welcome to "worldwide exchange." i'm carolin roth. these are your headlines from around the world. european stocks are boosted by pmi figures showing germany's private sector has expanded at its fastest pace since january. ahold's profit win, cost cuts help the bottom line, but a slowdown in u.s. sales. corruption and murder and a fallen superstar, bo xilai contesting some of the charges against him. france's foreign minister

says the use of force may be needed in syria if a chemical weapon attack on civilians is confirmed. this as activists say that government forces continue to bombard damascus suburbs. good morning, everyone. you're watching a brand-new edition of "worldwide exchange." i want to bring you eurozone august flash pmis. we see the eurozone private sector growth beating forecasts in july, for the august number we got the pmi of flash at 51.3. this is versus a forecast of 51.2. so that beats expectations. the july manufacturing pmi was 50.3. the august services pmi flash was estimated at 51.

and -- no, the estimates, sorry, 51. the forecast was for 50.2. so, again, that looks to be better than expectations and this is, again, an uptick from the month of july. and this comes after we got those really strong numbers out of germany, slightly mixed numbers coming out of france. joining us from singapore is richard jerron, chief economist at bank of singapore. your initial response to those numbers? >> yeah, certainly good numbers. i guess we have been seeing this for the past four or five months in europe. it does seem that as the head winds from fiscal tightening fade, the economy is starting to lift. i guess that's also what we saw in the gdp data last week. i think it is quite encouraging. >> the french manufacturing number that missed expectations. do you think the second quarter growth number from that particular economy was an aberration, was it too early to pop the champagne bottles there? >> well, i don't think you can

expect every single number for every single country to increase every single month. always going to be a bumpy ride in some cases. if you look broadly across the eurozone it quite clear the trend is for the economies to be coming out of recession. i think as i say less austerity, better policy mix in terms of pro growth policy mix. i think broadly it is quite encouraging. we were worried about the emerging markets, but you see clear signs of a pickup in europe. japan is responding to the policy stimulus and u.s. should see growth accelerating in the second half as, again, the fiscal tightening there moderates. quite encouraging you're seeing g-3 growth picking up at the moment. >> let's talk about the pmi numbers out of china overnight. the hsbc flash number now above that boom/bust line of 50. it seems to be converging with the official pmi numbers. is that a clear sign of stabilization also on part of the smes?

>> yeah, i think the china pmi was a genuine surprise there has been some good hints in the numbers released so far this month, the industrial production numbers. but i think there is a bit of a mistrust on the data at the moment, the trade data, some suggestions it has been distorted by some sort of company trying to gain the capital account system. the hsbc pmi number is seen as one of the more reliable figures at the moment. it is encouraging it propped above 50. i don't know if this is the end of the story, they do have a lot of structural problems, if they're serious about cleaning up the credit system and trying to choke off some of this rather ponzi style lending, then i think it will be a struggle for growth, not just the rest of this year, but probably for years to come. certainly encouraging there has been a bounce. i think if you look at the policy, the policy has become slightly more pro growth in the last month or two, they realized they don't want things to slow down too much, you may have some risk of social unrest and unemployment problems.

so certainly quite encouraging signs coming out of china. >> richard, why is china not seeing the same sell-off as some of the other, asian emerging markets. is that because the pboc manages the currency? >> yeah, i mean, certainly it has got some safe haven features at the moment. i think partly it is because they're under current account surplus. the real focus of markets in the last week or so is on the deficit economies that need to attract foreign capital. china has huge reserves. and they do have a fairical icld capital account. you don't have the risk of big capital outflows anyway. at the same time, it does also have some policy support for the growth story. so i think china, you know, worried about it structurely in the medium term. when the focus is on the capital flows to emerging markets, it offers some safe haven status. >> thank you for those initial

thoughts. let's show you what is happening with the european markets on the back of the better than expected pmi numbers. the stoxx europe 600 is at a session high, up by .9%. this say nice bounceback from the weakness over the last couple of trading days. keep in mind, we also had some encouraging earnings reports over the last few days, which is also helping sentiment a little bit. want tho show you the indices oe by one. the ftse, underperformer of late, now bouncing back nicely, up by 1%. the xetra dax gaining more than 1%. we have seen stocks in the periphery, especially in spain and portugal seeing a bit of outperformance with regards to the core markets today. keep that in mind. ahold is one of the companies that has reported numbers this morning. the stock is up by almost 5%. now, the dutch grocery giant has reported stronger than expected operating profit in the second quarter. that was helped by cost cutting. but the group posted weaker

sales growth in the u.s. this is where it owns food outlets like shop -- stop and shop and giant in the northeast. speaking to cnbc earlier in first on cnbc interview, the group's ceo weighed in on the economic pressures facing u.s. consumers. >> you see constraints of the economic environment, as we also see in our sales growth. low level of inflation, but you still see the pressure of the economy also in other parts of the u.s., but certainly in the northeast. >> let's continue with a look at the bond markets where we saw the ten-year treasury yield back to those two-year highs at 2.9%. this is in response to the fed minutes, which the market is pricing in as september tapering. we saw bund yields tracking near u.s. counterparts higher currently at 1.92%.

in the forex markets, dollar ra chinese data. some traders used this as an opportunity to sell into the rally. sterling dollar coming under pressure a little bit. the dollar strength is the big theme of the morning on the back of the fomc minutes. markets in asia, adam bakhtiar is standing by to give us the full rundown. adam? >> good morning, carolin. a really, really tough session for the markets in the asian pacific region this thursday. the lack of clarity from the fomc minutes, you know, was really ignored across the board. investors continue to price in at some stage the feds with going to taper. but even though we don't even know when that is going to happen or by how much. to a certain degree, yes, the chinese flash pmi data did provide some support, in the case of the late day trading for the hang seng and the shanghai composite. elsewhere, it was really just a day of selling. the bright spot is some of these markets coming off the intraday

lows. look at the epicenter of the capital flight, really is in southeast asia, continues to be so. most of the markets, all of them in negative territory. the worst performer, philippines, as you can imagine, it has been out of action all week because of a public holiday. and because of the weather disruptions that kept the stock exchange closed. but the selling pressure continues to mount across all of the other markets in the southeast asian region. we also saw pressure in the equity sphere. we saw currency markets come out of tremendous pressure as a ten-year, u.s. treasury yield, 2.92%. and dollar strength, that impacted the hardest hit currencies in the emerging market space, particularly india. the moves today eclipsing the record lows that we hit yesterday of about 64 plus. currency at one stage moved down to 65.5. the traders saying on policy confusion from the rbi, because apparently this week they loosen liquidity in the market and the measure they introduced in july

to stem the declines in the indian rupee. we're seeing slight relief, back from the lows, but a weak picture across the board for all these currencies, even down to singapore. that currency also getting hit. the stocks we have been watching out for today, it has been a lot about market reaction to the earnings. asia's largest discount carrier, this has a fleet of 120 aircraft, their numbers were terrible. stock down by 8.4%. the company of the airline getting hit by its offshore u.s. dollar borrowings. we got trinity coming off the day's lows. that stock down 5%. you may be familiar with this one. it manages a lot of high end luxury brands like jeeves and hawks, both in europe. that stock was down. rebounded. fortescue, the fourth largest iron ore producer, fantastic numbers, profits up 12% plus. mixed day across the board. the august hsbc flash pmi data

getting lost in translation a little bit here. we did see some pickup, of course, in the month of august. the final number will be out, of course, a little more than a week's time. this was very, very encouraging data, helping to support the hong kong markets a little bit. but i suppose coming at an inconvenient time, carolin, today, with the overall stock that we saw in the global equity markets. back to you. >> adam, thank you very much for that. the minutes from the fed's latest policy meeting show officials were ready to start tapering the central bank's massive bond buying program this year, but don't give it clear indication of exactly when that may happen. while the september meeting is still in play, fed fund futures are showing an increase in those betting the fed could hold off tapering until the october or december meeting. attentionships today to u.s. economic data including jobless

claims and the annual fed symposium in jackson hole, wyoming. market watchers expect the debate to focus on the exit strategy and impact on emerging economies. brazil's central bank president alexander tombini canceled his scheduled trip to monitor the markets from brazil. over the last 30 days, the real has dropped by 10% and the central bank has been forced to intervene in the currency markets. reports suggest the brazilian government is going to revise down its 2014 growth forecast. the current projection is likely to be slashed from 4% toward the market consensus of 2.5%. well, that would be a pretty big drop. still with us is richard jerron, chief economist at bank of singapore. let's kick things off with the fed minutes. did we learn anything new from it? >> no. nothing new at all. it was pretty clear from the comments of various officials in recent weeks they're prepared to taper before the end of the year.

i think the best bet is still september. the data has been fairly good, especially late market data has been fairly good. i can't see anything to persuade them to hold off. i think you also got to ask, if they don't taper in september and all the market expects it, because of a little bit of market volatility, then can they ever taper? it might be taken quite badly if they're shown to be scared by a little bit of market volatility. most of the volatility you're seeing, got nothing to do with the u.s., all about the secondary effects of the emerging markets. i would be surprised if they waited past the september meeting. >> is this actually adequately priced into the market or not? given the recent bout of volatility, you would think, no, it hasn't been accounted for or discounted by the market yet. do you think once we are hit by tapering, we're going to see more and more volatility? >> well, should be priced in. but three months now, to the day, since bernanke really kicked off the fears about tapering. so, haven't heard about it yet, you've been living in a cave

somewhere. so you would have thought it should be priced in. i think the problem the markets has is that there is not really any precedent for this. you never have this extreme liquidity provision in modern times. the prospects of it coming to an end and beginning to reverse. and so, you know, i think logic tells you it should be priced in. there is still uncertainty of how everybody is going to react when they finally do push the trigger. my sentiment is we should be pretty much close to the worst by now. and you may even get a buy on the fact type of rally. but i think you to accept there is going to be volatility because there is so much uncertainty related to it. >> yeah, markets have been reacting extremely irrationally about the fed minutes. thank you so much for those thoughts, richard jerron, chief economist at bank of singapore. let's change tack. a suspected chemical weapon attack has left hundreds dead in syria. amateur video from damascus showed the bodies of victims from all ages and we must warn

you, the footage we're about to show contains images you may find upsetting. opposition groups are claiming more than 1100 people died in the attack while syrian authorities have denied the claims. the u.s. says there are strong indications the assad regime used chemical weapons while the u.n. says further investigation into the incident is required. the french government has been much more direct in its rhetoric, calling for international community to use force if the allegations are verified. yousef is in cairo. yousef, what is the latest? >> well, carolin, the comments by france really show the frustration that some countries are having with the united nations security council. we have seen this in the past, a year ago, where we had a standoff in the security council. a lot of countries took independent action, either by arming the rebels or arming the government. now, we cannot independently verify the footage or the death toll. but having looked through the

video extensively, very graphic footage, and spoken to some analysts, we can say that the footage is showing casualties that have symptoms that are consistent with a chemical weapons attack. again, we can't confirm it actually happened, but we're seeing victims that are choking, foaming around the mouth, violently shaking, very disturbing images and that was hoped to fuel a renewed conversation in the u.n. security council. that didn't happen. russia made it clear that based on the information it had, this cannot but suggest that once again we are dealing with a preplanned provocation is the quote we got. and iran also saying it is unlikely to have anything to do with the government of bashar al assad. the other side of the story, of course, the united states and the european union, which are calling for an investigation, there are actually u.n. weapons inspectors in damascus, but even yesterday's meeting did not yield a consensus on whether they should step out of their hotels and go down a few blocks.

that's how close they are, actually, to the site of the attack. that shows you the political impasse that exists, and also raises the stakes in the standoff for the next few years. >> yousef, thank you for that. joining us in the studio is hadley gamble. you've been talking to a number of arab diplomats. what intel are they giving you? >> there still such a number of questions to be discussed in terms of the timing of this attack, as yousef mentioned. the u.n. inspectors a couple of blocks away from where this took place. you look at it, and the timing is just incredibly questionable. but also you have to look at the broader picture, bashar al assad, it raises the question of who is really in charge in syria. also raises the stakes in terms of, you know, if he were to be taken out, he would want the international community to take him out rather than any kind of rebel force. things would end badly either way, but much more so if he were

to be taken out in any other way. we have to look at in terms of the weapons, the man still has -- syria still has the strongest amount of weapons on the ground, he has superiority of force. the timing is questionable. >> let's talk about the u.s.' role in all of this. president obama once said that once the red line is crossed, relating to the use of chemical weapons, the u.s. would act decisively. it seems as though that red line has now been crossed, but, you know, many people would argue the u.s. is still dragging its feet. what are the constraints that the u.s. is facing? >> we saw yesterday in the white house press briefing we saw an administration loathe to talk about red lines as all. struggling to stay on message, the message now is obama care and will be that for the next couple of weeks. they're looking to the international community to take some kind of stance, some kind of action before they can even begin to commit at least verbally to doing something in syria. >> okay. hadley, thank you so much for that. and i know you're up really late

trying to gather all the information. we appreciate that. meanwhile, coming up on today's show, the guessing game continues as there are no more clues about tapering from the latest fed minutes. but are markets and investors overreacting? yes is the answer, that's acc d according to our guest. tune in to find out why as we'll be live in new york. disgraced politician bo xilai is on trial in china where he faces embezzlement, abuse of power and bribery charges totalling $3.4 million. we'll be live at the courthouse in the next 15 minutes. central bankers from around the globe gather later today in jackson hole, but with one notable absence. what does ben bernanke's no-show mean for the get together? we'll be live in jackson hole at 11:30 cet. does solar energy have a bright future in the uk? cnbc's helia ebrahimi is live at a solar farm to shed some light on the matter. tune in at 10:40 cet.

the theme to the center of germany where the price of renewable energy is a hot election topic. [ male announcer ] it's time. time to have new experiences with a familiar keyboard. to update our status without opening an app. to have all our messages in one place.

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a german chancellor angela

merkel told broadcasters that fresh aid require s for greece won't be decided upon until mid-2014. her comments which will be aired later this week come a day after finance minister wolfgang schaeuble openly stated that greece would need a third bailout program. this comes as ecb executive board member erik rasmussen said the topic of aid was not discussed on day one of his current visit to athens. he said his agenda was focused on how to make the current program a success. securing a cheap reliable source of energy for germany's manufacturing industry is one of the top priorities for angela merkel's government. she hopes that by 2020, 40% of the company's electricity will come from renewable sources. at the moment, that figure stands at 12.6% with wind and solar being the biggest contributors. with more, let's get out to annette who has traveled to

germany, close to frankfurt, right? >> very much true. 40 minutes -- >> annette, let me ask you, with angela merkel's big push into renewables, how does that reconcile with the fact that the solar industry from a corporate perspective in germany is essentially dead? >> well, it is essentially dead, but as -- because as well what angela merkel's government did as well is to cut subsidies tremendously for solar panels because there is a lot of installment already there, but on the -- at the same time what the industry is arguing that they need to have a legal framework, which is stable for at least ten years or so when it comes to wind parks, for example, needs like ten years that this investment is actually break even. what is happening now in germany, when it comes to price, is electricity prices we're seeing them rising, rising and rising again.

but i would have to trust that a lot of companies are exempted from paying those renewable surcharges. those companies who are exporting a lot, and are in a globally competing globally with other companies are exempted from the surcharges, but nevertheless, take a listen. yesterday, i spoke to alexander shoem schumeman, the chief economist and he pointed out that energy and energy politics are, of course, huge concern for companies here. >> we need more reforms in the next four years above all the highest risk companies name us here in germany is energy prices. so energy prices are a huge concern. >> that whole push to have more renewable energy as well, critics are saying comes with a downside that is reliability, as well when the sun is not shining, the wind is not

blowing, but today in the morning, i caught up with the ceo and founder, i should say, co-founder of the company. i'm standing here, who is actually active in the fields of solar, wind and biomass. and matisse rittenback is his name, of course. and he said reliability is not an issue. take a listen. >> it would do it all over germany. the weather risk is much lower. so we can get very stable wind energy and we can also get stable solar energy if we use more panels, but smaller -- that is also very easy to do. >> so if you look behind me, the car park, those -- the roof over that car park is producing enough energy, it is covered with solar panel to produce enough energy for roughly 1,200

people working here at the headquarters. it is quite an efficient way of producing energy. and, of course, those windmills behind me are as well producing a lot of energy for the region here. the key question probably for german politics will be what is going to happen after the election, because, of course, the goal is pretty clear. they want to increase the share of renewable energy by 2020 and at the same time they are going to exit nuclear energy by 2020 too. and right now judged by last year nuclear energy was still producing 23% of electricity in that country. so there needs to be a clear road map how to reach that. right now, the big utilities are actually taking away capacity because there is a lot of overcapacity, but at the same time, there is as well investing in coal. >> annette, with electricity prices going up in germany, and germany facing some of the

highest wholesale electricity prices in all of europe, to what extent do you think this could play into the election and to the election campaign, and actually the outcome. we know that the eurozone as we discussed the other day may not be that big of an election topic, may not be that hotly contested. but energy seems to be playing a much bigger role. >> yes, energy is actually playing a much bigger role. and when it comes to company, of course, they have a tradition to be a bit more on the liberal side of things. so that is one big hope of the liberals, who are right now campaigning that country and campaigning germany, meeting up with a lot of companies because the liberals are in favor of cutting those subsidies and as well are in favor of more competition, ie, more competition will mean as well lower electricity prices. the other camp is arguing that we need to take a longer view perspective saying if we want to have that change in energy mix

in germany towards renewables, we need to have a time where we have to pay higher prices. by the way, recent polls are saying that 60% of germans like ordinary consumers are willing to pay that price. >> annette, thank you so much for that. i do want to bring you numbers from petro china, one of asia's biggest refiners. keep in mind some of the companies in china, these oil and gas companies, have been suffering from lower margins. let's see if the picture is improving any at all. petro china says second quarter net profit came in at 29.5 billion yuan. the forecast was for 25.4 billion yuan. nicely beating expectations. petro china says the first half oil and gas output was up 4.4% year on year at 697.2 million barrels. it says first half losses from natural gas imports amounted to 23.52 billion yuan. google gets knocked off its

perch for the first time in more than five years. yahoo! has topped its rival in u.s. internet traffic. com score lists yahoo! as the most visited site in july with more than 196 million hits. google lagged slightly behind with 192 million visits. google has been number one since april 2008. and the boost comes shortly after yahoo! bought the popular blogging site tumblr in may. it is interesting to note, though, that this number probably doesn't include the mobile clicks. so once these are accounted for, these numbers could certainly change. but yahoo! shares in germany up by .4% and google shares in frankfurt up by .6%. do you yahoo! or prefer google? if you want to join the conversation on "worldwide exchange," get in touch with us by e-mail at worldwide@cnbc.com, via twitter, @cnbcwex, or direct to me @carolincnbc.

and still to come on the show, the trial of former political high flyer bo xilai is under way in china. he stands accused of bribery and attempts to block investigations of his wife's role in the murder of a british businessman. we cross the courthouse in jinan, shandong province, after the break. [ male announcer ] i've seen incredible things. otherworldly things. but there are some things i've never seen before.

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european stocks are boosted by pmi figures showing germany's private sector has expanded at its fastest pace in january. ahold, cost cuts help the bottom line, but the dutch grocer sees a slowdown in u.s. sales. murder and a fallen superstar. china's trial of the century gets under way with former political leader bo xilai contesting some of the charges against him. france's foreign minister says the use of force may be needed in syria if a chemical attack on civilians is confirmed. this as activists say that government forces continue to bombard damascus suburbs. good morning, everyone. european markets are getting a nice lift this morning from

better than expected earnings on the one hand from the likes of ahold, and also the pmi, the flash pmi numbers for the month of august. the ftse 100 up by .8%. the xetra dax up north of 1%. and the cac 40, despite a slight miss in terms of the manufacturing number, it is seeing nice gains as well to the tune of 1%. the portuguese market as well as the italian market are outperforming. so the periphery doing even better than the core. in the bond markets, on the back of the fomc minutes yesterday, which led to the fact that markets did price in september tapering rather than october or december tapering, we saw yields ticking higher yet again. so back to those two-year highs for the ten-year treasuries. we don't have them up here, but they're currently at 2.9%, inching ever closer to the 3% level. the ten-year bund yield is sitting at 1.94, also at multiyear highs. so tracking higher as are the

u.s. counterparts. you can see there, 2.91%. we'll talk much more about the treasury curve later on in the show. in the forex space, we saw that nice bump up for the euro dollar and on the back of the pmi figures, just about half an hour ago. euro dollar sitting at 1.3357. pretty much unchanged and that's because we're seeing dollar strength across the board on the back of the fomc minutes. dollar yen seeing a nice bounceback to the tune of .7% at 98.40. former politician bo xilai is now on trial in china on charges of bribery, embezzlement and abuse of power. he's accused of using his position in the government to attempt to block the investigation into his wife's murder of british businessman neil heywood. he's also being charged with taking as much as $3.4 million in bribes. but so far he's contested at least one of the bribery charges against him. with more, let's get out to

eunice yoon, who is outside the courthouse in jinan. eunice, give us a sense of what the atmosphere -- i hear that she is not good right now. we'll try to get out to eunice as soon as possible. joining us in the studio is jonathan fenby, co-founder of trusted sources and managing director of the china team. now, he's contested some of the charges and that was to be expected. but and we know that he's extremely media savvy, he's worked in media for a long time. he knows how to play the chinese and maybe even the international media. to what extent do you think he can sway the image? >> i think very properly everything has been decided in advance. waiting for the trial for the best part of a year, and obviously a lot of negotiation going on about this. his defense as far as we have heard it so far and there is an official account of what is going on in there, no independent foreign reporters there, is the i didn't know what

was going on defense. he accepts legal responsibility for bribery. this is back when he was in alocal government position in northeast china but says he didn't know what his sb subordinates were doing. this is a classic defense. >> this is quite a balancing act for the chinese authorities in deciding how tough the penalty, the verdict is going to be. do you think we'll be seeing a death penalty? >> probably a suspended death penalty. that's become the norm. we had the railway minister, accused of taking bribes in the billions, not in the millions, and he was sentenced, given a suspended death sentence. bo's wife got a suspended death sentence. what this means usually is you have two years to repent of your crimes and then you're given a life sentence or 16 years. >> jonathan, we'll come back to the discussion. i want to get back out to eunice yoon, our correspondent on the ground. eunice, tell us what the atmosphere is like outside the

court. >> well, the afternoon session at the court is really becoming quite interesting. all of us expected a very staged, managed, highly choreographed event here today. but it seems as though bo xilai himself didn't get the memo. this is a man who is very charismatic, risen up the ranks of the political circles here in china because of his savvy as a politician. but it looks as though we're now starting to see some of the savvy, some of the personality in the courtroom. he has denied the charges against him. so far he's been going through a lot of detail about those charges. he also -- his wife actually testified against him and submitted testimony against him and he shot back that she had mental problems. so this is really a man who is going off script and a lot of people seem to believe this suggests he's going to be fighting this to the end. >> eunice, want to bring back in

jonathan fenby, co-founder of trusted sources and managing director of the china team. how important is the outcome of this trial for -- for china's future in terms of -- in the political message it is sending. >> it is very important. the actual crimes which he's accused so far are relatively small, by chinese standards. they date back 20 years or so to when he was in the northeast. not when he was in the central government. but the important thing is that he was the one politician in china who bucked the system. who was aiming for the top, using populous methods, doing his own thing, wasn't following the central communist party dictates. and at some point, two years ago, 18 months ago, obviously the other guys at the top decided he was a danger, and chopped him down. and the trial is a result of that. so what happens to him is really it is a political issue in china, and the new chinese leader will need a fairly convincing guilty verdict in

order to keep bo down and above all to keep those who still think china should go more to the left as bo wanted to, more sympathetic with the ideas of mao zedong and so on, which could represent a threat to the current leadership, but xi and you have a complicated political stew here. >> this is setting an example and many would argue he's a victim of the power struggle going on the political front in china. to what extent does bo xilai still have supporters across china, because, of course, the officials in china, they're against him, working against him. he still is going to have some support. >> yes, it is difficult obviously to gauge this. but i think he did strike a genuine populist chord in china when he was doing this big campaign to return to communist

values, and all the rest. and the fear certainly at the center is that he has got a lot of sympathizers in the party apparatus and in the army. >> eunice, want to get back out to you. this was supposed to be an open trial. to what extent has that actually materialized? >> well, it has materialized in the sense that for the first time live blogging is being done by the court of what is going on inside the trial. also, the media is allowed here and it is all very organized. so in that way you can say that it is an open trial, but at the same time, the security presence is very, very strong. and i just want to pick up on what mr. fen by had been saying as well and what you were discussing as well about bo supporters. the security presence is really strong, but not necessarily for the reason you might think. you might think that because this man has been charged with corruption, abuse of power, with bribery, that there could be security here in order to protect him from angry mobs

wanting to lynch him. in fact, it is the opposite. where the security presence here is so big because of the government is actually concerned about his supporters coming out in force and rallying around the courthouse. they're very sensitive to the fact that he has really cultivated an image for himself as a man who is a champion for the little guy. so because of that, they're proceeding very carefully. and it is also another reason why a lot of people believe that this trial is going to have to wrap up very quickly. at least in the eyes of the government in order for them to move the administration forward, solidify their power and really focus on policymaking later in the year. >> eunice, i would agree. this comes as an important moment in china, because we got the new leadership, which is now there for six to nine months, and which is facing real questions about rebalancing the economy, about economic reform, about what the whole communist party is for and the system is for, and this slots into that.

and, of course, eunice, this is a relatively open trial, particularly compared with recent trials of the railway minister or bo's wife and the real nightmare for the authorities would be if we had a rerun of the famous trial of mao zedong's widow where she went off on her own course and broke proceedings to complete chaos, denouncing everybody. i don't think bo would do that. but this is certainly very interesting. >> okay. unfortunately we're going to have to wrap it up here. thank thank you so much for your contribution this morning. staying in china, petro china reported a 29.5 billion yuan in net profit for the second quarter. that beat analyst estimates, improved profitability at the refining and natural gas businesses helped to offset lower international prices for oil. joining us from hong kong is simon powell, head of oil and gas research asia at clsa. thank you for taking the time to

speak to us this morning. so, in your outlook for petro china earnings, you were expecting that refining would still be making a loss. you expected that second quarter earnings will be softer on the back of lower crude prices. how were you surprised by the report card this morning? >> it came in at 16 for the second quarter. we were looking for 15 per share. as you said, it beat analyst expectations. i think petro china has done a great job in the second quarter of slowing down the losses on imported natural gas. we know that they were trimming volumes and doing the best they could to minimize those losses coming into the gas price reform. so that's for us where the surprise was. >> just want to get a quick take from you on cnooc, which reported earlier this week. it has a history of disappointing investors because it couldn't meet the production target targets. this time around it didn't raise its 2013 production target.

with the acquisition of nexten, that is certainly going to go up. are you bullish on cnooc now as a result of this? >> yes, we, in fact, we upgraded cnooc in march of this year to a buy. when we pretty much felt all the bad news was in the price. you're right, for two years the company has disappointed the market with lack of production growth. remember, though, this is in the context of a stellar performance from 2005 to 2010 when they doubled production from, you know, half a million barrels a day to close to a million barrels a day. so in some ways the market was looking for that growth to continue. it stauld flled for two years t was a real strong possibility it could come back. we weren't huge fans of the nexten acquisition. i think it was expensive. we saw certainly in the first half results for cnooc this year that, you know, it produced very little, less than 1% of bottom

line. but i think what investors can expect is production growth to come back slowly in the domestic business. they have been spending enough development capex, we think, in offshore china to deliver that. and if the management team do what we think they should be able to do and that is turn nexten around, get the long lake project working, we think there is upside to production for cnooc. it is a buy for us as is petro china at this point. >> simon, earlier this week, what is going to be driving a big demand increase for oil? >> absolutely, the -- we think china represents half the world's incremental demand for oil going forward. even in a relatively soft chinese economy, oil demand is going to grow 4%, 5% year on year. this year there is nowhere else in the world that is growing oil

demand that much. they can produce, we think, 2% to 3% growth in liquids domestically and petro china has been doing a great job of domestic crude production, but there is a short fall and that's where the imports are. what is driving it. it is pretty simple. gasoline demand continues to be well in excess of 10. currently running 14% year on year. so even in a soft economic environment, where diesel demand is flat to actually declining in first half, gasoline demand, private motorists in china, that's what is driving it and it is pretty easy to see that can continue over the long term when we think about how many cars china has today and how many cars it is going to add. >> simon, thank you very much for that. the chinese certainly like their big suvs. simon powell, head of oil and gas research at clsa. still to come, the race for renewables is on as the uk plays catch up with industrial joints like china and the solar power

space. h helia joins is us live after the break.

tokyo electric power has

admitted for the first time that highly radioactive water at the fukushima nuclear power plant could have leaked into the ocean. we have the story live from tokyo. >> tepco had initially said most of the contaminated water, which had leaked out of the fukushima plant, was soaked up into the ground. however, a high amount of radiation has been detected in drains that lead straight into sea water. now, tohoku president said the plant which stands 100 kilometers away from the fukushima plant was shaken by the 2011 earthquake harder than it was designed to withstand. tohoku electric is working on safety precautions such as raising the height of seawalls. japan and ukraine will be launching small size satellites early next year to observe how the environments have changed

around the nuclear power plants at fukushima and chernobyl. tokyo university with other institutions will assess the status for the two plants and pass the data on to the two governments. that's all from nikkei business report. back to you. >> thank you so much for that. the british government is stepping up efforts to go green with aims to produce 15% of electricity from renewable sources by 2020. solar power, which currently makes up just under 1% of the renewable electricity space, could prove crucial to achieving this target. our uk business editor helia ebrahimi is at a solar farm. those are some very, very ambitious targets given that we don't get a whole lot of sunshine here in the uk. >> yeah, absolutely right. it is ambitious, but that's what the government has said it wants to do, wants to be bold with renewable energy. while wind farm has come in for a huge amount of criticism for being inefficient, there are really fast growing alternatives.

one of them is solar. here behind me you can see there are 130,000 solar panels there. and the argument for wind farms, which plug in directly to the grid is that unlike the panels that go up in your houses, which have been expensive in recent years, this actually has scale and it is able to produce energy at a huge rate. over here, this could power about 8,000 to 9,000 houses. so it is not doing a bad job. the question is, can -- can solar power still go on thriving with government subsidies coming down? the argument would be it doesn't affect people around them, the neighbors seem happy, it is more efficient, and even in the uk, there is always a bit of sun. >> thank you so much for that. solar raised its forecast for shipments. the chinese firm is selling more in japan in order to offset a slump in europe. the stock rallied on the news

earlier this week. let's get out to timothy lamb at a hong kong. trina solar upping the forecast. it is certainly defying the notion that the solar industry is moribund. >> well, i think the interesting part about the solar industry is there is a continued movement to have more shimmers going into both china and both japan. which is why you do see the panelmakers seeing a continue strong utilization rate in the second and third quarter, on the back of very strong demand coming off from asia. this is a different type of market, where as if you look at in the past, in the european areas, a lot of those were driven by the subsidies in germany and in spain, but that's no longer the case necessarily for the demand coming today. so i think this is going to continue on into second half, where as this company can see how utilization rate, which is

going to help them to see improvement in the margins. >> we have seen prices see something support in the recent weeks. how sustainable is that and which companies are set to benefit from that the most? >> well, for if you look at what has happened in the last six months, i would say, is that the prices have been recovering from below cash cost level for some of the producers. essentially rising now to around $18 or so in u.s. dollars per kilogram. what that is going to happen going forward is it would really depend on how the demand will be sustained into the second half. and given what we have seen so far in the third quarter, it can likely to be sustained to see a little bit high near the third quarter before you'll see the price responding to a continued cost reduction in the silicone producers. >> your top pick in the space? >> we like gcl and oci.

particularly i think the oci in korea will benefit from improvement in the silicone prices. for gcl, i think the expectation has been much lower, given they will be seeing losses in the first half, given the prices were weak. we should be seeing some improvement going forward, given the improvement into silicone prices. >> timothy, thank you so much. timothy lamb. still to come in the show, the minutes of the fed's july policy meeting offered few clues about the timeline for scaling back stimulus program. we get an interpretation after the break. [ kitt ] you know what's impressive?

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welcome to "worldwide exchange." i'm carolin roth. european stocks boosted by pmi figures showing germany's private sector has sxaexpanded its fastest pace since january. the fed offers no clues on when it might start tapering so the focus might shift to u.s. jobless claims and the central bank's annual get together in jackson hole. corruption, murder and fallen superstar, china's trial of the century gets under way with former political hero bo xilai contesting some of the charges against him. germany demand full access

to united nations arm s arms. good morning, everyone. if you're just tuning in, thank you so much for joining us on a new edition of "worldwide exchange" this thursday morning. here is your look at how u.s. futures are faring ahead of the open. we are expecting to see a little bit of a rebound after yesterday's steep losses. the dow is now at a two-month low of 105 points or .7% on the back of the fed minutes. we did see some very choppy trading on the back of those minutes. we were really swinging between gains and losses, but so the market can't really make up its minds whether we're going to be september tapering or october or december tapering. european markets are looking like this, we certainly did get a nice boost from the better

than expected pmi numbers for the month of august. the french number maybe was a little bit of a disappointment, but the german number really topping everyone's expectations. the xetra dax in germany rallying to the tune of 1%. the ftse mib and ibex 35 and portuguese market getting the best of the gains, up by around 1.7% each. now, we did get some earnings reports which also fueled optimism about the health of the corporate sector. shares in ahold in the netherlands up by 4.5%. the dutch grocery giant has reported stronger than expected operating profit in the second quarter. that was held by cost cutting. but the group posted weaker sales growth in the u.s., where it owns food outlets like stop and shop and giant in the northeast. speaking to cnbc earlier, in a first on cnbc interview, the group's ceo weighed in opt economic pressures facing u.s. consumers. >> you see constraints of the economic environment as we also have seen in our sales growth in

the u.s. in the northeast. of course also low level of inflation. but you still see the pressure of the economy also in other parts, but also in the northeast. >> the conviction in the market seems to be that we are going to be seeing tapering sooner rather than later. that's why we saw ten-year treasury yields back to the two-year highs at 2.9%. now, the german counterparts, the bund yields tracking their u.s. counterparts higher at 1.94%. in the forex space, the dollar making a bit of a comeback and it is now following treasury yields higher. that correlation has broken down before. dollar yen up by .8%. the aussie dollar getting a boost from the better than expected hsbc china pms fis fore month of august. let's get out to adam bakhtiar who is standing by in singapore,

to give us the rundown of the market action in asia. we saw more jitters across the emerging markets yet again. >> yes, we definitely did. still lots of concerns about fed tapering and although we didn't get any clarity in the fomc minutes, carolin, as you well know, investors continued to get out of risky assets across the board and higher beta markets. you see on the wall behind me, all the asian markets with one exception, hong kong, are closing into negative territory. the japanese market not getting any traction despite weaker yen, both the dollar and also the euro to the tune of 50 basis points across the board here n some ways, the positive numbers out this morning from hsbc's flash pmi data for the month of august helped to stem the decline we saw in some of the markets, in the greater china region. shanghai, down by .3%. hong kong, higher by .4%. we saw big gains in the h shares, chinese listed shares in hong kong. partly because we got that

really big number for pmi for the month of august. and also getting the drop, the positive drop from the european numbers that came out 3:30 our time here today. but difficulties in the southeast asian region, particularly in the emerging markets. philippines, one of the worst performers, back to trade, after being absent from the markets for the entire week because of public holiday and also because of the flooding situation, kept the markets closed. we continue to see the selling pressure in the southeast asian region, all markets closed, but coming off the worst levels of the day. currency markets, cleese cloose the indian rupee, which, today, fell to another record low for the sixth trading session, touching 65 plus versus the u.s. dollar. we're just seeing that now hover at 65, very volatile session for that. the rupiah, another four-year low, 10,800. most of the southeast asian

currency got hit hard today. the stocks we're watching out for, responding to earnings results, we had terrible numbers out of air asia. asia's -- asia's biggest discount carrier, shares down 8% plus, feeling eat fect ining the weaker ring et. trinity is the big market for them in terms of the brands like trudy, they came off the lows of the day. and fortescue, a big iron ore producer in the world, they had decent numbers and the market responded to it. in the meantime, the flash china pmi data i talked about, that was a really decent number, coming off the 11-month lows and moving into positive territory. and this was a very welcome relief. unfortunately, carolin, perhaps a little bad timing when investors, of course, still panicking about the whole concept of fed tapering. back to you in london. >> absolutely.

adam, thank you very much for that. let's give you a look at what's on today's agenda in the united states. weekly jobless claims are out at 8:30 a.m. eastern. forecast to rise by 10,000 to a total of 330,000. at 10:00, we get july leading indicators. richard fisher speaks at 2:00 p.m. at a manufacturing conference in orlando. and at 4:00 p.m., treasury secretary jack lew speaks about the economy and jobs, following a tour of an at&t facility in silicon valley. dollar tree, hormel foods, sears holdings, and abercrombie before the bell. and gap, aeropostale and pandora. stay with us. [ male announcer ] it's time. time to have new experiences with a familiar keyboard. to update our status without opening an app. to have all our messages in one place. to browse...

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good morning, everyone. let's take a look at today's other top stories, the s.e.c.'s enforcement status reportedly investigating the cause of the trading glitch at goldman sachs on tuesday. the bank is assessing the financial damage from the bad trades, which reportedly could cost upwards of $100 million. reports say an upgrade of an internal system affected trading of single stock and etf options with symbols beginning with the letter h through l. goldman shares in frankfurt are looking like this. not sure we have got them right

now. i think it is coming. all right. we don't have it right now. we'll bring it to you as soon as we got it. the president of troubled chinese brokerage everbright securities stepped down and the firm now says it has been banned from underwriting bonds for nonfinancials. everbright's been under fire since admitting to computer trading glitch that said the shanghai composite briefly spiking more than 5% last week. everbright shares were halted this afternoon, but will start trading again on friday. that's when the brokerage says it will share more details. the minutes from the fed's latest policy meeting show officials were ready to start tapering the central bank's massive bond buying program this year. but don't get the clear indication of exactly when that may happen. while the september meeting is still in play, fed fund futures are showing increase in those betting the fed could hold off tapering until october or even december meeting. joining us now is jerry wetman

at oppenheimer founds. i find it fascinating that market participants, even though we didn't get any news from the fomc minutes, they're now positioning for september tapering potentially. but what they didn't focus on is some of the more dovish parts in the minutes, like members discussing lowering the unemployment threshold. does the market really want the dollar and yields to go into that one direction? >> you know, the market is confused. it is confusing to think even think about what you want the fed to be doing. do we want them to say, we're not tapering, which sends the signal that somehow the economy is weaker than we expected it to be, or do we want to see financial conditions tightening? there was, i think there was something in the minutes yesterday, almost anybody could pick up on, i found it somewhat cautionary. if i came out of it, i said, the fed came out of it, if i think about what they said on july 31st, where they are now three

weeks later, i think maybe there is some caution to be read into -- about the state of the economy and the timing of easing to be read into yesterday's minutes. >> we saw about triple digit point loss in the dow. we see yields for the ten-year at 2.9%. do you think the market reaction is overdone here? >> i'm surprised at equity markets traded off as much as they did yesterday. one of the interesting things, when the fed went through the things they're watching, one thing they said they were optimistic about three weeks ago was the condition of financial markets. they thought financial markets were accommodative in general. since then, interest rates are up farther. dollar is strengthened against some currencies. and stock market is down significantly. so financial conditions actually deteriorated a little bit since then, which would tend to put off easing. i'm not quite sure why the stock market would take that as a negative as opposed to the fed saying they expect support if we

need it. i don't -- you know, explain what the stock market does over a couple of hours is really always a little bit of a dangerous game, but i was surprised by the trade-off. >> it is our job, though, unfortunately. we have to make sense of the moves in the market, but that's why we invite the likes of you to help us explain. we'll come back to that discussion. i want to talk about today's data points, which could, you know, give us more guidance as to what the fed might be doing, whether it starts tapering in september. want to come back to some of our other top stories. one of them, of course, the headline, former politician bo xilai has gone on trial in china on charges of bribery, embezz embezzlement and abuse of power. he's accused of using his position to attempt to block the investigation into his wife's murder british businessman neil heywood and being charged with taking as much as $3.4 million in bribes. with more, let's get out to eunice yoon, outside the courthouse in jinan. eunice, we discussed this before, but this was supposed to

be an open trial. is it really? >> well, for the most part people believed this is going to be very highly choreographed, it was going to be carefully stage managed. what is interesting is this afternoon session because you're starting to see that praperhaps xilai didn't really get the memo. bo xilai rose up through the ranks of power because he had a strong personality, a lot of charisma, also a very divisive figure, one could argue it led to his downfall. but at the same time, you're starting to see some personality in the courtroom, which is really quite interesting in a chinese context. he has been denying the charges, he's been going into detail against some of the prosecutors who have been lodging certain charges against him. he's been pulling them apart. he also went -- his wife submitted testimony against him and he actually shot back that his wife has mental problems.

so you really are seeing a lot of personality here by a man becoming very defiant in the courtroom, which is an unusual thing here in china, and suggests that perhaps he's going to be fighting this to the end. what is also interesting is the security situation around the courtroom, around the courthouse, because it is a very heavy security presence. one would argue perhaps in another country that the reason why you have security against a man who has been charged against abuse of power, corruption, and bribery, that the security would be there to try to protect this person from angry mobs of people. but in china, it is actually the opposite. where the security is here in place to try to push back all of those supporters, because the fact of the matter is that bo xilai has been able to, over the course of his career, cultivate an image for himself whereby he looks as though he's the champion of the little people. and so because of that, it is

really quite telling about what the political mood is that people, even though he's been charged with all of these different, you know, dubious things, that the people are still out there to support him instead of coming out with pitch forks. >> quite interesting. so he certainly still has support and, you know, some pockets of the political scene, of course. thank you so much for that, eunice yoon, covering the bo xilai trial. positive data for europe's private secretary erk btor, buta slowing france. the fomc minutes gave little for markets to chew on. now jackson hole, jobless claims come to the fore. with all the backdrop of the spy thriller, bo xilai's trial is under way, the chinese politician accused of bribery and corruption. and still to come on the show, a top election subject in germany is how to secure cheap reliable energy for the country's manufacturing

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securing a cheap reliable source of energy for germany's manufacturing industry is one of the top priorities for angela merkel's government. she hopes by 2020 40% of the

country's electricity will come from renewable sources. at the moment, that figure stands at only 12.6% with wind and solar being the biggest contributors. meanwhile, in the uk, energy produced from solar is minimal, just below 1%. a figure the government is hoping to increase to meet its target of producing 15% of electricity from renewable energy by 2020. let's get out to annette. angela merkel is hoping to make this big push into solar and wind, renewable energy overall. but then many argue she's been destroying the solar energy by giving too much in terms of subsidies. is she going to be able to tell the voters, yes, this is actually -- this is, you know, this is my success. we can actually lower energy prices? >> voters are quite divided,

carolin, surprisingly, i have to say, because 60% of germans ask whether they would -- whether they were willing to pay the higher electricity costs and then have green energy actually saying, yes, we're willing to pay the extra cost for that big push into renewables. but, of course, the companies andholders behind those companies don't really agree. there is a lot of lobbying going on, carolin, because a lot of those big companies are not paying the extra surcharge levied on consumers for green energy, so in a way, like the owner of this company here, it is a decision between two alternative systems, either we are really going ahead here in germany to make a big push into renewables, into solar and as well wind energy, wind as being the future because solar we

already have a record, you know, stored in terms of solar capacity. or at the other side, it is traditional utilities actually upgrading their call plans, right now taking place, because they say only coal energy is cheap enough to complete with the cheap renewable energy. so we are, in a way, at a crossroad, at a junction here, and it is all up to german election as well what is going to happen after those election because angela merkel already said that this renewable energy law which right now is actually defining those renewable feed in tariffs is going to be revamped after the elections. with that, back to you. >> annette, thank you very much for that. definitely a big election topic. meanwhile, let's get the uk side of the story.

helia is at a solar farm. helia? >> yes, it is not quite the political hot potato it is in germany, but we have very aggressive targets as you were mentioning before. and we're standing here in the biggest solar farm in the uk. i'm joined by jonathan salwind, managing director of lark energy. can you tell me how significant is solar? we heard before it is a tiny proportion of renewable energies, less than, you know, .1%. how significant are the initiatives you guys are doing? >> solar really only came to the uk in any meaningful amount in 2010 with the launch of feeding tariff. we have grown from nothing to 2.5 gigawatts. hoe it is small in the overall context of energy in the uk it a fast growing source of energy for the uk and expected to grow stronger over the coming years. >> do you think we were chatting earlier and you said shouldn't

renewable energy be able to stand on its own feet? why should you be getting subsidies and helps from other energy companies. shouldn't you be able to make money by yourself? >> i think the reality is that other forms of fuel, like the fossil fuels, nuclear and so on, had many decades of subsidy and we're giving a bit of a leg up to the market to get going. we think that solar costs are coming down substantially very quickly and we think that solar will stand on its own two feet in a few years time. it is very much come down in cost quickly, and we're getting towards what we call grid parity and without the need for subsidy. >> do you think government is doing enough? it talks the talk, but is it actually putting its money where its mouth is? >> we had ups and downs, but we have a nice stable framework for solar going forward now. we hope the government stands by us and helps to support us in the future. but at the moment, we're quite happy about the stable framework and see a lot of certainty for uk market and it is the fastest growing market in europe. >> and, lark, you were a house

builder originally. why did you diversify in solar and who are the other investors who are looking at solar energy as a way to make money? >> our group company lark fleet has always been at the forefront of energy efficiency and renewable features in its housing. and it saw this as a logical next step to develop both the housing energy efficiency and renewables and stand alone energy assets. we're good at developing sites, good at constructing things. in terms of other players in the market, there is people like light source, british solar renew abables and solar century. we work closely together to influence the policy. >> thank you very much, jonathan. so a very stable and possibly very good investment for people, including wealth funds apparently. >> thank you for that. where you are now, it doesn't look particularly sunny. so you got to wonder how well that plan is going to work out in terms of solar. google gets knocked off its perch for first time in five

years. com score lists yahoo! as the most visited site in july with more than 196 million hits. google lagged slightly behind with 192 million visits. google has been number one since april 2008. the boost comes shortly after yahoo! bought the popular blogging site tumblr in may. it is worth pointing out that this does not include mobile. if you take mobile into account, that could certainly change. so, do you yahoo! or do you prefer google? if you want to 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. and still to come on the show, the world's top central bankers and economists are gathering in the shadow of the grand teton mountains for the jackson hole conference. but the meeting will be notable for who won't be there this year.

welcome to "worldwide exchange." i'm carolin roth. manufacturing and services data overall positive for europe, boosting stocks. french figures sees a drag as german growth soars. the fed offers no clues on when it might start tapering, so the market's focus might shift to u.s. jobless claims and the central bank's annual get together in jackson hole.

corruption, murder and a fallen superstar, china's trial of the century gets under way with former political leader bo xilai contesting some charges against him. germany demands that syria grant full access to united nations arms experts after france's foreign minister says the use of force may be needed if a chemical weapon attack on civilians is confirmed. good morning, everyone. if you're just tuning in, thank you so much for joining us on the show again. here is how markets are faerg ahead of the u.s. open. the dow, the nasdaq and the s&p 500, we're expecting to see a little bit of a bounceback after the heavy selling in yesterday's session on the back of the fomc minutes. the dow now at its lowest level in some two months. the dow off 105 points or 0.7%.

the s&p also losing about six cents of -- .6%. now, in terpz ms of the europea markets, we're seeing a lot of green arrows. remember, germany leading the way. this morning we also got chinese pmi numbers for the small and medium sized enterprises. that was also better than expected. take a look at the reaction across the board, ftse 100 up by .9%. the xetra dax gaining more than 1%. and we are seeing a nice outperformance in the periphery economies. now, let's take a look at what is coming up on the show. the world's top central bankers and economists are gathering where the buffalos still roam in the wilds of wyoming at the fed's annual conference in jackson hole. the meeting comes amid all the talk of when the fed will start tapering the bond buying program

and also will be notable for who won't be there this year. steve liesman helps set the scene. >> reporter: greetings from jackson hole, wyoming, why the federal reserve gathers every year for the economic retreat on monetary mpolicy and the econom. there is a high but not unprecedented level of uncertainty surrounding this meeting. every four years they get together with uncertainty about who will be the fed chairman. in 2009, whether president obama would reappoint then fed chairman ben bernanke. and then four years before that, it was who would succeed alan greenspan. this year, it is who is going to replace ben bernanke and there is two leading candidates. janet yellen, the vice chairman now and larry summers, the former treasury secretary. both have their pluses and minuses and the leading candidate here thought to be larry summers. a big difference this year is the fed chairman will not be attending. neither will the head of the european central bank mario

draghi. other top fed officials will be here like bill dudley, the president of the new york fed, jim bullard from st. louis and john williams from san francisco. along with christine la guard, the head of the imf and central bankers from around the world. some big topics this year will be whether or not quantitative easing is working and if it is not working, what the federal reserve should do instead. also, is the fed communication strategy adequate? the conference begins with a dinner and then academic papers and discussion over the next two days. and i think one thing i'll be listening for is whether or not the federal reserve believes the economy is strong enough to reduce stimulus for the economy as soon as september or whether or not that will happen later. >> steve liesman. joining us on the phone from jackson hole is neil irwin at the washington post. and still with us is jerry wetman at oppenheimer funds. let's talk about whether the markets should actually care

about the jackson hole meeting this time around, given the very long absentee list. what do you think? >> i wouldn't expect it to be a major keeper of news the way it has been in the past. >> go ahead. >> sure. it is funny, the -- in the years past it has been this kind of earth shaking thing where there is clear guidance on where the monetary policy is heading. there is going to be academic talk about what is the new consensus of what is going forward. we had an extraordinary intervention over the last several years, now kind of a moment to reassess. is qe working? is forward guidance working? what is the general consensus of the future? >> jerry, let me bring you in.

do you care about jackson hole this year? do you think the markets were? >> i don't think in the short-term the markets should care much about what is happening in jackson hole. here is what i think is implicit and what i see on the agenda at jackson hole. not just is quantitative easing working but what are some of the unintended consequences. you get that in the title of the session, the global impact of extraordinary monetary policy. so one of the things i think investors should be paying a lot of attention to, for example, look at what is going on with emerging market bonds and currencies recently, are there some unintended consequences of quantitative easing in the major global economies, and what will happen as that stimulus is withdrawn. where should we look for and we know they're going to be there, where should we look for parts of the market or economies that could be disrupted by where this happens. that's the most important thing. it is not going to affect how the market trades may be tomorrow, but it sure should alert us as to what we should be

watching over the next several months. >> neil, back out to you, i want to once again focus on what is going to be happening in iningn hole. if we're concerned with future policy, we'll also have to think about who will be the next fed chairman or fed chairwoman. you say that this decision will be made based on group think. who will it be based on that? >> i think all the evidence is pointing towards president obama and the people close toast him on the economic issues, larry summers right now. i think it is becoming more of a -- a political calculus is the -- is the pullback they will face. others on the left in the united states, is it worth appointing this guy who has plenty of enemies, if they think it is worth it, they'll pull the trigger on that. janet yellen is only of the

major candidates expected to be here in jackson hole in the next couple of days. i expect she'll lay low and she moderates one panel but doesn't have a speaking role. i think we're in a strange season where all the candidates are kind of keeping their head down and see how it shakes out. but i think all the evidence is it is point toward larry summers now. >> yellen will be there. she's only going to be moderating a panel. yellen is certainly seen as the more dovish one. and president obama made it very clear in the past he wants someone who would also be looking out for asset bubbles. so, again that would point to larry summers, right, because she wouldn't be too concerned about that, what she would be concerned about is certainly unemployment, neil. >> i think certainly in -- i think that's probably true and also true in the view of white house and people, you know, only really matters what one person thinks, the guy in the oval office. interesting, just the turmoil the last few weeks in the global market, emerging market, india,

i think that's been a reminder, it is a reminder that, you know, you want someone who will pay attention to the side effects of unconditional fed policy and has experience to respond well if there is a true crisis. that said, i think the white house is already leaning toward larry summers before we saw this latest volatility in the emerging market. >> all right, jerry, thank you so much for joining us today, jerry wetman there. brazil's central bank president alexander tombini canceled his trip to monitor the markets. over the last 30 days, the real dropped by almost 10% and the central bank has been forced to intervene and the currency market. and reports suggest the brazilian government is going to revise down its 2014 growth forecast. current projection to be slashed to 2.5%. neil, do you think the fed will possibly push out tapering

because the big sell-off that we have seen in emerging asia right now or in emerging markets overall? or is this exactly what the fed wants to see with investors taking some froth out of the markets? >> you know, it is funny, all the things, it is what they want to see unless it goes too far. i think, you know, this resurgence of emerging market strains and the way it has been tied to the tapering and talk of tapering qe, i think it has to make them wary and realize there are going to be some side effects, so pulling out the extraordinary accommodation. i think it maybes them a little slower on the trigger finger to start the tapering in september. and in the minutes yesterday, got no real clear signs on whether they're going to pull the trigger on that in september or wait a bit longer. i think it will be really close call. >> neil, thank you very much for that. before you go, where is everyone gathering for dinner tonight? is it the snake river grill or what is the new hot spot in

town? >> there is only a couple of options and i think tonight will be first special dinner. everybody will be in one big room. i think the blue hair lounge is the little bar where people end up after the official dinner. >> that's good to know. maybe we should be heading there to, you know, overhear some of the fed talk. thank you for that. neil irwin from the washington post. let's look at today's other top stories. wells fargo cutting 2300 mortgage related jobs as the pace of refinancing activity has slowed as interest rates rise. the cuts represent more than 3% of the bank's consumer lending workforce. wells fargo is the largest u.s. mortgage lender and is considered a bellwether for the housing market. the job cuts could signal the bank believes the mortgage market is headed for a dive. refinancing made up more than 70% of all home lending in the first half of the year. that since dropped to 50%. wells fargo shares in frankfurt up about .8%.

the s.e.c.'s enforcement staff reportedly investigating the cause of the trading glitch at goldman sachs on tuesday. the bank is assessing the financial damage from the bad trades, which reportedly could cost it upwards of $100 million. reports say an upgrade of an internal system affected trading of single stock and etf options with symbols beginning with the letter h through l. goe up the by .4%. sear and other retailers reporting earnings today. will the retail giant tell the same story as other rivals. the consumers were holding back on spending. we get a preview next.

these are your headlines this thursday morning. positive data for europe's private sector, but a growing germany is dragged by a slowing france. the fomc minutes gave little for markets to chew on. now jackson hole and jobless claims come to the fore. with all the backdrop of a spy thriller, bo xilai's trial is under way. the chinese politician accused of bribery and corruption. hewlett-packard's recovery plan appears to have stalled. third quarter revenue fell 8%

and earnings came in at the low end of analyst estimates on declines in the company's pc, printer enterprise and financial services businesses. on the conference call, ceo meg whitman said she no longer expects revenue growth this year, noting the continued challenges in the pc and enterprise market. shares fell some 8% in after hours trade. the rush of u.s. retail earnings doesn't let up with several big names set to report results. courtney reagan has more. >> good morning, carolin. sears holding reports second quarter numbers before the opening bell. the company which operates both sears and kmart stores is forecast to post a wider loss, $1.10 a share. last year the company announced plans to return to profitability by aggressively cutting costs and inventory and selling off assets and spinning off some

others. sears was considering selling its protection agreement business, which sells customer service contracts. but sears continues to struggle with its stores as its middle income shoppers have been hit hard by the slowly recovering economy as well as the payroll tax hike that took effect in january. critics say the company hasn't done enough to invest in its stores to compete with walmart and target. sears posted six straight years of declining same store sales. shares are up 4% year to date. they have fallen 27% over the past three months. the float is very small. gap reports second quarter numbers after the closing bell, calling for earnings of 63 cents a share, up from 49 cents a year ago. earlier this month, they sell sales improved in july and shoppers responded to its fashions. but analysts will be dissecting for comments from management on how consumers are behaving in light of economic pressures. gap shares performed well this year, up 37%. it is one of the favorite retail

stocks on wall street. manyland wouldare wondering if already priced in. >> thank you very much for that. international condemnation for the assad regime on allegations over chemical weapon killings, we'll get the latest in the syrian crisis after the break. [ male announcer ] i've seen incredible things. otherworldly things. but there are some things i've never seen before. this ge jet engine can understand 5,000 data samples per second. which is good for business. because planes use less fuel, spend less time on the ground and more time in the air. suddenly, faraway places don't seem so...far away. ♪

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a suspected chemical weapon attack left hundreds dead in syria. the french government called for the international community to use force if the allegations are confirmed. while germany is demanding syria grant full access to united nations arms experts. yousef is live in cairo with more. yousef, let's talk about the

american response to this. many people have argued they're dragging their feet, even though the so-called red line has been crossed. yousef? >> carolin, what do you expect the united states to do? that's what a lot of experts will tell you. at this point it made it clear as well through its spokesperson in the last 12 hours that they're only going to deal with this with their international partners. and that includes the european union, turkey, whose foreign minister said all red lines have actually been crossed. there is a lot of stake in syria. the united states has taken this in a very cautious way. they do not want a full scale war. we had conversations in the senate and the house of representatives about the implications of a broader involvement in syria. and for some time there seemed to be some agreement that would be a disaster for the united states. it would be a drag on its military, which is already arguably stretched. and its economy, which is barely trying to recover at this point.

the way forward will be through the u.n. security council and they're going to continue to work that front. but also at the same time given the paralysis that, again, we have seen in the last 12 hours happening in new york, they will be working through other channels to continue pushing their interests, which at the moment lie with the rebels. the rebel groups and the free syrian army and the rest of the entities in syria opposing the regime are very disperse and that makes it very difficult to really take a unified stance and to open the tap, if you will, be it financially or through arms. carolin? >> yousef, thank you for that. a check of european markets which are getting a nice boost from the better than expected pmi numbers for the month of august. also, china hsbc pmis were better than forecast, coming in above the boom/bust line. the xetra dax rallying more up by 1%. and the periphery once again outperforming. in terms of u.s. futures, we are

expecting to see a little bit of a bounceback, taking futures or fair value into account and implied open signaling to a bit of a rebound for the dow, the nasdaq and the s&p 500 after that triple point drop for the dow yesterday, down by .7%. and here is a quick check of the ten-year treasury yield. it is, again, at those two-year highs at 2.91% on the back of the fomc minutes yesterday. so seemingly investors do factor in september tapering rather than october or december tapering. peter chevy joins us now. peter, do you feel the u.s. curve is priced for perfection? do you think it has steepened way too much? >> first of all, good morning. i can't really say whether it has steepened too much. one thing very clear to me or very clear to us, if you look in the u.s., the uk, the euro area, the sell-off we're seeing is

much more genuine than what we have seen in the past. you have better economic data, you have one of the central banks which is turning against further easing, turning the screws off a little bit, and that all makes for a cocktail for higher yields. not excessively so. but certainly the trend is there. and i think we're going to test the 3% in ten-year treasuries very soon. >> how soon is very soon. >> excuse me? >> how soon is very soon? >> over the next couple of weeks. >> okay. it is interesting that the dollar has been making a bit of a comeback over the last couple of trading days. we did see that correlation between the dollar and u.s. treasury yields break down last week, particularly the beginning of this week. do you think we're back to the between the two? >> if you look what happened, particularly last week when we

had the good european numbers, when the market was selling off it was driven way more out of europe. the treasury bund spread moved as was the case when the tapering debate started. i do indeed think that it is going to be the u.s. that has to drive this. it is going to be the u.s. which is significantly further advanced in both the economic recovery, but also in terms of the monetary setup. and, yes, indeed, might have repercussions for the effects market as well. >> japanese investors are now actually net sellers of foreign bonds after being net buyers. do you think they're waiting for a better timing to come back in and buy treasuries? >> well, maybe, because one of the things we also do know is when you look at the composition of the foreign currency portfolio, one of the biggest beneficiaries of the last 12 months or so has been france. and there has been a reduction there.

particularly in that bid. and that might benefit other markets, other foreign markets. on the backdrop of tapering, it is not entirely clear to me. i believe they'll come in at some stage. when that is going to be the case, it is hard to tell. >> peter, thank you for that. earlier we asked you, do you yahoo! or do you prefer google? this after yahoo topped google traffic for the first time in more than five years. alex tweeted he always uses google. ya-y yahoo! just doesn't cut it. that's it for today's show. i'm carolin roth. thank you for watching "worldwide exchange." i'll see you again tomorrow.

good morning, the global markets try to make sense from the commentary from the fed. hp shares getting punished after the latest quarterly report. and china begins what many are calling the trial of the century in that country. it is thursday, august 22nd, 2013. "squawk box" begins right now. good morning. welcome to "squawk box" here on cnbc. i'm andrew ross sorkin with joe kernen and michelle caruso-cabrera, joining us while

becky enjoys some time away. we'll start with the markets this morning. a lot to talk about. the dow is now on a six-day losing streak, stocks closing near session lows yesterday. investors tried to make sense of those fed minutes. stocks initially, though, fell following the release. they rebounded within half an hour, only to fall again. minutes from the last fomc meeting showed almost all the policymakers agreed that a change to the stimulus was not yet appropriate, but some hesitation remained. the yield on the ten-year treasury moved higher and you can look right there, we're now at 2.915. also look at u.s. equity futures this morning, see how things are setting themselves up after that roller coaster day. the dow with green arrows. would open up 11.5 points higher. the s&p 500 up a little over 2 points. let's talk about today's economic test for the market. we'll be getting weekly