welcome to "worldwide exchange." i'm julia chatterley and here are your headlines. wh hamas remains defiant as they reject a cease-fire. israel says it will agree to the deal. the ecb ensures that additional measures are ready if necessary as investors turn to janet yellen's testimony later today. another listing in the mega

mobile space. and software ag warns on sales. the stock sharply lower in frankfurt after project delays will miss forecasts 37. >> announcer: you're watching wases was, bringing you business news from around the globe. a warm welcome to today's edition of "worldwide exchange." take a look at what's coming up on "worldwide exchange" today. analysts say we need to see deal activities more than triple to support the u.s. economy. janet yellen and mark carney face questions in their country's respective policymakers. and banking on good numbers. jpmorgan and goldman sachs post q2 figures today.

we'll get the latest on those. and building bricks in the economy. we take a look at future prospects as they get set to meet in brazil. fighting has broken out in libya's capital destroying 90% of the planes at the airport. militias have been vying for control of the airport for years. the u.n. announced it was pulling its staff out of the country due to the deteriorating situation. at least 15 people have been killed in the violence since sunday. have a look at how all markets are reacting, under a little bit of pressure this morning. brent down by around 0.3%. they slipped in trading yesterday. while keeping an eye on the situation, not necessarily worried about a broader oil impact for now. israel says its security cabinet backs a cease-fire. however, hamas has rejected the cause for a lesson in fighting

saying it is not worth the ink it's written on. cross border air strikes and labor bombardments continue. u.s. president barack obama has come out in support of egypt's proposal. >> i believe further escalation benefits no one, least of all the israeli and palestinian people. we're going to continue doing everything we can to facilitate a return to the 2010 cease-fire. we are encouraged that egypt has made a proposal to accomplish this goal which we hope can restore the calm we've been seeking. >> hadley campbell joins us now. where does this leave us? we have israel saying we will agree to a cease-fire. who in hamas is saying they won't? >> at the moment, it's the al qaeda fighters. but you're not going to get a unified message from hamas yet. you're not getting an official statement. there will be one eventually. if the cease-fire does go

through, we will see relative calm in the next 24 hours and eventually hamas and the israeli leaders will meet in cairo and there will be negotiations, etcetera. but this is all contingent on some -- this is a unity government. they have had some consensus on what they're going to do moving forward. this is the best time for israel to move ahead and come to the table. there haven't been that many casualties on the israeli side. it looks like they've made a massive movement to weed out terrorists in gaza and they still have public opinion in the west on their side for the most part. because it's a we're under attack kind of statement coming from the israeli government. >> so if he can come forward at this stage and say we were just retaliating and now we brought

everybody to the table -- >> correct. >> is now the best time for israel to go on the offensive and try to take out some of the leaders in hamas given we have this situation right now, the civil war looking the other way and there's less support for hamas on the egyptian side, too. >> there is that side to the argument. the other is what we've been seeing in the press. this is the age of not just tv, but you're getting pictures, you're getting live action. and people are seeing the damage, really understanding some in the west, some in the united states for the first time what the situation really is. what a tight area this is, overpopulated. the israelis can call them ahead of time and tell them, by the way, we're bombing this building and targeting this area, etcetera.. but there's nowhere for these leaders to run. so they're really getting a clear picture of what this really means when you talk about a ground offensive. and this is a naval bombardment

of this area, very highly populated. already we're seeing hints of it. >> it's a longer, drawn out issue. does this bring us any closer to an ultimate solution and an end to the ongoing violence we see? >> in terms of his poll numbers, he always does better when there's some sort of conflict going on. during the iraq invasion, you know, with economic numbers. >> i'd like to talk to you quickly about libya, too. what's the situation there right now and how closely should we be following that? >> i think quite closely, now they're going to ask for some international intervention. this is another example of an unfortunate intervention from the west that hasn't led

anywhere but to violence and chaos. but certainly in terms of the impact on oil, we have to keep watching this quite quickly. >> thank you for your perspective. now, russia has asked military envoys from 18 countries, including the united states to visit the town in a region where it claims one person has been killed. it's the latest in words between the two countries. the tensions have a negative impact on russian assets with the ruble falling for the second day this week, off right now by around 0.3%. we have some breaking news, we're hearing u.s. military officials have lifted the grounding order for the lockheed

f-35s. the question is do they get over here and present themselves by the end of the air show? we did hear from the ceo yesterday in the show, and she was saying she was very hopeful. ecb president mario draghi has assured the markets qe remains on the table. speaking before the european parliamentary committee, draghi reiterated that the ecb stands ready to act if the risk of low inflation increases. >> monetary policy stands, is and will remain a coccommodativ for an extended period of time. the council is unanimous in using other instruments, unconventional instruments if there is so that protracted the period of low inflation were to

rise. >> janet yellen heads to council today to give part one of her semi annual position on policy. the senate banking committee is at 10:00 a.m. eastern. yellen is expected to stick close to the previous statement. yellen has repeatedly refused to specify when the fed is likely to start hiking rates. tim of the s&p indices joins me now. we just laid out a number of risks and ended by talking about central bankers and how seemingly they the end continued to underpin the markets. we talk about complacency in the markets right now and why we don't see follow vilt picking up. but you turn it on its head and say why is volatility, the vix in particular, so high?

>> it's one of those things. in the past weeks, months, even, we've seen very little volatility for the markets. that number for the s&p 500 is running at about 6%, 7%.now, a very common measure is the market's specation of future volatility. that is currently at about 12 or double what we've seep recently. >> you're making a sdijz between expect actions in the market and what we're seeing in terms of volatility? >> absolutely. it's what we've been seeing and what the markets, if you like, seem to be expecting. they're particularly worried right now. or can you make money from this. and the answer is really to deal with the environment that we're facing right now, which is the

daily cut and thrust of news events, earnings season, so on and so forth. >> if we look at volatility, it's twice as high as volatility. this is investors looking at the possibility of terrorists and saying, look, we're putting a significant weight behind that right now. >> absolutely. that's not an usual situation. it's insurance if you like. >> how do i make money? selling volatility is an expensive exercise if you get it wrong. >> however, it is potentially a way to harbor the premium to sell insurance. it's not a strategy if you're not courageous. by selling options, vix changes.

>> do you think volatility is why this divergence actually realized or expected volatility doesn't come down to what we're seeing in the markets right now? unfortunately, it's too expensive to try and trade that. >> it's very possible, actually. you need capital and you need expertise and you need courage to provide insurance for the equity markets. maybe there aren't enough people with those characteristics to bring the vix down to where it should be. >> so is it that traders are picking up or is it about pricing and that it's not a great trade here? >> it's a mixture of both. it's also the reality of where we are. there remains always rick to the economy, to the markets from classical -- something like an earthquake in the u.s. but remains day-to-day surprises. it's very hard to say, should it be higher, should it be lower.

>> we'll continue to watch it. thank you for joining us this morning, tim. now you're looking at live pictures of berlin where fans are awaiting the arrival of the national football team. they've just landed in germany after their victory. will angela merkel be with them? remember that shot of her looking slightly awkward with the german football team? right now, those are the pictures of the crowds waiting for them. up next, the shares are moving higher for h&m. more after the break. stay with us.

welcome back to "worldwide exchange." european markets losing ground over the next hour or so, stoxx europe 600 down 0.1%. the industrial production data yesterday, we've got an indication there's a bit of slowing momentum as far as the brief eurozone recovery data is concerned.

the german market under water by around 0.2%. we've got the zew survey out, not expecting a good reading given what we've heard from the economy minister in germany on q2 already. we've got to french markets down around 0.3%. having a look at stocks, getinge down around 2.8% after an unexpected decline in second quarter profits. software ag down just shy of 15%. shares plunging this morning after the firm cut their 2014 sales outlook. so right now, they're saying revenue is going to be relatively stagnant. they have had higher forecasts, in fact, h & m higher by 1.7%. the fashion retailer posted a

rise in sales for june up 12% compared to last year. peugeot up just shy of 3.5%. jpmorgan upgrading the stock to buy. moving on, we had traders overnight saying the positions right now are squarer than they have been going into the data and fomc meeting recently. we've got janet yellen speaking later today, too. their belief is even if we do see a shift in policy, you're not going to see the dollar moving off the back of that. draghi's comments about the strength of the euro possibly having some impact. we had the rba wait and see mode from the minutes today, too. we'll take a look at sterling. we have uk inflation data out later today. and mark carney testifying on the financial stability report.

right now, trading below that 1.71 figure and yesterday, 1.7070 right now the level. it's a big week for cnbc as we team with institutional investors to present the annual delivering alpha conference on wednesday. some of the biggest names in business and politics will be on hand and kate kelly has a preview. >> we're just a day away from our annual hedge fund conference. there should be plenty to talk about. the trouble making money with global macro betts and where to look for returns in the stock market. we'll have key note speeches by jack lew, continuing the tradition of always having the treasury secretary kick off the day's proceedings. carl icahn who will hopefully shed light on its latest plans for family dollar and new jersey governor chris christie.

i'm always looking forward to talking to ken griffin. in addition to managing $20 billion in his hedge funds and running a major marketing business, he has views about the banking industry, including a desire to see it broken up that he shared last fall. >> glass steagall actually makes a tremendous amount of sense. it's not appropriate for the securities trading operations in our country to enjoy the taxpayer support implicit in fdic insurance companies. so the first thing i do is pull the securities businesses out of the banking system. i would, in a sense, debank goldman sachs and morgan stanley. >> that notion becomes particularly interesting in an environment like this one where a bank like the embattled credit suisse is looking at selling off a substantial piece of its banking business. and citi just reported another

down turn on monday are seeing flagging revenue amid higher capital requirements. citi, by the way, has been a major holding of citadel for some time. they're always in the market for compelling longer term investments. >> we don't try to profit from calling the direction of the markets. we try to profit from picking individual companies that are going to outperform expectations of success. so we're really in the single stock story. which companies are going to have winning products, winning value propositions, but are going to create wealth of their shareholders that the rest of the market is not anticipating. >> we'll hope to hear more about how they're doing. that and this environment on wednesday. back to you. >> catch the coverage all day wednesday on cnbc as well as deliveringalpha.com. margo draghi says the strength of the euro is a risk

to the risk and the ecb stands ready to act if disinflation exists. justin joins me now. >> we think about naeshs that they announced in june are probably enough. it's very possible, of course, that they develop this idea of buying abs and sme loans. but in terms of broad based qe and the government bond markets, no. >> i'm going to interrupt very quickly. did you watch the football? >> i did. >> what did you think of germany's performance? >> i thought it was superb, argentina, as well. >> we're just looking at pictures now for the german team arriving in berlin. you can see them all coming down the steps there to meet the awaiting crowd. no sign of angela merkel right now. did you see the picture of

angela merkel surrounded by her football team? she looked like a little girl there i think with her national team surrounding her. celebrations in berlin. we'll continue to show you those pictures as they come through. they're going to move around and end up at the brandonberg gate, i believe. we'll continue to show you the shots. qe is not coming, the tlros that have been announced are going to provide saurt. are they going to provide enough support? >> i think the real question is whether the takeup will do very well on the supply side, if it's

a supply credit problem, as a result of banking leveraging, the banks simply can't increase their balance sheets any more. remember, these are 100% with greater loans. then it doesn't really help. >> bearing in mind what is coming as far as liquidity and what's being paid back, the tension that we saw last week surrounding one bank in portugal and the confusion and concern that was caused in the markets right now, the prospect of no qe as far as you're concerned, how do you play these markets right now? >> well, i don't see much of a read from the tensions in portugal to the broader peripheral markets. we did get a move in those markets last week. i think that was more the result of a lack of liquidity, both structural and seasonal reasons. remember, we're getting into the

summer period now. >> does that indicate some level of skill about the health of the eurozone banking sector? you say no? >> no, i don't think so. this does seem to be an isolated case. if there are more isolated cases, then fine. but does this become a problem for the european bond markets? the position is quite spread. so they could move the markets very, very easily. i have no idea how many sellers there were, but -- >> we're going to revisit that at some point in the future. talk me through what you're thinking now as far as the uk is concerned. >> we think the five-year sector has not reacted to the prospect of the cycle. there's a possibility the two-year yields might rise, as

well. actually, ten years could be relatively static going forward. remember that the mpc has suggested that terminal rates may be at 3% or so. so, therefore, plenty of gilt at 270 or 280. then when we move further up the curve, insurance companies, pension funds, buying that part of the curve in order to lock in posits we might have made in the markets. we would recommend being underweight that part of the structure. >> great to speak to you. thank you so much for coming on the show. >> thank you. now it seems country music giant garth brooks doesn't have enough friends in high places. he failed to reach an agreement on his irish tour and has canceled all five concerts scheduled for this month. that leaves more than 5,000 fans

disappointed and requiring refunds. brooks said previously he would play five or up in at all. do you think garth was right to pull the plug? if you want to join the conversation here on "worldwide exchange," get in touch with us via e-mail, worldwide@cnbc.com, @cnbcwex through twitter or direct to me, aj chatterley cnbc. how will inflation numbers speed into the mix? stay tuned. we'll see those in a few minutes time.

the battle will continue. palestinian remains defiant. israel says it will agree to the deal. investors turn their sights to janet yellen's testimony later today. another mega listing in the mobile messaging space.

lauren agrees to an ipo. and technology starts lower in europe as software ag warns on sales. the stock sharply lower in frankfurt following news that major present delays will see it miss forecasts. >> expectations to see a rise of 1.6% in the month of june. and it's actually coming at 1.9% year on year. 0.2% right now in the month it was forecast at 0.1% for the month. significantly stronger than expected right now. it's actually on a year on year basis, the highest rates that we've seen since january of this year. the all goodness number at 1.5%

year on year. what we have as well is the rpix number coming in year on year, forecast at 2.5. so the retail price index higher than expected right now. number of figures, we've got june house price data out this morning, too, up 0.8% month on month. 10.5% year on year right now. also house prices right now, significantly higher, too. the number set coming through there also, a significant beat it seems on european and ukken flagz. now we're seeing sterling up around, what, 0.3% on the trading session today. 1.7130 trading back above that 1.71 they got off the back of those numbers. joining us now is james knightly, economist at ing. significantly stronger reaction than you were anticipating at 1.7%. that's right. i would think the general

expectation was that the price would have more of a dampening impact. we saw it in the airline fares has probably corrected high gasoline prices, as well. so in general, a little disappointing. i think with the stronger economy we're seeing in general, we should be looking for inflation gradually creeping higher here, as well. >> i think we're going to be looking at some flat lining to a gradual move higher. certainly the producer price inflation numbers, inflation pressures in the pipeline listed the wage numbers that we're seeing as very, very low. that's normally the big driver service sector inflation. we're not expecting a huge pick up, but more a gradual response to an erosion slack in the uk economy. >> we've also seen a soft.ing of

some of the survey data, we've seen a soft.ing, too, of the housing data, at least a stabilization. do you think that's feeding through from the comments carney made regarding future rate rises? carney saying 60% of the households expect to rise in rates this career. >> we have seen quite a big stretch, signaling that the first rate rise might not happen until 2016. that has obviously attracted a lot of headlines in the press and households respond to that. there is more nervousness about and perhaps more caution and that may be leading to some of that we're seeing right now. >> carney has testified later today about this financial stability report. do you expect him to stick to the line or do you think you could perhaps talk about further macro prudential tools he could use here in the housing market? >> i think whereby now they're insisting mortgage lenders can

afford a 3% mortgage rate hike and that the bamgs should be lenning 4.5% times salary hikes. i think this will take some time to feed through. >> if we do see wage growth staying at about 11%, do you think that leads carney to stay on hold for the rest of 2014? >> i think the wage numbers have a lot of volatility due to tax changes and bonus structures that have led to news in volatility. we're approaching for the 2% in wage growth. i think with the slack in the market being eroded, we should be looking at that.

that may be the catalyst for the bank of england to snam higher rates. >> what about the minutes for next week? are you expecting to see the first dissent? >> i'm not sure it will happen next week. i think it's more likely to happen next week. >> james knightly, that you can for joining us. now, we have had some comments from jean-claude juncker, the commission chief. he's saying as the new commission president he wants to mobilize 300 billion euros for public investment projects. he's starting to lay out the policy now. he's saying future bailout toes eu countries must take into account the social impact.

different tone from when he was present during the crisis, too. stay tuned because in a few minutes' time, bank of england mark carney will be testifying on his financial stability report. we were talking about whether or not he adds different layers to the tools on the macroeconomic report. does he try and improve? let's have a look at the european markets this morning. we're seeing the ftse 1000.11% higher. busy morning for that, too. concerns over the situation with ukraine, filtering into some of those confidence numbers in germany, too.

french markets earn pressure, 0.2%. bond markets this morning, take a quick look at those. italian yields, very little change. similar story for the portuguese markets after the pullback we've seen for the last two sessions in particular. the dollar seeing a bit of a turn yesterday on the back of strong citi results and the market rallied we saw. euro/dollar, 1.3605. we have sterling seeing a bit of a lift off those significantly stronger inflation data in june. we're going to take a quick break. still to come on the phone, the smartphonemaker dubs china's

apple into the new arena, but can i take on the heavyweights and ee memorying markets? details, after the break. we needed 30 new hires for our call center. i'm spending too much time hiring and not enough time in my kitchen. [ female announcer ] need to hire fast? go to ziprecruiter.com and post your job to over 30 of the web's leading job boards with a single click; then simply select the best candidates from one easy to review list. you put up one post and the next day you have all these candidates. makes my job a lot easier. [ female announcer ] over 100,000 businesses have already used zip recruiter and now you can use zip recruiter for free at a special site for tv viewers; go to ziprecruiter.com/offer2.

welcome back to "worldwide exchange." you're looking at live pictures of germany. the football team is landing. thousands of fans awaiting their winning football team players. mylan is set to buy some of abbott laboratories generic drug business outside the united states. >> this deal is valued at about $ $5.3 billion. but what everyone is talking about is how that deal was structured to help mylan by moving its tax implications outside. >> this deal made sense to us. top line, bottom line, cash

flow, financial flexibility, letting us tee up for some transactions that we think make a lot of sense. it puts infrastructure in place so future deals can be synergist synergistic. i don't know that it would have still looked the same, but it would have absolutely made sense. >> so the ceo telling cnbc that yes, there is a tax advantage here, but a very strong strategic rationale, as well, for the deal. back to you. today is the deadline for companies and the public to weigh in on the fcc's controversial net knew translate rules. so far, the fcc has received more than 600,000 comments. google, amazon and netflix are opposed to this pay for priority idea. and scores of companies say the proposal will hamper their growth. microsoft is reportedly planning its biggest round of

job cuts in five years with the announcement coming as soon as this week. the company is in the process of integrating nokia's hand set unit. microsoft now has 125,000 workers. analyst rick sherman speculated the company could cut 5% to 10% of staff which could be between 6200 and 12,000 people. microsoft's german trading session lower by 0.4%. now, we had a decision from the bank of japan earlier today and it's steady as she goes for the world's largest economy. the bank of japan decided to maintain its current stimulus program that has slightly cut its forecast for the current fiscal year. the bank believes inflation will approach a 3% target next year.

the bank of japan thinks the pain of the sales hike will continue going forward. beijing steps up efforts to pump more money into its banking system and pressed banks to loan more. that figure, nearly 20% more than the market was anticipating. but investors remain cautious about the world's second largest economy. direct investment did rise in june, but barely. up just 0.2% from a year earlier. let's give you a look at what's on the agenda in asia tomorrow. lots of data out of china. we'll get q2 gdp figures, retail sales and fixed asset investment data. over in australia, keep an eye out for rio tinto's outlook in the second quarter and this should help reflect on the health of the economy. and it's off, the last cabinet reshuffle, prime

minister david cameron will make before the general election is under way and it's causing a bit of a stir. william hague has stepped down from the foreign secretary. he's going to be replaced by defense secretary phillip hammond. he's seen as a proud technocrat and has everyone talking is hammond's position on the eu. he's on record saying he would vote to leave the union unless substantial powers are returned to the uk. a major challenge to the foreign office orthodoxy. elsewhere, nicki morgan has been appointed education secretary. and michael gove is the newhouse of commons chief whip. country music giant garth brooks doesn't have enough friends in high places. at least in ireland, he failed to reach agreement on his irish tour and has canceled all five concerts scheduled for this month. that leaves more than 4,000 fans

disappointed. dublin city council granted a license for three of the five performances. garth said previously he would play five or none at all. do you think garth was right to pull the plug on all five? join the conversation with us here on cnbc. worldwide@cnbc.com, @cnbcwex or @jchatterlycnbc. now, the annual delivering alpha conference will be on wednesday. kate kelly has a preview. >> we're just a day away from our annual hedge fund conference and there should be plenty to talk about. the prospect of higher rates, the trouble making money with global macro betts and where to make money in the markets. carl icahn, everybody's favorite

activist who hopefully will shed light on his latest plans for family dollar and new jersey governor chris christie who speaks to us after a tumultuous deal in politics in which he was accused of settling scores by closing lanes on the washington bridge. i'm looking forward to talking to ceo ken griffin. in addition to managing $20 billion in his hedge funds and running a major market business, griffin has strongly held views about the banking industry, including a entire to see it broken up that he shared last fall. >> glass steagall makes a tremendous amount of sense. it's not appropriate for the securities trading operations in our country to enjoy the taxpayer support implicit in fdic insured companies. so the first thing i do is i pull the securities businesses out of the banking system. i would, in a sense, debank

goldman sachs and morgan stanley. >> that notion becomes particularly interesting in an environment like this one where the embattled credit suisse is considering spinning off a substantial piece of its fixed income business. and banks across the board, including citi, which just reported another down turn are seeing higher revenue amid capital requirements. citadel trades in and out of positions frequently, they're always in the market for compelling, longer term investments. >> we don't try to profit from calling the direct of the stock market. we try to profit from picking individual companies that are going to outperformance expectations of success. so we're really in the single stock stories. which companies are going to create welling for their shareholders that the rest of the market is not anticipating.

>> we'll hope to here more about how they're doing on wednesday. back to you. jpmorgan reports secretary quarter results at 7:00 a.m. eastern. in may, jpmorgan warned fixed income and equity trading revenue could drop as much as 20%. last month, ceo focused on rates, too. goldman sachs reports results at 7:30 a.m. eastern, forecast to earn 2.05 a share on revenue of just under $8 billion. quick look at jpmorgan and goldman sachs trading in the german markets, jpmorgan higher by 2%. goldman sachs higher by 0.9%.

particularly i thought we saw from citi better than we were anticipating in that part of the business, too. it will be interesting to see what we get from both of these later on today. but a bit of a spillover from the rally we saw in u.s. financials yesterday. now, the journey of a piece of steel, that's what cme is calling its launch next week as it attempts to crack the premium smartphone market. the company that is often called the apple of china, today made its debut in apac. india. customers will be able to get their hands on clemi3 starting today. joining us now, founder of radio mobile. richard, thanks for joining us. first, i just want to talk about them specifically. we're talking about a brand that sold 26 million hand sets in the first half of this year. it's putting them on the par with the likes of lg and lenovo right now.

>> for the chinese market, certainly. and not -- there's no reason why i think they're particularly interesting is not just because they sold a lot of units. it's because if we look at what people do with their devices, content consumption, media consumption, people are using their devices to the same degree that people use the iphone in china. and that really means that in terms of cracking the chinese market, xiaomi is moving in the right direction. >> and it's content driven, they understand the need for an ecosystem in the same way that apple does? >> yeah, exactly. if you look at the android devices in general, an android has something like 70% market share of the total smartphone market. if you take out samsung, everybody else is sort of struggling along with commodity like margins. it's long by my view that in

addition to get around that problem and add value back to the user, you need to do more content services, e-mail, chat, all that kind of stuff. and that, if you look at where xiaomi is going and where apple went in 2007, xiaomi is going the same direction in china. so in the chinese part of the market, if they can create user traction, they should be able to make some money. i expect at the moment they're losing quite a lot. >> that's a great point. are they capable of diversifying into other digital segments and taking on the likes of a tencent or alibaba in the market, too? >> that's the real trick, isn't it? they've got the content, they've got the media. that's the easier part of the ecosyst ecosystem. >> when they want to broaden out a much deeper sxwerns to the

user, they're going to have to take on alibaba, tencent. now, when you look at the chinese market, i figure it's probably big enough for three large ecosystems to exist on their own. the company has momentum, opportunity, but now it's going to have to step up to compete with the really big guys if it wants to be a sustainable force in the chinese smartphone market long-term. >> and you just said it. because we started this by talking about india. my fear here is they're so geared towards the chinese consumer, how does that translate when the china push into the indian market right now? have they got the capacity and even the financing, given what you said about the fact they're not even making money now to achieve this? >> that is a great question, isn't it? firstly, no real value in the chinese market, nice looking feel, nice interface.

that is probably not aflickble in the indian market. and a number of indian vendors out there, which probably means this is going to be a loss leader for them. if you look at it from a global point of view, hand sets is very much a scale game and the more units you can set up a single model, the better it is. possibly they're looking at other regions to support the possibility and to push higher in the kind he's market. >> thank you for that. more comments out from jean-claude juncker, he said the eu should consider financial incentives and a budget for the eurozone right now.

who could argue giving flexibility is allowing financial sentiments for economic reforms. he's saying both sides do not show more transparency. i think that's pretty much a given. he's also saying the eu needs a minimum wage. be careful, jean-claude juncker sounding like a federalist there. now, in sports news, nomura raised its shares on manchester united to $16. the club signed a $7 million deal for adidas. it's worth almost as much as the $800,000 the group paid for the club back in 2005. we've been showing you live pictures from berlin as fans

await the arrival of the national football team. we're waiting for them to arrive on top of an open top bus. they will be making their way through the clouds and making their way to the brandenburg gate. we'll bring you those pictures throughout the show. for now, we're going to take a quick break. i'm giving you a look at how the futures are trading ahead on wall street. come back to us for the second hour of "worldwide exchange." chocolate is very individual.

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welcome to "worldwide exchange." i'm julia chatterley. hamas continues to remain defiant as they reject an egyptian negotiated cease-fire. this as israel says it will agree to the deal. ja p morgan and goldman sachs report earnings before the opening bell. the ax may be about to fall at microsoft. the software giant is getting set to announce major job cuts.

and mario draghi will continue to keep policy lose and ensure additional measures are ready ifnied as investors turn their sights to janet yellen's testimony later today. so we've been talking all morning about the prospect of the zew economic sentiment index for july. the readings have come just through. we're staying at 27.1 in july versus 29.8 in june. the poll was 28, so significantly weaker than we were expecting. we have the current conditions index, 61.8. so significantly weaker, too, on the current conditions index. the economic expect ages right now, 27.1.

significantly weaker from the figures that we got back in june. also significantly weaker than the 28 forecast. so almost a point lower on the economic expectations there. we weren't speccing this to make good reading. we've seen the dax under pressure for the last month in particular and we heard from the economy minutester last week saying that the situation in q2 has been weaker than we expected. it's not the start of a broader trend of underperformance, but we acknowledge that we have seen the situation worse than expected for these q2 numbers. we've got euro/dollar right now easing, slightly down around 0.2% right now. but we have tilted below that 1.36 level now. so 1.3598 is the level there. now, bank of england governor mark carney is set to give strong inflation data released in the last half an hour may increase a concern that a larging right in interest

rates could come larger than expected, 1.9% versus a 1.6% expected that on the year on year numbers. mark carney will watch to see what he says and the expectation is he'll continue to reiterate the line that he took when he announced the macro measures. the question is does he announce further macro tools rather than rate rises? we could see sterling kolg come under a bit of pressures. when he announced the measures last meeting, sterling actually rallied. we'll continue to bring any comments from that as carney makes them. goldman sachs is highlighting a sharp fall in european earnings growth. it's fallen sharply while sales growth has dipped to multi year lows. pete oppenheimer from goldman sachs joins us now. good morning. >> good morning to you. as we were just saying there, company generating earnings

growth of more than 10% has fallen. given that back drop, there's no surprise you see a bidding growth like tech right now. >> i think that's exactly right. growth has become quite scarce. it's become squares economically because the economy post recession has been relatively weak compared to history. even if you compare it to the history of other financial crisis sessions. and, of course, within the corporate sector, as well, you've seen less cap ex growth in recent years. there are fewer companies generating high sales and those that are doing it are becoming more valuable as a result. >> looking at both the equity and credit markets right now, are investors having to shift down the quality serve to some extent to get the same returns we're looking at. you illustrate this really well in the credit markets by looking at how a credit investor had to invest in more bbb bonds to get the same level of 4% return. we've got the charts. can we pull that chart up if you

can do it? no. next one. pull up the different one. it's the zigzag looking chart. okay.. we don't seem to have it. >> wum of the charts you did show there is the proportion of companies in the equity market is at a record high. the second point is that if you have a fixed income portfolio, you need to -- the proportion of that portfolio would need to be putting in bbb higher risk credit in order to generate, for example, a 4% return has reached a record high. clearly, because yields have fallen so much, the search for yields means that people are having to take high risks. and that's one of the reasons, again, why is growth very scare? income is very growth. >> so where should investors be focusing based on what you said

there, where should we look at the combination of growth and income? >> i think the biggest probably still when you look across the investment landscape is that in a yield hungry world, and in a world where you basically got a zero rate, equities are still offering quite a high dividend yield and many of them are backed by high cash flow cover, relatively low payout ratios and quite low risks. so we think there's still a real attraction, particularly in europe why that cad ray of companies that offer a combination of strong balance sheets, high cash flow cover, a reasonable yield and an ability to grow dividends over time. >> could you talk about a value that we're looking at a situation where bond yields were rising any time soon, but we've got a very different picture in europe relative to some decisions you would make in the u.s. where specifically? i know you make a point that you should look at a basket of stocks. but when i look at the multiple

fee companies, it's like 8.7 times. i'm concerned that that still looks expensive. why isn't it? >> let's be clear here. there are two sort of strategies we're looking at. one of them is pure growth. and if you take a group of companies that are generating higher sales growth and energy growth averaging around 15% to 20% and there's quite a few of them, the median multiple for that basket that we've looked at is around 19 times. historically, that kind of growth has been bid to higher levels. remember, we've got lower insurance rates today, so arguably, long duration assets like that could go to higher valuations. but at the other end of the extreme, if you look at companies that are high yielding, that are generating dividend growth, these stocks are not trading at high multiples, typically on average around similar multiples to market, 13 or 14 times. and we think it's quite

attractive in the context of what sleep to be an environment of very low inflation and very low interest rates, particularly in europe for a long time to come. >> and the message here is that there are pockets of value, even when you don't necessarily think you're seeing value? >> yeah. >> peter, we'll come back to this. but for now, we're going to skip on briefly. we've had breaking news in the last few minutes. the hamas leaders say the grooul group is still debating an egyptian proposed gaza truce. we had comments on earlier today from some portion of hamas saying this is a situation we're not going to accept and a truce wouldn't be worth the paper it was written on. now we're seeing a bit more of a moderate tone. for now, this comes after israel says its security cabinet has backed israel's proposal. u.s. president barack obama has come out in support of ewe gipt's proposal. >> i believe further escalation

benefits no one, least of all the israeli and the palestinian people. so we're going to continue doing everything we can to facilitate a return to the 2012 cease-fire. we are encouraged that egypt has made a proposal to accomplish this goal which we hope can we store the calm that we've been seeking. >> jpmorgan reports second quarter results at 7:00 a.m. eastern. profits forecast to drop 14% to $1.29 a share with revenues of $23.7 billion. in may, jpmorgan warned fixed income and equity trading revenue could drop as much as 20%. last month's cfo hinted at pay and job cuts in investment banking. also in focus will be jamie dimon's ceo's health who is being treated for throat cancer. goldman sachs reports results forecast to earn $3.05 a share on revenues just shy of $8 billion. investors are watching revenue from the fixed income currency

and commodities division as well as various regulatory issues surrounding the bank. jpmorgan and goldman sachs trading higher in the german session. jpmorgan adding 2% and goldman sachs adding just shy of 11%. you have to imagine the beat from city's numbers when you strip out the department of justice settlement. also better gains or better performance as far as the fixed income currency and commodities division was concerned. we have anticipated 20% or 25% and just down 15% on the quarter. we'll be talking about that in around 20 minutes time. for now, mow ham he had el-erian resigned as pimco's ceo months ago. but strains around the term's management still remain. senior pimco executives warned gross to stop making public comments in the media they viewed as divisive.

a key reason for the comments is a loss of clients. now, as we know, it was joy for germany in the soccer world cup, but how did goldman sachs do in their forecast? the bank tweeted it next time they may have to leave it to the octop octopus. we'll discuss that right after the break.

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welcome to "worldwide exchange." these are your headlines. hamas says an egyptian truce option is still under discussion. trading revenues in focus as jpmorgan and goldman sachs report before the u.s. open. and the fed's janet yellen gets set for two days of congressional testimony. let's give you a look at how the futures are trading ahead of the u.s. market, tilting slightly to the down side, the s&p losing just over 1 point, the dow jones loaf by 5 points and the nasdaq relatively unchange lower by 0.8 points. we did see a new 14-year high

for the nasdaq, 4440. yesterday citi beat helping the footballs, jpmorgan and goldman sachs set to release their numbers before the bell. we've got yellen and retail sales, so a whole host of things for investors to watch right now. the european markets, under a bit of pressure. we have the ftse 1 00 losing 0.11%. the german markets lower by just shy of 0.5%. the sentiment survey, economic conditions and the outlook weaker than expected. not necessarily a surprise, though, given some of the data that we've been seeing feeding through for the q2 numbers in particular. the cac 40 lower by 0.5% and the italian markets lower by around 1.4%. let's have a look at how the foreign exchanges markets are trading right now. we have seen a slight tick higher in inflation, 1.9% year on year versus 1.6% expected right now.

euro/dollar under a little bit of pressure now as a result of that zew survey and concerns about the outlook right now for the eurozone and the power engine as it is well known over in germany right now. mario draghi yesterday commenting that the strength of the euro could be a burden for the recovery right now. the currency not budging on those comments. seemingly having a bit more of an impact right now. let's give you a look at what's on today's agenda in the united states. june retail sales out at 8:20 a.m. eastern. forecast to rise 0.6%. at 8:30 within we get june import prices, expected to rise 0.4%. at 10:00 a.m., it's the may dividend inventories. in addition to jpmorgan and goldman sachs who have earnings today, from intel, j&j, csx and yahoo!. janet yellen heads to capitol hill to give part one of her speech on economic policy.

yell sn expected to stick close to the fed's last policy statements and the future path of interest rates depends on how the economy performance. we're data dependent. yes, we know. yellen has repeatedly refused to specify when the fed is likely to start hiking rates. goldman sachs rates for the forecast for the s&p 500, the bank says the trajectory will see rates rise until january '15. the target for the s&p 500 this year no change to 2015 and no change to 2016. >> yes, that's right. so my colleague in the u.s. has raised their target to 2150 for the end of this year from 1900. interest rates are lower and we're pretty convinced that the cyclical recovery is coming through and that's all good. on the other hand, the longer term targets are fairley moderate because we see profit growth being quite slow from

this level. its margin is likely to have peaked out right now. and valuations being about long on averages. so we don't see valuation as being a big driver to the s&p over the next several months. and we don't see strong profit growth from here. but the back drop economically is still supported. that's why we see moderate rises. >> so the course of always making hay before the sun shines as far as interest rates are concerned will start to contrast, the message that you're putting in your notes as far as europe is concerned right now. >> yeah. clearly in the interest rate prognosis, we've brought forward the time when we expect the fed to start bringing .rates. we had expected u.s. rates to rise at the beginning of 2016, now late 2015, but in europe, not for a very long time. >> also, making a recommendation that investors buy the weak

balance sheet firms versus strong balance sheet periods in the s&p 500. and closing growth versus value in the russell 1k, too. can you walk me through the logic on the two trades that they're pushing right now. >> well, i think the back drop in terms of refinancing for companies is extremely good. in fact, we have a similar view here in europe, as well, that companies with higher financial leverage had have a relative boost to refinance assets at lower rates. that's something that can be quite supportive for those companies for a period of time the. >> so that supports the weak balance sheets versus the stronger. but kind of counter intuitive. again, a strak contrast to the european message. you're looking at live pictures of berlin as fans await

the arrival of the german national football team. they've just landed in germany. we've shown you pictures of them leaving the plane around 20 minutes ago. they're making their way to an open top bus and winding their way to berlin ending their tour at the bran did he nberg gates. eager anticipation from what looks to be thousands of fans in the center of berlin waiting to welcome home their world cup heros. peter, i'm afraid we wouldn't be doing our job as financial journalists if we didn't hold you to account of your calls on the world cup. to go back to the semifinal, three out of four is not bad. >> well, we thought that was okay. i think brazil was a bit of a shock. we did expect brazil to win, and i think most people did. they had the home advantage which typically historically has been meaningful when you look at the statistics. but i think that was the real shock in the whole tournament and what really, i think, pushes up forecasts.

we didn't get it right, no. >> you said you're going to leave it now to the octopus in future world cups. >> he can do a better job. >> really? are we going to have this conversation in four years? >> looking at the statistics, an interesting thing to do is model what the outcome will be. football is a very unpredictable game. typically the scores are very low. it's difficult to get the data on. and, of course, you can't predict things like injuries, key players being sent off or being off because of injury and that can have a big impact in the outcome, as well. >> do you think the german response to this could be quite positive for the germans, for business sentiment, economic sentiment right now? we have seen it to some degree in tailing off. >> sure. the momentum as you pointed out in the second quarter has slowed down. historically, there is a strong correlation between the very short run performance in the stock market as a winner. >> exactly. the argument for brazil

translated now to germany. >> so it's quite shortly in a few weeks or so that the winning team sees a reasonable degree of performance relative to the global stock market. we saw that yesterday in germany. and typically, the runner up sees a period of underperformance. it's very short lived. we'll see if it happens. historically, there's been quite a strong relationship. >> and we look now, watch for outperformance from the german markets, at least for a few weeks. peter, great to have you on, peter oppenheimer. he's going to leave it to the octopus as far as football predicting is concerned. still to come, microsoft is reportedly planning its biggest round of job cuts in years. stay with us. for our call center.ew his 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;

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something more amazing. a safer, cleaner, brighter future. at boeing, that's what building something better is all about. ♪ welcome back to "worldwide exchange." a look at the u.s. futures as we head towards the equity open for the u.s. markets. right now, the s&p 500 losing a bit more ground in the last 30 minutes or so. 2.5 points lower. the dow jones 15 points lower and the nasdaq right now indicating 2 points lower. we did see gains 0.7% for the dow yesterday. a fresh intra day high, but not managing to hold that into the close. the s&p 500 gaining 0.5%, too.

we've got jpmorgan, goldman sachs following on from what we got from citi yesterday. significantly better performance seeing the fixed income and commodities currency division only seeing revenues down 15%, not the 20% to 25% that they were anticipating. it will be interesting to see how that translates to some of the financial earnings today. we've got yellen speaking to and retail sales to watch. lots for investors to keep on top of today. mean wile, we'll bring it back to europe. sterling trading higher here after uk inflation surged in june. that's a five-month high. the reading is above forecasts, which calls for a 11.6% rise. separate data showed the continued rise in house prices particularly in london. and in line with that, bank of england governor mark carney is due to give comments to the treasury select committee on the june stability report. strong inflation data will raise concerns to some degree about the prospect of a rate rises

than expected. we'll continue to bring you the comments from that right now, the commentary has been on financial stability on the banks. a potential leverage rash your you're seeing would have the most marked effect on building societies and investment banks here in the uk. he's saying, look, a leverage ratio right now shouldn't be a back stop. it's an integral part of the bank capital framework right now. he's saying he's not settled right new in the right trade activity. so really digging into the prospect of what to do right now as far as the numbers there are concerned. and he's saying, look, we're not at the stage yet where the monetary policy committee and the financial smt should mermg. we'll continue to bring you those comments as we get them. stateside, some of your top stories today, microsoft is reportedly planning its biggest round of job cuts in five years with the announcement coming as soon as this week. the company is in the process of integrating nokia's hand set unit and reports say that the cuts could come from nokia and

parts of microsoft that overlap, as well as marketing and engineering. microsoft now has 125,000 workers. nomura analyst speculating the company could cut between 5% and 10%, which would be between 6,200 and 12,000 people. microsoft trading in the german market session right now lowering by archound 0.4%. but in line with the german market. still to come on the show, our next guest says ipo growth is not in line with the broader u.s. economy. we'll find out how this could lead to job losses right after the break. stay with us.

welcome to "worldwide exchange." i'm julia chatterley. these are your headlines. hamas says they've not rejected an egyptian brokered cease-fire in gaza. but rocket fire continues to fire from the territory into israel. jpmorgan and goldman sachs report earnings before the opening bell and both banks face a steep decline in their opening revenue. the ax may be about to fall at microsoft. the software giant is getting set to announce major job cuts. mario graggy indicates that the ecb will continue to keep policy loose and additional measures if needed as investors

turn their sight toes janet yell.'stestimony later today. 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 look at futures as we head towards the market equity open in the u.s. the dow indicating open by around 10 points. we've got the s&p 500 indicating a couple of points lower here and the nasdaq, too, a couple of points lower right now. as we head towards the open of this session, we've lost a bit of ground in the last few minutes. we did see gains between 0.5% and 0.6% for the dow. we did see a fresh interday high for the dow, but not managing to hold back into the close right now. plenty of risk events today. we mentioned goldman sachs, 60 managing to lift the footballs with their results in yesterday's trading sessions. we saw the tech names, the

energy names out in yesterday's session. data funds, retail sales in particular. what are we seeing for the european markets this morning? the uk market higher. raising concerns about the prospect of sooner rather than later rate hikes right now. mark carney is currently speaking, the bank of england governor right now. we've had weaker business service sentiment data out of germany. not really a surprise on that front, but it was weaker even when analysts expecting right now, that market down 0.6%. similar story for the french and italian markets, under appreciate injury here, too. the question is how do you make money on these markets? >> this is the message, and it is on a long-term cousin.

no doubt about it. the united states is clearly the leader of the pack. we also have significantly higher volumes in places like canada, we have brazil, we have russia, possibly kazakhstan. a whole group of other countries. >> it is a great thing i think for investors. i think if we look at it on dividends, the litigation issues have scared us in the past and continue. bank of america coming up, we know there's more litigation going on there. if you look at a high risk bank and trading revenue, it's earnings. for us, we want to see low volume till. >> we could see asset prices rallying if people have a view of reforms and growth in the

underlying market. take the case study in mexico and see what happens in terms of rerating. if the confidence and investment starts coming back, that would be important. we were talking yesterday from the air show, we had an announcement from airbus this morning, we've won orders from mitsu air group. that breaks down specifically into phi a320s and 10 of the a320 -- i'm sorry, 110 a320 neos. in the last couple of hours, we've heard from lockheed martin. u.s. military officials have lifted the grounding order for the f-35. the ceo was saying to us yesterday she hoped to see the f-35 making it to the air show. we'll see to see whether after that grounding order has been

listed whether they can get there. now, in the last few minutes, the hamas leaders said the group is still debating an egypti egyptian proposed truce for gaza. this after israel has backed the cease-fire. cross border air strikes enable bombardments to continue. u.s. president barack obama has come out in support of egypt's proposal. >> i believe further escalation benefits no one, least of all the israeli and the palestinian people. so we're going to continue doing everything we can to facilitate a return to the 2012 cease-fire. we are encouraged that egypt has made a proposal to accomplish this goal, which we hope can restore the calm that we've been seeking. >> hadley gamble joins us now. hadley, you were saying earlier in the program that you didn't have a crystal ball. but this is effectively what you

were just discussing an hour ago on this show, in fact, and that we've got different factions in hamas and it's difficult to see who is saying what right now. are we talking about moving towards a cease-fire here or aren't we? >> i think certainly you're going to see the conversation ongoing. at this point, it's within israel's interest to broker a cease-fire now before they lose public opinion in the west. and as well as, you know, public opinion in their own country. you know, no one can deny the images that we're seeing and over 180 people dead. this isn't something that is going to, you know, disappear. and at the moment, he also have the israelis saying that they'red aing i think three new -- what is it, rocket intercepters to their program. they've said that the iron dome program is the reason they haven't had any casualties thus far from all the rockets they've seen from gaza. at this point, hamas has to -- it's a come to jesus moment for them. they need to decide whether this is something they're going to pursue and the consequences of

pursuing it or is this something that they can stomach coming to the table over. >> have they gained anything by the response they took here, israel? >> well, i think in the court of public opinion, it depends on which side you're on. for every mill at that point, you know, across the peck strum of militants that you destroyed, they always say you create more. and i think that depending on which side you're on, both sides always claim victory at the end of this. we saw hamas claiming victory the last time that this happened. so, in fact, it just really depends on which side you're taking. >> we'll have to wait and see if these two sides can come together. hadley, great to hear from you, and get your perspective on this. moving on, japanese messaging app line has reportedly filed for an ipo. it could be worth $10 billion. rival what'sapp was bought by

$19 billion by facebook. line has about 480 million. so not very different in items of users right now between these two. so far this year, there have been a few headline listings this year, including go pro, michaels and jd.com. while the u.s. is on track to see 280 companies go public this year. cohrnreznic says there is a gap in this. joining us now, national director at cohrnrznick, don, explain what you mean. >> good morning. we did a study that found that in 1994, through the year 2014, there were 5,000 ipos and based on a growth rate of the gdp, there should have been 15,000. if you apply that same gap over the next five years, the u.s.

will lose an opportunity to create 2 million jobs. >> why is this gap appearing? >> this gap is appearing because back in 1994, the united states, the scc and the stock exchanges decided that needed to have more confidence in the stock markets, so they implemented a number of changes which, for the most part, were very effective, but had a very negative effect on the middle market where my firm focuses and caused a great number of investment banks to drop out of taking small and mid sized companies public. for example, in 1994, there were over 150 investment banks taking companies public with ipos of $50 million or less. today, there are just 20 banks because there is no more profit in the smaller end of the

market. >> i guess the crucial question is how do we change this and are we seeing news? i know the s.e.c. recently announced a test program to raise the size for some of these smaller stocks. do you think this is going to make a difference? >> yes, we do. we applaud president obama and congress for announcing the jobs act a couple of years ago, which we believe were the jennings of improving the ipo market which for 2014 is dramatically better than 2013. but we also believe we need to do more and we believe that president obama is focused on this by asking the fcc and finca to do a pilot program and that's a positive step. we would he curve the s.e.c. to expand that pilot program to about three years to get a better foundation. but we believe that's a very positive step. and a couple of other things are

required, such as getting guidance on crowd funding, so you can reduce capital over a portal. these are all positive steps and we're moving in the right direction. but in the meantime, we are losing opportunity to create a significant number of jobs. >> it's great to see the -- to report here and outline this and hopefully changes happening. don, great to talk with you. let's take a look. the big ipo agenda, janet yellen heads to capitol hill to give part one of her semi-annual policy. she goes before the senate banking committee at 10:00 a.m. eastern. yellen is expected to stick close to the fed's last policy statement. it's data dependent. yellen has repeatedly refused to specify when the fed is likely to start hiking rates. would you coming up, microsoft's ceo laid out his

vision for the software giant and that involves thousands of job cuts. we discuss, after the break.

welcome back to "worldwide exchange." trading revenues in focus as

jpmorgan and goldman sachs report before the u.s. open. and the fed's janet yellen gets set for two days of congressional testimony. we were talking about before the break about fresh orders for airbus. bac aviation ordering 43 airbus a320 jets that includes the a320 neo. mitsui financial deal has bought additional a320s. microsoft could be set to bring down the ax. the company could soon announce its biggest round of job cuts since 2009. mary thompson is at cnbc hq with all the details. >> good morning, julia. microsoft could be planning its

heaviest job cuts since steve bomber laid off people during the economic downturn. reports say the most recent job cuts could come as soon as this week. more analysts recently speculated that microsoft could cut 5% to 10% of its workforce or between 6200 and 12,000 jobs. reports say the cuts would likely come from the nokia hand set business and parts of microsoft that overlap at that unit as well as in account inning and engineering. microsoft right now has about 125,000 employees, including 43,000 in washington state. back in april, the cfo said the company expects to cut more than $600 million in costs in its business by the end of 2015. and the seattle times says those expenses will be related mostly to salaries and benefits. now, last week, ceo sasha nadella laid out his vision in a memo to employees. he talked about a flatter,

leaner company saying nothing is off the table thinking about how we shift our culture to deliver on this core strategy. although there has been speculation microsoft may spin off xbox, nadella stressed its importance to the company. he refused to discuss the possibility of layoffs. he said more will come when microsoft reports earnings on july 22nd. they will continue to delve into more initiatives. nadella says microsoft will continue to acquire more companies and hire more people. let's take a look and see how microsoft shares are trading in frankfurt this morning. the dow component fractionally lower off about 11 cents at 31 right now. that's the update on microsoft. we'll be watching it, of course, this week and next. julia, back to you. >> thanks, mary. have a great day. cnbc looks at institutional investors delivering the alpha conference on wednesday. some of the biggest names in the business and politics will be on

hand. kate kelly with a preview. >> we're just a day away from our annual hedge fund conference. there should be plenty to talk about. the end of quantitative easing, higher rates, and where to look for returns in the stock market. we'll have key note speeches by jack lew, continuing our tradition of always having the treasury secretary kick off the day's proceedings, carl icahn, who will hopefully shed light on his plans for family dollar and new jersey governor chris christie who speaks to us after a tumultuous year in politics in which he was accused of settling scores by closing lanes on the george washington bridge in new jersey. i'm looking forward to talk, citadel founder ken griffin. in addition to managing $20 billion in his hedge funds and running a major market business, griffin has strongly held views about the banking industry, including a desire to see it broken up, that he shares at the conference last if a

approximately. >> glass steagall actually makes a tremendous amount of sense. it's not appropriate for the securities trading operations in our country to enjoy the taxpayer support implicit in fdic insured companies. so the first thing i do is i put the securities businesses out of the banking system. i would, in a sense, debank goldman sachs and morgan stanley. >> that notion becomes particularly interested in an environment like this one where a bank like the embattled credit suisse is looking at its business. citi, by the way, has been a major holding of citadel's for some time. although citadel trades in and out of positions frequently, they're always in the market for compelling longer term investments. >> we don't try to profit from

calling the direction of the stock market. we try to profit from picking individual companies that are going to outperform expectations of success. so we're really in the single stock story. which companies are going to have winning products, winning value propositions, that are going to create wealth for their shareholders that the rest of the market is not anticipating. >> we'll hope to hear more about how they're doing. that in this environment on wednesday. back to you.

welcome back to "worldwide exchange." you're looking at live pictures of berlin, the german national football team set to make their way through berlin today on an open top bus to be congratulated by their fans. you can see thousands of poem there.

oh, and there's a picture of the buses. you can see in the distance, they're going to ultimately end their tour at the brandenburg gates. the shot is not very good. two big players in the financial sector reporting results today. jpmorgan reports secretary quarter results at 7:00 a.m. eastern. profits are forecast to drop 14% to $1.29 a share with revenues of $23.7 billion. also in focus, ceo jamie dimon's health who is being treated for throat cancer. goldman sachs reporting results at 7:30 a.m. eastern results expected just under $8 billion. joining us on the phone from portland, managing director at rbc capital markets, good morning. what are your forecast gerard for q2 in light ooh what we got

from citi and the beat there? >> our earnings estimates are about in line with consensus, but you put your thumb on what happened yesterday with citigroup. we're focused on the capital equal markets n numbers. if their trading revenues, particularly in fixed income trading are better than expected, we expect the stock to rally today. >> the stock right now, earnings of 9 1/2. the down side feels pretty limited. if we see a significant beat, we could see the stock rally. is that what you're arguing here, too? >> yes, i would agree with you. the equity trade rg going to be key numbers. the citigroup numbers were very strong. but that was not a surprise. >> also got goldman sachs right now. your forecast stops the consensus here. why? >> we think it's going to be an interesting quarter for them. that's why we are a little bit different than consensus here. and it's really going to come down to for them, as well, can

they come through in the trading area better than expected and if so, that's going to, obviously, help their stocks, as well. what about the litigation risk here? the forex, the libor scandal, too, what do you expect these banks to be saying about these? >> i think on the calls, you're really not going to hear much about either of those investigations that are under way. certainly those are headline risks for all the players that are in the foreign exchange and libor area who have not settled in a libor case. but the foreign exchange investigation is still under way and that is a headline risk for all the major players in the future. >> great to get your thoughts here. gerard cassidy, managing director and banking analyst at rbc capital markets. that's it for today's show. i'm julia chatterley. thanks for watching "worldwide exchange." "squawk box" is coming up in a few moments' time. in the meantime, have a great day. [ male announcer ] we know they're out there.

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good morning and welcome to "squawk box." citigroup yesterday got things rolling in the dow. what is wall street expecting from jpmorgan and goldman sachs? janet yellen gets ready to testify on capitol hill and the markets will be hanging on many of those words. probably not the supposition, maybe. and israel accepts a cease-fire plan brokered by egypt, but hamas is rejecting the plan. it's tuesday, july 15th, 2014, and "squawk box" begins right

now. good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. we start this morning with the markets and the likely drivers of today's trading session. the big three, earnings, economic data and janet yellen on capitol hill. among the corporate names set to post quarterly results before the bell, we have goldman sachs, jpmorgan and johnson & johnson. this afternoon, we'll hear from intel and yahoo!. on the economic report, three reports of note. we have retail sales, import/export prices and the july empire state survey. at 10:00, we have business inventories. fed chair janet yellen will begin two days of testimony. what has long considered and can be called the humphrey hawkins semi address on the senate side

will beg