"worldwide exchange." i'm carolin roth. and these are your headlines from around the world. stocks look set to end the week lower after wall street suffers the biggest two-day drop in two months. the shanghai composite also closes in the red as questions remain about its roller coaster session. india's rupee felt the raff of fed tapering fears following a new record low. shares buck the trend on the back of better than expected second quarter earnings as the group raises guidance and sounds

cautiously optimistic on higher freight rates. brent hovers near $110 aed my amid fears over tensions in egypt after they call for prayers today. good morning, everyone. you're watching a brand-new edition of "worldwide exchange" on this final trading day of the week. we are pretty flat one hour into the trading day after those big declines in yesterday's session. not just on the european markets and also in terms of the u.s. and asian session. we have upbeat earnings reports from the likes of moeller maersk. look at the shares right in the bottom left-hand corner, you see moeller maersk, the biggest gainer, up by 5.5%. this is after the company beat

expectations with its second quarter numbers and also lifted its guidance for the shipping unit. we'll be talking much more about moeller maersk later on in the session. i want to show you what's going on in the european markets in more detail. the ftse 100 still seeing a little underperformance, but not flat versus the big declines over the two past trading days. it seems as though positive data in the uk is now back for the markets. we'll talk about the relationship in the show as well. the xetra dax is off by .3%. and are seeing similar percentage declines for the ftse mib, the ibex 35 pretty much flat. in the bond markets, we saw the big sell-off throughout this week with yields spiking for the treasuries, for the gilts and the bunds. yesterday, treasury yields reached 2.8% on the back of better than expected economic data. remember, jobless claims falling to a six-year low. but we have seen yields coming down just a touch back below the

2.8 level but at two-year highs. ten-year gilt yields at a two-year high, 2.67% is where we're standing now. the market doesn't believe mark carney's forward guidance, and we also got the better than expected data points out of the uk recently. in the forex markets, we have been seeing a little dollar weakness and that continues to persist in today's trading session. the dollar has been very volatile in yesterday's trading session on the back of the conflicting economic data which we'll talk about in more detail. the aussie dollar above that 90 level and the sterling dollar has seen that big jump in yesterday's trading session yet again, but today it is pretty much flat against the dollar, 1.5630. i want to draw your attention to a couple of other forex pairs making big moves. the yuan hit another record high against the dollar. this is on dollar weakness. but also on signs that the chinese economy is slowly but surely stabilizing the indian rupee hitting another record low against the dollar.

this is, of course, on fed tapering fears and central bank's actions to stem the decline in the rupee are not really helping right now. today, the indian rupee is down by .5% against the dollar and the new zealand dollar is higher now, was under pressure before on the back of the earthquake that we saw in the capital of new zealand. let's check in on asian markets with li sixuan. good afternoon to you. >> good morning to you, carolin. following wall street's sell-off overnight, asian markets extended yesterday's losses in the very dramatic way. shanghai composite today, it was surging by as much as 5% before ending down by .6%. we were also watching the 50 index which tracks the top 50 stocks on the shanghai composite. some surged up by 10%, just past

11:00 this morning. this includes index giants like petro china and china unicom. according to china's 21st century business herald, it was a fat finger trade by everbright securities investment department. shares of everbright securities were suspended in the afternoon session. china markets gave back all of the early gains in the afternoon session. but guess who became the big winners of that flash surge? it security stocks got a strong boost on market rumors of the technical glitches. surging over 7% in today's trade. the rest of asia had a volatile day of trade due to the drama on the shanghai composite. japanese financials extended their weakness from yesterday after more strong u.s. data added to the speculation of the fed's tapering moves. back to you.

>> sixuan, thank you for that. a quick check of the dow jones. yesterday's trading session, pretty big declines, off by 1.5%. the nasdaq losing almost 1.7%. and the s&p 500 off by 1.5%. we saw pretty low volumes again, given we are still in the summer lull. but the dow is now on track for the worst week since the beginning of the year. consumer prices rises for a third straight month. weekly jobless claims below since october 2007. the industrial output number that wasn't too inspiring. let's talk about what is going on in the markets. lota, let me kick things off with you. what happened in the markets yesterday? is it fed tapering fears or lower yields choking off the rally in stocks or low volumes? >> it is a bit -- a combination

of a few things. one of the elements that hasn't been mentioned very much is egypt. and that event there, the military really driving that country close to the brink of civil war, really, is increasing the uncertainty levels that we have around the globe and that's never good for equities. i think we also ned to mention that which has further stoked that sell-off. >> pk, out to you. what do you think is the biggest driver for the sell-off we have been seeing in the markets of late? >> obviously egypt is a bit of a factor with oil prices spiking as a consequence. but i think really the issue of higher inflation rate in the u.s. with the core cpi inflation 1.7% basically reinforcing what bernanke said in may and june, which is that in his view, the weakness in the core cpi

inflation rate was transtory and he has proven to be right. we have seen a modest spike up in inflation which removes the last excuse for fed tapering not to begin in september. now it is almost a certainty that tapering will begin, at least be announced at the next fomc meeting. i think that's the real factor driving markets at the moment. the most important factor, globally. >> would you agree that inflation is increasingly becoming a concern? because just two days ago we heard james bullard warning about the deflationary effects in the u.s. economy. >> let's face it, the investors worldwide are very much watching the fed now and any one of those parameters that the fed has mentioned. if inflation is going up a little bit, then there is less of a possibility or potential -- more of a potential that they will actually start the tapering. so there is tapering anxiety around very much again, but that

doesn't necessarily in the longer term need to really hurt equities. it will hurt bonds, but in our investment strategy we still much rather hold equities than bonds. >> how would you position yourself, going into september, huge event for us obviously with the fed, with the jobs data, with potentially the start of tapering, how do you want to hedge yourself? are you buying puts or want to stay in cash? >> well, we have increased our cash positions, but not because we are shy of equities. it is more because we don't like bonds and we still need to keep risk levels at roughly the same level. we are warning our investors that there is a bit of a dhopy time ahead. we can't help that, but we very much believe that if the fed is right, and the macro economic recovery is continuing, then equities will see this through and after the initial folds will rally into the end of the year. >> pk, what is your best hedging

strategy against another vat of volatility? >> well, i think volatility will continue, but i think the important point to remember about when at is happening in t markets at the moment is we're seeing evidence of a strangling u.s. economy, a continuing recovery in japan that has had a few ups and downs, but is continuing. and the end of the recession in europe. so the developed markets are in reasonably good shape, and i think equities consequently will do quite well over the next six to nine months globally. and i think within asia there are some markets that will do reasonably well as well, in particular in southeast asia it they didn't throw the kitchen sink at the problem during the global financial crisis and you have a number of markets that are in reasonably good shape. the philippines, malaysia, singapore. and i think, you know, beginning

now to see some value emerging in places like indonesia and india, which have had a fairly torrid time but there is, i think, subvalue emerging there, especially with the big sell-off in the currencies. >> okay. pk, thank you very much for now. lota, thank you for initial thoughts as well. you're both staying with us for another chat. if you have any questions to either of the two gentlemen or comments on the program or what's going on in the markets, send in your e-mails and comments to worldwide@cnbc.com. let's get back to one of our top stories, egypt's muslim brotherhood called for a nationwide march of millions following afternoon prayers today as the clashes between pro morsi supporters and security forces show no signs of abating. several foreign companies have shut offices across the country in response to the ongoing violence. y

yousuf gamal el-din is live with the latest. it seems like they're still defying the curfew out there. >> they are defying it. they're calling it the friday of anger, but you need to keep in mind the curfew is now over. it has been over since 6:00 a.m. local time and what is interesting to point out is just in the last few minutes we have had some activity from the military. four tanks have positioned themselves right below us here to cut off access roads to the bridge in the background, one of the key arteries of the city, and state tv, which is right beside our vantage point. taking the precautions because they are arguably expecting large numbers to come out today. they are also authorizing the egyptian ministry of interior to use deadly force to protect state institutions. remember, we had a fire that basically took out the office of the minister of finance and shows you the amount of trepidation in the air. when it comes to the death toll, carolin, and you mentioned the number 600, and the figure that is being thrown around now by

various governmental sources is 638, though we also have other sources who are denying that number. in any case, it is difficult to ascertain the exact figure. the muslim brotherhood claims the figure is much higher than that. and, again, they're going to be out in numbers. we had attacks not just in cairo, but also across the country with churches that have been set ablaze and attack on a military checkpoint in the sinai. the operation of the suez canal, notably remains unaffected and so does the operation of the various ports as well. the international response you saw including the statement by u.s. presidents barack obama, a clear sign and clear message to the egyptian military, and effective punitive response, you could argue, to basically rein in the violence and get the country back on track. a lot of observers will call for further measures and there will be a lot of discussions in the united states and elsewhere about why he didn't go the extra

mile of cutting off financial assistance to the tune of $1.3 billion. that's a key discussion point and also we'll just have to wait and see how this day evolves. it is a key day. the muslim brotherhood will fight this to the very end and the death toll may rise further. carolin? >> yousuf, thank you for that update. make sure you do stay safe. the violence in egypt is playing a part in the moves that we're seeing in the commodity markets. brent had a four-month high yesterday, and the concerns of supply disruptions through the suez canal. the price of precious metals also rallied as investors were seeking safe havens. silver jumped more than 5.5% to a three-month high. gold hit a two-month high. this morning, though, brent crude just a tap lower, sitting at 139.53 and crude oil at 107.32. pretty much flat on the day. lota and pk are still with us.

pk, let me get out to you. what is moving the oil price? is it really the unrest in egypt or is it really just tapering fears? >> it is primarily the unrest in egypt, the uncertainty generated by that. the fact that you could have the suez canal affected. i think those are the sorts of factors i think driving that. there is, of course in the background also the strengthening of the global economy, particularly the u.s. and japan. that is probably playing a small part, but really the spike in recent days is primarily on account of egypt, and i think it is consequently temporary. we will see -- we will see brent come back below 100. i'd say within the next two or three months. >> pk, i don't think everyone would agree with that. i think, you know, some people in the market are saying, let's say 5% or 10% to what we're

seeing in the oil price is actually down to egypt. many are saying, yes, it is tapering fears putting a lid on the market on prices. which camp are you in? >> i'm more in pk's camp. i think the suez canal at the moment and this heightening, this increase of uncertainty and geopolitical risk at the moment is very much there driving the oil price in the short-term. i hope very much pk is right, and the oil price will fall again because i am concerned about egypt and what may happen today. i think we'll have quite a choppy day today. >> i just want to get your thoughts on the uk market, putting gold and oil aside for a second. because the uk markets, the equity markets have been behaving very irrationally. almost like the u.s. markets were behaving towards the start of the summer. essentially now, good data is bad for the markets because we're expecting interest rates to rise. why this irrationality all of a sudden? >> it is a bit depressing, isn't

it? it is always because market participants aren't still quite sure or convinced whether they're at the moment on a sugar high from all the quantitative easing or whether it is real. and until that certainty comes through, we will see these ups and downs with the markets and seemingly irrational behavior. but i'm with pk there that over the longer term, actually we're going to go with equities in the right direction. that is up where bonds are really not somewhere where we want to be at the moment. >> how much upside does the ftse still have this year? >> that's the million dollar question. i think there is still some considerable upside in the ftse and i think i'll leave it there. >> we'll leave it there. in number from you. now 5% to 10% number. too bad. i tried at least. thank you so much for that. pk stays with us for one more chat.

business liked merkel. it says more than 60% of executives around the world say that the german chancellor's re-election would make them feel more confident about the outlook for the eurozone economy. they see her as a, quote, safe pair of hands. a german industry official are feeling less optimistic. the company's manufacturing lobby warn had that current export growth is not sustainable, calling for more investment in the german economy. but according to the latest election poll, merkel's conservative party and bavarian sister party have gained in popularity. they would get 41% of the vote, while coalition partner, the liberal fdp party has not moved with 5%. the opposing party has lost two points, only taking 25%. while the greens have lost 1 point, looking at a 13% result if the ballot would take place

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welcome back to the show. moeller maersk unloaded a better than expected profit for the second quarter. we'll review the shipping company numbers in detail at 10:50 cet. more than 20 million people in the world are set to be victims of forced labor or sexual exploitation. at 10:50, we hear from anthony steam, the chairman of the human trafficking foundation. at 11:00 cet, third quarter outlooks. the third quarter will mark the beginning of the end for easy money. is ice cream being left out in the cold by growing sales of

frozen yogurt? we hear from both sides and the dessert debate. heavy selling in local stocks have pulled the indian rupee lower. the market action seen related to fresh concerns that central banks are starting to slow the supply of cheap money. the rupee's fall to a new record low against the dollar happened despite ongoing efforts by the indian government to prop the currency up. pk is still with us. the rbi has initiated a lot of measures to stem the decline in the rupee. so far they haven't worked because this morning the rupee fell to another record low against the dollar. what else could it possibly do because it seems to me it just can't stem the decline, which is mainly a result of tapering. >> yes. it is primarily the result of tapering fears. and the fact that the rbi has

taken a number of short-term -- to deal with the weakness of the rupee, but the structural underlying problem is the twin deficits that india faces, and there hasn't been enough action, i think, to deal with those. i do think, though, that we're getting close to the point where the rupee will begin to look decent value, not just the rupee, but also in the equities. and part of the reason for that is that two or three months ago there were two factors that were potentially negative in india. one was the potential for a fiscal deterioration because of the food security bill. that unfortunately has come to pass. india has come forward with the food security bill. but the other fear was that india would issue a lot of banking licenses to industrial houses. i think that is a fear that is now receding, particularly with

the appointment of rajman as the next rbi chief. he takes office next month and he's likely to be very independent and he will make a rational decision on those banking licenses. so that's one factor that is, i think, a medium term positive. the second, i think, is really the fact that india is go to be a beneficiary of -- of a global recovery, especially in the u.s. all signs point to a strangling of the u.s. recovery. india has more than half of its software exports heading to the u.s. and with the rupee having depreciated, i think the export sector is going to lead the recovery in india. i don't think it is going to happen immediately. but over the course of the next three months, india will look like a positive bet. and i think we're getting close to the bottom here. and i would be looking to -- to, you know, to find some value

opportunities, especially in the export oriented sectors in india. >> you got to wonder whether that's premature at this point. it is not just the twin deficits posing a big problem to india. it is also the lack of reforms, the government and the messy politics. this is not something that is going to be solved over the next two or three months. >> not necessarily. but there is a chance it could get solved quite quickly as well. the government has a rather precarious position in parliament, and if the government were to be brought down, i think that might actually serve to be a significant positive because across india there are a number of state governments that are very reformist, progrowth and have continued to keep the indian economy afloat at a time when the central government has been asleep at the wheel over the last three or four years. so if a new election were to come through, you know, you get

a final sell-off, but the outcome of any election will almost certainly be positive for india because any new government is likely to be much more reform oriented and oriented towards growth. >> okay. pk, thank you so much for that. pk, chief strategic at real economics.com. an effort to prop up the rupee may not be the only eye watering problem for india, a sharp rise in the cost of the onion. the onion is sending shivers through the indian government. many indians use onions in almost every meal and swings in prices of the vegetable are credited with toppling two indian governments since 1980. logon to cnbc.com to peel away more layers on that story. no pun intended, of course. meanwhile, an animal described as an african lion was exposed as a fraud when the creature started barking in front of visitors. look at that picture. it actually does look like a

dog, not a lion. calling the lion cage home was a tahitian mastiff dog owned by a worker. no official explanation for the switch, but one zookeeper said the lion had been sent away for breeding. the story comes on a volatile day for chinese markets. it roared like a lion earlier on in the day but ended the session back in the doghouse with a modest drop. what animal do you think best describes china's market, lion, bull, bear? what can you come up with? join the conversation here on "worldwide exchange." get in touch with us by e-mail at worldwide@cnbc.com. via twitter, @cnbcwex. or direct to me @carolincnbc. still to come on the show, a better than expected profit for danish shipping giant moeller maersk sent shares higher but could murky waters still lie ahead?

stocks look set to end the week lower after wall street suffers the biggest two-day drop in two months. the shanghai composite also closes in the red as the chinese regulator continues to probe the

markets' roller coaster session. india's rupee feels the rath of fed tapering fears, falling to a new record low, despite the central bank's moves to support it. moeller maersk shares buck the trend on the back of better than expected serd quarter earnings as the group worries its guidance and sounds cautiously optimistic on higher freight rates. brent hovers near $110 a barrel amid fears over tensions in egypt as the muslim brotherhood calls for a march of anger after the midday prayers today. we just got second quarter gdp data out of hong kong. let me bring that to you very quickly. second quarter gdp for hong kong up 3.3% year on year. quarter on quarter, we saw growth of 0.8%. hong kong also revises its full year gdp forecast for 2013 to 2.5%, to 3.5% from the previous

1.5 to 3.5%. so positive news coming from hong kong there. meanwhile, let's take a check of european markets on this final trading day of the week. yesterday, we did see big decli declines. this morning, a little stabilization. the ftse 100, the xetra dax, the cac 40 only modestly lower, though. they have taken a leg lower over the last half hour or so because we saw a good open, but trending a bit lower. off by .1%. we saw the big spike in yields for the government bonds, for the bund, the treasuries and gilts earlier on this year, this week, rather. ten-year treasuries at 2.77%, back below that 2.8 level at a two-year high. ten-year gilts also out at a two-year high on better growth prospects and the market not believing forward guidance, 2.67% is the level for the ten-year yield there. forex markets looking like this.

the main currency, the euro dollar back above the 133 level, but slightly lower on the day, 133. as the political turmoil continues in egypt, toyota and suzuki have halted production in the country. sachiko kishida has the latest for us from tokyo. >> toyota halt theed operations its factory. the carmaker had 400 made at the plant last year and will decide whether to resume operations. suzuki stopped local production right after a state of emergency was declared. but the company said there has been no damage to the factory. sumitomo electric industries which makes wire harness in egypt, evacuated japanese workers out of the country. many japanese companies see egypt as the key market to enter into african region.

around 60 japanese firms are placing their headquarters for the region in egypt, and direct investment in the country from japan went up 90% in 2011. many exporter shares including these companies dropped in the tokyo market today. toyota down just a fraction, suzuki fell 1.6%, and sumitomo electric dropped 1.4%. carolin, back to you. >> thank you so much for that. we just got an e-mail in from our correspondent yousuf in cairo. he writes that there are tank movements, the army sealing off the square and this follows the decision to close all access roads to tahrir square and surrounding areas in anticipation of protests. wire fences are also being set up. we will get back out to cairo very quickly to get an update on the story from yousuf himself. tensions in libya are weighing on the price of brent. the government has threatened to use force to end a strike which

has crippled the country's main ports. oil exports have dropped to their lowest level since the 2011 civil war. the government says the country has lost out on $1.6 billion of oil sales since the outbreak of protests at the end of july. a car bomb has left 20 people dead and scores injured in beirut. the explosions happened in a suburb which is regarded as a stronghold for militant group hezbollah. a earthquake has shaken cities across central new zealand. the quick with the a magnitude of 6.5 struck close to the island town. tremors were felt across the country, sending workers rushing from buildings. so far no major damage has been reported. and we saw the new zealand dollar pretty resilient on the news as well. bhp billiton says it could face disciplinary action for alleged core practices.

the australian based miner has been underwatch for the past four years. their sponsor of the beijing olympics and an exploration project in cambodia has come under scrutiny. the company says it is fully cooperating with authorities. and shares slipped more than 1% in the australian trading session. chinese skin care company magic holdings may get an ownership makeover. the world's largest cosmetics group is offering to buy the firm for $840 million. shares in the company surged as much as 21% today in trade, but that's below the 25% premium that l'oreal had put on the stock. and still to come in the show, on the final day of our coverage of organized crime, we'll take a closer look at human trafficking. we ask the chairman of the human trafficking foundation if the financial crisis has exacerbated the problem. that's coming up next.

shares of anz bank slipped by 3%. third quarter profit rose 12%, meeting expectations, but anz says its net interest margin dropped by two basis points with further drops still ahead.

nonetheless, ceo mike smith said he was optimistic about australia's economy and felt chinese slowdown worries have been, quote, overdone. this is something that we have been hearing from a lot of strategists lately. dell's profit plummeted in the second quarter. the pcmaker's net income fell 72% to $204 million from $732 million a year earlier. this on the heels of a heated takeover battle between founding ceo michael dell and activist investor carl icahn. however, the company's earnings per share beat analysts estimates by a penny. here today, dell shares are up about 35% in frankfurt this morning. shares are up by 7.4%. moeller maersk shares trading sharply higher after the danish shipping giant posted better than expected second quarter profits. but they did warn that the outlook for freight operations remains challenging. speaking to cnbc earlier in a first interview, neils anderson

was cautiously optimistic that freight rates were bottoming out. >> we had a very tough second quarter and when you look at the average results for the industry, we have seen so far, i have to say, for first quarter and the first half, they -- the industry on average is not making any money. so i think the rates, low rates simply hurt the industry too much. and we'll have to see them at least stabilizing where they are now, after the increases for july and august. so i think -- i'm hopeful they bottomed out. i have to say we have to be prepared that they can become volatile also in the future and our business model i believe is geared for that. but we believe that we will see more stability going forward. >> that was nils andersen from moeller maersk. we'll be stalking to an analyst about this -- the set of numbers

later on in the show. first, let's revisit our theme week. unlike the sophisticated modern day crimes we have looked at earlier this week, such as cyber or counterfeiting, some sectors of the black market economy remain firmly stuck in the past. 200 years after the abolition of slavery, human trafficking is a growing global problem worth more than $30 billion to criminal groups every year. tom mckenzie joins us and you've been doing some research on this. it is very frightening. >> out of all of the organized crime we looked that the week, this is quite possibly the most distressing. the exploitation of women, children and men. and the u.s. state department puts the number of people who are afraid to buy human trafficking, modern day slaves, at 27 million. that's almost all of the people taken out of africa during the international slave trade. and we're talking about more than the population of australia as well. so it is absolutely huge. now, the majority of the people who are trafficked are women and

children. and out of those, 60% are sexually exploited. and cold, hard numbers, slaves today according to a charity called free the slaves cost $90. in 1850, they cost $40,000. so the cost of human beings is -- modern day slaves has gone down. to get an idea of the extent of this problem, particularly in europe, i spoke to anthony steen, former conservative mp and chairman of the human trafficking foundation. and i asked him whether there was evidence the global economic crisis had exacerbated the trade, enforce d labor. >> there are some indicators, first of all, the european commission in 2007 estimated that 100,000 people were trafficked each year within the european union. they revised that figure last year to 150,000.

so that's a 50% increase. secondly, the numbers of victims being found in britain increases every month since the economic crisis. now, of course, some people say that's because our detection rate is improving and people are coming forward. others are saying it is because the numbers are increasing. so whichever it is, there is evidence that the number of victims increases. when i say victims, we're not just talking about sex trafficking. we're not talking about child trafficking. we're not talking about a domestic abuse of immigrants coming to britain. we're not talking about men trafficking. we're talking about the whole concept of modern day slavery. >> where are most of these victims coming from when they arrive in the uk? >> 95 countries in the last 18 months have been detected, have been detected. the top six or seven, well, they're mostly from the eu.

80% of women in sex trafficking in the last 18 months were found from eu countries. romania is a big one, of course. slovakia for men. bulgaria is much less than people think. a small country, but much less. there are quite a number of children from bulgaria. poland has a large number of men trafficking. lithuania, a lot of sex trafficking. the demand is coming from the west countries. germany, france, italy, spain, portugal, britain, holland, denmark a bit, and the eastern european countries are the ones that are providing the victims.

>> are there particular sectors that are in a way benefiting from this trade in people? >> well, the sex industry clearly, that's very big business. and i think you may know the metropolitan police indicated that on their own assessment, there were 2,200 brothels found in london alone last year. that's just london. and in which five or six girls are in each. that's a pretty large number. the met actually identified 9,600 women in london alone who may have been trafficked. that's just women. then there is children. mostly coming from china, some of them from vietnam, children involved in cannabis production, domestics looking after families, and men, 40% of all trafficked people now identified

in britain were men. 40%. from most 80% coming from the eu countries. and of those men, about 86% didn't speak a word of english. so they were duped. >> what are the conviction rates like for people carrying out human trafficking? >> the police have got many other duties, and the other police forces other than london see this as low priority. and politically i mentioned it is low priority, because there is no votes in it. victims don't vote. and traffickers don't vote. and the result is we have a society which doesn't believe that it exists, because it is all underground. >> and anthony steen, chairman of the human trafbing foundation talking to me. and part of the problem is how the authorities are coming together to tackle this. in june, the u.s. state department report -- issued a report criticizing china and

russia as among the world's waft defenders when it comes to human trafb i trafficking, possibly leading to sanctions from the u.s. when it comes to convictions, the u.s. state department says globally 5,000 convictions for human trafficking in 2012. in the uk, in 2011, there were just eight convictions for human trafficking in the entire year. so clearly the authorities have a big job to do. human trafbing was just part of an entire week of organized crime we have been looking at. and part of that has been we looked at drugs, looked at cybercrime, we looked at four key areas in fact where criminals are making the most money and here's a look back at some of that. >> cannabis by far still the largest drug used in europe, 23 million europeans using cannabis

in 2011. >> the drug trade is becoming more global. bra sti >> the global crash is kind of remove the mask of a big institution haven't been very close to the drugs market over the past few years. >> we're in the midst of a massive sea change in drug policy worldwide. the economy needs the infusion of cash and the politicians and the people are aware of it and big money is going to come in. >> still kind of a misperception out there that the people carrying out the attacks are these disgruntled teenagers but it is sophisticated organized criminals with cheap tools. >> now everybody can be a hacker. you don't need to be tech savvy, have a special education. >> the previous view of the computer hacker was a technical genius. and today all you need is maybe $3 access to an online auction and then you can go out and buy half a million e-mail addresses or bring down a website.

>> about $1.6 trillion every single year laundered through the global financial system, equivalent to 2.7% of global gdp. >> white collar crimes are really the big accounting fraud. in the emerging economies, it is connected to corruption in a way that it isn't so much in the west. >> counterfeiting is worth about 600 billion u.s. dollars every single year according to the international trade of commerce. >> china has long been the land of the fakes, famous for everything from bogus luxury handbags and watches to gadgets. but recent health scares involving food and iphone knockoffs are making consumers here think twice. >> it is enormous. it is equivalent to the total exports the united states economy to asia. >> now the most difficult countries have their own problems with illicit and fake

medicines. >> tom, thank you so much for the fantastic coverage this week of this underreported industry. thank you for that. have a great weekend. let's show you what's going on in terms of european markets. we're slightly softer across the board. stoxx europe 600 is off by -- we got extremely good earnings reports from the likes of moeller maersk this morning, the danish shipping company and it is topping the stoxx europe 600. you see it right there. share are up by more than 7%. joining us to discuss the results is robert joinson, head of european transport. thank you for taking the time to speak to us this morning. how surprised were you by the numbers? the market didn't factor in this upgrade in guidance and the better than expected numbers. >> yeah, we were surprised along with the market.

it was driven by container shipping business. the profit there was above $400 million where as consensus was factoring in more of a break even result. so it was a big beat and really driven by greater than expected cost savings. even as recently as coming through in the last three months or so. so definitely a big beat. >> when we spoke to the ceo of the company this morning, he told us he didn't really see any major improvement in the underlying business trends in the second quarter. so the better than expected report card this morning, it is really just down to costs, isn't it? but it doesn't say that we're actually heading into less choppy waters, excuse the pun. >> i think that's exactly correct. you know, the beat this morning because very much maersk specific. the global economy or global

trade in general, you know, this is very much an example of the larger container shipping companies starting to forge a competitive advantage versus very small competitors. maersk saw its average margin differential increase to nearly 7% in q-2. that is very much driven by the work that they are doing within the company to reduce costs in that business. >> robert, freight rates have been extremely volatile over the last couple of months. and we asked the ceo this morning whether he thought they had formed a bottom. he wasn't quite sure about it. he's hopeful that there are going to be ticking higher. which camp are you in? do you think we have hit a bottom or do you think we could go lower? >> no, i think probably, you know, the company is being a little cautious on that. we did hit a bottom in terms of asia europe freight rate, the trade where rates swing around most about two mos ago.

they did have a very low level where the companies weren't covering the fuel costs on the trade lane. but we have seen a rebound in last couple of months. and we expect that to continue to a large extent during q-3. >> robert, going into the numbers, you came out with a note and you were pretty skeptical about the oil business, not the shipping business. that, to you, did that also perform better than expected and at what point will higher oil prices, as we have been seeing over the last couple of days, become a bigger concern for the group? >> yeah. the performance of maersk oil was weaker than even we thought during q-2. if you look at the underlying profitability there. obviously the low oil price during the quarter was a factor in that. but was also some company specific issues there in terms of fields which were closed down in denmark. in general, cost inflation in that business coming through as well. so maersk was marginal

disappointment, but maersk and the contakiner shipping busines was the larger dealt why on the day. >> one problem weighing on the industry and the freight rates is the huge supply overhang. do you see any signs of that being reduced? >> not really. the new ships coming on to the market is largely fixed. so, you know, supply should increase by probably 6%, 7% over the next 12 months or so which will be significantly ahead of what we expect global container volume growth to increase, maybe closer to 2%, 3%. so the overhang is still there, and a supply and demand balance very least where we improve going forward and probably actually deteriorate over the next 12 to 18 months. >> but current ships are definitely becoming more efficient, aren't they? >> yeah, that's right. the ships which have been on the market are actually large,

average size, one of those ships being deployed on to the trade route, one of the world's largest trade lanes and they're being designed really for fuel efficiency. you're seeing more fuel efficient ships coming to the market, and older, less fuel efficient ships being rotated out. there is cost benefit there. but at the same time, it is a benefit for the overall supply demand balance in the market. >> robert, thank you for your insights this morning. robert joinson. let's give you a look at what son the agenda in asia. japan releases july trade data as it begins tpp talks with the u.s. and try to boost the numbers. australian earnings include bendgo and adlai bank. china resources power and long power generate fresh results as well. we'll be back in two. it appears it's an agent of good.

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welcome to "worldwide exchange." i'm care lyolin roth. stocks look set to end the week lower after the biggest two-day drop in two months. the shanghai composite closes in the red. moeller maersk shares bucked the trend on the back of better than expected second quarter earnings as the group raises guidance and sounds cautiously optimistic on higher freight rates. dell posts a 72% plunge in second quarter earnings on the back of pressure and margins. this amid the bitter battle

between carl icahn and the pc maker's founder about taking the group private. and brent hovers near $110 a barrel amid fears of tensions in egypt as the muslim brotherhood calls for a march to anger after the midday prayers today. hello and good morning, everyone. if you're just tuning in, thank you so much for joining us on the show. here is how markets are faring on this friday morning. futures for the u.s. indices suggest a little bit of a bounceback after those heavy losses yesterday. u.s. mash ets really taking a drubbing yesterday on fed tapering fears on the back of higher interest rates and, of course, we got disappointing numbers from the likes of cisco and walmart. the nasdaq yesterday off by some 1.7%, the dow losing 1.5%. this was actually the dow on

track for the worst week this year. so we'll see whether it can make up any of those losses in today's trading session. european markets look like this, a mixed picture to be honest. the ftse 100 hovering around the flat line. xetra dax losing .2%, the ftse mib flat as well. same goes for the ibex 35. we did take a leg lower, 30 minutes ago, but we have recovered a little bit since then. so trading in the european markets is a little choppy this morning. forex markets, looking like this, the dollar yen is up by a tenth of 1%, sitting at 97.46 after a very trovolatile week. mixed economic data in yesterday's trading session. volatile trading session for the dollar specifically. but we'll talk more about that in a short while. sterling dollar pretty much unchanged after big moves to the upside for cable earlier this week on the back of better than expected economic data and very

hawkish boe minutes currently changing hands at 156.38. and i do want to draw your attention to some other currency pairs which have been making fairly big moves in the session. yuan against the dollar at a new record high this morning. currently sitting flat at 6.1145. the indian rupee falling to a new low despite efforts by the rba to stem the decline of the rupee. there is only so much that the rbi can actually do. and the new zealand dollar bouncing back a little bit against the u.s. dollar after initial weakness earlier on today after that earthquake down in new zealand. let's check in on markets in asia where we did see a huge vat of volatility for the shanghai markets. li sixuan is in singapore. >> following wall street's sell-off overnight in fears over the fed's tapering, asian markets extended yesterday's losses and as you mentioned,

what a day for the shanghai composite. it was surging as much as 5% before falling back in the red. in fact, 33 out of the top 50 large cap stocks surged up by 10% at one point, including names like petro china, sino peck and unicom. 7 billion worth of shares was traded within two minutes and there were all kinds of rumors on what is behind the spike, like futures explorations, stimulus plans or some preferred shares pilot program. but according to china's 21st century business herald, the flash surge was caused by a fat finger trade from everbright securities, a strategic investment department. shares of everbright securities were suspended in the afternoon session. after the market closed, everbright confirmed about having some technical glitches in its trading system. speaking of which, it security stocks became the beneficiary on rumors of these tech problems.

, surging over 7% in today's trade. let me show you some movers in australia. lender azed down 3% after meeting earnings estimates. the marginens were undur pressure due to challenges from asian operations. billiton lower on fears that u.s. authorities could take enforcement action on the company. issues related to its exploration activities and sponsorship of the beijing olympic games. back to you. >> sixuan, thank you so much for that. back to the u.s. markets which saw heavy selling pressure in yesterday's trading session. dow jones in the last seven days is off by 2.5%. yesterday off by 1. %. and we did see considerable losses for the nasdaq composite and the s&p 500 in yesterday's trading session as well. market participants have been naming a number of reasons for that sell-off yesterday. we saw worse than expected

numbers from walmart and cisco. we saw a rise in rates. and then we saw conflicting economic data, and, of course, tapering fears. steen jacobson joins me now. thank you for coming on the show. why do you think were mash ets down so heavily in yesterday's trading session? are they concerned about the rise in yields? we have seen that happening before. why would they be so shocked by it now? >> i think to some extent we're seeing a bifurcation of the market. i think the market is increasingly realizing that interest rates and everyone who is related to the interest rate cycle is in a -- let's call it a vacuum where nothing really will happen. and then on the other side, you have real companies like cisco, walmart, which is indicating that the world looks far more bleak than the people who were involved in the vacuum space is doing. i like to say that think about this crisis as follows.

80% of the economy, which is the smes, remains without access to credit, remains increasingly facing tax and obama care and everything else. the listed companies, the banks, are heavily supported by the action of the federal reserve. i think the market is starting to question whether this is sustainable long-term. >> so we're seeing that higher interest rates are having a discernible impact on the markets. what about the impact on the real economy. will the real economy, given the relatiative strength we're seei at the moment, will it be able to stomach it a little bit better? >> no, we'll be short and quick answer to that. but the way to explain this is if you look at the growth components and how they act over longer periods, you will say that employment is the main driver. unfortunately i expect unemployment rates to go up, because the participation rate is depressed. more people will seek a job when

they're being told by federal reserve that jobs are more and plentiful. also, don't forget obama care is having a relatively negative impact on the jobless sector. jobless, in my opinion, is flat, to slightly negative going forward. you have to fiscal spending from the government, which is another big component on growth globally. 40% to 50% on average. that is not going to be higher. if anything, every single country in the world needs to get the structural balance down. so the main components of growth, the main components of driving this economy forward both unemployment and on growth, it is still lacking. what is high and what is powerful is the surveys which we have to remember is merely asking a person whether you feel bad or good. and finally, of course, the fact that the 20% of the economy is to list the company. they're getting all the support they need. unfortunately they create, for instance, europe's 0% of all new growth, 100% of all new growth in europe is created by the

smes. >> we want to give our viewers a look at what is on today's agenda in the united states. stay there for a second. at 8:30 eastern time, eyes will be on the release of july's housing starts, where analysts expect an uptick from june. building permits are also expected to rise. analysts see second quarter productivity climbing to 0.7%. the street also forecasting a 1.3% increase in unit labor costs. at 9:55, we will see a key reading on the economy with july's consumer sentiment. according to steen, the third quarter could see the end of the, quote, extend and pretend mentality driving the rally as the easy money cycle draws to a close. what does that mean for the markets? >> it leaves the market very strong and i think the critical event remains the german election. and that coincides pretty much with my top in both economic and the asset valuation price. i think that coincides with

fates coming forward and doing more clearance on the tapering, which i have to say is remarkably misinterpreted by the market. have to remember the fiscal deficit in the u.s. is now at a size which makes it about 100% of the fed tapering. so they need to reduce. i think you'll be slow, will be gradual. what is left is what we just talked about, what is left is that the growth will disappoint. don't forget u.s. growth last year was 2.2%. expected less than 2% this year. china is 1% this point over. and despite the good news in europe this week, we don't see any improvement in europe. so the growth is negative. cisco and walmart has already prewarned us on what is coming in q-3, q-4 and q-1 next year. what i expect is the economy and the market will see a retest of lower interest rates because there is inability to restart the economy from lack of reforms will be my main thesis. >> to me that simply doesn't add up. if we are going to be seeing a

low on interest rates in 2014, but at the same time, the fed starts tapering, you know, it just doesn't add up. >> absolutely it does. you think taper is and the consensus in the marketplace coincides tapering with a signal that federal reserve has changed its policy. nothing is further from the truth. in my opinion, tapering remains a mechanics. mechanics that is to finance the u.s. deficit. as to the u.s. deficit, fiscal deficit coming down dramatically. the amount of tapering needed to sustain and finance the deficit is less so they will taper less. but if you read federal reserve paper from san francisco this week and you listen to bernanke, you put him in the context of history, you will know he wants to do more, not less, whoever becomes the next fed chairman, yellen, summers, they will be doves. so what we get is more qe, not less, because ultimately the only way this game is changing,

unfortunately, is for the experiment to fail and that is not yet the case. >> steen, thank you for bringing to us that very contrarian view. as always, steen jacobson, chief economist. thank you so much for that. egypt's muslim brotherhood called for a nationwide march of millions following afternoon prayers today as the clashes between pro morsi supporter and security forces show no signs of abating. multinationals have been closing offices in the country in response to the violence. yousuf is live in cairo with the very latest. yousuf, about half an hour ago, you sent us this e-mail saying that the army is now sealing off tahrir. what is the latest on that? >> well, i can confirm that is the case. they have blocked off all access roads to tahrir square. that was the epicenter of egyptian political change over the last three years. very symbolic center of the city and they, of course, do not want any activity in that square, especially on a friday, just about an hour away from friday

prayers. the muslim brotherhood calling for the million man march. we have tank activity right below us, using barbed wire fences to cordon the access roads off. the violence, as you mentioned, is still under way in different parts of the country. sporadically, the ministry of interior has been authorized to use deadly force to protect state institutions. that shows you the highest level or the higher level of anxiety that currently exists. also an attack in the suez that killed seven soldiers overnight. we understand that all shipping, though, on the suez canal remains unaffected. also keep in mind when it comes to the death toll, we're getting conflicting accounts. the ministry of health talking to close to 600 at this point. the muslim brotherhood claims the figure is much, much higher. it will remain to be seen the international condemnation and the exchange of diplomatic criticism if you will. the u.s. statement directed rebuke of the egyptian military, it is a punitive measure but concise at that.

did not cancel financial assistance to the egyptian the response from the egyptian presidency has been one saying that the statement from the u.s. is not based on fact, and would encourage armed groups to flourish. that obviously raises the stakes even further. >> yousuf, thank you for that. the headlines this morning, strange spikes in the shanghai composite investigated by the chinese regulator. dell's quarterly profit falls as the battle for control of the company rages on. and a march of anger called by the muslim brotherhood in egypt. markets react by sending the price of oil higher. [ male announcer ] i've seen incredible things.

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welcome back to the show. we have got a pretty exciting and unbelievable story for you at a zoo in china. an animal described as an african lion was exposed as a fraud when the creature started barking in front of visitors. take a look at the picture. looks look a dog, doesn't it? doesn't look like a mountain lion. calling the lion cage home was, in fact, a tibetan mastiff dog owned by a worker. there is no official explanation for the switch, but one zookeeper said the lion had been sent away for breeding. the story comes on a volatile day for chinese markets.

the shanghai composite roord li roared like a lion earlier in the day but ended in the doghouse. what animal do you think best describes china's markets? lion, bull, a bear, or a completely different animal? come up with your suggestions. join the conversation here on "worldwide exchange." get in touch with us by e-mail worldwide@cnbc.com, via twitter, @cnbcwex, or direct to me @carolincnbc. i think it looks like a dog. doesn't it? i don't know who would have ever taken it for a mountain lion. still to come on the show, frozen yogurt looks like the hottest new trend in town. does this mean that ice cream's popularity is melting away. we bring you the scoop on the battle of the frozen treats coming up next. and we'll leave you with a view of the heat map to see how the european markets are trading right now. [ male announcer ] come to the golden opportunity sales event

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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. now been looking forward to this segment all morning long. whether it is gourmet burger bringing home the bacon, or a cupcake putting the icing on profits, cities are always hungry for the latest food trend. frozen yogurt is keeping customers cool this summer, but dishing up hot profits. yogurt shops in new york report

making a 500% markup on each serving. so does that leave ice cream out in the cold? rebecca mcguire and kevin haag join us. good morning to you. rebecca, let me kick things off with you. what is behind that immense success for frozen yogurt? is it because it is healthier or just a cool thing to eat right now? >> yogurt is the innovator and still is the innovator in frozen market in the uk. we first saw it in london in 2007, now 12 stores across the uk and partnership with cinemas. and we're now the leading frozen yogurt brand in the uk. and key to our success is the originality and quality of the product and low fat or low in fat, very low in sugar. we have no artificial ingredients in the product. that's really the key to this success. >> we have got a fantastic board that our producers prepared for us, about the health benefits of

frozen yogurt versus ice cream. the scoop on coal refreshments, one cup of regular vanilla ice cream, 275 calories. one cup of regular vanilla frozen yogurt, 221 calories. the calorie count is definitely lower. it is not substantially lower, though. it only has six grams of fat versus 15 grams of fat. kevin, let me bring you in too. you work for ice cream. is this the success of the frozen yogurt, does that mean huge demise for your industry or can you even capitalize on it? >> what we have seen is a great benefit actually from the whole ice cream market. what happens is people are coming in to ice cream, that before were a little concerned. they're coming in via frozen yogurt. so ben & jerry's, we saw last year 60% of the growth in ben & jerry's came through greek yogurt. it is a great addition to the market, fantastic.

>> i just can't believe that your sales wouldn't have suffered from the success of the frozen yogurt. did you not see this initial decline in ice cream sales? >> no, what we saw was ben & jerry's has been in the market for over six years now. and, in fact, what they have done is brought a range of very pleasurable products. what we do see is the people won't eat frozen yogurt unless it tastes great. in the '80s and '90s, it came and went. but in the recent era, great work done by -- we have a brand in london, snog, a chain of stores, growing very fast. and what it is doing is developing the whole ice cream market, which is growing extremely well at the moment. >> now, when i go out and buy frozen yogurt, i love it. i love the taste of it. also because it is healthy. i also like ice cream. but i find it quite expensive. the premiums, are they justified? how much longer are customers going to be willing to pay these high prices?

>> yogurt is the most affordable frozen yogurt brand of all the players in the market and we're the only people that make a real handmade art sisanartisan, 100%. that's key to our success, and that's why consumers keep coming back to us again and again. they're buying into the fact it is a real yogurt. >> kevin, how much pricing power do you? >> i think with yogurt, there is no doubt people will pay for health. we're also seeing in all markets people are actually upgrading to the best that they can possibly get. for us, the fastest growth has been in the magnum brand. magnum is about indulgence. people pay the extra because they get a little of that chocolate ice cream taste. and just new innovations are very important to people. they're not buying ice cream every day. and when you want an occasional treat, you want to really, really enjoy it. that's so important, whether it is any of the frozen yogurt brands. >> the current frozen yogurt boom isn't the first one.

the first wave came in the 1980s but replaced by ice cream again around 2003. what makes this boom more sustainable than the last one? what do you have to offer to the customer to make sure that he's going to be -- or he or she will be buying frozen yogurt for the next 40, 50 years? >> yogurt success is down to quality, originality and providence. british brand, we're a british success story. people want to buy british. that's our key to our success and key to our success into moving into other markets. we recently expanded into -- we're moving further into europe, into a supermarket chain across the whole of spain and forecasting growth of 10% in volume in terms of the next year. we're going to look to be in a very good position to benefit from that. and in addition to that, we're moving into the ua and five countries. people are really looking to yog to say you are the innovator, you're the people that made the best frozen yogurt available in the market, made in england,

that's what people want to buy. >> rebecca, thank you for that. rebecca mcguire, founder of yog. still to come on the show, dell's profit plummets. we'll see what one wall street analyst makes of the numbers. we'll leave you with a look at how futures are trading on wall street.

welcome to "worldwide exchange." i'm carolin roth. these are your headlines from around the world. stocks look set to end the week lower after wall street suffers the biggest two-day drop in two months. the shanghai composite also closes in the red as the chinese regulators continues to probe the markets roller coaster session today. moeller maersk shares buck the trend on the back of better than expected second quarter earnings as the group raises guidance and sounds cautiously optimistic on higher freight rates. and dell posts a 72% plunge in second quarter earnings on the back of pressure and margins. this amid the bitter battle between carl icahn and the pc

maker's founder about taking the group private. and brent hovers near $110 a barrel amid fears over tensions in egypt as the muslim brotherhood calls for a march of anger after the midday pryers today. good morning, everyone. if you haven't already gotten up go get up, sleepy heads. it is time to start your global trading day. thank you very much for joining us on. on the show, again, on the final trading day of the week, looking at u.s. futures taking fair value into account, the implied open signaling a bit of a bounceback from yesterday's heavy losses. remember, the dow closing at a session low. it was off by 1.5%. we saw a big loss also for the nasdaq and the s&p 500. this could turn out to be the worst week for the dow in 2013.

and it is not looking much better for the european markets. we are seeing, yes, a little bit of a bounceback in today's trading session. the ftse cnbc global 300, flat this morning. but we did see big losses in yesterday's trading session as well. this is on tapering fears, higher interest rates, higher yields, choking of the rally in equities and got some mixed earnings reports. ftse 100 off by .2%. similar percentage declines for the xetra dax. but we are seeing a little outperformance in the italian and spanish market markets. how do you make money in these markets. here is what the experts have been telling us this morning. >> i like the best right now. it is the biggest interest rate move. mr. carney has got himself into the most tricky corner on forward guidance out of any of the three major policymakers. but uk economy has also provided, i guess, getting relative terms, the best news

over the course of the summer. >> we like moeller maersk. we think it has a lot of high quality assets in a tougher world. the market leaders will win and we think they're well placed. >> until that certainty comes through, we will see these ups and downs with the markets. and seemingly irrational behavior. but we think over the longer term actually we're going to go with equities in the right direction, that is up where as bonds are not somewhere we want to be at the moment. >> dell has seen its quarterly earnings plunge on the heels of a heated takeover battle between founding ceo michael dell and activist investor carl icahn. jon fortt has more on the numbers. >> dell might be having some challenging times as a company, but second quarter earnings

turned out pretty well. revenue came in at $14.51 billion, versus 14.18 that the street expected. earnings per share came in at 25 cents versus 24 cents expected. a number of reasons for this, dell didn't directly break out its public sector revenue. doesn't break that out anymore. but we do know historically that the second quarter tends to be a big quarter for state and local governments and we know that just yesterday cisco's numbers came out and cisco said that state and local was coming back in a healthy way. so probably because we know that that's an important sector for dell, that helped them out as well. looking through the numbers, pcs did well for dell revenuewise. we know dell was lowering prices on pcs. they ended up sacrificing some margins, but revenue came in ahead of where it did in the quarter before the operating income came in a little bit lower than it did before.

but a nice tax rate at 6.9% seemed to have helped offset that for dell. the tax rate is typically been in the double digits around 12% to 17% for dell. in the second quarter, they managed to get 6.9%. dell's no longer giving guidance because it is in the process of going through a go private transaction, founder michael dell trying to take the company private. carl icahn, the billionaire activist investor opposing michael dell's move. no longer giving guidance, but at least in the near term, there is upside in revenue and seems to please investors. the stock was up after hours. for cnbc, i'm jon fortt. >> joining me now is crawford dell fret, the chief research officer with idc. crawford, thank you for joining us this morning. if dell were still to give guidance, just how bleak would it be given the decline in pc sales? >> well, thanks for having me.

i think what you're seeing in dell is really interesting. you're starting to see that while the pc market is incredibly difficult, we're starting to see signs that it may be reaching -- close to a near term bottom. so from a guidance standpoint, dell had minus 5% units, which is significantly better than we saw for the overall market. and we're starting to see now that signs of progress may be in the early stages at dell. you're starting to see that, again, pcs hitting a bottom, enterprise computing, servers, networking and storage actually grew 7%, 8% in the quarter. that's a very, very good sign for the company as they start to attack that enterprise, which is a margin rich area. so, again, you know, it is very, very early to say. but this quarter was very indicative of the challenges the company faces and their argument for why they want to go private. more margin in the enterprise, but the client business is still very, very difficult. quite frankly because they

missed a large part of the cycle, smartphones and tablets. >> you know, this set of numbers really makes it very, very difficult for this takeover battle because as you say, there are positive signs in favor of each approach, really. it is not really silver bullet for either camp, is it? >> no, it is really not. and i wouldn't get too far ahead of the fact that, you know, this is sort of -- any kind of a significant indication of what the future prospects are. dell has been struggling with this seesaw between enterprise computing and personal computing for a long, long time. and the really significant unknown here, carolin, here, is what is the future of personal computers? personal computers are certainly not going to go away. they're go to find a bottom. but, you know, we could easily see the market start to have more significant declines as people move to, you know, even more tablets, as the consumer moves to even more tablets and purchasing more tablets.

so dell may be finding a bottom in the near term, but in the long-term they have really got to invest in this enterprise business, invest in enterprise software, invest in enterprise services and also broader areas of the enterprise hardware market. again, that is their argument for going private. they need to invest in a faster rate than they have been able to today. >> yeah, and they don't want to be doing that on the public scrutiny. but one interesting strategy that dell has been employing is sacrificing earnings to gain more market share. we saw that because margins were down quite significantly. is the strategy actually working out for dell? >> well, you know, it is interesting. no place have you seen this play out more than in the personal computer market. for years we have seen dell really sacrifice unit share for going after the richest part of the market, going after the most demanding customer where they could get a higher margin.

and now in the last, say, six months, we started to see the company start to challenge hewlett-packard, lenovo, acer, on the unit side. and they're defending their turf. we believe this is an example of the company. again, remember. people think about dell as a hardware company or wanting to be a software company. dell's single largest asset is their business model. they have significant asset in selling to small and medium businesses around the world. where the companies credit is cleared. they know to go to dell, they work with dell. dell wants to defend that part of the customer base because they want to move more software, more services, more cloud services to the customer base. they can't lose it. i think now they're basically saying, you know what, we're going to defend that turf, we're not going to cede share in that space, even if we have to take marriage nnt ne margin. >> crawford, i'm curious to see

whether you believe that there is any impact on the operating side of the business from this takeover battle, which has been going on for months and months. has it been impacting the company's focus on its business? >> you know, i have to say, i've spoken a number of times to michael throughout this as well as, you know, watch the senior management team. i've spoken to many, many of their customers throughout this transition. and i have to say, i really don't see it. i see that the company has spent a lot of time being very, very focused on, again, maintaining that customer relationship. really laying out their vision for what they want to do going forward, which, again, is, you know, investing in more software, investing in more services. but that clock work execution really i haven't seen a distraction in terms of dell's ability to interface with the

customers, dell's ability to roll out new products, dell's ability to make sure they're focused on the core areas of growth going forward. again, whether that's in software, whether that's in services. and, again, also, you know, even in some of the real dog eat dog segments like consumer pcs, dell has been very, very candid saying that they will stay in the segment and they will -- they will continue to be focused on that segment going forward. i've seen really strong execution. >> okay, crawford, thank you for that. crawford dell fret. servers could show better relative performance as dell defends its footprint in small and medium businesses. moeller maersk warned the outlook for freight operations remains challenging. speaking to cnbc earlier in first on cnbc interview, the ceo

was cautiously optimistic that freight rates were actually bottoming out. >> we definitely had a very tough second quarter, and when you look at the average results for the industry, we have seen so far, i have to say, for the first quarter, and the first half, they -- the industry on average is not making any money. so i think the -- the rates -- low rates simply hurt the industry too much. and will have to see them at least stabilizing where they are now, after the increases for july and august. so i think -- i'm hopeful they have bottomed out. i have to say we have to be prepared that they can become volatile also in the future. and our business model i believe is geared for that. but we believe we'll see more stability going forward. >> coming up, president obama condemning the violence in egypt, but is he going for enough. after the break, we'll get the

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♪ and these are your headlines this friday morning. strange spikes in the shanghai composite investigated by the chinese regulator. dell's quarterly profit falls more than 70% as the battle for

control of the company rages on. and a march of anger called by the muslim brotherhood in egypt. markets respond by selling the price of oil skyward. staying with egypt, i want to bring you the latest flashes on the wires. according to state tv in egypt, the egyptian army is deploying forces to guard, quote, important and vital facilities. this follows reports on the ground that we got from yousuf over the last hour that tahrir square, the important square in the center of cairo, is being sealed off by the army. there are tank movements according to yousuf and barbed wire fences are being set up in anticipation of major protests. president obama took a break from his vacation to condemn the ongoing violence. cnbc's hampton pearson is live in washington with the latest. good morning. >> good morning, carolin. president obama announcing thursday that the u.s. has canceled long-standing joint

military exercises with the egyptian army that were previously set for next month. he interrupted his vacation on martha's vineyard to address the violence ensuing in cairo. >> while mohamed morsi was elected president in a democratic election, his government was not inclusive. we know that many egyptians, millions of egyptians, perhaps even a majority of egyptians are were calling for a change in course. let me say that the egyptian people deserve better than what we have seen over the last several days. >> the president also said he wishes to sustain a relationship with egypt, but traditional cooperation cannot continue when civilians are being killed and rights are being stripped away. egypt's presidency responding in a statement said the president's words were not based on facts, and will only strengthen and encourage violent groups. carolin, back to you. >> thank you for that. let's look at today's other

top stories. a new contender enters the race for internet paid tv. viacom owns channels such as mtv, comedy central and nick are lodian. sony has been planning to stream cable channels and on demand program over the internet, as this deal is the first of its kind in the end net tv space. a u.s. bankruptcy judge held off approval of a restructuring plan for american airlines. this comes after the department of justice filed a suit to block a proposed merger with us airways earlier this week. amr and us airways vowed to fight the antitrust lawsuit. amr worked out an $11 billion merger with us airways as a part of a plan to exit bankruptcy earlier this year. football fans breathe easy. the premier league starts over the weekend and while it still generates the most revenue of all of the top european leagues, most of the summer's biggest transfer deals have involved the

spanish and french clubs. so are financial fair play rules a threat to premier league. they say clubs will just have to adjust to the rules. >> you're never going to be able to cap on a legal basis people's wages, you don't want to prevent clubs from being able to attract the absolute superstars and what clubs have to do is manage their finances across the squad. therefore there is nothing to stop a club taking on the -- one of the world's biggest stars and paying the world's biggest wage. other 25, 27, 28 in the squad can't be paid that amount of money. >> as we go to break, we'll leave you with a look at u.s. markets. we're expecting to see a little bit of a bounceback after heavy losses yesterday. we'll see you in two. [ female announcer ] what if the next big thing, isn't a thing at all? it's lots of things. all waking up.

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let's give you a look at what's on today's agenda in the united states. 8:30, eyes on the release of the housing starts where analysts expect an uptick from june. building permits expected to rise also. analysts see second quarter productivity climbing to 0.7%. and at 9:55, july's consumer sentiment. todd horowitz is the author and founder at average joe options.com. he joins us now. todd, good morning to you. what data point is most important one according to you today? >> good morning, carolin. i think, you know, you want to look at the housing starts, but i think housing is pretty much factored in. the sentiment number. but the real number is the things to look at here is that we still have a lack of growth, hence the sell-off yesterday in the selling pressure the last couple of weeks. we have seen this week a number of earnings misses and as that continues, we're seeing that we're really not getting real

growth in this country, and the rally has been built on all artificial money right now. so those are the things i'm really watching. the economic data that is coming out today and monday are not as important. >> but, todd, to what extent could the rise in rates be a break for the housing market? we have seen that effect in the previous months. and we're expecting a little bit of a bounceback in july's numbers, but i wouldn't be so optimistic here. >> i agree with you. rising rates short-term here are going to create, you know, weakness in housing, weakness in new houses because the cost of getting money is getting higher. but the real truth of the matter is that the average joe has not been able to borrow money anyway because of the liquidity lock that has been created by the fed. the average guy hasn't been able to borrow money anyways. most of the housing sales and starts done bit upper end and short sales and stuff like that. the numbers could be a miss, i don't know there is that important other than the fact that we're still not getting

real growth in this country. >> we're still not getting real growth, but yet the markets have been trending higher over the past couple of months. s&p 500 up 20% this year. if we are seeing this discrepancy, where are markets going to go from here? >> i think the markets will work their way lower. i think what you've seen here is, you know, cheap money and free money, the situation never ends well. we built a market up, we're basically over the only upper end, big wall streeters have gained traction here. the separation being wall street and main street has never been bigger than it is now. the growth is all on artificial dollars and phony money that has been sent in through the fed as we continue to print money. i think once this starts to unwind, we're going to start to see selling pressure. we have a very similar eerie feeling as a comparison to 1987 here now in that time in august we also had the situation of cheaper money and free money where the end of the situation ended up breaking down.

i think we have a similar situation here. i'm not looking for a major collapse here, but certainly a serious correction here of 10 to 12 to 15% is on order and that's the direction i'm looking in from here. >> you to believe that egypt is a big concern to the markets? i've had two guests earlier on in the program saying that this is why markets were actually down yesterday. but i'm hearing completely different reasons from other analysts. >> i think that egypt for the stock market and the equity market has absolutely no meaning. might have created a little bit of fear. but egypt is only really affecting the oil market. and yesterday the gold market to a little bit of extent. the equity markets are not paying attention at all to what is going on in egypt. the equity markets are focusing on what is going on here. strictly with the equities and no interest on what is going on in egypt right now. >> have a great day. the fantastic weekend. todd horowitz of average joe options.com. earlier we told you how

chinese zoo was exposed as a fraud after it displayed a mastiff dog posing as an african lion. you heard right. an african lion. we asked you what animal best describes china's markets. rick tweeted the chinese markets look like a red panda. and alex tweeted they look like a phoenix. thank you for your contributions this morning. that's it for today's show. i'm carolin roth. thank you for watching "worldwide exchange." and a programming note, tune in next week as we kick our coverage of the german elections into high gear with a political and corporate road trip starting in the capital, berlin. >> i hit the autobahn to explore germany. from industries to incubator, heartland to harbor, entry level to executive. find out the powers and pitfalls of europe's biggest economy as its leaders wrangle over who gets to lead the way. join me monday to find out why

the future of this country matters to you.

good morning. today's top story, the global markets. after yesterday's sell-off on wall street, the dow now at risk of having its worst week of the year. overnight, asian markets trading lower. europe, mixed early in the session. it is friday, august 16th, 2013. "squawk box" begins right now. ♪ ain't no cure for the summertime blues ♪ good morning, everybody. happy friday. welcome to "squawk box" right here on cnbc. i'm becky quick with andrew ross sorkin and scott wapner. good it see you again. >> good to be back. >> into the end of the week

here. >> thank god. >> joe will be back on monday, everybody. right now let's get to the markets. u.s. equity futures at this hour at least after everything we saw yesterday, well, they have barely budged. if you were looking for some big bounceback after yesterday's big declines, you're not going to see it, at least not just yet. as andrew was talking about, we did have stocks finishing near their session lows yesterday. with the dow down more than 200 points. the major indexes posted their biggest two-day losses since june and volume was slightly heavier than usual. if you thought this was the case of just traders being away, that's not the situation. meantime, the yield on the ten-year treasury hit its highest level in two years. this was the story and what was driving things. you can see this morning sitting at 2.778%. yesterday, it topped 2.82% for the first time as we mentioned in two years. in today's session, we'll be talking about what you can expect in a moment. we have to head overseas for a developing story. in egypt, the muslim brotherhood called for m