welcome to "worldwide exchange." i'm julia chatterley. a mixed picture for europe's manufacturing sector. momentum slows in germany, france and italy. this is the latest data out of china shows manufacturing hitting a six-month high. we will keep our license. bnp paribas shares rally after the lender will be able to continue to operate in the u.s.

despite the guilty plea. it assures shareholders that it has enough cash to pay the fine. former french president nicolas sarkozy, is he paying for questions over allegations over misuse of power. the ukrainian president calls for a cease-fire against the pro russian rebels. display you're watching "worldwide exchange," bringing you business news from around the globe. a warm welcome. we had european pmis out this morning. we've now got the complete eurozone manufacturing pmi coming in at 51.8. the forecast 51.9, so pretty much in line with expectations. giving you a brder picture there. so just a slight softening there

as far as the pmi readings are concerned. a quick recap, german manufacturing growing at its weakest rates in six months. we've had the french manufacturing activity shrinking this time at the fastest pace in six months. but the spanish activity was a stand out performer dproeg at the fastest pace in seven years. this is the broader picture that we've got. we were expecting to see a bit of optimism. italy still staying above that 50 level. it came down to 53.2 in may to 48.2. the eye tall yaps mentioning the fact that it's still staying above that 50 level. let's get to daniel from morgan stanley. just confirming some of the divergence we see between the likes of france and germany, and improvement for spain, too, which is quite what you're seeing. >> yes. this is encouraging when it

comes to southern europe. to support the notion of growth towards the reformist economies in the region. we are more positive than the consensus and ireland, as well, is our own medium sized economy in the region that has to be doing more reforms than average. and now this seems to be showing. i think spain in particular is likely to outperform this year and next when it comes to gdp growth. >> is it consistent what a 0.3%, 0.4% gdp growth in the eurozone in the second quarter? >> that's right. the number as a whole has consisted with a growth rate around 0.3%. and in particular also in the second half of the year.

what we have seen from the larger countries, it's some sort of moderation, the growth momentum. on the other side, the plan at the moment seems to be underperforming even that with pace of the economic growth in the region. >> how have you incorporated mario draghi's stimulus efforts last month into your numbers as we push through the second half of this year, if tall? >> no, i think it is very early days. obviously, both measures end up being implemented yet. the first of these liquidity operations will be carried out in september. there's been a minor asset on sentiment and in exchange rates and in bond market. but that has been also relatively small for now. what i think is that this measure seems to go in the right

direct. they appear to be able to provide a stimulus. especially in the southern european countries from spain to italy. so it's helpful at this stage, but it's not been implemented yet. and it's likely to take three or four quarters. >> you mentioned earlier that it's not about the divergent growth between the core european countries. it's about reformist and not reformists. if you go back, you were mentioning there as far as italy is concerned. how do you feel about the italian situation right now? >> well, i think italy is behind the curve relative to this group of reformists, the smaller ones, like spain, portugal and ireland. what we have seen is a shape for the better.

the prime minister from economic policy agenda. i think it's a step in the right direction and if it is implemented, this is likely to change the near term economic outlook that may be having beneficial effects in the longer term. it started to put in place some cyclical measures, like payment of government arrears. they should contribute to stabilize the cycles. and italy also is trying to put in place some reform. the bulk of them have yet to be implemented. we will be watching and assessing the real economy is precisely this degree of implementation. i'd say up to now, spain looks ahead and italy looks behind when it comes to structural reforms in particular. >> thanks.

china's official pmi rising in june to a six-month high. that's compared to the pmi reading for the country which shows the first expansion in six months. they were at 50.7, it was lower than the flash estimate of 50.8. we'll be talking about that a little later on in the show. the flood of economic information continues today with the ism manufacturing numbers. we get the reading on the private sector employment with the u.s. edp data. we have janet yellen also due to speak later in the day, too. on thursday, the ecb makes for the first time since mario draghi's unprecedented move into negative rates. the jobs numbers released a day early thanks to the july fourth holiday. find out why some analysts are expecting a drop from the main numbers.

and one year on, the bank of england's mark carney sees his first anniversary in the hot seat. but is there really that much to celebrate? and is japan's abe getting the latest reading with a full nat analysis with a tankan survey. welcome to yesterday's trading sessions were equally split between the gainers and the losers up 0.3% on the stoxx europe 600 this morning. let's take a look at the individual performances for these xhkts right now. continuing to watch what's going on as far as bnp. let's have a look at some of the

top stocks we're keeping an eye on in today's trading session. ocado down 4.9% despite profit in the first half of the year. products supplied by the market posted a 16% surge on sales putting the firm on track for its first annual pretax profit. shares in the firm were up some 24% over the last year. so a bit of consolidation it seems. bilfinger down just shy of 14% in early trade after issuing a profit warning. the company says german wind energy provided at no charge is preventing the construction of new car plants in poland right now. let's take a quick check on the foreign exchange rate this morning, too. euro/dollar, 1.3690. yesterday seeing a bit of a stabilization in dollar/yen from the sell-off we're seeing in previous sessions. taking good news from that

tankan survey about future investment going forward. in particular, aussie/dollar, gains up 0.25%. the rba meeting overnight holding rates unchanged. i think investors were expecting a pushback and they didn't get it. now, as i mentioned earlier, bnp very much in the spotlight still. it's one of the biggest advancers in europe this morning as investors welcomed the conclusions to the u.s. sanctions violations row. the bank pleaded guilty paying a records fine of nearly $9 billion. in a conference call this morning, the ceo said the bank regrets its activities and assured investors they would not be adversary affected.

>> the $9 billion that's walking out the door today is your money. we do these cases over and over again and shareholders' money walks out the door. until shareholders demand from their boards that those boards choose leader who understand what it means to create a healthy culture of compliance, the money will keep walking out the door, we'll have to keep doing this work. in paris to give us the latest, stephane, to what extent is the rally we're seeing today relief? >> yes, so it is, because the bank announced this morning that it will not scrap its dividend. the bank also explained that there was no rush to raise more capital. is that compatible, realistic?

we're going to discuss these announcements made this morning. thank you for being with us. first of all, the bank announced this morning that it will not drop its dividend. is this relief for the shareholders? >> for sure. this komps for us as a surprise. for the sure, it's good for investors and it's a way to ensure that they have a conservancy and will be able to contribute to this mess. in our estimates, it will have 0.10% by tend of this year. but that it is, i have to say

bnb is -- to imagine that it was correct or just this guidance going forward. >> if the situation is owed at 10%, which is the income guidance, this means for that generation there is no need to raise additional capital. but going forward, we have to issue some capital.

>> bnp has to plead guilty in the united states. that's important for its image. >> yes, it is. on one side, you have to know that some investors in the united states have not the right to what we -- has been in activities. and for sure, we think that this will affect bnp on acquiring new customers. there has been a compilation of the license in the united states, which for sure is not the case. so at the end of the day, the whole impact will be only on -- meaning that in acquiring and making this. >> what about other european banks and specifically other french banks? we know societe generale set aside some money, but given the size of the settlement, do you

think it will put much more in site? >> again, this is a difficult question to answer. what i can say is that we switch from having also shock on the regular side to having shock right now on the litigation side. it is clear that banks will have to put more money aside to be with litigation. we know credit agricole and -- are in some investigation with regard to the u.s. government. for sure they come out with some kind of fine, also. for the time being, it is very difficult to decide and we also know that there are some other litigation pending. >> thank you very much for being with us. thank you for your comments this morning. for now, i sent it back to you in london, julia. >> thank you so much, stephane.

we'll catch it with you later in the show. still to come, concerns over some of the nation's lenders after a run of the bank. we'll be taking a closer look right after the break. stay with us.

china's pmi rose to a six-month high. sri, if we look at the details, manufacturing jobs are still being shared and this is a marked slowdown in export orders. are we right to still be worried by these numbers? >> i think you are right to be cautious, julia. i can a lot of economists are saying the same thing. we need to see more of the same to see some real conviction in this yes. but the world's second largest economy is stabilizing. you can probably put that down to the impact of the targeting easing measures, the mini stimulus measure that's we've seen from beijing over the past year or so. they are starting to have an effect on the broader economy and we're seeing that in the

data in the pmis now. i want to draw attention to the private forecasters numbers, as well. hsbc did confirm in large part what the official data manufacturing was telling us. despite the fact that the hsbc number, 50.7 was lower than the flash estimate of 50.8. let me say this. you have to be cautious about the trajectory of the chinese economy because there are still a number of stress points, still a number of challenges that we have to contend with. yes, the economy is on the mend, but we are not out of the woods especially when you consider the softness in the housing market and the problems that the banking industry still continue supposed for the banking system, the risk of default, etcetera. so broadly, a lot of economists are telling us that we're going to see and expect to see more

stimulus measures, more incremental easing this quarter in the third quarter to keep the economy on an even keel. back to you, julia. >> thank you so much, sri. maybe we dig into the property sector later on in the show. we will bring that to you. for now, bulgaria's concerns over the central lender has eased. the european commission approved a credit line of 1 is.7 billion euros for the company. a bank run which led to the lender being nationalized. authorities blame an organized attempt to destabilize the country's financial system. peter, economist at nomura joins us now from london. can we quickly clear something up? i believe that introduction is quite misleading. this isn't money coming from the european commission, is it? this is about money they're signing off on from the

bulgarian government. >> exactly. this is money the bulgarian government agreed on sunday to provide to the banking system which requires european signoff because they're providing money inside their own country. it's not a classic bound for payment from the european commission or what we saw for instance around the european commission. providing in the periphery. >> is the currency board at risk? >> this is very unpredictable. i've never experienced this, the oligarch getting back at each other to try and destalize a banking system. they highlight a very serious problem that bulgaria has around

the forces in the economy. for now, this largely covers a large amount of the hole that exists in the banking system. so for the moment, there's never been pressure of households trying to convert deposits into euros, all banks trying to draw money out from this intervention. to create that from happening, we would see greater risk from the board. >> could you put the numbers on this for me? if i look at the mpls, it looks quite terrifying. but you yourself say even in the worst case scenario, the whole in the sector is only 2.6 billion euros. so it seems very manageable. >> absolutely. assistance is about 2%, 3% of

gdp. so it's not insubstantial in terms of the size of the economy, but bulgaria is lucky. it has very low debt level. so there is the ability the absorb this at least for now domestically. i think we have to realize we have three months prosecute the election. ongoing protests have been happening there now since the middle on of last year. so this is basically a short run, certainly, but a much greater stability in the political scene. >> so you talk about the political vacuum that we've got right now, the construction, the strange elements that seem to be the banking system right now. does it makes sense that bulgaria can raise ten-year debt to 2.95%? >> it just compares all the european countries on the ground and doesn't look at credit and fundamentals. but i think it's a classic

example of the market running away from itself. we've seen that a lot talking to investors. investors don't want to be investing in these types of countries because of the inflows they're receiving and because of the rally they're seeing in periphery debt. i think that's storing up across the eastern countries, especially countries like bulgaria that have additional problems. this is definitely stirring up issues for the future. >> peter, thank you. ukraine president ends the cease-fire with separatists. both sides have accused each other of violating the troous. now, in corporate news,

french cosmetics giant l'oreal settled over deceptive skin care ads. the ads they ran was instantly improved skin quality. under the settlement, l'oreal is barred from making claims have have not been backed up by scientific proof. it's a shame. i was hoping that would be working for me. life after death? on tv at least. yahoo! is picking up on shows of community. the sitcom about a study group at community college have a cult-like following but have few ratings. the company has been expanding its video content as it tries to compete with the likes of netflix, amazon and hulu. what we want to note today is

what kind of change do you want to bring back? join is in the conversation here on "worldwide exchange," get in touch with us at e-mail, via twitter or direct to me. i think we had a vote for gossip girl, the production talent here. that was just the boys. i don't know about the girls. still to come on the show, are europeans about the hang up on charge as a new -- kicks in? some say this is just the start. stay tuned. we needed 30 new hires for our call center. i'm spending too much time hiring and not enough time in my kitchen. [ female announcer ] need to hire fast? go to ziprecruiter.com and post your job to over 30 of the web's leading job boards with a single click; then simply select the best candidates from one easy to review list. you put up one post and the next day you have all these candidates. makes my job a lot easier. [ female announcer ] over 100,000 businesses have already used zip recruiter and now you can use zip recruiter for free at a special site for tv viewers; go to ziprecruiter.com/offer2.

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divergence in european manufacturing growth eases in june as momentum slows in germany as far as italy and spain sees activity accelerate. this is the latest data out of china showing manufacturing at a six-month high. we will keep our license. bnp paribas shares rally after the lender will be able to continue operations in the u.s. despite the guilty sanctions plea. leaders assure shareholders it has enough cash to pay the record fines. and comeback ambitions, nicolas sarkozy is being questioned over misuse of power.

france's government saying he is subject to justice just like everyone else. >> the uk's president calls an end to the ease fire as he orders attacks in the east to liberate the land. we've had some breaking news out of japan. prime minister shib zoe abe's cabinet adopting a resolution dropping the ban on collect he self-defense. this is a huge push in japan. it basically relaxes the limit on allowing since the end of world war ii. this catches up with what we're seeing in china and the military spending relative to them. we'll keep you updated as we get more comments on that right now. now, we've got some comments out of the uk from the bank of england from their financial

stability review. we saw them adjust the -- as far as mortgages are concerned on banks right now. we'll give you some of the minutes in the meeting. they're saying that they are going to monitor lending to ensure the risks don't shift elsewhere. it comes after setting limits on value limits to income loans. the conditions aren't binding in the markets compared to what banks are giving to have i said and businesses as far as loans are concerned. they saw risks and sale risks, the minutes of the meeting that we saw last week. they're going to take a closer look at the underlying standards in the leverage lending markets in particular and they'll continue to monitor the market closely and adjust the tools as needed. one member showing housing stocks is not the main driver of prices right now. or price rises, at least.

most numbers expect the housing shortage to be the underlying driver. and stricter limits on the four to five-time incomes. only allowed above that 4 1/2 times income. that's the latest on those minutes. let's now bring you further breaking news on a day of pmis this morning. we've had the uk manufacturing pmi coming in at 57. the forecast was at 57, so absolutely inline as far as those numbers are concerned. further strength, of course, in the uk manufacturing level. stop comparison to some of those readings that we got from europe in particular. staying with the manufacturing sector, mobile manufacture breff breffo keeps all of its

manufacturing in the uk. the founder and ceo of pbreffo, patrick, welcome. briefly explain what you do with the company and why you keep your manufacturing base here in the uk. >> sure. we are a designer and retailer of consumer electronic accessories and we manufacture all of our products here in the uk. initially, we've been around about 3 to 3 1/2 years and we looked to manufacture our products here so we could maintain control over the manufacturing process. >> so you're willing to sacrifice cheaper labor abroad in order to be able to control what you create here in the uk? >> absolutely. and that was intentional from the very start. so we wanted to be able to manufacture here, be able to go down to the factory, take a look at what we were doing and how we were developing our product. and then the advantage we found, a lot of advantage out of doing that from the very start, our ability to turn around product

quickly into the marketplace was very beneficial to our retailers and distributors. >> do you have a sense of how much that's costing you? >> yes, i do. we had obviously looked at, you know, manufacturing overseas as well as manufacturing here. the cost of doing that. and it is still cheaper to manufacture overseas, slightly cheaper. we looked at all of our products. we looked at the bottom line and then we looked at having everything done overseas. and the profit margin -- or the difference is very slight now. due to the fact that our entire process is pretty much automated. if you take that automated process and move that over to asia or somewhere overseas and you're taking the labor expense out of the production process and it's pretty much one for one. >> so that's the crucial point. you're stripping labor costs out of there. as we head into earnings season,

how much of an impact is that having for you? >> it's not having too much of an impact. again, as i say, the bottom line, what was most important to us with the ability to control the product, to control the manufacturing process, to get the quality manufacturing, for example, all of our products are manufactured here. we use quality premium in our products. all of the packaging, everything is done here. so we're able to kind of -- we're able to utilize that. we're not too sure where the quality comes from and that reflects in the pricing strategy. >> you obviously manufacture mobile accessories. iwatches are something that we focus on. is that something you're looking at and what happens? >> absolutely, absolutely. i think everybody probably is. the hot trend at the moment is wearable tech. so we're all looking at the market like, you know, the iwatch and when and if that does come out, everybody is looking

at that. for an accessories manufacturing like our studies are very important because we are able to and we want to be able to adjust to whatever that accessory or whatever that product may be. and try and accessorize it as innovatively as possible because everybody is going to come out of the same thing and we would look at what can we do differently. >> we are running out of time. are you looking at how you would be able to text while you're driving, is there a solution to that? >> that is a scenario we are looking to move into. we are low tech at the moment and we're looking to move into high tech in particular with the i whatever that may come out. a big issue for a lot of people is texting while driving and making calls while driving. it's fast becoming illegal worldwide, but people are still going to do it. so we're looking at what we do as a company is we look at what is the solution to that problem.

so we have a few ideas and a few products lined up that might address that. >> thank you. the founder and ceo of breffo. let's take a quick look at the european markets this morning, holding in positive territory, gains between 0.2% and 0.3% despite a weaker performance as far as the pmi manufacturing data, the likes of france, weaker as far as italy is concerned. above that 50 level right now, the uk coming in bang online at 57 for the june reading. as you can see, those markets higher this morning. quick check on bond markets this morning. broader risk on sentiment across the markets right now. you can see yields a touch higher right now, the ten-year treasury trading at the 255 level and ten-year gilt at 2768%. dollar index hitting seven-week lows right now. dollar/yen pushing higher despite the sell-off we've seen in previous sessions.

101.50 is the level there. taking some post signs from that tankan despite the consumption tax impact. beginning to watch that one there, too. now, the new eu roaming charge capped television interviews at midnight last night. under the new rules, the maximum charge for jot going calls will be 19 cents per minute. so 6 cents for outgoing text messages and 20 cents for a megabytes download of data. the european commission claims roaming fees will soon be completely banished. if finish line is in sight. i'm confident that by 2015 the

fee will be gone forever. >> analysts at citi joins me now. we were just giving our viewers an indication of how much the costs have come down. give me a broader perspective of how significant the fall is and is it completely right that the activity will be completely excluded soon? >> good morning, julia. yes, it's coming down. the latest is that 20% for voice and text and not far off 50% for data. if you get back another year, data has come down by 70%. if you look at the price cap that the european commissioner buys to retail prices. so if you want to on the default plan for the operator, you shouldn't be paying more than 20 cents for megabytes. in terms of what happens next year, the commission looks to eliminate it altogether. that is part of a package that is with the nation's faced right

now. it passed its first hearing before the european elections in april. i have to say it's not guaranteed this the pamg gets through. i'm not sure that the nation states some benefits to worry about and some of these extra features. because at the end of the day, we are in the middle of a program of reducing rates, anyway. consumers are getting better value from the operators because of the price caps already. >> it's also not in their interests surely to see these go down to zero. are we looking at a strauk turl shift here? am i going to be able to buy a sim card in europe and go to

germany and use it where the costs are much higher? >> there are measures in place to prevent that. can you use these low roaming prices or nill roaming prices to transport price plans to other countries, sounds like a good thing to consumers, but from an investors point of view, it's a bad thing, it's a risk. the operators aren't supposed to do what you just described. the commission has not been successful so far in moving to more of a single market partly because these nation states want to remain in control within their boundaries and they want to keep yielding, reaping the

cash benefits to the operators. >> same yop, the other thing we're watching this week is whether or not telephonic is going to get sign off from the commission on eplus over in germany. are they goes to throw in a few extra clauses along the way? >> we do expect them to sign off. telephonic has signed a deal with one of the operators in germany. it's a familiar deal structure from the commissioners to ireland. i think there is some concern, certainly among the regulators, that the commission hasn't gone far enough in protecting consumers from the deal. there may be other mitigating factors they have to bring in. they have to look after the other mbnas. we know telefonica has proposed

this remedy. >> this is an important point, isn't it? it's a test case to see whether we can see further consolidation in the telco sector going forward. >> yes, it is. and i think the next market may well by italy. we think it may well move back to three players. >> simon, telco analyst at citi. stephane is in paris. keeping you busy this morning, how damaging is this for nicolas

sarkozy? we know he has potentially comeback ambitions. it was expected, wasn't it? >> that was a major blow for nicolas sarkozy. it could affect him coming back and running for president in 2018. it is linked to the financing of the campaign of nicholas sarkozy in 2007 and it's the first time the former french president is being questioned that way by police.

also, it's been reported recently that the political party of sarkozy paid millions of dollars to settle the campaigns of sarkozy, not in 2007, but the next one, the one in 2012. it looks like sarkozy spent much more than what was authorized and asked the political party to settle the bill. that would be a concern and is being investigated by the french police. yes, if sarkozy wants to come back, it looks like the wait will be long. >> thanks for that. now, we've had some reports this morning from cantell world time on the battle of the retailers right now. they're saying tesco and morrison's market shares dropped in 12 weeks to june 22nd. tesco sales down 1.9%, in fact, in that period.

sainsbury beat markets with 3%. we see tesco and morrison, they're caught between that low and high end of the market right now and that's impacted them in the 12 weeks to june 22nd. still to come on the show, are investors pulling the door on markets? we get into the housing market chat right after the break.

france fiesed nigeria in yesterday's knockout match in brazil. the french took the lead in the 79th minuter thanks to a header. joseph yohu flicked across into his own net. ooh. a late kickoff saw germany take on algeria. the algerians had a good chance during the first 90 memberships, but couldn't make them count. the meaningful action came in extra time. andre schuller came in close range to give germany the lead.

there was a second after 120 memberships. a goal from algeria's jabu minutes later would several only as consolation as germany hung on for a 2-1 win. today's last 16 matches see argentina face switerland and belgium takes on the usa at 2200 cet in el salvador. i mentioned earlier that the uk june manufacturing pmi came in at 57. it didn't. it came in a whole half a point better than expected, 50.7. we have sterling slightly higher on those numbers, too. in the last few minutes, prime minister shinzo abe has dropped a band since world war

ii. the change will significantly change ending the ban on exercisi exercising collective self-defense or aiding a friendly counterattack. stay tuned. shinzo abe is expected to hold a press conference at the top of this hour and we'll keep you abreast of any developments. meanwhile, major companies in japan are set to increase spending this year. suggesting the world's third largest economy is on the mend. this is the first tankan survey since japan hiked its sales tax in april. joining us is piquay batu from singapore. a strong set of numbers, the first since the implementation of the tax hikes. but it still seems this is very mixed on the actual impact of the tax hike going forward. >> i don't think it's particularly mixed. it's very clear that confidence is returning. and is fairley robust despite

the tax hike. and that is very positive, particularly the fact that you had a very strong number for -- for business pending intentions. basically, large enterprises and medium sized enterprises are looking to substantially increase cap ex or investment spending in the period ahead, which is really quite positive given that that was the one part of the japanese economy that had been very sub-dowd for five years. it's beginning to stir now. and with abe's third arrow being released last week, we're beginning to see signs of a real return of business confidence in japan. >> if i look at real wages, it seems they're falling at their fastest pace in for years. there is a concern whether or not exports are going to recover and consumption particularly given that real impact on wages.

>> we'll wages are falling for a good reason, that inflation has finally turned positive and very significantly positive, but nominal wages are, in fact, rising, which is good news. they need to rise a lot faster. they need to rise at least as quickly as inflag. the good news is that inflation is significantly positive. and that is very, very positive for consumers as well as businesses. now some of that needs to be passed on to wage earners. wage growth, slightly below 1%, but it is positive, too. so we have nominal wage growth, we have significantly positive inflation, and we have business confidence doing very well. so i think abe actually has a quiver full of arrowarrows. and the newest one will be interesting when the new prime minister of india comes to japan in a couple of weeks on his first overseas trip.

and i think there's substantial scope for a strategic relationship to emerge there between japan and india, as well. >> you have overwhelming optimism about the situation in japan must mean you are significantly long the markets, so specifically japanese assets. >> well, the first two months of this year have been quite difficult in japan. the first six months of the calendar year haven't been too good, either. but i think now with the third arrow being released last week, substantial structural reform now occurring. i think confidence is finally returning and i think for the rest of this year the japanese market is going to do rather well. and i think there is still a need for the boj to remain very aggressive with monetary policy. and that will continue. but we now have structural reform coming through, as well, and that will be very positive for japan in the second half of

the year. >> thank you so much. great to chat with you today. china's official pmi rose to 51 in june, a six-month high on approving domestic and foreign demand. meanwhile, china home prices continue to fall in june. the survey also found that even though the central bank has been original kernlging banks to lend, access to credit is still a problem for consumers. what's going on right now, despite the central bank pushing them to lend more, they're actually not doing. >> exactly, yeah. every month, we conduct a survey of real estate developers in china. the june survey showed that the real estate market remains extremely weak. the home sales fell for the second month. home price growth remains considerably below recent levels. consumers remain negative about the purchases. mortgage costs are rising. so since the end of last year,

our data tracked a sharp rise in mortgage costs. and that trend actually deepened in june, despite the chinese central bank calling on commercial banks to debt mortgage rates at a recent level for consumers. we are going to continue this discussion after the break. still to come on the show, another week, another gm recall. find out why the carmaker is breaking records when it comes to safety fixes. that and more coming up in the second hour of "worldwide exchange." stay with us.

welcome to "worldwide exchange." i'm julia chatterley. bnp will continue operations in the u.s. despite the guilty sanctions plea. gm announces even more recalls for cars and trucks. the company has recorded now nearly 29 million vehicles this year. divergence in european manufacturing, eurozone growth eases in june as momentum flows in germany, italy and spain and

the uk activity accelerates. and ukraine's president calls an end to the cease-fire against pro russian rubbles after the attacks in the east deliberate the land. >> your watching "worldwide exchange," bringing you business news from around the globe. >> thanks for joining us here on "worldwide exchange." always a quick look at how the u.s. futures are heading in this session this morning. the s&p, a few points higher. the nasdaq, similar story after gains in yesterday's session. is s&p closing out the quarter gaining 7.9%. similar story fort dow, up 2.2% in the second quarter. the nasdaq, 5% gains. so a really positive quarter. the question is, is it continue? we've had china pmi data this

morning. that's something for the investors to focus on. we were just mentioning there plenty of things, for investors to be focusing on right now. but positive sentiment permeating in the sector despite a bit of a slow touch lower as far as the pmi manufacturer readings in france, germany and italy, too. the reformist, saying earlier to us, china's official pmi rising to 51 in june. a six-month high on improving domestic demand and foreign demand. let's check in on the markets in asia. sri. >> hi, julia. let's start with the numbers coming out of china. i think it's premature at this juncture to really sound the all clear. we need to see further data

points confirming what we just saw with this pmi number. the good news is that we got correspondence from the hsbc number, as well, backing up the official number. but first expansion in is six months of hsbc and the fact that 50.7 did come in just a touch lower below the flash timts of 50.8. but the cumulative impact by the chinese central bank is finally start to go bite. but there are callings and stressors still in the broader chinese economy, especially in the housing market and especially with the shadow banking system. so that feeds to be kept in check. so we cannot rule out the prospect of some further targeted incremental, gradual easing measures possibly happening in the third quarter. that's where we stand right now,

no greater shades in the hopping congress market. hong kong was closed today to mark the appear versery of the handover to beijing. but the shanghai market consolidating towards the close of around 2045. thanks very much. >> sri, before the break, we were talking about the risks in the chinese economy, the property market being one of them. you were saying the central bank is trying to make this push and that's impacting people's perception of where produces are going right now, but it's also a political question, isn't it? >> yes, that's right. home buyers remained extremely tight. to get a mortgage below the benchmark interest rates.

last month, only 5% gave that answer. the chinese authority aren't going to let house prices fall too slowly. >> they need to take some action. on the other hand, if they stimulate too aggressively, we might be in danger of a repeat of what we saw last year, sharp rise in home price growth, which is not what they want. >> how concerned should we about about the property sector, residential and commercial going forward? >> i think it should be concerned, but i think the key point is there are data suggesting that the drag on home sales growth is coming from tightly, but it's the difficult that consumers have in securing mortgages. and as the central bank takes action to make mortgages easily

available, we spec home sales to pick up. >> so we're seeing this as china lends more. the question b is do they take more action going forward? great to chat with you. now we were hearing from abe a little earlier. he's speaking in tokyo. they have approved or his cabinet has approved the resolution dropping the ban on the exercise of the collective self-defense. remember, this is a ban that has been in place since world war ii preventing military action to support their neighbors. that has been undone. you have to wonder what the response is going to be from china right now, given there's been this tension between the two and the military spending that we see in china in particular. so actually mixed comments. he's just said japan will not take part in combat -- since the first gulf war or the iraq war.

interesting. again, a huge shift as far as the military policy is concerned and we'll bring you any further comments from that as they come. let's take a look at today's other top stories. another day, another gm recall. the automaker is announcing six new recalls covering 8.4 million vehicles worldwide covering vehicles from 2007 to 2014. gm is acquire of seven crashes, eight injuries and three deaths. they're being recalled for ignition switch issues. gm will take up to $1.2 billion in the second quarter of charges. expanding its recall by nearly 700,000. adding the older model of the

dodge cara van and the dodge journey crossover. shares in the german trading session right now, up 2.7%. still to come on the show, a record find at 2013 levels. what am i talking about? this is the worst of the storm. as it now passed to bnp paribas? we're live in paris after the break. ng too hiringime and not enough time in my kitchen. [ female announcer ] need to hire fast? go to ziprecruiter.com and post your job to over 30 of the web's leading job boards with a single click; then simply select the best candidates from one easy to review list. you put up one post and the next day you have all these candidates. makes my job a lot easier. [ female announcer ] over 100,000 businesses have already used zip recruiter and now you can use zip recruiter for free at a special site for tv viewers; go to ziprecruiter.com/offer2.

welcome back to "worldwide exchange." bnp says its stateside activities won't be impacted. gm recalls another 4 million vehicles surpassing the number of recalls by an automaker. and investors are prepared to commence trading for the second of the year after record gains in the u.s. bnp paribas, one of the biggest advancers this morning in europe after shareholders welcome the end of violations from the u.s. bnp paid records fines of nearly

$9 billion. in a conference call, the ceo said the bank deeply regrets its conduct but reassured investors it would be be impacted. james coney, fbi direct were b said this should send a warning to shareholders. >> the $9 billion that is walking out the door today is your money. we do these cases over and over again and shareholders money walks out the door. until shareholders dmantd from their boards that those boards choose leaders who understand what it means to create a healthy cultural of compliance, the money will keep walking out the door and we'll have to keep doing this work. >> stephane is in paris with all the details. stephane. >> yeah, julia, this morning, bmp paribas debates on what's coming next. it's the record fine for europe. but the shareholders won't

support the cost of that heavy fine. bnp will not drop the dividend. it's manning to pay 1 euro 50 per share this year, same level as last year. there was concern that the bank would drop its dividend. it won't be the target of 40% the bank wag targeted, but the shareholders will continue to receive a dividend. regarding the insolvency, the ceo made it clear that the bank is not looking to raise more capital. it's looking at 10% in the fifth quarter this year which is above the requested level of 9%. and last but not least, the bank schand how it's going to deal with the ban to clear u.s. dollar for -- on january next year. it's going to set up a new back

office system using a bank to clear its u.s. -- so the bank shouldn't lose some important customers for their -- on the oil contract. so all of these announcements this morning, and the market is rather positive despite the record level of the fine that was announced overnight. >> stephane, great to chat with you. thanks for the update. now, bnp paribas is just part of a prod shift to cut down on banks and others for violating u.s. sessions. credit agricole in socben -- so they're reportedly being do a probe about whether banamex

failed to money transfer across the u.s. and border. in other corporate news, l'oreal has settled with u.s. authorities over misleading adverts. the u.s. federal trade commission says ads were decepti deceptive. the ads in question ran lines such as visibly younger skin in under seven days. under the settlement, usa lerriel vows to not make claims on products which have been necessary to review. the revenue dropped 3.7% if june do a year earlier. some say the world cup may be to blame. now, in the u.s., the federal trade commission has approved activist purchase of specialty drugmaker forest lab. this on the condition that they

give up the rights. the companies will relinquish the rights to or sell treatments for hypertension procedures and cirrhosis of the liver. let's take a quick look at how they're tradeling in the german session. now, there may actually be life after death. yahoo! is picking up the mbc show "community" which was canceled by the network in may after just four soaps. the sitcom about a study group has a cult-like following but had low ratings. yahoo! will air 13 episodes with the same cast online this fall. the company has been expanding its video content with full elect shows as it tries to compete with the likes of netflix, amazon and hulu. so we want to know what do you want to bring back? the oc, that was one.

friday night lights, justify in my ears, another. it's you i want to hear from, not my gallery. we take a look a at all the positions and ohio you should be [ male announcer ] some come here

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france face nigeria in yesterday's match in brazil. and it's the quarterfinals afterny gear ya's joseph sticks the ball into the net. extra time when germany scored through andrew schule. algeria scored a goal to make it 2-1. and today appears match sees argentina face switzerland at 1800 and belgium takes on usa at 2200 cet. let's take a look at the

futures this morning. higher despite minor losses in yesterday's trading sessions. s&p, the best gains since 2009, up 4.7%. similar story for the dow and the nasdaq. don't see a lot of data for the rest of the week today. u.s. ism manufacturing in focus. the flood of economic data continues. as i mentioned with eu unemployment for may and the u.s. ism manufacturing numbers 37 i mentioned the focus on the prices and the employment component ahead for data for the rest of the week. on wednesday we will hear from janet yellen. on thursday, the ecb meets for the first time since mario draghi's us precedented move while the u.s. jobs report is released a day early due to the fourth of july holiday the.

now joining us, alex. if we look back at q2 from the solid performance as far as the u.s. equity markets are concerned, how are you setting yourself up for q3 and what are your expectations? >> good morning. thank you for having me here. yes, a very nice market here. it's, i believe, it's going to continue to rise, although we probably might have some going forward. but for the secretaries i have, we're focusing on several sectors. the primary ones are energy, industrials, materials and technology. i think those are the ones that we believe have the most potential for performance in the near future in the next three to six months. >> we're heading into earning

hes season. there's enough in there now to see beats or is this still estimates being too high there, do you think? >> no, i think there's nothing wrong -- i don't think there's anything wrong with the estimates. i think the question is how is it done relative to s&p overall. and it's a relative -- a relative set drought performance that we're focusing on. i think we're going to have them going into a little bit of a slowdown. but if you're looking not past the next couple of months, you know, past the low summer, july/august months, we're moving forward in terms of making, producing an expanding in terms of having more employment, the economy is growing slowly, but definitely growing. so i think the sectors are going to outperform are the ones that i just mentioned. also, i think there's a very slow but definite move in terms of the companies being valued

based on fundamentals, which is something new, relatively speaking, or companies were not valued under fundamental the past couple of years, just a larger macro structure. so i think as the economy grows and the u.s. economy expands slowly but certainly surely, i believe, we're going to see those sectors improve and i think, like i said, not maybe within the next couple of months, but if you're looking to position yourself in the next three to six months towards the end of the year, i think that would be the right place into sectors taking advantage of the growing economy. >> so the question is, will inflation outrun market earnings growth right now? which one comes out on topic? that will be crucial for investo investors, surely, too. >> exactly. that is the million-dollar question. a lot of it is going to dpen on

the -- here in the united states. the expectation that they would raise rates, i think everybody is on the same page, but the question is when. my own personal feeling, i feel based on what they've done now, based on the way that politics and the economy is going, that they will raise rates, but it's going to be very slowly and slower than people wanted them to be. and i think they're under a lot of pressure to do so, not to slow down the current economy and not to slow down the current expansion. so i believe longer term we have to -- we're going to have to have inflation. because in this environment, with such low interest rates for such a long time, there's just going to be pent up pressure and that the inflation will come. we don't know how permanent it is or what's kind of like a rate of that. but i think it's already coming and just a question of when and

how much. >> certainly. >> it is a -- yeah. >> you were going to say something? >> no. what i was going to continue is just i think the economy is -- the inflation is going to -- it is going to affect the markets and i think the sector is the most -- the sectors most sensitive to that will be affect by that. joef all, inge it is going to be slower than most people expect. >> alec, thank you. hackers have reportedly been targeting the energy secretary rt fout past few months with malware that's been tracked back to russia. since march, this group has been going after the electric grid, major utilities and pipeline operators in the u.s., spain, france, italy and germany. the u.s. department of homeland security says a public utility was recently compromised when a hacker gained access to its

control systems network. and within the last half an hour, orient express hoelgs has announce a chapter name change to belmont. still to come on this show, former french president nicolas sarkozy. we've live or the latest. eyebals 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 that immersive digital capability. give fans more then just the game with the ibm cloud.

welcome to "worldwide exchange." i'm julia chatterley and these are your headlines. we will keep our license, bnp will be able to continue operations in the u.s. despite the guilty sanctions plea. gm announces even more recalls of cars and trucks for faulty ignition switches. the company has now recalled more than 29 million vehicles so far this year. divergence in european manufacturing, ur rezone growth eases in june as momentum slows in germany, france and italy. spain and the uk see activity accelerate. and ukraine's president calls an end to the cease-fire against pro russian rebels. kiev boarders attacked in the east to liberate the land.

>> thanks for joining us here on "worldwide exchange." a quick look at the u.s. futures after a slight slippage of turns to the markets in yesterday's trading session. it was month-end, quarter end and half year-end in particular, too. the s&p gaining just shy of three points, the dow jones, 27 points now on the dow jones and the nasdaq just over five points in particular to the strong performance on the q3 numbers, gaining 4.7% for the s&p, 5% for the nasdaq and 2.2% for the dow. often a question this morning of whether or not this rally can continue. european markets this morning, resilient in the faces and slightly softer pmi numbers than expected. germany, france in particular seeing a little bit of softness

in those numbers, but the ooublg and spain outperforming on those numbers, too. the bank pleaded guilty to criminal charges, paying a record fine of nearly $9 billion. in a conference call this morning, the ceo said the bank, quote, deeply regrets its past misconduct, but reassures investors the activities would not be adversary impacted. announcing the record fine fbi director james conley said the punishment should send a warning to shareholders. >> the $9 billion that's walking out the door today is your money. we do these cases over and over again and shareholders' money walks out the door.

until shareholders demand from their boards that those boards choose leader who understand what it means to create a healthy culture of compliance, the money will keep walking out the door, we'll have to keep doing this work. another day, another gm recall. the automaker is announcing six new recalls covering 8.4 million vehicles worldwide, covering models from 1997 to 2014. gm is aware of seven crashes, eight injuries and three deaths involving all of the model sedans, such as the chevy im pally, malibu and cadillac cts being recalled for ignition switch issues. gm will take a charge up to $1.2 billion in the second quarter. quick check on how gm is trading in the german market session, underperforming by around 1.5%, j down just over 12%. now moving on the u.s. will send an additional 200 troops into

iraq along with helicopters and drones. the soldiers will be used to reinforce american assets and iraqi airports. the new parliament is meeting in bag dad for the first time since being elected back in april. the ongoing violence in iraq has hit opec's oil output drops by 70,000 barrels in june, meaning production has fallen below the group's 30 million barrels per day target. joining us is ian armstrong. thanks for being here, ian. as you heard there, 70,000 barrels, not necessarily such a big amount, but we are seeing present giving back some of the recent gains. do you expect that to continue? >> i think the spike was justified, because unlike some of the other flash ports we had in the last couple of years and the likes of sudan, etcetera, iraq is very important. it's the second biggest producer in opec. and although most of the assets are in the southern part of the

country, which has not been affected at the moment, the whole idea of the country splitting up into three again is a real possibility. and, therefore, i think we should take it seriously. the oil price maybe just got a little bit ahead of itself thinking there was going to be serious disruption. at $110, $112 for brent, that's probably where we should be now. >> barclay's saying buy crude oil data as possible role meaning the market will pay you to retain it. >> that's right. at the moment, we have the front month is actually much more expensive than the later months. so yes, that does suggest that. but i think the other thick about it is we're in the driving seat now. that's another thing, demand is picking up. but that hasn't actually affected very much in terms of the oil demand.

and so the oil demand, as far as i'm aware, is not being cut back by iea or any of those other forecast organizations and, therefore, that was in a very, very weak u.s. economy with a much stronger u.s. economy going after the rest of this year and even china looks like it is picking up. it's very good support, i think, for the oil price at this level. >> that makes all the sense. talk to me about the market and what your thoughts are there right now. >> i'm very positive on airline ge. i think it's very interesting in what's been going on in that market, with the cnook. that may be the start of the export boom i suspect will be a natural gas -- from the -- over the next few years because they have changed the rules with regard to dealing with their nonfree trade association

members. and that opens the market up to china and china has an awful lot of demand for gas over the next decade. it needs to get and it won't just get it from qatar and australia. there will be other major competitors in that market. >> is it a case of watch this state as far as further announcements in the sector are concerned? >> airline ge is a growth export market for the u.s. it's coming. >> ian, thank you for. the ukrainian president poroshenko has ended the cease-fire with separatists. the peace was lost due to criminal activities of the militants. on friday, the eu leaders said they would consider meeting at any point to discussion further sanctions. i think we have to watch out for any further comments from eu

officials, too. the bodies of three teenagers missing since june 12th have been found a few miles north of hebron where they disappeared. leaders from around the world have condemned the killings. air sprieks in the gaza strip in response to rocket attacks, this as the israeli prime minister netanyahu says hamas is responsible and hamas will pay for the deaths. threatening the gates of hell will open should action be taken in the gaza strip. former french president sarkozy has been held for questioning by police over allegations of misuse of power, that's according to reports. this comes after his lawyer was held for interrogation on monday. stephane is in paris. we were expecting further developments on this front, but just how detrimental is it to mr. sarkozy's political career,

do you think? his return? >> it could make sore cozy's comeback extremely difficult. he could be held by the police for 48 hours to be questioned. he's accused of using their influence to set up a network of magistrates to gain some insider information regarding a legal procedure. it claims the campaign under 2007 and the way he got the final things for the campaign that -- is a month for nicholol sarko sarkozy. the unp has reportedly paid the bills -- part of the bills for the company of nichololas sarko in 2012. but a few stories will damage

his reputation and could make the comeback very difficult. coming up, frank sinatra once said if you can make it there, you can make it anywhere. not everyone is looking to take a bite of the big apple. stay with us.

welcome back to "worldwide exchange." bnp paribas says its trading activities in the u.s. won't be impacted. gm surpassed the record for u.s. safety fixes by an automaker. and investors prepare to commence trade for the second half of the year of the u.s. insies and the quarter of gains. if you're on the hunt for a new apartment in manhattan, we've got some good news and we've got some bad news. after a two-year shortage, inventory is on the rise. the bad news is there are still too few properties to go around. morgan brennan is at cnbc

headquarter with all the depails. new numbers out from the top real estate brokers in manhattan, they're showing the apartment market slowed in the second quarter, even as prices continue to rise. the average price rose 20% to just under $1.7 million according to a report by the corcoran group. the median tract isn't as affected by high end sales. that rose 6% to $920,000. corcoran says 41% of apartments were listed for $1 million or less versus 50% a year ago. those listed for $2 million, that jumped to 37%. a report by douglas alaman says the number of apartments for sale rose to 18%. inventory levels are still more than 20% below the ten-year quarterly average.

and that's assuring sellers still have the upper hand in manhattan. 46% of apartments sold at our above the listing price. the perspective buyers are resisting higher prices and there's still some lingering effects from the low veptory. some predict a return to more measured pace of activity after last year's record sales when buyers who were worried about the economy and political gridlock in washington return to the market. the biggest sale of the quarter was a 16-room full floor penthouse on fifth avenue for a record $70 million. that's the most ever paid for a new york coopen. overall, there were 45 closings for a listing of more than $10 million. that helped boost the market. there was a double digit price increase with the average co-op selling for $1.2 million. brokers continue to offer the same cautious advice they've been giving sellers since the

downturn and that's priced their apartments well. sellers got nearly 99% of their asking price this spring. julia, back to you. >> that's terrifying. how did you ever find somewhere to live in manhattan? that's a different world. >> that's why we have a lot of renters here. >> absolutely. and in london, too. now, there may be life after death, well, on tv at least. yahoo! is picking up the nbc show community which was canceled by the network in may after four seasons. the sitcom about a study group at community college has a cult-like following. yahoo! will air 13 new episodes with the same cast online this fall. so we've been asking all morning what kinds of shows do you want to bring back? well, jack tweets in to say bring back the fire fly. the biopit says pushing daisies. i remember pushing daisies.

now, what else should we bring back? still to come on the show, another week, another gm recall as the u.s. carmaker breaks the record for safety fixes in a calendar year. we get out to detroit for the latest reaction and to preview june's auto sales numbers.

let's take a quick check on the european market this morning, adding to a positive gain that we've seen throughout the session right now. 0.6% for the french market lifted by bnp paribas. weaker pmi in the manufacturing sector for the french markets. a bit of consolidation, weaker for the italian outperformer. right now, the uk and the spanish numbers this morning overall the composite a touch weaker relative to expectations. let's give you a look at what's

on today's agenda in the united states, the june ism manufacturing index is out at 10:00 a.m. eastern, forecast to rise slightly from the may numbers. also at 10:00, we get may construction spending expected to jump around 0.5%. a quick check on the u.s. futures this morning after a slightly slipping in yesterday's trading session as we finished the quarter, the month and the half year. of course, gains for the dow of around -- just shy of 30 points. the s&p 500 indicated higher by around 2.5 points and the nasdaq higher by just over 5 points. general motors recalled 8.4 million cars, meaning it has now recalled more vehicles in 2014 than it sold in the past thee years. cnbc's phil lebeau filed this report. >> another big day for general motors as it announced six new recalled covering 7.6 million vehicles in the united states. 8.4 million vehicles worldwide. the vehicles were build between 1997 and 2014 and most of the

recalls have to do with vehicles where there's an inadvertent ignition key rotation. general motors says it is investigating seven crashes, eight years and three fatalities that may be linked with these recalls. how significant is this recall announcement? general motors is now increasing the charge it will take in the second quarter going from 700 million for recall related expenses up to 1.2 billion in the second quarter when it comes to recall expenses. that means this year, general motors will have taken charges totalling more than $2.5 billion when it comes to recall related expenses, all of this on a day when the company announced a victim consolidation fund involving those involved in recalls. they will look at each case and the merits of that case will decide how much is awarded. those families are victims who

were killed in defective cars will get at least $1 million. people injured will get at least $20,000 if they meet the criteria. here is how feinberg decides how much people will receive. what did the individual victim, whether it's a death claim or a physical injury claim, what would that person have made over a lifetime but for this horrible accident? what about noneconomic, pain and sufferings? the individual cases varied from case to case to case. >> again, just hours after ken feinberg announced the gm victim compensation fund, shares of general motors were halted as the company announced a new wave of recalls kb covering 7.6 million vehicles. to put that into context of where general motors is this year, in the united states, general motors has now recalled more than 25 million vehicles in 2014. that's the story from here in washington. back to you. >> u.s. auto sales for june are

released later with experts predicting the pick up in the car market to have continued last month. analysts expect sales to stop the june 2013 number but to fall nearly 12% on a month ago basis after an exceptionally strong may and as consumers begin to head off for the summer vacations. michelle joins me now from detroit. we're expecting june sales to be slightly lower month on month. >> well, right. sales will be better than last june and -- but lower than may. but may is always a big month and it was an exceptionally strong month this year as we saw a lot of pent up demand from the terrible winter unleash. >> the message did not get caught up in some of the details here. are we seeing the gm recall impacting sales at all? >> not a bit. it's quite amazing how resilient general motors has been

throughout this. we are seeing no impact on sales and on shopping for general motors vehicles. >> so more broadly, if we look at what we saw for the first half of the year, growth in terms of sales up 3.8%. what are you expecting for the rest of the year? >> well, we're seeing the best second quarter we've seen since 2006. i think we're setting otherwise up for another very good year, higher than last year. a lot of strength in, interestingly, the small crossovers, sport utility market, big sport utility vehicles and we're seeing a dip right now in full-sized pickup truck sales, but their time is coming. they always do well in the later half of the year. >> this is interesting. alex whatt suggested the bull market could top out with sales around $17 million vehicles.

do you boy that? >> hard to say. and just in items of the individual names from the data today, what are we speccing from the likes of nissan, of ford? how can you -- can you give me the details on how these numbers are going to compare? >> sure. i think you're going to -- we're going to see particular strength from chrysler and nissan. jeep is just doing fabulously for chrysler and they've got a new cheep area cherokee that isg great in the market. nissan is having a great month. they have a new sport utility called the rogue that's doing very well. we see a little softness at ford because the ford 250, also they're selling down the '01

preparing to ramps changes for the new one. >> so the bottom line here is, don't be put off on the month by month comparisons right now. michelle krebs, thank you so much from auto trader.com. facing nigeria, france took the lead in the 79th minute thanks to a header from paul drogba. joseph flicked a late score into their own net. the game took on extra life and extra time when germany scored through andre schuller. and, of course, belgium takes on

the saus at 10:00 cet. thanks for watching "worldwide exchange." "squawk box" up next. others come to build something faster... something safer... something greener. something the whole world can share. people come to boeing to do many different things. but it's always about the very thing we do best. ♪

good morning and welcome to "squawk box." bnp paribas graed agrees to pay nearly $9 billion and plead guilty to violating u.s. sanctions. the major automakers get ready to roll out monthly sales figures as gm is plagued with more recalls and we hear about them and they go, oh, another 8 million. but 8 million? and world cup fever is gripping the nation as the u.s. prepares to take on belgium because it is a tuesday, july 1st, 2014, and "squawk box" begins right now. ♪ living in america

>> good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. today marks the first trading day of the second half. here is the scorecard for 2014 so far. the dow is up about 1.5%. but the s&p rising more than 6% here today is now up six quarters in a row. that is the longest quarterly winning streak since 1998. the nasdaq closed yesterday at a 14-year high and the russell 2000 has had eight positive quarters in a row for the first time in its history. ism manufacturing, we've got construction spending and auto sales. but as we've discussed, the real market focus continues to be thursday's monthly employment report. we'll talk more about the markets in the economy in just a moment. first, though, andrew has some of this morning's top corporate stories. and