welcome to "worldwide exchange." i'm calein roth and this is "worldwide exchange." governor kuroda wants to continue the momentum of strength. a different story in china. the pboc drains n $8 million from the money market with a surprise hint towards a move towards tightening. a jump in first half profit for bhp and pleases investors with hints of potential dividend

hikes and share buybacks. germany in strong demand by ireland, italy and greece. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. >> hello and welcome, everyone, to brand new edition of "worldwide exchange." ross westgate is feeling under the weather today. we hope he feels better soon. julia is still in rome. the pboc, nearly $8 billion was taken out through bond purchasing agreements. traders say the decision is a hawkish move, highlighting the pboc's desire to tighten monetary policy.

meantime, the boj is signaling it's ready to help japan's economy for the long haul. one day after disappointing data, the bank of japan held its policy view and kept lending steady. using a driving metaphor, the boj governor kuroda said the moves were like putting new tires on a car to make for a stronger engine. joining us now to discuss those moves is jeffrey anew, strategist at ubs. thank you so much for joining us this morning. it's quite interesting to see that jgb didn't really move that much. is the market to intent on the

fact? >> i think it is. they just had to give something to the market, but this doesn't mean that they're opening the way for more aggressive easing in april. so, you happen, markets may be a bit too overexpectant on what may happen with the overall qqe program. this is all by a minor component for the next big move in dollar/yen. perhaps we need to see a massive balance sheet expansion involving jgb purchases. perhaps, though, we still need more convincing from the boj. >> so basically, jeffrey, this is just a very good excuse to get back into the dollar/yen trade, below those 102 levels. we're back above that now, changing hands with 102.43. this was basically a great excuse to cover shorts? >> not only to cover shorts, although i think actually the em whiteout, a lot of the dollar slong positions were taken out, anyway.

so so people positioning in dollar/yen will thinking about putting a floor on the dollar/yen, i think. meem want to be long dollar/yen and now is a perfect time to do it. >> what concerns people the most is that we're not seeing any rush buying for personal consumption ahead of that consumption sales tax hike later on this year. does that worry you, too? >> i think it will worry the market. what they were counting on was front loading internal demand leading into the consumption tax hike and hopefully that will be enough to carry the economy forward. on top of that, we may get wage hikes, for example. not all the pieces are falling in place right on now. maybe that's the way the boj felt that in the wake of the gdp number. does this mean that they're

going to do more essentially with abe-nomics petering out, without any news on the red arrow, we need to buy into the government first. before that happens, i'm not sure they're willing to move aggressively. >> are you surprised by the pboc's move? >> what we see from the pboc is they knew january was going to be a strong number. so if you look at the run up to january and how they actually managed liquidity in january, in hindsig hindsight, our economists note that if we weren't tight about liquidity conditions in december and in january, maybe we would have had a bigger number, maybe it would have been 3 trillion in terms of social financing. so what they're trying to do is trying to send a message that they're still not willing to go back to the old wayes and to allow credit to be as cheap as possible. so they are trying to just warn

the market. you know, this was probably a one off month, the new year effects, of course. overall credit and growth is going to be kept at a moderate pace and they're not going to allow the economy to massively slow down in the near future. but it doesn't mean that will be cheap. >> we get the hsbc flash pmi numbers out of china on thursday. do you think that trend will confirm the fact that the strong export and import numbers that we saw last week were just an aberration? >> i think people will use as many seasonal adjustments and try to adjust to that number as much as possible. if you look at the gone going discrepancies, for example, between chinese exports numbers and hong kong import numbers from china, it's still quite large. if you look at china's export figures, december to january and compare it to the rest of the em, it begs the question, where is the external demand coming from? people are going to take chinese data with just a grain of salt. >> jeffrey, thanks for that.

you're going to stick with us for the next few minutes. meantime, let's take a look at the market. we have a little more than an hour into the trading edition. we lost a little bit of steam in the first half hour of trade. the stoxx europe 600 is now off by 0.5%. clearly we'll stay on to match the gains we saw across asia. markets were closed yesterday. maybe there's a little bit of caution in the markets ahead of the inflation numbers out of the uk and the zew print out of germany. i want to show you the markets one by one. the xetra dax off mildly by 0.1%. the ftse 100 off by 0.3%. we're seeing losses for the cac 40 and the ftse mib in italy. that is one of the indices that was still in positive territory about 30 minutes ago, but now also in the red. in terms of specific stories, a trio of stocks is moving on the back of waiting changes.

food retailers delhaize is trading higher after an upgrade with morgan stanley. moving on to inditex, citi cut its rating to neutral. citi is warning on the impact of weaker emerging market currencies on the group. and last but not least, centrica off by 3.4%, trading lower after a down break by ubs. analysts have cut their ratings to sell. quick check of the bond markets, 2.73%. ten-year bund stuck at 1.66%. we've seen options happening there. ten-year paper tomorrow. and the eye tall dwran yields, 3.6%, so close to those lows we saw last week on the back of the on political change happening in itly.

we see the dollar/yen surging on the back of the boj, expanding the loan program up by 0.5%. back above that 102 level. so we're moving off those two-week lows that we saw earlier this week. euro/dollar, pretty steady. up only around 0.11 % at 1.3722. the zew later on this morning and aussie/dollar just a touch lower. generally, we are seeing a dollar, which is moving off the six-week lows. let's check in on the markets in asia, as well. li sixuan is standing by. >> thank you for that, carolin. the japanese markets led the gains today ending higher by over 3%. and then the yen sensitive exporters got a lift thanks to the sudden advice in the dollar/yen pair. china markets came under pressure after the pboc's $8

billion liquidity drain. it just ended the session lower by 0.8%. but the hang seng index in hong kong managed to gain 0.2% today. and over in south korea, the kospi closed about flat. down under, the asx 200 ended higher by a modest 0.2%. australia's earnings season was on a roll today. bhp billiton climbed to a one-year high up over 2% after reporting a better than expected 31% rise in first half profits. meanwhile, fortesque miners rose 2.75%. in china, shanghai's pharma jumped over 8% in shanghai. it's gained almost 4% in hong kong.

and this is after the company became the largest shareholder of shareholder chindex. back to you, carolin. >> thank you so much for that. we're going to speak about bhp's numbers later on in the show. also coming up on today's show, iran kicks off its latest round of talks about the nuclear program. we've live from vienna to ask if anything can be achieved this week. singapore is taking a note from california on how to deal with water shortages. the orange county water district has won the top prize at singapore water week. find out what their big idea is at 10:40 cet. later, we head out to the big apple where the new york toy fair is getting under way. find out what toys kids will be pestering parents for this year. that's all coming up after a short break. we needed 30 new hires for our call center.

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greece's finance minister claims the nation's economic reform program was on track. >> everything in the economy goes well, if the fiscal developments, the real economy, the government is committed to pursue the remaining reforms according to the mou and the mefp. so everything is on track. >> has -- >> we managed to turn around the economy, a very difficult situation. so now i think we can attend the future more optimistically now. >> peter schiegel joins us now. peter, thank you so much for taking the time. last year's troika visit was disrupted. it was disrupted over differences on how to plug the budget gap for this year. 1 billion euros. have those differences been bridged now? >> no, they really haven't.

to be honest with you, we heard a lot of happy talk yesterday, both from the greek side and the euro side for this new mission heading into monday. there was a lot of expectations that they were getting close to a deal. but i must say, when you talk to the staff people behind the scenes, there is a lot 06 frustration not just on the fl fiscal side. what's $1 billion euros between friends? it's much more on the structural side. there's less than half of the structural economic reforms the greece government has committed to by now. less than half. if they don't move on that, there are various elements on the troika that do not want to sign off on this review until all this talk about a deal in march is still very premature. we'll see the troika go to greece next week and i think we're going to see a one or two-week fight going on with possibly a real chance of failure. so i'm not as optimistic as some of the happy talk we were hearing from the euro group

yesterday and stenarous. >> do we actually have a timetable for when we expect further aid being disbursed to greece? >> we don't. the only real deadline we have is a rather bill 10 billion euro bond that comes due in may that's due to the ecb. so basically, neither side has an incentive to have a deal before may. the other thing, if you remember, we're coming into election season here in europe. there is no incentive on either side to make it -- to have a fight break out in that april/may time frame. so there may be an effort to taper things over until after the european elections, after talk of raising the amount t-bills that can be issued, maybe roll over this bond in may. but you see divergent interest now. the greek government saying, look, we have a primary surplus. we don't need your aid. and you hear the europeans

saying if the greek res going to be difficult, why should we strike a deal with them? it's gotten nasty. it's the first time we've really seen this evolve into this nastiness on both sides, i think. >> peter, stay with us. i just want to get the latest on italy. italy's incoming prime minister has been given a mandate to form a government, but ratings agency fitch warns he faces the same challenges as his predecessor enrico letta. ollie rhen is saying he is confident in the new italian government's plan. >> i am confident the new government will aim at tackling the problems of economic competitiveness of italy and public debt. and i trust that the italian government will continue to pursue economic reforms and

maintain lining fiscal consolidation. >> julia chatterley is standing by in rome. we're still got peter with us from brussels. julia, we know about mr. renzi's four-point plan for italy. we know how the eurozone, how the eu stands on rome and on italy. but what about mr. renzi? what's his stance versus the eu? it's quite interesting, carolyn. he has actually said in the past that he doesn't believe italy is sticking to the 3% deficit is the right way to go. he believes there should be some flexibility there to introduce and allow the structural reforms. so it makes his choice of an economic minister crucial for whoever has to come to brussels on a monthly basis and negotiate

and talk to those people there. but what we're focusing here, on, over the next few days is the critical elements of pulling a coalition government together here and deciding just who is representing what in the cabinet. and then we'll get a great sense of leverage we've had, what concessions he's had to make to the individual parties. we know the new center right has suggested that without them, this coalition government isn't going to go ahead. and what we've heard in the last couple of days, and even though the night is people who we were hoping to see take part in this government, the likes of lucritzio, she's allegedly reluctant to join this government. we've got reports of a similar story from the former ecb members. the big question is what is this cabinet going to look like? and as would have been discussing for the last few days, irrespective of on how this cabinet and the coalition looks, it's going to face the

same issues as former prime minister enrico letta did. plenty of work on the jean here, carolin. >> peter, just how much risk still emanates from this crisis hot spots like greece, like italy? we know the omt promise has kept a list on yields and has really led to that rally in peripheral prices and peripheral markets. but don't we forget about this one little detail? we don't know if omt is legal. >> we don't even know if omt exists any more. we're in a position now where the markets are saying what the officials are. it's slightly weird. we've seen italian bonds basically at eight-year lows, about 3.8 on the ten-year here. there's a lot of nervousness about renzi for exactly the reason your correspondent just pointed out. he seems to not want to live up to the 3% target.

if you read around the lines, his message was clear, you must live up to this and there's no fooling around. they blame omt. they say, look, ever since draghi made his do whatever it takes announcement and you saw the yield of all the peripherals rally, there has been no pressure on italy to reform. they've done nothing. they've returned to their sort of back room dealing. you know, they let the government, as well intentioned as they were, basically did nothing for ten months. again, the tail end of the government they would argue for six months didn't do anything. so a lot of nervousness on the -- side about the lack of any urgency in many of on these deposits, including greece, including italy to do the reforms that will spur growth in the future. >> peter, thank you so much for your thoughts this morning. and, of course, i want to thank julia chatterley who has been

following the story out of rome and she'll be back in this seat very soon. meantime, the europe periphery is back in the driving seat. with big gains in countries like ireland, italy and greece. stephane is in paris but the latest on frankfurt for those numbers. how are the french carmakers fairing? >> they gained market shares last month showing a 4.7% increase in new car registrations. posted is more than 13% increase in january and that explained the positive market reaction that we have today in paris. there's another reason why we should focus on the car sector in france. peugeot is about to confirm its alliance with the chinese carmaker. yesterday, the members of the family approved the alliance

despite the opposition. the chairman of the board. the mranl is now expected to be approved by the vote of the company. the two carmakers are expected to sign mou, a nonbinding agreement today before the official announcement that we are expecting tomorrow when peugeot will vote its full year earnings. over to you. >> for volkswagen, it's quite a surprise. the company has seen a whooping 8.9% higher car registration than a year ago. and that is actually quite surprising across the board. while its premium segment audi cars are up by 8.5%.

their value brand scoda is outperforming that by an increase of on more than 10%. so maply the demand overall is driven by more or less compact cars, it seems, and a little bit by the luxurious settlement. but looking at the car ridge administration numbers of daimler and bmw, they came in rather disappointing. we even have ady cline in car registration when it comes to the daimler numbers of 0.6%. bmw can only add a little bit of new cars in comparison to last year's january, up by 0.5%. but that is actually just backs the story they're hearing from the carmakers, as well, when we heard about that quarterly result. for example, daimler was then

also saying that european markets are still not doing too good. they are doing a lot of business. with that, back to you, carolyn. >> thank you so much for that, annette. mean time, "the tonight show" has a new but familiar host. jimmy fallon made his debut monday night. fallon takes over from jay leno and brings "the tonight show" back to new york for the first time since johnny carson moves it to los angeles years ago. fallon's first guest including will smith and u2. >> i can't believe this is really happening. i want to say thanks to my fans for all their support. and to my buddy, who said i would never be the host of "the tonight show" and you know who you are, you owe me $1100 bucks, buddy.

[ applause ]. thank you, buddy. >> all right. it seems as though that didn't really work forty jimmy fallon. what's the worst step that you've ever made?

if you want to join the conversation here on "worldwide exchange," get in touch with us, worldwide@cnbc.com, via twitter @cnbcwex or on direct to me @carrollincnbc. meantime, bhp impresses inesters with a dividend hike and a share booik buyback. where is all the cash coming from? all the details, next. hmm, fifteen minutes could save you fifteen percent or more on car insurance. everybody knows that parker. well, did you know auctioneers make bad grocery store clerks? that'll be $23.50. now .75, 23.75, hold 'em. hey now do i hear 23.75? 24! hey 24 dollar, 24 and a quarter, quarter, now half, 24 and a half and .75! 25! now a quarter, hey 26 and a quarter, do you wanna pay now, you wanna do it, 25 and a quarter - sold to the man in the khaki jacket! geico. fifteen minutes could save you... well, you know

sending a strong message, bank of japan governor kuroda boosts lending in tokyo by expanding lending to bank saying he wants to continue the momentum of lending strength. the pboc drains nearly $8 billion from the money market. a surprise move hint out of move towards tightening. bhp digs its way back to recovery with a jump in first half profit, also pleasing investors with hints of a potential dividend hike and share back bye. back in the driving seat, new car sales in europe rise again in january driven by strong demand in ireland, italy and greece.

all right. we're on data watch. we just got uk january uk monthly inflation. take a look and they came in slightly lower than forecast. the month on month figure saw a decline of 0.6%. we were expecting a de-kline of only 0.5%. if you look at the annual inflation print, 1 is.9%. that to me seems more in line with expectations. let's take a look at how sterling/dollar is performing on the back of this. quite a big fall, down by 0.3%. having said that, though, the pair was down even before the numbers came out. we did see profit taking on the back of the four-year highs that we saw going into these numbers, especially after the inflation

report last week. let's get back out to jeffrey. what do i make of the numbers? do you think it will push back rate hike expectations? >> first, the boe will be quite happy with itself after coming in for criticism. and they're targeting slash now with this weak inflation number seems justified. however, i think sterling will be very interesting here. as david miles noted overnight, the gains are not trivial. they might want to do something about this. >> what do you do with cable? do you simply want to buy on the dips? still, this is going to be one of the first major banks to hydrate. >> there will there will be a tendency to buy the debt because if you look at the uk asset prices, if you strip away sterling from here and if you

strip away inflation from here, i believe housing prices are going up by 5.5% year on year. those are the latest numbers. equities are doing fine right now. so from an international perspective, then sterling actually looks to a very good investment destination. and if money comes in by the fdi route, into the housing market, it might be pretty hard to sell. i still prefer shorting the euro rather than buying cable. >> is it important given that the boe now disintegrated the link? >> i think it is important. that is one of the key ones in terms of targeting flat in the economy. if you look at wage growth, if that rises above expectations due to a tightening in the labor market, then you could see actually cpi, especially core

cpi start to rebound and that would change the boe destination, as well. less important than in the past, but still very important nonetheless. now we've got 20 plus variables to look at. others would say consumers and businesses won't understand that phase two. where do you stand on this? >> somewhere in between. with the ability to model the same variables that the bowe are targeting, maybe they can follow the bowe's path, as well. so it really depends on who they're targeting. >> jeffrey, thank you for your time this morning. also want to bring you other data points out of the uk. we saw january ppi down 0.9%, on the month, down 3.9% on the

year. and we also got uk house prices up 0.9% on the month and year on year we are seeing a very strong figure of 5.5%. all right. let's get back to the market. let's take a check off where we're standing right now almost two hours into the trading session. yesterday we were higher for the second day in a row, but this morning the ftse 1 is 00 is off by 0.1%. the xetra dax almost flat and the ftse mib, which had seen outperformance earlier on in the session, which had seen a nice rally on the back of the political change in italy is now down by 0.5%. moving on to the bond market, we are seeing gilt prices. the gilt yield looking like this. gilt, 2.75% of those three-month lows that we saw earlier. the ten-year bund at 1.67%. the ten-year treasuries, back

online at 2.73%. actually saw yield rising for a second week in a row last week. let's get back to the earnings stories. pandora trading higher after posting an 83% just in fourth quarter profits. the firm impressing investors with a share buyback program. casino is confident that shares will grow this year on the strength of emerging markets. gross in brazil offsets a weaker home market and shares are up nicely by 3.6%. meantime, quite a different story for intercontinental. the world's largest hotel group says it has plunged due to increased tax charges. shares of bhp billiton getting a

lift as earnings beat the streets, surged to 7.8 billion. break it down earnings from hp, iron ore businesses jumping by 60% of profits of copper and coal operations really increased. its main loss share buyback despite giving a cautious outlook on china. joining us now, paul gates, metals and mining. paul, thank you so much for taking the time to speak to you about bhp billiton this morning. it seems numbers were better than expected. they were going ahead with cost savings, trimming debt. is this now a return of capital story, a dividend, a share buyback story rather than an underlying mining story? >> well, look, i think it's the underlying mining story that gives rise to the ability to return to capital. so if we break down where the performance is coming from and where we get that expansion in free cash flow that stands

behind its promise for high capital returns, it's basically three fold. we saw iron ore production, metallurgical coming from bhp billiton. it's underlying target performance, targeting them multibillion dollar cost savings program. and it's the fact that the commodity price has stayed up strong every. so you add those three factors together and what you get is this very strong increase in ibda, $16.5 billion. at the same time, the cap ex expense coming down. >> it doesn't cease to amaze me how the bhp billitons of this world, they can continue to produce stellar earnings and they can continue to up their production despite the fact that iron ore prices are steady or even moving lower. is this all about economies of scale? >> well, really, i think it's about economics, right? it's about the elasticity of the iron ore price. what comes down first? is it the iron ore price coming down or the volumes going up?

the iron ore price isn't moving in isolation here. it's because we've got record volumes from rio tinto, bp billiton, fhp and the like. how much do we lose on price for each unit of volume that we deliver to the market? so far, the equation has worked out for the miners, that they're gaining more in terms of that top line and at the same time those cost in productivity improvements are expanding their ibda margin. >> but it's only working out for the biggest miners for the ones that are the most cost efficient. >> if you've got economies of scale, if you've got those logistics of systems for people like rio, bhp, that really gives you the leverage to drive that car space. it gives you the leverage to drive those volumes. absolutely. those are the high quality names. quality and scale in mining often more hand in hand. that's why people play such an emphasis on talking about these tier one assets. >> let me ask you about the dividend bhp announced this

morning. they're only saying they're giving the market a dif dents of 3.5%. is this disappointing or are we simply going to see a delayed dividend increase by bhp in august? >> for me, i think the language that we saw this morning, the language, the discussions around the balance sheet and the fact that they're sort of keeping their pallet dry for later in the year, yes, i think that's how we should interpret that. i think it's indicating a preference at the moment. it appears rio is targeting dividend increases as a mechanism to return capital. i think we'll see from bhp billiton the likely of share buyback. so the same net result, a return of capital, slightly different timing and perhaps slightly different mechanism. >> shares of bhp at a one-year high, would you still see these levels? >> we think there's volume to come from these companies. 1.3 million pounds. another 200 tons of copper. the iron ore, again, 212 million tons versus a run rate somewhere below that.

we still see volume growth. clearly the more these stocks run, the less upside there is. yes, we're still buyers. >> paul, thank you so much for your time this morning. paul gates, senior research analyst mining and metal bernstein. the bank of japan is extending and expanding its loan scheme. >> hi, carolyn. the boj made the move in order to maximize the impact of stimulus measures and boost economic growth. two lending programs that offer cheap loans to commercial banks were set to expire in march. the fund was nearing its initial ceiling. the central bank will double theside size to $68 billion. it will reward banks that have increased their loans by allowing them to borrow twice as much money at low rates. but these measures, it hopes that commercial banks will use

the cheap cash to lend to businesses. on the other hand, the central bank left its main policy program unchanged. some expect the boj will take additional steps to curb the sales tax coming up in april. tokyo stocks soared and the yen weakened further following the boj announcement. the nikkei 225 recognize 1.2%. >> thank you so much for that. meantime, gun clashes. >> bangkok have left a police officer and a demonstrator dead and more than a dozen hurt. authorities are clearing out anti-government protest fights, arresting 100 demonstrators. police say one officer died after being shot in the head and others were hit with bomb shrapnel. meantime, thailand's anti-corruption body is filing charges against the prime minister over government's costly rise subsidy scheme. this as the leader blamed her opponents for the scheme's demise. some banks have withheld support fearing a backlash from the

opposition. snowstorms are causing tragedy across asia and south korea. an auditorium roof collapsed killing ten at a welcoming ceremony. authorities are saying the roof likely collapsed due to snow pileup. and in japan, the death toll from continued snowstorms has risen to at least 23. record snowfall res snarling air, road and rail services and slowing production at some japanese carmakers. meantime, let's give you a look at what's on the agenda for tomorrow. corporate earnings for woodside, brambles and fortescue. and the ceo of captainland will be on cnbc tomorrow following fourth quarter earnings. still to come on the show, chinese toys are moving on up

from the east side and increasingly looking to the west for their travel destinations. up next, we'll look at where and how china's travelers are spending their cash. iwe don't back down. we only know one direction: up so we're up early. up late. thinking up game-changing ideas, like this: dozens of tax free zones across new york state. move here. expand here. or start a new business here... and pay no taxes for 10 years. with new jobs, new opportunities and a new tax free plan. there's only one way for your business to go. up. find out if your business can qualify at start-upny.com

singapore is taip taking a note from california on how to deal with water shortages. the orange county water district has won the singapore water week's top honor for its groundwater replenishment system. joining us now is michael from orange county. michael, thank you so much for joining us today. congratulations on that prize. how -- what sets your technology apart from others? >> well, our technology really started in the mid 70s. and i think that that is where we're initially acknowledged, anyway. what was unique back then was we were one of the first to use reverse os moos sis to treat wastewater or used water. and we operated a 60,000 cubic

meter per day facility called water factory 21. then we found the need that we needed to expand that. we needed to expand the water supply into the basin, so we built the groundwater replenishment system and we upgraded the technology a little bit. what we did is we treat the used water using reverse osmosis, and uv hydration. by the time it's gone through this process, it's of near distilled quality. we put that back into our groundwater basin and it becomes a source of potable supply for the basin. it helps gives a reliable source of water that we can depend upon. >> this is topical, especially for california which is seeing some of the worst drought in decades. i wonder how much state funding do you receive overall and how difficult is it to get funding for your technology?

>> with the original project, we invested $481 million. we were fortunate at that time to have received $92 million in grant funding. the state of california had a water bond and we applied for and received $67 million from that water bond and 20 million dollars of funding from the federal government through a recycled water program and then another 5 from the state. so we were fortunate at that time to have that funding. what we're doing now also, we're expanding our facility. the facility, the groundwater replenishment system produces 265,000 cubic meters of water per day. .it's the largest indirect potable resource project in the world. we're currently expanding that up to 380,000 cubic meters per day. with the expansion, which costs $142 million, we only received $1 million in grant funding. the rest we decided to raise our

rates or our tariff toes help support it because we needed the water supply so desperately. >> michael, just how difficult is it to replicate this technology across other areas in the world? >> well, it's not difficult at all. in fact, what has happened, our project went online in january of 2008. and what we've seen is a tremendous amount of interest within particularly the state of california. right now, the cities of san diego, los angeles, monterrey are looking at doing similar indirect potable reuse projects utilizing the same technology. >> thank you, michael, and kralgz owes that project. china's trade surplus jumped in the month of january, but one of its hottest exports is not included in that number. it's tourists.

spending on behalf of chinese travelers is expected to hit $513 billion in 20 .13 according to a rt ro by the ft. that is almost equivalent to the total household consumption in turkey. joining us now to discuss that report is matthew. that was a report written by you, not by the ft, if i'm correct. >> yes, that's correct. >> since 2008, we've seen a disconnect between consumer spending and income sales and gdp growth. this is very much ebb line with that. we've seen incomes continue to rise, they continue to spend, and this boom in outbound

tourism and just to put it in context, we estimated the total outbound tourism spending this year will be four times total household consumption in nigeria. it's greater than total household consumption. so this is an enormous trend. we see this is very much a sus sustaining thing now. >> those are huge figures. you also say in your report that chinese travelers are more experienced now, they're more confidence, and they're changing their traveling habits. how so? >> whereas in the past, travelers, official is it was a first overseas trip, will travel in a large tour group with -- their itineraries would be manned out for them. increasingly now, the majority of travelers that we surveyed plan and book their travels themselves. not a key shift that we see. whereas in the past, a lot of

overseas trips were sent to be glorified shopping trips to take advantage of the lower price, especially luxury goods overseas. nowadays, our experience becomes more experienced, we see they're spending more on accommodation, more on foods, essentially more on enjoying the experience of the destination they're in as opposed to shopping with sight seeing on the side. >> chinese tourists are often accused of lacking etiquette, they're accused of being rude. are they changing in that respect, too? >> i think they're changing rapidly. as tourists become more experienced, you also notice within china itself, there's been massive changes in, you know, sort of culture, interaction, social et quit. so you still hear a few horror stories, but on the whole, what you now have is very sophisticated, very independent, very experienced travelers who

increasingly don't fulfill the stereotypes that they're labeled to be. >> when we see chinese tourists in europe, especially, we often see them going into luxury stores, buying handbags, buying swiss watches across switzerland. that thend is going to be lessening. is that a negative? >> i don't think so. the number of tourists traveling abroad continues to grow and they continue to make more trips. but what we're seeing is because they're making more trips, they're not spending quite as much on each trip. but the overall spending is still increasing. and the other thing to say is that it should continue to benefit a broad cross-section of brands. and we see this within china, as well, there's an increasing preference for some of the lesser known brands, almost sort of louis vuitton and gucci have become too mainstream. now people are looking to the niche brands, the lesser brands.

so that provides opportunity as well as the luxury houses with their smaller brands. so maybe they can start to pick up the slack from the well known brands. >> thank you so much for that, matthew. the tonight show" has a new but familiar host as he takes over for jay leno and brings "the tonight show" back to new york for the first time since years ago. his first guests were will smith and u2. he had several other friends welcome him to his new home. >> i can't believe this is happening, i'm really sitting here. i want to say thank you to all the fal fans for all the support. and to my buddy who said i would never be a host of "the tonight show," you know who you are, you owe me $100, buddy.

[ cheers and applause ]. >> now, what's the worst bet that you've ever mete made? if you want to join the conversation here on "worldwide exchange," get in touch with us, worldwide@cnbc.com, @cnbcwex or direct to me. it doesn't have to be a financial related market bet, it can be anything you want. tell us about it. meanwhile, can the italian leader renzi -- the country's debt profile? we cross to rome, later.

welcome to "worldwide exchange." bank of japan governor boosts markets in tokyo by expanding lending to banks, saying he wants to continue the momentum. a different story, though, over in china. the pboc drains on lending by draining nearly $8 billion from the money markets. the surprise move on a move towards tightening. sterling falls against the u.s. dollar as uk inflation falls below the bank of england's 2% target for the first time since june 2009. a mega merger could be in

the works as activists are reportedly in talk toes by rival forest labs. the price tag, $25 billion. all right. we're getting february zew german economic sentiment numbers. and it looks to be -- likes like this indicator below expectations. the german economic sentiment index, 65.5 points below a forecast 51.7. the economic expectations again, 55.7. the current conditions index came in at 50 versus 41 in january. yes, an improvement. it did come in higher than

expected. current conditions slightly better than expected. in terms of some of the commentary we're getting from the zew institute in germany, they say weak unemployment figures and damp indicators have cost concerns in the u.s. that the current economic upswing could lose momentum. let's take a look at the euro/dollar on the back of it is largely unchange. it is back above that 137 level we saw earlier on in the trading session. china's central bank has drained funds using forward purchase bond agreements. nearly $8 billion was taken out. traders say the decision is a hawkish move highlighting the pboc's desire to tighten monetary policy. meantime, the boj is signaling

it's ready to it held its economic view and kept policies steady. using a driving metaphor, the boj governor told reporters that the moves were likely putting new hires on a car to make the most of the strong engine. let's check in on how markets are reacting in asia. sixuan is standing by in singapore. >> we definitely got tires on the car in the japanese market. the nikkei 225 ending higher over 3% after the boj extended the loan scheme. the shanghai composite saw profit sharing down some 0.8%

while the pboc drained nearly $8 billion from the banking system. while the hang seng index managed to end higher by 0.2%. south korea's kospi closed about flat and down under, the asx 200 gained about 0.2%. australia's earnings season was on a roll today. bhp billiton climbed to a one-year high up over 2% after reporting a better than expected 31% rise in first half profits. meanwhile, rio tinto and for ta skew metals bounced back. fosun pharma gained over 8% after becoming the largest shareholder.

that is a recap of the asian markets. back to you, carolin. >> sixuan, thank you for that. u.s. markets closed for presidents' day yesterday but looking at futures now for the dow, the nasdaq and the s&p 500 were looking at a fairley muted to slightly negative start to the trading day. but don't forget that last week, u.s. markets saw their best percentage gains on a weekly basis in 2014. with the dow and the s&p up 2.3%. the s&p is just 10 points away from the record high and the nasdaq up at the highest level since 2000. let's take a look at the ftse cnbc global 300 and see how it's faring. we are close to session lows, as a matter of fact. selling pressure is

accelerating. the ftse mib responding to the political change in italy is now losing ground, down by 0.6%. the xetra dax off by 0.3% and the ftse 100 doing a little better than best, only down 0.15%. uk inflation numbers coming in slightly below expectations. now, the yearly inflation is at 1.9 the%, and that is below the zee target. sterling/dollar was down even before we got tin flagz numbers down. maybe some profit taking here on those positions from when we saw those four-year highs. euro/yen, up 0.5%. and euro/dollar is back above

that 1.37 level potentially after those zew numbers. meantime, iran kicking off its latest round of talks with world powers over its nuclear program. but both the u.s. and iran have warned observers not to expect a deal. we've live from vienna later to ask if anything can be achieved this week.

these are your headlines this morning. the nikkei closes up more than 3%. but china central bank drains in lending by draining nearly $8 billion from the system. sterling drops as uk inflation falls below the bank of england's 2% target for the first time since 2009. let's take a look at some of today's other top stories. there's been a lot of action in the m&a world. for up to $25 billion. the deal could be announced as early as today. the combined company would offer a wide range of generic and brand name drugs. actavis has been buying up

specialty brand drugs which have higher margins than generics to boost profits. let's take a look at shares in germany. they're up by more than 22%. meantime, apple's m&a chief reportedly held a secret meeting with elaine musk last spring. the talks occurred at apple's headquarters, but neither company will confirm that meeting. nothing came out of the talks. the chronicle reports appearing is eyeing the medical device business, especially technology, to redifficult heart attacks, a signal apple is looking to expand beyond iphone ones and ipads. former igco hank greenberg is back on the acquisition trail. his company, star investment holdings is buying investment

earnings for multi plans. the deal is worth $4.4 billion, but the terms were not disclosed. multi plan, opened by silver lake and bc partners manages a claims process for big health insurers. this will be a break through. we're joined now by phone from savannah. ollie, why are they bringing down expectations? >> good morning, carolin. this is the supreme leader's mo. before any of the talks, you always bring down expectations. let's not forget he has a deep seated mistrust in the united states. so he probably doesn't think these talks are going to work. he's setting himself up for the future for if these talks to tail, he can turn around and say, listen, i told you so, i understand the die many na eks

of what's happening here. the u.s. delegation here is also very, very cautious. they gave us an off the record briefing last night and told us this is going to be a complicated, difficult and lengthy process. the stakes are extraordinarily high and the devil is in the details. so both sides are being cautious about these. nothing is agreed until everything is agreed and there's going to be a lot of ups and downs. having said all that, these two sides are talking in a way that they've never spoken before. last night, a state department official told us when we have problems with our iranian counterparts, we e-mail them. they've communicated in ways they would have never communicated under the previous regime. although this is a very important and difficult healthy process of negotiations, this is probably the best time that they've had so far of resolving these issues. i don't think we're going to get

any sort of break through in geneva. they're still talking, still trying to iron out the details. and there are going to be many, many more rounds over the next six months to a year. and until that time period is over, i don't think we're going to know exactly where both sides stand. they don't trust each other. they're not particularly phoned of each other. but they've given each side about a year to try and complete these thoughts and see if they can emerge as some sort of conflict. carolin. >> thank you so much for that, ali arouzi, our tehran bureau chief. meantime, matteo renzi has been given some challenges. julia chatterley is in rome. julia, if mr. renzi facing an uphill battle here, a battle that he can only lose? >> well, carolin, i think everybody agrees that he's

facing an upward battle here. but some of the comments i've had in the last 24 hours is if anybody here in italy can, matteo renzi can. but the first thing that he has to focus on right now here in rome is the negotiations to pull together this coalition and that's what we want to see now. what is his cabinet going to look like? what concessions does he give away to pull those together? then we'll start to get a sense of just how able he is going to be able to enact those reforms that we're starting to see? we've seen a reluctant to move away and be part of this cabinet. for now, that's what we're waiting for here and those discussions today. >> julia, thank you so much for that. still to come on the show, we talk about the top toy trends. which of the 150,000 toys on display at the new york toy fair will be making the big bucks for the world's manufacturers and retailers? we'll be back in two. first the cookie at check-in...

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welcome back to the show. the s&p 500 is seen down by 1.7 points. the dow jones seen up by 5 and the nasdaq is seen flat. remember, markets were closed yesterday for the presidents' day, but last week, u.s. stocks saw their best weekly performance last year. the dow jones and the s&p up 2.3% each. let's give you a look at what's on today's jean in the united states. the monthly survey sentiment from the national association of home builders is out at 10:00 a.m. eastern. as for earnings, coke reports before the opening bell. we also get numbers from duke energy, medtronnic and norwegian cruise line. after the close, we hear frommer ba life, panera bread and potbelly. there are forecast was featured

in a cover article in barons this weekend. they cite the ongoing u.s. housing recovery for their bullishness, saying future demand has been understated. joining us now is martin. where do you stand on this? most economists are now downgrading their economic forecast at least for the first quarter down to 2%. 4% really seems like a big outliar. which camp are you in? >> well, 4% may be in the short-term would seem a bit ambitious. but, you know, we're still in the camp that we're getting over the issue of the great recession. so we're looking more at more tepid growth than that. >> martin, why did the markets rally as much as they did last week? i was just saying the s&p and the dow up by a little bit more than 2%.

i mean, is it really about just bargain hunting? is it about corporate earnings or is it something else that i'm missing out on? >> well, coming into this year, remember, we had a really powerful move. optimism was very high. all the indicators, the short-term indicators on sentiment were portending that we would probably have a pullback if not a correction. so certainly, a lot of the fast money has been taken out of this. and this is a healthy sort of correction that we've had we've experienced. not really a correction, just a mild setback. but the thing that we find interesting is there are sectors of the market which have pulled back and great businesses selling at great prices. >> you say there remains opportunities in the u.s. stock markets, but much more

atransactive. where is that and where so you see value? >> well, vam ewations, the u.s. market right now by about four or five different long-term metrics we've looked at is the implied rate of return is somewhere around 3% to 4%. but we're in a powerful move that started 18 months ago. we could see the market move higher from here. other markets that we really like would be singapore particularly because you have exposure to emerging market growth and their market is very, very inexpensive relative to the developed world of europe and the u.s. >> okay. martin, thank you so much for your time this morning. martin, chief investment officer. make your own jewelry, kids rainbow loom has been named design toy of the year.

some 150,000 toys are expected to be exhibited at the three-day event which attracts an estimated 14,000 global buyers. let's talk to lora shack, phone as the toy insider mom. she joins us now from new york. lori, thank you so much for taking the time this morning. how important is this toy fair going to be for setting the trends for the rest of the year and for the crucial christmas season? >> well, this is it. this is the show to be at if you're in the toy business. now, the toy manufacturers have been working some other shows over the last few months, heading to hong kong and germany. but this is the first time the media is actually getting a first look at the toys that will hit the shelves this year. toy fair is a lineup of toys you'll start to see roll out now some during the spring and summer, but most definitely for the holiday season. >> so what are the big ticket items this year? >> there's a lot of things that will be under that tree. there's a number of trends that

we're seeing emerging. so one of the big ones that you'll hear everyone talk about this year is s.t.e.m. and that helps translating core curriculum in schools into toys. you'll see things like kinex, that's always been in the schools, now coming out with a line for consumers and to learn about things like solar energy. hex bugs, a popular brand with kids, has now developed a whole new line so kids can build clawboughts, robots and run them. you started out by talking about arts and crafts. so rainbow loom really reminded parents and kids that it's not always about technology. that a loom that was great for girls and boys was such a smash hit. so, you know, in our office, we say make it, wear it, share it. for arts and crafts, that's a

recipe for success. crayola has a great line coming out. one of the things i love is a bracelet making kit where kids are making pan dough doing pand. all about kids making it in that inspiration. >> lori, unemployment may be down and stock markets may be up, but i know a lot of consumers out there are still cash struck. how easy is it to be priced out of the peg market as a parent? >> you know what? there are toys for every single budget. so when you're talking about something in the arts and crafts category or you're talking about ride ones that may cost a few more dollars, there isn't anywhere that you can't go that you can't find something that's going make your kid happy. active toys will be a big trend once again this year. we want to make sure our kids are healthy. so, you know, for little ones,

we see companies like hasbro, playschool and fisher price putting out three in one-time items. and then you see a company that makes scooters for kids of all ages and they're introducing this year an streamline so that extreme sports fan. but, again, you're looking at price ranges. in, you know, $20, $30 entry mark. but it can go as high as $1 00 and more sometimes for a great scooter. >> lori, thank you so much. stay tuned, hasbro's ceo on will be speaking to "squawk on the street" team at 10:00 on a.m. eastern. meanwhile, heavy fog at the sochi olympics means some events were postponed, but there is still plenty of action. tom mackenzy has more. kuschner landed a near

perfect second jump to record a winning score of 134.5 points. australia's davis morris managed to secure silver and china's jia zongyong earned bronze. in the bobsledding event, the usa took bronze. russia's bob sled gold moves the host nation up to second place in the medals table with the netherlands sfalg to third. still to come on the show, coca-cola reports ahead of the open today. will investors be raising a glass to the iconic brand? we preview the numbers, right after this. change engineering in dubai, aluminum production in south africa, and the aerospace industry in the u.s.? at t. rowe price, we understand the connections

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welcome to "worldwide exchange." i'm carolin roth. these are your headlines from around the world. sending a strong message, bank of japan governor kuroda boosts markets in tokyo by expanding lend to go banks saying he wants to continue the momentum of strength. a different story, though, over in china. the pboc drained nearly $8 billion for the money markets to surprise hinting at a move towards tightening. sterling falls against the u.s. dollar as uk inflation falls below the bank of

england's 2% target for the first time since june 2009. mega merger could be the word from the drug sector. the price tag, $25 billion. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. if you're just joining in, thank you so much for joining us on the show. looking at futures, taking fair value into account, we're looking at a slightly mixed start to the trading day for the dow, the nasdaq and the s&p 500. only the dow is seen slightly higher. markets were out yesterday for the president's holiday. but last week, we saw impressive gains for the dow and the s&p. and the nasdaq, the highest level since 2000. so pretty much we ignored the

disappointing economic data points we got out last week. let's move on and tell what you european markets look like this morning. we are now stabilizing a little bit. we're off the session lows that we hit about half an hour ago. generally, we are seeing some profit taking after the rally that we saw last week. yesterday we were trading at two-week highs. i want to show you the markets one by one. the ftse 1 00 trimming its declines. the xetra dax is lower by only 0.11 is% and the cac 40 off by around 0.5%. so how do we make money in these markets? >> actually, it would be a good idea to avoid dollar trades for now. for example, if you like being short euro, this worked very well so far in the year. it has worked well because of the part of the trade. the euro part of the trade may work moving forward. like being sold, this is -- but loop well if we continue to see

a correction in the equity markets. >> we have been long portugal, short france for a while. that continues to bode well. >> people are thinking that perhaps it's not going to be that easy to ride the market this year. therefore, they are looking for a little bit more protection. they're looking for more equity market neutral funds. better as fundamental stock figures who are going to be really hedging everything on a lot more and trading market neutral portfolios. or we need a quantitative equity neutral funds. people feel safer that should there be hiccups on the road, they're better protected. >> let's get back to earnings. soft drinks giant coca-cola is set to release results before the bell today with investors

likely to be paying close attention to the volume growth of its main product, coke. nick modius joins us now on the phone from prince, new jersey. thank you so much, nick, and thank you for taking the time to speak to us. investors are looking for 46 cents on $11.3 billion. is that what you're expecting? >> yes. i'm pretty much in line with consensus. we're looking for coke and what they're going to say for 2014. our hope and expectation is given the weak 2013 they had on volumes, they're going to have some easier comparisons and a lot of headwinds that coke faced around the world, actually. we don't expect to repeat in 2014 such as pepsi incrementally spending a couple extra million dollars behind their brands. some issues with weather across the globe. we're hoping they would give some clarity under cost savings initiatives that they have in their way. do you think that 2013

deterioration on the soft drinks demand, is that the tart of a bigger strend? >> it's a great question. the soft drink category has been under pressure for several years now, especially in the u.s. and you're starting to see some taxes emerge on sugary drink like in mexico. the other thing to think about is the weather was pretty tough. i'm not a big fan of using weather as an excuse. if you look across the entire beverage landscape for 2013, most had a tough and challenging year. we're hoping the weather sets up easy comparisons for 2014. we hope coke can continue to gain market share as the category continues to struggle and that's how they're going produce volume volume growth. >> so what extent has coca-cola been hit by the weather, that we're seeing in emerging markets. there's a whole host of headwinds facing the likes of coca-cola now. >> yeah. in the end, you know, coke is a very aspirational product.

it's not a very expensive product if you think about it on a per can basis and there's still a lot of per capita opportunity around much of the world in terms of, you know, csd consumption by person. so i still thinks there's a good opportunity. i think coke is better positioned than most companies now. though currency is going to be an issue like it is for most multi nationals. >> thank you, nik, for inning us on the phone from princeton, new jersey. let's take a look at today's other top stories. goldman sachs has reportedly backed away from its electronic bond trading platform amid the challenges investment banks face in fixing their struggling fixed income businesses. while several banks have formed their own trading system, the financial times says those operations account for 1% of market share. goldman has put developments of its g sessions platform on hold after a rebound failed to bring in more business. goldman shares in frankfurt are looking like this, down modestly

by 0.5%. stallwood capital is a real estate investment trust from a former starwood hotel sales barry sternwick. they're in talks with banks, although that may not lead to an ipo. starwood capital has backside 30 billion in asset us under management including sea island gulf resorts in georgia. kick starter is the latest in a string of companies being targeted by hackers. and the site says no credit card information was compromised, but e-mailing addresses, phone numbers and e-mails were accessed. it says it's improved its security procedures since that attack but is urging users to change passwords. details on apple's sit down last year with the ceo of tesla

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dow jones reporting two former members of the group

pussy riot were detained in sochi. they were set to stage a process at the sochi olympics. meantime, dow jones reporting russian police vice president confirmed those arrests of the former fussy riot members which has been communicated through twitter. as soon as we get more on the story, we'll update you, of course. the last thing people who live in the northeastern u.s. want to hear is there's more snow in the forecast, but that's the case. but there's good news, warmer temperatures are on the way. reynolds wolf is meteorologist for the weather channel and he joins us now. basically, it's going to get worse before it gets better. >> yeah. isn't this just ridiculous for much of north america, especially here in the nurth eastern united states inspect this has been the winter that will want end. last thursday, roughly a foot of snowfall. this morning, it has just begun with a bang where we night see another 3 to 5 inches of snowfall in and around the new

york greater metropolitan area. we're actually in ft. lee, new jersey. behind me, you see parts of interstate i-95 and the george washington bridge. across the george washington bridge and into new york, they are prepared. they've had a big order of salt that was delivered yesterday. that's going to make a big difference in a lot of the roadways, it's going to help prevent some of the icing. the number one thing it's going to prevent in terms of the icing will be what mother nature is going to provide later on today and in days to come. warmer temperatures. we are going to see a significant warm-up, things well above freezing even today. so a lot of what you see coming down now might cause some problems on the roadways, but it will get better, of course, especially by the afternoon and as we make our way towards the weekend. a couple of things that are working great, one, fewer poem on the roads this morning because many of the schools has to be closed. kids are on winter break. a few other schools that remain open probably won't add too much

to the fray. as of now, no major concerns in terms of transportation, taxis are doing fine, buses are doing fine. there have been some cancellations out towards the airport. that should get better as we make our way through the day. back to you in london. >> reynolds, thank you so much for that. cnbc is asking you to talk the trend by taking part in our online polls. this week, we're asking which sector do you believe will be about weather the winner heads to trader poll? straightaway, you will begin to see that trend. apple may be looking to expand beyond its core lineup of iphones and ipads, possibly into the auto sector. cnbc's hampton pierce has more on this .other m&a news from our washington bureau. >> good morning, carolin. turning to apple, its m&a chief

reportedly had secret meetings with tesla last spring. those talks were held at apple's headquarters, but neither company will confirm that meeting or what they discussed. nothing came into talks, but last summer, some analysts suggested apple should buy tesla to win the service of product innovation. apple has taken an interesting in cars before as its siri voice recognition software is featured in essential vehicles, including a time of gm models. tesla is trying to stay ahead of the pack with its models did he is he dan. the chronicle also reporting apple is eyeing the medical device business, specifically technology, to help predict heart attacks. a mega merger is in the works, in the drug sector. "the wall street journal" reporting activist is in advance talks to buy forest labs for up

to $25 billion. that deal could be announced today the the combined company would offer a wide range of generic and brand name drugs. apple has been buying up a specialty brand of drugs which has higher margins than generics. forest ended a long-running battle with carl icahn last year, avoiding a proxy fight. checking shares of forest labs in frankfurt today, no movements at this point. former chairman is back on the acquisition trail. terms weren't disclosed, but reports say the deal is worth about $4.4 billion. it's the biggest acquisition for star since it was launched two years ago. and private equity firms, they've rushed into the insurance claims sector in recent months. kkr, paying $3.5 billion for two firms while apac partners snapped up a pair of companies for $3 billion. a lot going on in this week

ahead. back to you, carolin. >> looks like merger tuesday, not necessarily merger monday. thanks so much for that. these are your headlines this morning. japan extends its lending program to banks and responds. the nikkei closes up more than 3%. the china central bank rains in lending by draining nearly $8 billion from the system. activists reportingly in talks with forest lab for $25 billion. and still ahead on the show, george soros doubled down on his positions on the markets. is the billionaire investor making the right call or hedging his bet? we get some market insight, coming up next.

there are growing concerns about fears of protests in venezuela today. on monday, crowds attack security forces and freed an opposition politician after he was arrested. he belongs to a party whose leader is accused by the president of inciting violence and heading a u.s.-backed conspiracy to oust him from forward. madudo expelled -- on monday. six world powers are meeting in vienna for the first time since an interim deal was struck to freeze parts of the nuclear program. the first part, iran wants an easing of western sanctions. let's take a quick check off where the oil price is. trading light crude just above that $100 handle up slightly on the day and brent is down modestly at $109.3.

here is a look at european market, as well. we are still in the red. the ftse 100 is off slightly by three or four points, the xetra dax off by 0.1 and the ftse mib on the back of political changes in italy is dropped today off by 0.4%. overall, nothing to worry about, really. this is maybe just some profit taking and the zew indicator coming in a little bit mixed. let's give you a look at what's on today's agenda in the united states. a monthly sentiment survey from the national association of home builders is out at 10:00 a.m. eastern. as for earnings, coke reports for the opening bell. we get numbers from norwegian cruise lines, medtronnic and duke energy. wee looking for a mixed start to the trading day. the dow mini is seen modestly higher. the nasdaq and the s&p 500 seen subdued at the start of trade or just slightly lower.

again, markets were close for the presidents' day yesterday. it's time to get out the binoculars and can go whale watching. quarterly results came out friday showing what stocks, some big name investors are buying and selling. t-mobile u.s., blackberry and david einhorn, who had green light capital, takes a stake in micron technology. and george soros more than doubled his short position on the s&p 500. joining us now from the cme is scott shelly, senior vice president at derivatives at treen. scott, thank you so much for taking the time this morning. soros, is he making the right bet or is he the hedging his bet? >> i think maybe he's seeing a lot of the things that we're starting to see over here. we're not doing quite as well as we think we are. we haven't had any decent jobs

numbers the last two times around. qe is not working. that's why we're tapering. we're not tapering because the economy is strong and can handle it. we're tapering because it's a failed economic policy. i think what we see in japan's movements overnight, we're not seeing the growth and the strength and maybe some of the inflation that we would have liked to have seen right now with all this monetary central bank policy that's been going around the globe. so i think he's starting to see the things may be stalling here. we had a great run up last year and we had a decent run up on friday because we had really such a quiet trading session. there's no reason why we wouldn't start to see anybody double up their exposure to the downside here for i think more protection than a negative market sentiment. >> scott, i'm a little puzzled here. are we risk on or risk off in these markets? we saw gold higher, but we saw the dollar down. on the other hand, the s&p is very close to its record highs and we saw treasury yields moving higher, albeit by large amounts. what are he with seeing in the

markets? >> we're seeing most of the same from last year coming into this year, but a little bit more of a micromanagement issue. we're going to have an argument here all year long between those on the left. i think we saw those asset prices rise because of central bank intervention and those on the right to think those asset prices recognize because the economy was doing well. and i still think the people on the left were the ones that were winning those trades, so we're going to still be in that weird world that we're in where the central bank is more controlling monetary policy in some of these flows rather than, hey, the economy is doing well. you haven't seen our earnings come across very well, either. anybody that wants to say the economy is doing well, i would argue the fact that, hey, we've been putting in upwards of $85 billion, now only $65 billion a month into this market. we can't get any growth, we can't get any inflation, so i think the world is still worried about, hey, we're not seeing what we wanted to see out of these qes and we've seen some people add to these, i.e. japan. we've got things on the horizon,

we're going to need to see some good numbers fast or we're going to add to stimulus or taper. i think that could be negative for the market here. >> what is going to be driving stock prices higher? you mentioned we're going to have to see good data. but for now, no pun intended here, we're going to have to wait for the winter to pass, don't we? >> well, you know, i don't know. yeah, i guess we've got some bad weather news in there. but i don't know about you, but, you know, the weather has been bad for a long time here. and some of these analysts that we so-called survey, you have to be taken some of your expectations down a little bit because of the weather. and we're still missing on those numbers. so we better get going here fast. and we need to see some of these jobs. there's only two things that can take us out of these problems. no matter what anybody else tells everybody else, we need the housing numbers pick up and the jobs numbers pick up.

if those two things aren't going to get any better, nothing else is going to get us out of this problem. now, if rates are this slow and you run a big plant, why aren't you retooling? why aren't you getting ready for the ceo for the big boom that's supposed be around the corner? it's because the american ceo can't see it coming or aren't quite sure when it's going to come. that's why we have that focus. >> you're focusing so much on the macro data, what about profitability for those companies that are already reported. >> well, yes, some companies have done better than others, but i would argue the fact that earnings as a whole haven't done that well. and a lot of them have been due to the fact that we've been cutting ourselves the profitability. there's going have to be some wholesale growth. i mean, yes, some things have the -- how about this? if we can only get 2% to 2.5% gdp with the accommodation that we've given this market, i think that's not the america that i

grew up in. that's almost embarrassing. remember, 85 to $65 billion a month and all we can buy ourls is 275% gdp? that's not going to be very good this time around, either, because of the weather. but still, i tell you, we should be growing at 6% or 7%, not 2.5% or 3%. i think 3% with the accommodation is a joke. i think we should be doing much better and i'm staying with that until i see the jobs numbers turn around. >> scott, we're going to have to leave it here. thank you so much for yao time. "the tonight show" has jimmy fallon making its debut last night. he had several other friends welcome him to his new home. >> i can't believe this is happening. i'm really sitting here. i want to say thanks to all the fans for their support. and to my duddy who said i'd never be the host of "the tonight show -- and you know who you are -- you owe me $100

bucks, buddy. >> that's it for today's show. i'm carolin roth. thanks for watching "worldwide exchange." we'll be back tomorrow. [ male announcer ] you're watching one of the biggest financial services companies in the country at work. hey. thanks for coming over. hey. [ male announcer ] how did it come to be? yours? ah. not anymore. it's a very short story. come on in. [ male announcer ] by meeting you more than halfway. it's how edward jones makes sense of investing.

good morning and welcome to "squawk box." stocks rallying overnight in tokyo. will the good times roll into wall street? after the long weekend, it is merger tuesday. it may be a $25 billion deal in the works for forest labs. we've got a lot of big trouble going on for one bitcoin exchange. it's tuesday, february 18th, 2014. "squawk box" begins right now. good morning and welcome to "squawk box" here on cnbc. i'm scott wapner along with kayla tousche and andrew ross sorkin. joe and becky are off today.

u.s. investors return to work from the long holiday weekend and stocks are coming off their best week of the year. the s&p 500 has wiped out almost all of its losses for 2014. and is now just ten points below its record close of 1848 based on january 15th. among our market experts this morning, tom lee and barclay's, head of u.s. equity portfolio barry knapp. both men will join us on set at the top of the hours. on the agenda today, at 8:30 eastern, february's empire state survey. then at 9:00, december tic data which tracks corporate bonds and equities into and out of the united states. and now or later, housing comes into focus with this month's national association of home builders survey. today kicks off a busy week for economic data. tomorrow, we're going to get the ppi, housing starts and minutes from the last fed meetings. thursday comes cpi