welcome to "worldwide exchange." i'm julia chatterley and these are your headlines. earnings set the tone in europe. unilever's ceo plames a withdraw of funds from the emerging market. >> it's an enormous emerging markets and that has put a dent on consumption. >> better news for the nordic phone. nokia's second quarter profits beat expectations.

>> this economy is now gradually turning the corner. dp dp, as you mentioned, is picking up. house prices are moving in the right direction. >> a step up in sanctions, the eu considered banning europeans compared to seeing any new debt or stocks issued by russia's largest bank. and the federal aviation authority lifts its ban on flights to tel aviv as secretary of state john kerry arrive necessary cairo to push for a peace settlement. a warm welcome to today's "worldwide exchange." we've had pmis out in germany.

we've got the composite pmi numbers coming through. july, 54 is the level of the composite eurozone pmi. the manufacturing pmi coming in at 51.9 for july. the forecast there, 51.7. so a slight pick up in the manufacturing numbers, but the service is much stronger again for july, coming in at 54.4 versus 52.7. so that feeds into what we've got for the data in germany and france. those appear to be divergent further in the manufacturing sector in the euro. we've got germany's flash coming in at 52.9 in july. that marks 15 straight gains in the sector. a flash pmi coming in at 47.6 versus the forecast of 48.1. let's bring in peter dixon. peter, i want to pick up on the services daddy that we saw out of france this morning,

significantly stronger than expected. it ties in with some of the national surveys we see which seems to be better than the pmi figures. what are your thoughts here? >> to a large extent, the markets have been looking at those numbers. friday's economy is doing okay, but it's not enough. and i think realistically, we want to see more around. even though their services are pulling up the average figures. >> absolutely. let's square this back now to what we're speccing for growth in the second quarter. is this still tied with a 0.3% growth quarter on quarter for the second quarter of this year?

>> yeah, i think it probably does. obviously we've got significant differences. we -- the spanish numbers, i think, over the course of recent months have look okay. france is probably a little disappointed. germany is not going to do particularly well in the second quarter. so all in all, a 1.3% growth rate in the second quarter. it's okay. i think we'll be looking for strength growth in the second half of the year to cement the view the eurozone recovery is on a slightly stronger footing. we'll take it after the head one hads we've faced in the recent months. >> i guess if we look at the technicals, the survey period takes us through the 20th of july. i guess that wouldn't have fed into those numbers at all. what do you expect as that data feeds through or the event feeds through in the data? it's impacted the german data as

far as the ukraine/russia tensions. >> oh, yeah. i think it's had an effect in the margins. and don't forget that the eu has yet to inform any sanctions on russia. so in that sense, it's not going to significantly affect the numbers for the next four weeks. only if we were to see heightened tensions and a significant impact on trade flows would be be more concerned. but i think to a large degree, we would continue to see the eurozone economy making modest progress. obviously, we are mooindful of the headwinds around germany. >> and as far as the futures are concerned, we will have to wait for at least the next 12 hours to see what the foreign ministers meeting brings. peter, thanks for that, pete ir dixon. earnings out of europe this

morning, nokia shares jumping up, it beat expectations with secretary quarter profits. the company faces its full year outlook has improved. nokia, in fact, right over here. so i'll shift so you can look at the right price here, up 7.3%. the majority of its sales coming from its network unit. right now, up 7.3%. unilever says its second quarter sales were dented. the group's underlying sales were at 3.8% in the quarter. speaking on cnbc, the ceo said foreign exchange effects are weighing on revenues. >> we've seen an enormous adjustment of currencies. as you know, at nearly 60% of the business and that has put a dent on consumption. 4.5% gains after their second quarter results beat

forecasts. the danish lender raised its full year outlook due to cost cuts and lower write-downs from bad loans. we talked to the cfo about how he sees denmark's economy progressing. >> we find and hope very much the day's economy is turning the corner. house prices are moving in the right direction. spending is moving in the right direction. >> despite the company missing expectations for its first half net profit hit by a write-down in its diagnostic business. the ceo is fighting to overcome sluggish spending. >> tight pressure continues. government returned enormous pressure. however, the company is very well positioned due to the innovative nature of our portfolio. >> stay tuned. we'll be crossing live to for

more of carolyip's interview with the ceo of roach. we'll go to her in a few minutes' time. but let's have a look at the european market session this morning. under a bit of pressure, 0.2% for the uk market, 0.25% for the german market, despite significant better pmi we got for germany right now. we did see the russian markets this morning down shy of 1%, pulling that back in the last half an hour. relatively unchanged, too. we'll continue to watch that. we've got the foreign ministers meeting later on today to discuss potentially sanctions. and we talked about potentially stopping european debt and stock in some of the largest banks, too. we'll keep an eye on that market for you, in particular. seeing the dollar losing a bit of ground it's gained in the last session. 1.3470. did see a bit of a lift after we

got those pmi numbers this morning. something reacting as far as those data is concerned. aussie/dollar reacting from the hsbc pmi we got in china this morning. it rose to 52. better on the export numbers. also on the employment. we're talking about that, though, shortly, too. right now, 1.70342 for sterling. we've got retail sales out in around 30 minutes time. we'll keep an eye on that level there, in particular. i did just mention the chinese data, too. eunice is in beijing. eunice, i just wonder whether we should have similar concerns as we've had in europe here that it comes tt expense of reform. >> it does come at the expense of reform. that's what a lot of people have been discussing today. however, at the outset, the numbers look quite good. the best factory activity that

china has seen in 18 months. just in case you want to know the number for itself, hsbc's flash pmi came in at 52 versus 57 for june. there's a lot of strength all around. there were new orders for home as well as overseas. very strong. we saw that that basically means, like julia was talking about, that the many stimulus measures here in china have been working in and suggest a lot of people overseas and different companies are buying more chinese goods. the other component that people are watching was the inventory levels. inventory levels are dropping which bodes well for the future. also the employment component improved and that is a very important component for the government here. the leadership makes a lot of decisions based on how many jobs chinese people have here. now, overall, this sets the stage nicely for the third quarter as well as going into the latter part of the year. most people expect the government to continue with this

accommodative stance and continue with its targeted measures to help stimulate the economy. however, julia, as you've mentioned, there is a lot of concern that this accommodative stance and that this focus on growth comes -- it will further delay a lot of the reform efforts of the government. the government had unveiled a very comprehensive reform agenda. so far, many of those reforms have been limited. >> thanks, eunice. now, at the u is poised to ramp up sanctions against the kremlin. the latest proposal will ban europeans from buying debt or stocks in russia's largest banks. they will bar russian banks from lifting -- preventing them from using in lobbed or other eu stock markets to raise funds for non-europeans. get lost, that's the facebook message from israel's justice minister in response to comments from the u.n. but the nation may be committing war crimes in gaza. the death toll in the region continues to spiral with nearly

700 people, mostly civilians, now confirmed killed in israel's bombardment of the territory. another three israeli soldiers have also died. u.s. secretary of state john kerry says some progress has been made in his push for a troous between israel and hamas. we're joined now from tel aviv. notice right now we're not hearing anything from the israelis about a potential cease-fire and we're not hearing anything from hamas, either, beyond continued rocket bombardment. >> that's right. the israeli prime minister scheduled to get the talks soon, so we may hear more then. that will be bringing that to you as we join you later on. but the israelis are saying there is real progress towards some kind of a cease-fire. they haven't said whether they would set it or not. but the deal appears to be taking shape with the five-day cease-fire during which hamas and israel and all the people trying bring them together which, of course, include

secretary of state john kerry, the united nations secretary general, the palestinian president mahmoud abbas, all kinds of groups and all kinds of countries getting involved. there does seem to be some sort of real progress. but the issue that remains for both hamas and israel to stand in the way of that, israel is determined, they say both the military and the government, to find and destroy all of the tunnels that hamas has built. they say so far they've found 31 tunnels and destroyed nine of them. if there is a cease-fire, israel hopes it will be able to continue in place to work on that issue. israel's condition for a longer cease-fire is the demill tarzation of gaza. hamas has said there's not a full chance of that. the israelis are saying there's no real chance of that. so the two sides are still wide and far apart. meanwhile, the fighting is

getting -- it's just intensifying all the time. although i must say, there have been far fewer rockets fired at israel since midnight. that is far below the rate at which they've been firing for the last few days. israel is still managing to make brog. the number of deaths is now about 725. >> hadley gamble joins us in the studio. hadley, there's a get lost from the justice minister on facebook regarding the war crimes in gaza. does that tell you about sentiment as far as the people are concerned in israel and the strength or public perception of what the israeli government is in right now? >> she's seen as more of a moderate figure in israeli

politics. now she's been an opposition leader in the past. she's worked with conservative governments consistently in the israeli political system. but she's also, you know, an advocate for a two-state solution. so she's been negotiating with the palestinians, as well. she's known as, you know, a modera moderate, but she's also known as a nationalist. despite how moderate these politicians are, when it comes to the security of the state and the people, they're all nationalists, as well. >> let's bring it back to the faa. there was some suggestion that it was political motivation in preventing usair flights being made into tel aviv right now. but if i look at the proximity of what happens with the malaysian airlines flight, you have to wonder if you'd be more cautious than perhaps you would have been at a different time. >> absolute lit. and in terms of the logistics and the weapons capability, obviously, hamas is firing

rockets and in no way like what we saw in east ukraine. they're nothing like the surface to air missile that has a range of 72,000 feet. it's highly sophisticated weaponry. obviously what's happening in israel and gaza right now is hitting the tourism industry. so as far as bringing people back to the country, you'll see some hesitantsy on the part of the international community to go back to the area. this would give you pause, i would think. >> i want to bring it back to what martin was saying about progress as far as the cease-fire is concerned. yet in the next breath he said

if the israelis want to see a complete disarmament between israel and hamas, it's not going to happen. hamas want the israelis to end the blockade, at the very least. i don't see how we circle the square or square the circle, as you -- >> one of the latest comments we've heard from one of the ministers in israel is even though the cease-fire is something they really want, at the same points, that cease-fire would have nothing to do with whether or not they would pull back the idea. the idea's whole goal in gaza right now is they want to take care of the tunnels. they said they found all these elaborate tunnel systems and they were much more sophisticated than they previously thought. even if there is a cease-fire, i don't see the idea of pulling oust of gaza anytime soon. >> we have had breaking news from norway. the norwegian police are saying they've received information of plans of a terror attack in norway, according to the police

security service. they're saying the threat is linked with persons with links to syria. they're working intensively to assess the situation. they say thee received a specific threat is and are taking measures to handle it right now and it's unspecific with regard to the targets right now. i would tie it back loosely to what we've been talking about now for the last four weeks, the threat, the situation in iraq with isis. we know there's tensions in syria. we've been talking about the spillover effects. >> and the whole threat to the western economy, the western world, is that so many of the people that have been in syria and have been traveling to that region, you know, whether they be pro syrian or whether they be with isis or any of these rebel

groups is the fact that many of them hold western passports and many of them are going to at some point come home. the reason this is tied to the palestinian issue, we've seen the militancy of late coming from islamists and the problem is that now with the ability to come back to the west, we have even seen in the uk that the government has said we don't have the capability to watch all of the ip roads. >> they don't know the targets, they don't necessarily know the threat, they've had information that they have to act on. it's tough, isn't it? >> right. >> we'll get back to the israeli story. benjamin netanyahu is delivering a foreign statement. they're just about to speak so we'll continue to keep you posted of what comments get made there and any further information we get as far as a potential cease-fire is

concerned. still to come on the show, roche confirms its outlook. we hear more from the ceo right after the break. stay with us. ♪ ♪ developers are all about speeds and feeds. it's all about latency. it's all about how fast does it run. i often sit with enterprises who ask me about how mission critical and how's the performance of the cloud. and i tell them, if you can make gamers happy, you can make anybody happy. speed is made with the ibm cloud. the ibm cloud is the cloud for business.

the norwegian police are saying related to an islamic militant group tied to syria that may be planning an attack in norway. they're saying it's unspecific with regard to targets. they're working with security services abroad and working intensively to try and assess the situation, understand exactly what the threat is right now. they're taking measures to handle potential specific threats and that the whole country right now is on alert. again, they're linking it right now to persons closely tied to syria and militant groups, islamic militant groups. again, we'll continue to keep you updated as we get further developments on that story. moving on to roche, missing expectations in its first half

profits. carolin, investors right now don't seem to be too worried. up 1.3% on the stock right now. what are they seeing? >> they're not worried at all. basically, they like the fact that the breast cancer franchise, that has outperformed in the first half of the year. according to their research, this is the franchise that is most underappreciated by investors right now. yes, there was a swiss franc impact. there was that down in diagnostics, but that isn't too much of a worry for investors right now. the company did confirm its full year guidance for the year so that simply is reassuring. when i spoke to the ceo of the company, i wanted to get his take on russia, obviously making the headlines every single day now. and in russia, it counts for less than 2% of total group sales. not a huge chunk of sales, not

at all, in fact, and he was pretty unphased of anywhere level three sanctions. take a listen. >> russia is an important market from us, but if you look at it for a normal company perspective, it accounts for less than 2% of its total sales. >> you don't think that would be a huge factor figure or result? >> again, from a numbers point of view, it is less relevant, but it is an important market. and we are actually confident that the demand for our life-saving medicines will continue, irrespective of -- back in 2009. i'm wondering why aren't you more active?

do you think the variations are too high or are you just not finding the right company out there? >> the letter is the case. i'm very open for externalzation, the right opportunities, the price is right, then we would seize those opportunities. but getting set for a number of targeted acquisitions earlier this year and that we continue to be -- targeted investments into products which commitment of existing franchise. >> so if the right company does come your way and you've got the financial firepower to buy a big company, you would be happy to pay a rel ofly high price? >> if it creates revenue for our shareholders. >> interesting comments there from the ceo of roche. essentially, it's willing to buy it. why would they, julia?

roche has a favorable tax position. they're here in switzerland. they're not a u.s. company that needs to engage in tax inversions. >> it's a great point. still to come, it's sanctions show youp. we analyze the measure as one russian minister calls current sanctions on the company peanuts. stay with us.

welcome back to "worldwide exchange." here are your headlines. earnings set the tone in europe. russia's first half sales slide while unilever's ceo claims a withdraw of funds from emerging markets. >> it's an enormous adjustment of currency. maybe 6% of the business. and that has put a dent on consumption. >> the data shows the eurozone private sector was at the highest rate in three months in july. it surges to a three-year high. a step up in sanctions, the eu roshtedly considers banning europeans from focusing any new debt or stock issued by russia's largest bank. and breaking news in the last hour, norway warned it's

investigationing threats an islamic militant group tied to syria could be planning a terror attack within days. further data from the uk, retail sales coming in at 4.5% on year stronger quarter since the first quarter of 2004. they were forecast on the month down 0.1%. they're coming in at 0.1% month on month. so stromger than expected relative on the month and on the year. the strongest calendar quarter since the fourth quarter of 2004. less bullish than we were expecting, but interesting sterling losing a bit of ground, falling to a low of 7010 after those numbers there.

he talked about the 12% rise in the level of sterling right now. and he talked about weak demand from export partners. citi pointed out that was the first time in a year where he tied those two things together. so a broad disappointment on the minutes yesterday and s.e.a.l. seeing a bit of sterling weakness here. about 10 or 15 memberships ago, the broader markets were is in the red. but now moving into positive territory. tech earnings today, nokia is one i would point out. let's have a look at the foreign exchange markets, too.

the dollar giving back a bit of ground it's gathered over the last few days. 1.7010 the level right now on sterling/dollar. according to the financial times, the latest proposal will stop russia debt in banks. it would bar russian banks from new issues but moscow's trade minutester dismissed the further sanctions since they were peanuts for what the company faced dearth difficult times. joining us from a zurich based fi firm, ron, thank you so much for joining us.

you've obviously done risk assessments for clients on the situation in russia. would you describe the impact of peanuts? >> i think it's a more philosophical statement they're making. i think top sanctions are necessary, especially in the banking sector. mr. putin is basically a bully who has been challenging the world powers, not only in ukraine, but in syria and other places. he is a determined man. the only way the west can stop him is not only tougher sanctions, but stronger powers. >> does he think he is doing what's best for the russian people? >> it's like ride ago tiger. he has to stay in power and he's doing everything he possibly can

to gain popularity. right now, he's in a difficult situation. the hard line is within russia pushing him to take stronger actions. he also knows it's not an easy thing to do. >> when i've had conversations with european leaders in brussels, they talked about the prsh your right now that the olligarchs are sensing as far a pressure. are you hearing similar as far as the oligarch is concerned, is putin coming under pressure at this moment regarding his anxiouses? >> i think when the initial sanctions were discussed, he did come under pressure. but i don't think there's any oligarch in russia who dares speak against him. >> how far are they if iran starts sanctions in russia? >> i think the businesses are but, again -- >> and putin? >> putin, i don't believe that the west has been met to go into strong sections. so far, the administration only

made passette threats. >> you were talking about his popularity, what we've seen, his popularity now above 80%. i've heard talks that he's using this to crack down on freedoms of expression as far as swearing in movies are concerned. are you hearing similar things? >> yes, we are. people within russia are afraid to travel outside. people are generally concerned and businesses in particular. >> if that's as a result of what putin is doing or a result of what the west's perception -- >> the sanctions from the west as well as what putin is doing internetly. >> so you don't just obviously speak to corporates, you do also converse with governments, i assume, back in 2012, i believe, there were reports that your company had been hired to improve russia's perception internationally. is that right? >> that is not correct. >> it is not correct.

okay. i just wanted to check on that point. if you were hired to improve russia's -- interfacially, how would you go about doing it? >> perception is one thing, but i don't believe anybody can improve russia's reputation unless they take tangible actions. how do you clean up the actions they have taken so far and the downing of mh-17 is a classic example. russia supported the separatists which took down the lives of 299 innocent victims. >> russia can be directly tied to those events? >> yes, absolutely. and every intelligence points in that direction. >> why has the u.s. in particular backed off in the last 48 hours? >> if you look at the obama administration's policies so far, they have not taken any tangible action anywhere. . >> so if you look at the situation right now between

israel and gaza, if you look at the situation we have in russia, you're saying this is a foreign policy in the u.s. that's failing. jean kerry seems to be making his daily visits to different countries right now suggesting he's pulling together a cease-fire depending on where he is. >> well, they have failed a long time ago. >> what makes vladimir putin cut ties with the separatists? is there anything that could make him do that? >> we can at least try. i think the tougher sanctions, not only the russian energy companies, the financial sector and the nato forces within the nato countries. >> you're basically saying everything that we are incapable of doing? >> well, we have to build up the capability and stand up to the mettle. >> great to have you on, ron. now, the world's manufacturing engine appears to be once again running in top gear. hsbc's flash china pmi rose to an 18-month high of 52 in july

as it looks like china's economy is finally reacting to those government stimulus measures. they jumped from the report as of the australian dollar which hit a three-week high on prospects of strong exports in china. raising rates to a five-year high, the rbnz raises rates to 3.5%. the central bank says it's time now to pause and assess the impact of its recent tightening steps before taking any other action. it will -- its hands until disease before revealing rate rises. but it was the governor's comments about the kiwi/dollar. he said it was at an unjustified level. we were expecting him to leap on currently a little bit pep obviously surprised foreign exchange traders today. the cross down 1.5%. now, back to australia and

the major banks have cut mortgage rates as the central bank is likely to keep the benchmark rate at a record low of 275%. the lowest cost from the five had year fixed rate is just under 5%. nab quickly followed the move as you can see trading in that session higher by around 0.5% for the commonwealth bank, national bank higher by 0.2%. and you see westpac there higher by 0.12%, too. china's latest restaurant probe has china investigates allegations of a supply ier yum brands has cut all ties with the supplier. it appears only one plant is at fault and it's moving supplies to the ones where health safety

is reportedly up to standards. japanese exports unexpectedly fell for the month of june marking two full years of continuous trade deficits. the nikkei story is live from tokyo. tell us more. yes, hi, julia. figures released by the finance mip sister show june and other resources over 8% involve.an $8 billion trade deficit, which is the largest for the month of june. shipments for asia and the u.s. had declined. 24 months of continued trade deficit is the longest on comparable record. meanwhile, adding up the trade figures during the first six months of this year resulted in a record $75 billion deficit rising nearly 60% from the year before. exports grew a little over 3% due to overseas demand for car parts and lcd components, but imports are up an overwhelming

10% with strong demand for fuels and cars. concerns are growing. the chief cabinet said today that imports have clearly been given a boost due to last-minute demand in april and he was hopeful that the u.s. and other overseas markets are now showing signs of a steady recovery which should help japanese exports pick up in the coming months. that's all from the nikkei. back to you, julia. jonathan mead a request last week to borrow up to $1 billion abroad. in a bid to ease fiscal policy. yesterday, louisa spoke to the deputy governor and the ongoing violence with monetary policymakers and are cautious. no, there is no further right of link, i would say, between monetary policy and the securities situation. the securities situation is one of several factors.

one could take into consideration looking into the future. but it's not an overriding concern of monetary policy technically speaking. because monetary policy responds to things like inflation and so on. now, let me tell you what the link is. in some parts of the month, the securities situation has affected production. and that has led to some increase in food prices. so that's the link. but it's not the most important on policy deficiencies. because inflation jumped 8.2% recently. they called it the agriculture bedrock of nigeria. how bad could it get with regards to inflation in particular food inflation if we continue to see unrest? >> well, i mean, it could get bad. but we don't expect that it will

get worse. simply because the security and the government are doing some very important things to contain the boko haram situation. terrorists are always a desk thing to fight. it took the united states ten years to find osama bin laden and that's big power with strong and sophisticated military facility. so i think the boko haram thing, while it's impossible, i don't think it's the main story. i think it's a subplot. still to come on the show, easyjet has sales growth. what's the story with the sales price? we get the story right after the break.

into welcome back to "worldwide exchange." the norwegian authorities are saying they have received a terror attack. they're working with the

security services abroad. this is the current situation right now in norway. joining us on the phone from oslo is the managing editor at the nordic page. thank you so much for joining us. what are the nor weej i can't understandan security police saying at this stage about the threat? >> i would just say in the morning here, woke up with a press meeting of intelligence service. and actually, as you just expressed, to know what goes or would is behind the terrorist threat, but they said they have received specific threats about an imminent attack in norway. they don't know exactly the time or the terrorists the attack will be before christmas so so

far they set they're -- on who is wind and what is the specific area the terrorist attack will be carried out. they don't have any rivalry information so far. but the security level in norway has been increased and as you may have known, norwegian police are allowed to carry on, but now in many areas, you can see police were carrying guns and the security level. transportation have been increased and you can see around the cup and the city, especially in the capital. >> what about security measures

as far as the airports are concerned and trains? >> right. it is in norway. so so far the security measures are officially at borders and they are controlling the borders with the norwegian army. and also the traffic is normal as far as the information from the administration. but still, the norwegian security service has reported that they have -- both their civilian and foreign police

officers to train and transportation. you can see a lot of that in oslo. >> and i guess it's a new threat, too, so we have to wait and see. we also have breaking news out of the ecb this morning, too. they're saying they've had a breach of security on the public website, e-mail addresses, contact data has been stolen from the public website. but the data is separate from any internal systems. so right now, only e-mail addresses and contact details have been stolen from the website. we'll bring you any update on that as we get it. pretax profits for easyjet ran between $540 million pounds and 570 million pounds. this comes as ryanair were

forced to pay back to france after regulators said the french support gave the airline an unfair advantage. john is joining us to discuss this. let's start with the easyjet numbers. deutsche bank was saying that it was mispriced, even if they missed guidance here. it's harder -- they're not used to hearing signs of weakness. >> and, of course, the company is guiding a strongly increased possibilities. it's just not up to the levels as the figures are suggesting. that may not be the most sufficient way of using them.

over time, they will find the best way to squeeze value out of it in that very congested airport. but at the same time, they're facing more competition, for example, from the nor weekan shuttle. having is some effect on yields, but it's in a very strong position to influence how that market plays out. they've invested in the italian markets. there's a bit of a skirmish that is playing out and seeing weakness in air italia. but easyjet is growing. i think an important point is there again is over the next five years, they're structuring

their deal with airbus and they can take it out as part of that deal. we also have to remember there are a lot of legacy carriers around europe, not only air italian but the scandinavian airlines, but in a weak position and even some of the strong legacy groups are struggling with losses on a short capacity and are cutting that back. easy jet plans to jump in and take that space in a profitable way. >> i'd like to ask you now about the security concerns about mh- mh-17, security in those areas, the talks of aviation authorities. what's your view now of the aviation authorities? does more work need to be done? >> it brought out the questions, leading industry players.

we've said for years, we believe the system worked. it hasn't been a system, it's been a composite of different systems of data, regulatory authorities, airlines, that has served quite well until what we saw happen last week. some leaders such as -- say the industry needs to sit down, come up with a consensus view and look at regulatory bodies such as ako which is part of the u.n. to become more involved and to use the airline spokesperson body globally to do more, as well. >> and what about what happened as far as israel and gaza is concerned and the faa there stopping flights going into tel aviv? there were talks that that had a political element, as well. given what we have seen, would you put that down to politics? >> it's difficult to say. we heard comments a couple of weeks ago at the tel aviv airport. we got this directive from the

faa. europe followed the leave. british airways, which was in many ways commended for following different routes around ukraine has continued to operate. of course, they get the same information whatever carriers receive, they use their information in the ground. but we would still have to move this position where we have as good intelligence as possible. your other stories at norway indicate it's a movable feast. there is no perfect answer. but it's just a key requirement to do better than has actually been done so far to work across the border with wider range of reliable information as consistently as possible. and it does come down to a pilot choice in certain cases? >> not really. it has the immediate response for the flight, b but the route that the flight will plan to

take is determined by the operational parts of the business backed up by their security and risk assessment. and yes, on the day, we can make a decision to reroute or divert that flight. but he was simply taking guidance from the people on the ground. >> john, nice to chat with us. still to come on the show, tech continues to dominate the s&p and facebook areas after hours. if you're not in tech, why not? we ask our next guest just that after this break. stay with us.

welcome to "worldwide exchange." i'm julia chatterley. these are your headlines. step up in sanctions, the eu reportedly considers banning europeans from purchasing any new debt or stock issued by russia's largest bank. norway warned it's investigating threats in islamic militant groups. syria could be plan ago terrorist attack within days. facebook shares hit a record high. the social media giant continues to make money with mobile apps. earnings set the tone in

europe. roche's fist half figures slide while unilever blames a withdraw of funds from ee memorying markets. >> it's an enormous adjustment of currencurrencies. that has put a dent on consumption. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. facebook surged some 5% in after hours trading after second quarter profits more than doubled beating forecasts. julia boorstin has the details. ceo mark zuckerberg calling it a good quarter largely driven by mobile. up from 41% a year ago.

>> one thing that's exciting is that there's still so much room to grow. on average, people in the u.s. -- sorry, people on facebook in the u.s. spend around 40 minutes each day using our service, including about one in five minutes on mobile. this is more than any other app by far, but overall, people in the u.s. spend about nine hours per day engaging with digital media engaging with tvs, phones and computers. >> mark zuckerberg spoke about the potential for facebook's apps, there are about a billion searches a day and much more on all of the posts on facebook. cheryl sandburg telling me facebook now has 1.5 million active advertisers up from 1 is million last june with the total ad growth and mobile growth strong across the world.. she spoke about the promise in facebook's acquisition of live rails to target ads both on and off of facebook. she didn't see the details, but she said testing of instagram ads as well as premium video

apps are off to a strong start. >> video on facebook helps brands by combining traditional reach campaigns with their unparallel targeted abilities. >> sandberg said it about making it easier to buy rather than selling directly. they say payments companies as partners, not as rivals. back over to you. >> we will leave the tech sector there for just a moment. we are waiting for comments from officials regarding the eu and sanctions. the eu could move on sanctions to specific sectors on the russia economy by the end of july. they're saying that there's a time limit on how long those new russian sanctions could last, according to eu sources. this coming from the german government right now, which is very different from what we were

hearing on tuesday. now we're talking it seems about specific sectors, so this is being attributed to eu sectors and the german government right now. we have to wait and see the latest and the announcements that come from that foreign minister's meeting. we're talking about facebook there. let's go back to it. should facebook calm investors? "squawk box" earlier quizzed najia herona about netflix. he says he's not currently taking a position on the stock. >> the valuation is -- has always been priced to take the lead. but it's overvalued. when it's over 25 times pe, forget looking at the pe because it can go to usually 11 00 or 11 00 times higher before it goes

back to rationlty. >> carl, thank you for joining us. the tech sector now, 19% weighting of the s&p 500. but you similarly don't invest in tech. i just wondered if you followed pedro's views there about why you stay away from this sector in particular. >> yeah. you mentioned tech being 19% of the s&p 500. that historically is no low number, by any means. at the same time, when tech was historically cheap here in the united states, for example, 1990, tech was at 6% at that want. there were some savvy buyers out there buying up names like ol in the early '90s when no one wanted to touch them. the problem is, especially taking the value world we sit in, we see a lot of our peers want to go own tech. there's cash with a lot of these especially old tech companies.

the driver of their business is not here in the united states. abroad. the problem with investors, they could be wildly successful. at the same time, the revenues are coming from abroad. getting trapped in dub lip. and the history of tech doing anything for us as shareholders has been poor at best. there's been a lot of talk about them bringing money back to the u.s. to a better tack rate. that happened in '05 with president obama. no money was repatrioted. though. the only repatriation was in ebay. it's the only case of humility in tech tied to cash flows. but we have trouble seeing, not only as you mentioned earlier where they're going to be in 20 years, but secondly where they're going to be over say the next five years.

from a global growth perspective, global growth is not the driver as where there's good things going on here in the u.s. it looks like the economics of western europe are picking up and starting to look more attractive. but those are not bailiwicks that really help those businesses do great. >> i get the idea that you want to be leveraged to u.s. growth and not necessarily where else revenues might be generated from, but what about valuations here? as you quite rightly said, we've seen this portion of tech as far as the s&p is concerned significantly smaller. do you agree with janet yellen that there is pockets of ov overvaluation here? >> well, yes, we view it to be a pretty bifurcated issue. it's cool technology. i am part of the facebook generation. it's fantastic. they innovate every single day. it's sexy.

the problem is there's just too much competition. and the way the business is priced is not based on the economics of the earnings or the free cash flow. in a world today like we have where revenue is scarce, people are willing to pay anything they can get their hands on for top line growth. the problem is, as an equity owner and want to go be the owner of a business on behalf of our clients, we have no feel for that. we can only understand what the free cash flow of these businesses are. free cash flow is scarce. amazon has been a very successful company. jeff bezos is a great merchandiser.

amazon creates very little cash flow in earnings. >> stay with us right now. but first, i want to update viewers on some further breaking news. algerian aviation authorities are saying they've lost contact with an air algeria aircraft, according to aps state news. we don't have any further details on that. again, i'll bring you any further comments we hear on that right now. but a lot of nervousness as far as the airlines are concerned, particularly off the back of mh-17. perhaps telling us more information that we might normally have had, but right now, algerian aviation authorities say they've lost contact with an air algeria plane. if you're just tuning in, thanks for joining us here on "worldwide exchange." let's take a look at how the markets are faring ahead of the u.s. equities. relatively unchanged from the

markets yesterday. the tech sector right now at the highest level since november 2000. 19% weighting. we'll be talking about those numbers in a few minutes' time right now. we've got jobless claims and new home sales data and a whole plethora of earnings, too. let's have a look at the european markets. we started out in the red yesterday. nokia adding to those gains right now. the german markets higher by 0.4% and 0.6% higher right now. the micex was higher earlier on in the session. the russian markets right now lower by 0.2%. we just had those comments from brussels, eu sources suggesting the german government would be willing to see sectoral sangs on

russia, but they want to have them for a fixed amount of time. we'll continue to watch that market and any announcements that come out. a quick look at the foreign exchange markets this morning, would he have stronger composite pmis from the eurozone. sterling under a bit of pressure, 1.70 right now. coming in slightly stronger than expected, 0.1% rather than negative 0.1%. get lost, that's the facebook message from israel's justice minister in response to comments by the u.n. that the nation may be committing war crimes in gaza. the death toll continues with more than 700 killed now. another three israeli soldiers have died. u.s. secretary of state john

kerry says some progress has been made in his push for a truce between israel and hamas. now, the u.s. has sold its first ultra light oil to south korea and japan in at least 40 years. this sale is the first since the easing of a ban on u.s. crude oil exports which has been softened as the state begins to benefit from domestic shale, oil and gas production. let's get back out to cole smeade of smeade capital management. you like many are concerned about how oil can remain so high even with some of the geopolitical news we're seeing right now. why is that? >> the average cost of a barrel of oil to price is about $50 to $55 a barrel. history of commodities is they bought them at the top of production. so that is a very tough thing for to us overcome. when you have oil at around $ 00

a barrel here the last couple of years and you have the cost almost half of that p.m. people are very excited about what's going on here in the united states, the shale and the fracking. those projects are profitable about $70 or $80 from a production standpoint. so if we get to, say, $50 a barrel, which still wouldn't be at the cost of production, those projects shut down. so in our country, states like north dakota which people are bragging because because look how strong the economy is, they boom and bust with oil is the only thing they do. this idea that oil can go through decades of being a hell hole and a nightmare is unrealistic. oil in 1981 was $40 a barrel. by the time the tech bubble was raging, no one wanted to be in the oil business.

competition ruins competence. what is going to defend these other businesses from competition? who is going to come into the market? etcetera. >> you make a great point there. we were talking in the show about the level of competition, not just as far as exporters were concerned, but how some of the big exporter are focusing on refining, too, and how russia itself is focused on this. i know it's going to be a real competition issue for some of the european companies are concerned. is this a huge concern for you, too? >> if you're putin, the reason why you can look down your nose at people is because we're at $100 an oil. russia does oil well. it's like texas. from that standpoint, if texas being the smartest group of governors in the history of man kind? no. the reality is what they do has

boomed so they can look down their nose at other states. broadly across the conversation, there's so many people involved, so many players. the politicians are all excited about it. the problem is, in the case of our economy, our economy does great when oil does horrible. as i mentioned earlier, 81 oil was $40 a barrel. 18 years later, we have a very strong economy off the back of very weak oil markets. if you want to help the average american here, which, you know, the 35,000 to $50,000 income in the states has been really the weak spot in the consumer. oil doing poorly is great thing for kind of your average american or as we like to say joe six-pack here in our backyard. >> cole, great to talk to you, managing director of smead capital resources. a time limit on how long russian sanctions could last as far as

sector sanctions were concerned. and, of course, the u.s., not necessarily in a political position. and on that note, cnbc's steve liesman has an exclusive interview with president obama later today. they'll have a hard hitting discussion on the economy on issues ranging from taxes and economic patriotism to raising the u.s. minimum wage. that's today on cnbc at 5:00 p.m. eastern. still to come on the show, the busiest week of the earnings season continues. we get the wrap-up of last night's headlines and a preview of what to watch for today. stay with us. collection is here.mer ♪ ♪

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welcome back to "worldwide exchange." germans considering separate sanctions on russia. norway on terror alert after police say the islamic group linked to syria could be planning attacks within days. and facebook soars after earnings beats expectations on mobile ad revenues. let's take you through some of

today's top stories. at&t's second quarter profit fell 17% as well as revenues fell less than expect. the company recently changed strategy offering cheaper plans and that cut into margins. at&t did add more new customers, though, than expected. shares fell 1% in after hours trade, relatively unchanged in the german market session. qualcomm's second quarter profits rose 2% pt qualcomm is benefiting from growing demand for smartphones in china. but the company says other major businesses are facing significant challenges in china and it's cutting its near term outlook for that segment. separately, reports say china's anti-trust regulator has determined qualcomm has a monopoly in the country. right now, the shares trading down shy of just 5.75% in the german markets. so significantly underperforming. right now in the last few

months, lower by 2.5%. gm report second quarter details pd today. gm is expected to benefit from strong sales of full size suvs in north america. the company may detail the cost of paying victim eps of the massive ignition switch recall. ford reports second quarter results at 6:30 a.m. eastern. the first report under new ceo mark shields. ford is forecast to earn 36 cents a share versus 45 cents a year ago. sales are expected to rise slightly to $36.2 billion. right now, gm and ford both in the german market session, 0.9% lower for gm, ford lower by 0.8%. now, we have to take a quick break. still to come on the show, the u.s. lifts its airline ban on israel as the u.n. votes to investigate war crimes again palestine and hamas calls for a

humanitarian truce. we find out all the latest details after the break. right now, a look at the heat map in europe to see how the markets are trading right now.

further developments from the breaking story as far as the norwegian police are concerned about the threats of a potential terrorist attack, the police announcing there was a plan for a terror attack in europe. norway was mentioned. so it seems norway, only one of a number of countries that are potentially linked to a person with links to syria, potentially going to carry out some form of terrorist attack in the next few days. as i mentioned previously, we'll continue to keep you updated of any further developments of that story. the death toll in gaza continues to spiral with reports up to 725 people now mostly civilians confirmed kills in israel's bombardment of the territory. another three israeli soldiers have died. u.s. secretary of state john kerry says some progress has been made in his push for a truce between israel and hamas.

hadley gamble joins us in the studio. hadl hadley, what does he mean about signs of progress? it seems as though he's the only person talking about progress. >> well, in terms of a definitive solution to this, i think we're still pretty far away. but the fact that the parties are at least dialogue is taking place is a sign of progress. i mean, at some point, hamas -- who is representing hamas here? in this is the bigger question. the leader of hamas has been dealing with the -- and you have a lot of conflicting narratives, as there always is, when you have so many players in a situation such as this. but at the same point, hamas is at least saying sure, we'll talk about a humanitarian truth. but a cease-fire isn't possible until we get the demands we wanted. and the israelis realize they're not going to go on forever and they're saying tht point that what they're doing in gaza is to deal with these tunnels, these sophisticated tunnels which are,

of course, a danger to the israelis. so they say that's what they're there for. but at the same point, even if there is a cease-fire, i don't think you're going to see the efforts withdrawing that quickly. it's not possible. >> we had a humanitarian truce for several hours a few days ago and hamas didn't abide by it. they were still firing rockets. >> that's right. so at this point, i think what you're gon going to see is a continued dialogue. john kerry is back in cairo continuing the conversation. we don't get much progress quickly. >> you said to me on monday, he's landing in the wrong country at that point. do you believe at least now he's in the right country to kind of try and organize a cease-fire here? because we still, as you pointed out, hamas is still looking for the qatarry/turk injury solution. the israelis are looking for a -- well, when it comes to the egyptians, because of that border crossing, they are going to have the deal with egypt. i think they have been invig

excavated by the fact that they have been getting so much good press in the west, not necessarily in the united states, but in the sense that in the western countries in europe, they have a better feeling about what they might actually be able to accomplish, despite this horrible death toll. i not to bring in nbc's martin fletcher who is in tel aviv, martin, i want to ask about what we've seen in the last 24 hours as far as the faa is concerned. we've seen a major flip-flop, mike bloomberg flying to the rescue to make sure those flights are opened again, essentially. but is this a bit of a conflicting narrative? you have the israeli government. for days they've been telling us israel is under attack, it's this sort of survival mentality. but isn't reopening these flights and basically saying that it's safe to fly in and out of israel a conflicting statement from the israelis? >> you know, i wouldn't say so, no. i wouldn't say it's a flip-flop.

the question preceding your question is was a ban justice phied in the first place? there's a lot of tension because of the malaysian plane getting shot down, there was one rocket that fell within about a mile of the airport where the faa told the american planes not to fly to israel. about 30 airlines said they're not flying to israel. now the faa has overthrown that. yes, there's been a flip-flop, but the question really is have they just seen since? i personally would say actually, if you look at what's been going on, when the faa introduced that ban, there was a sharp decline in rockets from gaza being fired at israel. because, of course, hamas is under some stress because of the israeli invasion. so the number of rockets was down by about half. and there are some shorter range rockets. having said that, got to point out, there was about four of five rockets fired towards the

tel aviv area this morning. but the real question, i think, is was the ban justified in the first place? and now that the faa has withdrawn the ban, guess who is getting a lot of credit locally in israel? the former mayor michael bloomberg. the local media are saying, yes, he came here. he may not have had a direct effect, but he's focused attention on the issue. there may be some truth in that, julia. >> thanks, martin fletcher from tel aviv. so no conflicting views from the israelis right now. is it all back to business, hadley? >> that seems to be the case, at least that's what they're trying to project. he can be still going to work every day and open for business and open for tourism. >> really we'll have to thank mike bloomberg for that. moving on, we'll have a look at how the futures are trading

on wall street right now. back in a few.

welcome to "worldwide exchange." i'm julia chatterley. getting passed on russia, at the u looks set to impose new

sanctions on the economy. new, terror alert, there are investigations an islamic group could be planning a terror attack in europe within days. facebook shares hit their second high. the social media giant continues to make money from mobile ads. earnings set the tone in europe. roche's first half slide while unilever's blames a withdraw of funds from emerging markets. >> it's an enormous adjustment of currencies, for nearly 60% of the business and has put a dent on consumption. >> you're watching "worldwide exchange," bringing you business news from around the globe. welcome back to "worldwide exchange." let's just recap some of the breaking news we've been reporting on over the last hour or so. norway first.

norway is concerned it's investigating a terror threat, which it says is linked to an islamic group with ties to syria. police there have said there is a plan for an attack in europe and norway was mentioned. right now, they're on high alert. they've received links with persons in syria. they're working to assess the situation. we've heard that afp are reporting air algeria has lost contact with a plane leaving ouagadoug. we'll bring you updates if we hear anything further. also we're waiting to hear from the eu with regard to further sanctions on russia. they're talking about potential further sanctions of the technology energy sector. what we've heard so far that's there's concerns or focus in berlin that they're proposing sector sanctions on the russian government.

so stepped up as far as these reports -- as far as these reports are concerned, not just looking at the technology right now on the energy sector, but actually specific. they want hem this to potentially be for a limited period of time. it comes back to this idea of we know it would hurt europe significantly if we did see energy sanctions in particular. they said they would want it to be for a specific period of time. those could be in place by the end of june or july and the beginning of august. >> let's take a look at the u.s. futures right now, trading in gains of between 1% and 2% for the core u.s. markets. right now, futures indicating slightly higher. the dow jones higher by 35 points and the nasdaq right now higher by 8 points, the s&p higher by almost 3 points. the tech sector was at the highest level since november 2000 in yesterday's trading session. we did see gains, of course, for facebook in after hours trade

yesterday. significant games, too, in the german markets. let's have a look at the european market, too, tech a focus with nokia shares outperforming today. right now, we've got the ftse 1 00 gaining by 0.1%. the xetra dashgs higher by 0.4%. the russian markets were higher by just shy of 1%. now 0.2% lower. so, again, talk about potential sector sanctions on russia. this attributed to eu sources right now talking about the german government. we have to wait and see what the foreign ministers can come up with later on today. but for now, how do you make money in these markets? listen in though what some experts have been tulg us this morning. >> i think the valuation is as it has always been. you cannot sit in front of a moving train and tell it to stop because in theory it's

overvalued. when it goes over 25 times pe, forget looking at the pe because it can go as easily between 100 and 200 times brit goes back to rationlty. >> turn itself around. it's a country that had stagnated for 25 or 30 years.al. >> turn itself around. it's a country that had stagnated for 25 or 30 years. had been current on its debt. but since the latest presidential direction, they turned themselves around where they were lucky to grow by sometimes 2% and unlucky to growth by 8%. >> i think the market is pricing in exactly what you said, that logic will prevail. but i mean, we need to take a step back. this is a country which has people -- logic will prevail and it doesn't necessarily go together. facebook's second quarter profits more than doubled beating forecasts.

mobile ad revenue jumped 151%. right now accounts for nearly two-thirds of total ad revenues. facebook now has 1.32 billion active monthly users and 129 million daily users with the bulk of those accessing the site on mobile devices. ceo mark zuckerberg says facebook will spend a lot of money on new projects, including the oculus virtual reality headset. he says the company will continue to go slow with ads. you can see the change right now, up around or just almost 3% in the german trading session, too. joining us on the phone from san francisco is justin lafferty, the editor of inside facebook blog. thank you so much for joining us. they're growing the proportion of feed based ads and that allows them to more than double prices year on year. i just wonder how sustainable those price increases are, particularly given competition from the likes of twitter and google.

>> yeah. well, the -- i do apoll dpiez. i stutter. but basically, the advertising has gotten a lot more expensive maybely because there's more players. there's more competitions where there's more of our people siding for real estate but people aren't necessarily spending more and more time as more advertisers and more pages and more businesses get involved. so that's the big factor is that more and more companies are siding for real estate and that has been going on recently. >> so one of the options here is video ads. the fact that they've acquired live rail shows, they're serious about this. he said we're going to go slow. what are your thoughts there? >> yeah. definitely when facebook is trying to get users used to a new model of advertising, which comparatively video is still

fairley new in terms of facebook. basically, the way that facebook operates is they will -- kind of a slowly start testing in certain markets of certain users. then they'll see because how these users interact with these video ads, kind of the look of usage patterns, they'll see who -- which users viewed the entire video or kind of which of yours scrolled by. and then they'll adjust for future campaigns. so it's really something that -- for the model, instead of kind of throwing it at the user, they're testing in terms of how users react first. so when they say about slow, yeah, they will go comparatively slow just to make sure that they don't -- that they don't have a bad user here.

that is the whole, to make sure that the user experience is still great. >> that makes sense, justin. it ties into an average revenue pu peruse he, they continue to make gains. but if we look globally, $2.24 right now. so they've got huge potential to monetize the international audience, in particular, i think in europe. it's almost around $2 or plus $2. this is what they need to focus on, now, too, surely, going forward. >> yeah. internationally, especially in q2, the biggest thing for facebook was the world cup. and i've heard from several facebook pmds that the world cup was a huge event with clients spending multi million dollars on ad campaigns. not only from the united states, but from europe and from asia. you can see a huge jump not only from q1, but from q4, which was

facebook's last tremendously successful quarter. they're getting a lot of money not just from asia, but from europe and the rest of the world. that's why the key is, from europe and emerging markets. >> they're not monetizing instagram, not monetizing whatsapp. now, some further developments, spain swiss is saying that the algeria plane has not reached itself destination. they were operating that plane on behalf of a air algerie. it was expected to land in algierie. they're saying 106 passengers and six crew members are on board. it has not met its expected

destination. we'll bring you any further details, but for now, that's all the information that we have on that. moving on, cnbc's steve liesman has an exclusive interview with president obama later today. they'll have a hard-hitting discussion on the economy. patriotism to raising the u.s. minimum wage. i'm sure they would be talking about that today on cnbc at 5:00 p.m. eastern. coming up, moody's says one former big u.s. resort down may be losing bet. stay with us.

. new jersey is long known for its ka seennies, boardwalk and the miss america pageant. seem ma mody is at cnbc hq with all the details. >> good morning, julia. moody's has cut atlantic city's bond ratings by two notches to junk status, citing the gaming industry. moody's outlook remains negative because atlantic city has a narrow financial cushion and a growing debt burden. the city also plan toes issue new debt to pay for tax

settlement wes casinos whose property values have dropped. the atlantic club closed in january and two more are set to shut their doors this summer. this they employ 8900 of people, a third of the city's workforce. increased competition in the neighboring states has cut into atlantic city's revenue after hitting a peak of $5.2 billion revenue in 2006, it dropped to just 2.9 billion last year. atlantic city's mayor says he's hopeful the casinos will find buyers. there's a half dozen companies looking at revel. the mayor says job training will be available for unemployed workers and new projects in town could produce will 1,000 jobs in the next year. the casinos to remain open for a

few more months, but that's not likely. the state's senate is looking to expand casinos to northern new jersey with revenue these being reinvested in atlantic city. expansion would require the voters' approval. this used to be an entertainment capital from the united states facing a lot of challenges. back to you, julia. >> thanks, seema. getting tough on russia, germany considering imposing sector sanctions by the end of the month. norway on terror elicit, an islamic group linked with syria could be planning an attack within days. and facebook after hours as earnings beat expectations on mobile ad revenue pes.we have to take a quick break. but still to come on the show, earnings rev up. both gm and ford report numbers today. we take a look under the hood of the auto giants, next. xkç

the prosecutors say he will appear before court later today. let's give you a look at what's on today's agenda in the united states. weekly jobless claims are out at 8:30 a.m. eastern, forecast to rise by 8,000 to a total of 310,000. new home sales out at 10:00 a.m., expected to drop more than 5%. it's a really big day for earnlings. caterpillar, eli lilly, ford, cat peller and gm set to report before the close. after the close, we'll get a

look at amazon, visa, pandora and starbucks. so the top side right now, two points higher for the s&p 500, the dow higher by just over 33 points and the nasdaq to 7 points higher. 26 record highs for the s&p 500 in yesterday's trading session. gains to the tech sector, the highest levels since 2000. 19% now of the markets. the s&p 500. on to the auto sector, gm reporting earnings later today. the auto's analyst at city investment joins us now. thank you so much for coming on. >> what are you expecting? it should be pretty positive. really, we think the key in this quarter is strong earnings in north america. we think gm's profit margins in north america, sclusing the recall costs should be about 111%.

that's above what the company is targeting for the next decade. gm can achieve this 1% target in the middle of the decade. >> they've gotted towards the recall. 700 million of that i believe was disclosed lr in q1. can you give us a sense of what provisions are concerned and what the relative cost is relative to that? >> sure. they've provisioned a billion in the few half of the year. we're hopeful that the majority of the recall costs are now behind the company. i think the company made a real effort to do that in the second quarter. so you're right, hopefully in the cycled several quarter, we'll see cleaner results. that can hopefully get investors back. hopefully this quarter we think will provide a data point to support our view. gm can earn $5 a share in earnings or thereabouts and that makes the stock look fairley

inexpensi inexpensive. so we're hopeful the recalls costs are behind the company. >> it's about the strength of the product cycle. u.s. sales for ford down in two of the last three months. talk us through what you're expecting today for q2 for ford. >> sure. we think ford will be in line. that will support or above consensus earnings for 2015. particularly, what we think is the company's exit margin may be higher than what people think which will give confidence as ford enters their sweet spot as the product cycle, that their profits margins can recover in north america. like gm, ford is making progress also in china, reducing their losses in europe, so we don't

think this quarter necessarily is going to be substantially above the son census view. we think the outlook and some of the supportive data points will suggest to investors that heings expectations for both the second half of '14 and 2015 still look low. and that should provide additional off-site for ford. >> interesting. the price upside in gm and ford there. it's greet to have you on. those results out later on today. don't forget, steve liesman has an exclusive interview with president obama. later on this programming, we'll have a hard hitting discussion on the economy. that's coming up today as mentioned, cnbc at 5:00 p.m. eastern time. that's it for today's show oom i'm julia chatterley. you've been watching "worldwide exchange." i'll see you back here tomorrow. have a great day.

another day and another flood of earnings set to take center stage. taking flight, the faa lifting its ban on u.s. flights to israel. and the state of the economy, the jobless claims is the data point of the morning. but steve liesman has an exclusive interview with the president tonight. it's thursday, july 24th, 2014, and "squawk box" begins right now. good morning, everybody. welcome to "squawk box" here on

cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. who is reporting from the nyse today. we have a busy morning head on the corporate earnings front. among names set to report results today, we have caterpillar, ford, gm, eli lilly, nokia, under armour, southwest air, jet blue, american airlines and dr. pepper snapple. by the way, check out our lineup this morning, the eli lilly ceo john lechlbter, doug parker, greg fleming, all of that coming up, but there are few reports to watch this morning. weekly jobless claims hit at 8:30 a.m. eastern time. economists are expecting first time filings to rise to