of the range. cfo ken goldman saying even though they have adjusted, those ranges down, don't think that the executive team is taking an eye off the ball. they are still pressing toward their original goals for the year. part of the reason for the short fall here, display advertising, yahoo!'s core business,

continues to be under pressure. they tu the reason a lot of premium ads shifting into nonguaranteed and a lot of domestic ads shifting to international where there is less revenue per click. also, in search, $403 million in revenue on the search line versus 425 in the previous quarter. search continuing to grow for yahoo! marissa mayer says she wants to grow it even fast, but, again, some of that search click volume shifting international has led to while they're getting more clicks, lower price per click. mayer and goldman had an interesting call, first time doing a video earnings call, not just audio this time. they were on camera for almost the entire time. they came off camera to show some charts and while the analysts asked some questions, nice way to drive traffic to yahoo! finance, which happens to be cnbc's partner, that was a big part of the reason. new look for yahoo!. investors after hours perhaps

seemed to like it. the stock took a dive nerblly on the low revenue and the disciplining decide ae ining gu. by the end of the call, slightly in the green. italy posted a surplus of 852 million euros. this is a deficit same time last year of 1.18 billion euros. so significant turn in events. this is driven by the balance of payments and improvement by trade surplus. so it is significant turn of events for italy. the numbers released by the central bank there today. still to come on the show, intel is reporting second quarter earnings after the bell. analysts expecting another drop in revenue. can the chipmaker beat the gloom in pc sales? we'll discuss that live from new york after the break. and here is a look at futures which are looking a little softer ahead of the open on wall street. right across the board. on the s&p 500, the dow and nasdaq.

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welcome to "worldwide exchange." i'm karen cho. these are your headlines from around the world. when ben bernanke speaks, global markets listen. european stocks mostly in the red. investor await the fed chairman's testimony today on monetary policy. it is a mixed picture for marissa mayer as yahoo! reports better than expected second quarter profits. but revenues slide again.

novartis says it is not part of china's probe into alleged bribery in the pharma sector. this after the chinese state paper demands a crackdown on foreign companies. the swiss drugmaker also raises its outlook on the back of strong q 2 sales. and the u.s. energy regulator fines bar claz aclays and trade million for allegedly manipulating energy prices in california. but investors shrug it off as analysts call the amount not material. if you're just joining us in the states, thanks for tuning in. here is how markets are faring ahead of the u.s. open. we do have futures called higher initially. you see sentiment has turned cautious now. we are coming up to a big speech by ben bernanke later today. so markets in europe, but also

across the states before trade. looking like they're going to wait it out to see what talk of tapering looks like this time. volatile markets out there, of course. we had fresh peaks on the u.s. markets of late. we saw a bit of selling yesterday. may continue that trend this morning. the ftse cnbc global index, the 300 is also now negative territory, so coming right back from an intraday peak. the turn in sentiment witnessed there. across european markets, how indices are shaping up. the ftse was higher by half of 1%. now down almost .4, so fairly big swing in session. the xetra dax had modest increa increases, a quarter of 1%, down .6%. the ibex, biggest volatility, now shedding almost .9% from initial gains. the cac declining half of 1%. intel is set to report second quarter earnings after the u.s. close. analysts expect earnings per share of 39 cents on $12.9 billion on revenue for the

quarter. in terms of this, this would stimulate 4.5% decline year on year. the chipmaker's revenue dropped to an average of 3% over the past four quarters amid a state decline in pc sales. joining us over the phone, from new york, is robert shaw, the executive director and senior analyst. give us a sense of what you're looking for in the intel numbers given the pc sales decline has been an industry wide trend that intel has been trying to get ahead of. >> hi, karen. for tonight i think intel, you know, a few things, one, will probably lower forecasts for the full year because as you mentioned pcs continue to be weak. gross margin is always an area of focus and actually should be better. and i think the biggest thing tonight will be just insight into the strategic vision of new ceo brian kuzanik. >> he comes to the company from the internal operations and he

was an analytical engineer. some people say this goes to the strength that intel always had, the superior manufacturing. what is he going to spell out to investors about how intel is positioned for the future? >> well, i think he's definitely going to talk about some of the traction they're gaining in mobile and some of the opportunities they have to outsource their manufacturing business to third party customers. though, you know, i think one of the more important points to focus on will be, you know, just given that structural head winds facing intel and the pc industry, most people don't believe that revenue growth can be more than 5% a year, so given that, you know, as you look at intel, is this a company that still needs upwards of 80,000 employees to support the organization. >> 5% increase in revenue is modest for what is meant to be a growth company. one of the key decisions that the ceo had to take was whether to unveil this -- or pull back

the secrecy of its manufacturing operations and conduct production for some other companies and there had been deals already. altera is one deal struck and there is suggestions that it may try manufacturing chips for the likes of apple. wouldn't this be a strong revenue model? >> you know, we have been hearing those rumors about intel and dealing with apple for almost a year. but over the last month or so, it sounds like the talks between the two have actually died off and, in fact, this week there was a report from a korean newspaper suggesting that apple may actually move back to samsung for the development and production of the processor that is going to go in the iphone 7. so things may be changing, this manufacturing business may turn out to be a niche business for intel. >> you mentioned the move to mobile and tablets and this is what the chipmakers are trying to do as well. how competitive is the space? >> it is very competitive. i mean, they're starting with

almost no market share, but at the same time, they're definitely gaining traction. samsung's next generation tablet platform, a good win, i think the problem is that, you know, revenues from mobile for intel will be immaterial for a very long time, so as you look at it from a stock perspective, design winds and mobile are probably not a big deal for intel. probably a big ev negatiger neg others like arm holding and qualcomm. >> tell us about your target price. $18 on the stock. give us some more detail around that. >> yes. so $18 price target, you know. my forecast for next year is, you know, eps of a little less than $2. and, you know, look, our perspective is that intel's revenues are going to continue to decline over the foreseeable future and given that, the markets probably not going to be

willing to pay more than ten times, so ten times eps of a little less than $2 gets you around our target of about $18. >> so take the returns, 10% you had for the past six months and lock it in. robert shaw. another day, another twist in the dell buyout saga as a key shareholder vote looms large. jackie deangelis has the latest from cnbc headquarters. jackie? >> good morning to you. well, dell special board committee is once again urging shareholders to back michael dell and silver lake's $24.4 billion buyout offer. the panel is also criticizing carl icahn's latest counterproposal, which he unveiled last friday, and which -- in which he says he values the pc maker at $15.50 to $18 a share. they say the offer is too risky. icahn hit back releasing income statements showing how dell

would still be viable if his proposal was adopted. the offer by icahn and southeastern asset management is contingent on dell shareholders voting down the buyout bid and voting out the board. investors are scheduled to cast their ballot on thursday when dell holds a special meeting at its headquarters in texas, starting at 9:00 a.m. eastern time. reports saying that that meeting could be postponed to try to win more support for the deal, but michael dell and silver lake are holding fast on the terms of the buyout. all things digital reporting that they're prepared to see the deal blow up rather than raise their bid to $13.65 a share. another big shareholder may be lining up against the buyout as well. cnbc reported on tuesday that black rock will vote no. checking in on dell now, in frankfurt, we're seeing the shares down by 1.6%. and carl icahn may get the last word before the dell shareholder vote. he joins the fast money crew today 5:00 p.m. eastern from the dri delivering alpha conference.

back to you. >> thank you very much for that. on to some of the other stories we're tracking for you. 7.5% growth is good enough, it seems, for most foreign investors, talking about china here. in june, they put 20% more money into the mainland than a year ago, that's the fastest pickup in more than two years and shows investors were still optimistic about china's potential. first half data shows steady gains in fdi from the u.s., japan and europe. china's top state newspaper wants a crackdown on bribery by global firms. the people's daily says multinationals are exploiting a lack of oversite and beijing must do more to keep competition fair. the editorial comes days after chinese detained four glaxosmithkline executives for allegedly bribing doctors to boost drug sales. and a new media report citing a hong kong lawyer says china's expanding the probe to at least four global firms. today's swiss drugmakers roche and novartis clarified they had not yet been contacted. reuters sources say china's

international has mplans to lis in hong kong. sources say a $4 billion ipo would give the merged company more access to investors and higher market value. under hong kong rules, new owners of merged companies have to be in place for a year before listing. we're going through a break. but bank of america picks up the earnings baton for big u.s. financials later today. we'll preview the results after the break. ♪

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a federal judge ruled the the u.s. government can pursue $5 billion civil lawsuit against standard & poor's. the justice department claims the rating agency misled investors by not being objecting in rate brgz the u.s. housing crisis began in 2007. it could win more fees from issuers and bankers. 14 u.s. states and the district of columbia are also separately suing s&p over similar claims. s&p's parent company has been trading like this on the general market today, down almost 2.5%, more than 8% firmer for the year. the u.s. senate confirms richard

cordray as the head of the consumer financial protection bureau after lawmakers struck a deal to avert democrats threat to change filibuster rules for presidential nominees. president obama installed cordray as head of the agency early last year after republicans held up his nomination. under the deal, the senate will confirm 5 of the president's nominees. and in corporate news, chevron returns to argentina signing a joint venture deal with ypf on a shale oil project. it is the first major outside investment of the company's energy sector since the president ordered ypf to be seized from spain last year. argentina's government has agreed to let oil companies export 20% of the crude and natural gas they produce in the country tax free, which paved the way for the chevron deal. these are your headlines today. f

the world awaits on ben bernanke. china gets tough on bribery in pharmaceutical sector as swiss drugmaker novartis says it is not part of the probe. and barclays and its traders fined $453 million following allegations of electricity price manipulation. it is a big day for u.s. bank earnings, several companies reporting second quarter results before the opening bell led by bank of america. cnbc's kelly toshi reviews the numbers for us. >> bank of america's second quarter is expected to be rosy. analysts forecasting it to earn 25 cents a share that would be well received by investors who saw several quarters of earnings being wiped out with legal settlements in the third quarter of 2012. b of a barely broken even when

it settled a class action suit over its acquisition of merrill lynch. in the fourth quarter it settled with fannie mae. the most recent quarter, settled a years long battle with mbia for $1.6 billion. bank of america took big strides in closing retail branches. investors are eyeing progress in that area as well. investors will be looking for insight on where the mortgage market is headed from here. in april, bruce thompson said, quote, we have more people, more training, we're up to speed, and we don't see the pipeline slowing down, i don't think there is anything honestly, any cap on where this could go in the month since then, interest rates on mortgages have skyrocketed and rival universal banks like jpmorgan have cautioned on a sizable slowdown. by the looks of the stocks, investors don't believe b of a put all its eggs in that basket. shares pierced $14 level, double where they traded a year ago. looking to some of their peers that reported like goldman sachs and citigroup, the group could

see strength in investment banking but fears of thinning margins as rates stay low. the numbers hit at 7:00 a.m. eastern. back to you. >> we're going for a break. coming up, ben bernanke set to be grilled by u.s. lawmakers today as the fed's bond buying program takes center stage. we get insight on what wall street and main street wants to hear from bernanke straight ahead. [ male announcer ] it's time.

time to have new experiences with a familiar keyboard. to update our status without opening an app. to have all our messages in one place. to browse... and share... faster than ever. ♪ it's time to do everything better than before. the new blackberry q10. it's time. sentiment has been weak across the european markets. let's take another look. the ftse down .5%. the xetra dax extending losses now in germany. the ibex has been the worst performer, the spanish market down heavily. and the cac shedding .6% in france. don't forget these markets are trading in positive territory early on in the session. so the sentiment is just turning

sour as we come up to what ben bernanke will say in his testimony. feels as though the bank of england has put some concerns out there in the market, some of the members in minutes today suggested that more qe could complicate the return to more normal policy and this has been exactly the fears that permeated across on wall street as well about tapering and the futures this morning suggest that the u.s. markets will start on the back foot. fed chairman ben bernanke goes before congress today to deliver likely for the last time part one of his semiannual testimony on the economy and monetary policy. he testifies in front of the house financial services committee at 10:00 a.m. eastern. though the fed will release his prepared remarks at 30 a.m. he is expected to trade carefully, balancing a message of the fed's continued support for the u.s. economy. also reminding everyone that the central bank's easy money policies can't last forever. how do you trade ahead of

bernanke's testimony? here is what some of the experts have been telling us this morning. >> i think it is clear that the fed needs to start thinking about reducing the amount of stimulus that they're providing to the market and the economy, but they're not going to be sort of done until -- with the qe until probably the unemployment rate reaches 7% at which point they will keep the balance sheet constant and then, you know, think about hiking rates sometime next year. >> certainly not quite -- it will happen in september and therefore the markets will react about that. it is clear i would suggest that markets in general become very, very dependent on the kind of stimulus drugs associated with qe, any hint of taking it away has caused some disturbance. i'm not sure the market is that convinced recovery is coming through and more focusing on bernanke wasn't so clear cut in the initial supposedly hawkish

tone. >> half of the fed or half of the fomc want qe to end by the end of this year. but then several don't want tapering to begin yet because they feel over market conditions haven't improved enough. so you got a huge divide and yet half want qe to end by the end of this year, therefore, i'm definitely still in this september tapering. >> joining us from new york is chris rupke, chief financial economist at bank of tokyo. the markets have been trying to anticipate when tapering is going to start. what is your view? will it be september or later? >> well, i'm not a big fan of qe. it is the fifth year of the expansion from the end of the recession. we have never had a fed who continues to stimulate the economy this late in the day. but the fed chairman himself, in may, may 22nd, he put it out

there that they could taper, begin the process in the next few meetings. they tried to narrow it down a little, does that mean by september and he said it depends on the economy. so, you know, he -- i hope they make the initial step beginning in september. i mean, they're only talking about some of the hawks on the committee are talking about cutting 85 billion per month down to 75 or only 65 billion. so it is not a big cut to qe. i hope they start in september, but i believe he'll say it is still conditional on the economy. >> some of our expenses saying significant move on tapering would be what the market would look for, say a move back to 45 billion. why do you think it would be a slower exit initially? >> well, he -- yeah, he told people that they would finish qe when unemployment rate gets to 7.0. so it is going to be very much

conditional on the economy. i can only point to one of the philly fed president plosser who said the cutback might be 75 or 65 billion. that's why i think it will be a gradual process because he said 7% unemployment would be hit in midyear 2014. so you don't want to cut it in half right away, from 85 to 45 billion knowing you're not going to be done at the earliest until midyear 2014. >> chris, looking at the early futures this morning, and the european markets today, these indices are tracking weaker, which concerns me, because so many market participants are saying investors are now taking in that talk of tapering. why are the markets down today? do you think there is more potential? >> i think we had a run through of the market volatility last wednesday when he spoke before the national bureau of economic

research. he kind of came out and said, or the market thought he said qe is still very much full on, and, you know, there is quite a bit of volatility. the dollar went down a couple of cents against the euro. it was quite dramatic. now, i think we kind of have gotten that out of our system. we'll see what happens when the actual testimony comes out at 8:30. there is going to be two parts to this. 8:30 new york time. the testimony is coming out early. he is giving the first part of this monetary policy report before the house and that means the republicans there, i think, want to have the testimony early so they can ask him quite pointed questions. as you know, they're not exactly in favor of qe. >> thank you very much for the analysis, chris rupke at bank of tokyo mitsubishi ufj. coming up on cnbc, tune in at 8:25 eastern as u.s. treasuries secretary jack lew kicks off a stellar guest list at delivering alpha conference.

also at the event, we're going to be hearing from carl icahn as the battle for dell heats up. shareholders are to vote. and the lineup continues with john paulson, the hedge fund manager due to speak at 1:40 eastern. we find out how his bet on gold stocks is playing out and how he's positioning ahead of tapering. and finally, we'll be hearing from the billionaire investor nelson peltz. find out what he's doing with his money at 2:50 eastern. and you can also find out more about the conference on cnbc.com, follow the latest developments on twitter with #deliveringalpha. that's all for today's show. i'm karen cho. thanks for watching "worldwide exchange." appreciate your company today.

this is a special presentation of "squawk box," live from the delivering alpha conference in new york city. it's a virtual who's who in the world of investing. nearly $2 trillion of investable assets will be represented by more than 100 influential institutional investors. among our guests this morning, jim chenos, bridge water associate's david mccormick and u.s. treasury secretary jack lew. it's wednesday, july 17th, and "squawk box" begins right now. ♪ i'm back back in a new york groove ♪

>> okay. good morning. good morning. and welcome to "squawk box." we're live from the pierre hotel in midtown manhattan. even though with a jacket on, i am still joe kernen. >> you still are. >> this is everything that you've dreamt of, jack, at the anchor thing here. >> more britney spears than true anchor. >> britney spears. >> or madonna. >> i think madonna. >> you had your -- you and eliot spitzer. >> you're promising to wear the cones. >> in the 7:00 hour. >> becky quick is here, looking resplendent and andrew ross sorkin is here. the s&p 500 and nasdaq falling for the first time in nine sessions. u.s. equity futures this morning on the other hand are headed lower. but it is early. the big driver today is going to be fed chairman ben