i know you're watching "worldwide exchange," i'm ross westgate. the headlines from around the globe, chinese gdp manages to just scrape past estimates but growth still at an 18-month low. profits under pressure at europe's corporates, testco and credit suisse both posting a drop in earnings. the outlook remains upbeat. >> the first quarter was a strong performance. we'll see how the year turns out. many of the emerging markets have been more challenging in

the first quarter. profits down at yahoo! but the numbers beat the street thanks to a great performance by alibaba. and russia warns ukraine it stands on the brink of civil war after kiev launches military operations to try to win background from the separatists. you're watching "worldwide exchange," bringing you business news from around the globe. >> hello and a warm welcome to today's edition of "worldwide exchange." there is a huge amount to get through in today's show, an awful lot to talk about. coming up, could the mobile phone as you know it soon be ancient history? google's planning a modular smartphone that consumers can customize with various hardware features. we'll take a look at that.

bank of america set to report numbers from the bell today. find out why this is a top stock pick. and a fatal ferry industry. we'll be in seoul later in the show. first, asian stocks are up. first quarter gdp came in at 7 another 4%, that's down 7.7% from last quarter of last year. let's get a breakdown of that. eunice, not as bad as we perhaps might have feared. it's still the lowest growth in 18 months. when you break it out, what are the components? >> well, most people are talking

about how the economic data, the 7.7%, not as bad as what we expected. the expectations were that we were going to see 7% potentially, maybe even worse and so because of that, all the expectations were blown out, 7.54%, even though it's such a slow number from the relative basis for the chinese economy, came in pretty well and there's relief in the market. in terms of the way it was breaking down, we saw the retail sales numbers picked up a bit. we saw it to 12.2%. we saw the industrial output numbers picked up, the fai, fixed asset investment was disappointing in, coming in at 17.6%. there is quite a bit of discussion around that. some people are saying you have some economists saying this is a good thing. it indicates the chinese economy is moving in the right direction, moving away from investment, moving towards consumption because the retail sales numbers were better.

on the other hand, there were people saying this number was looking pretty soft and one of the reasons was because of the fact that the property market is looking weak. a property market is a key driver to economic growth here. going forward, what does all this mean? the main takeaway from this number, of 7.4%, basically is that the government, which has already indicated that it's comfortable with slower growth, to the tune of around 7.5%, this is around 7.5%, probably isn't going to be coming in with big stimulus measures or potentially even mini stimulus measures at least in the short term. the longer term, people are wondering if the government will have to come in at one point or another because they're not so sure whether or not all of those risk factors that are out there, especially within the financial sector are going to, you know, really not pan out and if this economy is going to be able to maneuver its way into a soft

landing instead of a hard one. guys? >> eunice, you talk about the leadership being comfortable with this pace of growth, presumably, when he ruled out major stimulus last week had a good idea of what this number was going to be. >> right. so because of that, there were a lot of people here who were wondering if the first quarter numbers were going to look really bad. all of the chatter beforehand was about how this number could actually miss 7% or would it hit 7%? was it going to come in at 7.2%? now that it's coming in at 7.4%, actually what's happening now, there are people questioning the quality of the data which you know is a constant conversation when it comes to the economic data coming out of china. >> yes, there is always that. eunice, we'll catch you later.

joining us with his thoughts, ramon young, senior economist in hong kong. good to see you. i've been on that final point that eunice raised. how much do we believe the veracity of the chinese data? >> well, of course we talk about an economy of 9 trillion u.s. dollars, the second largest economy that can be able to give you a gdp figure within a relatively short -- you may continue to cast out on the 7.4% growth but what we've observed from the high frequency data, including electricity consumption, infantry levels of major ports in china as well as the new export order of the pmi survey, that all points to a possible rebound and earlier than expected rebound is under way. and we believe that in the second quarter, the growth

momentum can sustain to see an earlier than expected recovery in the chinese economy this year. >> yes. you talk about a rebound. on the other hand we have a weak comparison with the first quarter of last year, don't we, which flatters these numbers. >> of course. last year, there has been a gloomy atmosphere, especially in the second quarter during the period of what we call the cash crunch where the whole economy were trying to figure out where the money is going, trying to fight for liquidities. but this year, the moderate conditions seems to be more relaxed than last year and the overall demostic demand seems to have stabilized if you look at the pmi figures, i'm talking about official one that was released last time. that all points to a stabilization of the domestic economy and also you look at the

retail sales figure released today, 12.2% is a decent number. it's also the overall plan for the chinese government to go for a rebalancing of the entire structure. >> wage growth continues to outstrip output growth. does that mean the labor market is still healthy? that would be of some soothe be comfort, i imagine. >> i believe so. and this is actually one of the major elements for the chinese policymakers to boost consumption. they try to uplift and upgrade earnings figures. many of the cities we saw has increased a minimum wage that's been benchmarked to the average wage level of that city in that location. i believe this is a healthy development of china, because china is no longer low cost

economy relying on cheap labor intensive industry. we have seen many manufacturers are moving out from china if they want to produce toys and garments they are moving away from china to low-cost economies like myanmar and lower economies. >> raymond, good to see you. raymond yeung, senior economic at greater china, joining us from hong kong. that's the data, that's the analysis. how has it impacted markets in asia? sri is there to tell us all. hi, sri. >> hi there, ross. in the prior session remember, i was telling you the market was perhaps trying to front run softer numbers, both the greater china markets in hong kong and shanghai were down. i would say the market reaction

suggests some skepticism associated with the data. remember 7.4% still represents a slowdown. yes, it is mildly better than what most in the market was looking for. bear in mind, the hang seng and shanghai both came off from session highs. similar story for the aussie dollar interestingly. did make a run on 94. couldn't quite get there, 9380 was best we got. that was the session high. the interday chart has been peeling off. aussie dollar, a good metric at which to gauge the china data because australia, china, still very big trading partners. there's stimulus debate to be had in the japanese market. we got some commentary from kuroda, the governor of the boj today. he was signaling to parliament that stimulus isn't necessarily imminent. he did maintain a positive view on the broader economy. did also say there was headway

being made to achieve that 2% boj target within about a year's time. so it all looks positive but the market still seems to believe, ross, that we'll see boj action expanding the asset purchases in about two to three months time. the end seems to be trying to factor this in as well. the dollar yen is worth looking at that cross that has been quite well bid recently. perhaps it has to did with the cpi, the print and the data we've seen state side. a lot of people are telling us, don't rule out dollar yen around 1.05, 1.06 is a one commentary we've been hearing. overall, fairly strong buyers, especially in the japanese markets, because of soft bank effect as well. and what we saw coming out of the -- coming out of alibaba. there were metrics put on it for

you. the best percentage gain since february 18th. back to you. >> keep talking 1.05 on dollar/yen, sri. it's been hard to sustain that move. currencies will do what they are going to do in their own time. >> an hour and 11 minutes into trade here in europe. green on the board. we are seeing advances outpace decliners 8-1 on the dow jones 600. the ftse was off 42 points yesterday. this morning, a lot of earnings out to focus in on. xetra dax up 0.75%, as is the cac. the yield came down 2.66 is where we were tuesday. currently 2.64. ukraine worries supporting

treasuries is a better way to say it. we'll keep our eyes on gilts. average earnings coming out. average earnings should be above the rate of inflation for the first time in a long while. the three-month weighted average earnings on an annual year basis could be 1.8%. good news for george osbourne and the bank of england as well. currency markets, sterling steady -- we're pretty steady in all these. the aussie/dollar bounces off its lows pairing losses on the back of chinese data. dollar/y dollar/yen, 1.18. euro/dollar, 1.38. the russian stock market down again today, not quite a percent. we've got news coming in in the last few minutes that reuters is suggesting that armed pro-russian separatists have

taken control of the donetsk city council building in eastern ukraine. this is as the white house backed kiev's decision to carry out military operations against pro-moscow separatists. vladimir putin says the move has put ukraine on the verge of civil war. speaking a few minutes ago on "squawk box," legrand said it was time the eu heeded the warnings. >> ukraine crisis is a wakeup call to the eu that we don't live in some kind of post-modern laa-laa land. there are external threats that what eastern european is saying about russian interests is true we need a much more vigorous response not just from nato but the eu. much more severe sanctions, asset freezes targeted at putin

and his cronies in the kremlin. by making clear that the russian people are not enemies. >> phillip legrand earlier. joining us, our guest from donetsk. we understand these operations may take place. what is the feeling there? >> well, the tensions are only getting stronger. we heard from vladimir putin, russia's president, yesterday, that the country is on the brink of civil war. he is expecting the west to condemn the ukrainian military action in this area. yesterday the ukrainian military has started, has launched an anti-terrorism operation in the area. we saw some 15 apcs, around 4 helicopters, 2 of which took off and seems have shot at an airport in the area. today there are standoffs being

reported from the area between local people. the local militia who seems to be pro-russian and the ukrainian military in their military vehicles. now the mood here among the people is very much expectant of things to get worse and yet they are defiant. they want to stay and defend their land. they feel like the west, they feel like the government in kiev is not going to protect them. and actually, a lot of people we've been talking to say that russia could, in fact, help. russia is the nation and russian soldiers could protect them from the chaos they see coming in kiev. and they are perhaps going to welcome the russian forces if indeed russian forces decide to come in. >> thanks for that. we'll catch up with you later. still to come on the show, credit suisse misses first quarter forecast.

the lender is still under pressure for continued litigation.

plenty of earnings out here in europe.

investors not ready to check out of britain's biggest retailer, the stock up 3.6%. the supermarket giant posting its second annual decline. phillip clark says he has no intention of going anywhere. the press reporting speculation that a top investor has been call for him to quit. persimmon the house builder, up 1.3%. total forward sales revenue up 35% compared to 2013. vista level up 10%. luxury fashion how burberry up 0.25% this morning. it was said currency exchange rates will weigh on profits over the next two years. there was solid sales in china and korea which helped to boost revenues. here's the decliner, credit suisse, off 2% as you can see. first quarter forecast missed

expectations. profits down by more than a third. fixed income vision under pressure. it did raise provisions set aside for litigation. that seems to be the problem. carolyn is in zurich. she's been speaking to brady dugan this morning and jones us for more. we thought we could get beyond everything, carolyn. how long, how long do we have to wait? >> that's a difficult question. i put that question to brady dug then morning. he says, yes, we're still waiting for a settlement with the boj. he says the ball is in their court. this has been going on for three years now. we're hoping to get resolution to this tax investigation, sometime later this year. they've set aside 800 million swiss franks, dollars rather to deal with those issues. is a settlement near? that is the big question. i really didn't get a concrete answer from brady dugan this morning.

let's get back to the actual numbers. you mention the share price reaction down 2%. that would be a bit of a surprise to some of the brokers out there. goldman sachs expected the stock to react positively. in their note this morning, they point out credit suisse showing strength in the right places meaning the private bank net new money inflows of 11 billion swiss frankcs. they believe that the private banking strength can actually trump the investment banking weakness. i guess this morning investors are focusing on some of the negatives and when i spoke to brady dug then morning, also wanted to know from him how much visibility he's got for the rest of the year. >> the first quarter was a strong performance, particularly if you look at our private bank, it was both strong, in terms of net new money and pre-tax.

we're feeling quite good about that. we'll see how the year plays out. some of the markets, particularly many of the emerging markets have been more challenging in the first quarter. we'll see how things develop. >> so judging by his answer i guess he doesn't have a whole lot of visibility for the rest of the year. also keep in mind that the first quarter traditionally is the strongest quarter for the investment banking side. ross, in the next hour we'll bring you more of that interview and we'll talk much more about litigation and regulation for credit suisse. back over to you. >> we look forward to that. thank you. it's a clear day in zurich albeit it looks chilly. coming up later in the show, we'll preview bank of america earnings which are due before the bell on wall street and find out by dick bove says it is his top pick. here in europe, sales slow in the first quarter for danone.

>> there are a couple of reasons for the decline. the first one is a negative impact from the exchange rate. the second one is decline in russia after the company raised prices there. the main one is a slowdown in baby food if you remember, they recalled some milk products for babies in asia, following a contamination scare. the company is working hard to regain its market shares in asia. it's not there yet, obviously. sales of baby food products declined by 7.7% in the first quarter. that was a bit better than expected. the average forecast was a 9% contraction. it's not a good performance. the baby food unit is not the main one for danone. it accounts for less than 25% of its revenue. in terms of outlook, danone was

able to target 4.5% to 5% organic growth this year, also a stable operating margin ut us, plus or minus 20 basis points. it's not enough to convince the market the stock is the worst performer on the cac current. >> stephan, danone was labeled strategic by the french government a few years ago. why do you think that is? why is it a national strategic interest, this company? >> you want the official answer or the reason? >> i want whatever you want to feel comfortable telling me. >> you know, it's one of the big companies in france that's the government wouldn't like to see controlled by another group. i don't see strategic reason, it's not a defense group or something sensitive. i don't see a reason why.

they make yogurt. >> maybe in france yogurt is strategic. >> we do eat a lot of dairy products in france. i don't know if you ever visited a french market. much more than the uk for instance. it's always difficult to choose yogurt in france. there's so many. >> we have a lot of danone yogurt i noticed. google is planning a modular smartphone that consumers can customize with various hardware features. it revealed the project prototype on tuesday. each would perform a different task, one could be a battery, wireless antenna or a blood sugar monitor. google will create an online store where customers will be able to buy additional hardware

depending on what they want their phone to do. make a call. would you have hardware that enabled you to do that? what would you add on to your dream phone? a bigger battery, a cam are, a cigarette lighter, a keyboard? anything you like, really. let us know. join the conversation at "worldwide exchange." e mace, tweet or contact me.

you're watching "worldwide exchange," bringing you business news from around the globe. headlines from around the globe. asian markets close broadly higher as chinese gdp manages to scrape past estimates. still, it's an 18-month low. profits under pressure at european corporates. the executive view of credit suisse still upbeat. >> the first quarter was a strong performance. we'll see how the year plays out. some of the markets, particularly many of the emerging markets have been more challenging in the first quarter. profits down at yahoo! but the numbers beat the street things to a good performance at alibaba. the chinese e-commerce join the

may file an ipo as soon as monday. russia warns ukraine it stands on the brink of civil war after kiev launches military operations in the east of the country to try and win background from the separatists. we have uk unemployment figures out. the count has dropped by 30,400, that's the number of people claiming unemployment benefit versus february's. the jobless rate down 0,000 to 2.243 million. the rate, 6.9%. see, the unemployment rate at 6.9%. the forecast for that to stay at 7.1%. it's the lowest rate since the three month to february 2009. total employment up 239,000 to

30.389 million in the three months through february. so 30.389 million pell in the uk are employed. average weekly earnings, we thought it would come in at 1.8%. that came in at 1.7%, the annual rate. nevertheless, it's above the rate of cpi. it is the first time average earning has not lagged cpi since the three months to april 2010. february alone was up 1.9%. it's a three-month average waiting for that. so there we go. the jobless rate forced the 6.9%, pay growth has picked up. michael snade is analyst at pnb paribas. >> this is a positive number for the uk economy and for sterling. in particular, we've broken that 7% threshold that is

psychologically quite important. but also we're starting to see a pickup in the average earnings. it was a disappointing number but we are starting to see follow-through in terms of wage growth. >> from here we particularly like sterling. we favor playing it against the euro. we think numbers in europe will be picking up, in contrast to eurozone where we'll see more talk of action from the ecb. euro sterling moving lower is the trade from here. >> yes. euro is a rather stubborn beast, though. >> it is but we think the fact that we've had a change from ecb officials, they're starting to talk about further options means that we'll start to see more traction on the euro downside. what will be key is the inflation outlook for the eurozone and what will be really key is the name that comes through in april, that will be distorted by the easter effects. we'll wait for the number in may.

>> it will be interesting to see what happens in the race between the uk economy and the u.s. economy. first of all in terms of policy and i guess also in terms of yields. ten-year gilt and treasury yields. will that continue? >> what's interesting, the uk economy, the pace has picked up and the market has priced in expectations, a rate hike in early 2015. that's about 12 months before that from the u.s. a lot of the good news in the uk economy has been priced in. in con taft to the u.s. where yields are still at relatively low levels because the data has been surprising to the downside for most of this year. so going forward, there's probably a bit more surprise to come on the u.s. side than the uk side. investors are already long sterling. that's probably going to limit the scope for sterling to appreciate. but we'll probably still see a

test of 170 over the next couple of months. >> our business editor around the desk in the uk has well. how important is the political debate? >> it's massive. >> earnings above inflation. >> massive. what does this say of the cost of living crisis, the tag line for the opposition, the labor party. i think this is the first time we've had real wage growth above inflation, as you said, not as much as we expected. but still above inflation that we saw yesterday. since 2010. and importantly if you look at those figures, youth unemployment is already up -- down rather. to its lowest level since 2009. that's key as well, because a big part of this recovery is making sure that that contingent get in to work. an interesting figure, i'd say to you, if you strip out bonuses, wage inflation is only 1.4%.

so that's quite interesting. clearly the city is back and important and bonuses are justs arelevant as ever. >> that's below the forecast, 1.7. and stacked still crucially still below the rate of inflation. >> below the rate of inflation, yes, yes. still it's earnings. there could be an argument saying that big city contingent is making that wage packet higher. but really what people have been waiting for in the uk is that people start earning more, because so far, the consumer boom that we've seen has been led by people feeling more confident, their houses are worth more. and crucially dipping into savings. and there's only so much longer that can go on before we run out of fuel. >> yes. fuel and retail. i feel talk about testco coming up in a second.

hold your horses. we'll come back to that. michael, final thought? what is the forecast at bnp? >> we think they'll start hiking rates in q1 2015. they were seeing growth pickup in the uk. inflation is benign as we saw in the release this week. that means there won't be too much of a rush for the bank of england to be hiking into rate hikes this year. >> thank you for that. good news for a man with a tracker mortgage. you probably paid yours off a long time ago. european equities are a little bit firmer today as we go through the session. and we pull that up for you. maybe we can do that. thank you. up 0.4% for the ftse, nearly a point higher for the xetra dax and the cac current.

gilt yields should be higher. there you go. ten-year bunt yields are down. we need a euro/sterling chart, the one that michael was saying you should be selling. selling the euro against the pound. dollar/yen. the aussie posting its losses, after the chinese gdp number. so the pressure might be coming off the uk consumer but is it going to help out tesco? david gray, retail analyst at planet retail. helia is still with us as well. david, good morning. >> good morning. >> is the biggest retailer, the

market clearly thought it's not anything worse. >> no. >> than we thought it was going to be. how big are their problems? >> well, fairly big. i mean, if you look at the profit figures, for example, so we're now seeing another decline in group trading profits. i think one of the biggest problems for them is central europe where you've seen a writedown on their assets in central europe. a big decline in profits in central europe. in the uk they are taking action, investing in store fee furbishments, product ranges and so on. a lot more work to do. >> here's the question, helia, if you shop at tesco, what does it say about you? >> apparently you're in the middle, phillip clark, the chief executive was saying this represents a massive opportunity for tesco. they can be everything you want personalized to you, whether you want to buy a tablet, whether you want to have a hamburger or get your groceries or do your banking, tesco could be there

for you. >> i thought this was the problem. >> exactly. what we've seen in reality is consumers are looking at discounters to get true value, get prices that are much better than tesco's or they're trading up, getting their tomatoes on the wine or whatever it is. the middle ground, like we've seen in fashion, has come under pressure. >> how does it turn its fortunes around? >> quite a value point, the point around the middle ground being squeezed. >> i know i have a squeezed middle. >> it's a difficult situation. what they need to do is focus on getting food ranges right, better quality food, more product innovation. we've seen that as a key trend. investing in product innovation. they need to tighten up pricing on the core, every day essential lines in competition with the discounts. >> they've announced they'll

interest 200 million pounds of bringing the price of milk and bread and various products like that down. today they said they wouldn't be afraid of doing more. a price car in the uk would be hugely eroding of profiten to margin. maybe that's the only way you can combat the problem. tesco, who whole space for race thing hasn't proved to be effective for the modern consumer. people don't necessarily want to go out of town just to do their grocery shopping. and that massive estate that tesco had where they were everywhere, including your living room, possibly, hasn't paid off in the same way. they underinvested in that portfolio, which is something they're pulling back from. they are going to accelerate that, that's what we were talking about today, pulling back from the massive stores or sweating the assets, making sure they have a reason to persuade people to go to those stores

other than just food. >> some people describe mr. clark, the david moise to terry lee. i don't know if that's a fair comparison. how much of a new, fresher stable management do we need? >> you need a stable management team that can look into the long-term future of the business plan long term. that's a very, very important factor. they are taking action, investing in the store refurbishments, investing in the product ranges. i think on the big stores, it's an interesting point you make about the big stores. they are actually going to continue to open the stores still but just at a slower rate of expansion. we'll do more but at a slower rate than previously. >> thanks for that. good to see you, david. helia, you've -- i sort of think of you, i think of you as

burber burberrbur burberry. >> it was tremendously exciting. >> what have you been doing? >> i've been checking out what they sell for what price. >> do they have a store on salosloan street? >> i don't live on sloan street. i know where you live. it's similar, post-code today. this is how helia got along there. >> reporter: there was a time when the dominance of tesco was undisputed. it was one of the biggest drivers of the uk economy. lately things aren't looking as secure. the biggest game changer has been these guys, the german discounters. behind me, aldi but little, too, together they've absolutely

outhoovered the market growth. aldi have about 600 stores already. but are earmarking about 1,500. and the pace of growth is phenomenal, about 30% at the beginning of this year. remember, this is at a time when the likes of tescos are struggling to keep hold of their own customers. >> i think the supermarkets are caught between a rock and a hard place. they've ignored the federal discounters for far too long. people are no longer going to aldi just to search for price. they're actually discovering they can effectively do a full shop at a cheaper price. it's no longer uncool to go to these places in this austerity. therefore, as a result, i think winning those consumers back will be very hard. and it will require a lot of money and margin pressure. >> reporter: this as discount and premium supermarkets are continuing to increase market

share at the expense of the big four. new research from a panel shows aldi posting record gains in market share over the year, up by more than 30%. aldi started in 1946 in germany when brothers carl and theo took over their mother's grocery store, however, the business was divided in 1960 when the famously reclusive brothers split over whether to sell cigarettes. the stores have become household names in europe and the u.s. and are now trying to get their foot in the door in the uk. aldi and lidl may have at one time only appealed to cash strap ed families. this is 13 items for just over 8 pounds. these low-cost players, the new

consumer champions or could the big four be set for a comeback? >> don't know. could the big four be set for a comeback? what is it about aldi and lidl that makes them tough competiti competition? >> i think it's the limited range model, offering a limited number of products allows them to buy with huge scale in order to keep prices down and keep prices low. also enables them to invest in the product quality. you often get products at aldi that have won awards and so on. they're competitive on price through that method of offering the limited range. it's difficult for a large market with a much bigger product range to compete on those prices. >> you look quite comfortable. >> at aldi. >> yes. >> these days, tesco's problem, it isn't the name you think of when you think of price. and even though they used to appeal to that consumer, for

phillip clark, in an interview he said he was thinking about it every single second, every single day, seven days a week. they'll have to show how they turn the business around and that different strategy to milk those assets starts to work. >> thank you for now. david, thank you. the u.s. consumer price index for march showed food prices increased since february. food fraud is increasing as well. as cnbc has the story. >> reporter: do you really know what's in the food you buy? we like to think we do but food advocacy groups say with increasing irregularity we don't. mislabeling and adult ration are on the raise.

you buy tuna. is it really tuna or escolar? >> reporter: 10% of commercially food a year, including honey, spices, juices aren't what they claim to be. food fraud can cost the industry up to $15 billion a year says the grocery manufacturers association. it's on the rise. our food supply is imported from everywhere. which makes tracing the source tricky, combined that with razor thin margins, food, experts say, is ripe for fraud. >> they're getting better at faking everything. >> reporter: scary stuff but the good news, government and industry are ramping up efforts to prevent it. cnbc was allowed exclusive access to this customs and border protection lab. here scientists and specially trained officers are the first line of defense. >> we can take in a piece of an animal or plant or a whole one,

potentially and look at its genetics and tell exactly what it is. >> reporter: the fda, u.s. department of agriculture and several other agencies are also involved in preventing food fraud. but critics say that can be problematic. for example, the fda monitors eggs in shells but eggs in a product, that's the usda. >> do things fall through the cracks because you have so many hands in the pot? >> i this i because we have so many hands we get to cover the cracks more. >> reporter: companies are stepping up to fight against food fraud. costco keeps a data bass of olive tree dna to trace its olive oil. >> tasting and more tasting. >> when we're developing a relationship with a vendor, we have them sign an affidavit that everything they say is in that product is there and nothing

else. >> you continue testing. >> yes. if there's a one off, we immediately remove that product from the shelves. >> reporter: horse meat in meatballs to fake olive oil, bottom line, not only with we being ripped off, it could also make us sick. the problem seems to be getting worse. sheila dharmarajan, cnbc. the rescue mission to save the victims of a ferry accident continues. we'll have the latest from seoul, after this. ♪

geico motorcycle. see how much you could save.

you're watching "worldwide exchange." some say too much wine can get you into trouble. just a bottle is enough for the premiere of australia's new south wales to lose his job. they found evidence of a thank you card he sent a businessman for a $3,000 bottle of wine. he earlier denied under oath that he received the gift from the former head of australia water holdings. he is under investigation for using the state-owned utility company's money to fund a lavish lifestyle. meanwhile, it's been a year

since the bank of japan implemented massive monetary easing measures. kuroda says recent volatilities is not related to the central bank. we have more from the nikkei. >> hi, ross, yes, he spoke at a lower house committee meeting and reassured the policymakers that the economy was moving towards the goal of a 2% rise in price trends. he admitted there were hikes. when asked whether monetary easing had led to increased speculative deals and caused wild fluctuations in stock prices have been countered, saying the easing has had an effect on the economy. he added that he will pay close to and it market movements and stress that it was far too early to discover exit strategies anytime soon.

back to you, ross. >> thank you. so far, two deaths have been reported from a ferry accident in south korea. the coast guard says 164 people have been saved from the 459 on board as rescue operations continue. june yoon is in seoul with the latest. >> reporter: ross, we are actually still getting breaking news on the details here as well. a passenger ship carrying 459 people and 150 cars on board started sinking off south korea southwest coast this morning at 9:00 a.m. local. the reported number of people on board was initially 477 people. it has changed during the day as the story emerged. the central disaster control agency is saying the number of passengers on board is 459. this ship was on the way to an island. the passengers on board were mostly high school students on a school trip. according to the latest from the korean central disaster control

committee and the coast guard, is that there are 470 -- of the passengers on board, 164 passengers have been rescued. there are two confirmed deaths, one being a female crew member, the other being a student. there are 293 passengers missing, unaccounted for. initially at noon local time, the ministry of administration for the province and the local press was reporting that all students and teachers have been rescued. this was corrected later in the day by the central disaster control committee, saying that the students did have life vests but they were not all rescued at this point. many students are wearing life jackets and waiting to be rescued. the issue that came up from this incident was that there were not enough life jackets on board for all the passengers on the ship. so far, south korean president has ordered the navy and all members of the coast guard to join rescue operations. these operations are still ongoing at the moment.

but so far, that's what we have, 293 people missing and unaccounted for at this time. ross, back to you. >> thank you very much pore that. that is the latest on what's going on in south korea. meanwhile, google is planning a modular smartphone that consumers can customize with various hardware features. they showed off a prototype called project aura, components would be held in place by an endoskeleton case. what features would you add to your smartphone? let us know in the second hour of "worldwide exchange."

you're watching "worldwide exchange." asian equities closed broadly higher. profits under pressure in europe's corporates. tesco and credit suisse both post a drop in earnings but executive view at the swiss lender, still upbeat. >> the first quarter was a strong performance. we'll see how the year plays out. some of the markets, particularly many of the emerging mark hes have been more challenging in the first quarter. >> numbers beat the street

thanks to a strong performance of alibaba. this suggests the chinese e-commerce giant could file an ipo as soon as monday. intel reports better than expected first quarter figures. the company is showing signs that they suffer from a struggling market may be easing. you're watching "worldwide exchange," bringing you business news from around the globe. >> and a very good morning to you. if you've just joined us state side. welcome to the global trading day here on cnbc. we kick off to reaction to that chinese data. asian stocks rising after the economy slowed less than analysts expected. first quarter gdp coming in at 7.4%. it is down from 7.7% last quarter but still better than expected. cnbc's eunice yoon joins us with the details from beijing.

this is down at an 18-month low and helped as well, i guess, by an easy comparison to the first quarter last year when the economy was certainly weaker. when you break down these figures, what's the true underlying picture, do we think? >> we do know there's weakness in the property sector and so that's one of the reasons we did see a bit of a slip in this number. overall when you look at the set of numbers for the first quarter, we are seeing, yes, the economy is slowing but it's just not as bad as people have thought. that's one of the reasons we saw the relief rally. the number came in above consensus for 7.3% and in line with where the leadership has already said they want the economy growing for the year at around 7.5%. so the main takeaway from this is that the government probably won't feel a sense of urgency to come in with any form of stimulus because they've already indicated that they are

comfortable with this level of growth. at least for the short term. longer term it's possible that the economy could slip further in which case you could see movement in terms of the policymakers. ross? >> yes, the interesting thing is, of course, is that we saw wage growth holding up. that's going to be fairly key, isn't it, for the administration's views on -- and bear in mind, that is a key concern for the employment market. >> that was -- yes, exactly. that was really important. the fact that we saw a good healthy wage growth, which is a really important for the leadership here, especially because the premiere has indicated that unemployment and the employment figures is going to be very important in really determining just how much they come in and try to support the economy with various different measures. that was key indicator. there was another one that was attracting a lot of attention.

that is another set of numbers, the fixed asset investment figure which is basically all the construction that goes into factories and infrastructure. it actually slipped to 17.6%. and the reason why that was interesting is that there was a lot of people on the one hand is saying this was a good thing. now we're seeing the economy restructuring, relying less on investment. some people saying that is not good, it was a huge driver for the economy. >> with his reaction, charlie morris joins us. hcb global management, with us for the first part of the hour. what are the investment implications of this number. >> the impact has actually been felt as a relief rally outside of china. and the copper price is still under pressure. what we're seeing is china is

slowing down. there's a message from the government that we'll have a low volatility series of gdp which we know is unusually low compared to other countries that dipped below 7.5. that's more of a message than anything else. they might, you know -- i think it's a relief for the rest of the world that china will not have a hard line ending anytime soon. >> is that the key point from investment perspective? you have to work out what a slower than expected china or faster than expected china does on the margin for your investments. how do you do that? what does it mean? >> absolutely. if you look at a company like diageo, for example, they're selling highest products in china. that's the impact on western markets, what's the tangible benefits in the short term? they continue to do high levels business with china. is it going away? the hard landing fear is the issue we have to get rid of.

>> charlie, stay with us. more to come from you. let's bring you up to speed with where we stand in asian markets in relations to that number this morning. as charlie was saying, haven't responded too strongly to that in china. the shanghai composite up 3 points here. the kospi is fairly flat. the hang seng up 24 points. where we have seen action, the nikkei up 3% this morning. we have seen the yen weaker and there may be hopes of more stimulus at some point coming down the road from the bank of japan. nothing at the moment. there is this hope that something is going to happen as they deal at the moment with the sales tax hike. u.s. futures meanwhile post what's happened in china and gdp and, of course, because of the earnings we've had, intel up 3% after hours, yahoo! up 1.4%. which means the nasdaq is called higher as you can see.

currently up around 30 points above fair value. we'll get to the intraday in a second. the s&p 500 currently around 11, 12 points above fair value and the dow at the moment, up nearly 100 points above fair value, after gains of yesterday being up 90 points. the nasdaq intraday -- composite, this is during the session yesterday. pretty volatile. the last time the nasdaq composite was down as much as 1.9% at the session lows as it was here, but then managed to close positive on the day was back on april 1st in 2009. more earnings coming out today as well. we'll talk about that. european equities meanwhile, the ftse 100 up about a third of 1%. tesco not doing too badly this morning. the retailer did see a fall in profits but traders fear it could be worse. xetra dax up a percent, as is the cac current. the unemployment rate in the uk dipping down to below 7%, the

lowest rate since 2009. that boosted sterling. take a look at where we stand. sterling up at 1.68 against the dollar as well on the back of that. the unemployment rate coming in at 6.9%. average earnings up as well. the aussie dollar, losses after the chinese data. elsewhere we're steady. dollars slightly higher against the yen at 102.30. the euro/dollar steady at 138.45. we continue to look at what's going on as far as russia is concerned. treasury yields have been lower. the misex down 0.3%. reuters is coming that armed pro-russian separatists have taken control of the donetsk city council building in eastern ukraine. the white house has backed kiev's decision to carry out military operations against the pro-moscow separatists. ukraine's acting president has vowed to act responsibly. vladimir putin says the move put

ukraine on the verge of a civil war. this view was echoed by the russian prime minister dmitry medvedev. >> translator: ukraine is on the verge of a civil war. it's horrible. i hope that everyone who is responsible for decisionmaking at the moment, meaning the current authorities, because we can't consider them legitimate, but the authorities who came to power fooling a coup d'etat, they will be wise enough not to lead the country into such horrible turmoil. >> joining us with the latest, joining us from donetsk. is the tension being increased there? >> reporter: the tensions are certainly very high. now the reports that have come in earlier about the city hall being seized, we have heard that in fact it was a reinforcement, it was done in order for the building not to be seized, but nevertheless, we've just had a

fighter jet fly by, it seems like it circled around where we are right now in donetsk. we have heard reports of abcs with a russian flag in one of the towns being captured by pro-russian millias. we've heard of standoffs in the region between ukrainian forces and local residents. and the tensions are certainly on the rise. now we've spoken to some people on the ground here, the local people, seem to be very concerned about a possible conflict between russian and ukrainian sides. nevertheless, they seem -- many people we've spoken to seem to welcome russian forces. they think russia could protect the people here. they feel that kiev is not listening to them, is not going to help them, and they feel that the west is not going to be able to help and they are not interested in doing so at all. back to you. >> thanks very much indeed for

that. that's the latest from donetsk. some of the other stories, corporate news around, intel's first quarter profit fell nearly 5%, beating forecasts, revenue edged up 1.5%, slightly shy of incidents. the company sold 5 million tablet processors during the quarter, supporting the ceo's goal to sell 40 million chips in 2014. pc revenues fell 1%. intel still expects shipments to decline slightly this year. >> what we're seeing in the pc mark set we're seeing stabilization there and we're seeing pockets of strength. in the data center, which is the cloud that services all of these devices and new services. we're seeing robust levels of growth. >> intel shares are up 1.9% at the moment in frankfurt, up 1.6% after hours. add on a program note, cnbc's

john faulk will have an interview with the ceo of intel on "fast money halftime report." that's at 12:30 eastern. revenue up 1% after four straight quarters of no growth and display revenue was up 2%. those numbers were boosted by alibaba, which yahoo! has a 24% stake in. the forecast roughly in line with current analyst estimates. some of that might be helped by the news that alibaba could be filing its long-awaited ipo as early as next week. reuters sources suggested that the chinese online retailer will

file to go public on monday in a $16 billion listing. if it does go ahead, it will be the biggest ever listing for a tech firm. and still to come, credit suisse missed its first quarter forecast. we'll be in zurich as the lender remains under pressure from continued litigation. mine was earned in korea in 1953. afghanistan, in 2009. orbiting the moon in 1971. [ male announcer ] once it's earned, usaa auto insurance is often handed down from generation to generation. because it offers a superior level of protection. and because usaa's commitment to serve current and former military members and their families is without equal. begin your legacy. get an auto insurance quote. usaa. we know what it means to serve.

you're watching "worldwide exchange." a recap of the headlines, china's growth slows but slight sli beat expectations. alibaba could file for an ipo as early as next week. and intel sees solid demand for its chip business, helping it beat first quarter street expectations. staying with earnings, credit suisse missed its first quarter forecast after profits were down more than a third. fixed income remains a division under pressure. a u.s. tax probe also weighed on the swiss bank which raised provisions set aside for litigation. carolyn has been speaking to the ceo this morning in zurich and joins ug f s us for more. it's been a long time for litigation issues. we keep thinking we'll get a date when this can be past us.

is there any sign of that? >> not really. i spoke to brady dugan, the decree of credit suisse this morning. i said when are we going to get closure on that? just about two weeks ago, credit suisse raised provisions for the litigation to around $800 million. i asked him, does that mean that we're close to a settlement? when can we expect it? what is the amount going to be? he didn't have a precise answer on that but he is confident that the bank will soon put all that litigation mess behind them. take a listen. >> we actually feel like we've done a good job after voiding the new issues and have been actually working to put some of the older issues to bed. these are still difficult issues. they're tough issues to work through. we're very committed obviously to working towards a resolution and hopefully we can get a number of these issues behind us. we feel we probably have a cleaner base going forward once we get the issues resolved. clearly we have to work toward

that. >> ross, this comes after yesterday, the new york department financial services sent a subpoena to credit suisse. we learned about it last night. brady dugan didn't want to get into that topic too much. let's take a step back and look at the numbers that credit suisse posted this morning. a mixed bag, really. two things you need to know. first of all, the investment banking sales and trading was a miss, fixed income revenues down 21% year-on-year. that was fairly uninspiring. we saw a beat in terms of the private banking and the wealth management side with inflows quite encouraging at 11 billion swiss francs and the wealth management margin fairly stable as well. that's what the likes of citi and goldman sachs like this morning. stock is trading down slightly lower, down 1.5% but off the lows of session. back to you. >> thanks so much indeed for that. that's the latest on credit suisse. charlie, what do you think as we're going through the earnings

season on both sides of the pond? >> yes. i think that, you know, the macro fears really what we've had is a big momentum drive in stocks over the past year. there's life before tapering where up until may 2013, anything with an income attached to it was popular. anything that was bond-like, low volatility stock. the last year has been go, go growth. that's been very much of an american concept, where there's been massive outperformance, despite the fact that the dollar is back. i think it's a significant rotation within it. and that will -- >> rotation from what to where? >> from the go, go stuff, biotech, into pharma, into alltec. in the tech community they're shunned, this being old school, which is hilarious.

someone like me remembers those stocks. they're on normal p/e ratios compared to what's happening elsewhere. but is that here to stay? we can see in china today, perhaps not. the macro fears, the geopolitical fears in russia are very real. then flags problem is south america is also very real. the catalyst to go back into emerging markets isn't with us quite yet. >> what's interesting here, the biggest change in your portfolio in alternatives is property. you didn't own it last year. it's now 10% of the portfolio. is that a global investment? uk-based? >> it's one-third global, two-third uk. >> why that change? >> it's an area we see stability and value. it's just very compelling. when you look around for opportunities, it's harder and harder to find big buckets of value. i'm sure there are nuggets, of course there are. i think in property,

particularly ex-london, getting six, seven yields, individual buildings could be much higher than that. you could have good tenants with long leases and so on. >> are you buying reits? >> one difficulty, the offer on the way in is expensive. once you're in, it's a good yield. and you're paying for property, what you did ten years ago. there hasn't been appreciation. it's only started moving in the last six months. >> this is in commercial space? >> yes, commercial space. >> interesting. gold around the 1,300 mark. where does gold sit in an investor portfolio at the moment? clearly at some point you're going to get more return on u.s. yields or government yields, which is going to drive everything higher. >> preferably falling rather than rising.

tapering is bad for gold. i think the most important thing is the other side of the rate equati equation, which is inflation. to latin american it might be interesting. there really isn't any inflation to speak of. that's a continued headwind. fair value is around 1,200 in comparison to other commodities and so on. this bear market has been going on a long time. if you started in america, it's 2011. if you started in europe, it's 2012. japan is 2013. where did you start the bar market is an interesting question in and of itself. >> thanks for joining us. still to come, can shale really help the u.s. become the world's top oil producer? after the break we'll be joined by the cf, magnum hunter resources, a producer that's

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[ male announcer ] this man has an accomplished research and analytical group at his disposal. ♪ but even more impressive is how he puts it to work for his clients. ♪ morning. morning. thanks for meeting so early. oh, it's not a big deal at all. come on in. [ male announcer ] it's how edward jones makes sense of investing. ♪ the booming shale industry state side will help the u.s. surpass russia and saudi arabia to become the world's top oil producer by 2015. one company that's been betting big is magnum hunter resources.

the oil producer has grown over the past five years to become a $1.5 billion market cap, both on utica and marcellis. >> are we over -- you're not going to say this. you're going to say the hype around shale isn't big enough. is it going to deliver in the time frame they're talking about or not? >> it's already doing it. look at the imports of crude oil in the united states. they were down over a million barrels a day just from increased production in plays like the bakken of north dakota and the permian of west texas. it's happening. >> how are you benefiting from

this? the margin of cost of production and the cost of the fuel here, how fine is balance between the two at the moment? >> what's happened at our industry is that companies have moved from the conventional forms of finding oil and gas to the shale. there's about ten of them active in the united states. it's all due to horizontal drilling and fracture stimulation technology that we developed in the industry, allowing us to produce oil and gas from rocks we never thought was possible. all this technology is creating a huge increase in both oil and natural gas in the u.s. it's allowing us to become an exporter. >> what are the percentages between oil and gas? >> growth wise? >> no, just in terms of when you break down share and in terms of total production? >> if you look at the oil side, the united states has always been the largest importer of crude oil predominantly from opec. we believe by year 2020 to 2022

we'll be exporting crude oil. so on the natural gas side, the natural gas is the northern american commodity. we've kept it in the u.s. >> i men the from shell expiration. >> we're about 50/50. >> a lot of people, in this country, people are very much worried about virnlt environmen concerns, what happens to fracing as well as the environmental impact. >> there's been a lot of studies done. the state of texas which is the largest producer in the u.s. is controlled by a commission called the rural commission. they look at every well frac in the united states. they could not find one case where fracturing contaminated the water zone. it's virtually impossible. >> chairman of magnum hunter resources. still to come with more job cuts on the way, bank of

america, will the new lean of operations show through in its figures? futures are indicating, again, we'll take higher again this morning, u.s. stocks.

the more you know.

this is "worldwide exchange," i'm ross westgate, asian equities close broadly highers achinese gdp manages to scrape past estimates but growth still at an 18-month low. profits under pressure at europe's corporates. test on credit suisse both posting a drop in earnings with the swiss lender still upbeat. >> the first quarter was a strong performance. some of the markets, particularly many of the emerging markets have been more challenging i think in the first quarter. >> also down at yahoo! but numbers beat the street, thanks to a strong performance of alibaba. reports suggest the chinese e-commerce giant will perform its papers by monday.

the firm shows signs of the pain suffered from the struggling pc market may finally be easing. you're watching "worldwide exchange," bringing you business news from around the globe. if you just joined us state side, welcome to your show today. the "worldwide exchange" and the countdown today for the u.s. markets indicated to be higher this morning. the nasdaq which had a volatile session yesterday, at one point down nearly 1.9%, rallied to be up. today shows we'll be higher by around another 30 points at the start this morning. intel up 3% after hours, yahoo! up 1.4% after hours. s&p 500 currently around 12 points above fair value and the dow after gains yesterday of 90 points. this morning we're currently called higher by around about another 95 points or so.

european equities have been firmer by a percent or more. the ftse lagging a little bit. the unemployment rate coming down to below 7% for the first time since october 2002. average earnings up a little bit as well. xetra dax, the cac current up just under 1% and the ftse mib up nearly 2%. chinese gdp came in at 7.4% for the first quarter, compared to the first quarter of 2013. that was a little bit better than expected, albeit the slowest growth for 18 months and a slowdown for the 7.7% we saw in the fourth quarter. there were expectations it could be as low as 7%. the kospi is flat, shanghai composite up 0.2% and in australia, up 0.6%. the real standout was the nikkei, up 3%. not necessarily on the chinese data. also expectations as well. the bank of japan will come out with more stimulus. the yen weakening a little bit.

that's where we stand ahead of the u.s. session. plenty more to get through today of course earningswise. what are investors to do? here's a recap of some of the thoughts they've already had. >> the problem right now is if draghi is going to follow up on his comments over the weekend and start weakening the europe -- >> only if he has to. >> let's wait until the inflation print of the eurozone come out. if they start to weaken the euro, the euro sterling is the most important component in the trade-weighted index. if the uk still prints lower inflation numbers as well, i think they have a problem. >> it's a lot of potential in the bank. it's not a story about london. london is overheated. there's no land and you can't build. the story is about how dubai is impacting the other parts of the country, where we have a lot of land which can be built on. the government is see that built

or being released. that's where the growth is. 2013 was all about economics. it's got foreign investors very excited and pushed the market up. 2014 for us is different. i think abonomics put in place the base for a massive improvement in corporate earnings. as of this year, third quarter earnings are up about 70%. >> we have this news coming out of russia, the economics minister saying that moscow is mulling using wto channel toll retaliate against u.s. sanctions. we'll keep our eyes on that, that as ukraine said today it will start operations to try and remove separatist who have taken over control of government buildings in the eastern part of the country. we'll keep our eyes on that. those tensions helping to just keep appreciatory yields down this morning. meanwhile, bitcoin, mt. gox

is expect ed bankruptcy proceedings to be ordered by a court. more on that as well. the gm ceo mary barra says they will develop a product development group focused on safety. barra addressed the ignition switch recall which she has admitted gm bungled. after her speech, she was mugged by reporters as she tried to leave. >> we will be transparent. that's where we're at. >> how long for the investigation? >> when i said when i was in washington an we said 45 to 60 days, we're still on that path. >> gm in frankfurt is up 1.9%. wall street's watchdog of the financial regulator is

expected to pose rule changes requiring brokerage firms to conduct formal background checks on new employees. the move follows a "wall street journal" article last month revealing more than 1,600 brokers have bankruptcy filings or criminal charges that weren't publicly disclosed. finra also plans to vet the information for the 630,000 brokers it oversees against public court records. and the u.s. treasury in its semiannual report to congress has stopped short again. the obama administration is warning beijing it's concerned about the recent drop in the value of the yen, calling it significantly undervalued. many u.s. lawmakers and businesses have long complained that china deliberately undervalues its currency to gain an edge in international markets. the treasury says the pace and size of the recent decline is unprecedented. coming up, another big chinese ipo set to make its

market debut in the u.s. this week. will investors have an appetite for weibo at a time when they're losing interest in other social media stocks? when fixed inc. ♪ ...work with equity experts... who work with regional experts... that's when expertise happens. mfs. because there is no expertise without collaboration.

you're watching "worldwide exchange." recap of the headlines, china's growth slows but

slightly beats expectations. alibaba could file for a long-awaited ipo as early as next week. and intel seeing solid demand for its chip business, helping it beat first quarter street expectations. now, burberry has released its last trading statement under former ceo angela orange. it jumped 19% to 1.3 billion pounds. the figures were helped by double digit sales growth in the asia-pacific region. it expected currency head winds to weigh on profits in the next two years. shares in the group still up 1.6%. and a fashionable deal. the italian eyewearmaker has signed a ten-year group with michael kors. luxottica, the first

collaboration is set to be launched in january 2015. luxottica shares are trading higher on the news. away from fashion investment bank merlis is priced below the expected range. they will trade on the nyc under the ticker mc. and it may be a short workweek but the ibo pipeline is full of several big deals, including weibo, the chinese version of twitter. >> weibo is expected to price its ipo after the closing bell tonight. the company is offering 20 million shares at a price range of $17 to $19. weibo will trade on the nasdaq under the ticker symbol wb. weibo is expected to draw strong interest given the social network's large user base. a recent regulatory filing shows

the company has roughly 149 million monthly active users as of march. the ipo has been met with some issues earlier this week. the book is made up of largely fast money and actual demand may be skewed on the high side. weibo is going public at a time when investors are growing more cautious about tech and social media stocks. the global social media socl is down 15% this year. twitter is one of the worst performing stocks in that index, down 25%. chinese internet stocks have underperformed by a warn of weibo and yoku is down as well. chinese companies that have gone publicly are trading below their ipo price.

it could be a test case. alibaba could file for its long-awaited listing as soon as next week. the company which powers about 80% of all chinese online shopping posted a 66% jump in fourth quarter revenues. those numbers were included in yahoo!'s latest earning report. yahoo! earns a 24% stake. twitter has hired daniel graf. twitter's products have stalled over the last year. earlier on tuesday, twitter announced its bought gnip which has helped the company to

provide social data. twitter up 9%, up 11% in trade on tuesday in the states. google is planning a modular smartphone. the consumers can customize with various hardware features. google showed off a prototype, called project aura at a conference tuesday. hardware hmodules without fit into an endoskeleton. one could be a battery, wireless antenna or a blood sugar monitor. google would create an online store where customers could buy additional modules. what would you add on to your dream phone? a bigger, longer lasting battery, a better camera, cigarette lighter, a keyboard? those sort of things. the ability to keep google and

the like from snooping on my phone, a fair point. let us know. join the conversation on "worldwide exchange," get in touch with us, e-mail, tweet @cnbcwex, e-mail worldwide@cnbc or tweet me @rosswestgate. mine was earned in korea in 1953. afghanistan, in 2009. orbiting the moon in 1971. [ male announcer ] once it's earned, usaa auto insurance is often handed down from generation to generation. because it offers a superior level of protection. and because usaa's commitment to serve current and former military members and their families is without equal. begin your legacy.

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[ female announcer ] some questions take more than a bank. they take a banker. make a my financial priorities appointment today. because when people talk, great things happen. all right. u.s. equities have been trading higher ahead of the u.s. open. the ftse 100 just come down from its earlier best levels of the

day, just up a quarter percent at the moment. unemployment rate ticking down to 6.9%. the first time it's been below 7% since 2009. average earnings up as well. the xetra dax is up two-thirds, the cac current up 0.2. the ftse mib up 1.75. on the u.s. agenda, march housing starts out at 8:30 eastern. forecast to rise nearly 6%. building permits are expected to drop around 0.5%. 9:15 o 9:15 a.m., march industrial production and at 2:00 p.m., the latest beige book report. on the earnings front, bank of america and u.s. bankcorp report before the bell, after the close we'll hear from american express, google and ibm. as for u.s. futures they're indicating a higher start today as well. we saw u.s. markets ticking higher by the close, the dow up 90 points.

right now it's caught up another 90 points. s&p is currently trading 11 points above fair value and the nasdaq is some 32 points above fair value. intel's first quarter profit, slightly shy of estimates. intel is seeing improvements in its pc business and solid demand for chips used in tablets. the company sought 5 million tablet processes during the quarter. pc revenues were down 1% and intel still expects shipments to decline slightly this year. >> what we're seeing in the pc market is we're seeing stabilization there and in fact we're seeing pockets of strength in the data center, which is the cloud that services all of these devices and new services we're seeing robust levels of growth. >> that was the cfo. on a program note -- programming

note, cnbc's john fort will have an exclusive ceo interview with intel today on "fast money halftime report" at 12:30 p.m. eastern. don't miss out on that. yahoo! and first quarter profit fell 20% but still beat forecasts by a penny. revenue rose 1% after four straight quarters of no growth and display ad revenue was up 2%. those gains were boosted by better than expected results at alibaba, which yahoo! has a 24 3rers stake. yahoo! says it's making progress in online video, social media and new formats. the second quarter revenues are roughly in line with analyst estimates. in frankfurt it's up 11%. no doubt helped by the news as well that alibaba could be filing its ipo as early as next week. scott kessler is deputy director

of s&p capital iq. thanks for joining us. he joins us from new york. how much of yahoo!'s stock price is still down to alibaba? >> you said a lot of it which is basically that alibaba is the primary driver, we think, of yahoo! shares at this point. you know, in going through the results, yahoo! definitely committed some time to addressing alibaba, but if you frankly went through the press release and you listened to the conference call, it was clearly about yahoo!'s primary operations and not its investments in asia. nonetheless, however, we think alibaba has been and will continue to be, the primary driver when it comes to perceptions and reality associated with yahoo! stock. >> what should yahoo! do, if

alibaba floats, yahoo! will get a chunk of that. what should they do with the money? >> that question was posed on the conference call yesterday. and not surprisingly, especially given the fact that no specifics are available related to the timing associated with what alibaba's plans are, i think it's fair to say that yahoo! has retained kind of a conservative stance associated with its capital allocation plans. they've been pro-active in terms of buying back stock and they've also over the last couple of years acquired a number of companies. so we would expect those two strategies to continue. but just to talk a little bit about alibaba, a lot of people don't realize if you look now at the fourth quarter results from that particular company and compare them to, say, facebook, what you see is a higher base of revenues, more growth and a much

higher set of margins related to what that company, which is already quite big, has been achieving. that really underscores what we think is going to be building excitement for this ipo over the next weeks and perhaps months. >> yes. meanwhile, looking at yahoo!'s core business, they have 430 million mobile users. do we know, though, what they're generating from them or how they're going to tap into that? >> i think in short, no. right? so it's obvious a lot of companies at this point, including the aforementioned facebook have been detailing metrics, including percentage of revenues generated from mobile, at least in terms of advertising revenues. yahoo! has not done that. you know. i think that's something that increasingly they'll be asked to do and they'll look to do. i also know that they were asked about the tumblr acquisition and

how that's been impacting the operations and the bottom line. the company indicated it would be more forthcoming with details related related to tumblr. they've stabilized and improved. they've shown, over the last couple of quarters, favorable trends when it comes to both growth in display advertising and search advertising. and as well, i'm talking on the search side, you have volumes as well as pricing moving in the right direction. all those things body well for yahoo! but clearly they haven't really favorably impacted the top line, which is basically flat over the last number of quarters at this point. >> scott, good to see you, scott kessler, deputy director of capital iq in new york. that's it for today's edition of "worldwide exchange." "squawk box" up next with a countdown to those earnings and

the opening of the markets state side. whatever happens, have a profitable day.

good morning and welcome to "squawk box." yahoo! and intel checking in to earnings central. now the markets wait for bank of america and google. china growth slows to an 18-month low but still comes in better than expected. that eases fears of a hard landing. and russia warns that ukraine's action puts the country at the risk of civil war. we're all here after we dug our cars out. it's wednesday, april 16th, 2014. "squawk box" begins right now. good morning, everybody. welcome to "squawk box" here on

cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. earnings season is under way. we have another significant report coming out about an hour from now. bank of america is expected to report profits of a nickel a share. revenue expected to top $22 billion. we'll have the numbers and the instant reaction as soon as they're released. and later today, the countdown will begin for ibm and google, those results coming after the closing bell today. we're also leading up to a huge thursday full of dow components. we have general electric, goldman sachs, dupont, united health, all reporting tomorrow. so a lot to sink our teeth into. right now, let's get over to andrew. he has the yahoo! story. >> thank you. we missed you very much. >> i missed you guys. >> let's talk about yahoo! for a moment. yahoo! reported better than expected profits last night. they reported first quarter earnings of 38 cents. sales topped a billion dollars. they see a period of stable yet