welcome"worldwide exchange" was. i'm julia chatterley. these are your headlines. u.s. and eu launch new sanctions against russia. russian president putin denounces u.s. foreign policy as aggressive and unprofessional. the country says it will not tolerate blackmail. itv shares jumped as a stake is bought in the firm, balking

hopes of a takeover. plus, the firm rejects an $80 billion bid from fox saying it's too low. hopes are high on possibilities of a better offer. we'll be asking, will it come? >> announcer: you're watching "worldwide exchange," bringing you business new from around the globe. welcome to "worldwide exchange." vladimir putin has denounced the latest round of sanctions saying the relations in moscow to a, quote, dead end. washington has announced sanctions against a number of companies related to the kremlin. president obama says he gave his russian counterpart lots of warning. >> along with our allies, with whom i've been coordinated

closely for the last several days and weeks, i've repeatedly made et clear that russia must halt the flow across the border to ukraine, that they must support hostages and a cease-fire, that russia needs to pursue mediated talks. i've made this clear directly to mr. putin. >> the u.s. added russian companies to its sanctions list but say it's helping to destabilize the eukraine. russia says it's disappointed the eu succumbed to, quote, u.s. blackmail. the country's says it sees a new round of sanctions because of events the ukraine is unfolding according to their plans. the ministry added that it will

not tolerate u.s. sanction blackmail and reserve tess right to take retaliatory measures. let's take a look at the markets on this. lower by 2.2%. right now, i've got a number of the latest russian firms trading. gazprom trading around the session today. seeing a bit of gains for the dollar ruble rate there, too. .2625. we have seen the russian currency itself gaining over the last few months or so. you can see the peak we got mid march pulling back slightly. we have that year-to-date, too, or to gains in the last couple of months. right now, i think only down around 0.4% despite the losses we saw around the march/april time. joining us is bill blain strategist at partners. we'll get to you, bill.

what are these latest round of sanctions going to do? >> i think it's going to be very interesting. we've seen the russian market down slightly this morning because markets have heard this before. and i think the second thing is we're seeing this wedge that russia is trying to drive between europe and washington. and i think that is having some effect because if we think back three months ago, we were all saying, oh, this is going to be a real problem for the russian economy, they're being -- at every angle. but, in fact, putin has done fairley well. he's managed to keep the position. we now need to look at this new brics bank that was launched earlier this week. that is going to change the dynamic. the biggest ever trade of oil that has been done between russia and china. we know europe is fractured and

will not support these sanctions if they see the opportunity to profit from them. and it's really leaving obama out on something of a limb. and i think over the next couple of days, that's the view the market segment takes on this. there's so much in there. i guess the first point i'll come was your last point, the russia-china gas deal. that's on the table, but that's going tie a number of years -- >> that's many years down the line. >> so let's talk today. you just said it's not having that much of an impact. the other problem is, as far as the eu sanctions are concerned, we have a lack of agreement over what pressure to take. i think it's interesting to see the foreign ministry saying the eu is disregarding its own interests. really? really? >> this is classic russian diplomacy. >> aren't eu -- >> what we've seen is european leaders trying to act tough, but

then having private one off meetings. within the last few months, how many times has merkel met putin? i think it's three times. i'm not sure. maybe one of the watchers can inform us how many times it is. but there have been discussions with other leaders, as well. yet there are sanctions in place, yes, europe is joining in. remember, it was european desire to bring ukraine into the european fold that triggered this whole thing. but they're slightly less solid than they would have been or the americans would have hoped they would have been at this specific stage. >> we're going to come back to the russian angle and the specific impact. but let's see, annette, the russian foreign ministry this morning saying the eu leaders are disregarding their own best interests here. really?

>> yeah. it always is up to the person to decide what is in the interests of one's self, i would say. yesterday, came to a very late conclusion that they don't have a conclusion on top jobs, but they do have a conclusion on expanded scope of sanctions on russia. so essentially as we were hearing now from the studio discussion, when it comes to the hardness of the sanctions, now they came up with like a compromise, i would say. but take a listen. i spoke to a couple of leaders yesterday when they came here to that meeting. and some of them were quite

unspoken that they think we need to have level three sanctions on russia. >> the messages are not clear, russia goes ahead and gets in the case in europe and in european boarders. so here i am support fully the british position on the question against russia. in i'm sure we'll find a good balance package. we need to look at the big picture. we need to look at the conditions outlined by the european council a few weeks back have not been met. and this means further measures will be taken, further restrictive measures. i do not think we'll be moving to phase three in the sanctions, but some further restrictive measures will be taken. >> i think there are differences throughout the capital in europe. that would like to see more sanctions in the step two. we will add to the list of

people listed. the swedish government thinks we should move to level three sanctions because the conditions we put up a couple weeks ago have not been satisfied. we understand the use of sanctions and the threat of sanctions is a way of actually pushing back on the way that russia is dealing with their interests in ukraine. without the kind of political pressure, we think that the problems will even increase. >> so there's general understanding i'm getting here on the ground is brussels can't really back down on potential sanction and also expanding the scope of sanctions. they already went halfway. now to potentially level three sanctions on the country. if russia does move in the east of the ukraine, they probably will head into that direction,

even if some of them don't really want that. bottom line is, we will probably get sanctions on high profile individuals, we get sanctions here on the european leaders and only to be announced at the end of this month. also, they will block direct aid coming from the european union at some point at 50 million euros and also they are blocking project funding from the european investment bank and also from the european bank of reconstruction and development. so it's a comprehensive package. how hurtful that is for vladimir putin. julia. >> thanks, annette. we heard the swedish prime minister there looking at the possibilities of sanctions. vladimir putin hasn't complied.

this is what we're trying to achieve. >> the bottom line for russia is they're trying to get away as much as they historically can. that goal would be russian diplomatic foreign policy is trying to drive measures into weakened fractures alliances. that's been the history since 1945. the three they come up with, very sensible and very -- putin is looking for comments from merkel. she's the one that he needs the influence with. she is the one looking to set the agenda. what russia is hoping for is compromise.. that's why the markets are not going to be looking at they sanctions as destructively as perhaps back in march. >> but concessions with kiev and

kiev and poroshenko are offering concessions. >> and he'll continue to push more. if he gets compromise, he'll push for greater comp moiz for his goals. the markets have seen a very strong reaction in march. they've seen the russian economy being hammered by the expectations that russia would suffer more because of sanctions and because of being squeezed out of gas deals. what they've been able to do is push them into a better position than anyone expected and i think the markets are going to look at the compromise last night that although the ukraine prices will continue to bustle on, you will see russia continuing to make gains because the eks of sanctions is going to be limited by compromise. >> and also the popularity gaining the back of this. >> that was going to be an issue in doubt, unfortunately.

>> fair point. so you're saying we have had some comments in the ecb this morning regarding the asset quality review and the future stress tests. they're saying that, yes, the ecb will give the findings to banks in september and october. we knew that. the banks will be informed of the asset review results only shortly before they're published. at that point, they will be given two weeks to present their plan to deal with any capital shortfalls right now. the general expectations the banks will make up the baseline shortfalls with equity capital. and they're saying they will publish leverage ratios as part of the unprecedented disclosier. the latest on the quality review from the ecb. we're seeing european markets take back some of the gains from yesterday's session. a quarter of a point lower on

the ftse 100. the xetra dax lower by 0.2%. similar story for the french markets. the psi taking back some of the gains we saw in yesterday's trading session. you have to expect a bit of consolidation. trading a little softer for the dollar. euro/dollar trading around the 1.3530 level, right now 1.3525 in fact was the lowest level that we've seen since february the 4th right now. no extended auction from janet yellen yesterday in particular. we also saw a bit of softness in aussie qe as a result of that slight move higher in the dollar in yesterday's trading session. sri has an update from singapore.

hi there, julia. the markets did start the day off in fairley good form after that record close we saw on the dow. but one by one, most of them have succumbed to selling pressure. let me start with the shanghai composite. down now by 0.6%. that is indication of some of the losses that we have incurred. not not a collapse by any stretch of the markets, but they have come off what we saw earlier. we saw some selling in those sectors that brought down the broader market. in fact, around 5560 is australia's benchmark. they had a good day today.

case in point, up by almost 5% at one point. and rio up by 2%. one of the big laggards today was the jakarta composite. it was ranked underperform, as you can see, up by more than 1.3%. remember, we are getting closer to that final decision by the election commission next week. next tuesday, july the 22nd. so this body will defy who the next president of indonesia will be. it comes down to either the answer, the special forces general or the jakarta governor. the market is banking on a win. but do expect, julia, some

volatility in this market. back to you now. >> we will deliver all the news from delivering alpha. back in two. 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.

the israeli military said civilian casualties were unintended and tragic and the cause of the strike were hamas militants. the israeli militant said it would respond firmly and decisively if militants launched attacks against israel at that time. hadley, one hour into a cease-fire, what does this cease-fire achieve? >> they're supposed to be getting humanitarian aid into the gaza strip. they're supposed to be helping people on the grounds there. casualties are a big problem. people are out of their homes now. they're really seeking assistance. but what this also does is give israelis a reprieve, really, from the court of international opinion, which is getting

decidedly negative in terms of bombardment. on the face of it, a military offensive on the ground is looking increasingly likely. both sides are looking for a win here and they want to win with their base. with the israelis, that means they have to go and say we've tape out the terrorists. unfortunately, that will mean boots on the ground, unfortunately. and also that means it's going to get messy because that means casualties on both sides. for hamas, as we've repeatedly said, they say our backs are against the wall. what is a win for them, really, other than more death? so a pretty bad situation on both sides. >> so you're saying a prelude to greater escalation, including troops on the ground? >> unfortunately there doesn't seem to be any progress in cairo. hamas is there and a couple of hamas officials. looking at what a cease-fire would look like a permanent slugdz to this current crisis. but at the moment, we're not hearing any murmurs of any progress at all. >> if you listen to both sides,

we spoke to the senior adviser to prime minister netanyahu last week and he said the only way this ends is with hamas stop bombing. without them stopping the bombing here, it looks like this situation continues. at what point is it time for the international community, the u.n., somebody to step in and say how do we resolve this? >> that just goes back to the bigger picture in terms of the u.s. at what point do they step in anywhere in the middle east? they refuse to do it in syria. i think that the west is really trying to stay out of it. they're trying to ex either a prerl yush. obviously, the u.s. is backing an egyptian cease-fire agreement. at this point, if they were to do that, that would require a major confluence of events. anyone has to come to the table on that. that's a big movement. that's a whole other ball game. so they're a little overtaxed at

the moment, especially in the united states. >> they've opened a can of worms because ultimately there isn't a solution here. >> well, we hope there is a solution, inevitably. but that is the bigger question. >> absolutely, hadley. great to have you on, hadley gamble. fed chair janet yellen turned heads on capitol hill after delivering a surprise warning that certain equity valuation might be overvalued. at cnbc's delivering alpha conference in new york, she considered asking whether it's appropriate to comment on markets. >> i think it is appropriate for us to comment on policy. it is not appropriate for us to comment on individual market movement. >> so you don't think necessarily that the social media stocks are overvalue or do you think that's none of your business? >> i think a lot of people in this room ought to be making sensible judgments about proper valuation.

>> so correct with your response to that? >> absolutely. i mean, i don't think there's a problem with janet yellen and the rest of them saying, hang on, market, have you overdone some of these asset prices? because i think it is clear that there are bubbles, and not just in the ones that janet yellen referred. i would look at the whole high yield bond market and say, okay, when we see rates turn, as they will, how many of these companies are going to pay you back and more importantly, how much are they going to pay you back? and i think the market has forgotten that a high used market is basically about how much you get back when the thing goes badly wrong. and you could say the same thing for many sectors. >> and look at how the markets shed during this time in terms of liquidity and volumes that we're seeing. is the escape hatch there? >> this is potentially the worst

summer liquidity i've seen in the 2 1/2 million years i've been working in markets. >> is that all? >> maybe longer. i might be underestimating it. liquidity is particularly bad this year. we've had the thing about banks making markets across all sectors because of regulations. there is another discussion to have. but this particularly, we've got so many markets where investors clearly think we are very close to the top. if we look at the stock markets, yes, we're still hitting new highs, but we're seeing enormous amounts of underlying selling pressure. now, as brokers, we get to see that from our clients and it does look to us like the pressure in stock markets and in corporate debt markets where we've seen the fed getting incredibly tight means many people do think we're at the top. unless of course you face the liquidity trap. when the markets do turn, as

they will at some stage, how do you get out? if we are seeing global growth, then what's wrong with the stock market? but if we see rates come out, do you want to be stuck in bond markets when there is no bid for paper and people think that spread ves to go wider as well as the underlying bonds go up. this is why liquidity is so poor this year. >> take a look at the vix volatility index and the core option we think. i think friday is the fourth highest on record in terms of positioning. this gives you a sense of the amount of concern out there. if you come back to the beginning of this conversation, we are asking questions about valuation. we are showing some level of concern. look at small gaps yesterday from the gains that we're continue to go make are small moves as far as the large caps are concerned. what's the bottom line, though? should we be selling? how should we be playing this? >> i think we have some decisions for everybody to make themselves. i could point to loads of areas

that i think are far too tight. banks is a favorite of mine, my career, a large part of it was spent in the financial institutions. so i've always been fascinated by banks and i do reckon a lot of them are still very, very overvalued and especially in europe, essentially unresolved five years after the european crisis began. and i'm trying to work out why you would want to buy them at this stage in the cycle. however, there's loads of other assets. we could call an expert, small cap, midcap, biotech, whatever it was janet yellen was moaning about most recently and give you a reason as to why they're so tight. but you know what? somebody else will give us a reason why that's a good reason still to keep buying the markets. let's look at one of the areas that we're most concerned about europe. we're seeing european sovereign bond spreads despite the

problems we've had in portugal recently. still very termly supported. why is that? because they're still buying the draghi effect on the market, the european bond yields and the periphery are not going to call. we're seeing draghi bump money into that. that means people, even though they know that european economies are going to strugglel to repay that debt, they will keep buying and continue to see the spreads tighten. people will make money out of it. >> you hop on board because it's expensive not to. >> well, if you don't play it, you're going to miss an enormous amount of gain. >> how do you protect yourself? >> by being very cautious and very careful and trying every step to protect your position. >> diversify? >> diversification is one thing, but then when the crash comes, how wide does it go? and will the crash actually

come? you get people like me sitting in they says going, the end is neigh and it might go terribly wrong. i was here a year ago saying that and it didn't go wrong yet. >> phil, thank you. still to come on the show, german chancellor angela merkel turns 60 dwreers old today. after nine years at the top, could she be thinking about whining down? stay tuned as we head to berlin for the latest on that.

the u.s. and eu new sanctions on russia. russia president putin denounces sanctions as unprofessional. it was warned of retaliation. confirm in the media landsca landscape, itv jumps on a liberty deal, stopping hopes of a full takeover.

fiat so far is remaining tight lip, but shares jumped. european markets this morning taking back some of the gains we saw in yesterday's trading session, 0.3% lower in the german and the french markets. wee got bond markets similar to what we've seen in the slight pullback. we've got the ten-year treasury trading at just around the 2.52% level. a touch tighter on the portuguese spread. and a touch softer versus the

euro/dollar. that's the lowest level that we've seen since february 4th. right now, sterling 1.7114. still holding above that 71 handle. now, we've had some comments from russia this morning on -- from prime minister medvedev. i'm trying to find those for you now. actually, we're not saying those now. the prime minister saying he's never brought any country to his knees as far as sanctions are concerned. now to big corporate movers, paid 481 million pounds for a 4% stake in the british broadcaster. analysts tell us this could be the first step in a full takeover of it. reports are that volkswagen could be considering the firm.

the german manager magazine reported the story citing unnamed forces. it seems they want to shift their focus to the ferrari brand and shift the traditional car business. the are far from reaching appear agreement on a possible price. in earnings news, slightly short of expectations. the firm did confirm full year guidance saying revenue for full year guidance would offset its popular blood pressure medicine. the firm says it's seen strong demand for its flavors and fragrances. sap has missed forecasts in its second quarter.

it wasn't all bad news. they did raise their forecast for cloud computing revenues. consumer sentiment improved in southern europe, raising hopes its everyday low price policy is working. stephane is in paris. stephane, is it working for carrefour? >> indeed, thanks to emerging countries and southern europe which is recovering gradually. almost a 5% opening growth, which is much higher than the 3.7% the company reported in the first quarter. things were bostoned by a strong performance in the emerging countries, especially in brazil and argentina. the revenue from latin america

grew by 20% in the fourth quarter. they're concerned the gradual recovery one in spain, the company posted a growth in the second quarter. france, it's a bit of a mixed picture. but it's much weaker than the growth carrefour errored in the third quarter and weaker than what was reported last year which means that the recovery in the french markets is fading. carrefour is facing tough competition from its main rival which decided to lower prices in the market share. the company also confirmed its

guide yaps for a full year operating profits for 28 billion euros, meaning approximately a 6% from last year, so all good. >> stephane, thanks for that. let's have a look at the earnings from overnight. ebay's second quarter profits raised 5%. it was boosted by paypal offsetting the impact of increased competition. that incident compromised data from 150 million customers. yumm brands says it's pleased with taco bell's new breakfast menu. yumm is trading lower by just over 2.5% in the german market

session. i just mentioned some comments from the prime minister medvedev in russia. he did say sanctions have never brought any country to its knees. he calls the measures evil. he says those sanctions will fuel anti-u.s. sentiment and sees a return to the 1980s relationship with the u.s. this is following the message that we've had from russian sources overnight. saying they're only hurting their own interests. prime minister medicine vevedev this only hurts those. we have to wait to know out just what the details are of that. angela merkel has backed sanctions against russia saying russia has not done enough to

prevent ongoing violence in the ukraine. we're now joined by the senior vice president of senior intelligence. carson, we did hear from the german finance minister saying we won't put business interests ahead of the rule of law. do you believe that's what's happening, at least on germany's part here? >> yeah, well, i mean, i think what we have to do in the case of germany is really to take into account that obviously economic factors matter. examine i think from the german perspective, we also have to take into account strategic interests in central and eastern europe. russia is a extra teamingic partner is much closer to germany, to europe, than it is for example to the u.s. and that explains why germany is interested in keeping talking channels open. so german exports to russia certainly matter. obviously, germany is dependent

on import and exports. what we shouldn't leave out of the conversation is keeping talking channels open to moscow. >> do you think it makes sense from germany's perspective in particular to allow the u.s. to push for further sanctions while the eu takes a step back? >> well, you know, i think what is important is to achieve a overall impression. i think for everybody involved, for washington as well as brusseles and berlin, it is important to keep in mind that a divided west would probably be the biggest win for putin. >> it has dented sentiment as far as the german economy is concerned. how concerned do you think angela merkel is right now about what we've seen as far as q2 is concerned on the weakness in the data of q3? >> well, i think, you know, wove

seen over the last couple of years the upswings and down turns. overall, the german economy has been pretty stable. and i think the political consensus carrying this here in the grand coalition, relatively centrist policies, overall focused on germany's competitiveness in global export markets, also very important in the consensus of the social part of organized workers and employers. all that i think gives germany a pretty strong base to react if reactions and reforms, further reforms were required. but i think overall, although germ fee will always have to watch the world economy, given its export dependance, i think overall she can be fairley relaxed about the state of the german economy. >> well, the leaders meeting in brussels overnight didn't agree on any of the top jobs we're going to meet again to do that. do you think there's enough concern from germany and angela merkel about what feeds to be

conceded with david cameron and going forward? >> well, keeping the uk on board is obviously a prime interest from the german side. at the same time, what we have to take into account is the fact that the germans need to see a minimum willingness from the british side to engage in european policy. if this is not the case, that makes things difficult. germany will always be very interesting in taking britain's interesting into account. >> there is speculation that angela merkel may leave before her term ends. it's not a new topic. what's your justification for that? and i guess the second question would be what does a post merkel germany look like? >> a post merkel germany wouldn't in the end look that

different from the germany we have now. in the end, i think what is much more important than individual politicians is the institutional structures behind german politics which is geared towards a sense of pragmatism, grand coalition politics and so on.. regarding merkel's own future plans, i would just say that she hasn't been a chancellor over the last couple of years who has been very active in lining out grand visions. she's been a very reactive politician. taking that into account, i would be very surprised if she had a very clear plan what she wants to do beyond that time. >> carston, thank you for your input. 26% of people want to see merkel in power for another decade. 26%. we'll see. we have to take a quick break. still to come on the show, for more on the economic punishment being dished out to russia, stay with us as we head out to

brussels where european leaders have been discussing the issue. 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.

vladimir put dwrip has denounced all sanctions against russia. president obama says he gave his russian counterparts lots of warning. >> among our allies, i've repeatedly made et clear that russia must halt the flow of weapons and fighters across the border into ukraine. that russia must urge separatists to release their hostages and support a cease-fire, that russia needs to pursue internationally mediated talks and agree to meaningful monitors on the border. i've made this clear directly to mr. putin. >> the eu has added russian companies to its sanction lists that it says are helping to destabilize ukraine. responding this morning, russia's foreign ministry says it's disappointed that the eu

has disregarded its own interests and has succumbed to, quote, u.s. plaque mail. annette, we've had two gusts this morning saying don't discount what angela merkel is doing wind the scenes here. do you think she is the key to peace in the ukraine? >> angela merkel is no longer on the 100% diplomacy page as she was at the beginning of the crisis. it's quite interesting to see the foreign minister of germany is banking a lot more on diplomacy than angela merkel. angela merkel here behind the scenes is one of the advocates of tougher sanctions against russia. because, of course, germany has a lot to lose. but schroybler was saying two or three weeks ago that the rule of law should not be bent, too, because of business interests. and that is the official stance

of the german government. it still needs at the end of the month to come up with companies and individuals who were the target for sanctions from the european union. there will be a blocking of aid and of project funding. we didn't manage to decide on a foreign policy chief. >> yeah. that's a key thing yesterday. and at least that was tongue going into that summit. issues should be -- not elected, but should be named after that

summit. the italian candidate is seen to be quite pro kremlin, quite russia. that does not go down with some european states. we quickly caught up with the president of ligthuania yesterday. find out what she has to say about the likely candidates. >> i would support reflecting all opinions on foreign policy of the member states. and i would not support a person who is pro kremlin. thank you. so, you see, it's a very difficult task to get those top jobs announced because it's like a three dimensional -- you have to take the gender into into account, bureaucracy and which party they are coming from.

the socialists are in the government in 21 out of 28 countries. now with juncker coming from the conservative side, the socialists, both top jobs, which, of course, angela merkel doesn't want. so we are back here probably at the end of august when they have the next summit on the top jobs. back to you. >> angela merkel gets what angela merkel wants. the question, will it be you or i waiting forelady decisions to be made? we'll see. now back to russia. fresh international sanctions has been strong. the country's foreign minister says a new round of sanctions as the u.s. plan toes take revenge. the ministry added it will not tolerate u.s. blackmail and reserves a right to take retaliatory measures.

the micex is down 2.6%, the dollar/ruble trading higher, but just to give you a bit of perspective on this, we'll have a look at the dollar/prubl performance. back in the middle of march time, april, that is the story now to change year-to-date, just down 4.5% on that market, too, because of the gains we saw in the may/june period, too. so let's introduce our guest. chris, i'll begin with you. we were just saying to annette there, don't discount angela merkel's influence on what she's doing wind the scenes here. what are your thoughts on her ability to maneuver towards peace? >> i think her role is absolutely critical. you happen, with what the eu has

done, which is delaying the announcement of any further sanctions until the end of the month. essentially they're saying we happen of a two-week window. i think what everybody will hope is that the ukraine will raise a victory flag in the last building, the separatists. but in the meantime, it's about intense negotiations between russia and our guest germany. but the eu prevents a move. the next couple of weeks, russia's response, what can happen in terms of growth rates in germany, absolutely critical. >> does it make a difference? >> i agree. angela merkel is in the driving seat. she's on the phone with putin. she has president hollande of france accompany her on these calls. but she's obviously in the driving seat. and what are they discussing? there are official releases coming out of each of these calls, but it always comes down

to the same thing. it's an attempt to try and get both sides talking. this is why we're not seeing a cease-fire. just draw your attention to one detail. russia, for capital reasons and also i think because the broader strategy has offered to have osce monitories on the russian side of the russia/ukraine border in order to verify that there are no or no further flows of weapons and troops coming across the border. i offer that in june when the ukraine and president abandon the temporary troops and they've offered it again this week. i noticed the communique out of the european council did mention that and that the eu would support the osce in this. this is the kind of thing leveraging what chris was saying, we'll see intense talks about him in the next few weeks.

>> call me a concept iblg, but arms and troops can still go across the border when observers are there shortly. it's about timing and positi positioning. >> absolutely. the border points are being monitored and fighting is continuing. and militia experts say that russian military equipment is visible in that sighting. was it already there? has it come across the border, anyway? but the bottom line is that the -- if the western powers insist on the defeat of this insurgency or rebellion in eastern ukraine before any talks, again, that's the -- for market sentiment and that's what investors should be looking at. >> chris, at what point does russia view on that basis that they've got enough as far as concessions are concerned and then they can come to the negotiating table? >> difficult to say.

i hope that we get to that point in the next couple of weeks. but i think that, you know, the important thing is that there is progress on the ground in east ukraine and russia can perhaps see an end to it. essentially, i guess, what they're looking for is long-term some sort of buffer in east ukraine which would prevent ukraine from moving into nato or the eu in any fast way and would allow that for russia long-term. >> chris, thanks for that. it's great to have you both on. still to come on the show, are the bulls overrunning the bears? base odd the credit we're seeing in markets could last until early 2020. we'll discuss in two.

welcome to "worldwide exchange." i'm julia chatterley. these are your headlines. the u.s. and eu agree to impose fresh sanctions on russia, sending the company's markets lower. russia president putin denounces u.s. foreign policy as aggressive and unprofessional. the country's foreign ministry says it will not tolerate plaque mail and warns of retaliation. reports suggest volkswagen could be considering a bit for some parts of fiat's business. its shares jumped.

plus, time warner investors want more money from murdoch. the firm rejects an $80 billion bid from 20th century fox as too low. the stock closer much higher on hopes of a better offer. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. >> if you're just tuning in, thanks for joining us on the show. let's have a look at how the european markets are trading in this session today. the ftse 100 down by around 0.4%. we've got a similar story for the italian market underperforming. we're seeing the futures taking the message from what we're getting from the european markets right now. you can see it's a red picture behind pe. four straight sessions of gains yesterday for the dow. we saw the equity gaining 0.4%. what we did see was interesting there, the russell 2k losing

ground on yesterday's session, too. asking these questions about small caps versus midcap, a lot of day-to-day jobless claims, housing starts to look forward to. we've got bullard speaking, too, so a number of things for investors to look forward to as well as earnings for the likes of google and ibm, too. back to the performance for the futures right now, we've got a situation with russia. fresh sanctions from the u.s. and eu. you have to wait for a bit of time to get into the details of what the eu is providing right now. comments from russia saying they don't like the message that the u.s. is sending right now. it's going to send the relationship back to the 1980s. you can see the impact right now just shy of 3% right now. a bit of weakness for the ruble, too. gazprom and sberbank under pressure, too. so the overall micex is only down around 4.5% year-to-date.

that's the wrap from europe. sri, what's the latest from asia? >> the uncertainty you're talking about with reference to the tail risks from russia and ukraine, it seems to be creeping into sentiment over here. we started the day off in fairley sound form after the record high that we saw on wall street and the dow overnight. but one by one, a lot of these markets seem to have succumbed to some weak ps. not exceptionally sharp selling pressure, but selling pressure nonetheless. the shanghai composite off by 0.6% at the close. the s&p/asx 200, off the session highs. that 5,560 level being a

six-year high. so if it wasn't for the miners, they would be adding on to the gains that they saw yesterday, rio tinto, case in point, i think the index would have been negative, as well. one of the underperformers today, julia, is the jakarta composite. it was down by as much as 1.3%. still deeply negative. it cut the losses, though. july 22nd is going to be a very important day for the politics of this country because that is when the election commission will declare who the new president is. do expect to see some volatility in this market in the interim period. that is where we stand at the moment. no doubt, the asian markets will be watching what happens in russia and ukraine closely as they will the broader tail risks on the geopolitical front. back to you now. >> thanks, sri, the delivering alpha conference brought some of the top minds on wall street among those weighing in on wednesday.

cooperman had the $11 billion hedge fund advisers. he says right now the stock market appears to be fairley valued. >> i want to say this, i see not a lot of large cap meaningful companies that are selling at euphoric prices, you know? so we've passed pessimism. we've passed skepticism. i think we're in the stage of optimism. i don't think we're in euphoria. >> cooperman gave a dozen stock recommendations, including citigroup and kkr. he breaks down investments into four categories. growth at a reasonable price, income and growth, asset restructure playes and high risk/high return stocks. joining us from boston is brian reynolds from rosenblatt securities. great to have you on the show. you point out the number of vix

calls outstanding last week rose to their fourth highest level on record, a sign the bears were looking for a pullback or pick up in short-term volatility here. >> exact thely. the xunt is trying to throw a hail mary. once we got past june 30th, typically the window for redepositions, we saw the short covering stock and we saw thing like junk yields reverse declines and rise. they are also buying a lot of derivative positions, especially on things like the vix, in anticipation of this credit boom ending. >> what's the likelihood that even if we see a pop higher in credit spreads that the bears -- investors use this as an opportunity to get back long credit and push those tighter again? >> exactly. throughout the bear community, throughout this bull market, the

bears think this is going to be a yield disaster. every time yields go up, and they've been going up in the junk bond market, it attracts more buyers. so we're seeing that this month and we're seeing not only this money go for buybacks and for mergers, but now it's allowing companies to start to extend their maturities for the second time in this cycle, which means this cycle may end up being longer because of all the pessimism that's out there. >> so you're weighing the odds potentially of the credit boom lasting until the 2020s. is that right? >> exactly. three years ago, calpine, a trend setter in credit for two decades, we wrote since they're a trend setter in credit, other companies would follow along and they did. last week, credit investors allowed them to do the same thing again. they stuck bond maturities out

until 2022. that means they don't have to worry about market turbulence until that period. we've seen more companies come in and extend their maturities, capsel out the long-term temperature maturities. >> can you talk to me about the impact that's going to have and tie it back to equity markets for me and the implicit bid for equity toes underlining this point. >> that has a two-fold impact. beginning in may, pensions began to fire their most bearish hedge fund managers. that meant short covering in both stocks and credit throughout june. and the pensions are taking the proceeds and giving them to bullish credit hedge fund managers. so this credit boom is and will

likely continue to intensify. and that means these bullish credit managers buy tons of corporate bonds from companies and that's been going for three things. it's been going for buybacks, mergers, you and now it's beginning to extend their debt maturities. buybacks, we've seen them start to increase at a faster pace in the last couple of weeks. mergers are finally starting to pick up after five years. so i foresee this credit boom and the financial engineering it gives to equities intensifying over the coming six to 12 months. >> so the bottom line here, brian, pulling all those together, is now the time to be buying equities and buying credit? >> well, i don't think credit is a great value, but i know more pensions are going to put more money into credit. so i think that's what they're doing. the average investor should not follow along with them. but what that means is that over time we're going to have higher equity prices. and whether or not people want to buy stocks or not, they're

going to go up because of financial engineering. i don't see great amounts of money flooding into the stock market for investors. most investors don't like stocks at all. in the last few days, you've had a string of guests on your network saying they can't believe the fed is keeping interest rates so long. almost none of them have been talking about the preparations which have been the main driver for our financial markets for almost two decades now. the pensions are getting more aggressive in credit and when they do that that's usually a good thing over time for equity prices. >> just because doesn't isn't expensive doesn't mean it can't get more expensive. brian, great to talk to you. some big corporate movers in europe, shares in itv trading higher after liberty group paid 4.8 million pounds for a stake in the british broadcaster. and fiat shares triading higher

after reports advocates waggan is interesting in buying. however, the magazine said the two are far from reaching an agreement on a possible price. when contacted by cnbc, volkswagen had no comment to make. a u.s. senate panel will delve deeper into gm's ignition switch problem today. lawmakers may focus more attention on gm's general counsel. gm's investigation show even as lawyers considered settlement wes b they didn't alert higher ups to the potential safety issue. general motors trading in the general market session lower by around 1.3% this year, down 8.3% on the year.

the move was -- since 1998. fox has indicated if the sale went through, it would sell time warper cnn, a direct competitor to cnn news. the ebitda valued the company at $5.6 billion. is it selling cnn or does rupert murdoch have too many fingers in too many media pie pies? get in touch with the situation a worldwide@cnbc.com white sox @cnbcwex or direct to me @jchatterlycnbc. one viewer says it's too much media murdoch already. we're back in two. stay with us. i make a lot of purchases for my business. and i get a lot in return with ink plus from chase. like 50,000 bonus points

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welcome back to "worldwide exchange." these are your headlines. u.s. and eu sanctions push russian stocks lower. russian president putin calls u.s. foreign policy aggressive and mary barra faces more senate questions on gm's safety failings.

let's take a look at today's other top stories. u.s. foreclosure activity jumps in june to its lowest level in 2006 before the housing bubble burst. foreclosures fell 2% in may, 16% from a year ago and should continue to drop through the first half of next year. fewer foreclosures have reduced the supply of homes on the market, pushing prices up. that combined with higher mortgage rates to slow the housing market recovery. ge is reportedly seeking a buyer for its appliance units, including the ceo jeff immelt's strategy to focus on the company's appliance business. less than 6% of its revenues. analysts have suggested several possible futures, including china's haer and electrolux. ge is slightly lower around

0.2%. the annual delivering alpha conference delivered plenty of insights and a few surprises. carl icahn and bill ackman reunited on stage 18 months after that all-out argument right here on cnbc. they hugged and gave them united t-shirts to mark the occasion. the men say they respect each other's investment record. >> i would say we have a different approach, but i think what i respect about carl is he says what he thinks. to his point, there are a lot of people who are not prepared to stand their ground, speak their opinions, say some things that might be uncomfortable for other people to hear. it's most important. >> it's almost crazy, because that's -- you know, you're one of the few guys that really does speak out and say if you don't

like the guy -- and there aren't too many that will do that. i respect what he said here and there. what the hell am i fighting so much for? >> ackman and icahn agree saying too many companies are being run by morons who need oversight. meanwhile, speaking at the annual conference, druggenmiller says what's wrong with behavior today? he says increasing their dead loads to stock buy backs while investing in their own business. >> ibm is the poster child. they literally face the threat not too dissimilar to what kodak and xerox in terms of a new technology is staring them right in the face. and instead of increasing investment to combat the threat, they've actually borrowed a lot of money to buy back stock.

>> still to come on the show, some numbers from yumm brands. we bring you the second quarter report after the break. for now, we leave you with a heat map to see how the european market session is performing. jçy

ride now, the s&p 500 indicating 6 points lower. the dow jones set to lose 33 points and the nasdaq is just shy of 10 points lower. we can see the fourth straight close of session for the dow yesterday. we saw the s&p gaping around 0.4%. on the small cap of the 2k lost 0.2% yesterday. let's take a look at some earnings news out after the bell yesterday. ebay's second quarter profit rose 5% beating forecasts, although revenue slightly missed. ebay -- by paypal off set by increased competition from

amazon and the cyber attack this spring. that incident compromised data from some 145 million customers. ebay trading in the german market session higher by 1.2%. yumm brands second quarter profit rose 19% as business in china continues to rebound from food safety scares. we've had earnings reports out of europe today, too. drugmaker novartis said revenue from new products will offset generic competition for its popular blood pressure medicine. that stock lower by 1.3% in the session. confirming full year goals after

first half profits rose by 13%, givaudan has sales are strong with fragrances. israel will observe a five-hour cease-fire after a shelling kills four boys on a gaza beach. the humanitarian truce is requested by the united nations and the israeli military said it would respond firmly and decisi decisively. we've got some breaking news. the press is reporting two rockets have been fired from gaza into israel. they're quoting the israeli police. hadley gamble joins us now. hadley, i believe that's news to you, too. so we've seen rocket fire now from gaza into israel. the cease-fire no longer holding. >> and this is something that is not totally unexpected. the israelis said if the

cease-fire is brokingen, we'll deal with this decisively. the problem here, essentially, is that we've seen no progress coming out of cairo, coming out of these negotiations. mahmoud abbas is there. we've seen no progress. we're fought getting that definitive narrative from hamas regarding what they want to put a stop to the violence. they're not able to control the militants, as well, within their own party. so it's a big problem. now this is escalating. this basically is going to mean that the israelis will most likely launch a ground offensive and that gets very, very messy. >> as you rightly pointed out there, hamas rpt saying what they want. they just said at the beginning of this process that their backs against the wall. fear fighting to the end because they have nothing to lose here. >> at this point, for the israelis specifically, they really wanted to go ahead and have a cease-fire. in the court of public opinion, all of these pictures that we're seeing, these four boys that

were killed on the beach, none of this looks good. unfortunately, if they put in this ground offensive, if we see this on the ground, which is looking increasingly likely, it will get messy. this means more casualties on both sides. in terms of hamas, there's no upside to continuing with this, except if they're trying to play to their base, the base of the gaza area and the larger palestinian cause in the region. they're playing to that base by saying we're not going to stop. but other than that, in terms of civilian casualties, they're taking a major, major hit. >> is there any pressure at that point that would bring hamas to the table? you say they're playing effectively to an audience here. any pressure at that point that would make hamas think, we have to do something different? >> certainly the pressure from the west hasn't been effective in any way. obviously to this point, the united states saying they need to come to the negotiation. i think that pressure would have to come from the middle east,

from the region, and this would have to be pressure from the gulf states and from egypt, as well, and qatar, obviously, is the odd man out in terms of support for gaza via the muslim brotherhood in egypt. they could play some kind of decisive role, where the gulf countries like the saudis could -- on their behalf. i think the pressures will come more from the region than from the west. >> hadley, thank you. still to come on the show, brace yourself. another bid could be coming while murdoch's first move for time warner has been rejected, he's not known for backing down. all the details after the break.

welcome to "worldwide exchange." i'm julia chatterley. the u.s. and eu extend sanctions on russia. among a number of key firms targeted are gazprom. president putin says it will not tolerate blackmail and has warned of retaliation. reports suggest volkswagen could be considering a bid for some parts of fiat's business.

fiat is remaining tight lipped, but shares jumped. time warner investors want more money from murdoch. the firm saw a unsolicited bid from fox as being too low. the stocks move ever higher on hopes of a better offer. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. if you're just tuning in, thanks for joining us here on the show. a look at how the futures are faring ahead of the u.s. market. yesterday we saw the dow gaining around 0.4%. yesterday, a similar story. right now, seeing a bit of take back in some of those gains in yesterday's trading session, in line with what we're seeing right now in the european markets. we've got plenty for investors to focus on. jobless claims, housing starts, in addition to earnings from the likes of google. right now we've got the ftse 100 lower by 0.4%.

the german market, 0.3%. similar stories we push out for these major markets. right now, the psi over in portugal following suit down by around 1%. we've had headlines from russia. additional sanctions from the u.s. right now. also europe overnight deciding that they would push forward with fresh sanctions. comments from russia this morning saying that they don't appreciate the moves that they've seen, that they could be retaliation as far as the u.s. is concerned and that europe is hurting its own interests. that's something else for investors to digest, also. how do you make money in these markets? listen in to what investors have been saying to us. >> out of russia unless you trade it very, very carefully. i would say you don't invest in russia, you borrow in russia. you have to look at -- the signs, everything is too driven by politics. it's a very dangerous game..

>> i think there's diversity in the space right now. uber or something like that when there's huge high differences. i think certain policies were i think a lot of attention, a lot of market valuations. but others could be overhyped in terms of their price. simply due to the fact that the feature of profits does not realize. >> everybody talks about big inflationary problems. this is a country that 15, 20 years ago was -- inflation. so by the standards of the past decade, 6.5% inflation is, you know, not great and it's at the high end of the range it's supposed to be targeting. but coming from where this comes from, brazil was the only thing that would be targeted was to change the currency.

>> cnn could be worth $5 billion. that's according to one analyst estimates. others say cnn is worth about 11 times ebitda based on valuations. fox has indicated it would tell time warner and cnn, a direct competitor to fox news. time warner jumped 17% in wednesday's trading session, its best day since december 1998. the potential of a fox/time warner merger was on the minds of many of the people at the delivering alpha conference on wednesday. here is what some on of them had to say. >> you've gone an evenly priced, evenly matched acquiring target, limited flexibility, how how the acquirer can go and a very recallsant board in time warper that they don't appear to want

to sell and a difficulty in fox in ultimately making a hostile offer for time warner shareholders. >> i think one of the dynamics time warner faces is there's no controlling shareholder. unless they have a great option for their shareholders, this deal looks like the highest way to a secure value for the shareholders. >> is rub either murdoch as a visionary, he operates at a vision, he has a view, the price is not going to stop him. he wants to own this. >> joining us now, analyst at peel hunt, alex, thanks for being on the show. >> generally, what rupert wants, rupert gets. >> fox trading right now, offered in the case of time

warper right now, those are the nonvoting share elements that murdoch keeps his hands on power. how do they resolve these differences? >> ultimately, there is no controlling shareholder. it is a question of security, the best price. i would expect them to change the mix of cash and shares in favor of more cash for a higher bid to come in andholders to de the two companies start engaging. the hostile bid recommended i'd be pretty surprised if this doesn't consummate over the next few weeks. >> and the nonvoting stock element, do they get around that? >> there's generally ways to get around that. i think there's reference to conditionality in future deals. i wouldn't think that is a deal blocker. >> look at the dow jones deal. look at the myspace deal. are they going to pay too much for this? >> it's a moot point. i think they have to make a judgment point. if you're relatively bullish,

you could say it's opportunistic. we've got five more years of high growth macro recovery, in which case buying an asset like this could be very sensible. but it could be balanced. yes, he did overpay arguably for my space a number of years ago. so the track record has been clueless. >> from ubs, they produced a great chart showing how great murdoch seems to be at picking tops in markets, as well. >> that could be the case. >> not necessarily just about an individual stock, but about the market itself. but it is about a battle for supremacy as far as the distribution is concerned right now, battling the likes of comcast and the likes of google in particular, too. we're seeing this spillover effects, aren't we? >> that's right. the big news in the uk market this morning is the 6.5% stake taken. by liberty global. taking stake from them which in due course would well be a marker for an outrate takeover bid. so yes, the spill over effect is

evidence. i would expect more of the same and m&a will be a dominant team in the sector going forward. >> when do we see the likes of google making a rel ofly takeover move? >> i think very soon. we would expect some of these very well capitalized internet companies to look to beef up on the content side. >> if you look at some of their competitors, too, what about a potential bid from the likes of apple or amazon for time warner here? they've got more money than fox. >> it's the lure of the jungle, gets bigger, more capitulated. murdoch, better than anybody, knows that. he's the guy that let's go back in time, pours more into tv, film, production, so he's seen it before. and i think that informs his judgment today. >> let's throw another one in there. alibaba on the hunt for content.

>> yes. and western content that's supported globally. content is king. i would advise investors to look for content assets that may be underpriced but are not that well known. if you have content, generally that's a prehigh valuable company. >> it's a poor time for time warner to be agreeing to anything right now given the likes of comcast and at&t are tied up with their own merger right now. do you agree with that? >> not necessarily. i think it comes back to flushing out the valuable for shareholders. i think what they would consider the best value is cash rather than stock from 21st century fox. cash is king. its mix takes place in favor of cash and i would expect them to want to talk to fox in due course. >> it's a case of watch this space, top pickses right now in this sector given what you anticipate happening right now? i think it's a flaw in the itv share price, so i would speak of value in that up to 250 minimum.

bskyb, wpp, those are sort of the names we're talking to our investors about. >> alex, thank you so much. so is selling cnn enough or does rupert murdoch have his fingers in too many media pies? if you want to join the conversation, worldwide@cnbc.com,@cnbc we can see or direct to me @jchatterlycnbc. now, a number of you have tweeted. one viewer saying there is too much murdoch media already. liberty group has snapped up a stake in british broadcaster itv. analyst suggest this could be the first step towards a full

takeover of itv. shares trading higher by over 8%. now, coming up, ge may be getting ready to have big sale on refrigeratorses, washers and dryers. we look at who could make a bid for the company's appliance business. back in to.

welcome back to "worldwide exchange." these are your headlines. u.s. and eu sanctions push russian stocks lower. russian president putin calls u.s. foreign policy aggressive and mary barra faces more senate questions on gm's safety failings. if you're looking for a good deal on a new refrigerator or dishwasher, ge could have one for you. reports say the company is seeking a buyer for its appliance business. mary is at cnbc's headquarter with all the details. >> good morning to you, julia. as you mentioned, ge's name has been in american kitchens for more than a century. but the company is reportedly looking to get out of the kitchen again. ge tried to sell the appliance business in 2008 hiring goldman sachs as an adviser. but it had to scrap those plans when it couldn't find a potential buyer and a spin-off

was out of the question because of the recession. the appliance business accounts for 2% of its total profits last year. they have stepped up attempts to find a buyer. it would be in keeping with ceo jeff immelt's strategy. last month, you might recall gm stretched a deal to buy synergy assets for 17 billion, the largest act sessiquisition in t company's history. now, analysts are suggesting the appliance business could fetch more than $2 billion and they see a handful of potential suitors, including haier, nodd and electrolux. a deal could face anti-trust concerns here in the u.s. last week, whirlpool bought a

majority stake in an italian appliancemaker. ge reports second quarter shares on friday. shares right now down slightly lower down by 0.3%. let's take a look at earnings news out after the bell yesterday. ebay's second quarter profit rose 5% beating forecasts although revenue is slightly missed. ebay was boosted by paypal. a cyber attack incident compromised data of 145 million customers. ebay is trading higher by 1.2%. yum brands rose 0.9% as china continues to rebound from recent scares. yum says it's pleased with taco bell's new breakfast menu. however, sales in india and at pizza hut disappointed. yum is lower by 2.5% in the

german trading session. elsewhere, u.s. foreclosure activity dropped in june to its lowest level since the summer of 2006 before the housing bubble burst. reality track says foreclosures and auctions fell 2% in may, 16% from a year ago. however, fewer foreclosures have reduced the supply of homes on the market pushing prices up. that, combined with higher mortgage rates, slowed the housing market recovery. staying in the auto sector, a u.s. senate panel will delve deeper into gm's ignition switch recall today. ceo mary barra is set to testify at the hearing as is gm's general counsel. gm's internal investigation showed even as lawyers considered recommending settlements, they didn't alert those higher up in the company. general motors currently lower

by 1.3%. huj fund stanley druckenmiller says ibm is the poster child for what's wrong with corporate behavior today. he says in this balance sheet recovery, you're seeing companies engage in financial engineering increasing their debt load to stock buybacks rather than investing in their own business. >> ibm is the poster child. they literally face the threat not too dissimilar to what kodak and xerox, in terms of a new technology staip staring them right in the face. and instead of increasing investment to combat the threat, they've actually borrowed a lot of money to buy back stocks. still to come on the show, vladimir putin says u.s. sanctions on his company are unprofessional and russia's p.m. calls them evil. where will a standoff lead inspect stay tuned, we'll discuss after the break.

welcome back to "worldwide exchange." you're looking at a live shot now of times square as new york wakes up this thursday morning. a look for you, too, at the u.s. futures as we head towards the open of the u.s. equity market session. right now indicating lower on the s&p 500 by around 8 points. the dow jones lower by 44. the nasdaq lower by 13. yesterday's session, the dow seeing a fourth straight session of gains. we did see the russell 2k losing around 0.2%. yesterday the third straight day of losses. on the jand today, jobless claims, housing starts, and we've got google and morgan stanley rounding up the banks. futures do seem to be taking a bit of a message from what we're seeing in the european markets this morning, too. we've had further sanctions in

russia pose dollars by the u.s. overnight. also, the eu standing by the u.s., too, looking to push for further sanctions here, too. we have to wait to get the details of what those are right now. we have those comments from russia, threatening retaliation this morning and concern about whether europe has its own interesting by pushing forward with sanctions in russia. the uk lower by 0.4%. similar story for the german and french markets, russian market down by 2.6%. vladimir putin has denounced the latest round of sanctions. washington has announced measures against a number of companies with strong links to the kremlin, including oil giant ded and rossnet. president obama says he gave us them plenty of warning. >> among our allies, i've repeatedly made it clear that russia must halt the flow of weapons and fighters across the

border into ukraine. that russia must urge separatist toes release hostages and support a cease-fire, that russia needs to pursue internationally mediated talks and agree to meaningful monitors on the border. >> earlier on this channel, jim o'neill gave his reaction to the u.s. moves. >> it's easy for washington to shout and scream. it doesn't mean anything to them xk xhly. so some parts of europe, germany and italy in particular, it's a big deal. one of the most interesting things about the whole dispute to me was a day after crimea was annexed, the ceo of siemens appears in moscow for a meeting with putin. as you guys covered, i was on a panel about the emerging world and we did a survey them to all these european coffers.

this is weeks after the crimean annexation. after china, the second one was russia. i'm not sure that continental european politicians are going to start causing damage to their -- >> the eu has added russian companies to its sanctions list that it says are helping to destabilize ukraine as well as blocking new links to the country. this morning, russia answers foreign ministry says they're disappointed that the eu has disregarded its own plex. >> so a baltic stake and philanthropy. the messages are not clear, russia goes ahead and gets that in europe and the european boarders. here, i support fully their british position against russia. >> i'm sure that we'll find a

good balance package. we need to look at the big picture. we need to remember that the conditions outlined by the european council a few weeks back have not been met and this means that further measures will be taken, further restrictive measures. i do not think that we'll be moving to phase three in the sanctions, but some further restrictive measures will be taken. i think there are differences throughout the capitals in europe. that would like to see more sanctions in the step two. we will add to the list of people listed. the conditions we put up a couple of weeks ago have not been met by russia. >> so we need to be bolder in europe in order to frighten mr. putin? >> well, frighten. we understand that the use of sanctions and also the threat of sanctions, it's a sanctioning way of actually pushing back on the way that russia is dealing

with the -- their interests in ukraine. without that kind of political pressure, we think that the problems will decree. >> if you heard from the greeks or maybe even the italians, you would possibly hear a different tone. the russian government says it will not tolerate u.s. sanction blackmail. prime minister medvedev says the sanctions are, quote, evil. down 2.7% for gazprom and the micex index. sberbank, down 3.1% right now. the ruble is lose ago bit of ground in this session, down by 1.21% versus the dollar there. we can give you a bit of context, though. the gains we have seen in the ruble and the micex. that's it for today's show.

i'm julia chatterley. thanks for watching "worldwide exchange." "squawk box" coming up right after the break. obsessed with turbo? because there's nothing more exhilarating than a powerful ride. and you can get that in places you might not expect. like the passat. and also in the fun-to-drive jetta. in fact, volkswagen has sold more turbos than any other brand over the last ten years. that is a lot of turbo. vo: hurry in and you can get a $1,000 turbocharged reward card when you lease a new 2014 passat s for $219 a month.

good morning and welcome to "squawk box." president obama announces a new set of sanctions against russia targeting financial, energy and defense industry. russian markets are sliding. checking into earnings central today, dow component united healthcare -- i forgot that is a dow component -- about to roll out results. morgan stanley reporting this morning. and two activists investors, once at each other's throats, hug it out at delivering alpha. it's thursday -- wow.

it's thursday, july 17th, 2014, and "squawk box" begins right now. good morning, everybody. welcome to "squawk box" here on cnbc. i'm barack obama along with joe kernen and andrew ross sorkin. president obama slapping russia with some of the toughest sanctions yet in response to russia's involvement with ukraine. targeting now countries like russia's oil prizes rosnet and gazprom. those are close allies to russia's vladimir putin. >> we are blocking new financing of some of russia's most important banks and energy companies. these sanctions are significant, but they are also targeted. designed to have a maximum impact on russia, while limiting a spill over effect on american companies for those of our allies. >> putin