welcome to "worldwide exchange." i'm julia chatterley. these are your headlines from around the world. we can't live beyond our means. india's finance minister unveils a budget he hopes will keep growth above 7%. the news boosting indian stocks and government bonds. justifying the salary? bur bury's ceo unveils numbers that boosts the stock. investors get set to vote on his multi million pound paycheck. u.s. secretary of state

kerry says he's had an exchange with china. this has a latest report suggests chinese a hackers broke into government networks. and machinery orders drop nearly 20% in japan. hopes for a capital spending recovery phase. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. and a warm welcome to "worldwide exchange." lack of insight from the fed minutes yesterday on timing. the u.s. rates, giving a boost to u.s. stocks yesterday. europe, not really falling through. red to green in the session today, taking the stoxx europe 600 down 0.1%. a muted start to the trading day today. that doesn't mean we don't have some interesting movers across the board. the uk markets relatively

unchanged today. we see shares in the luxury retailer, bur bury trading higher after a set of sales numbers, despite double digit growth in the quarter to the end of june. this despite a warning that apple foreign exchange rates may hit profits this year. right now, that stock is up 2.5%. ab foods is gaining just over 1%. prime mart has allowed the company to up its guidance. the strength sees its grocery unit and its sugar business. ashmore, a gainer in the markets, up 3.7%. partly due to an improving investor sentiment towards emerging markets, they say. but also on the down side here, fugro down 18%, less positive

performance for the dutch all services group. the firm warned investors that the first half numbers will disappoint as a result of weakening in the oil and gas markets. speaking of oil and gas, a quick look here at what's going on in nymex. the worst losing streak in 2009, now down for nine consecutive days. 101.64. pricing out some of that geopolitical risk despite the situation in iraq. bund yields checking in this morning, we did see in particular spreads under pressure in yesterday's session. we got another six basis points of widening in the portuguese bonds. concerns about bank santander, that stock was down 10% in yesterday's trading. the financial sector gain, the stocks under pressure again today after the potential debt equity brought concerns about the parent company for best.

the government said look, it's not a situation, it's separate from this parent company. but that's what is stopping investors being a bit concerned. this lick between sovereigns and the banks right now. i'll point out the ten-year in greece, likely to issue the sovereign debt. we'll be bringing you that as the news comes out if indeed we get it. what about what's going on in asia? we've covered a little bit on the u.s., a little bit on europe. sri, we could take our pick, understand dwra, indonesia, japan, where are you going to go first? >> there is a lot to zip through, julia. let's start with india. the market are recording the first federal budget under the modi government. the market up by almost 1.5% and adding gains as we speak. the first headline to comes out of this that the market gravitated towards was the fiscal deficit target. and the finance minister upheld the previous administration's

number, 4.1%. there was talk in the market that it could be reviseded upwards to 4.5%. that should come down to 3.6% in the fiscal year 2015, 2016. this budget is tax reform, there is going to be a move to unify the tax collection system across the 29 states in india. this is very much a longer term measure. this should help tax collection to help cane the deficit. let's cross to the nikkei. underperformance stumbling after the machinery orders. this was an abysmal number down 1.5%, the worst monthly fall on record. it cost a lot of doubt in this recovery on capital spending that we've been hearing so much about. 2 the china markets were broadly

sharp today. the june numbers showed imports expanded 5.5% on year. that's less than forecast. but it did represent a rebound from the prior month's 1.6 of% contraction. then one of the outperformers today, the jakarta composite, up by 1.4%. one-year high earlier on in the session, julia, and rising more than 2%, despite the fact that we saw an inconclusive outcome to the elections yesterday. both of the camps are declaring victory. the former special forces general and the jakarta governor. the final results will be out july 22nd. that's a date for your diary. but do expect some volatility in indonesia asset prices in that interim period. in my mind, this rally looks quite vulnerable. >> great to have your update.

the news out of india, the new prime minister saying we cannot spend beyond our means. that was the message from the finance minister. as he released the first budget, and the fiscal deficit seen at 1.4% gdp in 2014, that's the target, dipping to 3.6% in 2015. he's aiming to see sustaining growth of over 7% over the next few years. head of research asia for socgen joins us now. the market seems to be buying into this. we've seen some optimistic budgets from them over the last few years. why is this different? >> there's an awful lot of faith in the market with the modi government. we've had an excellent performance in terms of stock this year. in many senses, one thing you might have some reservations on about this budget is it's still

fairley short on details. the government says good things about growth, about need to go reign in the deficit levels. the previous deficit target looks ambitious at this stage. for that reason, the market has responded pretty well. but i'm afraid over the more medium term, the devil will still be in the details. >> he's not going to give us any information in the general sales tax. i didn't hear any information on subsidies. what is he saying on that? that's a huge proportion of the government spending. >> well, over the medium term, what india does have to do is in the tax base increase revenue and second change the way the spending goes from cutting subsidies and increasing spending on infrastructure. and there's been some elements of this and some comments about

it. there aren't enough details about it. we need to see that change in terms of spending much more towards investment and much more away from spending and sort of consumption spending in the short-term. >> he's also talked about opening up the defense and insurance sectors for greater foreign investment. as far as the defense sector was concerned, politically, that was going to be very difficult. is that welcome? and what is the likelihood it stumbles on the implementation of this kind of policy? >> in defense of both of these sectors, we're talking about foreign ownership of less than 50%. there's almost no country in the world that's happy to see the defense sector in nondomestic hands. so i think defense is not too much of appear issue. what's maybe more surprising is that there's still a reluctant to see a lot of the financial sector being opened up to majority ownership abroad. it's not totally unusual in

terms of an asian context. it's good to have these areas opened up. but i think we still need to see how the implementation takes place. >> so is the good news baked into the cake as far as indian assets are concerned? india has been the best performing market this year.. in asia, the only one that's come close has been indonesia. if you look tu valuations of the indian stock market, it's getting three overall. that can maybe be justified by the historic very good return on equity in terms of india. but i do think if you look at the valuations, it's priced for nothing going on at all. and it's a good time to take some opportunities of other things in the region. >> great to chat with you.

thank you so much, grey stear in socgen. indonesian stocks are on one-year high expectations on expectations that jokowi will be the country's next president the. >> so i think one of the best ways to understand what's going on here in indonesia is to think about the world cup. so we know by now that the final, the big game, is going to be germany and argentina in rio. imagine with me that that game has been played. regulation time is over. the question now is, and it's a draw. the question now is are we going to go into overtime, double overtime, a penalty shoot-out? we don't know. it's similar to the situation we see here in indonesia where both candidate candidates probo and jokowi both

claim a victory saying i won and i won. we won't really know until july 20th or 21st. that is when the official numbers or results come out. but even then, that may not be the end. because if one side or the other is not happy, they could file a legal challenge. they have the legal right to do so with the constitutional court which could drag the whole process of choosing the new president on for many longer. we have a swear in date of october. but you know what? we may or may not get there by that date. you might wonder also, why do we have such a positive reaction in indonesian markets? the stock market and the rupiah? from experts, it's simply because they take a look at j o jakowi's claims of victory and

they say the agencies are more credible and reliable and have more honesty and integrity than the ones prabowo is using. but this positive reaction in markets, folks, may not last for long. it depends on how the situation plays out. martin soong, cnbc, jakarta. okay could mark the end of the fed official's forum. they detail plans to end an era of loose monetary policy culminating on a 15 million reduction on monthly bond buying. although there is little understand occasion as to when the fed would initiate its first interest rate increase.

u.s. stocks say taking the lean is dovish and it is higher on the back of that news. meanwhile, mario draghi has called on the states to -- together. he said it was essential the rules be enforced but accommodative policy would remain for some time. we spoke to peter prett.. he tolds he's not concerned, but there's an asset bubble forming in the market. >> the comments on the level because it's the market assessment. the role of monetary policy is part of the global picture. we have been from a situation of extreme pricing in the market to a situation where market has bought, you know, assets, the european assets it's basically what we have seen recently, foreign investors that have been buying securities. it's not only as some people are saying sometime ago banks are buying the local securities on

the balance sheets funded by ecb and liquidity. what we have seen, though, is external capital coming in, which has an impact on the currency output. >> the bank of england meets to decide on rates later. coming up, we speak to former ecb member deanne julius. now, the lineup for the world cup final has been confirmed after a drab match between the netherlands and argentina. the two teams played out an uneventble 120 memberships before the match went into penalties. rodriguez scored the winning spot to put argentina through to their first world cup final since 1990. the results means civilians will have to watch their bitter rivals argentina play germany in

the finals. it will be played on sunday at 9:00 p.m. cet. we're back in two.

greece is set to announce its second bonld issue today. commerzbank says bonds could price alone 3.5% tells how many investors feel it may be too soon to invest in greek bonds or perhaps too late given what we've seen over the last 12 months. peter shadrick from rbc capital markets, the last time greece issued some longer term debt, it was 67 1/2 times oversubscribed. do you like the five year? >> i think you're raid raising exactly the same -- the right point. i think the price at the end of the day is not the most important thing, whether it's priced at 350 or a little bit

borrow below that. the issue is really how strong, how many people plug into this issue. if we get a result that's anywhere close to where we were the last time, that's going to be a strong result. >> talk to me more broadly about what's going on right now in peripheral stock. we've seen a bit of widening over the back end of the curve. in the last two days, we've seen it at the front end of the curb, too. was going on here? >> i think that's a very interesting question. as you just pointed out, at the longer end of the curve, a rounded area. over the last couple of weeks, really, it stalled. the front end feels strongly because that was all down to the rose or the announcer. as they said over the last couple of days, it has changed a little bit. i still didn't overdrama advertise the situation, because at the end of the day, yield levels are still low and fed levels are still low. but i think it is slowly dawning on investors that growth in the euro area is still relatively

low and the most recent talks we had about watering down the stability in the growth pack and being less frugal, i suppose, is not going down too well, either. we should not overdrama advertise the situation and given the fact that we have a lot of issuance is part of the story. >> i want to tie it to credit, though been we haven't seen cvs spreads widen out, yet we've seen that, too, in the last few sessions. i appreciate that we don't want to make too much of this, but there's a credit story here, too. >> i think you're absolutely right. we argued just yesterday that what is different now over the last couple of days, we have this slow, contagious widening of credit related elements, as well. cds is one element of that. clearly, it's a little bit boring. we have to, again, be a little bit cautious. yesterday there was a special story about one of the banks in portugal.

overall, i think we have a situation where investors just become a little bit more nervous about the tight credits of this being here. again, let's not overdrama advertise it, but it's clearly something that we should have. >> you said the magic words there, portugal. concerns about arguably the largest bank in portugal. but it is, then, having a significant impact if you look at recent news in some of these peripheral feds in what's going on in portugal and questions about whether we have broken this -- between sovereigns and banks. does this move perhaps argue that we haven't? >> without going into any specific details of this incident, what we should recognize is that the broad systemic risk that we had a couple of years ago in the financial system are probably behind us. the ecb is conducting a stress test. but the one thing i would like to raise is what this episode currently underlines is one of the problems that we have

been -- for quite a while is in the current environment where the economy is still weakish, where the public sign res still weakish, getting these countrie these countries going out of a program, i think that is potentially a risky strategy. what it does mean is that -- is less powerful if something happens. and that, of course, omt, was one of the key things that brought these in the first place. so i think we should not ov overtrauma advertise the situation in pore tu began with one specific thing. but what we should recognize with this situation is a little bit more difficult than it used to be just about six months ago. >> it's a good thing, isn't it? we've had a run of slightly concerning weaker german data, too. we've got noise at the european level, concerns about budget flexibility. people want more scope to invest and what this starts to look like is that the markets aren't quite as immune as they have been for the last x number of

months/years. >> which is probably a good thing because what it tells you is that the complacency that people are talking about, including some of the central banking community, is not entirely come place ends. it's probably a good thing. >> peter, we're very complacent. we're just not totally complacent. great to talk to you, peter, ahead of european rates at rbc capital markets. in other news, israel has launched a predawn strike that killed eight people, including five children in gaza. it wants to stop rocket fire from palestinian militants which are reaching further into israeli territory. nearly 61 is palestinians have been killed so far according to palestinian medical officials. nbc's eamon filed this report

from tel aviv. >> the moment of impact and its aftermath, the conflict is intensifying, israel is striking by air. targeting rocket factories, launch sites and the homes of suspected militants. but gaza civilian population is paying a heavy price. authorities there say two dozen women and children have been killed. gaza hospitals are struggling to treat the endless stream of victims. hamas has been undeterred, firing hundreds of rockets deeper into israel. tonight, israeli distinguish alerting its viewers an estimated 6 million israelis now within palestinian rocket range. sirens whale over tel aviv, there was calm. israel's defense system they call iron dome shooting down rockets and saving lives. but officials aren't taking chances, preparing underground

shelters like this one in tel aviv built to accommodate thousands. >> people might try to hurt us. we will not give into that and we will go on. >> and for now, so, too, will the fighting. nbc news, tel aviv. ukrainian separatists and up to two russians will be added to the eu sanctions list. so far, the eu has slapped sanctions on 51 different people. reuters is reporting russia's central bank and finance ministry have agreed state official will only be allowed to have capital in excess of 10 billion rubles. the financial ministry official suggests the requirements will be lower than the level of 16.5 billion rubles previously discussed. coming up, we get the latest mortgage lending figures out of the uk. will they continue to ease out of the house price rally?

we'll get the details, right after the break.

you cannot live beyond our means, india's finance minister unveils an ambitious probusiness

budget he hopes will keep growth above 7%. indian stocks and government bonds. justifying the salary? burberry's ceo unveils fashion sales to boost retail stocks, but investors get set to vote on his multi million pound paycheck. u.s. secretary of state kerry said he had a frank exchange with china on cyber security as he wraps up a third. and japan hosts a record drop in machinery orders which fall by nearly 20% in may. hopes for a capital spending led recovery phase. welcome back to "worldwide exchange." we've got some data out of the uk this morning. we've got a global good trade deficit at 9.2 billion pounds

for may. that's an adjusted level. we've got the trade deficit, 8.8 billion versus 8.9 billion. so pretty much in line with the forecasts. 8.8 billion sterling with the forecast. the trade deficit, the non-eu trade deficit worth looking about the adjusted figure there at 4 billion sterling. that's through the month of may. now, we also have some figures from the cml this morning, saw the council of mortgage lenders. can't actually see that data out yet, so we will bring you that and we'll be heading out for an update. we'll discuss that with helia a little shortly on the show. but for now, facebook ceo charles shaumburg is looking at lean in, now you can invest in the growth number of women-led firms. barclay's launches a new index which tracks female-led firms or

with board of directors that have at least a quarter female. would you invest in a female leadership note? do you think it's important to have more women in the top positions at companies? if you want to join the conversation here on was, get in touch with us. worldwide@cnbc.com, @cnbcwex or direct to me@j chatterley cnbc. helia, is this the day where we see a bit of divergence as far as the views on the monetary policy committee are concerned?

we have a woman ceo member. this will be her first meeting. joining me now, a founding member of the mpc. talking about women in leadership, how important is it that there is a new cad ray of women mpc members and how is that going to add to creating diversity of views in the monetary policy committee? >> well, i think it is important. i think the strength of the mpc is that it has a diversity of views on all sorts of things. i don't think -- i wouldn't expect the women to have a different economic model in their head, but we all make up our mind, our judgments based on our own networks, our own personal relationships and our own personal experiences, but it would not be very credible. >> even though we're getting this increase in terms of gender, we're seeing this decline of diversity in terms of voting. you've been very critical about what this means for the kind of -- the whole mpc and the bank

in general. why is it important that we do start to see members voting maybe not so in line with the governor? >> well, i think the risk of seeing a unanimous vote month after month after month -- and it has been 12 months now, the risk is that the mpc is not as independent individually as it used to be. that would erode one of the main strengths. part of this, i think, is caused by forward guidance. it may want be expected in the early days that by having guidance about what will happen in the future, that is a type of discipline on mpc members. and i suspect that that has been part of what's corralled them all into this tiny circle where they simply vote unanimously month after month. >> and do you think -- i mean, obviously, ironically, everyone thought mervyn king was, but carney has much more persuasive

powers. surely, where we were a year ago when carney started we've seen very, very distant from that the uk economy has changed massively, we're in growth not in a double dip situation. surely it's right for the mpc to be voting in line with him? >> well, i think there's really two issues. i wouldn't expect every member of the mpc to have exactly the same view of what the latest data means. that certainly was never the case when i was on the committee. and the data has changed. and they've changed in an unexpected direction, in a more positive direction, of course. so that usually signals changes of mind, changes of opinion amongst at least some of the economists on the mpc. but i think there are really two issues. one is have they be doing the right thing? and i think forward guidance in its time was the right thing. is it the right thing now? i don't think it is. i think now we are in a transition phase of the economy.

at some point, as mr. carney has said, interest rates will have to rise and i'll be disappointed as well as somewhat surprised if they're unanimous for no change month after month after month and suddenly they're unanimous for a change. i think that will not be a good sign. let's not forget that the mpc's voting record is a time for guide yaps for the market. it gets an indication how they're thinking and progressing. one would expect that you start to get these dissenting votes. if you don't see that, do you think it will be a shock to the system if we have a rate rise in november? >> i don't think it will be a complete shock. the markets are pricing in some sort of rate rise. but i think it would indicate that we're under a different regime, that the monetary policy committee is not operating the way it used to and i think that would be a shame. it is true that the voting itself is a type of forward guidance. it also then makes it imperative to the different views on the mpc get expressed because it's got to be put out in the minutes

that there are different votes before the treasury select committee. those dissenters usually have a chance to -- their vote. it gets into a deeper debate about the judgment calls involved in making monetary policy. >> and what the central bank does is all about judgment. the data is there as a guiding tool, but essentially they have to make decisions whether that's based around inflation or around slack in the economy. yesterday, they were talking about the fact that there might be much less slack in the economy than the bank had forecast in may. do you think it's a credible metric by which we can judge what we should do in terms of monetary policy? >> well, i'm really of two minds. i think in one sense, slack seems to know be a rather slang type user friendly word for what we used to call capacity utilization and constraints in the economy. so if that's what it means, that's probably okay. it's an easier thing to say and

communicate. but i fear what it's doing is putting too much weight on the labor market statistics, the labor force sa activities. it's usually defined as slack in the labor market. that's not the only kind of slack economies like to face. i think it shifts the focus from what used to be the inflation forecast, which had its own problems, to the unemployment rate and wage pressures. that's not necessarily a good thing. it does need to be a more rounded decision and that's really where the real debate and the difficulties come in. >> and just finally, the new normal for interest rates, is that going to be much lower than historical averages are suggesting? the suggestion seems to be it's going to be between 2% and 3%. is that credible? >> i think it all depends on what happens to inflation. we'll be lucky in this economy if we manage to have a low real interest rate and low inflation. i think we all hope for that, but i wouldn't put my money on

it right now. >> thank you very much. we'll hear from the bank of england and their interest rate decision later today. but as i said, nothing expected today. no change. back to you, julia. >> thanks, helia. we'll check in with you later on the show. i want to bring you the latest news regarding the greek bond auction, saying we're waiting to get further information on the potential three-year bond auction. we are starting to see some information filter through. the yields we're looking at right now, 3.5%. that was in line with the suggestion we were getting from the likes of commerzbank this morning, 3.5% right now and that yield, so far they're saying the bond has attracted more than 3 billion euros of orders. five year that they did just over three years ago attracted 20 orders. we see that build. right now, the july 2017 yield set at 3.5%. that's the latest. let's take a look on the european markets, equity markets session so far this morning.

now we've lost a bit of ground over the last 20 minutes or so. the german markets performing down just shy of 0.5%. the ftse 100 down 0.2% lower. italy is down 1.3%. i'd like to think where the portuguese market is, we're not showing you that, but we'll bring you that a little later, down 3% in the trading session today. bond markets in line with what we're seeing in the equity markets in portugal, seeing a further 12 basis points of widening in the ten-year spreads in portugal. i'll take a quick look at the five-year, just a couple -- nope, 17 pounds wider on the five-year, so we are seeing more movement in the mid part of the curve rather than what we're seeing in the ten-year. we'll continue to keep the data spread shift. foreign exchange rates this morning, too. under a bit of pressure after those fomc minutes yesterday, continuing in the session today. we're seeing sterling under a little bit of pressure after that weaker than expected trade

deficit. the aussie/dollar losing a bit further ground in the trading session, down 0.4%. now, the u.s. secretary of state john kerry and the treasury second jack lew have had a second day of strategic talks. in the latest beijing talks, jack lew says china is taking steps to adopt greater currency transparency. meanwhile, john kerry says it's critical the u.s. and china continue to work together on cyber security. both sides had a frank exchange on the topic. rather awkwardly, this came as news broke that chinese hackers reportedly broke into the u.s. computer network of the u.s. personnel of office of management. the "new york times" says the attack occurred in march, but it's unclear how much information the hackers accessed. the report comes as u.s. and

china leaders are meeting in beijing this week. japan's core machinery orders for the month of may plunged 19.5% month on month marking the largest pool on record. makiko has all the details. >> it came as a shock since market watchers had forecast a slight growth. but with the second straight month of decline following a drop in april after storing over 19% in march. the value of the orders, seen as an indicator of capital spending slipped over $7 billion, the smallest since january 2013. the government downgraded its assessment of orders saying there was a stand still in upward trends. a breakdown shows orders from manufacturers fell 18% with demand from components used by electric machinery orders. demand for japanese machinery from overseas which indicates future exports was down nearly 46% with notable declines in

orders for industrial machinery and ocean vessels. the grim figures weighed on the tokyo stock market today with a nikkei index finishing lower for the fourth day in a row. that's all from the nikkei. back to you. >> thanks, makiko. i make that point again, morgan stanley, 80% probability that we see further stimulus in october of this year in japan. just saying aing. still to come on the show, could your days of looking for the remote control be over? imagine if you could probe cnbc just by thinking about it. 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

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earlier in the show, we were talking about the kercconcernin information we had coming out from germany. we have comments from the german government saying we have some concerning numbers, but once the special circumstances fade, the german upswing should. . they're saying, yes, manufacturing output has weakened for now. we've seen is that in the data of the last week or so. but they're saying sentiment indicators do not point to a change for now.

so the german upswing should continue once these special factors filter out. poland central bank was druft into the spotlight last month regarding discussions about the removal of another lawmaker. geoff cutmore sits down with us now. >> fascinating. you are at the restaurant. you are sitting down. you think you're having a private conversation. in that conversation, you talk about the governing council, about maybe you can change the outcome of their deliberations. you talk about members of the governing council in a derogatory way. you also talk about whether you can help fix the government's growth problems. unbeknownst to you, that conversation is recorded and played back as a leak by a news publication. this is the situation merrick

plucker found himself in, the governor of the central bank of poland, incredibly embarrassed by what happened here and some serious questions then being asked about how independent the central bank actually is. i had the opportunity to sit down and talk about these issues since this scandal first erupted. let's just have a listen in to how he answered some of the questions put to him about how he felt about this tape being released. >> the central bank governor is always much safer than most other jobs in the country. and as i have said, i see no reason why i should be pondering stepping down. >> who do you think recorded the conversation and leaked it and why do you think they did it? >> no idea. no idea. i don't bother thinking about it.

>> is there the prospect of a fallen power, perhaps, being involved? >> no, no, no. that's -- that is not something that comes to my mind. >> deal with the government, that's what's come out of the tapes that you have prepared to negotiate to support donald tusk's government if there were economic problems in return for the finance minister going, was there ever a deal. >> it was more like a lecture of an economist to someone who is by temper analytic and not at all an economist. so he tries to learn what can be done, what is being done in a situation of extreme crisis and financial sector. and of course, this is by itself

a very unpleasant thing because of the colorful language. but also, the person that is doing this does not know a bit about what the conversation is about. so whether we can get and this is exactly what happened, is a cooked up narrative that is very difficult to fight. >> what did you find like when you first heard these leaked tapes publicized? was it like being caught cheating on your wife or something of that? did you feel personally betrayed, perhaps by someone in the government? >> i just don't spend my psychological capital to think about who might have done it. i was very sad, very disappointed and probably tougher than i seem.

i'm doing okay and the bank is in full swing of every normal and unusual if necessary activities. and i'm fighting the potential loss of credibility. >> it must have made the last council meeting a very uncomfortable affair. >> i was very, very embarrassed and i was sorry for the damage that might have been dealt to the main court, to the council of monetary policy. but i have decided to mend fences. and judgeling on the discussions on monetary policy issues, you wouldn't find any impact. >> you talked about credibility and the need to rebuild credibility. and to quote the tape, of course, we have this effing monetary policy council, but

we're able to play with it. what did you mean by that? are you able, then, to manipulate the outcome to make the policy the policy that you want or the government wants? >> this is one of the -- of the statements that, you know, made the council nervous, probably more than i'd say the colorful descriptions that i have using here and there. we have to distinguish instruments of monetary policy and instruments of financial stability. >> was that just bravado? in fact, you can't fix the outcome -- >> of course it is. of course it is. there is no possibility to circumvent the monetary policy council and policy. >> so a somewhat humbling mario belker. this has been, what, four weeks since the revelation of the tapes? and it does appear to have died down. perhaps he stays at this point.

perhaps he gets away with it. >> and what about the german news this morning? >> yeah, i think this is fascinating. i said to him, what do you see as the -- as the conversation went on, we started talking about the polish economy and we started talking about risks to recovery. we talked about russia, we talked about other things and he singled out germany and the slowing down activity in germany as something that europe as a whole should be concerned about because germany has been the powerhouse. so very interesting to get those comments from the german economy ministry this morning. they argue, of course, there will be a rebound. >> absolutely. it's not a breaking trend. this is just external factors, as you mentioned. but we have seen the likes of ukraine, the concerns filtering into the industry. >> the market is off 0.8% at the moment? people are nervous. >> there was a nervous reaction in the market for that. geoff, thank you. >> thank you. let's move on to tech news

today. signs of life in the second quarter, reversing two years of declines. gartner shows sales did improve 1%. conditions started improving earlier this year when companies began upgrading their systems after microsoft stopped offering tech support for windows xp. they're buying more low price to mid range laptops. lenovo is still the world's top pc seller followed by h. . google reported hacking the eye wear can allow you to control it through brain waves. the report cites london based start up displace. you can take a picture without moving a muscle. a spokesperson says this particular capability hasn't been approved and won't be available through the glass app

store. wow, but it is actually out there. if you could use your mind to control your tv, would you? your mind has the ability to control your tv, ipad, laptop and smartphone all at the same time. sound like a headache? our next guest says watching tv while using our devices has become an extremely popular activity in asia. explain to us exactly what is screen stacking, joe, and how many devices are we talking about here? >> well, screen stacking, the use of more than one device concurrently is a simple result of earning more device. and connected devices, you'll be looking at 3.6 as a person in a study of 35,000 people that we spoke to. it's much higher. it can be four or five all while connected to the internet. so it's quite a large number. so you're saying in asia they

have more individual pieces or itunes and, therefore, that's why they stack more effectively? >> well, yes, that's one of the factors. what's fascinating about a situation in asia is here we have the situation where we have both very engaged consumer attitudes and rising consumer incomes. so two of those factors, the fact that we can afford lots of devices, it puts markets over here at the frontier option curve. >> could this mean the decline or the end of traditional tv? as far as i can see from your survey, 75% of survey respondents still sit in front of the tv every day, a lot of them do that while they're eating. >> yes, that's true. these are all very technical people, as well. you don't have to worry about your job just yet. there's huge amounts of tv and the fact that the amount of video content is what is driving a lot of this device use. people want to watch what they want to watch whenever they want to watch it and the devices are

extending that. so it might be mobile, it might be pc or laptop. in the evening, tv is a huge part of the routine. it's just that the attention span might be drifting between two other things at the same time. >> i admit i'm officially a stacker. joe, thanks for the uptake. now, a quick market check this morning. the italian mctrading lower on the back of the worse than expected industrial output in may, down 1.8%. i will give you a look at how the yields on portuguese ten-year debt are trading this morning. 12 basis points wider. and a positive debt to equity swael. we'll join you back in two for the second hour of "worldwide exchange."

welcome to "worldwide exchange." i'm julia chatterley. these are your headlines from around the world. u.s. secretary of state john kerry says he's had a frank exchange with china on cyber security as he wraps up his visit to beijing as latest reports suggest chinese hackers broke into the u.s. government network. investors in allergan are urging drugmakers to take measures into their own hands. citigroup may be ready to put mortgage growth behind it,

but settlement talks between bank of america and u.s. authorities are still at a stand still. and japan hopes a record drop in machinery orders which fall by nearly 20% in may. hopes for a capital spending-led recovery fades. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. if you're just tuning in, thanks for joining us here on "worldwide exchange." a quick look at the futures as we head towards the open of the u.s. equity market session, despite the gains that we saw after the fed minutes in yesterday's trading session, we are seeing a unanimously lower open as far as the u.s. futures are concerned. a hundred points lower for the dow futures. down around 1 1 points lower and 20 points lower here right now for the nasdaq.. we've also got the likes of stanley fisher speaking later, so that is more indication on the timing of potential rate hikes. even though we got very little from the fed minutes and the take on that was doctored dovish

for the markets right now. we also saw a leveling out stabilization in the russell 2k index. a couple of elements here, the large cap and the small caps to watch as we push forward towards that session today. let's have a look at the european market session this morning, too, red across the board and we continue to push towards the down side as we push through the session. 0.6% on the ftse. the uk market, the portuguese markets, the bank stocks in particular under pressure taking the index itself down 3.2%. we had concerns raised yesterday about the largest bank in portugal, concerns about a possible bond missed payment and the debt to equity pond there. the stock itself was down 10% in yesterday's trading session. that is filtering through to what we're seeing in the bond markets. but fist, let's have a look at

some of the top stocks we're following. burberry trading higher after double digit growth across all three main product categories. this despite a warning that the foreign exchange rates may hit profits this year. so concern about the strength of sterling relative to the yen. one rate in particular that's a level of concern. ab foods trading lower. it has been flat this session. its shares also a touch higher now lower in the session. its unit is offsetting business at its sugar business. it looks like the broader market now weighing on what we're seeing from that stock in particular. let's have a look at the bond markets. i mentioned portugal there. i want to go strayed to the fed. we're seeing the 10-year rate at 3.9%. we're seeing spreads widening all across the curve in trading today. actually, i just want to also

highlight greece, too. we're watching out for a three-year bond pricing this morning, too. we know that the rate right now has been set at 3.5%. we're going to continue to wait to see if the stocks build on that board in particular. that's the u.s. equity futures. we'll give you an update on europe. what about asia, sri? plenty to discuss on that market, too. >> there is, julia. let's start with india. we are seeing a sizable rally on the nifty. the markets are applausing the first federal budget under the administration of modi. and i'll tell you why. down to the fiscal deficit target and expectations that they would revise it up towards from 4.1%. so at least 473% or 4.5% at the higher range. they didn't do that. they stopped with the prior

administration fiscal deficit target of 4.1%. in fact, they said the fiscal year 2015 and 2016 it would come down to 3.6%. now, the markets applaud this. however, economists say it's a little bit unrealistic and may be overly ambitious, considering that we didn't hear much in the way of details in terms of subsidy reform. anyway, let's leave that aside and talk about one of the laggers today, the nikkei 225. that's because of the data, the machinery orders for the month of may were very disappointing. 19.5% drop month on month in may. that represents the worst monthly fall on record. so it costs a lot of doubt about this recovery that we have been hearing in capital spending. china markets are broadly flat at the end of the session. we got trade data and the june imports expanded by 5.5% on year. that's less than forecast, but it did represent a sizable rebound from the prior month,

1.6% contraction. next week will be critical, julia, because we not only get second quarter gdp from china, but we also get industrial production and retail sales. it will give us a sense of whether we are continuing to see stabilization, whether the economy needs more stimulus. finally, i want to talk about this market and that's indonesia's benchmark. the jakarta composite. we saw one-year highs earlier today in that market. it started to unwind some of those gains. but still up by not too shabby 1.5%. despite the inconclusive outcomes of yesterday's election, both contenders declaring victory. now it's up to the election commission to have a final say on july the 22nd. but let me tell you this. there's plenty of volatility in the 1 1/2 weeks now to that period. julia, back to you now.

the end of the u.s. fed's asset purchase program, according to minutes in the central bank's june meeting. fed officials expressed growing optimism as they held plans to engineer loose monetary policy. culminating in a final $15 billion reduction on bond buy these autumn, although there was little indication as to when the fed will initially get the first interest rate increase. however, u.s. markets don't seem to be falling through in yesterday's higher close, futures pointing to a lower open in the session today. ken clear as mud as far as future rate rises from the fed is concerned right now, ken. the market seemed to take this dovish angle on this in yesterday's trading session. but right now as far as the futures are concerned, it completely wiped out those gains. a bit on of caution out there right now. >> well, i think that the fed signaled that there's not going to be a fire drill on interest

rates anytime soon. and i've been saying that it's what i would call a market sweet spot where the fed is starting to see as we're all starting to see economic improvement. we're going to get a rebound in gdp numbers, it looks like. inflation is starting to pick up a little bit, which is a positive. the fed is saying they're going to be on hold for a while. so having an improving economy, some kick up in inflation which gives some pricing power to companies, we're not seeing wage inflation yet, so the fed isn't going to be rushing to do anything. and if anything, they said they're going to lag behind it. the curve potential a little bit on the idea that they just don't want to move too soon. so i go back to the idea that regardless of what the futures are doing this morning, i think the market is setting up for a sweet spot here. >> some people are concerned about the lack of knowledgeable about the uptick we're seeing is feeding into that level of insecurity. i hear what you're saying about the fact that they look like they're going to continue to be

on hold for a great deal of time. but do you think if they acknowledged that it might allay some fears here? >> yeah, they onlied it. but they've already said what they think about that. they're comfortable allowing it to run a little bit, erring on the side of caution that they don't do something to stifle it out. i hear all the calls that maybe they're going to get behind the curve and it might be too late. we've never come out of such massive, you know, infusion of capital in history. so the idea that, you know, the fed is ever got to get it exactly right was kind of ridiculous to begin with. when does the government get anything exactly right or even close to right? that angst is normal. they've signaled it's not going to be a fire drill on interest rates while the economy is starting to show signs of improvement. so from a market investment point of view, isn't that kind of the sweet spot? you would like to see things

getting better, the economy improving, maybe pricing pressure coming back for companies. and whether we agree or not, the fed is saying you're on hold for at least probably the middle of the year. >> you're calling it a sweet spot right now. a lot of people out there want to see a strong earnings season to underpin this rally. but actually, you're saying, look, there's many reasons right now to justify the current level of the markets and the valuations right now. what are they? >> well, when you really look at, you know, earnings have continued to be strong. i'm expecting this season to continue that way. we're starting to see employment get better, which will -- which should lead to consumer having, you know, more power out there which fuels the economy. i think there are a number of things getting better. i'm not being ridiculous thinking that i don't think there are rifts. certainly there are geopolitical risks. there are all sorts of risks that we've faced regularly in

markets, obviously. but if you look at it on balance, i think the bias is kind of to the up side here. so, you know, remain diversified. remain vigilant looking for those outliers. but i'm not getting myself too crazy this summer. >> back in january, you said -- >> it's what we have. >> i hear you. back in january, you said 7% to 11% rally this year on the s&p. very quickly, do you stick by that? >> yeah, i do. i think we're going to see high single digit low double digit type returns for the s&p. just as i started to mention before, if you go back to the last four years, the summer set us up for these disappointments. this summer we're not getting that. i think that's the reason for people to breathe a sigh of relief, also. have a little bit of faith that, you know, the fed is watching, you know, the things that they think are important and they're not going to let it go, i hope, too far with inflation being too far out of the gate, if you

will. but i'm actually comfortable, which is probably the scariest thing right there because once you start getting comfortable, that's the biggest warning something is not going to go right. >> when you start to get comfortable, panic. as you said, the punch bowl is going nowhere. thanks for that. now let's give you a look at what else is on today's agenda. in the united states, weekly jobless claims out at 8:30 eastern, forecast to rise by 44,000 to a total of 319,000. at 10:00 a.m., we get may wholesale trade numbers. at 4:30, vice chairman stanlly fisher will speak. and chevron is out with preliminary q2 figures after the close. let's bring you up to speed with some of our other top stories. john kerry and jack lew have conducted a second day of talks with their chinese counterparts in a second consecond he day of talks.

they're taking september to address greater currently transparency. john kerry says it's critic the u.s. and china continue to work together on cyber security. however, rather awkwardly, this came as news breaks that chinese hackers reportedly broke into the computer network of the u.s. office of personnel and management. the hackers access eggs thousand eggs of government worker application. the "new york times" says the attacks concerned in march. the report comes as u.s. and china leaders are meeting this week. aller gan share how wide r holders try to fend off a $3 billion bid. the ceo says he recognizes

allergan should act sooner rather than layer. he wouldn't comment on the reports that the company is targeting shire. he seas the offer will diminish, not enchance value. >> we question the sustainability of the valiant business model in its entirety. we've observed what happened to metasis when it was acquired at the end of 2012. we're beginning to see the same patterns of declining revenue growth for bausch & lomb and the cuts would be even higher. >> let's check shares for allergan and valeant. down 1.6% for allergan. valeant down 0.7.%. still to come on the show, gig the shoulder shoulder. eric holder has reportedly refused to meet with bank of america ceo to resolve a dispute over mortgage lending. find out why with all the details after the break.

welcome back to "worldwide exchange." these are your headlines. the u.s. and china hold a frank exchange over cyber security and the yuan strength. bill ackman suggests a standoff is in place as bank of america

and u.s. authorities fail to agree to a multibillion fine. let's take a look at that top story. u.s. attorney general eric holder has reportedly refused to meet with bank of america ceo brian moynihan to resolve charges the bank sold bad mortgages before the financial crisis. holder says the sides are too far apart for a meeting to be productive. bank of america and justice department officials haven't held talks since the second week of june. last fall, jpmorgan ceo jamie dimon met with holder ahead of the bank's $30 million settlement. bank of america is asking to raise its dividend from a penny to 5 cents a share. bank of america got the approval in march to launch a buyback, but it had to pull the plan in april after discovering that an accounting error was in place.

bank of america submitted its new plan in may and has requested a smaller buyback. quick check on the bank of america in the german trading session, down just shy of 0.5%. now, the s.e.c. is poised to finalize long awaited rules on money market funds aimed at preventing a repeat of the financial crisis. "the wall street journal" reports the s.e.c. will vote on plans to require certain funds that cater to institutional investors to scrap the traditional fixed $1 share price and float in value like other mutual funds. still to come on the show, just the ticket? how does ticketing company stubhub plan on increasing growth in a competitive market? we speak to the president right after the break. we needed 30 new hires for our call center.

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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." a quick look at what's going on as far as the u.s. futures are concerned. right now, indicating down 108 points now for the dow jones. the s&p 500 indicating lower by 11 points. the nasdaq lower by 24 points. we do seem to be losing ground as we head towards the beginning of the u.s. equities trading session.

we've totally taken out the gains we saw after the dovish session yesterday. no real indication right now of what's going on in rates. it does seem to be following some of the motion we're seeing as far as the european trading session is concerned. we're now losing around 1% on the uk markets. the italian markets using 2%. the german markets have taken a further turn lower in the last hour or so, down a further 0.5%, taking them down and the portuguese markets off 3.5%. i'll start with that one. we're concerned about what's going on in the portuguese banking sector. bankers desanto has key concerns about a debt to equity swap for that program. this is not a broader issue but we have seen it widen in the last couple of days, a further 11 or so basis points wider. remember, we've had concerns about the german economy, too, where we've now had the german economy ministry come out saying, look, a rather weak

recovery, it is validating some of the weaker data that we've seen over the last couple of weeks, the likes of industrial production, the retail sales, some of the sentiment data has been concerning. but they said, look, this is not the start of a changing trend. q2 is going to be weak, but then we're going to see it pick up. right now, sentiment in the markets are low and that is feeding into some of the peripheral spreads, too. we've got greece pricing a three-year bond in the session this morning, too. we're seeing the ten-year spreads right now pushing wider in the trading session, too. so a number of factors here influencing sentiment in the markets. sounded in 2000, stub hub is the world's largest ticket place and has been observed by ebay since 2007. where does the company go from here in what is an increasingly competitive market.

joining me is chris, the president of stubhub. let's get back and talk about the u.s. business first. you have announced a reorganization in the last couple of months and you shed almost 15% of the workforce. what's the situation now? >> it was a smaller percentage than that. what percentage was it? >> it was about 10%. some on of it is bit around since 2000 and 13 plus years is a long time in the technology industry. so we made some changes to make sure that we were organized appropriately for the way the business works today. a portion of the positions that we eliminated were actually in our field operations team. these were people who handed out tickets two to three hours before the events. a few years ago, 100% of the tickets delivered on stubhub were delivered by hand or through u.p.s. or fedex. today, only 20% are. so the reality of the way the market works today is more and more of our tickets in the u.s. are delivered electronically. it didn't make sense any more to have those field offices. >> which makes sense to me, but then i look at the likes of

ticket master, plus a huge operation. you adjusted to all-in prices which got into sales, too. i guess the question is how much are you seeing your market share narrowed by other competitors in the region? and does that continue to understand your pricing? it's a double whammy going on. >> yeah, it can be. but what we've seen is that last year we grew our market share by three or four points and it's over 50% of the secondary ticket market. the competitors that we see out there are 10 or 15% of the market. so while they may be gaining a little bit on us, we are still by far the largest player in the united states. >> can you grow that? >> i think we can. and we've been very aggressive this year in lowering our fees in order to provide lower prices to both our sellers and our buyers. we've seen that that's really paid off. we've been much more aggressive in terms of what we're doing in marketing and we're investing a lot in mobile. mobile is 50% of our traffic and

an ever increasing part of our business. >> so if we look at the likes of ticket networks, they've doubled their workforce in the last 18 months, showing strong growth. some people would look at you and say why are you going now? how would you allay their fears? >> stubhub continues to grow. what we did was invest more in technology by freeing up resources where a. here in the uk, we've grown a business. we're tied with the market leader in terms of traffic. all in pricing is a way for our customers to see the price of the ticket inclusive of all fees and the price they see is the price they pay. all of our other competitors charge surprise fees when you check out. we know customers love this service. it's increased satisfaction by ten point. >> ebay doesn't break out your

numbers from its own numbers. do you think it would help to explain what's going on as far as your business is concerned if they did that? >> not necessarily. i think it's what happens in every business. you get really good at it. you become the best at it, as we are, and when you're at the top of the mountain, people want to snok you you down. so we're being very aggressive in competing with the rest of the markets. >> chris, nice to talk to you. i'll give you another look at the futures ahead of the open of the wall street trading session. actually losing a little bit more ground in the last 10 or 15 minutes. the dow jones down by 105 points. the s&p down 1 1 and the nasdaq down 22.

welcome to wases was. i'm julia chatterley. u.s. secretary of state john kerry said he had a frank exchange with china on cyber security as he wraps up his visit to beijing. this as latest reports suggests chinese hackers broke into the u.s. government's computer network. investors in allergan are urging the drugmaker to take measures into its own hands as it try toes fend off a hostile bid from rival valeant and investor bill ackman. citigroup may be ready to put its mortgage woes behind it, but talks with bank of america and u.s. authorities are still at a stand still. and japan posts a record drop in machinery orders which fell by 20% in may. hopes for a spending recovery fades.

>> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. the u.s. markets yesterday managing to post gains of 0.4% and 0.6% taking a dovish lead as far as the fed minutes were concerned yesterday. no real indication of when we're going to see a kickoff as far as rate rises are concerned. sentiment seems to be very different with u.s. futures now losing around 107 points on the dow futures. the s&p 500 indicating lower by 11 1 points. the nasdaq, a similar story down by around 23 points. we are losing ground as we've headed over the last hour or so. really seems to be taking the message that we're providing from the european session this morning. i can give you a look now, the ftse 1000.7% lower. the german markets just lower now by 1.1%. the portuguese markets i really want to focus down by 3.6%.

the banks across the board under pressure today. concerned that there could be a debt to equity swap. the government said this is not a problem for the board, but we have seen sovereign bond spreads pushing off the back of this, too. portuguese ten-year, 3.9%. not much of a reaction going on as far as the broader periphery. we're watching a greek three-year bond price later on in the session today. i want to point out german spreads, as well. not really seeing much of a reaction. the german economic ministry said this isn't the start of a new trend, but they do acknowledge that external factors, the situation in

ukraine have filtered into the numbers. it's something to be concerned about over the last couple of weeks. retail sales, industrial production, orders, all these things in the german economy ministry now acknowledging q2 could be a bit of a blip. the question is how do you make money in these markets? listen in to what experts have been telling us today. >> expect the pound to do fairley well. euro/sterling still lower. 78. it's on the cards before long. especially i would think that the ecb will be moving in the opposite direction. we expect them to actually do more on the easing side. >> i think clearly you have to be a -- at this price still in the 2015 event outside the uk. also, the longer story we have got this credibility behind us. the numbers on corporate, and i

think that is where the market really i think it's still unexpected and hasn't seen. >> at the end of the day, yield levels are still low. but i think it is slowly but certainly dawning on investors that growth is relatively low and the most recent talks we heard about offering down the stability in growth package is less global, i suppose, is not going down too well, either. >> u.s. secretary of the state john kerry and jack lew have conducted a second day of talks with chinese court parts. in the latest beijing talks, jack lew says china has taken steps to adopt greater transparency. meanwhile, john kerry says it's credit cat that the u.s. and china work together on cyber security, saying both sides had a frank exchange on the topic.

however, rather awkwardly, this came as news broke that chinese hackers reportedly broke into the office of personnel and management. the hackers accessed files of thousands of government workers who had applied for top secret security clearances. it's unclear how much information the hackers accessed. reports come as u.s. and chinese leaders are meeting in beijing. miranda karr joins us now. thank you so much for being here. there was talk last year of this bilateral investment treatsy opening up closed sectors. >> well, i think the focus is very much the resolved intentions this time around rather than having a major step forward in agreement. obviously, you have private security. that was a massive profit even before today's report. you know, you had five people charged with cyber crimes,

basically, by the u.s. so you've got that and the asian pacific tensions. this is more of a sector clashing out behind closed doors as john kerry alluded to rather than maybe finding massive agreement. >> it's very difficult to look at the dynamics of the relationship compared to what happened when angela merkel of germany pitched up there a few days ago. >> it's a very good contrast. there is common interest. and it was very much more of a woiging, you know, almost through germany being china aes new best friend after russia. and the u.s. sort of the different plays in the uk slightly to the down side versus germany and they're playing off against each other. >> very focused on the idea of a

soft landing in china right now, the idea of concerns in the property market perhaps. you've been looking at corruption -- the corruption or the anti-corruption campaign at least in the government right now. we look at that in terms of the luxury sector, but you're saying the impact is far broader than that. it hits property and energy. talk me through that. >> it's a massive issue. obviously last year people weren't going out to fancy dinners. that did hit the luxury phase. we saw quite a down turn in sales of things like fancy watches, etcetera. whereas this time, it's taking on a much bigger scale. it's been going on for so long and it's been so pervasive. and now the interesting one is the energy sector, oil and gas. because that's where a lot of the investigation has occurred. and so some of the people in the

government see the move in oil or related administration. but then in tandem, you have that sector seeing the mega perform, sinopec, petrochina, in items of opening up private investment, just yesterday, announcing a quite comprehensive reshape of its core chemicals. this means we've got some of the pieces maybe standing in the way of reforms and then being removed. and that means you actually get the more development in the sector in the longer term. >> miranda, brilliant to get the update. miranda carr. let's take another look at today's top stories. israel has continued its air offensive on gaza launch ago preday strike that killed eight people including five children in gaza. israel says it wants to stop rocket fire from palestinian

militants which are reaching further into israeli territory. nearly 61 palestinians have been killed so far according to palestinian medical officials. eamon filed this report from tel aviv. >> the moment of impact and its aftermath. the conflict is intensifying. israel is striking by air, targeting rocket factories, launch sites and the homes of suspected militants. but gaza civilian population is also pay ago heavy price. authorities there say two dozen women and children have been killed. gaza hospital res struggling to treat the endless stream of victims. hamas has been undeterred, firing hundreds of rockets deeper into israel. tonight, israeli television alerting its viewers an estimated 6 million israelis now within palestinian rocket range. as sirens wail over tel aviv, there was also calm. israel's defense system they

call iron dome shooting down rockets and saving lives. but officials aren't taking chances, preparing underground shelters like these. >> we will go on. >> for now, so, too, will the fighting. nbc news, tel aviv. in corporate news, u.s. attorney general eric holder has reportedly refused to meet with bank of america ceo brian moynihan. reuters reports holder says the sides are too far apart for a meeting to be productive. bank of america and the justice department officials haven't held talks since the second week of june. last fall, jm morgan's ceo jamie dimon met ahead of the $40 million settlement. american apparel gets a financial lifeline from its largest shareholder. the retailer struck a deal with

standard general in which it gets up to $25 million to save off bankruptcy and pay office a $10 million. there will be five directors stepping down. charney will stay on an a consultant until the investigation into his conduct is wrapped up. the lineup for the world cup final has been confirmed after a match match between the neitherer lends and argentina. the two sides played out an uneventful 120 minutes. rodriguez scored the winning spot kick to take argentina to their first world cup final since 1990. the result means the brazilians

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welcome back to "worldwide exchange." these are your headlines. european shares fall sharply on portuguese bank fears. the u.s. futures follow suit. u.s. and china hold a frank exchange over cyber security and yuan strength. and a standoff in place as bank of america and u.s. authorities fail to agree on multibillion dollar fines. a tough morning of trade in the european equity markets this morning. it looks like the u.s. futures are following suit. more than wiping out the gains that we saw after the fed minutes yesterday. right now, we've got the s&p 500 and the dow indicating lower by around 0.7%. we've got the nasdaq off just shy of 0.7% as far as these futures are concerned. we're focusing on the german economic ministry acknowledging weakness in q2 and raising

concerns about the strength of data coming through from the second quarter. acknowledgement that the powerhouse of europe is having a little trouble in the second quarter, honing in on the portuguese banks concerning a debt to equity swap for the country's largest banks. we're now seeing the portuguese equity markets down more than 34%. now let's move on to some of our top stories. allergan is in the midst of a battle to fight off a hostile bid by valeant pharmaceuticals. bertha accumulate is at cnbc hq with more. >> good morning, julia. allergan's ceo making his case last night on cnbc's mad money, telling jim cramer the company is about to introduce a major restructuring that could stoke value. this comes as reports say the botoxmaker shareholders are pressing the company to do a large acquisition of its own as

it fights off the $53 billion from valaent and bill ackman. in an interview with the financial times, paiet says he recognizes allergan, which has $14 billion in cash, should act sooner rather than later. on mad money, he says valeant's office will enhance the county's value. >> we question the sustainability of the valeant business model. we've heard what happened at the end of 2012. we're beginning to see the same patterns of declining revenue growth for bausch & lomb. and the costs to allergan would be even higher. allergan has been linked to a number of possible takeover targets, most recently being shire which itself is being pursued by a u.s. rival for $51 billion.

paet won't comment on whether allergan is working on a bid for shire. allergan has turned down three separate offers from valeant. paent will attempt to convince shareholders that the stock would hold up even if valeant walks away. the feedback from our shareholder base is you've raised your numbers, that's great. if i look at shareholder sentiment and especially analysis prior to this bid, they had a target price of $131 in our stock. today it's $179. important on a stand alone basis before a control premium. so the current offer doesn't value that, still grossly undervalued. checking shares of agricultural began and valeant at this hour, they are both

trading lower. julia, these days, it's a bit like seeing big fish and little fish. everybody has so much cash. they all want a deal. >> i think i need a map to draw the links between the two. it's hard to keep track of who could potentially be interested in who. fascinating times, fascinating sector, too. bertha, have a great day. we'll leave you with a quick look at how the trading day is set.

welcome back to "worldwide exchange." urman markets under pressure in the trading session. the key losers together, the portuguese market down over 4%. the focus on the portuguese banks, specifically banco, as

concerns raised yesterday about a potential equity swap weighing on the market. continuing to have an impact not just on the banking sector, but on the broader market and also on what we're seeing as far as peripheral spreads are concerned. we'll show you the market, too. we saw spreads significantly widen in the ten-year sector yesterday. we're seeing further pressure in the trading significanter today across the yield curve. in fact, we've got the portuguese five year wider by 20 basis points. we've got the ten-year portugal wider by 15 basis points. putting forward the shorter maturities in the curve. we have the german economy acknowledging a weaker q2. it's something that we've seen in the numbers for a couple of weeks. acknowledgement from the german economy ministry that it is going to be a weak spring recovery on q2, but not that this is the beginning of a weaker trend as far as the german economy is concerned. now, let's immediately bring in todd horwitz, author and founder of average joe options.com.

we're seeing futures unwinding any of the gains we saw in yesterday's session, down about 0.8el% across the board. >> good morning, julia. we're seeing the markets where the money has been flowing out of the higher risk stocks into utilities, away from discretionary into utilities. we're starting to see the banks under a little bit of pressure. the bank have not been participating. we've been seeing a big warning sign saying we're seeing a lack of growth. and there are problems down the road. did you tie in the gdp number from three weeks ago and now we're tying in the prospect number here. >> artificially good jobs number, todd? >> well, you know, when you look at the number, if you look inside the numbers, although the

number itself, 280,000 is a good number. if you break it down, most of those jobs came in the service sector. the service sector is not high-paying jobs. the service texter is not going to create growth. the service sector is not going to promote more discretionary spending. it's hard enough when you're making less discretionary money, you're paying more for food and more for energy. people don't have as much money to spend. eventually it has to come home to roost. i think we're starting to see the markets unwind here now. >> the take on the fed markets yesterday was rates are going to be on hold for longer. we've got stanley fed fisher. can he give more underpartnershiping to the markets? >> i think the fed is running an artificial market, anyway.

if the markets continue to be under preb your, i'm sure he'll stay something which has been to help stem the tide. it's to try to stay things to keep the markets from falling harder. i don't know if the fed can any longer get in the way of the market here. i think we're going to see some pressure coming in here on a more regular basis. i think the earnings season will go a long way. showing us that we don't really have growth and there are a lot of problems underneath the hood of the car that we need to look at. then all the artificial and free money that's put in has not helped as much as we think it has. >> we will revisit this conversation in a week or so, todd horwitz, thank you, founder of averagejoeoptions.com. we countdown to the bank of england's rate decision. thanks for watching "worldwide exchange." we'll see you back here tomorrow. have a great day.

good morning. welcome to "squawk box." u.s. futures getting slammed. the markets in europe are sharply lower after disappointing data out of china and the eurozone. the united nations security council getting ready to sit down and talk about the violence, the renewed violence between israel and gaza. and argentina will face germany, messi versus the machine in the world cup after beating the dutch. it went all the way. you know, i didn't get to watch brazil versus germany, but i watched the whole thing yesterday. just my luck, no goals. but it was exciting, anyway.

thursday, july 10th, 2014. "squawk box" begins right now. >> there are only two things i can't stand in this world, people who are intolerant of other people's tolerance and the dutch. >> what? >> the argentinians are probably feeling like in this morning. i'm michelle caruso cabrera along with joe kernen and steve liesman. becky and andrew are off today. u.s. investors are waking up to a lot of red arrows this morning. european stocks are down sharply in early trading. among the reasons being cited, weaker than expected trade data out of china. disappointing trade numbers out of italy and now there are requests for help. portugal is now down more than 4 had%. u.s. equity futures are responding in time the. take a look.