welcome to "worldwide exchange." i'm julia chatney and these are your headlines from around the world. the new fighter jet won't be making an appearance after the jet is grounded in the u.s. we'll talk to the man who makes the plane exclusively on the show. and the swiss chocolate maker lindt is buying russell stover. this is the biggest deal in history. and ready to recommend the latest bid to shareholders as the u.s. drugmaker races to

raise it bid to $50,000. and israel continues the defenses in gaza promising a significant blow on hamas as more rockets are fired into israel from the lebanese border. >> announcer: you're watching "worldwide exchange." bringing you business news from around the globe. >> welcome to "worldwide exchange" on this monday morning. we are plane crazy this morning with the biggest names in aviation to capture england. the fighter jet won't be making its debut today as the engine has left the fleet grounded back in the u.s. this is an embarrassment to the manufacture manufacturer. so far this year bowing is ahead of airbus for aircraft orders.

they hope to build on the popularity of the a-320 which holds the majority of the orders. and across the hanger, boeing is maintaining a lead in the passenger jet market. the manufacturer claims their planes are more fuel-efficient. and the u.s. government continues to cut defense spending. coming up, we'll bring you both sides of the argument with an exclusive argument with boeing's ceo. if that's not enough, at 11:00 cet, we'll check in with mare lynn houson to discuss the problems with the fighter jet. now for what to expect

between then and now, you only have a few minutes to wait. and check out the slideshow on our website to see how you can get into space. and it is merger monday. a sweet deal to kick it off. lindt chocolate maker is buying russell stover and didn't disclose the price but said it's the largest acquisition in history. russell stover was founded in 1923 and known for its boxed chocolates. the third largest u.s. chocolate company. and the drugmaker has made another to buy shire at $53 million. shire is trading higher in the session today.

the majority of stocks are in the green this morning. the stoxx in europe is up 7%. we have pmi industrial data out at 10:00 a.m. this morning london time. something to watch given the weakness we saw from the french, the germans, the italian and the dutch. as we are watching the market, a few stocks here are showing a gain for the market. the psi lost 10% in the weekly performance last week so now it is gaping back a minor portion of the losses we saw in yesterday's trading session. but i mentioned the top corporate stories we are watching or keeping an eye on this morning. in particular, the german

victory yesterday in the world cup final raised the stock of adidas. they are a big winner as a result of the tournament. that's up just shy of 2.5%. seb up .70% trading higher on the back of positive quarter numbers with earnings driven by strong corporate activity. the bank beat forecasts boosted by commission. we are getting a first on the numbers with the interview with an seb cfo jan erik back at 10:15 cet. and finally, we just mentioned portugal with a volatile section. the bank confirms now that it put in place a new executive team led by victor benton, that's the ceo, the stock actually jumped after the open

before dipping down into the red with just over 2.2% in trading. shares down more than 35% over the last seven days to give you a perspective on that. that's the bank shoring up support from investors and regulators. here's what's happening in the bond market this morning. we'll stay on portugal trading tighter now as far as yields are concerned. we were about .67% for a gain. we are in a holding mode as far as the dollar is concerned because we have yellen speaking on tuesday and wednesday holding 1.36 for the level right now. citi traders are willing to shore up 1.37. right now the only way to assess the trade right now is to see a more dubbish yellen on tuesday

or wednesday. the audi is back in the session today leaning on the currency. that's something to watch tomorrow in the trading session. that's it for this round of the markets. air strikes on gaza continue to intensify with another bombardment overnight. gaza officials say more than 166 people have died in the last six days. nbc's iman london filed this report. >> reporter: nearly a week into this conflict and there are no signs the fighting is letting up, in fact, quite the opposite. the rhetoric and fighting continues to escalate. people trying to escape the fighting and trying to leave gaza, the israeli army carried out a daring raid saying it destroyed long-range palestinian rockets and hit it inside gaza. they also added that four israeli soldiers were lightly wounded in that operation. meanwhile, the military has also

dropped leaflets and issued phone calls to thousands of palestinians living in the northern part of the gaza strip and effectively told them to leave their homes or risk facing danger. and some have said possibly that as a result of the potential israeli strikes on the northern part of the territory. that forced thousands of palestinians to begin leaving their homes and taking up refuge at u.n. schools that have been converted into makeshift shelter. but there are those that are trying to leave gaza. very few, mostly dual nationals that belong to various countries. that was coordinated with the united nations and the help of the various embassies. at 6:00 a.m. local time, convoys of buses left the u.n. facility here to make their way to advertise really border crossing. and 800 or so people left including 150 americans. but for the 1.7 million people here, a lot of uncertainty into the days ahead as to what might happen. all indications suggest there's going to be some kind of ground

incursion. hamas and the palestinian infraction say they are prepared to make gaza a grave-yard for israeli soldiers and are still firing rockets deep into israel a week into this conflict. as we said, no sign that the fighting is letting up as the humanitarian situation here continues to worsen with the rising death toll. we have a correspondent to join us now. as we are hearing there, a possible escalation of ground force from israel right now the gaza territory. we still need to have a cease-fire here, how is this situation playing out as far as what you're hearing it? >> if you look at what is happening in the united states, the united states made an offer to offer a peace deal and the israelis have yet to bite on that. as a peace broker, they want to talk to the countries and the turks. there are questions how effective that would be on both sides of the equation, but you have to look at proportion

response. we have over 160 people dead in gaza and 800 to 1,000 rockets are being launched from the area into israel yet no casualties. and that has raised questions. you're seeing it on regular media channels in the united states. and that has caused some questions, however the chte classes in the united states, in washington, if you look at the washington talk shows yesterday, i think there are seven now, used to be three, now there are seven. if you look at the general bond from all of them, it was support israel from john mccain to former congressional leader jan harman, a democrat from california. all of it was very much geared toward israel's protecting itself. prudent response. so it's really what we are hearing out of washington is we want to do something, we want to settle this, we want stability in this region but it begs the question, how relevant is the u.s. to this region anymore? >> when we spoke to a senior adviser for prime minister netanyahu last week, i said to him, how do we reach a solution here? how do we stop it?

and he said, look, hamas says their backs are against the wall because they put their backs against the wall and we are not stopping until the rocket fire ends. so the tone from the u.s. toward israelis look at the response to be who proproportionate. and hamas doesn't want to go to the traditional peace traditions of egypt. how do we find a solution here? egypt could be instrumental here given thement leverage they have with hamas. >> they have leverage with hamas to a degree, but hamas is not popular with the current administration. we saw them much more closer to mohammad morsi and the muslim brotherhood. and since the arrival of asisi, they are wondering about the proportional response to what happened to the three israeli teens. at this point you're not really going to see, in my opinion, hamas really coming to the table with any of the gulf or the

egyptians as well. and later in the broadcast, we'll hear from the telephone chairman also questioning hamas' leadership and their role currently and saying that fatah and mahmoud abbas are also in some way culpable because they are a unity of government. later in the broadcast we'll hear from them as well. >> what do they have to say about the influence of the u.s. and whether they can influence from their side here? >> he raised the question that the u.s. has left power back in the region and they are not even present when it comes to figuring out what to do about syria and iraq and certainly not with the israeli/gaza situation. >> in all the different areas, the regions we have spoke up about, iraq, iran, the overwhelming sense right now that such as we expect the u.s. to say something -- >> even the foreign government says the u.s. has a role here,

but they meant there was a lack of u.s. influence in the ream. there's more perception than reality, but unfortunately every event we have seen since then has proved that was a really bad idea. >> okay. we'll come back to the interviews later in the show. thank you. coming up on today's show, indian inflation eases to a four-month low but the s&p warns a lack of fiscal detail for moody is a negative factor. we'll look at all the details of that. plus, hoarding the cash. a look at a new survey that says don't expect american companies to go on a spending splurge any time soon. and a massive week of earnings stateside. 55 s&p companies said to report to overshadow the actual numbers. we have to take a quick break and will leave you a live look at paris where bastile celebrations are taking place. stay tuned.

welcome back to "worldwide exchange." we'll update the top stories today. the scandal surround iing china

continue. charges have been filed against the investigator and his wife. they say he is being investigating for illegally obtaining private info. they are reporting that the couple's trial is scheduled for august 7th. samsung is suspending its business as the scandal continues to grow. the watchdog accused the supplier of using underaged worker. samsung says their supplier used the chinese supplier and found no child workers in the investigation that they have conducted in the last year and a half. and citigroup announced a $7 billion settlement today over

allegations that the bank sold top mortgages in the runup to the financial crisis. about $4 billion will go to the dha. $2.5 billion for consumer relief. $500 million to the fdic and less than $300 million to five u.s. states. the settlement reportedly signed this weekend caps months of talks during which the u.s. demanded $12 billion and threatened to sue. this interview also reports second quarter results today at 8:00 a.m. eastern. the bank is forecast to earn $1.08 a share versus $1.25 a year ago. they are expected to make $8.5 million. investors are also going to be listing comments on other legal issues including the broad investigation in mexico and progress on citi submitting their plan to the fed. and now we'll look at the german market session high er

around 25%. the second earnings forecast beat them at 5.3 billion krono. plans for the main opposition party to raise bank taxes could weigh on growth. jan erik back is joining us. thank you for joining us. a solid set of figures and take us through the highlights of the quarter. >> yes, good morning, i'm glad to. we have been trying to grow our bases over the past two years by attracting clients and we are doing that in all segments of where we operate. i think that all those new clients and the increased activity we have with all of them is improving the operating profit on the economy throughout. there is no particular income line that i want to point to. we look at the depth and relationship with the client. so that's the main driver behind

the improved result. projected impact results are that we are con taping costs and promising the market below $22 billion crono this year and next year creating operating leverage and we are also controlling the capital in a good way and increasing quarter by quarter capital. >> something happening industrywide right now is the trading income was to some degree weak. how do you expect that to play out in q3 and q4 this year? >> well, trading income is always difficult to predict, but i think again that's sort of the same answer again. we have more clients and more dividend with them and trading income will increase that as well. and if we look at net financial income, people sometimes equate that to trading income, but our market deals in transactions

that flow through and other income response. the markets operation is better than the quarter before, so it's growing its business for the same reason, so to speak. >> a swedish bank has some of the most stringent rules in the eu. you are looking to boost welfare spending. what would be the impact of what they are suggesting here? >> well, i think we'll just have to wait and see if that materializes. election has to come first and then i think it's one thing to talk about these things now and perhaps another thing to sort of have to form a government and come to terms with exactly what to do. so we'll have to come back to that. i think i suppose in our minds it's a little bit up usual to aim taxes at the one sector of the economy in a particular way. it's been sort of a rule for many, many years that different

sectors in the society are taxed the same. so we'll see what comes out at the end of the day. >> i just want to ask you about sweden specifically and some of the latest house prices just shy of all-time highs. at the same time, we have the weak bank up 50 basis points in the july meeting due to low inflation expectations, too. do you want to see more from the central bank as far as rates are concerned to stimulate the economy and business n particular? or are you convinced that mac co credential tools can take some heat out of the housing market? >> well, i think the central bank has probably kicked the ball over to the political reunion and has exhausted the means to lower interest rates. so it will have to come from elsewhere. when it comes to mortgage, i think the banking sector is trying to take the lead in stalling session plans and testing our client base in a

solid way. and once you remember that swedish banks are not lost on mortgages for decades, it didn't do so in the '90s crisis and didn't do so in 2009. it's a very solid business, be thaw methat means that we have pool resources from banks and regulators and from other sources like the political arena to curb the development, which is a reason for caution. >> so concerns raised last week in the portugese banking sector. i'm sure you were watching closely. i'm sure it tells a significant lack of confidence in what's being done as far as the european banking sector is concerned. >> yeah, i think that's right. i think the european banking sector is -- hasn't come out of all its difficulties and i think it's just to remember that the

markets are completely flooded with liquidity still. and that's not a positive thing at tend of the day. it is sort of making everyone feel a bit better but it hasn't healed our cured the underlying concerns. so i think there's reason, every reason to be cautious going forward and i think we are trying to do so. and one way is through high capital ratios, liquidity buffers and a good earning stream. and in our case we are also trying to focus on job opportunities. >> i often talk about the limitations of the banking union, particularly for the eurozone right now, do you believe we have broken that negative feedback between banks and sovereigns, or is it still going to be a problem going forward? >> difficult to say, but i think, i hope that we are starting to break that negative loop. but it's a complex game and it's a complex development. so i think the best thing to do is just to be very alert and very sensitive to what's going

on and to maintain a house of buffers for tougher times that may come. >> jan erik back, the cfo it fo seb. thank you for talking to us. after an action-packed month, several fans packed in for last night's world cup final. argentina's golden boy looked pretty subdued throughout. the game went into extra time and the key moment came in the 130th moment when he struck past sergio romero. so what does a party 24 years in the making look like? it looks like this. berlin was party central after the game with fireworks lighting the sky above the gate.

and thousands of revelers caused gridlock in the city's center. it was a very different scene in buenos aires in the aftermath of the defeat. though many images defy the tournament, but this is the key one. angela merkel caught up with her boys for a final photo opportunity after the win. is that a coy smile or awkward? i can't tell. and the owners of the trump plaza say they expect to shut it down in mid-september. they are warning that the casino's more than 1,000 employees will go out today. the trump plaza closes in atlantic city with a third of their casinos and a quarter of the casino workforce in less than nine months. the atlantic club shutting january showboats is closing next month. and get your bids in on the picasso and pez dispencers. "the new york times" says they are teaming up we bay to stream

live auctions online. they will focus their new york sales on the new section of the e-bay website. new sections will be added for paris and london. and activists are calling on the board to beef up its online sales strategy. now coming up, we are live at the air show with and exclusive interview from the airbus ceo fabrice brigler. and if that's not enough, we'll discuss the problems with the f-35 fighter jet. so plane crazy, stay with us.

>> announcer: you're watching "worldwide exchange." bringing you business news from around the globe. welcome back to "worldwide exchange." the air show kicks off minus one of the star attractions. the new f-35 fighter jet won't be making an appearance after an engine fire grounds the fleet in the u.s. we speak to the ceo of lockheed martin which makes the plane exclusively on this show. a sweet deal to kick off merger monday. chocolate maker lindt is buying

russell stover. this is the biggest in lindt's history. and could it be a fifth time lucky? they are ready to recommend the latest bid to shareholders as the u.s. drugmaker raises its bid to $53 billion. the death toll mounts as israel continues its offensive in gaza promising to inflict a significant blow to hamas as more rockets are fired into israel from the lebanese border. airbus launched a version of the a-330 neo that will be powered by rolls royce engines. phil lebeau just caught up with the ceo of airbus and asked him about the launch. >> that's great news for us. we have a great product here. we have sold more than 1,000 aircraft so far. and we have studied how to reduce production to be more efficient than the 77, which has

higher maturity and reliability. so we have a market of 1,000 aircraft to sell. >> reporter: you are looking at fuel efficiency greater than 14% reduction relative to other aircraft in its class. when you look at the launch customers, you're going to announce three of them today, how much demand do you belief is out there for the a-330 neo? >> if we see that you can sell 1,000 aircraft, i think he is right. this is very typical but after ten days or two weeks of active marketing of this product, we get all of the big names of the company to select the 330 neo. it will be a big success for us. >> reporter: this is huge news here, but later this year you got the first delivery of the a-350. when looking at the wide body market, the next four to five years are crucial, aren't they? >> well, this year will be crucial. as you say, the 350, we had 35 this year and are preparing for

delivery to our customer. then we ramp up the production and will deliver ten aircraft at the end of 2018. so this one is a very big challenge for around 1,000, but we are on track so far. >> reporter: i want to shift gears and talk about the plant in alabama. you are in the process of building and it will have the first deliveries beginning in the next year or two. are you on track right there and are you finding the level of skilled labor that you're looking for when you decided to built a plant in the u.s.? >> we have zero regret. we got all the support necessary to prepare for it and we are on track. so we'll start operations next year and will deliver the first 350 aircraft to jet blue early 2016. and then we'll ramp up production to 50 a year. and thers a huge market of replacement in america. >> reporter: how do you feel

about the overall global economy as you look around at this air show this year, in terms of demand within the airline industry and the overall strength of the economy around the world? >> it is still strong, but of course we are in the global market so i don't talk about eurozone or american economic. and on top we are coming up with new products with 15% fuel burning improvements. you'll give a very big incentive to procure your new aircraft. so all in all, i think we can sustain the growth that, for instance, will move from 42% to 46% on single line. and on wide bodies there is still a huge demand. the only difference is that the market dynamic is different with winners and losers. so our job is to make sure we pick the winners. >> reporter: one last question for you. a lot of talk about 11-across seating in the a-380.

is there enough demand that we'll actually see this from your customers at some point? because others look at this and say, it's too crowded. what do you think? >> i think that we are improving how we market this or position this aircraft. and look at the rates, they have built 140 aircraft. they built their 50th last week and they will use this on all their u.s. routes. so this is a win for the airlines and the airlines will restructure. now it's time to look for growth. the 380 is the engine for growth. >> reporter: with 11 across seating there's growth there? >> absolutely. with more interest in this aircraft remaining at 18 inches per seat, which is much better than our competitor. >> so that's the latest on airbus, but what about the other key player? phil lebeau is now with boeing's

ceo. phil? >> reporter: thank you. i am joined we jim mcnerney. you heard the official news from airbus, the a-330 neo. how much pressure does this put on you? >> it is the older technology in the airplane being improved that will compete with brand new technology airplanes we've got across a wide spectrum of wide bodies. so we are always welcoming the competition and feel highly confident in our new technology line that is already in place as it competes against a refurbished a-330. >> reporter: you're showing the a-37-9. is the demand for the dreamliner, especially the stretch version, is it greater than you initially anticipated? >> it's about the same. i mean, i think the -- we always anticipated that the middle of the big airplane market was

where the action was. not at the super big airplane or the smaller wide bodies but right in the middle. and that's what happened. we have 1100 orders for dreamliners spread across dash 8s, dash 9s and dash 10s. >> reporter: the market overall, there's been so many orders over the last four years and some people say, are we close to a bubble? you hear this all the time, what is your take, are we close to tend of that? >> the numbers say we are not. we track deferrals and cancelations. below historical averages right now. there have been some other deferrals and cancellations in the industry. others would have to answer to those trends, but we see ongoing strong demand. and we're going to produce to it. >> i want to shift gears a bit to talk about export/import and whether or not congress lets it

expire later this year or whether or not they renew it. you've been in washington and talking with politicians and yet you hear the political tone out there of people saying, let it go, it is kroney capitalism. what do you say to those people? >> the import/export has been a very successful institution for the country. it makes money for the country, it doesn't lose money. every other country that competes with us has an import/export bag of their up. it's all regulated by a treaty that sort of prevents bad behavior, that prevents sub saidization. this is a regular environment to give lenders support when they need it. >> reporter: would you lose big openers if you didn't have export and import? >> well, i think this is why i'm optimistic that the u.s. congress will not deauthorize

the import/export back because i do think people are beginning to realize unilateral investmentis not a good thing for global competitiveness and for boeing. and the 6,000 small businesses that we support, i don't think it's going to happen. it would, in effect, favor those countries that continue this. it is possible we would lose orders and we don't want to be put in the situation of being disadvantaged. we think our technology is the main reason people buy our airplanes, but import/export puts a lot of pressure on us and a lot of pressure on globally competitive businesses in the country. >> reporter: a lot of talk about bridging the gap between the two. are you comfortable to bridge the gap right now? >> i think one fact for you, which is since the a-330, the

a30 lawn ch, we have outsold that regular airplane about 3-1. so we are making great progress on the bridge with the regular old 777, which is the most popular wide body airplane of all time. so i'm highly confident with those kind of trends that we're going to get through the bridge right onto the 777x later this decade. >> reporter: two last questions for you, first one, global economy. i like to talk to you about this because you get a pulse of what's happening around the world. how do you feel where it is right now? >> i think it's okay. i think there's moderate growth in the united states. europe is beginning to come back a little bit. i think that china's demise has been overstated. i think that china will do well. the middle east obviously doing well. and i think the business i'm in is going to do somewhat better than that. that's why we project growth rate that is are somewhat better than the gdp growth rates. because we have replacement kinds of technology that can

replace perfectly fine airplanes today, but do it so much more efficiently that people will move quickly. >> it is all about the fuel burn. >> it is all about the fuel burp and saving money. and that's why we are going to be growing at a multiple of gdp. >> reporter: final question, is this your final air show? >> i don't think so, but it's up to the board of directors of our company and my job, i love my job and am having fun. i'm becoming an old guy. but that's why people put makeup on me here this morning. >> reporter: jim mckerney, the ceo of boeing. the so-called old guy at the company. thank you for joining us here first on cnbc. back to you. >> phil, we'll be back with you in 20 minutes' time where we'll catch up with lockheed martin's ceo to find out if the fighter jet could make an appearance at the airshow this weekend. and for a round-up of what to

expect, go to cnbc.com. the european markets here are higher around .70 to .80% on the bounce of two-month lows at the end of friday's session. the u.k. markets are down 2.5%. the french and german markets are up 3.5%. the psi over in portugal bouncing more around 1%. we are losing 10% in the trading session today. looking ahead to industrial production, the data is out at 11:00 p.m. ced t /* /- cet. the chairman of tell.com and media is speaking exclusively to cnbc to explain where egypt goes from here. >> i think it's like a plane that is on the tarmac starting

to takeoff. so we are sitting on the tarmac now because we still are suffering from the aftermaths of this regime. so now after the asset of the muslim brotherhood, i think the country is back on its feet. people have the spirit that they want to build their country. they know their economy is suffering finally and they know that we can't keep them going like that. and that's why also the latest decisions if on subsidy removal have not been met with riots or because the government was very frank and the president was very frank about come plaining to the people and the truce of the economic situation. we have to really be -- this is not a us is tasustainable situa. >> so you would say to move quickly on this substantive

issue? >> yes. i think they are ready to take unpopular decisions because it's the only way -- we have a deficit of $300 billion pounds in both energy and food. so they have removed only food. there's more to come. but it's the first time a government takes these measures knowing they are popular. >> was it too soon for a capital gapes snacks the capital gains tax is too smooth, yes. the stock market does not -- we are still seeing investors contemplated what to buy and whether or not to go back into the stock exchange. they lost some of their blue chips which were registered there, so it is not an opportunity. even if it is a good idea, you are sitrying to prepare for the

implementation of this tax. personally, i think they should have just increased the flat fee, people would know what to pay on stocks and people are comfortable with that because they know when you create a tax on how much i made, i was going to calculate that anyway. not the most organized country in the world and our system that lives in texas. we already have systems readily available. the system was not done in the best way, no? >> we are joined now with more from hadley. we are actually talking about some level of tax reform in egypt. if i look at the situation in gaza or look at what is going on still with discussions in iran with the tensions in iraq, egypt is starting to look a little bit like a haven of relative stability here. am i being crazy? >> that's interesting because egypt is benefiting from one of the strange twists of fate.

as you say, rocket is a disaster area. and at the moment egypt looks pretty say. we know our country and opportunities, if people want to come to invest, this is the time to do it. there are income taxes that were a problem for many in the country because they are saying this is a problem. they are not a proper legal famework in place. with e don't have those laws and need to put that in place before we e plimt that kind of a tax. but all in all, these pretty game about egypt. he'sing willing at renewable energy to go green and other industrial things as well. >> he was talking about the impact of investors perhaps moving in the wrong direction. do you get a sense of authorities in egypt are aware of how damaging their policies could be and perhaps they will likely ease up? >> the conversation is ongoing. he met with the president last

week and he and other businesses as well. and they are the conversation. they are talking to the finance minist minister. at the same time, things like income tax, capital gains tax could be too soon. >> we know the ceo met with tony blare about what to do about the israel israeli/palestinian fight? >> he basically told me that he didn't see the u.s. anywhere. and it was time for egypt and other countries to take the mantle of leadership and to do something about the problem in their backyard. so we'll wait and see if that might come to fruition. >> we have to wait and see. we'll see that section in 20

minutes' time. still to come, the cost of food eases in india but with the likely return of el nino, could the prices heat up once again? details after the break. and a love shot of paris with bastille day celebrations are taking place.

japanese investors have been snapping up french sovereign bonds over concerns of the euro zone. nakiko has the story live from tokyo. >> yes, according to the japan finance industry, they bought $19 billion worth of french government bonds for the month of may. in compareson, german bonds saw a net loss of $9.8 billion and the u.k. bonds saw over $1.2 billion sold more than bought. as a whole they were worth $11 billion surpassing u.s. bonds during the same month. and japanese investors have been overall on the selling side up

until april. the market watchers say the demand comes from investors wanting to readjust their portfolios after the financial crisis. and there are also reports saying japanese investors are convinced from their own experience that the central bank is fighting deflation and it can be a rewarding one. that's all from the nikkei. back to you. now wholesale price inflation if india is increasing thanks to fuel costs. this data comes as good news from india's new government. the prime minister modi was elected and angry over rising prices in india. they are expected to moderate in june. we'll get the figures out at 12:00 gmt. and the chief economist for asia pacific at ihs global insight is joining us now. we are still looking at food inflation above 8% right now in the monsoon season and the season is up predictable right

now. what are you penciling in? >> i think what we saw was 5.6% overall, but when we look at the outlook for the next few months, there's a lot of concern about the impact of the el nino effect on food prices, the rainfall up to now has been well below average across much of india. so the risk is there could be some drought effects on crop production, which would push-up food prices. so although the wpi did decline in june, down to 5.4% year on year, i don't think that's really going to reflect what we're going to see in the coming months. the government's clearly concerned, the central bank's clearly concerned as well. and that's why they took measures already. the government introduced special measures in recent weeks to reduce exports of food and build up domestic reserves to provide for the potential impact of el nino. and on top of all that, india's

a big oil importer as well. and advance of the isis forces in iraq potentially creates risks that the oil price could go higher as well. which would also be a big negative impact on the indian inflation outlook. so near term it means that the central bank is probably going to stay on hold until it assesses how the el nino is developing and also what's happening with the oil prices. >> we just are digesting the details of the budget right now. obviously we came into this interview talking about the fact that there's pressure on the government right now to do something as far as that fuel and food price inflation is concerned. did you see anything or at least something in there to address the supply change issues as far as food is concerned? and something to phase out of these apm laws that prevent farmers selling direct to the market right now because it does seem to lose a lot of the value and significant price increase with the middleman there in the

market. >> i think what we're seeing is some direct impact to the extent that they can take action in the measures to try to prevent exports of food selling off of stockpiles abroad that has been restricted. so they have taken what action they can. but to address food infrastructure issues which was provided for in the budget is going to take many years. it's not something that can be done within a year or so. it's going to take three or four years at least to pump in money into agricultural infrastructure. this is a priority in the budget, so i do expect there will be action. but it's only going to yield results over a number of years. so this year it does look very difficult for the new government in terms of trying to get inflation down. i think it's crucial for india to lower inflation in order to get the economy moving again. you know, back to 7% to 8% growth. but it looks like that any rate

cuts will now be delayed for the near term, i think, until we see the outcomes of the el nino effect. >> you made the point that we need to see investment to the country. the retail space would make sense and yet we heard that the european company is actually pulling out right now. how do they reverse the flow and is the indian government sending the right message to these kind of names that we are going to do something? >> i think there was limited measures in the budget, particularly increasing the caps for foreign direct investment into insurance policy, which is something that global insurance industry had wanted for a long time now. so pushing it up to 49% for ownership is a step in the right direction that won't impress everybody. the investors want majority of control, but i think it is a big help and would expect to see more insurance firms entering into the indian market. and also in the defense industry, the cap was lifted to

49%. then again, for technology reasons, foreign defense companies will often want to have at least 51% control. but i think the biggest lack of action was budget. >> i have to jump in because we have to take a quick break. but you said you have only had six weeks to form the budget, so we have to wait and see on the details. still to come on the show, the airshow in farnborough kicks off. we'll speak to lockheed's ceo right after the break. how does the company turn this around?

welcome to "worldwide exchange." i'm julia chatney and these are your headlines from around the world. airbus and boeing are going toe to toe with strong orders going forward. they say the u.s. market is right for business. >> we ramped up production to 50 a year and there's a huge market of replacement in america. and a big $7 billion mortgage settlement today that will include members of the s&p 500 as they release results. and a sweet deal to kick off merger monday.

lindt is buying russell stover. the deal is the biggest in lindt's history. could it be a fifth time lucky for the u.s. drugmaker as they raise their deal to $53 billion? >> announcer: you're watching "worldwide exchange." bringing you business news from around the globe. the farnborough hair airshow is happening in hampshire as the fleet has been grounded in the u.s. but will they turn up at all this week? phil lebeau is joined exclusively by the ceo of lockheed martin. >> reporter: thank you. i am joined by marilyn here,

will we see this fleet here in the u.s.? >> we are in a development program right now, so we are in the midst of dealing with a particular issue, but it is like any aircraft development program. we have worked with the issue and get to reboot and we are hoping to see it on the world stage later this week. >> reporter: and the reports that are defense officials looking at this say we have not found the root cause yet behind this engine fire. are you confident that that will make the final determination in the next day or two? >> i'm certainly confident they are going through a disciplined process. they always do. this is normal for any aircraft development program to go through a disciplinary process, get to root cause and we are very hopeful it will be in time for the aircraft to be here. >> reporter: this is the latest setback for at least partial setback for the f-35. many people look at this program and say, great potential but

it's having trouble getting to it of the gate. what do you say to those critics? >> i say to the critics it is well out of the gate. in fact, we rebased in 2010 and since then it's a bid on a great trajectory. we have deployed aircraft and delivered over 100 aircraft and have driven the cost down on the aircraft from the first delivery to the last delivery by 55%. we are investing additional money into the industry team to continue to drive the cost down. and i'm extremely confident about it. >> reporter: are cost runs in check? >> we are continuing to drive down the cost curve. ever since we redefined the program, so we are well underway. >> reporter: you spent a lot of time in washington talking to defense officials. from your perspective, from the environment and the attitude of congress toward defense programs, is it on par or has it improved at all? >> i would say in my conversations with members of congress, what they are concerned about is making sure that they meet the national security requirements to protect our citizens. and i think that's the first

order for any country. so as i talk to them and we talk about the requirements, certainly there's not up limited budgets but the global tensions are continuing to arise around the world. and that's front and center for them that we make sure to protect our citizens. >> reporter: do you expect major programs like the f-35, when they come up over the next three, five, ten years, is the appetite still going to be there because so many people look at these programs and because of the hurdles you have to overcome at the beginning, they say, is it worth it? >> i think there's no choice. i mean, we have to have military superiority in order to protect our citizens. and so it's absolutely imperative that we are constantly investing in the best technology that we can so that we can have an advantage over our adversaries. >> reporter: talking about technology, unmanned aircraft, nothing new to you at lockheed martin. you have been doing it for decades but the growth in unmanned aircraft both on the civil and military side, where do you see the greatest potential right now when it comes to unmanned aircraft?

>> we see with unmanned aircraft in the national security arena integrating them with the traditional manned aircraft is a big opportunity, but if you look at other applications whether it is environmental research or disaster relief or the ability to help with climate assessments and monitoring pipelines undersea, it has a huge range from land to air to sea, and we are involved in all the areas. >> reporter: you mentioned so many people want to focus on the traditional programs like the f-35 or unmanned, but it is the other areas where as ceo you get a little excited relative to other things. hydrasonic aircraft is sort of an interesting area that is growing in the future, isn't it? >> it is. it absolutely is and we have been investing in hyper sonics for a number of years and just came out with the sr-72 which we are in the midst of working through. the intelligence reconnaissance aircraft that can fly mach-6.

so it is exciting. >> reporter: one final question, you're going to have members of congress here today and members of parliament. you were here last week for the military show and have been talking with them. is the feeling in europe the same as it is in the united states in terms of the defense budgets and in terms of the need for spending on large military projects? >> absolutely. i mean, there's always constrained budgets. sometimes more often than not, but it is very critical we continue to invest in our military so that we can have our men and women who are serving around the world to have the best equipment they can to protect us. >> reporter: marilyn hewson joining us now from the farnborough airshow. thank you. the session high was around half a percent for the nasdaq. a couple percent higher for the

dow and the s&p 500. we are following the momentum today. 63% higher for the dow. and 18 points higher for the nasdaq. we very little data on the agenda today with janet yellen speaking on wednesday with 55 companies from the s&p 500 approaching. a lot for investors to digest. the european markets are higher, but the european industrial production is down 1.1% for may. this was the weakness in the likes of the german, french and dutch data, too. weakness there but we have heard significant confirmation from the germans last week that q2 was a bit weaker than expected. soft anything a little bit over the last hour to hour and a half to trade up .60%. we'll have a look at the individual stocks that we are watching in the market today. we've got lindt up 1.3%.

now it's becoming the company russell stover. lindt didn't disclose the price but says it's the largest acquisition in history. russell stover was founded back in 1923 nope for its boxed chocolates and the third largest u.s. chocolate company with $500 million worth of annual sales. so keep focusing on the price. right now the stock is up 1.3%. moving on to shire, the u.s. firm has made another offer for the london listed rival. this time at 53 pounds and 20 points per share. the latest at $53 billion. shire now says they recommend the offer to shareholders. that stock is up 2.6%. and adidas is up 2.67% after germany trumped argentina in the world cup final. did you stay up to watch it? goldman sachs says the clothing manufacturer and the taiwanese

clothing supplier will be big winners of the tournament. let's have a look at bond rates right know. we are just talking about the situation in portugal with a big bounce in the equity market. we are also seeing a pull-back as far as the yields are concerned though we have given up gains over the last hour in line with the equity markets. we have the yield at 3.8%. it was above 4% in trading in last week's session. we have the dollar on a bit of a pause here ahead of what we get from yellen. euro/dollar, 1.3620. the traders are saying we are happy to be near the 1.37 level. they will reassess that if we get an extremely dubbish look putting the dollar under pressure right now. the audi dollar, 1.38. we have to take a quick break, but as the death toll from israel's gaza crisis continues to rise, can egypt provide stability in the region?

stay tuned as we hear from one of the country's most powerful businessman. stay with us.

welcome back to "worldwide exchange." these are your headlines. citigroup is expecting a $7

billion mortgage settlement. and lindt is buying the candy company russell stover. and drugmaker shire is ready to recommend a $53 billion bid. just before the break i was talking about the eu industrial production figure this is morning coming out down 1.1% for the month. the eurozone forecast is down 1.2%. so a little better actually than expected, but we had a pretty fair warning on this given the weakness in the italian, german, the dutch and the french figures. we also saw a slight revision to the industrial numbers down from 0.8%. so a bit of a pull-back in the april numbers as well as a downturn in the may. now let's take a look at

today's other top stories. citigroup will reportedly announce a $7 billion settlement with the u.s. justice department today resolving allegations the bank saw toxic mortgages in the runup to the financial crisis. about $4 billion will go to the department of justice. 2.5 billion for consumer relief. $500 million for the fdic and less than $300 million to fight u.s. states. the settlement signed this weekend caps months of talks during which the u.s. demanded $12 billion and threatened to sue. citigroup also reports second quarter results at 8:00 a.m. eastern. the bank is forecast to earn $1.08 a share versus $1.25 a year ago. the revenue is also expected to decline to 18.9 billion dollars. the cfo warned back in may trading could slump between 20% to 25%. investors are also listening for comments on other legal issues including the investigation in mexico and progress on citi

re-submitting capital plans to the fed. citi is trading relatively unchanged for now. it was up the last three months near 4.5%. egypt is the only hope for stabilization in the middle east according to one of the most powerful businessman. speaking exclusively to cnbc, he criticized the u.s. foreign policy in the region. >> we think that this is actually not there at all. with him doing his best, he's the only one that seems to be doing the very best. but the u.s. as a super power, we don't see it. we see a big mess. we see them destroying the streets of big cities and

announcing the islamic and the most important element in terms of richness, energy, stability, so we stand guard that we have this army and have stabilized our country. >> does egypt have a role to play in the stabilization of the region? >> egypt is the only hope for stabilization in this issue. the united states when they should have not interfered, they did in iraq, and they left iraq in this shameless situation. they dismantled the army and the police who ended up in the country. when they needed to help syria's freedom fighters, they didn't.

and so what do we end up? we end up with people coming from the mid-ages trying to turn this whole era into the 50th century situation and islam definitely has nothing to do with them. >> we are joined now with more on this story. not very complimentary as far as u.s. policy is concerned. and this goes to what is happening with the situation in the gaza strip, too. can i ask you about brokering a cease-fire here? because traditionally this has been crucial with the relationship between hamas and i egypt right now. >> i think he was trying to leave me no doubt that he supports the palestinian cause, not necessarily the agenda of hamas. israel has fought for the palestinians and this is a new relationship. it wouldn't be unheard for them to be involved in the

negotiation, but what we do know is that egypt offered and hamas said absolutely not. we would talk to qatar and turkey but not egypt. what you are going to see from the u.s. including secretary kerry, that are interesting in brokering a peace deal, but until you get both parties involved you won't see a solution. >> we heard that egypt was having conversations with tony blair over the weekend for some of the western powers. do you see that as a game-changer here as you quite readily said until israel comes to the table, what kind of a checkmate situation is this? >> they have the crossing with the gaza strip. in terms of the relationship with hamas, hamas had better friends with the muslim brotherhood and mohommad morsi than the current administration. so you are seeing friction as a result of that. >> hadley, thank you for the update.

still to come on the show, saving for a rainy day. find out why the next guest thinks companies will continue to stockpile cash until they see further improvement.

welcome back to "worldwide exchange."

it is merger monday. a sweet deal to kick it off. lindt is buying candy company russell stover. lindt didn't disclose the price but said it's the largest acquisition in its history. russell stover was founded in 1923 and known for its balked chocolates. it's the third largest u.s. candy company with around $500 million in annual sales. could it be fifth-time lucky for shire with a bid of $53 billion. shire says it will recommend the offer to shareholders with shares trading higher. and a match could be lit today under a mega deal in the tobacco sector. camel unveiled they are in talks with british american tobacco that owns 42% of the market.

you can have a look at the individual stock performances, reynolds american is just up and lorillard is up .80%. all outperforming the individual markets. and whiting petroleum is looking to pay $13.90 dollars per share to buy kodiak oil and gas for $3.8 billion. they account for 100,000 barrels of oil per day. whiting and kodiak trading in the german session lower by 1.8% and kodiak down just shy of .30%.

in the latest business sentiment survey, the professionals say many companies continue to buy cash. of the association for the financial professionals, jim, thank you for joining us. what proportion of the businesses surveyed are looking to build cash reserves and what portion are looking to reduce right now? >> well, i think it's important that this is actually somewhat of a positive story here and that we found that about 40% of our companies have increased cash and almost 4/5 of that came from increased operations. so there's a positive news here in terms of cash on the balance sheet of companies in that businesses clearly are improving. now, for those companies that have spending cash, we have seen a nice bump up in terms of

cap-exexpenditures over years. >> what portion are we looking at to make capex expenditures as far as retiring debt and stock buy-backs? >> right. so about 25% of the companies are actually deploying that cash or the xash is decreasing. of that we have seen an increase of 30% two years ago to about 43% now of that segment that have been spending money on cap-ex. then 20% in terms of stock buy-backs with mergers and acquisitions in there. so they are deploying the cash in a whole range of asset classes. >> that's interesting as i look at what the bankers are saying and they are saying yes, u.s. lending to firms is approaching record highs but department believe we are making the building blocks here to see a stronger u.s. demand situation and an organic growth is actually being pushed towards share buy-backs and other options. it's not about cap-ex here.

>> i think those show there's some confidence in the economy going forward. as i said, this is a three-year trend in our analysis and we have seen an increase in cap-ex, but clearly the flood gates haven't opened in terms of the expenditures. but i think all those things in addition to hiring is improving, the fed is looking to cut back on the bond-buying program. so i'm not thinking this is an indication that happy days are here again. but there's clearly some positive momentum in our survey numbers. >> i get that, jim. can we read into anything as far as the choices are concerned, safety versus liquidity? >> right. well, it's always, for corporations it's always about safety. almost all that money is sitting in bank accounts and banks at this point. there's a bit of a good deal of uncertainty in terms of what the sec is going to do in terms of

money market reform. so it's not sending in money market funds but city zitting in banks and safety is the key at this point. >> so you're not reading into anything at this point. >> i think it's protecting company cash and will be sitting in the safest asset class. >> that makes sense. jim, thank you for talking to us. we have to take a quick break, but earnings in the city. we preview the global banking giant's numbers in the possible litigation risks. and we'll leave you with a look at how the futures are trading ahead of the open on wall street.

welcome to "worldwide exchange." i'm julia chatney and here are your headlines from around the world. airbus claims the u.s. market is right for business. >> we have ramped up production to 50 a year. and there is a huge market of replacement of single line in america. citi said to announce a $7 billion u.s. mortgage settlement today. the bank also reports earnings topping a week to see 55 members of the s&p 500 release results. a sweet deal to kickoff

merger monday. swiss chocolate maker lindt is buying u.s. candy company russell stover. this is the biggest in lindt's history. and could it be a fifth time luc lucky? shire the drugmaker raises their bid to $50 million. >> you're watching "worldwide exchange." bringing you business news from around the globe. if you're just tuning in, thank you for joining us here on "worldwide exchange." here's how the u.s. figures are trading, gaining 63 points for the dow with the s&p 500 higher by seven points. and for the nasdaq, 18 points of gapes as far as the futures are concerned. despite managing to eke out g e gains yesterday, the majors lost

1%. 55 companies for the s&p 500 are reporting today. an janet yellen is speaking tuesday and wednesday. this morning the european market hanging on to gains from earlier in the session coming off the highs on weaker industrial production numbers down 1.1%. a touch better than expected, but it just reopen forces some of the concern we have seen feeding through into some of the q2 numbers across europe. right now the ftse 100 is higher .60%. the portuguese market is tilting into the red but it was gaining earlier on in the session with a 10% loss in the session yesterday. so yes, gaining and losing a bit of ground now with the session progressing. right now we've got the portuguese market up .60%. the future question is, how do you make money in the markets? listen to what the experts have been telling us. >> i still have some trade on

the italian curve, so still betting on yields coming down and the curves becoming more con cave. so those trends are still a function of relatively low volatility there relative to the carrier. we are actually quite nervous about commodities overall because as you say, they don't seem to be driven by fundamentals, they seem to be driven by easy money and concerns about other areas. and how can we then -- commodities are driven by the global economy. the global economy doesn't seem to be driving them at the moment, so it's the direction, is it actually clear? i think what had been happening to some extent is that this is related to china growing quite strongly anymore, but if

europe is not in session and the u.s. is doing okay as well, you do actually have profit demand growth. citigroup will reportedly announce a $7 billion settlement with the justice department today saying they sold toxic mortgages before the financial crisis. $2.5 billion for consumer relief, $500 million to the fdic and less than $300 million to five u.s. states. the settlement reportedly signed this weekend caps months of talks during which the u.s. demanded up to $12 billion and threatened to sue. citigroup also reports second quarter results at 8:00 a.m. eastern. they are forecast to earn $1.08 a share versus $1.25 a year ago and revenue is expected to decline to $1.9 billion.

investors will also be listening for comments on other issues and progress on citi resubmitting capital plans to the fed. citi is trading in the german market session relatively unchanged just shy of 4.5%. tomorrow we have jpmorgan and goldman sachs followed by bank of america on wednesday and morgan stanley on thursday. joining us now is jim, the associate director of equity analysis at morning star. jim, the wild card was always going to be what happens as far as the settlement with the department of justice being concerned. what are your thoughts on that and tell us your forecast earnings for today? >> yes. actually, you know, i think it is pretty well accepted that the settlement comes in near $7 billion. i think that won't be much of a surprise. i think what investors will be looking for is some color around the settlement. this is generally higher than

investors expected. and it's interesting that these settlements have been going up. the department of justice seems to be getting tougher, so investors are looking for some color for management around how the settlement developed. why the department of justice is being so harsh. we don't actually do quarterly forecasts in the morning, so the other big story is going to be on the expense side. as you mentioned, the rates are down and we know trading activity is not going to be good. the markets haven't been that volatile. and citigroup has had issues with come line. it will be interesting to see how they can keep expenses under control in this kind of environment. >> what about the foreign exchange investigation as well? we have been seeing high profile exits with time from the fixed income division. what do you expect them to say on this, too? >> i'm not sure if we'll get much detail there since not everything is finalized on that side. but again, it's going to be a story of expenses, how much is

all this going to cost citigroup. you know, the expectations for the top line are weak. the only thing they can do to control the bottom line is cut expenses and it will be very difficult to do that when they have so many problems to deal with. and i think management turnover as you mentioned is becoming a bigger problem at the major banks. we have seen a little bit at citigroup. obviously they have switched ceos in the last couple of years. we have seen a lot of jpmorgan. more so than the management turnover, how can you improve management, improve the culture with a revolving door in so many places. >> what about the trade in revenues as we said the cfo kind of indicated they could be down between 20% to 25% in q2. the expectation for that going forward, what are your thoughts? >> i think that might be weaker than people expect. you know, management at the banks have been attributing this decline in trading revenue to cyclical factors.

the market not being that volatile. but i think what we have seen is we've had a long bull market in fixed income. a long bull market in equities. you know, really, most of the past ten years has been good for commodities. and i think what the emphasis is on high frequency trading, how much more trading can the banks really do? is this something that's going to be a secular decline more so than just a cyclical shift? >> assuming the numbers come in in line with consensus, what are your thoughts on the price? >> on the stock price? >> yeah. >> we have a neutral rating on citigroup right now. our fair value is $48. the last i saw it was trading around $47. so we're neutral on citigroup as well as the rest of the big banks. it is just hard to see how there can be much upside unless rates rise significantly. and that's something we don't expect to happen any time soon. >> a few quarters to wait, it seems. jim sinegal, the associate

director at morning star. coming up, another merger monday. no less than five deals are in the works today. we'll run you through the numbers and the details. we are back in two. [ male announcer ] we know they're out there. you can't always see them. but it's our job to find them. the answers. the solutions. the innovations. all waiting to help us build something better.

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it's a toss-up over which is hotter, the heat or the headlines of what is becoming a major merger monday. here's all the details with mary thompson this morning. chocolate, cigarettes, where do you want to start? >> we'll start with a smoke. a match can be lit under a deal that's been talked about for a while. we have confirmed that reynolds is still in a talk with lorillard. let's take a look, all of these are higher in european trading this morning. well, the u.s. engineering and construction firm acom is going to be buying its rival for $4 billion. urs is seeing an 8% to friday's

closing price. the deal will also create the largest publicly traded firm based in los angeles. aecom and urs worked together on the freedom tower in new york. we'll look at how shares are trading this morning. there we go. they are both higher in european trading. yes, that's european trading this morning. urs up 8.4% on the news. whiting petroleum is buying t kodiak for 13.5% per share. they will combine for 10% of the more than 1 million barrels of oil that's extracted per day. whiting and kodiak right now, we'll take a look at how their shares are trading. both lower with kodiak up a quarter percent with whiting down 1.25.

and a deal worth $53 billion from shire. it is looking to be the largest aversion deal under a u.s. company looking to buy a firm and basing executive headquarter overseas. shire shares are higher up 2.67% and abbvie is up 1%. and lastly a sweet deal. lindt is buying russell stover. lindt didn't disclose the price but says it's the largest acquisition in history. russell stover is best known for boxed chocolates and founded in 1923 and is the third largest u.s. candy company with about 500 million in annual sales. taking a look at switzerland, lindt is seeing shares up 1.6%. the ceo of lindt will be a guest

on u.s. closing bell today. that's a look at the deals happening today. back to you. >> thank you. i was mesmerized looking at the chocolate we were just showing there. thank you, mary. now we'll take a look at some of today's headlines. citigroup is primed to announce a $7 billion mortgage settlement. swiss chocolate firm lindt is buying u.s. candy company russell stover. and shire is saying it is ready to recommend a $53 billion. israel says it has shot down a drone from gaza. it's the first reported deployment of an unmanned aircraft by palestinian militants. the rocket attacks in gaza into israel have been regularly intercepted while a counter attack from israel has left more than 160 dead in gaza according to officials. nbc's martin fetcher is joining us now from tel aviv. very little sign of letup of the violence on both sides right now

it seems. >> reporter: that's right, julia. the 40 rockets fired from gaza at israel this morning and israel attacked gaza 42 times from the air. so the same kind of violence from both sides even though peace talks are in the air, there's a lot of talk about a cease-fire proposal. the palestinians as you mentioned fired an unmanned drone into israel. it was shot down by the israeli air force who say they were expecting such a kind of an attempt. they shot it down but with a patriot missile. an american-made missile israel has had for a long time. they don't know whether that drone contained any kind of explosives or maybe a camera. and they don't know yet where the debris is. it was a surprise that the palestinians had that in israel but they were waiting for them and shot it down. >> thank you for that.

and they expect up to 100 orders for the new aircraft at the farnborough airshow where we have been keeping you busy all morning. is the tone positive right now? does it look to be a game changer for us in the wider body segment? >> reporter: i don't know if it's a game changer but it is what airbus needs in order to stay competitive with boeing when it come stos the wide body segment because the dreamliner has garnered so many orders, airbus needed to do something. they have taken the a-330, which really was introduced 20 years ago, and now they said we have new technology with the a-330 neo. now we can compete in the wide body segment more effectively with the dreamliner. so they have announced the launch of it and the launch customer announcement will be coming shortly. and they believe they can sell at least 1,000 of the a-330 neos which is crucial for having the development and the production over the next five to seven years.

you're looking at the wide body segment. as that announcement came out, another announcement came out from airbus involving the narrow body a-320 neo. the company announcing that one of its customers, aig, which is a leasing company, is going to be taking about 20 of these orders for the a-320 neo options and are converting them to firm orders. so for airbus, they've got news on the wide body and narrow body segment. with regard to the a-320 neo, we had a chance to talk to the ceo earlier to ask him about the progress for the a-320 manufacturing plant in alabama in the united states. here's what he had to say. >> alabama is a great state and we got all the support necessary to prepare for it. and we are on track. so we'll start operations next year and we will deliver the first 20 aircraft to jet blue early 2016. and then we'll ramp up production to 50 a year.

and there is a huge market of replacement of single line in america. >> reporter: meanwhile, boeing is making plenty of news of its own today at the farnborough international air show with the 787-9. this is a version of the dreamliner flying at the show today. the boeing ceo jim mcnerney told us earlier today they are not concerned about the a-330 neo because they believe their dreamliner is well positioned for orders for at least 1,000 of the dreamliners. and he does not believe there's a bubble in terms of the larger overall order market when it comes to commercial airplanes. >> we track deferrals and cancelations below historical averages right now. there have been some other deferrals and cancellations in the industry. i think others would have to answer to those trends, but we see ongoing strong demand. and we're going to produce to

it. >> reporter: so a big day for news from boeing as well as with airbus. as we take a look at share from both companies over the last year, we expect more order announcements, but the one a lot of people are keying in on is the a-330 neo launch customer. we expect to hear that from airbus in the next hour or so on a big day with the airbus with the wide dbody air 330 neo bein released. >> what do you expect to hear over the next few days? >> reporter: well, it won't be flying today. they believe it will be cleared by the pentagon and the u.s. department of defense in order to leave florida to come over here and to fly at the air show before the end of the week. we have heard in the past they did believe the f-35 was going to fly during media days. we are here on media days and it's not going to happen. so it will be interesting to see over the next day or two if it gapes clearance, but they

believe it will be flying in england by the end of the week. >> so phil, great work. thank you for keeping us updated. now we'll take a quick break, but coming up on "worldwide exchange. "plenty of action as we get into the flood of earnings from the s&p 500 this week. stay with us.

welcome back to "worldwide exchange." here's what the european markets look like so far this morning, the ftse is higher .74%. por portugal is seeing a bit of a recovery. the u.s. markets are taking a key from what we are seeing in

europe and the gains in friday session. the s&p is higher by 8 points. the dow is set to gain 70 points and the nasdaq is looking higher by 20 points. we are joined by the chief market strategist of tech partners joining us from chicago. bob, we are looking at the major banks. what are your expectations for play this week in the markets? >> well, overall unfortunately we are going to see earnings disappoint on the top line quite a bit. down 2.9% gdp came from somewhere and will start to play out. the most important earnings are goldman sachs and intel. those two particular companies are going to set the tone for earnings up usually. goldman sachs, i'm interested in their trading revenue because if goldman sachs has revenue down, that's a bad thing for the

overall market. >> we are seeing gains with gold here. what are your thoughts on gold, is it a buy? >> i don't think it is. gold has been ranging from $12 to $13.40. i would say to sell gold before it breaks below the $13 level. we are definitely seeing geopolitical tensions springing up from the financial market perspective of what this develops overnight. gold tends to pop from that. if there's any calming at all, you will see a sell-off. gold has to break out of the bond at some point. fundamentally, it will break down out of the band. but if the israeli tensions continue to rise, you're starting to hear talk about ukraine and russia again which seem to have come down from the financial market perperspective. so gold is more of a predictor

of whether the situations will escalate all at once. and that makes me worried about the bull market than i have been probably since the inception. >> bob, great to talk to you. chief strategist at tethis partners. and on a programming note, cnbc will host the delivering alpha conference this wednesday in new york. they'll look at the top investors and political commentators to offer their candid views. jack lew will give the keynote address. and you can check out more at deliveringalpha.com. don't forget european closing bell will speak to the ceo of lindt and springli coming up. and what a great way to end the show talking about chocolate. thank you for watching "worldwide exchange." "squawk box" is coming up in two.

good morning. welcome to "squawk box." citigroup about to check into earnings central and the banking giant settlement deal with the government is also expected to be announced this morning. we have several mergers in the works in the oil and tobacco world and the chocolate factory. and the world cup is finally over and the lead is someone did score a goal. yes, germany beating argentina 1-0 in extra time. i watched a lot of the game. i went and ran three miles, i cooled off, showered and came back and didn't miss anything. i saw the final goal. a lot of guys got hurt, though. celebrations in berlin with rioting in buenos aires.

it is monday, july 14, 2014. and "squawk box" starts right now. good morning. welcome back to "squawk box" here on cnbc. i'm andrew ross sore kip along with joe kernan. becky is returning tomorrow. we have a lot to talk about this morning and we'll start with the markets. we have two big themes going on. earnings season and janet yellen's policy testimony to congress. citigroup is going to be kicking off their earnings parade before the bell this morning. the bank expected to earn $1.05 a share on revenues of 18.9 billion dollars. and in other news this morning, you'll see it in all the papers, the firm's mortgage settlement with the government will be announced today. the total price tag pegged at $7 billion to include $4 billion in cash to the department of