welcome to "worldwide exchange." i'm julia chatterley. deutsche bank says lending costs are unpredictable. ubs beats expectations in the second quarter but the deo tells cnbc investor sentiment remains cautious. >> financial markets are -- and it is staying the same. bp says banks on russia will

have an asset impact on its next relationship keeping the stock in check after the oilmaker reports a 4% jump in q2 profits. this comes as the eu prepares first sanctions against russia while the u.s. readies for fresh sanctions. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. >> welcome, again, to "worldwide exchange." some of the gains that we saw earlier on in the session are leaking out. right now, relatively evenly split between the gainers and the losers. the europe stoxx 600 unchanged so far. we have a lot of earnings to digest this week. there's potential further sanctions from russia to come in the next 24 hours. that is something for investors to remain cautious about right

now. i mentioned the banking stocks that we've seen the likes of ubs and deutsche bank. the ftse 1000.25% higher. the german markets relatively unchanged. the french market is a touch lower right now, but just 0.1%. there's a bit of a bounce in the micex, almost 0.4% right now. i mentioned the banking stocks, deutsche bank second quarter profit missed expectations coming in at $237 million euros such as 745 million expected. the german lender said litigation costs for 2014 are n unpredictab unpredictable. right now, as you can see, lower by 1.1% in trading. ubs lower by 1.8%. there are thoughts of coming in better than expected, the bank posted profits 1.2 billion higher than the 1 billion the company forecast.

they said the situation in ukraine was unlikely to affect business. >> we have to respect any sanctions that will be imposed.d but we are not going to go and discriminate. we have committed to the russian market. >> some other stocks that we're looking at, too, bp higher by around 0.4%. they've reported a rise in second quarter profits due to investment in russian energy group lognet. bp says despite the company's production falling 6% in the quarter due to $1 million barrels of oil a day. they've warned production would dip in the third quarter, too. we'll skip over to michelin, who reported a 13% rise in first half net profits to 224 million euros. the french tiremaker said demand

slowed in the second quarter. puma, meanwhile, higher by 2.9%. the second quarter results came in line with costs. sales fap to 652 million euros. they've reiterated their 2014 forecast to reflect currency adjustment sales. next that's upped their guidance for annual sales and profits for the second time in three months. this comes after the earnings report. it now stands at 7% to 10%. the total sales rose 10.7% in the 26 weeks to july 26th. let's have a quick look at the bond markets right now. italy trading at 2.64%. ten-year gilt, 2.55%. a lot of the folks looking at

what's going on in the u.s. bond markets right now. the ten-year just high of that 2.48% level. we saw plenty of action in the treshy markets. the two-year note trading at 54 baits basis points. the u.s. federationing debt at the highest level since may 2011 yesterday. they sold $29 billion of new notes at 0.54%. we're going to be talking about this. right now, the five-year is at the lowest level that it's been since 2012 back in -- it's 2011 now actually at 1.54 basis. we're talking about this flat n flattening of the curve. quick look at foreign exchange rights right now. dollar strength, right now,

euro/dollar sitting at 1.3433, the levels there coming in at 101.87. the figure now pushing up against that 102. little reaction to the job and retail numbers today. that's it for the european wrap. let's check in on asia with sri. sri, great you have to back. a lot of focus on what's going on in the chinese equity markets right now. that's right. the broader msci ex japan, we are getting positive leadership from the rally in the chinese shares, especially on the hang seng. the shanghai xotit consolidated once again and it's positive 2,183. we're seeing stabilization. the economic data is that much more encouraging.

but property still remains low and is probably reasonable to guess that we'll probably see more stimulus, more targeted stimulus being brought there to consolidate this recovery in the markets. the earnings are pretty good, as well. if you look at huaea they have been shipping in more mobile phones. they try to usher in more higher end smartphones. the nikkei 225, we did see some disappointing data. retail sales contracting by 1.6%. the market was looking for expansion. so that told us that we are still seeing the lingering of that consumption tax increase. incidentally, just got a note from hsbc saying that is probably going to remain sluggish in terms of retail sales for the third quarter, which means that we could see

some fiscal stimulus from the government if those numbers continue to disappoint. so watch out for that. elsewhere, it's a fairley positive session all in all. you see the market and for bangkok, but i would say for the rest of the week, julia, these markets are not going to be running away in terms of momentum to the upside. we want to see what the fomc says, of course, and that payroll at the end of the week. back to you now. >> and don't forget, earnings, sri, over the u.s. and europe, plenty for investors to think on. thank you so much for that. paul, good morning. >> good morning to you. >> a couple of interesting points in your notes. fund managers have the low elf level of risk since 2012. yet at the same time, you pull out the data from merrill lynch saying private clients now have equity asset allocations at the highest level in nine years. >> yeah. i think this is a continued

question about how risk averse people have been and the last time we talked, we talked about the fact that it was one of the most unloved equity rallies that's been taking place. >> it's become slightly less unloved than it was. you listen to the two executives of ubs this morning saying that their clients are still relatively risk averse. i think the point that i was thinking about the other day was it feels like there's a wall of worry with equity markets. and that equity markets tend to climb the wall of worry. people think about equity markets as they -- as hopefully they will be turned from being liquidity driven rally to an earnings driven rally. this is why i think this particular earnings season is quite important as this transition hopefully will take place. and soever, the earnings season looks like it's coming through

reasonably robust. outlooks from ceos seem more optimistic than they have been. the earnings numbers year getting year on year and its growth between 8% and 10%. that will be very important for people to focus on. >> but are you saying that as far as earnings soap are concerned, the numbers are coming in line with where numbers are trading at the current levels or is it getting momentum to take the market higher? >> i think in europe, i think at the moment you're getting certainly enough optimism and enough reassurance that equity markets are continue. once you start to get a bit of momentum in there, once you starting to get people feeling optimistic, i tends to free itself a little bit. hopefully if the numbers do come

through, you're going to get reasonableble policies remaining. but policies are going to remain accommodative. >> if you pull out the comments that the cfo made, investors are cautious right now. if you low in the low volatility, that's one argument at least for low returns so far year-to-date. do you think that makes investors chase markets further in the second half of this year? >> i think that's a very good point. i think particularly once the sum of -- i mean, you've seen this in the past. over the years, you see these -- where best return to the start of the year. some holidays are over. people look to chase returns and that's possibly when you get the market bobble, something will unnerve people and then they've maybe got into it a little early. >> to go back to the bond question that you were just talking about there as far as higher yields were concerned, what we're asking is some

rotation as far as equities or bond into equity sess concerned, is that because it's about heighten greed in the equity markets or more risk averse as far as the bond markets are concerned? both of those work, in fact. >> whether it's bond or greed in the equities, i'm not sure. whether it's less fear in equities and getting greater fear in bonds, it's harder to tell. one anecdotal thing, i looked at the director himself by the weekend. you notice recently there have been more director buy he than there have been sells. i don't know whether they're getting more optimistic themselves or are happy to invest in their business a little bit more. so it's -- it is -- it could be an inflexion point whereas we say the liquidity driven rally, you only need the earnings to

continue. >> if you look at the high yield credit market in particular to what city basis points wider now since the levels we saw back in june. there are a number of indicators across asset classes that are perhaps razing flags. or are they raising warning flags? >> that's a good point. i think they could be raising flags. the russell 2,000 that several people have talked about and the fact that -- and many fund managers get cautious when they do see the midcap in the second line stock starting to roll over a bit. they tend to need the pullbacks. everybody is looking at everything i think at the moment. everybody is finding excuses for everything. as we say, there's still a lot of caution out there and people are looking for -- some people are looking for excuses and so whatever pullback and this is why we're remaining cautious and other people are saying, well, i

still feel confident with what's going on at the moment and these are -- but you're exactly right. these are all things that i think everybody is focusing on and wondering what it's telling us. >> so how do we make money from these markets? >> well, i think that -- i mean, our philosophy is very much that you stick with the quality companies that have got a broad basic space to the global economy. there are a lot of risks out there, the geopolitical ones we haven't even talked about. my view is with that that this geopolitical risks are out there. we've lived through those for 20, 30 years now. so i think it's becoming more accustom to them. but i also think that they probably means that central banks, their policies are going to remain accommodative to the global economy. but i think we speak of the quality companies, i speak of recent dif dens, solid balance sheets, space of the global economy and pick, you know, one or two sets that you feel sets

along the way. i think it's relative. but unless you have a particular bearish out llook. >> caution, i think you've got to be pragmatic and selective. >> pat sedgwick, great to see you. carries in zurich, carolin, you've been looking at these numbers all morning. what do you think investors take in here? >> there's no big concern because these numbers were slightly better than expected.

and i'm looking at goldman sachs's numbers and both of them say this is a solid set of numbers. some of the things that stand out concern the management margin and that was 84 basis points. this is what you alluded to just now. there is a relatively low level of prime confidence. telling me this morning that, look, up to 28% still sitting in cash in terms of client assets. that is very, very worrying. yes, it is a big opportunity to asset managers, but on the other hand, with all that geopolitical risk going on, why shouldn't they move out of cash? it is a very, very good safety buffer, isn't it? now, what one puzzles about ubs's numbers, though, almost 11 billion, that is a very strong and encouraging number. i spoke to the ceo about the company's fixed income and the investment banking results. let's have a listen as to how

confident they were about the future performing in that business. >> they set very solid results in rates and credit, but most importantly, we have very strong results in our equity capital markets and origination business. we look at how successful we are being and the multiple expansions we have on our sets. i think it's the right strategy for us. >> let's talk about the wealth management unit. even if we continue to attract more money, the growth margin, that keeps on following. why is that and how can you counteract that? >> well, we have been taking actions, as you could see, we have been migrating more from our adviser into mandates, which helps to offset a little bit of this negative trend. but fundamentally, volumes in the market and volatility in the markets are putting preb your on transactions and transactions were down substantially on a quarter of quarter basis. but despite that, our profit was

very solid. >> if you want to characterize client confidence, where is it right now? is it pretty bad? is it at a level that you're okay with or is it actually improving? >> i think it's quite stable. but on the negative side of the equation, cash balances are still at around 26%, 27%, and it's slightly below because the asset days are going. financial market is going up, but the appetite is staying the same. so i would say until we see some improvements in the macro picture, in the geopolitical picture, which is almost on a weekly basis, it is very difficult to see out in the running proof. >> so markets clearly being a bit of a headwind for ubs, the other big headache, concerns not just for ubs, but for the banking sector overall is, of course, litigation. the company announcing this morning that it has sat over

german regulators paying 300 million euros. there is an investigation in the very early stages. ubs, by the way, a pretty big player here. ubs saying it is cooperating with them. in terms of future litigation costs and fines, ubs was pretty mum on that. back over to you. >> thank you for that. we were talking to the head of bank of jpmorgan that when we start to see a pick up in volatility or return, it's shifted so dramatically towards the wealth management. is that a concern? >> that is a very, very good point, julia. the jury is still out as to whether they may made the right

move. they think much of the down turn is structural, not just cyclical. credit suisse have been pulling back in some of their fixed income business. just last week, they announced they're exiting their commodities. but their exposure to the fixed income business is still much higher. i believe it accounts for around 20 perps of their group revenues. for ubs, fixed income only accounts for 5% of group revenues. >> some of the other banks agree with them, too. if you look at morgan stanley, credit suisse, we'll wait and see. we have to take a quick break. still to come on the show, when is a match making website not really a match making website? when it pairs you up as someone who is not compatible with you as an experiment. nice. stay with us. we're back in two.

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a dating website okcupid has been experimentally mismatching people. the founder wrote in a blog, when we tell people they're a good match, they act as if they are each though they should be wrong for each other. they're missing experimenting on new lists. what we want to know is should websites be more open about what they're up to? if you want to join our experiment here on "worldwide exchange," contact us via e-mail or twitter. now, a mixed settle of data due in from japan today. jobless rate worsening for the first time in ten months. with the unemployment rate falling to 3.7% in june. but the job applicants ratio did improve. japan airlines net profit dropped to 19.4% in the april to june quarter. earnings were hampered by a

weaker yen, making the fuel bill costlier. the airline reported a profit of 14.6 billion yen compared to 14.3 billion yen to last year. peak demand is expected during the summer. now, honda is ahead on the earnings track. the japanese automaker posting a 7% jump in its first quarter operating profits thanks to cost cuts and sales on its home turf. unit sales were down by 11% in japan with the april tax hike ate into the numbers. reflecting adjustments to the weaker yen. the u.s. will join europe this week by imposing further sanctions on russia. reports suggesting officials have agreed fresh measure us up to 12 people. the full report is expected to be released tomorrow.

this comes as investigators failed to gain access to the crash site of mh-17 due to fighting between the kiev government troops and pro russian separatists. meanwhile, washington has accused russia of violating a arms treaty. national security advisers say there's still time for the kremlin to come back to the negotiating table. >> there's a way out. integrate russia with the international economy, diversify fossil fuels and may by the rules. that is still on offer. that is still a possibility. we would like nothing better than to resolve this crisis in ukraine diplomatically and that's now up to president putin. >> the night sky of gaza city was lit with flares as prime minister netanyahu says hamas needs to be prepared for a long

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welcome back to "worldwide exchange." here are your headlines. shares slide as mixed results and further charges confound investors. the german lender says litigation costs are unpredictable. ubs beats expectations in the third quarter, but investors sentiment remains cautious. >> stock market is going up, but it's -- staying the same. bp says further sanctions on russia will have an adverse impact on its roznet relationship. keeping the stocks in check after the oilmaker reported a 54% just in q2 profit. the eu prepares fresh sanctions against russia while the u.s. accuses moscow of violating an arms treaty by using a new arms missile. european markets now trading on the lows of the session. right now, the ftse 100 relatively unchanged.

the german markets lower by 0.2%. german markets are 0.2% lower. the dollar still sitting at six-month highs right now. a lot of questions being asked about whether or not this is a breakout as far as dollar strength we've been looking for. 1.3435 bouncing this week. eurozone and german cpi data to look out for. 1.69 the level in sterling right now. second quarter profits net deutsche bank missed expectations coming in at 237 million euros versus 545 million expected. the dpeman lender says litigation costs are unpredictable having raised concerns from the previous quarter.

pretax profits at the bank closely watched assets just beat forecasts while product at its bit client units fell short. we can have a look at how they're trading in the markets right now. deutsche bank under a bit of pressure this morning off the back of those results. we can show you the performance of the stock, at least the latest performance. good morning, phillipeo. take us through your thoughts, initial take on the numbers. >> yeah, well, on deutsche, i think the bank is a little concerned about the -- in terms of litigation. they say litigation is unpredictable. and more increase in the reserve of the litigation. from 3.2 billion which is more of a -- >> some expectations out there are 4 to 6 billion euros as far

as future litigation costs over the next year to two years. is that one of the crucial concerns right now is they say it's unpredictable? we don't know how much it's going to be. >> exactly. this is i believe the main concern because last year or two quarters before that, we are saying we're expecting 2014 of additional costs to be aligned in 2014. they're repeating the increase in the contingency is that 2014, the litigation costs are going to be higher than the year before. also, there is a -- now 8 billion in fresh equity. of course, it's in better shape than it was a year before. but we know there is more, the adjustment is out of the equation which -- the pressure on the common equity ratio going forward. >> so to pull it back to that point, right now, we know they did this 8.5 billion euros of

equity rates, they have the 3.5 billion of the tier one issuance, as well. are they going to have to raise more? >> at the moment, no. >> probably on the back of the numbers, you would have to factor in probably like 10 billion or more. >> right. >> we will not yet, yeah. and also, it likely is a little bit surprised by the increasing inflation rates. some of the quarter on quarter which is a big number considering in the trend over the last few quarters. >> is this market overestimating how bad the situation is at deutsche bank is in is the share price too low here? >> it's -- there could be an element of this in the market reaction, yeah. >> not just in the market reaction. if you look at the underperformance relative to the bank index, deutsche shares are off 1% this year, fundamentally

lower priced than some of the other banks across europe. what is it about deutsche bank here? >> in the case of the dutch, we have a big -- coming from the 8.5 billion equity there is. that has to be factored in in the future, yeah. >> so let's look at the positives here, fixed income currency commodities division. flat versus some of the declines we've seen across the competitors. that is good, isn't it? >> yeah. there's actually -- the second quarter beating the consensus, which i think tells you a lot about the consensus. to some extent, it has become more and more pointless in the business. and there was quite a bit of results which has always been a strength in the investment bank or franchise for the 10% increase quarter on quarter. equity was down and that's more of a -- right across the other

equities like the french. for example, societe generale, low volume and i think it was down by 12% quarter on quarter. >> equities say they're going to be hiring people in the u.s. to address some of their concerns about reporting that the new york attorney general raised that came to light in the last couple of weeks. does that raise huge alarm bells for you? this is something that we've known about or they've at least known about for many years as far as concerns about reporting in the u.s. business and only now they're looking to hire more people to address the situation. that for me is a huge concern, particularly in light of what we still don't know about the scandal in particular. >> yeah, that's applied to -- for the for ex standard. i think, yeah, the latter has come to the light last week.

it will be an important part of financial banks since deutsche is under the -- and we've learned that they apply a lot of attention on the soft element like the process, reporting and so on and so forth. >> we'll see. phillipeo, senior research analyst, thank you. michelin has confirmed its full year targets after a rise in q2 profits. we know their volumes jumped in the first half of this year. what are they anticipating for the full year here? >> confident because the company confirmed its guidance for the full year. michelin is targing a 3% increase in volumes this year compared with a 1.9% increase

for the first half of the company. the command will accelerate in the second half of this year. but the reserves were much higher and it's due to the lower price of raw materials that's -- that being said, it was weaker than expected. and michelin is considered in terms of -- and i talked with the ceo above the tensions in eastern europe, but again, it doesn't believe it's going to have a major impact. >> we have the diplomacy of the -- we're not making it, we have on our own diplomacy. we have a business in russia, we have a business in eastern europe, and we have to recognize at this point it's volatile and our hope is that in the coming months or years, we should be able to standardize all that. we are free traders here at

michelin. we like free trade. and we act in the direction whenever we can. there are still some duties for russia, significantly high duties. and you import tires in russia. we try to manufacture these tires in the country, but we import a lot in the zone. so it is very important for us that free trade really become the word of the day. the political tensions are never good in that area, so we have to be cautious. >> regarding the strength of the euro, it had a negative impact for michelin in the first half of the year. they've asked if the central bank should intervene to lower

the level of the euro. >> lower euro is not the solution for everything. you about it has a tremendous impact on the competitiveness of the companies that produce in europe. and export. as a massive example, we have another one. we export 25% of our european production, which means that the strength of the euro, as i've just explained before, has important consequences on the performance of michelin. now, when you look at long-term, what that means is that we need to be more competitive in europe. we need to find ways to strengthen our industry examine make sure that we were resist that type of situation. short-term is the real problem. long-term is if we adapt ourselves, if we strengthen our positions, we should be able to overcome. on michelin, trade is about flat

this morning. the market is more convinced now about the outcome than it was a bit earlier today. julia. >> thanks so much, stephane. israel's prime minister ben gentleman men netanyahu says hamas should prepare for a long conflict in ga. nbc's richard engle is on the ground in gaza city and filed this report. >> reporter: a hamas mortar, accurate, maybe lucky land odd a group of israeli soldiers, killing four and wounding three others. today was supposed to be a cease-fire. it didn't work. israel says two hamas rockets fired at israel also fell short, landing right in gaza city. there has just been another explosion. mostly we are seeing children being brought into this hospital. one after another, they came into the hospital.

volunteers and medics would rush back to get more injured. families wailed when the most serious cases arrived. in the er, mohammed tells us what he saw. >> kids were playing on swings and bicycles. i was watching them, he said. all of a sudden, there was ma massive sound, dust. a few beds down, a 11-year-old was cut by shrapnel. a 5-year-old called out for her daddy. she held on to his finger while her mother tried to comfort her trauma advertised sister. everyone here blamed israel. but israel said it didn't do it. >> what we know is that hamas and other terrorist organizations launch rockets from within the gaza strip and they actually struck these two locations, killing and injuring palestinians. >> hamas doesn't accept that and used the attack on the children

as a reason to go on the offensive, firing volley after volley of rockets at israel. israel's mission is much more extensive. today, the cease-fire collapse and had a far more violent phase could be coming. a senior israeli official told us things could have gone either way today, there could have been a cease-fire or an escalation. for now, it seems, the cease-fire option has been taken off the table. >> hadley, it seems every cease-fire we've had barely holds for an hour, at least a couple of hours. but i want to get to the growing criticism of john kerry in this. my question is, where is president obama in all of this? >> this is something that we've been seeing for the last year and a half, really. just a year ago, you and i were sitting here and talking about syria and red lines. as you'll recall, there was a moment when secretary kerry said we were going to do some

militarily and president obama very quickly pulled the rug out from under him. and unfortunately, when you do that, that raises a great deal of questions to your allies and to the world about how much, you know, political will is behind your secretary of state, how much you're going to do to follow on whatever he says and, unfortunately, that's sort of become the case for john kerry. he's become the political pinata. at this point, everybody is upset with him except for washington. they came out and were criticizing the israelis for coming out and being harsh on secretary kerry's efforts. certainly he has been the only one. but i think if you're president obama and you have so many other things on your agenda, particularly in the geopolitical world with ukraine and president putin, i think he's quite happy to let john kerry taking the lead in doing this peace process. and i think that, you know, if he wants to get out in front of the cameras and do this, then he

can take the fall for it. i think it's quite political in that sense. >> hadley good manible, good to have you on. still to come on the show, your earnings are coming up right after the break.

anyone tendo nintendo is expected to see first quarter results before the opening bell tomorrow in tokyo. they pledged a return to nintendo-like profits. but some argued without dropping its hardware business and focusing on game making, the company may be out of lives. joining us now, analyst at jeffries, axle. why is the ceo so opposed to this? >> thank you, julia. why is the ceo so opposed to this? it's bizarre. it's very strange. partly it is defined by the culture. the companies tend to change very slowly. but in this particular case it's even strange because his predecessor who back in 2002 took responsibility of a product called game cube appointed him.

this time around when the product has failed and nintendo history for the last 30 years this is the first time they've had losses, running losses for the last three years. yet there does not seem to be anybody stepping up to take responsibility and accountability for that. they've changed strategy. they should embrace -- >> carry on. i believe there's a bit of a -- on the line. there's a bit of a marketplace leader here to leverage the likes of marto cart, they've got mario himself, pokemon 2. the question is, revenues will be less and profits will be higher. can they do that? >> for the first quarter, it's good because they had this mario cart 8. but for the full year, we are forecasting losses again. the company has forecasted profits. our forecasts are losses just

like last year. they need to go where their customers have gone. their customers, unlike that of microsoft and sony customers who are still core gamers, they are family oriented customers who have moved to smart devices. in this scenario, nintendo needs to embrace the changes their customers have embraced and move on. but it doesn't seem to be happening just yet. therefore, they seem to be continuously losing money. and the biggest challenges the company has chosen to make apple and google their competitors. they can make apple and google their partners, but they are choosing to make them as competitors and that's going to make their life even more difficult if they maintain this strategy. but if they change, huge, huge upside lies ahead of them. >> i just wonder if it comes down to the amount of cash that they have here, $7.8 billion according to the last financial statements. it just feels like they can hang on here, they be afford to hang

on here and rack up further losses without it actually denting their balance sheet right now. what's your price target on this one? they have company of up side 37 the question is, can they turn it around? >> so the way i have designed my target price is basically cash plus upside potential. but we multiply that with the probability of change. that side is very large, but right now given that the latest igm, the president was seeking reappointment. he got higher vote. it seems the probability of change has declined and, therefore, the probability of upside has reduced. our target price is 12,400 right now. when the stock was 13,000, it was going up in the expectations of profits with a new product they have launched. we don't believe in it. but we believed the downside had exceeded more than 20%. therefore were more downside versus the upside warranted a

downgrade. >> thanks so much. great to hear from you. virgin america, partly owned by richard branson, filed for a public offering of shares as it looks to expand the market. phil lebeau filed this report. >> reporter: investors who pushed airline stocks to new heights here in the united states will have a new airline to invest in. virgin air leans are filing for a new ipo. for virgin america this comes just seven years ago it was first incorporated here in the u.s. its first profit was only last year and it was for $10 million. they plan to use the proceeds of an ipo to fund flights. why is the ipo coming dow? take a look at the returns for the airline index versus the s&p 500.

no comparison at all over the last year with the airline index up 41%. the people who are benefit the most are the two principal stakeholders in virgin america, cyrus capital which owns about 75% of the virgin america. then there is the virgin group, which is run by richard branson. that owns 22%. remember, foreign entity cannot only more than 25% of any airline, so the virgin group will still have less than 25%. for virnlg yen america, this comes at a time when they're expanding into dallas in love field and we gon irnter national airport in washington. there's no time yet on when you'll see virgin america start

trading. nikadalah joins us now on set. nick, good morning. >> good morning, julia. >> we have seen 150% growth in cross border ipos during the first half of this year, but what about in terms of the number of deals? well, you're right. we see an incredible explosion in cross border ipos in the last six months, 129% as opposed to 29% for domestic ipos. a number of deals looking up. and we were talking earlier, of course, the alibaba deal coming along later this year. >> the numbers drastically are huge. exactly. we see those numbers continuing. it's been driven by a number of factors. but there's also the immediate trend.. we've seen numbers coming into markets, companies are a chiefing fantastic valuations. strong rrchls in the

aftermarket, also on the whole in europe, and they're particular about models around the world. they want a piece of the action. >> we just memgdzed the alibaba stick in particular. is that where a lot of these numbers come from from china into the u.s.? >> you're jutely right. one of the aspects is a push factor. seeing some of the burdens put up there by stock exchanges and their domestic markets being unattractive and they've seen other companies in their jurisdiction moved to more developed markets. new york, hong kong, london, particularly in north america we've seen that with china. as you say, ten chinese companies going across less though here in london. we expect that trend to continue through q3 and q4 is and, of course, alibaba. >> and it comes down to price, doesn't it? we look at the performance of

ipos, 20% of their offering price as far as the u.s. is kerchbd. there are a couple of them. >> no, absolutely. this is something from obviously when you look into market, we want to be sure demand is going to go up 10%. that's great for companies, it's great for their future growth and acquisition currency. >> well, we'll ask very quickly about what we're seeing in europe or in the near region in particular. 300% growth in cross border, but the government here, the story here is the domestic story. but what about pricing, too? we're concerned right now about the pricing of ipos, the potential valuations that have been put on some of these deals. >> you're absolutely right. we've seen in europe a lag behind north america. the european markets are shut for a period of time.

we've seen the bag log of high quality companies now coming to the markets. and that's driven the 400% growth in domestic ipos. we expect that to taper down in the next six months. in terms of valuations, there was a discussion around ipo fatigue. actually, that story was slightly overplayed. okay. there was a bit of excess exuberance. we're now seeing more healthy valuations and we see that as a sign of a more healthy and robust market. >> great to talk to you. crossing the wires in the last few minutes, we're hearing the forensic experts are still unable to access the downed mh-17 plane in eastern ukraine due to fighting. stay with us. i'll give you a look at the futures as we head into that. stay with us. what we're doing right now, along with ibm, is to actually transfer data through a satellite from our wind farms directly onto the cloud. i think we could create a far more efficient system across the whole network where we could actually draw down

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welcome to "worldwide exchange." i'm julia chatterley and these are your headlines. herbalife falls shorts of earnings. bp says sanctions on russia will have an affect on its raz gas impact. the u.s. accuses moscow of violating an arms treaty by testing a new crude missile.

argentina edges closer to another default as government advisers meet u.s. mediators and fail to hold face-to-face talks with bond investors as the repayment deadline looms. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. if you're just tuning in, thanks for joining us here on "worldwide exchange." as always, we look at how the futures are paring ahead of the u.s. equity market open. we saw the dow and the s&p ending slightly higher in yesterday's trade. i'm talking 0.1% in either direction. right now, we've got the dow futures indicating lower by 14 points. the s&p 500 around 3 points and similar stories in the nasdaq right now indicating lower by around 4 points. we've got the first day of the fed meeting. we'll be talking about just what we get as far as the statement is concerned. remember, no pressure from that, too. we've got a number on of data points, the pce inflation stat

and, of course, payroll. so plenty to keep investors watching for in addition to all the earnings season reports, as well. here is a look at the european markets this morning, too. we did see gains for the stock of the session. then we tip into negative territory. right now, higher by around 0.1%. we've got the micex, too, for russia relatively unchanged. it has gained around 0.3%. we continue to watch what's going on between the eu ambassadors later on today. whether or not we agree further and tougher sanctions on russia. certainly that market and the dollar rate continuing to be what we are watching. let's have a look at the fortune exchange markets, too. the dollar still on the front. a lot of investors questioning whether this is the start for a more significant rally right now. euro/dollar sitting at 1.3437 right now. moving around the eight-month lows, but not positioning any further on the board. the european wrap.

let's check in on the asia session with sri in singapore. skree, give us the latest. >> hi there, julia. despite an uninspiring lead from wall street, we are looking at fresh three-year highs at the broader stage. it's a bit more granular. we have been seeing the leadership coming from the greater china markets. hong kong in particular. 3 1/2 year highs. the property market is doing quite well in the hong kong markets, too. so we're seeing the leadership there on a sectoral basis. i have to say this, the economic data from china recently have been quite encouraging. it's point to go a stabilization in the growth level in the world's second largest economy and that's down to a cumulative effect for the many stimulus. but the market is banking on more targeted stimulus to come. that is why the property counters try to front that elsewhere. the nikkei 225, earnings season

is pretty good so far. the carmaker shares at 4 1/2, up by 4.5%, i should say. the data has been pretty mixed, though. retail sales was disappointing, coming in at negative 0.6%. the market is looking to expansion, but this is the sum total and the after effect. the slow after burn, if you like, julia, of the consumption tax increase. we could see if the data continues to be weaker on the retail sales on the consumption front, we could see more fiscal stimulus measurer from japan, from the government to keep things ticking over. back to you now. herbalife's second quarter profit fell. adjusted results missed analyst forecasts by a penny, ragz the long streak of beating estimates. herbalife, which has been embroiled in a long running dispute with bill ackman projected third quarter revenues at slow expectations. shares held 10% in after hours

trade. right now in the german markets, lower by 9.9%. pfizer reports second quarter results at 7:00 a.m. eastern. the largest u.s. drugmaker is expected to post flat earnings on moderately lower revenues as many of its top products face competition from rivals or generic drugs. investors are looking for comments about whether pfizer will resume its quest to buy astrazene astrazeneca. america reports numbers at 7:00 a.m. eastern. profits are expected to fall. pfizer and merck trading in the german market session a touch lower. fiedzer down by 0.2%. merck lower by 0.89%. so underperforming there. now, with nearly 140 companies in the s&p 500, we are seeing more than u.s. ten-year yields nominal years. my next guest says it's almost

nothing compared to u.s. equities at present. don, you say all is nothing compared to u.s. equities. what's the almost? what does? >> well, if you look at what's going on in the emerging markets standpoint, you could make the case that emerging market equities at least for now are on par with u.s. equities. but in a general sense, i think a lot of people are looking things -- looking at things the way that you just described, the way that i just described. the u.s. equity market is still where you want to be. >> goldman sachs is neutral on u.s. equities at the back of last week. they've gone underweight. the concern is over the next few months, we'll see bond yields rise. do you buy into that? >> when you look throughout u.s. market history, when the federal reserve or central bank obviously transitions from an accommodative stance or a

neutral stance to one that's tightening in nature, you often get equity dislocations and i think the harder goal to note, which i of course are not seen or reads underlies that observation. if you look at the most recent episode, which is 2004 in the united states, equities in the short-term over a six to eight-month period reacts negatively. and that could very well happen again here. the question for investors that are in the market for a longer term rather than, say, six to eight months, is whether or not that signals the end of the bull market and the answer right now, at least from our perspective is no. >> we'll come back to the longer term later on in the show. but august traditionally has been a month where we take a bit of a breather. a great shot from jpmorgan that we're going to show you here seeing performance in the s&p versus the volumes that we see. that's on the way up. what about if we see a bigger pullback. what happens to the level of volumes and the impacts of the markets on the way down?

>> well, the great irony for the cell side, which is where i operate, is that, actually, higher volatility and in many cases lower prices are often quite good for volumes and that's ultimately good for our business. it's bad for the investment climate and landscape, of course, but it it's certainly a good thing from a business perspective. i will add i, of course, don't know jpmorgan's arguments behind that chart, but a separate observation i would make is here in the u.s., there's been a -- what appears to be a secular shift away from stocks splits. and if you look at the number of s&p 500 companies that are trading north of let's pick an arbitrary number, $7.5 a share, $100 a share, the numbers are exceedingly larger today than they were even in 2007 and certainly more than 2000. so the stocks trade at higher levels numerically, the same dollar value traded isn't necessarily affected, but the number of shares that are traded are affected.

so even though investors may be trading the same dollar amount, and i have to do the work on this, you end up trading fewer shares of each individual stock and that's reflected in that chart. >> i think there's also something happening with the structure of the markets and how long people are holding shares, too, but we'll come back to this. don't move a muscle. stay with us. we're going to come back to you as well as your thoughts on the fed. but for now, let's give you a look at what's on today's agenda in the united states. the june s&p case shipper home price index is out with markets forecast to rise nearly 10%. at 10:00 a.m., we get july consumer confidence numbers. merck and pfizer report results before the opening bell, as do u.p.s. and the "new york times." after the close, we'll hear from american express, am again and twitter. the twitter ceo will be on closing bell today in an exclusive interview right after the company reports earnings. that's at 4:00 p.m. eastern. don't forget to check that interview out, too. check out some of the stories

trending on cnbc.com this morning. why we laugh and hate the british from the national health service and the queen to fish and chips and drinking. britain is labeled with stereotypes and cliches. we always ask whether there is a bubble in the use of the word bubble and would you pay $11.1 billion for a gurkin? all of that and plenty more on cnbc.com. follow us on twitter, @cnbcworld. oh, to be a fly on the wall of the fed. the first day of the fomc meetings kicks off. stay with us. in india we have 400 million people who don't have electricity and i just figured that it's time i do something about it.

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welcome back to "worldwide exchange." these are your headlines. a less than healthy set of numbers for the herbalife. shares went lower after hours. bp warns on the adverse impact of russia sanctions as eu ambassadors approve further measures. and the clock is ticking, but no face-to-face talks. argentina is approaching a default. the fed begins a two-day meeting today with the announcement due at 2:00 p.m. eastern on

wednesday. they're expecting bond purchases by $10 billion do $25 billion a month. they have to unwind its more than $4 trillion balance sheet. fed watchers will be looking for comments on those issues in the minutes which are released next month. dan, there's going to be a bit of interpretation of the market here on the extent of the data and just where the fed is relative to that data in their forecast. surely, we're going to be watching for the lines in the statement. >> yeah. she should certainly update their economic sentiment paragraph, if you will, to take account of the fact this here in the u.s., at least from an employment standpoint, things look much better today than they did even just a few months ago. there are always a weakness, of course, the housing market is clearly in a little bit of trouble here. and certainly other parts of the economy aren't operating at full

potential. but clearly the fed is going to have to acknowledge what's going on in the labor market. the statements itself is largely going to be an after thought. generally speaking, the action will be in the minutes. behind the scenes, there's a pretty big debate going on about the composition of the exit strategy. >> the high echt level for a two-year debt since may 2011, we're seeing the curve. the market right now is starting to put together the idea that rate hikes are going to happen sooner than the first quarter or second quarter of 2015, aren't they? >> well, to some degree, yes, i think clearly we're under still the middle of the year. some people are talking about a march rate hike and i think that might be a little too optimistic at this point because i -- our view is still that there's a little bit of runway here for

the federal reserve to operate. but at the same time, i think what you're talking about what's going on in the bond markets, really, really interesting. the focus is entirely on the ten year and what it's doing or not doing. but if you look at the shorter end of the curve, there have been pretty meaningful moves, aus noted. the two-year yield is up considerably. and the same can be said for threes and fives. clearly, in our opinion, what investors are doing is starting to price in rate hikes. tease what's affecting the long run. >> how does the daes this week move into the narrative? we have the payrolls on friday. there's a lot for investors to digest here. >> yeah. so with respect to gdp, we're obviously get ago bounce back from the terrible number here in the first quarter. we're also going to get some revisions to previous data when the gdp report is released that could make the first quarter look not as bad as we originally

thought which would have the per verse affect of the second quarter not looking as good as we think it will be. friday we have the jobs report. we've had a string of numbers with 200,000 plus jobs. in that regard, it's a bit of an after thought, what people are focusing on here in the u.s. is no longer the total number of jobs. what you're looking at now is wage data, earnings data, and whether or not that is picking up. because if it is, that obviously is going to feed right into the debate around when and if the fed is going to hike. >> dan, great to talk to you, dan greenhouse at big. we just had some comments from a chinese regulators saying they're conducting an anti-monopoly investigation into the company. they say microsoft has not fully

disclosed information about the windows operating system and office. they're investigating the microsoft president and some of the senior managers. they're saying they've made copies of microsoft's financial statements and contracts concerning an investigation into microso microsoft, we'll bring you any further releases or information on that right mow. argentina will hold last ditch talks today to try and avoid the company's second default in the past 13 years. the government is sending a mediator to new york but not with all out critters. argentina has until wednesday to make a payment to its 2001 default. but a u.s. judge has prevented argentina from paying them unless it also pays the hold out. been dating online and think you've met your perfect match? think again. okcupid has admitted to intentionally mismatching people.

co-founder christian rudder wrote in a blog, when we tell people they're a good match, they act as if they are even when they should be wrong for each other. so as okcupid follows facebook's steps in experimenting with their users, we happen to know should companies be more open? get in touch with us by e-mail, twitter or direct to me, @j jaterly cnbc. still to kot on the show, benjamin netanyahu says israel needs to be prepared for a long conflict. we'll bring you the latest after the break. collection is here. ♪

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welcome back to "worldwide exchange." a look at hour the u.s. are fairing ahead of the u.s. equity market. right now, the s&p 500 indicating lower by just shy of 4 points, the dow jones lower by 18 points and the nasdaq set to open down 6 points.

plenty more earnings for investors to digest and, of course, taking the cue from what we're seeing in the european markets right now, relatively unchanged. a number of factors still including potential further sangs from the eu on russia keeping investors cautious right now. now, the u.s. would join super this week by imposing further sanctions in russia. talks would resume in brussels with reports have great on measures up to 12 people. the full list is expected to be released tomorrow. this as investigators once again failed to gain access to the crash site of flight mh-17 due to fighting between the kiev government troops and pro russian separatists. meanwhile, washington has accused russia of violating an arms treaty by test ago prohibited cruise missile. there's still time for the kremlin to come back to the negotiating table. >> there is a way out. integrate russia with the international economy, diversify away from fossil fuels and play

by the rules. that is still on offer. that is still a possibility. we would like nothing better than to resolve this crisis diplomatically and that's now up to president putin. >> israel's prime minister benjamin netanyahu says they should prepare for heavy fighting in gaza. gaza's interior ministry said the israeli fired at gaza. martin, can i ask you, do you see any hope for a cease-fire and progress that's supported by the u.s. here? >> oh, you know, julia, this has been the question now for several days if not a week. and it's still the same answer, essentially, which is that there's movement towards progress politically and diplomatically, but on the ground, it's going the other way.

last night was the heaviest pounding of israel by gaza targets since this whole war, mini war began three weeks ago. so it's heath up. and then after prime minister netanyahu last night said that israel's attack on gaza would be a prolonged operation, preparing the people for a deeper grown invasion and for more soldiers involved in the fighting, it just seems the opposite. and that comes within 24 hours of a sharp appeal by president obama to israel to stop fighting and to initiate a humanitarian cease-fire. so, actually, the wantings and the appeals for a cease-fire are being pushed aside, not only by israel, but by the islamic militants in gaza, islamic ji d jihad, so it seems to be that the fighting is becoming worse rather than progress towards cease-fire becoming more. at the same time, the home that the israelis attacked that you

mentioned in gaza, that was actually the former prime minister of the palestinians. his home was hit. israel has been targeting the homes of islamic militant leaders ever since the beginning, but now they're stepping that up as a punishment of the leaders of hamas to make they will feel what they're doing. one of the key parts to the only power station in gaza, palestinian civilians were only getting about three hours of electricity a day in most places. now getting no electricity. there's a huge smoke -- ball of smoke over gaza from the power station and no comment to o that from israel. but it makes the situation for the palestinians even worse, julia. >> martin, thanks for that. hadley, we were talking earlier about this idea that perhaps john kerry is being used as a sack official lamb by the u.s. administration in this

situation. where is president obama in all this? >> he seems to be distracted with other things. certainly we have a lot going on on the geopolitical arena. we have obviously what's happening with ukraine and president putin, as well. but at the same point, looking at secretary kerry, all he's done in the region in the last year and a half. when i speak to people on the ground there, they always say we are appreciative of his efforts, but at the same time, we're still wondering, where is the u.s.? and i think this all goes back to where we were sitting at this table a year ago talking about syria, talking about red lines. unfortunately, the rest of the world noticed when president obama pulled the rug out from under john kerry. when john kerry said we're going to do something militarily and president obama said, whoops, i'm going to go to congress and the rest of the world saw this as not having the back of your secretary of state. that's the problem. now we see him as sort of this political pinata. the israelis are upset with him

because he's attempted to talk to him. the gulf states are upset with him because he's giving this -- and the palestinian authority has been undermined that the u.s. was going to try and negotiate directly via turkey with hamas. unfortunately for all of his efforts to try to put an end to this in the short-term, theed broer picture has been affected. >> some were saying a way would be to unite the sides against a common enemy. >> and it's interesting. the knock on effect in the united states, as well, we're all hearing, as we know, americans have a short attention span for geopolitics. this is something we've seen over the last decade certainly with regards to the middle east. at this point, i'm hearing things that the united states -- they can't solve the world's

problems. unfortunately, i -- they're turning their attention more now towards ukraine and mr. putin and certainly through all the economic problems we have at home. >> hadley, thank you for that, hadley gamble. still to come on the show, u.s. pending home sales dipped in june after three straight months of advances. so is this just a blip? we'll preview case-shiller's house price data and get your real estate picks right after the break. stay with us. we're back in two.

welcome to "worldwide exchange." i'm julia chatterley and these are your headlines from around the world. shares of herbalife dropped shortly as the company best known for its fight with bill ackman reports disappointing earnings. the eu prepared fresh sanctions against russia while the u.s. accuses russia of violating an arms treaty by testing a new missile. argentina edges closer to default as advisers meet u.s. mediators. however, no meeting is held with bond investors. and within the past hour, a chinese regulators says it's conducting an anti-monopoly investigation into microsoft stock ware. display you're watching "worldwide exchange," bringing you business new from around the globe.

>> sthathanks for joining us hen "worldwide exchange." right now, the dow indicating lower by 19 points, the s&p 5003 points lower and the nasdaq around 5 points lower. the s&p managing to end slightly higher. we have the nasdaq tipping to the red line. the dow did end a three-day losing streak. off the back of that, we continue to see the divergence in the small cap names. on pace now to pose the worst of the loss since may 2012 when it drops 6.7%. worth having a look at what's going on in the treasury markets to plenty of action to keep an eye on. the u.s. government paid the highest rate for two-year debt since may 2011 yesterday selling $29 billion of notes at a year of on 05%.

the treasury is set to sell 35dz billion in five-year notes today and $29 billion in seven-year notes on wednesday. point out the flattening that we're seeing particularly in the 5030 trading at a space of 134 basis points. have a look at european markets this morning, too. well under pressure, the session was now tipped into higher territory. the german markets unchanged. similar story for the french markets. we are seeing 0.3% in the russian markets of gains. we are watching for the potential hike in sanctions later today from the eu. let's take a look at today's other top stories. settlement talks between the bank of america and justice department are reportedly being held up over whether the company should pay a cash penalty for the dealings of its countrywide, financial and merrill units. bank of america have offered to pay a $13 billion fine to end

the u.s. mortgage securities probe. but the justice department is demanding billions more and a larger chunk in fines. merrill lynch trading in the german markets higher by 0.3%. darden restaurants ceo is stepping down as the company tries to fix its olive garden chain following the sales of red lobster. they're splitting the top executive role. otis will state on until december 31st or a replacement is found. activi activist investors brought higher moves. virgin america, the low-cost airline owned in part by richard

branson looks to expand in the usair line market. phil lebeau filed the report. >> reporter: investors who pushed airline stocks to new heights here in the united states will have a new airline to invest in. virgin air leans are filing for a new ipo. for virgin america this comes just seven years ago it was first incorporated here in the u.s. its first profit was only last year and it was for $10 million. they plan to use the proceeds of an ipo to fund flights. remember, most of their flights are in and out of los angeles and san francisco on the west coast of the united states. why is the ipo coming dow? take a look at the returns for the airline index versus the s&p 500. no comparison at all over the last year with the airline index up 41%. the people who are benefit the most are the two principal stakeholders in virgin america, cyrus capital which owns about

75% of the virgin america. then there is the virgin group, which is run by richard branson. that owns 22%. remember, foreign entity cannot only more than 25% of any airline, so the virgin group will still have less than 25%. for virgin america, this comes at a time when they're expanding not only out of the west coast, but also in dallas at love field and into reagan international airport in washington. there's no time yet on when you'll see virgin america start trading. that's the story from here in the u.s. back to you. >> u.s. pending home sales dipped in june following three straight months of advances, although economists were quick to point out the data does little to change perceptions on a stateside housing recovery. the national association said its numbers rose last month.

investors turn now to the case-shiller home price index which is out at 9:00 a.m. eastern. we did see a dip in pending home sales. how comfortable are the with the residential side right now? >> good morning. thanks for having me on the show. it's clearly that the residential market has been in a deceleration over the past 12 months or so. we're shifting from an investor dominated market with the foreclosure acquisitions going on to much more of a normalized and demand-driven marketplace. so the deceleration that we've seen is not a surprise. i think we're seeing -- we're toward the end of it and we're seeing some signs that come the next two or three months, we're going to see an uptick both in sales activity and price gains. >> as you quite rightly says, the existing home sales pure chase have been made to a greater extent by private equity

buyers. i guess what they've done at the same time is price out some of the new home buyers. what we ultimately need to see is a slower rate of growth in house prices, too. do we get that? >> i believe we will. and if you look at the trends over the past few months, we can see that coming out of the recession, we have had a lot of pent up demand in housing, which is a big reversal. so that the reason for our optimism that the housing market will continue on a recovery cycle, it's because of that fundamental excess demand or pent up demand that's in the marketplace. as we added, 2, 2.5 million jobs we're seeing right now, that pent up demand is in the marketplace. and the construction side of the new supply side is very much in balance. that combination points to a strong year in 2014, the back half of 2014 and 2015. let's shift to the commercial real estate sector. what are you seeing there?

>> well, we've had an incredible combination of steady job growth turning into demand for various types of commercial real estate. really, every sector from office building toes warehouse distribution space to resale shopping centers and, of course, apartments. even in markets like self-storage and senior housing properties and medical office are seeing a tremendous rebound in demand. in fact, the first half of 20114, so the best demand we've seen during this recovery so far. at the same time, interest rates are very low and alternative yields, when compared to the 5% to 7% average yields are not quite competitive. >> at the same time, you're suggesting people avoid apartment reads. what's going on there? given what you've just been saying, too, about the residential market, what is the tie across? >> if you look at the

demographics, it's clear that we have the young adult population, we have a lot of growth in what we refer to as empty nesters, people who tend to rent by choice. they're selling their homes and referring to rent usually in urban areas. that combination of the demographic movement, plus the limited supply we've seen in the last few years as made apartments the best performer in the real estate world. the reit sector, if you look at the long-term outlook, there's plenty of demand to go around to sustain the for sale housing recovery here in the u.s., as well as a tremendous amount of growth for rental demand. but going into the next 12 months or so, we're seeing the laggers now begin to outperform. because the excess space that many companies as tenants over

the course of the recession has now been burned off. so as the job growth continues, that translate to more demand for office space. some in the market for london's real estate, the famous gurkin building could be yours. find out more about the planned sale of the lapped mark on cnbc.com. up next, the courtroom drama with steve balmer may be nearing an end. stay with us. xkç

welcome back to "worldwide exchange." these are your headlines. the less than healthy secretary quarter sets of herbalife, shares drop lower after hours. bp warns of an adverse impact of russian sanctions as eu ambassadors prefer further measures. and the clock is ticking. argentina edges closer to default. the soap opera over the los angeles clippers basketball team and controversial owner donald sterling may be entering the fourth quarter.

dput jackie deangelis is at cnbc headquarters with all the details. >> this is a story that never quits. the u.s. probate court judge has ruled against donald sterling in his bid to block the $2 billion sale of the l.a. clippers to former microsoft steve balmer. the judge side, sterling's estranged wife, shelly, who was emotional inside and outside the courtroom after the ruling was announced. >> this is going to to be a good thing for the city, for the league, for my family, for all of us. >> now, the judge says that shelly sterling struck a good deal for the clippers and had the authority to remove her husband as co-head of the family trust that owns the team after doctors determined that he was incapable of making business decisions. the judge says donald sterling can't stop the sale from going ahead if he appeals the case. sterling claims that his wife deceived him about the medical exams. she negotiated the sale after he was banned by the nba for making

racist remarks that were videotaped and made public. shelly sterling and steve balmer's lawyers expect the deal to close by august 15th. donald sterling aers lawyer say they do plan to file an appeal. >> didn't see this as the final battleground. so this is one stage of a long war. this is one battle. we had hoped for a different result. >> an nba spokesman says the league is pleased by the ruling and looks forward to the sale closing as soon as possible. but the ruling is up likely to put an end to this bizarre case. sterling has filed an anti-trust suit against the nba in federal court and is suing his wife and nba commissioner adam silver in state court in california. julia, the story that never quits, there will be updates on this one. >> i'm sure there will.

could another takeover concern at the hands of pfizer for astra? we've got your earnings preview coming up after the break. stay with us.

deutsche bank second quarter net profits missed expectations coming in at 257 million euros versus 545 million expected. the german lender said litigation costs for 2014 are unpredictable. pretax profits at the bank's closely watched assets in wealth management business just beat forecasts while profits at the private and business client fell short. relatively up changed in this session today. shares in ubs, though, trading to the downside now after the opening in the green.

you can see down 1.3%. this after the lender post ed second quarter pretax provtsdz. let's take a look at how pretax profits are gaining. rights now, the ftse 100 higher by 0.3%. the german markets managing to pull out of the red, higher by 0.1%. we have the micex in russia higher by just shy of 0.5% right now. continue to go focus on that today as we wait for the eu to announce more contreat details on further russian sanctions. let's give you a look at what's on the agenda today in the united states. the june s&p 500 case-shiller home price index is out at 9:00 a.m. eastern with prices of single family homes in several majors markets forecast to rise nearly 10%. at 10:00 a.m., july consumer confidence numbers, merck and pfizer report before the opening bell today out due u.p.s. and

the "new york times." and after the close we hear from american express, amgen and is twitter. the twitter ceo dick costolo will be on closing bell in an exclusive interview right after the company reports earnings at 4:00 p.m. eastern. let's give you a look at how the u.s. futures are fairing ahead of the equity markets open. right now, pulled back from the losses right now indicating lower by around 7 points for the dow. the s&p 500 a couple of points lower and the nasdaq similar story there, too. this follows a session yesterday of relatively little moves, the dow and the s&p 500 moving a touch higher, down 0.1% ending a touch lower by 0.1%. pfizer reports second quarter results at 7:00 a.m. eastern, the largest u.s. drugmaker is expected to pose flat earnings and moderately lower revenues as many of its top product phase new arrivals or generic drugs. investors will listen to comments about whether pfizer will review its requests to buy

astrazeneca. joining us now is the mrg at life sciences health care at soft and sullivan. thank you so much for joining us. what are your expectations here for merck? . well, i think it is competition from drugs such as singular and other drugs are expected to do well. some really -- is expected to do well. januvia will do well at least in the long-term if not in the short-term. we expect there to be a billion dollar market for 2017. and another area where i think

merck will do well is in the market and is looking for acquisition in that space. >> what about the pipeline here? on the website, it says 12 products in phase two trials, 14 drugs in phase three. what are we looking at as far as the pipeline is concerned for merck? >> well, i think the pipeline is pretty strong. >> now, something that has worked for merck and some investors suggest should be a focus for pfizer right now is the technology acquisitions that we've seen and not doing the astra deal as far as pfizer is concerned highlighted the pipeline issue for them. what are you expecting as far as their numbers are concerned and what are you expecting to hear on potential future acquisitions as far as astrazeneca being one of them? >> well, as far as pfizer is concerned, i think, again, it's a blockbuster drug and the sales

are going down. this is having an impact. in a couple of quarters, we haven't seen that. and the real terms for pfizer is its other blockbuster drug in the market. so where pfizer will be concerned because celebrex is expected to lose patents in the u.s. later this year. in 2017, pfizer would lose its key drug viagra. in 2018, a key blockbuster would lose in 2018. so what we are seeing is in a very short span, another three to four years, pfizer would lose as much as 20% sales because of these three drugs. so i think it's very important that phaser has to go for some kind of solution to strengthen its pipeline. and because of that, i would really think that pfizer would come back to a bit of -- and for

astrazeneca. mostly in november this year. >> herbalife's cycled quarter profits fell. adjusted results missed analyst forecasts bay penny, bracing the long streak of beating estimates. herbalife, which has been in a broad and long running dispute with bill ackman shares lower. similar story down 9.9% there. earlier, we were asking whether or not websites should be more open. this after okcupid revelations that they were following facebook's footstepses in experiment, users. stanley billionaire tweeted in to say dating websites are stage managed and thus it's a huge scam, anyway. follow us @cnbcwex.

julia boorstin will be speaking to twitter's ceo following the company's results at 4:00 p.m. eastern. that's it for today's show. thanks for watching "worldwide exchange." job boards with a single click; then simply select the best candidates from one easy to review list. you put up one post and the next day you have all these candidates. makes my job a lot easier. [ female announcer ] over 100,000 businesses have already used zip recruiter and now you can use zip recruiter for free at a special site for tv viewers; go to ziprecruiter.com/offer2.

good morning. welcome to "squawk box." darden restaurantses searching for a new head of the table after the ceo steps down. and donald sterling was stumped. a court ruling clears the way of the sale of the l.a. clippers to steal balmer. good morning, it's tuesday, july 29, 2014. "squawk box" begins now. >> good morning, everybody. welcome to "squawk box" here on

cnbc. i'm becky quick along with andrew ross sorkin and brian sullivan. joe is off this week. the fed is in focus today. the central bank set to begin a two-day meeting. most economists expect janet yellen and company to taper the fed's bond buying program by another $10 billion to $25 billion. steve liesman will join us with the exclusive fed survey coming up in the next hour. on today's economic calendar, we have the s&p case-shiller price home index coming out at 9:00 eastern. then an hour later, we get july consumer confidence. we have a flood of companies set to post quarterly results before the opening bell. get ready, folks. we've got pfizer, merck, etna, and siriusxm radio. after the bell, we'll hear from amgen, panera, american sxers. brian, we have to get ready because there is a flood. >> and a number of major companies have posted their results