hi, everybody. welcome. you're now watching "worldwide exchange." i'm louisa bojesen. new hope for stable growth in china after july trade figures beat expectations and could stave off stimulus from beijing. japan's central bank governor urging the abe government to stick with planned sales tax hikes with the nikkei being very volatile, reversing its early gains. and shares in commerzbank have been soaring to the top of the stock 600 in europe, up by almost 10%, traders are cheering a couple of bright spots in the earnings as the group's restructuring program takes

hold. deutsche telekom betting big on the u.s. thanks to stronger customer growth in the market. the group is cutting its cash flow target as a result. investors are buying into the turn around. hi, everybody. good morning. very glad that you're with us. we have a full two hours of "worldwide exchange" for you. i'm very pleased to be here for the next two hours alongside with a whole bunch of good guests. just before we get to the business aspect of today's session, i just want to tell you about some flashes that are coming through on the wires, where essentially we're seeing that an imminent quake warning has been issued for japan. they're sourcing nhk. the quake is centered in western japan. again, according to those sources. we'll continue to keep you updated on this story as we get

the details through. but on to the show, we'll also be taking the pulse of the insurance sector as earnings at the uk's viva beat forecasts sending shares sharply higher. we'll bring you analysis on that at 10:20 cet. not so picture perfect. nikon's earnings failing to impress as they cut their four-year profit target. we'll get the latest from tokyo at 10:35 central european time. and greece's prime minister is meeting president obama as the imf is warning of a new capital short fall. is the u.s. the answer to greece's economic woes. we'll be discussing that with the country's former transport and infrastructure minister at 11:20 cet. and find out why companies are missing out as digital advertising takes off. we'll look at a potential winner and losers also with the wall street journal's john jeneron.

and deutsche telekom warning of a profit slowdown in 2013 and looking toward north america for growth. where are the opportunities for this particular sector. we'll talk about that at 11:50 central european time. hope you had your pens and pencils ready. you can find us on e-mail as usual, worldwide@cnbc.com. and you can as per usual find us on twitter. but, again, just coming back to one of the stories breaking on our wires, we're hearing that there has been a quake in western japan. no tsunami warning issued according to dow jones news wires quoting media and magnitude of 2.3 is the magnitude of this quake in western japan. again, no tsunami warning issued. let's move on, though, because china's trading activity in july has given new hope that mainland growth is stabilizing. exports climbed by around 5%. imports surging almost 11%. both figures were a lot better

than analysts estimates. the rebound comes as a surprise given china's lackluster trade performance in the past couple of months. that's after authorities clamped down on illegal cash transfers disguised as trade deals. joining us from hong kong is an economist from longbird street research. good to see you. what do you make of these chinese trade dates. were you surprised? they're a lot better than anticipated. >> yes, surprising, a little worried about taking this at face value and just reading this as an indication that the chinese economy is picking up. there is a few little worries that are coming up, both on the import side and export side. on the exports, the exports are down for july on the q-2 average. that's not very good in terms of growth. i think the import side of things could actually be telling us more about the liquidity situation in july than it is about trade in the sense that we did see the missing voice in

q-1. that was more on the export side. we had overinvoicing of exports in q-1 indicating capital going into china and now our own growth estimates for q-2 were actually flat or even negative on the previous quarter. so the situation would indicate that capital has turned around. that would actually be consistent with the trade data and the imports we have seen. so it could actually be telling us more about liquidity than it is telling us about trade. >> some analysts this morning voicing a bit of concern that there is a big discrepancy between what is being seen in hong kong versus what is being seen in mainland china. how concerned are you about that? >> yeah, these are exactly the points that the leaders think it is not necessarily telling us as much about trade as it would be on the kind of face value. you have overinvoicing of imports and that is consistent with whap tal outflows and kind of you have potentially -- there

is actually some strange in the copper was one of the ones that stood out there. but that could be telling us more about companies using copper to get cash as collateral and that, again, tells us more again about liquidity than strength of the economy. if we think about what is actually happening, the likelihood is the weakness in the profits and the cash squeeze is going to filter through to the private consumption and that's going to give us a big problem in the rest of the year. >> precisely on that copper point, i looked up the figures and thought maybe it might have something to do with the tightening conditions, that people are choosing to put their money elsewhere. >> i'm sorry. >> just that it could have something to do with the tightening conditions, that people are choosing to put their money elsewhere with regards to why it is that we're seeing the copper prices, for example. >> yeah. i mean, that's kind of the point that's being made, yeah. >> yeah, yeah.

preva, thank you for being with us. you're staying with us. in the meantime, we need to bring a couple of other points into the conversation because no change from the bank of japan today. it kept policy steady, citing a moderate recovery in the economy. the bank of japan didn't upgrade its view on the economy, but it did sound a bit more upbeat about prices, saying that inflation is likely to gain pace in the months ahead. the central bank governor, mr. kuroda, also fired a warning shot at the abe government in his press conference. he urged cabinets not to ease up on fiscal discipline saying that a sales tax hike wouldn't stop the economy from beating its growth targets. now, essentially, what we saw today on the nikkei was quite a bit of volatility before the close. initially we fell a little bit, then came up again and then fell back into negative territory on the close. closing off by approximately 1.6%. joining us from tokyo is kenji abe. what is your reading of the bank

of japan? keeping the policy unchanged, also the economic assessment unchanged too, why the volatility in today's session? >> let me comment on the boj's decision. the japanese economy has recovered and the rate has edged up as predicted in the boj's forecast. so i think it is quite natural for the boj to keep its policy unchanged. and i think mr. kuroda doesn't feel necessity to change policy at this stage, as the boj had expected. on the other hand, the market is quite volatile. one reason is it is -- i think that's a main reason why volatility is high. >> yeah, and also a big holiday coming up as well. i know a lot of people are

talking about some options volatility as well. but, kenji, looking back at the bank of japan, doubling monetary base to $2.8 trillion by the end of 2014, they're still buying around $77 billion worth of bonds per month. is the japanese economy really recovering, the real economy is it recovering or simply due to all the help that the stimulus is providing? >> i believe that the japanese economy is recovering and faster than the yen depreciates. and that's stimulating consumption. now we're seeing good results. and then companies are likely to increase capex and increase payments to their employees so the wages are going to increase. we start to see increasing bonuses already but regular basic salaries are likely to increase next year. so we're seeing the real

recovery in the japanese economy, caused by the yen weakness and the policy, but now the economy has its own engine and it is recovering with its own engine. one thing worries us is with the sales tax hike next year, how much is that going to have a negative impact on the japanese economy. that worries economists in japan. that's a very controversial now. >> what is your take on the japanese economy and the stimulus being provided? >> well, i guess -- not really to do anything that is changing the economy structure. so what we have seen, we have seen the yen drop and we have seen import prices rise and that's why they're getting the inflation. the energy prices are filtering through to the consume er price through the wholesale prices and the commodity prices. what is that doing, it is having

a negative impact on consumer real incomes and that's the opposite of what you need to have. if you want to have a structure rebalancing in japan, there is an arrow that has gone missing and hasn't materialized. what would you need to see in order to get much more positive or maybe you would have to think about looking at retained earnings and maybe trying to get that retained earnings segment into the pockets of households in some way. perhaps through a tax or perhaps through incentivizing dividends. >> yeah. kenji, i'm wondering about the yen. we had, what, some seven weeks or so of rises now. is the yen weakness trade over, do you think? >> i do not think so. there are two engines for the yen weakness. first is rises in expected inflation. the second engine is rises on u.s. interest rates. on the japanese economy, the

rate is going -- that causes expectation for inflation to rise. some people are still skeptical as they observe inflation rate. are they going to change the expectation for inflation? and the second engine is rises in u.s. interest rates. the fed gets closer to the exit of monetary easing, it is likely to steepen. that will cause the yen to depreciate further. i still believe the yen weakness continues. >> kenji, thank you. kenji abe, equity strategist from japan. as we were just saying, one of the best trades this year has precisely been betting on yen weakness. if you want to read more, head to our website, loads on there about this. you can find out what the analysts are thinking, the best trade of 2013, is it losing its luster. south korea's central bank

held its key rate at 2.5% for the third month in a row as expected. the bank of korea is expecting the economy to gradually improve and inflation to remain tame for a while. but the bank's chief says that fed tapering and a potential chinese slowdown remain risks. speaking of the fed, the cleveland federal reserve president sandra pianalto joined the chorus of fed policymakers who say the bond buying program could be tapered soon. while she didn't indicate a time frame for a scaling back the bond buying, her comments follow on from charles evans and lockhart who point to september as a potential start date. pianalto's views are seen as being particularly significant because she typically tends to reflect the emerging consensus on the fed's policy committee. what do you think? could we see tapering beginning for the fed as early as september? next meeting is, what, 17th and 18th of september.

>> i wouldn't expect there to be any great moves before the end of this year. i think the fiscal consolidation hasn't really filtered through to the economy yet in the way we would expect. so having said that, kind of going into 2014, we are expecting a much stronger pickup from the u.s. and the repercussions for asia for that, before you think about normalizing interest rates or kind of even before you think about qe tapering, dollars are naturally going to be sucked back to the u.s. if that is a strong story in the way we expect. and that has large implications for all of asia, particularly real estate, particularly korea has often been very sensitive to dollar liquidity. >> yeah, and precisely on that point, south korea leaving rates on whole at 2.5%. the inflation story, though, remains one that all the central bankers at the moment are looking very closely at whe. where are we with south korea and inflation? >> there isn't a great deal of inflation on the horizon as i see it. we had an output gap that's been

negative for a long time now. and that in the minutes themselves they expect the output gap to remain negative, kind of going forward almost indefinitely as it is impossible to have an indefinitely negative output gap. they don't seem to have a potential for a rise in the near future. so domestically there isn't a great deal of pressure there. and also korea is one of the few asset markets, real estate markets in asia that hasn't had a big run-up in prices and prices are falling there. so from both per spectives like commodity prices and cpi, ppi and asset prices and the real estate, that's not an inflationary scenario. >> thank you very much for being with us. good seeing you. for more on the markets in asia, let's go straight out to li sixuan in singapore. sixuan, take it away. >> thank you, louisa. stronger than expected trade figures out of china gave asian markets a modest boost.

china saw some profit taking ahead of tomorrow's inflation data. the big trading partner australia outperformed, up 1.1% today. investors shrugged off weak jobs data at home and sharing the fact that chinese imports of iron ore jumped over 17% in july. with boj and bok standing pat on policy, at the kospi finished in the green today, higher by .3%, but the nikkei 225 reversed early gains, ending down 1.6%. and japanese exporter stocks were broadly weaker today while the yen is trading just above the 96 handle against the greenback. panasonic and toshiba lost some 2% to 3% in today's trade. isuzu motors tumbled over 4%. let me show you some commodity plays in the region, given the solid china trade data in commodities. australia's rio tinto climbed 1.5% today ahead of earnings

that came in line with forecasts after the market closed. in hong kong, chinese coal miners were on fire today after news that more coal producers are hiking their prices. china coal rallied 2.5%. back to you. >> sixuan, thank you very much for that. now here in europe, we have seen markets opening on a slightly tender note this morning. we're just coming back a little bit from an early morning start that was slightly to the downside. higher by a couple of points at the moment. holding a little steady, having dipped a tad and a little lower. you remember that yesterday on the close we saw markets closing slightly mixed. the southern bit of europe closing a little higher. central europe closing a little lower. the ftse, xetra dax, ftse mib and ibex higher by half a percent at the moment. seeing some delicate gains being

put on the trade data in china, taking center stage this morning coming into the session much stronger than an tis paced. exports and imports outperforming quite significantly. the bank of japan keeping policy unchanged. sectors, here we're looking at quite a bit of activity in insurers. a number of earnings of through for the insurers. we'll talk about that later on in the program. banks trading higher. basic resources up by 1.7%. we'll talk about the mining sector later on the show too. travel and leisure, utilities and food and beverages taking a little money off the table there. the currency markets, well, yesterday, a lot of focus on sterling given the forward guidance coming through from the new bank of england governor mark carney. indicating ranks will be remaining at the very low levels for at least the next three years, smart viewer wrote into me last night and said why are we calling it forward guidance as opposed to backward guidance.

nevertheless, flat to a little higher. fed speak indicating the tapering talk is still gaining some traction. dollar yen flip-flopping now. aussie dollar a little higher. you got sterling up by just a tad against the dollar as well, falling from yesterday's moves. so that's what we're looking at here at the moment. but a new low for lobsters. lobsters of all things, prices continue to fall, we'll discuss this and the outlook for the luxury food sector. that's coming up here in a couple of moments time. you're watching "worldwide exchange" here on this thursday morning. find us on e-mail or on twitter. and i'll see you in a second. [ kitt ] you know what's impressive?

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hi, everyone. welcome back. you're watching "worldwide exchange." quite a few earnings to keep your eyes on this morning. nestle has cut its growth target citing a weak operating environment in europe. the world's largest food group saw prices erode saying organic growth was somewhat muted. they missed expectations and the company now sees sales growth of around 5%. times are also tough for another food group, the prices of lobsters have dropped sharply in recent months. the fall is due to oversupply as warmer waters have helped the

shellfish grow faster. harvesters in maine surged from 28 million pounds in 1990, 28 million, to 126 million pounds last year. so huge growth, according to the financial times. lobsters have become cheaper also because of a falling global demand for the luxury dish after chinese consumers drove prices of the seafood to all-time highs. i still don't like it when you see lobsters being put into the big boiling dish. anyway. what luxury food item do you think is the most overrated? if you want to join the conversation on "worldwide exchange," get in touch directly with us by e-mail, worldwide@cnbc.com, or you can find us on twitter, @cnbcwex. that's @cnbcwex. or directly to me me, @louisabojesen. which food item is the most overrated, do you think, luxury food item? henkel confirmed its outlook for the year after reporting results were in line with estimates. the german consumer products group reported a rise in sales

and adjusted operating profits for the second quarter, driven by business in emerging markets. now, earlier the ceo of henkel spoke to cnbc about its growth story and the outlook. >> we grew 4% in the first quarter, 8.9 of nine of the emerging markets, three out of four were double digit. china, india and brazil double digit. we saw russia being strong. so 45% on total basis caming from the emerging markets. he can grew operating earnings by 90 basis points and 10% on eps. overall, good quarter. but we don't see a general market pickup. >> now, adeco has also posted a better than expected net profit in the second quarter of 126 million euros, despite a 3% drop in revenues. the world's largest staffing company is confident going into the second half saying labor markets in europe are stabilizing. the group is planning a new share buyback. we have germany's former phone monopoly deutsche telekom reporting second quarter

earnings in line with market expectations. the company says it is cutting its full year cash flow goal to 4.5 billion euros as it looks to fund growth in the u.s. earnings expectations for 2013 were trimmed to 17.5 billion euros. the german carrier is saying it expects its t-mobile usa unit to add more than half a million customers in the second half of the year. the telecom sector, speaking of which, has seen a surge in activity in the recent months. coming up at 11:45 cet, a view on whether or not t-mobile could potentially be a takeover target. some are saying it very much is. in banking, it has been a tough first half and second quarter for commerzbank. the german lender posted a loss in the first six months of the year and it missed its quarterly expectations. they said the weak european environment and low interest environment as well contributed to the numbers. italy's bank cutting its net loss to 279.3 million euros in

the second quarter. that was an improvement from the 1.6 billion euro loss from the period a year ago. the results are falling short of analyst estimates hit by lower loan loss provisions and the lender's ceo said he was ready to improve a restructuring plan to meet with the european commission demands to secure state aid. shares down by, what, some 9% or so this year, almost 10% this year, not whornorth a whole lota share by share basis though. as usual, continue to find us, if you want to e-mail through your questions or comments, for the show, for anybody on the show, worldwide@cnbc.com. that's the e-mail address. or you can find us directly on twitter as well, @cnbcwex. or directly on my page, page, @louisabojesen. still to come, here on the show, a mixed picture for europe's insurers as the periphery continues to weigh on

the earnings. it is interesting. we'll discuss results for aviva and other key players in a couple of minutes time. good morning, everyone. .

hello, everybody. welcome back. i'm louisa bojesen. new hope for stable growth in china after beating expectations and could stave off stimulus from beijing. japan's central bank governor urging the abe government to stick with planned sales tax hikes with the nikkei being very volatile in the overnight session, reversing earlier games. shares in commerzbank soaring to the top of the stock 600 in europe up by 10%. traders cheering a few bright spots in the earnings as the group's restructuring program is taking hold. deutsche telekom betting big on the u.s., thanks to strong consumer growth in the market. the group cutting its cash flow target as a result, but investors buying into turn around. this is what we're looking at this morning on our european markets. we are a couple of points high, modestly higher this morning.

the cac 40 off by a tad. yesterday, we saw the market closing out slightly mixed with most of europe being in negative territory on the close. a bit of rejigging after that close yesterday. the bond markets we have seen spreads widening. there is a divergence if this will continue. the fed speak becoming more hawkish, given that pianalto spoke yesterday, sandra pianalto, and she tends to be more on the dovish side, leaning to more of a hawkish tone and is seen as a precursor of what the fed officials are thinking the at the moment. the ten year bond yields looking like this. we're seeing them all moving a tad lower on this morning's trade. currency markets pretty stable too. dollar yen flat to a little bit lower. head to our website and read more about whether or not the yen weakness trade is over for the time being. the euro dollar float at to a le high, but having come right up

there once again. in the corporates, though, swiss rio had better than expected results. the world's second largest reinsurer saw a net profit of $786 million over $100 million more than expect pre detectived. t swiss rio in this morning's trade off a tad over the past seven days, lower by over 2.5%. results for the second quarter falling short of expectations. fell by 2%, it blamed hedging losses claimed by higher equity markets and volatility. the company saw underlying earnings grow by 5% thanks to business growth and is now planning to raise its dividend. just checking in on the aegon shares, lower by almost 2.5% with the last 12 months, a nice run.

see, 45% higher over the last 12 months. earlier alex vianitz spoke to cnbc and explained the mixed results and why the protects they put in place had lost them money. >> we are benefitting from higher equity markets, we are benefitting from higher interest rates, but because of the sector we hedged our capital position. that has a negative impact on our net income on the quarter by quarter basis. all the positive effects emerge overtime for underlying earnings. a disconnect between the timing to one of the quarter, and the positive effects more than offset the negative effect when you take them over time. >> and still in the sector, aviva saying it is making progress with turn around plan as it moved back into profit. the british insurance firm saw 5% rise in operating income for the first half. while at the same time its key measure of growth, new business, grew by 17%. the results were driven by the

uk, france and asia. but sales in italy and spain fell sharply and sales in aviva having risen to the top of the ftse 100 today, up by almost 6.5%. 6% rise over the last seven days. richard hunter is head of uk equities and joins me now in the studio. hi, richard. aviva, first half profit rises, the turn around seems to be going pretty well. >> yes, it does. it seems a long time ago now but the full year results in march when it shocked the market with the dividend cut. not only has the price recovered since then, it has gone on some. it is over a one-year period, the shares are now 18%, which is outperforming the ftse. i think the company is quite realistic in terms of its -- the fact it has become a recovery play. and there is pockets of weakness as you mentioned in the likes of spain and italy. there is some certain cultural integration that still need to be done and without question there is still weakness in efficiency in pockets of the

business. but generally speaking, you have to like this particular update today. >> a lot of people i've been talking to over the last couple of months have been saying, you want to play the finances, play the insurers because they have been undervalued dpi ed compare some bouncebacks we have seen in financials. is this still the case. >> if we look at three insurers you mentioned in the run-up there, even though they are a mixed bag of results, one thing that is common is growth in earnings. and when we look at aviva in the 17% growth it managed in the period in new business, this is quite apart from the fact, of course, that if you look at the dividend cut we mentioned, that they're yielding 5, even the projectry yield is 4%. and now that we know we are stuck in a low interest rate environment for some time, there is a contraction. >> also a low interest rate environment play essentially. what happens once interest rates start to head higher.

some say we're getting more hawkish at the moment. >> that's right. the bond markets aren't necessarily telling us that for some time yet. and that gives aviva plenty of time also to complete its recovery story. it is divesting businesses. it is pretty much going back to branch and root. and given that the particular piece of bad news in march, and now only in august, they're clearly making great vidstrides. >> how much of an impact do you think that regulatory changes are going to have on a company like aviva? >> yeah, i mean, it is financials in general. regulatory censure as well as regulatory intervention is very much key to what they're doing, of course. there is a political as well as a regulatory will for the financial crisis not to be repeated for whatever reason. it may well be that some regulators slightly overshoot. the other problem we have seen, of course, is this kind of arbitrage between different

regulators in different markets. we heard from hong kong, hsbc and standard charter the other day, in terms of sectors, et cetera, it is well to introduce one particular part of regulation, but that isn't necessarily the same in the u.s. they're looking to do things a slightly different way. until you get that regulation, it is going to be a difficult and fragmented way for global companies such as aviva and prudential who give us an update. >> you read my mind. i was thinking, how does aviva compare to prudential from what we know right now. when it comes to exposure to asia, how exposed do you want to be at the moment? >> prudential hasn't been without its problems in the takeover. having said that, it probably has more of a global presence than aviva. it is probably seen as a slightly preferred play, though i have to say, the consensus for aviva has recently, recently improved and you've got that cash generation and dividend yield as well.

so all things considered, and bearing in mind that aviva is in the middle of a turn around, prudential is probably slightly preferred out of the two. >> looking at this chart, as you're speaking, aviva up by 20% or so over the last 12 months. prudential up by 50%. the outlook for the sector, pretty positive on the sector. these are big gains. >> yes, they are, indeed. the prudential move is surprising given that obviously in percentage term aviva is coming from a much lower base of the announcement we previously had. taking the wider picture, the long-term -- the long-term trend is still in place. we are getting a brand-new middle class in emerging markets, especially china. in the uk, as we know, with a new rate under pressure because of interest rates, let alone the pension gap, people are going to be under much more pressure to save, so that the longer term story very much in tact for the financials, especially insurers. >> what is the most overrated

luxury food, talking about lobsters and how there is an oversupply of lobsters and people have been writing in with their views on the most overrated luxury food. mario writes in and says caviar, very, very, very overrated. >> i'm sure it is. i've only tried it once. i'm not a big fan of oysters either. lobsters are cheaper at any price. >> lobsters, i agree with you. depends where you eat them. if you eat oysters on a beautiful sea front they taste delicious. >> that's true. i'm struggling to see what the point of them is. >> yeah. i like caviar, though. yeah. i do like caviar. >> but don't mind paying for it in. >> depends on where. if it is good quality, no. richard, thank you very much. richard hunter, head of uk equities. keep your e-mails coming through and tweets as well. which luxury food do you think is the most overrated? i'll share with you what i tried for the first time in terms of foods that are a bit on the more nontraditional area. i'll share that with you later

on. shares in india's thata motors, the carmaker posted a 23% jump in profits. weak demand in its home markets kept investors' feet on the brakes. with more, we go to mumbai. >> thanks for that. tata motors was reacting well after it reported a number -- a set of numbers this which has to be mixed in terms of what the street made of it. the domestic business recorded a standard net loss, over 800 cars. but it is definitely the uk business which is what you alluded to, jaguar and land rover which did well for tata motors. the margins came in above 16.5% for the uk business. that pushed the total amount to

20% on consolidated basis, indicating the amount of pressure that is actually seeping into the domestic business at this point in time. a lot of brokerages have managed to maintain their outperform status or buy status on tata motors that the point in time. mcmurray has an outperform with a price of three rupees. back to you. >> thank you very much. cameramaker nikon cut its forecast to $2500 million. what is blurring the outlook? we have the story live from tokyo. please, what is going on with nikon? >> yes, the digital camera market continues to suffer as smartphones eat into sales and demand is expected to stay sluggi sluggish. the net profit finished at $44 million, which is less than one

third of what it earned the year before. the company says it will cut back on annual dividend payments, down more than 20% per share. now, meanwhile, olympus posted a loss of $18 million for the april to june quarter, which is an improvement compared to the 44 million loss last year. sales were strong in its highly lucrative medical devices arm, but weighed down by penalty charges stemming from the firm's accounting fraud in 2011, and also payments of corporate income tax from previous years which amounted to a total of $21 million. that's all from nikkei business report. back to you. >> thank you very much for that. now, switching gears back to a couple of other stories we have been watching of interest in the media sector, the salzburger family is saying they won't go down the same path as the grahams. they say the new york times is not for sale. this follows the surprise decision by the washington post company this week to sell its namesake paper to the amazon founder jeff bezos.

now, there has been more uncertainty about the salzburgers intentions with the times in recent years. after the company has shrunk to the flagship paper and international edition and the family cut the stake to around 13%. the new york times, well, we're seeing it trading a little higher in german trade, up by just shy of half a percent. the australian prime minister kevin rudd's tussle with rupert murdoch over the country's national broadband network has escalated. in an interview with abc he suggested the twitter tirade may have something to do with the competition that the network could pose to the network. he suggested the opposition leader may have fallen under murdoch's sway. tony abbott denies ever talking to rupert murdoch about mbn. >> what is underneath all of this? is it to do with the national broadband network representing a

commercial threat? i've seen some commentary on that. and i discovered in fact mr. abbott's policy was launched at the fox studios here in sydney. i would like to hear some answers to what discussions mr. abbott may have had with mr. murdoch on the future of australia's national broadband network. >> now, new zealand's dairy giant is saying it isn't seeing a slowdown in product orders yet. fro fonterra apologized for selling possibly tainted products that caused botulism. they will discuss the financial impact later. singapore became the latest country to pull milk formula products off the shelves due to the fonterra scare. now, the railroad company whose runaway oil train caused a deadly fire and explosion in a small canadian town last month filed for bankruptcy. montreal, main and atlantic railway cites debts to more than

200 creditors following the disaster which killed 47 people and destroyed 40 buildings. the company which also faces lawsuit and huge cleanup costs blames the train's operator for failing it set enough hand brakes. now, still to come here on the show, rio tinto scrapping the sale of its aluminum unit as its underlying earnings take a dip. we'll be discussing the mining giant's tough first half coming up. as usual, you can find us on e-mail or twitte twitter @louisabojesen. we'll see you after the break. ♪ [ agent smith ] i've found software that intrigues me. it appears it's an agent of good.

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hello, everybody. welcome. yes, you are indeed, i'm louisa bojesen. the latest chinese trade figures suggest a stabilization. the market appears to have been cooling on the china story. what have the ceos we have been talking to tell us about demand from the world's second largest economy. listen in. >> can't expect double digit growth forever. and another dynamic going on in china is really a switch towards more consumer spending driving

gdp and driving growth. i think for us and other service industries, the long-term prospects remain very, very good. >> you still got that backdrop of europe that is still challenging and china that is slightly slowing. >> growth is slowing down. however, the major cost of the slowdown of the growth in china is reduced of export from china to among others europe for obvious reasons and the growth due to investments. >> there is nothing in our horizon that suggests a slowing from 6 to 5 or 7 to 7 i5 is goi to drive any change. >> we see no growth in brazil, no growth in china and those are big markets. we try to compensate for that. for that reason we have accelerated our investment program. >> rio tinto isn't holding out much hope of a significant recovery in china this year. falling commodity prices in the

region hit the company's first half underlying earnings which are down by 18%. the world's second largest miner has given up trying to sell its aluminum business, stating that it is not possible in the current climate. just checking in on rio's shares, there we go, higher by almost 2.5%, up over the last seven days, up by some 2% as well. john mayer is an analyst at sp angel and with us in the studio. rio tinto, what do you make of the rio company and the mining sector in general? >> a comfortable set of numbers. no surprise iron ore is leading the earnings. huge performance. more performance to come from that business as they continue to drive investment there. but of course sam walsh is a realist, conservative kind of guy, no surprise that he's made a conservative sort of statement. but, of course, today, we have got new import numbers into china rising by 11%.

that's a massive increase. so what it feels like is that china having had a change of leadership, and beaten up a few guys locally on corruption issues, and that sort of thing, now things are getting going again. we don't necessarily expect china to see bigger gdp growth. but the destocking going on over the last few months seems to be ending. iron ore prices up at $130 a ton, very, very good prices. looks quite good from here. >> that means the expansion plans are still very much in check. >> yeah, i think lots more cost control going on. big cost reductions and gains to be made. so, i mean, the profits of the group are supported by cost initiatives, which is good, must have been a bit brutal in rio tinto over the last few months, but perhaps a necessary adjustment as the group checked its growth a little bit. but now we're seeing that china is importing again.

>> you're an expert in the sector. you travel around, look at the mines, you're in them all the time. talk to me about open pit operations and what this means. i know you think there is a lot of focus for rio on open pit operations. >> yeah. >> i don't know what an open pit operation is and i'm assuming most viewers don't. >> miners have dug some of the biggest holes in the ground. you can see these things from space. in the year, rio tinto suffered the world's largest man made landslide. and that's a big cost. but it is big opportunity. nature has shifted all this stuff for them, they don't have to blast it, they can reprocess a certain amount of it, and nobody was killed, which was good. it was a bigger landslide than they imagined. economically, open cast minings tends to suffer if the oil price goes up a lot. and, in fact, what is happening is underground mining is becoming more economic. >> why? because of the transport costs and -- >> yeah, the big trucks are very efficient, but they still run on

fuel, and most of them run on diesel and they're electrically powered like the ships these days, you generate the electricity in the truck and drive it that way. so big operations. rio tinto is world class at running these sorts of things. they have driverless trucks running around in western australia, for example, much cheaper that way. you don't have to pay the exorbitant costs of australian chu truck drive chers which earn mo than you and me these days. there is a lot of stuff happening and rio is an expert at what is called block caving, which is large scale underground mining. >> fascinating. is there a particular geographical area where you think, like, this is going to be the place to be over the next five to ten years? >> really difficult to tell. ecuador, i hope, will open up. that's looking quite exciting. the government is still a little bit difficult to deal with.

chile is still a fantastic place to be, but very hard to discover new projects there. latin america is interesting, brazil. most of what we look at is in africa. i think the cameroon is really going to take off. iron ore in the cameroon will be very big and we have been looking at west africa minerals and sun dance resources, an australian stock there. we think sun dance will organize the new rail network quite quickly. >> what is the most overrated luxury food, john? >> that's a question, as i mining analyst, we had to taste a lot of local foods. sheeps brains in kazakhstan, not a favorite. but the one that really surprised me, you pay 150 pounds for a bowl of abalone soup in mayfair. you get these things thrown at you on the coast of chile. it is not my favorite. >> not. i just tried sheeps brains, yeah, about four days ago. interesting. very interesting. john, thank you very much. john meyer, analyst from sp angel. a look at what is on the agenda

in asia tomorrow. the china inflation industrial output and retail sales data is released. key earnings in the region including the japanese tiremaker bridgestone. taiwan electronics firm and south korean maker laudit. talk of a twitter ipo growing louder with expectations that the listing could take place in 2014. julia boorstin looks at this business model. >> reporter: twit ter's busines model is built on ads. first up, promoted tweets. like this one from staples for back to school shopping. advertisers say willing to pay a certain number of people. but marketers only pay when users click, retweet or give a thumbs up favorite like this one from nokia and pay less the more

engaging the ad is, designed to push advertisers to make their messages compelling. >> anytime you get a quarter of the population doing something, marketers are going to have a look and see if they can leverage that kind of site and that kind of behavior and twitter is in that position now. >> reporter: a second ad revenue stream is promoting accounts to draw new followers. a third ad business is promoted trends like this one for the new moto x, a flat fee based on the audience size, it grabs this real estate above the list of trending topics. though anyone can sift through tweets, twitter sells its data through analytics companies like data sift, which mine for insight into customers and information on brand perception. and bing and yahoo! pay twitter to include fire hose of tweets in search results. no comment on how much money changes hands. now twitter, which is valued at around $10 billion, is expected to file its preliminary documents to go public this year for an ipo in 2014.

twitter will generate nearly $600 million in revenue this year and a billion next year, according to emarketer. those numbers could be even larger depending on partnerships, like the one it has with espn, which embeds clips with ads inside them. >> twitter is a little bit of the way into realizing the social advertising opportunity that exists today online. >> reporter: the company won't say how much it will make from its partnerships with espn, viacom and others, but driving millions of viewers to twitter where they'll see ads is certainly valuable. for cnbc, i'm julia boorstin in los angeles. coming up, find out what companies are saying they're winners in the mobile advertising race.

hi, everyone. welcome back. still watching "worldwide exchange." i'm louisa bojesen. these are your headlines from all around the world. new hope for stable growth in china after july trade figures beat expectations and it could stave off stimulus from beijing. japan's central bank governors urging the abe government to stick with planned sales tax hikes with the nikkei being very volatile, reversing its earlier gains in its session. shares in commerzbank soaring to the top of the stock 600 in europe, up by almost 10%. traders cheering a few bright spots in the group's earnings as the group is restructuring. and the program there taking hold. and deutsche telekom is betting

big on the u.s. thanks to a strong customer growth in the market. the group is cutting its cash flow target as a result. but investors are buying into the turn around. hi, everybody. yes, welcome back to "worldwide exchange." if you're just tuning in, thank you very much for joining us here on the show. we have a full hour together and we'll be looking ahead to the u.s. markets as well. speaking of which, we have a couple of hours to go before the u.s. markets start trading. this is what we're looking at now with regards to the futures, a couple of points high area cross the board. we saw pretty flattish open in europe today falling from a mixed close or fixed close there in yesterday's trading session, mixed on the close, just a couple of hours ago. ftse flattish at the moment. a little intercession volatility, but really seeing a

flat market. we have got the summertime volumes, of course, really taking hold, which means that we're seeing very low volumes compared to what we usually see. european main markets all trading higher, shy of 1%, right around half a percentage point higher or so. ftse mib outperforming a tad. the italian market up right now. the sectors, here to the upside, we're seeing quite a bit of activity in the insurance sector. results from a number of the bigger insurers, aegon, aviva, talking about that company a bit earlier on, our guest seemed to think there is more to go for these companies despite the fact they have recovered quite a bit. banks up by .8%. basic resources higher by over 1.5% on the back of that trade data from china, a lot better than expected. travel and leisure a bit lower. food and beverages down by .8% as well. the currency markets, well, here, flattish trade in some of the main crosses. euro dollar, flat. having come right back up again

from being below that 130 level for some time. the dollar yen, a bit flattish. the aussie dollar is trading higher against the u.s. greenback. and sterling just a couple of points higher's well at the moment. but, let's talk about what is taking place in the asian session. li sixuan rejoins us from singapore once again. for viewers just joining us, sixuan, what has been happening in asia? >> thank you, louisa, asian markets got a modest boost from the stronger than expected trade data from china today. but the numbers did manage to lift japan. the nikkei 225 seesawed throughout the session before closing down more than 1%. but solid china data gave australian shares a shot in the arm. asx 200 gained over 1% today, despite the weak jobs data. aussie giant miners bhp billiton and rio tinto gained ground on

news that imports jumped more than 17% last month. telecom giant telstra shares climbed 2% today after shocking 12% increase in its full year profit. and a couple of corporate news moving stocks today, hong kong's bank surged over 17% to an all time high on news of a takeover deal. and south korea's hyundai merchant marine up nearly 15%, that's after north korea said it will ease restrictions on the inter-korean kaesong complex raising hopes for the reopening of the industrial zone. that's a quick recap of the asian markets. back to you. >> sixuan, thank you very much for that. the s&p closed yesterday, while it marked the index's first three-day losing streak in two months. for the nasdaq, traders witnessed first back-to-back declined since late june. joining us from new york is michael purvis from wieden and company. michael, what do you think is going on? the fed speak definitely still

dominating and seems we're turning just slightly more hawkish than what we have been. >> right. i think -- if you step back for a second, bernanke has done two things here. he's announced a very clear and deliberate message about tapering, it is not qe to infinity, but committed as he is to that message, equally committed to most managed tapering you can possibly imagine. i think the markets are starting to sort of live within those two sort of constraints of this post qe-3 framework. and so, you know, you're seeing, you know, the markets trying to process this, and get a better feel for all this stuff. one thing very interesting is that the equity mash rket volatility has gone down to pretapering levels, vix at 12 to 13 levels, but the treasure market volatility is still extremely elevated. there is going to be an interesting development as we get into the late summer and the

early fall. >> am i the only one, michael, who looks at august and i just think funny money, you know, funny money august, always, every single year, seasonal factors that come into play and you can first really see what is going on once we have those volumes back in the market? >> well, sure, there is an old saying that never short a slow rising low volume taper like you find in august. we may find sort of a gradual sifting up here, but one of my concerns is that around the corner, for all of the excitement about the great rotation into equities, i do think for u.s. equities we have to be measured and disciplined with how much enthusiasm to expect. and we have key events coming up around the corner in september and october as well. that could drive some equity market volatility. >> i'm looking at the trade data for china that was out, a lot better than expected as we have been seeing for imports and exports. what do i do with the commodity related sectors at the moment,

the commodity related stocks? >> i think you know, the china data that we just got has been encouraging, but let's -- if you step back for a second, the big structural shift in china from fixed asset to consumer gdp is a big, very long-term sort of tidal shift if you will. on top of that, the u.s. dollar, which has been in structural downtrend for a decade, is now not necessarily looking like it is going to keep staying in a downtrend, relative to a basket of other currencies. and any commodity equity is going to be fighting those two head winds there. i'm encouraged by the data it important for every risk asset on the globe that china does not decelerate too quickly. having said that, i think the commodity equities are going to be, you know, obviously there is some commodities are better than others. but it is going to be -- we're not going to see some massive rotation into that -- into

those -- that asset class anytime soon. >> michael, for viewers just joining us to flush out the chinese data in a bit more detail, the trading activity in july giving new hope that mainland growth is stabilizing. exports climbing by around 5%. imports surging by 11%. both these figures were a whole lot better than analyst estimates. the rebound comes as a surprise because of china's lackluster trade performance in the last couple of months. this being after authorities clamped down especially on illegal cash transfers despised as trade deals. now in japan, no change from the bank of japan today. it kept policy steady, citing a moderate recovery in the economy. the bank of japan didn't upgrade its view on the economy, but it did sound a bit more upbeat about prices, saying that inflation is likely to gain pace in the months ahead. central bank governor mr. kuroda has also fired a warning shot at the abe government in his press conference. he urged cabinets not to ease up on fiscal discipline, saying a sales tax hike wouldn't stop the

economy from beating its growth targets. looking at the nikkei on the session, seesaw session, higher, lower, higher again and then we came right back down again, heading into the close, off by some 1.6%. michael, the nikkei, we have seen a huge recovery in nikkei trade. is money going to continue to flow into the japanese markets? >> i think so, but at a much less exciting and rapid clip than we saw from, say, december up through april. this big massive experiment that abe and kuroda have undertaken is probably, you know, one of the most important trends developing on the planet right now. but in terms of equity market investors rushing in there, it has gone from a big sort of concept that is getting traded into more of a show me type of rally here. so, you know, what has happened, if you look at a lot of the consensus estimates for gdp,

whether it is, you know, the q-4 of this coming fiscal year, of this fiscal year or 2015 more broadly, they have gone up dramatically. expectations on valuation have gone up dramatically with this big rally in the nikkei. and so if we don't get follow through on key corporate and gdp measures, that's going to be -- i think the nikkei is not necessarily going to break out of this range it has been in the last two months. >> yeah. coming back to conversation i was having with one of the earlier guests about the financials and the recovery that we have seen in financials, financial/insurers we were talking about, what do you think the implications are going to be for the financials if and when we see rates starting to head higher and also if we see a steepening of the yield curve. >> well, i think, you know, it is a fascinating question and point. i -- for the big banks, there is a lot of sort of conflicting forces right now as to what the

implications are. clearly they tend to be net long inventory and some duration there and those are going to be hit, you know, fixed income will be hit as that yield curve and the rates, you know, increasingly rise. on the other hand, their net income margin, net interest margin, excuse me, you know, should start expanding and you should start seeing, you know, in the last quarter, we saw a stronger trading revenues from fixed income and equities, and those things will, you know, presumably continue as well. but i think, you know, it is important to step back and realize that these big banks have never really been in this type of unusual environment where you have massive excess reserves and, you know, interest rates, you know, the unfolding of three decades of market rally all at once. >> i have something i want to ask you in a minute. we need to get you a look at

what is on today's agenda in the united states. the weekly jobless claims out at 8:30 a.m. eastern time. forecast to rise by 11,000 to 337,000. fannie mae reporting results before the opening bell. expected to be solid following the strong numbers from sister mortgage lender freddie mac on wednesday. we get numbers this morning from amc networks and after the close we hear from lions gate, monster beverage and priceline.com. but as we have been saying, times are tough for another food group. the prices of lobsters have dropped sharply in recent months. the fall is due to oversupply as warmer ocean waters have helped shellfish to grow faster. helped shellfish grow faster. a lot of ss. a huge surge, lobsters have become cheaper because of a fall in global demand for the luxury dish after chinese customers

drove prices of the seafood to all time highs. and we have been asking today, which luxury food item do you think is the most overrated? someone smart here writes and says lobster? precisely. you're absolutely right. john writes through and says, some red wines like merlot or overpriced. josh writes, and this is truffles, disgusting. disgusting. michael says caviar, ugh. so does brenda, caviar, ugh, they retweeted each other. kai says oysters. another oysters. david writes in and says without a shadow of a doubt, truffles for seasoning. i actually really like truffles. isaac says, a bit of a first world problem, isn't it? it might be. luxury food, luxury is -- well, it is a first world problem. it is. keep your responses coming here on "worldwide exchange." and michael, we kept you

hanging, i want to hear what you think is the most overrated luxury food as well. anything you've tried. >> that's an interesting question. i would say, you know, i'm not long on truffles right now. but i would say -- >> you don't like a bit of pasta with truffle on top, truffle, little bit of parmesan cheese, bit of olive oil, that doesn't do it for you? >> not quite. but i would say this, you know, the early days of this country, lobster was considered the food only the poorest people would eat. >> yeah, absolutely. you're absolutely right. jeff writes in and says hot dogs, though jeff, head to denmark and go to a stand on the street and you can ask for a red hot dog, bright red, very, very good. not sure what's in it, but very good. keep them coming in. "worldwide exchange." get in touch with us on e-mail. many of you have said -- what is

the e-mail address, worldwide@cnbc.com. there it is. right on the screen for you. also find us on twitter, @cnbcwex. that's @cnbcwex. or directly to m me @louisabojesen. i'll read out some more of your entertaining answers later on. megathursday for earnings. we'll update you on how the market is trading, company report cards. see you in a second. [ male announcer ] come to the golden opportunity sales event and experience the connectivity of the available lexus enform, including the es and rx. ♪ this is the pursuit of perfection. 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...

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hi, everybody. welcome back. you're watching "worldwide exchange." i'm louisa bojesen. these are your headlines today. china stimulus seen less likely as trade figures beat expectations. commerzbank to the top of the stock 600. and fellow german stock deutsche telekom is saying it is the chase hard for new u.s. business. all right. we had a lot of earnings out this morning. whole bunch in fact. nestle having cut its growth target citing a weak operating environment in europe. the world's largest food group saw prices erode saying organic growth was somewhat muted. net profits for the first half missed expectations and the

company now sees sales growth of around 5%. shares lower by almost 2.5% at the moment. henkel confirmed its outlook for the year after reporting results that were in line with estimates. the german consumer products group reported a rise in both sales and the adjusted operating profit for the second quarter. a lot of ketchup. earlier the ceo spoke to cnbc about its growth outlook and the story of growth itself. >> we grew 4% in the first quarter, quarter, three out of four were double digit. so china, india and brazil double digit. we saw russia being strong. so 45% of total business came from the emerging markets. we grew operating earnings by 90 basis points and 10% on eps. so overall good quarter, but we don't see a general market pickup. >> now, adecco posted a better than expected net profit in the second quarter of 126 million euros. this despite a 3% drop in

revenues. the world's largest staffing company is confident that going into the second half it is saying that labor markets in europe are stabilizing. the group is also planning a new share buyback. germany's monopoly, the former phone monopoly deutsche telekom reported second quarter earpings in line with market expectations. the company is cutting full year catch flow goal to 4.5 billion euros, looking to fund growth in the u.s. earnings expectations were trimmed to 17.5 billion euros, but the german carrier is saying that it expects its t-mobile usa unit to add more than half a million customers in the second half of the year. shares higher by almost 5%. so real pop in today's trade. and sticking to the telecom sector, we have seen a surge in m&a activity. at 5:45 a.m. eastern time, or 11:45 criminentral european tim view on whether or not t-mobile

could be a potential takeover target. has been quite a bit of talk about that in the past. shares in commerzbank have rallied despite a tough first half in the second quarter. the german lender posting a 51 million euro loss in the first six months of the year. it also missed its quarterly expectations. they said the weak european environment and the low interest rate environment contributed to the numbers. still to come, right here on the show, the greek prime minister says meeting president obama as the imf warns of a new capital short fall, can u.s. investment turn around the country's economy? greece's former transport minister thinks so. find out why after the break. [ male announcer ] i've seen incredible things. otherworldly things. but there are some things i've never seen before. this ge jet engine can understand 5,000 data samples per second. which is good for business.

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hi, everyone. welcome back. you're watching "worldwide exchange" on cnbc. the u.s. markets, they'll be opening in a couple of hours. right now, the implied open is a couple of points higher. dow jones up by 50 points. nasdaq up by just over 10 points and s&p 500 up by right around 5 points or so. let's talk greece, though. the greek prime minister antonis samaras is set to meet president barack obama in washington today. the two leaders will be holding talks on greece's economic reforms, on trade, and counterterrorism policies acording to the white house. the meeting is part of a

three-day visit to the u.s. aimed at bolstering investment in greece. samaras is also expected to meet the new york mayor michael bloomberg and a consortium of american investors later in the day. the new democracy mp and former transport and infrastructure minister joins us on the phone from athens. thank you for being with us today. what do you hope will come out of samaras' visit to washington? >> well, traditionally u.s. and greece have a rather, you know, strong, friendly relationship. so i think the prime minister, greek prime minister and the president obama will be talking about mostly the financial crisis, and how things are going after three years of the implementation of the problem made by the imf. so i think the austerity

measures are going to be very vocal in how they're working and how to do the session. and the huge unemployment now, the greek society is suffering from. so what is expected, what is expected is probably some kind, i don't know if they're going to raise it, to what extent, but some kind of the imf, the handling of the greek debt, some kind of growth measures which have to be side by side with the fiscal adjustment program, in order to deal with the recession consequences. i think that's about the scheme that they're going to work with, talking about the financial crisis. >> do you anticipa tis pateanti

going to become more fiscal? >> i think president obama had some points which shows that there is a different way of approaching the handling of the financial crisis. and actually there are two handling the crisis. one is, yes, there is also the state side, but not only an austerity side. and the other hand, you have the european plan, which gives too much importance in handling the deficits, the budgetary deficits, which is, of course, good thing, but if you don't have something that must go together with that, then at the end of the time, there is a danger that you end up being in the spiral recession, the more

measures, more recession, you face a budgetary target. you need more fiscal measures, and then, again, that spirals. the way to go out of that is, of course -- which is a thing that i think both president obama and the eu will agree. but you must also have some kind of growth stimulus. and there is a big discussion what kind of risk stimulus should be, whether it should be unemployment plans that are going to support unemployed people or hedge funds that are going to invest. but that is the basic -- >> makis, thank you for being with us. i'll be reading out more of your tweets and e-mails on which luxury food you think is the most overrated.

some very, very entertaining answers i can reveal you're sending in. does your company have a fully fledged mobile marketing strategy? in ten minutes time we'll hear why too many firms could be missing a trick.

hi, everyone. welcome. you're still watching "worldwide exchange." i'm louisa bojesen. these are all of your headlines from around the world today. new hope for stable growth in china after july trade figures beat expectations. some saying it could stave off stimulus from beijing. japan's central bank governor urging the abe government to stick with planned sale tax hikes with the nikkei being very volatile, reversing earlier gains. shares in commerzbank soaring to the top of the stock 600 in europe, up by almost 10%. traders cheering a couple of bright spots in the earnings as the group's restructuring program is taking hold. and deutsche telekom betting big on the u.s. thanks to strong customer growth in the market. the group cutting its cash flow target as a result, but investors buying into the turn around.

hi, everybody. welcome. if you're just tuning in, maybe you're just waking up state side, good morning. good morning, good morning, everybody. it is a beautiful day. getting stuck into the u.s. markets, opening in a couple of hours, and we're called just a little bit higher across the board for our u.s. indices at the moment. here in europe, we have been trading relatively flattish. just putting on some slight gains across the board. the ftse, xetra dax, ftse mib and ibex trading higher, shy of 1%, closing out on slightly mixed level yesterday with mainline europe closing in negative territory. how do you make money, though? this is what some of the experts have been telling us this morning. >> commodities in a bear market for the last two years and when you talk to people who work in coal, who work in, you know, freight markets, those markets are starting to find balance. and you're not seeing it in terms of significant price

increases yet, it is just the end of the down trend. >> company clearly guides down its top line expectations for the year, now saying it expects organic growth of 5% after typically guiding the market four between 5 and 6. to be honest, i think it will be closer to 4.5 than 5 even if there is an acceleration and comps get easier. >> the consensus from aviva has recently improved and you've got that cash generation in dividend yield as well. so all things considered, and bearing in mind that aviva is in the middle of a turn around, prudential is probably slightly preferred out of the two. >> michael purvis from wieden and company still with us. hanging on, michael. thank you very much for that. we were talking about some of the sector specifics in the last half hour, financials, we spoke about commodities, we spoke

about. what do you think of the health care and biotech companies of the moment? >> here at the u.s., post obama care, that's been clearly a standout sector. the biotech index has been up 45% year to date. it has been fantastic. the problem is that it is right now really flow driven asset class. so flows are coming into this asset class, and also into the broader health caraway from biotech. and so there is more and more rationalizations for higher and higher valuations. as soon as those flows stop coming in, a lot of companies will contract very, very quickly. you have to look at flows have to look at technical indicators on this. i do think we're starting to see a series of what i sort of lower nonconfirming momentum on the technical charts. i think towards the back half of the year, i think you can see some significant price corrections here. but doesn't mean the sector has

any real fundamental damage in it. just means it has been heavily overextended. >> i also want to ask you about the housing markets, michael. here in london. we're going from strength to strength to strength in housing. do you view the housing market recovery as continuing, is it overrated? >> you know, there is a lot of polarization within the housing market, you know, you mentioned london. well, new york goes from strength to strength to strength as well. but for the country, you know, we did have some, you know, very strong housing -- rebounding case-shiller off the 2002, 2003 lows that were really sort of tested back in 2011, 2012. that's all very encouraging. but of course we also have the unraveling of qe and higher interest rate environment. frankly there is too many questions around that right now. we will probably see further gains in the housing -- they'll just probably come at a much

lower rate going into this higher interest rate environment. so a lot of questions there. i don't think we cannot know the answers until we see more data over next few months. >> michael, hang on for a second. just in case viewers were just waking up and just joining us, been talking over the last two hours about the prices of lobsters and how they have dropped so sharply in recent months. the fall is due to oversupply because the warmer ocean waters now are helping shellfish to grow faster. lobsters have become cheaper after chinese consumers they have been driving prices of the seafood to all time highs. we have been asking, which luxury food item do you think is the most overrated? you've been writing in or tweeting us as well. fantastic answers. we mentioned a whole bunch of you saying oysters, for example, many of you saying truffles, tony writes in, he tweets, he says sea cucumber, also known as slugs and snails as well. my director adam says he's seen a sea cucumber, hasn't eaten

one, but has eaten cucumber. he thinks champagne is overrated. i have to agree. he believes it is a bit stinky. mark says a little danish meatball, which i'm very good at making if i might say so myself. anthony says excellent taste, we were talking about passing on truffles. he loves truffles in olive oil. i'm drooling. should try valentina's. the specialty chocolates with chilies or spices in them, chocolate with chilies, it is all -- i love chocolate, but don't put them together. stewart, very, very high end taste here, he says gold leaf. can you eat gold leaf? do you know? in my ear. you can apparently have it in drinks. you can have gold leaf in

drinks. susie tweets, kobe beef, tastes like any other burger. loads of you writing in. caviar, julia says caviar. kai says caviar. russian caviar, life in prison to bring a box out of the country, high price. i like caviar. the excitement of the little explosions when you chew the eggs, right? the most overrated luxury food is a pint of beer in any bar in norway for $12. trust me, beer is a luxury there. along the same lines, brian tweets through and says guinness in tokyo for $25. oh, my goodness. caviar, you don't like caviar? michael you said to me during the break, i have another food, even worse than the one you mentioned, or more overrated. what is that? >> foie gras is something i don't touch. >> foie gras. why? >> i think it is just revolting and the process by which it is

made is kind of revolting as well. >> that's true. a lot of foods are made in a pretty revolting way, i guess. but rod, my director -- >> i just don't like it. >> he doesn't like foie gras either, he thinks it is overrated. noel, my producer, says an abalone fish or blowfish. one that almost kills you. might be a bit overrated. michael, thank you very much for being with us. michael purves, chief global strategist from wieden and company. don't ever, ever, ever feed him foie gras if you invite him to a dinner party. u.s. regulators are stepping up scrutiny of big banks that solved mortgage bonds and other securities to investors in the run-up to the crisis. bertha coombs is at cnbc's headquarters with more. bertha? >> i feel injured from all those foods that you have maligned, many of them my favorites. but we go on. jpmorgan says it is facing a criminal probe by the justice

department over the sale of mortgage-backed securities in an s.e.c. filing. the bank says civil investigators have already determined it has violated securities laws. the probe's concern, offerings of subprime and alt-a residential mortgages between 2005 and 2007. jpmorgan received requests for information from other authorities including the u.s. attorney in connecticut, and the s.e.c.'s enforcement division. no formal charges have been filed against the bank, and jpmorgan and the justice department wouldn't comment on whether a lawsuit is coming. the disclosure comes a day after the doj filed a civil suit against bank of america over the sale of mortgage bonds. the investigations fall in line with cases the obama administration pursued as part of its mortgage task force, which was created in 2009 to go after crimes stemming from the financial crisis. last year the task force launched a team to probe misconduct in the mortgage-backed securities market. it since filed cases against credit suisse and jpmorgan for

misleading investors about the riskiness of those investments. jpmorgan trading this morning in germany, down about .8%. separately, the justice department has reportedly issued subpoenas to banks and other companies that handle payments for a wide range of questionable financial services, including online payday lending. these are short-term loans, sometimes known as cash advances that carry high interest rates and are at higher risk of default. payday lending volume rose 10% last year. the wall street journal reports the government is also cracking down on marketers who try to get people to pay for nonexisting services or phony offers for work from home programs. you've seen those before. earn $100 a day doing nothing from home. i always wondered why they didn't crack down on those. back to you. >> right. bertha, what is your most overrated luxury food? >> i guess it might be truffles.

i love mushrooms, generally, but i don't know, i just can't quite get into truffles, they're not quite my taste. i'll try it. i'll always try it. >> definitely. mark tweets through and says sushi. status food of the decade, hands down. jeff tweets in and says premium vodka. >> you know -- yeah. the thing about it is the other premium stuff, the first one is good, by the time you have the second or third, doesn't matter. >> well, you have a point there. caleb tweets in and says sushi. i love sushi. what is wrong with you guys? >> i like sushi. >> sashimi is harder for me. >> okay. i love sashimi too. my director is yelling at me. i need to go. i need to go, bertha. thank you very much. a company is being too slow to adopt the mobile marketing strategy. who is the best place to benefit from adverts on your telephone

and tablet. find out.

welcome back, everybody. i'm louisa bojesen. groupon reporting a second quarter net loss, but excluding deals from the daily site. strong sales in the u.s. and

canada, the company is also named co-founder eric lacovsky as the new ceo. shares rose by 18% in after hours trade. currently in german trade up by almost 25%. the groupon ceo will be on "squawk on the street" at 10:15 a.m. eastern time. tune in for that. ten years ago, many companies were notoriously slow to the punch when it came to advertising on the internet. my next guest says history is repeating itself but in the mobile headvertising market. john general is the writer at the wall street journal and joins us in the studio. >> how are you? >> very good. why do you think we're behind with regards to mobile advertising? >> history is repeating itself. this is a tough transition for advertisers to make. the numbers are virtually identical. a decade go, people were

spending 20% of their time on the internet, but only 4%, 5% of advertising dollars were going there. the numbers are almost the same now with mobile. i predict we'll see the same thing. it will take several years for things to even out. as they have now by the way on internet. almost level. it is about 20%. >> why do you think it will take that long? if we already know it, why aren't we doing more about it. >> i think there are a handful of reasons. one is probably inertia, advertisers will not move the dial that fast. right now, they have a huge percentage of money going to print or tv, it is not going to be -- they're going to be a little nervous about taking that risk. another thing is the format. if you look the a smartphone, it is a tiny screen. making an ad work is a lot easier said than done. there are only certain situations where it is going to work well, right off the bat. >> and then i'm thinking about facebook, and the recent results we saw. everybody was saying, you know, the ad market is a lot stronger

than what we thought it was. >> well, i would actually say you should look at other companies aside from facebook that do a lot of location base stuff. trip adviser and yelp are perfect examples. if you're looking for a hotel or restaurant, an advertiser may be able to tell you where you are in a certain vicinity and say check out this restaurant, check out this hotel and it is working in their favor. you look at the stock prices of trip adviser and yelp this year, it is phenomenal. yelp is up like 150%. >> huge recovery. massive. you're staying with us for the time being. i want to include another element to the story. the salzburger family saying they won't go down the same path as the grahams, and the letter to staff on wednesday night, they say the new york times is not for sale. this follows the surprise decision by the washington post company this week to sell its namesake paper to the amazon founder jeff bezos. now there has been more uncertainty about the salzburgers intentions with the times in recent years after the company has shrunk to just the

flagship paper and international edition. coming up after the latest round of takeovers and mergers, is there still room for further consolidation in the u.s. telecom sector? we'll look at whether t-mobile is on the short list of candidates in a couple of moments. tweet us the most overrated luxury food, what is it? tweet us your answers @louisa bojesen. [ male announcer ] come to the lexus golden opportunity sales event and choose from one of five lexus hybrids that's right for you, including the lexus es and ct hybrids. ♪ this is the pursuit of perfon. [ kitt ] you know what's impressive?

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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? ♪ welcome back. germany's former phone monopoly deutsche telekom reported inline expectations. it looks to fund growth in the u.s. we have seen deutsche telekom in this morning's trade popping higher by more than 5% at

moment. their former u.s. wireless t-mobile reported a 16% drop in second quarter, adjusted earnings, due to higher marketing costs. but t-mobile, which merged with metro pcs in april aepd added 1.million customers and helped by the launch of the apple iphone and new pricing policy too. deutsche telekom still owns part of t-mobile. maggie, what do you make of the telecom story at the moment? >> i think this is a good sign for t-mobile in terms of being able to rebound and start growing at subscribers. they still have work to do on, you know, their earnings, but from the perspective of subscriber growth, this is great news for them. they have consistently been losing subscribers to the big players like verizon and at&t. so this is a good trend for them. >> do you think that we're going to see a full sale of t-mobile

at any point in the near future? >> we could. i mean, you got dish network that is really searching for a partner. they have about 40 megahertz of wireless spectrum they need to put to use. and they don't want to build their own network. they tried to acquire sprint and clearwire earlier this year and failed to do that. and now t-mobile is the only dance partner that is left. so, you know, charlie ergan, who is, you know, head of dish network, has said he could possibly be interested in some kind of acquisition there or some other partnership with somebody else. so, you know, i think that's something to keep an eye on. >> what are your thoughts, john? >> well, charlie was speaking earlier this week and, yeah, he certainly did seem open to all kinds of deals. he ran through a litany of possible matchups that would work. one that everybody always thinks hard about is tying up a directv. i heard estimates the cost

savings would justify the deal, you know, two times over. the problem is that there are a few parts of the country where you can't get cable and it is only satellite. and i think that's why regulators didn't let that go through the first time. my guess it is still a no go. >> you have to have the regulators on your side, it is completely impossible at the moment. with regards to the overall recovery in the telecom sector, we have seen large recoveries in many spaces so far this year. is it going to continue, do you think, for the rest of the year? what would it take to keep the momentum going? >> well, the telecom sector is difficult because there aren't a lot of places for them to grow anymore. most people already have a phone. so, you know, you're looking at a market where, you know, 90% or plus penetration and so, you know, where are you going to get more subscribers. and companies are trying to go into new businesses, trying to encourage people to use more

data services like using ipads and so forth to connect to the internet over those networks. so i think, you know, we'll see them trying to push those plans a little bit more. we're also seeing some of the bigger players like at&t and verizon actually trying to get people to just spend more money each month. and, you know, so i think that's where they're looking for growth and, you know, people seem willing to spend more. so, you know, we might see some good uptick there. probably not a lot of growth. >> maggie, thank you very much. maggie riordan, senior writer at cnet. john, before we let you go, the most overrated luxury food, we have been asking all morning long. >> i'm agreeing with your guest earlier and saying foie gras. not a fan of it. i think they're mean to the geese. >> pretty mean to a lot of animals, you know, when they kill them. but loads of you writing in. david in canada says es cargo, only value is fish bait. thank you very much for writing

in with your snails and all the other suggestions. john, thank you to you as well. we'll see you typhosoon again. that's it for today's show. we'll see you tomorrow. 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. s time.

good morning. the global markets, the bulls having a rough week with u.s. stocks now down three straight. and japan seeing another sell-off overnight. thursday, august 8th, 2013. tesla had a good day. we'll talk about that too. and "squawk box" begins right now. ♪ this is our last dance this is our last dance ♪ ♪ this is ourselves under pressure ♪ good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick with andrew ross

sorkin and brian sullivan in for joe kernen. good morning, everybody. >> good morning, good morning. >> u.s. stocks are now on a three-day losing streak. their worst run in two months. the hardest hit s&p sectors yesterday were the financial and consumer discretionary areas. utilities did close higher. but, yeah, look at that. s&p down by about 6 1/2 points. in asia, the nikkei suffered a rough session, closing down by nearly 2%. bank of japan did decide to leave monetary policy unchanged at the conclusion of its two-day meeting. that announcement was expected. meantime, south korea's central bank, they kept its policy interest rate unchanged at 2.5%. and unanimous vote. the rest of asia ended mixed after some upbeat trade figures from china. the company's exports jumped by 5% in july, imports surged by 10%, and both those figures were better than expectations. we'll talk more about china in about ten minutes. >> among the markets today, the big weekly jobless claims out,