hello. you're watching "worldwide exchange." i'm ross westgate. and these are your headlines around the world. steps against russia after pro-russian separatists claim victory in the vote threatening to split up the country. the deals keep coming. sky deutsche is at the top of the market as they confirm talks. pfizer fights back. the ceo says a deal with astrazeneca would be a win/windy

spite further political pushback ahead of the grilling by u.k. lawmakers. and voting in india's mammoth five-week collection ends today with the first exit polls due in just a few hours. this kicks an all-time high in anticipation of those results. >> you're watching "worldwide exchange" bringing you business news from around the globe. hello and welcome to the first "worldwide exchange" of the week. i bet you are happy. >> absolutely overjoyed. >> what did they do? well done, brilliant. >> it's okay. i feel proud. and i'm glad to be back. >> you have been on your travels. >> i have. it's good to be back. >> yeah. plenty to get to on today's show. the eu ministers gathered in bus

zells to assist the ongoing crisis in ukraine. the ministers will discuss the fallout from yesterday's fallout in two eastern regions. >> here's the mounting of the third split in ukraine after they claimed victory on self-rule. organizers said 90% voted in favor of a great authority in kiev. nbc's richard engel filed this report. >> reporter: voters came out in an stream to vote on a referendum to break away from ukraine to become the independent republic closely aligned to moscow. the government in ukraine calls this referendum illegal and illegitimate. washington has called it a provocation. washington has said it will not recognize the results of this referendum, which was organized in a somewhat at-hawk way. there were no observers from any country. there were no official ballot papers.

they were simply forms printed out that said, do you want to join this end pen depth republic, yes or no? still, thousands and thousands of people came out to say yes, they want to declare independence. this is the pro-russian community. russian speaking, ethnically part of ukraine closer to the russian border that feels that the government in kiev no longer represents them and that the government in kiev which is aligned with washington and aligned to the eu, the european union, is openly hostile to the russian speaking parts of this country. and these feelings, these divisions between the government in kiev which is pro-europe, pro-u.s. and the russian communities here have only gotten worse the last several weeks as the government in kiev has been launching military operations in this part of the country to try to regain control, to try to take back buildings and square that is have been occupied by the

russian community. and the more the military operations continue, the more people in this part of the country want to vote like they did today to break away. >> joining us now is the global trading strategist at citi. we probably could have done without that particular vote, but how are you assessing ukraine at the moment in an uncertain political sentiment for investments. >> very fluid and the volatility issues stay with us a little bit. it looks like global markets are getting used to it. it will be good for ukraine and russia at least with the way the markets are reacting now. >> there's a view that russia at the end of the day wouldn't want to take over eastern ukraine. the last thing they want to do is be responsible for it. >> yes, and they would inherit the mess to the extent that would happen. at the same time, you would get

a pretty tricky situation on the down market side of the u.s. and europe where the west wants to impose more sanctions but europe is going to be paying the price for it, which does make this trickier to implement harsher sanctions, yes. >> in addition to what is going on as far as ukraine is going on, you are cautious on european equities in the short-term. to what extent does positioning and exposure as far as hedge funds are related play into that? >> yeah, versus a year ago where we could make a strong argument where equities were underway, the positioning was very light. we are not there anymore. we are struggling to make a case for exuberant positioning either to be fair. so we are very neutral, which makes the next few months interesting because you have the quite famous thing, it may go away, what do you do for the next three months? we can't see from the view a strong reason to go one way or the other. hedge funds were clearly too big

coming into this year, not only from a net point of view but from the gross point of view. and we have to take risks down and saw that in the last six weeks. so numbers we look at would suggest that it will not decrease that much. a conviction is -- the view is still bullish, but the gross has come down therefore convictions are not high. so kind of a bullish view but not very committed to it just yet. >> you are with us, good to have you on the first part of the show today. meanwhile, the world's leading exports says it is ready to help support crude prices in the event of a russian related disruption. the minister said he was ready to crank up production if tension between russia and ukraine leads to shortages. oil prices this morning just a tick higher near 108.30. i'll tell you what is amazing, oil prices over a three-year period, a great moderation. now it's another monday as

sky is in further talks over the acquisition over fox's paid tv assets in italy and germany. annetta is in frankfurt. if you look at the performance of deutsche today, it shows they like the deal, but where the value here? >> reporter: that's very much the reading of the market. and a lot of people are also saying this whole deal is actually reflecting the big eagle story by rupert murdoch, but there's also a positive side of the story. and this positive side of the story actually is happening here in the german market side. sky deutschland is up 7% and the reason is because of effective in that deal they also would take the takeover offer to sky deutschland. and as the shares have been down

recently from a record high back in december of more than 8 euro, there's a lot of speculation that sky would actually have to be a little bit of a premium here for those shares. looking at what the sky deutschland is doing, they have been in shambles for years and years because of subscription tv in germany seems to be quite a tough business because people don't want to pay a lot of money for watching tv, but recently there seems to be actually a little bit of a turnaround story looking at subscriptions in the first quarter. you saw 63,000 and that's reflecting also in sales last year and the company had a first positive edba for the first time ever in its history. so with that, ross, i'm sending it back to you. >> all right, annetta, thank you very much. that's the latest on sky.

meanwhile, it's also gearing up to be a big week for pfizer in its fight for astrazeneca. joining us with her thoughts, katherine boyle. we've had comments now from the prime minister over the weekend and also pfizer's ceo stepping up the campaign to win over the skeptical parliament. >> yes, absolutely, ross. it is very interesting, it's real crunch time this week for this deal. and pfizer seems to really be trying to bring it back to talking about the science and the medicine behind this deal rather than just the tax avoid dance, which is what is getting a lot of focus from politicians here. >> and they have to convince the politicians that the promises of keeping the idea in this country are legally binding. >> these are legally binding, we are committed to it, but let's face it, if you reduce your global r&d workforce, 20% of that is still going to be a smaller figure potentially than before, so it is all very interesting. if you want to take a look at

what the pfizer chief executive said this weekend, he's trying to bring that focus away from tax and back to the drugs and the pipeline behind that. >> when you look at this combination, it really meets the scientific needs, it meets needs of efficiency, it meets needs of strengthening our balance sheet and strength anything our physical position. and it allows easy shareholders to, number one, get an immediate benefit from the cash that we would pay them. and allows them to participate in a very strong combined company with great cash flows and great portfolio. and it allows a very efficient allocation of capitol by my company. >> of course, ian read will defend those ideas tomorrow in front of the business select committee. so he's going to really try to bring that focus on just what the benefits could be for both the u.k. and the u.s.

and let's face it, the prime minister david cameron has been criticized by some opposition politicians over here for not defending u.k. interests properly over the deal. he kind of fought back against that and tried to main taint neutrality in comments over the weekend to the bbc. >> i would speak out very clearly. i mean, i think the right thing to do is to engage early on, get stuck in with these companies as i've done and my team of ministers have done, to make sure we get good guarantees and the best deal for britain. don't underestimate the power of some of the things they've already said about making sure, for instance, 20% of their r&d jobs will be here in the u.k. >> and david cameron there very much emphasizing just how strong the commitments are. and something quite interesting this week is whether i think a lot of those, because they are going to be trying to rain promises from ian read to move the commitments from the five-year commitments to ten-year commitments. what i'm hearing from sources at pfizer is they don't want to

make the commitment without doing any due diligence with astrazeneca. they have not sat down with the board because they have not produced a deal to bring astrazeneca to the table. so they are not prepared for those commitments, but what is also interesting is the opposition leader is clearing a space in the busy diary to meet with ian read, the executive chief officer of pfizer. that could be interesting, too. >> not like he has control. he's in opposition but not in government. anthony, let's bring you back in here. all the activity we are seeing recently, what is that doing for your view of equities? >> it helps. if we look at the pros and cons, i think as much as we earlier talked about some of the shorter term issues, there's some longer term developments which helps the markets. and primarily indicative in growth on the u.s. side and the earnings. to stay with m&a, there's $1

trillion so far this year. the pushback is, is he getting excited or too hot? looking a the stats we have, we have about 2.6% of market cap. so anything is a capture of this on the u.s. side. >> we are getting near the top of the market when we sort of see -- >> the percentage of deals as part of the overall market is not that extreme yet because the markets obviously are fans therefore the competitive area of the market is lower than historical averages. >> so we are not talking at seeing a market that is frothy right now, which is where we are judging where we are right now in the business. you're just saying you are looking shorter term for a signal in the price momentum to talk about potentially taking us further and seeing a further rally from here, what kind of

signals are you looking for? >> the last six weeks, if you think about what is happening in the world, not much has changed. like we've had stronger in the u.s., but we think a lot of the jitters we have seen the last few weeks were driven by positioning and therefore price momentum. price momentum has been an extremely successful style in the last 18 months. and a lot of currents end up very much in the same names, being on the internet in the u.s., and to make things worse, the short side of the funding side or leg of all this is shorter atm. so this is all over a period of six weeks. some of the price action movement in the last few weeks have been more positive as well. so we have seen growth come down. we have seen some of the credit longs being unwound and we have seen some of the stocks showing signs of life. we do need that for the market to go higher, so we are keeping a close eye on price momentum and the flows have returned the

last two weeks, at least for the most of them. the hyper gross names are still very volatile in the u.s., but for the rest we think that we're starting to see this in the market, yes. >> the stabilization, thank you for staying with us. >> you are, indeed. we have some news coming out of the creme lip that says they expect the will of the people expressing referendums and the creme lip says the outcome of the references should be implemented in a civilized mapper without violence and it condemns the use of force against civilians in eastern ukraine aimed at hindering the referendum. still to come -- >> do you have a hope of living the life of a billionaire, ross? >> i really do. find out why the answer could be to be here in london. [ female announcer ] there's a gap out there. that's keeping you from the healthcare you deserve.

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we are now 18 minutes into the trade here in europe. advances outpace decliners by a ratio of 7/3. the dow jones stock 600, last year the ftse 100 was down marginally by .10. we saw the dow down on friday. up for the week, the nasdaq d n down .24%.

cac is down by a similar amount. and we are up by .25 for the ftse mib. we are looking at basic resources, jpmorgan has been revising its outlook for various miners. angelo american is up 1.403%. and the bhpbilliton is up 1.7%. on bond markets, take a look at this. between the ten-year gild, we are up this morning with the spread hitting around 125 basis points, the highest since the third quarter of 1998. treasury yields are rising as well, 2.6%. moving further away from the

yield of 2.57 we hit last year, but pretty slow going otherwise. and on the currency markets, low to focus on the euro dollar. you have to remember, last thursday we had a fresh 2.5 high on the euro/dollar ahead of the press conference. since then we have dropped a lot. we have 137.45. and at the moment, 137.33. we have stabilized after the selling. the euro here with the sterling is at 1.68. it is worth pointing out the cpi came out to raise the and yule growth percent and also thinks that interest rate in the u.k. might well be going up in the early part of 2015. previously they thought it would be going up in the later part of 2015. that's where we stand in europe.

what about what's going on in asia today. sri is with us for the first time this week. sri? >> reporter: hello, ross. we are down to the ukraine headlines you were talking about, but take a look at the outperformance here in the greater china markets. the shanghai comp and the hang seng up in the order of 2% if not higher. it's the property stocks leading the way on the hang seng. and it's really down to this framework of the authorities unveiling further capital market, liberalization. so the market is liking that news. and one of the big stories this week is in india. the new record high today pricing in a motor victory in the sensex. voting wraps up today in india. the official result will be out on friday at the end of the week. we'll be there covering that result live on the ground in the

indian capital. but here's the thing, there is room for disappointment. if mr. modi falls short of the 230/240 seats positive outcome that the market is projecting, then there is room for a big gap down in the indian equities markets. but in the here and now, we are seeing a big move higher in the indian ropi. ten-month highs against the green back. let me get back to the china markets because here we could see volatility. we'll have more data to chew through later on this week in the form of fixed industrial production and retail sales. if it hits stabilization, that could be pro-risk for the greater china markets and the region as a whole. back to you now. >> sri, thank you for that. that indian result will be fascinating by the end of the week. there's been plenty of room for speculation between now and then. look, i know you're in such a

big election, sri, but how did they work out with the exit polls? >> reporter: that is going to lead to a fair degree of volatility, i suspect, if there are some changes or if there are some disappointments associated with those preliminary readings coming out. i would suggest a lot of caution with these numbers because the exit polls haven't been the most reliable indicators of the final outcome. so wait and see is my advice for the official count at the end of the week. >> we'll do just that. sri, thank you, catch you later. and you can't help but think the markets right now in india are priced for perfection. you were talking about a potential volatility between now and the election results, but you do like india. how best to play it? >> we still like it, but we switched about two or three weeks ago as we went into the elections to switch from delta to options. and the reason for that is historically you see monstrous volatility around elections.

and at this stage for a risk point of view, we think you have a better chance at actually anticipating a further rally via option if anything does become debilitating and the market goes lower, you know what you lose. the premier of the option not just being exposed to the down side. >> if we see the markets come down briefly after this selection result, perhaps an opportunity to get involved and do it with buyer options and not buy the cash? >> but by then we'll reassess. i guess our point is to say given the price of the options now, you're better off raising your views than you are by the delta to then decide what to do post-elections. you kind of need to know the results eventually. >> great point. greet have you on today. and german chancellor angela merkel has made and offer which

already was rejected but they are waiting for a counter offer from siemens. i want to know how much division was beneath the surface between angela merkel? >> on a few messages for the markets regarding that bid, potential bid, but francois hollande said he was waiting for them to make an offer on alstom. secondly, the french government would not regret its choice, but they would prefer the solution for alstom. after talking with angela merkel this week, it was first and foremost a decision. nevertheless, ross reported that another company avira has been asked to make a bid for some assets of alstom, which signals the french government still wants to get involved in the story. the government last week said that the offer wasn't good

enough and asked the u.s. giant to sweet up its offer. they said they would be interested by the rail signaling business of general electric. and this is perhaps what siemens is going to offer. because this morning they said they would bring their rail signal part into the deal and part of the deal that would transfer to alstom in case of a deal or in exchange for its energy business. ross? >> stephane, are you going to move to london any time soon? >> i could, why, do you want to invite me. >> well, yes, now we are the home of more billionaires than anyone else. i think you'll feel at home. >> i'm not a billionaire. >> but you have the qualities of one. yes, this is true, stephane, london has clenched the title of the super rich capital of the world according to a study in

"the sunday times." more billionaires are living in the british capital than any other city including moscow and new york. the number of billionaires in the u.k. has risen to over 100 for the first time, which creates a combined wealth of $301 billion pounds. and that means we have more billionaires per capita than anyone else in the world. >> because we are little. stephane didn't know if that was a compliment or criticism. >> what? >> when you said he has the qualities of a billionaire. >> i meant that he can enjoy the higher qualities of life. >> just checking. >> he's well worth going out for a meal with. >> carry on. >> if you want to, i was leaving that for you. >> thank you. if you are a billionaire, where in the world would you live? obvious question, would you seek out a take haven or your own delicate private island? >> or would you live in london, which is what many do. let us know what you think and get in touch with us, tweet us

or direct a chat to us. i think what you do if you are a billionaire, you have multiple homes. so which one do you claim your prime residence? >> why would you choose? still to come on the show, how concerned should investors really be about low inflation. we'll get the view from atlanta president den this lockhart in an exclusive interview right after the break. stay with us. having the cloud allows us to rapid prototype a lot of ideas.

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welcome back to "worldwide exchange." russia could respond to the referendum in ukraine as russia says the outcome of the referendum should be implemented without violence. the deals keep coming. sky deutschland confirms talks. and ian read says the deal with astrazeneca would be a win/win for both firms despite pushback ahead of the grilling of the u.k. lawmakers tomorrow. and voting in india's mammoth five-week election ends today with the first exit polls due in just a few hours. the sinsex is at an all-time

high. just over an hour and a half into the trading session here in europe, we are weighted to the upside about 7/3 outpacing decliners. slim gains for the ftse which last week was just down .10%. now up a quarter. the cac is off .10%. >> what we are seeing in the bond markets is the yields sliding a bit higher across the curve as far as the ten-year yields are concerned. bank of america is targeting on the downside in ten year yields, 2.42. they want to see back above 2.74 in order to change their view on the downside in ten year u.s. rates. meanwhile, as far as

currency markets are concerned, 137.69 is where we stand. we got down to extraordinary 24 hours on the currency markets. we were at a one- .low having been up on thursday ahead of the ecb's press conference. just below 140, which is a two-and-a-half year high. now, of course we look at that, and timothy geithner says he would support a low to help barclays buy lehman brothers back in 2008 but then resulted in the biggest bankruptcy in history. the former u.s. secretary feels divisions between officials safehaven. british lawmakers do oppose the deal. andrew ross-sorkin sat down to talk about this and you can see the interview at 8:00 a.m. on

"squawk box." european foreign ministers are arriving for talks in brussells this morning. where they are expected to step up sanctions against russia. in the lance few minutes, the kremlin responded to the referendums in ukraine saying the results should be treated with respect and implemented without violence. pro-russian rebels declared victory in the referendum on self-rule for the east of the country. organizers said 90% voted in favor of a break from authorities in kiev. the eu, meanwhile, declared the vote illegal. we have a ukraine risk analyst from control risk joining us, stephen, however much we look at the results and suggest that the votes have been rigged, right now what we are looking at is certain parts of the you creukr pulling away from the kiev

rules. >> we are looking at how the results are being populated whether it means certain regions want to break away and join russia or if they are expressing a profound displeasure with the type of people in kiev with the ousting of the president yanukovych back in february. we heard from the russians they want the statement to the people's will as they recognize this, what does that mean in reality? a new constitutional agreement between the regions in kiev and the central government, or does it mean i'm included to see it as a political crisis coupled with violent protest and constant security issues on the ground and the inability of the authorities to reassess that law and order. >> it was a pew research poll done that suggested that 70% of the people in eastern ukraine actually wanted to remain despite having reservations with the kiev government, whatever it looks like now. if we keep that in mind and

consider that the separatists are talking potentially about having another vote in a week's time to join russia, where does that leave us? >> well, the russians haven't given any indication they want to take the two regions. they have to keep that in mind first and foremost. the situation in the eastern ukraine is very different from the one pertained to crimea before it was an exed by russia. the situation on the ground is fundamentally different. on the other hand, what we see is a crisis of legitimacy. in kiev at the moment, there's a presidential election on may 25th. it's to be hoped that that will mark a new chapter. and in your opening, the potential to start reassessing law and order in the eastern parts of ukraine. but at the moment what we see is a situation effectively of lawlessness and widespread access to weaponry and of up fortunately the willingness of people on the ground to use that weaponry. >> this has gone a bit further than moscow would have wanted because in the end putin asked

for there not to be a referendum, but there still was one. and we suggest that they are not that in control of events in the eastern ukraine. and i can't moscow wants to be responsible for this region. they don't want to move in to rule it, do they? >> i think wearing putin shoes, and looking at eastern ukraine, the crimea story is showing a very little chance in the thinking that it will return to you ukrainian rule. there's profound dissatisfaction with the people sitting government in kiev. and we have an important element of the problem, there's profound displeasure at low standards of living, at poverty and ukraine, you compare the eastern part of ukraine with the regions of russia across the border, there's a massive difference in terms of incomes and standards of living and ukrainians feel eventful of failed governments

and extremely corrupt governments and the fact that their lives are not improving. but quite frankly putting the genie back in the bottle is a different matter. >> stephen, thank you for joining us from control risks. the atlanta fed will talk to den this lockhart about low inflation in the u.s. is a concern, but he's upbeat about u.s. economic growth. let's get more on that. we are joined by yousef now. >> dennis lockhart decided to do this out of the financial center in duh bbai. when it comes to his outlook in terms of growth, he said he was optimistic there would be a rebound to the strength of 3% that he envisioned, but he also

admitted that the first quarter growth which came in .10% was weaker than he had expected and the future revisions may show even a contraction. also keep in mind that we are trying to understand how this setback in the first quarter affects the different uses of monetary policy tools. have a listen. >> i think there's a very high bar to changing the tapering decision, meaning either to stop tapering or to actually purchase assets. so it's a very high bar. it would require in my mind a fairly dramatic reversal of the economic momentum that we see. so all things considered with my outlook, i think tapering is going to phase out toward the end of the year. so to answer your question, it would take a lot to change that decision in my. . >> from what you are picking up in terms of data, do you still see a liftoff in rates in the third or fourth quarter of 2015

as the most likely scenario? >> well, i don't want to pip it down to a day or a quarter. i view the second half of 2015 as a personal projection of when the conditions are likely to be right, but it's very important to emphasize that the decision to begin raising rates is a function of the economy. and it really depends on how the economy evolves. so it's not set in stone in any way. and it's based on an outlook. my outlook is that we may get there by the second half of the year, but that's as far as i would go. >> some members take the view that the fed should raise rates sooner. one area of concern is the creation of asset bubbles, in particular, the bond market. do you agree? >> there are aspects of the bond market that have from time to time appear to be frothy if you want to use that term, particularly the high yield bond

market, but in an overall sense, i'm not concerned that the bond market is poised for a tremendous correction. it's my hope that as we get closer to the date, there will obviously be adjustment in the prices, but the market will anticipate that and it will be orderly. >> we are here in dubai home to the best performing stock market, not so far this year but also last year. as the fed continues to moderate its stimulus measures, what kind of impact will it have on emerging markets? >> good question. earlier in the year we saw a fair amount of turbulence, at least some emerging markets, and i think how emerging markets actually respond in financial terms, meaning their equity markets or debt markets is going to be a function of those markets and how prepared they

are for a change in global financial conditions, particularly u.s. financial conditions. so i couldn't predict on a market basis, but i would say that an improving u.s. economy means more exports of emerging markets. and it should mean for most emerging markets a better economy. it's a close enough connection between the u.s. and advanced economies state of affairs and the strength of emerging markets to view it as a positive as the u.s. improves. and joining us is john harvey, ethics strategy at saxso bank. we looked at the euro euro and .

agree or disagree? >> well, i think for now we have to call it a bearish reversal for the euro and swiss frank. some signs of broad dollar strength, but we need to see some follow through more across the board. we need to see more pro-cyclical of the expectations for the fed interest rates, et cetera, to call a broader dollar recovery. but this is interesting, it could be the beginning. >> do you expect the see the euro continue to trade the discount heading into the june meeting now? or are we likely to be stuck in the 137-140 range between now and the june meeting, do you think? >> well, i wouldn't be surprised to see it a bit lower, possibly toward the 1.35 or 1.36 ahead of the june meeting. but with the data flow, further ecb guidance we get, we have, for example, we need to hear where the bullish bank

contingent is on board. it's not about seeing a shaving of the last bits of the interest rate by the ecb but about whether we see some form of qu at the june meeting or will have to wait until later in the summer. >> they are not going to do that in june, are they? we expect the qe in june. it will be disappointed. >> i think it's a possibility, at least a very strong hint that we are ahead at the following meeting because they did underline that they are seeking to get more information, not just on the staff projections on up nation but this whole issue of bank credit to the private sector. i think that's the real key at the ecb. credit is now flowing into the economy that needs to if the european recovery is to gape further traction from here. i think that's the key concern. >> are you saying we won't get qe but they may talk about it? >> i'm saying we could get qe and they will talk about it. we could see what form or shape it may take. some form of lifting assets off

of bank balance sheet or a funding for a lending scheme or restarting the asset-backed securities market, something like that. not a broad-based sovereign bond buying scheme that we saw with the federal u.s. reserve. >> if you combined, you know, fed policy with the ecb policy by the end of the year, where would you expect to see euro/dollar? >> i would expect by the end of the year to see it near 1.25 if we do get the divergence in policy with the ecb moving in the easing direction and the fed tapering without any acceleration assumed in the forecast. >> john, good to see you. john hardy at saxso bank. australia will deliver its budget tomorrow. they will deliver the most savage cuts in decades. china retail sales and industrial output will also be released.

and singapore, malaysia and thailand will be closed. a rally on the time day of voting in india. >> we are in mumbai right after the break. we asked people a question, how much money do you think you'll need when you retire? then we gave each person a ribbon to show how many years that amount might last. i was trying to, like, pull it a little further. [ woman ] got me to 70 years old. i'm going to have to rethink this thing. it's hard to imagine how much we'll need for a retirement that could last 30 years or more. so maybe we need to approach things differently, if we want to be ready for a longer retirement. ♪

we have some comments coming out from the russian foreign minister, mr. lavrov, he says no new international talks planned now for ukraine. that's for those looking for key movements. the net profit is up 4.8% beating expectations. the carmaker's numbers helped by a weaker yen, but the sluggish sales are in the market. they predict 405 billion yen in net profit for the year ending march 2015. that compares with 425.4 billion estimated by reuters. it seems domestic consumption in japan is hit by the recent sales tax. meanwhile, sharp reported full results with a 130% jump in profit compared to last year but operating profit slumped. the japanese electronics maker is forecasting net profit next year to surge, but again

operating profit will slow as the benefits of a weaker yen fade. the senior analyst at jeffreys is joining us with thoughts from singapore. thank you so much for joining us. talk about the divergence between the net profit and the operating figures, what is going on? >> quite a bit of payments between capital raising and large below operating line items. so there are three factors, but this is not entirely new. they have been in the past with a big discrepancy between net profit, and this one is stemming from one of the gains in assets from technologies to offset companies that increases the risks in future, but for the time being brings cash in profits. that shows up in operating profit but doesn't filter all the way through because of several of the things in the net profit line. >> yeah.

what is -- what is the fundamental outlook here in terms of demand for its products? >> so the three main products that they sell, tv, mobile phones and lcd panels. besides that, they also have solar, et cetera. so this is a saturated market worldwide. their main market is gentleman patch, not growing competitions. mobile phones are limited in japan. the smartphone market, they are feeling more competent after the iphone was launched. so mobile phone, tv, the only place they seem to be doing okay is lcd panels. even solar for that matter next year will drop off. there was an increase in japan because of demand. so there are a lot of factors to hold their numbers for march 15, but for the most part the competition is intensifying. it will be a difficult time for them. they have come out from difficult times itself, but at

the same time they also need to raise a lot more capital than what they have so far. the net equity is about 5. they do need to raise a lot of equity, and that's going to put pressure on the stock. >> because the equity ratio is 8.9% versus what would be healthy for the company at around 20, i believe, but can i ask you about the yen strength n particular, because the weakness of the yen has been a tail wind for the mobile carrier last year. what if we see the yen stabilize around these levels for the next year and add in the impact of the consumption tax hike in japan, too. what is that going to do to the earnings? >> that's a good point. on consumption tax hike which actually inflated some of the profits for this year, it won't be there this year and will be there on the other side. on yen weakness, what is interesting to note is there are quite a few more companies with

far more sensitivity to weakness. of course, the core is weakening. 70% to 80% of the revenues are coming from japan. the sensetivity to foreign exchange is low. and even that, it goes away with time. when your core is weak, you are not able to build up capacity because the company doesn't have enough capital to build in more capacity. one market where they are growing, that's lcd panels. the market for smartphones is growing but they have a difficult time there as well because of capital constraints. that's why they need to raise more capital. so raising more capital, having yen weakness but also the consumption tax would be working against them in this current year. >> to get back to the point you were making on the operating profit, the forecast for the coming year is 10% lower versus the medium plan for redeveloping the business, in particular. what else are they off target on versus that medium term plan right now because it starts to

look like it is lacking credibility. >> to start with, the last year guidance we started with 85 billion yen. they are at 109. you can argue that maybe they were better than what they guided for. some people can argue that the guidance is conservative, but putting all things in perspective and decide which of the products you want to be in where sharp is, it is very difficult to pick any of them. so going forward, if you are talking about midterm plan and where the credibility is, if they are able to raise capital, a few things can change, but without that it will be a very difficult time for them because they have not exhibited any last-making business. all they have done is cut off a few people here and there, but they have not exited any business. the only company i keep talking about which has exited is panasonic. that's the only company in japan that i know of in the current environment that continues to exit. >> okay. thank you so much for joining

us. senior analyst at jeffreys in singapore. today marks the final someday of voting in india's five-week general election. ahead of today's exit polls, shares indicate a record high and the repeat was also sent soaring to the highest level since june of 20.13. we are in mumbai with nigel, the investors say don't trust the exit polls over the next few days or so. can i ask whether the exit polls traditionally would over or underestimate support for the bjp party right now? >> reporter: indeed, traditionally the exit polls throw up a bigger number for the bjp, but this time around the market men are expecting it will be right on target. so they look at the number out in the next five hours. at 6:30 indian time the exit

polls come out. today there are three big states that are going to interpoll. it's the final leg. and any number below the 250 number won't be good for our markets, but it's looking quite good because there's a belief that the number is likely to be around 250, 260, or 270. so it will be led by the prime minister. and that's the number we are talking about. all eyes will be ready at 6:30 today. and some crucial leaders are going into the likes of narendra modi and all eyes are on the three big candidates. as i said, any number below that 240 to 250 mark will be a disappointment. our markets are running away as they are up above the 7,000 market. the rupe is showing the markets

trading at all-time highs that we have never seen near 7,000. the bank is doing good with all the heavyweight stocks from ipc, they are running on the interday session. the stocks are not doing well because of the rupe showing strength which is not good for exporters, but in the next four hours, the exit polls will show the final data in the next four days. that's it from mumbai, back to you. that's the first hour of "worldwide exchange" with the second to come. the u.s. markets are closing out for the best of the year for the dow. back in a moment. you, my friend are a master of diversification. who would have thought three cheese lasagna would go with chocolate cake and ceviche? the same guy who thought that small caps and bond funds would go with a merging markets. it's a masterpiece. thanks.

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welcome to "worldwide exchange." i'm julia chesney. >> and i'm ross westgate. the cell lynn says the outflow of the referendum should be implemented without violence. the deals keep coming. sky deutschland is confirming takeover talks. pfizer fights back. the ceo ian read says a deal with astrazeneca would be a win/win for both sides. and voting in india's

mammoth five-week election ends today. the first exit polls due out in a few hours. the market is at an all-time high. >> you are watching "worldwide exchange" bringing you business news from around the globe. thank you for joining us on "worldwide exchange." here's how the u.s. is looking ahead of the dow opening. 21 points ahead. a weak performance for the nasdaq. the futures are higher following momentum on higher. the dow futures and the s&p 500 are a couple points higher. and for the nasdaq, five points higher. we'll look at the ftse global 300 stocks. i'm showing you the ftse 100.

ignore that. we'll have a look at what is going on there as far as the individual performances of the market right now. for the ftse 100, slightly higher at .20%. similar story for the european markets. the general market is a quarter percent higher just bucking the trend. the cac 40. over in france, down .10%. and the ftse is outperforming tomorrow near half a percentage point. so we are looking good with ukraine keeping a downplay on things. >> take a look at treasury yields slightly higher from where we were at the beginning of last week. 2.47% at the yield. we hit 2.5% sit at the three-month low. this is kind of interesting. the spread between yields at the moment. 1.7% is the gild yield. last the highest since the third

quarter of 1998. so it's been a long time since we have seen that spread. on the currency markets, the focus is euro/dollar. we are currently at 1.3763. we are at a two-and-a-half year high just below 140. and then we came down to a one-month low of 1.3745 on friday. we are currently above that level. let's recap what's going on in asia. the indian elections are happening there as well. sri has the update for us. sri? >> reporter: yes, the bench market in the stock market continues to march on to new record highs. we are knocking on the door of 23,500. as you mentioned, rose, the last day of voting today in indian, the dance of democracy starts to wind down and the markets are doing a jig as well. they are pricing in a modi

victory. now not too fast here as the exit polls have been notoriously unreliable. they got them wrong in '04 and in '09 as well. so a little bit of caution is warranted here. on friday we get the final official result. so, if we see modi's party with anything less than let's say 230 to 240 seats, then there is some room for disappointment in the markets. and we could see something off a gap lower, but in the here and now, we are seeing a big pop in indian equities similarly for the indian rookie as well. let's leave that aside as we see runaway gapes in the great chi in markets as well. and that's on the basis of some reform momentum at beijing unveiling further capital market liberalization frameworks and the market is liking what they are seeing. the property stocks are doing very well in hong kong today. just by means of note, it's

worth this, i was telling you more china data over the course of this week. fai, industrial production and retail sales. remember the trade za a was very strong last week, so if we see more of that positive traction, then that would be good news for equities on this side of the world. back to you, ross. sri, thank you for that. >> it was a big week for pfizer in its fight for astrazeneca. we are joined on the set laying out why this would be a big win/win for both in tend. >> absolutely. there are twists and turns every day at the minute. and pfizer is really back on the attack to try to make sure that this deal looks like it is all about science and medicine, not just about tax avoid dance. and this is a matter that was really being brought across by the chief executive ian read when he spoke in the video posted on pfizer's website over the weekend.

>> when you look at this combination, it meets the scientific needs. it meets needs of efficiency. it meets needs of strength anything our balance sheet and strengthening our fiscal position and it allows easy shareholders to number one get and immediate benefit from the cash that we would pay them. and allows them to participate in a very strong combined company with great cash flows, great portfolio. and it allows a very efficient allocation of capital by my company. >> but, of course, the fight for control of astrazeneca is moving from the boardroom to parliament this week. and that's where this is really going to potentially take some twists and turns. so we are seeing ian read and the opposite number of astrazeneca appear in front of the business select committee tomorrow. let's take a look at the u.k. prime minister criticized for

possibly being too pro-pfizer. we'll take a look at the accusations this weekend in an interview with the bbc. >> i would speak out very clearly. i think the right thing is to engage early on, get stuck in with these companies as i've done and my team of ministers have done, to make sure we get good guarantees and the best deal for britain. don't underestimate the power of some of the things they have already said about making sure, for instance, 20% of the r&d jobs will be here in the u.k. >> and that's david cameron there really defending his position but also trying to make it look as though he's defending the u.k. science jobs. >> that's the u.k. side but what about the u.s. side with the governors writing to the pfizer ceo saying this doesn't work and there are problems with tax aversion. they are against companies doing this, what's the look from the u.s. side? >> i think at this stage it sounds like all signs of ferry are coming out of the u.s. unless you suddenly enact some

retroactive tux bringing back, it's going to be difficult to do anything to derail this. what it may do is act as a kind of wake-up call to senators in the u.s. that possibly some areas of tax policy do need to be tackled. but i think unfortunately they may have missed the mark when it comes to this particular deal. >> $2 trillion worth of cash sitting elsewhere. for u.s. companies. if that isn't enough. >> katherine for now, thank you. and plenty more deals going on. and they confirm talks in the acquisition of fox's paid tv assets in italy and germany. any deal would be dependent on sky italia. rupert murdoch is going to take century fox's 70% take on the stock.

sky deutschland is currently up 6%. the chief investment from the u.k. at credit suisse private bank is with us. michael, food to see you, what does this all mean to you? are you happy to see it or are you concerned prices are getting rich? >> we are very happy with our basket of stocks, which has done pretty well this year. it did very well last year. what's happening with m&a right now is it's running to the reality of governments in france and the u.k. shareholders in the u.s. without the proposed deal were beat, and i think what we will probably see a lot more of is investors maybe punish acquires a little more harshly where the deal doesn't make strategic or financial sense. >> and there are plenty of deals that don't stack up in the long run, don't they? i mean, but is it encouraging that companies now want to do something more with their cash

rather than buying stocks? what is it the shareholders want at the moment? more buybacks or to invest it? >> i think shareholders as opposed to investors want the money back. they want the cash back in the form of dividend growth. dividends is another -- >> shareholder or an investor. >> an investor is someone to position themselves, for example, for a specific theme. so in the theme you can put together a basket of stocks that for a strategic industry or for balance sheet reasons you think are m&a candidates. they would always take it over. >> why would the shareholder want to invest for long-term growth? >> well, this is the difference. the shareholder is someone who opens the company already for portfolio reasons. what the shareholder wants, either the company to put that money back into, let's say in this case, long-term farmer growth products or giving the money to shareholders to put it

elsewhere. >> mike, plenty more to come from you. stay with us. also still to come, do you have hopes of living the life of a billionaire? find out why the answer could be to move here and join julia in london. ♪ ♪ over 1.2 billion eyeballs are on us during the two weeks at wimbledon. true tennis fans want to know what's happening, they don't want to just see what's happening, they want to know and understand why it's happening. anybody can just put data up, but we want to get a reaction, make it far more interactive. we rely on the cloud to provide

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a recap of the headlines, they respect the ukraine vote, but could they be preparing for fresh sanctions? inflated concerns. the french president dennis lockhart says low up nation is a worry. and the pfizer ceo reaches a deal with astrazeneca would be a win/win for shareholders and society. the european foreign ministers are arriving for talks in brussells this morning where they are expected to step up sanctions against russia. speaking moments ago, the polish foreign minister said further action would likely be discussed. >> i expect that the eu like poland will not recognize any

pseudo referendum whose results have been announced before taking place. we also confirm our refusal to recognize the annexation of crimea. >> meanwhile, the kremlin responded to the weekend referendums in ukraine saying the results should be treated with respect and implemented without violence. pro-russian rebels declared victory in the vote on self-rule for the eastern half of the country. organizers said nearly 90% voted in favor of a break for authorities in kiev while others declared this illegal. many are ready to help support crude prices in the event of a russian related disruption. the prime minister said he was ready to crank up production if tensions between russia and ukraine led to short ages. oil prices today are a tick higher. brent up to 108.37 and the nimex just over $100 a barrel. and london has clenched the

title of the super rich captain of the world. this is according to a study from "the sunday times." more billionaires are living in the british capital than moscow or new york. the number of billionaires has risen to over 100 creating a combined wealth of $301 billion pounds. so if you were a billionaire, where would you live? and tweet it in to say, on my own island in the caribbean. chris says simply, at home. where is home, chris? that's the point. let us know. give us your views and e-mail us at worldwideexchange@cnbc.com. >> i like the option of the private jet facilities to get me somewhere for shopping as you pointed out. i like the shopping option. chris was just saying he

wouldn't change a thing if we were a billionaire, he wouldn't change a thing. >> well, that's good. that means you're leading the right life already. >> only a third of the british, by the way, i just looked, just a third of those are billionaires. >> i'm surprised there's that many, actually. meanwhile, one could be set to leave britain. randy lerner confirmed that his cl club, soccer club, is now up for sale. they failed to qualify over the weekend as another team got a spot ahead of them. still to come on the show, how concerned should investors really be about low inflation? we get the view of dennis lockhart in and exclusive interview coming up after the break.

the dow is up with the future indicating 13 points up above fair value. the s&p fairly flat on the week. we are actually down .1%. the nasdaq is up 1.3% up about

four points. dennis lockhart says low up nation in europe, the u.s. and japan is a concern, but he's upbeat on the u.s. economic growth outlook. youcef, how upbeat was he on the u.s. growth? >> reporter: well, he was quite upbeat. remember, julia, he gives the speeches once a month. this time doing it from the dubai financial center. and also, again, giving his broader outlook, not just for the second quarter but for the remainder of the year. he made it quite clear that, yes, the first quarter came in weaker then a expected and weaker than he had expected personally at a tenth of 1%. and for the remainder of his target on 3% on the annualized basis, he's a non-voting member of the f1c. and there was an opportunity to

sit down to discuss his reaction to some of the recent data point that is have come out. we are talking about the u.s. labor market and the u.s. economic growth and how all of that really impacts the calculus of mop tear policy by the fed. have a listen. >> i think there's a very high bar to changing the tapering decision, meaning either to stop tapering or to actually purchase assets. so it's a very high bar. it would require in my mind a fairly dramatic reversal of the economic momentum that we see. so all things considered with my outlook, i think tapering is going to phase out toward the end of the year. so to answer your question, it would take a lot to change that decision in my opinion. >> from what you were picking up in terms of data, do you still see a lift up in rates in the third quarter of 2015 as the most likely scenario?

>> well, i don't want to pip it down to a date or a quarter. i view the second half of 2015 as a personal projection of when the conditions are likely to be right, but it's very important to emphasize that the decision to begin raising rates is a function of the economy. and it really depends on how the economy evolves. so it's not set in stone in any way. and it's based on an outlook. my outlook is we may get there by the second half of the year, but that's as far as i go. >> some members take the look that the fed should raise rates sooner. one area is creation of asset bubbles, in particular, the bond market. do you agree? >> there are aspects of the bond market that have from time to time appeared to be frothy if you want to use that term. particularly the high yield bond market, but in an overall sense, i'm not concerned that the bond

market is poised for a tremendous correction. it's my hope that as we get closer to the date, there will obviously be adjustment in prices, but the market will and 'tis pate that and it will be orderly. >> we are here in dubai which happens to be home to the best performing stock market, not just so far this year but also last year. as the fed continues to moderate its stimulus measures, what kind of impact will it have on emerging markets? >> good question. early in the year we saw a fair amount of turbulence. and at least some emerging markets. and i think how emerging markets actually respond in financial terms, meaning their equity markets or debt markets is going to be a function of those markets and how prepared they are for a change in global financial conditions,

particularly u.s. financial conditions. so i couldn't predict on a market basis, but i would say that an improving u.s. economy means more exports of emerging markets. and it should mean for most emerging markets a better economy. there's a close enough connection between the u.s. and advanced economy's state of affairs and the strength of emerging markets to view it as a positive as the u.s. improves. >> lockhart then seeing encouraging signs in not just the u.s. but the global economy. just to recap some of the risks he mentioned to the outlook, one being geopolitical risks, keep a close eye on ukraine. he made it very clear. also financial stability at the moment, he does not see any systemic risks which contrasts with the view by the fed

governor jeremy stine who said there could be possible signs of overheating in the bond market. again, lockhart says that's not the case at the moment. and finding that growth momentum and whether it turns out to be sustainable in the coming quarters. julia? thank you, youcef. good work. now for the latest of astrazeneca with a statement from pfizer ahead of their questioning in parliament tomorrow. he said that the commitments to the u.k. are tangible and legally binding. pfizer says commitments to the u.k. are potential and legally binding. they promise to keep 20% of the workforce in the u.k. for a minute mum of five years. but david cameron asking for more. >> yeah. we'll keep our eyes on that. we talked earlier with michael to get more thoughts on this. this particular juncture as we go through this month of may, okay, the dow is up at record high, but basically we have not

done an awful lot for global equities this year. what happens next? >> we have a bear market in volatility. a couple of the risky ones with the nasdaq and the shanghai, we are all at 10% levels. we are coming into a potentially nervous tier regarding qe where we are really beginning to be eased off qe. i personally see qe as something that should be an extraordinary policy measure. something you do when you have market dislocation. we are now on our third dose of qe in the states. and in europe i think expectations are pretty high. we get qe soon. i think the city is more of the view that the qe has something to do in extremists. not something you would deploy just to weaken your currency. i think we will probably get qe in europe if the data, the broad data weakens or up nation data continues to be weak.

so toward the end of the year, they want to get over the stress test and the asset quality review as well. >> do you think -- do you think it's more likely or less likely? >> i think -- doing qe is likely. i think the timing is more than 5 50%. still to come on the show, troubling waters for the big blue. the ibm ceo says they are facing a rocky time. but what are the plans for growth? we'll have details next as we do so. futures are trading on this first day of the new week. cars are driven by people. they're why we innovate. they're who we protect. they're why we make life less complicated.

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welcome to "worldwide exchange." i'm julia chesney. >> and i'm ross westgate. the cekremlin says the outlook the referendum should be implemented without violence. and takeover talks are confirmed by sky.

and pfizer says a deal with astrazeneca would benefit both. and the first exit polls are due out today with the stocks up in anticipation of the results. >> you're watching "worldwide exchange." bringing you business news from around the globe. so we heard from the pfizer ceo over the weekend about the benefits to the u.k. into research and development. we also had a statement out this morning to say the commitments of the u.k. are tangible and legally binding. they are also saying it admits a statement supporting astrazenca's buy to the committee would create a powerhouse for the research and development to remain in the u.k. it sees great benefit to the u.k., patients and to science

globally. they are very committed to investing in to u.k. science. everything that politicians want to hear ahead of that tomorrow. and we'll keep an eye on euro/dollar that moved quite a bit thursday and friday swinging to a one-month low. medium term inflation are the main criteria for a decision in june. we will get some action but he says s inflation is the main criteria. this will not affect the exchange rate itself. looking at the u.s. market ahead of the open. we saw a solid performance with gapes across the board with the

second highest for the dow 2014 higher by 8 points. the s&p 500 is higher by 2 points and the nasdaq is also higher. here's a quick look at the european markets. ukraine right now keeping lower than potential gains for the markets with the ftse 100 up by .16%. the cac 40 is down by .18%. investors are starting the new week and here's a thought of some of the guests we have already had on the channel. >> you are not going to get any volatility whatsoever. so the guidance policies are keeping an eye on the volatility. it is very short one year, one-month growth.

but it is mainly due to the front end. they are going to go up in price because the only other commodities to the world from these is russia. who is going to make sure the price to the chinese is going up? it really is striking to think about the strength of the ftse and that the 250 shares are predominantly u.k. domestic stocks. whereas in the top 100, they are predominantly overseas folks. i think that speaks very low for the british economy. joining us now is the ceo at cass investment. we started a new week with the

dow at a record high. divergence between the nasdaq with the stocks selling off an awful lot and people are wondering where the value is at this particular moment. where is it? >> it's not based where i am in the u.s. the u.s. is one of the most expensive markets in the world. it is not bubble territory, it's noter the tbl. returns should be lower for small caps which are more expensive. >> this is despite the sell-off from the russell? >> yes. we have seen relatively large caps in the past 50 years, but what you have with different opportunity sets, right now it is mostly globally. a lot of countries especially in europe and there are some incredibly cheap. the greece's of the world, the russia's of the world and the emerging markets on equities. >> are they cheap for a reason? >> well, what happens is templeton used to say don't ask me where markets are best. ask me where is the most

miserable? investing in the markets cheapest, they are cheapest for a reason. usually they have gone down a lot. so there's a lot of negative geopolitical headlines. greece is the perfect example with the strongest returns when things go completely miserable as they are on russian equities to simply less bad. the great example is greece the past few years and italy had the best performing stock market in the world. >> what you are saying is you need a marginal. >> right. they start getting better and then the stocks can really explode upwards. >> russia is 15% right now from the loans, is that including the horrific to the not so bad or are you still invested in that often? >> valued invester, it is something you use for the next one, three, five years. but russia is a 15% to 20% return the next five years.

>> based on the strategy you talked about, you were not invested in the u.s. last year. >> that's the problem with using evaluation, right? the u.s. could go up another 30% this year. they usually max out, but the only thing that changes is what people are willing to pay. if things continue to go up, it could easily go up all more. but then japan sets the stage for the next secular bear or the next secular bull as well. >> do growth rates matter here? i mean, we get divorced quite often in the underlying economic issues. >> here's the problem, the growth rate is going forward and you have to be right on in predicting those rates. the worst trailing gdp and the worst five-year gdp kills investing in the best of the best. but that's the kris call ball

you need. >> i'm working out if the outside is the best. you want to decide if you want to investigate in greece and russia, but always investing in the cheapest is not the most important. you are also avoiding the columbias of the world and a lot of other countries that are more expensive. >> when you talk about this -- >> using value indicators, they generally line up on the same side. so you can pick any russian indicators right now and will say the same. but we like the ten-year shaler mvp. it helps to smooth it out with the expansions as well as contractions. >> you mentioned greece and russia. brazil is the great place to be the next five years. >> the time frame on this is

important. >> we only rebounce this portfolio once a year. so the deep value type of stocks you need to give time to breathe otherwise they simply need to rebalance something else going down. >> i have a quick question, but your book, where are the bubbles? do you see any right now? >> that's fine. >> that's good news. i just wanted you to get that in. you generally don't. >> there's a full spectrum. things are slightly expensive. there's a -- i like that. i feel better now knowing that. back to the european foreign ministers wondering if they step up sanctions against russia. speaking moments agoing the polish foreign minister will be discussed. >> reporter: i expect the eu like poland will not the and

necation of crimea. >> meanwhile, the kremlin responded to the weekend referendums in ukraine saying the results should be treated with respect and implemented without violence. pro-russian rebels declared victory in the southern half of the country. organizers said 90% voted in favor of the authorities in kiev. meanwhile, the u.n. declared the referendum illegal. and the exporters are happy to help support crude prices. saudi arabia's oil minister is ready to crank up productions if tensions between russia and ukraine lead to shortages or prices are a little higher today at 108.39. the ibm ceo says the company

is facing a rocky time, but she and management have a clear vision for how to pursue future growth. she told "the new york times" we are transforming this company for the next decade. the message she plans to use at ibm's analyst meeting is on wednesday. last month big blue reported the lowest quarterly earnings in many years. investors say a company is ignoring shareholder concerns. the financial times reports a group of pension funds will submit the proposal this week to be voted on at all seeking a greater shareholder rights says how the ceo is still holding up.

just over 80%. and nasdaq name d friedman who left the firm in 2000 who was recently ceo of the carlyle group. he is under pressure to build a succe succession. the frankfurt is just up marginally. up next, pfizer's ceo makes the case as to why a astrazeneca merger is a win/win for everyone involved. [ female announcer ] there's a gap out there.

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siemens designed and built the right tools and resources to get the job done. you're watching "worldwide exchange." >> welcome back. these are your headlines. the kremlin says it respects the outcome of the referendum in eastern ukraine, but could europe be preparing fresh sanctions? and concerns with dennis lockhart saying low up nation in

the states is a worry. and pfizer releases a statement to british lawmakers ahead of a meeting tomorrow saying a merger would create a new scientific powerhouse. pfizer is under fire pressing its case with it proposed a $106 billion takeover of astrazeneca. marginally higher over half of a percent. good morning, jackie. >> reporter: pfizer is fighting criticism that the astrazeneca takeover saying the u.k. strong rnd is a key reason for the deal. the company is coming under fire in the u.s., u.k. and sweden given the big job cuts after these big types of acquisitions. this would be the largest

foreign takeover of a british company provoking the government to seek binding commitments to protect skilled workers and scientific research. in a video on pfizer's website the ceo says this would be a win/win for the company and would be easy. >> when you look at this combination, it meets the needs of efficiency and meets needs of strength anything our balance sheet and our fiscal position. and it allows us to get and immediate benefit from the cash that we said we would pay them and allows them to participate in a very strong combined company with great cash flows and great portfolio. and it allows this by his mom as well. >> pfizer has pledged to complete astrazeneca's rnd

center in cambridge and put 20% of its research staff in the u.k. if the deal goes through. the read come secure promises to pfizer to keep jobs in the u.k., but he wants more. >> i would speak out very clearly. i think the right thing to do is to get stuck early on with the companiesed a i have done in my policy. don't underestimate that. pfizer has until may 26 whether to sweeten its offer as is

expected for it to do or pfizer we walk up a half percent as well. ross and julia, back to you. thank you for that. that's the latest from the rangles with that. the wall street journal reports that deutsh telecom is looking into a breakup fee of more than $1 million. they also want the management team to be kept after the merger with t-mobile. u.s. regulators oppose consolidation in the wireless market because they believe it will hurt competition. sprint, t-mobile and deutsch telecom. deutschtellcome is under fire. still to come, geithner is spilling the beans. find out what is in the former

treasu treasury's biography, next.

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timothy geithner says he would have supported a fed loan to help barclays buy lehman brothers. on the weekend of september 2008, it resulted in the biggest bankruptcy in history. in the stress test published today, the former presidency reveals this between officials who tried to save lehman. the fed's help wouldn't eliminate the risk to barclays and british regulators opposed the deal. andrew ross-sorkin sat down with

timothy geithner and you will see that at 8:00 a.m. today on "squawk box." a check on the u.s. futures right now, adding to some of the gains, some wider gapes in friday's session with the dow indicating 22 points right now with the s&p higher at 4 points with the nasdaq up 9 points. >> joining us is bob from the cme. very good morning to you. what's the key for you this week? >> well, i think we go into a couple critical days and a very critical week. that's not typical to happen in the middle of the month like this, but i just think the record highs aren't significant unless we can get something behind it. we are pretty much through earnings season. not very much exciting coming out. a lot of the momentum stocks

like facebook and tesla. it will be interesting to see what happens with the nasdaq this week. if you get acceleration with the dow and s&p, do the momentum stocks pick back up? does biotech recover a little bit. if those things happen, then you will scare some of the seasonal sellers back into the market if not that, at least halt some of the selling that tends to happen at this time of the year. >> what do you make of the did very je divergence of the dow 1.3? >> it is not enough of a did very jeps divergence to matter. risk and reward, you can't separate the two. when you have stocks up that high and they have come down, like the russell has, for example, you will see that snap back but something has to pull it back up. normally technology stocks can

lead us in the early stages of the bull market. the larger caps have to lead in the stronger stage if that's where we are at. what about triggers as far as data is concerned with retail sales and inflation data, where should investors be focussed? >> i think you are right in mentioning the retailers. inflation numbers nobody is worried about. but everyone knows the kind of weather we have in the u.s. is widespread. and i'm a believe that actually affected the economic output quite a bit. and lockhart said it will take a lot to turn the oceanliner to turn around. housing was a lack of inventory and that could turn around with the weather breaking and it has broke up and will stay that way. >> nice to talk to you, chief market strategist at tesla partners. that's it for the show.

>> stay stateside for "squawk box."

good morning and welcome to "squawk box." pro russian separatists declare victory after the vote in the east. and officials in kiev call it illegal. pfizer making its case for a deal with astrazeneca. and ibm's chief says the company is facing a rocky time. it is monday, may 12, 2014. "squawk box" begins right now. good morning, everyone. welcome to "squawk box" on cnbc.

i'm becky quick along with joe kernan and andrew ross-sorkin. the calendar includes the april retail sales report and an inflation with consumer prices, jobless claims and housing starts. midweek the nation's biggest retailers will be starting to report. we'll get a look at how much weather plays into the results. macy's walmart, jcpenney, in order nordstrum's and dillard's are on the list. if you look at the futures this morning to see how this is playing out, at least at this point there are green hours across the board. dow futures are indicated to open over 25 points. the s&p over 3.5 points and the nasdaq up over 7. as for the ten-year note, the yield has picked up as prices come down. yield is sitting at 2.641%. and andrew,