hi, everybody. welcome. i'm louisa bojesen. you're now watching "worldwide exchange." glad you're with us. these are the headlines from around the world. the baltic foreign minister is calling for an arms embargo in russia as they arrive for key talks in brussels where key sanctions against russia are likely to occur. >> it's a mistake. that tragic came recently. >> french president hollande says he still intends to deliver

a warship to russia as planned despite deep criticism from both sides of the atlantic. in corporate news, litigation talks talking its toll on credit suisse following a $8.5 billion settlement with u.s. authorities. .shares dropping to the bottom in market after a disappointing set of second quarter numbers. the failed deal with omnicom is partly to blame. >> we have been too much focused on the omnicon deal. these certainly generated questions over the day-to-day issues. >> you're watching "worldwide exchange," bringing you business news from around the globe. >> hi, everybody. welcome. you are watching "worldwide exchange" for the next two

hours. i just want to update ow some flashes we're just getting across our wires. we're seeing uk politicians talking, saying that they need to send a clear signal to russia, the world has changed since the recent eu meeting took place. he says expectations have changed and the eu needs to go further. a terrible incident that happened because of russia's support for these separatists, referring there to the recent planes that were shot down at the end of last week, mh-17. we'll be talking a lot more about what the prospects are for russia and ukraine and where we're going from here. we'll be doing that here within the next two hours or so. let's update you that the dutch foreign ministers speaking out of brussels, saying they're willing to adopt further sanctions against russia. we heard from uk cameron

yesterday afternoon speaking before the house of commons suggesting he would be suggesting further sanctions during the meetings in brussels today as though by the looks of things they're not off the table. again, we'll be talking more about this. but in general, there's strong rhetoric emerging, fresh sanctions from russia on the table, as mentioned, the lithuanian and the latvia foreign ministers both said they're seeking an arm embargo against russia. hadley gamble is looking at how the conditions have changed the west outlook. >> my point is that those would -- there's nothing to do with them. it's a mistake. that's tragic to mind came recently to those who felt really secure and, in fact, it had nothing to do with the conflict. there are a lot of victims,

coming from the western european countries. so this is really changing the situation. i believe it's a turning point, whether we will take it seriously, whether we will -- the situation for full responsibility, it's up to us. >> what economic sanctions are you looking for? >> economic sanctions are not yet decided. also for receiving sort of decide -- it should be measured. but in my understanding, we've not yet exhausted these measures against individuals because we are not coming closer to this circle is which is decision making circle. that's the point. that's the essence. this is influential. this has effect in spite of trying to -- it tries to say to neglect this or to down play. it's not true. it has effect so we can do that. let me mention military embargo,

which has not been introduced. when we're doing this for the country which we will accuse and aggression. it's something to be done. >> how do you -- >> including that. you know, there are some deals which we can't explain economically what we cannot understand. >> latvia's foreign minister told cnbc what needs to be achieved by his counterparts at this meeting. >> should send a very clear message of support separately. second, i think that one thing that is not sanctions, but security of the opinion is th that -- ban on all kinds of experts, of military technology to russia. i think it is very difficult to

explain in public and out of public how the media can -- they are selling not only ships, but different kind of technology that's been designed not probably somewhat deliberately, but in the case of missiles and because after that -- >> so we're talking about a possible arms embargo? >> well, we'll see. we will be discussing. >> now, earlier here on the channel, lord mark melabrown told the channel much evidence points towards guilt on the part of vladimir putin. sfwh while putin's finger was not on the trigger when it happened, i think there's plenty of evidence, and the financial times has done a particularly good job of pulling all this together, to demonstrate that it

was putin's support to the separatists that created conditions, that the separatist, probably in a tragic accident thinking they were shooting down a transport plane instead took down this airliner. >> all right. so just checking in on our european markets then this morning, we were called a couple of points higher. all things given within the last day or so, half a day or so, we've seen more cooperation between russian separatistes and international authorities. and that's led to a little bit more leeway with regards to a potential solution being found to the desks that are taking place now in ukraine. so the stoxx europe 600 this morning, you're seeing some slight gains, higher by half a percentage point at the moment. we saw a lower close on the european markets last night when we closed out, but by and large, relatively stable trade scenes according to many analysts

compared to what's taking place. we are looking at a heating up in rhetoric both with regards to what's taking place in the middle east as well as here in europe. the ftse 100 higher by 0.6% at the moment. you've got the xetra dax higher bay similar amount. cac 40 up, the micex index recovering a little bit from the drop that we saw yesterday. the russian markets were off somewhere in the region of 2%, 2.5% on yesterday's session. now higher by around a percentage point. so we're seeing buying back into some of these indexes today. now, when it comes to some of the spec stocks that we're looking at, ig group, pretax profits beating expectations, rising by 1.3% on the year for the full year ending this may. the betting and cfd provided they posted net trading revenues, which also were higher, up by 2.4%. you can see a jump up by 6%. royal mail, off by just over 1.5 %, warning on full year

revenues. the company's performance has been threatened by rising competition, so that's trading lower. then you've got holdings over here higher by 2.5%, rallying a bit as the firm has upgraded its full year profit forecast after this year's biotech company released core holdings thanks to the sale of a new drug. and hydro falling 2%. so a slightly mixed story this morning with regard to some of these stocks that we've been watching. when it comes to the fixed income markets, we're seeing a little bit of selling in the u.s. and the u.s. ten-year. you've got the gilt seeing a little bit of selling with yields pushing higher by 2.5% at the moment. the ten-year italian, you're seeing a bit of buying, holding

on to the level of 2.7%. the currency markets, we have quite a bit of focus on the eurozone, still holding on to that 1.35 level. in terms of the safe hach trades, traditionally we tend to see funds flowing into the yen and into the swiss trade. we've seen that to some extent this time around. we'll be talking more about currencies this time, as well. in the meantime, let's check on markets in asia. sri jegarajah joins us out of singapore. sri. >> thanks, louisa. it's been very constructive in the main as you can see from the embassies behind me. with the notable exception of the jakarta benchmark, which we have seen some fairley major volatility today. stocks are fairley stable forcing, but the declines have just started to accelerate. we were down by well over 2% at one point. a little bit on of

stabilization. still deeply negative. it comes down to the election results and the politics of the country. remember july the 9th, both sides claim victory. the markets favorite, the reformist, to all intents and purposes, the result is not out yet, but the broad expectations were that they would declare jakowi the winner. what we have learned is that the presidential contend er probowo has rejected the decision before it's been made. he's ordered his representatives to leave the electoral commission. so he is refusing to concede. and we do understand that the next step could be a challenge at the constitutional court by proboho. so fears of unrest have sent this market down quite sharply. we've seen quite a sizable

decline, louisa, in the indonesian rupiah. back to you now. now, the swiss banking giant credit suisse will be joining us next.

hello, everyone. foreign ministers are meeting in brussels to discussion further sanctions on russia and an arms embargo. the uk foreign secretary has been making comments in brussels. he says a clear signal needs to be sent to russia and the eu needs to go further. i spoke to the former british ambassador yesterday. >> where he goes from here is very difficult to say. i think he's painted himself into a corner. if he goes on this present course, it's going to be very damaging to him, but it may be very difficult for him to be seen to be pulling back. people won't judge him by his words, they will judge him in

particular on two actions, one, whether the russians do everything they can to facilitate an investigation and the other is whether they say military equipment moving back into russia rather than in the hands of ukraine and into the hands of separatists. >> jim, we spoke late afternoon. just recap for us what exactly it is that we anticipate to hear out of brussels today. and if you think there's any leeway with regards to negotiations. >> i don't think we're going to hear more out of brussels today than what was anticipated. i would be surprised to hear more. our understanding was that out of brussels, it would be a lot of talk about speeding up sanctions. but not much talk about more sanctions. and i was already surprised to hear chatting about an arms

embargo, for instance. that would be very interesting. although i'm not sure how that would apply. but in terms of that sound bite from the ambassador, i must say i totally agree with what he said. putin has painted himself into a corner. i mean, somebody once said that putin is a great tactician, but a lousy strategist. and i think that applies here. the pressure on him, louisa, is really mounting, both of the possibility of tougher sangs. we heard great britain talking about taking it to another level in terms of sanctions. we'll see how that breaks out today in brussels. but also that the strength of the u.s. intelligence case was growing by the day, as well. putin doubled down in ukraine, if he defiantly ignores the international community and continues to prop.the rebels in

ukraine, he could well incur, in my thinking, massive sanctions, at least it's a possibility, and possibly also russia turning into a pariah state. if on the other hand he gives in to the international community, he could cut his ties with the rebels, but he'll look extremely weak and defighted in the eyes of all the ethnic russians throughout the region, especially in crimea, a recent acquisition that he certainly doesn't want to lose again. and even here at home, in places like moscow, where russians get a steady diet of anti-ukrainian propaganda on state television. these russians could abandon him tomorrow and regardless of his approval rating, that could plummet. as one analyst has said, they have cochoose between bad and worth and only has himself to

blame. i think that's probably true. he's looking for a third way out. yesterday at the united nations security council was the first time i heard putin encourage rebels to cooperate with the international community. back to you. >> jim, thank you very much. we'll see you again soon. as usual, i encourage you to get involved. it's interesting for us to hear your vice presidents and your opinions both on what's taking place with the russian issue and the middle east and gaza. let us know what you think. european closing bell@cnbc.com.

credit suisse posted a 700 million swiss franc -- excuse me, let me do that again. credit suisse posting a 700 million franc lost in second quarter. carolin, i'm getting my currencies right. this loss for them, how impactful is it? how are they going to be able to absorb it? >> that's a very good question. going into these numbers, there was a lot of concern to what extent the hits would impact its asset gathering capability, the wealth management, the private banking side of the business, to what extent it would hinder some of the crimes linking business with them. and back in may, when that guilty plea and that huge $2.6 billion fine was announced, the ceo said it didn't have any impact on our capabilities of doing business, but the impact on the business is minimal.

so i asked him, two months later, what has the impact been? what are you seeing in your business right now? here is what he said. >> obviously, there has been some impact. we had to work through it. i think we certainly appreciate the support we've seen from our customers and a lot of the hard work done by our employees, as well. but you can see in the second quart quarter, it was a solid point of view from the customer flows, as well. 12 billion of new asset sess one of our stronger second quarter in the last few years. so it shows a lot of support from customers. >> do you think the worst is behind you? you would think about that guilty plea out of the way, you would think we could finally see at night. you think we have the issue on the asset probe, do you see any further huge litigation claims forthcoming? >> well, i think with this cross border issue and also with the fhfa issue we resolved earlier in the year, those were a couple of our biggest existing litigation issues. we obviously are working very hard to make sure that we have

an extremely compliant business. we haven't had any issues on the libor side. we don't have any material issues on the fx side. but, you know, obviously b, there are a number of issues that we continue to work through. we hope most of our major issues we're putting behind us. obviously, we need to continue to work and the environment is obviously dynamic. >> we mentioned the capital levels, 9.5%. that's fallen below that 10% threshold where you would to be, 11% is your longer term target. to get that capital level back to the level that you're comfortable with, and you've announced a number of smaller initiatives to bump up that capital level, any bigger measures that you'll be looking at? >> no. i think we feel we're well on track with the measures that we announced in conjunction with the settlement. we had a number of dispositions that we thought would help us and on top of that, we have

organic capital. we feel confident we'll be above 110% by the end of the year. that includes an accrual for dividend. once we get to 10%, we're going to allocate half of our capital to distribution to shareholders. >> and that hasn't changed. >> that hasn't changed. >> let's talk about the actually business, the underlying business, the fixed income side of the business. the u.s. thinks ashley has performed better than forecast. was that the same for you guys? yeah. in fact, our revenues were even with where they were in a year ago quarter. our credit and our structured products businesses have performed quite well in the quarter. but overall, we had a good result in our fixed income business. and you heard brady dugan there, the ceo of credit suisse talking about the outperformance in the fixed income business. quite interesting. on the day when the fixed income business contributes to the

majority of the beat, they're scaling back and part of that business, they're exiting their commodities business. goldman sachs writing this morning, it was a beat, but it is a beat of poor quality because it comes from the fixed income business. that should bode well for the likes of deutsche bank because they have had exposure to that. not so well for ubs because they're lowered their exposure to that. why? because that fell up expectedly and that's not great news for the private sector. >> carolin, thank you very much for that. lovely seeing you. now, in other earnings news, chip designer arm holdings has posted a ride in second quarter profit driven by rising demand. arm expects revenues to continue to rise during the rest of the year.

speaking earlier on cnbc, he explained what was driving growth for his product. >> you will see more ways which people interact with their devices. and the way this works out what you need and what you're going to do before you even realize it. in entry level smartphones, similarly, we're seeing very strong growth as devices become very low cost and opened up markets in developing countries. >> now, swatch posted an 11.5% drop in first half profit as margins came under pressure for the second consecutive year. the results were only slightly below expectations and the watchmaker sounded optimistic on the second half of the year. speaking earlier here on the channel, the company's ceo said analysts failed to see the company's strategy to grow market share. >> if the analysts a bit concerned, then it's even more

to be optimistic and positive. they have never understood our business model. it's long-term. what we are not doing is when we take the exchange rates is to take the consumer and to be unfair with him and increase prices because the swiss franc is higher. >> well, shares have been trading lower after weeks at second quarter numberes and a less than encouraging outlook for the rest of the the publicis ceo says this failed omnicom merger hurt the results. also sticking with your earnings team, a couple of earnings in the u.s. overnight we need to tell you about. netflix's second quarter profit more than doubled as the video streaming service group added 1 is..7 million subscribers worldwide. earnings missed by a penny while revenue was in line with

forecasts. this comes as netflix xwlekted its first price increase in three years. the company warned that third quarter results could be hurt by international expansion plans. it's going to be launching in germany, in france and in austria this september. shares rising by -- well, almost 2% in trade. chi poetly's second quarter profit rose 26%. same-store sales surged 17%. chipotle is boosting its same-store sales outlook. it's on a jump in shares in after hours trade. the german listing up by approximately 9.5%. the company now has a market cap of $18 billion, twice that of

burger king. still to come, u.s. secretary of state john kerry touches down in the middle east. can he secure a cease-fire deal? we have live in tel aviv next.

hi, everybody. welcome back. the baltic foreign minister is calling for an arms embargo on russia. meanwhile, the swedish foreign minister is claiming modern russian tanks have been supplied to the separatists. >> special t-64 on the streets of donetsk yesterday. you don't buy them at the local grocery store. >> but, french president hollande says he still intends to deliver a warship to russia as planned, despite deep criticism from both sides of the atlantic. in corporate news, litigation talks taking their toll on credit suisse, posting their worst results since 2008 following a billion dollar settlement with u.s. authorities. and putin shares dropping to the bottom of the markets in europe. the firm of publicis saying the deal with omnicom partly to

blame. >> it is fair to say that we have been too focused on the deal with omni conover the day-to-day business. the israeli military has confirmed that a soldier is missing, presumed dead in gaza, this as the death toll from the conflict between israel and hamas continues to rise. the latest count shows almost 550 palestinians and 29 israelis have died. martin pletcher, middle eastern correspondent, joins us now. martin, good to see you. bring us up to date with regard to what's taken place in the last 24 hours or so. >> hi, louisa, good morning. israel confirmed the soldier was presumed dead. but yesterday hamas said they captured him.

but it appears he's more likely to be dead because he was in a jeep that was hit by an rpg rocket. seven people were in it and six people have been confirmed dead. we have to find out what happened to him. there was talk about a five-hour humanitarian truce, a rally in the fighting that hamas agreed to. israel did not agree to it. all eyes are now on cairo where the united -- speaking on behalf of hamas, trying to come up with an agreement that can be agreed to by hamas and israel to arrange a proper cease-fire to stop the fighting. but if anything, the fighting is intensifying. and yesterday, israel's prime minister netanyahu said all hamas wanted to do was what he

called, quote, pile up the bodies. the more dead in gaza, the more hamas is using that to get sympathy examine support against israel. mean wile, israel yesterday with the death toll yesterday of israeli soldiers are now 27 have been confirmed killed in this fighting. so it's getting intense. but all eyes are now looking at cairo for those cease-fire talks. louisa. >> martin, thank you very much for that, martin fletcher, bureau chief in tel aviv at cnbc. if you want to get in touch and let us know your opinions, find us on twits. tweet us directly, find us on e-mail, worldwide@cnbc.com. there's also one of the addresses that you can use, "worldwide exchange"@cnbc.com.

that's the e-mail address. you can also find us on closing bell. let's move on and talk about what we're doing with regard to some of the data that's been printed here on our wires. we're looking at a uk june public finances print showing a bigger than anticipated deaf sigz. you've got the u.s. -- excuse me, the uk public finances figure. uk june figure on of 9.5 billion pounds sterling versus 9.76 billion pounds sterling seen in june of 2013. when looking at the ender vengz, 1 is.3 trillion pounds for the month of june, a 77.3% of figure of gdp is the highest seen on record. we're sealing sterling coming a tad off these numbers. our top stories, fresh sanction owes russia on the table and the luth wanan and

latvia minister ves told cnbc they're seeking an arms embargo on russia. krpz's hadley gamble joins us now from brussels. the rhetoric has been ramping up here over the last couple of hours. >> that the. there seemed to be little appetite a few hours ago. but as we heard from the ministers as they were moving into the meetings, there's growing concern about the weapons on the ground in eastern ukraine. how are these separatists getting these weapons? where are they coming from? i certainly have heard from the lithuanians about how concern they are about the weapons on the ground.

>> you don't buy them at the local grocery story. we know where they're coming from. they come in increasing numbers across the border in spate our commitment and in spite 06 our demands. >> he's not the only foreign minister to express concern about these weapons. you also have in france a bigger discussion about whether or not the french government ought to stop the sale and the delivery of some warships that have been in the pipeline to russia for the last couple of years. the french has given no indication that they're going to put a stop on that order. in fact, they said they are going to go ahead with it. we also saw the french foreign minister moving into the meetings earlier this morning and he had no comment on that. the bigger question now seems to be since the eu seems to have little appetite for these economic sanction webs what they plan to do in terms of getting

the arms. >> to deliver arms to russia in this situation is somewhat difficult to defend in my list. >> hadley, thank you very much for that. hadley gamble live from brussels. so the latvia and leth wanan foreign r foreign ministers have expressed a desire to launch an arms embargo on russia. british prime minister david cameron denounced the warship

delivery, calling on european country toes halt defense and arms trades with moscow. >> only issue of defense equipment, as i said, we have unilaterally, as have the u.s. said we would sell further arms to russia. frankly, in this country, it would be unthinkable to fulfill an order like the one standing that the french have. but we need to put the pressure on with all our partners to say that we cannot go on doing business as usual with a country when it's behaving in this way. >> stephane joins us live from paris. stephane, it's going to be interesting to see which way france goes in the end. >> and it's hard to know, louisa, is france is just trying to gain some time or if the tone has really changed from francois hollande. because for the first time since the beginning of the crisis in ukraine, france is threatening to review its position. it's not planning to cancel the

whole contract with russia. speaking about yesterday's meeting, the french president, francois hollande is facing a growing international pressure, say that the decision to deliver the second warship will depend on russia's stud over the ukraine crisis. however, regarding the serve, francois hollande said france was planning to go ahead with it because the current sanctions were not forcing the country to cancel the contract. there are a couple of ropes, actually, two reasons why it's simply for france to cancel the contract. the final is a show for the full contract and in the case of a cancellation would have to pay $1.1 billion euros to russia. the second is the ship has been built already and they're guaranteed training in france on how to use this carrier.

so the comments from yesterday seems like a bit of a strategy to gain some time, as you mentioned, francois hollande is facing a growing pressure from the u.s. and also from european countries. >> stephane, thank you very much. i just wanted to brick you up to date with some news that just hit our wires here within the last couple of minutes. the indonesian presidential candidate p prabawo says he has withdrawn from the race. this move is unexpected. you're watching "worldwide exchange." good morning, everybody. see you in a second. we started zya with the thought

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hi, everybody. welcome back. the indonesian presidential candidate prabawo says he is withdrawing from the race alleged to massive fraud. the results of the presidential vote has been expected today. his move is unexpected.

it sent shares in jakarta lower. mark, welcome. some unexpected news just hitting our wires, namely the withdraw of prabawo. what does this mean? >> well, it is a surprise because there have been mixed signals coming out of his camp pep has a broad coalition of a lot of traditional politicianes. the mremts have been saying we should concede the race, we should realize even though it was close, it was what hard-fought campaign and, on state it is buying said she should maybe some aragements. this is unprecedented in the nation of politics. we've had 15 years of democracy since the fall.

elections thus far have been peaceful. they've been considered relatively fare. and actually, most experts say this election, this presidential poll was surprisingly fair. there were some irregular layerties at the local level, but many are saying it was even fairer than the parliamentary polls in april. so it seems like a strategy by prabawo, the hard liners trying to push things to a limit. what comes after that is hard to predict. but he does have a lot of hard line supporters, but i'm betting on the fact that the indonesian institutions have held up pretty well in the last decade and a half of democracy. >> according to his lawyer, he's not going to be challenging the vote in a constitutional court. they will be pushing the claims of vote, irregular layerties at supervisory agencies. what does this mean now for one of the other main contenders? >> well, jokowi, as he's

popularly known as in indonesia, is the winner. that will be announced very shortly. and i think there's growing consensus within indonesia to accept that current president, the sitting president, the incumbent as he's known is telling people to sell the results. i think tlm be disappoint that prabawo has seemingly backed away from this consensus making process that's been typical of indonesian electrics until now. so we'll see what happens. but clearly, jakowbi has won. results show that it was less close than expected. most people i think in indonesia will be supporting him as the new president. >> how business friendly is jakowi seen as being? >> it's a little bit hard to say. the election was characterized by nationalist slogans,

indonesia's economic growth has been driven by mining, commodity exports and there's been a growing sense that indonesians haven't been getting the best deal. what he actually does in office is something else. indonesia faces some difficult economic choices. it's rapid growth of recent years is now slowing. there's clearly some need for structural reforms, problems with infrastructure and health and education. there's a need in other areas of the economy for reform. there's expensive energy subsidies. one interesting aspect there is his vice president has been vice president before and it was at that time that he helped make some difficult economic decisions that helped fuel the current round of economic growth. so there's some belief that maybe kalla will be an important

adviser to jokowi in the months ahead when these important reforms need to be made. >> mark thompson, director of southeast research center at the city university of hong kong on the back of surprising announcements, thank you for being with us. now, these japanese government lowered its economic growth forecast for the current fiscal year. please, tell us more about this. >> hi, lieu swees sa. yes, the government now estimates real gdp growth at 1.2% in the fiscal year march 2015 instead of the previous forecast of 1.4 had% gross.

the new estimate is in line with the estimates made by the bank of japan. but the current market expectations of 0.85% growth. for the following fiscal year, growth is expected to accelerate to 1.4%, supported by the increase in consumer and capital spending. in other news, the nikkei is reporting today that the government is planning to set specific targets for spending cuts to make a clear road map for a balanced budge. the japanese government has pledged to -- its revenues by 2020. but current estimates show a revenue shortfall for that year. this will be the first time that prime minister abe's government details how it plans to achieve that balance by 2020. the government hopes to probe special security spending. and pay for government

employees. the target plans will be finalized by next summer. louisa, back to you. >> thank you very much for that. we need toil what's on the agenda in asia tomorrow. consumer inflation figures for the for the second quarter will be released. we have bhp billton's host of output, lg display's second quarter numbers and speaking of reporting, shares have been trading lower after a weak set of second quarter numbers. stephane is in paris. you've been speaking exclusively to the publicis ceo. >> i'm starting with the reason why the company says a sharp slowdown of its growth in the second quarter, 0.5% for the revenue. that is to compare with 3.3% growth in the third quarter of this year.

as a result, publicis said its target will be very difficult to meet. i spoke to the ceo of the company starting with the reason for this sharp slowdown in the second quarter. >> we expected a slowdown, but clearly not to that degree. and posting such mode of growth, 0.5%, is something which has not been our history, habit or our ability. we could do much better and we should have done much better. the reason for that modest growth, first, the fact that europe has been much weaker than expected and we've had some -- which are still very negative, but also germany. we have, on the other hand, the emerging market which gets slowly to growth, but to a less

level than expected. and we have two or three of our clients and this is creating some issues. >> this has certainly generated a distraction over the day-to-day business. so we are back on the business, we are back managing our business very seriously and you can be assures that we are doek our very best to have a very good second half of the year. >> in terms of outlook, you warn that the 4% growth target this year will be difficult to meet. do you expect to have a good guidance? >> we expect a very good second

half of the year. due to the fact that we have a delaying growth in this q2, we think that changing the level of growth that we have anticipated will be -- we are making our best effort and dabbling down to make sure that we deliver something. but it is fair to say that it will be difficult. >> you're planning some cut reduction. are you planning some job cuts? >> no, we are not planning any job cuts. we are planning to tighten our belt and to make sure that we are not spending when we can delay or after seeing some expanses and making sure that we deliver something which is close to our objectives.

>> the crisis with russia will have a significant impact on the global advertising markets. shares of publicis are trading 4.3% lower this morning right after the opening. >> stephane, thank you very much for that. in other earnings news, a chip designer arm holdings, driven by rising demand for its tellings. arm provides devices used in the popular smartphone gadgets. arm's ceo explained what was driving the growth in demand for his product. >> you will see more ways in which people work with their devices and what you need and

what you're going to do before you even realize it. at the mid range of smartphones, we're very very smart growth. and in entry level smartphones, similarly strng growth as devices become very low cost and that opens up markets in developing countries. now, credit suisse says the 700 million swiss franc loss during the second quarter as the bank absorbs charges from u.s. settlement. and said it expected to save $1.8 billion in the next profit. speak earlier to cnbc, brady warned tough conditions could continue. i think they'll continue to have some impact on the overall level of activity. so far, we think conditions are similar to what we saw in the

first half. still to come here on the show, spicy results from chipotle, the mexican food chain beating forecasts with second quarter numbers. we'll be checking that next.

hi, everybody. welcome to "worldwide exchange." i'm louisa bojesen. these are your headlines from around the world. the baltic foreign minister is calling for an arms embargo on russia. meanwhile, the swedish foreign minister is raising doubts over how modern russian tanks have arrived in eastern ukraine. >> it was through donetsk yesterday. you don't buy them at the local grocery story. >> french president hollande says he still intends to deliver a warship to russia as planned, despite deep criticism from both

sides of the atlantic. net flex's second quarter profit more than double. and chipotle reporting earns and stocks soaring as customers flock into the bureau ree trito shrugging off higher prices. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. hi, everybody. welcome to the second hour here of "worldwide exchange." we've still got a lot to get through. geopolitics still dominating the agenda. and we'll talk a lot more about both ukraine and russia as well as the middle east here in the next hour. i want to show what you we're gearing up for here in the u.s. the markets opened a couple hours away. we're looking at slightly flat to a couple of points higher on the u.s. markets. we saw a slightly higher call from europe falling a lower close on our european markets yesterday or last night when we

spoke on the close. but our main european markets still seeing positivity. we're holding on to that sense of trade. ftse 100 higher by 0.75%. the zax higher, kakt 40 higher both by 0.7%. the micec higher by 1.7%, but losing some 2.5% in trade last night. let's check in on the markets in asia why and what's taking place there. sri jegarajah joins us out of singapore. >> hi, louisa. a fairley constructive back drop. the strong yen trend has paused and that's benefiting the exporters in particular. the mainland market and the hang seng have a very strong day today. the hang seng closed at its strongest level in 7 1/2 months. so it's the carmakers and the property developers that led these indices higher.

but here is the story. the jakarta composite is the lad ard today. it was down by well over 2%. that's because of the politics. remember this controversial result on july the 9th. both the elections -- i should say both sides, jakowi and the formest jakarta governor both claiming victory. today is a very important day. the election commission will decide in roughly about an hour's time who the real winner is. but even before that was announced, prabowo has effectively withdrawn from the race saying that the whole electoral process was deeply flawed and we don't really know what his step is going to be. it would be a legal challenge at the constitutional courts and he could mobilize his supporters.

tease fear of political unrest in jakarta. the markets were down by more than 2%. they have recouped author lows. the indonesia rupiah was weaker, as well, on fears of political unrest. but one of the reasons why i think the markets are stabilizing is because prabawo doesn't necessarily have a strong body of support. in fact, a lot of his supporters have crossed over to jakowi. that's weakening his position somewhat. foreign ministers are meeting in brussels. the lithuanian and latvian ministers both say they're seeking an arms embargo on before

russia. they've been speak, hadley who is live in brulss for us covering the ground there. hadley, it's going to be interesting to see how these come together by the end of today, if they come together, and whether or not they manage to find out just how strongly they want to pursue the -- a third central round of sanctions towards russia or whether there are other avenues to look at. >> absolutely, louisa. the big question was always going to be just how tough is the eu really going to be on russia? we didn't get much appetite for further economic sanctions. those economic sanctions that they already have in place have hit germany particularly hard. but above now is the arms embargo. what are they going to do with these weapons flying into eastern ukraine? where are they getting them and how is the eu going to stop them? >> t-64, so to speak, in donetsk yesterday. you don't buy them at the local grocery store. we know where they are coming

from. they're coming in increasing numbers across the border in spite the commitment, in spite of our demands. >> also a bigger question involving the french, hollande has said two warships on order by the russians, one of them at least is going to be delivered despite mashg objections from david cameron among others. and then we're hearing here at the eu, these ministers come from a company that has real knowledge of russian aggression and they're putting their eu counterparters on notice what they're facing. >> we have history and legacy and my point is those we believe something happening has nothing to do with them, it's a mistake. and that's tragic. to those who felt really secure and think this has nothing to do

with the conflict, there are a lot of victims, they're coming from the western european countries. so this is really changing the situation. ebl it's a turning point. >> what kind of economic sanctions are you looking for today? in economic sanctions are not yet decided. my understanding, it's not yet exhausted against individuals because we are not coming closer to this circle which is decision making circle. that's the point. and that's the essence. and this is influential. to down play, no, it's not true, it has effect. so we really can do that. also, let me mention military

embar embargo, which is not yet introduced. when we're doing this with the country which we will accusing the aggression. so this is really something also to be done. >> including, including that. you know, there are some deals which we can explain economically what we cannot understand. >> there you heard lithuania's foreign minister talking about the real threat and he's referring to the russians, to president vladimir putin. we'll see and see if the eu has a whole is listening. >> definitely, hadley. thank you very much. we're watching your comments via twitter and you can find us via twitter and e-mail. worldwide@cnbc.com or on twitter@louisa bojesen.

a look at some of the other top stories today, bill ackman is saying he'll expose herbalife as an incredible fraud in a presentation he's making today. the billionaire investor has raised a high profile campaign since 2012 accusing the company of run ago peer mead scheme. ackman says he'll show evidence of fraud ator ba lye's stores. herbalife is down by 14% since ackman as announced that webb cast last week. ahead of ackman's presentation, herbalife's cfo will be on "squawk on the street" today at 9:00 a.m. eastern time. time warner taking steps to head off a potential hostile takeover offer. the media company has adopted a provision to make it harder for shareholders to force a vote on a sale or try to replace the

board. it won't be able to call for a special meeting before time warner's annual shareholder meeting next week. last week, though, the company rejected rupert murdoch's $80 billion offer in time warner's german trade flattish to slightly lower. ahead on what's on the agenda in the united states today, the june cpi data, out at 8:30 eastern time. consumer prices are forecast to rise by 0.3% and 0.2% when you exclude food and energy. at 10:00 a.m., we get existing home sales. we'll be talking more about home sales here in about 20 minutes time or so. it's a big day for earnings, coke, comcast, dupont, mcdonald's, lockheed, harley davidson, among those we'll hear from before the bell.

we've been talking about what to anticipate for apple. that interview coming up in around half an hour's time. you may know businessmen who founded microsoft, but could his next project be something more humble? maybe a book club. gates has recommended six books to read this summer. the list includes works on business, finance, obamacare, and don't worry, if you have enough of that, there's a romantic comedy smack in there, as well. what's on your reading list this summer? if you want to tell us on a lighter note what you're reading, that's always nice. i'm reading a book called the history of the mediterranean. and it is probably the most boring book i've ever read. i maybe sure say that. it's very, very difficult to get through, but i will read it, i will persevere, because it's

phenomenal, all the stuff that you learn, right? up next, netflix's second quarter profits nearly double. we'll get your earnings report cards ready and we'll talk about that in sa second.

hi, everybody, welcome back. netflix adding 1.7 million subscriber as earnings nearly double. and chipotle sizzling with better than expected same-store sales. a couple of earnings reports out overnight, netflix's second quarter profit nearly doubled as the group added more than 1.7 million subscribers worldwide. revenues in line with forecasts as netflix implemented its first price increase seen in three years. the company warns it could be hurt by international expansion plans. it will be launching in germany, france and austria. in september, shares rising by around 1% in after hours trade. currentsly, german trade up by around 1 1%, as well.

chipotle, same-store sales surging by 17% as the burrito chain raised prices to offset costs of beef, dairy products and avocados. it's now boosting its same-store sales outlook. it has a market capital around $18 billion, twice that of burger king. in german trade, up we around 10%, as well. andrew berkeley, from oppenheimer and company joins us now. good to see you. let's start with the earnings season. it's staying pretty strong so far out of the u.s. do you anticipate this strength to continue in the earnings that we haven't yet seen? >> yeah, absolutely. it's been a really good earnings season. we've had about two-thirds of companies beat on eps. but more importantly, about two-thirds of companies are beating on revenues, as well, which is a little different than

prior quarters. we know the expectations coming into this quarter weren't particularly depressed. analysts, as a consensus, we're looking at about 5% year over year growth. so far, it's been technology and financials. which are a little bit, you know, different perspective. financials, the expectations were pretty low. and the results aren't particularly good, but they're stepping over a pretty low bar. as we move forward, the next two big sectors are going to be energy and consumer discretionary. and i would say consumer discretionary, the bar is relatively low, especially when you get to retail. so i do expect the upside surprises to continue here. >> how much further do you think markets can go before they start to pay more attention to geopolitics or will they? because right now, it doesn't really feel that way. >> you know, i think the markets have been incredibly resilient and with the unfortunate geopolitical uncertainty we have

out there. i'm not sure that the strong earnings season is really getting appreciated. we've been more consolidating in the market for most of the month of july. we peaked early july and the labor report and the market hasn't really made much upside progress even though we have had good earnings reports. so once the maybe geopolitical situation ps calms down a little bit, maybe the markets start to focus on earnings a little bit more. but my bigger concern would be on the inflation or the interest rate front. and i think, you know, we'll get a pretty important data point today when we get cpi. i think that's a bigger concern for the market than earnings. >> so where do you see value at the moment? what would you be buying still if we want to remain optimistic if that be the precedent that's being set? >> yeah, i think later south carolinaals. i would still stick with that, our three favorite sector res energy, technology and industrials. and especially larger cap names

within there. so we would definitely recommend rotating up for the capitalization spectrum away from the small cap to large cap in some of those later south carolinaal areas. i think it's a play on infrastructure spending, certainly what's going on in the use, i think that's a strong story and those names definitely keep going higher here. >> andrew, thank you very much for being with us, andrew berkeley, head of institutional portfolio strategy at oppenheimer. still to come here on the show, u.s. secretary of state john kerry touching down in the middle east. we are live in tel aviv, next. xç

hi, everybody. welcome back. we're a couple of hours away from the u.s. markets. but we're looking at the u.s. being called a couple of points higher by the looks of things. similar pictures emerging in europe. yesterday, signs of collaboration between the russian separatists and international investigators regarding flight mh-17. that led to some people thinking we were moving more in the direction of finding some type

of solution with regards to ukraine. the israeli military has a solar missing presumed dead in gaza as the death toll continues to rise. almost 550 palestinians and 29 israelis have died. israel's prime minister claims hamas wants to pile up the bodies to generate sympathy. the prime minister was explaining the reason behind his decision to line up a ground on offensive in gaza. >> to a certain point, what would you do? what would you do if american cities would absorb hundreds of rockets? you know what you'd say? you'd say to your leader, a man has to do what a man has to do and you would say a country has to do what a country has to do. we try to defend ourselves. we try to do it with a minimal amount of force or with targeting military targets as best as we can. but we'll act to defend

ourselves. no country can live like this. >> let's talk about the civilian deaths. the last night our network airs scenes of the largest hospital in gaza having to turn away dead bodies at the hospital morgue. there was no room. you've seen the widely chronicled story of the boys on the beach in gaza who were killed. how does it strike you as a father, as a human being? >> it's very saddening to see any of these simpcivilian death very sad. we don't seek to have even one civilian death. we're targeting hamas terrorists. i can tell you that we opened up a hospital, a humanitarian field hospital on the edge of gaza and hamas doesn't let the people come there. they're hiding rockets in hospitals, they're hiding arms in hospitals, they're shooting from hospitals. they just don't carry.

they break every rule in the book, piloting civilians in places where they'll be put in harm's way. i think to the extent there is any blame it should be laid squarely to hamas's door. these are not symmetrical conditions. >> it is a situation, mr. prime minister, that civilians are dying in droves, that we've seen pictures of children wandering the streets of gaza no longer with homes to return to. our president again calls for a cease-fire. are you willing to talk to hamas in any form? and what are you willing to agree to when secretary kerry gets to work there? >> well, we've agreed three times to the successive cease-fires. really the only initiative is the egyptian initiative supported by the arab league,

supported by the u.n., supported by slael. if hamas wanted to end this, they could have ended it. i think john kerry will come here. i think he should stand behind this initiative. if people want to end it, it could end. >> martin fletcher is standing by now in tel aviv. martin, several hundred of the palestinians that were detained during the search just a couple of weeks ago, some saying that they need to be released, as well, for things to move ahead. >> well, that's right, louisa. that's one of the key conditions of hamas. but those three -- basically, the killers of the three jewish teenagers, they were murdered, of course, to be released. also all of the people rounded up from israel at that time. israel took that opportunity, there's no doubt about it, they

denied it, but it's clear to everybody that they used the opportunity of the search for the murderers to, at the same time, attack the infrastructure of hamas on the west bank. they arrested about 500 members and leaders of hamas. the hamas in gaza is saying as part of offer conditions for the troops, israel must release those people arrested after the murder of three teenager israelis. now, israeli sources say that the political arrests after the killing eventually will release those people, but they do say that the actual killers themselves will be put on trial and sentenced and whatever happens will be -- it will happen to them. but the other key condition hamas has is that the siege of gaza be lifted. that's the key area the political groceriers are

discussing. how to monitor the lifting of the siege and the question is whether that will be enough for hamas. >> martin, thank you very much for that, martin pletcher, middle east correspondent and bureau chief. we're just getting some flashes through. by the looks of things, britain has now announced that it's holding a public inquiry into the death of the former kgb spy alexander litvinenko. he accused putin of ordering his death in 2006. we will keep you up to date on that when we get more on that. after the break, we have more on what's taking place with regard to the u.s., market housing sites and pilg permits.

is a housing recovery really on track? we'll preview existing home sales out later today after the break. stay with us. you're watching "worldwide exchange."

hi, everybody. welcome. you are watching "worldwide exchange." i'm louisa bojesen. these are your headlines from around the world. the baltic foreign minister called for an arms embargo on russia as they arrived for key

talks in the brussels. meanwhile -- >> t-64 so to speak in donetsk yesterday. you don't buy them at the local grocery store. >> french president hollande, though, still saying that he intends to deliver a warship to russia as planned, despite the criticism from both sides of the atlantic. netflix's second quarter profits more than doubling despite strong growth in the u.s. and abroad. and chi poetly reporting spicy earnings as they stalk to the barista chain, shrugging off higher prices. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe.

>> hi, everybody. u.s. futures are a couple of points higher at the call on our u.s. markets. we still are a few hours away. but we saw a fairley positive start in europe this morning. we've held on to some slight gains coming off the back of a slightly negative close. last night when we spoke, we have nan european index of some of them. the ftse 100, xetra dax, cac 40 all trading higher by shy of 1%. here we have the micex higher by shy of 2% today, after closing by lower by around 2.5 % in yesterday's session. now, netflix share price, well, they rose in after hours trade after the company more than doubled its second quarter profit and added more subscribers than anticipated. julia boorstin has more. >> moving higher on better than

expected results, adding customers faster than expected, reporting more than 50 million streaming subscriber for the first time. the company says it got a big boost from the popularity on of the second season of orange is the new black. overseas, international growth was stronger than expected. looking forward, the streaming company says it expects to add subscribers even faster, projecting the addition of 3.7 million new subscribers in q3. most of them coming from overseas. in september, it will launch in france, germany and other european markets with over 60 billion new broadband househo households. david wells did not respond to questions about plans to launch in china. back over to you. >> chipotle's second quarter

profits rose by 26% beating forecasts. the barista chain raised menu prices for offset the costs of beef and avocados. it's up 10% in after hours trade and german trade higher by 9.5% or so. it has a market cap of $18 billion which is twice that of burger king. this is a barista chain that is taking everyone by storm by the looks of things. credit suisse posting a 7 million loss. carolin is in zurich and has been covering this story all morning long. earlier we were talking about how they're going to manage to absorb some of these losses and what the future looks like for them. >> obviously, it's a tough loss to absorb, isn't it?

$1.6 billion, that was a charge for the second quarter, resulting in a net loss of around $700 million swiss frank. it is the biggest quarterly loss since the fourth quarter of 20308. it is focusing on its wealth management business and is further scaling back it's fixed income business. so many bank on this and the other side of the bond have done that. but as for the impact on its business from that massive fine and that guilty plea, the impact is imminent. take a listen. >> obviously, there has been some impact. we've had to work through it. i think we certainly appreciate the support we've seen from our customers, and a lot of the hard work done by our employees, as well. but you can see in the second quarter, it was a pretty solid quarter from the point of view. 12 million in net new asset sess one of our stronger second

quarters in the last few years. it shows a lot of support from customers. >> you would think with that guilty plea out of the way, you would think now he can finally sleep at night. do you see any earnings for the huge litigation claims forthcoming? >> well, i think with this cross border issue and the fhfh issue we ordered earlier in the year, those are a couple of our existing litigation issues. we are working hard, we don't have any material issues on the fx side. but, you know, we're obviously -- there are a number of issues that we continue to work through. we hope certainly that most of our major issues were hopefully putting behind us. but, you know, obviously, we need to continue to work and the environment is obviously dynamic. >> let's get back to the guilty plea and the impact on the business and may still be an impact on the asset management

side of the business. credit suisse manages billions of dollars in assets and federally regulated pension plans. in august, we'll find out whether they can continue to manage those. but that is still one factor of uncertainty here. in terms of the actual numbers, not too bad. goldman sachs calls it a beat of poor quality because the beat came from the fixed income side of the building. wealth management margin, meanwhile, unexpectedly. so that's reflected in the share price today. louisa. >> carolin, thank you very much. the national association of realtors released june existing home sales data at 10:00 a.m. eastern time. a healthy increase is predicted, although the rise may fall shy of may's jump of 4.9%, which is the highest gain since 2011. with pending home sales soaring way above expectations in june, most of the economists are

seeking actual shares. sherry liston joins me now from new york. what are you expecting? >> for sure, we're speccing them to go up because the pending home sales were up last month. but there is still two major headwinds for home sales. one is the lack of inventory and the second is the hard time americans are having getting approved for a loan and also because of changes at the federal housing administration. you'll recall the fha had to borrow resources from taxpayers. as a result, people are taking as much as 25% of their mortgage payment towards those fha fees

which is putting home ownership out of reach for a lot of americans. what are you seeing with regard to the difference between the average buyer and the high end buyer? the strength in both of these particular parts of the market is is it very different? is one more solid than the other? >> sure. well, you know, that's a great question. home sales, existing home sales $250,000 are dragging along the bottom. that goes to inventory because that's where those folks are still under water. as many as 40% of americans with a mortgage still don't have enough equity to sell their homes if they wanted to sell their homes. the other thing we're seeing is something we now call rate lock in where folks who did refinance, rates as low as 3.5%, are now hesitant to sell because they don't want to lose those rates. again, the new construction is a problem. we have only around 600,000 new homes being built a year, which just isn't enough to keep up with demand.

and the reason for that goes back to the problems folks have getting loans. builders just don't want to build when they know people aren't going to be able to get loan toes buy their products. >> what do you think is going the happen to the u.s. housing market once rates start to creep up by a bit? we're still quite a ways off from the indications that we're getting. are we anywhere close to being ready for this new scenario? >> these a great question, louis louisa. here is the thing. that fool, the fed tool of being able to adjust interest rates has been used in the past to stimulate the economy. the problem now is that the rates have been so low for so long that younger americans in particular consider any rate over 5% to be too high. those folks that have been surveyed say they will reconsider majoring major pure casss if rates are above 5%. so that tool that was used to stimulate the economy may actually stall the economy again. >> sherry, good to see you. thank you very much for being

with us, sherry olefson director of the carnegie group and director of the book foreclosure nation. up next, bill ackman steps up his war against herbalife. he has long claimed they're running a pyramid scheme. a bit more on that later on. having the cloud allows us to rapid prototype a lot of ideas.

being able to pay as we go was crucial for a start up. having to fork out a lot of money up front was risky. you can launch a feature really quick, and if the feature doesn't work, we haven't lost anything and we can have something up and running in days. and this would not be possible without the cloud. we are now supporting over 25 million users each month. ideas can be tried and tried again on the ibm cloud. the ibm cloud is the cloud for business.

hi, everybody. welcome back to "worldwide exchange." european foreign ministers are gathering in brussels to discuss the next move with russia. netflix adding 1.7 million subscriber as earnings more than double. and chipotle is sizzling with better than expected same-store sales. listen, it really is all about geopolitics. the eu foreign ministers are meeting in brussels today with fresh sanctions on russia on the table. the lithuanian and the latvian foreign ministers both tell cnbc they're seeking a arms embargo on russia. the foreign secretary says he clear signal needs to be sent to russia and that the eu needs to go further. >> t-64 in downtsk yesterday.

modernized 64 on the stroets of donetsk. you don't buy them t local grocery store. they're coming from increasing numbers across the border in spite of our commitment, in spite of our demands. >> and that was the swedish foreign minister there saying he is now questioning how essentially modern russian tanks have arrived in eastern ukraine. let's talk to jim maceda who is in moscow and has been following the developments very closely. jim, we're kind of trying to figure out what would come out of today, what's the next move both for eu leaders and what's the next move for putin. what can he do, also, without losing faith as a political leader? >> hi, louisa. that's right. the pressure on putin is clearly mounting, even though it's unclear to me what has accomplished today at the eu summit. i think if they're trying to speed up those sanctions, those that were agreed to already about a week ago. but i don't see anything on the

horizon yet that would smack of an exponential leap in terms of the strength, the sectors, the breadth of those sanctions. but for putin, just the potential for sanctions is going to put pressure on him. you have the growing strength of a u.s.-led intelligence case against putin. the obama administration, putin faces a dilemma. if he decides to double down on ukraine and ignore the international community and pumping up those rebels, he might be facing tough sanctions, an arms embargo, as well. certainly this country could become more isolated and like a pariah state. on the other hand, if he gives into international pressure, cuts ties with the rebels, he's going to lose faith, look extremely weak and deit intoed until the eyes of ethnic russians throughout this region,

especially in crimea and even here at home. typically, putin now seems to be looking for a middle way, pushing for a cease-fire to make some breathing room, accommodating the rest, as well. we saw yesterday that the first half we could probably urge the rebels to cooperate. that might help, but the bottom line is, putin watchers are telling us putin just can't cut those ties with the rebels. it's not in his dna and that might be his undoing. >> jim, thank you very much for that. elsewhere, billionaire hedge fund manager bill ackman is promising to expose major fraud at herbalife in a presentation he is calling the most important

of his career. seem seema mody is at headquarters. >> the long running battle between bill ackman and herbalife rages on. ackman says he plans to expose incredible fraud. he's making a presentation in new york at 9:15 a.m. eastern time. so about less than four hours from now. ackman says he'll unveil the latest investigation intoer herbalife. ackman appeared on cnbc's first money halftime show. he says he has internal documents from employee toes make his case. >> the company is clearly panicking. and what i've heard from people in the media world is they are

quote/unquote freak.. the fraud is in the way they if you fundamentally operate. >> ackman has conducted his high profile campaign against herbalife since december 2012 when he revealed a more than $1 billion short against the stock. he has long alleged the company is running a pyramid scheme through the way it pays its independent network of salespeople. ackman's claims prompted investigations by the s.e.c., federal trade commission, fbi and two state attorneys general. herbalife has responded monday on its twitter account saying it's confident in the integrity of its marketing model. herbalife stock 11% on monday and is down about 14% since ackman anoins ed.

so specter ba life to be a stock in focus on wall street today. lisa. >> seema, good seeing you. coming up next, apple posting third quarter numbers. later will investors have the appetite? we'll preview the tech giant's earnings in just a couple of minutes.

hi, everybody. welcome back. ma ris sa mayer is pushing yahoo! further into mobile. the company is buying flurry for more than $200 million. it helps marketers figure out

which ads resinate most with iphones and android users. now, apple has reportedly asked suppliers to produce up to 80 million large screen iphones by the enof the year. the iphone 6 is expected to come with a 4.7 or 5.5 inch screen. appearing releases third quarter results after the closing bell today. let's talk about what we can expect. scott kessler, senior equity analyst at s&p capital iq. scott, good to see you. what are your specations for what we'll hear from apple? >> well, louisa, you laid out the expectation toes large extent. our forecasts for quarterly earnings is $1.18. like the street, we also see around $38 billion in revenues. and to be frank, while there's

no question that folks are very interested in what apple delivers for the june quarter, the reality is that people are buying and holding the stock at this point because they're excited about what they see happening in the back half of this calendar year. >> which is what? >> well, obviously, you alluded to the "wall street journal" article indicating that apple is preparing larger screen size iphone 6s. in addition to that, i think a lot of folks are very excited about the prospects for an iwatch. then you have others indicating that some type of payments offering is pending. then, of course, i think people are very interested to hear about what happens once apple completes the abscission of beats music. so i think there's a lot of excitement around just what's in the pipeline, what's going to become available really before

this holiday shopping season. to be frank, we think a lot of that good news and expectations are already in this stock. and if there is any level of disappointment, we could see a pullback because the stock has appreciated. we think more than 15% year-to-date. importantly, over 50% over the last year. notably outperforming major indices. >> given, though, the hopes for the second half of the year, will you be buying apple now? >> so the short answer is no. we have a hold opinion on the stock. truth be told, we were recommending shares of apple for about five years as a strong buy or a buy up until the end of may. basically, our view at this point is that the expectations have gotten ahead of reality at this stage. >> scott, good seeing you. have a great day. we'll talk soon again. that's it for today's show. i'll see you on closing bell a

bit later on this afternoon. but thank you for watching "worldwide exchange" and we'll leave but a shot of the u.s. futures. see you later.

good morning and welcome to "squawk box." quarterly reports are all over the place today. maybe the heaviest so far with 20% of the dow. there's six dow components here. i came up with that. 20% of the dow set to post quarterly results before the opening bell. so earnings to the economy, a key read on inflation. also set to hit the tape this morning, in geopolitical news continuing, so much happening. european leaders are meeting in brussels to discuss further sanctions in brussels. it's tuesday, july 22nd, 2014.

summer is flying by. back to school commercials already. that's rough. "squawk box" begins right now. good morning. welcome to "squawk box" right here on cnbc. i'm andrew ross sorkin along with joe kernen who is just getting into the picture there for a second. michelle caruso cabrera is joining us. becky is enjoying some time off today. earnings season hitting feefer pitch today. we're going to hear from a lot of people starting with dupont, then we have verizon, travelers, coca-cola, other earnings include lockheed martin, kim ler by clark, hardly david son and comcast. we're going to hear from apple, microsoft and electronic arts after the bell. that's what's going on in