you're watching "worldwide exchange." i'm ross westgate. here are your headlines today. strong industrial output and steady inflation levels in july. could this be the bottoming of china's growth slowdown? kpn at the top top after carlosm makes a bid for the 70% of the dutch telecom group it doesn't already own. the s.e.c. could reportedly settle its case with jpmorgan in the coming months over the london losses with a rare twist of admission of guilt. and richard fisher in an exclusive interview on cnbc

joins the chorus of central bank officials calling for the eventual end of the fed's massive bond buying program. >> if things go as the committee expected, i would expect us to dial back. we'll have to see what the data and the feeling is between now and the time we next meet in september. all right. warm welcome to you. the last "worldwide exchange" of the week. and we kick off with the iea. oil, latest oil report. wti futures narrowing the gap with brent amid surging u.s. refining runs and crude draws. they say global oil demand will accelerate in 2014 to 1.1 million barrels a day. that compares with .9 in 2014. the forecast of demand growth been trimmed slightly from

previous estimates. global supply, they think will also increase just a little bit, led by higher nonopec production, dropped stronger in north america expected to lift its second half total average of 1.4 million barrels a day. opec crude supplies edged down in july, global refinery crude demand surging in june. it is by 3.1 million barrels per day, highest monthly increase on record. ahead of the autumn maintenance. that's the latest iea report. nymex trading at 10404. jason joins us now. good to see you. the monthly increase on record in global refinery crude demand, 3.1 million barrels per day in june. where do we go now?

>> well, essentially if we're looking at just one month number, you can get some distortions. essentially asia was going through the heaviest refinery maintenance period on record in may. that monthly surnl we're not concerned about. the numbers to rightly focus on are demand growth, which has been actually reasonably robust given the economic backdrop and supply growth out of the united states. we think that demand growth is going to be still reasonably robust and going to support prices that will move up into the range of probably 115 brent. >> the strange thing, of course, jason, with oil is how strong it has been when you compare it to metals commodities as well. how do you explain relative strength of oil against the relative weakness of the last two years of the global economy? >> there is really one word and that's china. china accounts for an important amount of oil demand. about 10% of the global market. but on many of those other base metals accounting for well over

50%. when china slows down, it affects all commodities but affects metals significantly more proportionally than oil. >> which is a fair point. they talk about oil demand expecting to sell rate a little bit led by higher nonopec production. how much sort of -- is there much spare capacity in opec or not? >> there is to the tune of 3 million barrels a day, 3% of global demand. there is some there. it is not a huge cushion. >> yeah. and meanwhile, what are the supply risks? >> well, the supply risks are multiple. right now we focus on amina, libya had a lot of interruptions to their supply, egypt is a concern, but not a big producer, yemen same thing, political issues and nigeria is a big wild card here. there is quite a bit going on in nigeria in terms of theft.

political situation there is also pretty precarious. >> yeah, just one other thing we're looking at as well, iraq's oil resurgence, sort of faltering a little bit. have they underdelivered compared to our expectations? >> they have underdelivered compared to the expectations they have given to the market. i think the market has been rightly fairly skeptical about how fast they can ramp up. you've seen big up months and big down months. the issue with iraq is twofold. can you get the infrastructure in place in the south, that's probably most important. and there have been some issues there, and then second, will you be able to export from the north and most particularly kurdistan and that's going pretty slowly. >> yeah. meanwhile, what kind of political premium do we keep, jason, in the oil price? >> well, there is a lot of different ways of measuring it. we look at the backwardation and you get $5 or $6 a barrel in

price right now. that's a premium that is going to persist indefinitely. because a lot of the issues i talked about in terms of risk don't seem to be going away anytime soon. >> jason, good to see you. thank you very much for that. jason gammel at macquarie group. we had one of the biggest investors returning .1% on portfolio in the second quarter, beating its own benchmark by .3%, essentially funded by oil. and they say equity markets boosted by strong market in the u.s. and japan. 760 billion oil fund increasing its bet on equities, slightly better returns. don't forget, thoughts or comments, e-mail us, worldwide@cnbc.com. another story we're looking at, another voice joined the chorus calling for a september start to tapering fed asset purchases. the dallas federal reserve bank

richard fisher told maria bartiromo if current conditions remained, he believes the central bank would begin winding down its bond buying plan next month. >> we're all singing from the same song book, so it is the same message, maria, which is it -- if things go as the committee expected, i would expect us to dial back. we'll have to see what the data and the feeling is between now and the time we next meet in september. >> if 6.5% was the fed's marker in terms of where employment should be, can they begin -- i'm glad you said, you know, begin to wind down and just so it is not a tremendous move, because that's important, because i think the way they exit here is very important in terms of the market impact, right? >> if you really look at what we have said in print and in everybody's statements, including the chairman, and that is that we would hope to end those asset purchases as we approach 7% unemployment, the base rate, which is a fed funds

rate, which anchors the yield curve, would be kept low and we would look at the 6.5% mark. we expected it to continue to stay low and anchor near zero for a very long time frame. so that's where the 6.5% works in. >> i see. >> the other 7% mark, i think it is very important for people to understand. but we'll see how things develop. the ism numbers have been very good. even if you look at the numbers in terms of the weekly unemployment claims reports, this last number, people look at it week by week, we're back to the levels that obtained before the session. so there is improvement in the economy. if it keeps moving in this direction, i personally will be advocating as i have advocated, but a minority, that we begin to dial this program back. >> what are business people saying about how the economy looks to them? >> they're starting to put cash to work, but they're waiting for some clarity. the clarity is not -- i don't hear a single business person complain about monetary policy. they have restructured their

balance sheets, maria, their liability side of the balance sheet. if you're a business man or businesswoman who hasn't cleaned up your balance sheet, you shouldn't be in business. everybody has done this. what they want is some clarity from the fiscal and regulatory authorities. they don't understand what their tax structure is going to be, how federal spending will be amended or adjusted that will impact them or their clients and very, very importantly, they all, to a person, from the biggest company, exxon, to my dry cleaner, they feel that they are suffering under a -- of regulation. >> why do you think the powers that be in washington are not doing their part in terms of fiscal policy? you make all the right points, tax reform, burdensome regulation. >> i don't know. i don't know. because whether you're a democrat or a republican, your objective should be to put people back to work, to put the american people back to work. >> exactly. >> one thing that is very clear, you can't count on the monetary authority to do more than we have done. we filled the gas tank,

streaming in the engine, but no one is stepping on the gas pedal to the full extent to accelerate job creation and that's because of all of the uncertainty. i don't understand this. if you're a d or r, democrat or republican, you should want to have more job creation and we can reboot tax policy and reboot the spending and re-adjust globalization and become much more competitive. i can tell you this, american businesses are more muscular, more lean, more fit and ready to roll if they would just let them out of the starting gate. and who controls the starting gate, it is the congress of the united states. >> mr. fisher talking to maria. here we are, just over an hour and ten minutes into trading day in europe. to the upside, not much, 5 to 4 advancers outpacing decliners. one standout right out here, best performing stock out of 600, kpn up 17% at the moment. this after america movil said it plans to make a buyout offer for the dutch carrier. the mexican telecom giant owned

by carlos slim has a stake of 30% of kpn and hopes to increase its holding with a bid of 2.4 euros a share. as far as other markets are concerned, ftse 100 outperforming today. basic resources, mining stocks doing okay. that's on the back of chinese industrial output up by 9.7% in july. above expectations. retail sales increasing by 13.2%. consumer unflation steady. xetra dax flat, ibex down around .2. bond markets, treasury yields, 2.59%, dominated by fed taper talk at the moment. gilt yields 2.5%, still higher than where we were before the quarterly inflation report. mr. carney coming out with forward guidance. on the currency markets, dollar down to a seven-week low. china data not helping. fragile, the dollar offers five straight losing sessions. dollar yen 96.73.

aussie dollar rebounding from its three-yar lows as well, gaining on that china output and the news from mr. weathers. mostly just below 133. that's where we stand right now here in the european session. let's recap the last session of the week out of asia. sixuan is with us as ever out of singapore. hi, sixuan. >> on the back of the much better than expected industrial output numbers, steady inflation data. chinese markets reversed early losses to end in positive territory today. property developers trimmed early losses after latest data showed property investment jumped by about 20% in first of seven months on year. for the rest of asia, south korea's kospi eased .2%. the nikkei 225 a touch higher but down nearly 6% on the week,

hurt by the strong yen. in china, resources plays let the gains. higher commodity prices in yesterday's upbeat trade data continued to let support to the sector. shares of rare earth jumped up by 10%. this on expectations of more industry consolidation down the road. over in hong kong, strong rally for the second session, up almost zijin mining jumped 3.7% today. in japan, nikon was the comfort performer, plunging over 14%, after its q-1 profit came in 72% lower than last year. but technology plays shocked up some decent gains in south korea. samsung electronics rebounded 1% after standard & poor's upgraded it by one notch to a plus.

while fitch also said the u.s. rolling favoring apple won't affect the credit quality. lg electronics also gained ground, up almost 3% after new smartphone launch yesterday. back to you. >> all right, sixuan. thanks for that. on today's show, we head to beijing to discuss the improving picture in china. we talked about it and find out if today's flurry of data can ease concerns about the economy. dallas fed president saying france isn't worried, but is he right to point the finger with bigger problems closer to home. a look at paris and the risk to the french economy. retailers hoping to get us back into back to school mode. we look at the rising sums of money changing hands and the implications with raymond vega. he'll be joining us. [ male announcer ] these days, a small business can save by sharing.

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strong showing by manufacturers in july having to push chinese growth concerns towards the back burner. industrial output up close to 10% on the year.

july retail sales fixed asset investment in line with estimates. and steady cpi, steady inflation, slight easing of deflation, factory gate showing signs of stability. what does this all mean in the round for our thoughts about china? eunice is in beijing with her thoughts. hi, eunice. how has the data been received today? >> well, a lot of people have been talking about how these figures really are positive, because we're seeing some signs of stabilization in the chinese economy. of course, there was a lot of expectation and hope that we would see some better numbers today, based on what we saw out of the trade data yesterday. the export figures and especially the import numbers really were raising expectations, people were really excited about them, especially on the import side, they thought, okay, this means that china's domestic economy is looking, you know, at least somewhat robust and on the export side, people were saying it looks like we're seeing

some -- sign of life in the u.s. economy, in the european economy and that's flowing over here into the chinese economy. of course, the big question, though, is whether or not this is sustainable, and at this stage, there is a lot of people who keep saying over and over, this is only one set of numbers, it is only for one month, we really have to wait and see exactly what happens next. ross? >> yeah. so how are policymakers likely to react? they sort of have been careful not to want to do too much. >> right. and that's probably what is going to continue to happen. i mean, we're expecting that the policymakers are in this wait and see mode, let's see exactly how things pan out. there is a lot of discussion about how maybe because of the pricing pressure isn't really there, especially on the consumer inflation figures coming in relatively flat and then the producer price numbers coming in a little bit better in

the fact that the, you know, the declines aren't as strong, but, you know, we're not seeing a lot of pricing pressure now so people are saying, well, okay, that kind of gives you license as a policymaker here to do more coming in with some stimulus, but at the same time, a lot of the noise that we have been hearing from the government here has been, you know, we want to make sure that inflation is in place. we don't really want to stimulate the economy. we want to actually be more comfortable with the idea of a slower chinese economy. and so that's -- at this stage, what a lot of people are expecting. you could talk to a lot of different brokers who say, okay, we really should see the chinese economy doing something more, especially if you want to hit that 7.5% of growth target for the year. but at this stage, we're all just kind of, you know, waiting and seeing what exactly happens. >> all right, eunice, good stuff for now. thanks very much. that's the latest from beijing, less smoggy there today. that makes everybody happy. joining us from hong kong, chief china strategist at macquarie.

thank you for joining us. are we having a cyclical rebound in china at the moment? >> we don't believe that's the case. as you said on the program earlier, most of the numbers released today, cpi, and consumption growth, were more or less in line with expectation. and the surprise came in in the industrial production side, particularly driven by electricity growth. but we don't know how much of that growth -- of that was due to the particular hot weather in the month of july. so the big picture we are seeing is that china is in a secular slowdown and perhaps we're just seeing a stabilization from the recent decline in growth, recent periods. >> yeah, okay. you think we shouldn't read too much into that because it may be just for one-off factors?

>> absolutely. and let's remember, a lot of the recent strength in some of the commodity areas was partially driven by the end of the -- the restocking and there is some seasonal factors in those numbers as well. as you mentioned earlier in the trend number which were released yesterday, the import was up, i think, 10.7% and the export was up about 3%. 5%. but if you adjust for the seasonality, the growth was a lot less than what -- >> what is interesting is mining stocks here in london have bounced. there is a knee jerk reaction because they're reassured by the data. what would your strategy be right now? >> we have been advising our clients to basically focus on two areas. one is defensive, seeing such as consumer staple, food and

beverage, but then the other area is with a very good visibility of secular growth. for example, some of the green energy areas, the gas area, the wind power area and the -- buying a car is basically part of a chinese dream. so that's why you continue to see very strong sales growth of all those sales in china, either in this slowing macro environment. >> yeah. kind of interesting that that breakdown. is there any impact from -- sort of been a shift away from conspicuous consumption, the government trying to get local authorities to buy locally made or chinese products rather than european products. is that having any impact? >> we are not seeing that much impact yet in the grand scheme of things, but we are seeing chinese government that has so far failed to do really stimulate the domestic

consumption, to steal away the economic growth from the investments towards the consumption side. if you pay close attention to some of the policies that were announced recently, it looks like the target again is in the infrastructure investment and real estate investment side. it is sort of the same old game again as they played back in 2008, which, by and large, has been somewhat disappointment for a lot of investors and analysts. >> okay. thank you very much, chief china strategist at macquarie in hong kong. find out how much faith you can have in the chinese figures. one analyst says he's a big china data skeptic. find out more, head online to cnbc.com. greek finance ministers admit the country will need a primary budget surplus and growth before it can return to bond markets. also claims the eurozone needs common debt markets to fix the block debt crisis.

president obama says he's confident the greek prime minister is committed to taking the tough actions needed under the nation's international bailout, meeting with samaras at the white house, obama emphasized the importance of growth over consolidation, saying that austerity is not the only strategy. >> it is important that we have a plan for fiscal consolidation to manage the debt, but it is also important that growth in jobs are a focus. >> and striking more defiant term, the greek prime minister suggested the forechutunes of ee and greece were intertwined. >> if greece succeeds and it will succeed, our success story is also a european success story and i believe this is very important. >> brazil's finance minister called on the imf to review its aid package for greece and the broader eurozone. his comments came as he was attempting to clarify the stance on greek latest aid tranche.

brazil had abstained from the vote, but switched its position to support it and said this had occurred due to a communication problem with the imf's board member for brazil. if you have any thoughts or comments, e-mail us, worldwide@cnbc.com. plenty more as well to come on the show. president obama's overturned a trade decision against apple last week. might he do the same for the korean firm samsung? we'll preview the latest legal milestone as the tech giants square off again. more on that coming up. plus, of course, our roundup of where we stand ahead of the u.s. trading session today with the dollar a little bit on its upward, five days of losses. plenty more to come on the next part of "worldwide exchange." [ kitt ] you know what's impressive?

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strong industrial output, resilient retail sales in july. could this be the bottoming of china's growth slowdown?

kpn soar to the top after carlos slim's america movil makes a bid for the dutch telecom group it doesn't already own. richard fisher in an exclusive interview on cnbc joins the chorus of central bank officials calling for the eventual end of the fed's massive bond buying program. >> if things go as the committee expected, then i would expect us to dial back. we'll have to see what the data and the feeling is between now and the time we next meet in september. >> and international energy agency maintains oil demand forecasts for this year, but warns of a slowdown in 2014. trade numbers out of the uk. the june adjusted global trades deficit 8.1 billion. the may trade deficit was 8.7. narrowed slightly. forecast at 8.4.

so it actually narrowed a little more than we thought. the noneu trade at 2.6 billion. goods exports, interesting statistic, goods exports record high in the second quarter, driven by non-eu sales, that's the kind of thing the government is trying to engineer. that's a number for a while, maybe signs it is finally starting to happen, but, of course, one month's data doesn't make a summer. slightly better than we might have thought for uk trade data. european equities, a little mixed today. mining stocks doing pretty well in london, outperforming, though it is flat on the ftse 100. because of chinese data. the ftse mib down .2. as far as bond markets are concerned, we are steady right now. treasury yields just below 2.6%.

bund yields below 1.7% as well. news out of the bank of russia, it left its key interest rates unchanged, holding refinancing rate at 8.25%. its one day fixed repo rate unchanged at 6.5%. and they're going to hold the next rate setting meeting on september 13th. they do expect inflation to slowdown in the second half of this year, they say consumer demand is the driver of economic growth, weak economic, also weak investment activity poses some strong downside risks for growth. that's the latest on russia. meanwhile, for the dollar, we're down to a seven-week low, dollar pretty fragile after five straight losing sessions. dollar/yen down to 96.64. euro dollar steady below 134. sterling just above 155 at the moment. and dollar slightly firm against

the swiss frank. we saw a recovery in the aussie today as well. corporate news, blackberry is reportedly more open to the idea of going private. reuters say the ceo thorsten heins and the board is coming around to the idea to get more breathing room to fix the problems. blackberry hasn't starred any sales process. the reports suggest the company could find it hard to come up with a buyer and the money to go private. so we'll keep our eyes on that. the shares are down more than 19% this year, just fairly flat right now. u.s. international trade commission set to decide whether to ban samsung phones and tablets from entering the american market. latest legal battle follows a decision by president obama to overturn a trade ban on older apple products entering the u.s. amid a string of claim and counterclaim, they're accusing each other of stealing key designs and technology.

>> seems like a never-ending story of finger pointing and name calling, but tonight we could see the balance between samsung electronics and apple and this decision from the u.s. itc could be a barometer of how the rest of the battle unfolds. there is three scenarios, first, the most likely scenario, for the itc to stick to its preliminary ruling back in october and ban samsung products. two, they could overturn the preliminary ruling and decide on swapping the import ban altogether. if this doesn't happen very often, but the itc could make a rare decision, in order to make sure that president obama doesn't feel pressure to veto samsung's ban as well. bear in mind there is mounting pressure on the u.s. president to take a fair action amid noise there is a trade war possibly brewing. the korean government also has been quite vocal about this and called for fairness from the u.s. president as well. the third scenario is for the itc to delay the ruling.

they postpone it on apple five times. given the complexities and the attention we could see a delay. most analysts don't think this is going to have an impact on samsung electronics earnings because on the ground it is samsung winning the battle with more global market share and sales. it is the older galaxy models that will be banned, not the galaxy s-4. both companies will also be arguing in the federal court in washington, d.c. tonight on whether apple should get a permanent injunction against samsung products. if you remember in august last year, a jury found the products to have infringed apple's patent. so not one but two battles being fought tonight. big day for both samsung electronics and apple. >> all right, thanks for that. nice to see you, rhee. we keep getting lawsuits, keep getting court cases. i don't know where it is taking

us. >> if you really look at it, apple and samsung has had absolutely no material impact on the market position of either of these companies in the last 18 to, you know, 24 months. and majority of the battles in question are to do with maybe earlier versions of products from both these companies and there is no real material impact on the marketplace today. >> yeah, so it is not really -- it shows you how competitive the marketplace is. why don't they just keep going with it. they don't know what else to do. they're locked in a process and there we go. >> yeah, i think it is to do with the intensity of competition. initially it was all about making a competitive story, it is about that differentiation. the market moved so quickly in recent times, consumer

expectations of both these companies in terms of new innovative products are now, in fact, far exceeding the ability of these companies to actually deliver the products. so the background is shifting. i just hope that, you know, it is quite possible maybe a third company may come in actually take the market space away as both companies continue to fight legal battles. >> yeah. now, meanwhile, how are they facing up against consumer expectations about what we get from these companies? is the competition good enough to -- for them to meet what consumers now expect? >> i think there is a lot of expectation in terms of new kinds of products in terms of better integration with media products, be it television and there has been a lot of talk about apple doing that. from the perspective of samsung, there has been a lot of discussions around variables and how variables has a new

category, likely to emerge, so over the next three to four months we're likely to see a fair bit of new product innovations and new product introductions from both companies. and that would actually decide, you know, the success or failure. we're looking forward to the next generation of the ipad, maybe the samsung note will be there. you're going to see maybe improved version of the ipad mini as well as a larger screen size for -- for the next quarter, we pretty much -- interesting quarter to see how well the companies fare in 2014. >> yeah, is anybody else going to be able to crash the party? >> i think, you know, google now has some impact with the launch of the latest product of motorola. that is -- it showed some promise, but not enough promise to make a significant dent in the market share. microsoft's products have

been -- not had any material impact as of yet. as of now, we have yet to see any company which can, you know, attack or make a significant change in the market share, at least in the next 6 to 12 months time frame. >> okay. thanks for that. the s.e.c.'s reportedly pushing jpmorgan to admit wrongdoing for the london whale losses which would be an unprecedented move. companies have long been allowed to neither admit or deny wrongdoing in settlements. a settlement could come this fall and the s.e.c. hasn't threatened to charge any jpmorgan executives or trader bruno ecsil. losses topped $6 billion from executives in new york. the troubles don't end there. reports suggest the justice department is stepping up the probe of dealings before the crisis.

stock in frankfurt up about a percent. shares of commerzbank rallying for the second day in a row. credit suisse raised its target price on the stock following yesterday's results. martin blessing vowed to stay on until he's completed his reform plan, calling it absurd to give up prematurely. restructuring aims to get a return of 10% in the next three years. perspective bidders for the 300 branches of rbs have been given more time after the deadline was pushed back to next week. the royal bank must sell the branches as part of the government bailout deal. there are reported to be three bidders interested, which is estimated to be 1.5 billion pounds. over the last week, rbs shares are down by 3%. the world's biggest tiremaker bridgestone has a record profit for the first half of this year.

for mo >> bridgestone posted a $1.2 billion net profit for first half ending in june, up 56% on the year. strong overseas sales helped boost profits, in the u.s. market, thanks to upbeat car sales. bridgestone's planning on a series of big investments in the north american region to capitalize on solid demand. it's currently building a factory in south carolina to make giant mining and construction equipment tires, hoping to begin production next year. the weaker yen and solid bus and truck tire sales in the domestic market contributed to the record profit as well. bridgestone also updated forecast for this fiscal year. sales are projected to rise 18%, or $37 billion, and its net profit expected to increase 43% to $2.5 billion. ross, back to you. >> thanks for that. have a good weekend. japan's economy may be improving, but consumers remain

far from upbeat. a candidate office survey signals the consumer index worsened in june. australia central bank trimmed its growth to 2.25. china fueled mining boom fades. there may be less need for rate cuts if a weakening aussie dollar helps boost the country's competitiveness. tesco in talks to combine businesses chinese retail operations. supermarket giant says it entered into memorandum of understanding with the group to create a business with sales of some 10 billion pounds. it would give tesco a 20% stake in the new entity. not just tesco that could be set for a revamp.

the retailer unveiled a new concept store north of london. karen tso has taken the look. >> this is the latest experiment by tesco, one of three trials across the uk, and you may be forgiven for thinking it is created in a small lab or tiny test tube as we're forced into more metro shopping or online purchases. as you can see, it is a rather large store. so what exactly is going on inside? browse, taste, and try. meet, relax and be pampered. tesco's hoping to transform its supermarket into a retail destination. it is the first time tesco brands have been brought under the same roof. with the stand alone fashion store for the inner fashionista and indy style coffee shop and food in a separate section for convenience. aisles and aisles of groceries remain, but with useful baby,

back to school, and home ware departments, lower sidelines help you to find your way. after a solid three hours in store, i've got to say this doesn't feel like a tesco. and that's exactly the experience the supermarket giant is going for. if this trial works, this could spell the revival of the hypermarket format. karen tso for cnbc. if you got any thoughts or comments, e-mail us, worldwide@cnbc.com. still to come, not portugal and not even greece, speaking on cnbc, dallas fed reserve president richard fisher says france is his biggest worry for the eurozone. reaction from paris after this.

another voice joined the chorus calling for tapering qe. richard fisher telling maria bartiromo if the jobless rate reaches the right level, they would wind down the bond buying program next month. >> if you really look at what we have said in print and in everybody's statements including the chairman, and that is that we would hope to end those asset

purchases as we approach 7% unemployment. >> fisher hasn't just been making his way through tapering, he says france worries him more than any other eurozone country. let's get reaction from paris. stephane has been gauging it for us this morning. how is that going down, stephane? >> well, for sure, ross, it is very different message that we ag are getting on the ground from the french president. the finance minister said earlier this week there were signs of recovery, was mentioning the pmi, latest pmi indicators. however, he hasn't said he didn't see at the time the numbers we have this morning for the industrial production, down 1.4% in june, well below expectations. they believe the country went out of recession in the second quarter with a gdp increase of 0.2%. next wednesday we'll have the first estimate for the french

gdp for the second quarter. still, for the full year, most economies believe that the french economy will shrink slightly, probably 0.1%. but that, of course, even if there is a small recovery, it won't be enough to improve the jobless rate. that is one of the main issues of the french economy. jobless rate was at 10.4% at the end of the first quarter, record level. and according to a new survey, majority of french people, 84% believe that the french president will not be able to improve the labor market by the end of the year as he promised. the second problem for france remains the fiscal consolidation because of the weak economic activity, the tax income is lower than expected. and that's currently missing the road map in terms of deficit reduction. we have, ross, the confirmation this morning on the first six months of the year, the budget deficit in france was at 59.3 billion euros.

that's to compare with 56.7 billion a year go on the first of the year, the spending from the french state increased by 5.9%. while the tax increase brought only 5% more, which makes a difference of 9 billion euros. so that's not the message we have from the french government, but, yes, i understand the concerns of richard fisher regarding the french economic situation. >> i like the way you say his name. richard fisher. >> richard. yes, richard. we say richard. >> i like that, though. >> very french. >> very good. >> ross, i've seen karen at tesco. where will you go? i'm sure you'll do field reporting. >> harvey nichols probably or somewhere down german street. i don't know. >> simple. >> exactly. exactly. maybe i'll come to paris. you can take me -- you can show

me the right places to go. >> shopping in paris. we need that. bring your british pumps. >> perfect. thanks, stephane. right. the dollar is upward today, down five sessions in a row. what's going on? jonathan webb at jeffries base in london. jonathan. >> good morning. >> good morning. how much more dollar selling have we got to come? >> well, i think -- i many agree, a slightly odd situation we find ourselves in where the u.s. economy is recovering, the eurozone is in recession, fed's tapering, the ecb is probably going to cut rates soon and the dollar is doing badly. i think this is a couple of things, though -- >> say that again. you think the ecb is going to cut rates soon. >> i think -- >> really? >> that wouldn't surprise me at all if we saw a rate cut before the end of the year. i think the european economy is not recovering and our guys here have been pretty good on this

sort of stuff, you know, definitely see -- >> outlier, jonathan. none of the other people think that. >> i think what we'll find with this eurozone recovery is it just won't be, you know, just won't be sustained. there is lots of serious problems. the euro isn't blowing up like it was last year, but the idea of a strong recovery, i think, is not going to -- not going to come through. but take that -- take that altogether, you got to say the dollar is -- dollar doing pretty badly. the way we see it, the market got ahead of itself with dollars, but the second thing is, is that in terms of tapering, the -- in terms of tapering, you know, we still got qe over the next -- the next six months, where the ecb balance sheet is this rifrning. it is a amount of time for the

dollar, but it is going to go up what about the pound, a fascinating reaction to -- the market doesn't seem to believe what the bank of england is doing or don't believe the forecasts. >> i agree with you. i think they're right -- the uk economy looks to us to be bouncing back. i think .75% reduction in unemployment isn't particularly ambitious for them to consider rate hikes. we actually -- beginning of the week, we said the pound would rebound. that was the sort of title we had. and i think things are in place. the uk economy is recoverying and and the market is far too bearish on the uk. and i believe that, you know, the risks of further recovery in the pound as we go on. >> all right, good to see you, jonathan, thanks very much for that. have a good weekend when it starts for you.

>> thank you. >> right. we'll keep our eyes on what is going on with the dollar. kpn moved sharply higher in early trading after america movil plans to make a buyout offer for the dutch carrier. mexican telecom giant owned by carlos slim has a stake of under 30% in kpn, now hopes to increase holding with a bid of 2.4 euros a share. sam cue is with us on the phone from sanford bernstein. good to speak to you this morning. do you think they will do this? will they take control? >> i think they want to. i think they bought the 13% stake 12 months ago now and their intention was to expand from mexico and latin america into europe. and kpn has a nice business in germany. i think this is all about the german business. so two or three weeks ago, kpn announced they agreed to deal with telefonica to sell.

i think it is about germany and not necessarily about the netherlands. >> yeah, so when they talk about, you know, to facilitate greater operation, coordination between the two companies and potential partnerships and all that sort of stuff, how would they exploit, if they took control? >> there are things you can do at the global telecom in terms of purchasing power with manufacturers. i think the real story is the opportunity carlos slim, who is the owner of amx, saw in europe. and so telecom sector in europe has been an awful sector for the past four or five years and valuations are near all time lows basically. at the same time huge macro head winds. he came in and saw, i want to diversify away from mexico and these european stocks are undervalued on a long-term horizon. so he's got a five or six year horizon buying the stocks at really low levels, makes a ton of sense if you believe in a longer term macro turn around in europe. that's his game, i think, really

long-term uplift to a story in germany which will see consolidation from 4 to 3 operators that could create a lot of value for him. that's where the real value is. >> it is not that he thinks he can do anything better in term of operationally. he thinks i got more money and i can wait it off. >> he has huge expanse of telco in latin america. i think most of it is to do with him seeing an opportunity. he's not going to become the richest man in the world by not spotting good opportunities. a lot of people were skeptical given how the stock performed since he bought it. he got the right company, just not necessarily the right timing. >> is this the right timing? >> yeah, i think it is. two weeks ago, telefonica made a bid for the german business. and i think the point is the combined company there will have really great synergy potential. and kpn will be retaining about 17.6% stake in that combined business going forward.

i think what this offer for kpn means is that amx basically wants more of a stake in germany and want to participate in what is the biggest market in europe, the telecoms. that's where his expansion focused, on germany. >> they wouldn't want to keep the german mobile business? >> i think they want to keep it, for the moment the structure of the deal is kpn gets 5 billion euros in cash and 17.6% stake in the combined company. i think the point is you want to keep capital in the german market and don't want to take capital away. >> sam, thanks for that. good to see you. good to speak to you. still to come, the most profitable spot on earth. we'll look at the business of football with ramon vega. ♪

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you're watching "worldwide exchange." strong industrial output, resilient retail sales and steady inflation numbers in july. could this be the bottoming of china's growth slowdown? kpn soared to the top after carlos slim america movil makes a $9.5 billion bid for the dutch telecom equipment group it doesn't already own. the s.e.c. could reportedly settle its case with jpmorgan over the london whale losses, with a rare twist, admission of guilt. and dallas fed president richard

fisher in an exclusive cnbc interview joins the chorus of central bank officials calling for the eventual end of the fed's massive bond buying program. >> if things go as the committee expected, i would expect us to dial back. we'll have to see what the data and the feeling is between now and the time we next meet in september. warm welcome to you, watching "worldwide exchange." just joining us this morning, state side, this is where we stand right now. futures lower this morning. we're about, what, 36 points below fair value for the dow. the nasdaq, six points below fair value and four points below fair val ya fue for the s&p 500. the ftse cnbc global 300 is flat.

the ftse 100 is outperformer, mainly because mining stocks got something of a boost on better chinese data factory data lifting the aussie and miners as well. ftse up .2%. the xetra dax is down .2. ftse mib, similar losses for the ibex too. as far as bond markets are concerned, treasury yields just below the 2.6% level. gilt yields just below the 2.5% level. and on the currency markets, the dollar, not having the best week of it really. down seven-week low. the dollar index licking its wounds on friday, off five sessions in a row. dollar yen, 96.63. little weaker than where we have been. the aussie dollar benefitted from the chinese data, up to.9156. euro dollar just below 134, spent the early part of the course just below 133. just to recap those commodities as well, chinese data helping out, nymex back up to 104.

brent just below 107. spot gold, around that 1300 mark. copper, up to 327. that's where we stand right now here in europe. let's recap the final session of the week out of asia. sixuan is in singapore. hi, sixuan. >> thank you, ross. asian markets ended the week on a mixed note, despite steady economic economic data from china. shanghai composite ending higher by .4%. and hang seng gaining .7%. japan's nikkei 225 switched back and forth between positive and negative territory before closing higher, just by a tad. nikon plunged more than 14% today, hurt by disappointing earnings. but mitsubishi materials soared nearly 10% after posting a threefold jump in its net profit. over in hong kong, chinese coal producers were on fire today. that's on reports that they have

started to raise prices thanks to healthier demand. china shenhue gained 6% today. shares in south korea ended higher after s&p raised its rating by a notch to a plus. the company still waiting the u.s. itc's ruling on its patent with apple. lg electronics jumped nearly 3% today, following good reviews on its recently launched smartphone. and that's a quick update of the asian markets. back to you. >> sixuan, thanks for that. so, dallas fed president richard fisher says the central bank has begun to socialize the idea that qe will eventually wind down. he predicts people will accept the fact there is no such thing as qe in infinity. in an exclusive interview on cnbc with maria, fisher echoed what policymakers said recently that the fed could begin tapering its bond buying program next month, provided the economy is holding up. >> we're all singing from the same song book, so it is the

same message, maria, which is if things go as the committee expected, then i would expect us to dial back. we'll have to see what the data and the feeling is between now and the time we next meet in september. >> asked what companies are saying about the economy, he said he never hears complaints about monetary policy. said businesses are more worried about taxes, government spending and too much regulation. julia coronado joins us now. julia, always good to see you. very good morning to you. >> good morning to you. >> so, look, is the economy strong enough for tapering to begin in september? >> it is all glass half full or glass half empty. gdp certainly isn't strong enough. and, in fact, when the fed meets in september, they're going to have to mark down their forecast. on the other hand, hiring has held up pretty well, at least the headline number still looks pretty decent. and that seems to be good enough for some people on the fomc,

certainly richard fisher, but we haven't really heard from the core members from bernanke himself lately, from vice chair yellen, from president dudley, and they have tended to be the ones driving policy. so it is a bit hard to read the tea leaves now. if it is not september, it is probably december. but i would say the message is from economic data have been mixed. >> yeah. so go on, go out on a limb here for us, right, you got to call it, is it 50/50 or, you know, for september or what are the odds? >> i actually think they're going to wait until december. that's our call. it is a little bit out of consensus right now. it seems to me a big communication hurdle to announce both a downward revision to your forecast, yet again. they had serial downward revisions to their forecast. they have been systematically too optimistic and announced tapering at the same time.

in september, we're going to be just in the middle of a very nasty budget fight yet again. it is not fiscal cliff days, but it is going to be loud, it is going to be contentious and going to be up in the air very much so when the fed meets in mid-september. i think from a communications standpoint, it just makes sense to be a little more cautious. >> yeah, they don't have much time, do they, for the budget talks, bearing in mind now kind of in recess as well, julia. here's the thing. do you think investors of the markets are now slightly more -- to the idea of -- we're now talking about it for so long. we talk about it forever. when it does happen, is that part of the plan? we talk about it for so long, we don't care when it eventually happens? >> well, absolutely, i think it is largely priced in, but that term can always be misleading. what does priced in mean? some certainly some significa

significantly priced in. emerging markets have been hit by the taper talk. i think a large amount of it is priced in, but then what happens when the actual announcement comes, what do investors focus on then? do we then jump ahead and start focusing on the exit, the first rate hike, you know, what the fed has been learning is that markets can move in ways that they don't always anticipate very well. and sometimes that volatility can feed back into the economy. so, again, i think they'll probably err on the side of caution and that will just keep markets -- markets have stabilized in the last few weeks. and i think that's probably a good thing. and i know that they have been humbled by the market reaction post june fomc meeting. they didn't anticipate the volatility that ensued. >> yeah. julia, another story i want to get your views on, another position with the fed, sandra

pianalto is retiring next year. the latest fed official to step down following elizabeth duke and sarah boone raskin, who is moving to the treasury. bernanke expected to leave as well when his term ends in january. pianalto isn't a vote on the fomc, but cleveland is in the voting rotation next year. julia, we got a big change going on here with the fed. here is another one, you know, going to be caught in a voting change as well. how different could the fed look next year? >> this is a very complicating factor for the fed. they're trying to rely more on forward guidance on interest rates and less on qe at a time when the very structure of the fomc is very much up in the air. we have got, as you know, a number of openings coming up, and the chairman himself is leaving and that obviously is a very contentious battle right now. so it really makes it very

complicated to rely on forward guidance when we don't even know what the fomc is going to look like six months from now. and it is also complicating their ability to communicate. we haven't heard from the vice chair. she's usually very reliable. >> that's exactly the problem we have got here with bank of england. you know, if you're issuing forward guidance and getting new members joining your board, are you binding them to the forward guidance had they're supposed to be independent. i don't know how that's supposed to work. >> it is a complicated thing. for the bank of england hasn't been working out so well, has it? >> we're just about to start this experiment, we're following you guys. we'll see what happens. julia, stay there as well. strong showing by manufacturing in july, helping to push chinese growth concern. industrial output ramped up close to 10% year on year beating expectations. july retail sales and fixed asset investment fell in line with estimates. on the inflation side, that's fairly steady. and they also follow solid chinese trade figures out yesterday.

let's get more from eunice, who is with us in beijing, where we're relieved to see there is slightly less smog today, eunice, or pollution i should call it. look, how are these figures being treated? >> well, i think most people are saying at this stage that it looks as though these are tentative signs that the economy is stabilizing. we had those industrial production numbers, which really surprised people, positively, they came in at 9.7% for july. that was a lot higher than the market consensus. and on top of that, that comes after the trade data that we saw yesterday, which was really quite strong, especially when he took it apart, looked at the import figures, which showed there is some strength in the domestic demand. and also the export figures indicated there was more robustness in the markets of the u.s. as well as the -- as well as europe. that really helped to raise expectations. in terms of the inflation figures, we really saw that the signal is that the pricing

pressures are really aren't a major issue at this point. the consumer inflation came in relatively -- came in flat, and the producer prices indicated that there is still a big issue with overcapacity in this country, but that, you know, it is still not -- it is not really a major issue in terms of the pricing pressure and what that means for inflation. a lot of analysts have been talking about how this could indicate that there is room for policymakers, maybe step in with mini stimulus. at the same time, adjust from all the noise we have been hearing from policymakers over the past several months. they have indicated they are not fearing some slowdown in growth, and not necessarily going to step in at this time to try to pick things up further. ross? >> all right, eunice, good stuff. thanks for that. that's the latest from beijing. have a great weekend there. demand for oil and the

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recap of the headlines today, a slew of data in, slowdown in china may be coming to an end. carlos slim snaps down a bid to

buy out dutch telecom group kpn. jpmorgan close to settling with s.e.c. over london whale prices. half of the price may be having to admit guilt. global demand for oil from opec countries is expected to climb this year according to the international energy agency. it increased its demand forecast for opec oil to 29.8 million barrels a day, a rise of 200,000. the iae warns that disruptions in iraq and libya will reduce the group's output in the coming months. the latest report, they say america's shale boom is protecting the world from steep prices. m nymex and brent slightly sharper today. julia, how is oil and gasoline prices? we have seen massive drawdowns on inventories in the united states, which has boosted the wti. how is that playing into the

sort of economic forecasting and the fed's thoughts? >> well, i mean, i think we had a little bit of a bump up in energy prices. but really basically for the u.s. consumer energy prices have been bumping around, but basically flat over the last few years. the energy boom in the u.s. has really put an effective cap on energy prices here. so, yeah, we have gotten a little bit of a bump up at the pump, in the last couple of weeks, but nothing that i think derail the u.s. consumer. in fact, underlying inflation has been quite low. it seems that the u.s. consumer has taken the reins of pricing power back from businesses and we have had a rolling series of downward pressure on a variety of prices. and core inflation is running quite low. so i don't think inflation is really a problem for anybody. certainly not for fed policymakers and it is one of the areas that is a relative

bright spot for the u.s. economy, relative to some others. >> bill gross says the sell-off in the bond market isn't that big a deal. on thursday, gross said the total return fund would triumph from the bond wars and could see investors on returns. he did pull back from the statement later on cnbc. said downturn had been a minor skirmish. >> not like the cuban missile crisis or a nuclear war. it is more like grenada in terms of what we have gone through. i mean, the average bond fund is down about 2% this year. pimco a little bit less. we're doing better than the market. >> julia, he said the average bond fund is around 2% this year, and he said the dow saw a similar decline. investors woentd n't be pulling of the stocks the way they're fleeing bonds. is that fair or not? >> it is bill gross' interest to try to stabilize the outflow and one could argue that investors should have expected some losses in fixed income at some point

given how low bond yields have been. but that said, it is very hard to predict actual investor behavior and the latest data on bond -- on mutual fund flows that show that those outflows are still happening, so, you know, investors are seeing the writing on the wall, if the fed is telling us rates are only going in one direction, why are you going to sit around and suffer those losses? why wouldn't you reallocate into another asset class that isn't so vulnerable. that's one of the dangers of taper talk. >> you know, what is the risk the fed loses the bond market or yields -- are we comfortable if yields trade in 2.5 to 3% range on the ten-year? >> well, i mean, you know, for a lot of investors, central banks, and other institutional investors as yields have risen, they have become attractive enough for them to come back in and that stabilized the market. but we certainly are all a bit nervous about the flow issue. can it get out of control, can

it run beyond the fed's ability to anchor. so, you know, that remains to be seen. but i think, you know, from a fundamental standpoint, treasuries are still very attractive as a store of value, as a liquid safe asset, and they will always retain that, at least for the foreseeable future. so that will keep a certain back stop in the market, but can yields drift higher from where they are? certainly they can. >> julia, thank you for that. julia coronado. still to come, it is the biggest -- on earth. is it the most profitable? we'll look at the winners and losers in the sport of football or soccer as some call it with ramon vega. [ male announcer ] it's time. time to have new experiences with a familiar keyboard. to update our status without opening an app.

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now manchester united new manager david moyes taking over the reins from sir alex ferguson who announced retirement in may. one of his key tasks is to control a squad of young millionaires. ram ramon vega is on the phone, enjoying life on the spanish coast. good to speak to you. >> good morning, guys. how are you today?

>> we're very well. manchester united according to forbes no longer the richest football club. they say that's real madrid. do you agree with that? is real madrid a better commercial entity now than man u? >> listen, there is always a question on both. i say both are extremely commercialized because both are an enormous brand in the world of football, okay. so both compete, i think, the top five clubs in the world, okay. now, real madrid always will be a brand and always was a brand beforehand. they have cleverly done it over the last 20 years with an enormous job. premier league -- real madrid was always there. one of the biggest clubs in the world since -- for that point, the commercial arm saw enormous

advantage and added to that. >> the interesting thing is, forbes, just to recap, says man u is worth 1.17, madrid, 1.3. madrid has pursued this policy of galactic, turbocharging, payingfortune in wages and travel fees. if you pay an awful lot of money to get the best players in the world, you can generate it back and get receipts and merchandise and everything else? >> very much in terms of philosophy. we're talking the biggest -- on the planet. they have access to customs and clients and support worldwide. we are now in a world of media and internet where you guys are always talking about it. around ten years ago, you -- now you talk about it. that's distance already to start

with. these guys have already enormous platform to catch up -- you name it. every single thing with a small brand sold worldwide, so therefore you can see that power there. now, in sense of wages, coming back to the wages and potential, i think from that point of view, that is what is attracting the selling part. if you don't get the best players in, you won't sell any shirts because you want access to the top platform of consumers. therefore you need to spend because they know on the back side they will sell shirts in asia, in the states as well, worldwide. >> briefly, will they ever crack -- will european football ever really crack the states in a big way? >> i think the states is really much on the way there. i think there is enormous last

10, 15 years, you know, from the football point of view, i understand you call it soccer, soccer is coming up and coming. the league is up and coming. the women's league for sure and the men's one as well. people really watching more and more soccer over there. and i think the u.s. wants to see that part as really growing and make money and that's a real american way of thinking. need to see to make money out of the franchise, they'll push it through and make it happen. >> ramon, good to speak to you. have a good summer down there. ramon vega from vega swiss asset management. u.s. retailers are ramping up back to school sales. we'll talk about that in a few moments.

you're watching "worldwide exchange." i'm ross westgate. your headlines today from around the globe. strong industrial output, resilient retail sales, inflation levels in june, is this the start of china's growth slowdown bottoming out? kpn soaring to the top after carlos slim and america movil makes a $9.5 million bid. the s.e.c. could reportedly settle its case with jpmorgan in the coming months over the london whale losses with a rare twist on admission of guilt. and dallas fed president richard fisher in an exclusive interview on cnbc joins the chorus calling for the eventual end of the

fed's massive bond buying program. >> if things go as the committee expected, i would expect us to dial back. we'll have to see what the data and the feeling is between now and the time we next meet in september. right, if you've just joined us, very good morning to you, this is where futures stand at the moment, for the u.s. we snapped a three-day losing session yesterday, dow up .2, nasdaq up .4 as well right now. we're called lower. the dow futures about 36 points below fair value. sorry. 39 points, the nasdaq at the moment is four points below fair value. ftse 100 is up, outperforming because mining stocks doing

better on the pickup or slightly better at trade data out of the china and xetra dax and ftse mib fairly flat and ibex flat as well. u.s. consumers should get set for a whole lot more back-to-school deals in the coming weeks. analysts say early on shoppers are holding back on buying fall merchandise. reports this week show same store sales from about a dozen retailers up 3.5% in july, the slowest pace since march. we could get a clearer picture of how the back-to-school season is faring when walmart and macys report earnings next week. one event that could get parents out to stores this weekend is back-to-school saturday, which features more than 40 top brands like macy's. h&m and aeropostale. the latest issue features boy band sensation one direction as well. that's an interesting -- why is that, jason? are they going to shift product?

>> yeah, well, we're seeing inventory clear from summer shelves and new inventory coming online. we're encouraged at team vogue by what we're seeing from retailers. the product looks great, on trend and really relevant for this millennial consumer. >> we just -- i said in the introduction, you know, people are waiting a little longer than they normally are. is that that you think is happening? why is that? >> well, i think that people are a little more cautious now. they're definitely looking for value out there. they may be holding back a little bit. as we move into the heart of the season in the next few weeks with great event programming like back-to-school saturday that we created, we think people will start to spend a little bit more. we did a poll with readers this week, ross, eight out of ten of our consumers intend to spend more or the same as they did last year, which is encouraging for retailers now. >> how did last year match up in, you know, the -- >> last year was a

record-breaking year by all accounts. 6% comps in august alone. $84 billion season according to the national retail federation. so we're up against a big numbers moving into this season by all accounts it should be a good year with what we're seeing and hearing from our consumers and seeing from retailers. >> we refer to this branch of consumers as millennials. how hard is it to attract -- to separate their cash from their -- how hard is it to attract the customer? >> it is tough nowadays, ross. this generation has more influence than any generation prior, mostly because of the digital, social and mobile world they live in. they consider as many as 48 brands every time they walk into the store before they make one purchase. half of them say just because they bought a brand from a fashion company or a beauty brand doesn't mean they're necessarily going to buy it again. so it is harder than ever to connect with this consumer, but retailers are catching on to this. they're marketing more multichannel than they ever have before, h&m came on with

e-commerce, macy's is a 150-year-old retail brand but figured out how to connect the dots, which is good news for them. >> what makes them trust a brand or give -- or makes them want to be loyal to a brand? >> they're looking for security, they're looking for independence, they want brands that make them feel confident. they want product that is on trend and relevant. and they certainly, as i'm talking about, they want to be connected to 24/7. they have more power and influence than ever before. and because of social media in particular, they can create relationships with retailers anytime they want. so retailers who are catching on to this trend will make consumers more loyal in the long-term. >> yeah, and how important, you know, how important does the social world play? we saw the twitter revolution, following facebook as well. how important is social for the millennials in having an engagement with brands? how important is social

recommendation or them following people on twitter and saying, look at this, and then discovering it that way? >> big time. it is such a key part of the retail experience now. you know, consumers go into a store and tweet and talk and they post and they pin about product that they love. those interactions used to be limited to fraternity party, if you were in college, or parties with your friends or social networks. now, because of social media, they have their entire world in the palm of their hands and they can connect the product and the experiences that they're having at retail with their entire network that is, you know, hundreds and thousands deep. and that's fear of influence continuing on and on and on from there. it is really important that retailers have this connection to this consumer through social media now, more so than ever, it is certainly changed both the loyalty landscape and ultimately the retail landscape as we move into 2013 back to school. >> jason, good to speak to you. thanks. from team vogen vogue, thank yo one major case could be moving towards a resolution.

let's get more, bertha has the details today for us from cnbc hq. hi, bertha. >> hi, ross. it is easy to see how jpmorgan's legal bills are more than a billion dollars year to date. the s.e.c. is reportedly pushing jpmorgan to admit wrongdoing for the london whale losses, which would be an unprecedented move. companies have long been allowed to neither admit nor deny wrongdoing in settlements, just pay the fine. reports say a settlement could come as soon as this fall. that settlement reportedly would not include charges of any jpmorgan executives or bruno the trader at the heart of the bank's losses. regulators are scrutinizing whether the london traders falsified records to hide the scope of the losses, which have topped $6 billion from executives in new york. now, the new york times is reporting that the fbi knew prosecutors are probing whether

the trader use in the losses would be more than $2 billion or that $2 billion estimate that jpmorgan initially told investors back in may 2012. when authorities met with ceo jamie dimon this spring, times says he was outraged over some of those e-mails. jpmorgan's troubles don't end there, though. reports say the justice department is stepping up its probe of bear stearns mortgage dealings before the financial crisis. that follows disclosures this week by jpmorgan it faces criminal and civil probes into its own sales of mortgage-backed securities. jpmorgan bought bear after it collapsed in march of 2008. jpmorgan this morning bouncing back up right now about .8% in trade in germany. ross? >> thanks, bertha. good to see you. have a great day and a good weekend, when it starts for you. jcpenney's board members disagree over who should head the troubled retailer. the latest after this.

jcpenney's chairman is saying he led significant actions to correct the areas of previous management. the public vote of confidence comes as the board says it is extremely disappointed with bill ackman.

he wrote a letter thursday reported on cnbc calling for jcpenney to speed up the search to replace ullman. ackman happens to be a jcpenney director. the stock up nearly 5% today. s.e.c. prosecutors asked a federal judge to approve a deal allowing the hedge fund to maintain business operations restricted ability to move assets. on thursday, ministry law judge put a hold on the s.e.c.'s case against sac founder steven cohen. the s.e.c. accuses cohen of failing to properly supervise his employees. blackberry is more open to the idea of going private. reuters says the ceo thorsten heins and the board are coming around to the ability of more breathing room to fix problems. nothing is imminent. blackberry hasn't started any sales process. the reports say the company

could ultimately find it hard to come up with the buyer and the money to go private. blackberry shares down more than 22% this year. u.s. international trade commission set to decide whether to ban some samsung phones from entering the american market. the latest battle follows a decision by president obama to overturn a trade ban on older apple products entering the u.s. each firm is accusing each other of stealing key designs and technology. kpn moved higher in early trading after america movil plans to make a buy just for the dutch carrier. the mexican telecom giant owned by carlos slim has a stake of under 30% of kpn and hopes to increase its holding of 2.4 euros a share. and your headlines, slew of data suggests early slowdown in china may be coming to an end. carlos slim slaps down a $9.5 billion bid to buy out dutch

telecom company kpn. and jpmorgan close to settling with the s.e.c. over the london whale losses, part of the price may be having to admit guilt. and also, still dom, dallas fed president richard fisher added to a chorus of voices warning on the likely side of tapering. have they accepted the fed's message? we'll get the latest from the cme when we come back. [ 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? ♪

dallas fed president richard fisher says the central bank has begun to socialize the idea that quantitative easing will eventually wind down. he predicts people will accept the fact there is no such thing as qe in infinity. in an exclusive interview on cnbc, he echoed what fellow

policymakers said. >> we're all singing from the same song book, so it is the same message, maria, which is if things go as the committee expected, then i would expect us to dial back, we'll have to see what the data and the feeling is between now and the time we next meet in september. >> asked what companies are saying about the economy, fisher says he never hears complaints about monetary policy. businesses are more worried about taxes, government spending and too much regulation. the same time, bill gross says the sell-off in the bond market isn't that big a deal and in a note on thursday he said the total return fund would triumph in the bond wars, but could see investors earn lower profits but pulled back from that statement later on our channel saying the downturn is just a minor skirmish. >> it is not like the cuban missile crisis or a nuclear war, it is more like grenada in terms of what we have gone through. the average bond fund is down 2%

this year. pimco a little less. we're doing better than the market. >> the average bond fund is down around 2% this year and says if the dow saw a similar decline, investors wouldn't be pulling out of stocks the way they have been fleeing bond. interest to talk it up a little bit. as far as bond yields are concerned, treasury yields higher. a little bit of news out concerning the italian prime minister, government, he says the government will unveil a privatization plan in the autumn, current spread levels a sign of confidence in the country. italian yields trading, and all political parties should reflect on the need for stability. italy so far, as far as investors are concerned, not been unduly worried by the lack of growth, eight consecutive quarters now negative growth for the italian country. european equities ahead of the u.s., a little mixed, ftse

100 outperforming. that's on the fact that we had that china data, which we'll talk about in just a second. but it boosted basic resource stocks. what we got in china is a strong showing from factories in july, helping to push chinese growth towards the back of the burner. industrial output up close to 10% on the year, which beat expectations. july retail sales and fixed asset investment came out there, roughly in line with investments. on the inflation side, we had steady cpi, a slight easing of deflation on the factory gate, all being taken as signs of stability as well. on the oil market, global demand for oil from opec countries is expected to climb this year, according to the international energy agency. increased its demand forecast for opec oil to 29.8 million barrels a day, a rise of 200,000 barrels. the iea warns of disruptions in iraq and libya may reduce the output in the coming months. they also said america's shale boom is protecting the world from steep oil prices.

nymex today, a tick higher from where it has been in previous session, 104.30. as for the agenda today, state side, june wholesale trade out at 10:00 a.m. eastern. inventories are forecast to rise half a percent. and there is just a pair of notable earnings today, auto parts maker magna international and nrg energy. quick reminder of where futures are trading right now. we are caught slightly lower after the dow up .2%. right now the dow is 36 points below fair value. nasdaq, 40 points below fair value. and the s&p 500, four points below fair value. so after a big week what are investors to do? now in the dog days of august. here is the recap of what some of the experts have already toll us on cnbc today. >> treasuries are triple a rated product, same for the back end of the gilt curve, the german

curve and that's a safe way to get that return over a long time period. >> -- are reasonably attractive, though i think you have to choose carefully, probably more the domestically focused companies. whether china has the chalkiness you mentioned, it probably does. it had a nice bounce over the last week, maybe today isn't exactly the right day to be going in, but i think over the next two or three months, i would be one to build up my china exposure. >> two areas, one is defensive, seeing such as consumer staples, food and beverage, but then the other area is with a very good visibility of secular growth. for example, some of the green energy areas, the gas area, the wind power area. >> right. that's some of the people.

let's get a man from. cme to tell us. a bounceback yesterday from the s&p, up .4%. we snap this three-day losing skid. what do you make of the fisher comments? how does that play in? >> good morning, ross. you know, i think the fisher comments are just naturally, you know, going forward, saying that they're thinking of tapering. i don't know they really can taper. i think they have got a bigger problem. we have no growth. so if you talk -- if you want to talk about the growth issue, we're really not showing any real growth. we're showing growth in the stock market. companies are not showing growth. every company missed on the top line and revenue side. he can talk about tapering all he wants, right now, we're not showing much growth in this country. and all we're showing is an artificial stock market rally. i don't see where he's going to come from -- or where they'll be able to taper here right now. >> how artificial is it? you don't think earnings just --

>> if you -- well, look at the earnings. almost 85% of the companies missed in the top line. they're not getting the revenue growth as we're trying to see. we're not getting real true growth in this country. what we're getting is a market that has been fueled by the banks and the ability of the banks to give back to the government at 3%. so we're really not getting a true growth on this market right now. >> but, where did you get your figure from? on the s&p, about 53% on the top line. are you doing it on a wider market? >> maybe i'm just -- i'm using -- i don't have the exact number, but from what i've seen, most companies have missed on the top line. most companies have missed on the revenue, and that's been an issue and i don't see the real big growth in this -- in the country right now. that's, i think, more of an issue and i think the fed is more backed into a corner than they're letting on, which is why we're not seeing a market sell-off based on the possible

tapering in september because i don't think they'll be able to taper so quickly. >> if they don't taper in september, we just lengthen this -- what you call false market. >> exactly right. that's what i think we're seeing, we're seeing a market that is built on artificial dollars that the average joe, the average american has not been able to participate in. there has been no liquidity. you talk about -- want to look at homes. the average american has not been able to get a mortgage, normal mortgage able to then borrow money. the small business has not been able to get a line of credit. the only funds available are for the very wealthy and the very rich. not for the average american. >> all right. how do you translate that into a trading strategy, todd? >> well, i think trading right now is going to remain lethargic. we're in the doldrums of summer, in the dog days. not going to be a lot going on. we're stuck in a range between 1680 and 1700 on the s&p. i don't see any major movement one way or the other. i think what we'll see is after

the -- after the summer's over, i think we'll get some real trading and i would be looking for a correction as we have to start making some adjustments in the overall program. i think we're probably a lot near the top and looking for a lot bigger correction here now. >> well, mark farber came out with comments and said this, to him, he's saying mark farber is saying this feels like 1987, you know, stocks are overweight. they're peaking. do you -- i mean, that's an interesting comment. sounds like you might lean to that sentiment. >> well, i would agree with that 100%. i mean, if you go back and look at the overall market, you look back at 1987, we had a very similar cheap money, and very euphoric market going into the summer. and then we came into obviously october. we had the same problem through the internet bubble. and we had the same problem in 2007. cheap money, artificial moves based on cheap money, never end well, and i don't think this one

will end well either. i think that will be eventually the downfall and the problem in this market. and that's why we're going to get some sort of correction here and some sort of reasonable sell-off of at least 10 or 12%. >> the vix is still pretty low. it is pretty cheap to buy some downside protection right now. i presume that's what you're doing. >> well, you know, i'm really not buying cheapdown side protection. one thing you have to understand is options are never cheap. options are always fairly priced unless they're expensive. if you're buying cheap protection in the low volatility environment all the time, all you've been doing is giving up the premium. you're seeing a big area of complacency in the market, which should be another warning sign to everybody that the markets are way too complacent and we know that they shouldn't ever go down again, which is really telling you there is probably a bigger problem underneath because we're far too complacent in the country now. >> good to see you. have a good day. todd horvitz. that's it for today's program.

"squawk box" up next for the open of the markets. whatever happens, we hope you have a profitable day. [ 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 perfection.

good friday morning. among the top stories we're following, stocks, they're headed for a weekly loss. something the bulls haven't seen in quite a long time. also, corporate news, jpmorgan reportedly close to reaching a settlement with securities regulators over the so-called london whale. and jcpenney and activist investor bill ackman getting into a very public fight. we're going to talk about it. it is friday, august 9th, 2013. "squawk box" begins right now. ♪ saturday forever seven-day weekend ♪ ♪ kick it up like spring break weekend ♪ good morning, everybody.

and welcome to "squawk box" here on cnbc. i'm becky quick with andrew ross sorkin and brian sullivan sitting in for vacationing joe kernen. you're already on vacation. i see you. you're on your way out the door too. >> i got jeans on, 11:00 -- >> you got on jeans? >> yes, i got to fly. >> at least you're wearing pants. remember we it a discussion a couple of months ago where you made a great joke about pants. >> it is optional. i'm going to the airport. i figured tsa will take them off anyway, so i figured i might as well beat them to the punch. >> the dow is on track to turn in its first weekly drop in nearly two months. take a look at the u.s. equity futures this morning, not going to get much help there. dow futures down by 42 points below fair value. s&p futures off by 5 1/2 points. we only have one economic report on the agenda today. and that is wholesale trade inventories for june. overseas, stocks in china trading a little higher on today's session after economic numbers there painted an upbeat pi